Twenty-First Century Fox 2011 Annual Report Download - page 53

Download and view the complete annual report

Please find page 53 of the 2011 Twenty-First Century Fox annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 106

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106

Notes to the Consolidated Financial Statements (continued)
as they were negotiated at fair value and are consistent with similar pre-existing contracts with other third party-owned FOX affiliated stations. In
addition, the Company recorded a gain of approximately $232 million in Other, net in the consolidated statements of operations for the fiscal year
ended June 30, 2009.
In November 2008, the Company sold its ownership stake in a Polish television broadcaster to the remaining shareholders. The Company
recognized a net loss of approximately $100 million on the disposal which was included in Other, net in the consolidated statements of operations
for the fiscal year ended June 30, 2009.
Other transactions
In February 2009, the Company, two newly incorporated subsidiaries of funds advised by Permira Advisers LLP (the “Permira Newcos”) and
the Company’s then majority-owned, publicly-held subsidiary, NDS Group plc (“NDS”), completed a transaction pursuant to which all issued and
outstanding NDS Series A ordinary shares, including those represented by American Depositary Shares traded on The NASDAQ Stock Market,
were acquired for per-share consideration of $63 in cash (the “NDS Transaction”). As part of the transaction, approximately 67% of the NDS
Series B ordinary shares held by the Company were exchanged for $63 per share in a mix of approximately $1.5 billion in cash, which included
$780 million of cash retained upon the deconsolidation of NDS, and a $242 million vendor note. Immediately prior to the consummation of the
NDS Transaction, the Company owned approximately 72% of NDS through its ownership of all of the outstanding NDS Series B ordinary shares
and, accordingly, included the results of NDS in the consolidated financial statements of the Company. As a result of the transaction, NDS ceased
to be a public company and the Permira Newcos and the Company now own approximately 51% and 49% of NDS, respectively. The Company’s
remaining interest in NDS is accounted for under the equity method of accounting. A gain of $1.2 billion was recognized on the sale of the
Company’s interest and is included in Other, net in the consolidated statements of operations for the fiscal year ended June 30, 2009. In March
2011, the Company received $316 million from NDS in full payment of the $242 million vendor note and $74 million in accrued interest.
NOTE 4. Restructuring Programs
Fiscal 2011
In fiscal 2011, the Company recorded restructuring charges of approximately $145 million. The restructuring charges primarily consist of a
$115 million charge related to the Company’s digital media properties and $25 million related to termination benefits recorded at the newspaper
businesses. The charges at the Company’s digital media properties were a result of an organizational restructuring to align resources more closely
with business priorities and consisted of facility related costs of $95 million, termination benefits of $18 million and other associated costs of $2
million.
Fiscal 2010
In fiscal 2010, the Company recorded restructuring charges of approximately $53 million. The restructuring charges in fiscal 2010 reflect an
$18 million charge related to the sales and distribution operations of the STAR channels, a $19 million charge for termination benefits related to
the newspaper businesses, a $7 million charge related to the restructuring program at Fox Mobile and a $9 million charge for accretion on facility
termination obligations.
Fiscal 2009
In fiscal 2009, certain of the markets in which the Company’s businesses operate experienced a weakening in the economic climate, which
adversely affected advertising revenue and other consumer driven spending. As a result, a number of the Company’s businesses implemented a
series of operational actions to address the Company’s cost structure, including the restructuring of the Company’s digital media properties to
align resources more closely with business priorities. This restructuring program included significant job reductions, both domestically and
internationally, to enable the businesses to operate on a more cost effective basis. In conjunction with this project the Company also eliminated
excess facility requirements. In fiscal 2009, several other businesses of the Company implemented similar plans including the U.K. and Australian
newspapers, HarperCollins, MyNetworkTV and Fox Television Stations. During the fiscal year ended June 30, 2009, the Company recorded
restructuring charges of approximately $312 million. These charges consist of severance costs, facility related costs and other associated costs. The
restructuring charges principally consist of $20 million recorded at the television business, $74 million recorded at the newspaper businesses, $33
million recorded at the book publishing business and $178 million related to the Company’s digital media properties, $148 million of which was
recorded for facility related costs.
2011 Annual Report 51