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Annual Report 2001
News Corporation

Table of contents

  • Page 1
    News Corporation Annual Report 2001

  • Page 2

  • Page 3
    reach people News Corporation Producing and distributing the most compelling content to the farthest reaches of the globe. subscribers consumers A.C.N 007 910 330 readers

  • Page 4
    Television United States FOX Broadcasting Company (a) Fox Television Stations (a) WNYW New York, NY KTTV Los Angeles, CA WFLD Chicago, IL WTXF Philadelphia, PA WFXT Boston, MA KDFW Dallas, TX KDFI-TV Dallas, TX WTTG Washington, DC WJBK Detroit, MI WAGA Atlanta, GA KRIV Houston, TX WTVT Tampa, FL WJW...

  • Page 5
    ...TV Guide International Inc (38.5% ) News America Marketing In-Store FSI (SmartSource Magazine) SmartSource iGroup News Marketing Canada The Weekly Standard Australia InsideOut New Zealand Independent Newspapers (44.3% ) (14 national magazines) Newspapers United States New York Post Book Publishing...

  • Page 6
    Filmed Entertainment | Television | Cable Network Programming | Newspapers | Magazines & Inserts | Book Publishing | Other The News Corporation Limited Financial Highlights (in Millions of Australian Dollars except for Earnings Per Share) Year ended June 30, Revenues United States United Kingdom ...

  • Page 7
    ... 1.26 1.17 $ 986 453 136 1,575 1,009 561 1.18 .64 $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ 42,999 $ 9,517 $ 39,279 $ 9,242 $ 35,697 $ 8,708 $ 33,012 $ 8,738 $ 31,019 $ 8,504 Revenues by Geographic Segment 2001 75% 9% Australasia United States 16% United Kingdom and Europe 5

  • Page 8
    ... | Newspapers | Magazines & Inserts | Book Publishing | Other The News Corporation Limited Chief Executive's Review There is no greater measure of a person or a company than the ability to grow stronger in the face of adversity. In fiscal 2001, News Corporation encountered worldwide challenges...

  • Page 9
    ... film library. In fiscal 2001, Twentieth Century Fox Home Entertainment achieved US$1 billion in net sales for the first time ever. These DVD and video sales provide a steady revenue stream that counters much of the famous volatility of the movie business. Our expanding Twentieth Century Fox...

  • Page 10
    ... acquisitions and divestments that better equip the Company to compete in the future. I n May 2001, the Company acquired an additional 17 percent interest in Gemstar-TV Guide International from Liberty Media, making News Corporation the largest shareholder in the world's leading provider of...

  • Page 11
    ... in the U.S. Fox Television Stations will own two stations in New York, Los Angeles, Dallas, Houston, Washington, Phoenix and Minneapolis, enabling significant operational cost savings and additional opportunities for advertisers. Also following the close of the fiscal year, News Corporation and our...

  • Page 12
    Our leading film and television studios reach hundreds of millions of people around the world. 10

  • Page 13
    ... primetime television than any other studio. Encompassing both the film and television production industries, the segment's hit movies and top-rated TV series highlighted the strength of News Corporation's creative content in fiscal 2001. Fox Filmed Entertainment released 21 motion pictures during...

  • Page 14
    News Corporation's television studios produce more shows for primetime network television than any other company. An increasingly important - and reliably profitable - part of the Company's film operations is its video and DVD business, Twentieth Century Fox Home Entertainment. In fiscal 2001, ...

  • Page 15
    13

  • Page 16
    Our television platforms three-quarters of the earth's population. reach 14

  • Page 17
    ... television, and its broadcast network and station group give News Corporation an increasingly powerful television presence in the U.S. At the FOX Broadcasting Company, fiscal 2001 marked the most competitive season in the network's history. FOX finished a close second in the key demographic of...

  • Page 18
    ... the Company one of the strongest television station groups in the U.S. These new properties of the Fox Television Stations group - the most profitable of News Corporation's television businesses in fiscal 2001 - create duopolies in the nation's largest markets of New York and Los Angeles, resulting...

  • Page 19
    ...a broader choice to more viewers than ever before. STAR, News Corporation's pan-Asian television operation, enjoyed revenue growth exceeding 60 percent, driven by strong advertising gains throughout STAR's broadcast region and by the success of its programming in India. At the end of the fiscal year...

