News Corporation Reports First Quarter Operating Income of $805 Million, a 12% Increase, on Revenue Growth of 12%; Net Profit Increases 27% to $536 Million.NEW YORK New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of -- The News Corporation Limited (NYSE NYSE See: New York Stock Exchange : NWS NWS National Weather Service NWS Naval Weapons Station NWS New World Symphony NWS Nuclear Weapon State NWS Not Work Safe NWS National Watercolor Society NWS North Warning System NWS Nose Wheel Steering NWS National Waste Strategy (UK) , NWS.A) QUARTER HIGHLIGHTS --Strong ratings and advertising growth at Fox News Channel and FX and higher affiliate revenues at the Regional Sports Networks In the United States of America, a Regional Sports Network, or RSN, is a cable television station that presents sports programming to a local market. The most important programming on an RSN consists of live broadcasts of professional and college sporting events, as those games drives 47% operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. growth at Cable Network Programming. --Television segment operating income up 30% on advertising growth at the broadcast network and STAR and lower programming costs at the network and station group. --Robust home entertainment sales contribute to strong results at Filmed Entertainment. Overall segment down due to strong syndication See syndication format. sales in the quarter a year ago. --SKY Italia operating losses operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. in line with a year ago as subscriber subscriber, n the person, usually the employee, who represents the family unit in relation to the prepayment plan. Other family members are dependents. Also called certificate holders or enrollees. base expands to more than 2.8 million. --All print segments report higher earnings contributions led by 18% operating income growth at Newspapers from advertising revenue gains in Australia Australia (ôstrāl`yə), smallest continent, between the Indian and Pacific oceans. With the island state of Tasmania to the south, the continent makes up the Commonwealth of Australia, a federal parliamentary state (2005 est. pop. and U.K. The News Corporation Limited (NYSE: NWS, NWS.A) today reported first quarter consolidated revenues of $5.2 billion, a 12% increase over the $4.6 billion reported in the prior year, and consolidated operating income of $805 million, a 12% increase over the $719 million reported a year ago. The year-on-year operating income growth was driven by double-digit dou·ble-dig·it adj. Being between 10 and 99 percent: double-digit inflation. increases at the Cable Network Programming, Television, Newspaper and Magazines and Inserts segments. Net profit for the first quarter was $536 million, an increase of $114 million over the $422 million reported a year ago. Net profit before other items increased to $467 million ($0.32 per ADR ADR - Astra Digital Radio ) versus $386 million ($0.29 per ADR) in the prior year, primarily due to higher consolidated operating income and improved associated entities results. Commenting on the results, Chairman and Chief Executive Rupert Rupert, 1352–1410, German king (1400–1410), elector palatine of the Rhine. He was elected German king after the deposition of Wenceslaus. Seeking the imperial crown, Rupert went to Italy. Murdoch said: "We are extremely pleased with the 12% revenue and operating income growth we delivered during our first quarter - a continuation of the record results we achieved in fiscal 2004. Double-digit earnings gains at our television, cable, newspapers and magazines and inserts segments, as well as strong profits from filmed entertainment underscore The underscore character (_) is often used to make file, field and variable names more readable when blank spaces are not allowed. For example, NOVEL_1A.DOC, FIRST_NAME and Start_Routine. (character) underscore - _, ASCII 95. the sustained financial strength across our diverse and balanced collection of assets. At the same time, we are also quickly establishing another growth engine with our global pay-TV pay-TV n. A system for receiving television broadcasts by making subscription payments, as by renting a device that unscrambles the broadcaster's scrambled signal. Also called pay television. assets, particularly at SKY Italia SKY Italia is an Italian digital satellite television platform owned by News Corporation. It is similar in many ways to BSkyB's Sky Digital in the United Kingdom and Ireland, and like that network it is a major sports broadcaster. , BSkyB BSkyB British Sky Broadcasting and DIRECTV DirecTV (trademarked as "DIRECTV") is a direct broadcast satellite (DBS) service based in El Segundo, California, USA, that transmits digital satellite television and audio to households in the United States, the Caribbean and Latin America except for Mexico. , each of which has positioned itself for substantial earnings generation in the years ahead. "And with the recent shareholder approval of our reincorporation to the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. , we are on the cusp of a new and more prosperous era for News Corporation - an era in which the profit growth we are poised to deliver and the potential of our unmatched asset base translate into stronger returns for our shareholders." MANAGEMENT REVIEW OF PERFORMANCE The Statement of Financial Performance, Statement of Financial Position, Statement of Cash Flows and Supplemental Financial Data for the three months ended September September: see month. 30th are attached. The following commentary is made in respect to those statements, including an analysis of certain information contained therein. Net Profit Attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to Members of the Parent Entity The reported net profit attributable to members of the parent entity consisted of the following items:
3 Months Ended
September 30,
2004 2003
----------- -----------
US $ Millions (except
per ADR amounts)
Revenue $ 5,191 $ 4,649
----------- -----------
Operating income 805 719
Net profit from associated entities before
other items 96 57
Interest expense, net (107) (114)
Exchangeable securities expense (18) (18)
----------- -----------
Profit before income tax expense, outside
equity interest and other items 776 644
Income tax expense (247) (199)
Outside equity interest (62) (59)
----------- -----------
Net profit before other items 467 386
----------- -----------
Other items, net of tax and outside equity
interest 69 36
----------- -----------
Net profit attributable to members of the
parent entity $ 536 $ 422
=========== ===========
Earnings per ADR (diluted) on net profit
before other items, net $ 0.32 $ 0.29
=========== ===========
Weighted average number of ADRs outstanding in
millions (diluted) 1,472 1,298
=========== ===========
The following commentary discusses the major components of these results.
