printmgr file - Euro Disney SCA

Transcription

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French limited partnership with a share capital of € 38,976,490
Registered office: Immeubles Administratifs, Route Nationale 34, 77700 Chessy, France
R.C.S.: 334 173 887 Meaux.
REFERENCE DOCUMENT
Pursuant to Article 212-13 of the Règlement général of the Autorité des marchés financiers (“AMF”), the present Reference
Document was filed with the AMF on January 17, 2012. This document has been prepared by the issuer and under
the responsibility of its signatories. This document cannot be used for a financial operation unless it is completed by
a note d’opération approved by the AMF.
TABLE OF CONTENT
A.
GENERAL OVERVIEW OF THE GROUP
A.1. DESCRIPTION OF THE GROUP
A.1.1. Corporate Organization of the Group
A.1.2. Simplified Ownership Structure of the Group as of September 30, 2011
A.1.3. Operational Organization of the Group
A.1.4. Geographical Situation of the Resort
A.2. STRATEGY OF THE GROUP
A.2.1. Strategic Overview
A.2.2. Marketing and Sales Overview
A.3. HISTORY AND DEVELOPMENT OF THE GROUP
A.3.1. Development of the Resort and its Surrounding Areas
A.3.2. Financing of the Resort’s Development
A.4. SIGNIFICANT AGREEMENTS OF THE GROUP
A.4.1. Significant Undertakings Related to the Resort’s Development
A.4.2. Other Significant Operating Agreements
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4
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6
7
14
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15
16
19
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21
24
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28
B.
ANNUAL FINANCIAL REPORT
B.1. KEY CONSOLIDATED FINANCIAL DATA
B.2. GROUP AND PARENT COMPANY MANAGEMENT REPORT
B.3. CONSOLIDATED FINANCIAL STATEMENTS
B.4. STATUTORY AUDITORS’ REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS
B.5. COMPANY FINANCIAL STATEMENTS PREPARED UNDER FRENCH ACCOUNTING PRINCIPLES
B.6. STATUTORY AUDITORS’ REPORT ON THE FINANCIAL STATEMENTS
B.7. STATUTORY AUDITORS’ SPECIAL REPORT ON RELATED-PARTY AGREEMENTS AND COMMITMENTS
B.8. SUPERVISORY BOARD GENERAL REPORT ON EURO DISNEY S.C.A., ITS SUBSIDIARIES AND CONSOLIDATED ENTITIES
B.9. EURO DISNEY S.C.A. SUPERVISORY BOARD SPECIAL REPORT ON RELATED-PARTY AGREEMENTS
29
30
32
70
115
117
126
128
130
133
C.
ADDITIONAL INFORMATION
C.1. THE COMPANY AND ITS CORPORATE GOVERNANCE
C.1.1. The Company
C.1.2. The Company’s Corporate Governance Bodies
C.1.3. Report of the Chairman of the Supervisory Board on the Organization and Role of the Supervisory
Board and on the Company’s Internal Control Organization and Procedures
C.1.4. Statutory Auditors’ Report on the report prepared by the Chairman of the Supervisory Board
C.2. INFORMATION CONCERNING THE SHARE CAPITAL OF THE COMPANY
C.2.1. Amount and Changes to the Share Capital
C.2.2. Reverse Stock Split
C.2.3. Liquidity Contracts
C.2.4. Breakdown of the Share Capital and Voting Rights
C.2.5. Markets for the Securities of the Company
C.2.6. Market Information
C.2.7. Dividends
C.3. INFORMATION CONCERNING THE GROUP’S FINANCIAL COVENANT OBLIGATIONS
C.3.1. Performance Indicator
C.3.2. Changes in Accounting Principles
C.4. DOCUMENTS AVAILABLE TO THE PUBLIC
C.4.1. Consultation of the Documents and Information related to the Company
C.4.2. List of the Information Published or Made Available to the Public over the Past Twelve Months
Pursuant to Article L.451-1-1 of the Code monétaire et financier and Article 222-7 of the Règlement
général of the AMF
C.5. RESPONSIBILITY FOR THIS REFERENCE DOCUMENT AND ANNUAL FINANCIAL REPORT
C.5.1. Certification of the Person Responsible for this Reference Document and Annual Financial Report
C.5.2. Person Responsible for the Information
C.5.3. Statutory Auditors
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154
154
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163
164
164
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167
168
GLOSSARY
170
TABLES OF CORRESPONDENCE
174
TECHNICAL AND OTHER KEY TERMS INDICATED THROUGHOUT THE DOCUMENT BY THE USE OF
CAPITALS ARE DEFINED IN THE GLOSSARY.
This document is a translation from French into English and has no other value than an informative one. Should
there be any difference between the French and the English version, only the text in French language shall be
deemed authentic and considered as expressing the exact information published by the Group.
A
A.1
A.2
A.3
A.4
A.
Euro Disney S.C.A. - 2011 Reference Document
3
A
Description of the Group
A.1. DESCRIPTION OF THE GROUP
Euro Disney S.C.A. (the “Company”), with its owned and controlled subsidiaries (the “Legally Controlled Group”)
and its consolidated special-purpose financing companies (the “Financing Companies”), together the “Group”, has
operated the Disneyland® Paris site (the “Resort”) and its surrounding areas since April 12, 1992 (the “Opening
Day”). The Resort is comprised of the Disneyland® Park and the Walt Disney Studios® Park (collectively the “Theme
Parks”), seven themed hotels (the “Hotels”) with approximately 5,800 rooms, two convention centers, the Disney
Village® entertainment center, comprised of shopping and restaurant facilities, and the Golf Disneyland®, a 27-hole
golf course (the “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.
Most of the Resort’s facilities are leased from the Financing Companies, with the exception of the Walt Disney
Studios Park, certain attractions in the Disneyland Park, two hotels and the Golf Course, which are owned by the
Legally Controlled Group. The Legally Controlled Group has no ownership interest in the Financing Companies.
The Resort is modeled on the concepts developed and used by The Walt Disney Company (“TWDC”) for its own
theme park and hotel infrastructure. The Company was granted a license to use any present or future intellectual or
industrial property rights of TWDC (see section A.4.1. “Significant Undertakings Related to the Resort’s
Development”, sub-section “License Agreement” for more details).
A.1.1.
Corporate Organization of the Group
Euro Disney S.C.A. – Holding Company
Euro Disney S.C.A. is a French limited partnership, listed on Euronext Paris, and is the holding company of the
Legally Controlled Group. The main asset of the Company is its investment in 82% of the share capital of its
subsidiary, Euro Disney Associés S.C.A. (“EDA”). The general partner of the Company is EDL Participations S.A.S., a
French simplified corporation and an indirect wholly-owned subsidiary of TWDC. The management company of the
Company is Euro Disney S.A.S. (the “Gérant”), also a French simplified corporation and an indirect wholly-owned
subsidiary of TWDC.
Operating Companies
Euro Disney Associés S.C.A.
EDA operates the Disneyland Park and the Walt Disney Studios Park, the Disneyland® Hotel, Disney’s Davy Crockett
Ranch and the Golf Course. In addition, EDA manages the real estate development operating segment of the
Group.
EDA, structured as a French limited partnership, is a direct subsidiary of the Company, which holds 82% of its share
capital. The remaining 18% is held by two French simplified corporations that are indirect wholly-owned
subsidiaries of TWDC: EDL Corporation S.A.S. and Euro Disney Investments S.A.S.
The general partners of EDA are Euro Disney Commandité S.A.S., a French simplified corporation and a direct
wholly-owned subsidiary of the Company, EDL Corporation S.A.S. and Euro Disney Investments S.A.S. The
management company of EDA is Euro Disney S.A.S.
EDL Hôtels S.C.A.
EDL Hôtels S.C.A., a wholly-owned subsidiary of EDA, operates Disney’s Hotel New York®, Disney’s Newport Bay
Club®, Disney’s Sequoia Lodge®, Disney’s Hotel Cheyenne®, Disney’s Hotel Santa Fe® as well as the Disney Village®,
and is also structured as a French limited partnership.
The general partner of EDL Hôtels S.C.A. is EDL Hôtels Participations S.A.S., a French simplified corporation
directly wholly-owned by EDA. The management company of EDL Hôtels S.C.A. is also Euro Disney S.A.S.
4
Financing Companies
The Financing Companies described below are not owned by the Legally Controlled Group but are included in the
consolidated financial statements under International Financial Reporting Standards (“IFRS1”) (see section B.3.
“Consolidated Financial Statements”, note 3.1.1. “Consolidation Principles”).
A
A.1
Phase IA Financing Company
A.2
Euro Disneyland S.N.C. (the “Phase IA Financing Company”), structured as a French partnership, leases the assets
of the Disneyland® Park and the underlying land to EDA, under a financial lease (see section A.3. “History and
Development of the Group” for more details).
The partners of the Phase IA Financing Company are various banks, financial institutions and companies holding an
aggregate participation of 83%, and Euro Disneyland Participations S.A.S., a French simplified corporation and an
indirect wholly-owned subsidiary of TWDC, holding a participation of 17%. EDA is jointly liable for a significant
portion of the indebtedness of the Phase IA Financing Company (approximately 66% of the outstanding
indebtedness due under the Phase IA Credit Facility2).
A.3
A.4
The legal structure of the Phase IA Financing Company enabled its partners to benefit from French tax losses
generated by this company. These tax benefits were limited to € 304.9 million and were generated from calendar
years 1989 to 1992 due to interest charges during the construction period and depreciation expenses. In return for
these corresponding benefits, the partners agreed to provide subordinated partner advances to the Phase IA
Financing Company at a favorable interest rate.
The management company of the Phase IA Financing Company is Société de Gérance d’Euro Disneyland S.A.S., a
French simplified corporation and an indirect wholly-owned subsidiary of TWDC.
Phase IB Financing Companies
The six special-purpose companies3 (the “Phase IB Financing Companies”) which were established for the financing
of five theme hotels and the Disney Village®, defined as the “Phase IB Facilities”, are structured as French
partnerships and are governed by the same principles as the Phase IA Financing Company. Each of these companies
(i) rents from EDL Hôtels S.C.A. the land on which the related hotel or the Disney Village facilities, as the case may
be, are located, (ii) owns the related hotel or the Disney Village, as the case may be, and (iii) leases the related hotel
or the Disney Village, to EDL Hôtels S.C.A. (see section A.3. “History and Development of the Group” for more
details).
The partners of the Phase IB Financing Companies are various banks and financial institutions that are also lenders
to the Phase IB Financing Companies. EDL Hôtels S.C.A. has guaranteed all the obligations of the Phase IB
Financing Companies with respect to the loans extended by their lenders and partners.
The legal structures of the Phase IB Financing Companies enabled their partners to benefit from French tax losses
generated by these companies. These tax benefits were limited to € 78.0 million and were generated in calendar
years 1991 and 1992 due to interest charges during the construction period and depreciation expenses. In return
for the corresponding benefits, the partners agreed to provide subordinated partner advances to the Phase IB
Financing Companies at a favorable interest rate.
The management company of each of the Phase IB Financing Companies is EDL Services S.A.S., a direct wholly-owned
subsidiary of EDA.
1
2
3
The term “IFRS” refers collectively to International Accounting Standards (“IAS”), International Financial Reporting Standards (“IFRS”),
Standing Interpretations Committee (“SIC”) interpretations and International Financial Reporting Interpretations Committee (“IFRIC”)
interpretations issued by the International Accounting Standards Board (“IASB”).
Corresponds to a credit facility agreement between EDA, the Phase IA Financing Company and a syndicate of international banks. See
section B.3. “Consolidated Financial Statements”, note 12.2. “Credit Facility – Phase IA” for more details.
The six Phase IB Financing Companies are as follows: Hotel New York Associés S.N.C., Newport Bay Club Associés S.N.C., Sequoia Lodge Associés
S.N.C., Hotel Cheyenne Associés S.N.C., Hotel Santa Fe Associés S.N.C. and Centre de Divertissements Associés S.N.C. These companies rent the
land on which the following hotels are located from EDL Hôtels S.C.A: Disney’s Hotel New York®, Disney’s Newport Bay Club®, Disney’s Sequoia
Lodge®, Disney’s Hotel Cheyenne®, Disney’s Hotel Santa Fe® and the Disney Village, respectively.
5
A
Centre de Congrès Newport S.A.S.
Centre de Congrès Newport S.A.S., a French simplified corporation and an indirect wholly-owned subsidiary of
TWDC, entered into a ground lease with EDL Hôtels S.C.A. pursuant to which it financed the construction of the
Newport Bay Club Convention Center. Upon completion, the Newport Bay Club Convention Center was leased back
to EDL Hôtels S.C.A.
A.1.2.
Simplified Ownership Structure of the Group as of September 30, 2011
EDL
Participations
S.A.S.
Public shareholders*
100%
99.9%
60.2%
EDL
Holding
Company
LLC
39.8%
Euro
Disney
S.C.A.
100%
Phase IA
other
partners
Euro
Disney
Commandité
S.A.S.
82%
83%
100%
T
W
D
C
100%
Euro
Disney
S.A.S.
Euro
Disney
Investments
S.A.S.
Euro
Disney
Associés
S.C.A.
100%
100%
Euro
Disneyland
S.N.C.
Owns
Disneyland
Park
9%
99.99%
Shareholders
and
General
Partners
EDL
Corporation
S.A.S.
Lease
contract
(Disneyland
Park)
100%
EDL
Hôtels
S.C.A.
9%
Lease contract
(Newport Bay
Club Convention
Center)
Centre
de Congrès
Newport
S.A.S
EDL
Services
S.A.S.
Phase IB
partner
EURO DISNEY
CONSOLIDATED
GROUP OPERATES
Disneyland® Park
Walt Disney Studios® Park
Disneyland® Hotel
Disney’s Hotel New York®
Disney’s Sequoia Lodge®
Disney’s Newport Bay Club®
Disney’s Hotel Cheyenne®
Disney’s Hotel Santa Fe®
Disney’s Davy Crockett Ranch
Newport Bay Club Convention Center
Disney Village®
Golf Disneyland®
Legend:
100%
Lease
contracts
of
Phase IB
facilities
Phase IB
ﬁnancing
companies
own the
phase IB
facilities
Ownership/
Shareholders
General Partner
Gérant
*Including Kingdom 5-KR-134 Ltd & Kingdom 5-KR-11 Ltd
(Prince Alwaleed), 10.0%
100%
Euro
Disneyland
Participations
S.A.S
17%
See section B.3. “Consolidated Financial Statements”, note 1.1. “Structure of the Group” for a comprehensive
schedule of entities comprising the Group and section C.2.4. “Breakdown of the Share Capital and Voting Rights”
for more details on the shareholding composition of the Company.
6
A.1.3.
Operational Organization of the Group
A
The Group operates in the following operating segments:
Resort operating segment includes the operation of the Theme Parks, the Hotels, the Disney Village® and the
various services that are provided to guests visiting the Resort destination; and
•
•
Real estate development operating segment includes the design, planning and monitoring of improvements
and additions to the existing Resort activity, as well as other retail, office and residential real estate projects,
whether financed internally or through third-party partners.
A.1
A.2
A.3
Operating Segments Data
(€ in millions, except where indicated)
A.4
2011
2010
2009
1,275.2
1,215.2
1,212.1
22.5
59.8
17.9
1,297.7
1,275.0
1,230.0
(1,274.0)
(1,207.6)
(1,194.8)
(12.2)
(33.3)
(8.8)
(1,286.2)
(1,240.9)
(1,203.6)
(74.0)
(71.5)
(72.0)
10.1
26.3
9.0
(63.9)
(45.2)
(63.0)
Key Components of Operating Results:
Total Group revenues
Resort operating segment
Real estate development operating segment
Total Group costs and expenses
Total Group net (loss) / profit
Key Operating Indicators:
Theme Parks
Attendance (in millions of guests)(1)
15.6
15.0
15.4
Average spending per guest (in €)(2)
46.23
45.30
44.22
Hotels
Occupancy rate(3)
Average spending per room (in €)(4)
(1)
(2)
(3)
(4)
87.1%
219.74
85.4%
209.78
87.3%
201.24
Theme Parks attendance is recorded on a “first click” basis, meaning that a person visiting both parks in a single day is counted as only one
visitor.
Average daily admission price and spending on food, beverage, merchandise and other services sold in the Theme Parks, excluding value added
tax.
Average daily rooms occupied as a percentage of total room inventory (approximately 5,800 rooms).
Average daily room price and spending on food, beverage, merchandise and other services sold in the Hotels, excluding value added tax.
Resort Operating Segment
Theme Parks
In Fiscal Year 2011, Theme Parks revenues increased 6% to € 724.3 million from € 685.3 million in the prior-year,
due to a 4% increase in attendance, combined with a 2% increase in average spending per guest (see section B.2.
“Group and Parent Company Management Report” for more information).
Theme Parks activity includes all operations of the Disneyland® Park and the Walt Disney Studios® Park, including
activities related to merchandise, food and beverage, special events and all other services provided to guests in the
Theme Parks and its surroundings. Theme Parks revenues are primarily driven by two factors: the number of guests
and the total average spending per guest (which includes the admission price and spending on food, beverage and
merchandise).
7
A
The Theme Parks are operated on a year-round basis. Due to the nature of the business, operations are subject to
seasonal fluctuations and to significant fluctuations between weekdays and weekends, especially in off-peak seasons.
Under a licensing agreement, a license to use any present or future intellectual or industrial property rights of
TWDC was granted to the Company. This license is essential to the Resort operating segment, especially for the
Theme Parks (see section A.4.1. “Significant Undertakings Related to the Resort’s Development”, sub-section
“License Agreement” and section B.2. “Group and Parent Company Management Report”, sub-section “Insurance
and Risk Factors” for more information).
Disneyland® Park
The Disneyland® Park is composed of five “themed lands”: Main Street, U.S.A.®, which transports guests to an
American town at the turn of the 20th century based on its houses and shops; Frontierland®, which takes guests on the
path of the pioneers who settled the American West; Adventureland®, where guests dive into a world of intrigue and
mystery, reliving Disney’s most extraordinary legends and best adventure movies; Fantasyland®, a magical land where
guests find the fairy tale heroes brought to life from Disney’s animated films; and Discoveryland, which lets guests
discover different “futures” through the works of visionaries, inventors, thinkers and authors of science fiction from
all periods. The Disneyland Park covers approximately 50 hectares.
There are 40 attractions in the Disneyland Park, including versions of attractions that exist at Disney theme parks
around the world such as: Big Thunder Mountain, a roller coaster which simulates a mining railway train; Pirates of the
Caribbean, which reproduces a pirate attack on a Spanish fort of the 17th century; Phantom Manor, a haunted Victorian
mansion; it’s a small world, an exhibition of animated dolls from around the world, dressed in their national costumes;
Buzz Lightyear Laser Blast, an interactive adventure ride featuring Buzz Lightyear and characters inspired by the
Disney/Pixar franchise, Toy Story; and Captain EO, a 3D musical experience starring the late Michael Jackson. Other
popular attractions that are unique to this Disneyland Park include: Indiana Jones™ and the Temple of Peril, a full-loop
roller coaster ride through simulated ancient ruins; and Space Mountain®: Mission 2, a roller coaster ride themed to
the work of Jules Verne in which guests board a spaceship and are catapulted by a giant canon into outer space.
On October 8, 2011, the Group opened Princess Pavilion, a brand new location in the Disneyland Park, where
families can now enjoy a magical moment in the company of a Disney Princess. This dedicated location allows guests
the opportunity to share both time and memories with iconic characters from some of Disney’s most popular
animated films.
The Disneyland Park also has four permanent theatres at which live stage shows are presented throughout the year.
Examples from the past and present include The Tarzan™ Encounter, Mickey’s Winter Wonderland and Winnie the Pooh
and Friends, too! The entertainment in the Disneyland Park also includes parades, such as Disney’s Once Upon a Dream
Parade, and firework displays.
In addition to the permanent Disneyland Park attractions, live stage shows and parades, the appearance of Disney
characters and their interaction with guests are an important aspect of the entertainment provided in the
Disneyland Park. There are also numerous seasonal events throughout the year including Disney’s Halloween Festival
in October and Disney Enchanted Christmas in December and early January.
The Disneyland Park has an innovative reservation system that is used at other Disney theme parks called
FASTPASS®. A free service available to all guests, FASTPASS provides an alternative to waiting in line. Guests
choosing FASTPASS receive a ticket designating a specific window of time during which they may return and enter
directly into the pre-show or boarding area. The FASTPASS system has been installed at six major attractions: Space
Mountain: Mission 2, Indiana Jones™ and the Temple of Peril, Peter Pan’s Flight, Big Thunder Mountain, Star Tours and Buzz
Lightyear Laser Blast.
There are 30 restaurants and multiple food carts and kiosks located throughout the Disneyland Park. Restaurants
are themed both in decoration and menu, based upon their location. For instance, at Cinderella’s Royal Inn in
Fantasyland, guests are greeted by Disney’s princesses while the famous pirate Jack Sparrow meets guests at the Blue
Lagoon Restaurant in Adventureland. The Disneyland Park offers a wide variety of dining experiences including
quick service, cafeteria-style, table service and sophisticated French cuisine. Carts and kiosks offer fast food, a variety
of snacks and sweets and/or drinks.
8
A wide range of Disney-themed goods are also available to the guests in 36 boutiques as well as multiple mobile carts
located throughout the Disneyland® Park. The product mix is continuously re-evaluated in an effort to better adapt
to guest preferences and guest mix. Merchandise development focuses on exclusive Disney and Disney/Pixar
character products, such as Mickey and his friends or the Princesses. Recent events or movies, such as Disney Magical
Moments Festival, the opening of Toy Story Playland or the theatrical release of Tangled, are leveraged by targeted
merchandise offers. Other innovative merchandising options include photo locations at certain attractions,
including Big Thunder Mountain, Space Mountain®: Mission 2 and Buzz Lightyear Laser Blast, offering guests the
opportunity to purchase photos taken of them during their ride.
A
A.1
A.2
Walt Disney Studios® Park
A.3
The Walt Disney Studios® Park opened to the public on March 16, 2002 and covers approximately 25 hectares. In
the Walt Disney Studios Park, guests discover the worlds of entertainment and meet their favorite stars. On-camera
action and backstage secrets of film, television, music and more come to life through attractions and entertainment
experiences.
A.4
The Walt Disney Studios Park is located in walking distance from the Disneyland Park and the Disney Village®.
Guests access the Walt Disney Studios Park through a gate designed to look like the entry gates of a major
Hollywood studio from the 1930s. The main gate provides access to a richly decorated central hub where all
ticketing and guest welcome services are located.
The Walt Disney Studios Park includes 17 attractions, several of which were specifically developed for this park.
Examples include: Crush’s Coaster®, a family roller coaster ride that takes guests into the underwater world of
Disney/Pixar’s hit animated film Finding Nemo; Cars Race Rally, inspired by Disney/Pixar’s Cars, which lets guests of
all ages take a ride on the famous Route 66; Moteurs… Action! Stunt Show Spectacular®, a live show in which stunt
professionals, in front of an audience of up to 3,200 guests, simulate the filming of an action scene involving car and
motorcycle chases plus other special effects; CinéMagique, a tribute show to the classics of international cinema;
Armageddon Special Effects, a look into the world of film special effects while onboard a spaceship caught in a
simulated meteorite shower; and Animagique®, featuring some of the memorable moments of more than eight
decades of Disney animation.
The Walt Disney Studios Park also features versions of attractions from Disney’s Hollywood StudiosTM, a park at the
Walt Disney World® Resort in Florida, such as The Twilight Zone Tower of TerrorTM1, a simulated free fall; Rock’n’Roller
Coaster, a roller coaster ride themed to the music of Aerosmith and a visit to a music recording studio; Playhouse
Disney Live on Stage!, which provides the opportunity for guests to interact with their favorite characters from Disney
Channel programs; and Catastrophe Canyon®, the highlight of Studio Tram Tour®: Behind the Magic, which allows
guests to experience a simulated earthquake and the resulting explosions and floods.
In addition, Toy Story Playland, based on the Disney/Pixar Toy Story franchise includes three attractions: Toy Soldiers
Parachute Drop, simulating a parachute drop with Andy’s Green Army Men; Slinky Dog Zig Zag Spin2, a racetrack
attraction; and RC Racer, a 25-meter half-pipe race circuit.
The Walt Disney Studios Park also includes Disney’s Stars ‘n’ Cars Parade, a procession featuring Disney characters and
themed cars.
As in the Disneyland Park, the FASTPASS® system reduces guest waiting-times at The Twilight Zone Tower of Terror™,
Rock’n’Roller Coaster and the Flying Carpets over Agrabah®.
There are nine boutiques, four restaurants and multiple food carts and kiosks located throughout the Walt Disney
Studios Park.
Hotels and Disney Village®
In Fiscal Year 2011, Hotels and Disney Village operating revenues increased 7% to € 513.2 million from
€ 480.2 million in the prior-year, due to a 5% increase in average spending per room, combined with a
1.7 percentage point increase in hotel occupancy. See section B.2. “Group and Parent Company Management
Report” for more information.
1
2
Inspired by The Twilight Zone®, a registered trademark of CBS, Inc. All rights reserved.
Slinky® Dog is a registered trademark of Poof-Slinky, Inc. All rights reserved.
9
A
Hotels and Disney Village® operating revenues include room rentals, food and beverage sales, merchandise sales,
conventions, dinner shows and fixed and variable rent received from third-party partners operating within the
Resort. The Hotels and Disney Village operate on a year-round basis and, due to the nature of the business, are
subject to the same seasonal fluctuations as the Theme Parks.
Hotels
The Group operates seven Hotels at the Resort: the Disneyland® Hotel, Disney’s Hotel New York®, Disney’s Newport
Bay Club®, Disney’s Sequoia Lodge®, Disney’s Hotel Cheyenne®, Disney’s Hotel Santa Fe® and Disney’s Davy
Crockett Ranch. Together, the Hotels have a total capacity of approximately 5,800 rooms. Each of the Hotels was
designed and built with a specific theme and for a particular market segment. The Disneyland Hotel, which is
located at the entrance of the Disneyland® Park, and Disney’s Hotel New York are positioned as deluxe hotels
offering service equivalent to that of the best hotels in Paris. Disney’s Newport Bay Club and Disney’s Sequoia Lodge
are positioned as “first-class” hotels, while Disney’s Hotel Cheyenne and Disney’s Hotel Santa Fe are designed as
“moderately-priced” hotels. Disney’s Davy Crockett Ranch campground is comprised of individual bungalows with
private kitchens, sports and leisure facilities including a treetop adventure trail, and a retail shop.
Disneyland® Paris hosts approximately 1,000 events annually, including meetings, conferences and exhibitions.
There are convention centers at Disney’s Hotel New York and Disney’s Newport Bay Club. These convention centers
and other areas in the Resort provide 23,500 m² of meeting facilities, including three conference halls, 95 meeting
rooms and a 6,500 m² event venue for up to 4,000 persons
Hotel amenities also include 12 restaurants, ten cafés/bars, eight boutiques, the Golf Course, five
swimming pools, four fitness centers, a spa, four saunas, four hammams, a solarium and an outdoor
ice-skating rink.
In order to facilitate access to the Resort, guests are provided with transportation between the Hotels (except
Disney’s Davy Crockett Ranch) and the TGV1 /RER2 train station. In addition, they are given the option to check
into the Hotels directly from the Marne-La-Vallée/Chessy train station or from onboard the Eurostar trains arriving
at the Resort. As part of the check-in process, guests are provided with room information and welcome booklets,
and for guests arriving by train, the Hotels also offer a luggage service, which allows them to go directly to the
Theme Parks and have their luggage delivered from the train station to their rooms.
Entertainment is also an integral part of the Hotel services. This entertainment includes Disney character dining as
well as character meet-and-greets in the lobbies and live music in the bars of certain Hotels. Activity corners have
also been set up where children can take part in various activities while allowing their parents additional leisure
time.
The Group attempts to reduce the seasonality of operations through events, such as Disney’s Halloween Festival and
the Disney Enchanted Christmas, or targeted offers which may include attractive transportation prices. The Group has
also differentiated its Hotels from its competitors by developing exclusive offers for its guests, such as Disney
characters breakfasts and extended Theme Parks opening hours. The Group differentiates pricing at its Hotels
according to the season and the level of demand with a focus on maximizing total revenues.
In addition to the seven Resort Hotels described above, several third-party hotels have signed marketing and/or
sales agreements with the Group to operate on the Resort. These hotels are as follows:
Hotels
2
10
Date opened
Number of
rooms
and units
Hotel l’Elysée Val d’Europe
3 stars
June 02
152
Thomas Cook’s Explorers Hotel
3 stars
March 03
390
Hotel Kyriad
3 stars
March 03
300
Adagio City Aparthotel Val d’Europe
3 stars
April 03
291
Vienna International Magic Circus Hotel
4 stars
May 03
396
Marriott’s Village d’Ile-de-France
4 stars
June 03
202
Vienna International Dream Castle Hotel
4 stars
July 04
397
Radisson Blu Hotel
4 stars
December 05
250
Total
1
Category
TGV corresponds to the “Train à grande vitesse”.
RER corresponds to the “Réseau express régional”.
2,378
These hotels benefit from transport shuttles to and from the Resort as well as free parking for some of the guests of
these hotels, and are an important source of guest attendance at the Resort. For certain of these hotels, the Group
has access to blocks of rooms and receives commissions for selling those rooms to guests. Any revenues earned
associated with these agreements are recorded in the Other revenues of the Resort operating segment.
A
The Disney Village®
A.1
The Disney Village® is the largest entertainment center of the Ile-de-France region excluding Paris, and consists of
approximately 46,000 m² of themed dining, entertainment and shopping facilities. It is a free-entrance venue
situated next to the Marne-La-Vallée/Chessy TGV/RER train station and between the Theme Parks and the Hotels.
The largest of its facilities is an indoor arena seating more than 1,000 guests for dinner and a performance of Buffalo
Bill’s Wild West Show. Other facilities include two themed bars with music; 11 themed restaurants, including Café
Mickey, Planet Hollywood®, Rainforest Cafe®, Annette’s Diner, McDonald’s®, King Ludwig’s Castle, Starbucks
Coffee and Earl of Sandwich® which opened on June 1, 2011; nine boutiques and a 15-screen multiplex Gaumont
cinema with one of the largest screens in Europe. In addition, the Group started the construction of a new
boutique, World of Disney, for a scheduled opening in June 2012.
A.2
A.3
A.4
The Group manages certain facilities in the Disney Village, such as the Buffalo Bill’s Wild West Show, merchandise
boutiques and bars. Four restaurants were managed on behalf of the Group by Groupe Flo, a French catering
company until September 30, 2011: Café Mickey, The Steakhouse, Annette’s Diner and New York Style Sandwiches.
On October 1, 2011, the Group resumed direct management of these restaurants. The remaining facilities are
managed by third parties.
The Disney Village is subject to the same seasonal fluctuations of the Theme Parks and Hotels operations.
Real Estate Development Operating Segment
In Fiscal Year 2011, real estate development revenues decreased by € 37.3 million to € 22.5 million from
€ 59.8 million in the prior year. This decrease was due to the prior-year € 47 million sale of the property on which
the Val d’Europe mall is located, partly offset by a greater number of transactions closed during Fiscal Year 2011.
See section B.2. “Group and Parent Company Management Report” for more information.
On September 14, 2010, the Group signed an amendment (the “Amendment”) to the agreement entered into with
TWDC, the French Republic and certain other French public authorities for the creation and the operation of the
Resort (the “Main Agreement”). The Amendment notably increased the site area from 1,943 hectares to
2,230 hectares and extended the duration of the Main Agreement from 2017 to 2030. See section A.3. “History and
Development of the Group” for more details.
The Group’s real estate development activities include the planning and development of the 2,230-hectare site
including and surrounding the Resort, in accordance with the Main Agreement. Development activities include the
planning, design and monitoring of improvements and additions to the existing Resort, as well as other commercial
and residential real estate projects to be located within or surrounding the Resort, whether financed internally or
through third-party partners.
Before beginning any new development phase, the Group must provide the Public Development Department
(Etablissement Public d’Aménagement or “EPA”) of the fourth district of the new town of Marne-La-Vallée (“EPAFrance”) and several other French public authorities with a proposal of the projects for approval. On the basis of
this proposal, the Group and the authorities involved work on detailed development programs. See section A.3.1.
“Development of the Resort and its Surrounding Areas” for more details on the different development phases.
The Group’s principal real estate development revenues are derived from the sale or lease of the land purchased
pursuant to the Main Agreement and related infrastructure, ground lease income from third-party developers and
conceptual design services related to third-party development projects on the Resort. These sales or lease
transactions not only provide a source of up-front cash inflows but also contribute to enhancing the potential of
future resort and real estate development projects and to increasing the potential number of guests from the local
market.
11
A
Land Rights
The Main Agreement provides the Group the right, subject to certain conditions, to acquire the land necessary for
the expansion of the Resort on the Marne-La-Vallée site from EPA-France. These land acquisition rights are not
recorded as an asset in the Group’s consolidated financial statements until the land is purchased. The cost of
infrastructure that is required to be constructed by EPA-France and French public authorities in order to make the
land viable for use is included in the purchase price for the land. The Group also incurs costs for certain
development studies and services that are intended to optimize future development of the remaining undeveloped
land. These costs are expensed as incurred.
The maintenance of these acquisition rights is subject to certain minimum development deadlines (the next of
which is on December 31, 2020) which if not met or amended, could result in the expiration of part of these rights.
Also, any land acquisition rights for the remaining undeveloped land that are not included in a development phase
or approved by the Group and the relevant French authorities by March 2030 will expire (See section A.3. “History
and development of the Group” for more details). As of September 30, 2011, all minimum development deadlines
have been met and no land rights have expired unused.
In order to maintain the Group’s land acquisition rights for the remaining undeveloped land around the Resort, the
Group is required to pay annual fees to EPA-France of approximately € 0.5 million. All fees paid to EPA France in
conjunction with the land acquisition rights are capitalized as construction in progress or are allocated to the cost of
land purchased by the Group. Unallocated EPA-France fees of € 13.2 million are recorded in Property, plant and
equipment as of September 30, 2011.
Residential Development
The Group sells land and certain related infrastructure to third-party residential developers working on projects in
the areas surrounding the Resort.
The residential development has always been financed by third parties. The Group’s role has been limited to
overseeing the master planning and architectural design of each development and to selling the purchased land
and certain infrastructure necessary to realize the projects to selected developers. The Group does not anticipate
significant changes in its role in future residential development projects.
Pursuant to the Amendment (see section A.3. “History and development of the Group”), the Group agreed to
contribute to the construction of new public infrastructure for residential housing development projects through
the payment to EPA-France of a fixed amount per housing unit sold.
Retail Development
The Group also participates in the development of the Val d’Europe town center, which, in addition to residential
developments, also includes retail and commercial developments.
The retail development has always been financed by third parties. The Group’s role is limited to overseeing the
master planning and architectural design of each development, validating the concept, and renting or selling the
purchased land and certain infrastructure necessary to realize the projects to selected developers. The Group does
not anticipate significant changes in its role for future retail development projects.
Hotel Capacity Development
Certain projects are under consideration for the creation of additional hotels. These projects would be designed to
create additional hotel room capacity, either as an additional Disney-hotel or as a third-party hotel.
12
Office and Other Activities Development
The Group participates in the development of an international business park strategically positioned near the A4
motorway, which upon completion, is expected to comprise an area of 117 hectares, of which 40 hectares are
related to the second phase of development (see section A.3.1. “Development of the Resort and its Surrounding
Areas”). The office development is financed by third parties. As of September 30, 2011, 36 hectares have been
developed, of which 29 hectares were with Goodman International, a leading European developer of business parks.
The Group also participates in office developments located in the Val d’Europe town center.
A
A.1
A.2
Les Villages Nature de Val d’Europe Project
A.3
The Amendment allows the Group to develop Les Villages Nature de Val d’Europe (“Villages Nature”), an innovative
eco-tourism project based on the concept of harmony between man and nature. This project will be developed in
partnership with Groupe Pierre & Vacances Center Parcs.
A.4
Villages Nature is a resort concept designed to appeal to European consumers, offering them a unique experience
based on connecting with nature. As a short and medium-break vacation destination, Villages Nature will provide a
relaxing and immersive experience in the heart of nature – with 90% of the resort retained as green space. The
destination will offer a number of recreational and learning activities that will inspire future generations to value
conservation.
Villages Nature will constitute, in its design as well as in its operations, a unique model of sustainable development
for tourism. This project, which could span up to 500 hectares and be developed over a 20-year timeframe, will be
launched depending on market conditions. The first phase would be comprised of 175 hectares and could open in
2015. For additional information, see the press release published on November 24, 2010, which is available on the
Company’s website (http://corporate.disneylandparis.com).
13
A
A.1.4.
Geographical Situation of the Resort
The Resort is located approximately 32 kilometers (20 miles) east of Paris, France and benefits from access to a
highly developed transportation network, including:
•
two suburban rail stations on the line A of the RER: the Marne-La-Vallée/Chessy station, located at the
entrance of the Theme Parks, and the Val d’Europe station which permits direct access to the residential and
commercial areas of Val d’Europe;
•
an exceptional highway network that links the Resort in less than one hour to both Paris and the two
international airports serving the Paris area, and also makes it easily accessible to most other regions of
France; and
•
the Marne-La-Vallée/Chessy high-speed train station located on the Resort, which is one of the most active in
France and the largest high-speed rail interchanges in the country. This station provides service to most of the
large French regional centers, as well as the United Kingdom, Belgium, Germany and Switzerland and is
served by Eurostar and TGV.
The strategic geographical location allows access to a market of approximately 300 million potential guests within
two hours travel from the Resort.
According to internal research conducted in 2011, approximately 57% of the guests traveled to the Resort by car,
29% by plane or train and 14% by other transportation (mainly RER and buses).
14
Strategy of the Group
A.2. STRATEGY OF THE GROUP
A.2.1.
A
Strategic Overview
Disneyland® Paris is the leading European vacation destination.
Theme Parks attendance for Fiscal Year 2011 increased 4% to 15.6 million compared to Fiscal Year 2010, while
Hotels occupancy increased by 1.7 percentage point compared to Fiscal Year 2010 to 87.1% in Fiscal Year 2011. See
section B.2. “Group and Parent Company Management Report” for more information.
Fiscal Year 2011 was again marked by a challenging economic environment, especially in the second semester as the
European sovereign debt crisis and concerns for the Euro negatively impacted consumer confidence and demand
from long-haul markets for Disneyland Paris. The Group continues to monitor how conditions evolve in each of its
key markets, and will continue to respond to changes by adjusting its sales and marketing efforts. The Group
maintained its focus on its long-term development strategy, while implementing near-term actions to partially
mitigate the economic downturn.
A.1
A.2
A.3
A.4
The Group designed its development strategy to take advantage of, what management believes, are significant
opportunities to attract and retain visitors. Market research indicates that there are a substantial number of
European families who have never visited the Resort, but have indicated that they might like to do so in the future.
The Group’s objective is to deliver a guest experience that exceeds expectations. It remains committed to its current
development strategy and continually strives to adapt it to current changes in the leisure and tourism landscape of
its principal markets.
The principal elements of the Group’s development strategy are as follows:
•
Enhance the Theme Parks experience
The Group enhances the experience in its Theme Parks by regularly adding new attractions and
entertainment. Some of the latest additions include the three Toy Story Playland1 attractions in Fiscal Year 2010
and Playhouse Disney Live on Stage! in Fiscal Year 2009. These attractions and new entertainment offerings such
as Mickey’s Magical Celebration, the Disney Dance Express and Aladdin’s Magic Lamp, are designed to add to the
appeal and capacity of Disneyland Paris, further enhancing the core guest experience to drive revenue
growth. The Group also continues to drive guest satisfaction through increased attraction availability, reduced
wait times, improved food and beverage offerings and innovative merchandise selection. In Fiscal Year 2011,
the Group invested further in the guest experience. Recent investments include a refurbishment of the
Sleeping Beauty Castle in the Disneyland Park® and the construction of Princess Pavilion in Fantasyland, a
dedicated space for guests to have a photograph taken with a Disney Princess.
•
Focus on the differentiation of the Disney Hotels
The Group focuses on communicating and delivering the “Disney Difference” for guests staying in its Hotels.
The Group’s marketing efforts highlight the proximity of its Hotels to the Theme Parks as well as offering
exclusive events to its Hotels guests. The Group further differentiates its Hotels by developing unique services
for its “onsite” guests, such as extended Theme Park opening hours. Entertainment, including opportunities
to dine and be photographed with Disney characters, is also an integral part of the Hotel services. The Group
also started a multi-year program to refurbish each of its 5,800 hotel rooms. Under this program, the Group
completed the refurbishment of more than 500 rooms at Disney’s Sequoia Lodge® and 166 bungalows in the
Disney’s Davy Crockett Ranch in Fiscal Year 2011.
•
Differentiate marketing and sales efforts for the Group’s core markets
The Group has implemented separate marketing and sales efforts designed to encourage attendance by
further penetrating the Group’s existing markets. Dedicated teams support these efforts in the Group’s seven
major markets, which are comprised of France, the United Kingdom, Spain, Belgium, Netherlands, Italy and
Germany. The marketing efforts primarily focus on Disney families in core identified European markets, and
target both first-time and repeat visitors while encouraging longer stays for certain of the Group’s markets.
Magic, excitement and sharing special moments with children remain at the heart of the Group’s consumer
communications.
1
Inspired by the Disney/Pixar franchise, Toy Story.
15
A
•
Develop the own home, Paris tourist and Disney destination markets
In line with the Group’s efforts to increase the return on investment from its marketing and sales activities,
specific approaches have been developed to drive the own home market (one-day visitors, primarily from the
region around the Resort), the Paris tourist market (visitors who come to the region primarily to visit Paris
and choose to visit the Resort for a day) and the Disney destination market (visitors who come primarily to
visit the Resort but choose to stay in offsite non-Disney hotels).
•
Differentiate marketing and sales efforts through distribution channels
The Group is continuously adapting its sales approach to the changing travel distribution landscape in
Europe. In each key market, the Group carefully chooses the channels and partners that would best serve
guests and aligns its reward and support structures to these choices. The Group has also increased sales
directly to consumers over the years, via higher investment in consumer direct operations and its in-house
tour operator. At the same time, the Group continues to invest in systems and processes designed to guide the
consumer decision-making process and to drive conversion and value per transaction in each distribution
channel.
•
Enhance the price-value perception and reduce the affordability barrier
The Group has implemented various strategies in order to enhance the perceived value relative to Resort
pricing and to reduce the affordability barrier of its products and services. Pricing is tailored to the different
segments in each market and enables guests to design the package that best meets their needs and budget.
The Group’s pricing strategies are regularly adapted for changes to the economic environment.
•
Staff excellence and relationships with trade unions
The Group strives to make Disneyland® Paris the most desired employer in the region. The Group provides its
employees with both the training necessary to deliver excellent guest service and the opportunity to develop
themselves professionally and personally. Additionally, the Group offers employees a variety of social support
programs, from special events to connections with local social programs and other benefits. The Group also
works with its trade unions to allow for greater flexibility to match staffing to guest needs and to best manage
costs against the inherent seasonality of demand.
•
Development and management of the 2,230-hectare site
The Group’s other primary business activity is the development of the 2,230-hectare site, within the terms set
out in the Amendment (See section A.3. “History and development of the Group” for more details). The
Group’s strategy is to increase the value of this land and the overall site as well as to protect the tourist
destination environment through the integrated development of the Resort, retail, office and residential real
estate projects.
With its public and private partners, the Group leads the development of the Val d’Europe community in
order to build an outstanding hub of infrastructure and economic activity. The urban site currently hosts
28,000 inhabitants and 25,000 jobs and, as per the Main Agreement as amended, could ultimately host up to
60,000 inhabitants and almost as many jobs.
The Amendment also allows the Group to develop, in partnership with Groupe Pierre & Vacances Center
Parcs, Villages Nature, an innovative eco-tourism project. This project is expected to be developed in phases
over the duration of the Main Agreement (see section A.1.3. “Operational Organization of the Group – Real
Estate Development Operating Segment” for more details).
A.2.2.
Marketing and Sales Overview
Target Markets
The Group has seven major markets comprised of France, the United Kingdom, Spain, Belgium, Netherlands, Italy and
Germany. The Group’s remaining markets are aggregated together as the “Rest of the World”. Within these markets, the
primary segment is composed of families with children from three to fifteen years old. Secondary segments include
groups, young adults and convention planners. Each year’s success in marketing to specific countries, and the segments
within, is impacted by a variety of strategic decisions including identifying those with maximum potential or which would
best respond to the Group’s marketing and sales efforts. These efforts include strategic pricing and package offers,
keeping in mind the various holiday and vacation timing of the individual markets.
16
Based on internal surveys of the Group’s guests, during the past three Fiscal Years the geographical breakdown of
Theme Parks attendance is as follows:
2011
2010
2009
France
49%
49%
47%
United Kingdom
13%
13%
16%
Spain
9%
9%
9%
Belgium
6%
6%
6%
Netherlands
6%
7%
7%
Italy
4%
4%
4%
Germany
Rest of the World
Total
2%
3%
3%
11%
9%
8%
100%
100%
100%
A
A.1
A.2
A.3
A.4
Means of Distribution
The Group’s products are distributed either individually or packaged together. Packages may include some or all of
a guest’s lodging, Theme Parks access, dining and transportation.
Theme Parks tickets are sold at the entrance to the parks and through the Group’s call centers, the Group’s
Internet website and third-party distribution channels.
Packages can be booked by individual guests, either via third party tour operators, such as Thomas Cook, TUI, OAD,
Dertour and Vacaciones El Corte Inglès, or through Euro Disney Vacances S.A.S. (“EDV”), a French simplified
corporation and the Group’s in-house tour operator. The Group benefits from a commercial presence in Paris,
London, Amsterdam, Brussels, Madrid, Milan and Munich.
The Group has entered into several agreements with Disney Destinations LLC (“DD LLC”), an indirect, wholly
owned subsidiary of TWDC, to develop sales and distribution synergies covering all of the Walt Disney Parks and
Resort destinations in the world and for the provision of certain call center services. DD LLC provides call center
services for at least 75% of calls from the United Kingdom and, potentially, for all calls from English speaking
European Union residents (see section A.4.1. “Significant Undertakings Related to the Resort’s Development”,
sub-section “Undertakings for Other Services”).
In addition, the Group operates a call center at the Resort to directly handle individual guest and travel agency
inquiries. The Group’s call centers receive an average of approximately 4,500 calls per day from all over Europe.
The Group’s website is available in 15 languages and receives an average of approximately 105,000 unique visits per
day. The website allows visitors to learn about the Resort, order a brochure, make lodging reservations and directly
purchase Theme Parks tickets. Several online tools have been implemented in order to facilitate the booking
process and access information about the Resort.
In November 2010, the Group launched an application for iPhone, which received an E-Marketing award for Best
Mobile Application in January 2011. This free of charge application displays attractions expected waiting times and
helps guests optimize their visit, offering them a multitude of advice to help their on-site organization.
Travel Alliances
The Group has several unique travel alliance partners. These partners include Air France-KLM, SNCF, Eurostar and
RATP1 and help ensure long-term accessibility to the Resort. Agreements with these partners provide carriers with
the right to use the Disneyland® Paris name and logo in their advertising campaigns, and certain partners with the
right to offer joint tour packages. In return, the Group has the right to provide airline or train tickets in its packages
to its visitors.
1
RATP refers to the Suburban Paris Transportation Authority.
17
A
Competition
The Group’s Theme Parks activity competes with other European theme parks. Between Fiscal Years 2006 and 2011,
Theme Parks attendance grew by approximately 21%. The ten largest European theme parks attracted
approximately 46.5 million guests in calendar year 2010, as follows:
Attendance
(in million of guests)
Theme parks in Europe
Disneyland®
Paris (Fiscal Year ended September
30)(1)
Location
2010
2009
France
15.0
15.4
Blackpool Pleasure Beach(2)
United Kingdom
5.6
n/a
Europa Park
Germany
4.2
4.3
De Efteling(1)
Netherlands
4.0
4.0
Tivoli Gardens
Denmark
3.8
3.9
Port Aventura
Spain
3.0
3.0
Gardaland
Italy
2.9
2.9
Liseberg
Sweden
2.9
3.1
Alton Towers
United Kingdom
2.6
2.7
Bakken
Denmark
2.5
2.6
46.5
41.9
Total
Source: Individual company press releases (excluding non-gated amusement parks) or National Statistics.
(1)
In the table above, only Disneyland Paris and De Efteling are open on a year-round basis, while the other theme parks listed operate seasonally.
(2)
Since mid 2009, Blackpool Pleasure Beach charges £5 admission fee for a basic access to the pier (some shows and dinners). Guests must pay for
a specific ticket to get an access to attractions. As a free admission park, it was not included in the European theme parks classification in 2009.
In addition, the Group also competes for guests throughout the year with other kinds of family entertainment
alternatives. These include trips to other European and international holiday destinations (including ski and seaside
resorts) and other leisure and entertainment activities or purchases. The Group’s Hotels activity competes with
other hotels and convention centers in the Paris region and all over Europe.
18
History and Development of the Group
A.3. HISTORY AND DEVELOPMENT OF THE GROUP
On March 24, 1987, TWDC entered into the Main Agreement with the French Republic, the Region of
Ile-de-France, the department of Seine-et-Marne (the “Department”), the EPA-Marne1 and RATP for the
development of the Resort and its surrounding area, approximately 2,000 hectares of undeveloped land located
32 kilometers east of Paris, in Marne-La-Vallée, France. The Group and certain other entities became parties to the
Main Agreement after its signature by the original parties mentioned above. In 1988, the EPA-France, which has
responsibility with the Group for the development of the Resort, was created by the French authorities pursuant to
the Main Agreement, and became a party thereto.
A
A.1
A.2
On September 14, 2010, the Group signed the Amendment to the Main Agreement that allows the Group:
A.3
•
to continue to pursue the development of the tourist destination for hotel and theme park activity, including
notably the right to build a third park in the long-term thereby continuing to enhance the attractiveness of
Disneyland® Paris and reflecting its support of France as a leader in tourism;
A.4
•
to continue to pursue the urban development of Val d’Europe with public parties to facilitate a rebalancing of
economic growth and job creation in the eastern part of the Ile-de-France region;
•
to develop Les Villages Nature de Val d’Europe, a new tourism project based on sustainable development, with
Groupe Pierre & Vacances Center Parcs (see section A.1.3. “Operational Organization of the Group – Real
Estate Development Operating Segment”);
•
to benefit from updated land entitlements that will allow for a more relevant urban development of Val
d’Europe.
To facilitate the future growth outlined by the Amendment, the perimeter of the Main Agreement has been
modified from 1,943 to 2,230 hectares. Similarly, the parties have agreed to change the end date of the Main
Agreement from 2017 to 2030.
The Amendment establishes certain key principles for a balanced and sustainable development and commits the
Public Parties to certain improvements and additional infrastructure in terms of road access and public
transportation both within the land covered by the Main Agreement and elsewhere in Seine-et-Marne.
The Main Agreement, as amended from time to time, determines the general outline of each phase of development
entered into by the Group.
A.3.1.
Development of the Resort and its Surrounding Areas
The Main Agreement, as amended, sets out a master plan for the development of the land and a general program
defining the type and size of facilities that the Group has the right to develop, subject to certain conditions, over a
period ending no earlier than 2030 (see section A.1.3. “Operational Organization of the Group”, sub-section “Real
Estate Development Operating Segment – Land Rights” for more details).
The Group partners with private and public entities to ensure adherence to the Main Agreement development
program. As per the agreement, the above mentioned French public authorities have a continuing obligation to
oversee the construction of the primary infrastructure, such as highway interchanges, primary roadways to access the
Resort, water distribution and storage facilities, rain water and waste water treatment installations, waste treatment
facilities, gas and electricity distribution systems, as well as telecommunication networks. The Group reimburses the
French public authorities for certain infrastructure costs that are required to be constructed in order to make
certain parcels of land viable for use (see section A.1.3. “Operational Organization of the Group”, sub-section “Real
Estate Development Operating Segment – Land Rights” for more details).
1
EPA-Marne corresponds to the Public Establishment for the Development of the new town of Marne-La-Vallée.
19
A
Development of the Resort
The first phase of the Resort development, excluding the Walt Disney Studios® Park, was developed over time in
three distinct sub-phases.
Phase IA
Phase IA, spanning from 1989 to 1992, corresponds to the development of the Disneyland® Park, the Disneyland®
Hotel, Disney’s Davy Crocket Ranch, the Golf Course and the related infrastructure and support facilities, defined as
the “Phase IA Facilities”.
Phase IB
Phase IB, spanning from 1989 to 1992, corresponds to the development of five theme hotels, Disney’s Hotel New
York® Convention Center and the Disney Village®, defined as the “Phase IB Facilities”.
Phase IC
Phase IC, which was developed between 1992 and 1997, added to the Disneyland Park product offerings, with the
construction and opening of various attractions. In 1996, a number of agreements were signed by the Group with
Centre de Congrès Newport S.A.S., an indirect wholly-owned subsidiary of TWDC, for the development and
financing of a second convention center located adjacent to Disney’s Newport Bay Club® Hotel, the Newport Bay
Club Convention Center.
Development of the Walt Disney Studios® Park and of the Resort’s Surrounding Areas
In Fiscal Year 1999, the Group obtained the approval of banks, financial institutions and creditors (the “Lenders”)
to finance the construction of the Walt Disney Studios Park, which opened on March 16, 2002 adjacent to the
Disneyland Park.
While developing the Walt Disney Studios Park, the Group participated in the development of an urban center in
Val d’Europe, located adjacent to the Resort. This development included an International Shopping Mall
comprised of 125,000 m² of retail space. On June 28, 2010, the Group sold the property underlying the Mall to
Klépierre and its partner Axa. This property had previously been subject to a long-term ground lease between the
Group and these buyers. The Group also participates in the development of the Val d’Europe town center, which
currently includes residential, retail, resort and commercial developments.
Other developments were also pursued and resulted in (i) new infrastructure such as a second RER train station and
a new interchange on the A4 motorway and (ii) the first phase of an international business park strategically
positioned near the A4 motorway, which upon completion is expected to comprise an area of 40 hectares.
A third phase of development was signed with the French Public Authorities in 2003 and includes the following
under various stages of development:
20
•
the expansion of the Disney Village, the development of convention/exhibition business and additional hotel
capacity, when needed;
•
the continuation of the Val d’Europe community expansion (residential and office development);
•
the development of new public services such as the development of a high school in Serris with international
sections, the development of a university center in Val d’Europe, as well as a new building for the TGV station
(contingent on the development of a new convention/exhibition center);
•
the continuation of the international business park development; and
•
other residential developments in the area surrounding the Golf Course.
