Twenty-First Century Fox 2011 Annual Report Download - page 74

Notes to the Consolidated Financial Statements (continued)
Trial in the Valassis Michigan Action commenced on May 27, 2009. On July 23, 2009, a jury returned a verdict in the amount of $300
million for Valassis. News America filed a motion for new trial, which was denied. News America filed an appeal and posted a bond for $25
million, the maximum bond required under Michigan law.
Trial in the Valassis Federal Action was set to commence on February 2, 2010. As a result of pretrial proceedings and negotiations that
occurred in late January 2010 related to the Valassis Federal Action, on January 30, 2010, the Company announced that News America had
reached a settlement agreement with Valassis pursuant to which all claims filed by Valassis in all matters have been dismissed with prejudice. The
United States District Court for the Eastern District of Michigan oversaw the settlement discussions and approved the terms of the settlement. As
part of the settlement, News America paid Valassis $500 million and entered into a ten-year shared mail distribution agreement with Valassis
Direct Mail, a Valassis subsidiary. Additionally, the parties also have agreed to a process by which the United States District Court for the Eastern
District of Michigan may assess certain future business practices of News America and Valassis. In connection with the settlement, the Valassis
Federal Action has been dismissed with prejudice. In addition, the judgment in the Valassis Michigan Action from July 2009 has been satisfied
with all related appeals dismissed, and the Valassis California Action has been dismissed with prejudice.
As a result of the settlement, the Company recorded a charge of $500 million in fiscal year ended June 30, 2010. The cost of the new
distribution agreement, which was entered into on a fair value basis, will be accounted for prospectively, consistent with the accounting for other
similar agreements.
Insignia Systems, Inc.
On September 23, 2004, Insignia Systems, Inc. (“Insignia”) filed an action against News America Marketing In-Store Inc. (“News America”)
in the United States District Court for the District of Minnesota. The operative complaint alleges, among other things, disparagement of Insignia
by News America in violation of the Lanham Act and Minnesota state law and various federal and state antitrust violations arising out of
Insignia’s and News America’s competition in the domestic in-store advertising market. Insignia seeks damages, injunctive relief and attorneys’ fees
and costs. On September 30, 2009, the court granted in part, and denied in part, News America’s motion for summary judgment.
Discovery in the case has been completed. On January 14, 2011, the court granted in part, and denied in part, News America’s motions to
exclude testimony by Insignia’s expert witnesses. The trial began on February 8, 2011. On February 9, 2011, the parties settled the lawsuit. Under
the terms of the settlement, which included no admission of liability, News America paid Insignia $125 million, which is recorded in Selling,
general and administrative expenses during the fiscal year ended June 30, 2011. In addition, Insignia paid News America $4 million in relation to a
10-year exclusive business arrangement between the companies.
Other
Other than previously disclosed in the notes to these consolidated financial statements, 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 ASC 480-10-S99-3A. Accordingly, the fair
values of such purchase arrangements are classified in Redeemable noncontrolling interests.
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.
NOTE 17. Pensions and Other Postretirement Benefits
The Company participates in and/or sponsors pension and savings plans of various types in a variety of jurisdictions covering, in aggregate,
substantially all employees. As of January 1, 2008, the major pension plans and medical plans are closed to new participants (with the exception of
groups covered by collective bargaining agreements). The Company has a legally enforceable obligation to contribute to some plans and is not
required to contribute to others. Non-U.S. plans include both employee contributory and employee non-contributory defined benefit plans and
accumulation plans covering all eligible employees. The plans in the United States include both defined benefit pension plans and employee
non-contributory and employee contributory accumulation plans covering all eligible employees. The Company makes contributions in accordance
with applicable laws or contract terms in each jurisdiction in which the Company operates. The Company’s benefit obligation is calculated using
several assumptions which the Company reviews on a regular basis.
The funded status of the plans can change from year to year, but the assets of the funded plans have been sufficient to pay all benefits that
came due in each of fiscal 2011, 2010 and 2009.
72 News Corporation