What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2024-08-08 compared with 2023-08-11 · 175 added, 156 removed, 429 unchanged (44% of the section changed)

7 unchanged sentences

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.

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.

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, by and among 21CF, Disney and certain subsidiaries of Disney.

Basis of Presentation

8 unchanged sentences

Included in the discussion of outstanding debt is a discussion of the amount of financial capacity available to fund the Company’s future commitments and obligations, as well as a discussion of other financing arrangements.

• Critical Accounting Policies —This section discusses accounting policies considered important to the Company’s financial condition and results of operations, and which require significant judgment and estimates on the part of management in application.

• Critical Accounting Policies and Estimates —This section discusses accounting policies considered important to the Company’s financial condition and results of operations, and which require significant judgment and estimates on the part of management in application and the Company’s use of estimates and assumptions consistent with U.S.

generally accepted accounting principles (“GAAP”).

In addition, Note 2—Summary of Significant Accounting Policies to the accompanying Financial Statements summarizes the Company’s significant accounting policies, including the critical accounting policy discussion found in this section.

• Caution Concerning Forward-Looking Statements —This section provides a description of the use of forward-looking information appearing in this Annual Report on Form 10-K, including in Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Such information is based on management’s current expectations about future events which are subject to change and to inherent risks and uncertainties.

Such information is based on management’s current expectations about future events which are subject to

change and to inherent risks and uncertainties.

Refer to Item 1A.

1 unchanged sentence

OVERVIEW OF THE COMPANY’S BUSINESS

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

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

Cable Network Programming, Television, Credible Labs Inc.

(“Credible”) and the FOX Studio Lot with the following two reportable segments:

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

2 unchanged sentences

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.

(“Credible”), corporate overhead costs and intracompany eliminations.

The FOX Studio Lot, located in Los Angeles, California, provides television and film production services along with office space, studio operation services and includes all operations of the facility.

The Credible and the FOX Studio Lot operating segments do not meet the criteria under GAAP to be separately reported as a reportable segment or aggregated with other operating segments, and as such are presented as part of Corporate and Other, which is not a reportable segment.

Corporate and Other principally consists of Credible, the FOX Studio Lot and corporate overhead costs.

Credible is a U.S.

consumer finance marketplace.

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

5 unchanged sentences

In addition, advertising revenues are subject to seasonality and cyclicality as a result of the impact of state, congressional and presidential election cycles and special events that air on the Company’s networks, including the National Football League’s (“NFL”) Super Bowl , which is broadcast on the FOX Network on a rotating basis with other networks, and the Fédération Internationale de Football Association (“FIFA”) World Cup , which occurs every four years (for each of women and men), and other regular and post-season sports events, including one NFL Divisional playoff game that is aired on a rotating annual basis with another network.

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 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 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.

As consumers switch to digital consumption of video content, there is still to be developed a consistent, broadly accepted measure of multiplatform audiences across the industry.

Furthermore, the pricing and volume of advertising may be affected by shifts in spending from more traditional media and toward digital and mobile offerings, which can deliver targeted advertising more promptly, or toward newer ways of purchasing advertising.

In addition, the market for AVOD advertising campaigns is relatively new and evolving.

The Company operates in a highly competitive industry and its performance is dependent, to a large extent, on the impact of changes in consumer behavior as a result of new technologies, the sale of advertising, the maintenance, renewal and terms of its carriage, affiliation and content agreements and programming rights, the popularity of its content, general economic conditions (including financial market conditions), the Company’s ability to manage its businesses effectively, and its relative strength and leverage in the industry.

The ways in which consumers view content and technology and business models in the media and entertainment industry continue to rapidly evolve.

New distribution platforms and increased competition from new entrants and emerging technologies have added to the complexity of maintaining predictable revenue streams.

Technological advancements have driven changes in consumer behavior as consumers now have more control over when, where and how they consume content, and consumer preferences have evolved toward subscription video on demand (“SVOD”), AVOD and free advertising-supported television (“FAST”) services and other direct-to-consumer offerings.

These changes in technologies and consumer behavior have contributed to industry-wide declines in subscribers to MVPD services over the last several years, and these declines are expected to continue and possibly accelerate in the future.

At the same time, these changes have had, and are expected to continue to have, an impact on advertising.

Technological changes and the evolution of consumer preferences toward direct-to-consumer offerings has intensified audience fragmentation and reduced viewership through traditional linear distribution models, which has caused ratings and viewership declines for television networks, including some of the Company’s networks.

These changes have also given rise to new ways of purchasing advertising, as well as a general shift in advertising expenditures toward digital and mobile offerings, some of which may not be as beneficial to the Company as traditional advertising methods.

In addition, a number of SVOD services with large subscriber bases and household penetration have introduced advertising supported tiers and there is an increasing number of AVOD services and FAST products available to consumers.

The resulting increase in the amount of digital advertising available in the marketplace has intensified, and may continue to intensify, competition for viewers and advertising.

Additionally, the industry is transitioning to a multiplatform measurement environment in an effort to more completely measure viewership and advertising across linear and digital platforms, but has not yet established a consistent, broadly accepted measure of multiplatform audiences.

The Company operates in a highly competitive industry and its performance depends, to a large extent, on its ability to effectively anticipate and adapt to changes in consumer behavior and evolving technologies and business models, the sale of advertising, the maintenance, renewal and terms of its carriage, affiliation and content agreements and programming rights, the popularity of its content, general economic conditions (including financial market conditions), the Company’s ability to manage its businesses effectively, and its relative strength and leverage in the industry.

For more information, see Item 1.

14 unchanged sentences

Depreciation and amortization (389) (411) 22 5 %

Impairment and restructuring charges (111) — (111) **

Restructuring, impairment and other corporate matters (67) (1,182) 1,115 94 %

Equity (losses) earnings of affiliates (44) 4 (48) **

Interest expense, net (216) (218) 2 1 %

Other, net (699) (509) (190) (37) %

Non-operating other, net

(47) 368 (415) **

Income before income tax expense 2,104 1,736 368 21 %

4 unchanged sentences

** not meaningful

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 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 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 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).

Overview —The Company’s revenues decreased $933 million or 6% for fiscal 2024, as compared to fiscal 2023, due to lower advertising and other revenues, partially offset by higher affiliate fee revenue.

The increase of $273 million or 4% in affiliate fee revenue was primarily due to the impact of higher average rates per subscriber and higher fees received from television stations that are affiliated with the FOX Network of approximately $760 million, partially offset by the approximately $460 million impact of a lower average number of subscribers across almost all networks.

The decrease of $1.2 billion or 18% in advertising revenue was primarily due to marquee events with an impact of approximately $900 million including the absence of the fiscal 2023 broadcasts of Super Bowl LVII and the FIFA Men’s World Cup and fewer NFL playoff games, partially offset by the broadcast of the FIFA Women’s World Cup in the current year.

The remaining decrease of approximately $300 million was primarily related to lower political advertising revenue at the FOX Television Stations principally due to the comparison with the November 2022 U.S.

midterm elections in the prior year and lower ratings at the FOX Network and FOX News Media, partially offset by continued growth at Tubi.

The decrease of $44 million or 4% in other revenues was primarily due to lower content revenues principally due to the impact of the industry guild labor disputes in 2023, partially offset by higher sports sublicensing revenue principally due to renewals of college sports contracts.

Operating expenses decreased $600 million or 6% for fiscal 2024, as compared to fiscal 2023, primarily due to the approximately $400 million impact of lower sports programming rights amortization and production costs principally due to the absence of the fiscal 2023 broadcasts of Super Bowl LVII and the FIFA Men’s World Cup partially offset by the renewed NFL contract.

The remaining decrease was principally due to lower entertainment programming rights amortization and production costs largely due to fewer hours of original

scripted programming as compared to the prior year period as a result of the impact of the industry guild labor disputes in 2023.

Selling, general and administrative expenses decreased $25 million or 1% for fiscal 2024, as compared to fiscal 2023, primarily due to lower legal costs at FOX News Media, lower employee related costs and the deconsolidation of the United States Football League (the “USFL”).

Depreciation and amortization —Depreciation and amortization expense decreased $22 million or 5% for fiscal 2024, as compared to fiscal 2023, primarily due to assets acquired in acquisitions being fully depreciated in fiscal 2023, partially offset by the full year impact of broadcast production assets at FOX Sports placed into service in fiscal 2023.

Restructuring, impairment and other corporate matters —See Note 4—Restructuring, Impairment and Other Corporate Matters to the accompanying Financial Statements.

Equity (losses) earnings of affiliates —Equity (losses) earnings of affiliates increased $48 million for fiscal 2024, as compared to fiscal 2023, primarily due to the investment in the United Football League (the “UFL”) (See Note 3—Acquisitions, Disposals and Other Transactions to the accompanying Financial Statements).

Interest expense, net —Interest expense, net decreased $2 million or 1% for fiscal 2024, as compared to fiscal 2023, primarily due to higher interest income as a result of higher interest rates, partially offset by an increase in interest expense primarily due to the issuance of $1.25 billion of senior notes in October 2023 (See Note 9—Borrowings to the accompanying Financial Statements).

Non-operating other, net —See Note 20—Additional Financial Information to the accompanying Financial Statements under the heading “Non-Operating Other, net.”

Income tax expense —The Company’s tax provision and related effective tax rate of 26% for fiscal 2024 was higher than the statutory rate of 21% primarily due to state taxes.

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.

Net income —Net income increased $301 million or 24% for fiscal 2024, as compared to fiscal 2023, primarily due to the absence of the fiscal 2023 legal settlement costs and lower indemnity costs (See Note 4—Restructuring, Impairment and Other Corporate Matters to the accompanying Financial Statements).

Partially offsetting this increase was lower gains (See Note 20—Additional Financial Information to the accompanying Financial Statements under the heading “Non-Operating Other, net”) and lower Segment EBITDA (as defined below).

Results of Operations—Fiscal 2023 versus Fiscal 2022

10 unchanged sentences

Depreciation and amortization (411) (363) (48) (13) %

Impairment and restructuring charges — (35) 35 100 %

Restructuring, impairment and other corporate matters (1,182) (157) (1,025) **

Equity earnings of affiliates 4 4 — — %

Interest expense, net (218) (371) 153 41 %

Other, net (509) 579 (1,088) **

Non-operating other, net

368 (356) 724 **

Income before income tax expense 1,736 1,694 42 2 %

4 unchanged sentences

** not meaningful

Overview —The Company’s revenues increased 8% 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 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 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, 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 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 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”).

Overview —The Company’s revenues increased $939 million or 7% for fiscal 2023, as compared to fiscal 2022, due to higher affiliate fee, advertising and other revenues.

The increase of $173 million or 3% in affiliate fee revenue was primarily due to the impact of higher average rates per subscriber and higher fees received from television stations that are affiliated with the FOX Network of approximately $550 million, partially offset by the approximately $400 million impact of a lower average number of subscribers across all networks.

The increase of $706 million or 12% in advertising revenue was primarily due to marquee events with an impact of approximately $600 million including revenues resulting from the broadcasts of Super Bowl LVII and the FIFA Men’s World Cup and additional NFL post-season games, partially offset by the absence of NFL Thursday Night Football (“ TNF ”).

The remaining increase of approximately $100 million was primarily related to continued growth at Tubi and higher political advertising revenue at the FOX Television Stations principally due to the November 2022 U.S.

midterm elections, partially offset by lower ratings at the FOX Network in the current year.

The increase of $60 million or 5% 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 $572 million or 6% for fiscal 2023, as compared to fiscal 2022, primarily due to the approximately $400 million impact from the 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, partially offset by the absence of TNF .

The remaining increase of approximately $170 million was principally due to increased digital investment in Tubi and at FOX News Media, partially offset by lower entertainment marketing and production costs.

Selling, general and administrative expenses increased $129 million or 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 $48 million or 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.

Restructuring, impairment and other corporate matters —See Note 4—Restructuring, Impairment and Other Corporate Matters to the accompanying Financial Statements.

Interest expense, net —Interest expense, net decreased $153 million or 41% for fiscal 2023, as compared to fiscal 2022, primarily due to higher interest income as a result of higher interest rates.

Non-operating other, net —See Note 20—Additional Financial Information to the accompanying Financial Statements under the heading “Non-Operating 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.

Net income —Net income increased $20 million or 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 and restructuring charges (See Note 4—Restructuring, Impairment and Other Corporate Matters to the accompanying Financial Statements).

Segment Analysis

4 unchanged sentences

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.

Amortization of cable distribution investments, Depreciation and amortization, Restructuring, impairment and other corporate matters, Equity earnings (losses) of affiliates, Interest expense, net, Non-operating 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.

6 unchanged sentences

Television 7,875 8,710 (835) (10) %

Other, Corporate and Eliminations 160 192 (32) (17) %

Corporate and Other 209 217 (8) (4) %

Eliminations (59) (57) $ (2) (4) %

Total revenues $ 13,980 $ 14,913 $ (933) (6) %

5 unchanged sentences

Television 506 1,009 (503) (50) %

Other, Corporate and Eliminations (290) (326) 36 11 %

Corporate and Other (316) (290) (26) (9) %

Adjusted EBITDA (a)

$ 2,883 $ 3,191 $ (308) (10) %

** not meaningful

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

11 unchanged sentences

Segment EBITDA $ 2,693 $ 2,472 $ 221 9 %

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.

Revenues at the Cable Network Programming segment decreased $88 million or 1% for fiscal 2024, as compared to fiscal 2023, due to lower advertising revenue, partially offset by higher affiliate fee and other revenues.

Affiliate fee revenue increased $13 million as higher average rates per subscriber were partially offset by a decrease in the average number of subscribers.

The decrease of $141 million or 10% in advertising revenue was primarily due to lower ratings and lower pricing in the direct response marketplace partially offset by higher pricing in the national advertising marketplace at FOX News Media.

Also contributing to this decrease was the absence of the fiscal 2023 broadcast of the FIFA Men’s World Cup partially offset by the broadcast of the FIFA Women’s World Cup at the national sports networks in the current year.

The increase of $40 million or

9% in other revenues was primarily due to higher sports sublicensing revenue principally due to renewals of college sports contracts.

Cable Network Programming Segment EBITDA increased $221 million or 9% for fiscal 2024, as compared to fiscal 2023, as the revenue decreases noted above were more than offset by lower expenses.

Operating expenses decreased $259 million or 9% primarily due to lower sports programming rights amortization and production costs, led by the absence of the fiscal 2023 broadcast of the FIFA Men’s World Cup partially offset by the broadcast of the FIFA Women’s World Cup and the Union of European Football Associations (“UEFA”) European Championship at the national sports networks in the current year.

Also contributing to this decrease was lower programming costs at FOX News Media and the deconsolidation of the USFL.

Selling, general and administrative expenses decreased $50 million or 8% principally due to lower legal costs at FOX News Media and the deconsolidation of the USFL.

Television (56% and 58% of the Company’s revenues in fiscal 2024 and 2023, respectively)

9 unchanged sentences

Segment EBITDA $ 506 $ 1,009 $ (503) (50) %

** 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.

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 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)

Revenues at the Television segment decreased $835 million or 10% for fiscal 2024, as compared to fiscal 2023, due to lower advertising and other revenues, partially offset by higher affiliate fee revenue.

The decrease of $1 billion or 20% in advertising revenue was primarily due to the absence of the fiscal 2023 broadcasts of Super Bowl LVII and the FIFA Men’s World Cup , lower political advertising revenue at the FOX Television Stations principally due to the comparison with the November 2022 U.S.

midterm elections in the prior year, fewer NFL playoff games and lower ratings at the FOX Network.

Partially offsetting this decrease was continued growth at Tubi.

The increase of $260 million or 9% 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 decrease of $73 million or 12% in other revenues was primarily due to lower content revenues principally due to the impact of the industry guild labor disputes in 2023.

Television Segment EBITDA decreased $503 million or 50% for fiscal 2024, as compared to fiscal 2023, primarily due to the revenue decreases noted above, partially offset by lower expenses.

Operating expenses decreased $332 million or 5% primarily due to lower sports programming rights amortization and production costs principally due to the absence of the fiscal 2023 broadcasts of the Super Bowl LVII and the FIFA Men’s World Cup , partially offset by the renewed NFL contract and the broadcast of the UEFA European Championship in the current year.

Also contributing to this decrease was lower entertainment programming rights amortization and production costs principally due to fewer hours of original scripted programming as compared to the prior year period as a result of the impact of the industry guild labor disputes in 2023, partially offset by continued growth at Tubi.

Corporate and Other (1% of the Company’s revenues for fiscal 2024 and 2023)

For the years ended June 30,

5 unchanged sentences

Segment EBITDA $ (316) $ (290) $ (26) (9) %

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.

Revenues within Corporate and Other for fiscal 2024 and 2023 include revenues generated by Credible and the operation of the FOX Studio Lot.

Operating expenses for fiscal 2024 and 2023 include advertising and promotional expenses at Credible.

Selling, general and administrative expenses for fiscal 2024 and 2023 primarily relate to employee costs, professional fees and the costs of operating the FOX Studio lot.

The increase of $29 million or 7% in selling, general and administrative expenses was primarily due to higher employee related costs as a result of the transition and separation of a named executive officer of the Company.

Fiscal 2023 versus Fiscal 2022

5 unchanged sentences

Television 8,710 7,685 1,025 13 %

Other, Corporate and Eliminations 192 178 14 8 %

Corporate and Other 217 233 (16) (7) %

Eliminations (57) (41) (16) (39) %

Total revenues $ 14,913 $ 13,974 $ 939 7 %

5 unchanged sentences

Television 1,009 347 662 **

Other, Corporate and Eliminations (326) (344) 18 5 %

Corporate and Other (290) (326) 36 11 %

Adjusted EBITDA (a)

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

** not meaningful

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,

9 unchanged sentences

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 $54 million or 1% for fiscal 2023, as compared to fiscal 2022, due to lower affiliate fee and advertising revenues, partially offset by higher other revenues.

The decrease of $30 million or 1% 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 of $59 million or 4% in advertising revenue was primarily due to lower direct response pricing 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 of $35 million or 8% in other revenues was primarily due to higher FOX Nation subscription revenues and higher sports sublicensing revenues.

Cable Network Programming Segment EBITDA decreased $462 million or 16% for fiscal 2023, as compared to fiscal 2022, due to the revenue decreases noted above and higher expenses.

Operating expenses increased $332 million or 13% 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 $74 million or 13% 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,

8 unchanged sentences

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

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)

** not meaningful

Revenues at the Television segment increased $1 billion or 13% for fiscal 2023, as compared to fiscal 2022, due to higher advertising, affiliate fee and other revenues.

The increase of $764 million or 17% 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 TNF and lower ratings at the FOX Network in the current year.

The increase of $203 million or 8% 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 of $58 million or 10% in other revenues was primarily due to the full year impact of acquisitions of entertainment production companies in fiscal 2022.

Television Segment EBITDA increased $662 million for fiscal 2023, as compared to fiscal 2022, primarily due to the revenue increases noted above, partially offset by higher expenses.

Operating expenses increased $273 million or 4% 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 $90 million or 10% primarily due to continued growth at Tubi.

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

For the years ended June 30,

5 unchanged sentences

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 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.

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

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.

Non-GAAP Financial Measures

1 unchanged sentence

Adjusted EBITDA does not include:

Amortization of cable distribution investments, Depreciation and amortization, Impairment and restructuring charges, Interest expense, net, Other, net and Income tax expense.

Management believes that 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).

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.

6 unchanged sentences

Depreciation and amortization 389 411

Impairment and restructuring charges 111 —

Restructuring, impairment and other corporate matters 67 1,182

Equity losses (earnings) of affiliates 44 (4)

Interest expense, net 216 218

Other, net 699 509

Non-operating other, net

Income tax expense 550 483

15 unchanged sentences

Depreciation and amortization 411 363

Impairment and restructuring charges — 35

Restructuring, impairment and other corporate matters 1,182 157

Equity earnings of affiliates (4) (4)

Interest expense, net 218 371

Other, net 509 (579)

Non-operating other, net

Income tax expense 483 461

25 unchanged sentences

and stock repurchases.

In addition to the acquisitions and dispositions disclosed within Note 3—Acquisitions, Disposals, and Other Transactions to the accompanying Financial Statements, the Company has evaluated, and expects to continue to evaluate, possible acquisitions and dispositions of certain businesses and assets.

In addition to the transactions disclosed within Note 3—Acquisitions, Disposals, and Other Transactions to the accompanying Financial Statements, the Company has evaluated, and expects to continue to evaluate, possible acquisitions and dispositions of certain businesses and assets.

Such transactions may be material and may involve cash, the Company’s securities or the assumption of additional indebtedness.

3 unchanged sentences

Net cash provided by operating activities $ 1,840 $ 1,800

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.

The increase in net cash provided by operating activities during fiscal 2024, as compared to fiscal 2023, was primarily due to lower legal settlement costs (See Note 14—Commitments and Contingencies to the accompanying Financial Statements) and lower entertainment programming costs, partially offset by lower NFL receipts due to the absence of Super Bowl LVII, lower political advertising receipts due to the absence of the November 2022 U.S.

midterm elections and lower Segment EBITDA.

Net cash used in investing activities for fiscal 2024 and 2023 was as follows (in millions):

1 unchanged sentence

Net cash used in investing activities $ (452) $ (438)

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.

The increase in net cash used in investing activities during fiscal 2024, as compared to fiscal 2023, was primarily due to higher investments in equity securities partially offset by a decrease in capital expenditures.

Net cash used in financing activities for fiscal 2024 and 2023 was as follows (in millions):

1 unchanged sentence

Net cash used in financing activities $ (1,341) $ (2,290)

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.

The decrease in net cash used in financing activities during fiscal 2024, as compared to fiscal 2023, was primarily due to lower activity under the stock repurchase program and the net impact of the October 2023 issuance of $1.25 billion of senior notes and the $1.25 billion repayment of senior notes that matured in January 2024 (See Note 9—Borrowings to the accompanying Financial Statements).

Stock Repurchase Program

2 unchanged sentences

Subsequent to June 30, 2024 , the Company increased its semi-annual dividend and declared a semi-annual dividend of $0.27 per share on both the Class A Common Stock and the Class B Common Stock.

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

The dividend declared is payable on September 25, 2024 with a record date for determining dividend entitlements of September 4, 2024.

Based on the number of shares outstanding as of June 30, 2024 , and the new annual dividend rate stated above, the total aggregate cash dividends expected to be paid to stockholders in fiscal 2025 is approximately $250 million.

3 unchanged sentences

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.

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

1 unchanged sentence

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).

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

1 unchanged sentence

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 and the absence of cash received from Disney in fiscal 2021, including the $462 million reimbursement related to the Divestiture Tax.

the heading “Stock Repurchase Program”), partially offset by the absence of the $750 million repayment of senior notes that matured in January 2022.

Debt Instruments

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.

The following table summarizes cash from borrowings and cash (used in) repayment of borrowings for fiscal 2024, 2023 and 2022:

For the years ended June 30,

2024 2023 2022

(in millions)

Notes due 2033 (a)

$ 1,232 $ — $ —

Notes due 2022 and 2024 (b)

(1,250) — (750)

Total borrowings $ (18) $ — $ (750)

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

In January 2022 and 2024, $750 million of 3.666% senior notes and $1.25 billion of 4.030% senior notes matured and were repaid in full, respectively (See Note 9—Borrowings to the accompanying Financial Statements).

Ratings of the Senior Notes

13 unchanged sentences

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 2025 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.

1 unchanged sentence

Payments due to participants under the Company’s pension plans are primarily paid out of underlying trusts.

Payments due under the Company’s OPEB plans are not required to be funded in advance, but are paid as medical costs are incurred by covered retiree populations, and are principally dependent upon the future cost of retiree medical benefits under the Company’s OPEB plans.

Payments due under the Company’s OPEB plans are not required to be funded in advance, but are paid as medical costs are incurred by covered retiree populations, and are

principally dependent upon the future cost of retiree medical benefits under the Company’s OPEB plans.

The Company does not expect its net OPEB payments to be material in fiscal 2025 (See Note 15—Pension and Other Postretirement Benefits to the accompanying Financial Statements for further discussion of the Company’s pension and OPEB plans).

CRITICAL ACCOUNTING POLICIES

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

An accounting policy is considered to be critical if it is important to the Company’s financial condition and results of operations and if it requires significant judgment and estimates on the part of management in its application.

The development and selection of these critical accounting policies have been determined by management of the Company and the related disclosures have been reviewed with the Audit Committee of the Company’s Board of Directors.

The development and selection of these critical accounting policies and estimates have been determined by management of the Company and the related disclosures have been reviewed with the Audit Committee of the Company’s Board of Directors.

For the Company’s summary of significant accounting policies, see Note 2—Summary of Significant Accounting Policies to the accompanying Financial Statements.

22 unchanged sentences

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.

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.

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.

16 unchanged sentences

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

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.

The Company recognized impairments of approximately $40 million, $10 million, and $50 million in fiscal 2024, 2023 and 2022, 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, 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 and trademarks and other copyrighted products.

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

1 unchanged sentence

Goodwill is recorded as the difference between the consideration transferred to acquire entities and the estimated fair values assigned to their tangible and identifiable intangible net assets and is assigned to one or more reporting units for purposes of testing for impairment.

Determining the fair value of assets acquired and liabilities assumed requires management’s judgment and often involves the use of significant estimates and assumptions, including assumptions with respect to future cash inflows and outflows, discount rates, asset lives and market multiples, among other items.

Determining the fair value of assets acquired and liabilities assumed requires management’s judgment and often involves the use of significant estimates and assumptions, including assumptions with respect to future cash inflows and outflows, discount rates, long-term growth rates, asset lives, market multiples and relevant comparable transactions, among other items.

Identifying reporting units and assigning goodwill to them requires judgment involving the aggregation of business units with similar economic characteristics and the identification of existing business units that benefit from the acquired goodwill.

4 unchanged sentences

The Company uses its judgment in assessing whether assets may have become impaired between annual valuations.

Indicators such as unexpected adverse economic factors, unanticipated technological changes or competitive activities, loss of key personnel and acts by governments and courts, may signal that an asset has become impaired and require the Company to perform an interim impairment test.

Indicators such as unexpected adverse economic factors, unanticipated technological changes or competitive activities, loss of

key personnel and acts by governments and courts, may signal that an asset has become impaired and require the Company to perform an interim impairment test.

The Company uses direct valuation methods to value identifiable intangibles for acquisition accounting and impairment testing.

The direct valuation method used for FCC licenses requires, among other inputs, the use of published industry data that are based on subjective judgments about future advertising revenues in the markets where the Company owns television stations.

This method also involves the use of management’s judgment in estimating an appropriate discount rate reflecting the risk of a market participant in the U.S.

This method also involves the use of management’s judgment in estimating appropriate terminal growth rates, operating margins and discount rates reflecting the risk of a market participant in the U.S.

broadcast industry.

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 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.

The resulting fair values for FCC licenses are sensitive to these long-term assumptions and any adverse changes to such assumptions could result in an impairment to existing carrying values in future periods and such impairment could be material.

During fiscal 2024, the Company determined that the goodwill and indefinite-lived intangible assets included in the accompanying Consolidated Balance Sheets as of June 30, 2024 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, 2024.

While the Company believes its judgments represent reasonably possible outcomes based on available facts and circumstances, adverse changes to the assumptions, including prevailing market conditions, discount rates, competitive factors, comparable public company trading values and expected future cash flows, could negatively impact the fair value of our reporting units and potentially result in a non-cash goodwill impairment charge in future periods.

The Company 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.

15 unchanged sentences

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 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 hundreds of high-quality corporate bonds.

The key assumptions used in developing the Company’s fiscal 2024, 2023 and 2022 net periodic pension expense for its plans consist of the following:

29 unchanged sentences

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

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.

Fiscal 2025 net periodic pension expense for the Company’s pension plans is expected to decrease to approximately $35 million primarily due to an improvement of funded status.

Legal Matters

3 unchanged sentences

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.

See Note 14—Commitments and Contingencies to the accompanying Financial Statements under the heading “Contingencies” for a discussion of the Company’s legal proceedings.

CAUTION CONCERNING FORWARD-LOOKING STATEMENTS

20 unchanged sentences

• the loss of key personnel;

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

• labor disputes, including 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;

8 unchanged sentences

• 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 Separation and the Transaction;

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

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

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

3 unchanged sentences

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