NOTE 4. INVESTMENTS

The Company’s investments were comprised of the following:


	Ownership Percentage as of March 31, 2014		As of March 31, 2014		As of June 30, 2013
			(in millions)
Equity method investments:
Foxtel^(a)		50%	$	1,913	$	1,875
Other equity method investments		various		34		35
Loan receivable from Foxtel^(b)		N/A		417		412
China Broadband Capital Partners L.P. funds I and II		~20%		67		59
The Rubicon Project^(c)		19.3%		40		40
SEEKAsia Limited^(d)		12.1%		38		37
Other investments		various		42		41

Total Investments			$	2,551	$	2,499

^(a)	For the nine months ended March 31, 2014 and 2013, the Company received dividends from Foxtel of $46 million and $57 million, respectively.

^(b)

In May 2012, Foxtel purchased Austar United Communications Ltd. The transaction was funded by Foxtel bank debt and Foxtel’s shareholders made pro rata capital contributions in the form of subordinated shareholder notes based on their respective ownership interests. The Company’s share of the subordinated shareholder notes was approximately A$451 million ($417 million and $412 million as of March 31, 2014 and June 30, 2013, respectively). The subordinated shareholder note can be repaid beginning in July 2022 provided that Foxtel’s senior debt has been repaid. The subordinated shareholder note has a maturity date of July 15, 2027, with interest of 12% payable on June 30 each year and at maturity. Upon maturity, the principal advanced will be repayable.

^(c)

In April 2014, The Rubicon Project (“Rubicon”), in which the Company owned approximately 5.6 million shares as of March 31, 2014, completed an initial public offering of its common stock. The Company sold approximately 850 thousand shares as part of the public offering which resulted in a gain on sale of $6 million and reduced the Company’s ownership percentage to 13.7%. Prior to the public offering, the Company’s investment in Rubicon was recorded in the Balance Sheets at cost. As a result of the offering, the Company’s remaining investment in Rubicon will be designated as an available-for-sale security as of April 2014, and carried at fair value. Unrealized gains and losses from available-for-sale securities are reported as a component of accumulated other comprehensive income, net of tax, in stockholders’ equity. While the Rubicon investment is classified as an available-for-sale security, the Company is contractually restricted from selling these shares for at least six months from the date of the public offering.

^(d)

In February 2014, SEEKAsia Limited (“SEEK Asia”) agreed to purchase the online employment businesses of JobStreet Corporation Berhad (“JobStreet”), which will be combined with JobsDB, Inc., SEEK Asia’s existing online employment business. The transaction, which is subject to certain conditions, including regulatory approval and JobStreet shareholder approval, will be funded primarily through additional contributions by SEEK Asia shareholders. The Company’s share of the funding contribution is expected to be approximately $50 million and is subject to the closing of the JobStreet acquisition. The Company will continue to hold its 12.1% investment in SEEK Asia following the transaction.

Equity Earnings of Affiliates

The Company’s share of the earnings of its equity affiliates was as follows:


	For the three months ended March 31,				For the nine months ended March 31,
	2014		2013		2014		2013
	(in millions)
Foxtel^(a)	$	23	$	17	$	53	$	30
Pay television and cable network programming equity affiliates^(b)		—		10		—		52
Other equity affiliates, net		—		—		—		(1	)

Total Equity earnings of affiliates	$	23	$	27	$	53	$	81

^(a)

The Company owned 25% of Foxtel through November 2012. In November 2012, the Company increased its ownership in Foxtel to 50% as a result of the CMH acquisition. In accordance with ASC 350, the Company amortized $15 million and $46 million related to excess cost over the Company’s proportionate share of its investment’s underlying net assets allocated to finite-lived intangible assets during the three and nine months ended March 31, 2014, respectively, and $20 million and $26 million in the corresponding periods of fiscal 2013, respectively. Such amortization is reflected in Equity earnings of affiliates in the Statements of Operations.

^(b)

Includes equity earnings of FOX SPORTS Australia and SKY Network Television Ltd. The Company acquired the remaining interest in FOX SPORTS Australia in November 2012 as a result of the CMH acquisition. The results of FOX SPORTS Australia have been included within the Cable Network Programming segment in the Company’s consolidated results of operations since November 2012. In March 2013, the Company sold its 44% equity interest in SKY Network Television Ltd. for approximately $675 million and recorded a gain of approximately $321 million which was included in Other, net in the Statements of Operations for the three and nine months ended March 31, 2013. For the nine months ended March 31, 2013, the Company received dividends from SKY Network Television Ltd. of $60 million.

Summarized financial information for Foxtel, presented in accordance with U.S. GAAP, was as follows:


	For the nine months ended March 31,
	2014		2013
	(in millions)
Revenues	$	2,154	$	2,398
Operating income^(a)		392		332
Net income		198		135

^(a)	Includes Depreciation and amortization of $263 million and $343 million for the nine months ended March 31, 2014 and 2013, respectively. Operating income before depreciation and amortization was $655 million and $675 million for the nine months ended March 31, 2014 and 2013, respectively.

For the nine months ended March 31, 2014, Foxtel revenues, while higher in local currency as a result of growth in subscriber revenue, were down from the corresponding period in the prior year due to the adverse impact of foreign currency fluctuations. Operating income increased reflecting cost savings and reduced intangible asset amortization from the Austar acquisition as well as the absence of costs associated with the London Olympics, partially offset by the adverse impact of foreign currency fluctuations.