Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer x Accelerated filer ¨ Non-accelerated filer ¨ Smaller reporting company ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

As of ~~January 29,~~April 30, 2010, ~~1,821,687,852~~1,822,182,953 shares of Class A Common Stock, par value $0.01 per share, and 798,520,953 shares of Class B Common Stock, par value $0.01 per share, were outstanding.


	For the three months ended December 31,						For the six months ended December 31,						For the three months ended March 31,						For the nine months ended March 31,
	2009			2008			2009			2008			2010			2009			2010			2009
Revenues	$	8,684		$	7,871		$	15,883		$	15,380		$	8,785		$	7,373		$	24,668		$	22,753

Operating expenses		(5,630	)		(5,161	)		(10,035	)		(9,732	)		(5,777	)		(4,848	)		(15,812	)		(14,580	)
Selling, general and administrative		(2,043	)		(1,588	)		(3,478	)		(3,269	)		(1,461	)		(1,441	)		(4,939	)		(4,710	)
Depreciation and amortization		(299	)		(283	)		(596	)		(579	)		(294	)		(274	)		(890	)		(853	)
Impairment and restructuring charges		(10	)		(8,465	)		(30	)		(8,473	)		(6	)		(55	)		(36	)		(8,528	)
Equity earnings (losses) of affiliates		58			30			90			(329	)		181			(40	)		271			(369	)
Interest expense, net		(269	)		(231	)		(514	)		(452	)		(247	)		(238	)		(761	)		(690	)
Interest income		16			20			41			60			20			16			61			76
Other, net		(86	)		(98	)		(98	)		206			(45	)		1,132			(143	)		1,338

Income (loss) before income tax expense		421			(7,905	)		1,263			(7,188	)		1,156			1,625			2,419			(5,563	)
Income tax (expense) benefit		(137	)		1,514			(382	)		1,333			(295	)		1,103			(677	)		2,436

Net income (loss)		284			(6,391	)		881			(5,855	)		861			2,728			1,742			(3,127	)
Less: Net income attributable to noncontrolling interests		(30	)		(26	)		(56	)		(47	)		(22	)		(1	)		(78	)		(48	)

Net income (loss) attributable to News Corporation stockholders	$	254		$	(6,417	)	$	825		$	(5,902	)	$	839		$	2,727		$	1,664		$	(3,175	)

Dividends declared per share	$	—		$	—		$	0.06		$	0.06
Weighted average shares:
Basic		2,620			2,614			2,618			2,612			2,620			2,614			2,619			2,613
Diluted		2,622			2,614			2,620			2,612			2,627			2,620			2,625			2,613
Net income (loss) attributable to News Corporation stockholders per share:
Net income (loss) attributable to News Corporation stockholders per share
Basic	$	0.10		$	(2.45	)	$	0.32		$	(2.26	)	$	0.32		$	1.04		$	0.64		$	(1.22	)
Diluted	$	0.10		$	(2.45	)	$	0.31		$	(2.26	)	$	0.32		$	1.04		$	0.63		$	(1.22	)

The accompanying notes are an integral part of these unaudited consolidated financial statements.


					At March 31, 2010		At June 30, 2009
	At December 31, 2009		At June 30, 2009		(unaudited)		(audited)
Assets:
Current assets:
Cash and cash equivalents	$	7,266	$	6,540	$	8,183	$	6,540
Receivables, net		7,516		6,287		6,788		6,287
Inventories, net		2,995		2,477		2,732		2,477
Other		558		532		485		532

Total current assets		18,335		15,836		18,188		15,836

Non-current assets:
Receivables		235		282		261		282
Investments		3,162		2,957		3,423		2,957
Inventories, net		3,506		3,178		3,303		3,178
Property, plant and equipment, net		6,220		6,245		6,064		6,245
Intangible assets, net		8,893		8,925		8,486		8,925
Goodwill		14,465		14,382		14,007		14,382
Other non-current assets		1,317		1,316		1,296		1,316

Total assets	$	56,133	$	53,121	$	55,028	$	53,121

Liabilities and Equity:
Current liabilities:
Borrowings	$	1,840	$	2,085	$	310	$	2,085
Accounts payable, accrued expenses and other current liabilities		5,983		5,279		5,613		5,279
Participations, residuals and royalties payable		1,440		1,388		1,972		1,388
Program rights payable		1,124		1,115		1,166		1,115
Deferred revenue		806		772		835		772

Total current liabilities		11,193		10,639		9,896		10,639

Non-current liabilities:
Borrowings		13,435		12,204		13,196		12,204
Other liabilities		2,980		3,027		2,882		3,027
Deferred income taxes		3,330		3,276		3,483		3,276

Redeemable noncontrolling interests		365		343		362		343
Commitments and contingencies

Equity:
Class A common stock⁽¹⁾		18		18		18		18
Class B common stock⁽²⁾		8		8		8		8
Additional paid-in capital		17,283		17,354		17,335		17,354
Retained earnings and accumulated other comprehensive income		7,092		5,844		7,412		5,844

Total News Corporation stockholders’ equity		24,401		23,224		24,773		23,224
Noncontrolling interests		429		408		436		408

Total equity		24,830		23,632		25,209		23,632

Total liabilities and equity	$	56,133	$	53,121	$	55,028	$	53,121

The accompanying notes are an integral part of these unaudited consolidated financial statements.


	For the six months ended December 31,						For the nine months ended March 31,
	2009			2008			2010			2009
Operating activities:
Net income (loss)	$	881		$	(5,855	)	$	1,742		$	(3,127	)
Adjustments to reconcile net income (loss) to cash provided by (used in) operating activities:
Adjustments to reconcile net income (loss) to cash provided by operating activities:
Depreciation and amortization		596			579			890			853
Amortization of cable distribution investments		45			42			64			64
Equity (earnings) losses of affiliates		(90	)		329			(271	)		369
Cash distributions received from affiliates		152			140			190			157
Impairment charges (net of tax of $1.7 billion)		—			6,737			—			6,737
Other, net		98			(206	)		143			(1,338	)
Change in operating assets and liabilities, net of acquisitions:
Receivables and other assets		(1,172	)		(519	)		(480	)		(43	)
Inventories, net		(880	)		(858	)		(465	)		(718	)
Accounts payable and other liabilities		934			(784	)		1,166			(1,893	)

Net cash provided by (used in) operating activities		564			(395	)
Net cash provided by operating activities								2,979			1,061

Investing activities:
Property, plant and equipment, net of acquisitions		(388	)		(591	)		(661	)		(811	)
Acquisitions, net of cash acquired		(93	)		(462	)		(132	)		(776	)
Investments in equity affiliates		(139	)		(34	)		(307	)		(103	)
Other investments		(64	)		(33	)		(106	)		(65	)
Proceeds from sale of investments, other non-current assets and business disposals		36			973			889			1,713

Net cash used in investing activities		(648	)		(147	)		(317	)		(42	)

Financing activities:
Borrowings		1,010			47			1,024			1,032
Repayment of borrowings		(75	)		(255	)		(1,869	)		(336	)
Issuance of shares		21			4			22			4
Dividends paid		(183	)		(177	)		(203	)		(190	)
Purchase of subsidiary shares from noncontrolling interest		—			(11	)		—			(11	)
Other, net		2			18			2			18

Net cash provided by (used in) financing activities		775			(374	)
Net cash (used in) provided by financing activities								(1,024	)		517

Net increase (decrease) in cash and cash equivalents		691			(916	)
Net increase in cash and cash equivalents								1,638			1,536
Cash and cash equivalents, beginning of period		6,540			4,662			6,540			4,662
Exchange movement of opening cash balance		35			(125	)		5			(144	)

Cash and cash equivalents, end of period	$	7,266		$	3,621		$	8,183		$	6,054

The accompanying notes are an integral part of these unaudited consolidated financial statements.

News Corporation, a Delaware corporation, with its subsidiaries (together “News Corporation” or the “Company”), is a diversified global media company, which manages and reports its businesses in eight segments: Filmed Entertainment, Television, Cable Network Programming (which now includes STAR Group Limited (“STAR”), see Note 15—Segment Information), Direct Broadcast Satellite Television (“DBS”), Integrated Marketing Services (formerly Magazines and Inserts, see Note 15—Segment Information), Newspapers and Information Services, Book Publishing and Other.

The accompanying unaudited consolidated financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. In the opinion of management, all adjustments consisting only of normal recurring adjustments necessary for a fair presentation have been reflected in these unaudited consolidated financial statements. Operating results for the interim periods presented are not necessarily indicative of the results that may be expected for the fiscal year ending June 30, 2010.

These interim unaudited consolidated financial statements and notes thereto should be read in conjunction with the audited consolidated financial statements ~~and notes thereto included in the Company’s Annual Report on Form 10-K~~ for the fiscal year ended June 30, 2009 asand notes thereto included in the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission (“SEC”) on February 12, 2010, which should be read in conjunction with the Company’s Annual Report on Form 10-K filed with the SEC on August 12, ~~2009 (the “2009 Form 10-K”).~~2009.

The consolidated financial statements include the accounts of News Corporation and its subsidiaries. Intercompany transactions and balances have been eliminated. Equity investments in which the Company exercises significant influence but does not exercise control and is not the primary beneficiary are accounted for using the equity method. Investments in which the Company is not able to exercise significant influence over the investee are designated as available-for-sale if readily determinable fair values are available. If an investment’s fair value is not readily determinable, the Company accounts for its investment under the cost method.

The preparation of consolidated financial statements in conformity with GAAP requires that management make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Because of the use of estimates inherent in the financial reporting process, actual results could differ from those estimates.

Certain fiscal 2009 amounts have been reclassified to conform to the fiscal 2010 presentation.

The Company maintains a 52-53 week fiscal year ending on the Sunday nearest to each reporting date. As such, all references to ~~December~~March 31, ~~2009~~2010 and ~~December~~March 31, ~~2008~~2009 relate to the three and ~~six~~nine month periods ended ~~December 27,~~March 28, 2010 and March 29, 2009, ~~and December 28, 2008,~~ respectively. For convenience purposes, the Company continues to date its financial statements as of ~~December~~March 31.

In accordance with Accounting Standards Codification (“ASC”) 220 “Comprehensive Income,” total comprehensive income (loss) for the Company consisted of the following:


	For the three months ended December 31,						For the six months ended December 31,						For the three months ended March 31,						For the nine months ended March 31,
	2009			2008			2009			2008			2010			2009			2010			2009
	(in millions)												(in millions)
Net income (loss), as reported	$	284		$	(6,391	)	$	881		$	(5,855	)	$	861		$	2,728		$	1,742		$	(3,127	)
Other comprehensive income:
Foreign currency translation adjustments		67			(1,461	)		459			(2,606	)		(342	)		(187	)		117			(2,793	)
Unrealized holding gains (losses) on securities, net of tax		13			(17	)		57			(35	)		5			6			62			(29	)
Benefit plan adjustments		3			(12	)		12			(10	)		16			6			28			(4	)

Total comprehensive income (loss)		367			(7,881	)		1,409			(8,506	)		540			2,553			1,949			(5,953	)

Less: net income attributable to noncontrolling interests⁽¹⁾		(30	)		(26	)		(56	)		(47	)		(22	)		(1	)		(78	)		(48	)
Less: foreign currency translation adjustments attributable to noncontrolling interests⁽¹⁾		5			27			—			40			(2	)		14			(2	)		54

Comprehensive income (loss) attributable to News Corporation stockholders	$	342		$	(7,880	)	$	1,353		$	(8,513	)	$	516		$	2,566		$	1,869		$	(5,947	)

On July 1, 2009, the Company adopted the provisions of ASC 805 “Business Combinations” (“ASC 805”), which significantly changed the Company’s accounting for business combinations on a prospective basis in a number of areas, including the treatment of contingent consideration, preacquisition contingencies, transaction costs and restructuring costs. In addition, under ASC 805, changes in an acquired entity’s deferred tax assets and uncertain tax positions after the measurement period are included in income tax expense.

On July 1, 2009, the Company adopted the new provisions of ASC 810 “Consolidation” (“ASC 810”), which changed the accounting and reporting for minority interests. As a result of the adoption of these provisions, minority interests have been recharacterized as noncontrolling interests and classified as a component of equity, with the exception of redeemable noncontrolling interests. In accordance with ASC 810, the presentation and disclosure requirements for existing noncontrolling interests were applied retrospectively. All other requirements of these provisions were applied prospectively.


																		For the three months ended March 31,
	For the three months ended December 31,																	2010									2009
	2009								2008									News Corporation Stockholders			Noncontrolling Interests			Total Equity			News Corporation Stockholders			Noncontrolling Interests			Total Equity
	News Corporation Stockholders		Noncontrolling Interests			Total Equity			News Corporation Stockholders			Noncontrolling Interests			Total Equity									(in millions)
Balance, beginning of period	$	24,053	$	426		$	24,479		$	27,820		$	642		$	28,462		$	24,401		$	429		$	24,830		$	19,997		$	630		$	20,627
Net income (loss)		254		26	^(a)		280			(6,417	)		21	^(a)		(6,396	)
Other comprehensive income (loss)		88		(2	)^(b)		86			(1,463	)		(18	)^(b)		(1,481	)
Net income																			839			22	^(a)		861			2,727			14	^(a)		2,741
Other comprehensive loss																			(323	)		—	^(b)		(323	)		(161	)		(5	)^(b)		(166	)
Issuance of shares		1		—			1			9			—			9			8			—			8			5			—			5
Dividends declared																			(196	)		—			(196	)		(157	)		—			(157	)
Other		5		(21	)^(c)		(16	)		48			(15	)^(c)		33			44			(15	)^(c)		29			54			(244	)^(c)		(190	)

Balance, end of period	$	24,401	$	429		$	24,830		$	19,997		$	630		$	20,627		$	24,773		$	436		$	25,209		$	22,465		$	395		$	22,860


																			For the nine months ended March 31,
	For the six months ended December 31,																		2010									2009
	2009									2008									News Corporation Stockholders			Noncontrolling Interests			Total Equity			News Corporation Stockholders			Noncontrolling Interests			Total Equity
	News Corporation Stockholders			Noncontrolling Interests			Total Equity			News Corporation Stockholders			Noncontrolling Interests			Total Equity									(in millions)
Balance, beginning of period	$	23,224		$	408		$	23,632		$	28,623		$	631		$	29,254		$	23,224		$	408		$	23,632		$	28,623		$	631		$	29,254
Net income (loss)		825			49	^(a)		874			(5,902	)		40	^(a)		(5,862	)		1,664			71	^(a)		1,735			(3,175	)		54	^(a)		(3,121	)
Other comprehensive income (loss)		528			3	^(b)		531			(2,611	)		(26	)^(b)		(2,637	)		205			3	^(b)		208			(2,772	)		(31	)^(b)		(2,803	)
Issuance of shares		70			—			70			75			—			75			78			—			78			80			—			80
Dividends declared		(157	)		—			(157	)		(157	)		—			(157	)		(353	)		—			(353	)		(314	)		—			(314	)
Other		(89	)		(31	)^(c)		(120	)		(31	)		(15	)^(c)		(46	)		(45	)		(46	)^(c)		(91	)		23			(259	)^(c)		(236	)

Balance, end of period	$	24,401		$	429		$	24,830		$	19,997		$	630		$	20,627		$	24,773		$	436		$	25,209		$	22,465		$	395		$	22,860

On July 1, 2009, the Company adopted the new provisions of ASC 350 ~~“Intangibles—~~“Intangibles - Goodwill and Other” (“ASC 350”), which set forth the factors to be considered in developing renewal or extension assumptions used to determine the useful life of a recognizable intangible asset and is intended to improve the consistency between the useful life of a recognizable intangible asset and the period of expected cash flows used to measure the fair value of that asset. This adoption changed the Company’s determination of useful lives for intangible assets on a prospective basis.

On July 1, 2009, the Company adopted the additional provisions of ASC 820 “Fair Value Measurement and Disclosure” (“ASC 820”), which apply to non-recurring fair value measurements of non-financial assets and liabilities, such as measurement of potential impairments of goodwill, other intangible assets, other long-lived assets and non-financial assets held by a pension plan. These additional provisions also apply to the fair value measurements of non-financial assets acquired and liabilities assumed in business combinations. The Company’s adoption of the additional provisions of ASC 820 did not have a material effect on the Company’s consolidated financial statements.

In August 2009, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2009-05 “Fair Value Measurements and Disclosures (Topic 820)—Measuring Liabilities at Fair Value” (“ASU 2009-05”). ASU 2009-05 amends Subtopic 820-10 “Fair Value Measurements and Disclosures—Overall” and provides clarification on the methods to be used in circumstances in which a quoted price in an active market for the identical liability is not available.

In June 2010, the Company will adopt the new provisions of ASC 715 “Compensation—Retirement Benefits,” which expand the disclosure requirements of defined benefit plans. The expanded disclosure requirements include: (i) investment policies and strategies; (ii) the major categories of plan assets; (iii) the

inputs and valuation techniques used to measure plan assets; (iv) the effect of fair value measurements using significant unobservable inputs on changes in plan assets for the period; and (v) significant concentrations of risk within plan assets.

In December 2009, the Company ~~entered into an agreement to sell~~transferred the equity of its Photobucket subsidiary, a web-based provider of photo- and video-sharing services, and a related asset to a mobile photo uploading platform, in exchange for an equity interest in the ~~acquirer.~~acquirer and a cash payment. A loss of approximately $29 million on this transaction was included in other, net in the unaudited consolidated statements of operations for the ~~three and six~~nine months ended ~~December~~March 31, ~~2009.~~2010. As a result of this transaction, the Company’s interest in the acquirer, which is not material, was recorded at fair value.

In the third quarter of fiscal 2010, the Company completed two transactions related to its financial indexes businesses.

The Company sold its 33% interest in STOXX AG (“STOXX”), a European market index provider, to its partners, Deutsche Börse AG and SIX Group AG, for approximately $300 million in cash. The Company is entitled to receive additional consideration up to approximately $40 million if STOXX achieves certain revenue targets in calendar year 2010.

The Company and CME Group Inc. (“CME”) formed a joint venture to operate a global financial index service business (the “Venture”), to which the Company contributed its Dow Jones Indexes business valued at $675 million and CME contributed a business which provides certain market data services valued at $608 million. The Company and CME own 10% and 90% of the Venture, respectively. The Venture issued approximately $613 million in third-party debt due in March 2018 that has been guaranteed by CME (the “Venture Financing”). The Venture used the proceeds from the debt issuance to make a special distribution at the time of the closing of approximately $600 million to the Company. The Company agreed to indemnify CME with respect to any payments of principal, premium and interest that CME makes under its guarantee of the Venture Financing and certain refinancing of such debt. In the event the Company is required to perform under this indemnity, the Company will be subrogated to and acquire all rights of CME.

The Company has the right to cause the Venture to purchase its 10% interest at fair market value in 2016 and the Venture has the right to call the Company’s 10% interest at fair market value in 2017. The Company also agreed to provide to the Venture an annual media credit for advertising on the Company’s Dow Jones media properties averaging approximately $3.5 million for a ten year term.

The Company’s interest in the Venture was recorded at fair value of $67.5 million, which was determined using an earnings before interest, taxes, depreciation and amortization (“EBITDA”) multiple and market-based valuation approach methodologies, and is now accounted for under the ~~equity~~cost method of accounting. The net income, assets, liabilities, and cash flow attributable to the Dow Jones Indexes business are not material to the Company in any of the periods presented and, accordingly, have not been presented separately.

The Company recorded a combined loss of approximately $22 million on both of these transactions, which was included in other, net in the unaudited consolidated statements of operations for the three and nine months ended March 31, 2010.

In October 2008, the Company purchased VeriSign Inc.’s minority share of the Jamba joint venture for approximately $193 million in cash, increasing the Company’s interest to 100%.

In January 2009, the Company and Asianet TV Holdings Private Limited (“Asianet”) formed a venture (“Star Jupiter”) to provide general entertainment channels in southern India. The Company paid approximately $235 million in cash and assumed net debt of approximately $20 million for a controlling interest in four of Asianet’s channels which were combined with one of the Company’s existing channels. The Company has a majority interest in this new venture and, accordingly, began consolidating the results in January 2009.

The aforementioned acquisitions were all accounted for in accordance with ASC 805. The excess purchase price that has been allocated or has been preliminarily allocated to goodwill is not being amortized for all of the acquisitions noted above in accordance with ASC 350. Where the allocation of the excess purchase price is not final, the amount allocated to goodwill is subject to change upon completion of final valuations of certain assets and liabilities. A future reduction in goodwill for additional value to be assigned to identifiable finite-lived intangible assets or tangible assets could reduce future earnings as a result of additional amortization.

In July 2008, the Company completed the sale of eight of its owned-and-operated FOX network affiliated television stations (the “Stations”) for approximately $1 billion in cash. The Stations included: WJW in Cleveland, OH; KDVR in Denver, CO; KTVI in St. Louis, MO; WDAF in Kansas City, MO; WITI in Milwaukee, WI; KSTU in Salt Lake City, UT; WBRC in Birmingham, AL; and WGHP in Greensboro, NC. In connection with the transaction, the Stations entered into new affiliation agreements with the Company to receive network programming and assumed existing contracts with the Company for syndicated programming. No portion of the sale proceeds were allocated to the new network affiliation agreements as they were negotiated at fair value and are consistent with similar pre-existing contracts with other third party-owned FOX affiliated stations. In addition, the Company recorded a gain of approximately $232 million in other, net in the unaudited consolidated statements of operations during the ~~six~~nine months ended ~~December~~March 31, ~~2008.~~

In November 2008, the Company sold its ownership stake in a Polish television broadcaster to the remaining shareholders. The Company recognized a net loss of approximately $100 million on the disposal which was included in other, net in the unaudited consolidated statements of operations during the ~~three and six~~nine months ended ~~December~~March 31, ~~2008.~~2009.

In February 2009, the Company, two newly incorporated subsidiaries of funds advised by Permira Advisers LLP (the “Permira Newcos”) and the Company’s then majority-owned, publicly-held subsidiary, NDS Group plc (“NDS”), completed a transaction pursuant to which all issued and outstanding NDS Series A ordinary shares, including those represented by American Depositary Shares traded on The NASDAQ Stock Market, were acquired for per-share consideration of $63 in cash (the “NDS Transaction”). As part of the NDS Transaction, approximately 67% of the NDS Series B ordinary shares held by the Company were exchanged for $63 per share in a mix of approximately $1.5 billion in cash, which included $780 million of cash retained upon the deconsolidation of NDS, and a $242 million vendor note. Immediately prior to the consummation of the NDS Transaction, the Company owned approximately 72% of NDS through its ownership of all of the outstanding NDS Series B ordinary shares and, accordingly, included the results of NDS in the consolidated financial statements of the Company. As a result of the NDS Transaction, NDS ceased to be a public company and the Permira Newcos and the Company now own approximately 51% and 49% of NDS, respectively. The Company’s remaining interest in NDS is accounted for under the equity method of accounting. A gain of $1.2 billion was recognized on the sale of the Company’s interest in NDS and was included in other, net in the unaudited consolidated statements of operations in the ~~third quarter of fiscal~~three and nine months ended March 31, 2009.


