FORM 6-K
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
For the month of November 2003 (November 5, 2003)
THE NEWS CORPORATION LIMITED
--------------------------------------------------------------------------------
(Name of Registrant)
2 Holt Street, Sydney, New South Wales, 2010, Australia
--------------------------------------------------------------------------------
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual
reports under cover Form 20-F or Form 40-F:
Form 20-F X Form 40-F
--- ---
Indicate by check mark if the registrant is submitting the Form 6-K in
paper as permitted by Regulation S-T Rule 101(b)(1):
Yes No X
--- ---
Indicate by check mark if the registrant is submitting the Form 6-K in
paper as permitted by Regulation S-T Rule 101(b)(7):
Yes No X
--- ---
Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934:
Yes No X
--- ---
If "Yes" is marked, indicate below the file number assigned to the
registrant in connection with Rule 12g3-2(b): Not Applicable
--------------
Annexed hereto are copies of the announcements by The News Corporation Limited
("News Corporation") of its financial results for the quarter ended September
30, 2003 in U.S. and Australian dollars.
Such announcements were filed with the Australian Stock Exchange and released in
New York on November 5, 2003.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
THE NEWS CORPORATION LIMITED
Date: November 5, 2003 By: /s/ Arthur M. Siskind
----------------------------
Arthur M. Siskind
Director
EXHIBIT INDEX
-------------
Page No. in Sequential
Exhibit Numbering System
------- ----------------
A. Announcement made by News Corporation of its financial
results in Australian dollars for the quarter ended
September 30, 2003. 5
B. Announcement made by News Corporation of its financial
results in U.S. dollars for the quarter ended September
30, 2003. 14
EXHIBIT A
News Corporation
__________________________________________________
EARNINGS RELEASE FOR THE QUARTER ENDED 30 SEPTEMBER, 2003
IN AUSTRALIAN DOLLARS
News Corporation Reports First Quarter Operating Income of A$1.1
Billion, a 10% Increase, on Revenue Growth of 2%; Net Profit before
Other Items Doubles to A$589 Million; Net Profit Increases A$349
Million to A$644 Million
QUARTER HIGHLIGHTS
-- Filmed Entertainment operating income more than doubles on
robust home entertainment sales of film and television titles
as well as strong syndication contributions.
-- Sustained ratings and advertising growth at Regional Sports
Networks and Fox News Channel drives 13% operating income
growth on a US$ basis at Cable Network Programming.
-- Television Stations increase market share, grow operating
income 7% in local currency terms; STAR delivers another
quarter of profits; overall Television segment down due to the
inclusion of American Idol in the quarter a year ago.
-- Print businesses report higher earnings contributions in
aggregate led by circulation revenue gains in U.K. newspapers,
advertising demand in Australian newspapers and increased page
volume at free-standing inserts.
SYDNEY, Australia--(BUSINESS WIRE)--Nov. 6, 2003--The News
Corporation Limited (ASX: NCP, NCPDP) today reported
first quarter consolidated revenues of A$7.1 billion, a 2% increase
over the A$6.9 billion reported in the prior year, and consolidated
operating income of A$1.1 billion. These results, representing a 10%
increase over the A$996 million reported a year ago were achieved
despite the inclusion of A$178 million in losses from SKY Italia in
the current quarter. The year-on-year operating income growth was
driven primarily by a two-fold increase at Filmed Entertainment as
well as a 50% increase at the Newspaper segment partially offset by
the unfavourable impact of the strong Australian dollar. Net profit
for the first quarter was A$644 million, a A$349 million increase over
the A$295 million reported in the first quarter a year ago.
Commenting on the results, Chairman and Chief Executive Rupert
Murdoch said:
"The unparalleled growth we delivered during the first quarter -
our seventh consecutive quarter of double-digit earnings increases -
is a clear demonstration of the strength we are enjoying across our
balanced collection of businesses. Operating income growth on a US$
basis of 31%, on revenue growth of 22%, was generated by increases at
nearly every operating segment: at our film and television production
businesses, which continue to capitalise on the expanding home
entertainment market; at our cable channels, which have benefited from
sustained viewership gains; at our television stations, which have
expanded market share; and at STAR, which achieved its first-ever
first-quarter profit. In the past quarter, we also exceeded our high
expectations for our global pay-TV platforms - including SKY Italia,
where subscriber additions are well ahead of plan, and BSkyB, which
passed the 7 million digital subscriber mark several months ahead of
schedule. Overall, the first quarter has given us a great start to the
fiscal year, and we are well on our way to meeting our growth forecast
for 2004."
MANAGEMENT REVIEW OF PERFORMANCE
The Statement of Financial Performance, Statement of Financial
Position, Statement of Cash Flows and Supplemental Financial Data for
the three months ended 30 September are attached. The following
commentary is made in respect to those statements, including an
analysis of certain information contained therein.
Net Profit Attributable to Members of the Parent Entity
The reported net profit attributable to members of the parent
entity consisted of the following items:
3 Months Ended
30 September,
2003 2002
---------- -----
A$ Millions (except
per share amounts)
Revenue A$ 7,081 A$ 6,931
---------- ---------
Operating income 1,095 996
Associated entities 87 (174)
Interest expense, net (173) (225)
Exchangeable securities expense (28) (23)
---------- ---------
Profit before income tax expense, outside equity
interest and other items 981 574
Income tax expense (303) (178)
Outside equity interest (89) (101)
---------- ---------
Net profit before other items 589 295
---------- ---------
Other group items, net of tax and outside equity
interest 55 -
---------- ---------
Net profit attributable to members of the parent
entity A$ 644 A$ 295
========== =========
Earnings per share (diluted) on net profit before
other items, net A$ 0.111 A$ 0.055
========== =========
Weighted average number of shares outstanding in
millions (diluted) 5,194 5,127
========== =========
The following commentary discusses the major components of these
results.
Consolidated Operating Income 3 Months Ended
30 September,
2003 2002
-------- --------
A$ Millions
Filmed Entertainment A$ 499 A$ 181
Television 273 343
Cable Network Programming 203 214
Direct Broadcast Satellite Television(*) (178) -
Magazines & Inserts 88 92
Newspapers 155 103
Book Publishing 90 106
Other (35) (43)
-------- --------
Consolidated Operating Income A$1,095 A$ 996
======== ========
(*) New segment reflecting the results of SKY Italia, consolidated
as of 1 May, 2003
First quarter net earnings from associated entities were A$87
million versus losses of A$174 million in the same period a year ago.
The year-over-year improvements were primarily due to contributions
from BSkyB, for which earnings were not reflected in prior year's
quarter, and a comparatively favourable impact from foreign currency
fluctuations at Sky Brasil. The inclusion of Stream's losses also
affected the first quarter results a year ago. A detailed discussion
of the components of associated entities' results is provided later in
the release.
First quarter net profit before other items increased to A$589
million (A$0.111 per share) versus A$295 million (A$0.055 per share)
in the prior year, primarily due to higher consolidated operating
income and improved associated entities results. The Company reported
income from other items in the quarter of A$55 million primarily
reflecting a gain from the sale of SkyPerfecTV! shares.
The following commentary is discussed primarily in U.S. dollars
REVIEW OF OPERATING RESULTS
FILMED ENTERTAINMENT
The Filmed Entertainment segment reported first quarter operating
income of US$328 million, a US$228 million increase over the US$100
million reported in the same period a year ago. The substantial growth
primarily reflects increased contributions from the worldwide home
entertainment release of film and television titles and higher
syndication profits from Twentieth Century Fox Television (TCFTV).
Current quarter film results were largely driven by the worldwide
home entertainment performances of Daredevil and Phone Booth combined
with strong worldwide home entertainment, pay-TV and free-TV
contributions from various catalog titles. These contributions were
partially offset by the worldwide theatrical launch costs for the
successful release of League of Extraordinary Gentlemen, which has
grossed over US$170 million in worldwide box office to date. The first
quarter a year ago included the worldwide home entertainment
performances of Shallow Hal, Behind Enemy Lines and catalog titles.
At TCFTV, earnings grew year-on-year primarily reflecting higher
syndication profits from the initial releases of Angel and Judging Amy
as well as increased contributions from M*A*S*H. Increased DVD sales
of television series, most notably from The Simpsons, Buffy the
Vampire Slayer and 24, also contributed to the year-on-year growth.
TELEVISION
The Television segment reported first quarter operating income of
US$179 million versus US$188 million a year ago. Continued profit
growth at the Fox Television Stations and STAR was offset by ratings
declines at the FOX Broadcasting Company versus the first quarter last
year, which included American Idol.
Fox Television Stations (FTS) first quarter operating income grew
7% over the same period a year ago as market share gains more than
offset a decline in political spending and the non-recurrence of
American Idol on the broadcast network in the current quarter. Current
year earnings growth was also fueled by margin expansion primarily
from lower local programming and promotional costs as well as duopoly
savings versus the first quarter of fiscal 2003.
At the FOX Broadcasting Company (FBC), first quarter operating
losses increased as improved advertising pricing was more than offset
by cancellation costs for several series and projects as well as a 20%
decline in primetime ratings versus the first quarter a year ago which
included the record-breaking performance of American Idol. During the
quarter, FBC launched several new series, including The O.C., which
gained audience share every week following its August premiere and was
the highest-rated new scripted show of the summer among Adults 18-49.
Subsequent to quarter-end, primetime ratings have improved with the
current broadcast season's ratings up 15% compared to a year ago led
by the strength of post-season Major League Baseball and new season
series premieres.
STAR, bolstered by a 20% increase in revenues, delivered positive
operating income for the first time in this traditionally soft
quarter. Revenue gains were primarily driven by advertising and
subscription growth at STAR Plus, which on average continues to
deliver 48 of the top 50 programs in India, as well as increased
advertising revenue from STAR Mandarin Movies, the number one cable
channel in Taiwan.
CABLE NETWORK PROGRAMMING
Cable Network Programming reported first quarter operating income
of US$133 million, an improvement of US$15 million over last year's
results. The 13% growth reflects strong revenue gains at the Fox News
Channel and the Regional Sports Networks, slightly offset by higher
programming costs at the FX Channel.
Fox News Channel (FNC) reported operating income growth of 14% in
the first quarter as strong revenue growth, primarily from increased
ad sales, more than offset slightly higher costs associated with
coverage of the war in Iraq and the California recall election. FNC
was the only cable news channel to increase its viewership during the
quarter, with growth of 14% in primetime and 16% on a 24-hour basis
compared to the first quarter a year ago.
Fox Cable Networks' (including the Regional Sports Networks
(RSNs), the FX Channel (FX) and SPEED Channel) operating profit
increased 4% for the quarter driven by double-digit revenue growth at
the RSNs reflecting DTH subscriber additions, higher affiliate rates
and increased advertising sales. At FX, affiliate revenue growth from
an expanded subscriber base was offset by increased programming costs
for original programming and charges related to the cancellations of
Lucky and Orlando Jones. Investment in original programming continues
to drive viewership gains with first quarter viewership among
households and Adults 18-49 up nearly 20% versus the same period a
year ago, led by Nip/Tuck, the highest rated new series on basic cable
during calendar 2003.
DIRECT BROADCAST SATELLITE TELEVISION
On 30 April, 2003 the Company, along with Telecom Italia,
completed the previously announced acquisition of the Italian pay-TV
business Telepiu from Vivendi Universal and combined it with Stream.
News Corporation now owns 80.1% of the combined entity, SKY Italia,
whose results comprise this new segment. During the first quarter, SKY
Italia reported an operating loss of US$117 million on revenues of
US$264 million while adding nearly 300,000 new subscribers. 75% of the
new subscribers during the quarter opted for a premium-programming
tier including movies and sports programming increasing monthly ARPU
for residential subscribers. At quarter end the digital subscribers
totaled approximately 2.3 million.
MAGAZINES AND INSERTS
The Magazines and Inserts segment reported first quarter operating
income of US$58 million, a 14% increase versus the same period a year
ago. The improvement was primarily driven by higher contributions from
the Free Standing Inserts division, principally from increased demand
for packaged goods pages, partially offset by lower contributions from
the InStore division.
NEWSPAPERS
The Newspaper segment reported first quarter operating income of
US$102 million, up 79% versus the same period a year ago reflecting
circulation revenue increases in the U.K. combined with advertising
strength in Australia.
The U.K. newspaper group's first quarter operating income more
than doubled in local currency terms compared to a year ago, primarily
driven by circulation revenue gains combined with a slight increase in
advertising. Circulation revenue growth was achieved across all
titles, with the largest increase at The Sun, where reduced cover
price initiatives during the first quarter a year ago adversely
impacted results.
The Australian newspaper group reported a 6% increase in operating
income in local currency terms, driven by an 8% increase in
advertising revenue over a year ago and a slight increase in
circulation revenue. Advertising growth was primarily fueled by
display advertising with strong growth in national display and
continued momentum in the retail and real estate categories.
Classified advertising also saw steady growth, with improvement across
all categories. The growth in advertising revenue for the quarter was
partially offset by the timing of various marketing and editorial
initiatives.
In the United States, The New York Post continued to grow its
circulation at a pace unmatched by any other major American newspaper.
Now the seventh-largest daily newspaper in the country, the Post has
achieved double-digit circulation growth in each of the last six
quarters.
BOOK PUBLISHING
HarperCollins reported operating income of US$59 million during
the quarter versus US$58 million in the same period a year ago. The
increased quarterly results were primarily driven by the continued
success of Zondervan's blockbuster The Purpose Driven Life as well as
Lemony Snicket's The Slippery Slope, Dennis Lehane's Mystic River,
David Beckham's autobiography and Dr. Atkins' New Diet Revolution.
During the quarter, HarperCollins had 30 books on The New York Times
bestseller lists including three titles that reached the number one
spot.
OTHER MATTERS
Subsequent to quarter end, the Company announced it had reached an
agreement in principle for the sale of the Los Angeles Dodgers. The
agreement is subject to Major League Baseball approval and has been
forwarded to Major League Baseball's ownership committee for review
and recommendation to the other club owners, who will then vote on the
proposed sale.
REVIEW OF ASSOCIATED ENTITIES RESULTS
First quarter net earnings from associated entities were A$87
million versus losses of A$174 million in the same period a year ago.
