News Corporation Reports Second Quarter Results for Fiscal 2021
FISCAL 2021 SECOND QUARTER KEY FINANCIAL HIGHLIGHTS
-
Revenues were
$2.41 billion , a 3% decline compared to$2.48 billion in the prior year – Adjusted Revenues increased 2% compared to the prior year -
Net income of
$261 million compared to$103 million in the prior year -
Total Segment EBITDA was
$497 million compared to$355 million in the prior year -
Reported diluted EPS were
$0.39 compared to$0.14 in the prior year – Adjusted EPS were$0.34 compared to$0.18 in the prior year - Book Publishing Segment EBITDA increased 65% compared to the prior year, driven by strong revenue growth across every category
-
Move, operator of realtor.com®, reported 28% revenue growth and was a key driver of Segment EBITDA growth at the
Digital Real Estate Services segment -
Dow Jones reported 43% Segment EBITDA growth, driven by record digital advertising revenues and continued growth in digital subscriptions -
Subscription Video Services Segment EBITDA grew 77% as
Foxtel benefited from lower costs while reaching a record of more than 1.3 million paying OTT subscribers as of the quarter end
“The second quarter of fiscal 2021 was the most profitable quarter since the new
There was also a 77 percent rise in Segment EBITDA at the Subscription Video Services segment, where the exponential evolution at
Rapid expansion continued at Move, which accounted for about 80 percent of Segment EBITDA growth in the
In the
SECOND QUARTER RESULTS
The Company reported fiscal 2021 second quarter total revenues of
Net income for the quarter was
The Company reported second quarter Total Segment EBITDA of
Diluted net income per share attributable to
Adjusted EPS (as defined in Note 3) were
SEGMENT REVIEW |
|||||||||||||||||||||||||||
|
For the three months ended
|
|
For the six months ended
|
||||||||||||||||||||||||
|
2020 |
|
|
2019 |
|
|
% Change |
|
2020 |
|
|
2019 |
|
|
% Change |
||||||||||||
|
(in millions) |
|
Better/
|
|
(in millions) |
|
Better/
|
||||||||||||||||||||
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
$ |
339 |
|
|
|
$ |
294 |
|
|
|
15 |
|
% |
|
$ |
629 |
|
|
|
$ |
566 |
|
|
|
11 |
|
% |
Subscription Video Services |
511 |
|
|
|
501 |
|
|
|
2 |
|
% |
|
1,007 |
|
|
|
1,015 |
|
|
|
(1 |
) |
% |
||||
|
446 |
|
|
|
430 |
|
|
|
4 |
|
% |
|
832 |
|
|
|
812 |
|
|
|
2 |
|
% |
||||
|
544 |
|
|
|
442 |
|
|
|
23 |
|
% |
|
1,002 |
|
|
|
847 |
|
|
|
18 |
|
% |
||||
News Media(a) |
573 |
|
|
|
811 |
|
|
|
(29 |
) |
% |
|
1,060 |
|
|
|
1,578 |
|
|
|
(33 |
) |
% |
||||
Other |
1 |
|
|
|
1 |
|
|
|
— |
|
% |
|
1 |
|
|
|
1 |
|
|
|
— |
|
% |
||||
Total Revenues |
$ |
2,414 |
|
|
|
$ |
2,479 |
|
|
|
(3 |
) |
% |
|
$ |
4,531 |
|
|
|
$ |
4,819 |
|
|
|
(6 |
) |
% |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Segment EBITDA: |
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
$ |
142 |
|
|
|
$ |
118 |
|
|
|
20 |
|
% |
|
$ |
261 |
|
|
|
$ |
200 |
|
|
|
31 |
|
% |
Subscription Video Services |
124 |
|
|
|
70 |
|
|
|
77 |
|
% |
|
202 |
|
|
|
151 |
|
|
|
34 |
|
% |
||||
|
109 |
|
|
|
76 |
|
|
|
43 |
|
% |
|
181 |
|
|
|
125 |
|
|
|
45 |
|
% |
||||
|
104 |
|
|
|
63 |
|
|
|
65 |
|
% |
|
175 |
|
|
|
112 |
|
|
|
56 |
|
% |
||||
News Media |
66 |
|
|
|
66 |
|
|
|
— |
|
% |
|
44 |
|
|
|
73 |
|
|
|
(40 |
) |
% |
||||
Other |
(48 |
) |
|
|
(38 |
) |
|
|
(26 |
) |
% |
|
(98 |
) |
|
|
(85 |
) |
|
|
(15 |
) |
% |
||||
Total Segment EBITDA |
$ |
497 |
|
|
|
$ |
355 |
|
|
|
40 |
|
% |
|
$ |
765 |
|
|
|
$ |
576 |
|
|
|
33 |
|
% |
(a) |
In the fourth quarter of fiscal 2020, the Company revised the composition of its reportable segments to present the |
Revenues in the quarter increased
Move’s revenues in the quarter increased
In the quarter, revenues at REA Group increased
Subscription Video Services
Revenues in the quarter increased
As of
Broadcast subscriber churn in the quarter increased to 17.5% from 16.0% in the prior year, due to fewer promotions and the roll-off of lower value subscribers. Broadcast ARPU for the quarter increased 3% to
Segment EBITDA in the quarter increased
Revenues in the quarter increased
Circulation and subscription revenues increased
During the second quarter,
Advertising revenues decreased
Segment EBITDA for the quarter increased
Revenues in the quarter increased
News Media
Revenues in the quarter decreased
Circulation and subscription revenues increased
Advertising revenues decreased
In the quarter, Segment EBITDA was flat compared to the prior year, as higher cost savings at News
Digital revenues represented 31% of News Media segment revenues in the quarter, compared to 22% in the prior year, and represented 29% of the combined revenues of the newspaper mastheads. Digital subscribers and users across key properties within the News Media segment are summarized below:
-
Closing digital subscribers at News Corp Australia’s mastheads as of
December 31, 2020 were 738,300, compared to 566,600 in the prior year (Source: Internal data) -
The Times and
Sunday Times closing digital subscribers as ofDecember 31, 2020 were 335,000, compared to 320,000 in the prior year (Source: Internal data) -
