UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)


x			Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
			For the quarterly period ended ~~December~~March 31, ~~2021~~2022


☐			Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from _________ to _________

Commission file number 001-38776

FOX CORPORATION

(Exact Name of Registrant as Specified in its Charter)


Delaware						83-1825597
(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 and Zip Code)

Registrant’s telephone number, including area code (212) 852-7000

Securities registered pursuant to Section 12(b) of the Act:


Title of Each Class	Trading Symbols	Name of Each Exchange on Which Registered
Class A Common Stock, par value $0.01 per share	FOXA	The Nasdaq Global Select Market
Class B Common Stock, par value $0.01 per share	FOX	The Nasdaq Global Select Market

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 x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files). Yes x No o

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.


Large accelerated filer	x	Accelerated filer	o
Non-accelerated filer	o	Smaller reporting company	o
Emerging growth company	o

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. o

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

As of ~~February 4,~~May 6, 2022, ~~315,806,280~~311,683,994 shares of Class A Common Stock, par value $0.01 per share, and ~~247,096,334~~245,065,381 shares of Class B Common Stock, par value $0.01 per share, were outstanding.

FOX CORPORATION

FORM 10-Q

TABLE OF CONTENTS


			Page
Part I. Financial Information
	Item 1.	Financial Statements
		Unaudited Consolidated Statements of Operations for the three and nine months ended March 31, 202 2 and ~~six~~20 ~~months ended~~ ~~December 3~~1 ~~, 2021 and 2020~~21	1
		Unaudited Consolidated Statements of Comprehensive ~~(Loss)~~ Income for the three and ~~six~~nine months ended ~~December~~March 31, ~~2021~~2022 and ~~2020~~2021	2
		Consolidated Balance Sheets as of March 31, 202 ~~Dec~~2 ~~ember 3~~1 ~~, 2021~~ (unaudited) and June 30, 2021 (audited)	3
		Unaudited Consolidated Statements of Cash Flows for the ~~six~~ nine months ended March 31, 202 ~~Dec~~2 ~~ember 3~~ and 20 1 ~~, 2021 and 2020~~21	4
		Unaudited Consolidated Statements of Equity for the three and ~~six~~nine months ended ~~December~~March 31 , ~~2021~~202 2 and ~~2020~~20 21	5
		Notes to the Unaudited Consolidated Financial Statements	6
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1718
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	2829
	Item 4.	Controls and Procedures	2829
Part II. Other Information
	Item 1.	Legal Proceedings	2930
	Item 1A.	Risk Factors	2930
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	2930
	Item 3.	Defaults Upon Senior Securities	2930
	Item 4.	Mine Safety Disclosures	3031
	Item 5.	Other Information	3031
	Item 6.	Exhibits	3031
	Signature		3132

FOX CORPORATION

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)


		For the three months ended December 31,				For the six months ended December 31,				For the three months ended March 31,				For the nine months ended March 31,
		2021		2020		2021		2020				2022		2021		2022		2021
Revenues	Revenues	$	4,441	$	4,087	$	7,486	$	6,804		Revenues	$	3,455	$	3,215	$	10,941	$	10,019
Operating expenses	Operating expenses	(3,667)		(3,346)		(5,238)		(4,514)			Operating expenses	(2,164)		(1,885)		(7,402)		(6,399)
Selling, general and administrative	Selling, general and administrative	(468)		(442)		(883)		(830)			Selling, general and administrative	(485)		(437)		(1,368)		(1,267)
Depreciation and amortization	Depreciation and amortization	(93)		(70)		(172)		(138)			Depreciation and amortization	(92)		(78)		(264)		(216)
Impairment and restructuring charges	Impairment and restructuring charges	—		—		—		(35)			Impairment and restructuring charges	—		—		—		(35)
Interest expense, net	Interest expense, net	(97)		(97)		(194)		(195)			Interest expense, net	(91)		(98)		(285)		(293)
Other, net	Other, net	(211)		172		(142)		691			Other, net	(233)		61		(375)		752
(Loss) income before income tax benefit (expense)		(95)		304		857		1,783
Income tax benefit (expense)		22		(74)		(222)		(436)
Net (loss) income		(73)		230		635		1,347
Income before income tax expense											Income before income tax expense	390		778		1,247		2,561
Income tax expense											Income tax expense	(100)		(196)		(322)		(632)
Net income											Net income	290		582		925		1,929
Less: Net income attributable to noncontrolling interests	Less: Net income attributable to noncontrolling interests	(12)		(6)		(19)		(17)			Less: Net income attributable to noncontrolling interests	(7)		(15)		(26)		(32)
Net (loss) income attributable to Fox Corporation stockholders		$	(85)	$	224	$	616	$	1,330
Net income attributable to Fox Corporation stockholders											Net income attributable to Fox Corporation stockholders	$	283	$	567	$	899	$	1,897

(LOSS) EARNINGS PER SHARE DATA
EARNINGS PER SHARE DATA											EARNINGS PER SHARE DATA

Weighted average shares:	Weighted average shares:										Weighted average shares:
Basic	Basic	569		595		572		599			Basic	563		589		569		595
Diluted	Diluted	573		598		575		601			Diluted	567		593		573		598

Net (loss) income attributable to Fox Corporation stockholders per share:
Net income attributable to Fox Corporation stockholders per share:											Net income attributable to Fox Corporation stockholders per share:
Basic	Basic	$	(0.15)	$	0.38	$	1.08	$	2.22		Basic	$	0.50	$	0.96	$	1.58	$	3.19
Diluted	Diluted	$	(0.15)	$	0.37	$	1.07	$	2.21		Diluted	$	0.50	$	0.96	$	1.57	$	3.17

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

FOX CORPORATION

UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE ~~(LOSS)~~ INCOME

(IN MILLIONS)


		For the three months ended December 31,				For the six months ended December 31,				For the three months ended March 31,				For the nine months ended March 31,
		2021		2020		2021		2020				2022		2021		2022		2021
Net (loss) income		$	(73)	$	230	$	635	$	1,347
Net income											Net income	$	290	$	582	$	925	$	1,929
Other comprehensive income, net of tax:	Other comprehensive income, net of tax:										Other comprehensive income, net of tax:
Benefit plan adjustments and other	Benefit plan adjustments and other	8		7		14		16			Benefit plan adjustments and other	3		9		17		25
Other comprehensive income, net of tax	Other comprehensive income, net of tax	8		7		14		16			Other comprehensive income, net of tax	3		9		17		25
Comprehensive (loss) income		(65)		237		649		1,363
Comprehensive income											Comprehensive income	293		591		942		1,954
Less: Net income attributable to noncontrolling interests(a)	Less: Net income attributable to noncontrolling interests(a)	(12)		(6)		(19)		(17)			Less: Net income attributable to noncontrolling interests(a)	(7)		(15)		(26)		(32)
Comprehensive (loss) income attributable to Fox Corporation stockholders		$	(77)	$	231	$	630	$	1,346
Comprehensive income attributable to Fox Corporation stockholders											Comprehensive income attributable to Fox Corporation stockholders	$	286	$	576	$	916	$	1,922


(a)			Net income attributable to noncontrolling interests includes ~~$(3)~~$(5) million and $4$5 million for the three months ended ~~December~~March 31, ~~2021~~2022 and ~~2020,~~2021, respectively, and ~~$(4)~~$(9) million and $8$13 million for the ~~six~~nine months ended ~~December~~March 31, ~~2021~~2022 and ~~2020,~~2021, respectively, relating to redeemable noncontrolling interests.

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

FOX CORPORATION

CONSOLIDATED BALANCE SHEETS

(IN MILLIONS, EXCEPT SHARE AND PER SHARE AMOUNTS)


		As of December 31, 2021		As of June 30, 2021			As of March 31, 2022		As of June 30, 2021
		(unaudited)		(audited)			(unaudited)		(audited)
ASSETS	ASSETS					ASSETS
Current assets	Current assets					Current assets
Cash and cash equivalents	Cash and cash equivalents	$	4,255	$	5,886	Cash and cash equivalents	$	4,634	$	5,886
Receivables, net	Receivables, net	2,952		2,029		Receivables, net	2,338		2,029
Inventories, net	Inventories, net	1,148		729		Inventories, net	786		729
Other	Other	159		105		Other	158		105
Total current assets	Total current assets	8,514		8,749		Total current assets	7,916		8,749
Non-current assets	Non-current assets					Non-current assets
Property, plant and equipment, net	Property, plant and equipment, net	1,650		1,708		Property, plant and equipment, net	1,646		1,708
Intangible assets, net	Intangible assets, net	3,198		3,154		Intangible assets, net	3,176		3,154
Goodwill	Goodwill	3,565		3,435		Goodwill	3,560		3,435
Deferred tax assets	Deferred tax assets	3,675		3,822		Deferred tax assets	3,619		3,822
Other non-current assets	Other non-current assets	2,276		2,058		Other non-current assets	2,099		2,058
Total assets	Total assets	$	22,878	$	22,926	Total assets	$	22,016	$	22,926
LIABILITIES AND EQUITY	LIABILITIES AND EQUITY					LIABILITIES AND EQUITY
Current liabilities	Current liabilities					Current liabilities
Borrowings	Borrowings	$	750	$	749	Borrowings	$	—	$	749
Accounts payable, accrued expenses and other current liabilities	Accounts payable, accrued expenses and other current liabilities	2,120		2,253		Accounts payable, accrued expenses and other current liabilities	2,121		2,253
Total current liabilities	Total current liabilities	2,870		3,002		Total current liabilities	2,121		3,002
Non-current liabilities	Non-current liabilities					Non-current liabilities
Borrowings	Borrowings	7,204		7,202		Borrowings	7,205		7,202
Other liabilities	Other liabilities	1,342		1,336		Other liabilities	1,297		1,336
Redeemable noncontrolling interests	Redeemable noncontrolling interests	172		261		Redeemable noncontrolling interests	175		261
Commitments and contingencies	Commitments and contingencies	0		0		Commitments and contingencies	0		0
Equity	Equity					Equity
Class A common stock(a)	Class A common stock(a)	3		3		Class A common stock(a)	3		3
Class B common stock(b)	Class B common stock(b)	3		3		Class B common stock(b)	3		3
Additional paid-in capital	Additional paid-in capital	9,265		9,453		Additional paid-in capital	9,195		9,453
Retained earnings	Retained earnings	2,308		1,982		Retained earnings	2,300		1,982
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(304)		(318)		Accumulated other comprehensive loss	(301)		(318)
Total Fox Corporation stockholders' equity	Total Fox Corporation stockholders' equity	11,275		11,123		Total Fox Corporation stockholders' equity	11,200		11,123
Noncontrolling interests	Noncontrolling interests	15		2		Noncontrolling interests	18		2
Total equity	Total equity	11,290		11,125		Total equity	11,218		11,125
Total liabilities and equity	Total liabilities and equity	$	22,878	$	22,926	Total liabilities and equity	$	22,016	$	22,926


(a)			Class A common stock, $0.01 par value per share, 2,000,000,000 shares authorized, ~~316,736,627~~312,586,563 shares and 324,361,864 shares issued and outstanding at par as of ~~December~~March 31, ~~2021~~2022 and June 30, 2021, respectively.


(b)			Class B common stock, $0.01 par value per share, 1,000,000,000 shares authorized, ~~247,528,605~~245,544,417 shares and 251,821,556 shares issued and outstanding at par as of ~~December~~March 31, ~~2021~~2022 and June 30, 2021, respectively.

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

FOX CORPORATION

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

(IN MILLIONS)


		For the six months ended December 31,					For the nine months ended March 31,
		2021		2020			2022		2021
OPERATING ACTIVITIES	OPERATING ACTIVITIES					OPERATING ACTIVITIES
Net income	Net income	$	635	$	1,347	Net income	$	925	$	1,929
Adjustments to reconcile net income to cash (used in) provided by operating activities
Adjustments to reconcile net income to cash provided by operating activities						Adjustments to reconcile net income to cash provided by operating activities
Depreciation and amortization	Depreciation and amortization	172		138		Depreciation and amortization	264		216
Amortization of cable distribution investments	Amortization of cable distribution investments	9		11		Amortization of cable distribution investments	14		17
Impairment and restructuring charges	Impairment and restructuring charges	—		35		Impairment and restructuring charges	—		35
Equity-based compensation	Equity-based compensation	47		75		Equity-based compensation	75		112
Other, net	Other, net	142		(691)		Other, net	375		(752)
Deferred income taxes	Deferred income taxes	143		421		Deferred income taxes	195		528
Change in operating assets and liabilities, net of acquisitions and dispositions	Change in operating assets and liabilities, net of acquisitions and dispositions					Change in operating assets and liabilities, net of acquisitions and dispositions
Receivables and other assets	Receivables and other assets	(940)		(1,011)		Receivables and other assets	(309)		(382)
Inventories net of program rights payable	Inventories net of program rights payable	(494)		(60)		Inventories net of program rights payable	(156)		257
Accounts payable and accrued expenses	Accounts payable and accrued expenses	(214)		156		Accounts payable and accrued expenses	(205)		88
Other changes, net	Other changes, net	(156)		(184)		Other changes, net	(227)		(182)
Net cash (used in) provided by operating activities		(656)		237
Net cash provided by operating activities						Net cash provided by operating activities	951		1,866
INVESTING ACTIVITIES	INVESTING ACTIVITIES					INVESTING ACTIVITIES
Property, plant and equipment	Property, plant and equipment	(121)		(242)		Property, plant and equipment	(191)		(333)
Acquisitions, net of cash acquired	Acquisitions, net of cash acquired	(229)		—		Acquisitions, net of cash acquired	(243)		—

