What changed in this filing

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Item 7. Management’s Discussion and Analysis

2023-08-11 compared with 2022-08-12 · 158 added, 163 removed, 427 unchanged (43% of the section changed)

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Readers should carefully review this document and the other documents filed by Fox Corporation (“FOX” or the “Company”) with the Securities and Exchange Commission (the “SEC”).

This section should be read

together with the consolidated financial statements and related notes appearing elsewhere in this Annual Report on Form 10-K.

This section should be read together with the consolidated financial statements and related notes appearing elsewhere in this Annual Report on Form 10-K.

The consolidated financial statements are referred to as the “Financial Statements” herein.

The Distribution

On March 19, 2019, the Company became a standalone publicly traded company through the pro rata distribution by Twenty-First Century Fox, Inc.

("21CF") of all of the issued and outstanding common stock of FOX to 21CF stockholders (other than holders that were subsidiaries of 21CF) (the "Distribution") in accordance with the Amended and Restated Distribution Agreement and Plan of Merger, dated as of June 20, 2018, by and between 21CF and 21CF Distribution Merger Su b, Inc.

Following the Distribution, the Company's Class A Common Stock, par value $0.01 per share (the "Class A Common Stock"), and Class B Common Stock, par value $0.01 per share (the "Class B Common Stock" and, together with the Class A Common Stock, the "Common Stock") began trading independently on The Nasdaq Global Select Market.

In connection with the Distribution, the Company entered into the Separation and Distribution Agreement, dated as of March 19, 2019 (the "Separation Agreement"), with 21CF, which effected the internal restructuring (the "Separation") whereby The Walt Disney Company ("Disney") acquired the remaining 21CF assets and 21CF became a wholly-owned subsidiary of Disney.

The Separation and the Distribution were effected as part of a series of transactions contemplated by the Amen ded and Restated Merger Agreement and Plan of Merger, dated as of June 20, 2018 (the "21CF Disney Merger Agreement"), by and among 21CF, Disney and certain subsidiaries of Disney.

Pursuant to the 21CF Disney Merger Agreement, immediately prior to the Distribution, the Company paid to 21CF a dividend in the amount of $8.5 billion (the "Dividend").

The final determination of the taxes in respect of the Separation and the Distribution for which the Company is responsible pursuant to the 21CF Disney Merger Agreement and a prepayment of the estimated taxes in respect of divestitures (collectively, the "Transaction Tax") was $6.5 billion.

Following the Distribution, on March 20, 2019 the Company received a cash payment in the amount of $2.0 billion from Disney, which had the net effect of reducing the Dividend the Company paid to 21CF.

The Transaction Tax included a prepayment of the Company's share of the estimated tax liabilities resulting from the anticipated divestitures by Disney of certain assets, principally the FOX Sports Regional Sports Networks ("RSNs"), which were sold by Disney during calendar year 2019 ("Divestiture Tax").

This prepayment was in the amount of approximately $700 million and is subject to adjustment in the future, when the actual amounts of all such tax liabilities are reported on the federal income tax returns of Disney or a subsidiary of Disney.

Any such adjustment is not expected to have a material impact on the results of the Company.

During the first quarter of fiscal 2021, the Company and Disney reached an agreement to settle the majority of the prepaid Divestiture Tax and the Company received $462 million from Disney as reimbursement of the Company's prepayment based upon the sales price of the RSNs.

This reimbursement was recorded in Other, net in the Statement of Operations (See Note 20—Additional Financial Information to the accompanying Financial Statements under the heading "Other, net").

As a result of the Separation and the Distribution, which was a taxable transaction for which the estimated tax liability of $5.8 billion was included in the Transaction Tax paid by the Company, FOX obtained a tax basis in its assets equal to their respective fair market values.

This resulted in estimated annual tax deductions of approximately $1.5 billion, principally over the next several years related to the amortization of the additional tax basis.

This amortization is estimated to reduce the Company's annual cash tax liability by $370 million per year at the current combined federal and state applicable tax rate of approximately 25%.

The Transaction

FOX became a standalone publicly traded company on March 19, 2019, when Twenty-First Century Fox, Inc.

(“21CF”) spun off the Company to 21CF stockholders and FOX's Class A Common Stock, par value $0.01 per share (the “Class A Common Stock”), and Class B Common Stock, par value $0.01 per share (the “Class B Common Stock” and, together with the Class A Common Stock, the “Common Stock”) began trading independently on The Nasdaq Global Select Market (the “Transaction”).

In connection with the Transaction, the Company entered into the Separation and Distribution Agreement, dated as of March 19, 2019 (the “Separation Agreement”), with 21CF, which effected the internal restructuring (the “Separation”) whereby The Walt Disney Company (“Disney”) acquired the remaining 21CF assets and 21CF became a wholly-owned subsidiary of Disney.

The Separation and the Transaction were effected as part of a series of transactions contemplated by the Amen ded and Restated Merger Agreement and Plan of Merger, dated as of June 20, 2018 (the “21CF Disney Merger Agreement”), by and among 21CF, Disney and certain subsidiaries of Disney.

In connection with the Separation, the Company entered into a tax matters agreement among the Company, Disney and 21CF which governs the parties’ respective rights, responsibilities and obligations with respect to certain tax matters.

Under this agreement, 21CF will generally indemnify the Company against any taxes required to be reported on a consolidated or separate tax return of 21CF and/or any of its subsidiaries, including any taxes resulting from the Separation and the Transaction, and the Company will generally indemnify 21CF against any taxes required to be reported on a separate tax return of the Company or any of its subsidiaries.

Pursuant to the 21CF Disney Merger Agreement, immediately prior to the Transaction, the Company paid 21CF a dividend (the “Dividend”) for the estimated taxes associated with the Transaction.

The final determination of the taxes included an estimated $5.8 billion in respect of the Separation and the Transaction for which the Company is responsible pursuant to the 21CF Disney Merger Agreement and an estimated $700 million prepayment in respect of divestitures (collectively, the “Transaction Tax”).

As a result of the Separation and the Transaction, which was a taxable transaction for which an estimated tax liability of $5.8 billion was included in the Transaction Tax paid by the Company, FOX obtained a tax basis in its assets equal to their respective fair market values.

This resulted in estimated annual tax deductions of approximately $1.5 billion, which is expected to continue over the next several years due to the amortization of the additional tax basis.

Such estimates are subject to revisions, which could be material, based upon the occurrence of future events.

In connection with the Separation, the Company entered into several agreements that govern certain aspects of the Company's relationship wi th 21CF and Disney following the Separation, including the Separation Agreement and a tax matters agreement.

The core transition services agreements entered into in connection with the Separation terminated in accordance with their terms in fiscal 2022.

This amortization is estimated to reduce the Company’s fiscal 2023 cash tax liability by approximately $360 million at the current combined federal and state applicable tax rate of approximately 24%.

Included in the Transaction Tax was the Company’s share of the estimated tax liabilities of $700 million related to the anticipated divestitures by Disney of certain assets, principally the FOX Sports Regional Sports Networks (“RSNs”), which Disney sold during calendar year 2019 (“Divestiture Tax”) .

During fiscal 2021, the Company and Disney reached an agreement to settle the majority of the Divestiture Tax and the Company received $462 million from Disney as reimbursement of the Company’s prepayment based upon the sales price of the RSNs.

