Euro Disney S.C.A. Reports 2011 First Half Results

Euro Disney S.C.A. parent company of Euro Disney Associes S.C.A. the operator of Disneyland Paris, has reported the results of its consolidated group  for the first six months of fiscal year 2011 which ended 31 March  2011.

  • Total Revenues increased 8% to EUR 559 million, due to higher Resort volumes and average spending per room.
  •  EBITDA increased EUR 18 million to EUR 25 million
  • Net loss narrowed by EUR 15 million to EUR 99 million
  • Repayment of EUR 46 million of debt during the First Half

Key Financial Highlights                 First Half
(EUR in millions, unaudited) 2011 2010
Revenues 559.1 519.3
Costs and expenses (620.2) (593.6)
Operating margin (61.1) (74.3)
Plus: Depreciation and amortization 86.3 81.8
EBITDA 1 25.2 7.5
EBITDA as a percentage of revenues 4.5% 1.4%
Net loss (99.5) (114.5)
Attributable to equity holders of
the parent (82.9) (95.2)
Attributable to minority interests (16.6) (19.3)
Cash flow generated by operating
activities 6.4 28.1
Cash flow used in investing
activities (37.6) (39.9)
Free cash flow used 1 (31.2) (11.8)
Cash and cash equivalents, end of
period 323.7 283.5

Key Operating Statistics [1]

Theme parks attendance (in millions) 6.9 6.5
Average spending per guest (in EUR) 43.32 43.51
Hotel occupancy rate 83.4% 79.6%
Average spending per room (in EUR) 200.64 189.67

Commenting on the results, Philippe Gas, Chief Executive Officer of Euro
Disney S.A.S, said: “As we head into our important second semester, we are encouraged to end
the first semester with our fourth consecutive quarter of growth in Resort
revenues. We increased our attendance by 5% while essentially maintaining
guest spending in the parks, and also improved both hotel occupancy and guest
spending per room.

We are encouraging our guests to book further in advance of their
vacation by providing them with early-booker discounts and they are
responding favorably. This has given us greater business visibility and
allows us to better manage demand.

We continue to focus on delivering a high quality, unique Disney
experience for our guests. We recently launched the Disney Magical Moments
Festival, our new annual celebration. I would also like to recognise our Cast
Members who are dedicated to bringing the Disney magic to life for our
guests.”

Seasonality

The Group’s business is subject to the effects of seasonality and the
annual results are significantly dependent on the second half of the year,
which traditionally includes the high season at Disneyland(R) Paris. Results
have been unfavorably impacted due to a shift in the Easter vacation period
for some of our key markets to the second semester. Consequently, the
operating results for the First Half are not necessarily indicative of
results to be expected for the full fiscal year.

Revenues by Operating Segment

First Half Variance
(EUR in millions, unaudited) 2011 2010 Amount %
Theme parks 300.4 287.3 13.1 4.6%
Hotels and Disney(R) Village 228.2 205.3 22.9 11.2%
Other 19.1 24.7 (5.6) (22.7)%
Resort operating segment 547.7 517.3 30.4 5.9%
Real estate development
operating segment 11.4 2.0 9.4 >100%
Total revenues 559.1 519.3 39.8 7.7%

Resort operating segment revenues increased by 6% to EUR 547.7 million
from EUR 517.3 million in the prior-year period.

Theme parks revenues increased by 5% to EUR 300.4 million from EUR 287.3
million
in the prior-year period due to a 5% increase in attendance to 6.9
million. This increase in attendance resulted from more guests visiting from
France and Belgium, partially offset by a decline in visits from the
Netherlands
. Average spending per guest remained stable compared to the
prior-year period.

Hotels and Disney(R) Village revenues increased by 11% to EUR 228.2
million
from EUR 205.3 million in the prior-year period, mainly due to a 6%
increase in average spending per room to EUR 200.64, combined with a 3.8
percentage points increase in hotel occupancy to 83.4%. The increase in
average spending per room was due to higher spending on food and beverage and
an increase in daily room rates. The increase in hotel occupancy resulted
from 40,000 more room nights sold compared to the prior-year period, due to
more guests visiting from France, and higher business group activity.
Other revenues, which primarily include participant sponsorships,
transportation and other travel services sold to guests, decreased by EUR 5.6
million to EUR 19.1 million
compared to EUR 24.7 million in the prior-year
period. This decrease was primarily due to lower sponsorship revenues and a
legal settlement gain in the prior-year period.

