UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)


x			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
			For the quarterly period ended ~~March 31,~~September 30, 2023


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________ to _________

Commission File Number 001-38776

FOX CORPORATION

(Exact name of registrant as specified in its charter)


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 offices and Zip Code)

Registrant’s telephone number, including area code (212) 852-7000

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbols	Name of each exchange on which registered
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

Indicate by check mark whether the ~~registrant:~~registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No x

As of ~~May 5,~~October 31, 2023, ~~269,056,516~~247,226,541 shares of Class A Common Stock, par value $0.01 per share, and 235,581,025 shares of Class B Common Stock, par value $0.01 per share, were outstanding.

FOX CORPORATION

FORM 10-Q

TABLE OF CONTENTS


			Page
Part I. Financial Information
	Item 1.	Financial Statements
		Unaudited Consolidated Statements of Operations for the three ~~and~~ ~~nine~~months ended ~~March~~ ~~31, 202~~3 September 30, 2023 and 20 2 22022	1
		Unaudited Consolidated Statements of Comprehensive ~~(Loss)~~ Income for the three ~~and nine~~ months ended ~~March 31,~~September 30, 2023 and 2022	2
		Consolidated Balance Sheets as of ~~March~~ ~~31, 202~~3 September 30, 2023 (unaudited) and June 30, ~~2022~~2023 (audited)	3
		Unaudited Consolidated Statements of Cash Flows for the ~~nine~~three months ended ~~March~~ ~~31, 202~~3 September 30, 2023 and ~~202~~22022	4
		Unaudited Consolidated Statements of Equity for the three ~~and~~ ~~nine~~ months ended ~~March~~ ~~31,~~ ~~202~~3 September 30, 2023 and 20 2 22022	5
		Notes to the Unaudited Consolidated Financial Statements	6
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2018
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	3027
	Item 4.	Controls and Procedures	3127
Part II. Other Information
	Item 1.	Legal Proceedings	3228
	Item 1A.	Risk Factors	3228
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	3229
	Item 3.	Defaults Upon Senior Securities	3330
	Item 4.	Mine Safety Disclosures	3330
	Item 5.	Other Information	3330
	Item 6.	Exhibits	3330
	Signature		3431

FOX CORPORATION

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)


		For the three months ended March 31,				For the nine months ended March 31,					For the three months ended September 30,
		2023		2022		2023		2022			2023		2022
Revenues	Revenues	$	4,084	$	3,455	$	11,881	$	10,941	Revenues	$	3,207	$	3,192
Operating expenses	Operating expenses	(2,727)		(2,164)		(7,911)		(7,402)		Operating expenses	(1,862)		(1,656)
Selling, general and administrative	Selling, general and administrative	(528)		(485)		(1,526)		(1,368)		Selling, general and administrative	(480)		(448)
Depreciation and amortization	Depreciation and amortization	(106)		(92)		(308)		(264)		Depreciation and amortization	(96)		(99)
Interest expense, net	Interest expense, net	(55)		(91)		(183)		(285)		Interest expense, net	(42)		(68)
Other, net	Other, net	(719)		(233)		(722)		(375)		Other, net	(166)		(76)
(Loss) income before income tax benefit (expense)		(51)		390		1,231		1,247
Income tax benefit (expense)		1		(100)		(347)		(322)
Net (loss) income		(50)		290		884		925
Income before income tax expense										Income before income tax expense	561		845
Income tax expense										Income tax expense	(146)		(232)
Net income										Net income	415		613
Less: Net income attributable to noncontrolling interests	Less: Net income attributable to noncontrolling interests	(4)		(7)		(20)		(26)		Less: Net income attributable to noncontrolling interests	(8)		(8)
Net (loss) income attributable to Fox Corporation stockholders		$	(54)	$	283	$	864	$	899
Net income attributable to Fox Corporation stockholders										Net income attributable to Fox Corporation stockholders	$	407	$	605

(LOSS) EARNINGS PER SHARE DATA
EARNINGS PER SHARE DATA										EARNINGS PER SHARE DATA

Weighted average shares:	Weighted average shares:									Weighted average shares:
Basic	Basic	521		563		537		569		Basic	492		550
Diluted	Diluted	521		567		539		573		Diluted	494		552

Net (loss) income attributable to Fox Corporation stockholders per share:
Net income attributable to Fox Corporation stockholders per share:										Net income attributable to Fox Corporation stockholders per share:
Basic	Basic	$	(0.10)	$	0.50	$	1.61	$	1.58	Basic	$	0.83	$	1.10
Diluted	Diluted	$	(0.10)	$	0.50	$	1.60	$	1.57	Diluted	$	0.82	$	1.10

The accompanying notes are an integral part of these Unaudited Consolidated Financial Statements.

FOX CORPORATION

UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE ~~(LOSS)~~ INCOME

(IN MILLIONS)

For the three months ended March 31, For the nine months ended March 31,
2023 2022 2023 2022
Net (loss) income $ (50) $ 290 $ 884 $ 925
Other comprehensive income, net of tax:
Benefit plan adjustments and other 6 3 13 17
Other comprehensive income, net of tax 6 3 13 17
Comprehensive (loss) income (44) 293 897 942
Less: Net income attributable to noncontrolling interests(a)
(4) (7) (20) (26)
Comprehensive (loss) income attributable to Fox Corporation stockholders $ (48) $ 286 $ 877 $ 916


	For the three months ended September 30,
	2023		2022
Net income	$	415	$	613
Other comprehensive loss, net of tax:
Benefit plan adjustments and other	(2)		(2)
Other comprehensive loss, net of tax	(2)		(2)
Comprehensive income	413		611
Less: Net income attributable to noncontrolling interests(a)	(8)		(8)
Comprehensive income attributable to Fox Corporation stockholders	$	405	$	603


(a)			Net income attributable to noncontrolling interests includes ~~$(4) million~~nil and $(5) million for the three months ended ~~March 31, 2023 and 2022, respectively, and $(14) million and $(9) million for the nine months ended March 31,~~September 30, 2023 and 2022, respectively, relating to redeemable noncontrolling interests.

The accompanying notes are an integral part of these Unaudited Consolidated Financial Statements.

FOX CORPORATION

CONSOLIDATED BALANCE SHEETS

(IN MILLIONS, EXCEPT SHARE AND PER SHARE AMOUNTS)


		As of March 31, 2023		As of June 30, 2022			As of September 30, 2023		As of June 30, 2023
		(unaudited)		(audited)			(unaudited)		(audited)
ASSETS	ASSETS					ASSETS
Current assets	Current assets					Current assets
Cash and cash equivalents	Cash and cash equivalents	$	4,146	$	5,200	Cash and cash equivalents	$	3,829	$	4,272
Receivables, net	Receivables, net	2,741		2,128		Receivables, net	2,420		2,177
Inventories, net	Inventories, net	487		791		Inventories, net	751		543
Other	Other	349		162		Other	239		265
Total current assets	Total current assets	7,723		8,281		Total current assets	7,239		7,257
Non-current assets	Non-current assets					Non-current assets
Property, plant and equipment, net	Property, plant and equipment, net	1,675		1,682		Property, plant and equipment, net	1,683		1,708
Intangible assets, net	Intangible assets, net	3,097		3,157		Intangible assets, net	3,072		3,084
Goodwill	Goodwill	3,557		3,554		Goodwill	3,557		3,559
Deferred tax assets	Deferred tax assets	3,199		3,440		Deferred tax assets	3,042		3,090
Other non-current assets	Other non-current assets	3,145		2,071		Other non-current assets	3,056		3,168
Total assets	Total assets	$	22,396	$	22,185	Total assets	$	21,649	$	21,866
LIABILITIES AND EQUITY	LIABILITIES AND EQUITY					LIABILITIES AND EQUITY
Current liabilities	Current liabilities					Current liabilities
Borrowings	Borrowings	$	1,249	$	—	Borrowings	$	1,250	$	1,249
Accounts payable, accrued expenses and other current liabilities	Accounts payable, accrued expenses and other current liabilities	3,153		2,296		Accounts payable, accrued expenses and other current liabilities	2,339		2,514
Total current liabilities	Total current liabilities	4,402		2,296		Total current liabilities	3,589		3,763
Non-current liabilities	Non-current liabilities					Non-current liabilities
Borrowings	Borrowings	5,961		7,206		Borrowings	5,962		5,961
Other liabilities	Other liabilities	1,578		1,120		Other liabilities	1,419		1,484
Redeemable noncontrolling interests	Redeemable noncontrolling interests	200		188		Redeemable noncontrolling interests	228		213
Commitments and contingencies	Commitments and contingencies					Commitments and contingencies
Equity	Equity					Equity
Class A Common Stock(a)	Class A Common Stock(a)	3		3		Class A Common Stock(a)	3		3
Class B Common Stock(b)	Class B Common Stock(b)	2		3		Class B Common Stock(b)	2		2
Additional paid-in capital	Additional paid-in capital	8,361		9,098		Additional paid-in capital	7,991		8,253
Retained earnings	Retained earnings	2,032		2,461		Retained earnings	2,539		2,269
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(213)		(226)		Accumulated other comprehensive loss	(151)		(149)
Total Fox Corporation stockholders’ equity	Total Fox Corporation stockholders’ equity	10,185		11,339		Total Fox Corporation stockholders’ equity	10,384		10,378
Noncontrolling interests	Noncontrolling interests	70		36		Noncontrolling interests	67		67
Total equity	Total equity	10,255		11,375		Total equity	10,451		10,445
Total liabilities and equity	Total liabilities and equity	$	22,396	$	22,185	Total liabilities and equity	$	21,649	$	21,866


(a)			Class A Common Stock, $0.01 par value per share, 2,000,000,000 shares authorized, ~~270,539,087~~248,778,737 shares and ~~307,496,876~~262,899,364 shares issued and outstanding at par as of ~~March 31,~~September 30, 2023 and June 30, ~~2022,~~2023, respectively.


(b)			Class B Common Stock, $0.01 par value per share, 1,000,000,000 shares authorized, 235,581,025 shares and ~~243,122,595~~235,581,025 shares issued and outstanding at par as of ~~March 31,~~September 30, 2023 and June 30, ~~2022,~~2023, respectively.

The accompanying notes are an integral part of these Unaudited Consolidated Financial Statements.

FOX CORPORATION

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

(IN MILLIONS)


		For the nine months ended March 31,					For the three months ended September 30,
		2023		2022			2023		2022
OPERATING ACTIVITIES	OPERATING ACTIVITIES					OPERATING ACTIVITIES
Net income	Net income	$	884	$	925	Net income	$	415	$	613
Adjustments to reconcile net income to cash provided by operating activities	Adjustments to reconcile net income to cash provided by operating activities					Adjustments to reconcile net income to cash provided by operating activities
Depreciation and amortization	Depreciation and amortization	308		264		Depreciation and amortization	96		99
Amortization of cable distribution investments	Amortization of cable distribution investments	12		14		Amortization of cable distribution investments	4		4
Equity-based compensation	Equity-based compensation	55		75		Equity-based compensation	24		7
Other, net	Other, net	722		375		Other, net	166		76
Deferred income taxes	Deferred income taxes	234		195		Deferred income taxes	47		104
Change in operating assets and liabilities, net of acquisitions and dispositions	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	Receivables and other assets	(692)		(309)		Receivables and other assets	(284)		(260)
Inventories net of programming payable	Inventories net of programming payable	222		(156)		Inventories net of programming payable	(253)		(333)
Accounts payable and accrued expenses	Accounts payable and accrued expenses	(200)		(205)		Accounts payable and accrued expenses	(187)		(127)
Other changes, net	Other changes, net	(238)		(227)		Other changes, net	(27)		87
Net cash provided by operating activities	Net cash provided by operating activities	1,307		951		Net cash provided by operating activities	1		270
INVESTING ACTIVITIES	INVESTING ACTIVITIES					INVESTING ACTIVITIES
Property, plant and equipment	Property, plant and equipment	(237)		(191)		Property, plant and equipment	(71)		(74)
Acquisitions, net of cash acquired		—		(243)
Proceeds from dispositions, net		—		82
Purchase of investments	Purchase of investments	(55)		(28)		Purchase of investments	—		(31)
Other investing activities, net	Other investing activities, net	(26)		(6)		Other investing activities, net	13		(13)
Net cash used in investing activities	Net cash used in investing activities	(318)		(386)		Net cash used in investing activities	(58)		(118)
FINANCING ACTIVITIES	FINANCING ACTIVITIES					FINANCING ACTIVITIES
Repayment of borrowings		—		(750)
Repurchase of shares	Repurchase of shares	(1,750)		(748)		Repurchase of shares	(250)		(250)
Dividends paid and distributions	Dividends paid and distributions	(291)		(295)		Dividends paid and distributions	(135)		(147)
Sale of subsidiary noncontrolling interest	Sale of subsidiary noncontrolling interest	25		—		Sale of subsidiary noncontrolling interest	—		25
Other financing activities, net	Other financing activities, net	(27)		(24)		Other financing activities, net	(1)		(30)
Net cash used in financing activities	Net cash used in financing activities	(2,043)		(1,817)		Net cash used in financing activities	(386)		(402)
Net decrease in cash and cash equivalents	Net decrease in cash and cash equivalents	(1,054)		(1,252)		Net decrease in cash and cash equivalents	(443)		(250)
Cash and cash equivalents, beginning of year	Cash and cash equivalents, beginning of year	5,200		5,886		Cash and cash equivalents, beginning of year	4,272		5,200
Cash and cash equivalents, end of period	Cash and cash equivalents, end of period	$	4,146	$	4,634	Cash and cash equivalents, end of period	$	3,829	$	4,950

The accompanying notes are an integral part of these Unaudited Consolidated Financial Statements.