Consolidated Operating Income 3 Months Ended
September 30,
2004 2003
-------------- ------------
US $ Millions
Filmed Entertainment $ 285 $ 328
Television 233 179
Cable Network Programming 196 133
Direct Broadcast Satellite Television (121) (117)
Magazines & Inserts 64 58
Newspapers 120 102
Book Publishing 60 59
Other (32) (23)
-------------- ------------
Consolidated Operating Income $ 805 $ 719
============== ============
REVIEW OF OPERATING RESULTS FILMED ENTERTAINMENT The Filmed Entertainment segment reported first quarter operating income of $285 million versus $328 million reported in the same period a year ago. The current quarter results primarily reflect strong worldwide theatrical revenues and increased contributions from the worldwide home entertainment release of film and television titles which were more than offset by lower syndication profits from Twentieth Century Fox Television (TCFTV). Current quarter film results were largely driven by the continued strong theatrical performances of The Day After Tomorrow and Dodgeball and strong worldwide home entertainment contributions from various titles, most notably The Star Wars Trilogy A company founded in 1979 by Gene Amdahl to commercialize wafer scale integration and build supercomputers. It raised a quarter of a billion dollars, the largest startup funding in history, but could not create its 2.5" superchip. , Johnson Family Vacation VACATION. That period of time between the end of one term and beginning of another. During vacation, rules and orders are made in such cases as are urgent, by a judge at his chambers. and Man on Fire as well as from the distribution of Passion of the Christ Christ: see Jesus. Christ forgives man for his sins. [Christianity: Misc.] See : Forgiveness Christ See also Passion of Christ. Agnus Dei lamb of god. . These contributions were partially offset by the marketing costs for several successful releases including I, Robot I, Robot is a collection of nine English language science fiction short stories by Isaac Asimov, first published by Gnome Press in 1950 in an edition of 5,000 copies. , which has grossed over $330 million in worldwide box office since its July July: see month. release, and Alien alien, in law, any person residing in one political community while owing allegiance to another. A procedure known as naturalization permits aliens to become citizens. vs. Predator predator an animal that derives its life support by predation. , which was released in August and has grossed over $100 million worldwide. The first quarter a year ago included the worldwide home entertainment performances of Phone Booth and Daredevil. At TCFTV, earnings declined year-on-year primarily reflecting syndication profits in last year's first quarter from the initial releases of Angel and Judging Amy Judging Amy is an American television drama that aired from September 19, 1999 until May 3, 2005 on CBS. The show stars Amy Brenneman of NYPD Blue and Tyne Daly of Cagney & Lacey. as well as contributions from M*A*S*H. During the current quarter, TCFTV continued its strong home entertainment sales of television series, most notably from The Simpsons, Futurama This article is about the television series. For the exhibit and ride, see Futurama (New York World's Fair). Futurama is an Emmy Award-winning animated American sitcom created by Matt Groening, who also created The Simpsons and Family Guy. TCFTV has received orders for 23 series in the current broadcast season including Arrested Development which garnered the Emmy Emmy awarded annually for best achievements in television programing and performance. [TV: Misc.] See : Prize for outstanding comedy series. TELEVISION The Television segment reported first quarter operating income of $233 million, an increase of 30% versus the same period a year ago primarily reflecting double-digit earnings improvement at the FOX Broadcasting Company Noun 1. broadcasting company - a company that manages tv or radio stations company - an institution created to conduct business; "he only invests in large well-established companies"; "he started the company in his garage" and continued profit growth at STAR. At the FOX Broadcasting Company, operating losses improved by $35 million as higher advertising pricing and lower programming costs for the primetime entertainment schedule were partially offset by a 12% decline in primetime ratings and the absence of the Emmy awards Emmy award Annual presentation for outstanding achievement in U.S. television. Its name is taken from the nickname “immy” for the image orthicon, a television camera tube. which were broadcast on FOX in the first quarter a year ago. Subsequent to quarter-end, primetime ratings have improved as Major League Baseball "MLB" and "Major Leagues" redirect here. For other uses, see MLB (disambiguation) and Major Leagues (disambiguation). Major League Baseball (MLB) is the highest level of play in North American professional baseball. World Series ratings increased 23% over prior year, making it the