NEW YORK, Nov. 7, 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 September 30, 2018.
The Company reported quarterly income from continuing operations
attributable to 21st Century Fox stockholders of $1.29 billion ($0.69 per share), a 54% increase compared to
$839 million ($0.45 per share) reported in the prior year
quarter. The current quarter income from continuing
operations attributable to 21st Century Fox stockholders includes a
non-cash tax benefit of approximately $220
million, or $0.11 per share,
related to the Company's decision on September 26, 2018 to sell its interest in Sky
plc ("Sky"). Adjusted quarterly earnings per share from continuing
operations attributable to 21st Century Fox
stockholders1 was $0.52,
6% higher than the adjusted result of $0.49 reported in the same quarter of the prior
year.
The Company reported total quarterly revenues of $7.18 billion, a 2% increase from the
$7.00 billion of revenues reported in
the prior year quarter. This increase principally reflects higher
affiliate and advertising revenues reported at the Television and
Cable segments partially offset by lower theatrical revenue
reported at the Filmed Entertainment segment. The impact of foreign
exchange rates adversely impacted revenue growth by approximately
$110 million, or 2% in total.
Quarterly income from continuing operations before income tax
expense of $1.48 billion increased
15% from the $1.30 billion reported
in the prior year quarter. Quarterly total segment OIBDA of
$1.87 billion was 5% higher than the
prior year quarter driven by higher contributions reported at our
Television, Cable Network Programming and Filmed Entertainment
segments. The impact of foreign exchange rates negatively
impacted quarterly OIBDA growth by $58
million, or 3%.
Commenting on the results, Executive Chairmen Rupert and Lachlan Murdoch said:
"We continue to deliver against
our growth plan even as we make important strides toward completing
our Disney transaction and launching FOX in the first half of
2019. We have assembled a stellar leadership team for
FOX, giving us further confidence in the new company's ability to
capture opportunities in live programming while delivering
long-term value for shareholders. Our quarterly performance
builds on the operational and financial achievements of last year
and sets up our businesses for continued momentum under both the
enlarged Disney and the future FOX."
1
|
Excludes net
income effects of Impairment and restructuring charges, adjustments
to Equity earnings of affiliates, Other, net, and Sky non-cash tax
benefit. 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. See footnote (a) on page 14 for a description
of the adjustments to Equity earnings of affiliates.
|
REVIEW OF SEGMENT OPERATING RESULTS
|
|
Three Months
Ended
September
30,
|
|
|
|
2018
|
|
|
2017
|
|
|
|
US $
Millions
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cable Network
Programming
|
|
$
|
4,347
|
|
|
$
|
4,196
|
|
Television
|
|
|
1,276
|
|
|
|
1,065
|
|
Filmed
Entertainment
|
|
|
1,816
|
|
|
|
1,963
|
|
Other, Corporate and
Eliminations
|
|
|
(262)
|
|
|
|
(222)
|
|
Total
revenues
|
|
$
|
7,177
|
|
|
$
|
7,002
|
|
|
|
|
|
|
|
|
|
|
Segment
OIBDA:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cable Network
Programming
|
|
$
|
1,537
|
|
|
$
|
1,511
|
|
Television
|
|
|
168
|
|
|
|
122
|
|
Filmed
Entertainment
|
|
|
277
|
|
|
|
256
|
|
Other, Corporate and
Eliminations
|
|
|
(109)
|
|
|
|
(98)
|
|
Total Segment
OIBDA(a)
|
|
$
|
1,873
|
|
|
$
|
1,791
|
|
|
|
(a)
|
Total segment
OIBDA may be considered a non-GAAP financial measure. See
page 12 for a description of total segment OIBDA and for a
reconciliation from income from continuing operations before income
tax expense to total segment OIBDA.
|
CABLE NETWORK PROGRAMMING
Cable Network Programming reported quarterly segment OIBDA of
$1.54 billion, a 2% increase over the
prior year quarter as 4% revenue growth on higher affiliate and
advertising revenues was partially offset by a 5% increase in
expenses. The increase in expenses was primarily due to higher
global sports programming costs reflecting the impact of the FIFA
World Cup at both FS1 and FOX Networks Group International ("FNG
International") and contractual increases at the Regional Sports
Networks ("RSNs"). Foreign exchange fluctuations, primarily
in Latin America, adversely
impacted segment OIBDA growth by 4%.
