| |||||
x | Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 | ||||
For the quarterly period ended |
| |||||
☐ | Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from _________ to _________ |
|
| |
Delaware | 83-1825597 | |||||||
(State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification No.) | |||||||
1211 Avenue of the Americas |
| |||||||||||||||
New York, | New York | 10036 | ||||||||||||||
(Address of Principal Executive |
|
Title of Each Class | Trading Symbols | Name of Each Exchange | ||||||
Class A Common Stock, par value $0.01 per share | FOXA | The Nasdaq Global Select Market | ||||||
Class B Common Stock, par value $0.01 per share | FOX | The Nasdaq Global Select Market |
Large accelerated filer |
| Accelerated filer |
| ||||||||
Non-accelerated filer |
| Smaller reporting company |
| ||||||||
Emerging growth company |
|
| |||||||||||||
Page | |||||||||||||
| |||||||||||||
| |||||||||||||
| |||||||||||||
| |||||||||||||
| |||||||||||||
| |||||||||||||
| |||||||||||||
| |||||||||||||
| |||||||||||||
| |||||||||||||
|
|
| For the three months ended March 31, |
|
| For the nine months ended March 31, |
| For the three months ended December 31, | For the six months ended December 31, | |||||||||||||||||||||||||||||||||||||||||||
|
| 2021 |
|
| 2020 |
|
| 2021 |
|
| 2020 |
| 2021 | 2020 | 2021 | 2020 | |||||||||||||||||||||||||||||||||||
Revenues |
| $ | 3,215 |
|
| $ | 3,440 |
|
| $ | 10,019 |
|
| $ | 9,885 |
| Revenues | $ | 4,441 | $ | 4,087 | $ | 7,486 | $ | 6,804 | ||||||||||||||||||||||||||
Operating expenses |
|
| (1,885 | ) |
|
| (2,061 | ) |
|
| (6,399 | ) |
|
| (6,620 | ) | Operating expenses | (3,667) | (3,346) | (5,238) | (4,514) | ||||||||||||||||||||||||||||||
Selling, general and administrative |
|
| (437 | ) |
|
| (464 | ) |
|
| (1,267 | ) |
|
| (1,247 | ) | Selling, general and administrative | (468) | (442) | (883) | (830) | ||||||||||||||||||||||||||||||
Depreciation and amortization |
|
| (78 | ) |
|
| (57 | ) |
|
| (216 | ) |
|
| (164 | ) | Depreciation and amortization | (93) | (70) | (172) | (138) | ||||||||||||||||||||||||||||||
Impairment and restructuring charges |
|
| 0 |
|
|
| 0 |
|
|
| (35 | ) |
|
| (9 | ) | Impairment and restructuring charges | — | — | — | (35) | ||||||||||||||||||||||||||||||
Interest expense |
|
| (98 | ) |
|
| (89 | ) |
|
| (296 | ) |
|
| (269 | ) | |||||||||||||||||||||||||||||||||||
Interest income |
|
| 0 |
|
|
| 8 |
|
|
| 3 |
|
|
| 33 |
| |||||||||||||||||||||||||||||||||||
Interest expense, net | Interest expense, net | (97) | (97) | (194) | (195) | ||||||||||||||||||||||||||||||||||||||||||||||
Other, net |
|
| 61 |
|
|
| (632 | ) |
|
| 752 |
|
|
| (345 | ) | Other, net | (211) | 172 | (142) | 691 | ||||||||||||||||||||||||||||||
Income before income tax expense |
|
| 778 |
|
|
| 145 |
|
|
| 2,561 |
|
|
| 1,264 |
| |||||||||||||||||||||||||||||||||||
Income tax expense |
|
| (196 | ) |
|
| (55 | ) |
|
| (632 | ) |
|
| (347 | ) | |||||||||||||||||||||||||||||||||||
Net income |
|
| 582 |
|
|
| 90 |
|
|
| 1,929 |
|
|
| 917 |
| |||||||||||||||||||||||||||||||||||
(Loss) income before income tax benefit (expense) | (Loss) income before income tax benefit (expense) | (95) | 304 | 857 | 1,783 | ||||||||||||||||||||||||||||||||||||||||||||||
Income tax benefit (expense) | Income tax benefit (expense) | 22 | (74) | (222) | (436) | ||||||||||||||||||||||||||||||||||||||||||||||
Net (loss) income | Net (loss) income | (73) | 230 | 635 | 1,347 | ||||||||||||||||||||||||||||||||||||||||||||||
Less: Net income attributable to noncontrolling interests |
|
| (15 | ) |
|
| (12 | ) |
|
| (32 | ) |
|
| (40 | ) | Less: Net income attributable to noncontrolling interests | (12) | (6) | (19) | (17) | ||||||||||||||||||||||||||||||
Net income attributable to Fox Corporation stockholders |
| $ | 567 |
|
| $ | 78 |
|
| $ | 1,897 |
|
| $ | 877 |
| |||||||||||||||||||||||||||||||||||
Net (loss) income attributable to Fox Corporation stockholders | Net (loss) income attributable to Fox Corporation stockholders | $ | (85) | $ | 224 | $ | 616 | $ | 1,330 | ||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||
EARNINGS PER SHARE DATA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||
(LOSS) EARNINGS PER SHARE DATA | (LOSS) EARNINGS PER SHARE DATA | ||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||
Weighted average shares |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||
Weighted average shares: | Weighted average shares: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Basic |
|
| 589 |
|
|
| 608 |
|
|
| 595 |
|
|
| 615 |
| Basic | 569 | 595 | 572 | 599 | ||||||||||||||||||||||||||||||
Diluted |
|
| 593 |
|
|
| 612 |
|
|
| 598 |
|
|
| 619 |
| Diluted | 573 | 598 | 575 | 601 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||
Net income attributable to Fox Corporation stockholders per share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||
Net (loss) income attributable to Fox Corporation stockholders per share: | Net (loss) income attributable to Fox Corporation stockholders per share: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Basic |
| $ | 0.96 |
|
| $ | 0.13 |
|
| $ | 3.19 |
|
| $ | 1.43 |
| Basic | $ | (0.15) | $ | 0.38 | $ | 1.08 | $ | 2.22 | ||||||||||||||||||||||||||
Diluted |
| $ | 0.96 |
|
| $ | 0.13 |
|
| $ | 3.17 |
|
| $ | 1.42 |
| Diluted | $ | (0.15) | $ | 0.37 | $ | 1.07 | $ | 2.21 |
|
| For the three months ended March 31, |
|
| For the nine months ended March 31, |
| ||||||||||
|
| 2021 |
|
| 2020 |
|
| 2021 |
|
| 2020 |
| ||||
Net income |
| $ | 582 |
|
| $ | 90 |
|
| $ | 1,929 |
|
| $ | 917 |
|
Other comprehensive income, net of tax |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Benefit plan adjustments |
|
| 9 |
|
|
| 5 |
|
|
| 25 |
|
|
| 17 |
|
Other comprehensive income, net of tax |
|
| 9 |
|
|
| 5 |
|
|
| 25 |
|
|
| 17 |
|
Comprehensive income |
|
| 591 |
|
|
| 95 |
|
|
| 1,954 |
|
|
| 934 |
|
Less: Net income attributable to noncontrolling interests(a) |
|
| (15 | ) |
|
| (12 | ) |
|
| (32 | ) |
|
| (40 | ) |
Comprehensive income attributable to Fox Corporation stockholders |
| $ | 576 |
|
| $ | 83 |
|
| $ | 1,922 |
|
| $ | 894 |
|
For the three months ended December 31, | For the six months ended December 31, | ||||||||||||||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||||||||||||||
Net (loss) income | $ | (73) | $ | 230 | $ | 635 | $ | 1,347 | |||||||||||||||||||||||||||
Other comprehensive income, net of tax: | |||||||||||||||||||||||||||||||||||
Benefit plan adjustments and other | 8 | 7 | 14 | 16 | |||||||||||||||||||||||||||||||
Other comprehensive income, net of tax | 8 | 7 | 14 | 16 | |||||||||||||||||||||||||||||||
Comprehensive (loss) income | (65) | 237 | 649 | 1,363 | |||||||||||||||||||||||||||||||
Less: Net income attributable to noncontrolling interests(a) | (12) | (6) | (19) | (17) | |||||||||||||||||||||||||||||||
Comprehensive (loss) income attributable to Fox Corporation stockholders | $ | (77) | $ | 231 | $ | 630 | $ | 1,346 |
| ||
(a) | Net income attributable to noncontrolling interests includes |
FOX CORPORATION
|
| As of March 31, 2021 |
|
| As of June 30, 2020 |
| As of December 31, 2021 | As of June 30, 2021 | |||||||||||
|
| (unaudited) |
|
| (audited) |
| (unaudited) | (audited) | |||||||||||
ASSETS |
|
|
|
|
|
|
|
| ASSETS | ||||||||||
Current assets |
|
|
|
|
|
|
|
| Current assets | ||||||||||
Cash and cash equivalents |
| $ | 5,765 |
|
| $ | 4,645 |
| Cash and cash equivalents | $ | 4,255 | $ | 5,886 | ||||||
Receivables, net |
|
| 2,153 |
|
|
| 1,888 |
| Receivables, net | 2,952 | 2,029 | ||||||||
Inventories, net |
|
| 685 |
|
|
| 856 |
| Inventories, net | 1,148 | 729 | ||||||||
Other |
|
| 91 |
|
|
| 97 |
| Other | 159 | 105 | ||||||||
Total current assets |
|
| 8,694 |
|
|
| 7,486 |
| Total current assets | 8,514 | 8,749 | ||||||||
Non-current assets |
|
|
|
|
|
|
|
| Non-current assets | ||||||||||
Property, plant and equipment, net |
|
| 1,626 |
|
|
| 1,498 |
| Property, plant and equipment, net | 1,650 | 1,708 | ||||||||
Intangible assets, net |
|
| 3,156 |
|
|
| 3,198 |
| Intangible assets, net | 3,198 | 3,154 | ||||||||
Goodwill |
|
| 3,403 |
|
|
| 3,409 |
| Goodwill | 3,565 | 3,435 | ||||||||
Deferred tax assets |
|
| 3,853 |
|
|
| 4,358 |
| Deferred tax assets | 3,675 | 3,822 | ||||||||
Other non-current assets |
|
| 2,175 |
|
|
| 1,801 |
| Other non-current assets | 2,276 | 2,058 | ||||||||
Total assets |
| $ | 22,907 |
|
| $ | 21,750 |
| Total assets | $ | 22,878 | $ | 22,926 | ||||||
LIABILITIES AND EQUITY |
|
|
|
|
|
|
|
| LIABILITIES AND EQUITY | ||||||||||
Current liabilities |
|
|
|
|
|
|
|
| Current liabilities | ||||||||||
Borrowings |
| $ | 749 |
|
| $ | 0 |
| Borrowings | $ | 750 | $ | 749 | ||||||
Accounts payable, accrued expenses and other current liabilities |
|
| 2,236 |
|
|
| 1,906 |
| Accounts payable, accrued expenses and other current liabilities | 2,120 | 2,253 | ||||||||
Total current liabilities |
|
| 2,985 |
|
|
| 1,906 |
| Total current liabilities | 2,870 | 3,002 | ||||||||
Non-current liabilities |
|
|
|
|
|
|
|
| Non-current liabilities | ||||||||||
Borrowings |
|
| 7,201 |
|
|
| 7,946 |
| Borrowings | 7,204 | 7,202 | ||||||||
Other liabilities |
|
| 1,412 |
|
|
| 1,482 |
| Other liabilities | 1,342 | 1,336 | ||||||||
Redeemable noncontrolling interests |
|
| 225 |
|
|
| 305 |
| Redeemable noncontrolling interests | 172 | 261 | ||||||||
Commitments and contingencies |
|
|
|
|
|
|
|
| Commitments and contingencies | 0 | 0 | ||||||||
Equity |
|
|
|
|
|
|
|
| Equity | ||||||||||
Class A common stock(a) |
|
| 3 |
|
|
| 3 |
| Class A common stock(a) | 3 | 3 | ||||||||
Class B common stock(b) |
|
| 3 |
|
|
| 3 |
| Class B common stock(b) | 3 | 3 | ||||||||
Additional paid-in capital |
|
| 9,555 |
|
|
| 9,831 |
| Additional paid-in capital | 9,265 | 9,453 | ||||||||
Retained earnings |
|
| 1,912 |
|
|
| 674 |
| Retained earnings | 2,308 | 1,982 | ||||||||
Accumulated other comprehensive loss |
|
| (392 | ) |
|
| (417 | ) | Accumulated other comprehensive loss | (304) | (318) | ||||||||
Total Fox Corporation stockholders' equity |
|
| 11,081 |
|
|
| 10,094 |
| Total Fox Corporation stockholders' equity | 11,275 | 11,123 | ||||||||
Noncontrolling interests |
|
| 3 |
|
|
| 17 |
| Noncontrolling interests | 15 | 2 | ||||||||
Total equity |
|
| 11,084 |
|
|
| 10,111 |
| Total equity | 11,290 | 11,125 | ||||||||
Total liabilities and equity |
| $ | 22,907 |
|
| $ | 21,750 |
| Total liabilities and equity | $ | 22,878 | $ | 22,926 |
| ||
(a) | Class A common stock, $0.01 par value per share, 2,000,000,000 shares authorized, |
| |||||
(b) | Class B common stock, $0.01 par value per share, 1,000,000,000 shares authorized, |
|
| For the nine months ended March 31, |
| For the six months ended December 31, | |||||||||||||||
|
| 2021 |
|
| 2020 |
| 2021 | 2020 | |||||||||||
OPERATING ACTIVITIES |
|
|
|
|
|
|
|
| OPERATING ACTIVITIES | ||||||||||
Net income |
| $ | 1,929 |
|
| $ | 917 |
| Net income | $ | 635 | $ | 1,347 | ||||||
Adjustments to reconcile net income to cash provided by operating activities |
|
|
|
|
|
|
|
| |||||||||||
Adjustments to reconcile net income to cash (used in) provided by operating activities | Adjustments to reconcile net income to cash (used in) provided by operating activities | ||||||||||||||||||
Depreciation and amortization |
|
| 216 |
|
|
| 164 |
| Depreciation and amortization | 172 | 138 | ||||||||
Amortization of cable distribution investments |
|
| 17 |
|
|
| 19 |
| Amortization of cable distribution investments | 9 | 11 | ||||||||
Impairment and restructuring charges |
|
| 35 |
|
|
| 9 |
| Impairment and restructuring charges | — | 35 | ||||||||
Equity-based compensation |
|
| 112 |
|
|
| 101 |
| Equity-based compensation | 47 | 75 | ||||||||
Other, net |
|
| (752 | ) |
|
| 345 |
| Other, net | 142 | (691) | ||||||||
Deferred income taxes |
|
| 528 |
|
|
| 255 |
| Deferred income taxes | 143 | 421 | ||||||||
Change in operating assets and liabilities, net of acquisitions and dispositions |
|
|
|
|
|
|
|
| Change in operating assets and liabilities, net of acquisitions and dispositions | ||||||||||
Receivables and other assets |
|
| (382 | ) |
|
| (395 | ) | Receivables and other assets | (940) | (1,011) | ||||||||
Inventories net of program rights payable |
|
| 257 |
|
|
| 167 |
| Inventories net of program rights payable | (494) | (60) | ||||||||
Accounts payable and accrued expenses |
|
| 88 |
|
|
| (178 | ) | Accounts payable and accrued expenses | (214) | 156 | ||||||||
Other changes, net |
|
| (182 | ) |
|
| (59 | ) | Other changes, net | (156) | (184) | ||||||||
Net cash provided by operating activities |
|
| 1,866 |
|
|
| 1,345 |
| |||||||||||
Net cash (used in) provided by operating activities | Net cash (used in) provided by operating activities | (656) | 237 | ||||||||||||||||
INVESTING ACTIVITIES |
|
|
|
|
|
|
|
| INVESTING ACTIVITIES | ||||||||||
Property, plant and equipment |
|
| (333 | ) |
|
| (192 | ) | Property, plant and equipment | (121) | (242) | ||||||||
Acquisitions, net of cash acquired |
|
| 0 |
|
|
| (611 | ) | Acquisitions, net of cash acquired | (229) | — | ||||||||
Proceeds from dispositions, net |
|
| 93 |
|
|
| 45 |
| Proceeds from dispositions, net | 82 | — | ||||||||
Sale of investments |
|
| 0 |
|
|
| 349 |
| |||||||||||
Purchase of investments |
|
| (86 | ) |
|
| 0 |
| Purchase of investments | (28) | (86) | ||||||||
Other investing activities, net |
|
| (3 | ) |
|
