NEW YORK, Aug. 7, 2019 /PRNewswire/ -- Fox Corporation
(Nasdaq: FOXA, FOX; "FOX" or the "Company") today reported
financial results for the three months and twelve months ended
June 30, 2019.
Commenting on the results, Executive Chairman and Chief
Executive Officer Lachlan Murdoch
said:
"The strategic rationale for the
formation of Fox Corporation, with our unique set of assets, is
underscored by our strong Fiscal 2019 operational and financial
results that include top line growth across our operating segments
and key revenue categories. We are strongly positioned as we enter
our first full fiscal year, during which we will broadcast Super
Bowl LIV, become the home of WWE's Smackdown LIVE, and
further our digital growth, all while continuing to deliver the
compelling news, sports and entertainment content that our
audiences have come to expect from FOX."
1
|
On March 19, 2019,
the Company became a standalone publicly traded company through the
pro rata distribution by Twenty-First Century Fox, Inc. (now known
as TFCF Corporation) ("21CF") of all of the issued and outstanding
common stock of FOX to 21CF stockholders (other than holders that
were subsidiaries of 21CF) (the "Distribution"). See page 6 for
additional detail.
|
2
|
Total segment
EBITDA may be considered a non-GAAP financial measure. See Note 1
on page 11 for a description of total segment EBITDA and a
reconciliation of income before income tax (expense) benefit to
total segment EBITDA.
|
FOURTH QUARTER COMPANY RESULTS
The Company reported total quarterly revenues of $2.51 billion, a 5% increase from the
$2.39 billion of revenues in the
prior year quarter. The increase in revenues was primarily
attributable to affiliate revenue growth of 7%, driven by an 18%
increase at the Television segment and a 78% increase in other
revenues, primarily due to higher digital content licensing
revenues at the Television segment. This revenue growth was
partially offset by a 6% decline in advertising revenues as there
were fewer FIFA World Cup matches and lower cyclical political
revenues at the Television segment in the current quarter as
compared with the prior year quarter.
Quarterly income before income tax expense increased to
$656 million from the $593 million in the prior year quarter, primarily
due to the revenue increases noted above, partially offset by an
increase in selling, general and administrative expenses. The
increase in selling, general and administrative expenses primarily
reflects higher costs related to FOX operating as a standalone
public company following the Distribution1 (the
"FOX standalone costs"), whereas the prior year quarter included an
allocation of 21CF overhead and shared services costs in accordance
with SEC rules (the "21CF cost allocations"). Quarterly total
segment operating income before depreciation and amortization
("EBITDA")2 of $709 million was 11% higher
than the prior year quarter as higher contributions at the
Television and Cable Network Programming segments were partially
offset by lower contributions from Other, Corporate and
Eliminations, primarily due to the impact of the FOX standalone
costs as compared to the 21CF cost allocations in the prior year
quarter.
Quarterly net income attributable to Fox Corporation
stockholders decreased to $454 million ($0.73 per share) compared with $471 million
($0.76 per share) in the prior year
quarter as the increase in revenues was more than offset by the
impact of the FOX standalone costs as compared to the 21CF cost
allocations in the prior year quarter and higher income tax and net
interest expenses. Adjusted quarterly earnings per share
attributable to Fox Corporation stockholders ("Adjusted
EPS")3 was $0.62, 7%
lower than Adjusted EPS of $0.67 in the prior year quarter due to a
decrease in adjusted net income, primarily the result of higher net
interest expense, partially offset by higher revenues.
FULL YEAR COMPANY RESULTS
The Company reported total full year revenues of $11.39 billion, a 12% increase from the
$10.15 billion of revenues in the
prior year. The increase in revenues was attributable to
double-digit gains in all key revenue categories with growth
principally driven by the Television segment.
Full year income before income tax expense increased to
$2.22 billion from the $2.17 billion in the prior year, primarily due to
the revenue increases noted above. Full year total segment
EBITDA of $2.68 billion was 8%
higher than the prior year as higher contributions at the Cable
Network Programming and Television segments were partially offset
by lower contributions from Other, Corporate and Eliminations,
primarily due to the impact of the FOX standalone costs as compared
to the 21CF cost allocations in the prior year.
Full year net income attributable to Fox Corporation
stockholders decreased to $1.60 billion ($2.57 per share) compared with $2.19 billion ($3.52 per share) in the prior year as the
increase in revenues was more than offset by the impact of the FOX
standalone costs as compared to the 21CF cost allocations in the
prior year and higher income tax and net interest expenses.
