Our operating segments report separate financial information, which is evaluated regularly by the Chief Executive Officer in order to decide how to allocate resources and to assess performance. The following are the Company’s operating segments:

Segment operating results reflect earnings before corporate and unallocated shared expenses, restructuring and impairment charges, net other income, net interest expense, income taxes and noncontrolling interests. Segment operating income includes equity in the income of investees and excludes impairments of certain equity investments and purchase accounting amortization of TFCF and Hulu assets (i.e. intangible assets and the fair value step-up for film and television costs) recognized in connection with the TFCF acquisition. Corporate and unallocated shared expenses principally consist of corporate functions, executive management and certain unallocated administrative support functions.

Segment operating results include allocations of certain costs, including information technology, pension, legal and other shared services costs, which are allocated based on metrics designed to correlate with consumption.

Intersegment content transactions are presented “gross” (i.e. the segment producing the content reports revenue and profit from intersegment transactions, and the required eliminations are reported on a separate “Eliminations” line when presenting a summary of our segment results). Other intersegment transactions are reported “Net” (i.e. revenue from another segment is recorded as a reduction of costs). Studio Entertainment revenues and operating income include an allocation of Parks, Experiences and Products revenues, which is meant to reflect royalties on revenue generated by Parks, Experiences and Products on merchandise based on intellectual property from Studio Entertainment films.

As it relates to film and television content that is produced by our Media Networks and Studio Entertainment segments that will be used on our direct-to-consumer (DTC) services, there are four broad categories of content:

The intersegment transfer price, for purposes of segment financial reporting pursuant to ASC 280 Segment Reporting, is generally cost plus a margin for Originals and Media Pay 1 content and generally based on comparable transactions for Studio Pay 1 and Library content. Imputed title by title intersegment license fees that may be necessary for other purposes are established as required by those purposes.

When the DTC amortization timing is different than the timing of revenue recognition at Studio Entertainment or Media Networks, the difference results in an operating income impact in the elimination segment, which nets to zero over the DTC amortization period.

The impact of the novel coronavirus (COVID-19) pandemic and measures to prevent its spread are affecting our segments in a number of ways, most significantly at Parks, Experiences and Products where we closed our theme parks and retail stores, some of which have now re-opened, suspended cruise ship sailings and guided tours and have seen an adverse impact on our merchandise licensing business. In addition, we have delayed, or in some instances, shortened, modified or canceled theatrical releases and suspended stage play performances at Studio Entertainment and have experienced an adverse impact on advertising sales at Media Networks and Direct-to-Consumer & International. We have experienced disruptions in the production and availability of content, including the cancellation or deferral of certain sports events and suspension of most film and television production. Many of our businesses have been closed or suspended consistent with government mandates or guidance.

The impact of these disruptions and the extent of their adverse impact on our financial and operating results will be dictated by the length of time that such disruptions continue, which will, in turn, depend on the currently unknowable duration and severity of the impacts of COVID-19, and among other things, the impact of governmental actions imposed in response to COVID-19 and individuals’ and companies’ risk tolerance regarding health matters going forward. As some of our businesses have begun to re-open, we have incurred additional costs to address government regulations and the safety of our employees, talent and guests.

For the quarter ended June 27, 2020, the Company recorded goodwill and intangible asset impairments totaling $5.0 billion, in part due to the negative impact COVID-19 has had on the International Channels business (see Note 18).


	Quarter Ended						Nine Months Ended
	June 27, 2020		June 29, 2019		June 27, 2020		June 29, 2019
Revenues:
Media Networks	$	6,562	$	6,713	$	21,180	$	18,317
Parks, Experiences and Products⁽¹⁾	983		6,575		13,922		19,570
Studio Entertainment⁽¹⁾	1,738		3,836		8,041		7,817
Direct-to-Consumer & International	3,969		3,875		12,114		5,940

