UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): October 9, 2018
Twenty-First Century Fox, Inc.
(Exact name of registrant as specified in its charter)
Delaware | 001-32352 | 26-0075658 | ||
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(I.R.S. Employer Identification No.) | ||
1211 Avenue of the Americas, New York, New York |
10036 | |||
(Address of principal executive offices) | (Zip Code) |
Registrants telephone number, including area code: 212-852-7000
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.01 | Completion of Acquisition or Disposition of Assets. |
On October 3, 2018, BSkyB Holdco, Inc. (Seller) and 21st Century Fox UK Nominees Limited, each a wholly owned subsidiary of Twenty-First Century Fox, Inc. (21CF or the Company), and Comcast Bidco, a wholly owned subsidiary of Comcast Corporation, entered into a Sale and Purchase Agreement (the Sky Sale Agreement) for all of the 672,783,139 shares of Sky plc (Sky) owned by Seller (representing approximately 39% of the issued ordinary share capital of Sky) at a price of £17.28 per share, or a total of approximately £11.6 billion (the Sky Shares Sale). The transaction was previously described in a Current Report of the Company on Form 8-K filed with the Securities and Exchange Commission on October 9, 2018.
On October 9, 2018, pursuant to the Sky Sale Agreement, the Company completed the Sky Shares Sale.
Item 9.01 | Financial Statements and Exhibits. |
(b) Pro Forma Financial Information.
The Companys unaudited pro forma condensed consolidated financial statements giving effect to the completion of the Sky Shares Sale are filed as Exhibit 99.1 hereto and are incorporated herein by reference.
(d) Exhibits.
Exhibit Number |
Description | |
99.1 | Unaudited Pro Forma Condensed Consolidated Financial Statements. |
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EXHIBIT INDEX
Exhibit Number |
Description | |
99.1 | Unaudited Pro Forma Condensed Consolidated Financial Statements. |
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
TWENTY-FIRST CENTURY FOX, INC. | ||
By: |
/s/ Janet Nova | |
Janet Nova | ||
Executive Vice President and Deputy | ||
Group General Counsel |
Dated: October 11, 2018
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Exhibit 99.1
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Overview
On September 22, 2018, Twenty-First Century Fox, Inc. (Twenty-First Century Fox, 21CF or the Company) made a revised cash offer for the fully diluted share capital of Sky plc (Sky) that the Company and its affiliates do not already own at a price of £15.67 for each Sky share, following the conclusion of the auction process conducted by the UK Panel on Takeovers and Mergers. On the same day, Comcast Corporation (Comcast) announced a revised cash offer by Comcast for the entire issued and to be issued share capital of Sky at a price of £17.28 for each Sky share, which was recommended by the Sky Independent Committee. On September 26, 2018, the Company announced that it intends to lapse its offer on October 6, 2018 and that it intended to either accept the Comcast Offer or to sell its Sky shares to Comcast. On October 3, 2018, the Company entered into an agreement to sell its shares to Comcast at a price of £17.28 for each Sky share. As a result, the Company received cash consideration of approximately £11.6 billion ($15.1 billion) for its 39% interest in Sky (the Sale). The transaction was previously described in a Current Report of the Company on Form 8-K filed with the United States (U.S.) Securities and Exchange Commission (the SEC) on October 9, 2018.
Basis of preparation
The Unaudited Pro Forma Condensed Consolidated Financial Statements have been derived from the Companys historical Consolidated Financial Statements and are being presented to give effect to the Sale. The Unaudited Pro Forma Condensed Consolidated Financial Statements should be read in conjunction with the Companys historical Consolidated Financial Statements and accompanying notes in the Companys Annual Report on Form 10-K for the fiscal year ended June 30, 2018 as filed with the SEC on August 13, 2018 and which is available at the SECs web site at www.sec.gov and the Companys website at www.21cf.com/investor-relations.
The Unaudited Pro Forma Condensed Consolidated Statement of Operations for the fiscal year ended June 30, 2018 reflects the Companys results as if the Sale had occurred on July 1, 2017 and does not assume any interest income on cash proceeds. The Unaudited Pro Forma Condensed Consolidated Balance Sheet as of June 30, 2018 gives effect to the Sale as if it occurred on June 30, 2018.
The Unaudited Pro Forma Condensed Consolidated Financial Statements are subject to the assumptions and adjustments described in the accompanying notes. Given the information available at this time, the Companys management believes that these assumptions and adjustments are reasonable under the circumstances.
The Unaudited Pro Forma Condensed Consolidated Statement of Operations does not reflect material non-recurring charges following the Sale. The Company does not anticipate incurring any such charges following the Sale.
The Unaudited Pro Forma Condensed Consolidated Financial Statements have been prepared in accordance with SEC Regulation S-X Article 11 and are not intended to be a complete presentation of the Companys financial position or results of operations had the Sale occurred as of and for the period indicated. In addition, the Unaudited Pro Forma Condensed Consolidated Financial Statements are provided for illustrative and information purposes only, and are not necessarily indicative of the Companys future results of operations or financial condition had the Sale been completed on the dates assumed. The pro forma adjustments are based on available information and assumptions that the Companys management believes are reasonable, that reflect the impacts of events directly attributable to the Sale that are factually supportable, and for purposes of the Statement of Operations, are expected to have a continuing impact on the Company.
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Twenty-First Century Fox
Unaudited Pro Forma Condensed Consolidated Statement of Operations
For the fiscal year ended June 30, 2018
(in millions, except per share data)
21CF Historical(a) |
Disposition of Sky |
21CF Pro Forma |
||||||||||
Revenues |
$ | 30,400 | $ | | $ | 30,400 | ||||||
Operating expenses |
(19,769 | ) | 5 | (b) | (19,764 | ) | ||||||
Selling, general and administrative |
(3,668 | ) | | (3,668 | ) | |||||||
Depreciation and amortization |
(584 | ) | | (584 | ) | |||||||
Impairment and restructuring charges |
(72 | ) | | (72 | ) | |||||||
Equity losses of affiliates |
(138 | ) | (426 | ) (c) | (564 | ) | ||||||
Interest expense, net |
(1,248 | ) | | (1,248 | ) | |||||||
Interest income |
39 | | 39 | |||||||||
Other, net |
(550 | ) | | (550 | ) | |||||||
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|
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|
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Income (loss) from continuing operations before income tax benefit (expense) |
4,410 | (421 | ) | 3,989 | ||||||||
Income tax benefit (expense) |
364 | (274 | ) (c) | 90 | ||||||||
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|
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|
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Income (loss) from continuing operations |
4,774 | (695 | ) | 4,079 | ||||||||
Less: Net income attributable to noncontrolling interests |
(298 | ) | | (298 | ) | |||||||
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Income (loss) from continuing operations attributable to 21CF stockholders |
$ | 4,476 | $ | (695 | ) | $ | 3,781 | |||||
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EARNINGS PER SHARE DATA |
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Weighted average shares |
||||||||||||
Basic |
1,852 | 1,852 | ||||||||||
Diluted |
1,857 | 1,857 | ||||||||||
Income from continuing operations attributable to 21CF stockholders per share: |
||||||||||||
Basic |
$ | 2.42 | $ | 2.04 | ||||||||
Diluted |
$ | 2.41 | $ | 2.04 |
See accompanying Notes to the Unaudited Pro Forma Condensed Consolidated Financial Statements.
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Twenty-First Century Fox
Unaudited Pro Forma Condensed Consolidated Balance Sheet
As of June 30, 2018
(in millions)
21CF Historical(a) |
Disposition of Sky |
21CF Pro Forma |
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ASSETS |
||||||||||||
Current assets |
||||||||||||
Cash and cash equivalents |
$ | 7,622 | $ | 15,121 | (d) | $ | 22,743 | |||||
Receivables, net |
7,120 | | 7,120 | |||||||||
Inventories, net |
3,669 | | 3,669 | |||||||||
Other |
922 | | 922 | |||||||||
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Total current assets |
19,333 | 15,121 | 34,454 | |||||||||
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Non-current assets |
||||||||||||
Receivables, net |
724 | | 724 | |||||||||
Investments |
4,112 | (3,259 | ) (b), (c) | 853 | ||||||||
Inventories, net |
7,518 | | 7,518 | |||||||||
Property, plant and equipment, net |
1,956 | | 1,956 | |||||||||
Intangible assets, net |
6,101 | | 6,101 | |||||||||
Goodwill |
12,768 | | 12,768 | |||||||||
Other non-current assets |
1,319 | | 1,319 | |||||||||
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Total assets |
$ | 53,831 | $ | 11,862 | $ | 65,693 | ||||||
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LIABILITIES AND EQUITY |
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Current liabilities |
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Borrowings |
$ | 1,054 | $ | | $ | 1,054 | ||||||
Accounts payable, accrued expenses and other current liabilities |
7,190 | 119 | (e) | 7,309 | ||||||||
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Total current liabilities |
8,244 | 119 | 8,363 | |||||||||
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Non-current liabilities |
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Borrowings |
18,469 | | 18,469 | |||||||||
Other liabilities |
3,664 | | 3,664 | |||||||||
Deferred income taxes |
1,892 | 26 | (e) | 1,918 | ||||||||
Redeemable noncontrolling interests |
764 | | 764 | |||||||||
Commitments and contingencies |
||||||||||||
Total equity |
20,798 | 11,717 | (e) | 32,515 | ||||||||
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Total liabilities and equity |
$ | 53,831 | $ | 11,862 | $ | 65,693 | ||||||
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See accompanying Notes to the Unaudited Pro Forma Condensed Consolidated Financial Statements.
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Notes to the Unaudited Pro Forma Condensed Consolidated Financial Statements
a) | Reflects the Companys historical financial position and operating results as of and for the fiscal year ended June 30, 2018. |
b) | Represents the adjustment to reverse the elimination of intra-entity profits and losses on transactions between the Company and Sky. |
c) | Represents the impact to equity losses of affiliates and investments as a result of the Sale. Historically the Company accounted for its investment in Sky under the equity method of accounting, which had a carrying value of $3,306 million. As a result of the Sale, the historical equity earnings and the investment balance were eliminated. The Company has also removed from income tax expense the net deferred tax amounts, including an adjustment for the new federal statutory rate, due to the difference between the equity earnings recorded from Sky and the dividends received from Sky during the period. |
d) | Represents the cash proceeds received at closing of the Sale. |
e) | Represents the adjustments to total equity to reflect the estimated gain on the Sale, including estimated income tax effects. The estimated gain has not been reflected in the unaudited pro forma condensed consolidated statement of operations as it is considered to be nonrecurring in nature. |
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