The prior year results also included a provisional net tax benefit
of $607 million related to the
enactment of the Tax Cuts and Jobs Act. Adjusted EPS was
$2.63, 5% higher than Adjusted EPS of
$2.50 in the prior year.
3
|
Excludes net
income effects of Impairment and restructuring charges, adjustments
to Equity (losses) earnings of affiliates, Other, net, Tax reform
remeasurement benefit and tax provision adjustments. See Note
2 on page 12 for a description of adjusted net income and Adjusted
EPS, which are considered non-GAAP financial measures, and a
reconciliation of reported net income and earnings per share
attributable to Fox Corporation stockholders to adjusted net income
and Adjusted EPS.
|
REVIEW OF
OPERATING RESULTS
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
June
30,
|
|
|
Twelve Months
Ended
June
30,
|
|
|
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2018
|
|
|
|
$
Millions
|
|
Revenues by
Component:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Affiliate
fee
|
|
$
|
1,410
|
|
|
$
|
1,313
|
|
|
$
|
5,512
|
|
|
$
|
4,923
|
|
Advertising
|
|
|
918
|
|
|
|
977
|
|
|
|
5,056
|
|
|
|
4,598
|
|
Other
|
|
|
185
|
|
|
|
104
|
|
|
|
821
|
|
|
|
632
|
|
Total
revenues
|
|
$
|
2,513
|
|
|
$
|
2,394
|
|
|
$
|
11,389
|
|
|
$
|
10,153
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cable Network
Programming
|
|
$
|
1,299
|
|
|
$
|
1,271
|
|
|
$
|
5,381
|
|
|
$
|
5,049
|
|
Television
|
|
|
1,183
|
|
|
|
1,124
|
|
|
|
5,979
|
|
|
|
5,106
|
|
Other, Corporate and
Eliminations
|
|
|
31
|
|
|
|
(1)
|
|
|
|
29
|
|
|
|
(2)
|
|
Total
revenues
|
|
$
|
2,513
|
|
|
$
|
2,394
|
|
|
$
|
11,389
|
|
|
$
|
10,153
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment
EBITDA:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cable Network
Programming
|
|
$
|
602
|
|
|
$
|
578
|
|
|
$
|
2,495
|
|
|
$
|
2,308
|
|
Television
|
|
|
214
|
|
|
|
111
|
|
|
|
470
|
|
|
|
379
|
|
Other, Corporate and
Eliminations
|
|
|
(107)
|
|
|
|
(49)
|
|
|
|
(284)
|
|
|
|
(195)
|
|
Total Segment
EBITDA4
|
|
$
|
709
|
|
|
$
|
640
|
|
|
$
|
2,681
|
|
|
$
|
2,492
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cable Network
Programming
|
|
$
|
13
|
|
|
$
|
10
|
|
|
$
|
48
|
|
|
$
|
38
|
|
Television
|
|
|
16
|
|
|
|
30
|
|
|
|
96
|
|
|
|
112
|
|
Other, Corporate and
Eliminations
|
|
|
31
|
|
|
|
5
|
|
|
|
68
|
|
|
|
21
|
|
Total depreciation
and amortization
|
|
$
|
60
|
|
|
$
|
45
|
|
|
$
|
212
|
|
|
$
|
171
|
|
|
|
_____________________
|
4
|
Total segment
EBITDA may be considered a non-GAAP financial measure. See
Note 1 on page 11 for a description of total segment EBITDA and for
a reconciliation of income before income tax (expense) benefit to
total segment EBITDA.
|
CABLE NETWORK
PROGRAMMING
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
June
30,
|
|
|
Twelve Months
Ended
June
30,
|
|
|
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2018
|
|
|
|
$
Millions
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Affiliate
fee
|
|
$
|
959
|
|
|
$
|
932
|
|
|
$
|
3,804
|
|
|
$
|
3,541
|
|
Advertising
|
|
|
291
|
|
|
|
295
|
|
|
|
1,184
|
|
|
|
1,120
|
|
Other
|
|
|
49
|
|
|
|
44
|
|
|
|
393
|
|
|
|
388
|
|
Total
revenues
|
|
|
1,299
|
|
|
|
1,271
|
|
|
|
5,381
|
|
|
|
5,049
|
|
Operating
expenses
|
|
|
(581)
|
|
|
|
(598)
|
|
|
|
(2,477)
|
|
|
|
(2,394)
|
|
Selling, general and
administrative
|
|
|
(125)
|
|
|
|
(105)
|
|
|
|
(447)
|
|
|
|
(400)
|
|
Amortization of cable
distribution investments
|
|
|
9
|
|
|
|
10
|
|
|
|
38
|
|
|
|
53
|
|
Segment
EBITDA
|
|
$
|
602
|
|
|
$
|
578
|
|
|
$
|
2,495
|
|
|
$
|
2,308
|
|
Three Months Ended June 30,
2019
Cable Network Programming reported quarterly segment revenues of
$1.30 billion, an increase of
$28 million or 2% from the amount in
the prior year quarter, primarily due to a $27 million or 3% increase in affiliate revenues
led by contractual price increases across all networks, partially
offset by net subscriber declines. Advertising revenues
decreased $4 million or 1%, primarily
reflecting lower contributions from FIFA Women's World Cup
programming in the current quarter compared with the contributions
from the FIFA Men's World Cup in the prior year quarter, partially
offset by higher digital advertising sales at FOX News.
