Twenty-First Century Fox 2008 Annual Report Download - page 68

NEWSCORP
Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)
Liquidity and Capital Resources
Current Financial Condition
The Company’s principal source of liquidity is internally generated funds; however, the Company has access to the worldwide capital markets, a
$2.25 billion revolving credit facility and various film co-production alternatives to supplement its cash flows. At June 30, 2008, no amounts were
outstanding under the New Credit Agreement. Also, as of June 30, 2008, the Company had consolidated cash and cash equivalents of
approximately $4.7 billion. The Company believes that cash flows from operations will be adequate for the Company to conduct its operations. The
Company’s internally generated funds are highly dependent upon the state of the advertising market and public acceptance of film and television
products. Any significant decline in the advertising market or the performance of the Company’s films could adversely impact its cash flows from
operations which could require the Company to seek other sources of funds including proceeds from the sale of certain assets or other alternative
sources.
The principal uses of cash that affect the Company’s liquidity position include the following: investments in the production and distribution
of new feature films and television programs; the acquisition of and payments for programming rights for entertainment and sports programming;
paper purchases; operational expenditures, including employee costs; capital expenditures; interest expense; income tax payments; investments
in associated entities; dividends; acquisitions; and stock repurchases.
The Company has evaluated, and expects to continue to evaluate, possible acquisitions and dispositions of certain businesses. Such
transactions may be material and may involve cash, the Company’s securities or the assumption of additional indebtedness.
Sources and Uses of Cash—Fiscal 2008 vs. Fiscal 2007
Net cash provided by operating activities for the fiscal years ended June 30, 2008 and 2007 is as follows (in millions):
Years Ended June 30, 2008 2007
Net cash provided by operating activities $3,925 $4,110
The decrease in net cash provided by operating activities reflects higher tax payments, higher film production spending and additional
payments made under the United Kingdom redundancy program. These decreases were partially offset by higher cash provided by operating
activities primarily from the Television, Cable Network Programming and Newspapers and Information Services segments during the fiscal year
ended 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 affiliate receipts, and the increase at the Newspapers and Information Services segment reflects higher
advertising receipts at the Company’s Australian newspapers.
Net cash used in investing activities for the fiscal years ended June 30, 2008 and 2007 is as follows (in millions):
Years Ended June 30, 2008 2007
Net cash used in investing activities $(6,354) $(2,076)
Net cash used in investing activities during the fiscal year ended June 30, 2008 was higher than fiscal 2007, primarily due to the Company’s
acquisitions of Dow Jones in December 2007 and of Photobucket in July 2007. The increase in cash used for acquisitions was partially offset by cash
proceeds from the sale of the Company’s investment in Gemstar in April 2008.
Net cash used in financing activities for the fiscal years ended June 30, 2008 and 2007 is as follows (in millions):
Years Ended June 30, 2008 2007
Net cash used in financing activities $(636) $(273)
The increase in net cash used in financing activities was primarily due to a decrease in cash receipts from borrowings, net of repayments, of
$434 million, and a decrease in cash received from the issuance of shares. During fiscal 2008, the Company received net proceeds of $1,237 million
from the issuance of $1,250 million 6.65% Senior Notes due 2037, in November 2007 and retired its $350 million 6.625% Senior Notes due 2008
and $225 million 3.875% notes due 2008, as well as $131 million in commercial paper assumed as part of the Dow Jones acquisition. The increase in
net cash used in financing activities was partially offset by a reduction in cash used for share repurchases of $355 million in fiscal 2007.
The total dividends declared related to fiscal 2008 results were $0.12 per share of Class A Common Stock and Class B Common Stock. In
August 2008, the Company declared the final dividend on fiscal 2008 results of $0.06 per share for Class A Common Stock and Class B Common
Stock. This together with the interim dividend of $0.06 per share of Class A Common Stock and Class B Common Stock constitute the total
dividend relating to fiscal 2008.
Based on the number of shares outstanding as of June 30, 2008, the total aggregate cash dividends expected to be paid to stockholders in
fiscal 2009 is approximately $313 million.
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