Twenty-First Century Fox 2005 Annual Report Download - page 48

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NEWS CORPORATION
The Company’s share of DIRECTV’s losses for the fiscal year ended June 30, 2005 was $186 million and includes the Company’s share of
DIRECTV’s increased loss from its sale of PanAmSat resulting from a reduction in the sales proceeds, the Company’s portion of the
SPACEWAY program impairment and the amortization of certain finite-lived assets and liabilities as of December 22, 2003 and, as required,
exclude certain items that were recognized by DIRECTV as income and expense within its results.
Other, net
– For the fiscal year ended June 30, 2005, the Company reported income of $178 million in Other, net primarily comprised of
the unrealized gain in fair value on the Company’s exchangeable securities in the amount of approximately $246 million and a gain on the sale of
Rogers Sportsnet of approximately $39 million, partially offset by an $85 million loss on the exchange of the Company’s investment in Regional
Programming Partners (“RPP”) and a $55 million loss on the sale of a Latin American DBS business to DIRECTV. For the fiscal year ended June
30, 2004, Other, net of $186 million was primarily comprised of a gain on the sale of SKY PerfecTV! of approximately $105 million, the receipt of
a $52 million dividend from Monarchy Enterprises Holdings, B.V., a cost based investment, a gain of $26 million related to the settlement of the
Company’s insurance claim primarily for the September 2001 loss of its broadcast tower at the World Trade Center in New York, and the
unrealized gain in fair value on the Company’s exchangeable securities in the amount of $18 million.
Income tax expense
– The effective tax rate for the fiscal year ended June 30, 2005 is 34% as compared to the effective tax rate of 37%
for fiscal 2004. The effective tax rate for the fiscal year ended June 30, 2005 is lower than the U.S. statutory rate primarily due to the resolution of
foreign income tax audits during fiscal 2005. Excluding this tax benefit, the effective tax rate was 38% for the fiscal year ended June 30, 2005
and is higher than the U.S. statutory rate primarily due to state and foreign income taxes.
Net income
–For the fiscal year ended June 30, 2005, the Company reported net income of $2,128 million as compared to $1,533 million
for the fiscal year ended June 30, 2004. This increase was primarily due to the operating income increase noted above.
Segment Analysis:
The following table sets forth the Company’s revenues and operating income by segment, for fiscal 2005 as compared to fiscal 2004.
2005 2004 Change % Change
For the year ended June 30, ($ millions)
Revenues:
Filmed Entertainment $ 5,919 $ 5,187 $ 732 14%
Television 5,338 5,027 311 6%
Cable Network Programming 2,688 2,409 279 12%
Direct Broadcast Satellite Television 2,313 1,665 648 39%
Magazines & Inserts 1,068 979 89 9%
Newspapers 4,083 3,425 658 19%
Book Publishing 1,327 1,276 51 4%
Other 1,123 834 289 35%
Total revenues $23,859 $20,802 $3,057 15%
Operating income (loss):
Filmed Entertainment $ 1,058 $ 905 $ 153 17%
Television 952 950 2 —
Cable Network Programming 702 488 214 44%
Direct Broadcast Satellite Television (173) (277) 104 38%
Magazines & Inserts 298 271 27 10%
Newspapers 740 565 175 31%
Book Publishing 164 157 7 4%
Other (177) (128) (49) (38)%
Total operating income $ 3,564 $ 2,931 $ 633 22%
Filmed Entertainment
(25% of the Company’s consolidated revenues in fiscal years 2005 and 2004)
For the fiscal year ended June 30, 2005, revenues at the Filmed Entertainment segment increased from $5,187 million to $5,919 million or
14%. This increase was primarily due to higher worldwide home entertainment revenues and worldwide theatrical revenues. Higher home
entertainment revenues reflect the strong worldwide performances of
The Day After Tomorrow
,
Garfield
,
Dodgeball
,
Alien vs. Predator
,
I, Robot
,
the
Star Wars Trilogy
, and the distribution fees earned for
The Passion of the Christ
. In addition, television titles such as
24
,
The Simpsons
and
Family Guy
also contributed to this increase. The Company’s DVD revenues rose approximately 32% for the fiscal year ended June 30, 2005
over fiscal 2004, with 81% and 19% of DVD revenues generated from the sale and distribution of film titles and television titles, respectively. The
theatrical revenue increase was driven by several strong worldwide theatrical releases including
I, Robot
,
Alien vs. Predator
,
Robots, Hide &
Seek
,
Sideways
, and
Kingdom of Heaven
as well as continued contributions from fiscal 2004 releases including
Dodgeball
,
Garfield
and
The
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