Fox Corp (FOXA) FY 2026 MD&A

ITEM 7.    MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Readers should carefully review this document and the other documents filed by Fox Corporation (“FOX” or the “Company”) with the Securities and Exchange Commission (the “SEC”). This section should be read together with the consolidated financial statements and related notes appearing elsewhere in this Annual Report on Form 10-K. The consolidated financial statements are referred to as the “Financial Statements” herein.

INTRODUCTION

Basis of Presentation

The Company’s financial statements are presented on a consolidated basis.

Management’s discussion and analysis of financial condition and results of operations is intended to help provide an understanding of the Company’s financial condition, changes in financial condition and results of operations. This discussion is organized as follows:

•Overview of the Company’s Business—This section provides a general description of the Company’s businesses, as well as developments that occurred either during the fiscal year ended June 30, (“fiscal”) 2026 or early fiscal 2027 that the Company believes are important in understanding its results of operations and financial condition or to disclose known trends.

•Results of Operations—This section provides an analysis of the Company’s results of operations for fiscal 2026 and 2025. This analysis is presented on both a consolidated and a segment basis. In addition, a brief description is provided of significant transactions and events that impact the comparability of the results being analyzed.

•Liquidity and Capital Resources—This section provides an analysis of the Company’s cash flows for fiscal 2026 and 2025, as well as a discussion of the Company’s outstanding debt and commitments, both firm and contingent, that existed as of June 30, 2026. 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 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. Refer to Item 1A. “Risk Factors” in this Annual Report for a discussion of the risk factors applicable to the Company.

Refer to Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2025 as filed with the SEC on August 6, 2025 for management’s discussion and analysis of our financial condition and results of operations for fiscal 2024, including comparison to fiscal 2025.

OVERVIEW OF THE COMPANY’S BUSINESS

The Company is a news, sports and entertainment company, which manages and reports its businesses in four operating segments: Cable Network Programming, Television, Credible and the FOX Studio Lot with the

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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.

•Television, which produces, acquires, markets and distributes programming through the FOX broadcast network, advertising-supported video-on-demand (“AVOD”) service Tubi, 29 full power broadcast television stations, including 11 duopolies, and other digital platforms, primarily in the U.S. Eighteen of the broadcast television stations are affiliated with the FOX Network and 11 are affiliated with MyNetworkTV. The segment also includes various production companies that produce content for the Company and third parties.

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 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. consumer finance marketplace. 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.

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 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. U.S. 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. “Business” and Item 1A. “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

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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

Results of Operations—Fiscal 2026 versus Fiscal 2025

The following table sets forth the Company’s operating results for fiscal 2026, as compared to fiscal 2025:

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

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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 $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 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

The Company’s operating segments have been determined in accordance with the Company’s internal management structure, which is organized based on operating activities. The Company evaluates performance based upon several factors, of which the primary financial measure is Segment EBITDA (defined below). 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, 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: 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

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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

The following tables set forth the Company’s Revenues and Segment EBITDA for fiscal 2026, as compared to fiscal 2025:

Cable Network Programming (43% of the Company’s revenues in fiscal 2026 and 2025)

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. Distribution

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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 $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)

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.

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Corporate and Other

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

Adjusted EBITDA is defined as Revenues less Operating expenses and Selling, general and administrative expenses. 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. 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 GAAP. In addition, this measure does not reflect cash available to fund requirements and excludes items, such as depreciation and amortization and impairment charges, which are significant components in assessing the Company’s financial performance. Adjusted EBITDA may not be comparable to similarly titled measures reported by other companies.

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Fiscal 2026 versus Fiscal 2025

The following table reconciles Net income to Adjusted EBITDA for fiscal 2026, as compared to fiscal 2025:

The following table sets forth the computation of Adjusted EBITDA for fiscal 2026, as compared to fiscal 2025:

LIQUIDITY AND CAPITAL RESOURCES

Current Financial Condition

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). 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: the acquisition of rights and related payments for entertainment and sports programming; operational expenditures including production costs; marketing and promotional expenses; expenses related to broadcasting the Company’s programming; employee and facility costs; capital expenditures; acquisitions, including redeemable noncontrolling interests; income taxes, interest and dividend payments; debt repayments; legal settlements; and stock repurchases.

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.

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Sources and Uses of Cash—Fiscal 2026 vs. Fiscal 2025

Net cash provided by operating activities for fiscal 2026 and 2025 was as follows (in millions):

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):

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):

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

See Note 11—Stockholders’ Equity to the accompanying Financial Statements under the heading “Stock Repurchase Program.”

Dividends

Dividends paid in fiscal 2026 totaled $0.56 per share of FOX’s Class A Common Stock, par value $0.01 per share (the “Class A Common Stock”), and Class B Common Stock, par value $0.01 per share (the “Class B Common Stock” and, together with the Class A Common Stock, the “Common Stock”). Subsequent to June 30, 2026, the Company declared a semi-annual dividend of $0.29 per share on both the Class A Common Stock and the Class B Common Stock. The dividend declared is payable on September 23, 2026 with a record date for determining dividend entitlements of September 02, 2026.

Based on the number of shares outstanding as of June 30, 2026, and the new annual dividend rate stated above, the total aggregate cash dividends expected to be paid to stockholders in fiscal 2027 is approximately $245 million.

Debt Instruments

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.

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Ratings of the Senior Notes

The following table summarizes the Company’s credit ratings as of June 30, 2026:

Revolving Credit Agreement

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

The Company has commitments under certain firm contractual arrangements (“firm commitments”) to make future payments. 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 “Legal and Other Contingencies.”

Pension and other postretirement benefits and uncertain tax benefits

The table in Note 14—Commitments and Contingencies to the accompanying Financial Statements excludes the Company’s pension and other postretirement benefits (“OPEB”) obligations and the gross unrecognized tax benefits for uncertain tax positions as the Company is unable to reasonably predict the ultimate amount and timing. The Company made contributions of $36 million and $40 million to its pension plans in fiscal 2026 and 2025, respectively. 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. Assuming that actual plan asset returns are consistent with the Company’s expected plan returns in fiscal 2027 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. Required pension plan contributions for the next fiscal year are not expected to be material but the Company may make voluntary contributions in future periods. 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. 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

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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.

Use of Estimates

See Note 2—Summary of Significant Accounting Policies to the accompanying Financial Statements under the heading “Use of Estimates.”

Revenue Recognition

Revenue is recognized when control of the promised goods or services is transferred to the Company’s customers in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. The Company considers the terms of each arrangement to determine the appropriate accounting treatment. Significant judgments used in revenue recognition include the identification of performance obligations and the allocation of consideration, including those contracts containing bundled advertising sales or licenses.

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

Inventories

Licensed and Owned Programming

The Company incurs costs to license programming rights and to produce owned programming. Licensed programming includes costs incurred by the Company for access to content owned by third parties. The Company has single and multi-year contracts for sports and non-sports programming. 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. The costs of multi-year sports contracts are primarily amortized based on the ratio of each contract’s current period attributable revenue to the estimated total remaining attributable revenue. Estimates can change and, accordingly, are reviewed periodically and amortization is adjusted as necessary. Such changes in the future could be material.

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Owned programming, included within Other non-current assets in the Consolidated Balance Sheets, includes content internally developed and produced as well as co-produced content. Capitalized costs for owned programming, including direct costs, production overhead and development costs, are predominantly amortized using the individual-film-forecast-computation method, which is based on the ratio of current period revenue to estimated total future remaining revenue, and related costs are expensed as incurred. Future remaining revenue includes imputed license fees for content used by FOX as well as revenue expected to be earned based on distribution strategy and historical performance of similar content. Changes to estimated future revenues may result in impairments or changes in amortization patterns. When production partners distribute owned programming on the Company’s behalf, the net participation in profits is recorded as content license revenue. Projects in-process are written off at the earlier of abandonment or three years after initial capitalization.

Inventories are evaluated for recoverability when an event or circumstance occurs that indicates that fair value may be less than unamortized costs. The Company will determine if there is an impairment by evaluating the fair value of the inventories, which are primarily supported by internal forecasts as compared to unamortized costs. Where an evaluation indicates unamortized costs, including advances on multi-year sports rights contracts, are not recoverable, amortization of rights is accelerated in an amount equal to the amount by which the unamortized costs exceed fair value. Owned programming is predominantly monetized and tested for impairment on an individual basis. Licensed programming is predominantly monetized as a group and tested for impairment on a channel, network, or daypart basis. The recoverability of certain sports rights is assessed on an aggregate basis. The Company recognized impairments of approximately $90 million, $40 million, and $40 million in fiscal 2026, 2025 and 2024, respectively, related to owned programming at the Television segment, which were recorded in Operating expenses in the accompanying 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 and trademarks and other copyrighted products.

The Company accounts for its business combinations under the acquisition method of accounting. The total cost of acquisitions is allocated to the underlying net assets acquired, based on their respective estimated fair values at the date of acquisition. 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, 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. The judgments made in determining the estimated fair value assigned to each class of intangible assets acquired, their reporting unit, as well as their useful lives can significantly impact net income. The Company allocates goodwill to disposed businesses using the relative fair value method.

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. 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.

The direct valuation method used for FCC licenses requires, among other inputs, the use of published industry data that is 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 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

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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. 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, 2026. An increase to the discount rate of 0.5 percentage points, or a decrease to the terminal growth rate of 0.5 percentage points, assuming no changes to other long-term assumptions, would cause the aggregate fair value of FCC licenses to fall below the aggregate carrying value by approximately $125 million and $90 million, respectively. Further adverse changes in market conditions may result in additional non-cash impairment charges.

During fiscal 2026, the Company determined that the goodwill included in the accompanying Consolidated Balance Sheets as of June 30, 2026 was not impaired based on the Company’s annual assessment and there are no reporting units at risk of impairment. 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.

Income Taxes

The Company is subject to income tax primarily in various domestic jurisdictions. The Company computes its annual tax rate based on the statutory tax rates and tax planning opportunities available to it in the various jurisdictions in which it earns income. Tax laws are complex and subject to different interpretations by the taxpayer and respective governmental taxing authorities. Significant judgment is required in determining the Company’s tax expense and in evaluating its tax positions, including evaluating uncertainties.

The Company records valuation allowances to reduce deferred tax assets to the amount that is more likely than not to be realized. In making this assessment, management analyzes future taxable income, reversing temporary differences and ongoing tax planning strategies. Should a change in circumstances lead to a change in judgment about the realizability of deferred tax assets in future years, the Company would adjust related valuation allowances in the period that the change in circumstances occurs, along with a corresponding increase or charge to income.

Employee Costs

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 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.

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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 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. A portion of the fixed income investments is allocated to cash to pay near-term benefits.

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 hundreds of high-quality corporate bonds.

The key assumptions used in developing the Company’s fiscal 2026, 2025 and 2024 net periodic pension expense for its plans consist of the following:

Discount rates are volatile from year to year because they are determined based upon the prevailing rates as of the measurement date. The Company will utilize discount rates of 5.6% and 5.1% in calculating the fiscal 2027 service cost and interest cost, respectively, for its plans. The Company will use an expected long-term rate of return of 6.1% for fiscal 2027 based principally on the future return expectation of the plans’ asset mix. Changes in assumptions and differences between assumptions and actual experience has resulted in accumulated pre-tax net losses on the Company’s pension and postretirement benefit plans, which as of June 30, 2026 were $145 million as compared to $170 million as of June 30, 2025. These deferred losses are being systematically recognized in future net periodic pension expense. Unrecognized losses in excess of 10% of the greater of the market-related value of plan assets or the plans’ projected benefit obligation (“PBO”) are recognized over the average future service of the plan participants or average future life of the plan participants.

The Company made contributions of $36 million, $40 million and $86 million to its pension plans in fiscal 2026, 2025 and 2024, respectively. The majority of these contributions were voluntarily made to improve the funding status of the plans. Future plan contributions are dependent upon actual plan asset returns, statutory requirements and interest rate movements. Assuming that actual plan returns are consistent with the Company’s expected plan returns in fiscal 2027 and beyond and that interest rates remain constant, the Company would not be required to make any material statutory contributions to its pension plans for the immediate future. The Company will continue to make voluntary contributions as necessary to improve funded status.

Changes in net periodic pension expense may occur in the future due to changes in the Company’s expected rate of return on plan assets and discount rate resulting from economic events. The following table

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highlights the sensitivity of the Company’s pension obligations and expense to changes in these assumptions, assuming all other assumptions remain constant:

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

The Company establishes an accrued liability for legal claims and indemnification claims when the Company determines that a loss is both probable and the amount of the loss can be reasonably estimated. Once established, accruals are adjusted from time to time, as appropriate, in light of additional information. The amount of any loss ultimately incurred in relation to matters for which an accrual has been established may be higher or lower than the amounts accrued for such matters. Any fees, expenses, fines, penalties, judgments or settlements which might be incurred by the Company in connection with the various proceedings could affect the Company’s results of operations and financial condition. 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) the Roku Transaction; (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. The Company’s future financial condition and results of operations, as well as any forward-looking statements, are subject to change and to inherent risks and uncertainties, such as those disclosed or incorporated by reference in our filings with the SEC. 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;

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•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;

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

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

•the popularity of the Company’s content, including special sports events; and the continued popularity of the sports franchises, leagues and teams for which the Company has acquired programming rights;

•the Company’s ability to renew programming rights, particularly sports programming rights, on sufficiently favorable terms, or at all;

•damage to the Company’s brands or reputation;

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

•the loss of key personnel;

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

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

•a degradation, failure or misuse of the Company’s network and information systems and other technology relied on by the Company that causes a disruption of services or improper disclosure of personal data or other confidential information;

•content piracy and signal theft and the Company’s ability to protect its intellectual property rights;

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

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

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

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

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

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

•the other risks and uncertainties detailed in Part I, Item 1A. “Risk Factors” in this Annual Report.

Forward-looking statements in this Annual Report speak only as of the date hereof, and forward-looking statements in documents that are incorporated by reference hereto speak only as of the date of those documents. The Company does not undertake any obligation to update or release any revisions to any forward-looking statement made herein or to report any events or circumstances after the date hereof or to reflect the occurrence of unanticipated events or to conform such statements to actual results or changes in our expectations, except as required by law.

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