Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging ~~growth~~ company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of February ~~2, 2018, 1,054,008,837~~1, 2019, 1,058,408,500 shares of Class A Common Stock, par value $0.01 per share, and 798,520,953 shares of Class B Common Stock, par value $0.01 per share, were outstanding.

	For the three months ended December 31,						For the six months ended December 31,						For the three months ended December 31,						For the six months ended December 31,
	2017			2016			2017			2016			2018			2017			2018			2017
Revenues	$	8,037		$	7,682		$	15,039		$	14,188		$	8,499		$	8,037		$	15,676		$	15,039
Operating expenses		(5,760	)		(4,912	)		(10,141	)		(8,827	)		(6,005	)		(5,760	)		(10,429	)		(10,141	)
Selling, general and administrative		(864	)		(792	)		(1,712	)		(1,607	)		(939	)		(864	)		(1,829	)		(1,712	)
Depreciation and amortization		(142	)		(135	)		(284	)		(270	)		(159	)		(142	)		(317	)		(284	)
Impairment and restructuring charges		(3	)		(39	)		(24	)		(176	)		-			(3	)		(16	)		(24	)
Equity (losses) earnings of affiliates		(33	)		(41	)		27			(6	)		(109	)		(33	)		(74	)		27
Interest expense, net		(312	)		(299	)		(625	)		(599	)		(294	)		(312	)		(594	)		(625	)
Interest income		9			9			19			18			86			9			94			19
Other, net		(229	)		(88	)		(301	)		(99	)		10,475			(229	)		10,527			(301	)

Income from continuing operations before income tax benefit (expense)		703			1,385			1,998			2,622
Income tax benefit (expense)		1,218			(448	)		827			(791	)
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		1,921			937			2,825			1,831			10,924			1,921			12,282			2,825
(Loss) income from discontinued operations, net of tax		(5	)		(1	)		11			(7	)		(17	)		(5	)		(24	)		11

Net income		1,916			936			2,836			1,824			10,907			1,916			12,258			2,836
Less: Net income attributable to noncontrolling interests		(85	)		(80	)		(150	)		(147	)		(92	)		(85	)		(158	)		(150	)

Net income attributable to Twenty-First Century Fox, Inc. stockholders	$	1,831		$	856		$	2,686		$	1,677		$	10,815		$	1,831		$	12,100		$	2,686

EARNINGS PER SHARE DATA

Income from continuing operations attributable to Twenty-First Century Fox, Inc. stockholders - basic and diluted	$	1,836		$	857		$	2,675		$	1,684		$	10,832		$	1,836		$	12,124		$	2,675

Weighted average shares
Basic		1,853			1,853			1,852			1,857			1,856			1,853			1,855			1,852
Diluted		1,855			1,854			1,854			1,858			1,864			1,855			1,864			1,854

Income from continuing operations attributable to Twenty-First Century Fox, Inc. stockholders per share - basic and diluted	$	0.99		$	0.46		$	1.44		$	0.91
Income from continuing operations attributable to Twenty-First Century Fox, Inc. stockholders per share
Basic													$	5.84		$	0.99		$	6.54		$	1.44
Diluted													$	5.81		$	0.99		$	6.50		$	1.44

Net income attributable to Twenty-First Century Fox, Inc. stockholders per share - basic and diluted	$	0.99		$	0.46		$	1.45		$	0.90
Net income attributable to Twenty-First Century Fox, Inc. stockholders per share
Basic													$	5.83		$	0.99		$	6.52		$	1.45
Diluted													$	5.80		$	0.99		$	6.49		$	1.45

The accompanying notes are an integral part of these Unaudited Consolidated Financial Statements.

	For the three months ended December 31,						For the six months ended December 31,						For the three months ended December 31,						For the six months ended December 31,
	2017			2016			2017			2016			2018			2017			2018			2017
Net income	$	1,916		$	936		$	2,836		$	1,824		$	10,907		$	1,916		$	12,258		$	2,836
Other comprehensive income (loss), net of tax
Other comprehensive income, net of tax
Foreign currency translation adjustments		38			(153	)		79			(151	)		14			38			(118	)		79
Cash flow hedges		(1	)		5			(1	)		13			(6	)		(1	)		(6	)		(1	)
Unrealized holding gains on securities		97			-			179			-			-			97			-			179
Benefit plan adjustments		61			34			67			43			16			61			22			67
Equity method investments		36			(104	)		58			(163	)		446			36			412			58
																				-
Other comprehensive income (loss), net of tax		231			(218	)		382			(258	)
Other comprehensive income, net of tax														470			231			310			382

Comprehensive income		2,147			718			3,218			1,566			11,377			2,147			12,568			3,218

Less: Net income attributable to noncontrolling interests^(a)		(85	)		(80	)		(150	)		(147	)		(92	)		(85	)		(158	)		(150	)
Less: Other comprehensive (income) loss attributable to noncontrolling interests		(4	)		21			(13	)		20
Less: Other comprehensive loss (income) attributable to noncontrolling interests														5			(4	)		9			(13	)

Comprehensive income attributable to Twenty-First Century Fox, Inc. stockholders	$	2,058		$	659		$	3,055		$	1,439		$	11,290		$	2,058		$	12,419		$	3,055

The accompanying notes are an integral part of these Unaudited Consolidated Financial Statements.

	As of December 31, 2017			As of June 30, 2017			As of December 31, 2018			As of June 30, 2018
	(unaudited)			(audited)			(unaudited)			(audited)
ASSETS
Current assets
Cash and cash equivalents	$	5,809		$	6,163		$	21,281		$	7,622
Receivables, net		7,554			6,477			8,083			7,120
Inventories, net		3,132			3,101			3,934			3,669
Other		907			545			719			922

Total current assets		17,402			16,286			34,017			19,333

Non-current assets
Receivables, net		732			543			859			724
Investments		4,364			3,902			833			4,112
Inventories, net		8,034			7,452			8,133			7,518
Property, plant and equipment, net		1,840			1,781			1,971			1,956
Intangible assets, net		6,228			6,574			5,970			6,101
Goodwill		12,789			12,792			12,758			12,768
Other non-current assets		1,469			1,394			1,345			1,319

Total assets	$	52,858		$	50,724		$	65,886		$	53,831

LIABILITIES AND EQUITY
Current liabilities
Borrowings	$	631		$	457		$	887		$	1,054
Accounts payable, accrued expenses and other current liabilities		3,692			3,451			3,236			3,248
Participations, residuals and royalties payable		1,753			1,657			1,822			1,748
Program rights payable		1,260			1,093			1,135			1,368
Deferred revenue		719			580			855			826
								-
Total current liabilities		8,055			7,238			7,935			8,244

Non-current liabilities
Borrowings		19,163			19,456			18,321			18,469
Other liabilities		3,675			3,616			3,848			3,664
Deferred income taxes		1,622			2,782			1,971			1,892
Redeemable noncontrolling interests		712			694			576			764
Commitments and contingencies
Equity
Class A common stock^(a)		11			11			11			11
Class B common stock^(b)		8			8			8			8
Additional paid-in capital		12,392			12,406			12,573			12,612
Retained earnings		7,627			5,315			21,292			8,934
Accumulated other comprehensive loss		(1,649	)		(2,018	)		(1,879	)		(2,001	)
								-
Total Twenty-First Century Fox, Inc. stockholders' equity		18,389			15,722			32,005			19,564
Noncontrolling interests		1,242			1,216			1,230			1,234

Total equity		19,631			16,938			33,235			20,798

Total liabilities and equity	$	52,858		$	50,724		$	65,886		$	53,831

The accompanying notes are an integral part of these Unaudited Consolidated Financial Statements.

	For the six months ended December 31,						For the six months ended December 31,
	2017			2016			2018			2017
OPERATING ACTIVITIES
Net income	$	2,836		$	1,824		$	12,258		$	2,836
Less: Income (loss) from discontinued operations, net of tax		11			(7	)
Less: (Loss) income from discontinued operations, net of tax								(24	)		11

Income from continuing operations		2,825			1,831			12,282			2,825
Adjustments to reconcile income from continuing operations to cash provided by operating activities
Depreciation and amortization		284			270			317			284
Amortization of cable distribution investments		43			31			20			43
Impairment and restructuring charges		24			176			16			24
Equity-based compensation		66			62			70			66
Equity (earnings) losses of affiliates		(27	)		6
Equity losses (earnings) of affiliates								74			(27	)
Cash distributions received from affiliates		11			184			10			11
Other, net		301			99			(10,527	)		301
Deferred income taxes and other taxes		(1,300	)		(71	)
Deferred income taxes								(155	)		(1,300	)
Change in operating assets and liabilities, net of acquisitions and dispositions
Receivables		(1,267	)		(874	)		(693	)		(1,267	)
Inventories net of program rights payable		(417	)		(764	)		(1,300	)		(417	)
Accounts payable and accrued expenses		388			120			(145	)		388
Other changes, net		(427	)		162			588			(427	)

Net cash provided by operating activities from continuing operations		504			1,232			557			504

INVESTING ACTIVITIES
Property, plant and equipment		(238	)		(117	)		(219	)		(238	)
Investments in equity affiliates		(209	)		(7	)		(266	)		(209	)
Proceeds from dispositions, net		362			-			15,020			362
Other investments		(84	)		(126	)
Other investing activities, net								(206	)		(84	)

Net cash used in investing activities from continuing operations		(169	)		(250	)
Net cash provided by (used in) investing activities from continuing operations								14,329			(169	)

FINANCING ACTIVITIES
Borrowings		1,282			879			90			1,282
Repayment of borrowings		(1,411	)		(546	)		(412	)		(1,411	)
Repurchase of shares		-			(619	)
Dividends paid and distributions		(512	)		(481	)		(517	)		(512	)
Employee taxes paid for share-based payment arrangements								(162	)		(32	)
Other financing activities, net		(50	)		(53	)		(89	)		(18	)

Net cash used in financing activities from continuing operations		(691	)		(820	)		(1,090	)		(691	)

Net decrease in cash and cash equivalents from discontinued operations		(26	)		(15	)		(32	)		(26	)

Net (decrease) increase in cash and cash equivalents		(382	)		147
Net increase (decrease) in cash and cash equivalents								13,764			(382	)
Cash and cash equivalents, beginning of year		6,163			4,424			7,622			6,163
Exchange movement on cash balances		28			(41	)		(105	)		28

Cash and cash equivalents, end of period	$	5,809		$	4,530		$	21,281		$	5,809

The accompanying notes are an integral part of these Unaudited Consolidated Financial Statements.

Twenty-First Century Fox, Inc., a Delaware corporation, and its subsidiaries (together, “Twenty-First Century Fox” or the “Company”) is a diversified global media and entertainment company, which currently manages and reports its businesses in the following four segments: Cable Network Programming, Television, Filmed Entertainment and Other, Corporate and Eliminations.

The accompanying Unaudited Consolidated Financial Statements of Twenty-First Century Fox have been prepared in accordance with United States (“U.S.”) generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. In the opinion of management, all adjustments consisting only of normal recurring adjustments necessary for a fair presentation have been reflected in these Unaudited Consolidated Financial Statements. Operating results for the interim periods presented are not necessarily indicative of the results that may be expected for the fiscal year ending June 30, ~~2018.~~2019.

These interim Unaudited Consolidated Financial Statements and notes thereto should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, ~~2017~~2018 as filed with the Securities and Exchange Commission (the “SEC”) on August ~~14, 2017~~13, 2018 (the ~~“2017~~“2018 Form 10-K”).

The Unaudited Consolidated Financial Statements include the accounts of Twenty-First Century Fox. All significant intercompany accounts and transactions have been eliminated in consolidation, including the intercompany portion of transactions with equity method investees. Equity i~~Investments~~nvestments in and advances to entities or joint ventures in which the Company has significant influence, but less than a controlling voting interest, are accounted for using the equity method. ~~Investments~~Significant influence is generally presumed to exist when the Company owns an interest between 20% and 50% and exercises significant influence. Equity investments in which the Company has no significant influence ~~are designated as available-for-sale investments if~~(generally less than a 20% ownership interest) with readily determinable ~~market~~fair values are ~~available.~~ recorded at fair value using quoted market prices. If an equity investment’s fair value is not readily determinable and does not qualify for the net asset value (“NAV”) practical expedient, the Company ~~accounts~~will recognize it at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for ~~its~~the identical or a similar investment ~~at cost.~~of the same issuer. The unrealized gains and losses and the adjustments related to the observable price changes are recognized in net income.

The preparation of the Company’s consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts that are reported in the consolidated financial statements and accompanying disclosures. Actual results may differ from those estimates.

Certain fiscal ~~2017~~2018 amounts have been reclassified to conform to the fiscal ~~2018~~2019 presentation. Unless indicated otherwise, the information in the notes to the Unaudited Consolidated Financial Statements relates to the Company’s continuing operations.

The Company has reclassified certain fiscal 2017 amounts for development and certain other costs from Selling, general and administrative to Operating expenses within the Consolidated Statement of Operations to conform to the fiscal 2018 presentation. These reclassifications did not affect previously reported Revenue, Income from continuing operations before income tax benefit (expense) or Net income in the Consolidated Statement of Operations.

In ~~March 2016,~~May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) ~~2016-09, “Compensation—Stock Compensation~~2014-09, “Revenue from Contracts with Customers (Topic ~~718): Improvements to Employee Share-Based Payment Accounting”~~606)” (“ASU ~~2016-09”~~2014-09”). The ~~amendments~~core principle of ASU 2014-09 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In addition, ASU ~~2016-09 simplify various aspects related~~2014-09 requires additional disclosure around the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. The Company adopted the requirements of ASU 2014-09 as of July 1, 2018, utilizing the modified retrospective method of transition which resulted in a transition adjustment for all contracts not completed as of July 1, 2018. The transition adjustment was recorded as an increase to ~~how share-based payments are accounted for and presented~~the opening balance of Retained earnings in the ~~financial statements, including~~Consolidated Balance Sheet (See Note 7 – Stockholders’ Equity).

The new standard impacts the ~~income tax consequences, classification~~timing of ~~awards~~revenue recognition for renewals or extensions of existing licensing agreements for intellectual property, which will be recognized as ~~either equity~~revenue once the customer can begin to use and benefit from the license rather than when the agreement is extended or liabilities, and classification on the statement of cash flows. On July 1, 2017, the Company adopted ASU 2016-09. In accordance with ASU 2016-09, the Company will prospectively recognize all excess tax benefits and tax deficiencies in Income tax benefit (expense) in the Statements of Operations. In the statement of cash flows, all excess tax benefits are presented retrospectively in Net cash provided by operating activities from continuing operations. In addition, the Company retrospectively adopted the guidance thatrenewed, under historical GAAP. The new standard requires cash paid by the Company when directly withholding shares for tax withholding purposes to be classified as a financing activity in the statement of cash flows. The adoption of ASU 2016-09 resulted in an increase in Net cash provided by operating activities from continuing operations and a corresponding increase in Net cash used in financing activities from continuing operations in the Statement of Cash Flows for fiscal 2017. The other aspects of ASU 2016-09 did not have a material effect on the Company’s ~~consolidated financial statements.~~Filmed Entertainment segment to recognize revenues from certain television license deals earlier as opposed to recognizing those licenses over the term of the agreements. Conversely, revenues from certain of the

Filmed Entertainment segment’s trademark licensing deals will be recognized over the license terms as opposed to recognition at inception as under historical GAAP. The adoption of the standard also resulted in the reclassification of the Company’s estimates of sales returns from a contra-asset allowance within receivables to a liability. ASU 2014-09 also requires enhanced disclosures relating to the Company’s revenues from contracts with customers (See Note 11 – Revenues), including the disaggregation of revenues.

The following table presents the impact of the adoption of the standard on the Company’s Consolidated Statements of Operations:

	For the three months ended December 31, 2018									For the six months ended December 31, 2018
	As reported			Adjustments			Without adoption of ASC 606			As reported			Adjustments			Without adoption of ASC 606
	(in millions, except per share amounts)
Revenues	$	8,499		$	(28	)	$	8,471		$	15,676		$	50		$	15,726
Operating expenses		(6,005	)		10			(5,995	)		(10,429	)		(43	)		(10,472	)
Selling, general and administrative		(939	)		-			(939	)		(1,829	)		-			(1,829	)
Depreciation and amortization		(159	)		-			(159	)		(317	)		-			(317	)
Impairment and restructuring charges		-			-			-			(16	)		-			(16	)
Equity losses of affiliates		(109	)		-			(109	)		(74	)		(3	)		(77	)
Interest expense, net		(294	)		-			(294	)		(594	)		-			(594	)
Interest income		86			-			86			94			-			94
Other, net		10,475			-			10,475			10,527			-			10,527

Income (loss) from continuing operations before income tax (expense) benefit		11,554			(18	)		11,536			13,038			4			13,042
Income tax (expense) benefit		(630	)		4			(626	)		(756	)		(1	)		(757	)

Income (loss) from continuing operations		10,924			(14	)		10,910			12,282			3			12,285
Loss from discontinued operations, net of tax		(17	)		-			(17	)		(24	)		-			(24	)

Net income (loss)		10,907			(14	)		10,893			12,258			3			12,261
Less: Net income attributable to noncontrolling interests		(92	)		-			(92	)		(158	)		-			(158	)

Net income (loss) attributable to Twenty-First Century Fox stockholders	$	10,815		$	(14	)	$	10,801		$	12,100		$	3		$	12,103

Net income (loss) attributable to Twenty-First Century Fox stockholders per share
Basic	$	5.83		$	(0.01	)	$	5.82		$	6.52		$	-		$	6.52
Diluted	$	5.80		$	(0.01	)	$	5.79		$	6.49		$	-		$	6.49

Changes to the opening balances of current assets, total assets, current liabilities and total liabilities resulting from the adoption of the new guidance were as follows:

In January 2016, the FASB issued ASU 2016-01, “Financial Instruments––Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities” (“ASU 2016-01”). The amendments in ASU 2016-01 address certain aspects of recognition, measurement, presentation and disclosure of financial instruments. The Company adopted this guidance as of July 1, 2018 on a modified retrospective basis and recorded a cumulative effect adjustment to reclassify unrealized holding gains on securities within Accumulated other comprehensive loss to Retained earnings and to record certain equity investments at NAV which were previously accounted for at cost (See Note 7 – Stockholders’ Equity). In addition, the Company recorded changes in the fair value of equity investments with readily determinable fair values in Net income rather than in Accumulated other comprehensive loss (See Note 12 – Additional Financial Information under the heading “Other, net”). Cost method investments that do not have readily determinable fair values will be recognized prospectively at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. The adjustments related to the observable price changes will also be recognized in net income.

In October 2016, the FASB issued ASU 2016-16, “Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory” (“ASU 2016-16”). On July 1, ~~2017,~~2018, the Company adopted ASU 2016-16 and recorded a deferred tax asset of approximately $2.3 billion related to the basis difference in an equity method investment on a modified retrospective basis, through a cumulative-effect adjustment to Retained earnings and also recorded a corresponding valuation allowance. As prescribed, a full valuation allowance was required because the Company was not able to establish sufficient evidence of future taxable income of the appropriate character to realize the deferred tax asset. As a result, the adoption of ASU 2016-16 did not have a material impact on the Company’s Consolidated Financial Statements. Due to the decision to sell Sky which was announced on September 26, 2018, management determined that the valuation allowance was no longer needed. As such, the Company released the valuation allowance related to its deferred tax asset as part of the estimated annual effective tax rate, resulting in a non-cash tax benefit of approximately $1.8 billion and $2.0 billion for the three and six months ended December 31, 2018, respectively. The remaining non-cash tax benefit of approximately $300 million will be realized during the year based upon the Company’s Income from continuing operations before income tax expense (See Note 4 – Investments under the heading “Sky”).

On July 1, 2018, the Company early adopted ASU ~~2017-07, “Compensation–Retirement Benefits~~2018-02, “Income Statement—Reporting Comprehensive Income (Topic ~~715)~~220): ~~Improving the Presentation~~Reclassification of ~~Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost”~~Certain Tax Effects from Accumulated Other Comprehensive Income” (“ASU ~~2017-07”~~2018-02”). on a prospective basis using the security-by-security approach. The objective of ASU ~~2017-07 requires an employer~~2018-02 is to ~~report~~eliminate the ~~service cost component~~stranded tax effects resulting from the Tax Act (as defined below) and to improve the usefulness of ~~net benefit cost~~information reported to financial statement users. The adoption of ASU 2018-02 resulted in a reclassification from Accumulated other comprehensive loss to Retained earnings related to the income tax effects on the change in the ~~same line item as~~federal statutory rate (See Note 7 – Stockholders’ Equity under the heading “Accumulated other compensation costs arising from services rendered by the pertinent employees during the period. The other components of net benefit cost are required to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations. ASU 2017-07 did not have a material effect on the Company’s consolidated financial statements.comprehensive loss”).

In ~~August 2017,~~February 2016, the FASB issued ASU ~~2017-12, “Derivatives~~2016-02, “Leases (Topic 842)”, “Topic 842”, as amended. Topic 842 requires recognition of lease liabilities and ~~Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities” (“ASU 2017-12”). The objective~~right-of-use assets on the balance sheet and disclosure of ASU 2017-12 is to better align an entity’s risk management activities and financial reporting for hedging relationships through changes to both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results. In addition, ASU 2017-12 simplifies the assessment of hedge effectiveness. ASU 2017-12 iskey information about leasing arrangements. Topic 842 will be effective for the Company for annual and interim reporting periods beginning July 1, 2019. The Company expects to apply Topic 842 on a modified retrospective basis with the cumulative effect, if any, of initially applying the new guidance recognized at the date of initial application as an adjustment to opening Retained earnings. The Company is currently evaluating the impact Topic 842 will have on its consolidated financial statements including determining which practical expedients to apply. Since the Company has a significant amount of minimum lease commitments (See Note 15 – Commitments and Contingencies in the 2018 Form 10-K), the Company

expects that the impact of recognizing operating lease liabilities and right-of-use assets will be significant to the Company’s Consolidated Balance Sheet. The Company is in process of gathering the necessary lease data and implementing accounting lease software for all leases as well as assessing necessary changes to the Company’s processes and controls to support the recognition and disclosure requirements in accordance with the new standard.

In August 2018, the FASB issued ASU 2018-14, “Compensation—Retirement Benefits—Defined Benefit Plans—General (Subtopic 715-20): Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans” (“ASU 2018-14”). The amendments in ASU 2018-14 modify certain aspects of disclosure about defined benefit pension and other postretirement plans. ASU 2018-14 will be effective for the Company for annual reporting periods beginning July 1, 2020. Early adoption is ~~permitted in an interim period.~~permitted. The Company is currently evaluating the impact ASU ~~2017-12~~2018-14 will have on its consolidated financial statements.

On December 22, 2017, the U.S. government enacted ~~comprehensive~~ tax legislation commonly referred to as the Tax Cuts and Jobs Act (the “Tax Act”). The Tax Act significantly revises the future ongoing U.S. corporate income tax by, among other things, lowering U.S. corporate income tax rates and implementing a territorial tax system. ~~Since~~Effective July 1, 2018, the ~~Company has a June 30 fiscal year-end, the lower~~Company’s corporate income tax rate ~~will be phased in, resulting in a U.S. statutory federal rate of approximately 28% for the Company’s fiscal year ending June 30, 2018, and~~is 21% for subsequent fiscal years. As part of the transition to the new territorial tax system, the Tax Act imposes a one-time transition tax on deemed repatriation of historical earnings of foreign entities..

As of December 31, 2017, the Company has not completed its analysis of the accounting for all the tax effects of the Tax Act. For the three and six months ended December 31, 2017, the Company recorded a provisional income tax benefit of $1.3 billion to adjust its net deferred tax liability position in accordance with the Tax Act. The net deferred tax liability represents future tax obligations. Among the Company’s more significant net deferred tax liabilities are basis differences and amortization, and sports rights contracts. The final amount of the adjustment to the net deferred tax liability could be revised based on changes in interpretations of the Tax Act and any updates or changes to estimates based on additional information the Company obtains or analyzes.

The Company has not recorded a liability for the transition tax to a territorial tax system. The Company is continuing to gather and analyze information to determine the deemed unremitted earnings subject to the transition tax, some of which was not previously needed or not yet accumulated, and the related U.S. tax impacts. The Company will record a transition tax amount when it has received and analyzed the needed information sufficient to make a reasonable estimate.

The SEC ~~has~~ issued guidance that ~~would allow~~allowed for a measurement period of up to one year after the enactment date of the Tax Act to finalize the recording of the related tax impacts. ~~We currently anticipate finalizing~~As of December 31, 2018, the Company has finalized its analysis and ~~recording any resulting adjustments by~~has not materially modified the ~~end~~provisional amounts previously recorded (See Note 2 – Summary of Significant Accounting Policies in the ~~Company’s~~2018 Form 10-K under the heading “U.S. Tax Reform”).

The Tax Act also includes a new minimum tax on certain foreign earnings (“global intangible low-tax income” or “GILTI”) which imposes a tax on foreign earnings and profits in excess of a deemed return on tangible assets of foreign subsidiaries and allows a deduction for foreign-derived intangible income (“FDII”). These provisions are effective for the Company in the current fiscal ~~year ending June 30,~~year. For the six months ended December 31, 2018, the Company computed amounts for both items and included the ~~adjustments could possibly be material.~~impacts in its annualized effective tax rate calculation. The Company will account for the effects of GILTI as a component of income tax expense in the period the tax arises.