This reimbursement was recorded in Other, net in the Statement of Operations (See Note 20—Additional Financial Information to the accompanying Financial Statements under the heading "Other, net”).

The balance of the Divestiture Tax is subject to adjustment in the future, but any such adjustment is not expected to have a material impact on the financial results of the Company.

Basis of Presentation

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Eighteen of the broadcast television stations are affiliated with the FOX Network, 10 are affiliated with MyNetworkTV and one is an independent station.

The segment also includes various production companies that produce content for the Company and third parties.

• Other, Corporate and Eliminations , which principally consists of the FOX Studio Lot, Credible Labs Inc.

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consumer finance marketplace.

We use the term "MVPDs" to refer collectively to traditional MVPDs and virtual MVPDs.

The Company’s Cable Network Programming and Television segments derive the majority of their revenues from affiliate fees for the transmission of content and advertising sales.

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Affiliate fees primarily include (i) monthly subscriber-based license and retransmission consent fees paid by programming distributors that carry our cable networks and our owned and operated television stations and (ii) fees received from non-owned and operated television stations that are affiliated with the FOX Network.

law governing retransmission consent provides a mechanism for the television stations owned by the Company to seek and obtain payment from traditional MVPDs that carry the Company's broadcast signals.

law governing retransmission consent provides a mechanism for the television stations owned by the Company to seek and obtain payment from MVPDs that carry the Company’s broadcast signals.

The Company’s revenues are impacted by rate changes, changes in the number of subscribers to the Company’s content and changes in the expenditures by advertisers.

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The cable network programming and television industries continue to evolve rapidly, with changes in technology leading to alternative methods for the delivery and storage of digital content.

These technological advancements have driven changes in consumer behavior as consumers seek more control over when, where and how they consume content.

Consumer preferences have evolved toward alternatives, including direct-to-consumer offerings.

These technological advancements have driven changes in consumer behavior as consumers now have more control over when, where and how they consume content.

Consumer preferences have evolved toward lower cost alternatives, including direct-to-consumer offerings.

These changes in technologies and consumer behavior have contributed to declines in the number of subscribers to MVPD services, and these declines are expected to continue and possibly accelerate in the future.

At the same time, technological changes have affected advertisers' options for reaching their target audiences.

At the same time, technological changes have increased advertisers’ options for reaching their target audiences.

There has been a substantial increase in the availability of content with reduced advertising or without advertising at all.

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Overview —The Company’s revenues increased 7% for fiscal 2023, as compared to fiscal 2022, due to higher affiliate fee, advertising and other revenues.

The increase in affiliate fee revenue was primarily due to higher average rates per subscriber, led by contractual rate increases on existing affiliate agreements and from affiliate agreement renewals, partially offset by a lower average number of subscribers.

Also impacting the increase was the absence of prior year affiliate fee credits as a result of the coronavirus disease 2019 ("COVID-19") related under-delivery of college football games.

The increase in advertising revenue was primarily due to higher pricing at FOX Sports and FOX News Media, growth at TUBI, and a higher number of live events at FOX Sports due to the impact of COVID-19 in fiscal 2021.

Partially offsetting this increase was lower political advertising revenue due to the absence of the 2020 presidential and congressional elections.

The increase in other revenues was primarily due to higher sports sublicensing revenues which were impacted by COVID-19 in fiscal 2021, the impact of acquisitions of entertainment production companies in fiscal 2022 (See Note 3—Acquisitions, Disposals and Other Transactions to the accompanying Financial Statements) and higher FOX Nation subscription revenues, partially offset by the impact of the divestiture of the Company's sports marketing businesses in fiscal 2021.

Operating expenses increased 13% for fiscal 2022, as compared to fiscal 2021, primarily due to higher sports programming rights amortization and production costs related to NFL, Major League Baseball ("MLB") and college football content, including a higher number of live events due to the impact of COVID-19 in fiscal 2021.

Also impacting the increase was increased digital investment at TUBI and FOX News Media, costs associated with the launch of the United States Football League ("USFL") and higher entertainment programming rights amortization due to more hours of original scripted programming as compared to fiscal 2021 which was impacted by COVID-19.

This increase was partially offset by the absence of events that were shifted into fiscal 2021 from fiscal 2020 as a result of COVID-19 rescheduling, including National Association of Stock Car Auto Racing ("NASCAR") Cup Series races and additional MLB regular season games, and the impact of the divestiture of the Company's sports marketing businesses in fiscal 2021.

Selling, general and administrative expenses increased 6% for fiscal 2022, as compared to fiscal 2021, primarily due to higher technology costs related to the Company's digital initiatives and higher marketing expenses at FOX News Media, partially offset by the impact of the divestiture of the Company's sports marketing businesses in fiscal 2021.

Depreciation and amortization —Depreciation and amortization expense increased 21% for fiscal 2022, as compared to fiscal 2021, primarily due to assets placed into service during the fourth quarter of fiscal 2021 for the Company's standalone broadcast technical facilities and the impact of acquisitions of entertainment production companies in fiscal 2022.

The increase in affiliate fee revenue was primarily due to higher fees received from television stations that are affiliated with the FOX Network and higher average rates per subscriber, led by contractual rate increases on existing affiliate agreements and from affiliate agreement renewals, partially offset by a lower average number of subscribers across all networks.

The increase in advertising revenue was primarily due to revenues resulting from the broadcasts of Super Bowl LVII and the FIFA Men’s World Cup , continued growth at Tubi, higher political advertising revenue at the FOX Television Stations principally due to the November 2022 U.S.

midterm elections, and additional NFL post-season games.

Partially offsetting this increase was the absence of NFL Thursday Night Football (“ TNF ”) and lower ratings at the FOX Network in the current year.

The increase in other revenues was primarily due to the full year impact of acquisitions of entertainment production companies in fiscal 2022 and higher FOX Nation subscription revenues.

Operating expenses increased 6% for fiscal 2023, as compared to fiscal 2022, primarily due to higher sports programming rights amortization and production costs driven by the broadcasts of Super Bowl LVII and the FIFA Men’s World Cup and additional post-season NFL and Major League Baseball (“MLB”) content, as well as increased digital investment in Tubi and at FOX News Media.

Partially offsetting this increase was the absence of TNF and lower entertainment marketing and production costs.

Selling, general and administrative expenses increased 7% for fiscal 2023, as compared to fiscal 2022, primarily due to higher legal costs at FOX News Media and continued growth at Tubi.

Depreciation and amortization —Depreciation and amortization expense increased 13% for fiscal 2023, as compared to fiscal 2022, primarily due to an increase in broadcast production assets at FOX Sports,

increased spending as a result of digital initiatives and the full year impact of the fiscal 2022 acquisitions of entertainment production companies.

Impairment and restructuring charges —See Note 4—Restructuring Programs to the accompanying Financial Statements.

Interest expense, net —Interest expense, net decreased 5% for fiscal 2022, as compared to fiscal 2021, primarily due to the repayment of $750 million of senior notes in January 2022 (See Note 9— Borrowings to the accompanying Financial Statements).

Interest expense, net —Interest expense, net decreased 41% for fiscal 2023, as compared to fiscal 2022, primarily due to higher interest income as a result of higher interest rates.