The Sun ’s digital offering reached 130 million global monthly unique users inDecember 2020 , compared to 140 million in the prior year (Source: Google Analytics) -
New York Post ’s digital network reached 141 million unique users inDecember 2020 , compared to 95 million in the prior year (Source:Google Analytics)
CASH FLOW
The following table presents a reconciliation of net cash provided by operating activities to free cash flow available to
|
For the six months ended
|
||||||
|
2020 |
|
2019 |
||||
|
(in millions) |
||||||
Net cash provided by operating activities |
$ |
483 |
|
|
$ |
192 |
|
Less: Capital expenditures |
(173 |
) |
|
(237 |
) |
||
|
310 |
|
|
(45) |
|
||
Less: REA Group free cash flow |
(65 |
) |
|
(86 |
) |
||
Plus: Cash dividends received from REA Group |
32 |
|
|
35 |
|
||
Free cash flow available to |
$ |
277 |
|
|
$ |
(96 |
) |
Net cash provided by operating activities of
Free cash flow available to
Free cash flow available to
The Company considers free cash flow available to
OTHER ITEMS
COVID-19 Impact and Outlook
The ongoing impact of the COVID-19 pandemic and measures to prevent its spread continue to create significant economic volatility, uncertainty and disruption, affecting the Company’s businesses in a number of ways. The discussion below summarizes the effects on the Company’s businesses during the six months ended
Subscription Video Services: Foxtel’s revenue trends have been better than anticipated in the first half of fiscal 2021, with higher ARPU offsetting higher churn, resulting in lower year-over-year revenue declines in residential broadcast. Broadcast churn is expected to remain elevated due to the suspension of government stimulus payments and Foxtel’s ongoing emphasis on ARPU. In addition, higher average OTT subscribers through January should result in higher than expected OTT revenue for the full year. The ongoing disruption in operations at pubs and clubs from government imposed occupancy restrictions and lower occupancy at hotels throughout
Other: The Company expects costs to increase by at least
Dividends
The Company today declared a semi-annual cash dividend of
COMPARISON OF NON-GAAP TO
Adjusted Revenues, Total Segment EBITDA, Adjusted Total Segment EBITDA, Adjusted Segment EBITDA, adjusted net income attributable to
Conference call
News Corporation’s earnings conference call can be heard live at
Cautionary Statement Concerning Forward-Looking Statements
This document contains certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, statements regarding trends and uncertainties affecting the Company’s business, results of operations and financial condition, including expected impacts from the ongoing COVID-19 pandemic and related public health measures, the Company’s strategy and strategic initiatives, including potential acquisitions, investments and dispositions, and the outcome of contingencies such as litigation and investigations. These statements are based on management’s views and assumptions regarding future events and business performance as of the time the statements are made. Actual results may differ materially from these expectations due to the risks and uncertainties related to COVID-19 and the risks, uncertainties and other factors described in the Company’s filings with the
About
|
|||||||||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited; in millions, except per share amounts) |
|||||||||||||||||||
|
For the three months ended
|
|
For the six months ended
|
||||||||||||||||
|
2020 |
|
2019 |
|
2020 |
|
2019 |
||||||||||||
Revenues: |
|
|
|
|
|
|
|
||||||||||||
Circulation and subscription |
$ |
1,030 |
|
|
|
$ |
990 |
|
|
|
$ |
2,032 |
|
|
|
$ |
1,985 |
|
|
Advertising |
448 |
|
|
|
677 |
|
|
|
780 |
|
|
|
1,285 |
|
|
||||
Consumer |
523 |
|
|
|
421 |
|
|
|
964 |
|
|
|
808 |
|
|
||||
Real estate |
281 |
|
|
|
242 |
|
|
|
516 |
|
|
|
460 |
|
|
||||
Other |
132 |
|
|
|
149 |
|
|
|
239 |
|
|
|
281 |
|
|
||||
Total Revenues |
2,414 |
|
|
|
2,479 |
|
|
|
4,531 |
|
|
|
4,819 |
|
|
||||
Operating expenses |
(1,198 |
) |
|
|
(1,351 |
) |
|
|
(2,362 |
) |
|
|
(2,689 |
) |
|
||||
Selling, general and administrative |
(719 |
) |
|
|
(773 |
) |
|
|
(1,404 |
) |
|
|
(1,554 |
) |
|
||||
Depreciation and amortization |
(167 |
) |
|
|
(162 |
) |
|
|
(331 |
) |
|
|
(324 |
) |
|
||||
Impairment and restructuring charges |
(23 |
) |
|
|
(29 |
) |
|
|
(63 |
) |
|
|
(326 |
) |
|
||||
Equity losses of affiliates |
(3 |
) |
|
|
(3 |
) |
|
|
(4 |
) |
|
|
(5 |
) |
|
||||
Interest expense, net |
(12 |
) |
|
|
(8 |
) |
|
|
(20 |
) |
|
|
(4 |
) |
|
||||
Other, net |
54 |
|
|
|
2 |
|
|
|
71 |
|
|
|
6 |
|
|
||||
Income (loss) before income tax expense |
346 |
|
|
|
155 |
|
|
|
418 |
|
|
|
(77 |
) |
|
||||
Income tax expense |
(85 |
) |
|
|
(52 |
) |
|
|
(110 |
) |
|
|
(31 |
) |
|
||||
Net income (loss) |
261 |
|
|
|
103 |
|
|
|
308 |
|
|
|
(108 |
) |
|
||||
Less: Net income attributable to noncontrolling interests |
(30 |
) |
|
|
(18 |
) |
|
|
(43 |
) |
|
|
(34 |
) |
|
||||
Net income (loss) attributable to |
