NOTE 13. 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.

•

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, Harlequin 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.

•

Cable Network Programming—The Cable Network Programming segment consists of FOX SPORTS Australia, the leading sports programming provider in Australia, with seven high definition 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 Australian Rugby Union.

•

Digital Real Estate Services—The Digital Real Estate Services segment consists of the Company’s interests in REA Group Limited (“REA Group”) and Move. REA Group is 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 an Italian property site, casa.it, and other property sites and apps in Europe and Asia. The Company holds a 61.6% interest in REA Group.

Move, acquired in November 2014, primarily operates realtor.com^®, a leading consumer facing real estate website, and also offers a number of professional software and services products (including Top Producer^®, TigerLead^® and ListHub^TM), which provide real estate professionals with advertising systems, productivity and lead management tools and reporting. The Company owns an 80% interest in Move, with the remaining 20% being held by REA Group.

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

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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 combines 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.

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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.

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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 has determined its operating segments 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 (expense) benefit 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 three months ended December 31,						For the six months ended December 31,
	2014			2013			2014			2013
	(in millions)
Revenues:
News and Information Services	$	1,523		$	1,612		$	2,974		$	3,107
Book Publishing		469			391			875			719
Cable Network Programming		112			110			251			242
Digital Real Estate Services		154			103			266			193
Digital Education		22			22			64			49
Other		—			—			—			—

Total Revenues		2,280			2,238			4,430			4,310

Segment EBITDA:
News and Information Services	$	216		$	255		$	321		$	388
Book Publishing		77			68			132			111
Cable Network Programming		54			53			86			82
Digital Real Estate Services		57			55			114			99
Digital Education		(24	)		(44	)		(48	)		(95	)
Other		(52	)		(60	)		(107	)		(117	)

Total Segment EBITDA		328			327			498			468

Depreciation and amortization		(135	)		(138	)		(266	)		(279	)
Impairment and restructuring charges		(17	)		(36	)		(21	)		(63	)
Equity earnings of affiliates		16			17			41			30
Interest, net		13			16			30			33
Other, net		10			(231	)		58			(672	)

Income (loss) before income tax (expense) benefit		215			(45	)		340			(483	)
Income tax (expense) benefit		(52	)		211			(89	)		687

Net income		163			166			251			204
Less: Net income attributable to noncontrolling interests		(20	)		(15	)		(43	)		(26	)

Net income attributable to News Corporation stockholders	$	143		$	151		$	208		$	178


	As of December 31, 2014		As of June 30, 2014
	(in millions)
Total assets:
News and Information Services	$	7,001	$	7,379
Book Publishing		2,065		1,852
Cable Network Programming		1,212		1,427
Digital Real Estate Services		1,320		438
Digital Education		504		481
Other		1,402		2,303
Investments		2,466		2,609

Total assets	$	15,970	$	16,489


	As of December 31, 2014		As of June 30, 2014
	(in millions)
Goodwill and intangible assets, net:
News and Information Services	$	2,615	$	2,646
Book Publishing		906		619
Cable Network Programming		1,007		1,181
Digital Real Estate Services		1,027		95
Digital Education		371		378
Other		—		—

Total goodwill and intangible assets, net	$	5,926	$	4,919