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Cover and table of contents
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 March 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, 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 Act). Yes ☐ No x
As of May 6, 2022, 311,683,994 shares of Class A Common Stock, par value $0.01 per share, and 245,065,381 shares of Class B Common Stock, par value $0.01 per share, were outstanding.
FOX CORPORATION
FORM 10-Q
TABLE OF CONTENTS
FOX CORPORATION
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
| For the three months ended March 31, | For the nine months ended March 31, | ||||||||||||||||||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||||||||||||||
| Revenues | $ | 3,455 | $ | 3,215 | $ | 10,941 | $ | 10,019 | |||||||||||||||||||||||||||
| Operating expenses | (2,164) | (1,885) | (7,402) | (6,399) | |||||||||||||||||||||||||||||||
| Selling, general and administrative | (485) | (437) | (1,368) | (1,267) | |||||||||||||||||||||||||||||||
| Depreciation and amortization | (92) | (78) | (264) | (216) | |||||||||||||||||||||||||||||||
| Impairment and restructuring charges | — | — | — | (35) | |||||||||||||||||||||||||||||||
| Interest expense, net | (91) | (98) | (285) | (293) | |||||||||||||||||||||||||||||||
| Other, net | (233) | 61 | (375) | 752 | |||||||||||||||||||||||||||||||
| Income before income tax expense | 390 | 778 | 1,247 | 2,561 | |||||||||||||||||||||||||||||||
| Income tax expense | (100) | (196) | (322) | (632) | |||||||||||||||||||||||||||||||
| Net income | 290 | 582 | 925 | 1,929 | |||||||||||||||||||||||||||||||
| Less: Net income attributable to noncontrolling interests | (7) | (15) | (26) | (32) | |||||||||||||||||||||||||||||||
| Net income attributable to Fox Corporation stockholders | $ | 283 | $ | 567 | $ | 899 | $ | 1,897 | |||||||||||||||||||||||||||
| EARNINGS PER SHARE DATA | |||||||||||||||||||||||||||||||||||
| Weighted average shares: | |||||||||||||||||||||||||||||||||||
| Basic | 563 | 589 | 569 | 595 | |||||||||||||||||||||||||||||||
| Diluted | 567 | 593 | 573 | 598 | |||||||||||||||||||||||||||||||
| Net income attributable to Fox Corporation stockholders per share: | |||||||||||||||||||||||||||||||||||
| Basic | $ | 0.50 | $ | 0.96 | $ | 1.58 | $ | 3.19 | |||||||||||||||||||||||||||
| Diluted | $ | 0.50 | $ | 0.96 | $ | 1.57 | $ | 3.17 |
The accompanying notes are an integral part of these Unaudited Consolidated Financial Statements.
FOX CORPORATION
UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(IN MILLIONS)
| For the three months ended March 31, | For the nine months ended March 31, | ||||||||||||||||||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||||||||||||||
| Net income | $ | 290 | $ | 582 | $ | 925 | $ | 1,929 | |||||||||||||||||||||||||||
| Other comprehensive income, net of tax: | |||||||||||||||||||||||||||||||||||
| Benefit plan adjustments and other | 3 | 9 | 17 | 25 | |||||||||||||||||||||||||||||||
| Other comprehensive income, net of tax | 3 | 9 | 17 | 25 | |||||||||||||||||||||||||||||||
| Comprehensive income | 293 | 591 | 942 | 1,954 | |||||||||||||||||||||||||||||||
| Less: Net income attributable to noncontrolling interests(a) | (7) | (15) | (26) | (32) | |||||||||||||||||||||||||||||||
| Comprehensive income attributable to Fox Corporation stockholders | $ | 286 | $ | 576 | $ | 916 | $ | 1,922 |
| (a) | Net income attributable to noncontrolling interests includes $(5) million and $5 million for the three months ended March 31, 2022 and 2021, respectively, and $(9) million and $13 million for the nine months ended March 31, 2022 and 2021, respectively, relating to redeemable noncontrolling interests. |
The accompanying notes are an integral part of these Unaudited Consolidated Financial Statements.