| 12 |
| Other investing activities, net | — | (1) | ||||||||
Net cash used in investing activities |
|
| (329 | ) |
|
| (397 | ) | Net cash used in investing activities | (296) | (329) | ||||||||
FINANCING ACTIVITIES |
|
|
|
|
|
|
|
| FINANCING ACTIVITIES | ||||||||||
Repurchase of shares |
|
| (713 | ) |
|
| (600 | ) | Repurchase of shares | (497) | (416) | ||||||||
Non-operating cash flows from (to) The Walt Disney Company |
|
| 113 |
|
|
| (70 | ) | |||||||||||
Settlement of Divestiture Tax prepayment |
|
| 462 |
|
|
| 0 |
| |||||||||||
Non-operating cash flows from The Walt Disney Company | Non-operating cash flows from The Walt Disney Company | — | 116 | ||||||||||||||||
Settlement of Divestiture Tax Prepayment | Settlement of Divestiture Tax Prepayment | — | 462 | ||||||||||||||||
Dividends paid and distributions |
|
| (182 | ) |
|
| (321 | ) | Dividends paid and distributions | (150) | (176) | ||||||||
Purchase of subsidiary noncontrolling interest |
|
| (67 | ) |
|
| 0 |
| |||||||||||
Other financing activities, net |
|
| (30 | ) |
|
| 5 |
| Other financing activities, net | (32) | (37) | ||||||||
Net cash used in financing activities |
|
| (417 | ) |
|
| (986 | ) | Net cash used in financing activities | (679) | (51) | ||||||||
Net increase (decrease) in cash and cash equivalents |
|
| 1,120 |
|
|
| (38 | ) | |||||||||||
Net decrease in cash and cash equivalents | Net decrease in cash and cash equivalents | (1,631) | (143) | ||||||||||||||||
Cash and cash equivalents, beginning of year |
|
| 4,645 |
|
|
| 3,234 |
| Cash and cash equivalents, beginning of year | 5,886 | 4,645 | ||||||||
Cash and cash equivalents, end of period |
| $ | 5,765 |
|
| $ | 3,196 |
| Cash and cash equivalents, end of period | $ | 4,255 | $ | 4,502 |
|
| Class A |
|
| Class B |
|
| Additional |
|
|
|
|
|
| Accumulated Other |
|
| Total Fox Corporation |
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
| Common Stock |
|
| Common Stock |
|
| Paid-in |
|
| Retained |
|
| Comprehensive |
|
| Stockholders' |
|
| Noncontrolling |
|
| Total |
| Class A | Class B | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Total Fox Corporation Stockholders' Equity | Noncontrolling Interests(a) | Total Equity | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
| Shares |
|
| Amount |
|
| Shares |
|
| Amount |
|
| Capital |
|
| Earnings |
|
| Loss |
|
| Equity |
|
| Interests(a) |
|
| Equity |
| Common Stock | Common Stock | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance, September 30, 2021 | Balance, September 30, 2021 | 321 | $ | 3 | 250 | $ | 3 | $ | 9,327 | $ | 2,409 | $ | (312) | $ | 11,430 | $ | — | $ | 11,430 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net (loss) income | Net (loss) income | — | — | — | — | — | (85) | — | (85) | 15 | (70) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income | Other comprehensive income | — | — | — | — | — | — | 8 | 8 | — | 8 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares repurchased | Shares repurchased | (5) | — | (2) | — | (108) | (139) | — | (247) | — | (247) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other | Other | 1 | — | — | — | 46 | 123 | — | 169 | — | 169 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance, December 31, 2021 | Balance, December 31, 2021 | 317 | $ | 3 | 248 | $ | 3 | $ | 9,265 | $ | 2,308 | $ | (304) | $ | 11,275 | $ | 15 | $ | 11,290 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance, September 30, 2020 | Balance, September 30, 2020 | 338 | $ | 3 | 258 | $ | 3 | $ | 9,668 | $ | 1,525 | $ | (408) | $ | 10,791 | $ | 15 | $ | 10,806 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net income | Net income | — | — | — | — | — | 224 | — | 224 | 2 | 226 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income | Other comprehensive income | — | — | — | — | — | — | 7 | 7 | — | 7 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares repurchased | Shares repurchased | (4) | — | (1) | — | (86) | (63) | — | (149) | — | (149) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other | Other | 1 | — | — | — | 73 | (29) | — | 44 | (13) | 31 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance, December 31, 2020 |
|
| 335 |
|
| $ | 3 |
|
|
| 257 |
|
| $ | 3 |
|
| $ | 9,655 |
|
| $ | 1,657 |
|
| $ | (401 | ) |
| $ | 10,917 |
|
| $ | 4 |
|
| $ | 10,921 |
| Balance, December 31, 2020 | 335 | $ | 3 | 257 | $ | 3 | $ | 9,655 | $ | 1,657 | $ | (401) | $ | 10,917 | $ | 4 | $ | 10,921 | ||||||||||||||||||||||||||||||||||||||||
Balance, June 30, 2021 | Balance, June 30, 2021 | 324 | $ | 3 | 252 | $ | 3 | $ | 9,453 | $ | 1,982 | $ | (318) | $ | 11,123 | $ | 2 | $ | 11,125 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net income |
|
| - |
|
|
| 0 |
|
|
| - |
|
|
| 0 |
|
|
| 0 |
|
|
| 567 |
|
|
| 0 |
|
|
| 567 |
|
|
| 10 |
|
|
| 577 |
| Net income | — | — | — | — | — | 616 | — | 616 | 23 | 639 | ||||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income |
|
| - |
|
|
| 0 |
|
|
| - |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 9 |
|
|
| 9 |
|
|
| 0 |
|
|
| 9 |
| Other comprehensive income | — | — | — | — | — | — | 14 | 14 | — | 14 | ||||||||||||||||||||||||||||||||||||||||||||||||
Dividends |
|
| - |
|
|
| 0 |
|
|
| - |
|
|
| 0 |
|
|
| 0 |
|
|
| (134 | ) |
|
| 0 |
|
|
| (134 | ) |
|
| 0 |
|
|
| (134 | ) | Dividends | — | — | — | — | — | (138) | — | (138) | — | (138) | ||||||||||||||||||||||||||||||||||||||||||||||||
Shares repurchased |
|
| (6 | ) |
|
| 0 |
|
|
| (3 | ) |
|
| 0 |
|
|
| (146 | ) |
|
| (160 | ) |
|
| 0 |
|
|
| (306 | ) |
|
| 0 |
|
|
| (306 | ) | Shares repurchased | (10) | — | (4) | — | (222) | (275) | — | (497) | — | (497) | ||||||||||||||||||||||||||||||||||||||||||||||||
Other |
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 46 |
|
|
| (18 | ) |
|
| 0 |
|
|
| 28 |
|
|
| (11 | ) |
|
| 17 |
| Other | 3 | — | — | — | 34 | 123 | — | 157 | (10) | 147 | ||||||||||||||||||||||||||||||||||||||||||||||||
Balance, March 31, 2021 |
|
| 329 |
|
| $ | 3 |
|
|
| 254 |
|
| $ | 3 |
|
| $ | 9,555 |
|
| $ | 1,912 |
|
| $ | (392 | ) |
| $ | 11,081 |
|
| $ | 3 |
|
| $ | 11,084 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance, December 31, 2019 |
|
| 347 |
|
| $ | 3 |
|
|
| 264 |
|
| $ | 3 |
|
| $ | 9,849 |
|
| $ | 775 |
|
| $ | (296 | ) |
| $ | 10,334 |
|
| $ | 19 |
|
| $ | 10,353 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net income |
|
| - |
|
|
| 0 |
|
|
| - |
|
|
| 0 |
|
|
| 0 |
|
|
| 78 |
|
|
| 0 |
|
|
| 78 |
|
|
| 8 |
|
|
| 86 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income |
|
| - |
|
|
| 0 |
|
|
| - |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 5 |
|
|
| 5 |
|
|
| 0 |
|
|
| 5 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Dividends |
|
| - |
|
|
| 0 |
|
|
| - |
|
|
| 0 |
|
|
| 0 |
|
|
| (139 | ) |
|
| 0 |
|
|
| (139 | ) |
|
| 0 |
|
|
| (139 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares repurchased |
|
| (4 | ) |
|
| 0 |
|
|
| (3 | ) |
|
| 0 |
|
|
| (79 | ) |
|
| (94 | ) |
|
| 0 |
|
|
| (173 | ) |
|
| 0 |
|
|
| (173 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other |
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 40 |
|
|
| (31 | ) |
|
| 0 |
|
|
| 9 |
|
|
| (8 | ) |
|
| 1 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance, March 31, 2020 |
|
| 343 |
|
| $ | 3 |
|
|
| 261 |
|
| $ | 3 |
|
| $ | 9,810 |
|
| $ | 589 |
|
| $ | (291 | ) |
| $ | 10,114 |
|
| $ | 19 |
|
| $ | 10,133 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance, December 31, 2021 | Balance, December 31, 2021 | 317 | $ | 3 | 248 | $ | 3 | $ | 9,265 | $ | 2,308 | $ | (304) | $ | 11,275 | $ | 15 | $ | 11,290 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance, June 30, 2020 |
|
| 344 |
|
| $ | 3 |
|
|
| 261 |
|
| $ | 3 |
|
| $ | 9,831 |
|
| $ | 674 |
|
| $ | (417 | ) |
| $ | 10,094 |
|
| $ | 17 |
|
| $ | 10,111 |
| Balance, June 30, 2020 | 344 | $ | 3 | 261 | $ | 3 | $ | 9,831 | $ | 674 | $ | (417) | $ | 10,094 | $ | 17 | $ | 10,111 | ||||||||||||||||||||||||||||||||||||||||
Net income |
|
| - |
|
|
| 0 |
|
|
| - |
|
|
| 0 |
|
|
| 0 |
|
|
| 1,897 |
|
|
| 0 |
|
|
| 1,897 |
|
|
| 19 |
|
|
| 1,916 |
| Net income | — | — | — | — | — | 1,330 | — | 1,330 | 9 | 1,339 | ||||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income |
|
| - |
|
|
| 0 |
|
|
| - |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 25 |
|
|
| 25 |
|
|
| 0 |
|
|
| 25 |
| Other comprehensive income | — | — | — | — | — | — | 16 | 16 | — | 16 | ||||||||||||||||||||||||||||||||||||||||||||||||
Dividends |
|
| - |
|
|
| 0 |
|
|
| - |
|
|
| 0 |
|
|
| 0 |
|
|
| (272 | ) |
|
| 0 |
|
|
| (272 | ) |
|
| 0 |
|
|
| (272 | ) | Dividends | — | — | — | — | — | (138) | — | (138) | — | (138) | ||||||||||||||||||||||||||||||||||||||||||||||||
Shares repurchased |
|
| (17 | ) |
|
| 0 |
|
|
| (7 | ) |
|
| 0 |
|
|
| (393 | ) |
|
| (332 | ) |
|
| 0 |
|
|
| (725 | ) |
|
| 0 |
|
|
| (725 | ) | Shares repurchased | (11) | — | (4) | — | (247) | (172) | — | (419) | — | (419) | ||||||||||||||||||||||||||||||||||||||||||||||||
Other |
|
| 2 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 117 |
|
|
| (55 | ) |
|
| 0 |
|
|
| 62 |
|
|
| (33 | ) |
|
| 29 |
| Other | 2 | — | — | — | 71 | (37) | — | 34 | (22) | 12 | ||||||||||||||||||||||||||||||||||||||||||||||||
Balance, March 31, 2021 |
|
| 329 |
|
| $ | 3 |
|
|
| 254 |
|
| $ | 3 |
|
| $ | 9,555 |
|
| $ | 1,912 |
|
| $ | (392 | ) |
| $ | 11,081 |
|
| $ | 3 |
|
| $ | 11,084 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance, June 30, 2019 |
|
| 354 |
|
| $ | 4 |
|
|
| 266 |
|
| $ | 3 |
|
| $ | 9,891 |
|
| $ | 357 |
|
| $ | (308 | ) |
| $ | 9,947 |
|
| $ | 11 |
|
| $ | 9,958 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net income |
|
| - |
|
|
| 0 |
|
|
| - |
|
|
| 0 |
|
|
| 0 |
|
|
| 877 |
|
|
| 0 |
|
|
| 877 |
|
|
| 24 |
|
|
| 901 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income |
|
| - |
|
|
| 0 |
|
|
| - |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 17 |
|
|
| 17 |
|
|
| 0 |
|
|
| 17 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Dividends |
|
| - |
|
|
| 0 |
|
|
| - |
|
|
| 0 |
|
|
| 0 |
|
|
| (282 | ) |
|
| 0 |
|
|
| (282 | ) |
|
| 0 |
|
|
| (282 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares repurchased |
|
| (12 | ) |
|
| (1 | ) |
|
| (5 | ) |
|
| 0 |
|
|
| (273 | ) |
|
| (326 | ) |
|
| 0 |
|
|
| (600 | ) |
|
| 0 |
|
|
| (600 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other |
|
| 1 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 192 |
|
|
| (37 | ) |
|
| 0 |
|
|
| 155 |
|
|
| (16 | ) |
|
| 139 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance, March 31, 2020 |
|
| 343 |
|
| $ | 3 |
|
|
| 261 |
|
| $ | 3 |
|
| $ | 9,810 |
|
| $ | 589 |
|
| $ | (291 | ) |
| $ | 10,114 |
|
| $ | 19 |
|
| $ | 10,133 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance, December 31, 2020 | Balance, December 31, 2020 | 335 | $ | 3 | 257 | $ | 3 | $ | 9,655 | $ | 1,657 | $ | (401) | $ | 10,917 | $ | 4 | $ | 10,921 |
| ||
(a) | Excludes Redeemable noncontrolling interests which are reflected in temporary equity (See Note 4—Fair Value under the heading “Redeemable Noncontrolling Interests”). |
The outbreak of the COVID-19 pandemic has resulted in widespread and continuing negative impacts on the macroeconomic environment and disruption to the Company’s business. Weak economic conditions and increased volatility and disruption in the financial markets pose risks to the Company and its business partners, including advertisers whose expenditures tend to reflect overall economic conditions. The COVID-19 pandemic has caused some of the Company’s advertisers to reduce their spending, and future declines in the economic prospects of advertisers or the economy in general could negatively impact their advertising expenditures further. Depending on the duration and severity of the weak economic environment, it could lead to changes in consumer behavior, including increasing numbers of consumers canceling or foregoing subscriptions to multi-channel video programming distributor (“MVPD”) services, that adversely affect the Company’s affiliate fee and advertising revenues. In addition, the Company’s business depends on the volume and popularity of the content it distributes, particularly sports content. Following the COVID-19 outbreak, sports events to which the Company has broadcast rights were cancelled or postponed and the production of certain entertainment content the Company distributes was suspended. In particular, the college football 2020 season was impacted by COVID-19, and as a result had an abridged schedule that included games that were shifted from the first quarter to the second quarter of fiscal 2021, but had fewer live games overall due to cancellations. Although most sports events and productions have resumed, there may be additional content disruptions in the future, and depending on their duration and severity, these disruptions could materially adversely affect the Company’s future advertising revenues and, over a longer period, its future affiliate fee revenues. To the extent the pandemic further negatively impacts the Company’s ability to air sports events, it could result in a significantly greater adverse effect on the Company’s business, financial condition or results of operations than the Company has experienced thus far. In addition, shifting sports schedules may negatively impact the Company’s ability to attract viewers and advertisers to its sports and entertainment programming.