	At December 31, 2009			At June 30, 2009			At March 31, 2010			At June 30, 2009
	(in millions)						(in millions)
Total receivables	$	9,136		$	7,727		$	8,226		$	7,727
Allowances for returns and doubtful accounts		(1,385	)		(1,158	)		(1,177	)		(1,158	)

Total receivables, net		7,751			6,569			7,049			6,569
Less: current receivables, net		(7,516	)		(6,287	)		(6,788	)		(6,287	)

Non-current receivables, net	$	235		$	282		$	261		$	282

In fiscal 2009, certain of the markets in which the Company’s businesses operate experienced a weakening in the economic climate which adversely affected advertising revenue and other consumer driven spending. As a result, a number of the Company’s businesses implemented a series of operational actions to address the Company’s cost structure, including the Company’s digital media properties, which were restructured to align resources more closely with business priorities. This restructuring program has included significant job reductions, both domestically and internationally, to enable the businesses to operate on a more cost effective basis. In conjunction with this project, the Company also eliminated excess facility requirements. ~~Several~~In fiscal 2009, several other businesses of the Company implemented similar plans, ~~in fiscal 2009,~~ including ~~its~~the U.K. and Australian newspapers, HarperCollins, MyNetworkTV and the Fox Television Stations. During the fiscal year ended June 30, 2009, the Company recorded restructuring charges in accordance with ASC 420 “Exit or Disposal Cost Obligations” of approximately $312 million which were included in impairment and restructuring charges in the ~~unaudited~~ consolidated statements of operations.

During the three and ~~six~~nine months ended ~~December~~March 31, ~~2009,~~2010, the Company recorded additional restructuring charges of approximately ~~$10~~$6 million and ~~$30~~$36 million, respectively. The restructuring charges for the three months ended ~~December~~March 31, ~~2009~~2010 reflect approximately ~~$10~~$4 million recorded at the Newspapers and Information Services segment related to termination benefits and $2 million recorded at the Other segment related to ~~a restructuring program at the Company’s Fox Mobile Entertainment division and~~ accretion on facility termination obligations. The restructuring charges for the ~~six~~nine months ended ~~December~~March 31, ~~2009~~2010 reflect an $18 million charge related to the sales and distribution operations of the STAR channels, $4 million related to a restructuring program recorded at the Newspapers and Information Services segment and a ~~$12~~$14 million charge at the Other segment related to the restructuring program at the Company’s Fox Mobile Entertainment division and accretion on facility termination obligations.


	For the three months ended December 31, 2009												For the three months ended March 31, 2010
	One time termination benefits			Facility related costs			Other costs			Total			One time termination benefits			Facility related costs			Other costs			Total
	(in millions)												(in millions)
Beginning of period	$	37		$	166		$	8		$	211		$	28		$	162		$	8		$	198
Additions		5			3			2			10			4			2			—			6
Payments		(14	)		(7	)		(2	)		(23	)		(5	)		(6	)		(1	)		(12	)
Foreign exchange movements														(1	)		—			—			(1	)

End of period	$	28		$	162		$	8		$	198		$	26		$	158		$	7		$	191


	For the six months ended December 31, 2009												For the nine months ended March 31, 2010
	One time termination benefits			Facility related costs			Other costs			Total			One time termination benefits			Facility related costs			Other costs			Total
	(in millions)												(in millions)
Beginning of period	$	65		$	164		$	8		$	237		$	65		$	164		$	8		$	237
Additions		18			10			2			30			22			12			2			36
Payments		(55	)		(12	)		(2	)		(69	)		(60	)		(18	)		(3	)		(81	)
Foreign exchange movements														(1	)		—			—			(1	)

End of period	$	28		$	162		$	8		$	198		$	26		$	158		$	7		$	191

The Company expects to record an additional ~~$69~~$64 million of restructuring charges, principally related to accretion on facility termination obligations, through fiscal 2021. At ~~December~~March 31, ~~2009,~~2010, restructuring liabilities of approximately ~~$73~~$69 million and ~~$125~~$122 million were included in the unaudited consolidated balance sheets in other current liabilities and other liabilities, respectively. ~~Facility related costs of $125 million included in other~~Other liabilities ~~and~~primarily relate to additional accretion on facility termination obligations which are expected to be paid through fiscal 2021.

As a result of the Dow Jones & Company, Inc. (“Dow Jones”) acquisition in fiscal 2008, the Company established and approved plans to integrate the acquired operations into the Newspapers and Information Services segment. The cost to implement these plans consists of separation payments for certain Dow Jones executives under the change in control plan Dow Jones had established prior to the acquisition, non-cancelable lease commitments and lease termination charges for leased facilities that have or will be exited and other contract termination costs associated with the restructuring activities.

The balance of the plan liabilities as of March 31, 2010 primarily includes facility related costs.

~~The balance of the plan liabilities as of December 31, 2009 primarily includes facility related costs.~~


	At December 31, 2009			At June 30, 2009			At March 31, 2010			At June 30, 2009
	(in millions)						(in millions)
Programming rights	$	3,532		$	3,038		$	3,232		$	3,038
Books, DVDs, paper and other merchandise		427			361			435			361
Filmed entertainment costs:
Films:
Released (including acquired film libraries)		600			533			561			533
Completed, not released		46			137			82			137
In production		874			664			756			664
In development or preproduction		74			73			79			73

		1,594			1,407			1,478			1,407

Television productions:
Released (including acquired libraries)		643			589			585			589
Completed, not released		—			—			—			—
In production		302			256			299			256
In development or preproduction		3			4			6			4

		948			849			890			849

Total filmed entertainment costs, less accumulated amortization^(a)		2,542			2,256			2,368			2,256

Total inventories, net		6,501			5,655			6,035			5,655
Less: current portion of inventory, net^(b)		(2,995	)		(2,477	)		(2,732	)		(2,477	)

Total noncurrent inventories, net	$	3,506		$	3,178		$	3,303		$	3,178


		Ownership Percentage		At December 31, 2009		At June 30, 2009			Ownership Percentage		At March 31, 2010		At June 30, 2009
				(in millions)							(in millions)
Equity method investments:
British Sky Broadcasting Group plc⁽¹⁾	U.K. DBS operator	39	%	$	962	$	877	U.K. DBS operator	39	%	$	1,028	$	877
Sky Deutschland AG⁽¹⁾	German pay-TV operator	40	%⁽²⁾		311		437	German pay-TV operator	45	%⁽²⁾		389		437
Sky Network Television Ltd.⁽¹⁾	New Zealand media company	44	%		336		305	New Zealand media company	44	%		339		305
NDS	Digital technology company	49	%		258		232	Digital technology company	49	%		270		232
Other equity method investments		various			827		707		various			840		707
Fair value of available-for-sale investments		various			237		150		various			244		150
Other investments		various			231		249		various			313		249

				$	3,162	$	2,957				$	3,423	$	2,957

The cost basis, unrealized gains, unrealized losses and fair market value of available-for-sale investments are set forth below:


	At December 31, 2009		At June 30, 2009			At March 31, 2010			At June 30, 2009
	(in millions)					(in millions)
Cost basis of available-for-sale investments	$	37	$	38		$	37		$	38
Accumulated gross unrealized gain		200		113			208			113
Accumulated gross unrealized loss		—		(1	)		(1	)		(1	)

Fair value of available-for-sale investments	$	237	$	150		$	244		$	150

Deferred tax liability	$	70	$	39		$	72		$	39

During the ~~first quarter of fiscal~~nine months ended March 31, 2010, the Company acquired additional shares of Sky Deutschland, increasing its ownership from approximately 38% at June 30, 2009 to approximately ~~40%~~45% at ~~December~~March 31, ~~2009.~~

~~In December 2009,~~2010. The aggregate cost of the ~~Company announced that it had entered into an agreement with Sky Deutschland to subscribe to up to 49~~shares acquired was approximately $200 million inand the majority of the shares were newly registered shares ~~of Sky Deutschland~~issued pursuant to a capital increase. Sky Deutschland completed this capital increase in January 2010 and, accordingly, the Company purchased 49 million newly registered shares of Sky Deutschland at a price of €2.25 per new share for an aggregate cost of approximately $158 million. As a result, News Corporation’s stake in Sky Deutschland increased to approximately 45%.

During fiscal 2009, the Company entered into an agreement with Sky Deutschland and the bank syndicate of Sky Deutschland to provide Sky Deutschland with a new financing structure and additional capital through two equity capital increases. As a result of the rights issues and other transactions, the Company invested an aggregate of approximately $300 million in shares of Sky Deutschland during fiscal 2009 and, as of June 30, 2009, the Company had an approximate 38% ownership interest in Sky Deutschland.

On October 2, 2008, Sky Deutschland announced guidance on its ~~earnings before interest, taxes, depreciation and amortization (“EBITDA”)~~EBITDA indicating results substantially below prior guidance for calendar 2008. Sky Deutschland also announced that it had adopted a new classification of subscribers at September 30, 2008. The day after this announcement, Sky Deutschland experienced a significant decline in its market value. As a result of this decline, the Company’s carrying value in Sky Deutschland exceeded its market value based upon Sky Deutschland’s closing share price of €4.38 on October 3, 2008. The Company believed that this decline was not temporary based on the assessment described below and, accordingly, recorded an impairment charge of $422 million representing the difference between the Company’s carrying value and the market value. The impairment charge was included in Equity earnings (losses) of affiliates in the Company’s unaudited consolidated statements of operations during the ~~six~~nine months ended ~~December~~March 31, ~~2008.~~2009.

In determining if the decline in Sky Deutschland’s market value was other-than-temporary, the Company considered a number of factors: (1) the financial condition, operating performance and near term prospects of Sky Deutschland; (2) the reason for the decline in Sky Deutschland’s fair value; (3) analysts’ ratings and estimates of 12 month share price targets for Sky Deutschland; and (4) the length of time and the extent to which Sky Deutschland’s market value had been less than the carrying value of the Company’s investment.

In August 2008, the Company entered into an agreement providing for the restructuring of the Company’s content acquisition agreements with Balaji Telefilms Ltd (“Balaji”). As part of this restructuring agreement, the Company no longer has representation on Balaji’s board of directors and does not have significant influence in management decisions; therefore, the Company believes that it no longer has the ability to exercise significant influence over Balaji. Accordingly, the Company accounts for its investment in Balaji under the cost method of accounting and the carrying value is adjusted to market value each reporting period as required under ASC 320 “Investments.”

In February 2009, the NDS Transaction was completed, resulting in the Permira Newcos and the Company owning approximately 51% and 49% of NDS, respectively. The Company’s remaining interest in NDS is accounted for under the equity method of accounting. (See Note 2—Acquisitions, Disposals and Other Transactions for further discussion)

The Company regularly reviews cost method investments for impairments based on criteria that include the extent to which the investment’s carrying value exceeds its related market value, the duration of the market decline, the Company’s ability to hold its investment until recovery and the investment’s financial strength and specific prospects. In the nine months ended March 31, 2009, the Company wrote down certain cost method investments by approximately $110 million which is included in other, net in the unaudited consolidated statements of operations. This write-down included an approximate $58 million impairment related to an

investment in a sports and entertainment company and an approximate $38 million impairment related to an investment in a television content production company. The above write-downs were taken as a result of either the deteriorating financial position of the investee or due to a permanent impairment resulting from sustained losses and limited prospects for recovery.

In accordance with ASC 820, fair value measurements are required to be disclosed using a three-tiered fair value hierarchy which distinguishes market participant assumptions into the following categories: (i) inputs that are quoted prices in active markets (“Level 1”); (ii) inputs other than quoted prices included within Level 1 that

are observable, including quoted prices for similar assets or liabilities (“Level 2”); and (iii) inputs that require the entity to use its own assumptions about market participant assumptions (“Level 3”). Additionally, in accordance with ASC 815 “Derivatives and Hedging” (“ASC 815”), the Company has included additional disclosures about the Company’s derivatives and hedging activities (Level 2).

The table below presents information about financial assets and liabilities carried at fair value on a recurring basis as of ~~December~~March 31, ~~2009:~~2010:


Description	Total as of December 31, 2009			Fair Value Measurements at Reporting Date Using								Total			Fair Value Measurements at Reporting Date Using
Description	Total as of December 31, 2009			Quoted Prices in Active Markets for Identical Instruments (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)			Total			Quoted Prices in Active Markets for Identical Instruments (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(in millions)											(in millions)
Assets
Available-for-sale securities⁽¹⁾	$	237		$	237	$	—		$	—		$	244		$	244	$	—	$	—
Liabilities
Derivatives⁽²⁾		(12	)		—		(12	)		—			7			—		7		—
Redeemable noncontrolling interests⁽³⁾		(365	)		—		—			(365	)		(362	)		—		—		(362	)

Total	$	(140	)	$	237	$	(12	)	$	(365	)	$	(111	)	$	244	$	7	$	(362	)

The fair value of the redeemable noncontrolling interest in the Company’s RSN was determined by using a discounted EBITDA valuation model, assuming a 9.5% discount rate.

The fair value of the redeemable noncontrolling interest in the majority–owned outdoor marketing subsidiary was determined using a discounted cash flow analysis assuming a 5% terminal growth rate and a 15% discount rate.

The fair value of the redeemable noncontrolling interest in the Asian general entertainment television joint venture was determined using discounted cash flow analysis assuming a multiple of eight times terminal year EBITDA.

The changes in fair value of liabilities classified as Level 3 measurements during the ~~six~~nine months ended ~~December~~March 31, ~~2009~~2010 were as ~~follows:~~follows (in millions):


	For the six months ended December 31, 2009
	(in millions)
Beginning of period	$	(343	)	$	(343	)
Total gains (losses) included in Net income		(7	)
Total gains (losses) included in net income					(7	)
Total gains (losses) included in other comprehensive income					1
Other		(15	)		(13	)

End of period	$	(365	)	$	(362	)

The carrying value of the Company’s financial instruments, including cash and cash equivalents, receivables, payables and cost investments, approximates fair value.

The aggregate fair value of the Company’s borrowing at ~~December~~March 31, ~~2009~~2010 was approximately ~~$16.3~~$14.7 billion compared with a carrying value of approximately ~~$15.3~~$13.5 billion and, at June 30, 2009, was approximately $13.5 billion compared with a carrying value of approximately $14.3 billion. Fair value is generally determined by reference to market values resulting from trading on a national securities exchange or in an over-the-counter market.

Cash and cash equivalents are maintained with several financial institutions. Deposits held with banks may exceed the amount of insurance provided on such deposits. Generally, these deposits may be redeemed upon demand and are maintained with financial institutions of reputable credit and, therefore, bear minimal credit risk.

The Company’s receivables dodid not represent significant concentrations of credit risk at ~~December~~March 31, ~~2009~~2010 or June 30, 2009 due to the wide variety of customers, markets and geographic areas to which the Company’s products and services are sold.

The Company monitors its positions with, and the credit quality of, the financial institutions which are counterparties to its financial instruments. The Company is exposed to credit loss in the event of nonperformance by the counterparties to the agreements. At ~~December~~March 31, ~~2009,~~2010, the Company did not anticipate nonperformance by any of the counterparties.

~~During the six months ended December 31, 2009, the change~~The changes in the carrying value of goodwill, ~~was~~by segment, are as follows:

During the nine months ended March 31, 2010, goodwill decreased approximately $375 million, primarily due to ~~foreign currency translation adjustments. The change~~disposals resulting in ~~the carrying value~~a reduction of ~~intangible assets during the six months ended December 31, 2009~~$546 million, which was ~~primarily due to amortization expense~~ partially offset by foreign ~~currency translation adjustments.~~exchange fluctuations of $134 million and adjustments of $37 million. The disposals primarily related to the sale of the financial indexes businesses at the Newspapers and Information Services segment resulting in a reduction of $451 million. Adjustments included the final purchase price allocations of $25 million and new acquisitions of $12 million. The final purchase price allocations related to the acquisition of a majority interest in an Asian general entertainment company as part of the formation of the Star Jupiter venture and the acquisition of the VeriSign minority share of the Jamba joint venture.

Intangible assets decreased $439 million during the nine months ended March 31, 2010, primarily due to a reduction of $392 million related to the sale of the financial indexes businesses noted above and amortization expense, which were partially offset by foreign exchange fluctuations.

Company’s Class A common stock, par value $0.01 per share (“Class A Common Stock”), and Class B common stock, par value $0.01 per share (“Class B Common Stock”), below the carrying value of the Company’s stockholders’ equity; (b) the reduced growth in advertising revenues; (c) the decline in the operating profit margins in some of the Company’s advertising-based businesses; and (d) the decline in the valuations of other television stations, newspapers and advertising-based companies as determined by the current trading values of those companies.

As a result of the interim impairment review performed, the Company recorded non-cash impairment charges of approximately $8.4 billion ($6.7 billion, net of tax) in the ~~three and six~~nine months ended ~~December~~March 31, ~~2008.~~2009. The charges consisted of a write-down of the Company’s indefinite-lived intangible assets (primarily Federal Communications Commission licenses in the Television segment) of $4.6 billion, a write-down of $3.6 billion of goodwill and a write-down of the Newspapers and Information Services segment’s fixed assets of $185 million in accordance with ASC 360 “Property, Plant and Equipment.”

On August 25, 2009, News America Incorporated (“NAI”), a 100% owned subsidiary of the Company as defined in Rule 3-10(h) of Regulation S-X, entered into an indenture with the Company, as Guarantor, and The Bank of New York Mellon, as Trustee (the “Indenture”). The following notes were issued pursuant to the Indenture:

In August 2009, NAI issued $400 million of 5.65% Senior Notes due 2020 and $600 million of 6.90% Senior Notes due 2039. The net proceeds received of approximately $989 million will be used for general corporate purposes.

In March 2010, the Company repaid its $150 million 4.75% Senior Debentures due March 2010.

In March 2010, the Company redeemed approximately 98.6% of its 0.75% Senior Exchangeable BUCS (“BUCS”) pursuant to a holders’ redemption right for an aggregate of approximately $1.63 billion in cash. Subsequently, in April 2010, the Company redeemed the remaining outstanding BUCS for an aggregate of approximately $23 million in cash.

In April 2010, the Company redeemed all of its outstanding 5% TOPrS for an aggregate of approximately $134 million in cash.

The Company’s $250 million 6.75% Senior Debentures due January 2038 were puttable, at the option of the holder, to the Company in January 2010. The majority of these debentures were not put to the Company in January 2010 and the outstanding debentures which had been classified as current borrowings as of June 30, 2009 were ~~reclassified~~classified as non-current borrowings as of ~~December~~March 31, ~~2009.~~

NAI’s 0.75% Senior Exchangeable BUCS (“BUCS”) in the amount of $1,641 million are classified as current borrowings. The holders of the BUCS have the right to tender the BUCS for redemption on March 15, 2010 for payment of the adjusted liquidation preference of the BUCS plus accrued and unpaid distributions and any final period distribution in, at the Company’s election, cash, ordinary shares of BSkyB, Class A Common Stock or any combination thereof. The Company may redeem the BUCS for cash, ordinary shares of BSkyB or a combination thereof in whole or in part, at any time on or after March 20, 2010, at the adjusted liquidation preference of the BUCS plus any accrued and unpaid distributions and any final period distribution thereon. On February 1, 2010, the Company announced that NAI gave notice to holders of the BUCS that any BUCS tendered at the option of the holders on the March 15, 2010 holder redemption date would be redeemed for cash at the specified redemption amount equal to $1,013.48 per BUCS, which represents the amount equal to the adjusted liquidation preference of such BUCS plus an amount equal to any accrued and unpaid distributions and any final period distribution.

The Company declared a dividend of $0.06 per share on both the Class A Common Stock and the Class B Common Stock in the three months ended September 30, 2009, which was paid in October 2009 to stockholders of record on September 9, 2009. The total aggregate dividend paid to stockholders in October 2009 was approximately $157 million.

The Company declared a dividend of $0.075 per share on both the Class A Common Stock and the Class B Common Stock in the three months ended March 31, 2010, which was paid in April 2010 to stockholders of record on March 10, 2010. The total aggregate dividend paid to stockholders in April 2010 was approximately $196 million.

The following table summarizes the Company’s equity-based compensation transactions:


	For the three months ended December 31,				For the six months ended December 31,				For the three months ended March 31,				For the nine months ended March 31,
	2009		2008		2009		2008		2010		2009		2010		2009
	(in millions)								(in millions)
Equity-based compensation	$	35	$	33	$	80	$	82	$	40	$	42	$	120	$	115

Cash received from exercise of equity-based compensation	$	—	$	—	$	21	$	3	$	1	$	—	$	22	$	3

At ~~December~~March 31, ~~2009,~~2010, the Company’s total compensation cost related to non-vested stock options, restricted stock units (“RSUs”) and stock appreciation rights not yet recognized for all equity-based compensation plans was approximately ~~$204~~$202 million, the majority of which is expected to be recognized over the next three fiscal years. Compensation expense on all equity-based awards is generally recognized on a straight-line basis over the vesting period of the entire award.

Stock options exercised during the ~~six~~nine months ended ~~December~~March 31, ~~2009~~2010 and ~~2008~~2009 resulted in the Company’s issuance of approximately 1.8 million and 0.2 million shares of Class A Common Stock, respectively. The intrinsic value of the stock options exercised during the three and ~~six~~nine months ended ~~December~~March 31, 2010 and 2009 ~~and 2008 were~~was not material.

During the ~~six~~nine months ended ~~December~~March 31, ~~2009,~~2010, the Company issued ~~5.6~~approximately 5.9 million RSUs. These RSUs will be settled in shares of Class A Common Stock upon vesting, except for approximately 0.9 million RSUs that will be settled in cash. RSUs granted to executive directors and certain awards granted to employees in certain foreign locations are settled in cash. At ~~December~~March 31, ~~2009~~2010 and June 30, 2009, the liability for cash-settled RSUs was approximately $39 million and $52 million, respectively.

During the ~~six~~nine months ended ~~December~~March 31, 2010 and 2009, ~~and 2008,~~ approximately ~~9.2~~9.8 million and ~~8.3~~8.7 million RSUs vested, respectively, of which approximately ~~7.0~~7.5 million and ~~6.7~~6.9 million, respectively, were settled in Class A Common Stock, before statutory tax withholdings. The fair value of RSUs settled in Class A Common Stock was ~~$76~~approximately $83 million and ~~$91~~$93 million for the ~~six~~nine months ended ~~December~~March 31, ~~2009~~2010 and ~~2008,~~2009, respectively. The remaining ~~2.2~~2.3 million and ~~1.6~~1.8 million RSUs settled during the ~~six~~nine months ended ~~December~~March 31, ~~2009~~2010 and ~~2008,~~2009, respectively, were settled in cash, before statutory tax withholdings, of approximately ~~$23~~$24 million in each period.

The Company recognized a tax expense on vested RSUs and stock options exercised of approximately $9 million and $5$4 million for the ~~six~~nine months ended ~~December~~March 31, 2010 and 2009, ~~and 2008,~~ respectively.

During the ~~six~~nine months ended ~~December~~March 31, ~~2009,~~2010, the Company renewed its rights to broadcast Italy’s National League Football matches through fiscal 2012. The Company expects to pay approximately $1.7 billion over the term of the agreement.

During the ~~second quarter of fiscal~~nine months ended March 31, 2010, the Company entered into a long-term supply contract pursuant to which the Company will purchase ink for its newspaper printing facilities in the United Kingdom from a third party through fiscal 2022. The Company will pay approximately $400 million over the term of the contract.

On January 30, 2010, the Company announced that its News America Marketing unit had settled its litigation with Valassis Communications, Inc. (“Valassis”) for $500 million. The Company expects to pay this amount in fiscal 2010.

Other than as previously disclosed in these notes to the Company’s unaudited consolidated financial statements, the Company’s commitments have not changed significantly from disclosures included in the ~~2009~~Company’s Current Report filed on Form ~~10-K.~~8-K filed with the SEC on February 12, 2010.

~~The~~Other than as previously disclosed in these notes to the Company’s unaudited consolidated financial statements, the Company’s guarantees have not changed significantly from disclosures included in the ~~2009~~Company’s Current Report filed on Form ~~10-K.~~8-K filed with the SEC on February 12, 2010.

