NEW YORK, Aug. 4, 2020 /PRNewswire/ -- Fox Corporation
(Nasdaq: FOXA, FOX; "FOX" or the "Company") today reported
financial results for the three months and twelve months ended
June 30, 2020.
Commenting on the results, Executive Chairman and Chief
Executive Officer Lachlan Murdoch
said:
"FOX delivered strong results for
the fourth quarter and full fiscal year, even in spite of the
unprecedented environment in which we all continue to operate,
underscoring the strength of our brands and content offering. We
continue to expand the way audiences interact and connect with our
brands while simultaneously diversifying and enhancing our revenue
base. We entered the COVID-19 crisis on sound operational and
financial footing and we expect to emerge from this pandemic more
competitive, more focused and even more strongly positioned to
deliver value for our viewers, partners and shareholders in the
years ahead."
FOURTH QUARTER COMPANY RESULTS
The Company reported total quarterly revenues of $2.42 billion, a 4% decrease from the
$2.51 billion of revenues reported in
the prior year quarter, as growth in affiliate revenues was more
than offset by declines in advertising revenues. Affiliate revenues
increased 8% led by 22% growth at the Television segment.
Advertising revenues decreased 22% due to lower local advertising
revenues at the FOX Television Stations, fewer live events at FOX
Sports and fewer hours of scripted programming at FOX
Entertainment, primarily as a result of Coronavirus Disease 2019
("COVID-19").
Quarterly net income decreased to $145
million from the $465 million
in the prior year quarter, primarily due to higher impairment and
restructuring charges, partially offset by lower operating
expenses. The increase in impairment and restructuring charges
primarily reflects the negotiated settlement to exit the Company's
rights agreement with the U.S. Golf Association ("USGA"). The
decrease in operating expenses primarily reflects lower programming
rights amortization due to COVID-19. Quarterly net income
attributable to Fox Corporation stockholders decreased to
$122 million ($0.20 per share) compared to $454 million ($0.73
per share) in the prior year quarter.
Quarterly Adjusted EBITDA1 of $742 million was 5% higher than the $709 million in the prior year quarter, as higher
contributions at the Cable Network Programming segment were
partially offset by lower contributions at the Television segment.
Adjusted net income attributable to Fox Corporation
stockholders2 decreased to $375 million ($0.62
per share) from the $389 million
($0.62 per share) adjusted result in
the prior year quarter.
1
|
Adjusted EBITDA is
considered a non-GAAP financial measure. See Note 1 for a
description of Adjusted EBITDA and a reconciliation of net income
to Adjusted 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.
|
FULL YEAR COMPANY RESULTS
The Company reported total full year revenues of $12.30 billion, an 8% increase from the
$11.39 billion of revenues reported
in the prior year. The increase in revenues was attributable to
gains in all revenue categories with growth principally driven by
the Television segment. The increase in revenues also reflects the
operation of the FOX Studio Lot for third parties and the
consolidation of Credible Labs Inc. at the Other, Corporate and
Eliminations segment.
Full year net income decreased to $1.06
billion from the $1.64 billion
in the prior year, primarily due to higher operating expenses,
higher impairment and restructuring charges and higher selling,
general and administrative expenses. The increase in operating
expenses primarily reflects higher programming rights amortization
and production costs, including the Company's broadcast of Super
Bowl LIV. The increase in impairment and restructuring charges
primarily reflects the negotiated settlement to exit the Company's
rights agreement with the USGA. The increase in selling, general
and administrative expenses primarily reflects higher costs related
to FOX operating as a standalone public company following the
Distribution3 in the third quarter of 2019. Net income
attributable to Fox Corporation stockholders decreased to
$1.00 billion ($1.62 per share) compared to $1.60 billion ($2.57 per share) in the prior year.
Adjusted EBITDA of $2.78 billion
was 4% higher than the $2.68 billion
in the prior year, as higher contributions at the Cable Network
Programming segment were partially offset by lower contributions at
the Television segment and the Other, Corporate and Eliminations
segment, the latter of which primarily reflects higher costs
related to FOX operating as a standalone public company following
the Distribution in the third quarter of 2019. Adjusted net income
attributable to Fox Corporation stockholders decreased to
$1.53 billion ($2.48 per share) from the $1.64 billion ($2.63 per share) adjusted result in the prior
year.
