This document, including the following discussion and analysis, contains
statements that constitute "forward-looking statements" within the meaning of
Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and Section 27A of the Securities Act of 1933, as amended. All statements
that are not statements of historical fact are forward-looking statements. The
words "expect," "estimate," "anticipate," "predict," "believe" and similar
expressions and variations thereof are intended to identify forward-looking
statements. These statements appear in a number of places in this discussion and
analysis and include statements regarding the intent, belief or current
expectations of the Company, its directors or its officers with respect to,
among other things, trends affecting the Company's financial condition or
results of operations, including expected impacts from the ongoing novel
coronavirus ("COVID-19") pandemic and related public health measures, the
Company's strategy and strategic initiatives and the outcome of contingencies
such as litigation and investigations. Readers are cautioned that any
forward-looking statements are not guarantees of future performance and involve
risks and uncertainties, including those related to COVID-19. More information
regarding these risks and uncertainties (many of which may be amplified by
COVID-19) and other important factors that could cause actual results to differ
materially from those in the forward-looking statements is set forth under the
heading "Risk Factors" in Part I, Item 1A. in News Corporation's Annual Report
on Form 10-K for the fiscal year ended June 30, 2020, as filed with the
Securities and Exchange Commission (the "SEC") on August 11, 2020 (the "2020
Form 10-K"), and as may be updated in this and other subsequent Quarterly
Reports on Form 10-Q. The Company does not ordinarily make projections of its
future operating results and undertakes no obligation (and expressly disclaims
any obligation) to publicly update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise, except as
required by law. Readers should carefully review this document and the other
documents filed by the Company with the SEC. This section should be read
together with the unaudited consolidated financial statements of News
Corporation and related notes set forth elsewhere herein and the audited
consolidated financial statements of News Corporation and related notes set
forth in the 2020 Form 10-K.
INTRODUCTION
News Corporation (together with its subsidiaries, "News Corporation," "News
Corp," the "Company," "we," or "us") is a global diversified media and
information services company comprised of businesses across a range of media,
including: digital real estate services, subscription video services in
Australia, news and information services and book publishing.
During the fourth quarter of fiscal 2020, in connection with the Company's sale
of its News America Marketing reporting unit and its annual review of its
reportable segments, the Company determined to disaggregate its Dow Jones
operating segment as a separate reportable segment in accordance with Accounting
Standard Codification ("ASC") 280, "Segment Reporting." Previously, the
financial information for this operating segment was aggregated with the
businesses within the News Media operating segment and, together, formed the
News and Information Services reportable segment. Following the sale of its News
America Marketing business in the fourth quarter of fiscal 2020 and in
conjunction with the Company's annual budgeting process, the Company determined
that aggregation was no longer appropriate as certain of the remaining
businesses no longer shared similar economic characteristics. As a result, the
Company has revised its historical disclosures for the prior period to reflect
the new Dow Jones and News Media reportable segments.
Certain reclassifications have been made to the prior period consolidated
financial statements to conform to the current year presentation. Specifically,
the Company reclassified certain costs at the Other segment that were previously
included within Selling, general and administrative to Operating expenses. For
the three months ended September 30, 2019, these reclassifications increased
Operating expenses by $1 million.
The unaudited consolidated financial statements are referred to herein as the
"Consolidated Financial Statements." The consolidated statements of operations
are referred to herein as the "Statements of Operations." The consolidated
balance sheets are referred to herein as the "Balance Sheets." The consolidated
statements of cash flows are referred to herein as the "Statements of Cash
Flows." The Consolidated Financial Statements have been prepared in accordance
with generally accepted accounting principles in the United States of America
("GAAP").
Management's discussion and analysis of financial condition and results of
operations is intended to help provide an understanding of the Company's
financial condition, changes in financial condition and results of operations.
This discussion is organized as follows:
•Overview of the Company's Businesses-This section provides a general
description of the Company's businesses, as well as developments that occurred
to date during fiscal 2021 that the Company believes are important in
understanding its results of operations and financial condition or to disclose
known trends.
                                       24
--------------------------------------------------------------------------------

  Table of Contents
•Results of Operations-This section provides an analysis of the Company's
results of operations for the three months ended September 30, 2020 and 2019.
This analysis is presented on both a consolidated basis and a segment basis.
Supplemental revenue information is also included for reporting units within
certain segments and is presented on a gross basis, before eliminations in
consolidation. In addition, a brief description is provided of significant
transactions and events that impact the comparability of the results being
analyzed.
•Liquidity and Capital Resources-This section provides an analysis of the
Company's cash flows for the three months ended September 30, 2020 and 2019, as
well as a discussion of the Company's financial arrangements and outstanding
commitments, both firm and contingent, that existed as of September 30, 2020.
OVERVIEW OF THE COMPANY'S BUSINESSES
The Company manages and reports its businesses in the following six segments:
•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 Australian Securities Exchange ("ASX") (ASX: REA). REA Group advertises
property and property-related services on its websites and mobile apps across
Australia and Asia, including Australia's leading residential, commercial and
share property websites, realestate.com.au, realcommercial.com.au and
Flatmates.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 digital 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 ConnectionsSM Plus and AdvantageSM Pro products as well
as its referral-based services. Move also offers a number of professional
software and services products, including Top Producer® and ListHub™.
•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
distribution, and consists of (i) the Company's 65% interest in Foxtel (with the
remaining 35% interest in Foxtel held by Telstra, an ASX-listed
telecommunications company) and (ii) Australian News Channel ("ANC"). Foxtel is
the largest pay-TV provider in Australia, with nearly 200 channels covering
sports, general entertainment, movies, documentaries, music, children's
programming and news. Foxtel offers the leading sports programming content in
Australia, with broadcast rights to live sporting events including: National
Rugby League, Australian Football League, Cricket Australia, the domestic
football league, the Australian Rugby Union and various motorsports programming.
Foxtel also operates Foxtel Now, an over-the-top, or OTT, service that provides
access across Foxtel's live and on-demand content, Kayo, its sports OTT service,
and Binge, its recently launched on-demand entertainment OTT 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 web, mobile and
third party providers.
•Dow Jones-The Dow Jones segment consists of Dow Jones, a global provider of
news and business information, which distributes its content and data through a
variety of media channels including newspapers, newswires, websites,
applications, or apps, for mobile devices, tablets and e-book readers,
newsletters, magazines, proprietary databases, live journalism, video and
podcasts. Dow Jones's products, which target individual consumer and enterprise
customers, include The Wall Street Journal, Factiva, Dow Jones Risk &
Compliance, Dow Jones Newswires, Barron's and MarketWatch.
•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, David Walliams, Angie Thomas, Sarah Young and Agatha Christie and
popular titles such as The Hobbit, Goodnight Moon, To Kill a Mockingbird, Jesus
Calling and The Hate U Give.
                                       25
--------------------------------------------------------------------------------