Other, net —See Note 20—Additional Financial Information to the accompanying Financial Statements under the heading “Other, net.”

Income tax expense —The Company's tax provision and related effective tax rate of 27% for fiscal 2022 was higher than the statutory rate of 21% primarily due to state taxes and a remeasurement of the Company's net deferred tax assets associated with changes in the mix of jurisdictional earnings.

The Company's tax provision and related effective tax rate of 25% for fiscal 2021 was higher than the statutory rate of 21% primarily due to state taxes, partially offset by a benefit from the reduction of uncertain tax positions for state tax audits.

Net income —Net income decreased 44% for fiscal 2022, as compared to fiscal 2021, primarily due the change in fair value of the Company's investment in Flutter Entertainment plc and the absence of the reimbursement from Disney of $462 million related to the substantial settlement of the Company's prepayment of its share of the Divestiture Tax, which occurred during fiscal 2021 (See Note 20—Additional Financial Information to the accompanying Financial Statements under the heading "Other, net").

Income tax expense — The Company’s tax provision and related effective tax rate of 28% for fiscal 2023 was higher than the statutory rate of 21% primarily due to state taxes, a valuation allowance recorded against net operating losses and tax credits and other permanent items.

The Company’s tax provision and related effective tax rate of 27% for fiscal 2022 was higher than the statutory rate of 21% primarily due to state taxes and a remeasurement of the Company’s net deferred tax assets associated with changes in the mix of jurisdictional earnings.

Net income —Net income increased 2% for fiscal 2023, as compared to fiscal 2022, primarily due to a gain recognized on the change in fair value of the Company’s investment in Flutter Entertainment plc and higher Segment EBITDA (as defined below), partially offset by legal settlement costs at FOX News Media (See Note 20—Additional Financial Information to the accompanying Financial Statements under the heading “Other, net”) and restructuring charges (See Note 4—Restructuring Programs to the accompanying Financial Statements).

Results of Operations—Fiscal 2022 versus Fiscal 2021

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** not meaningful

Overview —The Company's revenues increased 5% for fiscal 2021, as compared to fiscal 2020, as higher affiliate fee and advertising revenues were partially offset by lower other revenue.

The increase in affiliate fee revenue was primarily attributable to higher average rates due to rate increases from affiliate agreement renewals and contractual rate increases on existing affiliate agreements, partially offset by the impact of a lower average number of subscribers and estimated affiliate fee credits provided as a result of cancelled live college football games due to COVID-19.

The increase in advertising revenue was primarily due to the impact of the consolidation of TUBI, which experienced record viewership and record advertising revenue, higher political advertising revenue at the FOX Television Stations related to the 2020 presidential and congressional elections, higher linear and digital advertising revenue from the 2020 presidential election coverage at FOX News Media, and the rotating broadcast of one additional NFL Divisional playoff game, partially offset by the comparative effect of the broadcast of the NFL's Super Bowl LIV in February 2020 (the "Super Bowl") and lower ratings at the FOX Network due in part to COVID-19-impacted schedules in fiscal 2021.

Operating expenses increased 3% for fiscal 2021, as compared to fiscal 2020, primarily due to the impact of the consolidation of TUBI, partially offset by lower sports programming rights amortization and production costs, including the absence of the broadcast of the Super Bowl in fiscal 2021 and the cancellation of live college football games, and lower entertainment programming rights amortization due to fewer hours of original scripted programming as a result of COVID-19.

Partially offsetting lower sports programming rights amortization and production costs were contractual rate increases for NFL, MLB and college football content, the rotating broadcast of one additional NFL Divisional playoff game and a higher volume of NASCAR races due to fewer races following the COVID-19-impacted schedule in fiscal 2020.

Selling, general and administrative expenses increased 4% for fiscal 2021, as compared to fiscal 2020, primarily due to higher legal and marketing expenses and the impact of acquisitions that occurred in fiscal 2020 (the "Fiscal 2020 Acquisitions") (See Note 3—Acquisitions, Disposals and Other Transactions to the

accompanying Financial Statements), partially offset by lower professional fees, lower bad debt expense and lower marketing costs associated with the absence of the Super Bowl in the current year.

Depreciation and amortization —Depreciation and amortizati on expense increased 16% for fiscal 2021, as compared to fiscal 2020, primarily due to assets placed into service as the Company transitioned from service agreements in connection with the Separation and the Fiscal 2020 Acquisitions.

Overview —The Company’s revenues increased 8% for fiscal 2022, as compared to fiscal 2021, due to higher affiliate fee, advertising and other revenues.

Also impacting the increase was the absence of prior year affiliate fee credits as a result of the COVID-19 related under-delivery of college football games.

The increase in advertising revenue was primarily due to higher pricing at FOX Sports and FOX News Media, growth at Tubi, and a higher number of live events at FOX Sports due to the impact of COVID-19 in fiscal 2021.

Partially offsetting this increase was lower political advertising revenue due to the absence of the 2020 presidential and congressional elections.

Operating expenses increased 13% for fiscal 2022, as compared to fiscal 2021, primarily due to higher sports programming rights amortization and production costs related to NFL, MLB and college football content, including a higher number of live events due to the impact of COVID-19 in fiscal 2021.

Also impacting the increase was increased digital investment at Tubi and FOX News Media, costs associated with the launch of the United States Football League (“USFL”) and higher entertainment programming rights amortization due to more hours of original scripted programming as compared to fiscal 2021 which was impacted by COVID-19.

This increase was partially offset by the absence of events that were shifted into fiscal 2021 from fiscal 2020 as a result of COVID-19 rescheduling, including National Association of Stock Car Auto Racing (“NASCAR”) Cup Series races and additional MLB regular season games, and the impact of the divestiture of the Company’s sports marketing businesses in fiscal 2021.

Selling, general and administrative expenses increased 6% for fiscal 2022, as compared to fiscal 2021, primarily due to higher technology costs related to the Company’s digital initiatives and higher marketing expenses at FOX News Media, partially offset by the impact of the divestiture of the Company’s sports marketing businesses in fiscal 2021.

Depreciation and amortization —Depreciation and amortization expense increased 21% for fiscal 2022, as compared to fiscal 2021, primarily due to assets placed into service during the fourth quarter of fiscal 2021 for the Company’s standalone broadcast technical facilities and the impact of acquisitions of entertainment production companies in fiscal 2022.

Impairment and restructuring charges —See Note 4—Restructuring Programs to the accompanying Financial Statements.

Interest expense, net —Interest expense, net increased 17% million for fiscal 2021, as compared to fiscal 2020, due to lower interest income primarily due to lower interest rates and higher interest expense primarily due to the issuance of $1.2 billion of senior notes in April 2020 (See Note 9—Borrowings to the accompanying Financial Statements under the heading "Public Debt – Senior Notes Issued" for additional information).

Interest expense, net —Interest expense, net decreased 5% for fiscal 2022, as compared to fiscal 2021, primarily due to the repayment of $750 million of senior notes in January 2022.

Other, net —See Note 20—Additional Financial Information to the accompanying Financial Statements under the heading “Other, net.”

Income tax expense —The Company's tax provision and related effective tax rate of 25% for fiscal 2021 was higher than the statutory rate of 21% primarily due to state taxes, partially offset by a benefit from the reduction of uncertain tax positions for state tax audits.