On August 26, 2005 and August 30, 2005, two purported class action lawsuits captioned, respectively,Ron Sheppard v. Richard Rosenblatt et. al.,, andJohn Friedmann v. Intermix Media, Inc. et al.,, were filed in the California Superior Court, County of Los Angeles. Both lawsuits named as defendants all of the then incumbent members of the Intermix Board, including Mr. Rosenblatt, Intermix’s former Chief Executive Officer, and certain entities affiliated with VantagePoint Venture Partners (“VantagePoint”), a former major Intermix stockholder. The complaints alleged that, in pursuing the transaction whereby Intermix was to be acquired by Fox Interactive Media, a subsidiary of the Company (the “FIM Transaction”) and approving the related merger agreement, the director defendants breached their fiduciary duties to Intermix stockholders by, among other things, engaging in self-dealing and failing to obtain the highest price reasonably available for Intermix and its stockholders. The complaints further alleged that the merger agreement resulted from a flawed process and that the defendants tailored the terms of the merger to advance their own interests. The FIM Transaction was consummated on September 30, 2005. TheFriedmann andSheppard lawsuits were subsequently consolidated and, on January 17, 2006, a consolidated amended complaint was filed (the “Intermix Media Shareholder Litigation”). The plaintiffs in the consolidated action sought various forms of declaratory relief, damages, disgorgement and fees and costs. On March 20, 2006, the court ordered that substantially identical claims asserted in a separate state action filed by Brad Greenspan, captionedGreenspan v.Intermix Media, Inc., et al.,be severed and related to theIntermix Media Shareholder Litigation. The defendants filed demurrers seeking dismissal of all claims in theIntermix Media Shareholder Litigation and the severed Greenspan claims. On October 6, 2006, the court sustained the demurrers without leave to amend. On December 13, 2006, the court dismissed the complaints and entered judgment for the defendants. Greenspan and plaintiffs in theIntermix Media Shareholder Litigation filed notices of appeal. The Court of Appeal heard arguments on the fully briefed appeal on October 23, 2008. On November 11, 2008, the Court of Appeal issued an unpublished opinion

affirming the lower court’s dismissal on all counts. On December 19, 2008, shareholder appellants filed a Petition for Review with the California Supreme Court. After the lower court sustained the demurrers in theIntermix MediaShareholder Litigation, co-counsel for certain of the plaintiffs moved for an award of attorneys’ fees and costs under a common law substantial benefit theory. On October 4, 2007, the court granted the motion and denied defendants’ application to tax costs. After defendants filed a notice of appeal, the matter was resolved.

In November 2005, plaintiff in a derivative action captionedLeBoyer v. Greenspan et al.pending against various former Intermix directors and officers in the United States District Court for the Central District of California filed a First Amended Class and Derivative Complaint (the “Amended Complaint”). The original derivative action was filed in May 2003 and arose out of Intermix’s restatement of quarterly financial results for its fiscal year ended March 31, 2003. A substantially similar derivative action filed in Los Angeles Superior Court was dismissed based on the inability of the plaintiffs to plead adequately demand futility. Plaintiff

LeBoyer’s November 2005 Amended Complaint added various allegations and purported class claims arising out of the FIM Transaction that are substantially similar to those asserted in theIntermix Media Shareholder Litigation. The Amended Complaint also added as defendants the individuals and entities named in theIntermix Media Shareholder Litigationthat were not already defendants in the matter. On October 16, 2006, the court dismissed the fourth through seventh claims for relief, which related to the 2003 restatement, finding that the plaintiff is precluded from relitigating demand futility. At the same time, the court asked for further briefing regarding plaintiffs’ standing to assert derivative claims based on the FIM Transaction, including for alleged violation of Section 14(a) of the Exchange Act, the effect of the state judge’s dismissal of the claims in theGreenspancase and theIntermix Media Shareholder Litigationon the remaining direct class action claims alleging breaches of fiduciary duty and other common law claims leading up to the FIM Transaction. The parties filed the requested additional briefing in which the defendants requested that the court stay the direct LeBoyer claims pending the resolution of any appeal in theGreenspancase and theIntermix Media Shareholder Litigation. By order dated May 22, 2007, the court granted defendants’ motion to dismiss the derivative claims arising out of the FIM Transaction, and denied the defendants’ request to stay the two remaining direct claims. As explained in more detail in the next paragraph, the court subsequently consolidated this case with theBrown v. Breweraction also pending before the court. On July 11, 2007, plaintiffs filed the consolidated first amended complaint under theBrowncase title. See the discussion of theBrowncase below for the subsequent developments in the consolidated case.

On June 14, 2006, a purported class action lawsuit, captionedJim Brown v. Brett C. Brewer, et al., was filed against certain former Intermix directors and officers in the United States District Court for the Central District of California. The plaintiff asserted claims for alleged violations of Section 14a of the Exchange Act and SEC Rule 14a-9, as well as control person liability under Section ~~20a.~~20a of the Exchange Act. The plaintiff alleged that certain defendants disseminated false and misleading definitive proxy statements on two occasions: one on December 30, 2003 in connection with the shareholder vote on January 29, 2004 on the election of directors and ratification of financing transactions with certain entities of VantagePoint; and another on August 25, 2005 in connection with the shareholder vote on the FIM Transaction. The complaint named as defendants certain VantagePoint related entities, the former general counsel and the members of the Intermix Board who were incumbent on the dates of the respective proxy statements. Intermix was not named as a defendant, but has certain indemnity obligations to the former officer and director defendants in connection with these claims and allegations. On August 25, 2006, plaintiff amended his complaint to add certain investment banks (the “Investment Banks”) as defendants. Intermix has certain indemnity obligations to the Investment Banks as well. Plaintiff amended his complaint again on September 27, 2006, which defendants moved to dismiss. On February 9, 2007, the case was transferred to Judge George H. King, the judge assigned to theLeBoyeraction, on the grounds that it raises substantially related questions of law and fact asLeBoyer, and would entail substantial duplication of labor if heard by

different judges. On June 11, 2007, Judge King ordered theBrowncase be consolidated with theLeBoyeraction, ordered plaintiffs’ counsel to file a consolidated first amended complaint, and further ordered the parties to file a joint brief on defendants’ contemplated motion to dismiss the consolidated first amended complaint. On July 11, 2007, plaintiffs filed the consolidated first amended complaint, which defendants moved to dismiss. By order dated January 17, 2008, Judge King granted defendants’ motion to dismiss the 2003 proxy claims (concerning VantagePoint transactions) and the 2005 proxy claims (concerning the FIM Transaction), as well as a claim against the VantagePoint entities alleging unjust enrichment. The court found it unnecessary to rule on dismissal of the remaining claims, which are related to the 2005 FIM Transaction, because the dismissal disposed of those claims. On February 8, 2008, plaintiffs filed a consolidated second amended complaint, which defendants moved to dismiss on February 28, 2008. By order dated July 15, 2008, the court granted in part and denied in part defendants’ motion to dismiss. The 2003 claims and the claims against the Investment Banks were dismissed with prejudice. The Section 14a, Section 20a and the breach of fiduciary duty claims related to the FIM Transaction remain against the officer and director defendants and the VantagePoint defendants. On October 6, 2008, defendants filed a partial motion for summary judgment

seeking dismissal of the Section 14a, Section 20 and state law disclosure claims. On November 10, 2008, Judge King denied the motion without prejudice. On November 14, 2008, plaintiff filed a motion for class certification to which defendants filed their opposition on January 14, 2009. On June 22, 2009, the court granted plaintiff’s motion for class certification, certifying a class of all holders of Intermix Media, Inc. common stock, from July 18, 2005 through consummation of the FIM Transaction, who were allegedly harmed by defendants’ improper conduct as set forth in the complaint. The parties have completed fact and expert discovery. Defendants’ motion for summary judgment was filed on October 19, 2009. Defendants also filed a motion to exclude plaintiff’s damages expert on November 30, 2009. The court has taken both motions under submission. No trial date has been set yet.

On January 18, 2006, Valassis ~~filed a complaint against~~Communication, Inc. (“Valassis”) sued News America Incorporated, News America Marketing FSI, LLC and News America Marketing Services, In-Store, LLC, each of which are subsidiaries of the Company (collectively “News America”), in the United States District Court for the Eastern District of ~~Michigan. Valassis alleges~~Michigan (the “Valassis Federal Action”). Valassis’s operative complaint alleged that News America possesses monopoly power in a claimed in-store advertising and promotions market (the “in-store market”) and has used that power to gain an unfair advantage over Valassis in a purported market for coupons distributed by free-standing inserts (“FSIs”). Valassis ~~alleges~~alleged that News America is attempting to monopolize the purported FSI market by leveraging its alleged monopoly power in the purported in-store market, thereby allegedly violating Section 2 of the Sherman Antitrust Act of 1890, as amended (the “Sherman Act”). Valassis further ~~alleges~~alleged that News America has unlawfully bundled the sale of in-store marketing products with the sale of FSIs and that such bundling constitutes unlawful tying in violation of Sections 1 and 3 of the Sherman Act. Additionally, Valassis ~~alleges~~alleged that News America is predatorily pricing its FSI products in violation of Section 2 of the Sherman Act. Valassis also ~~asserts~~asserted that News America violated various state antitrust statutes and has tortuously interfered with Valassis’ actual or expected business relationships. Valassis’ complaint ~~seeks~~sought injunctive relief, damages, fees and costs. On April 20, 2006, News America moved to dismiss Valassis’ complaint in its entirety for failure to state a cause of action. On September 28, 2006, the Magistrate Judge issued a Report and Recommendation granting the motion. On October 16, 2006, Valassis filed an amended complaint, alleging the same causes of action. On November 17, 2006, News America answered the three federal antitrust claims and moved to dismiss the remaining nine state law claims. On March 23, 2007, the court granted News America’s motion and dismissed the nine state law claims. The parties engaged in discovery, which was combined with the California and Michigan state cases discussed below, and is now completed. The parties have exchanged expert reports. On September 3, 2009, the court denied the parties’ cross- motions for summary judgment. Trial was set to commence on February 2, 2010.

On March 9, 2007, Valassis filed a two-count complaint in Michigan state court against News ~~America.~~America (the “Valassis Michigan Action”). That ~~complaint,~~lawsuit, which was based on the same factual allegations as the ~~federal complaint discussed above and the California state court complaint discussed below,~~Valassis Federal Action, alleged that News America tortuously interfered with Valassis’ business relationships and that News America unfairly competed with Valassis. The complaint sought injunctive relief, damages, fees and costs. On May 4, 2007, News America filed a motion to dismiss or, in the alternative stay, that complaint. On August 14, 2007, the court denied the motion. On July 7, 2008, Valassis filed an amended complaint alleging the same causes of action, based on essentially the same factual allegations and seeking the same relief. News America moved to dismiss the amended complaint and on October 10, 2008, the court denied the motion. The parties completed discovery, which was combined with the federal case discussed above and the California state case discussed below. The court denied News America’s motion for summary judgment in January 2009. Trial commenced on May 27, 2009. On July 23, 2009, a jury in the Michigan state court returned a verdict in the amount of $300 million for Valassis. News America filed a motion for new trial, which was denied. News America filed an appeal and posted a bond for $25 million, the maximum bond required under Michigan law.

On March 12, 2007, Valassis filed a three-count complaint in California state court against News ~~America.~~America (the “Valassis California Action”). That ~~complaint,~~lawsuit, which is based on the same factual allegations as the ~~federal~~Valassis Federal and Michigan ~~state court complaints discussed above, alleges~~Actions, alleged that News America ~~has~~ violated the Cartwright Act (California’s state antitrust law) by unlawfully tying its FSI products to its in-store products, ~~has~~ violated California’s Unfair Practices Act by predatorily pricing its FSI products, and ~~has~~ unfairly competed with Valassis. ~~Valassis’~~The Valassis California ~~complaint seeks~~Action sought injunctive relief, damages, fees and costs. On May 4, 2007, News America filed a motion to dismiss or, in the alternative stay, that complaint. On June 28, 2007, the court issued a tentative ruling denying the motion and reassigned the case to the Complex Litigation Program. On July 19, 2007, the court denied the motion. The Valassis California ~~state court case~~Action was stayed until March 2010.

Trial in the Valassis Michigan Action commenced on May 27, 2009. On July 23, 2009, a jury returned a verdict in the amount of $300 million for Valassis. News America filed a motion for new trial, which was denied. News America filed an appeal and posted a bond for $25 million, the maximum bond required under Michigan law.

Trial in the Valassis Federal Action was set to commence on February 2, 2010. As a result of pretrial proceedings and negotiations that occurred in late January 2010 related to the ~~complaint filed against News America in the United States District Court for the Eastern District of Michigan,~~Valassis Federal Action, on January 30, 2010, the Company announced that News America had reached a settlement agreement with Valassis pursuant to which all claims filed by Valassis in all matters ~~listed above will be~~have been dismissed with prejudice. The United States District Court for the Eastern District of Michigan oversaw the settlement discussions and approved the terms of the settlement. As part of the settlement, News America ~~will pay~~paid Valassis $500 million and ~~enter~~entered into a ten-year shared mail distribution agreement with Valassis Direct Mail, a Valassis subsidiary. Additionally, the parties ~~will~~ also ~~agree~~have agreed to ~~mutual~~a process by which the United States District Court for the Eastern District of Michigan may assess certain future business practices ~~that will require the parties to adhere to certain antitrust laws.~~of News America and Valassis. In connection with the settlement, the Valassis Federal Action has been dismissed with prejudice. In addition, the judgment in the Valassis Michigan ~~state court case~~Action from July 2009 ~~will be~~has been satisfied with all related appeals ~~dismissed. In addition,~~dismissed, and the Valassis California ~~state court case will be~~Action has been dismissed with prejudice.

As a result of the settlement, the Company ~~has~~ recorded a charge of $500 million in the ~~three and six~~nine months ended ~~December~~March 31, ~~2009.~~2010. The cost of the new distribution agreement, which ~~will be~~was entered into on a fair value basis, will be accounted for prospectively, consistent with the accounting for other similar agreements.

Other than as previously disclosed in the notes to the Company’s unaudited consolidated financial statements, the Company is party to several purchase and sale arrangements which become exercisable over the next ten years by the Company or the counter-party to the agreement. In the next twelve months, none of these arrangements that become exercisable are material to the Company.

The Company experiences routine litigation in the normal course of its business. ~~On January 30, 2010, the Company announced that its News America Marketing unit had settled its previously reported litigation with Valassis for $500 million.~~ The Company believes that none of its ~~other~~ pending litigation will have a material adverse effect on its consolidated financial condition, future results of operations or liquidity.

The Company’s operations are subject to tax in various domestic and international jurisdictions and as a matter of course, the Company is regularly audited by federal, state and foreign tax authorities. The Company believes it has appropriately accrued for the expected outcome of all pending tax matters and does not currently anticipate that the ultimate resolution of pending tax matters will have a material adverse effect on its consolidated financial condition, future results of operations or liquidity.

The Company sponsors non-contributory pension plans and retiree health and life insurance benefit plans covering specific groups of employees. As of January 1, 2008, the Company’s major pension plans are closed to new participants (with the exception of groups covered by collective bargaining agreements). The benefits payable for the Company’s non-contributory pension plans are based primarily on a formula factoring both an employee’s years of service and pay near retirement. Participant employees are vested in the pension plans after five years of service. The Company’s policy for all pension plans is to fund amounts, at a minimum, in accordance with statutory requirements. Plan assets consist principally of common stocks, marketable bonds and government securities. The retiree health and life insurance benefit plans offer medical and/or life insurance to certain full-time employees and eligible dependents that retire after fulfilling age and service requirements.


	Pension Benefits						Postretirement Benefits						Pension Benefits						Postretirement Benefits
	For the three months ended December 31,												For the three months ended March 31,
	2009			2008			2009			2008			2010			2009			2010			2009
	(in millions)												(in millions)
Service cost benefits earned during the period	$	18		$	18		$	1		$	2		$	17		$	18		$	2		$	1
Interest costs on projected benefit obligation		43			41			5			5			42			40			4			6
Expected return on plan assets		(35	)		(38	)		—			—			(34	)		(36	)		—			—
Amortization of deferred losses		10			4			—			—			11			4			—			—
Other		2			1			(4	)		(1	)		1			4			(4	)		(2	)

Net periodic costs	$	38		$	26		$	2		$	6		$	37		$	30		$	2		$	5

Cash contributions	$	9		$	13		$	4		$	4		$	23		$	52		$	5		$	4


	For the six months ended December 31,												For the nine months ended March 31,
	2009			2008			2009			2008			2010			2009			2010			2009
	(in millions)												(in millions)
Service cost benefits earned during the period	$	36		$	38		$	2		$	4		$	53		$	56		$	4		$	5
Interest costs on projected benefit obligation		86			84			10			10			128			124			14			16
Expected return on plan assets		(70	)		(77	)		—			—			(104	)		(113	)		—			—
Amortization of deferred losses		20			8			—			—			31			12			—			—
Other		3			1			(8	)		(5	)		4			5			(12	)		(7	)

Net periodic costs	$	75		$	54		$	4		$	9		$	112		$	84		$	6		$	14

Cash contributions	$	23		$	32		$	8		$	8		$	46		$	85		$	13		$	12

The Company is a diversified global media company, which manages and reports its businesses in eight segments. During the first quarter of fiscal 2010, the Company reclassified STAR, which develops, produces and distributes television programming in Asia, from the Television segment to the Cable Network Programming segment. This reclassification was the result of a restructuring to combine the sales and distribution operations of the STAR channels with those of the Company’s other international cable businesses. In addition, the Magazines and Inserts segment ~~has been~~was renamed the Integrated Marketing Services segment. The Company has revised its segment information for prior fiscal years to conform to the fiscal 2010 presentation. Beginning in fiscal 2010, the Company’s eight segments are:

Filmed Entertainment, which principally consists of the production and acquisition of live-action and animated motion pictures for distribution and licensing in all formats in all entertainment media worldwide, and the production and licensing of television programming worldwide.

Television, which principally consists of the broadcasting of network programming in the United States and the operation of 27 full power broadcast television stations, including nine duopolies, in the United States (of these stations, 17 are affiliated with the FOX network and ten are affiliated with the MyNetworkTV ~~network)~~programming distribution service).

Cable Network Programming, which principally consists of the production and licensing of programming distributed through cable television systems and direct broadcast satellite operators primarily in the United States, Latin America, Europe and Asia.

Integrated Marketing Services, which principally consists of the publication of free-standing inserts, which are promotional booklets containing consumer offers distributed through insertion in local Sunday newspapers in the United States, and the provision of in-store marketing products and services, primarily to consumer packaged goods manufacturers in the United States and Canada.

Newspapers and Information Services,which principally consists of the publication of four national newspapers in the United Kingdom, the publication of approximately 146 newspapers in Australia, the publication of a metropolitan newspaper and a national newspaper (with international editions) in the United States and the provision of information services.

The Company’s operating segments have been determined in accordance with the Company’s internal management structure, which is organized based on operating activities. The Company evaluates performance based upon several factors, of which the primary financial measures are segment operating income (loss) and segment operating income (loss) before depreciation and amortization.

Segment operating income (loss) does not include: Impairment and restructuring charges, equity earnings (losses) of affiliates, interest expense, net, interest income, other, net, income tax expense and net income attributable to noncontrolling interests. The Company believes that information about segment operating income (loss) assists all users of the Company’s consolidated financial statements by allowing them to evaluate changes in the operating results of the Company’s portfolio of businesses separate from non-operational factors that affect net income, thus providing insight into both operations and the other factors that affect reported results.

Segment operating income (loss) before depreciation and amortization is defined as segment operating income (loss) plus depreciation and amortization and the amortization of cable distribution investments and eliminates the variable effect across all business segments of depreciation and amortization. Depreciation and amortization expense includes the depreciation of property and equipment, as well as amortization of finite-lived intangible assets. Amortization of cable distribution investments represents a reduction against revenues over the term of a carriage arrangement and, as such, it is excluded from segment operating income (loss) before depreciation and amortization.

Total segment operating income and segment operating income (loss) before depreciation and amortization are non-GAAP measures 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, these measures do not reflect cash available to fund requirements. These measures exclude items, such as impairment and restructuring charges, which are significant components in assessing the Company’s financial performance. Segment operating income (loss) before depreciation and amortization also excludes depreciation and amortization which are also significant components in assessing the Company’s financial performance.

Management believes that total segment operating income and segment operating income (loss) before depreciation and amortization are appropriate measures for evaluating the operating performance of the Company’s business. Total segment operating income and segment operating income (loss) before depreciation

~~Company’s business. Total segment operating income and segment operating income (loss) before depreciation~~ and amortization provide management, investors and equity analysts measures to analyze operating performance of the Company’s business and its enterprise value against historical data and competitors’ data, although historical results, including total segment operating income and segment operating income (loss) before depreciation and amortization, may not be indicative of future results (as operating performance is highly contingent on many factors, including customer tastes and preferences).


	For the three months ended December 31,						For the six months ended December 31,						For the three months ended March 31,						For the nine months ended March 31,
	2009			2008			2009			2008			2010			2009			2010			2009
	(in millions)												(in millions)
Revenues:
Filmed Entertainment	$	1,898		$	1,485		$	3,419		$	2,744		$	2,422		$	1,472		$	5,841		$	4,216
Television		1,248			1,135			2,013			1,964			1,168			1,149			3,181			3,113
Cable Network Programming		1,756			1,492			3,362			2,946			1,798			1,550			5,160			4,496
Direct Broadcast Satellite Television		1,008			922			1,935			1,891			954			924			2,889			2,815
Integrated Marketing Services		291			284			558			543			335			316			893			859
Newspapers and Information Services		1,655			1,505			3,058			3,210			1,505			1,248			4,563			4,458
Book Publishing		381			305			691			620			276			243			967			863
Other		447			743			847			1,462			327			471			1,174			1,933

Total revenues	$	8,684		$	7,871		$	15,883		$	15,380		$	8,785		$	7,373		$	24,668		$	22,753

Segment operating income (loss):
Filmed Entertainment	$	324		$	112		$	715		$	363		$	497		$	282		$	1,212		$	645
Television		29			(2	)		67			82			40			9			107			91
Cable Network Programming		604			448			1,117			798			588			426			1,705			1,224
Direct Broadcast Satellite Television		(30	)		10			98			175			35			63			133			238
Integrated Marketing Services		(414	)		86			(341	)		154			108			97			(233	)		251
Newspapers and Information Services		259			200			284			341			131			29			415			370
Book Publishing		65			23			85			26			4			(8	)		89			18
Other		(125	)		(38	)		(251	)		(139	)		(150	)		(88	)		(401	)		(227	)

Total segment operating income		712			839			1,774			1,800			1,253			810			3,027			2,610

Impairment and restructuring charges		(10	)		(8,465	)		(30	)		(8,473	)		(6	)		(55	)		(36	)		(8,528	)
Equity earnings (losses) of affiliates		58			30			90			(329	)		181			(40	)		271			(369	)
Interest expense, net		(269	)		(231	)		(514	)		(452	)		(247	)		(238	)		(761	)		(690	)
Interest income		16			20			41			60			20			16			61			76
Other, net		(86	)		(98	)		(98	)		206			(45	)		1,132			(143	)		1,338

Income (loss) before income tax expense		421			(7,905	)		1,263			(7,188	)		1,156			1,625			2,419			(5,563	)
Income tax (expense) benefit		(137	)		1,514			(382	)		1,333			(295	)		1,103			(677	)		2,436

Net income (loss)		284			(6,391	)		881			(5,855	)		861			2,728			1,742			(3,127	)
Less: Net income attributable to noncontrolling interests		(30	)		(26	)		(56	)		(47	)		(22	)		(1	)		(78	)		(48	)

Net income (loss) attributable to News Corporation stockholders	$	254		$	(6,417	)	$	825		$	(5,902	)	$	839		$	2,727		$	1,664		$	(3,175	)

Intersegment revenues, generated primarily by the Filmed Entertainment segment, of approximately ~~$249~~$255 million and ~~$273~~$285 million for the three months ended ~~December~~March 31, ~~2009~~2010 and ~~2008,~~2009, respectively, and of approximately ~~$389~~$644 million and ~~$443~~$728 million for the ~~six~~nine months ended ~~December~~March 31, ~~2009~~2010 and ~~2008,~~2009, respectively, have been eliminated within the Filmed Entertainment segment. Intersegment operating (loss) profit generated primarily by the Filmed Entertainment segment of approximately $(7) million and $3 million for the three months ended March 31,

~~generated primarily by the Filmed Entertainment segment of approximately $17 million~~2010 and ~~$32 million for the three months ended December 31,~~ 2009, ~~and 2008,~~ respectively, and of approximately ~~$12~~$5 and ~~$34~~$37 million for the ~~six~~nine months ended ~~December~~March 31, ~~2009~~2010 and ~~2008,~~2009, respectively, have been eliminated within the Filmed Entertainment segment.