  Table of Contents
•News Media-The News Media segment consists primarily of News Corp Australia,
News UK and the New York Post and includes, among other publications, The
Australian, The Daily Telegraph, Herald Sun, The Courier Mail and The Advertiser
in Australia and The Times, The Sunday Times, The Sun and The Sun on Sunday in
the U.K. This segment also includes Wireless Group, operator of talkSPORT, the
leading sports radio network in the U.K., and Storyful, a social media content
agency. The segment included News America Marketing until the completion of the
sale of the business on May 5, 2020.
•Other-The Other segment consists primarily of general corporate overhead
expenses, the corporate Strategy Group, costs related to the U.K. Newspaper
Matters (as defined in Note 9-Commitments and Contingencies to the Consolidated
Financial Statements) and transformation costs associated with the Company's
global shared services program.
Other Business Developments
COVID-19 Impact
The impact of COVID-19 and measures to prevent its spread have continued to
create significant economic volatility, uncertainty and disruption and have
affected the Company's businesses in a number of ways. During the three months
ended September 30, 2020 and through the date of this filing, the Company
observed the following effects on its businesses:
The real estate markets in Australia, Asia and the U.S. have been, and may
continue to be, negatively impacted as a result of social distancing measures,
business closures and economic uncertainty resulting from COVID-19, which has
negatively impacted the Digital Real Estate Services segment. While real estate
listings in Australia continued to be negatively impacted by government
restrictions during the quarter, primarily in Melbourne, the overall decline in
national new listings eased relative to last quarter and traffic to
realestate.com.au remained strong. In October, national residential listings in
Australia were down 1% compared to the prior year with improvement in both the
Sydney and Melbourne markets. In the United States, the Company has seen
stronger consumer traffic and higher leads in the quarter at Move driven by the
easing of government imposed restrictions and increased buyer demand.
At its news and information services businesses, COVID-19 continued to
exacerbate print advertising market weakness and negatively impact print volumes
due to increased economic uncertainty and lower demand for single-copy and
amenity newspapers driven by decreased foot traffic resulting from remote
working, social distancing measures and other government restrictions. However,
the Company has seen increases in digital paid subscribers as well as digital
audience gains at online versions of many of its news properties.
Sports programming rights costs at the Subscription Video Services segment were
negatively impacted by the deferral of costs from fiscal 2020 into fiscal 2021
due to the postponement of sporting events. The Company estimates that
approximately $36 million of additional sports programming rights and production
costs were recognized in the first quarter of fiscal 2021 due to such deferrals.
In addition, the ongoing disruption in the operations of pubs and clubs and
lower occupancy at hotels throughout Australia have continued to adversely
impact commercial subscription revenues; however the Company has seen the
gradual recovery of commercial subscribers which remains dependent on the easing
of government restrictions and social distancing measures.
The ultimate impact of COVID-19, including the extent of adverse impacts on the
Company's business, results of operations, cash flows and financial condition,
will depend on, among other things, the severity, duration, spread and any
reoccurrence of COVID-19, the impact of governmental actions and business and
consumer behavior in response to COVID-19, the effectiveness of actions taken to
contain or mitigate the outbreak and prevent or limit any reoccurrence, the
resulting global economic conditions and how quickly and to what extent normal
economic and operating conditions can resume, all of which are highly uncertain
and cannot be predicted. For additional information regarding risks related to
COVID-19, please see "The ongoing novel coronavirus (COVID-19) pandemic and
other similar epidemics, pandemics or widespread health crises could have a
material adverse effect on the Company's business, results of operations, cash
flows and financial position." in Part I, Item 1A. of the 2020 Form 10-K.
Regional and community newspapers in Australia
During the fourth quarter of fiscal 2020, the Company decommissioned the print
operations for its regional and community newspapers in Australia. These
initiatives will result in a revenue decrease at News Corp Australia of
approximately $111 million and have an immaterial impact on Segment EBITDA
during fiscal 2021.
                                       26
--------------------------------------------------------------------------------

  Table of Contents
Elara
In October 2020, REA Group entered into a binding agreement to increase its
ownership interest in Elara Technologies Pte. Ltd. ("Elara"). REA Group
currently holds a 13.5% interest and on completion, is expected to have a
shareholding of between 47.2% and 61.1% and hold five of nine seats on Elara's
Board of Directors. Upon completion of the transaction, REA Group will
consolidate Elara's financial results. The total consideration for the
transaction at the REA Group level is expected to be between $50 million to $70
million, with $34.5 million to be paid in cash and the remainder in newly-issued
REA Group shares. In connection with the transaction, News Corp will also
increase its interest in Elara to 38.9% for a cash payment of $34.5 million. On
a consolidated basis, News Corp is expected to hold an 86.1% to 100% combined
interest in Elara upon completion. The transaction, which remains subject to
confirmatory due diligence and the renegotiation of key management employment
contracts, is anticipated to be completed in the second quarter of fiscal 2021.
RESULTS OF OPERATIONS
Results of Operations-For the three months ended September 30, 2020 versus the
three months ended September 30, 2019
The following table sets forth the Company's operating results for the three
months ended September 30, 2020 as compared to the three months ended
September 30, 2019.
                                                                  For the three months ended
                                                                        September 30,
                                                                                       2020             2019            Change            % Change
(in millions, except %)                                                                                    Better/(Worse)
Revenues:
Circulation and subscription                                                        $ 1,002          $    995          $    7                     1  %
Advertising                                                                             332               608            (276)                  (45) %
Consumer                                                                                441               387              54                    14  %
Real estate                                                                             235               218              17                     8  %
Other                                                                                   107               132             (25)                  (19) %
Total Revenues                                                                        2,117             2,340            (223)                  (10) %
Operating expenses                                                                   (1,164)           (1,338)            174                    13  %
Selling, general and administrative                                                    (685)             (781)             96                    12  %
Depreciation and amortization                                                          (164)             (162)             (2)                   (1) %
Impairment and restructuring charges                                                    (40)             (297)            257                    87  %
Equity losses of affiliates                                                              (1)               (2)              1                    50  %
Interest (expense) income, net                                                           (8)                4             (12)                      **
Other, net                                                                               17                 4              13                       **
Income (loss) before income tax (expense) benefit                                        72              (232)            304                       **
Income tax (expense) benefit                                                            (25)               21             (46)                      **
Net income (loss)                                                                        47              (211)            258                       **
Less: Net income attributable to noncontrolling interests                               (13)              (16)              3                    19  %
Net income (loss) attributable to News Corporation
stockholders                                                                        $    34          $   (227)         $  261                       **


