FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
For the month of May 2004 (May 6, 2004)
THE NEWS CORPORATION LIMITED
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(Name of Registrant)
2 Holt Street, Sydney, New South Wales, 2010, Australia
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(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports
under cover Form 20-F or Form 40-F:
Form 20-F X Form 40-F
---
Indicate by check mark if the registrant is submitting the Form 6-K in paper as
permitted by Regulation S-T Rule 101(b)(1):
Yes No X
--- ---
Indicate by check mark if the registrant is submitting the Form 6-K in paper as
permitted by Regulation S-T Rule 101(b)(7):
Yes No X
--- ---
Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934:
Yes No X
--- ---
If "Yes" is marked, indicate below the file number assigned to the registrant in
connection with Rule 12g3-2(b): Not Applicable
Annexed hereto are copies of announcements by The News Corporation Limited
("News Corporation") of its financial results for the quarter ended March 31,
2004 in Australian and U.S. dollars.
Such announcements were filed with the Australian Stock Exchange and released in
New York on May 6, 2004.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
THE NEWS CORPORATION LIMITED
Date: May 6, 2004 By: /s/ Arthur M. Siskind
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Arthur M. Siskind
Director
EXHIBIT INDEX
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Exhibit Page No. in Sequential
------- ----------------------
Numbering System
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A. Announcement made by News Corporation
of its financial results in Australian dollars
for the quarter ended March 31, 2004. 6
B. Announcement made by News Corporation
of its financial results in U.S. dollars
for the quarter ended March 31, 2004. 24
EXHIBIT A
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EARNINGS RELEASE FOR THE QUARTER ENDED 31 MARCH, 2004
IN AUSTRALIAN DOLLARS
NEWS CORPORATION REPORTS THIRD QUARTER OPERATING INCOME OF A$1.1 BILLION ON
REVENUES OF A$6.8 BILLION
NET PROFIT BEFORE OTHER ITEMS INCREASES 19% TO A$605 MILLION
NET PROFIT INCREASES 30% TO A$612 MILLION
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QUARTER HIGHLIGHTS
o Strong advertising growth at Fox News and higher affiliate revenues at the
Regional Sports Networks drive operating income up 51% on a US$ basis at
Cable Network Programming.
o Television segment operating income up 25% on a US$ basis as higher pricing
and the strength of American Idol increases advertising revenues at the
broadcast network and television stations. STAR's operating profit more
than doubles on subscription and advertising gains, mainly in India.
o Filmed Entertainment operating income up 6% over a year ago on a US$ basis
as continued robust home entertainment sales of film and television titles
match prior-year success.
o All print businesses report double-digit earnings growth in local currency
terms: advertising and circulation revenue gains in U.K. and Australia fuel
newspapers; increased free-standing inserts page volume and higher InStore
contributions lift Magazines and Inserts; array of bestsellers fuels
HarperCollins.
o SKY Italia adds 180,000 net subscribers and ends the quarter with a
subscriber base of more than 2.6 million; operating losses decline to A$23
million from the second quarter of this fiscal year.
Sydney, 6 May, 2004 - The News Corporation Limited (ASX: NCP, NCPDP) today
reported third quarter consolidated revenues of A$6.8 billion, compared to A$7.4
billion in the prior year, and consolidated operating income of A$1,097 million,
versus A$1,161 million reported a year ago. These results were driven by
double-digit operating income increases across nearly all operating segments in
local currency terms offset by unfavourable foreign currency fluctuations.
Net profit for the fiscal third quarter was A$612 million, an increase of A$141
million over the A$471 million reported in the third quarter a year ago. Net
profit before other items was A$605 million, an increase of A$96 million over
the A$509 million reported in the prior year.
Commenting on the results, Chairman and Chief Executive Rupert Murdoch said:
"We are extremely pleased with News Corp's third quarter results, with 22%
operating income growth in U.S. dollar terms that was achieved across all
of our business segments. Several assets in which we have invested heavily
in recent years continue to achieve rapid growth. Our film and television
production units have been buoyed by an expanding home entertainment market
and our cable networks are enjoying double-digit gains on the back of
advertising and affiliate growth. Simultaneously, we have maintained
momentum at our established businesses with double-digit gains across our
television, newspapers, magazines and inserts, and book publishing
segments.
"The growing success of our core businesses is complemented by the
encouraging progress at our newest direct-to-home television investments.
SKY Italia continues to exceed expectations with higher than anticipated
revenues per user and strong subscriber growth. DIRECTV's new management
has quickly strengthened that platform's competitive and financial position
with the addition of 460,000 new subscribers during the quarter and the
announced sale of its stake in PanAmSat for US$4.3 billion. Our unique
asset balance, combined with the strong earnings growth throughout the
company and the recent announcement to seek reincorporation in the United
States, puts us in a great position to continue to generate value for our
shareholders."
Management Review of Performance
The Statement of Financial Performance, Statement of Financial Position,
Statement of Cash Flows and Supplemental Financial Data for the three and nine
months ended 31 March are attached. The following commentary is made in respect
of those statements, including an analysis of certain information contained
therein.
Net Profit Attributable to Members of the Parent Entity
The reported net profit attributable to members of the parent entity consisted
of the following items:
3 Months Ended 9 Months Ended
31 March, 31 March,
2004 2003 2004 2003
-------------- -------------- -------------- --------------
A$ Millions (except per share amounts)
Revenue $ 6,751 $ 7,432 $ 21,731 $ 22,783
-------------- -------------- -------------- --------------
Operating income 1,097 1,161 3,261 3,470
Associated entities before other items 74 (40) 229 (283)
Interest expense, net (153) (188) (480) (620)
Exchangeable securities expense (25) (21) (80) (67)
-------------- -------------- -------------- --------------
Profit before income tax expense, outside
equity interest and other items 993 912 2,930 2,500
Income tax expense (319) (287) (928) (787)
Outside equity interest (69) (116) (233) (333)
-------------- -------------- -------------- --------------
Net profit before other items 605 509 1,769 1,380
-------------- -------------- -------------- --------------
Other items, net of tax and outside equity
interest:
Group 5 (15) 11 (40)
Associated entities 2 (23) (23) (144)
-------------- -------------- -------------- --------------
Total other items 7 (38) (12) (184)
-------------- -------------- -------------- --------------
Net profit attributable to members of the
parent entity $ 612 $ 471 $ 1,757 $ 1,196
============== ============== ============== ==============
Earnings per share (diluted) on net profit
before other items, net $ 0.103 $ 0.097 $ 0.320 $ 0.262
============== ============== ============== ==============
Weighted average number of shares outstanding
in millions (diluted) 5,869 5,147 5,500 5,140
============== ============== ============== ==============
The following commentary discusses the major components of these results.
Consolidated Operating Income 3 Months Ended 3 Months Ended
31 March, 31 March,
2004 2003 2004 2003
-------------- -------------- -------------- --------------
A$ Millions A$ Millions
Filmed Entertainment $ 269 $ 342 $ 1,119 $ 983
Television 344 352 853 991
Cable Network Programming 184 159 652 591
Direct Broadcast Satellite Television* (23) - (350) -
Magazines & Inserts 112 129 289 328
Newspapers 233 198 631 485
Book Publishing 44 36 214 228
Other (66) (55) (147) (136)
-------------- -------------- -------------- --------------
Consolidated Operating Income $ 1,097 $ 1,161 $ 3,261 $ 3,470
============== ============== ============== ==============
* New segment reflecting the results of SKY Italia, consolidated as of 1 May,
2003
Third quarter net earnings from associated entities before other items were A$74
million versus losses of A$40 million in the same period a year ago, primarily
due to the absence of Stream's losses in the current year. A detailed discussion
of the components of associated entities earnings is provided later in the
release.
Third quarter net profit before other items increased to A$605 million (A$0.103
per share) versus A$509 million (A$0.097 per share) in the prior year primarily
due to the significant improvement in net earnings from associated entities.
The following commentary is discussed primarily in U.S. dollars
REVIEW OF OPERATING RESULTS
FILMED ENTERTAINMENT
The Filmed Entertainment segment reported third quarter operating income of
US$214 million, up 6% from the US$201 million reported in the same period a year
ago. Current-quarter results primarily reflect strong contributions from film
and television home entertainment releases.
Film results were largely driven by the worldwide home entertainment performance
of League of Extraordinary Gentlemen as well as contributions from various
catalog titles including Planet of the Apes, Moulin Rouge and Ice Age.
Additionally, the worldwide theatrical performance of Cheaper by the Dozen,
which has brought in nearly US$190 million worldwide since its release, also
contributed to the strong quarterly results. The prior year's strong results
included the continued success of Ice Age in the worldwide home entertainment
market and strong domestic home entertainment performances from several
smaller-budget releases.
Twentieth Century Fox Television (TCFTV) profits continued to expand, primarily
reflecting sustained momentum in home entertainment sales, most notably from
Angel, Futurama, Family Guy and 24.
TELEVISION
The Television segment reported third quarter operating income of US$259
million, an increase of 25% versus the same period a year ago, reflecting
double-digit earnings improvement at the FOX Broadcasting Company and Fox
Television Stations, and higher contributions from STAR.
At the FOX Broadcasting Company, third quarter operating income improved by
US$14 million compared to a year ago due to higher pricing for the primetime
entertainment schedule and improved sports advertising on National Football
League telecasts, with ratings up nearly 10% for the post-season. Current year
entertainment contributions were fueled by American Idol, which has grown its
ratings by 13% versus a year ago, partially offset by the success a year ago of
Joe Millionaire.
Fox Television Stations (FTS) third quarter operating income grew 24% over the
prior year as FTS achieved another quarter of record market share. Current-year
results were driven by stronger primetime advertising revenue led by the success
of American Idol as well as higher sales for local news and the NFL playoffs.
Additionally, non-recurring advertising pre-emptions in the prior year,
associated with war in Iraq, contributed to the year-on-year improvement.
STAR, bolstered by a 12% increase in revenues, more than doubled its third
quarter operating income versus prior year. Revenue gains were driven primarily
by advertising growth both in India, from the continued growth of STAR Plus.
Expansion continued in China, from increased penetration of the Xing Kong
channel, which has become the number one national/regional channel in the
Guangdong cable market.
CABLE NETWORK PROGRAMMING
Cable Network Programming reported third quarter operating income of US$143
million, an increase of 51% over last year's results, reflecting strong growth
across all of the Company's primary cable channels.
Fox News Channel (FNC) operating income doubled as higher advertising pricing
drove double-digit revenue gains over the third quarter a year ago, which
included pre-emptions and higher news gathering costs associated with covering
the war in Iraq. During the quarter, FNC once again achieved the highest
viewership among all cable news channels, expanding its lead over its nearest
competitor to 59% in primetime and 73% on a 24-hour basis.
Fox Cable Networks (including the Regional Sports Networks (RSNs), FX and SPEED
Channel) operating profit improved 15% during the quarter driven by affiliate
revenue growth at both the RSNs and FX. Higher affiliate revenue contributions
at the RSNs, largely due to increased affiliate rates and additional DTH
subscribers, combined with increased advertising sales to drive operating income
growth at the RSNs. This growth was partially offset by higher programming costs
from additional events and rights increases versus a year ago. FX affiliate
revenue growth, primarily resulting from a 6% increase in subscribers over the
past year, drove double-digit operating income growth. Partially offsetting
these improvements were increased costs related to entertainment programming,
including The Shield and the original movie Redemption, whose April premiere
delivered the highest Adults 18-49 rating on basic cable this season. Overall,
FX's nightly primetime viewership during the third quarter was the highest in FX
history with an average of more than one million viewers.
DIRECT BROADCAST SATELLITE TELEVISION
On April 30th, 2003 the Company completed the acquisition of the Italian pay-TV
business Telepiu and combined it with Stream. News Corporation owns 80.1% of the
combined entity, SKY Italia, whose results this segment comprises. During the
third quarter, SKY Italia reported an operating loss of US$25 million on
revenues of US$492 million while increasing the subscriber base to more than 2.6
million. Over 90% of the new subscribers during the quarter opted for a
premium-programming tier including movies and/or sports programming contributing
to an average revenue per subscriber continuing above (euro)40 per month.
MAGAZINES AND INSERTS
The Magazines and Inserts segment reported third quarter operating income of
US$84 million, an increase of US$8 million, or 11%, versus a year ago. The
improvement was driven by revenue growth at the InStore division, primarily from
higher shelf product volume, and higher contributions at the Free-Standing
Inserts division, resulting from increased demand for packaged goods and custom
publishing pages.
NEWSPAPERS
The Newspaper segment reported third quarter operating income of US$176 million,
a 53% increase versus the same period a year ago reflecting circulation revenue
increases in the U.K. combined with advertising strength in both the U.K. and
Australia.
The U.K. newspaper group reported operating income growth of 22% in local
currency terms for the third quarter compared to the prior year, driven by both
circulation and advertising revenue gains partially offset by costs associated
with the compact version of The Times. Circulation revenue growth was achieved
across all titles, with the largest increase at The Sun, where reduced cover
price initiatives during the third quarter a year ago adversely affected
results. The improvement in advertising was primarily driven by growth at The
Sun on the strength of higher classified and colour advertisements.
The Australian newspaper group reported a 20% increase in operating income in
local currency terms, primarily driven by a 9% increase in advertising revenue
compared to a year ago. Display and classified advertising continued to show the
strong growth experienced in the first and second quarters, with ongoing
strength in real estate, retail and employment advertising.
BOOK PUBLISHING
HarperCollins reported operating income of US$36 million during the quarter, an
increase of US$13 million compared to the same period a year ago. The 57%
growth, driven by 30% higher revenues, reflects solid performances around the
world and an array of bestsellers, led by Zondervan's unprecedented sales of The
Purpose Driven Life by Rick Warren, with more than 15 million copies sold to
date. During the quarter, HarperCollins had 35 books on The New York Times
bestseller list including four titles that reached the #1 spot.
OTHER ITEMS
During the quarter, the Company completed the sale of the Los Angeles Dodgers
franchise and real estate assets to real estate developer Frank McCourt for the
gross sale price of approximately US$421 million and agreed to remit US$50
million to the buyer for certain pre-existing commitments.
Following the quarter the Company announced it is pursuing a reorganisation that
would change the Company's place of incorporation to the United States by the
end of calendar 2004. In connection with this reorganisation, News Corporation
would also acquire the 58% controlling interest in Queensland Press Pty Limited
(QPL) not currently owned by the Company. The completion of the reorganization
and the QPL transactions is subject to a number of conditions, including
obtaining regulatory clearances, court approvals, certain tax rulings and the
requisite vote of the Company's shareholders and option holders as well as
obtaining independent appraisals and fairness opinions.
REVIEW OF ASSOCIATED ENTITIES RESULTS
Third quarter net earnings from associated entities before other items were A$74
million versus losses of A$40 million in the same period a year ago, primarily
due to the absence of Stream's losses in the current year.
The Company's share of associated entities' earnings (losses) is as follows:
3 Months Ended 9 Months Ended
31 March, 31 March,
% Owned 2004 2003 2004 2003
---------- ---------- -------- ---------- --------
US$ Millions US$ Millions
Sky Brasil 49.7%(a) (6) 1 (20) (56)
Innova - Mexico 30.0% 4 (10) (6) (27)
FOXTEL - Australia 25.0% (8) (2) (15) (6)
Stream 50.0%(b) - (50) - (150)
Other Associates Various (c) 66 35 203 78
--------- --------- --------- ---------
Total associated entities'
earnings (losses) before
other items $ 56 $ (26) $ 162 $ (161)
Other items 1 (14) (16) (81)
--------- --------- --------- ---------
Total associated entities'
earnings (losses) $ 57 $ (40) $ 146 $ (242)
--------- --------- --------- ---------
Total associated entities'
earnings (losses) A$ 76 A$ (63) A$ 206 A$ (427)
========= ========= ========= =========
Further details on the associated entities follow.
