News (NWSA) - 2024 Q2 - Quarterly Report

Part I. Financial Information This section presents News Corporation's unaudited consolidated financial statements and management's analysis of financial condition and operations Item 1. Financial Statements Presents News Corporation's unaudited consolidated financial statements, including operations, balance sheets, cash flows, and detailed notes Consolidated Statements of Operations Details News Corporation's revenues, net income, and earnings per share for the specified periods | Metric | 3 Months Ended Dec 31, 2023 (Millions) | 3 Months Ended Dec 31, 2022 (Millions) | 6 Months Ended Dec 31, 2023 (Millions) | 6 Months Ended Dec 31, 2022 (Millions) | | :--------------------------------------- | :------------------------------------- | :------------------------------------- | :------------------------------------- | :------------------------------------- | | Total Revenues | $2,586 | $2,521 | $5,085 | $4,999 | | Net income | $183 | $94 | $241 | $160 | | Net income attributable to News Corporation stockholders | $156 | $67 | $186 | $107 | | Net income attributable to News Corporation stockholders per share - basic | $0.27 | $0.12 | $0.33 | $0.18 | | Net income attributable to News Corporation stockholders per share - diluted | $0.27 | $0.12 | $0.32 | $0.18 | Consolidated Statements of Comprehensive Income Presents News Corporation's net income and other comprehensive income components for the periods | Metric | 3 Months Ended Dec 31, 2023 (Millions) | 3 Months Ended Dec 31, 2022 (Millions) | 6 Months Ended Dec 31, 2023 (Millions) | 6 Months Ended Dec 31, 2022 (Millions) | | :--------------------------------------- | :------------------------------------- | :------------------------------------- | :------------------------------------- | :------------------------------------- | | Net income | $183 | $94 | $241 | $160 | | Other comprehensive income | $196 | $269 | $65 | $18 | | Comprehensive income | $379 | $363 | $306 | $178 | | Comprehensive income attributable to News Corporation stockholders | $303 | $277 | $233 | $122 | Consolidated Balance Sheets Outlines News Corporation's assets, liabilities, and equity as of December 31, 2023, and June 30, 2023 | Metric | As of Dec 31, 2023 (Millions) | As of Jun 30, 2023 (Millions) | | :--------------------------------------- | :---------------------------- | :---------------------------- | | Total assets | $16,681 | $16,921 | | Total current liabilities | $2,784 | $3,165 | | Total liabilities and equity | $16,681 | $16,921 | | Total News Corporation stockholders' equity | $8,182 | $8,064 | | Total equity | $9,102 | $8,945 | Consolidated Statements of Cash Flows Summarizes News Corporation's cash flows from operating, investing, and financing activities | Metric | 6 Months Ended Dec 31, 2023 (Millions) | 6 Months Ended Dec 31, 2022 (Millions) | | :--------------------------------------- | :------------------------------------- | :------------------------------------- | | Net cash provided by operating activities | $305 | $161 | | Net cash used in investing activities | $(278) | $(337) | | Net cash used in financing activities | $(144) | $(312) | | Net change in cash and cash equivalents | $(117) | $(488) | | Cash and cash equivalents, end of period | $1,724 | $1,328 | Notes to the Unaudited Consolidated Financial Statements Provides detailed explanations and disclosures supporting the unaudited consolidated financial statements Note 1. Description of Business and Basis of Presentation Describes News Corporation's global media business and the accounting principles used for financial reporting - News Corporation is a global diversified media and information services company, including digital real estate, subscription video, news, and book publishing[21] - The financial statements are prepared in accordance with GAAP for interim information, with all necessary normal recurring adjustments reflected[22] - The Company is evaluating the impact of recently issued accounting pronouncements ASU 2023-07 (Segment Reporting) and ASU 2023-09 (Income Taxes) on its consolidated financial statements[25][26] Note 2. Revenues Details News Corporation's revenue streams by segment and deferred revenue balances | Revenue Type | Digital Real Estate Services (2023) | Digital Real Estate Services (2022) | Subscription Video Services (2023) | Subscription Video Services (2022) | Dow Jones (2023) | Dow Jones (2022) | Book Publishing (2023) | Book Publishing (2022) | News Media (2023) | News Media (2022) | Total Revenues (2023) | Total Revenues (2022) | | :------------------------- | :---------------------------------- | :---------------------------------- | :----------------------------------- | :----------------------------------- | :--------------- | :--------------- | :--------------------- | :--------------------- | :---------------- | :---------------- | :-------------------- | :-------------------- | | Circulation and subscription | $2 | $3 | $404 | $405 | $441 | $417 | $0 | $0 | $272 | $260 | $1,119 | $1,085 | | Advertising | $32 | $33 | $51 | $47 | $126 | $131 | $0 | $0 | $229 | $253 | $438 | $464 | | Consumer | $0 | $0 | $0 | $0 | $0 | $0 | $527 | $512 | $0 | $0 | $527 | $512 | | Real estate | $327 | $301 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $327 | $301 | | Other | $58 | $49 | $15 | $10 | $17 | $15 | $23 | $19 | $62 | $66 | $175 | $159 | | Total Revenues | $419 | $386 | $470 | $462 | $584 | $563 | $550 | $531 | $563 | $579 | $2,586 | $2,521 | | Revenue Type | Digital Real Estate Services (2023) | Digital Real Estate Services (2022) | Subscription Video Services (2023) | Subscription Video Services (2022) | Dow Jones (2023) | Dow Jones (2022) | Book Publishing (2023) | Book Publishing (2022) | News Media (2023) | News Media (2022) | Total Revenues (2023) | Total Revenues (2022) | | :------------------------- | :---------------------------------- | :---------------------------------- | :----------------------------------- | :----------------------------------- | :--------------- | :--------------- | :--------------------- | :--------------------- | :---------------- | :---------------- | :-------------------- | :-------------------- | | Circulation