Fox Reports First Quarter Fiscal 2020 Revenues Of $2.67 Billion
The Company reported total quarterly revenues of
Quarterly net income decreased to
Quarterly Adjusted EBITDA1 of
Commenting on the results, Executive Chairman and Chief Executive Officer
"
1 |
Adjusted EBITDA is considered a non-GAAP financial measure. See Note 1 for a description of Adjusted EBITDA |
2 |
Excludes net income effects of Impairment and restructuring charges, adjustments to Equity (losses) earnings of affiliates, |
REVIEW OF OPERATING RESULTS |
||||||||
Three Months Ended September 30, |
||||||||
2019 |
2018 |
|||||||
$ Millions |
||||||||
Revenues by Component: |
||||||||
Affiliate fee |
$ |
1,394 |
$ |
1,337 |
||||
Advertising |
1,041 |
1,063 |
||||||
Other |
232 |
141 |
||||||
Total revenues |
$ |
2,667 |
$ |
2,541 |
||||
Segment Revenues: |
||||||||
Cable Network Programming |
$ |
1,285 |
$ |
1,265 |
||||
Television |
1,356 |
1,277 |
||||||
Other, Corporate and Eliminations |
26 |
(1) |
||||||
Total revenues |
$ |
2,667 |
$ |
2,541 |
||||
Segment EBITDA: |
||||||||
Cable Network Programming |
$ |
684 |
$ |
633 |
||||
Television |
251 |
171 |
||||||
Other, Corporate and Eliminations |
(79) |
(43) |
||||||
Adjusted EBITDA3 |
$ |
856 |
$ |
761 |
||||
Depreciation and amortization: |
||||||||
Cable Network Programming |
$ |
13 |
$ |
11 |
||||
Television |
15 |
26 |
||||||
Other, Corporate and Eliminations |
22 |
6 |
||||||
Total depreciation and amortization |
$ |
50 |
$ |
43 |
||||
3 |
Adjusted EBITDA is considered a non-GAAP financial measure. See Note 1 for a |
CABLE NETWORK PROGRAMMING |
||||||||
Three Months Ended September 30, |
||||||||
2019 |
2018 |
|||||||
$ Millions |
||||||||
Revenues |
||||||||
Affiliate fee |
$ |
939 |
$ |
939 |
||||
Advertising |
254 |
264 |
||||||
Other |
92 |
62 |
||||||
Total revenues |
1,285 |
1,265 |
||||||
Operating expenses |
(520) |
(541) |
||||||
Selling, general and administrative |
(90) |
(101) |
||||||
Amortization of cable distribution investments |
9 |
10 |
||||||
Segment EBITDA |
$ |
684 |
$ |
633 |
Cable Network Programming reported quarterly segment revenues of
Cable Network Programming reported quarterly segment EBITDA of
TELEVISION |
||||||||
Three Months Ended |
||||||||
2019 |
2018 |
|||||||
$ Millions |
||||||||
Revenues |
||||||||
Advertising |
$ |
787 |
$ |
799 |
||||
Affiliate fee |
455 |
398 |
||||||
Other |
114 |
80 |
||||||
Total revenues |
1,356 |
1,277 |
||||||
Operating expenses |
(943) |
(951) |
||||||
Selling, general and administrative |
(162) |
(155) |
||||||
Segment EBITDA |
$ |
251 |
$ |
171 |
Television reported quarterly segment revenues of
Television reported quarterly segment EBITDA of
DISTRIBUTION
On
BASIS OF PRESENTATION
The Unaudited Consolidated and Combined Financial Statements of the Company have been prepared in accordance with
The Company became a separate consolidated group as a result of the Distribution, and the Company's financial statements for the three months ended
The Unaudited Combined Statement of Operations for the three months ended
Cautionary Statement Concerning Forward-Looking Statements
This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as "may," "will," "should," "likely," "anticipates," "expects," "intends," "plans," "projects," "believes," "estimates," "outlook" and similar expressions are used to identify these forward-looking statements. These statements are based on management's current expectations and beliefs and are subject to uncertainty and changes in circumstances. Actual results may vary materially from those expressed or implied by the statements in this press release due to changes in economic, business, competitive, technological, strategic and/or regulatory factors and other factors affecting the operation of the Company's businesses. More detailed information about these factors is contained in the documents the Company has filed with or furnished to the
Statements in this press release speak only as of the date they were made, and the Company undertakes no duty to update or release any revisions to any forward-looking statement made in this press release or to report any events or circumstances after the date of this press release or to reflect the occurrence of unanticipated events or to conform such statements to actual results or changes in the Company's expectations, except as required by law.
