News Corporation (“News Corp” or the “Company”)
(NASDAQ:NWS)(NASDAQ:NWSA)(ASX:NWS)(ASX:NWSLV) today reported financial
results for the three months ended December 31, 2014.
Commenting on the results, Chief Executive Robert Thomson said:
“The development of the new News Corp continued apace in the second
quarter as we began the transformation of the just acquired realtor.com®,
which has certainly exceeded our expectations in traffic growth in
recent weeks. We were clearly buffeted by currency headwinds, but
the strength of our brands, the breadth of our reach, the intensifying
focus on cost discipline and the power of our portfolio meant that we
saw continued growth in revenue and increasing upside in our long-term
prospects. Our digital personality has evolved quickly, with
realtor.com® having given us a new and
influential platform, digital subscribers on the rise at our news
mastheads, robust growth at REA, and healthy e-book sales at
HarperCollins. The vision we outlined for the company is becoming
a reality, and while we have much work ahead, the foundations we have
laid over the past 18 months put us in a strong position for enduring
success and increased shareholder value.”
SECOND QUARTER RESULTS
The Company reported fiscal 2015 second quarter total revenues of $2.28
billion, a 2% increase as compared to prior year second quarter revenues
of $2.24 billion. The majority of the revenue increase reflects strength
in the Book Publishing and Digital Real Estate Services segments,
partially offset by lower advertising revenues at the News and
Information Services segment and negative foreign currency fluctuations.
Adjusted revenues (as defined in Note 1) were flat compared to the prior
year.
The Company reported second quarter Total Segment EBITDA of $328 million
compared to $327 million in the prior year. These results include $13
million and $19 million in fees and costs – net of indemnification –
related to the U.K. Newspaper Matters (as defined below) in the three
months ended December 31, 2014 and 2013, respectively, as well as $16
million of one-time transaction costs in the second quarter of fiscal
2015 related to the acquisition of Move, Inc. (“Move”). Strong revenue
performances in the Book Publishing and Digital Real Estate Services,
combined with lower expenses related to the capitalization of Amplify
Learning’s software development costs, were offset by declines at the
News and Information Services segment and negative foreign currency
fluctuations. Adjusted Total Segment EBITDA (as defined in Note 1)
increased 4% compared to the prior year.
Net income available to News Corporation stockholders was $142 million
as compared to $150 million in the prior year, primarily due to a higher
effective tax rate and lower interest income. Adjusted net income
available to News Corporation stockholders (as defined in Note 3) was
$154 million compared to $179 million in the prior year. Impairment and
restructuring charges were $17 million and $36 million in the three
months ended December 31, 2014 and 2013, respectively.
Net income available to News Corporation stockholders per share was
$0.24 as compared to $0.26 in the prior year. Adjusted EPS (as defined
in Note 3) were $0.26 compared to $0.31 in the prior year.
Free cash flow available to News Corporation improved by $58 million in
the six months ended December 31, 2014 to $275 million.
|
SEGMENT REVIEW
|
|
|
|
|
|
For the three months ended
|
|
For the six months ended
|
|
|
|
December 31,
|
|
December 31,
|
|
|
|
2014
|
|
2013
|
|
% Change
|
|
2014
|
|
2013
|
|
% Change
|
|
|
|
(in millions)
|
|
|
|
|
|
(in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
News and Information Services
|
|
$
|
1,523
|
|
|
$
|
1,612
|
|
|
(6
|
)
|
%
|
|
$
|
2,974
|
|
|
$
|
3,107
|
|
|
(4
|
)
|
%
|
|
Book Publishing
|
|
|
469
|
|
|
|
391
|
|
|
20
|
|
%
|
|
|
875
|
|
|
|
719
|
|
|
22
|
|
%
|
|
Cable Network Programming
|
|
|
112
|
|
|
|
110
|
|
|
2
|
|
%
|
|
|
251
|
|
|
|
242
|
|
|
4
|
|
%
|
|
Digital Real Estate Services
|
|
|
154
|
|
|
|
103
|
|
|
50
|
|
%
|
|
|
266
|
|
|
|
193
|
|
|
38
|
|
%
|
|
Digital Education
|
|
|
22
|
|
|
|
22
|
|
|
-
|
|
%
|
|
|
64
|
|
|
|
49
|
|
|
31
|
|
%
|
|
Other
|
|
|
-
|
|
|
|
-
|
|
|
**
|
|
|
|
|
-
|
|
|
|
-
|
|
|
**
|
|
|
|
Total Revenues
|
|
$
|
2,280
|
|
|
$
|
2,238
|
|
|
2
|
|
%
|
|
$
|
4,430
|
|
|
$
|
4,310
|
|
|
3
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment EBITDA:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
News and Information Services
|
|
$
|
216
|
|
|
$
|
255
|
|
|
(15
|
)
|
%
|
|
$
|
321
|
|
|
$
|
388
|
|
|
(17
|
)
|
%
|
|
Book Publishing
|
|
|
77
|
|
|
|
68
|
|
|
13
|
|
%
|
|
|
132
|
|
|
|
111
|
|
|
19
|
|
%
|
|
Cable Network Programming
|
|
|
54
|
|
|
|
53
|
|
|
2
|
|
%
|
|
|
86
|
|
|
|
82
|
|
|
5
|
|
%
|
|
Digital Real Estate Services(a)
|
|
|
57
|
|
|
|
55
|
|
|
4
|
|
%
|
|
|
114
|
|
|
|
99
|
|
|
15
|
|
%
|
|
Digital Education
|
|
|
(24
|
)
|
|
|
(44
|
)
|
|
45
|
|
%
|
|
|
(48
|
)
|
|
|
(95
|
)
|
|
49
|
|
%
|
|
Other(b)
|
|
|
(52
|
)
|
|
|
(60
|
)
|
|
13
|
|
%
|
|
|
(107
|
)
|
|
|
(117
|
)
|
|
9
|
|
%
|
|
Total Segment EBITDA
|
|
$
|
328
|
|
|
$
|
327
|
|
|
-
|
|
%
|
|
$
|
498
|
|
|
$
|
468
|
|
|
6
|
|
%
|
|
|
|
|
|
** - Not meaningful
|
|
(a)
|
|
Digital Real Estate Services Segment EBITDA for the three and six
months ended December 31, 2014 includes transaction related costs of
$16 million and $18 million, respectively, related to the
acquisition of Move.
|
|
(b)
|
|
Other Segment EBITDA for the three and six months ended December 31,
2014 includes fees and costs, net of indemnification, related to the
U.K. Newspaper Matters of $13 million and $27 million, respectively.