  • Page 20
    ...business but in the company's expansion into cable distribution and FM radio. In fiscal 2001, STAR made two landmark investments in Asia's cable industry. In September 2000, the company acquired 26 percent of Hathway Cable, India's second-largest cable network reaching 2.5 million homes. In May 2001...

  • Page 21
    .... In January 2001, the seventh annual Channel [V] Chinese Music Awards ceremony more than doubled its viewership over the year before, reaching an audience of nearly 90 million people. FOXTEL, Australia's leading pay TV operator and 25 percent owned by News Corporation, increased revenues and...

  • Page 22
    Our fast-growing cable operations reach more than 400 million subscribers. . 20

  • Page 23
    Filmed Entertainment | Television Cable Network Programming Newspapers | Magazines & Inserts | Book Publishing | Other The Company's cable properties have increased subscribers, ratings and revenue at an extraordinary pace. Cable Network Programming News Corporation's cable network operations ...

  • Page 24
    Fox News Channel beat CNN's ratings in five out of the last six months of the year. Fox Sports Net, the Company's 21 regional sports networks, continued to dominate the local sports television market. During the fiscal year, Fox Sports Net launched its increasingly popular Local Sports Report, ...

  • Page 25
    ... Fox Kids Network, a leading children's broadcast television network, which News Corporation agreed to acquire in full. The Company's world-famous Los Angeles Dodgers baseball team drew more than three million fans to Dodger Stadium for the fifth consecutive year and for the 15th time in its history...

  • Page 26
    Our newspapers reach more in more countries than those of any other English-language publisher. readers 24

  • Page 27
    ..., hundreds of mastheads and some 15,000 employees worldwide, News Corporation's newspaper business is unmatched by any other English-language publisher. In fiscal 2001, the Company's newspapers continued to excel in their markets despite challenging economic conditions. In the past year, 70...

  • Page 28
    ..., a new distance learning business focused on corporate education, won a number of substantial contracts in the financial services sector in China. News Limited's newspapers in Australia started fiscal 2001 with award-winning coverage of the Olympic Games in Sydney, an unprecedented team effort that...

  • Page 29
    ... its strong circulation figures, reinforcing its status as Adelaide's favorite publication. In New Zealand, News Corporation's 44.3 percent-owned Independent Newspapers Limited remained the country's leading newspaper publisher, increasing revenues and operating income, in local currency terms, as...

  • Page 30
    Filmed Entertainment | Television | Cable Network Programming | Newspapers Magazines & Inserts Book Publishing | Other Gemstar-TV Guide is a global leader in television entertainment technology and media. Magazines and Inserts In fiscal 2001, News Corporation became the largest shareholder in ...

  • Page 31
    Our magazines, newspaper inserts and in-store coupons reach tens of millions of consumers every week. 29

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  • Page 33
    ... decline among home and lifestyle magazines, and was nominated for four Australian Magazine Publishers awards. In the U.S., the Company's political magazine, T he Weekly Standard , increased its advertising revenue by almost 50 percent as its circulation continued to rise. TV Guide Interactive...

  • Page 34
    Our award-winning reach more than 150 million readers a year. books 32

  • Page 35
    ... profitability and topped bestseller lists worldwide. Book Publishing HarperCollins Publishers, News Corporation's book publishing division, is an undisputed industry leader and both a literary and financial success. In fiscal 2001, HarperCollins achieved record profitability and topped bestseller...

  • Page 36
    ... had a record 93 titles on the New York Times bestseller lists, 10 of them reaching the number one position. Zondervan, HarperCollins' Evangelical Christian book division, published the top five bestselling Bibles in the Christian Book Association for the year 2000. In fiscal 2001, for the...

  • Page 37
    ... developer of sports betting software for digital TV, the Internet and mobile technologies. During the fiscal year the company opened new offices in New York, Berlin and Bangalore as well as launching a foreign enterprise office in Beijing in May 2001. NDS also forged strategic agreements with...

  • Page 38
    ...-to-air programming in Sydney. Long-term pay TV agreements were secured with Fox Sports in Australia and with Sky Television in New Zealand. Meanwhile, the News Corp Music Group concluded licensing agreements in fiscal 2001 with Sony Music Entertainment in Japan and Sony Music Asia that expanded the...

  • Page 39
    The News Corporation Limited Table of Contents Page Statement of Corporate Governance Directors' Report Concise Financial Report Discussion and Analysis Statement of Financial Performance Statement of Financial Position Statement of Cash Flows Notes to the Concise Financial Report Directors' ...

