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News Corporation Reports Second Quarter Earnings Per Share Of $1.01 On Net Income Attributable To Stockholders Of $2.38 Billion

"News Corporation’s fiscal second quarter performance reflects our strong momentum. Double-digit gains in our Cable and Television businesses, along with improvements in our Publishing segment, drove revenue and earnings growth even as we seized opportunities to invest in our core businesses for long-term and sustainable growth.

“The strategies we executed against in the quarter continue to bolster News Corporation's competitive position and enhance our ability to benefit from global demand for content, especially sports programming. As we make progress toward the proposed separation of our entertainment and publishing businesses later this year, I am confident in the future prospects for both businesses.”

____________________________________________________________

(1) Total segment operating income is a non-GAAP financial measure. See page 12 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 15 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 6 Months Ended
December 31, December 31,
2012       2011       2012       2011  
US $ Millions
 
Cable Network Programming $ 945 $ 882 $ 1,898 $ 1,657
Filmed Entertainment 383 393 783 740
Television 224 189 380 322
Direct Broadcast Satellite Television (20 ) 6 3 125
Publishing 234 218 291 328
Other   (186 )   (191 )   (397 )   (290 )
Total Segment Operating Income * $ 1,580   $ 1,497   $ 2,958   $ 2,882  
 

*

 

The three months ended December 31, 2012 and 2011 include $56 million and $87 million, respectively, of costs related to the ongoing investigations in the U.K. The three months ended December 31, 2012 include $23 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 $1,659 and $1,584 million in the three months ended December 31, 2012 and 2011, respectively.

 
The six months ended December 31, 2012 and 2011 include $123 million and $104 million, respectively, of costs related to the ongoing investigations in the U.K. The six months ended December 31, 2012 include $28 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 $3,109 and $2,986 million in the six months ended December 31, 2012 and 2011, respectively.
 

CABLE NETWORK PROGRAMMING

Cable Network Programming reported quarterly segment operating income of $945 million, a $63 million or 7% increase over the prior year quarter, driven by an 18% increase in revenue. Operating income contributions from the domestic channels increased 9%. Double-digit revenue growth at the Regional Sports Networks (“RSNs”), Fox News Channel, FX Network and National Geographic Channels was partially offset by increased programming costs, including expanded college football and Ultimate Fighting Championship (“UFC”) coverage, as well as higher costs at the RSNs related to the benefit recognized in the prior year as a result of the National Basketball Association (“NBA”) lockout. The Company’s international cable channels’ quarterly earnings contributions increased 3% from the same period a year ago, reflecting strong operating profit growth at the non-sports channels at Fox International Channels (“FIC”) and STAR, partially offset by the costs associated with the inaugural broadcasts of BCCI cricket and the adverse impact of the strengthened U.S. dollar.

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