FISCAL 2015 THIRD QUARTER KEY FINANCIAL
HIGHLIGHTS
- Revenues of $2.06 billion compared
to $2.08 billion in the prior year
- Reported Total Segment EBITDA of
$163 million compared to $175 million in the prior year
- Adjusted EPS were $0.05 compared to
$0.11 in the prior year – Reported EPS were $0.04 compared to $0.08
in the prior year
News Corporation (“News Corp” or the “Company”)
(NASDAQ:NWS)(NASDAQ:NWSA)(ASX:NWS)(ASX:NWSLV) today reported
financial results for the three months ended March 31, 2015.
Commenting on the results, Chief Executive Robert Thomson
said:
“The new News Corp continues to build a firm foundation for
digital growth. We see that most clearly in the successful
integration of realtor.com®, which grew audience and revenue at
record levels in the third quarter. News Corp is now a global
leader in digital real estate, which we believe will underpin
long-term expansion and complement our expertise in news and
financial analysis, both of which have been important ingredients
in realtor.com®'s accelerated growth. While the quarter faced some
revenue challenges, particularly at News and Information Services,
including currency headwinds, our adjusted EBITDA was relatively
stable, underscoring the strength of our assets and the
diversification of our revenue base. We believe the company is
firmly on track and the signs are positive for year-over-year
EBITDA growth in the fourth quarter.”
THIRD QUARTER RESULTS
The Company reported fiscal 2015 third quarter total revenues of
$2.06 billion, a 1% decline as compared to prior year third quarter
revenues of $2.08 billion. The majority of the revenue decline
reflects negative foreign currency fluctuations and lower
advertising revenues at the News and Information Services segment,
offset in large part by growth in the Book Publishing and Digital
Real Estate Services segments as a result of the acquisition of
Harlequin Enterprises Limited (“Harlequin”) and Move, Inc.
(“Move”), respectively. Adjusted revenues (as defined in Note 1)
declined 2% compared to the prior year.
The Company reported third quarter Total Segment EBITDA of $163
million, a 7% decline as compared to $175 million in the prior
year. These results include $15 million and $20 million in fees and
costs – net of indemnification – related to the U.K. Newspaper
Matters (as defined below) in the three months ended March 31, 2015
and 2014, respectively. Declines at the News and Information
Services segment, including higher legal costs at News America
Marketing, negative foreign currency fluctuations and increased
stock-based compensation expense resulting from the acquisition of
Move were partially offset by lower expenses at Amplify and
increased revenues in the Book Publishing segment due to the
inclusion of Harlequin results. Adjusted Total Segment EBITDA (as
defined in Note 1) declined 1% compared to the prior year.
Net income available to News Corporation stockholders was $23
million as compared to $48 million in the prior year, due to lower
Total Segment EBITDA as well as a higher effective tax rate, lower
equity earnings of affiliates, and lower interest income. Adjusted
net income available to News Corporation stockholders (as defined
in Note 3) was $28 million compared to $66 million in the prior
year. Impairment and restructuring charges were $10 million in both
the three months ended March 31, 2015 and 2014.
Net income available to News Corporation stockholders per share
was $0.04 as compared to $0.08 in the prior year. Adjusted EPS (as
defined in Note 3) were $0.05 compared to $0.11 in the prior
year.
Free cash flow available to News Corporation decreased by $105
million in the nine months ended March 31, 2015 to $391 million,
primarily as a result of certain one-time items.
SEGMENT REVIEW
For the three months ended For the nine months ended March
31, March 31, 2015 2014
% Change 2015 2014
% Change (in millions) (in millions)
Revenues: News and Information Services
$ 1,353 $ 1,488 (9 ) % $ 4,327 $ 4,595 (6 ) % Book Publishing 402
354 14 % 1,277 1,073 19 % Cable Network Programming 116 113 3 % 367
355 3 % Digital Real Estate Services 170 102 67 % 436 295 48 %
Digital Education 21 21 - % 85 70 21 % Other -
- ** -
- **
Total Revenues $ 2,062
$ 2,078 (1 ) % $ 6,492 $
6,388 2 %
Segment EBITDA: News and
Information Services $ 113 $ 146 (23 ) % $ 434 $ 534 (19 ) % Book
Publishing 56 53 6 % 188 164 15 % Cable Network Programming 27 27 -
% 113 109 4 % Digital Real Estate Services(a) 42 53 (21 ) % 156 152
3 % Digital Education (21 ) (45 ) 53 % (69 ) (140 ) 51 % Other(b)
(54 ) (59 ) 8 %
(161 ) (176 ) 9 %
Total Segment EBITDA
$ 163 $ 175 (7 ) % $ 661
$ 643 3 % ** - Not meaningful
(a) Digital Real Estate Services Segment EBITDA for the
three and nine months ended March 31, 2015 includes one-time
transaction related costs of $1 million and $19 million,
respectively, related to the acquisition of Move. (b) Other Segment
EBITDA for the three and nine months ended March 31, 2015 includes
fees and costs, net of indemnification, related to the U.K.
Newspaper Matters of $15 million and $42 million, respectively.
Other Segment EBITDA for the three and nine months ended March 31,
2014 includes fees and costs, net of indemnification, related to
the U.K. Newspaper Matters of $20 million and $56 million,
respectively.
News and Information Services
Revenues for the third quarter of fiscal 2015 decreased $135
million, or 9%, compared to the prior year. Total segment
advertising revenues declined 12%, driven primarily by negative
foreign currency fluctuations, weakness in the print advertising
market and lower revenues at News America Marketing. Circulation
and subscription revenues declined 6%, due to negative foreign
currency fluctuations, a decline in professional information
business revenues at Dow Jones and lower print circulation volume,
partially offset by higher subscription pricing, cover price
increases and higher digital subscription volume. Adjusted revenues
declined 3% compared to the prior year.
Segment EBITDA decreased $33 million in the quarter, or 23%, as
compared to the prior year. Results were impacted by lower
advertising revenues, negative foreign currency fluctuations and $8
million of higher legal expenses at News America Marketing,
partially offset by lower expenses at News Corp Australia. Adjusted
Segment EBITDA decreased 21% compared to the prior year.
Book Publishing
Revenues in the quarter increased $48 million, or 14%, compared
to the prior year driven by the inclusion of the results of
Harlequin and strong backlist sales in General Books resulting from
the continued popularity of American Sniper by Chris Kyle,
partially offset by lower revenues from the Divergent series.
E-book revenues declined 3% versus the prior year period, driven by
lower contribution from the Divergent series as well as a shift
towards the non-fiction genre, which has lower e-book conversion,
partially offset by the inclusion of Harlequin results. E-book
revenues represented 22% of consumer revenues for the quarter.
Segment EBITDA for the quarter increased $3 million, or 6%, from
the prior year, primarily due to the inclusion of the results of
Harlequin and lower expenses, partially offset by lower
contribution from the Divergent series. Adjusted revenues decreased
5% and Adjusted Segment EBITDA decreased 8% compared to the prior
year.
Cable Network Programming
In the third quarter of fiscal 2015, revenues increased $3
million, or 3%, compared to the prior year primarily due to higher
affiliate and advertising revenues, partially offset by negative
foreign currency fluctuations. Segment EBITDA in the quarter was
flat compared with the prior year, as the higher revenues were
offset by negative foreign currency fluctuations and higher
programming rights costs. Both Adjusted revenues and Adjusted
Segment EBITDA increased 15% compared to the prior year.
Digital Real Estate Services
Revenues in the quarter increased $68 million, or 67%, compared
to the prior year, primarily driven by the inclusion of the results
of Move, coupled with higher residential listing depth product
penetration and higher pricing at REA Group Limited (“REA Group”),
partially offset by negative foreign currency fluctuations and a
decline in Australian listing volumes across the market which are
down against the prior comparative period. Segment EBITDA in the
quarter decreased $11 million, or 21%, compared to the prior year
primarily due to negative foreign currency fluctuations, partially
offset by increased revenues. Segment EBITDA also includes $11
million of stock-based compensation expense related to awards
assumed in the acquisition of Move, of which $5 million is related
to the acceleration of stock-based compensation resulting from the
departures of senior executives. Excluding the impact of Move,
divestitures and foreign currency fluctuations, Adjusted revenues
and Adjusted Segment EBITDA increased 9% and 7%, respectively,
compared to the prior year. In the third quarter, Move saw strength
in its Connection for Co-Brokerage product and Media revenues.
Based on Move’s internal data, average monthly unique users of
realtor.com®’s web and mobile sites for the quarter grew 34%
year-over-year to approximately 39 million, which was driven by
more than 70% growth in mobile users; traffic accelerated in April
to 44 million monthly unique users, or 38% growth
year-over-year.
Digital Education
Revenues in the quarter were $21 million, which was flat
compared with the prior year. Segment EBITDA in the quarter
improved $24 million, or 53%, from the prior year, primarily due to
the impact of the capitalization of Amplify Learning’s software
development costs of $12 million and lower operating expenses.
Other
Segment EBITDA in the quarter improved by $5 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”) of approximately $5 million.
The net expense related to the U.K. Newspaper Matters was $15
million for the three months ended March 31, 2015 as compared to
$20 million for the three months ended March 31, 2014.
REVIEW OF EQUITY EARNINGS OF AFFILIATES’ RESULTS
Quarterly equity earnings from affiliates were $7 million
compared to $23 million in the prior year.
For
the three months ended For the nine months ended March 31, March
31, 2015 2014 2015 2014 (in
millions) (in millions) Foxtel(a) $ 8 $
23 $ 48 $ 53 Other equity affiliates, net (1 )
- - - Total equity earnings of
affiliates $ 7 $ 23 $ 48 $ 53
(a) The Company amortized $14 million and $44 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 and nine months ended March 31,
2015, respectively, and $15 million and $46 million in the
corresponding periods of fiscal 2014, respectively. 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 March 31, 2015, decreased $77 million to $620 million from
$697 million in the prior year period due to negative foreign
currency fluctuations. Foxtel EBITDA decreased $61 million to $163
million from $224 million due to increased programming costs,
higher marketing and support costs for the new Foxtel pricing and
packaging, and investment in Presto and the launch of Triple Play,
as well as negative foreign currency fluctuations. In local
currency, Foxtel revenues increased 1% and EBITDA declined 17%.
Total closing subscribers were approximately 2.8 million as of
March 31, 2015, a 7% increase compared to the prior year period, as
a result of higher subscriber sales and lower churn, driven by the
new pricing and packaging strategy that was implemented in November
2014. In the quarter, cable and satellite churn improved to 10.9%
from 13.1% in the prior year.
Foxtel operating income for the three months ended March 31,
2015 and 2014 after depreciation and amortization of $75 million
and $92 million, respectively, was $88 million and $132 million,
respectively. Operating income decreased as a result of the factors
noted above. Foxtel’s net income of $44 million decreased from $76
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 operating
activities, less capital expenditures, and REA Group free cash
flow, plus cash dividends received from REA Group.
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 operating activities to free cash flow available to
News Corporation:
For the nine months endedMarch 31,
2015 2014 (in millions)
Net cash provided by operating activities $ 702 $ 803
Less: Capital expenditures (268 ) (244
) 434 559 Less: REA Group free cash flow (88 ) (98 ) Plus: Cash
dividends received from REA Group 45
35 Free cash flow available to News Corporation $
391 $ 496
Free cash flow available to News Corporation in the nine months
ended March 31, 2015 declined $105 million to $391 million from
$496 million in the prior year. The decrease was primarily due to
the absence of the net receipts related to a foreign tax refund of
$73 million and lease incentives of $35 million received during the
nine months ended March 31, 2014, as well as higher net tax
payments of $53 million and approximately $45 million of higher
deferred compensation payments related to the acquisition of
Wireless Generation incurred in the current year period. The
decrease was partially offset by lower restructuring payments of
$62 million, lower payments for fees and costs related to the U.K.
Newspaper Matters of $46 million and higher dividends received from
REA Group.
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 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
4:30pm EDT on May 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)(NASDAQ:NWSA)(ASX:NWS)(ASX: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, cable network programming in Australia,
digital real estate services, digital education, 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 CORPORATION CONSOLIDATED STATEMENTS OF
OPERATIONS (Unaudited; in millions, except share and per
share amounts)
For the three months ended For the nine months
ended March 31, March 31, 2015 2014
2015 2014
Revenues: Advertising $ 904 $ 952 $ 2,862 $ 2,990 Circulation and
Subscription 650 665 1,989 2,005 Consumer 385 342 1,223 1,030 Other
123 119 418 363
Total Revenues 2,062 2,078 6,492 6,388
Operating expenses (1,216 ) (1,259 ) (3,796 ) (3,828 ) Selling,
general and administrative (683 ) (644 ) (2,035 ) (1,917 )
Depreciation and amortization (132 ) (142 ) (398 ) (421 )
Impairment and restructuring charges (10 ) (10 ) (31 ) (73 ) Equity
earnings of affiliates 7 23 48 53 Interest, net 12 17 42 50 Other,
net 12 (1 ) 70 (673 )
Income (loss) before income tax (expense) benefit 52 62 392 (421 )
Income tax (expense) benefit (18 ) (1 ) (107 )
686 Net income 34 61 285 265 Less: Net income
attributable to noncontrolling interests (11 ) (13 )
(54 ) (39 ) Net income attributable to News
Corporation stockholders $ 23 $ 48 $ 231 $ 226 Less: Adjustments to
Net income attributable to News Corporation stockholders –
Redeemable Preferred Stock Dividends - -
(1 ) (1 ) Net income available to News
Corporation stockholders $ 23 $ 48 $ 230 $ 225
Weighted average shares outstanding: Basic 582 579
581 579 Diluted 583 580 582 580 Net income available to News
Corporation stockholders per share: Basic and diluted $ 0.04 $ 0.08
$ 0.40 $ 0.39
NEWS CORPORATION CONSOLIDATED
BALANCE SHEETS (in millions)
As of March 31,2015
As of June 30,2014
ASSETS (unaudited) (audited) Current assets: Cash and
cash equivalents $ 2,027 $ 3,145 Amounts due from 21st Century Fox
52 66 Receivables, net 1,308 1,388 Other current assets 701
671 Total current assets 4,088 5,270
Non-current assets: Investments 2,382 2,609 Property, plant and
equipment, net 2,699 3,009 Intangible assets, net 2,313 2,137
Goodwill 3,510 2,782 Other non-current assets 694 682
Total assets $ 15,686 $ 16,489
LIABILITIES AND EQUITY
Current liabilities: Accounts payable $ 225 $ 276 Accrued expenses
1,121 1,188 Deferred revenue 399 369 Other current liabilities
528 431 Total current liabilities 2,273
2,264 Non-current liabilities: Retirement benefit
obligations 266 272 Deferred income taxes 295 224 Other non-current
liabilities 306 310 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
12,450 12,390 Retained earnings 467 237 Accumulated other
comprehensive (loss) income (554) 610 Total News
Corporation stockholders' equity 12,369 13,243 Noncontrolling
interests 157 156 Total equity 12,526
13,399 Total liabilities and equity $ 15,686 $ 16,489
NEWS CORPORATION CONSOLIDATED STATEMENTS OF CASH
FLOWS (Unaudited; in millions)
For the nine months ended March 31, 2015
2014
Operating
activities: Net Income $ 285 $ 265
Adjustments to reconcile net income to cash provided by operating
activities: Depreciation and amortization 398 421 Equity earnings
of affiliates (48 ) (53 ) Cash distributions received from
affiliates 69 47 Impairment charges, net of tax - 12 Other, net (70
) (48 ) Deferred income taxes and taxes payable 31 85 Change in
operating assets and liabilities, net of acquisitions: Receivables
and other assets 60 (140 ) Inventories, net (46 ) (32 ) Accounts
payable and other liabilities 41 281 Pension and postretirement
benefit plans (18 ) (35 ) Net cash
provided by operating activities 702
803
Investing activities: Capital
expenditures (268 ) (244 ) Acquisitions, net of cash acquired
(1,188 ) (39 ) Investments in equity affiliates and other (257 )
(12 ) Proceeds from dispositions 134 109 Other 16
- Net cash used in investing activities
(1,563 ) (186 )
Financing
activities: Net transfers from 21st Century Fox and affiliates
- 217 Repayment of borrowings acquired in the Move acquisition (129
) - Dividends paid (29 ) (23 ) Other, net (2 )
(3 ) Net cash (used in) provided by financing activities
(160 ) 191
Net
(decrease) increase in cash and cash equivalents (1,021 ) 808
Cash and cash equivalents, beginning of period 3,145 2,381 Exchange
movement on opening cash balance (97 )
18
Cash and cash equivalents, end of period $
2,027 $ 3,207
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 and nine months ended March 31, 2015
and 2014.
Revenues Total Segment EBITDA For the three months ended March 31,
For the three months ended March 31, 2015 2014
Difference 2015 2014
Difference (in millions) (in millions)
As
reported $ 2,062 $ 2,078 $ (16 ) $ 163 $ 175 $ (12 )
Impact of acquisitions (148 ) - (148 ) 3 - 3 Impact of
divestitures - (3 ) 3 - 1 (1 ) Impact of foreign currency
fluctuations 119 - 119 13 - 13 Net impact of U.K. Newspaper
Matters - - - 15 20 (5 )
As adjusted $
2,033 $ 2,075 $ (42 ) $ 194 $ 196 $ (2 )
Revenues Total Segment EBITDA For the nine months
ended March 31, For the nine months ended March 31, 2015 2014
Difference 2015 2014 Difference (in millions) (in millions)
As reported $ 6,492 $ 6,388 $ 104 $ 661 $ 643 $ 18
Impact of acquisitions (330 ) - (330 ) 8 - 8 Impact of
divestitures (1 ) (45 ) 44 - (3 ) 3 Impact of foreign
currency fluctuations 151 - 151 26 - 26 Net impact of U.K.
Newspaper Matters - - - 42 56 (14 )
As
adjusted $ 6,312 $ 6,343 $ (31 ) $ 737 $ 696
$ 41
Adjusted Revenues and Adjusted Segment EBITDA by segment for the
three and nine months ended March 31, 2015 and 2014 are as
follows:
For the three months
ended March 31, 2015 2014
% Change (in millions)
Adjusted
Revenues: News and Information Services $ 1,436 $ 1,486 (3 ) %
Book Publishing 336 354 (5 ) % Cable Network Programming 130 113 15
% Digital Real Estate Services 110 101 9 % Digital Education 21 21
- % Other - - - %
Total
Adjusted Revenues $ 2,033 $ 2,075 (2 ) %
Adjusted Segment EBITDA: News and Information Services $ 116
$ 146 (21 ) % Book Publishing 49 53 (8 ) % Cable Network
Programming 31 27 15 % Digital Real Estate Services 58 54 7 %
Digital Education (21 ) (45 ) 53 % Other (39 ) (39 )
- %
Total Adjusted Segment EBITDA $ 194 $ 196
(1 ) % For
the nine months ended March 31, 2015
2014 % Change (in millions)
Adjusted Revenues: News and Information Services $
4,417 $ 4,556 (3 ) % Book Publishing 1,071 1,069 - % Cable Network
Programming 389 355 10 % Digital Real Estate Services 350 293 19 %
Digital Education 85 70 21 % Other - -
- %
Total Adjusted Revenues $ 6,312 $ 6,343
- %
Adjusted Segment EBITDA: News and
Information Services $ 445 $ 530 (16 ) % Book Publishing 167 164 2
% Cable Network Programming 121 109 11 % Digital Real Estate
Services 192 153 25 % Digital Education (69 ) (140 ) 51 % Other
(119 ) (120 ) 1 %
Total Adjusted Segment
EBITDA $ 737 $ 696 6 %
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 March 31, 2015 and 2014.
For the three
months ended March 31, 2015
AsReported
Impact ofAcquisitions
Impact ofDivestitures
Impact ofForeignCurrencyFluctuations
Net Impactof U.K.NewspaperMatters
AsAdjusted
(in millions)
Revenues: News and Information Services
$ 1,353 $ - $ - $ 83 $ - $ 1,436 Book Publishing 402 (75 ) - 9 -
336 Cable Network Programming 116 - - 14 - 130 Digital Real Estate
Services 170 (73 ) - 13 - 110 Digital Education 21 - - - - 21 Other
- - - - - -
Total Revenues $ 2,062 $ (148 ) $ - $ 119 $ -
$ 2,033
Segment EBITDA: News and Information
Services $ 113 $ 1 $ - $ 2 $ - $ 116 Book Publishing 56 (7 ) - - -
49 Cable Network Programming 27 - - 4 - 31 Digital Real Estate
Services 42 9 - 7 - 58 Digital Education (21 ) - - - - (21 ) Other
(54 ) - - - 15 (39
)
Total Segment EBITDA $ 163 $ 3 $ - $ 13 $ 15
$ 194 For
the three months ended March 31, 2014
AsReported
Impact ofAcquisitions
Impact ofDivestitures
Impact ofForeignCurrencyFluctuations
Net Impactof U.K.NewspaperMatters
AsAdjusted
(in millions)
Revenues: News and Information Services
$ 1,488 $ - $ (2 ) $ - $ - $ 1,486 Book Publishing 354 - - - - 354
Cable Network Programming 113 - - - - 113 Digital Real Estate
Services 102 - (1 ) - - 101 Digital Education 21 - - - - 21 Other
- - - - - -
Total Revenues $ 2,078 $ - $ (3 ) $ - $ - $
2,075
Segment EBITDA: News and Information
Services $ 146 $ - $ - $ - $ - $ 146 Book Publishing 53 - - - - 53
Cable Network Programming 27 - - - - 27 Digital Real Estate
Services 53 - 1 - - 54 Digital Education (45 ) - - - - (45 ) Other
(59 ) - - - 20 (39
)
Total Segment EBITDA $ 175 $ - $ 1 $ - $ 20
$ 196
The following tables reconcile reported revenues and Segment
EBITDA by segment to Adjusted Revenues and Adjusted Segment EBITDA
by segment for the nine months ended March 31, 2015 and 2014.
For the nine
months ended March 31, 2015
AsReported
Impact ofAcquisitions
Impact ofDivestitures
Impact ofForeignCurrencyFluctuations
Net Impactof U.K.NewspaperMatters
AsAdjusted
(in millions)
Revenues: News and Information Services
$ 4,327 $ (8 ) $ - $ 98 $ - $ 4,417 Book Publishing 1,277 (215 ) -
9 - 1,071 Cable Network Programming 367 - - 22 - 389 Digital Real
Estate Services 436 (107 ) (1 ) 22 - 350 Digital Education 85 - - -
- 85 Other - - - -
- -
Total Revenues $ 6,492 $
(330 ) $ (1 ) $ 151 $ - $ 6,312
Segment
EBITDA: News and Information Services $ 434 $ 5 $ - $ 6 $ - $
445 Book Publishing 188 (21 ) - - - 167 Cable Network Programming
113 - - 8 - 121 Digital Real Estate Services 156 24 - 12 - 192
Digital Education (69 ) - - - - (69 ) Other (161 ) -
- - 42 (119 )
Total
Segment EBITDA $ 661 $ 8 $ - $ 26 $ 42 $
737
For the nine months ended March 31, 2014
AsReported
Impact ofAcquisitions
Impact ofDivestitures
Impact ofForeignCurrencyFluctuations
Net Impactof U.K.NewspaperMatters
AsAdjusted
(in millions)
Revenues: News and Information Services
$ 4,595 $ - $ (39 ) $ - $ - $ 4,556 Book Publishing 1,073 - (4 ) -
- 1,069 Cable Network Programming 355 - - - - 355 Digital Real
Estate Services 295 - (2 ) - - 293 Digital Education 70 - - - - 70
Other - - - - -
-
Total Revenues $ 6,388 $ - $ (45 ) $
- $ - $ 6,343
Segment EBITDA: News and
Information Services $ 534 $ - $ (4 ) $ - $ - $ 530 Book Publishing
164 - - - - 164 Cable Network Programming 109 - - - - 109 Digital
Real Estate Services 152 - 1 - - 153 Digital Education (140 ) - - -
- (140 ) Other (176 ) - - -
56 (120 )
Total Segment EBITDA $ 643 $
- $ (3 ) $ - $ 56 $ 696
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, income tax (expense) benefit and net income
attributable to noncontrolling interests. 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 net income.
For the three months ended March 31, 2015
2014 Change % Change ( in
millions)
Revenues $ 2,062 $ 2,078 $ (16 ) (1 ) %
Operating expenses (1,216 ) (1,259 ) 43 3 % Selling, general and
administrative (683 ) (644 ) (39 ) (6 ) %
Total Segment EBITDA 163 175 (12 ) (7 ) % Depreciation and
amortization (132 ) (142 ) 10 7 % Impairment and restructuring
charges (10 ) (10 ) - - % Equity earnings of affiliates 7 23 (16 )
(70 ) % Interest, net 12 17 (5 ) (29 ) % Other, net 12
(1 ) 13 ** Income (loss) before income
tax (expense) benefit 52 62 (10 ) (16 ) % Income tax (expense)
benefit (18 ) (1 ) (17 ) **
Net
income $ 34 $ 61 $ (27 ) (44 ) % ** - Not
meaningful For the nine months ended March 31, 2015
2014 Change % Change ( in millions)
Revenues $
6,492 $ 6,388 $ 104 2 % Operating expenses (3,796 ) (3,828 ) 32 1 %
Selling, general and administrative (2,035 ) (1,917 )
(118 ) (6 ) %
Total Segment EBITDA 661 643 18 3 %
Depreciation and amortization (398 ) (421 ) 23 5 % Impairment and
restructuring charges (31 ) (73 ) 42 58 % Equity earnings of
affiliates 48 53 (5 ) (9 ) % Interest, net 42 50 (8 ) (16 ) %
Other, net 70 (673 ) 743 **
Income (loss) before income tax (expense) benefit 392 (421 )
813 ** Income tax (expense) benefit (107 ) 686
(793 ) **
Net income $ 285 $ 265
$ 20 8 % ** - Not meaningful
NOTE 3 – ADJUSTED NET INCOME AVAILABLE TO NEWS CORPORATION
STOCKHOLDERS AND ADJUSTED EPS
The Company uses net income available to News Corporation
stockholders and diluted earnings per share (“EPS”) excluding
expenses related to U.K. Newspaper Matters, Impairment and
restructuring charges, and “Other, net”, net of tax (“adjusted net
income 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
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 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 available to
News Corporation stockholders and reported diluted EPS to adjusted
net income available to News Corporation stockholders and adjusted
EPS for the three and nine months ended March 31, 2015 and
2014.
For the
three months ended For the three months ended March 31, 2015 March
31, 2014
Net incomeavailable tostockholders
EPS
Net incomeavailable tostockholders
EPS (in millions, except per share data)
As reported $ 23 $ 0.04 $ 48 $ 0.08 U.K.
Newspaper Matters 15 0.02 20 0.03 Impairment and
restructuring charges 10 0.02 10 0.02 Other, net (12 ) (0.02
) 1 - Tax impact on items above (8 ) (0.01 ) (13 ) (0.02 )
As adjusted $ 28 $ 0.05
$ 66 $ 0.11 For the nine
months ended For the nine months ended March 31, 2015 March 31,
2014
Net incomeavailable tostockholders
EPS
Net incomeavailable tostockholders
EPS (in millions, except per share data)
As reported
$ 230 $ 0.40 $ 225 $ 0.39 U.K. Newspaper Matters 42 0.07 56
0.10 Impairment and restructuring charges 31 0.05 73 0.13
Other, net (a) (70 ) (0.12 ) 673 1.16 Tax impact on
items above(b) (10 ) (0.02 ) (765 ) (1.33 ) Impact of
noncontrolling interest on items included in Other, net above 11
0.02 - -
As adjusted $ 234 $ 0.40
$ 262 $ 0.45 (a)
Other, net for the nine months ended March 31, 2015 primarily
includes a gain on the sale of marketable securities and dividends
received from cost method investments. Other, net for the nine
months ended March 31, 2014 primarily includes a foreign tax refund
paid or payable to 21st Century Fox, offset by a gain on a third
party pension contribution. (b) Tax impact on items above for the
nine months ended March 31, 2014 primarily includes a foreign tax
refund of $721 million which has an offsetting payable to 21st
Century Fox included within Other, net above.
News CorporationMichael Florin, 212-416-3363Investor
Relationsmflorin@newscorp.comorJim Kennedy, 212-416-4064Corporate
Communicationsjkennedy@newscorp.com
News (NASDAQ:NWSA)
Historical Stock Chart
From Sep 2024 to Oct 2024
News (NASDAQ:NWSA)
Historical Stock Chart
From Oct 2023 to Oct 2024