Other Segment EBITDA for the three and six months ended December 31,
2013 includes fees and costs, net of indemnification, related to the
U.K. Newspaper Matters of $19 million and $36 million, respectively.
|
|
|
News and Information Services
Revenues for the second quarter of fiscal 2015 decreased $89 million, or
6%, compared to the prior year. Australian newspapers revenues declined
8% due to negative foreign currency fluctuations and modest advertising
revenue declines. Total segment advertising revenues declined 9%, driven
primarily by weaknesses in the UK print advertising market, lower
revenue from free-standing insert products at News America Marketing and
negative foreign currency fluctuations. The declines were partially
offset by higher advertising revenues at Dow Jones, across the Wall
Street Journal franchise. Circulation and subscription revenues declined
3%, due to the decline in professional information business revenues at
Dow Jones and lower print circulation volume, partially offset by higher
subscription pricing, cover price increases and higher digital
subscription volume. Adjusted revenues declined 3% compared to the prior
year.
Segment EBITDA decreased $39 million in the quarter, or 15%, as compared
to the prior year. Results were impacted by lower advertising revenue at
News UK and News America Marketing, $8 million of dual rent and other
facility costs related to the relocation of the Company’s London
operations, and $9 million of higher legal expenses at News America
Marketing, partially offset by an increase at News Corp Australia due to
lower expenses. Adjusted Segment EBITDA decreased 12% compared to the
prior year.
Book Publishing
Revenues in the quarter increased $78 million, or 20%, compared to the
prior year driven by the inclusion of the results of Harlequin
Enterprises Limited (“Harlequin”) and strong performances in Children’s
and General Books resulting from higher backlist sales during the
holiday season, which largely offset the lower revenues from the Divergent
series. E-book revenues improved by 14% versus the prior year period,
driven by Harlequin, and represented 17% of consumer revenues. Segment
EBITDA increased $9 million, or 13%, from the prior year due to the
higher revenues as discussed above, coupled with ongoing operational
efficiencies and higher contribution to profits from e-books, offset in
part by the lower contribution from the Divergent series.
Adjusted revenues were flat and Adjusted Segment EBITDA decreased 4%,
compared to the prior year.
Cable Network Programming
In the second quarter of fiscal 2015, revenues increased $2 million, or
2%, compared to the prior year primarily due to higher affiliate pricing
and increased subscribers. Segment EBITDA in the quarter increased $1
million, or 2%, due to higher revenues, partially offset by negative
foreign currency fluctuations and higher programming rights and
production costs. Adjusted revenues increased 11% and Adjusted Segment
EBITDA increased 9%, compared to the prior year.
Digital Real Estate Services
Revenues in the quarter increased $51 million, or 50%, compared to the
prior year, primarily driven by the inclusion of the results of Move,
coupled with higher residential listing depth product penetration and
higher pricing at REA Group Limited (“REA Group”). Segment EBITDA in the
quarter increased $2 million, or 4%, compared to the prior year
primarily due to the increased revenues noted above, partially offset by
$16 million of one-time transaction costs related to the acquisition of
Move. Excluding the contributions from Move, divestitures and foreign
currency fluctuations, Adjusted revenues and Adjusted Segment EBITDA
increased 26% and 38%, respectively, compared to the prior year. In the
second quarter, based on Move’s internal data, average monthly unique
users of realtor.com®’s web and mobile sites grew 26%
year-over-year to over 28 million, which was driven by more than 60%
growth in mobile users; traffic accelerated in January to 37 million
monthly unique users, or 33% growth year-over-year.
Digital Education
Revenues in the quarter were $22 million, which were flat compared with
the prior year, as higher subscription revenues at Amplify Insight and
higher revenues at Amplify Access were offset by lower Amplify Insight
consulting revenues and lower revenues at Amplify Learning, related to
the early grade print and hybrid learning products. Segment EBITDA in
the quarter improved $20 million, or 45%, from the prior year, primarily
due to the impact of the capitalization of Amplify Learning’s software
development costs of $14 million and lower expenses.
Other
Segment EBITDA in the quarter improved by $8 million compared to the
prior year, primarily due to lower fees and costs, net of
indemnification, related to the claims and investigations arising out of
certain conduct at The News of the World (the “U.K. Newspaper
Matters”) of approximately $6 million.
The net expense related to the U.K. Newspaper Matters was $13 million
for the three months ended December 31, 2014 as compared to $19 million
for the three months ended December 31, 2013.
REVIEW OF EQUITY EARNINGS OF AFFILIATES’ RESULTS
Quarterly equity earnings from affiliates were $16 million compared to
$17 million in the prior year.
|
|
|
For the three months ended
|
|
For the six months ended
|
|
|
|
December 31,
|
|
December 31,
|
|
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
|
|
(in millions)
|
|
(in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foxtel(a)
|
|
$
|
15
|
|
|
$
|
17
|
|
|
$
|
40
|
|
|
$
|
30
|
|
|
Other equity affiliates, net
|
|
|
1
|
|
|
|
-
|
|
|
|
1
|
|
|
|
-
|
|
|
Total equity earnings of affiliates
|
|
$
|
16
|
|
|
$
|
17
|
|
|
$
|
41
|
|
|
$
|
30
|
|
|
(a)
|
|
The Company amortized $14 million and $30 million related to excess
cost over the Company’s proportionate share of its investment’s
underlying net assets allocated to finite-lived intangible assets
during the three and six months ended December 31, 2014,
respectively, and $15 million and $31 million in the corresponding
periods of fiscal 2014, respectively. Such amortization is reflected
in Equity earnings of affiliates in the Statements of Operations.
|
|
|
On a U.S. GAAP basis, Foxtel revenues, for the three months ended
December 31, 2014, decreased $59 million to $680 million from $739
million in the prior year period due to adverse foreign currency
fluctuations. Foxtel EBITDA decreased $12 million to $198 million from
$210 million due to adverse foreign currency fluctuations. In local
currency, Foxtel revenues were flat and EBITDA grew 2%. Total closing
subscribers were approximately 2.7 million as of December 31, 2014, a 5%
increase compared to the prior year period, as a result of higher
subscriber sales, partially driven by the new pricing and packaging
strategy that was implemented in November 2014, and lower churn. In the
quarter, cable and satellite churn improved to 11.8% from 12.8% in the
prior year.
Foxtel operating income for the three months ended December 31, 2014 and
2013 after depreciation and amortization of $80 million and $85 million,
respectively, was $118 million and $125 million, respectively. Operating
income decreased as a result of adverse foreign currency fluctuations.
Foxtel’s net income of $59 million decreased from $64 million in the
prior year period as a result of adverse foreign currency fluctuations,
partially offset by improved operating performance and lower tax expense.
FREE CASH FLOW AVAILABLE TO NEWS CORPORATION
Free cash flow available to News Corporation is a non-GAAP financial
measure defined as net cash provided by operating activities, less
capital expenditures, and REA Group free cash flow, plus cash dividends
received from REA Group.
The Company considers free cash flow available to News Corporation to
provide useful information to management and investors about the amount
of cash generated by the business after capital expenditures, which can
then be used for strategic opportunities including, among others,
investing in the Company’s business, strategic acquisitions,
strengthening the Company’s balance sheet, dividend payouts and
repurchasing stock. A limitation of free cash flow available to News
Corporation is that it does not represent the total increase or decrease
in the cash balance for the period. Management compensates for the
limitation of free cash flow available to News Corporation by also
relying on the net change in cash and cash equivalents as presented in
the Company’s consolidated statements of cash flows prepared in
accordance with GAAP which incorporates all cash movements during the
period.
