10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)

☒ Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended September 30, 2020

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)	(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  ☒    No  ☐

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  ☒     No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐

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.  ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).     Yes  ☐     No  ☒

As of October 30, 2020, 337,543,344 shares of Class A Common Stock, par value $0.01 per share, and 257,829,747 shares of Class B Common Stock, par value $0.01 per share, were outstanding.

FOX CORPORATION

FORM 10-Q

TABLE OF CONTENTS

			Page
Part I. Financial Information
	Item 1.	Financial Statements
		Unaudited Consolidated Statements of Operations for the three months ended September 30, 2020 and 2019	1
		Unaudited Consolidated Statements of Comprehensive Income for the three months ended September 30, 2020 and 2019	2
		Consolidated Balance Sheets as of September 30, 2020 (unaudited) and June 30, 2020 (audited)	3
		Unaudited Consolidated Statements of Cash Flows for the three months ended September 30, 2020 and 2019	4
		Unaudited Consolidated Statements of Equity for the three months ended September 30, 2020 and 2019	5
		Notes to the Unaudited Consolidated Financial Statements	6
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	29
	Item 4.	Controls and Procedures	29
Part II. Other Information
	Item 1.	Legal Proceedings	30
	Item 1A.	Risk Factors	30
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	30
	Item 3.	Defaults Upon Senior Securities	31
	Item 4.	Mine Safety Disclosures	31
	Item 5.	Other Information	31
	Item 6.	Exhibits	32
	Signature		33

FOX CORPORATION

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)

	For the three months ended September 30,
	2020			2019
Revenues	$	2,717		$	2,667
Operating expenses		(1,168	)		(1,468	)
Selling, general and administrative		(388	)		(352	)
Depreciation and amortization		(68	)		(50	)
Impairment and restructuring charges		(35	)		(9	)
Interest expense		(99	)		(90	)
Interest income		1			17
Other, net		519			(15	)
Income before income tax expense		1,479			700
Income tax expense		(362	)		(187	)
Net income		1,117			513
Less: Net income attributable to noncontrolling interests		(11	)		(14	)
Net income attributable to Fox Corporation stockholders	$	1,106		$	499
EARNINGS PER SHARE DATA
Weighted average shares
Basic		603			622
Diluted		605			624
Net income attributable to Fox Corporation stockholders per share - basic and diluted	$	1.83		$	0.80

The accompanying notes are an integral part of these Unaudited Consolidated Financial Statements.

1

FOX CORPORATION

UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(IN MILLIONS)

	For the three months ended September 30,
	2020			2019
Net income	$	1,117		$	513
Other comprehensive income, net of tax
Benefit plan adjustments		9			4
Other comprehensive income, net of tax		9			4
Comprehensive income		1,126			517
Less: Net income attributable to noncontrolling interests(a)		(11	)		(14	)
Comprehensive income attributable to Fox Corporation stockholders	$	1,115		$	503

^(a) Net income attributable to noncontrolling interests includes $4 million and $9 million for the three months ended September 30, 2020 and 2019, 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 September 30, 2020			As of June 30, 2020
	(unaudited)			(audited)
ASSETS
Current assets
Cash and cash equivalents	$	5,061		$	4,645
Receivables, net		1,997			1,888
Inventories, net		1,271			856
Other		134			97
Total current assets		8,463			7,486
Non-current assets
Property, plant and equipment, net		1,539			1,498
Intangible assets, net		3,183			3,198
Goodwill		3,409			3,409
Deferred tax assets		3,963			4,358
Other non-current assets		1,940			1,801
Total assets	$	22,497		$	21,750
LIABILITIES AND EQUITY
Current liabilities
Accounts payable, accrued expenses and other current liabilities	$	2,012		$	1,906
Non-current liabilities
Borrowings		7,947			7,946
Other liabilities		1,422			1,482
Redeemable noncontrolling interests		310			305
Commitments and contingencies
Equity
Class A common stock(a)		3			3
Class B common stock(b)		3			3
Additional paid-in capital		9,668			9,831
Retained earnings		1,525			674
Accumulated other comprehensive loss		(408	)		(417	)
Total Fox Corporation stockholders' equity		10,791			10,094
Noncontrolling interests		15			17
Total equity		10,806			10,111
Total liabilities and equity	$	22,497		$	21,750

^(a) Class A common stock, $0.01 par value per share, 2,000,000,000 shares authorized, 338,409,167 shares and 343,608,673 shares issued and outstanding at par as of September 30, 2020 and June 30, 2020, respectively.

^(b) Class B common stock, $0.01 par value per share, 1,000,000,000 shares authorized, 258,239,386 shares and 261,078,355 shares issued and outstanding at par as of September 30, 2020 and June 30, 2020, 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 three months ended September 30,
	2020			2019
OPERATING ACTIVITIES
Net income	$	1,117		$	513
Adjustments to reconcile net income to cash provided by operating activities
Depreciation and amortization		68			50
Amortization of cable distribution investments		5			9
Impairment and restructuring charges		35			9
Equity-based compensation		31			27
Other, net		(519	)		15
Deferred income taxes		391			165
Change in operating assets and liabilities, net of acquisitions and dispositions
Receivables and other assets		(193	)		(110	)
Inventories net of program rights payable		(440	)		(358	)
Accounts payable and accrued expenses		(62	)		(113	)
Other changes, net		(166	)		(5	)
Net cash provided by operating activities		267			202
INVESTING ACTIVITIES
Property, plant and equipment		(117	)		(39	)
Purchase of investments		(31	)		-
Other investing activities, net		(1	)		(1	)
Net cash used in investing activities		(149	)		(40	)
FINANCING ACTIVITIES
Repurchase of shares		(267	)		-
Non-operating cash flows from (to) The Walt Disney Company		152			(41	)
Settlement of Divestiture Tax prepayment		462			-
Dividends paid and distributions		(15	)		(14	)
Other financing activities, net		(34	)		(1	)
Net cash provided by (used in) financing activities		298			(56	)
Net increase in cash and cash equivalents		416			106
Cash and cash equivalents, beginning of year		4,645			3,234
Cash and cash equivalents, end of period	$	5,061		$	3,340

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						Accumulated Other			Total Fox Corporation
	Common Stock					Common Stock					Paid-in			Retained			Comprehensive			Stockholders'			Noncontrolling			Total
	Shares			Amount		Shares			Amount		Capital			Earnings			Loss			Equity			Interests(a)			Equity
Balance, June 30, 2020		344		$	3		261		$	3	$	9,831		$	674		$	(417	)	$	10,094		$	17		$	10,111
Net income		-			-		-			-		-			1,106			-			1,106			7			1,113
Other comprehensive income		-			-		-			-		-			-			9			9			-			9
Dividends declared		-			-		-			-		-			(138	)		-			(138	)		-			(138	)
Shares repurchased		(7	)		-		(3	)		-		(161	)		(109	)		-			(270	)		-			(270	)
Other		1			-		-			-		(2	)		(8	)		-			(10	)		(9	)		(19	)
Balance, September 30, 2020		338		$	3		258		$	3	$	9,668		$	1,525		$	(408	)	$	10,791		$	15		$	10,806
Balance, June 30, 2019		354		$	4		266		$	3	$	9,891		$	357		$	(308	)	$	9,947		$	11		$	9,958
Net income		-			-		-			-		-			499			-			499			5			504
Other comprehensive income		-			-		-			-		-			-			4			4			-			4
Dividends declared		-			-		-			-		-			(143	)		-			(143	)		-			(143	)
Other		-			-		-			-		30			(17	)		-			13			(6	)		7
Balance, September 30, 2019		354		$	4		266		$	3	$	9,921		$	696		$	(304	)	$	10,320		$	10		$	10,330

^(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.

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, 2021, due to, among other things, the impact of coronavirus disease 2019 (“COVID-19”) on the Company’s business.

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.

The outbreak of the COVID-19 pandemic has resulted in widespread and continuing negative impacts on the macroeconomic environment and disruption to the Company’s business. Weak economic conditions and increased volatility and disruption in the financial markets pose risks to the Company and its business partners, including advertisers whose expenditures tend to reflect overall economic conditions. The COVID-19 pandemic has caused some of the Company’s advertisers to reduce their spending, and future declines in the economic prospects of advertisers or the economy in general could negatively impact their advertising expenditures further. Depending on the duration and severity of the recession, it could lead to changes in consumer behavior, including increasing numbers of consumers canceling or foregoing subscriptions to multi-channel video programming distributor (“MVPD”) services, that adversely affect the Company’s affiliate fee and advertising revenues. In addition, the Company’s business depends on the volume and popularity of the content it distributes, particularly sports content. Following the COVID-19 outbreak, sports events to which the Company has broadcast rights have been cancelled or postponed and the production of certain entertainment content the Company distributes has been suspended. Although some of these sports events and productions have resumed, there may be additional content disruptions in the future. Depending on their duration and severity, these disruptions could materially adversely affect the Company’s future advertising revenues and, over a longer period, its future affiliate fee revenues. To the extent the pandemic further negatively impacts the Company’s ability to air sports events, particularly National Football League (“NFL”) and college sports, it could result in a significantly greater adverse effect on the Company’s business, financial condition or results of operations than the Company has experienced thus far. In addition, shifting sports schedules may negatively impact the Company’s ability to attract viewers and advertisers to its sports and entertainment programming.

The Company assessed certain accounting matters that generally require consideration of forecasted financial information in context with the information reasonably available to the Company and the best estimates of the future impacts of COVID-19 as of September 30, 2020. The accounting matters assessed included, but were not limited to, the Company’s valuation allowances, programming rights and the carrying value of the goodwill and other long-lived assets. While there was not an impact to the Company’s consolidated financial statements as of September 30, 2020, the Company’s future assessment of the magnitude and duration of COVID-19, as well as other factors, could result in material impacts to the Company’s consolidated financial statements in future reporting periods.

These interim Unaudited Consolidated Financial Statements and notes thereto should be read in conjunction with the audited consolidated and combined financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2020 as filed with the Securities and Exchange Commission on August 10, 2020 (the “2020 Form 10-K”).

6

FOX CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

The Unaudited Consolidated Financial Statements include the accounts of FOX. 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%. In accordance with Accounting Standards Codification (“ASC”) 321 “Investments—Equity Securities” (“ASC 321”), 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 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.

Pursuant to the merger agreement relating to the merger of Twenty-First Century Fox, Inc. (“21CF”) and The Walt Disney Company (“Disney”), the Company made a prepayment of approximately $700 million which represented the Company’s share of the estimated tax liabilities resulting from the anticipated divestitures by Disney of certain assets (the “Divestiture Tax”), principally the FOX Sports Regional Sports Networks (“RSNs”). As of September 30, 2020, Disney had sold the RSNs, the Company and Disney reached an agreement to settle the majority of the prepaid Divestiture Tax and the Company received $462 million from Disney as reimbursement of the Company’s prepayment based upon the sales price of the RSNs. This reimbursement was recorded in Other, net in the Statement of Operations (See Note 11—Additional Financial Information under the heading “Other, net”). The balance of the prepaid Divestiture Tax is subject to adjustment in the future, but any such adjustment is not expected to have a material impact on the results of the Company.

The Company’s fiscal year ends on June 30 of each year. Certain fiscal 2020 amounts have been reclassified to conform to the fiscal 2021 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 and Recently Issued Accounting Guidance

Adopted

In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”), as amended. On July 1, 2020, the Company adopted ASU 2016-13 on a modified retrospective basis. The amendments in ASU 2016-13 require, among other things, financial assets measured at amortized cost basis to be presented at the net amount expected to be collected as compared to previous GAAP which delayed recognition until it was probable a loss had been incurred. The adoption of ASU 2016-13 did not have a material impact on the Company’s Financial Statements.

In August 2018, the FASB issued ASU 2018-15, “Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract” (“ASU 2018-15”). On July 1, 2020, the Company adopted ASU 2018-15 on a prospective basis. The amendments in ASU 2018-15 require implementation costs incurred in a hosting arrangement that is a service contract to be capitalized using the same guidance for capitalizing implementation costs incurred to develop or obtain internal-use software. In addition, ASU 2018-15 provides guidance regarding the term over which capitalized implementation costs are to be amortized and requires specific financial statement presentation and disclosures. The adoption of ASU 2018-15 did not have a material impact on the Company’s Financial Statements.

In March 2019, the FASB issued ASU 2019-02, “Entertainment—Films—Other Assets—Film Costs (Subtopic 926-20) and Entertainment—Broadcasters—Intangibles—Goodwill and Other (Subtopic 920-350): Improvements to Accounting for Costs of Films and License Agreements for Program Materials” (“ASU 2019-02”). On July 1, 2020, the Company adopted ASU 2019-02 on a prospective basis and reclassified entertainment programming rights, with a contract duration of longer than a year, that were previously classified as the current portion of inventories, net to non-current inventories, net on the Balance Sheet. The amendments in ASU 2019-02 align the accounting treatment for production costs of episodic television series with the accounting treatment for production costs of films. In addition,

7

FOX CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

ASU 2019-02 modifies certain aspects of the amortization, impairment, presentation and disclosure requirements in ASC 926-20 and the impairment, presentation and disclosure requirements in ASC 920-350, including eliminating the balance sheet classification guidance. The adoption of ASU 2019-02 did not have a significant impact on the Company’s Financial Statements (See Note 3—Inventories, net for additional information).

NOTE 2. ACQUISITIONS, DISPOSALS AND OTHER TRANSACTIONS

The Company’s acquisitions support the Company’s strategy to strengthen its core brands and leverage its sports broadcasting rights and expand their reach beyond their traditional linear businesses. For the acquisitions in Note 3—Acquisitions, Disposals and Other Transactions in the 2020 Form 10-K under the heading “Acquisitions and Disposals,” the accounting for each business combination, including consideration transferred, is based on provisional amounts and the allocation of the consideration transferred is not final. The amounts allocated to intangibles and goodwill, the estimates of useful lives and the related amortization expense are subject to changes pending the completion of the final valuations of certain assets and liabilities. A change in the allocation of consideration transferred and any estimates of useful lives could result in a change in the value allocated to the intangible assets that could impact future amortization expense.

NOTE 3. INVENTORIES, NET

In accordance with ASC 920, “Entertainment—Broadcasters” (“ASC 920”), costs incurred in acquiring program rights or producing programs for the Cable Network Programming and Television segments, including advances, are capitalized and amortized over the license period or projected useful life of the programming. Program rights and the related liabilities are recorded at the gross amount of the liabilities when the license period has begun, the cost of the program is determinable and the program is accepted and available for airing. Effective for the Company beginning on July 1, 2020, ASC 920 permits program rights to be recorded in non-current inventories, net rather than segregated between current and non-current inventories, net. As a result, the Company reclassified entertainment programming rights, with a contract duration of longer than a year, that were previously classified as the current portion of inventories, net to non-current inventories, net on the Balance Sheet. Advances on sports events expected to be broadcast within one year and programs with an initial license period of one year or less continue to be recorded in the current portion of inventories, net. Television broadcast network entertainment programming, which includes acquired series, co-produced series, movies and other programs, are amortized primarily on an accelerated basis.