~~In December 2017,~~ the Company entered into an Amended and Restated Merger Agreement and Plan of Merger (the ~~“Merger~~“Amended and Restated Merger Agreement”) with The Walt Disney Company (“Disney”). and TWDC Holdco 613 Corp., a newly formed holding company and wholly-owned subsidiary of Disney (“New Disney”), which amends and restates in its entirety the Agreement and Plan of Merger that the Company entered into with Disney in December 2017, pursuant to which, among other things, at the closing, the Company will merge with and into a subsidiary of New Disney (the “21CF Merger”), Disney will merge with and into a subsidiary of New Disney (the “Disney Merger,” and together with the 21CF Merger, the “Mergers”), and each of Disney and the Company will become wholly-owned subsidiaries of New Disney. Prior to the consummation of the ~~Initial Merger (as hereinafter defined),~~Mergers, the Company will transfer a portfolio of the Company’s news, sports and broadcast businesses, including the ~~Fox~~FOX News Channel ~~Fox~~(“FOX News”), FOX Business Network, FOX Broadcasting Company ~~Fox Sports, Fox~~(the “FOX Network”), FOX Television Stations Group, FS1, FS2, ~~Fox~~FOX Deportes and Big ~~Ten~~Ten Network and certain other assets and liabilities into a newly formed subsidiary Fox Corporation (“~~New Fox”~~FOX”) (the ~~“New Fox~~ “FOX Separation”) and ~~the holders of the outstanding shares of the Company’s Class A Common Stock and Class B Common~~

~~Stock will receive, on a pro rata basis,~~distribute all of the issued and outstanding common stock of ~~New Fox~~FOX to the holders of the outstanding shares of the Company’s Class A Common Stock and Class B Common Stock (other than holders that are subsidiaries of the Company (shares held by such holders, the “Hook Stock”)) on a pro rata basis (the ~~“New Fox~~“FOX Distribution”). Prior to the ~~New Fox~~FOX Distribution, ~~New Fox~~FOX will ~~incur indebtedness sufficient to fund~~pay the Company a dividend in the amount of $8.5 billion (the “FOX Dividend”). FOX has and will incur indebtedness sufficientto fund the FOX Dividend, which indebtedness will be reduced after the Mergers by the amount of a cash payment paid by Disney to FOX, if such cash payment is made. As the FOX Separation and FOX Distribution will be taxable to the ~~Company.~~Company at the corporate level, the FOX Dividend is intended to fund the taxes resulting from the FOX Separation and FOX Distribution and certain other transactions contemplated by the Amended and Restated Merger Agreement. The Company will retain all assets and liabilities not transferred to ~~New Fox,~~FOX, including the Twentieth Century Fox Film and Television studios and certain cable and international television businesses, including FX Networks, National Geographic Partners, ~~Fox~~LLC, Regional Sports ~~Regional~~ Networks (“RSNs”), Fox Networks Group International and ~~Star~~STAR India (“STAR”), as well as the Company’s interests in Hulu, LLC (“Hulu”), Sky, ~~plc (“Sky”), Tata~~Tata Sky Limited and Endemol Shine Group. Following the New Fox Distribution, TWC Merger Enterprises 2 Corp., a wholly owned subsidiary of Disney (“Merger Sub”) will merge with and into the Company (the “Initial Merger”), with the Company surviving (the “Surviving Corporation”). Immediately after the effective time of the Initial Merger, the Surviving Corporation will merge with and into TWC Merger Enterprises 1, LLC, a wholly owned subsidiary of Disney (“Merger LLC”), with Merger LLC to be the surviving entity (the “Subsequent Merger,” and together with the Initial Merger, the “Mergers”). As a result of the Mergers, the Company will become a wholly owned subsidiary of Disney.

At the effective time of the Initial Merger, subject to the terms and conditions of the Merger Agreement, each issued and outstanding share of Class A Common Stock and Class B Common Stock of the Company will in the absence of any adjustment be exchanged automatically for and thereafter represent 0.2745 shares of common stock, par value $0.01 per share, of Disney, together with cash in lieu of fractional shares of Disney common stock, without interest, upon the terms and conditions of the Merger Agreement. The exchange ratio is subject to a two-way adjustment based on an estimate at closing of certain tax liabilities arising from the New Fox Distribution and certain other transactions contemplated by the Merger Agreement. In the event that the final estimate of the tax liabilities is lower than the estimate used to set the exchange ratio, the first $2 billion of that adjustment will be made by a net reduction in the amount of the cash dividend to the Company from New Fox. The foregoing proposed transactions are collectively referred to ~~in this report~~ as the ~~“Disney~~ “Transaction”.

Uponconsummationofthe Transaction,eachshareoftheCompany’s commonstockissuedandoutstandingimmediatelypriortothe effectivetimeoftheMergers(otherthan(i)sharesheldintreasurybytheCompanythatarenotheldonbehalfofthirdparties,(ii)sharesthatareHookStockand(iii)sharesheldbytheCompany’s stockholderswhohavenotvotedinfavorofthe21CFMergerandperfectedandnotwithdrawnademandforappraisalrightspursuantto Delawarelaw)willbeexchangedforconsideration(the“MergerConsideration”)intheformofeithercash(the“Cash Consideration”)orafractionofashareofNewDisneycommonstock(the“StockConsideration”).ThevalueoftheMerger ConsiderationmayfluctuatewiththemarketpriceofDisneycommonstockandwill,subjecttothecollardescribedbelow,bedeterminedbasedonthevolume-weightedaveragetradingpriceofashareofDisneycommonstockontheNewYorkStockExchangeoverthefifteendayconsecutivetradingdayperiodendingon(andincluding)thetradingdaythatisthree tradingdayspriortothedateoftheeffective timeoftheDisneyMerger(suchprice,the “AverageDisneyPrice”).Subjecttotheelection,prorationandadjustmentproceduressetforthintheAmendedandRestatedMergerAgreement,eachshare ofthe Company’scommonstockwillbeexchangedforanamount(suchamount,the“PerShareValue”), payableincashorNewDisneycommonstock,equaltothesumof(i)$19.00plus(ii)fiftypercent(50.0%)ofthevalue(determinedbased onthe AverageDisneyPrice)ofanumberofsharesofDisneycommonstockequaltotheexchangeratiodescribedbelow.ThenumberofsharesofNewDisneycommonstocktobedeliveredinexchangeforeachshareoftheCompany’scommonstocktotheCompany’sstockholderselectingtoreceiveStockConsiderationwillbeequaltothePerShareValuedividedbytheAverage DisneyStockPrice.IftheAverageDisneyPriceisgreaterthan$114.32, thentheexchangeratiowillbe0.3324.IftheAverage DisneyPriceislessthan$93.53,thentheexchangeratiowillbe0.4063.Ifthe AverageDisneyPriceisgreaterthanorequalto$93.53butlessthanorequalto$114.32,thentheexchangeratiowillbean amountequalto$38.00dividedbythe AverageDisneyPrice.TheMergerConsiderationissubjecttotheprorationprovisionssetforthintheAmendedandRestatedMerger Agreement,whichensurethattheaggregateCashConsideration(beforegivingeffecttotheadjustmentfortransactiontaxes)isequalto$35.7billion.Asaresult,theformofconsiderationastockholderelectstoreceivemaybeadjustedsuch thatitmayreceive,inpart,adifferentformofconsiderationthantheformitelected.AnystockholderoftheCompanynotmakinganelectionwillreceivetheCashConsideration,theStockConsiderationoracombinationofboth,asdetermined bytheprorationprovisionsoftheAmendedandRestatedMergerAgreement.

To provide ~~New Fox~~FOX with financing in connection with the ~~New Fox~~FOX Distribution, 21st Century Fox America, Inc. (“21CFA”), a wholly-owned subsidiary of the Company, entered into a commitment letter on behalf of ~~New Fox~~FOX with the financial institutions party thereto (the “Bridge Commitment Letter”) which provides for borrowings of up to $9 billion. Given the Company’s current debt ratings, 21CFA pays a commitment fee of 0.1%. ~~While~~In January 2019, FOX issued approximately $6.8 billion of senior notes (See Note 6 – Borrowings under the ~~Company has entered into~~heading “FOX Borrowings”) and reduced the borrowings available under the Bridge Commitment Letter ~~New Fox~~to $1.7 billion. FOX intends to ~~finance~~use the ~~New Fox Distribution by obtaining permanent~~net proceeds of approximately $6.8 billion from the sale of the notes, together with available cash on its balance sheet and other financing facilities, if needed, principally to fund the FOX Dividend and to pay fees and expenses incurred in connection with the ~~capital markets.~~senior notes offering and the Transaction.

Under the terms of the Amended and Restated Merger Agreement, Disney will pay the Company $2.5 billion if the ~~merger is~~Mergers are not consummated under certain circumstances relating to the failure to obtain approvals, or there is a final, non-appealable order preventing the transaction, in each case, relating to antitrust laws, communications laws or foreign regulatory laws. If

On June 27, 2018, the ~~Merger Agreement is terminated under certain other circumstances relating~~Antitrust Division of the U.S. Department of Justice announced that it cleared the Transaction. The Company, Disney and the U.S. Department of Justice have entered into a consent decree that allows the Transaction to ~~changes in board recommendations and/or alternative transactions, the Company or~~proceed, while requiring New Disney ~~may be required to pay the other party approximately $1.5 billion.~~

~~In connection with the Disney Transaction, the Company has made certain representations, warranties~~ and ~~covenants, including, among other things, customary pre-closing covenants by~~ the Company to ~~conduct its business in~~sell the ~~ordinary course consistent with past practice and refraining from taking certain actions without Disney consent. The consummation~~RSNs within 90 days following the closing of the ~~Disney~~ Transaction,which consent decree is subject to ~~various conditions, including among others, (i) customary conditions relating to~~court approval. At separate special meetings of stockholders on July 27, 2018, the ~~adoption of~~Company’s stockholders adopted the Amended and Restated Merger Agreement, ~~by the requisite vote of the Company’s~~ Disney’s stockholders ~~and the approval of~~approved the stock issuance, byand each company’s stockholders adopted or approved the ~~requisite vote of Disney stockholders, (ii)~~other proposals voted on at the ~~consummation of~~special meetings. On November 6, 2018, the New Fox Separation, (iii) the receipt of a tax ruling from the Australian Taxation Office and certain tax opinions with respect to the treatment of the transaction under U.S. and Australian tax laws, and (iv) the receipt of certain regulatory approvals and governmental consents. The Mergers and New Fox Separation are expected to be completed in approximately 12 to 18 months from December 13, 2017.

In December 2016, the Company announced it reached agreement with Sky, in which the Company currently has an approximate 39% interest, on the terms of a recommended pre-conditional cash offer by the Company for the fully diluted share capital of Sky which the Company does not already own, at a price of £10.75 per Sky share (approximately $16 billion in the aggregate) (the “Sky Acquisition”). The independent committee of Sky’s Board of DirectorsEuropean Commission announced that it ~~intends to unanimously recommend that unaffiliated Sky shareholders vote~~approved the Transaction conditional on Disney’s divestiture of its ownership interest in ~~favor of~~ the ~~Sky Acquisition. The Sky~~factual channels it controls in the European Economic Area owned by A&E Television Networks.

TheconsummationoftheTransactionremainssubjecttovariousconditions,includingamongothers,(i)theconsummationoftheFOXSeparation,(ii)thereceiptofcertaintaxopinionswithrespecttothetreatmentofthe TransactionunderU.S.andAustraliantaxlaws,and(iii)thereceiptofcertainregulatoryapprovalsandgovernmentalconsents.TheTransaction isexpectedtobecompletedinthefirsthalfofcalendaryear2019.

The Amended and Restated Merger Agreement generally requires the Company to operate its business in the ordinary course pending consummation of the 21CF Merger and restricts the ~~Acquisition remains~~Company, without Disney’s consent, from taking certain specified actions until the Transaction is consummated or the Amended and Restated Merger Agreement is terminated, including making certain acquisitions and divestitures, entering into certain contracts, incurring certain indebtedness and expenditures, paying dividends in excess of certain thresholds, and repurchasing or issuing securities outside of existing equity award programs.

In February 2018, the Compensation Committee of the Board of Directors of the Company (the “Compensation Committee”) established a cash bonus retention plan for certain employees of approximately $110 million of which 50% is payable at the time of the Mergers and 50% on the 10-month anniversary of the Mergers, subject to each participant's continued employment through the applicable payment date. Additionally, the Compensation Committee made a special grant of approximately 5.9 million restricted stock units (“Retention RSUs”) to certain ~~customary closing conditions,~~of the Company’s senior executives, including ~~approval by~~named executive officers (“NEOs”). The Retention RSU grants will vest 50% at the ~~UK Secretary~~time of ~~State for Digital, Culture, Media~~the Mergers and ~~Sport~~50% on the 15-month anniversary of the Mergers, subject to each executive’s continued employment through the applicable vesting date. The cash bonus retention payment plans are subject to accelerated payment and the Retention RSU grants will be subject to accelerated vesting upon the occurrence of certain termination events. In the event the Amended and Restated Merger Agreement is terminated, the payments under the cash-based retention program will be made and the ~~requisite approval~~Retention RSU grants will vest on the later of Sky shareholders unaffiliated with the Company. The Sky Acquisition has received unconditional clearance by all competent competition authorities including the European Commission, and has been cleared on public interest and plurality grounds in all of the markets in which Sky operates outside of the UK, including Austria, Germany, ItalyDecember 13, 2019 and the ~~Republic~~date of ~~Ireland.The Company anticipates regulatory approval of~~such termination.

~~Also in December 2016,~~Amended and Restated Merger Agreement, the Company ~~entered into a co-operation agreement with Sky (the “Co-Operation Agreement”) pursuant to which the Company and Sky agreed~~is permitted to take certain ~~steps~~actions to ~~facilitate completion~~reduce the amount of any potential “excess parachute payments” for “disqualified individuals” (each as defined in Section 280G of the ~~Sky Acquisition. The Co-Operation Agreement provides for a £200 million (approximately $270 million) break fee payable by~~Internal Revenue Code). In accordance with this provision, the Company modified certain outstanding equity-based awards granted to certain participants (excluding any NEOs) resulting in additional compensation expenses of approximately $40 million for the three and six months ended December 31, 2018, of which approximately $15 million was included in Selling, general and administrative expenses and the remaining amount was included in Other, net in the ~~event that regulatory approvals are not obtained prior to August 15, 2018, or in certain other circumstances described in the Co-Operation Agreement.~~

To provide financing in connection with the Sky Acquisition, the Company and 21CFA entered into a bridge credit agreement with the lenders party thereto (the “Bridge Credit Agreement”). The Bridge Credit Agreement provides for borrowingsUnaudited Consolidated Statements of up to £12.2 billion (approximately $16 billion). Fees under the Bridge Credit Agreement are based on the Company’s long-term senior unsecured non-credit enhanced debt ratings. Given the current debt ratings, 21CFA pays a commitment fee on undrawn funds of 0.1% and the initial interest rate on advances will be London Interbank Offered Rate (“LIBOR”) plus 1.125% with subsequent increases every 90 days up to LIBOR plus 1.875%. 21CFA has also agreed to pay a duration fee on each of the 90th, 180th and 270th day after the funding of the loans in an amount equal to 0.50%, 0.75%, and 1.00%, respectively, of the aggregate principal amount of the advances and undrawn commitments outstanding at the time. The terms of the Bridge Credit Agreement also include the requirement that 21CFA maintain a certain leverage ratio and limitations with respect to secured indebtedness. While the Company has entered into the Bridge Credit Agreement, the Company intends to finance the Sky Acquisition by using a significant portion of the available cash on its balance sheet and obtaining permanent financing in the capital markets. The Company purchased a foreign currency exchange option in February 2017, which was subsequently modified in September 2017, to limit its foreign currency exchange rate risk in connection with the Sky Acquisition (See Note 5 – Fair Value under the heading “Foreign Currency Contracts” and Note 11 – Additional Financial Information under the heading “Other, net” for additional information).

The Company believes the Sky Acquisition will result in enhanced capabilities of the combined company, underpinned by a more geographically diverse and stable revenue base, and an improved balance between subscription, affiliate fee, advertising and content revenues.Operations.

In ~~February~~March 2017, the ~~Company announced that it anticipated receiving approximately $350 million in proceeds resulting from the~~ Federal Communications Commission’s (the “FCC”) ~~reverse~~concluded a voluntary auction ~~for~~to reclaim television broadcast station spectrum. ~~Consequently, the~~The Company ~~will~~had three stations’ bids of approximately $350 million to relinquish spectrum ~~used~~accepted by the FCC as part of the auction and received the proceeds in July 2017. As a result, the spectrum previously utilized by its television stations ~~affiliated with both The CW Television Network and Master Distribution Service, Inc. (“MyNetworkTV”)~~ in ~~Chicago, IL and MyNetworkTV in the~~ Washington, DC, ~~and~~ Charlotte, NC and Chicago, IL designated market areas, in which the Company operates ~~duopolies.~~duopolies, has been relinquished to the FCC. The Company recorded a pre-tax gain of $114 million of which $102 million was recorded in fiscal 2018 and the remaining balance was recorded in Other, net in the Unaudited Consolidated Statement of Operations for the six months ended December 31, 2018 for the spectrum relinquished to the FCC in July 2018. These television stations will continue broadcasting using the spectrum of the existing FOX ~~Broadcasting Company (“FOX”)~~Network owned and operated station in that market. ~~The proceeds were received in July 2017 and the Company recorded a deferred gain on this transaction which will be recognized upon relinquishing the spectrum to the FCC.~~

	As of December 31, 2017			As of June 30, 2017			As of December 31, 2018			As of June 30, 2018
	(in millions)						(in millions)
Programming rights
Sports programming rights	$	3,444		$	3,201
Entertainment programming rights		3,264			3,232
Sports Programming rights							$	3,920		$	3,676
Entertainment Programming rights^(a)								3,311			3,263
Filmed entertainment costs
Films
Released, less accumulated amortization		1,356			1,112			1,109			1,249
Completed, not released		106			398			195			98
In production		1,409			1,094			1,900			1,556
In development or preproduction		191			295			245			221
		-						-
		3,062			2,899			3,449			3,124

Television productions
Released, less accumulated amortization		752			838			645			743
In production, development or preproduction		644			383			742			381

		1,396			1,221			1,387			1,124

Total filmed entertainment costs, less accumulated amortization^(a)(b)		4,458			4,120			4,836			4,248

Total inventories, net		11,166			10,553			12,067			11,187
Less: current portion of inventories, net^(b)(c)		(3,132	)		(3,101	)		(3,934	)		(3,669	)

Total non-current inventories, net	$	8,034		$	7,452		$	8,133		$	7,518

		Ownership percentage as of December 31, 2017		As of December 31, 2017			As of June 30, 2017			Ownership percentage as of December 31, 2018		As of December 31, 2018		As of June 30, 2018
				(in millions)								(in millions)
Sky^(b)(a)	European direct broadcast satellite operator		39%	$	3,399		$	3,175	European direct broadcast satellite operator	-%		$	-	$	3,306
Endemol Shine Group^(b)	Global multi-platform content provider		50%		275			262	Global multi-platform content provider		50%		168		188
Other investments(c)		various			690	^(c)		465		various			665		618

Total investments				$	4,364		$	3,902				$	833	$	4,112

The Company owns an equity interest in Hulu. In August 2016, Hulu issued a 10% equity interest to a new investor thereby diluting the Company’s ownership from 33% to 30%. For a period of up to 36 months, under certain limited circumstances arising from regulatory review, the new investor may put its shares to Hulu or Hulu may call the shares from the new investor. If Hulu is required to fund the repurchase of shares from the new investor, the Company has agreed to make an additional capital contribution of up to approximately $300 million to Hulu. As a result of these conditions, the Company will record a gain on the dilution of its ownership interest upon resolution of the contingency. The Company will continue to account for its interest in Hulu as an equity method investment.

For the six months ended December 31, ~~2017,~~2018, the Company invested approximately ~~$200~~$225 million in Hulu to maintain its ownership percentage and has committed to an additional investment of approximately ~~$450~~$645 million in calendar year ~~2018.~~2019.

During the first quarter of fiscal 2019, the Company invested, in the aggregate, approximately $100 million in cash for a minority equity interest in Caffeine, Inc. (“Caffeine”), a social broadcasting platform for gaming, entertainment and other creative content, and Caffeine Studio, LLC (“Caffeine Studios”), a newly formed venture that is jointly owned by the Company and Caffeine. The Company accounts for the investments in Caffeine at cost plus or minus observable price changes and Caffeine Studios as an equity method investment.

In accordance with ASC 820, “Fair Value Measurement,” fair value measurements are required to be disclosed using a three-tiered fair value hierarchy which distinguishes market participant assumptions into the following categories: (i) inputs that are quoted prices in active markets (“Level 1”); (ii) inputs other than quoted prices included within Level 1 that are observable, including quoted prices for similar assets or liabilities (“Level 2”); and (iii) inputs that require the entity to use its own assumptions about market participant assumptions (“Level 3”).

The following tables present information about financial assets and liabilities carried at fair value on a recurring basis:

	Fair value measurements										Fair value measurements
	As of December 31, 2017										As of December 31, 2018
	Total			Level 1		Level 2		Level 3			Total			Level 1		Level 2			Level 3
	(in millions)										(in millions)
Assets
Investments^(a)	$	312		$	312	$	-	$	-		$	185		$	185	$	-		$	-
Derivatives^(b)		50			-		50		-			7			-		7			-
Other^(c)		91			-		-		91			65			-		-			65
Liabilities
Derivatives^(b)												(10	)		-		(10	)		-
Redeemable noncontrolling interests		(712	)		-		-		(712	)		(576	)		-		-			(576	)

Total	$	(259	)	$	312	$	50	$	(621	)	$	(329	)	$	185	$	(3	)	$	(511	)

	As of June 30, 2017											As of June 30, 2018
	Total			Level 1		Level 2			Level 3			Total			Level 1		Level 2		Level 3
	(in millions)											(in millions)
Assets
Investments^(a)												$	257		$	257	$	-	$	-
Derivatives^(b)	$	48		$	-	$	48		$	-			14			-		14		-
Other^(c)		43			-		-			43			73			-		-		73
Liabilities
Derivatives^(b)		(9	)		-		(9	)		-
Redeemable noncontrolling interests		(694	)		-		-			(694	)		(764	)		-		-		(764	)

Total	$	(612	)	$	-	$	39		$	(651	)	$	(420	)	$	257	$	14	$	(691	)

The Company accounts for redeemable noncontrolling interests in accordance with ASC 480-10-S99-3A, “Distinguishing Liabilities from Equity” (“ASC 480-10-S99-3A”), because their exercise is outside the control of the Company. The redeemable noncontrolling interests recorded at fair value are put arrangements held by the noncontrolling interests in certain of the Company’s majority-owned sports networks. The Company utilizes the market, income or cost approaches or a combination of these valuation techniques for its Level 3 fair value measures, using observable inputs such as market data obtained from independent sources. To the extent observable inputs are not available, the Company utilizes unobservable inputs based upon the assumptions market participants would use in valuing the asset (liability). Two minority shareholders’ put rights will become exercisable in March ~~2018~~2019 and one minority ~~shareholder’s~~shareholders’ put right will become exercisable in July ~~2018.~~2019. The remaining redeemable noncontrolling interests are currently not exercisable.

The changes in redeemable noncontrolling interests classified as Level 3 measurements were as follows:

The carrying value of the Company’s financial instruments, such as cash and cash equivalents, receivables, payables and ~~cost~~investments without a readily determinable fair value and not accounted for using the equity method, ~~investments,~~ approximates fair value.

	As of December 31, 2017		As of June 30, 2017		As of December 31, 2018		As of June 30, 2018
	(in millions)				(in millions)
Borrowings

Fair value	$	24,573	$	23,853	$	22,809	$	22,591

Carrying value	$	19,794	$	19,913	$	19,208	$	19,523

Fair value is generally determined by reference to market values resulting from trading on a national securities exchange or in an over-the-counter market (a Level 1 measurement).

The Company uses foreign currency forward contracts primarily to hedge certain exposures to foreign currency exchange rate risks associated with ~~revenues and~~ the cost of producing or acquiring films and television programming. The Company also entered into a foreign currency option contract to limit its foreign currency exchange rate risk in connection with the Sky Acquisition. For accounting purposes, the option contract ~~does~~did not qualify for hedge accounting and therefore ~~has been~~was treated as an economic hedge (See Note 24 – ~~Acquisitions, Disposals and Other Transactions~~Investments under the heading ~~“Sky Acquisition”~~“Sky”).

	As of December 31, 2017		As of June 30, 2017		As of December 31, 2018			As of June 30, 2018
	(in millions)				(in millions)
Cash Flow Hedges

Notional amount	$	116	$	209	$	286		$	119

Fair value	$	1	$	-	$	(9	)	$	(2	)

For foreign currency forward contracts designated as cash flow hedges, the Company expects to reclassify the cumulative changes in fair values, included in Accumulated other comprehensive loss, within the next ~~two years.~~year.

	As of December 31, 2017		As of June 30, 2017		As of December 31, 2018		As of June 30, 2018
	(in millions)				(in millions)
Economic Hedges

Notional amount^(a)	$	12,552	$	12,371	$	16	$	12,788	^(a)

Fair value^(a)	$	44	$	38	$	-	$	8	^(a)

The Company uses interest rate swap contracts to hedge certain exposures to interest rate risks associated with certain borrowings.

	As of December 31, 2017		As of June 30, 2017		As of December 31, 2018		As of June 30, 2018
	(in millions)				(in millions)
Cash Flow Hedges

Notional amount	$	635	$	663	$	580	$	608
							\
Fair value	$	5	$	1	$	6	$	8

For interest rate swap contracts designated as cash flow hedges, the Company expects to reclassify the cumulative changes in fair values, included in Accumulated other comprehensive loss, within the next ~~two years.~~year.

Cash and cash equivalents are maintained with several financial institutions. The Company has deposits held with banks that exceed the amount of insurance provided on such deposits. Generally, these deposits may be redeemed upon demand and are maintained with financial institutions of reputable credit and, therefore, bear minimal credit risk.

The Company’s receivables did not represent significant concentrations of credit risk as of December 31, ~~2017~~2018 or June 30, ~~2017~~2018 due to the wide variety of customers, markets and geographic areas to which the Company’s products and services are sold.

The Company monitors its positions with, and the credit quality of, the financial institutions which are counterparties to its financial instruments. The Company is exposed to credit loss in the event of nonperformance by the counterparties to the agreements. As of December 31, ~~2017,~~2018, the Company did not anticipate nonperformance by any of the counterparties.

In December 2017, the Yankees Entertainment and Sports Network (the “YES Network”) amended its credit agreement to decrease the total size of its credit facility from approximately $1.8 billion to $1.6 billion. The credit facility is comprised of a $1.1 billion term loan facility and a $500 million secured revolving credit facility. The amendment also extended the maturity date of the credit agreement to December 2023. As of December 31, 2017, the outstanding balance on the term loan facility and revolving credit facility were approximately $1.1 billion and $130 million, respectively. The YES Network pays a commitment fee (currently 0.275%) on undrawn funds that is determined by the total leverage ratio.

STAR has entered into various unsecured credit facilities (the “STAR Credit Facilities”) that are available for working capital and for acquiring programming rights. These credit facilities are uncommitted and are reviewed periodically for renewal. As of December 31, 2018, the STAR Credit Facilities had a total capacity for borrowings of approximately INR 14 billion (approximately $200 million), which was subsequently increased to approximately INR 28 billion (approximately $395 million). As of December 31, 2018, the outstanding balance on the STAR Credit Facilities was $84 million. Borrowings under the credit facilities are due on demand by the lenders providing up to 60 days’ notice. Borrowings with on demand repayment terms are presented as Current borrowings in the Consolidated Balance Sheets.

