Twenty-First Century Fox 2014 Annual Report Download - page 87

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TWENTY-FIRST CENTURY FOX, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
81
NOTE 1. DESCRIPTION OF BUSINESS
Twenty-First Century Fox, Inc., a Delaware corporation, (formerly known as News Corporation) and its
subsidiaries (together, “Twenty-First Century Fox” or the “Company”) is a diversified global media and
entertainment company, which manages and reports its businesses in five segments: Cable Network Programming,
which principally consists of the production and licensing of programming distributed through cable television
systems, direct broadcast satellite (“DBS”) operators and telecommunication companies primarily in the U.S., Latin
America, Europe and Asia; Television, which principally consists of the broadcasting of network programming in
the U.S. and the operation of 28 full power broadcast television stations, including 10 duopolies, in the U.S. (of
these stations, 18 are affiliated with the Fox Broadcasting Company (“FOX”) and 10 are affiliated with Master
Distribution Service, Inc. (“MyNetworkTV”) programming distribution service); Filmed Entertainment, which
principally consists of the production and acquisition of live-action and animated motion pictures for distribution
and licensing in all formats in all entertainment media worldwide, and the production of original television
programming worldwide; Direct Broadcast Satellite Television, which consists of the distribution of programming
services via satellite and broadband directly to subscribers in Italy, Germany and Austria; and Other, Corporate and
Eliminations, which principally consists of corporate overhead and eliminations and other businesses.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of consolidation
The Consolidated Financial Statements include the accounts of all majority-owned and controlled subsidiaries.
In addition, the Company evaluates its relationships with other entities to identify whether they are variable interest
entities as defined by Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”)
810-10, “Consolidation” (“ASC 810-10”) and whether the Company is the primary beneficiary. Consolidation is
required if both of these criteria are met. All significant intercompany accounts and transactions have been
eliminated in consolidation, including the intercompany portion of transactions with equity method investees.
Any change in the Company’s ownership interest in a consolidated subsidiary, where a controlling financial
interest is retained, are accounted for as a capital transaction. When the Company ceases to have a controlling
interest in a consolidated subsidiary, the Company will recognize a gain or loss in net income upon deconsolidation.
On September 19, 2013, the Company changed its fiscal year from a 52-53 week fiscal year ending on the
Sunday closest to June 30 to a fiscal year ending on June 30 of each year. The Company’s 2013 fiscal year ended on
June 30, 2013. The Company made this change to better align its financial reporting with the media and
entertainment assets retained following the separation of its business into two independent publicly traded
companies (the “Separation”) by distributing to its stockholders all of the outstanding shares of the new News
Corporation (“News Corp”) on June 28, 2013. (See Note 4 – Discontinued Operations)
Reclassifications and adjustments
Certain fiscal 2013 and 2012 amounts have been reclassified to conform to the fiscal 2014 presentation. As a
result of the Separation, News Corp has been classified as discontinued operations for all periods presented (See
Note 4 – Discontinued Operations). Unless indicated otherwise, the information in the notes to the Consolidated
Financial Statements relates to the Company’s continuing operations.