News Corporation Reports Record Full Year Operating Income of $5.4 Billion; Growth of 21% over Fiscal 2007

Business Wire, August 5, 2008

Full Year Earnings Per Share Increases 68% to $1.81;

Fourth Quarter Operating Income Grows 21% to $1.5 Billion on Revenue Growth of 17%

NEW YORK -- FULL YEAR FINANCIAL HIGHLIGHTS

* 21% operating income growth driven by record results at the Direct Broadcast Satellite, Cable Network Programming, Television and Filmed Entertainment segments.

* SKY Italia generates operating income of $419 million, an improvement of $198 million versus a year ago, reflecting net subscriber additions of 366,000 over the past 12 months as the subscriber base expands to 4.56 million.

* Cable Network Programming operating income up 16% despite losses associated with the launch of the Fox Business Network and the Big Ten Network. Operating performance improvement was driven by earnings growth at the Fox News Channel, the Regional Sports Networks and the Fox International Channels.

* Television segment operating income increases 17% on strength of FOX broadcast season and lower programming costs associated with the writers' strike partially offset by decline in local TV advertising revenue.

* Filmed Entertainment delivers seventh consecutive record year of operating income growth, reaching $1.25 billion on strong theatrical release slate and continued success of film and television home entertainment titles.

* Print businesses aggregate operating income increases 12% on strength of the Australian newspaper business and inclusion of Dow Jones & Company.

* Fox Interactive Media grows revenues 57% and increases operating profits five-fold on strength of advertising and search revenue growth at MySpace.

FULL YEAR STRATEGIC HIGHLIGHTS

* Completed a $10.1 billion stock buyback through the exchange of the Company's entire interest in The DIRECTV Group, three Regional Sports Networks and approximately $625 million in cash for an approximately 16 percent interest in the Company's common stock.

* Continued purchasing stock under the Company's stock repurchase program. Total re-purchases to date of approximately $4.2 billion.

* Completed acquisition of Dow Jones & Company, divestiture of equity interest in Gemstar-TV Guide and the sale of real estate in the U.K.

* Following year-end, completed the previously announced sale of eight television stations for approximately $1.1 billion in cash.

News Corporation (NYSE: NWS, NWSA; ASX: NWS, NWSLV) today reported fourth quarter net income of $1.1 billion ($0.43 per share), an increase of $239 million, or 27%, from the $890 million ($0.28 per share on a diluted combined basis1) reported in the fourth quarter a year ago. The year-on-year growth in the quarter primarily reflects increased consolidated operating income and gains from the sale of the Company's interests in Fox Sports Bay Area and Gemstar-TV Guide International, as well as a gain from the unrealized change in fair value of certain outstanding exchangeable debt securities. Partially offsetting these gains was a decrease in earnings from affiliates, primarily from the absence of DIRECTV earnings and a further writedown of BSkyB's ITV investment.

For the full year, net income was $5.4 billion ($1.81 per share), an increase of $2 billion from the $3.4 billion ($1.08 per share on a diluted combined basis1) reported in fiscal 2007. This represents a 68% increase in earnings per share. The full year results primarily reflect increased consolidated operating income, lower equity earnings of affiliates and an increase in Other income, which mainly includes a $1.7 billion tax-free gain on the asset and stock exchange with Liberty Media Corporation, as well as gains from the sales of Fox Sports Bay Area and Gemstar-TV Guide International.

Fourth quarter consolidated operating income of $1.5 billion increased 21% over the $1.2 billion reported a year ago on revenues of $8.6 billion, up 17% from the $7.4 billion reported in the fourth quarter of fiscal 2007. The year-on-year operating income growth for the quarter was primarily driven by double-digit percentage increases at all operating segments with the exception of the Television segment. The Other segment includes a $126 million gain in the quarter from the completion of a planned land sale in the U.K.

Record full year operating income of $5.4 billion increased 21% over the $4.45 billion reported a year ago on revenues of $33 billion, up 15% from the $28.7 billion reported in fiscal 2007. The full year operating income growth was primarily led by record contributions from the Filmed Entertainment, Television, Cable Network Programming and Direct Broadcast Satellite segments.

Commenting on the results, Chairman and Chief Executive Officer Rupert Murdoch said:

"We are extremely pleased with the continued growth we achieved during fiscal 2008 -- our sixth consecutive year of record profits. All of our business segments generated year over year gains, with record profits reported at our satellite broadcasting, cable programming, film and television businesses. Although we clearly face more challenging macro-economic conditions in fiscal '09, we're well positioned to deliver continued, if somewhat less robust growth. Our balance sheet is strong, we have solid operating momentum in many of our key businesses, and most importantly, our assets are diversified, both geographically and along business lines, enabling us to better respond to the economic challenges we may face this year."