NEW YORK, Feb. 6, 2019 /PRNewswire/ -- Twenty-First
Century Fox, Inc. ("21st Century Fox" or the "Company" -- NASDAQ:
FOXA, FOX) today reported financial results for the three months
ended December 31, 2018.
The Company reported quarterly income from continuing operations
attributable to 21st Century Fox stockholders of $10.83 billion ($5.81 per share) compared to $1.84 billion ($0.99 per share) reported in the prior year
quarter. The current quarter's income from continuing operations
attributable to 21st Century Fox stockholders per share included a
$5.62 impact related to the net gain
on the Company's sale of its investment in Sky plc ("Sky").
The prior year quarter's income from continuing operations
attributable to 21st Century Fox stockholders included a tax
benefit of $1.34 billion, or
$0.72 per share, due to a non-cash
remeasurement of the Company's net deferred tax liability related
to the enactment of the Tax Cuts and Jobs Act. Adjusted
quarterly earnings per share from continuing operations
attributable to 21st Century Fox stockholders1 was
$0.37, 12% lower than the
$0.42 adjusted result reported in
prior year quarter due to lower equity earnings reflecting the
absence of Sky contributions as a result of the sale of the
investment in Sky.
The Company reported total quarterly revenues of $8.50 billion, a 6% increase from the
$8.04 billion of revenues reported in
the prior year quarter. This increase principally reflects higher
affiliate revenues reported at the Cable Network Programming and
Television segments and higher advertising revenue reported in the
Television segment partially offset by lower home entertainment
revenue reported at the Filmed Entertainment segment. The impact of
foreign exchange rates adversely impacted revenue growth by
approximately $195 million, or 2% in
total.
Quarterly income from continuing operations before income tax
(expense) benefit increased to $11.55
billion from the $703 million
reported in the prior year quarter primarily due to the
$10.8 billion pre-tax gain on the
sale of Sky. Quarterly total segment operating income before
depreciation and amortization ("OIBDA")2 of
$1.57 billion was 9% higher than the
prior year quarter driven by higher contributions reported at our
Cable Network Programming and Filmed Entertainment segments
partially offset by lower contributions at the Television
segment. The impact of foreign exchange rates negatively
impacted quarterly OIBDA growth by $94
million, or 7%.
Commenting on the results, Executive Chairmen Rupert and Lachlan Murdoch said:
"Our Company delivered another strong quarter of financial
results, underpinned by distribution and advertising revenue
increases at our domestic cable networks and broadcast businesses
and the substantial gain on our sale of Sky. These results
reflect our continued commitment to excellence in all aspects of
our business. There has also been significant progress regarding
the transaction with Disney and the spin-off of Fox Corporation
including the effectiveness of the Form 10. Lastly, it is a fitting
tribute that our film and television production businesses were
recently recognized with industry leading Golden Globe wins and
Academy Award nominations. Our achievements, including the
value we have delivered for shareholders, are a credit to all our
talented colleagues. Thanks to their hard work, we have created
durable businesses for the long term, and strong momentum as we
near the creation of Fox Corporation and the combination with
Disney."
1
|
Excludes net
income effects of Impairment and restructuring charges, adjustments
to Equity (losses) earnings of affiliates, Other, net, and tax
reform remeasurement benefit. See page 15 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
15 for a description of the adjustments to Equity (losses) earnings
of affiliates.
|
2
|
Total segment
OIBDA may be considered a non-GAAP financial measure. See page 12
for a description of total segment OIBDA and a reconciliation from
income from continuing operations before income tax (expense)
benefit to total segment OIBDA.
|
REVIEW OF SEGMENT
OPERATING RESULTS
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
December
31,
|
|
|
Six Months
Ended
December
31,
|
|
|
|
2018
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
|
|
|
US $
Millions
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cable Network
Programming
|
|
$
|
4,562
|
|
|
$
|
4,405
|
|
|
$
|
8,909
|
|
|
$
|
8,601
|
|
Television
|
|
|
2,148
|
|
|
|
1,806
|
|
|
|
3,424
|
|
|
|
2,871
|
|
Filmed
Entertainment
|
|
|
2,159
|
|
|
|
2,246
|
|
|
|
3,975
|
|
|
|
4,209
|
|
Other, Corporate and
Eliminations
|
|
|
(370)
|
|
|
|
(420)
|
|
|
|
(632)
|
|
|
|
(642)
|
|
Total
revenues
|
|
$
|
8,499
|
|
|
$
|
8,037
|
|
|
$
|
15,676
|
|
|
$
|
15,039
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment
OIBDA:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cable Network
Programming
|
|
$
|
1,454
|
|
|
$
|
1,365
|
|
|
$
|
2,991
|
|
|
$
|
2,876
|
|
Television
|
|
|
(22)
|
|
|
|
56
|
|
|
|
146
|
|
|
|
178
|
|
Filmed
Entertainment
|
|
|
193
|
|
|
|
131
|
|
|
|
470
|
|
|
|
387
|
|
Other, Corporate and
Eliminations
|
|
|
(60)
|
|
|
|
(114)
|
|
|
|
(169)
|
|
|
|
(212)
|
|
Total Segment
OIBDA(a)
|
|
$
|
1,565
|
|
|
$
|
1,438
|
|
|
$
|
3,438
|
|
|
$
|
3,229
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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) benefit to total segment OIBDA.