Domestic cable revenue increased 7% led by higher affiliate and
advertising revenues partially offset by lower content revenue due
to lower third-party licensing of scripted content at FX
Networks. Domestic affiliate revenue increased 9%
reflecting continued contractual rate increases across all of our
domestic brands, and domestic advertising revenue increased 7% from
the prior year period largely due to higher pricing at FOX
News. Domestic OIBDA contributions increased 6% over the
prior year quarter led by higher contributions from FOX News and
the RSNs.
International cable revenue declined 4% as higher constant
currency affiliate revenue was more than offset by a 9% adverse
impact from the strengthened U.S. dollar. International
affiliate revenue decreased 1% as 10% local currency growth at FNG
International and STAR was more than offset by an 11% adverse
impact from the strengthened U.S. dollar. International advertising
revenue decreased 8% as the adverse impact from the strengthened
U.S. dollar and lower local currency advertising revenue at FNG
International more than offset local currency advertising growth at
STAR. International OIBDA contributions were 24% lower than
the prior year quarter primarily due to the adverse impact from the
strengthened U.S. dollar.
TELEVISION
Television reported quarterly segment OIBDA of $168 million, an increase of $46 million, or 38%, over the amount reported in
the prior year quarter on revenue growth of 20%.
Advertising revenue was 22% higher than the prior year
quarter reflecting a higher volume of sports broadcast in the
current year quarter, including FIFA World Cup matches and more
National Football League games, as well as higher political
advertising revenue related to the midterm U.S. elections at the TV
stations. Retransmission consent revenue grew 19% over the
prior year reflecting contractual rate increases. The revenue
increases were partially offset by 17% higher expenses due to
higher sports programming costs reflecting the higher volume of
National Football League games and FIFA World Cup matches in the
current year.
FILMED ENTERTAINMENT
Filmed Entertainment generated quarterly segment OIBDA of
$277 million, an 8% increase over the
$256 million reported in the prior
year quarter. The OIBDA increase reflects higher contributions from
the television production studio led by higher SVOD licensing of
animated product. Quarterly segment revenues decreased
7% to $1.82 billion, primarily
reflecting lower theatrical revenue at the film studio from a lower
volume and mix of films released in the current quarter partially
offset by higher SVOD revenue at the television production
studio.
REVIEW OF EQUITY EARNINGS OF AFFILIATES' RESULTS
The Company's share of equity earnings of affiliates is as
follows:
|
|
|
|
|
|
Three Months
Ended
September
30,
|
|
|
|
% Owned
|
|
|
2018
|
|
|
2017
|
|
|
|
|
|
|
|
US $
Millions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sky
|
|
39%(1)
|
|
|
$
|
147
|
|
|
$
|
110
|
|
Hulu
|
|
30%
|
|
|
|
(114)
|
|
|
|
(62)
|
|
Other equity
affiliates
|
|
Various(2)
|
|
|
|
2
|
|
|
|
12
|
|
Total equity
earnings of affiliates
|
|
|
|
|
|
$
|
35
|
|
|
$
|
60
|
|
|
|
(1)
|
On October 9,
2018, the Company disposed of its investment in Sky. See page
5 for more details.
|
(2)
|
Primarily
comprised of Endemol Shine Group and Tata Sky.
|
Quarterly equity earnings of affiliates were $35 million as compared to $60 million reported in the same period a
year-ago. The $25 million
decrease in earnings primarily reflects higher equity losses at
Hulu partially offset by higher equity earnings at
Sky.