  • Page 40
    The News Corporation Limited

  • Page 41
    Annual Report 2001 Statement of Corporate Governance for the year ended 30 June, 2001 Board of Directors The Board of Directors (the "Board") oversees the business of The News Corporation Limited and its controlled entities ("the Company"). To assist in the execution of its responsibilities, the ...

  • Page 42
    ... internal audit's activities; • to review the adequacy of internal controls; and • to advise the Board on any other requested issues. The Audit Committee invites senior executives of the Company, including the Chief Financial Officer and Group General Counsel, to participate in its meetings. 40

  • Page 43
    ... Vice President, Group General Counsel, The News Corporation Limited Chairman and Chief Executive Officer, Fox Television Stations The primary objectives of the Executive Committee are to strengthen the co-ordination and profitability of the Company's activities. For purposes of advising the Board...

  • Page 44
    ...essential in order to maximise the Company's return on investment for audit services. Ethical Standards At a Board meeting on 27 February 1996, the Board adopted "Standards of Business Conduct". The Standards confirm the Company's policy to conduct its affairs in compliance with all applicable laws...

  • Page 45
    ...New York, New Zealand and London; and notices and explanatory memoranda of extraordinary and general meetings. * * Shareholders may raise matters of concern at general meetings and have the ultimate control in corporate governance as they vote for the members of the Board, the Company's governing...

  • Page 46
    ... 1996. Director of China Netcom Corporation (Hong Kong) Limited since February 2001. Director of Gemstar-TV Guide International, Inc. since June 2001. Member of the Nominating and Share Option Committees of The News Corporation Limited. G C Bible (Age 64). Chairman and Chief Executive Officer of...

  • Page 47
    ...D F DeVoe (Age 54). Deputy Finance Director of The News Corporation Limited from 1985 to 1990. Chief Financial Officer and Finance Director since 1990. Director of Fox Entertainment Group, Inc. since 1991, Senior Executive Vice President and Chief Financial Officer since 1998. Director of STAR Group...

  • Page 48
    .... Non-executive Director of NDS Group plc since 1996. Director, Senior Executive Vice President and General Counsel of Fox Entertainment Group, Inc. since 1998. Director of Sky Global Networks, Inc. since 1998. Member of the Nominating and Share Option Committees of The News Corporation Limited. 46

  • Page 49
    Annual Report 2001 Directors' Report (Continued) Directors' Meetings The following Directors were in office during the financial year, and attended the following number of Board meetings: Meetings of Committees Nominating Audit 1 4 Number of meetings held: Number of meetings attended: K R ...

  • Page 50
    ...75 cents per preferred limited voting ordinary share ("preferred share") on the issued shares at 7 September, 2001, the entitlement date for the proposed final dividend. The final dividend will absorb $142 million subject to the operation of the Company's Dividend Reinvestment Plan. A discount of 10...

  • Page 51
    Annual Report 2001 Directors' Report (Continued) Review of Operations A review of the operations of the Company during the financial year and of the results of those operations is detailed in the front section of this Annual Report. State of Affairs of the Company during the Financial Year The ...

  • Page 52
    ...Limited Directors' Report (Continued) Directors and Senior Executives' Remuneration Non-executive Directors Fees paid to Non-executive Directors on the Board take into consideration the level of fees paid to Board members of other multinational corporations, the size and complexity of the Company...

  • Page 53
    Annual Report 2001 Directors' Report (Continued) Directors and Senior Executives' Remuneration (Continued) The table below sets out the fees and other amounts paid by the Company to Non-executive Directors of the Company for the year ended 30 June 2001: Name Fees Other Amounts [1] US$000 Value of...

  • Page 54
    The News Corporation Limited Directors' Report (Continued) Directors and Senior Executives' Remuneration (continued) [1] Other amounts comprise contributions to the Company pension plans and the cost of limited non-cash benefits in addition to salary for executives in line with local country ...

  • Page 55
    Annual Report 2001 Directors' Report (Continued) Rounding of Amounts The parent entity is a company of the kind specified in Australian Securities and Investments Commission class order 98/0100. In accordance with that class order, amounts in this report and the accompanying Concise Financial ...

  • Page 56
    ... Concise Financial Report The financial statements and disclosures in the Concise Financial Report on pages 56 to 63 have been derived from The News Corporation Limited's Full Financial Report for the year ended 30 June, 2001. A more comprehensive understanding of the Company's financial performance...