Real estate development operating segment revenues increased EUR 9.4
million to EUR 11.4 million
, compared to EUR 2.0 million in the prior-year
period. This increase is due to a greater number of transactions compared to
the prior-year period.

Costs and Expenses

First Half Variance
(EUR in millions,
unaudited) 2011 2010 Amount %
Direct operating costs
(1) 500.6 478.5 22.1 4.6%
Marketing and sales
expenses 68.1 63.9 4.2 6.6%
General and
administrative expenses 51.5 51.2 0.3 0.6%
Costs and expenses 620.2 593.6 26.6 4.5%

(1) Direct operating costs primarily include wages and benefits for
employees in operational roles, depreciation and amortization related to
operations, cost of sales, royalties and management fees. For the First Half
and the corresponding prior-year period, royalties and management fees were
EUR 31.2 million and EUR 30.1 million, respectively.

Direct operating costs increased EUR 22.1 million compared to the
prior-year period, mainly due to volume-related resort and real estate
development costs, labor rate inflation and costs related to new content.
Marketing and sales expenses increased EUR 4.2 million compared to the
prior-year period, primarily due to higher advertising rates, a change in the
timing of marketing and sales initiatives and labor rate inflation.

Net Financial Charges

First Half Variance
(EUR in millions,
unaudited) 2011 2010 Amount %
Financial income 2.2 1.6 0.6 37.5%
Financial expense (40.8) (41.7) 0.9 (2.2)%
Net financial charges (38.6) (40.1) 1.5 (3.7)%

Financial income increased EUR 0.6 million due to higher average cash and
cash equivalents and higher short term interest rates compared to the
prior-year period.

Financial expense decreased EUR 0.9 million due to lower average
borrowings compared to the prior-year period.

Net Loss

For the First Half, the net loss of the Group amounted to EUR 99.5
million
compared to EUR 114.5 million for the prior-year period. Net loss
attributable to equity holders of the parent amounted to EUR 82.9 million and
net loss attributable to minority interests amounted to EUR 16.6 million. The
decrease of the Group’s net loss is due to the increased revenues and the
improved operating margin compared to the prior-year period.

Cash flows

Cash and cash equivalents as of March 31, 2011 were EUR 323.7 million,
down EUR 76.6 million compared with September 30, 2010, and up EUR 40.2
million
compared with March 31, 2010. These variances resulted from:

First Half      Variance
(EUR in millions, unaudited) 2011 2010
Cash flow generated by operating activities 6.4 28.1 (21.7)
Cash flow used in investing activities (37.6) (39.9) 2.3
Free cash flow used (31.2) (11.8) (19.4)
Cash flow used in financing activities (45.4) (45.0) (0.4)
Change in cash and cash equivalents (76.6) (56.8) (19.8)

Cash and cash equivalents, beginning of
period 400.3 340.3 60.0
Cash and cash equivalents, end of period 323.7 283.5 40.2

Free cash flow used for the First Half was EUR 31.2 million compared to
EUR 11.8 million used in the prior-year period.
Cash flow generated by operating activities for the First Half totaled
EUR 6.4 million compared to EUR 28.1 million generated in the prior-year
period. This decrease resulted from increased working capital requirements,
partly offset by the improved operating performance during the First Half.
Last year, changes in working capital benefitted from the unconditional
deferral into long-term debt of EUR 25.0 million of royalties and management
fees, while no such benefit occurred this year.

Cash flow used in investing activities for the First Half totaled EUR
37.6 million
compared to EUR 39.9 million used in the prior-year period.
Cash flow used in financing activities corresponds principally to the
repayment of the debt and totaled EUR 45.4 million for the First Half
compared to EUR 45.0 million used in the prior-year period.
The Group has covenants under its debt agreements which limit its
investments and financing activities.

The Group also has defined annual performance objectives. In fiscal year
2010, the Group did not meet its performance objectives and had to defer EUR
45.2 million
of royalties and management fees due to The Walt Disney Company
(“TWDC”) and interest due to the Caisse des depots et consignations into
long-term subordinated debt.

As a result of utilizing these deferrals available to the Group with
respect to fiscal year 2010, the Group’s recurring annual investment
budget[2] for fiscal year 2011 and thereafter is permitted up to 3% of the
prior fiscal year’s adjusted consolidated revenues2. On March 31, 2011, the
Group obtained lenders’ agreement to increase the recurring annual investment
budget from EUR 37 million to EUR 81 million for fiscal year 2011, and up to
5% of the prior fiscal year’s adjusted consolidated revenues[3] for fiscal
year 2012.