OTHER ITEMS
Acquisition by Disney and Spin-Off of FOX
On June 20, 2018, the Company
entered into an amended and restated merger agreement (the "Disney
Merger Agreement") with The Walt Disney Company (NYSE: DIS)
pursuant to which Disney has agreed to acquire, for a price of
$38 per Company share, the Company,
including the Twentieth Century Fox Film and Television studios and
certain cable and international television businesses. Prior
to the acquisition by Disney, 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 and liabilities into a newly formed subsidiary, FOX, and
distribute all of the issued and outstanding common stock of FOX to
the Company's stockholders on a pro rata basis. The closing of the
transactions contemplated by the Disney Merger Agreement are
subject to the satisfaction of certain conditions, including, among
others, regulatory approvals and the receipt of certain tax
opinions with respect to the treatment of the transaction under
U.S. and Australian tax laws. The pending acquisition of the
Company by Disney was cleared by the Antitrust Division of the
United States Department of Justice on June
27, 2018 and by the European Commission on November 6, 2018.
On July 27, 2018 at a special
meeting of the Company's stockholders, the Company's stockholders
approved the Disney Merger Agreement and approved the other
proposals voted on at the special meeting.
The Company anticipates the transactions closing in the first
half of calendar 2019.
Disposition of Sky Shares
Following the recommended revised cash offer by Comcast
Corporation ("Comcast") for the entire issued and to be issued
share capital of Sky at a price of £17.28 for each Sky share, the
Company announced during the quarter that it intended to dispose of
its stake in Sky. On October 9, 2018,
the Company sold its 672,783,139 Sky shares to Comcast for total
proceeds of £11.6 billion, or $15.1
billion.
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.
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 updated joint proxy statement/prospectus included
in the Form S-4 that was declared effective by the SEC on
June 28, 2018 and will be more
fully discussed in the registration statement with respect to FOX.
Investors and shareholders of the Company are urged to read the
joint proxy statement/prospectus 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 "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
September
30,
|
|
|
|
2018
|
|
|
2017
|
|
|
|
US $ Millions,
except
per share amounts
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
7,177
|
|
|
$
|
7,002
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses
|
|
|
(4,424)
|
|
|
|
(4,381)
|
|
Selling, general and
administrative
|
|
|
(890)
|
|
|
|
(848)
|
|
Depreciation and
amortization
|
|
|
(158)
|
|
|
|
(142)
|
|
Impairment and
restructuring charges
|
|
|
(16)
|
|
|
|
(21)
|
|
Equity earnings of
affiliates
|
|
|
35
|
|
|
|
60
|
|
Interest expense,
net
|
|
|
(300)
|
|
|
|
(313)
|
|
Interest
income
|
|
|
8
|
|
|
|
10
|
|
Other, net
|
|
|
52
|
|
|
|
(72)
|
|
Income from
continuing operations before income tax expense
|
|
|
1,484
|
|
|
|
1,295
|
|
Income tax
expense
|
|
|
(126)
|
|
|
|
(391)
|
|
Income from
continuing operations
|
|
|
1,358
|
|
|
|
904
|
|
(Loss) income from
discontinued operations, net of tax
|
|
|
(7)
|
|
|
|
16
|
|
Net
income
|
|
|
1,351
|
|
|
|
920
|
|
Less: Net income
attributable to noncontrolling interests
|
|
|
(66)
|
|
|
|
(65)
|
|
Net income
attributable to Twenty-First Century Fox, Inc.
stockholders
|
|
$
|
1,285
|
|
|
$
|
855
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares:
|
|
|
1,863
|
|
|
|
1,853
|
|
|
|
|
|
|
|
|
|
|
Income from
continuing operations attributable to Twenty-First Century Fox,
Inc.
stockholders per share:
|
|
$
|
0.69
|
|
|
$
|
0.45
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to Twenty-First Century Fox, Inc. stockholders per
share:
|
|
$
|
0.69
|
|
|
$
|
0.46
|
|
CONSOLIDATED
BALANCE SHEETS
|
|
|
|
|
September 30,
2018
|
|
|
June 30,
2018
|
|
Assets:
|
|
US $
Millions
|
|
Current
assets:
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
7,083
|
|
|
$
|
7,622
|
|
Receivables,
net
|
|
|
7,326
|
|
|
|
7,120
|
|
Inventories,
net
|
|
|
3,804
|
|
|
|
3,669
|
|
Other
|
|
|
915
|
|
|
|
922
|
|
Total current
assets
|
|
|
19,128
|
|
|
|
19,333
|
|
|
|
|
|
|
|
|
|
|
Non-current
assets:
|
|
|
|
|
|
|
|
|
Receivables,
net
|
|
|
892
|
|
|
|
724
|
|
Investments
|
|
|
4,640
|
|
|
|
4,112
|
|
Inventories,
net
|
|
|
7,760
|
|
|
|
7,518
|
|
Property, plant and
equipment, net
|
|
|
1,949
|
|
|
|
1,956
|
|
Intangible assets,
net
|
|
|
6,032
|
|
|
|
6,101
|
|
Goodwill
|
|
|
12,755
|
|
|
|
12,768
|
|
Other non-current
assets
|
|
|
1,356
|
|
|
|
1,319
|
|
Total
assets
|
|
$
|
54,512
|
|
|
$
|
53,831
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Equity:
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
|
Borrowings
|
|
$
|
872
|
|
|
$
|
1,054
|
|
Accounts payable,
accrued expenses and other current liabilities
|
|
|
3,381
|
|
|
|
3,248
|
|
Participations,
residuals and royalties payable
|
|
|
1,634
|
|
|
|
1,748
|
|
Program rights
payable
|
|
|
1,151
|
|
|
|
1,368
|
|
Deferred
revenue
|
|
|
764
|
|
|
|
826
|
|
Total current
liabilities
|
|
|
7,802
|
|
|
|
8,244
|
|
|
|
|
|
|
|
|
|
|
Non-current
liabilities:
|
|
|
|
|
|
|
|
|
Borrowings
|
|
|
18,379
|
|
|
|
18,469
|
|
Other
liabilities
|
|
|
3,907
|
|
|
|
3,664
|
|
Deferred income
taxes
|
|
|
1,949
|
|
|
|
1,892
|
|
Redeemable
noncontrolling interests
|
|
|
551
|
|
|
|
764
|
|
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
|
|
|
12,534
|
|
|
|
12,612
|
|
Retained
earnings
|
|
|
10,499
|
|
|
|
8,934
|
|
Accumulated other
comprehensive loss
|
|
|
(2,354)
|
|
|
|
(2,001)
|
|
Total Twenty-First Century Fox, Inc. stockholders'
equity
|
|
|
20,698
|
|
|
|
19,564
|
|
Noncontrolling
interests
|
|
|
1,226
|
|
|
|
1,234
|
|
Total equity
|
|
|
21,924
|
|
|
|
20,798
|
|
Total liabilities
and equity
|
|
$
|
54,512
|
|
|
$
|
53,831
|
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|
Three Months
Ended
September 30,
|
|
|
|
2018
|
|
|
2017
|
|
|
|
US $ Millions
|
|
Operating
activities:
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
1,351
|
|
|
$
|
920
|
|
Less: (Loss) income
from discontinued operations, net of tax
|
|
|
(7)
|
|
|
|
16
|
|
Income from
continuing operations
|
|
|
1,358
|
|
|
|
904
|
|
Adjustments to
reconcile income from continuing operations to cash provided by
operating activities
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
158
|
|
|
|
142
|
|
Amortization of cable
distribution investments
|
|
|
10
|
|
|
|
18
|
|
Impairment and
restructuring charges
|
|
|
16
|
|
|
|
21
|
|
Equity-based
compensation
|
|
|
19
|
|
|
|
27
|
|
Equity earnings of
affiliates
|
|
|
(35)
|
|
|
|
(60)
|
|
Cash distributions
received from affiliates
|
|