The year over year improvements were primarily due to contributions
from BSkyB, for which earnings were not reflected in prior year's
quarter, and a comparatively favourable impact from foreign currency
fluctuations at Sky Brasil. The inclusion of Stream's losses also
affected the first quarter results a year ago.
The Company's share of associated entities' earnings (losses) is
as follows:
3 Months Ended
30 September,
% Owned 2003 2002
------- ------- -----
US$ Millions
Sky Brasil 49.7% (a) (8) (67)
Innova - Mexico 30.0% (10) (8)
FOXTEL 25.0% (3) (2)
Stream 50.0% (b) - (39)
Fox Sports Cable Networks Various 9 12
ESPN STAR Sports 50.0% 1 1
Other Associates Various(c)(d) 68 7
------- -------
Total associated entities' earnings
(losses) $ 57 $ (96)
------- -------
Total associated entities' earnings
(losses) A$ 87 A$(174)
======= =======
Further details on the associated entities follow.
(a) Represents the Company's economic interest, which was 43.9% as
of 30 September, 2002. The Company continues to hold a 36%
equity interest in Sky Brasil.
(b) The Company's share of Stream's losses was included as part of
associated entities from 1 April, 2002 through 30 April, 2003,
when it was merged with Telepiu to form the consolidated
entity SKY Italia.
(c) Primarily comprising BSkyB, Gemstar-TV Guide International,
Independent Newspapers, and Queensland Press.
(d) The Company's investment basis in BSkyB was negative from 31
December, 2001 through 11 November, 2002. Accordingly, the
Company's share of BSkyB's results was not recognised during
that period.
Sky Brasil (in US$)
-------------------- 3 Months Ended
30 September,
2003 2002
---------- ---------
Millions (except
subscribers)
Revenues (in local currency) R$ 162 R$ 130
Revenues $ 55 $ 42
Operating income (loss) 3 (4)
Net loss $ (17) $ (157)
========== =========
News' reportable 49.7%/43.9% share(in US$) $ (8) $ (67)
========== =========
Net Debt (excluding capitalised leases) $ 199 $ 208
Ending Subscribers 772,000 704,000
Sky Brasil's revenues grew 25% in local currency terms compared to
prior year primarily driven by a higher subscriber base and increased
average revenue per subscriber. The revenue growth for the quarter was
partly offset by higher programming costs, mainly relating to higher
subscribers, and increased marketing costs due to new campaigns to
grow the subscriber base. The decrease in net loss principally
reflects reduced foreign exchange losses as the decline of the
Brazilian Real decelerated during the quarter as compared to the same
period a year ago.
Innova (in US$) - Mexico
------------------------- 3 Months Ended
30 September,
2003 2002
----------- ---------
Millions (except
subscribers)
Revenues (in local currency) Ps. 909 Ps. 834
Revenues $ 85 $ 84
Operating income 12 7
Net loss $ (32) $ (28)
=========== =========
News' reportable 30% share (in US$) $ (10) $ (8)
=========== =========
Net Debt (excluding capitalised leases) $ 339 $ 358
Ending Subscribers 826,000 733,000
Innova's revenues grew 9% in local currency terms compared to
prior year primarily driven by a 13% increase in the subscriber base.
Operating income growth reflects lower depreciation and SG&A expenses.
The increase in net loss principally reflects the unfavourable impact
of foreign currency fluctuations due to the weakening of the Mexican
Peso on U.S. dollar denominated liabilities during the quarter as
compared to the same period a year ago.
FOXTEL (in A$)
---------------- 3 Months Ended
30 September,
2003 2002
------------ ---------
Millions (except
subscribers)
Revenues A$ 182 A$ 138
Operating loss (27) (24)
Net loss A$ (18) A$ (17)
============ =========
News' reportable 25% share (in US$) $ (3) $ (2)
============ =========
Ending Subscribers (including Optus) 1,068,000 805,000
FOXTEL's revenues for the quarter increased 32% principally due to
the inclusion of Optus wholesale subscribers as of 1 December, 2002,
an increase of 17% in satellite subscribers compared to a year ago and
higher average revenue per subscriber. Net loss for the quarter
increased A$1 million against the prior year as the increased
subscriber revenues were more than offset by the inclusion of Optus
license fee costs, an intensified subscriber acquisition plan, the
development of a future digital service and higher depreciation
expense.
Fox Sports Cable Networks(*)(in US$)
------------------------------------ 3 Months Ended
30 September,
2003 2002
------------ -----------
Millions (except
subscribers)
News' reportable share $ 9 $ 12
============ ===========
Ending Subscribers 45,056,000 44,410,000
The decrease in net income for the quarter primarily reflects the
decline in the results at National Sports Partners resulting from
increased programming costs, partly offset by the effect of cost
savings at the Metro Channels and Madison Square Garden.
(*) Various associated interests ranging from 20 percent to 50
percent, primarily comprising Regional Programming Partners
(including Madison Square Garden), Fox Sports Bay Area, Fox
Sports Chicago, National Sports Partners and National
Advertising Partners.
ESPN STAR Sports (in US$) - Asia
--------------------------------- 3 Months Ended
30 September,
2003 2002
---------------- --------
Millions
Revenues $ 34 $ 37
Operating income 2 5
Net income $ 1 $ 3
================ ========
News' reportable 50% share $ 1 $ 1
================ ========
Operating income decreased US$3 million principally due to lower
advertising revenues from England Cricket partially offset by lower
channel costs associated with the event.
FOREIGN EXCHANGE RATES
Average foreign exchange rates used in the year-to-date profit
results are as follows:
3 Months Ended
30 September,
2003 2002
-------- ------
Australian Dollar/U.S Dollar 0.66 0.55
U.K. Pounds Sterling/U.S. Dollar 1.61 1.55
Euro/U.S. Dollar 1.13 0.98
To receive a copy of this press release through the Internet,
access News Corp's corporate Web site located at
http://www.newscorp.com
Audio from News Corp's conference call with analysts on the first
quarter results can be heard live on the Internet at 9:00 a.m. Eastern
Summer (Australia) Time today. To listen to the call, visit
http://www.newscorp.com
Cautionary Statement Concerning Forward-Looking Statements
This document contains certain "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of 1995.
These statements are based on management's views and assumptions
regarding future events and business performance as of the time the
statements are made. Actual results may differ materially from these
expectations due to changes in global economic, business, competitive
market and regulatory factors. More detailed information about these
and other factors that could affect future results is contained in our
filings with the Securities and Exchange Commission. The
"forward-looking statements" included in this document are made only
as of the date of this document and we do not have any obligation to
publicly update any "forward-looking statements" to reflect subsequent
events or circumstances, except as required by law.