$ |
231 |
|
|
|
$ |
85 |
|
|
|
$ |
265 |
|
|
|
$ |
(142 |
) |
|
|
|
|
|
|
|
|
|
||||||||||||
Weighted average shares outstanding: |
|
|
|
|
|
|
|
||||||||||||
Basic |
591 |
|
|
|
588 |
|
|
|
590 |
|
|
|
587 |
|
|
||||
Diluted |
593 |
|
|
|
590 |
|
|
|
592 |
|
|
|
587 |
|
|
||||
|
|
|
|
|
|
|
|
||||||||||||
Net income (loss) attributable to |
|
|
|
|
|
|
|
||||||||||||
Basic |
$ |
0.39 |
|
|
|
$ |
0.15 |
|
|
|
$ |
0.45 |
|
|
|
$ |
(0.24 |
) |
|
Diluted |
$ |
0.39 |
|
|
|
$ |
0.14 |
|
|
|
$ |
0.45 |
|
|
|
$ |
(0.24 |
) |
|
|
|||||||||
CONSOLIDATED BALANCE SHEETS (Unaudited; in millions) |
|||||||||
|
As of |
|
As of |
||||||
ASSETS |
|
|
|
||||||
Current assets: |
|
|
|
||||||
Cash and cash equivalents |
$ |
1,562 |
|
|
|
$ |
1,517 |
|
|
Receivables, net |
1,444 |
|
|
|
1,203 |
|
|
||
Inventory, net |
203 |
|
|
|
348 |
|
|
||
Other current assets |
387 |
|
|
|
393 |
|
|
||
Total current assets |
3,596 |
|
|
|
3,461 |
|
|
||
|
|
|
|
||||||
Non-current assets: |
|
|
|
||||||
Investments |
353 |
|
|
|
297 |
|
|
||
Property, plant and equipment, net |
2,315 |
|
|
|
2,256 |
|
|
||
Operating lease right-of-use assets |
1,074 |
|
|
|
1,061 |
|
|
||
Intangible assets, net |
1,934 |
|
|
|
1,864 |
|
|
||
|
4,292 |
|
|
|
3,951 |
|
|
||
Deferred income tax assets |
337 |
|
|
|
332 |
|
|
||
Other non-current assets |
1,193 |
|
|
|
1,039 |
|
|
||
Total assets |
$ |
15,094 |
|
|
|
$ |
14,261 |
|
|
|
|
|
|
||||||
LIABILITIES AND EQUITY |
|
|
|
||||||
Current liabilities: |
|
|
|
||||||
Accounts payable |
$ |
291 |
|
|
|
$ |
351 |
|
|
Accrued expenses |
1,094 |
|
|
|
1,019 |
|
|
||
Deferred revenue |
400 |
|
|
|
398 |
|
|
||
Current borrowings |
212 |
|
|
|
76 |
|
|
||
Other current liabilities |
864 |
|
|
|
838 |
|
|
||
Total current liabilities |
2,861 |
|
|
|
2,682 |
|
|
||
|
|
|
|
||||||
Non-current liabilities: |
|
|
|
||||||
Borrowings |
1,044 |
|
|
|
1,183 |
|
|
||
Retirement benefit obligations |
254 |
|
|
|
277 |
|
|
||
Deferred income tax liabilities |
339 |
|
|
|
258 |
|
|
||
Operating lease liabilities |
1,160 |
|
|
|
1,146 |
|
|
||
Other non-current liabilities |
362 |
|
|
|
326 |
|
|
||
Commitments and contingencies |
|
|
|
||||||
Equity: |
|
|
|
||||||
Class A common stock |
4 |
|
|
|
4 |
|
|
||
Class B common stock |
2 |
|
|
|
2 |
|
|
||
Additional paid-in capital |
12,091 |
|
|
|
12,148 |
|
|
||
Accumulated deficit |
(2,976 |
) |
|
|
(3,241 |
) |
|
||
Accumulated other comprehensive loss |
(990 |
) |
|
|
(1,331 |
) |
|
||
|
8,131 |
|
|
|
7,582 |
|
|
||
Noncontrolling interests |
943 |
|
|
|
807 |
|
|
||
Total equity |
9,074 |
|
|
|
8,389 |
|
|
||
Total liabilities and equity |
$ |
15,094 |
|
|
|
$ |
14,261 |
|
|
|
|||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited; in millions) |
|||||||||
|
For the six months ended
|
||||||||
|
2020 |
|
2019 |
||||||
Operating activities: |
|
|
|
||||||
Net income (loss) |
$ |
308 |
|
|
|
$ |
(108 |
) |
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities: |
|
|
|
||||||
Depreciation and amortization |
331 |
|
|
|
324 |
|
|
||
Operating lease expense |
64 |
|
|
|
86 |
|
|
||
Equity losses of affiliates |
4 |
|
|
|
5 |
|
|
||
Cash distributions received from affiliates |
7 |
|
|
|
5 |
|
|
||
Impairment charges |
— |
|
|
|
292 |
|
|
||
Other, net |
(71 |
) |
|
|
(6 |
) |
|
||
Deferred income taxes and taxes payable |
21 |
|
|
|
(35 |
) |
|
||
Change in operating assets and liabilities, net of acquisitions: |
|
|
|
||||||
Receivables and other assets |
(172 |
) |
|
|
(1,661 |
) |
|
||
Inventories, net |
27 |
|
|
|
3 |
|
|
||
Accounts payable and other liabilities |
(36 |
) |
|
|
1,287 |
|
|
||
Net cash provided by operating activities |
483 |
|
|
|
192 |
|
|
||
Investing activities: |
|
|
|
||||||
Capital expenditures |
(173 |
) |
|
|
(237 |
) |
|
||
Acquisitions, net of cash acquired |
(90 |
) |
|
|
(2 |
) |
|
||
Investments in equity affiliates and other |
(11 |
) |
|
|
(8 |
) |
|
||
Proceeds from property, plant and equipment and other asset dispositions |
3 |
|
|
|
10 |
|
|
||
Other, net |
(5 |
) |
|
|
3 |
|
|
||
Net cash used in investing activities |
(276 |
) |
|
|
(234 |
) |
|
||
Financing activities: |
|
|
|
||||||
Borrowings |
146 |
|
|
|
917 |
|
|
||
Repayment of borrowings |
(248 |
) |
|
|
(1,161 |
) |
|
||
Dividends paid |
(80 |
) |
|
|
(81 |
) |
|
||
Other, net |
(37 |
) |
|
|
(3 |
) |
|
||
Net cash used in financing activities |
(219 |
) |
|
|
(328 |
) |
|
||
Net change in cash and cash equivalents |
(12 |
) |
|
|
(370 |
) |
|
||
Cash and cash equivalents, beginning of period |
1,517 |
|
|
|
1,643 |
|
|
||
Exchange movement on opening cash balance |
57 |
|
|
|
(1 |
) |
|
||
Cash and cash equivalents, end of period |
$ |
1,562 |
|
|
|
$ |
1,272 |
|
|
|
|
|
|
NOTE 1 – TOTAL SEGMENT EBITDA
