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     157  0 Kommentare News Corporation Reports Third Quarter Results for Fiscal 2023

    News Corporation (“News Corp” or the “Company”) (Nasdaq: NWS, NWSA; ASX: NWS, NWSLV) today reported financial results for the three months ended March 31, 2023.

    Commenting on the results, Chief Executive Robert Thomson said:

    “These results demonstrate the fundamental differences in the character of News Corp compared with other media companies. In a period in which advertising was clearly insipid in certain parts of the world, our core non-advertising revenue has been particularly robust, highlighted by a 38 percent increase in revenues at the Dow Jones professional information business.

    Overall, our fiscal third quarter results demonstrated meaningful progress compared to the first half, with various macro and sectoral trends decidedly more positive. Revenues were over $2.4 billion, down only 2 percent from the prior year, but higher in constant currency, while our company-wide cost cutting program began to gain traction.

    That cost reduction drive includes taking the difficult but necessary step of reducing headcount by an expected five percent, and we now anticipate that program will yield at least $160 million in annualized savings by the end of this calendar year.

    We also want to highlight that today marks the 44th day in captivity for Wall Street Journal reporter Evan Gershkovich, who has been wrongfully, wilfully detained in Russia. We trust that justice and common sense will prevail, and that Evan will soon be released.”

    THIRD QUARTER RESULTS

    The Company reported fiscal 2023 third quarter total revenues of $2.45 billion, a 2% decrease compared to $2.49 billion in the prior year period. The decline was primarily due to a $98 million, or 4%, negative impact from foreign currency fluctuations and lower revenues at the Digital Real Estate Services segment due to continued challenging housing market conditions in the U.S. and Australia. The decline was partially offset by higher Dow Jones segment revenues, which includes the acquisitions of OPIS and Chemical Market Analytics (“CMA”), and higher revenues at the News Media and Subscription Video Services segments on a constant currency basis. Adjusted Revenues (which excludes the foreign currency impact, acquisitions and divestitures as defined in Note 2) were flat compared to the prior year.

    Net income for the quarter was $59 million, a 43% decline compared to $104 million in the prior year, primarily due to lower Total Segment EBITDA, as discussed below, higher depreciation and amortization expense and higher losses from equity affiliates, partially offset by lower impairment charges.

    The Company reported third quarter Total Segment EBITDA of $320 million, an 11% decline compared to $358 million in the prior year, primarily due to lower revenues, as discussed above, higher costs at the Dow Jones segment, and a $13 million, or 4%, negative impact from foreign currency fluctuations. The results this quarter also include $7 million of costs related to the professional fees incurred by the Special Committee and the Company in connection with evaluating the proposal from the Murdoch Family Trust, as well as the fees related to the potential sale of Move. Adjusted Total Segment EBITDA (as defined in Note 2) decreased 15%.

    Net income per share attributable to News Corporation stockholders was $0.09 as compared to $0.14 in the prior year.

    Adjusted EPS (as defined in Note 3) were $0.09 compared to $0.16 in the prior year.

    SEGMENT REVIEW

     

    For the three months ended
    March 31,

     

    For the nine months ended
    March 31,

     

     

    2023

     

     

     

    2022

     

     

    % Change

     

     

    2023

     

     

     

    2022

     

     

    % Change

     

    (in millions)

     

    Better/

    (Worse)

     

    (in millions)

     

    Better/

    (Worse)

    Revenues:

     

     

     

     

     

     

     

     

     

     

     

    Digital Real Estate Services

    $

    363

     

     

    $

    416

     

     

    (13

    )%

     

    $

    1,170

     

     

    $

    1,298

     

     

    (10

    )%

    Subscription Video Services

     

    477

     

     

     

    494

     

     

    (3

    )%

     

     

    1,441

     

     

     

    1,502

     

     

    (4

    )%

    Dow Jones

     

    529

     

     

     

    487

     

     

    9

    %

     

     

    1,607

     

     

     

    1,439

     

     

    12

    %

    Book Publishing

     

    515

     

     

     

    515

     

     

    %

     

     

    1,533

     

     

     

    1,678

     

     

    (9

    )%

    News Media

     

    563

     

     

     

    580

     

     

    (3

    )%

     

     

    1,695

     

     

     

    1,794

     

     

    (6

    )%

    Other

     

     

     

     

     

     

    %

     

     

     

     

     

     

     

    %

    Total Revenues

    $

    2,447

     

     

    $

    2,492

     

     

    (2

    )%

     

    $

    7,446

     

     

    $

    7,711

     

     

    (3

    )%

     

     

     

     

     

     

     

     

     

     

     

     

    Segment EBITDA:

     

     

     

     

     

     

     

     

     

     

     

    Digital Real Estate Services

    $

    102

     

     

    $

    137

     

     

    (26

    )%

     

    $

    349

     

     

    $

    453

     

     

    (23

    )%

    Subscription Video Services

     

    68

     

     

     

    79

     

     

    (14

    )%

     

     

    269

     

     

     

    279

     

     

    (4

    )%

    Dow Jones

     

    109

     

     

     

    88

     

     

    24

    %

     

     

    361

     

     

     

    327

     

     

    10

    %

    Book Publishing

     

    61

     

     

     

    67

     

     

    (9

    )%

     

     

    151

     

     

     

    259

     

     

    (42

    )%

    News Media

     

    34

     

     

     

    39

     

     

    (13

    )%

     

     

    111

     

     

     

    184

     

     

    (40

    )%

    Other

     

    (54

    )

     

     

    (52

    )

     

    (4

    )%

     

     

    (162

    )

     

     

    (148

    )

     

    (9

    )%

    Total Segment EBITDA

    $

    320

     

     

    $

    358

     

     

    (11

    )%

     

    $

    1,079

     

     

    $

    1,354

     

     

    (20

    )%

    Digital Real Estate Services

    Revenues in the quarter decreased $53 million, or 13%, compared to the prior year, reflecting a $13 million, or 3%, negative impact from foreign currency fluctuations. Segment EBITDA in the quarter decreased $35 million, or 26%, compared to the prior year, primarily due to the lower revenues, a $5 million, or 4%, negative impact from foreign currency fluctuations and higher costs related to REA India, partially offset by lower costs at Move. Adjusted Revenues and Adjusted Segment EBITDA (as defined in Note 2) decreased 10% and 24%, respectively.

    In the quarter, revenues at REA Group decreased $24 million, or 10%, to $222 million, driven by a $13 million, or 6%, negative impact from foreign currency fluctuations, lower Australian residential revenues due to the decline in national listings, most notably in Sydney and Melbourne, and lower financial services revenues due to declines in settlement activity. The decline was partially offset by price increases, increased penetration of Premiere Plus, increased depth penetration in the Australian residential business and higher revenues from REA India. Australian national residential buy listing volumes in the quarter declined 12% compared to the prior year, with listings in Sydney and Melbourne down 20% and 18%, respectively.

    Move’s revenues in the quarter decreased $29 million, or 17%, to $141 million, primarily as a result of lower real estate revenues. Real estate revenues, which represented 79% of total Move revenues, decreased $33 million, or 23%, driven by the continued impact of the macroeconomic environment on the housing market, including higher household interest rates, which has led to lower lead and transaction volumes. Revenues from the referral model, which includes the ReadyConnect Concierge℠ product, and the traditional lead generation product decreased due to these factors, partially offset by improved lead optimization. The referral model generated 23% of total Move revenues in the quarter compared to 28% in the prior year. Based on Move’s internal data, average monthly unique users of Realtor.com’s web and mobile sites for the fiscal third quarter declined 24% year-over-year to 72 million. Lead volume declined 30%.

    Subscription Video Services

    Revenues of $477 million in the quarter decreased $17 million, or 3%, compared with the prior year, due to a $28 million, or 5%, negative impact from foreign currency fluctuations. Adjusted Revenues of $505 million increased 2% compared to the prior year. Higher revenues from Kayo and BINGE, driven by increases in both volume and pricing, were partially offset by the impact from fewer residential broadcast subscribers. Foxtel Group streaming subscription revenues represented approximately 26% of total circulation and subscription revenues in the quarter, as compared to 20% in the prior year.

    As of March 31, 2023, Foxtel’s total closing paid subscribers were over 4.5 million, a 6% increase compared to the prior year, primarily due to the growth in streaming subscribers driven by BINGE and Kayo, partially offset by lower residential broadcast and commercial subscribers. Broadcast subscriber churn in the quarter improved to 12.3%, the lowest level since Fiscal 2016, from 14.3% in the prior year. Broadcast ARPU for the quarter increased 2% year-over-year to A$84 (US$57).

