Twenty-First Century Fox 2004 Annual Report Download - page 77

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75
NEWS CORPORATION CONCISE REPORT 2004
Notes to and forming part of the Concise Financial Report
(continued)
for the year ended 30 June, 2004
Note 6 Other items (continued)
Fiscal 2003 amount primarily relates to the March 2003, purchase of approximately 74% of the Group’s outstanding
US$500 million aggregate principal 8 1/2% Senior Notes due February 2005 at a premium, plus accrued interest. The
Group recognised a loss of $76 million (US$45 million) on the early redemption of 8 1/2% Senior Notes which is included
within Other expenses in the Statement of Financial Performance. Also in March 2003, 8,247,953 Trust Originated
Preferred Securities (“TOPrS”) were redeemed by the Group using proceeds from the issuance of Beneficial Unsecured
Exchangeable Securities (“BUCS”). The Group recognised a loss of $64 million (US$37 million) on early redemption of
the TOPrS (including the write off of deferred issuance costs) which is included within Other expenses in the Statement
of Financial Performance.
During the fiscal 2002 year, the Group extinguished a substantial portion of debt owing on 10 1/8% Senior Debentures due
in October 2012 and on 8 5/8% Senior Notes due February 2003. The Group recognised a loss of $64 million and $47 million,
respectively, due to the early extinguishment of debt. In June 2002 the Group and Fox Sports Networks, LLC, an indirect
subsidiary of the Group, irrevocably called for the redemption of all outstanding 8.875% Senior Notes due August 2007
and the 9.75% Senior Discounted Notes due August 2007. The Group recognised a loss of $80 million on the irrevocable
early extinguishment of the debt. The redemption was completed in August 2002.
(i) As a result of the downturn in sports related advertising during fiscal 2002, together with the reduction in long term
forecast advertising growth rates, in accordance with the Group’s accounting policies, the Directors re-evaluated the
recoverability of the costs of certain sports contracts, principally in the United States. Accordingly, the Group
recorded a one-time Other expense of $1,861 million relating to National Football League (“NFL”) ($753 million),
National Association of Stock Car Auto Racing (“NASCAR”) ($578 million), Major League Baseball (“MLB”) ($437
million) and non-US Cricket programming rights ($93 million).
(j) Stream was a satellite pay-TV provider in Italy. During fiscal 2002, the Group wrote down its investment in Stream by
$590 million to an amount considered by the Directors to be the recoverable amount at 30 June, 2002.
(k) During fiscal 2002, given the financial uncertainties surrounding KirchPayTV and its parent Kirch Gruppe, the Group
recognised a charge of $460 million to fully write down its investment in KirchMedia.
(l) During 2004 the Group’s majority owned subsidiary, NDS Group plc, acquired the MediaHighway middleware business
and certain related licensed patents for a total consideration of $106 million (€60 million) in cash. The Group concluded
that certain intangible assets recognised on acquisition were not supported by projections of the incremental future
cash flows attributable to the acquired business. Accordingly the Group has recorded an impairment charge against
these intangibles of $17 million (£6.5 million).
(m)During 2004, the Group received a special dividend from Monarchy Enterprises Holdings B.V., a cost based investment.
The portion of the dividend representing a distribution of the Group’s share of cumulative earnings of the investee of
$73 million is reflected within Other items whilst the balance has been reflected as a return of capital within Other
investments.
(n) In fiscal 2004, the Group wrote down certain print and cable assets. During fiscal 2003, the Group disposed of certain
interactive and music related assets for aggregate consideration of $175 million, and also wrote down certain other
sporting and television assets. The 30 June, 2003 amount also includes a provision for an arbitration award that was
issued in favour of PanAmSat International Systems (“PanAmSat”) against the Group. In January 2004, the Group and
PanAmSat entered into a Confidential Settlement Agreement and Releases (“the Agreement”). The Agreement settled
the dispute regarding satellite transponder capacity over India and did not have a material impact on the Group’s
consolidated financial performance, cash flows or financial position. During fiscal 2002, the Group wrote down certain
non-current assets, mainly interactive, media and sporting assets, to their recoverable amount. The Group also
disposed of various non-current assets for an aggregate consideration of $96 million. During that year the Group also
settled certain liabilities owing to MCI Communications Corporation, including accrued interest, of US$1,017 million
($1,926 million) for US$930 million ($1,760 million), consisting of 121.2 million preferred limited voting ordinary shares
valued at US$680 million ($1,288 million) and US$250 million ($473 million) in cash. The Group recognised a gain of $166
million on the settlement.