The Company assessed certain accounting matters that generally require consideration of forecasted financial information in context with the information reasonably available to the Company and the best estimates of the future impacts of COVID-19 as of March 31, 2021. The accounting matters assessed included, but were not limited to, the Company’s valuation allowances, programming rights and the carrying value of the goodwill and other long-lived assets. While there was not an impact to the Company’s consolidated financial statements as of March 31, 2021, the Company’s future assessment of the magnitude and duration of COVID-19, as well as other factors, could result in material impacts to the Company’s consolidated financial statements in future reporting periods.
6
FOX CORPORATION
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
advances to entities or joint ventures in which the Company has significant influence, but less than a controlling financial interest, are accounted for using the equity method. Significant influence generally exists when the Company owns an interest between 20% and 50%. In accordance with Accounting Standards Codification (“ASC”) 321 “Investments—Equity Securities” (“ASC 321”), equity securities in which the Company has no significant influence (generally less than a 20% ownership interest) with readily determinable fair values are accounted for at fair value based on quoted market prices. Equity securities without readily determinable fair values are accounted for either at fair value or using the measurement alternative method, which is at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer.issuer. All gains and losses on investments in equity securities are recognized in the Unaudited Consolidated Statements of Operations.
Pursuant to the merger agreement relating to the merger of Twenty-First Century Fox, Inc. (“21CF”) and The Walt Disney Company (“Disney”), the Company made a prepayment of approximately $700 million which represented the Company’s share of the estimated tax liabilities resulting from the anticipated divestitures by Disney of certain assets (the “Divestiture Tax”), principally the FOX Sports Regional Sports Networks (“RSNs”). During the first quarter of fiscal 2021, the Company and Disney reached an agreement to settle the majority of the prepaid Divestiture Tax and the Company received $462 million from Disney as reimbursement of the Company’s prepayment based upon the sales price of the RSNs. This reimbursement was recorded in Other, net in the Statement of Operations (See Note 11—Additional Financial Informationunder the heading “Other, net”). The balance of the prepaid Divestiture Tax is subject to adjustment in the future, but any such adjustment is not expected to have a material impact on the results of the Company.
Operations.
Adopted
In June 2016, the Financial Accounting Standards Board (“FASB”)
In August 2018, the FASB issued ASU 2018-15, “Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract” (“ASU 2018-15”). On July 1, 2020, the Company adopted ASU 2018-15 on a prospective basis. The amendments in ASU 2018-15 require implementation costs incurred in a hosting arrangement that is a service contract to be capitalized using the same guidance for capitalizing implementation costs incurred to develop or obtain internal-use software. In addition, ASU 2018-15 provides guidance regarding the term over which capitalized implementation costs are to be amortized and requires specific financial statement presentation and disclosures. The adoption of ASU 2018-15 did not have a material impact on the Company’s Financial Statements.
In March 2019, the FASB issued ASU 2019-02, “Entertainment—Films—Other Assets—Film Costs (Subtopic 926-20) and Entertainment—Broadcasters—Intangibles—Goodwill and Other (Subtopic 920-350): Improvements to Accounting for Costs of Films and License Agreements for Program Materials” (“ASU 2019-02”). On July 1, 2020, the Company adopted ASU 2019-02 on a prospective basis and reclassified entertainment programming rights, with a contract duration of longer than a year, that were previously classified as the current portion of inventories, net to non-current inventories, net on the Balance Sheet. The amendments in ASU 2019-02 align the accounting treatment for production costs of episodic television series with the accounting treatment for production costs of films. In addition, ASU 2019-02 modifies certain aspects of the amortization, impairment, presentation and disclosure requirements in ASC 926-20 and the impairment, presentation and disclosure requirements in ASC 920-350, including eliminating the
7
FOX CORPORATION
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
balance sheet classification guidance. The adoption of ASU 2019-02 did not have a significant impact on the Company’s Financial Statements (See Note 3—Inventories, net for additional information).
Fiscal 2021
Acquisitions
Outkick Media Acquisition
In May 2021, the Company entered into a binding term sheet to acquire Outkick Media, LLC, a digital media company focused on the intersection of sports, news and entertainment.
Disposals
Sports Marketing Businesses Divestiture
In March 2021, the Company sold its sports marketing businesses for cash consideration subject to post-closing adjustments and recorded a gain in Other, net in the Statement of Operations.
Fiscal 2020
Acquisitions and Disposals
Television Stations Acquisition and Divestiture
In March 2020, the Company acquired 3 television stations (FOX-affiliate KCPQ and MyNetworkTV-affiliate KZJO located in Seattle, Washington and FOX-affiliate WITI located in Milwaukee, Wisconsin) for approximately $350 million in cash from Nexstar Media Group, Inc. (“Nexstar”). As part of this transaction, the Company sold Nexstar 2 television stations (FOX-affiliate WJZY and MyNetworkTV-affiliate WMYT located in Charlotte, North Carolina) for approximately $45 million in cash. The consideration transferred of approximately $350 million for the stations the Company acquired has been allocated, based on a final valuation, as follows: approximately $210 million to intangible assets, of which approximately $110 million has been allocated to Federal Communications Commission licenses with indefinite lives and approximately $100 million to amortizable intangible assets, primarily retransmission agreements with useful lives of eight years; approximately $30 million to property, plant and equipment; and the balance to goodwill. The estimated goodwill, which is tax deductible, reflects the increased synergies and market penetration expected from combining the operations of the 3 television stations with those of the Company. The Company finalized its purchase price accounting for the acquisition during the third quarter of fiscal 2021 without any material adjustments.
Credible Acquisition
In October 2019, the Company acquired 67% of the equity in Credible Labs Inc. (“Credible”), a U.S. consumer finance marketplace, for approximately $260 million in cash (the “Credible Acquisition”), net of cash acquired. The remaining 33% of Credible not owned by the Company was recorded at fair value on the acquisition date based on the Company’s valuation of Credible’s business using a market approach (a Level 3 measurement as defined in Note 4—Fair Value). The consideration transferred of approximately $260 million has been allocated, based on a final valuation of 100% of Credible, as follows: approximately $75 million to intangible assets with useful lives ranging from five to 10 years; approximately $285 million representing goodwill; approximately $(110) million to redeemable noncontrolling interests and the remainder to other net assets. The estimated goodwill, which is not tax deductible, reflects the increased market penetration and synergies expected from combining the operations of Credible and the Company. The Company finalized
8
FOX CORPORATION
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
its purchase price accounting for the Credible Acquisition during the second quarter of fiscal 2021 without any material adjustments.
In accordance with ASC 920, “Entertainment—Broadcasters” (“ASC 920”), costs incurred in acquiring program rights or producing programs for the Cable Network Programming and Television segments, including advances, are capitalized and amortized over the license period or projected useful life of the programming. Program rights and the related liabilities are recorded at the gross amount of the liabilities when the license period has begun, the cost of the program is determinable and the program is accepted and available for airing. Effective for the Company beginning on July 1, 2020, ASC 920 permits program rights to be recorded in non-current inventories, net rather than segregated between current and non-current inventories, net. As a result, the Company reclassified entertainment programming rights, with a contract duration of longer than a year, that were previously classified as the current portion of inventories, net to non-current inventories, net on the Balance Sheet. Advances on sports events expected to be broadcast within one year and programs with an initial license period of one year or less continue to be recorded in the current portion of inventories, net. Television broadcast network entertainment programming, which includes acquired series, co-produced series, movies and other programs, are amortized primarily on an accelerated basis.
The Company has single and multi-year contracts for broadcast rights of programs and sports events. The Company evaluates the recoverability of the unamortized costs associated therewith, using total estimated advertising and other revenues attributable to the program material and considering the Company’s expectations of the usefulness of the program rights. The recoverability of entertainment programming is generally assessed on a contract basis and the recoverability of certain sports rights contracts for content broadcast on the FOX Network and the sports channels is assessed on an aggregate basis. Where an evaluation indicates that these multi-year contracts will result in an asset that is not recoverable, amortization of rights is accelerated in an amount equal to the amount by which the unamortized costs exceed fair value. The costs of multi-year sports contracts at the FOX Network and the sports channels are primarily amortized based on the ratio of each current period’s attributable revenue for each contract to the estimated total remaining attributable revenue for each contract. Estimates can change and, accordingly, are reviewed periodically and amortization is adjusted as necessary. Such changes in the future could be material.
|
| As of March 31, 2021 |
|
| As of June 30, 2020 |
| As of December 31, 2021 | As of June 30, 2021 | |||||||||||
|
| (in millions) |
| (in millions) | |||||||||||||||
Sports programming rights |
| $ | 505 |
|
| $ | 674 |
| Sports programming rights | $ | 916 | $ | 573 | ||||||
Entertainment programming rights |
|
| 363 |
|
|
| 384 |
| Entertainment programming rights | 694 | 355 | ||||||||
Total inventories, net |
|
| 868 |
|
|
| 1,058 |
| Total inventories, net | 1,610 | 928 | ||||||||
Less: current portion of inventories, net |
|
| (685 | ) |
|
| (856 | ) | Less: current portion of inventories, net | (1,148) | (729) | ||||||||
Total non-current inventories, net |
| $ | 183 |
|
| $ | 202 |
| Total non-current inventories, net | $ | 462 | $ | 199 |
9
FOX CORPORATION
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
|
| Fair value measurements |
| Fair value measurements | |||||||||||||||||||||||||||||||||||||||||
|
| As of March 31, 2021 |
| As of December 31, 2021 | |||||||||||||||||||||||||||||||||||||||||
|
| Total |
|
| Level 1 |
|
| Level 2 |
|
| Level 3 |
| Total | Level 1 | Level 2 | Level 3 | |||||||||||||||||||||||||||||
|
| (in millions) |
| (in millions) | |||||||||||||||||||||||||||||||||||||||||
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Assets | ||||||||||||||||||||||||||||
Investments in equity securities |
| $ | 926 |
|
| $ | 926 | (a) |
| $ | 0 |
|
| $ | 0 |
| Investments in equity securities | $ | 689 | $ | 689 | (a) | $ | — | $ | — | |||||||||||||||||||
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||
Other |
|
| (4 | ) |
|
| 0 |
|
|
| 0 |
|
|
| (4 | ) (b) | |||||||||||||||||||||||||||||
Redeemable noncontrolling interests |
|
| (225 | ) |
|
| 0 |
|
|
| 0 |
|
|
| (225 | ) (b) | Redeemable noncontrolling interests | (172) | — | — | (172) | (b) | |||||||||||||||||||||||
Total |
| $ | 697 |
|
| $ | 926 |
|
| $ | 0 |
|
| $ | (229 | ) | Total | $ | 517 | $ | 689 | $ | — | $ | (172) |
|
| Fair value measurements |
| |||||||||||||
|
| As of June 30, 2020 |
| |||||||||||||
|
| Total |
|
| Level 1 |
|
| Level 2 |
|
| Level 3 |
| ||||
|
| (in millions) |
| |||||||||||||
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments in equity securities |
| $ | 531 |
|
| $ | 531 | (a) |
| $ | 0 |
|
| $ | 0 |
|
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other |
|
| (6 | ) |
|
| 0 |
|
|
| 0 |
|
|
| (6) | (b) |
Redeemable noncontrolling interests |
|
| (305 | ) |
|
| 0 |
|
|
| 0 |
|
|
| (305) | (b) |
Total |
| $ | 220 |
|
| $ | 531 |
|
| $ | 0 |
|
| $ | (311) |
|
Fair value measurements | |||||||||||||||||||||||||||||
As of June 30, 2021 | |||||||||||||||||||||||||||||
Total | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||||||
(in millions) | |||||||||||||||||||||||||||||
Assets | |||||||||||||||||||||||||||||
Investments in equity securities | $ | 788 | $ | 788 | (a) | $ | — | $ | — | ||||||||||||||||||||
Redeemable noncontrolling interests | (261) | — | — | (261) | (b) | ||||||||||||||||||||||||
Total | $ | 527 | $ | 788 | $ | — | $ | (261) |
| ||
(a) | The investment categorized as Level 1 represents an investment in equity securities of Flutter Entertainment plc (“Flutter”) with a readily determinable fair value (See Note 3—Acquisitions, Disposals and Other Transactions in the |
| |||||
(b) | The Company utilizes the market approach valuation technique for its Level 3 fair value measures. Inputs to such measures could include observable market data obtained from independent sources such as broker quotes and recent market transactions for similar assets. It is the Company’s policy to maximize the use of observable inputs in the measurement of its Level 3 fair value measurements. To the extent observable inputs are not available, the Company utilizes unobservable inputs based upon the assumptions market participants would use in valuing the liability. Examples of utilized unobservable inputs are future cash flows and long-term growth rates. |
10
FOX CORPORATION
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
an entertainment production company.