and subscription | $5 | $6 | $819 | $830 | $877 | $831 | $0 | $0 | $547 | $529 | $2,248 | $2,196 | | Advertising | $67 | $68 | $113 | $111 | $217 | $225 | $0 | $0 | $432 | $466 | $829 | $870 | | Consumer | $0 | $0 | $0 | $0 | $0 | $0 | $1,029 | $979 | $0 | $0 | $1,029 | $979 | | Real estate | $638 | $624 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $638 | $624 | | Other | $112 | $109 | $24 | $23 | $27 | $22 | $46 | $39 | $132 | $137 | $341 | $330 | | Total Revenues | $822 | $807 | $956 | $964 | $1,121 | $1,078 | $1,075 | $1,018 | $1,111 | $1,132 | $5,085 | $4,999 | | Metric | 3 Months Ended Dec 31, 2023 (Millions) | 3 Months Ended Dec 31, 2022 (Millions) | 6 Months Ended Dec 31, 2023 (Millions) | 6 Months Ended Dec 31, 2022 (Millions) | | :-------------------------- | :------------------------------------- | :------------------------------------- | :------------------------------------- | :------------------------------------- | | Balance, beginning of period | $624 | $592 | $622 | $604 | | Deferral of revenue | $806 | $893 | $1,743 | $1,790 | | Recognition of deferred revenue | $(930) | $(917) | $(1,859) | $(1,813) | | Other | $10 | $23 | $4 | $10 | | Balance, end of period | $510 | $591 | $510 | $591 | - The Company recognized $330 million and $499 million in revenue from opening deferred revenue balances for the three and six months ended December 31, 2023, respectively[35] - Remaining transaction price for unsatisfied performance obligations as of December 31, 2023, was approximately $1,240 million, with $263 million expected in fiscal 2024, $372 million in fiscal 2025, and $212 million in fiscal 2026[38] Note 3. Impairment and Restructuring Charges Outlines non-cash impairment and restructuring charges, primarily for employee termination benefits - Non-cash impairment charges of $1 million and $22 million were recognized at the News Media segment for the three and six months ended December 31, 2023, respectively, related to the proposed combination of U.K. printing operations[41] - Restructuring charges of $10 million and $27 million were recorded for the three and six months ended December 31, 2023, respectively, primarily for employee termination benefits due to a 5% headcount reduction initiative[42] | Metric | 2023 (Millions) | 2022 (Millions) | | :-------------------------- | :-------------- | :-------------- | | Balance, beginning of period | $94 | $66 | | Additions | $27 | $40 | | Payments | $(59) | $(38) | | Other | $0 | $(2) | | Balance, end of period | $62 | $66 | - As of December 31, 2023, restructuring liabilities totaled approximately $62 million, with $35 million classified as current and $27 million as non-current[45] Note 4. Investments Summarizes News Corporation's equity method investments and other securities holdings | Investment Type | As of Dec 31, 2023 (Millions) | As of Jun 30, 2023 (Millions) | | :-------------------------- | :---------------------------- | :---------------------------- | | Equity method investments | $197 | $192 | | Equity and other securities | $227 | $235 | | Total Investments | $424 | $427 | - Equity method investments primarily include REA Group's ownership interest in PropertyGuru Group Ltd[48] - Equity and other securities are primarily comprised of Nexxen International, Ltd., certain investments in China, ARN Media Limited, and Dow Jones's investment in an artificial intelligence-focused data analytics company[48] - Equity losses of affiliates decreased by $28 million and $30 million for the three and six months ended December 31, 2023, respectively, primarily due to the absence of losses from an Australian sports wagering venture in the prior year[51] Note 5. Borrowings Details News Corporation's debt structure, including interest rates, maturities, and refinancing activities | Borrowing Type | Interest Rate (Dec 31, 2023) | Maturity (Dec 31, 2023) | As of Dec 31, 2023 (Millions) | As of Jun 30, 2023 (Millions) | | :---------------------------------------------------------------- | :--------------------------- | :---------------------- | :---------------------------- | :---------------------------- | | News Corporation: 2022 Term loan A | 6.948% | Mar 31, 2027 | $491 | $497 | | News Corporation: 2022 Senior notes | 5.125% | Feb 15, 2032 | $493 | $492 | | News Corporation: 2021 Senior notes | 3.875% | May 15, 2029 | $990 | $989 | | Foxtel Group: 2024 Foxtel credit facility — tranche 1 | 7.26% | Aug 1, 2026 | $405 | $0 | | Foxtel Group: 2024 Foxtel credit facility — USD portion — tranche 2 | 8.63% | Aug 1, 2027 | $49 | $0 | | Foxtel Group: 2024 Foxtel credit facility — tranche 3 | 7.41% | Aug 1, 2027 | $212 | $0 | | Foxtel Group: Telstra facility | 11.95% | Dec 22, 2027 | $101 | $100 | | REA Group: 2024 REA credit facility — tranche 1 | 5.85% | Sep 15, 2028 | $81 | $0 | | REA Group: 2024 REA credit facility — tranche 2 | 5.55% | Sep 16, 2025 | $136 | $0 | | REA Group: 2024 Subsidiary facility | 5.75% | Sep 28, 2025 | $54 | $0 | | Finance lease liability | N/A | N/A | $30 | $42 | | Total borrowings | | | $3,042 | $2,967 | | Less: current portion | | | $(58) | $(27) | | Long-term borrowings | | | $2,984 | $2,940 | - The Foxtel Group refinanced its debt during the six months ended December 31, 2023, with a new A$1.2 billion syndicated credit facility (2024 Foxtel Credit Facility) and extended its 2017 working capital facility[57] - REA Group entered into a new unsecured syndicated credit facility (2024 REA Credit Facility) and an A$83 million unsecured bilateral revolving credit facility (2024 Subsidiary Facility) during the six months ended December 31, 2023[60][64] - The Company was in compliance with all debt covenants as of December 31, 2023[65] Note 6. Equity Presents News Corporation's equity components, including share repurchases and dividend declarations | Metric | Dec 31, 2023 (Millions) | Dec 31, 2022 (Millions) | | :--------------------------------------- | :---------------------- | :---------------------- | | Total News Corp Equity (End of Period) | $8,182 | $8,115 | | Noncontrolling Interests (End of Period) | $920 | $941 | | Total Equity (End of Period) | $9,102 | $9,056 | | Net income attributable to News Corporation stockholders | $156 | $67 | | Share repurchases | $(26) | $(47) | | Metric | Dec 31, 2023 (Millions) | Dec 31, 2022 (Millions) | | :--------------------------------------- | :---------------------- | :---------------------- | | Total News Corp Equity (End of Period) | $8,182 | $8,115 | | Noncontrolling Interests (End of Period) | $920 | $941 | | Total Equity (End of Period) | $9,102 | $9,056 | | Net income attributable to News Corporation stockholders | $186 | $107 | | Dividends | $(85) | $(89) | | Share repurchases | $(55) | $(174) | - The Board of Directors authorized a $1 billion share repurchase program, with approximately $522 million remaining as of December 31, 2023[72] - The Company repurchased 1.2 million shares (0.8M Class A, 0.4M Class B) for $26 million during the three months ended December 31, 2023, and 2.6 million shares (1.8M Class A, 0.8M Class B) for $55 million during the six months ended December 31, 2023[73] - A semi-annual cash dividend of $0.10 per share for Class A Common Stock and Class B Common Stock was declared in August 2023 and paid on October 11, 2023[76] Note 7. Financial Instruments and Fair Value Measurements Describes News Corporation's derivative instruments and fair value measurements for financial assets and liabilities | Asset/Liability | Level 1 (Dec 31, 2023) | Level 2 (Dec 31, 2023) | Level 3 (Dec 31, 2023) | Total (Dec 31, 2023) | Level 1 (Jun 30, 2023) | Level 2 (Jun 30, 2023) | Level 3 (Jun 30, 2023) | Total (Jun 30, 2023) | | :---------------------------------------------------------------------------------------------------- | :--------------------- | :--------------------- | :--------------------- | :------------------- | :--------------------- | :--------------------- | :--------------------- | :------------------- | | Assets: | | | | | | | | | | Interest rate derivatives - cash flow hedges | $0 | $25 | $0 | $25 | $0 | $41 | $0 | $41 | | Equity and other securities | $96 | $0 | $131 | $227 | $105 | $0 | $130 | $235 | | Total assets | $96 | $25 | $131 | $252 | $105 | $89 | $130 | $324 | | Liabilities: | | | | | | | | | | Interest rate derivatives - cash flow hedges | $0 | $(5) | $0 | $(5) | $0 | $0 | $0 | $0 | | Foreign currency derivatives - cash flow hedges | $0 | $(1) | $0 | $(1) | $0 | $0 | $0 | $0 | | Cross-currency interest rate derivatives - cash flow hedges | $0 | $(3) | $0 | $(3) | $0 | $0 | $0 | $0 | | Total liabilities | $0 | $(9) | $0 | $(9) | $0 | $(3) | $0 | $(3) | - The Company uses derivative instruments (interest rate, foreign currency, and cross-currency interest rate derivatives) to mitigate foreign currency exchange rate risk and interest rate risk[86][92] - During the six months ended December 31, 2023, the Company entered into new cross-currency and interest rate swap derivatives totaling $49 million and A$610 million, respectively, designated as cash flow hedges[87] - The total notional value of interest rate swap derivatives designated for hedging was approximately $491 million and A$610 million as of December 31, 2023[93] - Approximately $13 million of net derivative gains related to interest rate swap cash flow hedges are estimated to be reclassified into the Statements of Operations within the next 12 months[93] Note 8. Earnings (Loss) Per Share Calculates basic and diluted earnings per share for News Corporation stockholders | Metric | 3 Months Ended Dec 31, 2023 | 3 Months Ended Dec 31, 2022 | 6 Months Ended Dec 31, 2023 | 6 Months Ended Dec 31, 2022 | | :---------------------------------------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Net income attributable to News Corporation stockholders | $156 | $67 | $186 | $107 | | Weighted-average number of shares of common stock outstanding - basic (millions) | 571.9 | 576.0 | 572.1 | 578.7 | | Dilutive effect of equity awards (millions) | 1.6 | 1.8 | 1.7 | 1.8 | | Weighted-average number of shares of common stock outstanding - diluted (millions) | 573.5 | 577.8 | 573.8 | 580.5 | | Net income attributable to News Corporation stockholders per share - basic | $0.27 | $0.12 | $0.33 | $0.18 | | Net income attributable to News Corporation stockholders per share - diluted | $0.27 | $0.12 | $0.32 | $0.18 | Note 9. Commitments and Contingencies Outlines News Corporation's contractual commitments and potential liabilities from legal proceedings | Commitment Type | Total | Less than 1 year | 1-3 years | 3-5 years | More than 5 years | | :-------------------------- | :---- | :--------------- | :-------- | :-------- | :---------------- | | Borrowings | $3,029 | $36 | $694 | $799 | $1,500 | | Interest payments on borrowings | $686 | $155 | $269 | $153 | $109 | - The Company is routinely involved in various legal proceedings, claims, and governmental inspections or investigations, including class action complaints against HarperCollins and matters related to U.K. Newspaper Matters[110][115][116] - As of December 31, 2023, the Company accrued approximately $81 million for U.K. Newspaper Matters, with $89 million indemnified by FOX Corporation recorded as a receivable[118] Note 10. Income Taxes Discusses News Corporation's income tax expense, effective tax rates, and impact of global tax reforms - For the three and six months ended December 31, 2023, income tax expense was $94 million (on $277 million pre-tax income) and $131 million (on $372 million pre-tax income), respectively, with effective tax rates higher than the U.S. statutory rate due to foreign operations and valuation allowances[122] - The Company does not expect to be subject to the 15% corporate minimum tax imposed by the Inflation Reduction Act[126] - The Company does not expect to be subject to Pillar One taxes based on current proposed revenue and profit thresholds[127] - The Company is evaluating the potential impact of Pillar Two global minimum tax proposals (15% effective tax rate for multinational groups with over 750 million Euros annual global revenue) on its consolidated financial statements[128] Note 11. Segment Information Provides financial data by News Corporation's operating segments, including revenues, EBITDA, and assets - News Corporation manages and reports its businesses in six segments: Digital Real Estate Services, Subscription Video Services, Dow Jones, Book Publishing, News Media, and Other[130][131] - Segment EBITDA 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[132] | Segment | 3 Months Ended Dec 31, 2023 (Millions) | 3 Months Ended Dec 31, 2022 (Millions) | 6 Months Ended Dec 31, 2023 (Millions) | 6 Months Ended Dec 31, 2022 (Millions) | | :-------------------------- | :------------------------------------- | :------------------------------------- | :------------------------------------- | :------------------------------------- | | Digital Real Estate Services | $419 | $386 | $822 | $807 | | Subscription Video Services | $470 | $462 | $956 | $964 | | Dow Jones | $584 | $563 | $1,121 | $1,078 | | Book Publishing | $550 | $531 | $1,075 | $1,018 | | News Media | $563 | $579 | $1,111 | $1,132 | | Other | $0 | $0 | $0 | $0 | | Total revenues | $2,586 | $2,521 | $5,085 | $4,999 | | Segment | 3 Months Ended Dec 31, 2023 (Millions) | 3 Months Ended Dec 31, 2022 (Millions) | 6 Months Ended Dec 31, 2023 (Millions) | 6 Months Ended Dec 31, 2022 (Millions) | | :-------------------------- | :------------------------------------- | :------------------------------------- | :------------------------------------- | :------------------------------------- | | Digital Real Estate Services | $147 | $128 | $269 | $247 | | Subscription Video Services | $77 | $90 | $170 | $201 | | Dow Jones | $163 | $139 | $287 | $252 | | Book Publishing | $85 | $51 | $150 | $90 | | News Media | $52 | $59 | $66 | $77 | | Other | $(51) | $(58) | $(105) | $(108) | | Total Segment EBITDA | $473 | $409 | $837 | $759 | | Segment | As of Dec 31, 2023 (Millions) | As of Jun 30, 2023 (Millions) | | :-------------------------- | :---------------------------- | :---------------------------- | | Digital Real Estate Services | $3,073 | $2,942 | | Subscription Video Services | $2,633 | $2,812 | | Dow Jones | $4,178 | $4,305 | | Book Publishing | $2,731 | $2,629 | | News Media | $1,966 | $2,023 | | Other | $1,676 | $1,783 | | Investments | $424 | $427 | | Total assets | $16,681 | $16,921 | | Segment | As of Dec 31, 2023 (Millions) | As of Jun 30, 2023 (Millions) | | :-------------------------- | :---------------------------- | :---------------------------- | | Digital Real Estate Services | $1,826 | $1,779 | | Subscription Video Services | $1,288 | $1,288 | | Dow Jones | $3,273 | $3,298 | | Book Publishing | $942 | $958 | | News Media | $308 | $306 | | Total Goodwill and intangible assets, net | $7,637 | $7,629 | Note 12. Additional Financial Information Presents supplementary financial details on receivables, other non-current assets, and current liabilities | Metric | As of Dec 31, 2023 (Millions) | As of Jun 30, 2023 (Millions) | | :-------------------------- | :---------------------------- | :---------------------------- | | Receivables | $1,579 | $1,482 | | Less: allowances | $(63) | $(57) | | Receivables, net | $1,516 | $1,425 | | Component | As of Dec 31, 2023 (Millions) | As of Jun 30, 2023 (Millions) | | :-------------------------- | :---------------------------- | :---------------------------- | | Royalty advances to authors | $384 | $376 | | Retirement benefit assets | $141 | $134 | | Inventory | $236 | $267 | | News America Marketing deferred consideration | $164 | $157 | | Other | $395 | $407 | | Total Other non-current assets | $1,320 | $1,341 | | Component | As of Dec 31, 2023 (Millions) | As of Jun 30, 2023 (Millions) | | :-------------------------- | :---------------------------- | :---------------------------- | | Royalties and commissions payable | $242 | $206 | | Current operating lease liabilities | $111 | $112 | | Allowance for sales returns | $155 | $154 | | Current tax payable | $11 | $16 | | Other | $359 | $465 | | Total Other current liabilities | $878 | $953 | | Component | 3 Months Ended Dec 31, 2023 (Millions) | 3 Months Ended Dec 31, 2022 (Millions) | 6 Months Ended Dec 31, 2023 (Millions) | 6 Months Ended Dec 31, 2022 (Millions) | | :------------------------------------------------ | :------------------------------------- | :------------------------------------- | :------------------------------------- | :------------------------------------- | | Remeasurement of equity securities | $13 | $(11) | $(10) | $(14) | | Dividends received from equity security investments | $1 | $2 | $3 | $4 | | Gain on remeasurement of previously-held interest | $0 | $0 | $4 | $0 | | Other | $8 | $3 | $(10) | $(14) | | Total Other, net | $22 | $(6) | $(13) | $(24) | | Metric | 6 Months Ended Dec 31, 2023 (Millions) | 6 Months Ended Dec 31, 2022 (Millions) | | :-------------------------- | :------------------------------------- | :------------------------------------- | | Cash paid for interest | $51 | $54 | | Cash paid for taxes | $74 | $81 | Note 13. Subsequent Events Discloses significant events occurring after the balance sheet date, such as dividend declarations - In February 2024, the Board of Directors declared a semi-annual cash dividend of $0.10 per share for Class A Common Stock and Class B Common Stock, payable on April 10, 2024[151] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses News Corporation's financial condition, operational results, business segments, liquidity, and capital resources Introduction Provides an overview of News Corporation's business and cautions regarding forward-looking statements - The document contains forward-looking statements, and readers are cautioned that any forward-looking statements are not guarantees of future performance and involve risks and uncertainties[154] - News Corporation is a global