Twenty-First Century Fox 2008 Annual Report Download - page 58

NEWSCORP
Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)
Results of Operations
Results of Operations—Fiscal 2008 versus Fiscal 2007
The following table sets forth the Company’s operating results for fiscal 2008 as compared to fiscal 2007.
2008 2007 Change % Change
For the years ended June 30, ($ millions)
Revenues $32,996 $28,655 $4,341 15%
Expenses:
Operating 20,531 18,645 1,886 10%
Selling, general and administrative 5,984 4,655 1,329 29%
Depreciation and amortization 1,207 879 328 37%
Other operating (income) charges (107) 24 (131) **
Total operating income 5,381 4,452 929 21%
Equity earnings of affiliates 327 1,019 (692) (68)%
Interest expense, net (926) (843) (83) 10%
Interest income 246 319 (73) (23)%
Other, net 2,293 359 1,934 **
Income before income tax expense and minority interest in subsidiaries 7,321 5,306 2,015 38%
Income tax expense (1,803) (1,814) 11 (1)%
Minority interest in subsidiaries, net of tax (131) (66) (65) 98%
Net income $ 5,387 $ 3,426 $ 1,961 57%
Diluted earnings per share from continuing operations (1) $ 1.81 $ 1.08 $ 0.73 68%
** not meaningful
(1) Represents earnings per share based on the total weighted average shares outstanding (Class A Common Stock and Class B Common Stock
combined) for the fiscal years ended June 30, 2008 and 2007. During fiscal 2007, Class A Common Stock carried rights to a greater dividend
than Class B Common Stock. Subsequent to the final fiscal 2007 dividend, shares of Class A Common Stock ceased to carry any rights to a
greater dividend than shares of Class B Common Stock. See Note 19 to the Consolidated Financial Statements of News Corporation.
Overview—The Company’s revenues increased 15% for the fiscal year ended June 30, 2008 as compared to the fiscal year ended June 30, 2007.
The impact of foreign currency translations represented 4% of the revenue increase for the fiscal year ended June 30, 2008. The remaining increase
was primarily due to revenue increases at the Newspapers and Information Services, Cable Network Programming, DBS and Other segments. The
increase at the Newspapers and Information Services segment was primarily due to the inclusion of revenue from Dow Jones, which was acquired
in December 2007. The Cable Network Programming segment increase was primarily due to the consolidation of the National Geographic channels
and higher net affiliate revenues. The increase at the DBS segment was primarily due to an increase in subscribers during fiscal 2008. The Other
segment increase was primarily due to increased revenue from FIM.
Operating expenses for the fiscal year ended June 30, 2008 increased 10% as compared to the fiscal year ended June 30, 2007. The increase
was 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 Services segments. The increase in operating expenses was partially offset by the absence of expenses related to the
International Cricket Council (“ICC”) Cricket World Cup that were included in fiscal 2007 and lower amortization and production costs due to the
Writer’s Guild of America strike in fiscal 2008.
Selling, general and administrative expenses for fiscal year ended June 30, 2008 increased approximately 29% as compared to fiscal 2007.
This increase was primarily due to incremental expenses related to acquisitions, the launch of new businesses, increased employee costs and
foreign exchange movements at the Newspapers and Information Services and DBS segments.
Depreciation and amortization increased 37% for the fiscal year ended June 30, 2008 as compared to the fiscal year ended June 30, 2007. The
increase in depreciation and amortization was primarily due to the depreciation of additional property and equipment acquired through
acquisitions, higher amortization of finite lived intangible assets due to acquisitions, additional property, plant and equipment placed into service
and the impact of foreign exchange movements at the Newspapers and Information Services and DBS segments. Also contributing to the
increased depreciation and amortization in the fiscal year ended June 30, 2008 was higher accelerated depreciation at the Newspapers and
Information Services segment as compared to the fiscal year ended June 30, 2007.
Operating income increased 21% for the fiscal year ended June 30, 2008 as compared to fiscal 2007, primarily due to increased Operating
income at the DBS, Cable Network Programming, Television, Newspapers and Information Services and Other segments. The impact of foreign
currency translations represented 4% of the Operating income increase for the fiscal year ended June 30, 2008. In addition, Operating income for
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