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We believe that our investments over the past years significantly enhanced the competitive advantage that many of our businesses enjoy and, as a result, we do not anticipate having to return to those levels of investment in the foreseeable future. At the domestic theme parks, for example, we continue to target an average annual capital spending level meaningfully below $1 billion, contrasting with average annual capital spending of approximately $2 billion between 1997 and 2001. Based on current economic conditions, we believe that our domestic parks will contribute meaningfully to our overall free cash flow, even after making the investments needed to keep the magic of our parks fresh and exciting for our Guests. Due to a new accounting standard (FIN 46R), we now consolidate in our financial statements the results of the operations of our two partially owned theme park companies in Paris and Hong Kong, including 100% of the capital expenditures at these parks. Because the Hong Kong park is currently under construction with a scheduled opening date in September 2005, the spending on that park will substantially increase our reported capital expenditures in the near term. The majority of the incremental capital spending for the Hong Kong park will be funded through debt financing backed by the assets of Hong Kong Disneyland, and contributions from our partner in this development, the Government of Hong Kong, so only a portion of the funding requires a cash outlay from Disney.
Today, we enjoy a less capital intensive business mix than we had in the past, which should enable us to fund internal growth with relatively lower levels of capital expenditures. Media Networks, which is comprised of relatively lower investment/higher return on capital businesses, now generates roughly half of Disney's total segment operating income, while Parks — a more capital-intensive business — which in 1990 accounted for roughly 60% of our operating profits — today represents 25% of our profit mix. Even though the dollar amount of investment going into the domestic parks will be lower now than it was during the period when we were building entire new parks, we want all of our shareholders, Cast Members, and customers to know that we are still planning and budgeting exciting new attractions at our parks that we believe will create magical experiences for our Guests for years to come.
(4)See reconciliation of non-GAAP financial metrics to equivalent GAAP financial metrics at end of the Financial Review.
(5)Represents 100% of Euro Disney and Hong Kong Disneyland's capital expenditures beginning April 1, 2004.
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