     

    As of March 31,

     

    2023

     

    2022

     

    (in 000's)

    Broadcast Subscribers

     

     

     

    Residential

    1,369

     

    1,522

    Commercial

    233

     

    240

    Streaming Subscribers (Total (Paid))

     

     

     

    Kayo

    1,332 (1,309 paid)

     

    1,209 (1,151 paid)

    BINGE

    1,529 (1,484 paid)

     

    1,305 (1,212 paid)

    Foxtel Now

    178 (171 paid)

     

    215 (206 paid)

     

     

     

     

    Total Subscribers (Total (Paid))

    4,662 (4,585 paid)

     

    4,509 (4,338 paid)

    Segment EBITDA in the quarter decreased $11 million, or 14%, compared with the prior year, reflecting a $4 million, or 5%, negative impact from foreign currency fluctuations. The decline was primarily due to higher sports programming rights costs, driven mainly by contractual increases across AFL, NRL and Cricket Australia, partially offset by lower marketing spend for Kayo and BINGE and lower transmission costs. Adjusted Segment EBITDA decreased 9%.

    Dow Jones

    Revenues in the quarter increased $42 million, or 9%, compared to the prior year, which includes $27 million and $19 million contributions from the acquisitions of OPIS and CMA, respectively. Adjusted Revenues at the Dow Jones segment were flat compared to the prior year, as the growth in circulation and subscription revenues from continued growth in Risk & Compliance products and digital subscription gains was offset by lower advertising revenues. Digital revenues at Dow Jones in the quarter represented 79% of total revenues compared to 76% in the prior year.

    Circulation and subscription revenues increased $49 million, or 13%, which includes the contributions from the acquisitions of OPIS and CMA. Circulation revenue declined 1%, primarily due to lower print volume and lower revenues from IBD, partially offset by the continued growth in digital-only subscriptions, primarily at The Wall Street Journal. Professional information business revenues grew 38%, primarily driven by the acquisitions of OPIS and CMA and growth in Risk & Compliance products. Revenues from the Risk & Compliance products grew 16%, which includes a 3% negative impact from foreign currency fluctuations. Digital circulation revenues accounted for 69% of circulation revenues for the quarter, compared to 68% in the prior year.

    During the third quarter, total average subscriptions to Dow Jones’ consumer products reached over 5.1 million, a 6% increase compared to the prior year. Digital-only subscriptions to Dow Jones’ consumer products grew 10%. Total subscriptions to The Wall Street Journal grew 5% compared to the prior year, to nearly 3.9 million average subscriptions in the quarter. Digital-only subscriptions to The Wall Street Journal grew 9% to 3.3 million average subscriptions in the quarter, and represented 85% of total Wall Street Journal subscriptions.

     

    For the three months ended March 31,

     

    2023

     

    2022

     

    % Change

    (in thousands, except %)

     

     

     

     

    Better/(Worse)

    The Wall Street Journal

     

     

     

     

     

    Digital-only subscriptions

    3,299

     

    3,036

     

    9 %

    Total subscriptions

    3,888

     

    3,718

     

    5 %

    Barron’s Group

     

     

     

     

     

    Digital-only subscriptions

    969

     

    810

     

    20 %

    Total subscriptions

    1,128

     

    1,008

     

    12 %

    Total Consumer

     

     

     

     

     

    Digital-only subscriptions

    4,347

     

    3,941

     

    10 %

    Total subscriptions

    5,117

     

    4,848

     

    6 %

    Advertising revenues decreased $14 million, or 14%, primarily due to 17% and 8% declines in digital and print advertising revenues, respectively, driven primarily by continued weakness in the technology and finance categories. Digital advertising accounted for 59% of total advertising revenues in the quarter, compared to 62% in the prior year.

    Segment EBITDA for the quarter increased $21 million, or 24%, which includes a $17 million combined contribution from the acquisitions of OPIS and CMA. The growth reflects the higher revenues discussed above and the absence of $15 million in transaction costs related to the acquisition of OPIS in the prior year, partially offset by $21 million of higher employee costs due to the acquisitions of OPIS and CMA and $6 million of higher marketing costs, partly due to the increase in the number of in-person conferences and events. Adjusted Segment EBITDA decreased 11%.

    Book Publishing

    Revenues in the quarter were flat with the prior year, as higher sales in Christian books were offset by the $11 million, or 2%, negative impact from foreign currency fluctuations. Key titles in the quarter included The Courage to Be Free by Ron DeSantis, Demon Copperhead by Barbara Kingsolver and Never, Never by Colleen Hoover and Tarryn Fisher. Adjusted Revenues increased 2%. Digital sales declined 3% compared to the prior year due to lower e-book sales. Digital sales represented 23% of Consumer revenues for the quarter and were in-line with the prior year. Backlist sales represented approximately 60% of total revenues in the quarter.

    Segment EBITDA for the quarter decreased $6 million, or 9%, compared to the prior year, driven by ongoing supply chain, inventory and inflationary pressures on manufacturing, freight and distribution costs. The decline was partially offset by lower employee costs. These pressures are expected to continue to impact the business in the near term. Adjusted Segment EBITDA decreased 7%.

    News Media

    Revenues in the quarter decreased $17 million, or 3%, as compared to the prior year, driven by a $42 million, or 7%, negative impact from foreign currency fluctuations, partially offset by higher circulation and subscription and advertising revenues in constant currency. Within the segment, revenues at News Corp Australia and News UK decreased 5% and 4%, respectively, as both were impacted by negative foreign currency fluctuations. On a constant currency basis, revenues at News Corp Australia and News UK increased 1% and 6%, respectively. Adjusted Revenues for the segment increased 4% compared to the prior year.

    Circulation and subscription revenues decreased $11 million, or 4%, compared to the prior year, primarily due to a $21 million, or 8%, negative impact from foreign currency fluctuations and lower print volume. The decline was partially offset by cover price increases and digital subscriber growth.

    Advertising revenues decreased $11 million, or 5%, compared to the prior year, primarily due to a $15 million, or 7%, negative impact from foreign currency fluctuations, lower digital advertising at News Corp Australia, and lower print advertising at News UK. The decline was partially offset by growth in digital advertising at News UK and higher print advertising at News Corp Australia.

    In the quarter, Segment EBITDA decreased $5 million, or 13%, compared to the prior year, driven by lower revenues, as discussed above, and reflects a $4 million, or 10%, negative impact from foreign currency fluctuations. The decline was also due to a $14 million negative impact from higher newsprint prices and approximately $13 million of higher costs related to TalkTV and other digital investments, primarily at News Corp Australia. The Segment EBITDA decline was partially offset by cost saving initiatives. Newsprint, production and distribution costs are expected to be higher in fiscal 2023 than the prior year due to supply chain and inflationary pressures, partially offset by the Company’s continued transition to digital products. Adjusted Segment EBITDA decreased 5%.

    Digital revenues represented 36% of News Media segment revenues in the quarter, compared to 35% in the prior year, and represented 34% 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 as of March 31, 2023 were 1,043,000 (937,000 for news mastheads), compared to 946,000 (876,000 for news mastheads) in the prior year (Source: Internal data)
    • The Times and Sunday Times closing digital subscribers, including the Times Literary Supplement, as of March 31, 2023 were 494,000, compared to 421,000 in the prior year (Source: Internal data)
    • The Sun’s digital offering reached 199 million global monthly unique users in March 2023, compared to 171 million in the prior year (Source: Google Analytics)
    • New York Post’s digital network reached 147 million unique users in March 2023, compared to 155 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 and free cash flow available to News Corporation:

     

    For the nine months ended
    March 31,

     

     

    2023

     

     

     

    2022

     

     

    (in millions)

    Net cash provided by operating activities

    $

    670

     

     

    $

    1,030

     

    Less: Capital expenditures

     

    (350

    )

     

     

    (315

    )

    Free cash flow

     

    320

     

     

     

    715

     

    Less: REA Group free cash flow

     

    (153

    )

     

     

    (184

    )

    Plus: Cash dividends received from REA Group

     

    91

     

     

     

    87

     

    Free cash flow available to News Corporation

    $

    258

     

     

    $

    618

     

    Net cash provided by operating activities of $670 million for the nine months ended March 31, 2023 was $360 million lower than $1,030 million in the prior year, primarily due to lower Total Segment EBITDA, as noted above, and higher working capital, partially offset by lower restructuring and tax payments.

