International Theme Park Investments

The Company has a 51% effective ownership interest in the operations of Disneyland Paris, a 48% ownership interest in the operations of HKDL and a 43% ownership interest in the operations of Shanghai Disney Resort, all of which are VIEs consolidated in the Company’s financial statements. See Note 1 for the Company's policy on consolidating VIEs.

The following tables present summarized balance sheet information for the Company as of December 28, 2013 and September 28, 2013, reflecting the impact of consolidating the International Theme Parks balance sheets.



	As of December 28, 2013
	Before International Theme Parks Consolidation		International Theme Parks and Adjustments			Total
Cash and cash equivalents	$	3,785	$	612		$	4,397
Other current assets	11,111		255			11,366
Total current assets	14,896		867			15,763
Investments/Advances	6,524		(3,740		)	2,784
Parks, resorts and other property	17,017		5,550			22,567
Other assets	42,021		31			42,052
Total assets	$	80,458	$	2,708		$	83,166

Current portion of borrowings	$	3,687	$	—		$	3,687
Other current liabilities	11,520		489			12,009
Total current liabilities	15,207		489			15,696
Borrowings	11,449		265			11,714
Deferred income taxes and other long-term liabilities	8,306		154			8,460
Equity	45,496		1,800			47,296
Total liabilities and equity	$	80,458	$	2,708		$	83,166



	As of September 28, 2013
	Before International Theme Parks Consolidation		International Theme Parks and Adjustments			Total
Cash and cash equivalents	$	3,325	$	606		$	3,931
Other current assets	9,896		282			10,178
Total current assets	13,221		888			14,109
Investments/Advances	6,415		(3,566		)	2,849
Parks, resorts and other property	17,117		5,263			22,380
Other assets	41,879		24			41,903
Total assets	$	78,632	$	2,609		$	81,241

Current portion of borrowings	$	1,512	$	—		$	1,512
Other current liabilities	9,622		570			10,192
Total current liabilities	11,134		570			11,704
Borrowings	12,501		275			12,776
Deferred income taxes and other long-term liabilities	8,466		145			8,611
Equity	46,531		1,619			48,150
Total liabilities and equity	$	78,632	$	2,609		$	81,241

The following table presents summarized income statement information of the Company for the quarter ended December 28, 2013, reflecting the impact of consolidating the International Theme Parks income statements.



	Before International Theme Parks Consolidation⁽¹⁾			International Theme Parks and Adjustments			Total
Revenues	$	11,745		$	564		$	12,309
Cost and expenses	(9,086		)	(558		)	(9,644		)
Restructuring and impairment charges	(19		)	—			(19		)
Other income/(expense), net	6			—			6
Interest income/(expense), net	65			(16		)	49
Equity in the income of investees	235			4			239
Income before income taxes	2,946			(6		)	2,940
Income taxes	(1,036		)	—			(1,036		)
Net income	$	1,910		$	(6	)	$	1,904


⁽¹⁾	These amounts include the International Theme Parks under the equity method of accounting. As such, royalty and management fee income from these operations is included in Revenues and our share of their net income/(loss) is included in Equity in the income of investees. There were $14 million of royalties and management fees recognized for the quarter ended December 28, 2013.

The following table presents summarized cash flow statement information of the Company for the quarter ended December 28, 2013, reflecting the impact of consolidating the International Theme Parks cash flow statements.



	Before International Theme Parks Consolidation			International Theme Parks and Adjustments			Total
Cash provided by/(used in) operations	$	1,268		$	(56	)	$	1,212
Investments in parks, resorts and other property	(334		)	(324		)	(658		)
Cash (used in)/provided by other investing activities	(71		)	202			131
Cash (used in)/provided by financing activities	(417		)	180			(237		)
Impact of exchange rates on cash and cash equivalents	14			4			18
Increase in cash and cash equivalents	460			6			466
Cash and cash equivalents, beginning of period	3,325			606			3,931
Cash and cash equivalents, end of period	$	3,785		$	612		$	4,397

During the quarter ended December 28, 2013, Disneyland Paris borrowed €50 million ($68 million) under a line of credit with the Company and subsequent to the quarter end borrowed an additional €50 million.

In July 2009, the Company entered into a capital realignment and expansion plan for HKDL with the Government of the Hong Kong Special Administrative Region (HKSAR), HKDL’s majority shareholder. The expansion cost approximately $0.5 billion, was completed in 2013 and was financed equally by the Company and HKSAR. As a result the Company’s equity interest in HKDL increased from 43% to 48%.

In addition, HKSAR holds a right to receive additional shares over time if HKDL exceeds certain return on asset performance targets. The amount of additional shares HKSAR can receive varies with the extent to which the performance targets are exceeded but is capped on both an annual and cumulative basis. Based on the number of shares currently outstanding, the additional shares could decrease the Company’s equity interest to no less than 38% over a period no shorter than 18 years. HKDL may begin to exceed the performance targets in fiscal 2014, in which case HKSAR would be entitled to receive additional equity interests beginning in 2015. The maximum additional interest which HKSAR can receive in 2015 would reduce the Company's equity interest by approximately 1 percentage point.