In addition, a fourth phase of development is currently under negotiation, in accordance with the Main Agreement.
This new phase will allow the Group to start new developments such as:
•
the development of Villages Nature, in partnership with Groupe Pierre & Vacances Center Parcs (see
section A.1.3. “Operational Organization of the Group”, sub-section “Real estate development operating
segment”);
A
A.1
•
the development of new public facilities such as additional schools, a university, cultural facilities, as well as
the extension of the Val d’Europe bus station;
A.2
•
the development of the Val d’Europe and Resort access infrastructure;
A.3
•
residential developments in the area surrounding the third-party hotels near the resort.
A.3.2.
A.4
Financing of the Resort’s Development
The Main Agreement specifies the terms and conditions of the Group’s funding for any required infrastructure.
The Phase IA Financing Company was established in November 1989 in order to finance the Phase IA Facilities,
except the Disneyland® Hotel, Disney’s Davy Crockett Ranch and the Golf Course. The Phase IA Financing
Company owns a portion of the Phase IA Facilities and leases the related assets to EDA, under a financial lease (see
section A.1.1. “Corporate Organization of the Group – Financing Companies” for more details). Pursuant to the
lease, a supplementary rent based upon the number of paying guests visiting the Disneyland® Park is payable by
EDA to the Phase IA Financing Company. The lease will terminate on December 31, 2030 at the latest. However,
EDA has the option to acquire the Disneyland Park at any time after June 30, 2006 for an amount approximating
the balance of the Phase IA Financing Company’s then outstanding debt and taking into account a tax indemnity to
the partners of the Phase IA Financing Company plus any applicable transfer taxes payable to the French tax
authorities. EDA intends to exercise the purchase option on December 31, 2016. If not, EDA will have to pay a
penalty of approximately € 125 million to the partners of the Phase IA Financing Company.
In 1991, various agreements were signed for the development and financing of the Phase IB Facilities. EDL Hôtels
S.C.A. leases the Phase IB Facilities from the Phase IB Financing Companies, which were established for their
financing (see section A.1.1. “Corporate Organization of the Group – Financing Companies” for more details).
These leases expire on December 31, 2016. EDL Hôtels S.C.A. has the option to acquire the leased assets at any time
during the term of the leases for an amount approximating the balance of the Phase IB Financing Companies’ then
outstanding debt, plus any applicable transfer taxes payable to the French tax authorities.
In 1996, various agreements were signed for the development and financing of the Newport Bay Club Convention
Center. EDL Hôtels S.C.A. leases the Newport Bay Club Convention Center from Centre de Congrès Newport S.A.S,
a special-purpose company that was established for its financing and also an indirect wholly-owned affiliate of TWDC
(see section A.1.1. “Corporate Organization of the Group – Financing Companies” for more details). The leases will
expire in September 2017, at which point EDL Hôtels S.C.A. has the option to acquire the Newport Bay Club
Convention Center for a nominal amount.
Phase IA Partners’ Indemnification
The partners of the Phase IA Financing Company are subject to unlimited joint and several liability for the financial
obligations of the Phase IA Financing Company. However, the banks that are parties to the Phase IA Credit Facility
and the Caisse des Dépôts et Consignations (“CDC”), have waived any recourse against the partners of the Phase IA
Financing Company.
Pursuant to an indemnity commitment of April 26, 1989, as amended in 1994, EDA and Euro Disneyland
Participations S.A.S., an indirect wholly-owned subsidiary of TWDC (which is also a partner of the Phase IA
Financing Company), have agreed to indemnify the partners of the Phase IA Financing Company for any losses they
would incur if EDA or the Phase IA Financing Company would not respect their obligations under the Main
Agreement.
21
A
To the extent the resources of EDA, Euro Disneyland Participations S.A.S. and the Phase IA Financing Company are
insufficient to cover any such indemnity, EDL S.N.C. Corporation, an indirect wholly-owned subsidiary of TWDC,
has agreed to pay the partners of the Phase IA Financing Company the amount by which this indemnity exceeds
such resources, up to an additional € 76.2 million.
1994 Financial Restructuring
During the period from the Opening Day through September 30, 1994, the Group experienced significant losses.
Net operating losses before the cumulative effect of an accounting change totaled approximately € 625.0 million for
the two-and-a-half-year period ending September 30, 1994. In addition, the Group began to experience significant
cash flow difficulties during Fiscal Year 1993. In March 1994, the Group entered into a memorandum of agreement
with major stakeholders outlining the terms of a restructuring of the Group’s obligations and those of the Phase IA
Financing Company, the Phase IB Financing Companies (together the “Phase I Financing Companies”) and TWDC
(the “1994 Financial Restructuring”).
The 1994 Financial Restructuring essentially provided for concessions and contributions to be made by each of the
Lenders and by TWDC, and for the prepayment of certain outstanding loan indebtedness of the Group and Phase I
Financing Companies using the proceeds raised from a € 907.0 million Company share capital increase.
As part of the terms of the 1994 Financial Restructuring agreement, the payment of a one-time development fee to
TWDC of € 182.9 million was required upon the satisfaction of certain conditions, including the initiation of
construction of a second park and the authorization of the Lenders for its financing. This fee primarily
corresponded to costs incurred by TWDC from 1990 to 1994 for the design and development of a second park,
whose development was eventually postponed in Fiscal Year 1994.
In order to obtain the approval for the financing of the Walt Disney Studios® Park by the Lenders, TWDC agreed in
September 1999 to amend the terms of the development fee so that it will not be due unless and until future events
occur. These events include the repayment of the Phase I Debt1 in Fiscal Year 2024, the repayment of the Walt
Disney Studios Park Loans (as defined below) in Fiscal Year 2028 and the achievement of a level of operating
margin before depreciation and amortization higher than € 472.6 million. As of September 30, 2011, 2010 and
2009, the Group has not made any accruals for this amount.
1999 Financing of the Walt Disney Studios® Park
The construction of the Walt Disney Studios Park was financed using the proceeds raised from a € 219.5 million
Company share capital increase in Fiscal Year 2000 and new subordinated long-term borrowing from the CDC of
€ 381.1 million (the “Walt Disney Studios Park Loans”).
The Walt Disney Studios Park Loans were originally comprised of a series of four loans, two of € 76.2 million each
maturing in Fiscal Years 2015 and 2021, respectively, and two of € 114.3 million each maturing in Fiscal Years 2025
and 2028, respectively. These loans bear interest at a nominal rate of 5.15% per annum.
See section B.3. “Consolidated Financial Statements”, note 12.1.2. “Walt Disney Studios Park Loans” for more
details.
2005 Restructuring
In Fiscal Year 2003, the Group experienced reduced revenues, particularly as a result of a prolonged downturn in
European travel and tourism combined with challenging general economic and geopolitical conditions in the
Group’s key markets. This reduction occurred despite the opening of the Walt Disney Studios Park, where the
number of visitors and revenues generated were below expectations. The Group recorded increased losses as a
result of these reduced revenues, as well as higher operating costs and higher marketing and sales expenses related
to the opening of the Walt Disney Studios Park.
1
22
The Phase I Debt corresponds to the CDC Phase I Loans, the Credit Facilities – Phases IA and IB as well as the Partner Advances – Phases IA and
IB.
In September 2004, the Company and certain companies of the Group signed a memorandum of agreement with
the Lenders and TWDC on a comprehensive restructuring of the Group’s financial obligations (the “2005
Restructuring”). The final conditions necessary to implement the 2005 Restructuring were completed in February
2005. The 2005 Restructuring provided new cash resources, reduced or deferred certain cash payment obligations
and provided more flexibility to invest in new attractions and in the development of the Resort and its surrounding
areas.
The 2005 Restructuring transformed the Company into a holding company. Substantially all of the Company’s assets
and liabilities were transferred to EDA, which became the primary operating company for the Group.
The principal features of the 2005 Restructuring were (i) a € 253.3 million share capital increase, (ii) a new standby
revolving credit facility made available by TWDC for an amount of € 150 million until September 30, 2009 and for
an amount of € 100 million from October 1, 2009 to September 30, 2014, (iii) the deferral of a portion of the
Group’s debt service obligations, (iv) the deferrals of a portion of the royalties and management fees payable to
TWDC over the following Fiscal Years (See section B.3. “Consolidated Financial Statements”, note 12.6. “TWDC
Loans” for more details) and (v) a bank authorization to implement a € 240 million plan (the “Development Plan”)
to develop new Theme Parks attractions and to limit spending on maintaining and improving the existing asset
base.
A
A.1
A.2
A.3
A.4
Pursuant to the 2005 Restructuring, the CDC agreed to defer and convert to subordinated long-term debt certain
interest related to the Walt Disney Studios Park Loans. See section B.3. “Consolidated Financial Statements”,
note 12.1.2. “Walt Disney Studios Park Loans” for more details.
Other terms of the 2005 Restructuring and its impact on the Group are described in the Group’s Reference
Document registered with the AMF on April 21, 2006 under the number R. 06-0034 and in the Consolidated
Financial Statements for Fiscal Year 2005.
Following the 2005 Restructuring, the Group is obliged to respect certain financial covenant requirements and must
meet minimum performance objectives. For more information concerning the above mentioned financial
requirements and performance objectives, see section C.3. “Information Concerning the Group’s Financial
Covenant Obligations”.
23
A
Significant Agreements of the Group
A.4. SIGNIFICANT AGREEMENTS OF THE GROUP
A.4.1.
Significant Undertakings Related to the Resort’s Development
Undertakings with TWDC Affiliates
License Agreement
Under a licensing agreement entered into between Disney Enterprises, Inc. (“DEI”) and the Company1 (the
“License Agreement”) on February 27, 1989, the Company was granted a license to use any present or future
intellectual or industrial property rights of TWDC that may be incorporated into attractions and facilities designed
from time to time by TWDC and made available to the Company. In addition, the License Agreement authorizes the
sale, at the Resort, of merchandise incorporating or based on intellectual property rights owned by, or otherwise
available to, TWDC. This license is essential to the pursuit of the Group’s business activities (see section A.1.3.
“Operational Organization of the Group”).
The License Agreement has an initial term of 30 years and can be renewed for up to three additional 10-year terms
at the option of either party. The License Agreement may be terminated by TWDC upon the occurrence of certain
events, including the removal or replacement of the Gérant, a change in control, directly or indirectly, of EDA,
certain affiliates and the Phase IA Financing Company, the liquidation of such companies, the imposition of laws or
regulations that prohibit EDA, certain affiliates and the Phase IA Financing Company from performing any of their
material obligations under the License Agreement or the imposition of taxes, duties or assessments that would
materially impair distributable earnings of these entities.
These intellectual property rights are registered in the name of TWDC, which is responsible for their protection in
France. The License Agreement provides TWDC substantial rights and discretion to approve, monitor and enforce
the use of TWDC intellectual property rights within the Resort.
Royalties to be paid by the Company for the use of these rights are equal to:
•
10% of gross revenues (net of taxes) from rides, admissions and related fees (such as parking, tour guide and
similar service fees) at all Theme Parks and attractions;
•
5% of gross revenues (net of taxes) from merchandise, food and beverage sales in or adjacent to any Theme
Park or other attraction, or in any other facility (with the exception of the Disneyland® Hotel), whose overall
design concept is based predominantly on a TWDC theme;
•
10% of all fees paid by participants (net of taxes); and
•
5% of gross revenues (net of taxes) from the exploitation of hotel rooms and related revenues at certain
Disney-themed accommodations. None of the Group’s currently existing Hotels at the Resort are considered
Disney-themed as defined in the License Agreement, except the Disneyland Hotel which is specifically
excluded.
Management Agreements
In accordance with applicable French laws, the Company’s, EDA’s and EDL Hôtels S.C.A.’s Gérant is responsible for
the management of all aspects of their respective operations in the best interests of these entities. The Gérant has the
power to act and contract on their behalf in any and all respects within their corporate purpose. For these services,
the Gérant is entitled to a fixed annual fee of € 25,000 and € 76,225 due by the Company and EDL Hôtels S.C.A.,
respectively. The Gérant’s compensation due by EDA consists of a base fee, an incentive fee and a hotel sales fee, as
described below. The Company’s, EDA’s and EDL Hôtels S.C.A.’s Gérant is Euro Disney S.A.S., an indirect
wholly-owned subsidiary of TWDC.
1
24
Pursuant to the 2005 Restructuring, this agreement was transferred to EDA.
Base Management Fee
The base management fee is equal to the following percentages of the Group’s total revenues for the Fiscal Years
presented:
•
from October 1, 1998 to September 30, 2008:
1.0%
•
1.5%
•
3.0%
•
from October 1, 2018 and beyond:
6.0%
Beginning on October 1, 2008, the right of the Gérant to receive payment of that portion of the base management
fee in excess of 1% of revenues is contingent upon:
•
EDA achieving a positive consolidated net income before taxes for the Fiscal Year to which such fee relates,
after taking into account the base management fee; and
•
EDA’s legal ability to distribute dividends for such Fiscal Year.
A
A.1
A.2
A.3
A.4
These conditions have not been met since October 1, 2008 to date and the base management fee is, as such,
currently equal to 1% of the Group’s total revenues.
In addition, beginning on October 1, 2018, the portion of the base management fee in excess of 3% of the total
revenues, as defined in EDA’s bylaws, for any Fiscal Year will not be due or payable until after certain indebtedness
of EDA and the Phase I Financing Companies has been repaid in full. The base management fee may not exceed
40% of EDA’s consolidated after-tax profits for such Fiscal Year (calculated on the basis of a base management fee
of 3%).
Base management fees earned by the Gérant were € 12.9 million for Fiscal Year 2011 compared with € 12.7 million
and € 12.3 million for Fiscal Years 2010 and 2009, respectively.
Management Incentive Fee
The management incentive fee for a given Fiscal Year is fixed at 30% of any portion of pre-tax adjusted cash flow, as
defined in EDA’s bylaws, in excess of 10% of the total gross fixed assets of EDA and the Phase I Financing
Companies, as defined in EDA’s bylaws, for that Fiscal Year. Certain EDA debt agreements provide for deferral of
the management incentive fee under specified circumstances. No management incentive fees were due in Fiscal
Years 2011, 2010 and 2009 under this agreement.
Hotel Sales Fee
Upon the sale of any of the Hotels, a fee equal to 35% of pre-tax net revenue, as defined, received by EDA from any
such sale is due to the Gérant. In Fiscal Years 2011, 2010 and 2009, no amount was due as no Hotel has been sold.
Waivers and Deferrals of the Amounts due to TWDC under the License and Management Agreements
As part of the 1994 Financial Restructuring, the Gérant agreed to waive its base management fee for Fiscal Years 1992
through 1998. In addition, TWDC waived royalties for Fiscal Years 1994 through 1998.
Starting in Fiscal Year 1999 and through Fiscal Year 2003, the royalties payable by the Company were calculated at
rates equal to 50% of the initial rates stated above (see sub-section “License Agreement” above).
Beginning in Fiscal Year 2004, the Company was responsible for the payment of 100% of the original royalty rates as
presented above (see sub-section “License Agreement” above).
25
A
Pursuant to the 2005 Restructuring, TWDC agreed to defer payment of royalties and base management fees due by
the Group to affiliates of TWDC, on an unconditional basis for a total amount of € 125 million and on a conditional
basis for a total amount up to € 200 million as follows:
•
TWDC agreed to unconditionally defer and convert into long-term subordinated debt certain management
fees and, as necessary, royalties up to a maximum amount of € 25 million with respect to each of Fiscal Years
2005 through 2009. As of September 30, 2011, the resulting long-term subordinated debt amounted to
€ 125 million, excluding deferred interest. Deferred amounts converted into long-term subordinated debt
bear interest at 12-month Euribor, compounded annually. The principal will be repayable only after the
repayment of all Phase I Debt, scheduled in Fiscal Year 2024, and interest will begin to be paid annually from
January 2017; and
•
TWDC agreed to conditionally defer and convert into subordinated long-term debt certain management fees
and, as necessary, royalties up to a maximum amount of € 25 million due with respect to each of Fiscal Years
2007 through 2014. As of September 30, 2011, the resulting long-term subordinated debt amounted to
€ 75 million, excluding deferred interest. The amount, if any, of the deferral will be determined by reference
to the Group’s financial performance relative to a pre-defined performance indicator (see section C.3.
“Information Concerning the Group’s Financial Covenant Obligations” for more details). Deferred amounts
are converted into long-term subordinated debt and have the same interest and repayment terms as the
unconditionally deferred amounts described above.
Total base management fees expense recorded by the Group in Fiscal Year 2011 was € 12.9 million, originally due
for payment in December 2011. Given the Actual Performance Indicator for Fiscal Year 2011, the Group deferred
the payment of this amount, under the conditional deferral mechanism, and converted it into long-term
subordinated debt on September 30, 2011 (see section C.3. “Information Concerning the Group’s Financial
Covenant Obligations” for more details on the Actual Performance Indicator and section B.3. “Consolidated
Financial Statements”, note 12.6. “TWDC Loans” for more details on the deferred amounts).
Total royalties expense recorded in Fiscal Year 2011 was € 61.2 million, originally due for payment in
December 2011. Given the Actual Performance Indicator for Fiscal Year 2011, the Group deferred the payment of
€ 12.1 million, under the conditional deferral mechanism, and converted it into long-term subordinated debt on
September 30, 2011 (see section C.3. “Information Concerning the Group’s Financial Covenant Obligations” for
more details on the Actual Performance Indicator and section B.3. “Consolidated Financial Statements”, note 12.6.
“TWDC Loans” for more details on the deferred amounts).
The Group must also respect certain financial covenants under its debt agreements. The Group believes it has
achieved compliance with such covenants for Fiscal Year 2011 with the assistance of TWDC’s agreement, as
permitted under the debt agreements, to defer a further € 8.9 million of 2011 royalties into long-term subordinated
debt (see section C.3. “Information Concerning the Group’s Financial Covenant Obligations” for more details on
the Actual Performance Indicator and section B.3. “Consolidated Financial Statements”, note 12.6.2. “Long-term
Subordinated Loan – Deferrals of Royalties and Management Fees” for more details on the deferred amounts).
Deferrals for Fiscal Year 2011 and compliance with these financial covenants were confirmed by an independent
expert in December 2011, as provided in the debt agreements.
The Development Agreement
Pursuant to the development agreement dated February 28, 1989 entered into between the Company and the Gérant
(the “Development Agreement”), the Gérant provides and arranges for other subsidiaries of TWDC to provide a
variety of technical and administrative services to the Company, some of which are dependent upon TWDC
expertise and cannot reasonably be supplied by other parties. Pursuant to the 2005 Restructuring, this agreement
was transferred to EDA.
These services are in addition to the management services Euro Disney S.A.S. is required to provide as EDA’s Gérant
(see the sub-section headed “Management Agreements” for more details) and include, among other things, the
development of conceptual designs for existing Theme Parks and future facilities and attractions, the manufacture
and installation of specialized show elements, the implementation of specialized training for operating personnel,
the preparation and updating of technical operation and maintenance manuals, and the development of a strategic
plan for master land use and real estate development. Euro Disneyland Imagineering S.A.R.L. (“EDLI”), an indirect
wholly-owned subsidiary of TWDC, is responsible for the management and administration of the overall design as
well as the construction of the Theme Parks and the Development Plan, including the design and procurement of
the show and ride equipment. Most of the other facilities of the Resort were designed under the Group’s
supervision with the administrative and technical assistance of affiliates of TWDC which are specialized in the
development of hotels, resorts and other retail and commercial real estate projects.
26
The Development Agreement has an initial term of 30 years and can be renewed for up to three additional 10-year
terms at the option of either party. The Development Agreement may be terminated by the Gérant or by the Group
under certain conditions, in particular in case of a change of control of EDA and of the Phase IA Financing
Company, or in case either company were to be liquidated.
The Group reimburses the Gérant for all of its direct and indirect costs incurred in connection with the provision of
services under the Development Agreement. These costs include, without limitation: (i) all operating expenses of
the Gérant, including overhead and implicit funding costs; (ii) all costs related to services under the Development
Agreement incurred directly by the Gérant or billed to it by third parties; and (iii) certain costs billed to the Gérant,
plus a 5% to 10% mark-up, for services performed by TWDC or any of its affiliates related to the Development
Agreement. Such costs may vary considerably from one Fiscal Year to another depending upon the projects under
development (see section B.3. “Consolidated Financial Statements”, note 19 “Related-Party Transactions” for more
details).
In Fiscal Year 2011, the Group recognized € 28.9 million of expenses for the provision of services under the
Development Agreement. This included € 9.5 million related to staff and administrative costs of the Group’s share
in the joint TWDC-Euro Disney marketing and sales departments throughout Europe. The Group also capitalized
€ 3.0 million of costs related to conceptual design for existing Theme Parks facilities and attractions.
A
A.1
A.2
A.3
A.4
In addition, pursuant to several agreements with the Group, EDLI manages the construction of all attractions.
Under these agreements, total amounts capitalized in Fiscal Year 2011 were € 2.7 million.
Undertakings for Other Services
The Group also has agreements with other wholly-owned subsidiaries of TWDC for the services described below:
•
The Group has an agreement with Disney Interactive Media Group (“DIMG”) to host the Group’s Internet
sites. This agreement was signed in 2007 and was renewed after a competitive bidding process. The renewed
agreement is valid until March 2014. Under this agreement, an annual fixed fee of $ 0.4 million is due to
DIMG.
•
The Group has various agreements with DD LLC for support services, notably for providing call center
services or information technology solutions for its hotels and sales and distribution departments. An expense
of € 2.9 million was recorded in Fiscal Year 2011 under these agreements.
•
The Group leases office space to the Disney Channel in the Walt Disney Studios Park®, in its branded
buildings adjacent to attractions. Other revenues of € 3.0 million were recorded in Fiscal Year 2011 under this
lease.
Undertaking with Third Parties
Department Tax Guarantee
Pursuant to the Main Agreement, the Group and the French Republic guaranteed a minimum level of tax revenues
to the Department. Because the Department’s tax revenues were less than the amount of charges borne by the
Department for primary and secondary infrastructure from 1992 to 2003, the French Republic and the Group were
each required to reimburse, in equal shares to the Department, the difference between the tax revenues collected
and the charges borne, up to an aggregate amount of approximately € 45.0 million. Based upon the final assessment
covering the entire period of the guarantee through December 31, 2003, the Group is required to pay the
Department € 20.3 million under the terms of the guarantee in eight installments scheduled between December
2006 and December 2013. The € 12.1 million remaining unpaid portion of this liability is recorded at its discounted
value in the Group’s consolidated financial statements under Other non-current liabilities and under Trade and other
payables as of September 30, 2011.
27
A
A.4.2.
Other Significant Operating Agreements
Participant Agreements
The Group has entered into participant agreements with companies that are key players in their fields. As of
September 30, 2011, these participants include the following: Coca-Cola, Crédit Mutuel, Danone, Gibson, Hertz,
Kodak, MasterCard, Nestlé Waters, Orange, Segafredo Zanetti and Unilever.
These participant agreements provide the Resort participants with all or some of the following rights in exchange
for an individually negotiated fee: (i) a presence in the Resort through the sponsoring of one or more of the
Resort’s attractions, restaurants or other facilities, and (ii) promotional and marketing rights with respect to the
category of product which is covered by the participant agreement.
Each participant agreement terminates automatically in the event of an early termination of the License Agreement
(see the sub-section headed “License Agreement” above).
28
B
B.1
B.2
B.
B.3
B.4
B.5
B.6
B.7
B.8
B.9
29
B
Key Consolidated Financial Data
B.1. KEY CONSOLIDATED FINANCIAL DATA
The Year Ended September 30,
(€ in millions, except where indicated)
2011
2010
2009
Revenues
1,297.7
1,275.0
1,230.0
EBITDA(1)
184.5
201.5
187.2
11.5
34.1
26.4
Net financial charges
(75.7)
(79.1)
(89.2)
Net loss
(63.9)
(45.2)
(63.0)
(55.6)
(39.9)
(55.5)
(8.3)
(5.3)
(7.5)
(1.43)
(1.03)
(1.43)
Income Statement Data:
Operating margin
Net loss attributable to
Equity holders of the parent
Minority interests
Loss per share (in
€)(2)
Balance Sheet Data:
Property, plant and equipment, net(3)
1,880.3
1,974.4
2,035.5
Total assets
2,570.3
2,685.8
2,715.1
Shareholders’ equity
89.6
141.3
186.6
Minority interests
86.6
94.0
100.4
1,876.7
1,935.1
1,970.2
Cash flows generated by operating activities
168.7
236.7
124.1
Cash used in investing activities
(79.6)
(86.8)
(72.1)
89.1
149.9
52.0
Current and Non-current borrowings
Cash Flow Data:
Free cash flow generated(1)
(1)
(2)
(3)
30
EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) and Free cash flow (Cash generated by operating activities less cash
used in investing activities) are not measures of financial performance defined under IFRS, and should not be viewed as substitutes for operating
margin, net profit / (loss) or operating cash flows in evaluating the Group’s financial results. However, management believes that EBITDA and
Free cash flow are useful tools for evaluating the Group’s performance. See Section B.2. “Group and Parent Company Management Report”,
sub-section “Fiscal Year 2011 Consolidated Results of the Group” for a reconciliation of EBITDA and Free cash flow with the consolidated
financial statements.
Loss per share is calculated by dividing the net loss attributable to equity holders of the parent by the weighted-average number of shares
outstanding during the period. See section B.3. “Consolidated Financial Statements”, note 3.1.17 “Loss per share” for more details.
The Group’s tangible fixed assets are described in section B.3. “Consolidated Financial Statements”, note 4. “Property, Plant and Equipment,
Investment Property and Intangible Assets”.
Key Consolidated Financial Data
Following the implementation of Article 28 of the European Regulation n° 809/2004, the Group’s consolidated
financial statements and the statutory auditors’ report on the consolidated financial statements are presented by
reference:
•
for Fiscal Year 2010 in pages 67 to 112 of the English version of the Reference Document filed with the AMF
on January 28, 2011 under number D. 11-0041; and
•
for Fiscal Year 2009 in pages 64 to 107 of the English version of the Reference Document filed with the AMF
on January 28, 2010 under number D. 10-0030; and
These documents are available on both the Euro Disney (http://corporate.disneylandparis.com) and the AMF
(www.amf-france.org) websites1.
The consolidated financial statements for the year ended September 30, 2011 were prepared by the Company. They
will be submitted for approval at the shareholders’ general meeting of the Company. There has been no significant
change in the group’s financial or business position since September 30, 2011, excluding information mentioned in
section C.3.1. “Performance Indicator”, sub-section “Restrictions on Capital Expenditures”.
B
B.1
B.2
B.3
B.4
B.5
B.6
B.7
B.8
B.9
1
The AMF website is available in French only.
31
B
Group and Parent Company Management Report
B.2. GROUP AND PARENT COMPANY MANAGEMENT REPORT
The Group and parent company management report for Fiscal Year 2011 is made available to shareholders in
accordance with the law and presents the evolution of the financial condition of the Group and of the Company
during Fiscal Year 2011 and the expectations for the Group for the following Fiscal Years.
32
INTRODUCTION
34
FISCAL YEAR 2011 CONSOLIDATED RESULTS OF THE GROUP
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
DISCUSSION OF COMPONENTS OF OPERATING RESULTS
NET FINANCIAL CHARGES
NET LOSS
CAPITAL INVESTMENTS
DEBT
CASH FLOWS
SHAREHOLDERS’ EQUITY OF THE GROUP
RELATED-PARTY TRANSACTIONS
TRADE PAYABLES MATURITY ANALYSIS
34
35
35
36
36
36
37
38
39
39
39
FISCAL YEAR 2011 FINANCIAL RESULTS OF THE COMPANY
INCOME STATEMENT
SIGNIFICANT SUBSIDIARIES OF THE COMPANY
EQUITY OF THE COMPANY
NON-DEDUCTIBLE EXPENSES FOR TAX PURPOSES
RESEARCH AND DEVELOPMENT ACTIVITY
40
40
40
40
41
41
UPDATE ON RECENT AND UPCOMING EVENTS
42
MANAGEMENT OF THE GROUP IN FISCAL YEAR 2011
THE GERANT
THE SUPERVISORY BOARD
THE MANAGEMENT COMMITTEE
43
43
44
52
HUMAN RESOURCES INFORMATION
NUMBER OF EMPLOYEES
RECRUITMENT
LABOR MANAGEMENT
AWARDS AND CERTIFICATIONS
PROFESSIONAL TRAINING AND DEVELOPMENT OF SKILLS
HEALTH AND SAFETY CONDITIONS
SOCIAL RELATIONSHIPS
COMMUNITY RELATIONS
SUBCONTRACTING
55
55
55
55
56
56
57
57
58
58
ENVIRONMENTAL ACTIVITIES INFORMATION
CERTIFICATIONS RELATED TO ENVIRONMENT MANAGEMENT
ENVIRONMENTAL MANAGEMENT WITHIN THE GROUP
OPTIMIZING UTILITIES CONSUMPTION AND ENCOURAGING RENEWABLE ENERGIES DEVELOPMENT
REDUCING DIRECT GREENHOUSE GAS (“GHG”) EMISSIONS
MINIMIZING WASTE
CONTROLLING AND MINIMIZING IMPACTS ON THE ENVIRONMENT
PREVENTIVE MEASURES PROTECTING HEALTH AND ENVIRONMENT
EDUCATION AND ACTION WITH STAKEHOLDERS
ENVIRONMENTAL ISSUES
59
59
59
59
60
61
61
61
62
62
INSURANCE AND RISK FACTORS
INSURANCE
RISK FACTORS
63
63
63
FINANCIAL RESULTS OF THE COMPANY FOR THE PAST FIVE FISCAL YEARS
68
LIST OF THE DELEGATIONS OF AUTHORITY IN CURRENT VALIDITY GRANTED BY THE GENERAL
MEETING OF SHAREHOLDERS TO THE GERANT AS REGARDS TO INCREASES OF CAPITAL
69
B
B.1
B.2
B.3
B.4
B.5
B.6
B.7
B.8
B.9
33
B
INTRODUCTION
During the fiscal year 2011 which ended September 30, 2011 (the “Fiscal Year”), the Group* continued its resort
and real estate development activities.
FISCAL YEAR 2011 CONSOLIDATED RESULTS OF THE GROUP
Key Financial Highlights
Fiscal Year
(€ in millions)
2011
Revenues
Costs and Expenses
Operating Margin
2010
2009
1,297.7
1,275.0
1,230.0
(1,286.2)
(1,240.9)
(1,203.6)
11.5
34.1
26.4
Plus: depreciation and amortization
173.0
167.4
160.8
EBITDA(1)
184.5
201.5
187.2
EBITDA as a percentage of revenues
Net loss
Attributable to equity holders of the parent
Attributable to minority interests
14.2%
(45.2)
(63.0)
(55.6)
(39.9)
(55.5)
(8.3)
(5.3)
(7.5)
168.7
Cash flow used in investing activities
Cash and cash equivalents, end of period
(1)
15.2%
(63.9)
Cash flow generated by operating activities
Free cash flow generated(1)
15.8%
236.7
124.1
(79.6)
(86.8)
(72.1)
89.1
149.9
52.0
366.1
400.3
340.3
EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) and Free cash flow (cash generated by operating activities less cash
used in investing activities) are not measures of financial performance defined under IFRS, and should not be viewed as substitutes for operating
margin, net profit / (loss) or operating cash flows in evaluating the Group’s financial results. However, management believes that EBITDA and
Free cash flow are useful tools for evaluating the Group’s performance.
Key Operating Statistics
Fiscal Year
Theme parks attendance (in millions)(2)
Average spending per guest (in
€)(3)
Hotel occupancy rate(4)
Average spending per room (in €)(5)
(2)
(3)
(4)
(5)
*
34
2011
2010
2009
15.6
15.0
15.4
46.23
45.30
44.22
87.1%
219.74
85.4%
209.78
87.3%
201.24
Theme parks attendance is recorded on a “first click” basis, meaning that a person visiting both parks in a single day is counted as only one
visitor.
Average daily admission price and spending on food, beverage, merchandise and other services sold in the theme parks, excluding value added
tax.
Average daily rooms occupied as a percentage of total room inventory (total room inventory is approximately 5,800 rooms).
Average daily room price and spending on food, beverage, merchandise and other services sold in hotels, excluding value added tax.
The Group includes Euro Disney S.C.A. (the “Company”), its owned and controlled subsidiaries (the “Legally Controlled Group”) and its
consolidated financing companies.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Fiscal Year
(€ in millions)
Revenues
Costs and Expenses
Operating margin
Net Financial Charges
Gain / (loss) from equity investments
Loss before taxes
Income taxes
Net loss
2011
Variance
2010
Amount
%
1,297.7
1,275.0
22.7
(1,286.2)
(1,240.9)
(45.3)
1.8%
3.7%
(22.6)
(66.3)%
11.5
34.1
(75.7)
(79.1)
3.4
(4.3)%
0.3
(0.2)
0.5
n/m
(63.9)
(45.2)
(18.7)
-
-
-
41.4%
n/a
(63.9)
(45.2)
(18.7)
41.4%
(55.6)
(39.9)
(15.7)
39.3%
(8.3)
(5.3)
(3.0)
56.6%
Net loss attributable to:
Minority interests
n/m: not meaningful.
n/a: not applicable.
B
B.1
DISCUSSION OF COMPONENTS OF OPERATING RESULTS
B.2
Revenues by Operating Segment
B.3
Fiscal Year
(€ in millions)
Variance
2011
2010
Amount
Theme parks
724.3
685.3
39.0
5.7%
Hotels and Disney Village®
513.2
480.2
33.0
6.9%
37.7
49.7
(12.0)
(24.1)%
1,275.2
1,215.2
60.0
4.9%
(37.3)
(62.4)%
22.7
1.8%
Other
Real estate development segment
Total revenues
22.5
59.8
1,297.7
1,275.0
%
Resort operating segment revenues increased by € 60.0 million to € 1,275.2 million from € 1,215.2 million in the
prior-year.
Theme Parks revenues increased 6% to € 724.3 million from € 685.3 million in the prior-year, due to a 4% increase
in attendance to 15.6 million, combined with a 2% increase in average spending per guest to € 46.23. The increase
in attendance was primarily due to more guests visiting from France, the United Kingdom and Spain. The increase
in average spending per guest resulted from higher spending on admissions and food and beverage.
B.4
B.5
B.6
B.7
B.8
B.9
Hotels and Disney Village® revenues increased 7% to € 513.2 million from € 480.2 million in the prior-year, due to a
5% increase in average spending per room to € 219.74, combined with a 1.7 percentage point increase in hotel
occupancy to 87.1%. The increase in average spending per room resulted from higher daily room rates and
spending on food and beverage. The increase in hotel occupancy resulted from 35,000 additional room nights sold
compared to the prior year due to more guests from France and the United Kingdom, as well as a higher business
group activity, partly offset by fewer guests from the Netherlands.
Other revenues, which primarily include participant sponsorships, transportation and other travel services sold to
guests, decreased by € 12.0 million to € 37.7 million, compared to € 49.7 million in the prior-year. This decrease was
due to lower sponsorship revenues and a legal settlement gain in the prior-year.
Real estate development operating segment revenues decreased by € 37.3 million to € 22.5 million from
€ 59.8 million in the prior-year. This decrease was due to the prior-year € 47 million sale of the property on which
the Val d’Europe mall is located, partly offset by a greater number of transactions closed during the Fiscal Year.
35
B
Costs and Expenses
Fiscal Year
(€ in millions)
Direct operating
costs(1)
Variance
2011
2010
Amount
%
1,052.8
1,010.5
42.3
4.2%
Marketing and sales expenses
130.4
127.1
3.3
2.6%
General and administrative expenses
103.0
103.3
(0.3)
(0.3)%
1,286.2
1,240.9
45.3
3.7%
Costs and expenses
(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 Fiscal Year and the corresponding prior-year, royalties and management fees
were € 74.2 million and € 71.7 million, respectively.
Direct operating costs increased by € 42.3 million compared to the prior-year, mainly due to costs related to
enhancing the guest experience, labor rate inflation and volume-related resort costs. Partially offsetting these
increases was lower real estate cost of sales. Additionally, in fiscal year 2010, the Group benefited from the refund of
certain tax payments made in previous years, for a net amount of € 6.2 million.
Marketing and sales expenses increased by € 3.3 million compared to the prior-year, primarily due to higher
advertising rates and labor rate inflation. These expenses remained stable at 10% of the resort operating segment
revenues during the Fiscal Year.
Fiscal Year
(€ in millions)
Variance
2011
2010
Amount
Financial income
5.0
3.2
1.8
56.3%
%
Financial expense
(80.7)
(82.3)
1.6
(1.9)%
(75.7)
(79.1)
3.4
(4.3)%
Financial income increased by € 1.8 million due to higher short-term interest rates compared to the prior-year.
Financial expense decreased by € 1.6 million due to lower average borrowings compared to the prior-year.
NET LOSS
For the Fiscal Year, the Group’s net loss amounted to € 63.9 million, compared to a net loss of € 45.2 million for the
prior-year. Net loss attributable to equity holders of the parent and minority interests amounted to € 55.6 million
and € 8.3 million, respectively. The increase in the Group’s net loss compared to the prior-year reflects the
decreased net profit of the real estate development segment and increased costs related to enhancing the overall
guest experience.
CAPITAL INVESTMENTS
Capital Investment for the Last Three Fiscal Years
Fiscal Year
(€ in millions)
2011
2010
2009
Resort segment
70.6
99.7
71.3
Real estate development segment
Total capital investment
36
0.5
0.5
0.5
71.1
100.2
71.8
During the Fiscal Year, capital investments primarily included expenditures related to improvements to existing
long-lived assets, as well as costs related to the construction of new assets, including a new boutique scheduled to
open in June 2012 in the Disney Village® and a water treatment plant scheduled to open in 2013.
In fiscal year 2010, capital investments primarily included expenditures related to the construction of new assets,
including Toy Story Playland which opened in August 2010 in the Walt Disney Studios® Park, as well as various other
improvements to existing long-lived assets.
The Group has also committed to future investments related to the improvement of Disneyland® Paris (the
“Resort”) and existing assets, for an amount of € 40.9 million, as of September 30, 2011.
DEBT
The Group’s borrowings as of September 30, 2011 are detailed below:
Fiscal Year 2011
September 30,
2010
Increase
Decrease
CDC senior loans
237.0
-
-
(2.2)
234.8
CDC subordinated loans
798.1
24.6(1)
-
(2.3)
820.4
Credit Facility – Phase IA
34.7
0.7(2)
-
(35.4)
-
49.5
0.4(2)
-
(20.2)
29.7
(€ in millions)
Credit Facility – Phase IB
Transfers(4)
September 30,
2011
Partner Advances – Phase IA
272.8
-
-
(81.8)
191.0
Partner Advances – Phase IB
85.9
0.1(2)
-
(10.6)
75.4
333.7
38.6(3)
-
-
372.3
-
0.2
-
-
0.2
1,811.7
64.6
-
CDC senior loans
1.9
-
(2.0)
2.2
2.1
2.1
-
(2.0)
2.3
2.4
63.1
-
(63.1)
35.4
35.4
20.2
-
(20.2)
20.2
20.2
32.1
-
(32.1)
81.8
81.8
4.0
-
(3.7)
10.6
10.9
-
0.1
-
0.1
TWDC loans
Financial lease
Non-current borrowings
Financial lease
Current borrowings
Total borrowings
(1)
(2)
(3)
(4)
-
(152.5)
1,723.8
123.4
0.1
(123.1)
152.5
152.9
1,935.1
64.7
(123.1)
-
1,876.7
B
B.1
B.2
B.3
B.4
B.5
B.6
B.7
B.8
B.9
Increase related to the contractual deferral of interest on certain CDC subordinated loans, of which € 15.1 million is related to the conditional
deferral mechanism for the Fiscal Year, and € 5.1 million is related to the conditional deferral mechanism for fiscal year 2010. For further
information, refer to the Group’s 2010 Reference Document1.
Effective interest rate adjustment. As part of the 2005 Restructuring2, 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.
Increase related to the deferral of € 33.9 million of royalties and management fees of the Fiscal Year and the contractual deferral of interest on
TWDC loans.
Transfers from non-current borrowings to current borrowings, based on the scheduled repayments over the next twelve months.
During the Fiscal Year, the Group’s principal indebtedness decreased by € 58.4 million to € 1,876.7 million as of
September 30, 2011 compared to € 1,935.1 million as of September 30, 2010. This decrease is primarily related
to the € 123.1 million repayment of borrowings in the Fiscal Year and was partly offset by the € 33.9 million deferral
of Fiscal Year royalties and management fees due to The Walt Disney Company (“TWDC”), the € 20.2 million
deferral of Fiscal Year interest due to Caisse des dépôts et consignations (“CDC”) and the capitalization of accrued
interest on TWDC and CDC loans of € 4.7 million and € 4.4 million, respectively.
1
2
The Group’s 2010 Reference Document was registered with the Autorité des Marchés Financiers (“AMF”) on January 28, 2011 under the number
D.11-0041 (the “2010 Reference Document”) and is available on the Company’s website (http://corporate.disneylandparis.com) and the AMF
website (http://www.amf-france.org).
Refers to the legal and financial restructuring of the Group in Fiscal Year 2005, described in the section A.3 “History and development of the
Group” of the 2010 Reference Document.
37
B
CASH FLOWS
Cash and cash equivalents as of September 30, 2011 were € 366.1 million, down € 34.2 million compared to
September 30, 2010.
Fiscal Year
(€ in millions)
2011
2010
168.7
236.7
(68.0)
(79.6)
(86.8)
7.2
89.1
149.9
(60.8)
Free Cash flow generated
Cash flow used in financing activities
Variance
(123.3)
(89.9)
(33.4)
Change in cash and cash equivalents
(34.2)
60.0
(94.2)
Cash and cash equivalents, beginning of period
400.3
340.3
60.0
366.1
400.3
(34.2)
Free cash flow generated for the Fiscal Year was € 89.1 million compared to € 149.9 million in the prior-year.
Cash generated by operating activities for the Fiscal Year totaled € 168.7 million compared to € 236.7 million
generated in the prior fiscal year. This decrease resulted from increased working capital requirements and the
prior year’s significant property sale. Changes in working capital were driven by the payment of € 25.4 million
of royalties this Fiscal Year, whereas the corresponding amount in the prior-year was deferred into long-term
subordinated debt.
Cash used in investing activities for the Fiscal Year totaled € 79.6 million, compared to € 86.8 million in the
prior fiscal year. This decrease mainly reflects investment related to Toy Story Playland in the prior-year.
Cash used in financing activities for the Fiscal Year totaled € 123.3 million, compared to € 89.9 million used in the
prior fiscal year. This increase mainly reflects the scheduled repayment of bank borrowings made by the Group
during the Fiscal Year.
The Group has defined annual performance objectives under its debt agreements1. In the Fiscal Year, the Group did
not meet its performance objectives and must defer the following amounts incurred in the Fiscal Year into longterm subordinated debt2:
•
€ 25.0 million of the Fiscal Year royalties and management fees due to TWDC, and
•
€ 15.1 million of interest due to the CDC.
The Group is also required to defer an additional € 5.1 million of interest that will be incurred, and otherwise
payable to the CDC during the first quarter of fiscal year 2012.
As a result of utilizing the entire € 45.2 million of deferrals available to the Group with respect to the Fiscal Year, the
Group’s recurring annual investment budget for fiscal year 2012 and thereafter will be permitted up to 3% of the
prior fiscal year’s adjusted consolidated revenues3, unless the Group obtains lenders agreement to increase the
budget. For fiscal year 2012, if no agreement is reached, the Group’s recurring annual investment budget will be
reduced by approximately € 28 million, compared to the € 68 million incurred in the Fiscal Year.
The Group must also respect certain financial covenants under its debt agreements. The Group believes it has
achieved compliance with such covenants with the assistance of TWDC’s agreement, as permitted under the debt
agreements, to defer a further € 8.9 million of Fiscal Year 2011 royalties into long-term subordinated debt.
1
2
3
38
For further detailed information, refer to the Group’s 2010 Reference Document.
An amount of € 5.1 million of interest incurred in the first quarter of the Fiscal Year was deferred related to the Group’s fiscal year 2010
performance objectives.
Adjusted consolidated revenues correspond to consolidated revenues under IFRS, excluding participant sponsorships after removing the effect of
certain differences between IFRS and French accounting principles.
The foregoing deferrals and the Group’s compliance with its financial covenant requirements are subject to final
review by an independent expert in December, as provided in the debt agreements.
For fiscal year 2012, if compliance with financial performance covenants cannot be achieved, the Group will have to
appropriately reduce operating costs, curtail a portion of planned capital expenditures, sell assets 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 position, liquidity from the € 100.0 million line of credit available from TWDC and the benefit of additional
conditional deferrals.
SHAREHOLDERS’ EQUITY OF THE GROUP
Shareholders’ equity of the Group decreased to € 89.6 million as of September 30, 2011 from € 141.3 million as of
September 30, 2010, which mainly reflects the impact of the net loss attributable to the equity holders of the
Company for the Fiscal Year.
As of September 30, 2011 and 2010, EDL Holding Company LLC, which is an indirect, wholly-owned subsidiary
of TWDC, held 39.8% of the Company, a publicly held French company which is traded on Euronext Paris. As of
September 30, 2011 and 2010, a further 10% of the Company’s shares were owned by trusts for the benefits of HRH
Prince Alwaleed and his family.
No other shareholder has officially notified the Autorité des Marchés Financiers that it holds, directly or indirectly,
alone or jointly, or in concert with other entities, more than 5% of the share capital of the Company. The Company
does not know the aggregate number of shares held by its employees directly or through special mutual funds. No
dividend payment is proposed with respect to the Fiscal Year, and no dividends were paid with respect to fiscal years
2008 through 2010.
As of September 30, 2011 and 2010, the Company held 82% of the shares of Euro Disney Associés S.C.A. (“EDA”),
the operating company of the Resort, and TWDC indirectly held the remaining 18%.
B
B.1
B.2
B.3
B.4
B.5
B.6
The Group enters into certain transactions with TWDC and its subsidiaries. The most significant transactions relate
to a license arrangement for the use of TWDC intellectual property rights, management arrangements and
technical and administrative agreements for services provided by TWDC and its subsidiaries.
B.7
B.8
For a description of related-party activity for the Fiscal Year, see note 19 “Related Party Transactions” of the Group’s
consolidated financial statements.
B.9
Information related to maturity of trade payables is available in note 13.2 “Trade Payables Maturity Analysis” of the
Group’s Consolidated Financial Statements.
39
B
FISCAL YEAR 2011 FINANCIAL RESULTS OF THE COMPANY
The Company is the holding company of the Group and is consolidated in the financial statements of TWDC, an
American corporation headquartered in Burbank (California), USA. The Company’s financial statements are
prepared in accordance with French accounting principles and regulations in accordance with the Plan Comptable
Général.
INCOME STATEMENT
Fiscal Year revenues consist primarily of administrative assistance services provided to other entities of the Group.
The operating margin and net loss of the Company are as follows:
Fiscal Year
(€ in millions and in accordance with French accounting principles)
Variance
2011
2010
Amount
%
0.7
0.7
-
-
Costs and expenses
(2.2)
(2.3)
0.1
(4.3)%
Operating margin
(1.5)
(1.6)
0.1
(6.2)%
Net loss
(1.4)
(1.7)
0.3
(17.6)%
Revenues
SIGNIFICANT SUBSIDIARIES OF THE COMPANY
The Company’s primary asset is its € 603.6 million investment in EDA, which itself owns 99.9% of EDL Hôtels S.C.A.
(“EDLH”) and 100% of Euro Disney Vacances S.A.S., and other less significant subsidiaries. For further information,
see note 1.1 “Structure of the Group” of the Group’s consolidated financial statements.
The following table sets forth the key financial highlights and operating activities of the Company’s significant direct
and indirect subsidiaries:
(€ in millions and in accordance with
French accounting principles)
Revenues
Net Loss
Activity
1,218.2
(79.4)
Operator of the theme parks, Disneyland® Hotel, Disney’s
Davy Crockett Ranch® and a golf course, and manager of
the Group’s real estate development
EDL Hôtels S.C.A.
393.8
(8.1)
Operator of five of the seven themed hotels of the Group
plus the Disney Village®
Euro Disney Vacances S.A.S.
632.6
(1.4)
Tour operator selling mainly Disneyland® Paris holiday
packages
EDA
The Company will continue as a holding company in fiscal year 2012.
EQUITY OF THE COMPANY
Equity of the Company decreased to € 618.8 million as of September 30, 2011 from € 620.2 million
as of September 30, 2010, which reflects the impact of the net loss for the Fiscal Year.
40
As of September 30, 2011 and 2010, and following the finalization of the share consolidation (the “Reverse Stock
Split”) in December 2009, the Company’s fully paid share capital was composed of 38,976,490 shares with a nominal
value of € 1.00 each. As of September 30, 2009, the Company’s fully paid share capital was composed of
38,976,490 shares with a nominal value of € 1.00 each and of 46 shares with a nominal value of € 0.01 each. For a
description of the Reverse Stock Split, see section C.2.2 “Reverse Stock Split” of the Group’s 2010 Reference
Document.
In accordance with the authorizations granted by the Company’s shareholders during the three past annual general
meetings, the Gérant carried out a share buyback program through an independent investment services provider
acting under a liquidity contract. For additional information, see the notice on the share buyback program, as well
as the press releases on the liquidity contract, that are available on the Company’s website
(http://corporate.disneylandparis.com).
On April 2, 2009, under the terms of this contract, the Company allotted € 0.5 million in cash and 135,081 Company
shares to the liquidity account.
These contracts aim at improving the liquidity of transactions of the Company’s shares. For the Fiscal Year, Oddo
Corporate Finance fees related to this contract, including transactions costs, amounted to € 40,000.
B
The following table details the transactions related to the liquidity contracts for the Fiscal Year:
B.1
Treasury shares purchased in the Fiscal Year
Number
Average price (in €)
1,328,759
6.52
B.3
Treasury shares sold in the Fiscal Year
Number
Average price (in €)
1,294,137
6.51
144,930
Value at purchase price (in €)
740,611.33
Nominal value (in €)
144,930.00
Proportion of the share capital
B.4
B.5
Treasury shares held as of September 30, 2011
Number
B.2
B.6
B.7
0.4%
As of September 30, 2011, the Company also has € 0.4 million in cash allotted to the liquidity account. For
additional information on these liquidity contracts, see note 10.2 “Liquidity Contract” of the Group’s consolidated
B.8
B.9
NON-DEDUCTIBLE EXPENSES FOR TAX PURPOSES
For the Fiscal Year, the Company has not incurred any expenses that are not deductible for tax purposes with regard
to Article 223 quater of the Code Général des Impôts.
RESEARCH AND DEVELOPMENT ACTIVITY
The Company does not undertake research and development activities.
41
B
UPDATE ON RECENT AND UPCOMING EVENTS
On October 8, 2011, Disneyland® Paris opened Princess Pavilion, a brand new location in the Disneyland® Park,
where families can now enjoy a magical moment in the company of a Disney Princess. This dedicated location allows
guests the opportunity to share both time and memories with iconic characters from some of Walt Disney’s most
popular animated films.
In April 2012, Disneyland Paris will launch the celebrations of its 20th Anniversary. A number of brand new
experiences await guests, including Dreams, a night-time show with classic Disney storytelling and the latest technical
special effects. The 20th Anniversary will also celebrate two decades of partnership between the Group and the many
public and private organizations that have helped Disneyland Paris become, and remain, Europe’s number one
tourist destination.
SCHEDULED DEBT REPAYMENTS
The Group plans to repay € 152.9 million of its borrowings in fiscal year 2012, consistent with the scheduled
maturities.
SUBSEQUENT EVENTS
As of the date of this report, no significant subsequent event had been identified that could impact the Group’s
financial position or the Group’s consolidated financial statements disclosures.
42
MANAGEMENT OF THE GROUP IN FISCAL YEAR 2011
THE GERANT
The Company’s, EDA’s and EDLH’s Gérant is Euro Disney S.A.S., an indirect, wholly-owned subsidiary of TWDC.
The Gérant does not hold any share of the Company.
The sole corporate purpose of the Gérant is to be the management company of the Company, EDA and EDLH.
Under the bylaws of EDA, the Gérant is entitled to annual fees consisting of a base management fee and
a management incentive fee, and is also entitled to a fee if the Group sells one of its hotels. In addition, the bylaws
provide that the Gérant is entitled to be reimbursed by EDA for all its direct and indirect expenses incurred in the
execution of its responsibilities.
Base management fees earned by the Gérant were € 12.9 million for the Fiscal Year. No additional management
incentive fee was due in the Fiscal Year. Finally, no fee payable on the sale of hotels is due to the Gérant as the Group
did not sell any hotels during the Fiscal Year. For more detail, see section A.4.1 “Significant Undertakings Related to
the Resort’s Development” in the Group’s 2010 Reference Document.
Under their bylaws, the Company and EDLH are indebted to the Gérant for a fixed annual fee of € 25,000 and
€ 76,225, respectively.
The Gérant is represented by Mr. Philippe Gas, Chief Executive Officer (“CEO”).
Mr. Gas is a member of the Management Committee and is also Chief Operating Officer of Euro Disney
Commandité S.A.S., a direct wholly-owned subsidiary of Euro Disney S.C.A., and co-gérant of Villages Nature
Management S.A.R.L., a joint-venture between EDA and Pierre & Vacances Center Parcs Group. During the last five
fiscal years, he did not hold any other corporate positions (“mandats sociaux”), except as Chief Operating Officer of
ED Resort Services S.A.S. until July 2010 (this entity was merged into EDA). Until September 2008, he was Executive
Vice President – Human Resources, Diversity & Inclusion for Walt Disney Parks and Resorts worldwide. Prior to this,
he was Senior Vice President, Human Resources Parks and Resorts International for TWDC and Senior Vice
President, Human Resources for the Group, respectively (for further information, see below, section “The
Management Committee”).
To the Company’s knowledge, in the previous five fiscal years, the Gérant and its representative have not been:
•
convicted of any fraudulent offences;
•
associated with any bankruptcies, receiverships or liquidations;
•
involved in any official public incrimination and/or sanction by statutory or regulatory authorities;
•
prevented by a court from acting as a member of an administrative, management or supervisory body or
participating in the management of a public issuer.
B
B.1
B.2
B.3
B.4
B.5
B.6
B.7
B.8
B.9
To the Company’s knowledge, no potential conflicts of interest exist between any duties of the Gérant and/or its
representative and their private interests and/or duties.
The business address of the Gérant and its representative is the registered office of the Company (Immeubles
Administratifs, Route Nationale 34, 77700 Chessy, France).
