What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2026-08-06 compared with 2025-08-06 · 114 added, 90 removed, 340 unchanged (38% of the section changed)

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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.

Corporate and Other principally consists of FOX One, the Company’s direct-to-consumer subscription streaming service launched in August 2025, Credible, the FOX Studio Lot and corporate overhead costs.

Credible is a U.S.

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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.

For fiscal 2025, the Company generated revenues of $16 billion, of which approximately 47% was generated from affiliate fees, approximately 42% was generated from advertising, and approximately 11% was generated from other operating activities.

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

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

For fiscal 2026, the Company generated revenues of $17 billion, of which approximately 47% was generated from distribution revenue, approximately 43% was generated from advertising, and approximately 10% was generated from other operating activities.

Distribution revenue primarily includes (i) monthly subscriber-based license and retransmission consent fees paid by programming distributors that carry the Company’s cable networks and owned and operated television stations, (ii) fees received from non-owned and operated television stations that are affiliated with the FOX Network and (iii) monthly or annual subscription fees for the right to access and stream content on the Company’s direct-to-consumer streaming services.

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.

Advertising revenue primarily includes (i) sales of commercial time within the Company’s network programming and (ii) sales of advertising on the Company’s owned and operated television stations and various digital properties.

For more information, see Item 1.

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“Risk Factors.”

Roku Transaction

On June 14, 2026, the Company and Roku, Inc.

(“Roku”) entered into a definitive agreement (the “Merger Agreement”) under which the Company has agreed to acquire Roku for a combination of cash and FOX Class A Common Stock (the “Roku Transaction” or the “Merger”).

Upon the terms and subject to the conditions of the Merger Agreement, FOX will pay $96.00 in cash and 0.9693 shares of FOX Class A Common Stock for each share of Roku Class A Common Stock and Roku Class B Common Stock outstanding immediately prior to the effective time of the merger.

The exchange ratio is fixed and will not be adjusted.

Following the completion of the Merger, Roku will be a wholly-owned subsidiary of FOX.

Each of the Boards of Directors of FOX and Roku have unanimously approved the transaction, which is also subject to requisite approval by FOX and Roku stockholders, clearance under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, the receipt of consents or approvals under certain other antitrust laws and certain investment screening laws and other customary conditions.

The Merger Agreement contains customary termination rights and provides that each party will be required to pay the other party a

termination fee of approximately $866 million if the Merger Agreement is terminated in certain circumstances, including due to a change in the recommendation of its board of directors.

In addition, FOX will be required to pay Roku a termination fee of approximately $1.2 billion if the Merger Agreement is terminated under certain circumstances related to the failure to obtain certain regulatory approvals or upon the entry of a permanent restraint under certain antitrust laws or investment screening laws.

FOX has also agreed to reimburse Roku for up to $70 million for reasonable third-party costs and expenses incurred by Roku in connection with the transaction if FOX is unable to obtain the required approval of its Class B Common stockholders of the issuance of FOX Class A Common Stock in connection with the transaction.

The Company expects to fund the cash portion of the Merger consideration with a combination of debt and cash on hand.

In connection with the Merger Agreement, in June 2026, the Company entered into a commitment letter under which the lenders provided $12.0 billion of commitments ($11.0 billion of which is available as of June 30, 2026) to provide senior unsecured bridge loans (the “Bridge Facility”) and a term loan credit agreement under which the lenders committed to provide a $1.0 billion senior unsecured term loan facility (the “Term Loan Facility”) (See Note 9—Borrowings to the accompanying Financial Statements).

RESULTS OF OPERATIONS

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(in millions, except %) Better/(Worse)

Affiliate fee $ 7,656 $ 7,324 $ 332 5 %

Distribution $ 8,058 $ 7,780 $ 278 4 %

Advertising 7,339 6,865 474 7 %

Other 1,779 1,212 567 47 %

Content and Other 1,729 1,655 74 4 %

Total revenues 17,126 16,300 826 5 %

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Non-operating other, net (773) 438 (1,211) **

438 (47) 485 **

Income before income tax expense 2,278 3,061 (783) (26) %

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** not meaningful

Overview —The Company’s revenues increased $2.3 billion or 17% for fiscal 2025, as compared to fiscal 2024, due to higher affiliate fee, advertising and other revenues.

The increase of $332 million or 5% 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 $790 million, partially offset by the approximately $460 million impact of a lower average number of subscribers across all networks.

The increase of $1.4 billion or 26% in advertising revenue was primarily due to the approximately $870 million impact related to sports programming led by revenues from the broadcast of Super Bowl LIX in February 2025 and higher National Football League (“NFL”) pricing.

The remaining increase of approximately $550 million was primarily due to the impact of political advertising revenue due to the 2024 presidential and congressional elections predominantly at the Company’s owned and operated television stations, continued digital growth led by the Tubi AVOD service and higher news pricing and audiences.

The increase of $567 million or 47% in other revenues was primarily due to higher sports sublicensing revenue.

Operating expenses increased $1.4 billion or 16% for fiscal 2025, as compared to fiscal 2024, primarily due to the approximately $1 billion impact of higher sports programming rights amortization and production costs driven by higher NFL costs, including the broadcast of Super Bowl LIX in February 2025, and higher college football costs, including licensing costs for rights that are sublicensed, partially offset by the absence of WWE.

The remaining increase of approximately $380 million was primarily due to higher digital content costs, entertainment programming rights amortization and higher newsgathering costs principally due to the 2024 presidential election.

Selling, general and administrative expenses increased $144 million or 7% for fiscal 2025, as compared to fiscal 2024, primarily due to higher employee costs.

Overview —The Company’s revenues increased $826 million or 5% for fiscal 2026, as compared to fiscal 2025, due to higher distribution, advertising and content and other revenues.

The increase of $278 million or 4% in distribution revenue was due to higher average rates per subscriber and higher fees received from television stations that are affiliated with the FOX Network of approximately $440 million, partially offset by the approximately $160 million impact of a lower average number of subscribers.

The increase of $474 million or

7% in advertising revenue was primarily due to sports programming led by the broadcasts of the Fédération Internationale de Football Association ("FIFA") Men’s World Cup and additional National Football League (“NFL”) and Major League Baseball (“MLB”) postseason games and higher pricing partially offset by the absence of the February 2025 broadcast of Super Bowl LIX .

The remaining impact was primarily due to continued digital growth led by the Tubi AVOD service and higher news pricing, partially offset by lower political advertising revenue due to the absence of the 2024 presidential and congressional elections and lower news ratings.

The increase of $74 million or 4% in content and other revenues was primarily due to higher sports sublicensing revenue and higher digital content revenue.

Operating expenses increased $335 million or 3% for fiscal 2026, as compared to fiscal 2025, primarily due to costs associated with the launch of FOX One and higher digital content costs.

This increase was partially offset by lower sports programming rights amortization led by the absence of the February 2025 broadcast of Super Bowl LIX partially offset by soccer rights, including the broadcast of the FIFA Men’s World Cup , and higher NFL costs, including the broadcast of an additional NFL postseason game.

Selling, general and administrative expenses increased $199 million or 9% for fiscal 2026, as compared to fiscal 2025, primarily due to higher employee costs and costs associated with the launch of FOX One.

Depreciation and amortization —Depreciation and amortization expense increased $25 million or 6% for fiscal 2026, as compared to fiscal 2025, primarily due to technology equipment placed into service in fiscal 2026.

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 increased $11 million or 5% for fiscal 2025, as compared to fiscal 2024, primarily due to lower interest income as a result of lower interest rates, partially offset by a lower average amount of debt outstanding.

Interest expense, net —Interest expense, net increased $47 million or 21% for fiscal 2026, as compared to fiscal 2025, primarily due to lower interest income as a result of lower interest rates and lower average cash and cash equivalent balances, partially offset by a lower average amount of debt outstanding.

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 25% for fiscal 2025 was higher than the statutory rate of 21% primarily due to state taxes and other permanent items.

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.

Net income —Net income increased $739 million or 48% for fiscal 2025, as compared to fiscal 2024, primarily due to higher Segment EBITDA (as defined below) and a change in fair value of the Company’s investments in equity securities, partially offset by higher provision for income tax, the absence of a gain on a contribution of assets and the legal settlement and other costs associated with the discontinuation of Venu Sports (See Note 3—Acquisitions, Disposals and Other Transactions to the accompanying Financial Statements).

Income tax expense —The Company’s tax provision and related effective tax rate of 24% and 25% for fiscal 2026 and fiscal 2025, respectively, was higher than the statutory rate of 21% primarily due to state taxes and other permanent items.

Net income —Net income decreased $566 million or 25% for fiscal 2026, as compared to fiscal 2025, primarily due to a change in fair value of the Company’s investments in equity securities, partially offset by higher Segment EBITDA (as defined below) and lower legal settlement and other costs associated with the discontinuation of Venu Sports in fiscal 2025.

These changes resulted in lower income before income tax expense and a corresponding lower provision for income tax.

Segment Analysis

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Due to the integrated nature of these operating segments, estimates and judgments are made in allocating certain assets, revenues and expenses.

Intersegment transactions principally relate to the sublicensing of sports content and rental of studio and administrative space, which are recorded consistently with the recognition of transactions with third parties and are eliminated in consolidation.

Intersegment transactions principally relate to the sublicensing of sports content, direct-to-consumer streaming services and rental of studio and administrative space, which are recorded consistently with the recognition of transactions with third parties and are eliminated in consolidation.

Segment EBITDA is defined as Revenues less Operating expenses and Selling, general and administrative expenses.

Segment EBITDA does not include:

Amortization of cable distribution investments, Depreciation and amortization, 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 operating segments because it is the primary measure used by the Company’s chief operating decision maker, the Chief Executive Officer, to monitor actual versus budget and prior fiscal year financial results, forecast future periods and perform competitive analyses to evaluate performance and allocate resources.

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.

Effective July 1, 2025, the Company no longer removes the impact of amortization of cable distribution investments when calculating Segment EBITDA.

Prior periods were not restated as the impact of the change is immaterial to the calculation.

Management believes that Segment

EBITDA is an appropriate measure for evaluating the operating performance of the Company’s operating segments because it is the primary measure used by the Company’s chief operating decision maker, the Chief Executive Officer, to monitor actual versus budget and prior fiscal year financial results, forecast future periods and perform competitive analyses to evaluate performance and allocate resources.

Fiscal 2026 versus Fiscal 2025

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(in millions, except %) Better/(Worse)

Affiliate fee $ 4,316 $ 4,188 $ 128 3 %

Distribution $ 4,662 $ 4,440 $ 222 5 %

Advertising 1,687 1,531 156 10 %

Other 1,083 505 578 **

Content and Other 999 959 40 4 %

Total revenues 7,348 6,930 418 6 %

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Segment EBITDA $ 3,099 $ 3,030 $ 69 2 %

** not meaningful

Revenues at the Cable Network Programming segment increased $975 million or 16% for fiscal 2025, as compared to fiscal 2024, due to higher affiliate fee, advertising and other revenues.

Affiliate fee revenue increased $128 million or 3% as higher average rates per subscriber were partially offset by a decrease in the average number of subscribers.

The increase of $269 million or 21% in advertising revenue was primarily due to

higher news pricing and audiences and higher news digital advertising revenue.

The increase of $578 million in other revenues was primarily due to higher sports sublicensing revenue.

Revenues at the Cable Network Programming segment increased $418 million or 6% for fiscal 2026, as compared to fiscal 2025, due to higher distribution, advertising and content and other revenues.

revenue increased $222 million or 5% as higher average rates per subscriber were partially offset by a decrease in the average number of subscribers.

The increase of $156 million or 10% in advertising revenue was primarily due to higher news and sports pricing and the broadcast of the FIFA Men’s World Cup , partially offset by lower ratings.

The increase of $40 million or 4% in content and other revenues was primarily due to higher sports sublicensing revenue.

Cable Network Programming Segment EBITDA increased $69 million or 2% for fiscal 2026, as compared to fiscal 2025, due to the revenue increases noted above, partially offset by higher expenses.

Operating expenses increased $607 million or 23% primarily due to higher sports programming rights amortization and production costs driven by higher college football costs, including licensing costs for rights that are sublicensed, partially offset by the absence of the Fédération Internationale de Football Association Women’s World Cup and the Union of European Football Associations European Championship in the current year.

Also contributing to this increase was higher newsgathering costs primarily due to the 2024 presidential election.

Selling, general and administrative expenses increased $25 million or 4% principally due to higher employee costs.

Operating expenses increased $287 million or 9% primarily due to higher sports programming rights amortization and production costs led by soccer rights, including the broadcast of the FIFA Men’s World Cup.

This increase was partially offset by lower newsgathering costs due to the absence of the 2024 presidential election.

Selling, general and administrative expenses increased $52 million or 8% principally due to higher employee costs and technology costs.

Television (56% and 57% of the Company’s revenues in fiscal 2026 and 2025, respectively)

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Advertising $ 5,652 $ 5,334 $ 318 6 %

Affiliate fee 3,340 3,136 204 7 %

Other 651 557 94 17 %

Distribution 3,346 3,340 6 — %

Content and Other 668 651 17 3 %

Total revenues 9,666 9,325 341 4 %

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Segment EBITDA $ 1,438 $ 945 $ 493 52 %

Revenues at the Television segment increased $1.5 billion or 18% for fiscal 2025, as compared to fiscal 2024, due to higher advertising, affiliate and other revenues.

The increase of $1.2 billion or 28% in advertising revenue was primarily due to the impact related to sports programming led by revenues from the broadcast of Super Bowl LIX in February 2025 and higher pricing.

Also contributing to this increase was the impact of higher political advertising revenue due to the 2024 presidential and congressional elections predominantly at the Company’s owned and operated television stations and continued digital growth led by the Tubi AVOD service.

The increase of $204 million or 7% in affiliate fee revenue was primarily due to higher average rates per subscriber partially offset by a lower average number of subscribers at the Company’s owned and operated television stations and higher fees received from television stations that are affiliated with the FOX Network.

The increase of $94 million or 17% in other revenues was primarily due to higher content revenue.

Television Segment EBITDA increased $439 million or 87% for fiscal 2025, as compared to fiscal 2024, primarily due to the revenue increases noted above, partially offset by higher expenses.

Operating expenses increased $936 million or 15% primarily due to higher sports programming rights amortization and production costs driven by higher NFL costs, including the broadcast of Super Bowl LIX in February 2025, partially offset by the absence of WWE.

Also contributing to this increase was higher digital content costs and entertainment programming rights amortization.

Selling, general and administrative expenses increased $75 million or 8% primarily due to higher employee costs.

Revenues at the Television segment increased $341 million or 4% for fiscal 2026, as compared to fiscal 2025, due to higher advertising, distribution and content and other revenues.

The increase of $318 million or 6% in advertising revenue was primarily due to sports programming led by the broadcasts of the FIFA Men’s World Cup and additional NFL and MLB postseason games and higher pricing partially offset by the absence of the February 2025 broadcast of Super Bowl LIX .

Also contributing to this increase was continued digital growth led by the Tubi AVOD service.

These increases were partially offset by lower political advertising revenue principally due to the absence of the 2024 presidential and congressional elections.

Distribution revenue remained relatively consistent primarily due to higher average rates per subscriber partially offset by a lower average number of subscribers at the Company’s owned and operated television stations and higher fees received from television stations that are affiliated with the FOX Network.

The increase of $17 million or 3% in content and other revenues was primarily due to higher digital content revenue.

Television Segment EBITDA increased $493 million or 52% for fiscal 2026, as compared to fiscal 2025, primarily due to the revenue increases noted above and lower expenses.

Operating expenses decreased $207 million or 3% primarily due to lower sports programming rights amortization led by the absence of the February 2025 broadcast of Super Bowl LIX partially offset by the broadcast of the FIFA Men’s World Cup and higher NFL costs, including the broadcast of an additional NFL postseason game.

Also partially offsetting this decrease was higher digital content costs.

Selling, general and administrative expenses increased $55 million or 5% primarily due to higher employee costs, partially offset by lower legal costs.

Corporate and Other

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Segment EBITDA $ (631) $ (351) $ (280) (80) %

Revenues within Corporate and Other for fiscal 2025 and 2024 include revenues generated by Credible and the operation of the FOX Studio Lot.

Operating expenses for fiscal 2025 and 2024 include advertising and promotional expenses at Credible.

Selling, general and administrative expenses for fiscal 2025 and 2024 primarily relate to employee costs, professional fees and the costs of operating the FOX Studio Lot.

** not meaningful

Revenues within Corporate and Other for fiscal 2026 and 2025 include distribution revenue at FOX One and revenues generated by Credible and the operation of the FOX Studio Lot.

Operating expenses for fiscal 2026 and 2025 include costs associated with the launch of FOX One and advertising and promotional expenses at Credible.

Selling, general and administrative expenses for fiscal 2026 and 2025 primarily relate to employee costs, professional fees, costs associated with the launch of FOX One and the costs of operating the FOX Studio Lot.

Corporate and Other EBITDA decreased $280 million or 80% for fiscal 2026, as compared to fiscal 2025, primarily due to intercompany FOX branded content and marketing costs associated with the launch of FOX One, which more than offset related distribution revenue.

Non-GAAP Financial Measures

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Adjusted EBITDA does not include:

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.

Effective July 1, 2025, the Company no longer removes the impact of amortization of cable distribution investments when calculating Adjusted EBITDA.

Prior periods were not restated as the impact of the change is immaterial to the calculation.

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.

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The Company has approximately $4.2 billion of cash and cash equivalents as of June 30, 2026 and an unused five-year $1.0 billion unsecured revolving credit facility (See Note 9—Borrowings to the accompanying Financial Statements).

The Company also has access to the worldwide capital markets, subject to market conditions.

As of June 30, 2025, the Company was in compliance with all of the covenants under its revolving credit facility, and it does not anticipate any noncompliance with such covenants.

In addition, the Company can draw on the Term Loan Facility and commitments under the Bridge Facility to finance the cash portion of the Merger consideration (See Note 3—Acquisitions, Disposals and Other Transactions to the accompanying Financial Statements).

The Company also has access to global capital markets, subject to market conditions.

As of June 30, 2026, the Company was in compliance with all of the covenants under the Company’s facilities, and it does not anticipate any noncompliance with such covenants.

The principal uses of cash that affect the Company’s liquidity position include the following:

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Net cash provided by operating activities $ 1,970 $ 3,324

The increase in net cash provided by operating activities during fiscal 2025, as compared to fiscal 2024, was primarily due to higher Segment EBITDA, principally due to higher political advertising receipts from the 2024 presidential and congressional elections along with receipts from Super Bowl LIX in February 2025, partially offset by higher content payments.

The decrease in net cash provided by operating activities during fiscal 2026, as compared to fiscal 2025, was primarily due to lower advertising receipts due to the absence of Super Bowl LIX and the 2024 presidential and congressional elections partially offset by the FIFA Men’s World Cup in the current year and higher sports programming payments.

Net cash used in investing activities for fiscal 2026 and 2025 was as follows (in millions):

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Net cash used in investing activities $ (705) $ (537)

The increase in net cash used in investing activities during fiscal 2025, as compared to fiscal 2024, was primarily due to the fiscal 2025 acquisitions (See Note 3—Acquisitions, Disposals, and Other Transactions to the accompanying Financial Statements), partially offset by a decrease in the Company’s investments and capital expenditures.

The increase in net cash used in investing activities during fiscal 2026, as compared to fiscal 2025, was primarily due to an increase in the Company’s investments and capital expenditures, partially offset by a decrease in the Company’s acquisitions.

Net cash used in financing activities for fiscal 2026 and 2025 was as follows (in millions):

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Net cash used in financing activities $ (2,411) $ (1,755)

The increase in net cash used in financing activities during fiscal 2025, as compared to fiscal 2024, was primarily due to the net impact of the October 2023 issuance of $1.25 billion of senior notes and the repayment of $1.25 billion and $600 million of senior notes that matured in January 2024 and April 2025, respectively (See Note 9—Borrowings to the accompanying Financial Statements).

The increase in net cash used in financing activities during fiscal 2026, as compared to fiscal 2025, was primarily due to activity under the stock repurchase program, including the $1.5 billion accelerated share repurchase transaction (See Note 11—Stockholders’ Equity to the accompanying Financial Statements under the heading “Stock Repurchase Program”), and the Company’s purchase of noncontrolling interest, partially offset by the repayment of $600 million of senior notes that matured in April 2025.

Stock Repurchase Program

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Debt Instruments

The following table summarizes cash (used in) repayment of borrowings and cash from borrowings for fiscal 2025 and 2024:

For the years ended June 30,

(in millions)

Notes due 2025 and 2024 (a)

$ (600) $ (1,250)

Notes due 2033 (b)

Total borrowings $ (600) $ (18)

In April 2025 and January 2024, $600 million of 3.050% 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).

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

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

During fiscal 2025, cash used in the repayment of borrowings was $600 million for the 3.050% senior notes which matured and were repaid in full in April 2025.

Ratings of the Senior Notes

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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).

Bridge Facility

In connection with the Merger Agreement, in June 2026 , the Company entered into a commitment letter for the Bridge Facility which may be drawn on for the purpose of financing the cash portion of the Merger consideration (See Note 3—Acquisitions, Disposals and Other Transactions to the accompanying Financial Statements).

Term Loan Agreement

In connection with the Merger Agreement, in June 2026 , the Company entered into the Term Loan Facility to fund the cash portion of the Merger consideration, which has a maturity date of two years after the closing of the Roku Transaction and the Term Loan Facility is funded (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 “Licensed Programming,” “Other commitments and contractual obligations” and “Contingencies.”

Pension and other postretirement benefits and uncertain tax benefits

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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 2026 (See Note 15—Pension and

Other Postretirement Benefits to the accompanying Financial Statements for further discussion of the Company’s pension and OPEB plans).

The Company does not expect its net OPEB payments to be material in fiscal 2027 (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 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 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.

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.

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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 is recognized as the commercials are aired.

Advertising revenue from customers is recognized as the commercials are aired or streamed.

Certain of the Company’s advertising contracts have guarantees of a certain number of targeted audience views, referred to as impressions, where the performance obligation is the guarantee and revenue is recognized as the guarantee is satisfied.

For contracts without guarantees, the individual advertising spots are the performance obligation and consideration is allocated based on relative standalone selling price.

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.

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 MVPDs for their signals.

Affiliate fee revenue is recognized as the Company satisfies the performance obligation by continuously making the network programming available to the customer over the term of the agreement.

For contracts without guarantees, the individual advertising spots are the performance obligation and consideration is allocated based on its relative standalone selling price.

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

The Company generates distribution revenue from affiliate fees for agreements with MVPDs for cable network programming and retransmission fees for the broadcast of the Company’s owned and operated television stations and for agreements with independently owned television stations that are affiliated with the FOX Network.

In addition, the Company generates distribution revenue from subscription fees for the Company’s direct-to-consumer streaming services.

Affiliate fee revenue is recognized as the Company satisfies the performance obligation by continuously making the 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.

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

Subscription revenue for the Company’s direct-to-consumer streaming services are recognized evenly over the subscription period.

Licensed and 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.

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 included within Inventories, net in the Consolidated Balance Sheets, and license fees for programming with an initial license period of greater than one year are classified as non-current

inventories included within Other non-current assets in the Consolidated Balance Sheets.

Licensed programming is predominantly amortized as the associated programs are made available over the shorter of the license period or the period in which an economic benefit is expected to be derived.

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Goodwill and Other Intangible Assets

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

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

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The Company allocates goodwill to disposed businesses using the relative fair value method.

Carrying values of goodwill and intangible assets with indefinite lives are reviewed at least annually for possible impairment.

Carrying values of goodwill and intangible assets with indefinite lives are tested annually for impairment, or earlier if events occur or circumstances change that would more likely than not reduce the fair value below its carrying amount.

The Company’s impairment review is based on a discounted cash flow analysis and market-based valuation approach that requires significant management judgment.

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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 broadcast industry.

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.

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 2025, the Company recorded a non-cash impairment charge for intangible assets of approximately $70 million primarily related to FCC licenses in Restructuring, impairment and other corporate matters in the Statements of Operations within the Television segment.

Based on the Company’s annual assessment, the carrying value of FCC licenses in certain markets exceeded their fair value primarily as a result of updated market data, including lower expected future advertising revenue.

Additionally, the fair value of FCC licenses in certain markets exceeded their respective carrying value by less than 10% as of June 30, 2025.

During fiscal 2026, the Company recorded a non-cash impairment charge for intangible assets of approximately $64 million primarily related to FCC licenses in Restructuring, impairment and other corporate matters in the accompanying Consolidated Statements of Operations within the Television segment.

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The Company participates in and/or sponsors various pension, savings and postretirement benefit plans.

Pension plans and postretirement benefit plans are closed to new participants with the exception of a small group covered by collective bargaining agreements.

Pension plans and postretirement benefit plans are closed to new participants with the exception of a limited number of employees covered by collective bargaining agreements.

The measurement and recognition of costs of the Company’s pension and OPEB plans require the use of significant management judgments, including discount rates, expected return on plan assets and other actuarial assumptions.

For financial reporting purposes, net periodic pension expense is calculated based upon a number of actuarial assumptions, including a discount rate, an expected rate of return on plan assets and mortality.

The Company considers current market conditions, including changes in investment returns and interest rates, in

making these assumptions.

The Company considers current market conditions, including changes in investment returns and interest rates, in making these assumptions.

The expected long-term rate of return is determined using the current target asset allocation of 22% equity securities, 71% fixed income securities and 7% in other investments, and applying expected future returns for the various asset classes and correlations amongst the asset classes.

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

Fiscal 2026 net periodic pension expense for the Company’s pension plans is expected to be approximately $35 million, consistent with the amount recognized in fiscal 2025.

Net periodic pension expense for the Company’s pension plans is expected to decrease from $35 million in fiscal 2026 to approximately $28 million in fiscal 2027, primarily due to asset gains recognized during fiscal 2026.

Legal Matters

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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.

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

CAUTION CONCERNING FORWARD-LOOKING STATEMENTS

This document contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.

All statements other than statements of historical or current fact are “forward-looking statements” for purposes of federal and state securities laws, including any statements regarding (i) future earnings, revenues or other measures of the Company’s financial performance;

(ii) the Company’s plans, strategies and objectives for future operations;

(iii) proposed new programming or other offerings;

(iv) future economic conditions or performance;

and (v) assumptions underlying any of the foregoing.

Forward-looking statements may include, among others, the words “may,” “will,” “should,” “likely,” “anticipates,” “expects,” “intends,” “plans,” “projects,” “believes,” “estimates,” “outlook” or any other similar words.

(ii) future earnings, revenues or other measures of the Company’s financial performance;

(iii) the Company’s plans, strategies and objectives for future operations;

(iv) proposed new programming or other offerings;

(v) future economic conditions or performance;

and (vi) assumptions underlying any of the foregoing.

Forward-looking statements may include, among others, the words “may,” “will,” “could,” “should,” “would,” “likely,” “anticipates,” “expects,” “intends,” “plans,” “projects,” “believes,” “estimates,” “outlook” or any other similar words.

Although the Company’s management believes that the expectations reflected in any of the Company’s forward-looking statements are reasonable, actual results could differ materially from those projected or assumed in any forward-looking statements.

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Important factors that could cause the Company’s actual results, performance and achievements to differ materially from those estimates or projections contained in the Company’s forward-looking statements include, but are not limited to, government regulation, economic, strategic, political and social conditions and the following factors:

• the impact of the Roku Transaction, which may be affected by various factors, including closing conditions, regulatory approvals, termination of the Merger Agreement, restrictions on the Company’s ability to pursue alternative transactions, potential litigation, business disruptions while the transaction is pending, impacts on the Common Stock, increased indebtedness, and the Company’s ability to integrate operations and realize anticipated benefits post-closing, as well as the risk that the transaction may be delayed or not completed at all;

• evolving technologies and distribution platforms and offerings and changes in consumer behavior as consumers seek more control over when, where and how they consume content, and related impacts on advertisers and MVPDs;

• declines in advertising expenditures due to various factors such as the economic prospects of advertisers or the economy, evolving technologies and distribution platforms and related changes in consumer behavior and shifts in advertisers’ expenditures, the evolving digital advertising market , major sports events and election cycles, and audience measurement methodologies’ ability to accurately reflect actual multiplatform viewership levels;

• declines in advertising expenditures due to various factors such as the economic prospects of advertisers or the economy, evolving technologies and distribution platforms and related changes in consumer behavior and shifts in advertisers’ expenditures, the evolving digital advertising market, major sports events and election cycles and the evolution of audience measurement methodologies;

• further declines in the number of subscribers to MVPD services;

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• 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;

• the failure or destruction of satellites or transmitter facilities the Company depends on to distribute its programming and changes in the availability and use of satellite transmission spectrum;

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

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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