NEW YORK, May 8, 2019 /PRNewswire/ -- Fox
Corporation (Nasdaq: FOXA, FOX; "FOX" or the "Company") today
reported financial results for the three months ended March 31, 2019.
The Company reported total quarterly revenues of $2.75 billion, a 12% increase from the
$2.46 billion of revenues in the
prior year quarter. The increase in revenues was primarily
attributable to affiliate and advertising revenue growth of 11% and
9%, respectively. This revenue growth was driven by a 29%
increase in retransmission consent revenues and by a 10% increase
in advertising revenues at the Television segment. The
Company also reported a 35% increase in other revenues primarily
due to higher digital content licensing revenues at the Television
segment.
Quarterly income before income tax expense increased to
$706 million from the $654 million in the prior year quarter primarily
due to higher revenues at the Cable Network Programming and
Television segments. Quarterly total segment operating income
before depreciation and amortization ("EBITDA")1 of
$766 million was 8% higher than the
prior year quarter driven by higher contributions at the Cable
Network Programming and Television segments.
Quarterly net income attributable to Fox Corporation
stockholders increased to $529
million ($0.85 per share)
compared to $457 million
($0.74 per share) in the prior year
quarter. Adjusted quarterly earnings per share attributable
to Fox Corporation stockholders2 was $0.76, 3% higher than the $0.74 adjusted result in the prior year
quarter.
Commenting on the results, Executive Chairman and Chief
Executive Officer Lachlan Murdoch
said:
"Our first quarterly results as
Fox Corporation demonstrate the strength of our businesses as we
delivered strong top line growth across our operating segments and
across our key revenue categories. FOX commences as a standalone
company with strong assets in unique positions to succeed in the
evolving media landscape. Our team is all pulling in the same
direction and achieving great things together."
1
|
Total segment
EBITDA may be considered a non-GAAP financial measure. See Note 1
for a description of total segment EBITDA and a reconciliation of
income before income tax (expense) benefit to total segment
EBITDA.
|
2
|
Excludes net
income effects of Impairment and restructuring charges, adjustments
to Equity (losses) earnings of affiliates, Other, net and tax
provision adjustments. See Note 2 for a description of
adjusted net income and adjusted earnings per share attributable to
Fox Corporation stockholders, 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 earnings per share attributable to
Fox Corporation stockholders.
|
REVIEW OF
OPERATING RESULTS
|
|
|
|
Three Months
Ended
March
31,
|
|
|
Nine Months
Ended
March
31,
|
|
|
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2018
|
|
|
|
$
Millions
|
|
Revenues by
Component:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Affiliate
fee
|
|
$
|
1,420
|
|
|
$
|
1,281
|
|
|
$
|
4,102
|
|
|
$
|
3,610
|
|
Advertising
|
|
|
1,088
|
|
|
|
1,001
|
|
|
|
4,138
|
|
|
|
3,621
|
|
Other
|
|
|
244
|
|
|
|
181
|
|
|
|
636
|
|
|
|
528
|
|
Total
revenues
|
|
$
|
2,752
|
|
|
$
|
2,463
|
|
|
$
|
8,876
|
|
|
$
|
7,759
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cable Network
Programming
|
|
$
|
1,383
|
|
|
$
|
1,325
|
|
|
$
|
4,082
|
|
|
$
|
3,778
|
|
Television
|
|
|
1,370
|
|
|
|
1,138
|
|
|
|
4,796
|
|
|
|
3,982
|
|
Other, Corporate and
Eliminations
|
|
|
(1)
|
|
|
|
-
|
|
|
|
(2)
|
|
|
|
(1)
|
|
Total
revenues
|
|
$
|
2,752
|
|
|
$
|
2,463
|
|
|
$
|
8,876
|
|
|
$
|
7,759
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment
EBITDA:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cable Network
Programming
|
|
$
|
741
|
|
|
$
|
692
|
|
|
$
|
1,893
|
|
|
$
|
1,730
|
|
Television
|
|
|
99
|
|
|
|
81
|
|
|
|
256
|
|
|
|
268
|
|
Other, Corporate and
Eliminations
|
|
|
(74)
|
|
|
|
(67)
|
|
|
|
(177)
|
|
|
|
(146)
|
|
Total Segment
EBITDA(a)
|
|
$
|
766
|
|
|
$
|
706
|
|
|
$
|
1,972
|
|
|
$
|
1,852
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cable Network
