Twenty-First Century Fox, Inc. (NASDAQ:FOXA) Q2 2018 Earnings Conference Call - Preliminary Transcript

Feb 07, 2018 • 04:30 pm ET


Twenty-First Century Fox, Inc. (NASDAQ:FOXA) Q2 2018 Earnings Conference Call - Preliminary Transcript


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Ladies and gentlemen, thank you for standing by and welcome to the 21st Century Fox Second Quarter 2018 Earnings Conference Call. At this time, all lines are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will be given at that time. (Operator Instructions) As a reminder, this conference is being recorded.

I would now like to turn the conference over to our host, Mr. Reed Nolte, the Executive Vice President of Investor Relations.

Reed Nolte

Thank you very much, Operator. Hello, everyone, and welcome to our second quarter fiscal 2018 earnings conference call. On the call, today are Lachlan Murdoch, Executive Chairman, James Murdoch, Chief Executive Officer, and John Nallen, our Chief Financial Officer. First, we'll give some prepared remarks on the most recent quarter, and then we'll be happy to take questions from the investment community.

This call may include certain forward-looking information with respect to 21st Century Fox's business and strategy. Actual results could differ materially from what is said. The Company has formed 10-Q for the three months ended December 31, 2017, identifies risks and uncertainties that could cause actual results to differ. And these statements are qualified by the cautionary statements contained in such filings. Additionally, this call will include certain non-GAAP financial measurements, the definition of and a reconciliation of such measures can be found in our earnings release and our 10-Q filing. Please note that certain financial measures used in this call such as segment operating income, before depreciation and amortization, often referred to as EBITDA, and adjusted earnings per share are expressed on a non-GAAP basis. The GAAP to non-GAAP reconciliation of these non-GAAP measures is included in our earnings release.

And with that, I'm pleased to turn it over to Lachlan

Lachlan Murdoch

Thanks, Reed, and good afternoon, everyone. It's been nearly two months since we announced our plans to create a dynamic, new Fox and to merge the remainder of our business with Disney. Over these past weeks, it's clear that investors are embracing our plan we firmly believe these transactions will unlock the full value of our iconic brands and better position all of our businesses to compete in a rapidly evolving media and entertainment landscape.

But, until the Disney deal closes sometime next year, we remain wholly focused on executing against the same growth strategies that made these strategies possible in the first place, which brings us to the second fiscal quarter where we delivered top line growth of 5% despite difficult comps driven largely by double-digit growth at both our domestic and international cable network businesses.

Importantly, this is underpinned by continued acceleration in domestic affiliate revenue. We drove a 12% year-over-year increase to sequentially surpassing the 11% gain of the prior quarter. Our strategy has been to power (inaudible) growth through careful but steady investment in our core brands where we have made solid progress in strengthening our news, sport, and entertainment businesses. Integral to this strategy is live sport, in fact, live sport has never been