New News Corporation's effective income tax rate for the three
months ended September 30, 2012 was lower than the statutory rate,
primarily due to our foreign operations which are subject to lower
tax rates and permanent differences. The effective income tax rate
for the three months ended September 30, 2011 was lower than the
statutory rate, primarily due to our foreign operations which are
subject to lower tax rates.
At the end of each interim period, New News Corporation
estimates the annual effective tax rate and applies that rate to
its ordinary quarterly earnings. The tax expense or benefit related
to significant, unusual or extraordinary items that will be
separately reported or reported net of their related tax effect,
and are individually computed, are recognized in the interim period
in which those items occur. In addition, the effect of changes in
enacted tax laws or rates or tax status is recognized in the
interim period in which the change occurs.
New News Corporation paid $29 million and $53 million for income
taxes during the three months ended September 30, 2012 and 2011,
respectively.
Receivables, net
Receivables are presented net of an allowance for returns and
doubtful accounts, which is an estimate of amounts that may not be
collectible. In determining the allowance for returns, management
analyzes historical returns, current economic trends and changes in
customer demand and acceptance of New News Corporation's products.
Based on this information, management reserves a percentage of each
dollar of product sales that provide the customer with the right of
return. The allowance for doubtful accounts is estimated based on
historical experience, receivable aging, current economic trends
and specific identification of certain receivables that are at risk
of not being paid.
F-72
Table of Contents
NEW NEWS CORPORATION
NOTES TO THE UNAUDITED COMBINED FINANCIAL STATEMENTS
(CONTINUED)
Receivables, net consist of:
As of September As of June
30, 30,
2012 2012
----------------- ------------
(in millions)
Receivables $ 1,611 $ 1,555
Allowances for returns and doubtful
accounts (185) (186)
Receivables, net $ 1,426 $ 1,369
NOTE 13. SUBSEQUENT EVENTS
In November 2012, New News Corporation acquired Consolidated
Media Holdings Ltd. ("CMH"), a media investment company that
operates in Australia, for approximately $2 billion. CMH had a 25%
interest in Foxtel and a 50% interest in FOX SPORTS Australia.
Foxtel is the largest pay-TV provider in Australia, serving
approximately 2.2 million subscribing households in Australia, or
over 30% of the country's population. Foxtel's 200-plus channel
selection (which includes standard definition channels, high
definition versions of some of those channels, and audio and
interactive channels) provides premium and exclusive content and a
wide array of digital and mobile features. The remaining 50% of
Foxtel is owned by Telstra Corporation Limited, one of Australia's
leading telecommunications companies. FOX SPORTS Australia is the
leading sports programming provider in Australia with seven
standard definition television channels, high definition versions
of five of these channels, an interactive viewing application and
one IPTV channel and rights to live sporting events in Australia
including: National Rugby League, the domestic football league,
English Premier League, Australian and international cricket as
well as the NFL and NBA. The acquisition doubled New News
Corporation's stakes in FOX SPORTS Australia and Foxtel to 100% and
50%, respectively. Accordingly, the results of FOX SPORTS Australia
will be included within a new Cable Network Programming segment in
New News Corporation's combined results of operations beginning in
November 2012. Prior to November 2012, New News Corporation
accounted for its investment in FOX SPORTS Australia under the
equity method of accounting. New News Corporation's investment in
Foxtel was and continues to be accounted for under the equity
method of accounting. Due to the limited time since the acquisition
date the initial accounting for the business combination is
incomplete at this time. As a result, we are unable to provide
amounts recognized as of the acquisition date for major classes of
assets and liabilities acquired and resulting from the transaction.
Also, because the initial accounting for the transaction is
incomplete, we are unable to provide the supplemental pro forma
revenue and earnings of the combined entity.