  • Page 57
    ... and equipment, the largest project being at the New York Post; • Cash provided by financing activities was $1.2 billion, driven by the issuance of Liquid Yield Option Notes due February 2021, raising $1.5 billion; and • The weakening of the Australian dollar increased reported cash on hand by...

  • Page 58
    The News Corporation Limited Statement of Financial Performance for the year ended 30 June, 2001 Consolidated 2001 Note A$ million 2000 Sales revenue Operating expenses Selling, general and administrative expenses Depreciation and amortisation Operating income Net (loss) from associated entities ...

  • Page 59
    Annual Report 2001 Statement of Financial Position as at 30 June, 2001 Consolidated 2001 Note A$ million 2000 Assets Current Assets Cash Receivables ... Publishing rights, titles and television licences Goodwill Tax assets Other Total Non-Current Assets Total Assets Liabilities and Shareholders'...

  • Page 60
    ... News Corporation Limited Statement of Cash Flows for the year ended 30 June, 2001 Consolidated 2001 A$ million 2000 Operating activity Net profit (loss) attributable to members of the parent entity Adjustment for non-cash and non-operating activities: Associated entity earnings net of dividends...

  • Page 61
    ... with the Corporations Act (2001), Accounting Standard AASB 1039 "Concise Financial Reports" and other mandatory professional reporting requirements. The financial statements and specific disclosures have been derived from The News Corporation Limited's Full Financial Report for the financial...

  • Page 62
    The News Corporation Limited Notes to and Forming Part of the Concise Financial Report (Continued) Consolidated 2001 Note A$ million 2000 Note 2 Industry and geographic segment data (continued) By industry (continued) Operating income Filmed entertainment Television Cable network programming ...

  • Page 63
    Annual Report 2001 Notes to and Forming Part of the Concise Financial Report (Continued) Consolidated 2001 Note A$ million 2000 Note 3 Dividends Dividends provided for or paid during the year: Class of Shares Ordinary Ordinary Ordinary Preferred limited voting ordinary Preferred limited voting ...

  • Page 64
    ... the production and distribution of films whereby marketing and certain development costs, previously capitalised and expensed over time, are now expensed as incurred. This change in accounting policy provides better comparability of the Company's results against its competitors and has also ensured...

  • Page 65
    Annual Report 2001 Notes to and Forming Part of the Concise Financial Report (Continued) Note 8 Subsequent events The Company and Liberty Media Corporation ("Liberty") at 30 June, 2001, each owned 50% of Fox Sports International. On 15 July, 2001, under a pre-existing option, Liberty exercised ...

  • Page 66
    The News Corporation Limited Directors' Declaration for the year ended 30 June, 2001 The Directors of The News Corporation Limited declare that: a) the Concise Financial Report set out on pages 54 to 63 complies with Accounting Standard AASB 1039 "Concise Financial Reports"; and b) has been ...

  • Page 67
    ... News Corporation Limited for the financial year ended 30 June, 2001 as set out on pages 54 to 64, in order to express an opinion on it to the members of the Company. The Company's directors are responsible for the concise financial report. Our audit has been conducted in accordance with Australian...

  • Page 68
    The News Corporation Limited Shareholder Information as at 16 August, 2001 Corporate Ownership - Ordinary Shares Number of ordinary shareholders Voting rights On show of hands - one vote for each member On poll - one vote for each share held Distribution of shareholding 1 - 1,000 1,001 - 5,000 5,...

  • Page 69
    Annual Report 2001 Shareholder Information as at 16 August, 2001 (Continued) Corporate Ownership - Preferred Limited Voting Ordinary Shares Number of preferred limited voting ordinary shareholders Voting rights - preferred limited voting ordinary shares do not have voting rights except: 18,170 ...

  • Page 70
    ... Chase Carey President and Chief Executive Officer Sky Global Networks Paul Carlucci Chairman and Chief Executive Officer News America Marketing Peter Chernin President and Chief Operating Officer News Corporation David F. DeVoe Senior Executive Vice President and Chief Financial Officer News...

  • Page 71
    ...com/public/ir/index Financial Statements The financial statements in this Concise Annual Report have come from the Group's full 2001 Financial Report. A copy of the Full Financial Report is available free of charge upon request from the addresses above. The News Corporation Limited Notice of Meeting...

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