	For the six months ended December 31, 2009										For the three months ended March 31, 2010
	Segment operating income (loss)			Depreciation and amortization		Amortization of cable distribution investments		Segment operating income (loss) before depreciation and amortization			Segment operating income (loss)			Depreciation and amortization		Amortization of cable distribution investments		Segment operating income (loss) before depreciation and amortization
	(in millions)										(in millions)
Filmed Entertainment	$	715		$	46	$	—	$	761		$	497		$	23	$	—	$	520
Television		67			41		—		108			40			21		—		61
Cable Network Programming		1,117			78		45		1,240			588			37		19		644
Direct Broadcast Satellite Television		98			138		—		236			35			70		—		105
Integrated Marketing Services		(341	)		5		—		(336	)		108			3		—		111
Newspapers and Information Services		284			177		—		461			131			90		—		221
Book Publishing		85			8		—		93			4			4		—		8
Other		(251	)		103		—		(148	)		(150	)		46		—		(104	)

Total	$	1,774		$	596	$	45	$	2,415		$	1,253		$	294	$	19	$	1,566


											For the three months ended March 31, 2009
											Segment operating income (loss)			Depreciation and amortization		Amortization of cable distribution investments		Segment operating income (loss) before depreciation and amortization
											(in millions)
Filmed Entertainment											$	282		$	22	$	—	$	304
Television												9			21		—		30
Cable Network Programming												426			38		22		486
Direct Broadcast Satellite Television												63			59		—		122
Integrated Marketing Services												97			3		—		100
Newspapers and Information Services												29			74		—		103
Book Publishing												(8	)		2		—		(6	)
Other												(88	)		55		—		(33	)

Total											$	810		$	274	$	22	$	1,106


											For the nine months ended March 31, 2010
											Segment operating income (loss)			Depreciation and amortization		Amortization of cable distribution investments		Segment operating income (loss) before depreciation and amortization
											(in millions)
Filmed Entertainment											$	1,212		$	69	$	—	$	1,281
Television												107			62		—		169
Cable Network Programming												1,705			115		64		1,884
Direct Broadcast Satellite Television												133			208		—		341
Integrated Marketing Services												(233	)		8		—		(225	)
Newspapers and Information Services												415			267		—		682
Book Publishing												89			12		—		101
Other												(401	)		149		—		(252	)

Total											$	3,027		$	890	$	64	$	3,981


	For the six months ended December 31, 2008									For the nine months ended March 31, 2009
	Segment operating income (loss)			Depreciation and amortization		Amortization of cable distribution investments		Segment operating income before depreciation and amortization		Segment operating income (loss)			Depreciation and amortization		Amortization of cable distribution investments		Segment operating income (loss) before depreciation and amortization
	(in millions)									(in millions)
Filmed Entertainment	$	363		$	46	$	—	$	409	$	645		$	68	$	—	$	713
Television		82			40		—		122		91			61		—		152
Cable Network Programming		798			62		42		902		1,224			100		64		1,388
Direct Broadcast Satellite Television		175			116		—		291		238			175		—		413
Integrated Marketing Services		154			5		—		159		251			8		—		259
Newspapers and Information Services		341			166		—		507		370			240		—		610
Book Publishing		26			4		—		30		18			6		—		24
Other		(139	)		140		—		1		(227	)		195		—		(32	)

Total	$	1,800		$	579	$	42	$	2,421	$	2,610		$	853	$	64	$	3,527


	At December 31, 2009		At June 30, 2009		At March 31, 2010		At June 30, 2009
	(in millions)				(in millions)
Total assets:
Filmed Entertainment	$	7,662	$	7,042	$	7,660	$	7,042
Television		6,986		6,378		6,594		6,378
Cable Network Programming		11,820		11,688		11,888		11,688
Direct Broadcast Satellite Television		3,043		2,647		2,815		2,647
Integrated Marketing Services		1,364		1,346		1,403		1,346
Newspapers and Information Services		11,015		10,741		10,176		10,741
Book Publishing		1,654		1,582		1,531		1,582
Other		9,427		8,740		9,538		8,740
Investments		3,162		2,957		3,423		2,957

Total assets	$	56,133	$	53,121	$	55,028	$	53,121

Goodwill and Intangible assets, net:
Filmed Entertainment	$	1,901	$	1,917	$	1,893	$	1,917
Television		4,310		4,310		4,310		4,310
Cable Network Programming		6,863		6,912		6,870		6,912
Direct Broadcast Satellite Television		629		617		587		617
Integrated Marketing Services		1,036		1,034		1,038		1,034
Newspapers and Information Services		6,222		6,050		5,422		6,050
Book Publishing		503		511		516		511
Other		1,894		1,956		1,857		1,956

Total goodwill and intangible assets, net	$	23,358	$	23,307	$	22,493	$	23,307


	For the six months ended December 31,						For the nine months ended March 31,
	2009			2008			2010			2009
	(in millions)						(in millions)
Supplemental cash flows information:
Cash paid for income taxes	$	(482	)	$	(774	)	$	(632	)	$	(995	)
Cash paid for interest		(468	)		(439	)		(699	)		(604	)
Sale of other investments		15			12			15			12
Purchase of other investments		(79	)		(45	)		(121	)		(77	)

Supplemental information on businesses acquired:
Fair value of assets acquired		22			228			139			638
Cash acquired		3			—			5			2
Liabilities assumed		72			94			(6	)		76
Noncontrolling interest (increase) decrease		(1	)		140			(1	)		62
Cash paid		(96	)		(462	)		(137	)		(778	)

Fair value of stock consideration	$	—		$	—		$	—		$	—


	For the three months ended December 31,						For the six months ended December 31,						For the three months ended March 31,						For the nine months ended March 31,
	2009			2008			2009			2008			2010			2009			2010			2009
	(in millions)												(in millions)
Loss on the financial indexes business transactions^(a)													$	(22	)	$	—		$	(22	)	$	—
Loss on the sale of eastern European television stations^(a)														(21	)		—			(40	)		(100	)
Loss on the Photobucket transaction^(a)	$	(29	)	$	—		$	(29	)	$	—			—			—			(29	)		—
Gain on the sale of NDS shares^(a)														—			1,249			—			1,249
Gain on the sale of the Stations^(a)		—			—			—			232			—			—			—			232
Loss on the sale of eastern European television stations^(a)		(19	)		(100	)		(19	)		(100	)
Change in fair value of exchangeable securities and other financial instruments^(b)		—			14			(4	)		76
Impairment of cost based investments^(b)														—			(110	)		(3	)		(110	)
Change in fair value of exchangeable securities^(c)														7			1			3			79
Other		(38	)		(12	)		(46	)		(2	)		(9	)		(8	)		(52	)		(12	)

Total Other, net	$	(86	)	$	(98	)	$	(98	)	$	206		$	(45	)	$	1,132		$	(143	)	$	1,338

In ~~preparation of its consolidated financial statements,~~April 2010, the Company ~~considered subsequent events through February 3, 2010, which was~~sold bTV, its Bulgarian terrestrial TV business, for cash consideration of approximately $375 million, net of expenses. The Company expects to record a gain on the ~~date the Company’s consolidated financial statements were issued.~~

~~In December 2009, the Company announced that it had entered into an agreement with Sky Deutschland to subscribe to up to 49 million in newly registered shares~~sale of ~~Sky Deutschland pursuant to a capital increase. Sky Deutschland completed this capital increase in January 2010 and, accordingly, the Company purchased~~bTV.

49 million newly registered shares of Sky Deutschland at a price of €2.25 per new share for an aggregate cost of approximately $158 million. As a result, News Corporation’s stake in Sky Deutschland increased to approximately 45%.

In January 2010, the Company sold its 33% interest in STOXX, Ltd. (“STOXX”), a European market index provider, for approximately $300 million in cash and additional consideration of up to approximately $40 million conditioned upon STOXX achieving specific performance objectives.

~~On January 30, 2010, the Company announced that its News America Marketing unit had settled its litigation with Valassis for $500 million.~~

A dividend of $0.075 per share of Class A Common Stock and Class B Common Stock has been declared and is payable on April 14, 2010. The record date for determining dividend entitlements is March 10, 2010.

In May 2007, NAI, a 100% owned subsidiary of the Company as defined in Rule 3-10(h) of Regulation S-X, entered into a credit agreement, among NAI as Borrower, the Company as Parent Guarantor, the initial lenders named therein (the “Lenders”), Citibank, N. A. as Administrative Agent and JPMorgan Chase Bank, N. A. as Syndication Agent (the “Credit Agreement”). The Credit Agreement provides a $2.25 billion unsecured revolving credit facility with a sub-limit of $600 million available for the issuance of letters of credit. NAI may request an increase in the amount of the credit facility up to a maximum amount of $2.5 billion. Borrowings are in U.S. dollars only, while letters of credit are issuable in U.S. dollars or Euros. The significant terms of the agreement include the requirement that the Company maintain specific leverage ratios and limitations on secured indebtedness. The Company pays a facility fee of 0.08% regardless of facility usage. The Company pays interest for borrowings at LIBOR plus 0.27% and pays commission fees on letters of credit at 0.27%. The Company pays an additional fee of 0.05% if borrowings under the facility exceed 50% of the committed facility. The interest and fees are based on the Company’s current debt rating. The maturity date is in May 2012; however, NAI may request that the Lenders’ commitments be renewed for up to two additional one year periods.

The Company, as Parent Guarantor, presently guarantees the senior public indebtedness of NAI and the guarantee is full and unconditional. The supplemental condensed consolidating financial information of the Parent Guarantor should be read in conjunction with these consolidated financial statements.

In accordance with rules and regulations of the SEC, the Company uses the equity method to account for the results of all of the non-guarantor subsidiaries, representing substantially all of the Company’s consolidated results of operations, excluding certain intercompany eliminations.

The following condensed consolidating financial statements present the results of operations, financial position and cash flows of NAI, the Company and the subsidiaries of the Company and the eliminations and reclassifications necessary to arrive at the information for the Company on a consolidated basis.


	News America Incorporated			News Corporation			Non-Guarantor			Reclassifications and Eliminations			News Corporation and Subsidiaries			News America Incorporated			News Corporation			Non-Guarantor			Reclassifications and Eliminations			News Corporation and Subsidiaries
Revenues	$	—		$	—		$	8,684		$	—		$	8,684		$	1		$	—		$	8,784		$	—		$	8,785
Expenses		(63	)		—			(7,919	)		—			(7,982	)		(68	)		—			(7,470	)		—			(7,538	)
Equity earnings of affiliates		1			—			57			—			58			—			—			181			—			181
Interest expense, net		(776	)		(297	)		373			431			(269	)		(777	)		(303	)		—			833			(247	)
Interest income		1			—			851			(836	)		16			2			—			851			(833	)		20
Earnings (losses) from subsidiary entities		411			551			—			(962	)		—			397			1,142			—			(1,539	)		—
Other, net		(1	)		—			(85	)		—			(86	)		5			—			(50	)		—			(45	)

Income (loss) before income tax expense		(427	)		254			1,961			(1,367	)		421			(440	)		839			2,296			(1,539	)		1,156
Income tax (expense) benefit		129			—			(612	)		346			(137	)		476			—			(924	)		153			(295	)

Net income (loss)		(298	)		254			1,349			(1,021	)		284			36			839			1,372			(1,386	)		861
Less: Net income attributable to noncontrolling interests		—			—			(30	)		—			(30	)		—			—			(22	)		—			(22	)

Net income (loss) attributable to News Corporation stockholders	$	(298	)	$	254		$	1,319		$	(1,021	)	$	254		$	36		$	839		$	1,350		$	(1,386	)	$	839


	News America Incorporated			News Corporation			Non-Guarantor			Reclassifications and Eliminations			News Corporation and Subsidiaries			News America Incorporated			News Corporation			Non-Guarantor			Reclassifications and Eliminations			News Corporation and Subsidiaries
Revenues	$	1		$	—		$	7,870		$	—		$	7,871		$	2		$	—		$	7,371		$	—		$	7,373
Expenses		(82	)		—			(15,415	)		—			(15,497	)		(78	)		—			(6,540	)		—			(6,618	)
Equity earnings of affiliates		1			—			29			—			30
Equity (losses) earnings of affiliates																	2			—			(42	)		—			(40	)
Interest expense, net		(400	)		(268	)		(143	)		580			(231	)		(544	)		(276	)		14			568			(238	)
Interest income		187			—			413			(580	)		20			2			—			582			(568	)		16
Earnings (losses) from subsidiary entities		321			(6,114	)		—			5,793			—			153			2,944			—			(3,097	)		—
Other, net		(124	)		(35	)		61			—			(98	)		(118	)		59			1,191			—			1,132

(Loss) income before income tax expense		(96	)		(6,417	)		(7,185	)		5,793			(7,905	)
Income (loss) before income tax expense																	(581	)		2,727			2,576			(3,097	)		1,625
Income tax benefit		25			—			1,422			67			1,514			252			—			346			505			1,103

Net (loss) income		(71	)		(6,417	)		(5,763	)		5,860			(6,391	)
Net income (loss)																	(329	)		2,727			2,922			(2,592	)		2,728
Less: Net income attributable to noncontrolling interests		—			—			(26	)		—			(26	)		—			—			(1	)		—			(1	)

Net (loss) income attributable to News Corporation stockholders	$	(71	)	$	(6,417	)	$	(5,789	)	$	5,860		$	(6,417	)
Net income (loss) attributable to News Corporation stockholders																$	(329	)	$	2,727		$	2,921		$	(2,592	)	$	2,727


	News America Incorporated			News Corporation			Non-Guarantor			Reclassifications and Eliminations			News Corporation and Subsidiaries			News America Incorporated			News Corporation			Non-Guarantor			Reclassifications and Eliminations			News Corporation and Subsidiaries
Revenues	$	—		$	—		$	15,883		$	—		$	15,883		$	1		$	—		$	24,667		$	—		$	24,668
Expenses		(125	)		—			(14,014	)		—			(14,139	)		(193	)		—			(21,484	)		—			(21,677	)
Equity earnings of affiliates		2			—			88			—			90			2			—			269			—			271
Interest expense, net		(1,516	)		(587	)		(8	)		1,597			(514	)		(2,293	)		(890	)		(8	)		2,430			(761	)
Interest income		2			—			1,636			(1,597	)		41			4			—			2,487			(2,430	)		61
Earnings (losses) from subsidiary entities		884			1,412			—			(2,296	)		—			1,281			2,554			—			(3,835	)		—
Other, net		384			—			(77	)		(405	)		(98	)		389			—			(127	)		(405	)		(143	)

Income (loss) before income tax expense		(369	)		825			3,508			(2,701	)		1,263			(809	)		1,664			5,804			(4,240	)		2,419
Income tax (expense) benefit		112			—			(1,062	)		568			(382	)
Income tax benefit																	588			—			(1,986	)		721			(677	)

Net income (loss)		(257	)		825			2,446			(2,133	)		881			(221	)		1,664			3,818			(3,519	)		1,742
Less: Net income attributable to noncontrolling interests		—			—			(56	)		—			(56	)		—			—			(78	)		—			(78	)

Net income (loss) attributable to News Corporation stockholders	$	(257	)	$	825		$	2,390		$	(2,133	)	$	825		$	(221	)	$	1,664		$	3,740		$	(3,519	)	$	1,664


	News America Incorporated			News Corporation			Non-Guarantor			Reclassifications and Eliminations			News Corporation and Subsidiaries			News America Incorporated			News Corporation			Non-Guarantor			Reclassifications and Eliminations			News Corporation and Subsidiaries
Revenues	$	3		$	—		$	15,377		$	—		$	15,380		$	5		$	—		$	22,748		$	—		$	22,753
Expenses		(170	)		—			(21,883	)		—			(22,053	)		(248	)		—			(28,423	)		—			(28,671	)
Equity earnings (losses) of affiliates		2			—			(331	)		—			(329	)
Equity (losses) earnings of affiliates																	4			—			(373	)		—			(369	)
Interest expense, net		(740	)		(531	)		(143	)		962			(452	)		(1,284	)		(807	)		(129	)		1,530			(690	)
Interest income		203			—			819			(962	)		60			205			—			1,401			(1,530	)		76
Earnings (losses) from subsidiary entities		755			(5,300	)		—			4,545			—			908			(2,356	)		—			1,448			—
Other, net		(43	)		(71	)		320			—			206			(161	)		(12	)		1,511			—			1,338

(Loss) income before income tax expense		10			(5,902	)		(5,841	)		4,545			(7,188	)		(571	)		(3,175	)		(3,265	)		1,448			(5,563	)
Income tax benefit (expense)		(2	)		—			1,083			252			1,333
Income tax benefit																	250			—			1,429			757			2,436

Net (loss) income		8			(5,902	)		(4,758	)		4,797			(5,855	)		(321	)		(3,175	)		(1,836	)		2,205			(3,127	)
Less: Net income attributable to noncontrolling interests		—			—			(47	)		—			(47	)		—			—			(48	)		—			(48	)

Net (loss) income attributable to News Corporation stockholders	$	8		$	(5,902	)	$	(4,805	)	$	4,797		$	(5,902	)	$	(321	)	$	(3,175	)	$	(1,884	)	$	2,205		$	(3,175	)


	News America Incorporated		News Corporation		Non-Guarantor			Reclassifications and Eliminations			News Corporation and Subsidiaries		News America Incorporated		News Corporation		Non-Guarantor			Reclassifications and Eliminations			News Corporation and Subsidiaries
ASSETS:
Current assets:
Cash and cash equivalents	$	5,066	$	—	$	2,200		$	—		$	7,266	$	5,186	$	—	$	2,997		$	—		$	8,183
Receivables, net		21		—		7,495			—			7,516		22		—		6,766			—			6,788
Inventories, net		—		—		2,995			—			2,995		—		—		2,732			—			2,732
Other		56		—		502			—			558		27		—		458			—			485

Total current assets		5,143		—		13,192			—			18,335		5,235		—		12,953			—			18,188

Non-current assets:
Receivables		—		—		235			—			235		—		—		261			—			261
Inventories, net		—		—		3,506			—			3,506		—		—		3,303			—			3,303
Property, plant and equipment, net		62		—		6,158			—			6,220		95		—		5,969			—			6,064
Intangible assets, net		—		—		8,893			—			8,893		—		—		8,486			—			8,486
Goodwill		—		—		14,465			—			14,465		—		—		14,007			—			14,007
Other		257		—		1,060			—			1,317		264		—		1,032			—			1,296
Investments
Investments in associated companies and other investments		91		39		3,032			—			3,162		102		40		3,281			—			3,423
Intragroup investments		47,774		39,423		—			(87,197	)		—		50,356		40,290		—			(90,646	)		—

Total investments		47,865		39,462		3,032			(87,197	)		3,162		50,458		40,330		3,281			(90,646	)		3,423

TOTAL ASSETS	$	53,327	$	39,462	$	50,541		$	(87,197	)	$	56,133	$	56,052	$	40,330	$	49,292		$	(90,646	)	$	55,028

LIABILITIES AND EQUITY
Current liabilities:
Borrowings	$	1,793	$	—	$	47		$	—		$	1,840	$	236	$	—	$	74		$	—		$	310
Other current liabilities		32		—		9,321			—			9,353		20		197		9,369			—			9,586

Total current liabilities		1,825		—		9,368			—			11,193		256		197		9,443			—			9,896
Non-current liabilities:
Borrowings		13,371		—		64			—			13,435		13,164		—		32			—			13,196
Other non-current liabilities		216		—		6,094			—			6,310		180		—		6,185			—			6,365
Intercompany		23,172		15,061		(38,233	)		—			—		28,676		15,360		(44,036	)		—			—
Redeemable noncontrolling interests		—		—		365			—			365		—		—		362			—			362
Equity		14,743		24,401		72,883			(87,197	)		24,830		13,776		24,773		77,306			(90,646	)		25,209

TOTAL LIABILITIES AND EQUITY	$	53,327	$	39,462	$	50,541		$	(87,197	)	$	56,133	$	56,052	$	40,330	$	49,292		$	(90,646	)	$	55,028


	News America Incorporated			News Corporation			Non-Guarantor			Reclassifications and Eliminations		News Corporation and Subsidiaries			News America Incorporated			News Corporation			Non-Guarantor			Reclassifications and Eliminations		News Corporation and Subsidiaries
Operating activities:
Net cash provided by (used in) operating activities	$	(391	)	$	137		$	818		$	—	$	564
Net cash provided by operating activities															$	1,584		$	136		$	1,259		$	—	$	2,979

Investing activities:
Property, plant and equipment		(3	)		—			(385	)		—		(388	)		(40	)		—			(621	)		—		(661	)
Investments		(8	)		—			(288	)		—		(296	)		(42	)		—			(503	)		—		(545	)
Proceeds from sale of investments, non-current assets and business disposals		—			—			36			—		36			—			—			889			—		889

Net cash used in investing activities		(11	)		—			(637	)		—		(648	)		(82	)		—			(235	)		—		(317	)

Financing activities:
Borrowings		989			—			21			—		1,010			989			—			35			—		1,024
Repayment of borrowings		—			—			(75	)		—		(75	)		(1,784	)		—			(85	)		—		(1,869	)
Issuance of shares		—			21			—			—		21			—			22			—			—		22
Dividends paid		—			(158	)		(25	)		—		(183	)		—			(158	)		(45	)		—		(203	)
Other, net		—			—			2			—		2			—			—			2			—		2

Net cash provided by (used in) financing activities		989			(137	)		(77	)		—		775
Net used in financing activities																(795	)		(136	)		(93	)		—		(1,024	)

Net increase in cash and cash equivalents		587			—			104			—		691			707			—			931			—		1,638
Cash and cash equivalents, beginning of period		4,479			—			2,061			—		6,540			4,479			—			2,061			—		6,540
Exchange movement on opening cash balance		—			—			35			—		35			—			—			5			—		5

Cash and cash equivalents, end of period	$	5,066		$	—		$	2,200		$	—	$	7,266		$	5,186		$	—		$	2,997		$	—	$	8,183


	News America Incorporated			News Corporation			Non-Guarantor			Reclassifications and Eliminations		News Corporation and Subsidiaries			News America Incorporated			News Corporation			Non-Guarantor			Reclassifications and Eliminations		News Corporation and Subsidiaries
Operating activities:
Net cash (used in) provided by operating activities	$	(440	)	$	170		$	(125	)	$	—	$	(395	)
Net cash provided by (used in) operating activities															$	1,469		$	176		$	(584	)	$	—	$	1,061

Investing and other activities:
Property, plant and equipment		(8	)		—			(583	)		—		(591	)		(10	)		—			(801	)		—		(811	)
Investments		(7	)		(19	)		(503	)		—		(529	)		(8	)		(25	)		(911	)		—		(944	)
Proceeds from sale of investments, non-current assets and business disposals		—			—			973			—		973			—			—			1,713			—		1,713

Net cash used in investing activities		(15	)		(19	)		(113	)		—		(147	)
Net cash (used in) provided by investing activities																(18	)		(25	)		1			—		(42	)

Financing activities:
Borrowings		—			—			47			—		47			973			—			59			—		1,032
Repayment of borrowings		(200	)		—			(55	)		—		(255	)		(200	)		—			(136	)		—		(336	)
Issuance of shares		—			3			1			—		4			—			3			1			—		4
Dividends paid		—			(154	)		(23	)		—		(177	)		—			(154	)		(36	)				(190	)
Purchase of subsidiary shares from noncontrolling interest		—			—			(11	)		—		(11	)		—						(11	)		—		(11	)
Other, net		—			—			18			—		18			—			—			18			—		18

Net cash used in financing activities		(200	)		(151	)		(23	)		—		(374	)
Net cash provided by (used in) financing activities																773			(151	)		(105	)		—		517

Net decrease in cash and cash equivalents		(655	)		—			(261	)		—		(916	)
Net increase (decrease) in cash and cash equivalents																2,224			—			(688	)		—		1,536
Cash and cash equivalents, beginning of period		2,275			—			2,387			—		4,662			2,275			—			2,387			—		4,662
Exchange movement on opening cash balance		—			—			(125	)		—		(125	)		—			—			(144	)		—		(144	)

Cash and cash equivalents, end of period	$	1,620		$	—		$	2,001		$	—	$	3,621		$	4,499		$	—		$	1,555		$	—	$	6,054

ITEM 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This document contains statements that constitute “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended. 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 document and include statements regarding the intent, belief or current expectations of News Corporation, its directors or its officers with respect to, among other things, trends affecting News Corporation’s financial condition or results of operations. The readers of this document are cautioned that any forward-looking statements are not guarantees of future performance and involve risks and uncertainties. More information regarding these risks, uncertainties and other factors is set forth under the heading Part II “Other Information,” Item 1A “Risk Factors” in this report. News Corporation 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 News Corporation with the Securities and Exchange Commission (“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’s Annual Report on Form 10-K~~Corporation for the fiscal year ended June 30, 2009 asincluded in News Corporation’s Current Report on Form 8-K filed with the SEC on February 12, 2010, which should be read in conjunction with the Company’s Annual Report on Form 10-K filed with the SEC on August 12, ~~2009 (the “2009 Form 10-K”).~~2009.