43
B
THE SUPERVISORY BOARD
The Supervisory Board is comprised of ten members (including two members from TWDC):
Name
Term of office will expire
during the annual general
shareholders’ meeting
related to Fiscal Year
Number of
shares held(1)
2,676
Nationality
Age
Position
Antoine Jeancourt-Galignani
French
74
Chairman
2013
Valérie Bernis
French
52
Member
2013
250
Gérard Bouché
French
61
Member
2012
34,050
Virginie Calmels
French
40
Member
2013
250
Michel Corbière
French
69
Member
2011
250
Philippe Geslin
French
71
Member
2012
250
Philippe Labro
French
75
Member
2013
250
American
55
Member
2011
250
English
49
Member
2013
250
American
51
Member
2013
250
James A. Rasulo
Anthony Martin Robinson
Thomas O. Staggs
(1)
In accordance with the Supervisory Board members charter, each member is required to hold a minimum of 250 shares of the Company for the
duration of their membership.
He was elected to the Supervisory Board in February 1989. He was appointed Chairman in September 1995.
He is currently member of the board of directors of Kaufman & Broad S.A.
Valérie Bernis
She was elected to the Supervisory Board in February 2008. She has also been a member of the financial
accounts committee since her election. She is currently Executive Vice President of GDF Suez.
Gérard Bouché
He was elected to the Supervisory Board in February 2007. He is the owner and operator of the E. Leclerc
Shopping Center of Coulommiers and the golf of Boutigny (Seine-et-Marne-France). He is also Chairman of
Bouché Distribution S.A.S., a French corporation.
Virginie Calmels
She was elected to the Supervisory Board in March 2011. She is currently Chairman and CEO of Endemol
France and is also Vice President of the Syndicat des producteurs et créateurs d’émissions de télévision (Independent
Television Producers’ Union). She is also the Director of the Centre d’étude et de prospective stratégique and the
Director of Iliad.
Michel Corbière
He was elected to the Supervisory Board in February 2006. He is the founder of the Forest Hill group, which
specializes in sports and leisure activities as well as in the hotel industry. He is also the founder of the French
company Aquaboulevard de Paris.
Philippe Geslin
He was elected to the Supervisory Board in February 2007. He has also been the chairman to the financial
accounts committee since June 2007. He currently holds various corporate positions and board memberships
in financial institutions and major companies (Crédit Agricole Corporate & Investment Bank, Crédit Foncier
de Monaco and Union Financière de France-Banque).
Philippe Labro
He was elected as a member of the Supervisory Board in March 1996 and has been a member of the
nomination committee since November 2002. He was Vice President and General Manager of the RTL France
Radio. He is currently Project Director, Design and Operations of Labrocom S.A.R.L. and Vice President of
TV station Direct 8.
44
James A. Rasulo
He was elected as a member of the Supervisory Board in May 2003. He was appointed to Senior Executive Vice
President – Chief Financial Officer and Chairman of the Investment Committee of TWDC on January 1, 2010.
Before that date, he served as Chairman of Walt Disney Parks & Resorts.
He was elected as a member of the Supervisory Board in December 2004. He has also been a member of the
financial accounts committee since April 2005. He is currently Executive Chairman of Center Parcs (UK) Ltd.
Thomas O. Staggs
He was elected as a member of the Supervisory Board in March 2002 and has been a member of the
nominations committee since November 2002. He was appointed to Chairman of Walt Disney Parks & Resorts
Worldwide on January 1, 2010. Before that date, he served as Senior Executive Vice President and Chief
Financial Officer of TWDC.
The members of the Supervisory Board are also members of EDA’s Supervisory Board.
The business address of the members of the Supervisory Board with regard to their functions within the Group is
the registered office of the Company (Immeubles Administratifs, Route Nationale 34, 77700 Chessy, France).
B
B.1
B.2
B.3
B.4
B.5
B.6
B.7
B.8
B.9
45
B
The Supervisory Board members’ positions and directorships held in French and foreign companies over the past
five fiscal years were as follows:
Members of the Supervisory Board
Chairman
Other Positions and Directorships Held in French and Foreign Companies
Chairman of the Board of Directors
– SNA Holding (Bermuda) Ltd
(until December 31, 2008)
Member of the Board of Directors
– Gecina (until June 16, 2009)
– Total (until May 15, 2009)
– Société Générale (until May 27, 2008)
– AGF (until January 12, 2007)
– Kaufman & Broad S.A.
– SNA SAL, Lebanon (until December 31, 2008)
– SNA-Re (Bermuda) Ltd (until December 31, 2008)
– SNA Holding (Bermuda) Ltd (until December 31, 2008)
Member of the Supervisory Board
– Hypo Real Estate Holding AG, Germany
(until June 24, 2008)
– Euro Disney Associés S.C.A.
– Oddo
Valérie Bernis
Executive Vice President
– GDF Suez
– Suez Tractebel
– Société Monégasque d’Electricité et de Gaz (SMEG)
– Serna
– Storengy (until December 2009)
– Bull
– Suez Environment Company
Member of the Audit Committee
– Euro Disney S.C.A.
– Bull
Gérard Bouché
Representative of GDF Suez
– Member of the Board of Directors “Les Mécènes du
CENTQUATRE” (Cultural and Artistic Platform for the
City of Paris)
Permanent Representative of Suez
– Supervisory Board of SAIP
(Newspaper “Libération”) (until July 2008)
Chairman
– Bouché Distribution S.A.S.
Manager
– SGB S.A.R.L. (Société du Golf de Boutigny)
– Bouché Voyages S.A.R.L.
– TLB S.A.R.L.
Member
– ACDLEC (Association des Centres
Distributeurs E. Leclerc)
– GALEC S.C.A. (Groupement d’Achats E. Leclerc)
– GEC (Groupement des Entreprises de Coulommiers)
– CCI Seine et Marne
(Chambre de Commerce et d’Industrie)
(until end of 2006)
46
Virginie Calmels
President & Chief Executive Officer
– Endemol France
President
– Endemol Fiction
– Endemol Productions
– Mark Burnett Productions France
– Case Productions (until October 22, 2007)
– Usual Productions (until October 22, 2007)
– Seca Productions (until October 22, 2007)
– NAO (until April 21, 2009)
– DV Prod (until April 21, 2009)
– Endemol Jeux (until April 21, 2009)
– Tête de Prod (until April 21, 2009)
– Orevi (until April 21, 2009)
Vice President
– SPECT (Syndicat des Producteurs et Créateurs
d’Emissions de Télévision)
Member of the Executive Committee
– Formidooble
Director
– ILIAD (Free)
– CEPS (Centre d’Etude et de Prospective Stratégique)
Michel Corbière
Chairman & Chief Executive Officer
– Groupe Forest Hill SA
– Aquaboulevard de Paris SA
Philippe Geslin
Chairman
– Forest Hill Développement SAS
Director
– Hôtel Forest Hill Meudon Vélizy SA
Permanent Representative of Forest Hill
Meudon Vélizy SA
– Board of Directors of Hôtel Paris La Villette SA
Chairman of the Supervisory Board
– ETAM Développement (until December 31, 2007)
Manager
– Gestion Financière Conseil
– Crédit Agricole Corporate & Investment Bank
(until May 11, 2011)
B
B.1
B.2
B.3
B.4
B.5
B.6
B.7
B.8
– Crédit Foncier de Monaco
– Union Financière de France-Banque
B.9
– GECINA (until March 24, 2011)
Chairman of the Audit Committee
– GECINA
(this directorship ended during fiscal year 2010)
– ETAM Développement (until December 31, 2007)
– Altavia
Member of the Compensation Committee
Supervisory Auditor (“censeur”)
(since May 11, 2011)
– Invelios Capital
Permanent Representative of Invelios
Capital
– Supervisory Board of Société Vermandoise de
Sucreries
– Board of Directors of Société Sucrière de
Pithiviers-le-Vieil
– Board of Directors of Société Vermandoise - Industries
47
B
Philippe Labro
Vice President
– Direct 8
– Matin Plus
Project Director, Design & Operations
– Labrocom SARL
– Ediradio (RTL)
– Bolloré Media (Direct 8)
– ECE SA
James A. Rasulo
Member of the Nominations Committee
Columnist
– Le Figaro
Senior Executive Vice President & Chief
Financial Officer Chairman – Investment and
Administrative Committee
– The Walt Disney Company
Chairman
– Walt Disney Parks & Resorts, Inc.
(until March 29, 2009)
– Walt Disney Parks & Resorts Worldwide
(until January 1, 2010)
– WD Attractions, Inc. (until January 1, 2010)
– Disney Destinations, LLC (until April 2, 2006)
President
– ARDC-Ocala 201, LLC
– Character Concepts
(Division of Walt Disney World Co.) (until April 2,
2006)
– Disney Business Productions, LLC
– Disney Regional Entertainment Florida
(Division of Walt Disney World Hospitality &
Recreation Corporation)
– Disney Regional Entertainment, Inc.
(until June 1, 2006)
– Larkspur International Sales, Inc.
Senior Vice President
– Disney Worldwide Services, Inc.
Director
– Disney Incorporated
– Disneyland International (until January 1, 2010)
– Disney Regional Entertainment, Inc.
– From Time to Time, Inc. (until January 5, 2010)
– Disney Vacations Club Hawaii Management Corp.
(until August 28, 2009)
– Vista Communications, Inc. (until January 1, 2010)
– Walt Disney Travel Co., Inc. (until January 1, 2010)
– Walt Disney Parks & Resorts U.S., Inc.
– Walt Disney World Hospitality & Recreation
Corporation (until September 29, 2007)
– WCO Hotels, Inc.
48
James A. Rasulo (continued)
Director & Chairman / Director & President
– Walt Disney Parks & Resorts Online
– Club 33 (until January 1, 2010)
– DCSR, Inc. (until December 22, 2009)
– Disneyland, Inc. (until January 1, 2010)
– Disney Entertainment Productions
– Disney Magic Corporation (until January 1, 2010)
– Disney Wonder Corporation (until January 1, 2010)
– Euro Disney Corporation (until January 1, 2010)
– Magic Kingdom, Inc. (until January 1, 2010)
– Vista Title Insurance Agency, Inc.
– WCO Parent Corporation
– Walt Disney Entertainment (until September 27, 2008)
– Walt Disney Imagineering Research & Development,
Inc. (until January 1, 2010)
– Walt Disney Touring Productions
Director & Executive Vice President/Director
& Vice President
B.1
– Disney Realty, Inc.
– WCO Land Corporation
– WCO Leisures, Inc.
Senior Executive Vice President
B
– Disney Enterprises, Inc.
B.2
B.3
– The Walt Disney Company Foundation
Chief Financial Officer
– ABC Family Worldwide, Inc.
Trustee
Executive Chairman
– Center Parcs (UK) Ltd.
– Mabel (wagamama) (since May 2011)
B.4
B.5
B.6
– Health Club Holdings Ltd. (until 2008)
Director
– Figaro Partners LLP
B.7
– Alta Velocita Ltd (until September 2009)
– Center Parcs (Holdings 1) Ltd (since July 26, 2011)
B.8
– Forest Bidco Ltd
– Forest Holdco Ltd
B.9
– Forest Midco Ltd
– Forest Refico Ltd
– SPV1 Ltd (since May 17, 2011)
– SPV2 Ltd (since May 17, 2011)
– Sun CP Newmidco Ltd
– Sun CP Newtopco Ltd
– CP Woburn (Operating Company) Ltd
(since June 22, 2011)
– CP Nomco 1 Ltd (since July 26, 2011)
– CP Nomco 2 Ltd (since July 26, 2011)
– QCNS Monaco (since May 2011)
Non-Executive Director
– Regus PLC (until May 12, 2010)
49
B
Thomas O. Staggs
President & Director
– Buena Vista Media Services, Inc.
– EDL SNC Corporation
– Euro Disney Investments, Inc.
– WDT Services, Inc.
– WDW Services II, Inc.
– Vista Title Insurance Agency, Inc.
– Club 33
– Disneyland, Inc.
– Euro Disney Corporation
– Magic Kingdom, Inc.
– Walt Disney Touring Productions
– Walt Disney Parks & Resorts Online
– Walt Disney Imagineering Research & Development,
Inc.
President or Chairman
– Walt Disney Parks & Resorts Worldwide
– Larkspur International Sales, Inc. (until May 19, 2011)
– WDWH&R Services, Inc.
– W.D. Attractions, Inc.
– Disney Magic Corporation (until July 12, 2010)
– Disney Wonder Corporation (until July 12, 2010)
– Jetix Europe N.V. (until January 10, 2006)
– Lux Acquisition Corp. (until May 5, 2006)
– EDL Holding Company LLC
President & CEO
– ABC Radio Holdings, Inc. (until June 12, 2007)
Financial Officer Chairman – Investment and
Administrative Committee
– The Walt Disney Company (until January 1, 2010)
– ABC Family Worldwide, Inc. (until January 1, 2010)
Executive Vice President
– Disney Worldwide Services, Inc.
Vice President
– ABC News Online Investments, Inc.
– ABC, Inc.
– Disney Media Ventures, Inc.
– Disney Tele Ventures, Inc.
Director
– Allemand Subsidiary, Inc.
– B.V. Film Finance Co. II (until January 1, 2010)
– Disneyland International
– Vista Communications, Inc.
– Walt Disney Travel Co, Inc.
– Walt Disney Parks & Resorts U.S., Inc.
– Disney Magic Corporation
– Disney Wonder Corporation
– EDL Holding Company LLC (until February 23, 2009)
50
Financial Officer
– Disney Enterprises, Inc. (until January 1, 2010)
Member of the Investment Committee
– Steamboat Ventures LLC
Member of the Nominations Committee
Trustee
(until December 31, 2009)
Mr. Rasulo and Mr. Staggs are senior executive officers of TWDC and Mr. Geslin is supervisory auditor (“censeur”) of
the board of directors and member of the audit committee of Crédit Agricole Corporate & Investment Bank, which
participated in the Group’s financing, as lender and banks’ agents. In order to avoid any potential conflict of
interest or confidentiality situations, Mr. Geslin has undertaken to refrain from discussing any matters which
potentially could involve a conflict of interest. Except as aforementioned, to the Group’s knowledge, no potential
conflicts of interest between any duties of the members of the Supervisory Board, and their private interests and/or
duties exist. No member of the Supervisory Board is concerned by an agreement as defined under Article L. 226-10
of the French Commercial Code, which governs related-party agreements between Supervisory Board members
and the Company or any of its subsidiaries.
To management’s knowledge, in the previous five fiscal years, members of the Supervisory Board have not been:
•
•
•
•
involved in a family relationship conflicting with their responsibility as members of the Supervisory Board;
B
•
B.1
With the exception of the members who represent TWDC, compensation is allocated to each member of the Board
in proportion to his/her attendance at the Board meetings and within a limit of four meetings per fiscal year (“jetons
de présence”). Those members who represent TWDC do not receive compensation for their attendance. A double
jeton de présence is allocated to the Chairman of the Board. Members of the Company’s Supervisory Board do not
benefit from other compensation, indemnity or benefit at the start or the end of their membership. No stock
options of the Company have been granted to the members of the Supervisory Board.
B.2
The Company’s Supervisory Board includes a financial accounts committee and a nominations committee. A part of
the annual collective amounts of jetons de présence granted to the Board members at the annual shareholders’ general
meeting is allocated to each member of the financial accounts committee in proportion to his/her attendance and
within a limit of three meetings per fiscal year and in addition to the compensation for attending Board meetings. A
higher fee is allocated to the chairman of the financial accounts committee. The members of the nominations
committee do not receive any compensation for serving on this committee.
B.5
The Supervisory Board members do not receive any compensation for serving on the Board of EDA.
B.8
B.3
B.4
B.6
B.7
B.9
51
B
The following table details the Supervisory Board’s compensation:
Jetons de présence
for Supervisory Board
meetings paid in
Fiscal Year (in euros)(2)
Name
Jetons de présence
for financial accounts
committee meetings
paid in Fiscal Year (in euros)
Total compensation
paid in Fiscal Year (in euros)
2011
2010
2011
2010
2011
2010
60,980
60,980
-
-
60,980
60,980
Valérie Bernis
30,490
22,867
5,000
7,500
35,490
30,367
Gérard Bouché
30,490
30,490
-
-
30,490
30,490
Virginie Calmels
22,867
-
-
-
22,867
-
Michel Corbière
22,867
30,490
-
-
22,867
30,490
Philippe Geslin
22,867
30,490
12,000
12,000
34,867
42,490
Philippe Labro
30,490
30,490
-
-
30,490
30,490
-
-
-
-
-
-
30,490
30,490
7,500
7,500
37,990
37,990
-
-
-
-
-
-
251,541
236,297
24,500
27,000
276,041
263,297
James A. Rasulo(1)
Anthony Martin Robinson(3)
Thomas O. Staggs
Total
(1)
(2)
(3)
Mr James A. Rasulo is Senior Executive Vice President and Chief Financial Office of TWDC and receives compensation from TWDC which is
comprised of an annual fixed salary, a bonus and restricted stock units and stock options. This information is disclosed in the Form 8-K published
by TWDC on January 8, 2010 and available on the Securities Exchange Commission (“SEC”) website (www.sec.gov); compensation paid by TWDC
to Mr Rasulo during the Fiscal Year will be published on the websites of TWDC (www.corporate.disney.go.com) and the SEC (www.sec.gov).
The Company’s Board met four times during the Fiscal Year with an attendance rate of 84% compared to five times during fiscal year 2010.
Mr Robinson’s jetons de présence are subject to withholding taxes, which amounted to € 12,662 and € 12,662 for fiscal years 2011 and 2010,
respectively.
The Management Committee is comprised of the Chief Executive Officer’s direct reports. In addition, the Group has
four specialized committees described below. The members of the Management Committee participate in one or
several of these committees.
The four specialized committees are:
•
the Steering Committee, which focuses on the management of the overall income statement and decision-making
on strategic issues;
•
the Operations Committee, which focuses on operational problem solving and quality, safety and cost
management;
•
the Revenue Committee, which focuses on marketing, sales and revenue management, across the core business;
•
the Development and External Affairs Committee, which focuses on the management of development projects and
matters relating to external stakeholders.
The Management Committee members for the Fiscal Year were the following:
Philippe Gas, Chief Executive Officer
Philippe has been serving as CEO of Euro Disney S.A.S. since September 2008. He joined the Group in
1991 and was a member of the opening team at Disneyland® Paris. Over the six following years, he held a
variety of positions before being promoted to Director, Corporate Compensation and moved to TWDC
headquarters in Burbank, California. In 2000, he served as Regional Vice President, Human Resources,
The Walt Disney Company Asia-Pacific. In 2004, he returned to Disneyland Paris as Senior Vice President,
Human Resources. A year later, he was appointed Senior Vice President, International Human Resources,
Walt Disney Parks and Resorts. In 2006, he was promoted to the position of Executive Vice President,
Human Resources, Diversity & Inclusion for Walt Disney Parks & Resorts worldwide.
52
Dominique Cocquet, Senior Vice President Strategic Project Consulting & Development (until August 2011)
Dominique joined the Group in 1989 as Manager of Real Estate Finance. He was promoted in 1992 to Vice
President in charge of Development & External Relations and in 2008 to Senior Vice President, Strategic
Consulting and Development. Dominique is now General Manager of Villages Nature de Val
d’Europe S.A.S.
Federico J. Gonzalez, Senior Vice President Marketing and Sales
Federico joined the Group as Senior Vice President Marketing in November 2004. Prior to joining the
Group, he spent sixteen years with Procter & Gamble, in various positions including Brand Manager Spain
followed by three years at the group’s European Headquarters in Brussels, two years as Director Marketing
for the Nordic region, and later being promoted to General Manager Portugal. In February 2011, he was
promoted to Senior Vice President Marketing and Sales.
Greg Richart, Chief Financial Officer (until November 2011)
Greg joined the Group in 2007. He began his career with Arthur Andersen in Los Angeles in 1996. In
2003, he joined the Transaction Support department at TWDC in Burbank. In 2007, he joined the Group
as Vice President and Chief Accounting Officer. In August 2009, Greg was promoted to Chief Financial
Officer. On November 22, 2011, Greg was appointed Senior Vice President, Operations, Planning and
Analysis, TWDC.
B
Mark Stead, Chief Financial Officer (from November 2011)
Mark joined the Group in 2006. Prior to joining the Group, Mark spent several years with the Special
Projects and Internal Audit department of Vivendi in Paris and, prior to that, with Ernst & Young in both
Paris and Cape Town, South Africa. In 2006, he joined the Group as Director of Corporate Controllership
before being promoted to Vice President and Chief Accounting Officer in 2009. On November 22, 2011,
Mark was promoted to Chief Financial Officer.
B.1
Joe Schott, Senior Vice President & Chief Operating Officer
Joe joined the Group in January 2010. He began his career at the Walt Disney World Resort and
participated in the opening of Disney theme parks around the world. He led global operational safety for
Disney’s theme parks before being promoted to Director, Park Operations at Walt Disney World. Most
recently, Joe served as Vice President and Executive Managing Director, Walt Disney Attractions Japan and
Disneyland International.
B.4
Norbert Stiekema, Senior Vice President Sales & Distribution (until February 2011)
Norbert joined the Group in 2004. Prior to joining the Group, he worked for KLM Royal Dutch Airlines in
several revenue management and distribution positions. He was promoted to Consumer Direct Manager
for Benelux, Commercial Manager for France and General Manager for Southern Africa, Italy and
Germany. Norbert left the Group in February 2011.
B.7
B.2
B.3
B.5
B.6
B.8
B.9
Jeff Archambault, Vice President Communication
Jeff joined the Group as part of the opening team in 1992 as Finance Manager. Since then, he has taken on
positions of increasing responsibility including Director Purchasing & Logistics, Director Maintenance &
Landscaping, Vice President Park Operations, Vice President Walt Disney Studios® Development and Vice
President Corporate Alliances and Alliance Marketing. In his current position, Jeff is responsible for
Corporate and Internal Communications as well as Community Relations.
Francis Borezée, Vice President Resort & Real Estate Development
Francis joined the Group in 1991 as Director Land Development. Prior to joining the Group, he spent
more than ten years with the Sari Group, a Paris-la-Défense property developer. He was promoted to Vice
President Real Estate Development in 1998. As of October 2005, he extended his responsibilities to include
the Resort and Disney Village® development.
Andrew de Csilléry, Vice President Strategy & Development
Andrew joined the Group in February 2004. Following a career as a consultant with Touche Ross and
Gemini Consulting, he joined Bass PLC (which is now the InterContinental Hotels Group) where he held a
number of roles of increasing responsibility within the strategy division in London and in Singapore before
becoming Regional Vice President of Operations New Zealand / South Pacific region.
53
B
Gilles Dobelle, Managing Vice President & General Counsel (from April 2011)
Gilles joined the Group in April 2011. Prior to joining the Group, Gilles occupied various positions at Credit
Agricole Corporate & Investment Bank from 1990, then Deutsche Bank from 1996 where he was promoted to
General Counsel – France. In 2003, he became General Counsel – Europe for General Electric Corporate
Finance Bank, and then extended his responsibilities to become Chief Compliance Officer in 2005.
Daniel Dreux, Vice President Human Resources
Daniel joined the Group in 1992. Prior to joining the Group, he spent ten years in the Burger King group,
where he held a number of positions of increasing responsibility. In 1992, he joined the Group as
Manager, Labor Relations and held a variety of leadership positions in Human Resources, Purchasing,
General Services, and Security. In 2003, he was named Vice President – Labor Relations and subsequently
Vice President – Human Resources in 2007.
Julien Kauffmann, Vice President Revenue Management & Analytics
Julien joined the Group in 2003. He began his career as a Consultant for Oliver Wyman’s global Consumer
Goods, Retail and Communication practices, progressing to Partner. In 2003, he joined the Group as
Director, Revenue Development. Since then, he has held various positions of increasing responsibilities
including Vice President, Strategic Market Planning & Pricing and Vice President, Business Optimization.
Since January 2010, Julien serves as Vice President, Revenue Management & Analytics.
Thierry Leleu, Vice President External Relations
Thierry joined the Group in January 2006 as Director – External Relations. Prior to joining the Group, he held
a variety of positions of increasing responsibility in the French and European administrations. After being
Advisor to the permanent representation of France at the European Union and then assuming different
functions in Ministerial Cabinets of Interior, Infrastructures, Transportation and Social Affairs, Thierry held
the position of First Diplomatic Advisor at the French Embassy of South Africa. Thierry currently holds the
position of Vice President – External Relations, and is in charge of the Group’s political and corporate affairs.
François Pinon, Vice President & General Counsel (until January 2011)
François joined the Group in 1989 and was a member of the opening team at Disneyland® Paris. Over the
six following years, he held various positions within the Group’s Legal Affairs Department. From 1995 to
1997, he joined Solidere, a Lebanese company in charge of Beirut reconstruction, as Senior Counsel.
Then, from 1997 to 2000, he joined EDS France, a leading global technology services provider, as General
Counsel. He returned to the Group in 2000 as Deputy Legal Counsel. In April 2004, François was
promoted to Vice President & General Counsel. François left the Group in January 2011.
The Management Committee members are not required by law to hold a minimum number of shares of the Company. The
Company however requires each member to hold a minimum of 250 shares for the duration of their membership.
During the Fiscal Year, the aggregate compensation and other amounts, including social charges, relocation and
accommodation expenses, paid by the Group on behalf of the Management Committee members was € 7.5 million. As
of September 30, 2011, these same officers held together a total of 88,854 of the Company’s stock options, 185,847
of TWDC’s stock options and 141,947 of TWDC’s restricted stock units. For additional information on the
Company’s stock options, see note 21 “Stock options” of the Consolidated Financial Statements. The Group bears
the cost of all compensation paid to the Management Committee members in relation to their duties to the Group. No
specific extra pension scheme is in place for the Management Committee members.
During fiscal years 2010 and 2009, the aggregate compensation and other amounts incurred by the Group on the
behalf of the Management Committee members was € 6.0 million and € 5.7 million, respectively.
To management’s knowledge and in the previous five fiscal years, members of the Management Committee have not been:
•
•
•
•
involved in a family relationship conflicting with their responsibility as members of the Management Committee;
•
No member of the Management Committee is concerned by any agreement as defined under Article L. 226-10 of
the French Commercial Code. To the Group’s knowledge, no potential conflicts of interest between any duties of
the members of the Management Committee and their private interests and/or duties exist.
54
HUMAN RESOURCES INFORMATION
With an average of more than 13,700 employees, the Group is the largest employer in the Department of
Seine-et-Marne.
The Company, EDA, ED Spectacles S.A.R.L. (a direct wholly-owned subsidiary of EDA, which operates the Buffalo
Bill’s Wild West Show within Disney Village®) and Euro Disney S.A.S, are pooled together as a French economic
labor unit (Unité Economique et Sociale, “UES”). The UES is regulated by the National Collective Bargaining
Agreement of the French Amusement Parks (“Branche des Espaces de Loisirs, d’Attractions et Culturels”), according to an
agreement signed April 26, 2001, with six out of the seven trade unions represented in the UES.
S.E.T.E.M.O. Imagineering S.A.R.L. is also included in the Group’s consolidated financial statements but excluded
from the UES scope. This entity provides studies on projects of new attractions and manages their construction.
NUMBER OF EMPLOYEES
The Group’s weighted-average number of employees for fiscal years 2011, 2010 and 2009 is presented below:
2011
Salaried
2010
2009
1,779
1,789
1,806
Hourly
11,963
11,521
11,552
Total
13,742
13,310
13,358
B
B.1
B.2
The proportion of permanent contracts remained stable over the past three years at approximately 90% of total
employee contracts. For the Fiscal Year, the total labor force under permanent contracts included 46% women and
54% men. More than one hundred nationalities were employed by the Group during the Fiscal Year with about
twenty different languages spoken and more than 500 job roles. The average age of employees is 36 years. The
average term of employment was 9.5 years, while more than 42% of employees under permanent contracts have
been employed by the Group for more than ten years and 4.2% of employees have been employed for more than
twenty years. During the Fiscal Year, approximately 3.3% of the total workforce was comprised of disabled workers.
B.3
B.4
B.5
RECRUITMENT
B.6
During the Fiscal Year, the Group continued its recruitment campaigns throughout Europe and more than
20,000 non-solicited job applications were received. The Group hired 7,661 employees, of which 19% under
permanent contracts, 62% under fixed-term contracts and 19% under temporary contracts. More than 65% of the
total permanent contracts were hired full-time (i.e., a 35-hour work week), and 35% were hired for work weeks
ranging from 16 to 28 hours. The number of hirings corresponds to the number of persons who have signed at least
one employment contract (permanent contract, fixed-term contract or temporary contract) during the Fiscal Year.
B.7
B.8
B.9
The total number of employees dismissed during the Fiscal Year was 277, or 2% of the average labor force, and
compares to 333 in the prior-year period. Professional misconduct accounted for 74% of those dismissed in the
Fiscal Year, while 26% were dismissed for real, serious and other causes, as defined under French labor law.
LABOR MANAGEMENT
For the Fiscal Year, total labor costs for the Group amounted to € 556.9 million, of which € 11.6 million was paid to
temporary employment agencies. The average wage increase to employees of the Group present throughout the
Fiscal Year was above inflation. The average payroll tax rate paid by the Group was approximately 42.9% of gross
salaries.
Operations are based on a 35-hour work week. Due to the seasonal nature of the business, the need for employees
varies throughout the year. Accordingly, a system has been developed and used by the Group to optimize scheduling
and employee mobility between the theme parks and hotels. The system improves efficiency by automating both
scheduling and the corresponding payroll systems. In conjunction with this system, flexible working contracts have
been negotiated with employee labor unions. Special part-time contracts, such as four-day work weeks or
personalized contracts have also been put in place. This flexibility has helped management to better match the
number of employees with the level of activity.
55
B
Employees worked a total of 451,464 overtime hours during the period, or 2.4% of total labor hours worked. Over
the same period, legal absences for days off were mainly due to paid and unpaid holidays (39%), illness (19%),
training (13%), work-related accidents (3%), maternity leaves (4%) and other reasons (22%).
AWARDS AND CERTIFICATIONS
In 2008, the Group received the 5th Annual Trophy for Cultural Diversity as an award for its commitment to diversity
in the workplace. This award was given by external human resources professionals with the support of the French
agency for social cohesion (Agence Nationale pour la Cohésion Sociale et l’Egalité des Chances, “ACSE”). In 2009, the
Group signed the national Diversity charter to exhibit its commitment to diversity through recruitment and internal
promotions. The Group also entered the “Nos quartiers ont du talent” (“Our neighborhoods have talent”) program,
which provides corporate mentors to young, multicultural college graduates from low-income neighborhoods.
Several of the Group’s Management Committee members serve as mentors.
In 2010, an employee survey named the Diversity Caravan invited employees to give their opinion on their
experience of diversity in the workplace. Conducted by an independent consultant with the support of the ACSE,
the survey gathered nearly 5,000 responses. Findings show that 86% of employees say that diversity is “strong” or
“very strong” within the Group.
During the Fiscal Year, the Group was granted the Diversity Label from AFNOR Certification, an independent
organization, recognizing the Group’s commitment in preventing discrimination, ensuring equal opportunities and
promoting diversity.
During the Fiscal Year, the Group also received the Trophy for Good Working Conditions (Trophée “Mieux vivre en
entreprise”) as an award for its Castmemberland program, which has been designed to improve working conditions
for Group’s employees since 2000. This award was given by an independent consulting firm.
PROFESSIONAL TRAINING AND DEVELOPMENT OF SKILLS
In order to deliver a high quality experience to guests, the Group provides targeted training to its employees. This is
managed by the Human Resources (“HR”) department.
Over the prior calendar year, training costs represented 4.88% of total gross salaries (compared to the minimum
legal requirement of 1.6%).
The Disney University provides training related to Management and Leadership Development, Culture and Heritage,
Train the Trainer, Language and Administrative and Computer applications. Disney University has created a
curriculum targeted to support the Group’s diverse employee profiles. Leadership Development and a variety of
learning formats (examples include on-line tools and events) are key areas of focus for the Disney University.
Alongside the Disney University, the HR department’s training teams offer professional training for all employees in
order to ensure guest and cast safety, improve efficiency in operations, learn about technical evolutions and
strengthen service quality. For each job and area, the training teams design courses and programs using various
learning methods (classroom programs, on-line tools, forums and various other tools). This allows employees to
practice and acquire concrete skills. Some programs help employees obtain recognized certification in their trade
or access to management positions. The programs support the Group’s activities and take into account employee
diversity. They are provided from an employee’s first day and during his or her entire career within the Group.
The Group is certified by the Ministry of Labor to provide employees with a national diploma “Agent de Loisirs”,
based on the training program “Hôte d’Accueil Touristique”. This diploma acknowledges an employee at the national
level for the skills and experience he/she has developed.
In January 2006, the Disney University became one of the very first company training centers given the NF Service
Label certification for continued development (“NF Service: Formation Professionnelle Continue”). This recognition was
delivered by AFNOR Certification, recognizing Disney University’s commitment in consistently providing high
quality training programs to employees. The Group is the only organization in the theme parks business that has
achieved this honor.
56
HEALTH AND SAFETY CONDITIONS
Since 1997, the Group has developed an integrated strategy under an internal Quality-Health, Safety and Working
Conditions-Environment charter. During the Fiscal Year, 111 meetings of the Health and Safety council (called
“CHSCT”) were held, including nine meetings of the central CHSCT.
In fiscal year 2010, a Health & Safety department was created, gathering key services such as Occupational Health,
First Aid, Cast Safety and Social Welfare. These teams identified the priorities for the coming years (including Aging
and Psychological risks) and defined four key strategies: mobilize the management, increase employees awareness,
demonstrate the value of Health & Safety recommendations, and participate in key projects. For example, in fiscal
year 2010, the teams actively participated in the construction of Toy Story Playland.
Actions are continually developed to reduce risk and to support these strategies. For example, during the Fiscal
Year, a 30% reduction in the quantity of hazardous chemical products was achieved throughout the Resort.
Also, during the Fiscal Year, a global integrated safety organization was created by TWDC in its Walt Disney Parks &
Resorts segment (“WDP&R”). The objective of this organization is to improve security and safety for employees as
well as guests in all Disney theme parks around the world.
For the Fiscal Year, the percentage of gross salaries paid to social organizations relating to accidents at work was
2.20% for EDA, 4.73% for ED Spectacles S.A.R.L. and 1.28% for S.E.T.E.M.O. Imagineering S.A.R.L.
B
B.1
B.2
SOCIAL RELATIONSHIPS
Seven French labor unions, the Confédération Générale du Travail (C.G.T.), the Confédération Française Démocratique du
Travail (C.F.D.T.), the Confédération Française de l’Encadrement – Confédération Générale des Cadres (C.F.E.-C.G.C.), Force
Ouvrière (F.O.), the Confédération Française des Travailleurs Chrétiens (C.F.T.C.), the Syndicat Indépendant du Personnel
Euro Disney (S.I.P.E.) and the Union Nationale des Syndicats Autonomes (U.N.S.A.), are represented at the Resort.
B.3
The number of meetings held by the Workers Council and Staff Representatives during the Fiscal Year were 30 and
182, respectively.
B.5
The mandates of all the employee’s representatives (Worker’s Council, Staff Representatives, Health & Safety at
Work Committee) were renewed in 2010, for a period of four years, and will thus expire by the end of calendar year
2014. These renewals also led to a change in labor unions representation: only six labor unions out of the seven
mentioned above will now participate in negotiations with the Group concerning labor agreements.
For the Fiscal Year, the Workers Council budget amounted to € 2.5 million, of which € 1.8 million is dedicated to
subsidizing certain employee purchases and the remaining € 0.7 million is for the Workers Council’s operating
budget (which represents 0.53% and 0.2% of total gross salaries paid to employees, respectively).
B.4
B.6
B.7
B.8
B.9
The Group signed an agreement for employment of disabled workers on December 26, 2007 for a period of three
years. A new agreement was signed in March 2011 for three more years.
The Group signed an agreement on September 8, 2010 concerning wages and gender equality at work.
The Group is also focused on Health & Safety at work and has signed an agreement on September 1, 2011 covering
psychosocial risks in order to provide guidelines and means to prevent critical situations and provide reliable
support tools to employees.
The Group did not make distributions under its legally required statutory profit sharing plan since it has cumulative
net losses for the last five-year period, and there was no supplemental profit sharing plan applicable. The Group
does not offer shares of the Company to its employees through a company savings scheme.
57
B
COMMUNITY RELATIONS
The Group is part of the “Children In Need” sponsorship program, which includes three major parts:
•
hospital visits by Disney® characters;
•
the Children’s Wishes program that allows seriously ill children to make their dreams come true at the Resort;
•
the actions of the Disney VoluntEARS Club.
In addition, the Group supports certain charitable associations through its collection and donation programs.
SUBCONTRACTING
For the Fiscal Year, the main subcontracting agreements that the Group has in place relate to hotel room and
theme parks cleaning, employees’ restaurants and security services.
58
ENVIRONMENTAL ACTIVITIES INFORMATION
The Group is committed to minimizing its overall impact to the environment while encouraging employees, guests
and business associates to commit to environmentally responsible behavior. Specifically, the Group aims to conserve
water and energy, to preserve ecosystems, to reduce greenhouse gas emissions, to minimize waste and to raise public
consciousness in support of environmental sustainability. The Group complies with environmental laws and
regulations at French and European levels. The Group is committed to regularly communicating, both internally
and externally, its progress toward implementing its policies and achieving its targets.
CERTIFICATIONS RELATED TO ENVIRONMENT MANAGEMENT
The Group’s environmental strategy is focused on risk prevention and control, the improvement of environmental
performance and preparation for the future using innovative solutions. In addition, the Group has developed an
environmental management system based on the ISO 14001 certification, and is integrated within TWDC’s Safety
and Environment strategy.
ENVIRONMENTAL MANAGEMENT WITHIN THE GROUP
B
The Group’s environmental team works in cooperation with TWDC’s environmental affairs team and the
environmental partners of other Disney parks to develop new standards and policies. In a context of growing
environmental costs and high expectations from the public around environmental matters, the Group decided
during the Fiscal Year to develop a long-term environmental strategy, integrated with that of TWDC.
B.1
In February 2011, an Environmental Task Force was created that included experts from all fields of operations
within the Group, as well as TWDC Teams. Together they developed an environmental strategy in line with the
French Grenelle regulations and TWDC’s mid- and long-term goals. This strategy includes a selection and
prioritization of strategic initiatives over the next 20 years.
B.3
Various internal project groups are in charge of implementing specific policies or initiatives related to energy
consumption, waste management and employee behavior changes. A specific team is also in charge of monitoring
certain on-site locations classified for environmental protection, of which eight require authorization from or a
registration with the Préfecture de Seine-et-Marne (French state department) and 23 require a declaration made to the
Préfecture de Seine-et-Marne, each with specified prescriptions. Two internal auditors carry out regular audits to review
whether the recommendations are effectively applied and one expert monitors new laws and regulations issued by
the public authorities.
OPTIMIZING UTILITIES CONSUMPTION AND ENCOURAGING RENEWABLE ENERGIES DEVELOPMENT
B.2
B.4
B.5
B.6
B.7
B.8
B.9
A team is dedicated to monitoring and managing the Group’s water, natural gas and electricity consumption
through daily electronic analyses, allowing for appropriate corrective actions when needed.
Utilities consumption for the past three fiscal years is presented below:
Fiscal Year
Utility consumption (per year)
2011
2010
2009
1,968
2,008
2,010
Domestic natural gas (megawatt hours (“MWh”))
107,871
111,091
110,366
Electricity (MWh)
190,592
193,252
197,898
Water (thousands of cubic meters)
59
B
Energy
Throughout the resort, the Group has implemented energy management systems and scorecards, replaced old
lighting and fixtures with more energy-efficient alternatives; and increased efficiency of air coolers, air handlers and
pumps through technology enhancement and controls. As an example, this Fiscal Year included the installation of
“smart” thermostats in 500 hotel rooms, which is expected to allow for a 30% reduction in energy consumption. In
view of the positive results, 500 more hotel rooms are to be equipped in fiscal year 2012.
Like every year since 2006, the Group purchases 15% of its electricity consumption from renewable energy sources.
This purchase percentage covers 30,000 MWh, which is the equivalent to the consumption of two large hotels. The
Group selected the “kWH Equilibre” program which is provided by the French Electricity Company (“EDF”). This
program is backed by green certificates provided by the Renewable Energies Observatory (“Observatoire des Energies
Renouvelables”), which is an independent French institute dedicated to the issuance of green certificates. Those
certificates help guarantee the renewable origin of the energy by providing traceability.
Water
Water resources are primarily used for sanitary usage, ornamental ponds, irrigation, washing and the production
of chilled water for restaurants and guests’ rooms. Reduction of water consumption is important to the Group and
efforts have been strongly reinforced since 1998.
In September 2010, the Group announced the launch of construction for a wastewater treatment plant for the
Theme Parks and the Disneyland® Hotel. This facility is scheduled to open in 2013 and will lead to the recycling and
reuse of most of the treated water for irrigation, road and sidewalk washing or ornamental ponds. The Group
currently estimates that it will save 330,000 m3 of drinking water1. This new water treatment system should result in a
35% reduction of CO2 emissions compared to a standard treatment system.
REDUCING DIRECT GREENHOUSE GAS (“GHG”) EMISSIONS
During the Fiscal Year, several initiatives were launched to reduce greenhouse gas emissions, including the
deployment of cars with lower CO2 emissions as well as four entirely electric cars. The Group has also implemented
a travel plan aimed at optimizing professional trips and limiting the use of individual cars through more efficient
management of carpooling, the installation of bike sheds in the administrative areas, and is studying the
opportunity to train 4,000 employees on “eco-driving”. In the Disneyland® Park, a five-year program has been
launched to replace the car combustion engines at Autopia® with hybrid engines; six were replaced during this
Fiscal Year. Current estimates are a 20% to 25% reduction in fossil fuel consumption compared to a gas combustion
engine.
During the Fiscal Year, the Group, with the help of a consulting firm, conducted a GHG diagnosis based on the
Bilan Carbone® methodology. The requirements of this methodology go beyond the major global agreements such as
Kyoto protocol, and are compatible with the most recent global and European standards and regulations. This
diagnosis will enable the Group to better estimate its GHG emission and set up an action plan consistent with the
Group’s GHG emissions reduction objectives.
Following a decree dated May 31, 2007, EDA received an annual carbon dioxide allowance of 14,683 tons (i.e.
73,415 tons for the five year period from 2008 to 2012) under the French National Allocation Plan for Greenhouse
Gas Emissions (“PNAQ2”). This allowance corresponds to the emissions of the Central Energy Plant that produces
hot water for the Parks and administrative buildings. During the Fiscal Year, CO2 emissions amounted to
11,316 tons.
For calendar year 2010, EDA declared 12,770 tons of CO2 emissions, compared to 11,034 tons declared in 2009.
These used quotas have been checked by the Bureau Veritas Certification France (consultant validated by the Ministère
de l’Ecologie, de l’Energie, du Développement durable et de la Mer).
1
60
For more information, please refer to the press release issued on September 30, 2010 and available on the Group’s website
MINIMIZING WASTE
The Group sends its industrial waste to incineration, with energy recovery. The Group set itself a goal of achieving a
15% reduction of incinerated waste. Key steps in this project include increasing the proportion of purchases
including post-consumer recycled material and implementing a recycling program throughout the Resort. Examples
of such initiatives were the installation of recycling bins for collection of cans and plastic bottles in the Walt Disney
Studios® Park and employees’ areas in 2010, and in the Disney Village® in 2011. During the Fiscal Year, materials
collected included 33 tons of metal cans and plastic bottles.
Food waste sorting and collection was also started in 2009 and was extended this year to several restaurants
throughout the Resort. The volumes collected are transferred off site and treated through biomethanation, a
biological process that produces methane from organic waste. The obtained methane is then used to produce
electricity. During the Fiscal Year, 536 tons of food waste were collected, further contributing to the reduction of
waste incineration and GHG.
The Group’s annual production of waste represented 17,472 metric tons for the Fiscal Year. The percentage of
recycled waste was about 40%.
In 2008, the Group created the “Green Workspace” program, which allowed significant progress in waste reduction.
The table below presents the main indicators of this program over the last three fiscal years.
B.1
Fiscal Year
Results of the “Green Workspace”
program
Office paper ordered and % of
recycled paper (per year)
Plastic bottles purchased
Number of water fountains
Recycled cardboard (tons per year)
B
2011
2010
2009
201 tons of which 75% of
recycled paper
recycled paper
recycled paper
142,000
248,000
640,000
343
342
335
1,694
1,603
1,438
During the Fiscal Year, an Environment Trophy was created for employees and awarded for the first time. The
trophy goes to teams achieving the objectives set by the Green Workspace program, in particular regarding
cardboard recycling, reduction of plastic bottles purchased and reduced utilization of office paper.
B.2
B.3
B.4
B.5
B.6
B.7
CONTROLLING AND MINIMIZING IMPACTS ON THE ENVIRONMENT
The quality of the water on the Resort is analyzed and assessed regularly. The quality of water used and water
discharges related to the Group’s activities are monitored internally. Specialized technicians process tests on
ornamental lakes, storm water and waste water samples using an on-site physico-chemical and bacteriological
laboratory. In addition, measurements and analysis of the parks’ and administrative buildings’ water tributaries are
performed by an external laboratory that is accredited by the COFRAC (“Comité Français d’Accréditation”, French
accreditation committee). The Group has also implemented preventive measures to limit any environmental
consequences of an accidental polluted water discharge outside of the Resort.
B.8
B.9
Because the Group operates 365 days per year, some shows may produce noise pollution for persons living near the
Resort. Specific measures have been implemented in order to respect neighborhood noise regulation, especially for
outside music concerts and fireworks shows, which are held 80 days per year at the Group. Furthermore, the Resort
activities do not generate any unpleasant odors.
PREVENTIVE MEASURES PROTECTING HEALTH AND ENVIRONMENT
A guide on accident prevention is provided to all new employees. This guide refers to waste recycling, energy and
water conservation and chemical products that might impact the environment. In addition, as part of a
communication plan, several articles related to the environment are communicated through the Group’s internal
magazine, “Backstage”.
61
B
An approval commission authorizes the use of chemical products for the entire Resort. As a consequence, this team
performs a risk analysis for every chemical product used at the Resort using a safety data form, which includes
health and work safety, environment, fire and medical data. If needed, substitute products are selected which are
less toxic and/or dangerous for human health and for the environment. In 2007, a committee was formed to review
all of the procedures linked to the management of chemical products. In addition, during the Fiscal Year,
90 employees were trained on chemical risks (in particular employees from the maintenance, food and beverage,
entertainment departments and the employees participating in the training program “Hôte d’Accueil Touristique”).
EDUCATION AND ACTION WITH STAKEHOLDERS
An “Earth Day” exhibit is set up every year to present specific environmental topics to employees. This year, the
Earth Day occurred during the Sustainable Development Week, an initiative launched by the French Ministry of
Ecology, Sustainable Development, Transportation and Housing. The exhibition highlighted three major themes:
“Protect, understand and engage”. External stakeholders such as local associations were also invited to interact with
the employees.
Since 2009, the Group has initiated an engagement program through which it has presented its environmental
initiatives to a group of key stakeholders, and has developed and maintained with them an exchange focused on
constant practices improvement. These organizations include the Conseil Général de Seine-et-Marne, the Conseil Régional
d’Ile-de-France, ADEME, the Direction Départementale du Territoire de Seine-et-Marne, WWF France, Future for Change and
the Climate Group.
ENVIRONMENTAL ISSUES
No provisions or guarantees for environmental risks were recorded as of September 30, 2011 as no significant
environmental risk has been identified. The Group has not been subject to legal proceedings in respect
of environmental matters. Moreover, there are no legal actions outstanding related to environmental issues.
To the Group’s knowledge, there is no environmental issue that may affect the Group’s utilization of its tangible
fixed assets, except those described above.
62
INSURANCE AND RISK FACTORS
INSURANCE
The Group has taken out several insurance policies with major insurance companies covering its main risks. The
main coverages related to those risks are:
•
property damage and business interruption caused by this damage with a coverage up to € 2.0 billion per
occurrence for assets the Group owns or operates. The deductibles are € 0.3 million per occurrence for
property damage and € 1.5 million per occurrence for business interruption; and
•
general liability coverage for the Company or its agents (in particular for bodily injury, theft or any damage
caused to a third party).
Total insurance premium expense for the Fiscal Year was € 3.1 million compared to € 3.5 million and € 3.7 million
for fiscal years 2010 and 2009, respectively.
The Group believes that its insurance coverage is adequate to protect itself in the event of incidents of the kind
described above.
B
RISK FACTORS
B.1
The information, assumptions and estimates that the Group used to determine its strategy are subject to change or
modification due to a certain number of factors that may affect the attendance such as the financial and competitive
environment and context, seasonality, economic, geopolitical, climatic and travel conditions.
The Group’s high level of borrowings requires the Group to devote a large portion of its
operating cash flow to service debt, and may limit its operating flexibility.
The Group is highly leveraged. As of September 30, 2011, the Group had consolidated borrowings
of € 1,876.7 million and equity of € 176.2 million. The Group’s high degree of leverage and its financial covenant
obligations with the Lenders (i.e., each of the banks, financial institutions and creditor companies of EDA, EDLH or
the consolidated financing companies) can have important consequences for its business, such as:
limiting the Group’s ability to borrow additional amounts for working capital, capital expenditures, debt
service requirements or other purposes; and
•
limiting the Group’s ability to withstand business and economic downturns, because of the high percentage of
its operating cash flow that is dedicated to servicing its debt;
•
limiting the Group’s ability to invest operating cash flow in its business, because it uses a substantial portion of
these funds to pay debt service and because the Group’s debt covenants restrict the amount of its investments;
•
limiting the Group’s ability to make capital investments in new attractions and repairs to existing theme parks
and hotels assets, both of which are essential to its business, in particular to continue to attract guests;
•
the Group is required to obtain separate Lenders authorization for significant capital expenditures that
exceed a defined percentage of adjusted consolidated revenues1. On March 31, 2011, the Group obtained
lenders’ agreement to increase the recurring annual investment budget from € 37 million to € 81 million for
the Fiscal Year. However, there can be no assurance that Lenders authorization will be obtained for future
significant investments and this could impact the Group’s ability to repair its on stage existing assets that are
critical in creating the unique immersive guest experience;
1
B.3
B.4
Risks Related to the Group’s Borrowings
•
B.2
B.5
B.6
B.7
B.8
B.9
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.
63
B
•
furthermore, as a result of deferring the payment of the entire interest to CDC under the Walt Disney
Studios® Parks loans with respect to the Fiscal Year, the Group’s recurring annual investment budget for fiscal
year 2012 and thereafter will be permitted up to 3% of the prior fiscal year’s adjusted consolidated revenues,
unless the Group obtains lenders agreement to increase the budget. For fiscal year 2012, if no agreement is
reached, the Group’s recurring annual investment budget will be reduced by approximately € 28 million
compared to the € 68 million of recurring investments incurred in the Fiscal Year.
If the Group cannot pay its debt service or meet its other liquidity needs from operating cash flow, the Group might
have to delay planned investments, obtain additional equity capital, restructure its debt or sell assets. Depending on
the circumstances at the time, the Group may not be able to accomplish any of these actions on favorable terms, or
at all.
The Group has certain financial covenant requirements.
The Group has covenants under its debt agreements which limit its investing and financing activities. There can be
no assurance that these covenants will be met for any particular measurement period. If compliance with financial
performance covenants cannot be achieved in any given fiscal year, the Group will seek assistance from TWDC or
other parties as permitted under the debt agreements. If these efforts would be unsuccessful, the relevant Lenders
could accelerate the maturity of the debt and take other actions that could adversely affect the Group.
This Fiscal Year, TWDC has agreed to defer a further € 8.9 million of Fiscal Year royalties into long-term
subordinated debt in order to allow the Group to be in compliance with its financial covenant requirements.
Subject to final review by an independent expert, the Group believes that it has complied with its financial covenant
requirements for the Fiscal Year (see section “Cash Flows” for additional information).
The Group has recently incurred losses, and there is uncertainty regarding its ability to
generate profits in the future.
The Group’s net loss for the Fiscal Year amounted to € 63.9 million, compared to a net loss of € 45.2 million and
€ 63.0 million in fiscal years 2010 and 2009, respectively. There can be no assurance that the Group will generate
profits in the future. Accordingly, the value of the Company’s shares could be adversely affected.
Risks Related to Financial Market Exposure
Foreign currency risk
A significant portion of the Group’s guests live in the United Kingdom, and pay for their visit in British pounds. An
appreciation of the euro against the British pound raises the price of a visit to the Resort for guests visiting from the
United Kingdom and negatively affects their rates of attendance, per-guest spending and hotel occupancy. In
addition, a weakening of the U.S. dollar makes tourist destinations in the United States relatively more attractive,
increasing competitive pressures on the Group and potentially adversely affecting attendance at the Resort.
There can be no assurance that foreign currency exchange rates will remain stable in the future and thus the
Group’s operations may be adversely affected.
In addition, a portion of the Group’s current assets and liabilities are denominated in foreign currencies. The
settlement of these assets and liabilities generally occur a few months after they are recorded on the Group’s
Consolidated Statements of Financial Position. Foreign exchange rate volatility to the euro may result in any final
cash settlements being different from the originally recorded asset or liability, which could impact the Group’s
consolidated statements of income. The Group attempts to hedge this risk by purchasing derivative instruments.
However, there can be no assurance that the Group’s hedging techniques will be fully effective in the future to
insulate the Group from this risk.
64
Interest rate risk
The Group’s variable rate debt is linked to Euribor rates. The Group also has cash and cash equivalents, on which it
receives a variable rate of interest return linked to Euribor rates.
As of September 30, 2011, the percentage of the Group’s borrowings tied to variable interest rates were 25%,
compared with 27% as of September 30, 2010.
Changes to Euribor rates can impact the amount of interest expense or interest income the Group recognizes for a
given fiscal year.
The Group attempts to reduce this risk by hedging the following 24 months of interest cash flows, if the related
variable interest rate borrowings are projected to exceed the Group’s cash and cash equivalents, which generate
variable rate interest cash flows.
As the Group will not begin to pay interest related to TWDC loans until 2017, the Group does not currently hedge
interest payments related to these loans.
As of September 30, 2011, the Group’s cash and cash equivalents are expected to exceed the € 94.6 million of
related variable interest borrowings that generate interest payments during the next 24 months, and therefore the
Group has no hedges in place.
However, there can be no assurance that future Euribor rates will remain stable and thus the Group’s results and
cash flows could be affected in the future.
B
B.1
B.2
B.3
Risks Related to Real Estate Development
B.4
Adverse market conditions may affect the Group’s real estate development segment.