To access a copy of this press release through the Internet, access
CONSOLIDATED AND COMBINED STATEMENTS OF OPERATIONS |
||||||||
Three Months Ended |
||||||||
2019 |
2018 |
|||||||
$ Millions, except |
||||||||
Revenues |
$ |
2,667 |
$ |
2,541 |
||||
Operating expenses |
(1,468) |
(1,491) |
||||||
Selling, general and administrative |
(352) |
(299) |
||||||
Depreciation and amortization |
(50) |
(43) |
||||||
Impairment and restructuring charges |
(9) |
- |
||||||
Interest expense |
(90) |
(16) |
||||||
Interest income |
17 |
- |
||||||
Other, net |
(15) |
139 |
||||||
Income before income tax expense |
700 |
831 |
||||||
Income tax expense |
(187) |
(216) |
||||||
Net income |
513 |
615 |
||||||
Less: Net income attributable to noncontrolling interests |
(14) |
(11) |
||||||
Net income attributable to Fox Corporation stockholders |
$ |
499 |
$ |
604 |
||||
Weighted average shares: |
624 |
621 |
||||||
Net income attributable to Fox Corporation stockholders per share: |
$ |
0.80 |
$ |
0.97 |
CONSOLIDATED BALANCE SHEETS |
||||||||
September 30, |
June 30, |
|||||||
Assets: |
$ Millions |
|||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ |
3,340 |
$ |
3,234 |
||||
Receivables, net |
2,108 |
1,967 |
||||||
Inventories, net |
1,463 |
1,129 |
||||||
Other |
138 |
148 |
||||||
Total current assets |
7,049 |
6,478 |
||||||
Non-current assets: |
||||||||
Property, plant and equipment, net |
1,314 |
1,313 |
||||||
Intangible assets, net |
2,848 |
2,851 |
||||||
Goodwill |
2,707 |
2,691 |
||||||
Deferred tax assets |
4,485 |
4,651 |
||||||
Other non-current assets |
2,131 |
1,525 |
||||||
Total assets |
$ |
20,534 |
$ |
19,509 |
||||
Liabilities and Equity: |
||||||||
Current liabilities: |
||||||||
Accounts payable, accrued expenses and other current liabilities |
$ |
1,890 |
$ |
1,712 |
||||
Total current liabilities |
1,890 |
1,712 |
||||||
Non-current liabilities: |
||||||||
Borrowings |
6,752 |
6,751 |
||||||
Other liabilities |
1,355 |
899 |
||||||
Redeemable noncontrolling interests |
207 |
189 |
||||||
Commitments and contingencies |
||||||||
Equity: |
||||||||
Class A common stock, $0.01 par value |
4 |
4 |
||||||
Class B common stock, $0.01 par value |
3 |
3 |
||||||
Additional paid-in capital |
9,921 |
9,891 |
||||||
Retained earnings |
696 |
357 |
||||||
Accumulated other comprehensive loss |
(304) |
(308) |
||||||
Total Fox Corporation stockholders' equity |
10,320 |
9,947 |
||||||
Noncontrolling interests |
10 |
11 |
||||||
Total equity |
10,330 |
9,958 |
||||||
Total liabilities and equity |
$ |
20,534 |
$ |
19,509 |
CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS |
||||||||
Three Months Ended |
||||||||
2019 |
2018 |
|||||||
$ Millions |
||||||||
Operating Activities: |
||||||||
Net income |
$ |
513 |
$ |
615 |
||||
Adjustments to reconcile net income to cash provided by operating activities |
||||||||
Depreciation and amortization |
50 |
43 |
||||||
Amortization of cable distribution investments |
9 |
10 |
||||||
Impairment and restructuring charges |
9 |
- |
||||||
Equity-based compensation |
27 |
- |
||||||
Other, net |
15 |
(139) |
||||||
Deferred income taxes |
165 |
72 |
||||||
Change in operating assets and liabilities, net of acquisitions and dispositions |
||||||||
Receivables and other assets |
(79) |
(100) |
||||||
Inventories net of program rights payable |
(358) |
(202) |
||||||
Accounts payable and other liabilities |
(149) |
(52) |
||||||
Net cash provided by operating activities |
202 |
247 |
||||||
Investing Activities: |
||||||||
Property, plant and equipment |
(39) |
(42) |
||||||
Purchase of investments |
- |
(100) |
||||||
Other investing activities, net |
(1) |
(65) |
||||||
Net cash used in investing activities |
(40) |
(207) |
||||||
Financing activities: |
||||||||
Net transfers from Twenty-First Century Fox, Inc. |
- |
229 |
||||||
Other financing activities, net |