|
3
|
|
|
|
5
|
|
Other, net
|
|
|
(52)
|
|
|
|
72
|
|
Deferred income
taxes
|
|
|
10
|
|
|
|
(11)
|
|
Change in operating
assets and liabilities, net of acquisitions and
dispositions
|
|
|
|
|
|
|
|
|
Receivables
|
|
|
37
|
|
|
|
(287)
|
|
Inventories net of
program rights payable
|
|
|
(725)
|
|
|
|
(183)
|
|
Accounts payable and
accrued expenses
|
|
|
(296)
|
|
|
|
(100)
|
|
Other changes,
net
|
|
|
77
|
|
|
|
200
|
|
Net cash provided
by operating activities from continuing operations
|
|
|
580
|
|
|
|
748
|
|
|
|
|
|
|
|
|
|
|
Investing
activities:
|
|
|
|
|
|
|
|
|
Property, plant and
equipment
|
|
|
(100)
|
|
|
|
(81)
|
|
Investments in equity
affiliates
|
|
|
(141)
|
|
|
|
(101)
|
|
Proceeds from
dispositions, net
|
|
|
29
|
|
|
|
362
|
|
Other investing
activities, net
|
|
|
(253)
|
|
|
|
(29)
|
|
Net cash (used in)
provided by investing activities from continuing
operations
|
|
|
(465)
|
|
|
|
151
|
|
|
|
|
|
|
|
|
|
|
Financing
activities:
|
|
|
|
|
|
|
|
|
Borrowings
|
|
|
75
|
|
|
|
-
|
|
Repayment of
borrowings
|
|
|
(343)
|
|
|
|
(67)
|
|
Dividends paid and
distributions
|
|
|
(94)
|
|
|
|
(67)
|
|
Other financing
activities, net
|
|
|
(184)
|
|
|
|
(32)
|
|
Net cash used in
financing activities from continuing operations
|
|
|
(546)
|
|
|
|
(166)
|
|
|
|
|
|
|
|
|
|
|
Net decrease in
cash and cash equivalents from discontinued
operations
|
|
|
(11)
|
|
|
|
(9)
|
|
|
|
|
|
|
|
|
|
|
Net (decrease)
increase in cash and cash equivalents
|
|
|
(442)
|
|
|
|
724
|
|
Cash and cash
equivalents, beginning of year
|
|
|
7,622
|
|
|
|
6,163
|
|
Exchange movement on
cash balances
|
|
|
(97)
|
|
|
|
14
|
|
Cash and cash
equivalents, end of period
|
|
$
|
7,083
|
|
|
$
|
6,901
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SEGMENT
INFORMATION
|
|
|
|
Three Months
Ended
September
30,
|
|
|
|
2018
|
|
|
2017
|
|
|
|
US $
Millions
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cable Network
Programming
|
|
$
|
4,347
|
|
|
$
|
4,196
|
|
Television
|
|
|
1,276
|
|
|
|
1,065
|
|
Filmed
Entertainment
|
|
|
1,816
|
|
|
|
1,963
|
|
Other, Corporate and
Eliminations
|
|
|
(262)
|
|
|
|
(222)
|
|
Total
revenues
|
|
$
|
7,177
|
|
|
$
|
7,002
|
|
|
|
|
|
|
|
|
|
|
Segment
OIBDA:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cable Network
Programming
|
|
$
|
1,537
|
|
|
$
|
1,511
|
|
Television
|
|
|
168
|
|
|
|
122
|
|
Filmed
Entertainment
|
|
|
277
|
|
|
|
256
|
|
Other, Corporate and
Eliminations
|
|
|
(109)
|
|
|
|
(98)
|
|
Total Segment
OIBDA(a)
|
|
$
|
1,873
|
|
|
$
|
1,791
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cable Network
Programming
|
|
$
|
97
|
|
|
$
|
85
|
|
Television
|
|
|
26
|
|
|
|
27
|
|
Filmed
Entertainment
|
|
|
25
|
|
|
|
23
|
|
Other, Corporate and
Eliminations
|
|
|
10
|
|
|
|
7
|
|
Total depreciation
and amortization
|
|
$
|
158
|
|
|
$
|
142
|
|
|
|
(a)
|
Total segment
OIBDA may be considered a non-GAAP financial measure. See
page 12 for a description of total segment OIBDA and for a
reconciliation from income from continuing operations before income
tax expense to total segment OIBDA.
