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News Corporation NCRA 1st Quarter Results

  News Corporation (NCRA) - 1st Quarter Results

RNS Number : 4945Q
News Corporation
06 November 2012




                               News Corporation

                                                                             

                                      

          EARNINGS RELEASE FOR THE QUARTER ENDED SEPTEMBER 30, 2012



  NEWS CORPORATION REPORTS FIRST QUARTER EARNINGS PER SHARE OF $0.94 ON NET
 INCOME ATTRIBUTABLE TO STOCKHOLDERS OF $2.23 BILLION AND FIRST QUARTER TOTAL
    SEGMENT OPERATING INCOME OF $1.38 BILLION ON REVENUE OF $8.14 BILLION



NEW YORK, NY,  November 6, 2012  - News Corporation  (NASDAQ: NWS, NWSA;  ASX: 
NWS, NWSLV) today reported total revenue for the three months ending September
30, 2012 of  $8.14 billion, a  $177 million,  or 2%, increase  over the  $7.96 
billion of revenue reported in the  prior year quarter. The revenue  increase 
was led by  16% growth  at the  Company's Cable  Network Programming  segment, 
which was  partially offset  by  declines at  the Company's  Direct  Broadcast 
Satellite Television and Publishing segments.



The Company reported first quarter total segment operating income^(1) of $1.38
billion compared to $1.39  billion reported a year  ago. The results  reflect 
operating income  improvements  at  the Company's  Cable  Network  Programing, 
Television and Filmed Entertainment segments, led  by a $178 million, or  23%, 
increase at the  Cable Network Programming  segment. These improvements  were 
more than offset by  decreases at the  Direct Broadcast Satellite  Television, 
Publishing and  Other segments.  The  first quarter  results included  a  $67 
million charge related to  the costs of  the ongoing investigations  initiated 
upon the closure of The  News of the World as  compared to $17 million in  the 
corresponding period of  the prior  year. This year's  first quarter  results 
also included $5 million  of costs related to  the proposed separation of  the 
Company's entertainment and  publishing businesses.  Excluding these  charges 
from both years, respectively, first quarter adjusted total segment  operating 
income of $1.45 billion  increased $48 million, or  3%, from $1.40 billion  in 
the first quarter of the prior year.



The Company  reported quarterly  net income  attributable to  stockholders  of 
$2.23 billion ($0.94 per  share), compared to $738  million ($0.28 per  share) 
reported in  the  corresponding period  of  the prior  year.  This  quarter's 
results included $1.38 billion of income in Other, net, principally reflecting
a pre-tax gain on the sale of NDS  as well as a $75 million pre-tax gain  from 
the Company's  participation in  British  Sky Broadcasting's  ("BSkyB")  share 
repurchase program,  which is  reflected in  Equity earnings  of  affiliates. 
These gains were partially offset by $152 million of pre-tax restructuring and
impairment charges primarily  related to the  Company's newspaper and  digital 
games businesses.  Excluding the  net income  effects of  these items,  the 
charges related to the investigations in the U.K. and the proposed  separation 
of  the  Company's  entertainment   and  publishing  businesses,  along   with 
comparable items in both years, first quarter adjusted earnings per  share^(2) 
was $0.43 compared with the adjusted prior year quarter result of $0.32.



Commenting on the results, Chairman and Chief Executive Officer Rupert Murdoch
said:



"Our operational discipline  and focus  on innovation continued  to drive  the 
company's momentum in our fiscal first quarter, led by double-digit growth  in 
our channels  business and  the  global success  of  our film  and  television 
content. Even  against  considerable currency  headwinds  due to  a  stronger 
dollar, we were  able to  increase News  Corp's revenue  and adjusted  segment 
operating profit over  the prior  year quarter  while continuing  to make  key 
investments to position us for future growth.



"We are committed to leading the change that the marketplace and our customers
demand as  the Company  builds  on its  success at  leveraging  multi-platform 
opportunities for our content. We believe that  our ability to do so will  be 
enhanced by the  flexibility and management  focus that will  result from  the 
proposed separation of our entertainment and publishing businesses. We  have 
made considerable progress in this process and look forward to providing  more 
details by the end of the calendar year."



^(1) Total segment operating income  is a non-GAAP financial  measure. 
See page 11  for a description  of total  segment operating income  and for  a 
reconciliation of total segment operating  income to income before income  tax 
expense.



^(2) See  page 13  for  a reconciliation  of  reported net  income  and 
earnings per share to adjusted net income and adjusted earnings per share.



REVIEW OF SEGMENT OPERATING RESULTS
Total Segment Operating Income (Loss)   3 Months Ended
                                        September 30,
                                       2012     2011
                                         US $ Millions
Cable Network Programming             $   953  $   775
Filmed Entertainment                      400      347
Television                                156      133
Direct Broadcast Satellite Television      23      119
Publishing                                 57      110
Other                                    (211)      (99)
Total Segment Operating Income *      $ 1,378  $ 1,385



* The three months ended September 30, 2012 and 2011 include $67  million 
and  $17   million,  respectively,   of  charges   related  to   the   ongoing 
investigations in the U.K. The three months ended September 30, 2012  include 
$5 million  of costs  related  to the  proposed  separation of  the  Company's 
entertainment and publishing  businesses. Excluding  these charges,  adjusted 
total segment  operating income  is $1,450  and $1,402  million in  the  three 
months ended September 30, 2012 and 2011, respectively.





CABLE NETWORK PROGRAMMING



Cable Network Programming reported quarterly segment operating income of  $953 
million, a $178 million, or 23%, increase over the prior year quarter,  driven 
by a  16%  increase  in  revenue. Operating  income  contributions  from  the 
domestic channels increased 33%, led by growth at the Regional Sports Networks
(RSNs), FX  Network and  Fox News  Channel. Strong  local currency  operating 
profit growth at the  Fox International Channels was  more than offset by  the 
adverse impact of the strengthened U.S. dollar and the impact of the inaugural
broadcasts of the new BCCI cricket rights at STAR. As a result, the Company's
international cable channels quarterly earnings contributions declined 7% from
the same period a year ago.



Affiliate revenue grew  16% and 25%  at the domestic  and international  cable 
channels, respectively. Domestic network  growth reflects higher rates  across 
all networks,  led  by  growth  at  the RSNs  and  Fox  News  Channel.  About 
two-thirds of  the international  affiliate revenue  increase reflects  strong 
local currency organic growth at  FIC and STAR in  India. The balance of  the 
growth was from the inclusion of  Fox Pan American Sports partially offset  by 
the impact of strengthened U.S. dollar.



Advertising revenue at the domestic cable channels grew 8% in the quarter over
the prior year period, led  by growth at the RSNs  and Fox News Channel.  The 
international cable channels' advertising revenue improved on a local currency
basis but reported a 1% decline from the prior year quarter, as the impact  of 
the strengthened U.S. dollar  more than offset local  currency growth at  both 
the Fox International Channels, which benefitted from the consolidation of the
Fox Pan American Sports network, and STAR in India.



Expenses at  Cable  Network Programming  grew  11%  in the  quarter  over  the 
corresponding period in  the prior  year, due to  increased programming  costs 
including rights fees for the BCCI cricket  in India, expanded Big 12 and  PAC 
12  college  football   coverage,  the   launch  of   the  Ultimate   Fighting 
Championship, as well as increased expenses associated with the  consolidation 
of the Fox Pan American Sports network  and the launch of new sports  networks 
in Brazil and San Diego.



FILMED ENTERTAINMENT



Filmed Entertainment  reported  quarterly  segment operating  income  of  $400 
million, $53 million higher than the $347 million reported in the same  period 
a year ago.  Quarterly results  reflect the  successful worldwide  theatrical 
performance of Ice Age: Continental Drift, which has grossed over $850 million
in worldwide  box office  to date  and is  now the  biggest animated  film  of 
all-time at  the  international box  office.  Prior year  first  quarter  film 
results included the  successful worldwide theatrical  performance of Rise  of 
the Planet of the  Apes and the worldwide  home entertainment performances  of 
Rio and X-Men: First Class. The quarter also included increased  contributions 
from  the   television  production   studios,  including   increased   digital 
distribution revenue related to the timing of delivery of content to Netflix.



TELEVISION



Television reported quarterly  segment operating  income of  $156 million,  an 
increase of $23  million versus  the same period  a year  ago. This  increase 
reflects a more than doubling of retransmission consent revenues and increased
local advertising,  driven  by  record  first  quarter  political  advertising 
revenues.  These  improvements  were  partially  offset  by  lower   national 
advertising revenues  primarily reflecting  lower  primetime ratings  and  the 
market impact from the Olympics in August.



DIRECT BROADCAST SATELLITE TELEVISION



SKY Italia  generated  quarterly  segment operating  income  of  $23  million, 
compared to $119  million of operating  income reported in  the same period  a 
year ago. The decline  was driven by  higher programming expenses,  including 
nearly $70  million of  rights  costs associated  with  the broadcast  of  the 
Olympics. This year's quarterly results  were also adversely impacted by  the 
strengthened U.S.  dollar.  While  reported  U.S.  dollar  revenues  declined, 
quarterly local currency revenue increased 1% from the corresponding period of
the prior year led by higher subscription revenues. SKY Italia experienced  a 
net reduction of approximately 40,000 subscribers during the quarter, bringing
total subscribers to 4.86 million.



PUBLISHING



Publishing reported quarterly  segment operatingincome of  $57 million, a  $53 
million decrease compared to  the $110 million reported  in the same period  a 
year ago,  due to  lower advertising  revenues across  all divisions,  led  by 
declines at the Australian and U.S. publishing businesses. The declines  were 
partially offset  by increased  contributions at  the U.K.  newspapers,  which 
benefitted from the launch of the Sunday edition of The Sun in February  2012, 
and at HarperCollins, which benefitted from the acquisition of Thomas  Nelson, 
Inc., a Christian book publisher.



OTHER



The Other segment reported a quarterly segment operating loss of $211  million 
versus a loss  of $99 million  reported in the  same period a  year ago.  The 
first quarter results  include $67  million of  costs related  to the  ongoing 
investigations initiated upon  the closure  of The News  of the  World and  $5 
million  of  costs  related  to  the  proposed  separation  of  the  Company's 
entertainment and publishing businesses. This quarter's results also  reflect 
a $15 million  increased operating  loss at Amplify,  the Company's  education 
business, reflecting increased product development costs.







OTHER ITEMS



Gain on the sale of NDS



In July 2012, the Company sold its 49% investment in NDS Group Limited ("NDS")
to Cisco Systems Inc. for approximately  $1.9 billion. The Company recorded  a 
gain of approximately $1.4  billion on this transaction  which is included  in 
Other, net in the consolidated statements  of operations for the three  months 
ended September 30, 2012.





Share repurchases



On May  9,  2012, News  Corporation  announced  that its  Board  of  Directors 
approved an increase  to the  previously authorized  stock repurchase  program 
from $5 billion  to $10 billion.  Through November 5,  2012, the Company  has 
purchased approximately  $5.8  billion  of  Class A  common  stock  under  the 
program, at an average price  of $18.74 per share. As  a result of the  stock 
repurchase program,  diluted  weighted Class  A  shares outstanding  of  2,370 
million in this  year's quarter  declined 9% from  2,612 million  in the  same 
period a year ago.





Intent to pursue separation of entertainment and publishing businesses



On June 28,  2012, News Corporation  announced that it  intends to pursue  the 
separation of its publishing and  its media and entertainment businesses  into 
two distinct publicly  traded companies.  The global  publishing company  that 
would be  created  through  the  proposed transaction  would  consist  of  the 
Company's publishing businesses, its  education division and other  Australian 
assets. The  global media  and  entertainment company  would consist  of  the 
Company's cable  and  television  assets,  filmed  entertainment,  and  direct 
satellite broadcasting  businesses.  Following the  separation,  each  company 
would maintain two classes of common stock: Class A Common and Class B  Common 
Voting Shares. The separation is expected to be completed in approximately one
year from the  date of announcement.  In addition to  final approval from  the 
Board of Directors and stockholder approval, the completion of the  separation 
will be subject to receipt of regulatory approvals, opinions from tax  counsel 
and favorable rulings  from certain tax  jurisdictions regarding the  tax-free 
nature of the transaction to the Company and to its stockholders, further  due 
diligence as  appropriate, and  the filing  and effectiveness  of  appropriate 
filings with the SEC. There can be no assurances given that the separation of
the Company's businesses as described will occur.

REVIEW OF EQUITY EARNINGS (LOSSES) OF AFFILIATES' RESULTS



Quarterly earnings  from affiliates  were  $190 million  as compared  to  $121 
million in  the same  period a  year ago.  The increased  contributions  from 
affiliates are primarily due to the Company's $75 million pre-tax gain related
to the Company's participation in BSkyB's share repurchase.





The Company's share of equity earnings (losses) of affiliates is as follows:



                                                ^  3 Months Ended
                                                ^  September 30,
                                      % Owned   ^  2012    2011
                                                ^   US $ Millions
BSkyB                                 39%^(1)      $ 209  $ 141
Other affiliates                    Various^(2)      (19)    (20)
Total equity earnings of affiliates             ^ $ 190  $ 121



^(1) Please refer to BSkyB's earnings releases for detailed
information.

^(2) Primarily comprised of Sky Deutschland, NDS, Australian and STAR
equity affiliates.











Foreign Exchange Rates



Average foreign exchange rates used in the quarter-to-date profit results  are 
as follows:



                                  3 Months Ended
                                  September 30,
                                  2012    2011
Australian Dollar/U.S. Dollar     1.04    1.05
U.K. Pounds Sterling/U.S. Dollar  1.58    1.61
Euro/U.S. Dollar                  1.25    1.41

To receive a  copy of  this press release  through the  Internet, access  News 
Corporation's corporate Web site located at http://www.newscorp.com.



Audio from  News Corporation's  conference  call with  analysts on  the  first 
quarter results  can  be heard  live  on the  Internet  at 4:30  p.m.  Eastern 
Standard 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  Julie Henderson, Press Inquiries
212-852-7092                                        212-852-7070

Joe Dorrego, Investor Relations Nathaniel Brown, Press Inquiries

212-852-7856                                        212-852-7746

                                     Dan Berger, Press Inquiries

                                                    310-369-1274

CONSOLIDATED STATEMENTS OF
OPERATIONS
                                               3 Months Ended
                                               September 30,
                                        2012                  2011
                                  US $ Millions (except share related amounts)
Revenues                          $          8,136      $          7,959
Operating expenses                          (4,848)                (4,753)
Selling, general and
administrative expenses                     (1,610)                (1,527)
Depreciation and amortization                 (300)                  (294)
Impairment and restructuring
charges                                       (152)                   (91)
Equity earnings of affiliates                  190                   121
Interest expense, net                         (267)                  (258)
Interest income                                 31                    36
Other, net                                   1,375                  (130)
Income from continuing operations
before income tax expense                    2,555                 1,063
 Income tax expense                     (259)                  (277)
Net income                                   2,296                   786
 Less: Net income
attributable to

 noncontrolling interests                (63)                   (48)
Net income attributable to News
Corporation stockholders          $          2,233      $            738
Weighted average shares:                    2,370                2,612
Net income attributable to News
Corporation stockholders per
share:                            $           0.94      $           0.28



CONSOLIDATED BALANCE SHEETS                          September 30,   June 30,
                                                         2012        2012
Assets:                                                    US $ Millions
Current assets:
Cash and cash equivalents                            $    12,007  $  9,626
Receivables, net                                           6,634     6,608
Inventories, net                                           2,856     2,595
Other                                                        770       619
Total current assets                                      22,267    19,448
Non-current assets:
Receivables                                                  464       387
Investments                                                4,725     4,968
Inventories, net                                           4,835     4,596
Property, plant and equipment, net                         5,830     5,814
Intangible assets, net                                     7,128     7,133
Goodwill                                                  13,190    13,174
Other non-current assets                                   1,237     1,143
Total assets                                         $    59,676  $ 56,663
Liabilities and Equity:
Current liabilities:
Borrowings                                           $       273  $    273
Accounts payable, accrued expenses and other current
liabilities                                                5,615     5,405
Participations, residuals and royalties payable            1,862     1,691
Program rights payable                                     1,292     1,368
Deferred revenue                                           1,003       880
Total current liabilities                                 10,045     9,617
Non-current liabilities:
Borrowings                                                16,184    15,182
Other liabilities                                          3,693     3,650
Deferred income taxes                                      2,329     2,388
Redeemable noncontrolling interests                          648       641
Commitments and contingencies
Equity:
Class A common stock, $0.01 par value                         15        15
Class B common stock, $0.01 par value                          8         8
Additional paid-in capital                                16,016    16,140
Retained earnings and accumulated other
comprehensive income                                      10,225     8,521
 Total News Corporation stockholders' equity      26,264    24,684
Noncontrolling interests                                     513       501
 Total equity                                     26,777    25,185
Total liabilities and equity                         $    59,676  $ 56,663



CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                  3 Months Ended September 30,
                                                        2012          2011
                                                         US $ Millions
Operating activities:
Net Income                                        $     2,296   $      786
Adjustments to reconcile net income to cash
provided by operating activities:
 Depreciation and amortization                         300          294
 Amortization of cable distribution
investments                                                21           24
 Equity earnings of affiliates                        (190)         (121)
 Cash distributions received from affiliates            18           64
 Impairment charges, net of tax                         35            -
 Other, net                                         (1,375)          130
 Change in operating assets and liabilities,
net of acquisitions:
 Receivables and other assets                 (164)         (275)
 Inventories, net                             (465)         (537)
 Accounts payable and other
liabilities                                               234           59
Net cash provided by operating activities                 710          424
Investing activities:
 Property, plant and equipment, net of
acquisitions                                             (176)         (248)
 Acquisitions, net of cash acquired                   (227)          (67)
 Investments in equity affiliates                       69          (34)
 Other investments                                     (30)          (78)
 Proceeds from dispositions                          1,825          334
Net cash provided by (used in) investing
activities                                              1,461          (93)
Financing activities:
 Borrowings                                            988            -
 Repayment of borrowings                                 -          (32)
 Issuance of shares                                    111           12
 Repurchase of shares                                 (877)       (1,272)
 Dividends paid                                        (52)          (23)
 Other, net                                              9            -
Net cash provided by (used in) financing
activities                                                179       (1,315)
Net increase (decrease) in cash and cash
equivalents                                             2,350         (984)
Cash and cash equivalents, beginning of period          9,626       12,680
Exchange movement on opening cash balance                  31         (267)
Cash and cash equivalents, end of period          $    12,007   $   11,429



SEGMENT INFORMATION                      3 Months Ended
                                         September 30,
                                        2012      2011
                                          US $ Millions
Revenues
Cable Network Programming             $ 2,449  $ 2,120
Filmed Entertainment                    1,745    1,778
Television                                959      923
Direct Broadcast Satellite Television     817      922
Publishing                              2,018    2,069
Other                                     148      147
Total Revenues                        $ 8,136  $ 7,959
Segment Operating Income (Loss)
Cable Network Programming             $   953  $   775
Filmed Entertainment                      400      347
Television                                156      133
Direct Broadcast Satellite Television      23      119
Publishing                                 57      110
Other                                    (211)      (99)
Total Segment Operating Income *      $ 1,378  $ 1,385



* The three months ended September 30, 2012 and 2011 include $67  million 
and  $17   million,  respectively,   of  charges   related  to   the   ongoing 
investigations in the U.K. The three months ended September 30, 2012  include 
$5 million  of costs  related  to the  proposed  separation of  the  Company's 
entertainment and publishing  businesses. Excluding  these charges,  adjusted 
total segment  operating income  is $1,450  and $1,402  million in  the  three 
months ended September 30, 2012 and 2011, respectively.

NOTE 1 - TOTAL  SEGMENT OPERATING INCOME AND  SEGMENT OPERATING INCOME  BEFORE 
DEPRECIATION AND AMORTIZATION



The Company  evaluates the  performance  of its  operating segments  based  on 
segment operating income, and management  uses total segment operating  income 
as a  measure  of  the  performance  of  operating  businesses  separate  from 
non-operating factors. Total segment  operating income and segment  operating 
income before depreciation and amortization  are non-GAAP measures and  should 
be considered in addition to, not as  a substitute for, net income, cash  flow 
and other measures of financial performance reported in accordance with  GAAP. 
In  addition,  these  measures   do  not  reflect   cash  available  to   fund 
requirements.  These  measures   exclude  items,  such   as  impairment   and 
restructuring charges,  which  are  significant components  in  assessing  the 
Company's financial performance. Segment operating income before depreciation
and amortization also  excludes depreciation and  amortization which are  also 
significant components in assessing the Company's financial performance.



Management believes that total segment operating income and segment  operating 
income before  depreciation and  amortization  are appropriate  measures  for 
evaluating the operating  performance of  the Company's  business and  provide 
investors and equity analysts  a measure to  analyze operating performance  of 
the Company's  business  and  enterprise value  against  historical  data  and 
competitors' data.  Total  segment  operating income  and  segment  operating 
income before depreciation and amortization is the primary measure used by our
chief operating decision  maker to  evaluate the performance  of and  allocate 
resources to the Company's business segments.



Total segment operating income does not include: Impairment and restructuring
charges, discontinued  operations,  Equity earnings  of  affiliates,  Interest 
expense, net, Interest income, Other, net,  Income tax expense and Net  income 
attributable to noncontrolling interests.



Segment operating income  before depreciation and  amortization is defined  as 
segment  operating  income   plus  depreciation  and   amortization  and   the 
amortization of  cable distribution  investments and  eliminates the  variable 
effect  across  all  business  segments  of  depreciation  and  amortization. 
Depreciation and amortization  expense includes the  depreciation of  property 
and equipment, as  well as  amortization of  finite-lived intangible  assets. 
Amortization of cable distribution investments represents a reduction  against 
revenues over the term of a carriage arrangement and, as such, it is  excluded 
from segment operating income before depreciation and amortization.

The following table reconciles segment operating income before depreciation
and amortization to income from continuing operations before income tax
expense.



                                                            3 Months Ended
                                                            September 30,
                                                           2012      2011
                                                             US $ Millions
Segment Operating income before depreciation and
amortization                                             $ 1,699  $ 1,703
Depreciation and amortization                               (300)     (294)
Amortization of cable distribution investments               (21)      (24)
Total Segment Operating income                             1,378    1,385
Impairment and restructuring charges                        (152)      (91)
Equity earnings of affiliates                                190      121
Interest expense, net                                       (267)     (258)
Interest income                                               31       36
Other, net                                                 1,375     (130)
Income from continuing operations before income tax
expense                                                  $ 2,555  $ 1,063



                           For the Three Months Ended September 30, 2012
                                          (US $ Millions)
                          Segment
                         Operating
                       income (loss)                  Amortization
                           before       Depreciation        of        Segment
                                                          cable      Operating
                      depreciation and       and       distribution   income
                        amortization    amortization  investments    (loss)
Cable Network
Programming           $         1,016  $        (42)  $       (21)  $    953
Filmed Entertainment              433           (33)             -       400
Television                        177           (21)             -       156
Direct Broadcast
Satellite Television               95           (72)             -        23
Publishing                        172          (115)             -        57
Other                            (194)           (17)             -      (211)
Consolidated Total    $         1,699  $       (300)  $       (21)  $  1,378



                           For the Three Months Ended September 30, 2011
                                          (US $ Millions)
                          Segment
                         Operating
                       income (loss)                  Amortization
                           before       Depreciation        of        Segment
                                                          cable      Operating
                      depreciation and       and       distribution   income
                        amortization    amortization  investments    (loss)
Cable Network
Programming           $           836  $        (37)  $       (24)  $    775
Filmed Entertainment              386           (39)             -       347
Television                        154           (21)             -       133
Direct Broadcast
Satellite Television              193           (74)             -       119
Publishing                        217          (107)             -       110
Other                             (83)           (16)             -       (99)
Consolidated Total    $         1,703  $       (294)  $       (24)  $  1,385

NOTE 2 - ADJUSTED NET INCOME AND ADJUSTED EPS



The calculation  of  net  income  and earnings  per  share  excluding  Segment 
operating profit  adjustments, Impairment  and restructuring  charges,  Equity 
affiliate adjustments, "Other, net", and  discontinued operations, net of  tax 
("adjusted net income  and adjusted diluted  earnings per share")  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  and adjusted diluted  earnings per share  are 
not measures of performance under generally accepted accounting principles and
should not  be  construed  as  substitutes for  consolidated  net  income  and 
earnings 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 Company uses adjusted net income  and adjusted diluted earnings per  share 
to evaluate the performance of  the Company's operations exclusive of  certain 
items that impact the comparability of results from period to period.



The following  tables  reconcile  reported net  income  and  reported  diluted 
earnings per  share  ("EPS")  to  adjusted net  income  and  adjusted  diluted 
earnings per share for the three months ended September 30, 2012 and 2011.



                               3 Months Ended              3 Months Ended
                              September 30,2012           September 30,2011
                          Net (loss)                   Net (loss)
                            income          EPS          income         EPS
                                (in US$ millions, except per share data)
                          ^ ^       ^ ^ ^      ^ ^  ^     ^ ^ ^
As reported               $   2,233    $   0.94    $    738    $  0.28
                          ^       ^ ^ ^      ^ ^ ^      ^ ^ ^     ^
Segment operating profit
adjustments (net of
provision for income
taxes of $17 and $3 for
the three months ended
September 30, 2012 and
2011, respectively)^(a)   ^     55        0.02          14       0.01
                          ^       ^ ^ ^      ^ ^ ^      ^ ^ ^     ^
Impairment and
restructuring charges
(net of provision for
income taxes of $32 and
$27 for the three months
ended September 30, 2012
and 2011, respectively)   ^    120        0.05          64       0.02
                          ^       ^ ^ ^      ^ ^ ^      ^ ^ ^     ^
Equity affiliate
adjustments (net of
provision for income
taxes of $25 and $6 for
the three months ended
September 30, 2012 and
2011, respectively)^(b)   ^    (50)       (0.02)         (12)          -
                          ^       ^ ^ ^      ^ ^ ^      ^ ^ ^     ^
Other, net (net of
provision for income
taxes of $29 and $97 for
the three months ended
September 30, 2012 and
2011, respectively)       ^ (1,346)       (0.57)          33       0.01
                          ^       ^ ^ ^      ^ ^ ^      ^ ^ ^     ^
Rounding                  ^       ^ ^ ^  0.01
As adjusted               $   1,012    $   0.43    $    837    $  0.32



(a) Segment operating profit for the  three months ended September 30,  2012 
and 2011  was  adjusted  to  exclude  the  expenses  related  to  the  ongoing 
investigations initiated upon the  closure of The News  of the World.  Segment 
operating profit for the three months  ended September 30, 2012 also  excludes 
the  expenses  related  to  separation  of  the  Company's  entertainment  and 
publishing businesses.

(b) Equity earnings of affiliates for  the three months ended September  30, 
2012 was adjusted to exclude from BSkyB results News Corporation's gain on the
BSkyB repurchase program. Equity earnings  of affiliates for the three  months 
ended September 30,  2011 were adjusted  to exclude from  BSkyB's results  the 
gain recognized on the fee paid by News Corporation related to its  withdrawal 
of its acquisition bid in July 2011.

                     This information is provided by RNS
           The company news service from the London Stock Exchange

END


QRFFQLLBLFFFFBK -0- Nov/07/2012 07:00 GMT
 
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