UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended December 31, 2022

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________ to _________

Commission File Number 001-38776

FOX CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	83-1825597
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

1211 Avenue of the Americas
New York,	New York	10036
(Address of principal executive offices and Zip Code)

Registrant’s telephone number, including area code (212) 852-7000

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbols	Name of each exchange on which registered
Class A Common Stock, par value $0.01 per share	FOXA	The Nasdaq Global Select Market
Class B Common Stock, par value $0.01 per share	FOX	The Nasdaq Global Select Market

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	x	Accelerated filer	o
Non-accelerated filer	o	Smaller reporting company	o
Emerging growth company	o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

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

As of February 6, 2023, 296,917,233 shares of Class A Common Stock, par value $0.01 per share, and 237,644,354 shares of Class B Common Stock, par value $0.01 per share, were outstanding.

FOX CORPORATION

FORM 10-Q

TABLE OF CONTENTS

			Page
Part I. Financial Information
	Item 1.	Financial Statements
		Unaudited Consolidated Statements of Operations for the three and six months ended December 31, 2022 and 2021	1
		Unaudited Consolidated Statements of Comprehensive Income (Loss) for the three and six months ended December 31, 2022 and 2021	2
		Consolidated Balance Sheets as of December 31, 2022 (unaudited) and June 30, 2022 (audited)	3
		Unaudited Consolidated Statements of Cash Flows for the six months ended December 31, 2022 and 2021	4
		Unaudited Consolidated Statements of Equity for the three and six months ended December 31, 2022 and 2021	5
		Notes to the Unaudited Consolidated Financial Statements	6
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	29
	Item 4.	Controls and Procedures	30
Part II. Other Information
	Item 1.	Legal Proceedings	31
	Item 1A.	Risk Factors	31
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	31
	Item 3.	Defaults Upon Senior Securities	32
	Item 4.	Mine Safety Disclosures	32
	Item 5.	Other Information	32
	Item 6.	Exhibits	32
	Signature		33

FOX CORPORATION

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)

	For the three months ended December 31,				For the six months ended December 31,
	2022		2021		2022		2021
Revenues	$	4,605	$	4,441	$	7,797	$	7,486
Operating expenses	(3,528)		(3,667)		(5,184)		(5,238)
Selling, general and administrative	(550)		(468)		(998)		(883)
Depreciation and amortization	(103)		(93)		(202)		(172)
Interest expense, net	(60)		(97)		(128)		(194)
Other, net	73		(211)		(3)		(142)
Income (loss) before income tax (expense) benefit	437		(95)		1,282		857
Income tax (expense) benefit	(116)		22		(348)		(222)
Net income (loss)	321		(73)		934		635
Less: Net income attributable to noncontrolling interests	(8)		(12)		(16)		(19)
Net income (loss) attributable to Fox Corporation stockholders	$	313	$	(85)	$	918	$	616
EARNINGS (LOSS) PER SHARE DATA
Weighted average shares:
Basic	541		569		545		572
Diluted	543		573		547		575
Net income (loss) attributable to Fox Corporation stockholders per share:
Basic	$	0.58	$	(0.15)	$	1.68	$	1.08
Diluted	$	0.58	$	(0.15)	$	1.68	$	1.07

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

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FOX CORPORATION

UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(IN MILLIONS)

	For the three months ended December 31,				For the six months ended December 31,
	2022		2021		2022		2021
Net income (loss)	$	321	$	(73)	$	934	$	635
Other comprehensive income, net of tax:
Benefit plan adjustments and other	9		8		7		14
Other comprehensive income, net of tax	9		8		7		14
Comprehensive income (loss)	330		(65)		941		649
Less: Net income attributable to noncontrolling interests(a)	(8)		(12)		(16)		(19)
Comprehensive income (loss) attributable to Fox Corporation stockholders	$	322	$	(77)	$	925	$	630

(a) Net income attributable to noncontrolling interests includes $(5) million and $(3) million for the three months ended December 31, 2022 and 2021, respectively, and $(10) million and $(4) million for the six months ended December 31, 2022 and 2021, respectively, relating to redeemable noncontrolling interests.

