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NEWSCORPAnnual Report  
20
08

Table of contents

  • Page 1
    NewsCorp Annual report 20 08

  • Page 2
    ACROS S THE G LOB E , A BILLION TIMES A DAY 

  • Page 3
    WE CAPTURE IMAGINATIONS AND OP E N MINDS 2 NewsCorp 2008 Annual report

  • Page 4
    

  • Page 5
     NewsCorp 2008 Annual report

  • Page 6
    TO NE W IDE A S AND NE W OU TLOOK S NEW WAYS OF PERCEIVING THE WOR LD AROU ND U S 

  • Page 7
    IN MORE THAN 100 COUNTRIES AND 30 L ANGUAGES  NewsCorp 2008 Annual report

  • Page 8
    ACROSS SIX CONTINENTS 

  • Page 9
    THROUGH FILM, TELEVISION, CABLE, SATELLITE, 8 NewsCorp 2008 Annual report

  • Page 10
    NEWSPAPERS, MAGAZINES, BOOKS AND DIGITAL MEDIA 

  • Page 11
    THE 64,000 PASSIONATE INDIVIDUALS WHO MAKE UP THE WORLD'S MOST INTERNATIONAL MEDIA COMPANY ARE DEDICATED TO: 0 NewsCorp 2008 Annual report

  • Page 12
    > Informing With A Purpose > Entertaining With A Passion > Connecting The World > Challenging With A Mission 

  • Page 13
    " WE HAVE AND MUST CONTINUE TO CREATE CONTENT THAT CONSUMERS INCREASINGLY WANT ACROSS THE WHOLE SPECTRUM OF MEDIA." 2 NewsCorp 2008 Annual report

  • Page 14
    ... year include SKY Italia, which nearly doubled its operating income from a year ago to $419 million, and Cable Network Programming, where operating income was up 16% - a huge achievement given the tremendous startup costs for the FOX Business Network and the Big Ten Network. In Filmed Entertainment...

  • Page 15
    ...O C H the social networking of MySpace or the customized financial intelligence provided by Dow Jones, which, in line with our core strategy, are both global and digital in their missions. There is no shortage of newspaper naysaying, but The Wall Street Journal gives us an international platform to...

  • Page 16
    ... company on earth. The international network of related businesses that we are building, businesses which are far more than the sum of their parts, will be a platform for future growth and for stockholder returns. Every day, we reach more than a billion people through television, films, books...

  • Page 17
    INFORMING WITH A PURPOSE  NewsCorp 2008 Annual report

  • Page 18
    We believe in free thinking. In pushing the debate. Breaking the story. Exposing the complexity of the world. News Corporation informs with a purpose across all media. To rouse humanity to participate in the discussion. To play a part in shaping the issues that define our time. And our future. 

  • Page 19
    INFORMING WITH A PURPOSE PROVIDING OUR GLOBAL AUDIENCE WITH INFORMATION AND TOOLS TO HELP THEM UNDERSTAND THE WORLD AND MAKE INFORMED DECISIONS IS ONE OF THE CORNERSTONES OF WHO WE ARE AS A COMPANY. 8 NewsCorp 2008 Annual report

  • Page 20
    .... Our digital information services, led by the Dow Jones Enterprise Media Group, meet the needs of financial professionals, corporate officers, communications executives and individual investors across the globe with industry-leading real-time news and premium content. News International Throughout...

  • Page 21
    ...outsells the combined sales of its direct rivals. thelondonpaper was distributed free to more than 500,000 readers each weekday in London last year, achieving a stronger profile of young, upmarket readers than any other U.K. national newspaper. 20 NewsCorp 2008 Annual report > > Times Online drew...

  • Page 22
    ... million national, metropolitan and regional newspapers each week in Australia, reaching 9.4 million readers each day. We produce the leading newspaper in every major Australian city. News Limited's suburban papers beat the competition in advertising sales and circulation across the country in 2008...

  • Page 23
    INFORMING WITH A PURPOSE New York Post The New York Post, our mass circulation New York City metropolitan morning newspaper, is published seven days a week and had an average weekday circulation of 680,000 last year, exceeding market averages for reader education level, employment and income, with ...

  • Page 24
    ... continued to expand the subscription-free area of wsj.com, which includes videos, blogs and news stories. Overall, wsj.com traffic is up nearly 90 percent since our acquisition of Dow Jones. The Wall Street Journal Digital Network, which includes wsj.com, Barrons.com, MarketWatch.com and AllThingsD...

  • Page 25
    ..., HarperCollins Children's Books had the greatest number of bestsellers on the Times list. Trade industry magazine Book Business named HarperCollins "Innovator of the Year" in 2008 for its digital content, distribution, marketing and audience-building initiatives. The publisher launched a "Browse...

  • Page 26
    ...news and financial information from around the world. FoX News Channel FOX News Channel was once again the number one cable news network in Total Viewers and Adults 25-54 in the U.S. last year, both in total day and primetime programming, outpacing all competitors with our unique brand of reporting...