highest rated World Series since 1999. Fox Television Stations The Fox Television Stations (FTS) are a group of television stations located throughout the United States which are owned-and-operated by the Fox Broadcasting Company. FTS also produces the Fox program COPS. (FTS FTS facteur thymique sérique. ) first quarter operating income increased slightly over the same period a year ago despite competition from the Olympics Olympics Sports medicine An international competition among (traditionally) nonprofessional athletes trained in a particular summer or winter sport, which is held every 4 yrs in a selected city. See Paralympics, Special Olympics, World Medical Games. during August and weaker primetime ratings. Current year earnings growth primarily resulted from lower entertainment programming costs primarily due to the expiration EXPIRATION. Cessation; end. As, the expiration of, a lease, of a contract, or statute. 2. In general, the expiration of a contract puts an end to all the engagements of the parties, except to those which arise from the non- fulfillment of obligations created of various syndicated programs partially offset by an expansion of local news in several FTS markets. STAR's first quarter operating income increased dramatically on revenue expansion of 14% versus the same quarter a year ago. Revenue gains were primarily driven by growing advertising in India India, officially Republic of India, republic (2005 est pop. 1,080,264,000), 1,261,810 sq mi (3,268,090 sq km), S Asia. The second most populous country in the world, it is also sometimes called Bharat, its ancient name. India's land frontier (c. and China as well as by higher subscription revenues from the international distribution of local Indian channels. CABLE NETWORK PROGRAMMING Cable Network Programming reported first quarter operating income of $196 million, an increase of $63 million over last year's results. The 47% growth reflects continued strength across all of the Company's primary cable channels and the absence of losses from the Los Angeles Dodgers "Dodgers" and "Brooklyn Dodgers" redirect here. For the American football team, see Brooklyn Dodgers (football). For the Eastern Basketball Association team, see Brooklyn Dodgers (basketball). which was sold during Fiscal 2004. Fox News Channel (FNC FNC - Federal Networking Council ) reported operating income growth of 20% in the first quarter as strong revenue growth, primarily from increased advertising, more than offset higher costs associated with coverage of the political conventions. FNC's ratings during the Republican National Convention defeated not only every other cable news network but also beat the broadcast networks during head to head coverage. Viewership view·er·ship n. The people who watch a television program or motion picture: a largely male viewership. in the quarter was up 29% on a 24-hour basis and up 37% in primetime where FNC had more total viewers VIEWERS. Persons appointed by the courts to see and examine certain matters, and make a report of the facts together with their opinion to the court. In practice they are usually appointed to lay out roads and the like. Vide Experts. than CNN CNN or Cable News Network Subsidiary company of Turner Broadcasting Systems. It was created by Ted Turner in 1980 to present 24-hour live news broadcasts, using satellites to transmit reports from news bureaus around the world. , MSNBC MSNBC Microsoft/National Broadcasting Company , Headline HEADLINE Hybrid Electronic Access and Delivery in the Library Networked Environment News and CNBC CNBC Center for the Neural Basis of Cognition (artificial intelligence) CNBC Consumer News and Business Channel CNBC Congress of National Black Churches, Inc. combined. At our other cable channels (including the Regional Sports Networks (RSNs), the FX Channel (FX) and SPEED Channel) operating profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. increased 39% for the quarter driven by strong revenue growth at the RSNs and FX. Higher affiliate revenues at the RSNs, largely due to increased rates and additional DTH (Direct-To-Home) Typically refers to satellite TV broadcasting directly to a dish antenna on the roof of a house. See DBS. subscribers, were partially offset by increased programming costs from higher rights fees and additional events versus the first quarter a year ago. At FX, increased advertising revenues were driven by the ratings success of Nip/Tuck Nip/Tuck is an Emmy and Golden Globe award-winning American television medical drama series created by Ryan Murphy for FX Networks. The show follows the lives of two Miami plastic surgeons, Sean McNamara (Dylan Walsh) and Christian Troy (Julian McMahon). , basic cable's #1 series among Adults 18-49, and the new original series Rescue Me. During the quarter FX was the fifth ranked basic cable channel among Adults 18-49. DIRECT BROADCAST SATELLITE TELEVISION SKY Italia reported first quarter operating loss of $121 million, in line with the loss of $117 million reported in the first