Under the Main Agreement dated March 24, 1987 as amended, and as of September 30, 2011, the Group has
approximately 1,100 hectares of remaining undeveloped land, subject to land acquisition rights in or around the
Resort. The Group records revenues in the real estate development segment primarily from the sale to real estate
developers of land purchased under these rights. The performance of the Group’s real estate development could be
adversely affected by a deterioration in real estate market conditions in France including the Paris area.
B.5
B.6
B.7
B.8
Risks Related to Potential Conflicts of Interest
B.9
TWDC currently owns 39.8% of the Company’s shares and voting rights through an indirect, wholly-owned
subsidiary, EDL Holding Company LLC. In addition, TWDC owns 18% of EDA through two indirect, wholly owned
subsidiaries. Through its ownership interests, TWDC has control of the Company and EDA.
Under French law, the Company’s business (and that of EDA) is managed by a management company, the Gérant,
which is an indirect wholly-owned subsidiary of TWDC. The Gérant of the Company is appointed by its general
partner, which is an indirect wholly-owned subsidiary of TWDC. The Gérant of EDA is appointed by its general
partners (two indirect wholly-owned subsidiaries of TWDC and a wholly-owned subsidiary of the Company). The
management company receives management fees from the Group.
In addition, the Gérant provides and arranges for a variety of technical and administrative management services, for
which it receives a fee from the Company and EDA and is reimbursed for its direct and indirect costs.
The Group also uses TWDC intellectual and industrial property rights, for which the Group pays royalties to an
affiliate of TWDC.
Furthermore, the Group has several commercial agreements with TWDC that are important to the Group’s
operations and for which it pays fees to TWDC.
65
B
These various relationships and agreements of the Group with TWDC and its affiliates create potential conflicts of
interest. The Group believes that its dealings with TWDC and its affiliates are commercially beneficial to the Group
and that it has reasonable oversight as to the financial and commercial implications of these arrangements. This
oversight includes for instance validation of budgets or review of actual expenditure by the Group or by
independent third parties.
Given the specific nature of various services provided by TWDC, the Group does not systematically request bids or
independent evaluations of the terms for all its agreements with TWDC. However certain undertakings which
require Lenders’ approval under the Group’s debt agreements, such as investments in new attractions which are
designed by TWDC, who manages the construction of the project, may be subject to certain independent reviews.
To the extent that they qualify as related-party agreements, all such agreements must be authorized by the
Company’s or EDA’s Supervisory Board and must be subsequently ratified by the companies’ shareholders. A special
report thereon must also be issued by the Company or by EDA’s Supervisory Board and their statutory auditors.
Members of the Company’s Supervisory Board who are affiliated with TWDC are not entitled to vote on such
agreements.
Risks of Investing in the Theme Park Resorts Business
Attendance and spending per guest can be impacted by several factors such as seasonality or
economic and geopolitical conditions.
The Resort is subject to significant seasonal and daily fluctuations in attendance and spending per guest as well as to
the effects of general economic conditions. While the Group has implemented and continues to implement
measures designed to mitigate these risks by reducing fluctuations in attendance and spending per guest, the Group
cannot be certain that such measures will be sufficient and will prevent significant declines in profitability. In
addition, the effectiveness and timing of marketing campaigns can have a significant impact on attendance and
spending per guest levels. Given the discretionary nature of vacation travel and the fact that travel and lodging
expenses often represent a significant expenditure for consumers, such expenditures may be reduced, deferred or
cancelled by consumers during times of economic downturn or uncertainty.
The Group’s activity is dependent on the economic environment, in particular of its seven major markets
comprising France, the United Kingdom, Belgium, Netherlands, Spain, Italy and Germany. Consistent with the
broader tourism industry in Europe, the Group has recently been impacted by the challenging economic
environment and its subsequent impact on consumer behavior and spending. Corporate spending on discretionary
budgets has also been negatively affected. These changes have impacted and could impact the Group’s guest mix
and convention business in the future.
In recent years, the economic environment in Europe and worldwide has also been significantly impacted
by a number of major events, including recent recessions in our key markets. These events may have resulted in
significant disruptions in financial markets that could have impacted commodity prices, interest rates and foreign
exchange rates, and that could have adversely affected market liquidity and increased the cost of credit. Future
events of this type could negatively impact the Group’s activities.
Although the Group’s management closely monitors its operating trends, such steps, depending on the duration
and intensity of the downturn, may be insufficient to prevent the Group’s financial performance and condition
from being adversely affected.
The theme park resort business is competitive, which could limit the Group’s ability to increase
prices or to attract guests.
The Group competes for guests throughout the year with other European and international holiday destinations,
theme parks and also with other leisure and entertainment activities in the Paris region. The Group also relies on
convention business, which is highly competitive, for a portion of its revenues and to maintain occupancy in its
Hotels during off-peak periods.
66
The Group’s Hotels are subject to competition from the third-party hotels located near the Resort, in central Paris
and in the Seine-et-Marne area. The Group believes that its Hotels are priced at a premium compared to the
market, reflecting their proximity to the Disneyland® Park and the Walt Disney Studios® Park, their unique themes
and the quality service that they offer. The Group is aware, however, that a number of less costly alternatives exist.
Competition limits the Group’s ability to raise prices, and may require the Group to make significant new
investments in order to avoid losing guests to competitors.
The Group makes significant capital expenditures which may not drive incremental attendance.
During the past fiscal years, the Group opened several new attractions such as RC Racer, Slinky Dog Zigzag Spin and
Toy Soldiers Parachute Drop, the three attractions of Toy Story Playland in the Walt Disney Studios® Park. These
attractions are designed to add to the appeal and capacity of Disneyland® Paris, further enhancing the guest
experience to ultimately drive revenue growth. There can be no assurance, however, that these investments will in
fact increase attendance to levels anticipated by the Group or that, if attendance increases, the additional revenues
will be sufficient to provide a return on such investments or repayment of the Group’s other financial obligations.
B
Environmental, Industrial and Global Health Risks that could cause Business Disruption
A significant and unexpected event concerning public infrastructure, operations, weather or global health, or a
major public transport disruption may lead to a reduction in attendance and adversely affect the Group’s revenue,
financial position and/or results of operations.
There are activities and facilities at the Resort, which may be hazardous to the environment. These include the
Resort central power plant and gas station, which may suffer damages, which could disrupt the Group’s operations.
In fiscal year 2009, the Group performed an extensive business impact analysis and implemented a Business
Continuity Plan (“BCP”) for the most critical processes. A BCP is a set of policies and procedures that the Group
could implement to address global health, industrial or environmental risks, in order to maintain its operations in
the case of a significant disruption. Since 2009, the BCP was extended to other critical processes. The BCP is
regularly enhanced and tested.
Although the Group has extensively tested its BCP and has concluded that it is effective, there can be no guarantee
that it will be effective in the event of a future significant business disruption.
B.1
B.2
B.3
B.4
B.5
B.6
B.7
B.8
Legal Risks
The Group is party to various legal proceedings in the normal course of business. Management believes that the
Group has recorded adequate reserves for these legal exposures, both individually and in aggregate, and that the
outcome of such proceedings should not have a material adverse impact on the financial position, business or
results of the Group.
B.9
The Group presents its provisions for the various legal proceedings and claims against the Group in note 23
“Provisions, Commitments and Contingencies” of the Group’s consolidated financial statements. For the past twelvemonth period, the Group is not aware of any other administrative, legal or arbitration litigations which have recently
had or could have a material impact on its financial position or its profitability. According to the information
available to the Group to date, there are no other pending or threatening administrative, legal or arbitration
litigations that would be expected to have a material impact on its financial position or its profitability.
However, it is possible that future proceedings, whether or not related to current proceedings, could be launched
against the Group, and which, if they have an unfavorable outcome, could have an adverse impact on the business,
financial situation or results of the Group.
67
B
FINANCIAL RESULTS OF THE COMPANY FOR THE PAST FIVE FISCAL YEARS
Fiscal Year
2011
2010
2009
2008
2007
Share capital (in €)
38,976,490
38,976,490
38,976,490
38,976,490
38,976,490
Number of ordinary shares
38,976,490
38,976,490
38,976,490
38,976,490(1) 3,897,649,046
– conversion of bonds
-
-
-
-
-
– conversion of ORA
-
-
-
-
-
– exercise of warrants
-
-
-
-
-
347,293
428,644
503,334
673,230
97,728,244
Capital at the end of the period
Maximum amount of shares which can be created by way of:
– exercise of employee stock options
Result of the period (in €)
Sales (net of VAT)
Loss before income taxes, depreciation and provisions
Income taxes
Net loss
Dividends distributed
660,000
(1,322,444)
(1,400,941)
-
740,000
(1,640,167)
(1,659,224)
-
740,000
(2,718,085)
(2,653,214)
-
900,000
(1,582,784)
(1,685,768)
-
7,702,344
(1,674,822)
198,750
(1,660,129)
-
Earnings per share (in €)
Loss per share before depreciation and provisions
but after income taxes
(0.03)
(0.04)
(0.07)
(0.04)
(0.00)
Loss per share after income taxes and
depreciation and provisions
(0.04)
(0.04)
(0.07)
(0.04)
(0.00)
Net dividend per share
-
-
-
-
-
Employees
Average number of employees
(1)
68
11
12
13
14
12
Total payroll costs (in €)
795,996
857,125
878,886
1,080,787
777,282
Total employee benefit costs (in €)
348,163
306,239
247,851
415,742
351,635
On December 3, 2007, the Gérant implemented a consolidation of shares through the attribution of one new share with a nominal value of
€ 1.00 for each 100 old shares with a nominal value of € 0.01 (meaning a consolidation ratio of 100:1). For a description of this consolidation of
shares, see section C.2.2 “Reverse Stock Split” of the Group’s 2010 Reference Document.
LIST OF THE DELEGATIONS OF AUTHORITY IN CURRENT VALIDITY GRANTED BY
THE GENERAL MEETING OF SHAREHOLDERS TO THE GERANT AS REGARDS
TO INCREASES OF CAPITAL
Summarized object
Date of the
General Meeting
which granted
delegation
Validity of the
authorization
Maximum nominal
amount authorized
Use of delegation of
authority by the
Supervisory Board
at the date hereof
Delegation of authority to the Gérant to issue
shares and securities giving the right,
immediately or in the future, to a portion of
the capital of the Company with preferential
subscription rights and to increase the
Company’s capital by incorporating reserves,
profits or premiums.
March 17, 2010
26 months since
March 17, 2010
€ 10 million
€ 100 million
(credit securities)
Not applicable
Delegation of authority to the Gérant to issue
shares and securities giving the right
immediately or in the future to a portion of the
capital of the Company without preferential
subscription rights.
March 17, 2010
26 months since
March 17, 2010
€ 10 million
€ 100 million
(credit securities)
Not applicable
Delegation of authority to the Gérant to
increase the number of shares or other
securities issued under the delegation of
authority granted upon the above mentioned
delegations.
March 17, 2010
26 months since
March 17, 2010
15% of the initial issuance
for each issuance
decided upon the
delegations mentioned
above.
Not applicable
B
B.1
B.2
Chessy, November 24, 2011
B.3
B.4
The Gérant, Euro Disney S.A.S.
represented by: Philippe Gas, Chief Executive Officer
B.5
B.6
B.7
B.8
B.9
69
B
Consolidated Financial Statements
B.3. CONSOLIDATED FINANCIAL STATEMENTS
70
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
71
CONSOLIDATED STATEMENTS OF INCOME
72
CONSOLIDATED STATEMENTS OF OTHER COMPREHENSIVE INCOME
72
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
73
CONSOLIDATED STATEMENTS OF CASH FLOWS
74
SUPPLEMENTAL CASH FLOW INFORMATION
74
ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
75
1.
DESCRIPTION OF THE GROUP
75
2.
BASIS OF PREPARATION
78
3.
SIGNIFICANT POLICIES APPLIED BY THE GROUP
79
4.
PROPERTY, PLANT AND EQUIPMENT, INVESTMENT PROPERTY AND INTANGIBLE ASSETS
88
5.
RESTRICTED CASH
89
6.
INVENTORIES
89
7.
TRADE AND OTHER RECEIVABLES
89
8.
CASH AND CASH EQUIVALENTS
90
9.
OTHER ASSETS
90
10.
SHAREHOLDERS’ EQUITY
91
11.
MINORITY INTERESTS
92
12.
BORROWINGS
93
13.
OTHER NON-CURRENT LIABILITIES, TRADE AND OTHER PAYABLES
100
14.
DEFERRED INCOME
102
15.
SEGMENT INFORMATION
103
16.
COSTS AND EXPENSES
104
17.
105
18.
INCOME TAXES
105
19.
106
20.
CHANGES IN WORKING CAPITAL
107
21.
STOCK OPTIONS
107
22.
FINANCIAL INSTRUMENTS
109
23.
PROVISIONS, COMMITMENTS AND CONTINGENCIES
112
24.
EMPLOYEES
113
25.
KEY MANAGEMENT COMPENSATION
113
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(€ in millions)
Note
2011
2010
2009
Property, plant and equipment, net
4.1
1,880.3
1,974.4
2,035.5
Investment property
4.2
14.2
14.8
39.7
Intangible assets
4.3
40.1
48.1
54.2
Restricted cash
5
79.7
74.6
70.2
Other
9
13.6
12.6
13.2
2,027.9
2,124.5
2,212.8
Non-current assets
Current assets
Inventories
6
38.0
29.2
35.6
Trade and other receivables
7
120.9
116.3
111.8
Cash and cash equivalents
8
366.1
400.3
340.3
Other
9
17.4
15.5
14.6
Total assets
542.4
561.3
502.3
2,570.3
2,685.8
2,715.1
B.1
B.2
Share capital
10
39.0
39.0
39.0
Share premium
10
1,627.3
1,627.3
1,627.3
Accumulated deficit
10
(1,574.0)
(1,518.4)
(1,478.5)
Other
10
(2.7)
(6.6)
(1.2)
Total shareholders’ equity
Minority interests
B
11
Total equity
B.3
B.4
89.6
141.3
186.6
86.6
94.0
100.4
176.2
235.3
287.0
B.6
B.7
B.5
Non-current liabilities
Borrowings
12
1,723.8
1,811.7
1,880.3
Deferred income
14
16.1
10.6
29.1
Provisions
23
21.4
17.7
17.5
Other
13
70.5
72.4
63.4
1,831.8
1,912.4
1,990.3
275.1
B.8
B.9
Current liabilities
Trade and other payables
13
311.9
317.9
Borrowings
12
152.9
123.4
89.9
Deferred income
14
95.8
93.2
68.9
Other
1.7
3.6
3.9
562.3
538.1
437.8
Total liabilities
2,394.1
2,450.5
2,428.1
Total equity and liabilities
2,570.3
2,685.8
2,715.1
The accompanying notes are an integral part of these consolidated financial statements.
71
B
CONSOLIDATED STATEMENTS OF INCOME
(€ in millions except per share data)
Note
2011
2010
2009
1,297.7
1,275.0
1,230.0
(1,052.8)
(1,010.5)
(977.5)
(130.4)
(127.1)
(125.7)
(103.0)
(103.3)
(100.4)
(1,286.2)
(1,240.9)
(1,203.6)
Revenues
Direct operating costs
Costs and expenses
16
Operating margin
11.5
34.1
26.4
Financial income
17
5.0
3.2
9.7
Financial expense
17
(80.7)
(82.3)
(98.9)
0.3
(0.2)
(0.2)
(63.9)
(45.2)
(63.0)
Gain / (loss) from equity investments
Loss before taxes
Income taxes
18
Net loss
-
-
-
(63.9)
(45.2)
(63.0)
(55.6)
(39.9)
(55.5)
(8.3)
(5.3)
(7.5)
Net loss attributable to:
Minority interests
11
Average number of outstanding shares (in thousands)
38,879
Basic and diluted loss per share (in euro)
(1.43)
38,863
(1.03)
38,850
(1.43)
CONSOLIDATED STATEMENTS OF OTHER COMPREHENSIVE INCOME
(€ in millions)
Note
2011
2010
2009
(63.9)
(45.2)
(63.0)
13.1
2.2
(5.8)
(2.1)
Interest rate swaps
22.3
-
Forward currency contracts
22.2
2.9
(0.6)
(6.3)
10.2
-
(0.1)
(0.2)
Net loss
Employee benefits:
Pensions – actuarial gains / (losses)
Financial instruments:
Net loss on sales of treasury shares
Income taxes relating to components of other comprehensive income
Other comprehensive (loss) / income
Total comprehensive loss
-
-
-
0.1
-
5.1
(6.5)
(8.5)
(58.8)
(51.7)
(71.5)
(51.4)
(45.3)
(62.5)
(7.4)
(6.4)
(9.0)
Attributable to:
Minority interests
72
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(€ in millions)
Note
As of September 30, 2008
Total comprehensive loss for the
year ended September 30, 2009
Net changes to treasury shares held
10.2
Other transactions with shareholders
10.2
(1)
10.2
Share
capital
Share
premium
Accumulated
deficit
39.0
1,627.3
(1,423.0)
-
-
(55.5)
-
-
-
-
39.0
1,627.3
(1,478.5)
-
-
(39.9)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
39.0
1,627.3
(1,518.4)
(6.6)
141.3
94.0
235.3
-
-
(55.6)
4.2
(51.4)
(7.4)
(58.8)
-
-
-
(0.3)
(0.3)
-
-
-
39.0
1,627.3
Other(1)
Total
Minority
interests
Total
equity
5.1
248.4
109.4
357.8
(7.0)
(62.5)
-
0.4
0.4
-
0.4
-
0.3
0.3
-
0.3
(1.2)
186.6
100.4
287.0
(5.4)
(45.3)
(1,574.0)
(2.7)
(9.0)
(6.4)
-
(71.5)
(51.7)
(0.3)
-
-
-
89.6
86.6
176.2
B
B.1
B.2
The changes in other elements of shareholders’ equity are detailed in note 10.3 “Other Elements in Shareholders’ Equity”
B.3
B.4
B.5
B.6
B.7
B.8
B.9
73
B
CONSOLIDATED STATEMENTS OF CASH FLOWS
(€ in millions)
Note
2011
2010
2009
(63.9)
(45.2)
(63.0)
173.0
167.4
160.8
– Net book value of investment property sold
0.7
24.9
-
– Increase in valuation and reserve allowances
6.7
1.4
1.5
2.9
5.3
6.9
– Change in receivables, deferred income and other assets
(5.0)
(4.2)
5.6
– Change in inventories
(8.8)
6.0
1.4
Net loss
Items not requiring cash outlays or with no impact on working capital:
– Depreciation and amortization
– Other
Net change in working capital account balances:
20
– Change in payables and other liabilities
63.1
81.1
10.9
168.7
236.7
124.1
Capital expenditures for tangible and intangible assets
(77.0)
(86.5)
(71.8)
(2.6)
(0.3)
(0.3)
(79.6)
(86.8)
(72.1)
Increase in equity investments
Net (purchases) / sales of treasury shares
10.2
(0.2)
-
0.2
Repayments of borrowings
(123.1)
(89.9)
(86.2)
Cash flow used in financing activities
(123.3)
(89.9)
(86.0)
Change in cash and cash equivalents
(34.2)
60.0
(34.0)
Cash and cash equivalents, beginning of period
400.3
340.3
374.3
366.1
400.3
340.3
8
SUPPLEMENTAL CASH FLOW INFORMATION
(€ in millions)
Note
2011
2010
2009
45.3
48.5
77.5
12
29.3
27.8
24.8
12.6
33.9
25.0
50.0
Supplemental cash flow information:
Interest paid
Non-cash financing and investing transactions:
Deferral into borrowings of accrued interest under TWDC and CDC subordinated loans
Deferral into borrowings of royalties and management fees
74
Accompanying Notes to Consolidated Financial Statements
ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. DESCRIPTION OF THE GROUP
Euro Disney S.C.A. (the “Company”), its owned and controlled subsidiaries (the “Legally Controlled Group”) and
consolidated financing companies (collectively, the “Group”) commenced operations with the official opening of
Disneyland® Paris (the “Resort”) on April 12, 1992. The Group operates the Resort, which includes two theme parks
(collectively, the “Theme Parks”), the Disneyland® Park and the Walt Disney Studios® Park (which opened to the
public on March 16, 2002), seven themed hotels (the “Hotels”), two convention centers, the Disney Village®
entertainment center and Golf Disneyland®, a 27-hole golf course (the “Golf Course”). In addition, the Group
manages the real estate development and expansion of the property and related infrastructure near the Resort.
The Company, a publicly held French company and traded on Euronext Paris, is 39.8% owned by
EDL Holding Company LLC and managed by Euro Disney S.A.S. (the “Gérant”), both of which are indirect whollyowned subsidiaries of The Walt Disney Company (“TWDC”). The General Partner is EDL Participations S.A.S, also
an indirect wholly-owned subsidiary of TWDC. The Company owns 82% of Euro Disney Associés S.C.A. (“EDA”),
which is the primary operating company of the Resort. Two other indirect wholly-owned subsidiaries of TWDC
equally own the remaining 18% of EDA.
The Company’s fiscal year begins on October 1 of a given year and ends on September 30 of the following year. For
the purposes of these consolidated financial statements, the fiscal year for any given calendar year (the “Fiscal Year”)
is the fiscal year that ends in that calendar year (for example, Fiscal Year 2011 is the fiscal year that ends on
September 30, 2011).
B
B.1
B.2
B.3
B.4
B.5
B.6
B.7
B.8
B.9
75
B
1.1.
STRUCTURE OF THE GROUP
Entities included in the Fiscal Year 2011 consolidated financial statements and their primary operating activities are
as follows:
Company(1)
Euro Disney S.C.A.
%
Ownership(2)
Primary Activity
Parent
Company
Holding Company Headquartered in Chessy, Marne-laVallée, France
Euro Disney Commandité S.A.S.
100
General Partner of EDA
Euro Disney Associés S.C.A.
82
Operator of the Theme Parks, Disneyland® Hotel, Davy
Crockett Ranch and the Golf Course, and manager of
the Group’s real estate development
EDL Hôtels S.C.A.
82
Operator of five of the Group’s seven themed hotels plus the
Disney Village®, collectively, the “Phase IB Facilities”
Hotel New-York Associés S.N.C.(3)
0
Financing company for Phase IB Facilities
Newport Bay Club Associés S.N.C.(3)
0
Sequoia Lodge Associés S.N.C.(3)
0
Hotel Cheyenne Associés
S.N.C.(3)
0
Hotel Santa Fe Associés S.N.C.(3)
0
Centre de Divertissements Associés S.N.C.(3)
0
Centre de Congrès Newport S.A.S.(3)
0
Financing company for Newport Bay Club Convention
Center assets
82
General Partner of EDL Hôtels S.C.A.
82
Management
Companies
0
Financing company for the Disneyland® Park infrastructures
and related components
82
Tour operator selling mainly Disneyland® Paris holiday
packages
82
Real estate developer
41
Joint venture with Groupe Pierre & Vacances Center Parcs
to develop and operate the “Villages Nature” project
41
Joint venture with Groupe Pierre & Vacances Center Parcs
to manage Les Villages Nature de Val d’Europe S.A.S.
S.E.T.E.M.O. Imagineering S.A.R.L.
82
Provides studies and management of construction projects
ED Spectacles S.A.R.L.
82
Operator of Buffalo Bill’s Wild West Show
Convergence Achats S.A.R.L.(1)
41
Joint venture with Groupe Flo to negotiate food purchasing
contracts
EDL Hôtels Participations S.A.S.
EDL Services S.A.S.
Euro Disneyland S.N.C.(3)
Euro Disney Vacances S.A.S.
Val d’Europe Promotion S.A.S.
Les Villages Nature de Val d’Europe S.A.S.(1)
Villages Nature Management S.A.R.L.(1)
(1)
(2)
(3)
76
company
of
the
Phase
IB
Financing
All entities above are consolidated using the full consolidation method except for Les Villages Nature de Val d’Europe S.A.S., Villages Nature
Management S.A.R.L. and Convergence Achats S.A.R.L. which are accounted for using the equity method (see note 3.1.1 “Consolidation
Principles”).
Percentage ownership is equal to percentage of voting rights.
Euro Disney S.C.A. has no ownership interests in these entities. However theses entities are consolidated in accordance with SIC 12. Except
for Centre de Congrès Newport S.A.S., which fiscal year ends on September 30, these entities have calendar year ends. However the consolidated
figures are for the 12 months ended September 30 (see note 3.1.1 “Consolidation Principles”).
1.2.
DISNEYLAND® PARIS FINANCING
The Legally Controlled Group owns the Walt Disney Studios® Park, the Disneyland® Hotel, the Disney’s Davy
Crockett Ranch, the Golf Course, the underlying land thereof and the land on which the five other hotels
and the Disney Village® entertainment center are located. The Legally Controlled Group leases substantially all the
remaining operating assets as follows:
Disneyland® Park – Phase IA
As part of the development and financing of the Disneyland® Park, Euro Disneyland S.N.C. (the
“Phase IA Financing Company”) leases most of the assets of the Disneyland Park and the underlying land to EDA,
under a financial lease (crédit-bail). The lease payments, which are eliminated in the Group’s consolidation, due
each year under the financial lease are calculated to include the debt service and other operating costs of the
Phase IA Financing Company. In addition, the lease contains a variable rent based upon the number of paying
guests visiting the Disneyland Park. The Group accounts for these variable rent amounts as a direct allocation
of earnings from the equity holders of the parent to the minority interests. The Legally Controlled Group has
no ownership interest in the Phase IA Financing Company, which is fully consolidated in accordance with SIC 121
“Consolidation – Special Purpose Entities” (“SIC 12”) (see note 3.1.1 “Consolidation Principles”).
The partners of the Phase IA Financing Company are various banks, financial institutions and companies holding an
aggregate 83% participation, and Euro Disneyland Participations S.A.S., a French simplified corporation and an
indirect wholly-owned subsidiary of TWDC, holding the remaining 17%.
B
B.1
The lease will terminate on December 31, 2030. However, EDA has the option to acquire the Disneyland Park at any
time for an amount approximating the balance of the Phase IA Financing Company’s then outstanding debt and
taking into account a tax indemnity to the partners of the Phase IA Financing Company. In addition, this amount
will include any applicable transfer taxes payable to the French tax authorities. EDA intends to exercise the
purchase option on December 31, 2016. If EDA does not exercise the purchase option by this date, it will have to
pay a penalty of approximately € 125.0 million to the partners of the Phase IA Financing Company.
B.2
Hotels – Phase IB
B.5
In 1991, various agreements were signed for the development and financing of five hotels and an
entertainment center: Disney’s Hotel New York®, Disney’s Newport Bay Club®, Disney’s Sequoia Lodge®,
Disney’s Hotel Cheyenne® and Disney’s Hotel Santa Fe®, and the Disney Village entertainment center (collectively,
the “Phase IB Facilities”). EDL Hôtels S.C.A. (“EDLH”) leases the Phase IB Facilities from six special purpose
companies (the “Phase IB Financing Companies”) that were established for the financing of the Phase IB Facilities.
The Legally Controlled Group has no ownership interest in the Phase IB Financing Companies, which are however
fully consolidated in accordance with SIC 12 (see note 3.1.1 “Consolidation Principles”).
B.6
The partners of the Phase IB Financing Companies are various banks and financial institutions that are also lenders
to the Phase IB Financing Companies.
B.9
B.3
B.4
B.7
B.8
The leases expire on December 31, 2016. EDLH has the option to acquire the leased assets at any time during the
term of the lease for an amount approximating the balance of the Phase IB Financing Companies’ then outstanding
debt, plus any applicable transfer taxes payable to the French tax authorities.
In 1996, various agreements were signed for the development and financing of a second convention center located
adjacent to the Disney’s Newport Bay Club® hotel (the “Newport Bay Club Convention Center”). EDLH leases the
Newport Bay Club Convention Center from Centre de Congrès Newport S.A.S, a special purpose company that was
established for the financing of the Newport Bay Club Convention Center, and also an indirect, wholly-owned
subsidiary of TWDC. The Legally Controlled Group has no ownership interest in Centre de Congrès Newport S.A.S,
which is however fully consolidated in accordance with SIC 12 (see note 3.1.1 “Consolidation Principles”).
The leases will terminate in September 2017, at which point EDLH will have the option to acquire the Newport Bay
Club Convention Center for a nominal amount.
1
The term “SIC” refers to Standing Interpretations Committee interpretations issued by the International Accounting Standards Board (“IASB”).
77
B
Hereafter, reference to the “Financing Companies” includes the Phase IA Financing Company, the Phase IB
Financing Companies and Centre de Congrès Newport S.A.S.
2. BASIS OF PREPARATION
Under European Union regulation 1606/2002 of July 19, 2002, the consolidated financial statements of the Group
(including the notes thereto) for Fiscal Year 2011 have been prepared in accordance with IFRS1, as adopted by the
European Union (“EU”). The Group applied IFRS, as adopted by the EU, for Fiscal Years 2011, 2010 and 2009.
The consolidated financial statements for Fiscal Year 2011 were prepared by the Company and reviewed by the
Gérant on November 8, 2011. They will be submitted for approval at the Company’s next annual general meeting of
its shareholders.
2.1.
NEW STANDARDS AND AMENDMENTS
2.1.1.
New amendments adopted by the EU and applied by the Group
Improvements to IFRS (third omnibus issued in May 2010) were adopted by the EU on February 22, 2011 and are
mandatory for application beginning in Fiscal Year 2011 or 2012. They consist of a collection of amendments to
various existing standards resulting in accounting changes for presentation, recognition, measurement purposes
and terminology changes. The adoption of these improvements had no impact on the Group’s financial position or
disclosures.
2.1.2.
New standards and amendments issued by the IASB and not yet applied by the Group
The following standards and amendments have not yet been adopted by the EU as of September 30, 2011, and as
such are not yet applicable to the Group. These new standards and amendments have been issued by the IASB for
Fiscal Years 2012 and thereafter. The practical implications of applying the following standards and amendments
and their effect on the Group’s Financial Statements have been analyzed and are detailed below:
•
IFRS 10 “Consolidated Financial Statements” (“IFRS 10”). This new standard provides a unique consolidation
framework, based on the principle of control. IFRS 10 defines the principle of control as comprising three
elements: the power over the investee, the exposure, or rights, to variable returns from its involvement with
the investee and the ability to use its power over the investee to affect the amount of the investor’s returns.
This standard has no impact on the Group’s financial statements or disclosures.
•
IFRS 11 “Joint Arrangements”. This new standard reduces the types of joint arrangements to two: joint
operations and joint ventures and so eliminates the option of jointly controlled assets. Proportionate
consolidation for joint entities is eliminated, and equity accounting is now mandatory for joint ventures. The
joint ventures to which the Group is a party are already accounted for using the equity accounting method, so
this new standard has no impact on the Group’s financial statements or disclosures.
•
IFRS 12 “Disclosure of Interests in Other Entities”. This new standard provides disclosure requirements
regarding the entity’s interests in subsidiaries, joint arrangements, associates and unconsolidated entities.
These disclosure requirements are designed to help readers of financial statements to evaluate the basis of
control, as well as any restriction on consolidated assets or liabilities. They also aim at helping evaluate the
exposure to risks resulting from the entity’s interests in unconsolidated entities and from minority interests in
consolidated activities. Application of this standard will require the Group to disclose additional information
on the financial position and income of its joint ventures and special purpose entities interests.
•
IFRS 13 “Fair Value Measurement”. This new standard clarifies the framework for measuring fair value and
the related disclosure. It was issued as part of a convergence project with Generally Agreed Accounting
Principles in the United States (“US GAAP”). The standard does not require fair value measurements in
addition to those already required or permitted by other IFRS standards, so this standard has no impact on
the Group’s financial statements or disclosures.
1
78
The term “IFRS” refers collectively to International Accounting Standards (“IAS”), International Financial Reporting Standards (“IFRS”), SIC
and International Financial Reporting Interpretations Committee (“IFRIC”) interpretations issued by the IASB.
•
Amendments to IAS 1 “Presentation of Items of Other Comprehensive Income”. These amendments were issued as
part of a convergence project with US GAAP. They require entities to group together items presented in the
Other Comprehensive Income statement which will be subsequently reclassified to profit or loss. In addition, the
tax-related impact of items included in Other Comprehensive Income must be disclosed separately. Application of
this standard impacts the presentation of the Group’s Consolidated Statements of Other Comprehensive Income.
•
Amendments to IAS 12 “Deferred Tax – Recovery of Underlying Assets”. These amendments address the
recognition and measurement methods of deferred tax assets and liabilities related to investment property or
property, plant and equipment recorded at fair value. The Group records its investment property and
property, plant and equipment at amortized cost, so these amendments have no impact on the Group.
•
Revised IAS 19 “Employee Benefits”. This revised standard removes the option to defer the recognition of
certain actuarial gains and losses (known as the “corridor” method) in the Statement of Income over the average
employees remaining service period. The revised standard also requires additional disclosures on the risks
related to the plan and its future cash flow impact. The Group already accounts for its defined benefit plans
according to the prescribed method, so this revised standard has no impact on the Group’s financial
statements. However the revised standard will require the Group to disclose additional information regarding
future cash flows related to its retirement obligations in Fiscal Year 2014.
•
•
Revised IAS 27 “Separate Financial Statements”. This revised standard replaces the previous version of IAS 27
“Consolidated and Separate Financial Statements”. Principles given in the previous version regarding
consolidated financial statements have been withdrawn and replaced by IFRS 10 (see above). The objective of
revised IAS 27 is to define the accounting and disclosure requirements for investments in subsidiaries, joint
ventures and associates when an entity prepares separate financial statements under IFRS. The Group only
prepares separate financial statements under French GAAP, so this revised standard is not applicable to the
Group.
Revised IAS 28 “Investments in Associates and Joint Ventures”. This revised standard replaces the former
version of IAS 28 “Investments in associates” to explicitly include joint ventures. There is no significant change
in the description of the equity method in this revised standard. The Group already uses the equity method
for joint ventures, so this standard has no impact on the Group’s financial statements or disclosures.
•
Amendments to IFRS 1 “Severe Hyperinflation and Removal of Fixed Dates for First-Time Adopters”. These
amendments present specific measures designed to help first-time adopters of IFRS. The Group adopted IFRS
for the first time during Fiscal Year 2006, so these amendments are not applicable to the Group.
•
Amendments to IFRS 7 “Disclosure – Transfers of Financial Assets”. These amendments introduce
requirements to improve the disclosure of financial instruments. More specifically, they concern the transfers
of financial assets (e.g. securitizations or securities) to another entity at the end of reporting periods and aim
to provide a better understanding of the possible effects of any risks remaining with the transferring entity.
The Group has not transferred financial assets to other entities, so these new disclosure requirements
currently have no impact on the Group’s disclosure.
B
B.1
B.2
B.3
B.4
B.5
B.6
B.7
B.8
B.9
3. SIGNIFICANT POLICIES APPLIED BY THE GROUP
3.1.
3.1.1.
SIGNIFICANT ACCOUNTING POLICIES
Consolidation Principles
The consolidated financial statements include the activity of the Company, its subsidiaries and the Financing
Companies, which are directly or indirectly controlled by the Company. An entity is considered to be controlled by
the Group when the Group has responsibility for all the financial and operating decisions and benefits financially
from the activities of the entity. In accordance with SIC 12, the Financing Companies, from which the Group leases
a substantial portion of its operating assets, have been included in the Group’s consolidated accounts. The
substance of the relationship between the Group and these Financing Companies is such that they are effectively
controlled by the Group, even though the Company has no ownership interests in them.
79
B
The subsidiaries and the Financing Companies are consolidated using the full consolidation method from the date
control is transferred to the Group and would be deconsolidated from the date the related entities are no longer
controlled by the Group. The accounting policies of the consolidated entities are all consistent to those of the
Group.
The Group has interests in joint ventures, whereby the joint venture parties have a contractual arrangement that
establishes joint control over the economic activities of the entities. Joint ventures are accounted for using the equity
method, in accordance with the option in IAS 31 “Interests in Joint Ventures”.
3.1.2.
Use of Estimates
The preparation of financial statements requires management to make estimates and judgments related to the
reported amounts of assets and liabilities, revenues and expenses, and the disclosure of contingent assets and
liabilities. Significant items related to such estimates and judgments include provisions for risks, collectibility of
trade receivables, inventory obsolescence, retirement obligations and impairment of long-lived assets
(see the following sections for more information on how each of these estimates is made). Actual results could vary
from these estimates.
3.1.3.
Consolidated Statements of Financial Position Presentation
The consolidated statements of financial position present the Group’s assets and liabilities classified as either
current or non-current. An asset that will be recovered or a liability that will be paid during the twelve months
following the end of the reporting period is classified as current.
3.1.4.
Reclassification
Certain amounts in prior periods’ financial statements may have been reclassified for comparability with the most
recent period presented.
3.1.5.
Property, Plant and Equipment and Intangible Assets
Property, plant and equipment and intangible assets are initially measured and recognized at acquisition cost,
including any directly attributable cost of preparing the asset for its intended use or any financial cost related to its
financing as described hereafter. An item is recorded as Property, plant and equipment or Intangible Assets only
if the measurement of costs is reliable and if it is probable that its future economic benefits will flow to the Group.
Property, plant and equipment and intangible assets are amortized over their estimated useful lives. These estimated
useful lives are reviewed, and adjusted if necessary, at year end. Land is not amortized.
3.1.5.1.
Property, Plant and Equipment
Property, plant and equipment are stated at historical cost less accumulated depreciation and any accumulated
impairment losses, and are depreciated over their estimated useful lives on a straight-line basis.
Estimated useful lives
Infrastructure
Buildings and attractions
Leasehold improvements, furniture, fixtures and equipment
40 years
10 to 40 years
2 to 25 years
Borrowing costs attributable to the financing of property, plant and equipment and incurred for the construction of
fixed assets or the acquisition and development of land are capitalized during the period of construction
or development using the weighted average interest rate on the Group’s borrowings.
80
3.1.5.2.
Asset by Component Approach
Assets are recorded using a component approach, which consists of identifying assets separately in the accounting
records in sufficient detail to allow assets that are components of larger assets to be depreciated separately over their
respective useful lives.
Subsequent expenditures to replace a defined fixed asset component are capitalized and the replaced component
written-off. Expenditures for renovations to property, plant and equipment are expensed as incurred.
New components of larger assets may be identified subsequent to initial measurement. In such cases, the newly
identified components are recorded separately and amortized over their estimated remaining useful lives.
3.1.5.3.
Investment Grants
Investment grants received by the Group and related to assets under construction are recorded as deferred income for
the duration of the construction phase. Once the construction of the assets is completed, the investment grant
amounts are recognized as a reduction of the cost of the completed assets to which they relate.
B
3.1.5.4.
B.1
Leasing Contracts
A leasing contract that transfers to the lessee substantially all the risks and rewards incidental to ownership
of the asset is accounted for as an asset financing. A leasing contract is determined to be either a financing
or an operating lease by analyzing the following factors:
B.2
B.3
•
the ratio between the lease term and the economic life of the asset;
•
the present value of the minimum lease payments compared to the fair value of the leased asset;
•
the transfer of ownership at the end of the lease term;
B.5
•
a favorable option to purchase; and
B.6
•
the specialized nature of the leased asset.
B.7
Under IAS 17 “Leases”, assets leased under contracts qualifying as finance leases are capitalized and depreciated
over their estimated useful lives and the related lease obligations are recorded as borrowings after the imputation of
an appropriate effective interest rate.
B.4
B.8
B.9
Operating lease payments (resulting from leases that do not qualify as finance leases) are recognized as expense on
a straight-line basis over the lease term unless another systematic basis is more representative of the time pattern of
the user’s benefit.
3.1.5.5.
Intangible Assets
Intangible assets primarily include software costs, show production costs and film production costs for Theme Parks
attractions and are recorded at cost. Amortization of these costs is computed on the straight-line method over
periods ranging from two to twenty years.
81
B
3.1.5.6.
Impairment of Long-Lived Assets
The Group performs an impairment test of its long-lived assets whenever indicators of impairment exist. In such
cases, the Group will compare the carrying amount of its long-lived assets to their recoverable amount, defined as
the higher of their fair value or their value in use. The fair value is the amount obtainable from the sale of the longlived assets, less estimated costs of the sale, in an arm’s length transaction between knowledgeable, willing parties,
on the basis of recent transactions for similar or sufficiently comparable assets. In the absence of such transactions,
the Group would determine the fair value and the value in use by calculating the discounted present value of future
cash flows expected to be generated from the use of the long-lived assets over their remaining useful life. If the
recoverable amount of an asset is less than its carrying amount, the Group would record an impairment charge for
the difference.
For purposes of such tests, assets that do not generate separate cash flows would be grouped into cash-generating
units, which correspond to the Group’s two reporting operating segments. The Resort cash-generating unit includes
the Theme Parks, the Hotels and the Disney Village® and their related facilities. The Real estate development cashgenerating unit primarily includes land rights and investment property (land) leased to third parties under longterm leases.
3.1.6.
3.1.6.1.
Financial Assets and Liabilities
Financial Assets and Liabilities Recorded at Fair Value
Financial assets and liabilities recorded at fair value relate to derivative instruments.
Derivative instruments are recorded at their fair value, which is the amount for which they could be exchanged or
settled between knowledgeable, willing parties in an arm’s length transaction.
For more information on derivative instruments and their accounting, see note 3.1.6.4. “Derivative Instruments”.
3.1.6.2.
Financial Assets and Liabilities Recorded at Cost
Financial Assets Recorded at Cost
Financial assets recorded at cost are mainly composed of accounts receivables.
Accounts receivables are assets with fixed or determinable payments that are not quoted in an active market. When
their maturity date is less than twelve months, accounts receivables are recorded at their nominal value. This
generally represents the fair value of the amount to be received because of the short time between their recognition
and their realization. They are subsequently recorded at amortized cost, less any provision for impairment. When
their maturity date is more than twelve months, they are initially recorded at the fair value of the amount to be
received.
Accounts receivables are either classified as Trade and other receivables or as Other non-current assets in the statements of
financial position depending on whether their maturity is less or more than twelve months, respectively.
Financial Liabilities Recorded at Cost
Financial liabilities recorded at cost are mainly composed of borrowings and accounts payable.
The Group’s debt portfolio includes fixed and variable rate borrowings. Portions of the Group’s debt portfolio were
restructured or significantly modified in negotiations that were finalized in Fiscal Years 1994, 2000 and 2005.
Modifications that have been made over the years to the Group’s loan agreements have included interest waivers,
rate changes and deferrals of principal repayments.
82
Borrowings are significantly modified when changes in the existing borrowing terms result in a discounted present
value of the cash flows under the new terms, including any fees paid, net of any fees received and discounted using
the original effective interest rate, that is at least ten percent different from the discounted present value
of the remaining cash flows under the original borrowing terms. Significant modifications of borrowing terms are
accounted for as an extinguishment of the existing debt, which is replaced by the fair value of the debt after its
modification.
Borrowings entered into prior to October 1, 2004 are recorded at cost as accepted by IFRS transition provisions,
except if they are significantly modified after this date. As part of the 2005 Restructuring1, all significantly modified
borrowings were treated as an extinguishment of the initial debt and replaced with debt recorded at the fair value,
measured using the discounted cash flow analysis (“DCF”) method2 and the effective interest rate method
combined. The discount rate was calculated to reflect an estimated market interest rate at the time of the
modification which was higher than the nominal rate. The effective interest rate method consists of allocating
interest expense using a consistent interest rate to discount the cash flows over the expected life of the related
financial liability. The Group does not revalue its debt to fair value.
The Group utilizes the effective interest method to calculate interest charges for financial liabilities. Effective
interest liabilities are recorded under Other non current liabilities.
Accounts payable are mainly comprised of liabilities with fixed or determinable payments that are not quoted in an
active market. When their maturity is less than twelve months, they are recorded at their nominal value. This
generally represents the fair value of the amount to be paid because of the short time between their recognition and
their payment. When their maturity is more than twelve months, they are initially recorded at the fair value of the
amount to be paid.
3.1.6.3.
B
B.1
B.2
B.3
Cash and Cash Equivalents
Cash and cash equivalents consist of the Group’s marketable securities, cash in bank accounts and petty cash.
Marketable securities are composed of liquid instruments, with a short-term maturity, usually less than three
months, and that are readily convertible into a fixed amount of cash. Bank accounts are denominated in euro and
in foreign currencies. Marketable securities and cash in bank accounts are recorded at fair value.
The gains or losses resulting from the translation of bank accounts denominated in foreign currencies are
recognized in the consolidated statements of income in Revenues / Costs and Expenses depending on whether the
bank account is used to receive client payments or to pay suppliers (see note 3.1.7. “Foreign Currency Translation”).
B.4
B.5
B.6
B.7
B.8
3.1.6.4.
Derivative Instruments
B.9
As part of its overall foreign exchange and interest rate risk management policy, the Group may enter into various
hedging transactions involving derivative instruments. Derivative instruments used in connection with the Group’s
hedging policy include exclusively forward exchange contracts for currency risk management. The Group enters
into these derivative instruments in order to hedge certain forecasted transactions. The Group has not entered into
fair value hedge derivative instruments or those that hedge net investments in foreign operations.
The Group formally documents all relationships between hedging instruments and hedged items, as well as its risk
management objectives and strategies for undertaking hedge transactions and the method used to assess hedge
effectiveness. Hedging transactions are expected to be highly effective in achieving offsetting changes in cash flows
and are regularly assessed to determine that they actually have been highly effective throughout the financial
reporting periods for which they are implemented.
1
2
Refers to the legal and financial restructuring of the Group in Fiscal Year 2005, described in the section A.3 “History and development of the
Group” of the Group’s 2010 Reference Document.
The objective of this method is to establish what the transaction price would have been on the measurement date in an arm’s length exchange
motivated by normal business considerations.
83
B
When derivative instruments qualify as hedges for accounting purposes, as defined in IAS 39 “Financial Instruments:
Recognition and Measurement” (“IAS 39”), they are accounted for as follows:
•
The effective portion of the gain or loss on a non-mature hedge is recognized directly in Shareholders’ equity,
while any ineffective portion is recognized immediately in the Consolidated statements of income.
•
Amounts recognized directly in Shareholders’ equity are reclassified to the Consolidated statements of income when
the hedged transaction affects the Consolidated statements of income, such as when the hedged revenue is
recognized or when a hedged purchase occurs.
•
If a forecast transaction or firm commitment is no longer expected to occur, amounts previously recognized
in Shareholders’ equity are reclassified to the Consolidated statements of income as Financial income or Financial
expense. If a hedging instrument expires or is sold, terminated or exercised without replacement or rollover, or
if its designation as a hedge is revoked, amounts previously recognized in Shareholders’ equity remain
in Shareholders’ equity until the forecast transaction or firm commitment occurs, at which point they are
reclassified to the Consolidated statements of income.
When derivative instruments do not qualify as hedges for accounting purposes, as defined in IAS 39, they are
recorded at their fair value and resulting gains or losses are recognized directly in the Consolidated statements of
income.
3.1.7.
Foreign Currency Translation
Foreign currency transactions are translated into the Group’s functional currency (i.e., euro) using the exchange
rates prevailing at the date of the transaction. Foreign exchange gains and losses resulting from the settlement of
such transactions, and from the translation at year-end exchange rates of monetary assets and liabilities
denominated in foreign currencies, are recognized in Revenues and Costs and expenses.
The Group hedges certain of its foreign currency transactions (see note 3.1.6.4 “Derivative Instruments”). Foreign
currency gains or losses on hedges and on the underlying hedged transactions affect the Consolidated statements of
income simultaneously. This results in the hedged transactions being effectively translated into the Group’s
functional currency using the hedge exchange rates.
The Group’s bank accounts denominated in foreign currencies are translated into euros using the exchange rates
prevailing at the end of the reporting period (see note 3.1.6.3. “Cash and Cash Equivalents”).
3.1.8.
Debt Costs
Debt issue costs, recorded as Other assets, are deferred and amortized over the contractual life of the related debt.
Costs incurred to renegotiate the terms of existing debt instruments are recorded as Financial expense, when
incurred, if the negotiated modifications to the debt’s terms are significant and result in an extinguishment of the
original debt. Costs incurred for non-significant modifications to existing debt are deferred and amortized to
Financial expense using the effective interest method over the remaining term of the renegotiated debt.
3.1.9.
Treasury Shares
Treasury share transactions are recorded at cost, as a component of Shareholders’ equity. Gains or losses on the
purchase or sale of treasury shares are recognized in the Consolidated statements of other comprehensive income.
3.1.10.
Inventories
Inventories are stated at the lower of acquisition cost or net realizable value.
Cost is determined on a weighted-average cost basis and includes the acquisition costs, custom duties and other costs
directly attributable to the acquisition.
Inventories may not be fully recoverable if they are damaged, if they have become wholly or partially obsolete, or if
their selling prices have declined. In such cases, inventories are written down to net realizable value.
84
3.1.11.
3.1.11.1.
Provisions, Contingent Liabilities and Assets
Provisions
The Group records a provision when the following conditions are met:
•
It has a present obligation (legal or implicit) as a result of a past event;
•
It is probable that an outflow of resources embodying economic benefits will be required to settle
the obligation; and
•
A reliable estimate can be made of the amount of the obligation.
Provisions represent the current amount that the Group expects it would pay to settle the obligation. They are
evaluated on the basis of actual events, circumstances and management’s best estimate of the related risks and
uncertainties.
Provisions are measured at the present value of the expenditures expected to be required to settle an obligation
using a discount rate that reflects current market assessments of the time value of money and the risks specific to the
Company. The increase in a provision due to the passage of time is recognized as Interest expense.
3.1.11.2.
B.1
B.2
Contingent Liabilities
Contingent liabilities are either potential obligations or those that do not meet the above provisions recognition
criteria.
Although contingent liabilities are not recognized as liabilities on the Group’s statements of financial position, they
are disclosed in the notes to consolidated financial statements, if significant.
3.1.11.3.
B
B.3
B.4
B.5
B.6
Contingent Assets
Contingent assets are not recognized until the contingency is favorably resolved. If significant, they are disclosed in
the notes to consolidated financial statements when an economic benefit is deemed probable.
B.7
B.8
3.1.12.
Employee Benefit Obligations
B.9
The Group provides for post retirement benefits through the use of defined contribution plans and defined benefit
plans.
All Group employees participate in state funded pension plans in accordance with French laws and regulations and
in a supplemental defined contribution plan. Salaried employees also participate in a funded retirement plan.
Contributions to these plans are paid by the Group and the employees. Employer’s part of the contribution is
expensed as incurred. The Group has no future commitment with respect to these benefits.
In addition to the above plans, the Group also provides for defined benefit plans through the Group’s collective
bargaining agreements which call for retirement benefits ranging from one-half month to three months of gross
wages to be provided to employees who retire from the Group at the age of 60 or older after completing at least one
year of service. The actuarially-calculated present value of the obligation related to these benefits is recorded in
Other non-current liabilities. Actuarial gains and losses arising from changes in actuarial assumptions and experience
adjustments are recognized immediately in the Consolidated statements of other comprehensive income, in accordance with
the option allowed under IAS 19 “Employee Benefits”. These calculations are performed on a yearly basis by an
actuary using the projected unit credit method, which includes actuarially-based assumptions related to employee
turnover, labor inflation and mortality. The service cost is recorded under Costs and expenses, whereas the interest
cost related to the present value computation is recognized as Financial expense.
85
B
3.1.13.
Share-Based Payment
In the past, the Company has granted stock options to certain Group employees and/or executive officers.
IFRS 2 “Share-based Payment” (“IFRS 2”) requires an expense, and a corresponding increase in Shareholders’ equity,
to be recognized as the employees render their services. The compensation expense related to stock options is
deferred and charged as an expense over the vesting period of the options.
This stock option expense is based on the fair value of the stock options at the grant date which the Group measures
using the Black-Scholes-Merton model.
3.1.14.
Revenue Recognition
The Group has revenue recognition policies for its operating segments, which are determined based on the
circumstances of each transaction or revenue flow.
Sales revenues are recognized when all the following criteria are satisfied:
•
the risks and rewards of ownership have been transferred to the customer;
•
the Group retains no effective control over the goods sold;
•
the amount of revenue and costs associated with the sale can be measured reliably;
•
it is probable that the economic benefits associated with the transaction will flow to the Group.
Discounts and rebates granted to customers, which can be estimated with reasonable accuracy, are recorded as
a reduction of the sales revenue at the time of recognizing the revenue.
The Group records revenues for the Resort operating segment as the related service is provided to guests.
The Resort operating segment includes revenues associated with long-term sponsorship contracts, which are
recognized pro rata over each contract’s term.
In the Real Estate Development operating segment, revenue is recognized on land sales at signature of the deed of
sale, while revenues related to service contracts and ground leases are recognized over the service or lease terms,
respectively.
3.1.15.
Advertising Costs
Advertising costs are expensed as incurred, except for broadcasting costs related to media campaigns which are
expensed over the corresponding media campaign.
3.1.16.
Income Taxes
Income taxes, when due by the Group, would be comprised of current taxes and deferred taxes.
Income taxes due are calculated using the applicable tax rates at the end of the Fiscal Year.
Deferred taxes are calculated using a statement of financial position approach for all asset and liability temporary
differences between accounting and tax values. This approach compares the accounting value of an asset or a
liability to its corresponding value for tax purposes. If this difference affects either accounting profit or taxable
profit in different time periods, a deferred tax liability or asset would be recognized with the corresponding
deferred tax expense or income recognized in the Consolidated statements of comprehensive income.
A deferred tax asset is recognized for carried forward tax losses only when it is more likely than unlikely that the
Group will generate future taxable income against which it could utilize the past losses. Recognition of a deferred
tax asset for carried forward tax losses, net of any deferred tax liability, will only be recorded after the Group has
reported several consecutive years of taxable income. Any deferred tax asset, net of any deferred tax liabilities,
would be calculated using the prevailing tax rates applicable to the Group.
86
3.1.17.
Loss per Share
Loss per share is calculated by dividing the net loss attributable to equity holders of the parent by the weighted
average number of shares outstanding during the period, excluding treasury shares.
In accordance with IAS 33 “Earnings per Share” (“IAS 33”), the weighted average number of shares outstanding
during the period and for all periods presented is adjusted for events that have changed the number of shares
outstanding without a corresponding change in resources, such as a reverse stock split. The number of shares
outstanding before the event is adjusted for the proportionate change in the number of shares outstanding as if the
event had occurred at the beginning of the earliest period presented.
Diluted loss per share is calculated by dividing the net loss attributable to equity holders of the parent company by
the weighted average number of shares outstanding during the period. As the Group generated net losses, the
weighted average number of shares outstanding during the period was not adjusted for all potential dilutive shares
in accordance with IAS 33. As a result, basic and diluted loss per share calculations were the same.
3.2.
B
FINANCIAL INSTRUMENTS AND RISK MANAGEMENT
3.2.1.