|
CABLE NETWORK PROGRAMMING
Cable Network Programming reported quarterly segment OIBDA of
$1.45 billion, a 7% increase over the
prior year quarter as 4% revenue growth led by higher affiliate
revenues was partially offset by a 2% increase in expenses.
The increase in expenses was primarily due to higher sports
rights costs at both the regional sports networks ("RSNs") and FS1
and higher entertainment programming costs at FX Networks,
partially offset by lower cricket rights costs at STAR.
Foreign exchange fluctuations, primarily in Latin America, adversely impacted segment
OIBDA growth by 5%.
Domestic cable revenue increased 7% led by growth in both
affiliate and advertising revenues. Domestic affiliate revenue
increased 8% reflecting continued contractual rate increases across
all our domestic brands, and domestic advertising revenue increased
6% from the prior year period largely due to higher pricing at FOX
News. Domestic OIBDA contributions increased 10% over the
prior year quarter led by higher contributions from FOX News and
the RSNs.
International cable revenue declined 5% as higher constant
currency affiliate and advertising revenues were more than offset
by a 12% adverse impact from the strengthened U.S. dollar.
Reported international affiliate revenue decreased 4% as 11% local
currency growth at FNG International and STAR was more than offset
by a 15% adverse impact from the strengthened U.S. dollar. Reported
international advertising revenue decreased 9% 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 cable
OIBDA contributions were 8% lower than the prior year quarter
primarily due to the adverse impact from the strengthened U.S.
dollar partially offset by local currency growth at both STAR and
FNG International.
TELEVISION
Television reported a quarterly segment OIBDA loss of
$22 million, a decrease of
$78 million from the amount reported
in the prior year quarter, as 19% segment revenue growth from
increases in advertising, affiliate and content revenues were more
than offset by a 24% increase in expenses. The higher
expenses in this year's second quarter are due to higher sports
programming costs reflecting the impact of the inaugural broadcast
season of Thursday Night Football that more than offset
lower entertainment programming expenses from a reduced mix of
entertainment programming in the current quarter. Advertising
revenue was 15% higher than the prior year quarter reflecting
higher sports advertising revenue at the FOX Broadcast Network, led
by our first broadcast season of Thursday Night
Football partially offset by two fewer World Series games as
compared to the prior year period. Additionally, higher political
advertising revenue related to the midterm U.S. elections at the
FOX television stations was a contributor to the advertising
revenue growth. Affiliate revenue grew 21% over the prior
year reflecting the continuation of contractual retransmission
consent fee increases, and higher content revenue resulted from
increased streaming-video-on-demand revenue at the FOX Broadcast
Network.
FILMED ENTERTAINMENT
Filmed Entertainment generated quarterly segment OIBDA of
$193 million, a 47% increase over the
$131 million reported in the prior
year quarter. The OIBDA increase reflects higher contributions from
the film studio led by the worldwide theatrical performance of
Bohemian Rhapsody (winner of two Golden Globes and nominated
for five Academy Awards), lower theatrical releasing costs from a
comparatively lower number of films released in the current
quarter, and the worldwide home entertainment and pay television
performance of The Greatest Showman, partially offset by
higher new series deficits and lower domestic syndication
contributions at the television production studio. Quarterly
segment revenues decreased 4% to $2.16
billion, primarily reflecting lower home entertainment
revenue at the film studio and lower syndication revenue at the
television production studio.
