FOXA 10-Q Quarterly Report Dec. 31, 2022 | Alphaminr
ALPHAMINR

FOXA 10-Q Quarter ended Dec. 31, 2022

Balance Sheet
Cash Flow
Income Statement
Debt
fox-20221231
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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 31, 2022
or
☐ 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, a 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 Exchange Act). Yes ☐ No x
As of February 6, 2023, 296,917,233 shares of Class A Common Stock, par value $0.01 per share, and 237,644,354 shares of Class B Common Stock, par value $0.01 per share, were outstanding.

FOX CORPORATION
FORM 10-Q
TABLE OF CONTENTS
Page




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,
2022 2021 2022 2021
Revenues $ 4,605 $ 4,441 $ 7,797 $ 7,486
Operating expenses ( 3,528 ) ( 3,667 ) ( 5,184 ) ( 5,238 )
Selling, general and administrative ( 550 ) ( 468 ) ( 998 ) ( 883 )
Depreciation and amortization ( 103 ) ( 93 ) ( 202 ) ( 172 )
Interest expense, net ( 60 ) ( 97 ) ( 128 ) ( 194 )
Other, net 73 ( 211 ) ( 3 ) ( 142 )
Income (loss) before income tax (expense) benefit 437 ( 95 ) 1,282 857
Income tax (expense) benefit ( 116 ) 22 ( 348 ) ( 222 )
Net income (loss) 321 ( 73 ) 934 635
Less: Net income attributable to noncontrolling interests ( 8 ) ( 12 ) ( 16 ) ( 19 )
Net income (loss) attributable to Fox Corporation stockholders $ 313 $ ( 85 ) $ 918 $ 616
EARNINGS (LOSS) PER SHARE DATA
Weighted average shares:
Basic 541 569 545 572
Diluted 543 573 547 575
Net income (loss) attributable to Fox Corporation stockholders per share:
Basic $ 0.58 $ ( 0.15 ) $ 1.68 $ 1.08
Diluted $ 0.58 $ ( 0.15 ) $ 1.68 $ 1.07
The accompanying notes are an integral part of these Unaudited Consolidated Financial Statements.
1

FOX CORPORATION
UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(IN MILLIONS)
For the three months ended December 31,
For the six months ended December 31,
2022 2021 2022 2021
Net income (loss) $ 321 $ ( 73 ) $ 934 $ 635
Other comprehensive income, net of tax:
Benefit plan adjustments and other 9 8 7 14
Other comprehensive income, net of tax 9 8 7 14
Comprehensive income (loss) 330 ( 65 ) 941 649
Less: Net income attributable to noncontrolling interests (a)
( 8 ) ( 12 ) ( 16 ) ( 19 )
Comprehensive income (loss) attributable to Fox Corporation stockholders $ 322 $ ( 77 ) $ 925 $ 630
(a)
Net income attributable to noncontrolling interests includes $( 5 ) million and $( 3 ) million for the three months ended December 31, 2022 and 2021, respectively, and $( 10 ) million and $( 4 ) million for the six months ended December 31, 2022 and 2021, respectively, relating to redeemable noncontrolling interests.
The accompanying notes are an integral part of these Unaudited Consolidated Financial Statements.
2

FOX CORPORATION
CONSOLIDATED BALANCE SHEETS
(IN MILLIONS, EXCEPT SHARE AND PER SHARE AMOUNTS)
As of
December 31,
2022
As of
June 30,
2022
(unaudited) (audited)
ASSETS
Current assets
Cash and cash equivalents $ 4,058 $ 5,200
Receivables, net 3,004 2,128
Inventories, net 1,300 791
Other 209 162
Total current assets 8,571 8,281
Non-current assets
Property, plant and equipment, net 1,680 1,682
Intangible assets, net 3,114 3,157
Goodwill 3,556 3,554
Deferred tax assets 3,283 3,440
Other non-current assets 2,922 2,071
Total assets $ 23,126 $ 22,185
LIABILITIES AND EQUITY
Current liabilities
Accounts payable, accrued expenses and other current liabilities $ 2,543 $ 2,296
Total current liabilities 2,543 2,296
Non-current liabilities
Borrowings 7,208 7,206
Other liabilities 1,503 1,120
Redeemable noncontrolling interests 196 188
Commitments and contingencies
Equity
Class A Common Stock (a)
3 3
Class B Common Stock (b)
2 3
Additional paid-in capital 8,836 9,098
Retained earnings 2,985 2,461
Accumulated other comprehensive loss ( 219 ) ( 226 )
Total Fox Corporation stockholders’ equity 11,607 11,339
Noncontrolling interests 69 36
Total equity 11,676 11,375
Total liabilities and equity $ 23,126 $ 22,185
(a)
Class A Common Stock , $ 0.01 par value per share, 2,000,000,000 shares authorized, 297,918,978 shares and 307,496,876 shares issued and outstanding at par as of December 31, 2022 and June 30, 2022, respectively.
(b)
Class B Common Stock , $ 0.01 par value per share, 1,000,000,000 shares authorized, 238,148,374 shares and 243,122,595 shares issued and outstanding at par as of December 31, 2022 and June 30, 2022, respectively.
The accompanying notes are an integral part of these Unaudited Consolidated Financial Statements.
3

FOX CORPORATION
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN MILLIONS)
For the six months ended December 31,
2022 2021
OPERATING ACTIVITIES
Net income $ 934 $ 635
Adjustments to reconcile net income to cash used in operating activities
Depreciation and amortization 202 172
Amortization of cable distribution investments 8 9
Equity-based compensation 32 47
Other, net 3 142
Deferred income taxes 152 143
Change in operating assets and liabilities, net of acquisitions and dispositions
Receivables and other assets ( 952 ) ( 940 )
Inventories net of programming payable ( 420 ) ( 494 )
Accounts payable and accrued expenses ( 152 ) ( 214 )
Other changes, net ( 68 ) ( 156 )
Net cash used in operating activities ( 261 ) ( 656 )
INVESTING ACTIVITIES
Property, plant and equipment ( 153 ) ( 121 )
Acquisitions, net of cash acquired — ( 229 )
Proceeds from dispositions, net — 82
Purchase of investments ( 50 ) ( 28 )
Other investing activities, net ( 18 ) —
Net cash used in investing activities ( 221 ) ( 296 )
FINANCING ACTIVITIES
Repurchase of shares ( 500 ) ( 497 )
Dividends paid and distributions ( 155 ) ( 150 )
Sale of subsidiary noncontrolling interest 25 —
Other financing activities, net ( 30 ) ( 32 )
Net cash used in financing activities ( 660 ) ( 679 )
Net decrease in cash and cash equivalents ( 1,142 ) ( 1,631 )
Cash and cash equivalents, beginning of year 5,200 5,886
Cash and cash equivalents, end of period $ 4,058 $ 4,255
The accompanying notes are an integral part of these Unaudited Consolidated Financial Statements.
4

