REVENUES OF $4.09 BILLION, AN INCREASE OF 8% AND ADJUSTED EBITDA OF $305 MILLION, AN INCREASE OF 17%

NEW YORK, Feb. 9, 2021 /PRNewswire/ -- Fox Corporation (Nasdaq: FOXA, FOX) ("FOX" or the "Company") today reported financial results for the three months ended December 31, 2020.

The Company reported quarterly net income of $230 million, as compared to the $314 million reported in the prior year quarter. The change in net income was primarily due to higher gains recognized in Other, net in the prior year quarter. Net Income attributable to Fox Corporation stockholders was $224 million ($0.37 per share) as compared to $300 million ($0.48 per share) reported in the prior year quarter. Adjusted net income attributable to Fox Corporation stockholders1 increased 45% to $93 million from the $64 million reported in the prior year quarter. Adjusted earnings per share increased $0.06 to $0.16 per share from the $0.10 reported in the prior year quarter.

Total quarterly revenues increased 8% to $4.09 billion from the $3.78 billion of revenues reported in the prior year quarter driven by revenue growth at the Television and Cable Network Programming segments. Advertising revenues increased 14%, primarily due to record political advertising revenues at the FOX Television Stations, continued linear and digital growth at FOX News Media and the impact of the consolidation of Tubi, Inc. ("Tubi"). Affiliate revenues increased 6% led by growth at the Television segment. The Company also reported a 14% decrease in other revenues, primarily due to lower sports sublicensing revenues at the Cable Network Programming segment as a result of cancelled college football games in the quarter due to Coronavirus Disease 2019 ("COVID-19"). These lower sports sublicensing revenues at the Cable Network Programming segment were offset by a corresponding reduction in sports programming rights amortization.

Quarterly Adjusted EBITDA2 increased 17% to $305 million from the $261 million reported in the prior year quarter, led by higher contributions at the Television and Cable Network Programming segments.

Commenting on the results, Executive Chairman and Chief Executive Officer Lachlan Murdoch said:

"Once again, the Company delivered exceptional operating and financial results. FOX Television Stations, FOX News Media and Tubi all experienced record highs in the December quarter, led by an unprecedented political advertising cycle at our local television stations, strong digital growth at FOX News Media and an influx of new advertisers at Tubi. We are looking forward to a return to normal entertainment and sports production schedules, and we are grateful to our colleagues and business partners who, during the pandemic, have ensured that our viewers are informed and engaged. Through it all, the fundamentals of our business and our strategic focus have never been stronger."

Cable Network Programming reported quarterly segment revenues of $1.49 billion, an increase of $19 million or 1% from the amount reported in the prior year quarter, as higher advertising revenues were largely offset by lower affiliate and other revenues. Advertising revenues increased $104 million or 31% driven by stronger linear and digital results at FOX News Media. Affiliate revenues decreased $29 million or 3% as continued healthy underlying increases in affiliate revenues, led by double-digit growth at FOX News Media, were more than offset by the impact of an accrual for potential distribution credits as a result of cancelled college football games in the quarter due to COVID-19. Other revenues decreased $56 million or 32% as lower sports sublicensing revenues were also the result of cancelled college football games in the quarter due to COVID-19.

Cable Network Programming reported quarterly segment EBITDA of $571 million, an increase of $15 million or 3% from the amount reported in the prior year quarter, primarily due to the revenue increases noted above.

Television reported quarterly segment revenues of $2.56 billion, an increase of $290 million or 13% from the amount reported in the prior year quarter, primarily reflecting increases in advertising and affiliate revenues. Advertising revenues increased $168 million or 10%, primarily due to record political advertising revenues at the FOX Television Stations and the impact of the consolidation of Tubi. Affiliate revenues increased $111 million or 23% driven by increases in fees from third-party FOX affiliates and higher average rates per subscriber at the Company's owned and operated television stations.

Television reported a quarterly segment EBITDA loss of $185 million, an improvement of $29 million from the amount reported in the prior year quarter, as the revenue increases noted above were partially offset by higher expenses. The increase in expenses was primarily due to higher programming rights amortization at FOX Sports, led by contractual rights increases for NFL content, and the impact of the consolidation of Tubi, partially offset by the postponement of certain scripted programming at FOX Entertainment due to COVID-19.