Proceeds from dispositions, net	Proceeds from dispositions, net	82		—		Proceeds from dispositions, net	82		93
Purchase of investments	Purchase of investments	(28)		(86)		Purchase of investments	(28)		(86)
Other investing activities, net	Other investing activities, net	—		(1)		Other investing activities, net	(6)		(3)
Net cash used in investing activities	Net cash used in investing activities	(296)		(329)		Net cash used in investing activities	(386)		(329)
FINANCING ACTIVITIES	FINANCING ACTIVITIES					FINANCING ACTIVITIES
Repayment of borrowings						Repayment of borrowings	(750)		—
Repurchase of shares	Repurchase of shares	(497)		(416)		Repurchase of shares	(748)		(713)
Non-operating cash flows from The Walt Disney Company	Non-operating cash flows from The Walt Disney Company	—		116		Non-operating cash flows from The Walt Disney Company	—		113
Settlement of Divestiture Tax Prepayment	Settlement of Divestiture Tax Prepayment	—		462		Settlement of Divestiture Tax Prepayment	—		462
Dividends paid and distributions	Dividends paid and distributions	(150)		(176)		Dividends paid and distributions	(295)		(182)

Purchase of subsidiary noncontrolling interest						Purchase of subsidiary noncontrolling interest	—		(67)
Other financing activities, net	Other financing activities, net	(32)		(37)		Other financing activities, net	(24)		(30)
Net cash used in financing activities	Net cash used in financing activities	(679)		(51)		Net cash used in financing activities	(1,817)		(417)
Net decrease in cash and cash equivalents		(1,631)		(143)
Net (decrease) increase in cash and cash equivalents						Net (decrease) increase in cash and cash equivalents	(1,252)		1,120
Cash and cash equivalents, beginning of year	Cash and cash equivalents, beginning of year	5,886		4,645		Cash and cash equivalents, beginning of year	5,886		4,645
Cash and cash equivalents, end of period	Cash and cash equivalents, end of period	$	4,255	$	4,502	Cash and cash equivalents, end of period	$	4,634	$	5,765

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

FOX CORPORATION

UNAUDITED CONSOLIDATED STATEMENTS OF EQUITY

(IN MILLIONS)


		Class A			Class B			Additional Paid-in Capital				Retained Earnings		Accumulated Other Comprehensive Loss					Total Fox Corporation Stockholders' Equity			Noncontrolling Interests(a)					Total Equity				Class A								Class B			Additional Paid-in Capital			Retained Earnings			Accumulated Other Comprehensive Loss			Total Fox Corporation Stockholders' Equity			Noncontrolling Interests(a)			Total Equity
		Common Stock			Common Stock													Common Stock												Common Stock
		Shares	Amount		Shares	Amount												Shares							Amount							Shares				Amount

Balance, September 30, 2021		321	$	3	250	$	3			$	9,327					$	2,409							$	(312)				$	11,430			$	—			$	11,430
Net (loss) income		—	—		—	—				—						(85)					—					(85)					15				(70)
Balance, December 31, 2021																														Balance, December 31, 2021	317				$	3			248	$	3		$	9,265		$	2,308		$	(304)		$	11,275		$	15		$	11,290
Net income																														Net income	—				—				—	—		—			283			—			283			12			295
Other comprehensive income	Other comprehensive income	—	—		—	—		—				—		8					8			—					8			Other comprehensive income	—				—				—	—		—			—			3			3			—			3
Dividends																														Dividends	—				—				—	—		—			(135)			—			(135)			—			(135)
Shares repurchased	Shares repurchased	(5)	—		(2)	—		(108)				(139)		—					(247)			—					(247)			Shares repurchased	(4)				—				(2)	—		(104)			(147)			—			(251)			—			(251)
Other	Other	1	—		—	—		46				123		—					169			—					169			Other	—				—				—	—		34			(9)			—			25			(9)			16
Balance, December 31, 2021		317	$	3	248	$	3	$	9,265			$	2,308	$	(304)				$	11,275		$	15				$	11,290
Balance, September 30, 2020		338	$	3	258	$	3	$	9,668			$	1,525	$	(408)				$	10,791		$	15				$	10,806
Balance, March 31, 2022																														Balance, March 31, 2022	313				$	3			246	$	3	$	9,195		$	2,300		$	(301)		$	11,200		$	18		$	11,218
Balance, December 31, 2020																														Balance, December 31, 2020	335				$	3			257	$	3	$	9,655		$	1,657		$	(401)		$	10,917		$	4		$	10,921
Net income	Net income	—	—		—	—		—				224		—					224			2					226			Net income	—				—				—	—		—			567			—			567			10			577
Other comprehensive income	Other comprehensive income	—	—		—	—		—				—		7					7			—					7			Other comprehensive income	—				—				—	—		—			—			9			9			—			9
Dividends																														Dividends	—				—				—	—		—			(134)			—			(134)			—			(134)
Shares repurchased	Shares repurchased	(4)	—		(1)	—		(86)				(63)		—					(149)			—					(149)			Shares repurchased	(6)				—				(3)	—		(146)			(160)			—			(306)			—			(306)
Other	Other	1	—		—	—		73				(29)		—					44			(13)					31			Other	—				—				—	—		46			(18)			—			28			(11)			17
Balance, December 31, 2020		335	$	3	257	$	3	$	9,655			$	1,657	$	(401)				$	10,917		$	4				$	10,921
Balance, March 31, 2021																														Balance, March 31, 2021	329				$	3			254	$	3	$	9,555		$	1,912		$	(392)		$	11,081		$	3		$	11,084
Balance, June 30, 2021	Balance, June 30, 2021	324	$	3	252	$	3	$	9,453			$	1,982	$	(318)				$	11,123		$	2				$	11,125		Balance, June 30, 2021	324				$	3			252	$	3	$	9,453		$	1,982		$	(318)		$	11,123		$	2		$	11,125
Net income	Net income	—	—		—	—		—				616		—					616			23					639			Net income	—				—				—	—		—			899			—			899			35			934
Other comprehensive income	Other comprehensive income	—	—		—	—		—				—		14					14			—					14			Other comprehensive income	—				—				—	—		—			—			17			17			—			17
Dividends	Dividends	—	—		—	—		—				(138)		—					(138)			—					(138)			Dividends	—				—				—	—		—			(273)			—			(273)			—			(273)
Shares repurchased	Shares repurchased	(10)	—		(4)	—		(222)				(275)		—					(497)			—					(497)			Shares repurchased	(14)				—				(6)	—		(326)			(422)			—			(748)			—			(748)
Other	Other	3	—		—	—		34				123		—					157			(10)					147			Other	3				—				—	—		68			114			—			182			(19)			163
Balance, December 31, 2021		317	$	3	248	$	3	$	9,265			$	2,308	$	(304)				$	11,275		$	15				$	11,290
Balance, March 31, 2022																														Balance, March 31, 2022	313				$	3			246	$	3	$	9,195		$	2,300		$	(301)		$	11,200		$	18		$	11,218
Balance, June 30, 2020	Balance, June 30, 2020	344	$	3	261	$	3	$	9,831			$	674	$	(417)				$	10,094		$	17				$	10,111		Balance, June 30, 2020	344				$	3			261	$	3	$	9,831		$	674		$	(417)		$	10,094		$	17		$	10,111
Net income	Net income	—	—		—	—		—				1,330		—					1,330			9					1,339			Net income	—				—				—	—		—			1,897			—			1,897			19			1,916
Other comprehensive income	Other comprehensive income	—	—		—	—		—				—		16					16			—					16			Other comprehensive income	—				—				—	—		—			—			25			25			—			25
Dividends	Dividends	—	—		—	—		—				(138)		—					(138)			—					(138)			Dividends	—				—				—	—		—			(272)			—			(272)			—			(272)
Shares repurchased	Shares repurchased	(11)	—		(4)	—		(247)				(172)		—					(419)			—					(419)			Shares repurchased	(17)				—				(7)	—		(393)			(332)			—			(725)			—			(725)
Other	Other	2	—		—	—		71				(37)		—					34			(22)					12			Other	2				—				—	—		117			(55)			—			62			(33)			29
Balance, December 31, 2020		335	$	3	257	$	3	$	9,655			$	1,657	$	(401)				$	10,917		$	4				$	10,921
Balance, March 31, 2021																														Balance, March 31, 2021	329				$	3			254	$	3	$	9,555		$	1,912		$	(392)		$	11,081		$	3		$	11,084


(a)			Excludes Redeemable noncontrolling interests which are reflected in temporary equity (See Note 4—Fair Value under the heading “Redeemable Noncontrolling Interests”).

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

FOX CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

Fox Corporation, a Delaware corporation (“FOX” or the “Company”), is a news, sports and entertainment company, which manages and reports its businesses in the following segments: Cable Network Programming, Television and Other, Corporate and Eliminations.

The accompanying Unaudited Consolidated Financial Statements of 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, 2022, due to, among other things, the impact of coronavirus disease 2019 (“COVID-19”) on the Company’s business.

The preparation of the Company’s Unaudited Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts that are reported in the Unaudited Consolidated Financial Statements and accompanying disclosures. Although these estimates are based on management’s best knowledge of current events and actions that the Company may undertake in the future, actual results may differ from those estimates.

These interim Unaudited Consolidated Financial Statements and notes thereto should be read in conjunction with the audited consolidated and combined financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2021 as filed with the Securities and Exchange Commission on August 10, 2021 (the “2021 Form 10-K”).

The Unaudited Consolidated Financial Statements include the accounts of FOX. All significant intercompany transactions and accounts within the Company’s consolidated businesses have been eliminated. Investments in and advances to entities or joint ventures in which the Company has significant influence, but less than a controlling financial interest, are accounted for using the equity method. Significant influence generally exists when the Company owns an interest between 20% and 50%. In accordance with Accounting Standards Codification (“ASC”) 321 “Investments—Equity Securities” (“ASC 321”), equity securities in which the Company has no significant influence (generally less than a 20% ownership interest) with readily determinable fair values are accounted for at fair value based on quoted market prices. Equity securities without readily determinable fair values are accounted for either at fair value or using the measurement alternative method, which is 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. All gains and losses on investments in equity securities are recognized in the Unaudited Consolidated Statements of Operations.

The Company’s fiscal year ends on June 30 of each year. Certain fiscal 2021 amounts have been reclassified to conform to the fiscal 2022 presentation.

The unaudited and audited consolidated financial statements are referred to as the “Financial Statements” herein. The unaudited consolidated statements of operations are referred to as the “Statements of Operations” herein. The unaudited and audited consolidated balance sheets are referred to as the “Balance Sheets” herein.

Recently Adopted and Recently Issued Accounting Guidance

No recently adopted or issued accounting guidance materially impacted or are expected to impact the Company's Financial Statements.

NOTE 2. ACQUISITIONS, DISPOSALS AND OTHER TRANSACTIONS

The Company’s acquisitions support the Company’s strategy to strengthen its core brands and to selectively enhance production capabilities for its digital and linear platforms. During the ~~six~~nine months ended ~~December~~March 31, ~~2021,~~2022 the Company ~~acquired~~made acquisitions, primarily consisting of 3 entertainment production ~~companies for total consideration of approximately~~

FOX CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

~~$246~~companies, for total cash consideration of approximately $240 million. The revenues and Segment EBITDA (as defined in Note ~~10-Segment~~10—Segment Information) included within the Company's consolidated results of operations associated with ~~these companies were not material individually or in the aggregate. For~~ the fiscal 2022 and 2021 ~~acquisition disclosed~~transactions (disclosed in Note 3—Acquisitions, Disposals and Other Transactions in the 2021 Form 10-K under the heading “Acquisitions and ~~Disposals,”~~Disposals”) were not material individually or in the aggregate. For the fiscal 2021 acquisition, the accounting for the business combination, including consideration transferred, is based on provisional amounts and the allocation of the consideration transferred is not final. The amounts allocated to intangibles and goodwill, the estimates of useful lives and the related amortization expense are subject to changes pending the completion of the final valuation of certain assets and liabilities. A change in the allocation of consideration transferred and any estimates of useful lives could result in a change in the value allocated to the intangible assets that could impact future amortization expense.

NOTE 3. INVENTORIES, NET

The Company’s inventories were comprised of the following:


		As of December 31, 2021		As of June 30, 2021			As of March 31, 2022		As of June 30, 2021
		(in millions)					(in millions)
Sports programming rights	Sports programming rights	$	916	$	573	Sports programming rights	$	567	$	573
Entertainment programming rights	Entertainment programming rights	694		355		Entertainment programming rights	706		355
Total inventories, net	Total inventories, net	1,610		928		Total inventories, net	1,273		928
Less: current portion of inventories, net	Less: current portion of inventories, net	(1,148)		(729)		Less: current portion of inventories, net	(786)		(729)
Total non-current inventories, net	Total non-current inventories, net	$	462	$	199	Total non-current inventories, net	$	487	$	199

The aggregate amortization expense related to the programming rights was approximately ~~$2.6~~$1.2 billion and ~~$2.8~~$1.0 billion for the three months ended ~~December~~March 31, ~~2021~~2022 and ~~2020,~~2021, respectively, and approximately ~~$3.4~~$4.6 billion and ~~$3.5~~$4.0 billion for the ~~six~~nine months ended ~~December~~March 31, ~~2021~~2022 and ~~2020,~~2021, respectively, which is included in Operating expenses in the Statements of Operations.