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

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FOX CORPORATION

CONSOLIDATED BALANCE SHEETS

(IN MILLIONS, EXCEPT SHARE AND PER SHARE AMOUNTS)

	As of December 31, 2022		As of June 30, 2022
	(unaudited)		(audited)
ASSETS
Current assets
Cash and cash equivalents	$	4,058	$	5,200
Receivables, net	3,004		2,128
Inventories, net	1,300		791
Other	209		162
Total current assets	8,571		8,281
Non-current assets
Property, plant and equipment, net	1,680		1,682
Intangible assets, net	3,114		3,157
Goodwill	3,556		3,554
Deferred tax assets	3,283		3,440
Other non-current assets	2,922		2,071
Total assets	$	23,126	$	22,185
LIABILITIES AND EQUITY
Current liabilities
Accounts payable, accrued expenses and other current liabilities	$	2,543	$	2,296
Total current liabilities	2,543		2,296
Non-current liabilities
Borrowings	7,208		7,206
Other liabilities	1,503		1,120
Redeemable noncontrolling interests	196		188
Commitments and contingencies
Equity
Class A Common Stock(a)	3		3
Class B Common Stock(b)	2		3
Additional paid-in capital	8,836		9,098
Retained earnings	2,985		2,461
Accumulated other comprehensive loss	(219)		(226)
Total Fox Corporation stockholders’ equity	11,607		11,339
Noncontrolling interests	69		36
Total equity	11,676		11,375
Total liabilities and equity	$	23,126	$	22,185

(a) Class A Common Stock, $0.01 par value per share, 2,000,000,000 shares authorized, 297,918,978 shares and 307,496,876 shares issued and outstanding at par as of December 31, 2022 and June 30, 2022, respectively.

(b) Class B Common Stock, $0.01 par value per share, 1,000,000,000 shares authorized, 238,148,374 shares and 243,122,595 shares issued and outstanding at par as of December 31, 2022 and June 30, 2022, respectively.

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

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FOX CORPORATION

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

(IN MILLIONS)

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

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

4

FOX CORPORATION

UNAUDITED CONSOLIDATED STATEMENTS OF EQUITY

(IN MILLIONS)

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

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

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

5

FOX CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

Fox Corporation, a Delaware corporation (“FOX” or the “Company”), is a news, sports and entertainment company, which manages and reports its businesses in the following segments: Cable Network Programming, Television and Other, Corporate and Eliminations.

On October 14, 2022, the Company announced that its Board of Directors (the “Board”) had formed a special committee composed of independent members of the Board (the “Special Committee”) to begin exploring a potential combination with News Corporation. On January 24, 2023, the Company announced that the Board had received a letter from K. Rupert Murdoch withdrawing the proposal to explore the potential combination and, as a result of this action, the Special Committee was dissolved.

The accompanying Unaudited Consolidated Financial Statements of FOX have been prepared in accordance with United States (“U.S.”) generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. In the opinion of management, all adjustments consisting only of normal recurring adjustments necessary for a fair presentation have been reflected in these Unaudited Consolidated Financial Statements. Operating results for the interim periods presented are not necessarily indicative of the results that may be expected for the fiscal year ending June 30, 2023.

The preparation of the Company’s Unaudited Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts that are reported in the Unaudited Consolidated Financial Statements and accompanying disclosures. Although these estimates are based on management’s best knowledge of current events and actions that the Company may undertake in the future, actual results may differ from those estimates.

These interim Unaudited Consolidated Financial Statements and notes thereto should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2022 as filed with the Securities and Exchange Commission on August 12, 2022 (the “2022 Form 10-K”).

