FISCAL 2016 FIRST QUARTER KEY FINANCIAL
HIGHLIGHTS
- Revenues of $2.01 billion compared
to $2.11 billion in the prior year
- Reported Total Segment EBITDA of
$165 million compared to $194 million in the prior year
- Income from continuing operations
was $143 million compared to $109 million in the prior
year
- Reported EPS from continuing
operations were $0.22 compared to $0.15 in the prior year
- Results from the Digital Education
segment are reflected as discontinued operations
News Corporation (“News Corp” or the “Company”) (NASDAQ:NWS,
NWSA; ASX:NWS, NWSLV) today reported financial results for the
three months ended September 30, 2015.
Commenting on the results, Chief Executive Robert Thomson
said:
“News Corp is on track in its transition to a more digital and
global future, having successfully integrated several recent
acquisitions and built a powerful platform for future growth. We
are focused on driving sustainable expansion of revenue and profit,
and leveraging the potency of our brands, while diligently
controlling costs to maximize long-term returns for all investors.
Foreign exchange fluctuations negatively impacted reported results,
but this should not obscure the progress at many of our businesses.
In fact, News Corp’s revenues, excluding the effect of currency,
grew 4% this quarter, underscoring the value of our shift to higher
growth businesses and our prudent reinvestment strategy.
We are particularly pleased with the momentum at realtor.com®,
which is significantly ahead of schedule on key metrics. We are
now, by some reckoning, the world's largest digital property
listings company and we see a particularly bright future in the
sector, especially in the U.S. where we believe the national real
estate market is still returning to health.
Our digital expertise has been enhanced by the addition of
Unruly and Checkout 51, which we expect will have a positive impact
across our businesses and around the world. We are already seeing
significant new opportunities because of Unruly's unique skills in
measuring the social and viral penetration of advertising
campaigns. We are on the cusp of significant upheaval in the
advertising market, which has been distorted by trash traffic,
invisible impressions and mockable metrics, to the detriment of
advertisers, large and small.
With recent M&A activity highlighting the rising value of
global financial news brands, the progress at Dow Jones and The
Wall Street Journal is noteworthy, with growth in print and digital
advertising, and improvements in the professional information
business.”
FIRST QUARTER RESULTS FROM CONTINUING OPERATIONS
The Company reported fiscal 2016 first quarter total revenues of
$2.01 billion, a 4% decline as compared to prior year first quarter
revenues of $2.11 billion. Adjusted revenues (as defined in Note 1)
declined 1% compared to the prior year, as strong growth in the
Digital Real Estate Services segment from REA Group Limited (“REA
Group”) was offset by lower advertising revenues at the News and
Information Services segment. Fiscal 2016 first quarter reported
revenues include $85 million from the acquisition of Move, Inc.
(“Move”) in November 2014, which was more than offset by negative
foreign currency fluctuations, which reduced total reported
revenues for the first quarter of fiscal 2016 by $188 million as
compared to the prior year.
The Company reported first quarter Total Segment EBITDA of $165
million, a 15% decline as compared to $194 million in the prior
year. Adjusted Total Segment EBITDA (as defined in Note 1) declined
7%, or $14 million, compared to the prior year, as continued
strength at the Digital Real Estate Services and Cable Network
Programming segments, coupled with lower fees and costs related to
the U.K. Newspaper Matters (as defined below), were more than
offset by the declines at the News and Information Services
segment, including higher legal costs at News America Marketing,
and declines at the Book Publishing segment. Negative foreign
currency fluctuations reduced Total Segment EBITDA by $29 million
as compared to the prior year.
Income from continuing operations was $143 million as compared
to $109 million in the prior year due to a tax benefit from the
release of valuation allowances resulting from the planned disposal
of the digital education business, partially offset by lower Total
Segment EBITDA, lower Other, net and lower equity earnings of
affiliates.
