Twenty-First Century Fox 2006 Annual Report Download - page 50

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Results of Operations (CONTINUED)
Operating income for the Book Publishing segment for the fiscal year ended June 30, 2006 increased by $3 million or
2% from fiscal 2005. The increase in Operating income was primarily due to higher level of more profitable backlist sales in
the General Books group, when compared to the corresponding period of fiscal 2005.
Other (6% and 5% of the Company’s consolidated revenues in fiscal 2006 and 2005, respectively)
For the fiscal year ended June 30, 2006, revenues at the Othersegment increased $274 million, or 24%, as compared to fis-
cal 2005. The increase was primarily driven by incremental revenues from the FIM acquisitions. The Operating loss at the
Other segment decreased $27 million, or 15%, for the fiscal year ended June 30, 2006 as compared to fiscal 2005, primarily
as a result of fiscal 2005 results including reorganization costs in connection with theReorganization partially offset by the
inclusion of the fiscal 2006 FIM operating losses, principally resulting from employee retention expenses and amortization
of purchased intangible assets.
Results of Operations—Fiscal 2005 versus Fiscal 2004
The following table sets forth the Company’s operating results for fiscal 2005 as compared to fiscal 2004.
2005 2004 Change % Change
For the years ended June 30, ($ millions)
Revenues $23,859 $20,802 $3,057 15%
Expenses:
Operating $15,901 $13,942 $1,959 14%
Selling, general and administrative 3,697 3,364 333 10%
Depreciation andamortization 648 565 83 15%
Other operating charges 49 —49**
Total operating income $3,564 $2,931 $633 22%
Interest expense, net $(536) $ (532) $ (4) 1%
Equity earnings of affiliates 355 170 185 **
Other, net 178 186(8)(4)%
Income before income tax expense and minority interest in
subsidiaries $3,561 $2,755 $80629%
Income tax expense (1,220) (1,014) (206) 20%
Minority interest in subsidiaries, net of tax (213) (208) (5) 2%
Net income $2,128 $1,533 $59539%
Diluted earnings per sharefrom continuing operations(1) $0.69 $0.54 0.15 28%
** not meaningful
(1) Represents earnings per share basedonthe total weighted average shares outstanding (Class ACommon Stock and
Class BCommon Stock combined) for the fiscal years ended June 30, 2005 and 2004. Class ACommon Stock carry
rights to agreater dividend than Class BCommon Stock through fiscal 2007. As such, net income available to the
Company’s stockholders is allocated between the Class ACommon Stock and Class BCommon Stock.
Overview—For the fiscal year ended June 30, 2005, the Company’s revenues increased $3,057 million from $20,802 mil-
lion for the fiscal year ended June 30, 2004 to $23,859 million. This 15% increase was primarily due to revenue increases at
the FilmedEntertainment, Newspaper, Direct Broadcast Satellite Television, Television and Cable Network Programming
segments. Operating expenses increased approximately 14% for the fiscal year ended June 30, 2005 from fiscal 2004,
primarily due to increased theatrical releasing costs, home entertainment marketing and manufacturing costs and amor-
tization of production andparticipation costs at the FilmedEntertainment segment and increased sports programming and
entertainment programming costs at the Television, Cable Network Programming and Direct Broadcast Satellite Television
segments. Selling, general and administrative expenses increased approximately 10% from fiscal 2004 primarily due to
increased subscriber acquisition costs at SKY Italia and increased employee costs in support of the Company’s growing
businesses. Depreciation and amortization increased approximately 15% primarily due to accelerated depreciation recog-
nized on printing plant assets in the United Kingdom and amortization on the intangible assets acquired in the FEG acquis-
ition. In fiscal 2005, the Company also recognized Other operating charges of $49 million in relation to the Reorganization.
For the fiscal year ended June 30, 2005, Operating income increased $633 million to $3,564 million from fiscal 2004. These
increases were primarily due to improved revenue increases noted above.
50 NEWS CORPORATION