|
| For the three months ended March 31, |
|
| For the nine months ended March 31, |
| For the three months ended December 31, | For the six months ended December 31, | |||||||||||||||||||||||||||||||
|
| 2021 |
|
| 2020 |
|
| 2021 |
|
| 2020 |
| 2021 | 2020 | 2021 | 2020 | |||||||||||||||||||||||
|
| (in millions) |
| (in millions) | |||||||||||||||||||||||||||||||||||
Beginning of period |
| $ | (202 | ) |
| $ | (216 | ) |
| $ | (305 | ) |
| $ | (189 | ) | Beginning of period | $ | (302) | $ | (310) | $ | (261) | $ | (305) | ||||||||||||||
Acquisitions(a) |
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| (109 | ) | Acquisitions(a) | (13) | — | (58) | — | ||||||||||||||||||
Net income |
|
| (5 | ) |
|
| (4 | ) |
|
| (13 | ) |
|
| (16 | ) | |||||||||||||||||||||||
Net loss (income) | Net loss (income) | 3 | (4) | 4 | (8) | ||||||||||||||||||||||||||||||||||
Redemption of noncontrolling interests(b) |
|
| 0 |
|
|
| 0 |
|
|
| 135 |
|
|
| 0 |
| Redemption of noncontrolling interests(b) | — | 135 | — | 135 | ||||||||||||||||||
Distributions |
|
| 1 |
|
|
| 6 |
|
|
| 12 |
|
|
| 19 | �� | Distributions | — | 5 | 3 | 11 | ||||||||||||||||||
Accretion and other(c) |
|
| (19 | ) |
|
| (44 | ) |
|
| (54 | ) |
|
| 37 |
| Accretion and other(c) | 140 | (28) | 140 | (35) | ||||||||||||||||||
End of period |
| $ | (225 | ) |
| $ | (258 | ) |
| $ | (225 | ) |
| $ | (258 | ) | End of period | $ | (172) | $ | (202) | $ | (172) | $ | (202) |
|
| |
| |||||
(a) | The increase for the six months ended December 31, 2021 was primarily due to the acquisition of an entertainment production company. | ||||
(b) | As a result of the exercise of a portion of the put rights held by the sports network minority shareholder during the |
(c) | As a result of the expiration of |
The final put right held by the sports network minority shareholder will become exercisable in the first quarter of fiscal 2022.
The put right held by the entertainment production company's minority shareholder will become exercisable in fiscal 2027.
|
| As of March 31, 2021 |
|
| As of June 30, 2020 |
| As of December 31, 2021 | As of June 30, 2021 | |||||||||||
|
| (in millions) |
| (in millions) | |||||||||||||||
Borrowings |
|
|
|
|
|
|
|
| Borrowings | ||||||||||
Fair value |
| $ | 9,235 |
|
| $ | 9,746 |
| Fair value | $ | 9,362 | $ | 9,474 | ||||||
Carrying value |
| $ | 7,950 |
|
| $ | 7,946 |
| Carrying value | $ | 7,954 | $ | 7,951 |
11
FOX CORPORATION
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
Senior Notes Issued
In fiscal 2020, the Company’s
In accordance with the ASR agreements, in August 2020, the Company paid a third-party financial institution $154 million and $66 million and received initial deliveries of approximately 4.7 million and 2.0 million shares of Class A Common Stock and Class B Common Stock, respectively, representing 80% of the shares expected to be repurchased under each ASR agreement, at a price of $26.00 and $26.01 per share, which was
In addition to the shares purchased under the ASR agreements, the Company repurchased shares of Class A Common Stock and Class B Common Stock in the open market. In total, the Company repurchased approximately 2414 million shares of Common Stock for $725approximately $497 million during the ninesix months ended MarchDecember 31, 2021.
$53 million.
|
| For the three months ended March 31, |
|
| For the nine months ended March 31, |
| ||||||||||
|
| 2021 |
|
| 2020 |
|
| 2021 |
|
| 2020 |
| ||||
Cash dividend per share |
| $ | 0.23 |
|
| $ | 0.23 |
|
| $ | 0.46 |
|
| $ | 0.46 |
|
For the three months ended December 31, | For the six months ended December 31, | ||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
Cash dividend per share | $ | — | $ | — | $ | 0.24 | $ | 0.23 |
12
FOX CORPORATION
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
The
The
|
| For the three months ended March 31, |
|
| For the nine months ended March 31, |
| For the three months ended December 31, | For the six months ended December 31, | |||||||||||||||||||||||||||||||||||||||||||
|
| 2021 |
|
| 2020 |
|
| 2021 |
|
| 2020 |
| 2021 | 2020 | 2021 | 2020 | |||||||||||||||||||||||||||||||||||
|
| (in millions) |
| (in millions) | |||||||||||||||||||||||||||||||||||||||||||||||
Equity-based compensation |
| $ | 37 |
|
| $ | 41 |
|
| $ | 112 |
|
| $ | 115 |
| Equity-based compensation | $ | 32 | $ | 44 | $ | 47 | $ | 75 | ||||||||||||||||||||||||||
Intrinsic value of all settled equity-based awards |
| $ | 4 |
|
| $ | 2 |
| �� | $ | 95 |
|
| $ | 8 |
| Intrinsic value of all settled equity-based awards | $ | 18 | $ | 10 | $ | 94 | $ | 91 | ||||||||||||||||||||||||||
Tax benefit on settled equity-based awards |
| $ | 1 |
|
| $ | 1 |
|
| $ | 17 |
|
| $ | 2 |
| Tax benefit on settled equity-based awards | $ | 4 | $ | 2 | $ | 21 | $ | 16 |
During the nine months ended March 31, 2020, approximately 1.1 million RSUs were granted, which vest in equal annual installments over a three-year period subject to the participants’ continued employment with the Company.
Stock Options
During the nine months ended March 31, 2020, approximately 3.8 million stock options were granted, which generally have a term of seven years and vest in equal annual installments over a three-year period subject to the participants’ continued employment with the Company.
Performance-based stock options (“PSOs”) are awards that entitle the holder to purchase a specified number of shares of Class A Common Stock at a specified price for a specified period of time, contingent on the performance of the Class A Common Stock over a three-year period, subject to the terms and conditions of the SAP, the applicable award documents and such other terms and conditions as the Compensation Committee of the Board may establish. The PSOs granted under the SAP will vest in full only if the Company’s Class A Common Stock exceeds the exercise price of the PSO by a certain threshold over a certain period of time during the performance period (the “market condition”). The PSOs were fair valued using a Monte Carlo simulation model that uses the following assumptions: (i) expected volatility; (ii) expected term; (iii) risk-free interest rate; and (iv) expected dividend yield.Compensation cost related to the PSO will be recognized even if the market condition is not met.
13
FOX CORPORATION
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
payments.
14
FOX CORPORATION
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
|
|
•Cable Network Programming, which principally consists of the production and licensing of news and sports content distributed primarily through traditional cable television systems, direct broadcast satellite operators and telecommunication companies (“traditional MVPDs”) and online multi-channel video programming distributors (“digital MVPDs”), primarily in the U.S. |
|
•Television, which principally consists of the production, acquisition, marketing and distribution of broadcast network programming and free advertising-supported video-on-demand (“AVOD”) services under the FOX and Tubi brands, respectively, and the operation of 29 full power broadcast television stations, including 11 duopolies, in the U.S. Of these stations, 18 are affiliated with the FOX Network, 10 are affiliated with MyNetworkTV and 1 is an independent station. |
|
15
|
| For the three months ended March 31, |
|
| For the nine months ended March 31, |
| For the three months ended December 31, | For the six months ended December 31, | |||||||||||||||||||||||||||||||||||||||||||
|
| 2021 |
|
| 2020 |
|
| 2021 |
|
| 2020 |
| 2021 | 2020 | 2021 | 2020 | |||||||||||||||||||||||||||||||||||
|
| (in millions) |
| (in millions) | |||||||||||||||||||||||||||||||||||||||||||||||
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Revenues | ||||||||||||||||||||||||||||||||||
Cable Network Programming |
| $ | 1,471 |
|
| $ | 1,467 |
|
| $ | 4,284 |
|
| $ | 4,221 |
| Cable Network Programming | $ | 1,638 | $ | 1,488 | $ | 3,054 | $ | 2,813 | ||||||||||||||||||||||||||
Television |
|
| 1,695 |
|
|
| 1,926 |
|
|
| 5,601 |
|
|
| 5,548 |
| Television | 2,759 | 2,556 | 4,340 | 3,906 | ||||||||||||||||||||||||||||||
Other, Corporate and Eliminations |
|
| 49 |
|
|
| 47 |
|
|
| 134 |
|
|
| 116 |
| Other, Corporate and Eliminations | 44 | 43 | 92 | 85 | ||||||||||||||||||||||||||||||
Total revenues |
| $ | 3,215 |
|
| $ | 3,440 |
|
| $ | 10,019 |
|
| $ | 9,885 |
| Total revenues | $ | 4,441 | $ | 4,087 | $ | 7,486 | $ | 6,804 | ||||||||||||||||||||||||||
Segment EBITDA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Segment EBITDA | ||||||||||||||||||||||||||||||||||
Cable Network Programming |
| $ | 850 |
|
| $ | 792 |
|
| $ | 2,202 |
|
| $ | 2,032 |
| Cable Network Programming | $ | 668 | $ | 571 | $ | 1,442 | $ | 1,352 | ||||||||||||||||||||||||||
Television |
|
| 135 |
|
|
| 224 |
|
|
| 407 |
|
|
| 261 |
| Television | (273) | (185) | 86 | 272 | ||||||||||||||||||||||||||||||
Other, Corporate and Eliminations |
|
| (86 | ) |
|
| (96 | ) |
|
| (239 | ) |
|
| (256 | ) | Other, Corporate and Eliminations | (85) | (81) | (154) | (153) | ||||||||||||||||||||||||||||||
Amortization of cable distribution investments |
|
| (6 | ) |
|
| (5 | ) |
|
| (17 | ) |
|
| (19 | ) | Amortization of cable distribution investments | (4) | (6) | (9) | (11) | ||||||||||||||||||||||||||||||
Depreciation and amortization |
|
| (78 | ) |
|
| (57 | ) |
|
| (216 | ) |
|
| (164 | ) | Depreciation and amortization | (93) | (70) | (172) | (138) | ||||||||||||||||||||||||||||||
Impairment and restructuring charges |
|
| 0 |
|
|
| 0 |
|
|
| (35 | ) |
|
| (9 | ) | Impairment and restructuring charges | — | — | — | (35) | ||||||||||||||||||||||||||||||
Interest expense |
|
| (98 | ) |
|
| (89 | ) |
|
| (296 | ) |
|
| (269 | ) | |||||||||||||||||||||||||||||||||||
Interest income |
|
| 0 |
|
|
| 8 |
|
|
| 3 |
|
|
| 33 |
| |||||||||||||||||||||||||||||||||||
Interest expense, net | Interest expense, net | (97) | (97) | (194) | (195) | ||||||||||||||||||||||||||||||||||||||||||||||
Other, net |
|
| 61 |
|
|
| (632 | ) |
|
| 752 |
|
|
| (345 | ) | Other, net | (211) | 172 | (142) | 691 | ||||||||||||||||||||||||||||||
Income before income tax expense |
|
| 778 |
|
|
| 145 |
|
|
| 2,561 |
|
|
| 1,264 |
| |||||||||||||||||||||||||||||||||||
Income tax expense |
|
| (196 | ) |
|
| (55 | ) |
|
| (632 | ) |
|
| (347 | ) | |||||||||||||||||||||||||||||||||||
Net income |
|
| 582 |
|
|
| 90 |
|
|
| 1,929 |
|
|
| 917 |
| |||||||||||||||||||||||||||||||||||
(Loss) income before income tax benefit (expense) | (Loss) income before income tax benefit (expense) | (95) | 304 | 857 | 1,783 | ||||||||||||||||||||||||||||||||||||||||||||||
Income tax benefit (expense) | Income tax benefit (expense) | 22 | (74) | (222) | (436) | ||||||||||||||||||||||||||||||||||||||||||||||
Net (loss) income | Net (loss) income | (73) | 230 | 635 | 1,347 | ||||||||||||||||||||||||||||||||||||||||||||||
Less: Net income attributable to noncontrolling interests |
|
| (15 | ) |
|
| (12 | ) |
|
| (32 | ) |
|
| (40 | ) | Less: Net income attributable to noncontrolling interests | (12) | (6) | (19) | (17) | ||||||||||||||||||||||||||||||
Net income attributable to Fox Corporation stockholders |
| $ | 567 |
|
| $ | 78 |
|
| $ | 1,897 |
|
| $ | 877 |
| |||||||||||||||||||||||||||||||||||
Net (loss) income attributable to Fox Corporation stockholders | Net (loss) income attributable to Fox Corporation stockholders | $ | (85) | $ | 224 | $ | 616 | $ | 1,330 |
16
|
| For the three months ended March 31, |
|
| For the nine months ended March 31, |
| For the three months ended December 31, | For the six months ended December 31, | |||||||||||||||||||||||||||||||||||||||||||
|
| 2021 |
|
| 2020 |
|
| 2021 |
|
| 2020 |
| 2021 | 2020 | 2021 | 2020 | |||||||||||||||||||||||||||||||||||
|
| (in millions) |
| (in millions) | |||||||||||||||||||||||||||||||||||||||||||||||
Cable Network Programming |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Cable Network Programming | ||||||||||||||||||||||||||||||||||
Affiliate fee |
| $ | 1,068 |
|
| $ | 1,006 |
|
| $ | 2,969 |
|
| $ | 2,902 |
| Affiliate fee | $ | 1,039 | $ | 928 | $ | 2,065 | $ | 1,901 | ||||||||||||||||||||||||||
Advertising |
|
| 283 |
|
|
| 304 |
|
|
| 1,023 |
|
|
| 895 |
| Advertising | 454 | 441 | 765 | 740 | ||||||||||||||||||||||||||||||
Other |
|
| 120 |
|
|
| 157 |
|
|
| 292 |
|
|
| 424 |
| Other | 145 | 119 | 224 | 172 | ||||||||||||||||||||||||||||||
Total Cable Network Programming revenues |
|
| 1,471 |
|
|
| 1,467 |
|
|
| 4,284 |
|
|
| 4,221 |
| Total Cable Network Programming revenues | 1,638 | 1,488 | 3,054 | 2,813 | ||||||||||||||||||||||||||||||
Television |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Television | ||||||||||||||||||||||||||||||||||
Advertising |
|
| 915 |
|
|
| 1,266 |
|
|
| 3,426 |
|
|
| 3,726 |
| Advertising | 1,954 | 1,841 | 2,773 | 2,511 | ||||||||||||||||||||||||||||||
Affiliate fee |
|
| 651 |
|
|
| 553 |
|
|
| 1,801 |
|
|
| 1,487 |
| Affiliate fee | 649 | 590 | 1,290 | 1,150 | ||||||||||||||||||||||||||||||
Other |
|
| 129 |
|
|
| 107 |
|
|
| 374 |
|
|
| 335 |
| Other | 156 | 125 | 277 | 245 | ||||||||||||||||||||||||||||||
Total Television revenues |
|
| 1,695 |
|
|
| 1,926 |
|
|
| 5,601 |
|
|
| 5,548 |
| Total Television revenues | 2,759 | 2,556 | 4,340 | 3,906 | ||||||||||||||||||||||||||||||
Other, Corporate and Eliminations |
|
| 49 |
|
|
| 47 |
|
|
| 134 |
|
|
| 116 |
| Other, Corporate and Eliminations | 44 | 43 | 92 | 85 | ||||||||||||||||||||||||||||||
Total revenues |
| $ | 3,215 |
|
| $ | 3,440 |
|
| $ | 10,019 |
|
| $ | 9,885 |
| Total revenues | $ | 4,441 | $ | 4,087 | $ | 7,486 | $ | 6,804 |
|
| For the three months ended March 31, |
|
| For the nine months ended March 31, |
| For the three months ended December 31, | For the six months ended December 31, | |||||||||||||||||||||||||||||||||||||||||||
|
| 2021 |
|
| 2020 |
|
| 2021 |
|
| 2020 |
| 2021 | 2020 | 2021 | 2020 | |||||||||||||||||||||||||||||||||||
|
| (in millions) |
| (in millions) | |||||||||||||||||||||||||||||||||||||||||||||||
Depreciation and amortization |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Depreciation and amortization | ||||||||||||||||||||||||||||||||||
Cable Network Programming |
| $ | 16 |
|
| $ | 15 |
|
| $ | 41 |
|
| $ | 44 |
| Cable Network Programming | $ | 17 | $ | 12 | $ | 27 | $ | 25 | ||||||||||||||||||||||||||
Television |
|
| 26 |
|
|
| 17 |
|
|
| 77 |
|
|
| 46 |
| Television | 28 | 26 | 54 | 51 | ||||||||||||||||||||||||||||||
Other, Corporate and Eliminations |
|
| 36 |
|
|
| 25 |
|
|
| 98 |
|
|
| 74 |
| Other, Corporate and Eliminations | 48 | 32 | 91 | 62 | ||||||||||||||||||||||||||||||
Total depreciation and amortization |
| $ | 78 |
|
| $ | 57 |
|
| $ | 216 |
|
| $ | 164 |
| Total depreciation and amortization | $ | 93 | $ | 70 | $ | 172 | $ | 138 |
|
| As of March 31, 2021 |
|
| As of June 30, 2020 |
| As of December 31, 2021 | As of June 30, 2021 | |||||||||||
|
| (in millions) |
| (in millions) | |||||||||||||||
Assets |
|
|
|
|
|
|
|
| Assets | ||||||||||
Cable Network Programming |
| $ | 2,584 |
|
| $ | 2,591 |
| Cable Network Programming | $ | 2,623 | $ | 2,577 | ||||||
Television |
|
| 7,247 |
|
|
| 7,054 |
| Television | 9,094 | 7,305 | ||||||||
Other, Corporate and Eliminations |
|
| 12,039 |
|
|
| 11,487 |
| Other, Corporate and Eliminations | 10,330 | 12,145 | ||||||||
Investments |
|
| 1,037 |
|
|
| 618 |
| Investments | 831 | 899 | ||||||||
Total assets |
| $ | 22,907 |
|
| $ | 21,750 |
| Total assets | $ | 22,878 | $ | 22,926 |
17
Impairment and Restructuring Charges
Impairment and restructuring charges were $35 million and $9 million for the nine months ended March 31, 2021 and 2020, respectively, which were primarily comprised of severance costs principally at the Cable Network Programming segment.