Earnings per share from continuing operations available to News
Corporation stockholders were $0.22 as compared to $0.15 in the
prior year. Adjusted EPS (as defined in Note 3) were $0.05 compared
to $0.13 in the prior year.
SEGMENT REVIEW
For the three months ended
September 30, 2015 2014 % Change (in
millions) Better/(Worse)
Revenues: News and
Information Services $ 1,290 $ 1,451 (11) % Book Publishing 409 406
1 % Digital Real Estate Services 191 112 71 % Cable Network
Programming 124 139 (11) % Other - - **
Total Revenues $ 2,014 $ 2,108 (4) %
Segment
EBITDA: News and Information Services $ 83 $ 105 (21) % Book
Publishing 42 55 (24) % Digital Real Estate Services 57 57 - %
Cable Network Programming 28 32 (13) % Other(a) (45)
(55) 18 %
Total Segment EBITDA $ 165 $ 194 (15) % **
- Not meaningful
(a)
Other Segment EBITDA includes fees and costs, net of
indemnification, related to the U.K. Newspaper Matters of $5
million and $14 million for the three months ended September 30,
2015 and 2014, respectively.
News and Information Services
Revenues for the first quarter of fiscal 2016 decreased $161
million, or 11%, compared to the prior year. Total segment
advertising revenues declined 13%, primarily due to negative
foreign currency fluctuations, weakness in the print advertising
market, most notably in Australia, and lower revenues at News
America Marketing. Circulation and subscription revenues declined
6%, due to negative foreign currency fluctuations, partially offset
by higher subscription pricing and cover price increases. At Dow
Jones, the Company saw growth in both print and digital advertising
revenues and higher circulation revenues at The Wall Street Journal
as well as modest growth of professional information business
revenues.
Adjusted revenues declined 3% compared to the prior year. Total
segment advertising revenues declined 5% and circulation and
subscription revenues increased 2%, excluding the impact of $60
million and $45 million, respectively, from negative foreign
currency fluctuations.
Segment EBITDA decreased $22 million in the quarter, or 21%, as
compared to the prior year. Adjusted Segment EBITDA decreased 15%
compared to the prior year due to lower advertising revenues and $5
million of higher legal expenses at News America Marketing.
Book Publishing
Revenues in the quarter increased $3 million, or 1%, compared to
the prior year, driven by strong sales in General Books resulting
from the popularity of Go Set a Watchman by Harper Lee and the
inclusion of the results of Harlequin, acquired in August 2014,
partially offset by lower revenues from the Divergent series, lower
e-book sales and negative foreign currency fluctuations. Digital
sales represented 20% of consumer revenues for the quarter. Segment
EBITDA for the quarter decreased $13 million, or 24%, from the
prior year, primarily due to the factors noted above. Adjusted
revenues decreased 2% and Adjusted Segment EBITDA decreased 33%
compared to the prior year.
Digital Real Estate Services
Revenues in the quarter increased $79 million, or 71%, compared
to the prior year, primarily driven by the inclusion of the results
of Move, acquired in November 2014. At REA Group, increased
revenues from greater residential listing depth product penetration
and improved listing volumes in Australia were more than offset by
negative foreign currency fluctuations. Segment EBITDA in the
quarter was flat compared to the prior year, primarily due to
negative foreign currency fluctuations. Adjusted revenues and
Adjusted Segment EBITDA increased 21% and 31%, respectively,
compared to the prior year.
In the first quarter, Move’s revenues increased 33% on a
stand-alone basis to $85 million from $64 million in the prior
year. Move saw continued strength in its Connection for
Co-Brokerage product and non-listing Media revenues, coupled with
market share gains for its Top Producer software product. Based on
Move’s internal data, average monthly unique users of
realtor.com®’s web and mobile sites for the quarter grew 43%
year-over-year to approximately 46 million, which was driven by 64%
growth in mobile users.
