Fox Corp

Previous wording

•Overview of the Company’s Business—This section provides a general description of the Company’s businesses, as well as developments that occurred during the three and six months ended December 31, 2023 and 2022 that the Company believes are important in understanding its results of operations and financial condition or to disclose known trends.

Current wording

•Overview of the Company’s Business—This section provides a general description of the Company’s businesses, as well as developments that occurred during the three and nine months ended March 31, 2024 and 2023 that the Company believes are important in understanding its results of operations and financial condition or to disclose known trends.

Previous wording

•Results of Operations—This section provides an analysis of the Company’s results of operations for the three and six months ended December 31, 2023 and 2022. This analysis is presented on both a consolidated and a segment basis. In addition, a brief description is provided of significant transactions and events that impact the comparability of the results being analyzed.

Current wording

•Results of Operations—This section provides an analysis of the Company’s results of operations for the three and nine months ended March 31, 2024 and 2023. This analysis is presented on both a consolidated and a segment basis. In addition, a brief description is provided of significant transactions and events that impact the comparability of the results being analyzed.

Previous wording

•Liquidity and Capital Resources—This section provides an analysis of the Company’s cash flows for the six months ended December 31, 2023 and 2022, as well as a discussion of the Company’s outstanding debt and commitments, both firm and contingent, that existed as of December 31, 2023. Included in the discussion of outstanding debt is a discussion of the amount of financial capacity available to fund the Company’s future commitments and obligations, as well as a discussion of other financing arrangements.

Current wording

•Liquidity and Capital Resources—This section provides an analysis of the Company’s cash flows for the nine months ended March 31, 2024 and 2023, as well as a discussion of the Company’s outstanding debt and commitments, both firm and contingent, that existed as of March 31, 2024. Included in the discussion of outstanding debt is a discussion of the amount of financial capacity available to fund the Company’s future commitments and obligations, as well as a discussion of other financing arrangements.

Previous wording

•Caution Concerning Forward-Looking Statements—This section provides a description of the use of forward-looking information appearing in this Quarterly Report on Form 10-Q, including in Management’s Discussion and Analysis of Financial Condition and Results of Operations. Such information is based on management’s current expectations about future events which are subject to change and to inherent risks and uncertainties. Refer to Part I., Item 1A. “Risk Factors” in the 2023 Form 10-K, Part II., Item 1A. “Risk Factors” in the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2023, as filed with the SEC on November 2, 2023 (the “Q1 2024 Form 10-Q”), and Part II., Item 1A, “Risk Factors” in this Quarterly Report on Form 10-Q, for a discussion of the risk factors applicable to the Company.

Current wording

•Caution Concerning Forward-Looking Statements—This section provides a description of the use of forward-looking information appearing in this Quarterly Report on Form 10-Q, including in Management’s Discussion and Analysis of Financial Condition and Results of Operations. Such information is based on management’s current expectations about future events which are subject to change and to inherent risks and uncertainties. For a discussion of the risk factors applicable to the Company, refer to (i) Part I., Item 1A. “Risk Factors” in the 2023 Form 10-K and (ii) Part II., Item 1A. “Risk Factors” in the Company’s Quarterly Reports on Form 10-Q for the fiscal quarter ended September 30, 2023, as filed with the SEC on November 2, 2023 (the “Q1 2024 Form 10-Q”), and the fiscal quarter ended December 31, 2023, as filed with the SEC on February 7, 2024 (the “Q2 2024 Form 10-Q”).

Previous wording

Results of Operations—For the three and six months ended December 31, 2023 versus the three and six months ended December 31, 2022.

Current wording

Results of Operations—For the three and nine months ended March 31, 2024 versus the three and nine months ended March 31, 2023.

