Twenty-First Century Fox Inc. (NASDAQ:FOX)

The financial data over the six-year period ending June 30, 2018 reveals several notable trends related to intangible assets and goodwill.

MVPD Affiliate Agreements and Relationships

This category experienced a significant increase from $985 million in 2013 to $2,449 million in 2014, remaining relatively stable thereafter, fluctuating slightly around $2,475 million through 2018. This suggests a major acquisition or revaluation in 2014 followed by stability in this asset category.

Other Intangible Assets (Amortizable)

The "Other" amortizable intangible assets fluctuated considerably, with $1,484 million in 2013, peaking significantly at $2,920 million in 2014, then declining sharply to around $1,270 million in 2015, and stabilizing near $1,500 million by 2018. This volatility may indicate variable valuations or acquisitions/disposals within this category.

Amortizable Intangible Assets, Gross

The gross value increased sharply from $2,469 million to $5,369 million between 2013 and 2014, followed by a decline and stabilization in the $3,700-$4,000 million range from 2015 to 2018. This pattern suggests a major addition to these assets in 2014, with subsequent disposals or amortization impacting gross values.

Accumulated Amortization

Accumulated amortization showed a steady upward trend in absolute value, increasing in magnitude from -$828 million in 2013 to -$1,771 million in 2018. This indicates ongoing amortization expenses reducing the book value of these intangible assets over time.

Net Amortizable Intangible Assets

Net amortizable intangible assets peaked at $4,211 million in 2014, then consistently declined to $2,212 million by 2018. This downward trend reflects the impact of amortization over time and possibly impaired or disposed assets.

FCC Licenses

The FCC licenses asset remained stable at approximately $2,398 million from 2013 to 2017 but decreased to $2,167 million in 2018. This suggests either a revaluation or partial disposal in the most recent year.

Other Intangible Assets Not Subject to Amortization

This category varied, with values around $1,025 million in 2013, increasing to $1,724 million in 2016 and maintaining close to $1,722 million thereafter. The increase may correlate with strategic acquisitions or reclassifications.

Intangible Assets Not Subject to Amortization

Non-amortizable intangible assets rose moderately from $3,423 million in 2013 to $4,132 million in 2016, followed by a slight decline to $3,889 million in 2018. The trend shows a period of growth with a modest reduction in later years.

Net Intangible Assets

Combined net intangible assets peaked in 2014 at $8,072 million, then declined steadily to $6,101 million by 2018. This pattern aligns with the decreasing net amortizable assets and the slight reduction in non-amortizable assets.

Goodwill

Goodwill increased from $17,255 million in 2013 to $18,052 million in 2014, subsequently dropping sharply to approximately $12,513 million in 2015. From 2015 to 2018, goodwill remained relatively stable around $12,700-$12,800 million. The abrupt decrease in 2015 may indicate impairments or asset disposals.

Goodwill and Other Intangible Assets Total

The total of goodwill and other intangible assets peaked at $26,124 million in 2014, then declined consistently to $18,869 million by 2018. This reflects overall decreases in goodwill and net intangible assets after their peaks in 2014.

Overall, the data exhibits major asset revaluations or acquisitions around 2014, followed by a period of steady amortization, asset disposal, or impairment, leading to a gradual decline in net intangible assets and goodwill through 2018. The stability observed in some categories after these adjustments points to a more consistent asset base in recent years.

The reported total assets of the company fluctuated over the six-year period, starting at $50,944 million in 2013, peaking at $54,793 million in 2014, followed by a decline to $48,365 million in 2016, and then a gradual increase to $53,831 million by 2018. In contrast, the adjusted total assets, which exclude goodwill or other adjustments, showed a steadier upward trend from $33,689 million in 2013 to $41,063 million in 2018, despite a dip in 2016.

The reported stockholders’ equity experienced variability, beginning at $16,998 million in 2013, increasing slightly in 2014 and 2015, dropping significantly to $13,661 million in 2016, then rising again to reach $19,564 million in 2018. The adjusted stockholders’ equity, however, displayed negative or very low positive values in the earlier years (-$257 million in 2013 and -$634 million in 2014), before improving substantially to $4,707 million in 2015 and continuing a positive trajectory through 2018, reaching $6,796 million. This suggests significant adjustments impacting equity values, likely related to the goodwill component or other non-operational accounting items.

The reported net income attributable to stockholders showed notable volatility. It started at $7,097 million in 2013, decreased markedly to $4,514 million in 2014, rebounded strongly to $8,306 million in 2015, then declined sharply again in 2016 to $2,755 million, with slight improvement in subsequent years, reaching $4,464 million in 2018. The adjusted net income figures mirrored these amounts exactly across all years, indicating that the adjustments impacting asset and equity values did not have significant effects on the reported profitability during this period.