FOX CORPORATION

UNAUDITED CONSOLIDATED STATEMENTS OF EQUITY

(IN MILLIONS)


		Class A			Class B			Additional Paid-in Capital				Retained Earnings		Accumulated Other Comprehensive Loss					Total Fox Corporation Stockholders’ Equity			Noncontrolling Interests(a)					Total Equity				Class A								Class B			Additional Paid-in Capital			Retained Earnings			Accumulated Other Comprehensive Loss			Total Fox Corporation Stockholders’ Equity			Noncontrolling Interests(a)			Total Equity
		Common Stock			Common Stock													Common Stock												Common Stock
		Shares	Amount		Shares	Amount												Shares							Amount							Shares				Amount
Balance, December 31, 2022		298	$	3	238	$	2			$	8,836					$	2,985							$	(219)				$	11,607			$	69			$	11,676
Net (loss) income		—	—		—	—				—						(54)					—					(54)					8				(46)
Other comprehensive income		—	—		—	—		—				—		6					6			—					6

Balance, June 30, 2023																														Balance, June 30, 2023	263				$	3			235	$	2		$	8,253		$	2,269		$	(149)		$	10,378		$	67		$	10,445
Net income																														Net income	—				—				—	—		—			407			—			407			8			415
Other comprehensive loss																														Other comprehensive loss	—				—				—	—		—			—			(2)			(2)			—			(2)
Dividends	Dividends	—	—		—	—		—				(128)		—					(128)			—					(128)			Dividends	—				—				—	—		—			(127)			—			(127)			—			(127)
Shares repurchased	Shares repurchased	(27)	—		(3)	—		(502)				(761)		—					(1,263)			—					(1,263)			Shares repurchased	(15)				—				—	—		(258)			6			—			(252)			—			(252)
Other	Other	(1)	—		1	—		27				(10)		—					17			(7)					10			Other	1				—				—	—		(4)			(16)			—			(20)			(8)			(28)
Balance, March 31, 2023		270	$	3	236	$	2	$	8,361			$	2,032	$	(213)				$	10,185		$	70				$	10,255
Balance, December 31, 2021		317	$	3	248	$	3	$	9,265			$	2,308	$	(304)				$	11,275		$	15				$	11,290
Balance, September 30, 2023																														Balance, September 30, 2023	249				$	3			235	$	2	$	7,991		$	2,539		$	(151)		$	10,384		$	67		$	10,451
Balance, June 30, 2022																														Balance, June 30, 2022	308				$	3			243	$	3	$	9,098		$	2,461		$	(226)		$	11,339		$	36		$	11,375
Net income	Net income	—	—		—	—		—				283		—					283			12					295			Net income	—				—				—	—		—			605			—			605			13			618
Other comprehensive income		—	—		—	—		—				—		3					3			—					3
Other comprehensive loss																														Other comprehensive loss	—				—				—	—		—			—			(2)			(2)			—			(2)
Dividends	Dividends	—	—		—	—		—				(135)		—					(135)			—					(135)			Dividends	—				—				—	—		—			(137)			—			(137)			—			(137)
Shares repurchased	Shares repurchased	(4)	—		(2)	—		(104)				(147)		—					(251)			—					(251)			Shares repurchased	(5)				—				(3)	—		(124)			(126)			—			(250)			—			(250)
Other	Other	—	—		—	—		34				(9)		—					25			(9)					16			Other	—				—				1	(1)		(25)			(8)			—			(34)			15			(19)
Balance, March 31, 2022		313	$	3	246	$	3	$	9,195			$	2,300	$	(301)				$	11,200		$	18				$	11,218
Balance, June 30, 2022		308	$	3	243	$	3	$	9,098			$	2,461	$	(226)				$	11,339		$	36				$	11,375
Net income		—	—		—	—		—				864		—					864			34					898
Other comprehensive income		—	—		—	—		—				—		13					13			—					13
Dividends		—	—		—	—		—				(265)		—					(265)			—					(265)
Shares repurchased		(38)	—		(8)	—		(763)				(1,000)		—					(1,763)			—					(1,763)
Other		—	—		1	(1)		26				(28)		—					(3)			—					(3)
Balance, March 31, 2023		270	$	3	236	$	2	$	8,361			$	2,032	$	(213)				$	10,185		$	70				$	10,255
Balance, June 30, 2021		324	$	3	252	$	3	$	9,453			$	1,982	$	(318)				$	11,123		$	2				$	11,125
Net income		—	—		—	—		—				899		—					899			35					934
Other comprehensive income		—	—		—	—		—				—		17					17			—					17
Dividends		—	—		—	—		—				(273)		—					(273)			—					(273)
Shares repurchased		(14)	—		(6)	—		(326)				(422)		—					(748)			—					(748)
Other		3	—		—	—		68				114		—					182			(19)					163
Balance, March 31, 2022		313	$	3	246	$	3	$	9,195			$	2,300	$	(301)				$	11,200		$	18				$	11,218
Balance, September 30, 2022																														Balance, September 30, 2022	303				$	3			241	$	2	$	8,949		$	2,795		$	(228)		$	11,521		$	64		$	11,585


(a)			Excludes Redeemable noncontrolling interests which are reflected in temporary equity (See Note 4—Fair Value under the heading “Redeemable Noncontrolling Interests”).

The accompanying notes are an integral part of these Unaudited Consolidated Financial Statements.

FOX CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

Fox Corporation ~~a Delaware corporation~~ (“FOX” or the “Company”), is a news, sports and entertainment company, which manages and reports its businesses in the following segments: Cable Network Programming, Television and Other, Corporate and Eliminations.

On October 14, 2022, the Company announced that its Board of Directors (the “Board”) had formed a special committee composed of independent members of the Board (the “Special Committee”) to begin exploring a potential combination with News Corporation. On January 24, 2023, the Company announced that the Board had received a letter from K. Rupert Murdoch withdrawing the proposal to explore the potential combination and, as a result of this action, the Special Committee was dissolved.

The accompanying Unaudited Consolidated Financial Statements of FOX have been prepared in accordance with ~~United States (“~~U.S.”) generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. In the opinion of management, all adjustments consisting only of normal recurring adjustments necessary for a fair presentation have been reflected in these Unaudited Consolidated Financial Statements. Operating results for the interim periods presented are not necessarily indicative of the results that may be expected for the fiscal year ending June 30, ~~2023.~~2024.

The preparation of the Company’s Unaudited Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts that are reported in the Unaudited Consolidated Financial Statements and accompanying disclosures. Although these estimates are based on management’s best knowledge of current events and actions that the Company may undertake in the future, actual results may differ from those estimates.

These interim Unaudited Consolidated Financial Statements and notes thereto should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, ~~2022~~2023 as filed with the Securities and Exchange Commission on August ~~12, 2022~~11, 2023 (the ~~“2022~~“2023 Form 10-K”).

All significant intercompany transactions and accounts within the Company’s consolidated businesses have been eliminated. Investments in and 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%. 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. All gains and losses on investments in equity securities are recognized in the Unaudited Consolidated Statements of Operations.

The Company’s fiscal year ends on June 30 (“fiscal”) of each year. Certain fiscal ~~2022~~2023 amounts have been reclassified to conform to the fiscal ~~2023~~2024 presentation.

The unaudited and audited consolidated financial statements are referred to as the “Financial Statements” herein. The unaudited consolidated statements of operations are referred to as the “Statements of Operations” herein. The unaudited and audited consolidated balance sheets are referred to as the “Balance Sheets” herein.

~~Recently Adopted, Recently Issued Accounting Guidance and Other~~

~~Inflation Reduction Act~~

On August 16, 2022, the U.S. government enacted the Inflation Reduction Act which, among other changes, imposes a 15% corporate alternative minimum tax (“CAMT”) and a 1% excise tax on stock repurchases. Once subject to the CAMT, a taxpayer will compute both its CAMT liability and its regular federal

~~FOX CORPORATION~~

~~NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS~~

tax liability and pay the higher of the two. To the extent that the CAMT liability exceeds the regular federal tax liability, a taxpayer will receive a credit (“CAMT credit”) which can be used against its regular federal tax liability in the future when the taxpayer is no longer subject to the CAMT. The CAMT credit does not expire. The CAMT is effective for tax years beginning after December 31, 2022, which means it will be applicable to the Company starting in fiscal 2024. The excise tax on stock repurchases applies to stock repurchases occurring after December 31, 2022.

The Company continues to evaluate the impact the CAMT will have on its financial statements but expects that, when applicable, the Company will be subject to the CAMT. The CAMT would impact the timing of the cash tax benefit the Company receives from the amortization of the additional tax basis received as a result of the Transaction Tax (as defined in Note 1—Description of Business and Basis of Presentation in the 2022 Form 10-K). This change in timing would result in an increase to its annual cash tax liability which could be material. However, as noted above, if the Company pays CAMT it will receive a CAMT credit that can be carried forward indefinitely and applied against its regular federal tax liability in future years. The Company has been subject to the excise tax on stock repurchases occurring after December 31, 2022, but the impact to the financial statements is not material.

NOTE 2. ACQUISITIONS, DISPOSALS AND OTHER TRANSACTIONS

The Company’s acquisitions support the Company’s strategy to strengthen its core brands, grow its digital businesses and selectively enhance production capabilities for its digital and linear platforms. ~~There were no acquisitions during~~During the three ~~and nine~~ months ended ~~March 31, 2023. During the nine months ended March 31,~~September 30, 2023 and 2022, the Company made acquisitions, primarily consisting of three entertainment production companies, for total cash consideration of approximately $240 million. The revenues and Segment EBITDA (as defined in Note 10—Segment Information) included within the Company’s consolidated results of operations associated with these companies were not material individually or in the aggregate.no acquisitions.

FOX CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 3. INVENTORIES, NET

The Company’s inventories were comprised of the following:

As of
March 31,
2023
As of
June 30,
2022
(in millions)
Licensed programming, including prepaid sports rights $ 733 $ 975
Owned programming 446 337
Total inventories, net 1,179 1,312
Less: current portion of inventories, net (487) (791)
Total non-current inventories, net $ 692 $ 521
Owned programming
Released $ 252 $ 205
In-process and other 194 132
Total $ 446 $ 337

~~FOX CORPORATION~~

~~NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS~~


	As of September 30, 2023		As of June 30, 2023
	(in millions)
Licensed programming, including prepaid sports rights	$	959	$	720
Owned programming	529		465
Total inventories, net	1,488		1,185
Less: current portion of inventories, net	(751)		(543)
Total non-current inventories, net	$	737	$	642

Owned programming
Released	$	219	$	256
In-process or other	310		209
Total	$	529	$	465

The following table presents the aggregate amortization expense related to Inventories, net included in Operating expenses in the Statements of Operations:
For the three months ended March 31, For the nine months ended March 31,
2023 2022 2023 2022
(in millions) (in millions)
Amortization expense $ 1,781 $ 1,150 $ 5,201 $ 4,591


	For the three months ended September 30,
	2023		2022
	(in millions)
Total amortization expense	$	995	$	854

NOTE 4. FAIR VALUE

Fair value measurements are required to be disclosed using a three-tiered fair value hierarchy which distinguishes market participant assumptions into the following categories: (i) inputs that are quoted prices in active markets (“Level 1”); (ii) inputs other than quoted prices included within Level 1 that are observable, including quoted prices for similar assets or liabilities (“Level 2”); and (iii) inputs that require the entity to use its own assumptions about market participant assumptions (“Level 3”).

The following tables present information about financial assets and redeemable noncontrolling interests carried at fair value on a recurring basis:


		Fair value measurements											Fair value measurements
		As of March 31, 2023											As of September 30, 2023
		Total		Level 1			Level 2		Level 3				Total		Level 1			Level 2		Level 3
		(in millions)											(in millions)
Investments in equity securities	Investments in equity securities	$	806	$	806	(a)	$	—	$	—		Investments in equity securities	$	727	$	727	(a)	$	—	$	—
Redeemable noncontrolling interests	Redeemable noncontrolling interests	(200)		—			—		(200)		(b)	Redeemable noncontrolling interests	(228)		—			—		(228)		(b)
Total	Total	$	606	$	806		$	—	$	(200)		Total	$	499	$	727		$	—	$	(228)

Fair value measurements
As of June 30, 2022
Total Level 1 Level 2 Level 3
(in millions)
Investments in equity securities $ 435 $ 435 (a) $ — $ —
Redeemable noncontrolling interests (188) — — (188) (b)
Total $ 247 $ 435 $ — $ (188)

FOX CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


	Fair value measurements
	As of June 30, 2023
	Total		Level 1			Level 2		Level 3
	(in millions)
Investments in equity securities	$	884	$	884	(a)	$	—	$	—
Redeemable noncontrolling interests	(213)		—			—		(213)		(b)
Total	$	671	$	884		$	—	$	(213)


(a)			The investments categorized as Level 1 primarily represent 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 2022 Form 10-K under the heading “Flutter” for additional information).~~value.


(b)			The Company utilizes both the market and income approach valuation techniques 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 redeemable noncontrolling interests. Examples of utilized unobservable inputs are future cash flows and long-term growth rates.

