Segment Information

9 Months Ended

Mar. 31, 2020

NOTE 13. SEGMENT INFORMATION

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

•

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

•

Television, which principally consists of the acquisition, marketing and distribution of broadcast network programming nationally under the FOX brand and the operation of 29 full power broadcast television stations, including 11 duopolies, in the U.S. Of these stations, 18 are affiliated with the FOX Network, 10 are affiliated with MyNetworkTV and one is an independent station.

•

Other, Corporate and Eliminations, which principally consists of corporate overhead costs, intracompany eliminations, the FOX Studios lot and Credible. The FOX Studios 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.

Beginning with the announcement of the Company’s financial results for the third quarter of fiscal 2019, the Company has renamed as “Segment EBITDA” the measure that it previously referred to as “Segment OIBDA.” The definition of this measure has not changed: 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, Interest income, 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 nine months ended March 31, 2020 and 2019:

	For the three months ended March 31,						For the nine months ended March 31,
	2020			2019			2020			2019
	(in millions)
Revenues
Cable Network Programming	$	1,467		$	1,383		$	4,221		$	4,082
Television		1,926			1,370			5,548			4,796
Other, Corporate and Eliminations		47			(1	)		116			(2	)
Total revenues	$	3,440		$	2,752		$	9,885		$	8,876
Segment EBITDA
Cable Network Programming	$	792		$	741		$	2,032		$	1,893
Television		224			99			261			256
Other, Corporate and Eliminations		(96	)		(74	)		(256	)		(177	)
Amortization of cable distribution investments		(5	)		(10	)		(19	)		(29	)
Depreciation and amortization		(57	)		(58	)		(164	)		(152	)
Impairment and restructuring charges		-			(14	)		(9	)		(14	)
Interest expense		(89	)		(81	)		(269	)		(112	)
Interest income		8			19			33			19
Other, net		(632	)		84			(345	)		(116	)
Income before income tax expense		145			706			1,264			1,568
Income tax expense		(55	)		(167	)		(347	)		(390	)
Net income		90			539			917			1,178
Less: Net income attributable to noncontrolling interests		(12	)		(10	)		(40	)		(37	)
Net income attributable to Fox Corporation stockholders	$	78		$	529		$	877		$	1,141

Revenues by Segment by Component

	For the three months ended March 31,					For the nine months ended March 31,
	2020		2019			2020		2019
	(in millions)
Cable Network Programming
Affiliate fee	$	1,006	$	968		$	2,902	$	2,845
Advertising		304		276			895		893
Other		157		139			424		344
Total Cable Network Programming revenues		1,467		1,383			4,221		4,082
Television
Advertising		1,266		812			3,726		3,245
Affiliate fee		553		452			1,487		1,257
Other		107		106			335		294
Total Television revenues		1,926		1,370			5,548		4,796
Other, Corporate and Eliminations		47		(1	)		116		(2	)
Total revenues	$	3,440	$	2,752		$	9,885	$	8,876

Future Performance Obligations

As of March 31, 2020, approximately $5.3 billion of revenues are expected to be recognized primarily over the next one to three years. The Company’s most significant remaining performance obligations relate to affiliate contracts and content licensing contracts with fixed fees. The amount disclosed does not include (i) revenues related to performance obligations that are part of a contract whose original expected duration is one year or less, (ii) revenues that are in the form of sales- or usage-based royalties and (iii) revenues related to performance obligations for which the Company elects to recognize revenue in the amount it has a right to invoice.

	For the three months ended March 31,				For the nine months ended March 31,
	2020		2019		2020		2019
	(in millions)
Depreciation and amortization
Cable Network Programming	$	15	$	12	$	44	$	35
Television		17		28		46		80
Other, Corporate and Eliminations		25		18		74		37
Total depreciation and amortization	$	57	$	58	$	164	$	152

	As of March 31, 2020		As of June 30, 2019
	(in millions)
Assets
Cable Network Programming	$	2,714	$	2,584
Television		7,226		6,598
Other, Corporate and Eliminations		9,950		9,462
Investments		347		865
Total assets	$	20,237	$	19,509

	As of March 31, 2020		As of June 30, 2019
	(in millions)
Goodwill and intangible assets, net
Cable Network Programming	$	1,288	$	1,246
Television		4,193		3,891
Other, Corporate and Eliminations		692		405
Total goodwill and intangible assets, net	$	6,173	$	5,542