DIVIDEND

The Company has declared a dividend of $0.23 per Class A and Class B share. This dividend is payable on April 7, 2021 with a record date for determining dividend entitlements of March 10, 2021.

SHARE REPURCHASE PROGRAM

On November 6, 2019, the Company announced the authorization of a $2 billion stock repurchase program. To date, the Company has repurchased $735 million of its Class A common stock and $315 million of its Class B common stock.

IMPACT OF COVID-19

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

Cautionary Statement Concerning Forward-Looking Statements

This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as "may," "will," "should," "likely," "anticipates," "expects," "intends," "plans," "projects," "believes," "estimates," "outlook" and similar expressions are used to identify these forward-looking statements. These statements are based on management's current expectations and beliefs and are subject to uncertainty and changes in circumstances. Actual results may vary materially from those expressed or implied by the statements in this press release due to changes in economic, business, competitive, technological, strategic and/or regulatory factors and other factors affecting the operation of the Company's businesses, including the impact of COVID-19 and other widespread health emergencies or pandemics and measures to contain their spread. More detailed information about these factors is contained in the documents the Company has filed with or furnished to the Securities and Exchange Commission (the "SEC"), including the Company's Annual Report on Form 10-K for the fiscal year ended June 30, 2020.

Statements in this press release speak only as of the date they were made, and the Company undertakes no duty to update or release any revisions to any forward-looking statement made in this press release or to report any events or circumstances after the date of this press release or to reflect the occurrence of unanticipated events or to conform such statements to actual results or changes in the Company's expectations, except as required by law.

To access a copy of this press release through the Internet, access Fox Corporation's corporate website located at http://www.foxcorporation.com.

NOTE 1 – ADJUSTED NET INCOME AND ADJUSTED EPS

The Company uses net income and earnings per share ("EPS") attributable to Fox Corporation stockholders excluding net income effects of Impairment and restructuring charges, adjustments to Equity (losses) earnings of affiliates, Other, net, and tax provision adjustments ("Adjusted Net Income" and "Adjusted EPS" respectively) to evaluate the performance of the Company's operations exclusive of certain items that impact the comparability of results from period to period.

Adjusted Net Income and Adjusted EPS may not be comparable to similarly titled measures reported by other companies. Adjusted Net Income and Adjusted EPS are not measures of performance under GAAP and should be considered in addition to, and not as substitutes for, net income attributable to Fox Corporation stockholders and EPS as reported in accordance with GAAP. However, management uses these measures in comparing the Company's historical performance and believes that they provide meaningful and comparable information to management, investors and equity analysts to assist in their analysis of the Company's performance relative to prior periods and the Company's competitors.

The following table reconciles net income and EPS attributable to Fox Corporation stockholders to Adjusted Net Income and Adjusted EPS for the three months ended December 31, 2020 and 2019:

NOTE 2 – ADJUSTED EBITDA

Adjusted EBITDA is defined as Revenues less Operating expenses and Selling, general and administrative expenses. Adjusted EBITDA does not include: Amortization of cable distribution investments, Depreciation and amortization, Impairment and restructuring charges, Interest expense, Interest income, Other, net and Income tax expense.

Management believes that information about Adjusted EBITDA assists all users of the Company's Unaudited Consolidated Financial Statements by allowing them to evaluate changes in the operating results of the Company's portfolio of businesses separate from non-operational factors that affect net income, thus providing insight into both operations and the other factors that affect reported results. Adjusted EBITDA provides management, investors and equity analysts a measure to analyze the operating performance of the Company's business and its enterprise value against historical data and competitors' data, although historical results, including Adjusted EBITDA, may not be indicative of future results (as operating performance is highly contingent on many factors, including customer tastes and preferences and the impact of COVID-19).

Adjusted EBITDA is considered a non-GAAP financial measure and should be considered in addition to, not as a substitute for, net income, cash flow and other measures of financial performance reported in accordance with GAAP. In addition, this measure does not reflect cash available to fund requirements and excludes items, such as depreciation and amortization and impairment charges, which are significant components in assessing the Company's financial performance. Adjusted EBITDA may not be comparable to similarly titled measures reported by other companies.

The following table reconciles net income to Adjusted EBITDA for the three and six months ended December 31, 2020 and 2019:

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SOURCE Fox Corporation