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Home , Aulani, DisneySea (California), Disneytown, Disney Village, Radio Disney, Tokyo Disney Resort

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Tabular dollars in millions, except per share amounts)

1 Description of the Business and Segment Information The Company, together with the subsidiaries through which businesses are conducted (the Company), is a diversified worldwide company with operations in the following business segments: Media Networks, Parks and Resorts, Studio Entertainment, and Consumer Products & Interactive Media.

The Company is preparing to launch two direct-to-consumer (DTC) streaming services, one in 2018 and one in late 2019. An ESPN-branded service distributing multi-sports content is planned for 2018 and a Disney-branded service distributing the Company’s film and television content is planned for 2019. BAMTech LLC (BAMTech), a streaming technology and content delivery business, is providing technical support for the launch and distribution of these services (see Note 3 for further discussion of the BAMTech transaction).

DESCRIPTION OF THE BUSINESS

Media Networks The Company operates cable programming services branded ESPN, Disney and Freeform, broadcast businesses, which include the ABC TV Network and eight owned television stations, radio businesses consisting of the ESPN , including four owned ESPN radio stations, and . The ABC TV and ESPN Radio networks have affiliated stations providing coverage to consumers throughout the U.S. The Company also produces original live-action and animated television programming, which may be sold in network, first-run syndication and other television markets worldwide, to subscription video-on-demand services and in home entertainment formats (such as DVD, Blu-Ray and electric home video license). The Company has interests in media businesses that are accounted for under the equity method including A+E Television Networks LLC (A+E), CTV Specialty Television, Inc. (CTV), LLC (Hulu), Seven TV and Vice Group Holding, Inc. (Vice). Our Media Networks business also operates branded internet sites and apps. In September 2017, the Company acquired an incremental 42% interest in BAMTech bringing the Company’s aggregate ownership interest to 75%, and the Company now consolidates BAMTech. Prior to the September 2017 acquisition, BAMTech was accounted for under the equity method.

Parks and Resorts The Company owns and operates the Resort in and the Resort in California. The Walt Disney World Resort includes four theme parks (the , , Disney’s Hollywood Studios and Disney’s Animal Kingdom); 18 resort hotels; vacation club properties; a retail, dining and entertainment complex (); a sports complex; conference centers; campgrounds; water parks; and other recreational facilities. The includes two theme parks (Disneyland and Disney California Adventure), three resort hotels and a retail, dining and entertainment complex (). Internationally, the Company owns and operates Disneyland , which includes two theme parks ( and ); seven themed resort hotels; two convention centers; a shopping, dining and entertainment complex (); a 27-hole golf facility; and a 50% interest in Villages Nature, a European eco-tourism resort. The Company manages and has a 47% ownership interest in Resort, which includes one theme park and three themed resort hotels. The Company has a 43% ownership interest in Disney Resort, which opened in June 2016 and includes one theme park; two themed resort hotels; a retail, dining and entertainment complex (); and an outdoor recreational area. The Company also has a 70% ownership interest in the management company of . The Company earns royalties on revenues generated by the Disney Resort, which includes two theme parks ( and Tokyo DisneySea) and four Disney-branded hotels and is owned and operated by an unrelated Japanese corporation. The Company manages and markets vacation club ownership interests through the ; operates the ; the guided group vacations business; and , a hotel and vacation club resort in Hawaii. The Company’s unit designs and develops theme park concepts and attractions as well as resort properties.

Studio Entertainment The Company produces and acquires live-action and animated motion pictures for worldwide distribution in the theatrical, home entertainment and television markets and to subscription services. The Company distributes these products through its own distribution and marketing companies in the U.S. and both directly and through independent companies and joint ventures in foreign markets primarily under the , , Marvel, and Touchstone banners. The Company also produces stage plays and musical recordings, licenses and produces live entertainment events and provides visual and audio effects and other post-production services.

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