The Company's tax provision and related effective tax rate of 27% for fiscal 2020 was higher than the statutory rate of 21% primarily due to state taxes and other permanent items.

See Note 16—Income Taxes to the accompanying Financial Statements.

Net income —Net income increased $1.1 billion for fiscal 2021 as compared to fiscal 2020, primarily due the receipt of the $462 million reimbursement from Disney related to the Divestiture Tax (See Note 1—Description of Business and Basis of Presentation to the accompanying Financial Statements), higher Segment EBITDA (as defined below) at the Cable Network Programming and Television segments and higher net gains on investments in equity securities (See Note 20—Additional Financial Information to the accompanying Financial Statements under the heading "Other, net"), partially offset by lower restructuring charges due to the contract termination costs related to a programming rights agreement with the United States Go lf Association ("USGA") in fiscal 2020 (See Note 4—Restructuring Programs to the accompanying Financial Statements under the heading "Fiscal 2020") and higher income tax expense.

Income tax expense —The Company’s tax provision and related effective tax rate of 27% for fiscal 2022 was higher than the statutory rate of 21% primarily due to state taxes and a remeasurement of the Company’s net deferred tax assets associated with changes in the mix of jurisdictional earnings.

The Company’s tax provision and related effective tax rate of 25% for fiscal 2021 was higher than the statutory rate of 21% primarily due to state taxes, partially offset by a benefit from the reduction of uncertain tax positions for state tax audits.

Net income —Net income decreased 44% for fiscal 2022, as compared to fiscal 2021, primarily due to the change in fair value of the Company’s investment in Flutter Entertainment plc and the absence of the reimbursement from Disney of $462 million related to the substantial settlement of the Company’s prepayment of its share of the Divestiture Tax, which occurred during fiscal 2021 (See Note 20—Additional Financial Information to the accompanying Financial Statements under the heading “Other, net”).

Segment Analysis

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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) benefit.

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.

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$ 3,191 $ 2,955 $ 236 8 %

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

Cable Network Programming (44% of the Company's revenues in fiscal 2022 and 2021)

Cable Network Programming (41% and 44% of the Company’s revenues in fiscal 2023 and 2022, respectively)

For the years ended June 30,

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Segment EBITDA $ 2,472 $ 2,934 $ (462) (16) %

Revenues at the Cable Network Programming segment increased for fiscal 2022, as compared to fiscal 2021, due to higher affiliate fee, advertising and other revenues.

The increase in affiliate fee revenue was primarily due to contractual rate increases on existing affiliate agreements and from affiliate agreement renewals, partially offset by a lower average number of subscribers.

Also impacting the increase was the absence of fiscal 2021 affiliate fee credits as a result of the COVID-19 related under-delivery of college football games.

The decrease in the average number of subscribers was due to a reduction in traditional MVPD subscribers, partially offset by an increase in virtual MVPD subscribers.

The increase in advertising revenue was primarily due to higher pricing at FOX News Media and higher pricing and an increase in the number of live events at the national sports networks, primarily the result of additional MLB postseason games and the return of a full college football schedule that was shortened due to COVID-19 in fiscal 2021.

This increase was partially offset by lower political advertising revenue due to the absence of the 2020 presidential elections.

The increase in other revenues was primarily due to higher sports sublicensing revenues, which were impacted by COVID-19

in fiscal 2021, and higher FOX Nation subscription revenues, partially offset by the impact of the divestiture of the Company's sports marketing businesses in fiscal 2021.

Cable Network Programming Segment EBITDA increased for fiscal 2022, as compared to fiscal 2021, primarily due to the revenue increases noted above, partially offset by higher expenses.

Operating expenses increased due to higher sports programming rights amortization and production costs primarily related to the return of a full college football and basketball season as a result of the impact of COVID-19 in fiscal 2021, increased investment in digital growth initiatives at FOX News Media and costs associated with the launch of USFL.

This increase was partially offset by the absence of events that were shifted into fiscal 2021 from fiscal 2020 as a result of COVID-19 rescheduling, including NASCAR Cup Series races and additional MLB regular season games, and the impact of the divestiture of the Company's sports marketing businesses in fiscal 2021.

Selling, general and administrative expenses increased principally due to higher marketing expenses at FOX News Media, partially offset by the impact of the divestiture of the Company's sports marketing businesses in fiscal 2021.

Television (55% of the Company's revenues in fiscal 2022 and 2021)

Revenues at the Cable Network Programming segment decreased for fiscal 2023, as compared to fiscal 2022, due to lower affiliate fee and advertising revenues, partially offset by higher other revenues.

The decrease in affiliate fee revenue was primarily due to a decrease in the average number of subscribers, partially offset by higher average rates per subscriber, led by contractual rate increases on existing affiliate agreements and from affiliate agreement renewals.

The decrease in advertising revenue was primarily due to lower pricing in the direct response marketplace at FOX News Media, partially offset by the broadcast of the FIFA Men’s World Cup at the national sports networks in the current year.

The increase in other revenues was primarily due to higher FOX Nation subscription revenues and higher sports sublicensing revenues.

Cable Network Programming Segment EBITDA decreased for fiscal 2023, as compared to fiscal 2022, due to the revenue decreases noted above and higher expenses.

Operating expenses increased primarily due to higher sports programming rights amortization led by the broadcast of the FIFA Men’s World Cup , the renewed MLB contract and a higher volume of college football games at the national sports networks, and higher employee related costs and increased digital investment at FOX News Media.

Selling, general and administrative expenses increased principally due to higher legal costs partially offset by lower marketing costs at FOX News Media and higher costs associated with the expansion of the USFL.

Television (58% and 55% of the Company’s revenues in fiscal 2023 and 2022, respectively)

For the years ended June 30,

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Segment EBITDA $ 1,009 $ 347 $ 662 **

** not meaningful

Revenues at the Television segment increased for fiscal 2023, as compared to fiscal 2022, due to higher advertising, affiliate fee and other revenues.

The increase in advertising revenue was primarily attributable to higher pricing as well as the return of a full schedule of college football in fiscal 2022 at FOX Sports and continued growth at TUBI, partially offset by lower political advertising revenue at the FOX Television Stations due to the absence of the 2020 presidential and congressional elections.

midterm elections, and additional NFL post-season games.

Partially offsetting this increase was the absence of TNF and lower ratings at the FOX Network in the current year.

The increase in affiliate fee revenue was primarily due to higher fees received from television stations that are affiliated with the FOX Network and higher average rates per subscriber partially offset by a lower average number of subscribers at the Company’s owned and operated television stations.

The increase in other revenues was primarily due to the current year impact of acquisitions of entertainment production companies.

Television Segment EBITDA decreased for fiscal 2022, as compared to fiscal 2021, as the revenue increases noted above were more than offset by higher expenses.

Operating expenses increased primarily due to higher sports programming rights amortization and production costs related to NFL, MLB and college football content, including a higher number of college football games as compared to the COVID-19 impacted fiscal 2021, increased digital investment at TUBI and higher entertainment programming rights amortization due to more hours of original scripted programming as compared to fiscal 2021, which was impacted by COVID-19.

Selling, general and administrative expenses increased primarily due to higher technology costs related to the Company's digital initiatives.

The increase in other revenues was primarily due to the full year impact of acquisitions of entertainment production companies in fiscal 2022.

