News Q4 2010 Earnings Call Transcript

Bottom line, the company reported net income of $2.5 billion for this fiscal year and earnings per share of $0.97. This compares to a net loss of $3.4 billion or $1.29 per share reported a year ago, which included significant impairment charges.

For the year, we also generated strong free cash flow, $2.9 billion. This is 150% more than we reported last year.

Turning to the quarter. For the quarter segment operating income of $932 million was down slightly from the fourth quarter a year ago as double-digit growth in our Cable, Newspaper and Television segments was mostly offset by declines in other segments, particularly Film and SKY Italia. Bottom line, the company reported net income for the quarter of $875 million as compared to a loss of $203 million reported for the fourth quarter a year ago, which primarily relates to impairment charges. This year, fourth quarter results includes pretax gains of $212 million in Other, primarily from the sale of our Bulgarian TV station, impairment and restructuring charges of $217 million and $125 million in our share of a favorable litigation settlement at BSkyB. The fourth quarter a year ago included $680 million in pretax, impairment and other charges.

Excluding the net income effect of these items, adjusted earnings per share was $0.30 this quarter as compared to a similarly adjusted $0.19 in the fourth quarter of fiscal 2009. In addition, this quarter's net income includes approximately $312 million of non-cash tax benefits related to the recognition of certain prior year’s tax credits, which contributed $0.12 to our earnings per share in the quarter.

Now I'd like to provide some comments on a few of our businesses, and let's start with the Cable Networks.

Growth in our Cable Network segment continues to drive overall company results with fourth quarter operating income contributions up 31% on 15% higher revenues reflecting the strength of FOX News, the RSNs and our International Cable businesses. The primary drivers behind the year-over-year increases in the quarter were from the FOX News Channel and the RSNs, where their strong market positions led to ad revenue increasing by over 20% versus the fourth quarter a year ago, and affiliate fees continued their strong growth. Keep in mind that at this point, we’ve renegotiated all the original FOX News carriage deals with major cable and satellite distributors. Scheduled renewals will begin again at the end of this calendar year.

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