FOX REPORTS SECOND QUARTER FISCAL 2022 REVENUES OF $4.44 BILLION
Fox Corporation (Nasdaq: FOXA, FOX) reported a 9% increase in total quarterly revenues to $4.44 billion for the three months ended December 31, 2021. Affiliate revenues rose 11%, with Cable Network Programming and Television segments showing notable growth. However, the company faced a net loss of $73 million, contrasting with a net income of $230 million in the prior year. Adjusted EBITDA increased 2% to $310 million. Fox declared a dividend of $0.24 per share and initiated a $4 billion stock repurchase program.
- Total revenues up 9% to $4.44 billion.
- Affiliate revenues increased 11%.
- Quarterly Adjusted EBITDA grew 2% to $310 million.
- Authorized $4 billion stock repurchase program.
- Net loss of $73 million compared to net income of $230 million in the prior year.
- Net loss attributable to stockholders was $85 million, or $(0.15) per share.
- Television segment reported an EBITDA loss of $273 million.
NEW YORK, Feb. 9, 2022 /PRNewswire/ -- Fox Corporation (Nasdaq: FOXA, FOX) ("FOX" or the "Company") today reported financial results for the three months ended December 31, 2021.
The Company reported total quarterly revenues of
The quarterly net loss was
Quarterly Adjusted EBITDA2 increased
Commenting on the results, Executive Chair and Chief Executive Officer Lachlan Murdoch said:
"Against the high bar we set in our fiscal second quarter last year, we have once again delivered revenue and Adjusted EBITDA growth in the second quarter of our 2022 fiscal year, while continuing to invest in our digital growth initiatives. These strong results and broad-based operating momentum are underpinned by the most valuable news franchise in the country, the leading live sports franchise, our top broadcast network reinforced by a strategic stations portfolio, as well as the emerging leader in AVOD. This focused portfolio is delivering consistent growth for our shareholders in a thoughtful and disciplined manner."
REVIEW OF OPERATING RESULTS | ||||||||||||||||
Three Months Ended December 31, | Six Months Ended December 31, | |||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
$ Millions | ||||||||||||||||
Revenues by Component: | ||||||||||||||||
Affiliate fee | $ | 1,688 | $ | 1,518 | $ | 3,355 | $ | 3,051 | ||||||||
Advertising | 2,408 | 2,282 | 3,538 | 3,251 | ||||||||||||
Other | 345 | 287 | 593 | 502 | ||||||||||||
Total revenues | $ | 4,441 | $ | 4,087 | $ | 7,486 | $ | 6,804 | ||||||||
Segment Revenues: | ||||||||||||||||
Cable Network Programming | $ | 1,638 | $ | 1,488 | $ | 3,054 | $ | 2,813 | ||||||||
Television | 2,759 | 2,556 | 4,340 | 3,906 | ||||||||||||
Other, Corporate and Eliminations | 44 | 43 | 92 | 85 | ||||||||||||
Total revenues | $ | 4,441 | $ | 4,087 | $ | 7,486 | $ | 6,804 | ||||||||
Adjusted EBITDA: | ||||||||||||||||
Cable Network Programming | $ | 668 | $ | 571 | $ | 1,442 | $ | 1,352 | ||||||||
Television | (273) | (185) | 86 | 272 | ||||||||||||
Other, Corporate and Eliminations | (85) | (81) | (154) | (153) | ||||||||||||
Adjusted EBITDA3 | $ | 310 | $ | 305 | $ | 1,374 | $ | 1,471 | ||||||||
Depreciation and amortization: | ||||||||||||||||
Cable Network Programming | $ | 17 | $ | 12 | $ | 27 | $ | 25 | ||||||||
Television | 28 | 26 | 54 | 51 | ||||||||||||
Other, Corporate and Eliminations | 48 | 32 | 91 | 62 | ||||||||||||
Total depreciation and amortization | $ | 93 | $ | 70 | $ | 172 | $ | 138 | ||||||||
CABLE NETWORK PROGRAMMING | ||||||||||||||||
Three Months Ended December 31, | Six Months Ended December 31, | |||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
$ Millions | ||||||||||||||||
Revenues | ||||||||||||||||