The following table presents a reconciliation of net cash provided by
operating activities to free cash flow available to News Corporation:
|
|
|
For the six months ended
|
|
|
|
December 31,
|
|
|
|
2014
|
|
2013
|
|
|
|
(in millions)
|
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities
|
|
$
|
492
|
|
|
$
|
407
|
|
|
Less: Capital expenditures
|
|
|
(183
|
)
|
|
|
(147
|
)
|
|
|
|
|
309
|
|
|
|
260
|
|
|
Less: REA Group free cash flow
|
|
|
(60
|
)
|
|
|
(62
|
)
|
|
Plus: Cash dividends received from REA Group
|
|
|
26
|
|
|
|
19
|
|
|
Free cash flow available to News Corporation
|
|
$
|
275
|
|
|
$
|
217
|
|
|
|
Free cash flow available to News Corporation in the six months ended
December 31, 2014 improved by $58 million to $275 million from $217
million in the prior year. The increase was primarily due to the overall
improvement in Total Segment EBITDA and improved working capital of a
combined $86 million, lower restructuring payments of $61 million, lower
payments for fees and costs related to the U.K. Newspaper Matters of $24
million, coupled with increased dividends received from cost method
investments of $21 million. The increases were partially offset by the
absence of net receipts related to the foreign tax refund of $81 million
received during the six months ended December 31, 2013 and higher tax
payments of $26 million in the second quarter of fiscal 2015, coupled
with an increase in capital expenditures, which included $41 million
related to the relocation of the Company’s operations in London and $29
million related to Amplify’s curriculum products.
COMPARISON OF ADJUSTED INFORMATION TO U.S. GAAP INFORMATION
Adjusted revenues, Adjusted Total Segment EBITDA, Total Segment EBITDA,
Adjusted net income available to News Corporation stockholders, Adjusted
EPS and Free cash flow available to News Corporation are non-GAAP
financial measures contained in this earnings release. This information
is provided in order to allow investors to make meaningful comparisons
of the Company’s operating performance between periods and to view the
Company’s business from the same perspective as Company management.
These non-GAAP measures may be different than similar measures used by
other companies and should be considered in addition to, not as a
substitute for, measures of financial performance calculated in
accordance with GAAP. Reconciliations for the differences between
non-GAAP measures used in this earnings release and comparable financial
measures calculated in accordance with U.S. GAAP are included in Notes
1, 2 and 3 and the reconciliation of Net cash provided by operating
activities to Free cash flow available to News Corporation is included
above.
Conference call
News Corporation’s earnings conference call can be heard live at 4:30pm
EST on February 5, 2015. To listen to the call, please visit http://investors.newscorp.com.
Cautionary Statement Concerning Forward-Looking Statements
This document contains certain “forward-looking statements” within
the meaning of the Private Securities Litigation Reform Act of 1995.
These statements are based on management’s views and assumptions
regarding future events and business performance as of the time the
statements are made. Actual results may differ materially from these
expectations due to changes in global economic, business, competitive
market and regulatory factors. More detailed information about these and
other factors that could affect future results is contained in our
filings with the Securities and Exchange Commission. The
“forward-looking statements” included in this document are made only as
of the date of this document and we do not have any obligation to
publicly update any “forward-looking statements” to reflect subsequent
events or circumstances, except as required by law.
About News Corporation
News Corporation (NASDAQ:NWS)(NASDAQ:NWSA)(ASX:NWS)(ASX:NWSLV) is a
global, diversified media and information services company focused on
creating and distributing authoritative and engaging content to
consumers throughout the world. The company comprises businesses across
a range of media, including: news and information services, book
publishing, cable network programming in Australia, digital real estate
services, digital education, and pay-TV distribution in
Australia. Headquartered in New York, the activities of News Corporation
are conducted primarily in the United States, Australia, and the United
Kingdom. More information is available at: www.newscorp.com.
|
NEWS CORPORATION
|
|
CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
(Unaudited; in millions, except share and per share amounts)
|
|
|
|
|
|
For the three months ended
|
|
For the six months ended
|
|
|
|
December 31,
|
|
December 31,
|
|
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Advertising
|
|
$
|
1,038
|
|
|
$
|
1,080
|
|
|
$
|
1,958
|
|
|
$
|
2,038
|
|
|
Circulation and Subscription
|
|
|
656
|
|
|
|
661
|
|
|
|
1,339
|
|
|
|
1,340
|
|
|
Consumer
|
|
|
448
|
|
|
|
377
|
|
|
|
838
|
|
|
|
688
|
|
|
Other
|
|
|
138
|
|
|
|
120
|
|
|
|
295
|
|
|
|
244
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Revenues
|
|
|
2,280
|
|
|
|
2,238
|
|
|
|
4,430
|
|
|
|
4,310
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
|
(1,266
|
)
|
|
|
(1,274
|
)
|
|
|
(2,580
|
)
|
|
|
(2,569
|
)
|
|
Selling, general and administrative
|
|
|
(686
|
)
|
|
|
(637
|
)
|
|
|
(1,352
|
)
|
|
|
(1,273
|
)
|
|
Depreciation and amortization
|
|
|
(135
|
)
|
|
|
(138
|
)
|
|
|
(266
|
)
|
|
|
(279
|
)
|
|
Impairment and restructuring charges
|
|
|
(17
|
)
|
|
|
(36
|
)
|
|
|
(21
|
)
|
|
|
(63
|
)
|
|
Equity earnings of affiliates
|
|
|
16
|
|
|
|
17
|
|
|
|
41
|
|
|
|
30
|
|
|
Interest, net
|
|
|
13
|
|
|
|
16
|
|
|
|
30
|
|
|
|
33
|
|
|
Other, net
|
|
|
10
|
|
|
|
(231
|
)
|
|
|
58
|
|
|
|
(672
|
)
|
|
Income (loss) before income tax (expense) benefit
|
|
|
215
|
|
|
|
(45
|
)
|
|
|
340
|
|
|
|
(483
|
)
|
|
Income tax (expense) benefit
|
|
|
(52
|
)
|
|
|
211
|
|
|
|
(89
|
)
|
|
|
687
|
|
|
Net income
|
|
|
163
|
|
|
|
166
|
|
|
|
251
|
|
|
|
204
|
|
|