The Company evaluates the recoverability of unamortized programming and production costs, included within Inventories, net in the Balance Sheets, using expected future cash flows. As a result of COVID-19 related costs and production delays, the Company determined that its unamortized production costs related to a television series were not recoverable and therefore recognized a write-down of approximately $30 million at the Television segment, which was recorded in Operating expenses in the Statements of Operations for the three and nine months ended March 31, 2022.

NOTE 4. FAIR VALUE

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
As of December 31, 2021
Total Level 1 Level 2 Level 3
(in millions)
Assets
Investments in equity securities $ 689 $ 689 (a) $ — $ —
Redeemable noncontrolling interests (172) — — (172) (b)
Total $ 517 $ 689 $ — $ (172)

FOX CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

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


	Fair value measurements
	As of March 31, 2022
	Total		Level 1			Level 2		Level 3
	(in millions)
Assets
Investments in equity securities	$	506	$	506	(a)	$	—	$	—
Redeemable noncontrolling interests	(175)		—			—		(175)		(b)
Total	$	331	$	506		$	—	$	(175)


	Fair value measurements
	As of June 30, 2021
	Total		Level 1			Level 2		Level 3
	(in millions)
Assets
Investments in equity securities	$	788	$	788	(a)	$	—	$	—
Redeemable noncontrolling interests	(261)		—			—		(261)		(b)
Total	$	527	$	788		$	—	$	(261)


(a)			The investment categorized as Level 1 represents an investment in equity securities of Flutter Entertainment plc (“Flutter”) with a readily determinable fair value (See Note 3—Acquisitions, Disposals and Other Transactions in the 2021 Form 10-K under the heading “Flutter” for additional information).


(b)			The Company utilizes both the market and income approach valuation ~~technique~~techniques for its Level 3 fair value measures. Inputs to such measures could include observable market data obtained from independent sources such as broker quotes and recent market transactions for similar assets. It is the Company’s policy to maximize the use of observable inputs in the measurement of its Level 3 fair value measurements. To the extent observable inputs are not available, the Company utilizes unobservable inputs based upon the assumptions market participants would use in valuing the liability. Examples of utilized unobservable inputs are future cash flows and long-term growth rates.

Redeemable Noncontrolling Interests

The Company accounts for redeemable noncontrolling interests in accordance with ASC 480-10-S99-3A, “Distinguishing Liabilities from Equity,” because their exercise is outside the control of the Company. The redeemable noncontrolling interests recorded are put rights held by minority shareholders in ~~a majority-owned sports network,~~ Credible Labs Inc. ("Credible") and an entertainment production company.

FOX CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

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


		For the three months ended December 31,				For the six months ended December 31,					For the three months ended March 31,				For the nine months ended March 31,
		2021		2020		2021		2020			2022		2021		2022		2021
		(in millions)									(in millions)
Beginning of period	Beginning of period	$	(302)	$	(310)	$	(261)	$	(305)	Beginning of period	$	(172)	$	(202)	$	(261)	$	(305)
Acquisitions(a)	Acquisitions(a)	(13)		—		(58)		—		Acquisitions(a)	—		—		(58)		—
Net loss (income)	Net loss (income)	3		(4)		4		(8)		Net loss (income)	5		(5)		9		(13)
Redemption of noncontrolling interests(b)	Redemption of noncontrolling interests(b)	—		135		—		135		Redemption of noncontrolling interests(b)	—		—		—		135
Distributions	Distributions	—		5		3		11		Distributions	—		1		3		12
Accretion and other(c)	Accretion and other(c)	140		(28)		140		(35)		Accretion and other(c)	(8)		(19)		132		(54)
End of period	End of period	$	(172)	$	(202)	$	(172)	$	(202)	End of period	$	(175)	$	(225)	$	(175)	$	(225)


(a)			The increase for the ~~six~~nine months ended ~~December~~March 31, ~~2021~~2022 was primarily due to the acquisition of an entertainment production company.
(b)			As a result of the exercise of a portion of the put rights held by the sports network minority shareholder during the ~~three~~nine months ended ~~December~~March 31, ~~2020,~~2021, approximately $135 million was reclassified out of Redeemable noncontrolling interests. At closing, the Company paid half of the purchase price in cash and delivered a three-year promissory note for the remaining balance, which was recorded in Non-current liabilities on the Balance Sheet.
(c)			As a result of the expiration of the sports network minority shareholder's final put right during the ~~three~~nine months ended ~~December~~March 31, ~~2021,~~2022, approximately $110 million was reclassified into equity.

~~FOX CORPORATION~~

~~NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS~~

The put right held by the Credible minority shareholder will become exercisable in fiscal 2025. The put right held by the entertainment production company's minority shareholder will become exercisable in fiscal 2027.

Financial Instruments

The carrying value of the Company’s financial instruments, such as cash and cash equivalents, receivables, payables and investments, accounted for using the measurement alternative method in accordance with ASC 321, approximates fair value.


		As of December 31, 2021		As of June 30, 2021			As of March 31, 2022		As of June 30, 2021
		(in millions)					(in millions)
Borrowings	Borrowings					Borrowings
Fair value	Fair value	$	9,362	$	9,474	Fair value	$	7,852	$	9,474
Carrying value	Carrying value	$	7,954	$	7,951	Carrying value	$	7,205	$	7,951

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).

Concentrations of Credit Risk

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.

Generally, the Company does not require collateral to secure receivables. As of ~~December~~March 31, ~~2021~~2022 and June 30, 2021, the Company had no customers that accounted for 10% or more of the Company’s receivables.

FOX CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 5. BORROWINGS

Borrowings include senior notes (See Note 9—Borrowings in the 2021 Form 10-K under the heading “Public Debt – Senior Notes Issued”). In addition, the Company is party to a credit agreement providing a $1.0 billion unsecured revolving credit facility with a sub-limit of $150 million available for the issuance of letters of credit and a maturity date of March 2024 (See Note 9—Borrowings in the 2021 Form 10-K under the heading “Revolving Credit Agreement”). As of ~~December~~March 31, ~~2021,~~2022, there were no0 borrowings outstanding under the revolving credit agreement. ~~Subsequent to December 31, 2021,~~In January 2022, $750 million of 3.666% senior notes ~~due in January 2022~~ matured and were repaid in full.

NOTE 6. STOCKHOLDERS’ EQUITY

Stock Repurchase Program

The Company's Board of Directors (the "Board") has authorized a $4 billion stock repurchase program, under which the Company can repurchase Class A Common Stock (the “Class A Common Stock”) and Class B Common Stock (the “Class B Common Stock” and, together with the Class A Common Stock, the “Common Stock”). The program has no time limit and may be modified, suspended or discontinued at any time.

The Company repurchased approximately 1420 million shares of Common Stock for approximately ~~$497~~$748 million during the ~~six~~nine months ended ~~December~~March 31, ~~2021.~~2022.

Repurchased shares are retired and reduce the number of shares issued and outstanding. The Company allocates the amount of the repurchase price over par value between additional paid-in capital and retained earnings.

~~FOX CORPORATION~~

~~NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS~~

As of ~~December~~March 31, ~~2021,~~2022, the Company’s remaining stock repurchase authorization was approximately ~~$1.90~~$1.65 billion. Subsequent to ~~December~~March 31, ~~2021,~~2022, the Company repurchased approximately 1.4 million shares of Common Stock for ~~$53~~$52 million.

Dividends

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

For the three months ended December 31, For the six months ended December 31,
2021 2020 2021 2020
Cash dividend per share $ — $ — $ 0.24 $ 0.23


	For the three months ended March 31,				For the nine months ended March 31,
	2022		2021		2022		2021
Cash dividend per share	$	0.24	$	0.23	$	0.48	$	0.46

~~Subsequent to December 31, 2021, the~~The Company declared a semi-annual dividend of $0.24 per share on both the Class A Common Stock and the Class B Common ~~Stock. The dividend declared is payable~~Stock during the three months ended March 31, 2022, which was paid on March 30, 2022 ~~with a~~to stockholders of record ~~date for determining dividend entitlements of~~on March 2, 2022.

NOTE 7. EQUITY-BASED COMPENSATION

The Company has 1 equity plan, the Fox Corporation 2019 Shareholder Alignment Plan (See Note 12—Equity-Based Compensation in the 2021 Form 10-K).

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


		For the three months ended December 31,				For the six months ended December 31,					For the three months ended March 31,				For the nine months ended March 31,
		2021		2020		2021		2020					2022		2021		2022		2021
		(in millions)								(in millions)
Equity-based compensation	Equity-based compensation	$	32	$	44	$	47	$	75			Equity-based compensation	$	28	$	37	$	75	$	112
Intrinsic value of all settled equity-based awards	Intrinsic value of all settled equity-based awards	$	18	$	10	$	94	$	91			Intrinsic value of all settled equity-based awards	$	2	$	4	$	96	$	95
Tax benefit on settled equity-based awards	Tax benefit on settled equity-based awards	$	4	$	2	$	21	$	16			Tax benefit on settled equity-based awards	$	—	$	1	$	21	$	17

FOX CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

The Company’s equity-based awards are settled in Class A Common Stock. As of ~~December~~March 31, ~~2021,~~2022, the Company’s total estimated compensation cost, not yet recognized, related to non-vested equity awards held by the Company’s employees was approximately ~~$110~~$80 million and is expected to be recognized over a weighted average period between one and two years.

As of ~~December~~March 31, ~~2021~~2022 and ~~2020,~~2021, the Company had approximately 6 million ~~and 7 million~~ stock options ~~outstanding, respectively.~~outstanding.

Awards Vested and Granted

Restricted Stock Units

During the ~~six~~nine months ended ~~December~~March 31, ~~2021~~2022 and ~~2020~~2021, approximately 2.4 million and 3.5 million restricted stock units (“RSUs”) vested and approximately 1.7 million and 2.0 million RSUs were granted, respectively. These RSUs generally vest in equal annual installments over a three-year period subject to the participants’ continued employment with the Company.

Performance-Based Stock Options

During the ~~six~~nine months ended ~~December~~March 31, ~~2021~~2022 and ~~2020,~~2021, the Company granted approximately 44.0 million and 55.0 million performance-based stock options, respectively, which will vest in full at the end of a three-year performance period if the market condition is met, and have a term of seven years thereafter.

~~FOX CORPORATION~~

~~NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS~~

NOTE 8. COMMITMENTS AND CONTINGENCIES

Commitments

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~~March 31, ~~2021~~2022 and June 30, 2021 were approximately ~~$44~~$43 billion and $47 billion, respectively. The decrease from ~~June��~~June 30, 2021 was primarily due to sports programming rights payments.

Contingencies

FOX News

The Company’s FOX News business and certain of its current and former employees have been subject to allegations of sexual harassment and discrimination on the basis of sex and race. The Company has 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 material, individually or in the aggregate, to the Company. The amount of additional 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 business, financial condition, results of operations or cash flows.

U.K. Newspaper Matters Indemnity

In connection with the separation of Twenty-First Century Fox, Inc. (now known as TFCF Corporation) ("21CF") and News Corporation in June 2013 (the “21CF News Corporation Separation”), 21CF agreed to indemnify News Corporation, on an after-tax basis, for payments made after the 21CF News Corporation 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 Corporation before the 21CF News Corporation Separation, 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 Corporation (the “U.K. Newspaper Matters Indemnity”). In accordance with the Separation Agreement (as defined in Note 1—Description of Business and Basis of Presentation in the 2021 Form 10-K under the heading “The Distribution”), the Company assumed certain costs and liabilities related to the U.K. Newspaper Matters

FOX CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Indemnity. The liability recorded in the Balance Sheets related to the indemnity was approximately ~~$60~~$65 million and $55 million as of ~~December~~March 31, ~~2021~~2022 and June 30, 2021, respectively.

Defamation and Disparagement Claims

From time to time, the Company and its news businesses, including FOX News Media and the FOX Television Stations, and their employees are subject to lawsuits alleging defamation or disparagement. These include lawsuits filed by Smartmatic USA Corp. and certain of its affiliates (collectively, “Smartmatic”) in February 2021 and Dominion Voting Systems, Inc. and certain of its affiliates (collectively, “Dominion”) in March 2021. The Company believes these lawsuits, including the Smartmatic and Dominion matters, are without merit and intends to defend against them vigorously. To date, none of the amounts the Company has paid in settlements of defamation or disparagement claims or reserved for pending or future claims is material, individually or in the aggregate, to the Company. The amount of additional 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 business, financial condition, results of operations or cash flows.

Other

The Company establishes an accrued liability for legal claims and indemnification 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

~~FOX CORPORATION~~

~~NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS~~

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 jurisdictions and as a matter of course, the Company is regularly audited by federal and state 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. Each member of the 21CF consolidated group, which includes 21CF, the Company (prior to the Distribution (as defined in Note 1—Description of Business and Basis of Presentation in the 2021 Form 10-K under the heading “The Distribution”)) and 21CF’s other subsidiaries, is jointly and severally liable for the U.S. federal income and, in certain jurisdictions, state tax liabilities of each other member of the consolidated group. Consequently, the Company could be liable in the event any such liability is incurred, and not discharged, by any other member of the 21CF consolidated group. The tax matters agreement entered into in connection with the Separation (as defined in Note 1—Description of Business and Basis of Presentation in the 2021 Form 10-K under the heading “The Distribution”) requires 21CF and/or The Walt Disney Company ("Disney") to indemnify the Company for any such liability. Disputes or assessments could arise during future audits by the Internal Revenue Service in amounts that the Company cannot quantify.