STATEMENT OF FINANCIAL PERFORMANCE 3 Months Ended
Note 30 September,
2003 2002
-------------------
A$ Millions (except
per share amounts)
Sales revenue 1 A$ 7,081 A$ 6,931
Operating expenses (5,986) (5,935)
---------- ---------
Operating income 1 1,095 996
Net profit (loss) from associated entities 87 (174)
Borrowing costs (225) (277)
Interest income 52 52
---------- ---------
Net borrowing costs (173) (225)
Exchangeable securities expense (28) (23)
Other items before income tax, net 93 -
---------- ---------
Profit from ordinary activities before income
tax 1,074 574
---------- ---------
Income tax expense on:
Ordinary activities before other items (303) (178)
Other items (33) -
---------- ---------
Net income tax expense (336) (178)
---------- ---------
Net profit from ordinary activities after tax 738 396
Net profit attributable to outside equity
interests (94) (101)
----------------------------------------------------------------------
Net Profit Attributable to Members of the
Parent Entity A$ 644 A$ 295
----------------------------------------------------------------------
Net exchange gains (losses) recognised directly
in equity (576) 1,170
---------- ---------
Total change in equity other than those
resulting from transactions with owners as
owners A$ 68 A$ 1,465
========== =========
Diluted earnings per share on net profit
attributable to members of the parent entity
Ordinary shares A$ 0.109 A$ 0.049
Preferred limited voting ordinary shares A$ 0.130 A$ 0.059
Ordinary and preferred limited voting ordinary
shares A$ 0.122 A$ 0.055
STATEMENT OF FINANCIAL POSITION 30 September June 30,
2003 2003
--------------------
ASSETS A$ Millions
Current Assets
Cash A$ 7,267 A$ 6,746
Cash on deposit 401 -
Receivables 6,015 5,701
Inventories 2,167 1,931
Other 589 483
----------- ---------
Total Current Assets 16,439 14,861
----------- ---------
Non-Current Assets
Cash on deposit - 698
Receivables 1,338 1,219
Investments in associated entities 5,568 5,526
Other investments 960 1,195
Inventories 4,105 4,103
Property, plant and equipment 6,112 6,299
Publishing rights, titles and television
licenses 32,138 32,724
Goodwill 363 377
Other 714 745
----------- ---------
Total Non-Current Assets 51,298 52,886
----------- ---------
Total Assets A$ 67,737 A$67,747
=========== =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Interest bearing liabilities A$ 415 A$ 33
Payables 8,439 8,298
Tax liabilities 771 714
Provisions 410 258
----------- ---------
Total Current Liabilities 10,035 9,303
----------- ---------
Non-Current Liabilities
Interest bearing liabilities 12,640 12,396
Payables 3,550 3,545
Tax liabilities 844 666
Provisions 1,072 1,032
----------- ---------
Total Non-Current Liabilities Excluding
Exchangeable Securities 18,106 17,639
----------- ---------
Exchangeable securities 2,063 2,084
----------- ---------
Total Liabilities 30,204 29,026
Shareholders' Equity
Contributed equity 28,448 28,427
Reserves 2,573 2,760
Retained profits 1,239 1,137
----------- ---------
Shareholders' equity attributable to members of
the parent entity 32,260 32,324
Outside equity interests in controlled entities 5,273 6,397
----------- ---------
Total Shareholders' Equity 37,533 38,721
----------- ---------
Total Liabilities and Shareholders' Equity A$ 67,737 A$67,747
=========== =========
STATEMENT OF CASH FLOWS 3 Months Ended 30
September,
2003 2002
-----------------
Operating activity A$ Millions
Net profit attributable to members of the parent
entity A$ 644 A$ 295
Adjustment for non-cash and non-operating
activities:
Equity earnings, net (85) 176
Outside equity interest 89 101
Depreciation and amortisation 219 185
Other items, net (55) -
Change in assets and liabilities:
Receivables (628) (213)
Inventories (279) (517)
Payables 394 143
Other liabilities 260 39
-------- ---------
Cash provided by operating activity 559 209
Investing and other activity
Property, plant and equipment (126) (160)
Acquisitions, net of cash acquired (63) (787)
Investments in associated entities (46) (376)
Other investments (45) (7)
Proceeds from sale of non-current assets 361 48
-------- ---------
Cash provided by (used in) investing activity 81 (1,282)
Financing activity
Repayment of debt and exchangeable securities (288) (1,874)
Decrease in cash on deposit 282 -
Issuance of shares 21 2
Dividends paid (13) (4)
Leasing and other finance costs - (2)
-------- ---------
Cash provided by (used in) financing activity 2 (1,878)
-------- ---------
Net increase (decrease) in cash 642 (2,951)
Opening cash balance 6,746 6,337
Exchange movement on opening balance (121) 212
-------- ---------
Closing cash balance A$7,267 A$ 3,598
======== =========
Note 1 - SEGMENT DATA 3 Months Ended
30 September,
BY GEOGRAPHIC AREAS 2003 2002
---------------------
A$ Millions
Revenues
United States A$ 5,043 A$ 5,250
Europe 1,413 1,073
Australasia 625 608
----------- ----------
A$ 7,081 A$ 6,931
=========== ==========
Operating Income
United States A$ 1,051 A$ 850
Europe (38) 102
Australasia 82 44
----------- ----------
A$ 1,095 A$ 996
=========== ==========
BY INDUSTRY SEGMENT
Revenues
Filmed Entertainment A$ 1,901 A$ 1,604
Television 1,540 1,860
Cable Network Programming 955 1,007
Direct Broadcast Satellite Television(*) 402 -
Magazines and Inserts 339 353
Newspapers 1,125 1,103
Book Publishing 528 630
Other 291 374
----------- ----------
A$ 7,081 A$ 6,931
=========== ==========
Operating Income
Filmed Entertainment A$ 499 A$ 181
Television 273 343
Cable Network Programming 203 214
Direct Broadcast Satellite Television(*) (178) -
Magazines and Inserts 88 92
Newspapers 155 103
Book Publishing 90 106
Other (35) (43)
----------- ----------
A$ 1,095 A$ 996
=========== ==========
(*) New segment reflecting the results of SKY Italia, con
solidated as of 1 May, 2003.
Note 2 - SUPPLEMENTAL FINANCIAL DATA
The Company considers net profit before other items to be an
important indicator of the Company's operating performance on a
consolidated basis. Net profit before other items, defined as net
profit attributable to members of the parent entity before other items
related to the Company and associated entities, net of applicable
income tax expenses and outside equity interests, eliminates the
effect of transactions that are considered significant by reason of
their size, nature or effect on the Company's financial performance
for the year. Net profit before other items, which is the information
reported to and used by the Company's chief decision maker for the
purpose of making decisions about the allocation of resources to
segments and assessing their performance, should be considered in
addition to, not as a substitute for the Company's operating income,
net profit attributable to members of the parent entity, cash flows
and other measures of financial performance prepared in accordance
with generally accepted accounting principles in Australia. Net profit
before other items does not reflect cash available to fund
requirements, and the items excluded from net profit before other
items, such as other revenues and expenses, are significant components
in assessing the Company's financial performance.
The following table reconciles certain components of net profit
attributable to members of the parent entity as presented on page 2 of
this release to the presentation required under Australian GAAP as
required by Australian Accounting Standard AASB 1018 "Statement of
Financial Performance" on page 11 of this release.