In connection with the combination of The Stars Group Inc. and Flutter in May 2020, FOX Sports received the right to acquire an 18.6% equity interest in FanDuel Group (“FanDuel”), a majority-owned subsidiary of Flutter, at a price set forth in the relevant agreement (structured as a 10-year option), which has been the

~~FOX CORPORATION~~

~~NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS~~

subject of arbitration proceedings. In January 2023, the U.S. District Court for the Southern District of New York confirmed and entered the arbitrator’s ruling affirming FOX Sports’ 10-year call option expiring in December 2030 to acquire 18.6% of FanDuel for $3.72 billion, with a 5% annual escalator. FOX has no obligation to commit capital towards this opportunity unless and until it exercises the option. In addition, Flutter cannot pursue an initial public offering for FanDuel without FOX’s consent or approval from the arbitrator.

Redeemable Noncontrolling Interests

The redeemable noncontrolling interests recorded are put rights held by minority shareholders in Credible Labs Inc. (“Credible”) and an entertainment production company.

The changes in redeemable noncontrolling interests classified as Level 3 measurements were as follows:

For the three months ended March 31, For the nine months ended March 31,
2023 2022 2023 2022
(in millions)
Beginning of period $ (196) $ (172) $ (188) $ (261)
Acquisitions(a)
— — — (58)
Net loss 4 5 14 9
Distributions — — — 3
Accretion and other(b)
(8) (8) (26) 132
End of period $ (200) $ (175) $ (200) $ (175)


~~(a)~~			~~The increase for the nine~~ ~~months ended March 31, 2022~~ ~~was primarily due to the acquisition of an entertainment production company.~~
~~(b)~~			~~As a result of the expiration of the sports network minority shareholder’s final put right during the nine months ended March 31, 2022, approximately $110 million was reclassified into equity.~~


	For the three months ended September 30,
	2023		2022
	(in millions)
Beginning of period	$	(213)	$	(188)
Net loss	—		5
Accretion and other	(15)		(10)
End of period	$	(228)	$	(193)

The put right held by the Credible minority ~~put right~~shareholder will become exercisable in fiscal 2025. The put right held by the entertainment production company’s minority shareholder will become exercisable in fiscal 2027.

FOX CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Financial Instruments

The carrying value of the Company’s financial instruments exclusive of borrowings, such as cash and cash equivalents, receivables, payables and investments accounted for using the measurement alternative method, approximates fair value.


		As of March 31, 2023		As of June 30, 2022			As of September 30, 2023		As of June 30, 2023
		(in millions)					(in millions)
Borrowings	Borrowings					Borrowings
Fair value	Fair value	$	7,037	$	7,084	Fair value	$	6,604	$	6,895
Carrying value	Carrying value	$	7,210	$	7,206	Carrying value	$	7,212	$	7,210

Fair value is generally determined by reference to market values resulting from trading on a national securities exchange or in an over-the-counter market (a Level 1 measurement).

Concentrations of Credit Risk

Cash and cash equivalents are maintained with several financial institutions. The Company has deposits held with banks that exceed the amount of insurance provided on such deposits. Generally, these deposits may

~~FOX CORPORATION~~

~~NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS~~

be redeemed upon demand and are maintained with financial institutions of reputable credit and, therefore, bear minimal credit risk.

Generally, the Company does not require collateral to secure receivables. As of ~~March 31,~~September 30, 2023, ~~and June 30, 2022,~~ the Company had no individual customers that accounted for 10% or more of the Company’s receivables. As of June 30, 2023, the Company had one customer that accounted for approximately 11% of the Company’s receivables.

NOTE 5. BORROWINGS

Borrowings include senior notes (See Note 9—Borrowings in the ~~2022~~2023 Form 10-K under the heading “Public Debt – Senior Notes Issued”) of which $1.25 billion of 4.030% senior notes are due in January 2024. In October 2023, the Company issued $1.25 billion of 6.500% senior notes due 2033. In addition, the Company is party to a credit agreement providing a $1.0 billion unsecured revolving credit facility with a sub-limit of $150 million available for the issuance of letters of credit and a maturity date of ~~March 2024~~June 2028 (See Note 9—Borrowings in the ~~2022~~2023 Form 10-K under the heading “Revolving Credit Agreement”). As of ~~March 31,~~September 30, 2023, there were no borrowings outstanding under the revolving credit agreement.

NOTE 6. STOCKHOLDERS’ EQUITY

Stock Repurchase Program

The Company’s Board ~~previously~~of Directors (the “Board”) has authorized a stock repurchase program under which the Company can repurchase $4$7 billion of Class A Common Stock, par value $0.01 per share (the “Class A Common Stock”), and Class B Common Stock, par value $0.01 per share (the “Class B Common Stock” ~~and, together with the Class A Common Stock, the “Common Stock”~~). In February 2023, the Board authorized incremental stock repurchases of an additional $3 billion of Common Stock. With this increase, the Company’s total stock repurchase authorization is now $7 billion. The program has no time limit and may be modified, suspended or discontinued at any time.

In ~~February 2023,~~connection with the stock repurchase program, the Company entered into an accelerated share repurchase (“ASR”) agreement in February 2023, under which the Company paid a third-party financial institution $1 billion and received an initial delivery of approximately 22.5 million shares of Class A Common Stock, representing 80% of the shares expected to be repurchased under the ASR agreement, at a price of $35.54 per share, which was the Nasdaq Global Select Market (“Nasdaq”) closing share price of the Class A Common Stock on February 8, 2023. ~~The~~Upon settlement of the ASR agreement in August 2023, the Company ~~will receive~~received a final delivery of approximately 7.8 million shares of Class A Common ~~Stock, which is~~Stock. The final number of shares purchased under the ASR agreement was determined using ~~the volume-weighted~~a price of $33.03 per share (the volume-

FOX CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

weighted average market price of the Class A Common Stock on ~~the~~ Nasdaq ~~Global Select Market~~ during the term of the ASR agreement less a ~~discount.~~discount). The Company accounted for the ASR agreement as two separate transactions. The initial delivery of Class A Common Stock was accounted for as a treasury stock transaction recorded on the acquisition date. The final settlement of Class A Common Stock iswas accounted for as a forward contract indexed to the Class A Common Stock and qualified as an equity transaction.

~~During the nine months ended March 31, 2023,~~In total, the Company repurchased approximately 4615.4 million shares of Class A Common Stock for approximately ~~$1.8 billion.~~$250 million during the three months ended September 30, 2023.

Repurchased shares are retired and reduce the number of shares issued and outstanding. The Company allocates the amount of the repurchase price over par value between additional paid-in capital and retained earnings.

As of ~~March 31,~~September 30, 2023, the Company’s remaining stock repurchase authorization was approximately ~~$2.6~~$2.15 billion. Subsequent to ~~March 31,~~September 30, 2023, the Company repurchased approximately ~~1.5~~1.6 million shares of Class A Common Stock for approximately $50 million.

~~FOX CORPORATION~~

~~NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Loss) Earnings Per Share~~

~~The computation of diluted (loss) earnings per share did not include common stock equivalents during each period presented if their inclusion would have been antidilutive.~~

Dividends

The following table summarizes the dividends declared per share on both the Company’s Class A Common Stock and Class B Common Stock:

For the three months ended March 31, For the nine months ended March 31,
2023 2022 2023 2022
Cash dividend per share $ 0.25 $ 0.24 $ 0.50 $ 0.48


	For the three months ended September 30,
	2023		2022
Cash dividend per share	$	0.26	$	0.25

The Company declared a semi-annual dividend of ~~$0.25~~$0.26 per share on both the Class A Common Stock and the Class B Common Stock during the three months ended ~~March 31,~~September 30, 2023, which was paid on ~~March 29, 2023 to stockholders of record on March 1,~~September 27, 2023.

NOTE 7. EQUITY-BASED COMPENSATION

The Company has ~~one equity plan,~~equity-based compensation plans, including the Fox Corporation 2019 Shareholder Alignment Plan (See Note 12—Equity-Based Compensation in the ~~2022~~2023 Form 10-K).

The following table summarizes the Company’s equity-based compensation:


		For the three months ended March 31,				For the nine months ended March 31,					For the three months ended September 30,
		2023		2022		2023		2022			2023		2022
		(in millions)									(in millions)
Equity-based compensation	Equity-based compensation	$	23	$	28	$	55	$	75	Equity-based compensation	$	24	$	7
Intrinsic value of all settled equity-based awards	Intrinsic value of all settled equity-based awards	$	1	$	2	$	77	$	96	Intrinsic value of all settled equity-based awards	$	65	$	76
Tax benefit on settled equity-based awards	Tax benefit on settled equity-based awards	$	1	$	—	$	14	$	21	Tax benefit on settled equity-based awards	$	10	$	14

The Company’s equity-based awards are settled in Class A Common Stock. As of ~~March 31,~~September 30, 2023, the Company’s total estimated compensation cost, not yet recognized, related to non-vested equity awards held by the Company’s employees was approximately ~~$94~~$150 million and is expected to be recognized over a weighted average period between one and two years.

As of ~~March 31,~~September 30, 2023 and 2022, the Company had approximately 5 million and 6 million stock options outstanding, respectively. The computation of diluted earnings per share did not include stock options

FOX CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

outstanding during each period presented if their inclusion would have been antidilutive, and, for those shares that are contingently issuable, all necessary conditions have not been satisfied for the periods presented.

Awards Vested and Granted

Restricted Stock Units

During the ~~nine~~three months ended ~~March 31,~~September 30, 2023 and 2022, a~~pproximately 1.5 million and 2.4 million~~ restricted stock units (“RSUs”) with a value of approximately $1.7 million and $1.5 million vested and RSUs with a value of approximately ~~2.1~~$1.8 million and ~~1.7~~$2.0 million ~~RSUs~~ were granted, respectively. These RSUs generally vest in equal annual installments over a three-year period subject to participants’ continued employment with the Company.

Performance-Based Stock Options

During the ~~nine~~three months ended ~~March 31,~~September 30, 2023 and 2022, the Company granted approximately 4 million performance-based stock options, in each period, which will vest in full at the end of a three-year performance period if the market condition is met, and have a term of seven years thereafter.

~~FOX CORPORATION~~

~~NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS~~

NOTE 8. COMMITMENTS AND CONTINGENCIES

Commitments

The Company has commitments under certain firm contractual arrangements (“firm commitments”) to make future payments. These firm commitments secure the future rights to various assets and services to be used in the normal course of operations. The total firm commitments and future debt payments as of ~~March 31,~~September 30, 2023 and June 30, ~~2022~~2023 were approximately ~~$39~~$38 billion and ~~$42~~$39 billion, respectively. The decrease from June 30, ~~2022~~2023 was primarily due to sports programming rights payments.

In December 2022, the Company renewed the operating lease for its corporate headquarters at 1211 Avenue of the Americas in New York through fiscal 2042. In connection with this extension, the Company recorded additional operating lease assets and liabilities of approximately $540 million in December 2022.

Contingencies

The Company establishes an accrued liability for legal claims and indemnification claims when the Company determines that a loss is both probable and the amount of the loss can be reasonably estimated. Once established, accruals are adjusted from time to time, as appropriate, in light of additional information. The amount of any loss ultimately incurred in relation to matters for which an accrual has been established may be higher or lower than the amounts accrued for such matters. Any fees, expenses, fines, penalties, judgments or settlements which might be incurred by the Company in connection with the various proceedings could affect the Company’s results of operations and financial condition. For the contingencies disclosed below for which there is at least a reasonable possibility that a loss may be incurred, other than the accrual provided, the Company was unable to estimate the amount of loss or range of loss.

FOX News

The Company’s FOX News business and certain of its current and former employees have been subject to allegations of sexual harassment and discrimination on the basis of sex and race. The Company has resolved many of these claims and is contesting other claims in litigation. The Company has also received regulatory and investigative inquiries relating to these matters. To date, none of the amounts paid in settlements or reserved for pending or future claims is material, individually or in the aggregate, to the Company. The amount of additional liability, if any, that may result from these or related matters cannot be estimated at this time. However, the Company does not currently anticipate that the ultimate resolution of any such pending matters will have a material adverse effect on its business, financial condition, results of operations or cash flows.

U.K. Newspaper Matters Indemnity

In connection with the separation of Twenty-First Century Fox, Inc. (“21CF”) and News Corporation in June 2013 (the “21CF News Corporation Separation”), 21CF agreed to indemnify News Corporation, on an after-tax basis, for payments made after the 21CF News Corporation Separation arising out of civil claims and investigations relating to phone hacking, illegal data access and inappropriate payments to public officials that occurred at subsidiaries of News Corporation before the 21CF News Corporation Separation, as well as legal

FOX CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

and professional fees and expenses paid in connection with the related criminal matters, other than fees, expenses and costs relating to employees who are not (i) directors, officers or certain designated employees or (ii) with respect to civil matters, co-defendants with News Corporation (the “U.K. Newspaper Matters Indemnity”). In accordance with the Separation Agreement (as defined in Note 1—Description of Business and Basis of Presentation in the ~~2022~~2023 Form 10-K under the heading “The ~~Distribution”~~Transaction”), the Company assumed certain costs and liabilities related to the U.K. Newspaper Matters Indemnity. The liability recorded in the Balance Sheets related to the indemnity was approximately ~~$120 million and $65~~$115 million as of ~~March 31,~~June 30, 2023 and ~~June 30, 2022, respectively. The increase in the liability recorded was attributable to an increase in the number~~approximately $100 million as of ~~civil claims submitted in advance of the~~ September 30, ~~2022 cutoff date set by the judge for this phase of the litigation.~~

~~FOX CORPORATION~~

~~NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS~~

2023.

