News Corporation Reports Record Full Year Operating Income of $5.4 Billion; Growth of 21% over Fiscal 2007

FULL YEAR FINANCIAL HIGHLIGHTS

• 21% operating income growth driven by record results at the Direct Broadcast Satellite, Cable Network Programming, Television and Filmed Entertainment segments.
• SKY Italia generates operating income of $419 million, an improvement of $198 million versus a year ago, reflecting net subscriber additions of 366,000 over the past 12 months as the subscriber base expands to 4.56 million.
• Cable Network Programming operating income up 16% despite losses associated with the launch of the Fox Business Network and the Big Ten Network. Operating performance improvement was driven by earnings growth at the Fox News Channel, the Regional Sports Networks and the Fox International Channels.
• Television segment operating income increases 17% on strength of FOX broadcast season and lower programming costs associated with the writers’ strike partially offset by decline in local TV advertising revenue.
• Filmed Entertainment delivers seventh consecutive record year of operating income growth, reaching $1.25 billion on strong theatrical release slate and continued success of film and television home entertainment titles.
• Print businesses aggregate operating income increases 12% on strength of the Australian newspaper business and inclusion of Dow Jones & Company.
• Fox Interactive Media grows revenues 57% and increases operating profits five-fold on strength of advertising and search revenue growth at MySpace.

FULL YEAR STRATEGIC HIGHLIGHTS

• Completed a $10.1 billion stock buyback through the exchange of the Company’s entire interest in The DIRECTV Group, three Regional Sports Networks and approximately $625 million in cash for an approximately 16 percent interest in the Company’s common stock.
• Continued purchasing stock under the Company’s stock repurchase program. Total re-purchases to date of approximately $4.2 billion.
• Completed acquisition of Dow Jones & Company, divestiture of equity interest in Gemstar-TV Guide and the sale of real estate in the U.K.
• Following year-end, completed the previously announced sale of eight television stations for approximately $1.1 billion in cash.

News Corporation (NYSE: NWS, NWSA; ASX: NWS, NWSLV) today reported fourth quarter net income of $1.1 billion ($0.43 per share), an increase of $239 million, or 27%, from the $890 million ($0.28 per share on a diluted combined basis¹) reported in the fourth quarter a year ago. The year-on-year growth in the quarter primarily reflects increased consolidated operating income and gains from the sale of the Company’s interests in Fox Sports Bay Area and Gemstar-TV Guide International, as well as a gain from the unrealized change in fair value of certain outstanding exchangeable debt securities. Partially offsetting these gains was a decrease in earnings from affiliates, primarily from the absence of DIRECTV earnings and a further writedown of BSkyB’s ITV investment.

For the full year, net income was $5.4 billion ($1.81 per share), an increase of $2 billion from the $3.4 billion ($1.08 per share on a diluted combined basis¹) reported in fiscal 2007. This represents a 68% increase in earnings per share. The full year results primarily reflect increased consolidated operating income, lower equity earnings of affiliates and an increase in Other income, which mainly includes a $1.7 billion tax-free gain on the asset and stock exchange with Liberty Media Corporation, as well as gains from the sales of Fox Sports Bay Area and Gemstar-TV Guide International.

Fourth quarter consolidated operating income of $1.5 billion increased 21% over the $1.2 billion reported a year ago on revenues of $8.6 billion, up 17% from the $7.4 billion reported in the fourth quarter of fiscal 2007. The year-on-year operating income growth for the quarter was primarily driven by double-digit percentage increases at all operating segments with the exception of the Television segment. The Other segment includes a $126 million gain in the quarter from the completion of a planned land sale in the U.K.

Record full year operating income of $5.4 billion increased 21% over the $4.45 billion reported a year ago on revenues of $33 billion, up 15% from the $28.7 billion reported in fiscal 2007. The full year operating income growth was primarily led by record contributions from the Filmed Entertainment, Television, Cable Network Programming and Direct Broadcast Satellite segments.