|
| For the three months ended March 31, |
|
| For the nine months ended March 31, |
| ||||||||||
|
| 2021 |
|
| 2020 |
|
| 2021 |
|
| 2020 |
| ||||
|
| (in millions) |
| |||||||||||||
Transaction costs(a) |
| $ | (2 | ) |
| $ | (29 | ) |
| $ | 431 |
|
| $ | (72 | ) |
Net gains (losses) on investments in equity securities(b) |
|
| 43 |
|
|
| (567 | ) |
|
| 384 |
|
|
| (185 | ) |
U.K. Newspaper Matters Indemnity(c) |
|
| (15 | ) |
|
| (18 | ) |
|
| (43 | ) |
|
| (62 | ) |
Other |
|
| 35 |
|
|
| (18 | ) |
|
| (20 | ) |
|
| (26 | ) |
Total other, net |
| $ | 61 |
|
| $ | (632 | ) |
| $ | 752 |
|
| $ | (345 | ) |
For the three months ended December 31, | For the six months ended December 31, | ||||||||||||||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||||||||||||||
(in millions) | |||||||||||||||||||||||||||||||||||
Net (losses) gains on investments in equity securities(a) | $ | (165) | $ | 220 | $ | (102) | $ | 341 | |||||||||||||||||||||||||||
U.K Newspaper Matters Indemnity(b) | (32) | (15) | (49) | (28) | |||||||||||||||||||||||||||||||
Transaction Costs(c) | (11) | (18) | (24) | 433 | |||||||||||||||||||||||||||||||
Other | (3) | (15) | 33 | (55) | |||||||||||||||||||||||||||||||
Total other, net | $ | (211) | $ | 172 | $ | (142) | $ | 691 |
|
| |
| |||||
(a) | Net (losses) gains |
| ||||||||
(b) | See Note 8—Commitments and Contingencies under the heading “U.K. Newspaper Matters Indemnity.” |
(c) | The transaction costs for the six months ended December 31, 2020 are primarily related to the reimbursement from Disney of $462 million related to the substantial settlement of the Company’s prepayment of its share of the Divestiture Tax (as defined in Note 1—Description of Business and Basis of Presentation in the 2021 Form 10-K). |
|
| As of March 31, 2021 |
|
| As of June 30, 2020 |
| As of December 31, 2021 | As of June 30, 2021 | |||||||||||
|
| (in millions) |
| (in millions) | |||||||||||||||
Investments(a) |
| $ | 1,037 |
|
| $ | 618 |
| Investments(a) | $ | 831 | $ | 899 | ||||||
Operating lease ROU assets |
|
| 474 |
|
|
| 539 |
| Operating lease ROU assets | 476 | 469 | ||||||||
Inventories, net | Inventories, net | 462 | 199 | ||||||||||||||||
Grantor Trust |
|
| 291 |
|
|
| 247 |
| Grantor Trust | 300 | 304 | ||||||||
Inventories, net |
|
| 183 |
|
|
| 202 |
| |||||||||||
Other |
|
| 190 |
|
|
| 195 |
| Other | 207 | 187 | ||||||||
Total other non-current assets |
| $ | 2,175 |
|
| $ | 1,801 |
| Total other non-current assets | $ | 2,276 | $ | 2,058 |
| ||
(a) | Included investments accounted for at fair value on a recurring basis of |
18
Accounts Payable, Accrued Expenses and Other Current Liabilities
|
| As of March 31, 2021 |
|
| As of June 30, 2020 |
| As of December 31, 2021 | As of June 30, 2021 | |||||||||||
|
| (in millions) |
| (in millions) | |||||||||||||||
Accrued expenses |
| $ | 1,070 |
|
| $ | 907 |
| Accrued expenses | $ | 850 | $ | 1,077 | ||||||
Program rights payable |
|
| 625 |
|
|
| 485 |
| Program rights payable | 771 | 659 | ||||||||
Deferred revenue |
|
| 214 |
|
|
| 152 |
| Deferred revenue | 163 | 196 | ||||||||
Operating lease liabilities |
|
| 90 |
|
|
| 122 |
| Operating lease liabilities | 105 | 92 | ||||||||
Other current liabilities |
|
| 237 |
|
|
| 240 |
| Other current liabilities | 231 | 229 | ||||||||
Total accounts payable, accrued expenses and other current liabilities |
| $ | 2,236 |
|
| $ | 1,906 |
| Total accounts payable, accrued expenses and other current liabilities | $ | 2,120 | $ | 2,253 |
|
| As of March 31, 2021 |
|
| As of June 30, 2020 |
| As of December 31, 2021 | As of June 30, 2021 | |||||||||||
|
| (in millions) |
| (in millions) | |||||||||||||||
Accrued non-current pension/postretirement liabilities |
| $ | 678 |
|
| $ | 709 |
| Accrued non-current pension/postretirement liabilities | $ | 560 | $ | 586 | ||||||
Non-current operating lease liabilities |
|
| 413 |
|
|
| 452 |
| Non-current operating lease liabilities | 406 | 409 | ||||||||
Other non-current liabilities |
|
| 321 |
|
|
| 321 |
| Other non-current liabilities | 376 | 341 | ||||||||
Total other liabilities |
| $ | 1,412 |
|
| $ | 1,482 |
| Total other liabilities | $ | 1,342 | $ | 1,336 |
|
| For the nine months ended March 31, |
| For the six months ended December 31, | |||||||||||||||
|
| 2021 |
|
| 2020 |
| 2021 | 2020 | |||||||||||
|
| (in millions) |
| (in millions) | |||||||||||||||
Supplemental cash flows information |
|
|
|
|
|
|
|
| Supplemental cash flows information | ||||||||||
Cash paid for interest |
| $ | (370 | ) |
| $ | (355 | ) | Cash paid for interest | $ | (200) | $ | (206) | ||||||
Cash paid for income taxes |
| $ | (132 | ) |
| $ | (75 | ) | Cash paid for income taxes | $ | (155) | $ | (92) | ||||||
|
|
|
|
|
|
|
|
| |||||||||||
Supplemental information on acquisitions |
|
|
|
|
|
|
|
| Supplemental information on acquisitions | ||||||||||
Fair value of assets acquired, excluding cash |
| $ | 0 |
|
| $ | 773 |
| Fair value of assets acquired, excluding cash | $ | 335 | $ | — | ||||||
Cash acquired |
|
| 0 |
|
|
| 15 |
| Cash acquired | 10 | — | ||||||||
Liabilities assumed |
|
| 0 |
|
|
| (53 | ) | Liabilities assumed | (48) | — | ||||||||
Noncontrolling interests |
|
| 0 |
|
|
| (109 | ) | |||||||||||
Redeemable noncontrolling interests issued | Redeemable noncontrolling interests issued | (5) | — | ||||||||||||||||
Cash paid |
|
| 0 |
|
|
| (626 | ) | Cash paid | (239) | — | ||||||||
Fair value of equity instruments issued as consideration to third parties(a) | Fair value of equity instruments issued as consideration to third parties(a) | 53 | — | ||||||||||||||||
Issuance of subsidiary common units | Issuance of subsidiary common units | (53) | — | ||||||||||||||||
Fair value of equity instruments consideration |
| $ | 0 |
|
| $ | 0 |
| Fair value of equity instruments consideration | $ | — | $ | — |
(a) | Includes Redeemable noncontrolling interests. |
| ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
|
|
•Overview of the Company’s Business—This section provides a general description of the Company’s businesses, as well as developments that occurred during the three and six months ended December 31, 2021 and 2020 that the Company believes are important in understanding its results of operations and financial condition or to disclose known trends. |
|
•Results of Operations—This section provides an analysis of the Company’s results of operations for the three and six months ended December 31, 2021 and 2020. This analysis is presented on both a consolidated and a segment basis. In addition, a brief description is provided of significant transactions and events that impact the comparability of the results being analyzed. |
|
•Liquidity and Capital Resources—This section provides an analysis of the Company’s cash flows for the six months ended December 31, 2021 and 2020, as well as a discussion of the Company’s outstanding debt and commitments, both firm and contingent, that existed as of December 31, 2021. Included in the discussion of outstanding debt is a discussion of the amount of financial capacity available to fund the Company’s future commitments and obligations, as well as a discussion of other financing arrangements. |
|
For the three months ended December 31, | For the six months ended December 31, | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2021 | 2020 | Change | % Change | 2021 | 2020 | Change | % Change | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(in millions, except %) | Better/(Worse) | Better/(Worse) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenues | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Affiliate fee | $ | 1,688 | $ | 1,518 | $ | 170 | 11 | % | $ | 3,355 | $ | 3,051 | $ | 304 | 10 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Advertising | 2,408 | 2,282 | 126 | 6 | % | 3,538 | 3,251 | 287 | 9 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other | 345 | 287 | 58 | 20 | % | 593 | 502 | 91 | 18 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total revenues | 4,441 | 4,087 | 354 | 9 | % | 7,486 | 6,804 | 682 | 10 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Operating expenses | (3,667) | (3,346) | (321) | (10) | % | (5,238) | (4,514) | (724) | (16) | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Selling, general and administrative | (468) | (442) | (26) | (6) | % | (883) | (830) | (53) | (6) | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Depreciation and amortization | (93) | (70) | (23) | (33) | % | (172) | (138) | (34) | (25) | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Impairment and restructuring charges | — | — | — | — | % | — | (35) | 35 | 100 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest expense, net | (97) | (97) | — | — | % | (194) | (195) | 1 | 1 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other, net | (211) | 172 | (383) | ** | (142) | 691 | (833) | ** | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(Loss) income before income tax benefit (expense) | (95) | 304 | (399) | ** | 857 | 1,783 | (926) | (52) | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income tax benefit (expense) | 22 | (74) | 96 | ** | (222) | (436) | 214 | 49 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net (loss) income | (73) | 230 | (303) | ** | 635 | 1,347 | (712) | (53) | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Less: Net income attributable to noncontrolling interests | (12) | (6) | (6) | (100) | % | (19) | (17) | (2) | (12) | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net (loss) income attributable to Fox Corporation stockholders | $ | (85) | $ | 224 | $ | (309) | ** | $ | 616 | $ | 1,330 | $ | (714) | (54) | % |
|
| |
** not meaningful |
|
|
|
|
Other Business Developments
The outbreak of the coronavirus disease 2019 (“COVID-19”) pandemic has resultedrelated under-delivery of college football games. The increase in widespreadadvertising revenue was
Pursuant to the merger agreement relating to the merger of Twenty-First Century Fox, Inc. (“21CF”) and The Walt Disney Company (“Disney”), the Company made a prepayment of approximately $700 million which represented the Company’s share of the estimated tax liabilities resulting from the anticipated divestitures by Disney of certain assets (the “Divestiture Tax”), principally the FOX Sports Regional Sports Networks (“RSNs”). During the first quarter of fiscal 2021, the Company and Disney reached an agreement to settle the majority of the prepaid Divestiture Tax and the Company received $462 million from Disney as reimbursement of the Company’s prepayment based upon the sales price of the RSNs. This reimbursement was recorded in
In 2019, the United States Court of Appeals for the Third Circuit decided Prometheus Radio Project v. FCC, which reinstated the Federal Communications Commission’s (“FCC”) newspaper/broadcast cross-ownership rule prohibiting common ownership of broadcast stations and daily newspapers in the same designated market area. The Company owns two television stations in the New York area and an attributable interest in The New York Post due to the Murdoch Family Trust’s ownership interests in both the Company and News Corporation. In April 2021, the Supreme Court reversed the Third Circuit in a unanimous decision. As a result, common ownership of broadcast stations and daily newspapers is no longer prohibited. For more information, see Part I. Item 1. “Business - Government Regulation” in the 2020 Form 10-K.