Less: Net income attributable to noncontrolling interests
|
|
|
(20
|
)
|
|
|
(15
|
)
|
|
|
(43
|
)
|
|
|
(26
|
)
|
|
Net income attributable to News Corporation stockholders
|
|
$
|
143
|
|
|
$
|
151
|
|
|
$
|
208
|
|
|
$
|
178
|
|
|
Less: Adjustments to Net income attributable to News Corporation
stockholders – Redeemable Preferred Stock Dividends
|
|
|
(1
|
)
|
|
|
(1
|
)
|
|
|
(1
|
)
|
|
|
(1
|
)
|
|
Net income available to News Corporation stockholders
|
|
$
|
142
|
|
|
$
|
150
|
|
|
$
|
207
|
|
|
$
|
177
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
580
|
|
|
|
579
|
|
|
|
580
|
|
|
|
579
|
|
|
Diluted
|
|
|
583
|
|
|
|
580
|
|
|
|
581
|
|
|
|
580
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income available to News Corporation stockholders per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted
|
|
$
|
0.24
|
|
|
$
|
0.26
|
|
|
$
|
0.36
|
|
|
$
|
0.31
|
|
|
|
|
NEWS CORPORATION
|
|
CONSOLIDATED BALANCE SHEETS
|
|
(in millions)
|
|
|
|
|
|
As of December 31,
|
|
As of June 30,
|
|
|
|
2014
|
|
2014
|
|
ASSETS
|
|
(unaudited)
|
|
(audited)
|
|
Current assets:
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
1,918
|
|
|
$
|
3,145
|
|
|
Amounts due from 21st Century Fox
|
|
|
55
|
|
|
|
66
|
|
|
Receivables, net
|
|
|
1,450
|
|
|
|
1,388
|
|
|
Other current assets
|
|
|
629
|
|
|
|
671
|
|
|
Total current assets
|
|
|
4,052
|
|
|
|
5,270
|
|
|
|
|
|
|
|
|
|
|
Non-current assets:
|
|
|
|
|
|
|
|
Investments
|
|
|
2,466
|
|
|
|
2,609
|
|
|
Property, plant and equipment, net
|
|
|
2,809
|
|
|
|
3,009
|
|
|
Intangible assets, net
|
|
|
2,379
|
|
|
|
2,137
|
|
|
Goodwill
|
|
|
3,547
|
|
|
|
2,782
|
|
|
Other non-current assets
|
|
|
717
|
|
|
|
682
|
|
|
Total assets
|
|
$
|
15,970
|
|
|
$
|
16,489
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
320
|
|
|
$
|
276
|
|
|
Accrued expenses
|
|
|
1,136
|
|
|
|
1,188
|
|
|
Deferred revenue
|
|
|
412
|
|
|
|
369
|
|
|
Other current liabilities
|
|
|
461
|
|
|
|
431
|
|
|
Total current liabilities
|
|
|
2,329
|
|
|
|
2,264
|
|
|
|
|
|
|
|
|
|
|
Non-current liabilities:
|
|
|
|
|
|
|
|
Retirement benefit obligations
|
|
|
273
|
|
|
|
272
|
|
|
Deferred income taxes
|
|
|
274
|
|
|
|
224
|
|
|
Other non-current liabilities
|
|
|
307
|
|
|
|
310
|
|
|
|
|
|
|
|
|
|
|
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Redeemable preferred stock
|
|
|
20
|
|
|
|
20
|
|
|
|
|
|
|
|
|
|
|
Equity:
|
|
|
|
|
|
|
|
Class A common stock
|
|
|
4
|
|
|
|
4
|
|
|
Class B common stock
|
|
|
2
|
|
|
|
2
|
|
|
Additional paid-in capital
|
|
|
12,421
|
|
|
|
12,390
|
|
|
Retained earnings
|
|
|
444
|
|
|
|
237
|
|
|
Accumulated other comprehensive income
|
|
|
(261
|
)
|
|
|
610
|
|
|
Total News Corporation stockholders' equity
|
|
|
12,610
|
|
|
|
13,243
|
|
|
Noncontrolling interests
|
|
|
157
|
|
|
|
156
|
|
|
Total equity
|
|
|
12,767
|
|
|
|
13,399
|
|
|
Total liabilities and equity
|
|
$
|
15,970
|
|
|
$
|
16,489
|
|
|
|
|
NEWS CORPORATION
|
|
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
(Unaudited; in millions)
|
|
|
|
|
|
For the six months ended
|
|
|
|
December 31,
|
|
|
|
2014
|
|
2013
|
|
|
|
|
|
|
|
Operating activities:
|
|
|
|
|
|
|
|
Net Income
|
|
$
|
251
|
|
|
$
|
204
|
|
|
|
|
|
|
|
|
|
|
Adjustments to reconcile net income to cash provided by operating
activities:
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
266
|
|
|
|
279
|
|
|
Equity earnings of affiliates
|
|
|
(41
|
)
|
|
|
(30
|
)
|
|
Cash distributions received from affiliates
|
|
|
68
|
|
|
|
47
|
|
|
Foreign tax refund payable to 21st Century Fox
|
|
|
-
|
|
|
|
148
|
|
|
Foreign tax refund receivable, net of applicable taxes
|
|
|
-
|
|
|
|
(140
|
)
|
|
Impairment charges, net of tax
|
|
|
-
|
|
|
|
12
|
|
|
Other, net
|
|
|
(58
|
)
|
|
|
(49
|
)
|
|
Deferred income taxes and taxes payable
|
|
|
42
|
|
|
|
85
|
|
|
Change in operating assets and liabilities, net of acquisitions:
|
|
|
|
|
|
|
|
Receivables and other assets
|
|
|
(64
|
)
|
|
|
(244
|
)
|
|
Inventories, net
|
|
|
66
|
|
|
|
51
|
|
|
Accounts payable and other liabilities
|
|
|
(26
|
)
|
|
|
65
|
|
|
Pension and postretirement benefit plans
|
|
|
(12
|
)
|
|
|
(21
|
)
|
|
Net cash provided by operating activities
|
|
|
492
|
|
|
|
407
|
|
|
|
|
|
|
|
|
|
|
Investing activities:
|
|
|
|
|
|
|
|
Capital expenditures
|
|
|
(183
|
)
|
|
|
(147
|
)
|
|
Acquisitions, net of cash acquired
|
|
|
(1,183
|
)
|
|
|
(26
|
)
|
|
Investments in equity affiliates and other
|
|
|
(246
|
)
|
|
|
(2
|
)
|
|
Proceeds from dispositions
|
|
|
114
|
|
|
|
100
|
|
|
Net cash used in investing activities
|
|
|
(1,498
|
)
|
|
|
(75
|
)
|
|
|
|
|
|
|
|
|
|
Financing activities:
|
|
|
|
|
|
|
|
Net transfers from 21st Century Fox and affiliates
|
|
|
-
|
|
|
|
217
|
|
|
Repayment of borrowings acquired in the Move acquisition
|
|
|
(129
|
)
|
|
|
-
|
|
|
Dividends paid
|
|
|
(17
|
)
|
|
|
(13
|
)
|
|
Other, net
|
|
|
(10
|
)
|
|
|
-
|
|
|
Net cash (used in) provided by financing activities
|
|
|
(156
|
)
|
|
|
204
|
|
|
|
|
|
|
|
|
|
|
Net (decrease) increase in cash and cash equivalents
|
|
|
(1,162
|
)
|
|
|
536
|
|
|
Cash and cash equivalents, beginning of period
|
|
|
3,145
|
|
|
|
2,381
|
|
|
Exchange movement on opening cash balance
|
|
|
(65
|
)
|
|
|
(9
|
)
|
|
Cash and cash equivalents, end of period
|
|
$
|
1,918
|
|
|
$
|
2,908
|
|
|
|
NOTE 1 – ADJUSTED REVENUES, ADJUSTED TOTAL SEGMENT EBITDA AND
ADJUSTED SEGMENT EBITDA
The Company uses revenues, Total Segment EBITDA and Segment EBITDA
excluding the impact of acquisitions, divestitures, costs associated
with the U.K. Newspaper Matters and foreign currency fluctuations
(“Adjusted Revenues, Adjusted Total Segment EBITDA and Adjusted Segment
EBITDA”) to evaluate the performance of the Company’s operations
exclusive of certain items that impact the comparability of results from
period to period. The calculation of Adjusted Revenues, Adjusted Total
Segment EBITDA and Adjusted Segment EBITDA may not be comparable to
similarly titled measures reported by other companies, since companies
and investors may differ as to what type of events warrant adjustment.
