NEWS CORP - Quarter Report: 2023 December (Form 10-Q)

)) )) ()

(a) These cross-currency interest rate derivatives were initially designated as cash flow hedges. Hedge accounting for these derivatives was discontinued as of December 31, 2020.

Table of Contents

NEWS CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

million and A$ million as of December 31, 2023 for News Corporation and Foxtel Debt Group borrowings, respectively. The maximum hedged term over which the Company is hedging exposure to variability in interest payments is to July 2027. As of December 31, 2023, the Company estimates that approximately $ million of net derivative gains related to its interest rate swap derivative cash flow hedges included in Accumulated other comprehensive loss will be reclassified into the Statements of Operations within the next 12 months.

The total notional value of foreign currency contract derivatives designated for hedging was $ million as of December 31, 2023. The maximum hedged term over which the Company is hedging exposure to foreign currency fluctuations is less than . As of December 31, 2023, the Company estimates that approximately $ million of net derivative losses related to its foreign currency contract derivative cash flow hedges included in Accumulated other comprehensive loss will be reclassified into the Statements of Operations within the next 12 months.

The total notional value of cross-currency interest rate swap derivatives designated for hedging was approximately $ million as of December 31, 2023. The maximum hedged term over which the Company is hedging exposure to variability in interest and principal payments is to July 2027. As of December 31, 2023, the Company estimates that approximately of net derivative gains related to its cross-currency interest rate swap derivative cash flow hedges included in Accumulated other comprehensive loss will be reclassified into the Statements of Operations within the next 12 months.

)$()$()$ Foreign currency derivatives - cash flow hedges()() ()Cross-currency interest rate derivatives - cash flow hedges() () Total$()$()$()$

Table of Contents

NEWS CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

)$()$()$()Foreign currency derivatives - cash flow hedgesOperating expenses() ()

Cross-currency interest rate derivatives - cash flow hedges

Interest expense, net

Cross-currency interest rate derivatives(a)

Interest expense, net ()()()Total$()$()$()$()

(a) These cross-currency interest rate derivatives were initially designated as cash flow hedges. Hedge accounting for these derivatives was discontinued as of December 31, 2020.

The amounts recognized in Other, net in the Statements of Operations resulting from the changes in fair value of cross-currency interest rate derivatives that were discontinued as cash flow hedges due to hedge ineffectiveness as of December 31, 2020 was a gain of approximately and $ million for the three and six months ended December 31, 2023, respectively, and a loss of approximately $ million and a gain of approximately $ million for the three and six months ended December 31, 2022, respectively.

Other Fair Value Measurements

As of December 31, 2023, the carrying value of the Company’s outstanding borrowings approximates the fair value. The 2022 Senior Notes and the 2021 Senior Notes are classified as Level 2 and the remaining borrowings are classified as Level 3 in the fair value hierarchy.

$ $ $ Net income attributable to noncontrolling interests()()()()Net income attributable to News Corporation stockholders$ $ $ $ Weighted-average number of shares of common stock outstanding - basic Dilutive effect of equity awards Weighted-average number of shares of common stock outstanding - diluted Net income attributable to News Corporation stockholders per share - basic$ $ $ $ Net income attributable to News Corporation stockholders per share - diluted$ $ $ $

Table of Contents

NEWS CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

$ $ $ $

Interest payments on borrowings(b)

Total Other current liabilities$ $

Other, net

$()$()$()Dividends received from equity security investments Gain on remeasurement of previously-held interest Other ()()Total Other, net$ $()$()$()

Supplemental Cash Flow Information

$ Cash paid for taxes$ $

per share for Class A Common Stock and Class B Common Stock. The dividend is payable on April 10, 2024 to stockholders of record as of March 13, 2024.

Table of Contents

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This document, including the following discussion and analysis, contains statements that constitute “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Section 27A of the Securities Act of 1933, as amended. All statements that are not statements of historical fact are forward-looking statements. The words “expect,” “will,” “estimate,” “anticipate,” “predict,” “believe,” “should” and similar expressions and variations thereof are intended to identify forward-looking statements. These statements appear in a number of places in this discussion and analysis and include statements regarding the intent, belief or current expectations of the Company, its directors or its officers with respect to, among other things, trends affecting the Company’s business, financial condition or results of operations, 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. Readers are cautioned that any forward-looking statements are not guarantees of future performance and involve risks and uncertainties. More information regarding these risks and uncertainties and other important factors that could cause actual results to differ materially from those in the forward-looking statements is set forth under the heading “Risk Factors” in Part I, Item 1A. in News Corporation’s Annual Report on Form 10-K for the fiscal year ended June 30, 2023, as filed with the Securities and Exchange Commission (the “SEC”) on August 15, 2023 (the “2023 Form 10-K”), and as may be updated in this and other subsequent Quarterly Reports on Form 10-Q. The Company does not ordinarily make projections of its future operating results and undertakes no obligation (and expressly disclaims any obligation) to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. Readers should carefully review this document and the other documents filed by the Company with the SEC. This section should be read together with the unaudited consolidated financial statements of News Corporation and related notes set forth elsewhere herein and the audited consolidated financial statements of News Corporation and related notes set forth in the 2023 Form 10-K.

INTRODUCTION

News Corporation (together with its subsidiaries, “News Corporation,” “News Corp,” the “Company,” “we” or “us”) is a global diversified media and information services company comprised of businesses across a range of media, including: digital real estate services, subscription video services in Australia, news and information services and book publishing.

The unaudited consolidated financial statements are referred to herein as the “Consolidated Financial Statements.” The consolidated statements of operations are referred to herein as the “Statements of Operations.” The consolidated balance sheets are referred to herein as the “Balance Sheets.” The consolidated statements of cash flows are referred to herein as the “Statements of Cash Flows.” The Consolidated Financial Statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”).

Management’s discussion and analysis of financial condition and results of operations is intended to help provide an understanding of the Company’s financial condition, changes in financial condition and results of operations. This discussion is organized as follows:

•Overview of the Company’s Businesses—This section provides a general description of the Company’s businesses, as well as developments that occurred to date during fiscal 2024 that the Company believes are important in understanding its results of operations and financial condition or to disclose known trends.

•Results of Operations—This section provides an analysis of the Company’s results of operations for the three and six months ended December 31, 2023 and 2022. This analysis is presented on both a consolidated basis and a segment basis. Supplemental revenue information is also included for reporting units within certain segments and is presented on a gross basis, before eliminations in consolidation. In addition, a brief description is provided of significant transactions and events that impact the comparability of the results being analyzed.

•Liquidity and Capital Resources—This section provides an analysis of the Company’s cash flows for the six months ended December 31, 2023 and 2022, as well as a discussion of the Company’s financial arrangements and outstanding commitments, both firm and contingent, that existed as of December 31, 2023.

Table of Contents

OVERVIEW OF THE COMPANY’S BUSINESSES

The Company manages and reports its businesses in the following six segments:

•Digital Real Estate Services—The Digital Real Estate Services segment consists of the Company’s 61.4% interest in REA Group and 80% interest in Move. The remaining 20% interest in Move is held by REA Group. REA Group is a market-leading digital media business specializing in property and is listed on the Australian Securities Exchange (“ASX”) (ASX: REA). REA Group advertises property and property-related services on its websites and mobile apps, including Australia’s leading residential, commercial and share property websites, realestate.com.au, realcommercial.com.au and Flatmates.com.au, property.com.au and property portals in India. In addition, REA Group provides property-related data to the financial sector and financial services through a digital property search and financing experience and a mortgage broking offering.

Move is a leading provider of digital real estate services in the U.S. and primarily operates Realtor.com®, a premier real estate information, advertising and services platform. Move offers real estate advertising solutions to agents and brokers, including its ConnectionsSM Plus, Market VIPSM and AdvantageSM Pro products as well as its referral-based services, ReadyConnect ConciergeSM and UpNest. Move also offers online tools and services to do-it-yourself landlords and tenants.