3
|
On March 19, 2019,
the Company became a standalone publicly traded company through the
pro rata distribution by Twenty-First Century Fox, Inc. (now known
as TFCF Corporation) ("21CF") of all of the issued and outstanding
common stock of FOX to 21CF stockholders (other than holders that
were subsidiaries of 21CF) (the "Distribution"). See page 6 for
additional detail.
|
REVIEW OF
OPERATING RESULTS
|
|
|
|
Three Months
Ended
June
30,
|
|
|
Twelve Months
Ended
June
30,
|
|
|
|
2020
|
|
|
2019
|
|
|
2020
|
|
|
2019
|
|
|
|
$
Millions
|
|
Revenues by
Component:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Affiliate
fee
|
|
$
|
1,519
|
|
|
$
|
1,410
|
|
|
$
|
5,908
|
|
|
$
|
5,512
|
|
Advertising
|
|
|
712
|
|
|
|
918
|
|
|
|
5,333
|
|
|
|
5,056
|
|
Other
|
|
|
187
|
|
|
|
185
|
|
|
|
1,062
|
|
|
|
821
|
|
Total
revenues
|
|
$
|
2,418
|
|
|
$
|
2,513
|
|
|
$
|
12,303
|
|
|
$
|
11,389
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cable Network
Programming
|
|
$
|
1,271
|
|
|
$
|
1,299
|
|
|
$
|
5,492
|
|
|
$
|
5,381
|
|
Television
|
|
|
1,113
|
|
|
|
1,183
|
|
|
|
6,661
|
|
|
|
5,979
|
|
Other, Corporate and
Eliminations
|
|
|
34
|
|
|
|
31
|
|
|
|
150
|
|
|
|
29
|
|
Total
revenues
|
|
$
|
2,418
|
|
|
$
|
2,513
|
|
|
$
|
12,303
|
|
|
$
|
11,389
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment
EBITDA:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cable Network
Programming
|
|
$
|
674
|
|
|
$
|
602
|
|
|
$
|
2,706
|
|
|
$
|
2,495
|
|
Television
|
|
|
169
|
|
|
|
214
|
|
|
|
430
|
|
|
|
470
|
|
Other, Corporate and
Eliminations
|
|
|
(101)
|
|
|
|
(107)
|
|
|
|
(357)
|
|
|
|
(284)
|
|
Adjusted
EBITDA4
|
|
$
|
742
|
|
|
$
|
709
|
|
|
$
|
2,779
|
|
|
$
|
2,681
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4
|
Adjusted EBITDA is
considered a non-GAAP financial measure. See Note 1 for a
description of Adjusted EBITDA and a reconciliation of net income
to Adjusted EBITDA.
|
CABLE NETWORK
PROGRAMMING
|
|
|
Three Months
Ended
June
30,
|
|
|
Twelve Months
Ended
June
30,
|
|
|
|
2020
|
|
|
2019
|
|
|
2020
|
|
|
2019
|
|
|
|
$
Millions
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Affiliate
fee
|
|
$
|
968
|
|
|
$
|
959
|
|
|
$
|
3,870
|
|
|
$
|
3,804
|
|
Advertising
|
|
|
269
|
|
|
|
291
|
|
|
|
1,164
|
|
|
|
1,184
|
|
Other
|
|
|
34
|
|
|
|
49
|
|
|
|
458
|
|
|
|
393
|
|
Total
revenues
|
|
|
1,271
|
|
|
|
1,299
|
|
|
|
5,492
|
|
|
|
5,381
|
|
Operating
expenses
|
|
|
(450)
|
|
|
|
(581)
|
|
|
|
(2,316)
|
|
|
|
(2,477)
|
|
Selling, general and
administrative
|
|
|
(152)
|
|
|
|
(125)
|
|
|
|
(494)
|
|
|
|
(447)
|
|
Amortization of cable
distribution investments
|
|
|
5
|
|
|
|
9
|
|
|
|
24
|
|
|
|
38
|
|
Segment
EBITDA
|
|
$
|
674
|
|
|
$
|
602
|
|
|
$
|
2,706
|
|
|
$
|
2,495
|
|
Three Months Ended June 30,
2020
Cable Network Programming reported quarterly segment revenues of
$1.27 billion, a decrease of
$28 million or 2% from the amount
reported in the prior year quarter, as lower advertising and other
revenues were partially offset by higher affiliate revenues.
