NEW YORK, May 9, 2018 /PRNewswire/ -- Twenty-First
Century Fox, Inc. ("21st Century Fox" or the "Company" -- (NASDAQ:
FOXA, FOX) today reported financial results for the three months
ended March 31, 2018.
The Company reported quarterly income from continuing operations
attributable to 21st Century Fox stockholders of $876 million ($0.47
per share), an 8% increase compared to $811
million ($0.44 per share)
reported in the prior year quarter. Excluding the net
income effects of Impairment and restructuring charges, Other, net,
and adjustments to Equity losses of affiliates1 adjusted
quarterly earnings per share from continuing operations
attributable to 21st Century Fox stockholders2 was
$0.49 compared to the adjusted result
of $0.54 for the same quarter of the
prior year. The current quarter's segment operating income before
depreciation and amortization ("OIBDA")3 reflects an
approximate $60 million charge from
higher compensation expense due to the modification of equity
awards resulting from the proposed Disney and New Fox
transactions4 which negatively impacted adjusted
earnings per share by $0.02 per
share.
The Company reported total quarterly revenues of $7.42 billion, a 2% decrease from the
$7.56 billion of revenues reported in
the prior year quarter. This decrease principally reflects the
absence of advertising revenues generated by Super Bowl LI
in the prior year at the Television segment partially offset by
higher affiliate, syndication and advertising revenues at the Cable
Network Programming segment.
Quarterly income from continuing operations before income tax
expense of $1.33 billion increased 6%
from the $1.25 billion reported in
the prior year quarter. Quarterly OIBDA of $1.89 billion was 2% lower than the amount
reported in the prior year quarter as higher contributions from the
Cable Network Programming segment were more than offset by lower
contributions from the Company's Television and Filmed
Entertainment segments as well as the higher compensation expense
related to the Disney and New Fox transactions included in the
Other, Corporate and Eliminations segment.
Commenting on the results, Executive Chairmen Rupert and Lachlan Murdoch said:
"We continue to make operational
and financial progress against near-term objectives as we also work
to close our strategic transactions. Our cable segment
delivered its highest earnings ever in our fiscal third quarter,
propelled by sustained double-digit gains in domestic affiliate
revenues. Creatively, we are firing on all cylinders.
Our stand-out programming continues to drive up the value of our
video brands to distributors, as well as build our direct
relationship with consumers, as we're demonstrating with the
successful inaugural season of Indian Premiere League on STAR
Sports and Hotstar platforms. Our film studio delivered box-office
and awards momentum that we expect to continue with the upcoming
release of Deadpool 2."
________________________________
|
1
|
See footnote (a)
on page 14 for a description of the adjustments to Equity losses of
affiliates.
|
2
|
See page 14 for a
reconciliation of reported income and earnings per share from
continuing operations attributable to 21st Century Fox stockholders
to adjusted income and adjusted earnings per share from continuing
operations attributable to 21st Century Fox stockholders, which may
be considered non-GAAP financial measures.
|
3
|
Total segment
OIBDA may be considered a non-GAAP financial measure. See
page 11 for a description of total segment OIBDA and for a
reconciliation from income from continuing operations before income
tax (expense) benefit to total segment OIBDA.
|
4
|
See page 5 for a
description of and additional information regarding the Disney and
New Fox transactions.
|
REVIEW OF SEGMENT OPERATING RESULTS
|
|
Three Months
Ended
March
31,
|
|
|
Nine Months
Ended
March
31,
|
|
|
|
2018
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
|
|
|
US $
Millions
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cable Network
Programming
|
|
$
|
4,419
|
|
|
$
|
4,024
|
|
|
$
|
13,020
|
|
|
$
|
11,801
|
|
Television
|
|
|
1,149
|
|
|
|
1,690
|
|
|
|
4,020
|
|
|
|
4,646
|
|
Filmed
Entertainment
|
|
|
2,243
|
|
|
|
2,256
|
|
|
|
6,452
|
|
|
|
6,432
|
|
Other, Corporate and
Eliminations
|
|
|
(391)
|
|
|
|
(406)
|
|
|
|
(1,033)
|
|
|
|
(1,127)
|
|
Total
revenues
|
|
$
|
7,420
|
|
|
$
|
7,564
|
|
|
$
|
22,459
|
|
|
$
|
21,752
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment
OIBDA:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cable Network
Programming
|
|
$
|
1,684
|
|
|
$
|
1,446
|
|
|
$
|
4,560
|
|
|
$
|
4,160
|
|
Television
|
|
|
78
|
|
|
|
190
|
|
|
|
256
|
|
|
|
757
|
|
Filmed
Entertainment
|
|
|
286
|
|
|
|
373
|
|
|
|
673
|
|
|
|
1,073
|
|
Other, Corporate and
Eliminations
|
|
|
(154)
|
|
|
|
(71)
|
|
|
|
(366)
|
|
|
|
(267)
|
|
Total Segment
OIBDA(a)
|
|
$
|
1,894
|
|
|
$
|
1,938
|
|
|
$
|
5,123
|
|
|
$
|
5,723
|
|
|
|
|
|
(a)
|
Total segment
OIBDA may be considered a non-GAAP financial measure. See
page 11 for a description of total segment OIBDA and for a
reconciliation from income from continuing operations before income
tax (expense) benefit to total segment OIBDA.