NOTE 9. PENSION AND OTHER POSTRETIREMENT BENEFITS

The Company participates in and/or sponsors various pension, savings and postretirement benefit plans. Pension plans and postretirement benefit plans are closed to new participants with the exception of a small group covered by collective bargaining agreements. The net periodic benefit cost was ~~$13~~$14 million and $17 million for the three months ended ~~December~~March 31, ~~2021~~2022 and ~~2020,~~2021, respectively, and ~~$27~~$41 million and ~~$34~~$51 million for the ~~six~~nine months ended ~~December~~March 31, ~~2021~~2022 and ~~2020,~~2021, respectively.

FOX CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 10. SEGMENT INFORMATION

The Company is a news, sports and entertainment company, which manages and reports its businesses in the following segments:

•Cable Network Programming, which principally consists of the production and licensing of news and sports content distributed primarily through traditional cable television systems, direct broadcast satellite operators and telecommunication companies (“traditional MVPDs”) and online multi-channel video programming distributors (“digital MVPDs”), primarily in the U.S.

•Television, which principally consists of the production, acquisition, marketing and distribution of broadcast network programming and free advertising-supported video-on-demand (“AVOD”) services under the FOX and Tubi brands, respectively, and the operation of 29 full power broadcast television stations, including 11 duopolies, in the U.S. Of these stations, 18 are affiliated with the FOX Network, 10 are affiliated with MyNetworkTV and 1 is an independent station.

•Other, Corporate and Eliminations, which principally consists of the FOX Studio Lot, Credible, corporate overhead costs and intracompany eliminations. The FOX Studio Lot, located in Los Angeles, California, provides television and film production services along with office space, studio operation services and includes all operations of the facility. Credible is a U.S. consumer finance marketplace.

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 operating income before depreciation and amortization, or Segment EBITDA. Due to the integrated nature of these operating segments, estimates and judgments are made in allocating certain assets, revenues and expenses.

~~FOX CORPORATION~~

~~NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS~~

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

FOX CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

The following tables set forth the Company’s Revenues and Segment EBITDA for the three and ~~six~~nine months ended ~~December~~March 31, ~~2021~~2022 and ~~2020:~~2021:


		For the three months ended December 31,				For the six months ended December 31,					For the three months ended March 31,				For the nine months ended March 31,
		2021		2020		2021		2020					2022		2021		2022		2021
		(in millions)								(in millions)
Revenues	Revenues											Revenues
Cable Network Programming	Cable Network Programming	$	1,638	$	1,488	$	3,054	$	2,813			Cable Network Programming	$	1,583	$	1,471	$	4,637	$	4,284
Television	Television	2,759		2,556		4,340		3,906				Television	1,820		1,695		6,160		5,601
Other, Corporate and Eliminations	Other, Corporate and Eliminations	44		43		92		85				Other, Corporate and Eliminations	52		49		144		134
Total revenues	Total revenues	$	4,441	$	4,087	$	7,486	$	6,804			Total revenues	$	3,455	$	3,215	$	10,941	$	10,019
Segment EBITDA	Segment EBITDA											Segment EBITDA
Cable Network Programming	Cable Network Programming	$	668	$	571	$	1,442	$	1,352			Cable Network Programming	$	864	$	850	$	2,306	$	2,202
Television	Television	(273)		(185)		86		272				Television	35		135		121		407
Other, Corporate and Eliminations	Other, Corporate and Eliminations	(85)		(81)		(154)		(153)				Other, Corporate and Eliminations	(88)		(86)		(242)		(239)
Amortization of cable distribution investments	Amortization of cable distribution investments	(4)		(6)		(9)		(11)				Amortization of cable distribution investments	(5)		(6)		(14)		(17)
Depreciation and amortization	Depreciation and amortization	(93)		(70)		(172)		(138)				Depreciation and amortization	(92)		(78)		(264)		(216)
Impairment and restructuring charges	Impairment and restructuring charges	—		—		—		(35)				Impairment and restructuring charges	—		—		—		(35)
Interest expense, net	Interest expense, net	(97)		(97)		(194)		(195)				Interest expense, net	(91)		(98)		(285)		(293)
Other, net	Other, net	(211)		172		(142)		691				Other, net	(233)		61		(375)		752
(Loss) income before income tax benefit (expense)		(95)		304		857		1,783
Income tax benefit (expense)		22		(74)		(222)		(436)
Net (loss) income		(73)		230		635		1,347
Income before income tax expense												Income before income tax expense	390		778		1,247		2,561
Income tax expense												Income tax expense	(100)		(196)		(322)		(632)
Net income												Net income	290		582		925		1,929
Less: Net income attributable to noncontrolling interests	Less: Net income attributable to noncontrolling interests	(12)		(6)		(19)		(17)				Less: Net income attributable to noncontrolling interests	(7)		(15)		(26)		(32)
Net (loss) income attributable to Fox Corporation stockholders		$	(85)	$	224	$	616	$	1,330
Net income attributable to Fox Corporation stockholders												Net income attributable to Fox Corporation stockholders	$	283	$	567	$	899	$	1,897

1314

FOX CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Revenues by Segment by Component


		For the three months ended December 31,				For the six months ended December 31,					For the three months ended March 31,				For the nine months ended March 31,
		2021		2020		2021		2020					2022		2021		2022		2021
		(in millions)								(in millions)
Cable Network Programming	Cable Network Programming											Cable Network Programming
Affiliate fee	Affiliate fee	$	1,039	$	928	$	2,065	$	1,901			Affiliate fee	$	1,097	$	1,068	$	3,162	$	2,969
Advertising	Advertising	454		441		765		740				Advertising	339		283		1,104		1,023
Other	Other	145		119		224		172				Other	147		120		371		292
Total Cable Network Programming revenues	Total Cable Network Programming revenues	1,638		1,488		3,054		2,813				Total Cable Network Programming revenues	1,583		1,471		4,637		4,284
Television	Television											Television
Advertising	Advertising	1,954		1,841		2,773		2,511				Advertising	969		915		3,742		3,426
Affiliate fee	Affiliate fee	649		590		1,290		1,150				Affiliate fee	700		651		1,990		1,801
Other	Other	156		125		277		245				Other	151		129		428		374
Total Television revenues	Total Television revenues	2,759		2,556		4,340		3,906				Total Television revenues	1,820		1,695		6,160		5,601
Other, Corporate and Eliminations	Other, Corporate and Eliminations	44		43		92		85				Other, Corporate and Eliminations	52		49		144		134
Total revenues	Total revenues	$	4,441	$	4,087	$	7,486	$	6,804			Total revenues	$	3,455	$	3,215	$	10,941	$	10,019

Future Performance Obligations

As of ~~December~~March 31, ~~2021,~~2022, approximately ~~$4.0~~$3.3 billion of revenues are expected to be recognized primarily over the next one to three years. The Company’s most significant remaining performance obligations relate to affiliate contracts, sports advertising contracts and content licensing contracts with fixed fees. The amount disclosed does not include (i) revenues related to performance obligations that are part of a contract whose original expected duration is one year or less, (ii) revenues that are in the form of sales- or usage-based royalties and (iii) revenues related to performance obligations for which the Company elects to recognize revenue in the amount it has a right to invoice.


		For the three months ended December 31,				For the six months ended December 31,					For the three months ended March 31,				For the nine months ended March 31,
		2021		2020		2021		2020					2022		2021		2022		2021
		(in millions)								(in millions)
Depreciation and amortization	Depreciation and amortization											Depreciation and amortization
Cable Network Programming	Cable Network Programming	$	17	$	12	$	27	$	25			Cable Network Programming	$	16	$	16	$	43	$	41
Television	Television	28		26		54		51				Television	28		26		82		77
Other, Corporate and Eliminations	Other, Corporate and Eliminations	48		32		91		62				Other, Corporate and Eliminations	48		36		139		98
Total depreciation and amortization	Total depreciation and amortization	$	93	$	70	$	172	$	138			Total depreciation and amortization	$	92	$	78	$	264	$	216


		As of December 31, 2021		As of June 30, 2021			As of March 31, 2022		As of June 30, 2021
		(in millions)					(in millions)
Assets	Assets					Assets
Cable Network Programming	Cable Network Programming	$	2,623	$	2,577	Cable Network Programming	$	2,638	$	2,577
Television	Television	9,094		7,305		Television	8,111		7,305
Other, Corporate and Eliminations	Other, Corporate and Eliminations	10,330		12,145		Other, Corporate and Eliminations	10,619		12,145
Investments	Investments	831		899		Investments	648		899
Total assets	Total assets	$	22,878	$	22,926	Total assets	$	22,016	$	22,926

1415

FOX CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 11. ADDITIONAL FINANCIAL INFORMATION

Other, net

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


		For the three months ended December 31,				For the six months ended December 31,					For the three months ended March 31,				For the nine months ended March 31,
		2021		2020		2021		2020					2022		2021		2022		2021
		(in millions)								(in millions)
Net (losses) gains on investments in equity securities(a)	Net (losses) gains on investments in equity securities(a)	$	(165)	$	220	$	(102)	$	341			Net (losses) gains on investments in equity securities(a)	$	(191)	$	43	$	(293)	$	384
U.K Newspaper Matters Indemnity(b)	U.K Newspaper Matters Indemnity(b)	(32)		(15)		(49)		(28)				U.K Newspaper Matters Indemnity(b)	(22)		(15)		(71)		(43)
Transaction Costs(c)	Transaction Costs(c)	(11)		(18)		(24)		433				Transaction Costs(c)	(17)		(2)		(41)		431
Other	Other	(3)		(15)		33		(55)				Other	(3)		35		30		(20)
Total other, net	Total other, net	$	(211)	$	172	$	(142)	$	691			Total other, net	$	(233)	$	61	$	(375)	$	752


(a)			Net (losses) gains on investments in equity securities for the three and ~~six~~nine months ended ~~December~~March 31, ~~2021~~2022 and ~~2020~~2021 included the (losses) gains related to the change in fair value of the Company’s investment in Flutter (See Note 4—Fair Value).


(b)			See Note 8—Commitments and Contingencies under the heading “U.K. Newspaper Matters Indemnity.”


(c)			The transaction costs for the ~~six~~nine months ended ~~December~~March 31, ~~2020~~2021 are primarily related to the reimbursement from Disney of $462 million related to the substantial settlement of the Company’s prepayment of its share of the Divestiture Tax (as defined in Note 1—Description of Business and Basis of Presentation in the 2021 Form 10-K).

Other Non-Current Assets

The following table sets forth the components of Other non-current assets included in the Balance Sheets:


		As of December 31, 2021		As of June 30, 2021			As of March 31, 2022		As of June 30, 2021
		(in millions)					(in millions)
Investments(a)	Investments(a)	$	831	$	899	Investments(a)	$	648	$	899
Operating lease ROU assets	Operating lease ROU assets	476		469		Operating lease ROU assets	454		469
Inventories, net	Inventories, net	462		199		Inventories, net	487		199
Grantor Trust	Grantor Trust	300		304		Grantor Trust	293		304
Other	Other	207		187		Other	217		187
Total other non-current assets	Total other non-current assets	$	2,276	$	2,058	Total other non-current assets	$	2,099	$	2,058


(a)			~~Included~~Includes investments accounted for at fair value on a recurring basis of ~~$689~~$506 million and $788 million as of ~~December~~March 31, ~~2021~~2022 and June 30, 2021, respectively (See Note 4—Fair Value).

1516

FOX CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Accounts Payable, Accrued Expenses and Other Current Liabilities

The following table sets forth the components of Accounts payable, accrued expenses and other current liabilities included in the Balance Sheets:


		As of December 31, 2021		As of June 30, 2021			As of March 31, 2022		As of June 30, 2021
		(in millions)					(in millions)
Accrued expenses	Accrued expenses	$	850	$	1,077	Accrued expenses	$	862	$	1,077
Program rights payable	Program rights payable	771		659		Program rights payable	766		659
Deferred revenue	Deferred revenue	163		196		Deferred revenue	165		196
Operating lease liabilities	Operating lease liabilities	105		92		Operating lease liabilities	107		92
Other current liabilities	Other current liabilities	231		229		Other current liabilities	221		229
Total accounts payable, accrued expenses and other current liabilities	Total accounts payable, accrued expenses and other current liabilities	$	2,120	$	2,253	Total accounts payable, accrued expenses and other current liabilities	$	2,121	$	2,253

Other Liabilities

The following table sets forth the components of Other liabilities included in the Balance Sheets:


		As of December 31, 2021		As of June 30, 2021			As of March 31, 2022		As of June 30, 2021
		(in millions)					(in millions)
Accrued non-current pension/postretirement liabilities	Accrued non-current pension/postretirement liabilities	$	560	$	586	Accrued non-current pension/postretirement liabilities	$	544	$	586
Non-current operating lease liabilities	Non-current operating lease liabilities	406		409		Non-current operating lease liabilities	382		409
Other non-current liabilities	Other non-current liabilities	376		341		Other non-current liabilities	371		341
Total other liabilities	Total other liabilities	$	1,342	$	1,336	Total other liabilities	$	1,297	$	1,336

Supplemental Information


		For the six months ended December 31,					For the nine months ended March 31,
		2021		2020			2022		2021
		(in millions)					(in millions)
Supplemental cash flows information	Supplemental cash flows information					Supplemental cash flows information
Cash paid for interest	Cash paid for interest	$	(200)	$	(206)	Cash paid for interest	$	363	$	370
Cash paid for income taxes	Cash paid for income taxes	$	(155)	$	(92)	Cash paid for income taxes	$	(204)	$	(132)

Supplemental information on acquisitions	Supplemental information on acquisitions					Supplemental information on acquisitions
Fair value of assets acquired, excluding cash	Fair value of assets acquired, excluding cash	$	335	$	—	Fair value of assets acquired, excluding cash	$	348	$	—
Cash acquired	Cash acquired	10		—		Cash acquired	7		—
Liabilities assumed	Liabilities assumed	(48)		—		Liabilities assumed	(47)		—
Redeemable noncontrolling interests issued	Redeemable noncontrolling interests issued	(5)		—		Redeemable noncontrolling interests issued	(5)		—
Cash paid	Cash paid	(239)		—		Cash paid	(250)		—
Fair value of equity instruments issued as consideration to third parties(a)	Fair value of equity instruments issued as consideration to third parties(a)	53		—		Fair value of equity instruments issued as consideration to third parties(a)	53		—
Issuance of subsidiary common units	Issuance of subsidiary common units	(53)		—		Issuance of subsidiary common units	(53)		—
Fair value of equity instruments consideration	Fair value of equity instruments consideration	$	—	$	—	Fair value of equity instruments consideration	$	—	$	—

(a)

Includes Redeemable noncontrolling interests.

