Twenty-First Century Fox 2013 Annual Report Download - page 114

TWENTY-FIRST CENTURY FOX, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
The Company reclassified gains from accumulated other comprehensive income to the consolidated
statements of operations, based on the specific identification method, of $81 million during the fiscal year ended
June 30, 2013 and nil during the fiscal years ended June 30, 2012 and 2011.
Equity Earnings of Affiliates
The Company’s share of the earnings of its equity affiliates was as follows:
For the years ended
June 30,
2013 2012 2011
(in millions)
DBSequityaffiliates ....................................................... $826 $658 $232
Cablechannelequityaffiliates................................................ (52) (34) (8)
Otherequityaffiliates ...................................................... (119) 12 128
Total Equity earnings of affiliates from continuing operations(a) ................. $655 $636 $352
(a) The Company’s investment in several of its affiliates exceeded its equity in the underlying net assets by
approximately $2.6 billion and $1.8 billion as of June 30, 2013 and 2012, respectively, which represented
the excess cost over the Company’s proportionate share of its investments’ underlying net assets. This has
been allocated between finite-lived intangible assets, indefinite-lived intangible assets and goodwill. The
finite-lived intangible assets primarily represent MSO agreements, trade names and subscriber lists with a
weighted average useful life as of June 30, 2013 and 2012 of 18 and 13 years, respectively.
In accordance with ASC 350, the Company amortized $39 million and $14 million in fiscal 2013 and fiscal
2012, respectively, related to amounts allocated to finite-lived intangible assets. Such amortization is
reflected in Equity earnings of affiliates.
BSkyB
During fiscal 2010, the Company announced that it had proposed to the board of directors of BSkyB, in
which the Company currently has an approximate 39% interest, to make a cash offer for the BSkyB shares that
the Company does not already own. On July 13, 2011, the Company announced that it no longer intended to
make an offer for the BSkyB shares that the Company does not already own. As a result of the July 2011
announcement, the Company paid BSkyB a termination fee of approximately $63 million in accordance with a
cooperation agreement between the parties. The termination fee was reflected in Other, net in the Company’s
consolidated statements of operations for the fiscal year ended June 30, 2012.
BSkyB’s shareholders and board of directors have authorized a share repurchase program. The Company
entered into an agreement with BSkyB under which, following any market purchases of shares by BSkyB, the
Company will sell to BSkyB sufficient shares to maintain its approximate 39% interest subsequent to those
market purchases, for a price equal to the price paid by BSkyB in respect of the relevant market purchases.
BSkyB began repurchasing shares as part of this share repurchase program during the second quarter of fiscal
2012. As a result, during the fiscal years ended 2013 and 2012 the Company received cash consideration of
approximately $385 million and $335 million, respectively, and recognized gains of approximately $306 million
and $270 million, respectively, which were included in Equity earnings of affiliates in the Company’s
consolidated statements of operations for the fiscal years ended June 30, 2013 and 2012.
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