Adjusted Revenues, Adjusted Total Segment EBITDA and Adjusted Segment
EBITDA are not measures of performance under generally accepted
accounting principles and should not be construed as substitutes for
amounts determined under GAAP as measures of performance.
However, management uses these measures in comparing the Company’s
historical performance and believes that they provide meaningful and
comparable information to investors to assist in their analysis of our
performance relative to prior periods and our competitors.
The following table reconciles reported revenues and reported Total
Segment EBITDA to Adjusted Revenues and Adjusted Total Segment EBITDA
for the three and six months ended December 31, 2014 and 2013.
|
|
|
Revenues
|
|
|
Total Segment EBITDA
|
|
|
|
For the three months ended December 31,
|
|
|
For the three months ended December 31,
|
|
|
|
2014
|
|
2013
|
|
Difference
|
|
|
2014
|
|
2013
|
|
Difference
|
|
|
|
(in millions)
|
|
|
(in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As reported
|
|
$
|
2,280
|
|
|
$
|
2,238
|
|
|
$
|
42
|
|
|
|
$
|
328
|
|
|
$
|
327
|
|
|
$
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impact of acquisitions
|
|
|
(122
|
)
|
|
|
-
|
|
|
|
(122
|
)
|
|
|
|
4
|
|
|
|
-
|
|
|
|
4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impact of divestitures
|
|
|
(1
|
)
|
|
|
(5
|
)
|
|
|
4
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impact of foreign currency fluctuations
|
|
|
72
|
|
|
|
-
|
|
|
|
72
|
|
|
|
|
16
|
|
|
|
-
|
|
|
|
16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net impact of U.K. Newspaper Matters
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
13
|
|
|
|
19
|
|
|
|
(6
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As adjusted
|
|
$
|
2,229
|
|
|
$
|
2,233
|
|
|
$
|
(4
|
)
|
|
|
$
|
361
|
|
|
$
|
346
|
|
|
$
|
15
|
|
|
|
|
|
|
|
|
Revenues
|
|
|
Total Segment EBITDA
|
|
|
|
For the six months ended December 31,
|
|
|
For the six months ended December 31,
|
|
|
|
2014
|
|
|
2013
|
|
|
Difference
|
|
|
2014
|
|
|
2013
|
|
|
Difference
|
|
|
|
(in millions)
|
|
|
(in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As reported
|
|
$
|
4,430
|
|
|
$
|
4,310
|
|
|
$
|
120
|
|
|
|
$
|
498
|
|
|
$
|
468
|
|
|
$
|
30
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impact of acquisitions
|
|
|
(182
|
)
|
|
|
-
|
|
|
|
(182
|
)
|
|
|
|
5
|
|
|
|
-
|
|
|
|
5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impact of divestitures
|
|
|
(1
|
)
|
|
|
(42
|
)
|
|
|
41
|
|
|
|
|
-
|
|
|
|
(4
|
)
|
|
|
4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impact of foreign currency fluctuations
|
|
|
32
|
|
|
|
-
|
|
|
|
32
|
|
|
|
|
13
|
|
|
|
-
|
|
|
|
13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net impact of U.K. Newspaper Matters
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
27
|
|
|
|
36
|
|
|
|
(9
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As adjusted
|
|
$
|
4,279
|
|
|
$
|
4,268
|
|
|
$
|
11
|
|
|
|
$
|
543
|
|
|
$
|
500
|
|
|
$
|
43
|
|
|
|
Adjusted Revenues and Adjusted Segment EBITDA by segment for the three
and six months ended December 31, 2014 and 2013 are as follows:
|
|
|
For the three months ended December 31,
|
|
|
|
2014
|
|
2013
|
|
% Change
|
|
|
|
(in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Revenues:
|
|
|
|
|
|
|
|
|
|
|
News and Information Services
|
|
$
|
1,564
|
|
|
$
|
1,608
|
|
|
(3
|
)
|
%
|
|
Book Publishing
|
|
|
392
|
|
|
|
391
|
|
|
-
|
|
%
|
|
Cable Network Programming
|
|
|
122
|
|
|
|
110
|
|
|
11
|
|
%
|
|
Digital Real Estate Services
|
|
|
129
|
|
|
|
102
|
|
|
26
|
|
%
|
|
Digital Education
|
|
|
22
|
|
|
|
22
|
|
|
-
|
|
%
|
|
Other
|
|
|
-
|
|
|
|
-
|
|
|
-
|
|
%
|
|
Total Adjusted Revenues
|
|
$
|
2,229
|
|
|
$
|
2,233
|
|
|
-
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Segment EBITDA:
|
|
|
|
|
|
|
|
|
|
|
News and Information Services
|
|
$
|
225
|
|
|
$
|
255
|
|
|
(12
|
)
|
%
|
|
Book Publishing
|
|
|
65
|
|
|
|
68
|
|
|
(4
|
)
|
%
|
|
Cable Network Programming
|
|
|
58
|
|
|
|
53
|
|
|
9
|
|
%
|
|
Digital Real Estate Services
|
|
|
76
|
|
|
|
55
|
|
|
38
|
|
%
|
|
Digital Education
|
|
|
(24
|
)
|
|
|
(44
|
)
|
|
45
|
|
%
|
|
Other
|
|
|
(39
|
)
|
|
|
(41
|
)
|
|
5
|
|
%
|
|
Total Adjusted Segment EBITDA
|
|
$
|
361
|
|
|
$
|
346
|
|
|
4
|
|
%
|
|
|
|
|
|
|
|
For the six months ended December 31,
|
|
|
|
2014
|
|
2013
|
|
% Change
|
|
|
|
(in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Revenues:
|
|
|
|
|
|
|
|
|
|
|
News and Information Services
|
|
$
|
2,981
|
|
|
$
|
3,070
|
|
|
(3
|
)
|
%
|
|
Book Publishing
|
|
|
735
|
|
|
|
715
|
|
|
3
|
|
%
|
|
Cable Network Programming
|
|
|
259
|
|
|
|
242
|
|
|
7
|
|
%
|
|
Digital Real Estate Services
|
|
|
240
|
|
|
|
192
|
|
|
25
|
|
%
|
|
Digital Education
|
|
|
64
|
|
|
|
49
|
|
|
31
|
|
%
|
|
Other
|
|
|
-
|
|
|
|
-
|
|
|
-
|
|
%
|
|
Total Adjusted Revenues
|
|
$
|
4,279
|
|
|
$
|
4,268
|
|
|
-
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Segment EBITDA:
|
|
|
|
|
|
|
|
|
|
|
News and Information Services
|
|
$
|
329
|
|
|
$
|
384
|
|
|
(14
|
)
|
%
|
|
Book Publishing
|
|
|
118
|
|
|
|
111
|
|
|
6
|
|
%
|
|
Cable Network Programming
|
|
|
90
|
|
|
|
82
|
|
|
10
|
|
%
|
|
Digital Real Estate Services
|
|
|
134
|
|
|
|
99
|
|
|
35
|
|
%
|
|
Digital Education
|
|
|
(48
|
)
|
|
|
(95
|
)
|
|
49
|
|
%
|
|
Other
|
|
|
(80
|
)
|
|
|
(81
|
)
|
|
1
|
|
%
|
|
Total Adjusted Segment EBITDA
|
|
$
|
543
|
|
|
$
|
500
|
|
|
9
|
|
%
|
|
|
The following tables reconcile reported revenues and Segment EBITDA by
segment to Adjusted Revenues and Adjusted Segment EBITDA by segment for
the three months ended December 31, 2014 and 2013.
