Please answer parts a, b, c, and d. Thanks!
Analysis of segment disclosure footnote The Walt Disney Company identifies four operating segments. Following are excerpts from the description provided in the company's September 30, 2017 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. Media The Media Networks segment includes cable and broadcast television networks, television production and distribution operations, domestic television stations, and radio networks and stations. Networks The Company owns and operates the Walt Disney World Resort in Florida: the Disneyland Resort in California; Disneyland Paris; Aulani, a Disney Resort & Spa in Hawaii; the Disney Vacation Club; the Disney Cruise Line; and Adventures by Disney. The Company manages Parks and and has effective ownership interests of 47% in Hong Kong Disneyland Resort and 43% in Shanghai Disney Resort, both of which are consolidated in our financial statements. The Company also licenses our intellectual property to a third party to operate the Tokyo Resorts Disney Resort in Japan. The Company's Walt Disney Imagineering unit designs and develops new theme park concepts and attractions as well as resort properties. The Studio Entertainment segment produces and acquires live-action and animated motion pictures, direct-to-video content, musical recordings and live stage plays. Studio Entertainment Consumer Products & Interactive Media The Consumer Products & Interactive Media segment licenses Company's trade names, characters, and visual and literary properties to various manufacturers, game developers, publishers, and retailers throughout the world. We also develop and publish games, primarily for mobile platforms, and books, magazines, and comic books.The segment also distributes branded merchandise directly through retail, online, and wholesale businesses. In addition, the segment's operations include website management and design, primarily for other Company businesses, and the development and distribution of online video content. The segment footnote in The Walt Disney Company 2017 annual report follows (in millions): 2017 2016 2015 Revenues Media Networks $23,510 $23,689 $23,264 Parks and Resorts 18,415 16.974 16,162 Studio Entertainment Third parties 7,887 8,701 6,838 Intersegment 492 740 528 8,379 9,441 7,366 Consumer Products Third parties 5,325 6,268 6,201 Intersegment (492) (740) (528) 4.833 5,528 5,673 Segment operating income (loss) Media Networks $6,902 $7,755 $7,793 Parks and Resorts 3,774 3.298 3,031 Studio Entertainment 2.355 2,703 1,973 Consumer Products & Interactive Media 1,744 1,965 1,884 Total segment operating income $14.775 $15.721 $14,681 Reconciliation of segment operating income to income before income taxes Segment operating income $14.775 $15.721 $14681 Corporate and unallocated shared expenses (582) (640) (643) Restructuring and impairment charges (98) (156) (53) Other income, net 78 Interest expense, net (385) (260) (117) 332 Infinity charge (129) Income before income taxes $13,788 $14,868 $13,868 Capital expenditures Media Networks Cable Networks $75 586 $127 Broadcasting 64 80 71 Parks and Resorts Domestic 2.375 2.180 1,457 International 816 2,035 2,147 Studio Entertainment 85 86 107 Consumer Products & Interactive Media 30 53 87 Corporate 178 253 269 Total capital expenditures $3,623 $4.773 $4.265 Depreciation expense Media Networks $225 $237 $245 Parks and Resorts Domestic 1,336 1,273 1.169 International 660 445 345 Studio Entertainment 50 51 55 Consumer Products & Interactive Media 63 63 69 Corporate 252 251 249 Total depreciation expense $2.586 $2.320 $2,132 Vice gain $18 3 3 $21 3 3 $12 3 65 116 $196 84 112 $207 114 $222 Amortization of intangible assets Media Networks Parks and Resorts Studio Entertainment Consumer Products & Interactive Media Total amortization of intangible assets Identifiable assets Media Networks Parks and Resorts Studio Entertainment Consumer Products & Interactive Media Corporate Unallocated Goodwill Total consolidated assets $32,475 $32,706 29.492 28 275 16,307 15.359 8,996 9,332 4,919 6,361 3,600 $95.789 $92,033 a. For 2017, confirm that each of Disney's segments exceeds one or more of the quantitative thresholds. Calculate