For fiscal year 2011, if compliance with these financial performance
covenants cannot be achieved, the Group will have to appropriately reduce
operating costs, curtail a portion of planned capital expenditures and/or
seek assistance from TWDC or other parties as permitted under the debt
agreements. Although no assurances can be given, management believes the
Group has adequate cash and liquidity for the foreseeable future based on
existing cash positions, liquidity from the EUR 100.0 million line of credit
available from TWDC, and the provisions for the conditional deferral of
certain royalties and management fees and interest.

Update on recent and upcoming events

Disney Magical Moments Festival

The Disney Magical Moments Festival was launched in April. It celebrates
bringing the Disney magic to life for families and friends. Guests will have
even more opportunities this year to share magical Disney moments with their
favorite Disney characters.

Scheduled Debt Repayments

The Group plans to repay EUR 77.5 million of its borrowings in the last
six months of fiscal year 2011, consistent with the scheduled maturities.
First Half Results Webcast: May 10, 2011 at 11:00 CET

To connect to the webcast:
http://corporate.disneylandparis.com/investor-relations/publications

Additional Financial Information can be found on the Internet at
http://corporate.disneylandparis.com/

Code ISIN: FR0010540740
Code Reuters: EDL.PA
Code Bloomberg: EDL FP

The Group operates Disneyland(R) Paris which includes: Disneyland(R)
Park, Walt Disney Studios(R) Park, seven themed hotels with approximately
5,800 rooms (excluding approximately 2,400 additional third-party rooms
located on the site), two convention centers, Disney(R) Village, a dining,
shopping and entertainment centre, and a 27-hole golf course. The Group’s
operating activities also include the development of the 2,230-hectare site,
half of which is yet to be developed. Euro Disney S.C.A.’s shares are listed
and traded on Euronext Paris.

Attachments: Exhibit 1 - Consolidated Statement of Income
Exhibit 2 - Consolidated Segment Statement of Income
Exhibit 3 - Consolidated Statement of Financial Position
Exhibit 4 - Consolidated Statement of Cash Flows
Exhibit 5 - Consolidated Statement of Changes in Equity
Exhibit 6 - Statement of Changes in Borrowings
Exhibit 7 - Definitions
EXHIBIT 1

EURO DISNEY S.C.A.
Fiscal Year 2011

First Half Results
Six Months Ended March 31, 2011

CONSOLIDATED STATEMENT OF INCOME


First Half Variance
(EUR in millions, unaudited) 2011 2010 Amount %

Revenues 559.1 519.3 39.8 7.7%
Costs and expenses (620.2) (593.6) (26.6) 4.5%
Operating margin (61.1) (74.3) 13.2 (17.8)%
Net financial charges (38.6) (40.1) 1.5 (3.7)%
Gain / (loss) from equity
investments 0.2 (0.1) 0.3 n/m
Loss before taxes (99.5) (114.5) 15.0 (13.1)%
Income taxes - - - n/a
Net loss (99.5) (114.5) 15.0 (13.1)%
Net loss attributable to:
Equity holders of the parent (82.9) (95.2) 12.3 (12.9)%
Minority interests (16.6) (19.3) 2.7 (14.0)%

n/m: not meaningful

n/a: not applicable


EXHIBIT 2

EURO DISNEY S.C.A.
Fiscal Year 2011

First Half Results
Six Months Ended March 31, 2011

CONSOLIDATED SEGMENT STATEMENT OF INCOME

Resort operating segment

First Half Variance
(EUR in millions, unaudited) 2011 2010 Amount %

Revenues 547.7 517.3 30.4 5.9%
Costs and expenses (614.0) (591.8) (22.2) 3.8%
Operating margin (66.3) (74.5) 8.2 (11.0)%
Net financial charges (38.4) (40.0) 1.6 (4.0)%
Gain from equity investments 0.2 - 0.2 n/a
Loss before taxes (104.5) (114.5) 10.0 (8.7)%
Income taxes - - - n/a
Net loss (104.5) (114.5) 10.0 (8.7)%

n/a: not applicable.