REVIEW OF EQUITY
(LOSSES) EARNINGS OF AFFILIATES' RESULTS
|
The Company's share
of equity (losses) earnings of affiliates is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
December
31,
|
|
|
Six Months
Ended
December
31,
|
|
|
|
% Owned
|
|
|
2018
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
|
|
|
|
|
|
|
US $
Millions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sky
|
|
-%(1)
|
|
|
$
|
-
|
|
|
$
|
120
|
|
|
$
|
147
|
|
|
$
|
230
|
|
Hulu
|
|
30%
|
|
|
|
(115)
|
|
|
|
(108)
|
|
|
|
(229)
|
|
|
|
(170)
|
|
Other equity
affiliates
|
|
Various(2)
|
|
|
|
6
|
|
|
|
(45)
|
|
|
|
8
|
|
|
|
(33)
|
|
Total equity
(losses) earnings of affiliates
|
|
|
|
|
|
$
|
(109)
|
|
|
$
|
(33)
|
|
|
$
|
(74)
|
|
|
$
|
27
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
On October 9,
2018, the Company disposed of its 39% investment in Sky. See
page 5 for more details.
|
(2)
|
Primarily
comprised of Endemol Shine Group and Tata Sky.
|
Quarterly equity losses of affiliates were $109 million as compared to $33 million reported in the same period a
year-ago. The $76 million
increase in losses primarily reflects the absence of current
quarter equity earnings from 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) and
TWDC Holdco 613 Corp., a newly formed wholly-owned subsidiary of
Disney that will own Disney and the Company following the
transaction ("New Disney"), pursuant to which Disney has agreed to
cause New Disney to acquire, for a price of $38 per Company share (subject to certain
adjustments), the Company, including the Twentieth Century Fox Film
and Television studios and certain cable and international
television businesses. Prior to the acquisition, the Company
will separate the FOX Broadcasting Company, FOX Television
Stations, FOX News, FOX Business, FS1, FS2, Big Ten Network and
certain other assets and liabilities into a newly formed
subsidiary, Fox Corporation ("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
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.
On January 7, 2019, the Company
announced the public filing with the U.S. Securities and Exchange
Commission of a Registration Statement on Form 10 for FOX which was
declared effective on February 5,
2019.
The Company anticipates the transactions closing in the first
half of calendar 2019.
Disposition of Sky Shares
During the quarter the Company sold its 672,783,139 Sky shares
to Comcast Corporation for total proceeds of £11.6 billion, or
$15.1 billion. The Company
recorded a pre-tax gain of $10.8
billion on this transaction, which was included in Other,
net in the Unaudited Consolidated Statements of Operations.
Dividend
The Company has declared a dividend of $0.18 per Class A and Class B share. The
dividend declared is payable on April 16,
2019 with a record date for determining dividend
entitlements of April 8, 2019 ("the "Record
Date"). The dividend is contingent on the
Disney acquisition not having occurred prior to the Record
Date.
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 in the
Registration Statement on Form 10 that was declared effective by
the SEC on February 5, 2019 with
respect to FOX. Investors and shareholders of the Company are urged
to read the joint proxy statement/prospectus, the Registration
Statement on Form 10 and other relevant documents filed or to be
filed with the SEC carefully because they 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
December
31,
|
|
|
Six Months
Ended
December
31,
|
|
|
|
2018
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
|
|
|
US $ Millions,
except
per share amounts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
8,499
|
|
|
$
|
8,037
|
|
|
$
|
15,676
|
|
|
$
|
15,039
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses
|
|
|
(6,005)
|
|
|
|
(5,760)
|
|
|
|
(10,429)
|
|
|
|
(10,141)
|
|
Selling, general and
administrative
|
|
|
(939)
|
|
|
|
(864)
|
|
|
|
(1,829)
|
|
|
|
(1,712)
|
|
Depreciation and
amortization
|
|
|
(159)
|
|
|
|
(142)
|
|
|
|
(317)
|
|
|
|
(284)
|
|
Impairment and
restructuring charges
|
|
|
-
|
|
|
|
(3)
|
|
|
|
(16)
|
|
|
|
(24)
|
|
Equity (losses)
earnings of affiliates
|
|
|
(109)
|
|
|
|
(33)
|
|
|
|
(74)
|
|
|
|
27
|
|
Interest expense,
net
|
|
|
(294)
|
|
|
|
(312)
|
|
|
|
(594)
|
|
|
|
(625)
|
|
Interest
income
|
|
|
86
|
|
|
|
9
|
|
|
|
94
|
|
|
|
19
|
|
Other, net
|
|
|
10,475
|
|
|
|
(229)
|
|
|
|
10,527
|
|
|
|
(301)
|
|
Income from
continuing operations before income tax (expense)
benefit
|
|
|
11,554
|
|
|
|
703
|
|
|
|
13,038
|
|
|
|
1,998
|
|
Income tax (expense)
benefit
|
|
|
(630)
|
|
|
|
1,218
|
|
|
|
(756)
|
|
|
|
827
|
|
Income from
continuing operations
|
|
|
10,924
|
|
|
|
1,921
|
|
|
|
12,282
|
|
|
|
2,825
|
|
(Loss) income from
discontinued operations, net of tax
|
|
|
(17)
|
|
|
|
(5)
|
|
|
|
(24)
|
|
|
|
11
|
|
Net
income
|
|
|
10,907
|
|
|
|
1,916
|
|
|
|
12,258
|
|
|
|
2,836
|
|
Less: Net income
attributable to noncontrolling interests
|
|
|
(92)
|
|
|
|
(85)
|
|
|
|
(158)
|
|
|
|
(150)
|
|
Net income
attributable to Twenty-First Century Fox, Inc.