RESULTS OF OPERATIONS
Results of Operations—For the three and nine months ended March 31, 2021 versus the three and nine months ended March 31, 2020
The following table sets forth the Company’s operating results for the three and nine months ended March 31, 2021, as compared to the three and nine months ended March 31, 2020:
|
| For the three months ended March 31, |
| For the nine months ended March 31, | ||||||||||||||||||||||||||||||||||
|
| 2021 |
|
|
|
| 2020 |
|
| Change |
|
| % Change |
| 2021 |
|
| 2020 |
|
| Change |
|
| % Change | ||||||||||||||
(in millions, except %) |
|
|
|
|
|
|
|
|
|
|
| Better/(Worse) |
|
|
|
|
|
|
|
|
| Better/(Worse) | ||||||||||||||||
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Affiliate fee |
| $ | 1,719 |
|
|
|
| $ | 1,559 |
|
| $ | 160 |
|
|
| 10 |
| % |
|
| $ | 4,770 |
|
| $ | 4,389 |
|
| $ | 381 |
|
|
| 9 |
| % |
|
Advertising |
|
| 1,198 |
|
|
|
|
| 1,570 |
|
|
| (372 | ) |
|
| (24 | ) | % |
|
|
| 4,449 |
|
|
| 4,621 |
|
|
| (172 | ) |
|
| (4 | ) | % |
|
Other |
|
| 298 |
|
|
|
|
| 311 |
|
|
| (13 | ) |
|
| (4 | ) | % |
|
|
| 800 |
|
|
| 875 |
|
|
| (75 | ) |
|
| (9 | ) | % |
|
Total revenues |
|
| 3,215 |
|
|
|
|
| 3,440 |
|
|
| (225 | ) |
|
| (7 | ) | % |
|
|
| 10,019 |
|
|
| 9,885 |
|
|
| 134 |
|
|
| 1 |
| % |
|
Operating expenses |
|
| (1,885 | ) |
|
|
|
| (2,061 | ) |
|
| 176 |
|
|
| 9 |
| % |
|
|
| (6,399 | ) |
|
| (6,620 | ) |
|
| 221 |
|
|
| 3 |
| % |
|
Selling, general and administrative |
|
| (437 | ) |
|
|
|
| (464 | ) |
|
| 27 |
|
|
| 6 |
| % |
|
|
| (1,267 | ) |
|
| (1,247 | ) |
|
| (20 | ) |
|
| (2 | ) | % |
|
Depreciation and amortization |
|
| (78 | ) |
|
|
|
| (57 | ) |
|
| (21 | ) |
|
| (37 | ) | % |
|
|
| (216 | ) |
|
| (164 | ) |
|
| (52 | ) |
|
| (32 | ) | % |
|
Impairment and restructuring charges |
|
| - |
|
|
|
|
| - |
|
|
| - |
|
|
| - |
| % |
|
|
| (35 | ) |
|
| (9 | ) |
|
| (26 | ) |
| ** |
|
|
| |
Interest expense |
|
| (98 | ) |
|
|
|
| (89 | ) |
|
| (9 | ) |
|
| (10 | ) | % |
|
|
| (296 | ) |
|
| (269 | ) |
|
| (27 | ) |
|
| (10 | ) | % |
|
Interest income |
|
| - |
|
|
|
|
| 8 |
|
|
| (8 | ) |
|
| (100 | ) | % |
|
|
| 3 |
|
|
| 33 |
|
|
| (30 | ) |
|
| (91 | ) | % |
|
Other, net |
|
| 61 |
|
|
|
|
| (632 | ) |
|
| 693 |
|
| ** |
|
|
|
|
| 752 |
|
|
| (345 | ) |
|
| 1,097 |
|
| ** |
|
|
| ||
Income before income tax expense |
|
| 778 |
|
|
|
|
| 145 |
|
|
| 633 |
|
| ** |
|
|
|
|
| 2,561 |
|
|
| 1,264 |
|
|
| 1,297 |
|
| ** |
|
|
| ||
Income tax expense |
|
| (196 | ) |
|
|
|
| (55 | ) |
|
| (141 | ) |
| ** |
|
|
|
|
| (632 | ) |
|
| (347 | ) |
|
| (285 | ) |
|
| (82 | ) | % |
| |
Net income |
|
| 582 |
|
|
|
|
| 90 |
|
|
| 492 |
|
| ** |
|
|
|
|
| 1,929 |
|
|
| 917 |
|
|
| 1,012 |
|
| ** |
|
|
| ||
Less: Net income attributable to noncontrolling interests |
|
| (15 | ) |
|
|
|
| (12 | ) |
|
| (3 | ) |
|
| (25 | ) | % |
|
|
| (32 | ) |
|
| (40 | ) |
|
| 8 |
|
|
| 20 |
| % |
|
Net income attributable to Fox Corporation stockholders |
| $ | 567 |
|
|
|
| $ | 78 |
|
| $ | 489 |
|
| ** |
|
|
|
| $ | 1,897 |
|
| $ | 877 |
|
| $ | 1,020 |
|
| ** |
|
|
|
|
|
Overview
For the three months ended March 31, 2021 and 2020
The Company’s revenues decreased 7% for the three months ended March 31, 2021 as compared to the corresponding period of fiscal 2020 as higher affiliate fee revenue was more than offset by lower advertising and other revenues. The increase in affiliate fee revenue was primarily attributable to higher average rates due to rate increases from affiliate agreement renewals and contractual rate increases on existing affiliate agreements partially offset by the impact of a lower average number of subscribers. The decrease in advertising revenue was primarily due to the comparative effect of the broadcast of the National Football League’s (“NFL”) Super Bowl LIV in February 2020 (the “Super Bowl”) and lower ratings at the FOX Network due in part to COVID-19-impacted schedules in the current year partially offset by the impact of the consolidation of Tubi, which experienced record viewership and record advertising revenue, the rotating broadcast of one additional NFL Divisional playoff game and added broadcasts of NFL regular season games. The decrease in other revenues was primarily due to lower sports sublicensing revenue related to college sports as a result of COVID-19 partially offset byhigher content revenue at FOX Entertainment and Bento Box Entertainment, LLC (“Bento Box”).
Operating expenses decreased 9% for the three months ended March 31, 2021 as compared to the corresponding period of fiscal 2020 primarily due to lower sports programming rights amortization and production costs, including the absence of the broadcast of the Super Bowl in the current year and lower entertainment programming rights amortization due to fewer hours of original scripted programming as a result of COVID-19 partially offset by the impact of the consolidation of Tubi. Partially offsetting lower sports programming rights amortization and production costs were the rotating broadcast of one additional NFL Divisional playoff game, fewer National Association of Stock Car Auto Racing (“NASCAR”) races in the prior year period due to COVID-19 and added broadcasts of NFL regular season games.
Selling, general and administrative expenses decreased 6% for the three months ended March 31, 2021 as compared to the corresponding period of fiscal 2020 primarily due to lower marketing costs associated with the absence of the Super Bowl in the current year.
For the nine months ended March 31, 2021 and 2020
The Company’s revenues remained relatively flat for the nine months ended March 31, 2021 as compared to the corresponding period of fiscal 2020 as higher affiliate fee revenue was offset by lower advertising and other revenues. The increase in affiliate fee revenue was primarily attributable to higher average rates due to rate increases from affiliate agreement renewals and contractual rate increases on existing affiliate agreements, partially offset by the impact of a lower average number of subscribers and the estimated affiliate fee credits provided as a result of the under-delivery of live college football games discussed above. The decrease in advertising revenue was primarily due to the comparative effect of the broadcast of the Super Bowland lower ratings at the FOX Network due in part to COVID-19-impacted schedules in the current year partially offset by higher political advertising revenue related to the 2020 presidential and congressional elections, the impact of the consolidation of Tubi and the rotating broadcast of one additional NFL Divisional playoff game. The decrease in other revenues was primarily due to lower sports sublicensing revenue related to college sports as a result of COVID-19 and lower content licensing revenue at the FOX Network partially offset byhigher content revenue at FOX Entertainment and Bento Box and the impact of the consolidation of Credible in fiscal 2020.
Operating expenses decreased 3% for the nine months ended March 31, 2021 as compared to the corresponding period of fiscal 2020 primarily due to lower sports programming rights amortization and production costs, including the absence of the broadcast of the Super Bowl in the current year and the under-delivery of live college football games, and lower entertainment programming rights amortization due to fewer hours of original scripted programming as a result of COVID-19 partially offset by the impact of the consolidation of Tubi. Partially offsetting lower sports programming rights amortization and production costs were contractual rate increases for NFL, Major League Baseball (“MLB”) and college football content, the rotating broadcast of one additional NFL Divisional playoff game and higher volume of NASCAR races due to fewer races in the prior year period due to COVID-19.
Selling, general and administrative expenses increased 2% for the nine months ended March 31, 2021 as compared to the corresponding period of fiscal 2020 primarily due to the impact of acquisitions that occurred in fiscal 2020 (the “Fiscal 2020 Acquisitions”) (See Note 2—Acquisitions, Disposals and Other Transactions to the accompanying Financial Statements) and higher legal and marketing expenses partially offset by lower professional fees, lower bad debt expense and lower marketing costs associated with the absence of the Super Bowl in the current year.
Depreciation and amortization—Depreciation and amortization expense increased 37% and 32% for the three and nine months ended March 31, 2021, respectively, as compared to the corresponding periods of fiscal 2020, primarily due to assets placed into service as the Company transitions from service agreements entered into in connection with the Separation (as defined in Note 1—Description of Business and Basis of Presentation in the 2020 Form 10-K under the heading “The Distribution”) and the Fiscal 2020 Acquisitions.
Impairment and restructuring charges—Impairment and restructuring charges increased $26 million for the nine months ended March 31, 2021, as compared to the corresponding period of fiscal 2020, primarily due to higher severance costs principally at the Cable Network Programming segment (See Note 11—Additional Financial Information to the accompanying Financial Statements).
Interest expense—Interest expense increased 10% for the three and nine months ended March 31, 2021 as compared to the corresponding periods of fiscal 2020, primarily due to the issuance of $1.2 billion of senior notes in April 2020 (See Note 9—Borrowings in the 2020 Form 10-K under the heading “Public Debt – Senior Notes Issued” for additional information).
Interest income—Interest income decreased for the three and nine months ended March 31, 2021, as compared to the corresponding periods of fiscal 2020, primarily due to lower interest rates.
Other, net—See Note 11—Additional Financial Information to the accompanying Financial Statements under the heading “Other, net.”
Income tax expensebenefit (expense)—The Company’sCompany's tax provision and related effective tax rate of 25%23% for the three and nine months ended MarchDecember 31, 2021, was higher than the statutory rate of 21% primarily due to state taxes, offset by other permanent items. The Company's tax provision and related effective tax rate of 26% for the six months ended December 31, 2021, was higher than the statutory rate of 21% primarily due to state taxes and other permanent items.
—The Company’s tax provisionCompany recorded a net loss of $73 million and related effective tax ratenet income of 38% and 27%$635 million for the three and ninesix months ended March 31, 2020, respectively, were higher than the statutory rate of 21% primarily due to state taxes, a valuation allowance recorded against net capital losses and other permanent items.
Net income—Net income increased $492 million and $1.0 billion for the three and nine months ended MarchDecember 31, 2021, respectively, as compared to net income of $230 million and $1.3 billion for the correspondingthree and six months ended December 31, 2020, respectively. The decreases in the comparative periods of fiscal 2020,are primarily due to unrealized gains related to changesthe change in fair value of the Company’s investmentsinvestment in equity securities as compared to lossesFlutter Entertainment plc and, additionally for the six months ended December 31, 2021, the reimbursement from The Walt Disney Company ("Disney") of $462 million related to the Company’s investment in Roku, Inc. (“Roku”) which was sold in March 2020 partially offset by higher income tax expense. Contributing to the increase in Net income for the nine months ended March 31, 2021, as compared to the corresponding period of fiscal 2020, was the receiptsubstantial settlement of the $462 million reimbursement from Disney related toCompany’s prepayment of its share of the Divestiture Tax, which occurred during the six months ended December 31, 2020 (See Note 1—Description of Business and Basis of Presentation11—Additional Financial Information to the accompanying Financial Statements for additional information) and higher Segment EBITDA (as defined below) atunder the Cable Network Programming and Television segments.heading “Other, net”).
