Twenty-First Century Fox 2004 Annual Report Download - page 78

Note 7 Items recognised directly in equity
These items relate to an increase in associated entity reserves in fiscal 2003 of $152 million (2002 $267 million reduction).
During 2003 BSkyB issued new equity as consideration for several transactions. These issuances reduced the Group’s
ownership interest in BSkyB from 36.2% (2002) to 35.4% (2003). In accordance with AASB 1016 “Accounting for Investments in
Associates”, in the year to 30 June, 2002, the Group recorded a decrease in its investment and a corresponding decrease in
reserves of $240 million. In the year to 30 June, 2003, the Group recorded an increase in its investment in BSkyB and a
corresponding increase in reserves of $152 million.
Consolidated
2004 2003
A$ million
Note 8 Retained profits
Retained profits at the beginning of the financial year 1,137 1
Net profit attributable to members of the parent entity 2,312 1,808
Dividends provided for or paid (367) (351)
Aggregate amount transferred to reserves (400) (321)
Retained profits at the end of the financial year 2,682 1,137
Dividends on ordinary and preferred limited voting ordinary shares are paid out of the retained profits of the parent entity,
The News Corporation Limited. The parent entity has retained profits as at 30 June, 2004 of $19.7 billion (2003 $17.8 billion).
Note 9 Hughes Transaction
On 22 December, 2003, the Group acquired a 34% interest in Hughes Electronics Corporation (“Hughes”) for total
consideration of approximately $9.3 billion (US$6.8 billion). General Motors Corporation (“GM”) sold its 19.8 % interest in
Hughes to the Group in exchange for approximately $4.2 billion (US$3.1 billion) in cash, and 28.6 million American
Depositary Shares, each representing four News Corporation preferred limited voting ordinary shares (“News Corporation
Preferred ADSs”), valued at approximately $1.1 billion (US$0.8 billion). The Group acquired 14.2% of Hughes from the
former GM Class H common stockholders in exchange for approximately 102.1 million News Corporation Preferred ADSs
valued at $4.0 billion (US$2.9 billion). Immediately following the acquisition, the Group transferred its entire 34% interest
in Hughes to Fox Entertainment Group, Inc. (“FEG”) in exchange for two promissory notes totalling $6.2 billion (US$4.5
billion) and approximately 74.5 million shares of FEG’s Class A common stock valued at $3.1 billion (US$2.3 billion) (the
“Exchange”). The issuance of approximately 74.5 million shares of FEG’s Class A common stock to the Group increased its
equity interest in FEG from approximately 80.6% to approximately 82% while its voting power remained at approximately
97%. This transfer resulted in the Group recording an increase in Outside equity interests in controlled entities and a
corresponding increase in Publishing rights, titles and television licences of approximately $214 million (US$158 million),
which is not reflected in the Statement of Cash Flows.
Subsequent to the above transaction, Hughes changed its corporate name to The DIRECTV Group, Inc. (“DTV”).
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NEWS CORPORATION CONCISE REPORT 2004
Notes to and forming part of the Concise Financial Report
(continued)
for the year ended 30 June, 2004