Twenty-First Century Fox 2005 Annual Report Download - page 87

NEWS CORPORATION
Notes to the Consolidated Financial Statements (continued)
Fiscal Year 2004 Acquisitions and Disposals
In May 2004, the Company sold its 40% interest in the Staples Arena for aggregate consideration of $128 million. The Company has recorded a
loss on the sale of the interest in the Staples Arena of approximately $7 million in Other, net on the consolidated statement of operations. In
connection with the sale of this interest, the Company was released from several guarantees in the aggregate amount of approximately $23
million outstanding at the time of this sale.
In May 2004, the Company acquired a 10% interest in an affiliate of Anschutz Entertainment Group, Inc. that has the right to develop and
operate an entertainment and sports complex to be located inside and adjacent to the Millennium Dome in London, England, for $25 million.
In December 2003, the Company acquired a 34% interest in Hughes Electronics Corporation (“Hughes”) for total consideration of
approximately $6.8 billion. General Motors Corporation (“GM”) sold its 20% interest in Hughes to the Company in exchange for approximately
$3.1 billion, in cash, and 57.2 million shares of News Corporation Class A shares, valued at approximately $800 million. The Company acquired
14% of Hughes from the former GM Class H common stockholders in exchange for approximately 204.2 million shares of News Corporation
Class A shares, valued at $2.9 billion. Subsequent to the above transaction, Hughes changed its corporate name to The DIRECTV Group, Inc
(“DIRECTV”).
In December 2003, the Company exercised its right to require Discovery Communications, Inc. (“Discovery”) to purchase its 10% interest in
Discovery Health Channel, LLC for a sales price of approximately $98 million. The Company had acquired this interest in connection with the
sale of The Health Network to Discovery in June 2001. The transaction was completed in fiscal 2005 and the Company recognized a gain that
was not material to the Company’s consolidated results of operations.
In August 2003, the Company sold its entire 8% cost investment in SKY Perfect Communications Inc. (“SKY PerfecTV!”). The Company’s
182,000 shares of SKY PerfecTV! were sold for total consideration of $177 million (¥20.8 billion). The Company recognized a gain of
approximately $105 million on the sale, which is reflected in Other, net in the accompanying consolidated statements of operations for the fiscal
year ended June 30, 2004.
Impairments of Cost Method Investments
During fiscal 2003, the Company wrote down its investment in Knowledge Enterprises, Inc. (“Knowledge”) by $92 million reflected in Other, net
in the consolidated statements of operations. The charge was based on Knowledge’s planned equity rights offering and reflected the estimated
recoverable value of this investment.
Summarized financial information for significant equity affiliates, determined in accordance with Regulation S-X, accounted for under the
equity method is as follows:
2005 2004 2003
For the years ended June 30, (in millions)
Revenues $19,734 $17,527 $5,824
Operating income (loss) (221) 525 (792)
Income (loss) from continuing operations (67) 172 (916)
Net loss (119) (737) (916)
2005 2004
As of June 30, (in millions)
Current assets $ 8,012 $12,033
Non-current assets 12,550 12,612
Current liabilities 4,447 7,263
Non-current liabilities 7,016 6,730
Equity affiliates of the Company have balance sheet dates consistent with the Company with the following exceptions:
Investment Year End
Gemstar-TV Guide International, Inc. December 31
National Geographic Channel (US) December 31
National Geographic International December 31
The DIRECTV Group, Inc. December 31
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