** not meaningful
Revenues- Revenues decreased $223 million, or 10%, for the three months ended
September 30, 2020 as compared to the corresponding period of fiscal 2020,
primarily driven by the $200 million impact from the sale of News America
Marketing in the fourth quarter of fiscal 2020 and lower print advertising
revenue in the News Media segment. The impact of foreign currency fluctuations
of the U.S. dollar against local currencies resulted in a revenue increase of
$50 million, or 2%, for the three months ended September 30, 2020 as compared to
the corresponding period of fiscal 2020.
The Company calculates the impact of foreign currency fluctuations for
businesses reporting in currencies other than the U.S. dollar by multiplying the
results for each quarter in the current period by the difference between the
average exchange rate for that quarter and the average exchange rate in effect
during the corresponding quarter of the prior year and totaling the impact for
all quarters in the current period.
Operating expenses- Operating expenses decreased $174 million, or 13%, for the
three months ended September 30, 2020 as compared to the corresponding period of
fiscal 2020, primarily driven by the sale of News America Marketing in the
fourth quarter of fiscal 2020 as well as lower costs relating to the closure or
transition to digital of certain regional and community
                                       27
--------------------------------------------------------------------------------

  Table of Contents
newspapers in Australia. The impact of foreign currency fluctuations of the U.S.
dollar against local currencies resulted in an Operating expense increase of
$26 million, or 2%, for the three months ended September 30, 2020 as compared to
the corresponding period of fiscal 2020.
Selling, general and administrative-Selling, general and administrative
decreased $96 million, or 12%, for the three months ended September 30, 2020 as
compared to the corresponding period of fiscal 2020, primarily driven by cost
savings initiatives, the sale of News America Marketing in the fourth quarter of
fiscal 2020 and the impact from the sale of Unruly in the third quarter of
fiscal 2020. The impact of foreign currency fluctuations of the U.S. dollar
against local currencies resulted in a Selling, general and administrative
increase of $16 million, or 2%, for the three months ended September 30, 2020 as
compared to the corresponding period of fiscal 2020.
Depreciation and amortization- Depreciation and amortization expense increased
$2 million, or 1%, for the three months ended September 30, 2020 as compared to
the corresponding period of fiscal 2020, primarily due to the impact of foreign
currency fluctuations of the U.S. dollar against local currencies, which
resulted in a depreciation and amortization expense increase of $4 million, or
2%.
Impairment and restructuring charges-During the three months ended September 30,
2019, the Company recognized non-cash impairment charges of $273 million
primarily related to the impairment of goodwill and indefinite-lived intangible
assets at the News America Marketing reporting unit.
During the three months ended September 30, 2020 and 2019, the Company recorded
restructuring charges of $40 million and $24 million, respectively. See Note
3-Restructuring Programs in the accompanying Consolidated Financial Statements.
Equity losses of affiliates- Equity losses of affiliates decreased by $1 million
for the three months ended September 30, 2020 as compared to the corresponding
period of fiscal 2020. See Note 4-Investments in the accompanying Consolidated
Financial Statements.
Interest (expense) income, net- Interest expense, net was $8 million for the
three months ended September 30, 2020 as compared to interest income, net of $4
million in the corresponding period of fiscal 2020, primarily due to the absence
of the impact from the settlement of cash flow hedges related to debt maturities
in the first quarter of fiscal 2020.
Other, net- Other, net increased by $13 million for the three months ended
September 30, 2020 as compared to the corresponding period of fiscal 2020. See
Note 12-Additional Financial Information in the accompanying Consolidated
Financial Statements.
Income tax (expense) benefit-For the three months ended September 30, 2020, the
Company recorded income tax expense of $25 million on pre-tax income of $72
million, resulting in an effective tax rate that was higher than the U.S.
statutory tax rate. The higher tax rate was primarily driven by the Company's
jurisdictional income (loss) mix which includes the impact of foreign operations
which are subject to higher taxes.
For the three months ended September 30, 2019, the Company recorded an income
tax benefit of $21 million on a pre-tax loss of $232 million, resulting in an
effective tax rate that was lower than the U.S. statutory tax rate. The lower
tax rate was primarily due to the lower tax benefit recorded on the impairment
of News America Marketing's goodwill and indefinite-lived intangible assets and
by valuation allowances being recorded against tax benefits in certain foreign
jurisdictions with operating losses.
Management assesses available evidence to determine whether sufficient future
taxable income will be generated to permit the use of existing deferred tax
assets. Based on management's assessment of available evidence, it has been
determined that it is more likely than not that deferred tax assets in U.S.
federal, state and foreign jurisdictions may not be realized and therefore, a
valuation allowance has been established against those tax assets.
The changing and volatile macro-economic conditions connected with COVID-19 may
cause fluctuations in forecasted earnings before income taxes. As such, the
Company's effective tax rate could be subject to volatility as forecasted
earnings before income taxes are impacted by events which are highly uncertain
and cannot be predicted.
Net income (loss)-Net income was $47 million for the three months ended
September 30, 2020 as compared to a net loss of $211 million in the
corresponding period of fiscal 2020, an improvement of $258 million, primarily
driven by the decrease in non-cash impairment charges discussed above.
                                       28
--------------------------------------------------------------------------------