Included in Borrowings within Current liabilities as of December 31, ~~2017~~2018 was ~~$350~~$700 million of ~~7.25%~~6.90% Senior Notes that are due in ~~May 2018, $250 million of 8.25% Senior Notes that are due in August 2018 and~~March 2019, principal payments on the ~~YES~~Yankees Entertainment and Sports Network (the “YES Network”) term loan facility of $31 million that are due in the next 12 ~~months.~~months, $72 million related to the STAR term loan and $84 million related to the STAR Credit Facilities.

~~See~~In January 2019, FOX issued $750 million of 3.666% Senior Notes due 2022, $1.25 billion of 4.030% Senior Notes due 2024, $2.00 billion of 4.709% Senior Notes due 2029, $1.25 billion of 5.476% Senior Notes due 2039 and $1.55 billion of 5.576% Senior Notes due 2049 (the “Notes Offering”). FOX intends to use the net proceeds of approximately $6.8 billion from the sale of the notes, together with available cash on its balance sheet and other financing facilities, if needed, principally to fund the FOX Dividend and to pay fees and expenses incurred in connection with the Notes Offering and the Transaction (See Note 2 – Acquisitions, Disposals and Other Transactions under the heading ~~“Sky Acquisition”~~“Disney Transaction/Distribution of FOX”).

	For the three months ended December 31, 2017									For the six months ended December 31, 2017										For the three months ended December 31, 2018										For the six months ended December 31, 2018
	Twenty-First Century Fox stockholders		Noncontrolling interests				Total equity			Twenty-First Century Fox stockholders			Noncontrolling interests				Total equity			Twenty-First Century Fox stockholders			Noncontrolling interests				Total equity			Twenty-First Century Fox stockholders				Noncontrolling interests				Total equity
	(in millions)																			(in millions)
Balance, beginning of period	$	16,304	$	1,252			$	17,556		$	15,722		$	1,216			$	16,938		$	20,698		$	1,226			$	21,924		$	19,564			$	1,234			$	20,798
Adoption of ASUs																					-			-				-			244		^(a)		-				244
Adjusted balance, beginning of period																					20,698			1,226				21,924			19,808				1,234				21,042
Net income		1,831		37		^(a)		1,868			2,686			73		^(a)		2,759			10,815			56		^(b⁾		10,871			12,100				98		^(b)		12,198
Other comprehensive income		227		4				231			369			13				382
Other comprehensive income (loss)																					475			(5	)			470			319				(9	)			310
Issuance of shares		-		-				-			41			-				41			71			-				71			204				-				204
Dividends declared		-		-				-			(333	)		-				(333	)		-			-				-			(334	)			-				(334	)
Other		27		(51	)	^(b)		(24	)		(96	)		(60	)	^(b)		(156	)		(54	)		(47	)	^(c)		(101	)		(92	)			(93	)	^(c)		(185	)
																					-
Balance, end of period	$	18,389	$	1,242			$	19,631		$	18,389		$	1,242			$	19,631		$	32,005		$	1,230			$	33,235		$	32,005			$	1,230			$	33,235

	For the three months ended December 31, 2016										For the six months ended December 31, 2016										For the three months ended December 31, 2017									For the six months ended December 31, 2017
	Twenty-First Century Fox stockholders			Noncontrolling interests				Total equity			Twenty-First Century Fox stockholders			Noncontrolling interests				Total equity			Twenty-First Century Fox stockholders		Noncontrolling interests				Total equity			Twenty-First Century Fox stockholders			Noncontrolling interests				Total equity
	(in millions)																				(in millions)
Balance, beginning of period	$	13,807		$	1,248			$	15,055		$	13,661		$	1,220			$	14,881		$	16,304	$	1,252			$	17,556		$	15,722		$	1,216			$	16,938
Net income		856			37		^(a)		893			1,677			77		^(a)		1,754			1,831		37		^(b)		1,868			2,686			73		^(b)		2,759
Other comprehensive loss		(197	)		(21	)			(218	)		(238	)		(20	)			(258	)
Cancellation of shares, net		(138	)		-				(138	)		(528	)		-				(528	)
Other comprehensive income																						227		4				231			369			13				382
Issuance of shares																						-		-				-			41			-				41
Dividends declared		-			-				-			(335	)		-				(335	)		-		-				-			(333	)		-				(333	)
Other		12			(49	)	^(b)		(37	)		103			(62	)	^(b)		41			27		(51	)	^(c)		(24	)		(96	)		(60	)	^(c)		(156	)
		-																				-
Balance, end of period	$	14,340		$	1,215			$	15,555		$	14,340		$	1,215			$	15,555		$	18,389	$	1,242			$	19,631		$	18,389		$	1,242			$	19,631

Comprehensive income is reported in the Unaudited Consolidated Statements of Comprehensive Income and consists of Net income and Other comprehensive income (loss), including foreign currency translation adjustments, ~~losses~~gains and ~~gains~~losses on cash flow hedges, unrealized holding gains and losses on securities, benefit plan adjustments and the Company’s share of other comprehensive income (loss) of equity method investees, which affect stockholders’ equity, and under GAAP, are excluded from Net income.

The following tables summarize the activity within Other comprehensive income (loss):

	For the three months ended December 31, 2017									For the six months ended December 31, 2017									For the three months ended December 31, 2018									For the six months ended December 31, 2018
	Before tax			Tax (provision) benefit			Net of tax			Before tax			Tax (provision) benefit			Net of tax			Before tax			Tax (provision) benefit			Net of tax			Before tax			Tax (provision) benefit			Net of tax
	(in millions)																		(in millions)
Foreign currency translation adjustments
Unrealized gains	$	38		$	-		$	38		$	79		$	-		$	79

Other comprehensive income	$	38		$	-		$	38		$	79		$	-		$	79
Cash flow hedges
Unrealized gains	$	1		$	-		$	1		$	9		$	(3	)	$	6
Unrealized gains (losses)																			$	11		$	(1	)	$	10		$	(121	)	$	(1	)	$	(122	)
Reclassifications realized in net income^(a)		(3	)		1			(2	)		(11	)		4			(7	)		6			(2	)		4			6			(2	)		4

Other comprehensive income (loss)^(b)																			$	17		$	(3	)	$	14		$	(115	)	$	(3	)	$	(118	)
Cash flow hedges
Unrealized losses																			$	(9	)	$	2		$	(7	)	$	(9	)	$	2		$	(7	)
Reclassifications realized in net income^(c)																				1			-			1			1			-			1

Other comprehensive loss	$	(2	)	$	1		$	(1	)	$	(2	)	$	1		$	(1	)	$	(8	)	$	2		$	(6	)	$	(8	)	$	2		$	(6	)
Gains on securities
Benefit plan adjustments
Unrealized gains	$	154		$	(57	)	$	97		$	283		$	(104	)	$	179		$	13		$	(3	)	$	10		$	13		$	(3	)	$	10

Other comprehensive income	$	154		$	(57	)	$	97		$	283		$	(104	)	$	179
Benefit plan adjustments
Reclassification adjustments realized in net income^(b)	$	96		$	(35	)	$	61		$	106		$	(39	)	$	67
Reclassifications realized in net income^(d)																				7			(1	)		6			15			(3	)		12

Other comprehensive income	$	96		$	(35	)	$	61		$	106		$	(39	)	$	67		$	20		$	(4	)	$	16		$	28		$	(6	)	$	22
Equity method investments
Unrealized gains and reclassifications	$	50		$	(14	)	$	36		$	84		$	(26	)	$	58
Unrealized losses and reclassifications																			$	(5	)	$	-		$	(5	)	$	(47	)	$	8		$	(39	)
Amount reclassified on sale of Sky^(a)																				627			(176	)		451			627			(176	)		451

Other comprehensive income	$	50		$	(14	)	$	36		$	84		$	(26	)	$	58		$	622		$	(176	)	$	446		$	580		$	(168	)	$	412

	For the three months ended December 31, 2016									For the six months ended December 31, 2016									For the three months ended December 31, 2017									For the six months ended December 31, 2017
	Before tax			Tax (provision) benefit			Net of tax			Before tax			Tax (provision) benefit			Net of tax			Before tax			Tax (provision) benefit			Net of tax			Before tax			Tax (provision) benefit			Net of tax
	(in millions)																		(in millions)
Foreign currency translation adjustments
Unrealized losses	$	(153	)	$	-		$	(153	)	$	(151	)	$	-		$	(151	)
Unrealized gains																			$	38		$	-		$	38		$	79		$	-		$	79

Other comprehensive loss	$	(153	)	$	-		$	(153	)	$	(151	)	$	-		$	(151	)
Other comprehensive income^(b)																			$	38		$	-		$	38		$	79		$	-		$	79
Cash flow hedges
Unrealized gains	$	2		$	(1	)	$	1		$	13		$	(5	)	$	8		$	1		$	-		$	1		$	9		$	(3	)	$	6
Reclassifications realized in net income^(a)(c)		5			(1	)		4			7			(2	)		5			(3	)		1			(2	)		(11	)		4			(7	)

Other comprehensive loss																			$	(2	)	$	1		$	(1	)	$	(2	)	$	1		$	(1	)
Gains on securities
Unrealized gains																			$	154		$	(57	)	$	97		$	283		$	(104	)	$	179

Other comprehensive income	$	7		$	(2	)	$	5		$	20		$	(7	)	$	13		$	154		$	(57	)	$	97		$	283		$	(104	)	$	179
Benefit plan adjustments
Reclassification adjustments realized in net income^(b)	$	54		$	(20	)	$	34		$	68		$	(25	)	$	43
Reclassifications realized in net income^(d)																			$	96		$	(35	)	$	61		$	106		$	(39	)	$	67

Other comprehensive income	$	54		$	(20	)	$	34		$	68		$	(25	)	$	43		$	96		$	(35	)	$	61		$	106		$	(39	)	$	67
Equity method investments
Unrealized losses and reclassifications	$	(156	)	$	52		$	(104	)	$	(223	)	$	60		$	(163	)
Unrealized gains and reclassifications																			$	50		$	(14	)	$	36		$	84		$	(26	)	$	58

Other comprehensive loss	$	(156	)	$	52		$	(104	)	$	(223	)	$	60		$	(163	)
Other comprehensive income																			$	50		$	(14	)	$	36		$	84		$	(26	)	$	58

The following table summarizes the changes in the components of Accumulated other comprehensive loss, net of tax:

The following table sets forth the Company’s computation of Income from continuing operations attributable to Twenty-First Century Fox stockholders:

	For the three months ended December 31,						For the six months ended December 31,						For the three months ended December 31,						For the six months ended December 31,
	2017			2016			2017			2016			2018			2017			2018			2017
	(in millions)												(in millions)
Income from continuing operations	$	1,921		$	937		$	2,825		$	1,831		$	10,924		$	1,921		$	12,282		$	2,825
Less: Net income attributable to noncontrolling interests		(85	)		(80	)		(150	)		(147	)		(92	)		(85	)		(158	)		(150	)

Income from continuing operations attributable to Twenty-First Century Fox stockholders	$	1,836		$	857		$	2,675		$	1,684		$	10,832		$	1,836		$	12,124		$	2,675

The Company’s Board of Directors (the “Board”) previously authorized a stock repurchase program, under which the Company is authorized to acquire Class A Common Stock. In August 2016 and 2015, the Board authorized the repurchase of an additional $3 billion and $5 billion, respectively, of Class A Common Stock, excluding commissions. As of December 31, ~~2017,~~2018, the Company’s remaining buyback authorization was approximately $3.1 billion representing ~~approximately~~ $3 billion under the fiscal 2017 authorization and approximately $110 million under the fiscal 2016 authorization. Pursuant to the Amended and Restated Merger Agreement (See Note 2 – Acquisitions, Disposals and Other Transactions under the heading “Disney Transaction/Distribution of ~~New Fox”~~FOX”), the Company is ~~required to obtain Disney’s consent prior to~~prohibited from repurchasing any additional ~~shares.~~shares without Disney’s consent.

The Company did not repurchase any of its Class A Common Stock or Class B Common Stock during the six months ended December 31, ~~2017.~~2018.

The following table summarizes the dividends declared per share on both the Company’s Class A Common Stock and the Class B Common Stock:

Subsequent to December 31, ~~2017,~~2018, the Company declared a dividend of $0.18 per share on both the Class A Common Stock and Class B Common Stock, which is payable on April ~~18, 2018.~~16, 2019. The record date for determining dividend entitlements is ~~March 14, 2018.~~April 8, 2019 (the “Record Date”). The dividend is contingent on the Transaction not having occurred prior to the Record Date.

The following table summarizes the Company’s equity-based compensation activity:

	For the three months ended December 31,				For the six months ended December 31,				For the three months ended December 31,				For the six months ended December 31,
	2017		2016		2017		2016		2018		2017		2018		2017
	(in millions)								(in millions)
Equity-based compensation	$	39	$	20	$	66	$	62	$	107	$	39	$	157	$	66

Intrinsic value of all settled equity-based awards	$	-	$	-	$	74	$	69	$	139	$	-	$	368	$	74

The Company’s stock based awards are granted in Class A Common Stock. As of December 31, ~~2017,~~2018, the Company’s total estimated compensation cost related to equity-based awards, not yet recognized, was approximately ~~$200~~$280 million, and is expected to be recognized over a weighted average period between

one and two years. Compensation expense on all equity-based awards is generally recognized on a straight-line basis over the vesting period of the entire award.

~~The Company’s~~During the six months ended December 31, 2018, no performance stock ~~based awards are~~units (“PSUs”) were granted ~~in Class A Common Stock.~~ and approximately 6.5 million PSUs vested.

During the six months ended December 31, 2017, approximately 6.6 million ~~performance stock units (“PSUs”)~~PSUs were granted and approximately 2.6 million PSUs vested.

During the six months ended December 31, ~~2016,~~2018, approximately ~~7.3~~2.9 million ~~PSUs~~restricted stock units (“RSUs”) were granted and approximately ~~2.6~~1.4 million ~~PSUs~~RSUs vested.

The Company has commitments under certain firm contractual arrangements (“firm commitments”) to make future payments. These firm commitments secure the future rights to various assets and services to be used in the normal course of operations. The total firm commitments and future debt payments as of December 31, ~~2017~~2018 and June 30, ~~2017~~2018 were approximately ~~$81~~$85 billion and ~~$82~~$84 billion, respectively. The ~~decrease~~increase from June 30, ~~2017~~2018 was primarily due to ~~payments related to~~the new multi-year, multi-platform rights agreement expanding the Company’s television, digital and Spanish-language rights and extending its arrangement with Major League Baseball (“MLB”) through the 2028 MLB season partially offset by sports programming rights ~~partially offset by a new agreement for the Indian Premier League's (“IPL”) Global Media and Digital cricket broadcast rights for the five-year period from 2018 to 2022.~~

~~In January 2018, the Company expanded its arrangement with the National Football League to include broadcast rights for the next five seasons of Thursday Night Football beginning with the 2018 season.~~payments.

The Company’s contingent guarantees as of December 31, ~~2017 and June 30, 2017 were approximately $1.1 billion and $500 million, respectively. The increase~~2018 have not changed significantly from ~~June 30, 2017 was primarily due to a bank guarantee covering~~disclosures included in the ~~Company’s new IPL programming rights obligations.~~2018 Form 10-K.

The commitments and contingent guarantees above do not include obligations and commitments related to the ~~Disney~~ Transaction and ~~the~~ Sky Acquisition (See Note 2 – Acquisitions, Disposals and Other Transactions under the ~~headings~~heading “Disney Transaction/Distribution of ~~New Fox”~~FOX” and ~~“Sky Acquisition”~~Note 4 – Investments under the heading “Sky”).

The Company has guaranteed $113 million of Hulu’s $338 million five-year term loan due in August 2022 which is included in the contingent guarantees above. The fair value of this guarantee was calculated using Level 3 inputs and was included in the Consolidated Balance Sheets in Other liabilities.

In addition to the contingent guarantees mentioned above, the Company is party to capital funding agreements related to Hulu (See Note 4 – Investments under the heading “Hulu”).

The Company and certain of its current and former employees have been subject to allegations of sexual harassment and discrimination and racial discrimination relating to alleged misconduct at the Company’s ~~Fox~~FOX News ~~Channel~~ business. The Company has ~~settled some~~resolved many of these claims and is contesting other claims in litigation. The Company has also received regulatory and investigative inquiries relating to these matters. To date, none of the amounts paid in settlements or reserved for pending or future claims, is individually or in the aggregate, material to the Company. ~~Due to the early stage of these matters, the~~The amount of liability, if any, that may result from these or related matters cannot be estimated at this time. However, the Company does not currently anticipate that the ultimate resolution of any such pending matters will have a material adverse effect on its consolidated financial condition, future results of operations or liquidity.

~~On November 20, 2017, a stockholder of the Company filed a derivative action in the Court of Chancery of the State of Delaware captioned~~ ~~City of Monroe Employees’ Retirement System v. Rupert Murdoch, et al.~~, C.A. No. 2017-0833-AGB. The lawsuit named as defendants all directors of the Company and the Estate of Roger Ailes (the “Ailes Estate”), and named the Company as a nominal defendant. The plaintiff alleged that the directors of the Company and Rupert Murdoch as a purported controlling stockholder breached their fiduciary duties by, among other things, failing to properly oversee the work environment at Fox News. The plaintiff also brought claims of breach of fiduciary duty and unjust enrichment against the Ailes Estate.

On November 20, 2017, the parties reached an agreement to settle the lawsuit and filed a Stipulation and Agreement of Settlement, Compromise, and Release with the Court (the “Settlement Agreement”). Pursuant to the terms of the Settlement Agreement, the parties agreed that the director defendants and the Ailes Estate would cause their insurers to make a payment in the amount of $90 million to the Company, less any attorneys’ fees and expenses awarded by the Court to the plaintiff’s counsel. In addition to the payment to the Company, the Settlement Agreement provides that the Company shall put in place governance and compliance enhancements, including the creation of the Fox News Workplace Professionalism and Inclusion Council, as set forth in the Non-Monetary Relief agreement agreed to by the parties. These governance and compliance enhancements shall remain in effect for five years. On November 28, 2017, the Court issued a Scheduling Order which, among other things, set the settlement hearing for February 9, 2018, and approved the forms of the notices to stockholders, which were disseminated in accordance with the Scheduling Order.

In connection with the News Corp Separation (as defined in Note 4 – Discontinued Operations in the ~~2017~~2018 Form 10-K under the heading “Separation of News Corp”), the Company and News Corporation (“News Corp”) agreed in the News Corp Separation and Distribution Agreement that the Company will indemnify News Corp, on an after-tax basis, for payments made after the News Corp Separation arising out of civil claims and investigations relating to phone hacking, illegal data access and inappropriate payments to public officials that occurred at subsidiaries of News Corp, as well as legal and professional fees and expenses paid in connection with the related criminal matters, other than fees, expenses and costs relating to employees who are not (i) directors, officers or certain designated employees or (ii) with respect to civil matters, co-defendants with News Corp (the “Indemnity”). The liability related to the Indemnity, recorded in the Consolidated Balance Sheets, was approximately ~~$50~~$45 million and ~~$80~~$50 million as of December 31, ~~2017~~2018 and June 30, ~~2017,~~2018, respectively.

Equity purchase arrangements that are exercisable by the ~~counter-party~~counterparty to the agreement, and that are outside the sole control of the Company, are accounted for in accordance with ASC 480-10-S99-3A and are classified as Redeemable noncontrolling interests in the Consolidated Balance Sheets. Other than the arrangements classified as Redeemable noncontrolling interests, the Company is also a party to several other purchase and sale arrangements which become exercisable at various points in time. However, these arrangements are currently either not exercisable in the next twelve months or are not material.

The Company establishes an accrued liability for legal claims when the Company determines that a loss is both probable and the amount of the loss can be reasonably estimated. Once established, accruals are adjusted from time to time, as appropriate, in light of additional information. The amount of any loss ultimately incurred in relation to matters for which an accrual has been established may be higher or lower than the amounts accrued for such matters. Any fees, expenses, fines, penalties, judgments or settlements which might be incurred by the Company in connection with the various proceedings could affect the Company’s results of operations and financial condition. For the contingencies disclosed above for which there is at least a reasonable possibility that a loss may be incurred, other than the accrual provided, the Company was unable to estimate the amount of loss or range of loss.

The Company’s operations are subject to tax in various domestic and international jurisdictions and as a matter of course, the Company is regularly audited by federal, state and foreign tax authorities. The Company believes it has appropriately accrued for the expected outcome of all pending tax matters and does not currently anticipate that the ultimate resolution of pending tax matters will have a material adverse effect on its consolidated financial condition, future results of operations or liquidity.

The Company is a diversified global media and entertainment company, which manages and reports its businesses in the following four segments:

The Company’s operating segments have been determined in accordance with the Company’s internal management structure, which is organized based on operating activities. The Company evaluates performance based upon several factors, of which the primary financial measure is Segment OIBDA. Due to the integrated nature of these operating segments, estimates and judgments are made in allocating certain assets, revenues and expenses.

Segment OIBDA is defined as Revenues less Operating expenses and Selling, general and administrative expenses. Segment OIBDA does not include: Amortization of cable distribution investments, Depreciation and amortization, Impairment and restructuring charges, Equity (losses) earnings of affiliates, Interest expense, net, Interest income, Other, net, Income tax (expense) benefit, ~~(expense),~~ (Loss) income from discontinued operations, net of tax and Net income attributable to noncontrolling interests. Management believes that Segment OIBDA 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.

Management believes that information about Total Segment OIBDA assists all users of the Company’s Unaudited Consolidated Financial Statements by allowing them to evaluate changes in the operating results of the Company’s portfolio of businesses separate from non-operational factors that affect net income, thus providing insight into both operations and the other factors that affect reported results. Total Segment OIBDA 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 Segment OIBDA and Total Segment OIBDA, may not be indicative of future results (as operating performance is highly contingent on many factors, including customer tastes and preferences).

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 and excludes items, such as depreciation and amortization and impairment charges, which are significant components in assessing the Company’s financial performance.

The following table reconciles Income from continuing operations before income tax (expense) benefit ~~(expense)~~ to Total Segment OIBDA for the three and six months ended December 31, ~~2017~~2018 and ~~2016:~~2017:

	For the three months ended December 31,						For the six months ended December 31,						For the three months ended December 31,						For the six months ended December 31,
	2017			2016			2017			2016			2018			2017			2018			2017
	(in millions)												(in millions)
Income from continuing operations before income tax benefit (expense)	$	703		$	1,385		$	1,998		$	2,622
Income from continuing operations before income tax (expense) benefit													$	11,554		$	703		$	13,038		$	1,998
Add
Amortization of cable distribution investments		25			16			43			31			10			25			20			43
Depreciation and amortization		142			135			284			270			159			142			317			284
Impairment and restructuring charges		3			39			24			176			-			3			16			24
Equity losses (earnings) of affiliates		33			41			(27	)		6			109			33			74			(27	)
Interest expense, net		312			299			625			599			294			312			594			625
Interest income		(9	)		(9	)		(19	)		(18	)		(86	)		(9	)		(94	)		(19	)
Other, net		229			88			301			99			(10,475	)		229			(10,527	)		301

Total Segment OIBDA	$	1,438		$	1,994		$	3,229		$	3,785		$	1,565		$	1,438		$	3,438		$	3,229

The following tables set forth the Company’s Revenues and Segment OIBDA for the three and six months ended December 31, ~~2017~~2018 and ~~2016:~~2017:

	For the three months ended December 31,						For the six months ended December 31,						For the three months ended December 31,						For the six months ended December 31,
	2017			2016			2017			2016			2018			2017			2018			2017
	(in millions)												(in millions)
Revenues
Cable Network Programming	$	4,405		$	3,967		$	8,601		$	7,777		$	4,562		$	4,405		$	8,909		$	8,601
Television		1,806			1,918			2,871			2,956			2,148			1,806			3,424			2,871
Filmed Entertainment		2,246			2,269			4,209			4,176			2,159			2,246			3,975			4,209
Other, Corporate and Eliminations		(420	)		(472	)		(642	)		(721	)		(370	)		(420	)		(632	)		(642	)

Total revenues	$	8,037		$	7,682		$	15,039		$	14,188		$	8,499		$	8,037		$	15,676		$	15,039
Segment OIBDA
Cable Network Programming	$	1,365		$	1,330		$	2,876		$	2,714		$	1,454		$	1,365		$	2,991		$	2,876
Television		56			376			178			567			(22	)		56			146			178
Filmed Entertainment		131			389			387			700			193			131			470			387
Other, Corporate and Eliminations		(114	)		(101	)		(212	)		(196	)		(60	)		(114	)		(169	)		(212	)

Total Segment OIBDA	$	1,438		$	1,994		$	3,229		$	3,785		$	1,565		$	1,438		$	3,438		$	3,229

Intersegment revenues, generated by the Filmed Entertainment segment, of ~~$418~~$360 million and ~~$445~~$418 million for the three months ended December 31, ~~2017~~2018 and ~~2016,~~2017, respectively, and of ~~$613~~$605 million and ~~$678~~$613 million for the six months ended December 31, 2018 and 2017, respectively, have been eliminated within the Other, Corporate and ~~2016,~~Eliminations segment. The balance of intersegment revenues is primarily related to the Cable Network Programming segment. Segment OIBDA, generated by the Filmed Entertainment segment, of approximately $(50) million and $20 million for the three months ended December 31, 2018 and 2017, respectively, and of approximately $(20) million and $45 million for the six months ended December 31, 2018 and 2017, respectively, have been eliminated within the Other, Corporate and Eliminations segment.

Depreciation and amortization includes the amortization of definite lived intangible assets of $65 million ~~and $64 million~~for the three months ended December 31, 2018 and 2017 and ~~2016, respectively,~~$129 million and $130 million for thethe six months ended December 31, 2018 and 2017, ~~and 2016.~~respectively.