The Company has single and multi-year contracts for broadcast rights of programs and sports events. The Company evaluates the recoverability of the unamortized costs associated therewith, using total estimated advertising and other revenues attributable to the program material and considering the Company’s expectations of the usefulness of the program rights. The recoverability of entertainment programming is generally assessed on a contract basis and the recoverability of certain sports rights contracts for content broadcast on the FOX Network and the sports channels is assessed on an aggregate basis. Where an evaluation indicates that these multi-year contracts will result in an asset that is not recoverable, amortization of rights is accelerated in an amount equal to the amount by which the unamortized costs exceed fair value. The costs of multi-year sports contracts at the FOX Network and the sports channels are primarily amortized based on the ratio of each current period’s attributable revenue for each contract to the estimated total remaining attributable revenue for each contract. Estimates can change and, accordingly, are reviewed periodically and amortization is adjusted as necessary. Such changes in the future could be material.

The Company’s inventories were comprised of the following:

	As of September 30, 2020			As of June 30, 2020
	(in millions)
Sports programming rights	$	1,098		$	674
Entertainment programming rights		428			384
Total inventories, net		1,526			1,058
Less: current portion of inventories, net		(1,271	)		(856	)
Total non-current inventories, net	$	255		$	202

8

FOX CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

For the three months ended September 30, 2020, the aggregate amortization expense related to the programming rights was approximately $670 million, which is included in Operating expenses in the Statement of Operations.

NOTE 4. FAIR VALUE

In accordance with ASC 820, “Fair Value Measurement,” 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 liabilities carried at fair value on a recurring basis:

	Fair value measurements
	As of September 30, 2020
	Total			Level 1			Level 2		Level 3
	(in millions)
Assets
Investments in equity securities	$	640		$	640	(a)	$	-	$	-
Liabilities
Other		(4	)		-			-		(4)	(b)
Redeemable noncontrolling interests		(310	)		-			-		(310)	(b)
Total	$	326		$	640		$	-	$	(314)

	Fair value measurements
	As of June 30, 2020
	Total			Level 1			Level 2		Level 3
	(in millions)
Assets
Investments in equity securities	$	531		$	531	(a)	$	-	$	-
Liabilities
Other		(6	)		-			-		(6)	(b)
Redeemable noncontrolling interests		(305	)		-			-		(305)	(b)
Total	$	220		$	531		$	-	$	(311)

^(a) The investment categorized as Level 1 represents 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 2020 Form 10-K under the heading “Flutter” for further discussion).

^(b) The Company utilizes the market approach valuation technique 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 liability. Examples of utilized unobservable inputs are future cash flows and long-term growth rates.

Redeemable Noncontrolling Interests

The Company accounts for redeemable noncontrolling interests in accordance with ASC 480-10-S99-3A, “Distinguishing Liabilities from Equity,” because their exercise is outside the control of the Company. The redeemable noncontrolling interests recorded are put rights held by minority shareholders in a majority-owned sports network and in Credible Labs Inc. (“Credible”).

9

FOX CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

The changes in redeemable noncontrolling interests classified as Level 3 measurements were as follows:

	For the three months ended September 30,
	2020			2019
	(in millions)
Beginning of period	$	(305	)	$	(189	)
Net income		(4	)		(9	)
Distributions		6			8
Accretion		(7	)		(17	)
End of period	$	(310	)	$	(207	)

As of September 30, 2020, a portion of the sports network minority shareholder’s put right was exercisable. In October 2020, the sports network minority shareholder exercised its put right to sell this portion of its interest to the Company for approximately $135 million. The final put right held by the sports network minority shareholder will become exercisable in July 2021. The put right held by the Credible minority shareholder will become exercisable in fiscal 2025.

Financial Instruments

The carrying value of the Company’s financial instruments, such as cash and cash equivalents, receivables, payables and investments accounted for using the measurement alternative in accordance with ASC 321, approximates fair value.

	As of September 30, 2020		As of June 30, 2020
	(in millions)
Borrowings
Fair value	$	9,709	$	9,746
Carrying value	$	7,947	$	7,946

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 be redeemed upon demand and are maintained with financial institutions of reputable credit and, therefore, bear minimal credit risk.

The Company’s receivables did not represent significant concentrations of credit risk as of September 30, 2020 or June 30, 2020. Generally, the Company does not require collateral to secure receivables. As of September 30, 2020 and June 30, 2020, the Company had no individual customers that accounted for 10% or more of the Company’s receivables.

NOTE 5. BORROWINGS

Senior Notes Issued

Borrowings include senior notes (See Note 9—Borrowings in the 2020 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 2020 Form 10-K under the heading “Revolving Credit Agreement”). As of September 30, 2020, there were no borrowings outstanding under the revolving credit agreement.

10

FOX CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 6. STOCKHOLDERS’ EQUITY

Stock Repurchase Program

In fiscal 2020, the Company’s Board of Directors (the “Board”) authorized a stock repurchase program providing for the repurchase of $2 billion of the Company’s 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”). The program has no time limit and may be modified, suspended or discontinued at any time. In August 2020, the Company entered into two accelerated share repurchase (“ASR”) agreements to repurchase $154 million of Class A Common Stock and $66 million of Class B Common Stock.

In accordance with the ASR agreements, in August 2020, the Company paid a third-party financial institution $154 million and $66 million and received initial deliveries of approximately 4.7 million and 2.0 million shares of Class A Common Stock and Class B Common Stock, respectively, representing 80% of the shares expected to be repurchased under each ASR agreement, at a price of $26.00 and $26.01 per share, which was The Nasdaq Global Select Market closing share price of the Class A Common Stock and Class B Common Stock, respectively, on August 21, 2020. Upon settlement of the ASR agreements in September 2020, the Company received final deliveries of approximately 0.9 million and 0.4 million shares of Class A Common Stock and Class B Common Stock, respectively. The final number of shares purchased under the ASR agreements was determined using a price of $27.57 and $27.67 per share (the volume-weighted average market price of the Class A Common Stock and Class B Common Stock, respectively, during the terms of the ASR agreements less a discount applicable for the Class A Common Stock). The Company accounted for each ASR agreement as two separate transactions. The initial deliveries of Class A Common Stock and Class B Common Stock were accounted for as treasury stock transactions recorded on the acquisition date. The final settlements of Class A Common Stock and Class B Common Stock were accounted for as forward contracts indexed to the Class A Common Stock or Class B Common Stock, as applicable, and qualified as equity transactions.

In addition to the shares purchased under the ASR agreements, the Company repurchased shares of Class A Common Stock and Class B Common Stock in the open market. In total, the Company repurchased approximately 10 million shares of Common Stock for $270 million during the three months ended September 30, 2020.

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 September 30, 2020, the Company’s remaining stock repurchase authorization was approximately $1.1 billion. Subsequent to September 30, 2020, the Company repurchased a total of approximately 1.3 million shares of Common Stock for approximately $35 million in the open market.

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 September 30,
	2020		2019
Cash dividend per share	$	0.23	$	0.23

The Company declared a semi-annual dividend of $0.23 per share on both the Class A Common Stock and the Class B Common Stock during the three months ended September 30, 2020, which was paid in October 2020 to stockholders of record on September 2, 2020.

11

FOX CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 7. EQUITY-BASED COMPENSATION

As of September 30, 2020, the Company has one equity plan, the Fox Corporation 2019 Shareholder Alignment Plan (the “SAP”) (See Note 12—Equity-Based Compensation in the 2020 Form 10-K).

The following table summarizes the Company’s equity-based compensation:

	For the three months ended September 30,
	2020		2019
	(in millions)
Equity-based compensation	$	31	$	32
Intrinsic value of all settled equity-based awards	$	81	$	3
Tax benefit on settled equity-based awards	$	14	$	-

The Company’s stock based awards are settled in Class A Common Stock. As of September 30, 2020, the Company’s total estimated compensation cost, not yet recognized, related to non-vested equity awards held by the Company’s employees was approximately $190 million and is expected to be recognized over a weighted average period between one and two years.

As of September 30, 2020 and 2019, the Company had approximately 7 million and 4 million stock options outstanding, respectively. For the three months ended September 30, 2020 and 2019, the computation of diluted earnings per share did not include most of the stock options outstanding during these periods, because their inclusion would have been antidilutive.

Awards Granted and Vested

Restricted Stock Units

During the three months ended September 30, 2020, approximately 1.9 million restricted stock units (“RSUs”) were granted, which vest in equal annual installments over a three-year period subject to the participants’ continued employment with the Company, and 3.1 million RSUs vested.

Performance-Based Stock Options

Performance-based stock options (“PSOs”) are awards that entitle the holder to purchase a specified number of shares of Class A Common Stock at a specified price for a specified period of time, contingent on the performance of the Class A Common Stock over a three-year period, subject to the terms and conditions of the SAP, the applicable award documents and such other terms and conditions as the Compensation Committee of the Board may establish. The PSOs granted under the SAP will vest in full only if the Company’s Class A Common Stock exceeds the exercise price of the PSO by a certain threshold over a certain period of time during the performance period (the “market condition”). The PSOs were fair valued using a Monte Carlo simulation model that uses the following assumptions: (i) expected volatility; (ii) expected term; (iii) risk-free interest rate; and (iv) expected dividend yield. Compensation cost related to the PSO will be recognized even if the market condition is not met.

During the three months ended September 30, 2020, the Company granted approximately 5.0 million PSOs, 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 September 30, 2020 have not changed significantly from disclosures included in the 2020 Form 10-K.

12

FOX CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

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 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 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 2020 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 $60 million and $65 million as of September 30, 2020 and June 30, 2020, respectively.

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 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 21CF, the Company (prior to the Distribution (as defined in Note 1—Description of Business and Basis of Presentation in the 2020 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 requires 21CF and/or Disney 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 $17 million and $14 million for the three months ended September 30, 2020 and 2019, respectively.

13

FOX CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

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 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, Inc., a free advertising-supported video-on-demand (“AVOD”) 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. 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.

14

FOX CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

The following tables set forth the Company’s Revenues and Segment EBITDA for the three months ended September 30, 2020 and 2019:

	For the three months ended September 30,
	2020			2019
	(in millions)
Revenues
Cable Network Programming	$	1,325		$	1,285
Television		1,350			1,356
Other, Corporate and Eliminations		42			26
Total revenues	$	2,717		$	2,667
Segment EBITDA
Cable Network Programming	$	781		$	684
Television		457			251
Other, Corporate and Eliminations		(72	)		(79	)
Amortization of cable distribution investments		(5	)		(9	)
Depreciation and amortization		(68	)		(50	)
Impairment and restructuring charges		(35	)		(9	)
Interest expense		(99	)		(90	)
Interest income		1			17
Other, net		519			(15	)
Income before income tax expense		1,479			700
Income tax expense		(362	)		(187	)
Net income		1,117			513
Less: Net income attributable to noncontrolling interests		(11	)		(14	)
Net income attributable to Fox Corporation stockholders	$	1,106		$	499

Revenues by Segment by Component

	For the three months ended September 30,
	2020		2019
	(in millions)
Cable Network Programming
Affiliate fee	$	973	$	939
Advertising		299		254
Other		53		92
Total Cable Network Programming revenues		1,325		1,285
Television
Advertising		670		787
Affiliate fee		560		455
Other		120		114
Total Television revenues		1,350		1,356
Other, Corporate and Eliminations		42		26
Total revenues	$	2,717	$	2,667

Future Performance Obligations

As of September 30, 2020, approximately $5.1 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

15

FOX CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

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 September 30,
	2020		2019
	(in millions)
Depreciation and amortization
Cable Network Programming	$	13	$	13
Television		25		15
Other, Corporate and Eliminations		30		22
Total depreciation and amortization	$	68	$	50

	As of September 30, 2020		As of June 30, 2020
	(in millions)
Assets
Cable Network Programming	$	2,622	$	2,591
Television		7,703		7,054
Other, Corporate and Eliminations		11,417		11,487
Investments		755		618
Total assets	$	22,497	$	21,750

NOTE 11. ADDITIONAL FINANCIAL INFORMATION

Impairment and Restructuring Charges

Impairment and restructuring charges were $35 million and $9 million for the three months ended September 30, 2020 and 2019, respectively. The impairment and restructuring charges for the three months ended September 30, 2020 and 2019 were primarily comprised of severance costs principally at the Cable Network Programming segment.

Other, net

The following table sets forth the components of Other, net included in the Statements of Operations:

	For the three months ended September 30,
	2020			2019
	(in millions)
Transaction costs(a)	$	451		$	(45	)
Net gains on investments in equity securities(b)		121			49
Other		(53	)		(19	)
Total other, net	$	519		$	(15	)

^(a) The transaction costs for the three months ended September 30, 2020 are primarily related to the partial settlement from Disney of $462 million related to the reimbursement of the Company’s prepayment of its share of the Divestiture Tax (See Note 1—Description of Business and Basis of Presentation). The transaction costs for the three months ended September 30, 2019 are primarily related to costs associated with the profits participants litigation (See Note 14—Commitments and Contingencies in the 2020 Form 10-K under the heading “Profits Participants Litigation”) and the Separation and the Distribution (See Note 1—Description of Business and Basis of Presentation in the 2020 Form 10-K under the heading “The Distribution”) and included retention related costs.

^(b) Net gains on investments in equity securities for the three months ended September 30, 2020 included the gain related to the change in fair value of the Company’s investment in Flutter (See Note 4—Fair Value) and for the three months ended September 30, 2019 included the gains related to the changes in fair value of the Company’s investments in Roku, Inc. and The Stars Group Inc. (See Note 6—Fair Value in the 2020 Form 10-K).

16

FOX CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Other Non-Current Assets

The following table sets forth the components of Other non-current assets included in the Balance Sheets:

	As of September 30, 2020		As of June 30, 2020
	(in millions)
Investments(a)	$	755	$	618
Operating lease ROU assets		505		539
Grantor Trust		260		247
Inventories, net		255		202
Other		165		195
Total other non-current assets	$	1,940	$	1,801

^(a) Included investments accounted for at fair value on a recurring basis of $640 million and $531 million as of September 30, 2020 and June 30, 2020, respectively (See Note 4—Fair Value).

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 September 30, 2020		As of June 30, 2020
	(in millions)
Accrued expenses	$	871	$	907
Program rights payable		524		485
Deferred revenue		242		152
Operating lease liabilities		104		122
Other current liabilities		271		240
Total accounts payable, accrued expenses and other current liabilities	$	2,012	$	1,906

Other Liabilities

The following table sets forth the components of Other liabilities included in the Balance Sheets:

	As of September 30, 2020		As of June 30, 2020
	(in millions)
Accrued non-current pension/postretirement liabilities	$	710	$	709
Non-current operating lease liabilities		432		452
Other non-current liabilities		280		321
Total other liabilities	$	1,422	$	1,482

Supplemental Cash Flows Information

	For the three months ended September 30,
	2020			2019
	(in millions)
Cash paid for interest	$	(169	)	$	(171	)
Cash paid for income taxes	$	(86	)	$	(6	)

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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, 2020 as filed with the SEC on August 10, 2020 (the “2020 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 months ended September 30, 2020 and 2019 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 months ended September 30, 2020 and 2019. 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 Resources—This section provides an analysis of the Company’s cash flows for the three months ended September 30, 2020 and 2019, as well as a discussion of the Company’s outstanding debt and commitments, both firm and contingent, that existed as of September 30, 2020. 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 2020 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 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, Inc. (“Tubi”), a free advertising-supported video-on-demand (“AVOD”) service.