quarter a year ago. Revenue, in local currency terms, grew 45% primarily driven by strong subscriber additions over the past year including more than 167,000 net new subscribers during the first quarter which resulted in SKY Italia's subscriber base reaching 2.83 million at quarter end. The revenue growth was offset by increased subscriber acquisition costs as well as higher programming spending during the quarter primarily due to the airing of additional soccer matches and the addition of ten new entertainment channels on the basic programming tier. Additionally, during the quarter the Company incurred costs associated with the swap-out of set-top boxes The cable TV box that sits on "top" of the TV "set," although it is often located several feet away in an equipment rack. The set-top box descrambles the premium channels and provides a tuner for the higher cable numbers that very old TVs did not support. which were using outdated out·dat·ed adj. Out-of-date; old-fashioned. outdated Adjective old-fashioned or obsolete Adj. 1. encryption software Encryption software is software whose main task is encryption and decryption of data, usually in the form of files on hard drives and removable media, email messages, or in the form of packets sent over computer networks. . MAGAZINES AND INSERTS The Magazines and Inserts segment reported first quarter operating income of $64 million, a 10% increase versus the same period a year ago. The improvement was primarily driven by higher contributions from the InStore In`store´ v. t. 1. To store up; to inclose; to contain. division on higher advertising revenues. Free Standing Inserts was in line with a year ago as increased demand for packaged goods Noun 1. packaged goods - groceries that are packaged for sale foodstuff, grocery - (usually plural) consumer goods sold by a grocer plural, plural form - the form of a word that is used to denote more than one pages was offset by lower rates. NEWSPAPERS The Newspaper segment reported first quarter operating income of $120 million, up 18% versus the same period a year ago reflecting advertising revenue increases in the U.K. and Australia. The Australian Australian pertaining to or originating in Australia. Australian bat lyssavirus disease see Australian bat lyssavirus disease. Australian cattle dog a medium-sized, compact working dog used for control of cattle. newspaper group reported a 22% increase in operating income in local currency terms, driven by an 11% increase in advertising revenue over a year ago. Advertising growth was fueled by display advertising which achieved solid gains across all sectors as well as by classified advertising with particular strength in the employment sector. The U.K. newspaper group's operating income was in-line In-line Used in the context of general equities. (1) An order or market in a specific security within the inside market; 2) any announcement (earnings) that adheres closely to Wall Street analysts' expectations. with the first quarter a year ago in local currency terms as advertising revenue growth of 6% and a slight increase in circulation revenues were offset by higher costs principally due to production of the Times Compact. Advertising revenue growth was achieved across all titles, with the largest increase at The Sun from higher volumes on color display and classifieds. BOOK PUBLISHING book publishing. The term publishing means, in the broadest sense, making something publicly known. Usually it refers to the issuing of printed materials, such as books, magazines, periodicals, and the like. HarperCollins HarperCollins is a publishing company owned by News Corporation. It is the combination of the publishers William Collins, Sons and Co Ltd, a British company, and Harper & Row, an American company. The worldwide CEO of HarperCollins is Jane Friedman. reported operating income of $60 million during the quarter versus $59 million in the same period a year ago. The results reflect strength worldwide, particularly with the ongoing success of Zondervan's The Purpose Driven Life, as well as strong sales of Lemony lem·on n. 1. a. A spiny, Asian evergreen tree (Citrus limon) widely cultivated for its yellow, egg-shaped fruit. b. The fruit of this tree, having a yellow aromatic rind and juicy, acid pulp. 2. Snicket's The Grim Grotto, American American, river, 30 mi (48 km) long, rising in N central Calif. in the Sierra Nevada and flowing SW into the Sacramento River at Sacramento. The discovery of gold at Sutter's Mill (see Sutter, John Augustus) along the river in 1848 led to the California gold rush of Soldier by General Tommy Franks Tommy Ray Franks (born June 17, 1945 in Wynnewood, Oklahoma) is a retired General in the United States Army, previously serving as the Commander of the United States Central Command, overseeing United States Armed Forces operations in a 25-country region, including the Middle East. , The Proper Care and Feeding of Husbands by Dr. Laura Schlessinger Laura Catherine Schlessinger (born January 16, 1947) is an American