	As of December 31, 2017		As of June 30, 2017		As of December 31, 2018		As of June 30, 2018
	(in millions)				(in millions)
Assets
Cable Network Programming	$	25,282	$	24,913	$	25,515	$	25,756
Television		7,354		6,775		7,612		6,779
Filmed Entertainment		11,485		10,312		11,866		10,646
Other, Corporate and Eliminations		4,373		4,822		20,060		6,538
Investments		4,364		3,902		833		4,112

Total assets	$	52,858	$	50,724	$	65,886	$	53,831

Revenue is recognized when control of the promised goods or services is transferred to the Company’s customers in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. The Company considers the terms of each arrangement to determine the appropriate accounting treatment.

The Company generates affiliate fee revenue from affiliate agreements with MVPDs for cable network programming and for the broadcast of the Company’s owned and operated television stations. In addition, the Company generates affiliate fee revenue from affiliate agreements with independently-owned television stations that are affiliated with the FOX Network and receive retransmission consent fees from MVPDs for their signals. Affiliate fee revenue is recognized at a point in time when the network programming, a functional license of intellectual property, is made available to the customer which is done on a continuous basis. For contracts with affiliate fees based on the number of the affiliate’s subscribers, revenues are recognized based on the contractual rate multiplied by the estimated number of subscribers

each period. For contracts with fixed affiliate fees, revenues are recognized based on the relative standalone selling price of the network programming provided over the contract term, which generally reflects the invoiced amount. Affiliate contracts are generally multi-year contracts with payments due monthly.

The Company classifies the amortization of cable distribution investments (capitalized fees paid to MVPDs to facilitate carriage of a cable network) against affiliate fee revenue in accordance with ASC 606-10-32-25 through 27, “Revenue Recognition—Consideration Payable to a Customer.” The Company defers the cable distribution investments and amortizes the amounts on a straight-line basis over the contract period.

The Company generates advertising revenue from sales of commercial time within the Company’s network programming to be aired by television networks and cable channels, and from sales of broadcast advertising time on the Company’s owned television stations and various digital properties. Advertising revenue from customers, primarily advertising agencies, is recognized as the commercials are aired. Certain of the Company’s advertising contracts have guarantees of a certain number of targeted audience views, referred to as impressions. Revenues for any audience deficiencies are deferred until the guaranteed number of impressions is met, by providing additional advertisements. Advertising contracts, which are generally short-term, are billed monthly for the spots aired during the month, with payments due shortly after the invoice date.

The Company’s Filmed Entertainment segment generates revenue from the licensing of motion pictures and television content produced or acquired for distribution by the Company. In general, motion pictures are exhibited in U.S. and foreign theaters, followed by home entertainment, including sales and rentals of DVDs and Blu-rays, licensing through digital distribution platforms, premium subscription television, network television and basic cable and syndicated television exploitation. Television series initially produced for the networks and first-run syndication are generally licensed to domestic and international markets, concurrently and subsequently made available via digital distribution platforms and released in seasonal DVDs and Blu-ray box sets.

Content revenues from the licensing of motion pictures and television series are recognized when the content is made available to the licensee for exhibition at the beginning of the license period. If an existing licensing agreement is renewed or extended, the Company recognizes revenue at the later of when the content is available or when the renewal or extension period commences. For contracts that include variable fees in the form of sales-based or usage-based royalties, revenue is recognized when the underlying sales or usage occurs. Payment terms and duration of content licensing contracts vary by contract, typically with payments due over the license term. Revenues from the theatrical distribution of motion pictures are recognized as the licensee exhibits or exploits them. Revenues from home entertainment sales, net of a reserve for estimated returns, are recognized on the date that DVD and Blu-ray units are made widely available for sale by retailers or when made available for viewing via digital distribution platforms and all Company-imposed restrictions on the sale or availability have expired. Revenues from digital distribution platforms are generally recognized when the underlying sales occur.

License agreements for the broadcast of motion pictures and television series in the broadcast network, syndicated television and cable television markets are routinely entered in advance of their availability date for broadcast. Cash received and amounts billed in connection with such contractual rights, for which revenue is not yet recognizable, are classified as deferred revenue. Because deferred revenue generally relates to contracts for the licensing of motion pictures and television series which have already been produced, the recognition of revenue for such completed product is principally dependent upon the commencement of the availability period for broadcast under the terms of the related licensing agreement.

The Company earns and recognizes revenues as a distributor on behalf of third parties. In such cases, determining whether revenue should be reported on a gross or net basis is based on management’s assessment of whether the Company obtains control of the content before licensing it to the customer. To the extent the Company obtains control and thereby acts as the principal in a transaction, revenues are reported on a gross basis. Determining whether the Company acts as principal or agent in a transaction involves judgment and is based on an evaluation of whether the Company has the ability to direct the use of and obtain substantially all of the remaining benefits from the third-party content.

The following table sets forth the Company’s Revenues by Segment by Component for the three and six months ended December 31, 2018 and 2017:

	For the three months ended December 31,				For the six months ended December 31,				For the three months ended December 31,						For the six months ended December 31,
	2017		2016		2017		2016		2018			2017			2018			2017
	(in millions)								(in millions)
Revenues
Cable Network Programming
Affiliate fee	$	3,252	$	2,906	$	6,488	$	5,829	$	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		2,496		2,544		4,119		4,135		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		2,140		2,032		4,159		3,901		2,059			2,168			3,784			4,059
Other		149		200		273		323
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	$	8,037	$	7,682	$	15,039	$	14,188	$	8,499		$	8,037		$	15,676		$	15,039

As of December 31, 2018, approximately $7 billion of revenues are expected to be recognized primarily over the next three years. The Company’s most significant remaining performance obligations relate to affiliate contracts and sports rights sublicensing contracts with fixed fees. The amount disclosed does not include (i) revenues related to performance obligations that are part of a contract that have an original expected duration of one year or less, (ii) revenues related to performance obligations for which the Company recognizes revenues in the amount it has a right to invoice, (iii) revenues that are in the form of sales-based or usage-based royalties promised in exchange for licenses of intellectual property and (iv) revenues that have variable consideration which is allocated entirely to an unsatisfied performance obligation or an unsatisfied promise to transfer a distinct good or service that forms part of a single performance obligation.

Deferred revenue consists of cash payments received or due in advance of the Company’s performance primarily under license agreements for the broadcast of motion pictures and television series as well as advertising agreements where revenues have been deferred due to audience deficiency.

The following table sets forth the Deferred revenue balances as of December 31, 2018 and July 1, 2018:

Impairment and restructuring charges were $3 million and $39 million for the three months ended December 31, 2017 and 2016, respectively, and $24 million and $176 million for the six months ended December 31, 2017 and 2016, respectively. The impairment and restructuring charges for the three and six months ended December 31, 2016 were primarily comprised of costs in connection with management and employee transitions and restructuring at several of the Company’s business units.

The following table sets forth the components of Other, net included in the Unaudited Consolidated Statements of Operations:

~~Receivables are presented net of an allowance for returns and doubtful accounts, which is an estimate of amounts that may not be~~ ~~collectible. Allowances for returns and doubtful accounts as of December 31, 2017 and June 30, 2017 were $515 million and $537 million, respectively.~~

	For the six months ended December 31,						For the six months ended December 31,
	2017			2016			2018			2017
	(in millions)						(in millions)
Supplemental cash flows information
Cash paid for income taxes	$	(663	)	$	(460	)	$	(390	)	$	(663	)

Cash paid for interest	$	(596	)	$	(597	)	$	(623	)	$	(596	)

The Parent Guarantor presently guarantees the senior public indebtedness of 21CFA and the guarantee is full and unconditional. The supplemental condensed consolidating financial information of the Parent Guarantor should be read in conjunction with these Unaudited Consolidated Financial Statements.

In accordance with rules and regulations of the SEC, the Company uses the equity method to account for the results of all of the non-guarantor subsidiaries, representing substantially all of the Company’s consolidated results of operations, excluding certain intercompany eliminations.

The following condensed consolidating financial statements present the results of operations, financial position and cash flows of 21CFA, the Company and the subsidiaries of the Company and the eliminations and reclassifications necessary to arrive at the information for the Company on a consolidated basis.

	21st Century Fox America, Inc.			Twenty-First Century Fox			Non-Guarantor			Reclassifications and Eliminations			Twenty-First Century Fox and Subsidiaries
Revenues	$	-		$	-		$	8,499		$	-		$	8,499
Expenses		(103	)		-			(7,000	)		-			(7,103	)
Equity losses of affiliates		-			-			(109	)		-			(109	)
Interest expense, net		(483	)		(209	)		(22	)		420			(294	)
Interest income		82			2			422			(420	)		86
Earnings from subsidiary entities		12,108			11,294			-			(23,402	)		-
Other, net		(150	)		(255	)		10,880			-			10,475

Income from continuing operations before income tax expense		11,454			10,832			12,670			(23,402	)		11,554
Income tax expense		(628	)		-			(678	)		676			(630	)

Income from continuing operations		10,826			10,832			11,992			(22,726	)		10,924
Loss from discontinued operations, net of tax		-			(17	)		-			-			(17	)

Net income		10,826			10,815			11,992			(22,726	)		10,907
Less: Net income attributable to noncontrolling interests		-			-			(92	)		-			(92	)

Net income attributable to Twenty-First Century Fox stockholders	$	10,826		$	10,815		$	11,900		$	(22,726	)	$	10,815

Comprehensive income attributable to Twenty-First Century Fox stockholders	$	11,209		$	11,290		$	12,318		$	(23,527	)	$	11,290

	21st Century Fox America, Inc.			Twenty-First Century Fox			Non-Guarantor			Reclassifications and Eliminations			Twenty-First Century Fox and Subsidiaries
Revenues	$	-		$	-		$	8,037		$	-		$	8,037
Expenses		(100	)		-			(6,669	)		-			(6,769	)
Equity losses of affiliates		-			-			(33	)		-			(33	)
Interest expense, net		(436	)		(205	)		(20	)		349			(312	)
Interest income		-			5			353			(349	)		9
Earnings from subsidiary entities		3,193			2,036			-			(5,229	)		-
Other, net		(206	)		-			(23	)		-			(229	)

Income from continuing operations before income tax benefit		2,451			1,836			1,645			(5,229	)		703
Income tax benefit		1,783			-			2,123			(2,688	)		1,218

Income from continuing operations		4,234			1,836			3,768			(7,917	)		1,921
Loss from discontinued operations, net of tax		-			(5	)		-			-			(5	)

Net income		4,234			1,831			3,768			(7,917	)		1,916
Less: Net income attributable to noncontrolling interests		-			-			(85	)		-			(85	)

Net income attributable to Twenty-First Century Fox stockholders	$	4,234		$	1,831		$	3,683		$	(7,917	)	$	1,831

Comprehensive income attributable to Twenty-First Century Fox stockholders	$	4,278		$	2,058		$	3,743		$	(8,021	)	$	2,058

	21st Century Fox America, Inc.			Twenty-First Century Fox			Non-Guarantor			Reclassifications and Eliminations			Twenty-First Century Fox and Subsidiaries			21st Century Fox America, Inc.			Twenty-First Century Fox			Non-Guarantor			Reclassifications and Eliminations			Twenty-First Century Fox and Subsidiaries
Revenues	$	-		$	-		$	7,682		$	-		$	7,682		$	-		$	-		$	15,676		$	-		$	15,676
Expenses		(96	)		-			(5,782	)		-			(5,878	)		(194	)		-			(12,397	)		-			(12,591	)
Equity losses of affiliates		-			-			(41	)		-			(41	)		-			-			(74	)		-			(74	)
Interest expense, net		(411	)		(189	)		(20	)		321			(299	)		(930	)		(411	)		(45	)		792			(594	)
Interest income		1			1			328			(321	)		9			82			5			799			(792	)		94
Earnings from subsidiary entities		1,860			1,045			-			(2,905	)		-			14,097			12,602			-			(26,699	)		-
Other, net		(65	)		-			(23	)		-			(88	)		(232	)		(72	)		10,831			-			10,527

Income from continuing operations before income tax expense		1,289			857			2,144			(2,905	)		1,385			12,823			12,124			14,790			(26,699	)		13,038
Income tax expense		(414	)		-			(696	)		662			(448	)		(744	)		-			(858	)		846			(756	)

Income from continuing operations		875			857			1,448			(2,243	)		937			12,079			12,124			13,932			(25,853	)		12,282
Loss from discontinued operations, net of tax		-			(1	)		-			-			(1	)		-			(24	)		-			-			(24	)

Net income		875			856			1,448			(2,243	)		936			12,079			12,100			13,932			(25,853	)		12,258
Less: Net income attributable to noncontrolling interests		-			-			(80	)		-			(80	)		-			-			(158	)		-			(158	)

Net income attributable to Twenty-First Century Fox stockholders	$	875		$	856		$	1,368		$	(2,243	)	$	856		$	12,079		$	12,100		$	13,774		$	(25,853	)	$	12,100

Comprehensive income attributable to Twenty-First Century Fox stockholders	$	576		$	659		$	1,073		$	(1,649	)	$	659		$	12,251		$	12,419		$	14,008		$	(26,259	)	$	12,419

	21st Century Fox America, Inc.			Twenty-First Century Fox			Non-Guarantor			Reclassifications and Eliminations			Twenty-First Century Fox and Subsidiaries			21st Century Fox America, Inc.			Twenty-First Century Fox			Non-Guarantor			Reclassifications and Eliminations			Twenty-First Century Fox and Subsidiaries
Revenues	$	-		$	-		$	15,039		$	-		$	15,039		$	-		$	-		$	15,039		$	-		$	15,039
Expenses		(176	)		-			(11,985	)		-			(12,161	)		(176	)		-			(11,985	)		-			(12,161	)
Equity earnings of affiliates		-			-			27			-			27			-			-			27			-			27
Interest expense, net		(866	)		(410	)		(42	)		693			(625	)		(866	)		(410	)		(42	)		693			(625	)
Interest income		-			10			702			(693	)		19			-			10			702			(693	)		19
Earnings from subsidiary entities		4,784			3,075			-			(7,859	)		-			4,784			3,075			-			(7,859	)		-
Other, net		(219	)		-			(82	)		-			(301	)		(219	)		-			(82	)		-			(301	)
																													-
Income from continuing operations before income tax benefit		3,523			2,675			3,659			(7,859	)		1,998			3,523			2,675			3,659			(7,859	)		1,998
Income tax benefit		1,459			-			1,515			(2,147	)		827			1,459			-			1,515			(2,147	)		827
																													-
Income from continuing operations		4,982			2,675			5,174			(10,006	)		2,825			4,982			2,675			5,174			(10,006	)		2,825
Income from discontinued operations, net of tax		-			11			-			-			11			-			11			-			-			11
																													-
Net income		4,982			2,686			5,174			(10,006	)		2,836			4,982			2,686			5,174			(10,006	)		2,836
Less: Net income attributable to noncontrolling interests		-			-			(150	)		-			(150	)		-			-			(150	)		-			(150	)
																													-
Net income attributable to Twenty-First Century Fox stockholders	$	4,982		$	2,686		$	5,024		$	(10,006	)	$	2,686		$	4,982		$	2,686		$	5,024		$	(10,006	)	$	2,686
																												$	-
Comprehensive income attributable to Twenty-First Century Fox stockholders	$	5,000		$	3,055		$	5,161		$	(10,161	)	$	3,055		$	5,000		$	3,055		$	5,161		$	(10,161	)	$	3,055

	21st Century Fox America, Inc.		Twenty-First Century Fox		Non-Guarantor			Reclassifications and Eliminations			Twenty-First Century Fox and Subsidiaries
ASSETS
Current assets
Cash and cash equivalents	$	18,411	$	1,575	$	1,295		$	-		$	21,281
Receivables, net		11		2		8,073			(3	)		8,083
Inventories, net		-		-		3,934			-			3,934
Other		48		-		671			-			719
						-
Total current assets		18,470		1,577		13,973			(3	)		34,017

Non-current assets
Receivables, net		13		-		846			-			859
Inventories, net		-		-		8,133			-			8,133
Property, plant and equipment, net		345		-		1,626			-			1,971
Intangible assets, net		-		-		5,970			-			5,970
Goodwill		-		-		12,758			-			12,758
Other non-current assets		262		-		1,083			-			1,345
Investments
Investments in associated companies and other investments		263		186		384			-			833
Intragroup investments		127,850		78,002		-			(205,852	)		-
									-
Total investments		128,113		78,188		384			(205,852	)		833

Total assets	$	147,203	$	79,765	$	44,773		$	(205,855	)	$	65,886

LIABILITIES AND EQUITY
Current liabilities
Borrowings	$	700	$	-	$	187		$	-		$	887
Other current liabilities		408		41		6,602			(3	)		7,048

Total current liabilities		1,108		41		6,789			(3	)		7,935

Non-current liabilities
Borrowings		17,286		-		1,035			-			18,321
Other non-current liabilities		482		-		5,337			-			5,819
Intercompany		63,100		47,719		(110,819	)		-			-
Redeemable noncontrolling interests		-		-		576			-			576
Total equity		65,227		32,005		141,855			(205,852	)		33,235

Total liabilities and equity	$	147,203	$	79,765	$	44,773		$	(205,855	)	$	65,886

	21st Century Fox America, Inc.		Twenty-First Century Fox		Non-Guarantor			Reclassifications and Eliminations			Twenty-First Century Fox and Subsidiaries
ASSETS
Current assets
Cash and cash equivalents	$	2,882	$	3,323	$	1,417		$	-		$	7,622
Receivables, net		11		-		7,110			(1	)		7,120
Inventories, net		-		-		3,669			-			3,669
Other		45		-		877			-			922

Total current assets		2,938		3,323		13,073			(1	)		19,333

Non-current assets
Receivables, net		13		-		711			-			724
Inventories, net		-		-		7,518			-			7,518
Property, plant and equipment, net		343		-		1,613			-			1,956
Intangible assets, net		-		-		6,101			-			6,101
Goodwill		-		-		12,768			-			12,768
Other non-current assets		271		-		1,048			-			1,319
Investments
Investments in associated companies and other investments		178		257		3,677			-			4,112
Intragroup investments		113,781		65,022		-			(178,803	)		-

Total investments		113,959		65,279		3,677			(178,803	)		4,112

Total assets	$	117,524	$	68,602	$	46,509		$	(178,804	)	$	53,831

LIABILITIES AND EQUITY
Current liabilities
Borrowings	$	950	$	-	$	104		$	-		$	1,054
Other current liabilities		528		31		6,632			(1	)		7,190

Total current liabilities		1,478		31		6,736			(1	)		8,244

Non-current liabilities
Borrowings		17,280		-		1,189			-			18,469
Other non-current liabilities		502		89		4,965			-			5,556
Intercompany		45,817		48,918		(94,735	)		-			-
Redeemable noncontrolling interests		-		-		764			-			764
Total equity		52,447		19,564		127,590			(178,803	)		20,798

Total liabilities and equity	$	117,524	$	68,602	$	46,509		$	(178,804	)	$	53,831

21st Century
Fox America, Inc.

Twenty-First
Century Fox

Non-Guarantor

Reclassifications
and
Eliminations

Twenty-First
Century Fox
and
Subsidiaries

Revenues

$
-

$
-

$
14,188

$
-

$
14,188

Expenses

(238
)

-

(10,642
)

-

(10,880
)
Equity losses of affiliates

(1
)

-

(5
)

-

(6
)
Interest expense, net

(823
)

(377
)

(39
)

640

(599
)
Interest income

2

1

655

(640
)

18

Earnings from subsidiary entities

3,475

2,060

-

(5,535
)

-

Other, net

(86
)

-

(13
)

-

(99
)

Income from continuing operations before income tax expense

2,329

1,684

4,144

(5,535
)

2,622

Income tax expense

(702
)

-

(1,250
)

1,161

(791
)

Income from continuing operations

1,627

1,684

2,894

(4,374
)

1,831

Loss from discontinued operations, net of tax

-

(7
)

-

-

(7
)

Net income

1,627

1,677

2,894

(4,374
)

1,824

Less: Net income attributable to noncontrolling interests

-

-

(147
)

-

(147
)

Net income attributable to Twenty-First Century Fox stockholders

$
1,627

$
1,677

$
2,747

$
(4,374
)

$
1,677

Comprehensive income attributable to Twenty-First Century Fox stockholders

$
1,244

$
1,439

$
2,433

$
(3,677
)

$
1,439

	21st Century Fox America, Inc.			Twenty-First Century Fox			Non-Guarantor			Reclassifications and Eliminations		Twenty-First Century Fox and Subsidiaries
OPERATING ACTIVITIES
Net cash provided by (used in) operating activities from continuing operations	$	16,139		$	(1,414	)	$	(14,168	)	$	-	$	557

INVESTING ACTIVITIES
Property, plant and equipment		(25	)		-			(194	)		-		(219	)
Proceeds from dispositions, net		(130	)		-			15,150			-		15,020
Other investing activities, net		(129	)		-			(343	)		-		(472	)

Net cash (used in) provided by investing activities from continuing operations		(284	)		-			14,613			-		14,329

FINANCING ACTIVITIES
Borrowings		-			-			90			-		90
Repayment of borrowings		(250	)		-			(162	)		-		(412	)
Dividends paid and distributions		-			(334	)		(183	)		-		(517	)
Employee taxes paid for share-based payment arrangements		(44	)		-			(118	)		-		(162	)
Other financing activities, net		-			-			(89	)		-		(89	)

Net cash used in financing activities from continuing operations		(294	)		(334	)		(462	)		-		(1,090	)

Discontinued operations
Net decrease in cash and cash equivalents from discontinued operations		(32	)		-			-			-		(32	)

Net increase (decrease) in cash and cash equivalents		15,529			(1,748	)		(17	)		-		13,764
Cash and cash equivalents, beginning of year		2,882			3,323			1,417			-		7,622
Exchange movement on cash balances		-			-			(105	)		-		(105	)

Cash and cash equivalents, end of period	$	18,411		$	1,575		$	1,295		$	-	$	21,281

	21st Century Fox America, Inc.			Twenty-First Century Fox			Non-Guarantor			Reclassifications and Eliminations		Twenty-First Century Fox and Subsidiaries
OPERATING ACTIVITIES
Net cash provided by (used in) operating activities from continuing operations	$	177		$	(455	)	$	782		$	-	$	504

INVESTING ACTIVITIES
Property, plant and equipment		(90	)		-			(148	)		-		(238	)
Proceeds from dispositions, net		-			-			362			-		362
Other investing activities, net		(59	)		-			(234	)		-		(293	)

Net cash used in investing activities from continuing operations		(149	)		-			(20	)		-		(169	)

FINANCING ACTIVITIES
Borrowings		-			-			1,282			-		1,282
Repayment of borrowings		-			-			(1,411	)		-		(1,411	)
Dividends paid and distributions		-			(333	)		(179	)		-		(512	)
Employee taxes paid for share-based payment arrangements		(11	)		-			(21	)		-		(32	)
Other financing activities, net		(18	)		-			-			-		(18	)

Net cash used in financing activities from continuing operations		(29	)		(333	)		(329	)		-		(691	)

Discontinued operations
Net decrease in cash and cash equivalents from discontinued operations		(26	)		-			-			-		(26	)

Net (decrease) increase in cash and cash equivalents		(27	)		(788	)		433			-		(382	)
Cash and cash equivalents, beginning of year		40			4,882			1,241			-		6,163
Exchange movement on cash balances		-			-			28			-		28

Cash and cash equivalents, end of period	$	13		$	4,094		$	1,702		$	-	$	5,809

21st Century
Fox America, Inc.

Twenty-First
Century Fox

Non-Guarantor

Reclassifications
and
Eliminations

Twenty-First
Century Fox
and
Subsidiaries

ASSETS

Current assets

Cash and cash equivalents

$
13

$
4,094

$
1,702

$
-

$
5,809

Receivables, net

26

-

7,529

(1
)

7,554

Inventories, net

-

-

3,132

-

3,132

Other

83

-

824

-

907

Total current assets

122

4,094

13,187

(1
)

17,402

Non-current assets

Receivables, net

14

-

718

-

732

Inventories, net

-

-

8,034

-

8,034

Property, plant and equipment, net

374

-

1,466

-

1,840

Intangible assets, net

-

-

6,228

-

6,228

Goodwill

-

-

12,789

-

12,789

Other non-current assets

280

-

1,189

-

1,469

Investments

Investments in associated companies and other investments

199

312

3,853

-

4,364

Intragroup investments

110,311

63,092

-

(173,403
)

-

Total investments

110,510

63,404

3,853

(173,403
)

4,364

Total assets

$
111,300

$
67,498

$
47,464

$
(173,404
)

$
52,858

LIABILITIES AND EQUITY

Current liabilities

Borrowings

$
600

$
-

$
31

$
-

$
631

Other current liabilities

749

45

6,631

(1
)

7,424

Total current liabilities

1,349

45

6,662

(1
)

8,055

Non-current liabilities

Borrowings

17,973

-

1,190

-

19,163

Other non-current liabilities

483

101

4,713

-

5,297

Intercompany

41,354

48,963

(90,317
)

-

-

Redeemable noncontrolling interests

-

-

712

-

712

Total equity

50,141

18,389

124,504

(173,403
)

19,631

Total liabilities and equity

$
111,300

$
67,498

$
47,464

$
(173,404
)

$
52,858

21st Century
Fox America, Inc.

Twenty-First
Century Fox

Non-Guarantor

Reclassifications
and
Eliminations

Twenty-First
Century Fox
and
Subsidiaries

ASSETS

Current assets

Cash and cash equivalents

$
40

$
4,882

$
1,241

$
-

$
6,163

Receivables, net

6

-

6,472

(1
)

6,477

Inventories, net

-

-

3,101

-

3,101

Other

49

-

496

-

545

Total current assets

95

4,882

11,310

(1
)

16,286

Non-current assets

Receivables, net

13

-

530

-

543

Inventories, net

-

-

7,452

-

7,452

Property, plant and equipment, net

297

-

1,484

-

1,781

Intangible assets, net

-

-

6,574

-

6,574

Goodwill

-

-

12,792

-

12,792

Other non-current assets

261

-

1,133

-

1,394

Investments

Investments in associated companies and other investments

179

37

3,686

-

3,902

Intragroup investments

105,516

59,926

-

(165,442
)

-

Total investments

105,695

59,963

3,686

(165,442
)

3,902

Total assets

$
106,361

$
64,845

$
44,961

$
(165,443
)

$
50,724

LIABILITIES AND EQUITY

Current liabilities

Borrowings

$
350

$
-

$
107

$
-

$
457

Other current liabilities

643

72

6,067

(1
)

6,781

Total current liabilities

993

72

6,174

(1
)

7,238

Non-current liabilities

Borrowings

18,217

-

1,239

-

19,456

Other non-current liabilities

522

-

5,876

-

6,398

Intercompany

39,629

49,051

(88,680
)

-

-

Redeemable noncontrolling interests

-

-

694

-

694

Total equity

47,000

15,722

119,658

(165,442
)

16,938

Total liabilities and equity

$
106,361

$
64,845

$
44,961

$
(165,443
)

$
50,724

21st Century
Fox America, Inc.

