Twenty-First Century Fox 2011 Annual Report Download - page 70

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Notes to the Consolidated Financial Statements (continued)
NOTE 16. Commitments and Contingencies
The Company has commitments under certain firm contractual arrangements (“firm commitments”) to make future payments. These firm
commitments secure the future rights to various assets and services to be used in the normal course of operations. The following table summarizes
the Company’s material firm commitments as of June 30, 2011:
Payments Due by Period
Total 1 year 2-3 years 4-5 years
After 5
years
As of June 30, 2011 (in millions)
Contracts for capital expenditure $ 490 $ 408 $ 47 $ 32 $ 3
Operating leases(a)
Land and buildings 2,746 371 644 546 1,185
Plant and machinery 1,781 251 455 342 733
Other commitments
Borrowings 15,495 32 434 950 14,079
Sports programming rights(b) 20,493 3,412 5,283 2,441 9,357
Entertainment programming rights 3,756 1,847 1,330 436 143
Other commitments and contractual obligations(c) 4,371 1,002 1,374 604 1,391
Total commitments, borrowings and contractual obligations $49,132 $7,323 $9,567 $5,351 $26,891
The Company also has certain contractual arrangements in relation to certain investees that would require the Company to make payments or
provide funding if certain circumstances occur (“contingent guarantees”). The Company does not expect that these contingent guarantees will
result in any material amounts being paid by the Company in the foreseeable future. The timing of the amounts presented in the table below reflect
when the maximum contingent guarantees will expire and does not indicate that the Company expects to incur an obligation to make payments
during that time frame.
Amount of Guarantees
Expiration Per Period
Total Amounts
Committed 1 year
2-3
years 4 - 5 years
After 5
years
As of June 30, 2011
Contingent guarantees: (in millions)
Sports programming rights(d) $ 308 $ 15 $131 $162 $ —
Indemnity(e) 801 27 54 54 666
Letters of credit and other 249 249 — ——
$1,358 $291 $185 $216 $666
(a) The Company leases transponders, office facilities, warehouse facilities, printing plants, equipment and microwave transmitters used to carry broadcast signals. These leases, which are
classified as operating leases, expire at certain dates through fiscal 2090.
(b) The Company’s contract with MLB gives the Company rights to broadcast certain regular season and post season games, as well as exclusive rights to broadcast MLB’s World Series and
All-Star Game through the 2013 MLB season.
Under the Company’s contract with NFL, remaining future minimum payments for program rights to broadcast certain football games are payable over the remaining term of the contract
through fiscal 2014.
The Company’s contracts with NASCAR give the Company rights to broadcast certain races and ancillary content through calendar year 2014.
Under the Company’s contracts with certain collegiate conferences, remaining future minimum payments for program rights to broadcast certain sporting events are payable over the
remaining terms of the contracts.
Under the Company’s contract with Italy’s National League Football, remaining future minimum payments for programming rights to broadcast National League Football matches are
payable over the remaining term of the contract through fiscal 2017.
In addition, the Company has certain other local sports broadcasting rights.
(c) Primarily includes obligations relating to third party printing contracts, television rating services and paper purchase obligations.
(d) A joint-venture in which the Company owns a 50% equity interest, entered into an agreement for global programming rights. Under the terms of the agreement, the Company and the other
joint-venture partner have jointly guaranteed the programming rights obligation.
(e) In connection with the transaction related to the Dow Jones financial index businesses, the Company agreed to indemnify CME with respect to any payments of principal, premium and
interest CME makes under its guarantee of the venture financing. (See Note 3–Acquisitions, Disposals and Other Transactions for further discussion of the transaction)
In accordance with ASC 715, the total accrued benefit liability for pension and other postretirement benefit plans recognized as of June 30,
2011 was approximately $793 million (See Note 17 – Pensions and Other Postretirement Benefits). This amount is affected by, among other items,
statutory funding levels, changes in plan demographics and assumptions, and investment returns on plan assets. Because of the current overall
funded status of the Company’s material plans, the accrued liability does not represent expected near-term liquidity needs and, accordingly, this
amount is not included in the contractual obligations table.
68 News Corporation