|
CABLE NETWORK PROGRAMMING
Cable Network Programming quarterly segment OIBDA increased 16%
compared to the prior year quarter to $1.68
billion, driven by a 10% revenue increase on higher
affiliate, syndication and advertising revenues partially offset by
a 6% increase in expenses. The increase in expenses was
primarily due to the first year of sublicensed Big Ten rights and
higher sports and entertainment programming costs at Fox Networks
Group International ("FNG International"), partially offset by
lower sports programming costs at STAR India ("STAR") due to a shift in timing of
cricket matches.
Domestic affiliate revenue increased 10% driven by contractual
rate increases across all of our domestic brands and domestic
advertising revenue increased 3% from the prior year period due to
higher pricing at Fox News. Domestic OIBDA contributions
increased 15% over the prior year quarter reflecting strong growth
across all of our domestic brands.
International affiliate revenue increased 14% driven by rate and
subscriber growth at both FNG International and STAR.
International advertising revenue declined 1% as strong growth at
FNG International was offset by the negative impact of a shift in
timing of cricket matches at STAR. International OIBDA
contributions were 23% higher than the prior year quarter as STAR's
contributions more than doubled but were partially offset by lower
contributions at FNG International, where higher costs more than
offset the higher reported revenues.
TELEVISION
Television reported quarterly segment OIBDA of $78 million, a decrease of $112 million compared to the prior year
quarter. The decline principally reflects the absence of
advertising revenue and OIBDA generated from the broadcast of the
Super Bowl in the prior year quarter. Additionally, this
quarter's results reflect revenue and OIBDA declines from lower
National Football League ("NFL") postseason ratings and three fewer
NFL broadcasts in the current quarter versus the prior year quarter
that more than offset double-digit retransmission consent revenue
growth and improved entertainment OIBDA contributions.
FILMED ENTERTAINMENT
Filmed Entertainment generated quarterly segment OIBDA of
$286 million, a 23% decrease from the
$373 million reported in the prior
year quarter. The OIBDA decline reflects lower contributions from
the television production business due to higher deficits related
to more new drama series delivered during the quarter and the
absence of revenues from the prior year
subscription-video-on-demand licensing of The People v. O.J.
Simpson: American Crime Story. Additionally, during the
quarter, the Company incurred costs supporting FoxNext Games's
successful inaugural mobile game release, Marvel Strike Force. Quarterly segment
revenues of $2.24 billion were
similar to a year-ago as higher theatrical revenues at the film
studio reflecting the successful worldwide theatrical performances
of The Greatest Showman, The Shape of Water and Maze
Runner: The Death Cure were offset by lower worldwide
syndication revenues at the television production business.
20th Century Fox's films led the industry in awards season, both in
terms of nominations and wins. Our films earned an industry-leading
6 Academy Awards, including Best Picture for The Shape of
Water, and 7 Golden Globe Awards, following 27 nominations in
both instances, the most of any studio.
REVIEW OF EQUITY LOSSES OF AFFILIATES' RESULTS
The Company's share of equity losses of affiliates is as
follows:
|
|
|
|
|
|
Three Months
Ended
March
31,
|
|
|
Nine Months
Ended
March
31,
|
|
|
|
% Owned
|
|
|
2018
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
|
|
|
|
|
|
|
US $
Millions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sky
|
|
39%(1)
|
|
|
$
|
117
|
|
|
$
|
93
|
|
|
$
|
347
|
|
|
$
|
255
|
|
Hulu
|
|
30%
|
|
|
|
(148)
|
|
|
|
(62)
|
|
|
|
(318)
|
|
|
|
(161)
|
|
Other equity
affiliates
|
|
Various(2)
|
|
|
|
(55)
|
|
|
|
(82)
|
|
|
|
(88)
|
|
|
|
(151)
|
|
Total equity
losses of affiliates
|
|
|
|
|
|
$
|
(86)
|
|
|
$
|
(51)
|
|
|
$
|
(59)
|
|
|
$
|
(57)
|
|
|
|
|
|
(1)
|
Please refer to
Sky plc's ("Sky") earnings releases for detailed
information.
|
|
(2)
|
Primarily
comprised of Endemol Shine Group and Tata Sky.
|
Quarterly equity losses of affiliates were $86 million as compared to $51 million reported in the same period a
year-ago. The $35 million
increase in losses primarily reflects higher equity losses at Hulu
partially offset by improved results reported at Endemol Shine
Group and Sky.