Eliminations⁽²⁾	(1,473)		(737)		(4,576)		(1,155)
	$	11,779	$	20,262	$	50,681	$	50,489
Segment operating income (loss):
Media Networks	$	3,153	$	2,136	$	7,158	$	5,696
Parks, Experiences and Products⁽¹⁾	(1,960)		1,719		1,017		5,377
Studio Entertainment⁽¹⁾	668		792		2,082		1,607
Direct-to-Consumer & International	(706)		(562)		(2,226)		(1,084)

Eliminations⁽²⁾	(56)		(133)		(529)		(174)
	$	1,099	$	3,952	$	7,502	$	11,422

⁽¹⁾The allocation of Parks, Experiences and Products revenues to Studio Entertainment was $82 million and $126 million for the quarters ended June 27, 2020 and June 29, 2019, respectively, and $383 million and $406 million for the nine months ended June 27, 2020 and June 29, 2019, respectively.


	Quarter Ended						Nine Months Ended
(in millions)	June 27, 2020		June 29, 2019		June 27, 2020		June 29, 2019
Revenues:

Studio Entertainment:
Content transactions with Media Networks	$	(36)	$	(41)	$	(147)	$	(75)
Content transactions with Direct-to-Consumer & International	(506)		(82)		(1,652)		(182)
Media Networks:
Content transactions with Direct-to-Consumer & International	(931)		(614)		(2,777)		(898)


	$	(1,473)	$	(737)	$	(4,576)	$	(1,155)

Operating income:

Studio Entertainment:
Content transactions with Media Networks	$	2	$	(16)	$	(8)	$	(11)
Content transactions with Direct-to-Consumer & International	27		(35)		(246)		(79)
Media Networks:
Content transactions with Direct-to-Consumer & International	(85)		(82)		(275)		(84)


	$	(56)	$	(133)	$	(529)	$	(174)


	Quarter Ended						Nine Months Ended
	June 27, 2020		June 29, 2019		June 27, 2020		June 29, 2019
Media Networks	$	217	$	192	$	589	$	553
Parks, Experiences and Products	(6)		—		(15)		(12)

Direct-to-Consumer & International	(18)		7		(6)		(222)
Equity in the income of investees included in segment operating income	193		199		568		319
Impairment of equity investments⁽¹⁾	—		(185)		—		(538)
Amortization of TFCF intangible assets related to equity investees	(7)		(15)		(23)		(15)
Equity in the income (loss) of investees, net	$	186	$	(1)	$	545	$	(234)

⁽¹⁾The prior-year quarter reflects the impairment of an investment in a cable channel at A+E Television Networks. The prior-year nine month period also includes an impairment of Vice Group Holdings, Inc.


	Quarter Ended						Nine Months Ended
	June 27, 2020		June 29, 2019		June 27, 2020		June 29, 2019
Segment operating income	$	1,099	$	3,952	$	7,502	$	11,422
Corporate and unallocated shared expenses	(179)		(238)		(604)		(678)
Restructuring and impairment charges (see Note 18)	(5,047)		(207)		(5,342)		(869)
Other income (expense), net (see Note 5)	382		(123)		382		4,840
Interest expense, net	(412)		(411)		(995)		(617)
Amortization of TFCF and Hulu intangible assets and fair value step-up on film and television costs⁽¹⁾	(683)		(779)		(2,106)		(884)
Impairment of equity investments	—		(185)		—		(538)

Income (loss) from continuing operations before income taxes	$	(4,840)	$	2,009	$	(1,163)	$	12,676

⁽¹⁾For the quarter ended June 27, 2020 amortization of intangible assets, step-up of film and television costs and intangibles related to TFCF equity investees were $486 million, $190 million and $7 million, respectively. For the nine months ended June 27, 2020 amortization of intangible assets, step-up of film and television costs and intangibles related to TFCF equity investees were $1,470 million, $613 million and $23 million, respectively. For the quarter ended June 29, 2019 amortization of intangible assets, step-up of film and television costs and intangibles related to TFCF equity investees were $490 million, $274 million and $15 million, respectively. For the nine months ended June 29, 2019, amortization of intangible assets, step-up of film and television costs and intangibles related to TFCF equity investees were $562 million, $307 million and $15 million, respectively.