----------------------------------------------
(a) Represents the Company's economic interest, which was 48.5% as of 31 March,
2003. The Company continues to hold a 36% equity interest in Sky Brasil.
(b) The Company's share of Stream's losses was included as part of associated
entities from 1 April, 2002 through 30 April, 2003, when it merged with
Telepiu to form the consolidated entity SKY Italia.
(c) Primarily comprising BSkyB, Gemstar-TV Guide International, The DIRECTV
Group (since its acquisition on 22 December, 2003), Independent Newspapers
Limited, and Queensland Press. The Company's investment basis in BSkyB was
negative from 31 December, 2001 through 11 November, 2002. Accordingly, the
Company's share of BSkyB's results was not recognised during that period.
Sky Brasil (in US$) (1) 3 Months Ended 9 Months Ended
31 March, 31 March,
2004 2003 2004 2003
-------------- -------------- --------------- --------------
Millions (except subscribers) Millions (except subscribers)
Revenues (in local currency) R$ 166 R$ 140 R$ 486 R$ 408
Revenues $ 57 $ 40 $ 167 $ 119
Operating profit/(loss) 4 (1) 4 (13)
Net income/(loss) $ (12) $ 2 $ (40) $ (134)
============== ============== =============== ==============
News' reportable 49.7%/48.5% share (in US$) $ (6) $ 1 $ (20) $ (56)
============== ============== =============== ==============
Net debt (excluding capitalized leases) $ 208 $ 211
Ending Subscribers 787,000 740,000
Sky Brasil's revenues grew 19% in local currency terms in the quarter compared
to prior year primarily driven by a higher subscriber base and increased average
revenue per subscriber. The revenue growth for the quarter was partly offset by
higher programming costs due to the larger subscriber base. The increase in net
loss in the current quarter principally reflects foreign currency losses versus
gains in the prior year.
Innova - Mexico (in US$)(1) 3 Months Ended 9 Months Ended
31 March, 31 March,
2004 2003 2004 2003
--------------- --------------- --------------- --------------
Millions (except subscribers) Millions (except subscribers)
Revenues (in local currency) Ps 1,066 Ps 858 Ps 2,988 Ps 2,497
Revenues $ 97 $ 79 $ 272 $ 243
Operating income 21 8 49 21
Net income (loss) $ 13 $ (32) $ (20) $ (90)
=============== =============== =============== ==============
News' reportable 30% share (in US$) $ 4 $ (10) $ (6) $ (27)
=============== =============== =============== ==============
Net Debt (excluding capitalized leases) $ 348 $ 352
Ending Subscribers 886,000 780,000
Innova's revenues grew 24% in local currency terms compared to prior year
primarily driven by a 14% increase in the subscriber base as well as the
elimination of the 10% excise tax on telecommunication services formerly imposed
by the Mexican government. The net income during the quarter improved from a net
loss in the prior year quarter principally due to higher revenues and lower
interest expense and foreign currency losses resulting from the refinancing of
debt.
FOXTEL (in A$) 3 Months Ended 9 Months Ended
31 March, 31 March,
2004 2003 2004 2003
-------------- -------------- ----------------- --------------
Millions (except Millions (except subscribers)
subscribers)
Revenues A$ 192 A$ 180 A$ 560 A$ 468
Operating loss (59) (22) (117) (66)
Net loss A$ (43) A$ (13) A$ (83) A$ (43)
============== ============== ================= ==============
News' reportable 25% share (in US$) $ (8) $ (2) $ (15) $ (6)
============== ============== ================= ==============
Ending Subscribers (including Optus) 1,074,000 1,047,000
FOXTEL's revenues for the quarter increased 7%, principally due to an increase
of 17% in satellite subscribers compared to a year ago, and higher average
revenue per subscriber. Net loss for the quarter increased by A$30 million
against the prior year as the increased subscriber revenues were more than
offset by subscriber acquisition expenses relating to the development and launch
of the new digital service on 14 March, 2004, and higher depreciation expense.
Total subscribers (including Optus wholesale) have increased by 2.6% over prior
year while FOXTEL managed subscribers have increased by 6.3%. At 31 March over
170,000 orders had been taken for the digital service from new and existing
subscribers.
(1) Please refer to respective companies' earnings releases for detailed
information.
Foreign Exchange Rates
Average foreign exchange rates used in the year-to-date profit results are as
follows:
9 Months Ended
31 March,
2004 2003
-------------- ---------------
Australian Dollar/U.S Dollar 0.71 0.57
U.K. Pounds Sterling/U.S. Dollar 1.72 1.57
Euro/U.S. Dollar 1.19 1.02
To receive a copy of this press release through the Internet, access News Corp's
corporate website located at http://www.newscorp.com
Audio from News Corp's conference call with analysts on the second quarter
results can be heard live on the Internet at 10:30 p.m. Eastern (Australia) Time
today. To listen to the call, visit http://www.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.
--------------------------------------------------------------------------------
CONTACTS:
Reed Nolte, Investor Relations Andrew Butcher, Press Inquiries
212-852-7092 212-852-7070
STATEMENT OF FINANCIAL PERFORMANCE 1 3 Months Ended 9 Months Ended
Note 31 March, 31 March,
2004 2003 2004 2003
-------------- -------------- -------------- --------------
A$ Millions (except per share amounts)
Sales revenue 1 $ 6,751 $ 7,432 $ 21,731 $ 22,783
Operating expenses (5,654) (6,271) (18,470) (19,313)
-------------- -------------- -------------- --------------
Operating income 1 1,097 1,161 3,261 3,470
Net profit (loss) from associated entities 76 (63) 206 (427)
Borrowing costs (197) (243) (625) (769)
Interest income 44 55 145 149
-------------- -------------- -------------- --------------
Net borrowing costs (153) (188) (480) (620)
Exchangeable securities expense (25) (21) (80) (67)
Other items before income tax, net (7) (54) (13) (101)
-------------- -------------- -------------- --------------
Profit from ordinary activities before income tax 988 835 2,894 2,255
-------------- -------------- -------------- --------------
Income tax expense on:
Ordinary activities before other items (319) (287) (928) (787)
Other items - 38 2 60
-------------- -------------- -------------- --------------
Net income tax expense (319) (249) (926) (727)
-------------- -------------- -------------- --------------
Net profit from ordinary activities after tax 669 586 1,968 1,528
Net profit attributable to outside equity interests (57) (115) (211) (332)
---------------------------------------------------------------------------------------------------------------------------------
Net Profit Attributable to Members of the Parent Entity $ 612 $ 471 $ 1,757 $ 1,196
---------------------------------------------------------------------------------------------------------------------------------
Net exchange gains (losses) recognised directly in equity 187 (2,104) (2,405) (1,733)
Other items recognised directly in equity - - - 152
-------------- -------------- -------------- --------------
Total change in equity other than those resulting from
transactions with owners as owners $ 799 $ (1,633) $ (648) $ (385)
============== ============== ============== ==============
Diluted earnings per share on net profit attributable to
members of the parent entity
Ordinary shares $ 0.092 $ 0.079 $ 0.282 $ 0.201
Preferred limited voting ordinary shares $ 0.110 $ 0.095 $ 0.338 $ 0.241
Ordinary and preferred limited voting ordinary shares $ 0.104 $ 0.089 $ 0.318 $ 0.226
STATEMENT OF FINANCIAL POSITION 31 March, 30 June,
2004 2003
------------------- -------------------
ASSETS A$ Millions
Current Assets
Cash $ 5,244 $ 6,746
Cash on deposit 389 -
Receivables 5,241 5,701
Inventories 2,266 1,931
Other 569 483
------------------- -------------------
Total Current Assets 13,709 14,861
------------------- -------------------
Non-Current Assets
Cash on deposit - 698
Receivables 1,123 1,219
Investments in associated entities 14,427 5,526
Other investments 868 1,195
Inventories 3,665 4,103
Property, plant and equipment 5,413 6,299
Publishing rights, titles and television licenses 29,846 32,724
Goodwill 318 377
Other 935 745
------------------- -------------------
Total Non-Current Assets 56,595 52,886
------------------- -------------------
Total Assets $ 70,304 $ 67,747
=================== ===================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Interest bearing liabilities $ 582 $ 33
Payables 7,671 8,298
Tax liabilities 611 714
Provisions 442 258
------------------- -------------------
Total Current Liabilities 9,306 9,303
------------------- -------------------
Non-Current Liabilities