Affiliate fee | $ | 1,039 | $ | 928 | $ | 2,065 | $ | 1,901 | ||||||||
Advertising | 454 | 441 | 765 | 740 | ||||||||||||
Other | 145 | 119 | 224 | 172 | ||||||||||||
Total revenues | 1,638 | 1,488 | 3,054 | 2,813 | ||||||||||||
Operating expenses | (837) | (786) | (1,360) | (1,220) | ||||||||||||
Selling, general and administrative | (137) | (137) | (261) | (252) | ||||||||||||
Amortization of cable distribution investments | 4 | 6 | 9 | 11 | ||||||||||||
Segment EBITDA | $ | 668 | $ | 571 | $ | 1,442 | $ | 1,352 | ||||||||
Cable Network Programming reported quarterly segment revenues of
Cable Network Programming reported quarterly segment EBITDA of
TELEVISION | ||||||||||||||||
Three Months Ended December 31, | Six Months Ended December 31, | |||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
$ Millions | ||||||||||||||||
Revenues | ||||||||||||||||
Advertising | $ | 1,954 | $ | 1,841 | $ | 2,773 | $ | 2,511 | ||||||||
Affiliate fee | 649 | 590 | 1,290 | 1,150 | ||||||||||||
Other | 156 | 125 | 277 | 245 | ||||||||||||
Total revenues | 2,759 | 2,556 | 4,340 | 3,906 | ||||||||||||
Operating expenses | (2,809) | (2,540) | (3,835) | (3,254) | ||||||||||||
Selling, general and administrative | (223) | (201) | (419) | (380) | ||||||||||||
Segment EBITDA | $ | (273) | $ | (185) | $ | 86 | $ | 272 | ||||||||
Television reported quarterly segment revenues of
Television reported a quarterly segment EBITDA loss of
DIVIDEND
The Company has declared a dividend of
SHARE REPURCHASE PROGRAM
The Company has authorized a
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, including the impact of COVID-19 and other widespread health emergencies or pandemics and measures to contain their spread. More detailed information about these factors is contained in the documents the Company has filed with or furnished to the Securities and Exchange Commission (the "SEC"), including the Company's Annual Report on Form 10-K for the fiscal year ended June 30, 2021 filed with the SEC on August 10, 2021, and subsequent Quarterly Reports on Form 10-Q.
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 Fox Corporation's corporate website located at http://www.foxcorporation.com.
CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||
Three Months Ended December 31, | Six Months Ended December 31, | |||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
$ Millions, except per share amounts | ||||||||||||||||
Revenues | $ | 4,441 | $ | 4,087 | $ | 7,486 | $ | 6,804 | ||||||||
Operating expenses | (3,667) | (3,346) | (5,238) | (4,514) | ||||||||||||
Selling, general and administrative | (468) | (442) | (883) | (830) | ||||||||||||
Depreciation and amortization | (93) | (70) | (172) | (138) | ||||||||||||
Impairment and restructuring charges | - | - | - | (35) | ||||||||||||
Interest expense, net | (97) | (97) | (194) | (195) | ||||||||||||
Other, net4 | (211) | 172 | (142) | 691 | ||||||||||||
(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 | ||||||||||||
Less: Net income attributable to noncontrolling interests | (12) | (6) | (19) | (17) | ||||||||||||
Net (loss) income attributable to Fox Corporation stockholders | $ | (85) | $ | 224 | $ | 616 | $ | 1,330 | ||||||||
Weighted average shares: | 573 | 598 | 575 | 601 | ||||||||||||
Net (loss) income attributable to Fox Corporation stockholders per share: | $ | (0.15) | $ | 0.37 | $ | 1.07 | $ | 2.21 | ||||||||
CONSOLIDATED BALANCE SHEETS | ||||||||
December 31, | June 30, | |||||||
Assets: | $ Millions | |||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 4,255 | $ | 5,886 | ||||
Receivables, net | 2,952 | 2,029 | ||||||
Inventories, net | 1,148 | 729 | ||||||
Other | 159 | 105 | ||||||
Total current assets | 8,514 | 8,749 | ||||||
