Twenty-First Century Fox 2008 Annual Report Download - page 126

NEWSCORP
Notes to the Consolidated Financial Statements (continued)
Note 18 SEGMENT INFORMATION
The Company 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 all formats in all entertainment media worldwide, and the production and licensing of television programming
worldwide.
‰Television, which, as of June 30, 2008, principally consisted of the operation of 35 full power broadcast television stations, including nine
duopolies, in the United States (Of these stations, 25 are affiliated with the FOX network, and ten are affiliated with the MyNetworkTV
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 systems and direct broadcast satellite operators primarily in the United States.
‰Direct Broadcast Satellite Television, which principally consists of the distribution of premium programming services via satellite and
broadband directly to subscribers in Italy.
‰Magazines and Inserts, which principally consists of the publication of free-standing inserts, which are promotional booklets containing
consumer offers distributed through insertion in local Sunday newspapers in the United States, and the provision of in-store marketing
products and services, primarily to consumer packaged goods manufacturers in the United States and Canada.
‰Newspapers and Information Services, which principally consists of the publication of four national newspapers in the United Kingdom, the
publication of approximately 147 newspapers in Australia, the publication of a metropolitan newspaper and a national newspaper (with
international editions) in the United States and the provision of information services.
‰Book Publishing, which principally consists of the publication of English language books throughout the world.
‰Other, which includes NDS, a company engaged in the business of supplying open end-to-end digital technology and services to digital
pay-television platform operators and content providers; FIM, which operates the Company’s Internet activities; and News Outdoor, an
advertising business which offers display advertising in outdoor locations primarily throughout Russia and Eastern Europe.
The Company’s operating segments have been determined in accordance with the Company’s internal management structure, which is
organized based on operating activities. The Company evaluates performance based upon several factors, of which the primary financial measures
are segment Operating income (loss) and Operating income (loss) before depreciation and amortization.
Operating income (loss) before depreciation and amortization, defined as operating income (loss) plus depreciation and amortization and the
amortization of cable distribution investments, eliminates the variable effect across all business segments of non-cash depreciation and
amortization. Depreciation and amortization expense includes the depreciation of property and equipment, as well as amortization of finite-lived
intangible assets. Amortization of cable distribution investments represents a reduction against revenues over the term of a carriage arrangement
and, as such, it is excluded from Operating income (loss) before depreciation and amortization. Operating income (loss) before depreciation and
amortization is a non-GAAP measure and it should be considered in addition to, not as a substitute for, operating income (loss), net income (loss),
cash flow and other measures of financial performance reported in accordance with GAAP. Operating income (loss) before depreciation and
amortization does not reflect cash available to fund requirements, and the items excluded from Operating income (loss) before depreciation and
amortization, such as depreciation and amortization, are significant components in assessing the Company’s financial performance.
Management believes that Operating income (loss) before depreciation and amortization is an appropriate measure for evaluating the
operating performance of the Company’s business segments. Operating income (loss) before depreciation and amortization provides
management, investors and equity analysts a measure to analyze operating performance of each business segment and enterprise value against
historical and competitors’ data, although historical results, including Operating income (loss) before depreciation and amortization, may not be
indicative of future results (as operating performance is highly contingent on many factors including customer tastes and preferences).
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