|
|
|
For the three months ended December 31, 2014
|
|
|
|
|
|
|
|
|
|
Impact of
|
|
Net Impact
|
|
|
|
|
|
|
|
|
|
|
|
Foreign
|
|
of U.K.
|
|
|
|
|
|
As
|
|
Impact of
|
|
Impact of
|
|
Currency
|
|
Newspaper
|
|
As
|
|
|
|
Reported
|
|
Acquisitions
|
|
Divestitures
|
|
Fluctuations
|
|
Matters
|
|
Adjusted
|
|
|
|
(in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
News and Information Services
|
|
$
|
1,523
|
|
|
$
|
(6
|
)
|
|
$
|
-
|
|
|
$
|
47
|
|
|
$
|
-
|
|
|
$
|
1,564
|
|
|
Book Publishing
|
|
|
469
|
|
|
|
(82
|
)
|
|
|
-
|
|
|
|
5
|
|
|
|
-
|
|
|
|
392
|
|
|
Cable Network Programming
|
|
|
112
|
|
|
|
-
|
|
|
|
-
|
|
|
|
10
|
|
|
|
-
|
|
|
|
122
|
|
|
Digital Real Estate Services
|
|
|
154
|
|
|
|
(34
|
)
|
|
|
(1
|
)
|
|
|
10
|
|
|
|
-
|
|
|
|
129
|
|
|
Digital Education
|
|
|
22
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
22
|
|
|
Other
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Total Revenues
|
|
$
|
2,280
|
|
|
$
|
(122
|
)
|
|
$
|
(1
|
)
|
|
$
|
72
|
|
|
$
|
-
|
|
|
$
|
2,229
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment EBITDA:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
News and Information Services
|
|
$
|
216
|
|
|
$
|
3
|
|
|
$
|
-
|
|
|
$
|
6
|
|
|
$
|
-
|
|
|
$
|
225
|
|
|
Book Publishing
|
|
|
77
|
|
|
|
(12
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
65
|
|
|
Cable Network Programming
|
|
|
54
|
|
|
|
-
|
|
|
|
-
|
|
|
|
4
|
|
|
|
-
|
|
|
|
58
|
|
|
Digital Real Estate Services
|
|
|
57
|
|
|
|
13
|
|
|
|
-
|
|
|
|
6
|
|
|
|
-
|
|
|
|
76
|
|
|
Digital Education
|
|
|
(24
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(24
|
)
|
|
Other
|
|
|
(52
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
13
|
|
|
|
(39
|
)
|
|
Total Segment EBITDA
|
|
$
|
328
|
|
|
$
|
4
|
|
|
$
|
-
|
|
|
$
|
16
|
|
|
$
|
13
|
|
|
$
|
361
|
|
|
|
|
|
|
|
|
For the three months ended December 31, 2013
|
|
|
|
|
|
|
|
|
|
Impact of
|
|
Net Impact
|
|
|
|
|
|
|
|
|
|
|
|
Foreign
|
|
of U.K.
|
|
|
|
|
|
As
|
|
Impact of
|
|
Impact of
|
|
Currency
|
|
Newspaper
|
|
As
|
|
|
|
Reported
|
|
Acquisitions
|
|
Divestitures
|
|
Fluctuations
|
|
Matters
|
|
Adjusted
|
|
|
|
(in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
News and Information Services
|
|
$
|
1,612
|
|
|
$
|
-
|
|
|
$
|
(4
|
)
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
1,608
|
|
|
Book Publishing
|
|
|
391
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
391
|
|
|
Cable Network Programming
|
|
|
110
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
110
|
|
|
Digital Real Estate Services
|
|
|
103
|
|
|
|
-
|
|
|
|
(1
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
102
|
|
|
Digital Education
|
|
|
22
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
22
|
|
|
Other
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Total Revenues
|
|
$
|
2,238
|
|
|
$
|
-
|
|
|
$
|
(5
|
)
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
2,233
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment EBITDA:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
News and Information Services
|
|
$
|
255
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
255
|
|
|
Book Publishing
|
|
|
68
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
68
|
|
|
Cable Network Programming
|
|
|
53
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
53
|
|
|
Digital Real Estate Services
|
|
|
55
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
55
|
|
|
Digital Education
|
|
|
(44
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(44
|
)
|
|
Other
|
|
|
(60
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
19
|
|
|
|
(41
|
)
|
|
Total Segment EBITDA
|
|
$
|
327
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
19
|
|
|
$
|
346
|
|
|
|
The following tables reconcile reported revenues and Segment EBITDA by
segment to Adjusted Revenues and Adjusted Segment EBITDA by segment for
the six months ended December 31, 2014 and 2013.
|
|
|
For the six months ended December 31, 2014
|
|
|
|
|
|
|
|
|
|
Impact of
|
|
Net Impact
|
|
|
|
|
|
|
|
|
|
|
|
Foreign
|
|
of U.K.