Cable Network Programming reported quarterly segment EBITDA of
$602 million, an increase of
$24 million or 4% from the amount in
the prior year quarter due to the revenue increases noted above.
Expenses were in line with the prior year quarter as lower
operating expenses were essentially offset by the FOX standalone
costs. Lower operating expenses were primarily associated
with reduced sports programming rights amortization and production
costs associated with the FIFA Women's World Cup in the current
quarter compared with the FIFA Men's World Cup in the prior year
quarter, along with the absence of Ultimate Fighting Championship
content in the current quarter.
Twelve Months Ended June 30,
2019
Cable Network Programming reported full year segment revenues of
$5.38 billion, an increase of
$332 million or 7% from the amount in
the prior year, primarily due to increases in affiliate and
advertising revenues. Affiliate revenues increased
$263 million or 7% led by contractual
price increases across all networks, partially offset by net
subscriber declines. Advertising revenues increased
$64 million or 6%, primarily
reflecting higher digital advertising sales at FOX News and
stronger daily studio programming ratings at FS1, partially offset
by the broadcast of two fewer MLB League Divisional Series playoff
games in the current year.
Cable Network Programming reported full year segment EBITDA of
$2.50 billion, an increase of
$187 million or 8% from the amount in
the prior year due to the revenue increases noted above, partially
offset by higher operating expenses and the FOX standalone
costs. The increase in operating expenses primarily reflects
higher sports rights programming amortization led by college
sports, NASCAR, the FIFA World Cup and the addition of Premier
Boxing Champions content in the current year, partially offset by
the absence of Ultimate Fighting Championship content in the second
half of the year. Also contributing to the increase in
operating expenses were higher digital costs at FOX News.
TELEVISION
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
June
30,
|
|
|
Twelve Months
Ended
June
30,
|
|
|
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2018
|
|
|
|
$
Millions
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Advertising
|
|
$
|
627
|
|
|
$
|
682
|
|
|
$
|
3,872
|
|
|
$
|
3,478
|
|
Affiliate
fee
|
|
|
451
|
|
|
|
381
|
|
|
|
1,708
|
|
|
|
1,382
|
|
Other
|
|
|
105
|
|
|
|
61
|
|
|
|
399
|
|
|
|
246
|
|
Total
revenues
|
|
|
1,183
|
|
|
|
1,124
|
|
|
|
5,979
|
|
|
|
5,106
|
|
Operating
expenses
|
|
|
(772)
|
|
|
|
(854)
|
|
|
|
(4,847)
|
|
|
|
(4,113)
|
|
Selling, general and
administrative
|
|
|
(197)
|
|
|
|
(159)
|
|
|
|
(662)
|
|
|
|
(614)
|
|
Segment
EBITDA
|
|
$
|
214
|
|
|
$
|
111
|
|
|
$
|
470
|
|
|
$
|
379
|
|
Three Months Ended June 30,
2019
Television reported quarterly segment revenues of $1.18 billion, an increase of $59 million or 5% from the amount in the prior
year quarter due to increases in affiliate and other revenues,
partially offset by a decline in advertising revenues.
Affiliate revenues increased $70
million or 18% led by an increase in programming fees from
third-party FOX affiliates. Other revenues increased
$44 million or 72%, primarily due to
higher digital content licensing revenues. Advertising
revenues decreased $55 million or 8%,
primarily due to fewer FIFA World Cup matches and lower cyclical
political advertising revenues in the current quarter compared with
the prior year quarter.
Television reported quarterly segment EBITDA of $214 million, an increase of $103 million or 93% from the amount in the prior
year quarter due to the revenue increases noted above and lower
expenses. The decrease in expenses reflects lower operating
expenses, partially offset by the FOX standalone costs. Lower
operating expenses primarily reflect lower programming
amortization, the result of fewer hours of original entertainment
programming and the mix of sports rights and related production
costs in the current quarter compared with the prior year quarter,
including the impact of fewer FIFA World Cup matches and NASCAR
races at the FOX Network in the current quarter.