stockholders
|
|
$
|
10,815
|
|
|
$
|
1,831
|
|
|
$
|
12,100
|
|
|
$
|
2,686
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares:
|
|
|
1,864
|
|
|
|
1,855
|
|
|
|
1,864
|
|
|
|
1,854
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from
continuing operations attributable to Twenty-First
Century
Fox, Inc.
stockholders per share:
|
|
$
|
5.81
|
|
|
$
|
0.99
|
|
|
$
|
6.50
|
|
|
$
|
1.44
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to Twenty-First Century Fox, Inc.
stockholders
per
share:
|
|
$
|
5.80
|
|
|
$
|
0.99
|
|
|
$
|
6.49
|
|
|
$
|
1.45
|
|
CONSOLIDATED
BALANCE SHEETS
|
|
|
|
|
|
|
|
|
|
December
31,
2018
|
|
|
June
30,
2018
|
|
Assets:
|
|
US $
Millions
|
|
Current
assets:
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
21,281
|
|
|
$
|
7,622
|
|
Receivables,
net
|
|
|
8,083
|
|
|
|
7,120
|
|
Inventories,
net
|
|
|
3,934
|
|
|
|
3,669
|
|
Other
|
|
|
719
|
|
|
|
922
|
|
Total current
assets
|
|
|
34,017
|
|
|
|
19,333
|
|
|
|
|
|
|
|
|
|
|
Non-current
assets:
|
|
|
|
|
|
|
|
|
Receivables,
net
|
|
|
859
|
|
|
|
724
|
|
Investments
|
|
|
833
|
|
|
|
4,112
|
|
Inventories,
net
|
|
|
8,133
|
|
|
|
7,518
|
|
Property, plant and
equipment, net
|
|
|
1,971
|
|
|
|
1,956
|
|
Intangible assets,
net
|
|
|
5,970
|
|
|
|
6,101
|
|
Goodwill
|
|
|
12,758
|
|
|
|
12,768
|
|
Other non-current
assets
|
|
|
1,345
|
|
|
|
1,319
|
|
Total
assets
|
|
$
|
65,886
|
|
|
$
|
53,831
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Equity:
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
|
Borrowings
|
|
$
|
887
|
|
|
$
|
1,054
|
|
Accounts payable,
accrued expenses and other current liabilities
|
|
|
3,236
|
|
|
|
3,248
|
|
Participations,
residuals and royalties payable
|
|
|
1,822
|
|
|
|
1,748
|
|
Program rights
payable
|
|
|
1,135
|
|
|
|
1,368
|
|
Deferred
revenue
|
|
|
855
|
|
|
|
826
|
|
Total current
liabilities
|
|
|
7,935
|
|
|
|
8,244
|
|
|
|
|
|
|
|
|
|
|
Non-current
liabilities:
|
|
|
|
|
|
|
|
|
Borrowings
|
|
|
18,321
|
|
|
|
18,469
|
|
Other
liabilities
|
|
|
3,848
|
|
|
|
3,664
|
|
Deferred income
taxes
|
|
|
1,971
|
|
|
|
1,892
|
|
Redeemable
noncontrolling interests
|
|
|
576
|
|
|
|
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
|
|
|
12,573
|
|
|
|
12,612
|
|
Retained
earnings
|
|
|
21,292
|
|
|
|
8,934
|
|
Accumulated other
comprehensive loss
|
|
|
(1,879)
|
|
|
|
(2,001)
|
|
Total Twenty-First Century Fox, Inc. stockholders'
equity
|
|
|
32,005
|
|
|
|
19,564
|
|
Noncontrolling
interests
|
|
|
1,230
|
|
|
|
1,234
|
|
Total equity
|
|
|
33,235
|
|
|
|
20,798
|
|
Total liabilities
and equity
|
|
$
|
65,886
|
|
|
$
|
53,831
|
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|
|
|
|
|
|
Six Months
Ended
December
31,
|
|
|
|
2018
|
|
|
2017
|
|
|
|
US $ Millions
|
|
Operating
activities:
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
12,258
|
|
|
$
|
2,836
|
|
Less: (Loss) income
from discontinued operations, net of tax
|
|
|
(24)
|
|
|
|
11
|
|
Income from
continuing operations
|
|
|
12,282
|
|
|
|
2,825
|
|
Adjustments to
reconcile income from continuing operations to cash provided
by
operating activities