  Table of Contents
Net income attributable to noncontrolling interests-Net income attributable to
noncontrolling interests decreased by $3 million, or 19%, for the three months
ended September 30, 2020 as compared to the corresponding period of fiscal 2020.
Segment Analysis
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).
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. The Company believes that the presentation of Total Segment EBITDA
provides useful information regarding the Company's operations and other factors
that affect the Company's reported results. Specifically, the Company believes
that by excluding certain one-time or non-cash items such as impairment and
restructuring charges and depreciation and amortization, as well as potential
distortions between periods caused by factors such as financing and capital
structures and changes in tax positions or regimes, the Company provides users
of its consolidated financial statements with insight into both its core
operations as well as the factors that affect reported results between periods
but which the Company believes are not representative of its core business. As a
result, users of the Company's consolidated financial statements are better able
to evaluate changes in the core operating results of the Company across
different periods.
The following table reconciles Net income (loss) to Total Segment EBITDA for the
three months ended September 30, 2020 and 2019:
                                                  For the three months ended
                                                        September 30,
                                                                          2020        2019
(in millions)
Net income (loss)                                                        $  47      $ (211)
Add:
Income tax expense (benefit)                                                25         (21)
Other, net                                                                 (17)         (4)
Interest expense (income), net                                               8          (4)
Equity losses of affiliates                                                  1           2
Impairment and restructuring charges                                        40         297
Depreciation and amortization                                              164         162
Total Segment EBITDA                                                     $ 268      $  221


                                       29

--------------------------------------------------------------------------------

Table of Contents The following table sets forth the Company's Revenues and Segment EBITDA by segment for the three months ended September 30, 2020 and 2019:


                                                              For the three months ended September 30,
                                                             2020                                   2019
                                                                      Segment                               Segment
(in millions)                                    Revenues              EBITDA            Revenues            EBITDA
Digital Real Estate Services                  $        290          $     119          $     272          $      82
Subscription Video Services                            496                 78                514                 81
Dow Jones                                              386                 72                382                 49
Book Publishing                                        458                 71                405                 49
News Media                                             487                (22)               767                  7
Other                                                    -                (50)                 -                (47)
Total                                         $      2,117          $     268          $   2,340          $     221

Digital Real Estate Services (14% and 12% of the Company's consolidated revenues in the three months ended September 30, 2020 and 2019, respectively)


                                                                 For the three months ended
                                                                       September 30,
                                                                                       2020            2019             Change            % Change
(in millions, except %)                                                                                    Better/(Worse)
Revenues:
Circulation and subscription                                                         $   8          $   10            $    (2)                  (20) %
Advertising                                                                             28              27                  1                     4  %
Real estate                                                                            235             218                 17                     8  %
Other                                                                                   19              17                  2                    12  %
Total Revenues                                                                         290             272                 18                     7  %
Operating expenses                                                                     (43)            (45)                 2                     4  %
Selling, general and administrative                                                   (128)           (145)                17                    12  %
Segment EBITDA                                                                       $ 119          $   82            $    37                    45  %


For the three months ended September 30, 2020, revenues at the Digital Real
Estate Services segment increased $18 million, or 7%, as compared to the
corresponding period of fiscal 2020. Revenues at Move increased $15 million, or
12%, to $138 million for the three months ended September 30, 2020 from $123
million in the corresponding period of fiscal 2020, primarily driven by higher
real estate revenues from the referral model, which benefited from higher lead
volumes and higher average home values. Revenues from the referral model
represented approximately 30% of total Move revenues. At REA Group, revenues
increased $3 million, or 2%, to $152 million for the three months ended
September 30, 2020 from $149 million in the corresponding period of fiscal 2020,
primarily due to the $6 million positive impact of foreign currency
fluctuations.
For the three months ended September 30, 2020, Segment EBITDA at the Digital
Real Estate Services segment increased $37 million, or 45%, as compared to the
corresponding period of fiscal 2020. The increase in Segment EBITDA was
primarily driven by the $28 million higher contribution from Move resulting from
the higher revenues discussed above and the impact of cost savings initiatives
implemented in response to COVID-19 and the deferral of marketing costs at Move
and REA Group.
                                       30
--------------------------------------------------------------------------------

  Table of Contents
Subscription Video Services (23% and 22% of the Company's consolidated revenues
in the three months ended September 30, 2020 and 2019, respectively)
                                                                 For the three months ended
                                                                       September 30,
                                                                                       2020            2019            Change            % Change
(in millions, except %)                                                                                   Better/(Worse)
Revenues:
Circulation and subscription                                                         $ 437          $    451          $  (14)                   (3) %
Advertising                                                                             50                51              (1)                   (2) %
Other                                                                                    9                12              (3)                  (25) %
Total Revenues                                                                         496               514             (18)                   (4) %
Operating expenses                                                                    (333)             (344)             11                     3  %
Selling, general and administrative                                                    (85)              (89)              4                     4  %
Segment EBITDA                                                                       $  78          $     81          $   (3)                   (4) %


For the three months ended September 30, 2020, revenues at the Subscription
Video Services segment decreased $18 million, or 4%, as compared to the
corresponding period of fiscal 2020. The revenue decrease was primarily due to
lower subscription revenues resulting from fewer residential broadcast
subscribers and the $14 million decline in commercial subscription revenues due
to ongoing restrictions on pubs, clubs and other commercial venues due to
COVID-19. The decreases in revenues were partially offset by the positive impact
of foreign currency fluctuations and $9 million of higher revenues from OTT
products, primarily Kayo and Binge. The impact of foreign currency fluctuations
of the U.S. dollar against local currencies resulted in a revenue
increase of $20 million, or 3%, for the three months ended September 30, 2020 as
compared to the corresponding period of fiscal 2020.
For the three months ended September 30, 2020, Segment EBITDA decreased $3
million, or 4%, as compared to the corresponding period of fiscal 2020. The
Segment EBITDA decrease was primarily due to the lower revenues discussed above,
partially offset by cost savings primarily due to lower entertainment
programming, employee and transmission costs, as savings from renegotiated
sports rights were more than offset by the recognition of sports programming
rights and production costs deferred from the fourth quarter of fiscal 2020.
The following tables provide information regarding certain key performance
indicators for Foxtel, the primary reporting unit within the Subscription Video
Services segment, as of and for the three months ended September 30, 2020 and
2019 (see the Company's 2020 Form 10-K for further detail regarding these
performance indicators):
                                              As of September 30,
                                       2020                          2019
                                                   (in 000's)
Broadcast Subscribers
Residential(a)                        1,850                             2,059
Commercial(b)                           205                               267
OTT Subscribers (Total (Paid))
Foxtel Now(c)                       310 (298 paid)               385 (375 paid)
Kayo(d)                             681 (644 paid)               430 (364 paid)
Binge(e)                            321 (290 paid)                          -
Total Paid Subscribers                3,287                             3,065


