Twenty-First Century Fox 2011 Annual Report Download - page 20

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Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)
Segment Analysis:
The following table sets forth the Company’s revenues and segment operating income for fiscal 2011 as compared to fiscal 2010.
2011 2010 Change % Change
For the years ended June 30, ($ millions)
Revenues:
Cable Network Programming $ 8,037 $ 7,038 $ 999 14%
Filmed Entertainment 6,899 7,631 (732) (10)%
Television 4,778 4,228 550 13%
Direct Broadcast Satellite Television 3,761 3,802 (41) (1)%
Publishing 8,826 8,548 278 3%
Other 1,104 1,531 (427) (28)%
Total revenues $33,405 $32,778 $ 627 2%
Segment operating income (loss):
Cable Network Programming $ 2,760 $ 2,268 $ 492 22%
Filmed Entertainment 927 1,349 (422) (31)%
Television 681 220 461 **
Direct Broadcast Satellite Television 232 230 2 1%
Publishing 864 467 397 85%
Other (614) (575) (39) 7%
Total segment operating income $ 4,850 $ 3,959 $ 891 23%
** not meaningful
Management believes that total segment operating income is an appropriate measure for evaluating the operating performance of the
Company’s business segments because it is the primary measure used by the Company’s chief operating decision maker to evaluate the
performance and allocate resources within the Company’s businesses. Total segment operating income provides management, investors and equity
analysts a measure to analyze operating performance of each of the Company’s business segments and its enterprise value against historical data
and competitors’ data, although historical results may not be indicative of future results (as operating performance is highly contingent on many
factors, including customer tastes and preferences). The following table reconciles total segment operating income to income from continuing
operations before income tax expense.
2011 2010
For the years ended June 30, (in millions)
Total segment operating income $4,850 $3,959
Impairment and restructuring charges (313) (253)
Equity earnings of affiliates 462 448
Interest expense, net (966) (991)
Interest income 126 91
Other, net 18 69
Income from continuing operations before income tax expense $4,177 $3,323
Cable Network Programming (24% and 21% of the Company’s consolidated revenues in fiscal 2011 and 2010, respectively)
For the fiscal year ended June 30, 2011, revenues at the Cable Network Programming segment increased $999 million, or 14%, as compared
to fiscal 2010, primarily due to higher net affiliate and advertising revenues. Domestic net affiliate and advertising revenues increased 10% and
17%, respectively, primarily due to increases at the RSNs, FOX News and FX. International net affiliate and advertising revenues increased 20%
and 22%, respectively.
The domestic net affiliate revenue increase for the fiscal year ended June 30, 2011 was primarily due to higher average rates per subscriber and
a higher number of subscribers. The increase in domestic advertising revenues was primarily due to higher pricing, ratings growth and additional
commercial spots sold.
The increase in international net affiliate revenues for the fiscal year ended June 30, 2011 was primarily due to higher net affiliate revenues at
FIC resulting primarily from increases in the number of subscribers at existing channels. The increase in international advertising revenues was
18 News Corporation