3 Months Ended
30 September,
2003 2002
---------------
A$ Millions
Total other items (page 2) A$ 55 A$ -
Reclassification of other items - associated
Entities - -
Reclassification of income tax and net profit
attributable to outside equity interest 38 -
-------- -------
Other items before income tax, net (page 11) A$ 93 A$ -
======== =======
Income tax expense (page 2) A$ (303) A$(178)
Reclassification of income tax expense on
other items (33) -
-------- -------
Net income tax expense (page 11) A$ (336) A$(178)
======== =======
SUPPLEMENTAL FINANCIAL DATA (continued)
3 Months Ended
30 September,
2003 2002
------------------
A$ Millions
Outside equity interest (page 2) A$ (89) A$ (101)
Reclassification of outside equity interest on
other items, net (5) -
---------- --------
Net profit attributable to outside equity
interest (page 11) A$ (94) A$ (101)
========== ========
Net profit before other items (page 2) A$ 589 A$ 295
Other items before income tax, net 93 -
Reclassification of income tax and net profit
attributable to outside equity interest (38) -
---------- --------
Net profit attributable to members of the parent
entity (page 11) A$ 644 A$ 295
========== ========
Earnings per share on net profit before other
items, net (page 2) A$ 0.111 A$0.055
Earnings per share on other items before income
tax, net 0.018 -
Earnings per share on reclassification of income
tax and net profit attributable to outside
equity interest (0.007 ) -
---------- --------
Diluted earnings per share on net profit
attributable to members of the parent entity
(page 11) A$ 0.122 A$0.055
========== ========
CONTACT: News Corporation
Investor Relations:
Reed Nolte, 212-852-7092
or
Press Inquiries:
Andrew Butcher, 212-852-7070
EXHIBIT B
News Corporation
__________________________________________________
EARNINGS RELEASE FOR THE QUARTER ENDED
SEPTEMBER 30, 2003 IN U.S. DOLLARS PREPARED FOR THE U.S. MARKET. AUSTRALIAN
READERS SHOULD REFER TO THE AUSTRALIAN DOLLAR EARNINGS RELEASE
News Corporation Reports First Quarter Operating Income of $719
Million, a 31% Increase, on Revenue Growth of 22%
Net Profit before Other Items More Than Doubles to $386 Million;
Net Profit Increases $260 Million to $422 Million
QUARTER HIGHLIGHTS
-- Filmed Entertainment operating income more than triples on
robust home entertainment sales of film and television titles
as well as strong syndication contributions.
-- Sustained ratings and advertising growth at Regional Sports
Networks and Fox News Channel drives 13% operating income
growth at Cable Network Programming.
-- Television Stations increase market share, grow operating
income 7%; STAR delivers another quarter of profits; overall
Television segment down slightly due to the inclusion of
American Idol in the quarter a year ago.
-- All print businesses report higher earnings contributions led
by circulation revenue gains in U.K. newspapers, advertising
demand in Australian newspapers and increased page volume at
free-standing inserts.
NEW YORK--(BUSINESS WIRE)--Nov. 5, 2003--The News Corporation
Limited (NYSE: NWS, NWS.A) today reported first quarter consolidated
revenues of $4.6 billion, a 22% increase over the $3.8 billion
reported in the prior year, and consolidated operating income
of $719 million. These results, representing a 31% increase over
the $548 million reported a year ago were achieved despite the
inclusion of $117 million in losses from SKY Italia in the current
quarter. The year-on-year operating income growth was driven
primarily by a three-fold increase at Filmed Entertainment as well as
double-digit increases at the Cable Network Programming, Newspapers
and Magazines and Inserts segments. Net profit for the first quarter
was $422 million, a $260 million increase over the $162 million
reported in the first quarter a year ago.
Commenting on the results, Chairman and Chief Executive Rupert
Murdoch said:
"The unparalleled growth we delivered during the first quarter -
our seventh consecutive quarter of double-digit earnings increases -
is a clear demonstration of the strength we are enjoying across our
balanced collection of businesses. Operating income growth of 31%, on
revenue growth of 22%, was generated by increases at nearly every
operating segment: at our film and television production businesses,
which continue to capitalize on the expanding home entertainment
market; at our cable channels, which have benefited from sustained
viewership gains; at our television stations, which have expanded
market share; and at STAR, which achieved its first-ever first-quarter
profit. In the past quarter, we also exceeded our high expectations
for our global pay-TV platforms - including SKY Italia, where
subscriber additions are well ahead of plan, and BSkyB, which passed
the 7 million digital subscriber mark several months ahead of
schedule. Overall, the first quarter has given us a great start to the
fiscal year, and we are well on our way to meeting our growth forecast
for 2004."
MANAGEMENT REVIEW OF PERFORMANCE
The Statement of Financial Performance, Statement of Financial
Position, Statement of Cash Flows and Supplemental Financial Data for
the three months ended September 30th are attached. The following
commentary is made in respect to those statements, including an
analysis of certain information contained therein.
Net Profit Attributable to Members of the Parent Entity
The reported net profit attributable to members of the parent
entity consisted of the following items:
3 Months Ended
September 30,
2003 2002
--------- ---------
US $ Millions (except
per ADR amounts)
Revenue $ 4,649 $ 3,813
--------- ---------
Operating income 719 548
Associated entities 57 (96)
Interest expense, net (114) (124)
Exchangeable securities expense (18) (13)
--------- ---------
Profit before income tax expense, outside
equity interest and other items 644 315
Income tax expense (199) (98)
Outside equity interest (59) (55)
--------- ---------
Net profit before other items 386 162
--------- ---------
Other group items, net of tax and outside
equity interest 36 -
--------- ---------
Net profit attributable to members of the
parent entity $ 422 $ 162
========= =========
Earnings per ADR (diluted) on net profit
before other items, net $ 0.29 $ 0.12
========= =========
Weighted average number of ADRs outstanding
in millions (diluted) 1,298 1,282
========= =========
The following commentary discusses the major components of these
results.
Consolidated Operating Income 3 Months Ended
September 30,
2003 2002
---------- ----------
US $ Millions
Filmed Entertainment $ 328 $ 100
Television 179 188
Cable Network Programming 133 118
Direct Broadcast Satellite Television* (117) -
Magazines & Inserts 58 51
Newspapers 102 57
Book Publishing 59 58
Other (23) (24)
---------- ----------
Consolidated Operating Income $ 719 $ 548
========== ==========
* New segment reflecting the results of SKY Italia, consolidated
as of May 1, 2003
First quarter net earnings from associated entities were $57
million versus losses of $96 million in the same period a year ago.
The year-over-year improvements were primarily due to contributions
from BSkyB, for which earnings were not reflected in prior year's
quarter, and a comparatively favorable impact from foreign currency
fluctuations at Sky Brasil. The inclusion of Stream's losses also
affected the first quarter results a year ago. A detailed discussion
of the components of associated entities' results is provided later in
the release.
First quarter net profit before other items increased to $386
million ($0.29 per ADR) versus $162 million ($0.12 per ADR) in the
prior year, primarily due to higher consolidated operating income and
improved associated entities results. The Company reported income from
other items in the quarter of $36 million primarily reflecting a gain
from the sale of SkyPerfecTV! shares.
REVIEW OF OPERATING RESULTS
FILMED ENTERTAINMENT
The Filmed Entertainment segment reported first quarter operating
income of $328 million, a $228 million increase over the $100 million
reported in the same period a year ago. The substantial growth
primarily reflects increased contributions from the worldwide home
entertainment release of film and television titles and higher
syndication profits from Twentieth Century Fox Television (TCFTV).
Current quarter film results were largely driven by the worldwide
home entertainment performances of Daredevil and Phone Booth combined
with strong worldwide home entertainment, pay-TV and free-TV
contributions from various catalog titles. These contributions were
partially offset by the worldwide theatrical launch costs for the
successful release of League of Extraordinary Gentlemen, which has
grossed over $170 million in worldwide box office to date. The first
quarter a year ago included the worldwide home entertainment
performances of Shallow Hal, Behind Enemy Lines and catalog titles.
At TCFTV, earnings grew year-on-year primarily reflecting higher
syndication profits from the initial releases of Angel and Judging Amy
as well as increased contributions from M*A*S*H. Increased DVD sales
of television series, most notably from The Simpsons, Buffy the
Vampire Slayer and 24, also contributed to the year-on-year growth.
TELEVISION
The Television segment reported first quarter operating income of
$179 million versus $188 million a year ago. Continued profit growth
at the Fox Television Stations and STAR was offset by ratings declines
at the FOX Broadcasting Company versus the first quarter last year,
which included American Idol.
Fox Television Stations (FTS) first quarter operating income grew
7% over the same period a year ago as market share gains more than
offset a decline in political spending and the non-recurrence of
American Idol on the broadcast network in the current quarter. Current
year earnings growth was also fueled by margin expansion primarily
from lower local programming and promotional costs as well as duopoly
savings versus the first quarter of fiscal 2003.
At the FOX Broadcasting Company (FBC), first quarter operating
losses increased as improved advertising pricing was more than offset
by cancellation costs for several series and projects as well as a 20%
decline in primetime ratings versus the first quarter a year ago which
included the record-breaking performance of American Idol. During the
quarter, FBC launched several new series, including The O.C., which
gained audience share every week following its August premiere and was
the highest-rated new scripted show of the summer among Adults 18-49.
Subsequent to quarter-end, primetime ratings have improved with the
current broadcast season's ratings up 15% compared to a year ago led
by the strength of post-season Major League Baseball and new season
series premieres.
STAR, bolstered by a 20% increase in revenues, delivered positive
operating income for the first time in this traditionally soft
quarter. Revenue gains were primarily driven by advertising and
subscription growth at STAR Plus, which on average continues to
deliver 48 of the top 50 programs in India, as well as increased
advertising revenue from STAR Mandarin Movies, the number one cable
channel in Taiwan.
CABLE NETWORK PROGRAMMING
Cable Network Programming reported first quarter operating income
of $133 million, an improvement of $15 million over last year's
results. The 13% growth reflects strong revenue gains at the Fox News
Channel and the Regional Sports Networks, slightly offset by higher
programming costs at the FX Channel.
Fox News Channel (FNC) reported operating income growth of 14% in
the first quarter as strong revenue growth, primarily from increased
ad sales, more than offset slightly higher costs associated with
coverage of the war in Iraq and the California recall election. FNC
was the only cable news channel to increase its viewership during the
quarter, with growth of 14% in primetime and 16% on a 24-hour basis
compared to the first quarter a year ago.
Fox Cable Networks' (including the Regional Sports Networks
(RSNs), the FX Channel (FX) and SPEED Channel) operating profit
increased 4% for the quarter driven by double-digit revenue growth at
the RSNs reflecting DTH subscriber additions, higher affiliate rates
and increased advertising sales. At FX, affiliate revenue growth from
an expanded subscriber base was offset by increased programming costs
for original programming and charges related to the cancellations of
Lucky and Orlando Jones. Investment in original programming continues
to drive viewership gains with first quarter viewership among
households and Adults 18-49 up nearly 20% versus the same period a
year ago, led by Nip/Tuck, the highest rated new series on basic cable
during calendar 2003.
DIRECT BROADCAST SATELLITE TELEVISION
On April 30th, 2003 the Company, along with Telecom Italia,
completed the previously announced acquisition of the Italian pay-TV
business Telepiu from Vivendi Universal and combined it with Stream.
News Corporation now owns 80.1% of the combined entity, SKY Italia,
whose results comprise this new segment. During the first quarter, SKY
Italia reported an operating loss of $117 million on revenues of $264
million while adding nearly 300,000 new subscribers. 75% of the new
subscribers during the quarter opted for a premium-programming tier
including movies and sports programming increasing monthly ARPU for
residential subscribers. At quarter end the digital subscribers
totaled approximately 2.3 million.
MAGAZINES AND INSERTS
The Magazines and Inserts segment reported first quarter operating
income of $58 million, a 14% increase versus the same period a year
ago. The improvement was primarily driven by higher contributions from
the Free Standing Inserts division, principally from increased demand
for packaged goods pages, partially offset by lower contributions from
the InStore division.
NEWSPAPERS
The Newspaper segment reported first quarter operating income of
$102 million, up 79% versus the same period a year ago reflecting
circulation revenue increases in the U.K. combined with advertising
strength in Australia.
The U.K. newspaper group's first quarter operating income more
than doubled in local currency terms compared to a year ago, primarily
driven by circulation revenue gains combined with a slight increase in
advertising. Circulation revenue growth was achieved across all
titles, with the largest increase at The Sun, where reduced cover
price initiatives during the first quarter a year ago adversely
impacted results.
The Australian newspaper group reported a 6% increase in operating
income in local currency terms, driven by an 8% increase in
advertising revenue over a year ago and a slight increase in
circulation revenue. Advertising growth was primarily fueled by
display advertising with strong growth in national display and
continued momentum in the retail and real estate categories.
Classified advertising also saw steady growth, with improvement across
all categories. The growth in advertising revenue for the quarter was
partially offset by the timing of various marketing and editorial
initiatives.
In the United States, The New York Post continued to grow its
circulation at a pace unmatched by any other major American newspaper.
Now the seventh-largest daily newspaper in the country, the Post has
achieved double-digit circulation growth in each of the last six
quarters.
BOOK PUBLISHING
HarperCollins reported operating income of $59 million during the
quarter versus $58 million in the same period a year ago. The
increased quarterly results were primarily driven by the continued
success of Zondervan's blockbuster The Purpose Driven Life as well as
Lemony Snicket's The Slippery Slope, Dennis Lehane's Mystic River,
David Beckham's autobiography and Dr. Atkins' New Diet Revolution.
During the quarter, HarperCollins had 30 books on The New York Times
bestseller lists including three titles that reached the number one
spot.
OTHER MATTERS
Subsequent to quarter end, the Company announced it had reached an
agreement in principle for the sale of the Los Angeles Dodgers. The
agreement is subject to Major League Baseball approval and has been
forwarded to Major League Baseball's ownership committee for review
and recommendation to the other club owners, who will then vote on the
proposed sale.
REVIEW OF ASSOCIATED ENTITIES RESULTS
First quarter net earnings from associated entities were $57
million versus losses of $96 million in the same period a year ago.
The year over year improvements were primarily due to contributions
from BSkyB, for which earnings were not reflected in prior year's
quarter, and a comparatively favorable impact from foreign currency
fluctuations at Sky Brasil. The inclusion of Stream's losses also
affected the first quarter results a year ago.
The Company's share of associated entities' earnings (losses) is
as follows:
3 Months Ended
September 30,
% Owned 2003 2002
--------- -------- --------
US $ Millions
Sky Brasil 49.7% (a) (8) (67)
Innova - Mexico 30.0% (10) (8)
FOXTEL 25.0% (3) (2)
Stream 50.0% (b) - (39)
Fox Sports Cable Networks Various 9 12
ESPN STAR Sports 50.0% 1 1
Other Associates Various (c)(d) 68 7
-------- --------
Total associated entities' earnings
(losses) $ 57 $ (96)
======== ========
Further details on the associated entities follow.
(a) Represents the Company's economic interest, which was 43.9% as
of September 30, 2002. The Company continues to hold a 36%
equity interest in Sky Brasil.
(b) The Company's share of Stream's losses was included as part of
associated entities from April 1, 2002 through April 30, 2003,
when it was merged with Telepiu to form the consolidated
entity SKY Italia.
(c) Primarily comprising BSkyB, Gemstar-TV Guide International,
Independent Newspapers, and Queensland Press.
(d) The Company's investment basis in BSkyB was negative from
December 31, 2001 through November 11, 2002. Accordingly, the
Company's share of BSkyB's results was not recognized during
that period.
Sky Brasil (in US$) 3 Months Ended
------------------- September 30,
2003 2002
---------- ----------
Millions (except
subscribers)
Revenues (in local currency) R$ 162 R$ 130
Revenues $ 55 $ 42
Operating income (loss) 3 (4)
Net loss $ (17) $ (157)
========== ==========
News' reportable 49.7%/43.9% share (in US$) $ (8) $ (67)
========== ==========
Net Debt (excluding capitalized leases) $ 199 $ 208
Ending Subscribers 772,000 704,000
Sky Brasil's revenues grew 25% in local currency terms compared to
prior year primarily driven by a higher subscriber base and increased
average revenue per subscriber. The revenue growth for the quarter was
partly offset by higher programming costs, mainly relating to higher
subscribers, and increased marketing costs due to new campaigns to
grow the subscriber base. The decrease in net loss principally
reflects reduced foreign exchange losses as the decline of the
Brazilian Real decelerated during the quarter as compared to the same
period a year ago.
Innova (in US$) - Mexico 3 Months Ended
---------------------------------------- September 30,
2003 2002
------------ -----------
Millions (except
subscribers)
Revenues (in local currency) Ps. 909 Ps. 834
Revenues $ 85 $ 84
Operating income 12 7
Net loss $ (32) $ (28)
============ ===========
News' reportable 30% share (in US$) $ (10) $ (8)
============ ===========
Net Debt (excluding capitalized leases) $ 339 $ 358
Ending Subscribers 826,000 733,000
Innova's revenues grew 9% in local currency terms compared to
prior year primarily driven by a 13% increase in the subscriber base.
Operating income growth reflects lower depreciation and SG&A expenses.
The increase in net loss principally reflects the unfavorable impact
of foreign currency fluctuations due to the weakening of the Mexican
Peso on U.S. dollar denominated liabilities during the quarter as
compared to the same period a year ago.
FOXTEL (in A$) 3 Months Ended
-------------- September 30,
2003 2002
------------- -----------
Millions (except
subscribers)
Revenues A$ 182 A$ 138
Operating loss (27) (24)
Net loss A$ (18) A$ (17)
============= ===========
News' reportable 25% share (in US$) $ (3) $ (2)
============= ===========
Ending Subscribers (including Optus) 1,068,000 805,000
FOXTEL's revenues for the quarter increased 32% principally due to
the inclusion of Optus wholesale subscribers as of December 1, 2002,
an increase of 17% in satellite subscribers compared to a year ago and
higher average revenue per subscriber. Net loss for the quarter
increased A$1 million against the prior year as the increased
subscriber revenues were more than offset by the inclusion of Optus
license fee costs, an intensified subscriber acquisition plan, the
development of a future digital service and higher depreciation
expense.
Fox Sports Cable Networks* (in US$) 3 Months Ended
------------------------------------------- September 30,
2003 2002
------------ ------------
Millions (except
subscribers)
News' reportable share $ 9 $ 12
============== ============
Ending Subscribers 45,056,000 44,410,000
The decrease in net income for the quarter primarily reflects the
decline in the results at National Sports Partners resulting from
increased programming costs, partly offset by the effect of cost
savings at the Metro Channels and Madison Square Garden.
* Various associated interests ranging from 20 percent to 50
percent, primarily comprising Regional Programming Partners
(including Madison Square Garden), Fox Sports Bay Area, Fox Sports
Chicago, National Sports Partners and National Advertising
Partners.
ESPN STAR Sports (in US$) - Asia 3 Months Ended
-------------------------------- September 30,
2003 2002
------- -------
Millions
Revenues $ 34 $ 37
Operating income 2 5
Net income $ 1 $ 3
======== =======
News' reportable 50% share $ 1 $ 1
======== =======
Operating income decreased $3 million principally due to lower
advertising revenues from England Cricket partially offset by lower
channel costs associated with the event.
FOREIGN EXCHANGE RATES
Average foreign exchange rates used in the year-to-date profit
results are as follows:
3 Months Ended
September 30,
2003 2002
------ ------
Australian Dollar/U.S Dollar 0.66 0.55
U.K. Pounds Sterling/U.S. Dollar 1.61 1.55
Euro/U.S. Dollar 1.13 0.98
To receive a copy of this press release through the Internet,
access News Corp's corporate Web site located at
http://www.newscorp.com
Audio from News Corp's conference call with analysts on the first
quarter results can be heard live on the Internet at 5:00 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.
STATEMENT OF FINANCIAL PERFORMANCE 3 Months Ended
Note September 30,
2003 2002
--------- --------
US $ Millions (except
per ADR amounts)
Sales revenue 1 $ 4,649 $ 3,813
Operating expenses (3,930) (3,265)
--------- ---------
Operating income 1 719 548
Net profit (loss) from associated entities 57 (96)
Borrowing costs (148) (152)
Interest income 34 28
--------- ---------
Net borrowing costs (114) (124)
Exchangeable securities expense (18) (13)
Other items before income tax, net 61 -
--------- ---------
Profit from ordinary activities before
income tax 705 315
--------- ---------
Income tax expense on:
Ordinary activities before other items (199) (98)
Other items (22) -
--------- ---------
Net income tax expense (221) (98)
--------- ---------
Net profit from ordinary activities after
tax 484 217
Net profit attributable to outside equity
interests (62) (55)
----------------------------------------------------------------------
Net Profit Attributable to Members of the
Parent Entity $ 422 $ 162
----------------------------------------------------------------------
Net exchange gains (losses) recognized
directly in equity 42 (8)
--------- ---------
Total change in equity other than those
resulting from transactions with owners as
owners $ 464 $ 154
========= =========
Diluted earnings per ADR on net profit
attributable to members of the parent
entity
Ordinary ADRs $ 0.28 $ 0.11
Preferred limited voting ordinary ADRs $ 0.34 $ 0.13
Ordinary and preferred limited voting
ordinary ADRs $ 0.32 $ 0.12
STATEMENT OF FINANCIAL POSITION September 30, June 30,
2003 2003
------------- ------------
ASSETS US $ Millions
Current Assets
Cash $ 4,916 $ 4,477
Cash on deposit 272 -
Receivables 4,069 3,784
Inventories 1,466 1,282
Other 398 321
------------- ------------
Total Current Assets 11,121 9,864
------------- ------------
Non-Current Assets
Cash on deposit - 463
Receivables 905 809
Investments in associated entities 3,767 3,667
Other investments 649 793
Inventories 2,777 2,723
Property, plant and equipment 4,135 4,180
Publishing rights, titles and television
licenses 21,741 21,719
Goodwill 246 250
Other 483 495
------------- ------------
Total Non-Current Assets 34,703 35,099
------------- ------------
Total Assets $ 45,824 $ 44,963
============= ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Interest bearing liabilities $ 281 $ 22
Payables 5,709 5,507
Tax liabilities 521 474
Provisions 277 171
------------- ------------
Total Current Liabilities 6,788 6,174
------------- ------------
Non-Current Liabilities
Interest bearing liabilities 8,551 8,227
Payables 2,402 2,353
Tax liabilities 571 442
Provisions 725 685
------------- ------------
Total Non-Current Liabilities Excluding
Exchangeable Securities 12,249 11,707
------------- ------------
Exchangeable securities 1,396 1,383
------------- ------------
Total Liabilities 20,433 19,264
Shareholders' Equity
Contributed equity 17,276 17,262
Reserves 1,975 1,685
Retained profits 2,573 2,506
------------- ------------
Shareholders' equity attributable to
members of the parent entity 21,824 21,453
Outside equity interests in controlled
entities 3,567 4,246
------------- ------------
Total Shareholders' Equity 25,391 25,699
------------- ------------
Total Liabilities and Shareholders' Equity $ 45,824 $ 44,963
============= ============
STATEMENT OF CASH FLOWS 3 Months Ended
September 30,
2003 2002
-------- --------
Operating activity US $ Millions
Net profit attributable to members of the parent
entity $ 422 $ 162
Adjustment for non-cash and non-operating
activities:
Equity earnings, net (56) 97
Outside equity interest 59 55
Depreciation and amortization 144 102
Other items, net (36) -
Change in assets and liabilities:
Receivables (425) (116)
Inventories (189) (282)
Payables 285 74
Other liabilities 176 21
-------- --------
Cash provided by operating activity 380 113
Investing and other activity
Property, plant and equipment (85) (87)
Acquisitions, net of cash acquired (42) (429)
Investments in associated entities (31) (205)
Other investments (31) (4)
Proceeds from sale of non-current assets 244 26
-------- --------
Cash provided by (used in) investing activity 55 (699)
Financing activity
Repayment of debt and exchangeable securities (195) (1,022)
Decrease in cash on deposit 191 -
Issuance of shares 14 1
Dividends paid (9) (2)
Leasing and other finance costs - (1)
-------- --------
Cash provided by (used in) financing activity 1 (1,024)
-------- --------
Net increase (decrease) in cash 436 (1,610)
Opening cash balance 4,477 3,574
Exchange movement on opening balance 3 (2)
-------- --------
Closing cash balance $ 4,916 $ 1,962
======== ========
Note 1 - SEGMENT DATA 3 Months Ended
September 30,
BY GEOGRAPHIC AREAS 2003 2002
--------- ---------
US $ Millions
Revenues
United States $ 3,311 $ 2,889
Europe 928 590
Australasia 410 334
--------- ---------
$ 4,649 $ 3,813
========= =========
Operating Income
United States $ 690 $ 468
Europe (25) 56
Australasia 54 24
--------- ---------
$ 719 $ 548
========= =========
BY INDUSTRY SEGMENT
Revenues
Filmed Entertainment $ 1,248 $ 882
Television 1,011 1,024
Cable Network Programming 627 554
Direct Broadcast Satellite Television* 264 -
Magazines and Inserts 222 194
Newspapers 739 607
Book Publishing 347 347
Other 191 205
--------- ---------
$ 4,649 $ 3,813
========= =========
Operating Income
Filmed Entertainment $ 328 $ 100
Television 179 188
Cable Network Programming 133 118
Direct Broadcast Satellite Television* (117) -
Magazines and Inserts 58 51
Newspapers 102 57
Book Publishing 59 58
Other (23) (24)
--------- ---------
$ 719 $ 548
========= =========
* New segment reflecting the results of SKY Italia, consolidated as
of May 1, 2003.
Note 2 - SUPPLEMENTAL FINANCIAL DATA
The Company considers net profit before other items to be an
important indicator of the Company's operating performance on a
consolidated basis. Net profit before other items, defined as net
profit attributable to members of the parent entity before other items
related to the Company and associated entities, net of applicable
income tax expenses and outside equity interests, eliminates the
effect of transactions that are considered significant by reason of
their size, nature or effect on the Company's financial performance
for the year. Net profit before other items, which is the information
reported to and used by the Company's chief decision maker for the
purpose of making decisions about the allocation of resources to
segments and assessing their performance, should be considered in
addition to, not as a substitute for the Company's operating income,
net profit attributable to members of the parent entity, cash flows
and other measures of financial performance prepared in accordance
with generally accepted accounting principles in Australia. Net profit
before other items does not reflect cash available to fund
requirements, and the items excluded from net profit before other
items, such as other revenues and expenses, are significant components
in assessing the Company's financial performance.
The following table reconciles certain components of net profit
attributable to members of the parent entity as presented on page 2 of
this release to the presentation required under Australian GAAP as
required by Australian Accounting Standard AASB 1018 "Statement of
Financial Performance" on page 11 of this release.
3 Months Ended
September 30,
2003 2002
--------- --------
US $ Millions
Total other items (page 2) $ 36 $ -
Reclassification of other items - associated
Entities - -
Reclassification of income tax and net profit
attributable to outside equity interest 25 -
--------- --------
Other items before income tax, net (page 11) $ 61 $ -
========= ========
Income tax expense (page 2) $ (199) $ (98)
Reclassification of income tax expense on
other items (22) -
--------- --------
Net income tax expense (page 11) $ (221) $ (98)
========= ========
SUPPLEMENTAL FINANCIAL DATA (continued)
3 Months Ended
September 30,
2003 2002
-------- -------
US $ Millions
Outside equity interest (page 2) $ (59) $ (55)
Reclassification of outside equity interest on
other items, net (3) -
------- -------
Net profit attributable to outside equity
interest (page 11) $ (62) $ (55)
======= =======
Net profit before other items (page 2) $ 386 $ 162
Other items before income tax, net 61 -
Reclassification of income tax and net profit
attributable to outside equity interest (25) -
------- -------
Net profit attributable to members of the parent
entity (page 11) $ 422 $ 162
======= =======
Earnings per ADR on net profit before other
items, net (page 2) $ 0.29 $ 0.12
Earnings per ADR on other items before income
tax, net 0.05 -
Earnings per ADR on reclassification of income
tax and net profit attributable to outside
equity interest (0.02) -
------- -------
Diluted earnings per ADR on net profit
attributable to members of the parent entity
(page 11) $ 0.32 $ 0.12
======= =======
CONTACT: The News Corporation Limited
(Investor Relations)
Reed Nolte, 212-852-7092
or (Press Inquiries)
Andrew Butcher, 212-852-7070