News Corp A NWSA
Q2 2011 Earnings Call Transcript

Transcript Call Date 02/02/2011

Operator: Ladies and gentlemen, thank you for standing by, and welcome to the News Corp. Second Quarter 2011 Earnings Release. At this time, all lines are in a listen-only mode. Later we' conduct a question-and-answer session. As a reminder, we ask that you limit yourself to one question, and as a reminder, we're also recording today’s conference.

I’d now like to turn the conference over to Reed Nolte, Senior Vice President, Investor relations, News Corporation. Please go ahead.

Reed Nolte - SVP, IR: Thank you very much, operator. Hello, everyone, and welcome to our second quarter fiscal 2011 earnings conference call. On the call today are Chase Carey, President and Chief Operating Officer; and Dave DeVoe, our Chef Financial Officer.

First we will give some prepared remarks on the most recent quarter; then we'll be happy to take your questions, first from the financial community and then from the press.

This call may include certain forward-looking information with respect to News Corporation's business and strategy. Actual results could differ materially from what is said. News Corporation's Form 10-Q for the three months ended December 31, 2010 identifies risks and uncertainties that could cause actual results to differ, and these statements are qualified by the cautionary statements included in such filings. Additionally, this call will include certain non-GAAP financial measurements, the definition of and a reconciliation of such measures can be found in our earnings release and our 10-Q filing.

Finally, please note that certain financial measures used in this call such as adjusted segment operating income, adjusted earnings per share and adjusted net income are expressed on a non-GAAP basis. The GAAP to non-GAAP reconciliation of segment operating income and the EPS and net income reconciliation is included in our earnings release.

With that, I'll turn it over to Dave.

David DeVoe - SEVP and CFO: Reed, thank you and good afternoon everyone. As you've all seen in today's earnings release, we're pleased with our continued progress in fiscal 2011. We reported second quarter segment operating income of $1.29 billion, a 6% increase over year ago's level, when excluding last year's $500 million litigation charge.

This improvement was led by the continued strong growth at our Cable Programming and Television segments that more than offset a difficult comparison at Filmed Entertainment and higher losses at the Digital Media Group.

During this year's second quarter, the Company recorded a $275 million pre-tax charge related to the impairment of assets in an organizational restructuring at MySpace. Also in the most recent quarter, the Company recorded pre-tax losses from the disposition of certain businesses, including Jamba and the FOX Audience Network Internet ad sales group.

Excluding the net income effect in both years of one-time items, principally consisting of the items just mentioned, as well a litigation settlement charge last year, second quarter adjusted earnings per share this year are $0.29 compared with last year’s result of $0.25.

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