What's black and white and red all over? A panda balance sheet.

The Toronto Zoo board released its annual budget numbers last week, and despite the star attractions of pandas and a baby polar bear, the numbers were disappointing. Attendance in 2014 was 22 per cent lower than anticipated, and revenues were 14 per cent less than expected. The zoo will dip into its reserve funds to cover the difference. The attendance and revenue report in part attributes the shortfall to cold weather and the opening of Ripley's Aquarium of Canada, a competing attraction located next to the CN Tower that opened in late 2013.

While the pandas are a marquee attraction that can drive revenue growth, they come with prohibitive costs.

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Er Shun and Da Mao have been at the Toronto Zoo since March, 2013, and in that year, their presence drove zoo attendance up 13 per cent after declines from 2009 to 2012. Last year, the zoo drew more people than any year since 1995, when it played host to white lions. Merchandise sales were way up too, because pandas are cute, and so are their stuffed animals.

But the bottom line is a different story. Excluding marketing and promotion, the zoo spends about $2.6-million on the two animals annually.

The contract with the Chinese government even says that the zoo can't profit on the animals through a special surcharge or fee, a policy designed to avoid zookeeping that put profits before pandas in the 1980s.

When the Toronto Zoo negotiated with China for the pandas, Councillor Giorgio Mammoliti, an enthusiastic panda booster, was one of the most vocal in making the case. "There's millions of dollars to be made," he said in November, 2010, arguing the bears would be a boon to the city.

Apparently, there are not millions of dollars to be made. So what's the value in hosting the bears?

The zoo pays an annual $1-million hosting fee to China, money that goes to panda conservation efforts in their home country.

The zoo also spent $3-million on renovating the panda shelter, which used to hold tigers.

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Pandas are picky and prodigious eaters, so the zoo budgets $550,000 annually to have 38,000 kilograms of bamboo shipped by FedEx from Memphis, where the Tennessee city's zoo grows the plant. Toronto's climate is not well-suited to doing the same. There's also $238,149 in staffing costs, $150,000 in annual panda insurance – and assorted smaller costs, such as $4,987 to transport a Jurassic Park-like canister of panda semen from China to try to impregnate Er Shun. Da Mao, who is younger than Er Shun, is not yet old enough to be interested.

"Pandas are very expensive animals," says Jaap Wensvoort, a Toronto Zoo nutritionist.

The Toronto Zoo doesn't isolate financial numbers for pandas, but the Memphis Zoo reportedly loses $300,000 annually on their pandas.

Mr. Wensvoort does not work exclusively with the pandas, but part of his job is to track their nutrition, including weighing up to 20 kilograms of panda fecal matter a day to see how much they ate. He says the bears reject 75 per cent of the bamboo they're offered, and there's little predictability to what they want on a given day.

"They do not compromise," he says. "And that's why they cost so much."

Eight years ago, the four American zoos that play host to pandas – there are only around 300 in captivity worldwide, with the vast majority of those in Chinese conservations – tried to reach a financial compromise with Chinese officials.

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They asked for lower hosting fees when their most recent agreements expired, citing financial difficulty. The zoos received a slight reduction, but costs are still high.

While attendance initially goes up to see the pandas, the effect tends to wane after the third year. Zoos can get an additional attendance boost if a cub is born, but panda breeding is notoriously difficult. Even then, the zoo would have to pay an additional $600,000 hosting fee for each newborn panda.

Steve Weiss, the director of Schulich's MBA program at York University, wrote a Harvard Business case study on the subject in 2013. He argues that while pandas are expensive, their value goes beyond the bottom line.

"There's improved scientific expertise, more collaboration with zoos so that other animals can be brought to the zoo, improved reputation or status of the zoo," he said in an interview. Mr. Weiss adds that pandas fit the education and conservation mandates of zoos, and that any examination of their value must include both financial and non-financial contributions.

"We need to look at both the financial return and the other benefits that are so hard to quantify."

Employees at the zoo add their own versions of what makes the pandas worthwhile. Maria Franke, the curator of mammals at the zoo, says the pandas have given the zoo a project to rally around. "The pandas bring the whole zoo together," she said.

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Karyn Tunwell, a senior keeper at the zoo who helped train Er Shun to take an ultrasound, cites the value of the cultural and professional exchange with the Chinese attendants at the zoo.

Even family members of employees show their enthusiasm – the son of zoo spokesperson Katie Gray made "panda" his first word.

Professor Ed McCord, who teaches at the University of Pittsburgh and who wrote the book The Value of Species, says that hosting pandas represents a bigger picture.

"We need an awakening of the public to what these creatures actually represent," he says, arguing that the long-term view is not represented by any particular balance sheet.

"If you just stop short and begin looking hard at numbers, you lose sight of and forget your creative task of making things happen" to preserve the species, Mr. McCord says.

"Each species in its design represents something of extraordinary, exquisite complexity that is the result of billions of years of Earth's sculpting through natural selection … I don't know how one puts a number on that."