Twenty-First Century Fox 2011 Annual Report Download - page 22

Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)
For the fiscal year ended June 30, 2011, operating income at the Publishing segment increased $397 million, or 85%, as compared to fiscal
2010. The increase in operating income was primarily due to lower litigation settlement costs at the Company’s integrated marketing services
business and favorable foreign exchange fluctuations at the Australian and United Kingdom newspapers. The weakening of the U.S. dollar against
the Australian dollar and British pound sterling resulted in an operating income increase of approximately $50 million, or 11%, for the fiscal year
ended June 30, 2011 as compared to fiscal 2010.
Other (3% and 5% of the Company’s consolidated revenues in fiscal 2011 and 2010, respectively)
Revenues at the Other segment decreased $427 million, or 28%, for the fiscal year ended June 30, 2011, as compared to fiscal 2010. The
decrease was primarily due to decreased revenues from the Company’s digital media properties of $342 million, principally due to lower
advertising and search revenues at Myspace.The decrease was also due to the absence of revenue related to the eastern European television stations
disposed of in fiscal 2010 of $86 million and lower revenues from Fox Mobile of $146 million due to its fiscal 2011 disposition. The revenue
decreases were partially offset by increased revenues at News Outdoor and the inclusion of revenues from Wireless Generation which was acquired
in fiscal 2011.
Operating results for the fiscal year ended June 30, 2011 decreased $39 million, or 7%, as compared to fiscal 2010, primarily due to lower
operating results from the Company’s digital media properties, principally resulting from the revenue declines noted above. These decreases were
partially offset by lower operating losses from Fox Mobile and Fox Audience Network resulting from their fiscal 2011 dispositions and improved
operating results at News Outdoor.
Results of Operations – Fiscal 2010 versus Fiscal 2009
The following table sets forth the Company’s operating results for fiscal 2010 as compared to fiscal 2009.
2010 2009 Change % Change
For the years ended June 30, ($ millions)
Revenues $ 32,778 $ 30,423 $ 2,355 8%
Operating expenses (21,015) (19,563) (1,452) 7%
Selling, general and administrative (6,619) (6,164) (455) 7%
Depreciation and amortization (1,185) (1,138) (47) 4%
Impairment and restructuring charges (253) (9,208) 8,955 **
Equity earnings (losses) of affiliates 448 (309) 757 **
Interest expense, net (991) (927) (64) 7%
Interest income 91 91 ——
Other, net 69 1,256 (1,187) (95)%
Income (loss) before income tax expense 3,323 (5,539) 8,862 **
Income tax (expense) benefit (679) 2,229 (2,908) **
Net income (loss) 2,644 (3,310) 5,954 **
Less: Net income attributable to noncontrolling interests (105) (68) (37) 54%
Net income (loss) attributable to News Corporation stockholders $ 2,539 $ (3,378) $ 5,917 **
** not meaningful
Overview–The Company’s revenues increased 8% for the fiscal year ended June 30, 2010 as compared to fiscal 2009. The increase was
primarily due to revenue increases at the Filmed Entertainment, Cable Network Programming and Publishing segments. Filmed Entertainment
segment revenues increased primarily due to increased worldwide theatrical and home entertainment revenues.The increase at the Cable Network
Programming segment was primarily due to increases in net affiliate and advertising revenues. The increase at the Publishing segment was
primarily due to favorable foreign exchange fluctuations. These revenue increases were partially offset by decreased revenues at the Other segment,
primarily due to decreased revenues at the Company’s digital media properties and the sale of a portion of the Company’s ownership stake in NDS
Group plc (“NDS”) in February 2009. As a result of the sale, the Company’s portion of NDS’s operating results subsequent to February 2009 is
included within Equity earnings (losses) of affiliates.
Operating expenses for the fiscal year ended June 30, 2010 increased 7% as compared to fiscal 2009. The increase was primarily due to
increased amortization of production costs and higher participation costs at the Filmed Entertainment segment and higher programming costs at
the Television, Cable Network Programming and DBS segments, as well as unfavorable foreign exchange fluctuations. These increases were
partially offset by the absence of costs related to NDS in the Other segment, reflecting the sale of a portion of the Company’s NDS ownership
stake as noted above, as well as the effect of company-wide cost containment initiatives.
Selling, general and administrative expenses for the fiscal year ended June 30, 2010 increased 7% as compared to fiscal 2009. This increase
was primarily due to a $500 million charge related to the legal settlement with Valassis Communications, Inc. (“Valassis”) at the Publishing
segment, partially offset by the absence of costs related to NDS as noted above and the effects of company-wide cost containment initiatives.
20 News Corporation