Twenty-First
Century Fox

Non-Guarantor

Reclassifications
and
Eliminations

Twenty-First
Century Fox
and
Subsidiaries

OPERATING ACTIVITIES

Net cash provided by (used in) operating activities from continuing operations

$
177

$
(455
)

$
782

$
-

$
504

INVESTING ACTIVITIES

Property, plant and equipment

(90
)

-

(148
)

-

(238
)
Investments

(59
)

-

128

-

69

Net cash used in investing activities from continuing operations

(149
)

-

(20
)

-

(169
)

FINANCING ACTIVITIES

Borrowings

-

-

1,282

-

1,282

Repayment of borrowings

-

-

(1,411
)

-

(1,411
)
Dividends paid and distributions

-

(333
)

(179
)

-

(512
)
Other financing activities, net

(29
)

-

(21
)

-

(50
)

Net cash used in financing activities from continuing operations

(29
)

(333
)

(329
)

-

(691
)

Discontinued operations

Net decrease in cash and cash equivalents from discontinued operations

(26
)

-

-

-

(26
)

Net (decrease) increase in cash and cash equivalents

(27
)

(788
)

433

-

(382
)
Cash and cash equivalents, beginning of year

40

4,882

1,241

-

6,163

Exchange movement on cash balances

-

-

28

-

28

Cash and cash equivalents, end of period

$
13

$
4,094

$
1,702

$
-

$
5,809

21st Century
Fox America, Inc.

Twenty-First
Century Fox

Non-Guarantor

Reclassifications
and
Eliminations

Twenty-First
Century Fox
and
Subsidiaries

OPERATING ACTIVITIES

Net cash (used in) provided by operating activities from continuing operations

$
(957
)

$
1,532

$
657

$
-

$
1,232

INVESTING ACTIVITIES

Property, plant and equipment

(9
)

-

(108
)

-

(117
)
Investments

(85
)

-

(48
)

-

(133
)

Net cash used in investing activities from continuing operations

(94
)

-

(156
)

-

(250
)

FINANCING ACTIVITIES

Borrowings

842

-

37

-

879

Repayment of borrowings

(400
)

-

(146
)

-

(546
)
Repurchase of shares

-

(619
)

-

-

(619
)
Dividends paid and distributions

-

(335
)

(146
)

-

(481
)
Other financing activities, net

(34
)

-

(19
)

-

(53
)

Net cash provided by (used in) financing activities from continuing operations

408

(954
)

(274
)

-

(820
)

Discontinued operations

Net decrease in cash and cash equivalents from discontinued operations

(15
)

-

-

-

(15
)

Net (decrease) increase in cash and cash equivalents

(658
)

578

227

-

147

Cash and cash equivalents, beginning of year

661

2,019

1,744

-

4,424

Exchange movement on cash balances

-

-

(41
)

-

(41
)

Cash and cash equivalents, end of period

$
3

$
2,597

$
1,930

$
-

$
4,530

This document contains statements that constitute “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Section 27A of the Securities Act of 1933, as amended. The words “expect,” “estimate,” “anticipate,” “predict,” “believe” and similar expressions and variations thereof are intended to identify forward-looking statements. These statements appear in a number of places in this document and include statements regarding the intent, belief or current expectations of Twenty-First Century Fox, Inc., its directors or its officers with respect to, among other things, the ~~Disney~~ Transaction and trends affecting Twenty-First Century Fox, Inc.’s financial condition or results of operations. The readers of this document are cautioned that any forward-looking statements are not guarantees of future performance and involve risks, uncertainties and assumptions that could cause actual results to differ materially from those expressed in any forward-looking statements, including, but not limited to, a failure to consummate the ~~Disney~~ Transaction in a timely ~~matter~~manner or at all. More information regarding these risks, uncertainties and other factors is set forth under the heading Part II “Other Information,” Item 1A “Risk Factors” in this report. Twenty-First Century Fox, Inc. does not ordinarily make projections of its future operating results and undertakes no obligation (and expressly disclaims any obligation) to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. Readers should carefully review this document and the other documents filed by Twenty-First Century Fox, Inc. with the Securities and Exchange Commission (the “SEC”). This section should be read together with the Unaudited Consolidated Financial Statements of Twenty-First Century Fox, Inc. and related notes set forth elsewhere herein and Twenty-First Century Fox, Inc.’s Annual Report on Form 10-K for the fiscal year ended June 30, (“fiscal”) ~~2017~~2018 as filed with the SEC on August ~~14, 2017~~13, 2018 (the ~~“2017~~“2018 Form 10-K”).

Management’s discussion and analysis of financial condition and results of operations is intended to help provide an understanding of Twenty-First Century Fox, Inc. and its subsidiaries’ (together, “Twenty-First Century Fox” or the “Company”) financial condition, changes in financial condition and results of operations. This discussion is organized as follows:

Results of Operations - This section provides an analysis of the Company’s results of operations for the three and six months ended December 31, ~~2017~~2018 and ~~2016.~~2017. 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.

Liquidity and Capital Resources - This section provides an analysis of the Company’s cash flows for the six months ended December 31, ~~2017~~2018 and ~~2016,~~2017, as well as a discussion of the Company’s outstanding debt and commitments, both firm and contingent, that existed as of December 31, ~~2017.~~2018. Included in thediscussion of outstanding debt is a discussion of the amount of financial capacity available to fund the Company’s future commitments andobligations, as well as a discussion of other financing arrangements.

In ~~December 2017,~~June 2018, the Company entered into an ~~agreement~~Amended and ~~plan~~Restated Merger Agreement and Plan of ~~merger~~Merger (the “Amended and Restated Merger Agreement”) with The Walt Disney ~~Company.~~Company (“Disney”), which amends and restates in its entirety the Agreement and Plan of Merger that the Company entered into with Disney in December 2017. Prior to the ~~merger,~~mergers contemplated by the Amended and Restated Merger Agreement, the Company will transfer a portfolio of the Company’s news, sports and broadcast businesses and certain other assets and liabilities into a newly formed subsidiary Fox Corporation (“~~New Fox”~~FOX”) and the holders of the outstanding shares of the Company’s Class A Common Stock and Class B Common Stock (other than holders that are subsidiaries of the Company) will receive, on a pro rata basis, all of the issued and outstanding common stock of ~~New Fox (the “New Fox Distribution”).~~

~~In December 2016, the Company made an offer to purchase the fully diluted share capital of Sky plc (“Sky”).~~

~~See~~FOX (See Note 2 – Acquisitions, Disposals and Other Transactions to the accompanying Unaudited Consolidated Financial Statements of Twenty-First Century Fox under the ~~headings~~heading “Disney Transaction/Distribution of ~~New Fox” and “Sky Acquisition”~~FOX”, for further ~~details.~~details).

In October 2018, the Company sold its 39% interest in Sky, plc (“Sky”) (See Note 4 – Investments to the accompanying Unaudited Consolidated Financial Statements of Twenty-First Century Fox under the heading “Sky”, for further details).

Results of Operations—For the three and six months ended December 31, ~~2017~~2018 versus the three and six months ended December 31, ~~2016~~2017

The following table sets forth the Company’s operating results for the three and six months ended December 31, ~~2017,~~2018, as compared to the three and six months ended December 31, ~~2016:~~2017:

	For the three months ended December 31,										For the six months ended December 31,										For the three months ended December 31,													For the six months ended December 31,
	2017			2016			% Change				2017			2016			% Change				2018			2017			Change			% Change				2018			2017			Change			% Change
	(in millions, except %)																				(in millions, except %)
Revenues
Affiliate fee	$	3,252		$	2,906			12		%	$	6,488		$	5,829			11		%	$	3,482		$	3,252		$	230			7		%	$	6,977		$	6,488		$	489			8		%
Advertising		2,496			2,544			(2	)	%		4,119			4,135			-		%		2,698			2,496			202			8		%		4,470			4,119			351			9		%
Content		2,140			2,032			5		%		4,159			3,901			7		%		2,118			2,140			(22	)		(1	)	%		3,889			4,159			(270	)		(6	)	%
Other		149			200			(26	)	%		273			323			(15	)	%		201			149			52			35		%		340			273			67			25		%

Total revenues		8,037			7,682			5		%		15,039			14,188			6		%		8,499			8,037			462			6		%		15,676			15,039			637			4		%
Operating expenses		(5,760	)		(4,912	)		17		%		(10,141	)		(8,827	)		15		%		(6,005	)		(5,760	)		(245	)		4		%		(10,429	)		(10,141	)		(288	)		3		%
Selling, general and administrative		(864	)		(792	)		9		%		(1,712	)		(1,607	)		7		%		(939	)		(864	)		(75	)		9		%		(1,829	)		(1,712	)		(117	)		7		%
Depreciation and amortization		(142	)		(135	)		5		%		(284	)		(270	)		5		%		(159	)		(142	)		(17	)		12		%		(317	)		(284	)		(33	)		12		%
Impairment and restructuring charges		(3	)		(39	)		(92	)	%		(24	)		(176	)		(86	)	%		-			(3	)		3			(100	)	%		(16	)		(24	)		8			(33	)	%
Equity (losses) earnings of affiliates		(33	)		(41	)		20		%		27			(6	)	**					(109	)		(33	)		(76	)	**					(74	)		27			(101	)	**
Interest expense, net		(312	)		(299	)		4		%		(625	)		(599	)		4		%		(294	)		(312	)		18			(6	)	%		(594	)		(625	)		31			(5	)	%
Interest income		9			9			-		%		19			18			6		%		86			9			77		**					94			19			75		**
Other, net		(229	)		(88	)	**					(301	)		(99	)	**					10,475			(229	)		10,704		**					10,527			(301	)		10,828		**

Income from continuing operations before income tax benefit (expense)		703			1,385			(49	)	%		1,998			2,622			(24	)	%
Income tax benefit (expense)		1,218			(448	)	**					827			(791	)	**
Income from continuing operations before income tax (expense) benefit																						11,554			703			10,851		**					13,038			1,998			11,040		**
Income tax (expense) benefit																						(630	)		1,218			(1,848	)	**					(756	)		827			(1,583	)	**

Income from continuing operations		1,921			937		**					2,825			1,831			54		%		10,924			1,921			9,003		**					12,282			2,825			9,457		**
(Loss) income from discontinued operations, net of tax		(5	)		(1	)	**					11			(7	)	**					(17	)		(5	)		(12	)	**					(24	)		11			(35	)	**

Net income		1,916			936		**					2,836			1,824			55		%		10,907			1,916			8,991		**					12,258			2,836			9,422		**
Less: Net income attributable to noncontrolling interests		(85	)		(80	)		6		%		(150	)		(147	)		2		%		(92	)		(85	)		(7	)		8		%		(158	)		(150	)		(8	)		5		%

Net income attributable to Twenty-First Century Fox stockholders	$	1,831		$	856		**				$	2,686		$	1,677			60		%	$	10,815		$	1,831		$	8,984		**				$	12,100		$	2,686		$	9,414		**

Overview – The Company’s revenues increased 5%6% and 6%4% for the three and six months ended December 31, ~~2017,~~2018, respectively, as compared to the corresponding periods of fiscal ~~2017,~~2018, primarily due to higher affiliate fee and advertising revenues partially offset by lower content ~~revenues~~.revenue. The increase in affiliate fee revenue was primarily ~~attributable~~due to contractual rate increases at the domestic ~~channels~~channels. The increase in advertising revenue was primarily due to the broadcast of National Football League (“NFL”) Thursday Night Football (“TNF”) on the FOX Broadcasting Company (the “FOX Network”) and higher ~~rates and additional subscribers~~political advertising revenue due to the U.S. midterm elections at ~~Fox Networks Group International (“FNGI”) in Latin America and Europe.~~the FOX television stations. The ~~increase~~decrease in content revenue was primarily ~~attributable~~due to lower network and syndication revenue from television productions and lower worldwide home entertainment revenue from motion picture productions partially offset by higher subscription video-on-demand (“SVOD”) revenue. Also contributing to the decrease in content revenue ~~from television productions~~for the six months ended December 31, 2018 was lower worldwide theatrical revenue. The 6% and ~~the sublicensing of sports programming rights to third party networks. These~~4% revenue increases ~~include benefits~~are net of decreases of approximately ~~$40~~$195 million and ~~$60~~$305 million due to the strengthening of ~~local currencies against~~ the U.S. dollar against local currencies for the three and six months ended December 31, ~~2017,~~2018, respectively, as compared to the corresponding periods of fiscal ~~2017.~~2018.

Operating expenses increased ~~17%~~4% and ~~15%~~3% for the three and six months ended December 31, ~~2017,~~2018, respectively, as compared to the corresponding periods of fiscal ~~2017,~~2018, primarily due to higher sports programming rights amortization and production costs at the Television and Cable Network Programming segments partially offset by lower production amortization and ~~Television~~ ~~segments~~ ~~and higher theatrical~~ ~~marketing~~participation costs ~~related to~~from television and motion picture productions and lower theatrical marketing costs at the Filmed Entertainment segment.

Selling, general and administrative expenses increased 9% and 7% for the three and six months ended December 31, ~~2017,~~2018, respectively, as compared to the corresponding periods of fiscal ~~2017,~~2018, primarily due to higher compensation expenses, including ~~new businesses acquired in fiscal 2017~~.

~~Impairment~~approximately $15 million of additional compensation expenses related to the Disney Transaction/Distribution of FOX (See Note 2 – Acquisitions, Disposals and ~~restructuring charges~~ – ~~See Note 11 – Additional Financial Information~~Other Transactions to the accompanying Unaudited Consolidated Financial Statements of Twenty-First Century Fox under the heading ~~“Impairment and restructuring charges”~~“Disney Transaction/Distribution of FOX”).

Equity (losses) earnings of affiliates – Equity (losses) earnings of affiliates ~~improved $8~~decreased $76 million and ~~$33~~$101 million for the three and six months ended December 31, ~~2017,~~2018, respectively, as compared to the corresponding periods of fiscal ~~2017.~~2018. The ~~increase~~decrease was primarily due to ~~improved~~the absence of Sky’s results ~~at Endemol Shine Group~~for the three months ended December 31, 2018 as a result of the sale of Sky in October 2018 (See Note4–InvestmentstotheaccompanyingUnauditedConsolidatedFinancialStatementsofTwenty-FirstCenturyFoxundertheheading“Sky”) and higher ~~earnings for Sky~~ losses at Hulu, LLC (“Hulu”) resulting from higher programming costs partially offset by higher ~~losses at~~ ~~Hulu, LLC (“Hulu~~”)subscription and ~~a write-down of the Company’s equity method investment in certain businesses in Asia and Africa.~~advertising revenues.

	For the three months ended December 31,										For the six months ended December 31,										For the three months ended December 31,													For the six months ended December 31,
	2017			2016			% Change				2017			2016			% Change				2018			2017			Change			% Change				2018			2017			Change			% Change
	(in millions, except %)																				(in millions, except %)
Sky	$	120		$	65			85		%	$	230		$	162			42		%	$	-		$	120		$	(120	)		(100	)	%	$	147		$	230		$	(83	)		(36	)	%
Hulu		(108	)		(60	)		(80	)	%		(170	)		(99	)		(72	)	%		(115	)		(108	)		(7	)		(6	)	%		(229	)		(170	)		(59	)		(35	)	%
Other equity affiliates		(45	)		(46	)		2		%		(33	)		(69	)		52		%		6			(45	)		51		**					8			(33	)		41		**
																																		0
Equity (losses) earnings of affiliates	$	(33	)	$	(41	)		20		%	$	27		$	(6	)	**				$	(109	)	$	(33	)	$	(76	)	**				$	(74	)	$	27		$	(101	)	**

Interest income – Interest income increased $77 million and $75 million for the three and six months ended December 31, 2018, respectively, as compared to the corresponding periods of fiscal 2018, primarily due to higher cash and cash equivalents in the current year as compared to the prior year periods as a result of the cash proceeds from the sale of Sky in October 2018 (See Note4–InvestmentstotheaccompanyingUnauditedConsolidatedFinancialStatementsofTwenty-FirstCenturyFoxundertheheading“Sky”).

Other, net – See Note 1112 – Additional Financial Information to the accompanying Unaudited Consolidated Financial Statements of Twenty-First Century Fox under the heading “Other, net”.

Income tax (expense) benefit ~~(expense)~~ – The Company’s effective income tax rate for the three and six months ended December 31, ~~2017 includes~~2018 was 5% and 6%, respectively, which was lower than the statutory rate of 21% primarily due to a ~~provisional $1.3 billion~~non-cash benefit of 16% from a deferred tax ~~benefit~~asset that was determined to be realizable as a result of the ~~recently passed legislation~~decision reached to sell Sky in the ~~U.S. commonly referred to as the~~ first quarter of fiscal 2019 (~~Tax Cuts and Jobs Act (the “Tax Act”) (See~~See Note 1 – Basis of Presentation to the accompanying Unaudited Consolidated Financial Statements of Twenty-First Century Fox under the heading ~~“U.S. Tax Reform”~~“Adopted”).

The Company’seffective income tax rate for the three and six months ended December 31, ~~2016 was 32%~~2017 included a provisional $1.3 billion tax benefit as a result of the Tax Cuts and ~~30%, respectively, as compared~~Jobs Act (the “Tax Act”) (as described in Note 1 – Basis of Presentation to the ~~statutory rate~~accompanying Unaudited Consolidated Financial Statements of ~~35%. For~~Twenty-First Century Fox under the three months ended December 31, 2016, the rate was lower than the statutory rate primarily due to a 2% benefit from domestic production activities and other permanent items. For the six months ended December 31, 2016, the rate was lower than the statutory rate primarily due to a 2% benefit from domestic production activities, a 2% benefit related to the Company’s foreign operations and other permanent items.heading “U.S. Tax Reform”).

Net income – Net income increased for the three and six months ended December 31, ~~2017,~~2018, as compared to the corresponding periods of fiscal ~~2017,~~2018, primarily due to the gain on the sale of the Company’s interest in Sky in October 2018 (See Note4–InvestmentstotheaccompanyingUnauditedConsolidatedFinancialStatementsofTwenty-FirstCenturyFoxundertheheading“Sky”) partially offset by the absence of an income tax benefit ~~as a result of~~resulting from the Tax Act ~~partially offset by lower Segment OIBDA at~~in the ~~Television and Filmed Entertainment segments.~~prior year.

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 U.S. generally accepted accounting principles (“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.

	For the three months ended December 31,										For the six months ended December 31,										For the three months ended December 31,													For the six months ended December 31,
	2017			2016			% Change				2017			2016			% Change				2018			2017			Change			% Change				2018			2017			Change			% Change
	(in millions, except %)																				(in millions, except %)
Income from continuing operations before income tax benefit (expense)	$	703		$	1,385			(49	)	%	$	1,998		$	2,622			(24	)	%
Income from continuing operations before income tax (expense) benefit																					$	11,554		$	703		$	10,851		**				$	13,038		$	1,998		$	11,040		**
Add
Amortization of cable distribution investments		25			16			56		%		43			31			39		%		10			25			(15	)		(60	)	%		20			43			(23	)		(53	)	%
Depreciation and amortization		142			135			5		%		284			270			5		%		159			142			17			12		%		317			284			33			12		%
Impairment and restructuring charges		3			39			(92	)	%		24			176			(86	)	%		-			3			(3	)		(100	)	%		16			24			(8	)		(33	)	%
Equity losses (earnings) of affiliates		33			41			20		%		(27	)		6		**					109			33			76		**					74			(27	)		101		**
Interest expense, net		312			299			4		%		625			599			4		%		294			312			(18	)		(6	)	%		594			625			(31	)		(5	)	%
Interest income		(9	)		(9	)		-		%		(19	)		(18	)		6		%		(86	)		(9	)		(77	)	**					(94	)		(19	)		(75	)	**
Other, net		229			88		**					301			99		**					(10,475	)		229			(10,704	)	**					(10,527	)		301			(10,828	)	**

Total Segment OIBDA	$	1,438		$	1,994			(28	)	%	$	3,229		$	3,785			(15	)	%	$	1,565		$	1,438		$	127			9		%	$	3,438		$	3,229		$	209			6		%

The following table sets forth the computation of Total Segment OIBDA for the three and six months ended December 31, ~~2017,~~2018, as compared to the three and six months ended December 31, ~~2016:~~2017:

	For the three months ended December 31,										For the six months ended December 31,										For the three months ended December 31,													For the six months ended December 31,
	2017			2016			% Change				2017			2016			% Change				2018			2017			Change			% Change				2018			2017			Change			% Change
	(in millions, except %)																				(in millions, except %)
Revenues	$	8,037		$	7,682			5		%	$	15,039		$	14,188			6		%	$	8,499		$	8,037		$	462			6		%	$	15,676		$	15,039		$	637			4		%
Operating expenses		(5,760	)		(4,912	)		17		%		(10,141	)		(8,827	)		15		%		(6,005	)		(5,760	)		(245	)		4		%		(10,429	)		(10,141	)		(288	)		3		%
Selling, general and administrative		(864	)		(792	)		9		%		(1,712	)		(1,607	)		7		%		(939	)		(864	)		(75	)		9		%		(1,829	)		(1,712	)		(117	)		7		%
Amortization of cable distribution investments		25			16			56		%		43			31			39		%		10			25			(15	)		(60	)	%		20			43			(23	)		(53	)	%

Total Segment OIBDA	$	1,438		$	1,994			(28	)	%	$	3,229		$	3,785			(15	)	%	$	1,565		$	1,438		$	127			9		%	$	3,438		$	3,229		$	209			6		%

The following tables set forth the Company’s Revenues and Segment OIBDA for the three and six months ended December 31, ~~2017,~~2018, as compared to the three and six months ended December 31, ~~2016:~~2017:

	For the three months ended December 31,										For the six months ended December 31,										For the three months ended December 31,													For the six months ended December 31,
	2017			2016			% Change				2017			2016			% Change				2018			2017			Change			% Change				2018			2017			Change			% Change
	(in millions, except %)																				(in millions, except %)
Revenues
Cable Network Programming	$	4,405		$	3,967			11		%	$	8,601		$	7,777			11		%	$	4,562		$	4,405		$	157			4		%	$	8,909		$	8,601		$	308			4		%
Television		1,806			1,918			(6	)	%		2,871			2,956			(3	)	%		2,148			1,806			342			19		%		3,424			2,871			553			19		%
Filmed Entertainment		2,246			2,269			(1	)	%		4,209			4,176			1		%		2,159			2,246			(87	)		(4	)	%		3,975			4,209			(234	)		(6	)	%
Other, Corporate and Eliminations		(420	)		(472	)		11		%		(642	)		(721	)		11		%		(370	)		(420	)		50			12		%		(632	)		(642	)		10			2		%

Total revenues	$	8,037		$	7,682			5		%	$	15,039		$	14,188			6		%	$	8,499		$	8,037		$	462			6		%	$	15,676		$	15,039		$	637			4		%

	For the three months ended December 31,										For the six months ended December 31,										For the three months ended December 31,												For the six months ended December 31,
	2017			2016			% Change				2017			2016			% Change				2018			2017			Change			% Change			2018			2017			Change			% Change
	(in millions, except %)																				(in millions, except %)
Segment OIBDA
Cable Network Programming	$	1,365		$	1,330			3		%	$	2,876		$	2,714			6		%	$	1,454		$	1,365		$	89			7	%	$	2,991		$	2,876		$	115			4		%
Television		56			376			(85	)	%		178			567			(69	)	%		(22	)		56			(78	)	**				146			178			(32	)		(18	)	%
Filmed Entertainment		131			389			(66	)	%		387			700			(45	)	%		193			131			62			47	%		470			387			83			21		%
Other, Corporate and Eliminations		(114	)		(101	)		(13	)	%		(212	)		(196	)		(8	)	%		(60	)		(114	)		54			47	%		(169	)		(212	)		43			20		%

Total Segment OIBDA	$	1,438		$	1,994			(28	)	%	$	3,229		$	3,785			(15	)	%	$	1,565		$	1,438		$	127			9	%	$	3,438		$	3,229		$	209			6		%

Cable Network Programming (57% ~~and 55%~~ of the Company’s consolidated revenues in the first six months of fiscal ~~2018~~2019 and ~~2017, respectively)~~2018)

	For the three months ended December 31,													For the six months ended December 31,
	2018			2017			Change			% Change				2018			2017			Change			% Change
	(in millions, except %)
Revenues
Affiliate fee	$	3,075		$	2,915		$	160			5		%	$	6,172		$	5,817		$	355			6		%
Advertising, content and other		1,487			1,490			(3	)		-		%		2,737			2,784			(47	)		(2	)	%

Total revenues		4,562			4,405			157			4		%		8,909			8,601			308			4		%
Operating expenses		(2,663	)		(2,648	)		(15	)		1		%		(5,047	)		(4,931	)		(116	)		2		%
Selling, general and administrative		(455	)		(417	)		(38	)		9		%		(891	)		(837	)		(54	)		6		%
Amortization of cable distribution investments		10			25			(15	)		(60	)	%		20			43			(23	)		(53	)	%

Segment OIBDA	$	1,454		$	1,365		$	89			7		%	$	2,991		$	2,876		$	115			4		%

For the three and six months ended December 31, ~~2017,~~2018, revenues at the Cable Network Programming segment increased ~~11%~~, ~~or $438~~as compared to the corresponding periods of fiscal 2018, primarily due to higher affiliate fee revenue. Partially offsetting the increase for the six months ended December 31, 2018 was lower content revenue. The 4% revenue increases are net of decreases of approximately $160 million and ~~$824~~$270 million due to the strengthening of the U.S. dollar against local currencies, primarily in Latin America, for the three and six months ended December 31, 2018, respectively, as compared to the corresponding periods of fiscal ~~2017, primarily due to higher affiliate fee, advertising and content and other revenues as shown below:~~

These revenue increases include benefits of approximately $15 million and $30 million due to the strengthening of local currencies against the U.S. dollar, primarily in India and Europe, for the three and six months ended December 31, 2017, respectively, as compared to the corresponding periods of fiscal 2017.2018.