Twelve Months Ended June 30,
2019
Television reported full year segment revenues of $5.98 billion, an increase of $873 million or 17% from the amount in the prior
year. Advertising revenues increased $394 million or 11%, primarily due to the
addition of Thursday Night Football and the broadcast of one
additional NFL Divisional Playoff game, record cyclical political
advertising revenues at the FOX Television Stations and additional
FIFA World Cup matches in the current year. The increase in
advertising revenues was partially offset by the broadcast of two
fewer MLB World Series games in the current year compared with the
prior year. Affiliate revenues increased $326 million or 24% led by an increase in
programming fees from third-party FOX affiliates. Other
revenues increased $153 million or
62%, primarily due to higher digital content licensing
revenues.
Television reported full year segment EBITDA of $470 million, an increase of $91 million or 24% from the amount in the prior
year due to the revenue increases noted above, partially offset by
higher operating expenses and the FOX standalone costs. The
increase in operating expenses primarily reflects higher sports
programming rights amortization and production costs associated
with Thursday Night Football and one additional NFL
Divisional Playoff game, as well as additional FIFA World Cup
matches, partially offset by lower entertainment programming
amortization and marketing expenses due to fewer hours of original
programming in the current year. Additionally, the
recognition of an approximately $55
million write-down of certain entertainment and syndicated
programming contributed to the increase in operating expenses.
DIVIDEND
The Company has declared a dividend of $0.23 per Class A and Class B share. This
dividend is payable on October 2,
2019 with a record date for determining dividend
entitlements of September 4,
2019.
DISTRIBUTION
On March 19, 2019, the Company
became a standalone publicly traded company through the pro rata
distribution by Twenty-First Century Fox, Inc. (now known as TFCF
Corporation) ("21CF") of all of the issued and outstanding common
stock of FOX to 21CF stockholders (other than holders that were
subsidiaries of 21CF) (the "Distribution") in accordance with the
Amended and Restated Distribution Agreement and Plan of Merger,
dated as of June 20, 2018, by and
between 21CF and 21CF Distribution Merger Sub, Inc. Following the
Distribution, approximately 354 million and approximately 266
million shares of the Company's class A common stock and class B
common stock, respectively, began trading independently on The
Nasdaq Global Select Market. In connection with the Distribution,
the Company entered into the Separation and Distribution Agreement,
dated as of March 19, 2019 with 21CF,
which effected the internal restructuring (the "Separation")
whereby 21CF transferred to FOX a portfolio of 21CF's news, sports
and broadcast businesses, including FOX News Media (consisting of
FOX News and FOX Business), the FOX Network, FOX Sports, FOX
Television Stations, and sports cable networks FS1, FS2, FOX
Deportes and Big Ten Network, and certain other assets, and FOX
assumed from 21CF the liabilities associated with such businesses
and certain other liabilities. The Separation and the
Distribution were effected as part of a series of transactions
contemplated by the Amended and Restated Merger Agreement and Plan
of Merger, dated as of June 20, 2018,
by and among 21CF, The Walt Disney Company ("Disney"), and certain
subsidiaries of Disney, pursuant to which, among other things, 21CF
became a wholly-owned subsidiary of Disney.
BASIS OF PRESENTATION
The Consolidated and Combined Financial Statements of the
Company have been prepared in accordance with United States ("U.S.") generally accepted
accounting principles ("GAAP").
Prior to the Distribution, the Company's Combined Financial
Statements were prepared on a standalone basis, derived from the
consolidated financial statements and accounting records of
21CF. The Company's financial statements as of June 30, 2018 and for the three and twelve months
ended June 30, 2018 are presented on
a combined basis as the Company was not a separate consolidated
group prior to the Distribution. These financial statements
reflect the combined historical results of operations, financial
position and cash flows of 21CF's domestic news, national sports
and broadcast businesses and certain other assets and liabilities
associated with such businesses. The Company became a
separate consolidated group as a result of the Distribution, and
the Company's financial statements as of June 30, 2019 and for the three months and twelve
months ended June 30, 2019 are
presented on a consolidated basis.
The Consolidated and Combined Statements of Operations include
allocations for certain support functions that were provided on a
centralized basis within 21CF prior to the Distribution and not
recorded at the business unit level, such as certain expenses
related to finance, legal, insurance, information technology,
compliance and human resources management activities, among others.
