FISCAL 2023 FOURTH QUARTER AND FULL
YEAR KEY FINANCIAL HIGHLIGHTS
- Fourth quarter revenues were $2.43 billion, compared to
$2.67 billion in the prior year, reflecting the absence of the
extra week in the prior year and the negative impact from foreign
currency fluctuations
- Net loss in the quarter was $(32) million, inclusive of $166
million related to higher non-cash write- downs and restructuring
charges, compared to net income of $127 million in the prior year,
which included a $149 million tax benefit
- Fourth quarter Total Segment EBITDA was $341 million,
compared to $315 million in the prior year
- Digital revenues accounted for over 50% of total revenues
for the full year, marking a key inflection point in the
transformation of the Company
- The success of the Professional Information Business has
transformed Dow Jones. Segment EBITDA rose 25% for the fourth
quarter and 14% for the full year, bolstered by the addition of CMA
and OPIS and robust growth in Risk & Compliance
revenues
- At the Subscription Video Services Segment, Foxtel Group saw
streaming revenue growth more than offset broadcast declines for
the fourth quarter and full year, as total paid streaming
subscribers reached nearly 3.1 million
- Foxtel Group is nearing completion of its external debt
refinancing which is expected to provide a pathway for repayment of
News Corp’s shareholder loans
News Corporation (“News Corp” or the “Company”) (Nasdaq: NWS,
NWSA; ASX: NWS, NWSLV) today reported financial results for the
three months and fiscal year ended June 30, 2023 (includes 13 and
52 weeks, respectively, compared to 14 and 53 weeks in the three
months and fiscal year ended June 30, 2022, respectively).
Commenting on the results, Chief Executive Robert Thomson
said:
“News Corp's Fiscal 2023 results highlighted the durability and
depth of our revenue streams and the impact of stringent cost
controls as we navigated challenging macro conditions, supply chain
pressures and currency headwinds. We achieved full year Fiscal 2023
revenues of $9.9 billion and profits of over $1.4 billion - the
second highest profitability ever recorded by the Company. Our
results showed marked improvement in the second half, so with
inflation abating, interest rates plateauing and incipient signs of
stability in the housing market, we have sound reasons for optimism
about the coming quarters.
For the first time, digital accounted for over 50% of News
Corp's revenues for the full year, marking a profound
transformation during the past decade. That momentum is surely
gathering pace in the age of generative AI, which we believe
presents a remarkable opportunity to create a new stream of
revenues, while allowing us to reduce costs across the business. We
are already in active negotiations to establish a value for our
unique content sets and IP that will play a crucial role in the
future of AI.
Dow Jones posted its highest profitability for both the quarter
and the full year since we acquired the company - helped, in
particular, by impressive results in the burgeoning professional
information business. Not only has Dow Jones doubled its
profitability over the past four years but it is also nearing a
landmark moment with our lucrative B2B offerings expected to be the
largest contributor to profitability in Fiscal 2024 and a key
driver of future growth.
At Subscription Video Services, while revenues and profit were
impacted by foreign currency headwinds, we achieved growth for the
fourth quarter and full year on an adjusted basis – a remarkable
turnaround from the recent past and a tribute to the team in
Australia. And that turnaround is underscored by Foxtel's imminent
completion of a refinancing, which is expected to facilitate
repayments of our outstanding shareholder loans beginning in fiscal
2024.”
FOURTH QUARTER RESULTS
The Company reported fiscal 2023 fourth quarter total revenues
of $2.43 billion, a 9% decrease compared to $2.67 billion in the
prior year period, including the absence of the $110 million, or
4%, benefit from the additional week in the prior year quarter and
the $72 million, or 3%, negative impact from foreign currency
fluctuations. The decline was largely driven by lower revenues at
the Book Publishing segment primarily due to lower book sales and
lower revenues at the Digital Real Estate Services segment driven
by continued challenging housing market conditions in the U.S. and
Australia. The decline was partially offset by higher revenues at
the Subscription Video Services segment on a constant currency
basis. Adjusted Revenues (which excludes the foreign currency
impact, acquisitions and divestitures as defined in Note 2) were
down 7% compared to the prior year. Adjusted Revenues does not
exclude the impact from the additional week in the prior year.
Net loss for the quarter was $(32) million compared to net
income of $127 million in the prior year, primarily due to higher
income tax expense driven by the absence of a $149 million tax
benefit from an adjustment to valuation allowances in the prior
year, higher losses from equity affiliates as a result of a
non-cash write-down of REA Group’s investment in PropertyGuru of
approximately $81 million and higher impairment and restructuring
charges, partially offset by higher Other, net and higher Total
Segment EBITDA, as discussed below.
The Company reported fourth quarter Total Segment EBITDA of $341
million, an 8% increase compared to $315 million in the prior year
primarily due to cost savings across the businesses related to the
previously announced headcount and other cost reductions and lower
costs at the Other segment due in part to the absence of one-time
legal settlement costs of $20 million recognized in the prior year.
The increase was partially offset by lower revenues, as discussed
above, and higher sports programming rights costs at Foxtel.
Adjusted Total Segment EBITDA (as defined in Note 2) increased 2%.
Adjusted Total Segment EBITDA does not exclude the impact from the
additional week in the prior year.
Net (loss) income per share attributable to News Corporation
stockholders was $(0.01) as compared to $0.19 in the prior
year.
Adjusted EPS (as defined in Note 3) were $0.14 compared to $0.37
in the prior year.
FULL YEAR RESULTS
The Company reported fiscal 2023 full year total revenues of
$9.88 billion, a 5% decrease compared to $10.39 billion in the
prior year, including a $494 million, or 5%, negative impact from
foreign currency fluctuations and the absence of the $110 million,
or 1%, benefit from the additional week in the prior year. The
decrease was driven by lower revenues at the Book Publishing
segment primarily due to lower book sales and lower revenues at the
Digital Real Estate Services segment primarily due to continued
challenging housing market conditions in the U.S. and Australia.
The decline was partially offset by growth at the Dow Jones
segment, which includes the acquisitions of OPIS and Chemical
Market Analytics (“CMA”), and at the Subscription Video Services
and News Media segments on a constant currency basis. Adjusted
Revenues decreased 2%.
Net income for the full year was $187 million, a 75% decrease
compared to $760 million in the prior year. The decrease reflects
lower Total Segment EBITDA, as discussed below, higher equity
losses of affiliates mainly as a result of a non-cash write-down of
REA Group’s investment in PropertyGuru of approximately $81
million, higher income tax expense driven by the absence of a $149
million tax benefit from an adjustment to valuation allowances in
the prior year, lower Other, net and higher impairment and
restructuring charges.
Total Segment EBITDA for the full year was $1.42 billion, a 15%
decrease compared to $1.67 billion in the prior year primarily
driven by lower revenues, as discussed above, an $80 million or 5%
negative impact from foreign currency fluctuations, higher costs at
the Dow Jones segment, higher sports programming costs and higher
newsprint pricing. The results also include one-time costs related
to the professional fees incurred by the Special Committee and the
Company in connection with evaluating the proposal from the Murdoch
Family Trust, as well as the fees related to the potential sale of
Move. The decline was partially offset by cost savings across the
businesses due to headcount and other cost reductions and lower
costs at the Digital Real Estate Services segment due to lower
broker commissions at REA Group and lower discretionary and
employee costs at Move, as well as the absence of legal settlement
costs at the Other segment. Adjusted Total Segment EBITDA decreased
15%.
Diluted net income per share attributable to News Corporation
stockholders was $0.26 as compared to $1.05 in the prior year.
Adjusted diluted EPS were $0.49 compared to $1.20 in the prior
year.
SEGMENT REVIEW
For the three months ended
June 30,
For the fiscal years ended
June 30,
%
%
2023
2022
Change
2023
2022
Change
(in millions)
Better/
(Worse)
(in millions)
Better/
(Worse)
Revenues:
Digital Real Estate Services
$
369
$
443
(17
)%
$
1,539
$
1,741
(12
)%
Subscription Video Services
501
524
(4
)%
1,942
2,026
(4
)%
Dow Jones
546
565
(3
)%
2,153
2,004
7
%
Book Publishing
446
513
(13
)%
1,979
2,191
(10
)%
News Media
571
629
(9
)%
2,266
2,423
(6
)%
Other
—
—
—
%
—
—
—
%
Total Revenues
$
2,433
$
2,674
(9
)%
$
9,879
$
10,385
(5
)%
Segment EBITDA:
Digital Real Estate Services
$
108
$
121
(11
)%
$
457
$
574
(20
)%
Subscription Video Services
78
81
(4
)%
347
360
(4
)%
Dow Jones
133
106
25
%
494
433
14
%
Book Publishing
16
47
(66
)%
167
306
(45
)%
News Media
45
33
36
%
156
217
(28
)%
Other
(39
)
(73
)
47
%
(201
)
(221
)
9
%
Total Segment EBITDA
$
341
$
315
8
%
$
1,420
$
1,669
(15
)%
Digital Real Estate Services
Fourth Quarter Segment Results
Revenues in the quarter decreased $74 million, or 17%, compared
to the prior year, reflecting a $15 million, or 4%, negative impact
from foreign currency fluctuations and the absence of the $14
million, or 3%, benefit from the additional week in the prior year
period. Segment EBITDA in the quarter decreased $13 million, or
11%, compared to the prior year, primarily due to the lower
revenues and a $7 million, or 6%, negative impact from foreign
currency fluctuations. The decline was partially offset by lower
discretionary and employee costs at Move and lower broker
commissions at REA Group driven by the valuation adjustment related
to expected trail commissions. Adjusted Revenues and Adjusted
Segment EBITDA (as defined in Note 2), which do not exclude the
impact from the additional week, decreased 14% and 5%,
respectively.
In the quarter, revenues at REA Group decreased $27 million, or
11%, to $223 million, driven by a $15 million, or 6%, negative
impact from foreign currency fluctuations, lower Australian
residential revenues due to the decline in national listings, most
notably in Sydney and Melbourne, and lower financial services
revenues due to a decrease in settlement activity. The decline was
partially offset by price increases, increased penetration of
Premiere Plus, favorable depth penetration and higher revenues from
REA India. Australian national residential buy listing volumes in
the quarter declined 18% compared to the prior year, with listings
in Sydney and Melbourne down 17% and 16%, respectively.
Move’s revenues in the quarter decreased $47 million, or 24%, to
$146 million, primarily as a result of lower real estate revenues
and the absence of the $14 million, or 7%, benefit from the
additional week in the prior year period. Real estate revenues,
which represented 79% of total Move revenues, decreased $47
million, or 29%, driven by the continued impact of the
macroeconomic environment on the housing market, including higher
mortgage rates, which has led to lower lead and transaction
volumes. Revenues from the referral model, which includes the
ReadyConnect Concierge℠ product, and the traditional lead
generation product decreased due to these factors, partially offset
by improved lead optimization. The referral model generated 25% of
total Move revenues in the quarter compared to 31% in the prior
year. Based on Move’s internal data, average monthly unique users
of Realtor.com®’s web and mobile sites for the fiscal fourth
quarter declined 20% year-over-year to 74 million. Lead volume
declined 14%, which was an improvement from the prior quarter.
Full Year Segment Results
Fiscal 2023 full year revenues decreased $202 million, or 12%,
compared to the prior year, reflecting a $74 million, or 5%,
negative impact from foreign currency fluctuations. Segment EBITDA
for fiscal 2023 decreased $117 million, or 20%, compared to the
prior year, primarily due to the lower revenues, a $34 million, or
6%, negative impact from foreign currency fluctuations and higher
costs at REA India, partially offset by lower broker commissions at
REA Group due to the valuation adjustment related to expected trail
commissions and lower settlements and lower discretionary and
employee costs at Move. Adjusted Revenues and Adjusted Segment
EBITDA decreased 8% and 15%, respectively.
In the fiscal year, REA Group’s revenues decreased $92 million,
or 9%, to $937 million, primarily driven by a $74 million, or 7%,
negative impact from foreign currency fluctuations. Lower
Australian residential revenues due to the decline in national
listings, most notably in Sydney and Melbourne, and lower financial
services revenues due to declines in settlement activity and the
adverse impact from a valuation adjustment related to expected
trail commissions, were partially offset by price increases,
increased depth penetration in the Australian residential products
due to the contribution of Premiere Plus, increased depth
penetration for commercial products and higher revenues from REA
India. Move’s revenues in the fiscal year decreased $110 million,
or 15%, to $602 million, primarily due to lower real estate
revenues and the absence of the $14 million, or 2%, benefit from
the additional week in the prior year, partially offset by 11%
growth in advertising revenues. Move’s real estate revenues, which
represented 82% of total Move revenues, declined 20%, primarily due
to declines in both the traditional lead generation product and the
referral model. Lead volumes declined 29%.
Subscription Video Services
Fourth Quarter Segment Results
Revenues of $501 million in the quarter decreased $23 million,
or 4%, compared with the prior year, due to a $37 million, or 7%,
negative impact from foreign currency fluctuations. Adjusted
Revenues of $538 million increased 3% compared to the prior year.
Higher revenues from Kayo and BINGE, driven by increases in both
volume and pricing, were partially offset by the impact from fewer
residential broadcast subscribers. Foxtel Group streaming
subscription revenues represented approximately 29% of total
circulation and subscription revenues in the quarter, as compared
to 23% in the prior year.
As of June 30, 2023, Foxtel’s total closing paid subscribers
were over 4.6 million, a 5% increase compared to the prior year,
primarily due to the growth in streaming subscribers driven by
BINGE and Kayo, partially offset by lower residential broadcast
subscribers. Broadcast subscriber churn in the quarter improved to
11.1%, the lowest level since Fiscal 2016, compared to 13.8% in the
prior year. Broadcast ARPU for the quarter increased 2% year-
over-year to A$84 (US$56).
As of June 30,
2023
2022
(in 000's)
Broadcast Subscribers
Residential
1,341
1,481
Commercial
233
242
Streaming Subscribers (Total (Paid))
Kayo
1,411 (1,401 paid)
1,312 (1,293 paid)
BINGE
1,541 (1,487 paid)
1,263 (1,192 paid)
Foxtel Now
177 (170 paid)
201 (194 paid)
Total Subscribers (Total (Paid))
4,723 (4,650 paid)
4,529 (4,413 paid)
Segment EBITDA of $78 million in the quarter decreased $3
million, or 4%, compared with the prior year, due to the $6
million, or 8%, negative impact from foreign currency fluctuations.
Adjusted Segment EBITDA of $84 million increased 4% compared to the
prior year, primarily due to higher revenues in constant currency
and lower marketing, employee and transmission costs, partially
offset by higher sports programming rights costs, driven mainly by
contractual increases across AFL and NRL.
Full Year Segment Results
Fiscal 2023 full year revenues declined $84 million, or 4%,
compared with the prior year, due to a $157 million, or 8%,
negative impact from foreign currency fluctuations. Adjusted
Revenues increased 4% compared to the prior year. Higher streaming
revenues, primarily from Kayo and BINGE, higher commercial revenues
and higher advertising revenues in constant currency more than
offset the revenue declines from lower residential broadcast
subscribers. Foxtel Group streaming subscription revenues
represented approximately 27% of total circulation and subscription
revenues in the fiscal year compared to 20% in the prior year.
Segment EBITDA for fiscal 2023 decreased $13 million, or 4%,
compared to the prior year, due to the $29 million, or 8%, negative
impact from foreign currency fluctuations. Adjusted Segment EBITDA
increased 4%. Higher sports programming costs due to contractual
increases across AFL, NRL and Cricket Australia and higher
entertainment programming costs were more than offset by the
revenue drivers discussed above, as well as lower transmission and
marketing costs.
Dow Jones
Fourth Quarter Segment Results
Revenues in the quarter decreased $19 million, or 3%, compared
to the prior year, including the absence of $40 million, or 7%,
from the additional week in the prior year period and a $13 million
contribution from CMA, which was acquired in June 2022. Digital
revenues at Dow Jones in the quarter represented 79% of total
revenues compared to 76% in the prior year. Adjusted Revenues
decreased 6%, which does not exclude the impact from the additional
week in the prior year.
Circulation and subscription revenues decreased $2 million,
which reflects the absence of a $31 million, or 7%, benefit from
the additional week in the prior year and the contribution from the
acquisition of CMA. Circulation revenue declined 6%, primarily due
to the absence of a $17 million, or 7%, benefit from the additional
week in the prior year period, lower print volume and lower
revenues from IBD, partially offset by the continued growth in
digital-only subscriptions, primarily at The Wall Street Journal.
Excluding the absence of the benefit from the additional week in
prior year, circulation revenues would have improved 1% compared to
the prior year. Professional information business revenues grew
10%, primarily driven by the acquisition of CMA and growth in Risk
& Compliance products, partially offset by the absence of a $14
million, or 8%, benefit from the additional week in the prior year.
Revenues from the Risk & Compliance products grew 10%, despite
being impacted by the absence of the additional week in the prior
year. Digital circulation revenues accounted for 70% of circulation
revenues for the quarter, compared to 68% in the prior year.
During the fourth quarter, total average subscriptions to Dow
Jones’ consumer products reached over 5.2 million, a 7% increase
compared to the prior year. Digital-only subscriptions to Dow
Jones’ consumer products grew 12%. Total subscriptions to The Wall
Street Journal grew 6% compared to the prior year, to over 3.9
million average subscriptions in the quarter. Digital-only
subscriptions to The Wall Street Journal grew 10% to 3.4 million
average subscriptions in the quarter, and represented 86% of total
Wall Street Journal subscriptions.
For the three months ended
June 30,
2023
2022
% Change
(in thousands, except %)
Better/(Worse)
The Wall Street Journal
Digital-only subscriptions
3,406
3,095
10 %
Total subscriptions
3,966
3,749
6 %
Barron’s Group
Digital-only subscriptions
1,018
848
20 %
Total subscriptions
1,168
1,038
13 %
Total Consumer
Digital-only subscriptions
4,510
4,029
12 %
Total subscriptions
5,242
4,898
7 %
Advertising revenues decreased $16 million, or 14%, primarily
due to 18% and 10% declines in print and digital advertising
revenues, respectively, driven primarily by the absence of a $9
million, or 8%, benefit from the additional week in the prior year
period and continued weakness in print advertising, primarily
driven by lower technology spending. Excluding the absence of the
benefit from the additional week in the prior year, advertising
would have decreased 6% compared to the prior year. Digital
advertising accounted for 60% of total advertising revenues in the
quarter, compared to 58% in the prior year.
Segment EBITDA for the quarter increased $27 million, or 25%,
which includes a $5 million contribution from the acquisition of
CMA. The growth reflects lower employee and marketing costs and the
absence of $2 million in transaction costs related to the
acquisition of CMA in the prior year, partially offset by the lower
revenues discussed above. Adjusted Segment EBITDA increased
17%.
Full Year Segment Results
Fiscal 2023 full year revenues increased $149 million, or 7%,
compared to the prior year, which includes the $97 million and $68
million impacts from the acquisitions of OPIS and CMA,
respectively, as well as growth in Risk & Compliance products
and digital circulation revenues. The revenue growth was partially
offset by the absence of a $40 million, or 2%, benefit from the
additional week in the prior year, lower advertising revenues and
an $18 million, or 1%, negative impact from foreign currency
fluctuations. Adjusted Revenues were flat compared to the prior
year. Digital revenues at Dow Jones represented 78% of total
revenues compared to 75% in the prior year.
Circulation and subscription revenues increased $173 million, or
11%, which includes higher contributions from the acquisitions of
OPIS and CMA. The results also reflect the negative impact from the
absence of a $31 million, or 2%, benefit from the additional week
in the prior year and an $18 million, or 2%, negative impact from
foreign currency fluctuations. Circulation revenues were flat
compared to the prior year, reflecting continued strong growth in
digital-only subscriptions at The Wall Street Journal, offset by
lower print volumes and the absence of an additional week in the
prior year. Professional information business revenues grew 31%,
driven by the acquisitions of OPIS and CMA as well as 11% growth in
Risk & Compliance products, which reached over $250 million in
revenues in fiscal 2023, despite the negative impact of foreign
exchange fluctuations and the absence of an additional week from
the prior year. Digital circulation revenues accounted for 69% of
circulation revenues for the year, compared to 67% in the prior
year.
Advertising revenue decreased $36 million, or 8%, primarily due
to a 12% decrease in print advertising and a 5% decrease in digital
advertising, which include the absence of the benefit from the
additional week in the prior year. Digital advertising revenues
accounted for 61% of total advertising revenues for the year,
compared to 59% in the prior year.
Segment EBITDA for fiscal 2023 increased $61 million, or 14%,
compared to the prior year, primarily due to higher revenues, as
noted above, and the absence of $25 million of OPIS and CMA-related
transaction costs incurred in fiscal 2022, partially offset by
higher employee costs primarily related to the OPIS and CMA
acquisitions. Adjusted Segment EBITDA decreased 4%.
Book Publishing
Fourth Quarter Segment Results
Revenues in the quarter decreased $67 million, or 13%, compared
to the prior year, primarily driven by lower book sales due to
lower consumer demand industry-wide, weak frontlist performance,
which contributed to higher returns, and the absence of a $20
million, or 4%, benefit from the additional week in the prior year
period. Key titles in the quarter included Magnolia Table, Volume 3
by Joanna Gaines, Demon Copperhead by Barbara Kingsolver and
Remarkably Bright Creatures by Shelby Van Pelt. Adjusted Revenues
decreased 13%. Digital sales declined 10% compared to the prior
year primarily due to lower e-book sales. Digital sales represented
25% of Consumer revenues for the quarter compared to 24% in the
prior year. Backlist sales represented approximately 59% of total
revenues in the quarter.
Segment EBITDA for the quarter decreased $31 million, or 66%,
compared to the prior year, primarily driven by the lower revenues
discussed above and increased expense from higher levels of royalty
write-offs. The decrease was also due to higher costs resulting
from ongoing supply chain challenges and inventory and inflationary
pressures on manufacturing, freight and distribution costs,
partially offset by lower marketing and employee costs. Adjusted
Segment EBITDA decreased 70%.
Full Year Segment Results
Fiscal 2023 full year revenues decreased $212 million, or 10%,
compared to the prior year, primarily driven by lower book sales
due to lower consumer demand industry-wide, weak frontlist
performance and Amazon’s reset of its inventory levels and
rightsizing of its warehouse footprint, which was mostly reflected
in the first half. The decline also reflects a $58 million, or 3%,
negative impact from foreign currency fluctuations and the absence
of the $20 million, or 1%, benefit from the additional week in the
prior year. Adjusted Revenues decreased 8% compared to the prior
year. Digital sales decreased 5% compared to the prior year, driven
by lower e-book sales. Digital sales represented 22% of Consumer
revenues for the year compared to 21% in the prior year. Backlist
sales represented approximately 60% of total revenues in the
year.
Segment EBITDA for fiscal 2023 decreased $139 million, or 45%,
from the prior year primarily due to lower revenues, as discussed
above, and higher manufacturing, freight and distribution costs
related to ongoing supply chain challenges and inventory and
inflationary pressures, partially offset by lower costs due to
lower sales volumes and lower employee costs. These supply chain
challenges and inventory and inflationary pressures are expected to
continue to impact the business in the near term, but are expected
to moderate in fiscal 2024. Adjusted Segment EBITDA decreased
44%.
News Media
Fourth Quarter Segment Results
Revenues in the quarter decreased $58 million, or 9%, as
compared to the prior year, primarily driven by the absence of a
$36 million, or 6%, benefit from the additional week in the prior
year period and the $18 million, or 3%, negative impact from
foreign currency fluctuations. Within the segment, revenues at News
Corp Australia and News UK decreased 15% and 7%, respectively, as
both were impacted by the absence of the additional week in the
prior year and negative foreign currency fluctuations. Adjusted
Revenues for the segment decreased 7% compared to the prior
year.
Circulation and subscription revenues decreased $21 million, or
7%, compared to the prior year, primarily due to the absence of a
$19 million, or 6%, benefit from the additional week in the prior
year period, a $9 million, or 3%, negative impact from foreign
currency fluctuations and lower print volume. The decline was
partially offset by cover price increases and digital subscriber
growth. Excluding the absence of the benefit from the additional
week in the prior year and the impact of negative foreign currency
fluctuations, circulation and subscription revenues would have
increased 2%.
Advertising revenues decreased $40 million, or 15%, compared to
the prior year, primarily due to the absence of a $15 million, or
6%, benefit from the additional week in the prior year period,
lower print and digital advertising at News Corp Australia, lower
print advertising at News UK and a $6 million, or 2%, negative
impact from foreign currency fluctuations. The decline was
partially offset by growth in digital advertising at News UK.
Excluding the absence of the benefit from the additional week in
the prior year and the impact of negative foreign currency
fluctuations, advertising revenues would have decreased 7%.
In the quarter, Segment EBITDA increased $12 million, or 36%,
compared to the prior year, driven by cost saving initiatives, the
Company’s continued transition to digital products and
approximately $7 million of lower costs related to TalkTV and other
digital investments, mainly at News Corp Australia. The increase
was partially offset by lower revenues, as discussed above, higher
newsprint, production and distribution costs due to supply chain
and inflationary pressures and a $2 million, or 6%, negative impact
from foreign currency fluctuations. Adjusted Segment EBITDA
increased 42%.
Digital revenues represented 36% of News Media segment revenues
in the quarter, compared to 35% in the prior year, and represented
34% of the combined revenues of the newspaper mastheads. Digital
subscribers and users across key properties within the News Media
segment are summarized below:
- Closing digital subscribers at News Corp Australia as of June
30, 2023 were 1,059,000 (943,000 for news mastheads), compared to
964,000 (882,000 for news mastheads) in the prior year (Source:
Internal data)
- The Times and Sunday Times closing digital subscribers,
including the Times Literary Supplement, as of June 30, 2023 were
565,000, compared to 508,000 in the prior year (Source: Internal
data). During the fourth quarter of fiscal 2023, News UK updated
its methodology for counting subscribers receiving a print and
digital bundle to begin allocating these subscribers between print
and digital based on the number of print copies served during the
week instead of wholly to print. This change resulted in a 59,000
and 63,000 increase to the closing digital subscriber number at
June 30, 2023 and 2022, respectively
- The Sun’s digital offering reached 159 million global monthly
unique users in June 2023 (Source: Meta Pixel; prior year
comparable statistic unavailable due to source change)
- New York Post’s digital network reached 145 million unique
users in June 2023, compared to 198 million in the prior year
(Source: Google Analytics)
Full Year Segment Results
Fiscal 2023 full year revenues decreased $157 million, or 6%,
compared to the prior year, which includes a $187 million, or 7%,
negative impact from foreign currency fluctuations and the absence
of a $36 million, or 1%, benefit from the additional week in the
prior year. Within the segment, revenues at News Corp Australia and
News UK decreased 8% and 7%, respectively, as both were impacted by
negative foreign currency fluctuations and the absence of the
additional week in the prior year, while the New York Post saw
higher revenues of 4%. Adjusted Revenues for the segment increased
1% compared to the prior year.
Circulation and subscription revenues decreased $68 million, or
6%, compared to the prior year, primarily due to a $93 million, or
8%, negative impact from foreign currency fluctuations, print
volume declines and the absence of a $19 million, or 2%, benefit
from the additional week in the prior year, partially offset by
cover price increases, digital subscriber growth and higher content
licensing revenues. Advertising revenues decreased $98 million, or
10%, compared to the prior year, driven by a $70 million, or 7%,
negative impact from foreign currency fluctuations, lower print
advertising at News UK, the absence of the additional week in the
prior year and lower digital and print advertising at News Corp
Australia, partially offset by growth in digital advertising at
News UK.
Segment EBITDA for fiscal 2023 decreased $61 million, or 28%,
compared to the prior year, driven by lower revenues, as discussed
above, the impact of inflationary pressures on costs, primarily in
newsprint, and higher costs related to TalkTV and other digital
investments, primarily at News Corp Australia. The decline was
partially offset by cost savings initiatives across the businesses,
particularly News Corp Australia and News UK. Adjusted Segment
EBITDA decreased 24% compared to the prior year.
CASH FLOW
The following table presents a reconciliation of net cash
provided by operating activities to free cash flow and free cash
flow available to News Corporation:
For the fiscal years ended June
30,
2023
2022
(in millions)
Net cash provided by operating
activities
$
1,092
$
1,354
Less: Capital expenditures
(499
)
(499
)
Free cash flow
593
855
Less: REA Group free cash flow
(234
)
(279
)
Plus: Cash dividends received from REA
Group
91
87
Free cash flow available to News
Corporation
$
450
$
663
Net cash provided by operating activities of $1,092 million for
the fiscal year ended June 30, 2023 was $262 million lower than
$1,354 million in the prior year, primarily due to lower Total
Segment EBITDA, as noted above.
Free cash flow in the fiscal year ended June 30, 2023 was $593
million compared to $855 million in the prior year. Free cash flow
available to News Corporation in the fiscal year ended June 30,
2023 was $450 million compared to $663 million in the prior year.
The decrease in both free cash flow and free cash flow available to
News Corporation was primarily due to lower cash provided by
operating activities, as mentioned above. Foxtel’s capital
expenditures for the fiscal year ended June 30, 2023 were $152
million compared to $189 million in the prior year.
Free cash flow and free cash flow available to News Corporation
are non-GAAP financial measures. Free cash flow is defined as net
cash provided by operating activities, less capital expenditures,
and free cash flow available to News Corporation is defined as free
cash flow, less REA Group free cash flow, plus cash dividends
received from REA Group.
The Company believes free cash flow provides useful information
to management and investors about the Company’s liquidity and cash
flow trends. The Company believes free cash flow available to News
Corporation, which adjusts free cash flow to exclude REA Group’s
free cash flow and include dividends received from REA Group,
provides management and investors with a measure of the amount of
cash flow that is readily available to the Company, as REA Group is
a separately listed public company in Australia and must declare a
dividend in order for the Company to have access to its share of
REA Group’s cash balance. The Company believes free cash flow
available to News Corporation provides a more conservative view of
the Company’s free cash flow because this presentation includes
only that amount of cash the Company actually receives from REA
Group, which has generally been lower than the Company’s unadjusted
free cash flow. A limitation of both free cash flow and free cash
flow available to News Corporation is that they do not represent
the total increase or decrease in the cash balance for the period.
Management compensates for the limitation of free cash flow and
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.
OTHER ITEMS
Dividends
The Company declared today a semi-annual cash dividend of $0.10
per share for Class A Common Stock and Class B Common Stock. This
dividend is payable on October 11, 2023 to stockholders of record
as of September 13, 2023.
COMPARISON OF NON-GAAP TO U.S. GAAP INFORMATION
Adjusted Revenues, Total Segment EBITDA, Adjusted Total Segment
EBITDA, Adjusted Segment EBITDA, adjusted net income attributable
to News Corporation stockholders, Adjusted EPS, constant currency
revenues, free cash flow and free cash flow available to News
Corporation are non-GAAP financial measures contained in this
earnings release. The Company believes these measures are important
tools for investors and analysts to use in assessing the Company’s
underlying business performance and to provide for more meaningful
comparisons of the Company’s operating performance between periods.
These measures also allow investors and analysts 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, 3 and 4 and the
reconciliation of net cash provided by operating activities to free
cash flow and free cash flow available to News Corporation is
included above.
Conference call
News Corporation’s earnings conference call can be heard live at
5:00 p.m. EDT on August 10, 2023. 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 forward-looking statements include, but are not
limited to, statements regarding trends and uncertainties affecting
the Company’s business, results of operations and financial
condition, the Company’s strategy and strategic initiatives,
including potential acquisitions, investments and dispositions, the
Company’s cost savings initiatives, including announced headcount
reductions, and the outcome of contingencies such as litigation and
investigations. 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 the risks, uncertainties
and other factors described in the Company’s filings with the
Securities and Exchange Commission. More detailed information about
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 and do not undertake
any obligation to publicly update any “forward-looking statements”
to reflect subsequent events or circumstances, and we expressly
disclaim any such obligation, except as required by law or
regulation.
About News Corporation
News Corp (Nasdaq: NWS, NWSA; ASX: NWS, NWSLV) is a global,
diversified media and information services company focused on
creating and distributing authoritative and engaging content and
other products and services. The company comprises businesses
across a range of media, including: digital real estate services,
subscription video services in Australia, news and information
services and book publishing. Headquartered in New York, News Corp
operates primarily in the United States, Australia, and the United
Kingdom, and its content and other products and services are
distributed and consumed worldwide. More information is available
at: www.newscorp.com.
NEWS CORPORATION
CONSOLIDATED STATEMENTS OF
OPERATIONS
(Unaudited; in millions,
except per share amounts)
For the three months ended June
30,
For the fiscal years ended June
30,
2023
2022
2023
2022
Revenues:
Circulation and subscription
$
1,129
$
1,177
$
4,447
$
4,425
Advertising
424
479
1,687
1,821
Consumer
425
491
1,899
2,106
Real estate
293
359
1,189
1,347
Other
162
168
657
686
Total Revenues
2,433
2,674
9,879
10,385
Operating expenses
(1,271
)
(1,355
)
(5,124
)
(5,124
)
Selling, general and administrative
(821
)
(1,004
)
(3,335
)
(3,592
)
Depreciation and amortization
(178
)
(183
)
(714
)
(688
)
Impairment and restructuring charges
(85
)
(27
)
(150
)
(109
)
Equity losses of affiliates
(84
)
(3
)
(127
)
(13
)
Interest expense, net
(22
)
(31
)
(100
)
(99
)
Other, net
11
(91
)
1
52
(Loss) income before income tax (expense)
benefit
(17
)
(20
)
330
812
Income tax (expense) benefit
(15
)
147
(143
)
(52
)
Net (loss) income
(32
)
127
187
760
Less: Net loss (income) attributable to
noncontrolling interests
24
(17
)
(38
)
(137
)
Net (loss) income attributable to News
Corporation stockholders
$
(8
)
$
110
$
149
$
623
Weighted average shares outstanding:
Basic
573
586
576
590
Diluted
573
589
579
593
Net (loss) income attributable to News
Corporation stockholders per share:
Basic
$
(0.01
)
$
0.19
$
0.26
$
1.06
Diluted
$
(0.01
)
$
0.19
$
0.26
$
1.05
NEWS CORPORATION
CONSOLIDATED BALANCE
SHEETS
(Unaudited; in
millions)
As of June 30, 2023
As of June 30, 2022
ASSETS
Current assets:
Cash and cash equivalents
$
1,833
$
1,822
Receivables, net
1,425
1,502
Inventory, net
311
311
Other current assets
484
458
Total current assets
4,053
4,093
Non-current assets:
Investments
427
488
Property, plant and equipment, net
2,042
2,103
Operating lease right-of-use assets
1,036
891
Intangible assets, net
2,489
2,671
Goodwill
5,140
5,169
Deferred income tax assets
393
422
Other non-current assets
1,341
1,384
Total assets
$
16,921
$
17,221
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable
$
440
$
411
Accrued expenses
1,123
1,236
Deferred revenue
622
604
Current borrowings
347
293
Other current liabilities
953
975
Total current liabilities
3,485
3,519
Non-current liabilities:
Borrowings
2,620
2,776
Retirement benefit obligations
134
155
Deferred income tax liabilities
163
198
Operating lease liabilities
1,128
947
Other non-current liabilities
446
483
Commitments and contingencies
Equity:
Class A common stock
4
4
Class B common stock
2
2
Additional paid-in capital
11,449
11,779
Accumulated deficit
(2,144
)
(2,293
)
Accumulated other comprehensive loss
(1,247
)
(1,270
)
Total News Corporation stockholders'
equity
8,064
8,222
Noncontrolling interests
881
921
Total equity
8,945
9,143
Total liabilities and equity
$
16,921
$
17,221
NEWS CORPORATION
NCONSOLIDATED STATEMENTS OF
CASH FLOWS
(Unaudited; in
millions)
For the fiscal years ended June
30,
2023
2022
Operating activities:
Net income
$
187
$
760
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization
714
688
Operating lease expense
109
125
Equity losses of affiliates
127
13
Cash distributions received from
affiliates
7
23
Impairment charges
25
15
Other, net
(1
)
(52
)
Deferred income taxes and taxes
payable
6
(125
)
Change in operating assets and
liabilities, net of acquisitions:
Receivables and other assets
(146
)
(51
)
Inventories, net
(2
)
(87
)
Accounts payable and other liabilities
66
45
Net cash provided by operating
activities
1,092
1,354
Investing activities:
Capital expenditures
(499
)
(499
)
Acquisitions, net of cash acquired
(17
)
(1,501
)
Investments in equity affiliates
(43
)
(71
)
Other investments
(60
)
(41
)
Proceeds from property, plant and
equipment and other asset dispositions
66
3
Other, net
(21
)
33
Net cash used in investing activities
(574
)
(2,076
)
Financing activities:
Borrowings
514
1,690
Repayment of borrowings
(589
)
(838
)
Repurchase of shares
(243
)
(179
)
Dividends paid
(174
)
(175
)
Other, net
(9
)
(94
)
Net cash (used in) provided by financing
activities
(501
)
404
Net change in cash and cash
equivalents
17
(318
)
Cash and cash equivalents, beginning of
year
1,822
2,236
Exchange movement on opening cash
balance
(6
)
(96
)
Cash and cash equivalents, end of year
$
1,833
$
1,822
NOTE 1 – 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 losses of affiliates, interest
(expense) income, 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 the 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
(loss), 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 Company believes
that the presentation of Total Segment EBITDA provides useful
information regarding the Company’s operations and other factors
that affect the Company’s reported results. Specifically, the
Company believes that by excluding certain one-time or non-cash
items such as impairment and restructuring charges and depreciation
and amortization, as well as potential distortions between periods
caused by factors such as financing and capital structures and
changes in tax positions or regimes, the Company provides users of
its consolidated financial statements with insight into both its
core operations as well as the factors that affect reported results
between periods but which the Company believes are not
representative of its core business. As a result, users of the
Company’s consolidated financial statements are better able to
evaluate changes in the core operating results of the Company
across different periods. The following tables reconcile net (loss)
income to Total Segment EBITDA for the three months and fiscal
years ended June 30, 2023 and 2022:
For the three months ended June
30,
2023
2022
Change
% Change
(in millions)
Net (loss) income
$
(32
)
$
127
$
(159
)
**
Add:
Income tax expense (benefit)
15
(147
)
162
**
Other, net
(11
)
91
(102
)
**
Interest expense, net
22
31
(9
)
(29
)%
Equity losses of affiliates
84
3
81
**
Impairment and restructuring charges
85
27
58
**
Depreciation and amortization
178
183
(5
)
(3
)%
Total Segment EBITDA
$
341
$
315
$
26
8
%
** - Not meaningful
For the fiscal years ended June
30,
2023
2022
Change
% Change
(in millions)
Net income
$
187
$
760
$
(573
)
(75
)%
Add:
Income tax expense
143
52
91
**
Other, net
(1
)
(52
)
51
98
%
Interest expense, net
100
99
1
1
%
Equity losses of affiliates
127
13
114
**
Impairment and restructuring charges
150
109
41
38
%
Depreciation and amortization
714
688
26
4
%
Total Segment EBITDA
$
1,420
$
1,669
$
(249
)
(15
)%
** - Not meaningful
NOTE 2 – 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, 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”), charges for other
significant, non-ordinary course legal or regulatory matters
(“litigation charges”) and foreign currency fluctuations (“Adjusted
Revenues,” “Adjusted Total Segment EBITDA” and “Adjusted Segment
EBITDA,” respectively) to evaluate the performance of the Company’s
core business operations exclusive of certain items that impact the
comparability of results from period to period such as the
unpredictability and volatility of currency fluctuations. The
Company calculates the impact of foreign currency fluctuations for
businesses reporting in currencies other than the U.S. dollar by
multiplying the results for each quarter in the current period by
the difference between the average exchange rate for that quarter
and the average exchange rate in effect during the corresponding
quarter of the prior year and totaling the impact for all quarters
in the current 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 tables reconcile reported revenues and reported
Total Segment EBITDA to Adjusted Revenues and Adjusted Total
Segment EBITDA for the three months and fiscal years ended June 30,
2023 and 2022:
Revenues
Total Segment EBITDA
For the three months ended June
30,
For the three months ended June
30,
2023
2022
Difference
2023
2022
Difference
(in millions)
(in millions)
As reported
$
2,433
$
2,674
$
(241
)
$
341
$
315
$
26
Impact of acquisitions
(19
)
—
(19
)
(10
)
3
(13
)
Impact of divestitures
—
—
—
—
—
—
Impact of foreign currency
fluctuations
72
—
72
14
—
14
Impact of litigation charges
—
—
—
—
20
(20
)
Net impact of U.K. Newspaper Matters
—
—
—
3
2
1
As adjusted
$
2,486
$
2,674
$
(188
)
$
348
$
340
$
8
Revenues
Total Segment EBITDA
For the fiscal years ended June
30,
For the fiscal years ended June
30,
2023
2022
Difference
2023
2022
Difference
(in millions)
(in millions)
As reported
$
9,879
$
10,385
$
(506
)
$
1,420
$
1,669
$
(249
)
Impact of acquisitions
(196
)
—
(196
)
(57
)
18
(75
)
Impact of divestitures
—
(1
)
1
—
5
(5
)
Impact of foreign currency
fluctuations
494
—
494
80
—
80
Impact of litigation charges
—
—
—
—
20
(20
)
Net impact of U.K. Newspaper Matters
—
—
—
16
11
5
As adjusted
$
10,177
$
10,384
$
(207
)
$
1,459
$
1,723
$
(264
)
Foreign Exchange Rates
Average foreign exchange rates used in the calculation of the
impact of foreign currency fluctuations for each of the three month
periods in the fiscal years ended June 30, 2023 and 2022 are as
follows:
Fiscal Year 2023
Q1
Q2
Q3
Q4
U.S. Dollar per Australian Dollar
$0.68
$0.66
$0.68
$0.67
U.S. Dollar per British Pound Sterling
$1.17
$1.17
$1.22
$1.25
Fiscal Year 2022
Q1
Q2
Q3
Q4
U.S. Dollar per Australian Dollar
$0.74
$0.73
$0.72
$0.72
U.S. Dollar per British Pound Sterling
$1.38
$1.35
$1.34
$1.26
Adjusted Revenues and Adjusted Segment EBITDA by segment for the
three months and fiscal years ended June 30, 2023 and 2022 are as
follows:
For the three months ended June
30,
2023
2022
% Change
(in millions)
Better/(Worse)
Adjusted Revenues:
Digital Real Estate Services
$
383
$
443
(14
)%
Subscription Video Services
538
524
3
%
Dow Jones
532
565
(6
)%
Book Publishing
446
513
(13
)%
News Media
587
629
(7
)%
Other
—
—
—
%
Adjusted Total Revenues
$
2,486
$
2,674
(7
)%
Adjusted Segment EBITDA:
Digital Real Estate Services
$
115
$
121
(5
)%
Subscription Video Services
84
81
4
%
Dow Jones
127
109
17
%
Book Publishing
14
47
(70
)%
News Media
47
33
42
%
Other
(39
)
(51
)
24
%
Adjusted Total Segment EBITDA
$
348
$
340
2
%
For the fiscal years ended June
30,
2023
2022
% Change
(in millions)
Better/(Worse)
Adjusted Revenues:
Digital Real Estate Services
$
1,603
$
1,740
(8
)%
Subscription Video Services
2,099
2,026
4
%
Dow Jones
2,006
2,004
—
%
Book Publishing
2,026
2,191
(8
)%
News Media
2,443
2,423
1
%
Other
—
—
—
%
Adjusted Total Revenues
$
10,177
$
10,384
(2
)%
Adjusted Segment EBITDA:
Digital Real Estate Services
$
491
$
579
(15
)%
Subscription Video Services
376
360
4
%
Dow Jones
434
451
(4
)%
Book Publishing
170
306
(44
)%
News Media
166
217
(24
)%
Other
(178
)
(190
)
6
%
Adjusted Total Segment EBITDA
$
1,459
$
1,723
(15
)%
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 June 30, 2023 and 2022:
For the three months ended June
30, 2023
As Reported
Impact of Acquisitions
Impact of Divestitures
Impact of Foreign Currency
Fluctuations
Impact of Litigation Charges
Net Impact of U.K. Newspaper
Matters
As Adjusted
(in millions)
Revenues:
Digital Real Estate Services
$
369
$
(1
)
$
—
$
15
$
—
$
—
$
383
Subscription Video Services
501
—
—
37
—
—
538
Dow Jones
546
(13
)
—
(1
)
—
—
532
Book Publishing
446
(3
)
—
3
—
—
446
News Media
571
(2
)
—
18
—
—
587
Other
—
—
—
—
—
—
—
Total Revenues
$
2,433
$
(19
)
$
—
$
72
$
—
$
—
$
2,486
Segment EBITDA:
Digital Real Estate Services
$
108
$
—
$
—
$
7
$
—
$
—
$
115
Subscription Video Services
78
—
—
6
—
—
84
Dow Jones
133
(5
)
—
(1
)
—
—
127
Book Publishing
16
(2
)
—
—
—
—
14
News Media
45
—
—
2
—
—
47
Other
(39
)
(3
)
—
—
—
3
(39
)
Total Segment EBITDA
$
341
$
(10
)
$
—
$
14
$
—
$
3
$
348
For the three months ended June
30, 2022
As Reported
Impact of Acquisitions
Impact of Divestitures
Impact of Foreign Currency