Overall, while the reported figures demonstrate more pronounced fluctuations in total assets and equity, the adjusted figures reveal a generally upward trend in asset base and stockholders’ equity, implying that underlying operational performance and core asset values were strengthening. The divergence between reported and adjusted equity particularly highlights the influence of goodwill or other non-cash items on the balance sheet. Net income trends suggest periods of financial volatility with recovery phases, though adjusted profitability aligns closely with reported results, underscoring consistency in core earnings despite balance sheet adjustments.

Net Profit Margin Trends

The reported net profit margin demonstrates considerable volatility over the six-year period. The margin begins at a relatively high level of 25.64% in 2013, declines sharply to 14.17% in 2014, rebounds to 28.65% in 2015, and then decreases substantially in 2016 to around 10%. A modest increase is observed in the last two years, reaching 14.68% in 2018. The adjusted net profit margin mirrors this pattern exactly, indicating that goodwill adjustments do not impact this metric.

Total Asset Turnover Patterns

Reported total asset turnover remains relatively stable throughout the years, fluctuating slightly between 0.54 and 0.58 until 2018 where it stabilizes at 0.56. However, the adjusted total asset turnover shows a higher level, starting at 0.82 in 2013, peaking at 0.87 in 2014, then gradually declining year-over-year to 0.74 in 2018. This suggests that the exclusion of goodwill inflates asset efficiency measurements.

Financial Leverage Evolution

The reported financial leverage ratio remains within a fairly narrow range, hovering around 3.0 with a minor peak at 3.54 in 2016 and declining to 2.75 in 2018. In contrast, the adjusted financial leverage, available from 2015 onwards, shows significantly higher and more erratic values — starting at 7.97 in 2015, sharply rising to 38.4 in 2016, then dropping to 12.95 in 2017 and further to 6.04 in 2018. This suggests that goodwill adjustments significantly increase the calculated leverage, particularly around 2016, indicating a higher debt dependency when adjusted figures are considered.

Return on Equity (ROE) Observations

The reported ROE follows a pattern similar to net profit margin, with an initial high of 41.75% in 2013, decreasing to 25.92% in 2014, peaking at 48.23% in 2015, and then declining significantly over the next three years to reach 22.82% in 2018. Adjusted ROE data exhibits extreme volatility and markedly higher values, with an exponential increase to 176.46% in 2016 and 296.88% in 2017 before moderating down to 65.69% in 2018. This illustrates the amplifying effect of adjusted financial leverage on equity returns, especially during 2016 and 2017.

Return on Assets (ROA) Insights

Reported ROA reflects a declining trend from 13.93% in 2013 down to a low around 5.7%-5.82% during 2016 and 2017, before recovering slightly to 8.29% in 2018. Adjusted ROA demonstrates higher values throughout the period: starting at 21.17% in 2013, reducing to 12.29% in 2014, and showing a similar dip in 2016-2017 before an increase to 10.87% in 2018. The adjusted figures indicate better asset profitability once goodwill is removed.

General Observations

The analysis indicates that goodwill adjustments significantly impact key financial ratios, particularly leverage and returns metrics. The adjusted financial leverage is markedly higher and more volatile, resulting in exaggerated adjusted ROE values during the mid-period years. This suggests that the company’s asset base including goodwill was substantial, diminishing the perceived asset turnover efficiency and inflating leverage ratios when adjusted. Profitability metrics, measured by profit margin and ROA, generally trend downward from their peaks, with partial recovery seen in the final year analyzed.

Net Income Trends

The reported net income attributable to the stockholders shows considerable fluctuation over the six-year period. It initially decreases from 7,097 million USD in 2013 to 4,514 million USD in 2014, followed by a substantial increase to 8,306 million USD in 2015. Subsequently, there is a sharp decline to 2,755 million USD in 2016, with a marginal increase to 2,952 million USD in 2017 and then a more significant rise to 4,464 million USD in 2018. The adjusted net income follows the same pattern and matches the reported figures each year, indicating no adjustments impact the net income values reported.

Net Profit Margin Analysis

The reported net profit margin exhibits a similar trend to net income, with an initial decrease from 25.64% in 2013 to 14.17% in 2014, followed by a peak of 28.65% in 2015. After this peak, the margin declines sharply to 10.08% in 2016, showing marginal improvement to 10.36% in 2017, and then increases further to 14.68% in 2018. The adjusted net profit margin replicates the reported figures without variation, suggesting no adjustments have altered profitability ratios.

Overall Insights

The data indicates a period of volatility in profitability and net income over the six years. The peak in 2015 represents a high-performance year, which is followed by weaker results in the subsequent years. Recovery signs appear in 2017 and more notably in 2018, although levels do not return to the highs seen in 2013 and 2015. The consistent matching of reported and adjusted figures for both income and profit margins implies stability in the reporting methodology without significant non-recurring adjustments.

