TWENTYFIRST CENTURY FOX, INC. (FOXA) SEC Filing 10-K Annual report for the fiscal year ending Saturday, June 30, 2018
EARNINGS RELEASE FOR THE YEAR AND QUARTER ENDED JUNE 30, 2018
21ST CENTURY FOX REPORTS FULL YEAR INCOME FROM CONTINUING
OPERATIONS ATTRIBUTABLE TO 21ST CENTURY FOX STOCKHOLDERS OF
$4.48 BILLION, A 49% INCREASE OVER THE PRIOR YEAR AND REVENUES OF
$30.40 BILLION, A 7% INCREASE OVER THE PRIOR YEAR
REPORTS FOURTH QUARTER INCOME FROM CONTINUING OPERATIONS
ATTRIBUTABLE TO 21ST CENTURY FOX STOCKHOLDERS OF $925 MILLION,
AND SEGMENT OPERATING INCOME BEFORE DEPRECIATION AND
AMORTIZATION OF $1.91 BILLION INCREASES 32% FROM THE PRIOR YEAR
QUARTER ON REVENUE GROWTH OF 18%
Full Year Highlights
The Companys Disney / new Fox transactions unlocked enormous value for shareholders the Companys stock price increased by approximately 75% during the fiscal year, significantly ahead of both 12% average growth for the S&P 500 and a 10% average decline for our media peers over the same period.
The strength of the Companys domestic and international cable brands led to double-digit affiliate growth in every quarter of the fiscal year with the domestic growth driven by pricing strength while maintaining our overall level of subscribers, including distribution on all emerging virtual MVPD platforms.
Fox News Channel dominated the cable news landscape maintaining its position as the number one network on basic cable in both Prime and Total Day; Fox Business Network achieved its highest rated year ever.
20th Century Foxs films led the industry in awards season, both in nominations and wins, earning six Academy Awards, including Best Picture for The Shape of Water, and seven Golden Globe Awards, following 27 nominations in both instances, the most of any studio and ended the year with the strong theatrical success of Deadpool 2, which has grossed over $730 million in worldwide box office to date.
FOX Sports was the leader in live events in 2017 with 256 billion minutes of live sports viewing, 17% more than its nearest competitor.
The Company successfully negotiated and acquired key domestic sports rights, including National Football League (NFL)s Thursday Night Football and WWEs SmackDown Live for Fox Sports.
FOX Broadcasting Company ended the broadcast season with increased cross-platform entertainment viewership on the strength of four of the top eight new dramas of the season including 9-1-1, The Orville, The Resident and The Gifted.
STAR India (STAR) secured Indian Premier Leagues (IPL) Global Media and Digital broadcast rights and, aided by the inaugural broadcast of the IPL, further penetration of its Hotstar platform and continued general entertainment growth, nearly doubled its profit contributions year over year.
Twentieth Century Fox Television production studio produced four of the top ten new dramas this past season and three shows that were No. 1 on their respective networks.
The following information was filed by TWENTYFIRST CENTURY FOX, INC. on Wednesday, August 8, 2018 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.
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- fox_10k_2018-08-13_76_65Revenue - ProductFor fiscal 2017, international advertising revenues decreased, as compared to fiscal 2016, as local currency growth at FNGI in Latin America and Europe was more than offset by lower local currency advertising revenue at STAR due to the effect of the Indian governments demonetization initiatives on the general advertising market in India, a lower volume of cricket matches broadcast in the current year and a decrease in market share.
- fox_10k_2018-08-13_168_176Other - OtherThe mortality assumptions reflect data from the mortality table released by the Society of Actuaries in fiscal 2015
- fox_10k_2018-08-13_97_259Revenue - ProductThe increase in net cash used in investing activities during fiscal 2018, as compared to fiscal 2017, was primarily due to cash paid related to the premium for the foreign currency option contract, additional investments in Hulu and higher capital expenditures partially offset by cash received from the Federal Communications Commissions reverse auction for broadcast spectrum See Note 3 Acquisitions, Disposals and Other Transactions to the accompanying Consolidated Financial Statements of Twenty-First Century Fox under the heading Fiscal 2017 under the subheading Other .
- fox_10k_2018-08-13_9_195Revenue - Productcompared to estimated revenues, the Company may have improved results related to the contract, which may be recognized over the remaining contract term.
- fox_10k_2018-08-13_51_48Financial - ExpenseFor fiscal 2018, the increase in expenses was primarily due to higher sports programming rights amortization and production costs.