Defamation and Disparagement Claims

From time to time, the Company and its news businesses, including FOX News Media and the FOX Television Stations, and their employees are subject to lawsuits alleging defamation or disparagement. These include lawsuits filed by Smartmatic USA Corp. and certain of its affiliates (collectively, “Smartmatic”) in February 2021 seeking $2.7 billion in damages and Dominion Voting Systems, Inc. and certain of its affiliates (collectively, “Dominion”) in March 2021 seeking $1.6 billion in damages. On March 31, 2023, the court in the Dominion case issued its rulings on summary judgment motions that were unfavorable to the Company. Following these rulings, on April 18, 2023, the Company and its subsidiary, Fox News Network, LLC, entered into a Release and Settlement Agreement with Dominion pursuant to which the parties agreed to resolve the lawsuits among them. The Company paid an aggregate of approximately $800 million to settle this and a related lawsuit in April ~~2023, which was included in Accounts payable, accrued expenses and other current liabilities in~~the Consolidated Balance Sheet as of March 31, 2023 and Other, net in the Consolidated Statement of Operations for the three months ended March 31, 2023 (See Note 11—Additional Financial Information under the headings “Accounts Payable, Accrued Expenses and Other Current Liabilities” and~~Other, net”).~~2023.

The Company continues to believe the Smartmatic and other pending lawsuits alleging defamation or disparagement are without merit and intends to defend against them vigorously, including through any appeals. Discovery in the Smartmatic case, including depositions, remains ongoing, and ~~it is likely that depositions,~~ expert discovery and summary judgment and other key motions will follow. At this time, a trial in the Smartmatic lawsuit is not expected to commence until 2025. The Company is unable to predict the final outcome of these matters and has determined that a loss in the Smartmatic case is neither probable nor reasonably estimable. There can be no assurance that the ultimate resolution of these pending matters will not have a material adverse effect on the Company’s business, financial condition, results of operations or cash flows.

On April 11, 2023 and April 20, 2023, stockholders of the Company filed derivative lawsuits in the Delaware Court of Chancery against certain directors of the Company under the captions Schwarz v. Murdoch et al., C.A. No. 2023-0418 (Del. Ch.) and Greenberg et al. v. Murdoch et al., C.A. No. 2023-0440 (Del. Ch.). The Delaware Court of Chancery consolidated the lawsuits ~~each named~~into one matter captioned In re Fox Corporation Deriv. Litig., C.A. No. 2023-0418 (Del.Ch.). Two additional derivative lawsuits were subsequently filed by the Company’s stockholders in the same court on September 12, 2023 against certain directors and officers of the Company and are part of the consolidated lawsuit. Each of the lawsuits names the Company as a nominal defendant. The complaints allege that ~~members of the Company’s Board~~certain directors and officers, as applicable, breached their fiduciary duties by allowing the Company’s news channel to air ~~programming~~allegations regarding election fraud in connection with the 2020 U.S. Presidential election, which resulted in significant defamation ~~cases.~~litigation. The plaintiffs seek orders awarding damages in favor of the Company; directing the Company to reform and improve its policies and procedures; and awarding the plaintiffs attorneys' fees and costs. The Company ~~believes the lawsuits are without merit and~~ intends to vigorously ~~defend against them.~~contest the lawsuit.

Other

The Company’s operations are subject to tax primarily in various domestic jurisdictions and as a matter of course, the Company is regularly audited by federal and state tax authorities. The Company believes it has appropriately accrued for the expected outcome of all pending tax matters and does not currently anticipate that the ultimate resolution of pending tax matters will have a material adverse effect on its consolidated financial condition, future results of operations or liquidity. Each member of the 21CF consolidated group, which includes 21CF, the Company (prior to the ~~Distribution~~Transaction (as defined in Note 1—Description of Business and Basis of Presentation in the ~~2022~~2023 Form 10-K under the heading “The ~~Distribution”~~Transaction”)) and 21CF’s other subsidiaries, is jointly and severally liable for the U.S. federal income and, in certain jurisdictions, state tax liabilities of each other member of the consolidated group. Consequently, the Company could be liable in the event any such

FOX CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

liability is incurred, and not discharged, by any other member of the 21CF consolidated group. The tax matters agreement entered into in connection with the Separation (as defined in Note 1—Description of Business and Basis of Presentation in the ~~2022~~2023 Form 10-K under the heading “The ~~Distribution”~~Transaction”) requires 21CF and/or The Walt Disney Company to indemnify the Company for any such liability. Disputes or assessments could arise during future audits by the Internal Revenue Service in amounts that the Company cannot quantify.

NOTE 9. PENSION AND OTHER POSTRETIREMENT BENEFITS

The Company participates in and/or sponsors various pension, savings and postretirement benefit plans. Pension plans and postretirement benefit plans are closed to new participants with the exception of a small

~~FOX CORPORATION~~

~~NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS~~

group covered by collective bargaining agreements. The net periodic benefit cost was ~~$16~~$13 million and ~~$14~~$16 million for the three months ended ~~March 31,~~September 30, 2023 and 2022, ~~respectively, and $48 million and $41 million for the nine months ended March 31, 2023~~ ~~and~~ ~~2022,~~ respectively.

NOTE 10. SEGMENT INFORMATION

The Company is a news, sports and entertainment company, which manages and reports its businesses in the following segments:

•Cable Network Programming, which produces and licenses news and sports content distributed through traditional cable television systems, direct broadcast satellite operators and telecommunication companies, ~~(“traditional MVPDs”),~~ virtual multi-channel video programming distributors ~~(“virtual MVPDs”)~~ and other digital platforms, primarily in the U.S.

•Television, which produces, acquires, markets and distributes programming through the FOX broadcast network, advertising supported video-on-demand ~~(“AVOD”)~~ service ~~TUBI,~~Tubi, 29 full power broadcast television stations, including 11 duopolies, and other digital platforms, primarily in the U.S. Eighteen of the broadcast television stations are affiliated with the FOX Network, 10 are affiliated with MyNetworkTV and one is an independent station. The segment also includes various production companies that produce content for the Company and third parties.

•Other, Corporate and Eliminations, which principally consists of the FOX Studio Lot, Credible, corporate overhead costs and intracompany eliminations. The FOX Studio Lot, located in Los Angeles, California, provides television and film production services along with office space, studio operation services and includes all operations of the facility. Credible is a U.S. consumer finance marketplace.

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

Segment EBITDA is defined as Revenues less Operating expenses and Selling, general and administrative expenses. Segment EBITDA does not include: Amortization of cable distribution investments, Depreciation and amortization, Impairment and restructuring charges, Interest expense, net, Other, net and Income tax expense. Management believes that Segment EBITDA is an appropriate measure for evaluating the operating performance of the Company’s business segments because it is the primary measure used by the Company’s chief operating decision maker to evaluate the performance of and allocate resources to the Company’s businesses.

1413

FOX CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

The following tables set forth the Company’s Revenues and Segment EBITDA for the three ~~and nine~~ months ended ~~March 31,~~September 30, 2023 and 2022:


		For the three months ended March 31,				For the nine months ended March 31,					For the three months ended September 30,
		2023		2022		2023		2022			2023		2022
		(in millions)									(in millions)
Revenues	Revenues									Revenues
Cable Network Programming	Cable Network Programming	$	1,570	$	1,583	$	4,633	$	4,637	Cable Network Programming	$	1,387	$	1,431
Television	Television	2,475		1,820		7,123		6,160		Television	1,780		1,714
Other, Corporate and Eliminations	Other, Corporate and Eliminations	39		52		125		144		Other, Corporate and Eliminations	40		47
Total revenues	Total revenues	$	4,084	$	3,455	$	11,881	$	10,941	Total revenues	$	3,207	$	3,192
Segment EBITDA	Segment EBITDA									Segment EBITDA
Cable Network Programming	Cable Network Programming	$	792	$	864	$	1,887	$	2,306	Cable Network Programming	$	607	$	742
Television	Television	117		35		782		121		Television	351		409
Other, Corporate and Eliminations	Other, Corporate and Eliminations	(76)		(88)		(213)		(242)		Other, Corporate and Eliminations	(89)		(59)
Amortization of cable distribution investments	Amortization of cable distribution investments	(4)		(5)		(12)		(14)		Amortization of cable distribution investments	(4)		(4)
Depreciation and amortization	Depreciation and amortization	(106)		(92)		(308)		(264)		Depreciation and amortization	(96)		(99)
Interest expense, net	Interest expense, net	(55)		(91)		(183)		(285)		Interest expense, net	(42)		(68)
Other, net	Other, net	(719)		(233)		(722)		(375)		Other, net	(166)		(76)
(Loss) income before income tax benefit (expense)		(51)		390		1,231		1,247
Income tax benefit (expense)		1		(100)		(347)		(322)
Net (loss) income		(50)		290		884		925
Income before income tax expense										Income before income tax expense	561		845
Income tax expense										Income tax expense	(146)		(232)
Net income										Net income	415		613
Less: Net income attributable to noncontrolling interests	Less: Net income attributable to noncontrolling interests	(4)		(7)		(20)		(26)		Less: Net income attributable to noncontrolling interests	(8)		(8)
Net (loss) income attributable to Fox Corporation stockholders		$	(54)	$	283	$	864	$	899
Net income attributable to Fox Corporation stockholders										Net income attributable to Fox Corporation stockholders	$	407	$	605

Revenues by Segment by Component


		For the three months ended March 31,				For the nine months ended March 31,					For the three months ended September 30,
		2023		2022		2023		2022			2023		2022
		(in millions)									(in millions)
Cable Network Programming	Cable Network Programming									Cable Network Programming
Affiliate fee	Affiliate fee	$	1,093	$	1,097	$	3,148	$	3,162	Affiliate fee	$	1,005	$	1,029
Advertising	Advertising	316		339		1,083		1,104		Advertising	290		316
Other	Other	161		147		402		371		Other	92		86
Total Cable Network Programming revenues	Total Cable Network Programming revenues	1,570		1,583		4,633		4,637		Total Cable Network Programming revenues	1,387		1,431
Television	Television									Television
Advertising	Advertising	1,559		969		4,516		3,742		Advertising	910		905
Affiliate fee	Affiliate fee	764		700		2,132		1,990		Affiliate fee	735		682
Other	Other	152		151		475		428		Other	135		127
Total Television revenues	Total Television revenues	2,475		1,820		7,123		6,160		Total Television revenues	1,780		1,714
Other, Corporate and Eliminations	Other, Corporate and Eliminations	39		52		125		144		Other, Corporate and Eliminations	40		47
Total revenues	Total revenues	$	4,084	$	3,455	$	11,881	$	10,941	Total revenues	$	3,207	$	3,192

1514

FOX CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


		For the three months ended March 31,				For the nine months ended March 31,					For the three months ended September 30,
		2023		2022		2023		2022			2023		2022
		(in millions)									(in millions)
Depreciation and amortization	Depreciation and amortization									Depreciation and amortization
Cable Network Programming	Cable Network Programming	$	18	$	16	$	52	$	43	Cable Network Programming	$	18	$	17
Television	Television	38		28		97		82		Television	29		29
Other, Corporate and Eliminations	Other, Corporate and Eliminations	50		48		159		139		Other, Corporate and Eliminations	49		53
Total depreciation and amortization	Total depreciation and amortization	$	106	$	92	$	308	$	264	Total depreciation and amortization	$	96	$	99


		As of March 31, 2023		As of June 30, 2022			As of September 30, 2023		As of June 30, 2023
		(in millions)					(in millions)
Assets	Assets					Assets
Cable Network Programming	Cable Network Programming	$	2,763	$	2,682	Cable Network Programming	$	2,662	$	2,658
Television	Television	8,337		7,915		Television	8,267		7,803
Other, Corporate and Eliminations	Other, Corporate and Eliminations	10,342		11,010		Other, Corporate and Eliminations	9,843		10,371
Investments	Investments	954		578		Investments	877		1,034
Total assets	Total assets	$	22,396	$	22,185	Total assets	$	21,649	$	21,866

NOTE 11. ADDITIONAL FINANCIAL INFORMATION

Interest Expense, net

The following table sets forth the components of Interest expense, net included in the Statements of Operations:


		For the three months ended March 31,				For the nine months ended March 31,					For the three months ended September 30,
		2023		2022		2023		2022			2023		2022
		(in millions)									(in millions)
Interest expense	Interest expense	$	(86)	$	(92)	$	(262)	$	(287)	Interest expense	$	(91)	$	(87)
Interest income	Interest income	31		1		79		2		Interest income	49		19
Total interest expense, net	Total interest expense, net	$	(55)	$	(91)	$	(183)	$	(285)	Total interest expense, net	$	(42)	$	(68)

1615

FOX CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Other, net

The following table sets forth the components of Other, net included in the Statements of Operations:

For the three months ended March 31, For the nine months ended March 31,
2023 2022 2023 2022
(in millions)
Legal settlement costs(a)
$ (850) $ — $ (850) $ —
Net gains (losses) on investments in equity securities(b)
182 (191) 317 (293)
U.K. Newspaper Matters Indemnity(a)
(24) (22) (106) (71)
Transaction costs (17) (17) (45) (41)
Other (10) (3) (38) 30
Total other, net $ (719) $ (233) $ (722) $ (375)


	For the three months ended September 30,
	2023		2022
	(in millions)
Net (losses) gains on investments in equity securities(a)	$	(171)	$	21
U.K. Newspaper Matters Indemnity(b)	(5)		(61)
Other	10		(36)
Total other, net	$	(166)	$	(76)


(a)			~~See Note 8—Commitments and Contingencies under the headings “Defamation and Disparagement Claims” and “U.K. Newspaper Matters Indemnity.”~~
~~(b)~~			Net (losses) gains ~~(losses)~~ on investments in equity securities includes the (losses) gains ~~(losses)~~ related to the change in fair value of the Company’s investment in Flutter (See Note 4—Fair Value).
(b)			See Note 8—Commitments and Contingencies under the headings “U.K. Newspaper Matters Indemnity.” The decrease for the three months ended September 30, 2023, as compared to the corresponding period of fiscal 2023, was attributable to an increase in the number of civil claims submitted in fiscal 2023 in advance of the September 30, 2022 cutoff date set by the judge for this phase of the litigation.