Advertising revenues decreased $22
million or 8%, primarily due to the postponement of live
events at FS1 as a result of COVID-19, partially offset by higher
advertising revenues at FOX News Media. Other revenues decreased
$15 million or 31%, primarily due to
lower revenues at FOX Sports as a result of COVID-19, partially
offset by higher revenues at FOX News Media. Affiliate revenues
increased $9 million or 1% as
contractual price increases, including the impact of distribution
agreement renewals, were partially offset by net subscriber
declines.
Cable Network Programming reported quarterly segment EBITDA of
$674 million, an increase of
$72 million or 12% from the amount
reported in the prior year quarter, primarily due to lower
expenses. The decrease in expenses was primarily due to lower
programming rights amortization and production costs at FS1 due to
the postponement of live events as a result of COVID-19 and the
absence of the FIFA Women's World Cup in the current year
quarter, partially offset by the write-down of certain sports
programming rights and increased digital investment and
newsgathering costs at FOX News Media.
Twelve Months Ended June 30,
2020
Cable Network Programming reported full year segment revenues of
$5.49 billion, an increase of
$111 million or 2% from the amount
reported in the prior year, as higher affiliate and other revenues
were partially offset by lower advertising revenues. Affiliate
revenues increased $66 million or 2%
as contractual price increases, including the impact of
distribution agreement renewals, were partially offset by net
subscriber declines. Other revenues increased $65 million or 17%, primarily due to higher
sublicensing revenues and the addition of pay-per-view boxing
content at FOX Sports and higher revenues at FOX News Media.
Advertising revenues decreased $20
million or 2%, primarily due to the postponement of live
events at FS1 as a result of COVID-19, fewer FIFA World Cup
matches at FOX Sports compared to the prior year and the absence of
Ultimate Fighting Championship ("UFC") content in the current year,
partially offset by higher digital advertising revenues at FOX News
Media.
Cable Network Programming reported full year segment EBITDA of
$2.71 billion, an increase of
$211 million or 8% from the amount
reported in the prior year, primarily due to the revenue increases
noted above and lower expenses. The decrease in expenses primarily
reflects lower programming rights amortization and production costs
at FS1, reflecting the postponement of live events as a result of
COVID-19, the absence of UFC content in the current year and fewer
FIFA World Cup matches compared to the prior year, partially
offset by increased digital investment and newsgathering costs at
FOX News Media and the write-down of certain sports programming
rights at FOX Sports.
TELEVISION
|
|
|
Three Months
Ended
June
30,
|
|
|
Twelve Months
Ended
June
30,
|
|
|
|
2020
|
|
|
2019
|
|
|
2020
|
|
|
2019
|
|
|
|
$
Millions
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Advertising
|
|
$
|
443
|
|
|
$
|
627
|
|
|
$
|
4,169
|
|
|
$
|
3,872
|
|
Affiliate
fee
|
|
|
551
|
|
|
|
451
|
|
|
|
2,038
|
|
|
|
1,708
|
|
Other
|
|
|
119
|
|
|
|
105
|
|
|
|
454
|
|
|
|
399
|
|
Total
revenues
|
|
|
1,113
|
|
|
|
1,183
|
|
|
|
6,661
|
|
|
|
5,979
|
|
Operating
expenses
|
|
|
(724)
|
|
|
|
(772)
|
|
|
|
(5,437)
|
|
|
|
(4,847)
|
|
Selling, general and
administrative
|
|
|
(220)
|
|
|
|
(197)
|
|
|
|
(794)
|
|
|
|
(662)
|
|
Segment
EBITDA
|
|
$
|
169
|
|
|
$
|
214
|
|
|
$
|
430
|
|
|
$
|
470
|
|
Three Months Ended June 30,
2020
Television reported quarterly segment revenues of $1.11 billion, a decrease of $70 million or 6% from the amount reported in the
prior year quarter, as lower advertising revenues were partially
offset by higher affiliate and other revenues. Advertising revenues
decreased $184 million or 29%,
primarily as a result of COVID-19, partially offset by the
consolidation of Tubi, Inc. ("Tubi"). The COVID-19 impact included
a weaker local advertising market at the FOX Television Stations,
the postponement of live events at FOX Sports and lower ratings due
to fewer hours of scripted programming at FOX Entertainment.
Affiliate revenues increased $100
million or 22% due to increases in fees from third-party FOX
affiliates and higher average rates per subscriber, partially
offset by net subscriber declines at the Company's owned and
operated television stations. Other revenues increased $14 million or 13%, primarily reflecting the
consolidation of Bento Box Entertainment, LLC ("Bento Box"), partially offset by lower digital
licensing revenues.