Previous wording

The following table sets forth the Company’s operating results for the three and six months ended December 31, 2023, as compared to the three and six months ended December 31, 2022:

Current wording

The following table sets forth the Company’s operating results for the three and nine months ended March 31, 2024, as compared to the three and nine months ended March 31, 2023:

Previous wording

Interest expense, net—Interest expense, net increased 20% for the three months ended December 31, 2023, as compared to the corresponding period of fiscal 2023, primarily due to the issuance of $1.25 billion of senior notes in October 2023 (See Note 5—Borrowings to the accompanying Financial Statements). Interest expense, net decreased 11% for the six months ended December 31, 2023, as compared to the corresponding period of fiscal 2023, as the increase in interest expense due to the issuance of $1.25 billion of senior notes in October 2023 was more than offset by higher interest income as a result of higher interest rates.

Current wording

Interest expense, net— Interest expense, net decreased $14 million or 8% for the nine months ended March 31, 2024, as compared to the corresponding period of fiscal 2023, as the increase in interest expense due to the issuance of $1.25 billion of senior notes in October 2023 (See Note 5—Borrowings to the accompanying Financial Statements) was more than offset by higher interest income as a result of higher interest rates.

Previous wording

Other, net—See Note 11—Additional Financial Information to the accompanying Financial Statements under the heading “Other, net.”

Current wording

Non-operating other, net—See Note 11—Additional Financial Information to the accompanying Financial Statements under the heading “Non-Operating Other, net.”

Previous wording

Income tax expense—The Company’s tax provision and related effective tax ratefor thethree and six months ended December 31, 2023 of 12% and 23%, respectively, was different than thestatutory rate of 21% primarily due to state tax law changes.

Current wording

Income tax (expense) benefit—The Company’s tax provision and related effective tax rate for the three and nine months ended March 31, 2024 of 27% and 25%, respectively, was higher than the statutory rate of 21% primarily due to state taxes.

Previous wording

The Company's tax provision and related effective tax rate of 27% for thethree and six months ended December 31, 2022 was higher than the statutory rate of 21% primarily due to state taxes and other permanent items.

Current wording

The Company's tax provision and related effective tax rate for thethree and nine months ended March 31, 2023 was different than the statutory rate of 21% primarily due to state taxes and the impact of other permanent items.

Previous wording

Net income—Net income decreased 64% and 43% for the three and six months ended December 31, 2023, respectively, as compared to the corresponding periods of fiscal 2023, primarily due to lower Segment EBITDA (as defined below) and the change in fair value of the Company’s investments in equity securities, partially offset by lower expenses for income tax and, for the six months ended December 31, 2023, the U.K. Newspaper Matters Indemnity (See Note 11—Additional Financial Information to the accompanying Financial Statements under the heading “Other, net”).

Current wording

Net income (loss)—The Company recorded net income of $704 million and $1.2 billion for the three and nine months ended March 31, 2024, respectively, as compared to a net loss of $50 million and net income of $884 million for the three and nine months ended March 31, 2023, respectively. The increases were primarily due to the absence of the fiscal 2023 legal settlement costs at FOX News Media (See Note 11—Additional Financial Information to the accompanying Financial Statements under the heading “Restructuring, Impairment and Other Corporate Matters”) and a gain on a contribution of assets (See Note 11—Additional Financial Information to the accompanying Financial Statements under the heading “Non-Operating Other, net”), partially offset by higher provision for income tax, the net change in fair value of the Company’s investments in equity securities and, for the nine months ended March 31, 2024, lower Segment EBITDA (as defined below).

Previous wording

Segment EBITDA is defined as Revenues less Operating expenses and Selling, general and administrative expenses. Segment EBITDA does not include: Amortization of cable distribution investments, Depreciation and amortization, Impairment and restructuring charges, Interest expense, net, Other, net and Income tax expense. Management believes that Segment EBITDA is an appropriate measure for evaluating the operating performance of the Company’s business segments because it is the primary measure used by the Company’s chief operating decision maker to evaluate the performance of and allocate resources to the Company’s businesses.

Current wording

Segment EBITDA is defined as Revenues less Operating expenses and Selling, general and administrative expenses. Segment EBITDA does not include: Amortization of cable distribution investments, Depreciation and amortization, Restructuring, impairment and other corporate matters, Interest expense, net, Non-operating other, net and Income tax expense. Management believes that Segment EBITDA is an appropriate measure for evaluating the operating performance of the Company’s business segments because it is the primary measure used by the Company’s chief operating decision maker to evaluate the performance of and allocate resources to the Company’s businesses.