FOX CORPORATION
CONSOLIDATED BALANCE SHEETS
(IN MILLIONS, EXCEPT SHARE AND PER SHARE AMOUNTS)
| As of March 31, 2022 | As of June 30, 2021 | ||||||||||
| (unaudited) | (audited) | ||||||||||
| ASSETS | |||||||||||
| Current assets | |||||||||||
| Cash and cash equivalents | $ | 4,634 | $ | 5,886 | |||||||
| Receivables, net | 2,338 | 2,029 | |||||||||
| Inventories, net | 786 | 729 | |||||||||
| Other | 158 | 105 | |||||||||
| Total current assets | 7,916 | 8,749 | |||||||||
| Non-current assets | |||||||||||
| Property, plant and equipment, net | 1,646 | 1,708 | |||||||||
| Intangible assets, net | 3,176 | 3,154 | |||||||||
| Goodwill | 3,560 | 3,435 | |||||||||
| Deferred tax assets | 3,619 | 3,822 | |||||||||
| Other non-current assets | 2,099 | 2,058 | |||||||||
| Total assets | $ | 22,016 | $ | 22,926 | |||||||
| LIABILITIES AND EQUITY | |||||||||||
| Current liabilities | |||||||||||
| Borrowings | $ | — | $ | 749 | |||||||
| Accounts payable, accrued expenses and other current liabilities | 2,121 | 2,253 | |||||||||
| Total current liabilities | 2,121 | 3,002 | |||||||||
| Non-current liabilities | |||||||||||
| Borrowings | 7,205 | 7,202 | |||||||||
| Other liabilities | 1,297 | 1,336 | |||||||||
| Redeemable noncontrolling interests | 175 | 261 | |||||||||
| Commitments and contingencies | |||||||||||
| Equity | |||||||||||
| Class A common stock(a) | 3 | 3 | |||||||||
| Class B common stock(b) | 3 | 3 | |||||||||
| Additional paid-in capital | 9,195 | 9,453 | |||||||||
| Retained earnings | 2,300 | 1,982 | |||||||||
| Accumulated other comprehensive loss | (301) | (318) | |||||||||
| Total Fox Corporation stockholders' equity | 11,200 | 11,123 | |||||||||
| Noncontrolling interests | 18 | 2 | |||||||||
| Total equity | 11,218 | 11,125 | |||||||||
| Total liabilities and equity | $ | 22,016 | $ | 22,926 |
| (a) | Class A common stock, $0.01 par value per share, 2,000,000,000 shares authorized, 312,586,563 shares and 324,361,864 shares issued and outstanding at par as of March 31, 2022 and June 30, 2021, respectively. |
| (b) | Class B common stock, $0.01 par value per share, 1,000,000,000 shares authorized, 245,544,417 shares and 251,821,556 shares issued and outstanding at par as of March 31, 2022 and June 30, 2021, respectively. |
The accompanying notes are an integral part of these Unaudited Consolidated Financial Statements.
FOX CORPORATION
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN MILLIONS)
| For the nine months ended March 31, | |||||||||||
| 2022 | 2021 | ||||||||||
| OPERATING ACTIVITIES | |||||||||||
| Net income | $ | 925 | $ | 1,929 | |||||||
| Adjustments to reconcile net income to cash provided by operating activities | |||||||||||
| Depreciation and amortization | 264 | 216 | |||||||||
| Amortization of cable distribution investments | 14 | 17 | |||||||||
| Impairment and restructuring charges | — | 35 | |||||||||
| Equity-based compensation | 75 | 112 | |||||||||
| Other, net | 375 | (752) | |||||||||
| Deferred income taxes | 195 | 528 | |||||||||
| Change in operating assets and liabilities, net of acquisitions and dispositions | |||||||||||
| Receivables and other assets | (309) | (382) | |||||||||
| Inventories net of program rights payable | (156) | 257 | |||||||||
| Accounts payable and accrued expenses | (205) | 88 | |||||||||
| Other changes, net | (227) | (182) | |||||||||
| Net cash provided by operating activities | 951 | 1,866 | |||||||||
| INVESTING ACTIVITIES | |||||||||||
| Property, plant and equipment | (191) | (333) | |||||||||
| Acquisitions, net of cash acquired | (243) | — | |||||||||
| Proceeds from dispositions, net | 82 | 93 | |||||||||
| Purchase of investments | (28) | (86) | |||||||||
| Other investing activities, net | (6) | (3) | |||||||||
| Net cash used in investing activities | (386) | (329) | |||||||||
| FINANCING ACTIVITIES | |||||||||||
| Repayment of borrowings | (750) | — | |||||||||
| Repurchase of shares | (748) | (713) | |||||||||
| Non-operating cash flows from The Walt Disney Company | — | 113 | |||||||||
| Settlement of Divestiture Tax Prepayment | — | 462 | |||||||||
| Dividends paid and distributions | (295) | (182) | |||||||||
| Purchase of subsidiary noncontrolling interest | — | (67) | |||||||||
| Other financing activities, net | (24) | (30) | |||||||||
| Net cash used in financing activities | (1,817) | (417) | |||||||||
| Net (decrease) increase in cash and cash equivalents | (1,252) | 1,120 | |||||||||
| Cash and cash equivalents, beginning of year | 5,886 | 4,645 | |||||||||
| Cash and cash equivalents, end of period | $ | 4,634 | $ | 5,765 |
The accompanying notes are an integral part of these Unaudited Consolidated Financial Statements.
