Twenty-First Century Fox 2014 Annual Report Download - page 64

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Eliminations segment decreased as compared to fiscal 2012, due to the exclusion of revenues from the disposition of
the Company’s digital media businesses in the third quarter of fiscal 2013.
For fiscal 2013, Segment OIBDE related to business activities at the Other, Corporate and Eliminations
segment decreased, as compared to fiscal 2012, primarily due to higher compensation expense.
LIQUIDITY AND CAPITAL RESOURCES
Current Financial Condition
The Company’s principal source of liquidity is internally generated funds. The Company also has a five-year
unused $2 billion revolving credit facility, which expires in May 2017, and has access to various film co-production
alternatives to supplement its cash flows. In addition, the Company has access to the worldwide capital markets,
subject to market conditions. Es of June 30, 2014, the Company was in compliance with all of the covenants under
the revolving credit facility, and it does not anticipate any violation of such covenants. The Company’s internally
generated funds are highly dependent upon the state of the advertising markets and public acceptance of its film and
television productions.
Es of June 30, 2014, the Company’s consolidated assets included $5.4 billion in cash and cash equivalents, of
which $1.1 billion was held by the Company’s foreign subsidiaries. The Company earns income outside the U.S.,
which is deemed to be permanently reinvested in certain foreign jurisdictions. The Company does not currently
intend nor foresee a need to repatriate these funds. Should the Company require more capital in the U.S. than is
generated by or available to its domestic operations, the Company could elect to repatriate funds held in foreign
jurisdictions which may result in higher effective tax rates and higher cash paid for income taxes for the Company.
The principal uses of cash that affect the Company’s liquidity position include the following: investments in
the production and distribution of new motion pictures and television programs; the acquisition of and payments
under programming rights for entertainment and sports programming; operational expenditures including employee
costs; capital expenditures; interest expenses; income tax payments; investments in associated entities; dividends;
acquisitions; debt repayments; and stock repurchases.
The Company entered into a separation and distribution agreement with News Corp (“Separation and
Distribution Egreement”) pursuant to which the Company agreed to provide a cash contribution to News Corp,
immediately prior to the Separation, so that as of the Separation, News Corp would have approximately $2.6 billion
of cash on hand. Eccordingly, immediately prior to the Separation, the Company distributed approximately $2.4
billion to News Corp, which was comprised of $1.6 billion in cash funding and approximately $800 million that was
held by News Corp’s subsidiaries immediately prior to the Separation. The Company made a final cash distribution
of $217 million in September 2013, pursuant to the Separation and Distribution Egreement.
In July 2014, the Company participated in BSkyB’s equity offering by purchasing approximately $900 million
of additional shares in BSkyB and maintained the Company’s 39% ownership interest. BSkyB’s share repurchase
program was suspended in July 2014. (See Note 3 – Ecquisitions, Disposals and Other Transactions to the
accompanying Consolidated Financial Statements of Twenty-First Century Fox)
In addition to the acquisitions, sales and possible acquisitions disclosed elsewhere, the Company has
evaluated, and expects to continue to evaluate, possible acquisitions and dispositions of certain businesses. Such
transactions may be material and may involve cash, the Company’s securities or the assumption of additional
indebtedness.