Twenty-First Century Fox 2007 Annual Report Download - page 83

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NEWS CORPORATION
Notes to the Consolidated Financial Statements (continued)
operating charges. During the fiscal year ended June 30, 2007, the Company recorded an additional $24 million relating to the
Program, which was comprised of an increase to the original provision amount, accretion and earned retention expenses, in Other
operating charges in the consolidated statements of operations. Payments of approximately $15 million and $6 million were made
against this accrual during the fiscal year ended June 30, 2007 and 2006, respectively. Foreign currency translation adjustments
increased the program liability balance by approximately $10 million and $5 million for the fiscal years ended June 30, 2007 and
2006, respectively. Program liabilities of approximately $127 million were included in other current liabilities in the June 30, 2007
consolidated balance sheet. The Company expects to record an additional provision of approximately $9 million in fiscal 2008 to
record accretion on the redundancy provision and to recognize any retention bonuses earned. A majority of the Program’s costs are
expected to be paid in cash to employees in fiscal 2008.
Note 5 Inventories
As of June 30, 2007, the Company’s inventories were comprised of the following:
2007 2006
As of June 30, (in millions)
Programming rights $ 2,390 $ 2,147
Books, DVDs, paper and other merchandise 497 466
Filmed entertainment costs:
Films:
Released (including acquired film libraries) 557 588
Completed, not released —88
In production 450 251
In development or preproduction 82 59
1,089 986
Television productions:
Released (including acquired libraries) 487 475
Completed, not released 13 27
In production 185 147
In development or preproduction 42
689 651
Total filmed entertainment costs, less accumulated amortization(a) 1,778 1,637
Total inventories, net 4,665 4,250
Less: current portion of inventory, net(b) (2,039) (1,840)
Total noncurrent inventories, net $ 2,626 $ 2,410
(a) Does not include $553 million and $584 million of net intangible film library costs as of June 30, 2007 and 2006, respectively
which are included in intangible assets subject to amortization in the consolidated balance sheet (see Note 8–Goodwill and
Other Intangible Assets for further details).
(b) Current inventory as of June 30, 2007 and June 30, 2006 is comprised of programming rights ($1,578 million and $1,411 mil-
lion, respectively), books, DVDs, paper, and other merchandise.
As of June 30, 2007, the Company estimated that approximately 68% of unamortized filmed entertainment costs from the com-
pleted films are expected to be amortized during fiscal 2008 and approximately 93% of released filmed entertainment costs will be
amortized within the next three fiscal years. During fiscal 2008, the Company expects to pay $1,067 million in accrued participation
liabilities, which are included in participations, residuals and royalties payable on the consolidated balance sheet. At June 30, 2007,
acquired film and television libraries have remaining unamortized film costs of $165 million, which are generally, amortized using
the individual film forecast method generally over a remaining period of approximately three to 14 years.
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