Programming
|
|
$
|
12
|
|
|
$
|
10
|
|
|
$
|
35
|
|
|
$
|
28
|
|
Television
|
|
|
28
|
|
|
|
27
|
|
|
|
80
|
|
|
|
82
|
|
Other, Corporate and
Eliminations
|
|
|
18
|
|
|
|
6
|
|
|
|
37
|
|
|
|
16
|
|
Total depreciation
and amortization
|
|
$
|
58
|
|
|
$
|
43
|
|
|
$
|
152
|
|
|
$
|
126
|
|
|
|
(a)
|
Total segment
EBITDA may be considered a non-GAAP financial measure. See Note 1
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
March
31,
|
|
|
Nine Months
Ended
March
31,
|
|
|
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2018
|
|
|
|
$
Millions
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Affiliate
fee
|
|
$
|
968
|
|
|
$
|
931
|
|
|
$
|
2,845
|
|
|
$
|
2,609
|
|
Advertising
|
|
|
276
|
|
|
|
266
|
|
|
|
893
|
|
|
|
825
|
|
Other
|
|
|
139
|
|
|
|
128
|
|
|
|
344
|
|
|
|
344
|
|
Total
revenues
|
|
|
1,383
|
|
|
|
1,325
|
|
|
|
4,082
|
|
|
|
3,778
|
|
Operating
expenses
|
|
|
(547)
|
|
|
|
(541)
|
|
|
|
(1,896)
|
|
|
|
(1,796)
|
|
Selling, general and
administrative
|
|
|
(105)
|
|
|
|
(103)
|
|
|
|
(322)
|
|
|
|
(295)
|
|
Amortization of cable
distribution investments
|
|
|
10
|
|
|
|
11
|
|
|
|
29
|
|
|
|
43
|
|
Segment
EBITDA
|
|
$
|
741
|
|
|
$
|
692
|
|
|
$
|
1,893
|
|
|
$
|
1,730
|
|
Cable Network Programming reported quarterly segment revenues of
$1.38 billion, an increase of
$58 million or 4% from the amount in
the prior year quarter primarily due to increases in affiliate and
advertising revenues. Affiliate revenues increased
$37 million or 4% primarily due to
contractual price increases at FOX News and FS1, partially offset
by linear subscriber declines. The moderating sequential
cable affiliate revenue growth rate, as compared to the cable
affiliate revenue growth rate in the first half of fiscal year
2019, reflects the lapping of contractual rate increases and
resets on existing affiliate agreements in the prior
year. Advertising revenues increased $10 million or 4% primarily reflecting higher
digital sales at FOX News and stronger ratings for daily studio
programming at FS1.
Cable Network Programming reported quarterly segment EBITDA of
$741 million, an increase of
$49 million or 7% 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 higher
costs primarily associated with digital initiatives at FOX News
were offset by lower linear sports programming rights amortization
at FOX Sports due to the absence of Ultimate Fighting Championship
and UEFA Champions League content in the current quarter.
TELEVISION
|
|
|
|
Three Months
Ended
March
31,
|
|
|
Nine Months
Ended
March
31,
|
|
|
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2018
|
|
|
|
$
Millions
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Advertising
|
|
$
|
812
|
|
|
$
|
735
|
|
|
$
|
3,245
|
|
|
$
|
2,796
|
|
Affiliate
fee
|
|
|
452
|
|
|
|
350
|
|
|
|
1,257
|
|
|
|
1,001
|
|
Other
|
|
|
106
|
|
|
|
53
|
|
|
|
294
|
|
|
|
185
|
|
Total
revenues
|
|
|
1,370
|
|
|
|
1,138
|
|
|
|
4,796
|
|
|
|
3,982
|
|
Operating
expenses
|
|
|
(1,114)
|
|
|
|
(903)
|
|
|
|
(4,075)
|
|
|
|
(3,259)
|
|
Selling, general and
administrative
|
|
|
(157)
|
|
|
|
(154)
|
|
|
|
(465)
|
|
|
|
(455)
|
|
Segment
EBITDA
|
|
$
|
99
|
|
|
$
|
81
|
|
|
$
|
256
|
|
|
$
|
268
|
|
Television reported quarterly segment revenues of $1.37 billion, an increase of $232 million or 20% from the amount in the prior
year quarter due to increases in affiliate, advertising and other
revenues. Affiliate revenues increased $102 million or 29% led by an increase in reverse
retransmission revenues. Advertising revenues increased
$77 million or 10%, primarily due to
the broadcast of one additional NFL Divisional Playoff game and
higher pricing and ratings at FOX Entertainment, led by the success
of The Masked Singer. Advertising revenues also
benefited from the comparison to the prior year period when
advertising dollars were diverted to the Winter Olympics,
which were broadcast on another network. Other revenues
doubled over the prior year quarter principally due to higher
digital content licensing revenues.