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
317
|
|
|
|
284
|
|
Amortization of cable
distribution investments
|
|
|
20
|
|
|
|
43
|
|
Impairment and
restructuring charges
|
|
|
16
|
|
|
|
24
|
|
Equity-based
compensation
|
|
|
70
|
|
|
|
66
|
|
Equity losses
(earnings) of affiliates
|
|
|
74
|
|
|
|
(27)
|
|
Cash distributions
received from affiliates
|
|
|
10
|
|
|
|
11
|
|
Other, net
|
|
|
(10,527)
|
|
|
|
301
|
|
Deferred income
taxes
|
|
|
(155)
|
|
|
|
(1,300)
|
|
Change in operating
assets and liabilities, net of acquisitions and
dispositions
|
|
|
|
|
|
|
|
|
Receivables
|
|
|
(693)
|
|
|
|
(1,267)
|
|
Inventories net of
program rights payable
|
|
|
(1,300)
|
|
|
|
(417)
|
|
Accounts payable and
accrued expenses
|
|
|
(145)
|
|
|
|
388
|
|
Other changes,
net
|
|
|
588
|
|
|
|
(427)
|
|
Net cash provided
by operating activities from continuing operations
|
|
|
557
|
|
|
|
504
|
|
|
|
|
|
|
|
|
|
|
Investing
activities:
|
|
|
|
|
|
|
|
|
Property, plant and
equipment
|
|
|
(219)
|
|
|
|
(238)
|
|
Investments in equity
affiliates
|
|
|
(266)
|
|
|
|
(209)
|
|
Proceeds from
dispositions, net
|
|
|
15,020
|
|
|
|
362
|
|
Other investing
activities, net
|
|
|
(206)
|
|
|
|
(84)
|
|
Net cash provided
by (used in) investing activities from continuing
operations
|
|
|
14,329
|
|
|
|
(169)
|
|
|
|
|
|
|
|
|
|
|
Financing
activities:
|
|
|
|
|
|
|
|
|
Borrowings
|
|
|
90
|
|
|
|
1,282
|
|
Repayment of
borrowings
|
|
|
(412)
|
|
|
|
(1,411)
|
|
Dividends paid and
distributions
|
|
|
(517)
|
|
|
|
(512)
|
|
Employee taxes paid
for share-based payment arrangements
|
|
|
(162)
|
|
|
|
(32)
|
|
Other financing
activities, net
|
|
|
(89)
|
|
|
|
(18)
|
|
Net cash used in
financing activities from continuing operations
|
|
|
(1,090)
|
|
|
|
(691)
|
|
|
|
|
|
|
|
|
|
|
Net decrease in
cash and cash equivalents from discontinued
operations
|
|
|
(32)
|
|
|
|
(26)
|
|
|
|
|
|
|
|
|
|
|
Net increase
(decrease) in cash and cash equivalents
|
|
|
13,764
|
|
|
|
(382)
|
|
Cash and cash
equivalents, beginning of year
|
|
|
7,622
|
|
|
|
6,163
|
|
Exchange movement on
cash balances
|
|
|
(105)
|
|
|
|
28
|
|
Cash and cash
equivalents, end of period
|
|
$
|
21,281
|
|
|
$
|
5,809
|
|
SEGMENT
INFORMATION
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
December
31,
|
|
|
Six Months
Ended
December
31,
|
|
|
|
2018
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
|
|
|
US $
Millions
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cable Network
Programming
|
|
$
|
4,562
|
|
|
$
|
4,405
|
|
|
$
|
8,909
|
|
|
$
|
8,601
|
|
Television
|
|
|
2,148
|
|
|
|
1,806
|
|
|
|
3,424
|
|
|
|
2,871
|
|
Filmed
Entertainment
|
|
|
2,159
|
|
|
|
2,246
|
|
|
|
3,975
|
|
|
|
4,209
|
|
Other, Corporate and
Eliminations
|
|
|
(370)
|
|
|
|
(420)
|
|
|
|
(632)
|
|
|
|
(642)
|
|
Total
revenues
|
|
$
|
8,499
|
|
|
$
|
8,037
|
|
|
$
|
15,676
|
|
|
$
|
15,039
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment
OIBDA:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cable Network
Programming
|
|
$
|
1,454
|
|
|
$
|
1,365
|
|
|
$
|
2,991
|
|
|
$
|
2,876
|
|
Television
|
|
|
(22)
|
|
|
|
56
|
|
|
|
146
|