Segment EBITDA is defined as revenues less operating expenses and selling, general and administrative expenses. Segment EBITDA does not include: depreciation and amortization, impairment and restructuring charges, equity losses of affiliates, interest (expense) income, net, other, net and income tax (expense) benefit. Management believes that Segment EBITDA is an appropriate measure for evaluating the operating performance of the Company’s business segments because it is the primary measure used by the Company’s chief operating decision maker to evaluate the performance of and allocate resources within the Company’s businesses. Segment EBITDA provides management, investors and equity analysts with a measure to analyze the operating performance of each of the Company’s business segments and its enterprise value against historical data and competitors’ data, although historical results may not be indicative of future results (as operating performance is highly contingent on many factors, including customer tastes and preferences).
Total Segment EBITDA is a non-GAAP measure and should be considered in addition to, not as a substitute for, net income (loss), cash flow and other measures of financial performance reported in accordance with GAAP. In addition, this measure does not reflect cash available to fund requirements and excludes items, such as depreciation and amortization and impairment and restructuring charges, which are significant components in assessing the Company’s financial performance. The Company believes that the presentation of Total Segment EBITDA provides useful information regarding the Company’s operations and other factors that affect the Company’s reported results. Specifically, the Company believes that by excluding certain one-time or non-cash items such as impairment and restructuring charges and depreciation and amortization, as well as potential distortions between periods caused by factors such as financing and capital structures and changes in tax positions or regimes, the Company provides users of its consolidated financial statements with insight into both its core operations as well as the factors that affect reported results between periods but which the Company believes are not representative of its core business. As a result, users of the Company’s consolidated financial statements are better able to evaluate changes in the core operating results of the Company across different periods. The following tables reconcile net income (loss) to Total Segment EBITDA for the three and six months ended
|
For the three months ended |
|||||||||||||||||
|
2020 |
|
2019 |
|
Change |
|
% Change |
|||||||||||
|
(in millions) |
|
|
|||||||||||||||
Net income |
$ |
261 |
|
|
|
$ |
103 |
|
|
|
$ |
158 |
|
|
|
** |
||
Add: |
|
|
|
|
|
|
|
|||||||||||
Income tax expense |
85 |
|
|
|
52 |
|
|
|
33 |
|
|
|
63% |
|||||
Other, net |
(54 |
) |
|
|
(2 |
) |
|
|
(52 |
) |
|
|
** |
|||||
Interest expense, net |
12 |
|
|
|
8 |
|
|
|
4 |
|
|
|
50% |
|||||
Equity losses of affiliates |
3 |
|
|
|
3 |
|
|
|
— |
|
|
|
—% |
|||||
Impairment and restructuring charges |
23 |
|
|
|
29 |
|
|
|
(6 |
) |
|
|
(21)% |
|||||
Depreciation and amortization |
167 |
|
|
|
162 |
|
|
|
5 |
|
|
|
3% |
|||||
Total Segment EBITDA |
$ |
497 |
|
|
|
$ |
355 |
|
|
|
$ |
142 |
|
|
|
40% |
** - Not meaningful
|
For the six months ended |
|||||||||||||||||
|
2020 |
|
2019 |
|
Change |
|
% Change |
|||||||||||
|
(in millions) |
|
|
|||||||||||||||
Net income (loss) |
$ |
308 |
|
|
|
$ |
(108 |
) |
|
|
$ |
416 |
|
|
|
** |
||
Add: |
|
|
|
|
|
|
|
|||||||||||
Income tax expense |
110 |
|
|
|
31 |
|
|
|
79 |
|
|
|
** |
|||||
Other, net |
(71 |
) |
|
|
(6 |
) |
|
|
(65 |
) |
|
|
** |
|||||
Interest expense, net |
20 |
|
|
|
4 |
|
|
|
16 |
|
|
|
** |
|||||
Equity losses of affiliates |
4 |
|
|
|
5 |
|
|
|
(1 |
) |
|
|
(20)% |
|||||
Impairment and restructuring charges |
63 |
|
|
|
326 |
|
|
|
(263 |
) |
|
|
(81)% |
|||||
Depreciation and amortization |
331 |
|
|
|
324 |
|
|
|
7 |
|
|
|
2% |
|||||
Total Segment EBITDA |
$ |
765 |
|
|
|
$ |
576 |
|
|
|
$ |
189 |
|
|
|
33% |
** - Not meaningful
NOTE 2 – ADJUSTED REVENUES, ADJUSTED TOTAL SEGMENT EBITDA AND ADJUSTED SEGMENT EBITDA
The Company uses revenues, Total Segment EBITDA and Segment EBITDA excluding the impact of acquisitions, divestitures, fees and costs, net of indemnification, related to the claims and investigations arising out of certain conduct at The News of the World (the “U.K. Newspaper Matters”) and foreign currency fluctuations (“Adjusted Revenues,” “Adjusted Total Segment EBITDA” and “Adjusted Segment EBITDA,” respectively) to evaluate the performance of the Company’s core business operations exclusive of certain items that impact the comparability of results from period to period such as the unpredictability and volatility of currency fluctuations. The Company calculates the impact of foreign currency fluctuations for businesses reporting in currencies other than the
The calculation of Adjusted Revenues, Adjusted Total Segment EBITDA and Adjusted Segment EBITDA 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 Revenues, Adjusted Total Segment EBITDA and Adjusted Segment EBITDA are not measures of performance under generally accepted accounting principles and should not be construed as substitutes for amounts determined under GAAP as measures 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.
