Twenty-First Century Fox 2011 Annual Report Download - page 25

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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 2010 as compared to fiscal 2009.
2010 2009 Change % Change
For the years ended June 30, ($ millions)
Revenues:
Cable Network Programming $ 7,038 $ 6,131 $ 907 15%
Filmed Entertainment 7,631 5,936 1,695 29%
Television 4,228 4,051 177 4%
Direct Broadcast Satellite Television 3,802 3,760 42 1%
Publishing 8,548 8,167 381 5%
Other 1,531 2,378 (847) (36)%
Total revenues $32,778 $30,423 $2,355 8%
Segment operating income (loss):
Cable Network Programming $ 2,268 $ 1,653 $ 615 37%
Filmed Entertainment 1,349 848 501 59%
Television 220 191 29 15%
Direct Broadcast Satellite Television 230 393 (163) (41)%
Publishing 467 836 (369) (44)%
Other (575) (363) (212) 58%
Total segment operating income $ 3,959 $ 3,558 $ 401 11%
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 (loss) before income
tax expense.
2010 2009
For the years ended June 30, (in millions)
Total segment operating income $3,959 $ 3,558
Impairment and restructuring charges (253) (9,208)
Equity earnings (losses) of affiliates 448 (309)
Interest expense, net (991) (927)
Interest income 91 91
Other, net 69 1,256
Income (loss) before income tax expense $3,323 $(5,539)
Cable Network Programming (21% and 20% of the Company’s consolidated revenues in fiscal 2010 and 2009, respectively)
For the fiscal year ended June 30, 2010, revenues at the Cable Network Programming segment increased $907 million, or 15%, as compared
to fiscal 2009. Revenue increased 14% and 18% at the domestic and international cable channels, respectively, primarily due to higher net affiliate
and advertising revenues. Domestic net affiliate and advertising revenues increased 19% and 3%, respectively, primarily due to increases at FOX
News, the RSNs and FX. International net affiliate and advertising revenues increased 15% and 25%, respectively, primarily due to increases at
FIC and STAR.
For the fiscal year ended June 30, 2010, FOX News’ revenues increased 23% as compared to fiscal 2009, primarily due to increases in net
affiliate and advertising revenues. Net affiliate revenues increased 40% as compared to fiscal 2009, primarily due to higher average rates per
subscriber and a higher number of subscribers. Advertising revenues increased 9% as compared to fiscal 2009, primarily due to higher pricing.
The RSNs’ revenues increased 12% for the fiscal year ended June 30, 2010 as compared to fiscal 2009 driven by higher net affiliate and
advertising revenues. Net affiliate revenues increased 14% as compared to fiscal 2009, primarily due to higher average rates per subscriber and a
higher number of subscribers. Advertising revenues increased 3% as compared to fiscal 2009, primarily due to higher National Basketball
Association, MLB and collegiate football revenues resulting from higher pricing and additional commercial spots sold.
2011 Annual Report 23