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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

Stocks in this article: NWS NWSA

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 6 Months Ended
December 31, December 31,
2012       2011     2012     2011
US $ Millions
         
Segment Operating income before depreciation and amortization $ 1,913 $ 1,801 $ 3,612 $ 3,504
Depreciation and amortization (310 ) (281 ) (610 ) (575 )
Amortization of cable distribution investments   (23 )   (23 )   (44 )   (47 )
Total Segment Operating income 1,580 1,497 2,958 2,882
Impairment and restructuring charges (65 ) (36 ) (217 ) (127 )
Equity earnings of affiliates 174 142 364 263
Interest expense, net (266 ) (257 ) (533 ) (515 )
Interest income 37 29 68 65
Other, net   1,400     125     2,775     (5 )
Income from continuing operations before income tax expense $ 2,860   $ 1,500   $ 5,415   $ 2,563  
 
    For the Three Months Ended December 31, 2012
(US $ Millions)
Segment Operating            
income (loss) before Depreciation Amortization of Segment
depreciation and and cable distribution Operating income
amortization amortization investments (loss)
Cable Network Programming $ 1,013 $ (45 ) $ (23 ) $ 945
Filmed Entertainment 416 (33 ) - 383
Television 246 (22 ) - 224
Direct Broadcast Satellite Television 56 (76 ) - (20 )
Publishing 349 (115 ) - 234
Other   (167 )   (19 )   -     (186 )
Consolidated Total $ 1,913   $ (310 ) $ (23 ) $ 1,580  
 
               
For the Three Months Ended December 31, 2011
(US $ Millions)
Segment Operating
income (loss) before Depreciation Amortization of Segment
depreciation and and cable distribution Operating income
amortization amortization investments (loss)
Cable Network Programming $ 943 $ (38 ) $ (23 ) $ 882
Filmed Entertainment 416 (23 ) - 393
Television 210 (21 ) - 189
Direct Broadcast Satellite Television 84 (78 ) - 6
Publishing 324 (106 ) - 218
Other   (176 )   (15 )   -     (191 )
Consolidated Total $ 1,801   $ (281 ) $ (23 ) $ 1,497  
 
   
For the Six Months Ended December 31, 2012
(US $ Millions)
Segment Operating            
income (loss) before Depreciation Amortization of Segment
depreciation and and cable distribution Operating income
amortization amortization investments (loss)
Cable Network Programming $ 2,029 $ (87 ) $ (44 ) $ 1,898
Filmed Entertainment 849 (66 ) - 783
Television 423 (43 ) - 380
Direct Broadcast Satellite Television 151 (148 ) - 3
Publishing 521 (230 ) - 291
Other   (361 )   (36 )   -     (397 )
Consolidated Total $ 3,612   $ (610 ) $ (44 ) $ 2,958  
 
   
For the Six Months Ended December 31, 2011
(US $ Millions)
Segment Operating            
income (loss) before Depreciation Amortization of Segment
depreciation and and cable distribution Operating income
amortization amortization investments (loss)
Cable Network Programming $ 1,779 $ (75 ) $ (47 ) $ 1,657
Filmed Entertainment 802 (62 ) - 740
Television 364 (42 ) - 322
Direct Broadcast Satellite Television 277 (152 ) - 125
Publishing 541 (213 ) - 328
Other   (259 )   (31 )   -     (290 )
Consolidated Total $ 3,504   $ (575 ) $ (47 ) $ 2,882  
 

NOTE 2 – ADJUSTED NET INCOME AND ADJUSTED EPS

The Company uses 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”) to evaluate the performance of the Company’s operations exclusive of certain items that impact the comparability of results from period to period. The calculation of 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.

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