Twenty-First Century Fox 2005 Annual Report Download - page 6

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> 5 <
As a result of our longer-term focus and capital allocation, News Corporation today boasts
among the best mix of assets in the business, and a corporate structure that enables us to get
the most out of those assets. We produce award-winning. critically acclaimed and popular content.
We have also invested in the world’s largest distribution platform and the only one that is truly
global in scope. Most importantly, we’ve learned how to integrate our content and distribution assets
into a seamless whole that allows us to get the most out of each individual asset – an attribute
that further distinguishes us from our peers.
Our diverse businesses encompass all forms of modern media: from print to broadcast
to cable to satellite to film to home entertainment to the Internet. We generate revenue around
the world, with more than 40 percent coming from outside the U.S. And those revenues are
diversified by a broad base of sources.
This past fiscal year, News Corporation’s net income exceeded $2.1 billion, a 39 percent
increase over the prior year with combined earnings per share of $0.69, up 28 percent. The
Company’s balance sheet is also stronger than ever before, with $6.5 billion in cash and a strong
debt-to-equity position. As a result of our strong financial position, we increased our dividends for
the fiscal year for both Class A and Class B Common Stock, to $0.12 and $0.10, respectively.
In addition, we announced a $3 billion stock buyback in June 2005, and by the end of August
had already purchased 34 million shares for approximately $585 million.
Sustained financial growth was not the only measure of our success in fiscal 2005,
however. Strategically, we also excelled. We completed our reincorporation in the U.S., moving
our primary listing to the New York Stock Exchange. This has already resulted in the Company’s
inclusion in several major U.S. equity indices, including the S&P 500, and a significant reduction
in the discount of the non-voting to voting shares. We continue to believe that this change in
domicile will help the Company attain greater value for our shareholders longer term.
With News Corporation’s domicile change, there was no further need to maintain the Fox
Entertainment Group as a separate corporate entity. Consequently, earlier this year we completed
a successful exchange offer for all outstanding shares of Fox stock. In so doing, we simplified
our corporate reporting, eliminated a duplicative U.S. listing and achieved some minimal cost
savings from redundant operations.
This year also saw us acquire the 58 percent controlling interest in Queensland Press
Pty Ltd that the Company did not already own. Queensland Press is one of Australia’s best-run,
fastest-growing newspaper operations, boasting two metro and eight regional newspapers
in some of the most desirable newspaper
markets in the country. Additionally, we
acquired Telecom Italia’s 20 percent
stake in SKY Italia, making the platform a
wholly owned subsidiary of our Company.
Queensland Press and SKY Italia are
both businesses with significant growth
potential and we are now fortunate to capture 100 percent of their results in the future.
While we made these strategic moves and acquisitions and reasserted ourselves in
the Internet – something I will refer to later – we also continued to expand and reinvigorate our
so-called traditional media businesses.
There is no better example of this than the momentum we maintained and grew across our
cable programming business. It was our biggest growth driver during fiscal 2005, recording
yet another year of double-digit revenue and operating income growth. We believe that we
have the fastest-growing collection of cable and satellite programming assets in the industry. And
while much of our profit growth today stems from our established channels – FOX News, FX
and our Regional Sports Networks – we have been diligent in developing their successors.
> News Corporation today boasts among
the best mix of assets in the business
and a corporate structure that enables us
to get the most out of those assets.