Interest bearing liabilities 11,490 12,396
Payables 3,114 3,545
Tax liabilities 973 666
Provisions 1,045 1,032
------------------- -------------------
Total Non-Current Liabilities Excluding Exchangeable Securities 16,622 17,639
------------------- -------------------
Exchangeable securities 1,926 2,084
------------------- -------------------
Total Liabilities 27,854 29,026
Shareholders' Equity
Contributed equity 34,327 28,427
Reserves 753 2,760
Retained profits 2,176 1,137
------------------- -------------------
Shareholders' equity attributable to members of the parent entity 37,256 32,324
Outside equity interests in controlled entities 5,194 6,397
------------------- -------------------
Total Shareholders' Equity 42,450 38,721
------------------- -------------------
Total Liabilities and Shareholders' Equity $ 70,304 $ 67,747
=================== ===================
STATEMENT OF CASH FLOWS 9 Months Ended 31 March,
2004 2003
------------------- -------------------
Operating Activity A$ Millions
Net profit attributable to members of the parent entity $ 1,757 $ 1,196
Adjustment for non-cash and non-operating activities:
Equity earnings, net (184) 317
Outside equity interest 233 333
Depreciation and amortisation 646 553
Other items, net 12 184
Change in assets and liabilities:
Receivables (510) (726)
Inventories (567) (168)
Payables 754 218
Other liabilities 519 518
------------------- -------------------
Cash provided by operating activity 2,660 2,425
Investing and other activity
Property, plant and equipment (289) (421)
Acquisitions, net of cash acquired (205) (720)
Investments in associated entities (4,355) (756)
Other investments (87) (108)
Repayment of loans by associate - 170
Proceeds from sale of non-current assets 744 166
------------------- -------------------
Cash used in investing activity (4,192) (1,669)
Financing activity
Issuance of debt 596 3,456
Repayment of debt and exchangeable securities (835) (4,154)
Decrease in cash on deposit 221 -
Issuance of shares 781 2,045
Dividends paid (144) (152)
Leasing and other finance costs - (3)
------------------- -------------------
Cash provided by financing activity 619 1,192
------------------- -------------------
Net (decrease) increase in cash (913) 1,948
Opening cash balance 6,746 6,337
Exchange movement on opening balance (589) (189)
------------------- -------------------
Closing cash balance $ 5,244 $ 8,096
=================== ===================
Note 1 - SEGMENT DATA 3 Months Ended 9 Months Ended
31 March, 31 March,
BY GEOGRAPHIC AREAS 2004 2003 2004 2003
-------------- -------------- -------------- --------------
A$ Millions A$ Millions
Revenues
United States $ 4,432 $ 5,706 $ 15,039 $ 17,561
Europe 1,703 1,115 4,751 3,339
Australasia 616 611 1,941 1,883
-------------- -------------- -------------- --------------
$ 6,751 $ 7,432 $ 21,731 $ 22,783
============== ============== ============== ==============
Operating Income
United States $ 869 $ 911 $ 2,808 $ 2,813
Europe 132 175 122 426
Australasia 96 75 331 231
-------------- -------------- -------------- --------------
$ 1,097 $ 1,161 $ 3,261 $ 3,470
============== ============== ============== ==============
BY INDUSTRY SEGMENT
Revenues
Filmed Entertainment $ 1,521 $ 1,975 $ 5,362 $ 5,982
Television 1,521 1,897 5,276 6,355
Cable Network Programming 793 924 2,584 2,832
Direct Broadcast Satellite Television* 656 - 1,658 -
Magazines and Inserts 366 450 1,026 1,190
Newspapers 1,197 1,191 3,534 3,502
Book Publishing 413 410 1,420 1,627
Other 284 585 871 1,295
-------------- -------------- -------------- --------------
$ 6,751 $ 7,432 $ 21,731 $ 22,783
============== ============== ============== ==============
Operating Income
Filmed Entertainment $ 269 $ 342 $ 1,119 $ 983
Television 344 352 853 991
Cable Network Programming 184 159 652 591
Direct Broadcast Satellite Television* (23) - (350) -
Magazines and Inserts 112 129 289 328
Newspapers 233 198 631 485
Book Publishing 44 36 214 228
Other (66) (55) (147) (136)
-------------- -------------- -------------- --------------
$ 1,097 $ 1,161 $ 3,261 $ 3,470
============== ============== ============== ==============
* New segment reflecting the results of SKY Italia, consolidated as of 1 May,
2003.
Note 2 - SUPPLEMENTAL FINANCIAL DATA
The Company considers net profit before other items to be an important indicator
of the Company's operating performance on a consolidated basis. Net profit
before other items, defined as net profit attributable to members of the parent
entity before other items related to the Company and associated entities, net of
applicable income tax expenses and outside equity interests, eliminates the
effect of transactions that are considered significant by reason of their size,
nature or effect on the Company's financial performance for the year. Net profit
before other items should be considered in addition to, not as a substitute for
the Company's operating income, net profit attributable to members of the parent
entity, cash flows and other measures of financial performance prepared in
accordance with generally accepted accounting principles in Australia. Net
profit before other items does not reflect cash available to fund requirements,
and the items excluded from net profit before other items, such as other
revenues and expenses, are significant components in assessing the Company's
financial performance.
The following table reconciles certain components of net profit attributable to
members of the parent entity as presented on page 3 of this release to the
presentation required under Australian GAAP as required by Australian Accounting
Standard AASB 1018 "Statement of Financial Performance" on page 12 of this
release.
3 Months Ended 9 Months Ended
31 March, 31 March,
2004 2003 2004 2003
-------------- -------------- --------------- --------------
A$ Millions A$ Millions
Total other items (page 3) $ 7 $ (38) $ (12) $ (184)
Reclassification of other items - associated
entities (2) 23 23 144
Reclassification of income tax and net profit
attributable to outside equity interest (12) (39) (24) (61)
-------------- -------------- --------------- --------------
Other items before income tax, net (page 12) $ (7) $ (54) $ (13) $ (101)
============== ============== =============== ==============
Associated entities before other items (page 3) $ 74 $ (40) $ 229 $ (283)
Reclassification of other items - associated
entities 2 (23) (23) (144)
-------------- -------------- --------------- --------------
Net profit (loss) from associated entities
(page 12) $ 76 $ (63) $ 206 $ (427)
============== ============== =============== ==============
Income tax expense (page 3) $ (319) $ (287) $ (928) $ (787)
Reclassification of income tax expense
on other items - 38 2 60
-------------- -------------- --------------- --------------
Net income tax expense (page 12) $ (319) $ (249) $ (926) $ (727)
============== ============== =============== ==============
Outside equity interest (page 3) $ (69) $ (116) $ (233) $ (333)
Reclassification of outside equity interest on
other items, net 12 1 22 1
-------------- -------------- --------------- --------------
Net profit attributable to outside equity interest
(page 12) $ (57) $ (115) $ (211) $ (332)
============== ============== =============== ==============
SUPPLEMENTAL FINANCIAL DATA (continued)
3 Months Ended 9 Months Ended
31 March, 31 March,
2004 2003 2004 2003
-------------- -------------- --------------- --------------
A$ Millions A$ Millions
Net profit before other items (page 3) $ 605 $ 509 $ 1,769 $ 1,380
Other items before income tax, net (7) (54) (13) (101)
Reclassification of income tax and net profit
attributable to outside equity interest 12 39 24 61
Reclassification of other items - associated
entities 2 (23) (23) (144)
------------- -------------- --------------- --------------
Net profit attributable to members of the parent
entity (page 12) $ 612 $ 471 $ 1,757 $ 1,196
============= ============== =============== ==============
Earnings per share on net profit before other
items, net (page 3) $ 0.103 $ 0.097 $ 0.320 $ 0.262
Earnings per share on other items before income
tax, net (0.001) (0.010) (0.002) (0.020)
Earnings per share on reclassification of income
tax and net profit attributable to outside
equity interest 0.002 0.007 0.004 0.012
Earnings per share on reclassification of other
items - associated entities - (0.005) (0.004) (0.028)
------------- -------------- --------------- --------------
Diluted earnings per share on net profit
attributable to members of the parent entity
(page 12) $ 0.104 $ 0.089 $ 0.318 $ 0.226
============= ============== =============== ==============
EXHIBIT B
---------
Earnings Release for the Quarter Ended March 31, 2004 in U.S.
Dollars Prepared for the U.S. Market. Australian Readers Should Refer
to the Australian Dollar Earnings Release.
News Corporation Reports Third Quarter Operating Income of $838 Million,
a 22% Increase, on Revenue Growth of 19%;
Net Profit before Other Items Increases 54% to $460 Million
Net Profit Increases 69% to $465 Million
QUARTER HIGHLIGHTS
-- Strong advertising growth at Fox News and higher affiliate
revenues at the Regional Sports Networks drive operating
income up 51% at Cable Network Programming.
-- Television segment operating income up 25% as higher pricing
and the strength of American Idol increases advertising
revenues at the broadcast network and television stations.
STAR's operating profit more than doubles on subscription and
advertising gains, mainly in India.
-- Filmed Entertainment operating income up 6% over a year ago as
continued robust home entertainment sales of film and
television titles match prior-year success.
-- All print businesses report double-digit earnings growth:
advertising and circulation revenue gains in U.K. and
Australia fuel newspapers; increased free-standing inserts
page volume and higher InStore contributions lift Magazines
and Inserts; array of bestsellers fuels HarperCollins.
-- SKY Italia adds 180,000 net subscribers and ends the quarter
with a subscriber base of more than 2.6 million; operating
losses decline to $25 million from the second quarter of this
fiscal year.
NEW YORK--(BUSINESS WIRE)--May 6, 2004--The News Corporation Limited
(NYSE: NWS, NWSA) today reported third quarter consolidated revenues of $5.2
billion, a 19% increase over the $4.4 billion in the prior year, and
consolidated operating income of $838 million, up 22% over the $685 million a
year ago, despite the inclusion of $25 million in losses from SKY Italia in the
quarter. The year-on-year operating income growth was driven by double-digit
increases across nearly all operating segments.
Net profit for the fiscal third quarter was $465 million, an
increase of $190 million over the $275 million reported in the third
quarter a year ago. Net profit before other items was $460 million, an
increase of $162 million over the $298 million reported in the prior
year.
Commenting on the results, Chairman and Chief Executive Rupert
Murdoch said:
"We are extremely pleased with News Corp's third quarter results,
with 22% operating income growth that was achieved across all of our
business segments. Several assets in which we have invested heavily in
recent years continue to achieve rapid growth. Our film and television
production units have been buoyed by an expanding home entertainment
market and our cable networks are enjoying double-digit gains on the
back of advertising and affiliate growth. Simultaneously, we have
maintained momentum at our established businesses with double-digit
gains across our television, newspapers, magazines and inserts, and
book publishing segments.
"The growing success of our core businesses is complemented by the
encouraging progress at our newest direct-to-home television
investments. SKY Italia continues to exceed expectations with higher
than anticipated revenues per user and strong subscriber growth.
DIRECTV's new management has quickly strengthened that platform's
competitive and financial position with the addition of 460,000 new
subscribers during the quarter and the announced sale of its stake in
PanAmSat for $4.3 billion. Our unique asset balance, combined with the
strong earnings growth throughout the company and the recent
announcement to seek reincorporation in the United States, puts us in
a great position to continue to generate value for our shareholders."
MANAGEMENT REVIEW OF PERFORMANCE
The Statement of Financial Performance, Statement of Financial
Position, Statement of Cash Flows and Supplemental Financial Data for
the three and nine months ended March 31st are attached. The following
commentary is made in respect of those statements, including an
analysis of certain information contained therein.
NET PROFIT ATTRIBUTABLE TO MEMBERS OF THE PARENT ENTITY
The reported net profit attributable to members of the parent
entity consisted of the following items:
3 Months Ended 9 Months Ended
March 31, March 31,
2004 2003 2004 2003
--------- --------- --------- ---------
US $ Millions (except per ADR amounts)
Revenue $ 5,201 $ 4,388 $ 15,438 $ 12,882
--------- --------- --------- ---------
Operating income 838 685 2,317 1,962
Associated entities before
other items 56 (26) 162 (161)
Interest expense, net (117) (111) (341) (350)
Exchangeable securities expense (20) (13) (57) (38)
--------- --------- --------- ---------
Profit before income tax
expense, outside equity
interest and other items 757 535 2,081 1,413
Income tax expense (243) (169) (659) (445)
Outside equity interest (54) (68) (166) (188)
--------- --------- --------- ---------
Net profit before other items 460 298 1,256 780
--------- --------- --------- ---------
Other items, net of tax and
outside equity interest:
Group 4 (9) 8 (23)
Associated entities 1 (14) (16) (81)
--------- --------- --------- ---------
Total other items 5 (23) (8) (104)
--------- --------- --------- ---------
Net profit attributable to
members of the parent entity $ 465 $ 275 $ 1,248 $ 676
========= ========= ========= =========
Earnings per ADR (diluted) on
net profit before other items,
net $ 0.31 $ 0.23 $ 0.91 $ 0.59
========= ========= ========= =========
Weighted average number of ADRs
outstanding in millions
(diluted) 1,467 1,287 1,375 1,285
========= ========= ========= =========
The following commentary discusses the major components of these
results.
Consolidated Operating Income 3 Months Ended 9 Months Ended
March 31, March 31,
2004 2003 2004 2003
--------- --------- --------- ---------
US $ Millions US $ Millions
Filmed Entertainment $ 214 $ 201 $ 795 $ 556
Television 259 207 606 560
Cable Network Programming 143 95 463 334
Direct Broadcast Satellite
Television* (25) - (248) -
Magazines & Inserts 84 76 205 186
Newspapers 176 115 448 274
Book Publishing 36 23 152 129
Other (49) (32) (104) (77)
--------- --------- --------- ---------
Consolidated Operating Income $ 838 $ 685 $ 2,317 $ 1,962
========= ========= ========= =========
* New segment reflecting the results of SKY Italia, consolidated as of
May 1, 2003
Third quarter net earnings from associated entities before other
items were $56 million versus losses of $26 million in the same period
a year ago, primarily due to the absence of Stream's losses in the
current year. A detailed discussion of the components of associated
entities earnings is provided later in the release.
Third quarter net profit before other items increased to $460
million ($0.31 per ADR) versus $298 million ($0.23 per ADR) in the
prior year primarily due to higher consolidated operating income and
the significant improvement in net earnings from associated entities.
REVIEW OF OPERATING RESULTS
FILMED ENTERTAINMENT
The Filmed Entertainment segment reported third quarter operating
income of $214 million, up 6% from the $201 million reported in the
same period a year ago. Current-quarter results primarily reflect
strong contributions from film and television home entertainment
releases.
Film results were largely driven by the worldwide home
entertainment performance of League of Extraordinary Gentlemen as well
as contributions from various catalog titles including Planet of the
Apes, Moulin Rouge and Ice Age. Additionally, the worldwide theatrical
performance of Cheaper by the Dozen, which has brought in nearly $190
million worldwide since its release, also contributed to the strong
quarterly results. The prior year's strong results included the
continued success of Ice Age in the worldwide home entertainment
market and strong domestic home entertainment performances from
several smaller-budget releases.
Twentieth Century Fox Television (TCFTV) profits continued to
expand, primarily reflecting sustained momentum in home entertainment
sales, most notably from Angel, Futurama, Family Guy and 24.
TELEVISION
The Television segment reported third quarter operating income of
$259 million, an increase of 25% versus the same period a year ago,
reflecting double-digit earnings improvement at the FOX Broadcasting
Company and Fox Television Stations, and higher contributions from
STAR.
At the FOX Broadcasting Company, third quarter operating income
improved by $14 million compared to a year ago due to higher pricing
for the primetime entertainment schedule and improved sports
advertising on National Football League telecasts, with ratings up
nearly 10% for the post-season. Current year entertainment
contributions were fueled by American Idol, which has grown its
ratings by 13% versus a year ago, partially offset by the success a
year ago of Joe Millionaire.
Fox Television Stations (FTS) third quarter operating income grew
24% over the prior year as FTS achieved another quarter of record
market share. Current-year results were driven by stronger primetime
advertising revenue led by the success of American Idol as well as
higher sales for local news and the NFL playoffs. Additionally,
non-recurring advertising pre-emptions in the prior year, associated
with war in Iraq, contributed to the year-on-year improvement.
STAR, bolstered by a 12% increase in revenues, more than doubled
its third quarter operating income versus prior year. Revenue gains
were driven primarily by advertising growth both in India, from the
continued growth of STAR Plus. Expansion continued in China from
increased penetration of the Xing Kong channel, which has become the
number one national/regional channel in the Guangdong cable market.
CABLE NETWORK PROGRAMMING
Cable Network Programming reported third quarter operating income
of $143 million, an increase of 51% over last year's results,
reflecting strong growth across all of the Company's primary cable
channels.
Fox News Channel (FNC) operating income doubled as higher
advertising pricing drove double-digit revenue gains over the third
quarter a year ago, which included pre-emptions and higher news
gathering costs associated with covering the war in Iraq. During the
quarter, FNC once again achieved the highest viewership among all
cable news channels, expanding its lead over its nearest competitor to
59% in primetime and 73% on a 24-hour basis.
Fox Cable Networks (including the Regional Sports Networks (RSNs),
FX and SPEED Channel) operating profit improved 15% during the quarter
driven by affiliate revenue growth at both the RSNs and FX. Higher
affiliate revenue contributions at the RSNs, largely due to increased
affiliate rates and additional DTH subscribers, combined with
increased advertising sales to drive operating income growth at the
RSNs. This growth was partially offset by higher programming costs
from additional events and rights increases versus a year ago. FX
affiliate revenue growth, primarily resulting from a 6% increase in
subscribers over the past year, drove double-digit operating income
growth. Partially offsetting these improvements were increased costs
related to entertainment programming, including The Shield and the
original movie Redemption, whose April premiere delivered the highest
Adults 18-49 rating on basic cable this season. Overall, FX's nightly
primetime viewership during the third quarter was the highest in FX
history with an average of more than one million viewers.
DIRECT BROADCAST SATELLITE TELEVISION
On April 30th, 2003 the Company completed the acquisition of the
Italian pay-TV business Telepiu and combined it with Stream. News
Corporation owns 80.1% of the combined entity, SKY Italia, whose
results this segment comprises. During the third quarter, SKY Italia
reported an operating loss of $25 million on revenues of $492 million
while increasing the subscriber base to more than 2.6 million. Over
90% of the new subscribers during the quarter opted for a
premium-programming tier including movies and/or sports programming
contributing to an average revenue per subscriber continuing above EUR
40 per month.
MAGAZINES AND INSERTS
The Magazines and Inserts segment reported third quarter operating
income of $84 million, an increase of $8 million, or 11%, versus a
year ago. The improvement was driven by revenue growth at the InStore
division, primarily from higher shelf product volume, and higher
contributions at the Free-Standing Inserts division, resulting from
increased demand for packaged goods and custom publishing pages.
NEWSPAPERS
The Newspaper segment reported third quarter operating income of
$176 million, a 53% increase versus the same period a year ago
reflecting circulation revenue increases in the U.K. combined with
advertising strength in both the U.K. and Australia.
The U.K. newspaper group reported operating income growth of 22%
in local currency terms for the third quarter compared to the prior
year, driven by both circulation and advertising revenue gains
partially offset by costs associated with the compact version of The
Times. Circulation revenue growth was achieved across all titles, with
the largest increase at The Sun, where reduced cover price initiatives
during the third quarter a year ago adversely affected results. The
improvement in advertising was primarily driven by growth at The Sun
on the strength of higher classified and color advertisements.
The Australian newspaper group reported a 20% increase in
operating income in local currency terms, primarily driven by a 9%
increase in advertising revenue compared to a year ago. Display and
classified advertising continued to show the strong growth experienced
in the first and second quarters, with ongoing strength in real
estate, retail and employment advertising.
BOOK PUBLISHING
HarperCollins reported operating income of $36 million during the
quarter, an increase of $13 million compared to the same period a year
ago. The 57% growth, driven by 30% higher revenues, reflects solid
performances around the world and an array of bestsellers, led by
Zondervan's unprecedented sales of The Purpose Driven Life by Rick
Warren, with more than 15 million copies sold to date. During the
quarter, HarperCollins had 35 books on The New York Times bestseller
list including four titles that reached the #1 spot.
OTHER ITEMS
During the quarter, the Company completed the sale of the Los
Angeles Dodgers franchise and real estate assets to real estate
developer Frank McCourt for the gross sale price of approximately $421
million and agreed to remit $50 million to the buyer for certain
pre-existing commitments.
Following the quarter the Company announced it is pursuing a
reorganization that would change the Company's place of incorporation
to the United States by the end of calendar 2004. In connection with
this reorganization, News Corporation would also acquire the 58%
controlling interest in Queensland Press Pty Limited (QPL) not
currently owned by the Company. The completion of the reorganization
and the QPL transactions is subject to a number of conditions,
including obtaining regulatory clearances, court approvals, certain
tax rulings and the requisite vote of the Company's shareholders and
option holders as well as obtaining independent appraisals and
fairness opinions.
REVIEW OF ASSOCIATED ENTITIES RESULTS
Third quarter net earnings from associated entities before other
items were $56 million versus losses of $26 million in the same period
a year ago, primarily due to the absence of Stream's losses in the
current year.
The Company's share of associated entities' earnings (losses) is
as follows:
3 Months Ended 9 Months Ended
March 31, March 31,
% Owned 2004 2003 2004 2003
------- --------- --------- --------- ---------
US $ Millions US $ Millions
Sky Brasil 49.7% (a) (6) 1 (20) (56)
Innova - Mexico 30.0% 4 (10) (6) (27)
FOXTEL - Australia 25.0% (8) (2) (15) (6)
Stream 50.0% (b) - (50) - (150)
Other Associates Various (c) 66 35 203 78
--------- --------- --------- ---------
Total
associated
entities'
earnings
(losses)
before other
items $ 56 $ (26) $ 162 $ (161)
Other items 1 (14) (16) (81)
--------- --------- --------- ---------
Total
associated
entities'
earnings
(losses) $ 57 $ (40) $ 146 $ (242)
========= ========= ========= =========
Further details on the associated entities follow.
(a) Represents the Company's economic interest, which was 48.5% as of
March 31, 2003. The Company continues to hold a 36% equity
interest in Sky Brasil.
(b) The Company's share of Stream's losses was included as part of
associated entities from April 1, 2002 through April 30, 2003,
when it merged with Telepiu to form the consolidated entity SKY
Italia.
(c) Primarily comprising BSkyB, Gemstar-TV Guide International, The
DIRECTV Group (since its acquisition on December 22, 2003),
Independent Newspapers Limited, and Queensland Press. The
Company's investment basis in BSkyB was negative from December 31,
2001 through November 11, 2002. Accordingly, the Company's share
of BSkyB's results was not recognized during that period.
Sky Brasil (in US$) (1)
-----------------------
3 Months Ended 9 Months Ended
March 31, March 31,
2004 2003 2004 2003
----------- ----------- ----------- -----------
Millions (except Millions (except
subscribers) subscribers)
Revenues (in local
currency) R$ 166 R$ 140 R$ 486 R$ 408
Revenues $ 57 $ 40 $ 167 $ 119
Operating profit (loss) 4 (1) 4 (13)
Net income (loss) $ (12) $ 2 $ (40) $ (134)
=========== =========== =========== ===========
News' reportable
49.7%/48.5% share
(in US$) $ (6) $ 1 $ (20) $ (56)
=========== =========== =========== ===========
Net debt (excluding
capitalized leases) $ 208 $ 211
Ending Subscribers 787,000 740,000
Sky Brasil's revenues grew 19% in local currency terms in the
quarter compared to prior year primarily driven by a higher subscriber
base and increased average revenue per subscriber. The revenue growth
for the quarter was partly offset by higher programming costs due to
the larger subscriber base. The increase in net loss in the current
quarter principally reflects foreign currency losses versus gains in
the prior year.
Innova - Mexico
(in US$) (1)
---------------
3 Months Ended 9 Months Ended
March 31, March 31,
2004 2003 2004 2003
----------- ----------- ----------- -----------
Millions (except Millions (except
subscribers) subscribers)
Revenues (in local
currency) Ps 1,066 Ps 858 Ps 2,988 Ps 2,497
Revenues $ 97 $ 79 $ 272 $ 243
Operating income 21 8 49 21
Net income (loss) $ 13 $ (32) $ (20) $ (90)
=========== =========== =========== ===========
News' reportable 30%
share (in US$) $ 4 $ (10) $ (6) $ (27)
=========== =========== =========== ===========
Net Debt (excluding
capitalized leases) $ 348 $ 352
Ending Subscribers 886,000 780,000
Innova's revenues grew 24% in local currency terms compared to
prior year primarily driven by a 14% increase in the subscriber base
as well as the elimination of the 10% excise tax on telecommunication
services formerly imposed by the Mexican government. The net income
during the quarter improved from a net loss in the prior year quarter
principally due to higher revenues and lower interest expense and
foreign currency losses resulting from the refinancing of debt.
FOXTEL (in A$)
--------------
3 Months Ended 9 Months Ended
March 31, March 31,
2004 2003 2004 2003
----------- ----------- ------------ -----------
Millions (except Millions (except
subscribers) subscribers)
Revenues A$ 192 A$ 180 A$ 560 A$ 468
Operating loss (59) (22) (117) (66)
Net loss A$ (43) A$ (13) A$ (83) A$ (43)
=========== =========== ============ ===========
News' reportable 25%
share (in US$) $ (8) $ (2) $ (15) $ (6)
=========== =========== ============ ===========
Ending Subscribers
(including Optus) 1,074,000 1,047,000
FOXTEL's revenues for the quarter increased 7%, principally due to
an increase of 17% in satellite subscribers compared to a year ago,
and higher average revenue per subscriber. Net loss for the quarter
increased by A$30 million against the prior year as the increased
subscriber revenues were more than offset by subscriber acquisition
expenses relating to the development and launch of the new digital
service on March 14, 2004, and higher depreciation expense. Total
subscribers (including Optus wholesale) have increased by 2.6% over
prior year while FOXTEL managed subscribers have increased by 6.3%. At
March 31st over 170,000 orders had been taken for the digital service
from new and existing subscribers.
(1) Please refer to respective companies' earnings releases for
detailed information.
Foreign Exchange Rates
Average foreign exchange rates used in the year-to-date profit
results are as follows:
9 Months Ended
March 31,
2004 2003
----------- -----------
Australian Dollar/U.S Dollar 0.71 0.57
U.K. Pounds Sterling/U.S. Dollar 1.72 1.57
Euro/U.S. Dollar 1.19 1.02
To receive a copy of this press release through the Internet,
access News Corp's corporate website located at
http://www.newscorp.com.
Audio from News Corp's conference call with analysts on the third
quarter results can be heard live on the Internet at 8:30 a.m. Eastern
Daylight Time today. To listen to the call, visit
http://www.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.
STATEMENT OF FINANCIAL
PERFORMANCE (a)
3 Months Ended 9 Months Ended
Note March 31, March 31,
2004 2003 2004 2003
--------- --------- --------- ---------
US $ Millions
(except per ADR amounts)
Sales revenue 1 $ 5,201 $ 4,388 $ 15,438 $ 12,882
Operating expenses (4,363) (3,703) (13,121) (10,920)
--------- --------- --------- ---------
Operating income 1 838 685 2,317 1,962
Net profit (loss) from
associated entities 57 (40) 146 (242)
Borrowing costs (151) (143) (444) (434)
Interest income 34 32 103 84
--------- --------- --------- ---------
Net borrowing costs (117) (111) (341) (350)
Exchangeable securities
expense (20) (13) (57) (38)
Other items before income
tax, net (5) (31) (9) (57)
--------- --------- --------- ---------
Profit from ordinary
activities before income
tax 753 490 2,056 1,275
--------- --------- --------- ---------
Income tax expense on:
Ordinary activities
before other items (243) (169) (659) (445)
Other items - 22 1 34
--------- --------- --------- ---------
Net income tax expense (243) (147) (658) (411)
--------- --------- --------- ---------
Net profit from ordinary
activities after tax 510 343 1,398 864
Net profit attributable to
outside equity interests (45) (68) (150) (188)
----------------------------------------------------------------------
Net Profit Attributable to
Members of the Parent
Entity $ 465 $ 275 $ 1,248 $ 676
----------------------------------------------------------------------
Net exchange gains
recognized directly in
equity 55 74 682 252
Other items recognized
directly in equity - - - 86
--------- --------- --------- ---------
Total change in equity
other than those resulting
from transactions with
owners as owners $ 520 $ 349 $ 1,930 $ 1,014
========= ========= ========= =========
Diluted earnings per ADR on
net profit attributable to
members of the parent
entity
Ordinary ADRs $ 0.28 $ 0.19 $ 0.80 $ 0.45
Preferred limited voting
ordinary ADRs $ 0.34 $ 0.22 $ 0.96 $ 0.55
Ordinary and preferred
limited voting ordinary
ADRs $ 0.32 $ 0.21 $ 0.90 $ 0.51
(a) Following the issuance in June 2002 of the revised Australian
Accounting Standard AASB 1018 "Statement of Financial Performance"
this statement has been reformatted from previous presentations to
be consistent with the format prescribed in the revised Australian
Accounting Standard.
STATEMENT OF FINANCIAL POSITION March 31, June 30,
2004 2003
--------- ---------
ASSETS US $ Millions
Current Assets
Cash $ 3,869 $ 4,477
Cash on deposit 287 -
Receivables 3,866 3,784
Inventories 1,672 1,282
Other 419 321
--------- ---------
Total Current Assets 10,113 9,864
--------- ---------
Non-Current Assets
Cash on deposit - 463
Receivables 828 809
Investments in associated entities 10,643 3,667
Other investments 641 793
Inventories 2,703 2,723
Property, plant and equipment 3,993 4,180
Publishing rights, titles and television licenses 22,017 21,719
Goodwill 235 250
Other 690 495
--------- ---------
Total Non-Current Assets 41,750 35,099
--------- ---------
Total Assets $ 51,863 $ 44,963
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Interest bearing liabilities $ 429 $ 22
Payables 5,659 5,507
Tax liabilities 451 474
Provisions 326 171
--------- ---------
Total Current Liabilities 6,865 6,174
--------- ---------
Non-Current Liabilities
Interest bearing liabilities 8,476 8,227
Payables 2,297 2,353
Tax liabilities 718 442
Provisions 771 685
--------- ---------
Total Non-Current Liabilities Excluding
Exchangeable Securities 12,262 11,707
--------- ---------
Exchangeable securities 1,421 1,383
--------- ---------
Total Liabilities 20,548 19,264
Shareholders' Equity
Contributed equity 21,614 17,262
Reserves 2,624 1,685
Retained profits 3,244 2,506
--------- ---------
Shareholders' equity attributable to members of
the parent entity 27,482 21,453
Outside equity interests in controlled entities 3,833 4,246
--------- ---------
Total Shareholders' Equity 31,315 25,699
--------- ---------
Total Liabilities and Shareholders' Equity $ 51,863 $ 44,963
========= =========
STATEMENT OF CASH FLOWS 9 Months Ended
March 31,
2004 2003
--------- ---------
Operating Activity US $ Millions
Net profit attributable to members of the parent
entity $ 1,248 $ 676
Adjustment for non-cash and non-operating
activities:
Equity earnings, net (131) 179
Outside equity interest 166 188
Depreciation and amortization 459 313
Other items, net 8 104
Change in assets and liabilities:
Receivables (376) (436)
Inventories (418) (101)
Payables 660 298
Other liabilities 383 311
--------- ---------
Cash provided by operating activity 1,999 1,532
Investing and other activity
Property, plant and equipment (213) (253)
Acquisitions, net of cash acquired (151) (432)
Investments and acquisitions of interests in
associated entities (3,213) (454)
Other investments (64) (65)
Repayment of loans by associate - 96
Proceeds from sale of non-current assets 549 100
--------- ---------
Cash used in investing activity (3,092) (1,008)
Financing activity
Issuance of debt 440 2,075
Repayment of debt and exchangeable securities (616) (2,494)
Decrease in cash on deposit 163 -
Issuance of shares 545 1,228
Dividends paid (106) (91)
Leasing and other finance costs - (2)
--------- ---------
Cash provided by financing activity 426 716
--------- ---------
Net (decrease) increase in cash (667) 1,240
Opening cash balance 4,477 3,574
Exchange movement on opening balance 59 47
--------- ---------
Closing cash balance $ 3,869 $ 4,861
========= =========
Note 1 - SEGMENT DATA 3 Months Ended 9 Months Ended
March 31, March 31,
BY GEOGRAPHIC AREAS 2004 2003 2004 2003
--------- --------- --------- ---------
US $ Millions US $ Millions
Revenues
United States $ 3,436 $ 3,370 $ 10,684 $ 9,929
Europe 1,292 657 3,375 1,888
Australasia 473 361 1,379 1,065
--------- --------- --------- ---------
$ 5,201 $ 4,388 $ 15,438 $ 12,882
========= ========= ========= =========
Operating Income
United States $ 670 $ 538 $ 1,995 $ 1,590
Europe 94 102 87 241
Australasia 74 45 235 131
--------- --------- --------- ---------
$ 838 $ 685 $ 2,317 $ 1,962
========= ========= ========= =========
BY INDUSTRY SEGMENT
Revenues
Filmed Entertainment $ 1,184 $ 1,166 $ 3,809 $ 3,383
Television 1,182 1,126 3,748 3,593
Cable Network Programming 612 545 1,836 1,601
Direct Broadcast Satellite
Television* 492 - 1,177 -
Magazines and Inserts 278 264 729 673
Newspapers 914 701 2,511 1,980
Book Publishing 321 247 1,009 920
Other 218 339 619 732
--------- --------- --------- ---------
$ 5,201 $ 4,388 $ 15,438 $ 12,882
========= ========= ========= =========
Operating Income
Filmed Entertainment $ 214 $ 201 $ 795 $ 556
Television 259 207 606 560
Cable Network Programming 143 95 463 334
Direct Broadcast Satellite
Television* (25) - (248) -
Magazines and Inserts 84 76 205 186
Newspapers 176 115 448 274
Book Publishing 36 23 152 129
Other (49) (32) (104) (77)
--------- --------- --------- ---------
$ 838 $ 685 $ 2,317 $ 1,962
========= ========= ========= =========
* New segment reflecting the results of SKY Italia, consolidated as of
May 1, 2003.
Note 2 - SUPPLEMENTAL FINANCIAL DATA
The Company considers net profit before other items to be an
important indicator of the Company's operating performance on a
consolidated basis. Net profit before other items, defined as net
profit attributable to members of the parent entity before other items
related to the Company and associated entities, net of applicable
income tax expenses and outside equity interests, eliminates the
effect of transactions that are considered significant by reason of
their size, nature or effect on the Company's financial performance
for the year. Net profit before other items should be considered in
addition to, not as a substitute for the Company's operating income,
net profit attributable to members of the parent entity, cash flows
and other measures of financial performance prepared in accordance
with generally accepted accounting principles in Australia. Net profit
before other items does not reflect cash available to fund
requirements, and the items excluded from net profit before other
items, such as other revenues and expenses, are significant components
in assessing the Company's financial performance.
The following table reconciles certain components of net profit
attributable to members of the parent entity as presented on page 3 of
this release to the presentation required under Australian GAAP as
required by Australian Accounting Standard AASB 1018 "Statement of
Financial Performance" on page 12 of this release.
3 Months Ended 9 Months Ended
March 31, March 31,
2004 2003 2004 2003
--------- --------- --------- ---------
US $ Millions US $ Millions
Total other items (page 3) $ 5 $ (23) $ (8) $ (104)
Reclassification of other
items - associated entities (1) 14 16 81
Reclassification of income tax
and net profit attributable
to outside equity interest (9) (22) (17) (34)
--------- --------- --------- ---------
Other items before income tax,
net (page 12) $ (5) $ (31) $ (9) $ (57)
========= ========= ========= =========
Associated entities before
other items (page 3) $ 56 $ (26) $ 162 $ (161)
Reclassification of other
items - associated entities 1 (14) (16) (81)
--------- --------- --------- ---------
Net profit (loss) from
associated entities (page 12) $ 57 $ (40) $ 146 $ (242)
========= ========= ========= =========
Income tax expense (page 3) $ (243) $ (169) $ (659) $ (445)
Reclassification of income tax
expense on other items - 22 1 34
--------- --------- --------- ---------
Net income tax expense
(page $ (243) $ (147) $ (658) $ (411)
========= ========= ========= =========
Outside equity interest
(page 3) $ (54) $ (68) $ (166) $ (188)
Reclassification of outside
equity interest on other
items, net 9 - 16 -
--------- --------- --------- ---------
Net profit attributable to
outside equity interest
(page 12) $ (45) $ (68) $ (150) $ (188)
========= ========= ========= =========
Net profit before other items
(page 3) $ 460 $ 298 $ 1,256 $ 780
Other items before income tax,
net (5) (31) (9) (57)
Reclassification of income tax
and net profit attributable
to outside equity interest 9 22 17 34
Reclassification of other
items - associated entities 1 (14) (16) (81)
--------- --------- --------- ---------
Net profit attributable to
members of the parent entity
(page 12) $ 465 $ 275 $ 1,248 $ 676
========= ========= ========= =========
Earnings per ADR on net profit
before other items, net
(page 3) $ 0.31 $ 0.23 $ 0.91 $ 0.59
Earnings per ADR on other
items before income tax, net - (0.02) (0.01) (0.04)
Earnings per ADR on
reclassification of income
tax and net profit
attributable to outside
equity interest 0.01 0.01 0.01 0.02
Earnings per ADR on
reclassification of other
items - associated entities - (0.01) (0.01) (0.06)
--------- --------- --------- ---------
Diluted earnings per ADR on
net profit attributable to
members of the parent entity
(page 12) $ 0.32 $ 0.21 $ 0.90 $ 0.51
========= ========= ========= =========
CONTACT: The News Corporation Limited
Investor Relations:
Reed Nolte, 212-852-7092
Press Inquiries:
Andrew Butcher, 212-852-7070