cultural and conservative commentator, best known as host of the popular Dr. Laura radio advice call-in show. The show is nationally syndicated and runs three hours a day on weekdays. and the paperback edition of David Beckham's My Side. During the quarter, HarperCollins had 25 titles on The New York Times bestseller list with four titles that reached #1. OTHER MATTERS Following the quarter the Company acquired Telecom Italia S Telecom Italia is formerly a partially state-owned Italian telco. It was once known as SIP, and it has the largest user base in Italy. Telecom Italia also owns shares in Telecom Argentina and Telecom Personal, fixed and cellular networks in Argentina. .p.A.'s 19.9% stake in Sky Italia for EUR EUR In currencies, this is the abbreviation for the Euro. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. 88 million bringing News Corporation's ownership of Sky Italia to 100%. Also following the quarter the Company's shareholders, option holders and the Federal Court of Australia The Federal Court of Australia is the Australian court in which most civil disputes, and some summary criminal matters, governed by federal law are decided. Cases are heard at first instance by single Judges. approved the reincorporation changing the Company's place of incorporation to the United States. In connection with the reincorporation, the Company will acquire from the Murdoch Interests the 58% controlling interest controlling interest The ownership of a quantity of outstanding corporate stock sufficient to control the actions of the firm. Controlling interest often involves ownership of significantly less than 51% of a firm's outstanding stock because many owners fail in Queensland Queensland, state (1991 pop. 2,477,152), 667,000 sq mi (1,727,200 sq km), NE Australia. Brisbane is the capital; other important cities are Gold Coast, Toowoomba, Townsville, Rockhampton, Cairns, and Ipswich. Press Pty Limited that the Company does not already own. The transactions are expected to be completed on November November: see month. 12, 2004. During October October: see month. , the Company and its 34 percent investee, The DIRECTV Group, Inc., announced a series of transactions with Grupo Televisa For the article on the defunct Venezuelan television channel, see Televisa Venezuela. Televisa is the largest media company in the Spanish-speaking world[1], followed by TV Azteca, and a major player in the international entertainment business. , Globopar and Liberty Media International, Inc. that will result in the reorganization of the companies' direct-to-home See DTH. satellite TV platforms in Latin America Latin America, the Spanish-speaking, Portuguese-speaking, and French-speaking countries (except Canada) of North America, South America, Central America, and the West Indies. . The transactions will result in DIRECTV Latin America and Sky Latin America SKY Latin America refers to two closely related pay-TV providers, one based in Mexico, the other in Brazil. The Mexican company was founded in mid-1996, a joint venture between British Sky Broadcasting (BSkyB), News Corporation, Liberty Media and Grupo Televisa. consolidating their two DTH platforms into a single platform in each of the major territories served in the region. As part of these transactions, DIRECTV will acquire News Corporation's interests in Sky Brasil, Innova and Sky Multi-Country Partners. The completion of the reorganization is subject to the necessary governmental approvals. REVIEW OF ASSOCIATED ENTITIES RESULTS First quarter net profit from associated entities before other items was $96 million versus $57 million in the same period a year ago. The year-over-year improvement was primarily due to contributions from BSkyB and a comparatively favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. impact from foreign currency fluctuations at the Latin America DTH platforms, partially offset by recognition of losses at The DIRECTV Group. The Company's share of net profit (loss) from associated entities is as follows:
3 Months Ended
September 30,
% Owned 2004 2003
------------ -------- --------
US $ Millions
Sky Brasil 49.7%(a) $ 13 $ (8)
Innova - Mexico 30.0% 3 (10)
FOXTEL 25.0% (7) (3)
Other Associates Various (b) 87 78
-------- --------
Net profit from associated entities
before other items 96 57
Other Items (76) -
-------- --------
Net profit from associated entities $ 20 $ 57
======== ========
Further details on the associated entities follow. (a) Represents the Company's economic interest. The Company continues to hold a 36% equity interest in Sky Brasil. (b) Primarily comprising BSkyB, The DIRECTV Group, Gemstar-TV Guide International Gemstar-TV Guide International, Inc. is a media company that licenses interactive program guide technology to multichannel operators, such as cable and satellite television providers, and consumer electronics manufacturers, video recorder scheduling code under brands such as VCR , Fox Cable Networks Associates, Independent Newspapers Limited, and Queensland Press.