Financial Instruments
Financial instruments are recorded at their fair value unless otherwise indicated (see note 22.1 “Fair Value of
Financial Instruments”).
B.1
B.2
3.2.2.
Risk Management
B.3
The Group is exposed to certain risks relating to its financial assets and liabilities. These risks and the Group’s risk
management policies to reduce exposure to these risks are listed below:
B.4
3.2.2.1.
B.5
Financial market risks
The Group is exposed to foreign currency risk and interest rate risk. Foreign currency risk corresponds to the risk of
variation in exchange rates between the euro and other currencies affecting the Group’s results or the value of the
financial instruments it holds. Interest rate risk corresponds to the risk of variation in interest rates affecting the
Group’s results or the value of the financial instruments it holds.
In the normal course of business, the Group uses derivative instruments to manage its exposure to financial market
risks. The Group does not enter into foreign currency and interest rate transactions for speculative purposes.
For information on foreign currency risk management and interest rate risk management, see notes 22.2 “Currency
Risk Management” and 22.3 “Interest Rate Risk Management”.
3.2.2.2.
B.6
B.7
B.8
B.9
Credit risk
Credit risk is the risk of financial loss for the Group in the event that a client or counterparty to a financial
instrument fails to meet its contractual obligations. This risk mainly arises from trade receivables.
For information on the Group’s credit risk, see note 7.1 “Trade Receivables”.
3.2.2.3.
Liquidity risk
Liquidity risk is the risk that the Group will experience difficulties honoring its debts and other obligations when
they are due.
For information on the Group’s liquidity risk, see notes 8 “Cash and Cash Equivalents”, 12.7 “Debt Maturity
Schedule” and 12.9 “Debt Covenants”.
87
B
4. PROPERTY, PLANT AND EQUIPMENT, INVESTMENT PROPERTY AND INTANGIBLE
ASSETS
4.1.
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment asset activity for Fiscal Years 2010 and 2011 is presented below:
Fiscal Year 2010
(€ in millions)
September 30,
2009
Additions
Deductions
607.1
-
-
3,204.8
-
670.3
0.2
41.0
100.0
4,523.2
100.2
Fiscal Year 2011
Transfers
September 30,
2010
Additions
Deductions
Transfers
September 30,
2011
4.2
611.3
-
(0.2)
0.7
611.8
(2.3)
68.0
3,270.5
-
(6.6)
24.4
3,288.3
(2.4)
24.8
692.9
0.4
(6.8)
25.7
712.2
(101.8)
39.2
70.7
(4.8)
4,613.9
71.1
(13.6)
(17.5)
0.1
-
(315.2)
(1,726.5) (124.0)
6.6
-
(1,843.9)
Book values
of which:
Land and infrastructure
Furniture, fixtures and equipment
Construction in progress
(4.7)
-
(52.8)
57.1
(2.0)
4,669.4
Accumulated depreciation
of which:
Land and infrastructure
Furniture, fixtures and equipment
Total net book value
(1)
(280.4)
(17.4)
-
-
(1,609.7) (119.1)
2.3
-
(20.0)
2.4
-
(2,487.7) (156.5)
(597.6)
4.7
-
2,035.5
(56.3)
-
(4.8)(1)
(297.8)
(21.5)
6.7
-
(630.0)
(2,639.5) (163.0)
(615.2)
13.4
-
(2,789.1)
(0.2)
(2.0)(1)
1,880.3
1,974.4
(91.9)
Transfers to intangible assets.
As of September 30, 2011, property, plant and equipment with a net book value of € 1,132 million are either
mortgaged or pledged as security under loan agreements, including substantially all the operating assets of
the Group except the assets of the Walt Disney Studios® Park, compared to € 1,206 million and € 1,290 million as of
September 30, 2010 and 2009, respectively.
Construction in progress includes tangible and intangible assets. The intangible portion is allocated to Intangible assets
when the related project is complete. This portion amounted to € 2.0 million for Fiscal Year 2011 compared
to € 4.8 million for Fiscal Year 2010. As of September 30, 2011, 2010 and 2009, Construction in progress included
€ 13.2 million, € 12.7 million and € 12.2 million, respectively, related to unallocated fees paid to EPA-France
required to maintain the Group’s land acquisition rights for the remaining undeveloped land around the Resort.
These fees will be allocated to the cost of land purchased by the Group in the future.
In Fiscal Years 2011, 2010 and 2009, interest expense capitalized as part of the construction cost of long-lived assets
amounted to € 0.3 million, € 1.2 million and € 0.7 million, respectively.
4.2.
INVESTMENT PROPERTY
Investment properties are land or long-lived assets held to earn lease revenues and amounted to € 14.2 million
as of September 30, 2011 compared to € 14.8 million and € 39.7 million as of September 30, 2010 and 2009,
respectively. They are carried at cost, less any accumulated depreciation and any accumulated impairment losses, if
applicable. In Fiscal Year 2010, the € 24.9 million decrease mainly related to the sale of a property on which the Val
d’Europe mall is located. This property had been subject to a long-term ground lease. In Fiscal Years 2011, 2010 and
2009, lease revenues amounted to € 0.7 million, € 18.4 million and € 0.9 million, respectively. In Fiscal Year 2010,
the lease revenues included € 17.6 million of deferred lease revenues related to the property sold mentioned above.
88
4.3.
INTANGIBLE ASSETS
Intangible assets amounted to € 40.1 million, € 48.1 million and € 54.2 million as of September 30, 2011, 2010 and
2009, respectively. In Fiscal Year 2011, the € 8.0 million decrease mainly reflected Fiscal Year 2011 intangible assets
amortization.
4.4.
IMPAIRMENT LOSSES
As of September 30, 2011, the Group determined that there were no indicator of impairment losses and therefore
has not recorded impairment losses related to Property, plant and equipment, Intangible assets or Investment property.
5. RESTRICTED CASH
Restricted cash corresponds to cash and cash equivalents belonging to the Financing Companies, which are not
available to the Legally Controlled Group for use.
B
6. INVENTORIES
B.1
Inventories consist primarily of merchandise, spare parts used in the maintenance of long-lived assets, and food and
beverages items. These amounts are stated net of a provision for obsolete and slow moving items. This allowance
amounted to € 3.5 million, € 3.5 million and € 3.1 million as of September 30, 2011, 2010 and 2009, respectively.
B.2
B.4
7. TRADE AND OTHER RECEIVABLES
B.5
Trade and other receivables as of September 30, 2011, 2010 and 2009 are presented below:
B.6
September 30,
(€ in millions)
Note
2011
2010
2009
Trade receivables
7.1
72.6
69.9
75.0
Value Added Tax (“VAT”)
7.2
34.5
33.8
30.1
Other
7.3
13.8
12.6
6.7
120.9
116.3
111.8
7.1.
B.3
B.7
B.8
B.9
TRADE RECEIVABLES
Trade receivables are amounts due primarily from tour operators, travel agents or individual customers (arising from
sales of entrance tickets to the Theme Parks, hotel and meeting rooms and other amenities) as well as billings for
real estate sales.
The Group requires most of its trade receivables to be settled less than 30 days after an invoice is issued, except for
real estate related transactions for which payment terms are negotiated on a case by case basis.
As of September 30, 2011, 2010 and 2009, the reserve for potentially uncollectible trade receivables was
€ 1.1 million, € 1.2 million and € 2.4 million, respectively.
The Group has implemented various procedures to limit its exposure to credit risk. As of September 30, 2011, the
amount of trade receivables overdue for more than 30 days was not significant. In addition, trade receivables do not
present a significant concentration of credit risk due to the Group’s wide customer base and the wide variety of
customers and markets.
89
B
7.2.
VALUE ADDED TAX (“VAT”)
VAT is a consumption tax which is levied at each stage of production based on the value added to the goods and
services produced at that stage.
VAT receivables correspond to value added tax receivables from the French tax administration related to purchases
of goods and services. As of September 30, 2011, VAT receivables amounted to € 34.5 million, compared to
€ 33.8 million and € 30.1 million as of September 30, 2010 and 2009, respectively.
VAT receivables are usually settled within a month.
7.3.
OTHER RECEIVABLES
Other receivables mainly include rebates and other miscellaneous non-trade receivables. All amounts are due within
one year.
8. CASH AND CASH EQUIVALENTS
Cash and cash equivalents as of September 30, 2011, 2010 and 2009 are presented below:
September 30,
(€ in millions)
2011
2010
2009
Cash
38.3
7.9
7.8
Cash equivalents
327.8
392.4
332.5
Cash and cash equivalents
366.1
400.3
340.3
9. OTHER ASSETS
Other assets as of September 30, 2011, 2010 and 2009 are presented below:
September 30,
(€ in millions)
Debt issuance costs
Note
2011
2010
2009
9.1
8.2
9.4
10.5
5.4
3.2
2.7
13.6
12.6
13.2
Other
Other non-current assets
Prepaid expenses
9.2
8.1
7.2
6.3
Debt issuance costs
9.1
3.6
3.6
3.6
Other
5.7
4.7
4.7
Other current assets
17.4
15.5
14.6
Total other assets
31.0
28.1
27.8
9.1.
DEBT ISSUANCE COSTS
The Group incurred various costs, most notably in Fiscal Years 2005 and 2004, related to non-significant
modifications of its loan agreements resulting from the 2005 Restructuring. These costs have been deferred as debt
issuance costs and are amortized over the contractual life of the associated debt (see note 3.1.8. “Debt Costs”).
9.2.
PREPAID EXPENSES
Prepaid expenses mainly correspond to advance payments made to suppliers of goods and services.
90
10. SHAREHOLDERS’ EQUITY
10.1.
SHARE CAPITAL
As of September 30, 2011 and 2010, and following the finalization of the share consolidation (the “Reverse Stock
Split”1) in December 2009, the Company’s issued and fully paid share capital was composed of 38,976,490 shares
with a nominal value of € 1.00 each.
As of September 30, 2009, the Company’s issued and fully paid share capital was composed of 38,976,490 shares with
a nominal value of € 1.00 each and 46 shares with a nominal value of € 0.01 each.
The Company does not know the aggregate number of shares held by its employees directly or through mutual
funds.
10.2.
LIQUIDITY CONTRACT
meetings, the Gérant carried out a share buyback program through Oddo Corporate Finance, an independent
investment services provider acting under a liquidity contract. For additional information, see the notice on the
share buyback program, as well as the press releases on the liquidity contract, that are available on the Company’s
website (http://corporate.disneylandparis.com).
As of September 30, 2011, the Company owns 144,930 treasury shares acquired through its liquidity contract. Their
acquisition cost amounts to € 0.7 million, and they are recorded in Shareholders’ equity as a reduction of Other equity.
As of September 30, 2011, the Company has also € 0.4 million in cash allotted to the liquidity account.
Gains or losses on the sale of treasury shares are recognized in the Consolidated Statements of Other Comprehensive
Income. For Fiscal Year 2011, the Group recorded a € 0.0 million gain, compared to a € 0.1 million loss recorded for
Fiscal Year 2010.
B
B.1
B.2
B.3
B.4
B.5
B.6
Changes to the quantity of treasury shares held are recorded at historical value in shareholders’ equity. For Fiscal
Year 2011, the Group recorded a € 0.3 million decrease in shareholders’ equity, while the value of treasury shares
held was stable for Fiscal Year 2010.
B.7
10.3.
B.9
OTHER ELEMENTS IN SHAREHOLDERS’ EQUITY
B.8
Certain elements directly impact the Consolidated Statements of Changes in Equity, as detailed in the Consolidated
Statements of Other Comprehensive Income. These elements relate to actuarial gains or losses related to the employee
benefits calculation, hedging transactions, treasury share transactions under the liquidity contract, and vested stock
option charges.
1
The Group implemented a 100 to 1 share consolidation on December 3, 2007, and the share consolidation period ended on December 4, 2009.
For a description of the Reverse Stock Split and its completion, see section C.2.2. “Reverse Stock Split” of the Group’s 2010 Reference Document
and the press release published on December 16, 2009, both available on the Company’s website (http://corporate.disneylandparis.com).
91
B
Other equity elements as of September 30, 2011, 2010 and 2009 are presented in the below table:
Fiscal Year 2010
September 30,
2009
Other
Comprehensive
(Loss)/Income
Fiscal Year 2011
Other
Comprehensive
(Loss)/Income
Other
(7.5)
1.8
-
(5.7)
(1.3)
2.4
-
1.1
-
(0.7)
-
-
2.9
-
-
(6.6)
(€ in millions)
Note
Retirement obligation
adjustments
13.1
(2.7)
(4.8)
-
Hedging Transactions
22
(0.8)
(0.5)
-
10.2
(0.6)
(0.1)
Treasury Shares Transactions
Vested stock options charge
2.9
Other elements in
Shareholders’ Equity
-
(1.2)
(5.4)
September 30,
2010
Other
4.2
(0.3)
-
(0.3)
September 30,
2011
(1.0)
2.9
(2.7)
11. MINORITY INTERESTS
Minority interests as of September 30, 2011, 2010 and 2009 are presented below:
(€ in millions)
Note
September 30,
2009
Accumulated profit / (loss)
Retirement obligation adjustments
Hedging transactions
Phase I Financing
Companies(1)
Comprehensive Loss
for Fiscal Year 2011
September 30,
2011
(8.5)
26.1
(11.9)
14.2
13.1
(0.6)
(1.0)
(1.6)
0.4
(1.2)
22
(0.2)
(0.1)
(0.3)
0.5
0.2
-
0.6
0.6
1
34.4
11.1
10.2
11.2
Minority interests
(1)
September 30,
2010
34.6
Vested stock options charge
EDA Comprehensive Income
Comprehensive Loss
for Fiscal Year 2010
(9.6)
0.6
24.8
-
10.2
55.8
3.2
100.4
(6.4)
(11.0)
13.8
-
10.2
59.0
3.6
62.6
94.0
(7.4)
86.6
Corresponds to Phase IA Financing Company and Phase IB Financing Companies.
Minority interests represent the portion of the above entities’ interests in the Group’s net assets that are not directly
or indirectly owned by the Company.
11.1.
CENTRE DE CONGRES NEWPORT S.A.S.
Minority interests represent the share capital of Centre de Congrès Newport S.A.S. for which the Legally Controlled
Group has no ownership. For a description of this special purpose financing entity, see note 1.2. “Disneyland® Paris
Financing”.
11.2.
PHASE I FINANCING COMPANIES
Minority interests represent the share capital of the Phase I Financing Companies and accumulated variable Phase
IA rent amounts and interest thereon that are legally for the benefit of the partners of the Phase IA Financing
Company. For a description of the Phase IA and Phase IB financing, see note 1.2. “Disneyland Paris Financing”.
92
12.
BORROWINGS
Borrowings as of September 30, 2011, 2010 and 2009 are presented below:
September 30, 2011
Principal
(€ in millions)
Note
Interest rate(1)
Lease(2)
Loans
Total
Significantly
modified debt
adjustment(3)
Net total
2010
2009
September 30,
CDC senior loans
12.1
5.52%
205.4
29.4
234.8
-
234.8
237.0
238.9
12.1
4.90%
144.8
675.6
820.4
-
820.4
798.1
776.8
12.2
Euribor + 3.00%
-
-
-
-
-
34.7
96.6
12.3
Euribor + 3.00%
25.7
4.4
30.1
29.7
49.5
69.0
191.0
272.8
304.9
75.4
85.9
89.8
(0.4)
12.4
3.00%
191.0
-
191.0
12.5
3.00% and Euribor + 3.00%
75.5
-
75.5
TWDC loans
12.6 Euribor and Euribor + 0.20%
17.3
355.0
372.3
-
372.3
333.7
304.3
3.83%
0.2
-
0.2
-
0.2
-
-
659.9
1,064.4
1,724.3
(0.5) 1,723.8
1,811.7
1,880.3
Financial Lease
Non-current borrowings
(0.1)
CDC senior loans
12.1
5.52%
1.8
0.3
2.1
-
2.1
1.9
1.6
12.1
4.90%
1.3
1.1
2.4
-
2.4
2.1
1.8
12.2
Euribor + 3.00%
23.6
11.9
35.5
35.4
63.1
63.1
12.3
Euribor + 3.00%
17.2
3.0
20.2
-
20.2
20.2
20.2
12.4
3.00%
81.8
-
81.8
-
81.8
32.1
-
12.5
3.00% and Euribor + 3.00%
10.9
-
10.9
-
10.9
4.0
3.2
3.83%
0.1
-
0.1
-
0.1
-
-
Current borrowings
136.7
16.3
153.0
152.9
123.4
89.9
Total borrowings
796.6
1,080.7
1,877.3
(0.6) 1,876.7
1,935.1
1,970.2
Financial Lease
(1)
(2)
(3)
(0.1)
(0.1)
The interest rate represents the weighted average interest rate for each borrowing.
Represents the borrowings of the Financing Companies and obligations related to a financial lease. These debt balances comprise the Legally
Controlled Group’s contractual lease commitments.
As part of the 2005 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 using an effective interest rate adjustment. This adjustment has been calculated reflecting an estimated
market interest rate at the time of the modification that was higher than the nominal rate.
As of September 30, 2011, some of the Group’s borrowings have variable interest rates. For a general description of
Group policies regarding interest rate risk management, see note 22.3. “Interest Rate Risk Management”.
12.1.
B
B.1
B.2
B.3
B.4
B.5
B.6
B.7
B.8
B.9
CAISSE DES DEPOTS ET CONSIGNATIONS (“CDC”) LOANS
The Group’s loans with the CDC as of September 30, 2011, 2010 and 2009 are presented below:
September 30, 2011
Note
Senior
Subordinated
Total
September 30,
2010
September 30,
2009
CDC Phase I Loans
12.1.1
236.9
271.6
508.5
512.6
516.0
Walt Disney Studios® Park Loans
12.1.2
-
551.2
551.2
526.5
503.1
236.9
822.8
1,059.7
1,039.1
1,019.1
(€ in millions)
93
B
12.1.1.
CDC Phase I Loans
Under the CDC Phase I Loans agreements with EDA and the Phase IA Financing Company, the senior debt is
primarily collateralized by Disneyland® Park, Disneyland® Hotel, Disney’s Davy Crockett Ranch and the underlying
land thereof. The subordinated debt is not collateralized.
Debt service payments are due semi-annually with principal repayments beginning in Fiscal Year 2008 and ending in
Fiscal Year 2024. During Fiscal Year 2011, € 4.0 million of principal was repaid. These loans bear interest at a fixed
rate of 5.34% except on an initial amount of € 43.4 million of principal which bears interest at a fixed rate of 6.33%.
As of September 30, 2011, 2010 and 2009, accrued interest related to the CDC Phase I Loans was € 11.4 million,
€ 11.5 million and € 11.6 million, respectively.
12.1.2.
Walt Disney Studios Park Loans
The Walt Disney Studios Park Loans were originally comprised of a series of four loans, two of € 76.2 million each
maturing in Fiscal Years 2015 and 2021, respectively, and two of € 114.3 million each maturing in Fiscal Years 2025
and 2028, respectively. These loans bear interest at a fixed rate of 5.15%. Subject to the deferral mechanism
described below, interest payments are due annually.
Pursuant to the 2005 Restructuring, deferred interest payments with respect to Fiscal Years 2001 through 2003 of
€ 59.8 million (including accrued interest through February 23, 2005) were converted into subordinated long-term
debt, bearing interest at a fixed rate of 5.15%, repayable only after the repayment of the Credit Facilities and
Partners Advances – Phases IA and IB and the Senior CDC Phase I Loans. The repayment of these loans is expected
to be completed in Fiscal Year 2024. Subject to the deferral mechanism described below, interest payments are due
annually on December 31, for the preceding 12 months.
Also, pursuant to the 2005 Restructuring, the CDC agreed to unconditionally forgive € 2.5 million of interest on the
Walt Disney Studios Park Loans per year in each of the Fiscal Years 2005 through 2012 and to conditionally defer
and convert to subordinated long-term debt interest payments up to a maximum amount of € 20.2 million per year
for each of the calendar years 2005 through 2012. This amount is increased to € 22.7 million for each of the
calendar years 2013 and 2014. Amounts of € 20.2 million, € 20.2 million, € 20.2 million and € 19.8 million of interest
originally payable on December 31, 2010, 2009, 2006 and 2005, respectively, were converted into subordinated longterm debt. These amounts bear interest at a fixed rate of 5.15% compounded annually. No interest payments were
deferred for calendar years 2007 and 2008. As of September 30, 2011, 2010 and 2009, € 14.7 million, € 10.3 million
and € 7.1 million, respectively, of compounded interest was unconditionally deferred and recorded as Non-current
borrowings.
Following the calculation of financial performance indicators for Fiscal Year 2011 and subject to final review by an
independent expert which is expected in the first quarter of Fiscal Year 2012, management has deferred
€ 15.1 million of interest payments related to the last three quarters of Fiscal Year 2011, and will defer a further
€ 5.1 million during the first quarter of Fiscal Year 2012. These amounts were originally payable on December 31,
2011. There was no accrued interest related to the Walt Disney Studios Park Loans as of September 30, 2011, 2010
and 2009.
12.2.
CREDIT FACILITY – PHASE IA
Pursuant to the credit facility agreement between EDA, the Phase IA Financing Company and a syndicate
of international banks (“Credit Facility – Phase IA”), these obligations are primarily collateralized by Disneyland
Park, Disneyland Hotel, Disney’s Davy Crockett Ranch and the underlying land thereof. The Credit Facility – Phase
IA bears interest at Euribor plus 3% (4.55% at September 30, 2011). Debt service payments are due quarterly with
principal repayments beginning in Fiscal Year 2008 and ending in Fiscal Year 2012. During Fiscal Year 2011,
€ 63.1 million of principal was repaid. As of September 30, 2011, 2010 and 2009, accrued interest related to the
Credit Facility – Phase IA was € 0.1 million, € 0.3 million and € 0.5 million, respectively.
94
12.3.
CREDIT FACILITY – PHASE IB
Pursuant to the credit facility agreement between EDLH, the Phase IB Financing Companies and a syndicate of
international banks (“Credit Facility – Phase IB”), these obligations are collateralized by the Phase IB Facilities1. The
Credit Facility – Phase IB bears interest at Euribor plus 3% (4.55% at September 30, 2011). Debt service payments
are due quarterly with principal repayments beginning in Fiscal Year 2008 and ending in Fiscal Year 2013. During
Fiscal Year 2011, € 20.2 million of principal was repaid. As of September 30, 2011, 2010 and 2009, accrued interest
related to the Credit Facility – Phase IB was € 0.4 million, € 0.4 million and € 0.5 million, respectively.
12.4.
PARTNER ADVANCES – PHASE IA
Pursuant to loan agreements, the Phase IA Financing Company borrowed € 304.9 million from the partners of the
Phase IA Financing Company at a fixed rate of 3% (“Partner Advances – Phase IA”). These advances are not
collateralized and are subordinated to the CDC Phase I Loans and the Credit Facility – Phase IA of the Phase IA
Financing Company. Amounts of the principal repayments are calculated using a formula based on the Phase IA
Financing Company’s previous years’ taxable income. Debt service payments are due quarterly. As the Phase IA
Financing Company generated cumulative taxable income for the first time during calendar year 2010, principal
repayments began in Fiscal Year 2011 and amounted to € 32.1 million. As of September 30, 2011, 2010 and 2009,
accrued interest related to the Partner Advances – Phase IA was € 1.5 million, € 1.6 million and € 1.6 million,
respectively.
12.5.
B
B.1
B.2
PARTNER ADVANCES – PHASE IB
The “Partner Advances – Phase IB” originally consisted of € 15.2 million of borrowings bearing interest at Euribor
plus 3% (4.55% at September 30, 2011) and € 78.0 million bearing interest at a fixed rate of 3%. Those amounts
were borrowed from the partners of the Phase IB Financing Companies.
The variable-rate portion is collateralized by the Phase IB Facilities. Debt service payments are due quarterly. During
Fiscal Year 2011, € 3.2 million of the variable-rate portion of the Partner Advances – Phase IB was repaid.
For the fixed-rate portion of the Partner Advances – Phase IB, amounts of the principal repayments are calculated
using a formula based on the Phase IB Financing Companies’ previous year’s taxable income. Debt service payment
is due annually. As the Phase IB Financing Companies have generated cumulative taxable income during calendar
year 2010, principal repayment began in Fiscal Year 2011. During Fiscal Year 2011, € 0.5 million of the fixed-rate
portion of the Partner Advances – Phase IB was repaid.
B.3
B.4
B.5
B.6
B.7
B.8
As of September 30, 2011, 2010 and 2009, accrued interest related to the Partner Advances – Phase IB was
€ 0.4 million, € 0.4 million and € 0.5 million, respectively.
12.6.
B.9
TWDC LOANS
TWDC loans include subordinated long-term loans resulting from the terms of the 2005 Restructuring and amounts
borrowed by Centre de Congrès Newport S.A.S. A € 100.0 million credit line has also been made available by TWDC
to the Group. This credit line expires on September 30, 2014. As of September 30, 2011, this credit line has not
been used.
1
For more information see note 1.2 “Disneyland® Paris Financing”.
95
B
12.6.1.
Long-term Subordinated Loan
Following the 2005 Restructuring, TWDC granted the Group a € 110.0 million long-term subordinated loan bearing
interest at 12-month Euribor (2.08% at September 30, 2011), compounded annually. This loan was accepted as
payment in full for the balance of a € 167.7 million credit line that expired on February 23, 2005. During
Fiscal Year 2011, the Group converted € 2.0 million of accrued interest into long-term debt. The principal
will be repayable only after the repayment of all Phase I Debt1 and interest will begin to be paid annually from
January 2017.
12.6.2.
Long-term Subordinated Loan – Deferrals of Royalties and Management Fees
Pursuant to the terms of the 2005 Restructuring, TWDC agreed to unconditionally defer and convert into long-term
subordinated debt certain management fees and, as necessary, royalties up to a maximum amount of € 25.0 million
with respect to each of Fiscal Years 2005 through 2009. As of September 30, 2011, 2010 and 2009, the resulting longterm subordinated debt, excluding deferred interest amounted to € 125.0 million (see note 16.1.1. “Royalties and
Management Fees”). This long-term subordinated debt bears interest starting in December following the deferral at
12-month Euribor (2.08% at September 30, 2011), compounded annually. Compounded interest aggregated
€ 13.5 million as of September 30, 2011, compared to € 11.5 million and € 9.3 million as of September 30, 2010 and
2009, respectively. The principal will be repayable only after the repayment of all Phase I Debt1, which is scheduled
in Fiscal Year 2024. Interest will begin to be paid annually from January 2017.
Pursuant to the terms of the 2005 Restructuring, TWDC agreed to conditionally defer and convert into long-term
subordinated debt management fees and, as necessary, royalties up to a maximum amount of € 25.0 million with
respect to each of Fiscal Years 2007 to 2014. For Fiscal Year 2011, pursuant to the Group’s financial agreements and
subject to final review by an independent expert to be received during Fiscal Year 2012, management has deferred
€ 25.0 million of the conditional royalties and management fees related to Fiscal Year 2011, and originally payable in
December 2011, into long-term subordinated debt (see note 16.1.1. “Royalties and Management Fees”). As of
September 30, 2011, the resulting long-term subordinated debt, excluding deferred interest amounted to
€ 75.0 million, compared to € 50.0 million as of September 30, 2010 and € 25.0 million as of September 30, 2009.
For Fiscal Years 2010 and 2009, management deferred respectively € 25.0 million of conditional royalties and
management fees and € 25.0 million of conditional royalties into long-term subordinated debt. This long-term
subordinated debt bears interest starting in December following the deferral at 12-month Euribor (2.08% at
September 30, 2011), compounded annually and aggregated € 0.9 million as of September 30, 2011, compared to
€ 0.2 million and € 0.0 million as of September 30, 2010 and 2009, respectively. The principal will be repayable only
after the repayment of all Phase I Debt1, which is scheduled in Fiscal Year 2024. Interest will begin to be paid
annually from January 2017.
As part of the Group’s compliance with its financial covenant requirements (see note 12.9. “Debt Covenants”),
TWDC has agreed to an additional deferral of € 8.9 million of Fiscal Year 2011 royalties into long-term subordinated
debt. This long-term subordinated debt will bear interest starting in December following the deferral at 12-month
Euribor (2.08% at September 30, 2011), compounded annually. The principal and interest will be repayable only
after the repayment of all the Walt Disney Studios Park Loans.
12.6.3.
As a result of this financing company’s consolidation, the Group’s debt includes a loan made available by TWDC to
Centre de Congrès Newport S.A.S. to finance the construction of the Newport Bay Club Convention Center, which
opened in Fiscal Year 1998. The outstanding balance under this loan as of September 30, 2011 is € 17.3 million and
bears interest at 6-month Euribor plus 0.20% (1.95% at September 30, 2011). As of September 30, 2011, 2010 and
2009, accrued interest related to this loan was € 6.2 million, € 5.9 million and € 5.8 million, respectively.
1
96
The Phase I Debt corresponds to the CDC Phase I Loans, the Credit Facilities – Phases IA and IB as well as the Partner Advances – Phases IA and
IB.
12.7.
DEBT MATURITY SCHEDULE
As of September 30, 2011 and excluding an effective rate adjustment of € 0.6 million pertaining to the debt that was
significantly modified during the 2005 Restructuring, the Group’s borrowings have the following scheduled or
expected maturities:
Principal payments due during Fiscal Year
September 30,
2011
2012
2013
2014
2015
2016
CDC senior loans
236.9
2.1
2.5
2.9
3.3
3.8
222.3
(€ in millions)
Thereafter
822.8
2.4
2.8
3.2
79.8
4.2
730.4
35.5
35.5
-
-
-
-
-
50.3
20.2
30.1
-
-
-
-
272.8
81.8
67.6
15.5
0.3
-
107.6
TWDC loans
Financial Lease
Total borrowings principal payments
86.4
10.9
30.4
15.7
13.5
8.2
7.7
372.3
-
-
-
-
-
372.3
0.3
0.1
0.1
0.1
-
-
-
1,877.3
153.0
133.5
37.4
96.9
16.2
1,440.3
The table below presents the schedule of future interest payments as of September 30, 2011 for the five next Fiscal
Years and thereafter. The rate used for the calculation of future interest payments is based on estimated Euribor
3-month rates derived from the Euribor long-term yield curve available from Reuters.
Interest payments during Fiscal Year
(€ in millions)
2012
2013
2014
2015
2016
Thereafter
Total future interest payments
40.8
57.0
54.3
53.2
48.5
535.8
12.8.
B
B.1
B.2
B.3
B.4
B.5
FAIR VALUE OF BORROWINGS
For an estimation of the fair value of the Group’s borrowings, see note 22.1. “Fair Value of Financial Instruments”.
B.6
B.7
12.9.
DEBT COVENANTS
B.8
Pursuant to its financial agreements, the Group has defined annual performance objectives, the respect of which is
captured in the “Performance Indicator” (see note 12.9.1. “Annual Performance Objectives”). In Fiscal Year 2011,
the Group did not meet these objectives and is required to defer the following Fiscal Year 2011 accruals into longterm subordinated debt:
•
€ 25.0 million of Fiscal Year 2011 royalties and management fees due to TWDC, and
•
€ 15.1 million of interest due to the CDC.
B.9
The Group is also required to defer payment of an additional € 5.1 million of interest that will be incurred, and
otherwise payable to the CDC during the first quarter of Fiscal Year 2012.
In addition, the Group must respect certain financial covenant requirements which primarily consist of the
compliance with a defined annual performance objective and a debt service coverage ratio threshold as well as
restrictions on capital expenditures and additional indebtedness (see notes 12.9.2. “Debt Service Coverage Ratio”,
12.9.3. “Restrictions on Capital Expenditures” and 12.9.4. “Restrictions on Additional Indebtedness”). Subject to
final review by an independent expert, the Group believes it has complied with these requirements for Fiscal Year
2011.
97
B
12.9.1.
Annual Performance Objectives
Subsequent to the 2005 Restructuring, certain of the Group’s financial obligations are affected by a financial
Performance Indicator for each Fiscal Year, which is approximately equal to the Group’s earnings before interest,
taxes, depreciation and amortization, adjusted for certain items described below. The Performance Indicator is used
to determine:
•
the amounts of conditional royalties and management fees due to TWDC, in respect of each Fiscal Year, that
are to be converted to long-term subordinated debt instead of being paid; and
•
the amount of conditional interest incurred on the Walt Disney Studios Park Loans, in respect of each Fiscal
Year, that is to be converted to long-term subordinated debt instead of being paid; and
•
the Group’s compliance with its financial covenant requirements.
In each case, the determination is made by comparing the actual Performance Indicator for a given Fiscal Year (the
“Actual Performance Indicator”) to a reference Performance Indicator for that year (the “Reference Performance
Indicator”). There are three separate Reference Performance Indicator amounts, one for each of the above matters.
The Reference Performance Indicators have been established solely for purposes of the contractual obligations and
do not reflect a prediction or forecast of the Group’s future operating performance.
The Actual Performance Indicator for a given Fiscal Year is equal to the Group’s consolidated net income/(loss)
attributable to equity holders of the parent, as reported in the consolidated audited financial statements for such
Fiscal Year, after restatement of the effect of the following:
•
income / (loss) allocated to minority interests as reported in the consolidated statement of income;
•
income tax expense or benefit (current and deferred);
•
interest income / (expense) and taxes from affiliates accounted for under the equity method;
•
the net impact of all waivers of debt or commercial or financial payables, which may be granted by TWDC or
its subsidiaries;
•
the net impact (positive or negative) of depreciation and movements in reserves on tangible, intangible assets
(including goodwill) and deferred charges as well as exceptional reserves and impairment charges on these
asset categories;
•
the net impact (positive or negative) of movements in: (i) current asset reserves (for example, receivables and
inventories); (ii) provisions for risks and charges and (iii) provisions recorded in exceptional earnings;
•
operating expenses related to actual expenditures for major fixed asset renovations;
•
net gains and losses on the sale or abandonment of tangible or intangible assets;
•
financial income net of financial charges, excluding charges related to bank card commissions;
•
royalties and management fees payable to TWDC expensed for such Fiscal Year;
•
the variable rent of the Disneyland® Park lease described in note 1.2. “Disneyland® Paris Financing”;
•
For Fiscal Year 2011 and the upcoming Fiscal Years, the Reference Performance Indicators are the following:
Reference Performance Indicator of Fiscal Year
(€ in millions)
98
2011
2012
2013
2014
Royalties and Management Fees
340.6
352.7
365.8
380.6
315.6
327.7
340.8
355.6
DSCR & Forecast DSCR calculation
295.4
307.5
318.1
332.9
12.9.2.
Debt Service Coverage Ratio
The Group is subject to a covenant based on the debt service coverage ratio (“DSCR”) and the forecasted debt
service coverage ratio (the “Forecast DSCR”). The DSCR is the ratio of the Group’s Performance Indicator for a
given Fiscal Year, less any royalties and management fees payable to TWDC that are not deferred, less the amount of
certain expenditures for major renovations and all other capital investments (excluding capitalized interest and any
investments which received a specific waiver), less any corporate income tax paid, plus certain financial investment
income, to the Group’s total debt service obligations for the Fiscal Year. From Fiscal Year 2006 through Fiscal Year
2014, the DSCR requirement applies only if the Group utilizes the entire conditional deferral mechanisms for
TWDC royalties and management fees and Walt Disney Studios Park Loans interest. Beginning in Fiscal Year 2015,
the DSCR will apply without regard to the Actual Performance Indicator until the repayment in full of the Walt
Disney Studios Park Loans in Fiscal Year 2028.
For any Fiscal Year in which the DSCR applies, the Group is also required to maintain a Forecast DSCR calculated
on the basis of the projected debt service obligations for the immediately following year. The forecasted results used
for the Forecast DSCR are the lower of the actual management forecast for the following Fiscal Year or the current
Fiscal Year results escalated at 3% (“Forecast Performance Indicator”).
The required levels of DSCR and Forecast DSCR are set forth in the following table:
Fiscal Year
2011
2012
2013
2014
2015
2016
2017 and
thereafter
DSCR(1)
1.00
1.00
1.10
2.60
1.40
3.10
1.30
Forecast DSCR(1)
1.00
1.05
2.50
1.05
2.90
1.30
1.30
(1)
B
B.1
B.2
B.3
Correspond to the minimum values to be achieved for each Fiscal Year.
The Group may restore these ratios to their required level, by raising additional equity or subordinated debt, or by
obtaining forgiveness or deferral of amounts that would otherwise be payable. In such case, the Group’s cash
balance must have benefited from the restoration amount no later than January 30 of the following year. If the
required DSCR or Forecast DSCR is not met in respect of a given Fiscal Year for which it applies, the Lenders may
declare acceleration under the financing arrangements and this would require the immediate repayment of the
Group’s financial debt.
B.4
For Fiscal Year 2011, the Actual Performance Indicator was € 272 million, which was less than the Group’s annual
reference level for purpose of this covenant. Consequently, the Group has calculated the DSCR for Fiscal Year 2011
and the Forecast DSCR for Fiscal Year 2012.
B.7
For Fiscal Year 2011, following the agreement by TWDC to defer the payment of € 8.9 million of additional Fiscal
Year 2011 royalties (see note 12.6.2. “Long-term Subordinated Loan – Deferrals of Royalties and Management
Fees”), the DSCR was 1.00 and the Forecast DSCR exceeded the minimum requirements, subject to approval by an
independent expert.
12.9.3.
B.5
B.6
B.8
B.9
Restrictions on Capital Expenditures
Pursuant to the Group’s financing agreements, the maximum amount of authorized recurring investments
(meaning capital and fixed asset rehabilitation expenditures, regardless of whether they are expensed or capitalized
as fixed assets under IFRS and excluding any investments which received a specific waiver) is subject to restrictions.
Beginning Fiscal Year 2010, if the Group does not utilize the entire potential cash flow benefit of the conditional
deferral of interest under the Walt Disney Studios Park Loans, these expenditures will continue to be permitted up
to 5% of the prior Fiscal Year adjusted consolidated revenues1, within the limit of 25% of the Reference
Performance Indicator for the prior Fiscal Year. Moreover, if the Group does not fully utilize the authorized
recurring investments for a given Fiscal Year, the remaining unused amount is carried over to the next Fiscal Year,
within the limit of 20% of the authorized recurring investments for the next Fiscal Year.
1
99
B
If the Group utilizes the entire potential cash flow benefit of the conditional deferral of interest under the Walt
Disney Studios Park Loans for any calendar year from 2010 to 2014, a new capital expenditure amount has to be
determined with the Lenders, failing which these expenditures will continue to be permitted up to 3% of the prior
Fiscal Year adjusted consolidated revenues. In such case, the remaining unused amount of the prior year is not
carried over.
As a result of utilizing the entire € 45.2 million of deferrals available to the Group with respect to Fiscal Year 2010,
the Group’s recurring annual investment budget1 for Fiscal Year 2011 and thereafter was 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 € 37 million to € 81 million for Fiscal Year 2011.
the Group’s recurring annual investment budget for Fiscal Year 2012 and thereafter will be permitted up to 3% of
the prior Fiscal Year’s adjusted consolidated revenues, unless the Group obtains Lenders’ agreement to increase the
budget. For Fiscal Year 2012, if no agreement is reached, the Group’s recurring annual investment budget will be
reduced by approximately € 28 million compared to the € 68 million incurred in Fiscal Year 2011.
12.9.4.
Restrictions on Additional Indebtedness
The Group’s debt agreements limit the amount of new indebtedness that the Group can incur. The Group is
currently authorized to incur a maximum of € 50.0 million of other new indebtedness, which includes financial
leasing arrangements, certain guarantees and purchases on credit. Financing lease arrangements are limited to a
principal amount of up to € 10.0 million per year.
13. OTHER NON-CURRENT LIABILITIES, TRADE AND OTHER PAYABLES
Other non-current liabilities, trade and other payables as of September 30, 2011, 2010 and 2009 are presented
below:
September 30,
(€ in millions)
Note
2011
2010
2009
Retirement obligation
13.1
29.1
28.8
21.1
Other non-current liabilities
13.5
Total other non-current liabilities
Suppliers
13.2
Other payroll and employee benefits
2
100
43.6
42.3
72.4
63.4
109.9
115.1
94.0
94.6
92.0
86.3
Value Added Tax (VAT)
13.3
16.7
14.8
17.0
Payables to related companies
13.4
58.5
64.9
39.4
Other current liabilities
13.5
Trade and other payables
1
41.4
70.5
32.2
31.1
38.4
311.9
317.9
275.1
Including both capital investments and fixed asset rehabilitations, which may be treated as an expense or capitalized as fixed assets under IFRS.
13.1.
RETIREMENT OBLIGATION
The amount of the retirement obligation has been assessed by an independent actuary.
The following table presents the detailed changes in the retirement obligation for Fiscal Years 2011, 2010 and 2009:
(€ in millions)
Note
17.5
Current service cost
0.8
Interest cost
17
Impact on Consolidated Statements of Income
1.0
1.8
Paid indemnities
(0.3)
Actuarial losses
2.1
21.1
1.1
Interest cost
17
1.1
2.2
Paid indemnities
13.1.1
5.8
28.8
1.8
Interest cost
17
1.1
2.9
Paid indemnities
(0.4)
Actuarial gains
13.1.1
The following table presents the assumptions used for the 2011, 2010 and 2009 calculations, as well as the impact of
changes in these assumptions and experience adjustments:
Actuarial Assumptions
Discount rate
Payroll tax rate
Impact of changes in assumptions
Experience adjustments
Total actuarial gains / (losses)
B.2
B.3
B.4
B.5
B.6
Actuarial gains and losses arising from changes in actuarial assumptions and experience adjustments
are immediately recognized in Other comprehensive income. Actuarial calculations are based on long-term parameters
supplied by the Group, which are reviewed each year. These parameters include the age and salary of employees, as
well as employee turnover and salary inflation rates.
Rate of increase on salary
B.1
(2.2)
29.1
Actuarial (Gains) / Losses
Retirement age
B
(0.3)
Actuarial losses
13.1.1.
Amount
2011
2010
2009
2011 actuarial
gains /
(losses)
60-65
60-65
60-65
-
3.25% - 3.75%
3.25% - 3.75%
3.25% - 3.75%
-
4.75%
4.00%
5.40%
3.7
47% - 49%
46% - 47%
46% - 47%
(0.3)
3.4
(1.2)
2.2
2010 actuarial
losses
-
B.7
B.8
B.9
(5.8)
(5.8)
(5.8)
The discount rate used for this actuarial variation is based on the yields of AA rated Euro zone corporate bonds with
a 10-year maturity. As of September 30, 2011, 2010 and 2009, the assumptions related to the discount rate and the
rate of increase in salary take into account an estimated inflation rate of 2.00%.
At September 30, 2011, a 0.25% increase in the discount rate used for the actuarial calculations would decrease the
amount of the retirement obligation by € 1.1 million, while a 0.25% decrease in the discount rate used would
increase the retirement obligation by € 1.2 million.
101
B
13.2.
As of September 30, 2011, trade payables amounted to € 109.9 million, of which € 45.2 million were billed and
€ 64.7 million were not billed. As of September 30, 2011, 85% of the billed trade payables were due within 30 days
and 15% were due within 60 days.
13.3.
VALUE ADDED TAX (VAT)
VAT corresponds to value added tax payables to the French tax administration related to the sale of goods and
services. As of September 30, 2011, VAT payables amounted to € 16.7 million, compared to € 14.8 million and
€ 17.0 million as of September 30, 2010 and 2009, respectively.
13.4.
PAYABLES TO RELATED COMPANIES
Payables to related companies principally include payables to wholly-owned subsidiaries of TWDC for royalties and
management fees and other costs associated with the operation and development of the Resort. All amounts are due
within one year. For more information on related-party transactions, see note 19 “Related-Party Transactions”.
13.5.
OTHER LIABILITIES
As of September 30, 2011, 2010 and 2009, other current and non-current liabilities amounted to € 73.6 million,
€ 74.7 million and € 80.7 million, respectively. These amounts primarily include liabilities related to the application
of the effective interest method, taxes payable, and accrued interest on debt (see note 3.1.6.2. “Financial Assets and
Liabilities Recorded at Cost”).
14. DEFERRED INCOME
Deferred income primarily consist of amounts received from clients in advance of their visits, deposits received
from business groups for on-site seminars and conventions, pre-paid rental income received on long-term ground
lease contracts with third-party developers and participant revenues that are being recognized as income straightline over the term of the related contract.
As of September 30, 2011, the Group’s deferred income have the following scheduled revenue recognition:
(€ in millions)
95.8
2013
7.2
2014
0.3
2015
0.3
2016
0.2
Thereafter
8.1
Total
102
Amount
2012
111.9
15. SEGMENT INFORMATION
For internal management reporting purposes, the Group has two separate reportable operating segments as follows:
•
Resort operating segment includes the operation of the Theme Parks, Hotels and the Disney Village®, and the
various services that are provided to guests visiting Disneyland® Paris; and
•
Real estate development operating segment includes the design, planning and monitoring of improvements
and additions to the existing Resort activity, as well as other retail, office and residential real estate projects,
whether financed internally or through third-party partners.
These operating segments reflect the Group’s organizational structure and internal financial reporting system,
which are based on the nature of the products and services delivered. Each operating segment represents a strategic
line of business with different products and serves different markets. There is no other operating segment
representing more than 10% of revenues, 10% of net profits or losses, or 10% of assets that could be identified
separately.
The Group evaluates the performance of its operating segments based primarily on operating margin. The Group
does not evaluate the performance of its operating segments based upon their respective fixed asset values.
The accounting policies for both of these operating segments are the same.
B
B.1
15.1.
STATEMENTS OF FINANCIAL POSITION INFORMATION
B.2
The following table presents segment statements of financial position information as of September 30, 2011, 2010
and 2009:
(€ in millions)
Real estate development
operating segment
Total
B.4
2011
2010
2009
2011
2010
2009
2011
2010
2009
1,907.2
2,009.8
2,077.5
27.4
27.5
51.9
1,934.6
2,037.3
2,129.4
627.0
643.6
577.6
8.7
4.9
8.1
635.7
648.5
585.7
Total assets
2,534.2
2,653.4
2,655.1
36.1
32.4
60.0
2,570.3
2,685.8
2,715.1
Total liabilities
2,381.5
2,437.7
2,400.0
12.6
12.8
28.1
2,394.1
2,450.5
2,428.1
Capital assets(1)
Other assets
(1)
B.3
Capital assets consist of the sum of Property, plant and equipment, Investment property and Intangible assets, net of accumulated depreciation.
B.5
B.6
B.7
B.8
B.9
103
B
15.2.
STATEMENT OF INCOME INFORMATION
For Fiscal Years 2011, 2010 and 2009, no inter-segment transactions occurred.
(€ in millions)
Revenues
Costs and expenses
Real estate development
operating segment
Total
Fiscal Year
Fiscal Year
Fiscal Year
2011
2010
2009
2011
2010
2009
2011
2010
2009
1,275.2
1,215.2
1,212.1
22.5
59.8
17.9
1,297.7
1,275.0
1,230.0
(8.9)
(29.7)
(5.0)
(1,052.8)
(1,010.5)
(977.5)
(130.4)
(127.1)
(125.7)
(1,043.9)
(980.8)
(972.5)
(130.4)
(127.1)
(125.7)
-
-
-
(99.7)
(99.7)
(96.6)
(3.3)
(3.6)
(3.8)
(103.0)
(103.3)
(100.4)
(1,274.0)
(1,207.6)
(1,194.8)
(12.2)
(33.3)
(8.8)
(1,286.2)
(1,240.9)
(1,203.6)
Operating margin
1.2
7.6
17.3
10.3
26.5
9.1
11.5
34.1
26.4
Financial income
5.0
3.2
9.5
-
-
0.2
5.0
3.2
9.7
Financial expense
(80.5)
(82.3)
(98.9)
-
-
(80.7)
(82.3)
(98.9)
Income / (loss) from equity
investments
(Loss) / profit before taxes
0.3
(74.0)
Income tax benefit (expense)
Net (loss) / profit
(74.0)
(71.5)
(71.5)
0.1
(72.0)
(72.0)
(0.2)
(0.2)
(0.3)
0.3
(0.2)
(0.2)
10.1
-
26.3
9.0
(63.9)
(45.2)
(63.0)
-
-
-
10.1
26.3
9.0
(63.9)
(45.2)
(63.0)
16. COSTS AND EXPENSES
16.1.
DIRECT OPERATING COSTS
Direct operating costs for Fiscal Years 2011, 2010 and 2009 are presented below:
Fiscal Year
(€ in millions)
Note
Royalties and management fees
16.1.1
Depreciation and amortization
Other direct operating costs
16.1.1.
16.1.2
2011
2010
2009
74.2
71.7
71.3
163.5
157.1
151.3
815.1
781.7
754.9
1,052.8
1,010.5
977.5
Royalties represent amounts payable to an indirect wholly-owned subsidiary of TWDC under a license agreement.
This license agreement grants the Group the right to use any present or future intellectual or industrial property
rights of TWDC for use in attractions or other facilities and for the purpose of selling merchandise. Royalties are
based upon the Group’s Resort operating revenues.
Management fees are payable to the Gérant, as specified in EDA’s by-laws. Management fees are based upon
operating revenues of the Group.
TWDC agreed to defer certain royalties and management fees due by the Group to affiliates of TWDC. For more
details, see note 12.6.2. “Long-Term Subordinated Loan – Deferrals of Royalties and Management Fees” and
note 12.9. “Debt Covenants”.
104
16.1.2.
Other Direct Operating Costs
Other direct operating costs primarily include wages and benefits for employees in operational roles, cost of sales
for merchandise and food and beverage, operating taxes, maintenance and renovation expenses, real estate land
sales and other miscellaneous charges.
16.2.
MARKETING AND SALES EXPENSES
Marketing and Sales expenses are mainly comprised of costs related to advertising, wages and benefits for employees
in marketing and sales roles and costs associated with sales and distribution.
16.3.
GENERAL AND ADMINISTRATIVE EXPENSES
General and Administrative expenses consist mainly of wages and benefits for employees in general and
administrative roles, costs associated with information systems, and depreciation and amortization.
17. NET FINANCIAL CHARGES
B
B.1
For Fiscal Years 2011, 2010 and 2009, the Group’s net financial charges are composed of the following:
B.2
Fiscal Year
(€ in millions)
Note
2011
2010
2009
B.3
5.0
3.2
9.7
B.4
5.0
3.2
9.7
74.7
76.2
89.6
-
1.1
1.1
1.0
Financial income
Investment income
Financial expense
Interest expense
Net financial expense / (income) on derivative instruments
Interest cost on employee benefit obligations
Other
22
13.1
(0.1)
1.1
5.0
5.0
7.2
80.7
82.3
98.9
(75.7)
(79.1)
(89.2)
B.5
B.6
B.7
B.8
B.9
18. INCOME TAXES
18.1.
CURRENT INCOME TAXES
Income tax expense, when payable by the Group, would be calculated using the statutory tax rate in effect in France
as of the end of the reporting period, as well as the applicable income tax calculation rules. For Fiscal Years 2011,
2010 and 2009, the statutory tax rate was 34.43%.
18.2.
DEFERRED TAXES
As of September 30, 2011, deferred taxes included unused tax losses carried forward of approximately € 1.8 billion,
which can be carried forward indefinitely.
Recognition of a deferred tax asset for carried forward tax losses, net of any deferred tax liability, will only be
recorded after the Group has reported several consecutive years of taxable income. Any deferred tax assets, net of
any deferred tax liabilities, would be calculated using the prevailing tax rates applicable to the Group.
105
B
19. RELATED-PARTY TRANSACTIONS
Related-party transactions between the Group and TWDC are presented below:
Fiscal Year
(€ in millions)
Note
2011
2010
2009
19.1
3.9
3.5
3.1
Royalties and management fees
16.1
(74.2)
(71.7)
(71.3)
Development agreement and other services
19.2
(32.2)
(32.4)
(33.1)
19.3
(6.5)
(6.2)
(9.5)
(109.0)
(106.8)
(110.8)
Revenues
Other services
Costs and expenses
Total
September 30,
(€ in millions)
Note
2011
2010
2009
2.3
1.5
0.9
Total assets
2.3
1.5
0.9
372.3
333.7
304.3
46.4
51.8
51.8
58.5
64.9
39.4
477.2
450.4
395.5
Liabilities
Borrowings – TWDC Loans
– Partner Advances – Phase
12.6
IA(1)
Trade and other payables(2)
Total liabilities
(1)
(2)
13.4
Corresponds to the 17% indirect ownership interest of TWDC in the Partner Advances – Phase IA.
As of September 30, 2011, 2010 and 2009, included royalties and management fees outstanding for an amount of € 44.6 million, € 50.8 million
and € 25.2 million, respectively.
19.1.
OTHER SERVICES
Other services revenues primarily include amounts received from The Walt Disney Company (France) S.A.S. in
relation to the lease of office space located in the Walt Disney Studios® Park.
19.2.
DEVELOPMENT AGREEMENT AND OTHER SERVICES
The Group reimburses the Gérant for all of its direct and indirect costs incurred in connection with the provision of
services under the Development Agreement1, in its capacity as the management company.
The indirect costs under the Development Agreement primarily include the Group’s share of expenses incurred
by TWDC’s European marketing offices. In addition, the indirect costs include the development of conceptual
design for existing Theme Parks facilities and attractions.
The Group also has agreements with other wholly-owned subsidiaries of TWDC for the services described below:
•
The Group has an agreement with Disney Interactive Media Group (“DIMG”) to host the Group’s Internet
sites. This agreement was signed in 2007 and was renewed after a competitive bidding process. The renewed
agreement is valid as of October 1, 2010 and until March 2014. Under this agreement, an annual fixed fee of
$ 0.4 million is due to DIMG. An expense of € 0.3 million was recorded in Fiscal Year 2011 for predefined
transaction volumes and resources necessary to supply these services.
•
The Group has various agreements with Disney Destinations LLC (“DD LLC”) for support services, notably its
provision of call center services or information technology solutions for the hotels and sales and distribution
departments. An expense of € 2.9 million was recorded in Fiscal Year 2011 under these agreements.
1
106
Refers to the agreement dated February 28, 1989 between the Company and the Gérant whereby the Gérant provides and arranges for other
subsidiaries of TWDC to provide EDA with a variety of technical and administrative services, some of which are dependent upon Disney expertise
or cannot reasonably be supplied by other parties.
19.3.
For Fiscal Years 2011, 2010 and 2009, net financial charges mainly resulted from interest expenses related to the
long-term debt that the Group owes TWDC. For a discussion on the various interest terms provided under the
financing arrangements with TWDC, see note 12.6. “TWDC Loans”.
19.4.
