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Analysis of segment disclosure footnote
The Walt Disney Company identifies four operating segments. Following are excerpts from the
description provided in the company's October 3, 2020 10-K:
The Walt Disney Company, together with its subsidiaries, is a diversified worldwide
entertainment company with operations in four business segments: Media Networks, Parks and
Resorts, Studio Entertainment, and Consumer Products & Interactive Media.
The segment footnote in The Walt Disney Company 2020 annual report follows (in millions):
a. For 2020, confirm that each of Disney's segments exceeds one or more of the quantitative
thresholds. Calculate the quantitative threshold tests for 2020.
Note: Round answers to the nearest percent (ex: 0.2345 = 23%).
2020 2019 2018
Revenues
Media Networks $28,393 $24,827 $21,922
Parks, Experiences and Products
Third Parties 17,038 26,786 25,257
Intersegment (536) (561) (556)
16,502 26,225 24,701
Studio Entertainment
Third parties 9,100 10,566 9,509
Intersegment 536 561 556
9,636 11,127 10,065
Direct-to-Consumer & International 16,967 9,386 3,414
Eliminations (6,110) (1,958) (668)
Total consolidated revenues $65,388 $69,607 $59,434
Segment operating income (loss)
Media Networks $9,022 $7,479 $7,338
Parks, Experiences and Products (81) 6,758 6,095
Studio Entertainment 2,501 2,686 3,004
Direct-to-Consumer & International (2,806) (1,835) (738)
Eliminations (528) (241) (10)
Total segment operating income $8,108 $14,847 $15,689
Reconciliation of segment operating income to income
2020 2019 2018
from continuing operations before income taxes
Segment operating income $8,108 $14,847 $15,689
Corporate and unallocated shared expenses (817) (987) (744)
Restructuring and impairment charges (5,735) (1,183) (33)
Other income, net 1,038 4,357 601
Interest expense, net (1,491) (978) (574)
Amortization of TFCF and Hulu intangible assets
and fair value step-up on film and television costs (2,846) (1,595) -
Impairment of equity investments - (538) (210)
Income(loss) from continuing operations before income taxes $(1,743) $13,923 $14,729
Capital expenditures
Media Networks
Cable Networks $61 $93 $96
Broadcasting 51 81 107
Parks, Experiences and Products
Domestic 2,145 3,294 3,223
International 759 852 677
Studio Entertainment 77 88 96
Direct-to-Consumer & International 594 258 107
Corporate 335 210 159
Total capital expenditures $4,022 $4,876 $4,465
Depreciation expense
Media Networks $203 $191 $199
Parks, Experiences and Products
Domestic 1,634 1,474 1,449
International 694 724 768
Studio Entertainment 87 74 55
Direct-to-Consumer & International 348 214 106
Depreciation expense inc. in segment operating income 2,966 2,677 2,577
Corporate 174 167 181
Total depreciation expense $3,140 $2,844 $2,758
Amortization of intangible assets
Media Networks $4 $0 $0
Parks, Experiences and Products 109 108 110
Studio Entertainment 59 61 64
Direct-to-Consumer & International 112 111 79
Amortization of intangible assets inc. in segment operating income 284 280 253
2020 2019 2018
TFCF and Hulu intangible assets 1,921 1,043 -
Total amortization of intangible assets $2,205 $1,323 $253
Identifiable assets
Media Networks $62,220 $63,519
Parks, Experiences and Products 42,320 41,978
Studio Entertainment 32,811 34,323
Direct-to-Consumer & International 45,538 48,606
Corporate 19,691 6,025
Eliminations (1,031) (467)
Total consolidated assets $201,549 $193,984

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Analysis of segment disclosure footnote The Walt Disney Company ident.docx

  • 1. Analysis of segment disclosure footnote The Walt Disney Company identifies four operating segments. Following are excerpts from the description provided in the company's October 3, 2020 10-K: The Walt Disney Company, together with its subsidiaries, is a diversified worldwide entertainment company with operations in four business segments: Media Networks, Parks and Resorts, Studio Entertainment, and Consumer Products & Interactive Media. The segment footnote in The Walt Disney Company 2020 annual report follows (in millions): a. For 2020, confirm that each of Disney's segments exceeds one or more of the quantitative thresholds. Calculate the quantitative threshold tests for 2020. Note: Round answers to the nearest percent (ex: 0.2345 = 23%). 2020 2019 2018 Revenues Media Networks $28,393 $24,827 $21,922 Parks, Experiences and Products Third Parties 17,038 26,786 25,257 Intersegment (536) (561) (556) 16,502 26,225 24,701 Studio Entertainment Third parties 9,100 10,566 9,509 Intersegment 536 561 556 9,636 11,127 10,065 Direct-to-Consumer & International 16,967 9,386 3,414 Eliminations (6,110) (1,958) (668) Total consolidated revenues $65,388 $69,607 $59,434 Segment operating income (loss) Media Networks $9,022 $7,479 $7,338 Parks, Experiences and Products (81) 6,758 6,095 Studio Entertainment 2,501 2,686 3,004 Direct-to-Consumer & International (2,806) (1,835) (738) Eliminations (528) (241) (10) Total segment operating income $8,108 $14,847 $15,689 Reconciliation of segment operating income to income
  • 2. 2020 2019 2018 from continuing operations before income taxes Segment operating income $8,108 $14,847 $15,689 Corporate and unallocated shared expenses (817) (987) (744) Restructuring and impairment charges (5,735) (1,183) (33) Other income, net 1,038 4,357 601 Interest expense, net (1,491) (978) (574) Amortization of TFCF and Hulu intangible assets and fair value step-up on film and television costs (2,846) (1,595) - Impairment of equity investments - (538) (210) Income(loss) from continuing operations before income taxes $(1,743) $13,923 $14,729 Capital expenditures Media Networks Cable Networks $61 $93 $96 Broadcasting 51 81 107 Parks, Experiences and Products Domestic 2,145 3,294 3,223 International 759 852 677 Studio Entertainment 77 88 96 Direct-to-Consumer & International 594 258 107 Corporate 335 210 159 Total capital expenditures $4,022 $4,876 $4,465 Depreciation expense Media Networks $203 $191 $199 Parks, Experiences and Products Domestic 1,634 1,474 1,449 International 694 724 768 Studio Entertainment 87 74 55 Direct-to-Consumer & International 348 214 106 Depreciation expense inc. in segment operating income 2,966 2,677 2,577 Corporate 174 167 181 Total depreciation expense $3,140 $2,844 $2,758 Amortization of intangible assets Media Networks $4 $0 $0 Parks, Experiences and Products 109 108 110 Studio Entertainment 59 61 64 Direct-to-Consumer & International 112 111 79 Amortization of intangible assets inc. in segment operating income 284 280 253
  • 3. 2020 2019 2018 TFCF and Hulu intangible assets 1,921 1,043 - Total amortization of intangible assets $2,205 $1,323 $253 Identifiable assets Media Networks $62,220 $63,519 Parks, Experiences and Products 42,320 41,978 Studio Entertainment 32,811 34,323 Direct-to-Consumer & International 45,538 48,606 Corporate 19,691 6,025 Eliminations (1,031) (467) Total consolidated assets $201,549 $193,984