21CF did not routinely allocate these costs to any of its business
units. These expenses have been allocated to FOX on the basis
of direct usage when identifiable, with the remainder allocated on
a pro rata basis of combined revenues, headcount or other relevant
measures. Management believes the assumptions underlying the
Consolidated and Combined Financial Statements, including the
assumptions regarding allocating general corporate expenses from
21CF, are reasonable. Nevertheless, the Consolidated and Combined
Financial Statements may not include all of the actual expenses
that would have been incurred by FOX and may not reflect FOX's
consolidated results of operations, financial position and cash
flows had it been a standalone company during the entirety of the
periods presented. Actual costs that would have been incurred
if FOX had been a standalone company would depend on multiple
factors, including organizational structure and strategic decisions
made in various areas, including information technology and
infrastructure. The Company estimates that the total recurring
costs beyond the amounts allocated to FOX in the Consolidated and
Combined Financial Statements through the Distribution, in
accordance with SEC guidance, could range between $225 million and $250
million on an annual basis, which costs include the impact
of the initial grant of restricted stock units and stock options
under the Fox Corporation 2019 Shareholder Alignment Plan.
These Consolidated and Combined Statements of Operations include a
corporate allocation of approximately $90
million for the three months ended June 30, 2018, and of approximately $270 million and $310
million for the twelve months ended June 30, 2019 and 2018, respectively, in Selling,
general and administrative expenses.
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING
STATEMENTS
This press release contains "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of
1995. Words such as "may," "will," "should," "likely,"
"anticipates," "expects," "intends," "plans," "projects,"
"believes," "estimates," "outlook" and similar expressions are used
to identify these forward-looking statements. These
statements are based on management's current expectations and
beliefs and are subject to uncertainty and changes in
circumstances. Actual results may vary materially from those
expressed or implied by the statements in this press release due to
changes in economic, business, competitive, technological,
strategic and/or regulatory factors and other factors affecting the
operation of the Company's businesses. More detailed
information about these factors is contained in the documents the
Company has filed with or furnished to the Securities and Exchange
Commission (the "SEC"), including the Company's Registration
Statement on Form 10, filed with the SEC and declared effective by
the SEC on February 5, 2019, and
subsequent Quarterly Reports on Form 10-Q.
Statements in this press release speak only as of the date they
were made, and the Company undertakes no duty to update or release
any revisions to any forward-looking statement made in this press
release or to report any events or circumstances after the date of
this press release or to reflect the occurrence of unanticipated
events or to conform such statements to actual results or changes
in the Company's expectations, except as required by law.
To access a copy of this press release through the Internet,
access Fox Corporation's corporate website located at
http://www.foxcorporation.com.
CONSOLIDATED AND
COMBINED STATEMENTS OF OPERATIONS
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
June
30,
|
|
|
Twelve Months
Ended
June
30,
|
|
|
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2018
|
|
|
|
$ Millions, except
per share amounts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
2,513
|
|
|
$
|
2,394
|
|
|
$
|
11,389
|
|
|
$
|
10,153
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses
|
|
|
(1,358)
|
|
|
|
(1,451)
|
|
|
|
(7,327)
|
|
|
|
(6,505)
|
|
Selling, general and
administrative
|
|
|
(455)
|
|
|
|
(313)
|
|
|
|
(1,419)
|
|
|
|
(1,209)
|
|
Depreciation and
amortization
|
|
|
(60)
|
|
|
|
(45)
|
|
|
|
(212)
|
|
|
|
(171)
|
|
Impairment and
restructuring charges
|
|
|
(12)
|
|
|
|
(5)
|
|
|
|
(26)
|
|
|
|
(16)
|
|
Interest
expense
|
|
|
(91)
|
|
|
|
(23)
|
|
|
|
(203)
|
|
