Twenty-First Century Fox 2014 Annual Report Download - page 51

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due to the effect of the consolidation of Sky Deutschland from January 2013. The increase at the Cable Network
Programming segment for fiscal 2014 was primarily related to higher programming costs, the continued investments
in the new channels, Fox Sports 1, STAR Sports networks and FXX, and the Acquisitions. The increase at the
Filmed Entertainment segment was primarily related to an increase in production amortization and participation
costs related to the television programming and motion picture production businesses and higher theatrical
marketing costs as a result of the increase in the number of significant theatrical releases in fiscal 2014, as compared
to fiscal 2013.
Selling, general and administrative expenses increased 3% for fiscal 2014, as compared to fiscal 2013,
primarily due to the increases at the Cable Network Programming and DBS segments of approximately $85 million
and $75 million, respectively. The increase at the Cable Network Programming segment for fiscal 2014 was
primarily due to higher personnel costs and the effect of the Acquisitions. The increase at the DBS segment was
primarily due to the effect of the consolidation of Sky Deutschland from January 2013.
Depreciation and amortization, including the amortization of acquired identifiable intangible assets, increased
43% for fiscal 2014, as compared to fiscal 2013, primarily due to the consolidation of Sky Deutschland and the
acquisition of the majority interest in the YES Network.
Equity earnings of affiliates – Equity earnings of affiliates decreased $33 million for fiscal 2014, as
compared to fiscal 2013, due to the decreases at the DBS equity affiliates primarily related to lower results and gains
at BSkyB, partially offset by the absence of equity losses due to the consolidation of Sky Deutschland from January
2013. The gains from the Company’s participation in BSkyB’s share repurchase program declined by approximately
$170 million during fiscal 2014. Partially offsetting the net decreases at the DBS equity affiliates were increases at
the Other equity affiliates, led by Hulu LLC (“Hulu”), and the Cable channel equity affiliates. Hulu’s results
benefited from higher subscription and advertising revenues and the effect of the charges recorded during fiscal
2013 for the redemption of Providence Equity Partners’ equity interest in October 2012. The increase at the Cable
channel equity affiliates was led by higher contributions from the YES Network, which was an affiliate until the date
of its acquisition.
For the years ended June 30,
2014 2013  Change % Change
(in millions, except %)
DBS equity affiliates ................................................................... $ 609 $ 826 $ (217 ) (26) %
Cable channel equity affiliates .................................................... 29 (52) 81 **
Other equity affiliates ................................................................. (16) (119) 103 87 %
Equity earnings of affiliates ........................................................ $ 622 $ 655 $ (33 ) (5) %
** not meaningful
Interest expense, net – Interest expense increased $58 million for fiscal 2014, as compared to fiscal 2013,
primarily due to the higher average debt outstanding as a result of the debt consolidated in connection with the
acquisition of the majority interest in the YES Network and the consolidation of Sky Deutschland and the issuance
in September 2013 of $300 million of 4.00% Senior Notes due 2023 and $700 million of 5.40% Senior Notes due
2043.