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, December 31, 2021 | 317 | $ | 3 | 248 | $ | 3 | $ | 9,265 | $ | 2,308 | $ | (304) | $ | 11,275 | $ | 15 | $ | 11,290 | |||||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | 283 | — | 283 | 12 | 295 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income | — | — | — | — | — | — | 3 | 3 | — | 3 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Dividends | — | — | — | — | — | (135) | — | (135) | — | (135) | |||||||||||||||||||||||||||||||||||||||||||||||||
| Shares repurchased | (4) | — | (2) | — | (104) | (147) | — | (251) | — | (251) | |||||||||||||||||||||||||||||||||||||||||||||||||
| Other | — | — | — | — | 34 | (9) | — | 25 | (9) | 16 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Balance, March 31, 2022 | 313 | $ | 3 | 246 | $ | 3 | $ | 9,195 | $ | 2,300 | $ | (301) | $ | 11,200 | $ | 18 | $ | 11,218 | |||||||||||||||||||||||||||||||||||||||||
| Balance, December 31, 2020 | 335 | $ | 3 | 257 | $ | 3 | $ | 9,655 | $ | 1,657 | $ | (401) | $ | 10,917 | $ | 4 | $ | 10,921 | |||||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | 567 | — | 567 | 10 | 577 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income | — | — | — | — | — | — | 9 | 9 | — | 9 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Dividends | — | — | — | — | — | (134) | — | (134) | — | (134) | |||||||||||||||||||||||||||||||||||||||||||||||||
| Shares repurchased | (6) | — | (3) | — | (146) | (160) | — | (306) | — | (306) | |||||||||||||||||||||||||||||||||||||||||||||||||
| Other | — | — | — | — | 46 | (18) | — | 28 | (11) | 17 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Balance, March 31, 2021 | 329 | $ | 3 | 254 | $ | 3 | $ | 9,555 | $ | 1,912 | $ | (392) | $ | 11,081 | $ | 3 | $ | 11,084 | |||||||||||||||||||||||||||||||||||||||||
| Balance, June 30, 2021 | 324 | $ | 3 | 252 | $ | 3 | $ | 9,453 | $ | 1,982 | $ | (318) | $ | 11,123 | $ | 2 | $ | 11,125 | |||||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | 899 | — | 899 | 35 | 934 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income | — | — | — | — | — | — | 17 | 17 | — | 17 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Dividends | — | — | — | — | — | (273) | — | (273) | — | (273) | |||||||||||||||||||||||||||||||||||||||||||||||||
| Shares repurchased | (14) | — | (6) | — | (326) | (422) | — | (748) | — | (748) | |||||||||||||||||||||||||||||||||||||||||||||||||
| Other | 3 | — | — | — | 68 | 114 | — | 182 | (19) | 163 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Balance, March 31, 2022 | 313 | $ | 3 | 246 | $ | 3 | $ | 9,195 | $ | 2,300 | $ | (301) | $ | 11,200 | $ | 18 | $ | 11,218 | |||||||||||||||||||||||||||||||||||||||||
| Balance, June 30, 2020 | 344 | $ | 3 | 261 | $ | 3 | $ | 9,831 | $ | 674 | $ | (417) | $ | 10,094 | $ | 17 | $ | 10,111 | |||||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | 1,897 | — | 1,897 | 19 | 1,916 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income | — | — | — | — | — | — | 25 | 25 | — | 25 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Dividends | — | — | — | — | — | (272) | — | (272) | — | (272) | |||||||||||||||||||||||||||||||||||||||||||||||||
| Shares repurchased | (17) | — | (7) | — | (393) | (332) | — | (725) | — | (725) | |||||||||||||||||||||||||||||||||||||||||||||||||
| Other | 2 | — | — | — | 117 | (55) | — | 62 | (33) | 29 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Balance, March 31, 2021 | 329 | $ | 3 | 254 | $ | 3 | $ | 9,555 | $ | 1,912 | $ | (392) | $ | 11,081 | $ | 3 | $ | 11,084 |
| (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.
