Twenty-First Century Fox 2011 Annual Report Download - page 13

Management’s Discussion and Analysis of Financial Condition
and Results of Operations
This document contains statements that constitute “forward-looking statements” within the meaning of Section 21E of the Securities Exchange
Act of 1934, as amended (the “Exchange Act”), and Section 27A of the Securities Act of 1933, as amended. The words “expect,” “estimate,”
“anticipate,” “predict,” “believe” and similar expressions and variations thereof are intended to identify forward-looking statements. These
statements appear in a number of places in this document and include statements regarding the intent, belief or current expectations of the
Company, its directors or its officers with respect to, among other things, trends affecting the Company’s financial condition or results of
operations. The readers of this document are cautioned that any forward-looking statements are not guarantees of future performance and involve
risks and uncertainties. More information regarding these risks, uncertainties and other factors is set forth under the heading “Risk Factors” in
Item 1A of the Annual Report on Form 10-K. The Company does not ordinarily make projections of its future operating results and undertakes no
obligation (and expressly disclaims any obligation) to publicly update or revise any forward-looking statements, whether as a result of new
information, future events or otherwise, except as required by law. Readers should carefully review this document and the other documents filed
by the Company with the Securities and Exchange Commission (the “SEC”). This section should be read together with the audited Consolidated
Financial Statements of News Corporation and related notes set forth elsewhere in this Annual Report.
Introduction
Management’s discussion and analysis of financial condition and results of operations is intended to help provide an understanding of News
Corporation and its subsidiaries’ (together “News Corporation” or the “Company”) financial condition, changes in financial condition and results
of operations. This discussion is organized as follows:
•Overview of the Company’s Business–This section provides a general description of the Company’s businesses, as well as developments that
occurred either during fiscal 2011 or early fiscal 2012 that the Company believes are important in understanding its results of operations
and financial condition or to disclose known trends.
•Results of Operations–This section provides an analysis of the Company’s results of operations for the three fiscal years ended June 30,
2011. This analysis is presented on both a consolidated and a segment basis. In addition, a brief description is provided of significant
transactions and events that impact the comparability of the results being analyzed.
•Liquidity and Capital Resources–This section provides an analysis of the Company’s cash flows for the three fiscal years ended June 30,
2011, as well as a discussion of the Company’s outstanding debt and commitments, both firm and contingent, that existed as of June 30,
2011. Included in the discussion of outstanding debt is a discussion of the amount of financial capacity available to fund the Company’s
future commitments and obligations, as well as a discussion of other financing arrangements.
•Critical Accounting Policies–This section discusses accounting policies considered important to the Company’s financial condition and
results of operations, and which require significant judgment and estimates on the part of management in application. In addition, Note 2 to
the accompanying Consolidated Financial Statements of News Corporation summarizes the Company’s significant accounting policies,
including the critical accounting policy discussion found in this section.
Overview of the Company’s Business
The Company regularly reviews its segment reporting and classification. In the first quarter of fiscal 2011, the Company aggregated the
previously reported Book Publishing segment, Integrated Marketing Services segment and the Newspapers and Information Services segment to
report a new Publishing segment because of changes in how the Company manages and evaluates these businesses as a result of evolving industry
trends. The Company has revised its segment information for prior fiscal years to conform to the fiscal 2011 presentation.
The Company is a diversified global media company, which manages and reports its businesses in the following six segments:
•Cable Network Programming, which principally consists of the production and licensing of programming distributed through cable
television systems and direct broadcast satellite operators primarily in the United States, Latin America, Europe and Asia.
•Filmed Entertainment, which principally consists of the production and acquisition of live-action and animated motion pictures for
distribution and licensing in all formats in all entertainment media worldwide, and the production and licensing of television programming
worldwide.
•Television, which principally consists of the broadcasting of network programming in the United States and the operation of 27 full power
broadcast television stations, including nine duopolies, in the United States (of these stations, 17 are affiliated with the FOX Broadcasting
Company (“FOX”) and ten are affiliated with Master Distribution Service, Inc. (“MyNetworkTV”)).
•Direct Broadcast Satellite Television, which consists of the distribution of basic and premium programming services via satellite and
broadband directly to subscribers in Italy.
•Publishing, which principally consists of the Company’s newspapers and information services, book publishing and integrated marketing
services businesses. The newspapers and information services business principally consists of the publication of national newspapers in the
United Kingdom, the publication of approximately 146 newspapers in Australia, the publication of a metropolitan newspaper and a
national newspaper (with international editions) in the United States and the provision of information services. The book publishing
business consists of the publication of English language books throughout the world and the integrated marketing services business consists
of the publication of free-standing inserts and the provision of in-store marketing products and services in the United States and Canada.
•Other, which principally consists of the Company’s digital media properties, Wireless Generation, the Company’s education technology
business, and News Outdoor, an advertising business which offers display advertising in outdoor locations primarily throughout Russia and
Eastern Europe.
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