Twenty-First Century Fox 2011 Annual Report Download - page 52

Notes to the Consolidated Financial Statements (continued)
the Company will be subrogated to and acquire all rights of CME. The maximum potential amount of undiscounted future payments related to
this indemnity was approximately $800 million at June 30, 2011. The Company has made a determination that there is no recognition of this
potential future payment in the accompanying financial statements as the likelihood of the Company having to perform under this indemnity is not
probable.
The Company has the right to cause the Venture to purchase its 10% interest at fair market value in 2016 and the Venture has the right to call
the Company’s 10% interest at fair market value in 2017.
The Company’s interest in the Venture was recorded at fair value of $67.5 million, which was determined using an earnings before interest,
taxes, depreciation and amortization (“EBITDA”) multiple and market-based valuation approach methodologies, and is now accounted for under
the cost method of accounting. The net income, assets, liabilities, and cash flow attributable to the Dow Jones Indexes business are not material to
the Company in any of the periods presented and, accordingly, have not been presented separately.
The Company recorded a combined loss of approximately $23 million on both of these transactions, which was included in Other, net in the
consolidated statements of operations for the fiscal year ended June 30, 2010. The combined loss of $23 million is comprised of the loss on the
disposition of the Dow Jones Indexes business and a gain on the sale of the Company’s STOXX investment. The disposition of the Dow Jones
Indexes business resulted in a loss of $77 million. The Company calculated the loss in accordance with ASC 810 Consolidation as the fair value of
the consideration received, which included cash and the Company’s 10% interest retained in the joint venture less a) the aggregate carrying
amount of Dow Jones Indexes’ assets and liabilities and b) the 10-year annual media credit for advertising on News Corp’s Dow Jones media
properties.
Dow Jones Indexes STOXX Combined
(in millions)
Cash received $ 607.5 $ 295.8 $ 903.3
Fair value of 10% interest retained in joint venture 67.5 — 67.5
Less: aggregate carrying amount (717.0) (242.2) (959.2)
Less: 10-year annual media credit for advertising (34.7) — (34.7)
(Loss) gain on disposition(a) $ (76.7) $ 53.6 $ (23.1)
(a) As noted above, the Company received additional consideration of approximately $43 million relating to the STOXX transaction which was included in Other, net in the consolidated
statements of operations for the fiscal year ended June 30, 2011.
In December 2009, the Company entered into an agreement to transfer the equity and related assets of Photobucket to a mobile photo
uploading platform in exchange for an equity interest in the acquirer and cash. A loss of approximately $32 million was recorded on this
transaction and was included in Other, net in the consolidated statements of operations for the fiscal year ended June 30, 2010. As a result of this
transaction, the Company’s interest in the acquirer, which is not material, was recorded at fair value and is now accounted for under the equity
method of accounting.
During fiscal 2010, the Company sold the majority of its terrestrial television operations in Eastern Europe led by the sale of its Bulgarian
terrestrial TV business, bTV. The aggregate cash received in connection with these sales was approximately $372 million, net of expense, and a
gain of approximately $195 million on these sales was included in Other, net in the consolidated statements of operations for the fiscal year ended
June 30, 2010. The Company continues to operate a terrestrial TV business, FOX TV, a Turkish national general interest free-to-air broadcast
television station. The net income, assets, liabilities and cash flow attributable to the terrestrial television operations sold are not material to the
Company in any of the periods presented and, accordingly, have not been presented separately.
Fiscal 2009 Transactions
Acquisitions
In October 2008, the Company purchased VeriSign Inc.’s (“VeriSign”) noncontrolling interest of the Jamba joint venture, which has been
included in Fox Mobile, for approximately $193 million in cash, increasing the Company’s interest to 100%. During fiscal 2010, the Company
recorded an impairment charge relating to Fox Mobile’s fixed assets. During fiscal 2010 and 2009, the Company recorded impairment charges
relating to Fox Mobile’s goodwill and finite-lived intangible assets. (See Note 9 – Goodwill and Other Intangible Assets)
In January 2009, the Company and Asianet TV Holdings Private Limited (which has since merged into its parent company Jupiter Capital
Private Limited) formed a venture, Asianet, to provide general entertainment channels in southern India. The Company paid approximately $235
million in cash and assumed net debt of approximately $20 million for a controlling interest in four of Asianet’s channels which were combined
with one of the Company’s existing channels. The Company has a controlling interest in this venture and, accordingly, began consolidating the
results in January 2009.
Disposals
In July 2008, the Company completed the sale of eight of its owned-and-operated FOX network affiliated television stations (the “Stations”) for
approximately $1 billion in cash. The Stations included: WJW in Cleveland, OH; KDVR in Denver, CO; KTVI in St. Louis, MO; WDAF in Kansas
City, MO; WITI in Milwaukee, WI; KSTU in Salt Lake City, UT; WBRC in Birmingham, AL; and WGHP in Greensboro, NC. In connection with
the transaction, the Stations entered into new affiliation agreements with the Company to receive network programming and assumed existing
contracts with the Company for syndicated programming. No portion of the sale proceeds were allocated to the new network affiliation agreements
50 News Corporation