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, 2022, 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.
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, 2021 as filed with the Securities and Exchange Commission on August 10, 2021 (the “2021 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 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 of each year. Certain fiscal 2021 amounts have been reclassified to conform to the fiscal 2022 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
No recently adopted or issued accounting guidance materially impacted or are expected to impact the Company's Financial Statements.
NOTE 2. ACQUISITIONS, DISPOSALS AND OTHER TRANSACTIONS
The Company’s acquisitions support the Company’s strategy to strengthen its core brands and to selectively enhance production capabilities for its digital and linear platforms. During the nine months ended March 31, 2022 the Company made acquisitions, primarily consisting of three entertainment production
FOX CORPORATION
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
companies, for total cash consideration of approximately $240 million. The revenues and Segment EBITDA (as defined in Note 10—Segment Information) included within the Company's consolidated results of operations associated with the fiscal 2022 and 2021 transactions (disclosed in Note 3—Acquisitions, Disposals and Other Transactions in the 2021 Form 10-K under the heading “Acquisitions and Disposals”) were not material individually or in the aggregate. For the fiscal 2021 acquisition, the accounting for the 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 valuation 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
The Company’s inventories were comprised of the following:
| As of March 31, 2022 | As of June 30, 2021 | ||||||||||
| (in millions) | |||||||||||
| Sports programming rights | $ | 567 | $ | 573 | |||||||
| Entertainment programming rights | 706 | 355 | |||||||||
| Total inventories, net | 1,273 | 928 | |||||||||
| Less: current portion of inventories, net | (786) | (729) | |||||||||
| Total non-current inventories, net | $ | 487 | $ | 199 |
The aggregate amortization expense related to the programming rights was approximately $1.2 billion and $1.0 billion for the three months ended March 31, 2022 and 2021, respectively, and approximately $4.6 billion and $4.0 billion for the nine months ended March 31, 2022 and 2021, respectively, which is included in Operating expenses in the Statements of Operations.
The Company evaluates the recoverability of unamortized programming and production costs, included within Inventories, net in the Balance Sheets, using expected future cash flows. As a result of COVID-19 related costs and production delays, the Company determined that its unamortized production costs related to a television series were not recoverable and therefore recognized a write-down of approximately $30 million at the Television segment, which was recorded in Operating expenses in the Statements of Operations for the three and nine months ended March 31, 2022.
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”).
FOX CORPORATION
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
The following tables present information about financial assets and liabilities carried at fair value on a recurring basis:
| Fair value measurements | |||||||||||||||||||||||||||||
| As of March 31, 2022 | |||||||||||||||||||||||||||||
| Total | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||||||
| (in millions) | |||||||||||||||||||||||||||||
| Assets | |||||||||||||||||||||||||||||
| Investments in equity securities | $ | 506 | $ | 506 | (a) | $ | — | $ | — | ||||||||||||||||||||
| Redeemable noncontrolling interests | (175) | — | — | (175) | (b) | ||||||||||||||||||||||||
| Total | $ | 331 | $ | 506 | $ | — | $ | (175) |
| Fair value measurements | |||||||||||||||||||||||||||||
| As of June 30, 2021 | |||||||||||||||||||||||||||||
| Total | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||||||
| (in millions) | |||||||||||||||||||||||||||||
| Assets | |||||||||||||||||||||||||||||
| Investments in equity securities | $ | 788 | $ | 788 | (a) | $ | — | $ | — | ||||||||||||||||||||
| Redeemable noncontrolling interests | (261) | — | — | (261) | (b) | ||||||||||||||||||||||||
| Total | $ | 527 | $ | 788 | $ | — | $ | (261) |
| (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 2021 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 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 Credible Labs Inc. ("Credible") and an entertainment production company.
