Segment Information

9 Months Ended

Mar. 31, 2019

NOTE 13. SEGMENT INFORMATION

The Company manages and reports its businesses in the following five segments:

•

News and Information Services

—The News and Information Services segment includes the Company’s global print, digital and broadcast radio media platforms. These product offerings include the global print and digital versions of

The Wall Street Journal

and Barron’s Group, which includes

Barron’s

and MarketWatch, the Company’s suite of professional information products, including Factiva, Dow Jones Risk & Compliance, Dow Jones Newswires and DJX, and its live journalism events. The Company also owns, among other publications,

The Australian

The Daily Telegraph

Herald Sun

The Courier Mail

and

The Advertiser

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, a leading provider of home-delivered shopper media, in-store marketing products and services and digital marketing solutions, including Checkout 51’s mobile application, as well as Unruly, a global video advertising marketplace, Wireless Group, operator of talkSPORT, the leading sports radio network in the U.K., and Storyful, a social media content agency.

•

Subscription Video Services

—The Company’s Subscription Video Services segment provides video sports, entertainment and news services to pay-TV subscribers and other commercial licensees, primarily via cable, satellite and Internet Protocol, or IP, distribution, and consists of (i) its 65% interest in new Foxtel and (ii) Australian News Channel Pty Ltd (“ANC”). The remaining 35% interest in new Foxtel is held by Telstra, an Australian Securities Exchange (“ASX”)-listed telecommunications company. New Foxtel is the largest pay-TV provider in Australia, with over 200 channels covering sports, general entertainment, movies, documentaries, music, children’s programming and news and broadcast rights to live sporting events in Australia including: National Rugby League, Australian Football League, Cricket Australia, the domestic football league, the Australian Rugby Union and various motorsports programming. New Foxtel also operates Kayo Sports, a sports-only streaming service.

ANC operates the SKY NEWS network, Australia’s 24-hour multi-channel, multi-platform news service. ANC channels are distributed throughout Australia and New Zealand and available on Foxtel and Sky Network Television NZ. ANC also owns and operates the international Australia Channel IPTV service and offers content across a variety of digital media platforms, including mobile, podcasts and social media websites.

•

Book Publishing

—The Book Publishing segment consists of HarperCollins, the second largest consumer book publisher in the world, with operations in 17 countries and particular strengths in general fiction, nonfiction, children’s and religious publishing. HarperCollins owns more than 120 branded publishing imprints, including Harper, William Morrow, HarperCollins Children’s Books, Avon, Harlequin and Christian publishers Zondervan and Thomas Nelson, and publishes works by well-known authors such as Harper Lee, Chip and Joanna Gaines, Rick Warren, Sarah Young and Agatha Christie and popular titles such as

The Hobbit

Goodnight Moon

To Kill a Mockingbird

Jesus Calling

and

Hillbilly Elegy

•

Digital Real Estate Services

—The Digital Real Estate Services segment consists of the Company’s 61.6% interest in REA Group and 80% interest in Move. The remaining 20% interest in Move is held by REA Group. REA Group is a market-leading digital media business specializing in property and is listed on the ASX (ASX: REA). REA Group advertises property and property-related services on its websites and mobile applications across Australia and Asia, including Australia’s leading residential and commercial property websites, realestate.com.au and realcommercial.com.au, and property portals in Asia. In addition, REA Group provides property-related data to the financial sector and financial services through an end-to-end digital property search and financing experience and a mortgage broking offering.

Move is a leading provider of online real estate services in the U.S. and primarily operates realtor.com

, a premier real estate information and services marketplace. Move offers real estate advertising solutions to agents and brokers, including its Connections

Plus and Advantage

Pro products as well as its Opcity performance-based product. Move also offers a number of professional software and services products, including Top Producer

, FiveStreet

and ListHub

•

Other

—The Other segment consists primarily of general corporate overhead expenses, the corporate Strategy Group and costs related to the U.K. Newspaper Matters. The Company’s Strategy Group identifies new products and services across its businesses to increase revenues and profitability and targets and assesses potential acquisitions, investments and dispositions.

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 losses of affiliates, interest (expense) income, net, other, net and income tax (expense) benefit. Segment EBITDA may not be comparable to similarly titled measures reported by other companies, since companies and investors may differ as to what items should be included in the calculation of Segment EBITDA.

Segment EBITDA is the primary measure used by the Company’s chief operating decision maker to evaluate the performance of and allocate resources within the Company’s businesses. Segment EBITDA provides management, investors and equity analysts with a measure to analyze the operating performance of each of the Company’s business segments and its enterprise value against historical data and competitors’ data, although historical results may not be indicative of future results (as operating performance is highly contingent on many factors, including customer tastes and preferences).

Segment information is summarized as follows:

	For the three months ended						For the nine months ended
	March 31,						March 31,
	2019			2018			2019			2018
	(in millions)
Revenues:
News and Information Services	$	1,224		$	1,286		$	3,729		$	3,825
Subscription Video Services		539			129			1,666			394
Book Publishing		421			398			1,335			1,268
Digital Real Estate Services		272			279			876			842
Other		1			1			2			2
Total revenues	$	2,457		$	2,093		$	7,608		$	6,331
Segment EBITDA:
News and Information Services	$	73		$	87		$	309		$	302
Subscription Video Services		98			16			295			76
Book Publishing		53			41			209			167
Digital Real Estate Services		74			88			300			302
Other		(51	)		(51	)		(138	)		(90	)
Depreciation and amortization		(168	)		(100	)		(494	)		(297	)
Impairment and restructuring charges		(34	)		(246	)		(71	)		(273	)
Equity losses of affiliates		(4	)		(974	)		(13	)		(1,002	)
Interest (expense) income, net		(14	)		2			(45	)		9
Other, net		3			30			30			9
Income (loss) before income tax expense		30			(1,107	)		382			(797	)
Income tax expense		(7	)		(3	)		(112	)		(292	)
Net income (loss)	$	23		$	(1,110	)	$	270		$	(1,089	)

	As of March 31, 2019		As of June 30, 2018
	(in millions)
Total assets:
News and Information Services	$	5,840	$	6,039
Subscription Video Services		4,495		4,738
Book Publishing		2,073		1,898
Digital Real Estate Services		2,209		2,171
Other (a)		1,094		1,107
Investments		347		393
Total assets	$	16,058	$	16,346

(a)	The Other segment primarily includes Cash and cash equivalents.

	As of March 31, 2019		As of June 30, 2018
	(in millions)
Goodwill and intangible assets, net:
News and Information Services	$	2,695	$	2,730
Subscription Video Services		2,662		2,853
Book Publishing		778		804
Digital Real Estate Services		1,602		1,502
Total Goodwill and intangible assets, net	$	7,737	$	7,889