8-KOther Events

Fox Corp 8-K Report, Corporate Update (Mar 31, 2020)

Filed March 31, 2020For Securities:FOXAFOX

Summary

This 8-K filing from Fox Corporation (FOXA) addresses the significant impacts of the COVID-19 pandemic and an amendment to its revolving credit agreement. The company acknowledges that the pandemic is affecting its business operations, including the cancellation or postponement of sports events and suspension of entertainment content production, while noting strong national news ratings. The uncertainty surrounding the duration and severity of COVID-19 makes it challenging to forecast future performance, cash flows, and advertising revenues, with a potential for material adverse effects on its financial condition in the near to medium term. Additionally, Fox Corp. announced its intention to amend its existing credit agreement. This amendment is primarily designed to exclude a certain amount of cash from indebtedness calculations for the operating income leverage ratio and to accommodate changes related to new lease accounting principles. Importantly, as of the filing date, the company had not drawn on its revolving credit facility, indicating a healthy liquidity position at that time.

Key Highlights

  • 1COVID-19 is impacting Fox Corp.'s business, leading to cancellations/postponements of sports events and suspension of entertainment content production.
  • 2National news ratings remain strong despite the pandemic.
  • 3The company acknowledges significant uncertainty regarding the future impact of COVID-19 on its operations, financial condition, and advertising revenues.
  • 4A material adverse effect on the company's business is possible due to the evolving COVID-19 situation.
  • 5Fox Corp. intends to amend its revolving credit agreement to adjust calculations for the operating income leverage ratio and accommodate new lease accounting standards.
  • 6As of March 31, 2020, Fox Corp. had not drawn any funds from its revolving credit facility, suggesting ample liquidity.
  • 7The filing includes a cautionary statement regarding forward-looking statements and the risks associated with them, including the impact of COVID-19.

Frequently Asked Questions

COVID-19 is impacting Fox Corporation by causing cancellations or postponements of sports events and suspending the production of certain entertainment content. However, the company's national news ratings remain strong.

The amendment aims to adjust the calculation of the operating income leverage ratio by deducting a certain amount of cash from indebtedness and to incorporate changes related to the adoption of new lease accounting principles.

As of March 31, 2020, Fox Corporation had not drawn on its revolving credit facility, indicating that the company had full access to the available credit line at that time.

The company states that the evolving and uncertain nature of the COVID-19 situation makes it challenging to estimate future performance, including its cash flows and advertising revenues. The impact could be materially adverse to its business, financial condition, or results of operations over the near to medium term.