1617

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Readers should carefully review this document and the other documents filed by Fox Corporation (“FOX” or the “Company”) with the Securities and Exchange Commission (the “SEC”). This section should be read together with the unaudited interim consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q and the Annual Report on Form 10-K for the fiscal year ended June 30, 2021 as filed with the SEC on August 10, 2021 (the “2021 Form 10-K”). The unaudited consolidated financial statements are referred to as the “Financial Statements” herein.

INTRODUCTION

Management’s discussion and analysis of financial condition and results of operations is intended to help provide an understanding of the Company’s financial condition, changes in financial condition and results of operations. This discussion is organized as follows:

•Overview of the Company’s Business—This section provides a general description of the Company’s businesses, as well as developments that occurred during the three and ~~six~~nine months ended ~~December~~March 31, ~~2021~~2022 and ~~2020~~2021 that the Company believes are important in understanding its results of operations and financial condition or to disclose known trends.

•Results of Operations—This section provides an analysis of the Company’s results of operations for the three and ~~six~~nine months ended ~~December~~March 31, ~~2021~~2022 and ~~2020.~~2021. 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~~nine months ended ~~December~~March 31, ~~2021~~2022 and ~~2020,~~2021, as well as a discussion of the Company’s outstanding debt and commitments, both firm and contingent, that existed as of ~~December~~March 31, ~~2021.~~2022. Included in the discussion of outstanding debt is a discussion of the amount of financial capacity available to fund the Company’s future commitments and obligations, as well as a discussion of other financing arrangements.

•Caution Concerning Forward-Looking Statements—This section provides a description of the use of forward-looking information appearing in this Quarterly Report on Form 10-Q, including in Management’s Discussion and Analysis of Financial Condition and Results of Operations. Such information is based on management’s current expectations about future events which are subject to change and to inherent risks and uncertainties. Refer to Part I., Item 1A. “Risk Factors” in the 2021 Form 10-K and Part II., Item 1A. “Risk Factors” in the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2021, as filed with the SEC on November 3, 2021 (the “Q1 2022 Form 10-Q”), for a discussion of the risk factors applicable to the Company.

OVERVIEW OF THE COMPANY’S BUSINESS

The Company is a news, sports and entertainment company, which manages and reports its businesses in the following segments:

•Other, Corporate and Eliminations, which principally consists of the FOX Studio Lot, Credible Labs Inc. (“Credible”), corporate overhead costs and intracompany eliminations. The FOX Studio Lot, located in Los Angeles, California, provides television and film production services along with office space,

1718

studio operation services and includes all operations of the facility. Credible is a U.S. consumer finance marketplace.

RESULTS OF OPERATIONS

Results of Operations—For the three and ~~six~~nine months ended ~~December~~March 31, ~~2021~~2022 versus the three and ~~six~~nine months ended ~~December~~March 31, ~~2020.~~2021.

The following table sets forth the Company’s operating results for the three and ~~six~~nine months ended ~~December~~March 31, ~~2021~~2022, as compared to the three and ~~six~~nine months ended ~~December~~March 31, ~~2020:~~2021:


		For the three months ended December 31,								For the six months ended December 31,								For the three months ended March 31,												For the nine months ended March 31,
		2021		2020		Change		% Change		2021		2020		Change		% Change										2022				2021				Change				% Change			2022				2021				Change		% Change
(in millions, except %)	(in millions, except %)					Better/(Worse)								Better/(Worse)								(in millions, except %)								Better/(Worse)															Better/(Worse)
Revenues	Revenues																								Revenues
Affiliate fee	Affiliate fee	$	1,688	$	1,518	$	170	11	%	$	3,355	$	3,051	$	304	10	%								Affiliate fee	$	1,797			$	1,719			$	78			5	%		$	5,152			$	4,770			$	382	8	%
Advertising	Advertising	2,408		2,282		126		6	%	3,538		3,251		287		9	%								Advertising	1,307				1,198				109				9	%		4,845				4,449				396		9	%
Other	Other	345		287		58		20	%	593		502		91		18	%								Other	351				298				53				18	%		944				800				144		18	%
Total revenues	Total revenues	4,441		4,087		354		9	%	7,486		6,804		682		10	%								Total revenues	3,455				3,215				240				7	%		10,941				10,019				922		9	%
Operating expenses	Operating expenses	(3,667)		(3,346)		(321)		(10)	%	(5,238)		(4,514)		(724)		(16)	%								Operating expenses	(2,164)				(1,885)				(279)				(15)	%		(7,402)				(6,399)				(1,003)		(16)	%
Selling, general and administrative	Selling, general and administrative	(468)		(442)		(26)		(6)	%	(883)		(830)		(53)		(6)	%								Selling, general and administrative	(485)				(437)				(48)				(11)	%		(1,368)				(1,267)				(101)		(8)	%
Depreciation and amortization	Depreciation and amortization	(93)		(70)		(23)		(33)	%	(172)		(138)		(34)		(25)	%								Depreciation and amortization	(92)				(78)				(14)				(18)	%		(264)				(216)				(48)		(22)	%
Impairment and restructuring charges	Impairment and restructuring charges	—		—		—		—	%	—		(35)		35		100	%								Impairment and restructuring charges	—				—				—				—	%		—				(35)				35		100	%
Interest expense, net	Interest expense, net	(97)		(97)		—		—	%	(194)		(195)		1		1	%								Interest expense, net	(91)				(98)				7				7	%		(285)				(293)				8		3	%
Other, net	Other, net	(211)		172		(383)		**		(142)		691		(833)		**									Other, net	(233)				61				(294)				**			(375)				752				(1,127)		**
(Loss) income before income tax benefit (expense)		(95)		304		(399)		**		857		1,783		(926)		(52)	%
Income tax benefit (expense)		22		(74)		96		**		(222)		(436)		214		49	%
Net (loss) income		(73)		230		(303)		**		635		1,347		(712)		(53)	%
Income before income tax expense																			Income before income tax expense	390			778					(388)				(50)	%			1,247			2,561				(1,314)				(51)	%
Income tax expense																			Income tax expense	(100)			(196)					96				49	%			(322)			(632)				310				49	%
Net income																			Net income	290			582					(292)				(50)	%			925			1,929				(1,004)				(52)	%
Less: Net income attributable to noncontrolling interests	Less: Net income attributable to noncontrolling interests	(12)		(6)		(6)		(100)	%	(19)		(17)		(2)		(12)	%								Less: Net income attributable to noncontrolling interests	(7)				(15)				8				53	%		(26)				(32)				6		19	%
Net (loss) income attributable to Fox Corporation stockholders		$	(85)	$	224	$	(309)	**		$	616	$	1,330	$	(714)	(54)	%
Net income attributable to Fox Corporation stockholders																			Net income attributable to Fox Corporation stockholders	$	283		$	567				$	(284)			(50)	%			$	899		$	1,897			$	(998)			(53)	%



** not meaningful

Overview

For the three months ended ~~December~~March 31, ~~2021~~2022 and ~~2020~~2021

The Company’s revenues increased 9%7% for the three months ended ~~December~~March 31, ~~2021,~~2022, as compared to the corresponding period of fiscal 2021, due to higher affiliate fee, advertising and other revenues. The increase in affiliate fee revenue was primarily due to ~~the~~ higher average rates per subscriber, led by contractual rate increases on existing affiliate agreements, partially offset by a lower average number of subscribers. ~~Also impacting the increase was the absence of prior year affiliate fee credits as a result of coronavirus disease 2019 (“COVID-19”) related under-delivery of college football games.~~ The increase in advertising revenue was

primarily attributable to higher ~~National Football League ("NFL"), Major League Baseball ("MLB")~~pricing and ~~college football pricing at the FOX Network, higher pricing~~ratings at FOX News Media, growth at Tubi, and a higher ~~number of live events~~sports ratings and pricing partially offset by lower entertainment ratings at the national sports networks due to the impact of COVID-19 in the prior year quarter. Partially offsetting this increase was lower political advertising revenue due to the absence of the prior year presidential and congressional elections.FOX Network. The increase in other revenues was primarily attributable to higher sports sublicensing revenues due to the impact of coronavirus disease 2019 ("COVID-19") in the prior year quarter, the current year quarter impact of acquisitions of entertainment production companies, ~~higher sports sublicensing revenues due to the impact of COVID-19 in the prior year quarter,~~ and higher FOX Nation subscription revenues, partially offset by the

impact of the divestiture of the Company's sports marketing ~~businesses.~~businesses (See Note 3—Acquisitions, Disposals and Other Transactions in the 2021 Form 10-K under the heading “Acquisitions and Disposals").

Operating expenses increased ~~10%~~15% for the three months ended ~~December~~March 31, ~~2021,~~2022, as compared to the corresponding period of fiscal 2021, primarily due to higher sports programming rights amortization and production costs primarily related to ~~NFL~~National Football League (“NFL”) and ~~MLB~~college basketball content, which was impacted by COVID-19 in the prior year quarter. Also contributing to this increase was increased digital investment at Tubi and FOX News Media, and higher entertainment programming rights amortization principally due to ~~more hours~~the recognition of ~~original scripted programming~~an approximately $30 million write-down of unamortized production costs related to a television series as ~~compared to the prior year quarter, which was impacted by COVID-19.~~a result of COVID-19 related costs and production delays.

For the ~~six~~nine months ended ~~December~~March 31, ~~2021~~2022 and ~~2020~~2021

The Company’s revenues increased ~~10%~~9% for the ~~six~~nine months ended ~~December~~March 31, ~~2021,~~2022, as compared to the corresponding period of fiscal 2021, due to higher affiliate fee, advertising and other revenues. The increase in affiliate fee revenue was primarily due to higher average rates per subscriber, led by contractual rate increases on existing affiliate agreements and from affiliate agreement renewals, partially offset by a lower average number of subscribers. Also impacting the increase was the absence of prior year affiliate fee credits as a result of the COVID-19 related under-delivery of college football games. The increase in advertising revenue was primarily due to higher ~~sports and entertainment~~ pricing at the FOX Network ~~higher pricing at~~and FOX News Media, growth at Tubi, and a higher number of live events at the national sports networks due to the impact of COVID-19 in the prior year period. Partially offsetting this increase was lower political advertising revenue at the FOX Television Stations due to the absence of the prior year presidential and congressional elections. The increase in other revenues was primarily due to higher sports sublicensing revenues which were impacted by COVID-19 in the prior year period, the current year period impact of acquisitions of entertainment production companies, and higher FOX Nation subscription revenues, partially offset by the impact of the divestiture of the Company's sports marketing businesses.

Operating expenses increased 16% for the ~~six~~nine months ended ~~December~~March 31, ~~2021,~~2022, as compared to the corresponding period of fiscal 2021, primarily due to higher sports programming rights amortization and production costs related to NFL, ~~MLB~~Major League Baseball (“MLB”) and college football content including a higher number of live events due to the impact of COVID-19 in the prior year period, increased digital investment at Tubi, and higher entertainment programming rights amortization and marketing costs due to more hours of original scripted programming as compared to the prior year period, which was impacted by COVID-19. This increase was partially offset by the absence of events that were shifted into the prior year period as a result of COVID-19 rescheduling, including National Association of Stock Car Auto Racing (“NASCAR”) Cup Series races and additional MLB regular season games, ~~as a result of COVID-19 rescheduling,~~ and the impact of the divestiture of the Company's sports marketing businesses.

Selling, general and administrative—Selling, general and administrative ~~expense~~expenses increased 6%11% and 8% for the three and ~~six~~nine months ended ~~December~~March 31, ~~2021,~~2022, respectively, as compared to the corresponding periods of fiscal 2021, primarily due to higher technology costs related to the Company's digital ~~initiatives.~~initiatives and higher marketing expenses at FOX News Media, partially offset by the impact of the divestiture of the Company's sports marketing businesses.

Depreciation and amortization—Depreciation and amortization expense increased ~~33%~~18% and ~~25%~~22% for the three and ~~six~~nine months ended ~~December~~March 31, ~~2021,~~2022, respectively, as compared to the corresponding periods of fiscal 2021, primarily due to assets placed into service during the fourth quarter of fiscal 2021 for the Company's standalone broadcast technical facilities.

