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Management’s Discussion andAnalysisofFinancial Condition and
Results of Operations
This document contains statements that constitute “forward-looking statements” within the meaning of Section 21E of the Secu-
rities Exchange Act of 1934, as amended (the “Exchange Act”), and Section 27A of the Securities Act of 1933, as amended. The
words “expect,” “estimate,” “anticipate,” “predict,” “believe” and similar expressions and variations thereof are intended to identify
forward-looking statements. These statements appear in anumber of places in this document and includestatements regarding the
intent, belief or current expectations of the Company, its directors or its officers with respect to, among other things, trends affecting
the Company’s financial condition or results of operations. The readers of this document are cautionedthat any forward-looking
statements are not guarantees of future performance and involve risks and uncertainties. More information regarding these risks,
uncertainties and other factorsisset forthunder the heading “Risk Factors” in Item 1A of the Annual Report on Form 10-K. The
Company does not ordinarily make projections of its future operating results and undertakes no obligation (andexpressly disclaims
any obligation) to publicly update or revise any forward-looking statements, whether as a result of new information, future events or
otherwise, except as required by law. Readers should carefully review this document and the otherdocuments filed by the Company
with theSecurities and Exchange Commission (the “SEC”). This section should be read together with theaudited consolidated finan-
cial statements of the Company and related notes set forthelsewhere in this Annual Report.
Reorganization
Effective November 12, 2004, the Company changed its corporate domicile from Australia to the United States and its
reporting currency from the Australian dollar to the U.S. dollar (“the Reorganization”). As aresult, the Company’s accom-
panying consolidated financial statements are statedin U.S. dollars as opposed to Australian dollars, which was the cur-
rency the Company previously used to present itsfinancial statements, and have been prepared in accordance with U.S.
generally accepted accounting principles, or GAAP.
In the Reorganization, all outstanding The News Corporation Limited (“TNCL”) ordinary shares and preferred limited
voting ordinary shares were cancelled and shares of Class ACommon Stock and Class BCommon Stock were issued in
exchange, respectively, on aone-for-two share basis. The financial statements have been presented as if the one-for-two
share exchange took place on July 1, 2003.
Introduction
Management’s discussion andanalysis of financial condition and results of operations is intended to help provide an under-
standing of the Company’s financial condition, changes in financial condition and results of operations. This discussion is
organized as follows:
•Overview of the Company’s Business—This section provides ageneral description of the Company’s businesses,
as well as recent developments that have occurredeither during fiscal 2006 or early fiscal 2007 that the Company
believes are important in understanding the results of operations and financial condition or to disclose known
trends.
•Results of Operations—This section provides an analysis of the Company’s results of operations for the threefiscal
years ended June 30, 2006. This analysis is presented on both a consolidated and a segment basis. In addition,abrief
description is provided of significant transactions and events that have an impact on the comparability of the results
being analyzed.
•Liquidity and Capital Resources—This section provides an analysis of the Company’s cashflows for the three
fiscal years ended June 30, 2006, as well as a discussion of the Company’s outstanding debt and commitments, both
firm and contingent, that existed as of June 30, 2006. Included in the discussion of outstanding debt is a discussion
of the amount of financial capacity available to fund the Company’s future commitments and obligations, as well as
adiscussion of other financing arrangements.
•Critical Accounting Policies—This section discusses accounting policies considered important to the Company’s
financial condition and results of operations, and which require significant judgment and estimates on the part of
management in application. In addition, Note 2tothe accompanying consolidated financial statements and
footnotes summarizes the Company’s significant accounting policies, including the critical accounting policy
discussion foundinthis section.
Overview of the Company’s Business
The Company is a diversified entertainment company, which manages and reports its businesses in eight segments:
•Filmed Entertainment,which principally consists of the production andacquisition of live-action andanimated
motion pictures for distribution andlicensing in all formats in all entertainment media worldwide, and the
production of original television programminginthe UnitedStates and Canada.
•Television,which principally consists of the operation of 35 full power broadcast television stations, including nine
duopolies, in the UnitedStates (Of these stations, 25 are affiliatedwith theFOXnetwork, nine are currently affiliated
with theUPNnetwork and one is an independent station. In September 2006, the nine UPN affiliated stations and
the independent station will become affiliated with the MyNetworkTV network); the broadcasting of network
programming in the United States, and the development, production and broadcasting of television programmingin
Asia.
ANNUAL REPORT 39