OTHER ITEMS
Station Acquisitions
On May 9, 2018, the Company
announced that it had entered into a definitive agreement with
Sinclair Broadcast Group, Inc. ("Sinclair") and Tribune Media
Company ("Tribune") to acquire seven television stations from
Tribune for approximately $910
million, subject to certain purchase price
adjustments. The transaction will grow Fox Television
Stations' coverage to nearly half of all U.S. households, and its
market presence to 19 of the top 20 DMAs. As part of the
transaction, the Company entered into new network affiliation
agreements with Sinclair and will grant to Sinclair options to
acquire two of the Company's stations. Completion of the
stations acquisition, which is anticipated to close in the first
half of fiscal 2019, is subject to the satisfaction of customary
closing conditions, including regulatory approvals, and is expected
to be coordinated with the closing of Sinclair's proposed
acquisition of Tribune.
Acquisition by Disney and Creation of New
"Fox"
On December 14, 2017, the Company
announced that it had entered into a definitive agreement for The
Walt Disney Company (NYSE: DIS) to acquire the Company, including
the Twentieth Century Fox Film and Television studios, along with
cable and international TV businesses, for approximately
$52.4 billion in stock (subject to
adjustment). Prior to the acquisition, the Company will
separate the Fox Broadcasting Company, Fox Television Stations, Fox
News Channel, Fox Business Network, FS1, FS2, Big Ten Network and
certain other assets into a newly listed company that will be spun
off to its shareholders. The transaction is subject to the
satisfaction of certain conditions, including regulatory and
shareholder approval, the receipt of a tax ruling from the
Australian Taxation Office and certain tax opinions with respect to
the treatment of the transaction under U.S. and Australian tax
laws, and other customary closing conditions. On April 18, 2018 the preliminary joint proxy
statement/prospectus was filed with the Securities and Exchange
Commission in connection with the transaction. The
transaction is expected to be completed approximately 12 to 18
months from December 13, 2017.
Pending Acquisition of the Remaining Shares of
Sky
The Company's pending acquisition of the public shares of Sky
has been cleared on public interest and plurality grounds in all of
the markets in which Sky operates except the UK, including
Austria, Germany, Italy and the Republic of Ireland. The transaction has also
received unconditional clearance by all relevant competition
authorities. The transaction is subject to certain other customary
closing conditions and the requisite approval of Sky shareholders
unaffiliated with the Company. On September
20, 2017, the U.K. Secretary of State referred the proposed
transaction to the Competition and Market Authority (CMA) for a
second phase review on grounds of media plurality and broadcasting
standards. The CMA provided its report on the transaction to
the Secretary of State on May 1, 2018
and the Secretary of State is required to publish the report and
make a final decision by no later than June
13, 2018. The Company anticipates regulatory approval
of the transaction by early summer 2018. On April 25, 2018, Comcast Corporation announced a
pre-conditional cash offer for the fully diluted share capital of
Sky, which is subject to regulatory pre-conditions as well as
additional closing conditions. The Company remains committed
to its pre-conditional cash offer for the shares of Sky which the
Company does not already own and is currently considering its
options.
To access a copy of this press release through the Internet,
access 21st Century Fox's corporate Web site located at
http://www.21cf.com.
Audio from 21st Century Fox's conference call with analysts on
the third quarter results can be heard live on the Internet at
4:30 p.m. Eastern Daylight Time
today. To listen to the call, visit
https://www.21cf.com/investor-relations.
Cautionary Statement Concerning Forward-Looking
Statements
This document contains certain "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act
of 1995. These statements are based on management's views and
assumptions regarding future events and business performance as of
the time the statements are made. Actual results may differ
materially from these expectations due to changes in global
economic, business, competitive market and regulatory factors, and
the proposed Disney transaction may not be consummated in a timely
manner or at all. More detailed information about these and
other factors that could affect future results is contained in our
filings with the Securities and Exchange Commission, and more
detailed information about these and other factors and risks
associated with the proposed Disney transaction are more fully
discussed in the preliminary joint proxy statement/prospectus that
was included in the registration statement on Form S-4 that was
filed with the SEC on April 18, 2018
in connection with the proposed Disney transaction, as well as in
the registration statement filed with respect to New Fox. Investors
and shareholders of the Company are urged to read the preliminary
joint proxy statement/prospectus (and the final joint proxy
statement/prospectus once filed) and other relevant documents filed
or to be filed with the SEC carefully when they become available
because they will contain important information about the proposed
Disney transaction. The final joint proxy statement/prospectus will
be mailed to stockholders of the Company as of the record date,
which has not been set at this time. The "forward-looking
statements" included in this document are made only as of the date
of this document and we do not have any obligation to publicly
update any "forward-looking statements" to reflect subsequent
events or circumstances, except as required by law.