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
Common Stock Common Stock
Shares Amount Shares Amount
Balance, September 30, 2022 303 $ 3 241 $ 2 $ 8,949 $ 2,795 $ ( 228 ) $ 11,521 $ 64 $ 11,585
Net income — — — — — 313 — 313 13 326
Other comprehensive income — — — — — — 9 9 — 9
Shares repurchased ( 6 ) — ( 2 ) — ( 137 ) ( 113 ) — ( 250 ) — ( 250 )
Other 1 — ( 1 ) — 24 ( 10 ) — 14 ( 8 ) 6
Balance, December 31, 2022 298 $ 3 238 $ 2 $ 8,836 $ 2,985 $ ( 219 ) $ 11,607 $ 69 $ 11,676
Balance, September 30, 2021 321 $ 3 250 $ 3 $ 9,327 $ 2,409 $ ( 312 ) $ 11,430 $ — $ 11,430
Net (loss) income — — — — — ( 85 ) — ( 85 ) 15 ( 70 )
Other comprehensive income — — — — — — 8 8 — 8
Shares repurchased ( 5 ) — ( 2 ) — ( 108 ) ( 139 ) — ( 247 ) — ( 247 )
Other 1 — — — 46 123 — 169 — 169
Balance, December 31, 2021 317 $ 3 248 $ 3 $ 9,265 $ 2,308 $ ( 304 ) $ 11,275 $ 15 $ 11,290
Balance, June 30, 2022 308 $ 3 243 $ 3 $ 9,098 $ 2,461 $ ( 226 ) $ 11,339 $ 36 $ 11,375
Net income — — — — — 918 — 918 26 944
Other comprehensive income — — — — — — 7 7 — 7
Dividends — — — — — ( 137 ) — ( 137 ) — ( 137 )
Shares repurchased ( 11 ) — ( 5 ) — ( 261 ) ( 239 ) — ( 500 ) — ( 500 )
Other 1 — — ( 1 ) ( 1 ) ( 18 ) — ( 20 ) 7 ( 13 )
Balance, December 31, 2022 298 $ 3 238 $ 2 $ 8,836 $ 2,985 $ ( 219 ) $ 11,607 $ 69 $ 11,676
Balance, June 30, 2021 324 $ 3 252 $ 3 $ 9,453 $ 1,982 $ ( 318 ) $ 11,123 $ 2 $ 11,125
Net income — — — — — 616 — 616 23 639
Other comprehensive income — — — — — — 14 14 — 14
Dividends — — — — — ( 138 ) — ( 138 ) — ( 138 )
Shares repurchased ( 10 ) — ( 4 ) — ( 222 ) ( 275 ) — ( 497 ) — ( 497 )
Other 3 — — — 34 123 — 157 ( 10 ) 147
Balance, December 31, 2021 317 $ 3 248 $ 3 $ 9,265 $ 2,308 $ ( 304 ) $ 11,275 $ 15 $ 11,290
(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.
5


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.
On October 14, 2022, the Company announced that its Board of Directors (the “Board”) had formed a special committee composed of independent members of the Board (the “Special Committee”) to begin exploring a potential combination with News Corporation. On January 24, 2023, the Company announced that the Board had received a letter from K. Rupert Murdoch withdrawing the proposal to explore the potential combination and, as a result of this action, the Special Committee was dissolved.
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, 2023.
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 financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2022 as filed with the Securities and Exchange Commission on August 12, 2022 (the “2022 Form 10-K”).
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%. 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 (“fiscal”) of each year. Certain fiscal 2022 amounts have been reclassified to conform to the fiscal 2023 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, Recently Issued Accounting Guidance and Other
Inflation Reduction Act
On August 16, 2022, the U.S. government enacted the Inflation Reduction Act which, among other changes, imposes a 15% corporate alternative minimum tax (“CAMT”) and a 1% excise tax on stock repurchases. Once subject to the CAMT, a taxpayer will compute both its CAMT liability and its regular federal
6


FOX CORPORATION
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
tax liability and pay the higher of the two. To the extent that the CAMT liability exceeds the regular federal tax liability, a taxpayer will receive a credit (“CAMT credit”) which can be used against its regular federal tax liability in the future when the taxpayer is no longer subject to the CAMT. The CAMT credit does not expire. The CAMT is effective for tax years beginning after December 31, 2022, which means it will be applicable to the Company starting in fiscal 2024. The excise tax on stock repurchases applies to stock repurchases occurring after December 31, 2022.
The Company continues to evaluate the impact the CAMT will have on its financial statements but expects that, when applicable, the Company will be subject to the CAMT. The CAMT would impact the timing of the cash tax benefit the Company receives from the amortization of the additional tax basis received as a result of the Transaction Tax (as defined in Note 1—Description of Business and Basis of Presentation in the 2022 Form 10-K). This change in timing would result in an increase to its annual cash tax liability which could be material. However, as noted above, if the Company pays CAMT it will receive a CAMT credit that can be carried forward indefinitely and applied against its regular federal tax liability in future years. The Company will be subject to the excise tax on stock repurchases occurring after December 31, 2022, but the impact to the financial statements is not expected to be material.
NOTE 2. ACQUISITIONS, DISPOSALS AND OTHER TRANSACTIONS
The Company’s acquisitions support the Company’s strategy to strengthen its core brands, grow its digital businesses and selectively enhance production capabilities for its digital and linear platforms. There were no acquisitions during the three and six months ended December 31, 2022. During the six months ended December 31, 2021, the Company made acquisitions, primarily consisting of three entertainment production companies, for total cash consideration of approximately $ 230 million. The revenues and Segment EBITDA (as defined in Note 10—Segment Information) included within the Company’s consolidated results of operations associated with these companies were not material individually or in the aggregate.
NOTE 3. INVENTORIES, NET
The Company’s inventories were comprised of the following:
As of
December 31,
2022
As of
June 30,
2022
(in millions)
Licensed programming, including prepaid sports rights $ 1,534 $ 975
Owned programming 446 337
Total inventories, net 1,980 1,312
Less: current portion of inventories, net ( 1,300 ) ( 791 )
Total non-current inventories, net $ 680 $ 521
Owned programming
Released $ 253 $ 205
In-process and other 193 132
Total $ 446 $ 337
7


