Twenty-First Century Fox 2005 Annual Report Download - page 53

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NEWS CORPORATION
Segment Analysis:
The following table sets forth the Company’s revenues and operating income by segment, for fiscal 2004 as compared to fiscal 2003.
2004 2003 Change % Change
For the year ended June 30, ($ millions)
Revenues:
Filmed Entertainment $ 5,187 $ 4,486 $ 701 16%
Television 5,027 4,763 264 6%
Cable Network Programming 2,409 2,145 264 12%
Direct Broadcast Satellite Television 1,665 220 1,445 **
Magazines & Inserts 979 923 56 6%
Newspapers 3,425 2,718 707 26%
Book Publishing 1,276 1,162 114 10%
Other 834 963 (129) (13)%
Total revenues $20,802 $17,380 $3,422 20%
Operating income (loss):
Filmed Entertainment $ 905 $ 661 $ 244 37%
Television 950 859 91 11%
Cable Network Programming 488 300 188 63%
Direct Broadcast Satellite Television (277) (81) (196) **
Magazines & Inserts 271 257 14 5%
Newspapers 565 401 164 41%
Book Publishing 157 131 26 20%
Other (128) (148) 20 14%
Total operating income $ 2,931 $ 2,380 $ 551 23%
Filmed Entertainment
(25% and 26% of the Company’s consolidated revenues in fiscal years 2004 and 2003, respectively)
For the year ended June 30, 2004, revenues at the Filmed Entertainment segment increased from $4,486 million to $5,187 million, or 16%.
This increase was primarily due to higher worldwide home entertainment revenues reflecting the strong worldwide performances of previously
successful theatrical releases,
X-2: X-Men United, Daredevil, League of Extraordinary Gentlemen,
and
Cheaper by the Dozen
, and improved
performance from various library titles on DVD as compared to fiscal 2003. Television titles, including
The Simpsons, 24, Buffy the Vampire
Slayer, Dharma & Greg
, and
Family Guy
, also contributed to the increase in home entertainment revenue. The Company’s DVD revenues rose
approximately 54% for the year ended June 30, 2004 over fiscal 2003, with 78% and 22% of DVD revenues generated from the sale and
distribution of film titles and television titles, respectively. In addition, a stronger film lineup and more feature films available during fiscal 2004
contributed higher revenues from worldwide pay and free television. Fiscal 2003 home entertainment titles included the successes of
Ice Age,
Minority Report,
and
Shallow Hal.
The year ended June 30, 2004 also included several strong theatrical releases, including
Day After Tomorrow, Dodgeball, Man on Fire,
Garfield,
and
Master and Commander: The Far Side of the World.
Fiscal 2003 theatrical releases included
X-2: X-Men United, Daredevil,
Minority Report
,
Road to Perdition
, and
Drumline.
For the year ended June 30, 2004, the Filmed Entertainment segment reported Operating income of $905 million as compared to $661
million in fiscal 2003. These improvements were due to the revenue increases noted above, partially offset by increased home entertainment
marketing and manufacturing costs directly associated with the increase in worldwide home entertainment revenues.
Television
(24% and 27% of the Company’s consolidated revenues in fiscal years 2004 and 2003, respectively)
For the year ended June 30, 2004, the Television segment reported revenues of $5,027 million as compared to $4,763 million in fiscal 2003.
This increase was primarily due to advertising revenue increases at the television stations owned by the Company and FOX driven by an
increased number of MLB games televised and improved ratings and pricing for the MLB 2003 post season, the 2004 broadcast of the Emmy
Awards, which were not telecast on FOX in fiscal 2003, higher pricing and strong sales for NFL broadcasts, and strong sales for
American Idol.
Additionally, the television stations owned by the Company experienced strong advertising sales for their local morning newscasts. Also
contributing to the increase, STAR advertising revenues increased approximately 20% primarily due to increasing popularity of STAR channels in
China and STAR Plus maintaining its strong ratings in India. These increases were partially offset by a ratings decline of 14% at FOX primarily
due to fewer episodes of
American Idol
being broadcast in fiscal 2004, the success in fiscal 2003 of
Joe Millionaire
, and the non-renewal of the
Boston Red Sox broadcasts with the Company owned television station in the Boston market.
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