Fluctuations
Impact of Litigation Charges
Net Impact of U.K. Newspaper
Matters
As Adjusted
(in millions)
Revenues:
Digital Real Estate Services
$
443
$
—
$
—
$
—
$
—
$
—
$
443
Subscription Video Services
524
—
—
—
—
—
524
Dow Jones
565
—
—
—
—
—
565
Book Publishing
513
—
—
—
—
—
513
News Media
629
—
—
—
—
—
629
Other
—
—
—
—
—
—
—
Total Revenues
$
2,674
$
—
$
—
$
—
$
—
$
—
$
2,674
Segment EBITDA:
Digital Real Estate Services
$
121
$
—
$
—
$
—
$
—
$
—
$
121
Subscription Video Services
81
—
—
—
—
—
81
Dow Jones
106
3
—
—
—
—
109
Book Publishing
47
—
—
—
—
—
47
News Media
33
—
—
—
—
—
33
Other
(73
)
—
—
—
20
2
(51
)
Total Segment EBITDA
$
315
$
3
$
—
$
—
$
20
$
2
$
340
The following tables reconcile reported revenues and Segment
EBITDA by segment to Adjusted Revenues and Adjusted Segment EBITDA
by segment for the fiscal years ended June 30, 2023 and 2022:
For the fiscal year ended June
30, 2023
As Reported
Impact of Acquisitions
Impact of Divestitures
Impact of Foreign Currency
Fluctuations
Impact of Litigation Charges
Net Impact of U.K. Newspaper
Matters
As Adjusted
(in millions)
Revenues:
Digital Real Estate Services
$
1,539
$
(10
)
$
—
$
74
$
—
$
—
$
1,603
Subscription Video Services
1,942
—
—
157
—
—
2,099
Dow Jones
2,153
(165
)
—
18
—
—
2,006
Book Publishing
1,979
(11
)
—
58
—
—
2,026
News Media
2,266
(10
)
—
187
—
—
2,443
Other
—
—
—
—
—
—
—
Total Revenues
$
9,879
$
(196
)
$
—
$
494
$
—
$
—
$
10,177
Segment EBITDA:
Digital Real Estate Services
$
457
$
—
$
—
$
34
$
—
$
—
$
491
Subscription Video Services
347
—
—
29
—
—
376
Dow Jones
494
(59
)
—
(1
)
—
—
434
Book Publishing
167
(2
)
—
5
—
—
170
News Media
156
(3
)
—
13
—
—
166
Other
(201
)
7
—
—
—
16
(178
)
Total Segment EBITDA
$
1,420
$
(57
)
$
—
$
80
$
—
$
16
$
1,459
For the fiscal year ended June
30, 2022
As Reported
Impact of Acquisitions
Impact of Divestitures
Impact of Foreign Currency
Fluctuations
Impact of Litigation Charges
Net Impact of U.K. Newspaper
Matters
As Adjusted
(in millions)
Revenues:
Digital Real Estate Services
$
1,741
$
—
$
(1
)
$
—
$
—
$
—
$
1,740
Subscription Video Services
2,026
—
—
—
—
—
2,026
Dow Jones
2,004
—
—
—
—
—
2,004
Book Publishing
2,191
—
—
—
—
—
2,191
News Media
2,423
—
—
—
—
—
2,423
Other
—
—
—
—
—
—
—
Total Revenues
$
10,385
$
—
$
(1
)
$
—
$
—
$
—
$
10,384
Segment EBITDA:
Digital Real Estate Services
$
574
$
—
$
5
$
—
$
—
$
—
$
579
Subscription Video Services
360
—
—
—
—
—
360
Dow Jones
433
18
—
—
—
—
451
Book Publishing
306
—
—
—
—
—
306
News Media
217
—
—
—
—
—
217
Other
(221
)
—
—
—
20
11
(190
)
Total Segment EBITDA
$
1,669
$
18
$
5
$
—
$
20
$
11
$
1,723
NOTE 3 – ADJUSTED NET INCOME (LOSS) ATTRIBUTABLE TO NEWS
CORPORATION STOCKHOLDERS AND ADJUSTED EPS
The Company uses net income (loss) attributable to News
Corporation stockholders and diluted earnings per share (“EPS”)
excluding expenses related to U.K. Newspaper Matters, litigation
charges, impairment and restructuring charges and “Other, net”, net
of tax, recognized by the Company or its equity method investees,
as well as the settlement of certain pre-Separation tax matters
(“adjusted net income (loss) attributable to News Corporation
stockholders” and “adjusted EPS,” respectively), to evaluate the
performance of the Company’s operations exclusive of certain items
that impact the comparability of results from period to period, as
well as certain non-operational items. The calculation of adjusted
net income (loss) attributable 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 (loss) attributable 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 (loss) attributable to News
Corporation stockholders and net income (loss) 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 (loss) income
attributable to News Corporation stockholders and reported diluted
EPS to adjusted net income attributable to News Corporation
stockholders and adjusted EPS for the three months and fiscal years
ended June 30, 2023 and 2022:
For the three months ended June
30, 2023
For the three months ended June
30, 2022
(in millions, except per share data)
Net (loss) income attributable to
stockholders
EPS
Net income attributable to
stockholders
EPS
Net (loss) income
$
(32
)
$
127
Less: Net loss (income) attributable to
noncontrolling interests
24
(17
)
Net (loss) income attributable to News
Corporation stockholders
$
(8
)
$
(0.01
)
$
110
$
0.19
U.K. Newspaper Matters
3
—
2
—
Litigation charges
—
—
20
0.03
Impairment and restructuring charges
(a)
85
0.15
27
0.05
Equity losses of affiliates (b)
81
0.14
—
—
Other, net
(11
)
(0.02
)
91
0.15
Tax impact on items above
(37
)
(0.06
)
(30
)
(0.05
)
Impact of noncontrolling interest on items
above
(35
)
(0.06
)
(2
)
—
As adjusted
$
78
$
0.14
$
218
$
0.37
(a)
During the three months ended June 30,
2023, the Company recognized non-cash impairment charges of $25
million related to the impairment of certain indefinite-lived
intangible assets during the Company’s annual impairment
assessment.
(b)
During the three months ended June 30,
2023, the Company recognized a non-cash write-down of REA Group’s
investment in PropertyGuru of approximately $81 million.
For the fiscal year ended June
30, 2023
For the fiscal year ended June
30, 2022
(in millions, except per share data)
Net income attributable to
stockholders
EPS
Net income attributable to
stockholders
EPS
Net income
$
187
$
760
Less: Net income attributable to
noncontrolling interests
(38
)
(137
)
Net income attributable to News
Corporation stockholders
$
149
$
0.26
$
623
$
1.05
U.K. Newspaper Matters
16
0.02
11
0.02
Litigation charges
—
—
20
0.03
Impairment and restructuring charges
(a)
150
0.26
109
0.18
Equity losses of affiliates (b)
81
0.14
3
0.01
Other, net
(1
)
—
(52
)
(0.09
)
Tax impact on items above
(76
)
(0.13
)
(45
)
(0.08
)
Impact of noncontrolling interest on items
above
(36
)
(0.06
)
43
0.08
As adjusted
$
283
$
0.49
$
712
$
1.20
(a)
During the fiscal year ended June 30,
2023, the Company recognized non-cash impairment charges of $25
million related to the impairment of certain indefinite-lived
intangible assets during the Company’s annual impairment
assessment.
During the fiscal year ended June 30,
2022, the Company recognized a non-cash impairment charge of $15
million related to the write- down of fixed assets associated with
the shutdown and sale of certain U.S. printing facilities at the
Dow Jones segment.
(b)
During the fiscal year ended June 30,
2023, the Company recognized a non-cash write-down of REA Group’s
investment in PropertyGuru of approximately $81 million.
During the fiscal year ended June 30,
2022, the Company recognized a non-cash impairment charge related
to an equity method investment.
NOTE 4 – CONSTANT CURRENCY REVENUES
The Company believes that the presentation of revenues excluding
the impact of foreign currency fluctuations (“constant currency
revenues”) provides useful information regarding the performance of
the Company’s core business operations exclusive of distortions
between periods caused by the unpredictability and volatility of
currency fluctuations. The Company calculates the impact of foreign
currency fluctuations for businesses reporting in currencies other
than the U.S. dollar as described in Note 2.
Constant currency revenues are not measures of performance under
generally accepted accounting principles and should not be
construed as substitutes for revenues as determined under GAAP as
measures of performance. However, management uses these measures in
comparing the Company’s historical performance and believes that
they provide meaningful and comparable information to investors to
assist in their analysis of our performance relative to prior
periods and our competitors.
The following tables reconcile reported revenues to constant
currency revenues for the three months and fiscal year ended June
30, 2023:
Q4 Fiscal 2022
Q4 Fiscal 2023
FX impact
Q4 Fiscal 2023 constant
currency
% Change - reported
% Change - constant currency
($ in millions)
Better/(Worse)
Consolidated results:
Circulation and subscription
$
1,177
$
1,129
$
(38
)
$
1,167
(4
)%
(1
)%
Advertising
479
424
(12
)
436
(11
)%
(9
)%
Consumer
491
425
(3
)
428
(13
)%
(13
)%
Real estate
359
293
(12
)
305
(18
)%
(15
)%
Other
168
162
(7
)
169
(4
)%
1
%
Total revenues
$
2,674
$
2,433
$
(72
)
$
2,505
(9
)%
(6
)%
Digital Real Estate Services:
Circulation and subscription
$
4
$
3
$
—
$
3
(25
)%
(25
)%
Advertising
36
37
—
$
37
3
%
3
%
Real estate
359
293
(12
)
$
305
(18
)%
(15
)%
Other
44
36
(3
)
$
39
(18
)%
(11
)%
Total Digital Real Estate
Services segment revenues
$
443
$
369
$
(15
)
$
384
(17
)%
(13
)%
REA Group revenues
$
250
$
223
$
(15
)
$
238
(11
)%
(5
)%
Subscription Video Services:
Circulation and subscription
$
446
$
422
$
(30
)
$
452
(5
)%
1
%
Advertising
67
67
(6
)
$
73
—
%
9
%
Other
11
12
(1
)
$
13
9
%
18
%
Total Subscription Video Services segment
revenues
$
524
$
501
$
(37
)
$
538
(4
)%
3
%
Q4 Fiscal 2022
Q4 Fiscal 2023
FX impact
Q4 Fiscal 2023 constant
currency
% Change - reported
% Change - constant currency
($ in millions)
Better/(Worse)
Dow Jones:
Circulation and subscription
$
434
$
432
$
1
$
431
—
%
(1
)%
Advertising
116
100
—
$
100
(14
)%
(14
)%
Other
15
14
—
$
14
(7
)%
(7
)%
Total Dow Jones segment revenues
$
565
$
546
$
1
$
545
(3
)%
(4
)%
Book Publishing:
Consumer
491
425
(3
)
$
428
(13
)%
(13
)%
Other
22
21
—
$
21
(5
)%
(5
)%
Total Book Publishing segment
revenues
$
513
$
446
$
(3
)
$
449
(13
)%
(12
)%
News Media:
Circulation and subscription
$
293
$
272
$
(9
)
$
281
(7
)%
(4
)%
Advertising
260
220
(6
)
$
226
(15
)%
(13
)%
Other
76
79
(3
)
$
82
4
%
8
%
Total News Media segment
revenues
$
629
$
571
$
(18
)
$
589
(9
)%
(6
)%
News UK
Circulation and subscription
$
149
$
138
$
(1
)
$
139
(7
)%
(7
)%
Advertising
78
72
—
$
72
(8
)%
(8
)%
Other
29
29
—
$
29
—
%
—
%
Total News UK revenues
$
256
$
239
$
(1
)
$
240
(7
)%
(6
)%
News Corp Australia
Circulation and subscription
$
120
$
109
$
(7
)
$
116
(9
)%
(3
)%
Advertising
129
96
(6
)
$
102
(26
)%
(21
)%
Other
43
44
(3
)
$
47
2
%
9
%
Total News Corp Australia revenues
$
292
$
249
$
(16
)
$
265
(15
)%
(9
)%
Fiscal 2022
Fiscal 2023
FX impact
Fiscal 2023 constant currency
% Change - reported
% Change - constant currency
($ in millions)
Better/(Worse)
Consolidated results:
Circulation and subscription
$
4,425
$
4,447
$
(245
)
$
4,692
—
%
6
%
Advertising
1,821
1,687
(92
)
1,779
(7
)%
(2
)%
Consumer
2,106
1,899
(58
)
1,957
(10
)%
(7
)%
Real estate
1,347
1,189
(55
)
1,244
(12
)%
(8
)%
Other
686
657
(44
)
701
(4
)%
2
%
Total revenues
$
10,385
$
9,879
$
(494
)
$
10,373
(5
)%
—
%
Digital Real Estate Services:
Circulation and subscription
$
13
$
12
$
—
$
12
(8
)%
(8
)%
Advertising
135
140
(3
)
$
143
4
%
6
%
Real estate
1,347
1,189
(55
)
$
1,244
(12
)%
(8
)%
Other
246
198
(16
)
$
214
(20
)%
(13
)%
Total Digital Real Estate
Services segment revenues
$
1,741
$
1,539
$
(74
)
$
1,613
(12
)%
(7
)%
REA Group revenues
$
1,029
$
937
$
(74
)
$
1,011
(9
)%
(2
)%
Subscription Video Services:
Circulation and subscription
$
1,753
$
1,671
$
(134
)
$
1,805
(5
)%
3
%
Advertising
232
227
(19
)
$
246
(2
)%
6
%
Other
41
44
(4
)
$
48
7
%
17
%
Total Subscription Video Services
segment revenues
$
2,026
$
1,942
$
(157
)
$
2,099
(4
)%
4
%
Dow Jones:
Circulation and subscription
$
1,516
$
1,689
$
(18
)
$
1,707
11
%
13
%
Advertising
449
413
—
$
413
(8
)%
(8
)%
Other
39
51
—
$
51
31
%
31
%
Total Dow Jones segment
revenues
$
2,004
$
2,153
$
(18
)
$
2,171
7
%
8
%
Book Publishing:
Consumer
2,106
1,899
(58
)
$
1,957
(10
)%
(7
)%
Other
85
80
—
$
80
(6
)%
(6
)%
Total Book Publishing segment revenues
$
2,191
$
1,979
$
(58
)
$
2,037
(10
)%
(7
)%
Fiscal 2022
Fiscal 2023
FX impact
Fiscal 2023 constant currency
% Change - reported
% Change - constant currency
($ in millions)
Better/(Worse)
News Media:
Circulation and subscription
$
1,143
$
1,075
$
(93
)
$
1,168
(6
)%
2
%
Advertising
1,005
907
(70
)
$
977
(10
)%
(3
)%
Other
275
284
(24
)
$
308
3
%
12
%
Total News Media segment revenues
$
2,423
$
2,266
$
(187
)
$
2,453
(6
)%
1
%
News UK
Circulation and subscription
$
577
$
536
$
(58
)
$
594
(7
)%
3
%
Advertising
313
288
(25
)
$
313
(8
)%
—
%
Other
117
109
(11
)
$
120
(7
)%
3
%
Total News UK revenues
$
1,007
$
933
$
(94
)
$
1,027
(7
)%
2
%
News Corp Australia
Circulation and subscription
$
474
$
440
$
(34
)
$
474
(7
)%
—
%
Advertising
466
412
(32
)
$
444
(12
)%
(5
)%
Other
148
146
(11
)
$
157
(1
)%
6
%
Total News Corp Australia
revenues
$
1,088
$
998
$
(77
)
$
1,075
(8
)%
(1
)%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230810820526/en/
Investor Relations Michael Florin
212-416-3363 mflorin@newscorp.com
Anthony Rudolf 212-416-3040 arudolf@newscorp.com
Corporate Communications Jim
Kennedy 212-416-4064 jkennedy@newscorp.com
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