Television Segment EBITDA increased for fiscal 2023, as compared to fiscal 2022, primarily due to the revenue increases noted above, partially offset by higher expenses.

Operating expenses increased primarily due to higher sports programming rights amortization and production costs driven by the broadcast of Super Bowl LVII , NFL and MLB content, led by a higher volume of post-season games, and the broadcast of the FIFA Men’s World Cup , as well as increased digital investment in Tubi.

Partially offsetting this increase was the absence of TNF and lower entertainment marketing and production costs.

Selling, general and administrative expenses increased primarily due to continued growth at Tubi.

Other, Corporate and Eliminations (1% of the Company’s revenues for fiscal 2023 and 2022)

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Segment EBITDA $ (290) $ (326) $ 36 11 %

Revenues at the Other, Corporate and Eliminations segment for fiscal 2022 and 2021 include revenues generated by Credible and the operation of the FOX Studios lot for third parties.

Operating expenses for fiscal 2022 and 2021 include advertising and promotional expenses at Credible and the costs of operating the FOX Studios lot.

Selling, general and administrative expenses for fiscal 2022 and 2021 primarily relate to employee costs and professional fees and the costs of operating the FOX Studios lot.

Revenues at the Other, Corporate and Eliminations segment for fiscal 2023 and 2022 include revenues generated by Credible and the operation of the FOX Studio lot for third parties.

Operating expenses for fiscal 2023 and 2022 include advertising and promotional expenses at Credible.

Selling, general and administrative expenses for fiscal 2023 and 2022 primarily relate to employee costs, professional fees and the costs of operating the FOX Studio lot.

Fiscal 2022 versus Fiscal 2021

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

Cable Network Programming (44% and 45% of the Company's revenues in fiscal 2021 and 2020, respectively)

Cable Network Programming (44% of the Company’s revenues in fiscal 2022 and 2021)

For the years ended June 30,

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Segment EBITDA $ 2,934 $ 2,876 $ 58 2 %

Revenues at the Cable Network Programming segment increased for fiscal 2021 as compared to fiscal 2020 as the increases in advertising and affiliate fee revenues were partially offset by lower other revenue.

The increase in advertising revenue was primarily due to higher linear and digital advertising revenue from the 2020 presidential election coverage at FOX News Media.

The increase in affiliate fee revenue was primarily due to rate increases from affiliate agreement renewals and contractual rate increases on existing affiliate agreements, partially offset by a lower average number of subscribers and estimated affiliate fee credits provided as a result of the cancellation of live college football games due to COVID-19.

Revenues at the Cable Network Programming segment increased for fiscal 2022, as compared to fiscal 2021, due to higher affiliate fee, advertising and other revenues.

Also impacting the increase was the absence of fiscal 2021 affiliate fee credits as a result of the COVID-19 related under-delivery of college football games.

The decrease in the average number of subscribers was due to a reduction in traditional MVPD subscribers, partially offset by an increase in virtual MVPD subscribers.

The decrease in other revenues was primarily attributable to lower sports sublicensing revenues and lower revenues generated from Premier Boxing Champions ("PBC") pay-per-view events due in part to COVID-19.

This increase was partially offset by lower political advertising revenue due to the absence of the 2020 presidential elections.

The increase in other revenues was primarily due to higher sports sublicensing revenues, which were impacted by COVID-19 in fiscal 2021, and higher FOX Nation subscription revenues, partially offset by the impact of the divestiture of the Company’s sports marketing businesses in fiscal 2021.

Cable Network Programming Segment EBITDA increased for fiscal 2022, as compared to fiscal 2021, primarily due to the revenue increases noted above, partially offset by higher expenses.

Selling, general and administrative expenses increased primarily due to higher legal and marketing expenses, including promotional expenses associated with FOX Nation.

Operating expenses decreased primarily due to lower sports programming rights amortization and production costs driven by cancelled live games in the first half of fiscal 2021, partially offset by the shift of NASCAR races and MLB regular season games into fiscal 2021 as a result of COVID-19 and contractual rate increases for MLB and college football content.

Television (55% and 54% of the Company's revenues in fiscal 2021 and 2020, respectively)

Television (55% of the Company’s revenues in fiscal 2022 and 2021)

For the years ended June 30,

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Segment EBITDA $ 347 $ 555 $ (208) (37) %

Revenues at the Television segment increased for fiscal 2021, as compared to fiscal 2020, due to higher affiliate fee and other revenues partially offset by lower advertising revenue.

The increase in affiliate fee revenue was primarily due to higher fees received from television stations that are affiliated with the FOX Network and higher average rates partially offset by a lower average number of subscribers at the Company's owned and

operated television stations.

The increase in other revenues was primarily due to higher revenues at the Company's entertainment production companies.

The decrease in advertising revenue was primarily due to the comparative effect of the broadcast of the Super Bowl in fiscal 2020 and lower ratings at the FOX Network due in part to COVID-19-impacted schedules partially offset by the impact of the consolidation of TUBI, higher political advertising revenue at the FOX Television Stations related to the 2020 presidential and congressional elections and the rotating broadcast of one additional NFL Divisional playoff game.

Television Segment EBITDA increased for fiscal 2021, as compared to fiscal 2020, due to the revenue increases noted above partially offset by higher expenses.

Operating expenses increased primarily due to the impact of the consolidation of TUBI partially offset by lower sports programming rights amortization and production costs, including the absence of the broadcast of the Super Bowl in fiscal 2021, and lower entertainment programming rights amortization due to fewer hours of original scripted programming as a result of COVID-19.

Partially offsetting the decrease in sports programming rights amortization and production costs were contractual rate increases for NFL, MLB and college football content and the rotating broadcast of one additional NFL Divisional playoff game.

Selling, general and administrative expenses increased primarily due to the Fiscal 2020 Acquisitions (See Note 3— Acquisitions, Disposals and Other Transactions to the accompanying Financial Statements) partially offset by lower bad debt expense and lower marketing costs associated with the absence of the Super Bowl in fiscal 2021.

Revenues at the Television segment increased for fiscal 2022, as compared to fiscal 2021, due to higher advertising, affiliate fee and other revenues.

The increase in advertising revenue was primarily attributable to higher pricing as well as the return of a full schedule of college football in fiscal 2022 at FOX Sports and continued growth at Tubi, partially offset by lower political advertising revenue at the FOX Television Stations due to the absence of the 2020 presidential and congressional elections.

The increase in affiliate fee revenue was primarily due to higher fees received from television stations that are affiliated with the FOX Network, and higher average rates per subscriber partially offset by a lower average number of subscribers at the Company’s owned and operated television stations.

The increase in other revenues was primarily due to the current year impact of acquisitions of entertainment production companies.

Television Segment EBITDA decreased for fiscal 2022, as compared to fiscal 2021, as the revenue increases noted above were more than offset by higher expenses.

Operating expenses increased primarily due to higher sports programming rights amortization and production costs related to NFL, MLB and college football content, including a higher number of college football games as compared to the COVID-19 impacted fiscal 2021, increased digital investment at Tubi and higher entertainment programming rights amortization due to more hours of original scripted programming as compared to fiscal 2021, which was impacted by COVID-19.

Selling, general and administrative expenses increased primarily due to higher technology costs related to the Company’s digital initiatives.