  • Page 27
    ... our commitment to locally produced news programming. Fox Television Stations achieved record market share growth in 2008, with our stations ranking number one in advertising revenue across all of our markets. Both our 7 - 9 a.m. morning news shows and our latenight news shows ranked in the top...

  • Page 28
    .... The pay-TV platform launched 13 new channels last year and substantially increased its subscriber base. equity Investments Sky News, BSkyB's 24-hour news channel, won the Royal Television Society News Channel of the Year award in 2008 for its comprehensive news coverage. Sky News was available to...

  • Page 29
    ENTERTAINING WITH A PASSION 28 NewsCorp 2008 Annual report

  • Page 30
    ...relentless spirit not just to succeed, but to mAtter. At News Corporation, we've mastered the art of nurturing the creative process to... harness this passion. To push ideas forward and make them resonate with the world's audiences...

  • Page 31
    ...AND ENTERTAINS IS AT THE CORE OF EVERYTHING WE DO, AND OUR OUTSTANDING FINANCIAL RESULTS LAST YEAR SPOKE TO THE INTELLIGENT AND FORWARD-THINKING STEWARDSHIP OF OUR MOTION PICTURE AND TELEVISION STUDIOS, AS WELL AS OUR GLOBAL BROADCAST, CABLE AND SATELLITE NETWORKS. 0 NewsCorp 2008 Annual report

  • Page 32
    ...> Twentieth Century Fox The Simpsons Movie was a global blockbuster, grossing $527 million at the box office and becoming one of the top-grossing films of all time. Blue sky studios The classic Dr. Seuss tale, Horton Hears a Who, became the latest hit computer animated film from Blue Sky Studios...

  • Page 33
    ...E RTA I N I N G W I T H A PA S S I O N > What Happens in Vegas teamed Fox searchlight Fox Searchlight's low-budget Juno was the rare combination of critical success and box-office winner, grossing $230 million worldwide and winning an Academy Award® for best original screenplay. Cameron Diaz and...

  • Page 34
    ...-office grossing film of all time, Titanic, as well as The Sound of Music, Star Wars and The Mary Tyler Moore Show. Twentieth Century Fox Television TCFTV produces entertainment for our own FOX Broadcasting Company, as well as the three other major U.S. broadcast networks and several cable networks...

  • Page 35
    ... the network's ratings success by appealing to the demographic that advertisers seek to reach most often: Adults 18-49.  NewsCorp 2008 Annual report > Last year, major advertisers continued to see the power of broadcast television because of its enormous reach: the popularity of FOX programming...

  • Page 36
    ... largest audience in Super Bowl history. The broadcast was the most-watched program in television history, with almost 150 million viewers. FOX Sports also led all broadcast networks with five Sports Emmy Awards® - including outstanding sports series for NASCAR on FOX, bringing the total number of...

  • Page 37
    ...in India.  NewsCorp 2008 Annual report > STAR broadcasts the number one Chinese movie channel in Taiwan, Hong Kong, the Philippines and Singapore. We launched a North American version, Chinese Movies 2, in 2008, which is broadcast to Chinese-speaking audiences in both North America and Asia, to...

  • Page 38
    ... and ad sales market share. FIC enjoys some of the highest margins in the international cable channel industry. > FIC reaches more than 260 million subscribers in 29 languages in Europe, Latin America, Asia and Africa, primarily under the FOX and National Geographic brands. The network also...

  • Page 39
    ... in the U.S. 8 NewsCorp 2008 Annual report > > FUeL TV FUEL TV rode a global wave of interest in surf and action sports culture last year and the network's programming was available in more than 100 countries. National Geographic Channel National Geographic Channel's (NGC) ad sales were up 22...

  • Page 40
    ...turnover rates of any pay-TV platform in the world last year. sKy Italia SKY Italia continued to draw increasing numbers of Italian audiences with its broad mix of news, sports, newly released movies and original programming, which we introduced in 2008. The pay-TV platform's more than 170 channels...

  • Page 41
    CONNECTING THE WORLD 0 NewsCorp 2008 Annual report

  • Page 42
    .... But no matter how many technologies we develop, people at heart still want to feel the same thing: A sense of belonging. To feel a part of something larger. News Corporation's job is to deliver on the promise this great connection holds. To find new and exciting ways to bring people together, to...

  • Page 43
    ... ADVANCES. INSTEAD, WE WORK TO SHAPE THE FUTURE OF DIGITAL MEDIA. NEWS CORPORATION CONTINUALLY ENHANCES, CREATES AND INVESTS IN OUR DIGITAL CAPABILITIES, ENSURING THAT OUR CONSUMERS - AND OUR OPERATIONS - ARE CONNECTED SEAMLESSLY TO EACH OTHER AND TO THE WORLD. 2 NewsCorp 2008 Annual report

  • Page 44
    ... and environmental initiatives. MySpace is truly a global community, with an international network of 29 fully localized sites - 9 of which were launched in 2008 - available in 15 different languages. To reach even more of the world, we opened the MySpace platform to third-party developers last year...

  • Page 45
    ... with Twentieth Century Fox to create and market a unique mobile identity for The Simpsons Movie film and its characters. Its "Spider Pig" ringtone was a bestseller. News Digital Media News Digital Media (NDM) encompasses many of our Australian sites, including Career.One.com.au, carsguide.com.au...

  • Page 46
    Cable Network programming FoX News Mobile > FoX Business Mobile FoX Business Mobile Magazines and Inserts News America Marketing Group Many products and services were placed under its successful SmartSource® brand. NAM reached approximately 150 million U.S. and Canadian consumers a week in 2008. ...

  • Page 47
    CHALLENGING WITH A MISSION  NewsCorp 2008 Annual report

  • Page 48
    ...facing our planet, we realize that It's not enough to manage our business well. It's not enough to turn a healthy profit. It's not even enough to be number one in our sector. We must challenge ourselves and the billions we reach to tackle these global issues. To think and understand. But most of all...

  • Page 49
    ... OUR COMMITMENT TO HELP SOLVE THE WORLD'S CLIMATE PROBLEM LAST YEAR WITH IMPORTANT STEPS TOWARD OUR BOLD AGENDA: TO BECOME THE WORLD'S FIRST CARBON NEUTRAL GLOBAL MEDIA COMPANY BY 2010. A Who's Guide To Saving Our Planet For Who's Of All Shapes and Sizes! 8 NewsCorp 2008 Annual report

  • Page 50
    ... Hong Kong headquarters, saving more than 61 tons of carbon dioxide equivalent per year. National Geographic Channel launched Preserve Our Planet - an on-air and consumer marketing initiative dedicated to empowering viewers to take action on environmental issues. In 2008, News International became...

  • Page 51
    0 NewsCorp 2008 Annual report

  • Page 52
    ...the Company's Class B common stock, par value $0.01 per share ("Class B Common Stock") valued at approximately $1.0 billion and the assumption of approximately $400 million of debt. (3) Fiscal 2004 results include the sale of the Los Angeles Dodgers, Dodger Stadium and the team's training facilities...

  • Page 53
    ... network), the broadcasting of network programming in the United States and the development, production and broadcasting of television programming in Asia. ‰ Cable Network Programming, which principally consists of the production and licensing of programming distributed through cable television...

  • Page 54
    ... of market acceptance, with the top rated programs commanding the highest advertising prices. FOX and MyNetworkTV compete for audience, advertising revenues and programming with other broadcast networks, such as CBS, ABC, NBC and The CW, independent television stations, cable program services...

  • Page 55
    ... related to improving the market visibility and awareness of the broadcaster or cable network and its programming. Additional expenses include sales commissions paid to the in-house advertising sales force, as well as salaries, employee benefits, rent and other routine overhead expenses. The Company...

  • Page 56
    ... lease costs, direct production, maintenance and installation expenses, salaries, employee benefits and other routine overhead. In June 2007, the Company announced its intention to explore strategic options for News Outdoor in connection with News Outdoor's continued development plans. The strategic...

  • Page 57
    NEWSCORP Management's Discussion and Analysis of Financial Condition and Results of Operations (continued) outstanding share of Dow Jones common stock was converted into the right to receive, at the election of the holder, either (x) $60.00 in cash or (y) 2.8681 Class B common units of Ruby Newco....

  • Page 58
    ... primarily due to incremental costs from acquisitions, the launch of new businesses, higher sports programming costs at the Television segment due to the broadcast of the Super Bowl which was not broadcast on FOX in fiscal 2007 and foreign exchange movements at the DBS and Newspapers and Information...

  • Page 59
    ... Satellite Television Holdings Limited (b) Termination of participation rights agreement (a) Impairment of cost based investments (b) Change in fair value of exchangeable securities Other Total Other, net 307 (18) $2,293 (a) See Note 3 to the Consolidated Financial Statements of News Corporation...

  • Page 60
    ... Entertainment Television Cable Network Programming Direct Broadcast Satellite Television Magazines and Inserts Newspapers and Information Services Book Publishing Other Total operating income ** not meaningful Filmed Entertainment (20% and 23% of the Company's consolidated revenues in fiscal 2008...

  • Page 61
    ... by increased sports programming costs due to the broadcast of the Super Bowl. Revenues for the fiscal year ended June 30, 2008 at the Company's international television operations increased as compared to fiscal 2007. The increase was primarily due to higher advertising revenues in India and higher...

  • Page 62
    ...and other distributors, the cost of equipment sold directly by SKY Italia to subscribers and the costs related to installation and acquisition advertising, net of any upfront activation fee. SKY Italia excludes the value of equipment capitalized under SKY Italia's equipment lease program, as well as...

  • Page 63
    ... sports programming rights at the DBS, Cable Network Programming, Television and Other segments. The increase in operating expenses was also due to higher amortization of production and participation costs and higher home entertainment manufacturing and marketing expenses at the Filmed Entertainment...

  • Page 64
    ...(in millions) 2006 Gain on sale of Sky Brasil (a) Gain on sale of Phoenix Satellite Television Holdings Limited Termination of participation rights agreement (b) Gain on sale of Innova (a) Gain on sale of China Netcom Group Corporation (a) Impairment of cost based investments Other Total Other, net...

  • Page 65
    ... (loss): Filmed Entertainment Television Cable Network Programming Direct Broadcast Satellite Television Magazines and Inserts Newspapers and Information Services Book Publishing Other Total operating income ** not meaningful Filmed Entertainment (23% and 25% of the Company's consolidated revenues...

  • Page 66
    ... to higher advertising revenues in India and higher subscription revenues. Operating income for the Company's international television operations decreased for the fiscal year ended June 30, 2007 as compared to fiscal 2006, primarily due to higher programming costs. Cable Network Programming (13% of...

  • Page 67
    ...the more popular teams from the competition, which resulted in matches among less well-known teams, significantly reducing the Company's advertising and sponsorship revenues. Also contributing to the decrease was higher employee costs and higher costs related to Internet initiatives. The decrease in...

  • Page 68
    ... June 30, 2008 as compared to fiscal 2007. The increase in the Television segment was due to higher receipts from the broadcast of the Super Bowl, which was not broadcast on FOX in fiscal 2007, and lower payments for programming. The increase at the Cable Network Programming segment reflects higher...

  • Page 69
    ... Class A Common Stock and $0.05 per share for Class B Common Stock. This, together with the interim dividend of $0.06 per share of Class A Common Stock and a dividend of $0.05 per share of Class B Common Stock, constitutes the total dividend relating to fiscal 2007. 68 NEWSCORP 2008 Annual Report

  • Page 70
    ...year ended June 30, 2006. Ratings of the Public Debt The table below summarizes the Company's credit ratings as of June 30, 2008. Rating Agency Senior Debt Outlook Moody's S&P Baa 1 BBB+ Stable Stable Revolving Credit Agreement On May 23, 2007, News America Incorporated ("NAI"), a subsidiary of...

  • Page 71
    ... 2095. (b) News America Marketing Group ("NAMG"), a leading provider of in-store marketing products and services primarily to consumer packaged goods manufacturers, enters into agreements with retailers to occupy space for the display of point of sale advertising. (c) The Company's contract with...

  • Page 72
    ... cost of retiree medical benefits under the Company's pension plans. The Company expects its OPEB payments to approximate $17 million in fiscal 2009. See Note 16 to the Consolidated Financial Statements of News Corporation for further discussion of the Company's pension and OPEB plans. The Company...

  • Page 73
    ... film will be released. Management updates such estimates based on information available on the actual results of each film through its life cycle. License agreements for the broadcast of theatrical and television product in the broadcast network, syndicated television and cable television markets...

  • Page 74
    ... inputs, the use of published industry data that are based on subjective judgments about future advertising revenues in the markets where the Company owns television stations. This method also involves the use of management's judgment in estimating an appropriate discount rate reflecting the risk of...

  • Page 75
    ... after January 1, 2008. For financial reporting purposes, net periodic pension expense (income) is calculated based upon a number of actuarial assumptions, including a discount rate for plan obligations and an expected rate of return on plan assets. The Company considers current market conditions...

  • Page 76
    NEWSCORP Management's Discussion and Analysis of Financial Condition and Results of Operations (continued) Changes in net periodic pension expense may occur in the future due to changes in the Company's expected rate of return on plan assets and discount rate resulting from economic events. The ...

  • Page 77
    ... in quoted interest rates across all maturities, often referred to as a parallel shift in the yield curve, would be approximately $759 million at June 30, 2008. Stock Prices The Company has common stock investments in several publicly traded companies that are subject to market price volatility...

  • Page 78
    ... and Supplementary Data NEWS CORPORATION INDEX TO CONSOLIDATED FINANCIAL STATEMENTS 78 79 80 81 82 83 84 MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ON INTERNAL CONTROL OVER FINANCIAL REPORTING REPORT OF INDEPENDENT...

  • Page 79
    ... registered public accounting firm who audited and reported on the consolidated financial statements of News Corporation included in this report, has audited the Company's internal control over financial reporting. Their report appears on the following page. 78 NEWSCORP 2008 Annual Report

  • Page 80
    ..., effective internal control over financial reporting as of June 30, 2008, based on the COSO criteria. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of News Corporation as of June 30, 2008 and...

  • Page 81
    ... the valuation of certain acquired identifiable intangible assets, effective July 1, 2005. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), News Corporation's internal control over financial reporting as of June 30, 2008, based...

  • Page 82
    ... Income from continuing operations Class A Class B Net Income Class A Class B Diluted earnings per share: Income from continuing operations Class A Class B Net Income Class A Class B The accompanying notes are an integral part of these audited consolidated financial statements. $32,996 20,531 5,984...

