Twenty-First Century Fox 2007 Annual Report Download - page 57

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Management’s Discussion and Analysis of Financial Condition and Results of Operations
(continued)
Debt Instruments and Guarantees
Debt Instruments(1)
2007 2006 2005
Years ended June 30, (in millions)
Borrowings
Notes due 2037 $1,000 $ — $ —
Notes due 2035 — 1,133 —
Notes due 2034 — — 995
Notes due 2014 — — 748
All other 196 26 98
Total borrowings $1,196 $1,159 $ 1,841
Repayments of borrowings
Liquid Yield Option™ Notes $ — $ (831) $ —
New Millennium(2) — — (659)
Cruden Group assumed debt(3) — — (654)
Preferred Perpetual Shares(4) — — (345)
All other (198) (34) (452)
Total repayment of borrowings $ (198) $ (865) $(2,110)
(1) See Note 9 to the Consolidated Financial Statements of News Corporation for information with respect to borrowings.
(2) The Company had historically funded its film production by borrowing under a commercial paper facility (“New Millennium”)
but in May 2004, the Company ceased utilizing this facility. In fiscal 2005, the Company repaid the outstanding balance of $659
million on the New Millennium facility.
(3) See Note 3 to the Consolidated Financial Statements of News Corporation for information with respect to the acquisition of the
Cruden Group of companies.
(4) The Company redeemed $345 million of perpetual preference shares outstanding at par in November 2004.
LYONs
In February 2001, the Company issued Liquid Yield OptionTM Notes (“LYONs”) which pay no interest and have an aggregate princi-
pal amount at maturity of $1,515 million representing a yield of 3.5% per annum on the issue price. The holders may exchange the
notes at any time into Class A Common Stock or, at the option of the Company, the cash equivalent thereof at a fixed exchange
rate of 24.2966 shares of Class A Common Stock per $1,000 note. The LYONs are redeemable at the option of the holders on
February 28, 2011 and February 28, 2016 at a price of $706.82 and $840.73, respectively. The Company, at its election, may satisfy
the redemption amounts in cash, Class A Common Stock or any combination thereof. The Company can redeem the notes in cash
at any time at specified redemption amounts.
On February 28, 2006, 92% of the LYONs were redeemed for cash at the specified redemption amount of $594.25 per LYON.
Accordingly, the Company paid an aggregate of approximately $831 million to the holders of the LYONs that had exercised this
redemption option. The pro-rata portion of unamortized deferred financing costs relating to the redeemed LYONs approximating
$13 million was recognized and included in Other, net in the consolidated statement of operations for the fiscal year ended June 30,
2006.
Ratings of the Public Debt
The table below summarizes the Company’s credit ratings as of June 30, 2007.
Rating Agency Senior Debt Outlook
Moody’s Baa 2 Stable
S&P BBB *
* In December 2006, as a result of the announcement of the signing of the Share Exchange Agreement, Standard & Poors placed
its ratings of the Company on CreditWatch with positive implications. (See Note 3 to the Consolidated Financial Statements of
News Corporation for further discussion of the Share Exchange Agreement.)
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