Other, Corporate and Eliminations (1% of the Company’s revenues for fiscal 2022 and 2021)

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Segment EBITDA $ (326) $ (344) $ 18 5 %

Revenues at the Other, Corporate and Eliminations segment increased for fiscal 2021, as compared to fiscal 2020, primarily due to the impact of the consolidation of Credible in the second quarter of fiscal 2020 and growth at Credible.

Operating expenses increased primarily due to the impact of the consolidation of Credible and growth at Credible.

Selling, general and administrative expenses decreased primarily due to lower professional fees.

Revenues at the Other, Corporate and Eliminations segment for fiscal 2022 and 2021 include revenues generated by Credible and the operation of the FOX Studio lot for third parties.

Operating expenses for fiscal 2022 and 2021 include advertising and promotional expenses at Credible and the costs of operating the FOX Studio lot.

Selling, general and administrative expenses for fiscal 2022 and 2021 primarily relate to employee costs and professional fees and the costs of operating the FOX Studio lot.

Non-GAAP Financial Measures

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Management believes that information about Adjusted EBITDA assists all users of the Company’s Financial Statements by allowing them to evaluate changes in the operating results of the Company’s portfolio of businesses separate from non-operational factors that affect Net income, thus providing insight into both operations and the other factors that affect reported results.

Adjusted EBITDA provides management, investors and equity analysts a measure to analyze the operating performance of the Company's business and its enterprise value against historical data and competitors' data, although historical results, including Adjusted EBITDA, may not be indicative of future results (as operating performance is highly contingent on many factors, including customer tastes and preferences and the impact of COVID-19 and other widespread health emergencies or pandemics and measures to contain their spread).

Adjusted EBITDA 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).

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

generally accepted accounting principles (“GAAP”).

In addition, this measure does not reflect cash available to fund requirements and excludes items, such as depreciation and amortization and

impairment charges, which are significant components in assessing the Company's financial performance.

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.

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acquisitions;

interest and dividend payments;

income taxes, interest and dividend payments;

debt repayments;

legal settlements;

and stock repurchases.

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Net cash provided by operating activities $ 1,800 $ 1,884

The decrease in net cash provided by operating activities during fiscal 2022, as compared to fiscal 2021, was primarily due to higher sports payments and entertainment production spending as well as lower Adjusted EBITDA.

The decrease in net cash provided by operating activities during fiscal 2023, as compared to fiscal 2022, was primarily due to legal settlement costs (See Note 14—Commitments and Contingencies to the accompanying Financial Statements), partially offset by higher Adjusted EBITDA, lower sports rights payments primarily due to the absence of TNF and lower entertainment programming costs.

Net cash used in investing activities for fiscal 2023 and 2022 was as follows (in millions):

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Net cash used in investing activities $ (438) $ (513)

The decrease in net cash used in investing activities during fiscal 2022, as compared to fiscal 2021, was primarily due to lower capital expenditures in connection with establishing the Company's standalone broadcast technical facilities placed into service in fiscal 2021, partially offset by higher fiscal 2022 acquisitions (See Note 3—Acquisitions, Disposals, and Other Transactions to the accompanying Financial Statements).

The decrease in net cash used in investing activities during fiscal 2023, as compared to fiscal 2022, was primarily due to the absence of acquisitions and dispositions, partially offset by an increase in capital expenditures and higher investments in equity securities.

Net cash used in financing activities for fiscal 2023 and 2022 was as follows (in millions):

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Net cash used in financing activities $ (2,290) $ (2,057)

The increase in net cash used in financing activities during fiscal 2022, as compared to fiscal 2021, was primarily due to the $750 million repayment of senior notes that matured in January 2022 (See Note 9—Borrowings to the accompanying Financial Statements) and the absence of cash received from Disney in fiscal 2021, including the $462 million reimbursement related to the Divestiture Tax.

The increase in net cash used in financing activities during fiscal 2023, as compared to fiscal 2022, was primarily due to activity under the stock repurchase program, including the $1 billion accelerated share repurchase agreement (See Note 11—Stockholders’ Equity to the accompanying Financial Statements under the heading “Stock Repurchase Program”), partially offset by the absence of the $750 million repayment of senior notes that matured in January 2022.

Stock Repurchase Program

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The dividend declared is payable on September 27, 2023 with a record date for determining dividend entitlements of August 30, 2023.

Based on the number of shares outstanding as of June 30, 2022 , and the new annual dividend rate stated above, the total aggregate cash dividends expected to be paid to stockholders in fiscal 2023 is approximately $275 million, which is consistent with fiscal 2022.

Based on the number of shares outstanding as of June 30, 2023 , and the new annual dividend rate stated above, the total aggregate cash dividends expected to be paid to stockholders in fiscal 2024 is approximately $260 million.

Sources and Uses of Cash—Fiscal 2022 vs.

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Net cash provided by operating activities $ 1,884 $ 2,639

The increase in net cash provided by operating activities during fiscal 2021, as compared to fiscal 2020, was comprised of higher Segment EBITDA and higher programming amortization over cash payments at the Television segment partially offset by higher advertising and affiliate billings along with higher tax payments.

Net cash used in investing activities for fiscal 2022 and 2021 was as follows (in millions):

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Net cash used in investing activities $ (513) $ (528)

Net cash used in investing activities during fiscal 2021 was primarily comprised of payments related to investments made in connection with establishing the Company's standalone broadcast technical facilities as compared to the acquisitions of TUBI, three television stations and Credible during fiscal 2020.

Net cash (used in) provided by financing activities for fiscal 2021 and 2020 was as follows (in millions):

The decrease in net cash used in investing activities during fiscal 2022, as compared to fiscal 2021, was primarily due to lower capital expenditures in connection with establishing the Company’s standalone broadcast technical facilities placed into service in fiscal 2021, partially offset by higher fiscal 2022 acquisitions (See Note 3—Acquisitions, Disposals, and Other Transactions to the accompanying Financial Statements).

Net cash used in financing activities for fiscal 2022 and 2021 was as follows (in millions):

For the years ended June 30,

Net cash (used in) provided by financing activities $ (870) $ 146

Net cash used in financing activities during fiscal 2021 was primarily comprised of repurchases of shares of the Company's Common Stock and dividends paid to stockholders of $1.3 billion partially offset by the $462 million reimbursement from Disney related to the Divestiture Tax.

The net cash provided by financing activities during fiscal 2020 was primarily due to the April 2020 issuance of $1.2 billion of senior notes, partially offset by repurchases of shares of the Company's Common Stock and dividends paid of $935 million to stockholders during fiscal 2020 .

Net cash used in financing activities $ (2,057) $ (870)

The increase in net cash used in financing activities during fiscal 2022, as compared to fiscal 2021, was primarily due to the $750 million repayment of senior notes that matured in January 2022 and the absence of cash received from Disney in fiscal 2021, including the $462 million reimbursement related to the Divestiture Tax.

Debt Instruments

The following table summarizes cash from borrowings and cash (used in) repayment of borrowings for fiscal 2022, 2021 and 2020:

For the years ended June 30,

2022 2021 2020

(in millions)

Notes due 2025 and 2030 (a)

$ — $ — $ 1,191

Notes due 2022, 2024, 2029, 2039 and 2049 (b)

Total borrowings $ (750) $ — $ 1,191

See Note 9—Borrowings to the accompanying Financial Statements under the heading "Public Debt - Senior Notes Issued."