All significant intercompany transactions and accounts within the Company’s consolidated businesses have been eliminated. Investments in and advances to entities or joint ventures in which the Company has significant influence, but less than a controlling financial interest, are accounted for using the equity method. Significant influence generally exists when the Company owns an interest between 20% and 50%. Equity securities in which the Company has no significant influence (generally less than a 20% ownership interest) with readily determinable fair values are accounted for at fair value based on quoted market prices. Equity securities without readily determinable fair values are accounted for either at fair value or using the measurement alternative method, which is at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. All gains and losses on investments in equity securities are recognized in the Unaudited Consolidated Statements of Operations.

The Company’s fiscal year ends on June 30 (“fiscal”) of each year. Certain fiscal 2022 amounts have been reclassified to conform to the fiscal 2023 presentation.

The unaudited and audited consolidated financial statements are referred to as the “Financial Statements” herein. The unaudited consolidated statements of operations are referred to as the “Statements of Operations” herein. The unaudited and audited consolidated balance sheets are referred to as the “Balance Sheets” herein.

Recently Adopted, Recently Issued Accounting Guidance and Other

Inflation Reduction Act

On August 16, 2022, the U.S. government enacted the Inflation Reduction Act which, among other changes, imposes a 15% corporate alternative minimum tax (“CAMT”) and a 1% excise tax on stock repurchases. Once subject to the CAMT, a taxpayer will compute both its CAMT liability and its regular federal

6

FOX CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

tax liability and pay the higher of the two. To the extent that the CAMT liability exceeds the regular federal tax liability, a taxpayer will receive a credit (“CAMT credit”) which can be used against its regular federal tax liability in the future when the taxpayer is no longer subject to the CAMT. The CAMT credit does not expire. The CAMT is effective for tax years beginning after December 31, 2022, which means it will be applicable to the Company starting in fiscal 2024. The excise tax on stock repurchases applies to stock repurchases occurring after December 31, 2022.

The Company continues to evaluate the impact the CAMT will have on its financial statements but expects that, when applicable, the Company will be subject to the CAMT. The CAMT would impact the timing of the cash tax benefit the Company receives from the amortization of the additional tax basis received as a result of the Transaction Tax (as defined in Note 1—Description of Business and Basis of Presentation in the 2022 Form 10-K). This change in timing would result in an increase to its annual cash tax liability which could be material. However, as noted above, if the Company pays CAMT it will receive a CAMT credit that can be carried forward indefinitely and applied against its regular federal tax liability in future years. The Company will be subject to the excise tax on stock repurchases occurring after December 31, 2022, but the impact to the financial statements is not expected to be material.

NOTE 2. ACQUISITIONS, DISPOSALS AND OTHER TRANSACTIONS

The Company’s acquisitions support the Company’s strategy to strengthen its core brands, grow its digital businesses and selectively enhance production capabilities for its digital and linear platforms. There were no acquisitions during the three and six months ended December 31, 2022. During the six months ended December 31, 2021, the Company made acquisitions, primarily consisting of three entertainment production companies, for total cash consideration of approximately $230 million. The revenues and Segment EBITDA (as defined in Note 10—Segment Information) included within the Company’s consolidated results of operations associated with these companies were not material individually or in the aggregate.

NOTE 3. INVENTORIES, NET

The Company’s inventories were comprised of the following:

	As of December 31, 2022		As of June 30, 2022
	(in millions)
Licensed programming, including prepaid sports rights	$	1,534	$	975
Owned programming	446		337
Total inventories, net	1,980		1,312
Less: current portion of inventories, net	(1,300)		(791)
Total non-current inventories, net	$	680	$	521
Owned programming
Released	$	253	$	205
In-process and other	193		132
Total	$	446	$	337

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FOX CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

The following table presents the aggregate amortization expense related to Inventories, net included in Operating expenses in the Statements of Operations:

	For the three months ended December 31,				For the six months ended December 31,
	2022		2021		2022		2021
	(in millions)				(in millions)
Amortization expense	$	2,566	$	2,640	$	3,420	$	3,441

NOTE 4. FAIR VALUE

Fair value measurements are required to be disclosed using a three-tiered fair value hierarchy which distinguishes market participant assumptions into the following categories: (i) inputs that are quoted prices in active markets (“Level 1”); (ii) inputs other than quoted prices included within Level 1 that are observable, including quoted prices for similar assets or liabilities (“Level 2”); and (iii) inputs that require the entity to use its own assumptions about market participant assumptions (“Level 3”).

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

	Fair value measurements
	As of December 31, 2022
	Total		Level 1			Level 2		Level 3
	(in millions)
Investments in equity securities	$	625	$	625	(a)	$	—	$	—
Redeemable noncontrolling interests	(196)		—			—		(196)		(b)
Total	$	429	$	625		$	—	$	(196)

	Fair value measurements
	As of June 30, 2022
	Total		Level 1			Level 2		Level 3
	(in millions)
Investments in equity securities	$	435	$	435	(a)	$	—	$	—
Redeemable noncontrolling interests	(188)		—			—		(188)		(b)
Total	$	247	$	435		$	—	$	(188)

(a) The investments categorized as Level 1 primarily represent an investment in equity securities of Flutter Entertainment plc (“Flutter”) with a readily determinable fair value (See Note 3—Acquisitions, Disposals and Other Transactions in the 2022 Form 10-K under the heading “Flutter” for additional information).

(b) The Company utilizes both the market and income approach valuation techniques for its Level 3 fair value measures. Inputs to such measures could include observable market data obtained from independent sources such as broker quotes and recent market transactions for similar assets. It is the Company’s policy to maximize the use of observable inputs in the measurement of its Level 3 fair value measurements. To the extent observable inputs are not available, the Company utilizes unobservable inputs based upon the assumptions market participants would use in valuing the redeemable noncontrolling interests. Examples of utilized unobservable inputs are future cash flows and long-term growth rates.

In connection with the combination of The Stars Group Inc. and Flutter in May 2020, FOX Sports received the right to acquire an 18.6% equity interest in FanDuel Group (“FanDuel”), a majority-owned subsidiary of Flutter, at a price set forth in the relevant agreement (structured as a 10-year option), which has been the subject of arbitration proceedings. In January 2023, the U.S. District Court for the Southern District of New York

8

FOX CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

confirmed and entered the arbitrator’s ruling affirming FOX Sports’ 10-year call option expiring in December 2030 to acquire 18.6% of FanDuel for $3.72 billion, with a 5% annual escalator. FOX has no obligation to commit capital towards this opportunity unless and until it exercises the option. In addition, Flutter cannot pursue an initial public offering for FanDuel without FOX’s consent or approval from the arbitrator.

Redeemable Noncontrolling Interests

The redeemable noncontrolling interests recorded are put rights held by minority shareholders in Credible Labs Inc. (“Credible”) and an entertainment production company.

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

	For the three months ended December 31,				For the six months ended December 31,
	2022		2021		2022		2021
	(in millions)
Beginning of period	$	(193)	$	(302)	$	(188)	$	(261)
Acquisitions(a)	—		(13)		—		(58)
Net loss	5		3		10		4
Distributions	—		—		—		3
Accretion and other(b)	(8)		140		(18)		140
End of period	$	(196)	$	(172)	$	(196)	$	(172)

(a)	The increase for the six months ended December 31, 2021 was primarily due to the acquisition of an entertainment production company.
(b)	As a result of the expiration of the sports network minority shareholder’s final put right during the three months ended December 31, 2021, approximately $110 million was reclassified into equity.

The Credible minority put right will become exercisable in fiscal 2025. The put right held by the entertainment production company’s minority shareholder will become exercisable in fiscal 2027.

