NEW YORK, May 8, 2024 /PRNewswire/ -- Fox Corporation (Nasdaq: FOXA, FOX; "FOX" or the "Company") today reported financial results for the three months ended March 31, 2024.

The Company reported total quarterly revenues of $3.45 billion as compared to the $4.08 billion reported in the prior year quarter. Affiliate fee revenues increased 4%, driven by 9% growth at the Television segment and 1% growth at the Cable Network Programming segment. Advertising revenues were $1.24 billion as compared to the $1.88 billion reported in the prior year quarter, primarily due to the absence of the prior year broadcast of Super Bowl LVII and fewer NFL games at FOX Sports. Other revenues were $274 million as compared to the $352 million reported in the prior year quarter, primarily due to the timing of sports sublicensing revenues at the national sports networks.

The Company reported quarterly net income of $704 million as compared to a net loss of $50 million reported in the prior year quarter. The increase primarily reflects the absence of charges associated with legal settlement costs at FOX News Media recognized in Restructuring, impairment and other corporate matters, as well as a gain on USFL assets contributed to the United Football League joint venture recognized in Non-operating other, net in the current year quarter. Net income attributable to Fox Corporation stockholders was $666 million ($1.40 per share) as compared to a net loss of $54 million ($(0.10) per share) reported in the prior year quarter. Adjusted net income attributable to Fox Corporation stockholders1 was $520 million ($1.09 per share) as compared to the $494 million ($0.94 per share) reported in the prior year quarter.

Quarterly Adjusted EBITDA2 was $891 million, an increase of $58 million or 7% from the amount reported in the prior year quarter. Expenses decreased in the quarter, primarily due to lower sports programming rights amortization and production costs, led by the absence of the prior year broadcast of Super Bowl LVII and fewer NFL games.

Commenting on the results, Executive Chair and Chief Executive Officer Lachlan Murdoch said:

"FOX's fiscal third quarter results once again demonstrate how our unique strategy continues to distinguish FOX from our peers. The strength and leadership of our core brands, coupled with our focus on live content and must-have event programming, is clearly valued by our audiences, advertisers and distribution partners. The consistent financial delivery from this strategy supports our investments in innovation which are driving momentum in our digital portfolio, led by Tubi. Our balanced capital allocation approach, fortified by our strong balance sheet, underpins our ability to drive long-term value creation for our shareholders."

REVIEW OF OPERATING RESULTS 



Three Months Ended March 31,


Nine Months Ended March 31,


2024


2023


2024


2023


$ Millions

Revenues by Component:
















Affiliate fee

$     1,938


$     1,857


$     5,465


$     5,280

Advertising

1,235


1,875


4,437


5,598

Other

274


352


986


1,003

Total revenues

$     3,447


$     4,084


$   10,888


$   11,881









Segment Revenues:
















Cable Network Programming

$     1,472


$     1,570


$     4,517


$     4,633

Television

1,938


2,475


6,260


7,123

Other, Corporate and Eliminations

37


39


111


125

Total revenues

$     3,447


$     4,084


$   10,888


$   11,881









Adjusted EBITDA:
















Cable Network Programming

$        819


$        792


$     1,990


$     1,887

Television

145


117


358


782

Other, Corporate and Eliminations

(73)


(76)


(238)


(213)

Adjusted EBITDA3

$        891


$        833


$     2,110


$     2,456









Depreciation and amortization:
















Cable Network Programming

$          20


$          18


$          57


$          52

Television

29


38


86


97

Other, Corporate and Eliminations

49


50


148


159

Total depreciation and amortization

$          98


$        106


$        291


$        308

 

CABLE NETWORK PROGRAMMING



Three Months Ended
March 31,


Nine Months Ended
March 31,


2024


2023


2024


2023


$ Millions

Revenues








Affiliate fee

$     1,104


$     1,093


$     3,140


$     3,148

Advertising

296


316


934


1,083

Other

72


161


443


402

Total revenues

1,472


1,570


4,517


4,633

Operating expenses

(499)


(610)


(2,090)


(2,271)

Selling, general and administrative

(158)


(172)


(449)


(487)

Amortization of cable distribution investments

4


4


12


12

Segment EBITDA

$        819


$        792


$     1,990


$     1,887

Cable Network Programming reported quarterly segment revenues of $1.47 billion as compared to the $1.57 billion reported in the prior year quarter. Affiliate fee revenues increased $11 million or 1% as contractual price increases were partially offset by the impact of net subscriber declines. Advertising revenues were $296 million as compared to the $316 million reported in the prior year quarter. This is primarily due to lower digital advertising revenues and moderating direct response pricing declines at FOX News Media, as well as the absence of the prior year broadcast of the World Baseball Classic at the national sports networks. Other revenues were $72 million as compared to the $161 million reported in the prior year quarter, primarily due to the timing of sports sublicensing revenues at the national sports networks.

Cable Network Programming reported quarterly segment EBITDA of $819 million, an increase of $27 million or 3% from the amount reported in the prior year quarter. Expenses decreased in the quarter, primarily due to the timing of sports programming rights amortization at the national sports networks, lower costs at FOX News Media led by lower legal costs and the deconsolidation of the USFL.

TELEVISION



Three Months Ended
March 31,


Nine Months Ended
March 31,


2024


2023


2024


2023


$ Millions

Revenues








Advertising

$        939


$     1,559


$     3,503


$     4,516

Affiliate fee

834


764


2,325


2,132

Other

165


152


432


475

Total revenues

1,938


2,475


6,260


7,123

Operating expenses

(1,540)


(2,106)


(5,178)


(5,592)

Selling, general and administrative

(253)


(252)


(724)


(749)

Segment EBITDA

$        145


$        117


$        358


$        782

Television reported quarterly segment revenues of $1.94 billion as compared to the $2.48 billion reported in the prior year quarter. Advertising revenues were $939 million as compared to the $1.56 billion reported in the prior year quarter, primarily due to the absence of the prior year broadcast of Super Bowl LVII and fewer NFL games, partially offset by continued growth at Tubi. Affiliate fee revenues increased $70 million or 9%, led by higher rates at both the Company's owned and operated stations and third-party FOX affiliates. Other revenues increased $13 million or 9%, primarily due to the timing of deliveries from FOX Entertainment Studios.

Television reported quarterly segment EBITDA of $145 million, an increase of $28 million or 24%. Expenses decreased in the quarter, primarily due to lower sports and entertainment programming rights amortization and production costs, led by the absence of the prior year broadcast of Super Bowl LVII, fewer NFL games and fewer hours of original scripted programming due to the impact of the industry guild labor disputes in 2023.

SHARE REPURCHASE PROGRAM

As of March 31, 2024, the Company has repurchased approximately $4.35 billion of its Class A common stock and approximately $1 billion of its Class B common stock, with a remaining authorization of up to $1.65 billion. During the quarter, the Company repurchased approximately $250 million of its Class A common stock.

DEBT MATURITY

In January 2024, $1.25 billion of 4.030% senior notes matured and were repaid in full.

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, including the Company's Annual Report on Form 10-K 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 STATEMENTS OF OPERATIONS



Three Months Ended


Nine Months Ended


2024


2023


2024


2023


$ Millions, except per share amounts









Revenues

$     3,447


$     4,084


$   10,888


$   11,881









Operating expenses

(2,050)


(2,727)


(7,305)


(7,911)

Selling, general and administrative

(510)


(528)


(1,485)


(1,526)

Depreciation and amortization

(98)


(106)


(291)


(308)

Restructuring, impairment and other corporate matters

(15)


(893)


(24)


(1,015)

Interest expense, net

(55)


(55)


(169)


(183)

Non-operating other, net4

242


174


39


293

Income (loss) before income tax (expense) benefit

961


(51)


1,653


1,231

Income tax (expense) benefit

(257)


1


(419)


(347)

Net income (loss)

704


(50)


1,234


884

Less: Net income attributable to noncontrolling interests

(38)


(4)


(52)


(20)

Net income (loss) attributable to Fox Corporation stockholders

$        666


$         (54)


$     1,182


$        864

















Weighted average shares:

475


521


484


539









Net income (loss) attributable to Fox Corporation stockholders per share:

$       1.40


$     (0.10)


$       2.44


$       1.60

 

CONSOLIDATED BALANCE SHEETS



March 31,
2024


June 30, 
2023


$ Millions

Assets:




Current assets:




Cash and cash equivalents

$            3,791


$            4,272

Receivables, net

2,481


2,177

Inventories, net

660


543

Other

246


265

Total current assets

7,178


7,257





Non-current assets:




Property, plant and equipment, net

1,672


1,708

Intangible assets, net

3,048


3,084

Goodwill

3,544


3,559

Deferred tax assets

2,941


3,090

Other non-current assets

3,334


3,168

Total assets

$         21,717


$         21,866





Liabilities and Equity:




Current liabilities:




Borrowings

$                  —


$            1,249

Accounts payable, accrued expenses and other current liabilities

2,217


2,514

Total current liabilities

2,217


3,763





Non-current liabilities:




Borrowings

7,196


5,961

Other liabilities

1,379


1,484

Redeemable noncontrolling interests

260


213

Commitments and contingencies








Equity:




Class A common stock, $0.01 par value

3


3

Class B common stock, $0.01 par value

2


2

Additional paid-in capital

7,768


8,253

Retained earnings

2,926


2,269

Accumulated other comprehensive loss

(145)


(149)

Total Fox Corporation stockholders' equity

10,554


10,378

Noncontrolling interests

111


67

Total equity

10,665


10,445

Total liabilities and equity

$         21,717


$         21,866

 

CONSOLIDATED STATEMENTS OF CASH FLOWS



Nine Months Ended
March 31,


2024


2023


$ Millions

Operating Activities:




Net income

$            1,234


$               884

Adjustments to reconcile net income to cash provided by operating activities




Depreciation and amortization

291


308

Amortization of cable distribution investments

12


12

Equity-based compensation

69


55

Restructuring, impairment and other corporate matters

24


1,015

Non-operating other, net

(39)


(293)

Deferred income taxes

152


234

Change in operating assets and liabilities, net of acquisitions and dispositions




Receivables and other assets

(317)


(692)

Inventories net of programming payable

(220)


222

Accounts payable and accrued expenses

(178)


(200)

Other changes, net

(87)


(238)

Net cash provided by operating activities

941


1,307





Investing Activities:




Property, plant and equipment

(233)


(237)

Purchase of investments

(99)


(55)

Other investing activities, net

8


(26)

Net cash used in investing activities

(324)


(318)





Financing Activities:




Repayment of borrowings

(1,250)


Borrowings

1,232


Repurchase of shares

(750)


(1,750)

Dividends paid and distributions

(272)


(291)

Sale of subsidiary noncontrolling interest


25

Other financing activities, net

(58)


(27)

Net cash used in financing activities

(1,098)


(2,043)





Net decrease in cash and cash equivalents

(481)


(1,054)

Cash and cash equivalents, beginning of year

4,272


5,200

Cash and cash equivalents, end of period

$            3,791


$            4,146

NOTE 1 – ADJUSTED NET INCOME AND ADJUSTED EPS

The Company uses net income attributable to Fox Corporation stockholders and earnings per share ("EPS") attributable to Fox Corporation stockholders excluding net income effects of Restructuring, impairment and other corporate matters, adjustments to Equity (losses) earnings of affiliates, Non-operating other, net, Tax provisions and Noncontrolling interest 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 GAAP 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 attributable to Fox Corporation stockholders and EPS attributable to Fox Corporation stockholders to Adjusted Net Income and Adjusted EPS for the three months ended March 31, 2024 and 2023:


Three Months Ended


March 31, 2024


March 31, 2023


Income


EPS


Income


EPS


$ Millions, except per share data

Net income (loss) attributable to Fox Corporation stockholders

$        666


$       1.40


$         (54)


$     (0.10)









Restructuring, impairment and other corporate matters5

15


0.03


893


1.70









Non-operating other, net56

(244)


(0.51)


(173)


(0.33)









Tax provision5

52


0.11


(172)


(0.33)









Noncontrolling interest adjustment

31


0.07











Rounding


(0.01)











As adjusted5

$        520


$       1.09


$        494


$       0.94

















NOTE 2 – ADJUSTED EBITDA

Adjusted EBITDA is defined as Revenues less Operating expenses and Selling, general and administrative expenses. Adjusted EBITDA does not include: Amortization of cable distribution investments, Depreciation and amortization, Restructuring, impairment and other corporate matters, Interest expense, net, Non-operating other, net and Income tax expense.

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

Adjusted EBITDA is considered a non-GAAP financial measure and should be considered in addition to, not as a substitute for, net income, cash flow and other measures of financial performance reported in accordance with GAAP. In addition, this measure does not reflect cash available to fund requirements and excludes items, such as depreciation and amortization and impairment charges, which are significant components in assessing the Company's financial performance. Adjusted EBITDA may not be comparable to similarly titled measures reported by other companies.

The following table reconciles net income to Adjusted EBITDA for the three and nine months ended March 31, 2024 and 2023:


Three Months Ended
March 31,


Nine Months Ended
March 31,


2024


2023


2024


2023


$ Millions

Net income (loss)

$        704


$         (50)


$     1,234


$        884

Add:








Amortization of cable distribution investments

4


4


12


12

Depreciation and amortization

98


106


291


308

Restructuring, impairment and other corporate matters

15


893


24


1,015

Interest expense, net

55


55


169


183

Non-operating other, net7

(242)


(174)


(39)


(293)

Income tax expense (benefit)

257


(1)


419


347

Adjusted EBITDA

$        891


$        833


$     2,110


$     2,456

 




1 Excludes net income effects of Restructuring, impairment and other corporate matters, adjustments to Equity (losses) earnings of affiliates, Non-operating other, net, Tax provision and Noncontrolling interest adjustments. See Note 1 for a description of adjusted net income attributable to Fox Corporation stockholders and adjusted earnings per share attributable to Fox Corporation stockholders, which are considered non-GAAP financial measures, and a reconciliation of reported net income attributable to Fox Corporation stockholders and earnings per share attributable to Fox Corporation stockholders to adjusted net income attributable to Fox Corporation stockholders and adjusted earnings per share attributable to Fox Corporation stockholders.

2 Adjusted EBITDA is considered a non-GAAP financial measure. See Note 2 for a description of Adjusted EBITDA and a reconciliation of net income to Adjusted EBITDA.

3 Adjusted EBITDA is considered a non-GAAP financial measure. See Note 2 for a description of Adjusted EBITDA and a reconciliation of net income to Adjusted EBITDA.

4 Non-operating other, net presented above includes Equity earnings (losses) of affiliates.

5 The calculation of Adjusted EPS for the three months ended March 31, 2023 reflects weighted average diluted shares of 524 million, which includes common stock equivalents that were excluded from net loss attributable to Fox Corporation stockholders as their inclusion would have been antidilutive.

6 Non-operating other, net presented above excludes Equity earnings (losses) of affiliates.

7 Non-operating other, net presented above includes Equity earnings (losses) of affiliates.

 

(PRNewsfoto/Twenty-First Century Fox, Inc.) (PRNewsfoto/Twenty-First Century Fox, Inc.)

 

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SOURCE Fox Corporation

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