In January 2022, $750 million of 3.666% senior notes matured and were repaid in full (See Note 9—Borrowings to the accompanying Financial Statements).

Borrowings include senior notes (See Note 9—Borrowings to the accompanying Financial Statements).

During fiscal 2022, cash used in the repayment of borrowings was $750 Million for the 3.666% senior notes which matured and were repaid in full in January 2022.

Ratings of the Senior Notes

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Revolving Credit Agreement

The Company has an unused five-year $1.0 billion unsecured revolving credit facility with a maturity date of March 2024 (See Note 9—Borrowings to the accompanying Financial Statements).

In June 2023, the Company entered into an unsecured $1.0 billion revolving credit facility with a maturity date of June 2028 (See Note 9—Borrowings to the accompanying Financial Statements).

Commitments and Contingencies

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These firm commitments secure the future rights to various assets and services to be used in the normal course of operations.

For additional details on commitments and contingencies see Note 14—Commitments and Contingencies to the accompanying Financial Statements under the headings "Operating leases," "Licensed Programming," "Other commitments and contractual obligations" and "Contingencies."

For additional details on commitments and contingencies see Note 14—Commitments and Contingencies to the accompanying Financial Statements under the headings “Licensed Programming,” “Other commitments and contractual obligations” and “Contingencies.”

Pension and other postretirement benefits and uncertain tax benefits

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The majority of these contributions were voluntarily made to improve the funded status of the plans.

Future plan contributions are dependent upon actual plan asset returns, interest rates and statutory requirements.

Future plan contributions are dependent upon actual plan asset returns, interest

rates and statutory requirements.

Assuming that actual plan asset returns are consistent with the Company’s expected plan returns in fiscal 2024 and beyond and that interest rates remain constant, the Company would not be required to make any material contributions to its pension plans for the immediate future.

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The Company considers the terms of each arrangement to determine the appropriate accounting treatment.

The Company generates advertising revenue from sales of commercial time within the Company's network programming to be aired by television networks and cable channels, and from sales of advertising on the Company's owned and operated television stations and various digital properties.

The Company generates advertising revenue from sales of commercial time within the Company’s network programming, and from sales of advertising on the Company’s owned and operated television stations and various digital properties.

Advertising revenue from customers, primarily advertising agencies, is recognized as the commercials are aired.

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Revenues for any audience deficiencies are deferred until the guaranteed number of impressions is met, by providing additional advertisements.

Advertising contracts, which are generally short-term, are billed monthly for the spots aired during the month, with payments due shortly after the invoice date.

The Company generates affiliate fee revenue from agreements with traditional and virtual MVPDs for cable network programming and for the broadcast of the Company's owned and operated television stations.

In addition, the Company generates affiliate fee revenue from agreements with independently owned television stations that are affiliated with the FOX Network and receives retransmission consent fees from traditional and virtual MVPDs for their signals.

Affiliate fee revenue is recognized at a point in time when the network programming is made available to the customer.

Advertising contracts, which are generally short-term, are billed monthly for the spots aired during the month, with payments due shortly thereafter.

The Company generates affiliate fee revenue from agreements with MVPDs for cable network programming and for the broadcast of the Company’s owned and operated television stations.

Affiliate fee revenue is recognized as we continuously make the network programming available to the customer over the term of the agreement.

For contracts with affiliate fees based on the number of the affiliate’s subscribers, revenues are recognized based on the contractual rate multiplied by the estimated number of subscribers each period.

For contracts with fixed affiliate fees, revenues are recognized based on the relative standalone selling price of the network programming provided over the contract term, which generally reflects the invoiced amount.

Affiliate contracts are generally multi-year contracts with payments due monthly.

The Company classifies the amortization of cable distribution investments (capitalized fees paid to traditional MVPDs to facilitate carriage of a cable network) against affiliate fee revenue.

Affiliate contracts are generally multi-year contracts billed monthly with payments due shortly thereafter.

The Company classifies the amortization of cable distribution investments (capitalized fees paid to MVPDs to facilitate carriage of a cable network) against affiliate fee revenue.

The Company amortizes the cable distribution investments on a straight-line basis over the contract period.

Licensed and Owned Programming

The Company incurs costs to license programming rights and to produce owned programming.

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Licensed programming is recorded at the earlier of payment or when the license period has begun, the cost of the program is known or reasonably determinable and the program is accepted and available for airing.

Licensed programming is predominately amortized as the associated programs are broadcast.

Advances paid for the right to broadcast sports events within one year and programming with an initial license period of one year or less are classified as current inventories, and license fees for programming with an initial license period of greater than one year are classified as non-current inventories.

Licensed programming is predominantly amortized as the associated programs are made available.

The costs of multi-year sports contracts are primarily amortized based on the ratio of each contract’s current period attributable revenue to the estimated total remaining attributable revenue.

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Owned programming includes content internally developed and produced as well as co-produced content.

Capitalized costs for owned programming are predominately amortized using the individual-film-forecast-computation method, which is based on the ratio of current period revenue to estimated total future remaining revenue, and related costs to be incurred throughout the life of the respective program.

When production

partners distribute owned programming on the Company's behalf, the net participation in profits is recorded as content license revenue.

Capitalized costs for owned programming are predominantly amortized using the individual-film-forecast-computation method, which is based on the ratio of current period revenue to estimated total future remaining revenue, and related costs to be incurred throughout the life of the respective program.

Future remaining revenue includes imputed license fees for content used by FOX as well as revenue expected to be earned based on distribution strategy and historical performance of similar content.

Changes to estimated future revenues may result in impairments or changes in amortization patterns.

When production partners distribute owned programming on the Company’s behalf, the net participation in profits is recorded as content license revenue.

The Company may receive government incentives in connection with the production of owned programming.

The Company records government incentives as a reduction of capitalized costs for owned programming when the monetization of the incentive is probable.

Government incentives were not material in fiscal 2023, 2022 and 2021.

Inventories are evaluated for recoverability when an event or circumstance occurs that indicates that fair value may be less than unamortized costs.

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Owned programming is monetized and tested for impairment on an individual basis.

Licensed programming is predominately monetized as a group and tested for impairment on a channel, network, or daypart basis.

Licensed programming is predominantly monetized as a group and tested for impairment on a channel, network, or daypart basis.

The recoverability of certain sports rights is assessed on an aggregate basis.

The Company recognized impairments of approximately $50 million, nil, and $95 million in fiscal 2022, 2021 and 2020, respectively, related to licensed and owned programming at the Cable Network Programming and Television segments, which were recorded in Operating expenses in the Consolidated Statements of Operations.

The Company recognized impairments of approximately $10 million, $50 million, and nil in fiscal 2023, 2022 and 2021, respectively, related to owned programming at the Cable Network Programming and Television segments, which were recorded in Operating expenses in the Consolidated Statements of Operations.

Goodwill and Other Intangible Assets

The Company's intangible assets include goodwill, Federal Communications Commission ("FCC") licenses, traditional MVPD affiliate agreements and relationships, software, trademarks and other copyrighted products.

The Company’s intangible assets include goodwill, Federal Communications Commission (“FCC”) licenses, MVPD affiliate agreements and relationships, software, trademarks and other copyrighted products.