For the three and six months ended December 31, ~~2017,~~2018, Cable Network Programming Segment OIBDA increased ~~$35 million, or 3%~~, ~~and $162 million, or 6%, respectively,~~ as compared to the corresponding periods of fiscal ~~2017,~~2018, primarily due to the revenue increases noted above partially offset by higher ~~expenses~~expenses. The 7% and 4% Segment OIBDA increases are net of ~~$403~~decreases of approximately $70 million ~~or 15%,~~ and ~~$662~~$125 million ~~or 13%, respectively. For~~due to the strengthening of the U.S. dollar against local currencies, for the three and six months ended December 31, ~~2017,~~2018, respectively, as compared to the ~~increases in expenses were primarily due to higher sports programming rights amortization.~~corresponding periods of fiscal 2018.

For the three and six months ended December 31, ~~2017,~~2018, domestic revenues increased 7%, as compared to the corresponding periods of fiscal 2018, primarily due to higher affiliate fee and advertising revenues. Partially offsetting higher domestic revenues for the six months ended December 31, 2018 was a 12% decrease in content revenue primarily due to lower third-party licensing of scripted content at FX Networks. For the three and six months ended December 31, 2018, domestic affiliate fee revenue increased 8% and 9%, respectively, as compared to the corresponding periods of fiscal 2018, primarily due to contractual rate increases led by the Regional Sports Networks (“RSNs”), FOX News Channel (“FOX News”), FS1 and FX Networks. For the three and six months ended December 31, 2018, domestic advertising revenue increased 6% and 7%, respectively, as compared to the corresponding periods of fiscal ~~2017, primarily due to contractual rate increases~~2018, led by ~~Fox News Channel, the Regional Sports Networks, FS1 and FX Networks partially offset by the impact of lower average subscribers~~higher pricing at Fox News Channel. For the three months ended December 31, 2017, domestic advertising revenue decreased, as compared to the corresponding period of fiscal 2017, primarily due to lower ratings at FX Networks principally reflecting a lower number of original series. For the six months ended December 31, 2017, domestic advertising revenue remained constant, as compared to the corresponding period of fiscal 2017, as higher viewership at FS1 from the addition of Big Ten college

football was offset by lower ratings at FX Networks. The increases in domestic content and other revenues for the three and six months ended December 31, 2017, as compared to the corresponding periods of fiscal 2017, were primarily due to the sublicensing of Big Ten programming rights to third party networks.FOX News.

For the three and six months ended December 31, ~~2017,~~2018, domestic channels OIBDA increased 1%10% and 6%8%, respectively, as compared to the corresponding periods of fiscal ~~2017,~~2018, primarily due to the revenue increases noted above partially offset by higher expenses. ~~Operating expenses increased approximately $230 million and $330 million for~~For the three and six months ended December 31, ~~2017,~~2018, operating expenses increased $85 million and $196 million, respectively, ~~as compared to the corresponding periods of fiscal 2017, primarily~~principally due to higher sports programming rights amortization ~~including the addition of the Big Ten programming rights~~ and ~~higher~~production costs, including National Basketball Association costs due to contractual rate increases at the RSNs and Major League Baseball (“~~NBA”~~MLB”) costs ~~as a result of an increase in the number of games broadcast reflecting an earlier start to the NBA season~~at FS1, and ~~contractual rate increases. Selling, general and administrative expenses increased approximately $30 million and $60 million~~ higher entertainment programming rights amortization at FX Networksfor the three ~~and~~months ended December 31, 2018. Also contributing to the increase for the six months ended December 31, ~~2017, respectively, as compared to~~2018 was higher MLB costs at the ~~corresponding periods of fiscal 2017, primarily due to higher compensation expenses.~~RSNs and FIFA World Cup and Big Ten costs at FS1.

For the three and six months ended December 31, ~~2017,~~2018, international ~~affiliate fee revenue increased,~~revenues decreased 5%, as compared to the corresponding periods of fiscal ~~2017, as a result of local currency growth of 12% and 11%, respectively, led by higher rates and additional subscribers at FNGI in Latin America and Europe.~~2018. For the three and six months ended December 31, ~~2017,~~2018, international ~~advertising~~affiliate fee revenue ~~increased,~~decreased 4% and 3%, respectively, as compared to the corresponding periods of fiscal ~~2017,~~2018, as ~~a result of~~ local currency growth of ~~12%~~11% and 10%, respectively, ~~primarily due to higher revenue at STAR India (“STAR”),~~ led by additional subscribers and higher ~~pricing and volume~~rates at ~~STAR’s general entertainment channels and an increased number~~Fox Networks Group International (“FNGI”) in Latin America, was more than offset by the adverse impact of ~~cricket matches broadcast in~~ the ~~current period compared to~~strengthening of the ~~prior year. The increases in international content and other revenues for~~U.S. dollar against local currencies. For the three and six months ended December 31, ~~2017,~~2018, international advertising revenue decreased 9% and 8%, respectively, as compared to the corresponding periods of fiscal ~~2017, were primarily due to~~2018, as a result of local currency growth at STAR India (“STAR”) being more than offset by the ~~sublicensing~~adverse impact of ~~soccer programming rights in Latin America~~the strengthening of the U.S. dollar against local currencies and ~~higher syndication~~lower local currency advertising revenue ~~in Asia.~~at FNGI.

For the three and six months ended December 31, ~~2017,~~2018, international channels OIBDA ~~increased~~decreased 8% and 4%16%, respectively, as compared to the corresponding periods of fiscal ~~2017, as~~2018, primarily due to the revenue ~~increases~~decreases noted above ~~were~~ partially offset by ~~higher~~lower expenses. ~~Operating expenses increased approximately $165 million and $295 million for~~For the three and six months ended December 31, ~~2017,~~2018, operating expenses decreased $70 million and $80 million, respectively, ~~as compared~~principally due to lower programming costs at STAR, including a fewer number of Board of Control for Cricket in India matches in the ~~corresponding periods~~current year versus the prior year, and the impact of ~~fiscal 2017, primarily~~the strengthening of the U.S. dollar against local currencies. For the three and six months ended December 31, 2018, selling, general and administrative expenses increased $22 million and $36 million, respectively, principally due to higher entertainment and sports programming rights amortization at FNGI, including higher soccer programming rights led by CONMEBOL and the new Argentine Football Association rights. Also contributing to the increase was higher sports and entertainment programming rights amortization at STAR, including an increased number of cricket matches.compensation expenses.

Television~~(19%~~ (22% and ~~21%~~19% of the Company’s consolidated revenues in the first six months of fiscal 2019 and 2018, respectively)

	For the three months ended December 31,													For the six months ended December 31,
	2018			2017			Change			% Change				2018			2017			Change			% Change
	(in millions, except %)
Revenues
Advertising	$	1,634		$	1,416		$	218			15		%	$	2,433		$	2,071		$	362			17		%
Affiliate fee, content and other		514			390			124			32		%		991			800			191			24		%
					2
Total revenues		2,148			1,806			342			19		%		3,424			2,871			553			19		%
Operating expenses		(2,011	)		(1,588	)		(423	)		27		%		(2,962	)		(2,389	)		(573	)		24		%
Selling, general and administrative		(159	)		(162	)		3			(2	)	%		(316	)		(304	)		(12	)		4		%

Segment OIBDA	$	(22	)	$	56		$	(78	)	**				$	146		$	178		$	(32	)		(18	)	%

For the three and ~~2017, respectively)~~six months ended December 31, 2018, revenues at the Television segment increased, as compared to the corresponding periods of fiscal 2018, primarily due to higher advertising, affiliate fee and content revenues. The increases in advertising revenue were primarily due to revenues resulting from the broadcast of NFL TNF and higher political advertising revenue due to the U.S. midterm elections at FOX television stations, partially offset by two fewer broadcasts of MLB World Series games in the current year. Also contributing to the increase in advertising revenue for the six months ended December 31, 2018 was the broadcast of a portion of the FIFA World Cup matches in the current year. Affiliate fee revenue increased 21% and 20% for the three and six months ended December 31, 2018, respectively, as compared to the corresponding periods of fiscal 2018, primarily due to contractual rate increases. Content revenue increased 84% and 57% for the three and six months ended December 31, 2018, respectively, as compared to the corresponding periods of fiscal 2018, primarily due to higher SVOD revenue at FOX Network.

For the three and six months ended December 31, ~~2017, revenues at the~~2018, Television ~~segment~~Segment OIBDA decreased, ~~$112 million, or 6%, and $85 million, or 3%, respectively,~~ as compared to the corresponding periods of fiscal ~~2017,~~2018, as ~~higher affiliate fee~~the revenue ~~was~~increases noted above were more than offset by lower advertising and content and other revenues. Affiliate fee revenue increased 10% and 9% for the three and six months ended December 31, 2017, respectively, as compared to the corresponding periods of fiscal 2017, as a result of contractual rate increases. Advertising revenue decreased 6% and 5% for the three and six months ended December 31, 2017, respectively, as compared to the corresponding periods of fiscal 2017, primarily due to lower cyclical political advertising revenue at the television stations as a result of the 2016 elections in the prior year. Also contributing to the decrease in advertising revenue were lower ratings for the National Football League (“NFL”) and Major League Baseball World Series games and lower entertainment ratings at FOX Broadcasting Company partially offset by ~~the broadcast of a~~ higher ~~number of college football and NFL games~~. Content and other revenues decreased 50% and 23% for the three and six months ended December 31, 2017, respectively, as compared to the corresponding periods of fiscal 2017, primarily due to the absence of revenue generated in the prior year by the granting of a license of one of our television stations to permit the commercial use of adjacent wireless spectrum in that market.

For the three and six months ended December 31, 2017, Television Segment OIBDA decreased $320 million, or 85%, and $389 million, or 69%, respectively, as compared to the corresponding periods of fiscal 2017, primarily due to higher expenses of $208 million, or 13%, and $304 million, or 13%, respectively, as compared to the corresponding periods of fiscal 2017, and the revenue decreases noted above.expenses. Operating expenses increased ~~approximately $175 million and $275 million for the three and six months ended December 31, 2017, respectively, as compared to the~~

~~corresponding periods of fiscal 2017,~~ primarily due to higher sports programming rights amortization and production costs, including ~~costs for~~NFL TNF, partially offset by lower entertainment programming rights amortization as a result of the ~~broadcast~~mix of ~~a higher number of college football and NFL games.~~programming in the current year as compared to the prior year.

Filmed Entertainment (~~28%~~25% and ~~29%~~28% of the Company’s consolidated revenues in the first six months of fiscal ~~2018~~2019 and ~~2017,~~2018, respectively)

	For the three months ended December 31,													For the six months ended December 31,
	2018			2017			Change			% Change				2018			2017			Change			% Change
	(in millions, except %)
Revenues
Content	$	2,059		$	2,168		$	(109	)		(5	)	%	$	3,784		$	4,059		$	(275	)		(7	)	%
Advertising and other		100			78			22			28		%		191			150			41			27		%

Total revenues		2,159			2,246			(87	)		(4	)	%		3,975			4,209			(234	)		(6	)	%
Operating expenses		(1,751	)		(1,926	)		175			(9	)	%		(3,075	)		(3,420	)		345			(10	)	%
Selling, general and administrative		(215	)		(189	)		(26	)		14		%		(430	)		(402	)		(28	)		7		%

Segment OIBDA	$	193		$	131		$	62			47		%	$	470		$	387		$	83			21		%

For the three and six months ended December 31, ~~2017,~~2018, revenues at the Filmed Entertainment segment decreased, ~~$23 million, or 1%,~~ as compared to the corresponding ~~period~~periods of fiscal ~~2017,~~2018, primarily due to lower network and syndication revenue from television productions and lower worldwide home entertainment ~~revenues~~revenue from motion picture productions partially offset by higher SVOD revenue from television productions and higher ~~worldwide theatrical~~television revenue from motion picture productions. ~~For~~Also contributing to the decrease in revenues for the six months ended December 31, ~~2017, revenues at the Filmed Entertainment segment increased $33 million, or 1%, as compared to the corresponding period of fiscal 2017, primarily due to higher SVOD revenue, led by the licensing of~~ ~~This is Us~~ ~~and~~ ~~Seven Seconds, and higher syndication revenue, led by the licensing of~~ ~~Futurama, from television productions, and higher~~2018 was lower worldwide theatrical revenue from motion picture productions ~~partially offset by lower television revenues from motion picture productions. These~~as a result of the number and mix of theatrical releases in the current year period as compared to the prior year. The revenue ~~changes~~decreases of 4% and 6% include ~~benefits~~decreases of approximately ~~$25 million and $30~~$35 million due to the strengthening of ~~local currencies against~~ the U.S. dollar against local currencies for the three and six months ended December 31, ~~2017,~~2018, respectively, as compared to the corresponding periods of fiscal ~~2017.~~2018.

For the three and six months ended December 31, ~~2017,~~2018, Filmed Entertainment Segment OIBDA ~~decreased $258 million, or 66%~~increased, ~~and $313 million, or 45% respectively,~~ as compared to the corresponding periods of fiscal ~~2017,~~2018, primarily due to ~~higher~~lower expenses ~~of $235 million, or 13%, and $346 million, or 10%, respectively.~~ partially offset by the revenue decreases noted above. Operating expenses ~~increased approximately $225 million and $325 million~~decreased for the three and six months ended December 31, ~~2017, respectively,~~2018, as compared to the corresponding periods of fiscal ~~2017,~~2018, primarily due to ~~higher~~lower production amortization and participation costs from television and motion picture productions and lower theatrical marketing costs from motion picture productions as a result of ~~significant~~fewer releases in the current year periods as compared to the corresponding prior year periods. The Segment OIBDA increases were net of decreases of approximately $25 million due to the strengthening of the U.S. dollar against local currencies for the three and ~~higher production amortization and participation costs.~~six months ended December 31, 2018, as compared to the corresponding periods of fiscal 2018.

The following feature film titles contributed significant revenues for the three months ended December 31, ~~2017~~2018 and ~~2016:~~2017:

	For the three months ended December 31,		For the three months ended December 31,
	2017	2016	2018	2017

Worldwide theatrical releases	Murder on the Orient Express	Trolls
Worldwide theatrical performances			Bohemian Rhapsody	Murder on the Orient Express
	Ferdinand			Ferdinand
	The Greatest Showman			The Greatest Showman
Worldwide theatrical and home entertainment performances	Kingsman: The Golden Circle	Miss Peregrine's Home for Peculiar Children	The Predator	Kingsman: The Golden Circle
Worldwide home entertainment performances	War for the Planet of the Apes	X-Men: Apocalypse	Deadpool 2	War of the Planet of the Apes
		Ice Age: Collision Course
		Independence Day: Resurgence

The following feature film titles contributed significant revenues for the six months ended December 31, ~~2017~~2018 and ~~2016:~~2017:

	For the six months ended December 31,		For the six months ended December 31,
	2017	2016	2018	2017

Worldwide theatrical releases	Murder on the Orient Express	Trolls
Worldwide theatrical performances			Bohemian Rhapsody	Murder on the Orient Express
	Ferdinand			Ferdinand
	The Greatest Showman			The Greatest Showman
Worldwide theatrical and home entertainment performances	War for the Planet of the Apes	Ice Age: Collision Course	Deadpool 2	War of the Planet of the Apes
	Kingsman: The Golden Circle	Independence Day: Resurgence	The Predator	Kingsman: The Golden Circle
		Miss Peregrine's Home for Peculiar Children
Worldwide home entertainment performances	The Boss Baby	X-Men: Apocalypse	The Greatest Showman	The Boss Baby

The Company’s principal source of liquidity is internally generated funds. The Company also has an unused $1.4 billion revolving credit facility, as amended, which expires in May 2020, and has access to various film co-financing alternatives to supplement its cash flows. In addition, the Company has access to the worldwide capital markets, subject to market conditions. As of December 31, ~~2017,~~2018, the Company was in compliance with all of the covenants under the revolving credit facility, and it does not anticipate any violation of such covenants. The Company’s internally generated funds are highly dependent upon the state of the advertising markets and public acceptance of its film and television productions.

The principal uses of cash that affect the Company’s liquidity position include the following: investments in the production and distribution of new motion pictures and television programs; the acquisition of rights and related payments for entertainment and sports programming; operational expenditures including employee costs; capital expenditures; interest expenses; income tax payments; investments in associated entities; dividends; acquisitions; debt repayments; and stock repurchases.

In addition to the acquisitions, sales and possible acquisitions disclosed elsewhere, the Company has evaluated, and expects to continue to evaluate, possible acquisitions and dispositions of certain businesses and assets. Such transactions may be material and may involve cash, the Company’s securities or the assumption of additional indebtedness (See Note 2 – Acquisitions, Disposals and Other Transactions and Note 4 – Investments to the accompanying Unaudited Consolidated Financial Statements of Twenty-First Century ~~Fox under the headings “Disney Transaction/Distribution of New Fox” and “Sky Acquisition”)~~Fox).

Net cash provided by operating activities for the six months ended December 31, ~~2017~~2018 and ~~2016~~2017 was as follows (in millions):

For the six months ended December 31,		2017				2016				2018				2017
Net cash provided by operating activities from continuing operations		$	504			$	1,232			$	557			$	504

The ~~decrease~~increase in net cash provided by operating activities during the six months ended December 31, ~~2017,~~2018, as compared to the corresponding period of fiscal ~~2017,~~2018, is primarily due to ~~the decrease in~~lower cash tax payments, higher operating results ~~lower cash receipts~~and higher collections over billings at the Filmed Entertainment and Cable Network Programming segments partially offset by higher programming rights payments at the Cable Network Programming segment and ~~Television segments,~~ higher ~~billings over collections~~production spending for television productions at the Filmed Entertainment ~~segment, higher tax payments~~segment.

Net cash provided by (used in) investing activities for the six months ended December 31, 2018 and ~~lower~~2017 was as follows (in millions):

The change in net cash ~~distributions~~provided by (used in) investing activities during the six months ended December 31, 2018, as compared to the corresponding period of fiscal 2018, was primarily due to the cash received from ~~affiliates~~the Sky transaction (See Note 4 – Investments to the accompanying Unaudited Consolidated Financial Statements of Twenty-First Century ~~Fox).~~

~~Net cash used in investing activities for the six months ended December 31, 2017 and 2016 was as follows (in millions):~~

The decrease in net cash used in investing activities during the six months ended December 31, 2017, as compared to the corresponding period of fiscal 2017, was primarily due to cash received from the Federal Communications Commission’s reverse auction for broadcast spectrum (See Note 2 – Acquisitions, Disposals and Other Transactions to the accompanying Unaudited Consolidated Financial Statements of Twenty-First Century Fox under the heading ~~“Other”~~“Sky”) ~~partially offset by an additional investment in Hulu and higher capital expenditures.~~.

Net cash used in financing activities for the six months ended December 31, ~~2017~~2018 and ~~2016~~2017 was as follows (in millions):

For the six months ended December 31,		2017				2016				2018				2017
Net cash used in financing activities from continuing operations		$	(691	)		$	(820	)		$	(1,090	)		$	(691	)

The ~~decrease~~increase in net cash used in financing activities during the six months ended December 31, ~~2017,~~2018, as compared to the corresponding period of fiscal ~~2017,~~2018, was primarily due to ~~the Company not repurchasing any of its common stock during the six months ended December 31, 2017 partially offset by a decrease~~an increase in net repayments over borrowings,. higher cash tax payments related to the Company’s equity-based compensation program and the purchase of subsidiary shares from noncontrolling interests.

The Company has a stock repurchase program but did not repurchase any of its Class A Common Stock or Class B Common Stock during the six months ended December 31, ~~2017 and is required pursuant~~ 2018. Pursuant to the Amended and Restated Merger Agreement, ~~to obtain Disney’s consent prior to~~the Company is prohibited from repurchasing any additional shares without Disney’s consent (See Note 7 – Stockholders’ Equity to the accompanying Unaudited Consolidated Financial Statements of Twenty-First Century Fox under the heading “Stock Repurchase Program”).

The following table summarizes cash from borrowings and cash used in repayment of borrowings for the six months ended December 31, ~~2017~~2018 and ~~2016:~~2017:

	For the six months ended December 31,						For the six months ended December 31,
	2017			2016			2018			2017
	(in millions)						(in millions)
Borrowings
Notes due 2026 and 2046	$	-		$	842
Bank loans^(a)		1,282			37		$	90		$	1,282

Total borrowings	$	1,282		$	879		$	90		$	1,282

Repayment of borrowings
Notes due October 2016	$	-	��	$	(400	)
Notes due August 2018							$	(250	)	$	-
Bank loans^(a)		(1,411	)		(146	)		(162	)		(1,411	)
								-
Total repayment of borrowings	$	(1,411	)	$	(546	)	$	(412	)	$	(1,411	)

The following table summarizes the Company’s credit ratings as of December 31, ~~2017:~~2018:

21st Century Fox America, Inc. (“21CFA”), a wholly-owned subsidiary of the Company, is party to a credit agreement providing a $1.4 billion unsecured revolving credit facility with a sub-limit of $250 million (or its equivalent in Euros) available for the issuance of letters of credit and a maturity date of May 2020 (See Note 11 – Borrowings in the ~~2017~~2018 Form 10-K under the heading “Revolving Credit Agreement”).

To provide financing in connection with the acquisition of Sky, ~~Acquisition,~~ the Company and 21CFA entered into a bridge credit agreement. In connection with the lapsing of the Company’s offer for Sky, the bridge credit agreement has been terminated as of October 6, 2018 (See Note 4 – Investments to the accompanying Unaudited Consolidated Financial Statements of Twenty-First Century Fox under the heading “Sky”).

In January 2019, FOX issued approximately $6.8 billion of senior notes (See Note 6 – Borrowings to the accompanying Unaudited Consolidated Financial Statements of Twenty-First Century Fox under the heading “FOX Borrowings”). FOX intends to use the net proceeds of approximately $6.8 billion from the sale of the notes, together with available cash on its balance sheet and other financing facilities, if needed, principally to fund the FOX dividend of $8.5 billion and to pay fees and expenses incurred in connection with the senior notes offering and the Transaction (as defined in Note 2 – Acquisitions, Disposals and Other Transactions to the accompanying Unaudited Consolidated Financial Statements of Twenty-First Century Fox under the heading ~~“Sky Acquisition”~~“Disney Transaction/Distribution of FOX”).

See Note 9 – Commitments and Contingencies to the accompanying Unaudited Consolidated Financial Statements of Twenty-First Century Fox under the headings “Commitments”, “Contingent Guarantees” and “Contingencies”.

See Note 1 – Basis of Presentation to the accompanying Unaudited Consolidated Financial Statements of Twenty-First Century Fox under the heading “Recently Adopted and Recently Issued Accounting Guidance and U.S. Tax Reform”.

The Company has exposure to several types of market risk: changes in foreign currency exchange rates, interest rates and stock prices. The Company neither holds nor issues financial instruments for trading purposes.

The following sections provide quantitative and qualitative information on the Company’s exposure to foreign currency exchange rate risk, interest rate risk and stock price risk. The Company makes use of sensitivity analyses that are inherently limited in estimating actual losses in fair value that can occur from changes in market conditions.

The U.S. dollar is the functional currency of the Company’s U.S. operations and continues to be the principal currency in which the Company conducts its operations. For operations outside the U.S., the respective local currency is generally the functional currency. In most regions where the Company operates, the net earnings of ~~wholly owned~~wholly-owned subsidiaries are reinvested locally and working capital requirements are met from existing liquid funds. To the extent such funds are not sufficient to meet working capital requirements, draw downs in the appropriate local currency are available from intercompany borrowings. The Company uses foreign currency forward contracts, primarily denominated in Indian Rupees, Pounds Sterling and Canadian Dollars, to hedge certain exposures to foreign currency exchange rate risks associated with ~~revenues and~~ the cost of producing or acquiring films and television programming. The Company also entered into a foreign currency option contract to limit its foreign currency exchange rate risk in connection with the ~~Sky Acquisition.~~acquisition of Sky. For accounting purposes, the option contract ~~does~~did not qualify for hedge accounting and therefore ~~has been~~was treated as an economic hedge (See Note 24 – ~~Acquisitions, Disposals~~Investments under the heading “Sky” and ~~Other Transactions~~Note 5 – Fair Value under the heading “Foreign Currency Contracts” to the accompanying Unaudited Consolidated Financial Statements of Twenty-First Century ~~Fox under the heading “Sky Acquisition”)~~Fox). Information on the derivative financial instruments with exposure to foreign currency exchange rate risk is presented below:

	As of December 31, 2017			As of June 30, 2017			As of December 31, 2018			As of June 30, 2018
	(in millions)						(in millions)
Notional Amount (Foreign currency purchases and sales, including options)
Foreign currency purchases	$	12,642		$	12,529		$	183		$	12,889
Foreign currency sales		26			51			119			18

Aggregate notional amount	$	12,668		$	12,580		$	302		$	12,907

Notional Amount (Hedge type)
Cash flow hedges	$	116		$	209		$	286		$	119
Economic hedges		12,552			12,371			16			12,788

Aggregate notional amount	$	12,668		$	12,580		$	302		$	12,907

Fair Value
Total fair value of financial instruments with foreign currency exchange rate risk: asset	$	45		$	38
Total fair value of financial instruments with foreign currency exchange rate risk: (liability) asset							$	(9	)	$	6

Sensitivity Analysis
Potential change in fair values resulting from a 10% adverse change in quoted foreign currency exchange rates: loss	$	(54	)	$	(53	)	$	(6	)	$	(17	)

The Company’s current financing arrangements and facilities include approximately ~~$18.7~~$18.1 billion of outstanding fixed-rate debt and, at the YES Network and STAR India, approximately ~~$1.2~~$1.1 billion and $156 million, respectively, of outstanding variable-rate bank debt, before adjustments for unamortized discount and debt issuance costs.