                                      For the three months ended September 30,
                                       2020                               2019
Broadcast ARPU(f)                  A$79 (US$56)                       A$78 (US$53)
Broadcast Subscriber Churn(g)          14.6%                             

14.4%




(a)  Subscribing households throughout Australia as of September 30, 2020 and
2019.
(b)  Commercial subscribers throughout Australia as of September 30, 2020 and
2019. Commercial subscribers are calculated as residential equivalent business
units and are derived by dividing total recurring revenue from these subscribers
by an estimated average Broadcast ARPU which is held constant through the year.
                                       31
--------------------------------------------------------------------------------

  Table of Contents
(c)  Total and Paid Foxtel Now subscribers as of September 30, 2020 and 2019.
Paid Foxtel Now subscribers excludes customers receiving service for no charge
under certain new subscriber promotions.
(d)  Total and Paid Kayo subscribers as of September 30, 2020 and 2019. Paid
Kayo subscribers excludes customers receiving service for no charge under
certain new subscriber promotions.
(e)  Total and Paid Binge subscribers as of September 30, 2020. Binge was
launched on May 25, 2020. Paid Binge subscribers excludes customers receiving
service for no charge under certain new subscriber promotions.
(f)  Average monthly broadcast residential subscription revenue per user
(excluding Optus) (Broadcast ARPU) for the three months ended September 30, 2020
and 2019.
(g)  Broadcast residential subscriber churn rate (excluding Optus) (Broadcast
Subscriber Churn) for the three months ended September 30, 2020 and 2019.
Broadcast subscriber churn represents the number of cable and satellite
residential subscribers whose service is disconnected, expressed as a percentage
of the average total number of cable and satellite residential subscribers,
presented on an annual basis.
Dow Jones (18% and 16% of the Company's consolidated revenues in the three
months ended September 30, 2020 and 2019, respectively)
                                                                 For the three months ended
                                                                       September 30,
                                                                                       2020            2019            Change            % Change
(in millions, except %)                                                                                   Better/(Worse)
Revenues:
Circulation and subscription                                                         $ 311          $   289          $    22                     8  %
Advertising                                                                             70               84              (14)                  (17) %
Other                                                                                    5                9               (4)                  (44) %
Total Revenues                                                                         386              382                4                     1  %
Operating expenses                                                                    (185)            (187)               2                     1  %
Selling, general and administrative                                                   (129)            (146)              17                    12  %
Segment EBITDA                                                                       $  72          $    49          $    23                    47  %


For the three months ended September 30, 2020, revenues at the Dow Jones segment
increased $4 million, or 1%, as compared to the corresponding period of fiscal
2020 driven by growth in circulation and subscription revenues, partially offset
by a decline in print advertising revenues. Digital revenues at the Dow Jones
segment represented 73% of total revenues for the three months ended
September 30, 2020, as compared to 65% in the corresponding period of fiscal
2020. The impact of foreign currency fluctuations of the U.S. dollar against
local currencies resulted in a revenue increase of $1 million for the three
months ended September 30, 2020 as compared to the corresponding period of
fiscal 2020.
Circulation and subscription revenues
                                                                For the three months ended
                                                                      September 30,
                                                                                      2020            2019            Change            % Change
(in millions, except %)                                                                                  Better/(Worse)
Circulation and subscription revenues:
Circulation and other                                                               $ 198          $   178          $    20                    11  %
Professional information business                                                     113              111                2                     2  %
Total circulation and subscription revenues                                         $ 311          $   289          $    22                     8  %


Circulation and subscription revenues increased $22 million, or 8%, during the
three months ended September 30, 2020 as compared to the corresponding period of
fiscal 2020. Circulation and other revenues increased $20 million, or 11%,
primarily driven by growth in digital-only subscriptions at The Wall Street
Journal and a $7 million increase in content licensing revenues, partially
offset by print volume declines. During the three months ended September 30,
2020, average daily digital-only subscriptions at The Wall Street Journal
increased 27% to 2.4 million as compared to the corresponding period of fiscal
2020, and digital revenues represented 63% of circulation revenue for the three
months ended September 30, 2020, as compared to 56% in the corresponding period
of fiscal 2020. Professional information business revenues increased $2 million,
or 2%, as growth of $6 million in Risk & Compliance revenues was mostly offset
by lower revenues from other professional information business products.
                                       32
--------------------------------------------------------------------------------

  Table of Contents
The following table summarizes average daily consumer subscriptions during the
three months ended September 30, 2020 and 2019 for select publications and for
all consumer subscription products.(a)(b)
                                                                         

For the three months ended September 30,


                                                           2020                  2019               Change               % Change
(in thousands, except %)                                                                                    Better/(Worse)
The Wall Street Journal
Digital-only subscriptions(c)                                 2,354               1,854                500                       27  %
Total subscriptions                                           3,104               2,618                486                       19  %

Barron's


Digital-only subscriptions(c)                                   458                 321                137                       43  %
Total subscriptions                                             667                 587                 80                       14  %
Total Consumer(d)
Digital-only subscriptions(c)                                 2,914               2,259                655                       29  %
Total subscriptions                                           3,877               3,296                581                       18  %

________________________


(a)Based on internal data for the periods from June 29, 2020 to September 27,
2020 and July 1, 2019 through September 29, 2019, respectively, with independent
assurance over global total sales and subscriptions provided by
PricewaterhouseCoopers LLP UK.
(b)Subscriptions include individual consumer subscriptions, as well as
subscriptions purchased by companies, schools, businesses and associations for
use by their respective employees, students, customers or members. Subscriptions
exclude single-copy sales and copies purchased by hotels, airlines and other
businesses for limited distribution or access to customers.
(c)For some publications, including The Wall Street Journal and Barron's, Dow
Jones sells bundled print and digital products. For bundles that provide access
to both print and digital products every day of the week, only one unit is
reported each day and is designated as a print subscription. For bundled
products that provide access to the print product only on specified days and
full digital access, one print subscription is reported for each day that a
print copy is served and one digital subscription is reported for each remaining
day of the week.
(d)Total Consumer consists of The Wall Street Journal, Barron's, MarketWatch
newsletters and Financial News, including Private Equity News.
Advertising revenues
Advertising revenues decreased $14 million, or 17%, during the three months
ended September 30, 2020 as compared to the corresponding period of fiscal 2020,
primarily driven by the $19 million decrease in print advertising revenues
resulting from general market weakness and lower volume across The Wall Street
Journal and Barron's due to COVID-19, partially offset by a $5 million increase
in digital advertising revenue, which represented 57% of advertising revenue for
the three months ended September 30, 2020, as compared to 42% in the
corresponding period of fiscal 2020.
Segment EBITDA
For the three months ended September 30, 2020, Segment EBITDA at the Dow Jones
segment increased $23 million, or 47%, as compared to the corresponding period
of fiscal 2020. The increase was mainly due to lower newsprint, production and
distribution costs, driven by lower print volumes, lower travel and
entertainment costs due to COVID-19 and the increase in revenues discussed
above.
                                       33
--------------------------------------------------------------------------------