diversified media and information services company comprised of businesses across digital real estate services, subscription video services in Australia, news and information services, and book publishing[155] Overview of the Company's Businesses Describes News Corporation's diversified media and information services segments - The Company manages six segments: Digital Real Estate Services (REA Group, Move), Subscription Video Services (Foxtel Group, Australian News Channel), Dow Jones (The Wall Street Journal, Risk & Compliance), Book Publishing (HarperCollins), News Media (News Corp Australia, News UK, New York Post), and Other[158][159] Other Business Developments Highlights recent strategic initiatives, including headcount reductions and proposed printing operations combination - The Company implemented a 5% headcount reduction, expecting annualized gross cost savings of at least $160 million, with the majority reflected in fiscal 2024[160] - News UK and DMG Media announced a proposed arrangement to combine certain U.K. printing operations within a separate joint venture, subject to regulatory approval, to improve efficiency and establish a sustainable business model[161] Results of Operations Analyzes News Corporation's consolidated revenues, expenses, and net income for the reporting periods | Metric | 3 Months Ended Dec 31, 2023 (Millions) | 3 Months Ended Dec 31, 2022 (Millions) | % Change (3 Months) | 6 Months Ended Dec 31, 2023 (Millions) | 6 Months Ended Dec 31, 2022 (Millions) | % Change (6 Months) | | :--------------------------------------- | :------------------------------------- | :------------------------------------- | :------------------ | :------------------------------------- | :------------------------------------- | :------------------ | | Total Revenues | $2,586 | $2,521 | 3% | $5,085 | $4,999 | 2% | | Operating expenses | $(1,281) | $(1,294) | 1% | $(2,554) | $(2,567) | 1% | | Selling, general and administrative | $(832) | $(818) | (2)% | $(1,694) | $(1,673) | (1)% | | Depreciation and amortization | $(179) | $(174) | (3)% | $(350) | $(353) | 1% | | Impairment and restructuring charges | $(13) | $(19) | 32% | $(51) | $(40) | (28)% | | Equity losses of affiliates | $(1) | $(29) | 97% | $(3) | $(33) | 91% | | Interest expense, net | $(25) | $(26) | 4% | $(48) | $(53) | 9% | | Other, net | $22 | $(6) | N/A | $(13) | $(24) | 46% | | Income before income tax expense | $277 | $155 | 79% | $372 | $256 | 45% | | Income tax expense | $(94) | $(61) | (54)% | $(131) | $(96) | (36)% | | Net income | $183 | $94 | 95% | $241 | $160 | 51% | | Net income attributable to News Corporation stockholders | $156 | $67 | N/A | $186 | $107 | 74% | - Total Revenues increased by $65 million (3%) and $86 million (2%) for the three and six months ended December 31, 2023, respectively, driven by Digital Real Estate Services, Dow Jones, and Book Publishing, partially offset by News Media[164][165][167] - Operating expenses decreased by $13 million (1%) for both the three and six months ended December 31, 2023, primarily due to lower costs in Book Publishing and News Media, partially offset by higher sports programming rights costs in Subscription Video Services[168][169][170] - Selling, general and administrative expenses increased by $14 million (2%) and $21 million (1%) for the three and six months, respectively, mainly due to higher employee costs and broker commissions in Digital Real Estate Services and Book Publishing, partially offset by Subscription Video Services[171][172][174] - Net income increased by $89 million (95%) to $183 million for the three months and by $81 million (51%) to $241 million for the six months ended December 31, 2023, driven by higher Total Segment EBITDA, lower equity losses, and higher Other, net[182][183] Segment Analysis Examines the financial performance of News Corporation's individual operating segments - Segment EBITDA is the primary measure for evaluating business performance and resource allocation, excluding depreciation and amortization, impairment and restructuring charges, equity losses of affiliates, interest (expense) income, net, other, net, and income tax (expense) benefit[184] | Metric | 3 Months Ended Dec 31, 2023 (Millions) | 3 Months Ended Dec 31, 2022 (Millions) | 6 Months Ended Dec 31, 2023 (Millions) | 6 Months Ended Dec 31, 2022 (Millions) | | :--------------------------------------- | :------------------------------------- | :------------------------------------- | :------------------------------------- | :------------------------------------- | | Net income | $183 | $94 | $241 | $160 | | Income tax expense | $94 | $61 | $131 | $96 | | Other, net | $(22) | $6 | $13 | $24 | | Interest expense, net | $25 | $26 | $48 | $53 | | Equity losses of affiliates | $1 | $29 | $3 | $33 | | Impairment and restructuring charges | $13 | $19 | $51 | $40 | | Depreciation and amortization | $179 | $174 | $350 | $353 | | Total Segment EBITDA | $473 | $409 | $837 | $759 | | Segment | 3 Months Ended Dec 31, 2023 (Millions) | 3 Months Ended Dec 31, 2022 (Millions) | 6 Months Ended Dec 31, 2023 (Millions) | 6 Months Ended Dec 31, 2022 (Millions) | | :-------------------------- | :------------------------------------- | :------------------------------------- | :------------------------------------- | :------------------------------------- | | Digital Real Estate Services | $419 | $386 | $822 | $807 | | Subscription Video Services | $470 | $462 | $956 | $964 | | Dow Jones | $584 | $563 | $1,121 | $1,078 | | Book Publishing | $550 | $531 | $1,075 | $1,018 | | News Media | $563 | $579 | $1,111 | $1,132 | | Other | $0 | $0 | $0 | $0 | | Total revenues | $2,586 | $2,521 | $5,085 | $4,999 | | Digital Real Estate Services (EBITDA) | $147 | $128 | $269 | $247 | | Subscription Video Services (EBITDA) | $77 | $90 | $170 | $201 | | Dow Jones (EBITDA) | $163 | $139 | $287 | $252 | | Book Publishing (EBITDA) | $85 | $51 | $150 | $90 | | News Media (EBITDA) | $52 | $59 | $66 | $77 | | Other (EBITDA) | $(51) | $(58) | $(105) | $(108) | | Total Segment EBITDA | $473 | $409 | $837 | $759 | Digital Real Estate Services Analyzes revenue and EBITDA performance of REA Group and Move, reflecting market conditions | Metric | 3 Months Ended Dec 31, 2023 (Millions) | 3 Months Ended Dec 31, 2022 (Millions) | % Change (3 Months) | 6 Months Ended Dec 31, 2023 (Millions) | 6 Months Ended Dec 31, 2022 (Millions) | % Change (6 Months) | | :--------------------------------------- | :------------------------------------- | :------------------------------------- | :------------------ | :------------------------------------- | :------------------------------------- | :------------------ | | Total Revenues | $419 | $386 | 9% | $822 | $807 | 2% | | Segment EBITDA | $147 | $128 | 15% | $269 | $247 | 9% | - Revenues increased by $33 million (9%) for the three months and $15 million (2%) for the six months ended December 31, 2023, driven by REA Group's higher Australian residential and financial services revenues, partially offset by Move's decline due to the U.S. housing market[191][193] - Segment EBITDA increased by $19 million (15%) for the three months and $22 million (9%) for the six months, primarily due to REA Group's increased contribution, partially offset by the adverse impact from Move[192][194] Subscription Video Services Reviews Foxtel Group's revenue, EBITDA, and subscriber trends, including streaming growth | Metric | 3 Months Ended Dec 31, 2023 (Millions) | 3 Months Ended Dec 31, 2022 (Millions) | % Change (3 Months) | 6 Months Ended Dec 31, 2023 (Millions) | 6 Months Ended Dec 31, 2022 (Millions) | % Change (6 Months) | | :--------------------------------------- | :------------------------------------- | :------------------------------------- | :------------------ | :------------------------------------- | :------------------------------------- | :------------------ | | Total Revenues | $470 | $462 | 2% | $956 | $964 | (1)% | | Segment EBITDA | $77 | $90 | (14)% | $170 | $201 | (15)% | - Revenues increased by $8 million (2%) for the three months but decreased by $8 million (1%) for the six months ended December 31, 2023. Streaming revenues (Kayo, BINGE) increased due to volume and pricing, offsetting lower residential broadcast subscribers and negative foreign currency impact[195][197] - Segment EBITDA decreased by $13 million (14%) for the three months and $31 million (15%) for the six months, driven by higher sports programming rights costs and $10 million for the upcoming Hubbl launch, partially offset by revenue growth and cost savings[196][198] | Metric | As of Dec 31, 2023 (Thousands) | As of Dec 31, 2022 (Thousands) | | :--------------------------------------- | :----------------------------- | :----------------------------- | | Broadcast Subscribers (Residential) | 1,273 | 1,401 | | Broadcast Subscribers (Commercial) | 232 | 230 | | Streaming Subscribers (Kayo) | 1,183 (1,173 paid) | 1,136 (1,126 paid) | | Streaming Subscribers (BINGE) | 1,503 (1,471 paid) | 1,439 (1,375 paid) | | Streaming Subscribers (Foxtel Now) | 155 (150 paid) | 183 (177 paid) | | Total Subscribers (Total (Paid)) | 4,365 (4,317 paid) | 4,414 (4,329 paid) | | Metric | 3 Months Ended Dec 31, 2023 | 3 Months Ended Dec 31, 2022 | 6 Months Ended Dec 31, 2023 | 6 Months Ended Dec 31, 2022 | | :--------------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Broadcast ARPU | A$86 (US$56) | A$83 (US$55) | A$85 (US$56) | A$83 (US$56) | | Broadcast Subscriber Churn | 12.9% | 12.9% | 12.2% | 13.6% | Dow Jones Evaluates Dow Jones's revenue and EBITDA growth, driven by professional information and digital subscriptions | Metric | 3 Months Ended Dec 31, 2023 (Millions) | 3 Months Ended Dec 31, 2022 (Millions) | % Change (3 Months) | 6 Months Ended Dec 31, 2023 (Millions) | 6 Months Ended Dec 31, 2022 (Millions) | % Change (6 Months) | | :--------------------------------------- | :------------------------------------- | :------------------------------------- | :------------------ | :------------------------------------- | :------------------------------------- | :------------------ | | Total Revenues | $584 | $563 | 4% | $1,121 | $1,078 | 4% | | Segment EBITDA | $163 | $139 | 17% | $287 | $252 | 14% | - Revenues increased by $21 million (4%) for the three months and $43 million (4%) for the six months ended December 31, 2023, primarily due to higher professional information business revenues. Digital revenues represented 78% and 79% of total revenues for these periods, respectively[203][204] - Professional information business revenues increased by $24 million (13%) for the three months and $49 million (13%) for the six months, driven by growth in Risk & Compliance, Dow Jones Energy, and Factiva[205][206] | Publication | 2023 (Thousands) | 2022 (Thousands) | % Change | | :--------------------------------------- | :--------------- | :--------------- | :------- | | The Wall Street Journal (Digital-only) | 3,528 | 3,167 | 11% | | The Wall Street Journal (Total) | 4,052 | 3,780 | 7% | | Barron's Group (Digital-only) | 1,104 | 894 | 23% | | Barron's Group (Total) | 1,242 | 1,062 | 17% | | Total Consumer (Digital-only) | 4,746 | 4,139 | 15% | | Total Consumer (Total) | 5,427 | 4,943 | 10% | - Segment EBITDA increased by $24 million (17%) for the three months and $35 million (14%) for the six months, due to revenue growth and gross cost savings related to the announced 5% headcount reduction initiative[210][211] Book Publishing Assesses HarperCollins' revenue and EBITDA performance, highlighting digital sales and cost efficiencies | Metric | 3 Months Ended Dec 31, 2023 (Millions) | 3 Months Ended Dec 31, 2022 (Millions) | % Change (3 Months) | 6 Months Ended Dec 31, 2023 (Millions) | 6 Months Ended Dec 31, 2022 (Millions) | % Change (6 Months) | | :--------------------------------------- | :------------------------------------- | :------------------------------------- | :------------------ | :------------------------------------- | :------------------------------------- | :------------------ | | Total Revenues | $550 | $531 | 4% | $1,075 | $1,018 | 6% | | Segment EBITDA | $85 | $51 | 67% | $150 | $90 | 67% | - Revenues increased by $19 million (4%) for the three months and $57 million (6%) for the six months ended December 31, 2023, driven by higher digital book sales, improved returns in the U.S., and recovering consumer demand[212][214] - Digital sales increased by 15% for the three months and 9% for the six months, primarily due to strong market growth for downloadable audiobook sales and a new Spotify partnership. Digital sales represented approximately 21% and 22% of consumer revenues, respectively[212][214] - Segment EBITDA increased by $34 million (67%) for the three months and $60 million (67%) for the six months, due to higher revenues and lower manufacturing, freight, and distribution costs, partially offset by higher employee costs[213][215] News Media Examines News Media's revenue and EBITDA trends, impacted by advertising declines and cost savings | Metric | 3 Months Ended Dec 31, 2023 (Millions) | 3 Months Ended Dec 31, 2022 (Millions) | % Change (3 Months) | 6 Months Ended Dec 31, 2023 (Millions) | 6 Months Ended Dec 31, 2022 (Millions) | % Change (6 Months) | | :--------------------------------------- | :------------------------------------- | :------------------------------------- | :------------------ | :------------------------------------- | :------------------------------------- | :------------------ | | Total Revenues | $563 | $579 | (3)% | $1,111 | $1,132 | (2)% | | Segment EBITDA | $52 | $59 | (12)% | $66 | $77 | (14)% | - Revenues decreased by $16 million (3%) for the three months and $21 million (2%) for the six months ended December 31, 2023, primarily due to lower advertising revenues (digital and print), partially offset by circulation and subscription revenue growth from cover price increases and digital subscribers[217][219] - Segment EBITDA decreased by $7 million (12%) for the three months and $11 million (14%) for the six months, due to lower revenues, partially offset by reduced production costs at News UK and gross cost savings from headcount reductions[218][220] - News Corp Australia's revenues decreased by $16 million (6%) for the three months and $33 million (7%) for the six months, mainly due to lower print and digital advertising revenues[221][222] - News UK's revenues increased by $1 million for the three months and $8 million (2%) for the six months, driven by circulation and subscription growth, partially offset by advertising declines[223][224] Liquidity and Capital Resources Discusses News Corporation's cash position, debt, equity, and ability to meet financial obligations - As of December 31, 2023, the Company had $1.7 billion in cash and cash equivalents, with $838 million held by foreign subsidiaries, of which $214 million is not readily accessible by the Company as it is held by REA Group, a majority-owned but separately listed public company[225][226] - The Company expects its internally generated funds, cash on hand, and access to the credit and capital markets to meet its liquidity needs for at least the next 12 months[225] Issuer Purchases of Equity Securities Details News Corporation's share repurchase program and shares bought back during the period - The Company has a $1 billion share repurchase program, with approximately $522 million remaining authorized as of December 31, 2023[228] - During the three and six months ended December 31, 2023, the Company repurchased 1.2 million shares for $26 million and 2.6 million shares for $55 million, respectively[229] Dividends Reports on News Corporation's dividend declarations and factors influencing future payments - A semi-annual cash dividend of $0.10 per share for Class A Common Stock and Class B Common Stock was declared in August 2023 and paid on October 11, 2023[230] - The timing, declaration, amount, and payment of future dividends are at the discretion of the Board of Directors, depending on financial condition, earnings, capital requirements, and debt covenants[230] Sources and Uses of Cash Analyzes News Corporation's cash flows from operating, investing, and financing activities | Metric | 6 Months Ended Dec 31, 2023 (Millions) | 6 Months Ended Dec 31, 2022 (Millions) | | :--------------------------------------- | :------------------------------------- | :------------------------------------- | | Net cash provided by operating activities | $305 | $161 | - Net cash provided by operating activities increased by $144 million to $305 million for the six months ended December 31, 2023, due to higher Total Segment EBITDA, lower working capital, and lower tax payments[231] | Metric | 6 Months Ended Dec 31, 2023 (Millions) | 6 Months Ended Dec 31, 2022 (Millions) | | :--------------------------------------- | :------------------------------------- | :------------------------------------- | | Net cash used in investing activities | $(278) | $(337) | - Net cash used in investing activities decreased by $59 million to $278 million for the six months ended December 31, 2023, with $236 million for capital expenditures and $42 million for acquisitions and investments[231] | Metric | 6 Months Ended Dec 31, 2023 (Millions) | 6 Months Ended Dec 31, 2022 (Millions) | | :--------------------------------------- | :------------------------------------- | :------------------------------------- | | Net cash used in financing activities | $(144) | $(312) | - Net cash used in financing activities decreased to $144 million for the six months ended December 31, 2023, from $312 million in the prior year, primarily due to debt refinancings at Foxtel and REA Group[233][234][235] Reconciliation of Free Cash Flow and Free Cash Flow Available to News Corporation Reconciles non-GAAP free cash flow measures to operating cash flow, highlighting liquidity trends - Free cash flow and free cash flow available to News Corporation are non-GAAP financial measures providing useful information about the Company's liquidity and cash flow trends[236][238] | Metric | 6 Months Ended Dec 31, 2023 (Millions) | 6 Months Ended Dec 31, 2022 (Millions) | | :--------------------------------------- | :------------------------------------- | :------------------------------------- | | Net cash provided by operating activities | $305 | $161 | | Less: Capital expenditures | $(236) | $(217) | | Free cash flow | $69 | $(56) | | Less: REA Group free cash flow | $(134) | $(96) | | Plus: Cash dividends received from REA Group | $44 | $50 | | Free cash flow available to News Corporation | $(21) | $(102) | - Free cash flow improved to $69 million (from -$56 million) and free cash flow available to News Corporation improved to -$21 million (from -$102 million) for the six months ended December 31, 2023, primarily due to higher cash provided by operating activities[241] Borrowings Summarizes News Corporation's total borrowings, undrawn commitments, and debt covenant compliance - Total borrowings were $3.0 billion as of December 31, 2023, with Foxtel Group and REA Group debt being non-recourse to News Corp[242] - News Corp had $1,974 million in borrowings and $750 million of undrawn commitments available under its Revolving Facility[243] - The Foxtel Debt Group had approximately $767 million in borrowings and A$255 million in undrawn commitments, having refinanced with a new A$1.2 billion syndicated credit facility[244][245] - REA Group had approximately $271 million in borrowings and A$285 million in undrawn commitments, having entered into new syndicated and bilateral credit facilities[249][250][254] - The Company was in compliance with all debt covenants as of December 31, 2023[255] Commitments Outlines News Corporation's contractual obligations, including borrowings and interest payments | Commitment Type | Total | Less than 1 year | 1-3 years | 3-5 years | More than 5 years | | :-------------------------- | :---- | :--------------- | :-------- | :-------- | :---------------- | | Borrowings | $3,029 | $36 | $694 | $799 | $1,500 | | Interest payments on borrowings | $686 | $155 | $269 | $153 | $109 | - The Company's other commitments as of December 31, 2023, have not changed significantly from the disclosures included in the 2023 Form 10-K[258] Contingencies Discusses News Corporation's involvement in legal proceedings and the accrual of related liabilities - The Company is routinely involved in various legal proceedings, claims, and governmental inspections or investigations, with outcomes subject to significant uncertainty[259] - Accrued liabilities for legal claims are established when a loss is probable and estimable, and are adjusted as new information becomes available[260] Item 3. Quantitative and Qualitative Disclosures About Market Risk No material changes to the Company's market risk sensitivity assessment since the 2023 Form 10-K disclosures - There has been no material change in the Company's assessment of its sensitivity to market risk since its presentation set forth in Item 7A of the Company's 2023 Form 10-K[261] Item 4. Controls and Procedures Confirms effective disclosure controls and no material changes to internal control over financial reporting - The Company's management, with the participation of the CEO and CFO, evaluated and concluded that the disclosure controls and procedures were effective as of December 31, 2023[262] - There has been no material change in the Company's internal control over financial reporting during the second quarter of fiscal 2024[263] Part II. Other Information Presents supplementary information not covered in the financial statements, including legal, risk, and equity details Item 1. Legal Proceedings Refers to Note 9 of the Consolidated Financial Statements for details on legal proceedings and claims - Legal proceedings are detailed in Note 9—Commitments and Contingencies in the accompanying Consolidated Financial Statements[265] Item 1A. Risk Factors No material changes to the risk factors previously described in the Company's 2023 Form 10-K - There have been no material changes to the risk factors described in the 2023 Form 10-K[266] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds Details the Company's ongoing $1 billion stock repurchase program, including shares repurchased and remaining authorization - The Company has a $1 billion stock repurchase program with no time limit, with approximately $522 million remaining authorized as of December 31, 2023[267][268] | Period | Total Number of Shares Purchased (Millions) | Average Price Paid Per Share (Class A) | Average Price Paid Per Share (Class B) | Dollar Value of Shares Yet To Be Purchased (Millions) | | :--------------------------------------- | :---------------------------------------- | :------------------------------------- | :------------------------------------- | :---------------------------------------------------- | | Oct 2, 2023 - Oct 29, 2023 | 0.4 | $20.71 | $21.48 | $539 | | Oct 30, 2023 - Dec 3, 2023 | 0.5 | $21.41 | $22.27 | $529 | | Dec 4, 2023 - Dec 31, 2023 | 0.3 | $22.90 | $23.92 | $522 | | Total | 1.2 | $21.52 | $22.35 | | Item 3. Defaults Upon Senior Securities Indicates that this item is not applicable, signifying no defaults upon senior securities - Not applicable[269] Item 4. Mine Safety Disclosures Indicates that this item is not applicable, signifying no mine safety disclosures - Not applicable[269] Item 5. Other Information Indicates that this item is marked as 'None,' signifying no other information to disclose - None[269] Item 6. Exhibits Lists exhibits filed with the Form 10-Q, including CEO/CFO certifications and Inline XBRL financial data - Includes Chief Executive Officer and Chief Financial Officer Certifications required by Rules 13a-14 and 15d-14 under the Securities Exchange Act of 1934, as amended, and pursuant to 18 U.S.C. Section 1350[270] - The Company's Quarterly Report on Form 10-Q financial information is formatted in Inline XBRL as Exhibit 101[270] Signature Contains the signature of News Corporation's CFO, Susan Panuccio, certifying the report on February 8, 2024 - The report was signed by Susan Panuccio, Chief Financial Officer, on February 8, 2024[272]