Management’s discussion and analysis of financial condition and results of operations is intended to help provide an understanding of News Corporation and its subsidiaries’ (together “News Corporation” or the “Company”) financial condition, changes in financial condition and results of operations. This discussion is organized as follows:

The Company is a diversified global media company, which manages and reports its businesses in eight segments. During the first quarter of fiscal 2010, the Company reclassified STAR Group Limited (“STAR”), which develops, produces and distributes television programming in Asia, from the Television segment to the Cable Network Programming segment. This reclassification was the result of a restructuring to combine the sales and distribution operations of the STAR channels with those of the Company’s other international cable businesses. In addition, the Magazines and Inserts segment ~~has been~~was renamed the Integrated Marketing Services segment. The Company has revised its segment information for prior fiscal years to conform to the fiscal 2010 presentation. Beginning in fiscal 2010, the Company’s eight segments are:

Filmed Entertainment, which principally consists of the production and acquisition of live-action and animated motion pictures for distribution and licensing in all formats in all entertainment media worldwide, and the production and licensing of television programming worldwide.

Newspapers and Information Services, which principally consists of the publication of four national newspapers in the United Kingdom, the publication of approximately 146 newspapers in Australia, the publication of a metropolitan newspaper and a national newspaper (with international editions) in the United States and the provision of information services.

The Filmed Entertainment segment derives revenue from the production and distribution of feature motion pictures and television series. In general, motion pictures produced or acquired for distribution by the Company are exhibited in U.S. and foreign theaters, followed by home entertainment, video-on-demand and pay-per-view television, on-line and mobile distribution, premium subscription television, network television and basic cable and syndicated television exploitation. Television series initially produced for the networks and first-run syndication are generally licensed to domestic and international markets concurrently and subsequently released in seasonal DVD box sets. More successful series are later syndicated in domestic markets. The length of the revenue cycle for television series will vary depending on the number of seasons a series remains in active production and, therefore, may cause fluctuations in operating results. License fees received for television exhibition (including international and U.S. premium television and basic cable television) are recorded as revenue in the period that licensed films or programs are available for such exhibition, which may cause substantial fluctuations in operating results.

The revenues and operating results of the Filmed Entertainment segment are significantly affected by the timing of the Company’s theatrical and home entertainment releases, the number of its original and returning television series that are aired by television networks and the number of its television series in off-network syndication. Theatrical and home entertainment release dates are determined by several factors, including timing of vacation and holiday periods and competition in the marketplace. The distribution windows for the release of motion pictures theatrically and in various home entertainment formats have been compressing and may continue to change in the future. A further reduction in timing between theatrical and home entertainment releases could adversely affect the revenues and operating results of this segment.

The Company enters into arrangements with third parties to co-produce many of its theatrical productions. These arrangements, which are referred to as co-financing arrangements, take various forms. The parties to these arrangements include studio and non-studio entities, both domestic and foreign. In several of these agreements, other parties control certain distribution rights. The Filmed Entertainment segment records the amounts received for the sale of an economic interest as a reduction of the cost of the film, as the investor assumes full risk for that portion of the film asset acquired in these transactions. The substance of these arrangements is that the third-party investors own an interest in the film and therefore, receive a participation based on the respective third-party investor’s interest in the profits or losses incurred on the film. Consistent with the requirements of Accounting Standards Codification (“ASC”) 926-605 “Entertainment—Films—Revenue Recognition,” the estimate of a third-party investor’s interest in profits or losses incurred on the film is determined by reference to the ratio of actual revenue earned to date in relation to total estimated ultimate revenues.

Operating costs incurred by the Filmed Entertainment segment include: exploitation costs, primarily theatrical prints and advertising and home entertainment marketing and manufacturing costs; amortization of capitalized production, overhead and interest costs; and participations and talent residuals. Selling, general and administrative expenses include salaries, employee benefits, rent and other routine overhead.

The Company competes with other major studios, such as Disney, Paramount, Sony, Universal, Warner Bros. and independent film producers in the production and distribution of motion pictures and DVDs. As a producer and distributor of television programming, the Company competes with studios, television production groups and independent producers and syndicators, such as Disney, Sony, NBC Universal, Warner Bros. and Paramount Television, to sell programming both domestically and internationally. The Company also competes to obtain creative talent and story properties, which are essential to the success of the Company’s filmed entertainment businesses.

The Company’s television operations primarily consist of FOX Broadcasting Company (“FOX”), MyNetworkTV, Inc. (“MyNetworkTV”) and the 27 television stations owned by the Company.

The television operations derive revenues primarily from the sale of advertising. Adverse changes in general market conditions for advertising may affect revenues. The U.S. television broadcast environment is highly competitive and the primary methods of competition are the development and acquisition of popular programming. Program success is measured by ratings, which are an indication of market acceptance, with the top rated programs commanding the highest advertising prices. FOX is a broadcast network and MyNetworkTV is a programming distribution service. FOX and MyNetworkTV compete with other broadcast networks, such as CBS, ABC, NBC and The CW, independent television stations, cable program services, as well as other media, including DVDs, video games, print and the Internet for audiences and programming and, in the case of FOX, also for advertising revenues. In addition, FOX and MyNetworkTV compete with the other broadcast networks and other programming distribution services to secure affiliations with independently owned television stations in markets across the country.

MyNetworkTV is a programming distribution service, airing off-network programming and movies as well as World Wrestling Entertainment’sFriday Night SmackDown.

The television stations owned by the Company compete for programming, audiences and advertising revenues with other television stations and cable networks in their respective coverage areas and, in some cases,

with respect to programming, with other station groups, and in the case of advertising revenues, with other local and national media. The competitive position of the television stations owned by the Company is largely influenced by the strength of FOX and MyNetworkTV, and, in particular, the prime-time viewership of the respective network, as well as the quality of the programming of FOX and MyNetworkTV.

The Company’s U.S. cable network operations primarily consist of the Fox News Channel (“FOX News”), the FX Network (“FX”), Regional Sports Networks (“RSNs”), the National Geographic Channels, SPEED and the Big Ten Network. The Company’s international cable networks consist of the Fox International Channels (“FIC”) with channels primarily in Latin America, Europe and Asia and STAR with channels throughout Asia.

Generally, the Company’s cable networks, which target various demographics, derive a majority of their revenues from monthly affiliate fees received from cable television systems and direct broadcast satellite (“DBS”) operators based on the number of their subscribers. Affiliate fee revenues are net of the amortization of cable distribution investments (capitalized fees paid to a cable operator or DBS operator to facilitate the launch of a cable network). The Company defers the cable distribution investments and amortizes the amounts on a straight-line basis over the contract period. Cable television and DBS are currently the predominant means of distribution of the Company’s program services in the United States. Internationally, distribution technology varies region by region.

The Company’s cable networks compete for carriage on cable television systems, DBS systems and other distribution systems with other program services. A primary focus of competition is for distribution of the Company’s cable network channels that are not already distributed by particular cable television or DBS systems. For such program services, distributors make decisions on the use of bandwidth based on various considerations, including amounts paid by programmers for launches, subscription fees payable by distributors and appeal to the distributors’ subscribers.

The most significant operating expenses of the Television segment and the Cable Network Programming segment are the acquisition and production expenses related to programming and the production and technical expenses related to operating the technical facilities of the broadcaster or cable network. Other expenses include promotional expenses related to improving the market visibility and awareness of the broadcaster or cable network and its programming. Additional expenses include sales commissions paid to the in-house advertising sales force, as well as salaries, employee benefits, rent and other routine overhead expenses.

The Company has several multi-year sports rights agreements, including contracts with the National Football League (“NFL”) through fiscal 2014, contracts with the National Association of Stock Car Auto Racing (“NASCAR”) for certain races and exclusive rights for certain ancillary content through calendar year 2014 and a contract with Major League Baseball (“MLB”) through calendar year 2013. These contracts provide the Company with the broadcast rights to certain U.S. national sporting events during their respective terms. The costs of these sports contracts are charged to expense based on the ratio of each period’s operating profit to estimated total operating profit for the remaining term of the contract.

The profitability of these long-term U.S. national sports contracts is based on the Company’s best estimates at ~~December~~March 31, ~~2009~~2010 of directly attributable revenues and costs; such estimates may change in the future and such changes may be significant. Should revenues decline from estimates applied at ~~December~~March 31, ~~2009,~~2010, additional amortization of rights may be recorded. Should revenues improve as compared to estimated revenues, the Company may have an improved operating profit related to the contract, which may be recognized over the estimated remaining contract term.

While the Company seeks to ensure compliance with federal indecency laws and related Federal Communications Commission (“FCC”) regulations, the definition of “indecency” is subject to interpretation and there can be no assurance that the Company will not broadcast programming that is ultimately determined by the FCC to violate the prohibition against indecency. Such programming could subject the Company to regulatory review or investigation, fines, adverse publicity or other sanctions, including the loss of station licenses.

The DBS segment’s operations consist of SKY Italia, which provides basic and premium programming services via satellite and broadband directly to subscribers in Italy. SKY Italia derives revenues principally from subscriber fees. The Company believes that the quality and variety of video, audio and interactive programming, quality of picture, access to service, customer service and price are the key elements for gaining and maintaining market share. SKY Italia’s competition includes companies that offer video, audio, interactive programming, telephony, data and other information and entertainment services, including broadband Internet providers, digital terrestrial transmission (“DTT”) services, wireless companies and companies that are developing new media technologies. The Company is currently prohibited from providing a pay DTT service under regulations of the European Commission.

SKY Italia’s most significant operating expenses are those related to the acquisition of entertainment, movie and sports programming and subscribers and the production and technical expenses related to operating the technical facilities. Operating expenses related to sports programming are generally recognized over the course of the related sport season, which may cause fluctuations in the operating results of this segment.

The Integrated Marketing Services segment derives revenues from the sale of advertising space in free-standing inserts, in-store marketing products and services, promotional advertising and production fees. Adverse changes in general market conditions for advertising may affect revenues. Operating expenses for the Integrated Marketing Services segment include paper, promotional, printing, retail commissions, distribution and production costs. Selling, general and administrative expenses include salaries, employee benefits, rent and other routine overhead.

The Newspapers and Information Services segment derives revenues primarily from the sale of advertising space, the sale of published newspapers, subscriptions and contract printing. Adverse changes in general market conditions for advertising may affect revenues. Circulation revenues can be greatly affected by changes in the cover prices of the Company’s and/or competitors’ newspapers, as well as by promotional activities.

Operating expenses for the Newspapers and Information Services segment include costs related to newsprint, ink, printing, distribution and editorial content. Selling, general and administrative expenses include salaries, employee benefits, rent and other routine overhead.

The Newspapers and Information Services segment’s advertising volume, circulation and the price of newsprint are the key variables whose fluctuations can have a material effect on the Company’s operating results and cash flow. The Company has to anticipate the level of advertising volume, circulation and newsprint prices in managing its businesses to maximize operating profit during expanding and contracting economic cycles. Newsprint is a basic commodity and its price is sensitive to the balance of supply and demand. The Company’s costs and expenses are affected by the cyclical increases and decreases in the price of newsprint. The newspapers published by the Company compete for readership and advertising with local and national newspapers and also compete with television, radio, Internet and other media alternatives in their respective markets. Competition for newspaper circulation is based on the news and editorial content of the newspaper, service, cover price and, from

time to time, various promotions. The success of the newspapers published by the Company in competing with other newspapers and media for advertising depends upon advertisers’ judgments as to the most effective use of their advertising budgets. Competition for advertising among newspapers is based upon circulation levels, readership levels, reader demographics, internet reach, advertising rates and advertiser results. Such judgments are based on factors such as cost, availability of alternative media, circulation and quality of readership demographics. In recent years, the newspaper industry has experienced difficulty increasing circulation volume

and revenues. This is due to, among other factors, increased competition from new media formats and sources and shifting preferences among some consumers to receive all or a portion of their news from sources other than a newspaper.

The Newspapers and Information Services segment also derives revenue from the provision of subscriber-based information services and the licensing of products and content to third-parties. Losses in the number of subscribers for these information services may affect revenues. The information services provided by the Company also compete with other media sources (free and subscription-based) and new media formats. Licensing revenues depend on new and renewed customer contracts, and may be affected if the Company is unable to generate new licensing business or if existing customers renew for lesser amounts, terminate early or forego renewal.

The Company believes that competition from new media formats and sources and shifting consumer preferences will continue to pose challenges within the Newspapers and Information Services industries.

The Book Publishing segment derives revenues from the sale of general and children’s books in the United States and internationally. The revenues and operating results of the Book Publishing segment are significantly affected by the timing of the Company’s releases and the number of its books in the marketplace. The book publishing marketplace is subject to increased periods of demand in the summer months and during the end-of-year holiday season. This market place continues to change due to technical innovations, electronic book devices and other factors. Each book is a separate and distinct product, and its financial success depends upon many factors, including public acceptance.

Major new title releases represent a significant portion of the Company’s sales throughout the fiscal year. Consumer books are generally sold on a fully returnable basis, resulting in the return of unsold books. In the domestic and international markets, the Company is subject to global trends and local economic conditions.

Operating expenses for the Book Publishing segment include costs related to paper, printing, authors’ royalties, editorial, art and design expenses. Selling, general and administrative expenses include promotional expenses, salaries, employee benefits, rent and other routine overhead.

The Company sells advertising, sponsorships and subscription services on the Company’s various digital media properties. Significant expenses associated with the company’s digital media properties include development costs, advertising and promotional expenses, salaries, employee benefits and other routine overhead. The Company’s digital media properties include, among others, MySpace.com, IGN.com and Fox Audience Network.

News Outdoor sells outdoor advertising space on various media, primarily in Russia and Eastern Europe. Significant expenses associated with the News Outdoor business include site lease costs, direct production, maintenance and installation expenses, salaries, employee benefits and other routine overhead. The Company has announced that it intends to explore strategic options for News Outdoor in connection with News Outdoor’s continued development plans. The strategic options include, but are not limited to, exploring the opportunity to expand News Outdoor’s existing shareholder group through new partners. No agreement has yet been entered into with respect to any transaction.

During the ~~first quarter of fiscal~~nine months ended March 31, 2010, the Company acquired additional shares of Sky Deutschland, ~~AG (“Sky Deutschland”),~~ increasing its ownership from approximately 38% at June 30, 2009 to approximately ~~40%~~45% at ~~December~~March 31, ~~2009.~~

In the third quarter of fiscal 2010, ~~and, accordingly,~~ the Company purchased 49 million newly registered shares of Sky Deutschland at a price of €2.25 per new share for an aggregate cost of approximately $158 million. As a result, News Corporation’s stake in Sky Deutschland increasedcompleted two transactions related to ~~approximately 45%.~~its financial indexes businesses.

~~In January 2010, the~~The Company sold its 33% interest in STOXX ~~Ltd.~~AG (“STOXX”), a European market index provider, to its partners, Deutsche Börse AG and SIX Group AG, for approximately $300 million in ~~cash and~~cash. The Company is entitled to receive additional consideration of up to approximately $40 million ~~conditioned upon~~if STOXX ~~achieving specific performance objectives.~~achieves certain revenue targets in calendar year 2010.

In April 2010, the Company sold bTV, its Bulgarian terrestrial TV business, for cash consideration of approximately $375 million, net of expenses.

Results of Operations—For the three and ~~six~~nine months ended ~~December~~March 31, ~~2009~~2010 versus the three and ~~six~~nine months ended ~~December~~March 31, ~~2008.~~2009.

The following table sets forth the Company’s operating results for the three and ~~six~~nine months ended ~~December~~March 31, ~~2009,~~2010, as compared to the three and ~~six~~nine months ended ~~December~~March 31, ~~2008.~~2009.


	For the three months ended December 31,								For the six months ended December 31,								For the three months ended March 31,								For the nine months ended March 31,
	2009			2008			% Change		2009			2008			% Change		2010			2009			% Change		2010			2009			% Change
	(in millions, except %)																(in millions, except %)

Revenues	$	8,684		$	7,871		10	%	$	15,883		$	15,380		3	%	$	8,785		$	7,373		19	%	$	24,668		$	22,753		8	%
Operating expenses		(5,630	)		(5,161	)	9	%		(10,035	)		(9,732	)	3	%		(5,777	)		(4,848	)	19	%		(15,812	)		(14,580	)	8	%
Selling, general and administrative		(2,043	)		(1,588	)	29	%		(3,478	)		(3,269	)	6	%		(1,461	)		(1,441	)	1	%		(4,939	)		(4,710	)	5	%
Depreciation and amortization		(299	)		(283	)	6	%		(596	)		(579	)	3	%		(294	)		(274	)	7	%		(890	)		(853	)	4	%
Impairment and restructuring charges		(10	)		(8,465	)	*	*		(30	)		(8,473	)	*	*		(6	)		(55	)	(89	)%		(36	)		(8,528	)	*	*
Equity earnings (losses) of affiliates		58			30		93	%		90			(329	)	*	*		181			(40	)	*	*		271			(369	)	*	*
Interest expense, net		(269	)		(231	)	16	%		(514	)		(452	)	14	%		(247	)		(238	)	4	%		(761	)		(690	)	10	%
Interest income		16			20		(20	)%		41			60		(32	)%		20			16		25	%		61			76		(20	)%
Other, net		(86	)		(98	)	(12	)%		(98	)		206		*	*		(45	)		1,132		*	*		(143	)		1,338		*	*

Income (loss) before income tax expense		421			(7,905	)	*	*		1,263			(7,188	)	*	*		1,156			1,625		(29	)%		2,419			(5,563	)	*	*
Income tax (expense) benefit		(137	)		1,514		*	*		(382	)		1,333		*	*		(295	)		1,103		*	*		(677	)		2,436		*	*

Net income (loss)		284			(6,391	)	*	*		881			(5,855	)	*	*		861			2,728		(68	)%		1,742			(3,127	)	*	*
Less: Net income attributable to noncontrolling interests		(30	)		(26	)	15	%		(56	)		(47	)	19	%		(22	)		(1	)	*	*		(78	)		(48	)	63	%

Net income (loss) attributable to News Corporation stockholders	$	254		$	(6,417	)	*	*	$	825		$	(5,902	)	*	*	$	839		$	2,727		(69	)%	$	1,664		$	(3,175	)	*	*

Overview—The Company’s revenues increased ~~10%~~19% and 3%8% for the three and ~~six~~nine months ended ~~December~~March 31, ~~2009,~~2010, respectively, as compared to the corresponding periods of fiscal 2009. The increases were primarily due to revenue increases at the Filmed Entertainment, ~~Television,~~Newspapers and Information Services and Cable Network Programming ~~and Book Publishing~~ segments. ~~The increases at the~~ Filmed Entertainment ~~segment were primarily due to increased worldwide theatrical and home entertainment revenues. Television~~ segment revenues increased primarily due to increased ~~MLB~~theatrical and ~~prime-time~~home entertainment revenues. The increase at the Newspapers and Information Services segment for the three months ended March 31, 2010 was primarily due to favorable foreign exchange fluctuations and higher advertising ~~revenues.~~revenue while the increase for the nine months ended March 31, 2010 was primarily due to favorable foreign exchange fluctuations. The increases at the Cable Network Programming segment

were primarily due to increases in net affiliate and advertising revenues. ~~The increases at the Book Publishing segment were primarily due to strong title offerings in fiscal 2010, with no comparable titles in the corresponding periods of fiscal 2009.~~ These revenue increases were partially offset by ~~the~~ decreased revenues at the Other segment, primarily due to decreased revenues at the Company’s digital media properties and the sale of a portion of the Company’s ownership stake in NDS Group plc (“NDS”) in February 2009. As a result of the sale, the Company’s portion of NDS’s operating results subsequent to February 2009 is included within Equity earnings (losses) of affiliates.

Operating expenses for the three and ~~six~~nine months ended ~~December~~March 31, ~~2009~~2010 increased 9%19% and 3%8%, respectively, as compared to the corresponding periods of fiscal 2009. The increases were primarily due to increased amortization of production and ~~participation costs and~~ higher ~~home entertainment manufacturing and marketing~~participation costs at the Filmed Entertainment ~~segment. Also contributing to these increases were~~segment and higher entertainment and sports programming costs at the Television and Cable Network Programming segments, as well as unfavorable foreign ~~currency~~exchange fluctuations. These increases were partially offset by the absence of costs related to NDS in the Other segment, reflecting the sale of a portion of the Company’s NDS ownership stake ~~in February 2009,~~as noted above, as well as the effects of company-wide cost containment initiatives.

Selling, ~~General~~general and ~~Administrative~~administrative expenses for the three ~~and six~~ months ended ~~December~~March 31, ~~2009 increased 29% and 6%, respectively, as compared to~~2010 were relatively consistent with the corresponding ~~periods~~period of fiscal ~~2009. These~~2009, as increases ~~were primarily~~ due to the $500 million legal settlement charge with Valassis Communications, Inc. (“Valassis”) at the Integrated Marketing Services segment, as discussed in Note 13 to the accompanying unaudited consolidated financial statements, partiallyforeign exchange fluctuations were offset by the absence of costs related to NDS and the effects of company-wide cost containment initiatives. Selling, general and administrative expenses for the nine months ended March 31, 2010 increased 5% as compared to the corresponding period of fiscal 2009. This increase was primarily due to the $500 million charge related to the legal settlement with Valassis Communications, Inc. (“Valassis”) at the Integrated Marketing Services segment (See Note 13—Contingencies to the accompanying unaudited consolidated financial statements for further discussion.), partially offset by the absence of costs related to NDS as noted above and the effects of company-wide cost containment initiatives.