|
|
(43)
|
|
Interest
income
|
|
|
22
|
|
|
|
-
|
|
|
|
41
|
|
|
|
-
|
|
Other, net
|
|
|
97
|
|
|
|
36
|
|
|
|
(19)
|
|
|
|
(39)
|
|
Income before
income tax (expense) benefit
|
|
|
656
|
|
|
|
593
|
|
|
|
2,224
|
|
|
|
2,170
|
|
Income tax (expense)
benefit
|
|
|
(191)
|
|
|
|
(113)
|
|
|
|
(581)
|
|
|
|
58
|
|
Net
income
|
|
|
465
|
|
|
|
480
|
|
|
|
1,643
|
|
|
|
2,228
|
|
Less: Net income
attributable to noncontrolling interests
|
|
|
(11)
|
|
|
|
(9)
|
|
|
|
(48)
|
|
|
|
(41)
|
|
Net income
attributable to Fox Corporation stockholders
|
|
$
|
454
|
|
|
$
|
471
|
|
|
$
|
1,595
|
|
|
$
|
2,187
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares:
|
|
|
624
|
|
|
|
621
|
|
|
|
621
|
|
|
|
621
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to Fox Corporation stockholders per share:
|
|
$
|
0.73
|
|
|
$
|
0.76
|
|
|
$
|
2.57
|
|
|
$
|
3.52
|
|
CONSOLIDATED AND
COMBINED BALANCE SHEETS
|
|
|
|
|
|
|
|
|
|
June
30,
2019
|
|
|
June
30,
2018
|
|
Assets:
|
|
$
Millions
|
|
Current
assets:
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
3,234
|
|
|
$
|
2,500
|
|
Receivables,
net
|
|
|
1,967
|
|
|
|
1,833
|
|
Inventories,
net
|
|
|
1,129
|
|
|
|
1,180
|
|
Other
|
|
|
148
|
|
|
|
67
|
|
Total current
assets
|
|
|
6,478
|
|
|
|
5,580
|
|
|
|
|
|
|
|
|
|
|
Non-current
assets:
|
|
|
|
|
|
|
|
|
Property, plant and
equipment, net
|
|
|
1,313
|
|
|
|
1,169
|
|
Intangible assets,
net
|
|
|
2,851
|
|
|
|
2,866
|
|
Goodwill
|
|
|
2,691
|
|
|
|
2,747
|
|
Deferred tax
assets
|
|
|
4,651
|
|
|
|
-
|
|
Other non-current
assets
|
|
|
1,525
|
|
|
|
759
|
|
Total
assets
|
|
$
|
19,509
|
|
|
$
|
13,121
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Equity:
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
|
Accounts payable,
accrued expenses and other current liabilities
|
|
$
|
1,712
|
|
|
$
|
1,759
|
|
Total current
liabilities
|
|
|
1,712
|
|
|
|
1,759
|
|
|
|
|
|
|
|
|
|
|
Non-current
liabilities:
|
|
|
|
|
|
|
|
|
Borrowings
|
|
|
6,751
|
|
|
|
-
|
|
Other
liabilities
|
|
|
899
|
|
|
|
422
|
|
Deferred income
taxes
|
|
|
-
|
|
|
|
1,071
|
|
Redeemable
noncontrolling interests
|
|
|
189
|
|
|
|
275
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
|
Equity:
|
|
|
|
|
|
|
|
|
Class A common stock,
$0.01 par value
|
|
|
4
|
|
|
|
-
|
|
Class B common stock,
$0.01 par value
|
|
|
3
|
|
|
|
-
|
|
Twenty-First Century
Fox, Inc. investment
|
|
|
-
|
|
|
|
9,513
|
|
Additional paid-in
capital
|
|
|
9,891
|
|
|
|
-
|
|
Retained
earnings
|
|
|
357
|
|
|
|
-
|
|
Accumulated other
comprehensive (loss) income
|
|
|
(308)
|
|
|
|
81
|
|
Total Fox Corporation stockholders' equity
|
|
|
9,947
|
|
|
|
9,594
|
|
Noncontrolling
interests
|
|
|
11
|
|
|
|
-
|
|
Total equity
|
|
|
9,958
|
|
|
|
9,594
|
|
Total liabilities
and equity
|
|
$
|
19,509
|
|
|
$
|
13,121
|
|
CONSOLIDATED AND
COMBINED STATEMENTS OF CASH FLOWS
|
|
|
|
|
|
|
Twelve Months
Ended
June
30,
|
|
|
|
2019
|
|
|
2018
|
|
|
|
$ Millions
|
|
Operating
Activities:
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
1,643
|
|
|
$
|
2,228
|
|
Adjustments to
reconcile net income to cash provided by operating
activities
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
212
|
|
|
|
171
|
|
Amortization of cable
distribution investments
|
|
|
38
|
|
|
|
53
|
|
Impairment and
restructuring charges
|
|
|
26
|
|
|
|
16
|
|
Equity-based
compensation
|
|
|
36
|
|
|
|
-
|
|
Other, net
|
|
|
19
|
|
|
|
39
|
|
Deferred income
taxes
|
|
|
386
|
|
|
|
(603)
|
|
Change in operating
assets and liabilities, net of acquisitions and
dispositions
|
|
|
|
|
|
|
|
|
Receivables and other
assets
|
|
|
(166)
|
|
|
|
(166)
|
|
Inventories net of
program rights payable
|
|
|
197
|
|
|
|
(228)
|
|
Accounts payable and
other liabilities
|
|
|
133
|
|
|
|
(193)
|
|
Net cash provided
by operating activities
|
|
|
2,524
|
|
|
|
1,317
|
|
|
|
|
|
|
|
|
|
|
Investing
Activities:
|
|
|
|
|
|
|
|
|
Property, plant and
equipment
|
|
|
(235)
|
|
|
|
(215)
|
|
Proceeds from the
relinquishment of spectrum
|
|
|
-
|
|
|
|
354
|
|
Purchase of
investments
|
|
|
(338)
|
|
|
|
-
|
|
Other investing
activities, net
|
|
|
(64)
|
|
|
|
(11)
|
|
Net cash (used in)
provided by investing activities
|
|
|
(637)
|
|
|
|
128
|
|
|
|
|
|
|
|
|
|
|
Financing
activities:
|
|
|
|
|
|
|
|
|
Borrowings
|
|
|
6,750
|
|
|
|
-
|
|
Net transfers (to)
from Twenty-First Century Fox, Inc.