|
|
|
178
|
|
Filmed
Entertainment
|
|
|
193
|
|
|
|
131
|
|
|
|
470
|
|
|
|
387
|
|
Other, Corporate and
Eliminations
|
|
|
(60)
|
|
|
|
(114)
|
|
|
|
(169)
|
|
|
|
(212)
|
|
Total Segment
OIBDA(a)
|
|
$
|
1,565
|
|
|
$
|
1,438
|
|
|
$
|
3,438
|
|
|
$
|
3,229
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cable Network
Programming
|
|
$
|
98
|
|
|
$
|
86
|
|
|
$
|
195
|
|
|
$
|
171
|
|
Television
|
|
|
25
|
|
|
|
27
|
|
|
|
51
|
|
|
|
54
|
|
Filmed
Entertainment
|
|
|
25
|
|
|
|
23
|
|
|
|
50
|
|
|
|
46
|
|
Other, Corporate and
Eliminations
|
|
|
11
|
|
|
|
6
|
|
|
|
21
|
|
|
|
13
|
|
Total depreciation
and amortization
|
|
$
|
159
|
|
|
$
|
142
|
|
|
$
|
317
|
|
|
$
|
284
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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) benefit to total segment OIBDA.
|
CONSOLIDATED
REVENUES BY COMPONENT BY SEGMENT
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
December
31,
|
|
|
Six Months
Ended
December
31,
|
|
|
|
2018
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
|
|
|
US $
Millions
|
|
Revenues by
Component:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Affiliate
fee
|
|
$
|
3,482
|
|
|
$
|
3,252
|
|
|
$
|
6,977
|
|
|
$
|
6,488
|
|
Advertising
|
|
|
2,698
|
|
|
|
2,496
|
|
|
|
4,470
|
|
|
|
4,119
|
|
Content
|
|
|
2,118
|
|
|
|
2,140
|
|
|
|
3,889
|
|
|
|
4,159
|
|
Other
|
|
|
201
|
|
|
|
149
|
|
|
|
340
|
|
|
|
273
|
|
Total
revenues
|
|
$
|
8,499
|
|
|
$
|
8,037
|
|
|
$
|
15,676
|
|
|
$
|
15,039
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues by
Segment by Component:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cable Network
Programming
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Affiliate
fee
|
|
$
|
3,075
|
|
|
$
|
2,915
|
|
|
$
|
6,172
|
|
|
$
|
5,817
|
|
Advertising, content
and other
|
|
|
1,487
|
|
|
|
1,490
|
|
|
|
2,737
|
|
|
|
2,784
|
|
Total Cable Network
Programming revenues
|
|
|
4,562
|
|
|
|
4,405
|
|
|
|
8,909
|
|
|
|
8,601
|
|
Television
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Advertising
|
|
|
1,634
|
|
|
|
1,416
|
|
|
|
2,433
|
|
|
|
2,071
|
|
Affiliate fee, content
and other
|
|
|
514
|
|
|
|
390
|
|
|
|
991
|
|
|
|
800
|
|
Total Television
revenues
|
|
|
2,148
|
|
|
|
1,806
|
|
|
|
3,424
|
|
|
|
2,871
|
|
Filmed
Entertainment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Content
|
|
|
2,059
|
|
|
|
2,168
|
|
|
|
3,784
|
|
|
|
4,059
|
|
Advertising and
other
|
|
|
100
|
|
|
|
78
|
|
|
|
191
|
|
|
|
150
|
|
Total Filmed
Entertainment revenues
|
|
|
2,159
|
|
|
|
2,246
|
|
|
|
3,975
|
|
|
|
4,209
|
|
Other, Corporate and
Eliminations
|
|
|
(370)
|
|
|
|
(420)
|
|
|
|
(632)
|
|
|
|
(642)
|
|
Total
revenues
|
|
$
|
8,499
|
|
|
$
|
8,037
|
|
|
$
|
15,676
|
|
|
$
|
15,039
|
|
NOTE 1 – TOTAL SEGMENT OPERATING INCOME BEFORE DEPRECIATION
AND AMORTIZATION
The Company evaluates the performance of its operating segments
based on 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 (losses)
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) benefit to total segment OIBDA:
|
|
Three Months
Ended
December
31,
|
|
|
Six Months
Ended
December
31,