Television reported quarterly segment EBITDA of $169 million, a decrease of $45 million or 21% from the amount reported in
the prior year quarter, as the lower revenues noted above were
partially offset by lower expenses. The decrease in expenses was
primarily due to lower programming rights amortization as a result
of COVID-19, including the postponement of live events at FOX
Sports and fewer hours of scripted programming at FOX
Entertainment, and the absence of the FIFA Women's World Cup
in the current year quarter, partially offset by the consolidation
of Tubi and Bento Box.
Twelve Months Ended June 30,
2020
Television reported full year segment revenues of $6.66 billion, an increase of $682 million or 11% from the amount reported in
the prior year. Affiliate revenues increased $330 million or 19% due to increases in fees from
third-party FOX affiliates and higher average rates per subscriber,
partially offset by net subscriber declines at the Company's owned
and operated television stations. Advertising revenues increased
$297 million or 8%, led by the
broadcast of Super Bowl LIV, the airing of two additional
MLB World Series games in the current year and the
consolidation of Tubi, partially offset by the impact of COVID-19,
including a weaker local advertising market at the FOX Television
Stations and the postponement of live events at FOX Sports, and
fewer FIFA World Cup matches compared to the prior year. The
growth in advertising revenues was also negatively impacted by the
difficult comparison to the record political advertising revenues
generated at the FOX Television Stations during the midterm
elections in the prior year. Other revenues increased $55 million or 14%, primarily reflecting the
consolidation of Bento Box,
partially offset by lower digital licensing revenues.
Television reported full year segment EBITDA of $430 million, a decrease of $40 million or 9% from the amount reported in the
prior year, as the revenue increases noted above were more than
offset by higher expenses. The increase in expenses primarily
reflects higher programming rights amortization and production
costs at FOX Sports, including the impact of Super Bowl LIV,
contractual annual rights escalators and costs related to the
launch of WWE Friday Night SmackDown, as well as the
consolidation of Bento Box and Tubi.
Partially offsetting the increase in expenses at FOX Sports were
fewer FIFA World Cup matches comparted to the prior year and
the postponement of live events due to COVID-19.
DIVIDEND
The Company has declared a dividend of $0.23 per Class A and Class B share. This
dividend is payable on October 7,
2020 with a record date for determining dividend
entitlements of September 2,
2020.
IMPACT OF COVID-19
The outbreak of the COVID-19 pandemic has resulted in widespread
and continuing negative impacts on the macroeconomic environment
and disruption to the Company's business. Weak economic conditions
and increased volatility and disruption in the financial markets
pose risks to the Company and its business partners, including
advertisers whose expenditures tend to reflect overall economic
conditions. The COVID-19 pandemic has caused some of the Company's
advertisers (including, in particular, local market advertisers) to
reduce their spending, and future declines in the economic
prospects of advertisers or the economy in general could negatively
impact their advertising expenditures further. Depending on the
duration and severity of the recession, it could lead to changes in
consumer behavior, including increasing numbers of consumers
canceling or foregoing subscriptions to MVPD services, that
adversely affect the Company's affiliate fee and advertising
revenues. In addition, the Company's business depends on the volume
and popularity of the content it distributes, particularly sports
content. Following the COVID-19 outbreak, sports events to which
the Company has broadcast rights have been cancelled or postponed
and the production of certain entertainment content the Company
distributes has been suspended. Although some of these sports
events and productions have resumed or are expected to resume
during the first quarter of fiscal 2021, there may be additional
content disruptions in the future. Depending on their duration and
severity, these disruptions could materially adversely affect the
Company's future advertising revenues and, over a longer period of
time, its future affiliate fee revenues. To the extent the pandemic
further negatively impacts the Company's ability to air sports
events, particularly MLB, NFL or college sports, it could result in
a significantly greater adverse effect on the Company's business,
financial condition or results of operations than the Company has
experienced thus far. In addition, shifting sports schedules may
negatively impact the Company's ability to attract viewers and
advertisers to its sports and entertainment programming. If there
is a significant decline in the Company's estimated revenues or the
expected popularity of its programming, it could lead to a downward
revision in the value of, among other things, the Company's
reporting units, indefinite-lived intangible assets, programming
rights and long-lived assets and result in a non-cash impairment
charge that is material to the Company's reported net earnings.