The Company accounts for its business combinations under the acquisition method of accounting.

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The 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.

During fiscal 2022, the Company determined that the goodwill and indefinite-lived intangible assets included in the accompanying Consolidated Balance Sheet as of June 30, 2022, were not impaired based on the Company's annual assessment.

While the Company believes its judgments represent reasonably possible outcomes based on available facts and circumstances, adverse changes to the assumptions, including those related to macroeconomic factors, comparable public company trading values and prevailing conditions in the capital markets, could lead to future declines in the fair value of a reporting unit in the Other, Corporate and Eliminations segment and a potential non-cash goodwill impairment charge.

The estimated fair value of this

reporting unit was determined using a combination of the income approach, which incorporates the use of a discounted cash flow analysis, and the market approach, which incorporates the use of revenue multiples based on market data.

Fair value exceeded the carrying value of this reporting unit by less than 20% as of June 30, 2022.

Further adverse changes in market conditions may result in a partial or full impairment of the approximately $250 million of goodwill in this reporting unit as of June 30, 2022.

The Company determined that there are no other reporting units at risk of impairment as of June 30, 2022, and will continue to monitor its goodwill and indefinite-lived intangible assets for any possible future non-cash impairment charges.

During fiscal 2023, the Company determined that the goodwill and indefinite-lived intangible assets included in the accompanying Consolidated Balance Sheet as of June 30, 2023 were not impaired based on the Company’s annual assessments.

The Company determined that there are no reporting units at risk of impairment as of June 30, 2023, and will continue to monitor its goodwill and indefinite-lived intangible assets for any possible future non-cash impairment charges.

See Note 2—Summary of Significant Accounting Policies to the accompanying Financial Statements under the heading “Annual Impairment Review” for further discussion.

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Tax laws are complex and subject to different interpretations by the taxpayer and respective governmental taxing authorities.

Significant judgment is required in determining the Company's tax expense and in evaluating its tax positions, including evaluating uncertainties under ASC 740, "Income Taxes."

Significant judgment is required in determining the Company’s tax expense and in evaluating its tax positions, including evaluating uncertainties.

The Company records valuation allowances to reduce deferred tax assets to the amount that is more likely than not to be realized.

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The discount rate reflects the market rate for high-quality fixed income investments on the Company’s annual measurement date of June 30 and is subject to change each fiscal year.

The 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.

The rate was determined by matching the Company's expected benefit payments for the plans to a hypothetical yield curve developed using a portfolio of several hundred high-quality non-callable corporate bonds.

The 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.

The rate was determined by matching the Company’s expected benefit payments for the plans to a hypothetical yield curve developed using a portfolio of several hundred high-quality corporate bonds.

The key assumptions used in developing the Company’s fiscal 2023, 2022 and 2021 net periodic pension expense for its plans consist of the following:

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Expected return 40 50 50

Actuarial (loss) gain $ (202) $ 145 $ (31)

One year actual return (15.8) % 26.1 % 3.4 %

Actuarial gain (loss) $ 13 $ (202) $ 145

Discount rates are volatile from year to year because they are determined based upon the prevailing rates as of the measurement date.

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The Company will use an expected long-term rate of return of 5.3% for fiscal 2024 based principally on the future return expectation of the plans’ asset mix.

The accumulated pre-tax net losses on the Company's pension and postretirement benefit plans as of June 30, 2022 were $292 million which decreased from $424 million as of June 30, 2021.

This decrease of $132 million was primarily due to the change in the discount rate assumption utilized in measuring plan obligations, updates to other valuation assumptions and the recognition of deferred losses related to amortization partially offset by asset losses.

The overall accumulated pre-tax net losses as of June 30, 2022 were primarily the result of changes in discount rates.

Higher discount rates decrease the present value of benefit obligations and reduce the Company's accumulated net loss, which decreases the amortization component of subsequent-year pension expense.

Lower discount rates increase the present value of benefit obligations and increase the Company's accumulated net loss, which increases the amortization component of subsequent-year pension expense.

These deferred losses are being systematically recognized in future net periodic pension expense in accordance with ASC 715, "Compensation—Retirement Benefits." Unrecognized losses in excess of 10% of the greater of the market-related value of plan assets or the plans' projected benefit obligation ("PBO") are recognized over the average future service of the plan participants or average future life of the plan participants.

Changes in assumptions and differences between assumptions and actual experience has resulted in accumulated pre-tax net losses on the Company’s pension and postretirement benefit plans, which as of June 30, 2023 were $195 million as compared to $292 million as of June 30, 2022.

These deferred losses are being systematically recognized in future net periodic pension expense.

Unrecognized losses in excess of 10% of the greater of the market-related value of plan assets or the plans’ projected benefit obligation (“PBO”) are recognized over the average future service of the plan participants or average future life of the plan participants.

The Company made contributions of $53 million, $59 million and $63 million to its pension plans in fiscal 2023, 2022 and 2021, respectively.

The majority of these contributions were voluntarily made to improve the funding status of the plans which were impacted by the economic conditions noted above.

The majority of these contributions were voluntarily made to improve the funding status of the plans.

Future plan contributions are dependent upon actual plan asset returns, statutory requirements and interest rate movements.

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0.25 percentage point increase in expected rate of return on assets Decrease $2 million

Fiscal 2023 net periodic pension expense for the Company's pension plans is expected to increase to approximately $65 million primarily due to asset losses during fiscal 2022 and an increase in interest costs due to higher discount rates.

Fiscal 2024 net periodic pension expense for the Company’s pension plans is expected to decrease to approximately $55 million primarily due to an increase in discount rates and asset gains during fiscal 2023.

Legal Matters

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.

CAUTION CONCERNING FORWARD-LOOKING STATEMENTS

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• the failure to enter into or renew on favorable terms, or at all, affiliation or carriage agreements or arrangements through which the Company makes its content available for viewing through online video platforms;

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

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

• the highly competitive nature of the industry in which the Company’s businesses operate;

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• damage to the Company’s brands or reputation;

• the inability to realize the anticipated benefits of the Company's strategic investments and acquisitions;

• the inability to realize the anticipated benefits of the Company’s strategic investments and acquisitions, and the effects of any combination or significant acquisition, disposition or other similar transaction involving the Company;

• the loss of key personnel;

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

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

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

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

• changes in tax, federal communications or other laws, regulations, practices or the interpretations thereof (including changes in legislation currently being considered);

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

• the impact of any investigations or fines from governmental authorities, including FCC rules and policies and FCC decisions regarding revocation, renewal or grant of station licenses, waivers and other matters;

• the failure or destruction of satellites or transmitter facilities the Company depends on to distribute its programming;

• unfavorable litigation or investigation results that require the Company to pay significant amounts or lead to onerous operating procedures;

• unfavorable litigation outcomes or investigation results that require the Company to pay significant amounts or lead to onerous operating procedures;

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

• the Company’s ability to secure additional capital on acceptable terms;

• the impact of any payments the Company is required to make or liabilities it is required to assume under the Separation Agreement and the indemnification arrangements entered into in connection with the Transaction;

• the impact of COVID-19 and other widespread health emergencies or pandemics and measures to contain their spread;

• the other risks and uncertainties detailed in Item 1A.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis