Twenty-First Century Fox 2002 Annual Report Download - page 66

NOTE 6
Other Items (continued)
(e) In June, 2001, the Company sold its 31% interest in The Golf Channel for total consideration of approximately $695 million, of
which $676 million was received in cash during fiscal 2001. The Company recorded a gain on the sale of $476 million in relation
to this transaction.
(f) As a result of the restructure of the Company’s investment in Healtheon/WebMD (“WebMD”), the Company swapped out of its
preferred stock investment and recognised an impairment loss on its remaining common stock interest in WebMD. In exchange
for the preferred shares the Company received the ownership interest in The Health Network (“THN”), warrants to purchase
additional common stock in WebMD, a reduction in its obligation to provide future media services to and license content from
WebMD and the elimination of future funding commitments to an international joint venture. The reduction in the carrying value
of the Company’s obligations are non-cash and not reflected in the Statement of Cash Flows. The Company subsequently sold its
interest in THN for consideration valued at $433 million.
(g) In May, 2001, the Company became aware of serious financial problems at One.Tel Limited, an Australian telecommunications
company in which the Company owns approximately 24% of the outstanding equity. Upon completion of One.Tel’s auditors’
review of its current financial condition in late May, 2001, One.Tel was placed in administration. The carrying value of the
investment in One.Tel has been fully written down due to the liquidation of its operations.
(h) During the year, the Company wrote down its investment in Stream S.p.A. by $590 million to an amount considered by the
Directors to be the recoverable amount at 30 June, 2002. The Company will continue to monitor this investment and as
circumstances change will assess the future recoverability of its carrying value.
(i) Given the financial uncertainties surrounding KirchPayTV and its parent Kirch Gruppe, the Company has recognised a charge of
$460 million to fully write down its investment in KirchMedia.
(j) As at 30 June, 2002, the Company owned approximately 175 million shares in Gemstar-TV Guide and recorded a charge to reflect
the permanent impairment in carrying value of $11.1 billion. The charge was determined by reference to Gemstar’s share price at
28 June, 2002 of US$5.39 per share.
(k) As a result of the downturn in sports related advertising during the year, together with the reduction in long term forecast
advertising growth rates, in accordance with the Company’s accounting policies, the Directors reevaluated the recoverability of
the costs of certain sports contracts, principally in the United States. Accordingly, the Company recorded a one-time other
expense of $1,861 million relating to National Football League ($753 million), NASCAR ($578 million), Major League Baseball
($437 million) and non-US Cricket programming rights ($93 million).
(l) During the year, the Company extinguished a substantial portion of debt owing on 10 1/8% Senior Debentures due October,
2012 and on 8 5/8% Senior Notes due 2003. The Company recognised a loss of $64 million and $47 million respectively due to
the early extinguishment of debt. In June, 2002 the Company and Fox Sports Networks, LLC, an indirect subsidiary of the
Company, irrevocably called for the redemption of all outstanding 8.875% Senior Notes and the 9.75% Senior Discounted Notes.
The Company recognised a loss of $80 million on the irrevocable early extinguishment of the debt.
(m)During 2001 the Company wrote down certain of its non-current assets, in particular its investment in Zee Telefilms and certain
new media assets. During 2002, the Company further wrote down certain non-current assets, mainly interactive, media and
sporting assets, to their recoverable amount. During 2002, the Company also disposed of various non-current assets for an
aggregate consideration of $96 million (2001 $880 million). During the year the Company also settled certain liabilities owing
to MCI Communications Corporation (“MCI”), including accrued interest, of US$1,017 million for US$930 million, consisting
of 121.2 million preferred limited voting ordinary shares valued at US$680 million and US$250 million in cash. The Company
recognised a gain of $166 million on the settlement.
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Notes to and forming part of the Concise Financial Report (Continued)
FOR THE YEAR ENDED 30 JUNE, 2002
THE NEWS CORPORATION LIMITED
Annual Report 2002