NOTE 10. SEGMENT INFORMATION

The Company is a diversified global media and entertainment company, which manages and reports its businesses in the following four segments:

•

Cable Network Programming, which principally consists of the production and licensing of programming distributed primarily through cable television systems, direct broadcast satellite operators, telecommunication companies and online video distributors in the U.S. and internationally.

•

Television, which principally consists of the broadcasting of network programming in the U.S. and the operation of 28 full power broadcast television stations, including 11 duopolies, in the U.S. (of these stations, 17 are affiliated with FOX, nine are affiliated with MyNetworkTV, one is affiliated with both The CW Television Network and MyNetworkTV and one is an independent station).

•

Filmed Entertainment, which principally consists of the production and acquisition of live-action and animated motion pictures for distribution and licensing in all formats in all entertainment media worldwide, and the production and licensing of television programming worldwide.

•

Other, Corporate and Eliminations, which principally consists of corporate overhead and eliminations.

The Company’s operating segments have been determined in accordance with the Company’s internal management structure, which is organized based on operating activities. The Company evaluates performance based upon several factors, of which the primary financial measure is Segment OIBDA. Due to the integrated nature of these operating segments, estimates and judgments are made in allocating certain assets, revenues and expenses.

Segment OIBDA is defined as Revenues less Operating expenses and Selling, general and administrative expenses. Segment OIBDA does not include: Amortization of cable distribution investments, Depreciation and amortization, Impairment and restructuring charges, Equity (losses) earnings of affiliates, Interest expense, net, Interest income, Other, net, Income tax benefit (expense), (Loss) income from discontinued operations, net of tax and Net income attributable to noncontrolling interests. Management believes that Segment OIBDA is an appropriate measure for evaluating the operating performance of the Company’s business segments because it is the primary measure used by the Company’s chief operating decision maker to evaluate the performance of and allocate resources to the Company’s businesses.

Management believes that information about Total Segment OIBDA assists all users of the Company’s Unaudited Consolidated Financial Statements by allowing them to evaluate changes in the operating results of the Company’s portfolio of businesses separate from non-operational factors that affect net income, thus providing insight into both operations and the other factors that affect reported results. Total Segment OIBDA provides management, investors and equity analysts a measure to analyze the operating performance of the Company’s business and its enterprise value against historical data and competitors’ data, although historical results, including Segment OIBDA and Total Segment OIBDA, may not be indicative of future results (as operating performance is highly contingent on many factors, including customer tastes and preferences).

Total Segment OIBDA may be considered a non-GAAP measure and should be considered in addition to, not as a substitute for, net income, cash flow and other measures of financial performance reported in accordance with GAAP. In addition, this measure does not reflect cash available to fund requirements and excludes items, such as depreciation and amortization and impairment charges, which are significant components in assessing the Company’s financial performance.

The following table reconciles Income from continuing operations before income tax benefit (expense) to Total Segment OIBDA for the three and six months ended December 31, 2017 and 2016:

	For the three months ended December 31,						For the six months ended December 31,
	2017			2016			2017			2016
	(in millions)
Income from continuing operations before income tax benefit (expense)	$	703		$	1,385		$	1,998		$	2,622
Add
Amortization of cable distribution investments		25			16			43			31
Depreciation and amortization		142			135			284			270
Impairment and restructuring charges		3			39			24			176
Equity losses (earnings) of affiliates		33			41			(27	)		6
Interest expense, net		312			299			625			599
Interest income		(9	)		(9	)		(19	)		(18	)
Other, net		229			88			301			99

Total Segment OIBDA	$	1,438		$	1,994		$	3,229		$	3,785

The following tables set forth the Company’s Revenues and Segment OIBDA for the three and six months ended December 31, 2017 and 2016:

	For the three months ended December 31,						For the six months ended December 31,
	2017			2016			2017			2016
	(in millions)
Revenues
Cable Network Programming	$	4,405		$	3,967		$	8,601		$	7,777
Television		1,806			1,918			2,871			2,956
Filmed Entertainment		2,246			2,269			4,209			4,176
Other, Corporate and Eliminations		(420	)		(472	)		(642	)		(721	)

Total revenues	$	8,037		$	7,682		$	15,039		$	14,188
Segment OIBDA
Cable Network Programming	$	1,365		$	1,330		$	2,876		$	2,714
Television		56			376			178			567
Filmed Entertainment		131			389			387			700
Other, Corporate and Eliminations		(114	)		(101	)		(212	)		(196	)

Total Segment OIBDA	$	1,438		$	1,994		$	3,229		$	3,785

Intersegment revenues, generated by the Filmed Entertainment segment, of $418 million and $445 million for the three months ended December 31, 2017 and 2016, respectively, and of $613 million and $678 million for the six months ended December 31, 2017 and 2016, respectively, have been eliminated within the Other, Corporate and Eliminations segment.

	For the three months ended December 31,				For the six months ended December 31,
	2017		2016		2017		2016
	(in millions)
Depreciation and amortization
Cable Network Programming	$	86	$	83	$	171	$	165
Television		27		28		54		57
Filmed Entertainment		23		20		46		40
Other, Corporate and Eliminations		6		4		13		8

Total depreciation and amortization	$	142	$	135	$	284	$	270

Depreciation and amortization includes the amortization of definite lived intangible assets of $65 million and $64 million for the three months ended December 31, 2017 and 2016, respectively, and $130 million for the six months ended December 31, 2017 and 2016.

	As of December 31, 2017		As of June 30, 2017
	(in millions)
Assets
Cable Network Programming	$	25,282	$	24,913
Television		7,354		6,775
Filmed Entertainment		11,485		10,312
Other, Corporate and Eliminations		4,373		4,822
Investments		4,364		3,902

Total assets	$	52,858	$	50,724

Revenues by Component

	For the three months ended December 31,				For the six months ended December 31,
	2017		2016		2017		2016
	(in millions)
Revenues
Affiliate fee	$	3,252	$	2,906	$	6,488	$	5,829
Advertising		2,496		2,544		4,119		4,135
Content		2,140		2,032		4,159		3,901
Other		149		200		273		323

Total revenues	$	8,037	$	7,682	$	15,039	$	14,188