  Table of Contents
Book Publishing (22% and 17% of the Company's consolidated revenues in the three
months ended September 30, 2020 and 2019, respectively)
                                                                  For the three months ended
                                                                        September 30,
                                                                                        2020            2019            Change            % Change
(in millions, except %)                                                                                    Better/(Worse)
Revenues:
Consumer                                                                              $ 441          $   387          $    54                    14  %
Other                                                                                    17               18               (1)                   (6) %
Total Revenues                                                                          458              405               53                    13  %
Operating expenses                                                                     (304)            (279)             (25)                   (9) %
Selling, general and administrative                                                     (83)             (77)              (6)                   (8) %
Segment EBITDA                                                                        $  71          $    49          $    22                    45  %


For the three months ended September 30, 2020, revenues at the Book Publishing
segment increased $53 million, or 13%, as compared to the corresponding period
of fiscal 2020. The increase for the three months ended September 30, 2020 was
primarily driven by the strong performance of titles in the General Books
category such as The Order by Daniel Silva, The Guest List by Lucy Foley and How
to Destroy America in Three Easy Steps by Ben Shapiro, as well as higher
backlist sales of children's titles and the $9 million impact from the
acquisition of a book publisher in Europe in the fourth quarter of fiscal 2020.
Digital sales increased by 20% as compared to the corresponding period of fiscal
2020, primarily due to growth in both e-books and downloadable audiobooks.
Digital sales represented approximately 23% of consumer revenues during the
three months ended September 30, 2020. The impact of foreign currency
fluctuations of the U.S. dollar against local currencies resulted in a revenue
increase of $4 million, or 1%, for the three months ended September 30, 2020 as
compared to the corresponding period of fiscal 2020.
For the three months ended September 30, 2020, Segment EBITDA at the Book
Publishing segment increased $22 million, or 45%, as compared to the
corresponding period of fiscal 2020. The increase was primarily due to the
higher revenues discussed above and the mix of titles.
News Media (23% and 33% of the Company's consolidated revenues in the three
months ended September 30, 2020 and 2019, respectively)
                                                                 For the three months ended
                                                                       September 30,
                                                                                       2020            2019            Change            % Change
(in millions, except %)                                                                                   Better/(Worse)
Revenues:
Circulation and subscription                                                         $ 246          $    245          $    1                     -  %
Advertising                                                                            184               446            (262)                  (59) %
Other                                                                                   57                76             (19)                  (25) %
Total Revenues                                                                         487               767            (280)                  (37) %
Operating expenses                                                                    (299)             (483)            184                    38  %
Selling, general and administrative                                                   (210)             (277)             67                    24  %
Segment EBITDA                                                                       $ (22)         $      7          $  (29)                      **
** not meaningful


Revenues at the News Media segment decreased $280 million, or 37%, for the three
months ended September 30, 2020 as compared to the corresponding period of
fiscal 2020. The revenue decrease was primarily due to lower advertising
revenues of $262 million, driven by the sale of News America Marketing in the
fourth quarter of fiscal 2020, which contributed $200 million to the decline,
continued weakness in the print advertising market exacerbated by COVID-19 and
the $29 million impact from the closure or transition to digital of regional and
community newspapers in Australia. Other revenues for the three months
ended September 30, 2020 decreased $19 million as compared to the corresponding
period of fiscal 2020, primarily due to the $10 million impact from the sale of
Unruly in January 2020. Circulation and subscription revenues increased $1
million as compared to the corresponding period of fiscal 2020 primarily due to
digital subscriber growth across key mastheads, the $10 million positive impact
of foreign currency fluctuations and price increases, partially offset by
declines in print volume. The
                                       34
--------------------------------------------------------------------------------