• 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.

18

Other Business Developments

The outbreak of the coronavirus disease 2019 (“COVID-19”) pandemic has resulted in widespread and continuing negative impacts on the macroeconomic environment and disruption to the Company’s business. Weak economic conditions and increased volatility and disruption in the financial markets pose risks to the Company and its business partners, including advertisers whose expenditures tend to reflect overall economic conditions. The COVID-19 pandemic has caused some of the Company’s advertisers to reduce their spending, and future declines in the economic prospects of advertisers or the economy in general could negatively impact their advertising expenditures further. Depending on the duration and severity of the recession, it could lead to changes in consumer behavior, including increasing numbers of consumers canceling or foregoing subscriptions to multi-channel video programming distributor (“MVPD”) services, that adversely affect the Company’s affiliate fee and advertising revenues. In addition, the Company’s business depends on the volume and popularity of the content it distributes, particularly sports content. Following the COVID-19 outbreak, sports events to which the Company has broadcast rights have been cancelled or postponed and the production of certain entertainment content the Company distributes has been suspended. Although some of these sports events and productions have resumed, there may be additional content disruptions in the future. Depending on their duration and severity, these disruptions could materially adversely affect the Company’s future advertising revenues and, over a longer period, its future affiliate fee revenues. To the extent the pandemic further negatively impacts the Company’s ability to air sports events, particularly National Football League (“NFL”) and college sports, it could result in a significantly greater adverse effect on the Company’s business, financial condition or results of operations than the Company has experienced thus far. In addition, shifting sports schedules may negatively impact the Company’s ability to attract viewers and advertisers to its sports and entertainment programming. The Company’s Television segment experienced a 15% decline in advertising revenue and to a lesser extent the Cable Network Programming segment in the quarter ended September 30, 2020. The Company estimates that the majority of these decreases are due to the ongoing impact of COVID-19, including sports events that have been cancelled or postponed and fewer hours of original scripted programming. As a result of the shifting schedules, the Company estimates that there was a corresponding decrease of approximately $280 million of sports and entertainment programming rights amortization and production costs in the quarter ended September 30, 2020. The Company believes that a majority of these costs will be recognized in fiscal 2021.

Pursuant to the merger agreement relating to the merger of Twenty-First Century Fox, Inc. (“21CF”) and The Walt Disney Company (“Disney”), the Company made a prepayment of approximately $700 million which represented the Company’s share of the estimated tax liabilities resulting from the anticipated divestitures by Disney of certain assets (the “Divestiture Tax”), principally the FOX Sports Regional Sports Networks (“RSNs”). As of September 30, 2020, Disney had sold the RSNs, the Company and Disney reached an agreement to settle the majority of the prepaid Divestiture Tax and the Company received $462 million from Disney as reimbursement of the Company’s prepayment based upon the sales price of the RSNs. This reimbursement was recorded in Other, net in the Statement of Operations. See Note 11—Additional Financial Information to the accompanying Financial Statements under the heading “Other, net.”

19

RESULTS OF OPERATIONS

Results of Operations—For the three months ended September 30, 2020 versus the three months ended September 30, 2019

The following table sets forth the Company’s operating results for the three months ended September 30, 2020, as compared to the three months ended September 30, 2019:

	For the three months ended September 30,
	2020			2019			Change			% Change
(in millions, except %)							Better/(Worse)
Revenues
Affiliate fee	$	1,533		$	1,394		$	139			10		%
Advertising		969			1,041			(72	)		(7	)	%
Other		215			232			(17	)		(7	)	%
Total revenues		2,717			2,667			50			2		%
Operating expenses		(1,168	)		(1,468	)		300			20		%
Selling, general and administrative		(388	)		(352	)		(36	)		(10	)	%
Depreciation and amortization		(68	)		(50	)		(18	)		(36	)	%
Impairment and restructuring charges		(35	)		(9	)		(26	)	**
Interest expense		(99	)		(90	)		(9	)		(10	)	%
Interest income		1			17			(16	)		(94	)	%
Other, net		519			(15	)		534		**
Income before income tax expense		1,479			700			779		**
Income tax expense		(362	)		(187	)		(175	)		(94	)	%
Net income		1,117			513			604		**
Less: Net income attributable to noncontrolling interests		(11	)		(14	)		3			21		%
Net income attributable to Fox Corporation stockholders	$	1,106		$	499		$	607		**

^** not meaningful

Overview—The Company’s revenues increased 2% for the three months ended September 30, 2020, as compared to the corresponding period of fiscal 2020, due to higher affiliate fee revenue, partially offset by lower advertising and other revenues. The increase in affiliate fee revenue was primarily attributable to higher average rates per subscriber across all networks, led by contractual rate increases from affiliate agreement renewals and on existing affiliate agreements. The decrease in advertising revenue was primarily due to fewer broadcasts of NFL programming and the postponement of college football games and certain original scripted programming at the FOX Network as a result of COVID-19, partially offset by higher political advertising revenue related to the 2020 presidential and congressional elections and the impact of the consolidation of Tubi. The decrease in other revenues was primarily due to lower sports sublicensing revenue related to college sports as a result of COVID-19, lower digital content licensing revenue at the FOX Network and the absence of revenues generated from Premier Boxing Champions (“PBC”) pay-per-view events at FS1, partially offset by the impact of the consolidation of Credible in fiscal 2020.

Operating expenses decreased 20% for the three months ended September 30, 2020, as compared to the corresponding period of fiscal 2020, primarily due to lower sports programming rights amortization and production costs, including the broadcast of fewer NFL and college football games, and lower entertainment programming rights amortization and advertising and promotion costs due to fewer hours of original scripted programming as a result of COVID-19, partially offset by the consolidation of Tubi in fiscal 2020.

Selling, general and administrative expenses increased 10% for the three months ended September 30, 2020, as compared to the corresponding period of fiscal 2020, primarily due to the impact of acquisitions that occurred in fiscal 2020 (the “Fiscal 2020 Acquisitions”) (See Note 3—Acquisitions, Disposals and Other Transactions in the 2020 Form 10-K under the heading “Acquisitions and Disposals” for additional information).

20

Depreciation and amortization—Depreciation and amortization expense increased 36% for the three months ended September 30, 2020, as compared to the corresponding period of fiscal 2020, primarily due to the Fiscal 2020 Acquisitions.

Impairment and restructuring charges—Impairment and restructuring charges increased $26 million for the three months ended September 30, 2020, as compared to the corresponding period of fiscal 2020, primarily due to higher severance costs principally at the Cable Network Programming segment (See Note 11—Additional Financial Information to the accompanying Financial Statements).

Interest expense—Interest expense increased 10% for the three months ended September 30, 2020, as compared to the corresponding period of fiscal 2020, primarily due to the issuance of $1.2 billion of senior notes in April 2020 (See Note 9—Borrowings in the 2020 Form 10-K under the heading “Public Debt – Senior Notes Issued” for additional information).

Interest income—Interest income decreased for the three months ended September 30, 2020, as compared to the corresponding period of fiscal 2020, primarily due to lower interest rates.

Other, net—See Note 11—Additional Financial Information to the accompanying Financial Statements under the heading “Other, net.”

Income tax expense—The Company’s tax provision and related effective tax rate of 24% for the three months ended September 30, 2020 was higher than the statutory rate of 21% primarily due to state taxes, partially offset by a benefit from the reduction of uncertain tax positions for state tax audits.

The Company’s tax provision and related effective tax rate of 27% for the three months ended September 30, 2019 was higher than the statutory rate of 21% primarily due to state taxes and other permanent items.

Net income—Net income increased $604 million for the three months ended September 30, 2020, as compared to the corresponding period of fiscal 2020, primarily due to the receipt of the $462 million reimbursement from Disney related to the Divestiture Tax (See Note 1—Description of Business and Basis of Presentation to the accompanying Financial Statements for additional information) and higher Segment EBITDA (as defined below) at the Television and Cable Network Programming segments, partially offset by higher Income tax expense.

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, 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.

21

The following tables set forth the Company’s Revenues and Segment EBITDA for the three months ended September 30, 2020, as compared to the three months ended September 30, 2019:

	For the three months ended September 30,
	2020		2019		Change			% Change
(in millions, except %)					Better/(Worse)
Revenues
Cable Network Programming	$	1,325	$	1,285	$	40			3	%
Television		1,350		1,356		(6	)		-	%
Other, Corporate and Eliminations		42		26		16			62	%
Total revenues	$	2,717	$	2,667	$	50			2	%

	For the three months ended September 30,
	2020			2019			Change		% Change
(in millions, except %)							Better/(Worse)
Segment EBITDA
Cable Network Programming	$	781		$	684		$	97		14	%
Television		457			251			206		82	%
Other, Corporate and Eliminations		(72	)		(79	)		7		9	%
Adjusted EBITDA(a)	$	1,166		$	856		$	310		36	%

^(a) For a discussion of Adjusted EBITDA and a reconciliation of Net income to Adjusted EBITDA, see “Non-GAAP Financial Measures” below.

Cable Network Programming (49% and 48% of the Company’s revenues for the first three months of fiscal 2021 and 2020, respectively)

	For the three months ended September 30,
	2020			2019			Change			% Change
(in millions, except %)							Better/(Worse)
Revenues
Affiliate fee	$	973		$	939		$	34			4		%
Advertising		299			254			45			18		%
Other		53			92			(39	)		(42	)	%
Total revenues		1,325			1,285			40			3		%
Operating expenses		(434	)		(520	)		86			17		%
Selling, general and administrative		(115	)		(90	)		(25	)		(28	)	%
Amortization of cable distribution investments		5			9			(4	)		(44	)	%
Segment EBITDA	$	781		$	684		$	97			14		%

Revenues at the Cable Network Programming segment increased 3% for the three months ended September 30, 2020, as compared to the corresponding period of fiscal 2020, due to higher affiliate fee and advertising revenues, partially offset by lower other revenues. The increase in affiliate fee revenue was primarily attributable to higher average rates per subscriber, led by contractual rate increases on existing affiliate agreements and from affiliate agreement renewals, partially offset by the impact of a lower average number of subscribers. The decrease in the average number of subscribers was due to a reduction in subscribers to traditional MVPDs, partially offset by an increase in digital MVPD subscribers. The increase in advertising revenue was primarily due to the 2020 presidential election which drove higher linear advertising revenue, including higher pricing and ratings, and digital advertising revenue at FOX News Media, partially offset by the broadcast of fewer live sports events, including college football, as a result of COVID-19. The decrease in other revenues was primarily attributable to lower sports sublicensing revenue and the absence of revenues generated from PBC pay-per-view events principally as a result of COVID-19, partially offset by higher revenues at FOX News Media.

Cable Network Programming Segment EBITDA increased 14% for the three months ended September 30, 2020, as compared to the corresponding period of fiscal 2020, due to the revenue increases noted above and lower expenses. Operating expenses decreased for the three months ended September 30, 2020 primarily due to lower sports programming rights amortization and production costs driven by the postponement of live sports events, partially offset by the shift of National Association of Stock Car Auto Racing (“NASCAR”) Cup Series races and Major League Baseball

22

(“MLB”) regular season games into the first quarter of fiscal 2021 as a result of COVID-19. Selling, general and administrative expenses increased for the three months ended September 30, 2020 principally due to higher legal and marketing expenses at FOX News Media.

Television (50% and 51% of the Company’s revenues for the first three months of fiscal 2021 and 2020, respectively)

	For the three months ended September 30,
	2020			2019			Change			% Change
(in millions, except %)							Better/(Worse)
Revenues
Advertising	$	670		$	787		$	(117	)		(15	)	%
Affiliate fee		560			455			105			23		%
Other		120			114			6			5		%
Total revenues		1,350			1,356			(6	)		-		%
Operating expenses		(714	)		(943	)		229			24		%
Selling, general and administrative		(179	)		(162	)		(17	)		(10	)	%
Segment EBITDA	$	457		$	251		$	206			82		%

Revenues at the Television segment for the three months ended September 30, 2020 remained consistent, as compared to the corresponding period of fiscal 2020, as higher affiliate fee and other revenues were offset by lower advertising revenue. The decrease in advertising revenue was primarily due to fewer broadcasts of NFL programming, the postponement of college football games and certain original scripted programming at the FOX Network as a result of COVID-19 and the absence of the prior year broadcast of the 71st Annual Primetime Emmy Awards. Partially offsetting the decrease in advertising revenue was higher political advertising revenue related to the 2020 presidential and congressional elections at the FOX Television Stations and the impact of the consolidation of Tubi. 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.

Television Segment EBITDA increased 82% for the three months ended September 30, 2020, as compared to the corresponding period of fiscal 2020, primarily due to lower expenses. Operating expenses decreased primarily due to lower sports programming rights amortization and production costs, including the broadcast of fewer NFL and college football games, and lower entertainment programming rights amortization and advertising and marketing costs due to fewer hours of original scripted programming as a result of COVID-19, partially offset by the impact of the consolidation of Tubi.

Other, Corporate and Eliminations (1% of the Company’s revenues for the first three months of fiscal 2021 and 2020)

	For the three months ended September 30,
	2020			2019			Change			% Change
(in millions, except %)							Better/(Worse)
Revenues	$	42		$	26		$	16			62	%
Operating expenses		(20	)		(5	)		(15	)	**
Selling, general and administrative		(94	)		(100	)		6			6	%
Segment EBITDA	$	(72	)	$	(79	)	$	7			9	%

^** not meaningful

Revenues at the Other, Corporate and Eliminations segment increased 62% for the three months ended September 30, 2020, as compared to the corresponding period of fiscal 2020, primarily due to the impact of the consolidation of Credible. Operating expenses increased principally due to the impact of the consolidation of Credible. Selling, general and administrative expenses decreased primarily due to lower employee costs and professional fees, partially offset by the impact of the consolidation of Credible.

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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, Interest income, 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 and the impact of COVID-19 and other widespread health emergencies or pandemics and measures to contain their spread).

Adjusted EBITDA is considered a non-GAAP financial measure and should be considered in addition to, not as a substitute for, net income, cash flow and other measures of financial performance reported in accordance with 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.