ADDITIONAL ARRANGEMENTS
TWDC manages the construction of the Group’s attractions. During Fiscal Years 2011, 2010 and 2009, the Group
incurred € 5.8 million, € 10.8 million and € 9.4 million of construction costs with TWDC, respectively. These costs
are capitalized as Property, plant and equipment.
A € 100.0 million credit line has also been made available by TWDC to the Group, expiring on September 30, 2014.
As of September 30, 2011, this credit line has not been used.
The Group also has a contingent liability related to TWDC. Pursuant to the 1994 Financial Restructuring1, the
Company is required to pay a development fee of € 182.9 million to TWDC upon meeting certain future conditions
(see note 23.2.1. “Contingent Liabilities”). The Group has not accrued for this amount.
B.1
20. CHANGES IN WORKING CAPITAL
B.2
For Fiscal Years 2011, 2010 and 2009, changes in working capital are presented below:
B.3
Fiscal Year
(€ in millions)
B
2011
2010
2009
Change in receivables, deferred income and other assets
(5.0)
(4.2)
5.6
B.4
Change in inventories
(8.8)
6.0
1.4
B.5
27.5
51.5
21.4
Current and non current accrued interest
24.1
22.9
2.8
Other
11.5
6.7
(13.3)
63.1
81.1
10.9
49.3
82.9
17.9
Change in:
Current and non current payables to related parties
Change in payables and other liabilities
Net increase in working capital account balances
B.6
B.7
B.8
B.9
In Fiscal Years 2011, 2010 and 2009, the changes in payables to related parties were primarily driven by the amount of
royalties paid, which depends on the prior year’s respective deferrals. In Fiscal Years 2011, 2010 and 2009, payments of
royalties amounted to € 46.6 million, € 21.2 million and € 49.6 million, respectively (for more information on deferrals,
see note 12.6.2. “Long-Term Subordinated Loan – Deferrals of Royalties and Management Fees”).
Changes in working capital were driven by the € 25.4 million increase of royalty payments in Fiscal Year 2011
compared with Fiscal Year 2010. The corresponding amount in Fiscal Year 2010 was deferred into long-term
subordinated debt.
21. STOCK OPTIONS
The Company’s shareholders have approved the implementation of two different stock option plans since 1999,
authorizing the issuance of stock options to employees or mandataires sociaux (corporate officers) together referred
to as the “Beneficiary” or “Beneficiaries” for the acquisition of the Company’s outstanding common stock.
1
Refers to the memorandum of agreement of March 1994 between the Group and its major stakeholders outlining the terms of a restructuring of
the Group’s, the Phase I Financing Companies’ and TWDC’s obligations. See section A.3.2. “Financing of the Resort’s Development” of the
Group’s 2010 Reference Document for more details.
107
B
The 1999 stock option plan terminated in Fiscal Year 2010: there were no remaining outstanding options for this plan as
of September 30, 2011. For all stock option plans, stock options were granted at a market exercise price calculated in
accordance with governing laws. Under the 2004 stock option plan, stock options were granted at a market exercise
price calculated as the average closing market price over the last 20 trading days preceding a stock option grant. The
options are valid for a maximum of eight years from their issuance date and become exercisable over a minimum of four
years in equal installments beginning one year from the date of grant under the last stock option plan.
When a Beneficiary leaves the Company, any granted and vested option must be exercised in a period of 3 to
18 months after the effective date of departure, depending on the nature of this departure. In the case of a dismissal
for serious offense (as defined in French labor law), options are cancelled at the effective date of the dismissal.
The following table provides more information about the stock options granted and outstanding
as of September 30, 2011.
2004 Plan(1)
Date of shareholder approval
Attribution date
3/8/2006
3/14/2007
TOTAL
525,698
77,915
101,506
705,119
-
-
-
-
120,995
6,611
33,128
160,734
Options exercisable from
09/06/2005
03/08/2006
03/14/2007
-
Expiration date
09/06/2013
03/08/2014
03/14/2015
-
13.00
11.00
9.00
-
-
-
-
-
67,256
1,202
12,893
81,351
Remaining outstanding stock options(2)
261,373
50,589
35,331
347,293
Remaining outstanding and exercisable stock options(2)
261,373
50,589
35,331
347,293
Total number of stock options granted(2) including:
– the statutory management
– the employees receiving the ten largest option grants(2)
Option exercise price (€)(3)
Number of options exercised as of Sept. 30, 2011(2)
Stock options cancelled in Fiscal Year 2011
(1)
(2)
(3)
108
12/17/2004
9/6/2005
The period of validity for options granted under this plan is eight years from their issuance date. The shareholders of the Company approved the
setting of a stock option plan for a maximum of 5% of the Company’s share capital.
Each stock option provides the right to purchase one share of the Company’s stock at the exercise price. These numbers take into account the
2007 adjustments following the Reverse Stock Split and the 2005 adjustment following the share capital increase.
Option exercise price adjusted following the 2005 share capital increase, and the 2007 Reverse Stock Split.
21.1.
CHANGES IN STOCK OPTIONS
A summary of the Company’s stock option activity for Fiscal Years 2011 and 2010 is presented below:
Number of options
(in thousands)
Weighted-average
exercise price
(in €)
563
17.51
Options granted
-
-
Options exercised
-
-
Stock options outstanding as of September 30, 2009
Options cancelled
(134)
34.04
429
12.31
Options granted
-
-
Options exercised
-
-
Options cancelled
(82)
12.34
347
12.30
B
The expense recorded for stock options was € 0.0 million in Fiscal Year 2011. For Fiscal Years 2010 and 2009,
€ 0.0 million and € 0.3 million were respectively recorded.
B.1
21.2.
B.2
POTENTIAL EQUITY DILUTION
As of September 30, 2011, the percentage of total potential equity dilution that could result from the exercise of
stock options is 0.89%, compared to 1.10% and 1.45% as of September 30, 2010 and 2009, respectively.
This percentage corresponds to the maximum number of new shares that could result from stock options divided by
the sum of the existing outstanding shares and potential new shares.
B.3
B.4
B.5
22. FINANCIAL INSTRUMENTS
22.1.
B.6
FAIR VALUE OF FINANCIAL INSTRUMENTS
B.7
22.1.1.
Financial Assets and Liabilities Recorded at Fair Value
The following table presents the value of the Group’s financial assets and liabilities recorded at fair value as
of September 30, 2011, 2010 and 2009:
B.8
B.9
September 30,
2011
2010
2009
Foreign currency hedge contracts
(€ in millions)
2.9
2.6
3.3
Total assets
2.9
2.6
3.3
Foreign currency hedge contracts
1.7
4.7
4.1
Total liabilities
1.7
4.7
4.1
The fair value of the Group’s derivative instruments is based on data indirectly observable from active market prices
(“Level 2” under the IFRS 7 “Improving Disclosure about Financial Instruments” classification for fair value
measurement).
For more details on the Group’s foreign currency hedging contracts and interest rate swaps, see notes 22.2.
“Currency Risk Management” and 22.3. “Interest Rate Risk Management”.
109
B
22.1.2.
Financial Assets and Liabilities Recorded at Cost
The following table presents the carrying value of the Group’s financial assets and liabilities recorded at cost and
their fair value as of September 30, 2011, 2010 and 2009:
September 30,
2011
2010
2009
Recorded
value
Fair
value
Recorded
value
Fair
value
Recorded
value
Fair
value
Accounts receivables and other assets
123.1
123.1
118.1
118.1
113.7
113.7
Total assets
123.1
123.1
118.1
118.1
113.7
113.7
1,876.7
1,218.8
1,935.1
1,468.4
1,970.2
1,338.8
(€ in millions)
Borrowings
Trade payables and other liabilities
Total liabilities
336.1
336.1
341.9
341.9
296.6
296.6
2,212.8
1,554.9
2,277.0
1,810.3
2,266.8
1,635.4
The estimated fair value of Borrowings is calculated using a DCF valuation methodology. It is equal to the sum of
future cash flows discounted using a discount rate that is determined according to the current long-term yield on
French government bonds, the risk in European corporate bond market and the Group’s relative credit risk. The
decrease in the fair value of Borrowings as of September 30, 2011 compared to the prior year end is due to an
increase in the discount rate related to a higher risk in European corporate bond market, as well as € 123.1 million
of repayments. The increase in the fair value of Borrowings as of September 30, 2010 was mainly due to a decrease in
long-term government bond yields, partly offset by principal repayments.
The recorded value of accounts receivables, other assets, trade payables and other liabilities generally equals their
fair value due to the short time between their recognition and their realization (for assets) or settlement (for
liabilities). Trade receivables and payables payment terms are presented in notes 7.1. “Trade Receivables” and
13.2. “Trade Payables Maturity Analysis”, respectively.
22.2.
CURRENCY RISK MANAGEMENT
22.2.1.
Currency Risk Exposure and Foreign Currency Hedges
The Group’s exposure to foreign currency risk relates principally to variations in the value of the U.S. dollar and
British pound. The following table presents the Group’s balance sheet main exposures to foreign currencies as of
September 30, 2011:
Foreign Exchange Risk Exposure
(USD / GBP in millions)
USD
GBP
0.1
4.8
Liabilities
(1.5)
(1.1)
Foreign exchange risk exposure
(1.4)
3.7
Assets
Foreign exchange contracts in place to hedge assets
-
Foreign exchange contracts in place to hedge liabilities
1.5
Net foreign exchange risk exposure
0.1
(4.8)
(1.1)
The Group attempts to reduce its currency risk by purchasing hedging instruments.
As of September 30, 2011, 2010 and 2009, the Group had € 169.5 million, € 168.9 million and € 139.5 million,
respectively, of foreign currency hedge contracts outstanding.
In Fiscal Years 2011, 2010 and 2009, the net impact of the settlement of foreign currency hedge contracts was a
€ 2.6 million loss, a € 2.4 million loss and a € 14.0 million gain, respectively. These amounts correspond to the
effective portion reclassified from Other elements in equity and Minority interest to Revenue or Costs and expenses when the
hedged transactions affect the Consolidated Statements of Income (see note 3.1.6.4. “Derivative Instruments”).
110
The ineffective portion of foreign currency derivatives is recognized in Financial charges. For Fiscal Year 2011, this
amount was a € 0.1 million gain. For Fiscal Years 2010 and 2009, the ineffective portion of foreign currency
derivatives was a € 0.0 million gain and a € 1.1 million gain, respectively.
The effective portion of foreign currency derivatives relates to transactions that have not yet affected the
consolidated statements of income and are recorded in Other elements in equity and in Minority interest (see notes 10.3.
“Other Elements in Shareholders’ Equity” and 11 “Minority Interests”). Changes to the effective portion during the
year are presented as part of the Consolidated Statements of Other Comprehensive Income and amounted to an unrealized
gain of € 2.9 million, an unrealized loss of € 0.6 million and an unrealized loss of € 6.3 million, in Fiscal Years 2011,
2010 and 2009 respectively.
22.2.2.
Exchange Rate Sensitivity
The following table presents the impact on Net loss attributable to equity holders of the parent and Shareholders’ equity of a
hypothetical 10% appreciation of foreign exchange rates to the euro on September 30, 2011, taking into account
the Group’s portfolio of foreign currency derivative instruments:
(€ in millions)
10% appreciation of U.S. dollar to euro
10% appreciation of British pound to euro
22.3.
Decrease in net loss
attributable to the parent
Increase/(decrease) in
shareholders’ equity
-
3.6
(0.1)
(8.9)
B
B.1
B.2
INTEREST RATE RISK MANAGEMENT
As of September 30, 2011, 2010 and 2009, approximately 25% of the Group’s borrowings was tied to floating
interest rates, resulting in weighted average interest rates of 3.97%, 3.93% and 4.56%, respectively, on total
borrowings of € 1.9 billion.
B.3
B.4
The Group’s variable rate debt is linked to Euribor rates. The Group also has cash and cash equivalents, on which it
receives a variable rate of return linked to Euribor rates.
B.5
Changes to Euribor rates can impact the amount of interest expense or interest income the Group recognizes for a
given Fiscal Year.
B.6
The Group attempts to reduce this risk by hedging the following 24 months of interest cash flows, if the related
variable interest rate borrowings are projected to exceed the Group’s cash and cash equivalents, which generate
variable rate interest cash flows.
B.7
As the Group will not begin to pay interest related to TWDC loans until 2017, the Group does not currently hedge
interest payments related to these loans.
B.8
B.9
As of September 30, 2011, the Group’s cash and cash equivalents are expected to exceed the € 94.6 million of
related variable interest borrowings that generate interest payments during the next 24 months, and therefore the
Group has no hedges in place.
The following table presents the Group’s net exposure to interest rate risk as of September 30, 2011, 2010 and 2009:
September 30,
(€ in millions)
2011
2010
2009
Variable rate borrowings excluding TWDC loans
94.6
181.2
267.7
(366.1)
(400.3)
(340.3)
(271.5)
(219.1)
(72.6)
Less cash and cash equivalents
Net interest rate risk exposure
The Group had no interest rate swap agreements in Fiscal Years 2011 and 2010. In Fiscal Year 2009, the Group was
counterparty to several interest rate swaps. These swaps enabled management to limit the impact of volatility in
future cash flows required for interest payments on floating rate borrowings.
In Fiscal Year 2009, the net result on the settlement of interest rate swaps was a € 2.1 million loss.
111
B
23. PROVISIONS, COMMITMENTS AND CONTINGENCIES
23.1.
PROVISIONS
Provisions as of September 30, 2011, 2010 and 2009 are presented below:
(€ in millions)
Amount
17.5
Increase
4.4
Reversal
(4.2)
of which reversal without costs
(1.1)
17.7
Increase
6.9
Reversal
(3.2)
of which reversal without costs
(0.8)
21.4
Provisions include amounts for various charges, claims and litigations against the Group.
There are various legal proceedings and claims against the Group, principally relating to incidents arising from
the conduct of its business. Management has established provisions for such matters based on its best estimate and
does not expect the Group to suffer any material additional liability by reason of such actions, nor does it expect
that such actions will have a material effect on its liquidity or operating results.
23.2.
COMMITMENT AND CONTINGENCIES
23.2.1.
Contingent liabilities
The table below sets out the Group’s contingent obligations as of September 30, 2011, 2010 and 2009:
Commitments terms expiring
September 30,
2011
Less than
1 year
1-5
years
More than
5 years
September 30,
2010
September 30,
2009
TWDC contingent obligations
182.9
-
-
182.9
182.9
182.9
Other
145.6
37.1
104.3
4.2
165.1
51.6
Total contingent obligations
328.5
37.1
104.3
187.1
348.0
234.5
(€ in millions)
As part of the terms of the 1994 Financial Restructuring agreement, the payment of a one-time development fee to
TWDC of € 182.9 million was required upon the satisfaction of certain conditions, including the initiation of
construction of a second park and the authorization of the Lenders for its financing. This fee primarily
corresponded to costs incurred by TWDC from 1990 to 1994 for the design and development of a second park,
whose development was eventually postponed in Fiscal Year 1994.
In order to obtain the approval of the financing of the Walt Disney Studios® Park by the Lenders, from which a
substantial portion of the Legally Controlled Group’s operating assets is leased, TWDC agreed in September 1999 to
amend the terms of the development fee so that it will not be due unless and until future events occur. These events
include the repayment of all of the Group’s existing bank debt and the achievement of a level of operating margin
before depreciation and amortization higher than € 472.6 million.
The Group has also provided certain performance guarantees to contractual partners, which, depending on future
events, may or may not require the Group to pay an amount up to € 6.8 million. These amounts are included in the
Other line of the figure presented above. Other components of this line amount to € 138.8 million and correspond
to several long-term service contracts.
112
23.2.2.
Other commitments
23.2.2.1.
Future Investments
The Group has committed to future investments related to the improvement of the Resort and existing assets, for an
amount of € 40.9 million, as of September 30, 2011.
23.2.2.2.
Other Leases
The Group has other operating leases, primarily for office and computer equipment and vehicles, for which total
rental expense was € 30.0 million, € 29.6 million and € 32.1 million for the years ended September 30, 2011, 2010
and 2009, respectively.
As of September 30, 2011, future minimum rental commitments under these non-cancelable operating leases are as
follows:
(€ in millions)
Amount
2012
10.1
2013
6.4
2014
4.7
2015
3.5
2016
1.5
Thereafter
0.5
Total
B
B.1
B.2
B.3
26.7
B.4
24. EMPLOYEES
B.5
The Group’s weighted-average number of employees for Fiscal Years 2011, 2010 and 2009 is presented below:
B.6
Fiscal Year
2011
2010
2009
1,779
1,789
1,806
Hourly
11,963
11,521
11,552
Total
13,742
13,310
13,358
Salaried
B.7
B.8
B.9
Total employee costs for Fiscal Years 2011, 2010 and 2009 were € 556.9 million, € 524.8 million and € 509.3 million,
respectively.
25. KEY MANAGEMENT COMPENSATION1
25.1.
25.1.1.
CORPORATE OFFICERS (“MANDATAIRES SOCIAUX”)
The Gérant
For Fiscal Years 2011, 2010 and 2009, base management fees earned by the Gérant amounted to € 12.9 million,
€ 12.7 million and € 12.3 million, respectively. For more details on the calculation method for the Gérant’s base
management fees, see note 16.1.1. “Royalties and Management Fees”, as well as section A.4.1. “Significant undertakings
related to the Resort’s Development” of the Group’s 2010 Reference Document, and section “Management of the
Group in Fiscal Year 2011” of the Group and Parent Company Management Report for Fiscal Year 2011.
1
As the Company is a French Limited partnership, the Group considers that key management as defined by IAS 24 corresponds to the corporate
officers: the Gérant and the Supervisory Board. In addition, the Group has put in place a Management Committee that is comprised of the direct
reports of the Gérant’s Chief Executive Officer. The Group estimated it appropriate to disclose its total compensation in this note.
113
B
25.1.2.
The Supervisory Board
During Fiscal Years 2011, 2010 and 2009, fees paid to members of the Company’s Supervisory Board for attending
Board meetings were € 276,041, € 263,297 and € 193,315 respectively. TWDC employees are not paid for serving on
the Company’s Supervisory Board. Members of the Company’s Supervisory Board do not benefit from undertakings
related to other compensation, indemnity or advantages as a result of their appointment or a termination of their
mandate. No stock options of the Company have been granted to the members of the Supervisory Board. For more
details, see the Group and Parent Company Management Report for Fiscal Year 2011, section “Management of the
Group in Fiscal Year 2011”.
25.2.
During the Fiscal Year, the aggregate compensation and other amounts, including social charges, relocation and
accommodation expenses, paid by the Group on behalf of the Management Committee members was € 7.5 million. As
of September 30, 2011, these same officers held together a total of 88,854 of the Company’s stock options,
185,847 of TWDC’s stock options and 141,947 of TWDC’s restricted stock units. For additional information on the
Company’s stock options, see note 21 “Stock options”. The Group bears the cost of all compensation paid to the
Management Committee members in relation to their duties to the Group. No specific extra pension scheme is in place
for the Management Committee members. For more details, see the Group and Parent Company Management Report
for Fiscal Year 2011, section “Management of the Group in Fiscal Year 2011”.
114
Statutory Auditors’ Report on the Consolidated Financial Statements
B.4. STATUTORY AUDITORS’ REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS
This is a free translation into English of the statutory auditors’ report issued in French and is provided solely for the convenience
of English speaking users. The statutory auditors’ report includes information specifically required by French law in such reports,
whether modified or not. This information is presented below the opinion on the consolidated financial statements and includes
an explanatory paragraph discussing the auditors’ assessments of certain significant accounting and auditing matters. These
assessments were considered for the purpose of issuing an audit opinion on the consolidated financial statements taken as a
whole and not to provide separate assurance on individual account captions or on information taken outside of the consolidated
This report should be read in conjunction with, and construed in accordance with, French law and professional auditing
standards applicable in France.
PricewaterhouseCoopers Audit
63, Rue de Villiers
92208 Neuilly-sur-Seine
Caderas Martin
76, rue de Monceau
75008 Paris
STATUTORY AUDITORS’ REPORT
ON THE CONSOLIDATED FINANCIAL STATEMENTS
B
B.1
For the year ended September 30, 2011
B.2
To the Shareholders
B.3
EURO DISNEY S.C.A.
Immeubles Administratifs
Route Nationale 34
77700 Chessy
France
B.4
In compliance with the assignment entrusted to us by your Annual General Meeting, we hereby report to you, for
the year ended 30 September 2011, on:
B.6
B.5
•
the audit of the accompanying consolidated financial statements of EURO DISNEY S.C.A.;
B.7
•
the justification of our assessments;
B.8
•
the specific verification required by law.
B.9
These consolidated financial statements have been reviewed by EURO DISNEY S.A.S, Gérant of
EURO DISNEY S.C.A. Our role is to express an opinion on these consolidated financial statements based on our
audit.
I - OPINION ON THE CONSOLIDATED FINANCIAL STATEMENTS
We conducted our audit in accordance with professional standards applicable in France; those standards require
that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial
statements are free of material misstatement. An audit involves performing procedures, using sampling techniques
or other methods of selection, to obtain audit evidence about the amounts and disclosures in the consolidated
financial statements. An audit also includes evaluating the appropriateness of accounting policies used and the
reasonableness of accounting estimates made, as well as the overall presentation of the consolidated financial
statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinion.
In our opinion, the consolidated financial statements give a true and fair view of the assets and liabilities and of the
financial position of the Group as at 30 September 2011 and of the results of its operations for the year then ended
in accordance with International Financial Reporting Standards as adopted by the European Union.
115
B
II - JUSTIFICATION OF OUR ASSESSMENTS
In accordance with the requirements of article L.823-9 of the French Commercial Code (code de commerce) relating to
the justification of our assessments, we bring to your attention the following matter(s):
Fixed assets are accounted for as exposed in Note 3.1.5 to financial statements. We have verified that the accounting
policies are appropriate and reviewed the approach applied by the Gérant to assess the valuation of these assets.
These assessments were made as part of our audit of the consolidated financial statements taken as a whole, and
therefore contributed to the opinion we formed which is expressed in the first part of this report.
III - SPECIFIC VERIFICATION
As required by law, we have also verified in accordance with professional standards applicable in France the
information presented in the Group’s management report.
We have no matters to report as to its fair presentation and its consistency with the consolidated financial
statements.
Neuilly-sur-Seine and Paris, November 24, 2011
The statutory auditors
116
Caderas Martin
Eric Bulle
Pierre-Olivier Cointe
Company Financial Statements Prepared Under French Accounting Principles
B.5. COMPANY FINANCIAL STATEMENTS PREPARED UNDER FRENCH ACCOUNTING PRINCIPLES
BALANCE SHEETS
118
STATEMENTS OF INCOME
119
NOTES TO THE FINANCIAL STATEMENTS
120
1.
DESCRIPTION OF THE BUSINESS
120
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
120
3.
INVESTMENTS IN SUBSIDIARIES
121
4.
OTHER FIXED ASSETS
121
5.
ACCOUNTS RECEIVABLE FROM AFFILIATED COMPANIES
121
6.
SHAREHOLDERS’ EQUITY
121
B.1
7.
DEBT AND ACCOUNTS PAYABLE
122
B.2
8.
REVENUES
122
9.
OTHER EXTERNAL COSTS AND EXPENSES
123
10.
EXCEPTIONAL INCOME
123
11.
INCOME TAX
123
12.
STOCK OPTIONS
123
13.
EMPLOYEES
125
14.
SUPERVISORY BOARD COMPENSATION
125
B.8
15.
FEES PAYABLE TO STATUTORY AUDITORS
125
B.9
B
B.3
B.4
B.5
B.6
B.7
117
B
BALANCE SHEETS
September 30,
(€ in millions)
Note
2011
2010
0.2
0.2
Investments in subsidiaries
3
603.8
603.7
Other assets
4
1.1
1.1
605.1
605.0
14.3
16.0
619.4
621.0
Fixed Assets
Intangible assets
Current assets
Account receivable from affiliated companies
5
Total assets
Share capital
Share premium
Legal reserve
Accumulated deficit, beginning of year
Current year net loss
39.0
39.0
1,442.5
1,442.5
16.9
16.9
(878.2)
(876.5)
(1.4)
6
(1.7)
618.8
620.2
0.1
0.2
0.5
0.6
0.6
0.8
619.4
621.0
Accounts payable and other liabilities
Accounts payable and accrued liabilities
Payroll and tax liabilities
7
Total shareholders’ equity and liabilities
The accompanying notes are an integral part of these financial statements.
118
STATEMENTS OF INCOME
(€ in millions)
Note
2011
2010
8
0.7
0.7
9
(0.7)
(0.8)
Wages
(0.8)
(0.9)
Employee benefits
(0.4)
(0.3)
(0.3)
(0.3)
(2.2)
(2.3)
(1.5)
(1.6)
Revenues
Costs and expenses
Services and other
Other
9
Loss before financial charges
Net financial income
Loss before exceptional and income taxes
(1.5)
(1.6)
B
(0.1)
B.1
-
-
-
-
Exceptional loss
10
0.1
Income tax
11
-
Net loss
(1.4)
-
B.2
(1.7)
B.3
The accompanying notes are an integral part of these financial statements.
B.4
B.5
B.6
B.7
B.8
B.9
119
B
Notes to the Financial Statements
NOTES TO THE FINANCIAL STATEMENTS
1. DESCRIPTION OF THE BUSINESS
Euro Disney S.C.A. (the “Company”), its owned and controlled subsidiaries (the “Legally Controlled Group”) and
consolidated financing companies (collectively, the “Group”) commenced operations with the official opening of
Disneyland® Paris (“the Resort”) on April 12, 1992. The Group operates the Resort, which includes two theme parks
(collectively, the “Theme Parks”), the Disneyland® Park and the Walt Disney Studios® Park (which opened to the
public on March 16, 2002), seven themed hotels (the “Hotels”), two convention centers, the Disney Village®
entertainment center and Golf Disneyland®, a 27-hole golf course (the “Golf Course”). In addition, the Group
manages the real estate development and expansion of the property and related infrastructure near the Resort.
The Company, a publicly held French company and traded on Euronext Paris, is 39.8% owned by EDL Holding
Company LLC and managed by Euro Disney S.A.S. (the “Gérant”), both of which are indirect wholly-owned
subsidiaries of The Walt Disney Company (“TWDC”). The General Partner is EDL Participations S.A.S., also an
indirect, wholly-owned subsidiary of TWDC. The Company owns 82% of Euro Disney Associés S.C.A. (“EDA”), which
is the primary operating company of the Resort. Two other indirect wholly-owned subsidiaries of TWDC equally own
the remaining 18% of EDA.
The Company is consolidated using the full consolidation method into the financial accounts of TWDC, based in
Burbank, USA.
The Company’s fiscal year begins on October 1 of a given year and ends on September 30 of the following year. For
the purposes of these financial statements, the fiscal year for any given calendar year (the “Fiscal Year”) is the fiscal
year that ends in that calendar year (for example, Fiscal Year 2011 is the fiscal year that ends on September 30,
2011).
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
2.1.
BASIS OF PREPARATION
The Company’s financial statements are prepared in accordance with French accounting principles and regulations
under the Plan Comptable Général.
2.2.
INTANGIBLE ASSETS
Intangible assets consist of rights related to a Theme Park attraction and are recorded at acquisition cost.
Amortization of these costs is computed over twenty years using the straight-line method.
2.3.
INVESTMENTS IN SUBSIDIARIES
Investments in subsidiaries are stated at their acquisition cost less any applicable impairment charges.
On an annual basis, the Company reviews the value in use of its investments in subsidiaries. When the value in use is
lower than the gross value, an impairment provision is recorded for the difference. Value in use for any subsidiary
(combined with its own subsidiaries) is calculated using various criteria. These primarily include the net equity
position of the subsidiary, the present value analysis of future expected cash flows, the strategic materiality of the
subsidiary, as well as its future potential profitability.
2.4.
RETIREMENT OBLIGATION
The Company provides for post retirement benefits through the use of defined contribution plans and defined
benefit plans.
All employees participate in state funded pension plans in accordance with French laws and regulations and in a
supplemental defined contribution plan. Salaried employees also participate in a funded retirement plan.
Contributions to these plans are paid by the Company and the employees. Employer’s part of the contribution is
expensed as incurred. The Company has no future commitment with respect to these benefits.
120
In addition to the above plans, the Company also provides for defined benefit plans through the Company’s
collective bargaining agreements which call for retirement benefits ranging from one-half month to three months
of gross wages to be provided to employees who retire from the Company at the age of 60 or older after completing
at least one year of service.
3. INVESTMENTS IN SUBSIDIARIES
As of September 30, 2011 and 2010, the Company held direct ownership in the following entities:
September 30, 2011
(€ in millions)
Net value
EDA
September 30, 2010
% of ownership
Net value
603.6
82%
0.2
100%
603.8
% of ownership
603.6
82%
0.1
100%
603.7
For Fiscal Years 2011 and 2010, the Company reviewed the value in use of its investment in EDA and concluded that
no impairment provision was required.
As of September 30, 2011 and 2010, no financial guarantees or asset-backed collateral were granted by the Company
to its subsidiaries. During Fiscal Years 2011 and 2010, no dividends were received from these subsidiaries.
Additional information (prepared under French GAAP) related to the Company’s subsidiaries as of and for the year
ended September 30, 2011, is as follows:
(€ in millions)
Share
capital
Shareholders’
equity
Revenues
EDA
611.1
327.4
1,218.2
0.2
0.2
-
Outstanding
loans and
advances granted
by the Company
Net loss
(79.4)
-
14.3
B
B.1
B.2
B.3
B.4
-
B.5
4. OTHER FIXED ASSETS
As of September 30, 2011, other fixed assets amounted to € 1.1 million and mainly included treasury shares owned
as part of the liquidity contract and cash allocated to the liquidity account (see note 6.2 “Liquidity Contract”).
B.6
B.7
5. ACCOUNTS RECEIVABLE FROM AFFILIATED COMPANIES
B.8
As of September 30, 2011 and 2010, accounts receivable from affiliated companies were comprised of cash advances
made to EDA for € 14.3 million and € 16.0 million, respectively. These advances are due within one year.
B.9
During Fiscal Year 2011 these accounts receivable bore interest at an annual average rate of Euribor 3 months minus
0.50%. For Fiscal Year 2011, those interests amounted to € 0.1 million.
6. SHAREHOLDERS’ EQUITY
Share
capital
Share
premium
Legal
reserve
39.0
1,442.5
16.9
Allocation of net loss for the year ended September 30, 2009
-
-
Net loss for the year ended September 30, 2010
-
-
-
39.0
1,442.5
16.9
(876.5)
-
-
-
(1.7)
(€ in millions)
Balance as of September 30, 2009
Allocation of net loss for the year ended September 30, 2010
Net loss for the year ended September 30, 2011
Accumulated
deficit
(873.9)
(2.7)
-
-
-
39.0
1,442.5
16.9
-
Net loss
(2.7)
2.7
(1.7)
(1.7)
1.7
(1.4)
(878.2)
(1.4)
Shareholders’
equity
621.9
(1.7)
620.2
(1.4)
618.8
121
B
As of September 30, 2011 and 2010, the Company’s legal reserve was € 16.9 million, which is not available for
distribution.
For Fiscal Year 2011, the Company’s financial statements are prepared by the Company and submitted for approval
at the next annual shareholders’ general meeting. As of September 30, 2011 the net loss amounted to € 1.4 million.
The shareholders will then decide to allocate this net loss to the accumulated deficit. For Fiscal Years 2010, 2009 and
2008 no share dividends were distributed.
6.1.
SHARE CAPITAL
As of September 30, 2011, and following the finalization of the share consolidation (the “Reverse Stock Split”1) in
December 2009, the Company’s issued and fully paid share capital was composed of 38,976,490 shares with a
nominal value of € 1.00 each.
6.2.
LIQUIDITY CONTRACT
meetings, the Gérant carried out a share buyback program through Oddo Corporate Finance, an independent
investment services provider acting under a liquidity contract. For additional information, see the notice on the
share buyback program, as well as the press releases on the liquidity contract, that are available on the Company’s
website (http://corporate.disneylandparis.com).
As of September 30, 2011, the Company owns 144,930 treasury shares acquired through its liquidity contract. Their
acquisition cost amounts to € 0.7 million. As of September 30, 2011, the Company has also € 0.4 million in cash
allotted to the liquidity account.
7. DEBT AND ACCOUNTS PAYABLE
September 30,
(€ in millions)
2011
2010
Trade payables
0.1
0.2
Payroll, employee benefits and tax liabilities
0.3
0.4
Other accrued liabilities
0.2
0.2
0.6
0.8
As of September 30, 2011, trade payables amounted to € 0.1 million and were mainly composed of accrued payables.
The amount of billed payables was not material and was due within 30 days.
8. REVENUES
In Fiscal Years 2011 and 2010, revenues amounted to € 0.7 million and consisted of services provided to EDA under
an administrative assistance agreement.
1
122
The Company implemented a 100 to 1 share consolidation on December 3, 2007, and the share consolidation period ended on December 4,
2009. For a description of the Reverse Stock Split and its completion, see section C.2.2. “Reverse Stock Split” of the Group’s 2010 reference
document and the press release published on December 16, 2009, both available on the Company’s website
9. OTHER EXTERNAL COSTS AND EXPENSES
For Fiscal Year 2011, services and other consisted primarily of bank commissions, printing services and audit fees.
For Fiscal Year 2011, other costs and expenses consisted primarily of fees due to members of the Company’s Supervisory
Board.
10. EXCEPTIONAL INCOME
In Fiscal Years 2011 and 2010, exceptional income included the net income on treasury share sales.
11. INCOME TAX
During Fiscal Years 2011 and 2010, no income tax was payable as no taxable income was generated by the Company.
As of September 30, 2011, the Company’s unused tax loss carry-forwards approximated a total of € 31.4 million,
which are available to be carried forward indefinitely.
B
The Company is subject to income tax at a rate of 33.33%, which will be increased, when applicable, by a 3.3% social
contribution.
B.1
The Company files stand alone tax reports. It has not signed any consolidated tax return agreement.
B.2
B.3
12. STOCK OPTIONS
The Company’s shareholders have approved the implementation of two different stock option plans since 1999,
authorizing the issuance of stock options to employees or mandataires sociaux (corporate officers) together referred
to as the “Beneficiary” or “Beneficiaries” for the acquisition of the Company’s outstanding common stock.
The 1999 stock option plan terminated in Fiscal Year 2010: there were no remaining outstanding options for this
plan as of September 30, 2011. For all stock option plans, stock options were granted at a market exercise price
calculated in accordance with governing laws. Under the 2004 stock option plan, stock options were granted at a
market exercise price calculated as the average closing market price over the last 20 trading days preceding a stock
option grant. The options are valid for a maximum of eight years from their issuance date and become exercisable
over a minimum of four years in equal installments beginning one year from the date of grant under the last stock
option plan.
When a Beneficiary leaves the Company, any granted and vested option must be exercised in a period of 3 to
18 months after the effective date of departure, depending on the nature of this departure. In the case of a dismissal
for serious offense (as defined in French labor law), options are cancelled at the effective date of the dismissal.
B.4
B.5
B.6
B.7
B.8
B.9
123
B
The following table provides more information about the stock options granted and outstanding
as of September 30, 2011.
2004 Plan(1)
Date of shareholder approval
Attribution date
12/17/2004
9/6/2005
3/8/2006
3/14/2007
TOTAL
525,698
77,915
101,506
705,119
-
-
-
-
120,995
6,611
33,128
160,734
09/06/2005
03/08/2006
03/14/2007
-
Expiration date
09/06/2013
03/08/2014
03/14/2015
-
13.00
11.00
9.00
-
-
-
-
-
67,256
1,202
12,893
81,351
Remaining outstanding stock options(2)
261,373
50,589
35,331
347,293
Remaining outstanding and exercisable stock options(2)
261,373
50,589
35,331
347,293
Total number of stock options granted(2) including:
– the statutory management
– the employees receiving the ten largest option grants(2)
Option exercise price (€)(3)
Number of options exercised as of Sept. 30, 2011(2)
Stock options cancelled in Fiscal Year 2011
(1)
(2)
(3)
The period of validity for options granted under this plan is eight years from their issuance date. The shareholders of the Company approved the
setting of a stock option plan for a maximum of 5% of the Company’s share capital.
Each stock option provides the right to purchase one share of the Company’s stock at the exercise price. These numbers take into account the
2007 adjustments following the Reverse Stock Split and the 2005 adjustment following the share capital increase.
Option exercise price adjusted following the 2005 share capital increase, and the 2007 Reverse Stock Split.
12.1. CHANGES IN STOCK OPTIONS
A summary of the Company’s stock option activity for Fiscal Years 2011 and 2010 is presented below:
Weighted-average
exercise price
(in €)
563
17.51
Options granted
-
-
Options exercised
-
-
Options cancelled
124
Number of
options
(in thousands)
(134)
34.04
429
12.31
Options granted
-
-
Options exercised
-
-
Options cancelled
(82)
12.34
347
12.30
13. EMPLOYEES
The weighted average number of employees employed by the Company for Fiscal Years 2011 and 2010 amounted to
11 persons and 12 persons, respectively. All of them held salaried positions.
Total employee costs for Fiscal Years 2011 and 2010 were € 1.1 million and € 1.2 million, respectively.
As of September 30, 2011, the actuarial-evaluated amount for retirement obligation was € 0.1 million and was not
recorded on the balance sheet.
14. SUPERVISORY BOARD COMPENSATION
During Fiscal Years 2011 and 2010, fees paid to members of the Company’s Supervisory Board for attending Board
meetings were € 276,041 and € 263,297, respectively. TWDC employees are not paid for serving on the Company’s
Supervisory Board. Members of the Company’s Supervisory Board do not benefit from undertakings related to other
compensation, indemnity or advantages as a result of their appointment or a termination of their mandate. No stock
options for the Company have been granted to the members of the Supervisory Board.
B
15. FEES PAYABLE TO STATUTORY AUDITORS
B.1
In Fiscal Year 2011, fees expensed for the audit of statutory accounts amounted to € 112.8 million.
B.2
B.3
B.4
B.5
B.6
B.7
B.8
B.9
125
B
Statutory Auditors’ Report on the Financial Statements
B.6. STATUTORY AUDITORS’ REPORT ON THE FINANCIAL STATEMENTS
This is a free translation into English of the statutory auditors’ report issued in French and is provided solely for the convenience
of English speaking users. The statutory auditors’ report includes information specifically required by French law in such reports,
whether modified or not. This information is presented below the opinion on the financial statements and includes an
explanatory paragraph discussing the auditors’ assessments of certain significant accounting and auditing matters. These
assessments were considered for the purpose of issuing an audit opinion on the financial statements taken as a whole and not to
provide separate assurance on individual account captions or on information taken outside of the financial statements.
This report should be read in conjunction with, and construed in accordance with, French law and professional auditing
standards applicable in France.
63, rue de Villiers
Caderas Martin
76, rue de Monceau
75008 Paris
STATUTORY AUDITOR’S REPORT ON THE FINANCIAL STATEMENTS
For the year ended September 30, 2011
To the Shareholders
EURO DISNEY S.C.A.
Route Nationale 34
77700 Chessy
France
In compliance with the assignment entrusted to us by your Shareholders’ Annual General Meeting, we hereby
report to you, for the year ended September 30, 2011, on:
•
the audit of the accompanying financial statements of EURO DISNEY S.C.A. (“the Company”);
•
the justification of our assessments;
•
the specific verifications and information required by law.
These financial statements have been reviewed by EURO DISNEY S.A.S., Gérant of EURO DISNEY S.C.A. Our role is
to express an opinion on these financial statements based on our audit.
I - OPINION ON THE FINANCIAL STATEMENTS
We conducted our audit in accordance with professional standards applicable in France; those standards require
that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit involves performing procedures, using sample techniques or other methods of
selection, to obtain audit evidence about the amounts and disclosures in the financial statements. An audit also
includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates
made, as well as the overall presentation of the financial statements. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our audit opinion.
In our opinion, the financial statements give a true and fair view of the assets and liabilities and of the financial
position of the Company as at September 30, 2011, and of the results of its operations for the year then ended in
accordance with French accounting principles.
126
II - JUSTIFICATION OF OUR ASSESSMENTS
In accordance with the requirements of article L.823-9 of the French Commercial Code (code de commerce) relating to
the justification of our assessments, we bring to your attention the following matter(s):
A substantial part of the assets of your Company is composed of investments in subsidiaries that are accounted for as
described in Note 2.3 to financial statements. We have verified that the accounting policies are appropriate and
reviewed the approach applied by the Gérant to assess the valuation of these assets.
These assessments were made as part of our audit of the financial statements, taken as a whole, and therefore
contributed to the opinion we formed which is expressed in the first part of this report.
III - SPECIFIC VERIFICATIONS AND INFORMATION
We have also performed, in accordance with professional standards applicable in France, the specific verifications
required by French law.
We have no matters to report as to the fair presentation and the consistency with the financial statements of the
information given in the management report and in the documents addressed to the shareholders with respect to
the financial position and the financial statements.
Concerning the information given in accordance with the requirements of article L.225-102-1 of the French
Commercial Code (Code de commerce) relating to remunerations and benefits received by the directors and any other
commitments made in their favour, we have verified its consistency with the financial statements, or with the
underlying information used to prepare these financial statements and, where applicable, with the information
obtained by your company from companies controlling your company or controlled by it. Based on this work, we
attest the accuracy and fair presentation of this information.
In accordance with French law, we have verified that the required information concerning the identity of
shareholders and holders of the voting rights has been properly disclosed in the management report.
B
B.1
B.2
B.3
B.4
B.5
B.6
B.7
Caderas Martin
B.8
Eric Bulle
B.9
127
B
Statutory Auditors’ Special Report on Related-Party Agreements and Commitments
B.7. STATUTORY AUDITORS’ SPECIAL REPORT
COMMITMENTS
ON
RELATED-PARTY AGREEMENTS
AND
This is a free translation into English of the statutory auditors’ report issued in the French language and is provided solely for
the convenience of English speaking readers. This report should be read in conjunction with, and construed in accordance with,
French law and professional auditing standards applicable in France.
63, Rue de Villiers
Caderas Martin
76, rue de Monceau
75008 Paris
STATUTORY AUDITORS’ SPECIAL REPORT
ON RELATED-PARTY AGREEMENTS AND COMMITMENTS
Year ended September 30, 2011
To the Shareholders
EURO DISNEY S.C.A.
Route Nationale 34
77700 Chessy
Ladies and Gentlemen,
As statutory auditors of your Company, we hereby present our report on related-party agreements and
commitments.
Our responsibility does not include identifying undisclosed related-party agreements and commitments. We are only
required to report to you, on the basis of the information provided to us, on the main features and terms of the
related-party agreements that have been disclosed to us, without commenting on their relevance or substance.
Under the provisions of Article R.226-2 of the Code de Commerce, it is your responsibility to determine whether these
agreements and commitments are appropriate and should be approved.
ABSENCE OF AGREEMENTS AND COMMITMENTS
Please note that we have received no notice of any related-party agreement or commitment drawn up in the course
of the period that is subject to the dispositions of article L.226-10 of the Code de Commerce.
RELATED-PARTY AGREEMENTS AND COMMITMENTS AUTHORISED IN PRIOR
YEARS, WHICH REMAINED IN FORCE DURING FISCAL YEAR 2011
Under the provisions of the Code de commerce, we have been informed of the following related-party agreements and
commitments authorised in prior years, which still remained in force during the last period.
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Statutory Auditors’ Special Report on Related-Party Agreements and Commitments
1.
AGREEMENTS
BETWEEN YOUR COMPANY AND
COMPANY HAS AN
EURO DISNEY S.C.A.,
A SUBSIDIARY IN WHICH YOUR
82% SHAREHOLDING
With respect to the legal and financial restructuring of the Euro Disney group and in accordance with the terms of
the contribution agreement (the “Contribution Agreement”) pursuant to which your Company contributed
substantially all of its assets and liabilities to Euro Disney Associés S.C.A. (“EDA”) in exchange for a 82% interest in
the capital of EDA, the following related-party agreements remained in place during the period:
1.
The sub-licence contract, between your company and Euro Disney Associés S.C.A., (“EDA”), which allows the
latter to continue to use the name “Euro Disney” free of charge and, in addition, to execute all those contracts
not transferred to EDA under the Contribution Agreement.
2.
The cash flow agreement, between your company and EDA, by which your company made available to EDA
funds that it kept from the 2005 capital increase. The funds made available amounted to € 14.3 million at
30 September 2011. An income amounting to € 100.6 thousand was recognised in fiscal year 2011 related to
this advance.
3.
The agreement for administrative assistance, by which your company provides certain services to EDA in
exchange for a fixed remuneration, revisable annually. For the fiscal year 2011, your Company recognised
€ 0.66 million of income related to this agreement. The related payments received for the period represent
€ 0.79 million and include related taxes.
2.
THE AGREEMENT BETWEEN YOUR COMPANY AND EURO DISNEY S.A.S., THE GERANT
COMPANY, IN WHICH THE WALT DISNEY COMPANY HAS A 99% SHAREHOLDING
OF YOUR
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In compliance with article IV of the company by-laws, the Gérant receives from your company an annual income
equal to € 25,000 payable in one payment at the end of each fiscal year.
For the 2011 fiscal year a charge of € 25,000 was recorded related to this agreement. This amount has not been paid
by your company.
B.4
B.5
We have performed the work that we considered necessary with regard to the professional ethics of the “Compagnie
Nationale des Commissaires aux Comptes” (the national company of statutory auditors) related to this assignment. This
work consisted of checking the information given to us with the documents on which it is based.
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Caderas Martin
Eric Bulle
B.7
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B
Supervisory Board General Report on Euro Disney S.C.A., its Subsidiaries and Consolidated Entities
B.8. SUPERVISORY BOARD GENERAL REPORT ON EURO DISNEY S.C.A., ITS SUBSIDIARIES AND
CONSOLIDATED ENTITIES
We are pleased to present to you our general report on the management of Euro Disney S.C.A. (the “Company”), its
subsidiaries and consolidated entities (collectively, the “Group”) for the fiscal year ended September 30, 2011
(“Fiscal Year 2011”).
You will find a detailed presentation of Fiscal Year 2011 in the Gérant’s report on the consolidated and annual
financial statements. We do not have any particular comments on this report, which we have reviewed and which has
been submitted to you.
The results of the Euro Disney S.C.A. group (the “Group”) for Fiscal Year 2011 show a net loss of € 63.9 million
compared to a net loss of € 45.2 million for the prior year. Net loss attributable to equity holders of the parent
amounted to € 55.6 million and net loss attributable to minority interests amounted to € 8.3 million.
Total revenues of the Group for Fiscal Year 2011 increased 1.8% to € 1,297.7 million.
Resort revenues increased by € 60.0 million to € 1,275.2 million, reflecting higher guest spending and volumes in
theme parks and hotels.
Theme parks attendance increased 4% compared to the prior-year period to 15.6 million, while average spending
per guest increased 2% to € 46.23. Hotel occupancy also increased by 1.7 percentage point to 87.1% while average
spending per room increased 5% to € 219.74.
The increase in attendance was primarily due to more guests visiting from France, United Kingdom and Spain. The
increase in hotel occupancy was due to more guests from France and the United Kingdom as well as higher business
group activity.
The increase in average spending per guest was due to higher spending on admissions and food and beverage while
the increase in average spending per room was due to higher daily room rates and spending on food and beverage.
The Group’s operating margin decreased to € 11.5 million from € 34.1 million during the prior year.
The Group’s costs and expenses for Fiscal Year 2011 increased 3.7% to € 1,286.2 million compared to the prior year.
This increase was primarily due to investments related to enhancing the guest experience, labor rate inflation and
volume-related resort costs. Partially offsetting this increase were lower real estate cost of sales. In addition, in fiscal
year 2010, the Group also benefited from the refund of certain tax payments made in previous years, for a net
amount of € 6.2 million.
The Group’s general and administrative expenses remained stable at € 103.0 million compared to the prior year.
Cash and cash equivalents decreased by € 34.2 million compared to the prior year to € 366.1 million, driven by
€ 123.3 million of debt repayment due that Fiscal Year.
We remind you that the Group also has to meet certain financial covenant requirements and reach certain
minimum performance objectives, pursuant to the debt agreements resulting from the financial and legal
restructuring of 2005.
For Fiscal Year 2011, because of a lower operating margin, the Group did not meet some of its minimum
performance objectives and therefore deferred the payment of € 25.0 million of royalties and management fees due
to The Walt Disney Company (“TWDC”) and the payment of € 15.1 million of interest due to the Caisse des dépôts et
consignations (“CDC”) and converted these amounts into subordinated long term debt, in accordance with its debt
agreements. We remind you that regardless of the payment deferral of such amounts resulting from their
conversion into subordinated long term debt, they continue to be accrued in the Group’s income statement and
thus are included in the Group’s net loss for Fiscal Year 2011.
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The Group also expects to defer the payment of an additional amount of € 5.1 million due to CDC during the first
quarter of fiscal year 2012. In the first quarter of the Fiscal Year, the Group also deferred € 5.1 million of interest
related to its performance objectives of the prior-year.
Concerning the financial covenant requirements, as explained by the Gérant in its report and subject to final thirdparty review, the Group believes that it has complied with these covenants for Fiscal Year 2011. To allow the Group
to be compliant, TWDC has agreed to defer an additional amount of € 8.9 million of Fiscal Year 2011 royalties into
long-term subordinated debt.
As the Group utilized the entire deferrals of the interests due to CDC for the Walt Disney Studios Parks with respect
to the fiscal year 2011, the Group’s recurring annual investment budget for fiscal year 2012 and thereafter will be
permitted up to 3% of the prior fiscal year’s adjusted consolidated revenues, unless the Group obtains lenders
agreement to increase this budget. For fiscal year 2012, if no agreement is reached, the Group’s recurring annual
investment budget will be reduced by approximately € 28 million compared to the prior fiscal year’s € 68 million
recurring investment incurred.
For fiscal year 2012, if compliance with these financial covenant requirements could not be achieved through
increased revenues, the Group would consider appropriately reducing costs, curtailing a portion of planned capital
expenditures or more, seeking the assistance of TWDC or other parties, as permitted under its debt agreements.
Concerning the Group’s liquidity, although no assurance can be given, the Group indicated that it has adequate
cash and liquidity for the foreseeable future based on existing cash positions, liquidity from the € 100.0 million line
of credit available from TWDC, and use of future conditional deferrals.
The Supervisory Board reminds you that these results came in an adverse economic environment, which intensified
during the summer season of Fiscal Year 2011, together with unfavourable weather conditions during the peak
summer holiday season. The Supervisory Board underlines that, despite this exceptional economic environment, all
the Group’s business key drivers increased, proving the operational success of Disneyland Paris.
However, the Supervisory Board indicates that it is particularly disappointing to note that the Group did not
generate a consolidated net profit for Fiscal Year 2011 and that the net loss increased to reach € 63.9 million.
Though the Board was explained that there were a number of non-recurring items, including a € 47 million real
estate sale, that positively impacted the net results last year and so comparisons to last year should be considerate.
The Supervisory Board recognized that the Group must continue focusing on its long-term plan to improve the
guest experience and guest satisfaction as these are critical to drive long-term performance. Management explained
to the Board that continuing investments in its assets, notably improving the appearance of its existing on stage
assets, are also critical to sustaining the Group’s position as Europe’s number one tourist destination and are vital to
long-term success. However, the Supervisory Board and the Financial Accounts Committee have stressed that the
Group also pays close attention to cost evolution as this continues to negatively impact short-term performance.
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The focus on the long-term strategy, the upcoming 20th Anniversary, the strength of the Disney brand, together with
focused marketing and sales strategies, should continue to have a positive effect on the Group’s key drivers.
Nevertheless, the Supervisory Board notes that a lot will depend on the health and evolution of the European travel
and tourism market and on any European economic recovery.
Given the persistent lack of visibility regarding the economic environment over the coming months, the Supervisory
Board asked that the Group cautiously approaches its long-term strategy, and that cost reductions be an integral
part of this strategy, although not to the detriment of any long-term potential growth. The goal of the Group must
continue to be the achievement of a sustained level of profitability. The Board insists that this is of utmost
importance to all parties, but first and foremost, the Group’s minority shareholders.
The Supervisory Board will closely monitor the actions taken by the Group.
We remind you that you are requested to approve the renewal of terms of office, for a three (3) year term, of
Mr. Michel Corbière and Mr. James A. Rasulo which expire at the close of this Shareholders’ Meeting.
You are also requested to approve the renewal of terms of office, for a six (6) years term, of PricewaterhouseCoopers
Audit which expire at the close of this Shareholders’ Meeting.
131
B
You are then requested to approve the appointment for a period of six (6) years term, of Mr. Yves Nicolas as
Substitute Statutory Auditor, in replacement of Mr. Etienne Boris whose term of office expires at the close of this
Shareholders’ Meeting,
You are finally requested to grant to the Gérant a new authorization to purchase and to sell the Company’s shares on
the stock market in accordance with the provisions of Articles L. 225-209 and seq. of the French Commercial Code
(“Code de commerce”). As described in the supplemental report of the Gérant, the previous authorization enabling the
Gérant to conduct same transactions on securities under the Thirteenth Resolution of the Ordinary General
Shareholders’ Meeting held on March 4, 2011 has been used by the Gérant to implement a liquidity contract and will
expire on September 4, 2012.
In light of the foregoing, we recommend that you approve all the resolutions presented to your Shareholders’
Meeting.
Chessy, December 2, 2011.
For the Supervisory Board
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Euro Disney S.C.A. Supervisory Board Special Report on Related-Party Agreements
B.9. EURO DISNEY S.C.A. SUPERVISORY BOARD SPECIAL REPORT
AGREEMENTS
ON
RELATED-PARTY
Your Supervisory Board, pursuant to Part II of the French Commercial Code (“Code de commerce”) and Article 6.3 (b)
of the Bylaws of your Company, is required to present to the Annual General Meeting a special report on relatedparty transactions governed by Article L. 226-10 of said Code.
After examining all the documents submitted to your Supervisory Board by the Gérant, your Supervisory Board
reports that, other than the agreements entered into by the Company and which were approved by you in previous
years and remained in full force and effect during the fiscal year ended September 30, 2011, there were no other
transactions governed by Article L. 226-10 of the French Commercial Code (“Code de commerce”) entered into during
this fiscal year.
Chessy, December 2, 2011.
B
For the Supervisory Board
B.1
B.2
B.3
B.4
B.5
B.6
B.7
B.8
B.9
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C.
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The Company and its Corporate Governance
C.1. THE COMPANY AND ITS CORPORATE GOVERNANCE
C.1.1.
The Company
The Company was originally structured in 1985 as a French corporation1. In 1989, the Company decided to modify
its corporate form from a corporation to a limited partnership. That same year, the Company listed its common
stock in France, the United Kingdom and Belgium2 under the name Euro Disneyland S.C.A. At the annual
shareholders’ general meeting held in 1991, the Company’s present corporate name, Euro Disney S.C.A., was
adopted.