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

Income tax ~~benefit (expense)~~expense—The Company's tax provision and related effective tax rate of 23% for the three months ended December 31, 2021, was higher than the statutory rate of 21% primarily due to state taxes, offset by other permanent items. The Company's tax provision and related effective tax rate of 26% for the ~~six~~three and nine months ended ~~December~~March 31, 2022 was higher than the statutory rate of 21% primarily due to state taxes.

The Company’s tax provision and related effective tax rate of 25% for the three and nine months ended March 31, 2021 was higher than the statutory rate of 21% primarily due to state taxes and, ~~other permanent items.~~

~~The Company’s tax provision and related effective tax rate of 24%~~ for the ~~three and six~~nine months ended ~~December~~March 31, ~~2020 was higher than the statutory rate of 21% primarily due to state taxes which, for the six~~

~~months ended December 31, 2020,~~2021, was partially offset by a benefit from the reduction of uncertain tax positions for state tax audits.

Net ~~(loss)~~ income—~~The Company recorded a net loss of $73 million~~Net income decreased 50% and ~~net income of $635 million~~52% for the three and ~~six~~nine months ended ~~December~~March 31, ~~2021,~~2022, respectively, as compared to ~~net income~~the corresponding periods of ~~$230 million and $1.3 billion for the three and six months ended December 31, 2020, respectively. The decreases in the comparative periods are~~fiscal 2021, primarily due to the change in fair value

of the Company’s investment in Flutter Entertainment plc and ~~additionally~~lower Segment EBITDA (as defined below) at the Television segment. Also contributing to the decrease for the ~~six~~nine months ended ~~December~~March 31, ~~2021,~~2022 was the absence of the reimbursement from The Walt Disney Company ("Disney") of $462 million related to the substantial settlement of the Company’s prepayment of its share of the Divestiture Tax, which occurred during the ~~six~~nine months ended ~~December~~March 31, ~~2020~~2021 (See Note 11—Additional Financial Information to the accompanying Financial Statements under the heading “Other, net”).

Segment Analysis

The following tables set forth the Company’s Revenues and Segment EBITDA for the three and ~~six~~nine months ended ~~December~~March 31, ~~2021,~~2022, as compared to the three and ~~six~~nine months ended ~~December~~March 31, ~~2020:~~2021:


		For the three months ended December 31,								For the six months ended December 31,								For the three months ended March 31,				For the nine months ended March 31,
		2021		2020		Change		% Change		2021		2020		Change		% Change				2022		2021		Change		% Change		2022		2021		Change		% Change
(in millions, except %)	(in millions, except %)					Better/(Worse)								Better/(Worse)					(in millions, except %)					Better/(Worse)								Better/(Worse)
Revenues	Revenues																		Revenues
Cable Network Programming	Cable Network Programming	$	1,638	$	1,488	$	150	10	%	$	3,054	$	2,813	$	241	9	%		Cable Network Programming	$	1,583	$	1,471	$	112	8	%	$	4,637	$	4,284	$	353	8	%
Television	Television	2,759		2,556		203		8	%	4,340		3,906		434		11	%		Television	1,820		1,695		125		7	%	6,160		5,601		559		10	%
Other, Corporate and Eliminations	Other, Corporate and Eliminations	44		43		1		2	%	92		85		7		8	%		Other, Corporate and Eliminations	52		49		3		6	%	144		134		10		7	%
Total revenues	Total revenues	$	4,441	$	4,087	$	354	9	%	$	7,486	$	6,804	$	682	10	%		Total revenues	$	3,455	$	3,215	$	240	7	%	$	10,941	$	10,019	$	922	9	%

2021


		For the three months ended December 31,								For the six months ended December 31,								For the three months ended March 31,					For the nine months ended March 31,
		2021		2020		Change		% Change		2021		2020		Change		% Change					2022		2021		Change		% Change		2022		2021		Change		% Change
(in millions, except %)	(in millions, except %)					Better/(Worse)								Better/(Worse)					(in millions, except %)				Better/(Worse)								Better/(Worse)
Segment EBITDA	Segment EBITDA																			Segment EBITDA
Cable Network Programming	Cable Network Programming	$	668	$	571	$	97	17	%	$	1,442	$	1,352	$	90	7	%			Cable Network Programming	$	864	$	850	$	14	2	%	$	2,306	$	2,202	$	104	5	%
Television	Television	(273)		(185)		(88)		(48)	%	86		272		(186)		(68)	%			Television	35		135		(100)		(74)	%	121		407		(286)		(70)	%
Other, Corporate and Eliminations	Other, Corporate and Eliminations	(85)		(81)		(4)		(5)	%	(154)		(153)		(1)		(1)	%			Other, Corporate and Eliminations	(88)		(86)		(2)		(2)	%	(242)		(239)		(3)		(1)	%
Adjusted EBITDA(a)	Adjusted EBITDA(a)	$	310	$	305	$	5	2	%	$	1,374	$	1,471	$	(97)	(7)	%			Adjusted EBITDA(a)	$	811	$	899	$	(88)	(10)	%	$	2,185	$	2,370	$	(185)	(8)	%


(a)			For a discussion of Adjusted EBITDA and a reconciliation of Net income to Adjusted EBITDA, see “Non-GAAP Financial Measures” below.

Cable Network Programming ~~(41%~~(43% of the Company’s revenues for the first ~~six~~nine months of fiscal 2022 and 2021)


		For the three months ended December 31,								For the six months ended December 31,								For the three months ended March 31,					For the nine months ended March 31,
		2021		2020		Change		% Change		2021		2020		Change		% Change					2022		2021		Change		% Change		2022		2021		Change		% Change
(in millions, except %)	(in millions, except %)					Better/(Worse)								Better/(Worse)					(in millions, except %)				Better/(Worse)								Better/(Worse)
Revenues	Revenues																			Revenues
Affiliate fee	Affiliate fee	$	1,039	$	928	$	111	12	%	$	2,065	$	1,901	$	164	9	%			Affiliate fee	$	1,097	$	1,068	$	29	3	%	$	3,162	$	2,969	$	193	7	%
Advertising	Advertising	454		441		13		3	%	765		740		25		3	%			Advertising	339		283		56		20	%	1,104		1,023		81		8	%
Other	Other	145		119		26		22	%	224		172		52		30	%			Other	147		120		27		23	%	371		292		79		27	%
Total revenues	Total revenues	1,638		1,488		150		10	%	3,054		2,813		241		9	%			Total revenues	1,583		1,471		112		8	%	4,637		4,284		353		8	%
Operating expenses	Operating expenses	(837)		(786)		(51)		(6)	%	(1,360)		(1,220)		(140)		(11)	%			Operating expenses	(580)		(505)		(75)		(15)	%	(1,940)		(1,725)		(215)		(12)	%
Selling, general and administrative	Selling, general and administrative	(137)		(137)		—		—	%	(261)		(252)		(9)		(4)	%			Selling, general and administrative	(144)		(122)		(22)		(18)	%	(405)		(374)		(31)		(8)	%
Amortization of cable distribution investments	Amortization of cable distribution investments	4		6		(2)		(33)	%	9		11		(2)		(18)	%			Amortization of cable distribution investments	5		6		(1)		(17)	%	14		17		(3)		(18)	%
Segment EBITDA	Segment EBITDA	$	668	$	571	$	97	17	%	$	1,442	$	1,352	$	90	7	%			Segment EBITDA	$	864	$	850	$	14	2	%	$	2,306	$	2,202	$	104	5	%

For the three months ended ~~December~~March 31, ~~2021~~2022 and ~~2020~~2021

Revenues at the Cable Network Programming segment increased ~~10%~~8% for thethree months ended ~~December~~March 31, ~~2021,~~2022, as compared to the corresponding period of fiscal 2021, due to higher affiliate fee, advertising and other revenues. The increase in affiliate fee revenue was primarily due to contractual rate increases on existing affiliate agreements, partially offset by a lower average number of subscribers. ~~Also impacting the increase was the absence of prior year affiliate fee credits as a result of the COVID-19 related under-delivery of college football games.~~ The decrease in the average number of subscribers was due to a reduction in traditional MVPD subscribers, partially offset by an increase in digital MVPD subscribers. The increase in advertising revenue was primarily due to higher pricing and ratings, partially offset by the effect of higher preemptions associated with breaking news coverage at FOX News Media partially offset by lower political advertising revenue due to the absence of the prior year presidential elections in the current year period. Also impacting the increase was higher MLB pricing and a higher number of live events at the national sports networks, including the broadcast of additional MLB postseason games.Media. The increase in other revenues was primarily due to higher sports sublicensing revenues, ~~due to the impact of~~which were impacted by COVID-19 in the prior year quarter, and higher FOX Nation subscription revenues, partially offset by the impact of the divestiture of the Company's sports marketing businesses.

Cable Network Programming Segment EBITDA increased ~~17%~~2% for the three months ended ~~December~~March 31, ~~2021,~~2022, as compared to the corresponding period of fiscal 2021, primarily due to the revenue increases noted above, partially offset by higher expenses. Operating expenses increased primarily due to higher sports programming

rights amortization and production costs ~~primarily~~principally related to ~~MLB~~college basketball content, ~~and the return of a full college football season as a result of the impact of~~which was impacted by COVID-19 in the prior year quarter, and higher investment in digital growth initiatives at FOX ~~Nation costs.~~News Media. Selling, general and administrative expenses increased principally due to higher marketing

expenses at FOX News Media, partially offset by the impact of the divestiture of the Company's sports marketing businesses.

For the ~~six~~nine months ended ~~December~~March 31, ~~2021~~2022 and ~~2020~~2021

Revenues at the Cable Network Programming segment increased 9%8% for the ~~six~~nine months ended ~~December~~March 31, ~~2021,~~2022, as compared to the corresponding period of fiscal 2021, due to higher affiliate fee, advertising and other revenues. The increase in affiliate fee revenue was primarily due to contractual rate increases on existing affiliate agreements and from affiliate agreement renewals, partially offset by a lower average number of subscribers. Also impacting the increase was the absence of prior year affiliate fee credits as a result of the COVID-19 related under-delivery of college football games. The decrease in the average number of subscribers was due to a reduction in traditional MVPD subscribers, partially offset by an increase in digital MVPD subscribers. The increase in advertising revenue was primarily due to the impact of a higher number of live events at the national sports networks, primarily the result of additional MLB postseason games and the return of a full college football schedule that was shortened due to COVID-19 in the prior year ~~period and~~period. Also contributing to this increase was higher MLB and FOX News Media pricing, partially offset by lower political advertising revenue due to the absence of the prior year presidential ~~elections in the current year period.~~elections. The increase in other revenues was primarily due to higher sports sublicensing revenues, which were impacted by COVID-19 in the prior year, and higher FOX Nation subscription revenues, partially offset by the impact of the divestiture of the Company's sports marketing businesses.

Cable Network Programming Segment EBITDA increased 7%5% for the ~~six~~nine months ended ~~December~~March 31, ~~2021,~~2022, as compared to the corresponding period of fiscal 2021, primarily due to the revenue increases noted above, partially offset by higher expenses. Operating expenses increased due to higher sports programming rights amortization and production costs primarily related to ~~MLB content and~~ the return of a full college football and basketball season as a result of the impact of COVID-19 in the prior year ~~period.~~period and higher investment in digital growth initiatives at FOX News Media. This increase was partially offset by the absence of events in the current year period that were shifted into the prior year period as a result of COVID-19 rescheduling, including NASCAR Cup Series races and additional MLB regular season games, ~~as a result of COVID-19 rescheduling,~~ and the impact of the divestiture of the Company's sports marketing businesses. Selling, general and administrative expenses increased ~~for the six months ended December 31, 2021,~~ principally due to higher ~~investment in digital growth initiatives~~marketing expenses at FOX News ~~Media.~~Media, partially offset by the impact of the divestiture of the Company's sports marketing businesses.