DISTRIBUTION
On March 19, 2019, the Company
became a standalone publicly traded company through the pro rata
distribution by Twenty-First Century Fox, Inc. (now known as TFCF
Corporation) ("21CF") of all of the issued and outstanding common
stock of FOX to 21CF stockholders (other than holders that were
subsidiaries of 21CF) (the "Distribution") in accordance with the
Amended and Restated Distribution Agreement and Plan of Merger,
dated as of June 20, 2018, by and
between 21CF and 21CF Distribution Merger Sub, Inc. Following the
Distribution, approximately 354 million and approximately 266
million shares of the Company's class A common stock and class B
common stock, respectively, began trading independently on The
Nasdaq Global Select Market. In connection with the Distribution,
the Company entered into the Separation and Distribution Agreement,
dated as of March 19, 2019 with 21CF,
which effected the internal restructuring (the "Separation")
whereby 21CF transferred to FOX a portfolio of 21CF's news, sports
and broadcast businesses, including FOX News Media (consisting of
FOX News and FOX Business), FOX Entertainment, FOX Sports, FOX
Television Stations, and sports cable networks FS1, FS2, FOX
Deportes and Big Ten Network, and certain other assets, and FOX
assumed from 21CF the liabilities associated with such businesses
and certain other liabilities. The Separation and the Distribution
were effected as part of a series of transactions contemplated by
the Amended and Restated Merger Agreement and Plan of Merger, dated
as of June 20, 2018, by and among
21CF, The Walt Disney Company ("Disney") and certain subsidiaries
of Disney, pursuant to which, among other things, 21CF became a
wholly-owned subsidiary of Disney.
BASIS OF PRESENTATION
The Consolidated Financial Statements of the Company have been
prepared in accordance with United
States ("U.S.") generally accepted accounting principles
("GAAP").
The Company's financial statements as of and for the three and
twelve months ended June 30, 2020 and
2019 are presented on a consolidated basis. The Company's
Consolidated Financial Statements for the three and twelve months
ended June 30, 2020 and for the three
months ended June 30, 2019 reflect
the Company's results of operations and cash flows as a standalone
company, and the Company's Consolidated Balance Sheets as of
June 30, 2020 and 2019 consist of the
Company's consolidated balances.
Prior to the Distribution, which occurred on March 19, 2019, the Company's financial
statements were derived from the consolidated financial statements
and accounting records of 21CF. The Consolidated Statement of
Operations for the twelve months ended June
30, 2019 include, for the periods prior to March 19, 2019, 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 Consolidated Financial
Statements, including the assumptions regarding allocating general
corporate expenses from 21CF, are reasonable. Nevertheless, the
Consolidated Financial Statements for the twelve months ended
June 30, 2019 may not include all of
the actual expenses that would have been incurred by FOX and may
not reflect FOX's consolidated results of operations and cash flows
had it been a standalone company during the entirety of the period
presented. Actual costs that would have been incurred if FOX had
been a standalone company would depend on multiple factors,
including organizational structure and strategic decisions made in
various areas, including information technology and infrastructure.
The Consolidated Statement of Operations includes corporate
allocations of approximately $270
million for the twelve months ended June 30, 2019 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, including the impact of COVID-19 and other widespread
health emergencies or pandemics and measures to contain their
spread. 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 Annual Report on Form 10-K for the fiscal year ended
June 30, 2019 filed with the SEC on
August 9, 2019, and subsequent
Quarterly Reports on Form 10-Q.
Statements in this press release speak only as of the date they
were made, and the Company undertakes no duty to update or release
any revisions to any forward-looking statement made in this press
release or to report any events or circumstances after the date of
this press release or to reflect the occurrence of unanticipated
events or to conform such statements to actual results or changes
in the Company's expectations, except as required by law.
To access a copy of this press release through the Internet,
access Fox Corporation's corporate website located at
http://www.foxcorporation.com.
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
|
|
Three Months
Ended
June
30,
|
|
|
Twelve Months
Ended
June
30,
|
|
|
|
2020
|
|
|
2019
|
|
|
2020
|
|
|
2019
|
|
|
|
$ Millions, except
per share amounts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
2,418
|
|
|
$
|
2,513
|
|
|
$
|
12,303
|
|
|
$
|
11,389
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses
|
|
|
(1,187)
|
|
|
|
(1,358)
|
|
|
|
(7,807)
|
|
|
|
(7,327)
|
|
Selling, general and
administrative
|
|
|
(494)
|
|
|
|
(455)
|
|
|
|
(1,741)
|
|
|
|
(1,419)
|
|
Depreciation and
amortization
|
|
|
(94)
|
|
|
|
(60)
|
|
|
|
(258)
|
|
|
|
(212)
|
|
Impairment and
restructuring charges
|
|
|
(442)
|
|
|
|
(12)
|
|
|
|
(451)
|
|
|
|
(26)
|
|
Interest
expense
|
|
|
(100)
|
|
|
|
(91)
|
|
|
|
(369)
|
|
|
|
(203)
|
|
Interest
income
|
|
|
2
|
|
|
|
22
|
|
|
|
35
|
|
|
|
41
|
|
Other, net
|
|
|
97
|
|
|
|
97
|
|
|
|
(248)
|
|
|
|
(19)
|
|
Income before
income tax expense
|
|
|
200
|
|
|
|
656
|
|
|
|
1,464
|
|
|
|
2,224
|
|
Income tax
expense
|
|
|
(55)
|
|
|
|
(191)
|
|
|
|
(402)
|
|
|
|
(581)
|
|
Net
income
|
|
|
145
|
|
|
|
465
|
|
|
|
1,062
|
|
|
|
1,643
|
|
Less: Net income
attributable to noncontrolling interests
|
|
|
(23)
|
|
|
|
(11)
|
|
|
|
(63)
|
|
|
|
(48)
|
|
Net income
attributable to Fox Corporation stockholders
|
|
$
|
122
|
|
|
$
|
454
|
|
|
$
|
999
|
|
|
$
|
1,595
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares:
|
|
|
609
|
|
|
|
624
|
|
|
|
616
|
|
|
|
621
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to Fox Corporation stockholders per share:
|
|
$
|
0.20
|
|
|
$
|
0.73
|
|
|
$
|
1.62
|
|
|
$
|
2.57
|
|
CONSOLIDATED
BALANCE SHEETS
|
|
|
June 30,
2020
|
|
|
June 30,
2019
|
|
Assets:
|
|
$
Millions
|
|
Current
assets:
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
4,645
|
|
|
$
|
3,234
|
|
Receivables,
net
|
|
|
1,888
|
|
|
|
1,967
|
|
Inventories,
net
|
|
|
856
|
|
|
|
1,129
|
|
Other
|
|
|
97
|
|
|
|
148
|
|
Total current
assets
|
|
|
7,486
|
|
|
|
6,478
|
|
|
|
|
|
|
|
|
|
|
Non-current
assets:
|
|
|
|
|
|
|
|
|
Property, plant and
equipment, net
|
|
|
1,498
|
|
|
|
1,313
|
|
Intangible assets,
net
|
|
|
3,198
|
|
|
|
2,851
|
|
Goodwill
|
|
|
3,409
|
|
|
|
2,691
|
|
Deferred tax
assets
|
|
|
4,358
|
|
|
|
4,651
|
|
Other non-current
assets
|
|
|
1,801
|
|
|
|
1,525
|
|
Total
assets
|
|
$
|
21,750
|
|
|
$
|
19,509
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Equity:
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
|
Accounts payable,
accrued expenses and other current liabilities
|
|
$
|
1,906
|
|
|
$
|
1,712
|
|
|
|
|
|
|
|
|
|
|
Non-current
liabilities:
|
|
|
|
|
|
|
|
|
Borrowings
|
|
|
7,946
|
|
|
|
6,751
|
|
Other
liabilities
|
|
|
1,482
|
|
|
|
899
|
|
Redeemable
noncontrolling interests
|
|
|
305
|
|
|
|
189
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
|
Equity:
|
|
|
|
|
|
|
|
|
Class A common stock,
$0.01 par value
|
|
|
3
|
|
|
|
4
|
|
Class B common stock,
$0.01 par value
|
|
|
3
|
|
|
|
3
|
|
Additional paid-in
capital
|
|
|
9,831
|
|
|
|
9,891
|
|
Retained
earnings
|
|
|
674
|
|
|
|
357
|
|
Accumulated other
comprehensive loss
|
|
|
(417)
|
|
|
|
(308)
|
|
Total Fox Corporation stockholders' equity
|
|
|
10,094
|
|
|
|
9,947
|
|
Noncontrolling
interests
|
|
|
17
|
|
|
|
11
|
|
Total equity
|
|
|
10,111
|
|
|
|
9,958
|
|
Total liabilities
and equity
|
|
$
|
21,750
|
|
|
$
|
19,509
|
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|
|
Twelve Months
Ended
June
30,
|
|
|
|
2020
|
|
|
2019
|
|
|
|
$
Millions
|
|
Operating
Activities:
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
1,062
|
|
|
$
|
1,643
|
|
Adjustments to
reconcile net income to cash provided by operating
activities
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
258
|
|
|
|
212
|
|
Amortization of cable
distribution investments
|
|
|
24
|
|
|
|
38
|
|
Impairment and
restructuring charges, net of termination payments
|
|
|
133
|
|
|
|
26
|
|
Equity-based
compensation
|
|
|
137
|
|
|
|
36
|
|
Other, net
|
|
|
248
|
|
|
|
19
|
|
Deferred income
taxes
|
|
|
283
|
|
|
|
386
|
|
Change in operating
assets and liabilities, net of acquisitions and
dispositions
|
|
|
|
|
|
|
|
|
Receivables and
other assets
|
|
|
345
|
|
|
|
(166)
|
|
Inventories net
of program rights payable
|
|
|
181
|
|
|
|
197
|
|
Accounts
payable and other liabilities
|
|
|
(306)
|
|
|
|
133
|
|
Net cash provided
by operating activities
|
|
|
2,365
|
|
|
|
2,524
|
|
|
|
|
|
|
|
|
|
|
Investing
Activities:
|
|
|
|
|
|
|
|
|
Property, plant and
equipment
|
|
|
(359)
|
|
|
|
(235)
|
|
Acquisitions, net of
cash acquired
|
|
|
(1,061)
|
|
|
|
-
|
|
Sale of
investments
|
|
|
349
|
|
|
|
-
|
|
Purchase of
investments
|
|
|
(103)
|
|
|
|
(338)
|
|
Other investing
activities, net
|
|
|
74
|
|
|
|
(64)
|
|
Net cash used in
investing activities
|
|
|
(1,100)
|
|
|
|
(637)
|
|
|
|
|
|
|
|
|
|
|
Financing
Activities:
|
|
|
|
|
|
|
|
|
Borrowings
|
|
|
1,191
|
|
|
|
6,750
|
|
Net transfers to
Twenty-First Century Fox, Inc.
|
|
|
-
|
|
|
|
(1,233)
|
|
Net dividend paid to
Twenty-First Century Fox, Inc.
|
|
|
-
|
|
|
|
(6,500)
|
|
Repurchase of
shares
|
|
|
(600)
|
|
|
|
-
|
|
Dividends paid and
distributions
|
|
|
(335)
|
|
|
|
(188)
|
|
Other financing
activities, net
|
|
|
(110)
|
|
|
|
18
|
|
Net cash provided
by (used in) financing activities
|
|
|
146
|
|
|
|
(1,153)
|
|
|
|
|
|
|
|
|
|
|
Net increase in cash
and cash equivalents
|
|
|
1,411
|
|
|
|
734
|
|
Cash and cash
equivalents, beginning of year
|
|
|
3,234
|
|
|
|
2,500
|
|
Cash and cash
equivalents, end of year
|
|
$
|
4,645
|
|
|
$
|
3,234
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOTE 1 – ADJUSTED EBITDA
Beginning with the announcement of the Company's financial
results for the first quarter of fiscal 2020, the Company has
renamed as "Adjusted EBITDA" the measure that it had previously
referred to as "Total Segment EBITDA" and, prior to the
announcement of the Company's financial results for the third
quarter of fiscal 2019, as "Total Segment OIBDA." The definition of
this measure has not changed: 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, Impairment and restructuring charges, Interest
expense, Interest income, Other, net and Income tax expense.
Management believes that information about Adjusted EBITDA
assists all users of the Company's 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 and the impact of
COVID-19).
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 twelve months ended June 30,
2020 and 2019:
|
|
Three Months
Ended
June
30,
|
|
|
Twelve Months
Ended
June
30,
|
|
|
|
2020
|
|
|
2019
|
|
|
2020
|
|
|
2019
|
|
|
|
$
Millions
|
|
Net
income
|
|
$
|
145
|
|
|
$
|
465
|
|
|
$
|
1,062
|
|
|
$
|
1,643
|
|
Add:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of cable
distribution investments
|
|
|
5
|
|
|
|
9
|
|
|
|
24
|
|
|
|
38
|
|
Depreciation and
amortization
|
|
|
94
|
|
|
|
60
|
|
|
|
258
|
|
|
|
212
|
|
Impairment and
restructuring charges
|
|
|
442
|
|
|
|
12
|
|
|
|
451
|
|
|
|
26
|
|
Interest
expense
|
|
|
100
|
|
|
|
91
|
|
|
|
369
|
|
|
|
203
|
|
Interest
income
|
|
|
(2)
|
|
|
|
(22)
|
|
|
|
(35)
|
|
|
|
(41)
|
|
Other, net
|
|
|
(97)
|
|
|
|
(97)
|
|
|
|
248
|
|
|
|
19
|
|
Income tax
expense
|
|
|
55
|
|
|
|
191
|
|
|
|
402
|
|
|
|
581
|
|
Adjusted
EBITDA
|
|
$
|
742
|
|
|
$
|
709
|
|
|
$
|
2,779
|
|
|
$
|
2,681
|
|
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 to
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 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 and EPS attributable
to Fox Corporation stockholders to Adjusted Net Income and Adjusted
EPS for the three months ended June 30,
2020 and 2019:
|
|
Three Months
Ended
|
|
|
|
June 30,
2020
|
|
|
June 30,
2019
|
|
|
|
Income
|
|
|
EPS
|
|
|
Income
|
|
|
EPS
|
|
|
|
$ Millions, except per share data
|
|
Net
income
|
|
$
|
145
|
|
|
|
|
|
|
$
|
465
|
|
|
|
|
|
Less: Net income
attributable to
noncontrolling interests
|
|
|
(23)
|
|
|
|
|
|
|
|
(11)
|
|
|
|
|
|
Net income
attributable to Fox
Corporation stockholders
|
|
$
|
122
|
|
|
$
|
0.20
|
|
|
$
|
454
|
|
|
$
|
0.73
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment and
restructuring charges
|
|
|
442
|
|
|
|
0.73
|
|
|
|
12
|
|
|
|
0.02
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other,
net5
|
|
|
(101)
|
|
|
|
(0.17)
|
|
|
|
(100)
|
|
|
|
(0.16)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax
provision
|
|
|
(88)
|
|
|
|
(0.14)
|
|
|
|
23
|
|
|
|
0.04
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rounding
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(0.01)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As
adjusted
|
|
$
|
375
|
|
|
$
|
0.62
|
|
|
$
|
389
|
|
|
$
|
0.62
|
|
5
|
Other, net
presented above excludes equity losses of affiliates.
|
The following table reconciles net income and EPS attributable
to Fox Corporation stockholders to Adjusted Net Income and Adjusted
EPS for the twelve months ended June 30,
2020 and 2019:
|
|
Twelve Months
Ended
|
|
|
|
June 30,
2020
|
|
|
June 30,
2019
|
|
|
|
Income
|
|
|
EPS
|
|
|
Income
|
|
|
EPS
|
|
|
|
$ Millions, except per share data
|
|
Net
income
|
|
$
|
1,062
|
|
|
|
|
|
|
$
|
1,643
|
|
|
|
|
|
Less: Net income
attributable to
noncontrolling interests
|
|
|
(63)
|
|
|
|
|
|
|
|
(48)
|
|
|
|
|
|
Net income
attributable to Fox
Corporation stockholders
|
|
$
|
999
|
|
|
$
|
1.62
|
|
|
$
|
1,595
|
|
|
$
|
2.57
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment and
restructuring charges
|
|
|
451
|
|
|
|
0.73
|
|
|
|
26
|
|
|
|
0.04
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other,
net6
|
|
|
231
|
|
|
|
0.38
|
|
|
|
15
|
|
|
|
0.02
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax
provision
|
|
|
(153)
|
|
|
|
(0.25)
|
|
|
|
(1)
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As
adjusted
|
|
$
|
1,528
|
|
|
$
|
2.48
|
|
|
$
|
1,635
|
|
|
$
|
2.63
|
|
6
|
Other, net presented
above excludes equity losses of affiliates.
|
View original content to download
multimedia:http://www.prnewswire.com/news-releases/fox-reports-fourth-quarter-fiscal-2020-net-income-of-145-million-earnings-per-share-of-0-20--adjusted-ebitda-of-742-million-and-adjusted-earnings-per-share-of-0-62--301106050.html
SOURCE Fox Corporation