Investments (Tables)

12 Months Ended

Jun. 30, 2014

Schedule of Earnings of Equity Affiliates

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

	For the fiscal years ended June 30,
	2014		2013			2012
	(in millions)
Foxtel(a)	$	90	$	66		$	31
Pay television and cable network programming equity affiliates(b)		—		51			83
Other equity affiliates		—		(17	)		(24	)
Total Equity earnings of affiliates	$	90	$	100		$	90

^(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 $62 million, $43 million and nil 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 fiscal years ended June 30, 2014, 2013 and 2012, 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 Statement of Operations for the fiscal year ended June 30, 2013. For the fiscal years ended June 30, 2013 and 2012, the Company received dividends from SKY Network Television Ltd. of $60 million and $64 million, respectively.

Schedule of Investments

The Company’s investments were comprised of the following:

	Ownership Percentage as of June 30, 2014			As of June 30,
				2014		2013
				(in millions)
Equity method investments:
Foxtel(a)		50	%	$	1,869	$	1,875
Other equity method investments		various			24		35
Loan receivable from Foxtel(b)		N/A			425		412
Available-for-sale securities(c)		various			151		6
Cost method investments(d)		various			140		171
Total Investments				$	2,609	$	2,499

^(a)  For the fiscal years ended June 30, 2014 and 2013, the Company received dividends from Foxtel of $151 million and $159 million, respectively.

The Company’s investment in Foxtel exceeds its equity in the underlying net assets by approximately $2.1 billion as of June 30, 2014. This amount represented the excess cost over the Company’s proportionate share of its investment’s underlying net assets. This has been allocated between finite-lived intangible assets, indefinite-lived intangible assets and goodwill. The finite-lived intangible assets of approximately $0.7 billion primarily represent subscriber relationships with a weighted remaining average useful life of 8 years.

^(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 ($425 million and $412 million as of June 30, 2014 and 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 originally owned approximately 5.6 million shares, 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 pre-tax 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 as a cost method investment. As a result of the offering, the Company’s remaining investment in Rubicon was designated as an available-for-sale security as of April 2014, and carried at fair value. 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)  Cost method investments primarily include the Company’s investment in SEEKAsia Limited (“SEEK Asia”) and certain investments in China. In February 2014, SEEK Asia, in which the Company owns a 12.1% interest, 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 a 12.1% investment in SEEK Asia following the transaction.

Schedule of Available-for-Sale Investments

The cost basis, unrealized gains, unrealized losses and fair market value of available-for-sale investments are set forth below:

	As of June 30,
	2014		2013
	(in millions)
Cost basis of available-for-sale investments	$	113	$	3
Accumulated gross unrealized gain		38		3
Accumulated gross unrealized loss		—		—
Fair value of available-for-sale investments	$	151	$	6
Net deferred tax liability	$	14	$	2

Schedule of Summarized Financial Information

Summarized financial information for the significant equity affiliates, including Foxtel, FOX SPORTS Australia for periods through November 2012 and SKY Network Television Ltd. for periods through March 2013, accounted for under the equity method was as follows:

	For the fiscal years ended June 30,
	2014		2013		2012
	(in millions)
Revenues	$	2,897	$	3,872	$	3,610
Operating income		554		675		616
Net income		304		357		352

	As of June 30,
	2014		2013
	(in millions)
Current assets	$	490	$	466
Non-current assets		2,805		2,752
Current liabilities		817		1,005
Non-current liabilities		2,887		2,583

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

	For the fiscal years ended June 30,
	2014		2013		2012
	(in millions)
Revenues	$	2,897	$	3,184	$	2,430
Operating income(a)		554		491		317
Net income		304		240		205

^(a)  Includes Depreciation and amortization of $349 million, $441 million and $327 million for the fiscal years ended June 30, 2014, 2013 and 2012, respectively. Operating income before depreciation and amortization was $903 million, $932 million and $644 million for the fiscal years ended June 30, 2014, 2013 and 2012, respectively.

FOX SPORTS Australia [Member]

Schedule of Earnings of Equity Affiliates

Summarized financial information for FOX SPORTS Australia for the period July 1, 2012 through the date of acquisition and for the fiscal year ended June 30, 2012 was as follows:

	For the period July 1 through November 19, 2012		For the fiscal year ended June 30, 2012
	(in millions)
Revenues	$	192	$	484
Operating income(a)		63		137
Net income		46		79

^(a)  Includes Depreciation and amortization of $4 million for the period July 1, 2012 through the date of acquisition and $9 million for the fiscal year ended June 30, 2012. Operating income before depreciation and amortization was $67 million for the period July 1, 2012 through the date of acquisition and $146 million for the fiscal year ended June 30, 2012.