Sky Brasil (in US$)(1) 3 Months Ended
-----------------------------------------
September 30,
2004 2003*
-------------- -------------
Millions (except
subscribers)
Revenues (in local currency) R$ 194 R$ 162
Revenues $ 65 $ 55
Operating income 6 3
Net income (loss) $ 26 $ (17)
============== =============
News' reportable 49.7% share (in US$) $ 13 $ (8)
============== =============
Net Debt (excluding capitalized leases) $ 219 $ 205
Ending Subscribers 829,000 772,000
* Certain prior year amounts have been reclassified to conform to Verb 1. conform to - satisfy a condition or restriction; "Does this paper meet the requirements for the degree?" fit, meet coordinate - be co-ordinated; "These activities coordinate well" the current fiscal year presentation. Sky Brasil's revenues grew 20% in local currency terms compared to prior year, primarily driven by a higher subscriber base and increased average revenue per subscriber. The revenue growth was partly offset by increased programming costs mainly relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the Brazilian Soccer Championship. The increase in net income principally reflects the favorable impact of foreign currency fluctuations due to the strengthening of the Brazilian Real The real (IPA: [xe'aw] or [ʁe'aɫ], symbol: R$, ISO 4217 code: BRL, plural: reais) is the currency of Brazil. It is also the name of the earliest Brazilian currency (see from the Colonial period to 1942. on U.S. dollar denominated liabilities during the quarter.
Innova - Mexico (in US$)(1) 3 Months Ended
-----------------------------------------
September 30,
2004 2003
-------------- -------------
Millions (except
subscribers)
Revenues (in local currency) Ps. 1,162 Ps.909
Revenues $ 98 $ 85
Operating income 22 12
Net income (loss) $ 10 $(32)
============== =============
News' reportable 30% share (in US$) $ 3 $(10)
============== =============
Net Debt (excluding capitalized leases) $ 322 $339
Ending Subscribers 942,000 826,000
Innova's revenues grew 28% in local currency terms compared to prior year primarily driven by a 14% increase in the subscriber base as well as higher set-top box rentals. The increase in net income principally reflects the favorable impact of foreign currency fluctuations due to the strengthening of the Mexican Mexican named after or originating in Mexico. Mexican axolotl see ambystomamexicanum. Mexican beaded lizard (Heloderma horridum Peso on U.S. dollar denominated liabilities during the quarter.
FOXTEL (in A$) 3 Months Ended
----------------------------------------
September 30,
2004 2003*
-------------- -------------
Millions (except
subscribers)
Revenues A$ 232 A$206
Operating loss (49) (27)
Net loss A$ (39) A$(18)
============== =============
News' reportable 25% share (in US$) $ (7) $ (3)
============== =============
Net Debt (including capitalized leases) A$ 381 A$ 33
Ending Subscribers (including wholesale) 1,129,000 1,068,000
Ending Subscribers (excluding wholesale) 942,000 851,000
* Certain prior year amounts have been reclassified to conform to the current fiscal year presentation. FOXTEL's revenues increased 13%, principally due to an 11% increase in ending subscribers (excluding wholesale) and higher average revenue per subscriber. Net loss increased by A$21 million against the prior year as the increased subscriber revenues were more than offset by increased transmission costs as well as higher sales and marketing expenses relating to the launch of the new digital service on March 14, 2004, and higher depreciation and interest expenses. As of September 30th, approximately 40% of the FOXTEL managed subscriber base (excluding wholesale) was connected to the new digital service with 121,000 new and upgrade orders taken during the quarter. (1) Please refer to respective companies' earnings releases for detailed information FOREIGN EXCHANGE RATES Average foreign exchange rates used in the year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. profit results are as follows:
3 Months Ended
September 30,
2004 2003
---------------- --------------
Australian Dollar/U.S. Dollar 0.70 0.66
U.K. Pounds Sterling/U.S. Dollar 1.82 1.61
Euro/U.S. Dollar 1.22 1.13
To receive a copy of this press release through the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the , access News Corp's corporate Web site located at http://www.newscorp.com Audio from News Corp's conference call with analysts on the first quarter results can be heard live on the Internet at 5:00 p.m. Eastern Standard Time today. To listen to the call, visit http://www.newscorp.com Cautionary Statement Concerning Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. This document contains certain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. These statements are based on management's views and assumptions regarding future events and business performance as of the time the statements are made. Actual results may differ materially from these expectations due to changes in global economic, business, competitive market and regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. factors. More detailed information about these and other factors that could affect future results is contained in our filings with the Securities and Exchange Commission. The "forward-looking statements" included in this document are made only as of the date of this document and we do not have any obligation to publicly update any "forward-looking statements" to reflect subsequent events or circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or , except as required by law.