|
CONSOLIDATED
REVENUES BY COMPONENT BY SEGMENT
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
September
30,
|
|
|
|
2018
|
|
|
2017
|
|
|
|
US $
Millions
|
|
Revenues by
Component:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Affiliate
fee
|
|
$
|
3,495
|
|
|
$
|
3,236
|
|
Advertising
|
|
|
1,772
|
|
|
|
1,623
|
|
Content
|
|
|
1,771
|
|
|
|
2,019
|
|
Other
|
|
|
139
|
|
|
|
124
|
|
Total
revenues
|
|
$
|
7,177
|
|
|
$
|
7,002
|
|
|
|
|
|
|
|
|
|
|
Revenues by
Segment by Component:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cable Network
Programming
|
|
|
|
|
|
|
|
|
Affiliate
fee
|
|
$
|
3,097
|
|
|
$
|
2,902
|
|
Advertising, content
and other
|
|
|
1,250
|
|
|
|
1,294
|
|
Total Cable Network
Programming revenues
|
|
|
4,347
|
|
|
|
4,196
|
|
Television
|
|
|
|
|
|
|
|
|
Advertising
|
|
|
799
|
|
|
|
655
|
|
Affiliate fee, content
and other
|
|
|
477
|
|
|
|
410
|
|
Total Television
revenues
|
|
|
1,276
|
|
|
|
1,065
|
|
Filmed
Entertainment
|
|
|
|
|
|
|
|
|
Content
|
|
|
1,725
|
|
|
|
1,891
|
|
Advertising and
other
|
|
|
91
|
|
|
|
72
|
|
Total Filmed
Entertainment revenues
|
|
|
1,816
|
|
|
|
1,963
|
|
Other, Corporate and
Eliminations
|
|
|
(262)
|
|
|
|
(222)
|
|
Total
revenues
|
|
$
|
7,177
|
|
|
$
|
7,002
|
|
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)
income from discontinued operations, net of tax, Impairment and
restructuring charges, Equity earnings of affiliates, Interest
expense, net, Interest income, Other, net, Income tax expense and
Net income attributable to noncontrolling interests.
The following table reconciles income from continuing operations
before income tax expense to total segment OIBDA:
|
|
Three Months
Ended
September
30,
|
|
|
|
2018
|
|
|
2017
|
|
|
|
US $
Millions
|
|
Income from
continuing operations before income tax expense
|
|
$
|
1,484
|
|
|
$
|
1,295
|
|
Add:
|
|
|
|
|
|
|
|
|
Amortization of cable
distribution investments
|
|
|
10
|
|
|
|
18
|
|
Depreciation and
amortization
|
|
|
158
|
|
|
|
142
|
|
Impairment and
restructuring charges
|
|
|
16
|
|
|
|
21
|
|
Equity earnings of
affiliates
|
|
|
(35)
|
|
|
|
(60)
|
|
Interest expense,
net
|
|
|
300
|
|
|
|
313
|
|
Interest
income
|
|
|
(8)
|
|
|
|
(10)
|
|
Other, net
|
|
|
(52)
|
|
|
|
72
|
|
Total Segment
OIBDA
|
|
$
|
1,873
|
|
|
$
|
1,791
|
|
|
|
Three Months Ended September
30, 2018
|
|
|
|
US $ Millions
|
|
|
|
Revenues
|
|
|
Operating and
Selling,
general
and
administrative
expenses
|
|
|
Add:
Amortization
of
cable
distribution
investments
|
|
|
Segment
OIBDA
|
|
Cable Network
Programming
|
|
$
|
4,347
|
|
|
$
|
(2,820)
|
|
|
$
|
10
|
|
|
$
|
1,537
|
|
Television
|
|
|
1,276
|
|
|
|
(1,108)
|
|
|
|
-
|
|
|
|
168
|
|
Filmed
Entertainment
|
|
|
1,816
|
|
|
|
(1,539)
|
|
|
|
-
|
|
|
|
277
|
|
Other, Corporate and
Eliminations
|
|
|
(262)
|
|
|
|
153
|
|
|
|
-
|
|
|
|
(109)
|
|
Consolidated
Total
|
|
$
|
7,177
|
|
|
$
|
(5,314)
|
|
|
$
|
10
|
|
|
$
|
1,873
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September
30, 2017
|
|
|
|
US $ Millions
|
|
|
|
Revenues
|
|
|
Operating and
Selling,