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 March 31, | For the nine months ended March 31, | ||||||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
| (in millions) | |||||||||||||||||||||||
| Beginning of period | $ | (172) | $ | (202) | $ | (261) | $ | (305) | |||||||||||||||
| Acquisitions(a) | — | — | (58) | — | |||||||||||||||||||
| Net loss (income) | 5 | (5) | 9 | (13) | |||||||||||||||||||
| Redemption of noncontrolling interests(b) | — | — | — | 135 | |||||||||||||||||||
| Distributions | — | 1 | 3 | 12 | |||||||||||||||||||
| Accretion and other(c) | (8) | (19) | 132 | (54) | |||||||||||||||||||
| End of period | $ | (175) | $ | (225) | $ | (175) | $ | (225) |
| (a) | The increase for the nine months ended March 31, 2022 was primarily due to the acquisition of an entertainment production company. | ||||
| (b) | As a result of the exercise of a portion of the put rights held by the sports network minority shareholder during the nine months ended March 31, 2021, approximately $135 million was reclassified out of Redeemable noncontrolling interests. At closing, the Company paid half of the purchase price in cash and delivered a three-year promissory note for the remaining balance, which was recorded in Non-current liabilities on the Balance Sheet. | ||||
| (c) | As a result of the expiration of the sports network minority shareholder's final put right during the nine months ended March 31, 2022, approximately $110 million was reclassified into equity. |
The put right held by the Credible minority shareholder 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, such as cash and cash equivalents, receivables, payables and investments, accounted for using the measurement alternative method in accordance with ASC 321, approximates fair value.
| As of March 31, 2022 | As of June 30, 2021 | ||||||||||
| (in millions) | |||||||||||
| Borrowings | |||||||||||
| Fair value | $ | 7,852 | $ | 9,474 | |||||||
| Carrying value | $ | 7,205 | $ | 7,951 |
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.
Generally, the Company does not require collateral to secure receivables. As of March 31, 2022 and June 30, 2021, the Company had no customers that accounted for 10% or more of the Company’s receivables.
FOX CORPORATION
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 5. BORROWINGS
Borrowings include senior notes (See Note 9—Borrowings in the 2021 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 2021 Form 10-K under the heading “Revolving Credit Agreement”). As of March 31, 2022, there were no borrowings outstanding under the revolving credit agreement. In January 2022, $750 million of 3.666% senior notes matured and were repaid in full.
NOTE 6. STOCKHOLDERS’ EQUITY
Stock Repurchase Program
The Company's Board of Directors (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.
The Company repurchased approximately 20 million shares of Common Stock for approximately $748 million during the nine months ended March 31, 2022.
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 March 31, 2022, the Company’s remaining stock repurchase authorization was approximately $1.65 billion. Subsequent to March 31, 2022, the Company repurchased approximately 1.4 million shares of Common Stock for $52 million.
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 March 31, | For the nine months ended March 31, | ||||||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
| Cash dividend per share | $ | 0.24 | $ | 0.23 | $ | 0.48 | $ | 0.46 |
The Company declared a semi-annual dividend of $0.24 per share on both the Class A Common Stock and the Class B Common Stock during the three months ended March 31, 2022, which was paid on March 30, 2022 to stockholders of record on March 2, 2022.
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 2021 Form 10-K).
