Investments (Tables)

3 Months Ended

Sep. 30, 2016

Investments Schedule [Abstract]

Schedule of Investments

The Company’s investments were comprised of the following:

	Ownership Percentage as of September 30, 2016		As of September 30, 2016		As of June 30, 2016
			(in millions)
Equity method investments:
Foxtel(a)		50%	$	1,461	$	1,437
Other equity method investments		various		106		101
Loan receivable from Foxtel(b)		N/A		346		338
Available-for-sale securities(c)		various		139		189
Cost method investments(d)		various		217		205
Total Investments			$	2,269	$	2,270

^(a) The change in the Foxtel investment for the three months ended September 30, 2016 was primarily due to the impact of foreign currency fluctuations.

^(b) In May 2012, Foxtel purchased Austar United Communications Ltd. The transaction was funded by Foxtel bank debt and pro rata capital contributions made by Foxtel shareholders 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 ($346 million and $338 million as of September 30, 2016 and June 30, 2016, respectively). The subordinated shareholder notes can be repaid beginning in July 2022 provided that Foxtel’s senior debt has been repaid. The subordinated shareholder notes have a maturity date of July 15, 2027, with interest payable on June 30 each year and at maturity. On June 22, 2016, Foxtel and Foxtel’s shareholders agreed to modify the terms of the loan receivable to reduce the interest rate from 12% to 10.5%, to more closely align with current market rates. Upon maturity, the principal advanced will be repayable.

^(c) Available-for-sale securities primarily include the Company’s investments in APN and The Rubicon Project, Inc. During fiscal 2016, the Company participated in an entitlement offer to maintain its 14.99% interest in APN for $20 million. APN operates a portfolio of Australian radio and outdoor media assets.

^(d) Cost method investments primarily include the Company’s investment in SEEKAsia Limited and certain investments in China.

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 September 30, 2016			As of June 30, 2016
	(in millions)
Cost basis of available-for-sale investments	$	144		$	155
Accumulated gross unrealized gain		5			34
Accumulated gross unrealized loss		(10	)		—
Fair value of available-for-sale investments	$	139		$	189
Net deferred tax (asset) liability	$	(1	)	$	13

Schedule of (Losses) Earnings of Equity Affiliates

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

	For the three months ended September 30,
	2016			2015
	(in millions)
Foxtel(a)	$	(11	)	$	9
Other equity affiliates		(4	)		(1	)
Total Equity (losses) earnings of affiliates	$	(15	)	$	8

^(a) In accordance with ASC 350, the Company amortized $19 million and $12 million, respectively, 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 months ended September 30, 2016 and 2015. Such amortization is reflected in Equity (losses) earnings of affiliates in the Statements of Operations. The increase in amortization expense recognized by the Company in the current year period was offset by a corresponding decrease in amortization expense recognized by Foxtel as certain intangible assets were fully amortized in fiscal 2016.

Schedule of Summarized Financial Information

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

	For the three months ended September 30,
	2016		2015
	(in millions)
Revenues	$	618	$	587
Operating income(a)		91		85
Net income		16		42

^(a) Includes Depreciation and amortization of $52 million and $55 million for the three months ended September 30, 2016 and 2015, respectively. Operating income before depreciation and amortization was $143 million and $140 million for the three months ended September 30, 2016 and 2015, respectively.