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
March
31,
|
|
|
Nine Months
Ended
March
31,
|
|
|
|
2018
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
|
|
|
US $ Millions,
except
per share amounts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
7,420
|
|
|
$
|
7,564
|
|
|
$
|
22,459
|
|
|
$
|
21,752
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses
|
|
|
(4,581)
|
|
|
|
(4,824)
|
|
|
|
(14,722)
|
|
|
|
(13,651)
|
|
Selling, general and
administrative
|
|
|
(959)
|
|
|
|
(817)
|
|
|
|
(2,671)
|
|
|
|
(2,424)
|
|
Depreciation and
amortization
|
|
|
(145)
|
|
|
|
(140)
|
|
|
|
(429)
|
|
|
|
(410)
|
|
Impairment and
restructuring charges
|
|
|
(34)
|
|
|
|
(37)
|
|
|
|
(58)
|
|
|
|
(213)
|
|
Equity losses of
affiliates
|
|
|
(86)
|
|
|
|
(51)
|
|
|
|
(59)
|
|
|
|
(57)
|
|
Interest expense,
net
|
|
|
(311)
|
|
|
|
(310)
|
|
|
|
(936)
|
|
|
|
(909)
|
|
Interest
income
|
|
|
10
|
|
|
|
9
|
|
|
|
29
|
|
|
|
27
|
|
Other, net
|
|
|
17
|
|
|
|
(142)
|
|
|
|
(284)
|
|
|
|
(241)
|
|
Income from
continuing operations before income tax (expense)
benefit
|
|
1,331
|
|
|
|
1,252
|
|
|
|
3,329
|
|
|
|
3,874
|
|
Income tax (expense)
benefit
|
|
|
(370)
|
|
|
|
(370)
|
|
|
|
457
|
|
|
|
(1,161)
|
|
Income from
continuing operations
|
|
|
961
|
|
|
|
882
|
|
|
|
3,786
|
|
|
|
2,713
|
|
Loss from discontinued
operations, net of tax
|
|
|
(18)
|
|
|
|
(12)
|
|
|
|
(7)
|
|
|
|
(19)
|
|
Net
income
|
|
|
943
|
|
|
|
870
|
|
|
|
3,779
|
|
|
|
2,694
|
|
Less: Net income
attributable to noncontrolling interests
|
|
|
(85)
|
|
|
|
(71)
|
|
|
|
(235)
|
|
|
|
(218)
|
|
Net income
attributable to Twenty-First Century Fox, Inc.
stockholders
|
|
$
|
858
|
|
|
$
|
799
|
|
|
$
|
3,544
|
|
|
$
|
2,476
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares:
|
|
|
1,858
|
|
|
|
1,853
|
|
|
|
1,855
|
|
|
|
1,857
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from
continuing operations attributable to Twenty-First Century
Fox, Inc. stockholders per share:
|
$
|
0.47
|
|
|
$
|
0.44
|
|
|
$
|
1.91
|
|
|
$
|
1.34
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to Twenty-First Century Fox, Inc. stockholders
per share:
|
$
|
0.46
|
|
|
$
|
0.43
|
|
|
$
|
1.91
|
|
|
$
|
1.33
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED
BALANCE SHEETS
|
|
|
|
March 31,
2018
|
|
|
June 30,
2017
|
|
Assets:
|
|
US $
Millions
|
|
Current
assets:
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
7,372
|
|
|
$
|
6,163
|
|
Receivables,
net
|
|
|
6,905
|
|
|
|
6,477
|
|
Inventories,
net
|
|
|
3,645
|
|
|
|
3,101
|
|
Other
|
|
|
739
|
|
|
|
545
|
|
Total current
assets
|
|
|
18,661
|
|
|
|
16,286
|
|
|
|
|
|
|
|
|
|
|
Non-current
assets:
|
|
|
|
|
|
|
|
|
Receivables,
net
|
|
|
736
|
|
|
|
543
|
|
Investments
|
|
|
4,256
|
|
|
|
3,902
|
|
Inventories,
net
|
|
|
8,002
|
|
|
|
7,452
|
|
Property, plant and
equipment, net
|
|
|
1,861
|
|
|
|
1,781
|
|
Intangible assets,
net
|
|
|
6,174
|
|
|
|
6,574
|
|
Goodwill
|
|
|
12,794
|
|
|
|
12,792
|
|
Other non-current
assets
|
|
|
1,494
|
|
|
|
1,394
|
|
Total
assets
|
|
$
|
53,978
|
|
|
$
|
50,724
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Equity:
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
|
Borrowings
|
|
$
|
1,538
|
|
|
$
|
457
|
|
Accounts payable,
accrued expenses and other current liabilities
|
|
3,979
|
|
|
|
3,451
|
|
Participations,
residuals and royalties payable
|
|
|
1,682
|
|
|
|
1,657
|
|
Program rights
payable
|
|
|
1,183
|
|
|
|
1,093
|
|
Deferred
revenue
|
|
|
717
|
|
|
|
580
|
|
Total current
liabilities
|
|
|
9,099
|
|
|
|
7,238
|
|
|
|
|
|
|
|
|
|
|
Non-current
liabilities:
|
|
|
|
|
|
|
|
|
Borrowings
|
|
|
18,459
|
|
|
|
19,456
|
|
Other
liabilities
|
|
|
3,798
|
|
|
|
3,616
|
|