As of September 30, 2011, EDL Holding Company LLC (an indirect wholly-owned subsidiary of TWDC) owns
approximately 39.8% of the Company’s share capital (see section C.2.4. “Breakdown of the Share Capital and
Voting Rights”, sub-section “Shareholding Composition” for more details).
The Company’s Gérant is Euro Disney S.A.S.
Corporate Name and Registered Office
Corporate name: Euro Disney S.C.A.
Registered office: Immeubles Administratifs, Route Nationale 34, 77700 Chessy, France.
Post Box: BP 100, 77777 Marne-La-Vallée Cedex 04, France.
Phone number: 01.64.74.40.00
Applicable Law
The Company is a limited partnership governed by French law, in particular by Book II of the French Commercial
Code.
Date of Formation and Term
The Company was structured and incorporated on December 17, 1985 to last for 99 years from the date of its
registration with the Commercial and Companies Registry, i.e. until December 16, 2084, excluding the impact of
any early termination or extension.
Commercial and Companies Registry
The Company is registered with the Commercial and Companies Registry of Meaux under number 334 173 887. Its
Siret number is 334 173 887 00053 (registered office) and its NAF (previously named APE) code is 9321Z.
C
C.1
C.2
C.3
C.4
1
2
The previous corporate names of the Company were Mivas S.A. from October 21, 1985 to October 24, 1988, Société d'Exploitation d'Euro
Disneyland S.A. from October 24, 1988 to February 24, 1989 and Euro Disneyland S.C.A. from February 24, 1989 to February 4, 1991.
The Company has since requested the cancellation of its shares listings on the Euronext Brussels Exchange and the London Stock Exchange (see
section C.2.5 “Markets for the Securities of the Company”).
C.5
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C
Corporate Purpose
According to Article 1.2 of its bylaws, the corporate purpose of the Company is:
“(i) to engage, directly or indirectly, in design, development, construction, leasing, purchasing, sale, promotion, licensing,
management and operation of:
(a) one or more amusement parks and leisure and entertainment facilities, including the Disneyland® and the Walt Disney
Studios® Theme Parks, located in Marne-La-Vallée, and all future extensions thereof; and also including, more generally, all
other theme parks, restaurants, merchandise retailing facilities, leisure centers, nature parks, campgrounds, sports facilities,
resorts and entertainment complexes located in Marne-La-Vallée or any other place;
(b) all other real estate operations, including, without limitation, undeveloped land, hotels, offices, housing, factories, schools,
shopping centers, conference centers, parking lots located in Marne-La-Vallée or in any other place, including, without
limitation, the buildings, plants and structures of the Euro Disneyland Project (the “EDL Project”), as defined in the agreement
on the creation and the operation of Euro Disneyland in France (the “Main Agreement”), dated as of March 24, 1987, as
amended; as well as all roads, plants, and other utilities, infrastructures and services relating thereto;
(ii) to invest, directly or indirectly, by establishing new companies, forming share partnerships or partnerships, subscribing to or
purchasing shares, rights to shares or other securities, making contributions in kind, effecting mergers, or any other transaction
relating to commercial, industrial or real estate activities which may be connected with or may permit the purposes cited in (i) above;
and generally
(iii) to engage in any commercial, financial, industrial, real estate and other operations directly or indirectly related to any of the
purposes referred to in (i) and (ii) above”.
Fiscal Year
The Fiscal Year runs from October 1 of the previous year to September 30 of the current year.
Allocation of Profits Pursuant to the Bylaws
Pursuant to Article 9.3 of the Company’s bylaws, a withdrawal of at least 5% is made from the profits of the Fiscal
Year, if any, reduced by the cumulated prior years’ losses, and this amount is allocated to a reserve account required
by law pursuant to Article L. 232-10 of the French Commercial Code. This withdrawal shall cease to be required
when these reserves have reached one-tenth of the Company’s share capital. As of September 30, 2011, the amount
of the reserve is € 16.9 million, which is greater than one-tenth of the Company’s share capital and therefore no
additional withdrawal is currently required.
If applicable, the distributable profit consists of the profit for the Fiscal Year, reduced by the cumulated prior years’
losses together with the amounts that are to be allocated to the reserves, as required by law or the bylaws, and
increased by any cumulated profits carried forward.
The Gérant may propose at the shareholders’ general meeting, prior to the distribution of dividends to shareholders,
the allocation of all or part of the profits of a Fiscal Year to other reserve accounts, to the extent and under the
conditions determined by prevailing law. After any allocation to reserves, distributable profits shall be allocated
pro rata to the shareholders in proportion to their respective holdings of common stock shares.
Pursuant to Article 9.3 of the Company’s bylaws, the payment of dividends is fixed at the time and place decided by
the Gérant within nine months of the end of the Company’s Fiscal Year, unless such term is extended by a court
decision. Dividends are payable to holders of shares of common stock outstanding at the time such dividends were
approved for distribution by the shareholders. The shareholders’ general meeting may grant to each shareholder an
option to receive all or part of any dividends in either cash or shares. Pursuant to legal requirements, dividends not
claimed within five years are forfeited to the French State, in accordance with Articles L.1126-1-1° and L.1126-2-1° of
the French General Code of Public Entities Ownership (Code général de la propriété des personnes publiques).
EDL Participations S.A.S. (the “General Partner”) will receive each year 0.5% of the Company’s profits for the Fiscal
Year, when applicable.
As of September 30, 2011, the Company does not have any distributable profit.
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General Meetings
Convening Meetings
General shareholders’ meetings, either ordinary or extraordinary, are held at least annually and may be called by
the Gérant, the Supervisory Board or any other persons empowered to do so pursuant to applicable prevailing law or
the bylaws of the Company. In addition to an agenda, notices of general shareholders’ meetings shall specify the date,
time and place of the meeting and shall be provided to the shareholders and the Gérant in accordance with the timing
and other requirements of applicable law. The general shareholders’ meetings shall be held at the Company’s
registered office or at any other place located in France, according to the decision made by the author of the notice.
Admission to Meetings
Every shareholder, irrespective of the size of his or her shareholding, has the right to attend and participate in
meetings and to vote in person or by postal ballot.
In order to do so:
•
holders of registered shares must be registered in the Company’s share account by, at the very latest,
three (3) working days at midnight, Paris time, prior to the date on which the relevant meeting is due to be
held; and
•
holders of bearer shares must, by the same deadline, confirm their identity and evidence of their
shareholding by a certificate delivered via their share account broker.
Any shareholder unable to attend the meeting in person may choose one of the three following alternatives, in
accordance with the requirements of applicable prevailing law and regulations:
•
designate as proxy any individual or legal entity of his/her choice;
•
vote by mail; or
•
give a proxy to the Company without voting instructions.
If any proxy submitted by a shareholder does not specify who may vote with such a proxy, the chairman of the
general shareholders’ meeting shall use this proxy to vote in favor of all resolutions proposed or approved by the
Gérant, and against all other proposed resolutions. Any shareholder wishing to vote otherwise by proxy must
designate as proxy a person who agrees to vote in accordance with that shareholder’s instructions.
Exercise of Voting Rights
In accordance with French law, each shareholder participating in the shareholders’ general meetings is entitled to
as many votes as the number of shares which he or she holds or represents on the third business day prior to the
date of the shareholders’ general meeting. There is no clause providing for double or multiple voting rights in favor
of certain shareholders of the Company.
C.1.2.
C
The Company’s Corporate Governance Bodies
The four primary participants in the Company’s legal and governance structure are:
C.1
•
the General Partner;
C.2
•
the limited partners or shareholders;
•
the Gérant (“Euro Disney S.A.S.”); and
•
the Supervisory Board.
C.3
C.4
To the Company’s knowledge, members of the Supervisory Board and the representatives of the Gérant and General
Partner have no family relationship.
C.5
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C
The General Partner
The Company’s General Partner has unlimited liability for all debts and liabilities of the Company.
The General Partner is EDL Participations S.A.S. (“EDL Participations”), a French indirect wholly-owned subsidiary
of TWDC. This company modified its corporate form from a French corporation to a simplified corporation in
August 2004. EDL Participations cannot be removed as General Partner without its consent and cannot dispose of
any part of its interest as General Partner without the prior approval of a simple majority vote of common stock
shareholders represented at a general shareholders’ meeting. A unanimous vote of the shareholders is required to
approve a transfer of EDL Participations’ entire interest.
Any resolution submitted for the shareholders’ vote at an ordinary or extraordinary meeting may be passed only
with the prior approval of the General Partner, except for those relating to the election, resignation or dismissal of
members of the Supervisory Board.
The General Partner is entitled to a distribution each year equal to 0.5% of the Company’s profits, if any. For Fiscal
Year 2011, the General Partner was not entitled to any distribution.
As of September 30, 2011, the General Partner held ten shares of the Company.
The General Partner was represented by Mr. Greg Richart, Chairman and CEO until January 13, 2012. Mr. Richart
was the Group’s Chief Financial Officer and a member of the Management Committee from August 1, 2009 until
November 22, 2011 (for additional information, see section B.2. “Group and Parent Company Management
Report”, sub-section “Management of the Group in Fiscal Year 2011”). Moreover, he was a corporate officer in three
companies until January 13, 2012, i.e. Chief Operating Officer of Val d’Europe Promotion S.A.S., Euro Disneyland
Participations S.A.S. and Euro Disney Commandité S.A.S. During the last five Fiscal Years, he did not hold any other
corporate positions. The sole corporate purpose of the General Partner is to be the general partner of the
Company. On November 22, 2011, Mr. Richart was replaced by Mr. Mark Stead who is now the Group’s Chief
Financial Officer, as well as a member of the Management Committee. Mr. Mark Stead has been Chairman and
CEO of the General Partner since January 13, 2012. Moreover Mr. Mark Stead has been a corporate officer in three
companies since January 13, 2012, i.e. Chief Operating Officer of Val d’Europe Promotion S.A.S., Euro Disneyland
Participations S.A.S. and Euro Disney Commandité S.A.S.
To the Company’s knowledge, and in the previous five years, the General Partner and its legal representative have
not been:
•
•
involved in any official public incrimination and/or sanction by statutory or regulatory authorities (including
designated professional bodies);
•
To the Company’s knowledge, no potential conflicts of interest exist between any duties of the General Partner or
its legal representative, and their private interests and/or duties.
The business address of the General Partner and its representative is the Company’s registered office (Immeubles
Administratifs, Route Nationale 34, 77700 Chessy, France).
The Shareholders
The shareholders are convened to the general meetings of shareholders, held at least annually, and deliberate in
accordance with the prevailing legal and regulatory requirements.
Matters requiring a resolution passed by a simple majority of the common stock shareholders at an ordinary general
meeting include, without limitation:
138
•
election of an individual to the Supervisory Board;
•
approval of the Company’s consolidated and statutory accounts including payment of any dividend proposed
by the Gérant; and
•
•
ratification of any agreement (other than agreements entered into in the ordinary course of business on
normal commercial terms) or any amendment thereto entered into directly or through intermediaries:
–
between the Company and the Gérant; or
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by any member of the Supervisory Board; or
–
by any Company shareholder holding more than 10% of the voting rights, or if this shareholder is a
company, the controlling company thereof within the meaning of Article L. 233-3 of the French
Commercial Code; as well as
approval of any agreement into which any one of these above mentioned persons is indirectly interested or
which is entered into between the Company and a company in which the Gérant or a member of the
Company’s Supervisory Board has ownership interests or holds an executive position.
Shareholders with an interest in any agreement that requires a shareholder resolution are allowed to vote if they are
not a member of the Supervisory Board or the Gérant’s legal representative.
A resolution passed by a two-thirds majority of common stock shareholders is required to approve any amendment
to the bylaws, including any increase or reduction of the Company’s share capital, any merger or divestiture or any
conversion to another form of corporate organization.
The Gérant (“Euro Disney S.A.S.”)
Under French law, the primary responsibility of the management company is to manage a company at all times in
the company’s best interests.
The Gérant, a French simplified corporation, was appointed for an indefinite period as the Company’s sole
management company at the extraordinary shareholders’ meeting held on February 24, 1989. The Gérant was
initially formed as a French corporation (société anonyme) and was transformed into a simplified corporation (société
par actions simplifiée) in August 2004. The Gérant is an indirect wholly-owned subsidiary of TWDC. Under the
Company’s bylaws, the Gérant has the power to pursue any and all action in the name of the Company within the
scope of the Company’s corporate purpose and to bind the Company in all respects. In the context of the 2005
Restructuring, Euro Disney S.A.S. was also appointed as the management company for EDA, which is the Company’s
principal subsidiary.
If the Gérant ceases to hold office for any reason, the General Partner, currently an indirect wholly-owned subsidiary
of TWDC, has the exclusive right to appoint a successor, in accordance with the Company’s bylaws. The Gérant may
resign from its duties with a six-month prior written notice to the Supervisory Board or otherwise the Gérant may be
removed by the General Partner in the following circumstances:
•
at any time for legal incapacity, whether due to bankruptcy proceedings or otherwise;
•
at any time for any other reason by decision of the General Partner with a vote of a shareholders’
extraordinary general meeting; or
•
by judicial action that legitimate grounds exist for such removal, as provided by applicable law, upon a final
and binding court judgment, that may not be appealed, by competent jurisdiction.
C
The Gérant’s Chief Executive Officer
C.1
The Gérant is represented by Mr. Philippe Gas, Chief Executive Officer (“CEO”).
C.2
Mr. Gas does not receive any specific compensation for his corporate position as CEO of the Gérant. Mr. Gas is
employed by Walt Disney International France S.A.S., an indirect wholly owned subsidiary of TWDC. He does not
benefit from any complementary defined benefit retirement program and is not entitled to any severance payment
as a result of the beginning or termination of this corporate position and does not have any non-competition
indemnity. As a member of the Management Committee (for further information on this committee, see
section B.2. “Group and Parent Company Management Report”, sub-section “Management of the Group in
Fiscal Year 2011”), Mr. Gas is required to hold a minimum of 250 shares of the Company for the duration of his
membership.
C.3
C.4
C.5
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C
The compensation and other benefits provided to Mr. Gas are detailed in the following tables1.
Summary table of the Gérant’s CEO compensation, stock option and share allocations
Fiscal Year
(in €)
2011
2010
Compensation due for the Fiscal Year
623,435
705,052
Value of TWDC stock options granted during the Fiscal Year
252,406
207,663
Value of TWDC restricted stock units granted during the Fiscal Year
Total
401,115
300,750
1,276,956
1,213,465
Each line of the table above is detailed in the following tables.
Summary table of the Gérant’s CEO compensation
Fiscal Year
2011
(in €)
2010
due
paid
due
paid
Fixed compensation
379,673
379,673
373,406
373,406
Variable compensation(1) - in euros
225,804
321,968
321,968
258,129
325,000
410,000
410,000
350,000
-
-
-
-
Variable compensation(1) - in USD (for information)
Extraordinary compensation
Director’s fee
Fringe benefits
Total
(1)
(2)
17,958
623,435
45,419(2)
747,060
-
-
9,678
9,678
705,052
641,213
Variable compensation is composed of a discretionary annual bonus determined in US dollars under TWDC’s company policy, and based
on Mr. Gas’ individual performance in relation to the objectives of the Group and of the TWDC’s Parks & Resorts operating segment. Variable
compensation paid during a given Fiscal Year relates to the previous Fiscal Year performance as this amount is finalized after the closing of the
Fiscal Year.
Fringe benefits paid in Fiscal Year 2011 included € 27,461 due with regards to Fiscal Year 2008.
Stock options granted during Fiscal Year 2011 to the Gérant’s CEO
The following table details information on TWDC stock options granted to the Gérant’s CEO during Fiscal
Year 2011:
TWDC stock options
Date of the plan
Number of options
Option exercise price
Expiration date
Value of the options (in €)(1)
(1)
2005
31,480
USD 39.65
25% on January 26, 2012
25% on January 26, 2013
25% on January 26, 2014
25% on January 26, 2015
January 26, 2021
252,406
Based on the USD/EUR exchange rate at the date of attribution.
No Euro Disney stock options have been granted to the Gérant’s CEO during the Fiscal Year.
1
140
These tables were drawn up pursuant to the Association française des entreprises privées (“AFEP”) / Mouvement des entreprises de France (“MEDEF”)
corporate governance code of April 2010.
Stock options exercised during Fiscal Year 2011 by the Gérant’s CEO
The following table details information on TWDC stock options exercised by the Gérant’s CEO during Fiscal
Year 2011.
Grant date
Number of options
Option exercise price (in USD)
January 13, 2010
8,000
31.12
January 14, 2009
18,000
20.81
January 9, 2008
14,842
29.90
January 10, 2007
16,000
34.27
January 9, 2006
8,400
24.87
January 3, 2005
10,000
28.04
January 22, 2004
6,000
24.64
January 24, 2003
9,000
17.14
January 28, 2002
20,500
22.20
February 5, 2001
13,000
30.23
No Euro Disney stock options have been exercised by the Gérant’s CEO during Fiscal Year 2011.
Restricted stock units granted during Fiscal Year 2011 to the Gérant’s CEO
The following table details information on TWDC restricted stock units granted to the Gérant’s CEO during Fiscal
Year 2011:
TWDC shares - time vesting
Date of the plan
2005
Number of shares
13,841
Grant date
January 26, 2011
25% on January 26, 2012
25% on January 26, 2013
25% on January 26, 2014
25% on January 26, 2015
Date available
Value of the shares (in €)(1)
(1)
401,115
Based on the USD/EUR exchange rate at the date of attribution
C
No Euro Disney restricted stock units were granted to the Gérant’s CEO during Fiscal Year 2011.
Restricted stock units that vested during Fiscal Year 2011 for the Gérant’s CEO
The following table details information on TWDC restricted stock units that have vested for the Gérant’s CEO during
Fiscal Year 2011:
TWDC shares - time vesting
C.1
C.2
TWDC shares - performance vesting
Date of the plan
2005
2005
Number of shares
7,434
5,793
C.3
C.4
The list of Mr. Gas’s “mandats sociaux” and positions held in French and/or foreign companies is available in
section B.2. “Group and Parent Company Management report”, sub-section “Management of the Group in Fiscal
Year 2011”.
C.5
141
C
The Group has a Management Committee which is composed of the CEO’s direct reports. The Management
Committee composition, the aggregate compensation paid to its members, the total amount of shares they own and
the total number of stock options that have been granted to them by the Company are presented in
section B.2. “Group and Parent Company Management report”, sub-section “Management of the Group in
Fiscal Year 2011”. The Gérant, its Chief Executive Officer and the Management Committee do not receive any
additional pension plans, retirement plans or other advantages, other than those provided to all employees and
disclosed above and in section B.2. “Group and Parent Company Management report”, sub-section “Management of
the Group in Fiscal Year 2011”.
The Supervisory Board
The description and role of the Supervisory Board and its special-purpose committees are presented in the report of
the Chairman of the Supervisory Board on the organization and role of the Supervisory Board and on the
Company’s internal control organization and procedures (see section C.1.3. “Report of the Chairman of the
Supervisory Board on the Organization and Role of the Supervisory Board and on the Company’s Internal Control
Organization and Procedures” hereunder).
The Supervisory Board’s composition, nominative compensation paid to its members and amount of shares they
own are presented in section B.2. “Group and Parent Company Management report”, sub-section “Management of
the Group in Fiscal Year 2011”. The members of the Supervisory Board do not receive any pension plans, retirement
plans or other advantages, other than those disclosed in section B.2. “Group and Parent Company Management
report”, sub-section “Management of the Group in Fiscal Year 2011”.
C.1.3.
Report of the Chairman of the Supervisory Board on the Organization and Role of the
Supervisory Board and on the Company’s Internal Control Organization and Procedures
Ladies and gentlemen,
Pursuant to Article L. 226-10-1 of the French Commercial Code (“Code de Commerce”), and in my capacity as
Chairman of the Euro Disney S.C.A. (the “Company”) Supervisory Board (the “Board”), I am pleased to present this
report, as approved by the Board on November 8, 2011 for fiscal year 2011 (the “Fiscal Year”). Included in this
report are descriptions of the (i) Board’s organization and operations, (ii) internal control and risk managements
procedures set up by the Company, its owned and controlled subsidiaries and the consolidated special-purpose
financing companies (together the “Group”), (iii) corporate governance procedures, and (iv) terms and conditions
related to shareholders’ attendance at the Company’s shareholders’ general meeting for the Fiscal Year.
1)
Organization of the Board
The organization, the role, the obligations as well as the Board’s duties are governed by Articles L. 226-4 and seq. of
the French Commercial Code (“Code de Commerce”) and Article 6 of the Company’s bylaws.
Board Organization
The members of the Company’s Board are elected at the annual shareholders’ general meeting. The Company’s
general partner is not allowed to vote in this election. In the event of a vacancy resulting from the death, legal
incapacity or resignation of any member of the Board, the Board, with the prior approval of Euro Disney S.A.S.
(the “Gérant”), may temporarily fill the vacancy with a new member who shall serve for the remainder of the term of
the former member. Any temporary appointment so made by the Board must be ratified at the next shareholders’
ordinary general meeting.
The Board must comprise a minimum of three members.
As set by the bylaws, the Board members are elected for a term of three years and can be re-elected.
142
The Board currently consists of ten members. In conformity with the applicable law and regulations, detailed
information on the members of the Board (such as their age, the list of their positions and directorships held, the
number of shares held and their compensation) is available in the Group and parent company management report
for the Fiscal Year (the “Management Report”).
The Board determines the rules constituting a member’s independence, based on the recommendations in force
(as described in the sub-section “Independence of the Board members”).
The Board pays attention to the diversity and the gender parity of its members (see sub-section “Diversity and Parity”
below).
A Nominations Committee assists the Board in searching for and selecting new Board members (see sub-section
“Nominations Committee” below).
Board Role and Obligations
The role of the Board is to monitor the general affairs and the management of the Company, in the best interest of
both the Company and the shareholders, as well as to monitor the transparency and quality of the information
communicated to shareholders. For this purpose, the Board is entitled to receive the same information and has the
same rights of access to internal information and documents as do the statutory auditors of the Company. The
Board must present at the annual shareholders’ general meeting a report indicating any irregularities or
inaccuracies, if any, in the annual accounts.
The Board must approve all agreements between the Gérant and the Company, as well as all related party contracts
within the meaning of Article L. 226-10 of the French Commercial Code (“Code de Commerce”) and any amendments
thereto, and must report on such agreements, contracts and amendments at the next shareholders’ general
meeting. In addition, the Company’s bylaws also provide for Board approval covering material agreements or
amendments thereto on behalf of the Company with The Walt Disney Company (“TWDC”) or any subsidiary
thereof. The bylaws of the Company also provide that the management and employees of the Gérant, or of any
affiliated companies of the Gérant, who are also members of the Board cannot vote on such agreements or any
amendments thereto.
The Board may call a shareholders’ ordinary or extraordinary general meeting at any time after providing written
notice to the Gérant and complying with all notice formalities prescribed by law.
Finally, the Board must prepare a report on any capital increase and any capital reduction proposed by the Gérant to
the shareholders’ general meetings.
Board Meetings
The Board may be convened as frequently as necessary for any purpose related to the Company’s interests, either by
the Chairman of the Board, the Gérant, the Company’s general partner or one-half of the Board members.
A valid action by the Board requires the vote of a majority of its members present who are entitled to vote, or by the
vote of two members if only two members are present, provided that at least half of the members are present. With
ten current Board members this implies that at a minimum five members must be present for a valid action. In the
event of a tie, the Chairman of the Board has the deciding vote.
The Board met four times during the Fiscal Year with an attendance rate of 84%. At these meetings the Board
received various presentations from Management on the Group’s earnings, strategy and operations as well as
outlook.
C
C.1
C.2
C.3
C.4
C.5
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C
Special-Purpose Committees
During its meetings of November 12, 1997 and November 8, 2002 respectively, the Board decided to implement
special-purpose committees’ and has created the financial accounts committee (the “FAC”) and the nominations
committee, referred to as the “Committees”.
Each Committee is governed by internal regulations (see sub-section “Internal Regulations of the Special-Purpose
Committees” below).
Detailed information on the Committee members is available in the Management Report.
Financial Accounts Committee
Pursuant to Article L. 823-19 of the French Commercial Code1, all listed companies must have an audit committee
(or FAC) acting under the exclusive and collective supervision of the members of the Supervisory Board. The FAC’s
internal regulations were adopted by the Board during its meeting of November 7, 2007 and amended during its
meeting of February 21, 2008. The FAC regulations comply with the French commercial code (“Code de Commerce”)
and with the Autorité des marchés financiers (“AMF”) report on audit committees dated July 22, 2010, as well as the
French Management Institute recommendations (see sub-section “Internal Regulations of the Special-Purpose
Committees” below).
The FAC is composed of three Board members. FAC meetings are attended by these committee members,
representatives from the Company’s financial, legal and internal audit functions, as well as the statutory auditors.
If the FAC comprises three members or more, the proportion of independent members shall equal at least
two-thirds.
FAC members are required to collectively have a thorough expertise of and/or an experience in financial,
accounting or tax matters, which is relevant in comparison with the Group’s activities. The Board appointed
Mr. Philippe Geslin, currently Chairman of the FAC, as its financial expert.
The FAC assists the Board in the review of financial and risk management information prior to public disclosure
and in particular the following:
•
quarterly financial information;
•
significant accounting principles, methods or issues and related disclosures;
•
internal control procedures and internal and external audit functions;
•
financial and liquidity risk management; and
•
in assisting the Board in preparing its annual reports to the Company’s shareholders.
The FAC also assists the Board in reviewing the Company’s compliance with:
•
the rules on the independence and objectivity of statutory auditors. It reviews proposals for their appointment
or renewal and their fees. The FAC also review their audit plans, conclusions, recommendations and any
follow-ups thereon;
•
applicable stock exchange regulations.
For the conduct of its mission and within the limit of its role, the FAC may request and collect any appropriate or
useful information from the Chief Financial Officer, the Chief Accounting Officer, the General Counsel and/or the
Director of Management Audit.
The FAC meetings give rise to minutes and the chairman of the FAC reports to the Board on the FAC activities
through a summary of its deliberations at the next meeting of the Board.
The FAC met six times in the Fiscal Year, with an attendance rate of 83%.
Nominations Committee
The Nominations Committee is comprised of two members chosen within the Board. Its role is to assist the Board in
searching for and selecting new Board members.
1
144
Following the implementation of the EU Directive of May 17, 2006 on annual and consolidated accounts.
During the Fiscal Year, the Nominations Committee reviewed and gave recommendations for the designation of
new Board members. The Committee proposed Mrs. Virginie Calmels’ as a Supervisory Board candidate and she was
appointed as a member during the Company’s annual general meeting of the shareholders dated March 4, 2011.
2)
Company’s Internal Control Organization and Relevant Procedures
The Company’s internal control organization and procedures as well as the results of any findings are presented to
the FAC.
The Group adheres to the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”)’s
definition of internal control. The COSO, a U.S. private sector organization formed in 1985, has issued guidance on
internal controls, which was first published in France in 1992. The COSO’s framework is consistent with the AMF’s
reference framework.
This framework serves as the reference for the Group’s internal control processes (the “Processes”). It aims at
providing reasonable assurance that the following objectives are achieved: optimal functioning of internal controls,
reliability of the financial information, compliance with current laws and regulations and safeguarding of the
Group’s assets.
In achieving the above objectives, the Processes have been designed to reduce and manage the risks inherent to the
Group’s business to acceptable levels and to prevent errors or fraud, including the areas concerned with the
safeguarding of assets and in the financial and accounting functions. However, as with any control system, there are
limitations and as such the Group’s internal control system cannot provide a 100% guarantee that these risks will be
eliminated.
The risk factors applicable to the Group are presented in the Management Report.
Risk Assessment and Risk Control Policy
The Group has risk identification process in place covering both financial and non-financial risks that may impact
the Group. This process is based on a mapping of risks to their corresponding controls. In this process, risks are
evaluated according to their potential financial impact on the Group and their likelihood of occurring.
This risk assessment forms the basis of the internal audit annual assignment program. Strategic risks are more
specifically addressed by the Group’s strategic planning department. Environmental and safety risks are evaluated in
further detail by the Group’s safety department. Risks related to financial statements processing and production are
more specifically addressed by the internal audit and by the team in charge of compliance with the Sarbanes Oxley
Act of 2002 (“SOX”, see sub-section “French Financial Security Law and SOX compliance” below).
The Group has implemented a business continuity plan. A business continuity plan is a set of policies and
procedures that the Group could implement to address certain risks that it faces, including global health risks,
industrial or environmental risks, and to maintain its operations in the context of a significant disruption.
C
Group Organization and Internal Control Management
C.1
Group Organization
The Group’s activities and Management are located in Marne-la-Vallée, France. The Group is divided into two
principal operating segments (Resort and Real Estate development) and its Management reflects this division. The
operating segments of the Group are further divided into reporting units, each with a dedicated executive.
C.2
C.3
Furthermore, general administrative divisions, including finance, legal, human resources and information
technology in addition to marketing and sales each have their own dedicated executive.
C.4
Management defines and guides the Group’s strategy. It sets priorities through objectives by operating segment and
division. The Group devotes significant resources to the monitoring of compliance with the Processes.
C.5
145
C
Internal Control Management
The departments or functions with primary responsibility for internal control management are the following: the
internal audit; the finance support operations department, the business planning department; and the corporate
controllership department.
•
The Group’s internal audit undertakes specific financial and non-financial audit assignments to ensure that
the Processes are operating effectively and efficiently and, amongst other objectives, in order to detect
potential fraud. Ernst & Young assists the Group in performing specific internal audit assignments when the
internal audit function does not have the required technical expertise. The Group’s FAC reviews and
approves the internal audit annual assignment program and is informed of the conclusions and
recommendations issued as part of these audit assignments (see sub-section “Financial Accounts Committee”
above).
•
The finance support operations department is responsible for monitoring the daily compliance with the
Group’s operational procedures to control transactions at all points of sale and the safeguarding of cash and
inventory at the Resort. In addition, it is in charge of the safeguarding and control of theme parks ticket stock,
coupons and vouchers used by guests.
•
The business planning department is responsible for, amongst other things, the establishment of the annual
budget and monthly forecasts and coordination of the five-year plan together with the strategic planning
department. Objectives are set annually by Management as part of the budgetary process. Business planning is
responsible for compiling the budget by profit and cost center, monitoring variances between actual figures
and budgets on a monthly basis and issuing a revised forecast based upon this analysis. The department also
reviews contracts and investment decisions, and prepares analyses to support certain periodic adjustments to
the accounts for accruals and other items.
•
The corporate controllership department is responsible for centralizing the Group’s documentation and
annual evaluation of financial and accounting internal controls. It also serves as the Group’s technical support
for IFRS1 interpretations and reviews contracts to ascertain their accounting and disclosure implications. This
activity also enables the Group to ensure that it complies with the provisions of the Sarbanes-Oxley Act
compliance program (see sub-section “French Financial Security Law and SOX compliance” below).
Internal Control Procedures
A certain number of procedures have been implemented to achieve the Group’s internal control objectives.
Code of Business Conduct
The Chief Executive Officer of the Gérant and the Chief Financial Officer are subject to the standards of business
conduct set up by TWDC. These standards include guidelines on both ethical and legal business conduct. A copy of
this document can be found on the TWDC website at http://corporate.disney.go.com/.
The Group formalized a Code of Business Conduct (the “Code”), which was made available to all employees on
October 1, 2007. This Code draws its inspiration from the Group’s fundamental values of integrity, honesty, trust,
respect, fair play and teamwork. This Code is intended to serve as a reference for the business practices of each
employee of the Group and consists of a list of ethical standards as well as a reminder of the applicable legal
standards in France. It lists a certain number of fundamental principles concerning the Group’s relations with its
guests, with its employees, with its shareholders, with its partners, suppliers or sub-contractors and with the
community at large. This Code was prepared under the recommendations of the French Commission Nationale de
l’Informatique et des Libertés and in conjunction with the usual consultation process of the employees’ representatives.
1
146
The term “IFRS” refers collectively to International Accounting Standards (“IAS”), International Financial Reporting Standards (“IFRS”),
Standing Interpretations Committee (“SIC”) interpretations and International Financial Reporting Interpretations Committee (“IFRIC”)
interpretations issued by the International Accounting Standards Board (“IASB”).
French Financial Security Law and SOX compliance
In compliance with the French Financial Security Law (“Loi de Sécurité Financière”, the “LSF”) and SOX, the Group
implemented certain processes. The processes are designed to reinforce the quality of the financial statement
preparation process. In addition, the processes are reviewed and tested by the Group each year to ensure that they
are operating effectively and as designed. Deloitte assists the Group in documenting and testing these processes.
The Group, as a consolidated subsidiary of TWDC, must comply with the provisions of SOX compliance program.
Internal Control Procedures Concerning Accounting and Financial Information Processing and
Production
Organization of the Finance Function
The Group prepares its consolidated financial statements under IFRS, as endorsed by the European Union. The
Group also prepares its consolidated financial reporting under generally accepted accounting principles in the
United States for the purpose of consolidation specific to TWDC. Finally, the statutory accounts of each entity are
prepared under French generally accepted accounted principles.
The corporate controllership department, within the Group’s finance division, in addition to internal audit and
finance support functions described above, includes separate departments dedicated to the preparation and review
of external financial press releases, internal and external financial reporting, corporate accounting and
transactional accounting. This department, together with the legal department, ensures that changes in laws and
rules applicable to financial reporting are evaluated and implemented as required.
The Group’s financial and operational reporting systems allow Management to monitor the activities on a daily,
weekly, monthly, quarterly and annual basis in comparison to the budget and prior year amounts. For certain types
of operational information, Management has access to real time data.
Financial Disclosure Internal Control Procedures
The Company is required to disclose financial information to its shareholders and, more generally, to the financial
markets and the public. Management is responsible for the publication of fair and reliable financial and accounting
information. The corporate controllership department implements control procedures to comply with these
obligations.
All financial communications are drafted by the corporate controllership department of the finance division after
reviewing the applicable rules or regulations related to specific document filings or disclosure. Financial
communication documents, including press releases, management reports and financial statements are reviewed by
a cross-section of Management including the Chief Executive Officer, Chief Financial Officer, Chief Accounting
Officer, Internal Legal Counsel and the Investor Relations and Corporate Communications departments and also by
the FAC (see “Financial Accounts Committee” above).
Compliance of the Processes Impacting the Reliability of Financial Information
C
For a discussion of LSF and SOX compliance, refer to the sub-section “French Financial Security Law and SOX
compliance” above.
C.1
C.2
3)
Corporate Governance Information
C.3
Legal Structure of the Company
The Company is a French limited partnership (“société en commandite par actions”). This legal structure provides for a
clear distinction of responsibilities between the Gérant and the Board.
C.4
C.5
The Gérant is responsible for managing and directing the Company.
147
C
The Board is responsible for monitoring general affairs of the Company in its best interests and in those of its
shareholders; as well as reviewing transparency and quality of the information communicated to the shareholders
(refer to the sub-section “Board Missions and Obligations” above).
The other two major elements of the Company’s legal structure are the general partner and the limited partners (or
shareholders).
An extensive description of these different components is available in section C.1.2. of the 2010 reference document
(the “Reference Document”)1.
Change in control of the Company
Any change in control of the Company would require a change in the composition of both above-mentioned
categories of partner. As the Company is listed on the stock exchange, it would be possible for a third party to take
control of the capital and associated voting rights through a public takeover bid. However, it would not be possible
for this third-party to take control of the general partner of the Company and consequently, this third-party could
not single-handedly modify the Company’s bylaws. In addition, it would not be possible for this third-party to
appoint a new gérant as the gérant must be appointed with the consent of the general partner.
Further details of those elements that are important to consider in the case of a public takeover bid are presented in
the Management Report and in sections C.1. and C.2.4. of the Reference Document.
Corporate Governance Procedures
Certain corporate governance procedures are included in the French Commercial Code (“Code de commerce”),
available on Internet: www.legifrance.gouv.fr, or in the AMF’s General Regulations (available on Internet:
www.amf-france.org). The Company is compliant with these procedures.
The Company also adheres to certain recommendations such as the 2010 AMF report on corporate governance and
internal control and the 2010 AMF report on audit committees (available on Internet: www.amf-france.org); the
AFEP/MEDEF corporate governance code of listed corporations, dated April 20, 20102 (available on Internet:
www.medef.com); the European Commission recommendation dated February 15, 2005 related to the role of
non-executive directors and Supervisory Board members (available on Internet: http://europa.eu); and more
generally stock market best practice, where applicable.
These recommendations have been issued for French corporations (“sociétés anonymes”). Since the Company is a
limited partnership (“société en commandite par actions”) it applies these recommendations to the extent that they can
be applied or be adapted in a relevant and practical manner.
The implementation of a compensation committee is an example of the main recommendations that, as of today,
have not been adapted given the legal structure of the Company, as described above. In fact, the Company informed
the Board during its meeting held on February 18, 2010 of a draft French bill pursuant to which the creation of a
compensation committee would become mandatory for all French listed corporations (“sociétés anonymes”), but not
for French limited partnerships (“société en commandite par actions”). The Board intends to review this issue once the
final scope and content of this requirement is defined.
During the fiscal year 2009, the Company decided to proceed with a self evaluation process for the Board as well as
an annual review of the independence of the Board members (see sub-sections “Independence of the Board
members” and “Evaluation of the Board’s works” below).
The Company informed the Board during its meeting held on February 11, 2009 that it will follow the
AFEP/MEDEF recommendations dated October 20083 not only for its Gérant but also for the CEO of the Gérant to
the extent that these recommendations can be applied to a société en commandite par actions, that has a management
company as gérant. The Company has also adapted the disclosure format for statutory management compensation to
comply with these recommendations.
1
2
3
148
The Group’s 2010 reference document that was registered with the AMF on January 28, 2011 under the number D.11-0041 and that is available
on the Company's website (http://corporate.disneylandparis.com) and the AMF website (www.amf-france.org).
Resulting from the consolidation of the AFEP/MEDEF report dated October 2003, the AFEP/MEDEF recommendations concerning the
compensation of executive directors of listed companies dated January 2007 and October 2008 and the AFEP/MEDEF recommendation
concerning the strengthening of women representation within the boards dated April 2010.
From now on, these recommendations are consolidated in the AFEP/MEDEF corporate governance code of listed corporations, dated
April 20, 2010.
Statutory Management Compensation
In compliance with applicable laws and regulations, detailed information of the Gérant and Board members’
compensation is available in the Management Report.
The Company’s Gérant is Euro Disney S.A.S., a French simplified corporation and is an indirect wholly-owned
subsidiary of TWDC. The Gérant’s compensation is defined under Article IV of the Company’s bylaws. In compliance
with applicable laws and regulations, any compensation other than the above mentioned, must be approved by the
shareholders’ general meeting and the general partner before being granted to the Gérant.
The Company also discloses the compensation and benefits allocated to the Chief Executive Officer of the Gérant,
which will be available in the 2011 reference document.
The Board members compensation is comprised of an aggregate fee approved by the shareholders at the
shareholders’ general meeting, in accordance with applicable laws and regulations and the Company’s bylaws.
The Board allocates this aggregate fee to its members by way of a variable fee (“jeton de présence”) based on
attendance at four meetings per Fiscal Year. A double jeton de présence is allocated to the Chairman of the Board and
no jeton de présence is allocated to the members representing TWDC.
The Company does not grant any stock-options to its Board members.
An additional jeton de présence is payable to the FAC members in proportion to their attendance to FAC meetings
within a limit of three meetings per Fiscal Year. No jeton de présence will be allocated to a FAC member if he/she is a
representative of TWDC. A higher jeton de présence is allocated to the Chairman of the FAC.
The members of the nominations committee do not receive any specific jeton de présence for their performance.
Detailed information on the compensation paid to each of the Board members is available in the Management
Report.
Board Members’ Charter
In accordance with the corporate governance principles for listed companies, the Board adopted a Supervisory
Board members charter (the “Charter”) during its September 23, 1996 meeting. This charter dictates the
fundamental duties of Board members. Several of the Charter’s procedures are more stringent than those required
by law or by the Company’s bylaws. For example the requirement for each Board member to own a minimum
number of shares is not governed by law or by the Company’s bylaws.
During its November 7, 2007 meeting, the Board modified its Charter in order to adjust the minimum number of
shares each member must individually own from 1,000 old shares to 250 new shares. This change was made within
the context of the Company’s reverse stock split that occurred on December 3, 2007 and to comply with prevailing
market practices.
Internal Regulations of the Special-Purpose Committees
During its November 7, 2007 meeting, the Board adopted internal regulations for each of its Committees in order
to formalize and update their role, organization and operations.
These internal regulations are part of a transparency approach in conformity with listed companies’ corporate
governance principles as well as the French Management Institute (“Institut français des administrateurs”)
recommendations (available on Internet: www.ifa-asso.com).
C
C.1
C.2
These internal regulations also lay out rules for the Committees members’ independence and compensation as well
as the FAC members’ qualifications.
C.3
Background, diversity and gender parity
C.4
The Board members have, collectively a thorough expertise of and/or an international experience in the tourism
and leisure industry and financial services, which are relevant to the Group’s activities.
C.5
149
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The Company complies with the provisions of the French Law n°2011-103 of January 27, 2011 on balanced
representation of female and male on boards of directors and Supervisory Boards pursuant to which the proportion
of women has to reach a minimum of 20% as from January 1, 2014 and a minimum of 40% as from January 1, 2017.
The proportion of the Board members that are female is currently 20%.
Pursuant to Article L. 226-9-1 of the French Commercial Code (“Code de commerce”) resulting from the law above
mentioned, the Board deliberated on the Group’s policy regarding professional and wage equality during its
meeting of November 8, 2011 and noted that a culture of diversity deeply rooted in the Group and that a gender
equality stemming from the social dialogue.
Detailed information on the Board members (age, nationality, positions or functions held) is available in the
Management Report.
Independence of Board members
During its meeting held on February 11, 2009, the Board approved an annual review of the independence of Board
members.
Annually, each Board member is required to update the list of his/her corporate functions and positions held and
to send this list to the Secretary of the Board. This is required to occur prior to September 30. The independence of
the Board members is reviewed at the Board meeting for the fiscal year-end.
The Board reviewed the independence of its members during its meeting held on November 8, 2011. As indicated
in the Management Report, amongst the ten members’, part of the Board: Mrss. Bernis and Calmels and
Mrs. Jeancourt-Galignani, Bouché, Corbière, Labro and Robinson are considered independent. Mrs. Rasulo and
Staggs are senior executive officers of TWDC and Mr. Geslin is a non-voting director (“censeur”) of Crédit Agricole
CIB, which participated in the Group’s financing as lender and banks’ agent. In order to avoid any potential conflict
of interest or confidentiality situations, Mr. Geslin has undertaken to refrain from voting or discussing on any
matters which potentially could involve a conflict of interest.
Except as mentioned above, to the Board’s knowledge, no potential conflicts of interest exist between any duties of
the Board to the Group and their private interests and/or duties.
In light of the role of the Board as compared to a board of directors in French corporations (“sociétés anonymes”), the
very limited historical situations of conflict of interests involving Board members, and the level of scrutiny applied by
the Board, the Board members themselves and Management on potential conflict of interest situations, the Board
has concluded that the length of Board tenure was not per se a factor materially increasing the risk of potential
conflicts of interest between a Board member and the Company, thus the Board decided it is not a relevant criteria
in the determination of a Board member’s independence.
Evaluation of the Board
During its meeting held on November 9, 2010, the Board resolved that in light of market practice and the role of
the Board as compared to a board of directors in French corporations (sociétés anonymes), the self-evaluation of the
Board’s activities shall henceforth take place every three years.
The self-evaluation is carried out by the members of the Board themselves via a questionnaire on the following
items: composition and operation of the Board, role and mission of the Board, committees of the Board, and
relations with Management, the auditors and the shareholders.
The Secretary of the Board reviews the results of the questionnaire (received by mail in a personal and confidential
envelope) and transmits a summary to the Chairman of the Board. The Chairman of the Board then informs the
other members of the results of this self-evaluation during the Board’s meeting for the fiscal year-end.
According to the results of the self-evaluation of the Board’s activities during the fiscal year 2010 where all of the
Board members responded to the questionnaire, most of the Board members have indicated to be satisfied or very
satisfied, with the composition and operation of the Board, the role and attributions of the Board, the committees
of the Board, and their relationships with Management, external auditors and shareholders.
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Following this self-evaluation, the proposed steps for improvement were taken into consideration during the
Fiscal Year.
Information on the Management Committee
As an effort to improve its corporate governance process, the Company put into place a Management Committee,
comprised of the Chief Executive Officer’s direct reports, and created four committees:
•
the Steering Committee, which focuses on the management of the overall P&L and decision-making on strategic
issues;
•
the Operations Committee, which focuses on operational problem solving and quality, safety and cost
management;
•
the Revenue Committee, which focuses on marketing, sales and pricing problem-solving and on management of
our revenue across the core business;
•
the Development and External Affairs Committee, which focuses on the management of development projects and
of matters relating to external stakeholders.
The members of the Management Committee sit in one or several of these committees.
The Management Committee composition, the aggregate compensation paid to its members, the total amount of
shares they own and the total number of stock options that have been granted to its members by the Company are
disclosed in the Management Report.
As is the case for the members of the Board, the Management Committee members must individually own a
minimum of 250 shares of the Company.
4)
Terms and Conditions related to Shareholders’ Attendance at Shareholders’ General
Meeting
The terms and conditions related to shareholders’ attendance at general meetings are described in Article 8 of the
Company’s bylaws as well as in section C.1.1. of the Reference Document.
Chessy, November 24, 2011
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C.1.4. Statutory Auditors’ Report on the report prepared by the Chairman of the
Supervisory Board
This is a free translation into English of the statutory auditors’ report issued in the French language and is provided solely for
the convenience of English speaking readers. This report should be read in conjunction with, and construed in accordance with,
French law and professional auditing standards applicable in France.
63, Rue de Villiers
Caderas Martin
76, rue de Monceau
75008 Paris
STATUTORY AUDITORS’ REPORT,
PREPARED IN ACCORDANCE WITH ARTICLE L.226-10-1 OF THE FRENCH COMMERCIAL
CODE ON THE REPORT PREPARED BY THE CHAIRMAN OF THE SUPERVISORY BOARD OF
EURO DISNEY S.C.A.
Year ended September 30, 2011
To the Shareholders,
In our capacity as statutory auditors of Euro Disney S.C.A., and in accordance with article L.226-10-1 of the French
Commercial Code (Code de commerce), we hereby report to you on the report prepared by the Chairman of your company
in accordance with article L.226-10-1 of the French Commercial Code for the year ended September 30, 2011.
It is the Chairman’s responsibility to prepare, and submit to the Supervisory Board for approval, a report describing the
internal control and risk management procedures implemented by the company and providing the other information
required by article L.226-10-1 of the French Commercial Code in particular relating to corporate governance.
It is our responsibility:
•
to report to you on the information set out in the Chairman’s report on internal control and risk management
procedures relating to the preparation and processing of financial and accounting information, and
•
to attest that the report sets out the other information required by article L.226-10-1 of the French
Commercial Code, it being specified that it is not our responsibility to assess the fairness of this information.
We conducted our work in accordance with professional standards applicable in France.
Information concerning the internal control and risk management procedures relating to the
preparation and processing of financial and accounting information
The professional standards require that we perform procedures to assess the fairness of the information on internal
control and risk management procedures relating to the preparation and processing of financial and accounting
information set out in the Chairman’s report. These procedures mainly consisted of:
•
obtaining an understanding of the internal control and risk management procedures relating to the
preparation and processing of financial and accounting information on which the information presented in
the Chairman’s report is based, and of the existing documentation;
•
obtaining an understanding of the work performed to support the information given in the report and of the
existing documentation;
•
determining if any material weaknesses in the internal control procedures relating to the preparation and
processing of financial and accounting information that we may have identified in the course of our work are
properly described in the Chairman’s report.
On the basis of our work, we have no matters to report on the information given on internal control and risk management
procedures relating to the preparation and processing of financial and accounting information, set out in the Chairman of
the Supervisory Board’s report, prepared in accordance with article L.226-10-1 of the French Commercial Code.
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Other information
We attest that the Chairman’s report sets out the other information required by article L.226-10-1 of the French
Commercial Code.
Caderas Martin
Eric Bulle
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Information Concerning the Share Capital of the Company
C.2. INFORMATION CONCERNING THE SHARE CAPITAL OF THE COMPANY
C.2.1.
Amount and Changes to the Share Capital
As of September 30, 2011, and following the finalization of the share consolidation (the “Reverse Stock Split”
described in section C.2.2. “Reverse Stock Split”) on December 4, 2009, the Company’s fully paid share capital was
composed of 38,976,490 shares with a nominal value of € 1.00 each.
As of September 30, 2009, and from December 3, 2007, the Company’s fully paid share capital was composed of
38,976,490 shares with a nominal value of € 1.00 each and of 46 shares with a nominal value of € 0.01 each.
C.2.2.
Reverse Stock Split
At the annual shareholders’ general meeting held on February 21, 2007, shareholders of the Company approved a
resolution giving the Gérant the power to implement a proposed Reverse Stock Split through the attribution of one
new share with a nominal value of € 1.00 for 100 old shares with a nominal value of € 0.01 (meaning a consolidation
ratio of 100:1).
The Reverse Stock Split was implemented on December 3, 2007. Shareholders had two years after that date to
consolidate their shares. Each shareholder holding allotments of shares not divisible by 100 (fractional shares) was
responsible for purchasing the necessary number of shares in order to complete the consolidation or to sell his/her
fractional shares until December 4, 2009. Starting December 7, 2009, 67,038 shares that remained unclaimed were
sold on the stock exchange and the net proceeds of the sale remains available to shareholders in an escrow account
opened with BNP Paribas Securities Services for a period of ten years. After this period, the net proceeds of the sale
will be transferred from BNP Paribas Securities Services to the Caisse des dépôts et consignations and will remain
available to shareholders for an additional period of twenty years, after which all unclaimed proceeds will be
transferred to the French State, in accordance with law.
C.2.3.
Liquidity Contracts
In accordance with the authorizations granted by the shareholders’ general meetings of the Company for the past
three Fiscal Years, the Gérant has carried out share buyback programs since Fiscal Year 2008 through independent
investment services providers acting under consecutive liquidity contracts, in compliance with the governance
standards established by the French association of financial markets (Association française des marchés financiers) as
approved by the French stock exchange authority (Autorité des marchés financiers).
The shareholders’ general meeting of the Company held on March 4, 2011 extended the share repurchase program
term from September 17, 2011 to September 4, 2012.
The liquidity contract in place was signed with Oddo Corporate Finance on April 2, 2009 and has been renewed for
a period of one year beginning April 1, 2010, with subsequent automatic annual renewals unless either party cancels
the contract (subject to the extension of the share repurchase program). For additional information on the current
share buyback program, as well as the liquidity contract and its renewal, see the notice published on April 2, 2009
and the press releases published on April 2, 2009, April 1, 2010 and April 7, 2011, which are available on the
Company’s website (http://corporate.disneylandparis.com).
Under the existing share repurchase program, the Company cannot buy back more than 10% of the total number
of shares which make up its share capital, and the Company cannot purchase shares at prices higher than € 20 per
share. An amount of € 0.5 million in cash and 135,081 treasury shares were allocated to the liquidity account for
purpose of implementing this contract on April 6, 2009. As of September 30, 2011, the Company owns
144,930 treasury shares acquired through the current liquidity contract at a combined acquisition cost of
€ 0.7 million and has € 0.4 million in cash allotted to the liquidity account. (See section B.3. “Consolidated Financial
Statements”, note 10.2 “Liquidity Contract” for further information).
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C.2.4.
Breakdown of the Share Capital and Voting Rights
Shareholders’ Background and History
Shareholders’ Agreements and Evolution
Prior to the 1994 Financial Restructuring, TWDC, through its subsidiary EDL Holding Company, held 49.0% of the
Company’s share capital. During the 1994 Financial Restructuring, TWDC undertook to hold at least 16.7% of the
Company’s share capital until 2016. In connection with the financing agreements related to the Walt Disney
Studios® Park signed in 1999, TWDC further undertook to hold this minimum ownership until October 30, 2027.
In addition and also during the 1994 Financial Restructuring, TWDC and the Lenders entered into certain
agreements whereby HRH Prince Alwaleed subscribed shares from the Company and purchased others from the
CDC and EDL Holding Company, in order to own a 24.0% stake in the Company. HRH Prince Alwaleed undertook
vis-à-vis TWDC to reduce his stake to less than half the stake held by EDL Holding Company (i.e. 39% of the
Company’s share capital).
TWDC’s holding of the Company’s shares increased in 2004 from 39.0% to 40.6% after the reimbursement in
shares of convertible bonds granted during the 1994 Financial Restructuring.
By virtue of the 2005 Restructuring capital increase, TWDC reduced its ownership of the Company to 39.8% and
HRH Prince Alwaleed’s interest in the Company was reduced to 10.0%. In connection with the 2005 Restructuring,
TWDC agreed to hold directly or indirectly at least 39.0% of the Company’s common stock until
December 31, 2016.
As of September 30, 2011, EDL Holding Company LLC’s interest in the Company was 39.8% while HRH Prince
Alwaleed’s interest in the Company was 10.0% of the Company’s share capital. For additional information, see
sub-section “Shareholding Composition” hereafter.
Shareholders’ Identification
In addition to the laws and regulations relating to shareholding threshold disclosure, any individual or legal entity
that acquires 2% of the Company’s share capital, or any multiple thereof, must notify the Company, pursuant to its
bylaws, of the total number of shares held, by registered letter, return receipt requested, addressed to the
Company’s registered office, within five trading days of attaining any of these thresholds. Failure to respect this
requirement under the bylaws can result in those shares exceeding the percentage that should have been subject to
a notification being deprived of voting rights for a period of two years. This deprivation can be applied at the
request of one or more shareholders holding at least 2% of the Company’s share capital as recorded in the minutes
of a shareholders’ general meeting.
This above notification requirement, which was written into the Company’s bylaws pursuant to the shareholders’
general meeting held on September 4, 1989, also applies each time that a shareholder’s holding falls below any of
these percentage thresholds.
The Company has access annually to the procedure known as “Titres au Porteur Identifiable” of Euroclear France to
obtain information relating to the identity of its shareholders. The last request, dated September 30, 2011, revealed
that there were approximately 62,396 shareholders residing in France compared to approximately 68,870 and
75,185 as of September 30, 2010 and 2009, respectively.