Financial Instruments

The carrying value of the Company’s financial instruments exclusive of borrowings, such as cash and cash equivalents, receivables, payables and investments, accounted for using the measurement alternative method, approximates fair value.

	As of December 31, 2022		As of June 30, 2022
	(in millions)
Borrowings
Fair value	$	6,822	$	7,084
Carrying value	$	7,208	$	7,206

Fair value is generally determined by reference to market values resulting from trading on a national securities exchange or in an over-the-counter market (a Level 1 measurement).

Concentrations of Credit Risk

Cash and cash equivalents are maintained with several financial institutions. The Company has deposits held with banks that exceed the amount of insurance provided on such deposits. Generally, these deposits may

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FOX CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

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

Generally, the Company does not require collateral to secure receivables. As of December 31, 2022 and June 30, 2022, the Company had no customers that accounted for 10% or more of the Company’s receivables.

NOTE 5. BORROWINGS

Borrowings include senior notes (See Note 9—Borrowings in the 2022 Form 10-K under the heading “Public Debt – Senior Notes Issued”). In addition, the Company is party to a credit agreement providing a $1.0 billion unsecured revolving credit facility with a sub-limit of $150 million available for the issuance of letters of credit and a maturity date of March 2024 (See Note 9—Borrowings in the 2022 Form 10-K under the heading “Revolving Credit Agreement”). As of December 31, 2022, there were no borrowings outstanding under the revolving credit agreement.

NOTE 6. STOCKHOLDERS’ EQUITY

Stock Repurchase Program

The Board has authorized a $4 billion stock repurchase program under which the Company can repurchase Class A Common Stock (the “Class A Common Stock”) and Class B Common Stock (the “Class B Common Stock” and, together with the Class A Common Stock, the “Common Stock”). The program has no time limit and may be modified, suspended or discontinued at any time.

During the six months ended December 31, 2022, the Company repurchased approximately 16 million shares of Common Stock for approximately $500 million.

Repurchased shares are retired and reduce the number of shares issued and outstanding. The Company allocates the amount of the repurchase price over par value between additional paid-in capital and retained earnings.

As of December 31, 2022, the Company’s remaining stock repurchase authorization was approximately $900 million. Subsequent to December 31, 2022, the Company repurchased approximately 1.6 million shares of Common Stock for approximately $50 million and the Company announced that the Board has authorized incremental stock repurchases of an additional $3 billion of Common Stock. With this increase, the Company’s total stock repurchase authorization is now $7 billion.

Dividends

The following table summarizes the dividends declared per share on both the Company’s Class A Common Stock and Class B Common Stock:

	For the three months ended December 31,				For the six months ended December 31,
	2022		2021		2022		2021
Cash dividend per share	$	—	$	—	$	0.25	$	0.24

Subsequent to December 31, 2022, the Company declared a semi-annual dividend of $0.25 per share on both the Class A Common Stock and the Class B Common Stock. The dividend declared is payable on March 29, 2023 with a record date for determining dividend entitlements of March 1, 2023.

NOTE 7. EQUITY-BASED COMPENSATION

The Company has one equity plan, the Fox Corporation 2019 Shareholder Alignment Plan (See Note 12—Equity-Based Compensation in the 2022 Form 10-K).

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FOX CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

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

	For the three months ended December 31,				For the six months ended December 31,
	2022		2021		2022		2021
	(in millions)
Equity-based compensation	$	25	$	32	$	32	$	47
Intrinsic value of all settled equity-based awards	$	—	$	18	$	76	$	94
Tax benefit on settled equity-based awards	$	(1)	$	4	$	13	$	21

The Company’s equity-based awards are settled in Class A Common Stock. As of December 31, 2022, the Company’s total estimated compensation cost, not yet recognized, related to non-vested equity awards held by the Company’s employees was approximately $120 million and is expected to be recognized over a weighted average period between one and two years.