the quantitative threshold tests for 2017. Round answers to the nearest percent (ex: 0.2345 = 2396). Operating Revenues Income % revenues Media Networks Parks and Resorts Studio Entertainment Consumer Products & Interactive Media Assets 0 % 0 % 0 % 0 % 0 % 0 % 0 % Using your calculations, indicate whether the segment exceeds each quantitative threshold test or not. Select Yes or No using the drop-down answer menu. Operating Revenues Income Assets . . + Media Networks Parks and Resorts Studio Entertainment Consumer Products & Interactive Media 2 . b. Using the breakdown of revenues and profit by segment, rank Disney's operating segments by the proportion of profit contributed in relation to its proportion of revenues. Select the answer that shows the segments in the correct order of highest to lowest. OMedia Networks, Parks and Resorts, Studio Entertainment, Consumer Products & Interactive Media OParks and Resorts, Media Networks, Studio Entertainment, Consumer Products & Interactive Media OMedia Networks, Parks and Resorts, Consumer Products, Studio Entertainment & Interactive Media OParks and Resorts, Media Networks, Consumer Products, Studio Entertainment, & Interactive Media c. Compute a rough DuPont analysis for 2017 of the operating segments (i.e., profit/revenues, revenues/total assets, and return on assets as the product of the profit and turnover ratios). Round profit margin to nearest percent (ex: 0.2345 = 239). Round asset turnover to two decimal places. For ROA, use previous rounded figures to compute and round final to the nearest percent. PM AT ROA Media Networks 0 % Parks and Resorts 0 % 0 % Studio Entertainment 0 % 0% 0 % Consumer Products & Interactive Media 0 % 0 % 0 % d. Compute the free cash flow for each operating segment over the three-year period using the following definition: free cash flow = operating profit + depreciation and amortization - capital expenditures. Use negative signs with answers, when appropriate. Free cash flow 2017 2016 2015 Media Networks 0 $ os 0 Parks and Resorts 0 0 0 Studio Entertainment 0 0 0 Consumer Products & Interactive Media 0 0 0 Total 0 S Analysis of segment disclosure footnote The Walt Disney Company identifies four operating segments. Following are excerpts from the description provided in the company's September 30, 2017 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. Media The Media Networks segment includes cable and broadcast television networks, television production and distribution operations, domestic television stations, and radio networks and stations. Networks The Company owns and operates the Walt Disney World Resort in Florida: the Disneyland Resort in California; Disneyland Paris; Aulani, a Disney Resort & Spa in Hawaii; the Disney Vacation Club; the Disney Cruise Line; and Adventures by Disney. The Company manages Parks and and has effective ownership interests of 47% in Hong Kong Disneyland Resort and 43% in Shanghai Disney Resort, both of which are consolidated in our financial statements. The Company also licenses our intellectual property to a third party to operate the Tokyo Resorts Disney Resort in Japan. The Company's Walt Disney Imagineering unit designs and develops new theme park concepts and attractions as well as resort properties. The Studio Entertainment segment produces and acquires live-action and animated motion pictures, direct-to-video content, musical recordings and live stage plays. Studio Entertainment Consumer Products & Interactive Media The Consumer Products & Interactive Media segment licenses Company's trade names, characters, and visual and literary properties to various manufacturers, game developers, publishers, and retailers throughout the world. We also develop and publish games, primarily for mobile platforms, and books, magazines, and comic books.The segment also distributes branded merchandise directly through retail, online, and wholesale businesses. In addition, the segment's operations include website management and design, primarily for other Company businesses, and the development and distribution of online video content. The segment footnote in The Walt Disney Company 2017 annual report follows (in millions): 2017 2016 2015 