NOTE 18. SEGMENT INFORMATION

In the fourth quarter of fiscal 2014, the Company changed the composition of its reporting segments to present the Digital Education business separately as its own segment. As a result of the change, the Company reports its business in the following six segments:

•

News and Information Services—The News and Information Services segment includes the global print and digital product offerings of The Wall Street Journal and Barron’s publications, Marketwatch.com, and the Company’s suite of professional information products, including Factiva, Dow Jones Risk & Compliance, Dow Jones Newswires, Dow Jones Private Markets and DJX.

The Company also owns, among other publications, The Australian, The Daily Telegraph, Herald Sun and The Courier Mail in Australia, The Times, The Sunday Times, The Sun and The Sun on Sunday in the U.K. and the New York Post in the U.S. This segment also includes News America Marketing (“NAM”), a leading provider of free-standing inserts, in-store marketing products and services and digital marketing solutions. NAM’s customers include many of the largest consumer packaged goods advertisers in the U.S. and Canada.

•

Cable Network Programming—The Cable Network Programming segment consists of FOX SPORTS Australia, the leading sports programming provider in Australia, with seven television channels distributed via cable, satellite and IP, several interactive viewing applications and broadcast rights to live sporting events in Australia including: National Rugby League, the domestic football league, English Premier League, international cricket and the Rugby Union. Prior to the November 2012 acquisition of the portion of FOX SPORTS Australia that it did not own, the Company accounted for its investment in FOX SPORTS Australia under the equity method of accounting. Following the acquisition, the Company owns 100% of FOX SPORTS Australia and its results are included within this segment.

•

Digital Real Estate Services—The Company owns 61.6% of REA Group Limited (“REA Group”), a publicly traded company listed on the ASX (ASX: REA) that is a leading digital advertising business specializing in real estate services. REA Group operates Australia’s largest residential property website, realestate.com.au, as well as Australia’s leading commercial property website, realcommercial.com.au. REA Group also operates a market-leading Italian property site, casa.it, and other property sites and apps in Europe and Asia.

•

Book Publishing—The Book Publishing segment consists of HarperCollins which is one of the largest English-language consumer publishers in the world, with particular strengths in general fiction, nonfiction, children’s and religious publishing, and an industry leader in digital publishing. HarperCollins includes over 60 branded publishing imprints, including Avon, Harper, HarperCollins Children’s Publishers, William Morrow and Christian publishers Zondervan and Thomas Nelson, and publishes works by well-known authors such as Mitch Albom, Veronica Roth, Rick Warren and Agatha Christie and popular titles such as The Hobbit, Goodnight Moon, To Kill a Mockingbird and the Divergent series.

•

Digital Education—The Company’s Digital Education segment consists of Amplify, which is dedicated to creating technology solutions that transform the way teachers teach and students learn in three areas:

•

Amplify Insight, Amplify’s data and assessment business, which formerly operated under the brand Wireless Generation, Inc., commenced operations in 2000 and was acquired in fiscal 2011. Amplify Insight provides powerful assessment products and services to support teachers and school districts, including student assessment tools and analytic technologies, intervention programs, enterprise education information systems, and professional development and consulting services.

•

Amplify Learning, Amplify’s curriculum business, is developing digital content for K-12 English Language Arts, Math and Science, including software that will combine interactive, game-like experiences, rich, immersive media and sophisticated analytics to make the classroom teaching and learning experience more engaging, rigorous, personalized and effective. Amplify Learning’s digital curriculum incorporates the new Common Core State Standards adopted by most states in the U.S. and is available for use on multiple platforms.

•

Amplify Access, Amplify’s platform business, is delivering a tablet-based distribution system to facilitate personalized instruction and enable anytime, anywhere learning. Amplify Access offers a bundle that includes a tablet designed for the K-12 market, instructional software and curated third-party content, as well as implementation support.

•

Other—The Other segment consists primarily of general corporate overhead expenses, the corporate Strategy and Creative Group, and costs related to the U.K. Newspaper Matters. The Company’s corporate Strategy and Creative Group was formed to identify new products and services across its businesses to increase revenues and profitability and to target and assess potential acquisitions and investments.

The Company’s operating segments have been determined in accordance with its internal management structure, which is organized based on operating activities and has aggregated its newspaper and information services business with its integrated marketing services business into one reportable segment due to their similarities. The Company evaluates performance based upon several factors, of which the primary financial measure is Segment EBITDA.

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 earnings of affiliates; interest, net; other, net; income tax benefit (expense) and net income attributable to noncontrolling interests. The Company believes that information about Segment EBITDA assists all users of its Financial Statements by allowing them to evaluate changes in the operating results of the Company’s portfolio of businesses separate from non-operational factors that affect net income, thus providing insight into both operations and the other factors that affect reported results.

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.

Management believes that Segment EBITDA is an appropriate measure for evaluating the operating performance of the Company’s business. Segment EBITDA provides management, investors and equity analysts with a measure to analyze operating performance of the Company’s business and its enterprise value against historical data and competitors’ data, although historical results, including Segment EBITDA, may not be indicative of future results (as operating performance is highly contingent on many factors, including customer tastes and preferences). The following table reconciles Total Segment EBITDA to Net income attributable to News Corporation stockholders.


	For the fiscal years ended June 30,
	2014			2013			2012
	(in millions)
Revenues:
News and Information Services	$	6,153		$	6,731		$	7,058
Cable Network Programming		491			324			—
Digital Real Estate Services		408			345			286
Book Publishing		1,434			1,369			1,189
Digital Education		88			102			84
Other		—			20			37

Total Revenues		8,574			8,891			8,654

Segment EBITDA:
News and Information Services	$	665		$	795		$	939
Cable Network Programming		128			63			—
Digital Real Estate Services		214			168			129
Book Publishing		197			142			86
Digital Education		(193	)		(141	)		(50	)
Other		(241	)		(339	)		(322	)

Total Segment EBITDA		770			688			782

Depreciation and amortization		(578	)		(548	)		(483	)
Impairment and restructuring charges		(94	)		(1,737	)		(2,763	)
Equity earnings of affiliates		90			100			90
Interest, net		68			77			56
Other, net		(653	)		1,593			(59	)

(Loss) income before income tax benefit		(397	)		173			(2,377	)
Income tax benefit		691			374			337

Net income (loss)		294			547			(2,040	)
Less: Net income attributable to noncontrolling interests		(55	)		(41	)		(35	)

Net income (loss) attributable to News Corporation	$	239		$	506		$	(2,075	)


	For the fiscal years ended June 30,
	2014		2013		2012
	(in millions)
Depreciation and amortization:
News and Information Services	$	458	$	441	$	416
Cable Network Programming		36		25		—
Digital Real Estate Services		20		20		16
Book Publishing		36		34		27
Digital Education		26		23		16
Other		2		5		8

Total Depreciation and amortization	$	578	$	548	$	483


	For the fiscal years ended June 30,
	2014		2013		2012
	(in millions)
Capital expenditures:
News and Information Services	$	268	$	250	$	301
Cable Network Programming		7		14		—
Digital Real Estate Services		24		22		21
Book Publishing		52		10		13
Digital Education		21		21		23
Other		7		15		17

Total Capital expenditures	$	379	$	332	$	375


	As of June 30,
	2014		2013
	(in millions)
Total assets:
News and Information Services	$	7,379	$	7,562
Cable Network Programming		1,427		1,414
Digital Real Estate Services		438		393
Book Publishing		1,852		1,355
Digital Education		481		454
Other		2,303		1,966
Investments		2,609		2,499

Total assets	$	16,489	$	15,643


	As of June 30,
	2014		2013
	(in millions)
Goodwill and intangible assets, net:
News and Information Services	$	2,646	$	2,669
Cable Network Programming		1,181		1,170
Digital Real Estate Services		95		77
Book Publishing		619		605
Digital Education		378		390
Other		—		—

Total goodwill and intangible assets, net	$	4,919	$	4,911

Geographic Segments


	For the fiscal years ended June 30,
	2014		2013		2012
	(in millions)
Revenues:^(a)
U.S. and Canada^(b)	$	3,719	$	3,862	$	3,727
Europe^(c)		2,045		2,048		1,960
Australasia and Other^(d)		2,810		2,981		2,967

Total revenues	$	8,574	$	8,891	$	8,654

^(a)	Revenues are attributed to region based on location of customer.

^(b)	Revenues include approximately $3.5 billion for fiscal 2014, $3.7 billion for fiscal 2013 and $3.6 billion for fiscal 2012 from customers in the U.S.

^(c)	Revenues include approximately $1.8 billion for each of the fiscal years 2014 and 2013, and $1.7 billion for fiscal 2012 from customers in the U.K.

^(d)	Revenues include approximately $2.6 billion for fiscal 2014, $2.8 billion in both fiscal 2013 and 2012 from customers in Australia.


	As of June 30,
	2014		2013
	(in millions)
Long-lived assets:^(a)
U.S. and Canada	$	1,094	$	1,156
Europe		1,318		1,163
Australasia and Other		1,133		1,132

Total long-lived assets	$	3,545	$	3,451

^(a)	Reflects total assets less current assets, goodwill, intangible assets, investments and non-current deferred tax assets.

There is no material reliance on any single customer. Revenues are attributed to countries based on location of customers.

Australasia comprises Australia, Asia, Papua New Guinea and New Zealand.