The following table summarizes information about stock options outstanding at September 30, 1999 (shares in millions):

    During 1997, the company adopted SFAS 123 and, pursuant to its provisions, elected to continue using the intrinsic-value method of accounting for stock-based awards granted to employees in accordance with APB 25. Accordingly, the company has not recognized compensation expense for its stock-based awards to employees. The following table reflects pro forma net income and earnings per share had the company elected to adopt the fair value approach of SFAS 123:

    These pro forma amounts may not be representative of future disclosures since the estimated fair value of stock options is amortized to expense over the vesting period, and additional options may be granted in future years.

    The weighted average fair values of options at their grant date during 1999, 1998 and 1997, where the exercise price equaled the market price on the grant date, were $11.11, $10.82 and $9.09, respectively. The weighted average fair value of options at their grant date during 1998, where the exercise price exceeded the market price on the grant date, was $8.55. No such options were granted during 1999 and 1997. The estimated fair value of each option granted is calculated using the Black-Scholes option-pricing model. The weighted average assumptions used in the model were as follows:

NOTE 10 . DETAIL OF CERTAIN BALANCE SHEET ACCOUNTS

NOTE 1 1 . SEGMENTS

During the year the company changed the manner in which it reports operating segments. The company is in the leisure business and has operations in five major segments: Media Networks, Studio Entertainment, Theme Parks and Resorts, Consumer Products and Internet and Direct Marketing, as described in Note 1.

    The operating segments reported below are the segments of the company for which separate financial information is available and for which operating income amounts are evaluated regularly by executive management in deciding how to allocate resources and in assessing performance. The accounting policies of the business segments are the same as those described in the summary of significant accounting policies (see Note 1).

    Operating income amounts evaluated include earnings before Corporate and other activities, net interest expense, income taxes, restructuring charges and amortization of intangible assets. Corporate and other activities principally consists of executive management, certain unallocated administrative support functions, income or loss from equity investments and minority interest from ESPN.

    The following segment results include allocations of certain costs, including certain information technology costs, pension, legal and other shared services, which are allocated based on consumption. In addition, while all significant intersegment transactions have been eliminated, Studio Entertainment revenues and operating income include an allocation of Consumer Products revenues, which is meant to reflect a portion of Consumer Products revenues attributable to certain film properties. These allocations are agreed-upon amounts between the businesses and may differ from amounts that would be negotiated in an arms-length transaction.