Cable Network Programming
In the first quarter of fiscal 2016, revenues decreased $15
million, or 11%, compared to the prior year. Adjusted revenues
increased 10%, primarily due to higher affiliate and advertising
revenues. Segment EBITDA in the quarter decreased $4 million, or
13%, compared with the prior year. Adjusted Segment EBITDA
increased 9%, primarily due to an increase in revenues, as noted
above, partially offset by expected higher programming rights costs
related to the Rugby World Cup. Negative foreign currency
fluctuations reduced reported revenues for the first quarter of
fiscal 2016 by $29 million as compared to the prior year.
Other
Segment EBITDA in the quarter improved by $10 million compared
to the prior year, primarily due to lower fees and costs, net of
indemnification, related to the claims and investigations arising
out of certain conduct at The News of the World (the “U.K.
Newspaper Matters”).
The net expense related to the U.K. Newspaper Matters was $5
million for the three months ended September 30, 2015 as compared
to $14 million for the three months ended September 30, 2014.
DISCONTINUED OPERATIONS
During the first quarter of fiscal 2016, management approved a
plan to dispose of the Company’s digital education business. As a
result of the plan and the discontinuation of further significant
business activities in the Digital Education segment, the assets
and liabilities of this segment were classified as held for sale
and the results of operations have been reported as discontinued
operations for all periods presented.
In the first quarter of fiscal 2016, Income from discontinued
operations, net of tax, was $46 million, which includes a pre-tax
non-cash impairment charge of $76 million reflecting a write down
of the digital education business to its fair value less costs to
sell and a tax benefit of $151 million recognized as a result of
management’s plan to dispose of the digital education business. On
September 30, 2015, the Company sold the Amplify Insight and
Amplify Learning businesses for no material gain or loss.
REVIEW OF EQUITY EARNINGS OF AFFILIATES’ RESULTS
Quarterly equity earnings from affiliates were $8 million
compared to $25 million in the prior year.
For the three months ended September
30, 2015 2014 (in millions) Foxtel(a) $ 9 $ 25
Other equity affiliates, net (1) - Total equity
earnings of affiliates $ 8 $ 25
(a)
The Company amortized $12 million related to excess cost
over the Company’s proportionate share of its investment’s
underlying net assets allocated to finite-lived intangible assets
during the three months ended September 30, 2015 and $16 million in
the corresponding period of fiscal 2015. Such amortization is
reflected in Equity earnings of affiliates in the Statements of
Operations.
On a U.S. GAAP basis, Foxtel revenues, for the three months
ended September 30, 2015, decreased $141 million to $587 million
from $728 million in the prior year period. In local currency,
Foxtel revenues increased 3% due to higher subscribers. Total
closing subscribers were approximately 2.9 million as of September
30, 2015, with the majority of growth coming from cable and
satellite subscribers, which increased 8% compared to the prior
year period. In the quarter, cable and satellite churn improved to
10.1% from 10.9% in the prior year.
Foxtel EBITDA decreased $85 million to $140 million from $225
million. In local currency, Foxtel EBITDA declined 21% due to
increased programming costs, increased costs associated with higher
sales volumes, and the public launch of Triple Play.
Foxtel operating income for the three months ended September 30,
2015 and 2014 was $85 million and $137 million, respectively, after
depreciation and amortization of $55 million and $88 million,
respectively. Operating income decreased as a result of the factors
noted above, partially offset by lower depreciation expense
resulting from Foxtel’s reassessment of the useful lives of cable
and satellite installations due to lower subscriber churn. Foxtel’s
net income of $42 million decreased from $81 million in the prior
year period as a result of lower operating income as noted
above.
FREE CASH FLOW AVAILABLE TO NEWS CORPORATION
Free cash flow available to News Corporation is a non-GAAP
financial measure defined as net cash provided by continuing
operating activities, less capital expenditures, and REA Group free
cash flow, plus cash dividends received from REA Group.
Free cash flow available to News Corporation excludes cash flows
from discontinued operations.
The Company considers free cash flow available to News
Corporation to provide useful information to management and
investors about the amount of cash generated by the business after
capital expenditures, which can then be used for strategic
opportunities including, among others, investing in the Company’s
business, strategic acquisitions, strengthening the Company’s
balance sheet, dividend payouts and repurchasing stock. A
limitation of free cash flow available to News Corporation is that
it does not represent the total increase or decrease in the cash
balance for the period. Management compensates for the limitation
of free cash flow available to News Corporation by also relying on
the net change in cash and cash equivalents as presented in the
Company’s consolidated statements of cash flows prepared in
accordance with GAAP which incorporates all cash movements during
the period.
The following table presents a reconciliation of net cash
provided by continuing operating activities to free cash flow
available to News Corporation:
For the three months endedSeptember
30,
2015 2014 (in millions) Net cash provided by
continuing operating activities $ 141 $ 220 Less: Capital
expenditures (63) (94) 78 126 Less: REA Group free
cash flow (35) (22) Plus: Cash dividends received from REA Group
24 26 Free cash flow available to News Corporation $
67 $ 130
Free cash flow available to News Corporation in the three months
ended September 30, 2015 was $67 million compared to $130 million
in the prior year period. The decline was primarily due to lower
Total Segment EBITDA, the absence of a special dividend received
from a cost method investment of $17 million during the three
months ended September 30, 2014, as well as higher restructuring
payments of $14 million. Capital expenditures were lower due to the
absence of costs associated with the relocation of the Company’s
U.K. operations to a new site in London in fiscal 2015. The impact
of foreign currency fluctuations of the U.S. dollar against local
currencies resulted in a decrease of free cash flow available to
News Corporation of approximately $17 million, or 13% for the three
months ended September 30, 2015 as compared to the prior year.
SUBSEQUENT EVENT
On November 2, 2015, REA Group announced a proposed transaction
to acquire all of the outstanding shares of iProperty Group Limited
(ASX: IPP) (“iProperty”) it does not already own for A$4.00 per
share in cash or iProperty shareholders can elect to receive A$1.20
cash and 0.7 shares in a newly-formed company, subject to a maximum
20% indirect equity interest in iProperty. The aggregate
consideration for the transaction is expected to be approximately
A$500 million (approximately US$350 million) and will be funded
primarily from new debt facilities at REA Group totaling A$480
million, with the remainder from REA Group’s existing cash. The
transaction is subject to a number of standard conditions,
including iProperty shareholder and court approval, no material
adverse change and no prescribed occurrences, and is expected to be
completed during the first quarter of calendar 2016. The
acquisition of iProperty extends REA Group’s market leading
business in Australia to attractive markets throughout Southeast
Asia.
COMPARISON OF ADJUSTED INFORMATION TO U.S. GAAP
INFORMATION
Adjusted revenues, Adjusted Total Segment EBITDA, Total Segment
EBITDA, Adjusted net income available to News Corporation
stockholders, Adjusted EPS and Free cash flow available to News
Corporation are non-GAAP financial measures contained in this
earnings release. This information is provided in order to allow
investors to make meaningful comparisons of the Company’s operating
performance between periods and to view the Company’s business from
the same perspective as Company management. These non-GAAP measures
may be different than similar measures used by other companies and
should be considered in addition to, not as a substitute for,
measures of financial performance calculated in accordance with
GAAP. Reconciliations for the differences between non-GAAP measures
used in this earnings release and comparable financial measures
calculated in accordance with U.S. GAAP are included in Notes 1, 2
and 3 and the reconciliation of Net cash provided by continuing
operating activities to Free cash flow available to News
Corporation is included above.
Conference call
News Corporation’s earnings conference call can be heard live at
5:30pm EST on November 5, 2015. To listen to the call, please visit
http://investors.newscorp.com.
Cautionary Statement Concerning Forward-Looking
Statements
This document contains certain “forward-looking statements”
within the meaning of the Private Securities Litigation Reform Act
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 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, except as required by law.
About News Corporation
News Corporation (NASDAQ: NWS, NWSA; ASX: NWS,
NWSLV) is a global, diversified media and information services
company focused on creating and distributing authoritative and
engaging content to consumers throughout the world. The
company comprises businesses across a range of media, including:
news and information services, book publishing, digital real estate
services, cable network programming in Australia, and pay-TV
distribution in Australia. Headquartered in New York, the
activities of News Corporation are conducted primarily in the
United States, Australia, and the United Kingdom. More information
is available at: www.newscorp.com.
NEWS CORPORATIONCONSOLIDATED
STATEMENTS OF OPERATIONS(Unaudited; in millions, except per
share amounts)
For the three months ended September 30, 2015
2014 Revenues: Advertising $ 880 $ 920 Circulation and
Subscription 639 672 Consumer 392 390 Other 103 126
Total Revenues 2,014 2,108 Operating expenses (1,199)
(1,282) Selling, general and administrative (650) (632)
Depreciation and amortization (121) (124) Impairment and
restructuring charges (17) (4) Equity earnings of affiliates 8 25
Interest, net 12 17 Other, net 5 48 Income from
continuing operations before income tax benefit (expense) 52 156
Income tax benefit (expense) 91 (47) Income from
continuing operations 143 109 Income (loss) from discontinued
operations, net of tax 46 (21) Net income 189 88 Less: Net
income attributable to noncontrolling interests (14)
(23) Net income attributable to News Corporation stockholders $ 175
$ 65
Less: Adjustments to Net income
attributable to News Corporationstockholders – Redeemable Preferred
Stock Dividends
- - Net income available to News Corporation
stockholders $ 175 $ 65 Weighted average shares outstanding:
Basic 581 580 Diluted 583 580
Income from continuing operations
available to News Corporation stockholdersper share - basic and
diluted
$ 0.22 $ 0.15
Income (loss) from discontinued operations
available to News Corporationstockholders per share - basic and
diluted
$ 0.08 $ (0.04) Net income available to News Corporation
stockholders per share - basic and diluted: $ 0.30 $ 0.11
NEWS CORPORATIONCONSOLIDATED
BALANCE SHEETS(in millions)
As of September30, 2015
As of June 30,2015
ASSETS (unaudited) (audited) Current assets: Cash and cash
equivalents $ 1,898 $ 1,951 Amounts due from 21st Century Fox 60 63
Receivables, net 1,301 1,283 Other current assets 630
717 Total current assets 3,889 4,014
Non-current assets: Investments 2,196 2,379 Property, plant and
equipment, net 2,553 2,690 Intangible assets, net 2,143 2,203
Goodwill 3,012 3,063 Other non-current assets 963 686
Total assets $ 14,756 $ 15,035
LIABILITIES AND EQUITY
Current liabilities: Accounts payable $ 272 $ 238 Accrued expenses
1,133 1,125 Deferred revenue 354 346 Other current liabilities
407 401 Total current liabilities 2,166
2,110 Non-current liabilities: Retirement benefit
obligations 298 305 Deferred income taxes 171 166 Other non-current
liabilities 320 318 Commitments and contingencies
Redeemable preferred stock 20 20 Equity: Class A common
stock 4 4 Class B common stock 2 2 Additional paid-in capital
12,431 12,433 Retained earnings 204 88 Accumulated other
comprehensive loss (1,025) (582) Total News
Corporation stockholders' equity 11,616 11,945 Noncontrolling
interests 165 171 Total equity 11,781
12,116 Total liabilities and equity $ 14,756 $ 15,035
NEWS CORPORATIONCONSOLIDATED
STATEMENTS OF CASH FLOWS(Unaudited; in millions)
For the three months ended September 30, 2015
2014
Operating activities: Net income $ 189 $ 88
Less: Income (loss) from discontinued operations, net of tax
46 (21) Income from continuing operations: 143 109
Adjustments to reconcile income from continuing operations to cash
provided by operating activities: Depreciation and amortization 121
124 Equity earnings of affiliates (8) (25) Cash distributions
received from affiliates - 17 Other, net (5) (48) Deferred income
taxes and taxes payable (109) 31 Change in operating assets and
liabilities, net of acquisitions: Receivables and other assets (94)
17 Inventories, net 30 41 Accounts payable and other liabilities 74
(40) Pension and postretirement benefit plans (11) (6) Net
cash provided by operating activities from continuing operations
141 220
Investing activities: Capital
expenditures (63) (94) Acquisitions, net of cash acquired (16)
(414) Investments in equity affiliates and other (14) (115)
Proceeds from dispositions 2 114 Other 5 - Net cash
used in investing activities from continuing operations (86)
(509)
Financing activities: Repurchase of
shares (15) - Dividends paid (16) (17) Other, net (6)
(9) Net cash used in financing activities from continuing
operations (37) (26) Net increase (decrease) in cash
and cash equivalents from continuing operations 18 (315) Net
decrease in cash and cash equivalents from discontinued operations
(35) (57) Cash and cash equivalents, beginning of period 1,951
3,145 Exchange movement on opening cash balance (36)
(38)
Cash and cash equivalents, end of period $ 1,898 $
2,735
NOTE 1 – ADJUSTED REVENUES, ADJUSTED TOTAL SEGMENT EBITDA AND
ADJUSTED SEGMENT EBITDA
The Company uses revenues, Total Segment EBITDA and Segment
EBITDA excluding the impact of acquisitions, divestitures, costs
associated with the U.K. Newspaper Matters and foreign currency
fluctuations (“Adjusted Revenues, Adjusted Total Segment EBITDA and
Adjusted Segment EBITDA”) to evaluate the performance of the
Company’s operations exclusive of certain items that impact the
comparability of results from period to period. The calculation of
Adjusted Revenues, Adjusted Total Segment EBITDA and Adjusted
Segment EBITDA may not be comparable to similarly titled measures
reported by other companies, since companies and investors may
differ as to what type of events warrant adjustment. Adjusted
Revenues, Adjusted Total Segment EBITDA and Adjusted Segment EBITDA
are not measures of performance under generally accepted accounting
principles and should not be construed as substitutes for amounts
determined under GAAP as measures of performance.
However, management uses these measures in comparing the
Company’s historical performance and believes that they provide
meaningful and comparable information to investors to assist in
their analysis of our performance relative to prior periods and our
competitors.
The following table reconciles reported revenues and reported
Total Segment EBITDA to Adjusted Revenues and Adjusted Total
Segment EBITDA for the three months ended September 30, 2015 and
2014.
Revenues Total Segment EBITDA
For the three months ended September
30,
For the three months ended September 30, 2015 2014
Difference 2015 2014 Difference (in millions) (in
millions)
As reported $ 2,014 $ 2,108 $ (94) $ 165 $
194 $ (29) Impact of acquisitions (111) - (111) 2 7 (5)
Impact of divestitures - (1) 1 - - - Impact of
foreign currency fluctuations 188 - 188 29 - 29 Net impact
of U.K. Newspaper Matters - - - 5 14 (9)
As adjusted $ 2,091 $ 2,107 $ (16) $ 201 $ 215 $ (14)
Adjusted Revenues and Adjusted Segment EBITDA by segment for the
three months ended September 30, 2015 and 2014 are as follows:
For the three months ended September
30, 2015 2014 % Change (in millions) Better/(Worse)
Adjusted Revenues: News and Information Services $
1,405 $ 1,451 (3) % Book Publishing 399 406 (2) % Digital Real
Estate Services 134 111 21 % Cable Network Programming 153 139 10 %
Other - - - %
Total Adjusted Revenues $ 2,091
$ 2,107 (1) %
Adjusted Segment EBITDA: News and
Information Services $ 89 $ 105 (15) % Book Publishing 40 60 (33) %
Digital Real Estate Services 77 59 31 % Cable Network Programming
35 32 9 % Other (40) (41) 2 %
Total Adjusted
Segment EBITDA $ 201 $ 215 (7) %
The following tables reconcile reported revenues and Segment
EBITDA by segment to Adjusted Revenues and Adjusted Segment EBITDA
by segment for the three months ended September 30, 2015 and
2014.
