Twenty-First Century Fox 2014 Annual Report Download - page 116

TWENTY-FIRST CENTURY FOX, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
110
Fees under the Credit Agreement will be based on the Company’s long-term senior unsecured non-credit enhanced
debt ratings. Given the current debt ratings, 21CFA pays a facility fee of 0.125% and an initial drawn cost of LIBOR
plus 1.125%.
NOTE 12. FILM PRODUCTION FINANCING
The Company enters into arrangements with third parties to co-produce certain of its theatrical productions.
These arrangements, which are referred to as co-financing arrangements, take various forms. The parties to these
arrangements include studio and non-studio entities both domestic and international. In several of these agreements,
other parties control certain distribution rights. The Filmed Entertainment segment records the amounts received for
the sale of an economic interest as a reduction of the cost of the film, as the investor assumes full risk for that
portion of the film asset acquired in these transactions. The substance of these arrangements is that the third-party
investors own an interest in the film and, therefore, receive a participation based on the third-party investor’s
contractual interest in the profits or losses incurred on the film. Consistent with the requirements of ASC 926, the
estimate of the third-party investor’s interest in profits or losses on the film is based on total estimated ultimate
revenues.
NOTE 13. STOCKHOLDERS’ EQUITY
Preferred Stock and Common Stock
Under the Twenty-First Century Fox Restated Certificate of Incorporation, the Board of Directors (the
“Board”) is authorized to issue shares of preferred stock or common stock at any time, without stockholder approval,
and to determine all the terms of those shares, including the following:
(i) the voting rights, if any, except that the issuance of preferred stock or series common stock which entitles
holders thereof to more than one vote per share requires the affirmative vote of the holders of a majority of the
combined voting power of the then outstanding shares of the Company’s capital stock entitled to vote
generally in the election of directors;
(ii) the dividend rate and preferences, if any, which that preferred stock or common stock will have compared
to any other class; and
(iii) the redemption and liquidation rights and preferences, if any, which that preferred stock or common stock
will have compared to any other class.
Any decision by the Board to issue preferred stock or common stock must, however, be taken in accordance
with the Board’s fiduciary duty to act in the best interests of the Company’s stockholders. The Company is
authorized to issue 100,000,000 shares of preferred stock, par value $0.01 per share. The Board has the authority,
without any further vote or action by the stockholders, to issue preferred stock in one or more series and to fix the
number of shares, designations, relative rights (including voting rights), preferences, qualifications and limitations of
such series to the full extent permitted by Delaware law.
The Company has two classes of common stock that are authorized and outstanding, non-voting Class A
Common Stock and voting Class B Common Stock.
As of June 30, 2014, there were approximately 36,400 holders of record of shares of Class A Common Stock
and 1,400 holders of record of Class B Common Stock.
In the event of a liquidation or dissolution of the Company, or a portion thereof, holders of Class A Common
Stock and Class B Common Stock shall be entitled to receive all of the remaining assets of the Company available
for distribution to its stockholders, ratably in proportion to the number of shares held by Class A Common Stock
holders and Class B Common Stock holders, respectively. In the event of any merger or consolidation with or into
another entity, the holders of Class A Common Stock and the holders of Class B Common Stock shall be entitled to
receive substantially identical per share consideration.