Depreciation and amortization increased 6%7% and 3%4% for the three and ~~six~~nine months ended ~~December~~March 31, ~~2009,~~2010, respectively, as compared to the corresponding periods of fiscal 2009. These increases were primarily due to higher depreciation at the DBS segment resulting from higher volumes of set-top boxes and unfavorable foreign exchange fluctuations. The increase in the nine months ended March 31, 2010 was partially offset by the absence of depreciation and amortization related to NDS.

Impairment and restructuring charges—As discussed in Note 44—Restructuring Programs to the accompanying unaudited consolidated financial statements, the Company recorded approximately ~~$10~~$6 million and ~~$30~~$36 million of additional restructuring charges in the unaudited consolidated statements of operations for the three and ~~six~~nine months ended ~~December~~March 31, ~~2009,~~2010, respectively. The restructuring charges for the three months ended ~~December~~March 31, ~~2009~~2010 reflect approximately ~~$10~~$4 million recorded at the Newspapers and Information Services segment related to termination benefits and $2 million recorded at the Other segment related to ~~a restructuring program at the Company’s Fox Mobile Entertainment division and~~ accretion on facility termination obligations. The restructuring charges for the ~~six~~nine months ended ~~December~~March 31, ~~2009~~2010 reflect an $18 million charge related to the sales and distribution operations of the STAR channels, $4 million related to a restructuring program recorded at the Newspapers and Information Services segment and a ~~$12~~$14 million charge at the Other segment related to the restructuring program at the Company’s Fox Mobile Entertainment division and accretion on facility termination obligations.

During the three and ~~six~~nine months ended ~~December~~March 31, ~~2008,~~2009, the Company recorded approximately ~~$21~~$55 million and ~~$29~~$84 million in restructuring charges, respectively, primarily reflecting restructuring charges recorded at the Newspapers and Information Services ~~segment.~~and Book Publishing segments. In addition, the Company recorded non-cash impairment charges of $8,444 million during the nine months ended March 31, 2009 as noted below.

During the second quarter of fiscal 2009, the Company performed an interim impairment review in advance of its annual impairment assessment because the Company believed events had occurred and circumstances had changed that would more likely than not reduce the fair value of the Company’s goodwill and indefinite-lived intangible assets below their carrying amounts. These events included: (a) the decline of the price of the Company’s Class A common stock, par value $0.01 per share (“Class A Common Stock”), and Class B common stock, par value $0.01 per share (“Class B Common Stock”), below the carrying value of the Company’s stockholders’ equity; (b) the reduced growth in advertising revenues; (c) the decline in the operating profit margins in some of the Company’s advertising-based businesses; and (d) the decline in the valuations of other television stations, newspapers and advertising-based companies as determined by the current trading values of those companies.

As a result of the interim impairment review performed, the Company recorded non-cash impairment charges of approximately $8.4 billion ($6.7 billion, net of tax) in the ~~three and six~~nine months ended ~~December~~March 31, ~~2008.~~2009. The charges consisted of a write-down of the Company’s indefinite-lived intangible assets (primarily FCC licenses in the Television segment) of $4.6 billion, a write-down of $3.6 billion of goodwill and a write-down of the Newspapers and Information Services segment’s fixed assets of $185 million in accordance with ASC 360 “Property, Plant and Equipment.”

Equity earnings (losses) of affiliates—Equity earnings (losses) of affiliates increased ~~$28~~$221 million and $640 million for the three and nine months ended ~~December~~March 31, ~~2009~~2010 as compared to the corresponding period of fiscal 2009, ~~primarily~~ due to higher contributions from British Sky Broadcasting Group plc (“BSkyB”) as a result of ~~higher subscription revenues~~a gain

recognized by BSkyB on the sale of a portion of its investment in ITV and the absence of ~~the write-down~~write-downs related to ~~BSkyB’s~~ ITV ~~plc (“ITV”) investment~~that BSkyB recorded during the three and nine months ended ~~December~~March 31, ~~2008. Equity earnings (losses) of affiliates increased $419 million during~~2009. Also contributing to the ~~six~~increase for the nine months ended ~~December~~March 31, ~~2009 as compared to the corresponding period of fiscal 2009, primarily due to~~2010 was the absence of a $422 million write-down of the Company’s investment in Sky Deutschland ~~and write-downs related to BSkyB’s ITV investment~~ recorded ~~during~~in the ~~six~~nine months ended ~~December~~March 31, ~~2008.~~2009.


	For the three months ended December 31,						For the six months ended December 31,							For the three months ended March 31,							For the nine months ended March 31,
	2009		2008		% Change		2009		2008			% Change		2010		2009			% Change		2010		2009			% Change
	(in millions, except %)													(in millions, except %)
DBS equity affiliates	$	26	$	17	53	%	$	31	$	(376	)	*	*	$	139	$	(35	)	*	*	$	170	$	(412	)	*	*
Cable channel equity affiliates		10		3	*	*		29		27		7	%		25		15		67	%		54		42		29	%
Other equity affiliates		22		10	*	*		30		20		50	%		17		(20	)	*	*		47		1		*	*

Total equity earnings (losses) of affiliates	$	58	$	30	93	%	$	90	$	(329	)	*	*	$	181	$	(40	)	*	*	$	271	$	(369	)	*	*

Interest expense, ~~net—~~net—Interest expense, net for the three and ~~six~~nine months ended ~~December~~March 31, ~~2009~~2010 increased ~~$38~~$9 million and ~~$62~~$71 million, respectively, as compared to the corresponding periods of fiscal 2009, primarily due to the issuance of borrowings in February 2009 and August 2009. The increase in interest expense, net for the ~~six~~nine months ended ~~December~~March 31, ~~2009~~2010 was partially offset by the retirement of $200 million of the Company’s borrowings in October 2008.

Interest income—Interest income ~~decreased~~increased $4 ~~million and $19~~ million for the three ~~and six~~ months ended ~~December~~March 31, ~~2009, respectively,~~2010 as compared to the corresponding ~~periods~~period of fiscal 2009, primarily due to higher interest rates. Interest income decreased $15 million for the nine months ended March 31, 2010 as compared to the corresponding period of fiscal 2009, primarily due to lower average interest rates.


	For the three months ended December 31,						For the six months ended December 31,						For the three months ended March 31,						For the nine months ended March 31,
	2009			2008			2009			2008			2010			2009			2010			2009
	(in millions)												(in millions)
Loss on the financial indexes business transactions^(a)													$	(22	)	$	—		$	(22	)	$	—
Loss on the sale of eastern European television stations^(a)														(21	)		—			(40	)		(100	)
Loss on the Photobucket transaction^(a)	$	(29	)	$	—		$	(29	)	$	—			—			—			(29	)		—
Gain on the sale of NDS shares^(a)														—			1,249			—			1,249
Gain on the sale of the Stations^(a)		—			—			—			232			—			—			—			232
Loss on the sale of eastern European television stations^(a)		(19	)		(100	)		(19	)		(100	)
Change in fair value of exchangeable securities and other financial instruments^(b)		—			14			(4	)		76
Impairment of cost based investments^(b)														—			(110	)		(3	)		(110	)
Change in fair value of exchangeable securities^(c)														7			1			3			79
Other		(38	)		(12	)		(46	)		(2	)		(9	)		(8	)		(52	)		(12	)

Total Other, net	$	(86	)	$	(98	)	$	(98	)	$	206		$	(45	)	$	1,132		$	(143	)	$	1,338

^(b)	See Note 6—Investments to the accompanying unaudited consolidated financial statements.

^(c)

The Company has certain outstanding exchangeable debt securities which contain embedded derivatives. Pursuant to ASC 815 “Derivatives and ~~Hedging,”~~Hedging” (“ASC 815”), these embedded derivatives require separate accounting and, as such, changes in their fair value are recognized in other, net. A significant variance in the price of underlying stock could have a material impact on the operating results of the Company.

Income tax expense—The effective income tax ~~rate~~rates for the three and ~~six~~nine months ended ~~December~~March 31, ~~2009 was 33%~~2010 were 26% and ~~30%~~28%, respectively, which ~~was~~were lower than the statutory ~~tax~~ rate of 35%, primarily due to permanent

differences ~~recognized in~~and the ~~six months ended December 31, 2009.~~recognition of tax assets on the disposition of certain assets. The ~~effective income~~Company’s tax provision and related tax rate for the three and ~~six~~nine months ended ~~December~~March 31, ~~2008 was 19%, which was lower than~~2009 were different from the statutory ~~tax~~ rate ~~of 35%,~~ primarily due to the recognition of a non-cash benefit as a result of the resolution of certain tax matters and a permanent difference on the gain on the sale of a portion of a subsidiary. The tax provision and tax rate for the nine months ended March 31, 2009 reflect these items, which were offset in part by a non-deductible goodwill ~~included within the~~ impairment charge ~~taken~~recorded in the ~~three~~nine months ended ~~December~~March 31, ~~2008 noted above.~~2009.

Net income (loss)—Net income ~~(loss)~~ for the three ~~and six~~ months ended ~~December~~March 31, 2010 decreased as compared to the corresponding period of fiscal 2009, primarily due to the absence of the gain on the sale of the Company’s ownership stake in NDS in February 2009 and the non-cash tax benefit in the corresponding period of fiscal 2009 noted above. Net income for the nine months ended March 31, 2010 increased as compared to the corresponding ~~periods~~period of fiscal ~~2009. These increases were~~2009, primarily due to the absence of the impairment charges ~~noted above,~~recorded in fiscal 2009. This increase was partially offset by the charge related to the settlement of the Valassis ~~litigation. Also contributing to~~litigation recorded in the ~~increases were higher earnings from equity affiliates noted above. The increase during the six~~nine months ended ~~December~~March 31, ~~2009 was partially offset by~~2010, the absence of the gain on ~~the~~ sale of eight of the Company’s television stations in July ~~2008.~~2008, the gain on the sale of the Company’s ownership stake in NDS in February 2009 and the non-cash tax benefit in the corresponding period of fiscal 2009 noted above.

Net income attributable to noncontrolling interests—Net income attributable to noncontrolling interests increased for the three and nine months ended March 31, 2010 as compared to the corresponding periods of fiscal 2009, primarily due to higher results at the Company’s majority-owned businesses. The increase for the nine months ended March 31, 2010 was partially offset by the absence of income from NDS due to the sale of a portion of the Company’s ownership stake in February 2009, resulting in the Company’s remaining interest in NDS being accounted for under the equity method of accounting.

The following table sets forth the Company’s revenues and segment operating income for the three and ~~six~~nine months ended ~~December~~March 31, ~~2009~~2010 as compared to the three and ~~six~~nine months ended ~~December~~March 31, ~~2008.~~2009.


	For the three months ended December 31,								For the six months ended December 31,								For the three months ended March 31,								For the nine months ended March 31,
	2009			2008			% Change		2009			2008			% Change		2010			2009			% Change		2010			2009			% Change
	(in millions, except %)																(in millions, except %)
Revenues:
Filmed Entertainment	$	1,898		$	1,485		28	%	$	3,419		$	2,744		25	%	$	2,422		$	1,472		65	%	$	5,841		$	4,216		39	%
Television		1,248			1,135		10	%		2,013			1,964		2	%		1,168			1,149		2	%		3,181			3,113		2	%
Cable Network Programming		1,756			1,492		18	%		3,362			2,946		14	%		1,798			1,550		16	%		5,160			4,496		15	%
Direct Broadcast Satellite Television		1,008			922		9	%		1,935			1,891		2	%		954			924		3	%		2,889			2,815		3	%
Integrated Marketing Services		291			284		2	%		558			543		3	%		335			316		6	%		893			859		4	%
Newspapers and Information Services		1,655			1,505		10	%		3,058			3,210		(5	)%		1,505			1,248		21	%		4,563			4,458		2	%
Book Publishing		381			305		25	%		691			620		11	%		276			243		14	%		967			863		12	%
Other		447			743		(40	)%		847			1,462		(42	)%		327			471		(31	)%		1,174			1,933		(39	)%

Total revenues	$	8,684		$	7,871		10	%	$	15,883		$	15,380		3	%	$	8,785		$	7,373		19	%	$	24,668		$	22,753		8	%

Segment operating income:
Filmed Entertainment	$	324		$	112		*	*	$	715		$	363		97	%	$	497		$	282		76	%	$	1,212		$	645		88	%
Television		29			(2	)	*	*		67			82		(18	)%		40			9		*	*		107			91		18	%
Cable Network Programming		604			448		35	%		1,117			798		40	%		588			426		38	%		1,705			1,224		39	%
Direct Broadcast Satellite Television		(30	)		10		*	*		98			175		(44	)%		35			63		(44	)%		133			238		(44	)%
Integrated Marketing Services		(414	)		86		*	*		(341	)		154		*	*		108			97		11	%		(233	)		251		*	*
Newspapers and Information Services		259			200		30	%		284			341		(17	)%		131			29		*	*		415			370		12	%
Book Publishing		65			23		*	*		85			26		*	*		4			(8	)	*	*		89			18		*	*
Other		(125	)		(38	)	*	*		(251	)		(139	)	81	%		(150	)		(88	)	(70	)%		(401	)		(227	)	(77	)%

Total segment operating income	$	712		$	839		(15	)%	$	1,774		$	1,800		(1	)%	$	1,253		$	810		55	%	$	3,027		$	2,610		16	%

Management believes that total segment operating income is an appropriate measure for evaluating the operating performance of the Company’s business segments. Total segment operating income provides management, investors and equity analysts a measure to analyze 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). The following table reconciles total segment operating income to income (loss) before income taxes.


	For the three months ended December 31,						For the six months ended December 31,						For the three months ended March 31,						For the nine months ended March 31,
	2009			2008			2009			2008			2010			2009			2010			2009
	(in millions)												(in millions)
Total segment operating income	$	712		$	839		$	1,774		$	1,800		$	1,253		$	810		$	3,027		$	2,610
Impairment and restructuring charges		(10	)		(8,465	)		(30	)		(8,473	)		(6	)		(55	)		(36	)		(8,528	)
Equity earnings (losses) of affiliates		58			30			90			(329	)		181			(40	)		271			(369	)
Interest expense, net		(269	)		(231	)		(514	)		(452	)		(247	)		(238	)		(761	)		(690	)
Interest income		16			20			41			60			20			16			61			76
Other, net		(86	)		(98	)		(98	)		206			(45	)		1,132			(143	)		1,338

Income (loss) before income tax expense	$	421		$	(7,905	)	$	1,263		$	(7,188	)	$	1,156		$	1,625		$	2,419		$	(5,563	)

Filmed Entertainment ~~(22%~~(24% and ~~18%~~19% of the Company’s consolidated revenues in the first ~~six~~nine months of fiscal 2010 and 2009, respectively)

For the three and ~~six~~nine months ended ~~December~~March 31, ~~2009,~~2010, revenues at the Filmed Entertainment segment increased ~~$413~~$950 million, or ~~28%~~65%, and ~~$675~~$1,625 million, or ~~25%~~39%, respectively, as compared to the corresponding periods of fiscal 2009, primarily due to increased worldwide theatrical and home entertainment revenues. ~~Revenue increases~~The revenue increase for the three months ended ~~December~~March 31, ~~2009 were~~2010 was driven by the successful worldwide theatrical releases ofAvatar andAlvin and the Chipmunks: The ~~Squeakuel~~Squeakquel.~~and~~For the ~~home entertainment performances of~~~~Ice Age: Dawn of the Dinosaurs, X-Men Origins: Wolverine~~~~and~~ ~~Night at the Museum: Battle of the Smithsonian.~~~~Also contributing to revenue in the three~~nine months ended ~~December~~March 31, ~~2009 was the worldwide home entertainment and pay television performance of~~~~Taken~~~~. For the six months ended December 31, 2009,~~2010, revenues increased primarily due to the revenue increases ~~in the three-month period~~ noted above, as well as the theatrical and home entertainment performance ofIce Age: Dawn of the ~~Dinosaurs.The three months ended December 31, 2008 included the worldwide home entertainment release of~~~~Horton Hears a Who~~~~, the worldwide theatrical releases of~~~~The Day the Earth Stood Still, Australia~~ ~~and~~~~Max Payne~~Dinosaurs and the ~~domestic theatrical release~~home entertainment releases of~~Marley & Me~~X-Men Origins.:Wolverine andNight At the Museum: Battle of the Smithsonian.

For the three and ~~six~~nine months ended ~~December~~March 31, ~~2009,~~2010, the Filmed Entertainment segment’s operating income increased ~~$212~~$215 million, or 76%, and ~~$352~~$567 million, or 88%, respectively, as compared to the corresponding periods of fiscal 2009. The increases were primarily due to the revenue increases noted above, partially offset by ~~an increase in the~~increased amortization of production ~~and participation~~ costs, as well as higher participation and releasing costs. Also partially offsetting the revenue increase for the nine months ended March 31, 2010 were higher home entertainment manufacturing and marketing costs. ~~Higher releasing costs also partially offset revenue increases in the six months ended December 31, 2009.~~

Television(13% of the Company’s consolidated revenues in the first ~~six~~nine months of fiscal 2010 and 2009)

For the three and ~~six~~nine months ended ~~December~~March 31, ~~2009,~~2010, revenues at the Television segment increased ~~$113 million, or 10%, and $49~~$19 million, or 2%, and $68 million, or 2%, respectively, as compared to the corresponding periods of fiscal ~~2009,~~2009. The increases in the three and nine months ended March 31, 2010 were primarily due to ~~increased MLB and prime-time advertising revenues. MLB~~higher advertising revenues at the television stations owned by the Company, resulting from higher pricing due to continued improvements in the advertising market. Partially offsetting these increases were lower revenues from FOX due to a decrease in prime-time ratings. In addition, higher NFL revenues due to increased ~~primarily~~post-season ratings were more than offset by the absence of revenue from the Bowl Championship Series National Championship, which was broadcast on FOX in the prior year, and lower ratings for NASCAR. Also contributing to the revenue increase in the nine months ended March 31, 2010, were higher MLB revenues due to higher post-season ratings and the broadcast of two additional post-season ~~games. The increase in prime-time~~games, which were partially offset by lower political advertising revenues ~~was primarily~~ due to ~~additional commercial spots sold~~the 2008 presidential election.

The Television segment reported increases in operating income for the three and nine months ended March 31, 2010 of $31 million and $16 million, respectively, as compared to the corresponding periods of fiscal 2009. The ~~increase~~increases in ~~revenues during the six months ended December 31, 2009 was~~operating income were primarily due to the revenue increases noted above, partially offset by lower political advertising revenue due to the 2008 presidential election, as well as lower NFL revenues due to one less game broadcast and lower local advertising spending in the first quarter of fiscal 2010.

The Television segment reported an increase in operating income for the three months ended December 31, 2009 of $31 million as compared to the corresponding period of fiscal 2009. The increase in operating income was primarily due to the revenue increase noted above and the effects of cost containment initiatives, as well as improved operating results at MyNetworkTV, partially offset by higher prime-time entertainment programming and MLB programming costs. Operating income for the six months ended December 31, 2009 decreased $15 million, or 18%, as compared to the corresponding period of fiscal 2009, as the revenue increases, cost containment initiatives and improved operating results at MyNetworkTV were more than offset by higher prime-time entertainment and MLB programmingsports costs.

Cable Network Programming (21% and ~~19%~~20% of the Company’s consolidated revenues in the first ~~six~~nine months of fiscal 2010 and 2009, respectively)

For the three and ~~six~~nine months ended ~~December~~March 31, ~~2009,~~2010, revenues at the Cable Network Programming segment increased ~~$264~~$248 million, or ~~18%~~16%, and ~~$416~~$664 million, or ~~14%~~15%, respectively, as compared to the corresponding periods of fiscal 2009. The increases were primarily due to higher net affiliate and advertising revenues principally at Fox News, the ~~RSNs and the Company’s international cable operations. In addition, advertising revenue at the~~ Company’s international cable operations, ~~were higher.~~and FX, as well as higher net affiliate revenues at the RSNs.

For the three and ~~six~~nine months ended ~~December~~March 31, ~~2009,~~2010, Fox News’ revenues increased ~~27%~~17% and ~~28%~~24%, respectively, as compared to the corresponding periods of fiscal 2009, primarily due to ~~an increase~~increases in net affiliate and advertising revenues. Net affiliate revenues increased ~~67%~~22% and ~~71%~~49% for the three and ~~six~~nine months ended ~~December~~March 31, ~~2009,~~2010, respectively, primarily due to ~~an increase~~increases in the average rate per subscriber and the number of subscribers as compared to the corresponding periods of fiscal 2009. Advertising revenues increased 17% and 3% for the three and nine months ended March 31, 2010, respectively, primarily due to higher pricing. As of ~~December~~March 31, ~~2009,~~2010, Fox News reached approximately 98 million Nielsen households.

The Company’s international cable operations’ revenues increased 26% and 18% for the three and nine months ended March 31, 2010, respectively, as compared to the corresponding periods of fiscal 2009, primarily due to higher affiliate and advertising revenues. The higher affiliate revenues resulted from new channels in Europe and an increase in subscribers at existing channels in Latin America. The higher advertising revenues were primarily due to the strengthening of the advertising market in India and improved performance at the regional channels.

FX’s revenues increased 11% for both the three and nine months ended March 31, 2010 as compared to the corresponding periods of fiscal 2009, primarily due to increases in net affiliate and advertising revenues. Net affiliate revenues increased 17% for both the three and nine months ended March 31, 2010 primarily due to increases in the average rate per subscriber and the number of subscribers. Advertising revenues increased 9% and 4% for the three and nine months ended March 31, 2010, respectively, primarily due to additional commercial spots sold. As of March 31, 2010, FX reached approximately 96 million Nielsen households.

For the three and ~~six~~nine months ended ~~December~~March 31, ~~2009,~~2010, the RSNs’ revenues increased ~~12%~~13% and 9%10%, respectively, as compared to the corresponding periods of fiscal 2009, primarily due to ~~an increase~~increases in net affiliate revenues. Net affiliate revenues increased ~~13%~~16% and ~~12%~~13% for the three and ~~six~~nine months ended ~~December~~March 31, ~~2009,~~2010, respectively, as compared to the corresponding periods of fiscal 2009, primarily due to ~~an increase~~increases in the average rate per subscriber and the number of subscribers. Advertising revenues decreased 9%6% during the ~~six~~nine months ended ~~December~~March 31, ~~2009~~2010 as compared to the corresponding period of fiscal 2009, primarily due to reduced local advertising spending.

The Company’s international cable operations’ revenues increased 23% and 16% for the three and six months ended December 31, 2009, respectively, as compared to the corresponding periods of fiscal 2009, primarily due to an increase in net affiliate revenues resulting from subscriber growth. Advertising revenue was also higher in the three and six months ended December 31, 2009 due to the launch of two regional channels in India.

The Company’s other cable operations’ revenues increased as compared to the corresponding periods of fiscal 2009, primarily due to ~~an increase~~increases in net affiliate revenues.

For the three and ~~six~~nine months ended ~~December~~March 31, ~~2009,~~2010, operating income at the Cable Network Programming segment increased ~~$156~~$162 million, or ~~35%~~38%, and ~~$319~~$481 million, or ~~40%~~39%, respectively, as compared to the corresponding periods of fiscal 2009, primarily due to the revenue increases noted above. Also contributing to the increase during the ~~six~~nine months ended ~~December~~March 31, ~~2009~~2010 was the absence of a settlement relating to the

termination of a distribution agreement at the international cable operations during the first quarter of fiscal 2009. These increases were partially offset by increased operating expenses during the three and ~~six~~nine months ended ~~December~~March 31, ~~2009~~2010 of ~~$108~~$86 million and ~~$97~~$183 million, respectively, as compared to the corresponding periods of

fiscal 2009. The increases in operating expenses during the three and ~~six~~nine months ended ~~December~~March 31, ~~2009~~2010 were due to higher movie acquisition costs, sports rights amortization and original programming costs.

Direct Broadcast Satellite Television(12% of the Company’s consolidated revenues in the first ~~six~~nine months of fiscal 2010 and 2009)

For the three and ~~six~~nine months ended ~~December~~March 31, ~~2009,~~2010, SKY Italia’s revenues increased ~~$86~~$30 million, or 9%3%, and ~~$44~~$74 million, or 2%3%, respectively, as compared to the corresponding periods of fiscal 2009, ~~due to~~as favorable foreign exchange ~~movements.~~fluctuations were partially offset by lower local currency subscription revenue. SKY Italia had a decrease of approximately ~~16,000 in~~101,000 subscribers over the past twelve month period, which decreased SKY Italia’s total subscriber base to 4.7 million at ~~December~~March 31, ~~2009.~~2010. The total churn for the three months ended ~~December~~March 31, ~~2009~~2010 was approximately ~~213,000~~157,000 subscribers on an average subscriber base of ~~4.8~~4.7 million, as compared to churn of approximately ~~148,000~~186,000 subscribers on an average subscriber base of ~~4.7~~4.8 million in the corresponding period of fiscal 2009. Subscriber churn for the period represents the number of SKY Italia subscribers whose service was disconnected during the period. During the three and six months ended December 31, 2009, the weakening of the U.S. dollar against the Euro resulted in an increase in revenue of approximately 12% and 3%, respectively, as compared to the corresponding periods of fiscal 2009.

Average revenue per subscriber (“ARPU”) of approximately ~~€43~~€44 in the three months ended ~~December~~March 31, ~~2009 decreased from approximately €45 reported in~~2010 was consistent with the corresponding period of fiscal 2009. ARPU ~~of approximately €42 in~~for the ~~six~~nine months ended ~~December~~March 31, ~~2009~~2010 decreased to approximately €43 from approximately €44 reported in the corresponding period of fiscal 2009. The ~~decreases~~decrease in ARPU for the ~~three and six~~nine months ended ~~December~~March 31, ~~2009 were~~2010, was primarily due to a lower average tier mix, reduced pay-per-view revenue and the lagged effect of various pricing promotions. SKY Italia calculates ARPU by dividing total subscriber-related revenues for the period by the average subscribers for the period and dividing that amount by the number of months in the period. Subscriber-related revenues are comprised of total subscription revenue, pay-per-view revenue and equipment rental revenue for the period. Average subscribers are calculated for the respective periods by adding the beginning and ending subscribers for the period and dividing by two.

Subscriber acquisition costs per subscriber (“SAC”) of approximately ~~€440~~€270 and €330 in ~~the second quarter of fiscal~~three and nine months ended March 31, 2010, respectively, increased from the ~~second quarter~~corresponding periods of fiscal 2009, primarily due to higher marketing costs on a per subscriber basis. SAC is calculated by dividing total subscriber acquisition costs for a period by the number of gross SKY Italia subscribers added during the period. Subscriber acquisition costs include the cost of the commissions paid to retailers and other distributors, the cost of equipment sold directly by SKY Italia to subscribers and the costs related to installation and acquisition advertising, net of any upfront activation fee. SKY Italia excludes the value of equipment capitalized under SKY Italia’s equipment lease program, as well as payments and the value of returned equipment related to disconnected lease program subscribers from subscriber acquisition costs.

For the three and ~~six~~nine months ended ~~December~~March 31, ~~2009,~~2010, SKY Italia’s operating income decreased ~~$40~~$28 million and ~~$77~~$105 million, respectively, as compared to the corresponding periods of fiscal 2009. The decrease for the three months ended March 31, 2010 was primarily due to lower local currency subscription revenue as overall costs, in local currency, were flat as higher sports programming costs related to the 2010 Winter Olympics were offset by lower basic programming costs and subscriber related costs. The decrease for the nine months ended March 31, 2010 was primarily due to lower local currency subscription revenue and higher sports rights amortization.

Integrated Marketing Services(3% and 4% of the Company’s consolidated revenues in the first nine months of fiscal 2010 and 2009, respectively)

For the three and nine months ended March 31, 2010, revenues at the Integrated Marketing Services segment increased $19 million, or 6%, and $34 million, or 4%, respectively, as compared to the corresponding periods of fiscal 2009, primarily due to ~~an increase~~increases in ~~operating expenses. The increase in operating expenses was primarily due to higher programming costs~~volume and premium service initiatives, as well as higher sports rights amortization. During the three and six months ended December 31, 2009, the weakening of the U.S. dollar against the Euro resulted in a decrease in operating income of approximately 30% and 6%, respectively, as compared to the corresponding periods of fiscal 2009.

~~Integrated Marketing Services~~~~(4% of the Company’s consolidated revenues in the first six months of fiscal 2010 and 2009)~~

For the three and six months ended December 31, 2009, revenues at the Integrated Marketing Services segment increased $7 million, or 2%, and $15 million, or 3%, respectively, as compared to the corresponding

~~periods of fiscal 2009, primarily due to an increase in volume~~rates of in-store marketing products sold, partially offset by lower revenues for free-standing insert products.

For the three months ended March 31, 2010, operating income at the Integrated Marketing Services segment increased $11 million, or 11%, as compared to the corresponding period of fiscal 2009, primarily due to the revenue increase noted above, as well as lower paper costs, partially offset by higher commissions for in-store marketing products. Operating income at the Integrated Marketing Services segment decreased ~~$500 million and $495~~$484 million for the ~~three and six~~nine months ended ~~December~~March 31, ~~2009, respectively,~~2010 as compared to the corresponding ~~periods~~period of fiscal 2009, as the revenue ~~increases~~increase noted above ~~were~~was more than offset by the $500 million charge relating to the settlement of the Valassis litigation.

Newspapers and Information Services(~~19%~~18% and ~~21%~~20% of the Company’s consolidated revenues in the first ~~six~~nine months of fiscal 2010 and 2009, respectively)

For the three and nine months ended ~~December~~March 31, ~~2009,~~2010, revenues at the Newspapers and Information Services segment increased ~~$150~~$257 million, or ~~10%~~21%, and $105 million, or 2%, respectively, as compared to the corresponding ~~period~~periods of fiscal 2009, primarily due to favorable foreign exchange fluctuations at the Australian newspapers. For the six months ended December 31, 2009, revenues at the Newspapers and Information Services segment decreased $152 million, or 5%, as compared to the corresponding period of fiscal 2009, primarily due to general reductions in advertising spending.

Operating income at the Newspapers and Information Services segment increased ~~$59~~$102 million ~~or 30%,~~and $45 million for the three and nine months ended ~~December~~March 31, ~~2009~~2010, respectively, as compared to the corresponding ~~period~~periods of fiscal 2009, primarily due to the revenue increases noted above, as well as the impact of cost containment initiatives. Operating income decreased $57 million, or 17%, for the six months ended December 31, 2009 as compared to the corresponding period of fiscal 2009, primarily due to the decrease in revenues noted above, partially offset by the impact of cost containment initiatives.

For the three and ~~six~~nine months ended ~~December~~March 31, ~~2009,~~2010, the Australian newspapers’ revenues increased ~~32%~~44% and 3%13%, respectively, as compared to the corresponding periods of fiscal 2009, primarily due to favorable foreign exchange fluctuations. The weakening of the U.S. dollar against the Australian dollar resulted in revenue increases of approximately ~~36%~~40% and ~~12%~~19% for the three and ~~six~~nine months ended ~~December~~March 31, ~~2009, respectively, as compared~~2010, respectively. The increase for the three months ended March 31, 2010 also reflects higher display advertising revenues due to ~~the corresponding periods of fiscal 2009. These increases were~~higher pricing that was partially offset by lower circulation ~~and advertising revenues.~~revenue. Local currency revenues decreased for ~~both~~ the ~~three and six~~nine months ended ~~December~~March 31, ~~2009.~~2010 due to lower circulation and advertising revenues as a result of a decrease in volume. For the three months ended ~~December~~March 31, ~~2009,~~2010, the Australian newspapers’ operating income increased ~~19%~~44% as compared to the corresponding period of fiscal 2009, primarily due to the revenue ~~increases~~increase noted ~~above.~~above, offset by higher newsprint costs and costs associated with various initiatives. For the ~~six~~nine months ended ~~December~~March 31, ~~2009,~~2010, the Australian newspapers operating income decreased ~~19%~~6% as compared to the corresponding period of fiscal 2009, primarily due to ~~lower advertising revenues,~~the revenue decrease noted above, partially offset by a reduction in operating costs resulting from cost containment initiatives. The weakening of the U.S. dollar against the Australian dollar resulted in operating income increases of approximately 43% and 16% for the three and nine months ended March 31, 2010, respectively.

For the three and ~~six~~nine months ended ~~December~~March 31, ~~2009,~~2010, the U.K. newspapers’ revenues increased 2%15% and decreased ~~10%~~3%, respectively, as compared to the corresponding periods of fiscal 2009. The increase for the three months ended ~~December~~March 31, ~~2009 as compared to the corresponding period of fiscal 2009~~2010 was primarily due to ~~the impact of~~ favorable foreign exchange ~~fluctuations.~~fluctuations and higher display advertising revenues, resulting from an increase in volume, partially offset by lower circulation revenues. The decrease for the ~~six~~nine months ended ~~December~~March 31, ~~2009 as compared to the corresponding period of fiscal 2009~~2010 was primarily due to lower circulation ~~revenue and lower classified and display advertising revenues across most titles.~~revenue. Operating income at the U.K. newspapers for the three and nine months ended ~~December~~March 31, ~~2009~~2010 increased ~~46%~~ as compared to the corresponding ~~period~~periods of fiscal 2009, primarily due to lower marketing and newsprint costs and the impact of cost containment initiatives. ~~Operating~~The weakening of the U.S. dollar against the British pound resulted in revenue and operating income increases of approximately 12% and 35%, respectively, for the ~~six~~three months ended ~~December~~March 31, 2009 decreased 26% as compared to the corresponding period of fiscal 2009, primarily due to higher newsprint costs due to an increase in newsprint price partially offset by lower marketing expenses and the impact of cost containment initiatives.2010.

During the three months ended ~~December~~March 31, ~~2009,~~2010, revenues at Dow Jones & Company, Inc (“Dow Jones”) ~~were relatively consistent~~increased 7% as compared with the corresponding period of fiscal 2009, asprimarily due to a 25% increased advertising revenue resulting from higher volume and higher circulation revenues atThe Wall Street Journal~~were~~

resulting from higher prices,partially offset by lower information services revenues. ~~Dow Jones’ operating results for the three months ended December 31, 2009 increased 26% from the corresponding period of fiscal~~

~~2009, primarily due to cost containment initiatives, lower headcount and other employee related costs.~~ Revenues for the ~~six~~nine months ended ~~December~~March 31, ~~2009~~2010 decreased 6%2% as compared to the corresponding period of fiscal 2009, primarily due to lower advertising ~~revenues~~revenue atThe Wall Street Journal ~~and~~resulting from lower volume, as well as lower information services ~~revenue,~~revenue. The decrease for the nine months ended March 31, 2010 was partially offset by higher circulation revenues resulting from higher pricing atThe Wall Street Journaland higher digital advertising revenue. Dow Jones’ operating results for the ~~six~~three and nine months ended ~~December~~March 31, ~~2009 were relatively consistent with those of~~2010 increased from the corresponding ~~period~~periods of fiscal 2009, ~~as the revenue decreases noted above were offset by~~primarily due to cost containment initiatives and lower ~~headcount and other employee related~~newsprint costs.

Book Publishing(4% of the Company’s consolidated revenues in the first ~~six~~nine months of fiscal 2010 and 2009)

For the three and ~~six~~nine months ended ~~December~~March 31, ~~2009,~~2010, revenues at the Book Publishing segment increased ~~$76~~$33 million, or ~~25%~~14%, and ~~$71~~$104 million, or ~~11%~~12%, respectively, as compared to the corresponding periods of fiscal 2009. The increases were primarily due to higher sales at the General Books and Children’s ~~divisions.~~divisions and favorable foreign exchange fluctuations. The increases at the General Books division were primarily due to the success ofGoing Rogue by Sarah Palin andGame Change by John Heilemann and Mark Halperin, as well as higher electronic book sales.Strong ~~backlist~~ sales ofWhere the Wild Things Are by Maurice Sendak andThe Vampire Diaries by L.J. Smith led to the increases at the Children’s division. During the three months ended ~~December~~March 31, ~~2009,~~2010, HarperCollins had 4861 titles onThe New York Times Bestseller List with ~~seven~~eight titles reaching the number one position. During the ~~six~~nine months ended ~~December~~March 31, ~~2009,~~2010, HarperCollins had 78116 titles onThe New York Times Bestseller List with ~~eleven~~16 titles reaching the number one position.

Operating income for the three and ~~six~~nine months ended ~~December~~March 31, ~~2009~~2010, increased ~~$42~~$12 million and ~~$59~~$71 million, respectively, as compared to the corresponding periods of fiscal 2009, primarily due to the revenue increases noted above and operating cost reductions resulting from cost containment initiatives, partially offset by higher royalty and manufacturing costs resulting from ~~the increased revenues.~~higher sales.

Other (5% and 9%8% of the Company’s consolidated revenues in the first ~~six~~nine months of fiscal 2010 and 2009, respectively)

For the three and ~~six~~nine months ended ~~December~~March 31, ~~2009,~~2010, revenues at the Other segment decreased ~~$296~~$144 million, or 31%, and ~~$615~~$759 million, or 39%, respectively, as compared to the corresponding periods of fiscal ~~2009. The decreases were~~2009, primarily due to decreased revenues from NDS ~~News Outdoor~~ and the Company’s digital media properties. The decreases at NDS were due to the absence of ~~$188 million and $352 million of~~ revenues for the three and ~~six~~nine months ended ~~December~~March 31, 2009, ~~respectively,~~ reflecting the sale of a portion of the Company’s ownership stake in NDS in February 2009. As a result of the sale, the Company’s portion of NDS’s operating results subsequent to February 2009 is included within Equity earnings (losses) of affiliates. The revenue decreases at the Company’s digital media properties were principally due to lower search ~~and advertising~~ revenues. ~~News Outdoor’s revenue decreases were primarily due to a general downturn in the advertising markets and unfavorable foreign exchange fluctuations.~~

Operating results for the three and ~~six~~nine months ended ~~December~~March 31, ~~2009~~2010 decreased ~~$87~~$62 million and ~~$112~~$174 million, respectively, as compared to the corresponding periods of fiscal 2009. The decreases were primarily due to ~~the absence of~~lower operating results from NDS and ~~lower operating results from~~ the Company’s digital media properties. The decreases at NDS were due to the absence of ~~$32~~$60 million and ~~$62~~$121 million of ~~NDS’s~~ operating income during the three and ~~six~~nine months ended ~~December~~March 31, ~~2009,~~2010, respectively, resulting from the sale of a portion of the Company’s ownership stake in NDS as noted above. The decreases at the Company’s digital media properties of $32 million and ~~$52~~$84 million for the three and ~~six~~nine months ended ~~December~~March 31, ~~2009,~~2010, respectively, were primarily due to the revenue declines noted ~~above.~~above partially offset by cost containment initiatives.

The United States and global economies have undergone a period of economic uncertainty, and the related capital markets have experienced significant volatility. In certain of the markets in which the Company’s businesses operate, there was a weakening in the overall economic climate resulting in pressure on labor markets, retail sales and consumer ~~confidence. These recent economic trends reduced~~confidence, which impacted advertising revenues at the Company’s Television, Newspapers and Information Services and Other segments, as well as the retail sales of books and DVDs. Despite these trends, the Company believes the cash generated internally and available financing will continue to provide the Company sufficient liquidity for the foreseeable future.

The Company’s principal source of liquidity is internally generated funds. The Company also has a $2.25 billion revolving credit facility, which expires in May 2012, and has access to various film co-production alternatives to supplement its cash flows. In addition, the Company has access to the worldwide capital markets, subject to market conditions. As of ~~December~~March 31, ~~2009,~~2010, the availability under the revolving credit facility was reduced by ~~stand-by~~standby letters of credit issued which totaled approximately ~~$73~~$74 million. As of ~~December~~March 31, ~~2009,~~2010, the Company was in compliance with all of the covenants under the revolving credit facility, and it does not anticipate any violation of such covenants. The Company’s internally generated funds are highly dependent upon the state of the advertising markets and public acceptance of its film and television products.

The principal uses of cash that affect the Company’s liquidity position include the following: investments in the production and distribution of new feature films and television programs; the acquisition of and payments under programming rights agreements for entertainment and sports programming; paper purchases; operational expenditures including employee costs; capital expenditures; interest expense; income tax payments; investments in associated entities; dividends; acquisitions; and stock repurchases.

The Company has evaluated, and expects to continue to evaluate, possible acquisitions and dispositions of certain businesses. Such transactions may be material and may involve cash, the Company’s securities or the assumption of additional indebtedness.

Net cash provided by ~~(used in)~~ operating activities for the ~~six~~nine months ended ~~December~~March 31, ~~2009~~2010 and ~~2008~~2009 was as follows (in millions):

The increase in net cash provided by operating activities during the ~~six~~nine months ended ~~December~~March 31, ~~2009~~2010 as compared to the corresponding period of fiscal 2009 primarily reflects higher worldwide theatrical receipts at the Filmed Entertainment segment, higher affiliate receipts at the Cable Network Programming segment, higher receipts at the Book Publishing segment and lower tax payments. The increase was partially offset by the $500 million payment relating to the settlement of the Valassis litigation and lower subscriber receipts at the DBS segment.

Net cash used in investing activities for the ~~six~~nine months ended ~~December~~March 31, ~~2009~~2010 and ~~2008~~2009 was as follows (in millions):


For the six months ended December 31,	2009			2008
For the nine months ended March 31,							2010			2009
Net cash used in investing activities	$	(648	)	$	(147	)	$	(317	)	$	(42	)

The increase in net cash used in investing activities during the ~~six~~nine months ended ~~December~~March 31, ~~2009~~2010 was primarily due to the absence of proceeds from the sale of eight of the Company’s television stations in July 2008, the absence of net proceeds received from the sale of a portion of the Company’s interest in NDS in February 2009 and increased investment in Sky Deutschland, partially offset by cash received from the sale of the financial indexes businesses and lower property, plant and equipment purchases.

Net cash (used in) provided by ~~(used in)~~ financing activities for the ~~six~~nine months ended ~~December~~March 31, ~~2009~~2010 and ~~2008~~2009 was as follows (in millions):

The increase in net cash ~~provided by~~used in financing activities during the ~~six~~nine months ended ~~December~~March 31, ~~2009~~2010 was primarily due to the redemption of the majority of the Company’s 0.75% Senior Exchangeable BUCS and repayment of $150 million Senior Notes due March 2010, partially offset by the issuance of $600 million 6.90% Senior Notes due 2039 and $400 million 5.65% Senior Notes due 2020 in August ~~2009, partially offset by the repayment of borrowings related to bank loans.~~2009.

The Company declared a dividend of $0.06 per share on both its Class A Common Stock and its Class B Common Stock in the three months ended September 30, 2009, which was paid in October 2009 to stockholders of record on September 9, 2009. The total aggregate dividend paid to stockholders in October 2009 was approximately $157 million.

~~In February 2010, the~~The Company ~~announced that it had it increased its~~declared a dividend toof $0.075 per share on both ~~its~~the Class A Common Stock and ~~its~~the Class B Common ~~Stock. This will increase~~Stock in the three months ended March 31, 2010, which was paid in April 2010 to stockholders of record on March 10, 2010. The total aggregate ~~cash dividends expected to be~~dividend paid to stockholders in April 2010 bywas approximately ~~25%.~~$196 million.


	For the six months ended December 31,						For the nine months ended March 31,
	2009			2008			2010			2009
	(in millions)						(in millions)
Borrowings
Notes due 2039	$	593		$	—
Notes due 2020		396			—
Notes due August 2039							$	593		$	—
Notes due August 2020								396			—
Notes due March 2019								—			690
Notes due March 2039								—			283
Bank loans		—			30			—			30
All other		21			17			35			29

Total borrowings	$	1,010		$	47		$	1,024		$	1,032

Repayments of borrowings
BUCS							$	(1,632	)	$	—
Notes due March 2010								(150	)		—
Notes due October 2008	$	—		$	(200	)		—			(200	)
Bank loans		(64	)		(32	)		(64	)		(64	)
All other		(11	)		(23	)		(23	)		(72	)

Total repayment of borrowings	$	(75	)	$	(255	)	$	(1,869	)	$	(336	)

~~NAI’s~~In March 2010, the Company redeemed approximately 98.6% of its 0.75% Senior Exchangeable BUCS (“BUCS”) pursuant to a holders’ redemption right for an aggregate of approximately $1.63 billion in the amount of $1,641 million are classified as current borrowings. The holders of the BUCS have the right to tender the BUCS for redemption on March 15, 2010 for payment of the adjusted liquidation preference of the BUCS plus accrued and unpaid distributions and any final period distributioncash. Subsequently, in at the Company’s election, cash, ordinary shares of BSkyB, Class A Common Stock or any combination thereof. The Company may redeem the BUCS for cash, ordinary shares of BSkyB or a combination thereof in whole or in part, at any time on or after March 20, 2010, at the adjusted liquidation preference of the BUCS plus any accrued and unpaid distributions and any final period distribution thereon. On

~~February 1,~~April 2010, the Company ~~announced that NAI gave notice to holders~~redeemed the remaining outstanding BUCS for an aggregate of approximately $23 million in cash.

In April 2010, the ~~BUCS that any BUCS tendered at~~Company redeemed all of its outstanding 5% TOPrS for an aggregate of approximately $134 million in cash.

In March 2010, the option of the holders on the March 15, 2010 holder redemption date would be redeemed for cash at the specified redemption amount equal to $1,013.48 per BUCS, which represents the amount equal to the adjusted liquidation preference of such BUCS plus an amount equal to any accrued and unpaid distributions and any final period distribution.

~~The Company’s~~Company retired its $150 million 4.75% Senior Debentures due ~~March 2010 are classified as current borrowings.~~2010.

The table below summarizes the Company’s credit ratings as of ~~December~~March 31, ~~2009.~~2010.

In May 2007, NAI entered into a credit agreement (the “Credit Agreement”), among NAI as Borrower, the Company as Parent Guarantor, the initial lenders named therein (the “Lenders”), Citibank, N.A. as Administrative Agent and JPMorgan Chase Bank, N.A. as Syndication Agent. The Credit Agreement provides a $2.25 billion unsecured revolving credit facility with a sub-limit of $600 million available for the issuance of letters of credit. NAI may request an increase in the amount of the credit facility up to a maximum amount of $2.5 billion. Borrowings are in U.S. dollars only, while letters of credit are issuable in U.S. dollars or Euros. The significant terms of the agreement include the requirement that the Company maintain specific leveraging ratios and limitations on secured indebtedness. The Company pays a facility fee of 0.08% regardless of facility usage. The Company pays interest for borrowings at LIBOR plus 0.27% and pays commission fees on letters of credit at 0.27%. The Company pays an additional fee of 0.05% if borrowings under the facility exceed 50% of the committed facility. The interest and fees are based on the Company’s current debt rating. The maturity date is in May 2012; however, NAI may request that the Lenders’ commitments be renewed for up to two additional one year periods. As of ~~December~~March 31, ~~2009,~~2010, approximately ~~$73~~$74 million in standby letters of credit, for the benefit of third parties, was outstanding.

On January 30, 2010, the Company announced that its News America Marketing unit had settled its litigation with Valassis Communications, Inc. for $500 million. The Company expects to pay this amount in fiscal 2010.