The analysis of the financial data reveals several trends regarding the total assets and asset turnover ratios over the six-year period ending June 30, 2018.

Total Assets

The reported total assets exhibit some fluctuations. Initially, the assets increased from approximately 50.9 billion USD in mid-2013 to about 54.8 billion USD by mid-2014. This was followed by a decline over the next two years, reaching around 48.3 billion USD by mid-2016. Subsequently, there was a recovery in asset size, rising to roughly 53.8 billion USD by mid-2018.

In contrast, the goodwill-adjusted total assets show a more consistent upward trajectory despite minor volatility. Starting at 33.7 billion USD in 2013, the assets increased steadily with small dips until reaching 41.1 billion USD by 2018. This suggests underlying asset growth when excluding goodwill effects, with a compound steady increase over the period.

Total Asset Turnover

The reported total asset turnover ratios remain relatively stable, fluctuating slightly between 0.54 and 0.58 throughout the period. This indicates that the company maintained a consistent efficiency in utilizing its reported total assets to generate revenue.

Conversely, the adjusted total asset turnover ratios, which exclude goodwill, show a different pattern. In 2013 and 2014, the ratios were relatively higher at 0.82 and 0.87, respectively. However, from 2015 onwards, a gradual decline is observable, with turnover dropping to 0.74 by 2018. This descending trend implies a reduction in efficiency in using the adjusted asset base to produce revenue, suggesting that asset utilization excluding goodwill became less effective over time.

Overall, the financial data indicates that while reported total assets and their turnover ratios stayed within a narrow range, adjusting for goodwill reveals a steady increase in asset base accompanied by a decline in turnover efficiency. This divergence highlights the impact of goodwill on asset valuation and suggests potential challenges in generating revenue growth relative to the adjusted tangible asset base over the analyzed period.

The financial data over the six-year span reveal several notable trends in the assets, equity, and financial leverage of the company when considering both reported and goodwill-adjusted figures.

Total Assets

Reported total assets experienced moderate fluctuations, starting at approximately 50.9 billion USD in mid-2013, increasing to just over 54.7 billion USD in 2014, then declining to around 48.4 billion USD in 2016, and ultimately rising again to about 53.8 billion USD by 2018. This indicates some volatility but an overall modest upward movement by the end of the period.

Adjusted total assets, which exclude goodwill, show a generally steady increase from 33.7 billion USD in 2013 to 41.1 billion USD in 2018. This upward trend suggests organic growth or asset acquisitions that contribute to tangible asset bases without goodwill.

Stockholders’ Equity

The reported stockholders’ equity displayed slight growth from 17 billion USD in 2013 to 17.4 billion USD in 2014, followed by a decline to 13.7 billion USD by mid-2016. Thereafter, it rebounded considerably to reach 19.6 billion USD in 2018, indicating recovery or capital strengthening in the last two years of the examined period.

In contrast, the goodwill-adjusted stockholders’ equity figures began negatively, at -257 million USD in 2013 and decreased further to -634 million USD in 2014. From 2015 onward, this adjusted equity turned positive, rising sharply to 4.7 billion USD in 2015, dipping somewhat in 2016, and then increasing steadily to 6.8 billion USD by 2018. This pattern implies that goodwill adjustments significantly affect the equity base, revealing underlying positive tangible equity growth after the early negative values.

Financial Leverage

Reported financial leverage ratios ranged between 2.75 and 3.54 over the years. The ratio peaked at 3.54 in 2016 and decreased to 2.75 by 2018, indicating a general trend toward reduced leverage or debt relative to equity in the latter years.

The adjusted financial leverage, which considers goodwill removal, shows a much more volatile and elevated pattern. No data is available for 2013 and 2014. Starting from 7.97 in 2015, the ratio dramatically spikes to 38.4 in 2016, then decreases sharply to 12.95 in 2017 and further to 6.04 in 2018. This extreme variability highlights the impact of goodwill on leverage metrics, underscoring increased risk or debt load relative to tangible equity especially in 2016, followed by a material deleveraging.

Overall, the analysis indicates that while reported figures suggest steady asset growth and manageable leverage, adjustment for goodwill reveals significant variability in equity and leverage metrics. The negative and volatile adjusted equity in earlier years transitions to positive and improving values, suggesting a strengthening balance sheet after removing intangible asset influence. The elevated and erratic adjusted financial leverage ratios emphasize the importance of considering goodwill effects in assessing the company’s leverage and financial risk profile.

The financial data reveals significant fluctuations in both reported and adjusted figures over the analyzed periods, indicating varying performance dynamics after adjusting for goodwill.

Net Income Trends

The reported net income attributable to stockholders shows a non-linear pattern: a high of 7,097 million USD in 2013 dips substantially to 4,514 million USD in 2014, followed by a marked increase to 8,306 million USD in 2015. This peak is followed by a sharp decline in 2016 to 2,755 million USD, after which the figures stabilize with a modest rise to 2,952 million USD in 2017 and further improvement to 4,464 million USD in 2018.

