FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS

3 Months Ended

Sep. 30, 2025

Fair Value Disclosures [Abstract]

FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS

NOTE 8. FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS

In accordance with ASC 820, Fair Value Measurements (“ASC 820”) fair value measurements are required to be disclosed using a three-tiered fair value hierarchy which distinguishes market participant assumptions into the following categories: 

•Level 1 — Quoted prices in active markets for identical assets or liabilities.

•Level 2 — Observable inputs other than quoted prices included in Level 1. The Company could value assets and liabilities included in this level using dealer and broker quotations, certain pricing models, bid prices, quoted prices for similar assets and liabilities in active markets or other inputs that are observable or can be corroborated by observable market data.

•Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. For the Company, this primarily includes the use of forecasted financial information and other valuation related assumptions such as discount rates and long term growth rates in the income approach as well as the market approach which utilizes certain market and transaction multiples.

The following table summarizes assets and liabilities, as applicable, measured at fair value:

	As of September 30, 2025								As of June 30, 2025
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
	(in millions)
Assets:
Interest rate derivatives - cash flow hedges	$	—	$	10	$	—	$	10	$	—	$	12	$	—	$	12
Equity and other securities	74		54		814		942		67		50		814		931
Total assets	$	74	$	64	$	814	$	952	$	67	$	62	$	814	$	943

Equity and Other Securities

The fair values of equity and other securities with quoted prices in active markets, which are classified as Level 1 in the fair value hierarchy outlined above, and those that rely on significant observable inputs other than quoted prices in active markets, which are classified as Level 2 in the fair value hierarchy outlined above, are determined based on the closing price at the end of each reporting period. The fair values of equity and other securities without readily determinable fair market values are determined based on cost, less any impairment, plus or minus changes in fair value resulting from observable price changes in orderly transactions for an identical or similar investment of the same issuer. These securities are classified as Level 3 in the fair value hierarchy outlined above.

A rollforward of the Company’s equity and other securities classified as Level 3 is as follows:

	For the three months ended September 30,
	2025		2024
	(in millions)
Balance - beginning of period	$	814	$	122
Additions	3		—
Foreign exchange and other	(3)		2
Balance - end of period	$	814	$	124

Derivative Instruments

The Company is directly and indirectly affected by risks associated with changes in certain market conditions. When deemed appropriate, the Company uses derivative instruments to mitigate the potential impact of these market risks. The primary market risk managed by the Company through the use of derivative instruments relates to interest rate risk arising from floating rate News Corporation borrowings.

The Company formally designates qualifying derivatives as hedge relationships and applies hedge accounting when considered appropriate. The Company does not use derivative financial instruments for trading or speculative purposes.

Derivatives are classified as current or non-current in the Balance Sheets based on their maturity dates. Refer to the table below for further details:

	Balance Sheet Classification	As of September 30, 2025		As of June 30, 2025
		(in millions)
Interest rate derivatives—cash flow hedges	Other current assets	$	6	$	7
Interest rate derivatives—cash flow hedges	Other non-current assets	$	4	$	5

Cash Flow Hedges

The Company utilizes interest rate derivatives to mitigate interest rate risk in relation to future interest payments.

The total notional value of interest rate swap derivatives designated for hedging was approximately $469 million as of September 30, 2025 for News Corporation borrowings. The maximum hedged term over which the Company is hedging exposure to variability in interest payments is to March 2027. As of September 30, 2025, the Company estimates that approximately $7 million of net derivative gains related to its interest rate swap derivative cash flow hedges included in Accumulated other comprehensive loss will be reclassified into the Statements of Operations within the next twelve months.

The following tables present the impact that changes in the fair values had on Accumulated other comprehensive loss and the Statements of Operations during the three months ended September 30, 2025 and 2024 for derivatives designated as cash flow hedges:

Gains (losses) recognized in Accumulated other comprehensive loss for the three months ended September 30, 2025 and 2024, by derivative instrument:

		For the three months ended September 30,
		2025		2024
	(in millions)
Interest rate derivatives—cash flow hedges		$	1	$	(10)

(Gains) losses reclassified from Accumulated other comprehensive loss into the Statements of Operations for the three months ended September 30, 2025 and 2024, by derivative instrument:

	Income Statement Classification	For the three months ended September 30,
		2025		2024
		(in millions)
Interest rate derivatives—cash flow hedges	Interest income, net	$	(3)	$	(4)

Other Fair Value Measurements

As of September 30, 2025, the carrying value of the Company’s outstanding borrowings approximates the fair value. The 2022 Senior Notes and the 2021 Senior Notes are classified as Level 2 and the remaining borrowings are classified as Level 3 in the fair value hierarchy.