Twenty-First Century Fox 2003 Annual Report Download - page 74

The News Corporation Limited72
Notes to and forming part of the Concise Financial Report (continued)
FOR THE YEAR ENDED 30 JUNE, 2003
➤ NOTE 6Other items (continued)
(j) As a result of the downturn in sports related advertising during fiscal 2002, together with the reduction in long term forecast
advertising growth rates, in accordance with the Group’s accounting policies, the Directors re-evaluated the recoverability of the
costs of certain sports contracts, principally in the United States. Accordingly, the Group 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).
(k) Stream was a satellite pay-TV provider in Italy. During fiscal 2002, the Group wrote down its investment in Stream by $590
million to an amount considered by the Directors to be the recoverable amount at 30 June, 2002.
(l) During fiscal 2002, given the financial uncertainties surrounding KirchPayTV and its parent Kirch Gruppe, the Group recognised
a charge of $460 million to fully write down its investment in KirchMedia.
(m) In May 2001, the Group became aware of serious financial problems at One.Tel Limited, an Australian telecommunications
company in which the Group owns approximately 24% of the outstanding equity. Upon completion of One.Tel’s auditors’ review
of its 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.
(n) As a result of the restructure of the Group’s investment in Healtheon/WebMD (“WebMD”) in fiscal 2001, the Group 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 stock the Group 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 Group recorded a non-cash
charge of $426 million related to this restructuring. The Group subsequently sold its interest in THN for consideration valued at
$433 million.
(o) During fiscal 2001, the Group wrote down certain of its non-current assets, in particular its investment in Zee Telefilms Limited
(“ZTL”) and certain new media assets. During fiscal 2002, the Group wrote down certain non-current assets, mainly interactive,
media and sporting assets, to their recoverable amount. The Group also disposed of various non-current assets for an aggregate
consideration of $96 million. During that year the Group also settled certain liabilities owing to MCI Communications
Corporation, including accrued interest, of US$1,017 million ($1,926 million) for US$930 million ($1,760 million), consisting
of 121.2 million preferred limited voting ordinary shares valued at US$680 million ($1,288 million) and US$250 million ($473
million) in cash. The Group recognised a gain of $166 million on the settlement. During fiscal 2003, the Group disposed of
certain interactive and music related assets for aggregate consideration of $175 million, and also wrote down certain other
sporting and television assets. The 30 June, 2003 amount also includes a provision for an arbitration award that was issued in
favour of PanAmSat International Systems against the Group. The Group disagrees with the findings of fact and the conclusions
of law reached by the arbitrator and, pursuant to the terms of the arbitration agreement between the two parties, intends to
appeal the award.