The following tables reconcile reported revenues and reported Total Segment EBITDA to Adjusted Revenues and Adjusted Total Segment EBITDA for the three and six months ended
|
Revenues |
|
|
Total Segment EBITDA |
||||||||||||||||||||||||||
|
For the three months ended
|
|
|
For the three months ended
|
||||||||||||||||||||||||||
|
2020 |
|
2019 |
|
Difference |
|
|
2020 |
|
2019 |
|
Difference |
||||||||||||||||||
|
(in millions) |
|
|
(in millions) |
||||||||||||||||||||||||||
As reported |
$ |
2,414 |
|
|
|
$ |
2,479 |
|
|
|
$ |
(65 |
) |
|
|
|
$ |
497 |
|
|
|
$ |
355 |
|
|
|
$ |
142 |
|
|
Impact of acquisitions |
(14 |
) |
|
|
— |
|
|
|
(14 |
) |
|
|
|
3 |
|
|
|
— |
|
|
|
3 |
|
|
||||||
Impact of divestitures |
(1 |
) |
|
|
(210 |
) |
|
|
209 |
|
|
|
|
1 |
|
|
|
(4 |
) |
|
|
5 |
|
|
||||||
Impact of foreign currency fluctuations |
(75 |
) |
|
|
— |
|
|
|
(75 |
) |
|
|
|
(18 |
) |
|
|
— |
|
|
|
(18 |
) |
|
||||||
Net impact of |
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
3 |
|
|
|
(1 |
) |
|
|
4 |
|
|
||||||
As adjusted |
$ |
2,324 |
|
|
|
$ |
2,269 |
|
|
|
$ |
55 |
|
|
|
|
$ |
486 |
|
|
|
$ |
350 |
|
|
|
$ |
136 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
|
Total Segment EBITDA |
||||||||||||||||||||||||||
|
For the six months ended
|
|
|
For the six months ended
|
||||||||||||||||||||||||||
|
2020 |
|
2019 |
|
Difference |
|
|
2020 |
|
2019 |
|
Difference |
||||||||||||||||||
|
(in millions) |
|
|
(in millions) |
||||||||||||||||||||||||||
As reported |
$ |
4,531 |
|
|
|
$ |
4,819 |
|
|
|
$ |
(288 |
) |
|
|
|
$ |
765 |
|
|
|
$ |
576 |
|
|
|
$ |
189 |
|
|
Impact of acquisitions |
(24 |
) |
|
|
— |
|
|
|
(24 |
) |
|
|
|
2 |
|
|
|
— |
|
|
|
2 |
|
|
||||||
Impact of divestitures |
(1 |
) |
|
|
(420 |
) |
|
|
419 |
|
|
|
|
1 |
|
|
|
(15 |
) |
|
|
16 |
|
|
||||||
Impact of foreign currency fluctuations |
(125 |
) |
|
|
— |
|
|
|
(125 |
) |
|
|
|
(26 |
) |
|
|
— |
|
|
|
(26 |
) |
|
||||||
Net impact of |
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
5 |
|
|
|
1 |
|
|
|
4 |
|
|
||||||
As adjusted |
$ |
4,381 |
|
|
|
$ |
4,399 |
|
|
|
$ |
(18 |
) |
|
|
|
$ |
747 |
|
|
|
$ |
562 |
|
|
|
$ |
185 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign Exchange Rates
Average foreign exchange rates used in the calculation of the impact of foreign currency fluctuations for each of the three month periods in the six months ended
|
Fiscal Year 2021 |
||
|
Q1 |
|
Q2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year 2020 |
||
|
Q1 |
|
Q2 |
|
|
|
|
|
|
|
|
Adjusted Revenues and Adjusted Segment EBITDA by segment for the three and six months ended
|
For the three months ended |
||||||||||||
|
2020 |
|
2019 |
|
% Change |
||||||||
|
(in millions) |
|
Better/(Worse) |
||||||||||
Adjusted Revenues: |
|
|
|
|
|
||||||||
|
$ |
327 |
|
|
|
$ |
294 |
|
|
|
11 |
|
% |
Subscription Video Services |
478 |
|
|
|
501 |
|
|
|
(5 |
) |
% |
||
|
443 |
|
|
|
429 |
|
|
|
3 |
|
% |
||
|
526 |
|
|
|
441 |
|
|
|
19 |
|
% |
||
News Media |
550 |
|
|
|
604 |
|
|
|
(9 |
) |
% |
||
Other |
— |
|
|
|
— |
|
|
|
— |
|
% |
||
Adjusted Total Revenues |
$ |
2,324 |
|
|
|
$ |
2,269 |
|
|
|
2 |
|
% |
|
|
|
|
|
|
||||||||
Adjusted Segment EBITDA: |
|
|
|
|
|
||||||||
|
$ |
141 |
|
|
|
$ |
118 |
|
|
|
19 |
|
% |
Subscription Video Services |
116 |
|
|
|
70 |
|
|
|
66 |
|
% |
||
|
108 |
|
|
|
76 |
|
|
|