Television ~~(58% and 57%~~(56% of the Company’s revenues for the first ~~six~~nine months of fiscal 2022 and ~~2021, respectively)~~2021)


		For the three months ended December 31,								For the six months ended December 31,								For the three months ended March 31,					For the nine months ended March 31,
		2021		2020		Change		% Change		2021		2020		Change		% Change					2022		2021		Change		% Change		2022		2021		Change		% Change
(in millions, except %)	(in millions, except %)					Better/(Worse)								Better/(Worse)					(in millions, except %)				Better/(Worse)								Better/(Worse)
Revenues	Revenues																			Revenues
Advertising	Advertising	$	1,954	$	1,841	$	113	6	%	$	2,773	$	2,511	$	262	10	%			Advertising	$	969	$	915	$	54	6	%	$	3,742	$	3,426	$	316	9	%
Affiliate fee	Affiliate fee	649		590		59		10	%	1,290		1,150		140		12	%			Affiliate fee	700		651		49		8	%	1,990		1,801		189		10	%
Other	Other	156		125		31		25	%	277		245		32		13	%			Other	151		129		22		17	%	428		374		54		14	%
Total revenues	Total revenues	2,759		2,556		203		8	%	4,340		3,906		434		11	%			Total revenues	1,820		1,695		125		7	%	6,160		5,601		559		10	%
Operating expenses	Operating expenses	(2,809)		(2,540)		(269)		(11)	%	(3,835)		(3,254)		(581)		(18)	%			Operating expenses	(1,557)		(1,359)		(198)		(15)	%	(5,392)		(4,613)		(779)		(17)	%
Selling, general and administrative	Selling, general and administrative	(223)		(201)		(22)		(11)	%	(419)		(380)		(39)		(10)	%			Selling, general and administrative	(228)		(201)		(27)		(13)	%	(647)		(581)		(66)		(11)	%
Segment EBITDA	Segment EBITDA	$	(273)	$	(185)	$	(88)	(48)	%	$	86	$	272	$	(186)	(68)	%			Segment EBITDA	$	35	$	135	$	(100)	(74)	%	$	121	$	407	$	(286)	(70)	%

For the three months ended ~~December~~March 31, 2022 and 2021

Revenues at the Television segment increased 7% for thethree months ended March 31, 2022, as compared to the corresponding period of fiscal 2021, due to higher advertising, affiliate fee and ~~2020~~other revenues. The increase in advertising revenue was primarily attributable to growth at Tubi, one additional week of NFL regular season games as a result of the NFL schedule expansion, and higher sports ratings and pricing at the FOX Network, partially offset by the absence of the rotating NFL Divisional playoff game in the current year quarter and lower entertainment ratings at the FOX Network. The increase in affiliate fee revenue was primarily due to higher fees received from television stations that are affiliated with the FOX Network, and higher average

rates per subscriber partially offset by a lower average number of subscribers at the Company’s owned and operated television stations. The increase in other revenues was primarily due to the current year quarter impact of acquisitions of entertainment production companies.

Television Segment EBITDA decreased 74% for the three months ended March 31, 2022, as compared to the corresponding period of fiscal 2021, as the revenue increases noted above were more than offset by higher expenses. Operating expenses increased primarily due to increased digital investment at Tubi, higher sports programming rights amortization and production costs primarily related to NFL content, and higher entertainment programming rights amortization principally due to the recognition of an approximately $30 million write-down of unamortized production costs related to a television series as a result of COVID-19 related costs and production delays. Selling, general and administrative expenses increased primarily due to the current year impact of acquisitions of entertainment production companies and higher technology costs related to the Company's digital initiatives.

For the nine months ended March 31, 2022 and 2021

Revenues at the Television segment increased 8%10% for the ~~three~~nine months ended ~~December~~March 31, ~~2021,~~2022, as compared to the corresponding period of fiscal 2021, due to higher advertising, affiliate fee and other revenues. The increase in advertising revenue was primarily attributable to higher ~~NFL, MLB~~sports ratings and pricing as well as the return of a full schedule of college football ~~pricing~~in the current year period at the FOX Network and growth at Tubi, partially offset by lower political advertising revenue at the FOX Television Stations due to the absence of the prior year presidential and congressional elections. The increase in affiliate fee revenue was primarily due to higher ~~average rates per subscriber partially offset by a lower average number of subscribers at the Company’s owned and operated television stations, and higher~~ fees received from

television stations that are affiliated with the FOX ~~Network. The increase in other revenues was primarily due to the current year impact of acquisitions of entertainment production companies and higher content revenues at FOX Entertainment.~~

Television Segment EBITDA decreased 48% for the three months ended December 31, 2021, as compared to the corresponding period of fiscal 2021, as the revenue increases noted above were more than offset by higher expenses. Operating expenses increased primarily due to higher sports programming rights amortization and production costs primarily related to NFL and MLB content, increased digital investment at Tubi, and higher entertainment programming rights amortization due to more hours of original scripted programming as compared to the prior year quarter, which was impacted by COVID-19. Selling, general and administrative expenses increased primarily due to higher technology costs related to the Company's digital initiatives.

~~For the six months ended December 31, 2021 and 2020~~

Revenues at the Television segment increased 11% for the six months ended December 31, 2021, as compared to the corresponding period of fiscal 2021, due to higher advertising, affiliate fee, and other revenues. The increase in advertising revenue was primarily attributable to higher sports and entertainment pricing at the FOX Network, and growth at Tubi, partially offset by lower political advertising revenue at the FOX Television Stations due to the absence of the prior year presidential and congressional elections. The increase in affiliate fee revenue was primarily due to higher average rates per subscriber partially offset by a lower average number of subscribers at the Company’s owned and operated television ~~stations, and higher fees received from television stations that are affiliated with the FOX Network.~~stations. The increase in other revenues was primarily due to the current year period impact of acquisitions of entertainment production companies and higher content revenues at FOX Entertainment.

Television Segment EBITDA decreased ~~68%~~70% for the ~~six~~nine months ended ~~December~~March 31, ~~2021,~~2022, as compared to the corresponding period of fiscal 2021, as the revenue increases noted above were more than offset by higher expenses. Operating expenses increased primarily due to increased digital investment at Tubi, higher sports programming rights amortization and production costs primarily related to NFL, MLB and college football content including a higher number of live events as compared to the COVID-19 impacted prior year period, ~~increased digital investment at Tubi,~~ and higher entertainment programming rights amortization and marketing costs due to more hours of original scripted programming as compared to the prior year ~~quarter,~~period, which was impacted by COVID-19. Selling, general and administrative expenses increased primarily due to higher technology costs related to the Company's digital initiatives.

Other, Corporate and Eliminations (1% ~~and 2%~~ of the Company’s revenues for the first ~~six~~nine months of fiscal 2022 and ~~2021, respectively)~~2021)


		For the three months ended December 31,								For the six months ended December 31,								For the three months ended March 31,					For the nine months ended March 31,
		2021		2020		Change		% Change		2021		2020		Change		% Change					2022		2021		Change		% Change		2022		2021		Change		% Change
(in millions, except %)	(in millions, except %)					Better/(Worse)								Better/(Worse)					(in millions, except %)				Better/(Worse)								Better/(Worse)
Revenues	Revenues	$	44	$	43	$	1	2	%	$	92	$	85	$	7	8	%			Revenues	$	52	$	49	$	3	6	%	$	144	$	134	$	10	7	%
Operating expenses	Operating expenses	(21)		(20)		(1)		(5)	%	(43)		(40)		(3)		(8)	%			Operating expenses	(27)		(21)		(6)		(29)	%	(70)		(61)		(9)		(15)	%
Selling, general and administrative	Selling, general and administrative	(108)		(104)		(4)		(4)	%	(203)		(198)		(5)		(3)	%			Selling, general and administrative	(113)		(114)		1		1	%	(316)		(312)		(4)		(1)	%
Segment EBITDA	Segment EBITDA	$	(85)	$	(81)	$	(4)	(5)	%	$	(154)	$	(153)	$	(1)	(1)	%			Segment EBITDA	$	(88)	$	(86)	$	(2)	(2)	%	$	(242)	$	(239)	$	(3)	(1)	%

For the three and ~~six~~nine months ended ~~December~~March 31, ~~2021~~2022 and ~~2020~~2021

Revenues at the Other, Corporate and Eliminations segment for the three and ~~six~~nine months ended ~~December~~March 31, ~~2021~~2022 and ~~2020~~2021 include revenues generated by Credible and the operation of the FOX Studios lot for third parties. Operating expenses for the three and ~~six~~nine months ended ~~December~~March 31, 2022 and 2021 include advertising and ~~2020 include~~promotional expenses at Credible and the costs of operating the FOX Studios lot for third ~~parties and advertising and promotional expenses at Credible.~~parties. Selling, general and administrative expenses for the three and ~~six~~nine months ended ~~December~~March 31, ~~2021~~2022 and ~~2020~~2021 primarily relate to employee costs and professional fees, the costs of operating the FOX Studios lot for third parties and advertising and promotional expenses at Credible.

2324

Non-GAAP Financial Measures

Adjusted EBITDA is defined as Revenues less Operating expenses and Selling, general and administrative expenses. Adjusted EBITDA does not include: Amortization of cable distribution investments, Depreciation and amortization, Impairment and restructuring charges, Interest expense, net, Other, net and Income tax ~~(benefit)~~ expense.

Management believes that information about Adjusted EBITDA assists all users of the Company’s Financial Statements by allowing them to evaluate changes in the operating results of the Company’s portfolio of businesses separate from non-operational factors that affect Net income, thus providing insight into both operations and the other factors that affect reported results. Adjusted EBITDA provides management, investors and equity analysts a measure to analyze the operating performance of the Company’s business and its enterprise value against historical data and competitors’ data, although historical results, including Adjusted EBITDA, may not be indicative of future results (as operating performance is highly contingent on many factors, including customer tastes and preferences and the impact of COVID-19 and other widespread health emergencies or pandemics and measures to contain their spread).

Adjusted EBITDA is considered a non-GAAP financial measure and should be considered in addition to, not as a substitute for, net income, cash flow and other measures of financial performance reported in accordance with 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. Adjusted EBITDA may not be comparable to similarly titled measures reported by other companies.

The following table reconciles Net income to Adjusted EBITDA for the three and ~~six~~nine months ended ~~December~~March 31, ~~2021,~~2022, as compared to the three and ~~six~~nine months ended ~~December~~March 31, ~~2020:~~2021:


		For the three months ended December 31,				For the six months ended December 31,				For the three months ended March 31,		For the nine months ended March 31,
		2021		2020		2021		2020				2022		2021		2022		2021
		(in millions)								(in millions)
Net (loss) income		$	(73)	$	230	$	635	$	1,347
Net income											Net income	$	290	$	582	$	925	$	1,929
Add	Add										Add
Amortization of cable distribution investments	Amortization of cable distribution investments	4		6		9		11			Amortization of cable distribution investments	5		6		14		17
Depreciation and amortization	Depreciation and amortization	93		70		172		138			Depreciation and amortization	92		78		264		216
Impairment and restructuring charges	Impairment and restructuring charges	—		—		—		35			Impairment and restructuring charges	—		—		—		35
Interest expense, net	Interest expense, net	97		97		194		195			Interest expense, net	91		98		285		293
Other, net	Other, net	211		(172)		142		(691)			Other, net	233		(61)		375		(752)
Income tax (benefit) expense		(22)		74		222		436
Income tax expense											Income tax expense	100		196		322		632
Adjusted EBITDA	Adjusted EBITDA	$	310	$	305	$	1,374	$	1,471		Adjusted EBITDA	$	811	$	899	$	2,185	$	2,370

The following table sets forth the computation of Adjusted EBITDA for the three and ~~six~~nine months ended ~~December~~March 31, ~~2021,~~2022, as compared to the three and ~~six~~nine months ended ~~December~~March 31, ~~2020.~~2021.


		For the three months ended December 31,				For the six months ended December 31,				For the three months ended March 31,		For the nine months ended March 31,
		2021		2020		2021		2020				2022		2021		2022		2021
		(in millions)								(in millions)
Revenues	Revenues	$	4,441	$	4,087	$	7,486	$	6,804		Revenues	$	3,455	$	3,215	$	10,941	$	10,019
Operating expenses	Operating expenses	(3,667)		(3,346)		(5,238)		(4,514)			Operating expenses	(2,164)		(1,885)		(7,402)		(6,399)
Selling, general and administrative	Selling, general and administrative	(468)		(442)		(883)		(830)			Selling, general and administrative	(485)		(437)		(1,368)		(1,267)
Amortization of cable distribution investments	Amortization of cable distribution investments	4		6		9		11			Amortization of cable distribution investments	5		6		14		17
Adjusted EBITDA	Adjusted EBITDA	$	310	$	305	$	1,374	$	1,471		Adjusted EBITDA	$	811	$	899	$	2,185	$	2,370

2425

LIQUIDITY AND CAPITAL RESOURCES

Current Financial Condition

The Company has approximately ~~$4.3~~$4.6 billion of cash and cash equivalents as of ~~December~~March 31, ~~2021~~2022 and an unused five-year $1.0 billion unsecured revolving credit facility (See Note 5—Borrowings to the accompanying Financial Statements). The Company also has access to the worldwide capital markets, subject to market conditions. As of ~~December~~March 31, ~~2021,~~2022, the Company was in compliance with all of the covenants under the revolving credit facility, and it does not anticipate any noncompliance with such covenants.

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

Sources and Uses of Cash

Net cash ~~(used in)~~ provided by operating activities for the ~~six~~nine months ended ~~December~~March 31, ~~2021~~2022 and ~~2020~~2021 was as follows (in millions):

For the six months ended December 31, 2021 2020
Net cash (used in) provided by operating activities $ (656) $ 237


For the nine months ended March 31,	2022		2021
Net cash provided by operating activities	$	951	$	1,866

The ~~change~~decrease in net cash ~~(used in)~~ provided by operating activities during the ~~six~~nine months ended ~~December~~March 31, ~~2021,~~2022, as compared to the corresponding period of fiscal 2021, was primarily due to higher sports and entertainment programming payments, ~~as a result of the prior year impact of COVID-19~~investments in our AVOD and other digital platforms, as well as lower Adjusted ~~EBITDA.~~EBITDA and higher tax payments.

Net cash used in investing activities for the ~~six~~nine months ended ~~December~~March 31, ~~2021~~2022 and ~~2020~~2021 was as follows (in millions):


For the six months ended December 31,		2021		2020
For the nine months ended March 31,						For the nine months ended March 31,	2022		2021
Net cash used in investing activities	Net cash used in investing activities	$	(296)	$	(329)	Net cash used in investing activities	$	(386)	$	(329)

The ~~decrease~~increase in net cash used in investing activities during the ~~six~~nine months ended ~~December~~March 31, ~~2021,~~2022, as compared to the corresponding period of fiscal 2021, was primarily due to the ~~absence~~fiscal 2022 acquisitions (See Note 2—Acquisitions, Disposals, and Other Transactions to the accompanying Financial Statements), partially offset by lower capital expenditures as a result of ~~payments related to~~ the Company's new standalone broadcast technical facilities ~~which were~~being placed into service in fiscal ~~2021, and proceeds from the disposition of property, plant and equipment, partially offset by fiscal 2022 acquisitions and investments.~~2021.