|
|
|
|
|
|
As
|
|
Impact of
|
|
Impact of
|
|
Currency
|
|
Newspaper
|
|
As
|
|
|
|
Reported
|
|
Acquisitions
|
|
Divestitures
|
|
Fluctuations
|
|
Matters
|
|
Adjusted
|
|
|
|
(in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
News and Information Services
|
|
$
|
2,974
|
|
|
$
|
(8
|
)
|
|
$
|
-
|
|
|
$
|
15
|
|
|
$
|
-
|
|
|
$
|
2,981
|
|
|
Book Publishing
|
|
|
875
|
|
|
|
(140
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
735
|
|
|
Cable Network Programming
|
|
|
251
|
|
|
|
-
|
|
|
|
-
|
|
|
|
8
|
|
|
|
-
|
|
|
|
259
|
|
|
Digital Real Estate Services
|
|
|
266
|
|
|
|
(34
|
)
|
|
|
(1
|
)
|
|
|
9
|
|
|
|
-
|
|
|
|
240
|
|
|
Digital Education
|
|
|
64
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
64
|
|
|
Other
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Total Revenues
|
|
$
|
4,430
|
|
|
$
|
(182
|
)
|
|
$
|
(1
|
)
|
|
$
|
32
|
|
|
$
|
-
|
|
|
$
|
4,279
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment EBITDA:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
News and Information Services
|
|
$
|
321
|
|
|
$
|
4
|
|
|
$
|
-
|
|
|
$
|
4
|
|
|
$
|
-
|
|
|
$
|
329
|
|
|
Book Publishing
|
|
|
132
|
|
|
|
(14
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
118
|
|
|
Cable Network Programming
|
|
|
86
|
|
|
|
-
|
|
|
|
-
|
|
|
|
4
|
|
|
|
-
|
|
|
|
90
|
|
|
Digital Real Estate Services
|
|
|
114
|
|
|
|
15
|
|
|
|
-
|
|
|
|
5
|
|
|
|
-
|
|
|
|
134
|
|
|
Digital Education
|
|
|
(48
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(48
|
)
|
|
Other
|
|
|
(107
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
27
|
|
|
|
(80
|
)
|
|
Total Segment EBITDA
|
|
$
|
498
|
|
|
$
|
5
|
|
|
$
|
-
|
|
|
$
|
13
|
|
|
$
|
27
|
|
|
$
|
543
|
|
|
|
|
|
|
|
|
For the six months ended December 31, 2013
|
|
|
|
|
|
|
|
|
|
Impact of
|
|
Net Impact
|
|
|
|
|
|
|
|
|
|
|
|
Foreign
|
|
of U.K.
|
|
|
|
|
|
As
|
|
Impact of
|
|
Impact of
|
|
Currency
|
|
Newspaper
|
|
As
|
|
|
|
Reported
|
|
Acquisitions
|
|
Divestitures
|
|
Fluctuations
|
|
Matters
|
|
Adjusted
|
|
|
|
(in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
News and Information Services
|
|
$
|
3,107
|
|
|
$
|
-
|
|
|
$
|
(37
|
)
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
3,070
|
|
|
Book Publishing
|
|
|
719
|
|
|
|
-
|
|
|
|
(4
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
715
|
|
|
Cable Network Programming
|
|
|
242
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
242
|
|
|
Digital Real Estate Services
|
|
|
193
|
|
|
|
-
|
|
|
|
(1
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
192
|
|
|
Digital Education
|
|
|
49
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
49
|
|
|
Other
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Total Revenues
|
|
$
|
4,310
|
|
|
$
|
-
|
|
|
$
|
(42
|
)
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
4,268
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment EBITDA:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
News and Information Services
|
|
$
|
388
|
|
|
$
|
-
|
|
|
$
|
(4
|
)
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
384
|
|
|
Book Publishing
|
|
|
111
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
111
|
|
|
Cable Network Programming
|
|
|
82
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
82
|
|
|
Digital Real Estate Services
|
|
|
99
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
99
|
|
|
Digital Education
|
|
|
(95
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(95
|
)
|
|
Other
|
|
|
(117
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
36
|
|
|
|
(81
|
)
|
|
Total Segment EBITDA
|
|
$
|
468
|
|
|
$
|
-
|
|
|
$
|
(4
|
)
|
|
$
|
-
|
|
|
$
|
36
|
|
|
$
|
500
|
|
|
|
NOTE 2 – TOTAL SEGMENT EBITDA
Segment EBITDA is defined as revenues less operating expenses and
selling, general and administrative expenses. Segment EBITDA does not
include: Depreciation and amortization, impairment and restructuring
charges, equity earnings of affiliates, interest, net, other, net,
income tax (expense) benefit and net income attributable to
noncontrolling interests. Management believes that Segment EBITDA is an
appropriate measure for evaluating the operating performance of the
Company’s business segments because it is the primary measure used by
the Company’s chief operating decision maker to evaluate the performance
of and allocate resources within the Company’s businesses. Segment
EBITDA provides management, investors and equity analysts with a measure
to analyze operating performance of each of the Company’s business
segments and its enterprise value against historical data and
competitors’ data, although historical results may not be indicative of
future results (as operating performance is highly contingent on many
factors, including customer tastes and preferences).
Total Segment EBITDA is a non-GAAP 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 and restructuring charges, which are significant
components in assessing the Company’s financial performance. The
following table reconciles Total Segment EBITDA to net income.