|
|
|
(1,233)
|
|
|
|
1,113
|
|
Net dividend paid to
Twenty-First Century Fox, Inc.
|
|
|
(6,500)
|
|
|
|
-
|
|
Dividends paid and
distributions
|
|
|
(188)
|
|
|
|
(41)
|
|
Other financing
activities, net
|
|
|
18
|
|
|
|
(36)
|
|
Net cash (used in)
provided by financing activities
|
|
|
(1,153)
|
|
|
|
1,036
|
|
|
|
|
|
|
|
|
|
|
Net increase in cash
and cash equivalents
|
|
|
734
|
|
|
|
2,481
|
|
Cash and cash
equivalents, beginning of year
|
|
|
2,500
|
|
|
|
19
|
|
Cash and cash
equivalents, end of year
|
|
$
|
3,234
|
|
|
$
|
2,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOTE 1 – TOTAL SEGMENT OPERATING INCOME BEFORE DEPRECIATION
AND AMORTIZATION
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. Beginning
with the announcement of the Company's financial results for the
third quarter of fiscal 2019, the Company has renamed as "Segment
EBITDA" the measure that it previously referred to as "Segment
OIBDA." The definition of this measure has not changed: 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, Interest income, Other, net and Income
tax (expense) benefit. 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.
Management believes that information about Total Segment EBITDA
assists all users of the Company's Consolidated and Combined
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. Total Segment 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 Segment EBITDA and Total Segment EBITDA, may not
be indicative of future results (as operating performance is highly
contingent on many factors, including customer tastes and
preferences).
Total Segment EBITDA may be 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 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. Total
Segment EBITDA may not be comparable to similarly titled measures
reported by other companies.
The following table reconciles Income before income tax
(expense) benefit to total Segment EBITDA:
|
|
Three Months
Ended
June
30,
|
|
|
Twelve Months
Ended
June
30,
|
|
|
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2018
|
|
|
|
$
Millions
|
|
Income before
income tax (expense) benefit
|
|
$
|
656
|
|
|
$
|
593
|
|
|
$
|
2,224
|
|
|
$
|
2,170
|
|
Add:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of cable
distribution investments
|
|
|
9
|
|
|
|
10
|
|
|
|
38
|
|
|
|
53
|
|
Depreciation and
amortization
|
|
|
60
|
|
|
|
45
|
|
|
|
212
|
|
|
|
171
|
|
Impairment and
restructuring charges
|
|
|
12
|
|
|
|
5
|
|
|
|
26
|
|
|
|
16
|
|
Interest
expense
|
|
|
91
|
|
|
|
23
|
|
|
|
203
|
|
|
|
43
|
|
Interest
income
|
|
|
(22)
|
|
|
|
-
|
|
|
|
(41)
|
|
|
|
-
|
|
Other, net
|
|
|
(97)
|
|
|
|
(36)
|
|
|
|
19
|
|
|
|
39
|
|
Total Segment
EBITDA
|
|
$
|
709
|
|
|
$
|
640
|
|
|
$
|
2,681
|
|
|
$
|
2,492
|
|
NOTE 2 – ADJUSTED NET INCOME AND ADJUSTED EPS
The Company uses net income and earnings per share ("EPS")
attributable to Fox Corporation stockholders excluding net income
effects of Impairment and restructuring charges, adjustments in
Equity (losses) earnings of affiliates, Other, net, Tax reform
remeasurement benefit, and Tax provision adjustments ("Adjusted Net
Income" and "Adjusted EPS" respectively) to evaluate the
performance of the Company's operations exclusive of certain items
that impact the comparability of results from period to
period.