42 |
|
% |
||
|
101 |
|
|
|
63 |
|
|
|
60 |
|
% |
||
News Media |
64 |
|
|
|
61 |
|
|
|
5 |
|
% |
||
Other |
(44 |
) |
|
|
(38 |
) |
|
|
(16 |
) |
% |
||
Adjusted Total Segment EBITDA |
$ |
486 |
|
|
|
$ |
350 |
|
|
|
39 |
|
% |
|
|
|
|
|
|
|
For the six months ended |
||||||||||||
|
2020 |
|
2019 |
|
% Change |
||||||||
|
(in millions) |
|
Better/(Worse) |
||||||||||
Adjusted Revenues: |
|
|
|
|
|
||||||||
|
$ |
611 |
|
|
|
$ |
566 |
|
|
|
8 |
|
% |
Subscription Video Services |
954 |
|
|
|
1,015 |
|
|
|
(6 |
) |
% |
||
|
828 |
|
|
|
811 |
|
|
|
2 |
|
% |
||
|
971 |
|
|
|
846 |
|
|
|
15 |
|
% |
||
News Media |
1,017 |
|
|
|
1,161 |
|
|
|
(12 |
) |
% |
||
Other |
— |
|
|
|
— |
|
|
|
— |
|
% |
||
Adjusted Total Revenues |
$ |
4,381 |
|
|
|
$ |
4,399 |
|
|
|
— |
|
% |
|
|
|
|
|
|
||||||||
Adjusted Segment EBITDA: |
|
|
|
|
|
||||||||
|
$ |
257 |
|
|
|
$ |
201 |
|
|
|
28 |
|
% |
Subscription Video Services |
190 |
|
|
|
151 |
|
|
|
26 |
|
% |
||
|
180 |
|
|
|
125 |
|
|
|
44 |
|
% |
||
|
170 |
|
|
|
112 |
|
|
|
52 |
|
% |
||
News Media |
42 |
|
|
|
56 |
|
|
|
(25 |
) |
% |
||
Other |
(92 |
) |
|
|
(83 |
) |
|
|
(11 |
) |
% |
||
Adjusted Total Segment EBITDA |
$ |
747 |
|
|
|
$ |
562 |
|
|
|
33 |
|
% |
|
|
|
|
|
|
The following tables reconcile reported revenues and Segment EBITDA by segment to Adjusted Revenues and Adjusted Segment EBITDA by segment for the three and six months ended
|
For the three months ended |
|||||||||||||||||||||||||||
|
As Reported |
|
Impact of
|
|
Impact of
|
|
Impact of
|
|
|
|
As Adjusted |
|||||||||||||||||
|
(in millions) |
|||||||||||||||||||||||||||
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
|
$ |
339 |
|
|
|
$ |
— |
|
|
|
$ |
— |
|
|
|
$ |
(12 |
) |
|
|
$ |
— |
|
|
$ |
327 |
|
|
Subscription Video Services |
511 |
|
|
|
— |
|
|
|
— |
|
|
|
(33 |
) |
|
|
— |
|
|
478 |
|
|
||||||
|
446 |
|
|
|
— |
|
|
|
— |
|
|
|
(3 |
) |
|
|
— |
|
|
443 |
|
|
||||||
|
544 |
|
|
|
(13 |
) |
|
|
— |
|
|
|
(5 |
) |
|
|
— |
|
|
526 |
|
|
||||||
News Media |
573 |
|
|
|
(1 |
) |
|
|
— |
|
|
|
(22 |
) |
|
|
— |
|
|
550 |
|
|
||||||
Other |
1 |
|
|
|
— |
|
|
|
(1 |
) |
|
|
— |
|
|
|
— |
|
|
— |
|
|
||||||
Total Revenues |
$ |
2,414 |
|
|
|
$ |
(14 |
) |
|
|
$ |
(1 |
) |
|
|
$ |
(75 |
) |
|
|
$ |
— |
|
|
$ |
2,324 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Segment EBITDA: |
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
|
$ |
142 |
|
|
|
$ |
6 |
|
|
|
$ |
— |
|
|
|
$ |
(7 |
) |
|
|
$ |
— |
|
|
$ |
141 |
|
|
Subscription Video Services |
124 |
|
|
|
— |
|
|
|
— |
|
|
|
(8 |
) |
|
|
— |
|
|
116 |
|
|
||||||
|
109 |
|
|
|
— |
|
|
|
— |
|
|
|
(1 |
) |
|
|
— |
|
|
108 |
|
|
||||||
|
104 |
|
|
|
(3 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
101 |
|
|
||||||
News Media |
66 |
|
|
|
— |
|
|
|
— |
|
|
|
(2 |
) |
|
|
— |
|
|
64 |
|
|
||||||
Other |
(48 |
) |
|
|
— |
|
|
|
1 |
|
|
|
— |
|
|
|
3 |
|
|
(44 |
) |
|
||||||
Total Segment EBITDA |
$ |
497 |
|
|
|
$ |
3 |
|
|
|
$ |
1 |
|
|
|
$ |
(18 |
) |
|
|
$ |
3 |
|
|
$ |
486 |
|
|
|
For the three months ended |
||||||||||||||||||||||||||
|
As Reported |
|
Impact of
|
|
Impact of
|
|
Impact of
|
|
|
|
As Adjusted |
||||||||||||||||
|
(in millions) |
||||||||||||||||||||||||||
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
$ |
294 |
|
|
|
$ |
— |
|
|
$ |
— |
|
|
|
$ |
— |
|
|
$ |
— |
|
|
|
$ |
294 |
|
|