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Shareholding Composition
The breakdown of the Company’s share capital and voting rights as of September 30 of the last three Fiscal Years is
as follows:
Shareholders
Number of shares
(in thousands)
2011
2010
2009
15,504
39.8%
39.8%
39.8%
3,898
10.0%
10.0%
10.0%
Public
19,574(2)
50.2%
50.2%
50.2%
Total
38,976
100.0%
100.0%
100.0%
EDL Holding Company LLC
HRH Prince Alwaleed(1)
(1)
(2)
HRH Prince Alwaleed’s interests in the Company are held through companies owned by the Kingdom Holding Company group (trusts for his
benefits and the benefits of his family). As of September 30, 2011, these companies were Kingdom 5-KR-134, Ltd and Kingdom 5-KR-11, Ltd,
holding 7.9% and 2.1% of the Company’s share capital, respectively. On December 5, 2011, 826,615 shares owned by Kingdom 5-KR-11, ltd were
transferred to Kingdom 5-KR-134, Ltd, which now owns all of HRH Prince Alwaleed’s shares (i.e. 3,897,649 shares representing 10% of the share
capital).
As of September 30, 2011, this number included treasury shares held by the Company, which represented 0.4% of the Company’s share capital
and had no significant impact on the percentage of voting rights.
As of September 30, 2011, to the knowledge of the Company, and other than those indicated in the table above,
two shareholders held more than 2% of the Company’s share capital: Global Asset Management (“GAM”) London
Ltd and Invesco Asset Management Ltd, managed by subsidiaries of Invesco Ltd, held 2.73% and 2.97% of the
Company’s share capital, respectively. The Company does not own or control any of its shares except those treasury
shares owned through the liquidity contract (see section C.2.3. “Liquidity Contracts” for more details). The
Company does not know the aggregate number of shares held by its employees directly or through special mutual
funds.
In accordance with French law, each shareholder participating in the shareholders’ general meetings is entitled to
as many votes as the number of shares which he or she holds or represents on the third business day prior to the
date of the shareholders’ general meeting. No shares confer double voting rights.
As of September 30, 2011, to the Company’s knowledge, the aggregate number of Company shares held by
members of the Supervisory Board and the Gérant’s Management Committee was 41,226 shares for the same amount
of voting rights.
To the Company’s knowledge, the breakdown of the share capital as indicated in the table above has not changed
significantly since September 30, 2011.
Rights Associated with Shares
Any person owning one or more shares shall be bound by the Company’s bylaws and by all decisions made in
accordance with these bylaws at any annual shareholders’ general meeting.
In addition to voting rights, each share represents an interest in the net equity of the Company that is proportional
to the portion of the Company’s share capital represented by the nominal value of such share.
Pledge of Registered Shares
As of September 30, 2011, there is no pledge of the Company’s registered shares recorded in its shareholders’
accounts.
Shareholders’ Club
Established in 1995, the Company’s Shareholders Club (the “Club”) aims at strengthening the Company’s
relationship with its shareholders, by providing regular and quality information. The Club aims to provide clear
information to all shareholders’ questions via phone, mail or its website.
156
As Club members, shareholders are directly informed, by mail or e-mail, of all financial press releases and
shareholders’ meetings. In addition, regular e-newsletters provide up-to-date information on the Company and its
financial performance as well as the latest Resort and Club news.
The Club also proposes several services and privileges to members, such as discounts or reduced rates for Club
members and their guests as well as special offers or invitations to special events.
The Club can be contacted via a toll-free number: 00 800 64 74 56 301 or by e-mail: eurodisney@clubactionnaires.com.
Further information can be found on the Company’s website at: http://corporate.disneylandparis.com.
C.2.5.
Markets for the Securities of the Company
The Company’s shares were listed in 1989 on the Premier Marché of Euronext Paris, on the London Stock Exchange
(where they were traded in pounds sterling in the form of depository receipts) and on Euronext Brussels. In
addition, options on the Company’s shares were traded on the Marché des Options Négociables de Paris. In 1994, the
Company registered as a foreign private issuer with the Securities and Exchange Commission (“SEC”) in the United
States.
Market trends and changes in the regulatory environment facilitating access for investors to trade in shares listed in
European Union member states other than their own, combined with the high cost of maintaining separate listings
relative to historical trading volumes, led to the Company’s decision to cancel its share listings on the Euronext
Brussels Exchange and the London Stock Exchange. These delistings were effective on September 30, 2005 and
October 31, 2005, respectively. The Company’s shares are now traded exclusively on Euronext Paris.
In Fiscal Year 2006, the Euronext Paris commission announced that Euro Disney shares no longer qualified for
inclusion in the SBF 120, and that effective March 28, 2006 no longer qualified for the deferred settlement services
of Euronext Paris. On December 18, 2006, the Company’s shares were included in the CAC SMALL 90 index of
Euronext Paris. They were previously included in the CAC MID 100 index. Following the reorganization of
Euronext Paris indices in Fiscal Year 2011, the Company’s shares are now included in the CAC MID & SMALL®,
CAC SMALL® and CAC ALL-TRADABLE®.
On June 5, 2007, the Company announced that it filed a notice to terminate its registration as a foreign private
issuer with the SEC in the United States. On September 3, 2007, the Company officially withdrew from the SEC
registration resulting in the termination of the Company’s reporting obligations under section 13(a) of the United
States Securities Exchange Act of 1934.
Since May 26, 2010, the Company’s shares are eligible to the “long-only” segment of the Deferred Settlement Service
(SRD “long-only”).
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From France, Germany, United Kingdom, Belgium, the Netherlands, Spain and Italy from a land line, national operators only. From other
countries, call at: + 33 1 64 74 56 30. Open Monday to Friday, from 9:00 a.m. to 5:00 p.m.
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C.2.6.
Market Information
Information relating to changes in the price and trading volume of the Company’s shares are given in the tables
below for the last 12 months.
Volume of shares traded in Euronext Paris (by month)
Share price (in €)
Highest
Lowest
Amount
(€ in million)
Number of
shares
October 2010
4.37
4.10
2.19
519,559
November 2010
4.74
3.91
3.92
920,923
December 2010
4.29
3.93
2.77
667,993
January 2011
4.50
4.04
2.85
659,644
February 2011
10.89
4.35
170.55
20,007,311
March 2011
9.27
6.35
43.76
5,463,975
April 2011
9.22
7.55
25.55
2,983,223
May 2011
9.65
7.96
18.18
2,028,370
June 2011
8.39
6.75
10.96
1,445,608
July 2011
8.36
6.60
11.03
1,454,087
August 2011
7.26
4.66
17.25
3,013,580
September 2011
6.05
4.11
9.41
1,888,612
Fiscal Year 2011
Source: Euronext Paris.
C.2.7.
Dividends
No dividends were declared or paid in respect of Fiscal Years 1993 through 2011. Additionally, certain of the
Group’s debt agreements would delay the timing of dividend distributions from the Company.
For more information, see section C.1.1. “The Company”, sub-section “Allocation of Profits Pursuant to the Bylaws”.
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Information Concerning the Group’s Financial Covenant Obligations
C.3. INFORMATION CONCERNING THE GROUP’S FINANCIAL COVENANT OBLIGATIONS
As described in section A.3. “History and Development of the Group”, the Group began negotiating
the 2005 Restructuring with the Lenders and TWDC in light of reduced revenues and increased losses incurred in
Fiscal Year 2003.
As a result of the 2005 Restructuring, the Group must respect certain financial covenant requirements and meet
minimum performance objectives as captured in the “Performance Indicator”, the measurement of which is
described hereunder.
C.3.1.
Performance Indicator
Subsequent to the 2005 Restructuring, certain of the Group’s financial obligations are affected by a financial
Performance Indicator for each Fiscal Year, which is approximately equal to the Group’s earnings before interest,
taxes, depreciation and amortization, adjusted for certain items described below. The Performance Indicator is used
to determine:
•
the amounts of royalties and management fees due to TWDC, in respect of each Fiscal Year, that are to be
converted to long-term subordinated debt instead of being paid; and
•
the amount of interest incurred on the Walt Disney Studios Park Loans, in respect of each Fiscal Year, that is
to be converted to long-term subordinated debt instead of being paid; and
•
the Group’s compliance with its financial covenant requirements.
In each case, the determination is made by comparing the actual Performance Indicator for a given Fiscal Year (the
“Actual Performance Indicator”) to a reference Performance Indicator for that year (the “Reference Performance
Indicator”). There are three separate Reference Performance Indicator amounts, one for each of the above matters.
The Reference Performance Indicators have been established solely for purposes of the contractual obligations and
do not reflect a prediction or forecast of the Group’s future operating performance.
The Actual Performance Indicator for a given Fiscal Year is equal to the Group’s consolidated net income/(loss)
attributable to equity holders of the parent, as reported in the consolidated audited financial statements for such
Fiscal Year, after restatement of the effect of the following:
•
income/(loss) allocated to minority interests as reported in the consolidated statement of income;
•
•
interest income/(expense) and taxes from affiliates accounted for under the equity method;
•
the net impact of all waivers of debt or commercial or financial payables, which may be granted by TWDC or
its subsidiaries;
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•
the net impact (positive or negative) of depreciation and movements in reserves on tangible, intangible assets
(including goodwill) and deferred charges as well as exceptional reserves and impairment charges on these
asset categories;
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•
the net impact (positive or negative) of movements in: (i) current asset reserves (for example, receivables and
inventories); (ii) provisions for risks and charges and (iii) provisions recorded in exceptional earnings;
•
operating expenses related to actual expenditures for major fixed asset renovations;
•
net gains and losses on the sale or abandonment of tangible or intangible assets;
•
financial income net of financial charges, excluding charges related to bank card commissions;
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•
royalties and management fees payable to TWDC expensed for such Fiscal Year;
•
the variable rent of the Disneyland® Park lease;
•
For Fiscal Year 2011 and the upcoming Fiscal Years, the Reference Performance Indicators are the following:
Reference Performance Indicator of Fiscal Year
(€ in millions)
2011
2012
2013
2014
340.6
352.7
365.8
380.6
315.6
327.7
340.8
355.6
DSCR & Forecast DSCR calculation(1)
295.4
307.5
318.1
332.9
(1)
See sub-section “Financial Covenant Requirements” below for more information.
Royalties and Management Fees Payment Deferral
As described in section A.3. “History and Development of the Group”, TWDC granted the Group unconditional and
conditional deferrals of the payment of base royalties and management fees due to TWDC as follows:
•
TWDC agreed to unconditionally defer and convert into long-term subordinated debt certain management
fees and, as necessary, royalties up to a maximum amount of € 25.0 million due with respect to each of Fiscal
Years 2005 through 2009. Royalties and management fees are otherwise due in December for amounts
incurred in the prior Fiscal Year. Deferred amounts that were converted into long-term subordinated debt
bear interest at 12-month Euribor, compounded annually. The principal will be repayable only after the
repayment of all Phase I Debt in Fiscal Year 2024 while interest will begin to be paid annually from
January 2017; and
•
TWDC agreed to conditionally defer and convert into long-term subordinated debt certain management fees
and, as necessary, royalties up to a maximum amount of € 25.0 million due with respect to each of Fiscal Years
2007 through 2014. Royalties and management fees are otherwise due in December for amounts incurred in
the prior Fiscal Year. The amount, if any, of the deferral depends on the Actual Performance Indicator
calculated for the relevant Fiscal Year. Deferred amounts that are converted into long-term subordinated debt
have the same interest and repayment terms as the unconditionally deferred amounts described above.
If the Actual Performance Indicator for a given Fiscal Year is less than the Reference Performance Indicator set
forth above for such Fiscal Year, then payment of the royalties and management fees otherwise due to TWDC
affiliates, in December following the end of this Fiscal Year, will be deferred by an amount equal to the excess of the
Reference Performance Indicator over the Actual Performance Indicator (see section B.3. “Consolidated financial
Statements”, note 16.1.1. “Royalties and Management Fees” for more details on deferred amounts).
From Fiscal Years 2005 through 2009, royalties and management fees for an amount of € 125.0 million were
deferred and converted into subordinated long-term debt reflecting TWDC’s unconditional deferrals for the
corresponding Fiscal Years. In addition, from Fiscal Years 2007 through 2010, royalties and management fees for an
amount of € 50.0 million were deferred and converted into subordinated long-term debt reflecting TWDC’s
conditional deferrals for Fiscal Years 2009 and 2010.
For Fiscal Year 2011, the Actual Performance Indicator was € 272 million, which was less than the Reference
Performance Indicator. Consequently, the Group has also deferred the payment of Fiscal Year 2011 management
fees and royalties, € 12.9 million and € 12.1 million, respectively. These amounts have been converted into longterm subordinated debt under the conditional deferral mechanism.
In addition, as part of the Group’s compliance with its financial covenants requirements (see below section
“Financial Covenant Requirements” for more details), TWDC has agreed to defer an additional € 8.9 million of
Fiscal Year 2011 royalties.
These deferrals were confirmed by an independent expert in December 2011.
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Walt Disney Studios Park Loans Interest Payment Deferral
A portion of the interest accrued for calendar years 2005 through 2014 under the Walt Disney Studios Park Loans is
subject to conditional deferral. The projected maximum amount of such conditional deferral is € 20.2 million
per year for calendar years 2005 through 2012, and € 22.7 million per year for calendar years 2013 and 2014.
If the Actual Performance Indicator is less than the Reference Performance Indicator set forth for a given Fiscal
Year, then the payment of the interest on the Walt Disney Studios Park Loans which is due on December 31
following the end of this Fiscal Year and which includes interest for the 12 preceding months is deferred in an
amount equal to the excess of the Reference Performance Indicator over the Actual Performance Indicator for such
Fiscal Year.
Interest payments of € 19.8 million, € 20.2 million, € 20.2 million and € 20.2 million originally payable in
December 2005, 2006, 2009 and 2010 were deferred and converted into a long-term subordinated debt obligation,
bearing interest at 5.15% per annum and repayable after the Phase I Debt has been repaid in full, starting in Fiscal
Year 2024. Interest on the long term debt is capitalized into long-term subordinated debt through January 1, 2017,
and is payable annually thereafter (see section B.3. “Consolidated Financial Statements”, note 12.1.2. “Walt Disney
Studios Park Loans” for more details on deferred amounts).
For Fiscal Year 2011, the Actual Performance Indicator was € 272 million, which was less than the Reference
Performance Indicator. Consequently, the Group expects to defer the payment of € 20.2 million of interest
originally payable as of December 31, 2011 for the CDC Walt Disney Studios Park Loans, of which € 15.1 million has
been converted into long-term subordinated debt as of September 30, 2011 under the conditional deferral
mechanism.
This conditional deferral was confirmed by an independent expert in December 2011.
Financial Covenant Requirements
The Group’s debt agreements also include covenants which primarily consist of the provision of certain financial
information, compliance with a financial ratio threshold and restrictions on capital expenditures and additional
indebtedness.
Financial Ratios
The Group is subject to a covenant based on the debt service coverage ratio (“DSCR”) and the forecasted debt
service coverage ratio (the “Forecast DSCR”). The DSCR is the ratio of the Group’s Performance Indicator for a
given Fiscal Year, less any royalties and management fees payable to TWDC that are not deferred, less the amount of
certain expenditures for major renovations and all other capital investments (excluding capitalized interest and any
investments which received a specific waiver), less any corporate income tax paid, plus certain financial investment
income, to the Group’s total debt service obligations for the Fiscal Year. From Fiscal Year 2006 through Fiscal Year
2014, the DSCR requirement applies only if the Group utilizes the entire conditional deferral mechanisms for
TWDC royalties and management fees and Walt Disney Studios Park Loans interest. Beginning in Fiscal Year 2015,
the DSCR will apply without regard to the Actual Performance Indicator until the repayment in full of the
Walt Disney Studios Park Loans in Fiscal Year 2028.
For any Fiscal Year in which the DSCR applies, the Group is also required to maintain a Forecast DSCR calculated
on the basis of the projected debt service obligations for the immediately following year. The forecasted results used
for the Forecast DSCR are the lower of the actual management forecast for the following Fiscal Year or the current
Fiscal Year results escalated at 3% (“Forecast Performance Indicator”).
Fiscal Year
2011
2012
2013
2014
2015
2016
2017 and thereafter
DSCR(1)
1.00
1.00
1.10
2.60
1.40
3.10
1.30
Forecast DSCR(1)
0.70(2)
1.05
2.50
1.05
2.90
1.30
1.30
(2)
C.1
C.2
The required levels of DSCR and Forecast DSCR are set forth in the following table:
(1)
C
Correspond to the minimum values to be achieved for each Fiscal Year.
On January 6, 2012, following the Lenders’ authorization to increase the recurring annual investment budget for Fiscal Year 2012, which is
included in the forecast DSCR calculation for Fiscal Year 2011, the required minimum value for the Forecast DSCR was brought from 1.00 to 0.70
for Fiscal Year 2011(see section “Restrictions on capital expenditures” hereafter).
C.3
C.4
C.5
161
C
The Group may restore these ratios to their required level, by raising additional equity or subordinated debt, or by
obtaining forgiveness or deferral of amounts that would otherwise be payable. In such case, the Group’s cash
balance must have benefited from the restoration amount no later than January 30 of the following year. If the
required DSCR or Forecast DSCR is not met in respect of a given Fiscal Year for which it applies, the Lenders may
declare acceleration under the financing arrangements and this would require the immediate repayment of the
Group’s financial debt.
For Fiscal Year 2011, the Actual Performance Indicator was € 272 million, which was less than the Group’s annual
reference level for purpose of this covenant. Consequently, the Group has calculated the DSCR for Fiscal Year 2011
and the Forecast DSCR for Fiscal Year 2012.
For Fiscal Year 2011, following the agreement by TWDC to defer the payment of € 8.9 million of additional Fiscal
Year 2011 royalties (see section B.3. “Consolidated Financial Statements”, note 12.6.2. “Long-term Subordinated
Loan – Deferrals of Royalties and Management Fees”), the DSCR was 1.00 and the Forecast DSCR exceeded the
minimum requirements. These calculations were approved by an independent expert in December 2011.
The table below presents the indicators over the past three Fiscal Years and their impact on the Group’s level of
borrowings:
(€ in millions)
Fiscal Year 2011
Actual
Performance
Indicator
Reference
Performance
Indicator
Impact
272.1
340.6
€ 25.0 million conditional deferral of
royalties and management fees
315.6
interest(1)
295.4
€ 8.9 million additional deferral of
royalties
Calculation triggered but no other
impact
Total converted to non current borrowings
Fiscal Year 2010
54.1
269.0
317.2
292.2
interest(2)
272.0
impact
Fiscal Year 2009
45.2
267.6
313.1
288.1
interest(3)
267.9
impact
(1)
(2)
(3)
162
Of which € 15.1 million related to Fiscal Year 2011 and € 5.1 million related to Fiscal Year 2012.
45.2
Restrictions on Capital Expenditures
As part of the 2005 Restructuring, the maximum amount of authorized recurring investments (meaning capital and
fixed asset rehabilitation expenditures, regardless of whether they are expensed or capitalized as fixed assets under
IFRS and excluding any investments which received a specific waiver) was defined for each Fiscal Year from 2005 to 2009.
Beginning Fiscal Year 2010, if the Group does not utilize the entire potential benefit of the conditional deferral of
interest under the Walt Disney Studios Park Loans, these capital expenditures will continue to be permitted up to
5% of the prior Fiscal Year adjusted consolidated revenues1, within the limit of 25% of the Reference Performance
Indicator for the prior Fiscal Year. Moreover, if the Group does not fully utilize the authorized recurring
investments for a given Fiscal Year, the remaining unused amount is carried over to the next Fiscal Year, within the
limit of 20% of the authorized recurring investments for the next Fiscal Year.
If the Group utilizes the entire potential benefit of the conditional deferral of interest under the Walt Disney
Studios Park Loans for any calendar year from 2010 to 2014, a new capital expenditure amount has to be
determined with the Lenders, failing which these expenditures will continue to be permitted up to 3% of the prior
Fiscal Year adjusted consolidated revenues1. In such case, the remaining unused amount of the prior year is not
carried over.
the Group’s recurring annual investment budget2 for Fiscal Year 2011 and thereafter was permitted up to 3% of the
prior Fiscal Year’s adjusted consolidated revenues1. On March 31, 2011, the Group obtained Lenders’ agreement to
increase the recurring annual investment budget from € 37 million to € 81 million for Fiscal Year 2011, and up to
5% of the prior Fiscal Year’s adjusted consolidated revenues1 for Fiscal Year 2012.
As a result of utilizing the entire deferrals available to the Group with respect to Fiscal Year 2011, the Group’s
recurring annual investment budget for Fiscal Year 2012 and thereafter is permitted up to 3% of the prior Fiscal
Year’s adjusted consolidated revenues1, unless the Group obtains Lenders agreement to increase the budget.
On January 6, 2012, the Group obtained Lenders’ agreement to increase the recurring annual investment budget
for Fiscal Year 2012 from € 40 million to € 100 million. The recurring annual investment budget for Fiscal Year 2013
and thereafter will continue to be restricted and permitted up to 3% of the prior Fiscal Year’s adjusted consolidated
revenues1, unless the Group agrees with the Lenders on a higher budget. In addition, the Group obtained Lenders’
agreement to invest in a multiyear expansion of the Walt Disney Studios® Park, which includes a new attraction. In
connection with foregoing, the Group obtained an additional standby revolving credit facility of € 150 million from
TWDC, which expires on September 30, 2018. Please refer to the press release issued on January 10, 2012 for more
information.
For additional information, see sub-section “Capital Investment” included in section B.2. “Group and Parent
Company Management Report”.
Restrictions on Additional Indebtedness
The Group’s debt agreements limit the amount of new indebtedness that the Group can incur. The Group is
currently authorized to incur a maximum of € 50.0 million of other new indebtedness, which includes financial
leasing arrangements, certain guarantees and purchases on credit. Financing lease arrangements are limited to a
principal amount of up to € 10.0 million per year.
C.3.2.
Changes in Accounting Principles
2
C.1
C.2
In the event of a change in accounting principles and rules and/or changes in the scope of consolidation of the
Group, the Actual Performance Indicator and, if necessary, the Reference Performance Indicator are to be adjusted
to reflect the accounting change. The adjusted actual performance indicator in these situations (the “Pro-Forma
Performance Indicator”) will replace the Actual Performance Indicator.
1
C
Including both capital investments and fixed asset rehabilitations, which are either treated as an expense or capitalized as fixed assets under
IFRS.
C.3
C.4
C.5
163
C
Documents Available to the Public
C.4. DOCUMENTS AVAILABLE TO THE PUBLIC
C.4.1.
Consultation of the Documents and Information Related to the Company
The
Company’s
statutory
documents
are
available
on
the
Company’s
website
(http://corporate.disneylandparis.com) and/or paper copies of these documents can also be consulted during
opening hours at the Investor Relations division at the Company’s registered office (Immeubles Administratifs,
Route Nationale 34, 77700 Chessy, France).
The documents which can be consulted are the following:
•
the Company’s bylaws;
•
all of the reports and other documents, or historical financial information for which a portion has been
included or referred to in this Reference Document; and
•
the Company’s and its subsidiaries’ historical published financial documents for each of the two Fiscal Years
preceding this Reference Document.
C.4.2.
List of the Information Published or Made Available to the Public over the Past Twelve
Months Pursuant to Article L.451-1-1 of the Code monétaire et financier and
Article 222-7 of the Règlement général of the AMF
Pursuant to Article L.451-1-1 of the Code monétaire et financier and Article 222-7 of the Règlement général of the AMF,
the Company has prepared a list of all of the information published or made available to the public for the last
twelve months.
All of the information presented in the following table can be obtained from:
164
•
the Company’s website (http://corporate.disneylandparis.com) for press releases and financial presentations;
•
the Bulletin des Annonces Légales Obligatoires website (www.journal-officiel.gouv.fr/balo/) for all the information
which has been published in the above mentioned bulletin;
•
the “Infogreffe” website (www.infogreffe.fr) for information filed with the registry of the Commercial Court.
Nature of information
Consulting mode
http://corporate.disneylandparis.com
Press releases and financial reports
2010 Reference document including the annual financial report (01/20/2011)
Press release related to the availability of the 2010 Reference document
(01/31/2011)
Share buy back transactions – January 2011 (02/08/2011)
Press release related to the First Quarter Revenues for fiscal year 2011
(02/08/2011)
Disclosure of the total number of voting rights and shares (02/09/2011)
Press release related to the availability of the March 4, 2011 annual general
meeting documents and information (02/09/2011)
Annual General Meeting – Notice of meeting – March 4, 2011 (02/09/2011)
Annual General Meeting Booklet – March 4, 2011 (02/09/2011)
2010 Annual Review (02/24/2011)
General Shareholders Meeting Presentation – March 4, 2011 (03/04/2011)
Results of the Annual General Meeting resolutions votes – March 4, 2011
(03/04/2011)
Share buy back transactions – February 2011 (03/10/2011)
Disclosure of the total number of voting rights and shares (03/10/2011)
Press release related to the liquidity contract and share buy back programme
(04/07/2011)
Share buy back transactions – March 2011 (04/07/2011)
Share buy back transactions – April 2011 (05/04/2011)
Press release related to First Half Results for fiscal year 2011 (05/10/2011)
2011 First Half Results – Analysts Presentation (05/10/2011)
2011 Interim Report for the six months ended March 31, 2011 (05/16/2011)
Press release related to the availability of the 2011 Interim Report (05/16/2011)
Share buy back transactions – May 2011 (06/09/2011)
Share buy back transactions – June 2011 (07/04/2011)
Share buy back transactions – July 2011 (08/04/2011)
Press release related to revenues for the nine months ended June 30, 2011
(08/09/2011)
Share buy back transactions – August 2011 (09/02/2011)
Share buy back transactions – September 2011 (10/04/2011)
Press release related to the half year report on the liquidity contract
(10/06/2011)
C
C.1
Share buy back transactions – October 2011 (11/08/2011)
Press release related to Annual Results for fiscal year 2011 (11/09/2011)
2011 Annual Results – Analysts presentation (11/09/2011)
C.2
Press release related to the appointment of Mr. Mark Stead to the position of
Vice President, Chief Financial Officer of Euro Disney S.A.S. (11/22/2011)
C.3
Share buy back transactions – November 2011 (12/19/2011)
C.4
Share buy back transactions – December 2011 (01/04/2012)
Press release related to an additional standby revolving credit facility
(01/10/2012)
C.5
165
C
Nature of information
Documents published on the Official French Publication Bulletins
(“Bulletin des Annonces Légales Obligatoires” – BALO)
Consulting mode
www.journal-officiel.gouv.fr/balo/
Annual General Meeting – Preliminary notice of meeting – March 4, 2011
(12/22/2010)
Annual General Meeting – Notice of meeting – March 4, 2011 (02/09/2011)
Notice related to annual accounts for fiscal year 2010 and the allocation of the net
loss (03/14/2011)
Notice related to the Securities Services of which the management is handled by
Société Générale (10/03/2011)
Annual General Meeting – Preliminary notice of meeting – February 17, 2012
(12/19/2011)
Documents registered at the French Commercial Court of Meaux (77)
Registration of annual and consolidated accounts – Management Report –
Supervisory Board Reports – Auditors’ Reports (03/22/2011) – notice related to the
number of voting rights at the annual general meeting of March 4, 2011 (published in
the newspaper of legal announcements “Le Pays Briard” – 03/15/2011)
Registration of an extract of the minutes of the annual general meeting related to the
appointment of a new member of the Supervisory Board (03/29/2011); notice related
to the said appointment (published in the newspaper of legal annoucements “Le
Pays Briard” – 04/01/2011)
166
www.infogreffe.fr
Responsibility for this Reference Document and Annual Financial Report
C.5. RESPONSIBILITY FOR THIS REFERENCE DOCUMENT AND ANNUAL FINANCIAL REPORT
Responsibility for this Reference Document lies with the Gérant, Euro Disney S.A.S., a French simplified corporation
with a share capital of € 1,676,940 whose registered office is located at Immeubles Administratifs,
Route Nationale 34, 77700 Chessy, France, represented by Philippe Gas.
C.5.1.
Certification of the Person Responsible for this Reference Document and Annual
Financial Report
“I hereby certify, after having taken all reasonable measures to this effect, that the information contained in this registration
document is, to the best of my knowledge, in accordance with the facts and makes no omission likely to affect its import.
I certify, to the best of my knowledge, that (i) the accounts have been prepared in accordance with applicable accounting standards
and give a fair view of the assets, liabilities and financial position and profit or loss of the Company and all the undertakings
included in the consolidation, and that (ii) the Group and parent company management report in section B.2. presents a fair
review of the development and performance of the business and financial position of the Company and all the undertakings
included in the consolidation as well as a description of the main risks and uncertainties to which they are exposed.
I have received a completion letter from the auditors stating that they have audited the information contained in this registration
document about the financial position and accounts and that they have read this Reference Document in its entirety.”
The Gérant, Euro Disney S.A.S.
Represented by Philippe Gas,
Chief Executive Officer
C.5.2.
Person Responsible for the Information
Mr. Mark Stead
Euro Disney S.A.S.
Immeubles Administratifs, Route Nationale 34,
77700 Chessy
Tel.: 33 (0) 1.64.74.55.77
Fax: 33 (0) 1.64.74.59.14
C
C.1
C.2
C.3
C.4
C.5
167
C
C.5.3.
Statutory Auditors
The Titular Statutory Auditors
•
PricewaterhouseCoopers Audit S.A.
Statutory auditors members of the Compagnie Régionale des Commissaires aux comptes de Versailles
represented by Mr. Eric Bulle
63, rue de Villiers – 92200 Neuilly sur Seine
Date of first term of office:
Length of first term of office:
Current term of office:
•
June 14, 1988
6 years
the current six-year term of office expires at the close of the annual
general meeting of the shareholders which will deliberate upon the
annual financial statements of the Fiscal Year ending
September 30, 2011; and
Caderas Martin S.A.
Statutory auditors members of the Compagnie Régionale des Commissaires aux comptes de Paris
represented by Mr. Pierre-Olivier Cointe
76, rue Monceau – 75008 Paris
March 14, 1994
until the annual general meeting of the shareholders which
deliberated upon the annual financial statements of the Fiscal Year
ending September 30, 1996.
September 30, 2014.
The Substitute Statutory Auditors
•
Mr. Etienne Boris,
a French national,
63, rue de Villiers – 92200 Neuilly sur Seine
•
February 10, 2006
6 years
September 30, 2011; and
Mr. Jean-Lin Lefebvre,
a French national,
76, rue Monceau – 75008 Paris
168
February 11, 2009
6 years
September 30, 2014.
Fees Payable to Statutory Auditors
Pursuant to Instruction 2006-10 of the AMF, fees incurred for the consolidated and statutory audits of the Group
were:
Fiscal Year
(€ in thousands, excl. VAT)
2011
Percentage
2010
2011
2010
Caderas Martin
Fiscal Year
2011
Percentage
2010
2011
2010
Audit
Statutory audit, certification, consolidated and individual financial
statements audit
Euro Disney S.C.A.
85.0
81.7
11%
10%
33.0
34.0
22%
23%
691.9
707.2
89%
88%
117.6
116.0
78%
77%
Euro Disney S.C.A.
-
-
n/a
-
-
n/a
n/a
Fully consolidated subsidiaries
-
11.0
n/a
1%
-
-
n/a
n/a
776.9
799.9
100% 100%
150.6
150.0
Legal, tax and social matters
-
-
n/a
n/a
-
-
n/a
n/a
Other
-
-
n/a
n/a
-
-
n/a
n/a
Total other services
-
-
n/a
n/a
-
-
n/a
n/a
776.9
799.9
150.6
150.0
Fully consolidated
subsidiaries(1)
Other work and services directly related to the statutory audit
Total audit
n/a
100% 100%
Other services provided by the network to fully consolidated
subsidiaries
Total
100% 100%
100% 100%
n/a:not applicable.
(1)
Includes € 127,800 and € 131,100 of audit fees related to the Financing Companies and Gérant audits for Fiscal Years 2011 and 2010 respectively,
contractually re-invoiced to the Group.
C
C.1
C.2
C.3
C.4
C.5
169
GLOSSARY
GLOSSARY
1994 Financial Restructuring
means the financial restructuring agreed and implemented in 1994
between the Company, TWDC, the Phase I Financing Companies and
the Lenders;
2005 Restructuring
means the legal and financial restructuring in 2005 including all the
operations and agreements signed regarding this restructuring;
Actual Performance Indicator
means for any Fiscal Year, the Group’s consolidated net income/ (loss)
attributable to equity holders of the parent, as reported in the
consolidated audited financial statements for such Fiscal Year, after
restatement of the effect of the following:
•
income/(loss) allocated to minority interests as reported in the
consolidated statement of income;
•
•
interest income/(expense) and taxes from affiliates accounted
for under the equity method;
•
the net impact of all waivers of debts or commercial or financial
payables, which may be granted by TWDC or its subsidiaries;
•
the net impact (positive or negative) of depreciation and
movements in reserves on tangible, intangible assets (including
goodwill) and deferred charges as well as exceptional reserves
and impairment charges on these asset categories;
•
the net impact (positive or negative) of movements in:
(i) current asset reserves (for example: receivables and
inventories); (ii) provisions for risks and charges and
(iii) provisions recorded in exceptional earnings;
•
operating expenses related to actual expenditures for major fixed
asset renovations;
•
net gains and losses on the sale or abandonment of tangible or
intangible assets;
•
financial income net of financial charges, excluding charges
related to bank card commissions;
•
royalties and management fees payable to TWDC expensed for
such Fiscal Year;
•
the variable rent of the Disneyland® Park lease;
•
certain differences between IFRS and French accounting
principles.
The Actual Performance Indicator will be calculated based upon the
Group’s consolidated statement of income and the related supporting
accounting records.
170
Amendment
means the amendment
September 14, 2010;
AMF
means Autorité des Marchés Financiers, which is the financial institution
supervising the French financial market;
CDC
means the Caisse des Dépôts et Consignations;
CDC Phase I Loans
means the loans granted by the CDC to the Company and the Phase IA
Financing Company (ordinary loans and participating loans);
Club
refers to Euro Disney Shareholders’ Club;
to
the
Main
Agreement
signed
on
GLOSSARY
Code
refers to the Group’s code of business conduct;
Company
means Euro Disney S.C.A.;
COSO
means Committee of Sponsoring Organizations of the Treadway
Commission;
means the multi-currency loan agreement entered into on
September 5, 1989 between the Company and the Phase IA Financing
Company as borrowers, and the banks and financial institutions
involved, as modified by the amendments dated August 10, 1994 and
March 17, 1995;
means the credit facility agreement entered into on March 25, 1991
between the banks and financial institutions, EDL Hôtels S.C.A. and
the Phase IB Financing Companies, as modified by the amendments
dated August 10, 1994, July 12, 1995, May 15, 1996 and May 16, 2003;
DD LLC
means Disney Destination LLC;
DEI
means Disney Enterprises, Inc.;
Department
means the department of Seine-et-Marne;
Development Agreement
means the agreement dated February 28, 1989 between the Company
and the Gérant, an indirect wholly-owned subsidiary of TWDC, whereby
the Gérant provides and arranges for other subsidiaries of TWDC to
provide EDA with a variety of technical and administrative services;
Development Plan
means the program (as defined in the 2005 Restructuring agreement)
to develop new theme park attractions, maintain and improve the
existing asset base for a total amount of € 240 million. This program
ended in Fiscal Year 2009;
Disneyland® Park
means the first theme park of Disneyland® Paris which opened on
April 12, 1992;
DSCR
means Debt Service Coverage Ratio and is defined as the ratio of: the
Group’s Performance Indicator for a given Fiscal Year, less any royalties
and management fees payable to affiliates of TWDC that are not
deferred, less the amount of certain expenditures for major
renovations and all other capital investments (excluding capitalized
interest and the investments of the Development Plan), less any
corporate income tax paid, plus certain financial investment income, to
the Group’s total debt service obligations for the last twelve months;
EDA
means Euro Disney Associés S.C.A.;
EDL Participations
means EDL Participations S.A.S.;
EDLI
means Euro Disneyland Imagineering S.A.R.L.;
EDV
means Euro Disney Vacances S.A.S.;
EPA-France
means the Public Establishment for the Development of the fourth district
(Secteur IV) of the new town of Marne-La-Vallée;
EPA-Marne
means the Public Establishment for the Development of the new town
of Marne-La-Vallée;
EURIBOR
means the Euro Interbank Offered Rate;
Financing Companies
means the companies from which the Group leases an important part
of its assets, being the Phase IA Financing Company, the Phase IB
Financing Companies, and Centre de Congrès Newport S.A.S.;
Fiscal Year
means a fiscal period commencing on October 1 and terminating on
September 30 each calendar year. For example, Fiscal Year 2011 ran
from October 1, 2010 to September 30, 2011;
171
GLOSSARY
172
Forecast DSCR
defined as the ratio of: the Group’s Forecast Performance Indicator for
a given Fiscal Year, less any royalties and management fees payable to
affiliates of TWDC that are not deferred, less the amount of certain
expenditures for major renovations and all other capital investments
(excluding capitalized interest and the investments of the Development
Plan), less the smaller amount of the financial income received or the
financial income to be received, to the Group’s total projected debt
service obligations for the next twelve months;
Forecast Performance Indicator
defined as the Performance Indicator as forecasted. It corresponds to
the lower of the Forecast Performance Indicator and the Actual
Performance Indicator, plus 3%;
General Partner
means EDL Participations S.A.S., an indirect wholly-owned subsidiary of
TWDC;
Gérant
means Euro Disney S.A.S., an indirect wholly-owned subsidiary of
TWDC, the management company of the Company, EDA and EDL
Hôtels S.C.A.;
Golf Course
means the Golf Disneyland®, a 27-hole golf course;
Group
means the Company, its subsidiaries and the consolidated Financing
Companies;
Hotels
means the following hotels operated by the Group: the Disneyland®
Hotel, Disney’s Hotel New York®, Disney’s Newport Bay Club®
Hotel, Disney’s Sequoia Lodge®, Disney’s Cheyenne® Hotel, Disney’s
Hotel Santa Fe® and Disney’s Davy Crockett Ranch;
IAS
means International Accounting Standards;
IASB
means International Accounting Standards Board;
IFRIC
means International Financial Reporting Interpretations Committee;
IFRS
means International Financial Reporting Standards and refers
collectively to IAS, IFRS, SIC and IFRIC interpretations issued by the
IASB;
Legally Controlled Group
means the Company and its owned and controlled subsidiaries;
Lenders
means each of the banks, financial institutions and creditor companies
of EDA, EDL Hôtels S.C.A. or the Phase I Financing Companies;
License Agreement
means the agreement dated February 28, 1989 (as amended) between
TWDC and the Company, which provides EDA the right to use TWDC
intellectual and industrial property;
LSF
means Loi de Sécurité Financière, which is a law establishing new or
enhanced standards for corporate governance;
Main Agreement
means the agreement on the creation and the operation of Euro
Disneyland in France dated March 24, 1987 made between the French
Republic, certain other French public authorities and TWDC, as
amended on July 12, 1988, July 5, 1991, December 30, 1994,
May 15, 1997, September 29, 1999, December 22, 2004 and
September 14, 2010;
means the second convention center located adjacent to Disney’s
Newport Bay Club Hotel;
Opening Day
means April 12, 1992, the opening day and commencement of
operations of the Resort;
means the subordinated partner advances granted to the Phase IA
Financing Company by its partners in accordance with the related
agreement;
means the advances granted to the Phase IB Financing Companies by
the partners of the Phase IB Financing Companies and certain other
lenders in accordance with the related agreement;
GLOSSARY
Phase I Debt
means the CDC Phase I Loans, the Credit Facilities – Phases IA and IB
as well as the Partner Advances – Phases IA and IB;
Phase I Financing Companies
means the Phase IA Financing Company and the Phase IB Financing
Companies;
Phase IA Facilities
means the Disneyland® Park, the Disneyland® Hotel, the Davy Crockett
Ranch, the Golf Course, infrastructure and support facilities;
Phase IA Financing Company
means Euro Disneyland S.N.C., owner of most of the assets of the
Disneyland Park and related land on which it is situated;
Phase IB Facilities
means Disney’s Hotel New York®, Disney’s Sequoia Lodge®,
Disney’s Newport Bay Club®, Disney’s Hotel Cheyenne®, Disney’s Hotel
Santa Fe® and the Disney Village®;
Phase IB Financing Companies
means the six special-purpose companies established for the financing
of Phase IB: Hotel New York Associés S.N.C., Newport Bay Club
Associés S.N.C., Sequoia Lodge Associés S.N.C., Cheyenne Hotel
Associés S.N.C., Hotel Santa Fe Associés S.N.C. and Centre de
Divertissements Associés S.N.C.;
Pro-Forma Performance Indicator
refers to the Actual Performance Indicator for a given Fiscal Year if
modified (following the agreed contractual procedure) in the event of
a change in accounting principles and rules from those used in
preparing the consolidated financial statements for Fiscal Year 2003;
Processes
means all of the internal control processes implemented by the Group
to comply with the LSF and SOX;
Reference Performance Indicator
means the Performance Indicator for a given Fiscal Year as agreed
between the parties to the memorandum of agreement on the 2005
Restructuring entered into in September 2004 between the Company
(acting on behalf of the Group), TWDC and the Lenders;
Resort
means the Disneyland® Paris site located 32km east of Paris where the
Group currently operates the Disneyland Park, the Walt Disney
Studios® Park, seven themed hotels, two convention centers, the
Disney Village and the Golf Course;
Reverse Stock Split
refers to the implementation of a share consolidation on
December 3, 2007 through the attribution of one new share for each
100 old shares;
SEC
means Securities and Exchange Commission, which is a United States
government agency having primary responsibility for enforcing the
federal securities laws and regulating the securities industry/stock
market;
SIC
means Standing Interpretations Committee;
SOX
refers to the Sarbanes-Oxley Act of 2002, which is a United States
federal securities law which established standards for all U.S. public
company boards, management, and public accounting firms;
Theme Parks
means the Disneyland Park and the Walt Disney Studios Park;
TWDC
means The Walt Disney Company;
Villages Nature
means Les Villages Nature de Val d’Europe, a joint venture with Groupe
Pierre & Vacances Center Parcs to develop an innovative eco-tourism
project based on the concept of harmony between man and nature;
Walt Disney Studios Park
means the second theme park of the Resort, which opened on
March 16, 2002;
means the subordinated loans granted on September 30, 1999 by CDC
to the Company to finance part of the construction costs of the Walt
Disney Studios Park;
173
This table sets out the cross-references between the headings provided by the Annex I of the European Regulation
n°809/2004 and the section(s) of this Reference Document.
No
Headings of the European Regulation n°809/2004
1
Persons Responsible
1.1
All persons responsible for the information given in the Registration
Document
1.2
A declaration by those responsible for the Registration Document
2
Page(s)
C.5
167
C.5.1
167
C.5.3
168
Statutory Auditors
2.1
Names and addresses of the issuer’s auditors
2.2
Auditors having resigned, been removed or not been re-appointed during the
period covered by the historical financial information
3
Not
applicable
Selected Financial Information
3.1
Selected historical financial information
3.2
Selected historical financial information for interim financial periods and
comparative data from the same periods in the prior financial year
4
Risk Factors
5
Information about the Issuer
5.1
A.1.3
B.1
7
30
Not
applicable
B.2
63 to 67
History and development of the issuer
5.1.1
The legal and commercial name of the issuer
C.1.1
135
5.1.2
The place of registration of the issuer and its registration number
C.1.1
135
5.1.3
The date of incorporation and length of life of the issuer
C.1.1
135
5.1.4
The domicile and legal form of the issuer, the legislation under which the issuer operates,
its country of incorporation, and address and telephone number of the registered office
C.1.1
135
5.1.5
Important events in the development of the issuer’s business
A.3
19 to 23
5.2
Investments
5.2.1
A description of the issuer’s principal investments for each financial year for the period
covered by the historical financial information
B.2
36, 37
5.2.2
A description of the issuer’s principal investments that are in progress
B.2
37
B.3
88
B.2
37
5.2.3
6
Information concerning the issuer’s principal future investments on which its
management bodies have already made firm commitments
Business Overview
6.1
174
Section(s) of the
Registration
Document
Principal activities
6.1.1
A description of, and key factors relating to, the nature of the issuer’s operations and its
principal activities
A.1.3
7 to 13
6.1.2
An indication of any significant new products and/or services that have been
introduced
A.2.1
15
6.2
Principal markets
A.2.2
16, 17
6.3
Where the information provided pursuant to items 6.1. and 6.2. has been
influenced by exceptional factors, mention that fact
Not
applicable
6.4
Information regarding the extent to which the issuer is dependent on patents
or licenses, industrial, commercial or financial contracts or new
manufacturing processes
A.3.2
A.4.1
21 to 23
24 to 28
6.5
The basis for any statements made by the issuer regarding its competitive
position
A.2.2
16, 17
Section(s) of the
Registration
Document
Page(s)
Organizational Structure
A.1.2
6
7.1
A brief description of the group and the issuer’s position within the group
A.1.1
4 to 6
7.2
A list of the issuer’s significant subsidiaries
No
7
8
Property, Plants and Equipment
B.3 note 1
76
B.1
30
8.1
Information regarding any existing or planned material tangible fixed assets,
including leased properties
B.3 note 4
88, 89
8.2
A description of any environmental issues that may affect the issuer’s
utilization of the tangible fixed assets
B.2
59 to 62
9
Operating and Financial Review
9.1
A description of the issuer’s financial condition, changes in financial
condition and results of operations for each year and interim period, for
which historical financial information is required
B.2
34
9.2
Operating results
B.2
35, 36
9.2.1
Information regarding significant factors, including unusual or infrequent events or
new developments, materially affecting the issuer’s income from operations
B.2
35, 36
9.2.2
Changes in net sales or revenues and narrative discussion of the reasons for such
changes
B.2
35, 36
9.2.3
Information regarding any governmental, economic, fiscal, monetary or political
factors that have materially affected, or could materially affect the issuer’s operations
B.2
63 to 67
10
Capital Resources
10.1
Information concerning the issuer’s capital resources (short and long-term)
B.2
37 to 39
10.2
Sources and amounts of the issuer’s cash flows
B.2
38, 39
10.3
Information on the borrowing requirements and funding structure of the
issuer
A.3.2
B.2
21 to 23
37
10.4
Information regarding any restrictions on the use of capital resources
C.3.1
163
10.5
Information regarding any expected cash flow that will be necessary to
finance items mentioned in points 5.2.3 and 8.1
11
Not applicable
Research and Development, Patents and Licenses
Description of the issuer’s research and development policies, including the
amount spent on issuer-sponsored research and development activities
12
B.2
41
42
Trend Information
12.1
The most significant trends in production, sales and inventory, and costs and
selling prices since the end of the last financial year to the date of the
Registration Document
B.2
12.2
Information on any known trends, uncertainties, demands, commitments or
events that are reasonably likely to have a material effect on the issuer’s
prospects for at least the current financial year
Not applicable
13
Profit Forecasts or Estimates
13.1
A statement setting out the principal assumptions upon which the issuer has
based its forecast or estimate
Not applicable
13.2
A report prepared by independent accountants or auditors stating that, in
the opinion of the independent accountants or auditors, the forecast or
estimate has been properly compiled on the basis stated and that the basis of
accounting used for the profit forecast or estimate is consistent with the
accounting policies of the issuer
Not applicable
13.3
Profit forecast or estimates has been prepared on a consistent basis
compared with historical financial information
Not applicable
13.4
Declaration that the profit forecast or estimates is still valid at the date of
registration
Not applicable
175
Section(s) of the
Registration
Document
Page(s)
B.2
C.1.2
43 to 54
137 to 139
senior
B.2
C.1.2
43, 51, 54
138, 139
Any arrangement or understanding with major shareholders, customers,
suppliers or others, pursuant to which any person referred to in item 14.1
was selected as a member of the administrative, management or supervisory
body or member of senior management
Not applicable
Details of any restrictions agreed by the persons referred to in item 14.1 on
the disposal, within a certain period of time, of their holdings in the issuer’s
securities
B.2
44, 54
No
14
Administrative,
Management
14.1
Management,
and
Supervisory
Bodies
and
Senior
Information on the activities, absence of convictions and positions of:
a) members of the administrative, management or supervisory bodies; and
b) general partner; and
c) any senior manager who is relevant to establishing that the issuer has the
appropriate expertise and experience for the management of the issuer’s
business
14.2
15
Administrative, management, and
management conflicts of interest
supervisory
bodies
and
Remuneration and Benefits for the Persons referred to in Item 14.1
15.1
The amount of remuneration paid and benefits in kind granted to such
persons by the issuer and its subsidiaries
B.2
B.3
C.1.2
43, 52, 54
113, 114
139 to 141
15.2
The total amounts set aside or accrued by the issuer or its subsidiaries to
provide pension, retirement or similar benefits
B.2
B.3
C.1.2
43, 52, 54
113, 114
139 to 141
16
Board Practices
16.1
Date of expiration of the current term of office of the administrative,
management or supervisory bodies’ members
B.2
C.1.2
44
139
16.2
Information about members of the administrative bodies’ service contracts
B.2
C.1.2
51, 54
138
16.3
Information about the issuer’s audit committee and remuneration
committee
C.1.3
144, 145, 148
16.4
A statement as to whether or not the issuer complies with its country of
incorporation corporate governance regime
C.1.3
148, 149
B.2
B.3
55
113
B.2
B.3
B.2
B.3
C.1.2
39
107 to 109
44, 54
108
138
17
Employees
17.1
Either the number of employees at the end of the period or the average for
each financial year for the period covered by the historical financial
information and a breakdown of persons employed
17.2
Shareholding and stock options
With respect to each person referred to in item 14.1, information as to their
share ownership and any options over such shares in the issuer
17.3
Not applicable
Major Shareholders
C.2.4
18.1
Name of any person other than a member of the administrative,
management or supervisory bodies who, directly or indirectly, has an interest
in the issuer’s capital or voting rights which is notifiable under the issuer’s
national law
C.2.4
18.2
State whether the issuer’s major shareholders have different voting rights
18.3
State whether the issuer is owned or controlled and by whom as well as the
measures in place to ensure that such control is not abused
B.2
C.1.3
C.2.4
18.4
A description of any arrangements the operation of which may at a
subsequent date result in a change in control of the issuer
Not applicable
18
176
Description of any arrangements for involving employees in the capital of the
issuer
156
Not applicable
65, 66
146
156
No
19
Related-Party Transactions
20
Financial Information concerning the Issuer’s Assets and Liabilities,
Financial Position and Profits and Losses
20.1
Historical Financial Information
20.2
Pro forma financial information and description of the influence of the
reorganization
20.3
Financial statements (statutory and consolidated financial statements)
20.4
Auditing of historical annual financial information
Section(s) of the
Registration Document
Page(s)
A.4.1
B.2
B.3 note 19
B.7
24 to 27
39
106, 107
128, 129
B.1
30
Not applicable
B.5
B.3
117 to 125
70 to 114
B.4
B.6
115, 116
126, 127
20.4.1
A statement that the historical financial information has been audited
20.4.2
Indication of other information in the Registration Document which has been
audited by the auditors
Not applicable
20.4.3
Where financial data in the Registration Document is not extracted from the
issuer’s audited financial statements, state the source of the data and state that
the data is unaudited
Not applicable
20.5
Date of latest audited financial information
20.6
Interim and other financial information
20.7
Dividend policy
20.8
Legal and arbitration proceedings
B.2
67
20.9
Significant change in the group’s financial or trading position which
has occurred since the end of the last financial period
B.1
31
C.2.1
154
21
September 30, 2011
Not applicable
Not applicable
C.1.1
C.2.7
136
158
Additional Information
21.1
Share capital
21.1.1
The amount of issued capital, the number of shares issued, the face value per
share and a reconciliation of the number of shares outstanding at the beginning
and end of the year
21.1.2
Shares not representing capital
21.1.3
The number, book value and face value of shares in the issuer held by or on
behalf of the issuer or by its subsidiaries
B.3 note 10
B.5 note 6
C.2.3
91, 92
121, 122
154
21.1.4
The amount of any convertible securities, exchangeable securities or securities
with warrants
B.3
107 to 109
21.1.5
Information about and terms of any acquisition rights and/or obligations over
authorized but unissued capital or an undertaking to increase the capital
Not applicable
21.1.6
Information about any capital of any member of the group which is under option
or greed to be put under option
Not applicable
21.1.7
A history of share capital, highlighting any changes, for the period covered by the
historical financial information
21.2
Not applicable
C.2.4
155 to 157
Memorandum and articles of association
21.2.1
Issuer’s objects and purposes
C.1.1
136
21.2.2
A summary of any provisions of the issuer’s articles of association, statutes,
charter or bylaws with respect to the members of the administrative, management
or supervisory bodies
C.1.3
142
21.2.3
A description of the rights, preferences and restrictions attaching to each class of
the existing shares
C.1.1
C.2.4
136, 137
156
21.2.4
A description of what action is necessary to change the rights of holders of the
shares
Not applicable
177
No
Page(s)
21.2.5
A description of the conditions governing the manner in which annual general meetings
and extraordinary general meetings of shareholders are called
C.1.1
137
21.2.6
A brief description of any provision of the issuer’s articles of association, statutes, charter
or bylaws that would have an effect of delaying, deferring or preventing a change in
control of the issuer
C.1.3
148
21.2.7
An indication of the articles of association, statutes, charter or bylaws provisions
governing the ownership threshold above which shareholder ownership must be disclosed
C.2.4
155
21.2.8
A description of the conditions imposed by the memorandum and articles of association
statutes, charter or bylaws governing changes in the capital, where such conditions are
more stringent than is required by law
Not
applicable
22
Material Contracts
23
Third Party Information and Statement by Experts and Declarations of any
Interest
24
Documents on Display
25
Information on Holdings
Information relating to the undertakings in which the issuer holds a
proportion of the capital likely to have a significant effect on the assessment of
its own assets and liabilities, financial position or profits and losses
178
Section(s) of the
Registration
Document
A.4
24 to 28
Not
applicable
C.4
164 to 166
B.3 note 1
76
The annual financial report for Fiscal Year 2011, established pursuant to Article L. 451-1-2 of the Monetary and
Financial Code and Article 222-3 of the Règlement général of the AMF is made up of the sections of the Reference
Document identified in the table below:
Sections of the Reference Document
Page
B.3
70
B.5
Company Financial Statements
B.2
B.4
115
B.6
126
117
32
C.5.1 Certification of the Person Responsible for the Annual Financial Report
167
C.5.3 Fees Payable to Statutory Auditors
169
179
© Disney, Euro Disney S.C.A. société en commandite par actions, with a registered capital of 38,976,490 euros
334 173 887 RCS MEAUX
Registered office: Immeubles Administratifs, Route Nationale 34, 77700 Chessy, France
$ISNEY0IXAR
http://corporate.disneylandparis.com

printmgr file - Euro Disney SCA

Transcription

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