|
|
|
|
2018
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
|
|
|
US $
Millions
|
|
Income from
continuing operations before income tax (expense)
benefit
|
|
$
|
11,554
|
|
|
$
|
703
|
|
|
$
|
13,038
|
|
|
$
|
1,998
|
|
Add:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of cable
distribution investments
|
|
|
10
|
|
|
|
25
|
|
|
|
20
|
|
|
|
43
|
|
Depreciation and
amortization
|
|
|
159
|
|
|
|
142
|
|
|
|
317
|
|
|
|
284
|
|
Impairment and
restructuring charges
|
|
|
-
|
|
|
|
3
|
|
|
|
16
|
|
|
|
24
|
|
Equity losses
(earnings) of affiliates
|
|
|
109
|
|
|
|
33
|
|
|
|
74
|
|
|
|
(27)
|
|
Interest expense,
net
|
|
|
294
|
|
|
|
312
|
|
|
|
594
|
|
|
|
625
|
|
Interest
income
|
|
|
(86)
|
|
|
|
(9)
|
|
|
|
(94)
|
|
|
|
(19)
|
|
Other, net
|
|
|
(10,475)
|
|
|
|
229
|
|
|
|
(10,527)
|
|
|
|
301
|
|
Total Segment
OIBDA
|
|
$
|
1,565
|
|
|
$
|
1,438
|
|
|
$
|
3,438
|
|
|
$
|
3,229
|
|
|
|
Three Months Ended December
31, 2018
|
|
|
|
US $ Millions
|
|
|
|
Revenues
|
|
|
Operating and
Selling,
general
and
administrative
expenses
|
|
|
Add:
Amortization
of
cable
distribution
investments
|
|
|
Segment
OIBDA
|
|
Cable Network
Programming
|
|
$
|
4,562
|
|
|
$
|
(3,118)
|
|
|
$
|
10
|
|
|
$
|
1,454
|
|
Television
|
|
|
2,148
|
|
|
|
(2,170)
|
|
|
|
-
|
|
|
|
(22)
|
|
Filmed
Entertainment
|
|
|
2,159
|
|
|
|
(1,966)
|
|
|
|
-
|
|
|
|
193
|
|
Other, Corporate and
Eliminations
|
|
|
(370)
|
|
|
|
310
|
|
|
|
-
|
|
|
|
(60)
|
|
Consolidated
Total
|
|
$
|
8,499
|
|
|
$
|
(6,944)
|
|
|
$
|
10
|
|
|
$
|
1,565
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December
31, 2017
|
|
|
|
US $ Millions
|
|
|
|
Revenues
|
|
|
Operating and
Selling,
general
and
administrative
expenses
|
|
|
Add:
Amortization
of
cable
distribution
investments
|
|
|
Segment
OIBDA
|
|
Cable Network
Programming
|
|
$
|
4,405
|
|
|
$
|
(3,065)
|
|
|
$
|
25
|
|
|
$
|
1,365
|
|
Television
|
|
|
1,806
|
|
|
|
(1,750)
|
|
|
|
-
|
|
|
|
56
|
|
Filmed
Entertainment
|
|
|
2,246
|
|
|
|
(2,115)
|
|
|
|
-
|
|
|
|
131
|
|
Other, Corporate and
Eliminations
|
|
|
(420)
|
|
|
|
306
|
|
|
|
-
|
|
|
|
(114)
|
|
Consolidated
Total
|
|
$
|
8,037
|
|
|
$
|
(6,624)
|
|
|
$
|
25
|
|
|
$
|
1,438
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended December
31, 2018
|
|
|
|
US $ Millions
|
|
|
|
Revenues
|
|
|
Operating and
Selling,
general
and
administrative
expenses
|
|
|
Add:
Amortization
of
cable
distribution
investments
|
|
|
Segment
OIBDA
|
|
Cable Network
Programming
|
|
$
|
8,909
|
|
|
$
|
(5,938)
|
|
|
$
|
20
|
|
|
$
|
2,991
|
|
Television
|
|
|
3,424
|
|
|
|
(3,278)
|
|
|
|
-
|
|
|
|
146
|
|
Filmed
Entertainment
|
|
|
3,975
|
|
|
|
(3,505)
|
|
|
|
-
|
|
|
|
470
|
|
Other, Corporate and
Eliminations
|
|
|
(632)
|
|
|
|
463
|
|
|
|
-
|
|
|
|
(169)
|
|
Consolidated
Total
|
|
$
|
15,676
|
|
|
$
|
(12,258)
|
|
|
$
|
20
|
|
|
$
|
3,438
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended December
31, 2017
|
|
|
|
|
US $ Millions
|
|
|
|
|
Revenues
|
|
|
Operating and
Selling,
general
and
administrative
expenses
|
|
|
Add:
Amortization
of
cable
distribution
investments
|
|
|
Segment
OIBDA
|
|
|
Cable Network