Other Non-Current Assets

The following table sets forth the components of Other non-current assets included in the Balance Sheets:


		As of March 31, 2023		As of June 30, 2022			As of September 30, 2023		As of June 30, 2023
		(in millions)					(in millions)
Operating lease assets~~(a)~~	Operating lease assets~~(a)~~	$	965	$	477	Operating lease assets~~(a)~~	$	931	$	947
Investments~~(b)~~(a)	Investments~~(b)~~(a)	954		578		Investments~~(b)~~(a)	877		1,034
Inventories, net	Inventories, net	692		521		Inventories, net	737		642
Grantor Trust	Grantor Trust	269		270		Grantor Trust	262		276
Other	Other	265		225		Other	249		269
Total other non-current assets	Total other non-current assets	$	3,145	$	2,071	Total other non-current assets	$	3,056	$	3,168


(a)			~~See Note 8—Commitments and Contingencies under the heading “Commitments.”~~
~~(b)~~			Includes investments accounted for at fair value on a recurring basis of ~~$806~~$727 million and ~~$435~~$884 million as of ~~March 31,~~September 30, 2023 and June 30, ~~2022,~~2023, respectively (See Note 4—Fair Value).

1716

FOX CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Accounts Payable, Accrued Expenses and Other Current Liabilities

The following table sets forth the components of Accounts payable, accrued expenses and other current liabilities included in the Balance Sheets:

As of
March 31,
2023
As of
June 30,
2022
(in millions)
Accrued expenses(a)
$ 1,662 $ 992
Programming payable 836 686
Deferred revenue 186 209
Operating lease liabilities 77 107
Other current liabilities 392 302
Total accounts payable, accrued expenses and other current liabilities $ 3,153 $ 2,296


~~(a)~~			~~See Note 8—Commitments and Contingencies under the heading “Defamation and Disparagement Claims.”~~


	As of September 30, 2023		As of June 30, 2023
	(in millions)
Programming payable	$	849	$	785
Accrued expenses	812		1,028
Deferred revenue	254		160
Operating lease liabilities	70		72
Other current liabilities	354		469
Total accounts payable, accrued expenses and other current liabilities	$	2,339	$	2,514

Other Liabilities

The following table sets forth the components of Other liabilities included in the Balance Sheets:

As of
March 31,
2023
As of
June 30,
2022
(in millions)
Non-current operating lease liabilities(a)
$ 930 $ 405
Accrued non-current pension/postretirement liabilities 426 447
Other non-current liabilities 222 268
Total other liabilities $ 1,578 $ 1,120


~~(a)~~			~~See Note 8—Commitments and Contingencies under the heading “Commitments.”~~


	As of September 30, 2023		As of June 30, 2023
	(in millions)
Non-current operating lease liabilities	$	907	$	925
Accrued non-current pension/postretirement liabilities	334		361
Other non-current liabilities	178		198
Total other liabilities	$	1,419	$	1,484

Future Performance Obligations

As of ~~March 31,~~September 30, 2023, approximately ~~$4.0~~$5.6 billion of revenues are expected to be recognized primarily over the next one to three years. The Company’s most significant remaining performance obligations relate to affiliate contracts, sports advertising contracts and content licensing contracts with fixed fees. The amount disclosed does not include (i) revenues related to performance obligations that are part of a contract whose original expected duration is one year or less, (ii) revenues that are in the form of sales- or usage-based royalties and (iii) revenues related to performance obligations for which the Company elects to recognize revenue in the amount it has a right to invoice.

Supplemental Information


	For the three months ended September 30,
	2023		2022
	(in millions)
Supplemental cash flows information
Cash paid for interest	$	(158)	$	(151)
Cash paid for income taxes	$	(2)	$	(8)

~~FOX CORPORATION~~

~~NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS~~

~~Supplemental Information~~

For the nine months ended March 31,
2023 2022
(in millions)
Supplemental cash flows information
Cash paid for interest $ (324) $ (363)
Cash paid for income taxes $ (239) $ (204)

Supplemental information on acquisitions
Fair value of assets acquired, excluding cash $ — $ 348
Cash acquired — 7
Liabilities assumed — (47)
Redeemable noncontrolling interests issued — (5)
Cash paid — (250)
Fair value of equity instruments issued as consideration to third parties(a)
— 53
Issuance of subsidiary common units — (53)
Fair value of equity instruments consideration $ — $ —

~~(a)~~

~~Includes Redeemable noncontrolling interests.~~

1917

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Readers should carefully review this document and the other documents filed by Fox Corporation (“FOX” or the “Company”) with the Securities and Exchange Commission (the “SEC”). This section should be read together with the unaudited interim consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q and the Annual Report on Form 10-K for the fiscal year ended June 30, (“fiscal”) ~~2022~~2023 as filed with the SEC on August ~~12, 2022~~11, 2023 (the ~~“2022~~“2023 Form 10-K”). The unaudited consolidated financial statements are referred to as the “Financial Statements” herein.

INTRODUCTION

Management’s discussion and analysis of financial condition and results of operations is intended to help provide an understanding of the Company’s financial condition, changes in financial condition and results of operations. This discussion is organized as follows:

•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 nine~~ months ended ~~March 31,~~September 30, 2023 and 2022 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 nine~~ months ended ~~March 31,~~September 30, 2023 and 2022. 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 ~~nine~~three months ended ~~March 31,~~September 30, 2023 and 2022, as well as a discussion of the Company’s outstanding debt and commitments, both firm and contingent, that existed as of ~~March 31,~~September 30, 2023. 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.

•Caution Concerning Forward-Looking Statements—This section provides a description of the use of forward-looking information appearing in this Quarterly Report on Form 10-Q, including in Management’s Discussion and Analysis of Financial Condition and Results of Operations. Such information is based on management’s current expectations about future events which are subject to change and to inherent risks and uncertainties. Refer to Part I., Item 1A. “Risk Factors” in the ~~2022~~2023 Form 10-K for a discussion of the risk factors applicable to the Company.

OVERVIEW OF THE COMPANY’S BUSINESS

The Company is a news, sports and entertainment company, which manages and reports its businesses in the following segments:

•Cable Network Programming, which produces and licenses news and sports content distributed through traditional cable television systems, direct broadcast satellite operators and telecommunication companies (“traditional MVPDs”), virtual multi-channel video programming distributors (“virtual MVPDs”) and other digital platforms, primarily in the U.S.

•Television, which produces, acquires, markets and distributes programming through the FOX broadcast network, advertising-supported video-on-demand (“AVOD”) service ~~TUBI,~~Tubi, 29 full power broadcast television stations, including 11 duopolies, and other digital platforms, primarily in the U.S. Eighteen of the broadcast television stations are affiliated with the FOX Network, 10 are affiliated with MyNetworkTV and one is an independent station. The segment also includes various production companies that produce content for the Company and third parties.

•Other, Corporate and Eliminations, which principally consists of the FOX Studio Lot, Credible Labs Inc. (“Credible”), corporate overhead costs and intracompany eliminations. The FOX Studio Lot, located in Los Angeles, California, provides television and film production services along with office space, studio operation services and includes all operations of the facility. Credible is a U.S. consumer finance marketplace.

2018

We use the term "MVPDs" to refer collectively to traditional MVPDs and virtual MVPDs.

RESULTS OF OPERATIONS

Results of Operations—For the three ~~and nine~~ months ended ~~March 31,~~September 30, 2023 versus the three ~~and nine~~ months ended ~~March 31,~~September 30, 2022.

The following table sets forth the Company’s operating results for the three ~~and nine~~ months ended ~~March 31,~~September 30, 2023, as compared to the three ~~and nine~~ months ended ~~March 31,~~September 30, 2022:


		For the three months ended March 31,								For the nine months ended March 31,									For the three months ended September 30,
		2023		2022		Change		% Change		2023		2022		Change		% Change			2023		2022		Change		% Change
(in millions, except %)	(in millions, except %)					Better/(Worse)								Better/(Worse)				(in millions, except %)					Better/(Worse)
Revenues	Revenues																	Revenues
Affiliate fee	Affiliate fee	$	1,857	$	1,797	$	60	3	%	$	5,280	$	5,152	$	128	2	%	Affiliate fee	$	1,740	$	1,711	$	29	2	%
Advertising	Advertising	1,875		1,307		568		43	%	5,598		4,845		753		16	%	Advertising	1,200		1,220		(20)		(2)	%
Other	Other	352		351		1		—	%	1,003		944		59		6	%	Other	267		261		6		2	%
Total revenues	Total revenues	4,084		3,455		629		18	%	11,881		10,941		940		9	%	Total revenues	3,207		3,192		15		—	%
Operating expenses	Operating expenses	(2,727)		(2,164)		(563)		(26)	%	(7,911)		(7,402)		(509)		(7)	%	Operating expenses	(1,862)		(1,656)		(206)		(12)	%
Selling, general and administrative	Selling, general and administrative	(528)		(485)		(43)		(9)	%	(1,526)		(1,368)		(158)		(12)	%	Selling, general and administrative	(480)		(448)		(32)		(7)	%
Depreciation and amortization	Depreciation and amortization	(106)		(92)		(14)		(15)	%	(308)		(264)		(44)		(17)	%	Depreciation and amortization	(96)		(99)		3		3	%
Interest expense, net	Interest expense, net	(55)		(91)		36		40	%	(183)		(285)		102		36	%	Interest expense, net	(42)		(68)		26		38	%
Other, net	Other, net	(719)		(233)		(486)		**		(722)		(375)		(347)		(93)	%	Other, net	(166)		(76)		(90)		**
(Loss) income before income tax benefit (expense)		(51)		390		(441)		**		1,231		1,247		(16)		(1)	%
Income tax benefit (expense)		1		(100)		101		**		(347)		(322)		(25)		(8)	%
Net (loss) income		(50)		290		(340)		**		884		925		(41)		(4)	%
Income before income tax expense																		Income before income tax expense	561		845		(284)		(34)	%
Income tax expense																		Income tax expense	(146)		(232)		86		37	%
Net income																		Net income	415		613		(198)		(32)	%
Less: Net income attributable to noncontrolling interests	Less: Net income attributable to noncontrolling interests	(4)		(7)		3		43	%	(20)		(26)		6		23	%	Less: Net income attributable to noncontrolling interests	(8)		(8)		—		—	%
Net (loss) income attributable to Fox Corporation stockholders		$	(54)	$	283	$	(337)	**		$	864	$	899	$	(35)	(4)	%
Net income attributable to Fox Corporation stockholders																		Net income attributable to Fox Corporation stockholders	$	407	$	605	$	(198)	(33)	%

not meaningful

Overview

~~For the three months ended March 31, 2023 and 2022~~

The Company’s revenues ~~increased 18%~~remained consistent for the three months ended ~~March 31,~~September 30, 2023, as compared to the corresponding period of fiscal ~~2022, primarily due to~~2023, as higher ~~advertising and~~ affiliate fee ~~revenues. The increase in advertising~~ revenue was ~~primarily attributable to revenues resulting from the broadcast of~~ ~~Super Bowl LVII~~ ~~in February 2023 (including the post-game broadcast of~~ ~~Next Level Chef)~~ ~~of approximately $550 million, a higher volume of National Football League (“NFL”) games in the current year and continued growth at TUBI, partially~~ offset by lower ~~ratings at the FOX Network and lower direct response~~ advertising ~~revenue at FOX News Media.~~revenue. The increase in affiliate fee revenue was primarily due to higher fees received from television stations that are affiliated with the FOX Network and higher average rates per subscriber, led by contractual rate increases on existing affiliate agreements and from affiliate agreement renewals, partially offset by a lower average number of subscribers ~~at the Company’s owned and operated television stations.~~

~~Operating expenses increased 26% for the three months ended March 31, 2023, as compared to the corresponding period of fiscal 2022, primarily due to higher sports programming rights amortization and~~

~~production costs driven by the broadcast of~~ ~~Super Bowl LVII~~ ~~in February 2023 and a higher volume of NFL games in the current year and increased digital investment in TUBI, partially offset by lower entertainment programming costs.~~

Selling, general and administrative expenses increased 9% for the three months ended March 31, 2023, as compared to the corresponding period of fiscal 2022, primarily due to higher legal costs at FOX News Media and higher employee related costs.