The following table reconciles Net income to Adjusted EBITDA for the three months ended September 30, 2020, as compared to the three months ended September 30, 2019:

	For the three months ended September 30,
	2020			2019
	(in millions)
Net income	$	1,117		$	513
Add
Amortization of cable distribution investments		5			9
Depreciation and amortization		68			50
Impairment and restructuring charges		35			9
Interest expense		99			90
Interest income		(1	)		(17	)
Other, net		(519	)		15
Income tax expense		362			187
Adjusted EBITDA	$	1,166		$	856

The following table sets forth the computation of Adjusted EBITDA for the three months ended September 30, 2020, as compared to the three months ended September 30, 2019:

	For the three months ended September 30,
	2020			2019
	(in millions)
Revenues	$	2,717		$	2,667
Operating expenses		(1,168	)		(1,468	)
Selling, general and administrative		(388	)		(352	)
Amortization of cable distribution investments		5			9
Adjusted EBITDA	$	1,166		$	856

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LIQUIDITY AND CAPITAL RESOURCES

Current Financial Condition

The Company’s principal source of liquidity is internally generated funds which are highly dependent upon the continuation of affiliate agreements and the state of the advertising markets, the latter of which is being negatively impacted by the weak economic environment as a result of COVID-19. Depending on the duration and severity of the recession, it could lead to changes in consumer behavior, including increasing numbers of consumers canceling or foregoing subscriptions to MVPD services, that adversely affect the Company’s affiliate fee and advertising revenues. In addition, the Company’s business depends on the volume and popularity of the content it distributes, particularly sports content. Following the COVID-19 outbreak, sports events to which the Company has broadcast rights were cancelled or postponed and the production of certain entertainment content the Company distributes was suspended. If the Company experiences a recurrence of these disruptions, depending on their duration and severity, they could materially adversely affect the Company’s future advertising revenues and, over a longer period of time, its future affiliate fee revenues. The magnitude of the impact of the COVID-19 pandemic on the Company is highly uncertain and subject to change and will depend on evolving factors beyond the Company’s control. These include the duration and extent of the pandemic, increases or spikes in the number of cases, or future mutations or related strains of the virus; the duration and extent of the recession, the pace of economic recovery and the economic and operating conditions facing the Company and others in the pandemic’s aftermath; the effect of governmental actions; and potential changes in consumer behavior. As part of actions the Company is taking to address COVID-19 and the resulting impact on its business, operations and employees, in April 2020, the Company implemented short-term cost reductions, including reducing executive compensation and suspending compensation increases. The Company has approximately $5.1 billion of cash and cash equivalents as of September 30, 2020 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 which could be impacted by COVID-19. As of September 30, 2020, 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 along with the continued investment in establishing the Company’s standalone broadcast technical facilities following the Distribution (as defined in Note 1—Description of Business and Basis of Presentation in the 2020 Form 10-K under the heading “The Distribution”); employee and facility costs; capital expenditures; acquisitions; interest and dividend payments; debt repayments; and stock repurchases.

In addition to the acquisitions, sales and possible acquisitions disclosed elsewhere, 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.

Sources and Uses of Cash

Net cash provided by operating activities for the three months ended September 30, 2020 and 2019 was as follows (in millions):

For the three months ended September 30,	2020		2019
Net cash provided by operating activities	$	267	$	202

The increase in net cash provided by operating activities during the three months ended September 30, 2020, as compared to the corresponding period of fiscal 2020, was primarily due to higher Segment EBITDA, partially offset by contractual increases for sports programming rights, higher inventory balances due to the postponement of certain sports events and higher tax payments.

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Net cash used in investing activities for the three months ended September 30, 2020 and 2019 was as follows (in millions):

For the three months ended September 30,	2020			2019
Net cash used in investing activities	$	(149	)	$	(40	)

The increase in net cash used in investing activities during the three months ended September 30, 2020, as compared to the corresponding period of fiscal 2020, was primarily due to payments related to investments in establishing the Company’s standalone broadcast technical facilities.

Net cash provided by (used in) financing activities for the three months ended September 30, 2020 and 2019 was as follows (in millions):

For the three months ended September 30,	2020		2019
Net cash provided by (used in) financing activities	$	298	$	(56	)

The change in net cash provided by (used in) financing activities during the three months ended September 30, 2020, as compared to the corresponding period of fiscal 2020, was primarily due to the receipt of the $462 million reimbursement from Disney related to the Divesture Tax, partially offset by activity under the stock repurchase program.

Stock Repurchase Program

See Note 6—Stockholders’ Equity to the accompanying Financial Statements under the heading “Stock Repurchase Program.”

Dividends

The Company declared a semi-annual dividend of $0.23 per share on both the Class A Common Stock and the Class B Common Stock during the three months ended September 30, 2020, which was paid in October 2020 to stockholders of record on September 2, 2020.

Debt Instruments

Borrowings include senior notes (See Note 9—Borrowings to the 2020 Form 10-K under the heading “Public Debt – Senior Notes Issued”).

Ratings of the senior notes

The following table summarizes the Company’s credit ratings as of September 30, 2020:

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 and Recently Issued Accounting Guidance.”

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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; and (v) 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:

• the impact of COVID-19 and other widespread health emergencies or pandemics and measures to contain their spread and related weak macroeconomic conditions and increased market volatility;

• the impact of COVID-19 specifically on the Company, including content disruptions that negatively affect the volume or popularity of the Company’s programming, particularly sports programming, and potential non-cash impairment charges resulting from significant declines in the Company’s estimated revenues or the expected popularity of the Company’s programming;

• 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 traditional MVPDs;

• declines in advertising expenditures due to various factors such as the economic prospects of advertisers or the economy in general, new technologies and distribution platforms and related changes in consumer behavior, and shifts in advertisers’ spending toward digital and mobile offerings and away from more traditional media;

• 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;

• further declines in the number of subscribers to traditional MVPD services;

• 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; 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;

• the failure to comply with laws, regulations, rules, industry standards or contractual obligations relating to privacy and personal data protection;

• 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 loss of key personnel;

• labor disputes, including labor disputes involving professional sports leagues whose games or events the Company has the right to broadcast;

27

• changes in tax, federal communications or other laws, regulations, practices or the interpretations thereof;

• 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;

• lower than expected valuations associated with one of the Company’s reporting units, indefinite-lived intangible assets, investments or long-lived assets;

• changes in GAAP or other applicable accounting standards and policies;

• the Company’s limited operating history as a standalone, publicly traded company and the risk that the Company is unable to make, on a timely or cost-effective basis, the changes necessary to operate effectively as a standalone, publicly traded company;

• increased costs in connection with the Company operating as a standalone, publicly traded company following the Distribution and the loss of synergies the Company enjoyed from operating as part of 21CF;

• the Company’s reliance on 21CF to provide the Company various services during transition periods under transition services agreements with 21CF, including broadcast operations, sports production, information systems and technology, and other services, and the risks that 21CF does not properly provide the services under these agreements or that the Company is unable to provide or obtain such services following the applicable transition period (or during such transition period, if 21CF does not properly provide them in a timely and cost effective manner);

• 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 2020 Form 10-K) and the indemnification arrangements entered into in connection with the Separation and the Distribution (as defined in Note 1—Description of Business and Basis of Presentation in the 2020 Form 10-K); and

• the other risks and uncertainties detailed in Part I., Item 1A. “Risk Factors” in the 2020 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.

28

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no material changes in the market risks reported in the 2020 Form 10-K.

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 first quarter of fiscal 2021 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting. Due to the COVID-19 pandemic, most of the Company’s employees continue to work remotely, and the Company has strived to minimize the impact of this on the design and effectiveness of the Company’s internal control over financial reporting. The Company is continually monitoring and assessing its internal control over financial reporting and has not experienced any material impact to its internal control over financial reporting due to the COVID-19 pandemic.

29

PART II

ITEM 1. LEGAL PROCEEDINGS

There have been no material changes to the Company’s legal proceedings described in the section titled “Legal Proceedings” in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2020 as filed with the Securities and Exchange Commission on August 10, 2020 (the “2020 Form 10-K”).

ITEM 1A. RISK FACTORS

There have been no material changes to the risk factors described in the section titled “Risk Factors” in the 2020 Form 10-K.

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 September 30, 2020:

	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)
July 1, 2020 – July 31, 2020
Class A common stock		-	$	-
Class B common stock		-		-
August 1, 2020 – August 31, 2020
Class A common stock(d)		5,821,538		27.23
Class B common stock(d)		2,322,772		27.44
September 1, 2020 – September 30, 2020
Class A common stock(d)		1,223,992		27.40
Class B common stock(d)		516,197		27.49
Total
Class A common stock(d)		7,045,530		27.26
Class B common stock(d)		2,838,969		27.45
		9,884,499			$	1,130

^(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) On November 6, 2019, the Company announced that its Board of Directors had authorized a stock repurchase program providing for the repurchase of $2 billion of the Company’s Common Stock. The program has no time limit and may be modified, suspended or discontinued at any time.

^(d) In connection with the stock repurchase program, the Company entered into two accelerated share repurchase (“ASR”) agreements to repurchase $154 million of Class A Common Stock and $66 million of Class B Common Stock in August 2020. In accordance with the ASR agreements, in August 2020, the Company paid a third-party financial institution $154 million and $66 million and received initial deliveries of approximately 4.7 million and 2.0 million shares of Class A Common Stock and Class B Common Stock, respectively, representing 80% of the shares expected to be repurchased under each ASR agreement, at a price of $26.00 and $26.01 per share, respectively. Upon settlement of the ASR agreements in September 2020, the Company received final deliveries of approximately 0.9 million and 0.4 million shares of Class A Common Stock and Class B Common Stock, respectively. The final number of shares purchased under the ASR agreements was determined using a price of $27.57 and $27.67 per share (the volume-weighted average market price of the Class A Common Stock and Class B Common Stock, respectively, during the terms of the ASR agreements less a discount applicable for the Class A Common Stock) (See Note 6—Stockholders’ Equity to the accompanying Unaudited Consolidated Financial Statements of FOX under the heading “Stock Repurchase Program” for more information).

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In total, the Company repurchased approximately 10 million shares of Common Stock for $270 million during the three months ended September 30, 2020.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

Not applicable

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable

ITEM 5. OTHER INFORMATION

Not applicable

31

ITEM 6. EXHIBITS

(a) Exhibits.

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.**
101	The following financial information from the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2020 formatted in Inline XBRL (eXtensible Business Reporting Language): (i) Unaudited Consolidated Statements of Operations for the three months ended September 30, 2020 and 2019; (ii) Unaudited Consolidated Statements of Comprehensive Income for the three months ended September 30, 2020 and 2019; (iii) Consolidated Balance Sheets as of September 30, 2020 (unaudited) and June 30, 2020 (audited); (iv) Unaudited Consolidated Statements of Cash Flows for the three months ended September 30, 2020 and 2019; (v) Unaudited Consolidated Statements of Equity for the three months ended September 30, 2020 and 2019; 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.

** 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: November 3, 2020

33

EX-31.1

Exhibit 31.1

Chief Executive Officer Certification

Required by Rules 13a-14 and 15d-14 under the Securities Exchange Act of 1934, as amended

I, Lachlan K. Murdoch, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Fox Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

November 3, 2020

By:	/s/ Lachlan K. Murdoch
	Lachlan K. Murdoch
	Chief Executive Officer

EX-31.2

Exhibit 31.2

Chief Financial Officer Certification

Required by Rules 13a-14 and 15d-14 under the Securities Exchange Act of 1934, as amended

I, Steven Tomsic, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Fox Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

November 3, 2020

By:	/s/ Steven Tomsic
	Steven Tomsic
	Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Fox Corporation on Form 10-Q for the fiscal quarter ended September 30, 2020, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), we, the undersigned officers of Fox Corporation, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that, to the best of our knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Fox Corporation.

November 3, 2020

By:	/s/ Lachlan K. Murdoch
	Lachlan K. Murdoch
	Chief Executive Officer
By:	/s/ Steven Tomsic
	Steven Tomsic
	Chief Financial Officer

XML

Document and Entity Information - shares	3 Months Ended
	Sep. 30, 2020	Oct. 30, 2020
Document And Entity Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2020
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q1
Entity Registrant Name	FOX CORPORATION
Entity Central Index Key	0001754301
Current Fiscal Year End Date	--06-30
Entity Filer Category	Large Accelerated Filer
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Shell Company	false
Entity Small Business	false
Entity Emerging Growth Company	false
Entity File Number	001-38776
Entity Tax Identification Number	83-1825597
Entity Address, Address Line One	1211 Avenue of the Americas
Entity Address, City or Town	New York
Entity Address, State or Province	NY
Entity Incorporation, State or Country Code	DE
Entity Address, Postal Zip Code	10036
City Area Code	212
Local Phone Number	852-7000
Document Quarterly Report	true
Document Transition Report	false
Class A Common Stock
Document And Entity Information [Line Items]
Title of 12(b) Security	Common Stock, par value $0.01 per share
Security Exchange Name	NASDAQ
Trading Symbol	FOXA
Entity Common Stock, Shares Outstanding		337,543,344
Class B Common Stock
Document And Entity Information [Line Items]
Title of 12(b) Security	Common Stock, par value $0.01 per share
Security Exchange Name	NASDAQ
Trading Symbol	FOX
Entity Common Stock, Shares Outstanding		257,829,747

XML

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Millions, $ in Millions		3 Months Ended
		Sep. 30, 2020	Sep. 30, 2019
Income Statement [Abstract]
Revenues		$ 2,717	$ 2,667
Operating expenses		(1,168)	(1,468)
Selling, general and administrative		(388)	(352)
Depreciation and amortization		(68)	(50)
Impairment and restructuring charges		(35)	(9)
Interest expense		(99)	(90)
Interest income		1	17
Other, net		519	(15)
Income before income tax expense		1,479	700
Income tax expense		(362)	(187)
Net income		1,117	513
Less: Net income attributable to noncontrolling interests	[1]	(11)	(14)
Net income attributable to Fox Corporation stockholders		$ 1,106	$ 499
Weighted average shares
Basic		603	622
Diluted		605	624
Net income attributable to Fox Corporation stockholders per share - basic and diluted		$ 1.83	$ 0.80

[1] Net income attributable to noncontrolling interests includes $4 million and $9 million for the three months ended September 30, 2020 and 2019, respectively, relating to redeemable noncontrolling interests.

XML

UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions		3 Months Ended
		Sep. 30, 2020	Sep. 30, 2019
Statement Of Income And Comprehensive Income [Abstract]
Net income		$ 1,117	$ 513
Other comprehensive income, net of tax
Benefit plan adjustments		9	4
Other comprehensive income, net of tax		9	4
Comprehensive income		1,126	517
Less: Net income attributable to noncontrolling interests	[1]	(11)	(14)
Comprehensive income attributable to Fox Corporation stockholders		$ 1,115	$ 503

[1] Net income attributable to noncontrolling interests includes $4 million and $9 million for the three months ended September 30, 2020 and 2019, respectively, relating to redeemable noncontrolling interests.

XML

UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Millions	3 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Statement Of Income And Comprehensive Income [Abstract]
Net income attributable to redeemable noncontrolling interests	$ 4	$ 9

XML

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions		Sep. 30, 2020	Jun. 30, 2020
Current assets
Cash and cash equivalents		$ 5,061	$ 4,645
Receivables, net		1,997	1,888
Inventories, net		1,271	856
Other		134	97
Total current assets		8,463	7,486
Non-current assets
Property, plant and equipment, net		1,539	1,498
Intangible assets, net		3,183	3,198
Goodwill		3,409	3,409
Deferred tax assets		3,963	4,358
Other non-current assets		1,940	1,801
Total assets		22,497	21,750
Current liabilities
Accounts payable, accrued expenses and other current liabilities		2,012	1,906
Non-current liabilities
Borrowings		7,947	7,946
Other liabilities		1,422	1,482
Redeemable noncontrolling interests		310	305
Commitments and contingencies
Equity
Additional paid-in capital		9,668	9,831
Retained earnings		1,525	674
Accumulated other comprehensive loss		(408)	(417)
Total Fox Corporation stockholders' equity		10,791	10,094
Noncontrolling interests		15	17
Total equity		10,806	10,111
Total liabilities and equity		22,497	21,750
Class A Common Stock
Equity
Common stock	[1]	3	3
Class B Common Stock
Equity
Common stock	[2]	$ 3	$ 3

[1] Class A common stock, $0.01 par value per share, 2,000,000,000 shares authorized, 338,409,167 shares and 343,608,673 shares issued and outstanding at par as of September 30, 2020 and June 30, 2020, respectively.