- fox_10k_2018-08-13_24_206Financial - ExpenseOperating expenses increased 9% for fiscal 2018, as compared to fiscal 2017, primarily due to higher sports and entertainment programming rights amortization at the Cable Network Programming segment and higher production amortization and participation costs from television and motion picture productions at the Filmed Entertainment segment
- fox_10k_2018-08-13_140_104Other - OtherFuture plan contributions are dependent upon actual plan asset returns, interest rates and statutory requirements.
- fox_10k_2018-08-13_79_73Financial - ExpenseOperating expenses increased approximately $440 million for fiscal 2017, as compared to fiscal 2016, primarily due to higher sports programming rights amortization and production costs at FOX, including
- fox_10k_2018-08-13_173_189Other - OtherFuture plan contributions are dependent upon actual plan asset returns, statutory requirements and interest rate movements.
- fox_10k_2018-08-13_53_53Financial - ExpenseOperating expenses increased approximately $635 million for fiscal 2018, as compared to fiscal 2017, primarily due to higher sports programming rights amortization and production costs, including the addition of Big Ten and FIFA World Cup programming and higher National Basketball Association NBA and MLB costs as a result of contractual rate increases.
- fox_10k_2018-08-13_173_190Other - OtherAssuming that actual plan returns are consistent with the Companys expected plan returns in fiscal 2019 and beyond, and that interest rates remain constant, the Company would not be required to make any material statutory contributions to its primary U.S. pension plans for the immediate future.
- fox_10k_2018-08-13_53_54Financial - ExpenseSelling, general and administrative expenses increased approximately $85 million for fiscal 2018, as compared to fiscal 2017, primarily due to higher legal fees and compensation expenses.
- fox_10k_2018-08-13_93_255Other - OtherThe increase in net cash provided by operating activities during fiscal 2018, as compared to fiscal 2017,
- fox_10k_2018-08-13_100_262Other - OtherThe increase in net cash used in financing activities during fiscal 2018, as compared to fiscal 2017, was primarily due to net
- fox_10k_2018-08-13_160_163Other - OtherThe resulting fair values for FCC licenses are sensitive to these long-term assumptions and any variations to such assumptions could result in an impairment to existing carrying values in future periods and such impairment could be material.
- fox_10k_2018-08-13_35_35Revenue - GeographyThe Companys tax provision and related effective tax rate of 27% for fiscal 2016 was lower than the statutory rate of 35% primarily due to a 3% rate reduction from the Companys foreign operations and a 4% rate reduction from increased tax amortization deductions for certain film and television properties as a result of a ruling that was received by the Company.
- fox_10k_2018-08-13_75_62Financial - ExpenseOperating expenses increased approximately $505 million for fiscal 2017, as compared to fiscal 2016, principally due to higher sports rights amortization, including the MLB, NBA and National Association of Stock Car Auto Racing NASCAR rights at the Companys sports channels, higher programming and marketing costs related to the launch of new programming at FX Networks and National Geographic and the acquisition of the NGS Media Business.
- fox_10k_2018-08-13_115_275Financial - shares/equityThe decrease in net cash used in financing activities during fiscal 2017, as compared to fiscal 2016, was primarily due to fewer shares repurchased partially offset by a decrease in net borrowings.
- fox_10k_2018-08-13_26_208Revenue - GeographyThe Companys tax provision and related effective tax rate of 30% for fiscal 2017 was lower than the statutory rate of 35% primarily due to a 3% benefit from domestic production activities and a 2% benefit from the Companys foreign operations.
- fox_10k_2018-08-13_39_46Other - OtherIn addition, this measure does not reflect cash available to fund requirements and excludes items, such as depreciation and amortization and impairment charges, which are significant components in assessing the Companys financial performance.
- fox_10k_2018-08-13_38_44Financial - shares/equityTotal Segment OIBDA provides management, investors and equity analysts a measure to analyze the operating performance of the Companys business and its enterprise value against historical data and competitors data, although historical results, including Segment OIBDA and Total Segment OIBDA, may not be indicative of future results as operating performance is highly contingent on many factors, including customer tastes and preferences.
- fox_10k_2018-08-13_55_56Financial - ExpenseOperating expenses increased approximately $490 million for fiscal 2018, as compared to fiscal 2017, primarily due to the addition of the IPL programming rights at STAR and higher sports and entertainment programming rights amortization at Fox Networks Group International FNGI , led by higher soccer rights in Latin America and Europe.
- fox_10k_2018-08-13_108_268Revenue - GeographyThe increase in net cash provided by operating activities during fiscal 2017, as compared to fiscal 2016, primarily reflects higher operating results and the absence of a payment at the Cable Network Programming segment to the Board of Control for Cricket in India BCCI for contract termination costs related to a program rights contract for the Champions League Twenty20 CLT20 cricket tournament through 2018 partially offset by higher tax payments and lower cash distributions received from Sky See Note 7 Investments to the accompanying Consolidated Financial Statements of Twenty-First Century Fox.