  • Page 83
    ...,000 shares authorized, 798,520,953 shares and 986,520,953 shares issued and outstanding, net of 313,721,702 treasury shares at par at June 30, 2008 and 2007, respectively. The accompanying notes are an integral part of these audited consolidated financial statements. 82 NEWSCORP 2008 Annual Report

  • Page 84
    ... Proceeds from sale of investments, other non-current assets and business disposals Proceeds from disposition of discontinued operations Net cash used in investing activities Financing activities: Borrowings Repayment of borrowings Issuance of shares Repurchase of shares Dividends paid Other...

  • Page 85
    ... of year Total Stockholders' Equity Comprehensive Income: Net income Other comprehensive income, net of tax: Unrealized holding (losses) gains on securities Benefit plan adjustments Foreign currency translation adjustments Total other comprehensive income, net of tax Total comprehensive income The...

  • Page 86
    ...a Delaware corporation. News Corporation is a diversified global media company, which manages and reports its businesses in eight segments: Filmed Entertainment, which principally consists of the production and acquisition of live-action and animated motion pictures for distribution and licensing in...

  • Page 87
    ...63, "Financial Reporting by Broadcasters," costs incurred in acquiring program rights or producing programs for the Television, DBS and Cable Network Programming segments are capitalized and amortized over the license period or projected useful life of the programming. Program rights and the related...

  • Page 88
    ... intangible assets The Company has a significant amount of intangible assets, including goodwill, film and television libraries, Federal Communications Commission ("FCC") licenses, newspaper mastheads, distribution networks, publishing rights and other copyright products and trademarks. Goodwill is...

  • Page 89
    ... the recognition of revenue for such completed product is principally only dependent upon the commencement of the availability period for broadcast under the terms of the related licensing agreement. Television, Cable Network Programming and DBS: Advertising revenue is recognized as the commercials...

  • Page 90
    ... demand and acceptance of the Company's product. Based on this information, management reserves a percentage of each dollar of product sales that provide the customer with the right of return. Subscriber acquisition costs Subscriber acquisition costs in the DBS segment primarily consist of amounts...

  • Page 91
    ...") and Class B common stock, par value $0.01 per share ("Class B Common Stock"). The allocation between classes was based upon the two-class method. Under the two-class method, earnings per share for each class of common stock was allocated according to dividends declared and participation rights in...

  • Page 92
    ...in earnings unless specific hedge accounting criteria are met. The Company uses financial instruments designated as cash flow hedges to hedge its limited exposures to foreign currency exchange risks associated with the costs for producing films abroad. All cash flow hedges are recorded at fair value...

  • Page 93
    ... effective for fiscal years beginning after December 15, 2008. The Company will adopt FSP SFAS No. 142-3 beginning in the first quarter of fiscal 2010. This position will change the Company's determination of useful lives for intangible assets on a prospective basis. 92 NEWSCORP 2008 Annual Report

  • Page 94
    ... $200 million. As of June 30, 2008 approximately 7.2 million Class B common units of Ruby Newco had been converted into shares of Class A Common Stock. The Company believes that this acquisition will position it as a leader in the financial news and information market and will enhance its ability to...

  • Page 95
    ...2007, Fox Television Stations, Inc., a Delaware corporation and a wholly owned subsidiary of the Company and FoxCo Acquisition Sub, LLC, a Delaware limited liability company and an indirect, wholly owned subsidiary of Oak Hill Capital Partners III, L.P. ("Oak Hill Capital"), entered into a Stock and...

  • Page 96
    ... free-to-air broadcast television station in Turkey. The Company acquired its interest for approximately $103 million in cash plus acquisition related costs. In December 2006, NDS, an indirect majority owned subsidiary of the Company, acquired Jungo Limited ("Jungo"), a developer and supplier of...

  • Page 97
    ... amortization valuation model, assuming a 10% compounded annual growth rate and an 8% discount rate in fiscal 2008 and a 9% discount rate in fiscal 2007. The Company previously entered into an agreement with a direct response marketing company that provided the Company with participation rights if...

  • Page 98
    ... workforce that will be required as new printing presses and the new printing facilities come on line. As a result of this Program, the Company reduced its production workforce by approximately 65%, and, as of June 30, 2008, over 700 employees in the United Kingdom accepted severance agreements. The...

  • Page 99
    ... the following: 2008 (in millions) 2007 As of June 30, Programming rights Books, DVDs, paper and other merchandise Filmed entertainment costs: Films: Released (including acquired film libraries) Completed, not released In production In development or preproduction Television productions: Released...

  • Page 100
    ...Sky Network Television Ltd. The DIRECTV Group, Inc. (3) Gemstar-TV Guide International, Inc. China Network Systems (5) National Geographic Channel (US) (6) Other equity method investments Fair value of available-for-sale investments Other investments (4) U.K. DBS operator German pay-TV operator New...