Revenues Media Networks $23,510 $23,689 $23,264 Parks and Resorts 18,415 16.974 16,162 Studio Entertainment Third parties 7,887 8,701 6,838 Intersegment 492 740 528 8,379 9,441 7,366 Consumer Products Third parties 5,325 6,268 6,201 Intersegment (492) (740) (528) 4.833 5,528 5,673 Segment operating income (loss) Media Networks $6,902 $7,755 $7,793 Parks and Resorts 3,774 3.298 3,031 Studio Entertainment 2.355 2,703 1,973 Consumer Products & Interactive Media 1,744 1,965 1,884 Total segment operating income $14.775 $15.721 $14,681 Reconciliation of segment operating income to income before income taxes Segment operating income $14.775 $15.721 $14681 Corporate and unallocated shared expenses (582) (640) (643) Restructuring and impairment charges (98) (156) (53) Other income, net 78 Interest expense, net (385) (260) (117) 332 Infinity charge (129) Income before income taxes $13,788 $14,868 $13,868 Capital expenditures Media Networks Cable Networks $75 586 $127 Broadcasting 64 80 71 Parks and Resorts Domestic 2.375 2.180 1,457 International 816 2,035 2,147 Studio Entertainment 85 86 107 Consumer Products & Interactive Media 30 53 87 Corporate 178 253 269 Total capital expenditures $3,623 $4.773 $4.265 Depreciation expense Media Networks $225 $237 $245 Parks and Resorts Domestic 1,336 1,273 1.169 International 660 445 345 Studio Entertainment 50 51 55 Consumer Products & Interactive Media 63 63 69 Corporate 252 251 249 Total depreciation expense $2.586 $2.320 $2,132 Vice gain $18 3 3 $21 3 3 $12 3 65 116 $196 84 112 $207 114 $222 Amortization of intangible assets Media Networks Parks and Resorts Studio Entertainment Consumer Products & Interactive Media Total amortization of intangible assets Identifiable assets Media Networks Parks and Resorts Studio Entertainment Consumer Products & Interactive Media Corporate Unallocated Goodwill Total consolidated assets $32,475 $32,706 29.492 28 275 16,307 15.359 8,996 9,332 4,919 6,361 3,600 $95.789 $92,033 a. For 2017, confirm that each of Disney's segments exceeds one or more of the quantitative thresholds. Calculate the quantitative threshold tests for 2017. Round answers to the nearest percent (ex: 0.2345 = 2396). Operating Revenues Income % revenues Media Networks Parks and Resorts Studio Entertainment Consumer Products & Interactive Media Assets 0 % 0 % 0 % 0 % 0 % 0 % 0 % Using your calculations, indicate whether the segment exceeds each quantitative threshold test or not. Select Yes or No using the drop-down answer menu. Operating Revenues Income Assets . . + Media Networks Parks and Resorts Studio Entertainment Consumer Products & Interactive Media 2 . b. Using the breakdown of revenues and profit by segment, rank Disney's operating segments by the proportion of profit contributed in relation to its proportion of revenues. Select the answer that shows the segments in the correct order of highest to lowest. OMedia Networks, Parks and Resorts, Studio Entertainment, Consumer Products & Interactive Media OParks and Resorts, Media Networks, Studio Entertainment, Consumer Products & Interactive Media OMedia Networks, Parks and Resorts, Consumer Products, Studio Entertainment & Interactive Media OParks and Resorts, Media Networks, Consumer Products, Studio Entertainment, & Interactive Media c. Compute a rough DuPont analysis for 2017 of the operating segments (i.e., profit/revenues, revenues/total assets, and return on assets as the product of the profit and turnover ratios). Round profit margin to nearest percent (ex: 0.2345 = 239). Round asset turnover to two decimal places. For ROA, use previous rounded figures to compute and round final to the nearest percent. PM AT ROA Media Networks 0 % Parks and Resorts 0 % 0 % Studio Entertainment 0 % 0% 0 % Consumer Products & Interactive Media 0 % 0 % 0 % d. Compute the free cash flow for each operating segment over the three-year period using the following definition: free cash flow = operating profit + depreciation and amortization - capital expenditures. Use negative signs with answers, when appropriate. Free cash flow 2017 2016 2015 Media Networks 0 $ os 0 Parks and Resorts 0 0 0 Studio Entertainment 0 0 0 Consumer Products & Interactive Media 0 0 0 Total 0 S