As of December 31, 2022 and 2021, the Company had approximately 5 million and 6 million stock options outstanding, respectively. The computation of diluted earnings per share did not include stock options outstanding during each period presented if their inclusion would have been antidilutive.

Awards Vested and Granted

Restricted Stock Units

During the six months ended December 31, 2022 and 2021, approximately 1.5 million and 2.4 million restricted stock units (“RSUs”) vested and approximately 2.0 million and 1.7 million RSUs were granted, respectively. These RSUs generally vest in equal annual installments over a three-year period subject to participants’ continued employment with the Company.

Performance-Based Stock Options

During the six months ended December 31, 2022 and 2021, the Company granted approximately 4 million performance-based stock options, in each period, which will vest in full at the end of a three-year performance period if the market condition is met, and have a term of seven years thereafter.

NOTE 8. COMMITMENTS AND CONTINGENCIES

Commitments

The Company has commitments under certain firm contractual arrangements (“firm commitments”) to make future payments. These firm commitments secure the future rights to various assets and services to be used in the normal course of operations. The total firm commitments and future debt payments as of December 31, 2022 and June 30, 2022 were approximately $39 billion and $42 billion, respectively. The decrease from June 30, 2022 was primarily due to sports programming rights payments.

In December 2022, the Company renewed the operating lease for its corporate headquarters at 1211 Avenue of the Americas in New York through fiscal 2042. In connection with this extension, the Company recorded additional operating lease assets and liabilities of approximately $540 million as of December 31, 2022.

Contingencies

FOX News

The Company’s FOX News business and certain of its current and former employees have been subject to allegations of sexual harassment and discrimination on the basis of sex and race. The Company has resolved many of these claims and is contesting other claims in litigation. The Company has also received regulatory and investigative inquiries relating to these matters. To date, none of the amounts paid in settlements

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FOX CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

or reserved for pending or future claims is material, individually or in the aggregate, to the Company. The amount of additional liability, if any, that may result from these or related matters cannot be estimated at this time. However, the Company does not currently anticipate that the ultimate resolution of any such pending matters will have a material adverse effect on its business, financial condition, results of operations or cash flows.

U.K. Newspaper Matters Indemnity

In connection with the separation of Twenty-First Century Fox, Inc. (“21CF”) and News Corporation in June 2013 (the “21CF News Corporation Separation”), 21CF agreed to indemnify News Corporation, on an after-tax basis, for payments made after the 21CF News Corporation Separation arising out of civil claims and investigations relating to phone hacking, illegal data access and inappropriate payments to public officials that occurred at subsidiaries of News Corporation before the 21CF News Corporation Separation, as well as legal and professional fees and expenses paid in connection with the related criminal matters, other than fees, expenses and costs relating to employees who are not (i) directors, officers or certain designated employees or (ii) with respect to civil matters, co-defendants with News Corporation (the “U.K. Newspaper Matters Indemnity”). In accordance with the Separation Agreement (as defined in Note 1—Description of Business and Basis of Presentation in the 2022 Form 10-K under the heading “The Distribution”), the Company assumed certain costs and liabilities related to the U.K. Newspaper Matters Indemnity. The liability recorded in the Balance Sheets related to the indemnity was approximately $115 million and $65 million as of December 31, 2022 and June 30, 2022, respectively. The increase in the liability recorded was attributable to an increase in the number of civil claims submitted in September 2022 in advance of the September 30, 2022 cutoff date set by the judge for this phase of the litigation.