Television reported quarterly segment EBITDA of $99 million, an increase of $18 million or 22% from the amount in the prior
year quarter as the revenue increases noted above were partially
offset by higher expenses. The increase in expenses reflects
higher sports programming rights amortization and production costs
primarily due to the addition of one NFL Divisional Playoff game,
higher entertainment programming rights amortization due to the mix
of programming in the current quarter compared to the mix of
programming aired in the prior year quarter against the Winter
Olympics and the recognition of an approximately $55 million write-down of certain entertainment
and syndicated programming.
DISTRIBUTION
On March 19, 2019, the Company
became a standalone publicly traded company through the pro rata
distribution by Twenty-First Century Fox, Inc. ("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, FOX Business, FOX
Broadcasting Company (the "FOX Network"), FOX Sports, FOX
Television Stations Group, 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
(the "21CF Disney Merger Agreement"), by and among 21CF, The Walt
Disney Company ("Disney"), TWDC Holdco 613 Corp., a wholly-owned
subsidiary of Disney ("New Disney"), and certain other subsidiaries
of Disney, pursuant to which, among other things, Disney merged
with and into a subsidiary of New Disney and each of Disney and
21CF became wholly-owned subsidiaries of New Disney.
BASIS OF PRESENTATION
The Unaudited 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 Unaudited Combined
Financial Statements were prepared on a standalone basis, derived
from the unaudited consolidated financial statements and accounting
records of 21CF. The Company's financial statements as of
June 30, 2018 and for the three and
nine months ended March 31, 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
March 31, 2019 and for the three and
nine months ended March 31, 2019 are
presented on a consolidated basis.
The Unaudited 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 were 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 Unaudited Consolidated and Combined Financial
Statements, including the assumptions regarding allocating general
corporate expenses from 21CF, are reasonable. Nevertheless, the
Unaudited 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 and combined 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. These
Unaudited Consolidated and Combined Statements of Operations
include a corporate allocation of approximately $100 million and $90
million for the three months ended March 31, 2019 and 2018, respectively, and of
approximately $270 million and
$220 million for the nine months
ended March 31, 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 Web site located at
http://www.foxcorporation.com.
CONSOLIDATED AND
COMBINED STATEMENTS OF OPERATIONS
|
|
|
|
Three Months
Ended
March
31,
|
|
|
Nine Months
Ended
March
31,
|
|
|
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2018
|
|
|
|
$ Millions, except
per share amounts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
2,752
|
|
|
$
|
2,463
|
|
|
$
|
8,876
|
|
|
$
|
7,759
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses
|
|
|
(1,660)
|
|
|
|
(1,444)
|
|
|
|
(5,969)
|
|
|
|
(5,054)
|
|
Selling, general and
administrative
|
|
|
(336)
|
|
|
|
(324)
|
|
|
|
(964)
|
|
|
|
(896)
|
|
Depreciation and
amortization
|
|
|
(58)
|
|
|
|
(43)
|
|
|
|
(152)
|
|
|
|
(126)
|
|
Impairment and
restructuring charges
|
|
|
(14)
|
|
|
|
(14)
|
|
|
|
(14)
|
|
|
|
(11)
|
|
Interest
expense
|
|
|
(81)
|
|
|
|
(7)
|
|
|
|
(112)
|
|
|
|
(20)
|
|
Interest
income
|
|
|
19
|
|
|
|
-
|
|
|
|
19
|
|
|
|
-
|
|
Other, net
|
|
|
84
|
|
|
|
23
|
|
|
|
(116)
|
|
|
|
(75)
|
|
Income before
income tax (expense) benefit
|
|
|
706
|
|
|
|
654
|
|
|
|
1,568
|
|
|
|
1,577
|
|
Income tax (expense)
