International Theme Park Investments

The Company has an 89% effective ownership interest in the operations of Disneyland Paris, a 47% ownership interest in the operations of Hong Kong Disneyland Resort and a 43% ownership interest in the operations of Shanghai Disney Resort. The International Theme Parks are VIEs consolidated in the Company’s financial statements. See Note 1 for the Company’s policy on consolidating VIEs.

The following table summarizes the carrying amounts of the International Theme Parks’ assets and liabilities included in the Company’s Condensed Consolidated Balance Sheets as of April 1, 2017 and October 1, 2016:



	International Theme Parks
	April 1, 2017		October 1, 2016
Cash and cash equivalents	$	538	$	1,008
Other current assets	385		331
Total current assets	923		1,339
Parks, resorts and other property	9,120		9,270
Other assets	83		88
Total assets	$	10,126	$	10,697

Current liabilities	$	1,292	$	1,499
Borrowings - long-term	1,090		1,087
Other long-term liabilities	283		256
Total liabilities	$	2,665	$	2,842

The following table summarizes the International Theme Parks’ revenues, costs and expenses and equity in the loss of investees included in the Company’s Condensed Consolidated Statement of Income for the six months ended April 1, 2017:



	April 1, 2017
Revenues	$	1,409
Costs and expenses	(1,513		)
Equity in the loss of investees	(5		)

For the six months ended April 1, 2017, royalty and management fees of $72 million are eliminated in consolidation but are considered in calculating earnings allocated to noncontrolling interests.

For the six months ended April 1, 2017, International Theme Parks’ cash flows included in the Company’s Condensed Consolidated Statement of Cash Flows were $208 million generated from operating activities, $595 million used in investing activities and $13 million generated from financing activities.

Disneyland Paris

In February 2017, the Company increased its effective ownership percentage from 81% to 88% by exchanging 1.36 million of the Company’s common shares for 70.5 million outstanding shares of Euro Disney S.C.A. (EDSCA), the publicly-traded French entity, which has an 82% interest in the Disneyland Paris operating company. The transaction was valued at €141 million ($150 million) based on a purchase price of €2 per share.

Subject to French regulatory clearance, the Company intends to make a cash tender offer for the remaining 109 million outstanding shares of EDSCA at a price of €2 per share (approximately €219 million or $234 million). If the Company’s ownership in EDSCA is at least 95% following the tender offer, the Company will proceed with a mandatory buyout and delisting of EDSCA from Euronext Paris.

Additionally, the Company committed to support a recapitalization of up to €1.5 billion (approximately $1.6 billion) to enable Disneyland Paris to continue the implementation of improvements, reduce debt and increase liquidity.

The Company has term loans to Disneyland Paris with outstanding balances totaling €1.0 billion at April 1, 2017 bearing interest at a 4% fixed rate and maturing in 2024. In addition, the Company has provided Disneyland Paris a €0.4 billion line of credit bearing interest at EURIBOR plus 2% and maturing in 2023. At April 1, 2017, €190 million is outstanding under the line of credit. The loans and line of credit are eliminated upon consolidation.

The Company has waived royalties and management fees for the fourth quarter of fiscal 2016 through the third quarter of fiscal 2018.

Hong Kong Disneyland Resort

The Government of the Hong Kong Special Administrative Region (HKSAR) and the Company have 53% and 47% equity interests in Hong Kong Disneyland Resort, respectively.

As part of financing the construction of a third hotel, which opened April 30, 2017, the Company and HKSAR have provided loans with outstanding balances of $137 million and $92 million, respectively, which bear interest at a rate of three month HIBOR plus 2% and mature in September 2025. The Company’s loan is eliminated upon consolidation.

Shanghai Disney Resort

Shanghai Shendi (Group) Co., Ltd (Shendi) and the Company have 57% and 43% equity interests in Shanghai Disney Resort, respectively. A management company, in which the Company has a 70% interest and Shendi a 30% interest, is responsible for operating Shanghai Disney Resort.

The Company has provided Shanghai Disney Resort with long-term loans totaling $768 million, bearing interest at rates up to 8%. In addition, the Company has an outstanding balance of $290 million due from Shanghai Disney Resort related to development and pre-opening costs of the resort and outstanding royalties and management fees. The Company has also provided Shanghai Disney Resort with a $157 million line of credit bearing interest at 8%. There is no outstanding balance under the line of credit at April 1, 2017. The loan and line of credit are eliminated upon consolidation.

Shendi has provided Shanghai Disney Resort with term loans totaling 6.6 billion yuan (approximately $1.0 billion), bearing interest at rates up to 8% and maturing in 2036; however, early repayment is permitted. Shendi has also provided Shanghai Disney Resort with a 1.4 billion yuan (approximately $199 million) line of credit bearing interest at 8%. There is no outstanding balance under the line of credit at April 1, 2017.