•Subscription Video Services—The Company’s Subscription Video Services segment provides sports, entertainment and news services to pay-TV and streaming subscribers and other commercial licensees via satellite and internet distribution and consists of (i) the Company’s 65% interest in the Foxtel Group (with the remaining 35% interest held by Telstra, an ASX-listed telecommunications company) and (ii) Australian News Channel (“ANC”). The Foxtel Group is the largest Australian-based subscription television provider. Its Foxtel pay-TV service provides approximately 200 live channels and video on demand covering sports, general entertainment, movies, documentaries, music, children’s programming and news. Foxtel and the Group’s Kayo Sports streaming service offer the leading sports programming content in Australia, with broadcast rights to live sporting events including: National Rugby League, Australian Football League, Cricket Australia and various motorsports programming. The Foxtel Group’s other streaming services include BINGE, its entertainment streaming service, and Foxtel Now, a streaming service that provides access across Foxtel’s live and on-demand content.

ANC operates the SKY NEWS network, Australia’s 24-hour multi-channel, multi-platform news service. ANC channels are distributed throughout Australia and New Zealand and available on Foxtel and Sky Network Television NZ. ANC also owns and operates the international Australia Channel IPTV service and offers content across a variety of digital media platforms, including web, mobile and third party providers.

•Dow Jones—The Dow Jones segment consists of Dow Jones, a global provider of news and business information whose products target individual consumers and enterprise customers and are distributed through a variety of media channels including newspapers, newswires, websites, mobile apps, newsletters, magazines, proprietary databases, live journalism, video and podcasts. Dow Jones’s consumer products include premier brands such as The Wall Street Journal, Barron’s, MarketWatch and Investor’s Business Daily. Dow Jones’s professional information products, which target enterprise customers, include Dow Jones Risk & Compliance, a leading provider of data solutions to help customers identify and manage regulatory, corporate and reputational risk with tools focused on financial crime, sanctions, trade and other compliance requirements, Dow Jones Energy (which includes OPIS), a leading provider of pricing data, news, insights, analysis and other information for energy commodities and key base chemicals, Factiva, a leading provider of global business content, and Dow Jones Newswires, which distributes real-time business news, information and analysis to financial professionals and investors.

•Book Publishing—The Book Publishing segment consists of HarperCollins, the second largest consumer book publisher in the world, with operations in 15 countries and particular strengths in general fiction, nonfiction, children’s and religious publishing. HarperCollins owns more than 120 branded publishing imprints, including Harper, William Morrow, Mariner, HarperCollins Children’s Books, Avon, Harlequin and Christian publishers Zondervan and Thomas Nelson, and publishes works by well-known authors such as Harper Lee, George Orwell, Agatha Christie and Zora Neale Hurston, as well as global author brands including J.R.R. Tolkien, C.S. Lewis, Daniel Silva, Karin Slaughter and Dr. Martin Luther King, Jr. It is also home to many beloved children’s books and authors and a significant Christian publishing business.

Table of Contents

•News Media—The News Media segment consists primarily of News Corp Australia, News UK and the New York Post and includes The Australian, The Daily Telegraph, Herald Sun, The Courier Mail, The Advertiser and the news.com.au website in Australia, The Times, The Sunday Times, The Sun, The Sun on Sunday and thesun.co.uk in the U.K. and the-sun.com in the U.S. This segment also includes Wireless Group, operator of talkSPORT, the leading sports radio network in the U.K., TalkTV in the U.K. and Storyful, a social media content agency.

•Other—The Other segment consists primarily of general corporate overhead expenses, strategy costs and costs related to the U.K. Newspaper Matters (as defined in Note 9—Commitments and Contingencies to the Consolidated Financial Statements).

Other Business Developments

Announced Headcount Reduction

In response to the macroeconomic challenges facing many of the Company’s businesses, the Company implemented a number of cost savings initiatives, including the 5% headcount reduction announced in February 2023. The Company has notified substantially all of the affected employees and recognized associated cash restructuring charges of approximately $106 million through December 31, 2023. Based on the actions taken, the Company expects to generate annualized gross cost savings of at least $160 million, the majority of which will be reflected in fiscal 2024. See Note 3—Impairment and Restructuring Charges in the accompanying Consolidated Financial Statements.

Proposed Combination of U.K. Printing Operations

In October 2023, News UK and DMG Media announced a proposed arrangement to combine certain printing operations of both companies within a separate joint venture. The Company believes this proposal would help improve the efficiency of News UK and DMG Media’s print operations and establish a sustainable business model for national newspaper printing in the U.K. The proposed arrangement is subject to regulatory approval, and each company’s print operations will remain separate until approval is granted.

Table of Contents

RESULTS OF OPERATIONS

Results of Operations—For the three and six months ended December 31, 2023 versus the three and six months ended December 31, 2022

The following table sets forth the Company’s operating results for the three and six months ended December 31, 2023 as compared to the three and six months ended December 31, 2022:


	For the three months ended December 31,								For the six months ended December 31,
	2023		2022		Change		% Change		2023		2022		Change		% Change
(in millions, except %)					Better/(Worse)								Better/(Worse)
Revenues:
Circulation and subscription	$	1,119	$	1,085	$	34	3	%	$	2,248	$	2,196	$	52	2	%
Advertising	438		464		(26)		(6)	%	829		870		(41)		(5)	%
Consumer	527		512		15		3	%	1,029		979		50		5	%
Real estate	327		301		26		9	%	638		624		14		2	%
Other	175		159		16		10	%	341		330		11		3	%
Total Revenues	2,586		2,521		65		3	%	5,085		4,999		86		2	%
Operating expenses	(1,281)		(1,294)		13		1	%	(2,554)		(2,567)		13		1	%
Selling, general and administrative	(832)		(818)		(14)		(2)	%	(1,694)		(1,673)		(21)		(1)	%
Depreciation and amortization	(179)		(174)		(5)		(3)	%	(350)		(353)		3		1	%
Impairment and restructuring charges	(13)		(19)		6		32	%	(51)		(40)		(11)		(28)	%
Equity losses of affiliates	(1)		(29)		28		97	%	(3)		(33)		30		91	%
Interest expense, net	(25)		(26)		1		4	%	(48)		(53)		5		9	%
Other, net	22		(6)		28		**		(13)		(24)		11		46	%
Income before income tax expense	277		155		122		79	%	372		256		116		45	%
Income tax expense	(94)		(61)		(33)		(54)	%	(131)		(96)		(35)		(36)	%
Net income	183		94		89		95	%	241		160		81		51	%
Net income attributable to noncontrolling interests	(27)		(27)		—		—	%	(55)		(53)		(2)		(4)	%
Net income attributable to News Corporation stockholders	$	156	$	67	$	89	**		$	186	$	107	$	79	74	%

** not meaningful

Revenues— Revenues increased $65 million, or 3%, and $86 million, or 2%, for the three and six months ended December 31, 2023, respectively, as compared to the corresponding periods of fiscal 2023.

The revenue increase for the three months ended December 31, 2023 was primarily driven by increases at the Digital Real Estate Services segment due to higher Australian residential revenues at REA Group, partially offset by lower revenues at Move primarily due to the continued impact of the macroeconomic environment on the U.S. housing market, at the Dow Jones segment primarily due to higher professional information business revenues and at the Book Publishing segment due to higher digital sales and improved returns in the U.S. primarily driven by recovering consumer demand industry-wide and the absence of some logistical constraints at Amazon. The increases were partially offset by lower revenues at the News Media segment primarily due to lower advertising revenues. The impact of foreign currency fluctuations of the U.S. dollar against local currencies resulted in a revenue increase of $13 million, or 1%, for the three months ended December 31, 2023 as compared to the corresponding period of fiscal 2023.

Table of Contents

The revenue increase for the six months ended December 31, 2023 was primarily driven by the increase at the Book Publishing segment due to higher digital and physical book sales and improved returns in the U.S. primarily driven by recovering consumer demand industry-wide and the absence of the impact of Amazon’s reset of its inventory levels and rightsizing of its warehouse footprint in the prior year, at the Dow Jones segment due to higher professional information business revenues and at the Digital Real Estate Services segment due to higher Australian residential revenues at REA Group, partially offset by lower revenues at Move primarily due to the continued impact of the macroeconomic environment on the U.S. housing market. These increases were partially offset by lower advertising revenues at the News Media segment. The impact of foreign currency fluctuations of the U.S. dollar against local currencies resulted in a revenue decrease of $1 million for the six months ended December 31, 2023 as compared to the corresponding period of fiscal 2023.

