Twenty-First Century Fox 2006 Annual Report Download - page 52

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Results of Operations (CONTINUED)
Income tax expense—The effective tax rate for the fiscal year ended June 30, 2005 is 34% as compared to the effective tax
rate of 37% for fiscal 2004. The effective tax rate for the fiscal year ended June 30, 2005 was lower than the U.S. statutory
rate primarily due to the resolution of foreign income tax audits during fiscal 2005. Excluding this tax benefit, the effective
tax rate was 38% for the fiscal year ended June 30, 2005 and was higher than the U.S. statutory rate primarily due to state
and foreign income taxes.
Net income—For the fiscal year ended June 30, 2005, the Company reported net income of $2,128 million as compared to
$1,533 million for the fiscal year ended June 30, 2004. This increase was primarily due to the operating income increase
noted above.
Segment Analysis:
The following table sets forth the Company’s revenues and operating income by segment, for fiscal 2005 as compared
to fiscal 2004.
2005 2004 Change % Change
For the years ended June 30, ($ millions)
Revenues:
Filmed Entertainment $5,919 $5,187 $732 14%
Television 5,338 5,027 311 6%
Cable Network Programming 2,688 2,409 279 12%
Direct Broadcast Satellite Television 2,313 1,665 648 39%
Magazines and Inserts 1,068 979 89 9%
Newspapers 4,083 3,425 65819%
Book Publishing 1,327 1,276514%
Other 1,123 834 289 35%
Total revenues $23,859 $20,802 $3,057 15%
Operating income (loss):
Filmed Entertainment $1,058 $905 $153 17%
Television 952 950 2 —
Cable Network Programming 702 488 214 44%
Direct Broadcast Satellite Television (173) (277) 104 (38)%
Magazines and Inserts 298 271 27 10%
Newspapers 740 565 175 31%
Book Publishing 164 157 74%
Other (177) (128) (49) 38%
Total operating income $3,564 $2,931 $633 22%
Filmed Entertainment (25% of the Company’s consolidated revenues in fiscal 2005 and 2004, respectively)
For the fiscal year ended June 30, 2005, revenues at the FilmedEntertainment segment increased from $5,187 million to
$5,919 million, or 14%. This increase was primarily due to higher worldwide home entertainment revenues and worldwide
theatrical revenues. Higher home entertainment revenues reflect the strong worldwide performances of The Day After
Tomorrow, Garfield, Dodgeball, Alien vs. Predator,I, Robot, the Star WarsTrilogy, and the distribution fees earned for The Pas-
sion of the Christ. In addition,television titles such as 24, The Simpsons and Family Guy also contributed to this increase. The
Company’s DVD revenues roseapproximately 32% for the fiscal year ended June 30, 2005 over fiscal 2004, with 81% and
19% of DVD revenues generated from the sale and distribution of film titles and television titles, respectively. The theatrical
revenue increase was driven by several strong worldwide theatrical releases, including I, Robot, Alien vs. Predator, Robots,
Hide &Seek,Sideways,and Kingdom of Heaven, as well as continued contributions from fiscal 2004 releases, including Dodge-
ball, Garfield and The Day After Tomorrow.Fiscal 2004 included the theatrical releases League of Extraordinary Gentlemen,
Cheaper by the Dozen, Master and Commander: The Far Side of the World, 28 Days Later,Man on Fire, The Day After Tomorrow,
Garfield, and Dodgeball.
For the fiscal year ended June 30, 2005, the Filmed Entertainment segment reported Operating income of $1,058 mil-
lion as compared to $905 million in fiscal 2004. This improvement was due to the revenue increases noted above, as well as
the distribution fees earned for Star WarsEpisode III: Revenge of the Sith and Mr. and Mrs. Smith,partially offset by increased
theatrical releasing costs, home entertainment marketing and manufacturing costs, amortization of production andpartic-
ipation costs directly associated with theincrease in revenues noted above and the disappointing theatrical release of Flight
of the Phoenix.
52 NEWS CORPORATION