Twenty-First Century Fox 2007 Annual Report Download - page 120

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NEWS CORPORATION
Notes to the Consolidated Financial Statements (continued)
the terms and conditions of such subsidiary’s operating agreement). The Merger Agreement is subject to, among other things, the
adoption of the Merger Agreement by Dow Jones’ stockholders, the execution of an editorial agreement (the form of which has
been agreed by the parties), the establishment by the Company of a special committee as contemplated under such editorial
agreement, the receipt of various regulatory approvals and other customary closing conditions. The Merger Agreement contains
certain termination rights for both the Company and Dow Jones, including the right of Dow Jones to terminate the agreement to
enter into an alternative transaction that constitutes a superior acquisition proposal. Upon termination of the Merger Agreement
under specified circumstances, including a termination by Dow Jones to accept a superior acquisition proposal, Dow Jones would be
required to pay the Company a termination fee of $165 million less any previously paid expenses. The transaction is expected to be
completed in the fourth quarter of calendar 2007. The Company has agreed, upon consummation of the transaction, to appoint a
member of the Bancroft family or another mutually acceptable person to the Company’s Board of Directors.
Note 25 Supplemental Guarantor Information
In May 2007, NAI entered into the New Credit Agreement. The New Credit Agreement provides a $2.25 billion unsecured revolving
credit facility with a sub-limit of $600 million available for the issuance of letters of credit, and expires on May 23, 2012. NAI may
request an increase in the amount of the credit facility up to a maximum amount of $2.5 billion. Borrowings are in U.S. dollars only,
while letters of credit are issuable in U.S. dollars or Euros. The significant terms of the agreement include the requirement that the
Company maintain specific gearing ratios and limitations on secured indebtedness. The Company pays a facility fee of 0.10%
regardless of facility usage. The Company pays interest for borrowings and letters of credit at LIBOR plus 0.30%. The Company pays
an additional fee of 0.05% if borrowings under the facility exceed 50% of the committed facility. The interest and fees are based on
the Company’s current debt rating.
The Parent Guarantor presently guarantees the senior public indebtedness of NAI. The supplemental condensed consolidating
financial information of the Parent Guarantor should be read in conjunction with the consolidated financial statements included
herein.
In accordance with rules and regulations of the Securities and Exchange Commission, the Company uses the equity method to
account for the results of all of the non-guarantor subsidiaries, representing substantially all of the Company’s consolidated results of
operations, excluding certain intercompany eliminations.
The following condensed consolidating financial statements present the results of operations, financial position and cash flows
of NAI, News Corporation, the wholly-owned and non-wholly-owned non-guarantor subsidiaries of News Corporation and the
eliminations and reclassifications necessary to arrive at the information for the Company on a consolidated basis.
NEWS CORPORATION 2007 Annual Report 119