- fox_10k_2018-08-13_87_250MA - OtherThe principal uses of cash that affect the Companys liquidity position include the following: investments in the production and distribution of new motion pictures and television programs the acquisition of rights and related payments for entertainment and sports programming operational expenditures including employee costs capital expenditures interest expenses income tax payments investments in associated entities dividends acquisitions debt repayments and stock repurchases.
- fox_10k_2018-08-13_74_60Revenue - ProductThe increase in domestic content and other revenues for fiscal 2017, as compared to fiscal 2016, was primarily due to the acquisition of the NGS Media Business and higher SVOD revenue.
- fox_10k_2018-08-13_140_105Other - OtherAssuming that actual plan asset returns are consistent with the Companys expected plan returns in fiscal 2019 and beyond, and that interest rates remain constant, the Company would not be required to make any material contributions to its U.S. pension plans for the immediate future.
- fox_10k_2018-08-13_144_113Revenue - ProductRevenue is recognized when persuasive evidence of an arrangement exists, the fees are fixed or determinable, the product or service has been delivered and collectability is reasonably assured.
- fox_10k_2018-08-13_33_215Financial - ExpenseSelling, general and administrative expenses decreased 3% for fiscal 2017, as compared to fiscal 2016, primarily due to lower compensation expense partially offset by the acquisition of the NGS Media Business.
- fox_10k_2018-08-13_140_109Other - OtherThe Company does not expect its net OPEB payments to be material in fiscal 2019 See Note 16 Pension and Other Postretirement Benefits to the accompanying Consolidated Financial Statements of Twenty-First Century Fox for further discussion of the Companys pension and OPEB plans.
- fox_10k_2018-08-13_74_58Other - OtherAlso contributing to the increase were FS1 and FS2 due to higher average rates per subscriber and higher average subscribers and FX Networks due to higher average rates per subscriber.
- fox_10k_2018-08-13_58_231Revenue - ProductFor fiscal 2018, revenues at the Filmed Entertainment segment increased $512 million, or 6%, as compared to fiscal 2017, primarily due to higher SVOD revenue from television productions, led by the licensing of
- fox_10k_2018-08-13_152_132Financial - ExpenseUnder the individual-film-forecast method, such programming costs are amortized for each film or television program in the ratio that current period actual revenue for such title bears to managements estimated ultimate revenue as of the beginning of the current fiscal year to be recognized over approximately a six year period from all media and markets for such title.
- fox_10k_2018-08-13_52_51Revenue - ProductThe increase in domestic content and other revenues for fiscal 2018, as compared to fiscal 2017, was primarily due to the sublicensing of Big Ten programming rights to third party networks.
- fox_10k_2018-08-13_166_306Financial - ExpenseThe measurement and recognition of costs of the Companys pension and OPEB plans require the use of significant management judgments, including discount rates, expected return on plan assets, future compensation and other actuarial assumptions.
- fox_10k_2018-08-13_170_181Financial - ExpenseThis change in estimate did not have a material impact on the Companys pension and postretirement net periodic benefit expense in fiscal 2017 See Note 16 Pension and Other Postretirement Benefits to the accompanying Consolidated Financial Statements of Twenty-First Century Fox for further discussion.
- fox_10k_2018-08-13_37_41Financial - shares/equitySegment OIBDA does not include: Amortization of cable distribution investments, Depreciation and amortization, Impairment and restructuring charges, Equity losses of affiliates, Interest expense, net, Interest income, Other, net, Income tax benefit expense, Loss from discontinued operations, net of tax and Net income attributable to noncontrolling interests.
- fox_10k_2018-08-13_112_272Revenue - GeographyThe decrease in net cash used in investing activities during fiscal 2017, as compared to fiscal 2016, was primarily due to the comparative effect of the cash used for the National Geographic Partners and MAA Television Network transactions in fiscal 2016 See Note 3 Acquisitions, Disposals and Other Transactions to the accompanying Consolidated Financial Statements of Twenty-First Century Fox under the heading Fiscal 2016 .
- fox_10k_2018-08-13_148_120Revenue - ProductRevenues from the theatrical distribution of motion pictures are recognized as they are exhibited, and revenues from home entertainment sales, net of a reserve for estimated returns, are recognized on the date that DVD and Blu-ray units are made widely available for sale by retailers or when made available for viewing via digital distribution platforms and all Company-imposed restrictions on the sale or availability have expired.