FOX CORPORATION
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
The following table presents the aggregate amortization expense related to Inventories, net included in Operating expenses in the Statements of Operations:
For the three months ended December 31,
For the six months ended December 31,
2022 2021 2022 2021
(in millions) (in millions)
Amortization expense $ 2,566 $ 2,640 $ 3,420 $ 3,441
NOTE 4. FAIR VALUE
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 redeemable noncontrolling interests carried at fair value on a recurring basis:
Fair value measurements
As of December 31, 2022
Total Level 1 Level 2 Level 3
(in millions)
Investments in equity securities $ 625 $ 625
(a)
$ — $ —
Redeemable noncontrolling interests ( 196 ) — — ( 196 )
(b)
Total $ 429 $ 625 $ — $ ( 196 )
Fair value measurements
As of June 30, 2022
Total Level 1 Level 2 Level 3
(in millions)
Investments in equity securities $ 435 $ 435
(a)
$ — $ —
Redeemable noncontrolling interests ( 188 ) — — ( 188 )
(b)
Total $ 247 $ 435 $ — $ ( 188 )
(a)
The investments categorized as Level 1 primarily represent 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 2022 Form 10-K under the heading “Flutter” for additional information).
(b)
The Company utilizes both the market and income approach valuation 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 redeemable noncontrolling interests. Examples of utilized unobservable inputs are future cash flows and long-term growth rates.
In connection with the combination of The Stars Group Inc. and Flutter in May 2020, FOX Sports received the right to acquire an 18.6 % equity interest in FanDuel Group (“FanDuel”), a majority-owned subsidiary of Flutter, at a price set forth in the relevant agreement (structured as a 10 -year option), which has been the subject of arbitration proceedings. In January 2023, the U.S. District Court for the Southern District of New York
8


FOX CORPORATION
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
confirmed and entered the arbitrator’s ruling affirming FOX Sports’ 10 -year call option expiring in December 2030 to acquire 18.6 % of FanDuel for $ 3.72 billion, with a 5 % annual escalator. FOX has no obligation to commit capital towards this opportunity unless and until it exercises the option. In addition, Flutter cannot pursue an initial public offering for FanDuel without FOX’s consent or approval from the arbitrator.
Redeemable Noncontrolling Interests
The redeemable noncontrolling interests recorded are put rights held by minority shareholders in Credible Labs Inc. (“Credible”) and an entertainment production company.
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,
2022 2021 2022 2021
(in millions)
Beginning of period $ ( 193 ) $ ( 302 ) $ ( 188 ) $ ( 261 )
Acquisitions (a)
— ( 13 ) — ( 58 )
Net loss 5 3 10 4
Distributions — — — 3
Accretion and other (b)
( 8 ) 140 ( 18 ) 140
End of period $ ( 196 ) $ ( 172 ) $ ( 196 ) $ ( 172 )
(a)
The increase for the six months ended December 31, 2021 was primarily due to the acquisition of an entertainment production company.
(b)
As a result of the expiration of the sports network minority shareholder’s final put right during the three months ended December 31, 2021, approximately $ 110 million was reclassified into equity.
The Credible minority put right 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 exclusive of borrowings, such as cash and cash equivalents, receivables, payables and investments, accounted for using the measurement alternative method, approximates fair value.
As of
December 31,
2022
As of
June 30,
2022
(in millions)
Borrowings
Fair value $ 6,822 $ 7,084
Carrying value $ 7,208 $ 7,206
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
9


FOX CORPORATION
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
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 31, 2022 and June 30, 2022, the Company had no customers that accounted for 10% or more of the Company’s receivables.
NOTE 5. BORROWINGS
Borrowings include senior notes (See Note 9—Borrowings in the 2022 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 2022 Form 10-K under the heading “Revolving Credit Agreement”). As of December 31, 2022, there were no borrowings outstanding under the revolving credit agreement.
NOTE 6. STOCKHOLDERS’ EQUITY
Stock Repurchase Program
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.
During the six months ended December 31, 2022, the Company repurchased approximately 16 million shares of Common Stock for approximately $ 500 million.
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.
As of December 31, 2022, the Company’s remaining stock repurchase authorization was approximately $ 900 million. Subsequent to December 31, 2022, the Company repurchased approximately 1.6 million shares of Common Stock for approximately $ 50 million and the Company announced that the Board has authorized incremental stock repurchases of an additional $ 3 billion of Common Stock. With this increase, the Company’s total stock repurchase authorization is now $ 7 billion.
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,
2022 2021 2022 2021
Cash dividend per share $ — $ — $ 0.25 $ 0.24
Subsequent to December 31, 2022, the Company declared a semi-annual dividend of $ 0.25 per share on both the Class A Common Stock and the Class B Common Stock. The dividend declared is payable on March 29, 2023 with a record date for determining dividend entitlements of March 1, 2023.
NOTE 7. EQUITY-BASED COMPENSATION
The Company has one equity plan, the Fox Corporation 2019 Shareholder Alignment Plan (See Note 12—Equity-Based Compensation in the 2022 Form 10-K).
10


FOX CORPORATION
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
The following table summarizes the Company’s equity-based compensation:
For the three months ended December 31,
For the six months ended December 31,
2022 2021 2022 2021
(in millions)
Equity-based compensation $ 25 $ 32 $ 32 $ 47
Intrinsic value of all settled equity-based awards $ — $ 18 $ 76 $ 94
Tax benefit on settled equity-based awards $ ( 1 ) $ 4 $ 13 $ 21
The Company’s equity-based awards are settled in Class A Common Stock. As of December 31, 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 $ 120 million and is expected to be recognized over a weighted average period between one and two years .
As of December 31, 2022 and 2021, the Company had approximately 5 million and 6 million stock options outstanding, respectively. The computation of diluted earnings per share did not include stock options outstanding during each period presented if their inclusion would have been antidilutive.
Awards Vested and Granted
Restricted Stock Units
During the six months ended December 31, 2022 and 2021 , a pproximately 1.5 million and 2.4 million restricted stock units (“RSUs”) vested and approximately 2.0 million and 1.7 million RSUs were granted, respectively. These RSUs generally vest in equal annual installments over a three-year period subject to participants’ continued employment with the Company.
Performance-Based Stock Options
During the six months ended December 31, 2022 and 2021, the Company granted approximately 4 million performance-based stock options, in each period, 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.
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 31, 2022 and June 30, 2022 were approximately $ 39 billion and $ 42 billion, respectively. The decrease from June 30, 2022 was primarily due to sports programming rights payments.
In December 2022, the Company renewed the operating lease for its corporate headquarters at 1211 Avenue of the Americas in New York through fiscal 2042. In connection with this extension, the Company recorded additional operating lease assets and liabilities of approximately $ 540 million as of December 31, 2022.
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
11