Net cash used in financing activities for ~~six~~nine months ended ~~December~~March 31, ~~2021~~2022 and ~~2020~~2021 was as follows (in millions):


For the six months ended December 31,		2021		2020
For the nine months ended March 31,						For the nine months ended March 31,	2022		2021
Net cash used in financing activities	Net cash used in financing activities	$	(679)	$	(51)	Net cash used in financing activities	$	(1,817)	$	(417)

The increase in net cash used in financing activities during the ~~six~~nine months ended ~~December~~March 31, ~~2021,~~2022, as compared to the corresponding prior year period of fiscal 2021, was primarily due to the $750 million repayment of senior notes that matured in January 2022 (See Note 5—Borrowings to the accompanying Financial Statements), the absence of cash received from Disney in fiscal 2021, including the $462 million reimbursement related to the Divestiture ~~Tax.~~Tax, and the timing of the dividends paid to the Company's stockholders in fiscal 2022.

2526

Stock Repurchase Program

See Note 6—Stockholders’ Equity to the accompanying Financial Statements under the heading “Stock Repurchase Program.”

Dividends

~~Subsequent to December 31, 2021, the~~The Company declared a semi-annual dividend of $0.24 per share on both the Class A Common Stock and the Class B Common ~~Stock. The dividend declared is payable~~Stock during the three months ended March 31, 2022, which was paid on March 30, 2022 with a record date for determining dividend entitlements of March 2, 2022.

Debt Instruments

Borrowings include senior notes (See Note 9—Borrowings in the 2021 Form 10-K under the heading “Public Debt – Senior Notes Issued”). ~~Subsequent to December 31, 2021,~~In January 2022, $750 million of 3.666% senior notes ~~due in January 2022~~ matured and were repaid in full (See Note 5—Borrowings to the accompanying Financial Statements).

Ratings of the senior notes

The following table summarizes the Company’s credit ratings as of ~~December~~March 31, ~~2021:~~2022:

Rating Agency

Senior Debt

Outlook

Moody's

Baa2

Stable

Standard & Poor's

BBB

Stable

Revolving Credit Agreement

The Company has an unused five-year $1.0 billion unsecured revolving credit facility with a maturity date of March 2024 (See Note 5—Borrowings to the accompanying Financial Statements).

Commitments and Contingencies

See Note 8—Commitments and Contingencies to the accompanying Financial Statements.

Recent Accounting Pronouncements

See Note 1—Description of Business and Basis of Presentation to the accompanying Financial Statements under the heading “Recently Adopted and Recently Issued Accounting Guidance.”

CAUTION CONCERNING FORWARD-LOOKING STATEMENTS

This document contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical or current fact are “forward-looking statements” for purposes of federal and state securities laws, including any statements regarding (i) future earnings, revenues or other measures of the Company’s financial performance; (ii) the Company’s plans, strategies and objectives for future operations; (iii) proposed new programming or other offerings; (iv) future economic conditions or performance; and (v) assumptions underlying any of the foregoing. Forward-looking statements may include, among others, the words “may,” “will,” “should,” “likely,” “anticipates,” “expects,” “intends,” “plans,” “projects,” “believes,” “estimates,” “outlook” or any other similar words.

Although the Company’s management believes that the expectations reflected in any of the Company’s forward-looking statements are reasonable, actual results could differ materially from those projected or assumed in any forward-looking statements. The Company’s future financial condition and results of operations, as well as any forward-looking statements, are subject to change and to inherent risks and uncertainties, such as those disclosed or incorporated by reference in our filings with the SEC. Important factors that could cause the Company’s actual results, performance and achievements to differ materially from those estimates or

projections contained in the Company’s forward-looking statements include, but are not limited to, government regulation, economic, strategic, political and social conditions and the following factors:

•the impact of COVID-19 and other widespread health emergencies or pandemics and measures to contain their spread and related weak macroeconomic conditions and increased market volatility;

•the impact of COVID-19 specifically on the Company, including content disruptions that negatively affect the timing, volume or popularity of the Company’s programming, particularly sports programming, and potential non-cash impairment charges resulting from significant declines in the Company’s estimated revenues or the expected popularity of the Company’s programming;

•evolving technologies and distribution platforms and changes in consumer behavior as consumers seek more control over when, where and how they consume content, and related impacts on advertisers and traditional MVPDs;

•declines in advertising expenditures due to various factors such as the economic prospects of advertisers or the economy, major sports events and elections cycles, evolving technologies and distribution platforms and related changes in consumer behavior and shifts in advertisers’ expenditures, the evolving market for AVOD advertising campaigns, and audience measurement methodologies’ ability to accurately reflect actual viewership levels;

•further declines in the number of subscribers to traditional MVPD services;

•the failure to enter into or renew on favorable terms, or at all, affiliation or carriage agreements or arrangements through which the Company makes its content available for viewing through online video platforms;

•the highly competitive nature of the industry in which the Company’s businesses operate;

•the popularity of the Company’s content, including special sports events; and the continued popularity of the sports franchises, leagues and teams for which the Company has acquired programming rights;

•the Company’s ability to renew programming rights, particularly sports programming rights, on sufficiently favorable terms, or at all;

•damage to the Company’s brands or reputation;

•the inability to realize the anticipated benefits of the Company’s strategic investments and acquisitions;

•the loss of key personnel;

•labor disputes, including labor disputes involving professional sports leagues whose games or events the Company has the right to broadcast;

•lower than expected valuations associated with one of the Company’s reporting units, indefinite-lived intangible assets, investments or long-lived assets;

•a degradation, failure or misuse of the Company’s network and information systems and other technology relied on by the Company that causes a disruption of services or improper disclosure of personal data or other confidential information;

•content piracy and signal theft and the Company’s ability to protect its intellectual property rights;

•the failure to comply with laws, regulations, rules, industry standards or contractual obligations relating to privacy and personal data protection;

•changes in tax, federal communications or other laws, regulations, practices or the interpretations thereof (including changes in legislation currently being considered);

•the impact of any investigations or fines from governmental authorities, including Federal Communications Commission (“FCC”) rules and policies and FCC decisions regarding revocation, renewal or grant of station licenses, waivers and other matters;

•the failure or destruction of satellites or transmitter facilities the Company depends on to distribute its programming;

•unfavorable litigation or investigation results that require the Company to pay significant amounts or lead to onerous operating procedures;

•changes in GAAP or other applicable accounting standards and policies;

•the Company’s ability to achieve the benefits it expects to achieve as a standalone, publicly traded company;

•the Company’s ability to secure additional capital on acceptable terms;

•the impact of any payments the Company is required to make or liabilities it is required to assume under the Separation Agreement (as defined in Note 1—Description of Business and Basis of Presentation in the 2021 Form 10-K) and the indemnification arrangements entered into in connection with the Separation and the Distribution (as defined in Note 1—Description of Business and Basis of Presentation in the 2021 Form 10-K); and

•the other risks and uncertainties detailed in Part I., Item 1A. “Risk Factors” in the 2021 Form 10-K and Part II., Item 1A. “Risk Factors” in the Q1 2022 Form 10-Q.

Forward-looking statements in this Quarterly Report on Form 10-Q speak only as of the date hereof, and forward-looking statements in documents that are incorporated by reference hereto speak only as of the date of those documents. The Company does not undertake any obligation to update or release any revisions to any forward-looking statement made herein or to report any events or circumstances after the date hereof or to reflect the occurrence of unanticipated events or to conform such statements to actual results or changes in our expectations, except as required by law.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no material changes in the market risks reported in the 2021 Form 10-K.

ITEM 4. CONTROLS AND PROCEDURES

(a)Disclosure Controls and Procedures

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 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.

(b)Changes in Internal Control over Financial Reporting

There were no changes 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~~third quarter of fiscal 2022 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting. Due to the COVID-19 pandemic, most of the Company’s employees continue to work remotely, and the Company has strived to minimize the impact of this on the design and effectiveness of the Company’s internal control over financial reporting. The Company is continually monitoring and assessing its internal control over financial reporting and has not experienced any material impact to its internal control over financial reporting due to the COVID-19 pandemic.

2829

PART II

ITEM 1. LEGAL PROCEEDINGS

See Note 8—Commitments and Contingencies to the accompanying Unaudited Consolidated Financial Statements of FOX under the heading “Contingencies” for a discussion of the Company’s legal proceedings.

ITEM 1A. RISK FACTORS

There have been no material changes to the risk factors described in the section titled “Risk Factors” in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2021, as filed with the Securities and Exchange Commission on August 10, 2021, and the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2021, as filed with the Securities and Exchange Commission on November 3, 2021.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Below is a summary of the Company’s repurchases of its Class A Common Stock, par value $0.01 per share (the “Class A Common Stock”), and Class B Common Stock, par value $0.01 per share (the “Class B Common Stock” and, together with the Class A Common Stock, the “Common Stock”), during the three months ended ~~December~~March 31, ~~2021:~~2022:


		Total number of shares purchased(a)	Average price paid per share(b)		Approximate dollar value of shares that may yet be purchased under the program(b)(c)			Total number of shares purchased(a)	Average price paid per share(b)		Approximate dollar value of shares that may yet be purchased under the program(b)(c)
					(in millions)						(in millions)
October 1, 2021 – October 31, 2021
January 1, 2022 – January 31, 2022							January 1, 2022 – January 31, 2022
Class A common stock	Class A common stock	835,963	$	41.87			Class A common stock	957,064	$	38.94
Class B common stock	Class B common stock	386,339	38.83				Class B common stock	432,271	35.87
November 1, 2021 – November 30, 2021
February 1, 2022 – February 28, 2022							February 1, 2022 – February 28, 2022
Class A common stock	Class A common stock	1,378,298	38.92				Class A common stock	319,750	41.61
Class B common stock	Class B common stock	629,544	36.25				Class B common stock	150,800	38.10
December 1, 2021 – December 31, 2021
March 1, 2022 – March 31, 2022							March 1, 2022 – March 31, 2022
Class A common stock	Class A common stock	2,307,289	36.44				Class A common stock	3,082,509	41.00
Class B common stock	Class B common stock	1,081,361	33.91				Class B common stock	1,401,117	37.63
Total	Total						Total
Class A common stock	Class A common stock	4,521,550	38.20				Class A common stock	4,359,323	40.59
Class B common stock	Class B common stock	2,097,244	35.52				Class B common stock	1,984,188	37.29
		6,618,794			$	1,902		6,343,511			$	1,651


(a)			The Company has not made any purchases of Common Stock other than in connection with the publicly announced stock repurchase program described below.


(b)			These amounts exclude any fees, commissions or other costs associated with the share repurchases.


(c)			The Company's Board of Directors has authorized a $4 billion stock repurchase program, under which the Company can repurchase Common Stock. The program has no time limit and may be modified, suspended or discontinued at any time.

In total, the Company repurchased approximately 1420 million shares of Common Stock for ~~$497~~$748 million during the ~~six~~nine months ended ~~December~~March 31, ~~2021.~~2022.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

Not applicable

2930

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable

ITEM 5. OTHER INFORMATION

Not applicable

ITEM 6. EXHIBITS

(a) Exhibits.


~~10.1~~						~~Form of Employment Agreement Amendment*+~~

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.**

101						The following financial information from the Company’s Quarterly Report on Form 10-Q for the quarter ended ~~December~~March 31, ~~2021~~2022 formatted in Inline XBRL (eXtensible Business Reporting Language): (i) Unaudited Consolidated Statements of Operations for the three and ~~six~~nine months ended ~~December~~March 31, ~~2021~~2022 and ~~2020;~~2021; (ii) Unaudited Consolidated Statements of Comprehensive Income for the three and ~~six~~nine months ended ~~December~~March 31, ~~2021~~2022 and ~~2020;~~2021; (iii) Consolidated Balance Sheets as of ~~December~~March 31, ~~2021~~2022 (unaudited) and June 30, 2021 (audited); (iv) Unaudited Consolidated Statements of Cash Flows for the ~~six~~nine months ended ~~December~~March 31, ~~2021~~2022 and ~~2020;~~2021; (v) Unaudited Consolidated Statements of Equity for the three and ~~six~~nine months ended ~~December~~March 31, ~~2021~~2022 and ~~2020;~~2021; and (vi) Notes to the Unaudited Consolidated Financial Statements.*

104						Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101).

~~___________~~

* Filed herewith.

~~+ This exhibit is a management contract or compensatory plan or arrangement.~~

Filed herewith.

Furnished herewith.

3031

SIGNATURE

Pursuant to the requirements of Section 13 or 15(d) 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.


	Fox Corporation (Registrant)

	By:	/s/ Steven Tomsic
		Steven Tomsic
		Chief Financial Officer

Date: ~~February 9,~~May 10, 2022

3132


	Fair value measurements
	As of December 31, 2021
	Total		Level 1			Level 2		Level 3
	(in millions)
Assets
Investments in equity securities	$	689	$	689	(a)	$	—	$	—
Redeemable noncontrolling interests	(172)		—			—		(172)		(b)
Total	$	517	$	689		$	—	$	(172)