Subscription Video Services |
501 |
|
|
|
— |
|
|
— |
|
|
|
— |
|
|
— |
|
|
|
501 |
|
|
||||||
|
430 |
|
|
|
— |
|
|
(1 |
) |
|
|
— |
|
|
— |
|
|
|
429 |
|
|
||||||
|
442 |
|
|
|
— |
|
|
(1 |
) |
|
|
— |
|
|
— |
|
|
|
441 |
|
|
||||||
News Media |
811 |
|
|
|
— |
|
|
(207 |
) |
|
|
— |
|
|
— |
|
|
|
604 |
|
|
||||||
Other |
1 |
|
|
|
— |
|
|
(1 |
) |
|
|
— |
|
|
— |
|
|
|
— |
|
|
||||||
Total Revenues |
$ |
2,479 |
|
|
|
$ |
— |
|
|
$ |
(210 |
) |
|
|
$ |
— |
|
|
$ |
— |
|
|
|
$ |
2,269 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Segment EBITDA: |
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
$ |
118 |
|
|
|
$ |
— |
|
|
$ |
— |
|
|
|
$ |
— |
|
|
$ |
— |
|
|
|
$ |
118 |
|
|
Subscription Video Services |
70 |
|
|
|
— |
|
|
— |
|
|
|
— |
|
|
— |
|
|
|
70 |
|
|
||||||
|
76 |
|
|
|
— |
|
|
— |
|
|
|
— |
|
|
— |
|
|
|
76 |
|
|
||||||
|
63 |
|
|
|
— |
|
|
— |
|
|
|
— |
|
|
— |
|
|
|
63 |
|
|
||||||
News Media |
66 |
|
|
|
— |
|
|
(5 |
) |
|
|
— |
|
|
— |
|
|
|
61 |
|
|
||||||
Other |
(38 |
) |
|
|
— |
|
|
1 |
|
|
|
— |
|
|
(1 |
) |
|
|
(38 |
) |
|
||||||
Total Segment EBITDA |
$ |
355 |
|
|
|
$ |
— |
|
|
$ |
(4 |
) |
|
|
$ |
— |
|
|
$ |
(1 |
) |
|
|
$ |
350 |
|
|
|
For the six months ended |
|||||||||||||||||||||||||||
|
As Reported |
|
Impact of
|
|
Impact of
|
|
Impact of
|
|
|
|
As Adjusted |
|||||||||||||||||
|
(in millions) |
|||||||||||||||||||||||||||
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
|
$ |
629 |
|
|
|
$ |
— |
|
|
|
$ |
— |
|
|
|
$ |
(18 |
) |
|
|
$ |
— |
|
|
$ |
611 |
|
|
Subscription Video Services |
1,007 |
|
|
|
— |
|
|
|
— |
|
|
|
(53 |
) |
|
|
— |
|
|
954 |
|
|
||||||
|
832 |
|
|
|
— |
|
|
|
— |
|
|
|
(4 |
) |
|
|
— |
|
|
828 |
|
|
||||||
|
1,002 |
|
|
|
(22 |
) |
|
|
— |
|
|
|
(9 |
) |
|
|
— |
|
|
971 |
|
|
||||||
News Media |
1,060 |
|
|
|
(2 |
) |
|
|
— |
|
|
|
(41 |
) |
|
|
— |
|
|
1,017 |
|
|
||||||
Other |
1 |
|
|
|
— |
|
|
|
(1 |
) |
|
|
— |
|
|
|
— |
|
|
— |
|
|
||||||
Total Revenues |
$ |
4,531 |
|
|
|
$ |
(24 |
) |
|
|
$ |
(1 |
) |
|
|
$ |
(125 |
) |
|
|
$ |
— |
|
|
$ |
4,381 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Segment EBITDA: |
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
|
$ |
261 |
|
|
|
$ |
6 |
|
|
|
$ |
— |
|
|
|
$ |
(10 |
) |
|
|
$ |
— |
|
|
$ |
257 |
|
|
Subscription Video Services |
202 |
|
|
|
— |
|
|
|
— |
|
|
|
(12 |
) |
|
|
— |
|
|
190 |
|
|
||||||
|
181 |
|
|
|
— |
|
|
|
— |
|
|
|
(1 |
) |
|
|
— |
|
|
180 |
|
|
||||||
|
175 |
|
|
|
(4 |
) |
|
|
— |
|
|
|
(1 |
) |
|
|
— |
|
|
170 |
|
|
||||||
News Media |
44 |
|
|
|
— |
|
|
|
— |
|
|
|
(2 |
) |
|
|
— |
|
|
42 |
|
|
||||||
Other |
(98 |
) |
|
|
— |
|
|
|
1 |
|
|
|
— |
|
|
|
5 |
|
|
(92 |
) |
|
||||||
Total Segment EBITDA |
$ |
765 |
|
|
|
$ |
2 |
|
|
|
$ |
1 |
|
|
|
$ |
(26 |
) |
|
|
$ |
5 |
|
|
$ |
747 |
|
|
|
For the six months ended |
|||||||||||||||||||||||||
|
As Reported |
|
Impact of
|
|
Impact of
|
|
Impact of
|
|
|
|
As Adjusted |
|||||||||||||||
|
(in millions) |
|||||||||||||||||||||||||
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
$ |
566 |
|
|
|
$ |
— |
|
|
$ |
— |
|
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
566 |
|
|
Subscription Video Services |
1,015 |
|
|
|
— |
|
|
— |
|
|
|
— |
|
|
— |
|
|
1,015 |
|
|
||||||
|
812 |
|
|
|
— |
|
|
(1 |
) |
|
|
— |
|
|
— |
|
|
811 |
|
|
||||||
|
847 |
|
|
|
— |
|
|
(1 |
) |
|
|
— |
|
|
— |
