FISCAL 2019 SECOND QUARTER KEY
FINANCIAL HIGHLIGHTS
- Revenues of $2.63 billion, a 21%
increase compared to $2.18 billion in the prior year, reflecting
the consolidation of Foxtel and continued strength at the Book
Publishing and Digital Real Estate Services segments
- Net income was $119 million compared
to a net loss of ($66) million, which included a $174 million
negative impact related to the U.S. Tax Cuts and Jobs Act in the
prior year
- Total Segment EBITDA was $370
million compared to $328 million in the prior year
- Reported EPS were $0.16 compared to
($0.14) in the prior year – Adjusted EPS were $0.18 compared to
$0.24 in the prior year
- Continued revenue improvement at Dow
Jones driven by record digital advertising revenues and
acceleration in digital paid subscriber growth
- Digital Real Estate Services segment
reported strong revenue growth supported by continued product
innovation, higher yields and expansion into new revenue
streams
- HarperCollins achieved record
revenue and Segment EBITDA in the quarter
- Launched Kayo Sports, a sports-only
streaming service, in Australia
News Corporation (“News Corp” or the “Company”)
(Nasdaq:NWS)(Nasdaq:NWSA)(ASX:NWS)(ASX:NWSLV) today reported
financial results for the three months ended December 31, 2018.
Commenting on the results, Chief Executive Robert Thomson
said:
“News Corp has reported increased profitability and revenue
growth during the first half of Fiscal 2019, highlighting the power
of premium content and authenticated audiences in a fact-challenged
world that craves credibility.
For the second quarter, the Company saw 21% revenue growth and a
13% rise in profitability, reflecting the consolidation of Foxtel
and a healthy expansion of revenues in the Book Publishing and
Digital Real Estate Services segments.
At News and Information Services, we saw a continuation of
positive trends in paid digital subscriptions, including
accelerating gains at The Wall Street Journal, and stronger digital
advertising revenues in both the U.S. and Australia.
Although our teams have been diligent in pursuing revenue
opportunities, the digital platforms, which arbitrage algorithmic
ambiguity, remain dysfunctional. It is clear that there has been a
regulatory awakening and the time has come for a regulatory
reckoning.
At our Digital Real Estate Services segment, despite
sluggishness in the U.S. property market, Move delivered another
quarter of double-digit revenue growth, driven by product
innovation at realtor.com® and the acquisition of Opcity, a
strategically important asset that will provide higher quality,
value-added leads for brokers.
Within our Subscription Video Services segment, this quarter we
launched Kayo Sports, a sports-only OTT product, to positive
reviews, and we look forward, with confidence, to the peak selling
season for the most popular winter sports in Australia.
Finally, HarperCollins had another outstanding quarter,
benefiting from best-in-class content and the burgeoning of digital
audio.”
SECOND QUARTER RESULTS
The Company reported fiscal 2019 second quarter total revenues
of $2.63 billion, a 21% increase compared to $2.18 billion in the
prior year period. The growth reflects the impact from the
consolidation of Foxtel’s results following the combination of
Foxtel and FOX SPORTS Australia (the “Transaction”) into a new
company (“new Foxtel”) and continued strong performances at the
Book Publishing and Digital Real Estate Services segments,
partially offset by lower print advertising revenues at the News
and Information Services segment. The results also include a $67
million negative impact from foreign currency fluctuations and $20
million of lower revenues as a result of the adoption of the new
revenue recognition standard. Adjusted Revenues (which exclude the
foreign currency impact and acquisitions and divestitures as
defined in Note 1) increased 3%.
Net income for the quarter was $119 million compared to a net
loss of ($66) million in the prior year, reflecting the absence of
the $174 million negative impact of the U.S. Tax Cuts and Jobs Act
recognized in the second quarter of fiscal 2018, higher Total
Segment EBITDA, as discussed below, and higher Other, net,
partially offset by higher depreciation and amortization expense
and interest expense as a result of the Transaction.
The Company reported second quarter Total Segment EBITDA of $370
million, a 13% increase compared to $328 million in the prior year,
also reflecting the Transaction. Adjusted Total Segment EBITDA (as
defined in Note 1) increased 2% as continued strength in the Book
Publishing and Digital Real Estate Services segments was partially
offset by lower contribution from the News and Information Services
segment.
Net income per share available to News Corporation stockholders
was $0.16 as compared to a net loss per share of ($0.14) in the
prior year.
Adjusted EPS (as defined in Note 3) were $0.18 compared to $0.24
in the prior year.
SEGMENT REVIEW
For the three months ended
For the six months ended December 31, December 31, 2018
2017 % Change 2018 2017 % Change (in
millions) Better/
(Worse)
(in millions) Better/
(Worse)
Revenues: News and Information Services $ 1,257 $
1,298 (3) % $ 2,505 $ 2,539 (1) % Subscription Video Services 562
120 ** 1,127 265 ** Book Publishing 496 469 6 % 914 870 5 % Digital
Real Estate Services 311 292 7 % 604 563 7 % Other 1
1 - % 1 1 - %
Total Revenues $ 2,627 $ 2,180
21 % $ 5,151 $ 4,238 22 %
Segment EBITDA: News and
Information Services $ 120 $ 141 (15) % $ 236 $ 215 10 %
Subscription Video Services 84 33 ** 197 60 ** Book Publishing 88
78 13 % 156 126 24 % Digital Real Estate Services 121 119 2 % 226
214 6 % Other(a) (43) (43) - % (87)
(39) **
Total Segment EBITDA $ 370 $ 328 13 % $ 728 $
576 26 % ** - Not meaningful (a) Other Segment EBITDA
for the six months ended December 31, 2017 included a $46 million
benefit from the reversal of certain previously accrued net
liabilities for the U.K. Newspaper Matters as a result of an
agreement reached with the relevant tax authority related to
certain employment taxes.
News and Information Services
Revenues in the quarter decreased $41 million, or 3%, as
compared to the prior year, reflecting a $34 million, or 2%,
negative impact from foreign currency fluctuations. Within the
segment, Dow Jones revenues grew 4%, while revenues at News UK
declined 10%, which includes the negative impact from the absence
of Sun Bets revenues discussed below. News America Marketing and
News Corp Australia revenues declined 7% and 5%, respectively.