    Free cash flow in the nine months ended March 31, 2023 was $320 million compared to $715 million in the prior year. Free cash flow available to News Corporation in the nine months ended March 31, 2023 was $258 million compared to $618 million in the prior year period. The decrease in both free cash flow and free cash flow available to News Corporation was primarily due to lower cash provided by operating activities, as mentioned above, and higher capital expenditures. Foxtel’s capital expenditures for the nine months ended March 31, 2023 were $118 million compared to $125 million in the prior year.

    Free cash flow and free cash flow available to News Corporation are non-GAAP financial measures. Free cash flow is defined as net cash provided by operating activities, less capital expenditures, and free cash flow available to News Corporation is defined as free cash flow, less REA Group free cash flow, plus cash dividends received from REA Group.

    The Company believes free cash flow provides useful information to management and investors about the Company’s liquidity and cash flow trends. The Company believes free cash flow available to News Corporation, which adjusts free cash flow to exclude REA Group’s free cash flow and include dividends received from REA Group, provides management and investors with a measure of the amount of cash flow that is readily available to the Company, as REA Group is a separately listed public company in Australia and must declare a dividend in order for the Company to have access to its share of REA Group’s cash balance. The Company believes free cash flow available to News Corporation provides a more conservative view of the Company’s free cash flow because this presentation includes only that amount of cash the Company actually receives from REA Group, which has generally been lower than the Company’s unadjusted free cash flow. A limitation of both free cash flow and free cash flow available to News Corporation is that they do not represent the total increase or decrease in the cash balance for the period. Management compensates for the limitation of free cash flow and free cash flow available to News Corporation by also relying on the net change in cash and cash equivalents as presented in the Company’s consolidated statements of cash flows prepared in accordance with GAAP which incorporates all cash movements during the period.

    COMPARISON OF NON-GAAP TO U.S. GAAP INFORMATION

    Adjusted Revenues, Total Segment EBITDA, Adjusted Total Segment EBITDA, Adjusted Segment EBITDA, adjusted net income attributable to News Corporation stockholders, Adjusted EPS, constant currency revenues, free cash flow and free cash flow available to News Corporation are non-GAAP financial measures contained in this earnings release. The Company believes these measures are important tools for investors and analysts to use in assessing the Company’s underlying business performance and to provide for more meaningful comparisons of the Company’s operating performance between periods. These measures also allow investors and analysts to view the Company’s business from the same perspective as Company management. These non-GAAP measures may be different than similar measures used by other companies and should be considered in addition to, not as a substitute for, measures of financial performance calculated in accordance with GAAP. Reconciliations for the differences between non-GAAP measures used in this earnings release and comparable financial measures calculated in accordance with U.S. GAAP are included in Notes 1, 2, 3 and 4 and the reconciliation of net cash provided by operating activities to free cash flow and free cash flow available to News Corporation is included above.

    Conference call

    News Corporation’s earnings conference call can be heard live at 5:00 p.m. EDT on May 11, 2023. To listen to the call, please visit http://investors.newscorp.com.

    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, the Company’s strategy and strategic initiatives, including potential acquisitions, investments and dispositions, the Company’s cost savings initiatives, including announced headcount reductions, 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, uncertainties and other factors described in the Company’s filings with the Securities and Exchange Commission. More detailed information about factors that could affect future results is contained in our filings with the Securities and Exchange Commission. The “forward-looking statements” included in this document are made only as of the date of this document and we do not have and do not undertake any obligation to publicly update any “forward-looking statements” to reflect subsequent events or circumstances, and we expressly disclaim any such obligation, except as required by law or regulation.

    About News Corporation

    News Corp (Nasdaq: NWS, NWSA; ASX: NWS, NWSLV) is a global, diversified media and information services company focused on creating and distributing authoritative and engaging content and other products and services. The company comprises businesses across a range of media, including: digital real estate services, subscription video services in Australia, news and information services and book publishing. Headquartered in New York, News Corp operates primarily in the United States, Australia, and the United Kingdom, and its content and other products and services are distributed and consumed worldwide. More information is available at: www.newscorp.com.

     

    NEWS CORPORATION

     

    CONSOLIDATED STATEMENTS OF OPERATIONS

    (Unaudited; in millions, except per share amounts)

     

     

    For the three months ended
    March 31,

     

    For the nine months ended
    March 31,

     

     

    2023

     

     

     

    2022

     

     

     

    2023

     

     

     

    2022

     

    Revenues:

     

     

     

     

     

     

     

    Circulation and subscription

    $

    1,122

     

     

    $

    1,099

     

     

    $

    3,318

     

     

    $

    3,248

     

    Advertising

     

    393

     

     

     

    418

     

     

     

    1,263

     

     

     

    1,342

     

    Consumer

     

    495

     

     

     

    497

     

     

     

    1,474

     

     

     

    1,615

     

    Real estate

     

    272

     

     

     

    316

     

     

     

    896

     

     

     

    988

     

    Other

     

    165

     

     

     

    162

     

     

     

    495

     

     

     

    518

     

    Total Revenues

     

    2,447

     

     

     

    2,492

     

     

     

    7,446

     

     

     

    7,711

     

    Operating expenses

     

    (1,286

    )

     

     

    (1,246

    )

     

     

    (3,853

    )

     

     

    (3,769

    )

    Selling, general and administrative

     

    (841

    )

     

     

    (888

    )

     

     

    (2,514

    )

     

     

    (2,588

    )

    Depreciation and amortization

     

    (183

    )

     

     

    (172

    )

     

     

    (536

    )

     

     

    (505

    )

    Impairment and restructuring charges

     

    (25

    )

     

     

    (37

    )

     

     

    (65

    )

     

     

    (82

    )

    Equity losses of affiliates

     

    (10

    )

     

     

    (4

    )

     

     

    (43

    )

     

     

    (10

    )

    Interest expense, net

     

    (25

    )

     

     

    (25

    )

     

     

    (78

    )

     

     

    (68

    )

    Other, net

     

    14

     

     

     

    13

     

     

     

    (10

    )

     

     

    143

     

    Income before income tax expense

     

    91

     

     

     

    133

     

     

     

    347

     

     

     

    832

     

    Income tax expense

     

    (32

    )

     

     

    (29

    )

     

     

    (128

    )

     

     

    (199

    )

    Net income

     

    59

     

     

     

    104

     

     

     

    219

     

     

     

    633

     

    Less: Net income attributable to noncontrolling interests

     

    (9

    )

     

     

    (22

    )

     

     

    (62

    )

     

     

    (120

    )

    Net income attributable to News Corporation stockholders

    $

    50

     

     

    $

    82

     

     

    $

    157

     

     

    $

    513

     

     

     

     

     

     

     

     

     

    Weighted average shares outstanding:

     

     

     

     

     

     

     

    Basic

     

    575

     

     

     

    589

     

     

     

    578

     

     

     

    591

     

    Diluted

     

    578

     

     

     

    592

     

     

     

    580

     

     

     

    594

     

     

     

     

     

     

     

     

     

    Net income attributable to News Corporation stockholders per share:

     

     

     

     

     

     

     

    Basic

    $

    0.09

     

     

    $

    0.14

     

     

    $

    0.27

     

     

    $

    0.87

     

    Diluted

    $

    0.09

     

     

    $

    0.14

     

     

    $

    0.27

     

     

    $

    0.86

     

     

    NEWS CORPORATION

     

    CONSOLIDATED BALANCE SHEETS

    (Unaudited; in millions)

     

     

    As of March 31,
    2023

     

    As of June 30,
    2022

    ASSETS

     

     

     

    Current assets:

     

     

     

    Cash and cash equivalents

    $

    1,659

     

     

    $

    1,822

     

    Receivables, net

     

    1,540

     

     

     

    1,502

     

    Inventory, net

     

    356

     

     

     

    311

     

    Other current assets

     

    477

     

     

     

    458

     

    Total current assets

     

    4,032

     

     

     

    4,093

     

     

     

     

     

    Non-current assets:

     

     

     

    Investments

     

    506

     

     

     

    488

     

    Property, plant and equipment, net

     

    2,017

     

     

     

    2,103

     

    Operating lease right-of-use assets

     

    1,022

     

     

     

    891

     

    Intangible assets, net

     

    2,542

     

     

     

    2,671

     

    Goodwill

     