|
| For the three months ended March 31, |
| For the nine months ended March 31, | For the three months ended December 31, | For the six months ended December 31, | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
| 2021 |
|
| 2020 |
|
| Change |
|
| % Change |
| 2021 |
|
| 2020 |
|
| Change |
|
| % Change | 2021 | 2020 | Change | % Change | 2021 | 2020 | Change | % Change | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(in millions, except %) |
|
|
|
|
|
|
|
|
| Better/(Worse) |
|
|
|
|
|
|
|
|
| Better/(Worse) | (in millions, except %) | Better/(Worse) | Better/(Worse) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Revenues | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cable Network Programming |
| $ | 1,471 |
|
| $ | 1,467 |
|
| $ | 4 |
|
|
| - |
| % |
| $ | 4,284 |
|
| $ | 4,221 |
|
| $ | 63 |
|
|
| 1 |
| % |
| Cable Network Programming | $ | 1,638 | $ | 1,488 | $ | 150 | 10 | % | $ | 3,054 | $ | 2,813 | $ | 241 | 9 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Television |
|
| 1,695 |
|
|
| 1,926 |
|
|
| (231 | ) |
|
| (12 | ) | % |
|
| 5,601 |
|
|
| 5,548 |
|
|
| 53 |
|
|
| 1 |
| % |
| Television | 2,759 | 2,556 | 203 | 8 | % | 4,340 | 3,906 | 434 | 11 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other, Corporate and Eliminations |
|
| 49 |
|
|
| 47 |
|
|
| 2 |
|
|
| 4 |
| % |
|
| 134 |
|
|
| 116 |
|
|
| 18 |
|
|
| 16 |
| % |
| Other, Corporate and Eliminations | 44 | 43 | 1 | 2 | % | 92 | 85 | 7 | 8 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total revenues |
| $ | 3,215 |
|
| $ | 3,440 |
|
| $ | (225 | ) |
|
| (7 | ) | % |
| $ | 10,019 |
|
| $ | 9,885 |
|
| $ | 134 |
|
|
| 1 |
| % |
| Total revenues | $ | 4,441 | $ | 4,087 | $ | 354 | 9 | % | $ | 7,486 | $ | 6,804 | $ | 682 | 10 | % |
|
| For the three months ended March 31, |
| For the nine months ended March 31, | ||||||||||||||||||||||||||||||||
|
| 2021 |
|
| 2020 |
|
| Change |
|
| % Change |
| 2021 |
|
| 2020 |
|
| Change |
|
| % Change | ||||||||||||||
(in millions, except %) |
|
|
|
|
|
|
|
|
| Better/(Worse) |
|
|
|
|
|
|
|
|
| Better/(Worse) | ||||||||||||||||
Segment EBITDA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cable Network Programming |
| $ | 850 |
|
| $ | 792 |
|
| $ | 58 |
|
|
| 7 |
| % |
|
| $ | 2,202 |
|
| $ | 2,032 |
|
| $ | 170 |
|
|
| 8 |
| % |
|
Television |
|
| 135 |
|
|
| 224 |
|
|
| (89 | ) |
|
| (40) |
| % |
|
|
| 407 |
|
|
| 261 |
|
|
| 146 |
|
|
| 56 |
| % |
|
Other, Corporate and Eliminations |
|
| (86 | ) |
|
| (96 | ) |
|
| 10 |
|
|
| 10 |
| % |
|
|
| (239 | ) |
|
| (256 | ) |
|
| 17 |
|
|
| 7 |
| % |
|
Adjusted EBITDA(a) |
| $ | 899 |
|
| $ | 920 |
|
| $ | (21 | ) |
|
| (2 | ) | % |
|
| $ | 2,370 |
|
| $ | 2,037 |
|
| $ | 333 |
|
|
| 16 |
| % |
|
For the three months ended December 31, | For the six months ended December 31, | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2021 | 2020 | Change | % Change | 2021 | 2020 | Change | % Change | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(in millions, except %) | Better/(Worse) | Better/(Worse) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment EBITDA | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cable Network Programming | $ | 668 | $ | 571 | $ | 97 | 17 | % | $ | 1,442 | $ | 1,352 | $ | 90 | 7 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Television | (273) | (185) | (88) | (48) | % | 86 | 272 | (186) | (68) | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other, Corporate and Eliminations | (85) | (81) | (4) | (5) | % | (154) | (153) | (1) | (1) | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Adjusted EBITDA(a) | $ | 310 | $ | 305 | $ | 5 | 2 | % | $ | 1,374 | $ | 1,471 | $ | (97) | (7) | % |
| ||
(a) | For a discussion of Adjusted EBITDA and a reconciliation of Net income to Adjusted EBITDA, see “Non-GAAP Financial Measures” below. |
Cable Network Programming (43% (41% of the Company’srevenues forthe firstnine six months offiscal 20212022 and 2020)2021)
|
| For the three months ended March 31, |
| For the nine months ended March 31, | For the three months ended December 31, | For the six months ended December 31, | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
| 2021 |
|
| 2020 |
|
| Change |
|
| % Change |
| 2021 |
|
| 2020 |
|
| Change |
|
| % Change | 2021 | 2020 | Change | % Change | 2021 | 2020 | Change | % Change | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(in millions, except %) |
|
|
|
|
|
|
|
| Better/(Worse) |
|
|
|
|
|
|
|
| Better/(Worse) | (in millions, except %) | Better/(Worse) | Better/(Worse) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Revenues | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Affiliate fee |
| $ | 1,068 |
|
|
| $ | 1,006 |
|
| $ | 62 |
|
|
| 6 |
| % |
| $ | 2,969 |
|
|
| $ | 2,902 |
|
| $ | 67 |
|
|
| 2 |
| % |
| Affiliate fee | $ | 1,039 | $ | 928 | $ | 111 | 12 | % | $ | 2,065 | $ | 1,901 | $ | 164 | 9 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Advertising |
|
| 283 |
|
|
| 304 |
|
|
| (21 | ) |
|
| (7 | ) | % |
|
| 1,023 |
| 895 |
|
|
| 128 |
|
|
| 14 |
| % |
| Advertising | 454 | 441 | 13 | 3 | % | 765 | 740 | 25 | 3 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other |
|
| 120 |
|
|
|
| 157 |
|
|
| (37 | ) |
|
| (24 | ) | % |
|
| 292 |
|
|
|
| 424 |
|
|
| (132 | ) |
|
| (31 | ) | % |
| Other | 145 | 119 | 26 | 22 | % | 224 | 172 | 52 | 30 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total revenues |
|
| 1,471 |
|
| 1,467 |
|
|
| 4 |
|
|
| - |
| % |
|
| 4,284 |
|
| 4,221 |
|
|
| 63 |
|
|
| 1 |
| % |
| Total revenues | 1,638 | 1,488 | 150 | 10 | % | 3,054 | 2,813 | 241 | 9 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Operating expenses |
|
| (505 | ) |
| (554 | ) |
|
| 49 |
|
|
| 9 |
| % |
|
| (1,725 | ) |
| (1,866 | ) |
|
| 141 |
|
|
| 8 |
| % |
| Operating expenses | (837) | (786) | (51) | (6) | % | (1,360) | (1,220) | (140) | (11) | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Selling, general and administrative |
|
| (122 | ) |
| (126 | ) |
|
| 4 |
|
|
| 3 |
| % |
|
| (374 | ) |
| (342 | ) |
|
| (32 | ) |
|
| (9 | ) | % |
| Selling, general and administrative | (137) | (137) | — | — | % | (261) | (252) | (9) | (4) | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Amortization of cable distribution investments |
|
| 6 |
|
| 5 |
|
|
| 1 |
|
|
| 20 |
| % |
|
| 17 |
|
| 19 |
|
|
| (2 | ) |
|
| (11 | ) | % |
| Amortization of cable distribution investments | 4 | 6 | (2) | (33) | % | 9 | 11 | (2) | (18) | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment EBITDA |
| $ | 850 |
| $ | 792 |
|
| $ | 58 |
|
|
| 7 |
| % |
| $ | 2,202 |
| $ | 2,032 |
|
| $ | 170 |
|
|
| 8 |
| % |
| Segment EBITDA | $ | 668 | $ | 571 | $ | 97 | 17 | % | $ | 1,442 | $ | 1,352 | $ | 90 | 7 | % |
the divestiture of the Company's sports marketing businesses.
quarter, and higher FOX Nation costs.
partially offset by the impact of the divestiture of the Company's sports marketing businesses.
Television (56% 57% of the Company’srevenues forthe first nine six months offiscal 2022 and 2021, andrespectively)2020)
|
| For the three months ended March 31, |
| For the nine months ended March 31, | For the three months ended December 31, | For the six months ended December 31, | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
| 2021 |
|
| 2020 |
|
| Change |
|
| % Change |
| 2021 |
|
| 2020 |
|
| Change |
|
| % Change | 2021 | 2020 | Change | % Change | 2021 | 2020 | Change | % Change | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(in millions, except %) |
|
|
|
|
|
|
|
| Better/(Worse) |
|
|
|
|
|
|
|
| Better/(Worse) | (in millions, except %) | Better/(Worse) | Better/(Worse) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Revenues | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Advertising |
| $ | 915 |
|
|
| $ | 1,266 |
|
| $ | (351 | ) |
|
| (28 | ) | % |
| $ | 3,426 |
|
|
| $ | 3,726 |
|
| $ | (300 | ) |
|
| (8 | ) | % |
| Advertising | $ | 1,954 | $ | 1,841 | $ | 113 | 6 | % | $ | 2,773 | $ | 2,511 | $ | 262 | 10 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Affiliate fee |
|
| 651 |
| 553 |
|
|
| 98 |
|
|
| 18 |
| % |
|
| 1,801 |
| 1,487 |
|
|
| 314 |
|
|
| 21 |
| % |
| Affiliate fee | 649 | 590 | 59 | 10 | % | 1,290 | 1,150 | 140 | 12 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other |
|
| 129 |
|
|
|
| 107 |
|
|
| 22 |
|
|
| 21 |
| % |
|
| 374 |
|
|
|
| 335 |
|
|
| 39 |
|
|
| 12 |
| % |
| Other | 156 | 125 | 31 | 25 | % | 277 | 245 | 32 | 13 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total revenues |
|
| 1,695 |
|
| 1,926 |
|
|
| (231 | ) |
|
| (12 | ) | % |
|
| 5,601 |
|
| 5,548 |
|
|
| 53 |
|
|
| 1 |
| % |
| Total revenues | 2,759 | 2,556 | 203 | 8 | % | 4,340 | 3,906 | 434 | 11 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Operating expenses |
|
| (1,359 | ) |
| (1,486 | ) |
|
| 127 |
|
|
| 9 |
| % |
|
| (4,613 | ) |
| (4,713 | ) |
|
| 100 |
|
|
| 2 |
| % |
| Operating expenses | (2,809) | (2,540) | (269) | (11) | % | (3,835) | (3,254) | (581) | (18) | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Selling, general and administrative |
|
| (201 | ) |
|
| (216 | ) |
|
| 15 |
|
|
| 7 |
| % |
|
| (581 | ) |
|
| (574 | ) |
|
| (7 | ) |
|
| (1 | ) | % |
| Selling, general and administrative | (223) | (201) | (22) | (11) | % | (419) | (380) | (39) | (10) | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment EBITDA |
| $ | 135 |
| $ | 224 |
|
| $ | (89 | ) |
|
| (40) |
| % |
| $ | 407 |
| $ | 261 |
|
| $ | 146 |
|
|
| 56 |
| % |
| Segment EBITDA | $ | (273) | $ | (185) | $ | (88) | (48) | % | $ | 86 | $ | 272 | $ | (186) | (68) | % |
Entertainment.
Company's digital initiatives.
Television Segment EBITDA increased 56%decreased 68% for the ninesix months ended MarchDecember 31, 2021, as compared to the corresponding period of fiscal 20202021, as the revenue increases noted above were more than offset by higher expenses. Operating expenses increased primarily due to higher revenues and lower expenses. Operating expenses decreased primarily due to lower sports programming rights amortization and production costs primarily related to NFL, MLB and college football content including a higher number of live events as compared to the absence of the broadcast of the Super Bowl in the currentCOVID-19 impacted prior year period, increased digital investment at Tubi, and lowerhigher entertainment programming rights amortization and marketing costs due to fewermore hours of original scripted programming as a result of COVID-19 partially offset by the impact of the consolidation of Tubi. Partially offsetting the decrease in sports programming rights amortization and production costs were contractual rate increases for NFL, MLB and college football content, the rotating broadcast of one additional NFL Divisional playoff game and higher volume of NASCAR races duecompared to fewer races in the prior year period due toquarter, which was impacted by COVID-19. Selling, general and administrative expenses remained relatively flatincreased primarily due to higher technology costs related to the Fiscal 2020 Acquisitions offset by lower bad debt expense and lower marketing costs associated with the absence of the Super Bowl in the current year.
Company's digital initiatives.
|
| For the three months ended March 31, |
| For the nine months ended March 31, | For the three months ended December 31, | For the six months ended December 31, | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
| 2021 |
|
| 2020 |
|
| Change |
|
| % Change |
| 2021 |
|
| 2020 |
|
| Change |
|
| % Change | 2021 | 2020 | Change | % Change | 2021 | 2020 | Change | % Change | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(in millions, except %) |
|
|
|
|
|
|
|
|
| Better/(Worse) |
|
|
|
|
|
|
|
|
| Better/(Worse) | (in millions, except %) | Better/(Worse) | Better/(Worse) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenues |
| $ | 49 |
|
| $ | 47 |
|
| $ | 2 |
|
|
| 4 |
| % |
| $ | 134 |
|
| $ | 116 |
|
| $ | 18 |
|
|
| 16 |
| % |
| Revenues | $ | 44 | $ | 43 | $ | 1 | 2 | % | $ | 92 | $ | 85 | $ | 7 | 8 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Operating expenses |
|
| (21 | ) |
|
| (21 | ) |
|
| - |
|
|
| - |
| % |
|
| (61 | ) |
|
| (41 | ) |
|
| (20 | ) |
|
| (49 | ) | % |
| Operating expenses | (21) | (20) | (1) | (5) | % | (43) | (40) | (3) | (8) | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Selling, general and administrative |
|
| (114 | ) |
|
| (122 | ) |
|
| 8 |
|
|
| 7 |
| % |
|
| (312 | ) |
|
| (331 | ) |
|
| 19 |
|
|
| 6 |
| % |
| Selling, general and administrative | (108) | (104) | (4) | (4) | % | (203) | (198) | (5) | (3) | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment EBITDA |
| $ | (86 | ) |
| $ | (96 | ) |
| $ | 10 |
|
|
| 10 |
| % |
| $ | (239 | ) |
| $ | (256 | ) |
| $ | 17 |
|
|
| 7 |
| % |
| Segment EBITDA | $ | (85) | $ | (81) | $ | (4) | (5) | % | $ | (154) | $ | (153) | $ | (1) | (1) | % |
Other, Corporate and Eliminations Segment EBITDA increased 10% for the three months ended March 31, 2021 as compared to the corresponding period of fiscal 2020 primarily due to the revenue increases noted above and lower expenses. Selling, general and administrative expenses decreased primarily due to lower professional fees and employee costs.
For the nine months ended MarchDecember 31, 2021 and 2020
Revenues at include revenues generated by Credible and the Other, Corporate and Eliminations segment increased 16%operation of the FOX Studios lot for third parties. Operating expenses for the ninethree and six months ended MarchDecember 31, 2021 as compared toand 2020 include the corresponding periodcosts of fiscal 2020 primarily due to the impact of the consolidation of Credible in the second quarter of fiscal 2020 and growth at Credible partially offset by lower revenues from operating the FOX Studio Lot due to COVID-19.
Other, CorporateStudios lot for third parties and Eliminations Segment EBITDA increased 7% for the nine months ended March 31, 2021 as compared to the corresponding period of fiscal 2020 primarily due to the revenue increases noted above partially offset by higher expenses. Operatingadvertising and promotional expenses increased principally due to the impact of the consolidation ofat Credible. Selling, general and administrative expenses decreasedfor the three and six months ended December 31, 2021 and 2020 primarily duerelate to loweremployee costs and professional fees, the costs of operating the FOX Studios lot for third parties and employee costs.
advertising and promotional expenses at Credible.