benefit
|
|
|
(167)
|
|
|
|
(188)
|
|
|
|
(390)
|
|
|
|
171
|
|
Net
income
|
|
|
539
|
|
|
|
466
|
|
|
|
1,178
|
|
|
|
1,748
|
|
Less: Net income
attributable to noncontrolling interests
|
|
|
(10)
|
|
|
|
(9)
|
|
|
|
(37)
|
|
|
|
(32)
|
|
Net income
attributable to Fox Corporation stockholders
|
|
$
|
529
|
|
|
$
|
457
|
|
|
$
|
1,141
|
|
|
$
|
1,716
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares:
|
|
|
621
|
|
|
|
621
|
|
|
|
621
|
|
|
|
621
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to Fox Corporation stockholders per share:
|
|
$
|
0.85
|
|
|
$
|
0.74
|
|
|
$
|
1.84
|
|
|
$
|
2.76
|
|
CONSOLIDATED AND
COMBINED BALANCE SHEETS
|
|
|
|
March
31,
2019
|
|
|
June 30,
2018
|
|
Assets:
|
|
$
Millions
|
|
Current
assets:
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
2,818
|
|
|
$
|
2,500
|
|
Receivables,
net
|
|
|
1,949
|
|
|
|
1,833
|
|
Inventories,
net
|
|
|
1,074
|
|
|
|
1,180
|
|
Other
|
|
|
123
|
|
|
|
67
|
|
Total current
assets
|
|
|
5,964
|
|
|
|
5,580
|
|
|
|
|
|
|
|
|
|
|
Non-current
assets:
|
|
|
|
|
|
|
|
|
Property, plant and
equipment, net
|
|
|
1,286
|
|
|
|
1,169
|
|
Intangible assets,
net
|
|
|
2,855
|
|
|
|
2,866
|
|
Goodwill
|
|
|
2,691
|
|
|
|
2,747
|
|
Deferred tax
assets
|
|
|
3,685
|
|
|
|
-
|
|
Other non-current
assets
|
|
|
1,176
|
|
|
|
759
|
|
Total
assets
|
|
$
|
17,657
|
|
|
$
|
13,121
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Equity:
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
|
Accounts payable,
accrued expenses and other current liabilities
|
|
$
|
1,297
|
|
|
$
|
1,759
|
|
Total current
liabilities
|
|
|
1,297
|
|
|
|
1,759
|
|
|
|
|
|
|
|
|
|
|
Non-current
liabilities:
|
|
|
|
|
|
|
|
|
Borrowings
|
|
|
6,750
|
|
|
|
-
|
|
Other
liabilities
|
|
|
863
|
|
|
|
422
|
|
Deferred income
taxes
|
|
|
-
|
|
|
|
1,071
|
|
Redeemable
noncontrolling interests
|
|
|
136
|
|
|
|
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
|
|
|
8,706
|
|
|
|
-
|
|
Retained
earnings
|
|
|
101
|
|
|
|
-
|
|
Accumulated other
comprehensive (loss) income
|
|
|
(214)
|
|
|
|
81
|
|
Total Fox Corporation stockholders' equity
|
|
|
8,600
|
|
|
|
9,594
|
|
Noncontrolling
interests
|
|
|
11
|
|
|
|
-
|
|
Total equity
|
|
|
8,611
|
|
|
|
9,594
|
|
Total liabilities
and equity
|
|
$
|
17,657
|
|
|
$
|
13,121
|
|
CONSOLIDATED AND
COMBINED STATEMENTS OF CASH FLOWS
|
|
|
|
Nine Months Ended
March 31,
|
|
|
|
2019
|
|
|
2018
|
|
|
|
$ Millions
|
|
Operating
Activities:
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
1,178
|
|
|
$
|
1,748
|
|
Adjustments to
reconcile net income to cash provided by operating
activities
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
152
|
|
|
|
126
|
|
Amortization of cable
distribution investments
|
|
|
29
|
|
|
|
43
|
|
Impairment and
restructuring charges
|
|
|
14
|
|
|
|
11
|
|
Equity-based
compensation
|
|
|
5
|
|
|
|
-
|
|
Other, net
|
|
|
116
|
|
|
|
75
|
|
Deferred income
taxes
|
|
|
322
|
|
|
|
(563)
|
|
Change in operating
assets and liabilities, net of acquisitions and
dispositions
|
|
|
|
|
|
|
|
|
Receivables and
other assets
|
|
|
(196)
|
|
|
|
(118)
|
|
Inventories net
of program rights payable
|
|
|
137
|
|
|
|
(300)
|
|
Accounts
payable and other liabilities
|
|
|
(133)
|
|
|
|
(237)
|
|
Net cash provided
by operating activities
|
|
|
1,624
|
|
|
|
785
|
|
|
|
|
|
|
|
|
|
|
Investing
Activities:
|
|
|
|
|
|
|
|
|
Property, plant and
equipment
|
|
|
(147)
|
|
|
|
(148)
|
|
Proceeds from the
relinquishment of spectrum
|
|
|
-
|
|
|
|
354
|
|
Purchase of
investments
|
|
|
(100)
|
|
|
|
-
|
|
Other investing
activities, net
|
|
|
(64)
|
|
|
|
(9)
|
|
Net cash (used in)
provided by investing activities
|
|
|
(311)
|
|
|
|
197
|
|
|
|
|
|
|
|
|
|
|
Financing
activities:
|
|
|
|
|
|
|
|
|
Borrowings
|
|
|
6,750
|
|
|
|
-
|
|
Net transfers (to)
from Twenty-First Century Fox, Inc.