The adjusted net income closely mirrors the reported values within the same range, indicating minimal adjustment impact except for 2013 where a minor difference is noted.

Stockholders’ Equity Patterns

The reported total stockholders’ equity starts at 16,998 million USD in 2013, slightly increasing to 17,418 million USD in 2014 before declining gradually to a low of 13,661 million USD in 2016. Post-2016, equity recovers to 15,722 million USD in 2017 and further to 19,564 million USD in 2018, reflecting a positive trend towards year-end.

In contrast, the adjusted equity presents negative values in early years (e.g., -257 million USD in 2013 and -634 million USD in 2014), transitioning to positive territory by 2015 at 4,707 million USD. Following a dip to 928 million USD in 2016, adjusted equity increases again to 2,930 million USD in 2017 and substantially to 6,796 million USD in 2018. These adjusted figures suggest significant goodwill adjustments impacting equity, especially notable in the initial years.

Return on Equity (ROE) Analysis

The reported ROE exhibits a declining general trend from 41.75% in 2013 to a low of 18.78% in 2017, with a modest rebound to 22.82% in 2018. This decline aligns with decreasing earnings relative to reported equity in the middle periods before a slight recovery.

Adjusted ROE data, available from 2015 onwards, shows extremely high values: 176.46% in 2015, surging to 296.88% in 2016, before decreasing to 100.75% in 2017 and further to 65.69% in 2018. These elevated ratios are likely a consequence of the lower adjusted equity base post goodwill adjustments, amplifying ROE despite fluctuations in net income.

Overall, the data illustrates volatility in earnings and equity, with considerable impact from goodwill adjustments reflected in adjusted equity and ROE. The sharp swings in adjusted ROE particularly highlight the sensitivity of performance measures when factoring out goodwill, suggesting the company’s profitability relative to its adjusted capital base varied dramatically over the periods analyzed.

Net Income Trends

The reported net income exhibited significant volatility over the analyzed periods. Starting at a high of 7,097 million USD in mid-2013, it declined sharply to 4,514 million USD in mid-2014. This was followed by a notable recovery, reaching 8,306 million USD in mid-2015. However, a pronounced drop occurred in mid-2016 to 2,755 million USD, with only a slight increase in the following year to 2,952 million USD. By mid-2018, net income rose again to 4,464 million USD, reflecting moderate improvement but remaining considerably below the earlier peak.

The adjusted net income figures mirror the reported pattern exactly, indicating that adjustments, likely relating to goodwill or other non-recurring items, did not materially alter the net income trajectory.

Total Assets Trends

The reported total assets displayed fluctuations but generally maintained a range between approximately 48,000 million USD and 55,000 million USD. The asset base rose from 50,944 million USD in mid-2013 to a peak of 54,793 million USD in mid-2014, then declined steadily to 48,365 million USD by mid-2016. Subsequently, total assets increased modestly to 50,724 million USD in mid-2017 and further to 53,831 million USD in mid-2018.

The adjusted total assets, which exclude certain intangible assets such as goodwill, reflected a lower asset base throughout the period. These values rose gradually from 33,689 million USD in mid-2013 to 41,063 million USD in mid-2018, indicating that the underlying asset base, net of intangible adjustments, experienced steady growth despite the variations seen in reported total assets.

Return on Assets (ROA) Analysis

The reported ROA followed a pattern consistent with net income trends, showing high returns in mid-2013 (13.93%) and mid-2015 (16.6%) with sharp declines in other periods. The lowest points were observed in mid-2016 (5.7%) and mid-2017 (5.82%), reflecting diminished profitability relative to total assets. A partial recovery to 8.29% occurred in mid-2018.

Adjusted ROA values, which incorporate adjusted net income and adjusted total assets, were consistently higher than reported ROA, suggesting that the exclusion of goodwill and other intangibles leads to a more favorable profitability metric. The adjusted ROA demonstrated similar volatility, peaking at 22.13% in mid-2015, dipping to 7.73% and 7.78% in mid-2016 and mid-2017 respectively, before increasing to 10.87% in mid-2018.

Summary Insights

The company’s financial performance displayed significant fluctuations over the reported six-year span. Profitability measures, both reported and adjusted, were highly variable, with strong earnings and efficiency in some years offset by periods of sharp declines. The asset base was relatively stable with some growth in the adjusted figures, indicating ongoing investments or asset acquisition net of intangible adjustments.

The higher adjusted ROA values imply that intangible assets, possibly goodwill, may be inflating the asset base and thus dampening reported profitability ratios. The overall trends suggest that while the underlying business shows capacity for strong earnings and returns, it is subject to considerable volatility, which should be monitored closely for strategic and operational implications.