FOX CORPORATION
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
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. (“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 2022 Form 10-K under the heading “The Distribution”), the Company assumed certain costs and liabilities related to the U.K. Newspaper Matters Indemnity. The liability recorded in the Balance Sheets related to the indemnity was approximately $ 115 million and $ 65 million as of December 31, 2022 and June 30, 2022, respectively. The increase in the liability recorded was attributable to an increase in the number of civil claims submitted in September 2022 in advance of the September 30, 2022 cutoff date set by the judge for this phase of the litigation.
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 Dominion lawsuits against the Company and its subsidiary, FOX News Media, have been consolidated for trial, which is scheduled to begin in April 2023. The Company believes these lawsuits, including the Smartmatic and Dominion matters, are without merit and intends to defend against them vigorously, including through any appeals. 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 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 primarily 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
12


FOX CORPORATION
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
21CF, the Company (prior to the Distribution (as defined in Note 1—Description of Business and Basis of Presentation in the 2022 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 2022 Form 10-K under the heading “The Distribution”) requires 21CF and/or The Walt Disney Company 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 $ 16 million and $ 13 million for the three months ended December 31, 2022 and 2021, respectively, and $ 32 million and $ 27 million for the six months ended December 31, 2022 and 2021, respectively.
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 produces and licenses news and sports content distributed through traditional cable television systems, direct broadcast satellite operators and telecommunication companies (“traditional MVPDs”), virtual multi-channel video programming distributors (“virtual MVPDs”) and other digital platforms, primarily in the U.S.
• Television , which produces, acquires, markets and distributes programming through the FOX broadcast network, advertising supported video-on-demand (“AVOD”) service TUBI, 29 full power broadcast television stations, including 11 duopolies, and other digital platforms, primarily in the U.S. Eighteen of the broadcast television stations are affiliated with the FOX Network, 10 are affiliated with MyNetworkTV and one 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.
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 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.
13


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 months ended December 31, 2022 and 2021:
For the three months ended December 31,
For the six months ended December 31,
2022 2021 2022 2021
(in millions)
Revenues
Cable Network Programming $ 1,632 $ 1,638 $ 3,063 $ 3,054
Television 2,934 2,759 4,648 4,340
Other, Corporate and Eliminations 39 44 86 92
Total revenues $ 4,605 $ 4,441 $ 7,797 $ 7,486
Segment EBITDA
Cable Network Programming $ 353 $ 668 $ 1,095 $ 1,442
Television 256 ( 273 ) 665 86
Other, Corporate and Eliminations ( 78 ) ( 85 ) ( 137 ) ( 154 )
Amortization of cable distribution investments ( 4 ) ( 4 ) ( 8 ) ( 9 )
Depreciation and amortization ( 103 ) ( 93 ) ( 202 ) ( 172 )
Interest expense, net ( 60 ) ( 97 ) ( 128 ) ( 194 )
Other, net 73 ( 211 ) ( 3 ) ( 142 )
Income (loss) before income tax (expense) benefit 437 ( 95 ) 1,282 857
Income tax (expense) benefit ( 116 ) 22 ( 348 ) ( 222 )
Net income (loss) 321 ( 73 ) 934 635
Less: Net income attributable to noncontrolling interests ( 8 ) ( 12 ) ( 16 ) ( 19 )
Net income (loss) attributable to Fox Corporation stockholders $ 313 $ ( 85 ) $ 918 $ 616
Revenues by Segment by Component
For the three months ended December 31,
For the six months ended December 31,
2022 2021 2022 2021
(in millions)
Cable Network Programming
Affiliate fee $ 1,026 $ 1,039 $ 2,055 $ 2,065
Advertising 451 454 767 765
Other 155 145 241 224
Total Cable Network Programming revenues 1,632 1,638 3,063 3,054
Television
Advertising 2,052 1,954 2,957 2,773
Affiliate fee 686 649 1,368 1,290
Other 196 156 323 277
Total Television revenues 2,934 2,759 4,648 4,340
Other, Corporate and Eliminations 39 44 86 92
Total revenues $ 4,605 $ 4,441 $ 7,797 $ 7,486
14


FOX CORPORATION
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
For the three months ended December 31,
For the six months ended December 31,
2022 2021 2022 2021
(in millions)
Depreciation and amortization
Cable Network Programming $ 17 $ 17 $ 34 $ 27
Television 30 28 59 54
Other, Corporate and Eliminations 56 48 109 91
Total depreciation and amortization $ 103 $ 93 $ 202 $ 172
As of
December 31,
2022
As of
June 30,
2022
(in millions)
Assets
Cable Network Programming $ 2,753 $ 2,682
Television 9,493 7,915
Other, Corporate and Eliminations 10,108 11,010
Investments 772 578
Total assets $ 23,126 $ 22,185
NOTE 11. ADDITIONAL FINANCIAL INFORMATION
Interest Expense, net
The following table sets forth the components of Interest expense, net included in the Statements of Operations:
For the three months ended December 31,
For the six months ended December 31,
2022 2021 2022 2021
(in millions)
Interest expense $ ( 89 ) $ ( 98 ) $ ( 176 ) $ ( 195 )
Interest income 29 1 48 1
Total interest expense, net $ ( 60 ) $ ( 97 ) $ ( 128 ) $ ( 194 )
15


FOX CORPORATION
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
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,
2022 2021 2022 2021
(in millions)
Net gains (losses) on investments in equity securities (a)
$ 114 $ ( 165 ) $ 135 $ ( 102 )
U.K. Newspaper Matters Indemnity (b)
( 21 ) ( 32 ) ( 82 ) ( 49 )
Transaction costs
( 12 ) ( 11 ) ( 28 ) ( 24 )
Other ( 8 ) ( 3 ) ( 28 ) 33
Total other, net $ 73 $ ( 211 ) $ ( 3 ) $ ( 142 )
(a)
Net gains (losses) on investments in equity securities for the three and six months ended December 31, 2022 and 2021 include the gains (losses) 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.”
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,
2022
As of
June 30,
2022
(in millions)
Operating lease assets (a)
$ 969 $ 477
Investments (b)
772 578
Inventories, net 680 521
Grantor Trust 264 270
Other 237 225
Total other non-current assets $ 2,922 $ 2,071
(a)
See Note 8—Commitments and Contingencies under the heading “Commitments.”
(b)
Includes investments accounted for at fair value on a recurring basis of $ 625 million and $ 435 million as of December 31, 2022 and June 30, 2022, respectively (See Note 4—Fair Value).
16


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,
2022
As of
June 30,
2022
(in millions)
Programming payable $ 962 $ 686
Accrued expenses 939 992
Deferred revenue 148 209
Operating lease liabilities 109 107
Other current liabilities 385 302
Total accounts payable, accrued expenses and other current liabilities $ 2,543 $ 2,296
Other Liabilities
The following table sets forth the components of Other liabilities included in the Balance Sheets:
As of
December 31,
2022
As of
June 30,
2022
(in millions)
Non-current operating lease liabilities (a)
$ 900 $ 405
Accrued non-current pension/postretirement liabilities 427 447
Other non-current liabilities 176 268
Total other liabilities $ 1,503 $ 1,120
(a)
See Note 8—Commitments and Contingencies under the heading “Commitments.”
Future Performance Obligations
As of December 31, 2022, approximately $ 4.5 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.
17