|
|
|
For the three months ended December 31,
|
|
|
|
2014
|
|
2013
|
|
Change
|
|
% Change
|
|
|
|
(in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
2,280
|
|
|
$
|
2,238
|
|
|
$
|
42
|
|
|
2
|
|
%
|
|
Operating expenses
|
|
|
(1,266
|
)
|
|
|
(1,274
|
)
|
|
|
8
|
|
|
1
|
|
%
|
|
Selling, general and administrative
|
|
|
(686
|
)
|
|
|
(637
|
)
|
|
|
(49
|
)
|
|
(8
|
)
|
%
|
|
Total Segment EBITDA
|
|
|
328
|
|
|
|
327
|
|
|
|
1
|
|
|
-
|
|
%
|
|
Depreciation and amortization
|
|
|
(135
|
)
|
|
|
(138
|
)
|
|
|
3
|
|
|
2
|
|
%
|
|
Impairment and restructuring charges
|
|
|
(17
|
)
|
|
|
(36
|
)
|
|
|
19
|
|
|
53
|
|
%
|
|
Equity earnings of affiliates
|
|
|
16
|
|
|
|
17
|
|
|
|
(1
|
)
|
|
(6
|
)
|
%
|
|
Interest, net
|
|
|
13
|
|
|
|
16
|
|
|
|
(3
|
)
|
|
(19
|
)
|
%
|
|
Other, net
|
|
|
10
|
|
|
|
(231
|
)
|
|
|
241
|
|
|
**
|
|
|
|
Income (loss) before income tax (expense) benefit
|
|
|
215
|
|
|
|
(45
|
)
|
|
|
260
|
|
|
**
|
|
|
|
Income tax (expense) benefit
|
|
|
(52
|
)
|
|
|
211
|
|
|
|
(263
|
)
|
|
**
|
|
|
|
Net income
|
|
$
|
163
|
|
|
$
|
166
|
|
|
$
|
(3
|
)
|
|
(2
|
)
|
%
|
|
|
|
|
** - Not meaningful
|
|
|
|
|
|
|
|
For the six months ended December 31,
|
|
|
|
2014
|
|
2013
|
|
Change
|
|
% Change
|
|
|
|
(in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
4,430
|
|
|
$
|
4,310
|
|
|
$
|
120
|
|
|
3
|
|
%
|
|
Operating expenses
|
|
|
(2,580
|
)
|
|
|
(2,569
|
)
|
|
|
(11
|
)
|
|
-
|
|
%
|
|
Selling, general and administrative
|
|
|
(1,352
|
)
|
|
|
(1,273
|
)
|
|
|
(79
|
)
|
|
(6
|
)
|
%
|
|
Total Segment EBITDA
|
|
|
498
|
|
|
|
468
|
|
|
|
30
|
|
|
6
|
|
%
|
|
Depreciation and amortization
|
|
|
(266
|
)
|
|
|
(279
|
)
|
|
|
13
|
|
|
5
|
|
%
|
|
Impairment and restructuring charges
|
|
|
(21
|
)
|
|
|
(63
|
)
|
|
|
42
|
|
|
67
|
|
%
|
|
Equity earnings of affiliates
|
|
|
41
|
|
|
|
30
|
|
|
|
11
|
|
|
37
|
|
%
|
|
Interest, net
|
|
|
30
|
|
|
|
33
|
|
|
|
(3
|
)
|
|
(9
|
)
|
%
|
|
Other, net
|
|
|
58
|
|
|
|
(672
|
)
|
|
|
730
|
|
|
**
|
|
|
|
Income (loss) before income tax (expense) benefit
|
|
|
340
|
|
|
|
(483
|
)
|
|
|
823
|
|
|
**
|
|
|
|
Income tax (expense) benefit
|
|
|
(89
|
)
|
|
|
687
|
|
|
|
(776
|
)
|
|
**
|
|
|
|
Net income
|
|
$
|
251
|
|
|
$
|
204
|
|
|
$
|
47
|
|
|
23
|
|
%
|
|
|
|
|
** - Not meaningful
|
|
|
|
|
NOTE 3 – ADJUSTED NET INCOME AVAILABLE TO NEWS CORPORATION
STOCKHOLDERS AND ADJUSTED EPS
The Company uses net income available to News Corporation stockholders
and diluted earnings per share (“EPS”) excluding expenses related to
U.K. Newspaper Matters, Impairment and restructuring charges, and
“Other, net”, net of tax (“adjusted net income available to News
Corporation stockholders and adjusted EPS”) to evaluate the performance
of the Company’s operations exclusive of certain items that impact the
comparability of results from period to period. The calculation of
adjusted net income available to News Corporation stockholders and
adjusted EPS may not be comparable to similarly titled measures reported
by other companies, since companies and investors may differ as to what
type of events warrant adjustment. Adjusted net income available to News
Corporation stockholders and adjusted EPS are not measures of
performance under generally accepted accounting principles and should
not be construed as substitutes for consolidated net income available to
News Corporation stockholders and net income per share as determined
under GAAP as a measure of performance.
However, management uses these measures in comparing the Company’s
historical performance and believes that they provide meaningful and
comparable information to investors to assist in their analysis of our
performance relative to prior periods and our competitors.
The following tables reconcile reported net income available to News
Corporation stockholders and reported diluted EPS to adjusted net income
available to News Corporation stockholders and adjusted EPS for the
three and six months ended December 31, 2014 and 2013.
|
|
|
For the three months ended
|
|
For the three months ended
|
|
|
|
December 31, 2014
|
|
December 31, 2013
|
|
|
|
Net income
|
|
|
|
Net income
|
|
|
|
|
|
available to
|
|
EPS
|
|
available to
|
|
EPS
|
|
|
|
stockholders
|
|
|
|
stockholders
|
|
|
|
|
|
(in millions, except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As reported
|
|
$
|
142
|
|
|
$
|
0.24
|
|
|
$
|
150
|
|
|
$
|
0.26
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.K. Newspaper Matters
|
|
|
13
|
|
|
|
0.02
|
|
|
|
19
|
|
|
|
0.03
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment and restructuring charges
|
|
|
17
|
|
|
|
0.03
|
|
|
|
36
|
|
|
|
0.06
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other, net (a)
|
|
|
(10
|
)
|
|
|
(0.02
|
)
|
|
|
231
|
|
|
|
0.40
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax impact on items above(b)
|
|
|
(11
|
)
|
|
|
(0.02
|
)
|
|
|
(257
|
)
|
|
|
(0.44
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impact of noncontrolling interest on items included in Other, net
above
|
|
|
3
|
|
|
|
0.01
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As adjusted
|
|
$
|
154
|
|
|
$
|
0.26
|
|
|
$
|
179
|
|
|
$
|
0.31
|
|
|
(a)
|
|
Other, net for the three months ended December 31, 2013 primarily
includes a foreign tax refund payable to 21st Century Fox.
|
|
(b)
|
|
Tax impact on items above for the three months ended December 31,
2013 primarily includes a foreign tax refund receivable of $238
million which has an offsetting payable to 21st Century Fox included
within Other, net above.
|
|
|
|
|
|
For the six months ended
|
|
For the six months ended
|
|
|
|
December 31, 2014
|
|
December 31, 2013
|
|
|
|
Net income
|
|
|
|
Net income
|
|
|
|
|
|
available to
|
|
EPS
|
|
available to
|
|
EPS
|
|
|
|
stockholders
|
|
|
|
stockholders
|
|
|
|
|
|
(in millions, except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As reported
|
|
$
|
207
|
|
|
$
|
0.36
|
|
|
$
|
177
|
|
|
$
|
0.31
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.K. Newspaper Matters
|
|
|
27
|
|
|
|
0.04
|
|
|
|
36
|
|
|
|
0.06
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment and restructuring charges
|
|
|
21
|
|
|
|
0.03
|
|
|
|
63
|
|
|
|
0.11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other, net (a)
|
|
|
(58
|
)
|
|
|
(0.10
|
)
|
|
|
672
|
|
|
|
1.16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax impact on items above(b)
|
|
|
(2
|
)
|
|
|
-
|
|
|
|
(752
|
)
|
|
|
(1.30
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impact of noncontrolling interest on items included in Other, net
above
|
|
|
11
|
|
|
|
0.02
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As adjusted
|
|
$
|
206
|
|
|
$
|
0.35
|
|
|
$
|
196
|
|
|
$
|
0.34
|
|
|
(a)
|
|
Other, net for the six months ended December 31, 2014 primarily
includes a gain on the sale of marketable securities and dividends
received from cost method investments. Other, net for the six months
ended December 31, 2013 primarily includes a foreign tax refund paid
or payable to 21st Century Fox, offset by a gain on a third party
pension contribution.
|
|
(b)
|
|
Tax impact on items above for the six months ended December 31, 2013
primarily includes a foreign tax refund of $721 million which has an
offsetting payable to 21st Century Fox included within Other, net
above.
|
Copyright Business Wire 2015