(56) |
(13) |
||||||
Net cash (used in) provided by financing activities |
(56) |
216 |
||||||
Net increase in cash and cash equivalents |
106 |
256 |
||||||
Cash and cash equivalents, beginning of year |
3,234 |
2,500 |
||||||
Cash and cash equivalents, end of period |
$ |
3,340 |
$ |
2,756 |
||||
NOTE 1 – ADJUSTED EBITDA
Beginning with the announcement of the Company's financial results for the first quarter of fiscal 2020, the Company has renamed as "Adjusted EBITDA" the measure that it had previously referred to as "Total Segment EBITDA" and, prior to the announcement of the Company's financial results for the third quarter of fiscal 2019, as "Total Segment OIBDA." The definition of this measure has not changed: Adjusted EBITDA is defined as Revenues less Operating expenses and Selling, general and administrative expenses. Adjusted EBITDA does not include: Amortization of cable distribution investments, Depreciation and amortization, Impairment and restructuring charges, Interest expense, Interest income, Other, net and Income tax expense.
Management believes that information about Adjusted EBITDA assists all users of the Company's Unaudited Consolidated and Combined 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).
Adjusted EBITDA is considered a non-GAAP financial measure and should be considered in addition to, not as a substitute for, net income, cash flow and other measures of financial performance reported in accordance with GAAP. In addition, this measure does not reflect cash available to fund requirements and excludes items, such as depreciation and amortization and impairment charges, which are significant components in assessing the Company's financial performance. Adjusted EBITDA may not be comparable to similarly titled measures reported by other companies.
The following table reconciles net income to Adjusted EBITDA for the three months ended
Three Months Ended September 30, |
||||||||
2019 |
2018 |
|||||||
$ Millions |
||||||||
Net income |
$ |
513 |
$ |
615 |
||||
Add: |
||||||||
Amortization of cable distribution investments |
9 |
10 |
||||||
Depreciation and amortization |
50 |
43 |
||||||
Impairment and restructuring charges |
9 |
- |
||||||
Interest expense |
90 |
16 |
||||||
Interest income |
(17) |
- |
||||||
Other, net |
15 |
(139) |
||||||
Income tax expense |
187 |
216 |
||||||
Adjusted EBITDA |
$ |
856 |
$ |
761 |
NOTE 2 – ADJUSTED NET INCOME AND ADJUSTED EPS
The Company uses net income and earnings per share ("EPS") attributable to
Adjusted Net Income and Adjusted EPS may not be comparable to similarly titled measures reported by other companies. Adjusted Net Income and Adjusted EPS are not measures of performance under GAAP and should be considered in addition to, and not as substitutes for, net income attributable to
The following table reconciles net income and EPS attributable to
Three Months Ended |
||||||||||||||||
September 30, 2019 |
September 30, 2018 |
|||||||||||||||
Income |
EPS |
Income |
EPS |
|||||||||||||
$ Millions, except per share data |
||||||||||||||||
Net income |
$ |
513 |
$ |
615 |
||||||||||||
Less: Net income attributable to noncontrolling interests |
(14) |
(11) |
||||||||||||||
Net income attributable to Fox Corporation stockholders |
$ |
499 |
$ |
0.80 |
$ |
604 |
$ |
0.97 |
||||||||
Impairment and restructuring charges |
9 |
0.01 |
- |
- |
||||||||||||
Other, net4 |
12 |
0.02 |
(139) |
(0.22) |
||||||||||||
Tax provision |
1 |
- |
42 |
0.07 |
||||||||||||
As adjusted |
$ |
521 |
$ |
0.83 |
$ |
507 |
$ |
0.82 |
||||||||
4 |
Other, net presented above excludes equity losses of affiliates. |
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SOURCE
Joe Dorrego, Investor Relations, 212-852-7856; Dan Carey, Investor Relations, 212-852-7955; Hope Hicks, Press Inquiries, 310-369-1212; Megan Klein, Press Inquiries, 310-369-1363