Non-current assets: | ||||||||
Property, plant and equipment, net | 1,650 | 1,708 | ||||||
Intangible assets, net | 3,198 | 3,154 | ||||||
Goodwill | 3,565 | 3,435 | ||||||
Deferred tax assets | 3,675 | 3,822 | ||||||
Other non-current assets | 2,276 | 2,058 | ||||||
Total assets | $ | 22,878 | $ | 22,926 | ||||
Liabilities and Equity: | ||||||||
Current liabilities: | ||||||||
Borrowings | $ | 750 | $ | 749 | ||||
Accounts payable, accrued expenses and other current liabilities | 2,120 | 2,253 | ||||||
Total current liabilities | 2,870 | 3,002 | ||||||
Non-current liabilities: | ||||||||
Borrowings | 7,204 | 7,202 | ||||||
Other liabilities | 1,342 | 1,336 | ||||||
Redeemable noncontrolling interests | 172 | 261 | ||||||
Commitments and contingencies | ||||||||
Equity: | ||||||||
Class A common stock, | 3 | 3 | ||||||
Class B common stock, | 3 | 3 | ||||||
Additional paid-in capital | 9,265 | 9,453 | ||||||
Retained earnings | 2,308 | 1,982 | ||||||
Accumulated other comprehensive loss | (304) | (318) | ||||||
Total Fox Corporation stockholders' equity | 11,275 | 11,123 | ||||||
Noncontrolling interests | 15 | 2 | ||||||
Total equity | 11,290 | 11,125 | ||||||
Total liabilities and equity | $ | 22,878 | $ | 22,926 | ||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
Six Months Ended December 31, | ||||||||
2021 | 2020 | |||||||
$ Millions | ||||||||
Operating Activities: | ||||||||
Net income | $ | 635 | $ | 1,347 | ||||
Adjustments to reconcile net income to cash (used in) provided by operating activities | ||||||||
Depreciation and amortization | 172 | 138 | ||||||
Amortization of cable distribution investments | 9 | 11 | ||||||
Impairment and restructuring charges | - | 35 | ||||||
Equity-based compensation | 47 | 75 | ||||||
Other, net | 142 | (691) | ||||||
Deferred income taxes | 143 | 421 | ||||||
Change in operating assets and liabilities, net of acquisitions and dispositions | ||||||||
Receivables and other assets | (940) | (1,011) | ||||||
Inventories net of program rights payable | (494) | (60) | ||||||
Accounts payable and accrued expenses | (214) | 156 | ||||||
Other changes, net | (156) | (184) | ||||||
Net cash (used in) provided by operating activities | (656) | 237 | ||||||
Investing Activities: | ||||||||
Property, plant and equipment | (121) | (242) | ||||||
Acquisitions, net of cash acquired | (229) | - | ||||||
Proceeds from dispositions, net | 82 | - | ||||||
Purchase of investments | (28) | (86) | ||||||
Other investing activities, net | - | (1) | ||||||
Net cash used in investing activities | (296) | (329) | ||||||
Financing Activities: | ||||||||
Repurchase of shares | (497) | (416) | ||||||
Non-operating cash flows from The Walt Disney Company | - | 116 | ||||||
Settlement of Divestiture Tax Prepayment | - | 462 | ||||||
Dividends paid and distributions | (150) | (176) | ||||||
Other financing activities, net | (32) | (37) | ||||||
Net cash used in financing activities | (679) | (51) | ||||||
Net decrease in cash and cash equivalents | (1,631) | (143) | ||||||
Cash and cash equivalents, beginning of year | 5,886 | 4,645 | ||||||
Cash and cash equivalents, end of period | $ | 4,255 | $ | 4,502 | ||||
NOTE 1 – ADJUSTED NET INCOME AND ADJUSTED EPS
The Company uses net income and earnings per share ("EPS") attributable to Fox Corporation stockholders excluding net income effects of Impairment and restructuring charges, adjustments to Equity (losses) earnings of affiliates, Other, net, and tax provision adjustments ("Adjusted Net Income" and "Adjusted EPS" respectively) to evaluate the performance of the Company's operations exclusive of certain items that impact the comparability of results from period to period.