Real estate development operating segment

First Half Variance
(EUR in millions, unaudited) 2011 2010 Amount %

Revenues 11.4 2.0 9.4 >100%
Costs and expenses (6.2) (1.8) (4.4) >100%
Operating margin 5.2 0.2 5.0 >100%
Net financial charges (0.2) (0.1) (0.1) n/m
Loss from equity investments - (0.1) 0.1 n/m
Income before taxes 5.0 - 5.0 n/a
Income taxes - - - n/a
Net profit 5.0 - 5.0 n/a

n/m: not meaningful.

n/a: not applicable.


EXHIBIT 3

EURO DISNEY S.C.A.
Fiscal Year 2011

First Half Results
Six Months Ended March 31, 2011

CONSOLIDATED STATEMENT OF FINANCIAL POSITION



(EUR in millions) March 31, 2011 September 30, 2010
(unaudited)
Non-current assets
Property, plant and equipment, net 1,911.9 1,974.4
Investment property 14.8 14.8
Intangible assets 43.5 48.1
Restricted cash 77.7 74.6
Other 12.8 12.6
2,060.7 2,124.5
Current assets
Inventories 35.8 29.2
Trade and other receivables 113.2 116.3
Cash and cash equivalents 323.7 400.3
Other 16.6 15.5
489.3 561.3
Total assets 2,550.0 2,685.8

Shareholders' equity
Share capital 39.0 39.0
Share premium 1,627.3 1,627.3
Accumulated deficit (1,601.3) (1,518.4)
Other (4.5) (6.6)
Total shareholders' equity 60.5 141.3

Minority interests 77.9 94.0
Total equity 138.4 235.3
Non-current liabilities
Borrowings 1,758.0 1,811.7
Deferred income 10.2 10.6
Provisions 17.8 17.7
Other 70.4 72.4
1,856.4 1,912.4
Current liabilities
Trade and other payables 285.9 317.9
Borrowings 141.2 123.4
Deferred income 125.5 93.2
Other 2.6 3.6
555.2 538.1
Total liabilities 2,411.6 2,450.5
Total equity and liabilities 2,550.0 2,685.8



EXHIBIT 4

EURO DISNEY S.C.A.
Fiscal Year 2011

First Half Results
Six Months Ended March 31, 2011

CONSOLIDATED STATEMENT OF Cash FlowS

First Half
(EUR in millions, unaudited) 2011 2010

Net loss (99.5) (114.5)
Items not requiring cash outlays or with no impact on
working capital:
- Depreciation and amortization 86.3 81.8
- Increase in valuation and reserve allowances 2.1 0.2
- Other 1.5 2.8

Net change in working capital account balances:
- Change in receivables, deferred income and other
assets 31.1 45.0
- Change in inventories (7.1) 4.5
- Change in payables and other liabilities (8.0) 8.3
Cash flow generated by operating activities 6.4 28.1

Capital expenditures for tangible and intangible assets (36.8) (39.6)
Increase in equity investments (0.8) (0.3)
Cash flow used in investing activities (37.6) (39.9)

Net sales / (purchases) of treasury shares 0.2 (0.2)
Repayments of borrowings (45.6) (44.8)
Cash flow used in financing activities (45.4) (45.0)

Change in cash and cash equivalents (76.6) (56.8)
Cash and cash equivalents, beginning of period 400.3 340.3
Cash and cash equivalents, end of period 323.7 283.5



SUPPLEMENTAL CASH FLOW INFORMATION


First Half
(EUR in millions, unaudited) 2011 2010
Supplemental cash flow information:
Interest paid 23.3 24.9

Non-cash financing and investing transactions:
Deferral into borrowings of accrued interest under TWDC
and CDC subordinated loans 9.2 9.1
Deferral into borrowings of royalties and management
fees
- -

EXHIBIT 5

EURO DISNEY S.C.A.
Fiscal Year 2011

First Half Results
Six Months Ended March 31, 2011

CONSOLIDATED STATEMENT OF CHANGES IN Equity

Net loss
for
September the First March 31,
(EUR in millions) 30, 2010 Half Other 2011
(unaudited) (unaudited) (unaudited)
Shareholders' equity
Share capital 39.0 - - 39.0
Share premium 1,627.3 - - 1,627.3
Accumulated deficit (1,518.4) (82.9) - (1,601.3)
Other (6.6) - 2.1 (4.5)
Total shareholders'
equity 141.3 (82.9) 2.1 60.5

