Twenty-First Century Fox 2008 Annual Report Download - page 98

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NEWSCORP
Notes to the Consolidated Financial Statements (continued)
Note 4 UNITED KINGDOM REDUNDANCY PROGRAM
In fiscal 2005, the Company announced its intention to invest in new printing plants in the United Kingdom to take advantage of technological and
market changes. As the new automated technology comes on line, the Company expects lower production costs and improved newspaper quality,
including expanded color.
In conjunction with this project, during fiscal 2006, the Company received formal approval for the construction of the main new plant which
was the last contingency, thereby committing the Company to a redundancy program (the “Program”) for certain production employees at the
Company’s U.K. newspaper operations. The Program is in response to the reduced 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 majority of such employees left the Company
during fiscal 2008.
In accordance with SFAS No. 88, “Employers’ Accounting for Settlements & Curtailments of Defined Benefit Pension Plans and for
Termination Benefits,” the Company recorded a redundancy provision of approximately $109 million during fiscal 2006 in Other operating charges.
During the fiscal years ended June 30, 2008 and 2007, the Company recorded additional amounts relating to the Program, which were comprised of
an increase to the original provision amount, accretion and earned retention expenses, in Other operating (income) charges in the consolidated
statements of operations. Changes in the program liabilities are as follows:
2008 2007
For the year ended June 30, (in millions)
Beginning of period $ 127 $109
Additions 19 24
Payments (141) (15)
Foreign exchange movements — 9
End of period $ 5 $ 127
At June 30, 2008, all program liabilities were included in other current liabilities in the consolidated balance sheet. The remaining program
liabilities are expected to be paid in cash to employees during the first quarter of fiscal 2009.
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