  Table of Contents
impact of foreign currency fluctuations of the U.S. dollar against local
currencies resulted in a revenue increase of $19 million, or 2%, for the three
months ended September 30, 2020 as compared to the corresponding period
of fiscal 2020.
Segment EBITDA at the News Media segment declined $29 million for the three
months ended September 30, 2020 as compared to the corresponding period of
fiscal 2020. The decrease was due to the net $12 million impact from the sales
of News America Marketing and Unruly in fiscal 2020 and to lower contributions
from News Corp Australia and News UK of $13 million and $9 million,
respectively, primarily driven by lower revenues, partially offset by cost
savings initiatives.
News Corp Australia
Revenues were $221 million for the three months ended September 30, 2020, a
decrease of $55 million, or 20%, compared to revenues of $276 million in the
corresponding period of fiscal 2020. The closure or transition to digital of
regional and community newspapers in Australia resulted in a revenue decrease of
$35 million. Advertising revenues decreased $52 million, primarily due to the
closure or transition to digital of regional and community newspapers and
continued weakness in the print advertising market exacerbated by COVID-19.
Circulation and subscription revenues increased $5 million, primarily driven by
digital subscriber growth and the positive impact from foreign currency
fluctuations, which were mostly offset by print volume declines resulting from
the closure or transition to digital of regional and community newspapers. The
impact of foreign currency fluctuations of the U.S. dollar against local
currencies resulted in a revenue increase of $9 million, or 3%, for the three
months ended September 30, 2020 as compared to the corresponding period of
fiscal 2020.
News UK
Revenues were $206 million for the three months ended September 30, 2020, a
decrease of $17 million, or 8%, as compared to revenues of $223 million in the
corresponding period of fiscal 2020. Advertising revenues decreased $13 million,
primarily due to continued weakness in the print advertising market exacerbated
by COVID-19. Circulation and subscription revenues decreased $1 million,
primarily driven by single-copy volume declines at The Sun, partially offset by
the $6 million positive impact of foreign currency fluctuations, digital
subscriber growth, mainly at The Times, and cover price increases, mainly at The
Sun. The impact of foreign currency fluctuations of the U.S. dollar against
local currencies resulted in a revenue increase of $9 million, or 4%, for the
three months ended September 30, 2020 as compared to the corresponding period of
fiscal 2020.
LIQUIDITY AND CAPITAL RESOURCES
Current Financial Condition
The Company's principal source of liquidity is internally generated funds and
cash and cash equivalents on hand. As of September 30, 2020, the Company's cash
and cash equivalents were $1.5 billion. The Company also has available borrowing
capacity under the 2019 News Corp Credit Facility (as defined below) and certain
other facilities, as described below, and expects to have access to the
worldwide credit and capital markets, subject to market conditions, in order to
issue additional debt if needed or desired. The Company currently expects these
elements of liquidity will enable it to meet its liquidity needs for at least
the next 12 months, including repayment of indebtedness. However, the Company
will continue to review its liquidity needs in light of the business and
economic impacts resulting from COVID-19 and has taken various steps to offset
the impact of COVID-19, including reducing variable costs and implementing cost
savings initiatives across its businesses. Although the Company believes that
its cash on hand and future cash from operations, together with its access to
the credit and capital markets, will provide adequate resources to fund its
operating and financing needs for at least the next 12 months, its access to,
and the availability of, financing on acceptable terms in the future will be
affected by many factors, including: (i) the financial and operational
performance of the Company and/or its operating subsidiaries, as applicable,
(ii) the Company's credit ratings and/or the credit rating of its operating
subsidiaries, as applicable, (iii) the provisions of any relevant debt
instruments, credit agreements, indentures and similar or associated documents,
(iv) the liquidity of the overall credit and capital markets and (v) the state
of the economy. Some of these factors may be adversely impacted by the COVID-19
pandemic and there can be no assurances that the Company will continue to have
access to the credit and capital markets on acceptable terms. See Part I, "Item
1A. Risk Factors" in the 2020 Form 10-K for further discussion.
As of September 30, 2020, the Company's consolidated assets included
$778 million in cash and cash equivalents that were held by its foreign
subsidiaries. Of this amount, $132 million is cash not readily accessible by the
Company as it is held by REA Group, a majority owned but separately listed
public company. REA Group must declare a dividend in order for the Company to
have access to its share of REA Group's cash balance. The Company earns income
outside the U.S., which is deemed to be permanently reinvested in certain
foreign jurisdictions. The Company does not currently intend to repatriate these
earnings. Should the Company require more capital in the U.S. than is generated
by and/or available to its domestic operations, the Company could elect to
transfer funds held in foreign jurisdictions. The transfer of funds from foreign
jurisdictions may be
                                       35
--------------------------------------------------------------------------------

  Table of Contents
cumbersome due to local regulations, foreign exchange controls and taxes.
Additionally, the transfer of funds from foreign jurisdictions may result in
higher effective tax rates and higher cash paid for income taxes for the
Company.
The principal uses of cash that affect the Company's liquidity position include
the following: operational expenditures including employee costs and paper
purchases; capital expenditures; income tax payments; investments in associated
entities; acquisitions; and the repayment of debt and related interest. In
addition to the acquisitions and dispositions disclosed elsewhere, the Company
has evaluated, and expects to continue to evaluate, possible future acquisitions
and dispositions of certain businesses. Such transactions may be material and
may involve cash, the issuance of the Company's securities or the assumption of
indebtedness.
Issuer Purchases of Equity Securities
The Company did not purchase any of its Class A Common Stock or Class B Common
Stock during the three months ended September 30, 2020 and 2019.
Dividends
In August 2020, the Company's Board of Directors ("the Board of Directors")
declared a semi-annual cash dividend of $0.10 per share for Class A Common Stock
and Class B Common Stock. This dividend was paid on October 14, 2020 to
stockholders of record as of September 16, 2020. The timing, declaration, amount
and payment of future dividends to stockholders, if any, is within the
discretion of the Board of Directors. The Board of Directors' decisions
regarding the payment of future dividends will depend on many factors, including
the Company's financial condition, earnings, capital requirements and debt
facility covenants, other contractual restrictions, as well as legal
requirements, regulatory constraints, industry practice, market volatility and
other factors that the Board of Directors deems relevant.
Sources and Uses of Cash-For the three months ended September 30, 2020 versus
the three months ended September 30, 2019
Net cash provided by operating activities for the three months ended
September 30, 2020 and 2019 was as follows (in millions):
For the three months ended September 30,      2020       2019
Net cash provided by operating activities    $ 155      $ 27


Net cash provided by operating activities increased by $128 million for the
three months ended September 30, 2020 as compared to the three months ended
September 30, 2019. The increase was primarily due to higher Total Segment
EBITDA and lower working capital.
Net cash used in investing activities for the three months ended September 30,
2020 and 2019 was as follows (in millions):
For the three months ended September 30,      2020        2019
Net cash used in investing activities        $ (96)     $ (118)


Net cash used in investing activities decreased by $22 million for the three
months ended September 30, 2020, as compared to the three months ended
September 30, 2019. During the three months ended September 30, 2020, the
Company used $93 million of cash for capital expenditures, of which $51 million
related to Foxtel.
During the three months ended September 30, 2019, the Company used $117 million
of cash for capital expenditures, of which $66 million related to Foxtel.
Net cash used in financing activities for the three months ended September 30,
2020 and 2019 was as follows (in millions):
For the three months ended September 30,      2020       2019
Net cash used in financing activities        $ (50)     $ (95)


Net cash used in financing activities decreased by $45 million for the three
months ended September 30, 2020, as compared to the three months ended
September 30, 2019. During the three months ended September 30, 2020, the
Company repaid $119 million of borrowings related to Foxtel and made dividend
payments of $20 million to REA Group minority stockholders. The net cash used in
financing activities was partially offset by new borrowings related to Foxtel of
$123 million.
                                       36
--------------------------------------------------------------------------------

