Twenty-First Century Fox 2003 Annual Report Download - page 60

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The News Corporation Limited58
Discussion and Analysis of the Financial Statements
FOR THE YEAR ENDED 30 JUNE, 2003
Discussion and Analysis (2003 to 2002 fiscal periods)
Statement of Financial Performance
Operating income for the year ended 30 June, 2003 was $4.4 billion, an increase of $0.8 billion, or 23% over the previous year.
This result was driven by record performances from the Filmed Entertainment and Cable Network Programming segments as well
as STAR and the Television Station businesses. The Filmed Entertainment segment was primarily driven by the worldwide home
entertainment performance of Ice Age, Shallow Hall, and Behind Enemy Lines combined with a string of successful theatrical
releases during the year including X2: X-Men United, Daredevil, Like Mike, Drumline, Just Married and Phone Booth. The success
of Cable Network Programming reflects strong revenue growth across all of the Group’s primary cable television channels, slightly
offset by the impact of war coverage at Fox News and higher programming and marketing costs at FX. The Television segment gains
primarily reflect increases in primetime ratings, improved pricing and strong advertising market growth in conjunction with market
share gains. These positives were offset by reduced operating income levels reported by the Newspaper segment, resulting primarily
from the impact of the discounted pricing initiative in place for the majority of the year at The Sun in the UK.
Net losses from associated entities for the year improved to $89 million from $1,434 million in 2002. These amounts comprise
operating losses from associated entities of $159 million and $314 million for the years ended 30 June, 2003 and 2002
respectively, combined with Other items of $70 million gain in 2003 and $1,120 million expense in 2002. The reduction in
operating losses is primarily due to increased contributions from British Sky Broadcasting Group plc (“BSkyB”) and National
Geographic Channel (US) as well as the favourable impact of foreign currency fluctuations in certain Latin American pay television
platforms. Associated entities’ Other items for the year ended 30 June, 2003 primarily relate to the Group’s share of asset sale
gains recognised by Independent Newspapers Limited, offset by a write down in the value of certain assets of Sky Multi-Country
Partners, a Latin American pay television platform.
The Group recorded a net loss from Other items before tax of $378 million in 2003. This comprised a further write down in the
Group’s carrying value of its investment in Gemstar – TV Guide International Inc. (“Gemstar”), losses incurred following early
extinguishment of debt and charges against the carrying value of certain non-current assets. These expenses were offset by the
gain realised following the issuance of additional common stock by Fox Entertainment Group.
The net profit attributable to members of the parent entity was $1.8 billion (2002 - $12 billion loss).