    5,136

     

     

     

    5,169

     

    Deferred income tax assets

     

    368

     

     

     

    422

     

    Other non-current assets

     

    1,411

     

     

     

    1,384

     

    Total assets

    $

    17,034

     

     

    $

    17,221

     

     

     

     

     

    LIABILITIES AND EQUITY

     

     

     

    Current liabilities:

     

     

     

    Accounts payable

    $

    407

     

     

    $

    411

     

    Accrued expenses

     

    1,164

     

     

     

    1,236

     

    Deferred revenue

     

    623

     

     

     

    604

     

    Current borrowings

     

    27

     

     

     

    293

     

    Other current liabilities

     

    983

     

     

     

    975

     

    Total current liabilities

     

    3,204

     

     

     

    3,519

     

     

     

     

     

    Non-current liabilities:

     

     

     

    Borrowings

     

    2,960

     

     

     

    2,776

     

    Retirement benefit obligations

     

    156

     

     

     

    155

     

    Deferred income tax liabilities

     

    172

     

     

     

    198

     

    Operating lease liabilities

     

    1,093

     

     

     

    947

     

    Other non-current liabilities

     

    465

     

     

     

    483

     

    Commitments and contingencies

     

     

     

    Equity:

     

     

     

    Class A common stock

     

    4

     

     

     

    4

     

    Class B common stock

     

    2

     

     

     

    2

     

    Additional paid-in capital

     

    11,486

     

     

     

    11,779

     

    Accumulated deficit

     

    (2,136

    )

     

     

    (2,293

    )

    Accumulated other comprehensive loss

     

    (1,279

    )

     

     

    (1,270

    )

    Total News Corporation stockholders' equity

     

    8,077

     

     

     

    8,222

     

    Noncontrolling interests

     

    907

     

     

     

    921

     

    Total equity

     

    8,984

     

     

     

    9,143

     

    Total liabilities and equity

    $

    17,034

     

     

    $

    17,221

     

     

    NEWS CORPORATION

     

    CONSOLIDATED STATEMENTS OF CASH FLOWS

    (Unaudited; in millions)

     

     

    For the nine months ended
    March 31,

     

     

    2023

     

     

     

    2022

     

    Operating activities:

     

     

     

    Net income

    $

    219

     

     

    $

    633

     

    Adjustments to reconcile net income to net cash provided by operating activities:

     

     

     

    Depreciation and amortization

     

    536

     

     

     

    505

     

    Operating lease expense

     

    82

     

     

     

    95

     

    Equity losses of affiliates

     

    43

     

     

     

    10

     

    Cash distributions received from affiliates

     

    7

     

     

     

    20

     

    Impairment charges

     

     

     

     

    15

     

    Other, net

     

    10

     

     

     

    (143

    )

    Deferred income taxes and taxes payable

     

    27

     

     

     

    69

     

    Change in operating assets and liabilities, net of acquisitions:

     

     

     

    Receivables and other assets

     

    (236

    )

     

     

    (62

    )

    Inventories, net

     

    (55

    )

     

     

    (82

    )

    Accounts payable and other liabilities

     

    37

     

     

     

    (30

    )

    Net cash provided by operating activities

     

    670

     

     

     

    1,030

     

    Investing activities:

     

     

     

    Capital expenditures

     

    (350

    )

     

     

    (315

    )

    Acquisitions, net of cash acquired

     

    (15

    )

     

     

    (1,167

    )

    Investments in equity affiliates and other

     

    (105

    )

     

     

    (99

    )

    Proceeds from property, plant and equipment and other asset dispositions

     

    51

     

     

     

    (2

    )

    Other, net

     

    (21

    )

     

     

    29

     

    Net cash used in investing activities

     

    (440

    )

     

     

    (1,554

    )

    Financing activities:

     

     

     

    Borrowings

     

    434

     

     

     

    1,157

     

    Repayment of borrowings

     

    (506

    )

     

     

    (662

    )

    Repurchase of shares

     

    (196

    )

     

     

    (125

    )

    Dividends paid

     

    (116

    )

     

     

    (114

    )

    Other, net

     

    2

     

     

     

    (82

    )

    Net cash (used in) provided by financing activities

     

    (382

    )

     

     

    174

     

    Net change in cash and cash equivalents

     

    (152

    )

     

     

    (350

    )

    Cash and cash equivalents, beginning of period

     

    1,822

     

     

     

    2,236

     

    Exchange movement on opening cash balance

     

    (11

    )

     

     

    (21

    )

    Cash and cash equivalents, end of period

    $

    1,659

     

     

    $

    1,865

     

     

     

     

     

    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 to Total Segment EBITDA for the three and nine months ended March 31, 2023 and 2022:

     

     

    For the three months ended March 31,

     

     

    2023

     

     

     

    2022

     

     

    Change

     

    % Change

     

    (in millions)

     

     

    Net income

    $

    59

     

     

    $

    104

     

     

    $

    (45

    )

     

    (43

    )%

    Add:

     

     

     

     

     

     

     

    Income tax expense

     

    32

     

     

     

    29

     

     

     

    3

     

     

    10

    %

    Other, net

     

    (14

    )

     

     

    (13

    )

     

     

    (1

    )

     

    (8

    )%

    Interest expense, net

     

    25

     

     

     

    25

     

     

     

     

     

    %

    Equity losses of affiliates

     

    10

     

     

     

    4

     

     

     

    6

     

     

    **

    Impairment and restructuring charges

     

    25

     

     

     

    37

     

     

     

    (12

    )

     

    (32

    )%

    Depreciation and amortization

     

    183

     

     

     

    172

     

     

     

    11

     

     

    6

    %

    Total Segment EBITDA

    $

    320

     

     

    $

    358

     

     

    $

    (38

    )

     

    (11

    )%

    ** - Not meaningful

     

     

    For the nine months ended March 31,

     

     

    2023

     

     

     

    2022

     

     

    Change

     

    % Change

     

    (in millions)

     

     

    Net income

    $

    219

     

     

    $

    633

     

     

    $

    (414

    )

     

    (65

    )%

    Add:

     

     

     

     

     

     

     

    Income tax expense

     

    128

     

     

     

    199

     

     

     

    (71

    )

     

    (36

    )%

    Other, net

     

    10

     

     

    (143

    )

     

     

    153

     

     

    **

    Interest expense, net

     

    78

     

     

     

    68

     

     

     

    10

     

     

    15

    %

    Equity losses of affiliates

     

    43

     

     

     

    10

     

     

     

    33

     

     

    **

    Impairment and restructuring charges

     

    65

     

     

     

    82

     

     

     

    (17

    )

     

    (21

    )%

    Depreciation and amortization

     

    536

     

     

     

    505

     

     

     

    31

     

     

    6

    %

    Total Segment EBITDA

    $

    1,079

     

     

    $

    1,354

     

     

    $

    (275

    )

     

    (20

    )%

    ** - 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”), charges for other significant, non-ordinary course legal or regulatory matters (“litigation charges”) 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 U.S. dollar by multiplying the results for each quarter in the current period by the difference between the average exchange rate for that quarter and the average exchange rate in effect during the corresponding quarter of the prior year and totaling the impact for all quarters in the current period.

    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 nine months ended March 31, 2023 and 2022:

     

     

    Revenues

     

     

    Total Segment EBITDA

     

    For the three months ended
    March 31,

     

     

    For the three months ended
    March 31,

     

     

    2023

     

     

     

    2022

     

     

    Difference

     

     

     

    2023

     

     

     

    2022

     

     

    Difference

     

    (in millions)

     

     

    (in millions)

    As reported

    $

    2,447

     

     

    $

    2,492

     

     

    $

    (45

    )

     

     

    $

    320

     

     

    $

    358

     

     

    $

    (38

    )

    Impact of acquisitions

     

    (51

    )

     

     

     

     

     

    (51

    )

     

     

     

    (16

    )

     

     

    15

     

     

     

    (31

    )

    Impact of divestitures

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Impact of foreign currency fluctuations

     

    98

     

     

     

     

     

     

    98

     

     

     

     

    13

     

     

     

     

     

     

    13

     

    Net impact of U.K. Newspaper Matters

     

     

     

     

     

     

     

     

     

     

     

    4

     

     

     

    3

     

     

     

    1

     

    As adjusted

    $

    2,494

     

     

    $

    2,492

     

     

    $

    2

     

     

     

    $

    321

     

     

    $

    376

     

     

    $

    (55

    )