Deferred income
taxes
|
|
|
1,638
|
|
|
|
2,782
|
|
Redeemable
noncontrolling interests
|
|
|
761
|
|
|
|
694
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
|
Equity:
|
|
|
|
|
|
|
|
|
Class A common stock,
$0.01 par value
|
|
|
11
|
|
|
|
11
|
|
Class B common stock,
$0.01 par value
|
|
|
8
|
|
|
|
8
|
|
Additional paid-in
capital
|
|
|
12,530
|
|
|
|
12,406
|
|
Retained
earnings
|
|
|
8,121
|
|
|
|
5,315
|
|
Accumulated other
comprehensive loss
|
|
|
(1,699)
|
|
|
|
(2,018)
|
|
Total Twenty-First Century Fox, Inc. stockholders'
equity
|
|
18,971
|
|
|
|
15,722
|
|
Noncontrolling
interests
|
|
|
1,252
|
|
|
|
1,216
|
|
Total equity
|
|
|
20,223
|
|
|
|
16,938
|
|
Total liabilities
and equity
|
|
$
|
53,978
|
|
|
$
|
50,724
|
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|
|
|
Nine Months Ended
March 31,
|
|
|
|
2018
|
|
|
2017
|
|
|
|
US $ Millions
|
|
Operating
activities:
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
3,779
|
|
|
$
|
2,694
|
|
Less: Loss from
discontinued operations, net of tax
|
|
|
(7)
|
|
|
|
(19)
|
|
Income from
continuing operations
|
|
|
3,786
|
|
|
|
2,713
|
|
Adjustments to
reconcile income from continuing operations to cash provided by
operating activities
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
429
|
|
|
|
410
|
|
Amortization of cable
distribution investments
|
|
|
57
|
|
|
|
46
|
|
Impairment and
restructuring charges
|
|
|
58
|
|
|
|
213
|
|
Equity-based
compensation
|
|
|
166
|
|
|
|
97
|
|
Equity losses of
affiliates
|
|
|
59
|
|
|
|
57
|
|
Cash distributions
received from affiliates
|
|
|
110
|
|
|
|
182
|
|
Other, net
|
|
|
284
|
|
|
|
241
|
|
Deferred income taxes
and other taxes
|
|
|
(1,276)
|
|
|
|
(70)
|
|
Change in operating
assets and liabilities, net of acquisitions and
dispositions
|
|
|
|
|
|
|
|
Receivables
|
|
|
(599)
|
|
|
|
(1,146)
|
|
Inventories net of
program rights payable
|
|
|
(1,003)
|
|
|
|
(966)
|
|
Accounts payable and
accrued expenses
|
|
|
360
|
|
|
|
286
|
|
Other changes,
net
|
|
|
(229)
|
|
|
|
364
|
|
Net cash provided
by operating activities from continuing operations
|
|
|
2,202
|
|
|
|
2,427
|
|
|
|
|
|
|
|
|
|
|
Investing
activities:
|
|
|
|
|
|
|
|
|
Property, plant and
equipment
|
|
|
(343)
|
|
|
|
(202)
|
|
Investments in equity
affiliates
|
|
|
(325)
|
|
|
|
(18)
|
|
Proceeds from
dispositions, net
|
|
|
365
|
|
|
|
-
|
|
Other
investments
|
|
|
(117)
|
|
|
|
(148)
|
|
Net cash used in
investing activities from continuing operations
|
|
|
(420)
|
|
|
|
(368)
|
|
|
|
|
|
|
|
|
|
|
Financing
activities:
|
|
|
|
|
|
|
|
|
Borrowings
|
|
|
1,550
|
|
|
|
879
|
|
Repayment of
borrowings
|
|
|
(1,479)
|
|
|
|
(546)
|
|
Repurchase of
shares
|
|
|
-
|
|
|
|
(619)
|
|
Dividends paid and
distributions
|
|
|
(579)
|
|
|
|
(522)
|
|
Other financing
activities, net
|
|
|
(69)
|
|
|
|
(72)
|
|
Net cash used in
financing activities from continuing operations
|
|
|
(577)
|
|
|
|
(880)
|
|
|
|
|
|
|
|
|
|
|
Net decrease in
cash and cash equivalents from discontinued
operations
|
|
(42)
|
|
|
|
(21)
|
|
|
|
|
|
|
|
|
|
|
Net increase in cash
and cash equivalents
|
|
|
1,163
|
|
|
|
1,158
|
|
Cash and cash
equivalents, beginning of year
|
|
|
6,163
|
|
|
|
4,424
|
|
Exchange movement on
cash balances
|
|
|
46
|
|
|
|
(10)
|
|
Cash and cash
equivalents, end of period
|
|
$
|
7,372
|
|
|
$
|
5,572
|
|
SEGMENT
INFORMATION
|
|
|
|
Three Months
Ended
March
31,
|
|
|
Nine Months
Ended
March
31,
|
|
|
|
2018
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
|
|
|
US $
Millions
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cable Network
Programming
|
|
$
|
4,419
|
|
|
$
|
4,024
|
|
|
$
|
13,020
|
|
|
$
|
11,801
|
|
Television
|
|
|
1,149
|
|
|
|
1,690
|
|
|
|
4,020
