Twenty-First Century Fox 2006 Annual Report Download - page 60

Results of Operations (CONTINUED)
(b) News America Marketing (“NAMG”), aleading provider of in-store marketing products and services primarily to
consumer packaged goods manufacturers,enters into agreements with retailers to occupy space for the display of point
of sale advertising.
(c) The Company’s current contract with MLB grants the Company rights to telecast certain regular season andallpost-
season MLB games. The contract began with the 2001 MLB season and endswith the2006 MLB season. For the
duration of the term of its contract with MLB, the Company has sublicensed telecast rights to certain MLB post-season
games to The Walt Disney Company,andis entitled to be paid asublicense fee over the remaining term. The amounts
reflected on the above table have not been reduced by the sublicense.
In July 2006, the Company entered into a new seven-year deal with MLB to broadcast various regular season games,
one League Championship Series each year and the World Series starting with the 2007 MLB season through the 2013
MLB season. Sports programming rights as of June 30, 2006 do notreflect the newMLBdeal.
Under the Company’s contract with theNFL, remaining future minimum payments for program rights to broadcast
certain football games are payable overtheremaining term of the contract through fiscal 2012.
The Company’s contracts with the NASCAR give the Company rights to broadcast certain races and ancillary content
through calendar year 2014.
The Company acquired the exclusive rights to transmit and exploit the broadcast of the 2007 Cricket World Cup and
other related events through fiscal 2007. The Company has guaranteed its subsidiaries obligations under this contract
and has been granted the first right of refusal and the last right tomatch thehighest bid received for the broadcast
rights in their respective territories.
In addition,theCompany has certain other local sports broadcasting rights.
(d) The Company has guaranteed a transponder lease for an associated company operating in Latin America. The
guarantee expires in fiscal 2019. The Company has agreed to sell its investment to DIRECTV and upon the closing of
the sale,theCompany will be released from the transponderlease guarantee(See Note 6 Investments and Note 24
Subsequent Eventstotheaccompanying Consolidated Financial Statements of News Corporation).
(e) The Company has guaranteed a bank loan facility of $71 million for an affiliate. The facility covers aterm loan of $53
million (¥6.1 billion) which matures in June 2007, and an agreement for an overdraft with $18 million (¥2.0 billion)
outstanding. The Company would be liable under this guarantee, to the extent of default by the affiliate.
(f) In August 2004, the Company guaranteed the obligations of Sky Brasil, an equity affiliate of the Company, under a
$210 million three-year credit agreement with JP Morgan Chase Bank and Citibank N.A. (See Note 6 Investments and
Note 24 Subsequent Eventstotheaccompanying Consolidated Financial Statements of News Corporation).
As of June 30, 2006 the Company was contractually obligated to approximately $576 million and$71million in the United
Kingdom and Australia, respectively, for new printing plants and related costs. All firm commitments related to these proj-
ects are included in the capital expenditure lines disclosed in the commitments table above.
In accordance with SFAS No. 87, “Employers’ Accounting for Pensions,” and SFAS No. 106, “Employers’ Accounting for
Postretirement Benefits Other Than Pensions,” the total accrued benefit liabilityforpension and other postretirement bene-
fit plans recognized as of June 30, 2006 was $342 million. (See Note 16 Pensions and Other Postretirement Benefits to the
accompanying Consolidated Financial Statements of News Corporation). This amount is impacted by, among other items,
statutory funding levels, changes in plan demographics and assumptions, and investment return on plan assets. Because of
the current overall funded status of the Company’s material plans, the accrued liability does not represent expected near-
term liquidity needs and accordingly the Company did not include this amount in the contractual obligations table.
The Company funds its U.S. qualified pension plans in accordance with Employee Retirement Income Security Act
regulations for determining the minimum annual required contribution and in accordance with Internal Revenue Service
regulations for determining the maximum annual allowable tax deduction. The minimum required contribution for the
Company’s primary qualified U.S. pension plans for the 2006 plan year is $0 and is anticipated to remain $0 for at least the
next several years due to voluntary contributions made to the plan over the recent years. Therefore, the Company did not
include any amounts as acontractual obligation in the above table. The Company does however anticipate contributing
additional voluntary amounts but such contributions will not be more than the maximum deductible amount.
The Company’s international pension plans are funded in accordance with local laws and income tax regulations. The
Company does not expect minimum annual requirements to be material in 2007. Therefore, no amounts have been
included in the table above.TheCompany does however anticipate making additional voluntary contributions to qualified
pension plans in 2007, but not more than the maximum deductible amounts.
As of June 30, 2006, the projected benefit obligation of the pension plans was $2,061 million, and the fair value of plan
assets was $1,903 million. Aportion of this underfunding is attributable to the unfunded nonqualified pension plans.
These nonqualified pension plans provide supplemental retirement benefits that are generally not permitted to be funded
through aqualified plan because of regulatory limits. Disclosure of amounts in the above table regarding expected benefit
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