EURO DISNEY S.C.A. * Euro Disney Announces Extended Period to Approve Memorandum of Agreement,
and Reports Flat Resort Revenues for the Nine Months Ended June 30, 2004
* 4% growth in Theme Park Revenues despite soft travel and tourism market
(Marne-la-Vallée, August 2, 2004) Euro Disney S.C.A., operator of Disneyland
Resort Paris, reported today that the requisite number of lenders has agreed to
extend the current debt covenant waivers from July 31, 2004 to September 30,
2004. The Walt Disney Company ("TWDC") and Caisse des Dépôts et Consignations
("CDC") have also agreed to defer through the extended waiver period amounts
owed on the Company's line of credit and previously deferred interest,
respectively.
As previously disclosed on June 29, 2004, the requisite number of lenders
approved an extension of the current debt covenant waivers to July 31, 2004, to
allow all of the lenders sufficient time to review and approve the Memorandum
of Agreement ("MOA") that was signed by the Company, TWDC and the CDC and
approved by the Steering Committee of the Company's other lenders on June 8,
2004.
The MOA requires unanimous lender approval to become effective. Certain lenders
have not provided their approval, which has resulted in ongoing negotiations
between the Company, TWDC and its lenders regarding the content of the MOA.
If these negotiations are not successful, TWDC and the Company's lenders would
be able to demand payments for amounts owed after expiration of the extended
waiver period, which the Company would not be able to satisfy.
Commenting on the recent developments, Jeffrey R. Speed, Senior Vice-President
and Chief Financial Officer of Euro Disney S.A., said: "While the financial restructuring process is continuing in order to obtain
lender consent, we continue to believe that a prompt resolution remains in the
best interest of all stakeholders. We are intent on achieving resolution as
soon as possible, thereby allowing the Company's resources to be focused
entirely on profitably growing the business." Revenues for the Nine Months Ended June 30, 2004 The Company also announced today that resort revenues were flat for the first
nine months over the corresponding period of the prior year despite softness in
the European travel and tourism market. Theme park revenue growth of 4% over
the prior year for the nine months ended June 30, 2004, was offset by the
effect of reduced occupancy in owned and operated hotels as well as a planned
reduction in real estate development. The reduced hotel occupancy reflects
increased capacity from on-site, third-party hotels that opened last year.
Disneyland Resort Paris total revenues, including its Real Estate Segment,
decreased 1% for the nine months ended June 30, 2004 to Euro 740.4 million
compared to Euro 747.6 million on a pro forma basis for the corresponding period
of the prior year.
(Unaudited) Variation
Nine Months Ending June
30,
Pro Forma1
(Euro in millions) 2004 2003 Amount %
Segment Revenues
Theme Parks 366.1 352.6 13.5 4 %
Hotels and Disney Village 290.7 307.1 (16.4) (5) %
Other 76.8 75.8 1.0 1 %
Resort Segment 733.6 735.5 (1.9) - %
Real Estate Segment 6.8 12.1 (5.3) (44) %
Total Revenues 740.4 747.6 (7.2) (1) % __________________ 1 Effective from the beginning of fiscal year 2004, the Company implemented
mandatory new accounting rules with respect to the consolidation of financing
companies that are not legally controlled by the Company. As a result,
prior-year revenues have been presented on a pro forma basis as if this change
had been in effect during the prior year. As-reported revenues for the nine
months ended June 30, 2003 amounted to Euro 748.2 million.
Theme park revenues increased 4% over the prior year to reach Euro 366.1 million
for the nine months ended June 30, 2004 primarily as a result of higher average
spending per guest, partially offset by slightly lower theme park attendance.
Hotels and Disney Village revenues decreased 5% for the nine months ended June
30, 2004 to Euro 290.7 million, as a result of lower average hotel occupancy
rates, partially offset by slightly higher average daily guest spending per
room.
Revenues generated by the Real Estate Segment were Euro 6.8 million, reflecting a
decrease versus the prior year of Euro 5.3 million, in line with our expectations.
For the quarter ended June 30, 2004, total revenues decreased 3% to Euro 266.6
million from a prior-year pro-forma amount of Euro 275.4 million. Resort Segment
revenues decreased 2% to Euro 264.5 million compared to Euro 268.6 million in the
pro-forma prior year. Although third quarter theme park revenues increased 1%
reflecting higher average guest spending, theme park attendance, hotel
occupancy and average daily guest spending per room were below prior-year
levels. The third quarter was also adversely affected versus the prior year by
a reduction in the number of European mid-week holidays in May. Real Estate
Segment revenues decreased Euro 4.7 million during the quarter to Euro 2.1 million.
Reduced revenues and higher operating costs, including the reinstatement of
royalties and management fees at their full contractual rates, increased
marketing and sales efforts, as well as costs associated with the financial
restructuring, will result in a significant increase in the Company's net loss
for the fiscal year ended September 30, 2004 versus the prior year.
At June 30, 2004, the Company had available cash and liquidity of Euro 62.7
million, consisting of Euro 20 million of available cash and cash equivalents (Euro
68.4 million in cash and cash equivalents less Euro 48.4 million belonging to the
consolidated financing companies), plus Euro 42.7 million of available liquidity
under the TWDC line of credit. Management believes the Company has sufficient
liquidity through the waiver extension period.
****************************************** André Lacroix, Chairman and Chief Executive Officer of Euro Disney S.A., said: "Our revenues for the first nine months reflect a relatively strong performance
in an otherwise soft market for European travel and tourism. We remain
confident concerning the growth potential of Disneyland Resort Paris, the
number one tourist destination in Europe. We are focused on profitably growing
our business through innovative product development and strong sales and
marketing efforts in each of our core markets. An excellent example of our
innovative product development is the new Lion King Show, which was launched on
June 26th. This dynamic stage production has already begun to delight
standing-room only crowds in the Disneyland Park." Corporate Communication Investor Relations Philippe Marie Sandra Picard-Ramé Tel: +331 64 74 59 50 Tel: +331 64 74 56 28 Fax: +331 64 74 59 69 Fax: +331 64 74 56 36 e-mail: philippe.marie@disney.com e-mail: sandra.picard@disney.com See www.eurodisney.com for a copy of the MOA and other Financial Information Code ISIN: FR0000125874 Code Reuters: EDL.PA Sicovam: 12 587 Code Bloomberg: EDL FP Euro Disney S.C.A. and its subsidiaries operate the Disneyland Resort Paris
which includes: Disneyland Park, Walt Disney Studios Park, seven themed hotels
with approximately 5,800 rooms (excluding 2,033 additional third-party rooms
located on the site), two convention centres, Disney Village, a dining,
shopping and entertainment centre, and a 27-hole golf facility. The Group's
operating activities also include the management and development of the
2,000-hectare site, which currently includes approximately 1,000 hectares of
undeveloped land. Euro Disney S.C.A.'s shares trade in Paris (SRD), London and
Brussels.
Management believes certain statements in this press release may constitute
"forward-looking statements" within the meaning of the U.S. Private Securities
Litigation Reform Act of 1995. These statements are made on the basis of
management's views and assumptions regarding future events and business
performance as of the time the statements are made. Actual results may differ
materially from those expressed or implied. Such differences may result from
actions taken by the Company, as well as from developments beyond the Company's
control, including changes in political or economic conditions. Other factors
that may affect results are identified in the Company's documents filed with
the U.S. Securities and Exchange Commission.
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