Adjusted Net Income and Adjusted EPS may not be comparable to
similarly titled measures reported by other companies. Adjusted Net
Income and Adjusted EPS are not measures of performance under
generally accepted accounting principles and should be considered
in addition to, and not as substitutes for, net income attributable
to Fox Corporation stockholders and EPS as reported in accordance
with GAAP. However, management uses these measures in comparing the
Company's historical performance and believes that they provide
meaningful and comparable information to management, investors and
equity analysts to assist in their analysis of the Company's
performance relative to prior periods and the Company's
competitors.
The following table reconciles net income and EPS attributable
to Fox Corporation stockholders to Adjusted Net Income and Adjusted
EPS for the three months ended June 30,
2019 and 2018.
|
|
Three Months
Ended
|
|
|
|
June 30,
2019
|
|
|
June 30,
2018
|
|
|
|
Income
|
|
|
EPS
|
|
|
Income
|
|
|
EPS
|
|
|
|
$ Millions, except per share data
|
|
Net
Income
|
|
$
|
465
|
|
|
|
|
|
|
$
|
480
|
|
|
|
|
|
Less: Net income
attributable to
noncontrolling interests
|
|
|
(11)
|
|
|
|
|
|
|
|
(9)
|
|
|
|
|
|
Net Income
attributable to Fox
Corporation stockholders
|
|
$
|
454
|
|
|
$
|
0.73
|
|
|
$
|
471
|
|
|
$
|
0.76
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment and
restructuring charges
|
|
|
12
|
|
|
|
0.02
|
|
|
|
5
|
|
|
|
0.01
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other,
net5
|
|
|
(100)
|
|
|
|
(0.16)
|
|
|
|
(36)
|
|
|
|
(0.06)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax reform
remeasurement benefit
|
|
|
-
|
|
|
|
-
|
|
|
|
17
|
|
|
|
0.03
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax
provision
|
|
|
23
|
|
|
|
0.04
|
|
|
|
(41)
|
|
|
|
(0.07)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rounding
|
|
|
-
|
|
|
|
(0.01)
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As
adjusted
|
|
$
|
389
|
|
|
$
|
0.62
|
|
|
$
|
416
|
|
|
$
|
0.67
|
|
|
|
_______________________
|
5
|
Other, net
presented above excludes equity losses of
affiliates.
|
The following table reconciles net income and EPS attributable
to Fox Corporation stockholders to Adjusted Net Income and Adjusted
EPS for the twelve months ended June 30,
2019 and 2018.
|
|
Twelve Months
Ended
|
|
|
|
June 30,
2019
|
|
|
June 30,
2018
|
|
|
|
Income
|
|
|
EPS
|
|
|
Income
|
|
|
EPS
|
|
|
|
$ Millions, except per share data
|
|
Net
Income
|
|
$
|
1,643
|
|
|
|
|
|
|
$
|
2,228
|
|
|
|
|
|
Less: Net income
attributable to
noncontrolling interests
|
|
|
(48)
|
|
|
|
|
|
|
|
(41)
|
|
|
|
|
|
Net Income
attributable to Fox
Corporation stockholders
|
|
$
|
1,595
|
|
|
$
|
2.57
|
|
|
$
|
2,187
|
|
|
$
|
3.52
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment and
restructuring charges
|
|
|
26
|
|
|
|
0.04
|
|
|
|
16
|
|
|
|
0.03
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other,
net6
|
|
|
15
|
|
|
|
0.02
|
|
|
|
38
|
|
|
|
0.06
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax reform
remeasurement benefit
|
|
|
-
|
|
|
|
-
|
|
|
|
(607)
|
|
|
|
(0.98)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax
provision
|
|
|
(1)
|
|
|
|
-
|
|
|
|
(79)
|
|
|
|
(0.13)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As
adjusted
|
|
$
|
1,635
|
|
|
$
|
2.63
|
|
|
$
|
1,555
|
|
|
$
|
2.50
|
|
|
|
_______________________
|
6
|
Other, net
presented above excludes equity losses of
affiliates.
|
View original content to download
multimedia:http://www.prnewswire.com/news-releases/fox-reports-fourth-quarter-income-before-income-tax-expense-of-656-million-and-total-segment-operating-income-before-depreciation-and-amortization-of-709-million-an-increase-of-11-from-the-prior-year-quarter-on-revenue-growth-300898273.html
SOURCE Fox Corporation