Previous wording

The following tables set forth the Company’s Revenues and Segment EBITDA for the three and six months ended December 31, 2023, as compared to the three and six months ended December 31, 2022:

Current wording

The following tables set forth the Company’s Revenues and Segment EBITDA for the three and nine months ended March 31, 2024, as compared to the three and nine months ended March 31, 2023:

Previous wording

Cable Network Programming (41% and 39% of the Company’s revenues for the first six months of fiscal 2024 and 2023, respectively)

Current wording

Cable Network Programming (41% and 39% of the Company’s revenues for the first nine months of fiscal 2024 and 2023, respectively)

Previous wording

Revenues at the Cable Network Programming segment increased 2% for the three months ended December 31, 2023, as compared to the corresponding period of fiscal 2023, due to higher affiliate fee and other revenues, partially offset by lower advertising revenue. Affiliate fee revenue increased as higher average rates per subscriber were partially offset by a decrease in the average number of subscribers. The decrease in advertising revenue was primarily due to lower pricing in the direct response marketplace, lower ratings and higher preemptions associated with breaking news coverage at FOX News Media. Also contributing to this decrease was the absence of the FIFA Men’s World Cup at the national sports networks in the current year. The increase in other revenues was primarily due to higher sports sublicensing revenue principally due to renewals of college sports contracts and international soccer rights.

Current wording

Revenues at the Cable Network Programming segment decreased $98 million or 6% for the three months ended March 31, 2024, as compared to the corresponding period of fiscal 2023, due to lower advertising and other revenues, partially offset by higher affiliate fee revenue. Affiliate fee revenue increased $11 million or 1% as higher average rates per subscriber were partially offset by a decrease in the average number of subscribers. The decrease of $20 million or 6% in advertising revenue was primarily due to lower digital advertising revenue and moderating direct response pricing declines at FOX News Media. Also contributing to this decrease was the absence of the March 2023 broadcast of the World Baseball Classic at the national sports networks. The decrease of $89 million or 55% in other revenues was primarily due to the timing of college sports sublicensing revenue.

Previous wording

Revenues at the Cable Network Programming segment decreased 1% for the six months ended December 31, 2023, as compared to the corresponding period of fiscal 2023, due to lower advertising and affiliate fee revenues, partially offset by higher other revenues. The decrease in affiliate fee revenue was primarily due to a decrease in the average number of subscribers partially offset by higher average rates per subscriber. The decrease in advertising revenue was primarily due to lower pricing in the direct response marketplace and lower ratings at FOX News Media, partially offset by higher pricing in the national marketplace at FOX News Media. Also contributing to this decrease was the absence of the FIFA Men’s World Cuppartially offset by the broadcast of the FIFA Women’s World Cupat the national sports networks in the current year. The increase in other revenues was primarily due to higher sports sublicensing revenue principally due to renewals of college sports contracts.

Current wording

Revenues at the Cable Network Programming segment decreased $116 million or 3% for the nine months ended March 31, 2024, as compared to the corresponding period of fiscal 2023, due to lower advertising and affiliate fee revenues, partially offset by higher other revenues. The decrease of $8 million in affiliate fee revenue was primarily due to a decrease in the average number of subscribers partially offset by higher average rates per subscriber. The decrease of $149 million or 14% in advertising revenue was primarily due to lower ratings and lower pricing in the direct response marketplace partially offset by higher pricing in the national advertising marketplace at FOX News Media. Also contributing to this decrease was the absence of the fiscal 2023 broadcast of the FIFA Men’s World Cuppartially offset by the broadcast of the FIFA Women’s World Cupat the national sports networks in the current year. The increase of $41 million or 10% in other revenues was primarily due to higher sports sublicensing revenue principally due to renewals of college sports contracts.