For the three months ended September 30, 2015
AsReported
Impact ofAcquisitions
Impact ofDivestitures
Impact ofForeignCurrencyFluctuations
Net Impactof U.K.NewspaperMatters
AsAdjusted
(in millions)
Revenues: News and Information Services
$ 1,290 $ (1) $ - $ 116 $ - $ 1,405 Book Publishing 409 (25) - 15 -
399 Digital Real Estate Services 191 (85) - 28 - 134 Cable Network
Programming 124 - - 29 - 153 Other - - -
- - -
Total Revenues $ 2,014 $ (111) $
- $ 188 $ - $ 2,091
Segment EBITDA: News and
Information Services $ 83 $ 1 $ - $ 5 $ - $ 89 Book Publishing 42
(3) - 1 - 40 Digital Real Estate Services 57 4 - 16 - 77 Cable
Network Programming 28 - - 7 - 35 Other (45) -
- - 5 (40)
Total Segment EBITDA $ 165 $
2 $ - $ 29 $ 5 $ 201 For the three
months ended September 30, 2014
AsReported
Impact ofAcquisitions
Impact ofDivestitures
Impact ofForeignCurrencyFluctuations
Net Impactof U.K.NewspaperMatters
AsAdjusted
(in millions)
Revenues: News and Information Services
$ 1,451 $ - $ - $ - $ - $ 1,451 Book Publishing 406 - - - - 406
Digital Real Estate Services 112 - (1) - - 111 Cable Network
Programming 139 - - - - 139 Other - - -
- - -
Total Revenues $ 2,108 $ - $ (1) $ - $ -
$ 2,107
Segment EBITDA: News and Information Services
$ 105 $ - $ - $ - $ - $ 105 Book Publishing 55 5 - - - 60 Digital
Real Estate Services 57 2 - - - 59 Cable Network Programming 32 - -
- - 32 Other (55) - - - 14
(41)
Total Segment EBITDA $ 194 $ 7 $ - $ - $ 14 $
215
NOTE 2 – TOTAL SEGMENT EBITDA
Segment EBITDA is defined as revenues less operating expenses
and selling, general and administrative expenses. Segment EBITDA
does not include: Depreciation and amortization, impairment and
restructuring charges, equity earnings of affiliates, interest,
net, other, net, and income tax (expense) benefit. Management
believes that Segment EBITDA is an appropriate measure for
evaluating the operating performance of the Company’s business
segments because it is the primary measure used by the Company’s
chief operating decision maker to evaluate the performance of and
allocate resources within the Company’s businesses. Segment EBITDA
provides management, investors and equity analysts with a measure
to analyze operating performance of each of the Company’s business
segments and its enterprise value against historical data and
competitors’ data, although historical results may not be
indicative of future results (as operating performance is highly
contingent on many factors, including customer tastes and
preferences).
Total Segment EBITDA is a non-GAAP measure and should be
considered in addition to, not as a substitute for, net income,
cash flow and other measures of financial performance reported in
accordance with GAAP. In addition, this measure does not reflect
cash available to fund requirements and excludes items, such as
depreciation and amortization and impairment and restructuring
charges, which are significant components in assessing the
Company’s financial performance. The following table reconciles
Total Segment EBITDA to income from continuing operations.
For the three months ended September
30, 2015 2014 Change % Change (in millions) Better/(Worse)
Revenues $ 2,014 $ 2,108 $ (94) (4) % Operating
expenses (1,199) (1,282) 83 6 % Selling, general and administrative
(650) (632) (18) (3) %
Total Segment
EBITDA 165 194 (29) (15) % Depreciation and amortization (121)
(124) 3 2 % Impairment and restructuring charges (17) (4) (13) **
Equity earnings of affiliates 8 25 (17) (68) % Interest, net 12 17
(5) (29) % Other, net 5 48 (43) (90) % Income
from continuing operations before income tax benefit (expense) 52
156 (104) (67) % Income tax benefit (expense) 91 (47)
138 **
Income from continuing operations $ 143
$ 109 $ 34 31 % ** - Not meaningful
NOTE 3 – ADJUSTED NET INCOME FROM CONTINUING OPERATIONS
AVAILABLE TO NEWS CORPORATION STOCKHOLDERS AND ADJUSTED EPS
The Company uses net income from continuing operations available
to News Corporation stockholders and diluted earnings per share
from continuing operations (“EPS”) excluding expenses related to
U.K. Newspaper Matters, Impairment and restructuring charges, and
“Other, net”, net of tax (“adjusted net income from continuing
operations available to News Corporation stockholders and adjusted
EPS”) to evaluate the performance of the Company’s operations
exclusive of certain items that impact the comparability of results
from period to period. The calculation of adjusted net income from
continuing operations available to News Corporation stockholders
and adjusted EPS may not be comparable to similarly titled measures
reported by other companies, since companies and investors may
differ as to what type of events warrant adjustment. Adjusted net
income from continuing operations available to News Corporation
stockholders and adjusted EPS are not measures of performance under
generally accepted accounting principles and should not be
construed as substitutes for consolidated net income available to
News Corporation stockholders and net income per share as
determined under GAAP as a measure of performance.
However, management uses these measures in comparing the
Company’s historical performance and believes that they provide
meaningful and comparable information to investors to assist in
their analysis of our performance relative to prior periods and our
competitors.
The following tables reconcile reported net income from
continuing operations available to News Corporation stockholders
and reported diluted EPS to adjusted net income from continuing
operations available to News Corporation stockholders and adjusted
EPS for the three months ended September 30, 2015 and 2014.
For the three months ended For the three
months ended September 30, 2015 September 30, 2014
Net incomeavailable tostockholders
EPS
Net incomeavailable tostockholders
EPS (in millions, except per share data)
Income from continuing operations $ 143 $ 109
Less: Net income attributable
tononcontrolling interests
(14)
(23)
Income from continuing
operationsavailable to News Corporation stockholders
$ 129 $ 0.22 $ 86 $ 0.15 U.K. Newspaper Matters 5 0.01 14
0.02 Impairment and restructuring charges 17 0.03 4 0.01
Other, net(a) (5) (0.01) (48) (0.08) Tax impact on
items above (8) (0.02) 10 0.02 Tax benefit(b) (106) (0.18) -
- Impact of noncontrolling interest on items included in
Other, net above - - 8 0.01
As adjusted $ 32 $
0.05 $ 74 $ 0.13
(a)
Other, net for the three months ended September 30, 2014
primarily includes a gain on the sale of marketable securities and
a special dividend received from a cost method investment.
(b)
The Company recognized a tax benefit of approximately $106 million
from the release of valuation allowances resulting from the planned
disposal of the digital education business.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20151105006898/en/
News CorporationMichael Florin, 212-416-3363Investor
Relationsmflorin@newscorp.comorJim Kennedy, 212-416-4064Corporate
Communicationsjkennedy@newscorp.com
News (ASX:NWSLV)
Historical Stock Chart
From Aug 2024 to Sep 2024
News (ASX:NWSLV)
Historical Stock Chart
From Sep 2023 to Sep 2024