Programming
|
|
$
|
8,601
|
|
|
$
|
(5,768)
|
|
|
$
|
43
|
|
|
$
|
2,876
|
|
|
Television
|
|
|
2,871
|
|
|
|
(2,693)
|
|
|
|
-
|
|
|
|
178
|
|
|
Filmed
Entertainment
|
|
|
4,209
|
|
|
|
(3,822)
|
|
|
|
-
|
|
|
|
387
|
|
|
Other, Corporate and
Eliminations
|
|
|
(642)
|
|
|
|
430
|
|
|
|
-
|
|
|
|
(212)
|
|
|
Consolidated
Total
|
|
$
|
15,039
|
|
|
$
|
(11,853)
|
|
|
$
|
43
|
|
|
$
|
3,229
|
|
|
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, tax reform
remeasurement benefit and tax provision adjustments ("adjusted
income and adjusted 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
adjusted 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 adjusted 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 adjusted EPS from
continuing operations attributable to 21st Century Fox stockholders
for the three months ended December 31,
2018 and 2017.
|
|
Three Months
Ended
|
|
|
|
December 31,
2018
|
|
|
December 31,
2017
|
|
|
|
Income
|
|
|
EPS
|
|
|
Income
|
|
|
EPS
|
|
|
|
US
$ Millions, except per share data
|
|
Income from
continuing operations
|
|
$
|
10,924
|
|
|
|
|
|
|
$
|
1,921
|
|
|
|
|
|
Less: Net income
attributable to noncontrolling
interests
|
|
|
(92)
|
|
|
|
|
|
|
|
(85)
|
|
|
|
|
|
Income from
continuing operations
attributable to Twenty-First Century
Fox,
Inc.
stockholders
|
|
$
|
10,832
|
|
|
$
|
5.81
|
|
|
$
|
1,836
|
|
|
$
|
0.99
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment and
restructuring charges
|
|
|
-
|
|
|
|
-
|
|
|
|
3
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity affiliate
adjustments(a)
|
|
|
8
|
|
|
|
-
|
|
|
|
92
|
|
|
|
0.05
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other, net
|
|
|
(10,475)
|
|
|
|
(5.62)
|
|
|
|
229
|
|
|
|
0.12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax reform
remeasurement benefit
|
|
|
-
|
|
|
|
-
|
|
|
|
(1,335)
|
|
|
|
(0.72)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax
provision
|
|
|
316
|
|
|
|
0.17
|
|
|
|
(54)
|
|
|
|
(0.03)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rounding
|
|
|
-
|
|
|
|
0.01
|
|
|
|
-
|
|
|
|
0.01
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As
adjusted
|
|
$
|
681
|
|
|
$
|
0.37
|
|
|
$
|
771
|
|
|
$
|
0.42
|
|
(a)
|
Equity losses of
affiliates for the three months ended December 31, 2018 were
adjusted to remove from Endemol Shine Group's results 21st
Century
Fox's share of
Endemol Shine Group's debt revaluation costs and restructuring
costs. Equity losses of affiliates for the three months
ended December
31, 2017 were
adjusted to remove (1) from Sky's results 21st Century Fox's share
of Sky's (i) purchase price amortization related to its acquisition
of the
Direct Broadcast
Satellite businesses from the Company and (ii) restructuring costs,
(2) from Endemol Shine Group's results 21st Century Fox's
share
of Endemol Shine
Group's (i) debt revaluation costs and (ii) restructuring costs and
(3) the write-down of an equity method investment in
certain
businesses in Asia
and Africa.
|
View original content to download
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SOURCE Twenty-First Century Fox, Inc.