The following table summarizes the Company’s equity-based compensation:
| For the three months ended March 31, | For the nine months ended March 31, | ||||||||||||||||||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||||||||||||||
| (in millions) | |||||||||||||||||||||||||||||||||||
| Equity-based compensation | $ | 28 | $ | 37 | $ | 75 | $ | 112 | |||||||||||||||||||||||||||
| Intrinsic value of all settled equity-based awards | $ | 2 | $ | 4 | $ | 96 | $ | 95 | |||||||||||||||||||||||||||
| Tax benefit on settled equity-based awards | $ | — | $ | 1 | $ | 21 | $ | 17 |
FOX CORPORATION
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
The Company’s equity-based awards are settled in Class A Common Stock. As of March 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 $80 million and is expected to be recognized over a weighted average period between one and two years.
As of March 31, 2022 and 2021, the Company had approximately 6 million stock options outstanding.
Awards Vested and Granted
Restricted Stock Units
During the nine months ended March 31, 2022 and 2021, approximately 2.4 million and 3.5 million restricted stock units (“RSUs”) vested and approximately 1.7 million and 2.0 million RSUs were granted, respectively. These RSUs generally vest in equal annual installments over a three-year period subject to the participants’ continued employment with the Company.
Performance-Based Stock Options
During the nine months ended March 31, 2022 and 2021, the Company granted approximately 4.0 million and 5.0 million performance-based stock options, respectively, 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 March 31, 2022 and June 30, 2021 were approximately $43 billion and $47 billion, respectively. The decrease from June 30, 2021 was primarily due to sports programming rights payments.
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 Twenty-First Century Fox, Inc. (now known as TFCF Corporation) ("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 2021 Form 10-K under the heading “The Distribution”), the Company assumed certain costs and liabilities related to the U.K. Newspaper Matters
FOX CORPORATION
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
Indemnity. The liability recorded in the Balance Sheets related to the indemnity was approximately $65 million and $55 million as of March 31, 2022 and June 30, 2021, respectively.
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 Company believes these lawsuits, including the Smartmatic and Dominion matters, are without merit and intends to defend against them vigorously. 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 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 2021 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 2021 Form 10-K under the heading “The Distribution”) requires 21CF and/or The Walt Disney Company ("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 $14 million and $17 million for the three months ended March 31, 2022 and 2021, respectively, and $41 million and $51 million for the nine months ended March 31, 2022 and 2021, respectively.
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 production, acquisition, marketing and distribution of broadcast network programming and free advertising-supported video-on-demand (“AVOD”) services under the FOX and Tubi brands, respectively, and the operation of 29 full power broadcast television stations, including 11 duopolies, in the U.S. Of these stations, 18 are affiliated with the FOX Network, 10 are affiliated with MyNetworkTV and one is an independent station.
-
Other, Corporate and Eliminations**, which principally consists of 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.
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 nine months ended March 31, 2022 and 2021:
| For the three months ended March 31, | For the nine months ended March 31, | ||||||||||||||||||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||||||||||||||
| (in millions) | |||||||||||||||||||||||||||||||||||
| Revenues | |||||||||||||||||||||||||||||||||||
| Cable Network Programming | $ | 1,583 | $ | 1,471 | $ | 4,637 | $ | 4,284 | |||||||||||||||||||||||||||
| Television | 1,820 | 1,695 | 6,160 | 5,601 | |||||||||||||||||||||||||||||||