[2] Class B common stock, $0.01 par value per share, 1,000,000,000 shares authorized, 258,239,386 shares and 261,078,355 shares issued and outstanding at par as of September 30, 2020 and June 30, 2020, respectively.

XML

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Sep. 30, 2020	Jun. 30, 2020
Class A Common Stock
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	2,000,000,000	2,000,000,000
Common stock, shares issued	338,409,167	343,608,673
Common stock, shares outstanding	338,409,167	343,608,673
Class B Common Stock
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	1,000,000,000	1,000,000,000
Common stock, shares issued	258,239,386	261,078,355
Common stock, shares outstanding	258,239,386	261,078,355

XML

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions	3 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
OPERATING ACTIVITIES
Net income	$ 1,117	$ 513
Adjustments to reconcile net income to cash provided by operating activities
Depreciation and amortization	68	50
Amortization of cable distribution investments	5	9
Impairment and restructuring charges	35	9
Equity-based compensation	31	27
Other, net	(519)	15
Deferred income taxes	391	165
Change in operating assets and liabilities, net of acquisitions and dispositions
Receivables and other assets	(193)	(110)
Inventories net of program rights payable	(440)	(358)
Accounts payable and accrued expenses	(62)	(113)
Other changes, net	(166)	(5)
Net cash provided by operating activities	267	202
INVESTING ACTIVITIES
Property, plant and equipment	(117)	(39)
Purchase of investments	(31)	0
Other investing activities, net	(1)	(1)
Net cash used in investing activities	(149)	(40)
FINANCING ACTIVITIES
Repurchase of shares	(267)	0
Non-operating cash flows from (to) The Walt Disney Company	152	(41)
Settlement of Divestiture Tax prepayment	462	0
Dividends paid and distributions	(15)	(14)
Other financing activities, net	(34)	(1)
Net cash provided by (used in) financing activities	298	(56)
Net increase in cash and cash equivalents	416	106
Cash and cash equivalents, beginning of year	4,645	3,234
Cash and cash equivalents, end of period	$ 5,061	$ 3,340

XML

UNAUDITED CONSOLIDATED STATEMENTS OF EQUITY - USD ($) shares in Millions, $ in Millions	Total	Common Stock Class A Common Stock	Common Stock Class B Common Stock	Additional Paid-in Capital	Retained Earnings	Accumulated Other Comprehensive (Loss) Income	Total Fox Corporation Stockholders' Equity	Noncontrolling Interests	[1]
Beginning Balance at Jun. 30, 2019	$ 9,958	$ 4	$ 3	$ 9,891	$ 357	$ (308)	$ 9,947	$ 11
Beginning Balance (in shares) at Jun. 30, 2019		354	266
Net income	504	$ 0	$ 0	0	499	0	499	5
Other comprehensive income	4	0	0	0	0	4	4	0
Dividends declared	(143)	0	0	0	(143)	0	(143)	0
Other	7	$ 0	$ 0	30	(17)	0	13	(6)
Other, shares		0	0
Ending Balance at Sep. 30, 2019	10,330	$ 4	$ 3	9,921	696	(304)	10,320	10
Ending Balance (in shares) at Sep. 30, 2019		354	266
Beginning Balance at Jun. 30, 2020	10,111	$ 3	$ 3	9,831	674	(417)	10,094	17
Beginning Balance (in shares) at Jun. 30, 2020		344	261
Net income	1,113	$ 0	$ 0	0	1,106	0	1,106	7
Other comprehensive income	9	0	0	0	0	9	9	0
Dividends declared	(138)	0	0	0	(138)	0	(138)	0
Shares repurchased	(270)	$ 0	$ 0	(161)	(109)	0	(270)	0
Shares repurchased, shares		(7)	(3)
Other	(19)	$ 0	$ 0	(2)	(8)	0	(10)	(9)
Other, shares		1	0
Ending Balance at Sep. 30, 2020	$ 10,806	$ 3	$ 3	$ 9,668	$ 1,525	$ (408)	$ 10,791	$ 15
Ending Balance (in shares) at Sep. 30, 2020		338	258

[1] Excludes Redeemable noncontrolling interests which are reflected in temporary equity (See Note 4—Fair Value under the heading “Redeemable Noncontrolling Interests”).

XML

Description of Business and Basis of Presentation

3 Months Ended

Sep. 30, 2020

Organization Consolidation And Presentation Of Financial Statements [Abstract]

Description of Business and Basis of Presentation

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.

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, 2021, due to, among other things, the impact of coronavirus disease 2019 (“COVID-19”) on the Company’s business.

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.

The outbreak of the COVID-19 pandemic has resulted in widespread and continuing negative impacts on the macroeconomic environment and disruption to the Company’s business. Weak economic conditions and increased volatility and disruption in the financial markets pose risks to the Company and its business partners, including advertisers whose expenditures tend to reflect overall economic conditions. The COVID-19 pandemic has caused some of the Company’s advertisers to reduce their spending, and future declines in the economic prospects of advertisers or the economy in general could negatively impact their advertising expenditures further. Depending on the duration and severity of the recession, it could lead to changes in consumer behavior, including increasing numbers of consumers canceling or foregoing subscriptions to multi-channel video programming distributor (“MVPD”) services, that adversely affect the Company’s affiliate fee and advertising revenues. In addition, the Company’s business depends on the volume and popularity of the content it distributes, particularly sports content. Following the COVID-19 outbreak, sports events to which the Company has broadcast rights have been cancelled or postponed and the production of certain entertainment content the Company distributes has been suspended. Although some of these sports events and productions have resumed, there may be additional content disruptions in the future. Depending on their duration and severity, these disruptions could materially adversely affect the Company’s future advertising revenues and, over a longer period, its future affiliate fee revenues. To the extent the pandemic further negatively impacts the Company’s ability to air sports events, particularly National Football League (“NFL”) and college sports, it could result in a significantly greater adverse effect on the Company’s business, financial condition or results of operations than the Company has experienced thus far. In addition, shifting sports schedules may negatively impact the Company’s ability to attract viewers and advertisers to its sports and entertainment programming.

The Company assessed certain accounting matters that generally require consideration of forecasted financial information in context with the information reasonably available to the Company and the best estimates of the future impacts of COVID-19 as of September 30, 2020. The accounting matters assessed included, but were not limited to, the Company’s valuation allowances, programming rights and the carrying value of the goodwill and other long-lived assets. While there was not an impact to the Company’s consolidated financial statements as of September 30, 2020, the Company’s future assessment of the magnitude and duration of COVID-19, as well as other factors, could result in material impacts to the Company’s consolidated financial statements in future reporting periods.

These interim Unaudited Consolidated Financial Statements and notes thereto should be read in conjunction with the audited consolidated and combined financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2020 as filed with the Securities and Exchange Commission on August 10, 2020 (the “2020 Form 10-K”).

The Unaudited Consolidated Financial Statements include the accounts of FOX. 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%. In accordance with Accounting Standards Codification (“ASC”) 321 “Investments—Equity Securities” (“ASC 321”), 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 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.

Pursuant to the merger agreement relating to the merger of Twenty-First Century Fox, Inc. (“21CF”) and The Walt Disney Company (“Disney”), the Company made a prepayment of approximately $700 million which represented the Company’s share of the estimated tax liabilities resulting from the anticipated divestitures by Disney of certain assets (the “Divestiture Tax”), principally the FOX Sports Regional Sports Networks (“RSNs”). As of September 30, 2020, Disney had sold the RSNs, the Company and Disney reached an agreement to settle the majority of the prepaid Divestiture Tax and the Company received $462 million from Disney as reimbursement of the Company’s prepayment based upon the sales price of the RSNs. This reimbursement was recorded in Other, net in the Statement of Operations (See Note 11—Additional Financial Information under the heading “Other, net”). The balance of the prepaid Divestiture Tax is subject to adjustment in the future, but any such adjustment is not expected to have a material impact on the results of the Company.

The Company’s fiscal year ends on June 30 of each year. Certain fiscal 2020 amounts have been reclassified to conform to the fiscal 2021 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 and Recently Issued Accounting Guidance

Adopted

In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”), as amended. On July 1, 2020, the Company adopted ASU 2016-13 on a modified retrospective basis. The amendments in ASU 2016-13 require, among other things, financial assets measured at amortized cost basis to be presented at the net amount expected to be collected as compared to previous GAAP which delayed recognition until it was probable a loss had been incurred. The adoption of ASU 2016-13 did not have a material impact on the Company’s Financial Statements.

In August 2018, the FASB issued ASU 2018-15, “Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract” (“ASU 2018-15”). On July 1, 2020, the Company adopted ASU 2018-15 on a prospective basis. The amendments in ASU 2018-15 require implementation costs incurred in a hosting arrangement that is a service contract to be capitalized using the same guidance for capitalizing implementation costs incurred to develop or obtain internal-use software. In addition, ASU 2018-15 provides guidance regarding the term over which capitalized implementation costs are to be amortized and requires specific financial statement presentation and disclosures. The adoption of ASU 2018-15 did not have a material impact on the Company’s Financial Statements.

In March 2019, the FASB issued ASU 2019-02, “Entertainment—Films—Other Assets—Film Costs (Subtopic 926-20) and Entertainment—Broadcasters—Intangibles—Goodwill and Other (Subtopic 920-350): Improvements to Accounting for Costs of Films and License Agreements for Program Materials” (“ASU 2019-02”). On July 1, 2020, the Company adopted ASU 2019-02 on a prospective basis and reclassified entertainment programming rights, with a contract duration of longer than a year, that were previously classified as the current portion of inventories, net to non-current inventories, net on the Balance Sheet. The amendments in ASU 2019-02 align the accounting treatment for production costs of episodic television series with the accounting treatment for production costs of films. In addition,

ASU 2019-02 modifies certain aspects of the amortization, impairment, presentation and disclosure requirements in ASC 926-20 and the impairment, presentation and disclosure requirements in ASC 920-350, including eliminating the balance sheet classification guidance. The adoption of ASU 2019-02 did not have a significant impact on the Company’s Financial Statements (See Note 3—Inventories, net for additional information).

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Acquisitions, Disposals and Other Transactions

3 Months Ended

Sep. 30, 2020

Acquisitions Disposals And Other Transactions [Abstract]

Acquisitions, Disposals and Other Transactions

NOTE 2. ACQUISITIONS, DISPOSALS AND OTHER TRANSACTIONS

The Company’s acquisitions support the Company’s strategy to strengthen its core brands and leverage its sports broadcasting rights and expand their reach beyond their traditional linear businesses. For the acquisitions in Note 3—Acquisitions, Disposals and Other Transactions in the 2020 Form 10-K under the heading “Acquisitions and Disposals,” the accounting for each business combination, including consideration transferred, is based on provisional amounts and the allocation of the consideration transferred is not final. The amounts allocated to intangibles and goodwill, the estimates of useful lives and the related amortization expense are subject to changes pending the completion of the final valuations of certain assets and liabilities. A change in the allocation of consideration transferred and any estimates of useful lives could result in a change in the value allocated to the intangible assets that could impact future amortization expense.

XML

Inventories, Net

3 Months Ended

Sep. 30, 2020

Inventory Disclosure [Abstract]

Inventories, Net

NOTE 3. INVENTORIES, NET

In accordance with ASC 920, “Entertainment—Broadcasters” (“ASC 920”), costs incurred in acquiring program rights or producing programs for the Cable Network Programming and Television segments, including advances, are capitalized and amortized over the license period or projected useful life of the programming. Program rights and the related liabilities are recorded at the gross amount of the liabilities when the license period has begun, the cost of the program is determinable and the program is accepted and available for airing. Effective for the Company beginning on July 1, 2020, ASC 920 permits program rights to be recorded in non-current inventories, net rather than segregated between current and non-current inventories, net. As a result, the Company reclassified entertainment programming rights, with a contract duration of longer than a year, that were previously classified as the current portion of inventories, net to non-current inventories, net on the Balance Sheet. Advances on sports events expected to be broadcast within one year and programs with an initial license period of one year or less continue to be recorded in the current portion of inventories, net. Television broadcast network entertainment programming, which includes acquired series, co-produced series, movies and other programs, are amortized primarily on an accelerated basis.

The Company has single and multi-year contracts for broadcast rights of programs and sports events. The Company evaluates the recoverability of the unamortized costs associated therewith, using total estimated advertising and other revenues attributable to the program material and considering the Company’s expectations of the usefulness of the program rights. The recoverability of entertainment programming is generally assessed on a contract basis and the recoverability of certain sports rights contracts for content broadcast on the FOX Network and the sports channels is assessed on an aggregate basis. Where an evaluation indicates that these multi-year contracts will result in an asset that is not recoverable, amortization of rights is accelerated in an amount equal to the amount by which the unamortized costs exceed fair value. The costs of multi-year sports contracts at the FOX Network and the sports channels are primarily amortized based on the ratio of each current period’s attributable revenue for each contract to the estimated total remaining attributable revenue for each contract. Estimates can change and, accordingly, are reviewed periodically and amortization is adjusted as necessary. Such changes in the future could be material.

The Company’s inventories were comprised of the following:

	As of September 30, 2020			As of June 30, 2020
	(in millions)
Sports programming rights	$	1,098		$	674
Entertainment programming rights		428			384
Total inventories, net		1,526			1,058
Less: current portion of inventories, net		(1,271	)		(856	)
Total non-current inventories, net	$	255		$	202

For the three months ended September 30, 2020, the aggregate amortization expense related to the programming rights was approximately $670 million, which is included in Operating expenses in the Statement of Operations.

XML

Fair Value

3 Months Ended

Sep. 30, 2020

Fair Value Disclosures [Abstract]

Fair Value

NOTE 4. FAIR VALUE

In accordance with ASC 820, “Fair Value Measurement,” 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 liabilities carried at fair value on a recurring basis:

	Fair value measurements
	As of September 30, 2020
	Total			Level 1			Level 2		Level 3
	(in millions)
Assets
Investments in equity securities	$	640		$	640	(a)	$	-	$	-
Liabilities
Other		(4	)		-			-		(4)	(b)
Redeemable noncontrolling interests		(310	)		-			-		(310)	(b)
Total	$	326		$	640		$	-	$	(314)

	Fair value measurements
	As of June 30, 2020
	Total			Level 1			Level 2		Level 3
	(in millions)
Assets
Investments in equity securities	$	531		$	531	(a)	$	-	$	-
Liabilities
Other		(6	)		-			-		(6)	(b)
Redeemable noncontrolling interests		(305	)		-			-		(305)	(b)
Total	$	220		$	531		$	-	$	(311)

^(a) The investment categorized as Level 1 represents 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 2020 Form 10-K under the heading “Flutter” for further discussion).