Fixed and variable-rate debts are impacted differently by changes in interest rates. A change in the interest rate or yield of fixed-rate debt will only impact the fair market value of such debt, while a change in the interest rate of variable-rate debt will impact interest expense, as well as the amount of cash required to service such debt. As of December 31, ~~2017,~~2018, substantially all of the Company's financial instruments with exposure to interest rate risk were denominated in U.S. dollars. Information on financial instruments with exposure to interest rate risk is presented below:

	As of December 31, 2017			As of June 30, 2017			As of December 31, 2018			As of June 30, 2018
	(in millions)						(in millions)
Fair Value
Borrowings: liability^(a)	$	(24,573	)	$	(23,853	)	$	(22,809	)	$	(22,591	)
Interest rate swaps: asset^(b)	5			1				6			8

Total fair value of financial instruments with exposure to interest rate risk: liability	$	(24,568	)	$	(23,852	)
Total fair value of financial instruments with exposure to interest rate risk: liability^(a)							$	(22,803	)	$	(22,583	)

Sensitivity Analysis
Potential change in fair values resulting from a 10% adverse change in quoted interest rates: loss	$	(831	)	$	(859	)	$	(856	)	$	(882	)

The Company has common stock investments in publicly traded companies that are subject to market price volatility. ~~These investments principally represent the Company’s investment in an equity method affiliate.~~ Information on the Company’s investments with exposure to stock price risk is presented below:

	As of December 31, 2017			As of June 30, 2017			As of December 31, 2018			As of June 30, 2018
	(in millions)						(in millions)
Fair Value
Total fair value of common stock investments(a)	$	9,509		$	8,713		$	185		$	13,241

Sensitivity Analysis
Potential change in fair values resulting from a 10% adverse change in quoted market prices: loss^(a)	$	(951	)	$	(871	)	$	(19	)	$	(1,324	)

See Note 5 – Fair Value to the accompanying Unaudited Consolidated Financial Statements of Twenty-First Century Fox under the heading “Concentrations of Credit Risk”.

The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange ~~Act)~~Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this quarterly report. Based on such evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such period, the Company’s disclosure controls and procedures were effective in recording, processing, summarizing and reporting on a timely basis, information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act and were effective in ensuring that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

There has been no change in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the Company’s second quarter of fiscal ~~2018~~2019 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

The Company and certain of its current and former employees have been subject to allegations of sexual harassment and discrimination and racial discrimination relating to alleged misconduct at the Company’s ~~Fox~~FOX News ~~Channel~~channel business. The Company has ~~settled some~~resolved many of these claims and is contesting other claims in litigation. The Company has also received regulatory and investigative inquiries relating to these matters. To date, none of the amounts paid in settlements or reserved for pending or future claims, is individually or in the aggregate, material to the Company. ~~Due to the early stage of these matters, the~~The amount of liability, if any, that may result from these or related matters cannot be estimated at this time. However, the Company does not currently anticipate that the ultimate resolution of any such pending matters will have a material adverse effect on its consolidated financial condition, future results of operations or liquidity.

On ~~November 20, 2017,~~July 9, 2018, the Company received notice of a complaint filed July 6, 2018 by Robert Weiss, a purported stockholder of the Company, on behalf of himself and all others similarly situated, against the Company and the Company’s Board of Directors. The purported class action lawsuit was filed in the District of Delaware and is captioned Weiss v. Twenty-First Century Fox, Inc. et al., No. 18-1007 (D. Del.). The complaint alleges, among other things, that the Company and the Company’s Board of Directors violated Sections 14(a) and 20(a) of the Exchange Act, 15.U.S.C. §§ 78n(a), 78t(a), and SEC Rule 14a-9, 17 C.F.R. 240.14a-9. Specifically, Mr. Weiss alleges that material information concerning various aspects of the transactions has been omitted or misrepresented. On July 11, 2018, purported Company stockholder Robert Lowinger, on behalf of himself and all others similarly situated, filed a complaint in the Southern District of New York alleging, among other things, that the Company and the Company’s Board of Directors violated Sections 14(a) and 20(a) of the Exchange Act, 15.U.S.C. §§ 78n(a), 78t(a), and SEC Rule 14a-9, 17 C.F.R. 240.14a-9. The case is captioned Lowinger v. Twenty-First Century Fox, Inc. et al., No. 18-6261 (S.D.N.Y.). Specifically, Mr. Lowinger alleges that material information concerning various aspects of the transactions has been omitted or misrepresented. On July 16, 2018 and July 17, 2018, respectively, purported Company stockholders Melvin Gross and Max Federman, on behalf of themselves and all others similarly situated, filed complaints in the District of Delaware alleging, among other things, that the Company and the Company’s Board of Directors violated Sections 14(a) and 20(a) of the Exchange Act, 15.U.S.C. §§ 78n(a), 78t(a), and SEC Rule 14a-9, 17 C.F.R. 240.14a-9. The cases are captioned Gross v. Twenty-First Century Fox, Inc. et al., No. 18-1046 (D. Del.) and Federman v. Twenty-First Century Fox, Inc. et al., No. 18-1061 (D. Del.), respectively. Both Messrs. Gross and Federman allege that material information concerning various aspects of the transactions has been omitted or misrepresented. On July 17, 2018 purported Company stockholder Belle Cohen, individually and on behalf of all others similarly situated, filed a complaint in the Southern District of New York captioned Cohen v. Twenty-First Century Fox, Inc. et al., No. 18-6462 (S.D.N.Y.). The complaint alleges, among other things, that the Company and the Company board violated Sections 14(a) and 20(a) of the Exchange Act, 15.U.S.C. §§ 78n(a), 78t(a), and SEC Rule 14a-9, 17 C.F.R. 240.14a-9 by omitting or misrepresenting material information concerning various aspects of the transactions.

Through these actions, the plaintiffs sought to enjoin the July 27, 2018 special meeting of the Company’s stockholders. As of October 17, 2018, all of the actions have been voluntarily dismissed.

On October 24, 2018, a stockholder of the Company filed a derivative ~~action in the Court of Chancery~~lawsuit against K. Rupert Murdoch, James R. Murdoch, Lachlan K. Murdoch, members of the ~~State of Delaware captioned~~ ~~City of Monroe Employees’ Retirement System v. Rupert Murdoch, et al., C.A. No. 2017-0833-AGB. The lawsuit named as defendants all directors~~Compensation Committee, and certain other executives of the Company ~~and~~under the ~~Estate of Roger Ailes (the “Ailes Estate”)~~caption Brokerage Jamie Goldenberg Komen Rev Tru U/A 06/10/08 v. Breyer et al., ~~and named~~C.A. No. 2018-0773 (Del. Ch.).

The complaint alleges that (1) the ~~Company as a nominal defendant. The plaintiff alleged that the directors of the Company and Rupert Murdoch as a purported controlling stockholder~~Compensation Committee members breached their fiduciary duties by approving a special grant of Retention RSUs to certain executives in connection with the Transaction and approving the modification of performance stock unit awards granted in August 2015 to provide for a payout at target level (the “Modification”); (2) the other defendants (the "Recipient Defendants") breached their fiduciary duties in proposing, and accepting the benefits of, the Retention RSUs and the Modification; (3) the Recipient Defendants have been unjustly enriched at the expense of the Company and FOX; and (4) the Compensation Committee committed waste.

The plaintiff seeks, among other things, ~~failing~~an order: (1) rescinding the Retention RSUs, the Modification, and any and all shares issued thereunder; (2) granting an award of damages in favor of the Company; (3) awarding damages, rescissory damages, and equitable relief as necessary; and (4) awarding the plaintiff attorneys' fees and costs. On December 17, 2018, defendants filed a motion to ~~properly oversee~~dismiss the ~~work environment at Fox News.~~complaint. The ~~plaintiff also brought claims of breach of fiduciary duty and unjust enrichment against the Ailes Estate.~~

~~On November 20, 2017, the parties reached an agreement to settle~~Company believes that the lawsuit is without merit, and filed a Stipulation and Agreement of Settlement, Compromise, and Release with the Court (the “Settlement Agreement”). Pursuant to the terms of the Settlement Agreement, the parties agreed that the director defendants and the Ailes Estate would cause their insurers to make a payment in the amount of $90 million to the Company, less any attorneys’ fees and expenses awarded by the Court to the plaintiff’s counsel. In addition to the payment to the Company, the Settlement Agreement provides that the Company shall put in place governance and compliance enhancements, including the creation of the Fox News Workplace Professionalism and Inclusion Council, as set forth in the Non-Monetary Relief agreement agreed to by the parties. These governance and compliance enhancements shall remain in effect for five years. On November 28, 2017, the Court issued a Scheduling Order which, among other things, set the settlement hearing for February 9, 2018, and approved the forms of the notices to stockholders, which were disseminated in accordance with the Scheduling Order.it will vigorously defend against all claims.

Prospective investors should consider carefully the risk factors set forth below before making an investment in the Company’s securities.

The ~~proposed Disney~~ Transaction may cause disruption in the Company’s business.

On ~~December 13, 2017,~~June 20, 2018, the Company entered into the Amended and Restated Merger Agreement with Disney, ~~pursuant~~which amends and restates in its entirety the Agreement and Plan of Merger that the Company entered into with Disney in December 2017. Pursuant to ~~which~~the Amended and Restated Merger Agreement, the Company will, after completing the FOX Separation and the FOX Distribution, ~~of New Fox,~~ become a wholly-owned subsidiary of New Disney (see Note 2 – Acquisitions, Disposals and Other Transactions to the accompanying Unaudited Consolidated Financial Statements of Twenty-First Century Fox under the heading “Disney Transaction/Distribution of ~~New Fox”~~FOX” for further details). The Amended and Restated Merger Agreement generally requires the Company to operate its business in the ordinary course pending consummation of the ~~proposed merger~~Mergers and restricts the Company, without Disney’s consent, from taking certain specified actions until the ~~Disney~~ Transaction is ~~completed~~consummated or the Amended and Restated Merger Agreement is terminated, including making certain acquisitions and divestitures, entering into certain contracts, incurring certain indebtedness and expenditures, paying dividends in excess of certain thresholds, and repurchasing or issuing securities outside of existing equity award programs. These restrictions may affect the Company’s ability to execute its business strategies and attain its financial and other goals and may impact its financial condition, results of operations and cash flows.

In connection with the pending ~~Disney~~ Transaction, current and prospective employees of the Company may experience uncertainty about their future roles with the Company (and Disney) or ~~New Fox~~FOX following the ~~completion~~consummation of the ~~Disney~~ Transaction, which may materially adversely affect the ability of the Company to attract, retain and motivate key personnel while the ~~Disney~~ Transaction is pending. Despite the Company’s retention planning and programs that the Company has and will implement, key employees may depart because of issues relating to the uncertainty and difficulty of integration with Disney and the ~~New Fox~~FOX Separation and establishment of ~~New Fox,~~FOX, or a desire not to remain with the Company (and Disney) or ~~New Fox~~FOX following the ~~completion~~consummation of the ~~Disney~~ Transaction. Accordingly, no assurance can be given that the Company will be able to attract and retain key employees to the same extent that the Company has been able to in the past.

The proposed ~~Disney~~ Transaction further could cause disruptions to the Company’s business or business relationships (including the business to be conducted by, and business relationships of, ~~New Fox~~FOX after the consummation of the ~~transactions)~~Transaction), which could have an adverse impact on the Company’s businesses, financial condition, results of ~~operations.~~operations or prospects. In addition, the risk, and adverse effect, of such disruptions could be exacerbated by a delay in the consummation of the Transaction or a termination of the Amended and Restated Merger Agreement. Parties with which the Company has business relationships may experience uncertainty as to the future of such relationships and may delay or defer certain business decisions, seek alternative relationships with third parties or seek to alter their present business relationships with the Company. Parties with whom the Company otherwise may have sought to establish business relationships may seek alternative relationships with third parties.

The pursuit of the ~~Disney~~proposed Transaction and the preparation for both the integration with Disney and the establishment of ~~New Fox~~FOX may place a significant burden on the Company’s management and internal resources. The diversion of management’s attention away from day-to-day business concerns could adversely affect the Company’s financial results.

The Company has incurred and expects to continue to incur significant costs, expenses and fees for professional services and other transaction costs in connection with the ~~Disney~~ Transaction. The substantial majority of these costs will be non-recurring expenses relating to the ~~Disney~~ Transaction, including costs relating to the ~~New Fox~~FOX Separation, and many of these costs are payable regardless of whether or not the ~~Disney~~ Transaction is consummated. The Company ~~also could be~~is currently subject to certain litigation related to the proposed ~~Disney~~ Transaction as described in Item 1 – Legal Proceedings, and the Company could be subject to additional litigation, which could result in significant costs and expenses. Even if the proposed Transaction is not consummated, these risks may materialize and may adversely affect the Company's businesses, financial condition, financial results and stock price.

Failure to ~~complete~~consummate the ~~Disney~~ Transaction in a timely manner or at all could negatively impact the market price of the Company’s common stock, as well as the Company’s future business and its financial condition, results of operations and cash flows.

The Company currently anticipates the ~~Disney~~ Transaction will be ~~completed within 12-18 months after December 13, 2017,~~consummated in the first half of calendar year 2019, but it cannot be certain when or if the conditions for the ~~Disney~~ Transaction will be satisfied or (if permissible under applicable law) waived. The ~~Disney~~ Transaction cannot be ~~completed~~consummated until the conditions to closing are satisfied or (if permissible under applicable law) waived, including (i) ~~the adoption of the Merger Agreement by the requisite vote of the Company’s stockholders and the approval of the stock issuance by the requisite vote of Disney stockholders, (ii)~~

receipt of certain required governmental approvals and consents, ~~(iii)~~(ii) receipt by the Company of a surplus and solvency opinion with respect to the ~~New Fox~~FOX Separation and the cash dividend in connection with the ~~Disney~~ Transaction, (iv) effectiveness of registration statements with respect to the New Fox Distribution and the issuance of Disney shares in connection with the Disney Transaction, (v) authorization of Disney and New Fox shares for listing on NYSE or NASDAQ, as applicable, (vi)(iii) the consummation of the ~~New Fox~~FOX Separation and Distribution, ~~(vii) receipt of a tax ruling from the Australian Taxation Office, (viii)~~(iv) receipt of certain tax opinions by each of the Company and Disney ~~including a tax opinion regarding~~with respect to the ~~tax-free~~ treatment of the ~~Disney~~transactions under U.S. and Australian tax laws, including a legal opinion on the intended tax treatment of the Transaction ~~to the Company’s shareholders for U.S. federal income tax purposes~~ and ~~(ix)~~(v) the accuracy of the representations and warranties made by the Company or Disney, as applicable, in the Amended and Restated Merger Agreement. The obligation of Disney to ~~complete~~consummate the ~~Disney~~ Transaction is also subject to, among other conditions, the absence of regulatory authorities requiring Disney to take certain ~~regulatory remedies.~~actions.

The satisfaction of the required conditions could delay the ~~completion~~consummation of the ~~Disney~~ Transaction for a significant period of time or prevent it from occurring. Further, there can be no assurance that the conditions to the closing of the ~~Disney~~ Transaction will be satisfied or waived or that the ~~Disney~~ Transaction will be ~~completed.~~consummated.

In the event that the ~~Disney~~ Transaction is not ~~completed~~consummated for any reason, (i) the holders of the Company’s common stock will not receive any consideration for their shares of the Company’s common stock in connection with the proposed ~~Disney~~ Transaction and (ii) the ~~New Fox~~FOX Separation and Distribution of ~~New Fox~~FOX will not occur and the holders of the Company’s common stock will not receive shares in ~~New Fox.~~FOX. Instead, the Company will remain an independent public company and holders of the Company’s common stock will continue to own their shares of the Company’s common stock.

Additionally, if the ~~Disney~~proposed Transaction is not consummated in a timely manner or at all, the Company’s ongoing business may be adversely affected as follows:

If the ~~Disney~~ Transaction is not ~~completed,~~consummated, there can be no assurance that these risks will not materialize and will not materially adversely affect the Company’s stock price, business, financial conditions, results of operations or cash flows.

In order to ~~complete~~consummate the ~~Disney~~ Transaction, Disney and the Company must obtain certain governmental approvals, and if such approvals are not granted or are granted with conditions, ~~completion~~consummation of the ~~Disney~~ Transaction may be jeopardized or the anticipated benefits of the ~~Disney~~ Transaction could be reduced.

Although Disney and the Company have agreed to use reasonable best efforts, subject to certain limitations, to make certain governmental filings and obtain the ~~required~~ governmental approvals or ~~expiration~~expirations or earlier termination of ~~relevant~~applicable waiting periods, as the case may be, there can be no assurance that the ~~relevant~~applicable waiting periods will expire or be terminated or that the ~~relevant~~applicable approvals will be obtained. As a condition to approving the ~~Disney~~ Transaction, governmental authorities may impose conditions, terms, obligations or restrictions or require divestitures or place restrictions on the conduct of the combined company's business after ~~completion~~consummation of the ~~Disney~~ Transaction, including those which Disney may not be required to accept pursuant to the terms of the Amended and Restated Merger Agreement. Disney has agreed to accept certain restrictions on certain of its and the Company’s assets if and to the extent necessary to obtain the governmental regulatory approvals required to consummate the Transaction, as described in the Amended and Restated Merger Agreement. There can be no assurance that regulators will not impose conditions, terms, obligations or restrictions and that such conditions, terms, obligations or restrictions will not have the effect of delaying or preventing ~~completion~~consummation of the ~~Disney~~ Transaction or imposing additional material costs on or materially limiting the revenues of the combined company following the ~~Disney~~ Transaction, or otherwise adversely affecting, including to a material extent, the combined company's businesses and results of operations after ~~completion~~consummation of the ~~Disney~~ Transaction. If the Company orand Disney isare required to divest assets or businesses, there can be no assurance that ~~the Company or Disney~~they will be able to negotiate such divestitures expeditiously or on favorable terms or that the governmental authorities will approve the terms of such

divestitures. The Company can provide no assurance that these conditions, terms, obligations or restrictions will not result in the abandonment of the ~~Disney~~ Transaction.

~~The Merger Agreement contains provisions that could discourage a potential competing acquirer of the Company.~~

The Merger Agreement contains “no shop” provisions that, subject to limited exceptions, restrict the Company’s ability to solicit, initiate, or knowingly encourage or facilitate competing third-party proposals for the acquisition of the Company’s stock or assets. In addition, before the Company’s Board of Directors withdraws, qualifies or modifies its recommendation of the proposed merger with Disney or terminates the Merger Agreement to enter into a superior proposal, Disney generally has an opportunity to offer to modify the terms of the proposed Disney Transaction. In certain circumstances, upon termination of the Merger Agreement, the Company will be required to pay a termination fee of approximately $1.5 billion.

These provisions could discourage a potential third-party that might have an interest in making a competing proposal, even if such third-party were prepared to pay consideration with a higher per share cash or market value than the market value proposed to be received or realized in the Disney Transaction, or might otherwise result in a potential third-party proposing to pay a lower price to the Company’s stockholders than it might otherwise have proposed to pay because of the added expense of the termination fee that may become payable in certain circumstances.

If the Merger Agreement is terminated and the Company decides to seek another business combination, it may not be able to negotiate or consummate a transaction with another party on terms comparable to, or better than, the terms of the Merger Agreement.

The Sky Acquisition Involves a Number of Risks, including, among others, the Risk that the Sky Acquisition is Not Completed on a Timely Basis, or at All, and Risks Associated with the Company’s Use of a Significant Portion of its Cash and Taking on Significant Additional Indebtedness.

The Sky Acquisition remains subject to certain customary closing conditions, including approval by the UK Secretary of State for Digital, Culture, Media and Sport and the requisite approval of Sky shareholders unaffiliated with the Company, and the scheme of arrangement becoming effective by October 15, 2018. The Sky Acquisition has received unconditional clearance by all competent competition authorities including the European Commission, and has been cleared on public interest and plurality grounds in all of the markets in which Sky operates outside of the UK, including Austria, Germany, Italy and the Republic of Ireland.

The Company cannot predict with certainty whether and when any of the outstanding conditions will be satisfied. If the Sky Acquisition does not receive, or timely receive, the required regulatory approvals and clearances and requisite approval of Sky shareholders unaffiliated with the Company, any delay or failure to complete the acquisition and the acquisition process may cause uncertainty or other negative consequences, including, in the event that certain regulatory approvals are not obtained prior to August 15, 2018, or in certain other circumstances described in the Co-Operation Agreement, the payment of a £200 million break fee payable by the Company, that may materially and adversely affect the Company’s business, financial condition and results of operations and the price per share for the Company’s common stock could be negatively impacted. If regulatory authorities seek to impose any material conditions in connection with granting any approvals required to complete the Sky Acquisition, our business and results of operations may be adversely affected.

In addition, the Sky Acquisition will require the use of a significant portion of the Company’s cash and increase the amount of debt on the Company’s balance sheet leading to substantial additional interest expense. These factors could limit the Company’s flexibility to respond to changing business and economic conditions and reduce funds available for working capital, capital expenditures, acquisitions and other general corporate purposes. If the Sky Acquisition is completed but the financial performance of the Company after the acquisition does not meet management’s current expectations, the Company’s ability to reduce its level of indebtedness may be adversely impacted. More information regarding risks related to financing the Sky Acquisition and paying the consideration to the Sky shareholders in Pounds Sterling is set forth below in the risk factor describing the Company’s exposure to risks associated with weak domestic and global economic conditions and increased volatility and disruption in the financial markets and in the risk factor describing the adverse effect that fluctuations in foreign exchange rates could have on the Company’s cash flows and results of operations.

The Company Must Respond to Changes in Consumer Behavior as a Result of New Technologies in Order to Remain Competitive.

Technology, particularly digital technology used in the entertainment industry, continues to evolve rapidly, leading to alternative methods for the delivery and storage of digital content. These technological advancements have driven changes in consumer behavior and have empowered consumers to seek more control over when, where and how they consume digital content. Content owners are increasingly delivering their content directly to consumers over the Internet and innovations in distribution platforms have enabled consumers to view such Internet-delivered content on televisions and portable devices. The growth of direct to consumer video offerings, including video-on-demand, downloadable content and simultaneous live streaming of broadcast content including on social media, offerings by cable providers of smaller packages of programming to customers at price points lower than traditional cable distribution offerings and the trend of consumers “cord-cutting” or cancelling their multi-channel video programming distributors (“MVPD”) subscriptions could adversely affect demand for our cable channels. Enhanced Internet capabilities and other new media may reduce television viewership, the demand for home entertainment and the desire to see motion pictures in theaters, which could negatively affect the Company’s revenues. In addition, increased video consumption through streaming apps, ~~and~~ digital MVPD services and social media with no advertising or less advertising than on video programming networks, time shifted viewing of television programming and the use of DVRs to skip advertisements could also negatively affect the Company’s advertising revenues. There is a risk that the Company’s responses to these changes and strategies to remain competitive, or failure to effectively anticipate or adapt to new market changes, could adversely affect our business. The Company’s failure to protect and exploit the value of its content, while responding to and developing new technology and business models to take advantage of advancements in technology and the latest consumer preferences, could have a significant adverse effect on the Company’s businesses, asset values and results of operations.

Acceptance of the Company’s Content, Including Its Films and Television Programming, by the Public is Difficult to Predict, Which Could Lead to Fluctuations in Revenues.

Feature film and television production and distribution are speculative businesses since the revenues derived from the production and distribution of a feature film or television series depend primarily upon its acceptance by the public, which is difficult to predict. The commercial success of a feature film or television program also depends upon the quality and acceptance of other competing films and television programming released into the marketplace at or near the same time, the availability of a growing number of alternative forms of entertainment and leisure time activities, general economic conditions and their effects on consumer spending and other tangible and intangible factors, all of which can change and cannot be predicted with certainty. Further, the theatrical success of a feature film and the audience ratings for a television program are generally key factors in generating revenues from other distribution channels, such as home entertainment and premium pay television, with respect to feature films, and content licensing and syndication, with respect to television programming. In addition, a decline in the ratings or popularity of the Company’s entertainment, sports or news television programming, which could be a result of the loss of talent or rights to certain programming, could adversely affect advertising revenues in the near term and, over a longer period of time, adversely affect affiliate revenues.

The Company competes with other media companies for content to achieve large audiences and distribution relationships, and to generate advertising revenue. The Company also competes for distribution on various multichannel video programming distributors and other third-party digital platforms. The Company’s ability to attract viewers and advertisers and obtain favorable distribution depends in part on its ability to provide popular television programming and motion pictures and adapt to new technologies and distribution platforms, which are increasing the number of media and entertainment choices available to audiences. Competition for audiences and/or advertising comes from: broadcast television networks; cable television systems and networks; film studios; Internet-delivered free, advertising supported, subscription and rental services; other sources of information and entertainment; radio; print and other media. Increased competition from additional entrants into the market for development and production of original programming may increase our costs of development and production including obtaining creative and technical personnel. Increased competition in the acquisition of programming may also affect the scope of rights we are able to acquire and the cost of such rights, and the value of the rights we acquire or retain cannot be predicted with certainty in the future. The Company cannot be assured that it will be able to compete successfully in the future against existing or potential competitors, or that competition or consolidation in the marketplace will not have a material adverse effect on its business, financial condition or results of operations.

The Inability to Renew Sports Programming Rights Could Cause the Company’s Affiliate and Advertising Revenue to Decline Significantly in any Given Period or in Specific Markets.

The sports rights contracts between the Company, on the one hand, and various professional sports leagues and teams, on the other, have varying duration and renewal terms. As these contracts expire, renewals on favorable terms may be sought; however, third parties may outbid the current rights holders for the rights contracts. In addition, professional sports leagues or teams may create their own networks or the renewal costs could substantially exceed the original contract cost. The loss of rights or renewal on less favorable terms could impact the extent of the sports coverage offered by the Company and its affiliates, as it relates to the FOX Network, and could adversely affect the Company’s advertising and affiliate revenues. Upon renewal, the Company’s results could be adversely affected if escalations in sports programming rights costs are unmatched by increases in advertising rates and, in the case of cable networks, subscriber fees.

A Decline in Advertising Expenditures Could Cause the Company’s Revenues and Operating Results to Decline Significantly in any Given Period or in Specific Markets.

The Company derives substantial revenues from the sale of advertising on or in its television stations and broadcast and cable networks. Expenditures by advertisers tend to be cyclical, reflecting overall economic conditions, as well as budgeting and buying patterns. A decline in the economic prospects of advertisers or the economy in general could alter current or prospective advertisers’ spending priorities. Demand for the Company’s products is also a factor in determining advertising rates. For example, ratings points for the Company’s television stations and broadcast and cable networks are factors that are weighed when determining advertising rates, and with respect to the Company’s television stations and broadcast and television networks, when determining the affiliate rates received by the Company. In addition, newer technologies, including new video formats, streaming and downloading capabilities via the Internet, video-on-demand, personal video recorders and other devices and technologies are increasing the number of media and entertainment choices available to audiences. Some of these devices and technologies allow users to view television or motion pictures from a remote location or on a time-delayed basis and provide users the ability to fast-forward, rewind, pause and skip programming and advertisements. These technological developments could affect the attractiveness of the Company’s offerings to viewers, advertisers and/or distributors. Failure to effectively anticipate or adapt to emerging technologies or changes in consumer behavior could have an adverse effect on our business. Further, a decrease in advertising expenditures, reduced demand for the Company’s offerings or the inability to obtain market ratings that adequately measure demand for the Company’s content on personal video recorders and mobile devices could lead to a reduction in pricing and advertising spending, which could have an adverse effect on the Company’s businesses and assets.

