Twenty-First Century Fox 2008 Annual Report Download - page 72

NEWSCORP
Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)
Under the Company’s contract with the Big Ten Conference, remaining future minimum payments for program rights to broadcast certain Big
Ten Conference sporting events are payable over the remaining term of the contract through fiscal 2032.
In addition, the Company has certain other local sports broadcasting rights.
(d) Includes obligations relating to third party printing contracts, television rating services, a distribution agreement and paper purchase
obligations.
(e) A joint-venture in which the Company owns a 50% equity interest, entered into an agreement for global programming rights. Under the terms
of the agreement, the Company and the other joint-venture partner have jointly guaranteed the programming rights obligation.
The table excludes the Company’s pension, other postretirement benefits (“OPEB”) obligations and the gross unrecognized tax benefits for
uncertain tax positions. The Company made primarily voluntary contributions of $57 million and $67 million to its pension plans in fiscal 2008 and
fiscal 2007, respectively. Future plan contributions are dependent upon actual plan asset returns and interest rates and statutory requirements.
Assuming that actual plan asset returns are consistent with the Company’s expected plan returns in fiscal 2009 and beyond, and that interest
rates remain constant, the Company would not be required to make any material contributions to its U.S. pension plans for the immediate future.
The Company expects to make a combination of voluntary contributions and statutory contributions of approximately $110 million to its pension
plans in fiscal 2009. Payments due to participants under the Company’s pension plans are primarily paid out of the underlying trusts. Payments
due under the Company’s OPEB plans are not required to be funded in advance, but are paid as medical costs are incurred by covered retiree
populations, and are principally dependent upon the future 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 adopted Financial Accounting Standards Board Interpretation No. 48, “Accounting for Uncertainty in Income Taxes” (“FIN 48”)
as of the beginning of fiscal year 2008. As noted above, the table excludes any reserves for income taxes under FIN 48 as the Company is unable to
reasonably predict the ultimate amount or timing of settlement of our reserves for income taxes.
Contingencies
The Company’s wholly-owned subsidiary, News Outdoor owns and operates outdoor advertising companies and also owns approximately 73% of
Media Support Services Limited (“MSS”), an outdoor advertising company in Russia. The minority stockholders of MSS had the right to sell a
portion of their interests to News Outdoor during the first quarter of fiscal 2007 and exercised those rights. In certain limited circumstances, the
minority stockholders of MSS have the right to sell, and News Outdoor has the right to purchase, the remaining minority interests at fair market
value. The Company believes that the exercise of these sale rights, if any, will not have a material effect on its consolidated financial condition,
future results of operations or liquidity. In June 2007, the Company announced its intention to explore strategic options for News Outdoor in
connection with News Outdoor’s continued development plans. These strategic options include, but are not limited to, exploring the opportunity
to expand News Outdoor’s existing shareholder group through new strategic and private equity partners. No agreement has yet been entered into
with respect to any transaction.
Other than as disclosed in the notes to the accompanying Consolidated Financial Statements of News Corporation, the Company is party to
several purchase and sale arrangements which become exercisable over the next ten years by the Company or the counter-party to the agreement.
In the next twelve months, none of these arrangements that become exercisable are material. Purchase arrangements that are exercisable by the
counter-party to the agreement, and that are outside the sole control of the Company are accounted for in accordance with EITF No. D-98
“Classification and Measurement of Redeemable Securities”. Accordingly, the fair values of such purchase arrangements are classified in Minority
interest liabilities.
The Company experiences routine litigation in the normal course of its business. The Company believes that none of its pending litigation will
have a material adverse effect on its consolidated financial condition, future results of operations or liquidity.
The Company’s operations are subject to tax in various domestic and international jurisdictions and as a matter of course, the Company is
regularly audited by federal, state and foreign tax authorities. The Company believes it has appropriately accrued for the expected outcome of all
pending tax matters and does not currently anticipate that the ultimate resolution of pending tax matters will have a material adverse effect on
its consolidated financial condition, future results of operations or liquidity.
Critical Accounting Policies
An accounting policy is considered to be critical if it is important to the Company's financial condition and results and if it requires significant
judgment and estimates on the part of management in its application. The development and selection of these critical accounting policies have
been determined by management of the Company and the related disclosures have been reviewed with the Audit Committee of the Board. For a
summary of all of the Company’s significant accounting policies, see Note 2 to the Consolidated Financial Statements of News Corporation.
Use of Estimates
The preparation of the Company’s consolidated financial statements in conformity with GAAP requires management to make estimates and
assumptions that affect the amounts that are reported in the consolidated financial statements and accompanying disclosures. Although these
estimates are based on management’s best knowledge of current events and actions that the Company may undertake in the future, actual
results may differ from the estimates.
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