~~For the nine months ended March 31, 2023 and 2022~~

across all networks. The Company’s revenues increased 9% for the nine months ended March 31, 2023, as compared to the corresponding period of fiscal 2022, due to higher advertising, affiliate fee and other revenues. The increasedecrease in advertising revenue was primarily attributable to ~~revenues resulting from the broadcast of~~ ~~Super Bowl LVII~~ ~~in February 2023, higher~~lower political advertising revenue at the FOX Television Stations principally due to the absence of prior year advertiser expenditures in advance of the November 2022 ~~United States (“~~U.S.”) midterm elections, lower pricing in the direct response marketplace at FOX News Media and lower ratings at the FOX Network. Partially offsetting this decrease was the broadcast of the Fédération International de Football Association (“FIFA”) ~~Men’s~~Women’s World Cup~~in the fall of 2022, additional NFL post-season games~~ and continued growth at ~~TUBI. Partially offsetting this increase was the absence of NFL~~ ~~Thursday Night Football~~ (“~~TNF~~”)and lower ratings at the FOX Network in the current year. The increase in affiliate fee revenue was primarily due to higher fees received from television stations that are affiliated with the FOX Network and higher average rates per subscriber, led by contractual rate increases on existing affiliate agreements and from affiliate agreement renewals, partially offset by a lower average number of subscribers at the Company’s owned and operated television stations. The increase in other revenues was primarily due to the impact of acquisitions of entertainment production companies in fiscal 2022 and higher FOX Nation subscription revenues, partially offset by the timing of animation productions.Tubi.

Operating expenses increased 7%12% for the ~~nine~~three months ended ~~March 31,~~September 30, 2023, as compared to the corresponding period of fiscal ~~2022,~~2023, primarily due to higher sports programming rights amortization and production costs driven by the broadcast of the ~~Super Bowl LVII~~ ~~in February 2023, the~~ FIFA ~~Men’s~~Women’s World Cup~~in the fall of 2022~~and additional post-season NFL and Major League Baseball (“MLB”) content, as well as increased digital investment in TUBI and at FOX News Media. Partially offsetting this increase was the absence of ~~TNF~~ and ~~lower entertainment marketing~~the renewed contract with the National Football League (“NFL”), and ~~timing of certain programming costs.~~higher expenses associated with FOX’s digital investments.

Selling, general and administrative expenses increased ~~12%~~7% for the ~~nine~~three months ended ~~March 31,~~September 30, 2023, as compared to the corresponding period of fiscal ~~2022,~~2023, primarily due to higher ~~legal~~employee-related costs ~~at FOX News Media, higher employee related costs and the impact~~as a result of the ~~fiscal 2022 acquisitions~~transition and separation of ~~entertainment production companies.~~a named executive officer of the Company.

~~Depreciation and amortization~~Interest expense, net—~~Depreciation and amortization~~Interest expense, ~~increased 15% and 17%~~net decreased 38% for the three ~~and nine~~ months ended ~~March 31,~~September 30, 2023, ~~respectively,~~ as compared to the corresponding ~~periods~~period of fiscal ~~2022,~~2023, primarily due to ~~an increase in broadcast production assets at FOX Sports, increased spending~~higher interest income as a result of ~~digital initiatives, and, for the nine months ended March 31, 2023, the impact of the fiscal 2022 acquisitions of entertainment production companies.~~higher interest rates.

Other, net—See Note 11—Additional Financial Information to the accompanying Financial Statements under the heading “Other, net.”

Income tax ~~benefit (expense)~~expense—The Company’s tax provision and related effective tax rate of 26%for the three ~~and nine~~ months ended ~~March 31,~~September 30, 2023 was ~~different~~higher than the statutory rate of 21% primarily due to state taxes and ~~the impact of~~ other permanent ~~items.~~items.

The Company's tax provision and related effective tax rate of ~~26%~~27% for the three ~~and nine~~ months ended ~~March 31,~~September 30, 2022 was higher than the statutory rate of 21% primarily due to state taxes.

Net ~~(loss)~~ income—~~The Company recorded a net loss of $50 million and net~~Net income ~~of $884 million~~decreased 32% for the three ~~and nine~~ months ended ~~March 31,~~September 30, 2023, ~~respectively,~~ as compared to ~~net income~~the corresponding period of ~~$290 million and $925 million for the three and nine months ended March 31, 2022, respectively. The decreases were~~fiscal 2023, primarily due to ~~legal settlement costs at FOX News Media~~lower Segment EBITDA (as defined below) and the change in fair value of the Company’s investment in Flutter Entertainment plc, partially offset by lower expenses for income tax and the U.K. Newspaper Matters Indemnity (See Note 11—Additional Financial Information to the accompanying Financial Statements under the heading “Other, net”)~~, partially offset by a higher gain recognized~~.

~~on the change in fair value of the Company's investment in Flutter Entertainment plc and higher Segment EBITDA (as defined below).~~

Segment Analysis

The following tables set forth the Company’s Revenues and Segment EBITDA for the three ~~and nine~~ months ended ~~March 31,~~September 30, 2023, as compared to the three ~~and nine~~ months ended ~~March 31,~~September 30, 2022:


		For the three months ended March 31,								For the nine months ended March 31,									For the three months ended September 30,
		2023		2022		Change		% Change		2023		2022		Change		% Change			2023		2022		Change		% Change
(in millions, except %)	(in millions, except %)					Better/(Worse)								Better/(Worse)				(in millions, except %)					Better/(Worse)
Revenues	Revenues																	Revenues
Cable Network Programming	Cable Network Programming	$	1,570	$	1,583	$	(13)	(1)	%	$	4,633	$	4,637	$	(4)	—	%	Cable Network Programming	$	1,387	$	1,431	$	(44)	(3)	%
Television	Television	2,475		1,820		655		36	%	7,123		6,160		963		16	%	Television	1,780		1,714		66		4	%
Other, Corporate and Eliminations	Other, Corporate and Eliminations	39		52		(13)		(25)	%	125		144		(19)		(13)	%	Other, Corporate and Eliminations	40		47		(7)		(15)	%
Total revenues	Total revenues	$	4,084	$	3,455	$	629	18	%	$	11,881	$	10,941	$	940	9	%	Total revenues	$	3,207	$	3,192	$	15	—	%

For the three months ended March 31, For the nine months ended March 31,
2023 2022 Change % Change 2023 2022 Change % Change
(in millions, except %) Better/(Worse) Better/(Worse)
Segment EBITDA
Cable Network Programming $ 792 $ 864 $ (72) (8) % $ 1,887 $ 2,306 $ (419) (18) %
Television 117 35 82 ** 782 121 661 **
Other, Corporate and Eliminations (76) (88) 12 14 % (213) (242) 29 12 %
Adjusted EBITDA(a)
$ 833 $ 811 $ 22 3 % $ 2,456 $ 2,185 $ 271 12 %


	For the three months ended September 30,
	2023		2022		Change		% Change
(in millions, except %)					Better/(Worse)
Segment EBITDA
Cable Network Programming	$	607	$	742	$	(135)	(18)	%
Television	351		409		(58)		(14)	%
Other, Corporate and Eliminations	(89)		(59)		(30)		(51)	%
Adjusted EBITDA(a)	$	869	$	1,092	$	(223)	(20)	%


**			~~not meaningful~~
(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 ~~(39%~~(43% and ~~43%~~45% of the Company’s revenues for the first ~~nine~~three months of fiscal ~~2023~~2024 and ~~2022,~~2023, respectively)

For the three months ended March 31, For the nine months ended March 31,
2023 2022 Change % Change 2023 2022 Change % Change
(in millions, except %) Better/(Worse) Better/(Worse)
Revenues
Affiliate fee $ 1,093 $ 1,097 $ (4) — % $ 3,148 $ 3,162 $ (14) — %
Advertising 316 339 (23) (7) % 1,083 1,104 (21) (2) %
Other 161 147 14 10 % 402 371 31 8 %
Total revenues 1,570 1,583 (13) (1) % 4,633 4,637 (4) — %
Operating expenses (610) (580) (30) (5) % (2,271) (1,940) (331) (17) %
Selling, general and administrative (172) (144) (28) (19) % (487) (405) (82) (20) %
Amortization of cable distribution investments 4 5 (1) (20) % 12 14 (2) (14) %
Segment EBITDA $ 792 $ 864 $ (72) (8) % $ 1,887 $ 2,306 $ (419) (18) %

~~For the three months ended March 31, 2023 and 2022~~


	For the three months ended September 30,
	2023		2022		Change		% Change
(in millions, except %)					Better/(Worse)
Revenues
Affiliate fee	$	1,005	$	1,029	$	(24)	(2)	%
Advertising	290		316		(26)		(8)	%
Other	92		86		6		7	%
Total revenues	1,387		1,431		(44)		(3)	%
Operating expenses	(649)		(564)		(85)		(15)	%
Selling, general and administrative	(135)		(129)		(6)		(5)	%
Amortization of cable distribution investments	4		4		—		—	%
Segment EBITDA	$	607	$	742	$	(135)	(18)	%

Revenues at the Cable Network Programming segment decreased 1%3% for the three months ended ~~March 31,~~September 30, 2023, as compared to the corresponding period of fiscal ~~2022, primarily~~2023, due to lower affiliate fee and advertising revenues, partially offset by higher other revenues. ~~Affiliate~~The decrease in affiliate fee revenue ~~remained relatively consistent as the~~was primarily due to a decrease in the average number of subscribers, ~~was~~partially offset by higher average rates per subscriber, led by contractual rate increases on existing affiliate agreements and from affiliate agreement renewals. The decrease in ~~the average number of subscribers was due to a reduction in traditional MVPD subscribers, partially offset by an increase in virtual MVPD subscribers. The decrease in~~ advertising revenue was primarily due to lower pricing in the direct response ~~advertising revenue~~marketplace and lower ratings at FOX News Media, partially offset by higher pricing in the national marketplace at FOX News Media and the broadcast of the FIFA Women’s World ~~Baseball Classic~~Cup at the national sports networks induring the current year quarter. The increase in other revenues was primarily due to ~~higher FOX Nation subscription revenues.~~the timing of sports sublicensing revenue at the national sports networks.

Cable Network Programming Segment EBITDA decreased 8%18% for the three months ended ~~March 31,~~September 30, 2023, as compared to the corresponding period of fiscal ~~2022,~~2023, due to the revenue decreases noted above and higher expenses. Operating expenses increased primarily due to higher sports programming rights amortization and production costs ~~including~~led by the broadcast of the FIFA Women’s World ~~Baseball Classic~~Cup.

Television ~~at the national sports networks. Selling, general~~(56% and ~~administrative expenses increased primarily due to higher legal costs at FOX News Media. Also contributing to the increase in expenses was higher costs associated with the second season~~54% of the ~~United States Football League (“USFL”).~~Company’s revenues for the first three months of fiscal 2024 and 2023, respectively)

~~For the nine months ended March 31, 2023 and 2022~~


	For the three months ended September 30,
	2023		2022		Change		% Change
(in millions, except %)					Better/(Worse)
Revenues
Advertising	$	910	$	905	$	5	1	%
Affiliate fee	735		682		53		8	%
Other	135		127		8		6	%
Total revenues	1,780		1,714		66		4	%
Operating expenses	(1,198)		(1,071)		(127)		(12)	%
Selling, general and administrative	(231)		(234)		3		1	%
Segment EBITDA	$	351	$	409	$	(58)	(14)	%

Revenues at the ~~Cable Network Programming~~Television segment ~~remained relatively consistent~~increased 4% for the ~~nine~~three months ended ~~March 31,~~September 30, 2023, as compared to the corresponding period of fiscal 2022, as the decreases in affiliate fee and advertising revenues were offset by higher other revenues. Affiliate fee revenue remained relatively consistent as the decrease in the average number of subscribers was offset by higher average rates per subscriber, led by contractual rate increases on existing affiliate agreements and from affiliate agreement renewals. The decrease in the average number of subscribers was due to a reduction in traditional MVPD subscribers, partially offset by an increase in virtual MVPD subscribers. Advertising revenue decreased primarily due to lower direct response and digital advertising revenues at FOX News Media, partially offset by the broadcast of the FIFA Men’s ~~World Cup~~ ~~at the national sports networks in the current year. The increase in other revenues was primarily due to higher FOX Nation subscription revenues.~~

~~Cable Network Programming Segment EBITDA decreased 18% for the nine months ended March 31,~~ 2023, as compared to the corresponding period of fiscal 2022, primarily due to higher expenses. Operating expenses increased primarily due to higher sports programming rights amortization led by the broadcast of the FIFA Men’s ~~World Cup, the renewed MLB contract and additional college football games at the national sports~~

networks, and increased digital investment at FOX News Media. Selling, general and administrative expenses increased primarily due to higher legal costs at FOX News Media and higher costs associated with the expansion of the USFL.