^(b) The Company utilizes the market approach valuation technique 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 liability. Examples of utilized unobservable inputs are future cash flows and long-term growth rates.

Redeemable Noncontrolling Interests

The Company accounts for redeemable noncontrolling interests in accordance with ASC 480-10-S99-3A, “Distinguishing Liabilities from Equity,” because their exercise is outside the control of the Company. The redeemable noncontrolling interests recorded are put rights held by minority shareholders in a majority-owned sports network and in Credible Labs Inc. (“Credible”).

The changes in redeemable noncontrolling interests classified as Level 3 measurements were as follows:

	For the three months ended September 30,
	2020			2019
	(in millions)
Beginning of period	$	(305	)	$	(189	)
Net income		(4	)		(9	)
Distributions		6			8
Accretion		(7	)		(17	)
End of period	$	(310	)	$	(207	)

As of September 30, 2020, a portion of the sports network minority shareholder’s put right was exercisable. In October 2020, the sports network minority shareholder exercised its put right to sell this portion of its interest to the Company for approximately $135 million. The final put right held by the sports network minority shareholder will become exercisable in July 2021. The put right held by the Credible minority shareholder will become exercisable in fiscal 2025.

Financial Instruments

The carrying value of the Company’s financial instruments, such as cash and cash equivalents, receivables, payables and investments accounted for using the measurement alternative in accordance with ASC 321, approximates fair value.

	As of September 30, 2020		As of June 30, 2020
	(in millions)
Borrowings
Fair value	$	9,709	$	9,746
Carrying value	$	7,947	$	7,946

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 be redeemed upon demand and are maintained with financial institutions of reputable credit and, therefore, bear minimal credit risk.

The Company’s receivables did not represent significant concentrations of credit risk as of September 30, 2020 or June 30, 2020. Generally, the Company does not require collateral to secure receivables. As of September 30, 2020 and June 30, 2020, the Company had no individual customers that accounted for 10% or more of the Company’s receivables.

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Borrowings

3 Months Ended

Sep. 30, 2020

Debt Disclosure [Abstract]

Borrowings

NOTE 5. BORROWINGS

Senior Notes Issued

Borrowings include senior notes (See Note 9—Borrowings in the 2020 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 2020 Form 10-K under the heading “Revolving Credit Agreement”). As of September 30, 2020, there were no borrowings outstanding under the revolving credit agreement.

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Stockholders' Equity

3 Months Ended

Sep. 30, 2020

Stockholders Equity Note [Abstract]

Stockholders' Equity

NOTE 6. STOCKHOLDERS’ EQUITY

Stock Repurchase Program

In fiscal 2020, the Company’s Board of Directors (the “Board”) authorized a stock repurchase program providing for the repurchase of $2 billion of the Company’s 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”). The program has no time limit and may be modified, suspended or discontinued at any time. In August 2020, the Company entered into two accelerated share repurchase (“ASR”) agreements to repurchase $154 million of Class A Common Stock and $66 million of Class B Common Stock.

In accordance with the ASR agreements, in August 2020, the Company paid a third-party financial institution $154 million and $66 million and received initial deliveries of approximately 4.7 million and 2.0 million shares of Class A Common Stock and Class B Common Stock, respectively, representing 80% of the shares expected to be repurchased under each ASR agreement, at a price of $26.00 and $26.01 per share, which was The Nasdaq Global Select Market closing share price of the Class A Common Stock and Class B Common Stock, respectively, on August 21, 2020. Upon settlement of the ASR agreements in September 2020, the Company received final deliveries of approximately 0.9 million and 0.4 million shares of Class A Common Stock and Class B Common Stock, respectively. The final number of shares purchased under the ASR agreements was determined using a price of $27.57 and $27.67 per share (the volume-weighted average market price of the Class A Common Stock and Class B Common Stock, respectively, during the terms of the ASR agreements less a discount applicable for the Class A Common Stock). The Company accounted for each ASR agreement as two separate transactions. The initial deliveries of Class A Common Stock and Class B Common Stock were accounted for as treasury stock transactions recorded on the acquisition date. The final settlements of Class A Common Stock and Class B Common Stock were accounted for as forward contracts indexed to the Class A Common Stock or Class B Common Stock, as applicable, and qualified as equity transactions.

In addition to the shares purchased under the ASR agreements, the Company repurchased shares of Class A Common Stock and Class B Common Stock in the open market. In total, the Company repurchased approximately 10 million shares of Common Stock for $270 million during the three months ended September 30, 2020.

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 September 30, 2020, the Company’s remaining stock repurchase authorization was approximately $1.1 billion. Subsequent to September 30, 2020, the Company repurchased a total of approximately 1.3 million shares of Common Stock for approximately $35 million in the open market.

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 September 30,
	2020		2019
Cash dividend per share	$	0.23	$	0.23

The Company declared a semi-annual dividend of $0.23 per share on both the Class A Common Stock and the Class B Common Stock during the three months ended September 30, 2020, which was paid in October 2020 to stockholders of record on September 2, 2020.

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Equity-Based Compensation

3 Months Ended

Sep. 30, 2020

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Equity-Based Compensation

NOTE 7. EQUITY-BASED COMPENSATION

As of September 30, 2020, the Company has one equity plan, the Fox Corporation 2019 Shareholder Alignment Plan (the “SAP”) (See Note 12—Equity-Based Compensation in the 2020 Form 10-K).

The following table summarizes the Company’s equity-based compensation:

	For the three months ended September 30,
	2020		2019
	(in millions)
Equity-based compensation	$	31	$	32
Intrinsic value of all settled equity-based awards	$	81	$	3
Tax benefit on settled equity-based awards	$	14	$	-

The Company’s stock based awards are settled in Class A Common Stock. As of September 30, 2020, the Company’s total estimated compensation cost, not yet recognized, related to non-vested equity awards held by the Company’s employees was approximately $190 million and is expected to be recognized over a weighted average period between one and two years.

As of September 30, 2020 and 2019, the Company had approximately 7 million and 4 million stock options outstanding, respectively. For the three months ended September 30, 2020 and 2019, the computation of diluted earnings per share did not include most of the stock options outstanding during these periods, because their inclusion would have been antidilutive.

Awards Granted and Vested

Restricted Stock Units

During the three months ended September 30, 2020, approximately 1.9 million restricted stock units (“RSUs”) were granted, which vest in equal annual installments over a three-year period subject to the participants’ continued employment with the Company, and 3.1 million RSUs vested.

Performance-Based Stock Options

Performance-based stock options (“PSOs”) are awards that entitle the holder to purchase a specified number of shares of Class A Common Stock at a specified price for a specified period of time, contingent on the performance of the Class A Common Stock over a three-year period, subject to the terms and conditions of the SAP, the applicable award documents and such other terms and conditions as the Compensation Committee of the Board may establish. The PSOs granted under the SAP will vest in full only if the Company’s Class A Common Stock exceeds the exercise price of the PSO by a certain threshold over a certain period of time during the performance period (the “market condition”). The PSOs were fair valued using a Monte Carlo simulation model that uses the following assumptions: (i) expected volatility; (ii) expected term; (iii) risk-free interest rate; and (iv) expected dividend yield. Compensation cost related to the PSO will be recognized even if the market condition is not met.

During the three months ended September 30, 2020, the Company granted approximately 5.0 million PSOs, 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.

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Commitments and Contingencies

3 Months Ended

Sep. 30, 2020

Commitments And Contingencies Disclosure [Abstract]

Commitments and Contingencies

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 September 30, 2020 have not changed significantly from disclosures included in the 2020 Form 10-K.

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 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 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 2020 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 $60 million and $65 million as of September 30, 2020 and June 30, 2020, respectively.

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 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 21CF, the Company (prior to the Distribution (as defined in Note 1—Description of Business and Basis of Presentation in the 2020 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 requires 21CF and/or Disney 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.

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Pension and Other Postretirement Benefits

3 Months Ended

Sep. 30, 2020

Compensation And Retirement Disclosure [Abstract]

Pension and Other Postretirement Benefits

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 $17 million and $14 million for the three months ended September 30, 2020 and 2019, respectively.

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Segment Information

3 Months Ended

Sep. 30, 2020

Segment Reporting [Abstract]

Segment Information

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 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, Inc., a free advertising-supported video-on-demand (“AVOD”) 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. 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 months ended September 30, 2020 and 2019:

	For the three months ended September 30,
	2020			2019
	(in millions)
Revenues
Cable Network Programming	$	1,325		$	1,285
Television		1,350			1,356
Other, Corporate and Eliminations		42			26
Total revenues	$	2,717		$	2,667
Segment EBITDA
Cable Network Programming	$	781		$	684
Television		457			251
Other, Corporate and Eliminations		(72	)		(79	)
Amortization of cable distribution investments		(5	)		(9	)
Depreciation and amortization		(68	)		(50	)
Impairment and restructuring charges		(35	)		(9	)
Interest expense		(99	)		(90	)
Interest income		1			17
Other, net		519			(15	)
Income before income tax expense		1,479			700
Income tax expense		(362	)		(187	)
Net income		1,117			513
Less: Net income attributable to noncontrolling interests		(11	)		(14	)
Net income attributable to Fox Corporation stockholders	$	1,106		$	499

Revenues by Segment by Component

	For the three months ended September 30,
	2020		2019
	(in millions)
Cable Network Programming
Affiliate fee	$	973	$	939
Advertising		299		254
Other		53		92
Total Cable Network Programming revenues		1,325		1,285
Television
Advertising		670		787
Affiliate fee		560		455
Other		120		114
Total Television revenues		1,350		1,356
Other, Corporate and Eliminations		42		26
Total revenues	$	2,717	$	2,667

Future Performance Obligations

As of September 30, 2020, approximately $5.1 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 September 30,
	2020		2019
	(in millions)
Depreciation and amortization
Cable Network Programming	$	13	$	13
Television		25		15
Other, Corporate and Eliminations		30		22
Total depreciation and amortization	$	68	$	50

	As of September 30, 2020		As of June 30, 2020
	(in millions)
Assets
Cable Network Programming	$	2,622	$	2,591
Television		7,703		7,054
Other, Corporate and Eliminations		11,417		11,487
Investments		755		618
Total assets	$	22,497	$	21,750

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Additional Financial Information

3 Months Ended

Sep. 30, 2020

Organization Consolidation And Presentation Of Financial Statements [Abstract]

Additional Financial Information

NOTE 11. ADDITIONAL FINANCIAL INFORMATION

Impairment and Restructuring Charges

Impairment and restructuring charges were $35 million and $9 million for the three months ended September 30, 2020 and 2019, respectively. The impairment and restructuring charges for the three months ended September 30, 2020 and 2019 were primarily comprised of severance costs principally at the Cable Network Programming segment.

Other, net

The following table sets forth the components of Other, net included in the Statements of Operations:

	For the three months ended September 30,
	2020			2019
	(in millions)
Transaction costs(a)	$	451		$	(45	)
Net gains on investments in equity securities(b)		121			49
Other		(53	)		(19	)
Total other, net	$	519		$	(15	)

^{(a) The transaction costs for the three months ended September 30, 2020 are primarily related to the partial settlement from Disney of $462 million related to the reimbursement of the Company’s prepayment of its share of the Divestiture Tax (See Note 1—Description of Business and Basis of Presentation). The transaction costs for the three months ended September 30, 2019 are primarily related to costs associated with the profits participants litigation (See Note 14—Commitments and Contingencies in the 2020 Form 10-K under the heading “Profits Participants Litigation”) and the Separation and the Distribution (See Note 1—Description of Business and Basis of Presentation in the 2020 Form 10-K under the heading “The Distribution”) and included retention related costs.}

^(b) Net gains on investments in equity securities for the three months ended September 30, 2020 included the gain related to the change in fair value of the Company’s investment in Flutter (See Note 4—Fair Value) and for the three months ended September 30, 2019 included the gains related to the changes in fair value of the Company’s investments in Roku, Inc. and The Stars Group Inc. (See Note 6—Fair Value in the 2020 Form 10-K).

Other Non-Current Assets

The following table sets forth the components of Other non-current assets included in the Balance Sheets:

	As of September 30, 2020		As of June 30, 2020
	(in millions)
Investments(a)	$	755	$	618
Operating lease ROU assets		505		539
Grantor Trust		260		247
Inventories, net		255		202
Other		165		195
Total other non-current assets	$	1,940	$	1,801

^(a) Included investments accounted for at fair value on a recurring basis of $640 million and $531 million as of September 30, 2020 and June 30, 2020, respectively (See Note 4—Fair Value).

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 September 30, 2020		As of June 30, 2020
	(in millions)
Accrued expenses	$	871	$	907
Program rights payable		524		485
Deferred revenue		242		152
Operating lease liabilities		104		122
Other current liabilities		271		240
Total accounts payable, accrued expenses and other current liabilities	$	2,012	$	1,906

Other Liabilities

The following table sets forth the components of Other liabilities included in the Balance Sheets:

	As of September 30, 2020		As of June 30, 2020
	(in millions)
Accrued non-current pension/postretirement liabilities	$	710	$	709
Non-current operating lease liabilities		432		452
Other non-current liabilities		280		321
Total other liabilities	$	1,422	$	1,482

Supplemental Cash Flows Information

	For the three months ended September 30,
	2020			2019
	(in millions)
Cash paid for interest	$	(169	)	$	(171	)
Cash paid for income taxes	$	(86	)	$	(6	)

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Description of Business and Basis of Presentation (Policies)

3 Months Ended

Sep. 30, 2020

Accounting Policies [Abstract]

Use of Estimates

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.

Principles of Consolidation

The Unaudited Consolidated Financial Statements include the accounts of FOX. 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%. In accordance with Accounting Standards Codification (“ASC”) 321 “Investments—Equity Securities” (“ASC 321”), 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 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.

Reclassifications and Adjustments

The Company’s fiscal year ends on June 30 of each year. Certain fiscal 2020 amounts have been reclassified to conform to the fiscal 2021 presentation.

Recently Adopted and Recently Issued Accounting Guidance

Recently Adopted and Recently Issued Accounting Guidance

Adopted

In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”), as amended. On July 1, 2020, the Company adopted ASU 2016-13 on a modified retrospective basis. The amendments in ASU 2016-13 require, among other things, financial assets measured at amortized cost basis to be presented at the net amount expected to be collected as compared to previous GAAP which delayed recognition until it was probable a loss had been incurred. The adoption of ASU 2016-13 did not have a material impact on the Company’s Financial Statements.

In August 2018, the FASB issued ASU 2018-15, “Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract” (“ASU 2018-15”). On July 1, 2020, the Company adopted ASU 2018-15 on a prospective basis. The amendments in ASU 2018-15 require implementation costs incurred in a hosting arrangement that is a service contract to be capitalized using the same guidance for capitalizing implementation costs incurred to develop or obtain internal-use software. In addition, ASU 2018-15 provides guidance regarding the term over which capitalized implementation costs are to be amortized and requires specific financial statement presentation and disclosures. The adoption of ASU 2018-15 did not have a material impact on the Company’s Financial Statements.