Minority interests 94.0 (16.6) 0.5 77.9

Total equity 235.3 (99.5) 2.6 138.4


EXHIBIT 6

STATEMENT OF CHANGES IN BORROWINGS


First Half 2011 (unaudited)
September Transfers
(EUR in millions) 30, 2010 Increase Decrease (4)

CDC senior loans 237.0 - - (1.1)
CDC subordinated loans 798.1 7.1 (1) - (1.0)
Credit Facility - Phase IA 34.7 0.3 (2) - (31.5)
Credit Facility - Phase IB 49.5 0.2 (2) - (10.1)
Partner Advances - Phase IA 272.8 - - (10.8)
Partner Advances - Phase IB 85.9 - - (8.9)
TWDC loans 333.7 2.1 (3) - -
Non-current borrowings 1,811.7 9.7 - (63.4)
CDC senior loans 1.9 - (1.0) 1.1
CDC subordinated loans 2.1 - (0.9) 1.0
Credit Facility - Phase IA 63.1 - (31.5) 31.5
Credit Facility - Phase IB 20.2 - (10.1) 10.1
Partner Advances - Phase IA 32.1 - - 10.8
Partner Advances - Phase IB 4.0 - (2.1) 8.9
Current borrowings 123.4 - (45.6) 63.4
Total borrowings 1,935.1 9.7 (45.6) -

(table continues)

(EUR in millions) March 31, 2011
(unaudited)
CDC senior loans 235.9
CDC subordinated loans 804.2
Credit Facility - Phase IA 3.5
Credit Facility - Phase IB 39.6
Partner Advances - Phase IA 262.0
Partner Advances - Phase IB 77.0
TWDC loans 335.8
Non-current borrowings 1,758.0
CDC senior loans 2.0
CDC subordinated loans 2.2
Credit Facility - Phase IA 63.1
Credit Facility - Phase IB 20.2
Partner Advances - Phase IA 42.9
Partner Advances - Phase IB 10.8
Current borrowings 141.2
Total borrowings 1,899.2

(1) Increases are related to the contractual deferral of interest on
certain CDC subordinated loans, including EUR 5.1 million of interest
incurred in the First Half that was conditionally deferred based on the
Group’s 2010 performance.

(2) Effective interest rate adjustments. As part of the 2005 financial
restructuring, these loans were significantly modified. In accordance with
IAS 39, the carrying value of this debt was replaced by the fair value after
modification. The effective interest rate adjustment has been calculated
reflecting an estimated market interest rate at the time of the modification
that was higher than the nominal rate.

(3) Increases are related to the contractual deferral of interest on TWDC
loans.

(4) Transfers from non-current borrowings to current borrowings are based
on the scheduled debt repayments over the next twelve months.

EXHIBIT 7
EURO DISNEY S.C.A. Fiscal Year 2011
First Half Results Six Months Ended March 31, 2011
DEFINITIONS

EBITDA corresponds to earnings before interest, taxes, depreciation and
amortization. EBITDA is not a measure of financial performance defined under
IFRS, and should not be viewed as a substitute for operating margin, net
profit / (loss) or operating cash flows in evaluating the Group’s financial
results. However, management believes that EBITDA is a useful tool for
evaluating the Group’s performance.

Free cash flow is cash generated by operating activities less cash used
in investing activities. Free cash flow is not a measure of financial
performance defined under IFRS, and should not be viewed as a substitute for
operating margin, net profit / (loss) or operating cash flows in evaluating
the Group’s financial results. However, management believes that Free cash
flow is a useful tool for evaluating the Group’s performance.
Theme parks attendance corresponds to the attendance recorded on a “first
click” basis, meaning that a person visiting both parks in a single day is
counted as only one visitor.

Average spending per guest is the average daily admission price and
spending on food, beverage and merchandise and other services sold in the
theme parks, excluding value added tax.

Hotel occupancy rate is the average daily rooms occupied as a percentage
of total room inventory (total room inventory is approximately 5,800 rooms).
Average spending per room is the average daily room price and spending on
food, beverage and merchandise and other services sold in hotels, excluding
value added tax.

———————————
[1] Please refer to Exhibit 7 for the definition of EBITDA, Free cash
flow and key operating statistics.
[2] Including both capital investments and fixed asset rehabilitations,
which are either treated as an expense or capitalized as fixed assets under
IFRS.
[3] Adjusted consolidated revenues correspond to consolidated revenues
under IFRS, excluding participant sponsorships and after removing the effect
of certain differences between IFRS and French accounting principles.

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