|
|
846 |
|
|
||||||
News Media |
1,578 |
|
|
|
— |
|
|
(417 |
) |
|
|
— |
|
|
— |
|
|
1,161 |
|
|
||||||
Other |
1 |
|
|
|
— |
|
|
(1 |
) |
|
|
— |
|
|
— |
|
|
— |
|
|
||||||
Total Revenues |
$ |
4,819 |
|
|
|
$ |
— |
|
|
$ |
(420 |
) |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
4,399 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Segment EBITDA: |
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
$ |
200 |
|
|
|
$ |
— |
|
|
$ |
1 |
|
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
201 |
|
|
Subscription Video Services |
151 |
|
|
|
— |
|
|
— |
|
|
|
— |
|
|
— |
|
|
151 |
|
|
||||||
|
125 |
|
|
|
— |
|
|
— |
|
|
|
— |
|
|
— |
|
|
125 |
|
|
||||||
|
112 |
|
|
|
— |
|
|
— |
|
|
|
— |
|
|
— |
|
|
112 |
|
|
||||||
News Media |
73 |
|
|
|
— |
|
|
(17 |
) |
|
|
— |
|
|
— |
|
|
56 |
|
|
||||||
Other |
(85 |
) |
|
|
— |
|
|
1 |
|
|
|
— |
|
|
1 |
|
|
(83 |
) |
|
||||||
Total Segment EBITDA |
$ |
576 |
|
|
|
$ |
— |
|
|
$ |
(15 |
) |
|
|
$ |
— |
|
|
$ |
1 |
|
|
$ |
562 |
|
|
NOTE 3 – ADJUSTED NET INCOME (LOSS) ATTRIBUTABLE TO NEWS CORPORATION STOCKHOLDERS AND ADJUSTED EPS
The Company uses net income (loss) attributable to
The following tables reconcile reported net income (loss) attributable to
|
For the three months ended
|
|
For the three months ended
|
||||||||||||||||
(in millions, except per share data) |
Net income
|
|
EPS |
|
Net income
|
|
EPS |
||||||||||||
Net income |
$ |
261 |
|
|
|
|
|
$ |
103 |
|
|
|
|
||||||
Less: Net income attributable to noncontrolling interests |
(30 |
) |
|
|
|
|
(18 |
) |
|
|
|
||||||||
Net income attributable to |
$ |
231 |
|
|
|
$ |
0.39 |
|
|
|
$ |
85 |
|
|
|
$ |
0.14 |
|
|
|
3 |
|
|
|
0.01 |
|
|
|
(1 |
) |
|
|
— |
|
|
||||
Impairment and restructuring charges |
23 |
|
|
|
0.04 |
|
|
|
29 |
|
|
|
0.05 |
|
|
||||
Other, net |
(54 |
) |
|
|
(0.10 |
) |
|
|
(2 |
) |
|
|
— |
|
|
||||
Tax impact on items above |
(2 |
) |
|
|
— |
|
|
|
(5 |
) |
|
|
(0.01 |
) |
|
||||
Impact of noncontrolling interest on items above |
(1 |
) |
|
|
— |
|
|
|
(1 |
) |
|
|
— |
|
|
||||
As adjusted |
$ |
200 |
|
|
|
$ |
0.34 |
|
|
|
$ |
105 |
|
|
|
$ |
0.18 |
|
|
|
For the six months ended
|
|
For the six months ended
|
||||||||||||||||
(in millions, except per share data) |
Net income
|
|
EPS |
|
Net (loss)
|
|
EPS |
||||||||||||
Net income (loss) |
$ |
308 |
|
|
|
|
|
$ |
(108 |
) |
|
|
|
||||||
Less: Net income attributable to noncontrolling interests |
(43 |
) |
|
|
|
|
(34 |
) |
|
|
|
||||||||
Net income (loss) attributable to |
$ |
265 |
|
|
|
$ |
0.45 |
|
|
|
$ |
(142 |
) |
|
|
$ |
(0.24 |
) |
|
|
5 |
|
|
|
0.01 |
|
|
|
1 |
|
|
|
— |
|
|
||||
Impairment and restructuring charges(a) |
63 |
|
|
|
0.10 |
|
|
|
326 |
|
|
|
0.55 |
|
|
||||
Other, net |
(71 |
) |
|
|
(0.12 |
) |
|
|
(6 |
) |
|
|
(0.01 |
) |
|
||||
Tax impact on items above |
(12 |
) |
|
|
(0.02 |
) |
|
|
(46 |
) |
|
|
(0.08 |
) |
|
||||
Impact of noncontrolling interest on items above |
(2 |
) |
|
|
— |
|
|
|
(2 |
) |
|
|
— |
|
|
||||
As adjusted |
$ |
248 |
|
|
|
$ |
0.42 |
|
|
|
$ |
131 |
|
|
|
$ |
0.22 |
|
|
(a) |
During the six months ended |
View source version on businesswire.com: https://www.businesswire.com/news/home/20210204006066/en/
Investor Relations
212-416-3363
mflorin@newscorp.com
212-416-4529
lkim@newscorp.com
Corporate Communications
212-416-4064
jkennedy@newscorp.com
Source: