FISCAL 2015 FOURTH QUARTER KEY FINANCIAL
HIGHLIGHTS
-
Revenues of $2.14 billion compared to $2.19 billion in the prior
year
-
Reported Total Segment EBITDA of $191 million compared to $127
million in the prior year
-
Adjusted EPS were $0.07 compared to $0.01 in the prior year –
Reported EPS, which includes an impairment charge of $371 million,
were ($0.65) compared to $0.02 in the prior year
-
Company has initiated a strategic review of its Digital Education
segment
-
The Board of Directors has declared its first semi-annual cash
dividend of $0.10 per share
News Corporation (“News Corp” or the “Company”)
(NASDAQ:NWS)(NASDAQ:NWSA)(ASX:NWS)(ASX:NWSLV) today reported financial
results for the three months and fiscal year ended June 30, 2015.
Commenting on the results, Chief Executive Robert Thomson said:
“Thanks to solid performance across a number of our businesses,
including the fast-growing realtor.com®, we had
a strong fourth quarter finish to a good fiscal year. Despite an
uneven global economy, very tough currency headwinds and the ongoing
transformation of the media landscape, for fiscal 2015 we posted stable
revenues, robust EBITDA growth and healthy free cash flow.
“With disciplined internal investments, strategic acquisitions and
ongoing product innovation, we have aggressively shifted the company to
be more global and more digital. We have clearly emerged as an
international leader in digital real estate, opened up new territories
at HarperCollins, expanded digital subscriber penetration at our
mastheads and successfully integrated our programmatic exchange,
creating new digital and mobile advertising opportunities across News
Corp.
“We have begun to execute on a capital return program that signifies
our confidence in the prospects of the company and the efficacy of its
long-term strategy. The year ahead will be an opportunity to
build on the sound and profitable platform we have collectively created."
FULL YEAR RESULTS
The Company reported fiscal 2015 full year total revenues of $8.63
billion, a 1% increase as compared to the prior year revenues of $8.57
billion. The increase reflects growth in the Book Publishing and Digital
Real Estate Services segments, primarily as a result of the acquisitions
of Harlequin Enterprises Limited (“Harlequin”) and Move, Inc. (“Move”),
respectively, which was partially offset by adverse foreign currency
fluctuations and lower advertising revenues at the News and Information
Services segment. Adjusted revenues (as defined in Note 1) were 1% lower
than the prior year.
The Company reported full year Total Segment EBITDA of $852 million, an
11% increase as compared to $770 million in the prior year. These
results include $50 million in fees and costs in fiscal 2015 and $72
million in fiscal 2014 – net of indemnification – related to the U.K.
Newspaper Matters (as defined below). The improvement was driven by
increased revenues in the Book Publishing segment due to the inclusion
of Harlequin results and lower expenses, mainly due to the increased
capitalization of software development costs, at the Digital Education
segment; partially offset by adverse foreign currency fluctuations,
declines at the News and Information Services segment, which includes
higher legal costs at News America Marketing, and stock-based
compensation expense in connection to the acquisition of Move. Adjusted
Total Segment EBITDA (as defined in Note 1) increased 15% compared to
the prior year.
Impairment and restructuring charges were $455 million and $94 million
in the fiscal years ended June 30, 2015 and 2014, respectively. Included
in impairment and restructuring charges for fiscal 2015 was a non-cash
impairment charge of $371 million related to the Amplify business. In
the fourth quarter of fiscal 2015, the Company determined it would cease
actively marketing Amplify’s Access products to new customers; however,
it will continue to provide service and support to its existing
customers. Additionally, the Company is reviewing strategic alternatives
with respect to Amplify’s remaining digital education businesses. This
change in Amplify’s strategy and related outlook resulted in a reduction
in expected future cash flows for the business. As a result, the Company
determined that the fair value of Amplify declined below its carrying
value and recorded an impairment charge.
Net loss available to News Corporation stockholders was $149 million as
compared to net income available to News Corporation stockholders of
$237 million in the prior year. Adjusted net income available to News
Corporation stockholders (as defined in Note 3) was $272 million
compared to $268 million in the prior year.
Net loss per share available to News Corporation stockholders was $0.26
as compared to net income per share available to News Corporation
stockholders of $0.41 in the prior year. Adjusted EPS (as defined in
Note 3) were $0.47 compared to $0.46 in the prior year.
Free cash flow available to News Corporation was $368 million in the
fiscal year ended June 30, 2015, compared to $365 million in the prior
year.
FOURTH QUARTER RESULTS
The Company reported fiscal 2015 fourth quarter total revenues of $2.14
billion, a 2% decrease as compared to the prior year fourth quarter
revenues of $2.19 billion. The majority of the revenue decline reflects
adverse foreign currency fluctuations and lower advertising revenues at
the News and Information Services segment, partially offset by growth in
the Digital Real Estate Services and Book Publishing segments, primarily
as a result of the acquisitions of Move and Harlequin, respectively.
Adjusted revenues were 1% lower than the corresponding prior year period.
The Company’s fourth quarter Total Segment EBITDA of $191 million, which
includes fees and costs, net of indemnification, related to the U.K.
Newspaper Matters of $8 million, was a 50% increase as compared to $127
million in the prior year. This increase was primarily driven by lower
expenses at the News and Information Services and Digital Education
segments, partially offset by adverse foreign currency fluctuations.
Adjusted Total Segment EBITDA increased 62% compared to the prior year.
Net loss available to News Corporation stockholders was $379 million as
compared to net income available to News Corporation stockholders of $12
million in the prior year. Impairment and restructuring charges were
$424 million and $21 million in the three months ended June 30, 2015 and
2014, respectively. The impairment and restructuring charges for the
three months ended June 30, 2015 include an impairment charge of $371
million related to Amplify, as discussed above. Adjusted net income
available to News Corporation stockholders was $38 million compared to
$6 million in the prior year.
Net loss per share available to News Corporation stockholders was $0.65
as compared to net income per share available to News Corporation
stockholders of $0.02 in the prior year. Adjusted EPS were $0.07
compared to $0.01 in the prior year.