FOX CORPORATION
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
Supplemental Information
For the six months ended December 31,
2022 2021
(in millions)
Supplemental cash flows information
Cash paid for interest $ ( 174 ) $ ( 200 )
Cash paid for income taxes $ ( 179 ) $ ( 155 )
Supplemental information on acquisitions
Fair value of assets acquired, excluding cash $ — $ 335
Cash acquired — 10
Liabilities assumed — ( 48 )
Redeemable noncontrolling interests issued — ( 5 )
Cash paid — ( 239 )
Fair value of equity instruments issued as consideration to third parties (a)
— 53
Issuance of subsidiary common units — ( 53 )
Fair value of equity instruments consideration $ — $ —
(a)
Includes Redeemable noncontrolling interests.
18

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, (“fiscal”) 2022 as filed with the SEC on August 12, 2022 (the “2022 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 months ended December 31, 2022 and 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 months ended December 31, 2022 and 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 Resource s —This section provides an analysis of the Company’s cash flows for the six months ended December 31, 2022 and 2021, as well as a discussion of the Company’s outstanding debt and commitments, both firm and contingent, that existed as of December 31, 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 2022 Form 10-K 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:
• Cable Network Programming , which produces and licenses news and sports content distributed through traditional cable television systems, direct broadcast satellite operators and telecommunication companies (“traditional MVPDs”), virtual multi-channel video programming distributors (“virtual MVPDs”) and other digital platforms, primarily in the U.S.
• Television , which produces, acquires, markets and distributes programming through the FOX broadcast network, advertising-supported video-on-demand (“AVOD”) service TUBI, 29 full power broadcast television stations, including 11 duopolies, and other digital platforms, primarily in the U.S. Eighteen of the broadcast television stations are affiliated with the FOX Network, 10 are affiliated with MyNetworkTV and one is an independent station.
• 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, studio operation services and includes all operations of the facility. Credible is a U.S. consumer finance marketplace.
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Other Business Developments
On October 14, 2022, the Company announced that its Board of Directors (the “Board”) had formed a special committee composed of independent members of the Board (the “Special Committee”) to begin exploring a potential combination with News Corporation. On January 24, 2023, the Company announced that the Board had received a letter from K. Rupert Murdoch withdrawing the proposal to explore the potential combination and, as a result of this action, the Special Committee was dissolved.
RESULTS OF OPERATIONS
Results of Operations—For the three and six months ended December 31, 2022 versus the three and six months ended December 31, 2021.
The following table sets forth the Company’s operating results for the three and six months ended December 31, 2022 , as compared to the three and six months ended December 31, 2021:
For the three months ended December 31,
For the six months ended December 31,
2022 2021 Change % Change 2022 2021 Change % Change
(in millions, except %) Better/(Worse) Better/(Worse)
Revenues
Affiliate fee $ 1,712 $ 1,688 $ 24 1 % $ 3,423 $ 3,355 $ 68 2 %
Advertising 2,503 2,408 95 4 % 3,723 3,538 185 5 %
Other 390 345 45 13 % 651 593 58 10 %
Total revenues 4,605 4,441 164 4 % 7,797 7,486 311 4 %
Operating expenses (3,528) (3,667) 139 4 % (5,184) (5,238) 54 1 %
Selling, general and administrative (550) (468) (82) (18) % (998) (883) (115) (13) %
Depreciation and amortization (103) (93) (10) (11) % (202) (172) (30) (17) %
Interest expense, net (60) (97) 37 38 % (128) (194) 66 34 %
Other, net 73 (211) 284 ** (3) (142) 139 98 %
Income (loss) before income tax (expense) benefit 437 (95) 532 ** 1,282 857 425 50 %
Income tax (expense) benefit (116) 22 (138) ** (348) (222) (126) (57) %
Net income (loss) 321 (73) 394 ** 934 635 299 47 %
Less: Net income attributable to noncontrolling interests (8) (12) 4 33 % (16) (19) 3 16 %
Net income (loss) attributable to Fox Corporation stockholders $ 313 $ (85) $ 398 ** $ 918 $ 616 $ 302 49 %
**
not meaningful
Overview
For the three months ended December 31, 2022 and 2021
The Company’s revenues increased 4% for the three months ended December 31, 2022, as compared to the corresponding period of fiscal 2022, due to higher affiliate fee, advertising and other revenues. The increase in affiliate fee revenue was primarily due to higher average rates per subscriber and higher fees received from
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television stations that are affiliated with the FOX Network, led by contractual rate increases on existing affiliate agreements and from affiliate agreement renewals, partially offset by a lower average number of subscribers. The increase in advertising revenue was primarily attributable to the broadcast of the Fédération International de Football Association (“FIFA”) Men’s World Cup, higher political advertising revenue at FOX Television Stations principally due to the November 2022 U.S. midterm elections, additional National Football League (“NFL”) regular season games, higher NFL ratings and continued growth at TUBI. Partially offsetting this increase was the absence of NFL Thursday Night Football (“ TNF ”) and lower direct response advertising revenue at FOX News Media. The increase in other revenues was primarily due to the impact of acquisitions of entertainment production companies in fiscal 2022 and higher FOX Nation subscription revenues.
Operating expenses decreased 4% for the three months ended December 31, 2022, as compared to the corresponding period of fiscal 2022, primarily due to the absence of TNF , partially offset by higher sports programming rights amortization and production costs driven by the broadcast of the FIFA Men’s World Cup and NFL and Major League Baseball (“MLB”) content and higher costs associated with increased digital investment at FOX News Media and TUBI.
Selling, general and administrative expenses increased 18% for the three months ended December 31, 2022, as compared to the corresponding period of fiscal 2022, primarily due to higher legal and employee related costs.
For the six months ended December 31, 2022 and 2021
The Company’s revenues increased 4% for the six months ended December 31, 2022, as compared to the corresponding period of fiscal 2022, due to higher affiliate fee, advertising and other revenues. The increase in affiliate fee revenue was primarily due to higher average rates per subscriber and higher fees received from television stations that are affiliated with the FOX Network, led by contractual rate increases on existing affiliate agreements and from affiliate agreement renewals, partially offset by a lower average number of subscribers. The increase in advertising revenue was primarily attributable to the broadcast of the FIFA Men’s World Cup, higher political advertising revenue at FOX Television Stations principally due to the November 2022 U.S. midterm elections, additional NFL regular season games, higher NFL pricing and continued growth at TUBI. Partially offsetting this increase was the absence of TNF and lower ratings at FOX Entertainment. The increase in other revenues was primarily due to the impact of acquisitions of entertainment production companies in fiscal 2022 and higher FOX Nation subscription revenues.
Operating expenses decreased 1% for the six months ended December 31, 2022, as compared to the corresponding period of fiscal 2022, primarily due to the absence of TNF , partially offset by higher sports programming rights amortization and production costs due to the broadcast of the FIFA Men’s World Cup and NFL and MLB content, and increased digital investment at TUBI and FOX News Media.
Selling, general and administrative expenses increased 13% for the six months ended December 31, 2022, as compared to the corresponding period of fiscal 2022, primarily due to higher legal and employee related costs.
Depreciation and amortization —Depreciation and amortization expense increased 11% and 17% for the three and six months ended December 31, 2022, respectively, as compared to the corresponding periods of fiscal 2022, primarily due to increased spending as a result of digital initiatives and the impact of the fiscal 2022 acquisitions of entertainment production companies.
Other, net —See Note 11—Additional Financial Information to the accompanying Financial Statements under the heading “Other, net.”
Income tax (expense) benefit —The Company’s tax provision and related effective tax rate of 27% for the three and six months ended December 31, 2022 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 for the three and six months ended December 31, 2021 was higher than the statutory rate primarily due to state taxes, offset by other permanent items.