Adjusted Revenues for the segment decreased 1% compared to the
prior year.
Advertising revenues declined 5% compared to the prior year, of
which $18 million, or 2%, was related to the negative impact from
foreign currency fluctuations. The remainder of the decline was
driven by weakness in the print advertising market and lower
revenues at News America Marketing, partially offset by an increase
in digital advertising revenues. Advertising revenues at Dow Jones
were flat in the quarter, as record digital advertising revenues
offset the weakness in print advertising.
Circulation and subscription revenues increased 1%, including a
$12 million, or 2%, negative impact from foreign currency
fluctuations. The growth was primarily due to a healthy
contribution from Dow Jones, which saw a 7% increase in its
circulation revenues, reflecting 23% digital paid subscriber growth
at The Wall Street Journal, and growth in its Risk & Compliance
products. Cover and subscription price increases also contributed
to the revenue improvement. These increases were partially offset
by lower newsstand volume at News UK.
Other revenues declined 10%, of which $4 million, or 4%, was
related to the negative impact from foreign currency fluctuations.
The decline was primarily due to lower brand partnership revenues
and the absence of revenues from Sun Bets as a result of News UK’s
exit from the partnership in the first quarter of fiscal 2019.
Segment EBITDA decreased $21 million in the quarter, or 15%, as
compared to the prior year, primarily due to lower contribution
from News UK, mainly driven by lower revenues and higher newsprint
and digital reinvestment costs. The decline was partially offset by
higher contribution from News Corp Australia and Dow Jones.
Adjusted Segment EBITDA (as defined in Note 1) decreased 13%.
Digital revenues represented 32% of News and Information
Services segment revenues in the quarter, compared to 29% in the
prior year. For the quarter, digital revenues for Dow Jones and the
newspaper mastheads represented 35% of their combined revenues, and
at Dow Jones, digital accounted for 55% of its circulation
revenues. Digital subscribers and users across key properties
within the News and Information Services segment are summarized
below:
- The Wall Street Journal average daily
digital subscribers in the three months ended December 31, 2018
were 1,709,000, compared to 1,389,000 in the prior year (Source:
Internal data)
- Closing digital subscribers at News
Corp Australia’s mastheads as of December 31, 2018 were 460,300,
compared to 389,600 in the prior year (Source: Internal data)
- The Times and Sunday Times closing
digital subscribers as of December 31, 2018 were 269,000, compared
to 220,000 in the prior year (Source: Internal data)
- The Sun’s digital offering reached
approximately 80 million global monthly unique users in December
2018, compared to 86 million in the prior year, based on ABCe
(Source: Omniture)
Subscription Video Services
Revenues and Segment EBITDA in the quarter increased $442
million and $51 million, respectively, compared to the prior year,
primarily due to the inclusion of Foxtel. Adjusted Revenues and
Adjusted Segment EBITDA, which exclude the impact of foreign
currency fluctuations, acquisitions and divestitures, increased 8%
and declined 3%, respectively.
On a pro forma basis, reflecting the Transaction, segment
revenues in the quarter decreased $69 million, or 11%, compared
with the prior year, of which $39 million, or 6%, was due to the
negative impact from foreign currency fluctuations. The remainder
of the revenue decline was driven by the impact from lower
broadcast subscribers and the changes in the subscriber package
mix, partially offset by higher revenues from Foxtel Now.
As of December 31, 2018, new Foxtel’s total closing subscribers
were approximately 2.9 million, which was higher than the prior
year, primarily due to Foxtel Now subscriber growth, the inclusion
of commercial subscribers of FOX SPORTS Australia beginning in the
first quarter of fiscal 2019 and the launch of Kayo Sports,
partially offset by lower broadcast subscribers. 2.5 million of the
total closing subscribers were broadcast and commercial
subscribers, and the remainder consisted of Foxtel Now and Kayo
Sports subscribers. As of February 5, 2019, there were 115,000 Kayo
Sports subscribers, of which approximately 100,000 were paying
subscribers. Broadcast subscriber churn in the quarter was 15.6%
compared to 14.5% in the prior year, reflecting the impact of the
price increase implemented in October. Broadcast ARPU for the
quarter declined 3% compared to the prior year to A$78 (US$56),
reflecting a 2% negative impact related to the adoption of the new
revenue recognition standard.
Pro forma Segment EBITDA in the quarter decreased $71 million,
or 46%, compared with the prior year, primarily due to the lower
revenues discussed above, planned increases in programming costs
related to Cricket Australia and National Rugby League rights,
higher production costs related to the new Fox Cricket channel and
higher marketing costs primarily related to the launch of Kayo
Sports, partially offset by the $33 million positive impact on
expenses from foreign currency fluctuations.
Book Publishing
Revenues in the quarter increased $27 million, or 6%, compared
to the prior year, primarily due to higher sales in general books
and Christian publishing, including the success of new titles such
as Homebody by Joanna Gaines and The Next Person You Meet in Heaven
by Mitch Albom, as well as the continued success of Girl Wash Your
Face by Rachel Hollis. Revenue growth was partially offset by $18
million of lower revenues as a result of the adoption of the new
revenue recognition standard. Digital sales increased 12% compared
to the prior year and represented 17% of Consumer revenues for the
quarter, driven by the growth in downloadable audiobook sales.
Segment EBITDA for the quarter increased $10 million, or 13%, from
the prior year, primarily due to the higher revenues noted
above.
Digital Real Estate Services
Revenues in the quarter increased $19 million, or 7%, compared
to the prior year, of which foreign currency fluctuations had a
negative impact on growth of $13 million, or 4%. The growth was
primarily due to the continued growth at REA Group and Move.
Segment EBITDA in the quarter increased $2 million, or 2%, compared
to the prior year, primarily due to the higher revenues, partially
offset by higher costs associated with the acquisition of Opcity
and the $8 million negative impact from foreign currency
fluctuations. Adjusted Revenues and Adjusted Segment EBITDA
increased 10% and 12%, respectively.
In the quarter, revenues at REA Group increased 6% to $189
million from $178 million in the prior year, primarily due to an
increase in Australian residential depth revenue, driven by
favorable product mix and pricing increases. The growth was
partially offset by foreign currency fluctuations, as mentioned
above.
Move’s revenues in the quarter increased 11% to $122 million
from $110 million in the prior year, primarily due to 23% growth in
its real estate revenues, partially offset by planned declines in
advertising revenues. The increase in real estate revenues, which
represent 78% of total Move revenues, was driven by the continued
growth in its ConnectionsSM Plus product revenues, which benefited
from higher lead volume and improvement in yield optimization, as
well as the acquisition of Opcity. Based on Move’s internal data,
average monthly unique users of realtor.com®’s web and mobile sites
for the fiscal second quarter grew 6% year-over-year to 53 million,
with mobile representing more than half of all unique users.
REVIEW OF EQUITY LOSSES OF AFFILIATES’ RESULTS
For the three months ended For
the six months ended December 31, December 31, 2018 2017
2018 2017 (in millions) (in millions) Foxtel(a) $ - $
1 $ - $ (4) Other equity affiliates, net (6) (19)
(9) (24) Total equity losses of affiliates $ (6) $
(18) $ (9) $ (28) (a) The Company amortized $15 million and
$32 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 six months
ended December 31, 2017, respectively. Such amortization is
reflected in Equity losses of affiliates in the Statement of
Operations.
Equity losses of affiliates for the second quarter was ($6)
million compared to ($18) million in the prior year. The
improvement was primarily due to the absence of $13 million in
non-cash write-downs of certain equity method investments’ carrying
values to fair value, which was recognized in the second quarter of
fiscal 2018.
CASH FLOW
The following table presents a reconciliation of net cash
provided by operating activities to free cash flow available to
News Corporation:
For the six months ended
December 31,
2018 2017 (in millions) Net cash provided by
operating activities $ 358 $ 204 Less: Capital expenditures
(264) (128) 94 76 Less: REA Group free cash flow (105) (93)
Plus: Cash dividends received from REA Group 37 33
Free cash flow available to News Corporation $ 26 $ 16
Net cash provided by operating activities improved $154 million
for the six months ended December 31, 2018 as compared to the prior
year period, primarily due to higher Total Segment EBITDA as noted
above, and lower cash tax payments of $24 million, partially offset
by $35 million in higher cash paid for interest.
Free cash flow available to News Corporation in the six months
ended December 31, 2018 was $26 million compared to $16 million in
the prior year period. The improvement was primarily due to higher
cash provided by operating activities, partially offset by higher
capital expenditures, of which $139 million was related to new
Foxtel.
Free cash flow available to News Corporation is a non-GAAP
financial measure defined as net cash provided by operating
activities, less capital expenditures (“free cash flow”), less 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 that is available to be used to
strengthen the Company’s balance sheet and for strategic
opportunities including, among others, investing in the Company’s
business, strategic acquisitions, dividend payouts and repurchasing
stock. The Company believes excluding REA Group’s free cash flow
and including dividends received from REA Group provides users of
its consolidated financial statements with a measure of the amount
of cash flow that is readily available to the Company, as REA Group
is a separately listed public company in Australia and must declare
a dividend in order for the Company to have access to its share of
REA Group’s cash balance. The Company believes free cash flow
available to News Corporation provides a more conservative view of
the Company’s free cash flow because this presentation includes
only that amount of cash the Company actually receives from REA
Group, which has generally been lower than the Company’s unadjusted
free cash flow. A limitation of 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.
OTHER ITEMS
Dividends
The Company today declared a semi-annual cash dividend of $0.10
per share for Class A Common Stock and Class B Common Stock. This
dividend is payable on April 17, 2019 to stockholders of record as
of March 13, 2019.
COMPARISON OF NON-GAAP TO U.S. GAAP INFORMATION
Adjusted Revenues, Total Segment EBITDA, Adjusted Total Segment
EBITDA, Adjusted 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. The Company believes these
measures are important tools for investors and analysts to use in
assessing the Company’s underlying business performance and to
provide for more meaningful comparisons of the Company’s operating
performance between periods. These measures also allow investors
and analysts to view the Company’s business from the same
perspective as Company management. These non-GAAP measures may be
different than similar measures used by other companies and should
be considered in addition to, not as a substitute for, measures of
financial performance calculated in accordance with GAAP.
Reconciliations for the differences between non-GAAP measures used
in this earnings release and comparable financial measures
calculated in accordance with U.S. GAAP are included in Notes 1, 2
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
5:00pm EST on February 7, 2019. 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 Corp (Nasdaq: NWS, NWSA; ASX: NWS, NWSLV) is a global,
diversified media and information services company focused on
creating and distributing authoritative and engaging content. The
company comprises businesses across a range of media, including:
news and information services, subscription video services in
Australia, book publishing and digital real estate services.
Headquartered in New York, News Corp operates primarily in the
United States, Australia, and the United Kingdom, and its content
is distributed and consumed worldwide. More information is
available at: www.newscorp.com.
NEWS CORPORATION
CONSOLIDATED STATEMENTS OF
OPERATIONS
(Unaudited; in millions, except per
share amounts)
For the three months
ended For the six months ended December 31, December 31, 2018
2017 2018 2017 Revenues: Circulation and
subscription $ 1,029 $ 637 $ 2,063 $ 1,288 Advertising 718 717
1,382 1,399 Consumer 478 453 878 839 Real estate 248 222 475 425
Other 154 151 353 287 Total
Revenues 2,627 2,180 5,151 4,238 Operating expenses (1,484)
(1,139) (2,824) (2,288) Selling, general and administrative (773)
(713) (1,599) (1,374) Depreciation and amortization (163) (100)
(326) (197) Impairment and restructuring charges (19) (12) (37)
(27) Equity losses of affiliates (6) (18) (9) (28) Interest
(expense) income, net (15) 1 (31) 7 Other, net 7 (30)
27 (21) Income before income tax expense 174 169 352
310 Income tax expense (55) (235) (105)
(289) Net income (loss) 119 (66) 247 21 Less: Net income
attributable to noncontrolling interests (24) (17)
(51) (36) Net income (loss) attributable to News
Corporation stockholders $ 95 $ (83) $ 196 $ (15) Less: Adjustments
to Net income (loss) attributable to News Corporation stockholders
– Redeemable preferred stock dividends - (1) -
(1) Net income (loss) available to News Corporation
stockholders $ 95 $ (84) $ 196 $ (16) Weighted average
shares outstanding: Basic 585 583 584 583 Diluted 587 583 586 583
Net income (loss) available to News Corporation stockholders
per share - basic $ 0.16 $ (0.14) $ 0.34 $ (0.03) Net income (loss)
available to News Corporation stockholders per share - diluted $
0.16 $ (0.14) $ 0.33 $ (0.03)
NEWS CORPORATION
CONSOLIDATED BALANCE SHEETS
(in millions)
As of December 31, 2018
As of June 30, 2018 (unaudited) (audited)
ASSETS Current
assets: Cash and cash equivalents $ 1,618 $ 2,034 Receivables, net
1,853 1,612 Inventory, net 400 376 Other current assets 558
372 Total current assets 4,429 4,394
Non-current assets: Investments 345 393 Property, plant and
equipment, net 2,517 2,560 Intangible assets, net 2,571 2,671
Goodwill 5,225 5,218 Deferred income tax assets 228 279 Other
non-current assets 912 831 Total assets $ 16,227 $
16,346
LIABILITIES AND EQUITY Current liabilities:
Accounts payable $ 625 $ 605 Accrued expenses 1,243 1,340 Deferred
revenue 430 516 Current borrowings 744 462 Other current
liabilities 670 372 Total current liabilities
3,712 3,295 Non-current liabilities: Borrowings 936
1,490 Retirement benefit obligations 237 245 Deferred income tax
liabilities 384 389 Other non-current liabilities 524 430
Commitments and contingencies Redeemable preferred stock -
20 Equity: Class A common stock 4 4 Class B common stock 2 2
Additional paid-in capital 12,271 12,322 Accumulated deficit
(1,937) (2,163) Accumulated other comprehensive loss (1,076)
(874) Total News Corporation stockholders' equity 9,264
9,291 Noncontrolling interests 1,170 1,186 Total
equity 10,434 10,477 Total liabilities and equity $
16,227 $ 16,346
NEWS CORPORATION
CONSOLIDATED STATEMENTS OF CASH
FLOWS
(Unaudited; in millions)
For the six months ended
December 31, 2018 2017
Operating activities: Net
income $ 247 $ 21 Adjustments to reconcile net income to
cash provided by operating activities: Depreciation and
amortization 326 197 Equity losses of affiliates 9 28 Cash
distributions received from affiliates 27 1 Other, net (27) 21
Deferred income taxes and taxes payable 40 200 Change in operating
assets and liabilities, net of acquisitions: Receivables and other
assets (140) (73) Inventories, net (43) (8) Accounts payable and
other liabilities (81) (183) Net cash provided by
operating activities 358 204
Investing
activities: Capital expenditures (264) (128) Acquisitions, net
of cash acquired (185) (53) Investments in equity affiliates and
other (13) (33) Proceeds from property, plant and equipment and
other asset dispositions 37 15 Other, net 16 23 Net
cash used in investing activities (409) (176)
Financing activities: Borrowings 263 - Repayment of
borrowings (470) (93) Dividends paid (81) (80) Other, net
(45) (29) Net cash used in financing activities (333)
(202) Net decrease in cash and cash equivalents (384)
(174) Cash and cash equivalents, beginning of period 2,034 2,016
Exchange movement on opening cash balance (32) 14
Cash and cash equivalents, end of period $ 1,618 $ 1,856
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, 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”) and foreign currency
fluctuations (“Adjusted Revenues,” “Adjusted Total Segment EBITDA”
and “Adjusted Segment EBITDA,” respectively) to evaluate the
performance of the Company’s core business operations exclusive of
certain items that impact the comparability of results from period
to period such as the unpredictability and volatility of currency
fluctuations. The Company calculates the impact of foreign currency
fluctuations for businesses reporting in currencies other than the
U.S. dollar by multiplying the results for each quarter in the
current period by the difference between the average exchange rate
for that quarter and the average exchange rate in effect during the
corresponding quarter of the prior year and totaling the impact for
all quarters in the current period.
The calculation of Adjusted Revenues, Adjusted Total Segment
EBITDA and Adjusted Segment EBITDA may not be comparable to
similarly titled measures reported by other companies, since
companies and investors may differ as to what type of events
warrant adjustment. Adjusted Revenues, Adjusted Total Segment
EBITDA and Adjusted Segment EBITDA are not measures of performance
under generally accepted accounting principles and should not be
construed as substitutes for amounts determined under GAAP as
measures of performance. However, management uses these measures in
comparing the Company’s historical performance and believes that
they provide meaningful and comparable information to investors to
assist in their analysis of our performance relative to prior
periods and our competitors.
The following tables reconcile reported revenues and reported
Total Segment EBITDA to Adjusted Revenues and Adjusted Total
Segment EBITDA for the three and six months ended December 31, 2018
and 2017.
Revenues Total Segment EBITDA
For the three months ended For the three months ended December 31,
December 31, 2018 2017 Difference 2018 2017
Difference (in millions) (in millions)
As
reported $ 2,627 $ 2,180 $ 447 $ 370 $ 328 $ 42 Impact
of acquisitions (458) - (458) (49) - (49) Impact of
divestitures - (7) 7 - 1 (1) Impact of foreign currency
fluctuations 67 - 67 13 - 13 Net impact of U.K. Newspaper
Matters - - - 4 3 1
As adjusted $
2,236 $ 2,173 $ 63 $ 338 $ 332 $ 6 Revenues Total
Segment EBITDA For the six months ended For the six months ended
December 31, December 31, 2018 2017 Difference 2018 2017 Difference
(in millions) (in millions)
As reported $ 5,151 $
4,238 $ 913 $ 728 $ 576 $ 152 Impact of acquisitions (891) -
(891) (137) - (137) Impact of divestitures (3) (15) 12 - 2
(2) Impact of foreign currency fluctuations 116 - 116 24 -
24 Net impact of U.K. Newspaper Matters - - - 6 (40) 46
As adjusted $ 4,373 $ 4,223 $ 150 $ 621
$ 538 $ 83
Adjusted Revenues and Adjusted Segment EBITDA by segment for the
three and six months ended December 31, 2018 and 2017 are as
follows:
For the three months ended
December 31, 2018 2017 % Change (in millions)
Better/(Worse)
Adjusted Revenues: News and
Information Services $ 1,286 $ 1,296 (1) % Subscription Video
Services 129 120 8 % Book Publishing 503 469 7 % Digital Real
Estate Services 317 287 10 % Other 1 1 - %
Adjusted Total Revenues $ 2,236 $ 2,173 3 %
Adjusted Segment EBITDA: News and Information Services $ 123
$ 141 (13) % Subscription Video Services 32 33 (3) % Book
Publishing 88 78 13 % Digital Real Estate Services 134 120 12 %
Other (39) (40) 3 %
Adjusted Total Segment
EBITDA $ 338 $ 332 2 %
For the six months ended December 31, 2018 2017
% Change (in millions) Better/(Worse)
Adjusted
Revenues: News and Information Services $ 2,561 $ 2,535 1 %
Subscription Video Services 273 265 3 % Book Publishing 924 870 6 %
Digital Real Estate Services 614 552 11 % Other 1 1 -
%
Adjusted Total Revenues $ 4,373 $ 4,223 4 %
Adjusted Segment EBITDA: News and Information Services $ 241
$ 215 12 % Subscription Video Services 60 60 - % Book Publishing
156 126 24 % Digital Real Estate Services 245 216 13 % Other
(81) (79) (3) %
Adjusted Total Segment EBITDA $ 621 $
538 15 %
The following tables reconcile reported revenues and Segment
EBITDA by segment to Adjusted Revenues and Adjusted Segment EBITDA
by segment for the three months ended December 31, 2018 and
2017.
For the three months ended December 31,
2018 As Reported
Impact ofAcquisitions
Impact ofDivestitures
Impact ofForeignCurrencyFluctuations
Net Impactof U.K.NewspaperMatters
As Adjusted (in millions)
Revenues: News and
Information Services $ 1,257 $ (5) $ - $ 34 $ - $ 1,286
Subscription Video Services 562 (446) - 13 - 129 Book Publishing
496 - - 7 - 503 Digital Real Estate Services 311 (7) - 13 - 317
Other 1 - - - - 1
Total Revenues $ 2,627 $ (458) $ - $ 67 $ - $ 2,236
Segment EBITDA: News and Information Services $ 120 $ - $ -
$ 3 $ - $ 123 Subscription Video Services 84 (54) - 2 - 32 Book
Publishing 88 - - - - 88 Digital Real Estate Services 121 5 - 8 -
134 Other (43) - - - 4
(39)
Total Segment EBITDA $ 370 $ (49) $ - $ 13 $ 4 $ 338
For the three months ended
December 31, 2017 As Reported
Impact ofAcquisitions
Impact ofDivestitures
Impact ofForeignCurrencyFluctuations
Net Impactof U.K.NewspaperMatters
As Adjusted (in millions)
Revenues: News and
Information Services $ 1,298 $ - $ (2) $ - $ - $ 1,296 Subscription
Video Services 120 - - - - 120 Book Publishing 469 - - - - 469
Digital Real Estate Services 292 - (5) - - 287 Other 1
- - - - 1
Total Revenues
$ 2,180 $ - $ (7) $ - $ - $ 2,173
Segment EBITDA:
News and Information Services $ 141 $ - $ - $ - $ - $ 141
Subscription Video Services 33 - - - - 33 Book Publishing 78 - - -
- 78 Digital Real Estate Services 119 - 1 - - 120 Other (43)
- - - 3 (40)
Total Segment
EBITDA $ 328 $ - $ 1 $ - $ 3 $ 332
The following tables reconcile reported revenues and Segment
EBITDA by segment to Adjusted Revenues and Adjusted Segment EBITDA
by segment for the six months ended December 31, 2018 and 2017.
For the six months ended December 31,
2018 As Reported
Impact ofAcquisitions
Impact ofDivestitures
Impact ofForeignCurrencyFluctuations
Net Impactof U.K.NewspaperMatters
As Adjusted (in millions)
Revenues: News and
Information Services $ 2,505 $ (5) $ (1) $ 62 $ - $ 2,561
Subscription Video Services 1,127 (871) - 17 - 273 Book Publishing
914 - - 10 - 924 Digital Real Estate Services 604 (15) (2) 27 - 614
Other 1 - - - - 1
Total Revenues $ 5,151 $ (891) $ (3) $ 116 $ - $ 4,373
Segment EBITDA: News and Information Services $ 236 $
- $ - $ 5 $ - $ 241 Subscription Video Services 197 (140) - 3 - 60
Book Publishing 156 - - - - 156 Digital Real Estate Services 226 3
- 16 - 245 Other (87) - - - 6
(81)
Total Segment EBITDA $ 728 $ (137) $ - $ 24 $ 6
$ 621 For the six months ended
December 31, 2017 As Reported
Impact ofAcquisitions
Impact ofDivestitures
Impact ofForeignCurrencyFluctuations
Net Impactof U.K.NewspaperMatters
As Adjusted (in millions)
Revenues: News and
Information Services $ 2,539 $ - $ (4) $ - $ - $ 2,535 Subscription
Video Services 265 - - - - 265 Book Publishing 870 - - - - 870
Digital Real Estate Services 563 - (11) - - 552 Other 1
- - - - 1
Total Revenues
$ 4,238 $ - $ (15) $ - $ - $ 4,223
Segment EBITDA:
News and Information Services $ 215 $ - $ - $ - $ - $ 215
Subscription Video Services 60 - - - - 60 Book Publishing 126 - - -
- 126 Digital Real Estate Services 214 - 2 - - 216 Other
(39) - - - (40) (79)
Total
Segment EBITDA $ 576 $ - $ 2 $ - $ (40) $ 538
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 losses of affiliates, interest
(expense) income, 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 the operating performance of each of the Company’s
business segments and its enterprise value against historical data
and competitors’ data, although historical results may not be
indicative of future results (as operating performance is highly
contingent on many factors, including customer tastes and
preferences).