The Loss of Carriage Agreements Could Cause the Company’s Revenue and Operating Results to Decline Significantly in any Given Period or in Specific Markets.

The Company’s broadcast stations and cable networks maintain affiliation and carriage arrangements that enable them to reach a large percentage of households through cable ~~and~~television systems, direct broadcast satellite ~~households across the United States.~~operators, telecommunications companies and online video distributors. The loss of a significant number of these arrangements or the loss of carriage on basic programming tiers could reduce the distribution of the Company’s broadcast stations and cable networks, which may adversely affect those networks’ revenues from affiliate fees and their ability to sell national and local advertising time. Further, the loss of favorable packaging, positioning, pricing or other marketing opportunities with any distributor could reduce revenues from subscriber fees. Also, consolidation among MVPDs and increased vertical integration of such distributors into the cable or broadcast network business have provided more leverage to these distributors and could adversely affect the Company’s ability to maintain or obtain distribution for its network programming or distribution and/or marketing of its subscription program services on favorable or commercially reasonable terms, or at all. The Company is dependent upon the maintenance of affiliation agreements with third party owned television stations and there can be no assurance that these affiliation agreements will be renewed in the future on terms acceptable to the Company. The loss of a significant number of these affiliation arrangements could reduce the distribution of the FOX Network and MyNetworkTV and adversely affect the Company’s ability to sell national advertising time.

The Company Relies on Network and Information Systems and Other Technology Whose Degradation, Failure or Misuse, Could Cause a Disruption of Services or Improper Disclosure of Personal Data, Business Information, Including Intellectual Property, or Other Confidential Information, Resulting in Increased Costs or Loss of Revenue.

Network and information systems and other technologies, including those related to the Company’s network management, are important to its business activities. Network and information systems-related events, such as computer hacking and phishing, theft, computer viruses, ransomware, worms or other destructive or disruptive software, process breakdowns, denial of service attacks, malicious social engineering or other malicious activities, or any combination of the foregoing, as well as power outages, natural or other disasters (including extreme weather), terrorist activities or human

error that may affect such systems, could result in disruption of our services or improper disclosure of personal data, business information, including intellectual property, or other confidential information. In recent years, there has been a rise in the number of sophisticated cyber attacks on network and information systems, and as a result, the risks associated with such an event continue to increase. The Company has experienced, and expects to continue to be subject to, cybersecurity threats and incidents, none of which has been material to the Company to date. While we continue to develop, implement and maintain security measures seeking to prevent unauthorized access to or misuse of

our network and information systems, such efforts may not be successful in preventing these events from occurring given that the techniques used to access, disable or degrade service, or sabotage systems change frequently. The development and maintenance of these measures is costly and requires ongoing monitoring and updating as technologies change and efforts to overcome security measures become more sophisticated. Significant security breaches, such as misappropriation, misuse, alteration, theft, loss, leakage, falsification, accidental or premature release, or otherwise improper disclosure of information maintained in the Company’s information systems and networks or those of our vendors, including financial, personal, confidential and proprietary information relating to personnel, customers, vendors and our business, including our intellectual property, or a degradation or interruption in the technologies and networks that facilitate content distribution could result in a disruption of our operations, customer or advertiser dissatisfaction, damage to our reputation or brands, regulatory investigations, claims, lawsuits or loss of customers or revenue. In addition, the Company may be subject to liability under relevant contractual obligations and laws and regulations protecting personal data and privacy, ~~and~~ may ~~require us~~be required to expend significant resources to remedy any such security ~~breach.~~breach, and while the Company maintains insuranceto assist in the cost of recovery in the event of a security breach, the Company may not have adequate insurance coverage to compensate it for any losses that may occur.

Technological Developments May Increase the Threat of Content Piracy and Signal Theft and Limit the Company’s Ability to Protect Its Intellectual Property Rights.

Content piracy and signal theft present a threat to the Company’s revenues from products and services, including, but not limited to, films, television shows, cable and other programming, as well as pre-release content. The Company seeks to limit the threat of content piracy as well as cable and direct broadcast satellite programming signal theft; however, policing unauthorized use of the Company’s products and services and related intellectual property is often difficult and the steps taken by the Company may not in every case prevent infringement. Developments in technology, including digital copying, file compression technology, growing penetration of high-bandwidth Internet connections, increased availability and speed of mobile data networks, and new devices and applications that enable unauthorized access to content, increase the threat of content piracy by making it easier to access, duplicate, widely distribute and store high-quality pirated material. In addition, developments in software or devices that circumvent encryption technology and the falling prices of devices incorporating such technologies increase the threat of unauthorized use and distribution of direct broadcast satellite programming signals and the proliferation of user-generated content sites and live and stored video streaming sites, which deliver unauthorized copies of copyrighted content, including those emanating from other countries in various languages, may adversely impact the Company’s businesses. The proliferation of unauthorized distribution and use of the Company’s content could have an adverse effect on the Company’s businesses and profitability because it reduces the revenue that the Company could potentially receive from the legitimate sale and distribution of its products and services.

The Company has taken, and will continue to take, a variety of actions to combat piracy and signal theft, both individually and, in some instances, together with industry associations. However, protection of the Company’s intellectual property rights is dependent on the scope and duration of the Company’s rights as defined by applicable laws in the United States and abroad and the manner in which those laws are construed. If those laws are drafted or interpreted in ways that limit the extent or duration of the Company’s rights, or if existing laws are changed, the Company’s ability to generate revenue from intellectual property may decrease, or the cost of obtaining and enforcing our rights may increase. A change in the laws of one jurisdiction may also have an impact on the Company’s overall ability to protect its intellectual property rights across other jurisdictions. In addition, many parts of the world where piracy is prevalent lack effective copyright and other legal protections or enforcement measures. There can be no assurance that the Company’s efforts to enforce its rights and protect its products, services and intellectual property will be successful in preventing content piracy or signal theft. Further, while piracy and the proliferation of piracy-enabling technology tools continue to escalate, if any U.S. or international laws intended to combat piracy and protect intellectual property are repealed or weakened or not adequately enforced, or if the applicable legal systems fail to evolve and adapt to new technologies that facilitate piracy, we may be unable to effectively protect our rights and the value of our intellectual property may be negatively impacted, and our costs of enforcing our rights could increase.

Fluctuations in Foreign Exchange Rates Could Have an Adverse Effect on the Company’s Cash Flows and Results of Operations.

The Company has significant operations in a number of foreign jurisdictions and certain of the Company’s operations are conducted in foreign currencies. The Company has acquired and may in the future acquire assets and businesses using foreign currencies. The value of these currencies fluctuates relative to the U.S. dollar. As a result, the Company is exposed to exchange rate fluctuations, which could have an adverse effect on its cash flows and results of operations in a given period or in specific markets. ~~As part~~The U.K. began the formal two-year process of exiting the ~~Sky Acquisition,~~European Union in March 2017, which could lead to additional political and economic instability that may contribute to volatility in the ~~Company will be obligated to pay the Sky shareholders cash consideration in~~value of Pounds Sterling ~~thereby increasing the Company’s exposure to~~and other foreign exchange ~~rate fluctuations for Pounds Sterling.~~markets. Even though the Company uses foreign currency derivative instruments to hedge certain exposures to foreign currency exchange rate risks, ~~and has purchased a foreign currency exchange option to limit its~~

~~foreign currency exchange rate risk in connection with the Sky Acquisition,~~ the use of such derivative instruments may not be effective in reducing the adverse financial effects of unfavorable movements in foreign exchange rates. In addition, countries where we have operations ~~including in Latin America,~~ may be classified in the future to be highly inflationary economies, requiring special accounting and financial reporting treatment for such operations. The Argentine Peso has been designated highly inflationary and was accounted for as such starting July 1, 2018.

In a variety of the Company’s businesses, the Company and its partners engage the services of writers, directors, actors and other talent, trade employees and others who are subject to collective bargaining agreements, including employees of the Company’s film and television studio operations. If the Company or its partners are unable to renew expiring collective bargaining agreements, it is possible that the affected unions could take action in the form of strikes or work stoppages. Such actions, as well as higher costs in connection with these collective bargaining agreements or a significant labor dispute, could have an adverse effect on the Company’s business by causing delays in production or by reducing profit margins.

Changes in U.S. or Foreign Regulations May Have an Adverse Effect on the Company’s Business.

The Company is subject to a variety of U.S. and foreign regulations in the jurisdictions in which its businesses operate. In general, the television broadcasting and multichannel video programming and distribution industries in the United States are highly regulated by federal laws and regulations issued and administered by various federal agencies, including the ~~Federal Communications Commission (the “FCC”).~~FCC. The FCC generally regulates, among other things, the ownership of media, broadcast and multichannel video programming and technical operations of broadcast licensees. Our program services and online properties are subject to a variety of laws and regulations, including those relating to issues such as content regulation, user privacy and data protection, and consumer protection, among others. Further, the United States Congress, the FCC and state legislatures currently have under consideration, and may in the future adopt, new laws, regulations and policies regarding a wide variety of matters, including technological changes and measures relating to network neutrality, privacy and data security, which could, directly or indirectly, affect the operations and ownership of the Company’s U.S. media properties. Similarly, new laws or regulations or changes in interpretations of law or in regulations imposed by governments in other jurisdictions in which the Company, or entities in which the Company has an interest, operate could require changes in the operations or ownership of our media properties. ~~In addition, laws~~Laws in non-U.S. jurisdictions which regulate, among other things, licensing arrangements, local content requirements, carriage requirements regarding pricing and distribution, and limitations on advertising time, may impact the operations and results of our international businesses. In addition, the GDPR applies as of May 25, 2018 and will tighten regulation of the collection, use and security of personal data and will continue to restrict the trans-border flow of such data while increasing the potential fines for non-compliance. We have committed significant resources to ensure that we are in compliance with the GDPR but, particularly given the complexity of both the GDPR and our business, as well as the uncertainties that accompany new, comprehensive legislation, the GDPR could affect the operations and results of the Company’s businesses or result in claims despite our efforts.

In addition, changes in laws, regulations or the interpretations thereof in the U.S. and other jurisdictions in which the Company has operations could affect the Company’s results of operations.

U.S. Citizenship Requirements May Limit Common Stock Ownership and Voting Rights.

The Company owns broadcast station licensees in connection with its ownership and operation of U.S. television stations. Under U.S. law, no broadcast station licensee may be owned by a corporation if more than 25% of its stock is owned or voted by non-U.S. persons, their representatives, or by any other corporation organized under the laws of a foreign country. The Company’s Restated Certificate of Incorporation authorizes the Board of Directors to prevent, cure or mitigate the effect of stock ownership above the applicable foreign ownership threshold by taking any action including: refusing to permit any transfer of common stock to or ownership of common stock by a non-U.S. stockholder; voiding a

transfer of common stock to a non-U.S. stockholder; suspending rights of stock ownership if held by a non-U.S. stockholder; or redeeming common stock held by a non-U.S. stockholder. The Company is currently in compliance with applicable U.S. law and continues to monitor its foreign ownership based on its assessment of the information reasonably available to it, but it is not able to predict whether it will need to take action pursuant to its Restated Certificate of Incorporation. The FCC could review the Company’s compliance with applicable U.S. law in connection with its consideration of the Company’s renewal applications for licenses to operate the broadcast stations the Company owns.

We are subject to taxation in U.S. federal, state and local jurisdictions and many non-U.S. jurisdictions. Changes in tax laws, regulations, practices or the interpretations thereof could affect the Company’s results of operations. Judgment is required in evaluating and estimating our provision and accruals for taxes. In addition, transactions occur during the ordinary course of business or otherwise for which the ultimate tax determination is uncertain.

Our tax returns are routinely audited, tax-related litigation or settlements may occur, and U.S. or foreign jurisdictions may assess additional income tax liabilities against us. The final outcomes of tax audits, investigations, and any related litigation could result in materially different tax recognition from our historical tax provisions and accruals. These outcomes

could conflict with private letter rulings, opinions of counsel or other interpretations provided to the Company. If these matters are adversely resolved, we may be required to recognize additional charges to our tax provisions and pay significant additional amounts with respect to current or prior periods or our taxes in the future could increase, which could affect our operating results and financial condition.

In connection with the News Corp Separation, the Company received a private letter ruling from the IRS and an opinion from Hogan Lovells US LLP confirming the tax-free status of the distribution and related internal transactions for U.S. federal income tax purposes. Notwithstanding the private letter ruling and the opinion, the IRS could determine on audit that the distribution or the internal transactions should be treated as taxable transactions if it determines that any of these facts, assumptions or representations relied upon for the private letter ruling is not correct or has been violated. If these transactions are determined to be taxable, the Company would recognize gains on the internal reorganization and/or recognize gain in an amount equal to the excess of the fair market value of shares of the News Corp common stock distributed to our stockholders on the distribution date over our tax basis in such shares of our common stock. In addition, other tax authorities could determine on audit that the distribution or the related internal reorganizations should be treated as taxable transactions.

Under the terms of a tax sharing and indemnification agreement that we entered into in connection with the News Corp Separation, we are required to indemnify News Corp against U.S. consolidated and combined tax liabilities attributable to all tax periods or portions thereof prior to June 29, 2013. Disputes or assessments could arise during future audits by the IRS that could give rise to indemnification obligations under this agreement in amounts that we cannot quantify.

In addition, on December 22, 2017, the U.S. government enacted the Tax Act. The changes included in the Tax Act are broad and complex. As of December 31, 2017, we have not completed our analysis of the accounting for all the tax effects of the Tax Act. For the three and six months ended December 31, 2017, the Company recorded a provisional income tax benefit of $1.3 billion to adjust its net deferred tax liability position in accordance with the Tax Act. The final amount of the adjustment to the net deferred tax liability could be revised based on changes in interpretations of the Tax Act and any updates or changes to estimates based on additional information we obtain or analyze. The Company has not recorded a liability for the transition tax to a territorial tax system. The Company is continuing to gather and analyze information to determine the deemed unremitted earnings subject to the transition tax, some of which was not previously needed or not yet accumulated, and the related U.S. tax impacts. The Company will record a transition tax amount when it has received and analyzed the needed information sufficient to make a reasonable estimate. The SEC has issued guidance that would allow for a measurement period of up to one year after the enactment date of the Tax Act to finalize the recording of the related tax impacts. We currently anticipate finalizing and recording any resulting adjustments by the end of the Company’s current fiscal year ending June 30, 2018 and the adjustments could possibly be material.

The Company is Exposed to Risks Associated with Weak Domestic and Global Economic Conditions and Increased Volatility and Disruption in the Financial Markets.

The Company’s businesses, financial condition and results of operations may be adversely affected by weak domestic and global economic conditions. Factors that affect economic conditions include the rate of unemployment, the level of consumer confidence, ~~and~~ changes in consumer spending ~~habits.~~habits, political uncertainties and potential changes in trade relationships between the U.S. and other countries. The Company also faces risks, including currency volatility and the stability of global local economies, associated with the impact of weak domestic and global economic conditions on advertisers, affiliates, suppliers, wholesale distributors, retailers, insurers, theater operators and others with which it does business.

Increased volatility and disruptions in the financial markets could make it more difficult and more expensive for the Company to refinance outstanding indebtedness and obtain new financing, including financing for the Sky Acquisition. While the Company has entered into the Bridge Credit Agreement, we intend to obtain permanent financing in the capital markets to fund a portion of the purchase price for the Sky Acquisition in lieu of utilizing funds available under the Bridge Credit Agreement, but we cannot guarantee that the Company will obtain such permanent financing on terms that are acceptable to the Company or at all. If we are not successful in obtaining permanent financing due to market conditions or other factors and utilize funds under the Bridge Credit Agreement, we will incur significantly higher borrowing costs, which may have a significant adverse impact on our business. See Note 2 – Acquisitions, Disposals and Other Transactions to the accompanying Unaudited Consolidated Financial Statements of Twenty-First Century Fox under the heading “Sky Acquisition”.financing.

Disruptions in the financial markets can also adversely affect the Company’s lenders, insurers, customers and counterparties, including vendors, retailers and film co-financing partners. For instance, the inability of the Company’s counterparties to obtain capital on acceptable terms could impair their ability to perform under their agreements with the

Company and lead to negative effects on the Company, including business disruptions, decreased revenues and increases in bad debt expenses.

The Company Could Suffer Losses Due to Asset Impairment Charges for Goodwill, Intangible Assets and Programming.

In accordance with applicable generally accepted accounting principles, the Company performs an annual impairment assessment of its recorded goodwill and indefinite-lived intangible assets, including FCC licenses. The Company also continually evaluates whether current factors or indicators, such as the prevailing conditions in the capital markets, require the performance of an interim impairment assessment of those assets, as well as other investments and other long-lived assets. Any significant shortfall, now or in the future, in advertising revenue and/or the expected popularity of the programming for which the Company has acquired rights could lead to a downward revision in the fair value of certain reporting units. A downward revision in the fair value of a reporting unit, indefinite-lived intangible assets, investments or long-lived assets could result in an impairment and a non-cash charge would be required. Any such charge could be material to the Company’s reported net earnings.

Certain of Our Directors and Officers May Have Actual or Potential Conflicts of Interest Because of Their Equity Ownership in News Corp, and Certain of Our Officers and Directors May Have Actual or Potential Conflicts of Interest Because They Also Serve as Officers and/or on the Board of Directors of News Corp.

Certain of our directors and executive officers own shares of News Corp’s common stock, and the individual holdings may be significant for some of these individuals compared to their total assets. In addition, certain of our officers and directors also serve as officers and/or as directors of News Corp, including our Executive Chairmen K. Rupert Murdoch, who serves as News Corp’s Executive Chairman, and Lachlan K. Murdoch, who serves as News Corp’s Co-Chairman, and our Chief Executive Officer James Murdoch, who serves as a director of News Corp. This ownership or service to both companies may create, or may create the appearance of, conflicts of interest when these directors and officers are faced with decisions that could have different implications for News Corp and us. In addition to any other arrangements that the Company and News Corp may agree to implement, the Company and News Corp agreed that officers and directors who serve at both companies will recuse themselves from decisions where conflicts arise due to their positions at both companies.

~~Allegations of Misconduct at the Company’s Fox News Channel Business Unit Could Impact the Operations of the Business Unit.~~

The Company and certain of its current and former employees have been subject to allegations of sexual harassment and discrimination and racial discrimination related to alleged misconduct at the Company’s Fox News Channel business. The Company has settled some of these claims and is contesting other claims in litigation. We have also received regulatory and investigative inquiries. To date, none of the amounts paid in settlements or reserved for pending or future claims, is individually or in the aggregate, material to the Company.

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Delaware		26-0075658
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)
1211 Avenue of the Americas, New York, New York		10036
(Address of Principal Executive Offices)		(Zip Code)

Large accelerated filer	☒		Accelerated filer	☐
Non-accelerated filer	☐	~~(Do not check if a smaller reporting company)~~
Smaller reporting company	☐
Emerging growth company	☐

		Page
Part I. Financial Information
Item 1.	Financial Statements
	Unaudited Consolidated Statements of Operations for the three and six months ended December 31, ~~2017~~2018 and ~~2016~~2017	1
	Unaudited Consolidated Statements of Comprehensive Income for the three and six months ended December 31, 2018 and2017 ~~and 2016~~	2
	Consolidated Balance Sheets as of December 31, ~~2017~~2018 (unaudited) and June 30, ~~2017~~2018 (audited)	3
	Unaudited Consolidated Statements of Cash Flows for the six months ended December 31, ~~2017~~2018 and ~~2016~~2017	4
	Notes to the Unaudited Consolidated Financial Statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3239
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	4250
Item 4.	Controls and Procedures	4452
Part II. Other Information
Item 1.	Legal Proceedings	4553
Item 1A.	Risk Factors	4655
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	5563
Item 3.	Defaults Upon Senior Securities	5563
Item 4.	Mine Safety Disclosures	5563
Item 5.	Other Information	5563
Item 6.	Exhibits	5664
Signature		5766

	As of December 31, 2018			As of July 1, 2018
	(in millions)
Total receivables	$	9,118		$	8,553
Allowances for doubtful accounts		(176	)		(169	)

Total receivables, net		8,942			8,384
Less: current receivables, net		(8,083	)		(7,625	)

Non-current receivables, net	$	859		$	759

	As of December 31, 2018		As of July 1, 2018
	(in millions)
Current deferred revenue	$	855	$	791
Noncurrent deferred revenue	$	277	$	291

	June 30, 2018		Adoption of ASC 606 impact			July 1, 2018
	(in millions)
Current assets	$	19,333	$	491		$	19,824
Total assets		53,831		559	^(a)		54,390
Current liabilities		8,244		256			8,500
Total liabilities		32,269		323			32,592

	For the three months ended December 31, 2017 % Increase (Decrease)										For the six months ended December 31, 2017 % Increase
	Domestic				International			Consolidated			Domestic			International			Consolidated
Affiliate fees		12		%		13	%		12	%		11	%		12	%		12	%
Advertising		(3	)	%		14	%		4	%		-	%		12	%		5	%
Content and other		20		%		30	%		23	%		15	%		32	%		20	%
Total		10		%		15	%		11	%		9	%		14	%		11	%

Rating Agency	Senior Debt	Outlook
Moody's^(a)	Baa1	Under review
Standard & Poor's^(a)	BBB+	Watch ~~developing~~positive


~~2.1~~4.1		~~Agreement and Plan of Merger,~~Seventeenth Supplemental Indenture, dated as of ~~December 13, 2017,~~October 22, 2018, to the Indenture, dated as of January 28, 1993, among ~~Twenty-First Century Fox, Inc., The Walt Disney~~the Company, ~~TWC Merger Enterprises 2 Corp.~~21CFA and ~~TWC Merger Enterprises 1, LLC~~U.S. Bank National Association, as trustee (Incorporated by reference to Exhibit ~~2.1~~4.1 to the Current Report of the Registrant on Form 8-K (File No. 001-32352) filed with the Securities and Exchange Commission on ~~December 15, 2017.~~October 22, 2018.) ±.

~~3.1~~4.2		Thirteenth Supplemental Indenture, dated as of October 22, 2018 to the Amended and Restated ~~By-laws~~Indenture, dated as March 24, 1993, among the Company, 21CFA and The Bank of ~~Twenty-First Century Fox, Inc.~~New York Mellon, as trustee (Incorporated by reference to Exhibit ~~3.1~~4.2 to the Current Report of the Registrant on Form 8-K (File No. 001-32352) filed with the Securities and Exchange Commission on ~~December 15, 2017.~~October 22, 2018.).

4.3		First Supplemental Indenture, dated as of October 22, 2018, to the Amended and Restated Indenture, dated as February 16, 2011, among the Company, 21CFA and The Bank of New York Mellon, as trustee (Incorporated by reference to Exhibit 4.3 to the Current Report of the Registrant on Form 8-K (File No. 001-32352) filed with the Securities and Exchange Commission on October 22, 2018.).

4.4		Indenture, dated as of January 25, 2019, by and among Fox Corporation, Twenty-First Century Fox, Inc., as guarantor, and The Bank of New York Mellon, as trustee (Incorporated by reference to Exhibit 4.1 to the Current Report of the Registrant on Form 8-K (File No. 001-32352) filed with the Securities and Exchange Commission on January 25, 2019.).

4.5		Form of Notes representing $750,000,000 principal amount of 3.666% Senior Notes due 2022, dated January 25, 2019 (Incorporated by reference to Exhibit 4.2 to the Current Report of the Registrant on Form 8-K (File No. 001-32352) filed with the Securities and Exchange Commission on January 25, 2019.).

4.6		Form of Notes representing $1,250,000,000 principal amount of 4.030% Senior Notes due 2024, dated January 25, 2019 (Incorporated by reference to Exhibit 4.3 to the Current Report of the Registrant on Form 8-K (File No. 001-32352) filed with the Securities and Exchange Commission on January 25, 2019.).

4.7		Form of Notes representing $2,000,000,000 principal amount of 4.709% Senior Notes due 2029, dated January 25, 2019 (Incorporated by reference to Exhibit 4.4 to the Current Report of the Registrant on Form 8-K (File No. 001-32352) filed with the Securities and Exchange Commission on January 25, 2019.).

4.8		Form of Notes representing $1,250,000,000 principal amount of 5.476% Senior Notes due 2039, dated January 25, 2019 (Incorporated by reference to Exhibit 4.5 to the Current Report of the Registrant on Form 8-K (File No. 001-32352) filed with the Securities and Exchange Commission on January 25, 2019.).

4.9		Form of Notes representing $1,550,000,000 principal amount of 5.576% Senior Notes due 2049, dated January 25, 2019 (Incorporated by reference to Exhibit 4.6 to the Current Report of the Registrant on Form 8-K (File No. 001-32352) filed with the Securities and Exchange Commission on January 25, 2019.).

4.10		Registration Rights Agreement, dated as of January 25, 2019, by and among Fox Corporation and Citigroup Global Markets Inc., Deutsche Bank Securities Inc. and Goldman Sachs & Co. LLC (Incorporated by reference to Exhibit 4.7 to the Current Report of the Registrant on Form 8-K (File No. 001-32352) filed with the Securities and Exchange Commission on January 25, 2019.).

10.1		~~Letter~~ Agreement for the Sale and Purchase of Share Capital of Sky plc, dated ~~December 11, 2017,~~October 3, 2018, by and between Comcast Bidco Limited, BSkyB Holdco, Inc. and 21st Century Fox ~~America, Inc.~~UK Nominees Limited (Incorporated by reference to Exhibit 10.1 to the Current Report of the Registrant on Form 8-K (File No. 001-32352) filed with the Securities and David F. DeVoe.*

~~12.1~~		Ratio of Earnings to Fixed Charges.*Exchange Commission on October 9, 2018.).

31.1		Chief Executive Officer Certification required by Rules 13a-14 and 15d-14 under the Securities Exchange Act of 1934, as amended.*

31.2		Chief Financial Officer Certification required by Rules 13a-14 and 15d-14 under the Securities Exchange Act of 1934, as amended.*

32.1		Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of Sarbanes Oxley Act of 2002.**

TWENTY-FIRST CENTURY FOX, INC.
(Registrant)

By:		/s/ John P. Nallen
		John P. Nallen
		Senior Executive Vice President and
		Chief Financial Officer