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Net income (loss) —The Company recorded net income of $321 million and $934 million for the three and six months ended December 31, 2022, respectively, as compared to a net loss of $73 million and net income of $635 million for the three and six months ended December 31, 2021, respectively. The increases were primarily due to higher Segment EBITDA (as defined below) at the Television segment and a higher gain recognized on the change in fair value of the Company's investment in Flutter Entertainment plc, partially offset by lower Segment EBITDA at the Cable segment.
Segment Analysis
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.
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 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.
The following tables set forth the Company’s Revenues and Segment EBITDA for the three and six months ended December 31, 2022, as compared to the three and six months ended December 31, 2021:
For the three months ended December 31,
For the six months ended December 31,
2022 2021 Change % Change 2022 2021 Change % Change
(in millions, except %) Better/(Worse) Better/(Worse)
Revenues
Cable Network Programming $ 1,632 $ 1,638 $ (6) — % $ 3,063 $ 3,054 $ 9 — %
Television 2,934 2,759 175 6 % 4,648 4,340 308 7 %
Other, Corporate and Eliminations 39 44 (5) (11) % 86 92 (6) (7) %
Total revenues $ 4,605 $ 4,441 $ 164 4 % $ 7,797 $ 7,486 $ 311 4 %
For the three months ended December 31,
For the six months ended December 31,
2022 2021 Change % Change 2022 2021 Change % Change
(in millions, except %) Better/(Worse) Better/(Worse)
Segment EBITDA
Cable Network Programming $ 353 $ 668 $ (315) (47) % $ 1,095 $ 1,442 $ (347) (24) %
Television 256 (273) 529 ** 665 86 579 **
Other, Corporate and Eliminations (78) (85) 7 8 % (137) (154) 17 11 %
Adjusted EBITDA (a)
$ 531 $ 310 $ 221 71 % $ 1,623 $ 1,374 $ 249 18 %
** not meaningful
(a)
For a discussion of Adjusted EBITDA and a reconciliation of Net income to Adjusted EBITDA, see “Non-GAAP Financial Measures” below.
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Cable Network Programming (39% and 41% of the Company’s revenues for the first six months of fiscal 2023 and 2022, respectively)
For the three months ended December 31,
For the six months ended December 31,
2022 2021 Change % Change 2022 2021 Change % Change
(in millions, except %) Better/(Worse) Better/(Worse)
Revenues
Affiliate fee $ 1,026 $ 1,039 $ (13) (1) % $ 2,055 $ 2,065 $ (10) — %
Advertising 451 454 (3) (1) % 767 765 2 — %
Other 155 145 10 7 % 241 224 17 8 %
Total revenues 1,632 1,638 (6) — % 3,063 3,054 9 — %
Operating expenses (1,097) (837) (260) (31) % (1,661) (1,360) (301) (22) %
Selling, general and administrative (186) (137) (49) (36) % (315) (261) (54) (21) %
Amortization of cable distribution investments 4 4 — — % 8 9 (1) (11) %
Segment EBITDA $ 353 $ 668 $ (315) (47) % $ 1,095 $ 1,442 $ (347) (24) %
For the three months ended December 31, 2022 and 2021
Revenues at the Cable Network Programming segment remained relatively flat for the three months ended December 31, 2022, as compared to the corresponding period of fiscal 2022, as the decreases in affiliate fee and advertising revenues were offset by higher other revenues. The decrease in affiliate fee revenue was primarily due to a lower average number of subscribers, partially offset by higher average rates per subscriber, led by contractual rate increases on existing affiliate agreements and from affiliate agreement renewals. The decrease in the average number of subscribers was due to a reduction in traditional MVPD subscribers, partially offset by an increase in virtual MVPD subscribers. The decrease in advertising revenue was primarily due to lower direct response advertising revenue at FOX News Media, partially offset by the broadcast of the FIFA Men’s World Cup at the national sports networks in the current year quarter. The increase in other revenues was primarily due to higher FOX Nation subscription revenues.
Cable Network Programming Segment EBITDA decreased 47% for the three months ended December 31, 2022, as compared to the corresponding period of fiscal 2022, due to higher expenses. Operating expenses increased primarily due to higher sports programming rights amortization, led by the broadcast of the FIFA Men’s World Cup, the renewed MLB contract, and additional college football games at the national sports networks, and increased digital investment at FOX News Media. Selling, general and administrative expenses increased principally due to higher legal costs at FOX News Media.
For the six months ended December 31, 2022 and 2021
Revenues at the Cable Network Programming segment remained relatively flat for the six months ended December 31, 2022, as compared to the corresponding period of fiscal 2022, as the decrease in affiliate fee revenue was offset by higher advertising and other revenues. Affiliate fee revenue remained relatively consistent as the decrease in the average number of subscribers was offset by higher average rates per subscriber, led by contractual rate increases on existing affiliate agreements and from affiliate agreement renewals. The decrease in the average number of subscribers was due to a reduction in traditional MVPD subscribers, partially offset by an increase in virtual MVPD subscribers. Advertising revenue remained relatively consistent as the broadcast of the FIFA Men’s World Cup at the national sports networks was offset by lower digital advertising revenue at FOX News Media. The increase in other revenues was primarily due to higher FOX Nation subscription revenues.
Cable Network Programming Segment EBITDA decreased 24% for the six months ended December 31, 2022, as compared to the corresponding period of fiscal 2022, primarily due to higher expenses. Operating expenses increased primarily due to higher sports programming rights amortization led by the broadcast of the FIFA Men’s World Cup, the renewed MLB contract and additional college football games at the national sports
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networks, and increased digital investment at FOX News Media. Selling, general and administrative expenses increased principally due to higher legal costs at FOX News Media.
Television (60% and 58% of the Company’s revenues for the first six months of fiscal 2023 and 2022, respectively)
For the three months ended December 31,
For the six months ended December 31,
2022 2021 Change % Change 2022 2021 Change % Change
(in millions, except %) Better/(Worse) Better/(Worse)
Revenues
Advertising $ 2,052 $ 1,954 $ 98 5 % $ 2,957 $ 2,773 $ 184 7 %
Affiliate fee 686 649 37 6 % 1,368 1,290 78 6 %
Other 196 156 40 26 % 323 277 46 17 %
Total revenues 2,934 2,759 175 6 % 4,648 4,340 308 7 %
Operating expenses (2,415) (2,809) 394 14 % (3,486) (3,835) 349 9 %
Selling, general and administrative (263) (223) (40) (18) % (497) (419) (78) (19) %
Segment EBITDA $ 256 $ (273) $ 529 ** $ 665 $ 86 $ 579 **
**
not meaningful
For the three months ended December 31, 2022 and 2021
Revenues at the Television segment increased 6% for the three months ended December 31, 2022, as compared to the corresponding period of fiscal 2022, due to higher advertising, affiliate fee and other revenues. The increase in advertising revenue was primarily due to the broadcast of the FIFA Men’s World Cup , additional regular season NFL games, higher NFL ratings, higher political advertising revenue at FOX Television Stations principally due to the November 2022 U.S. midterm elections, and continued growth at TUBI. Partially offsetting this increase was the absence of TNF on the FOX Network in the current year. 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 impact of acquisitions of entertainment production companies in fiscal 2022.
Television Segment EBITDA increased $529 million for the three months ended December 31, 2022, as compared to the corresponding period of fiscal 2022, due to the revenue increases noted above and lower expenses. Operating expenses decreased primarily due to the absence of TNF , partially offset by higher sports programming rights amortization and production costs driven by the broadcast of the FIFA Men’s World Cup and NFL content including additional regular season games, as well as increased digital investment in TUBI. Selling, general and administrative expenses increased primarily due to higher employee related costs.
For the six months ended December 31, 2022 and 2021
Revenues at the Television segment increased 7% for the six months ended December 31, 2022, as compared to the corresponding period of fiscal 2022, due to higher advertising, affiliate fee and other revenues. The increase in advertising revenue was primarily due to the broadcast of the FIFA Men’s World Cup , additional regular season NFL games, higher NFL ratings, higher political advertising revenue at FOX Television Stations principally due to the November 2022 U.S. midterm elections, and continued growth at TUBI. Partially offsetting this increase was the absence of TNF and lower ratings at FOX Entertainment. 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
24

the Company’s owned and operated television stations. The increase in other revenues was primarily due to the impact of acquisitions of entertainment production companies in fiscal 2022.
Television Segment EBITDA increased $579 million for the six months ended December 31, 2022, as compared to the corresponding period of fiscal 2022, due to the revenue increases noted above and lower expenses. Operating expenses decreased primarily due to the absence of TNF partially offset by higher sports programming rights amortization and production costs driven by the broadcast of the FIFA Men’s World Cup, NFL content including additional regular season games, the renewed MLB contract and increased digital investment in TUBI. Selling, general and administrative expenses increased primarily due to the impact of the fiscal 2022 acquisitions of entertainment production companies and higher employee related costs.
Other, Corporate and Eliminations (1% of the Company’s revenues for the first six months of fiscal 2023 and 2022)
For the three months ended December 31,
For the six months ended December 31,
2022 2021 Change % Change 2022 2021 Change % Change
(in millions, except %) Better/(Worse) Better/(Worse)
Revenues $ 39 $ 44 $ (5) (11) % $ 86 $ 92 $ (6) (7) %
Operating expenses (16) (21) 5 24 % (37) (43) 6 14 %
Selling, general and administrative (101) (108) 7 6 % (186) (203) 17 8 %
Segment EBITDA $ (78) $ (85) $ 7 8 % $ (137) $ (154) $ 17 11 %
For the three and six months ended December 31, 2022 and 2021
Revenues at the Other, Corporate and Eliminations segment for the three and six months ended December 31, 2022 and 2021 include revenues generated by Credible and the operation of the FOX Studio Lot for third parties. Operating expenses for the three and six months ended December 31, 2022 and 2021 include advertising and promotional expenses at Credible. Selling, general and administrative expenses for the three and six months ended December 31, 2022 and 2021 primarily relate to employee costs, professional fees and the costs of operating the FOX Studio Lot.
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 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).
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.
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The following table reconciles Net income to Adjusted EBITDA for the three and six months ended December 31, 2022, as compared to the three and six months ended December 31, 2021:
For the three months ended December 31,
For the six months ended December 31,
2022 2021 2022 2021
(in millions)
Net income (loss) $ 321 $ (73) $ 934 $ 635
Add
Amortization of cable distribution investments 4 4 8 9
Depreciation and amortization 103 93 202 172
Interest expense, net 60 97 128 194
Other, net (73) 211 3 142
Income tax expense (benefit) 116 (22) 348 222
Adjusted EBITDA $ 531 $ 310 $ 1,623 $ 1,374
The following table sets forth the computation of Adjusted EBITDA for the three and six months ended December 31, 2022, as compared to the three and six months ended December 31, 2021.
For the three months ended December 31,
For the six months ended December 31,
2022 2021 2022 2021
(in millions)
Revenues $ 4,605 $ 4,441 $ 7,797 $ 7,486
Operating expenses (3,528) (3,667) (5,184) (5,238)
Selling, general and administrative (550) (468) (998) (883)
Amortization of cable distribution investments 4 4 8 9
Adjusted EBITDA $ 531 $ 310 $ 1,623 $ 1,374
LIQUIDITY AND CAPITAL RESOURCES
Current Financial Condition
The Company has approximately $4.1 billion of cash and cash equivalents as of December 31, 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 31, 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.
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.
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Sources and Uses of Cash
Net cash used in operating activities for the six months ended December 31, 2022 and 2021 was as follows (in millions):
For the six months ended December 31, 2022 2021
Net cash used in operating activities $ (261) $ (656)
The decrease in net cash used in operating activities during the six months ended December 31, 2022, as compared to the corresponding period of fiscal 2022, was primarily due to higher Segment EBITDA and lower sports rights payments due to the absence of Thursday Night Football .
Net cash used in investing activities for the six months ended December 31, 2022 and 2021 was as follows (in millions):
For the six months ended December 31, 2022 2021
Net cash used in investing activities $ (221) $ (296)
The decrease in net cash used in investing activities during the six months ended December 31, 2022, as compared to the corresponding period of fiscal 2022, was primarily due to the absence of acquisitions and dispositions, partially offset by an increase in capital expenditures and higher investments in equity securities.
Net cash used in financing activities for six months ended December 31, 2022 and 2022 was as follows (in millions):
For the six months ended December 31, 2022 2021
Net cash used in financing activities $ (660) $ (679)
The decrease in net cash used in financing activities during the six months ended December 31, 2022, as compared to the corresponding period of fiscal 2022, was primarily due to the sale of a subsidiary non-controlling interest.
Stock Repurchase Program
See Note 6—Stockholders’ Equity to the accompanying Financial Statements under the heading “Stock Repurchase Program.” As of December 31, 2022 , the Company’s remaining stock repurchase authorization was approximately $0.9 billion. Subsequent to December 31, 2022 , the Company repurchased approximately 1.6 million shares of Class A Common Stock and Class B Common Stock (collectively, the “Common Stock”) for approximately $50 million and the Company announced that the Board has authorized incremental stock repurchases of an additional $3 billion of Common Stock. With this increase, the Company’s total stock repurchase authorization is now $7 billion. Subject to market conditions and other factors, the Company intends to repurchase in the open market or otherwise a combination of Class A Common Stock and Class B Common Stock. The program has no time limit and may be modified, suspended or discontinued at any time. The Company also announced that it intends to enter into an accelerated share repurchase transaction to repurchase $1 billion of Class A Common Stock under the stock repurchase program and to repurchase an additional $450 million of Common Stock during the remainder of fiscal 2023.
Dividends
Subsequent to December 31, 2022, the Company declared a semi-annual dividend of $0.25 per share on both the Class A Common Stock and the Class B Common Stock. The dividend declared is payable on March 29, 2023 with a record date for determining dividend entitlements of March 1, 2023 .
Debt Instruments
Borrowings include senior notes (See Note 9—Borrowings in the 2022 Form 10-K under the heading “Public Debt – Senior Notes Issued”).
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Ratings of the Senior Notes
The following table summarizes the Company’s credit ratings as of December 31, 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, Recently Issued Accounting Guidance and Other.”
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; (v) future share repurchases; and (vi) 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:
• 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 MVPDs;
• declines in advertising expenditures due to various factors such as the economic prospects of advertisers or the economy, major sports events and election 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 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 impact of COVID-19 and other widespread health emergencies or pandemics and measures to contain their spread;
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• 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, and the effects of any combination or significant acquisition, disposition or other similar transaction involving the Company;
• 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 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 outcomes 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 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 2022 Form 10-K) and the indemnification arrangements entered into in connection with the Separation and the Distribution (each as defined in Note 1—Description of Business and Basis of Presentation in the 2022 Form 10-K); and
• the other risks and uncertainties detailed in Part I., Item 1A. ‘Risk Factors’ in the 2022 Form 10-K.
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 2022 Form 10-K.
29

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 quarter of fiscal 2023 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
30

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, 2022, as filed with the Securities and Exchange Commission on August 12, 2022.
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 31, 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)
(in millions)
October 1, 2022 – October 31, 2022
Class A Common Stock 1,149,612 $ 30.45
Class B Common Stock 528,016 28.41
November 1, 2022 – November 30, 2022
Class A Common Stock 2,411,627 30.38
Class B Common Stock 1,100,294 28.60
December 1, 2022 – December 31, 2022
Class A Common Stock 2,146,959 31.09
Class B Common Stock 970,295 29.22
Total
Class A Common Stock 5,708,198 30.66
Class B Common Stock 2,598,605 28.79
8,306,803 $ 900
(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 (“the Board”) 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. Subsequent to December 31, 2022, the Company announced that the Board has authorized incremental stock repurchases of an additional $3 billion of Common Stock (See Note 6—Stockholders’ Equity to the accompanying Unaudited Consolidated Financial Statements of FOX under the heading “Stock Repurchase Program”).
In total, the Company repurchased approximately 16 million shares of Common Stock for approximately $500 million during the six months ended December 31, 2022.
31

ITEM 3.        DEFAULTS UPON SENIOR SECURITIES
Not applicable
ITEM 4.        MINE SAFETY DISCLOSURES
Not applicable
ITEM 5.        OTHER INFORMATION
Not applicable
ITEM 6.        EXHIBITS
(a)    Exhibits.
3.1
10.1
31.1
31.2
32.1
101
The following financial information from the Company’s Quarterly Report on Form 10-Q for the quarter ended December 31, 2022 formatted in Inline XBRL (eXtensible Business Reporting Language): (i) Unaudited Consolidated Statements of Operations for the three and six months ended December 31, 2022 and 2021; (ii) Unaudited Consolidated Statements of Comprehensive Income for the three and six months ended December 31, 2022 and 2021; (iii) Consolidated Balance Sheets as of December 31, 2022 (unaudited) and June 30, 2022 (audited); (iv) Unaudited Consolidated Statements of Cash Flows for the six months ended December 31, 2022 and 2021; (v) Unaudited Consolidated Statements of Equity for the three and six months ended December 31, 2022 and 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
**
Furnished herewith.
32

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 8, 2023
33
TABLE OF CONTENTS
Note 1. Description Of Business and Basis Of PresentationprintNote 2. Acquisitions, Disposals and Other TransactionsprintNote 3. Inventories, NetprintNote 4. Fair ValueprintNote 5. BorrowingsprintNote 6. Stockholders EquityprintNote 7. Equity-based CompensationprintNote 8. Commitments and ContingenciesprintNote 9. Pension and Other Postretirement BenefitsprintNote 10. Segment InformationprintNote 11. Additional Financial InformationprintItem 2. Management S Discussion and Analysis Of Financial Condition and Results Of OperationsprintItem 3. Quantitative and Qualitative Disclosures About Market RiskprintItem 4. Controls and ProceduresprintPart IIprintItem 1. Legal ProceedingsprintItem 1A. Risk FactorsprintItem 2. Unregistered Sales Of Equity Securities and Use Of ProceedsprintItem 3. Defaults Upon Senior SecuritiesprintItem 4. Mine Safety DisclosuresprintItem 5. Other InformationprintItem 6. Exhibitsprint

Exhibits

3.1 Amended and Restated Certificate of Incorporation of Fox Corporation.* 10.1 Fox Corporation 2019 Shareholder Alignment Plan Australian Sub-Plan.*+ 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.**