SEGMENT REVIEW
|
|
|
|
For the three months ended
|
|
For the fiscal years ended
|
|
|
June 30,
|
|
June 30,
|
|
|
2015
|
|
2014
|
|
% Change
|
|
2015
|
|
2014
|
|
% Change
|
|
|
(in millions)
|
|
|
|
|
(in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
News and Information Services
|
|
$
|
1,404
|
|
|
$
|
1,558
|
|
|
(10
|
)%
|
|
$
|
5,731
|
|
|
$
|
6,153
|
|
|
(7
|
)%
|
Book Publishing
|
|
|
390
|
|
|
|
361
|
|
|
8
|
%
|
|
|
1,667
|
|
|
|
1,434
|
|
|
16
|
%
|
Digital Real Estate Services
|
|
|
189
|
|
|
|
113
|
|
|
67
|
%
|
|
|
625
|
|
|
|
408
|
|
|
53
|
%
|
Cable Network Programming
|
|
|
133
|
|
|
|
136
|
|
|
(2
|
)%
|
|
|
500
|
|
|
|
491
|
|
|
2
|
%
|
Digital Education
|
|
|
24
|
|
|
|
18
|
|
|
33
|
%
|
|
|
109
|
|
|
|
88
|
|
|
24
|
%
|
Other
|
|
|
1
|
|
|
|
-
|
|
|
**
|
|
|
|
1
|
|
|
|
-
|
|
|
**
|
|
Total Revenues
|
|
$
|
2,141
|
|
|
$
|
2,186
|
|
|
(2
|
)%
|
|
$
|
8,633
|
|
|
$
|
8,574
|
|
|
1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment EBITDA:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
News and Information Services
|
|
$
|
169
|
|
|
$
|
131
|
|
|
29
|
%
|
|
$
|
603
|
|
|
$
|
665
|
|
|
(9
|
)%
|
Book Publishing
|
|
|
33
|
|
|
|
33
|
|
|
-
|
%
|
|
|
221
|
|
|
|
197
|
|
|
12
|
%
|
Digital Real Estate Services(a)
|
|
|
45
|
|
|
|
62
|
|
|
(27
|
)%
|
|
|
201
|
|
|
|
214
|
|
|
(6
|
)%
|
Cable Network Programming
|
|
|
22
|
|
|
|
19
|
|
|
16
|
%
|
|
|
135
|
|
|
|
128
|
|
|
5
|
%
|
Digital Education
|
|
|
(24
|
)
|
|
|
(53
|
)
|
|
55
|
%
|
|
|
(93
|
)
|
|
|
(193
|
)
|
|
52
|
%
|
Other(b)
|
|
|
(54
|
)
|
|
|
(65
|
)
|
|
17
|
%
|
|
|
(215
|
)
|
|
|
(241
|
)
|
|
11
|
%
|
Total Segment EBITDA
|
|
$
|
191
|
|
|
$
|
127
|
|
|
50
|
%
|
|
$
|
852
|
|
|
$
|
770
|
|
|
11
|
%
|
|
** - Not meaningful
|
(a)
|
|
Digital Real Estate Services Segment EBITDA for the fiscal year
ended June 30, 2015 includes one-time transaction costs of
approximately $19 million related to the acquisition of Move.
|
(b)
|
|
Other Segment EBITDA for the three months and fiscal year ended June
30, 2015 includes fees and costs, net of indemnification, related to
the U.K. Newspaper Matters of $8 million and $50 million,
respectively. Other Segment EBITDA for the three months and fiscal
year ended June 30, 2014 includes fees and costs related to the U.K.
Newspaper Matters of $16 million and $72 million, respectively.
|
|
News and Information Services
Full Year Segment Results
Fiscal 2015 full year revenues decreased $422 million, or 7%, compared
to the prior year. Total segment advertising revenues declined 10%,
driven primarily by weakness in the print advertising market coupled
with the negative impact of foreign currency fluctuations. Circulation
and subscription revenues declined 4%, due to adverse foreign currency
fluctuations. Adjusted revenues declined 3% compared to the prior year.
Full year Segment EBITDA decreased $62 million, or 9%, as compared to
the prior year. Results were impacted by lower advertising revenues,
higher legal expenses at News America Marketing of $20 million, negative
foreign currency fluctuations and one-time expenses of $11 million
related to the termination of a distribution contract in connection with
continued cost reduction initiatives, which more than offset lower
operating expenses. Adjusted Segment EBITDA decreased 6% compared to the
prior year.
Fourth Quarter Segment Results
Revenues for the fourth quarter of fiscal 2015 decreased $154 million,
or 10%, compared to the prior year, as a result of a 13% decline in
advertising revenues and a 5% decline in circulation revenues, driven by
negative foreign currency fluctuations. Adjusted revenues declined 2%
compared to the prior year. Segment EBITDA increased $38 million in the
quarter, or 29%, as compared to the prior year. The increase was driven
by lower operating expenses, partially offset by lower advertising
revenues, one-time expenses of $11 million related to the termination of
a distribution contract in connection with continued cost reduction
initiatives and negative foreign currency fluctuations. Adjusted Segment
EBITDA increased 34% compared to the prior year.
Book Publishing
Full Year Segment Results
Full year revenues increased $233 million, or 16%, compared to the prior
year driven by the inclusion of Harlequin results and strong backlist
sales in the general books category, resulting from the success of American
Sniper by Chris Kyle, partially offset by lower revenues from the Divergent
series by Veronica Roth. Digital sales, which consist of revenues
generated through the sale of e-books and digital audio books,
represented 22% of Consumer revenues for fiscal 2015. Segment EBITDA
increased $24 million, or 12%, from the prior year primarily due to the
inclusion of the results of Harlequin and lower expenses, partially
offset by lower contribution from the Divergent series. Adjusted
revenues and Adjusted Segment EBITDA each decreased 2%, compared to the
prior year.
Fourth Quarter Segment Results
Revenues in the quarter increased $29 million, or 8%, compared to the
prior year driven by the inclusion of Harlequin results, partially
offset by lower revenues from the Divergent series. Digital sales
represented 23% of Consumer revenues for the quarter. Segment EBITDA was
flat from the prior year as the inclusion of results from Harlequin and
lower expenses offset lower contribution from the Divergent
series. Adjusted revenues decreased 9% and Adjusted Segment EBITDA
decreased 18%, compared to the prior year.