~~Television~~ ~~(60% and 56% of the Company’s revenues for the first nine months of fiscal 2023 and 2022, respectively)~~

For the three months ended March 31, For the nine months ended March 31,
2023 2022 Change % Change 2023 2022 Change % Change
(in millions, except %) Better/(Worse) Better/(Worse)
Revenues
Advertising $ 1,559 $ 969 $ 590 61 % $ 4,516 $ 3,742 $ 774 21 %
Affiliate fee 764 700 64 9 % 2,132 1,990 142 7 %
Other 152 151 1 1 % 475 428 47 11 %
Total revenues 2,475 1,820 655 36 % 7,123 6,160 963 16 %
Operating expenses (2,106) (1,557) (549) (35) % (5,592) (5,392) (200) (4) %
Selling, general and administrative (252) (228) (24) (11) % (749) (647) (102) (16) %
Segment EBITDA $ 117 $ 35 $ 82 ** $ 782 $ 121 $ 661 **

~~not meaningful~~

~~For the three months ended March 31, 2023 and 2022~~

~~Revenues at the Television segment increased 36% for thethree months ended March 31, 2023, as compared to the corresponding period of fiscal 2022, primarily~~ due to higher advertising, ~~and~~ affiliate fee and other revenues. The increase in advertising revenue was primarily due to ~~revenues resulting from~~ the broadcast of the FIFA Women’s ~~Super Bowl LVII~~World Cup ~~in February 2023~~ and ~~a higher volume of NFL games~~continued growth at Tubi, partially offset by lower political advertising revenue at the FOX Television Stations principally due to the absence of prior year advertiser expenditures in advance of the November 2022 U.S. midterm elections, and lower ratings at the FOX ~~Network, and continued growth at TUBI.~~Network. The increase in affiliate fee revenue was primarily due to higher fees received from television stations that are affiliated with the FOX Network and higher average rates per subscriber partially offset by a lower average number of subscribers at the Company’s owned and operated television stations. The increase in other revenues was primarily due to the timing of participation revenues at FOX’s entertainment production companies.

Television Segment EBITDA ~~increased $82 million~~decreased 14% for the three months ended ~~March 31,~~September 30, 2023, as compared to the corresponding period of fiscal ~~2022, due to~~2023, as the revenue increases noted above ~~partially~~were more than offset by higher expenses. Operating expenses increased primarily due to higher sports programming rights amortization and production costs ~~driven by the broadcast of~~ ~~Super Bowl LVII~~ in February 2023 and a higher volume of NFL games and increased digital investment in TUBI, partially offset by lower entertainment programming costs including the absence of a write-down of certain scripted programming in the prior year quarter. Selling, general and administrative expenses increased primarily due to higher employee related costs.

~~For the nine months ended March 31, 2023 and 2022~~

~~Revenues at the Television segment increased 16% for the~~nine months ended March 31, 2023, as compared to the corresponding period of fiscal 2022, due to higher advertising, affiliate fee and other revenues. The increase in advertising revenue was primarily due to revenues resulting from the broadcast of ~~Super Bowl LVII~~ ~~in February 2023, higher political advertising revenue at FOX Television Stations~~ principally due to ~~the November 2022 U.S. midterm elections,~~ the broadcast of the FIFA ~~Men’s~~Women’s World Cup~~, additional~~ and the renewed NFL ~~post-season games and continued growth at TUBI. Partially offsetting this increase was the absence of~~ ~~TNF~~ and lower ratings at the FOX Network in the current year. The increase in affiliate fee revenue was primarily due to higher fees received from television stations that are affiliated with the FOX Networkcontract, and higher ~~average rates per subscriber partially offset by a lower average number of subscribers at the Company’s owned and operated~~

television stations. The increase in other revenues was primarily due to the impact of acquisitions of entertainment production companies in fiscal 2022, partially offset by the timing of animation productions.

Television Segment EBITDA increased $661 million for the nine months ended March 31, 2023, as compared to the corresponding period of fiscal 2022, due to the revenue increases noted above, partially offset by higher expenses. Operating expenses ~~increased primarily due to higher sports programming rights amortization and production costs driven by the broadcast of the~~ ~~Super Bowl LVII~~ ~~in February 2023, NFL and MLB content, led by additional post-season games, and the FIFA Men’s~~ ~~World Cup, as well as increased~~associated with FOX’s digital ~~investment in TUBI. Partially offsetting this increase was the absence of~~ ~~TNF~~ and lower entertainment marketing and timing of certain programming costs. Selling, general and administrative expenses increased primarily due to higher employee related costs and the impact of the fiscal 2022 acquisitions of entertainment production companies.investments.

Other, Corporate and Eliminations (1% of the Company’s revenues for the first ~~nine~~three months of fiscal ~~2023~~2024 and ~~2022)~~2023)

For the three months ended March 31, For the nine months ended March 31,
2023 2022 Change % Change 2023 2022 Change % Change
(in millions, except %) Better/(Worse) Better/(Worse)
Revenues $ 39 $ 52 $ (13) (25) % $ 125 $ 144 $ (19) (13) %
Operating expenses (11) (27) 16 59 % (48) (70) 22 31 %
Selling, general and administrative (104) (113) 9 8 % (290) (316) 26 8 %
Segment EBITDA $ (76) $ (88) $ 12 14 % $ (213) $ (242) $ 29 12 %

~~For the three and nine months ended March 31, 2023 and 2022~~


	For the three months ended September 30,
	2023		2022		Change		% Change
(in millions, except %)					Better/(Worse)
Revenues	$	40	$	47	$	(7)	(15)	%
Operating expenses	(15)		(21)		6		29	%
Selling, general and administrative	(114)		(85)		(29)		(34)	%
Segment EBITDA	$	(89)	$	(59)	$	(30)	(51)	%

Revenues at the Other, Corporate and Eliminations segment for the three ~~and nine~~ months ended ~~March 31,~~September 30, 2023 and 2022 include revenues generated by Credible and the operation of the FOX Studio Lot for third parties. Operating expenses for the three ~~and nine~~ months ended ~~March 31,~~September 30, 2023 and 2022 include advertising and promotional expenses at Credible. Selling, general and administrative expenses for the three ~~and nine~~ months ended ~~March 31,~~September 30, 2023 and 2022 primarily relate to employee costs, professional fees and the costs of operating the FOX Studio Lot. Selling, general and administrative expenses increased primarily due to higher employee-related costs as a result of the transition and separation of a named executive officer of the Company.

Non-GAAP Financial Measures

Adjusted EBITDA is defined as Revenues less Operating expenses and Selling, general and administrative expenses. Adjusted EBITDA does not include: Amortization of cable distribution investments, Depreciation and amortization, Impairment and restructuring charges, Interest expense, net, Other, net and Income tax expense.

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

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.

The following table reconciles Net income to Adjusted EBITDA for the three ~~and nine~~ months ended ~~March 31,~~September 30, 2023, as compared to the three ~~and nine~~ months ended ~~March 31,~~September 30, 2022:


		For the three months ended March 31,				For the nine months ended March 31,					For the three months ended September 30,
		2023		2022		2023		2022			2023		2022
		(in millions)									(in millions)
Net (loss) income		$	(50)	$	290	$	884	$	925
Net income										Net income	$	415	$	613
Add	Add									Add
Amortization of cable distribution investments	Amortization of cable distribution investments	4		5		12		14		Amortization of cable distribution investments	4		4
Depreciation and amortization	Depreciation and amortization	106		92		308		264		Depreciation and amortization	96		99
Interest expense, net	Interest expense, net	55		91		183		285		Interest expense, net	42		68
Other, net	Other, net	719		233		722		375		Other, net	166		76
Income tax (benefit) expense		(1)		100		347		322
Income tax expense										Income tax expense	146		232
Adjusted EBITDA	Adjusted EBITDA	$	833	$	811	$	2,456	$	2,185	Adjusted EBITDA	$	869	$	1,092

The following table sets forth the computation of Adjusted EBITDA for the three ~~and nine~~ months ended ~~March 31,~~September 30, 2023, as compared to the three ~~and nine~~ months ended ~~March 31,~~September 30, 2022.


		For the three months ended March 31,				For the nine months ended March 31,					For the three months ended September 30,
		2023		2022		2023		2022			2023		2022
		(in millions)									(in millions)
Revenues	Revenues	$	4,084	$	3,455	$	11,881	$	10,941	Revenues	$	3,207	$	3,192
Operating expenses	Operating expenses	(2,727)		(2,164)		(7,911)		(7,402)		Operating expenses	(1,862)		(1,656)
Selling, general and administrative	Selling, general and administrative	(528)		(485)		(1,526)		(1,368)		Selling, general and administrative	(480)		(448)
Amortization of cable distribution investments	Amortization of cable distribution investments	4		5		12		14		Amortization of cable distribution investments	4		4
Adjusted EBITDA	Adjusted EBITDA	$	833	$	811	$	2,456	$	2,185	Adjusted EBITDA	$	869	$	1,092

LIQUIDITY AND CAPITAL RESOURCES

Current Financial Condition

The Company has approximately ~~$4.1~~$3.8 billion of cash and cash equivalents as of ~~March 31,~~September 30, 2023 and an unused five-year $1.0 billion unsecured revolving credit facility (See Note 5—Borrowings to the accompanying Financial Statements). The Company also has access to the worldwide capital markets, subject to market conditions. In October 2023, the Company issued $1.25 billion of senior notes. As of ~~March 31,~~September 30, 2023, the Company was in compliance with all of the covenants under the revolving credit facility, and it does not anticipate any noncompliance with such covenants.

The principal uses of cash that affect the Company’s liquidity position include the following: the acquisition of rights and related payments for entertainment and sports programming; operational expenditures including production costs; marketing and promotional expenses; expenses related to broadcasting the Company’s programming; employee and facility costs; capital expenditures; acquisitions; income taxes, interest and dividend payments; debt repayments; legal settlements; and stock repurchases.

The Company has evaluated, and expects to continue to evaluate, possible acquisitions and dispositions of certain businesses and assets. Such transactions may be material and may involve cash, the Company’s securities or the assumption of additional indebtedness.

Sources and Uses of Cash

Net cash provided by operating activities for the ~~nine~~three months ended ~~March 31,~~September 30, 2023 and 2022 was as follows (in millions):


For the nine months ended March 31,		2023		2022
For the three months ended September 30,						For the three months ended September 30,	2023		2022
Net cash provided by operating activities	Net cash provided by operating activities	$	1,307	$	951	Net cash provided by operating activities	$	1	$	270

The ~~increase~~decrease in net cash provided by operating activities during the ~~nine~~three months ended ~~March 31,~~September 30, 2023, as compared to the corresponding period of fiscal ~~2022,~~2023, was primarily due to higher ~~Segment EBITDA, lower~~ sports rights payments ~~primarily~~principally due to the ~~current year~~renewed contract with the NFL, payments associated with the restructuring in the fourth quarter of fiscal 2023 and lower political advertising receipts due to the absence of ~~Thursday Night Football~~ ~~and lower entertainment programming costs.~~the November 2022 U.S. midterm elections.

Net cash used in investing activities for the ~~nine~~three months ended ~~March 31,~~September 30, 2023 and 2022 was as follows (in millions):


For the nine months ended March 31,		2023		2022
For the three months ended September 30,						For the three months ended September 30,	2023		2022
Net cash used in investing activities	Net cash used in investing activities	$	(318)	$	(386)	Net cash used in investing activities	$	(58)	$	(118)

The decrease in net cash used in investing activities during the ~~nine~~three months ended ~~March 31,~~September 30, 2023, as compared to the corresponding period of fiscal ~~2022,~~2023, was primarily due to the absence of ~~acquisitions and dispositions, partially offset by an increase in capital expenditures and higher~~ investments in equity securities.

Net cash used in financing activities for the ~~nine~~three months ended ~~March 31,~~September 30, 2023 and 2022 was as follows (in millions):


For the nine months ended March 31,		2023		2022
For the three months ended September 30,						For the three months ended September 30,	2023		2022
Net cash used in financing activities	Net cash used in financing activities	$	(2,043)	$	(1,817)	Net cash used in financing activities	$	(386)	$	(402)

The ~~increase~~decrease in net cash used in financing activities during the ~~nine~~three months ended ~~March 31,~~September 30, 2023, as compared to the corresponding period of fiscal ~~2022,~~2023, was primarily due to ~~activity under the stock repurchase program, partially offset by the absence~~lower dividend payments as a result of ~~the $750 million repayment of senior notes that matured in January 2022 (See Note 9—Borrowings in the 2022 Form 10-K under the heading “Current Borrowings”).~~fewer shares outstanding.

Stock Repurchase Program

See Note 6—Stockholders’ Equity to the accompanying Financial Statements under the heading “Stock Repurchase Program.”

Dividends

The Company declared a semi-annual dividend of ~~$0.25~~$0.26 per share on both the Class A Common Stock and the Class B Common Stock during the three months ended ~~March 31,~~September 30, 2023, which was paid on ~~March 29, 2023 with a record date for determining dividend entitlements of March 1, 2023~~.September 27, 2023.

Debt Instruments

Borrowings include senior notes (See Note 9—5—Borrowings into the ~~2022 Form 10-K under the heading “Public Debt – Senior Notes Issued”)~~accompanying Financial Statements).

Ratings of the Senior Notes

The following table summarizes the Company’s credit ratings as of ~~March 31,~~September 30, 2023:

Rating Agency

Senior Debt

Outlook

Moody’s

Baa2

Stable

Standard & Poor’s

BBB

Stable

Revolving Credit Agreement

The Company has an unused five-year $1.0 billion unsecured revolving credit facility with a maturity date of ~~March 2024~~June 2028 (See Note 5—Borrowings to the accompanying Financial Statements).

Commitments and Contingencies

See Note 8—Commitments and Contingencies to the accompanying Financial Statements.