Other than as previously disclosed in the notes to the Company’s unaudited consolidated financial statements, the Company’s commitments have not changed significantly from disclosures included in the ~~2009~~Company’s Current Report on Form ~~10-K.~~8-K filed with the SEC on February 12, 2010.

~~The~~Other than as previously disclosed in the notes to the Company’s unaudited consolidated financial statements, the Company’s guarantees have not changed significantly from disclosures included in the ~~2009~~Company’s Current Report on Form ~~10-K.~~8-K filed with the SEC on February 12, 2010.

Other than as disclosed in the notes to the accompanying unaudited consolidated financial statements, the Company is party to several purchase and sale arrangements which become exercisable over the next ten years by the Company or the counter-party to the agreement. In the next twelve months, none of these arrangements that become exercisable are material.

The Company’s operations are subject to tax in various domestic and international jurisdictions and as a matter of course, the Company is regularly audited by federal, state and foreign tax authorities. The Company believes it has appropriately accrued for the expected outcome of all other pending tax matters that it can estimate at this time and does not currently anticipate that the ultimate resolution of other pending tax matters will have a material adverse effect on its consolidated financial condition, future results of operations or liquidity.

In accordance with ASC 350 “Intangibles—Goodwill and Other,” the Company’s goodwill and indefinite-lived intangible assets, which include FCC licenses, are reviewed annually for impairment or earlier if events occur or circumstances change that would more likely than not reduce the fair value of the Company’s goodwill and indefinite-lived intangibles below their carrying amount. During the second quarter of fiscal 2009, the Company performed an interim impairment review in advance of its annual impairment assessment because the Company believed events had occurred and circumstances had changed that would more likely than not reduce the fair value of the Company’s goodwill and indefinite-lived intangible assets below their carrying amounts. These events included: (a) the decline of the price of the Class A Common Stock and Class B Common Stock below the carrying value of the Company’s stockholders’ equity; (b) the reduced growth in advertising revenues; (c) the decline in the operating profit margins in some of the Company’s advertising-based businesses; and (d) the decline in the valuations of other television stations, newspapers and advertising-based companies as determined by the current trading values of those companies. In addition, the Company also performed an annual impairment assessment of its goodwill and indefinite-lived intangible assets.

The Company’s goodwill impairment reviews are determined using a two-step process. The first step of the process is to compare the fair value of a reporting unit with its carrying amount, including goodwill. In performing the first step, the Company determines the fair value of a reporting unit by primarily using a discounted cash flow analysis and market-based valuation approach methodologies. Determining fair value requires the exercise of significant judgments, including judgments about appropriate discount rates, perpetual growth rates, relevant comparable company earnings multiples and the amount and timing of expected future cash flows. The cash flows employed in the analyses are based on the Company’s estimated outlook and various growth rates have been assumed for years beyond the long-term business plan period. Discount rate assumptions are based on an assessment of the risk inherent in the future cash flows of the respective reporting units. In assessing the reasonableness of its determined fair values, the Company evaluates its results against other value indicators, such as comparable public company trading values.

The Company performed impairment reviews consisting of a comparison of the estimated fair value of the Company’s FCC licenses with their carrying amount on a station-by-station basis using a discounted cash flow

valuation method, assuming a hypothetical start-up scenario for a broadcast station in each of the markets the

Company operates in. The significant assumptions used were the discount rate and terminal growth rates and operating margins, as well as industry data on future advertising and other revenues in the markets where the Company owns television stations. These assumptions were based on actual historical performance in each market and estimates of future performance in each market. These assumptions took into account the weakening of advertising markets that had affected both the national and local markets in which the Company’s stations operate.

As a result of the impairment reviews performed, the Company recorded non-cash impairment charges of approximately $8.9 billion ($7.2 billion, net of tax) during the fiscal year ended June 30, 2009. The charges consisted of a write-down of the Company’s indefinite-lived intangible assets (primarily FCC licenses in the Television segment) of $4.6 billion, a write-down of $4.1 billion of goodwill (primarily in the Newspapers and Information Services and Other segments) and a write-down of the Newspapers and Information Services segment’s fixed assets of $185 million in accordance with ASC 360 “Property, Plant and Equipment.” The factors that contributed to the fiscal 2009 impairment charges and the key assumptions that drive fair value have improved during the ~~six~~nine months ended ~~December~~March 31, ~~2009;~~2010; however, the following segments have reporting units that continue to be at risk for future impairment as the fair value of a reporting unit exceeded its carrying amount by less than 10% as of the last goodwill impairment assessment performed: ~~Newspapers and Information Services; Television;~~Television and Cable Network Programming. In addition, the Company continues to monitor certain of its reporting units in the Other segment due to the impairment charges recorded in fiscal 2009. Goodwill amounts by segment at risk for future impairment are as follows: ~~Newspapers and Information Services ($1.9 billion);~~ Television ($1.9 billion); Cable Network Programming ($0.9 billion); and Other ($0.6 billion). The Company will continue to monitor its goodwill and intangible assets for possible future impairment.

See Note 1—Basis of Presentation to the accompanying unaudited consolidated financial statements for discussion of recent accounting pronouncements.

The Company has exposure to several types of market risk: changes in foreign currency exchange rates, interest rates, and stock prices. The Company neither holds nor issues financial instruments for trading purposes.

The following sections provide quantitative information on the Company’s exposure to foreign currency exchange rate risk, interest rate risk and stock price risk. The Company makes use of sensitivity analyses that are inherently limited in estimating actual losses in fair value that can occur from changes in market conditions.

The Company conducts operations in four principal currencies: the U.S. dollar; the British pound sterling; the Euro; and the Australian dollar. These currencies operate as the functional currency for the Company’s U.S., United Kingdom, Italian and Australian operations, respectively. Cash is managed centrally within each of the four regions with net earnings reinvested locally and working capital requirements met from existing liquid funds. To the extent such funds are not sufficient to meet working capital requirements, drawdowns in the appropriate local currency are available from intercompany borrowings. Since earnings of the Company’s Australian, United Kingdom and Italian operations are expected to be reinvested in those businesses indefinitely, the Company does not hedge its investment in the net assets of those foreign operations.

At ~~December~~March 31, ~~2009,~~2010, the Company’s outstanding financial instruments with foreign currency exchange rate risk exposure had an aggregate fair value of ~~$71~~$145 million (including the Company’s non-U.S. dollar-denominated fixed rate debt). The potential increase in the fair values of these instruments resulting from a 10% adverse change in quoted foreign currency exchange rates would be approximately ~~$6.9~~$12.7 million at ~~December~~March 31, ~~2009.~~2010.

The Company’s current financing arrangements and facilities include approximately ~~$15.3~~$13.5 billion of outstanding debt with fixed interest and the Credit Agreement, which carries variable interest. Fixed and variable rate debts are impacted differently by changes in interest rates. A change in the interest rate or yield of fixed rate debt will only impact the fair market value of such debt, while a change in the interest rate of variable debt will impact interest expense, as well as the amount of cash required to service such debt. As of ~~December~~March 31, ~~2009,~~2010, substantially all of the Company’s financial instruments with exposure to interest rate risk were denominated in U.S. dollars and had an aggregate fair value of approximately ~~$16.3~~$14.7 billion. The potential change in fair market value for these financial instruments from an adverse 10% change in quoted interest rates across all maturities, often referred to as a parallel shift in the yield curve, would be approximately ~~$791~~$879 million at ~~December~~March 31, ~~2009.~~2010.

The Company has common stock investments in several publicly traded companies that are subject to market price volatility. These investments principally represent the Company’s equity affiliates and had an aggregate fair value of approximately ~~$7.6~~$7.7 billion as of ~~December~~March 31, ~~2009.~~2010. A hypothetical decrease in the market price of these investments of 10% would result in a fair value of approximately ~~$6.8~~$6.9 billion. Such a hypothetical decrease would result in a before tax decrease in comprehensive income of approximately $24 million, as any changes in fair value of the Company’s equity affiliates are not recognized unless deemed other-than-temporary, as these investments are accounted for under the equity method.

In accordance with ASC 815, ~~“Derivatives and Hedging,”~~ the Company has recorded the conversion feature embedded in its exchangeable debentures in other liabilities. At ~~December~~March 31, ~~2009,~~2010, the fair value of this conversion feature was nil. This conversion feature is sensitive to movements in the share price of one of the Company’s publicly traded equity affiliates. A significant variance in the price of the underlying stock could have a material impact on the operating results of the Company.

The Company’s receivables did not represent significant concentrations of credit risk at ~~December~~March 31, ~~2009~~2010 or June 30, 2009 due to the wide variety of customers, markets and geographic areas to which the Company’s products and services are sold. However, in light of the recent turmoil in the domestic and global economies, the Company’s estimates and judgments with respect to the collectability of its receivables have become subject to greater uncertainty than in more stable periods.

The Company’s management, with the participation of the Company’s Chairman and Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15(d)-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this quarterly report. Based on such evaluation, the Company’s Chairman and Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such period, the Company’s disclosure controls and procedures were effective in recording, processing, summarizing and reporting, on a timely basis, information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act and were effective in ensuring that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including the Company’s Chairman and Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

There has been no change in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15(d)-15(f) under the Exchange Act) during the Company’s ~~second~~third quarter of fiscal 2010 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

See Note 13-Contingencies to the unaudited consolidated financial statements, which is incorporated herein by reference.

Prospective investors should consider carefully the risk factors set forth below before making an investment in the Company’s securities.

A Decline in Advertising Expenditures Could Cause the Company’s Revenues and Operating Results to Decline Significantly in any Given Period or in Specific Markets.

media and entertainment choices available to audiences. Some of these devices and technologies allow users to view television or motion pictures from a remote location or on a time-delayed basis and provide users the ability to fast-forward, rewind, pause and skip programming. These technological developments are increasing the number of media and entertainment choices available to audiences and may cause changes in consumer behavior that could affect the attractiveness of the Company’s offerings to viewers, advertisers and/or distributors. A decrease in advertising expenditures or reduced demand for the Company’s offerings can lead to a reduction in pricing and advertising spending, which could have an adverse effect on the Company’s businesses.

Global Economic Conditions May Have a Continuing Adverse Effect on the Company’s Business.

The United States and global economies have undergone a period of economic uncertainty, which caused, among other things, a general tightening in the credit markets, limited access to the credit markets, lower levels of liquidity, increases in the rates of default and bankruptcy, lower consumer and business spending and lower consumer net worth. The resulting pressure on the labor and retail markets and the downturn in consumer confidence weakened the economic climate in certain markets in which the Company does business and has had and may continue to have an adverse effect on the Company’s business, results of operations, financial condition and liquidity. A continued decline in these economic conditions could further impact the Company’s business, reduce the Company’s advertising and other revenues and negatively impact the performance of its motion pictures and home entertainment releases, television operations, newspapers, books and other consumer products. In addition, these conditions could also impair the ability of those with whom the Company does business to satisfy their obligations to the Company. As a result, the Company’s results of operations may be adversely affected. Although the Company believes that its operating cash flow and current access to capital and credit

markets, including the Company’s existing credit facility, will give it the ability to meet its financial needs for the foreseeable future, there can be no assurance that continued or increased volatility and disruption in the global capital and credit markets will not impair the Company’s liquidity or increase its cost of borrowing.

~~A Decline in Advertising Expenditures Could Cause the Company’s Revenues and Operating Results to Decline Significantly in any Given Period or in Specific Markets.~~

The Company derives substantial revenues from the sale of advertising on or in its television stations, broadcast and cable networks, newspapers, integrated marketing services, digital media properties and DBS services. Expenditures by advertisers tend to be cyclical, reflecting overall economic conditions, as well as budgeting and buying patterns. A decline in the economic prospects of advertisers or the economy in general could alter current or prospective advertisers’ spending priorities. Demand for the Company’s products is also a factor in determining advertising rates. For example, ratings points for the Company’s television stations, broadcast and cable networks and circulation levels for the Company’s newspapers are factors that are weighed when determining advertising rates, and with respect to the Company’s television stations and broadcast and television networks, when determining the affiliate rates received by the Company. In addition, newer technologies, including new video formats, streaming and downloading capabilities via the Internet, video-on-demand, personal video recorders and other devices and technologies are increasing the number of media and entertainment choices available to audiences. Some of these devices and technologies allow users to view television or motion pictures from a remote location or on a time-delayed basis and provide users the ability to fast-forward, rewind, pause and skip programming. These technological developments are increasing the number of media and entertainment choices available to audiences and may cause changes in consumer behavior that could affect the attractiveness of the Company’s offerings to viewers, advertisers and/or distributors. A decrease in advertising expenditures or reduced demand for the Company’s offerings can lead to a reduction in pricing and advertising spending, which could have an adverse effect on the Company’s businesses.

Acceptance of the Company’s Film and Television Programming by the Public is Difficult to Predict, Which Could Lead to Fluctuations in Revenues.

Feature film and television production and distribution are speculative businesses since the revenues derived from the production and distribution of a feature film or television series depend primarily upon its acceptance by the public, which is difficult to predict. The commercial success of a feature film or television series also depends upon the quality and acceptance of other competing films and television series released into the marketplace at or near the same time, the availability of a growing number of alternative forms of entertainment and leisure time activities, general economic conditions and their effects on consumer spending and other tangible and intangible factors, all of which can change and cannot be predicted with certainty. Further, the theatrical success of a feature film and the audience ratings for a television series are generally key factors in generating revenues from other distribution channels, such as home entertainment and premium pay television, with respect to feature films, and syndication, with respect to television series.

The Company Could Suffer Losses Due to Asset Impairment Charges for Goodwill, Intangible Assets (including FCC Licenses) and Programming.

In accordance with applicable generally accepted accounting principles, the Company performs an annual impairment assessment of its recorded goodwill and indefinite-lived intangible assets, including FCC licenses, during the fourth quarter of each fiscal year. The Company also continually evaluates whether current factors or indicators, such as the prevailing conditions in the capital markets, require the performance of an interim impairment assessment of those assets, as well as other investments and other long-lived assets. Management believes that recent trends in the reduced growth in advertising revenues and the decline in profit margins in some of the Company’s advertising-based businesses and valuations of its television stations, newspapers, and other advertising-based companies have negatively affected investors’ outlooks on the Company’s market value. Any significant shortfall, now or in the future, in advertising revenue and/or the expected popularity of the

programming for which the Company has acquired rights could lead to a downward revision in the fair value of certain reporting units, particularly those in the Newspapers and Information Services, Television and Cable Network Programming segments. A downward revision in the fair value of a reporting unit, indefinite-lived intangible

assets, investments or long-lived assets could result in an impairment and a non-cash charge would be required. Any such charge could be material to the Company’s reported net earnings.

Fluctuations in Foreign Exchange Rates Could Have an Adverse Effect on the Company’s Results of Operations.

The Company has significant operations in a number of foreign jurisdictions and certain of the Company operations are conducted in foreign currencies. The value of these currencies fluctuate relative to the U.S. dollar. As a result, the Company is exposed to exchange rate fluctuations, which could have an adverse effect on its results of operations in a given period or in specific markets.

The Loss of Carriage Agreements Could Cause the Company’s Revenue and Operating Results to Decline Significantly in any Given Period or in Specific Markets.

The Company is dependent upon the maintenance of affiliation agreements with third party owned television stations and there can be no assurance that these affiliation agreements will be renewed in the future on terms acceptable to the Company. The loss of a significant number of these affiliation arrangements could reduce the distribution of FOX and MyNetworkTV and adversely affect the Company’s ability to sell national and local advertising time. Similarly, the Company’s cable networks maintain affiliation and carriage arrangements that enable them to reach a large percentage of cable and direct broadcast satellite households across the United States. The loss of a significant number of these arrangements or the loss of carriage on basic programming tiers could reduce the distribution of the Company’s cable networks, which may adversely affect those networks’ revenues from subscriber fees and their ability to sell national and local advertising time.

The Inability to Renew Sports Programming Rights Could Cause the Company’s Advertising Revenue to Decline Significantly in any Given Period or in Specific Markets.

The sports rights contracts between the Company, on the one hand, and various professional sports leagues and teams, on the other, have varying duration and renewal terms. As these contracts expire, renewals on favorable terms may be sought; however, third parties may outbid the current rights holders for the rights contracts. In addition, professional sports leagues or teams may create their own networks or the renewal costs could substantially exceed the original contract cost. The loss of rights could impact the extent of the sports coverage offered by the Company and its affiliates, as it relates to FOX, and could adversely affect the Company’s advertising and affiliate revenues. Upon renewal, the Company’s results could be adversely affected if escalations in sports programming rights costs are unmatched by increases in advertising rates and, in the case of cable networks, subscriber fees.

Technological Developments May Increase the Threat of Content Piracy and Signal Theft and Limit the Company’s Ability to Protect Its Intellectual Property Rights.

The Company seeks to limit the threat of content piracy and DBS programming signal theft; however, policing unauthorized use of the Company’s products and services and related intellectual property is often difficult and the steps taken by the Company may not in every case prevent the infringement by unauthorized third parties. Developments in technology, including digital copying, file compressing and the growing penetration of high-bandwidth Internet connections, increase the threat of content piracy by making it easier to duplicate and widely distribute pirated material. In addition, developments in software or devices that circumvent encryption technology increase the threat of unauthorized use and distribution of DBS programming signals. The Company has taken, and will continue to take, a variety of actions to combat piracy and signal theft, both individually and, in some instances, together with industry associations. There can be no assurance that the Company’s efforts to enforce its rights and protect its products, services and intellectual property will be

successful in preventing content piracy or signal theft. Content piracy and signal theft present a threat to the Company’s revenues from products and services, including, but not limited to, films, television shows, books and DBS programming.

In a variety of the Company’s businesses, the Company and its partners engage the services of writers, directors, actors and other talent, trade employees and others who are subject to collective bargaining agreements, including employees of the Company’s film and television studio operations and newspapers. If the Company or its partners are unable to renew expiring collective bargaining agreements, it is possible that the affected unions could take action in the form of strikes or work stoppages. Such actions, as well as higher costs in connection with these collective bargaining agreements or a significant labor dispute could have an adverse effect on the Company’s business by causing delays in production or by reducing profit margins.

Changes in U.S. or Foreign Regulations May Have an Adverse Effect on the Company’s Business.

The Company is subject to a variety of U.S. and foreign regulations in the jurisdictions in which its businesses operate. In general, the television broadcasting and multichannel video programming and distribution industries in the United States are highly regulated by federal laws and regulations issued and administered by various federal agencies, including the FCC. The FCC generally regulates, among other things, the ownership of media, broadcast and multichannel video programming and technical operations of broadcast and satellite licensees. Further, the United States Congress and the FCC currently have under consideration, and may in the future adopt, new laws, regulations and policies regarding a wide variety of matters, including technological changes, which could, directly or indirectly, affect the operations and ownership of the Company’s U.S. media properties. Similarly, changes in regulations imposed by governments in other jurisdictions in which the Company, or entities in which the Company has an interest, operate could adversely affect its business and results of operations.

In addition, changes in tax regulations in the U.S. and other jurisdictions in which the Company has operations could affect the Company’s results of operations.

ITEM 4.

~~SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS~~(REMOVED AND RESERVED)

The Company held its Annual Meeting of Stockholders (the “Annual Meeting”) on October 16, 2009. A brief description of the matters voted upon at the Annual Meeting and the results of the voting on such matters is set forth below.

Proposal 2: A proposal to ratify the selection of Ernst & Young LLP as the Company’s independent registered public accounting firm for the fiscal year ending June 30, 2010 was voted upon as follows:

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


NEWS CORPORATION
(Registrant)

By:		/s/ DAVID F. DEVOE
		David F. DeVoe Senior Executive Vice President and Chief Financial Officer


Delaware		26-0075658
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

1211 Avenue of the Americas, New York, New York		10036
(Address of Principal Executive Offices)		(Zip Code)


		Page
Part I. Financial Information
Item 1.	Financial Statements
	Unaudited Consolidated Statements of Operations for the three and ~~six~~nine months ended ~~December~~March 31, ~~2009~~2010 and ~~2008~~2009	3
	~~Unaudited~~ Consolidated Balance Sheets at ~~December~~March 31, ~~2009~~2010 (unaudited) and June 30, 2009 (audited)	4
	Unaudited Consolidated Statements of Cash Flows for the ~~six~~nine months ended ~~December~~March 31, ~~2009~~2010 and ~~2008~~2009	5
	Notes to the Unaudited Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	4041
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	6062
Item 4.	Controls and Procedures	6264
Part II. Other Information
Item 1.	Legal Proceedings	6264
Item 1A.	Risk Factors	6264
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	6567
Item 3.	Defaults Upon Senior Securities	6567
Item 4.	~~Submission of Matters to a Vote of Security Holders~~(Removed and Reserved)	6667
Item 5.	Other Information	6667
Item 6.	Exhibits	6668
Signature		6769


Rating Agency	Senior Debt	Outlook
Moody’s	~~Baa1~~Baa 1	Stable
S&P	BBB+	Stable


Name	For	Withheld
José María Aznar	669,116,150	3,245,149
Natalie Bancroft	627,075,152	45,526,034
Peter L. Barnes	670,935,434	1,426,066
Chase Carey	669,900,207	2,462,796
Kenneth E. Cowley	647,662,270	24,699,620
David F. DeVoe	624,329,092	47,999,391
Viet Dinh	508,202,864	164,127,464
Sir Roderick I. Eddington	494,775,002	177,553,430
Mark Hurd	668,551,198	3,784,601
Andrew S.B. Knight	498,309,655	174,017,575
James R. Murdoch	659,266,008	12,258,046
K. Rupert Murdoch	661,194,779	11,169,820
Lachlan K. Murdoch	665,581,608	16,782,991
Thomas J. Perkins	498,222,403	174,104,180
Arthur M. Siskind	659,687,889	12,665,560
John L. Thornton	507,721,893	164,002,492


	Balance as of June 30, 2009		Disposals			Foreign Exchange Movements			Adjustments			Balance as of March 31, 2010
	(in millions)
Filmed Entertainment	$	1,071	$	—		$	—		$	—		$	1,071
Television		1,906		—			—			—			1,906
Cable Network Programming		6,151		—			—			18			6,169
Direct Broadcast Satellite Television		616		—			(29	)		—			587
Integrated Marketing Services		286		—			—			(2	)		284
Newspapers and Information Services		3,238		(451	)		152			—			2,939
Book Publishing		3		(2	)		—			2			3
Other		1,111		(93	)		11			19			1,048

Total goodwill	$	14,382	$	(546	)	$	134		$	37		$	14,007


~~For:~~		~~670,148,616~~
~~Against:~~		~~519,433~~
~~Abstain:~~		~~1,700,860~~



12.1		Ratio of Earnings to Fixed Charges.*

31.1		Chairman and Chief Executive Officer Certification required by Rules 13a-14 and 15d-14 under the Securities Exchange Act of 1934, as amended.*

31.2		Chief Financial Officer Certification required by Rules 13a-14 and 15d-14 under the Securities Exchange Act of 1934, as amended.*

32.1		Certification of Chairman and Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of Sarbanes Oxley Act of 2002.*

101		The following financial information from the Company’s Quarterly Report on Form 10-Q for the quarter ended ~~December~~March 31, ~~2009~~2010 formatted in eXtensible Business Reporting Language: (i) Unaudited Consolidated Statements of Operations for the three and ~~six~~nine months ended ~~December~~March 31, ~~2009~~2010 and ~~2008;~~2009; (ii) ~~Unaudited~~ Consolidated Balance Sheets at ~~December~~March 31, ~~2009~~2010 (unaudited) and June 30, ~~2009;~~2009 (audited); (iii) Unaudited Consolidated Statements of Cash Flows for the ~~six~~nine months ended ~~December~~March 31, ~~2009~~2010 and ~~2008;~~2009; and (iv) Notes to the Unaudited Consolidated Financial Statements (tagged as blocks of text).*