Twenty-First Century Fox 2006 Annual Report Download - page 54

Results of Operations (CONTINUED)
Magazines and Inserts (4% and 5% of the Company’s consolidated revenues in fiscal 2005 and 2004, respectively)
For the fiscal year ended June 30, 2005, revenues at the MagazinesandInserts segment increased $89 million to $1,068
million from $979 million in fiscal 2004. This was primarily the result of higher demand for in-storeadvertising products in
supermarkets in the United States. Operating income increased to $298 million in fiscal 2005 from $271 million in fiscal
2004. This increase is primarily due to the revenue increases noted above.
Newspapers (17% and 16% of the Company’s consolidated revenues in fiscal 2005 and 2004, respectively)
The Newspapers segment reported revenue of $4,083 million for the fiscal year ended June 30, 2005 as compared to $3,425
million in fiscal 2004. For the fiscal year ended June 30, 2005, Operating income at the Newspapers segment was $740 mil-
lion, an increase of 31% from $565 million in fiscal 2004 resulting from increases at the Company’s Australian operations
and a recovery related to the refurbishment of its U.S. printing plant, partially offset by decreases at the Company’s U.K.
operations.
For the fiscal year ended June 30, 2005, U.K. newspapers’ revenues increased approximately 11% primarily due to
increased circulation and advertising revenues and the weakening of the U.S. dollar against the British pound sterling.
Circulation revenue increased over the corresponding period of fiscal 2004 due to the national rollout of the compact
product at The Times,as well as cover price increase on the Company’s other U.K. national papers. This increaseincircu-
lation revenue was partly offset by lower net circulation at The Sun, The Sunday Times and The News of the World.Advertis-
ing revenue was higher due to increases at the Company’s U.K. national newspapers primarily due to ahigher volume on
color advertisements and increased commercial inserts. This increasein advertising revenue was partially offset by a
decrease at The Times due to lower volumes and prices. Operating income decreased for the fiscal year ended June 30, 2005
as compared to fiscal 2004. This decrease is primarily due to increased depreciation andother costs associated with the
development of new printing plants in the UnitedKingdom.Also contributing to the decrease in Operatingincome are
increased operating costs resulting from increased production, increased pagination and higher newsprint costs. These
additional costs were partly offset by lower promotion costs in fiscal 2005, as well as the weakening of the U.S. dollar
against the British pound sterling. During the fiscal year ended June 30, 2005, the weakening of the U.S. dollar against the
British pound sterling resulted in approximately 7% increases to both revenues and Operating income as compared to fiscal
2004.
For the fiscal year ended June 30, 2005, the Company’s Australian newspapers’ revenues increased 34% due to the
consolidation of the results of QPL in November 2004, improved display and classified revenues and the weakening of the
U.S. dollar against the Australian dollar. The advertising revenue increases were driven by the continuedstrong economic
conditions in Australia and new sales initiatives, resulting in gainsinnational, retail and employment display and the
employment and real estate classified sections. Operating income increased 58% as compared to fiscal 2004 primarily due
to the revenue increases noted above. During the fiscal year ended June 30, 2005, the weakening U.S. dollar resulted in
increases of approximately 5% in revenues and operating income, noted above, as compared to the fiscal year ended
June 30, 2004.
Book Publishing (6% of the Company’s consolidated revenues in fiscal 2005 and 2004, respectively)
HarperCollins recorded revenues of $1,327 million in fiscal 2005, a$51 million, or 4%, increase from revenues of $1,276
million in fiscal 2004. The revenue increase is primarily attributable to strong performances in the General Books, Child-
rens and United Kingdom divisions including the strong sales of the 11 titles in Lemony Snicket’s ASeries of Unfortunate
Events.Infiscal 2005, HarperCollins had 103 titles on The NewYork Times Bestseller List with 15 titles reaching the number
one position compared to 97 titles on The NewYork Times Bestseller List for fiscal 2004. Other notable releases and strong
titles in fiscal 2005 included The Purpose Driven Life by Rick Warren, State Of Fear by Michael Crichton, YOU: The Owners
Manual by Michael F. Roizen and Mehmet C. Oz, M.D., American Soldier by Tommy Franks, Winning by Jack Welch, and
Freakonomics by Steven Levitt and Stephen Dunbar. Operating income was $164 million in fiscal 2005, an increase of 4%
from fiscal 2004 due to the revenue increases noted above.
Other (5% and 4% of the Company’s consolidated revenues in fiscal 2005 and 2004, respectively)
For the fiscal year ended June 30, 2005, revenues at the Othersegment increased from $834 million for fiscal 2004 to
$1,123 million. Included in this increase were higher revenues at NDS and GCC. The increase in NDS’ revenues was due to
increased smartcard shipments, as well as an increase in total authorized smartcardsinuse as compared to fiscal 2004. The
increase in GCC’s revenues was due to the International Cricket Council Champions Trophy 2004 that was held in Sep-
tember 2004 with no comparable event in fiscal 2004. For the fiscal year ended June 30, 2005, the Other segment reported
Operating losses of $177 million as compared to $128 million in fiscal 2004. The increased loss was due to costs related to
the Reorganization and increased research and development costsatNDS, partially offset by the revenue increases noted
above.
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