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 Fox Corporation stockholders and EPS as reported in accordance with GAAP. However, management uses these measures in comparing the Company's historical performance and believes that they provide meaningful and comparable information to management, investors and equity analysts to assist in their analysis of the Company's performance relative to prior periods and the Company's competitors.
The following table reconciles net income and EPS attributable to Fox Corporation stockholders to Adjusted Net Income and Adjusted EPS for the three months ended December 31, 2021 and 2020:
Three Months Ended | ||||||||||||||||
December 31, 2021 | December 31, 2020 | |||||||||||||||
Income | EPS | Income | EPS | |||||||||||||
$ Millions, except per share data | ||||||||||||||||
Net (loss) income | $ | (73) | $ | 230 | ||||||||||||
Less: Net income attributable to noncontrolling interests | (12) | (6) | ||||||||||||||
Net (loss) income attributable to Fox Corporation stockholders | $ | (85) | $ | (0.15) | $ | 224 | $ | 0.37 | ||||||||
Other, net5 | 212 | 0.37 | (175) | (0.29) | ||||||||||||
Tax provision | (50) | (0.09) | 44 | 0.07 | ||||||||||||
As adjusted | $ | 77 | $ | 0.13 | $ | 93 | $ | 0.16 | ||||||||
NOTE 2 – ADJUSTED EBITDA
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 Unaudited Consolidated Financial Statements by allowing them to evaluate changes in the operating results of the Company's portfolio of businesses separate from non-operational factors that affect net income, thus providing insight into both operations and the other factors that affect reported results. 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 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 December 31, 2021 and 2020:
Three Months Ended December 31, | Six Months Ended December 31, | |||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
$ Millions | ||||||||||||||||
Net (loss) income | $ | (73) | $ | 230 | $ | 635 | $ | 1,347 | ||||||||
Add: | ||||||||||||||||
Amortization of cable distribution investments | 4 | 6 | 9 | 11 | ||||||||||||
Depreciation and amortization | 93 | 70 | 172 | 138 | ||||||||||||
Impairment and restructuring charges | - | - | - | 35 | ||||||||||||
Interest expense, net | 97 | 97 | 194 | 195 | ||||||||||||
Other, net | 211 | (172) | 142 | (691) | ||||||||||||
Income tax (benefit) expense | (22) | 74 | 222 | 436 | ||||||||||||
Adjusted EBITDA | $ | 310 | $ | 305 | $ | 1,374 | $ | 1,471 | ||||||||
1 | Excludes net income effects of Impairment and restructuring charges, adjustments to Equity (losses) earnings of affiliates, Other, net and tax provision adjustments. See Note 1 for a description of adjusted net income and adjusted earnings per share attributable to Fox Corporation stockholders, which are considered non-GAAP financial measures, and a reconciliation of reported net income and earnings per share attributable to Fox Corporation stockholders to adjusted net income and adjusted earnings per share attributable to Fox Corporation stockholders. |
2 | Adjusted EBITDA is considered a non-GAAP financial measure. See Note 2 for a description of Adjusted EBITDA and a reconciliation of net income to Adjusted EBITDA. |
3 | Adjusted EBITDA is considered a non-GAAP financial measure. See Note 2 for a description of Adjusted EBITDA and a reconciliation of net income to Adjusted EBITDA. |
4 | Other, net presented above includes Equity losses of affiliates. |
5 | Other, net presented above excludes Equity losses of affiliates. |
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SOURCE Fox Corporation
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