Previous wording

Cable Network Programming Segment EBITDA increased 7% for the six months ended December 31, 2023, as compared to the corresponding period of fiscal 2023, as the revenue decreases noted above were more than offset by lower expenses. Operating expenses decreased primarily due to lower sports programming rights amortization led by the absence of the FIFA Men’s World Cupin the current year, partially offset by the broadcast of the FIFA Women’s World Cup. Selling, general and administrative expenses decreased primarily due to lower legal costs at FOX News Media.

Current wording

Cable Network Programming Segment EBITDA increased $103 million or 5% for the nine months ended March 31, 2024, as compared to the corresponding period of fiscal 2023, as the revenue decreases noted above were more than offset by lower expenses. Operating expenses decreased $181 million or 8% primarily due to lower sports programming rights amortization and production costs, led by the absence of the fiscal 2023 broadcast of the FIFA Men’s World Cuppartially offset by the broadcast of the FIFA Women’s World Cupat the national sports networks in the current year. Selling, general and administrative expenses decreased $38 million or 8% primarily due to lower legal costs at FOX News Media.

Previous wording

Television (58% and 60% of the Company’s revenues for the first six months of fiscal 2024 and 2023, respectively)

Current wording

Television (58% and 60% of the Company’s revenues for the first nine months of fiscal 2024 and 2023, respectively)

Previous wording

Revenues at the Television segment decreased 13% for the three months ended December 31, 2023, as compared to the corresponding period of fiscal 2023, due to lower advertising and other revenues, partially offset by higher affiliate fee revenue. The decrease in advertising revenue was primarily due to the absence of the FIFA Men’s World Cupand lower political advertising revenue at the FOX Television Stations principally due to the absence of the November 2022 U.S. midterm elections, partially offset by continued growth at Tubi. The increase in affiliate fee revenue was primarily due to higher fees received from television stations that are affiliated with the FOX Network and higher average rates per subscriber partially offset by a lower average number of subscribers at the Company’s owned and operated television stations. The decrease in other revenues was primarily due to lower content revenues at the entertainment production companies principally as a result of industry guild labor disputes.

Current wording

Revenues at the Television segment decreased $537 million or 22% for the three months ended March 31, 2024, as compared to the corresponding period of fiscal 2023, due to lower advertising revenue, partially offset by higher affiliate fee and other revenues. The decrease of $620 million or 40% in advertising revenue was primarily due to the absence of the February 2023 broadcast of Super Bowl LVII and fewer NFL games in the current year quarter, partially offset by continued growth at Tubi. The increase of $70 million or 9% in affiliate fee revenue was primarily due to higher fees received from television stations that are affiliated with the FOX Network and higher average rates per subscriber partially offset by a lower average number of subscribers at the Company’s owned and operated television stations. The increase of $13 million or 9% in other revenues was primarily due to the timing of deliveries at FOX's entertainment production companies.

Previous wording

Revenues at the Television segment decreased 7% for the six months ended December 31, 2023, as compared to the corresponding period of fiscal 2023, due to lower advertising and other revenues, partially offset by higher affiliate fee revenue. The decrease in advertising revenue was primarily due to lower political advertising revenue at the FOX Television Stations principally due to the absence of the November 2022 U.S. midterm elections, the absence of the FIFA Men’s World Cup and lower ratings at the FOX Network, partially offset by continued growth at Tubi and the broadcast of the FIFA Women’s World Cup. The increase in affiliate fee revenue was primarily due to higher fees received from television stations that are affiliated with the FOX Network and higher average rates per subscriber partially offset by a lower average number of subscribers at the Company’s owned and operated television stations. The decrease in other revenues was primarily due to lower content revenues at the entertainment production companies principally as a result of industry guild labor disputes.

Current wording

Revenues at the Television segment decreased $863 million or 12% for the nine months ended March 31, 2024, as compared to the corresponding period of fiscal 2023, due to lower advertising and other revenues, partially offset by higher affiliate fee revenue. The decrease of $1 billion or 22% in advertising revenue was primarily due to the absence of the fiscal 2023 broadcasts of Super Bowl LVII and the FIFA Men’s World Cup, lower political advertising revenue at the FOX Television Stations principally due to the comparison with the November 2022 U.S. midterm elections in the prior year, fewer NFL playoff games, and lower ratings at the FOX Network. Partially offsetting this decrease was continued growth at Tubi. The increase of $193 million or 9% in affiliate fee revenue was primarily due to higher fees received from television stations that are affiliated with the FOX Network and higher average rates per subscriber partially offset by a lower average number of subscribers at the Company’s owned and operated television stations. The decrease of $43 million or 9% in other revenues was primarily due to lower content revenues principally due to the impact of the industry guild labor disputes in 2023.

