Twenty-First Century Fox 2013 Annual Report Download - page 104

TWENTY-FIRST CENTURY FOX, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Other
In May 2012, the Company renewed its existing FOX affiliation agreement with a major FOX affiliate
group (“Network Affiliate”). As part of the transaction, the Company received cash consideration of $50 million
and the Network Affiliate had an option to buy the Company’s Baltimore station. Network Affiliate exercised its
option to purchase the Baltimore television station and the Company recognized a loss of $92 million which was
included in Other, net in the consolidated statements of operations for the fiscal year ended June 30, 2013. The
Company is amortizing the $50 million received from the Network Affiliate over the term of the affiliation
agreement.
Fiscal 2012
Acquisitions
In December 2011, the Company acquired the 67% equity interest it did not already own in Fox Pan
American Sports LLC, doing business as Fox Sports Latin America (“FSLA”), for approximately $400 million.
FSLA, an international sports programming and production entity, which owns and operates Fox Sports Latin
America network, a Spanish and Portuguese-language sports network distributed to subscribers in certain
Caribbean and Central and South American nations, and partially through its ownership in FSLA, a 53% interest
in Fox Deportes, a Spanish-language sports programming service distributed in the U.S. As a result of this
transaction, the Company now owns 100% of FSLA and Fox Deportes. Accordingly, the Company changed its
accounting for FSLA from an equity method investment to a consolidated subsidiary beginning in December
2011. The acquisition of FSLA supports the Company’s strategic priority of increasing its brand presence and
reach in key international markets.
The FSLA acquisition was accounted for in accordance with ASC 805. The carrying amount of the
Company’s previously held equity interest in FSLA was revalued to fair value at the acquisition date, resulting in
a non-taxable gain of approximately $158 million which was included in Other, net in the consolidated
statements of operations for the fiscal year ended June 30, 2012.
The Company finalized the purchase accounting for FSLA in the second quarter of fiscal 2013 with
approximately $280 million allocated to finite-lived intangible assets with useful lives ranging from 5 to 15 years
and approximately $320 million allocated to goodwill which will not be amortized. The goodwill reflects the
synergies and increased market penetration expected from combining the operations of FSLA and the Company.
In May 2012, the Company acquired an approximate 23% interest in Latin America Pay Television
(“LAPTV”), a partnership that distributes premium and basic television channels in Latin America, for
approximately $64 million in cash. As a result of this transaction, the Company increased its interest in LAPTV
to approximately 78% from the 55% it owned at June 30, 2011.
Dispositions
In July 2011, the Company sold its majority interest in its outdoor advertising businesses in Russia and
Romania (“News Outdoor Russia”) for cash consideration of approximately $360 million. In connection with the
sale, the Company repaid $32 million of News Outdoor Russia debt. The Company recorded a gain related to the
sale of this business, which was included in Other, net in the consolidated statements of operations for the fiscal
year ended June 30, 2012. The gain on the sale and the net income, assets, liabilities and cash flow attributable to
the News Outdoor Russia operations were not material to the Company in any of the periods presented and,
accordingly, have not been presented separately.
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