general
and
administrative
expenses
|
|
|
Add:
Amortization
of
cable
distribution
investments
|
|
|
Segment
OIBDA
|
|
Cable Network
Programming
|
|
$
|
4,196
|
|
|
$
|
(2,703)
|
|
|
$
|
18
|
|
|
$
|
1,511
|
|
Television
|
|
|
1,065
|
|
|
|
(943)
|
|
|
|
-
|
|
|
|
122
|
|
Filmed
Entertainment
|
|
|
1,963
|
|
|
|
(1,707)
|
|
|
|
-
|
|
|
|
256
|
|
Other, Corporate and
Eliminations
|
|
|
(222)
|
|
|
|
124
|
|
|
|
-
|
|
|
|
(98)
|
|
Consolidated
Total
|
|
$
|
7,002
|
|
|
$
|
(5,229)
|
|
|
$
|
18
|
|
|
$
|
1,791
|
|
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 September 30, 2018
and 2017.
|
|
Three Months
Ended
|
|
|
|
September 30,
2018
|
|
|
September 30,
2017
|
|
|
|
Income
|
|
|
EPS
|
|
|
Income
|
|
|
EPS
|
|
|
|
US
$ Millions, except per share data
|
|
Income from
continuing operations
|
|
$
|
1,358
|
|
|
|
|
|
|
$
|
904
|
|
|
|
|
|
Less: Net income
attributable to noncontrolling
interests
|
|
|
(66)
|
|
|
|
|
|
|
|
(65)
|
|
|
|
|
|
Income from
continuing operations
attributable to Twenty-First Century Fox,
Inc. stockholders
|
|
$
|
1,292
|
|
|
$
|
0.69
|
|
|
$
|
839
|
|
|
$
|
0.45
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment and
restructuring charges
|
|
|
16
|
|
|
|
0.01
|
|
|
|
21
|
|
|
|
0.01
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity affiliate
adjustments(a)
|
|
|
(123)
|
|
|
|
(0.07)
|
|
|
|
19
|
|
|
|
0.01
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other, net
|
|
|
(52)
|
|
|
|
(0.03)
|
|
|
|
72
|
|
|
|
0.04
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax
provision(b)
|
|
|
(165)
|
|
|
|
(0.09)
|
|
|
|
(43)
|
|
|
|
(0.02)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rounding
|
|
|
-
|
|
|
|
0.01
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As
adjusted
|
|
$
|
968
|
|
|
$
|
0.52
|
|
|
$
|
908
|
|
|
$
|
0.49
|
|
|
|
(a)
|
Equity earnings of
affiliates for the three months ended September 30, 2018 were
adjusted to remove (1) from Sky's results 21st Century Fox's share
of (i) the gain on the sale of an investment, (ii) restructuring
costs, (iii) Sky's purchase price amortization related to its
acquisition of the Direct Broadcast Satellite businesses from the
Company and (iv) costs related to Sky's acquisition and (2)
from Endemol Shine Group's results 21st Century Fox's share of
Endemol Shine Group's debt revaluation movements and restructuring
costs. Equity earnings of affiliates for the three
months ended September 30, 2017 were adjusted to remove (1) from
Sky's results 21st Century Fox's share of (i) Sky's purchase price
amortization related to its acquisition of the Direct Broadcast
Satellite businesses from the Company and (ii) restructuring costs
and (2) from Endemol Shine Group's results 21st Century Fox's share
of Endemol Shine Group's debt revaluation movements and
restructuring costs.
|
(b)
|
Includes the
removal of the non-cash tax benefit of approximately $220 million
related to the Company's decision on September 26, 2018 to sell its
interest in Sky.
|
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SOURCE Twenty-First Century Fox, Inc.