- fox_10k_2018-08-13_153_137Financial - ExpenseProgram rights and the related liabilities are recorded at the gross amount of the liabilities when the license period has begun, the cost of the program is determinable and the program is accepted and available for airing.
- fox_10k_2018-08-13_146_116Revenue - ProductSubscriber fees received from MVPDs for Cable Network Programming and Television are recognized as affiliate fee revenue in the period services are provided.
- fox_10k_2018-08-13_157_146MA - OtherIntangible assets acquired in business combinations are recorded at their estimated fair value at the date of acquisition.
- fox_10k_2018-08-13_80_74Revenue - ProductFor fiscal 2017, revenues at the Filmed Entertainment segment decreased $270 million, or 3%, as compared to fiscal 2016, primarily due to lower worldwide theatrical and home entertainment revenues from motion picture productions.
- fox_10k_2018-08-13_78_70Other - Othercommissions, the MLB World Series which benefited from higher ratings and two additional games, higher political advertising related to the 2016 U.S. elections, the broadcast of one additional NFL divisional playoff game and higher ratings and pricing of the NFL postseason.
- fox_10k_2018-08-13_153_139Revenue - ProductManagement regularly reviews, and revises when necessary, its total revenue estimates on a contract basis, which may result in a change in the rate of amortization andor a write-down of the asset to fair value.
- fox_10k_2018-08-13_52_50Revenue - ProductFor fiscal 2018, domestic advertising revenue increased, as compared to fiscal 2017, primarily due to higher pricing at Fox News.
- fox_10k_2018-08-13_116_276Other - OtherThe following table summarizes cash from borrowings and cash used in repayment of borrowings for fiscal 2018, 2017 and 2016:
- fox_10k_2018-08-13_159_156Other - OtherCarrying values of goodwill and intangible assets with indefinite lives are reviewed at least annually for possible impairment in accordance with ASC 350 Intangibles Goodwill and Other.
- fox_10k_2018-08-13_171_307Financial - ExpenseDiscount rate used to determine net periodic benefit costs
- fox_10k_2018-08-13_157_145Other - OtherThe Companys intangible assets include goodwill, film and television libraries, Federal Communications Commission FCC licenses, MVPD affiliate agreements and relationships and trademarks and other copyrighted products.
- fox_10k_2018-08-13_161_164Other - OtherDuring fiscal 2018, the Company determined that the goodwill and indefinite-lived intangible assets included in the accompanying Consolidated Balance Sheet of Twenty-First Century Fox as of June 30, 2018 were not impaired.
- fox_10k_2018-08-13_157_148MA - OtherThe judgments made in determining the estimated fair value assigned to each class of intangible assets acquired, their reporting unit, as well as their useful lives can significantly impact net income.
- fox_10k_2018-08-13_168_173Other - OtherThe Company considers current market conditions, including changes in investment returns and interest rates, in making these assumptions.
- fox_10k_2018-08-13_76_64Other - OtherPartially offsetting the affiliate fee increase for fiscal 2017 was the adverse impact of the strengthening of the U.S. dollar against local currencies.
- fox_10k_2018-08-13_8_14Financial - ExpenseMarketing and promotional expenses relate to improving the market visibility and awareness of the cable network or broadcaster and its programming.
- fox_10k_2018-08-13_169_178Other - OtherThe discount rate assumptions used to account for pension and other postretirement benefit plans reflect the rates at which the benefit obligations could be effectively settled.
- fox_10k_2018-08-13_52_49Revenue - ProductFor fiscal 2018, domestic affiliate fee revenue increased, as compared to fiscal 2017, primarily due to contractual rate increases led by the Regional Sports Networks RSNs , Fox News, FS1 and FX Networks.
- fox_10k_2018-08-13_10_21Revenue - ProductLicense fees received for television exhibition including international and U.S. premium television and basic cable television are recorded as revenue in the period that licensed films or programs are available for such exhibition, which may cause substantial fluctuations in operating results.
- fox_10k_2018-08-13_163_304Financial - ExpenseSignificant judgment is required in determining the Companys tax expense and in evaluating its tax positions including evaluating uncertainties under ASC 740, Income Taxes .
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- Form Type: Annual
- Number of times amended: 0
- Accession Number: 0001564590-18-021493
- Submitted to the SEC: Monday, August 13, 2018 5:27:55 PM EST
- Accepted by the SEC: Monday, August 13, 2018
- Fiscal Year ending: June 2018
- Industry: Cable And Other Pay Television Services
Positive and negative sentiment analysis is available in these filings:
TWENTYFIRST CENTURY FOX, INC.
Intrinsic Value, Financial Stability and Ratios