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News Corporation Reports Second Quarter Results For Fiscal 2014

Diluted net income per share available to News Corporation stockholders was $0.26 as compared to $2.42 in the prior year. Adjusted EPS were flat at $0.31 compared to the prior year.

Free cash flow available to News Corporation improved by $393 million in the six months ended December 31, 2013 to $217 million, from ($176) million in the prior year.

SEGMENT REVIEW
        For the three months ended     For the six months ended
December 31, December 31,
2013   2012   % Change 2013   2012   % Change
(in millions) (in millions)
Revenues:
News and Information Services $ 1,612 $ 1,772 (9 ) % $ 3,107 $ 3,438 (10 ) %
Cable Network Programming 110 53 ** 242 53 **
Digital Real Estate Services 103 87 18 % 193 168 15 %
Book Publishing 391 377 4 % 719 729 (1 ) %
Other   22     32   (31 ) %   49     66   (26 ) %
Total Revenues $ 2,238   $ 2,321   (4 ) % $ 4,310   $ 4,454   (3 ) %
 
Segment EBITDA:
News and Information Services $ 255 $ 292 (13 ) % $ 388 $ 418 (7 ) %
Cable Network Programming 53 19 ** 82 19 **
Digital Real Estate Services 55 46 20 % 99 81 22 %
Book Publishing 68 51 33 % 111 91 22 %
Other (a)   (104 )   (108 ) (4 ) %   (212 )   (220 ) (4 ) %
Total Segment EBITDA $ 327   $ 300   9   % $ 468   $ 389   20   %
 
** - Not meaningful
 
(a)   Other Segment EBITDA for the three and six months ended December 31, 2013 includes fees and costs, net of indemnification, related to the U.K. Newspaper Matters of $19 million and $36 million, respectively. Other Segment EBITDA for the three and six months ended December 31, 2012 includes fees and costs related to the U.K. Newspaper Matters of $49 million and $110 million, respectively.
 

News and Information Services

Segment revenues for the second quarter of fiscal 2014 decreased $160 million, or 9%, compared to the prior year. Australian newspapers revenues declined 17%, of which 10% is related to foreign currency, and accounted for the majority of the Segment revenue decline compared to the prior year. Total segment advertising revenues declined 10%, driven by the negative impact of foreign exchange coupled with weakness in the Australian market and the absence of results from LMG, partially offset by continued growth at News America Marketing led by its in-store business. Circulation and subscription revenues declined 7%, primarily due to continued decline in Institutional revenues at Dow Jones, the absence of results from LMG and lower print circulation volume, partially offset by cover price increases at The Sun in the U.K. and several Australian newspapers as well as higher subscription pricing at The Wall Street Journal and WSJ.com. Excluding the impact of divestitures and foreign exchange fluctuations, Segment revenues declined 4%.

Segment EBITDA decreased $37 million in the quarter, or 13%, as compared to the prior year. Results were impacted by continued revenue weakness in the Australian market and Dow Jones’ Institutional business coupled with the sale of LMG, partially offset by the absence of losses from The Daily and a favorable arbitration ruling at News UK. Total costs declined 8% driven by the impact of cost savings initiatives and lower production costs, as well as the sale of LMG, partially offset by increased promotional costs and sports rights acquisition costs. Excluding the impact of divestitures and foreign exchange fluctuations, Segment EBITDA decreased 8%.

Cable Network Programming

In the second quarter of fiscal 2014, revenues were $110 million and Segment EBITDA was $53 million. The increases relative to the prior year primarily reflect the consolidation of FOX SPORTS Australia beginning in November 2012.

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