  Table of Contents
During the three months ended September 30, 2019, the Company repaid $290
million of borrowings related to Foxtel and made dividend payments of $22
million to REA Group minority stockholders. The net cash used in financing
activities for the three months ended September 30, 2019 was partially offset by
new borrowings related to Foxtel of $199 million and the net settlement of
hedges of $57 million.
Reconciliation of Free Cash Flow Available to News Corporation
Free cash flow available to News Corporation is a non-GAAP financial measure
defined as net cash provided by operating activities, less capital expenditures
("free cash flow"), less REA Group free cash flow, plus cash dividends received
from REA Group. Free cash flow available to News Corporation should be
considered in addition to, not as a substitute for, cash flows from operations
and other measures of financial performance reported in accordance with GAAP.
Free cash flow available to News Corporation 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 free cash flow.
The Company considers free cash flow available to News Corporation to provide
useful information to management and investors about the amount of cash that is
available to be used to strengthen the Company's balance sheet and for strategic
opportunities including, among others, investing in the Company's business,
strategic acquisitions, dividend payouts and repurchasing stock. The Company
believes excluding REA Group's free cash flow and including dividends received
from REA Group provides users of its consolidated financial statements with a
measure of the amount of cash flow that is readily available to the Company, as
REA Group is a separately listed public company in Australia and must declare a
dividend in order for the Company to have access to its share of REA Group's
cash balance. The Company believes free cash flow available to News Corporation
provides a more conservative view of the Company's free cash flow because this
presentation includes only that amount of cash the Company actually receives
from REA Group, which has generally been lower than the Company's unadjusted
free cash flow.
A limitation of free cash flow available to News Corporation is that it does not
represent the total increase or decrease in the cash balance for the period.
Management compensates for the limitation of free cash flow available to News
Corporation by also relying on the net change in cash and cash equivalents as
presented in the Statements of Cash Flows prepared in accordance with GAAP which
incorporate all cash movements during the period.
The following table presents a reconciliation of net cash provided by operating
activities to free cash flow available to News Corporation:
                                                       For the three months ended
                                                              September 30,
                                                             2020                   2019
                                                              (in millions)
Net cash provided by operating activities      $          155                      $  27
Less: Capital expenditures                                (93)                      (117)
                                                           62                        (90)
Less: REA Group free cash flow                            (29)              

(28)


Plus: Cash dividends received from REA Group               32               

35


Free cash flow available to News Corporation   $           65               

$ (83)




Free cash flow available to News Corporation increased by $148 million in the
three months ended September 30, 2020 to $65 million from $(83) million in the
corresponding period of fiscal 2020, primarily due to higher net cash provided
by operating activities as discussed above and lower capital expenditures.
Borrowings
As of September 30, 2020, the Company had total borrowings of $1.3 billion,
including the current portion and finance lease liabilities. The Company's
borrowings as of such date primarily consisted of (i) $1,000 million of
outstanding debt incurred by certain subsidiaries of NXE Australia Pty Limited
("Foxtel" and together with such subsidiaries, the "Foxtel Debt Group") and (ii)
$169 million of outstanding debt incurred by REA Group and certain of its
subsidiaries (REA Group and such subsidiaries, the "REA Debt Group"). Both
Foxtel and REA Group are consolidated but non wholly-owned subsidiaries of News
Corp, and their indebtedness is only guaranteed by members of the Foxtel Debt
Group and REA Debt Group and certain of their subsidiaries, respectively, and is
non-recourse to News Corp.
                                       37

--------------------------------------------------------------------------------



  Table of Contents
REA Group has access to an A$20 million overdraft facility (the "2020 Overdraft
Facility"). The 2020 Overdraft Facility is an uncommitted facility that will be
reviewed annually by the lender and bears interest at a rate based on the
lender's benchmark borrowing rate less a discount of 4.22%. The 2020 Overdraft
Facility carries an annual facility fee of 0.15% of the A$20 million overdraft
limit. As of September 30, 2020, REA Group had not borrowed any funds under the
2020 Overdraft Facility. In October 2020, REA Group amended certain terms of its
credit facilities to, among other things, require REA Group to maintain a net
leverage ratio of not more than 3.50 to 1.0 subsequent to December 31, 2020.
The Company has access to an unsecured $750 million revolving credit facility
(the "2019 News Corp Credit Facility") that can be used for general corporate
purposes. The 2019 News Corp Credit Facility has a sublimit of $100 million
available for issuances of letters of credit. The Company may request increases
in the amount of the facility up to a maximum amount of $1 billion. The lenders'
commitments to make the 2019 News Corp Credit Facility available terminate on
December 12, 2024, and the Company may request that the commitments be extended
under certain circumstances for up to two additional one-year periods. As of
September 30, 2020, the Company has not borrowed any funds under the 2019 News
Corp Credit Facility.
All of the Company's borrowings contain customary representations, covenants and
events of default. The Company was in compliance with all such covenants
at September 30, 2020.
See Note 5-Borrowings in the accompanying Consolidated Financial Statements for
further details regarding the Company's outstanding debt, including certain
information about interest rates and maturities related to such debt
arrangements.
Commitments
The Company has commitments under certain firm contractual arrangements ("firm
commitments") to make future payments. These firm commitments secure the future
rights to various assets and services to be used in the normal course of
operations. The Company's commitments as of September 30, 2020 have not changed
significantly from the disclosures included in the 2020 Form 10-K.
Contingencies
The Company routinely is involved in various legal proceedings, claims and
governmental inspections or investigations, including those discussed in Note 9
to the Consolidated Financial Statements. The outcome of these matters and
claims is subject to significant uncertainty, and the Company often cannot
predict what the eventual outcome of pending matters will be or the timing of
the ultimate resolution of these matters. Fees, expenses, fines, penalties,
judgments or settlement costs which might be incurred by the Company in
connection with the various proceedings could adversely affect its results of
operations and financial condition.
The Company establishes an accrued liability for legal claims when it determines
that a loss is both probable and the amount of the loss can be reasonably
estimated. Once established, accruals are adjusted from time to time, as
appropriate, in light of additional information. The amount of any loss
ultimately incurred in relation to matters for which an accrual has been
established may be higher or lower than the amounts accrued for such matters.
Legal fees associated with litigation and similar proceedings are expensed as
incurred. The Company recognizes gain contingencies when the gain becomes
realized or realizable. See Note 9-Commitments and Contingencies in the
accompanying Consolidated Financial Statements.
The Company's tax returns are subject to on-going review and examination by
various tax authorities. Tax authorities may not agree with the treatment of
items reported in the Company's tax returns, and therefore the outcome of tax
reviews and examinations can be unpredictable. The Company believes it has
appropriately accrued for the expected outcome of uncertain tax matters and
believes such liabilities represent a reasonable provision for taxes ultimately
expected to be paid. However, these liabilities may need to be adjusted as new
information becomes known and as tax examinations continue to progress, or as
settlements or litigations occur.

© Edgar Online, source Glimpses