STATEMENT OF FINANCIAL PERFORMANCE 3 Months Ended
Note September 30,
2004 2003
-------- --------
US $ Millions
(except per ADR
amounts)
Sales revenue 1 $ 5,191 $ 4,649
Operating expenses (4,386) (3,930)
-------- --------
Operating income 1 805 719
Net profit from associated entities 20 57
Borrowing costs (149) (148)
Interest income 42 34
-------- --------
Net borrowing costs (107) (114)
Exchangeable securities expense (18) (18)
Other items before income tax, net 3 61
-------- --------
Profit from ordinary activities before income tax 703 705
-------- --------
Income tax (expense) benefit on:
Ordinary activities before other items (247) (199)
Other items 128 (22)
-------- --------
Net income tax expense (119) (221)
-------- --------
Net profit from ordinary activities after tax 584 484
Net profit attributable to outside equity
interests (48) (62)
----------------------------------------------------------------------
Net Profit Attributable to Members of the Parent
Entity $ 536 $ 422
----------------------------------------------------------------------
Net exchange gains recognized directly in equity 38 42
-------- --------
Total change in equity other than those resulting
from transactions with owners as owners $ 574 $ 464
======== ========
Diluted earnings per ADR on net profit
attributable to members of the parent entity
Ordinary ADRs $ 0.32 $ 0.28
Preferred limited voting ordinary ADRs $ 0.38 $ 0.34
Ordinary and preferred limited voting ordinary
ADRs $ 0.36 $ 0.32
STATEMENT OF FINANCIAL POSITION Sept. 30, June 30,
2004 2004
--------- --------
ASSETS US $ Millions
Current Assets
Cash $ 4,148 $ 4,051
Cash on deposit - 287
Receivables 4,792 4,214
Inventories 1,594 1,530
Other 416 393
--------- --------
Total Current Assets 10,950 10,475
--------- --------
Non-Current Assets
Receivables 730 751
Investments in associated entities 10,498 10,447
Other investments 522 566
Inventories 2,681 2,669
Property, plant and equipment 3,937 3,883
Publishing rights, titles and television licenses 21,758 21,761
Goodwill 234 222
Other 678 681
--------- --------
Total Non-Current Assets 41,038 40,980
--------- --------
Total Assets $51,988 $51,455
========= ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Interest bearing liabilities $ 451 $ 1,084
Payables 6,016 5,476
Tax liabilities 364 492
Provisions 367 232
--------- --------
Total Current Liabilities 7,198 7,284
--------- --------
Non-Current Liabilities
Interest bearing liabilities 7,606 7,618
Payables 1,984 1,986
Tax liabilities 832 680
Provisions 654 685
--------- --------
Total Non-Current Liabilities Excluding
Exchangeable Securities 11,076 10,969
--------- --------
Exchangeable securities 1,447 1,433
--------- --------
Total Liabilities 19,721 19,686
Shareholders' Equity
Contributed equity 21,462 21,447
Reserves 2,816 2,773
Retained profits 3,999 3,606
--------- --------
Shareholders' equity attributable to members of
the parent entity 28,277 27,826
Outside equity interests in controlled entities 3,990 3,943
--------- --------
Total Shareholders' Equity 32,267 31,769
--------- --------
Total Liabilities and Shareholders' Equity $51,988 $51,455
========= ========
STATEMENT OF CASH FLOWS 3 Months Ended
September 30,
2004 2003
------- -------
Operating activity US $ Millions
Net profit attributable to members of the parent
entity $ 536 $ 422
Adjustment for non-cash and non-operating activities:
Equity earnings, net (96) (57)
Distributions from investees 3 1
Outside equity interest 62 59
Depreciation and amortization 138 144
Other items, net (69) (36)
Change in assets and liabilities:
Receivables (577) (425)
Inventories (146) (189)
Payables 586 285
Other liabilities 145 176
------- -------
Cash provided by operating activity 582 380
Investing and other activity
Property, plant and equipment (135) (85)
Acquisitions, net of cash acquired (34) (42)
Investments in associated entities (44) (31)
Other investments (26) (31)
Proceeds from sale of non-current assets and other 124 244
------- -------
Cash (used in) provided by investing activity (115) 55
Financing activity
Repayment of debt and exchangeable securities (655) (195)
Decrease in cash on deposit 275 191
Issuance of shares 14 14
Dividends paid (7) (9)
------- -------
Cash (used in) provided by financing activity (373) 1
------- -------
Net increase in cash 94 436
Opening cash balance 4,051 4,477
Exchange movement on opening balance 3 3
------- -------
Closing cash balance $4,148 $4,916
======= =======
Note 1 - SEGMENT DATA 3 Months Ended
September 30,
BY GEOGRAPHIC AREAS 2004 2003
------- -------
US $ Millions
Revenues
United States $3,495 $3,311
Europe 1,227 928
Australasia 469 410
------- -------
$5,191 $4,649
======= =======
Operating Income
United States $ 737 $ 690
Europe (23) (25)
Australasia 91 54
