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

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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