Defamation and Disparagement Claims

From time to time, the Company and its news businesses, including FOX News Media and the FOX Television Stations, and their employees are subject to lawsuits alleging defamation or disparagement. These include lawsuits filed by Smartmatic USA Corp. and certain of its affiliates (collectively, “Smartmatic”) in February 2021 and Dominion Voting Systems, Inc. and certain of its affiliates (collectively, “Dominion”) in March 2021. The Dominion lawsuits against the Company and its subsidiary, FOX News Media, have been consolidated for trial, which is scheduled to begin in April 2023. The Company believes these lawsuits, including the Smartmatic and Dominion matters, are without merit and intends to defend against them vigorously, including through any appeals. To date, none of the amounts the Company has paid in settlements of defamation or disparagement claims or reserved for pending or future claims is material, individually or in the aggregate, to the Company. The amount of additional liability, if any, that may result from these or related matters cannot be estimated at this time. However, the Company does not currently anticipate that the ultimate resolution of any such pending matters will have a material adverse effect on its business, financial condition, results of operations or cash flows.

Other

The Company establishes an accrued liability for legal claims and indemnification claims when the Company determines that a loss is both probable and the amount of the loss can be reasonably estimated. Once established, accruals are adjusted from time to time, as appropriate, in light of additional information. The amount of any loss ultimately incurred in relation to matters for which an accrual has been established may be higher or lower than the amounts accrued for such matters. Any fees, expenses, fines, penalties, judgments or settlements which might be incurred by the Company in connection with the various proceedings could affect the Company’s results of operations and financial condition. For the contingencies disclosed above for which there is at least a reasonable possibility that a loss may be incurred, other than the accrual provided, the Company was unable to estimate the amount of loss or range of loss.

The Company’s operations are subject to tax primarily in various domestic jurisdictions and as a matter of course, the Company is regularly audited by federal and state tax authorities. The Company believes it has appropriately accrued for the expected outcome of all pending tax matters and does not currently anticipate that the ultimate resolution of pending tax matters will have a material adverse effect on its consolidated financial condition, future results of operations or liquidity. Each member of the 21CF consolidated group, which includes

12

FOX CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

21CF, the Company (prior to the Distribution (as defined in Note 1—Description of Business and Basis of Presentation in the 2022 Form 10-K under the heading “The Distribution”)) and 21CF’s other subsidiaries, is jointly and severally liable for the U.S. federal income and, in certain jurisdictions, state tax liabilities of each other member of the consolidated group. Consequently, the Company could be liable in the event any such liability is incurred, and not discharged, by any other member of the 21CF consolidated group. The tax matters agreement entered into in connection with the Separation (as defined in Note 1—Description of Business and Basis of Presentation in the 2022 Form 10-K under the heading “The Distribution”) requires 21CF and/or The Walt Disney Company to indemnify the Company for any such liability. Disputes or assessments could arise during future audits by the Internal Revenue Service in amounts that the Company cannot quantify.

NOTE 9. PENSION AND OTHER POSTRETIREMENT BENEFITS

The Company participates in and/or sponsors various pension, savings and postretirement benefit plans. Pension plans and postretirement benefit plans are closed to new participants with the exception of a small group covered by collective bargaining agreements. The net periodic benefit cost was $16 million and $13 million for the three months ended December 31, 2022 and 2021, respectively, and $32 million and $27 million for the six months ended December 31, 2022 and 2021, respectively.

NOTE 10. SEGMENT INFORMATION

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

•Cable Network Programming, which produces and licenses news and sports content distributed through traditional cable television systems, direct broadcast satellite operators and telecommunication companies (“traditional MVPDs”), virtual multi-channel video programming distributors (“virtual MVPDs”) and other digital platforms, primarily in the U.S.

•Television, which produces, acquires, markets and distributes programming through the FOX broadcast network, advertising supported video-on-demand (“AVOD”) service TUBI, 29 full power broadcast television stations, including 11 duopolies, and other digital platforms, primarily in the U.S. Eighteen of the broadcast television stations are affiliated with the FOX Network, 10 are affiliated with MyNetworkTV and one is an independent station.

•Other, Corporate and Eliminations, which principally consists of the FOX Studio Lot, Credible, corporate overhead costs and intracompany eliminations. The FOX Studio Lot, located in Los Angeles, California, provides television and film production services along with office space, studio operation services and includes all operations of the facility. Credible is a U.S. consumer finance marketplace.