|
|
|
|
4,646
|
|
Filmed
Entertainment
|
|
|
2,243
|
|
|
|
2,256
|
|
|
|
6,452
|
|
|
|
6,432
|
|
Other, Corporate and
Eliminations
|
|
|
(391)
|
|
|
|
(406)
|
|
|
|
(1,033)
|
|
|
|
(1,127)
|
|
Total
revenues
|
|
$
|
7,420
|
|
|
$
|
7,564
|
|
|
$
|
22,459
|
|
|
$
|
21,752
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment
OIBDA:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cable Network
Programming
|
|
$
|
1,684
|
|
|
$
|
1,446
|
|
|
$
|
4,560
|
|
|
$
|
4,160
|
|
Television
|
|
|
78
|
|
|
|
190
|
|
|
|
256
|
|
|
|
757
|
|
Filmed
Entertainment
|
|
|
286
|
|
|
|
373
|
|
|
|
673
|
|
|
|
1,073
|
|
Other, Corporate and
Eliminations
|
|
|
(154)
|
|
|
|
(71)
|
|
|
|
(366)
|
|
|
|
(267)
|
|
Total Segment
OIBDA(a)
|
|
$
|
1,894
|
|
|
$
|
1,938
|
|
|
$
|
5,123
|
|
|
$
|
5,723
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cable Network
Programming
|
|
$
|
89
|
|
|
$
|
87
|
|
|
$
|
260
|
|
|
$
|
252
|
|
Television
|
|
|
27
|
|
|
|
28
|
|
|
|
81
|
|
|
|
85
|
|
Filmed
Entertainment
|
|
|
21
|
|
|
|
19
|
|
|
|
67
|
|
|
|
59
|
|
Other, Corporate and
Eliminations
|
|
|
8
|
|
|
|
6
|
|
|
|
21
|
|
|
|
14
|
|
Total depreciation
and amortization
|
|
$
|
145
|
|
|
$
|
140
|
|
|
$
|
429
|
|
|
$
|
410
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED
REVENUES BY COMPONENT
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Affiliate
fee
|
|
$
|
3,507
|
|
|
$
|
3,160
|
|
|
$
|
9,995
|
|
|
$
|
8,989
|
|
Advertising
|
|
|
1,642
|
|
|
|
2,203
|
|
|
|
5,761
|
|
|
|
6,338
|
|
Content
|
|
|
2,148
|
|
|
|
2,078
|
|
|
|
6,307
|
|
|
|
5,979
|
|
Other
|
|
|
123
|
|
|
|
123
|
|
|
|
396
|
|
|
|
446
|
|
Total
revenues
|
|
$
|
7,420
|
|
|
$
|
7,564
|
|
|
$
|
22,459
|
|
|
$
|
21,752
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Total segment
OIBDA may be considered a non-GAAP financial measure. See
page 11 for a description of total segment OIBDA and for a
reconciliation from income from continuing operations before income
tax (expense) benefit to total segment OIBDA.
|
NOTE 1 – TOTAL SEGMENT OPERATING INCOME BEFORE DEPRECIATION
AND AMORTIZATION
The Company evaluates the performance of its operating segments
based on segment operating income before depreciation and
amortization ("OIBDA"), and management uses total segment OIBDA as
a measure of the performance of operating businesses separate from
non-operating factors. Total segment OIBDA may be considered
a non-GAAP 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. This measure excludes items, such as
depreciation and amortization as well as impairment charges, that
are significant components in assessing the Company's financial
performance.
Management believes that total segment OIBDA is an appropriate
measure for evaluating the operating performance of the Company's
business and provides investors and equity analysts a measure to
analyze operating performance of the Company's business and
enterprise value against historical data and competitors'
data. Segment OIBDA is the primary measure used by our chief
operating decision maker to evaluate the performance of and
allocate resources to the Company's business segments.
Segment OIBDA does not include depreciation and amortization and
the amortization of cable distribution investments and eliminates
the variable effect across all business segments of depreciation
and amortization. Depreciation and amortization expense
includes the depreciation of property and equipment, as well as
amortization of finite-lived intangible assets. Amortization
of cable distribution investments represents a reduction against
revenues over the term of a carriage arrangement and, as such, it
is excluded from segment operating income before depreciation and
amortization.