~~Recent Accounting Pronouncements~~

~~See Note 1—Description of Business and Basis of Presentation to the accompanying Financial Statements under the heading “Recently Adopted, Recently Issued Accounting Guidance and Other.”~~

CAUTION CONCERNING FORWARD-LOOKING STATEMENTS

This document contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical or current fact are “forward-looking statements” for purposes of federal and state securities laws, including any statements regarding (i) future earnings, revenues or other measures of the Company’s financial performance; (ii) the Company’s plans, strategies and objectives for future operations; (iii) proposed new programming or other offerings; (iv) future economic conditions or performance; and (v) assumptions underlying any of the foregoing. Forward-looking statements may include, among others, the words “may,” “will,” “should,” “likely,” “anticipates,” “expects,” “intends,” “plans,” “projects,” “believes,” “estimates,” “outlook” or any other similar words.

Although the Company’s management believes that the expectations reflected in any of the Company’s forward-looking statements are reasonable, actual results could differ materially from those projected or assumed in any forward-looking statements. The Company’s future financial condition and results of operations, as well as any forward-looking statements, are subject to change and to inherent risks and uncertainties, such as those disclosed or incorporated by reference in our filings with the SEC. Important factors that could cause the Company’s actual results, performance and achievements to differ materially from those estimates or projections contained in the Company’s forward-looking statements include, but are not limited to, government regulation, economic, strategic, political and social conditions and the following factors:

•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 MVPDs;

•declines in advertising expenditures due to various factors such as the economic prospects of advertisers or the economy, major sports events and election 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 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 impact of COVID-19 and other widespread health emergencies or pandemics and measures to contain their spread;~~

•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, and the effects of any combination or significant acquisition, disposition or other similar transaction involving the Company;

•the loss of key personnel;

•labor disputes, including current disputes and labor disputes involving professional sports leagues whose games or events the Company has the right to broadcast;

•lower than expected valuations associated with 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;

•content piracy and signal theft and the Company’s ability to protect its intellectual property rights;

•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);~~thereof;

•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 outcomes 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 secure additional capital on acceptable terms;

•the impact of ~~any payments the Company is required~~COVID-19 and other widespread health emergencies or pandemics and measures to make or liabilities it is required to assume under the Separation Agreement (as defined in Note 1—Description of Business and Basis of Presentation in the 2022 Form 10-K) and the indemnification arrangements entered into in connection with the Separation and the Distribution (each as defined in Note 1—Description of Business and Basis of Presentation in the 2022 Form 10-K);contain their spread; and

•the other risks and uncertainties detailed in Part ~~I.,~~I, Item 1A. ‘Risk Factors’ in the ~~2022~~2023 Form 10-K.

Forward-looking statements in this Quarterly Report on Form 10-Q speak only as of the date hereof, and forward-looking statements in documents that are incorporated by reference hereto speak only as of the date of those documents. The Company does not undertake any obligation to update or release any revisions to any forward-looking statement made herein or to report any events or circumstances after the date hereof or to reflect the occurrence of unanticipated events or to conform such statements to actual results or changes in our expectations, except as required by law.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no material changes in the market risks reported in the ~~2022~~2023 Form 10-K.

ITEM 4. CONTROLS AND PROCEDURES

(a)Disclosure Controls and Procedures

The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this Quarterly Report. Based on such evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such period, the Company’s disclosure controls and procedures were effective in recording, processing, summarizing and reporting on a timely basis, information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act and were effective in ensuring that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

(b)Changes in Internal Control over Financial Reporting

There were no changes in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the Company’s ~~third~~first quarter of fiscal ~~2023~~2024 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

3127

PART II

ITEM 1. LEGAL PROCEEDINGS

See Note 8—Commitments and Contingencies to the accompanying Unaudited Consolidated Financial Statements of FOX under the heading “Contingencies” for a discussion of the Company’s legal proceedings.

ITEM 1A. RISK FACTORS

There have been no material changes to the risk factors described in the section titled “Risk Factors” in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, ~~2022,~~2023, as filed with the Securities and Exchange Commission on August ~~12, 2022.~~11, 2023, except as set forth below:

The loss of key personnel, including talent, could disrupt the management or operations of the Company’s business and adversely affect its revenues.

The Company's business depends on the continued efforts and abilities of key personnel, including news, sports and entertainment personalities. The loss of such personnel could disrupt the management or operations of the Company’s business and adversely affect its revenues. The Company employs or independently contracts with several news, sports and entertainment personalities who are featured on programming the Company offers. News, sports and entertainment personalities sometimes have a significant impact on the ranking of a cable network or station and its ability to attract and retain an audience and sell advertising. There can be no assurance that our news, sports and entertainment personalities will remain with us or retain their current appeal, that the costs associated with retaining current talent and hiring new talent will be favorable or acceptable to us, or that new talent will be as successful as their predecessors. Any of the foregoing could adversely affect the Company's business, financial condition or results of operations.

Labor disputes may disrupt our operations and adversely affect the Company’s business, financial condition or results of operations.

In a variety of the Company's businesses, the Company and its partners engage the services of writers, directors, actors, musicians and other creative talent, production crew members, trade employees and others whose services are subject to collective bargaining agreements. Certain of these are industry-wide agreements, and the Company lacks practical influence with respect to the negotiation and terms of collective bargaining agreements. The writers guild (“WGA”), screen actors guild (“SAG-AFTRA”) and directors guild (“DGA”) collective bargaining agreements expired in 2023. The WGA members went on strike in May 2023 and the SAG-AFTRA members went on strike in July 2023. In June 2023, the DGA announced that it had reached a tentative agreement with the Association of Motion Picture and Television Producers (the “AMPTP”), which negotiates with the guilds on behalf of content producers. In September 2023, the WGA similarly announced that it had reached a tentative agreement with the AMPTP. When negotiations to renew collective bargaining agreements are not successful or become unproductive, strikes, work stoppages or lockouts have occurred, such as the WGA and SAG-AFTRA strikes in the Spring and Summer of 2023, and further strikes, work stoppages or lockouts could occur in the future. Such events have caused, and may continue to cause, delays in production and may lead to higher costs in connection with new collective bargaining agreements, which could reduce profit margins and could, over the long term, have an adverse effect on the Company's business, financial condition or results of operations.

In addition, our broadcast television and cable networks have programming rights agreements of varying scope and duration with various sports leagues to broadcast and produce sports events, including certain college football and basketball, NFL and MLB games. Any labor disputes that occur in any sports league for which we have the rights to broadcast live games or events may preclude us from airing or otherwise distributing scheduled games or events, resulting in decreased revenues, which could adversely affect our business, financial condition or results of operations.

Certain of the Company’s directors and officers may have actual or potential conflicts of interest because of their equity ownership in News Corp or because they also serve as officers and/or on the board of directors of News Corp.

In June 2013, Twenty-First Century Fox, Inc. completed the separation of its businesses into two independent publicly traded companies by distributing to its shareholders shares of a new company called

News Corporation (“News Corp”). Certain of the Company’s directors and executive officers own shares of common stock of News Corp, and the individual holdings may be significant for some of these individuals compared to their total assets. In addition, certain of the Company’s officers and directors also serve as officers and/or as directors of News Corp. K. Rupert Murdoch, who currently serves as the Company’s Chair and News Corp’s Executive Chair, is stepping down from these roles effective as of each company’s annual shareholder meeting in mid-November 2023 and will be appointed Chairman Emeritus of each company. Our Executive Chair and Chief Executive Officer, Lachlan K. Murdoch, currently serves as News Corp’s Co-Chair and will become sole Chair of News Corp following its annual shareholder meeting. This ownership of or service to both companies may create, or may create the appearance of, conflicts of interest when these directors and officers are faced with decisions that could have different implications for News Corp and the Company. In addition to any other arrangements that the Company and News Corp may agree to implement, the Company and News Corp have agreed that officers and directors who serve at both companies will recuse themselves from decisions where conflicts arise due to their positions at both companies.

Our amended and restated by-laws acknowledge that our directors and officers, as well as certain of our stockholders, including K. Rupert Murdoch, certain members of his family and certain family trusts (so long as such persons continue to own, in the aggregate, 10% or more of the voting stock of each of News Corp and the Company), each of which we refer to as a covered stockholder, are or may become stockholders, directors, officers, employees or agents of News Corp and certain of its affiliates. Our amended and restated by-laws provide that any such overlapping person will not be liable to us, or to any of our stockholders, for breach of any fiduciary duty that would otherwise exist because such individual directs a corporate opportunity to News Corp instead of us. The provisions in our amended and restated by-laws could result in an overlapping person submitting any corporate opportunities to News Corp instead of us.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Below is a summary of the Company’s repurchases of its Class A Common Stock, par value $0.01 per share (the “Class A Common Stock”)~~, and Class B Common Stock, par value $0.01 per share (the “Class B Common Stock” and, together with the Class A Common Stock, the “Common Stock”),~~ during the three months ended ~~March 31,~~September 30, 2023:

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)
January 1, 2023 - January 31, 2023
Class A Common Stock 1,089,696 $ 32.12
Class B Common Stock 504,020 30.11
February 1, 2023 - February 28, 2023
Class A Common Stock(d)
23,962,014 43.92
Class B Common Stock 696,000 33.42
March 1, 2023 - March 31, 2023
Class A Common Stock 2,429,570 33.72
Class B Common Stock 1,367,329 31.01
Total
Class A Common Stock(d)
27,481,280 42.55
Class B Common Stock 2,567,349 31.48
30,048,629 $ 2,650


	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)
July 1, 2023 - July 31, 2023	1,487,736	$	33.61
August 1, 2023 - August 31, 2023(d)	10,481,608	8.62
September 1, 2023 - September 30, 2023	3,468,283	31.62
Total(d)	15,437,627	16.19		$	2,150


(a)			The Company has not made any purchases of Class A Common Stock or Class B Common Stock, par value $0.01 per share (the “Class B Common Stock” and, together with the Class A Common Stock, the “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 ~~(“the Board”) previously~~has authorized a stock repurchase program, under which the Company can repurchase ~~$4 billion of Common Stock. In February 2023, the Board authorized incremental stock repurchases of an additional $3~~$7 billion of Common Stock. The program has no time limit and may be modified, suspended or discontinued at any time. ~~With this increase, the Company’s total stock repurchase authorization is now $7 billion.~~


(d)			In February 2023, in connection with the stock repurchase program, the Company entered into an accelerated share repurchase (“ASR”) agreement in which the Company paid a third-party financial institution $1 billion and received an initial delivery of approximately 22.5 million shares of Class A Common Stock, representing 80% of the shares expected to be repurchased under the ASR agreement, at a price of $35.54 per share. Upon settlement of the ASR agreement in August 2023, the Company received a final delivery of approximately 7.8 million shares of Class A Common Stock. The final number of shares purchased under the ASR agreement was determined using a price of $33.03 per share (the volume-weighted average market price of the Class A Common Stock on the Nasdaq Global Select Market during the term of the ASR agreement less a discount) (See Note 6—Stockholders’ Equity to the accompanying Unaudited Consolidated Financial Statements of FOX under the heading “Stock Repurchase Program”).

In total, the Company repurchased approximately 4615.4 million shares of Class A Common Stock for approximately ~~$1.8 billion~~$250 million during the ~~nine~~three months ended ~~March 31,~~September 30, 2023.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

Not ~~applicable~~applicable.

ITEM 4. MINE SAFETY DISCLOSURES

Not ~~applicable~~applicable.

ITEM 5. OTHER INFORMATION

Not ~~applicable~~applicable.

ITEM 6. EXHIBITS

(a) Exhibits.


~~3.1~~10.1						~~Amended~~Form of A mended and Restated By-laws of Fox Corporation (incorporated herein by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K dated February 13, 2023 and filed with the Securities and Exchange Commission on February 13, 2023)Indemnification Agree ment .*

31.1						Chief Executive Officer Certification required by Rules 13a-14 and 15d-14 under the Securities Exchange Act of 1934, as amended.*

31.2						Chief Financial Officer Certification required by Rules 13a-14 and 15d-14 under the Securities Exchange Act of 1934, as amended.*

32.1						Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of Sarbanes Oxley Act of 2002.**

101						The following financial information from the Company’s Quarterly Report on Form 10-Q for the quarter ended ~~March 31,~~September 30, 2023 formatted in Inline XBRL (eXtensible Business Reporting Language): (i) Unaudited Consolidated Statements of Operations for the three ~~and nine~~ months ended ~~March 31,~~September 30, 2023 and 2022; (ii) Unaudited Consolidated Statements of Comprehensive ~~(Loss)~~ Income for the three ~~and nine~~ months ended ~~March 31,~~September 30, 2023 and 2022; (iii) Consolidated Balance Sheets as of ~~March 31,~~September 30, 2023 (unaudited) and June 30, ~~2022~~2023 (audited); (iv) Unaudited Consolidated Statements of Cash Flows for the ~~nine~~three months ended ~~March 31,~~September 30, 2023 and 2022; (v) Unaudited Consolidated Statements of Equity for the three ~~and nine~~ months ended ~~March 31,~~September 30, 2023 and 2022; and (vi) Notes to the Unaudited Consolidated Financial Statements.*

104						Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101).

Filed herewith.

~~This exhibit is a management contract or compensatory plan or arrangement~~

Furnished herewith.

3330

SIGNATURE

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


	Fox Corporation (Registrant)

	By:	/s/ Steven Tomsic
		Steven Tomsic
		Chief Financial Officer

Date: ~~May 9,~~November 2, 2023

3431


	Fair value measurements
	As of June 30, 2022
	Total		Level 1			Level 2		Level 3
	(in millions)
Investments in equity securities	$	435	$	435	(a)	$	—	$	—
Redeemable noncontrolling interests	(188)		—			—		(188)		(b)
Total	$	247	$	435		$	—	$	(188)