F-73
Table of Contents
FORM OF PROXY FOR CLASS A COMMON STOCK
IMPORTANT NOTICE TO STOCKHOLDERS
of News Corporation
The Special Meeting of Stockholders will be held at
[--]
on [--], 2013
[--] a.m. ([--] Time)
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF NEWS CORPORATION FOR THE SPECIAL MEETING OF STOCKHOLDERS,
[--], 2013
The undersigned, a stockholder of News Corporation, a Delaware
corporation ("Parent"), acknowledges receipt of a copy of the
Notice of Special Meeting of Stockholders and the accompanying
proxy statement, and revoking any proxy previously given, hereby
constitutes and appoints Messrs. K. Rupert Murdoch, Chase Carey and
David F. DeVoe and each of them his or her true and lawful agents
and proxies with full power of substitution in each to vote the
shares of Class A common stock of Parent, standing in the name of
undersigned at the Special Meeting of Stockholders of Parent to be
held on [--], 2013 at [--] a.m. ([--] Time) at [--].
(continued and to be signed on the other side)
FORM OF PROXY FOR CLASS A COMMON STOCK
Please Detach and Mail in the Envelope Provided
PRIOR TO THE MAILING OF THIS PROXY CARD, THE BOARD WILL HAVE
RECOMMENDED A VOTE "FOR" PROPOSALS 1 AND 2
PLEASE MARK, SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK
AS SHOWN HERE ..
1. Proposal to amend Parent's Restated Certificate of Incorporation to clarify
Parent's ability to structure separation transactions, including the contemplated
separation of Parent's media and entertainment business and Parent's publishing
business (the "Separation"), such that Parent can make distributions to
its stockholders in separate classes of stock of its subsidiaries comparable
to the classes of stock currently held by them.
FOR AGAINST ABSTAIN
.. .. ..
2. Proposal to amend Parent's Restated Certificate of Incorporation to allow
Parent to make certain non-cash distributions on shares of its stock held
by its wholly-owned subsidiaries ("Subsidiary-Owned Shares") in separation
transactions and to create additional Subsidiary-Owned Shares with similar
rights to distributions, each to enable Parent to consummate the Separation
in the manner contemplated.
FOR AGAINST ABSTAIN
.. .. ..
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER
DIRECTED HEREBY BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS
MADE, THIS PROXY WILL BE VOTED "FOR" PROPOSALS 1 AND 2. ANY FAILURE
OF STOCKHOLDERS TO APPROVE PROPOSALS 1 AND 2 WILL RESULT IN THE
ABANDONMENT BY PARENT OF THE AMENDMENTS TO THE RESTATED CERTIFICATE
OF INCORPORATION AND, AS A RESULT, THE SEPARATION.
Table of Contents
Signature of Stockholder Dated , 2013
Signature of Stockholder Dated , 2013
NOTE: This Proxy must be signed exactly as your name appears
hereon. When shares are held jointly, each holder should sign. When
signing as executor, administrator, attorney, trustee or guardian,
please give full title as such. If the signer is a corporation,
please sign full corporate name by duly authorized officer, giving
full title as such. If signer is a partnership, please sign in
partnership name by authorized person.
Table of Contents
FORM OF PROXY FOR CLASS B COMMON STOCK
IMPORTANT NOTICE TO STOCKHOLDERS
of News Corporation
The Special Meeting of Stockholders will be held at
[--]
on [--], 2013
[--] a.m. ([--] Time)
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF NEWS CORPORATION FOR THE SPECIAL MEETING OF STOCKHOLDERS,
[--], 2013
The undersigned, a stockholder of News Corporation, a Delaware
corporation ("Parent"), acknowledges receipt of a copy of the
Notice of Special Meeting of Stockholders and the accompanying
proxy statement, and revoking any proxy previously given, hereby
constitutes and appoints Messrs. K. Rupert Murdoch, Chase Carey and
David F. DeVoe and each of them his or her true and lawful agents
and proxies with full power of substitution in each to vote the
shares of Class B common stock of Parent, standing in the name of
undersigned at the Special Meeting of Stockholders of Parent to be
held on [--], 2013 at [--] a.m. ([--] Time) at [--].
(continued and to be signed on the other side)
FORM OF PROXY FOR CLASS B COMMON STOCK
Please Detach and Mail in the Envelope Provided
PRIOR TO THE MAILING OF THIS PROXY CARD, THE BOARD WILL HAVE
RECOMMENDED A VOTE "FOR" PROPOSALS 1, 2, AND 3
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