Twenty-First Century Fox 2011 Annual Report Download - page 58

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Notes to the Consolidated Financial Statements (continued)
Summarized financial information
Summarized financial information for a significant equity affiliate, determined in accordance with Regulation S-X of the Securities and
Exchange Acts of 1934, as amended, accounted for under the equity method is as follows:
2011 2010 2009
For the years ended June 30, (in millions)
Revenues $10,485 $9,341 $8,548
Operating income 1,705 1,732 1,297
Income from continuing operations 1,205 1,387 413
Net income 1,287 1,387 413
2011 2010
As of June 30, (in millions)
Current assets $3,743 $2,975
Non-current assets 5,850 5,145
Current liabilities 3,073 2,545
Non-current liabilities 3,869 3,813
NOTE 7. Fair Value
In accordance with ASC 820, fair value measurements are required to be disclosed using a three-tiered fair value hierarchy which distinguishes
market participant assumptions into the following categories: (i) inputs that are quoted prices in active markets (“Level 1”); (ii) inputs other than
quoted prices included within Level 1 that are observable, including quoted prices for similar assets or liabilities (“Level 2”); and (iii) inputs that
require the entity to use its own assumptions about market participant assumptions (“Level 3”). Additionally, in accordance with ASC 815, the
Company has included additional disclosures about the Company’s derivatives and hedging activities (Level 2).
The table below presents information about financial assets and liabilities carried at fair value on a recurring basis as of June 30, 2011:
Fair Value Measurements at Reporting Date Using
Total as of
June 30, 2011
Quoted Prices in
Active Markets for
Identical
Instruments
(Level 1)
Significant Other
Observable
Inputs (Level 2)
Significant
Unobservable
Inputs (Level 3)
Description (in millions)
Assets
Available-for-sale securities(1) $ 652 $360 $292 $ —
Liabilities
Derivatives(2) (22) — (22) —
Redeemable Noncontrolling interests(3) (242) — — (242)
Total $ 388 $360 $270 $(242)
(1) See Note 6–Investments.
(2) Represents derivatives associated with the Company’s foreign exchange forward contracts designated as hedges.
(3) The Company accounts for the redeemable noncontrolling interests in accordance with ASC 480-10-S99-3A “Distinguishing Liabilities from Equity” (“ASC 480-10-S99-3A”) because their
exercise is outside the control of the Company and, accordingly, as of June 30, 2011, has included the fair value of the redeemable noncontrolling interests in the consolidated balance
sheets. The majority of redeemable noncontrolling interests recorded at fair value are a put arrangement held by the noncontrolling interests in one of the Company’s majority-owned RSNs
and in one of the Company’s Asian general entertainment television joint ventures.
The fair value of the redeemable noncontrolling interest in the Company’s RSN was determined by using a discounted earnings before interest, taxes, depreciation and amortization
valuation model, assuming a 9% discount rate.
The fair value of the redeemable noncontrolling interest in the Asian general entertainment television joint venture was determined using a discounted cash flow analysis assuming a multiple
of ten times terminal year EBITDA.
56 News Corporation