The Company’s operating segments have been determined in accordance with the Company’s internal management structure, which is organized based on operating activities. The Company evaluates performance based upon several factors, of which the primary financial measure is segment operating income before depreciation and amortization, or Segment EBITDA. Due to the integrated nature of these operating segments, estimates and judgments are made in allocating certain assets, revenues and expenses.

Segment EBITDA is defined as Revenues less Operating expenses and Selling, general and administrative expenses. Segment EBITDA does not include: Amortization of cable distribution investments, Depreciation and amortization, Impairment and restructuring charges, Interest expense, net, Other, net and Income tax expense. Management believes that Segment EBITDA is an appropriate measure for evaluating the operating performance of the Company’s business segments because it is the primary measure used by the Company’s chief operating decision maker to evaluate the performance of and allocate resources to the Company’s businesses.

13

FOX CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

The following tables set forth the Company’s Revenues and Segment EBITDA for the three and six months ended December 31, 2022 and 2021:

	For the three months ended December 31,				For the six months ended December 31,
	2022		2021		2022		2021
	(in millions)
Revenues
Cable Network Programming	$	1,632	$	1,638	$	3,063	$	3,054
Television	2,934		2,759		4,648		4,340
Other, Corporate and Eliminations	39		44		86		92
Total revenues	$	4,605	$	4,441	$	7,797	$	7,486
Segment EBITDA
Cable Network Programming	$	353	$	668	$	1,095	$	1,442
Television	256		(273)		665		86
Other, Corporate and Eliminations	(78)		(85)		(137)		(154)
Amortization of cable distribution investments	(4)		(4)		(8)		(9)
Depreciation and amortization	(103)		(93)		(202)		(172)
Interest expense, net	(60)		(97)		(128)		(194)
Other, net	73		(211)		(3)		(142)
Income (loss) before income tax (expense) benefit	437		(95)		1,282		857
Income tax (expense) benefit	(116)		22		(348)		(222)
Net income (loss)	321		(73)		934		635
Less: Net income attributable to noncontrolling interests	(8)		(12)		(16)		(19)
Net income (loss) attributable to Fox Corporation stockholders	$	313	$	(85)	$	918	$	616

Revenues by Segment by Component

	For the three months ended December 31,				For the six months ended December 31,
	2022		2021		2022		2021
	(in millions)
Cable Network Programming
Affiliate fee	$	1,026	$	1,039	$	2,055	$	2,065
Advertising	451		454		767		765
Other	155		145		241		224
Total Cable Network Programming revenues	1,632		1,638		3,063		3,054
Television
Advertising	2,052		1,954		2,957		2,773
Affiliate fee	686		649		1,368		1,290
Other	196		156		323		277
Total Television revenues	2,934		2,759		4,648		4,340
Other, Corporate and Eliminations	39		44		86		92
Total revenues	$	4,605	$	4,441	$	7,797	$	7,486

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FOX CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

	For the three months ended December 31,				For the six months ended December 31,
	2022		2021		2022		2021
	(in millions)
Depreciation and amortization
Cable Network Programming	$	17	$	17	$	34	$	27
Television	30		28		59		54
Other, Corporate and Eliminations	56		48		109		91
Total depreciation and amortization	$	103	$	93	$	202	$	172

	As of December 31, 2022		As of June 30, 2022
	(in millions)
Assets
Cable Network Programming	$	2,753	$	2,682
Television	9,493		7,915
Other, Corporate and Eliminations	10,108		11,010
Investments	772		578
Total assets	$	23,126	$	22,185

NOTE 11. ADDITIONAL FINANCIAL INFORMATION

Interest Expense, net

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

	For the three months ended December 31,				For the six months ended December 31,
	2022		2021		2022		2021
	(in millions)
Interest expense	$	(89)	$	(98)	$	(176)	$	(195)