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 June 28, 2014 and September 28, 2013, reflecting the impact of consolidating the International Theme Parks balance sheets.



	As of June 28, 2014
	Before International Theme Parks Consolidation		International Theme Parks and Adjustments			Total
Cash and cash equivalents	$	3,114	$	976		$	4,090
Other current assets	10,812		303			11,115
Total current assets	13,926		1,279			15,205
Investments/Advances	6,926		(4,068		)	2,858
Parks, resorts and other property	16,966		6,047			23,013
Other assets	42,607		40			42,647
Total assets	$	80,425	$	3,298		$	83,723

Current portion of borrowings	$	3,216	$	—		$	3,216
Other current liabilities	9,421		714			10,135
Total current liabilities	12,637		714			13,351
Borrowings	12,666		254			12,920
Deferred income taxes and other long-term liabilities	8,664		176			8,840
Equity	46,458		2,154			48,612
Total liabilities and equity	$	80,425	$	3,298		$	83,723



	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 nine months ended June 28, 2014, reflecting the impact of consolidating the International Theme Parks income statements.



	Before International Theme Parks Consolidation⁽¹⁾			International Theme Parks and Adjustments			Total
Revenues	$	34,785		$	1,639		$	36,424
Cost and expenses	(25,565		)	(1,715		)	(27,280		)
Restructuring and impairment charges	(67		)	—			(67		)
Other income/(expense), net	(31		)	—			(31		)
Interest income/(expense), net	94			(33		)	61
Equity in the income of investees	625			53			678
Income before income taxes	9,841			(56		)	9,785
Income taxes	(3,406		)	—			(3,406		)
Net income	$	6,435		$	(56	)	$	6,379


⁽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 $54 million of royalties and management fees recognized for the nine months ended June 28, 2014.

The following table presents summarized cash flow statement information of the Company for the nine months ended June 28, 2014, 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 operations	$	6,446		$	229		$	6,675
Investments in parks, resorts and other property	(1,192		)	(1,056		)	(2,248		)
Cash (used in)/provided by other investing activities	(636		)	592			(44		)
Cash (used in)/provided by financing activities	(4,698		)	608			(4,090		)
Impact of exchange rates on cash and cash equivalents	(131		)	(3		)	(134		)
Change in cash and cash equivalents	(211		)	370			159
Cash and cash equivalents, beginning of period	3,325			606			3,931
Cash and cash equivalents, end of period	$	3,114		$	976		$	4,090

Disneyland Paris

The Company has provided Disneyland Paris €1.7 billion ($2.3 billion) of intercompany loans and a line of credit totaling €250 million ($340 million). The balance outstanding under the line of credit was €100 million ($136 million) at June 28, 2014.

Hong Kong Disneyland Resort

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 to the extent certain performance targets are exceeded but is capped on both an annual and cumulative basis. Based on the number of shares currently outstanding, these 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.

In February 2014, HKDL announced a plan to build a third hotel at the resort expected to open in 2017 at a cost of approximately $550 million. In July 2014, HKSAR Legislative Council approved the financing of the hotel construction, in which the Company will provide approximately $219 million of equity contributions and HKSAR will convert an equal amount of its outstanding loan to HKDL into equity. Additionally, the Company and HKSAR will provide shareholder loans of up to approximately $149 million and $104 million, respectively. The loans will mature on dates from fiscal 2022 through fiscal 2025 and bear interest at a rate of three month HIBOR plus 2%.

Shanghai Disney Resort

In fiscal 2011, the Company and Shanghai Shendi (Group) Co., Ltd. (Shendi) received Chinese central government approval of an agreement to build and operate a Disney Resort (Shanghai Disney Resort) in the Pudong district of Shanghai for a planned investment of approximately 29 billion yuan ($4.7 billion). Shanghai Disney Resort is owned by a joint venture, in which Shendi owns 57% and the Company owns 43%. An additional joint venture, in which the Company has a 70% interest and Shendi a 30% interest, is responsible for creating, constructing and operating Shanghai Disney Resort. Construction on the project, which includes a theme park, two hotels and a retail, dining and entertainment area, began in April 2011, and the resort opening date is expected to be announced in early calendar 2015.

In March 2014, the Company and Shendi received Chinese central government approval of an agreement to increase the planned investment by approximately 5 billion yuan ($0.8 billion), primarily to fund additional attractions, entertainment and other offerings to increase capacity at the theme park. The total investment in Shanghai Disney Resort will be funded in accordance with each partner’s ownership percentage, with approximately 67% from equity contributions and 33% from shareholder loans.