Digital Real Estate Services
Full Year Segment Results
Fiscal 2015 revenues increased $217 million, or 53%, compared to the
prior year, primarily due to the inclusion of the results of Move, which
was acquired in November 2014, coupled with higher revenues at REA Group
Limited (“REA Group”) due to the impact of increased listing depth
product penetration and higher pricing, despite a decline in Australian
listing volumes across the market and the negative impact of foreign
currency fluctuations. Segment EBITDA decreased $13 million, or 6%,
compared to the prior year primarily due to the inclusion of a loss of
$39 million related to the acquisition of Move and negative foreign
currency fluctuations, partially offset by increased revenues at REA
Group. Segment EBITDA includes $21 million of stock-based compensation
expense and $19 million of one-time transaction costs, both related to
the acquisition of Move. Adjusted revenues and Adjusted Segment EBITDA
increased 18% and 23%, respectively, compared to the prior year.
For the full year, Move saw strength in its Connection for Co-Brokerage
product and Media revenues. Based on Move’s internal data, average
monthly unique users of realtor.com®’s web and mobile sites
for the fiscal fourth quarter grew 42% year-over-year to approximately
45 million, which was driven by almost 80% growth in mobile users;
traffic accelerated in July to 48 million monthly unique users, or 43%
growth year-over-year.
Fourth Quarter Segment Results
Revenues in the quarter increased $76 million, or 67%, compared to the
prior year due to the inclusion of the results of Move coupled with
higher listing depth product penetration and higher pricing at REA
Group. Segment EBITDA in the quarter decreased $17 million, or 27%,
compared to the prior year due to certain expenses at Move and the
negative impact of foreign currency fluctuations, partially offset by
the improvement at REA Group. At Move, strong revenue performance was
offset by $7 million of legal expenses and $5 million of stock-based
compensation expense related to the acquisition.
Adjusted revenues and Adjusted Segment EBITDA increased 15% and 18%,
respectively, compared to the prior year.
Cable Network Programming
Full Year Segment Results
Fiscal 2015 full year revenues increased $9 million, or 2%, compared to
the prior year driven by higher affiliate and advertising revenues,
partially offset by adverse foreign currency fluctuations. Segment
EBITDA increased $7 million, or 5%, from the prior year, primarily
driven by higher revenues, partially offset by adverse foreign currency
fluctuations and higher programming costs. Adjusted revenues and
Adjusted Segment EBITDA for the full year increased 11% and 15%,
respectively, compared to the prior year.
Fourth Quarter Segment Results
In the fourth quarter of fiscal 2015, revenues decreased $3 million, or
2%, compared to the prior year, as higher affiliate and advertising
revenues were more than offset by negative foreign currency
fluctuations. Segment EBITDA in the quarter increased $3 million, or
16%, compared to the prior year. Adjusted revenues increased 15% and
Adjusted Segment EBITDA increased 37%, compared to the prior year.
Digital Education
Full Year Segment Results
Revenues for the full year increased $21 million, or 24%, compared to
the prior year. Segment EBITDA improved $100 million, or 52%, compared
to the prior year, primarily due to the impact of the capitalization of
Amplify Learning’s software development costs of $53 million, reduced
development expenses and increased revenues.
Fourth Quarter Segment Results
Revenues in the quarter increased $6 million, or 33%, and Segment EBITDA
improved $29 million, or 55%.
Other
Full Year Segment Results
Full year Segment EBITDA improved by $26 million, primarily due to
decreased 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”).
The net expense related to the U.K. Newspaper Matters was $50 million
for the full year, as compared to $72 million in the prior year.
Fourth Quarter Segment Results
Segment EBITDA in the quarter improved by $11 million. The net expense
related to the U.K. Newspaper Matters was $8 million for the three
months ended June 30, 2015, as compared to $16 million in the prior year.
REVIEW OF EQUITY EARNINGS (LOSSES) OF AFFILIATES’ RESULTS
Full year equity earnings from affiliates were $58 million compared to
$90 million in the prior year. Equity earnings from affiliates for the
fourth quarter were $10 million compared to $37 million in the prior
year.
|
|
For the three months ended
|
|
For the fiscal years ended
|
|
|
June 30,
|
|
June 30,
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
|
(in millions)
|
|
(in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foxtel(a)
|
|
$
|
11
|
|
|
$
|
37
|
|
|
$
|
59
|
|
|
$
|
90
|
|
Other equity affiliates, net
|
|
|
(1
|
)
|
|
|
-
|
|
|
|
(1
|
)
|
|
|
-
|
|
Total equity earnings of affiliates
|
|
$
|
10
|
|
|
$
|
37
|
|
|
$
|
58
|
|
|
$
|
90
|
|
(a)
|
|
The Company amortized $13 million and $57 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 months and fiscal year ended June 30, 2015,
respectively, and $16 million and $62 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, full year Foxtel revenues decreased $239 million,
or 8%, to $2,658 million and Foxtel EBITDA decreased $143 million, or
16%, to $760 million as compared to the prior year, due in large part to
the adverse impact of foreign currency fluctuations. In local currency,
full year Foxtel revenues increased 1%, driven by subscriber gains and
Foxtel EBITDA decreased 8% due to short-term impacts related to the
investment in key initiatives: the new Foxtel pricing and packaging,
increased investment in Presto and the launch of Triple Play.
Total closing subscribers were over 2.8 million as of June 30, 2015, a
9% increase compared to the prior year period, as a result of higher
subscriber sales and lower churn, driven by the new pricing and
packaging strategy that was implemented in November 2014. Cable and
satellite churn improved to 10.9% from 12.5% in the prior year.
Broadcast residential ARPU was A$93, a 2% decline compared to the prior
year.
Foxtel operating income for the years ended June 30, 2015 and 2014 after
depreciation and amortization of $319 million and $349 million,
respectively, was $441 million and $554 million, respectively. Operating
income decreased as a result of the factors noted above. Foxtel’s net
income of $232 million decreased from $304 million in the prior year as
a result of the factors noted above.
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 fiscal years ended
|
|
|
June 30,
|
|
|
2015
|
|
2014
|
|
|
(in millions)
|
|
|
|
|
|
|
|
Net cash provided by operating activities
|
|
$
|
831
|
|
|
$
|
854
|
|
Less: Capital expenditures
|
|
|
(378
|
)
|
|
|
(379
|
)
|
|
|
|
453
|
|
|
|
475
|
|
Less: REA Group free cash flow
|
|
|
(130
|
)
|
|
|
(145
|
)
|
Plus: Cash dividends received from REA Group
|
|
|
45
|
|
|
|
35
|
|
Free cash flow available to News Corporation
|
|
$
|
368
|
|
|
$
|
365
|
|
|
Free cash flow available to News Corporation in the fiscal year ended
June 30, 2015 was $368 million compared to $365 million in the prior
year. The improvement was primarily due to higher dividends received
from REA Group and lower REA Group free cash flow, which is excluded
from free cash flow available to News Corporation, offset by lower cash
provided by operating activities. Cash provided by operating activities
decreased as a result of the absence of the net receipts related to a
foreign tax refund of $73 million and lease incentives of $35 million
received during the fiscal year ended June 30, 2014, as well as higher
net tax payments of $54 million and approximately $45 million of higher
deferred compensation payments related to the acquisition of Wireless
Generation incurred in the fiscal year ended June 30, 2015. The decrease
in the fiscal year ended June 30, 2015 was partially offset by lower
pension contributions of $92 million, lower restructuring payments of
$55 million and lower payments for fees and costs related to the U.K.
Newspaper Matters of $31 million. The figures include a decrease of free
cash flow available to News Corporation of approximately $30 million
related to the strengthening of the U.S. dollar against local currencies.
OTHER ITEMS
Dividends
In August 2015, the Company declared its first semi-annual cash dividend
of $0.10 per share for Class A Common Stock and Class B Common Stock.
This dividend is payable on October 21, 2015 with a record date for
determining dividend entitlements of September 16, 2015.
Stock Repurchases
On May 10, 2015, the Company announced it had begun repurchasing shares
of Class A Common Stock under its previously disclosed stock repurchase
program. From May 10, 2015 through August 6, 2015, the Company
repurchased approximately 3 million shares for approximately $45
million. The remaining authorized amount under the Company’s stock
repurchase program as of August 6, 2015 was approximately $455 million.
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 6:00pm
Eastern Daylight Time on August 12, 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, digital real estate services, cable network programming in
Australia, 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 fiscal years ended
|
|
|
June 30,
|
|
June 30,
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
Advertising
|
|
$
|
973
|
|
|
$
|
1,029
|
|
|
$
|
3,835
|
|
|
$
|
4,019
|
|
Circulation and Subscription
|
|
|
665
|
|
|
|
683
|
|
|
|
2,654
|
|
|
|
2,688
|
|
Consumer
|
|
|
371
|
|
|
|
344
|
|
|
|
1,594
|
|
|
|
1,374
|
|
Other
|
|
|
132
|
|
|
|
130
|
|
|
|
550
|
|
|
|
493
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Revenues
|
|
|
2,141
|
|
|
|
2,186
|
|
|
|
8,633
|
|
|
|
8,574
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
|
(1,229
|
)
|
|
|
(1,311
|
)
|
|
|
(5,025
|
)
|
|
|
(5,139
|
)
|
Selling, general and administrative
|
|
|
(721
|
)
|
|
|
(748
|
)
|
|
|
(2,756
|
)
|
|
|
(2,665
|
)
|
Depreciation and amortization
|
|
|
(132
|
)
|
|
|
(157
|
)
|
|
|
(530
|
)
|
|
|
(578
|
)
|
Impairment and restructuring charges
|
|
|
(424
|
)
|
|
|
(21
|
)
|
|
|
(455
|
)
|
|
|
(94
|
)
|
Equity earnings of affiliates
|
|
|
10
|
|
|
|
37
|
|
|
|
58
|
|
|
|
90
|
|
Interest, net
|
|
|
14
|
|
|
|
18
|
|
|
|
56
|
|
|
|
68
|
|
Other, net
|
|
|
5
|
|
|
|
20
|
|
|
|
75
|
|
|
|
(653
|
)
|
Income (loss) before income tax (expense) benefit
|
|
|
(336
|
)
|
|
|
24
|
|
|
|
56
|
|
|
|
(397
|
)
|
Income tax (expense) benefit
|
|
|
(27
|
)
|
|
|
5
|
|
|
|
(134
|
)
|
|
|
691
|
|
Net (loss) income
|
|
|
(363
|
)
|
|
|
29
|
|
|
|
(78
|
)
|
|
|
294
|
|
Less: Net income attributable to noncontrolling interests
|
|
|
(15
|
)
|
|
|
(16
|
)
|
|
|
(69
|
)
|
|
|
(55
|
)
|
Net (loss) income attributable to News Corporation stockholders
|
|
|
(378
|
)
|
|
|
13
|
|
|
|
(147
|
)
|
|
|
239
|
|
Less: Adjustments to Net (loss) income attributable to News
Corporation stockholders – Redeemable Preferred Stock Dividends
|
|
|
(1
|
)
|
|
|
(1
|
)
|
|
|
(2
|
)
|
|
|
(2
|
)
|
Net (loss) income available to News Corporation stockholders
|
|
$
|
(379
|
)
|
|
$
|
12
|
|
|
$
|
(149
|
)
|
|
$
|
237
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
583
|
|
|
|
579
|
|
|
|
581
|
|
|
|
579
|
|
Diluted
|
|
|
583
|
|
|
|
580
|
|
|
|
581
|
|
|
|
580
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income available to News Corporation stockholders per
share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted
|
|
$
|
(0.65
|
)
|
|
$
|
0.02
|
|
|
$
|
(0.26
|
)
|
|
$
|
0.41
|
|
|
NEWS CORPORATION
|
CONSOLIDATED BALANCE SHEETS
|
(Unaudited; in millions)
|
|
|
|
As of June 30,
|
|
As of June 30,
|
|
|
2015
|
|
2014
|
ASSETS
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
1,951
|
|
|
$
|
3,145
|
|
Amounts due from 21st Century Fox
|
|
|
63
|
|
|
|
66
|
|
Receivables, net
|
|
|
1,310
|
|
|
|
1,388
|
|
Other current assets
|
|
|
651
|
|
|
|
671
|
|
Total current assets
|
|
|
3,975
|
|
|
|
5,270
|
|
|
|
|
|
|
|
|
Non-current assets:
|
|
|
|
|
|
|
Investments
|
|
|
2,379
|
|
|
|
2,609
|
|
Property, plant and equipment, net
|
|
|
2,746
|
|
|
|
3,009
|
|
Intangible assets, net
|
|
|
2,242
|
|
|
|
2,137
|
|
Goodwill
|
|
|
3,063
|
|
|
|
2,782
|
|
Other non-current assets
|
|
|
688
|
|
|
|
682
|
|
Total assets
|
|
$
|
15,093
|
|
|
$
|
16,489
|
|
|
|
|
|
|
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
239
|
|
|
$
|
276
|
|
Accrued expenses
|
|
|
1,151
|
|
|
|
1,188
|
|
Deferred revenue
|
|
|
361
|
|
|
|
369
|
|
Other current liabilities
|
|
|
404
|
|
|
|
431
|
|
Total current liabilities
|
|
|
2,155
|
|
|
|
2,264
|
|
|
|
|
|
|
|
|
Non-current liabilities:
|
|
|
|
|
|
|
Retirement benefit obligations
|
|
|
305
|
|
|
|
272
|
|
Deferred income taxes
|
|
|
166
|
|
|
|
224
|
|
Other non-current liabilities
|
|
|
331
|
|
|
|
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
|
|
|
12,433
|
|
|
|
12,390
|
|
Retained earnings
|
|
|
88
|
|
|
|
237
|
|
Accumulated other comprehensive (loss) income
|
|
|
(582
|
)
|
|
|
610
|
|
Total News Corporation stockholders' equity
|
|
|
11,945
|
|
|
|
13,243
|
|
Noncontrolling interests
|
|
|
171
|
|
|
|
156
|
|
Total equity
|
|
|
12,116
|
|
|
|
13,399
|
|
Total liabilities and equity
|
|
$
|
15,093
|
|
|
$
|
16,489
|
|
|
NEWS CORPORATION
|
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(Unaudited; in millions)
|
|
|
|
For the fiscal years ended
|
|
|
June 30,
|
|
|
2015
|
|
2014
|
|
|
|
|
|
Operating activities:
|
|
|
|
|
|
|
Net (loss) income
|
|
$
|
(78
|
)
|
|
$
|
294
|
|
|
|
|
|
|
|
|
Adjustments to reconcile net (loss) income to cash provided by
operating activities:
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
530
|
|
|
|
578
|
|
Equity earnings of affiliates
|
|
|
(58
|
)
|
|
|
(90
|
)
|
Cash distributions received from affiliates
|
|
|
138
|
|
|
|
153
|
|
Impairment charges, net of tax
|
|
|
371
|
|
|
|
14
|
|
Other, net
|
|
|
(75
|
)
|
|
|
(68
|
)
|
Deferred income taxes and taxes payable
|
|
|
8
|
|
|
|
32
|
|
Change in operating assets and liabilities, net of acquisitions:
|
|
|
|
|
|
|
Receivables and other assets
|
|
|
34
|
|
|
|
(105
|
)
|
Inventories, net
|
|
|
11
|
|
|
|
23
|
|
Accounts payable and other liabilities
|
|
|
(28
|
)
|
|
|
126
|
|
Pension and postretirement benefit plans
|
|
|
(22
|
)
|
|
|
(103
|
)
|
Net cash provided by operating activities
|
|
|
831
|
|
|
|
854
|
|
|
|
|
|
|
|
|
Investing activities:
|
|
|
|
|
|
|
Capital expenditures
|
|
|
(378
|
)
|
|
|
(379
|
)
|
Acquisitions, net of cash acquired
|
|
|
(1,190
|
)
|
|
|
(45
|
)
|
Investments in equity affiliates and other
|
|
|
(146
|
)
|
|
|
(1
|
)
|
Other investments
|
|
|
(224
|
)
|
|
|
(83
|
)
|
Proceeds from dispositions
|
|
|
182
|
|
|
|
202
|
|
Other
|
|
|
15
|
|
|
|
-
|
|
Net cash used in investing activities
|
|
|
(1,741
|
)
|
|
|
(306
|
)
|
|
|
|
|
|
|
|
Financing activities:
|
|
|
|
|
|
|
Net transfers from 21st Century Fox and affiliates
|
|
|
-
|
|
|
|
217
|
|
Repayment of borrowings
|
|
|
(129
|
)
|
|
|
-
|
|
Repurchase of shares
|
|
|
(30
|
)
|
|
|
-
|
|
Dividends paid
|
|
|
(30
|
)
|
|
|
(24
|
)
|
Other, net
|
|
|
(1
|
)
|
|
|
(4
|
)
|
Net cash (used in) provided by financing activities
|
|
|
(190
|
)
|
|
|
189
|
|
|
|
|
|
|
|
|
Net (decrease) increase in cash and cash equivalents
|
|
|
(1,100
|
)
|
|
|
737
|
|
Cash and cash equivalents, beginning of period
|
|
|
3,145
|
|
|
|
2,381
|
|
Exchange movement on opening cash balance
|
|
|
(94
|
)
|
|
|
27
|
|
Cash and cash equivalents, end of period
|
|
$
|
1,951
|
|
|
$
|
3,145
|
|
|
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 months and fiscal years ended June 30, 2015 and 2014.
|
|
Revenues
|
|
|
Total Segment EBITDA
|
|
|
For the three months ended June 30,
|
|
|
For the three months ended June 30,
|
|
|
2015
|
|
2014
|
|
Difference
|
|
|
2015
|
|
2014
|
|
Difference
|
|
|
(in millions)
|
|
|
(in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As reported
|
|
$
|
2,141
|
|
|
$
|
2,186
|
|
|
$
|
(45
|
)
|
|
|
$
|
191
|
|
|
$
|
127
|
|
|
$
|
64
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impact of acquisitions
|
|
|
(155
|
)
|
|
|
-
|
|
|
|
(155
|
)
|
|
|
|
8
|
|
|
|
-
|
|
|
|
8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impact of divestitures
|
|
|
-
|
|
|
|
(4
|
)
|
|
|
4
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impact of foreign currency fluctuations
|
|
|
168
|
|
|
|
-
|
|
|
|
168
|
|
|
|
|
24
|
|
|
|
-
|
|
|
|
24
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net impact of U.K. Newspaper Matters
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
8
|
|
|
|
16
|
|
|
|
(8
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As adjusted
|
|
$
|
2,154
|
|
|
$
|
2,182
|
|
|
$
|
(28
|
)
|
|
|
$
|
231
|
|
|
$
|
143
|
|
|
$
|
88
|
|
|
|
|
|
Revenues
|
|
|
Total Segment EBITDA
|
|
|
For the fiscal years ended June 30,
|
|
|
For the fiscal years ended June 30,
|
|
|
2015
|
|
2014
|
|
Difference
|
|
|
2015
|
|
2014
|
|
Difference
|
|
|
(in millions)
|
|
|
(in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As reported
|
|
$
|
8,633
|
|
|
$
|
8,574
|
|
|
$
|
59
|
|
|
|
$
|
852
|
|
|
$
|
770
|
|
|
$
|
82
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impact of acquisitions
|
|
|
(485
|
)
|
|
|
-
|
|
|
|
(485
|
)
|
|
|
|
16
|
|
|
|
-
|
|
|
|
16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impact of divestitures
|
|
|
(1
|
)
|
|
|
(49
|
)
|
|
|
48
|
|
|
|
|
-
|
|
|
|
(3
|
)
|
|
|
3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impact of foreign currency fluctuations
|
|
|
319
|
|
|
|
-
|
|
|
|
319
|
|
|
|
|
50
|
|
|
|
-
|
|
|
|
50
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net impact of U.K. Newspaper Matters
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
50
|
|
|
|
72
|
|
|
|
(22
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As adjusted
|
|
$
|
8,466
|
|
|
$
|
8,525
|
|
|
$
|
(59
|
)
|
|
|
$
|
968
|
|
|
$
|
839
|
|
|
$
|
129
|
|
|
Adjusted Revenues and Adjusted Segment EBITDA by segment for the three
months and fiscal years ended June 30, 2015 and 2014 are as follows:
|
|
For the three months ended June 30,
|
|
|
2015
|
|
2014
|
|
% Change
|
|
|
(in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Revenues:
|
|
|
|
|
|
|
|
|
|
News and Information Services
|
|
$
|
1,516
|
|
|
$
|
1,554
|
|
|
(2
|
)%
|
Book Publishing
|
|
|
328
|
|
|
|
361
|
|
|
(9
|
)%
|
Digital Real Estate Services
|
|
|
130
|
|
|
|
113
|
|
|
15
|
%
|
Cable Network Programming
|
|
|
156
|
|
|
|
136
|
|
|
15
|
%
|
Digital Education
|
|
|
24
|
|
|
|
18
|
|
|
33
|
%
|
Other
|
|
|
-
|
|
|
|
-
|
|
|
**
|
|
Adjusted Total Revenues
|
|
$
|
2,154
|
|
|
$
|
2,182
|
|
|
(1
|
)%
|
|
|
|
|
|
|
|
|
|
|
Adjusted Segment EBITDA:
|
|
|
|
|
|
|
|
|
|
News and Information Services
|
|
$
|
175
|
|
|
$
|
131
|
|
|
34
|
%
|
Book Publishing
|
|
|
27
|
|
|
|
33
|
|
|
(18
|
)%
|
Digital Real Estate Services
|
|
|
73
|
|
|
|
62
|
|
|
18
|
%
|
Cable Network Programming
|
|
|
26
|
|
|
|
19
|
|
|
37
|
%
|
Digital Education
|
|
|
(24
|
)
|
|
|
(53
|
)
|
|
55
|
%
|
Other
|
|
|
(46
|
)
|
|
|
(49
|
)
|
|
6
|
%
|
Adjusted Total Segment EBITDA
|
|
$
|
231
|
|
|
$
|
143
|
|
|
62
|
%
|
|
** - Not meaningful
|
|
|
|
|
For the fiscal years ended June 30,
|
|
|
2015
|
|
2014
|
|
% Change
|
|
|
(in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Revenues:
|
|
|
|
|
|
|
|
|
|
News and Information Services
|
|
$
|
5,933
|
|
|
$
|
6,110
|
|
|
(3
|
)%
|
Book Publishing
|
|
|
1,399
|
|
|
|
1,430
|
|
|
(2
|
)%
|
Digital Real Estate Services
|
|
|
480
|
|
|
|
406
|
|
|
18
|
%
|
Cable Network Programming
|
|
|
545
|
|
|
|
491
|
|
|
11
|
%
|
Digital Education
|
|
|
109
|
|
|
|
88
|
|
|
24
|
%
|
Other
|
|
|
-
|
|
|
|
-
|
|
|
**
|
|
Adjusted Total Revenues
|
|
$
|
8,466
|
|
|
$
|
8,525
|
|
|
(1
|
)%
|
|
|
|
|
|
|
|
|
|
|
Adjusted Segment EBITDA:
|
|
|
|
|
|
|
|
|
|
News and Information Services
|
|
$
|
620
|
|
|
$
|
661
|
|
|
(6
|
)%
|
Book Publishing
|
|
|
194
|
|
|
|
197
|
|
|
(2
|
)%
|
Digital Real Estate Services
|
|
|
265
|
|
|
|
215
|
|
|
23
|
%
|
Cable Network Programming
|
|
|
147
|
|
|
|
128
|
|
|
15
|
%
|
Digital Education
|
|
|
(93
|
)
|
|
|
(193
|
)
|
|
52
|
%
|
Other
|
|
|
(165
|
)
|
|
|
(169
|
)
|
|
2
|
%
|
Adjusted Total Segment EBITDA
|
|
$
|
968
|
|
|
$
|
839
|
|
|
15
|
%
|
|
** - Not meaningful
|
|
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 June 30, 2015 and 2014.
|
|
For the three months ended June 30, 2015
|
|
|
|
|
|
|
|
|
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
|
|
$
|
1,404
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
112
|
|
|
$
|
-
|
|
|
$
|
1,516
|
|
Book Publishing
|
|
|
390
|
|
|
|
(73
|
)
|
|
|
-
|
|
|
|
11
|
|
|
|
-
|
|
|
|
328
|
|
Digital Real Estate Services
|
|
|
189
|
|
|
|
(81
|
)
|
|
|
-
|
|
|
|
22
|
|
|
|
-
|
|
|
|
130
|
|
Cable Network Programming
|
|
|
133
|
|
|
|
-
|
|
|
|
-
|
|
|
|
23
|
|
|
|
-
|
|
|
|
156
|
|
Digital Education
|
|
|
24
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
24
|
|
Other
|
|
|
1
|
|
|
|
(1
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Total Revenues
|
|
$
|
2,141
|
|
|
$
|
(155
|
)
|
|
$
|
-
|
|
|
$
|
168
|
|
|
$
|
-
|
|
|
$
|
2,154
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment EBITDA:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
News and Information Services
|
|
$
|
169
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
6
|
|
|
$
|
-
|
|
|
$
|
175
|
|
Book Publishing
|
|
|
33
|
|
|
|
(7
|
)
|
|
|
-
|
|
|
|
1
|
|
|
|
-
|
|
|
|
27
|
|
Digital Real Estate Services
|
|
|
45
|
|
|
|
15
|
|
|
|
-
|
|
|
|
13
|
|
|
|
-
|
|
|
|
73
|
|
Cable Network Programming
|
|
|
22
|
|
|
|
-
|
|
|
|
-
|
|
|
|
4
|
|
|
|
-
|
|
|
|
26
|
|
Digital Education
|
|
|
(24
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(24
|
)
|
Other
|
|
|
(54
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
8
|
|
|
|
(46
|
)
|
Total Segment EBITDA
|
|
$
|
191
|
|
|
$
|
8
|
|
|
$
|
-
|
|
|
$
|
24
|
|
|
$
|
8
|
|
|
$
|
231
|
|
|
|
|
|
For the three months ended June 30, 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
|
|
$
|
1,558
|
|
|
$
|
-
|
|
|
$
|
(4
|
)
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
1,554
|
|
Book Publishing
|
|
|
361
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
361
|
|
Digital Real Estate Services
|
|
|
113
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
113
|
|
Cable Network Programming
|
|
|
136
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
136
|
|
Digital Education
|
|
|
18
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
18
|
|
Other
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Total Revenues
|
|
$
|
2,186
|
|
|
$
|
-
|
|
|
$
|
(4
|
)
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
2,182
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment EBITDA:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
News and Information Services
|
|
$
|
131
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
131
|
|
Book Publishing
|
|
|
33
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
33
|
|
Digital Real Estate Services
|
|
|
62
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
62
|
|
Cable Network Programming
|
|
|
19
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
19
|
|
Digital Education
|
|
|
(53
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(53
|
)
|
Other
|
|
|
(65
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
16
|
|
|
|
(49
|
)
|
Total Segment EBITDA
|
|
$
|
127
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
16
|
|
|
$
|
143
|
|
|
The following tables reconcile reported revenues and Segment EBITDA by
segment to Adjusted Revenues and Adjusted Segment EBITDA by segment for
the fiscal years ended June 30, 2015 and 2014.
|
|
For the fiscal year ended June 30, 2015
|
|
|
|
|
|
|
|
|
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
|
|
$
|
5,731
|
|
|
$
|
(8
|
)
|
|
$
|
-
|
|
|
$
|
210
|
|
|
$
|
-
|
|
|
$
|
5,933
|
|
Book Publishing
|
|
|
1,667
|
|
|
|
(288
|
)
|
|
|
-
|
|
|
|
20
|
|
|
|
-
|
|
|
|
1,399
|
|
Digital Real Estate Services
|
|
|
625
|
|
|
|
(188
|
)
|
|
|
(1
|
)
|
|
|
44
|
|
|
|
-
|
|
|
|
480
|
|
Cable Network Programming
|
|
|
500
|
|
|
|
-
|
|
|
|
-
|
|
|
|
45
|
|
|
|
-
|
|
|
|
545
|
|
Digital Education
|
|
|
109
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
109
|
|
Other
|
|
|
1
|
|
|
|
(1
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Total Revenues
|
|
$
|
8,633
|
|
|
$
|
(485
|
)
|
|
$
|
(1
|
)
|
|
$
|
319
|
|
|
$
|
-
|
|
|
$
|
8,466
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment EBITDA:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
News and Information Services
|
|
$
|
603
|
|
|
$
|
5
|
|
|
$
|
-
|
|
|
$
|
12
|
|
|
$
|
-
|
|
|
$
|
620
|
|
Book Publishing
|
|
|
221
|
|
|
|
(28
|
)
|
|
|
-
|
|
|
|
1
|
|
|
|
-
|
|
|
|
194
|
|
Digital Real Estate Services
|
|
|
201
|
|
|
|
39
|
|
|
|
-
|
|
|
|
25
|
|
|
|
-
|
|
|
|
265
|
|
Cable Network Programming
|
|
|
135
|
|
|
|
-
|
|
|
|
-
|
|
|
|
12
|
|
|
|
-
|
|
|
|
147
|
|
Digital Education
|
|
|
(93
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(93
|
)
|
Other
|
|
|
(215
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
50
|
|
|
|
(165
|
)
|
Total Segment EBITDA
|
|
$
|
852
|
|
|
$
|
16
|
|
|
$
|
-
|
|
|
$
|
50
|
|
|
$
|
50
|
|
|
$
|
968
|
|
|
|
|
|
For the fiscal year ended June 30, 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
|
|
$
|
6,153
|
|
|
$
|
-
|
|
|
$
|
(43
|
)
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
6,110
|
|
Book Publishing
|
|
|
1,434
|
|
|
|
-
|
|
|
|
(4
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
1,430
|
|
Digital Real Estate Services
|
|
|
408
|
|
|
|
-
|
|
|
|
(2
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
406
|
|
Cable Network Programming
|
|
|
491
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
491
|
|
Digital Education
|
|
|
88
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
88
|
|
Other
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Total Revenues
|
|
$
|
8,574
|
|
|
$
|
-
|
|
|
$
|
(49
|
)
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
8,525
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment EBITDA:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
News and Information Services
|
|
$
|
665
|
|
|
$
|
-
|
|
|
$
|
(4
|
)
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
661
|
|
Book Publishing
|
|
|
197
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
197
|
|
Digital Real Estate Services
|
|
|
214
|
|
|
|
-
|
|
|
|
1
|
|
|
|
-
|
|
|
|
-
|
|
|
|
215
|
|
Cable Network Programming
|
|
|
128
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
128
|
|
Digital Education
|
|
|
(193
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(193
|
)
|
Other
|
|
|
(241
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
72
|
|
|
|
(169
|
)
|
Total Segment EBITDA
|
|
$
|
770
|
|
|
$
|
-
|
|
|
$
|
(3
|
)
|
|
$
|
-
|
|
|
$
|
72
|
|
|
$
|
839
|
|
|
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 (loss) 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 (loss) income.
|
|
For the three months ended June 30,
|
|
|
2015
|
|
2014
|
|
Change
|
|
% Change
|
|
|
(in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
2,141
|
|
|
$
|
2,186
|
|
|
$
|
(45
|
)
|
|
(2
|
)%
|
Operating expenses
|
|
|
(1,229
|
)
|
|
|
(1,311
|
)
|
|
|
82
|
|
|
6
|
%
|
Selling, general and administrative
|
|
|
(721
|
)
|
|
|
(748
|
)
|
|
|
27
|
|
|
4
|
%
|
Total Segment EBITDA
|
|
|
191
|
|
|
|
127
|
|
|
|
64
|
|
|
50
|
%
|
Depreciation and amortization
|
|
|
(132
|
)
|
|
|
(157
|
)
|
|
|
25
|
|
|
16
|
%
|
Impairment and restructuring charges
|
|
|
(424
|
)
|
|
|
(21
|
)
|
|
|
(403
|
)
|
|
**
|
|
Equity earnings of affiliates
|
|
|
10
|
|
|
|
37
|
|
|
|
(27
|
)
|
|
(73
|
)%
|
Interest, net
|
|
|
14
|
|
|
|
18
|
|
|
|
(4
|
)
|
|
(22
|
)%
|
Other, net
|
|
|
5
|
|
|
|
20
|
|
|
|
(15
|
)
|
|
(75
|
)%
|
(Loss) income before income tax (expense) benefit
|
|
|
(336
|
)
|
|
|
24
|
|
|
|
(360
|
)
|
|
**
|
|
Income tax (expense) benefit
|
|
|
(27
|
)
|
|
|
5
|
|
|
|
(32
|
)
|
|
**
|
|
Net (loss) income
|
|
$
|
(363
|
)
|
|
$
|
29
|
|
|
$
|
(392
|
)
|
|
**
|
|
|
** - Not meaningful
|
|
|
|
For the fiscal years ended June 30,
|
|
|
2015
|
|
2014
|
|
Change
|
|
% Change
|
|
|
(in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
8,633
|
|
|
$
|
8,574
|
|
|
$
|
59
|
|
|
1
|
%
|
Operating expenses
|
|
|
(5,025
|
)
|
|
|
(5,139
|
)
|
|
|
114
|
|
|
2
|
%
|
Selling, general and administrative
|
|
|
(2,756
|
)
|
|
|
(2,665
|
)
|
|
|
(91
|
)
|
|
(3
|
)%
|
Total Segment EBITDA
|
|
|
852
|
|
|
|
770
|
|
|
|
82
|
|
|
11
|
%
|
Depreciation and amortization
|
|
|
(530
|
)
|
|
|
(578
|
)
|
|
|
48
|
|
|
8
|
%
|
Impairment and restructuring charges
|
|
|
(455
|
)
|
|
|
(94
|
)
|
|
|
(361
|
)
|
|
**
|
|
Equity earnings of affiliates
|
|
|
58
|
|
|
|
90
|
|
|
|
(32
|
)
|
|
(36
|
)%
|
Interest, net
|
|
|
56
|
|
|
|
68
|
|
|
|
(12
|
)
|
|
(18
|
)%
|
Other, net
|
|
|
75
|
|
|
|
(653
|
)
|
|
|
728
|
|
|
**
|
|
Income (loss) before income tax (expense) benefit
|
|
|
56
|
|
|
|
(397
|
)
|
|
|
453
|
|
|
**
|
|
Income tax (expense) benefit
|
|
|
(134
|
)
|
|
|
691
|
|
|
|
(825
|
)
|
|
**
|
|
Net (loss) income
|
|
$
|
(78
|
)
|
|
$
|
294
|
|
|
$
|
(372
|
)
|
|
**
|
|
|
** - Not meaningful
|
|
NOTE 3 – ADJUSTED NET INCOME AVAILABLE TO NEWS CORPORATION
STOCKHOLDERS AND ADJUSTED EPS
The Company uses net (loss) 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 (loss) income
available to News Corporation stockholders and net (loss) 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 (loss) 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 months and fiscal years ended June 30, 2015 and 2014.
|
|
For the three months ended
|
|
For the three months ended
|
|
|
June 30, 2015
|
|
June 30, 2014
|
|
|
Net (loss) income available to stockholders
|
|
EPS
|
|
Net income available to stockholders
|
|
EPS
|
|
|
(in millions, except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As reported
|
|
$
|
(379
|
)
|
|
$
|
(0.65
|
)
|
|
$
|
12
|
|
|
$
|
0.02
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.K. Newspaper Matters
|
|
|
8
|
|
|
|
0.02
|
|
|
|
16
|
|
|
|
0.03
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment and restructuring charges
|
|
|
424
|
|
|
|
0.73
|
|
|
|
21
|
|
|
|
0.03
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other, net
|
|
|
(5
|
)
|
|
|
(0.01
|
)
|
|
|
(20
|
)
|
|
|
(0.03
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax impact on items above
|
|
|
(10
|
)
|
|
|
(0.02
|
)
|
|
|
(23
|
)
|
|
|
(0.04
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As adjusted
|
|
$
|
38
|
|
|
$
|
0.07
|
|
|
$
|
6
|
|
|
$
|
0.01
|
|
|
|
|
|
For the fiscal year ended
|
|
For the fiscal year ended
|
|
|
June 30, 2015
|
|
June 30, 2014
|
|
|
Net (loss) income available to stockholders
|
|
EPS
|
|
Net income available to stockholders
|
|
EPS
|
|
|
(in millions, except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As reported
|
|
$
|
(149
|
)
|
|
$
|
(0.26
|
)
|
|
$
|
237
|
|
|
$
|
0.41
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.K. Newspaper Matters
|
|
|
50
|
|
|
|
0.09
|
|
|
|
72
|
|
|
|
0.13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment and restructuring charges
|
|
|
455
|
|
|
|
0.78
|
|
|
|
94
|
|
|
|
0.16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other, net (a)
|
|
|
(75
|
)
|
|
|
(0.13
|
)
|
|
|
653
|
|
|
|
1.13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax impact on items above(b)
|
|
|
(20
|
)
|
|
|
(0.03
|
)
|
|
|
(788
|
)
|
|
|
(1.37
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impact of noncontrolling interest on items included in Other, net
above
|
|
|
11
|
|
|
|
0.02
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As adjusted
|
|
$
|
272
|
|
|
$
|
0.47
|
|
|
$
|
268
|
|
|
$
|
0.46
|
|
(a)
|
|
Other, net for the fiscal year ended June 30, 2015 primarily
includes a gain on the sale of marketable securities and dividends
received from cost method investments. Other, net for the fiscal
year ended June 30, 2014 primarily includes a foreign tax refund
paid to 21st Century Fox offset by a gain on a third party pension
contribution and gain on a sale of Australian property.
|
(b)
|
|
Tax impact on items above for the fiscal ended June 30, 2014
primarily includes a foreign tax refund of $721 million which has an
offsetting payable to 21st Century Fox included within Other, net
above.
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20150812006274/en/
Copyright Business Wire 2015