------- -------
$ 805 $ 719
======= =======
BY INDUSTRY SEGMENT
Revenues
Filmed Entertainment $1,377 $1,248
Television 1,004 1,011
Cable Network Programming 630 627
Direct Broadcast Satellite Television 415 264
Magazines and Inserts 232 222
Newspapers 865 739
Book Publishing 364 347
Other 304 191
------- -------
$5,191 $4,649
======= =======
Operating Income
Filmed Entertainment $ 285 $ 328
Television 233 179
Cable Network Programming 196 133
Direct Broadcast Satellite Television* (121) (117)
Magazines and Inserts 64 58
Newspapers 120 102
Book Publishing 60 59
Other (32) (23)
------- -------
$ 805 $ 719
======= =======
Note 2 - SUPPLEMENTAL FINANCIAL DATA The Company considers net profit before other items to be an important indicator of the Company's operating performance on a consolidated basis. Net profit before other items, defined as net profit attributable to members of the parent entity before other items related to the Company and associated entities, net of applicable income tax expenses and outside equity interests, eliminates the effect of transactions that are considered significant by reason of their size, nature or effect on the Company's financial performance for the year. Net profit before other items, which is the information reported to and used by the Company's chief decision maker for the purpose of making decisions about the allocation of resources allocation of resources Apportionment of productive assets among different uses. The issue of resource allocation arises as societies seek to balance limited resources (capital, labour, land) against the various and often unlimited wants of their members. to segments and assessing their performance, should be considered in addition to, not as a substitute for the Company's operating income, net profit attributable to members of the parent entity, cash flows and other measures of financial performance prepared in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting in Australia. Net profit before other items does not reflect cash available to fund requirements, and the items excluded from net profit before other items, such as other revenues and expenses, are significant components in assessing the Company's financial performance. The following table reconciles certain components of net profit attributable to members of the parent entity as presented on page 2 of this release to the presentation required under Australian GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). as required by Australian Accounting Standard AASB AASB Australian Accounting Standards Board AASB Alabama Association of School Boards AASB Association of Alaska School Boards AASB American Association of Small Businesses AASB Association of American Schools in Brazil AASB Advanced Audio Server Base 1018 "Statement of Financial Performance" on page 11 of this release.
3 Months
Ended
September 30,
2004 2003
------ ------
US $ Millions
Total other items (page 2) $ 69 $ 36
Reclassification of other items - associated entities 76 -
Reclassification of income tax and net profit
attributable to outside equity interest (142) 25
------ ------
Other items before income tax, net (page 11) $ 3 $ 61
====== ======
Net profit from associated entities before other items
(page 2) $ 96 $ 57
Reclassification of other items (76) -
------ ------
Net profit from associated entities (page 11) $ 20 $ 57
====== ======
Income tax expense (page 2) $(247) $(199)
Reclassification of income tax expense on
other items 128 (22)
------ ------
Net income tax expense (page 11) $(119) $(221)
====== ======
SUPPLEMENTAL FINANCIAL DATA (continued)
3 Months Ended
September 30,
2004 2003
------- -------
US $ Millions
Outside equity interest (page 2) $ (62) $ (59)
Reclassification of outside equity interest on
other items, net 14 (3)
------- -------
Net profit attributable to outside equity interest
(page 11) $ (48) $ (62)
======= =======
Net profit before other items (page 2) $ 467 $ 386
Other items before income tax, net 3 61
Reclassification of income tax and net profit
attributable to outside equity interest 142 (25)
Reclassification of other items - associated entities (76) -
------- -------
Net profit attributable to members of the parent
entity (page 11) $ 536 $ 422
======= =======
Earnings per ADR on net profit before other items, net
(page 2) $ 0.32 $ 0.29
Earnings per ADR on other items before income tax, net - 0.05
Earnings per ADR on reclassification of income tax and
net profit attributable to outside equity interest 0.09 (0.02)
Earnings per ADR on reclassification of other items
associated entities (0.05) -
------- -------
Diluted earnings per ADR on net profit attributable to
members of the parent entity (page 11) $ 0.36 $ 0.32
======= =======
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