  • Page 101
    NEWSCORP Notes to the Consolidated Financial Statements (continued) Equity Earnings of Affiliates The Company's share of the income of its equity affiliates is as follows: 2008 For the years ended June 30, 2007 (in millions) 2006 DBS equity affiliates Cable channel equity affiliates Other equity ...

  • Page 102
    ...ventures produce and distribute the National Geographic Channel in various international markets. The transaction increased the Company's interest in NGC International to 75% with National Geographic Television holding the remaining interest. In January 2007, National Geographic Television agreed to...

  • Page 103
    ... the six months ended December 31, 2007. However, DIRECTV is a separate reporting company whose financial statements are publicly available at www.sec.gov. Note 7 PROPERTY, PLANT AND EQUIPMENT Useful Lives As of June 30, 2008 (in millions) 2007 Land Buildings and leaseholds Machinery and equipment...

  • Page 104
    ... Company's intangible assets and related accumulated amortization are as follows: Weighted average useful lives As of June 30, 2008 (in millions) 2007 FCC licenses (1) Distribution networks Publishing rights & imprints Newspaper mastheads (2) Other Intangible assets not subject to amortization Film...

  • Page 105
    ... and disposals occur in the future and as purchase price allocations are finalized. Note 9 BORROWINGS Weighted average interest rate at June 30, 2008 Outstanding As of June 30, 2008 Due date (in millions) 2007 Description Bank Loans (a) Public Debt Senior notes issued under January 1993 indenture...

  • Page 106
    ...LYONs, which have been recorded at a discount, are being accreted using the effective interest rate method. (f) See Note 10-Exchangeable Securities Ratings of Public Debt The table below summarizes the Company's credit ratings as of June 30, 2008. Rating Agency Senior Debt Outlook Moody's Standard...

  • Page 107
    ... cash distributions are payable on the TOPrS at an annual rate of 5%. The TOPrS have a mandatory redemption date of November 12, 2016 or earlier to the extent of any redemption by NAI of any Subordinated Debentures or Warrants. The Company has the right to pay cash equal to the market value...

  • Page 108
    ... Rights Plan was approved by a vote of the Company's Class B stockholders at the Company's 2006 annual meeting of stockholders. On April 15, 2008, the Company entered into an amendment to the Rights Plan to amend the final expiration date of the rights issued pursuant to the Rights Plan (the "Rights...

  • Page 109
    ... Class B Common Stock constitute the total dividend relating to fiscal 2008. For the years ended June 30, 2008 2007 2006 Cash dividends paid per share Class A Class B $0.12 $ 0.11 $0.12 $0.10 $0.13 $0.13 Note 13 EQUITY BASED COMPENSATION News Corporation 2005 Long-Term Incentive Plan The Company...

  • Page 110
    ... the business unit's actual fiscal 2007 or 2008 operating profit fell within the performance goal range for that fiscal year, the executive received a percentage of his or her annualized base salary, ranging from 0% to 100%, in time-vested RSUs representing shares of our Class A Common Stock. The...

  • Page 111
    ... employee share ownership schemes in the United Kingdom and Ireland. These plans enable employees to enter into fixedterm savings contracts with independent financial institutions linked to an option for Class A Common Stock. The savings contracts can range from three to seven years with an average...

  • Page 112
    ... in the NDS Plans, however (with the exception of the employee share ownership schemes which are open to all), management determines to whom and how many stock options are granted. A summary of the NDS stock options (options in thousands): Fiscal 2008 Options Weighted average exercise price (in US...

  • Page 113
    ... no outstanding amounts due to or from Freud Communications. The Company has engaged Mrs. Wendi Murdoch, the wife of Mr. K.R. Murdoch, the Company's Chairman and Chief Executive Officer, to provide strategic advice for the development of the MySpace business in China. The fees paid to Mrs. Murdoch...

  • Page 114
    ... ordinary course of business, the Company enters into transactions with related parties, such as equity affiliates, to purchase and/or sell advertising, the sale of programming, administrative services and supplying digital technology and services for digital pay television platforms. The following...

  • Page 115
    ... 2095. (b) News America Marketing Group ("NAMG"), a leading provider of in-store marketing products and services primarily to consumer packaged goods manufacturers, enters into agreements with retailers to rent space for the display of point of service advertising. (c) The Company's contract with...

  • Page 116
    ... and its subsidiary Canalsatellite Digital, S.L., Spanish satellite broadcasters and customers of Canal+ Technologies SA (together, "Sogecable"), filed an action against NDS in the United States District Court for the Central District of California. Sogecable filed an amended complaint on October...

  • Page 117
    ... Financial Statements (continued) In November 2005, plaintiff in a derivative action captioned LeBoyer v. Greenspan et al. pending against various former Intermix directors and officers in the United States District Court for the Central District of California filed a First Amended Class...

  • Page 118
    ... Consolidated Financial Statements (continued) Greenspan Litigation On February 10, 2005, Brad Greenspan, Intermix's former Chairman and Chief Executive Officer who was asked to resign as CEO and was removed as Chairman in the fall of 2003, filed a derivative complaint in Los Angeles Superior Court...

  • Page 119
    ...Financial Statements (continued) News America Marketing On January 18, 2006, Valassis Communications, Inc. ("Valassis") filed a complaint against News America Incorporated, News America Marketing FSI, LLC and News America Marketing Services, In-Store, LLC (collectively "News America") in the United...

  • Page 120
    ... Company's benefit plans: Pension benefits 2008 As of June 30, 2007 (in millions) Postretirement benefits 2008 2007 Projected benefit obligation, beginning of the year Service cost Interest cost Acquisitions Benefits paid Actuarial loss (gain) (a) Foreign exchange rate changes Amendments, transfers...

  • Page 121
    ...value of plan assets for the Company's benefit plans: Pension benefits 2008 As of June 30, (in millions) 2007 Fair value of plan assets, beginning of the year Actual return on plan assets Employer contributions Acquisitions Benefits paid Foreign exchange rate changes Amendments, transfers and other...

  • Page 122
    ... in other comprehensive income Weighted-average assumptions used to determine benefit obligations Discount rate Rate of increase in future compensation Weighted-average assumptions used to determine net periodic benefit cost Discount rate Expected return on plan assets Rate of increase in future...

  • Page 123
    ... in the aggregate. The Company does not manage any assets internally. The Company's benefit plan weighted-average asset allocations, by asset category, are as follows: Pension benefits 2008 As of June 30, (in millions) 2007 Asset Category: Equity securities Debt securities Real estate Other Total...

  • Page 124
    ... $420 million at a favorable tax rate of 5.25% in fiscal 2006, which resulted in a tax benefit to the Company of approximately $125 million. The amounts repatriated were used to compensate non-executive U.S. employees for services performed within the United States. The reconciliation of income tax...

  • Page 125
    ... the existence of taxable temporary differences, tax planning strategies, and the periods in which estimated losses can be utilized. Based upon this analysis, management has concluded that it is more likely than not that the Company will not realize all of the benefits of its deferred tax assets. In...

  • Page 126
    ... network.), the broadcasting of network programming in the United States and the development, production and broadcasting of television programming in Asia. ‰ Cable Network Programming, which principally consists of the production and licensing of programming distributed through cable television...

  • Page 127
    ... Consolidated Financial Statements (continued) 2008 For the years ended June 30, 2007 (in millions) 2006 Revenues: Filmed Entertainment Television Cable Network Programming Direct Broadcast Satellite Television Magazines and Inserts Newspapers and Information Services Book Publishing Other Total...

  • Page 128
    ..., 2007 Amortization Depreciation and of cable distribution amortization investments (in millions) Filmed Entertainment Television Cable Network Programming Direct Broadcast Satellite Television Magazines and Inserts Newspapers and Information Services Book Publishing Other Total $ 1,225 962 1,090...

  • Page 129
    ... Financial Statements (continued) 2008 For the years ended June 30, (in millions) 2007 2006 Depreciation and amortization Filmed Entertainment Television Cable Network Programming Direct Broadcast Satellite Television Magazines and Inserts Newspapers and Information Services Book Publishing...

  • Page 130
    ... attributed to countries based on location of customers. Australasia comprises Australia, Asia, Fiji, Papua New Guinea and New Zealand. Note 19 EARNINGS PER SHARE Prior to fiscal 2008, earnings per share ("EPS") was computed individually for the Class A Common Stock and Class B Common Stock and net...

  • Page 131
    ...Financial Statements (continued) For the year ended June 30, 2008 (in millions, except per share amounts) Weighted average shares-basic Shares issuable under equity based compensation plans Weighted average shares-diluted Earnings per share... $ 779 143 $ 2,812 515 130 NEWSCORP 2008 Annual Report

  • Page 132
    ...sales prices for the Class A Common Stock and Class B Common Stock, as reported on the New York Stock Exchange. Note 21 VALUATION AND QUALIFYING ACCOUNTS Balance at beginning of year Additions Acquisitions and disposals Utilization Foreign exchange Balance at end of year (in millions) Fiscal 2008...

  • Page 133
    ... of Sky Brasil (b) Gain on sale of Phoenix Satellite Television Holdings Limited (b) Termination of Participation rights agreement Gain on sale of Innova (b) Gain on sale of China Netcom Group Corporation (b) Impairment of cost based investments (b) Change in fair value of Exchangeable securities...

  • Page 134
    ... Consolidated Financial Statements (continued) Note 23 SUBSEQUENT EVENTS In July 2008, the Company completed its previously announced sale of the Stations to Oak Hill Capital for approximately $1.1 billion in cash. The Company expects to record a gain on the sale. On August 5, 2008, NDS announced...

  • Page 135
    ...Financial Statements (continued) Supplemental Condensed Consolidating Statement of Operations For the year ended June 30, 2008 News America Incorporated News Corporation Non-Guarantor (US$ in millions) Reclassifications and Eliminations News Corporation... - $ (6,287) 134 NEWSCORP 2008 Annual Report

  • Page 136
    ...Financial Statements (continued) Supplemental Condensed Consolidating Statement of Operations For the year ended June 30, 2007 News America Incorporated News Corporation Non-Guarantor (US$ in millions) Reclassifications and Eliminations News Corporation... tax (expense) benefit Minority interest in ...

  • Page 137
    ...Financial Statements (continued) Supplemental Condensed Consolidating Statement of Operations For the year ended June 30, 2006 News America Incorporated News Corporation Non-Guarantor (US$ in millions) Reclassifications and Eliminations News Corporation...013) $ 2,314 136 NEWSCORP 2008 Annual Report

  • Page 138
    ...Financial Statements (continued) Supplemental Condensed Consolidating Balance Sheet At June 30, 2008 News America Incorporated News Corporation Non-Guarantor (US$ in millions) Reclassifications and Eliminations News Corporation...Investments Investments in associated companies and Other investments ...

  • Page 139
    ...Financial Statements (continued) Supplemental Condensed Consolidating Balance Sheet At June 30, 2007 News America Incorporated News Corporation Non-Guarantor (US$ in millions) Reclassifications and Eliminations News Corporation...Investments in associated companies and Other ... 2008 Annual Report

  • Page 140
    ... the Consolidated Financial Statements (continued) Supplemental Condensed Consolidating Statement of Cash Flows For the year ended June 30, 2008 News America Incorporated News Corporation Non-Guarantor (US$ in millions) Reclassifications and Eliminations News Corporation and Subsidiaries Operating...

  • Page 141
    ... Repayment of borrowings Issuance of shares Repurchase of shares Dividends paid Net cash (used in) provided by financing activities Net increase (decrease) in cash and cash equivalents Cash and cash equivalents, beginning of period Exchange movement on opening cash balance Cash and cash equivalents...

  • Page 142
    ... Repayment of borrowings Issuance of shares Repurchase of shares Dividends paid Net cash (used in) provided by financing activities Net increase (decrease) in cash and cash equivalents Cash and cash equivalents, beginning of period Exchange movement on opening cash balance Cash and cash equivalents...

  • Page 143
    ... underlying the obligations created pursuant to the various facilities and other obligations constituting senior indebtedness of the Company differ, it is not possible to predict how a court in bankruptcy would accord priorities among the obligations of the Company. 142 NEWSCORP 2008 Annual Report

  • Page 144
    ... 402(a)(3) of Regulation S-K) of News Corporation; and (iv) all Directors and executive officers of News Corporation as a group, please refer to News Corporation's Proxy Statement for its 2008 Annual Meeting of Stockholders under the heading "Security Ownership of News Corporation." As of August 18...

  • Page 145
    ... regarding the top twenty stockholders of record is based on information provided by News Corporation's transfer agent as of August 18, 2008. Class B Common Stock Cede & Co Chess Depositary Nominees Pty Limited Fayez Sarofim Charles Wilson David L. Nelson Trust Audrey Christine Cohen Ann T.P. Allen...

  • Page 146
    ..., Europe and Asia Natalie Bancro Director News Corporation David F. DeVoe Chief Financial Officer Roger Ailes Chairman and Chief Executive Officer FOX News Channel and FOX Business Network Chairman Fox Television Stations and Twentieth Television Peter L. Barnes Chairman Ansell Limited Peter...

  • Page 147
    ... Corporate Secretary Laura A. O'Leary Annual Report and Form 10-K Requests United States: 1211 Avenue of Americas, New York, NY 10036 Telephone 1 (212) 852 7059 Australasia: 31 Waymouth Street, Adelaide, S.A., Australia 5000 Telephone 61 (8) 8206 2764 United Kingdom: 1 Virginia Street, London...

  • Page 148
    NewsCorp WOR LDW IDE LIS TING

  • Page 149
    ...Century Fox Licensing and Merchandising Blue Sky Studios Twentieth Century Fox Television Fox Television Studios Twentieth Television Regency Television 50% Television United states FOX Broadcasting Company MyNetworkTV Fox Television Stations WNYW New York, NY WWOR New York, NY KTTV Los Angeles, CA...

  • Page 150
    ... hulu 45% Jamba 51% Asia TATA SKY 20% Hathway Cable and Datacom 22% Slingshot Labs europe NDS 72% London Property News 58% BrandAlley UK 49% News Corp Europe News Outdoor Group News Corporation Stations Europe Multimedia Holdings 50% milkround.com Propertyfinder.com 58% Australia and New...

  • Page 151
    ... gas emissions and energy use. United Kingdom 10% Russia 5% Italy 4% Israel 3% India 1% Hong Kong 1% Other 3% United States 45% For more information on News Corporation's energy work, carbon footprint methodology and efforts to engage audiences, business partners and employees on the issue...

  • Page 152
    News Corp Annual report 2008