News Corporation Reports Record Full Year Operating Income of $4.45 Billion; Growth of 15% over Fiscal 2006

Full Year Earnings Per Share from Continuing Operations Increases 24% to $1.08
Cash from Operations of $4.1 Billion
Fourth Quarter Operating Income Grows 18% to $1.2 Billion on Revenue Growth of 9%

FULL YEAR FINANCIAL HIGHLIGHTS

“¢ 15% operating income growth driven by record results at Filmed Entertainment, Cable Network Programming, Magazines and Inserts and Direct Broadcast Satellite segments.
“¢ Filmed Entertainment delivers operating income contribution of $1.2 billion, up 12%, on strong theatrical release slate and continued success of film and television home entertainment titles.
“¢ Cable Network Programming operating income up 26% on affiliate revenue growth at the Fox News Channel, the FX Network and the Regional Sports Networks and increased contributions from the Fox International Channels.
“¢ SKY Italia generates operating income of $221 million, an improvement of $182 million versus a year ago, reflecting net subscriber additions of 368,000 over the past 12 months as the subscriber base expands to 4.2 million.
“¢ Print businesses aggregate operating income increases 16% on strength of freestanding inserts and in-store marketing products at Magazines and Inserts.
Newspaper segment comparisons benefit from a $99 million redundancy provision taken in prior year’s second quarter results.
“¢ Fox Interactive Media achieves first year of profitability on strength of advertising and search revenue growth at MySpace.

FULL YEAR STRATEGIC HIGHLIGHTS

“¢ Purchased nearly $1.3 billion of stock under the authorized $6.0 billion stock repurchase program bringing total purchases to $3.9 billion.
“¢ Entered into an agreement with Liberty Media Corporation to acquire Liberty’s 16.3 percent interest in News Corporation (approximately 325 million shares of Class A Common Stock and 188 million shares of Class B Common Stock) in exchange for the Compan’s interest in The DIRECTV Group, three Regional Sports Networks and approximately $588 million of cash.
“¢ Completed sale of investment in Sky Brasil, a Brazilian DTH platform, for $302 million, and a portion of investment in Phoenix Satellite Television Holdings for approximately $164 million.
“¢ Announced plan to sell nine television stations and explore strategic options for the News Outdoor Group.

NEW YORK, NY – News Corporation (NYSE: NWS, NWSA; ASX: NWS, NWSLV) today reported fourth quarter net income from continuing operations of $890 million ($0.28 per share on a diluted combined basis) an increase of $172 million or 24% from the $718 million ($0.23 per share on a diluted combined basis) reported in the fourth quarter a year ago.

DIRECT BROADCAST SATELLITE TELEVISION

SKY Italia reported fourth quarter operating income of $155 million, an increase of $71 million, or 85%, compared to a year ago and full year operating income of $221 million, growth of $182 million over the $39 million reported a year ago. The fourth quarter and full year improvements primarily reflect the addition of 368,000 net new subscribers over the past 12 months, bringing SKY Italia’s subscriber base to 4.2 million at year-end. The related revenue growth was partially offset in the fourth quarter and full year by increased programming costs associated with the larger subscriber base, as well as by higher costs associated with new channel offerings. These increased costs were mitigated by the absence of expenses associated with the FIFA World Cup which was broadcast in the fourth quarter a year ago. The full year results also include increased costs associated with broadcasting additional Series A and Series B soccer matches.

Links: Full Release; News Corp; Sky Italia