International Theme Parks

The Company has a 47% ownership interest in the operations of Hong Kong Disneyland Resort and a 43% ownership interest in the operations of Shanghai Disney Resort (together, the Asia International Theme Parks), which are both VIEs consolidated in the Company’s financial statements. See Note 1 for the Company’s policy on consolidating VIEs. Disneyland Paris was also a consolidated VIE until the Company acquired 100% ownership of Disneyland Paris in June 2017. Given our 100% ownership, the Company will continue to consolidate Disneyland Paris’ financial results. The Asia International Theme Parks and Disneyland Paris are collectively referred to as the International Theme Parks.

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 July 1, 2017 and October 1, 2016:



	July 1, 2017		October 1, 2016
Cash and cash equivalents	$	598	$	1,008
Other current assets	417		331
Total current assets	1,015		1,339
Parks, resorts and other property	9,263		9,270
Other assets	89		88
Total assets ⁽¹⁾	$	10,367	$	10,697

Current liabilities	$	1,305	$	1,499
Borrowings - long-term	1,116		1,087
Other long-term liabilities	318		256
Total liabilities ⁽¹⁾	$	2,739	$	2,842


⁽¹⁾	The total assets of the Asia International Theme Parks were $7.8 billion and $8.2 billion, which primarily consist of parks, resorts and other property of $7.2 billion and $7.3 billion at July 1, 2017 and October 1, 2016, respectively. The total liabilities of the Asia International Theme Parks were $2.0 billion and $2.2 billion at July 1, 2017 and October 1, 2016, respectively.

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



	July 1, 2017
Revenues	$	2,306
Costs and expenses	(2,373		)
Equity in the loss of investees	(8		)

For the nine months ended July 1, 2017, International Theme Parks’ royalty and management fees of $115 million are eliminated in consolidation but are considered in calculating earnings allocated to noncontrolling interests.

For the nine months ended July 1, 2017, International Theme Parks’ cash flows included in the Company’s Condensed Consolidated Statement of Cash Flows were $170 million generated from operating activities, $758 million used in investing activities and $13 million generated from financing activities. The majority of cash flows used in investing activities were for the Asia International Theme Parks.

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), a 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 the purchase price of €2 per share.

In the third quarter of fiscal 2017, the Company acquired the remaining outstanding shares of EDSCA at €2 per share, a total cost of €224 million ($250 million), and EDSCA was delisted from Euronext Paris.

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 $775 million, bearing interest at rates up to 8%. In addition, the Company has an outstanding balance of $281 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 July 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, with early repayment permitted. Shendi has also provided Shanghai Disney Resort with a 1.4 billion yuan (approximately $202 million) line of credit bearing interest at 8%. There is no outstanding balance under the line of credit at July 1, 2017.