Twenty-First Century Fox 2007 Annual Report Download - page 59

Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)
(a) The Company leases transponders, office facilities, warehouse facilities, equipment and microwave transmitters used to carry
broadcast signals. These leases, which are classified as operating leases, expire at certain dates through fiscal 2090. In addition,
the Company leases various printing plants, which leases expire at various dates through fiscal 2095.
(b) News America Marketing (“NAMG”), a leading 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 contract with MLB gives the Company rights to telecast certain regular season and post season games, as well as
exclusive rights to telecast MLB’s World Series and All-Star Game for a seven-year term through the 2013 MLB season.
Under the Company’s contract with NFL, remaining future minimum payments for program rights to broadcast certain
football games are payable over the remaining term of the contract through fiscal 2012.
The Company’s contracts with NASCAR give the Company rights to broadcast certain races and ancillary content through
calendar year 2014.
Under the Company’s contract with the BCS, remaining future minimum payments for program rights to broadcast the BCS
are payable over the remaining term of the contract through fiscal 2010.
In addition, the Company has certain other local sports broadcasting rights.
(d) The Company is upgrading its printing presses with new automated technology that once fully on line, are expected to lower
production costs and improve newspaper quality including expanded color. As part of this initiative, the Company entered into
several third party printing contracts in the United Kingdom expiring in fiscal 2022.
The Company has an eight year agreement with Nielsen Media Research (“Nielsen”) under which Nielsen provides audience
measurement services for 49 of the Company’s subsidiaries and affiliates.
(e) A joint-venture in which the Company owns a 50% equity interest, entered into an agreement for global programming
rights. Under the terms of the agreement, the Company and the other joint-venture partner have jointly guaranteed the pro-
gramming rights obligation.
(f) The Company has guaranteed a bank loan facility of $65 million (¥7.97 billion) for an affiliate. The facility covers a term loan
which matures in June 2008 and an agreement for an overdraft. The Company would be liable under this guarantee, to the
extent of default by the affiliate.
As of June 30, 2007, the Company was contractually obligated for approximately $242 million and $42 million in the United
Kingdom and Australia, respectively, for new printing plants and related costs. All firm commitments related to these projects are
included in the capital expenditure lines disclosed in the commitments table above.
The table excludes the Company’s pension and other postretirement benefits (“OPEB”) obligations. The Company made volun-
tary contributions of $67 million and $149 million to its pension plans in fiscal 2007 and fiscal 2006, respectively. Future plan con-
tributions are dependent upon actual plan asset returns and interest rates. Assuming that actual plan asset returns are consistent
with the Company’s expected plan return of 7% in fiscal 2008 and beyond, and that interest rates remain constant, the Company
would not be required to make any material contributions to its pension plans to satisfy minimum statutory funding requirements
for the foreseeable future. The Company expects to make voluntary contributions of approximately $60 million to its pension plans
in fiscal 2008. Payments due to participants under the Company’s pension plans are primarily paid out of the underlying trusts.
Payments due under the Company’s OPEB plans are not required to be funded in advance, but are paid as medical costs are
incurred by covered retiree populations, and are principally dependent upon the future cost of retiree medical benefits under the
Company’s pension plans. The Company expects its OPEB payments to approximate $7 million in fiscal 2008. See Note 16 to the
accompanying Consolidated Financial Statements of News Corporation for further discussion of the Company’s pension and OPEB
plans.
Contingencies
The Company’s wholly-owned subsidiary, News Outdoor owns and operates outdoor advertising companies and also owns approx-
imately 73% of Media Support Services Limited (“MSS”), an outdoor advertising company in Russia. The minority stockholders of
MSS had the right to sell a portion of their interests to News Outdoor during the first quarter of fiscal 2007 and exercised those
rights. In certain limited circumstances, the minority stockholders of MSS have the right to sell, and News Outdoor has the right to
purchase, the remaining minority interests at fair market value. The Company believes that the exercise of these sale rights, if any,
will not have a material effect on its consolidated financial condition, future results of operations or liquidity. In June 2007, the
Company announced that it intends to explore strategic options for News Outdoor in connection with News Outdoor’s continued
development plans. These strategic options include, but are not limited to, exploring the opportunity to expand News Outdoor’s
existing shareholder group through new strategic and private equity partners.
Other than previously disclosed in the notes to these consolidated financial statements, the Company is party to several pur-
chase and sale arrangements which become exercisable over the next ten years by the Company or the counter-party to the agree-
ment. In the next twelve months, none of these arrangements that become exercisable are material. Purchase arrangements that are
exercisable by the counter-party to the agreement, and that are outside the sole control of the Company are accounted for in
accordance with EITF No. D-98 “Classification and Measurement of Redeemable Securities”. Accordingly, the fair values of such
purchase arrangements are classified in Minority interest liabilities.
The Company experiences routine litigation in the normal course of its business. The Company believes that none of its pending
litigation will have a material adverse effect on its consolidated financial condition, future results of operations or liquidity.
The Company’s operations are subject to tax in various domestic and international jurisdictions and as a matter of course, the
Company is regularly audited by federal, state and foreign tax authorities. The Company believes it has appropriately accrued for
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