Adjusted EBITDA is considered a non-GAAP financial 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 U.S. generally accepted accounting principles (“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. Adjusted EBITDA may not be comparable to similarly titled measures reported by other companies.
|
| For the three months ended March 31, |
|
| For the nine months ended March 31, |
| |||||||||||||||||||||||||||||||||||||||||||||
|
| 2021 |
|
| 2020 |
|
| 2021 |
|
| 2020 |
| For the three months ended December 31, | For the six months ended December 31, | |||||||||||||||||||||||||||||||||||||
|
| (in millions) |
| 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||||||||||||||||||||||||||
Net income |
| $ | 582 |
|
| $ | 90 |
|
| $ | 1,929 |
|
| $ | 917 |
| |||||||||||||||||||||||||||||||||||
(in millions) | |||||||||||||||||||||||||||||||||||||||||||||||||||
Net (loss) income | Net (loss) income | $ | (73) | $ | 230 | $ | 635 | $ | 1,347 | ||||||||||||||||||||||||||||||||||||||||||
Add |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Add | ||||||||||||||||||||||||||||||||||
Amortization of cable distribution investments |
|
| 6 |
|
|
| 5 |
|
|
| 17 |
|
|
| 19 |
| Amortization of cable distribution investments | 4 | 6 | 9 | 11 | ||||||||||||||||||||||||||||||
Depreciation and amortization |
|
| 78 |
|
|
| 57 |
|
|
| 216 |
|
|
| 164 |
| Depreciation and amortization | 93 | 70 | 172 | 138 | ||||||||||||||||||||||||||||||
Impairment and restructuring charges |
|
| - |
|
|
| - |
|
|
| 35 |
|
|
| 9 |
| Impairment and restructuring charges | — | — | — | 35 | ||||||||||||||||||||||||||||||
Interest expense |
|
| 98 |
|
|
| 89 |
|
|
| 296 |
|
|
| 269 |
| |||||||||||||||||||||||||||||||||||
Interest income |
|
| - |
|
|
| (8 | ) |
|
| (3 | ) |
|
| (33 | ) | |||||||||||||||||||||||||||||||||||
Interest expense, net | Interest expense, net | 97 | 97 | 194 | 195 | ||||||||||||||||||||||||||||||||||||||||||||||
Other, net |
|
| (61 | ) |
|
| 632 |
|
|
| (752 | ) |
|
| 345 |
| Other, net | 211 | (172) | 142 | (691) | ||||||||||||||||||||||||||||||
Income tax expense |
|
| 196 |
|
|
| 55 |
|
|
| 632 |
|
|
| 347 |
| |||||||||||||||||||||||||||||||||||
Income tax (benefit) expense | Income tax (benefit) expense | (22) | 74 | 222 | 436 | ||||||||||||||||||||||||||||||||||||||||||||||
Adjusted EBITDA |
| $ | 899 |
|
| $ | 920 |
|
| $ | 2,370 |
|
| $ | 2,037 |
| Adjusted EBITDA | $ | 310 | $ | 305 | $ | 1,374 | $ | 1,471 |
For the three months ended December 31, | For the six months ended December 31, | ||||||||||||||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||||||||||||||
(in millions) | |||||||||||||||||||||||||||||||||||
Revenues | $ | 4,441 | $ | 4,087 | $ | 7,486 | $ | 6,804 | |||||||||||||||||||||||||||
Operating expenses | (3,667) | (3,346) | (5,238) | (4,514) | |||||||||||||||||||||||||||||||
Selling, general and administrative | (468) | (442) | (883) | (830) | |||||||||||||||||||||||||||||||
Amortization of cable distribution investments | 4 | 6 | 9 | 11 | |||||||||||||||||||||||||||||||
Adjusted EBITDA | $ | 310 | $ | 305 | $ | 1,374 | $ | 1,471 |
|
| For the three months ended March 31, |
|
| For the nine months ended March 31, |
| ||||||||||
|
| 2021 |
|
| 2020 |
|
| 2021 |
|
| 2020 |
| ||||
|
| (in millions) |
| |||||||||||||
Revenues |
| $ | 3,215 |
|
| $ | 3,440 |
|
| $ | 10,019 |
|
| $ | 9,885 |
|
Operating expenses |
|
| (1,885 | ) |
|
| (2,061 | ) |
|
| (6,399 | ) |
|
| (6,620 | ) |
Selling, general and administrative |
|
| (437 | ) |
|
| (464 | ) |
|
| (1,267 | ) |
|
| (1,247 | ) |
Amortization of cable distribution investments |
|
| 6 |
|
|
| 5 |
|
|
| 17 |
|
|
| 19 |
|
Adjusted EBITDA |
| $ | 899 |
|
| $ | 920 |
|
| $ | 2,370 |
|
| $ | 2,037 |
|
The Company’s principal source of liquidity is internally generated funds which are highly dependent upon the continuation of affiliate agreements and the state of the advertising markets, the latter of which continues to be negatively impacted by the weak economic environment as a result of COVID-19. Depending on the duration and severity of the weak economic environment, it could lead to changes in consumer behavior, including increasing numbers of consumers canceling or foregoing subscriptions to MVPD services, that adversely affect the Company’s affiliate fee and advertising revenues. In addition, the Company’s business depends on the volume and popularity of the content it distributes, particularly sports content. Following the COVID-19 outbreak, sports events to which the Company has broadcast rights were cancelled or postponed and the production of certain entertainment content the Company distributes was suspended. Although most sports events and productions have resumed, there may be additional content disruptions in the future and, depending on their duration and severity, these disruptions could materially adversely affect the Company’s future advertising revenues and, over a longer period, its future affiliate fee revenues. The magnitude of the impact of the COVID-19 pandemic on the Company remains uncertain and subject to change and will depend on evolving factors beyond the Company’s control. These include the duration and extent of the pandemic, including increases or spikes in the number of cases, mutations or related strains of the virus and the success of vaccination efforts; the pace of economic recovery and the economic and operating conditions facing the Company and others in the pandemic’s aftermath; the effect of governmental actions; and potential changes in consumer behavior.
For the nine months ended March 31, |
| 2021 |
|
| 2020 |
| ||
Net cash provided by operating activities |
| $ | 1,866 |
|
| $ | 1,345 |
|
For the six months ended December 31, | 2021 | 2020 | ||||||||||||
Net cash (used in) provided by operating activities | $ | (656) | $ | 237 |
prior year impact of COVID-19 as well as lower Adjusted EBITDA.
For the nine months ended March 31, |
| 2021 |
|
| 2020 |
| ||||||||||||||||
For the six months ended December 31, | For the six months ended December 31, | 2021 | 2020 | |||||||||||||||||||
Net cash used in investing activities |
| $ | (329 | ) |
| $ | (397 | ) | Net cash used in investing activities | $ | (296) | $ | (329) |
Net
Note 2—Acquisitions, Disposals and Other Transactions to the accompanying Financial Statements) partially offset by the sale of the Company’s investment in Roku during the nine months ended March 31, 2020.
Net cash used in financing activities for the ninesix months ended MarchDecember 31, 2021 and 2020 was as follows (in millions):
For the nine months ended March 31, |
| 2021 |
|
| 2020 |
| ||||||||||||||||
For the six months ended December 31, | For the six months ended December 31, | 2021 | 2020 | |||||||||||||||||||
Net cash used in financing activities |
| $ | (417 | ) |
| $ | (986 | ) | Net cash used in financing activities | $ | (679) | $ | (51) |
Net
The
2, 2022.
Subsequent to December 31, 2021, $750 million of 3.666% senior notes due in January 2022 matured and were repaid in full (See Note 5—Borrowings to the accompanying Financial Statements).
|
|
| ||||||||||||
|
|
| ||||||||||||
Moody's | Baa2 | Stable | ||||||||||||
Standard & Poor's | BBB | Stable |
Caution Concerning Forward-Looking Statements
|
|
•the impact of COVID-19 and other widespread health emergencies or pandemics and measures to contain their spread and related weak macroeconomic conditions and increased market volatility; |
|
•the impact of COVID-19 specifically on the Company, including content disruptions that negatively affect the timing, volume or popularity of the Company’s programming, particularly sports programming, and potential non-cash impairment charges resulting from significant declines in the Company’s estimated revenues or the expected popularity of the Company’s programming; |
|
•evolving technologies and distribution platforms and changes in consumer behavior as consumers seek more control over when, where and how they consume content, and related impacts on advertisers and traditional MVPDs; |
|
•declines in advertising expenditures due to various factors such as the economic prospects of advertisers or the economy, major sports events and elections cycles, evolving technologies and distribution platforms and related changes in consumer behavior and shifts in advertisers’ expenditures, the evolving market for AVOD advertising campaigns, and audience measurement methodologies’ ability to accurately reflect actual viewership levels; |
|
•further declines in the number of subscribers to traditional MVPD services; |
|
•the failure to enter into or renew on favorable terms, or at all, affiliation or carriage agreements or arrangements through which the Company makes its content available for viewing through online video platforms; |
|
•the highly competitive nature of the industry in which the Company’s businesses operate; |
|
•the popularity of the Company’s content, including special sports events; and the continued popularity of the sports franchises, leagues and teams for which the Company has acquired programming rights; |
|
•the Company’s ability to renew programming rights, particularly sports programming rights, on sufficiently favorable terms, or at all; |
|
•damage to the Company’s brands or reputation; |
|
•the inability to realize the anticipated benefits of the Company’s strategic investments and acquisitions; |
|
•the loss of key personnel; |
|
•labor disputes, including labor disputes involving professional sports leagues whose games or events the Company has the right to broadcast; |
|
•lower than expected valuations associated with one of the Company’s reporting units, indefinite-lived intangible assets, investments or long-lived assets; |
|
•a degradation, failure or misuse of the Company’s network and information systems and other technology relied on by the Company that causes a disruption of services or improper disclosure of personal data or other confidential information; |
|
•the failure to comply with laws, regulations, rules, industry standards or contractual obligations relating to privacy and personal data protection; |
|
•changes in tax, federal communications or other laws, regulations, practices or the interpretations thereof (including changes in legislation currently being considered); |
|
•the impact of any investigations or fines from governmental authorities, including Federal Communications Commission (“FCC”) rules and policies and FCC decisions regarding revocation, renewal or grant of station licenses, waivers and other matters; |
|
•the failure or destruction of satellites or transmitter facilities the Company depends on to distribute its programming; |
|
|
|
•unfavorable litigation or investigation results that require the Company to pay significant amounts or lead to onerous operating procedures; |
|
•changes in GAAP or other applicable accounting standards and policies; |
|
•the Company’s ability to achieve the benefits it expects to achieve as a standalone, publicly traded company; |
|
• | the Company’s ability to secure additional capital on acceptable terms; |
|
|
•the other risks and uncertainties detailed in Part I., Item 1A. “Risk Factors” in the 2021 Form 10-K and Part II., Item 1A. “Risk Factors” in the Q1 2022 Form 10-Q. |
|
| ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
| ITEM 4. CONTROLS AND PROCEDURES |
(a)Disclosure Controls and Procedures |
|
(b) | Changes |
During the third quarter of fiscal 2021, the Company implemented a new advertising sales planning, trafficking and billing system for its sports and entertainment businesses to replace a system that was subject to a Twenty-First Century Fox, Inc. transition services agreement. As a result, the Company has implemented updates and changes to its current processes and related control activities.
Other than as stated in the previous paragraph, thereInternal Control over Financial Reporting
PART II
| ITEM 1. LEGAL PROCEEDINGS |
| ITEM 1A. RISK FACTORS |
| ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS |
|
| Total number of shares purchased(a) |
|
| Average price paid per share(b) |
|
| Approximate dollar value of shares that may yet be purchased under the program(b)(c) |
| ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| (in millions) |
| Total number of shares purchased(a) | Average price paid per share(b) | Approximate dollar value of shares that may yet be purchased under the program(b)(c) | |||||||||||||||
January 1, 2021 – January 31, 2021 |
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
(in millions) | |||||||||||||||||||||||||||||
October 1, 2021 – October 31, 2021 | October 1, 2021 – October 31, 2021 | ||||||||||||||||||||||||||||
Class A common stock |
|
| 707,531 |
|
| $ | 30.77 |
|
|
|
|
| Class A common stock | 835,963 | $ | 41.87 | |||||||||||||
Class B common stock |
|
| 310,602 |
|
|
| 30.09 |
|
|
|
|
| Class B common stock | 386,339 | 38.83 | ||||||||||||||
February 1, 2021 – February 28, 2021 |
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
November 1, 2021 – November 30, 2021 | November 1, 2021 – November 30, 2021 | ||||||||||||||||||||||||||||
Class A common stock |
|
| 4,019,798 |
|
|
| 32.85 |
|
|
|
|
| Class A common stock | 1,378,298 | 38.92 | ||||||||||||||
Class B common stock |
|
| 1,099,719 |
|
|
| 31.70 |
|
|
|
|
| Class B common stock | 629,544 | 36.25 | ||||||||||||||
March 1, 2021 – March 31, 2021 |
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
December 1, 2021 – December 31, 2021 | December 1, 2021 – December 31, 2021 | ||||||||||||||||||||||||||||
Class A common stock |
|
| 1,803,783 |
|
|
| 39.25 |
|
|
|
|
| Class A common stock | 2,307,289 | 36.44 | ||||||||||||||
Class B common stock |
|
| 998,116 |
|
|
| 37.36 |
|
|
|
|
| Class B common stock | 1,081,361 | 33.91 | ||||||||||||||
Total |
|
|
|
|
|
|
|
|
|
|
|
| Total | ||||||||||||||||
Class A common stock |
|
| 6,531,112 |
|
|
| 34.39 |
|
|
|
|
| Class A common stock | 4,521,550 | 38.20 | ||||||||||||||
Class B common stock |
|
| 2,408,437 |
|
|
| 33.84 |
|
|
|
|
| Class B common stock | 2,097,244 | 35.52 | ||||||||||||||
|
|
| 8,939,549 |
|
|
|
|
|
| $ | 675 |
| 6,618,794 | $ | 1,902 |
| ||
(a) | The Company has not made any purchases of Common Stock other than in connection with the publicly announced stock repurchase program described below. |
| |||||
(b) | These amounts exclude any fees, commissions or other costs associated with the share repurchases. |
|
| ||||
(c) | The Company's Board of Directors |
| ITEM 3. DEFAULTS UPON SENIOR SECURITIES |
| ITEM 4. MINE SAFETY DISCLOSURES |
| ITEM 5. OTHER INFORMATION |
|
|
|
|
| ||||||||
10.1 | ||||||||
| ||||||||
31.1 | ||||||||
31.2 | ||||||||
32.1 | ||||||||
101 | The following financial information from the Company’s Quarterly Report on Form 10-Q for the quarter ended | |||||||
104 | Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101). |
|
|
|
|
| |||||||||||
Fox Corporation | |||||||||||
By: | /s/ Steven Tomsic | ||||||||||
Steven Tomsic | |||||||||||
Chief Financial Officer | |||||||||||
Date: February 9, 2022 |
Date: May 5, 2021
36