Total Segment EBITDA is a non-GAAP measure and should be
considered in addition to, not as a substitute for, net income
(loss), cash flow and other measures of financial performance
reported in accordance with GAAP. In addition, this measure does
not reflect cash available to fund requirements and excludes items,
such as depreciation and amortization and impairment and
restructuring charges, which are significant components in
assessing the Company’s financial performance. The Company believes
that the presentation of Total Segment EBITDA provides useful
information regarding the Company’s operations and other factors
that affect the Company’s reported results. Specifically, the
Company believes that by excluding certain one-time or non-cash
items such as impairment and restructuring charges and depreciation
and amortization, as well as potential distortions between periods
caused by factors such as financing and capital structures and
changes in tax positions or regimes, the Company provides users of
its consolidated financial statements with insight into both its
core operations as well as the factors that affect reported results
between periods but which the Company believes are not
representative of its core business. As a result, users of the
Company’s consolidated financial statements are better able to
evaluate changes in the core operating results of the Company
across different periods. The following table reconciles net income
(loss) to Total Segment EBITDA.
For the three months ended December 31, 2018
2017 Change % Change (in millions) Net
income (loss) $ 119 $ (66) $ 185 ** Add: Income tax expense 55 235
(180) (77) % Other, net (7) 30 (37) ** Interest expense (income),
net 15 (1) 16 ** Equity losses of affiliates 6 18 (12) (67) %
Impairment and restructuring charges 19 12 7 58 % Depreciation and
amortization 163 100 63 63 % Total Segment
EBITDA $ 370 $ 328 $ 42 13 % ** - Not meaningful For
the six months ended December 31, 2018 2017 Change % Change (in
millions) Net income $ 247 $ 21 $ 226 ** Add: Income tax
expense 105 289 (184) (64) % Other, net (27) 21 (48) ** Interest
expense (income), net 31 (7) 38 ** Equity losses of affiliates 9 28
(19) (68) % Impairment and restructuring charges 37 27 10 37 %
Depreciation and amortization 326 197 129 65 %
Total Segment EBITDA $ 728 $ 576 $ 152 26 % ** - Not
meaningful
NOTE 3 – ADJUSTED NET INCOME (LOSS) AVAILABLE TO NEWS
CORPORATION STOCKHOLDERS AND ADJUSTED EPS
The Company uses net income (loss) 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, recognized by
the Company or its equity method investees, as well as the
settlement of certain pre-Separation tax matters and the impact of
the Tax Act (“adjusted net income (loss) available to News
Corporation stockholders” and “adjusted EPS,” respectively), to
evaluate the performance of the Company’s operations exclusive of
certain items that impact the comparability of results from period
to period, as well as certain non-operational items. The
calculation of adjusted net income (loss) 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 (loss) 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
(loss) available to News Corporation stockholders and net income
(loss) per share as determined under GAAP as a measure of
performance. However, management uses these measures in comparing
the Company’s historical performance and believes that they provide
meaningful and comparable information to investors to assist in
their analysis of our performance relative to prior periods and our
competitors.
The following tables reconcile reported net income (loss)
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 six months ended December 31,
2018 and 2017.
For the three months ended For the
three months ended December 31, 2018 December 31, 2017 (in
millions, except per share data)
Net incomeavailable tostockholders
EPS
Net income(loss) availableto
stockholders
EPS
Net income (loss) $ 119 $ $
(66) $ Less: Net income attributable to noncontrolling interests
(24) (17) Less: Redeemable preferred stock dividends - (1)
Net income (loss) available to News Corporation
stockholders $ 95 $ 0.16 $ (84) $ (0.14) U.K. Newspaper
Matters 4 0.01 3 - Impairment and restructuring charges 19
0.03 12 0.02 Other, net (7) (0.01) 30 0.05 Equity
losses of affiliates(a) - - 13 0.02 Tax impact on items
above (6) (0.01) (3) - Impact of Tax Act(b) - - 174 0.30
Impact of noncontrolling interest on items included above
(2) - (8) (0.01)
As adjusted $ 103 $ 0.18 $ 137 $
0.24 (a) During the three months ended December 31, 2017,
the Company recognized $13 million in non-cash write-downs of
certain equity method investments’ carrying values. (b) During the
three months ended December 31, 2017, the Company recorded a $174
million provisional charge as a result of the U.S. Tax Cuts and
Jobs Act. For the six months
ended For the six months ended December 31, 2018 December 31, 2017
(in millions, except per share data)
Net incomeavailable tostockholders
EPS
Net income(loss) availableto
stockholders
EPS
Net income $ 247 $ $ 21 $
Less: Net income attributable to noncontrolling interests (51) (36)
Less: Redeemable preferred stock dividends -
(1)
Net income (loss) available to News
Corporation stockholders $ 196 $ 0.33 $ (16) $ (0.03)
U.K. Newspaper Matters (a) 6 0.01 (40) (0.07) Impairment and
restructuring charges 37 0.06 27 0.05 Other, net (27) (0.05)
21 0.03 Equity losses of affiliates (b) - - 13 0.02
Tax impact on items above (10) (0.01) 6 0.01 Impact of Tax
Act (c) - - 174 0.30 Impact of noncontrolling interest on
items included above (2) - (8) (0.01)
As adjusted
$ 200 $ 0.34 $ 177 $ 0.30 (a) During the six months ended
December 31, 2017, the Company recorded a $46 million benefit from
the reversal of certain previously accrued net liabilities for the
U.K. Newspaper Matters as a result of an agreement reached with the
relevant tax authority related to certain employment taxes. (b)
During the six months ended December 31, 2017, the Company
recognized $13 million in non-cash write-downs of certain equity
method investments’ carrying values. (c) During the six months
ended December 31, 2017, the Company recorded a $174 million
provisional charge as a result of the U.S. Tax Cuts and Jobs Act.
NOTE 4 – PRO FORMA
The following supplemental unaudited pro forma information for
the three and six months ended December 31, 2017 reflects the
Company’s results of operations as if the Transaction had occurred
on July 1, 2016. The Company believes that the presentation of this
supplemental information enhances comparability across the
reporting periods. The information was prepared in accordance with
Article 11 of Regulation S-X and is based on historical results of
operations of News Corp and Foxtel, adjusted for the effect of any
Transaction-related accounting adjustments, as described below. Pro
forma adjustments were based on available information and
assumptions regarding impacts that are directly attributable to the
Transaction, are factually supportable, and are expected to have a
continuing impact on the combined results. In addition, the pro
forma information is provided for supplemental and informational
purposes only, and is not necessarily indicative of what the
Company’s results of operations would have been, or the Company’s
future results of operations, had the Transaction actually occurred
on the date indicated. As only the financial results for the
Subscription Video Services segment were adjusted due to the
presentation of this pro forma supplemental information, the
Company is only providing pro forma supplemental information for
this segment below, under “Subscription Video Services”. The
unaudited pro forma information should be read in conjunction with
“Management’s Discussion and Analysis of Financial Condition and
Results of Operations” and our unaudited consolidated financial
statements and related notes included in the Company’s Quarterly
Report on Form 10-Q for the quarter ended December 31, 2018 that
will be filed with the Securities and Exchange Commission.
The following tables set forth the Company’s unaudited reported
and pro forma results of operations for the three and six months
ended December 31, 2018 and 2017, respectively.
For the three months ended December 31,
2018 2017 Change % Change (in millions, except
%) As reported Pro forma Better/(Worse) Revenues:
Circulation and subscription $ 1,029 $ 1,083 $ (54) (5) %
Advertising 718 767 (49) (6) % Consumer 478 453 25 6 % Real estate
248 222 26 12 % Other 154 166 (12) (7) % Total
Revenues 2,627 2,691 (64) (2) % Operating expenses (1,484)
(1,420) (64) (5) % Selling, general and administrative (773) (821)
48 6 % Depreciation and amortization (163) (167) 4 2 % Impairment
and restructuring charges (19) (12) (7) (58) % Equity losses of
affiliates (6) (19) 13 68 % Interest expense, net (15) (20) 5 25 %
Other, net 7 (30) 37 ** Income before income
tax expense 174 202 (28) (14) % Income tax expense (55)
(237) 182 77 % Net income (loss) 119 (35) 154 **
Less: Net income attributable to noncontrolling interests
(24) (37) 13 35 % Net income (loss) attributable to
News Corporation $ 95 $ (72) $ 167 ** ** - Not
meaningful For the six months ended
December 31, 2018 2017 Change % Change (in millions,
except %) As reported Pro forma Better/(Worse) Revenues:
Circulation and subscription $ 2,063 $ 2,210 $ (147) (7) %
Advertising 1,382 1,498 (116) (8) % Consumer 878 839 39 5 % Real
estate 475 425 50 12 % Other 353 312 41 13 % Total
Revenues 5,151 5,284 (133) (3) % Operating expenses (2,824)
(2,861) 37 1 % Selling, general and administrative (1,599) (1,598)
(1) - % Depreciation and amortization (326) (333) 7 2 % Impairment
and restructuring charges (37) (30) (7) (23) % Equity losses of
affiliates (9) (21) 12 57 % Interest expense, net (31) (46) 15 33 %
Other, net 27 (22) 49 ** Income before income
tax expense 352 373 (21) (6) % Income tax expense (105)
(294) 189 64 % Net income 247 79 168 ** Less: Net
income attributable to noncontrolling interests (51)
(70) 19 27 % Net income attributable to News Corporation $
196 $ 9 $ 187 ** ** - Not meaningful
Pro Forma (unaudited) For the three months ended
December 31, 2017
News CorpHistorical(a)
FoxtelHistorical(b)
TransactionAdjustments
Pro Forma (in millions, except per share amounts)
Revenues: Circulation and subscription $ 637 $ 533 $ (87) (c)(d) $
1,083 Advertising 717 50 - 767 Consumer 453 - - 453 Real estate 222
- - 222 Other 151 15 - 166 Total
Revenues 2,180 598 (87) 2,691 Operating expenses (1,139)
(372) 91 (c)(e) (1,420) Selling, general and administrative (713)
(110) 2 (f) (821) Depreciation and amortization (100) (59) (8)
(g)(h)(i) (167) Impairment and restructuring charges (12) - - (12)
Equity losses of affiliates (18) - (1) (j) (19) Interest income
(expense), net 1 (21) - (20) Other, net (30) -
- (30) Income before income tax expense 169 36 (3) 202
Income tax expense (235) (4) 2 (k)
(237) Net (loss) income (66) 32 (1) (35) Less: Net income
attributable to noncontrolling interests (17) -
(20) (l) (37) Net (loss) income attributable to News
Corporation $ (83) $ 32 $ (21) $ (72) Basic and diluted loss
per share: Net loss available to News Corporation stockholders per
share $ (0.14) $ (0.12) Pro
Forma (unaudited) For the six months ended December 31, 2017
News CorpHistorical(a)
FoxtelHistorical(b)
TransactionAdjustments
Pro Forma (in millions, except per share amounts)
Revenues: Circulation and subscription $ 1,288 $ 1,107 $ (185)
(c)(d) $ 2,210 Advertising 1,399 99 - 1,498 Consumer 839 - - 839
Real estate 425 - - 425 Other 287 25 -
312 Total Revenues 4,238 1,231 (185) 5,284 Operating
expenses (2,288) (766) 193 (c)(e) (2,861) Selling, general and
administrative (1,374) (227) 3 (f) (1,598) Depreciation and
amortization (197) (118) (18) (g)(h)(i) (333) Impairment and
restructuring charges (27) (3) - (30) Equity (losses) earnings of
affiliates (28) 3 4 (j) (21) Interest income (expense), net 7 (53)
- (46) Other, net (21) (1) - (22)
Income before income tax expense 310 66 (3) 373 Income tax expense
(289) (10) 5 (k) (294) Net income 21 56
2 79 Less: Net income attributable to noncontrolling interests
(36) - (34) (l) (70) Net (loss) income
attributable to News Corporation $ (15) $ 56 $ (32) $ 9
Basic and diluted (loss) income per share: Net (loss) income
available to News Corporation stockholders per share $ (0.03) $
0.02 (a) Reflects the historical results of
operations of News Corporation. As the acquisition of a controlling
interest in Foxtel was completed on April 3, 2018, Foxtel is
reflected in our historical Statements of Operations from April 3,
2018 onwards. (b) Reflects the historical results of operations of
Foxtel to the date of the Transaction. From April 3, 2018 onwards,
Foxtel is included in the historical results of operations of News
Corporation. The Statements of Operations of Foxtel are derived
from its historical financial statements for the three and six
months ended December 31, 2017. The Statements of Operations for
the three and six months ended December 31, 2017 reflect Foxtel's
Statements of Operations on a U.S. GAAP basis and translated from
Australian dollars to U.S. dollars, the reporting currency of the
combined group, using the quarterly average rates for each period
presented. Additionally, certain balances within Foxtel’s
historical financial information were reclassified to be consistent
with the Company’s presentation. (c) Represents the impact of
eliminating transactions between Foxtel and the consolidated
subsidiaries of News Corporation, which would be eliminated upon
consolidation as a result of the Transaction. (d) Reflects the
reversal of revenue recognized in Foxtel's historical Statements of
Operations resulting from the fair value adjustment of Foxtel's
historical deferred installation revenue in the preliminary
purchase price allocation for the Transaction. (e) Reflects the
adjustment to amortization of program inventory recognized in
Foxtel’s historical Statements of Operations related to the fair
value adjustment of Foxtel's historical program inventory in the
preliminary purchase price allocation. (f) Reflects the removal of
transaction expenses directly related to the Transaction that are
included in News Corp’s historical Statements of Operations for the
three and six months ended December 31, 2017. These costs are
considered to be non-recurring in nature, and as such, have been
excluded from the pro forma Statements of Operations. (g) Reflects
the adjustment to amortization expense resulting from the
recognition of amortizable intangible assets in the preliminary
purchase price allocation. (h) Reflects the adjustment to
depreciation and amortization expense resulting from the fair value
adjustment to Foxtel's historical fixed assets in the preliminary
purchase price allocation, which resulted in a step-up in the value
of such assets. (i) Reflects the reversal of amortization expense
included in News Corp’s historical Statements of Operations from
the Company's settlement of its pre-existing contractual
arrangement between Foxtel and FOX SPORTS Australia, which resulted
in a write-off of its channel distribution agreement intangible
asset at the time of the Transaction. (j) Represents the impact to
equity losses of affiliates as a result of the Transaction, as if
the Transaction occurred on July 1, 2016. Historically News Corp
accounted for its investment in Foxtel under the equity method of
accounting. As a result of the Transaction, Foxtel became a
majority-owned subsidiary of the Company, and therefore, the impact
of Foxtel on the Company’s historical equity losses of affiliates
was eliminated. (k) In determining the tax rate to apply to our pro
forma adjustments we used the Australian statutory rate of 30%,
which is the jurisdiction in which the business operates. However,
in certain instances, the effective tax rate applied to certain
adjustments differs from the statutory rate primarily as a result
of certain valuation allowances on deferred tax assets, based on
the Company’s historical tax profile in Australia. (l) Represents
the adjustment, as a result of the Transaction, to reflect the
non-controlling interest of the combined company on a pro forma
basis.
Pro Forma Segment Analysis
The following table reconciles unaudited reported and pro forma
Net income (loss) to unaudited reported and pro forma Total Segment
EBITDA for the three and six months ended December 31, 2018 and
2017, respectively:
For the three months ended
December 31,
For the six months ended
December 31,
2018 2017 2018 2017 (in millions) As reported Pro
forma As reported Pro forma Net income (loss) $ 119 $
(35) $ 247 $ 79 Add: Income tax expense 55 237 105 294 Other, net
(7) 30 (27) 22 Interest expense, net 15 20 31 46 Equity losses of
affiliates 6 19 9 21 Impairment and restructuring charges 19 12 37
30 Depreciation and amortization 163 167 326
333 Total Segment EBITDA $ 370 $ 450 $ 728 $ 825
The following tables set forth the Company’s reported Revenues
and Segment EBITDA for the three and six months ended December 31,
2018 and pro forma Revenues and Segment EBITDA for the three and
six months ended December 31, 2017:
For the three months ended December 31, 2018
2017 Segment Segment Revenues EBITDA Revenues
EBITDA (in millions) As reported Pro forma News and
Information Services $ 1,257 $ 120 $ 1,298 $ 141 Subscription Video
Services 562 84 631 155 Book Publishing 496 88 469 78 Digital Real
Estate Services 311 121 292 119 Other 1 (43) 1
(43)
Total $ 2,627 $ 370 $ 2,691 $ 450
For the six months ended December 31, 2018
2017 Segment Segment Revenues EBITDA Revenues EBITDA
(in millions) As reported Pro forma News and Information
Services $ 2,505 $ 236 $ 2,539 $ 215 Subscription Video Services
1,127 197 1,311 309 Book Publishing 914 156 870 126 Digital Real
Estate Services 604 226 563 214 Other 1 (87) 1
(39)
Total $ 5,151 $ 728 $ 5,284 $ 825
Subscription Video Services
For the three months ended December 31,
For the six months ended December 31, 2018 2017
% Change 2018 2017 % Change (in millions,
except %) As reported Pro forma Better/(Worse) As reported Pro
forma Better/(Worse) Revenues: Circulation and subscription
$ 490 $ 548 (11) % $ 981 $ 1,140 (14) % Advertising 55 66 (17) %
112 141 (21) % Other 17 17 - % 34 30 13
%
Total Revenues 562 631 (11) % 1,127 1,311 (14) % Operating
expenses (411) (356) (15) % (735) (755) 3 % Selling, general and
administrative (67) (120) 44 % (195)
(247) 21 %
Segment EBITDA $ 84 $ 155 (46) % $ 197 $ 309 (36)
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190207005880/en/
Investor RelationsMichael
Florin212-416-3363mflorin@newscorp.com
Leslie Kim212-416-4529lkim@newscorp.com
Corporate CommunicationsJim
Kennedy212-416-4064jkennedy@newscorp.com
Ilana Ozernoy212-416-3364iozernoy@newscorp.com
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