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.

Operating expenses— Operating expenses decreased $13 million, or 1%, for both the three and six months ended December 31, 2023 as compared to the corresponding periods of fiscal 2023.

The decrease in operating expenses for the three months ended December 31, 2023 was primarily driven by lower expenses at the Book Publishing segment primarily due to lower manufacturing, freight and distribution costs driven by product mix and the absence of prior year supply chain challenges and inventory and inflationary pressures and at the News Media segment primarily due to lower production costs at News UK driven by lower print volume and newsprint prices. These decreases were partially offset by higher expenses at the Subscription Video Services segment primarily due to higher sports programming rights costs due to contractual increases. The Company also benefited from gross cost savings related to the announced 5% headcount reduction initiative. The impact of foreign currency fluctuations of the U.S. dollar against local currencies resulted in an Operating expense increase of $8 million, or 1%, for the three months ended December 31, 2023 as compared to the corresponding period of fiscal 2023.

The decrease in operating expenses for the six months ended December 31, 2023 was primarily driven by lower expenses at the Book Publishing segment primarily due to lower manufacturing, freight and distribution costs driven by product mix and the absence of prior year supply chain challenges and inventory and inflationary pressures and at the News Media segment primarily due to lower production at News UK driven by lower print volume and newsprint prices. These decreases were partially offset by higher expenses at the Subscription Video Services segment primarily driven by higher sports programming rights costs due to contractual increases. The Company also benefited from gross cost savings related to the announced 5% headcount reduction initiative. The impact of foreign currency fluctuations of the U.S. dollar against local currencies resulted in an Operating expense increase of $5 million for the six months ended December 31, 2023 as compared to the corresponding period of fiscal 2023.

Selling, general and administrative— Selling, general and administrative increased $14 million, or 2%, and $21 million, or 1%, for the three and six months ended December 31, 2023, respectively, as compared to the corresponding periods of fiscal 2023.

The increase in Selling, general and administrative for the three months ended December 31, 2023 was primarily driven by higher expenses at the Digital Real Estate Services segment primarily due to higher employee costs and broker commissions at REA Group and at the Book Publishing segment primarily due to higher employee costs. These increases were partially offset by the decrease at the Subscription Video Services segment due to lower technology and marketing costs and the absence of $6 million of one-time 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 in the prior year. The Company also benefited from gross cost savings related to the announced 5% headcount reduction initiative. The impact of foreign currency fluctuations of the U.S. dollar against local currencies resulted in a Selling, general and administrative increase of $5 million, or 1%, for the three months ended December 31, 2023 as compared to the corresponding period of fiscal 2023.

Table of Contents

The increase in Selling, general and administrative for the six months ended December 31, 2023 was primarily driven by higher expenses at the Book Publishing segment primarily due to higher employee costs and at the Digital Real Estate Services segment primarily due to higher employee costs and broker commissions at REA Group, partially offset by lower expenses at the Subscription Video Services segment primarily driven by lower marketing and technology costs and the absence of $6 million of one-time 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 in the prior year. The Company also benefited from gross cost savings related to the announced 5% headcount reduction initiative. The impact of foreign currency fluctuations of the U.S. dollar against local currencies resulted in a Selling, general and administrative increase of $2 million for the six months ended December 31, 2023 as compared to the corresponding period of fiscal 2023.

Depreciation and amortization— Depreciation and amortization expense increased $5 million, or 3%, and decreased $3 million, or 1%, for the three and six months ended December 31, 2023, respectively, as compared to the corresponding periods of fiscal 2023. The impact of foreign currency fluctuations of the U.S. dollar against local currencies resulted in a depreciation and amortization expense decrease of $1 million and $4 million, or 1%, for the three and six months ended December 31, 2023, respectively, as compared to the corresponding periods of fiscal 2023.

Impairment and restructuring charges— During the three and six months ended December 31, 2023, the Company recognized non-cash impairment charges of $1 million and $22 million, respectively, at the News Media segment related to the write-down of fixed assets associated with the proposed combination of certain U.K. printing operations with those of a third party.

During the three and six months ended December 31, 2023, the Company recorded restructuring charges of $10 million and $27 million, respectively. During the three and six months ended December 31, 2022, the Company recorded restructuring charges of $19 million and $40 million, respectively.

See Note 3—Impairment and Restructuring Charges in the accompanying Consolidated Financial Statements.

Equity losses of affiliates— Equity losses of affiliates decreased by $28 million and $30 million for the three and six months ended December 31, 2023, respectively, as compared to the corresponding periods of fiscal 2023, primarily due to the absence of losses from an investment in an Australian sports wagering venture recognized during the three and six months ended December 31, 2022. See Note 4—Investments in the accompanying Consolidated Financial Statements.

Interest expense, net— Interest expense, net decreased by $1 million, or 4%, and $5 million, or 9%, for the three and six months ended December 31, 2023, respectively, as compared to the corresponding periods of fiscal 2023, primarily driven by higher interest income as a result of higher interest rates on cash balances. See Note 5—Borrowings and Note 7—Financial Instruments and Fair Value Measurements in the accompanying Consolidated Financial Statements.

Other, net— Other, net increased by $28 million and $11 million for the three and six months ended December 31, 2023, respectively, as compared to the corresponding periods of fiscal 2023. See Note 12—Additional Financial Information in the accompanying Consolidated Financial Statements.

Income tax expense— For the three months ended December 31, 2023, the Company recorded income tax expense of $94 million on pre-tax income of $277 million, resulting in an effective tax rate that was higher than the U.S. statutory tax rate. The tax rate was impacted by foreign operations which are subject to higher tax rates and by valuation allowances recorded against tax benefits in certain businesses.

For the six months ended December 31, 2023, the Company recorded income tax expense of $131 million on pre-tax income of $372 million, resulting in an effective tax rate that was higher than the U.S. statutory tax rate. The tax rate was impacted by foreign operations which are subject to higher tax rates and by valuation allowances recorded against tax benefits in certain businesses.

For the three months ended December 31, 2022, the Company recorded income tax expense of $61 million on pre-tax income of $155 million, resulting in an effective tax rate that was higher than the U.S. statutory tax rate. The tax rate was impacted by foreign operations which are subject to higher tax rates and by valuation allowances recorded against tax benefits in certain businesses.

Table of Contents

For the six months ended December 31, 2022, the Company recorded income tax expense of $96 million on pre-tax income of $256 million, resulting in an effective tax rate that was higher than the U.S. statutory tax rate. The tax rate was impacted by foreign operations which are subject to higher tax rates and by valuation allowances recorded against tax benefits in certain businesses.

Management assesses available evidence to determine whether sufficient future taxable income will be generated to permit the use of existing deferred tax assets. Based on management’s assessment of available evidence, it has been determined that it is more likely than not that certain deferred tax assets may not be realized and therefore, a valuation allowance has been established against those tax assets.

The Company’s tax returns are subject to on-going review and examination by various tax authorities. Tax authorities may not agree with the treatment of items reported in the Company’s tax returns, and therefore the outcome of tax reviews and examinations can be unpredictable. The Company believes it has appropriately accrued for the expected outcome of uncertain tax matters and believes such liabilities represent a reasonable provision for taxes ultimately expected to be paid. However, these liabilities may need to be adjusted as new information becomes known and as tax examinations continue to progress, or as settlements or litigations occur. See Note 10—Income Taxes in the accompanying Consolidated Financial Statements.

Net income— Net income for the three and six months ended December 31, 2023 was $183 million and $241 million, respectively, compared to net income of $94 million and $160 million for the corresponding periods of fiscal 2023.