In addition, total segment OIBDA does not include: Loss
from discontinued operations, net of tax, Impairment and
restructuring charges, Equity losses of affiliates, Interest
expense, net, Interest income, Other, net, Income tax (expense)
benefit and Net income attributable to noncontrolling
interests.
The following table reconciles income from continuing operations
before income tax (expense) benefit to total segment OIBDA:
|
|
Three Months
Ended
March
31,
|
|
|
Nine Months
Ended
March
31,
|
|
|
|
2018
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
|
|
|
US $
Millions
|
|
Income from
continuing operations before income tax (expense)
benefit
|
|
$
|
1,331
|
|
|
$
|
1,252
|
|
|
$
|
3,329
|
|
|
$
|
3,874
|
|
Add:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of cable
distribution investments
|
|
|
14
|
|
|
|
15
|
|
|
|
57
|
|
|
|
46
|
|
Depreciation and
amortization
|
|
|
145
|
|
|
|
140
|
|
|
|
429
|
|
|
|
410
|
|
Impairment and
restructuring charges
|
|
|
34
|
|
|
|
37
|
|
|
|
58
|
|
|
|
213
|
|
Equity losses of
affiliates
|
|
|
86
|
|
|
|
51
|
|
|
|
59
|
|
|
|
57
|
|
Interest expense,
net
|
|
|
311
|
|
|
|
310
|
|
|
|
936
|
|
|
|
909
|
|
Interest
income
|
|
|
(10)
|
|
|
|
(9)
|
|
|
|
(29)
|
|
|
|
(27)
|
|
Other, net
|
|
|
(17)
|
|
|
|
142
|
|
|
|
284
|
|
|
|
241
|
|
Total Segment
OIBDA
|
|
$
|
1,894
|
|
|
$
|
1,938
|
|
|
$
|
5,123
|
|
|
$
|
5,723
|
|
|
|
|
|
Three Months Ended March
31, 2018
|
|
|
|
US $ Millions
|
|
|
|
Revenues
|
|
|
Operating and
Selling,
general
and
administrative
expenses
|
|
|
Add:
Amortization
of
cable
distribution
investments
|
|
|
Segment
OIBDA
|
|
Cable Network
Programming
|
|
$
|
4,419
|
|
|
$
|
(2,749)
|
|
|
$
|
14
|
|
|
$
|
1,684
|
|
Television
|
|
|
1,149
|
|
|
|
(1,071)
|
|
|
|
-
|
|
|
|
78
|
|
Filmed
Entertainment
|
|
|
2,243
|
|
|
|
(1,957)
|
|
|
|
-
|
|
|
|
286
|
|
Other, Corporate and
Eliminations
|
|
|
(391)
|
|
|
|
237
|
|
|
|
-
|
|
|
|
(154)
|
|
Consolidated
Total
|
|
$
|
7,420
|
|
|
$
|
(5,540)
|
|
|
$
|
14
|
|
|
$
|
1,894
|
|
|
|
|
|
Three Months Ended March
31, 2017
|
|
|
|
US $ Millions
|
|
|
|
Revenues
|
|
|
Operating and
Selling,
general
and
administrative
expenses
|
|
|
Add:
Amortization
of
cable
distribution
investments
|
|
|
Segment
OIBDA
|
|
Cable Network
Programming
|
|
$
|
4,024
|
|
|
$
|
(2,593)
|
|
|
$
|
15
|
|
|
$
|
1,446
|
|
Television
|
|
|
1,690
|
|
|
|
(1,500)
|
|
|
|
-
|
|
|
|
190
|
|
Filmed
Entertainment
|
|
|
2,256
|
|
|
|
(1,883)
|
|
|
|
-
|
|
|
|
373
|
|
Other, Corporate and
Eliminations
|
|
|
(406)
|
|
|
|
335
|
|
|
|
-
|
|
|
|
(71)
|
|
Consolidated
Total
|
|
$
|
7,564
|
|
|
$
|
(5,641)
|
|
|
$
|
15
|
|
|
$
|
1,938
|
|
|
|
|
|
Nine Months Ended March
31, 2018
|
|
|
|
US $ Millions
|
|
|
|
Revenues
|
|
|
Operating and
Selling,
general
and
administrative
expenses
|
|
|
Add:
Amortization
of
cable
distribution
investments
|
|
|
Segment
OIBDA
|
|
Cable Network
Programming
|
|
$
|
13,020
|
|
|
$
|
(8,517)
|
|
|
$
|
57
|
|
|
$
|
4,560
|
|
Television
|
|
|
4,020
|
|
|
|
(3,764)
|
|
|
|
-
|
|
|
|
256
|
|
Filmed
Entertainment
|
|
|
6,452
|
|
|
|
(5,779)
|
|
|
|
-
|
|
|
|
673
|
|
Other, Corporate and
Eliminations
|
|
|
(1,033)
|
|
|
|
667
|
|
|
|
-
|
|
|
|
(366)
|
|
Consolidated
Total
|
|
$
|
22,459
|
|
|
$
|
(17,393)
|
|
|
$
|
57
|
|
|
$
|
5,123
|
|
|
|
|
|
Nine Months Ended March
31, 2017
|
|
|
|
US $ Millions
|
|
|
|
Revenues
|
|
|
Operating and
Selling,
general
and
administrative
expenses
|
|
|
Add:
Amortization
of
cable
distribution
investments
|
|
|
Segment
OIBDA
|
|
Cable Network
Programming
|
|
$
|
11,801
|
|
|
$
|
(7,687)
|
|
|
$
|
46
|
|
|
$
|
4,160
|
|
Television
|
|
|
4,646
|
|
|
|
(3,889)
|
|
|
|
-
|
|
|
|
757
|
|
Filmed
Entertainment
|
|
|
6,432
|
|
|
|
(5,359)
|
|
|
|
-
|
|
|
|
1,073
|
|
Other, Corporate and
Eliminations
|
|
|
(1,127)
|
|
|
|
860
|
|
|
|
-
|
|
|
|
(267)
|
|
Consolidated
Total
|
|
$
|
21,752
|
|
|
$
|
(16,075)
|
|
|
$
|
46
|
|
|
$
|
5,723
|
|
NOTE 2 – ADJUSTED NET INCOME AND ADJUSTED EPS FROM CONTINUING
OPERATIONS
The calculation of income and earnings per share ("EPS") from
continuing operations attributable to 21st Century Fox stockholders
excluding net income effects of Impairment and restructuring
charges, Equity affiliate adjustments, Other, net, and tax
provision adjustments ("adjusted income and diluted EPS from
continuing operations attributable to 21st Century Fox
stockholders") may not be comparable to similarly titled measures
reported by other companies. Adjusted income and diluted EPS from
continuing operations attributable to 21st Century Fox stockholders
are not measures of performance under generally accepted accounting
principles and should not be construed as substitutes for
consolidated net income and EPS as determined under GAAP as a
measure of performance. However, management uses these measures in
comparing the Company's historical performance and believes that
they provide meaningful and comparable information to investors to
assist in their analysis of our performance relative to prior
periods and our competitors.
The Company uses adjusted income and diluted EPS from continuing
operations attributable to 21st Century Fox stockholders to
evaluate the performance of the Company's operations exclusive of
certain items that impact the comparability of results from period
to period.
The following table reconciles reported income and reported
diluted EPS from continuing operations attributable to 21st Century
Fox stockholders to adjusted income and diluted EPS from continuing
operations attributable to 21st Century Fox stockholders for the
three months ended March 31, 2018 and
2017.
|
|
Three Months
Ended
|
|
|
|
March 31,
2018
|
|
|
March 31,
2017
|
|
|
|
Income
|
|
|
EPS
|
|
|
Income
|
|
|
EPS
|
|
|
|
US
$ Millions, except per share data
|
|
Income from
continuing operations
|
|
$
|
961
|
|
|
|
|
|
|
$
|
882
|
|
|
|
|
|
Less: Net income
attributable to noncontrolling
interests
|
|
|
(85)
|
|
|
|
|
|
|
|
(71)
|
|
|
|
|
|
Income from
continuing operations
attributable to Twenty-First Century Fox,
Inc. stockholders
|
|
$
|
876
|
|
|
$
|
0.47
|
|
|
$
|
811
|
|
|
$
|
0.44
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment and
restructuring charges
|
|
|
34
|
|
|
|
0.02
|
|
|
|
37
|
|
|
|
0.02
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity affiliate
adjustments(a)
|
|
|
17
|
|
|
|
0.01
|
|
|
|
90
|
|
|
|
0.05
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other, net
|
|
|
(17)
|
|
|
|
(0.01)
|
|
|
|
142
|
|
|
|
0.08
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax
provision
|
|
|
2
|
|
|
|
-
|
|
|
|
(76)
|
|
|
|
(0.04)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rounding
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(0.01)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As
adjusted
|
|
$
|
912
|
|
|
$
|
0.49
|
|
|
$
|
1,004
|
|
|
$
|
0.54
|
|
|
|
|
|
(a)
|
Equity losses of
affiliates for the three months ended March 31, 2018 and 2017 were
adjusted to remove from Sky's results 21st Century Fox's share of
both Sky's purchase price amortization related to its acquisition
of the Direct Broadcast Satellite businesses from the Company and
restructuring and other transactions and to remove from
Endemol Shine Group's results 21st Century Fox's share of Endemol
Shine Group's impairment, debt revaluation movements and
restructuring costs.
|
View original content with
multimedia:http://www.prnewswire.com/news-releases/21st-century-fox-reports-third-quarter-income-from-continuing-operations-before-income-tax-expense-of-1-33-billion-and-total-segment-operating-income-before-depreciation-and-amortization-of-1-89-billion-300645842.html
SOURCE Twenty-First Century Fox, Inc.