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Revenues

     

     

    Total Segment EBITDA

     

    For the nine months ended
    March 31,

     

     

    For the nine months ended
    March 31,

     

     

    2023

     

     

     

    2022

     

     

    Difference

     

     

     

    2023

     

     

     

    2022

     

     

    Difference

     

    (in millions)

     

     

    (in millions)

    As reported

    $

    7,446

     

     

    $

    7,711

     

     

    $

    (265

    )

     

     

    $

    1,079

     

     

    $

    1,354

     

     

    $

    (275

    )

    Impact of acquisitions

     

    (177

    )

     

     

     

     

     

    (177

    )

     

     

     

    (47

    )

     

     

    15

     

     

     

    (62

    )

    Impact of divestitures

     

     

     

     

    (1

    )

     

     

    1

     

     

     

     

     

     

     

    5

     

     

    (5

    )

    Impact of foreign currency fluctuations

     

    422

     

     

     

     

     

     

    422

     

     

     

     

    66

     

     

     

     

     

     

    66

     

    Net impact of U.K. Newspaper Matters

     

     

     

     

     

     

     

     

     

     

     

    13

     

     

     

    9

     

     

     

    4

     

    As adjusted

    $

    7,691

     

     

    $

    7,710

     

     

    $

    (19

    )

     

     

    $

    1,111

     

     

    $

    1,383

     

     

    $

    (272

    )

     

     

     

     

     

     

     

     

     

     

     

     

     

    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 during the nine months ended March 31, 2023 and 2022 are as follows:

     

    Fiscal Year 2023

     

    Q1

     

    Q2

     

    Q3

    U.S. Dollar per Australian Dollar

    $0.68

     

    $0.66

     

    $0.68

    U.S. Dollar per British Pound Sterling

    $1.17

     

    $1.17

     

    $1.22

     

     

     

     

     

     

     

    Fiscal Year 2022

     

    Q1

     

    Q2

     

    Q3

    U.S. Dollar per Australian Dollar

    $0.74

     

    $0.73

     

    $0.72

    U.S. Dollar per British Pound Sterling

    $1.38

     

    $1.35

     

    $1.34

    Adjusted Revenues and Adjusted Segment EBITDA by segment for the three and nine months ended March 31, 2023 and 2022 are as follows:

     

     

    For the three months ended March 31,

     

     

    2023

     

     

     

    2022

     

     

    % Change

     

    (in millions)

     

    Better/(Worse)

    Adjusted Revenues:

     

     

     

     

     

    Digital Real Estate Services

    $

    374

     

     

    $

    416

     

     

    (10

    )%

    Subscription Video Services

     

    505

     

     

     

    494

     

     

    2

    %

    Dow Jones

     

    487

     

     

     

    487

     

     

    %

    Book Publishing

     

    524

     

     

     

    515

     

     

    2

    %

    News Media

     

    604

     

     

     

    580

     

     

    4

    %

    Other

     

     

     

     

     

     

    %

    Adjusted Total Revenues

    $

    2,494

     

     

    $

    2,492

     

     

    %

     

     

     

     

     

     

    Adjusted Segment EBITDA:

     

     

     

     

     

    Digital Real Estate Services

    $

    104

     

     

    $

    137

     

     

    (24

    )%

    Subscription Video Services

     

    72

     

     

     

    79

     

     

    (9

    )%

    Dow Jones

     

    92

     

     

     

    103

     

     

    (11

    )%

    Book Publishing

     

    62

     

     

     

    67

     

     

    (7

    )%

    News Media

     

    37

     

     

     

    39

     

     

    (5

    )%

    Other

     

    (46

    )

     

     

    (49

    )

     

    6

    %

    Adjusted Total Segment EBITDA

    $

    321

     

     

    $

    376

     

     

    (15

    )%

     

     

    For the nine months ended March 31,

     

     

    2023

     

     

     

    2022

     

     

    % Change

     

    (in millions)

     

    Better/(Worse)

    Adjusted Revenues:

     

     

     

     

     

    Digital Real Estate Services

    $

    1,220

     

     

    $

    1,297

     

     

    (6

    )%

    Subscription Video Services

     

    1,561

     

     

     

    1,502

     

     

    4

    %

    Dow Jones

     

    1,474

     

     

     

    1,439

     

     

    2

    %

    Book Publishing

     

    1,580

     

     

     

    1,678

     

     

    (6

    )%

    News Media

     

    1,856

     

     

     

    1,794

     

     

    3

    %

    Other

     

     

     

     

     

     

    %

    Adjusted Total Revenues

    $

    7,691

     

     

    $

    7,710

     

     

    %

     

     

     

     

     

     

    Adjusted Segment EBITDA:

     

     

     

     

     

    Digital Real Estate Services

    $

    376

     

     

    $

    458

     

     

    (18

    )%

    Subscription Video Services

     

    292

     

     

     

    279

     

     

    5

    %

    Dow Jones

     

    307

     

     

     

    342

     

     

    (10

    )%

    Book Publishing

     

    156

     

     

     

    259

     

     

    (40

    )%

    News Media

     

    119

     

     

     

    184

     

     

    (35

    )%

    Other

     

    (139

    )

     

     

    (139

    )

     

    %

    Adjusted Total Segment EBITDA

    $

    1,111

     

     

    $

    1,383

     

     

    (20

    )%

     

     

     

     

     

     

    The following tables reconcile reported revenues and Segment EBITDA by segment to Adjusted Revenues and Adjusted Segment EBITDA by segment for the three and nine months ended March 31, 2023 and 2022:

     

     

    For the three months ended March 31, 2023

     

    As Reported

     

    Impact of Acquisitions

     

    Impact of Divestitures

     

    Impact of Foreign Currency Fluctuations

     

    Net Impact of U.K. Newspaper Matters

     

    As Adjusted

     

    (in millions)

    Revenues:

     

     

     

     

     

     

     

     

     

     

     

    Digital Real Estate Services

    $

    363

     

     

    $

    (2

    )

     

    $

     

     

    $

    13

     

     

    $

     

     

    $

    374

     

    Subscription Video Services

     

    477

     

     

     

     

     

     

     

     

     

    28

     

     

     

     

     

     

    505

     

    Dow Jones

     

    529

     

     

     

    (46

    )

     

     

     

     

    4

     

     

     

     

    487

     

    Book Publishing

     

    515

     

     

     

    (2

    )

     

     

     

     

     

    11

     

     

     

     

     

     

    524

     

    News Media

     

    563

     

     

     

    (1

    )

     

     

     

     

     

    42

     

     

     

     

     

     

    604

     

    Other

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Total Revenues

    $

    2,447

     

     

    $

    (51

    )

     

    $

     

     

    $

    98

     

     

    $

     

     

    $

    2,494

     

     

     

     

     

     

     

     

     

     

     

     

     

    Segment EBITDA:

     

     

     

     

     

     

     

     

     

     

     

    Digital Real Estate Services

    $

    102

     

     

    $

    (3

    )

     

    $

     

     

    $

    5

     

     

    $

     

     

    $

    104

     

    Subscription Video Services

     

    68

     

     

     

     

     

     

     

     

     

    4

     

     

     

     

     

     

    72

     

    Dow Jones

     

    109

     

     

     

    (17

    )

     

     

     

     

     

     

     

     

     

     

     

    92

     

    Book Publishing

     

    61

     

     

     

    1

     

     

     

     

     

     

     

     

     

     

     

     

    62

     

    News Media

     

    34

     

     

     

    (1

    )

     

     

     

     

     

    4

     

     

     

     

     

     

    37

     

    Other

     

    (54

    )

     

     

    4

     

     

     

     

     

     

     

     

     

    4

     

     

     

    (46

    )

    Total Segment EBITDA

    $

    320

     

     

    $

    (16

    )

     

    $

     

     

    $

    13

     

     

    $

    4

     

     

    $

    321

     

     

     

    For the nine months ended March 31, 2023

     

    As Reported

     

    Impact of Acquisitions

     

    Impact of Divestitures

     

    Impact of Foreign Currency Fluctuations

     

    Net Impact of U.K. Newspaper Matters

     

    As Adjusted

     

    (in millions)

    Revenues:

     

     

     

     

     

     

     

     

     

     

     

    Digital Real Estate Services

    $

    1,170

     

     

    $

    (9

    )

     

    $

     

     

    $

    59

     

     

    $

     

     

    $

    1,220

     

    Subscription Video Services

     

    1,441

     

