Revenues (pro forma)
Revenues decreased $69 million, or 3%, for the three months ended
September 30, 2018, as compared to the corresponding period of fiscal 2018. The Revenue decrease was attributable to a $115 million decrease in the Subscription Video Services segment primarily resulting from lower subscription revenues due to
subscriber mix, lower advertising revenues and the $45 million negative impact of foreign currency fluctuations. The revenue decrease was partially offset by higher revenues of $22 million at the Digital Real Estate Services segment, mainly due to
increased revenues at both REA Group and Move, and $17 million at the Book Publishing segment as a result of higher sales primarily in the general books category, partially offset by the impact of the adoption of the new revenue recognition
standard. The impact of foreign currency fluctuations of the U.S. dollar against local currencies resulted in a revenue decrease of $90 million for the three months ended September 30, 2018, as compared to the corresponding period of fiscal
2018.
Operating expenses (pro forma)
Operating expenses decreased $101 million, or 7%, for the three months ended September 30,
2018, as compared to the corresponding period of fiscal 2018. The decrease in Operating expenses for the three months ended September 30, 2018 was mainly due to lower operating expenses at the Subscription Video Services segment of $75 million
primarily resulting from lower non-sports programming and pay-per-view costs and the $26 million impact of foreign currency fluctuations. The decrease was also driven by lower operating expenses at the News and Information Services segment of $23
million for the three months ended September 30, 2018. The impact of foreign currency fluctuations of the U.S. dollar against local currencies resulted in an Operating expense decrease of $42 million for the three months ended
September 30, 2018, as compared to the corresponding period of fiscal 2018.
Selling, general and administrative expenses (pro
forma)
Selling, general and administrative expenses increased $49 million, or 6%, for the three months ended September 30, 2018, as compared to the corresponding period of fiscal 2018. The increase in Selling, general and
administrative expenses was primarily due to the absence of the $46 million impact from the reversal of a portion of the previously accrued liability for the U.K. Newspaper Matters and the corresponding receivable from
21st Century Fox as the result of an agreement reached with the relevant tax authority with respect to certain employment taxes in the first quarter of fiscal 2018. The impact of foreign currency fluctuations of the U.S. dollar against
local currencies resulted in a Selling, general and administrative expense decrease of $29 million for the three months ended September 30, 2018, as compared to the corresponding period of fiscal 2018.
Depreciation and amortization (pro forma)
Depreciation and amortization expense decreased $3 million, or 2%, for the three months ended
September 30, 2018, as compared to the corresponding period of fiscal 2018. The impact of foreign currency fluctuations of the U.S. dollar against local currencies resulted in a depreciation and amortization expense decrease of $6 million for
the three months ended September 30, 2018, as compared to the corresponding period of fiscal 2018.
Impairment and restructuring charges (pro
forma)
During the three months ended September 30, 2018 and 2017, the Company recorded restructuring charges of $18 million primarily related to employee termination benefits in the News and Information Services segment.
Equity losses of affiliates (pro forma
)
Equity losses of affiliates were higher by $1 million for the three months ended
September 30, 2018 as compared to the corresponding period of fiscal 2018.
Interest (expense) income, net (pro forma)
Interest
(expense) income, net was ($16) million as compared to ($6) million in the corresponding period of fiscal 2018 primarily due to lower interest expense from the repayment of the Foxtel shareholder note in the first quarter of fiscal 2018.
Other, net (pro forma)
Other, net increased $12 million for the three months ended September 30, 2018, as compared to the
corresponding period of fiscal 2018, primarily due to the remeasurement of equity securities in accordance with the adoption of ASU 2016-01.
Income tax (expense) benefit (pro forma)
The Companys income tax expense and effective tax rate for the three months ended
September 30, 2018 were $50 million and 28%, respectively, as compared to an income tax expense and effective tax rate of $57 million and 33%, respectively, for the corresponding period of fiscal 2018.
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