2011 Results in

[andrewuk]

http://http://corporate.disneylandparis.com/CORP/EN/Neutral/Images/uk-2011-11-09-euro-disney-sca-reports-annual-results-for-fiscal-year-2011.pdf

And although they got 15.6 million visitors, it was not as good as it should have been:

The Group has defined annual performance objectives under its debt agreements
1
. In the Fiscal Year, the Group did not
meet its performance objectives and must defer the following amounts incurred in the Fiscal Year into long-term
subordinated debt
2
:
- € 25.0 million of the Fiscal Year royalties and management fees due to The Walt Disney Company ("TWDC"),
and
- € 15.1 million of interest due to the Caisse des dépôts et consignations ("CDC").
The Group is also required to defer an additional € 5.1 million of interest that will be incurred, and otherwise payable to
the CDC during the first quarter of fiscal year 2012.
As a result of utilizing the entire € 45.2 million of deferrals available to the Group with respect to the Fiscal Year, the
Group's recurring annual investment budget for fiscal year 2012 and thereafter will be permitted up to 3% of the prior
fiscal year's adjusted consolidated revenues
3
, unless the Group obtains lenders agreement to increase the budget. For
fiscal year 2012, if no agreement is  reached, the Group's recurring annual investment budget will be reduced by
approximately € 28 million, compared to the € 68 million incurred in the Fiscal Year.  
The Group must also respect certain financial covenants under its debt agreements. The Group believes it has achieved
compliance with such covenants with the assistance of TWDC's agreement, as permitted under the debt agreements, to
defer a further € 8.9 million of 2011 royalties into long-term subordinated debt.  

Interestingly, there is still the possibility of convincing the lenders to increase the budget, but otherwise they have no money.

[DLRP Roundup!]

There is some positive news there:

Increased guest count.
Increased average spend.

Without its existing debt, it'd be highly profitable.

[Josh]

I wish TWDC would hault the pay-offs of the debts until EDL can more easily pay them off. How does it expect DLP to be able to expand and get greater visitor numbers and pay them hundreds of millions each year?

[DLRP Roundup!]

I wish TWDC would hault the pay-offs of the debts until EDL can more easily pay them off. How does it expect DLP to be able to expand and get greater visitor numbers and pay them hundreds of millions each year?

It's an oddly weird scenario to have such a huge stake in a company like TWDC has in EuroDisney SCA, and still claim royalties, however I guess its to get paid almost double, it gets management fee's and if the park does well it gain even more money in stock assets. It certainly seems rather silly to be asking for payment when that could be delayed a bit while the French home debt was repaid in full first :/

[strike:13v8qicv]There wasn't an issued amount of shares total in there that I could see, always wondered that after the consolidation.[/strike:13v8qicv] - 38.98 million.

[peter]

To be hones I think that if it hadn't opened in a recession, then there is the real possibility that it would have been the most profitable Disney resort, perhaps only second to disneyworld

[DLRP Roundup!]

Theres always the double edged sword coming too:

If EDL have until 2030 to open a third gate, that's really less than 18 years (since we know 2012 plans) to expand WDS and then open some other type of park, which is either going to destroy the place with more debt or be a water park. If they'd cleared all previous debt, it would just be a case of doubling the size of the resort in the same time frame its existed, sadly its not.

[andrewuk]

I wonder how many times TWDC execs will have to read 'the Group did not
meet its performance objectives ' until they decide to do something!

[ed-uk]

TWDC has done something about it in the past, thay have helped to bale EuroDisney out a couple of times and quite rightly. The general consensus seems to be that Disney  built too many hotels at DLP and made them too expensive when the resort opened. It's worth remembering that it took the company 46 years to build a second park at Disneyland in California and there's no talk of a third park there at the moment. I've seen worse financial results at EuroDisney than this years, but it is frustrating.

[DopeyDad]

If I understand these results correctly, they have still reduced their overall debt burden, but have had to defer some payments to TWDC (royalties and some interest). TWDC did effectively extend extra money this year for the huge maintenance program which added to the debt, but we should see the payoff for this later.
the problem TWDC would always have with writing off any debt is that DLP is not just owned by them so they won't just give money away to investors. I think there is also some French law about buying people out too, although I'm far from certain.
wasn't there a DLP plan to reduce debt by x% by a certain year? I'll try to find the announcement and I wonder if they are still on track for that?

[ed-uk]

I guess we all want to see new rides and themeing in the WDS, and that seems to be in the balance. Can they afford it, can they borrow the money? Let's hope so. Resort revenues are up 5% and 15.6 million people went, attendence is up 600,000. No theme park in Europe gets 15.6 million visitors. I remember the year in the mid 1990s when attendence fell to  about 8 million things got so bad, and even after that DLP was still Europes top tourist attraction. But TWDC, banks and Shareholders agreed to bale EuroDisney out.

[peter]

with everything thats happening at the moment with the eurozone, there are some rumours that many countries, including france, are going to change legislation about finance. wouldn't it be nice if one of the changes let disney buy up euro disney

[ed-uk]

No, that wouldn't be nice. It would force EuroDisney shareholders to sell up. I don't think TWDC would do that anyway.

[andrewuk]

TWDC have done something about it in the past, thay have helped to bale EuroDisney out a couple of times and quite rightly. The general consensus seems to be that Disney  built too many hotels at DLP and made them too expensive when the resort opened. It's worth remembering that it took the company 46 years to build a second park at Disneyland in California and there's no talk of a third park there at the moment. I've seen worse financial results at EuroDisney than this years, but it is frustrating.

Well that's true, but only when the place was on the verge of closing. They don't seem to care about just letting the place lose money every year and, as a consequence, have its investment budget cut. I would hope that they would take some responsibility for their decisions regarding those hotels and give EuroDisney some consistent help.

[peter]

You know, I'm starting to doubt how truthful Eurodisney were being when they said they have enough money set aside o clear the debt

[DLRP Roundup!]

Well they do in assets, and they are making debt reduction rather than increasing it so again its unlikely they'll have to sell up. I also really don't see TWDC allowing a resort to be purchased by anyone else, would be an absolute brand disaster for them.

Imagine Woody woodpecker sat upon the top of the castle...