Commenting on the results, Chairman and Chief Executive Officer Rupert Murdoch said:

“We are extremely pleased with the continued growth we achieved during fiscal 2008 -- our sixth consecutive year of record profits. All of our business segments generated year over year gains, with record profits reported at our satellite broadcasting, cable programming, film and television businesses. Although we clearly face more challenging macro-economic conditions in fiscal ’09, we’re well positioned to deliver continued, if somewhat less robust growth. Our balance sheet is strong, we have solid operating momentum in many of our key businesses, and most importantly, our assets are diversified, both geographically and along business lines, enabling us to better respond to the economic challenges we may face this year.”

REVIEW OF OPERATING RESULTS

FILMED ENTERTAINMENT

The Filmed Entertainment segment reported fourth quarter operating income of $220 million versus $106 million in the same period a year ago. Fourth quarter film results were driven by the home entertainment contributions of the successful theatrical releases Alvin and the Chipmunks, Juno, AVP: Requiem and 27 Dresses. The strong performance of the home entertainment releases was partially offset by costs associated with worldwide theatrical launches of The Happening and What Happens in Vegas.

For the full year, operating profit increased to $1.25 billion, representing the seventh consecutive record year. The current year included the worldwide theatrical and home entertainment performances of The Simpsons Movie, Live Free or Die Hard, Alvin and the Chipmunks, Fantastic Four: Rise of the Silver Surfer and Juno. Also contributing to this year’s success were the home entertainment performances and pay-tv contributions from Night at the Museum, Borat and Eragon.

Twentieth Century Fox Television fourth quarter and full year operating results increased as compared to a year ago, primarily reflecting higher contributions from home entertainment and domestic syndication, particularly from Family Guy, as well as reduced development and pilot spending due to the writers’ strike.

TELEVISION

The Television segment reported fourth quarter operating income of $279 million, a decrease of $106 million versus the same period a year ago. The 28% decline reflects lower contributions from the Fox Television Stations, STAR and FOX Broadcasting Company. For the full year, segment operating income increased 17% due to improved FOX Broadcasting Company results and reduced losses from MyNetworkTV partially offset by lower station and STAR contributions.

At the Fox Television Stations (FTS) fourth quarter operating income decreased 26% from the same period a year ago on market related revenue declines at the FOX-affiliated stations. For the full year, operating income decreased 11% versus fiscal 2007 as lower advertising revenues were partially offset by improved operating results from the MyNetworkTV affiliated stations.

FOX Broadcasting Company (FBC), fourth quarter operating results were lower than a year ago as primetime advertising revenue declined due to lower ratings. The revenue decline was partially offset by lower programming costs resulting from the acquisition of fewer pilots due to the writers’ strike.

Record full year operating profits at FBC were driven by lower prime-time programming costs as a result of the writers’ strike. Also contributing to the record results were increased profits from sports programming driven by higher advertising revenues from higher pricing and post-season ratings for the National Football League broadcasts, as well as lower programming costs due to the reduced coverage of Major League Baseball’s post-season. FOX’s broadcast of the Super Bowl and the continued success of American Idol, contributed to FBC finishing as the top-rated network among Adults 18-49 this past broadcast season. Additionally, FOX ranked #1 among total viewers for the first time in its history.

STAR’s fourth quarter and full year operating income decreased versus the comparable periods a year ago, as growth in advertising revenues was more than offset by higher programming costs.

CABLE NETWORK PROGRAMMING

Cable Network Programming reported fourth quarter operating income of $313 million, an increase of $29 million over the fourth quarter a year ago, and record full year operating income of $1.3 billion, an increase of $179 million over fiscal 2007. The 10% fourth quarter and the 16% full year growth reflects higher contributions from the Fox News Channel, the Regional Sports Networks (RSNs) and the Fox International Channels. Also included in current year results are first year losses associated with the Fox Business Network and Big Ten Network launches.

The Fox News Channel (FNC) reported operating income growth of 14% for the fourth quarter and 35% for the full year, primarily from increased affiliate rates driving affiliate revenue and advertising revenue gains resulting from increased pricing. For the full year, FNC’s viewership was 59% higher than its nearest competitor in primetime an