Net income for the three months ended December 31, 2023 increased by $89 million, or 95%, as compared to the corresponding period of fiscal 2023, primarily driven by higher Total Segment EBITDA, higher Other, net and lower losses from equity affiliates, partially offset by higher income tax expense.

Net income for the six months ended December 31, 2023 increased by $81 million, or 51%, as compared to the corresponding period of fiscal 2023, primarily driven by higher Total Segment EBITDA, lower losses from equity affiliates and higher Other, net, partially offset by higher income tax expense and impairment and restructuring charges.

Net income attributable to noncontrolling interests— Net income attributable to noncontrolling interests was flat and increased by $2 million, or 4%, for the three and six months ended December 31, 2023, respectively, as compared to the corresponding periods of fiscal 2023.

Segment Analysis

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. 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. Segment EBITDA may not be comparable to similarly titled measures reported by other companies, since companies and investors may differ as to what items should be included in the calculation of Segment EBITDA. 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.

Table of Contents

The following table reconciles Net income to Total Segment EBITDA for the three and six months ended December 31, 2023 and 2022:


	For the three months ended December 31,				For the six months ended December 31,
	2023		2022		2023		2022
(in millions)
Net income	$	183	$	94	$	241	$	160
Add:
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

The following tables set forth the Company’s Revenues and Segment EBITDA by reportable segment for the three and six months ended December 31, 2023 and 2022:


	For the three months ended December 31,
	2023				2022
(in millions)	Revenues		Segment EBITDA		Revenues		Segment EBITDA
Digital Real Estate Services	$	419	$	147	$	386	$	128
Subscription Video Services	470		77		462		90
Dow Jones	584		163		563		139
Book Publishing	550		85		531		51
News Media	563		52		579		59
Other	—		(51)		—		(58)
Total	$	2,586	$	473	$	2,521	$	409


	For the six months ended December 31,
	2023				2022
(in millions)	Revenues		Segment EBITDA		Revenues		Segment EBITDA
Digital Real Estate Services	$	822	$	269	$	807	$	247
Subscription Video Services	956		170		964		201
Dow Jones	1,121		287		1,078		252
Book Publishing	1,075		150		1,018		90
News Media	1,111		66		1,132		77
Other	—		(105)		—		(108)
Total	$	5,085	$	837	$	4,999	$	759

Table of Contents

Digital Real Estate Services (16% of the Company’s consolidated revenues in both the six months ended December 31, 2023 and 2022)


	For the three months ended December 31,								For the six months ended December 31,
	2023		2022		Change		% Change		2023		2022		Change		% Change
(in millions, except %)					Better/(Worse)								Better/(Worse)
Revenues:
Circulation and subscription	$	2	$	3	$	(1)	(33)	%	$	5	$	6	$	(1)	(17)	%
Advertising	32		33		(1)		(3)	%	67		68		(1)		(1)	%
Real estate	327		301		26		9	%	638		624		14		2	%
Other	58		49		9		18	%	112		109		3		3	%
Total Revenues	419		386		33		9	%	822		807		15		2	%
Operating expenses	(47)		(51)		4		8	%	(96)		(108)		12		11	%
Selling, general and administrative	(225)		(207)		(18)		(9)	%	(457)		(452)		(5)		(1)	%
Segment EBITDA	$	147	$	128	$	19	15	%	$	269	$	247	$	22	9	%

Total Subscribers (Total (Paid))(d)

4,365 (4,317 paid)4,414 (4,329 paid)


	For the three months ended December 31,		For the six months ended December 31,
	2023	2022	2023	2022
Broadcast ARPU(e)	A$86 (US$56)	A$83 (US$55)	A$85 (US$56)	A$83 (US$56)
Broadcast Subscriber Churn(f)	12.9%	12.9%	12.2%	13.6%

(a) Subscribing households throughout Australia as of December 31, 2023 and 2022.

(b) Commercial subscribers throughout Australia as of December 31, 2023 and 2022. Commercial subscribers are calculated as residential equivalent business units and are derived by dividing total recurring revenue from these subscribers by an estimated average Broadcast ARPU which is held constant through the year.

(c) Total and Paid subscribers for the applicable streaming service as of December 31, 2023 and 2022. Paid subscribers excludes customers receiving service for no charge under certain new subscriber promotions.

(d) Total subscribers consists of Foxtel Group’s broadcast and streaming services listed above and its news aggregation streaming service.

(e) Average monthly broadcast residential subscription revenue per user (“Broadcast ARPU”) for the three and six months ended December 31, 2023 and 2022.

(f) Broadcast residential subscriber churn rate (“Broadcast Subscriber Churn”) for the three and six months ended December 31, 2023 and 2022. Broadcast subscriber churn represents the number of residential subscribers whose service is disconnected, expressed as a percentage of the average total number of residential subscribers, presented on an annual basis.

Table of Contents

Dow Jones (22% of the Company’s consolidated revenues in both the six months ended December 31, 2023 and 2022)


	For the three months ended December 31,								For the six months ended December 31,
	2023		2022		Change		% Change		2023		2022		Change		% Change
(in millions, except %)					Better/(Worse)								Better/(Worse)
Revenues:
Circulation and subscription	$	441	$	417	$	24	6	%	$	877	$	831	$	46	6	%
Advertising	126		131		(5)		(4)	%	217		225		(8)		(4)	%
Other	17		15		2		13	%	27		22		5		23	%
Total Revenues	584		563		21		4	%	1,121		1,078		43		4	%
Operating expenses	(234)		(240)		6		3	%	(469)		(470)		1		—	%
Selling, general and administrative	(187)		(184)		(3)		(2)	%	(365)		(356)		(9)		(3)	%
Segment EBITDA	$	163	$	139	$	24	17	%	$	287	$	252	$	35	14	%

For the three months ended December 31, 2023, revenues at the Dow Jones segment increased $21 million, or 4%, as compared to the corresponding period of fiscal 2023, primarily driven by higher professional information business revenues. Digital revenues at the Dow Jones segment represented 78% of total revenues for the three months ended December 31, 2023, as compared to 76% in the corresponding period of fiscal 2023. The impact of foreign currency fluctuations of the U.S. dollar against local currencies resulted in a revenue increase of $3 million, or 1%, for the three months ended December 31, 2023 as compared to the corresponding period of fiscal 2023.

For the six months ended December 31, 2023, revenues at the Dow Jones segment increased $43 million, or 4%, as compared to the corresponding period of fiscal 2023, primarily driven by higher professional information business revenues. Digital revenues at the Dow Jones segment represented 79% of total revenues for the six months ended December 31, 2023, as compared to 77% in the corresponding period of fiscal 2023. The impact of foreign currency fluctuations of the U.S. dollar against local currencies resulted in a revenue increase of $7 million, or 1%, for the six months ended December 31, 2023 as compared to the corresponding period of fiscal 2023.

Circulation and subscription revenues


	For the three months ended December 31,								For the six months ended December 31,
	2023		2022		Change		% Change		2023		2022		Change		% Change
(in millions, except %)					Better/(Worse)								Better/(Worse)
Circulation and subscription revenues:
Circulation and other	$	231	$	231	$	—	—	%	$	463	$	466	$	(3)	(1)	%
Risk and Compliance	72		62		10		16	%	142		119		23		19	%
Dow Jones Energy	62		54		8		15	%	123		105		18		17	%
Other information services	76		70		6		9	%	149		141		8		6	%
Professional information business	210		186		24		13	%	414		365		49		13	%
Total circulation and subscription revenues	$	441	$	417	$	24	6	%	$	877	$	831	$	46	6	%

Circulation and subscription revenues increased $24 million, or 6%, during the three months ended December 31, 2023 as compared to the corresponding period of fiscal 2023. Professional information business revenues increased $24 million, or 13%, primarily driven by the $10 million increase in Risk & Compliance revenues due to growth from both corporate and financial customers, the $8 million increase in Dow Jones Energy revenues resulting from price increases and new products and customers and the $6 million increase in Other information services revenues due to higher revenues at Factiva. Circulation and other revenues were flat, as the growth in digital-only subscriptions, primarily at The Wall Street Journal, was offset by print circulation declines. Digital revenues represented 70% of circulation revenue for the three months ended December 31, 2023, as compared to 69% in the corresponding period of fiscal 2023.

Table of Contents

Circulation and subscription revenues increased $46 million, or 6%, during the six months ended December 31, 2023 as compared to the corresponding period of fiscal 2023. Professional information business revenues increased $49 million, or 13%, primarily driven by the $23 million increase in Risk & Compliance revenues due to growth from both financial and corporate customers, the $18 million increase in Dow Jones Energy revenues resulting from price increases, new products and customers and a modest benefit from new events and one-time items and the $8 million increase in Other information services revenues due to higher revenues at Factiva. Circulation and other revenues decreased $3 million, or 1%, driven by print circulation declines and lower content licensing revenues, partially offset by growth in digital-only subscriptions, primarily at The Wall Street Journal. Digital revenues represented 70% of circulation revenue for the six months ended December 31, 2023, as compared to 68% in the corresponding period of fiscal 2023.

The following table summarizes average daily consumer subscriptions during the three months ended December 31, 2023 and 2022 for select publications and for all consumer subscription products:(a)


	For the three months ended December 31(b),
	2023	2022	Change	% Change
(in thousands, except %)			Better/(Worse)
The Wall Street Journal
Digital-only subscriptions(c)	3,528	3,167	361	11	%
Total subscriptions	4,052	3,780	272	7	%
Barron’s Group(d)
Digital-only subscriptions(c)	1,104	894	210	23	%
Total subscriptions	1,242	1,062	180	17	%
Total Consumer(e)
Digital-only subscriptions(c)	4,746	4,139	607	15	%
Total subscriptions	5,427	4,943	484	10	%

(a)Based on internal data for the periods from October 2, 2023 through December 31, 2023 and October 3, 2022 through January 1, 2023, respectively, with independent verification procedures performed by PricewaterhouseCoopers LLP UK.

(b)Subscriptions include individual consumer subscriptions, as well as subscriptions purchased by companies, schools, businesses and associations for use by their respective employees, students, customers or members. Subscriptions exclude single-copy sales and copies purchased by hotels, airlines and other businesses for limited distribution or access to customers.

(c)For some publications, including The Wall Street Journal and Barron’s, Dow Jones sells bundled print and digital products. For bundles that provide access to both print and digital products every day of the week, only one unit is reported each day and is designated as a print subscription. For bundled products that provide access to the print product only on specified days and full digital access, one print subscription is reported for each day that a print copy is served and one digital subscription is reported for each remaining day of the week.

(d)Barron’s Group consists of Barron’s, MarketWatch, Financial News and Private Equity News.

(e)Total Consumer consists of The Wall Street Journal, Barron’s Group and Investor’s Business Daily.

Advertising revenues

Advertising revenues decreased $5 million, or 4%, during the three months ended December 31, 2023 as compared to the corresponding period of fiscal 2023, driven by the $6 million decrease in print advertising revenues primarily due to lower advertising spend within the financial services sector. Digital advertising represented 62% of advertising revenue for the three months ended December 31, 2023, as compared to 59% in the corresponding period of fiscal 2023.

Advertising revenues decreased $8 million, or 4%, during the six months ended December 31, 2023 as compared to the corresponding period of fiscal 2023, driven by the $8 million decrease in print advertising revenues primarily due to lower advertising spend within the technology and financial services sectors. Digital advertising represented 64% of advertising revenue for the six months ended December 31, 2023, as compared to 61% in the corresponding period of fiscal 2023.

Segment EBITDA

For the three months ended December 31, 2023, Segment EBITDA at the Dow Jones segment increased $24 million, or 17%, as compared to the corresponding period of fiscal 2023, primarily due to the increase in revenues discussed above and gross cost savings related to the announced 5% headcount reduction initiative.

Table of Contents

For the six months ended December 31, 2023, Segment EBITDA at the Dow Jones segment increased $35 million, or 14%, as compared to the corresponding period of fiscal 2023, primarily due to the increase in revenues discussed above and gross cost savings related to the announced 5% headcount reduction initiative.

Book Publishing (21% and 20% of the Company’s consolidated revenues in the six months ended December 31, 2023 and 2022, respectively)


	For the three months ended December 31,								For the six months ended December 31,
	2023		2022		Change		% Change		2023		2022		Change		% Change
(in millions, except %)					Better/(Worse)								Better/(Worse)
Revenues:
Consumer	$	527	$	512	$	15	3	%	$	1,029	$	979	$	50	5	%
Other	23		19		4		21	%	46		39		7		18	%
Total Revenues	550		531		19		4	%	1,075		1,018		57		6	%
Operating expenses	(370)		(392)		22		6	%	(736)		(758)		22		3	%
Selling, general and administrative	(95)		(88)		(7)		(8)	%	(189)		(170)		(19)		(11)	%
Segment EBITDA	$	85	$	51	$	34	67	%	$	150	$	90	$	60	67	%

For the three months ended December 31, 2023, revenues at the Book Publishing segment increased $19 million, or 4%, as compared to the corresponding period of fiscal 2023, primarily driven by higher digital book sales, including Tom Lake by Ann Patchett and Demon Copperhead by Barbara Kingsolver, and improved returns in the U.S., primarily driven by recovering consumer demand industry-wide and the absence of some logistical constraints at Amazon. Digital sales increased by 15% as compared to the corresponding period of fiscal 2023 driven by strong market growth for downloadable audiobook sales as well as the contribution from a new Spotify partnership. Digital sales represented approximately 21% of consumer revenues, as compared to 19% in the corresponding period of fiscal 2023, and backlist sales represented approximately 60% of consumer revenues during the three months ended December 31, 2023, as compared to 57% in the corresponding period of fiscal 2023. The impact of foreign currency fluctuations of the U.S. dollar against local currencies resulted in a revenue increase of $6 million, or 2%, for the three months ended December 31, 2023 as compared to the corresponding period of fiscal 2023.

For the three months ended December 31, 2023, Segment EBITDA at the Book Publishing segment increased $34 million, or 67%, as compared to the corresponding period of fiscal 2023, primarily due to the higher revenues discussed above and lower manufacturing, freight and distribution costs driven by product mix and the absence of prior year supply chain challenges and inventory and inflationary pressures, partially offset by higher employee costs.

For the six months ended December 31, 2023, revenues at the Book Publishing segment increased $57 million, or 6%, as compared to the corresponding period of fiscal 2023, primarily driven by higher digital and physical book sales, improved returns in the U.S., primarily driven by recovering consumer demand industry-wide and the absence of the impact of Amazon’s reset of its inventory levels and rightsizing of its warehouse footprint in the prior year. Digital sales increased by 9% as compared to the corresponding period of fiscal 2023 driven by strong market growth for downloadable audiobook sales as well as the contribution from a new Spotify partnership. Digital sales represented approximately 22% of consumer revenues, as compared to 21% in the corresponding period of fiscal 2023. Backlist sales represented approximately 60% of consumer revenues during the six months ended December 31, 2023, as compared to 61% in the corresponding period of fiscal 2023. The impact of foreign currency fluctuations of the U.S. dollar against local currencies resulted in a revenue increase of $13 million, or 2%, for the six months ended December 31, 2023 as compared to the corresponding period of fiscal 2023.

For the six months ended December 31, 2023, Segment EBITDA at the Book Publishing segment increased $60 million, or 67%, as compared to the corresponding period of fiscal 2023, primarily due to the higher revenues discussed above and lower manufacturing, freight and distribution costs driven by product mix and the absence of prior year supply chain challenges and inventory and inflationary pressures, partially offset by higher employee costs.

Table of Contents

News Media (22% and 23% of the Company’s consolidated revenues in the six months ended December 31, 2023 and 2022, respectively)


	For the three months ended December 31,								For the six months ended December 31,
	2023		2022		Change		% Change		2023		2022		Change		% Change
(in millions, except %)					Better/(Worse)								Better/(Worse)
Revenues:
Circulation and subscription	$	272	$	260	$	12	5	%	$	547	$	529	$	18	3	%
Advertising	229		253		(24)		(9)	%	432		466		(34)		(7)	%
Other	62		66		(4)		(6)	%	132		137		(5)		(4)	%
Total Revenues	563		579		(16)		(3)	%	1,111		1,132		(21)		(2)	%
Operating expenses	(307)		(319)		12		4	%	(621)		(633)		12		2	%
Selling, general and administrative	(204)		(201)		(3)		(1)	%	(424)		(422)		(2)		—	%
Segment EBITDA	$	52	$	59	$	(7)	(12)	%	$	66	$	77	$	(11)	(14)	%

Revenues at the News Media segment decreased $16 million, or 3%, for the three months ended December 31, 2023 as compared to the corresponding period of fiscal 2023. Advertising revenues decreased $24 million, or 9%, as compared to the corresponding period of fiscal 2023, primarily driven by lower digital advertising, mainly due to a decline in traffic at some mastheads due to platform related changes, and lower print advertising primarily at News Corp Australia, partially offset by the $5 million, or 2%, positive impact of foreign currency fluctuations. Circulation and subscription revenues increased $12 million, or 5%, as compared to the corresponding period of fiscal 2023, primarily driven by the $7 million, or 3%, positive impact of foreign currency fluctuations, cover price increases and digital subscriber growth across key mastheads, partially offset by print volume declines. The impact of foreign currency fluctuations of the U.S. dollar against local currencies resulted in a revenue increase of $13 million, or 2%, for the three months ended December 31, 2023 as compared to the corresponding period of fiscal 2023.

Segment EBITDA at the News Media segment decreased by $7 million, or 12%, for the three months ended December 31, 2023 as compared to the corresponding period of fiscal 2023, primarily due to the lower revenues discussed above, partially offset by lower production costs at News UK driven by lower print volume and newsprint prices and gross cost savings related to the announced 5% headcount reduction initiative.

Revenues at the News Media segment decreased $21 million, or 2%, for the six months ended December 31, 2023 as compared to the corresponding period of fiscal 2023. Advertising revenues decreased $34 million, or 7%, as compared to the corresponding period of fiscal 2023, primarily driven by lower print advertising at News Corp Australia and News UK and lower digital advertising, mainly due to a decline in traffic at some mastheads due to platform related changes, partially offset by the $7 million, or 2%, positive impact of foreign currency fluctuations. Circulation and subscription revenues increased $18 million, or 3%, as compared to the corresponding period of fiscal 2023, driven by the $12 million, or 2%, positive impact of foreign currency fluctuations, cover price increases and digital subscriber growth across key mastheads, partially offset by print volume declines. The impact of foreign currency fluctuations of the U.S. dollar against local currencies resulted in a revenue increase of $20 million, or 2%, for the six months ended December 31, 2023 as compared to the corresponding period of fiscal 2023.

Segment EBITDA at the News Media segment decreased by $11 million, or 14%, for the six months ended December 31, 2023 as compared to the corresponding period of fiscal 2023, which includes $4 million of one-time costs at News UK pertaining to the proposed combination of printing operations with DMG Media. The decrease is primarily due to the lower revenues discussed above, partially offset by lower production costs at News UK driven by lower print volume and newsprint prices and gross cost savings related to the announced 5% headcount reduction initiative.

News Corp Australia

Revenues were $236 million for the three months ended December 31, 2023, a decrease of $16 million, or 6%, compared to revenues of $252 million in the corresponding period of fiscal 2023. Advertising revenues decreased $17 million, or 15%, due to lower print and digital advertising revenues. Circulation and subscription revenues decreased $1 million due to the $1 million negative impact of foreign currency fluctuations, as print volume declines were offset by cover price increases and digital subscriber growth. The impact of foreign currency fluctuations of the U.S. dollar against local currencies resulted in a revenue decrease of $2 million for the three months ended December 31, 2023 as compared to the corresponding period of fiscal 2023.

Table of Contents

Revenues were $474 million for the six months ended December 31, 2023, a decrease of $33 million, or 7%, compared to revenues of $507 million in the corresponding period of fiscal 2023. Advertising revenues decreased $28 million, or 13%, due to lower print and digital advertising revenues and the $5 million, or 2%, negative impact of foreign currency fluctuations. Circulation and subscription revenues decreased $6 million, or 3%, due to the $6 million, or 3%, negative impact of foreign currency fluctuations, as print volume declines were offset by cover price increases and digital subscriber growth. The impact of foreign currency fluctuations of the U.S. dollar against local currencies resulted in a revenue decrease of $13 million, or 3%, for the six months ended December 31, 2023 as compared to the corresponding period of fiscal 2023.

News UK

Revenues were $239 million for the three months ended December 31, 2023, an increase of $1 million as compared to revenues of $238 million in the corresponding period of fiscal 2023. Circulation and subscription revenues increased $12 million, or 9%, due to the $8 million, or 6%, positive impact of foreign currency fluctuations, cover price increases and digital subscriber growth, partially offset by print volume declines. Advertising revenues decreased $7 million, or 8%, due to lower digital and print advertising revenues, partially offset by the $4 million, or 5%, positive impact of foreign currency fluctuations. The impact of foreign currency fluctuations of the U.S. dollar against local currencies resulted in a revenue increase of $13 million, or 5%, for the three months ended December 31, 2023 as compared to the corresponding period of fiscal 2023.

Revenues were $467 million for the six months ended December 31, 2023, an increase of $8 million, or 2%, as compared to revenues of $459 million in the corresponding period of fiscal 2023. Circulation and subscription revenues increased $22 million, or 8%, due to the $18 million, or 6%, positive impact of foreign currency fluctuations, cover price increases and digital subscriber growth, partially offset by print volume declines. Advertising revenues decreased $9 million, or 6%, primarily driven by lower digital and print advertising revenues, partially offset by the $7 million, or 5%, positive impact of foreign currency fluctuations. The impact of foreign currency fluctuations of the U.S. dollar against local currencies resulted in a revenue increase of $28 million, or 6%, for the six months ended December 31, 2023 as compared to the corresponding period of fiscal 2023.

LIQUIDITY AND CAPITAL RESOURCES

Current Financial Condition

The Company’s principal source of liquidity is internally generated funds and cash and cash equivalents on hand. As of December 31, 2023, the Company’s cash and cash equivalents were $1.7 billion. The Company also has available borrowing capacity under its revolving credit facility (the “Revolving Facility”) and certain other facilities, as described below, and expects to have access to the worldwide credit and capital markets, subject to market conditions, in order to issue additional debt if needed or desired. The Company currently expects these elements of liquidity will enable it to meet its liquidity needs for at least the next 12 months, including repayment of indebtedness. Although the Company believes that its cash on hand and future cash from operations, together with its access to the credit and capital markets, will provide adequate resources to fund its operating and financing needs for at least the next 12 months, its access to, and the availability of, financing on acceptable terms in the future will be affected by many factors, including: (i) the financial and operational performance of the Company and/or its operating subsidiaries, as applicable, (ii) the Company’s credit ratings and/or the credit rating of its operating subsidiaries, as applicable, (iii) the provisions of any relevant debt instruments, credit agreements, indentures and similar or associated documents, (iv) the liquidity of the overall credit and capital markets and (v) the state of the economy. There can be no assurances that the Company will continue to have access to the credit and capital markets on acceptable terms.

As of December 31, 2023, the Company’s consolidated assets included $838 million in cash and cash equivalents that were held by its foreign subsidiaries. Of this amount, $214 million is cash not readily accessible by the Company as it is held by REA Group, a majority owned but separately listed public company. REA Group must declare a dividend in order for the Company to have access to its share of REA Group’s cash balance.

The principal uses of cash that affect the Company’s liquidity position include the following: operational expenditures including employee costs, paper purchases and programming costs; capital expenditures; income tax payments; investments in associated entities; acquisitions; the repurchase of shares; dividends; and the repayment of debt and related interest. In addition to the acquisitions and dispositions disclosed elsewhere, the Company has evaluated, and expects to continue to evaluate, possible future acquisitions and dispositions of certain businesses. Such transactions may be material and may involve cash, the issuance of the Company’s securities or the assumption of indebtedness.

Table of Contents

Issuer Purchases of Equity Securities

The Company’s Board of Directors (the “Board of Directors”) has authorized a repurchase program to purchase up to $1 billion in the aggregate of the Company’s outstanding Class A Common Stock and Class B Common Stock (the “Repurchase Program”). The manner, timing, number and share price of any repurchases will be determined by the Company at its discretion and will depend upon such factors as the market price of the stock, general market conditions, applicable securities laws, alternative investment opportunities and other factors. The Repurchase Program has no time limit and may be modified, suspended or discontinued at any time. As of December 31, 2023, the remaining authorized amount under the Repurchase Program was approximately $522 million.

During the three and six months ended December 31, 2023, the Company repurchased and subsequently retired 0.8 million and 1.8 million shares, respectively, of Class A Common Stock for approximately $18 million and $38 million, respectively, and 0.4 million and 0.8 million shares, respectively, of Class B Common Stock for approximately $8 million and $17 million, respectively. During the three and six months ended December 31, 2022, the Company repurchased and subsequently retired 1.9 million and 6.9 million shares, respectively, of Class A Common Stock for approximately $31 million and $115 million, respectively, and 1.0 million and 3.5 million shares, respectively, of Class B Common Stock for approximately $16 million and $59 million, respectively.

Dividends

In August 2023, 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. The dividend was paid on October 11, 2023 to stockholders of record as of September 13, 2023. The timing, declaration, amount and payment of future dividends to stockholders, if any, is within the discretion of the Board of Directors. The Board of Directors’ decisions regarding the payment of future dividends will depend on many factors, including the Company’s financial condition, earnings, capital requirements and debt facility covenants, other contractual restrictions, as well as legal requirements, regulatory constraints, industry practice, market volatility and other factors that the Board of Directors deems relevant.

Sources and Uses of Cash—For the six months ended December 31, 2023 versus the six months ended December 31, 2022

Net cash provided by operating activities for the six months ended December 31, 2023 and 2022 was as follows (in millions):


	For the six months ended December 31,
	2023		2022
Net cash provided by operating activities	$	305	$	161

Net cash provided by operating activities increased by $144 million for the six months ended December 31, 2023 as compared to the six months ended December 31, 2022. The increase was primarily due to higher Total Segment EBITDA, lower working capital and lower tax payments, partially offset by higher restructuring payments.

Net cash used in investing activities for the six months ended December 31, 2023 and 2022 was as follows (in millions):


	For the six months ended December 31,
	2023		2022
Net cash used in investing activities	$	(278)	$	(337)

Net cash used in investing activities decreased by $59 million for the six months ended December 31, 2023, as compared to the six months ended December 31, 2022. During the six months ended December 31, 2023, the Company used $236 million of cash for capital expenditures, of which $82 million related to Foxtel, and $42 million for acquisitions and investments. During the six months ended December 31, 2022, the Company used $217 million of cash for capital expenditures, of which $84 million related to Foxtel, and $107 million for investments and acquisitions.

Table of Contents

Net cash used in financing activities for the six months ended December 31, 2023 and 2022 was as follows (in millions):


	For the six months ended December 31,
	2023		2022
Net cash used in financing activities	$	(144)	$	(312)

Net cash used in financing activities was $144 million for the six months ended December 31, 2023, as compared to $312 million for the six months ended December 31, 2022.

During the six months ended December 31, 2023, the Company had $1,044 million of borrowing repayments, primarily related to the refinancing of Foxtel and REA Groups’ debt portfolios, dividend payments of $85 million to News Corporation stockholders and REA Group minority stockholders and $56 million of stock repurchases of outstanding Class A and Class B Common Stock under the Repurchase Program. The net cash used in financing activities was partially offset by new borrowings of $1,049 million primarily related to the refinancings at Foxtel and REA Group and $53 million related to the net settlement of certain hedges which were terminated in connection with the refinancing at Foxtel.

During the six months ended December 31, 2022, the Company had $462 million of borrowing repayments, primarily related to Foxtel’s U.S. private placement senior unsecured notes that matured in July 2022, $178 million of stock repurchases of outstanding Class A and Class B Common Stock under the Repurchase Program and dividend payments of $89 million to News Corporation stockholders and REA Group minority stockholders. The net cash used in financing activities was partially offset by new borrowings of $407 million related to Foxtel.

Reconciliation of Free Cash Flow and Free Cash Flow Available to News Corporation

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 (used in) 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. Free cash flow and free cash flow available to News Corporation may not be comparable to similarly titled measures reported by other companies, since companies and investors may differ as to what items should be included in the calculation of free cash flow.

Neither free cash flow nor free cash flow available to News Corporation represents the total increase or decrease in the cash balance for the period and should be considered in addition to, not as a substitute for, 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.

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.

Table of Contents

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 six months ended December 31,
	2023		2022
	(in 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 in the six months ended December 31, 2023 was $69 million compared to $(56) million in the prior year. Free cash flow available to News Corporation in the six months ended December 31, 2023 was $(21) million compared to $(102) million in the prior year. Free cash flow and Free cash flow available to News Corporation improved primarily due to higher cash provided by operating activities, partially offset by higher capital expenditures, as discussed above.

Borrowings

As of December 31, 2023, the Company, certain subsidiaries of NXE Australia Pty Limited (the “Foxtel Group” and together with such subsidiaries, the “Foxtel Debt Group”) and REA Group and certain of its subsidiaries (REA Group and certain of its subsidiaries, the “REA Debt Group”) had total borrowings of $3.0 billion, including the current portion. Both the Foxtel Group and REA Group are consolidated but non wholly-owned subsidiaries of News Corp, and their indebtedness is only guaranteed by members of the Foxtel Debt Group and REA Debt Group, respectively, and is non-recourse to News Corp.

News Corp Borrowings

As of December 31, 2023, the Company had (i) borrowings of $1,974 million, consisting of its outstanding 2021 Senior Notes, 2022 Senior Notes and Term A Loans and (ii) $750 million of undrawn commitments available under the Revolving Facility.

Foxtel Group Borrowings

As of December 31, 2023, the Foxtel Debt Group had (i) borrowings of approximately $767 million, including the amounts outstanding under the 2024 Foxtel Credit Facility (described below), the 2017 Working Capital Facility and the Telstra Facility (described below) and (ii) total undrawn commitments of A$255 million available under the 2024 Foxtel Credit Facility and 2017 Working Capital Facility.

During the six months ended December 31, 2023, the Foxtel Group refinanced its A$610 million 2019 revolving credit facility, A$250 million term loan facility and tranche 3 of its 2012 U.S. private placement senior unsecured notes with the proceeds of a new A$1.2 billion syndicated credit facility (the “2024 Foxtel Credit Facility”). The 2024 Foxtel Credit Facility consists of three sub-facilities: (i) an A$817.5 million three year revolving credit facility (the “2024 Foxtel Credit Facility — tranche 1”), (ii) a US$48.7 million four year term loan facility (the “ 2024 Foxtel Credit Facility — tranche 2”) and (iii) an A$311.0 million four year term loan facility (the “2024 Foxtel Credit Facility — tranche 3”). In addition, the Foxtel Group amended its 2017 Working Capital Facility to extend the maturity to August 2026 and modify the pricing.

Depending on the Foxtel Group’s net leverage ratio, (i) borrowings under the 2024 Foxtel Credit Facility — tranche 1 and 2017 Working Capital Facility bear interest at a rate of the Australian BBSY plus a margin of between 2.35% and 3.60%; (ii) borrowings under the 2024 Foxtel Credit Facility — tranche 2 bear interest at a rate based on a Term SOFR formula, as set forth in the 2024 Foxtel Credit Agreement, plus a margin of between 2.50% and 3.75%; and (iii) borrowings under the 2024 Foxtel Credit Facility — tranche 3 bear interest at a rate of the Australian BBSY plus a margin of between 2.50% and 3.75%. All tranches carry a commitment fee of 45% of the applicable margin on any undrawn balance during the relevant availability period. Tranches 2 and 3 of the 2024 Foxtel Credit Facility amortize on a proportionate basis in an aggregate annual amount equal to A$35 million in each of the first two years following closing and A$40 million in each of the two years thereafter.

Table of Contents

The agreements governing the Foxtel Debt Group’s external borrowings contain customary affirmative and negative covenants and events of default, with customary exceptions, including specified financial and non-financial covenants calculated in accordance with Australian International Financial Reporting Standards. Subject to certain exceptions, these covenants restrict or prohibit members of the Foxtel Debt Group from, among other things, undertaking certain transactions, disposing of certain properties or assets (including subsidiary stock), merging or consolidating with any other person, making financial accommodation available, giving guarantees, entering into certain other financing arrangements, creating or permitting certain liens, engaging in transactions with affiliates, making repayments of certain other loans and undergoing fundamental business changes. In addition, the agreements require the Foxtel Debt Group to maintain a ratio of net debt to Earnings Before Interest, Tax, Depreciation and Amortization (“EBITDA”), as adjusted under the applicable agreements, of not more than 3.25 to 1.0. The agreements also require the Foxtel Debt Group to maintain a net interest coverage ratio of not less than 3.5 to 1.0. There are no assets pledged as collateral for any of the borrowings.

In addition to third-party indebtedness, the Foxtel Debt Group has related party indebtedness consisting of A$639 million of outstanding principal (excluding capitalized interest) of subordinated shareholder loans as of December 31, 2023. The shareholder loans bear interest at a variable rate of the Australian BBSY plus an applicable margin ranging from 6.30% to 7.75% and mature in December 2027. Amounts outstanding under the shareholder loans are permitted to be repaid if (i) no actual or potential event of default exists both before and immediately after repayment and (ii) the net debt to EBITDA ratio of the Foxtel Debt Group was on the most recent covenant calculation date, and would be immediately after the cash repayment, less than or equal to 2.25 to 1.0. In the three months ended December 31, 2023, the Foxtel Debt Group repaid A$61 million of outstanding principal of shareholder loans. Additionally, the Foxtel Debt Group has an A$170 million subordinated shareholder loan facility with Telstra which can be used to finance cable transmission costs due to Telstra. The Telstra Facility bears interest at a variable rate of the Australian BBSY plus an applicable margin of 7.75% and matures in December 2027. The Company excludes the utilization of the Telstra Facility from the Statements of Cash Flows because it is non-cash.

REA Group Borrowings

As of December 31, 2023, REA Group had (i) borrowings of approximately $271 million, consisting of amounts outstanding under the 2024 REA Credit Facility (described below) and 2024 Subsidiary Facility (described below) and (ii) A$285 million of undrawn commitments available under the 2024 REA Credit Facility and the 2024 Subsidiary Facility.

During the six months ended December 31, 2023, REA Group entered into a new unsecured syndicated credit facility (the “2024 REA Credit Facility”) which replaces the 2022 Credit Facility and consists of two sub-facilities: (i) a five-year A$400 million revolving loan facility (the “2024 REA Credit Facility—tranche 1”) which was used to refinance tranche 1 of the 2022 Credit Facility and (ii) an A$200 million revolving loan facility representing the continuation of tranche 2 of the 2022 Credit Facility (the “2024 REA Credit Facility—tranche 2”). REA Group may request increases in the amount of the 2024 REA Credit Facility up to a maximum amount of A$500 million, subject to the terms and limitations set forth in the syndicated facility agreement.

Borrowings under the 2024 REA Credit Facility — tranche 1 accrue interest at a rate of the Australian BBSY plus a margin of between 1.45% and 2.35%, depending on REA Group’s net leverage ratio. Borrowings under the 2024 REA Credit Facility — tranche 2 continue to accrue interest at a rate of the Australian BBSY plus a margin of between 1.15% and 2.25%, depending on REA Group’s net leverage ratio. Both tranches carry a commitment fee of 40% of the applicable margin on any undrawn balance.

The syndicated facility agreement governing the 2024 REA Credit Facility requires REA Group to maintain (i) a net leverage ratio of not more than 3.5 to 1.0 and (ii) an interest coverage ratio of not less than 3.0 to 1.0. The agreement also contains certain other customary affirmative and negative covenants and events of default. Subject to certain exceptions, these covenants restrict or prohibit REA Group and its subsidiaries from, among other things, incurring or guaranteeing debt, disposing of certain properties or assets, merging or consolidating with any other person, making financial accommodation available, entering into certain other financing arrangements, creating or permitting certain liens, engaging in non arms’ length transactions with affiliates, undergoing fundamental business changes and making restricted payments.

Table of Contents

During the six months ended December 31, 2023, REA Group also entered into an A$83 million unsecured bilateral revolving credit facility (the “2024 Subsidiary Facility”). Proceeds of the 2024 Subsidiary Facility will be used to refinance an existing facility at one of its subsidiaries and to fund its business of providing short-term financing to real estate agents and vendors. Borrowings under the 2024 Subsidiary Facility accrue interest at a rate of the Australian BBSY plus a margin of 1.40% and undrawn balances carry a commitment fee of 40% of the applicable margin. The facility agreement governing the 2024 Subsidiary Facility permits the lender to cancel its commitment and declare all outstanding amounts immediately due and payable after a consultation period in specified circumstances, including if certain key operating measures of its subsidiary fall below the budgeted amount for two consecutive quarters. The agreement also contains certain other customary affirmative and negative covenants and events of default that are similar to those governing the 2024 REA Credit Facility.

All of the Company’s borrowings contain customary representations, covenants and events of default. The Company was in compliance with all such covenants at December 31, 2023.

See Note 5—Borrowings in the accompanying Consolidated Financial Statements for further details regarding the Company’s outstanding debt, including additional information about interest rates, amortization (if any), maturities and covenants related to such debt arrangements.

Commitments

The Company has commitments under certain firm contractual arrangements to make future payments. These firm commitments secure the current and future rights to various assets and services to be used in the normal course of operations. As a result of entering into the 2024 Foxtel Credit Facility, the 2024 REA Credit Facility and the 2024 Subsidiary Facility during the six months ended December 31, 2023, the Company has presented its commitments associated with its borrowings and the related interest payments in the table below.


	As of December 31, 2023
	Payments Due by Period
	Total		Less than 1 year		1-3 years		3-5 years		More than 5 years
	(in millions)
Borrowings(a)	$	3,029	$	36	$	694	$	799	$	1,500
Interest payments on borrowings(b)	686		155		269		153		109

31.1

Chief Executive Officer Certification required by Rules 13a-14 and 15d-14 under the Securities Exchange Act of 1934, as amended.*

31.2

Chief Financial Officer Certification required by Rules 13a-14 and 15d-14 under the Securities Exchange Act of 1934, as amended.*

32.1

Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002.**

101

The following financial information from the Company’s Quarterly Report on Form 10-Q for the quarter ended December 31, 2023 formatted in Inline XBRL: (i) Consolidated Statements of Operations for the three and six months ended December 31, 2023 and 2022 (unaudited); (ii) Consolidated Statements of Comprehensive Income for the three and six months ended December 31, 2023 and 2022 (unaudited); (iii) Consolidated Balance Sheets as of December 31, 2023 (unaudited) and June 30, 2023 (audited); (iv) Consolidated Statements of Cash Flows for the six months ended December 31, 2023 and 2022 (unaudited); and (v) Notes to the Unaudited Consolidated Financial Statements.*

104

The cover page from News Corporation’s Quarterly Report on Form 10-Q for the quarter ended December 31, 2023, formatted in Inline XBRL (included as Exhibit 101).*

* Filed herewith.

** Furnished herewith

Table of Contents

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	NEWS CORPORATION (Registrant)

	By:	/s/ Susan Panuccio
		Susan Panuccio Chief Financial Officer

Date: February 8, 2024

NEWS CORP - Quarter Report: 2023 December (Form 10-Q)

Similar companies