Twenty-First Century Fox 2006 Annual Report Download - page 116

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News Corporation
Notes totheConsolidated Financial Statements (CONTINUED)
NOTE 20. EARNINGS PER SHARE
Earnings per share (“EPS”) is computed individually for the Class AandClass BCommon Stock. Net income is apportioned
to both Class Astockholders and Class Bstockholders on the ratio of 1.2 to 1, respectively, in accordance with the rights of
the stockholders as described in the Company’s Restated Certificate of Incorporation. In order to give effect tothis appor-
tionment when determining EPS, the weighted average Class ACommon Stock is increased by 20% (the “Adjusted Class”)
and is then compared to the sum of the weighted average Class BCommon Stock and the weighted average Adjusted Class.
The resulting percentageisthen applied to the Net income to determine the apportionment for the Class Astockholders
with thebalance attributable to the Class Bstockholders.
EPS has been presented in the two-class presentation, as the Class BCommon Stock participate in dividends with the
Class ACommon Stock.
The following tables set forththecomputation of basic and diluted earnings per share underSFAS No. 128, “Earnings
per Share”:
2006 2005 2004
For the years ended June 30, (in millions)
Income from continuing operations $2,812 $2,128 $1,533
Perpetual preference dividends(a) —(10) (27)
Income from continuing operations available to shareholders—basic 2,812 2,118 1,506
Interest on convertible debt(b) —2019
Other (1) — —
Income from continuing operations available to shareholders—diluted $2,811 $2,138 $1,525
Gain on disposition of discontinued operations $ 515 $— $—
Cumulative effect of accounting change, net of tax $(1,013) $—$—
Net income $2,314 $2,128 $1,533
Perpetual preference dividends(a) —(10) (27)
Net income available to shareholders—basic 2,314 2,118 1,506
Interest on convertible debt(b) —2019
Other (1) — —
Net income available to shareholders—diluted $2,313 $2,138 $1,525
(a) In November 2004, the Company redeemed the adjustable rate cumulative perpetual preference shares and the
guaranteed 8.625% perpetual preference shares for $345 million at par.
(b) In February 2006, the Company redeemed 92% of the LYONs for cash at the specified redemption amountof$594.25
per LYON (see Note 9 Borrowings).
116 NEWS CORPORATION