Segment Information

12 Months Ended

Jun. 30, 2020

NOTE 17. 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. The Television segment also includes Tubi, a free advertising-supported video-on-demand service.

•

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, Interest income, Other, net and Income tax (expense) benefit. 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 fiscal 2020, 2019 and 2018:

	For the years ended June 30,
	2020			2019			2018
	(in millions)
Revenues
Cable Network Programming	$	5,492		$	5,381		$	5,049
Television		6,661			5,979			5,106
Other, Corporate and Eliminations		150			29			(2	)
Total revenues	$	12,303		$	11,389		$	10,153
Segment EBITDA
Cable Network Programming	$	2,706		$	2,495		$	2,308
Television		430			470			379
Other, Corporate and Eliminations		(357	)		(284	)		(195	)
Amortization of cable distribution investments		(24	)		(38	)		(53	)
Depreciation and amortization		(258	)		(212	)		(171	)
Impairment and restructuring charges		(451	)		(26	)		(16	)
Interest expense		(369	)		(203	)		(43	)
Interest income		35			41			-
Other, net		(248	)		(19	)		(39	)
Income before income tax (expense) benefit		1,464			2,224			2,170
Income tax (expense) benefit		(402	)		(581	)		58
Net income		1,062			1,643			2,228
Less: Net income attributable to noncontrolling interests		(63	)		(48	)		(41	)
Net income attributable to Fox Corporation stockholders	$	999		$	1,595		$	2,187

Revenues by Segment by Component

	For the years ended June 30,
	2020		2019		2018
	(in millions)
Cable Network Programming
Affiliate fee	$	3,870	$	3,804	$	3,541
Advertising		1,164		1,184		1,120
Other		458		393		388
Total Cable Network Programming revenues		5,492		5,381		5,049
Television
Advertising		4,169		3,872		3,478
Affiliate fee		2,038		1,708		1,382
Other		454		399		246
Total Television revenues		6,661		5,979		5,106
Other, Corporate and Eliminations		150		29		(2	)
Total revenues	$	12,303	$	11,389	$	10,153

For fiscal 2020, the Company had no individual customers that accounted for 10% or more of Revenues. For fiscal 2019 and 2018, the Company had one customer that represented approximately 11% and 10% of Revenues, respectively.

Future Performance Obligations

As of June 30, 2020, approximately $5.2 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 years ended June 30,
	2020		2019		2018
	(in millions)
Depreciation and amortization
Cable Network Programming	$	59	$	48	$	38
Television		73		96		112
Other, Corporate and Eliminations		126		68		21
Total depreciation and amortization	$	258	$	212	$	171

	For the years ended June 30,
	2020		2019		2018
	(in millions)
Capital expenditures
Cable Network Programming	$	43	$	83	$	64
Television		72		71		89
Other, Corporate and Eliminations		244		81		62
Total capital expenditures	$	359	$	235	$	215

	As of June 30,
	2020		2019
	(in millions)
Assets
Cable Network Programming	$	2,591	$	2,584
Television		7,054		6,598
Other, Corporate and Eliminations		11,487		9,462
Investments		618		865
Total assets	$	21,750	$	19,509

	As of June 30,
	2020		2019
	(in millions)
Goodwill and intangible assets, net
Cable Network Programming	$	1,287	$	1,246
Television		4,630		3,891
Other, Corporate and Eliminations		690		405
Total goodwill and intangible assets, net	$	6,607	$	5,542