In March 2019, the FASB issued ASU 2019-02, “Entertainment—Films—Other Assets—Film Costs (Subtopic 926-20) and Entertainment—Broadcasters—Intangibles—Goodwill and Other (Subtopic 920-350): Improvements to Accounting for Costs of Films and License Agreements for Program Materials” (“ASU 2019-02”). On July 1, 2020, the Company adopted ASU 2019-02 on a prospective basis and reclassified entertainment programming rights, with a contract duration of longer than a year, that were previously classified as the current portion of inventories, net to non-current inventories, net on the Balance Sheet. The amendments in ASU 2019-02 align the accounting treatment for production costs of episodic television series with the accounting treatment for production costs of films. In addition,

ASU 2019-02 modifies certain aspects of the amortization, impairment, presentation and disclosure requirements in ASC 926-20 and the impairment, presentation and disclosure requirements in ASC 920-350, including eliminating the balance sheet classification guidance. The adoption of ASU 2019-02 did not have a significant impact on the Company’s Financial Statements (See Note 3—Inventories, net for additional information).

Inventories

In accordance with ASC 920, “Entertainment—Broadcasters” (“ASC 920”), costs incurred in acquiring program rights or producing programs for the Cable Network Programming and Television segments, including advances, are capitalized and amortized over the license period or projected useful life of the programming. Program rights and the related liabilities are recorded at the gross amount of the liabilities when the license period has begun, the cost of the program is determinable and the program is accepted and available for airing. Effective for the Company beginning on July 1, 2020, ASC 920 permits program rights to be recorded in non-current inventories, net rather than segregated between current and non-current inventories, net. As a result, the Company reclassified entertainment programming rights, with a contract duration of longer than a year, that were previously classified as the current portion of inventories, net to non-current inventories, net on the Balance Sheet. Advances on sports events expected to be broadcast within one year and programs with an initial license period of one year or less continue to be recorded in the current portion of inventories, net. Television broadcast network entertainment programming, which includes acquired series, co-produced series, movies and other programs, are amortized primarily on an accelerated basis.

The Company has single and multi-year contracts for broadcast rights of programs and sports events. The Company evaluates the recoverability of the unamortized costs associated therewith, using total estimated advertising and other revenues attributable to the program material and considering the Company’s expectations of the usefulness of the program rights. The recoverability of entertainment programming is generally assessed on a contract basis and the recoverability of certain sports rights contracts for content broadcast on the FOX Network and the sports channels is assessed on an aggregate basis. Where an evaluation indicates that these multi-year contracts will result in an asset that is not recoverable, amortization of rights is accelerated in an amount equal to the amount by which the unamortized costs exceed fair value. The costs of multi-year sports contracts at the FOX Network and the sports channels are primarily amortized based on the ratio of each current period’s attributable revenue for each contract to the estimated total remaining attributable revenue for each contract. Estimates can change and, accordingly, are reviewed periodically and amortization is adjusted as necessary. Such changes in the future could be material.

Concentrations of Credit Risk

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 be redeemed upon demand and are maintained with financial institutions of reputable credit and, therefore, bear minimal credit risk.

The Company’s receivables did not represent significant concentrations of credit risk as of September 30, 2020 or June 30, 2020. Generally, the Company does not require collateral to secure receivables. As of September 30, 2020 and June 30, 2020, the Company had no individual customers that accounted for 10% or more of the Company’s receivables.

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Inventories, Net (Tables)

3 Months Ended

Sep. 30, 2020

Inventory Disclosure [Abstract]

Schedule of Inventories, Net

The Company’s inventories were comprised of the following

	As of September 30, 2020			As of June 30, 2020
	(in millions)
Sports programming rights	$	1,098		$	674
Entertainment programming rights		428			384
Total inventories, net		1,526			1,058
Less: current portion of inventories, net		(1,271	)		(856	)
Total non-current inventories, net	$	255		$	202

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Fair Value (Tables)

3 Months Ended

Sep. 30, 2020

Fair Value Disclosures [Abstract]

Fair Value of Financial Assets (Liabilities) and the Level Used to Measure Them

The following tables present information about financial assets and liabilities carried at fair value on a recurring basis:

	Fair value measurements
	As of September 30, 2020
	Total			Level 1			Level 2		Level 3
	(in millions)
Assets
Investments in equity securities	$	640		$	640	(a)	$	-	$	-
Liabilities
Other		(4	)		-			-		(4)	(b)
Redeemable noncontrolling interests		(310	)		-			-		(310)	(b)
Total	$	326		$	640		$	-	$	(314)

	Fair value measurements
	As of June 30, 2020
	Total			Level 1			Level 2		Level 3
	(in millions)
Assets
Investments in equity securities	$	531		$	531	(a)	$	-	$	-
Liabilities
Other		(6	)		-			-		(6)	(b)
Redeemable noncontrolling interests		(305	)		-			-		(305)	(b)
Total	$	220		$	531		$	-	$	(311)

^(a) The investment categorized as Level 1 represents 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 2020 Form 10-K under the heading “Flutter” for further discussion).

^(b) The Company utilizes the market approach valuation technique 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 liability. Examples of utilized unobservable inputs are future cash flows and long-term growth rates.

Changes in Fair Value of Financial Liabilities on a Recurring Basis Using Level 3

The changes in redeemable noncontrolling interests classified as Level 3 measurements were as follows:

	For the three months ended September 30,
	2020			2019
	(in millions)
Beginning of period	$	(305	)	$	(189	)
Net income		(4	)		(9	)
Distributions		6			8
Accretion		(7	)		(17	)
End of period	$	(310	)	$	(207	)

Schedule of Fair Value and Carrying Value of Borrowings

	As of September 30, 2020		As of June 30, 2020
	(in millions)
Borrowings
Fair value	$	9,709	$	9,746
Carrying value	$	7,947	$	7,946

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Stockholders' Equity (Tables)

3 Months Ended

Sep. 30, 2020

Stockholders Equity Note [Abstract]

Schedule of Dividends Declared

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 September 30,
	2020		2019
Cash dividend per share	$	0.23	$	0.23

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Equity-Based Compensation (Tables)

3 Months Ended

Sep. 30, 2020

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Summary of Equity-Based Compensation

The following table summarizes the Company’s equity-based compensation:

	For the three months ended September 30,
	2020		2019
	(in millions)
Equity-based compensation	$	31	$	32
Intrinsic value of all settled equity-based awards	$	81	$	3
Tax benefit on settled equity-based awards	$	14	$	-

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Segment Information (Tables)

3 Months Ended

Sep. 30, 2020

Segment Reporting [Abstract]

Reconciliation of Revenues and Segment EBITDA from Segments to Consolidated

The following tables set forth the Company’s Revenues and Segment EBITDA for the three months ended September 30, 2020 and 2019:

	For the three months ended September 30,
	2020			2019
	(in millions)
Revenues
Cable Network Programming	$	1,325		$	1,285
Television		1,350			1,356
Other, Corporate and Eliminations		42			26
Total revenues	$	2,717		$	2,667
Segment EBITDA
Cable Network Programming	$	781		$	684
Television		457			251
Other, Corporate and Eliminations		(72	)		(79	)
Amortization of cable distribution investments		(5	)		(9	)
Depreciation and amortization		(68	)		(50	)
Impairment and restructuring charges		(35	)		(9	)
Interest expense		(99	)		(90	)
Interest income		1			17
Other, net		519			(15	)
Income before income tax expense		1,479			700
Income tax expense		(362	)		(187	)
Net income		1,117			513
Less: Net income attributable to noncontrolling interests		(11	)		(14	)
Net income attributable to Fox Corporation stockholders	$	1,106		$	499

Summary of Revenues by Segment by Component to Consolidated

Revenues by Segment by Component

	For the three months ended September 30,
	2020		2019
	(in millions)
Cable Network Programming
Affiliate fee	$	973	$	939
Advertising		299		254
Other		53		92
Total Cable Network Programming revenues		1,325		1,285
Television
Advertising		670		787
Affiliate fee		560		455
Other		120		114
Total Television revenues		1,350		1,356
Other, Corporate and Eliminations		42		26
Total revenues	$	2,717	$	2,667

Reconciliation of Depreciation and Amortization from Segments to Consolidated

	For the three months ended September 30,
	2020		2019
	(in millions)
Depreciation and amortization
Cable Network Programming	$	13	$	13
Television		25		15
Other, Corporate and Eliminations		30		22
Total depreciation and amortization	$	68	$	50

Reconciliation of Assets from Segments to Consolidated

	As of September 30, 2020		As of June 30, 2020
	(in millions)
Assets
Cable Network Programming	$	2,622	$	2,591
Television		7,703		7,054
Other, Corporate and Eliminations		11,417		11,487
Investments		755		618
Total assets	$	22,497	$	21,750

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Additional Financial Information (Tables)

3 Months Ended

Sep. 30, 2020

Organization Consolidation And Presentation Of Financial Statements [Abstract]

Components of Other, net

The following table sets forth the components of Other, net included in the Statements of Operations:

	For the three months ended September 30,
	2020			2019
	(in millions)
Transaction costs(a)	$	451		$	(45	)
Net gains on investments in equity securities(b)		121			49
Other		(53	)		(19	)
Total other, net	$	519		$	(15	)

^{(a) The transaction costs for the three months ended September 30, 2020 are primarily related to the partial settlement from Disney of $462 million related to the reimbursement of the Company’s prepayment of its share of the Divestiture Tax (See Note 1—Description of Business and Basis of Presentation). The transaction costs for the three months ended September 30, 2019 are primarily related to costs associated with the profits participants litigation (See Note 14—Commitments and Contingencies in the 2020 Form 10-K under the heading “Profits Participants Litigation”) and the Separation and the Distribution (See Note 1—Description of Business and Basis of Presentation in the 2020 Form 10-K under the heading “The Distribution”) and included retention related costs.}

^(b) Net gains on investments in equity securities for the three months ended September 30, 2020 included the gain related to the change in fair value of the Company’s investment in Flutter (See Note 4—Fair Value) and for the three months ended September 30, 2019 included the gains related to the changes in fair value of the Company’s investments in Roku, Inc. and The Stars Group Inc. (See Note 6—Fair Value in the 2020 Form 10-K).

Components of Other Non-current Assets

The following table sets forth the components of Other non-current assets included in the Balance Sheets:

	As of September 30, 2020		As of June 30, 2020
	(in millions)
Investments(a)	$	755	$	618
Operating lease ROU assets		505		539
Grantor Trust		260		247
Inventories, net		255		202
Other		165		195
Total other non-current assets	$	1,940	$	1,801

^(a) Included investments accounted for at fair value on a recurring basis of $640 million and $531 million as of September 30, 2020 and June 30, 2020, respectively (See Note 4—Fair Value).

Components of 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 September 30, 2020		As of June 30, 2020
	(in millions)
Accrued expenses	$	871	$	907
Program rights payable		524		485
Deferred revenue		242		152
Operating lease liabilities		104		122
Other current liabilities		271		240
Total accounts payable, accrued expenses and other current liabilities	$	2,012	$	1,906

Components of Other Liabilities

The following table sets forth the components of Other liabilities included in the Balance Sheets:

	As of September 30, 2020		As of June 30, 2020
	(in millions)
Accrued non-current pension/postretirement liabilities	$	710	$	709
Non-current operating lease liabilities		432		452
Other non-current liabilities		280		321
Total other liabilities	$	1,422	$	1,482

Supplemental Cash Flows Information

Supplemental Cash Flows Information

	For the three months ended September 30,
	2020			2019
	(in millions)
Cash paid for interest	$	(169	)	$	(171	)
Cash paid for income taxes	$	(86	)	$	(6	)

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Description of Business and Basis of Presentation (Narrative) (Details) - USD ($) $ in Millions		3 Months Ended
	Mar. 19, 2019	Sep. 30, 2020	Sep. 30, 2019
Disclosure Basis Of Presentation Details [Line Items]
Settlement of Divestiture Tax prepayment		$ 462	$ 0
Separation And Distribution Agreement
Disclosure Basis Of Presentation Details [Line Items]
Prepayment of the Company's share of the estimated taxes resulting from the anticipated divestitures by Disney of certain assets	$ 700
Settlement of Divestiture Tax prepayment		$ 462

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Inventories, Net (Schedule of Inventories, Net) (Details) - USD ($) $ in Millions	Sep. 30, 2020	Jun. 30, 2020
Inventory Disclosure [Abstract]
Sports programming rights	$ 1,098	$ 674
Entertainment programming rights	428	384
Total inventories, net	1,526	1,058
Less: current portion of inventories, net	(1,271)	(856)
Total non-current inventories, net	$ 255	$ 202

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Inventories, Net (Narrative) (Details) - USD ($) $ in Millions	3 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Inventory [Line Items]
Operating expenses	$ 1,168	$ 1,468
Amortization Expense
Inventory [Line Items]
Operating expenses	$ 670

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Fair Value (Schedule of Financial Assets and Liabilities Carried at Fair Value on a Recurring Basis) (Details) - USD ($) $ in Millions		Sep. 30, 2020	Jun. 30, 2020
Assets
Investments in equity securities		$ 640	$ 531
Liabilities
Redeemable noncontrolling interests		(310)	(305)
Fair value measurements recurring
Assets
Investments in equity securities		640	531
Liabilities
Other		(4)	(6)
Redeemable noncontrolling interests		(310)	(305)
Total		326	220
Fair value measurements recurring | Level 1
Assets
Investments in equity securities	[1]	640	531
Liabilities
Other		0	0
Redeemable noncontrolling interests		0	0
Total		640	531
Fair value measurements recurring | Level 2
Assets
Investments in equity securities		0	0
Liabilities
Other		0	0
Redeemable noncontrolling interests		0	0
Total		0	0
Fair value measurements recurring | Level 3
Assets
Investments in equity securities		0	0
Liabilities
Other	[2]	(4)	(6)
Redeemable noncontrolling interests	[2]	(310)	(305)
Total		$ (314)	$ (311)

[1] The investment categorized as Level 1 represents 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 2020 Form 10-K under the heading “Flutter” for further discussion).

[2] The Company utilizes the market approach valuation technique 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 liability. Examples of utilized unobservable inputs are future cash flows and long-term growth rates.

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Fair Value (Liabilities Measured on Recurring Basis) (Details) - Redeemable Noncontrolling Interests - Level 3 - USD ($) $ in Millions	3 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning of period	$ (305)	$ (189)
Net income	(4)	(9)
Distributions	6	8
Accretion	(7)	(17)
End of period	$ (310)	$ (207)

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Fair Value (Narrative) (Details)	3 Months Ended	12 Months Ended
	Sep. 30, 2020 USD ($) Customer	Jun. 30, 2020 USD ($) Customer	Oct. 31, 2020 USD ($)
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Noncontrolling interests, description	As of September 30, 2020, a portion of the sports network minority shareholder’s put right was exercisable. In October 2020, the sports network minority shareholder exercised its put right to sell this portion of its interest to the Company for approximately $135 million. The final put right held by the sports network minority shareholder will become exercisable in July 2021. The put right held by the Credible minority shareholder will become exercisable in fiscal 2025
Accounts Receivable | Credit Concentration Risk
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Concentration of risk, Accounts receivable	$ 0	$ 0
Number of major customers | Customer	0	0
Accounts Receivable | Credit Concentration Risk | Minimum
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Concentration risk percentage	10.00%	10.00%
Subsequent Event
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Minority shareholder exercised put right			$ 135,000,000

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Fair Value (Borrowings) (Details) - USD ($) $ in Millions	Sep. 30, 2020	Jun. 30, 2020
Fair Value Disclosures [Abstract]
Fair value	$ 9,709	$ 9,746
Carrying value	$ 7,947	$ 7,946

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Borrowings (Narrative) (Details) - Revolving Credit Agreement	3 Months Ended
	Sep. 30, 2020 USD ($)
Debt Instrument [Line Items]
Limit on revolving credit facility	$ 1,000,000,000.0
Sub-limit for maximum amount of letters of credit issuable under revolving credit facility	$ 150,000,000
Credit facility, maturity date	Mar. 31, 2024
Borrowings outstanding	$ 0

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Stockholders Equity (Narrative) (Details)		1 Months Ended			3 Months Ended
	Aug. 21, 2020 $ / shares	Nov. 03, 2020 USD ($) shares	Sep. 30, 2020 USD ($) $ / shares shares	Aug. 31, 2020 USD ($) shares	Sep. 30, 2020 USD ($) $ / shares shares	Sep. 30, 2019 $ / shares	Jun. 30, 2020 $ / shares	Nov. 06, 2019 USD ($) $ / shares
Stockholders Equity [Line Items]
Stock repurchase program, value of shares repurchased during the period | $					$ 270,000,000
Class A Common Stock
Stockholders Equity [Line Items]
Common stock, par value			$ 0.01		$ 0.01		$ 0.01	$ 0.01
Accelerated share repurchases agreement, amount | $				$ 154,000,000
Accelerated share repurchases, amount of payment to third party financial institution | $				$ 154,000,000
Stock repurchase program, number of shares repurchased during the period | shares			900,000	4,700,000
Accelerated share repurchases, percentage of shares expected to be repurchased				80.00%
Accelerated share repurchases, initial price paid per share	$ 26.00
Accelerated share repurchases, final price paid per share			$ 27.57
Cash dividend per share					0.23	$ 0.23
Class A Common Stock | Semi Annual Dividend
Stockholders Equity [Line Items]
Cash dividend per share					$ 0.23
Dividend payable period, month and year			2020-10		2020-10
Dividend record date					Sep. 02, 2020
Class B Common Stock
Stockholders Equity [Line Items]
Common stock, par value			$ 0.01		$ 0.01		$ 0.01	$ 0.01
Accelerated share repurchases agreement, amount | $				$ 66,000,000
Accelerated share repurchases, amount of payment to third party financial institution | $				$ 66,000,000
Stock repurchase program, number of shares repurchased during the period | shares			400,000	2,000,000
Accelerated share repurchases, percentage of shares expected to be repurchased				80.00%
Accelerated share repurchases, initial price paid per share	$ 26.01
Accelerated share repurchases, final price paid per share			$ 27.67
Cash dividend per share					0.23	$ 0.23
Class B Common Stock | Semi Annual Dividend
Stockholders Equity [Line Items]
Cash dividend per share					$ 0.23
Dividend payable period, month and year			2020-10		2020-10
Dividend record date					Sep. 02, 2020
Class A and Class B Common Stock
Stockholders Equity [Line Items]
Stock repurchase program, authorized amount | $								$ 2,000,000,000
Number of accelerated share repurchase | shares				2
Stock repurchase program, number of shares repurchased during the period | shares					10,000,000
Stock repurchase program, value of shares repurchased during the period | $					$ 270,000,000
Stock repurchase program, remaining buyback authorization amount | $			$ 1,100,000,000		$ 1,100,000,000
Class A and Class B Common Stock | Subsequent Event
Stockholders Equity [Line Items]
Stock repurchase program, number of shares repurchased during the period | shares		1,300,000
Stock repurchase program, value of shares repurchased during the period | $		$ 35,000,000

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Stockholders Equity (Schedule of Dividends Declared) (Details) - $ / shares	3 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Class A Common Stock
Dividends Payable [Line Items]
Cash dividend per share	$ 0.23	$ 0.23
Class B Common Stock
Dividends Payable [Line Items]
Cash dividend per share	$ 0.23	$ 0.23

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Equity-Based Compensation (Narrative) (Details) shares in Millions, $ in Millions	3 Months Ended
	Sep. 30, 2020 USD ($) Plan shares	Sep. 30, 2019 shares
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of equity plans | Plan	1
Total estimated compensation cost, not yet recognized, related to non-vested equity awards | $	$ 190
Stock Options
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock options outstanding	7.0	4.0
Restricted Stock Units
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock units granted	1.9
Stock units vested	3.1
Vesting period	3 years
Performance-Based Stock Options
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Vesting period	3 years
Stock units granted	5.0
Stock options expiration period	7 years
Minimum
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Weighted average future period unrecognized compensation cost related to equity based awards is expected to be recognized	1 year
Maximum
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Weighted average future period unrecognized compensation cost related to equity based awards is expected to be recognized	2 years

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Equity-Based Compensation (Summary of Equity-Based Compensation) (Details) - USD ($) $ in Millions	3 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
Equity-based compensation	$ 31	$ 32
Intrinsic value of all settled equity-based awards	81	3
Tax benefit on settled equity-based awards	$ 14	$ 0

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Commitments and Contingencies (Narrative) (Details) - USD ($) $ in Millions	Sep. 30, 2020	Jun. 30, 2020
U.K. Newspaper Matters Indemnity
Loss Contingencies [Line Items]
Liability related to indemnity	$ 60	$ 65

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Pension and Other Postretirement Benefits (Narrative) (Details) - USD ($) $ in Millions	3 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Compensation And Retirement Disclosure [Abstract]
Net periodic benefit cost	$ 17	$ 14

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Segment Information (Narrative) (Details) - Television Segment - US	3 Months Ended
	Sep. 30, 2020 Fullpowertvstation Duopoly
Segment Reporting Information [Line Items]
Full power broadcast television stations	29
Duopolies | Duopoly	11
FOX Network
Segment Reporting Information [Line Items]
Full power broadcast television stations	18
MyNetworkTV
Segment Reporting Information [Line Items]
Full power broadcast television stations	10
Independent Station
Segment Reporting Information [Line Items]
Full power broadcast television stations	1

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Segment Information (Reconciliation of Revenues and Segment EBITDA from Segments to Consolidated) (Details) - USD ($) $ in Millions		3 Months Ended
		Sep. 30, 2020	Sep. 30, 2019
Segment Reporting Information [Line Items]
Revenues		$ 2,717	$ 2,667
Amortization of cable distribution investments		(5)	(9)
Depreciation and amortization		(68)	(50)
Impairment and restructuring charges		(35)	(9)
Interest expense		(99)	(90)
Interest income		1	17
Other, net		519	(15)
Income before income tax expense		1,479	700
Income tax expense		(362)	(187)
Net income		1,117	513
Less: Net income attributable to noncontrolling interests	[1]	(11)	(14)
Net income attributable to Fox Corporation stockholders		1,106	499
Operating Segments | Cable Network Programming Segment
Segment Reporting Information [Line Items]
Revenues		1,325	1,285
Segment EBITDA		781	684
Depreciation and amortization		(13)	(13)
Operating Segments | Television Segment
Segment Reporting Information [Line Items]
Revenues		1,350	1,356
Segment EBITDA		457	251
Depreciation and amortization		(25)	(15)
Operating Segments | Other, Corporate and Eliminations Segment
Segment Reporting Information [Line Items]
Revenues		42	26
Segment EBITDA		(72)	(79)
Depreciation and amortization		$ (30)	$ (22)

[1] Net income attributable to noncontrolling interests includes $4 million and $9 million for the three months ended September 30, 2020 and 2019, respectively, relating to redeemable noncontrolling interests.

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Segment Information (Summary of Revenues by Segment by Component to Consolidated) (Details) - USD ($) $ in Millions	3 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Disaggregation Of Revenue [Line Items]
Revenues	$ 2,717	$ 2,667
Operating Segments | Cable Network Programming Segment
Disaggregation Of Revenue [Line Items]
Revenues	1,325	1,285
Operating Segments | Cable Network Programming Segment | Affiliate Fee
Disaggregation Of Revenue [Line Items]
Revenues	973	939
Operating Segments | Cable Network Programming Segment | Advertising
Disaggregation Of Revenue [Line Items]
Revenues	299	254
Operating Segments | Cable Network Programming Segment | Other
Disaggregation Of Revenue [Line Items]
Revenues	53	92
Operating Segments | Television Segment
Disaggregation Of Revenue [Line Items]
Revenues	1,350	1,356
Operating Segments | Television Segment | Affiliate Fee
Disaggregation Of Revenue [Line Items]
Revenues	560	455
Operating Segments | Television Segment | Advertising
Disaggregation Of Revenue [Line Items]
Revenues	670	787
Operating Segments | Television Segment | Other
Disaggregation Of Revenue [Line Items]
Revenues	120	114
Operating Segments | Other, Corporate and Eliminations Segment
Disaggregation Of Revenue [Line Items]
Revenues	$ 42	$ 26

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Segment Information (Narrative) (Details1) - Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2020-10-01 $ in Billions	3 Months Ended
	Sep. 30, 2020 USD ($)
Segment Reporting Information [Line Items]
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Explanation	revenues are expected to be recognized primarily over the next one to three years.
Revenue, Remaining Performance Obligation, Amount	$ 5.1
Minimum
Segment Reporting Information [Line Items]
Future Performance Obligation, Expected Timing of Satisfaction, Period	1 year
Maximum
Segment Reporting Information [Line Items]
Future Performance Obligation, Expected Timing of Satisfaction, Period	3 years

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Segment Information (Reconciliation of Depreciation and Amortization from Segments to Consolidated) (Details) - USD ($) $ in Millions	3 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Segment Reporting Information [Line Items]
Depreciation and amortization	$ 68	$ 50
Operating Segments | Cable Network Programming Segment
Segment Reporting Information [Line Items]
Depreciation and amortization	13	13
Operating Segments | Television Segment
Segment Reporting Information [Line Items]
Depreciation and amortization	25	15
Operating Segments | Other, Corporate and Eliminations Segment
Segment Reporting Information [Line Items]
Depreciation and amortization	$ 30	$ 22

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Segment Information (Reconciliation of Assets from Segments to Consolidated) (Details) - USD ($) $ in Millions		Sep. 30, 2020	Jun. 30, 2020
Segment Reporting Information [Line Items]
Total assets		$ 22,497	$ 21,750
Investments	[1]	755	618
Operating Segments | Cable Network Programming Segment
Segment Reporting Information [Line Items]
Total assets		2,622	2,591
Operating Segments | Television Segment
Segment Reporting Information [Line Items]
Total assets		7,703	7,054
Operating Segments | Other, Corporate and Eliminations Segment
Segment Reporting Information [Line Items]
Total assets		$ 11,417	$ 11,487

[1] Included investments accounted for at fair value on a recurring basis of $640 million and $531 million as of September 30, 2020 and June 30, 2020, respectively (See Note 4—Fair Value).

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Additional Financial Information (Narrative) (Details) - USD ($) $ in Millions	3 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Organization Consolidation And Presentation Of Financial Statements [Abstract]
Impairment and restructuring charges	$ 35	$ 9

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Additional Financial Information (Components of Other, Net) (Details) - USD ($) $ in Millions		3 Months Ended
		Sep. 30, 2020	Sep. 30, 2019
Organization Consolidation And Presentation Of Financial Statements [Abstract]
Transaction costs	[1]	$ 451	$ (45)
Net gains on investments in equity securities	[2]	121	49
Other		(53)	(19)
Total other, net		$ 519	$ (15)

[1] The transaction costs for the three months ended September 30, 2020 are primarily related to the partial settlement from Disney of $462 million related to the reimbursement of the Company’s prepayment of its share of the Divestiture Tax (See Note 1—Description of Business and Basis of Presentation). The transaction costs for the three months ended September 30, 2019 are primarily related to costs associated with the profits participants litigation (See Note 14—Commitments and Contingencies in the 2020 Form 10-K under the heading “Profits Participants Litigation”) and the Separation and the Distribution (See Note 1—Description of Business and Basis of Presentation in the 2020 Form 10-K under the heading “The Distribution”) and included retention related costs.

[2] Net gains on investments in equity securities for the three months ended September 30, 2020 included the gain related to the change in fair value of the Company’s investment in Flutter (See Note 4—Fair Value) and for the three months ended September 30, 2019 included the gains related to the changes in fair value of the Company’s investments in Roku, Inc. and The Stars Group Inc. (See Note 6—Fair Value in the 2020 Form 10-K).

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Additional Financial Information (Components of Other, Net) (Parenthetical) (Details) - USD ($) $ in Millions	3 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Organization Consolidation And Presentation Of Financial Statements [Abstract]
Settlement of Divestiture Tax prepayment	$ 462	$ 0

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Additional Financial Information (Components of Other Non-current Assets) (Details) - USD ($) $ in Millions		Sep. 30, 2020	Jun. 30, 2020
Organization Consolidation And Presentation Of Financial Statements [Abstract]
Investments	[1]	$ 755	$ 618
Operating lease ROU assets		505	539
Grantor Trust		260	247
Inventories, net		255	202
Other		165	195
Total other non-current assets		$ 1,940	$ 1,801

[1] Included investments accounted for at fair value on a recurring basis of $640 million and $531 million as of September 30, 2020 and June 30, 2020, respectively (See Note 4—Fair Value).

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Additional Financial Information (Components of Other Non-current Assets) (Parenthetical) (Details) - USD ($) $ in Millions	Sep. 30, 2020	Jun. 30, 2020
Organization Consolidation And Presentation Of Financial Statements [Abstract]
Investments, fair value	$ 640	$ 531

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Additional Financial Information (Components of Accounts Payable, Accrued Expenses and Other Current Liabilities) (Details) - USD ($) $ in Millions	Sep. 30, 2020	Jun. 30, 2020
Organization Consolidation And Presentation Of Financial Statements [Abstract]
Accrued expenses	$ 871	$ 907
Program rights payable	524	485
Deferred revenue	242	152
Operating lease liabilities	104	122
Other current liabilities	271	240
Total accounts payable, accrued expenses and other current liabilities	$ 2,012	$ 1,906

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Additional Financial Information (Components of Other Liabilities) (Details) - USD ($) $ in Millions	Sep. 30, 2020	Jun. 30, 2020
Organization Consolidation And Presentation Of Financial Statements [Abstract]
Accrued non-current pension/postretirement liabilities	$ 710	$ 709
Non-current operating lease liabilities	432	452
Other non-current liabilities	280	321
Total other liabilities	$ 1,422	$ 1,482

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Additional Financial Information (Supplemental Cash Flows Information) (Details) - USD ($) $ in Millions	3 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Supplemental cash flows information
Cash paid for interest	$ (169)	$ (171)
Cash paid for income taxes	$ (86)	$ (6)