|
|
|
(1,233)
|
|
|
|
845
|
|
Net dividend paid to
Twenty-First Century Fox, Inc.
|
|
|
(6,500)
|
|
|
|
-
|
|
Distributions and
other
|
|
|
(12)
|
|
|
|
(65)
|
|
Net cash (used in)
provided by financing activities
|
|
|
(995)
|
|
|
|
780
|
|
|
|
|
|
|
|
|
|
|
Net increase in cash
and cash equivalents
|
|
|
318
|
|
|
|
1,762
|
|
Cash and cash
equivalents, beginning of year
|
|
|
2,500
|
|
|
|
19
|
|
Cash and cash
equivalents, end of period
|
|
$
|
2,818
|
|
|
$
|
1,781
|
|
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 Unaudited 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
March
31,
|
|
|
Nine Months
Ended
March
31,
|
|
|
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2018
|
|
|
|
$
Millions
|
|
Income before
income tax (expense) benefit
|
|
$
|
706
|
|
|
$
|
654
|
|
|
$
|
1,568
|
|
|
$
|
1,577
|
|
Add:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of cable
distribution investments
|
|
|
10
|
|
|
|
11
|
|
|
|
29
|
|
|
|
43
|
|
Depreciation and
amortization
|
|
|
58
|
|
|
|
43
|
|
|
|
152
|
|
|
|
126
|
|
Impairment and
restructuring charges
|
|
|
14
|
|
|
|
14
|
|
|
|
14
|
|
|
|
11
|
|
Interest
expense
|
|
|
81
|
|
|
|
7
|
|
|
|
112
|
|
|
|
20
|
|
Interest
income
|
|
|
(19)
|
|
|
|
-
|
|
|
|
(19)
|
|
|
|
-
|
|
Other, net
|
|
|
(84)
|
|
|
|
(23)
|
|
|
|
116
|
|
|
|
75
|
|
Total Segment
EBITDA
|
|
$
|
766
|
|
|
$
|
706
|
|
|
$
|
1,972
|
|
|
$
|
1,852
|
|
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, 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 March 31,
2019 and 2018.
|
|
Three Months
Ended
|
|
|
|
March 31,
2019
|
|
|
March 31,
2018
|
|
|
|
Income
|
|
|
EPS
|
|
|
Income
|
|
|
EPS
|
|
|
|
$ Millions, except per share data
|
|
Net
Income
|
|
$
|
539
|
|
|
|
|
|
|
$
|
466
|
|
|
|
|
|
Less: Net income
attributable to
noncontrolling interests
|
|
|
(10)
|
|
|
|
|
|
|
|
(9)
|
|
|
|
|
|
Net Income
attributable to Fox
Corporation stockholders
|
|
$
|
529
|
|
|
$
|
0.85
|
|
|
$
|
457
|
|
|
$
|
0.74
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment and
restructuring charges
|
|
|
14
|
|
|
|
0.02
|
|
|
|
14
|
|
|
|
0.02
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other, net
|
|
|
(85)
|
|
|
|
(0.14)
|
|
|
|
(25)
|
|
|
|
(0.04)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax
provision
|
|
|
13
|
|
|
|
0.02
|
|
|
|
13
|
|
|
|
0.02
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rounding
|
|
|
-
|
|
|
|
0.01
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As
adjusted
|
|
$
|
471
|
|
|
$
|
0.76
|
|
|
$
|
459
|
|
|
$
|
0.74
|
|
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SOURCE Fox Corporation