     

     

     

     

     

     

     

     

    120

     

     

     

     

     

     

    1,561

     

    Dow Jones

     

    1,607

     

     

     

    (152

    )

     

     

     

     

    19

     

     

     

     

    1,474

     

    Book Publishing

     

    1,533

     

     

     

    (8

    )

     

     

     

     

     

    55

     

     

     

     

     

     

    1,580

     

    News Media

     

    1,695

     

     

     

    (8

    )

     

     

     

     

     

    169

     

     

     

     

     

     

    1,856

     

    Other

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Total Revenues

    $

    7,446

     

     

    $

    (177

    )

     

    $

     

     

    $

    422

     

     

    $

     

     

    $

    7,691

     

     

     

     

     

     

     

     

     

     

     

     

     

    Segment EBITDA:

     

     

     

     

     

     

     

     

     

     

     

    Digital Real Estate Services

    $

    349

     

     

    $

     

     

    $

     

     

    $

    27

     

     

    $

     

     

    $

    376

     

    Subscription Video Services

     

    269

     

     

     

     

     

     

     

     

     

    23

     

     

     

     

     

     

    292

     

    Dow Jones

     

    361

     

     

     

    (54

    )

     

     

     

     

     

     

     

     

     

     

     

    307

     

    Book Publishing

     

    151

     

     

     

     

     

     

     

     

     

    5

     

     

     

     

     

     

    156

     

    News Media

     

    111

     

     

     

    (3

    )

     

     

     

     

     

    11

     

     

     

     

     

     

    119

     

    Other

     

    (162

    )

     

     

    10

     

     

     

     

     

     

     

     

     

    13

     

     

     

    (139

    )

    Total Segment EBITDA

    $

    1,079

     

     

    $

    (47

    )

     

    $

     

     

    $

    66

     

     

    $

    13

     

     

    $

    1,111

     

     

     

    For the three months ended March 31, 2022

     

    As Reported

     

    Impact of Acquisitions

     

    Impact of Divestitures

     

    Impact of Foreign Currency Fluctuations

     

    Net Impact of U.K. Newspaper Matters

     

    As Adjusted

     

    (in millions)

    Revenues:

     

     

     

     

     

     

     

     

     

     

     

    Digital Real Estate Services

    $

    416

     

     

    $

     

     

    $

     

     

    $

     

     

    $

     

     

    $

    416

     

    Subscription Video Services

     

    494

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    494

     

    Dow Jones

     

    487

     

     

     

     

     

     

     

     

     

     

     

    487

     

    Book Publishing

     

    515

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    515

     

    News Media

     

    580

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    580

     

    Other

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Total Revenues

    $

    2,492

     

     

    $

     

     

    $

     

     

    $

     

     

    $

     

     

    $

    2,492

     

     

     

     

     

     

     

     

     

     

     

     

     

    Segment EBITDA:

     

     

     

     

     

     

     

     

     

     

     

    Digital Real Estate Services

    $

    137

     

     

    $

     

     

    $

     

     

    $

     

     

    $

     

     

    $

    137

     

    Subscription Video Services

     

    79

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    79

     

    Dow Jones

     

    88

     

     

     

    15

     

     

     

     

     

     

     

     

     

     

     

     

    103

     

    Book Publishing

     

    67

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    67

     

    News Media

     

    39

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    39

     

    Other

     

    (52

    )

     

     

     

     

     

     

     

     

     

     

     

    3

     

     

     

    (49

    )

    Total Segment EBITDA

    $

    358

     

     

    $

    15

     

     

    $

     

     

    $

     

     

    $

    3

     

     

    $

    376

     

     

     

    For the nine months ended March 31, 2022

     

    As Reported

     

    Impact of Acquisitions

     

    Impact of Divestitures

     

    Impact of Foreign Currency Fluctuations

     

    Net Impact of U.K. Newspaper Matters

     

    As Adjusted

     

    (in millions)

    Revenues:

     

     

     

     

     

     

     

     

     

     

     

    Digital Real Estate Services

    $

    1,298

     

     

    $

     

     

    $

    (1

    )

     

    $

     

     

    $

     

     

    $

    1,297

     

    Subscription Video Services

     

    1,502

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    1,502

     

    Dow Jones

     

    1,439

     

     

     

     

     

     

     

     

     

     

     

    1,439

     

    Book Publishing

     

    1,678

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    1,678

     

    News Media

     

    1,794

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    1,794

     

    Other

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Total Revenues

    $

    7,711

     

     

    $

     

     

    $

    (1

    )

     

    $

     

     

    $

     

     

    $

    7,710

     

     

     

     

     

     

     

     

     

     

     

     

     

    Segment EBITDA:

     

     

     

     

     

     

     

     

     

     

     

    Digital Real Estate Services

    $

    453

     

     

    $

     

     

    $

    5

     

     

    $

     

     

    $

     

     

    $

    458

     

    Subscription Video Services

     

    279

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    279

     

    Dow Jones

     

    327

     

     

     

    15

     

     

     

     

     

     

     

     

     

     

     

     

    342

     

    Book Publishing

     

    259

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    259

     

    News Media

     

    184

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    184

     

    Other

     

    (148

    )

     

     

     

     

     

     

     

     

     

     

     

    9

     

     

     

    (139

    )

    Total Segment EBITDA

    $

    1,354

     

     

    $

    15

     

     

    $

    5

     

     

    $

     

     

    $

    9

     

     

    $

    1,383

     

     

    NOTE 3 – ADJUSTED NET INCOME (LOSS) ATTRIBUTABLE TO NEWS CORPORATION STOCKHOLDERS AND ADJUSTED EPS

    The Company uses net income (loss) attributable to News Corporation stockholders and diluted earnings per share (“EPS”) excluding expenses related to U.K. Newspaper Matters, litigation charges, impairment and restructuring charges and “Other, net”, net of tax, recognized by the Company or its equity method investees, as well as the settlement of certain pre-Separation tax matters (“adjusted net income (loss) attributable to News Corporation stockholders” and “adjusted EPS,” respectively), to evaluate the performance of the Company’s operations exclusive of certain items that impact the comparability of results from period to period, as well as certain non-operational items. The calculation of adjusted net income (loss) attributable to News Corporation stockholders and adjusted EPS 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 (loss) attributable to News Corporation stockholders and adjusted EPS are not measures of performance under generally accepted accounting principles and should not be construed as substitutes for consolidated net income (loss) attributable to News Corporation stockholders and net income (loss) 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.

    The following tables reconcile reported net income attributable to News Corporation stockholders and reported diluted EPS to adjusted net income attributable to News Corporation stockholders and adjusted EPS for the three and nine months ended March 31, 2023 and 2022:

     

     

    For the three months ended
    March 31, 2023

     

    For the three months ended
    March 31, 2022

    (in millions, except per share data)

    Net income attributable to stockholders

     

    EPS

     

    Net income attributable to stockholders

     

    EPS

    Net income

    $

    59

     

     

     

     

    $

    104

     

     

     

    Less: Net income attributable to noncontrolling interests

     

    (9

    )

     

     

     

     

    (22

    )

     

     

    Net income attributable to News Corporation stockholders

    $

    50

     

     

    $

    0.09

     

     

    $

    82

     

     

    $

    0.14

     

    U.K. Newspaper Matters

     

    4

     

     

     

    0.01

     

     

     

    3

     

     

     

    0.01

     

    Impairment and restructuring charges (a)

     

    25

     

     

     

    0.04

     

     

     

    37

     

     

     

    0.05

     

    Other, net

     

    (14

    )

     

     

    (0.03

    )

     

     

    (13

    )

     

     

    (0.02

    )

    Tax impact on items above

     

    (12

    )

     

     

    (0.02

    )

     

     

    (17

    )

     

     

    (0.03

    )

    Impact of noncontrolling interest on items above

     

     

     

     

     

     

     

    4

     

     

     

    0.01

     

    As adjusted

    $

    53

     

     

    $

    0.09

     

     

    $

    96

     

     

    $

    0.16

     

    (a)

     

    During the three months ended March 31, 2022, the Company recognized a non-cash impairment charge of $15 million related to the write-down of fixed assets associated with the shutdown and sale of certain U.S. printing facilities at the Dow Jones segment.

     

     

    For the nine months ended
    March 31, 2023

     

    For the nine months ended
    March 31, 2022

    (in millions, except per share data)

    Net income attributable to stockholders

     

    EPS

     

    Net income attributable to stockholders

     

    EPS

    Net income

    $

    219

     

     

     

     

    $

    633

     

     

     

    Less: Net income attributable to noncontrolling interests

     

    (62

    )

     

     

     

     

    (120

    )

     

     

    Net income attributable to News Corporation stockholders

    $

    157

     

     

    $

    0.27

     

     

    $

    513

     

     

    $

    0.86

     

    U.K. Newspaper Matters

     

    13

     

     

     

    0.02

     

     

     

    9

     

     

     

    0.02

     

    Impairment and restructuring charges (a)

     

    65

     

     

     

    0.11

     

     

     

    82

     

     

     

    0.14

     

    Equity losses of affiliates (b)

     

     

     

     

     

     

     

    3

     

     

     

    0.01

     

    Other, net

     

    10

     

     

     

    0.02

     

     

     

    (143

    )

     

     

    (0.24

    )

    Tax impact on items above

     

    (39

    )

     

     

    (0.07

    )

     

     

    (15

    )

     

     

    (0.03

    )

    Impact of noncontrolling interest on items above

     

    (1

    )

     

     

     

     

     

    45

     

     

     

    0.07

     

    As adjusted

    $

    205

     

     

    $

    0.35

     

     

    $

    494

     

     

    $

    0.83

     

    (a)

     

    During the nine months ended March 31, 2022, the Company recognized a non-cash impairment charge of $15 million related to the write-down of fixed assets associated with the shutdown and sale of certain U.S. printing facilities at the Dow Jones segment.

    (b)

     

    During the nine months ended March 31, 2022, the Company recognized a non-cash impairment charge related to an equity method investment.

     

    NOTE 4 – CONSTANT CURRENCY REVENUES

    The Company believes that the presentation of revenues excluding the impact of foreign currency fluctuations (“constant currency revenues”) provides useful information regarding the performance of the Company’s core business operations exclusive of distortions between periods caused by the unpredictability and volatility of currency fluctuations. The Company calculates the impact of foreign currency fluctuations for businesses reporting in currencies other than the U.S. dollar as described in Note 2.

    Constant currency revenues are not measures of performance under generally accepted accounting principles and should not be construed as substitutes for revenues as 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 to constant currency revenues for the three and nine months ended March 31, 2023:

     

     

    Q3 Fiscal 2022

     

    Q3 Fiscal 2023

     

    FX impact

     

    Q3 Fiscal 2023 constant currency

     

    % Change - reported

     

    % Change - constant currency

     

    ($ in millions)

     

    Better/(Worse)

    Consolidated results:

     

     

     

     

     

     

     

     

     

     

     

    Circulation and subscription

    $

    1,099

     

     

    $

    1,122

     

     

    $

    (50

    )

     

    $

    1,172

     

     

    2

    %

     

    7

    %

    Advertising

     

    418

     

     

     

    393

     

     

     

    (19

    )

     

     

    412

     

     

    (6

    )%

     

    (1

    )%

    Consumer

     

    497

     

     

     

    495

     

     

     

    (11

    )

     

     

    506

     

     

    %

     

    2

    %

    Real estate

     

    316

     

     

    272

     

     

    (9

    )

     

     

    281

     

    (14

    )%

     

    (11

    )%

    Other

     

    162

     

     

     

    165

     

     

     

    (9

    )

     

     

    174

     

     

    2

    %

     

    7

    %

    Total revenues

    $

    2,492

     

     

    $

    2,447

     

     

    $

    (98

    )

     

    $

    2,545

     

     

    (2

    )%

     

    2

    %

     

     

     

     

     

     

     

     

     

     

     

     

    Digital Real Estate Services:

     

     

     

     

     

     

     

     

     

     

     

    Circulation and subscription

    $

    3

     

     

    $

    3

     

     

    $

     

     

    $

    3

     

     

    %

     

    %

    Advertising

     

    33

     

     

     

    35

     

     

     

    (1

    )

     

    $

    36

     

     

    6

    %

     

    9

    %

    Real estate

     

    316

     

     

     

    272

     

     

     

    (9

    )

     

    $

    281

     

     

    (14

    )%

     

    (11

    )%

    Other

     

    64

     

     

     

    53

     

     

     

    (3

    )

     

    $

    56

     

     

    (17

    )%

     

    (13

    )%

    Total Digital Real Estate Services segment revenues

    $

    416

     

     

    $

    363

     

     

    $

    (13

    )

     

    $

    376

     

     

    (13

    )%

     

    (10

    )%

     

     

     

     

     

     

     

     

     

     

     

     

    REA Group revenues

    $

    246

     

     

    $

    222

     

     

    $

    (13

    )

     

    $

    235

     

     

    (10

    )%

     

    (4

    )%

     

     

     

     

     

     

     

     

     

     

     

     

    Subscription Video Services:

     

     

     

     

     

     

     

     

     

     

     

    Circulation and subscription

    $

    434

     

     

    $

    419

     

     

    $

    (25

    )

     

    $

    444

     

     

    (3

    )%

     

    2

    %

    Advertising

     

    51

     

     

     

    49

     

     

     

    (3

    )

     

    $

    52

     

     

    (4

    )%

     

    2

    %

    Other

     

    9

     

     

     

    9

     

     

     

     

     

    $

    9

     

     

    %

     

    %

    Total Subscription Video Services segment revenues

    $

    494

     

     

    $

    477

     

     

    $

    (28

    )

     

    $

    505

     

     

    (3

    )%

     

    2

    %

     

     

    Q3 Fiscal 2022

     

    Q3 Fiscal 2023

     

    FX impact

     

    Q3 Fiscal 2023 constant currency

     

    % Change - reported

     

    % Change - constant currency

     

    ($ in millions)

     

    Better/(Worse)

    Dow Jones:

     

     

     

     

     

     

     

     

     

     

     

    Circulation and subscription

    $

    377

     

     

    $

    426

     

     

    $

    (4

    )

     

    $

    430

     

     

    13

    %

     

    14

    %

    Advertising

     

    102

     

     

     

    88

     

     

     

     

     

    $

    88

     

     

    (14

    )%

     

    (14

    )%

    Other

     

    8

     

     

    15

     

     

     

     

    $

    15

     

    88

    %

     

    88

    %

    Total Dow Jones segment revenues

    $

    487

     

     

    $

    529

     

     

    $

    (4

    )

     

    $

    533

     

     

    9

    %

     

    9

    %

     

     

     

     

     

     

     

     

     

     

     

     

    Book Publishing:

     

     

     

     

     

     

     

     

     

     

     

    Consumer

     

    497

     

     

     

    495

     

     

     

    (11

    )

     

    $

    506

     

     

    %

     

    2

    %

    Other

     

    18

     

     

     

    20

     

     

     

     

     

    $

    20

     

     

    11

    %

     

    11

    %

    Total Book Publishing segment revenues

    $

    515

     

     

    $

    515

     

     

    $

    (11

    )

     

    $

    526

     

     

    %

     

    2

    %

     

     

     

     

     

     

     

     

     

     

     

     

    News Media:

     

     

     

     

     

     

     

     

     

     

     

    Circulation and subscription

    $

    285

     

     

    $

    274

     

     

    $

    (21

    )

     

    $

    295

     

     

    (4

    )%

     

    4

    %

    Advertising

     

    232

     

     

     

    221

     

     

     

    (15

    )

     

    $

    236

     

     

    (5

    )%

     

    2

    %

    Other

     

    63

     

     

     

    68

     

     

     

    (6

    )

     

    $

    74

     

     

    8

    %

     

    17

    %

    Total News Media segment revenues

    $

    580

     

     

    $

    563

     

     

    $

    (42

    )

     

    $

    605

     

     

    (3

    )%

     

    4

    %

     

     

     

     

     

     

     

     

     

     

     

     

    News UK

     

     

     

     

     

     

     

     

     

     

     

    Circulation and subscription

    $

    144

     

     

    $

    135

     

     

    $

    (14

    )

     

    $

    149

     

     

    (6

    )%

     

    3

    %

    Advertising

     

    72

     

     

     

    72

     

     

     

    (6

    )

     

    $

    78

     

     

    %

     

    8

    %

    Other

     

    28

     

     

     

    28

     

     

     

    (3

    )

     

    $

    31

     

     

    %

     

    11

    %

    Total News UK revenues

    $

    244

     

     

    $

    235

     

     

    $

    (23

    )

     

    $

    258

     

     

    (4

    )%

     

    6

    %

     

     

     

     

     

     

     

     

     

     

     

     

    News Corp Australia

     

     

     

     

     

     

     

     

     

     

     

    Circulation and subscription

    $

    119

     

     

    $

    112

     

     

    $

    (7

    )

     

    $

    119

     

     

    (6

    )%

     

    %

    Advertising

     

    105

     

     

     

    99

     

     

     

    (6

    )

     

    $

    105

     

     

    (6

    )%

     

    %

    Other

     

    31

     

     

     

    31

     

     

     

    (2

    )

     

    $

    33

     

     

    %

     

    6

    %

    Total News Corp Australia revenues

    $

    255

     

     

    $

    242

     

     

    $

    (15

    )

     

    $

    257

     

     

    (5

    )%

     

    1

    %

     

     

    Q3 YTD Fiscal 2022

     

    Q3 YTD Fiscal 2023

     

    FX impact

     

    Q3 YTD Fiscal 2023 constant currency

     

    % Change - reported

     

    % Change - constant currency

     

    ($ in millions)

     

    Better/(Worse)

    Consolidated results:

     

     

     

     

     

     

     

     

     

     

     

    Circulation and subscription

    $

    3,248

     

     

    $

    3,318

     

     

    $

    (207

    )

     

    $

    3,525

     

     

    2

    %

     

    9

    %

    Advertising

     

    1,342

     

     

     

    1,263

     

     

     

    (80

    )

     

     

    1,343

     

     

    (6

    )%

     

    %

    Consumer

     

    1,615

     

     

     

    1,474

     

     

     

    (55

    )

     

     

    1,529

     

     

    (9

    )%

     

    (5

    )%

    Real estate

     

    988

     

     

    896

     

     

    (43

    )

     

     

    939

     

    (9

    )%

     

    (5

    )%

    Other

     

    518

     

     

     

    495

     

     

     

    (37

    )

     

     

    532

     

     

    (4

    )%

     

    3

    %

    Total revenues

    $

    7,711

     

     

    $

    7,446

     

     

    $

    (422

    )

     

    $

    7,868

     

     

    (3

    )%

     

    2

    %

     

     

     

     

     

     

     

     

     

     

     

     

    Digital Real Estate Services:

     

     

     

     

     

     

     

     

     

     

     

    Circulation and subscription

    $

    9

     

     

    $

    9

     

     

    $

     

     

    $

    9

     

     

    %

     

    %

    Advertising

     

    99

     

     

     

    103

     

     

     

    (3

    )

     

    $

    106

     

     

    4

    %

     

    7

    %

    Real estate

     

    988

     

     

     

    896

     

     

     

    (43

    )

     

    $

    939

     

     

    (9

    )%

     

    (5

    )%

    Other

     

    202

     

     

     

    162

     

     

     

    (13

    )

     

    $

    175

     

     

    (20

    )%

     

    (13

    )%

    Total Digital Real Estate Services segment revenues

    $

    1,298

     

     

    $

    1,170

     

     

    $

    (59

    )

     

    $

    1,229

     

     

    (10

    )%

     

    (5

    )%

     

     

     

     

     

     

     

     

     

     

     

     

    REA Group revenues

    $

    779

     

     

    $

    714

     

     

    $

    (59

    )

     

    $

    773

     

     

    (8

    )%

     

    (1

    )%

     

     

     

     

     

     

     

     

     

     

     

     

    Subscription Video Services:

     

     

     

     

     

     

     

     

     

     

     

    Circulation and subscription

    $

    1,307

     

     

    $

    1,249

     

     

    $

    (104

    )

     

    $

    1,353

     

     

    (4

    )%

     

    4

    %

    Advertising

     

    165

     

     

     

    160

     

     

     

    (13

    )

     

    $

    173

     

     

    (3

    )%

     

    5

    %

    Other

     

    30

     

     

     

    32

     

     

     

    (3

    )

     

    $

    35

     

     

    7

    %

     

    17

    %

    Total Subscription Video Services segment revenues

    $

    1,502

     

     

    $

    1,441

     

     

    $

    (120

    )

     

    $

    1,561

     

     

    (4

    )%

     

    4

    %

     

     

     

     

     

     

     

     

     

     

     

     

    Dow Jones:

     

     

     

     

     

     

     

     

     

     

     

    Circulation and subscription

    $

    1,082

     

     

    $

    1,257

     

     

    $

    (19

    )

     

    $

    1,276

     

     

    16

    %

     

    18

    %

    Advertising

     

    333

     

     

     

    313

     

     

     

     

     

    $

    313

     

     

    (6

    )%

     

    (6

    )%

    Other

     

    24

     

     

     

    37

     

     

     

     

     

    $

    37

     

     

    54

    %

     

    54

    %

    Total Dow Jones segment revenues

    $

    1,439

     

     

    $

    1,607

     

     

    $

    (19

    )

     

    $

    1,626

     

     

    12

    %

     

    13

    %

     

     

     

     

     

     

     

     

     

     

     

     

    Book Publishing:

     

     

     

     

     

     

     

     

     

     

     

    Consumer

     

    1,615

     

     

     

    1,474

     

     

     

    (55

    )

     

    $

    1,529

     

     

    (9

    )%

     

    (5

    )%

    Other

     

    63

     

     

     

    59

     

     

     

     

     

    $

    59

     

     

    (6

    )%

     

    (6

    )%

    Total Book Publishing segment revenues

    $

    1,678

     

     

    $

    1,533

     

     

    $

    (55

    )

     

    $

    1,588

     

     

    (9

    )%

     

    (5

    )%

     

     

    Q3 YTD Fiscal 2022

     

    Q3 YTD Fiscal 2023

     

    FX impact

     

    Q3 YTD Fiscal 2023 constant currency

     

    % Change - reported

     

    % Change - constant currency

     

    ($ in millions)

     

    Better/(Worse)

    News Media:

     

     

     

     

     

     

     

     

     

     

     

    Circulation and subscription

    $

    850

     

     

    $

    803

     

     

    $

    (84

    )

     

    $

    887

     

     

    (6

    )%

     

    4

    %

    Advertising

     

    745

     

     

     

    687

     

     

     

    (64

    )

     

    $

    751

     

     

    (8

    )%

     

    1

    %

    Other

     

    199

     

     

    205

     

     

    (21

    )

     

    $

    226

     

    3

    %

     

    14

    %

    Total News Media segment revenues

    $

    1,794

     

     

    $

    1,695

     

     

    $

    (169

    )

     

    $

    1,864

     

     

    (6

    )%

     

    4

    %

     

     

     

     

     

     

     

     

     

     

     

     

    News UK

     

     

     

     

     

     

     

     

     

     

     

    Circulation and subscription

    $

    428

     

     

    $

    398

     

     

    $

    (57

    )

     

    $

    455

     

     

    (7

    )%

     

    6

    %

    Advertising

     

    235

     

     

     

    216

     

     

     

    (25

    )

     

    $

    241

     

     

    (8

    )%

     

    3

    %

    Other

     

    88

     

     

     

    80

     

     

     

    (11

    )

     

    $

    91

     

     

    (9

    )%

     

    3

    %

    Total News UK revenues

    $

    751

     

     

    $

    694

     

     

    $

    (93

    )

     

    $

    787

     

     

    (8

    )%

     

    5

    %

     

     

     

     

     

     

     

     

     

     

     

     

    News Corp Australia

     

     

     

     

     

     

     

     

     

     

     

    Circulation and subscription

    $

    354

     

     

    $

    331

     

     

    $

    (27

    )

     

    $

    358

     

     

    (6

    )%

     

    1

    %

    Advertising

     

    337

     

     

     

    316

     

     

     

    (26

    )

     

    $

    342

     

     

    (6

    )%

     

    1

    %

    Other

     

    105

     

     

     

    102

     

     

     

    (8

    )

     

    $

    110

     

     

    (3

    )%

     

    5

    %

    Total News Corp Australia revenues

    $

    796

     

     

    $

    749

     

     

    $

    (61

    )

     

    $

    810

     

     

    (6

    )%

     

    2

    %

     




    Business Wire (engl.)
    0 Follower
    Autor folgen

    News Corporation Reports Third Quarter Results for Fiscal 2023 News Corporation (“News Corp” or the “Company”) (Nasdaq: NWS, NWSA; ASX: NWS, NWSLV) today reported financial results for the three months ended March 31, 2023. Commenting on the results, Chief Executive Robert Thomson said: “These results …