Previous wording

Other, Corporate and Eliminations (1% of the Company’s revenues for the first six months of fiscal 2024 and 2023)

Current wording

Other, Corporate and Eliminations (1% of the Company’s revenues for the first nine months of fiscal 2024 and 2023)

Previous wording

Revenues at the Other, Corporate and Eliminations segment for the three and six months ended December 31, 2023 and 2022 include revenues generated by Credible and the operation of the FOX Studio Lot for third parties. Operating expenses for the three and six months ended December 31, 2023 and 2022 include advertising and promotional expenses at Credible. Selling, general and administrative expenses for the three and six months ended December 31, 2023 and 2022 primarily relate to employee costs, professional fees and the costs of operating the FOX Studio Lot. Selling, general and administrative expenses for the six months ended December 31, 2023 increased, as compared to the corresponding period of fiscal 2023, primarily due to higher employee related costs as a result of the transition and separation of a named executive officer of the Company.

Current wording

Revenues at the Other, Corporate and Eliminations segment for the three and nine months ended March 31, 2024 and 2023 include revenues generated by Credible and the operation of the FOX Studio Lot for third parties. Operating expenses for the three and nine months ended March 31, 2024 and 2023 include advertising and promotional expenses at Credible. Selling, general and administrative expenses for the three and nine months ended March 31, 2024 and 2023 primarily relate to employee costs, professional fees and the costs of operating the FOX Studio Lot. Selling, general and administrative expenses for the nine months ended March 31, 2024 increased, as compared to the corresponding period of fiscal 2023, primarily due to higher employee related costs as a result of the transition and separation of a named executive officer of the Company.

Previous wording

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, net, Other, net and Income tax expense.

Current wording

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.

Previous wording

The following table reconciles Net income to Adjusted EBITDA for the three and six months ended December 31, 2023, as compared to the three and six months ended December 31, 2022:

Current wording

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

Previous wording

The following table sets forth the computation of Adjusted EBITDA for the three and six months ended December 31, 2023, as compared to the three and six months ended December 31, 2022.

Current wording

The following table sets forth the computation of Adjusted EBITDA for the three and nine months ended March 31, 2024, as compared to the three and nine months ended March 31, 2023.

Previous wording

The Company has approximately $4.1 billion of cash and cash equivalents as of December 31, 2023 and an unused five-year $1.0 billion unsecured revolving credit facility (See Note 5—Borrowings to the accompanying Financial Statements). The Company also has access to the worldwide capital markets, subject to market conditions. As of December 31, 2023, the Company was in compliance with all of the covenants under the revolving credit facility, and it does not anticipate any noncompliance with such covenants.

Current wording

The Company has approximately $3.8 billion of cash and cash equivalents as of March 31, 2024 and an unused five-year $1.0 billion unsecured revolving credit facility (See Note 5—Borrowings to the accompanying Financial Statements). The Company also has access to the worldwide capital markets, subject to market conditions. As of March 31, 2024, the Company was in compliance with all of the covenants under the revolving credit facility, and it does not anticipate any noncompliance with such covenants.

Previous wording

The principal uses of cash that affect the Company’s liquidity position include the following: the acquisition of rights and related payments for entertainment and sports programming; operational expenditures including production costs; marketing and promotional expenses; expenses related to broadcasting the Company’s programming; employee and facility costs; capital expenditures; acquisitions; income taxes, interest and dividend payments; debt repayments; legal settlements; and stock repurchases.

Current wording

The principal uses of cash that affect the Company’s liquidity position include the following: the acquisition of rights and related payments for sports and entertainment programming; operational expenditures including production costs; marketing and promotional expenses; expenses related to broadcasting the Company’s programming; employee and facility costs; capital expenditures; acquisitions; income taxes, interest and dividend payments; debt repayments; legal settlements; and stock repurchases.

Previous wording

The increase in net cash used in operating activities during the six months ended December 31, 2023, as compared to the corresponding period of fiscal 2023, was primarily due to lower Segment EBITDA, higher sports rights payments principally due to the renewed contract with the NFL and lower political advertising receipts due to the absence of the November 2022 U.S. midterm elections.

Current wording

The decrease in net cash provided by operating activities during the nine months ended March 31, 2024, as compared to the corresponding period of fiscal 2023, was primarily due to lower Segment EBITDA and lower NFL receipts due to the absence of Super Bowl LVII, partially offset by lower entertainment programming costs.

Previous wording

Net cash used in investing activities for the six months ended December 31, 2023 and 2022 was as follows (in millions):

Current wording

Net cash used in investing activities for the nine months ended March 31, 2024 and 2023 was as follows (in millions):

Previous wording

The decrease in net cash used in investing activities during the six months ended December 31, 2023, as compared to the corresponding period of fiscal 2023, was primarily due to the absence of investments in equity securities.

Current wording

Net cash used in investing activities remained relatively consistent during the nine months ended March 31, 2024, as compared to the corresponding period of fiscal 2023, primarily due to higher investments in equity securities partially offset by a decrease in capital expenditures.

Previous wording

Net cash provided by (used in) financing activities for the six months ended December 31, 2023 and 2022 was as follows (in millions):

Current wording

Net cash used in financing activities for the nine months ended March 31, 2024 and 2023 was as follows (in millions):

Previous wording

The change in net cash provided by (used in) financing activities during the six months ended December 31, 2023, as compared to the corresponding period of fiscal 2023, was primarily due to the October 2023 issuance of $1.25 billion of senior notes (See Note 5—Borrowings to the accompanying Financial Statements).

Current wording

The decrease in net cash used in financing activities during the nine months ended March 31, 2024, as compared to the corresponding period of fiscal 2023, was primarily due to lower activity under the stock repurchase program and the net impact of the October 2023 issuance of $1.25 billion of senior notes and the $1.25 billion repayment of senior notes that matured in January 2024 (See Note 5—Borrowings to the accompanying Financial Statements).

Previous wording

Subsequent to December 31, 2023 the Company declared a semi-annual dividend of $0.26 per share on both the Class A Common Stock and the Class B Common Stock. The dividend declared is payable on March 26, 2024 with a record date for determining dividend entitlements of March 6, 2024.

Current wording

The Company declared a semi-annual dividend of $0.26 per share on both the Class A Common Stock, par value $0.01 per share, and the Class B Common Stock, par value $0.01 per share, during the three months ended March 31, 2024, which was paid on March 26, 2024 to stockholders of record on March 6, 2024.

Previous wording

Borrowings include senior notes. Subsequent to December 31, 2023, $1.25 billion of 4.030% senior notes due in January 2024 matured and were repaid in full (See Note 5—Borrowings to the accompanying Financial Statements).

Current wording

Borrowings include senior notes. In January 2024, $1.25 billion of 4.030% senior notes matured and were repaid in full (See Note 5—Borrowings to the accompanying Financial Statements).

Previous wording

•the impact of COVID-19 and other widespread health emergencies or pandemics and measures to contain their spread; and

Current wording

•the impact of widespread health emergencies or pandemics and measures to contain their spread; and

Previous wording

•the other risks and uncertainties detailed in Part I, Item 1A. “Risk Factors” in the 2023 Form 10-K and Part II, Item 1A. “Risk Factors” in the Q1 2024 Form 10-Q and this Quarterly Report on Form 10-Q.

Current wording

•the other risks and uncertainties detailed in Part I, Item 1A. “Risk Factors” in the 2023 Form 10-K and Part II, Item 1A. “Risk Factors” in the Q1 2024 Form 10-Q and the Q2 2024 Form 10-Q.