| Other, Corporate and Eliminations | 52 | 49 | 144 | 134 | |||||||||||||||||||||||||||||||
| Total revenues | $ | 3,455 | $ | 3,215 | $ | 10,941 | $ | 10,019 | |||||||||||||||||||||||||||
| Segment EBITDA | |||||||||||||||||||||||||||||||||||
| Cable Network Programming | $ | 864 | $ | 850 | $ | 2,306 | $ | 2,202 | |||||||||||||||||||||||||||
| Television | 35 | 135 | 121 | 407 | |||||||||||||||||||||||||||||||
| Other, Corporate and Eliminations | (88) | (86) | (242) | (239) | |||||||||||||||||||||||||||||||
| Amortization of cable distribution investments | (5) | (6) | (14) | (17) | |||||||||||||||||||||||||||||||
| Depreciation and amortization | (92) | (78) | (264) | (216) | |||||||||||||||||||||||||||||||
| Impairment and restructuring charges | — | — | — | (35) | |||||||||||||||||||||||||||||||
| Interest expense, net | (91) | (98) | (285) | (293) | |||||||||||||||||||||||||||||||
| Other, net | (233) | 61 | (375) | 752 | |||||||||||||||||||||||||||||||
| Income before income tax expense | 390 | 778 | 1,247 | 2,561 | |||||||||||||||||||||||||||||||
| Income tax expense | (100) | (196) | (322) | (632) | |||||||||||||||||||||||||||||||
| Net income | 290 | 582 | 925 | 1,929 | |||||||||||||||||||||||||||||||
| Less: Net income attributable to noncontrolling interests | (7) | (15) | (26) | (32) | |||||||||||||||||||||||||||||||
| Net income attributable to Fox Corporation stockholders | $ | 283 | $ | 567 | $ | 899 | $ | 1,897 |
FOX CORPORATION
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
Revenues by Segment by Component
| For the three months ended March 31, | For the nine months ended March 31, | ||||||||||||||||||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||||||||||||||
| (in millions) | |||||||||||||||||||||||||||||||||||
| Cable Network Programming | |||||||||||||||||||||||||||||||||||
| Affiliate fee | $ | 1,097 | $ | 1,068 | $ | 3,162 | $ | 2,969 | |||||||||||||||||||||||||||
| Advertising | 339 | 283 | 1,104 | 1,023 | |||||||||||||||||||||||||||||||
| Other | 147 | 120 | 371 | 292 | |||||||||||||||||||||||||||||||
| Total Cable Network Programming revenues | 1,583 | 1,471 | 4,637 | 4,284 | |||||||||||||||||||||||||||||||
| Television | |||||||||||||||||||||||||||||||||||
| Advertising | 969 | 915 | 3,742 | 3,426 | |||||||||||||||||||||||||||||||
| Affiliate fee | 700 | 651 | 1,990 | 1,801 | |||||||||||||||||||||||||||||||
| Other | 151 | 129 | 428 | 374 | |||||||||||||||||||||||||||||||
| Total Television revenues | 1,820 | 1,695 | 6,160 | 5,601 | |||||||||||||||||||||||||||||||
| Other, Corporate and Eliminations | 52 | 49 | 144 | 134 | |||||||||||||||||||||||||||||||
| Total revenues | $ | 3,455 | $ | 3,215 | $ | 10,941 | $ | 10,019 |
Future Performance Obligations
As of March 31, 2022, approximately $3.3 billion of revenues are expected to be recognized primarily over the next one to three years. The Company’s most significant remaining performance obligations relate to affiliate contracts, sports advertising contracts and content licensing contracts with fixed fees. The amount disclosed does not include (i) revenues related to performance obligations that are part of a contract whose original expected duration is one year or less, (ii) revenues that are in the form of sales- or usage-based royalties and (iii) revenues related to performance obligations for which the Company elects to recognize revenue in the amount it has a right to invoice.
| For the three months ended March 31, | For the nine months ended March 31, | ||||||||||||||||||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||||||||||||||
| (in millions) | |||||||||||||||||||||||||||||||||||
| Depreciation and amortization | |||||||||||||||||||||||||||||||||||
| Cable Network Programming | $ | 16 | $ | 16 | $ | 43 | $ | 41 | |||||||||||||||||||||||||||
| Television | 28 | 26 | 82 | 77 | |||||||||||||||||||||||||||||||
| Other, Corporate and Eliminations | 48 | 36 | 139 | 98 | |||||||||||||||||||||||||||||||
| Total depreciation and amortization | $ | 92 | $ | 78 | $ | 264 | $ | 216 |
| As of March 31, 2022 | As of June 30, 2021 | ||||||||||
| (in millions) | |||||||||||
| Assets | |||||||||||
| Cable Network Programming | $ | 2,638 | $ | 2,577 | |||||||
| Television | 8,111 | 7,305 | |||||||||
| Other, Corporate and Eliminations | 10,619 | 12,145 | |||||||||
| Investments | 648 | 899 | |||||||||
| Total assets | $ | 22,016 | $ | 22,926 |
FOX CORPORATION
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 11. ADDITIONAL FINANCIAL INFORMATION
Other, net
The following table sets forth the components of Other, net included in the Statements of Operations:
| For the three months ended March 31, | For the nine months ended March 31, | ||||||||||||||||||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||||||||||||||
| (in millions) | |||||||||||||||||||||||||||||||||||
| Net (losses) gains on investments in equity securities(a) | $ | (191) | $ | 43 | $ | (293) | $ | 384 | |||||||||||||||||||||||||||
| U.K Newspaper Matters Indemnity(b) | (22) | (15) | (71) | (43) | |||||||||||||||||||||||||||||||
| Transaction Costs(c) | (17) | (2) | (41) | 431 | |||||||||||||||||||||||||||||||
| Other | (3) | 35 | 30 | (20) | |||||||||||||||||||||||||||||||
| Total other, net | $ | (233) | $ | 61 | $ | (375) | $ | 752 |
| (a) | Net (losses) gains on investments in equity securities for the three and nine months ended March 31, 2022 and 2021 included the (losses) gains related to the change in fair value of the Company’s investment in Flutter (See Note 4—Fair Value). | ||||
| (b) | See Note 8—Commitments and Contingencies under the heading “U.K. Newspaper Matters Indemnity.” | ||||
| (c) | The transaction costs for the nine months ended March 31, 2021 are primarily related to the reimbursement from Disney of $462 million related to the substantial settlement of the Company’s prepayment of its share of the Divestiture Tax (as defined in Note 1—Description of Business and Basis of Presentation in the 2021 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 March 31, 2022 | As of June 30, 2021 | ||||||||||
| (in millions) | |||||||||||
| Investments(a) | $ | 648 | $ | 899 | |||||||
| Operating lease ROU assets | 454 | 469 | |||||||||
| Inventories, net | 487 | 199 | |||||||||
| Grantor Trust | 293 | 304 | |||||||||
| Other | 217 | 187 | |||||||||
| Total other non-current assets | $ | 2,099 | $ | 2,058 |
| (a) | Includes investments accounted for at fair value on a recurring basis of $506 million and $788 million as of March 31, 2022 and June 30, 2021, respectively (See Note 4—Fair Value). |
FOX CORPORATION
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
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 March 31, 2022 | As of June 30, 2021 | ||||||||||
| (in millions) | |||||||||||
| Accrued expenses | $ | 862 | $ | 1,077 | |||||||
| Program rights payable | 766 | 659 | |||||||||
| Deferred revenue | 165 | 196 | |||||||||
| Operating lease liabilities | 107 | 92 | |||||||||
| Other current liabilities | 221 | 229 | |||||||||
| Total accounts payable, accrued expenses and other current liabilities | $ | 2,121 | $ | 2,253 |
Other Liabilities
The following table sets forth the components of Other liabilities included in the Balance Sheets:
| As of March 31, 2022 | As of June 30, 2021 | ||||||||||
| (in millions) | |||||||||||
| Accrued non-current pension/postretirement liabilities | $ | 544 | $ | 586 | |||||||
| Non-current operating lease liabilities | 382 | 409 | |||||||||
| Other non-current liabilities | 371 | 341 | |||||||||
| Total other liabilities | $ | 1,297 | $ | 1,336 |
Supplemental Information
| For the nine months ended March 31, | |||||||||||
| 2022 | 2021 | ||||||||||
| (in millions) | |||||||||||
| Supplemental cash flows information | |||||||||||
| Cash paid for interest | $ | 363 | $ | 370 | |||||||
| Cash paid for income taxes | $ | (204) | $ | (132) | |||||||
| Supplemental information on acquisitions | |||||||||||
| Fair value of assets acquired, excluding cash | $ | 348 | $ | — | |||||||
| Cash acquired | 7 | — | |||||||||
| Liabilities assumed | (47) | — | |||||||||
| Redeemable noncontrolling interests issued | (5) | — | |||||||||
| Cash paid | (250) | — | |||||||||
| Fair value of equity instruments issued as consideration to third parties(a) | 53 | — | |||||||||
| Issuance of subsidiary common units | (53) | — | |||||||||
| Fair value of equity instruments consideration | $ | — | $ | — |
| (a) | Includes Redeemable noncontrolling interests. |
Next: Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS