NEWS CORP (NWSA) FY 2022 MD&A

ITEM 7.    MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This discussion and analysis contains statements that constitute “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Section 27A of the Securities Act of 1933, as amended. All statements that are not statements of historical fact are forward-looking statements. The words “expect,” “will,” “estimate,” “anticipate,” “predict,” “believe,” “should” and similar expressions and variations thereof are intended to identify forward-looking statements. These statements appear in a number of places in this discussion and analysis and include statements regarding the intent, belief or current expectations of the Company, its directors or its officers with respect to, among other things, trends affecting the Company’s financial condition or results of operations, the Company’s strategy and strategic initiatives and the outcome of contingencies such as litigation and investigations. Readers are cautioned that any forward-looking statements are not guarantees of future performance and involve risks and uncertainties. More information regarding these risks and uncertainties and other important factors that could cause actual results to differ materially from those in the forward-looking statements is set forth under the heading “Risk Factors” in Item 1A of this Annual Report on Form 10-K (the “Annual Report”). The Company does not ordinarily make projections of its future operating results and undertakes no obligation (and expressly disclaims any obligation) to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. Readers should carefully review this document and the other documents filed by the Company with the Securities and Exchange Commission (the “SEC”). This section should be read together with the Consolidated Financial Statements of News Corporation and related notes set forth elsewhere in this Annual Report.

The following discussion and analysis omits discussion of fiscal 2020. Please see “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2021 for a discussion of fiscal 2020.

INTRODUCTION

News Corporation (together with its subsidiaries, “News Corporation,” “News Corp,” the “Company,” “we,” or “us”) is a global diversified media and information services company comprised of businesses across a range of media, including: digital real estate services, subscription video services in Australia, news and information services and book publishing.

The consolidated financial statements are referred to herein as the “Consolidated Financial Statements.” The consolidated statements of operations are referred to herein as the “Statements of Operations.” The consolidated balance sheets are referred to herein as the “Balance Sheets.” The consolidated statements of cash flows are referred to herein as the “Statements of Cash Flows.” The Consolidated Financial Statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”).

Management’s discussion and analysis of financial condition and results of operations is intended to help provide an understanding of the Company’s financial condition, changes in financial condition and results of operations. This discussion is organized as follows:

•Overview of the Company’s Businesses—This section provides a general description of the Company’s businesses, as well as developments that occurred during the two fiscal years ended June 30, 2022 and through the date of this filing that the Company believes are important in understanding its results of operations and financial condition or to disclose known trends.

•Results of Operations—This section provides an analysis of the Company’s results of operations for the two fiscal years ended June 30, 2022. This analysis is presented on both a consolidated basis and a segment basis. Supplemental revenue information is also included for reporting units within certain segments and is presented on a gross basis, before eliminations in consolidation. In addition, a brief description is provided of significant transactions and events that impact the comparability of the results being analyzed. The Company maintains a 52-53 week fiscal year ending on the Sunday closest to June 30 in each year. Fiscal 2022 and 2021 included 53 and 52 weeks, respectively. As a result, the Company has referenced the impact of the 53rd week, where applicable, when providing analysis of the results of operations.

•Liquidity and Capital Resources—This section provides an analysis of the Company’s cash flows for the two fiscal years ended June 30, 2022, as well as a discussion of the Company’s financial arrangements and outstanding commitments, both firm and contingent, that existed as of June 30, 2022.

•Critical Accounting Policies and Estimates—This section discusses accounting policies considered important to the Company’s financial condition and results of operations, and which require significant judgment and estimates on the part of management in application. In addition, Note 2 to the Consolidated Financial Statements summarizes the Company’s significant accounting policies, including the critical accounting policies discussed in this section.

33

Table of Contents

OVERVIEW OF THE COMPANY’S BUSINESSES

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

•Digital Real Estate Services—The Digital Real Estate Services segment consists of the Company’s 61.4% interest in REA Group and 80% interest in Move. The remaining 20% interest in Move is held by REA Group. REA Group is a market-leading digital media business specializing in property and is listed on the Australian Securities Exchange (“ASX”) (ASX: REA). REA Group advertises property and property-related services on its websites and mobile apps, including Australia’s leading residential, commercial and share property websites, realestate.com.au, realcommercial.com.au and Flatmates.com.au, property.com.au and property portals in India. In addition, REA Group provides property-related data to the financial sector and financial services through an end-to-end digital property search and financing experience and a mortgage broking offering.

Move is a leading provider of digital real estate services in the U.S. and primarily operates Realtor.com®, a premier real estate information, advertising and services platform. Move offers real estate advertising solutions to agents and brokers, including its ConnectionsSM Plus, Market VIPSM and AdvantageSM Pro products as well as its referral-based service, ReadyConnect ConciergeSM. Move also offers online tools and services to do-it-yourself landlords and tenants.

•Subscription Video Services—The Company’s Subscription Video Services segment provides sports, entertainment and news services to pay-TV and streaming subscribers and other commercial licensees, primarily via cable, satellite and internet distribution, and consists of (i) the Company’s 65% interest in the Foxtel Group (with the remaining 35% interest held by Telstra, an ASX-listed telecommunications company) and (ii) Australian News Channel (“ANC”). The Foxtel Group is the largest Australian-based subscription television provider. Its Foxtel pay-TV service provides approximately 200 live channels and video on demand covering sports, general entertainment, movies, documentaries, music, children’s programming and news. Foxtel and the Group’s Kayo Sports streaming service offer the leading sports programming content in Australia, with broadcast rights to live sporting events including: National Rugby League, Australian Football League, Cricket Australia and various motorsports programming. The Foxtel Group also operates BINGE, its entertainment streaming service, Foxtel Now, a streaming service that provides access across Foxtel’s live and on-demand content and Flash, its news aggregation streaming service.

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

•Dow Jones—The Dow Jones segment consists of Dow Jones, a global provider of news and business information, which distributes its content and data through a variety of media channels including newspapers, newswires, websites, mobile apps, newsletters, magazines, proprietary databases, live journalism, video and podcasts. The Dow Jones segment’s products, which target individual consumers and enterprise customers, include The Wall Street Journal, Barron’s, MarketWatch, Investor’s Business Daily, Factiva, Dow Jones Risk & Compliance, Dow Jones Newswires and OPIS.

•Book Publishing—The Book Publishing segment consists of HarperCollins, the second largest consumer book publisher in the world, with operations in 17 countries and particular strengths in general fiction, nonfiction, children’s and religious publishing. HarperCollins owns more than 120 branded publishing imprints, including Harper, William Morrow, Mariner, HarperCollins Children’s Books, Avon, Harlequin and Christian publishers Zondervan and Thomas Nelson, and publishes works by well-known authors such as Harper Lee, George Orwell, Agatha Christie and Zora Neale Hurston, as well as global author brands including J.R.R. Tolkien, C.S. Lewis, Daniel Silva, Karin Slaughter and Dr. Martin Luther King, Jr. It is also home to many beloved children’s books and authors and a significant Christian publishing business.

•News Media—The News Media segment consists primarily of News Corp Australia, News UK and the New York Post and includes, among other publications, The Australian, The Daily Telegraph, Herald Sun, The Courier Mail and The Advertiser in Australia and The Times, The Sunday Times, The Sun and The Sun on Sunday in the U.K. This segment also includes Wireless Group, operator of talkSPORT, the leading sports radio network in the U.K., the Company’s recently launched TalkTV and Storyful, a social media content agency.

•Other—The Other segment consists primarily of general corporate overhead expenses, costs related to the U.K. Newspaper Matters (as defined in Note 16—Commitments and Contingencies to the Consolidated Financial Statements) and expenses associated with the Company’s cost reduction initiatives.

34

Table of Contents

Digital Real Estate Services

The Digital Real Estate Services segment generates revenue through property and property-related advertising and services, including: the sale of real estate listing and lead generation products and referral-based services to agents, brokers, developers, homebuilders and landlords; real estate-related and property rental-related services; display advertising on residential real estate and commercial property sites; and residential property data services to the financial sector. The Digital Real Estate Services segment also generates revenue through fees and commissions from referrals generated through its end-to-end digital property search and financing offering and mortgage broking services. Significant expenses associated with these sites and services include development costs, advertising and promotional expenses, hosting and support services, salaries, broker commissions, employee benefits and other routine overhead expenses. The Digital Real Estate Services segment’s results are highly sensitive to conditions in the real estate market, as well as macroeconomic factors such as inflation and interest rates, which are expected to adversely impact real estate lead and transaction volumes and adjacent businesses in the near term.

Consumers overwhelmingly turn to the internet and mobile devices for real estate information and services. The Digital Real Estate Services segment’s success depends on its continued innovation to provide products and services that are useful for consumers and real estate, mortgage and financial services professionals, homebuilders and landlords and attractive to its advertisers. The Digital Real Estate Services segment operates in a highly competitive digital environment with other operators of real estate and property websites and mobile apps.

Subscription Video Services

The Company’s Subscription Video Services segment consists of (i) its 65% interest in the Foxtel Group and (ii) ANC. The Foxtel Group is the largest Australian-based subscription television provider through its Foxtel pay-TV and Kayo Sports, BINGE, Foxtel Now and Flash streaming services. The Foxtel Group generates revenue primarily through subscription revenue as well as advertising revenue.

The Foxtel Group competes for audiences primarily with a variety of other video content providers, such as traditional Free-To-Air (“FTA”) TV operators in Australia, including the three major commercial FTA networks and two major government-funded FTA broadcasters, and content providers that deliver video programming over the internet. These providers include, Internet Protocol television, or IPTV, subscription video-on-demand and broadcast video-on-demand providers; streaming services offered through digital media providers; as well as programmers and distributors that provide content directly to consumers over the internet.

ANC operates the SKY NEWS network, Australia’s 24-hour multi-channel, multi-platform news service, and also owns and operates the Australia Channel IPTV service for international markets. Revenue is primarily derived from monthly affiliate fees received from pay-TV providers and advertising.

The most significant operating expenses of the Subscription Video Services segment are the acquisition and production expenses related to programming, the expenses related to operating the technical facilities of the broadcast operations, expenses related to cable, satellite and data-related transmission costs and studio and engineering expense. The expenses associated with licensing certain sports programming rights are recognized during the applicable season or event, which can cause results at the Subscription Video Services segment to fluctuate based on the timing and mix of the Foxtel Group’s local and international sports programming. Sports programming rights costs associated with a dedicated channel are amortized over 12 months. Other expenses include subscriber acquisition costs such as sales costs and marketing and promotional expenses related to improving the market visibility and awareness of the channels and their programming. Additional expenses include salaries, employee benefits, technology, rent and other routine overhead expenses.

Dow Jones

The Dow Jones segment’s products target individual consumers and enterprise customers. Revenue from the Dow Jones segment’s consumer business is derived primarily from circulation, which includes subscription and single-copy sales of its digital and print consumer products, the sale of digital and print advertising, licensing fees for its print and digital consumer content and participation fees for its live journalism events. Circulation revenues are dependent on the content of the Dow Jones segment’s consumer products, prices of its and/or competitors’ products, as well as promotional activities and news cycles. Advertising revenue is dependent on a number of factors, including demand for the Dow Jones segment’s consumer products, general economic and business conditions, demographics of the customer base, advertising rates and effectiveness and brand strength and reputation. Advertising revenues are also subject to seasonality, with revenues typically highest in the Company's second fiscal quarter due to the end-of-year holiday season. In addition, the traditional consumer print business faces challenges from alternative media formats and shifting consumer preferences, which have adversely affected, and are expected to continue to

35

Table of Contents

adversely affect, both print circulation and advertising revenues. Advertising, in particular, has been impacted by long-term structural movements in advertising spending from print to digital. The increasing range of advertising choices and formats has resulted in audience fragmentation and increased competition. Technologies and policies have also been and will continue to be developed and implemented that may make it more difficult to target and measure the effectiveness of digital advertising or allow users to block advertising on websites and mobile devices, which may impact digital advertising rates or revenues. As a multi-platform news provider, the Dow Jones segment recognizes the importance of maximizing revenues from a variety of media formats and platforms, both in terms of paid content and in new advertising models, and continues to invest in its digital and other products, which represent an increasingly larger share of revenues at its consumer business. Mobile devices, their related apps and other technologies, provide continued opportunities for the Dow Jones segment to make its content available to a new audience of readers, introduce new or different pricing schemes and develop its products to continue to attract advertisers and/or affect the relationship between content providers and consumers. The Dow Jones segment continues to develop and implement strategies to exploit its content across a variety of media channels and platforms, including leveraging its content through licensing arrangements with third-party distribution platforms and growing its live journalism events business.

Operating expenses for the consumer business include costs related to paper, production, distribution, third party printing, editorial and commissions. Selling, general and administrative expenses include promotional expenses, salaries, employee benefits, rent and other routine overheads. The costs associated with printing and distributing newspapers, including paper prices and delivery costs, are key operating expenses whose fluctuations can have a material effect on the results of the Dow Jones segment’s consumer business. The consumer business is affected by the cyclical increases and decreases in the price of paper and other factors that may affect paper prices, including, among other things, inflation, supply chain disruptions and tariffs or other restrictions on non-U.S. paper suppliers. In addition, the Dow Jones segment relies on third parties for much of the printing and distribution of its print products. Long-term structural movements from print to digital and changing labor markets present challenges to the financial and operational stability of these third parties which could, in turn, impact the availability, or increase the cost, of third-party printing and distribution services for the Company's newspapers.

The Dow Jones segment’s consumer products compete for consumers, audience and advertising with other local and national newspapers, web and app-based media, news aggregators, customized news feeds, search engines, blogs, magazines, investment tools, social media sources, podcasts and event producers, as well as other media such as television, radio stations and outdoor displays. As a result of rapidly changing and evolving technologies, distribution platforms and business models, and corresponding changes in consumer behavior, the consumer business continues to face increasing competition for both circulation and advertising revenue, including from a variety of alternative news and information sources, as well as programmatic advertising buying channels and off-platform distribution of its products.

The Dow Jones segment’s professional information business, which targets enterprise customers, derives revenue primarily from subscriptions to its professional information products. The professional information business serves enterprise customers with products that combine news and information with technology and tools that inform decisions and aid awareness, research and understanding. The success of the professional information business depends on its ability to provide products, services, applications and functionalities that meet the needs of its enterprise customers, who operate in information-intensive and oftentimes highly regulated industries such as finance and insurance. The professional information business must also anticipate and respond to industry trends and regulatory and technological changes.

Significant expenses for the professional information business include development costs, sales and marketing expenses, hosting and support services, royalties, salaries, consulting and professional fees, sales commissions, employee benefits and other routine overhead expenses.

The Dow Jones segment’s professional information products compete with various information service providers, compliance data providers, global financial newswires and energy and commodities pricing and data providers, including Reuters News, RELX (including LexisNexis and ICIS), Refinitiv, S&P Global, DTN and Argus Media, as well as many other providers of news, information and compliance data.

Book Publishing

The Book Publishing segment derives revenues from the sale of general fiction, nonfiction, children’s and religious books in the U.S. and internationally. The revenues and operating results of the Book Publishing segment are significantly affected by the timing of releases and the number of its books in the marketplace. The book publishing marketplace is subject to increased periods of demand during the end-of-year holiday season in its main operating geographies. This marketplace is highly competitive and continues to change due to technological developments, including additional digital platforms, such as e-books and downloadable audiobooks, and distribution channels and other factors. Each book is a separate and distinct product and its financial success depends upon many factors, including public acceptance.

36

Table of Contents

Major new title releases represent a significant portion of the Book Publishing segment’s sales throughout the fiscal year. Print-based consumer books are generally sold on a fully returnable basis, resulting in the return of unsold books. In the domestic and international markets, the Book Publishing segment is subject to global trends and local economic conditions, including recent increases in inflation and supply chain disruptions, which are expected to continue to adversely affect costs in the near term. Operating expenses for the Book Publishing segment include costs related to paper, printing, freight, authors’ royalties, editorial, promotional, art and design expenses. Selling, general and administrative expenses include salaries, employee benefits, rent and other routine overhead costs.

News Media

Revenue at the News Media segment is derived primarily from the sale of advertising, circulation and subscriptions, as well as licensing. Adverse changes in general market conditions for advertising have affected, and may continue to affect, revenues. Advertising revenues at the News Media segment are also subject to seasonality, with revenues typically being highest in the Company’s second fiscal quarter due to the end-of-year holiday season in its main operating geographies. Circulation and subscription revenues can be greatly affected by changes in the prices of the Company’s and/or competitors’ products, as well as by promotional activities and news cycles.

Operating expenses include costs related to paper, production, distribution, third party printing, editorial, commissions, technology and radio sports rights. Selling, general and administrative expenses include promotional expenses, salaries, employee benefits, rent and other routine overhead. The cost of paper is a key operating expense whose fluctuations can have a material effect on the results of the segment. The News Media segment continues to be exposed to risks associated with paper used for printing. Paper is a basic commodity and its price is sensitive to the balance of supply and demand. The News Media segment’s expenses are affected by the cyclical increases and decreases in the price of paper and other factors that may affect paper prices, including, among other things, inflation, supply chain disruptions and tariffs.

The News Media segment’s products compete for readership, audience and advertising with local and national competitors and also compete with other media alternatives in their respective markets. Competition for circulation and subscriptions is based on the content of the products provided, pricing and, from time to time, various promotions. The success of these products also depends upon advertisers’ judgments as to the most effective use of their advertising budgets. Competition for advertising is based upon the reach of the products, advertising rates and advertiser results. Such judgments are based on factors such as cost, availability of alternative media, distribution and quality of consumer demographics.

The News Media segment's traditional print business faces challenges from alternative media formats and shifting consumer preferences. The News Media segment is also exposed to the impact of long-term structural movements in advertising spending, in particular, the move from print to digital. These alternative media formats could impact the segment’s overall performance, positively or negatively. In addition, technologies and policies have been and will continue to be developed and implemented that may make it more difficult to target and measure the effectiveness of digital advertising or allow users to block advertising on websites and mobile devices, which may impact digital advertising rates or revenues.

As multi-platform news providers, the businesses within the News Media segment recognize the importance of maximizing revenues from a variety of media formats and platforms, both in terms of paid content and in new advertising models, and continue to invest in their digital products. Mobile devices, their related apps and other technologies, provide continued opportunities for the businesses within the News Media segment to make their content available to a new audience of readers, introduce new or different pricing schemes and develop their products to continue to attract advertisers and/or affect the relationship between content providers and consumers. The businesses within the News Media segment continue to develop and implement strategies to exploit their content across a variety of media channels and platforms, including leveraging their content through licensing arrangements with third-party distribution platforms.

Other

The Other segment primarily consists of general corporate overhead expenses and costs related to the U.K. Newspaper Matters and expenses associated with the Company’s cost reduction initiatives.

37

Table of Contents

Other Business Developments

Fiscal 2022

Acquisition of UpNest

In June 2022, the Company acquired UpNest, Inc. (“UpNest”) for closing cash consideration of approximately $45 million, subject to customary purchase price adjustments, and up to $15 million in future cash consideration based upon the achievement of certain performance objectives over the next two years. UpNest is a real estate agent marketplace that matches home sellers and buyers with top local agents who compete for their business. The UpNest acquisition helps Realtor.com® further expand its services and support for home sellers and listing agents and brokers. UpNest is a subsidiary of Move, and its results are included within the Digital Real Estate Services segment.

Acquisition of Base Chemicals

In June 2022, the Company acquired the Base Chemicals (rebranded Chemical Market Analytics, “CMA”) business from S&P Global Inc. (“S&P”) for $295 million in cash, subject to customary purchase price adjustments. CMA provides pricing data, insights, analysis and forecasting for key base chemicals through its leading Market Advisory and World Analysis services. The acquisition enables Dow Jones to become a leading provider of base chemicals information and furthers its goal of building the leading global business news and information platform for professionals. CMA is operated by Dow Jones, and its results are included in the Dow Jones segment.

Term Loan A and Revolving Credit Facilities

On March 29, 2022, the Company terminated its existing unsecured $750 million revolving credit facility and entered into a new credit agreement (the “2022 Credit Agreement”) that provides for $1,250 million of unsecured credit facilities comprised of a $500 million unsecured term loan A credit facility (the “Term A Facility” and the loans under the Term A Facility are collectively referred to as “Term A Loans”) and a $750 million unsecured revolving credit facility (the “Revolving Facility” and, together with the Term A Facility, the “Facilities”) that can be used for general corporate purposes. See Note 9—Borrowings in the accompanying Consolidated Financial Statements.

The Company entered into an interest rate swap derivative to fix the floating rate interest component of its Term A Loans at 2.083%. See Note 11—Financial Instruments and Fair Value Measurements in the accompanying Consolidated Financial Statements.

The Company borrowed the full amount of the Term A Facility on March 31, 2022 and had not borrowed any funds under the Revolving Facility as of June 30, 2022.

Acquisition of OPIS

In February 2022, the Company acquired the Oil Price Information Service business and related assets (“OPIS”) from S&P and IHS Markit Ltd. for $1.15 billion in cash, subject to customary purchase price adjustments. OPIS is a global industry standard for benchmark and reference pricing and news and analytics for the oil, natural gas liquids and biofuels industries. The business also provides pricing and news and analytics for the coal, mining and metals end markets and insights and analytics in renewables and carbon pricing. The acquisition enables Dow Jones to become a leading provider of energy and renewables information and furthers its goal of building the leading global business news and information platform for professionals. OPIS is a subsidiary of Dow Jones, and its results are included in the Dow Jones segment.

2022 Senior Notes Offering

In February 2022, the Company issued $500 million of senior notes due 2032 (the “2022 Senior Notes”). The 2022 Senior Notes bear interest at a fixed rate of 5.125% per annum, payable in cash semi-annually on February 15 and August 15 of each year, commencing on August 15, 2022. The notes will mature on February 15, 2032. The Company is using the net proceeds from the offering for general corporate purposes, including to fund the acquisitions of OPIS and CMA. See Note 9—Borrowings in the accompanying Consolidated Financial Statements.

Share Repurchase Program

On September 22, 2021, the Company announced a new stock repurchase program authorizing the Company to purchase up to $1 billion in the aggregate of its outstanding Class A Common Stock and Class B Common Stock (the “Repurchase Program”). The Repurchase Program replaces the Company’s $500 million Class A Common Stock repurchase program approved by the

38

Table of Contents

Company’s Board of Directors (the “Board of Directors”) in May 2013. The manner, timing, number and share price of any repurchases will be determined by the Company at its discretion and will depend upon such factors as the market price of the stock, general market conditions, applicable securities laws, alternative investment opportunities and other factors. The Repurchase Program has no time limit and may be modified, suspended or discontinued at any time. See Note 12—Stockholders' Equity in the accompanying Consolidated Financial Statements.

REA Group sale of Malaysia and Thailand businesses

In August 2021, REA Group acquired an 18% interest (16.6% on a diluted basis) in PropertyGuru Pte. Ltd. (“PropertyGuru”), a leading digital property technology company operating marketplaces in Southeast Asia, in exchange for all shares of REA Group’s entities in Malaysia and Thailand. The transaction was completed after REA Group entered into an agreement to sell its 27% interest in its existing venture with 99.co. The transaction creates a leading digital real estate services company in Southeast Asia, new opportunities for collaboration and access to a deeper pool of expertise, technology and investment in the region. REA Group received one seat on the board of directors of PropertyGuru as part of the transaction.

In March 2022, PropertyGuru completed its merger with Bridgetown 2 Holdings Limited. As a result of the merger and subsequent investments made in connection with the transaction, REA Group’s ownership interest in PropertyGuru was 17.5% and a gain of approximately $15 million was recorded in Other, net.

Russian and Ukrainian conflict

The Company has taken steps to ensure the safety of its journalists and other personnel in Ukraine and Russia and will continue to monitor the situation in the region and provide support, as needed, to affected employees. The Company has extremely limited operations in, or direct exposure to, Russia or Ukraine, and the conflict has not had a material impact on its business, financial condition, or results of operations to date. However, the conflict has broadened inflationary pressures and a further escalation or expansion of its scope or the related economic disruption could impact the Company's supply chain, further exacerbate inflation and other macroeconomic trends and have an adverse effect on its results of operations.

Fiscal 2021

Acquisition of Mortgage Choice

In June 2021, REA Group acquired Mortgage Choice Limited (“Mortgage Choice”) for approximately A$244 million in cash (approximately US$183 million based on exchange rates as of the closing date), funded by an increase in REA Group’s debt facilities. Control was transferred and the acquisition became effective and binding on Mortgage Choice shareholders on June 18, 2021 upon court approval. Mortgage Choice is a leading Australian mortgage broking business, and the acquisition complements REA Group’s existing Smartline broker footprint and accelerates REA Group’s financial services strategy to establish a leading mortgage broking business with national scale. Mortgage Choice is a subsidiary of REA Group and its results are included in the Digital Real Estate Services segment.

Acquisition of HMH Books & Media

In May 2021, the Company acquired the Books & Media segment of Houghton Mifflin Harcourt (“HMH Books & Media”) for $349 million in cash. HMH Books & Media publishes renowned and awarded children’s, young adult, fiction, non-fiction, culinary and reference titles. The acquisition adds an extensive and successful backlist, a strong frontlist in the lifestyle and children’s segments and a productions business that provides opportunities to expand HarperCollins’s intellectual property across different formats. HMH Books & Media is a subsidiary of HarperCollins and its results are included in the Book Publishing segment.

Acquisition of Investor’s Business Daily

In May 2021, the Company acquired Investor’s Business Daily (“IBD”) for $275 million in cash. IBD is a digital-first financial news and research business with unique investing content, analytical products and educational resources, including the Investors.com website. The acquisition expands Dow Jones’s offerings with the addition of proprietary data and tools to help professional and retail investors identify top-performing stocks. IBD is operated by Dow Jones, and its results are included within the Dow Jones segment.

2021 Senior Notes Offering

In April 2021, the Company issued $1 billion of senior notes due 2029 (the “2021 Senior Notes”). The 2021 Senior Notes bear interest at a fixed rate of 3.875% per annum, payable in cash semi-annually on May 15 and November 15 of each year,

39

Table of Contents

commencing November 15, 2021. The notes will mature on May 15, 2029. The Company used the net proceeds from the offering for general corporate purposes, which included acquisitions and working capital.

Google partnership

In February 2021, the Company entered into a multi-year partnership with Google to provide content from its news sites around the world. The three-year agreement also includes the development of a subscription platform, the sharing of advertising revenue via Google’s advertising technology services, the cultivation of audio journalism and meaningful investments in video journalism by YouTube.

Elara

In December 2020, the Company acquired a controlling interest in Elara Technologies Pte. Ltd. (rebranded REA India) through a subscription for newly-issued preference shares and the buyout of certain minority shareholders. The total aggregate purchase price associated with the acquisition at the completion date is $138 million which primarily consists of $69 million of cash, the fair value of noncontrolling interests of $37 million and the fair value of the Company’s previously held equity interest in REA India of $22 million. As a result of the transactions, REA Group’s shareholding in REA India increased from 13.5% to 59.7%, while News Corporation’s shareholding increased from 22.1% to 39.0%. During the three months ended March 31, 2021, REA Group acquired an additional 0.8% interest in REA India. REA Group and News Corporation now hold all REA India board seats, and the Company began consolidating REA India in December 2020. The acquisition of REA India allows REA Group to be at the forefront of long-term growth opportunities within India and the digitization of the real estate sector. REA India is a subsidiary of REA Group, and its results are included within the Digital Real Estate Services segment. As a result of the transactions, the Company’s ownership in REA Group was diluted by 0.2% to 61.4%. Subsequent to June 30, 2021, REA Group provided additional funding to REA India in exchange for further equity which increased REA Group’s ownership interest to 73.3% and diluted News Corporation’s interest to 26.6%.

Avail

In December 2020, the Company acquired Rentalutions, Inc. (“Avail”) for initial cash consideration of approximately $36 million, net of $4 million of cash acquired, and up to $8 million in future cash consideration based upon the achievement of certain performance objectives over the next three years. Avail is a platform that improves the renting experience for do-it-yourself landlords and tenants with online tools, educational content and world-class support. The acquisition helps Realtor.com® further expand into the rental space, extend its support for landlords, augment current rental listing content, grow its audience and build brand affinity and long-term relationships with renters. Avail is a subsidiary of Move, and its results are included within the Digital Real Estate Services segment.

See Note 4—Acquisitions, Disposals and Other Transactions in the accompanying Consolidated Financial Statements for further discussion of the acquisitions and dispositions discussed above.

40

Table of Contents

Results of Operations—Fiscal 2022 versus Fiscal 2021

The following table sets forth the Company’s operating results for fiscal 2022 as compared to fiscal 2021.

________________________

**    not meaningful

Revenues—Revenues increased $1,027 million, or 11%, for the fiscal year ended June 30, 2022 as compared to fiscal 2021, primarily driven by the increase at the Digital Real Estate Services segment primarily due to higher real estate revenues and the acquisition of Mortgage Choice, at the Dow Jones segment primarily due to the increase in circulation and subscription revenues, which includes the impacts from the acquisitions of IBD and OPIS, and higher advertising revenues, at the News Media segment primarily due to higher advertising and circulation and subscription revenues and at the Book Publishing segment primarily due to the acquisition of HMH Books and Media. The increases were partially offset by the decrease at the Subscription Video Services segment due to the negative impact of foreign currency fluctuations, as higher streaming and advertising revenues more than offset lower residential subscription revenues. The impact of the 53rd week in fiscal 2022 resulted in a revenue increase of approximately $110 million.

The impact of foreign currency fluctuations of the U.S. dollar against local currencies resulted in a revenue decrease of $161 million, or 2%, for the fiscal year ended June 30, 2022 as compared to fiscal 2021. The Company calculates the impact of foreign currency fluctuations for businesses reporting in currencies other than the U.S. dollar by multiplying the results for each quarter in the current period by the difference between the average exchange rate for that quarter and the average exchange rate in effect during the corresponding quarter of the prior year and totaling the impact for all quarters in the current period.

Operating expenses—Operating expenses increased $293 million, or 6%, for the fiscal year ended June 30, 2022 as compared to fiscal 2021. The increase was primarily driven by higher expenses at the Book Publishing segment due to the acquisition of HMH Books and Media and higher manufacturing and freight costs related to increased sales volumes, the mix of titles and the impact of ongoing supply chain and inflationary pressures. The increase was also driven by the Dow Jones segment due to higher employee costs and the impact from recent acquisitions, higher costs at the News Media segment primarily due to higher costs associated with TalkTV and higher print production costs in the U.K., as well as at the Digital Real Estate Services segment due to higher employee costs. The Company has generally observed a very competitive labor market which has led to higher compensation and hiring costs for attracting and retaining highly qualified employees at some of its businesses and is expected to continue to impact the Company’s cost base in the near term. The increases were partially offset by lower expenses at the Subscription Video Services segment, primarily due to the absence of $57 million of additional sports programming rights and production costs recognized in the prior year that were deferred from fiscal 2020 due to the coronavirus pandemic (“COVID-19”)

41

Table of Contents

and the positive impact of foreign currency fluctuations, partially offset by higher sports and entertainment programming rights costs due to increased content availability. The impact of foreign currency fluctuations of the U.S. dollar against local currencies resulted in an Operating expense decrease of $76 million, or 2%, for the fiscal year ended June 30, 2022 as compared to fiscal 2021.

Selling, general and administrative—Selling, general and administrative increased $338 million, or 10%, for the fiscal year ended June 30, 2022 as compared to fiscal 2021. The increase in Selling, general and administrative for the fiscal year ended June 30, 2022 was primarily due to increased expenses at the Digital Real Estate Services segment driven by the acquisitions of Mortgage Choice and REA India, higher employee costs at both Move and REA Group and increased marketing expenses at Move. The increase was also driven by higher costs at the Dow Jones segment due to the impact of recent acquisitions, including a $25 million impact from OPIS and CMA-related transaction costs, increased employee costs and increased sales and marketing costs. The increase was partially offset by lower costs of $67 million in the Other segment, primarily driven by lower equity-based compensation costs largely related to stock price performance and lower one-time legal settlement costs. The impact of foreign currency fluctuations of the U.S. dollar against local currencies resulted in a Selling, general and administrative decrease of $61 million, or 2%, for the fiscal year ended June 30, 2022 as compared to fiscal 2021.

Depreciation and amortization—Depreciation and amortization expense increased $8 million, or 1%, for the fiscal year ended June 30, 2022 as compared to fiscal 2021. For the fiscal year ended June 30, 2022, $28 million of higher amortization expense from intangible assets driven by the Company’s recent acquisitions was partially offset by $20 million of lower depreciation expense driven by the transition to digital and optimization of the Company’s printing operations. The impact of foreign currency fluctuations of the U.S. dollar against local currencies resulted in a depreciation and amortization expense decrease of $13 million, or 2%, for the fiscal year ended June 30, 2022 as compared to fiscal 2021.

Impairment and restructuring charges—During the fiscal years ended June 30, 2022 and 2021, the Company recorded restructuring charges of $94 million and $168 million, respectively.

During the fiscal year ended June 30, 2022, the Company recognized non-cash impairment charges of $15 million related to the write-down of fixed assets associated with the shutdown and anticipated sale of certain U.S. printing facilities at the Dow Jones segment.

See Note 5—Restructuring Programs and Note 7—Property, Plant and Equipment in the accompanying Consolidated Financial Statements.

Equity losses of affiliates—Equity losses of affiliates decreased by $52 million for the fiscal year ended June 30, 2022 as compared to fiscal 2021, primarily due to the absence of the $54 million non-cash write-down of the Foxtel Group’s investment in the Nickelodeon Australia Joint Venture in the fourth quarter of fiscal 2021. See Note 6—Investments in the accompanying Consolidated Financial Statements.

Interest expense, net—Interest expense, net for the fiscal year ended June 30, 2022 increased $46 million as compared to fiscal 2021, primarily driven by the issuance of the 2021 and 2022 Senior Notes in April 2021 and February 2022, respectively, and the incurrence of the Term A Loans in March 2022. See Note 9—Borrowings in the accompanying Consolidated Financial Statements.

Other, net—Other, net decreased $91 million for the fiscal year ended June 30, 2022 as compared to fiscal 2021. See Note 21—Additional Financial Information in the accompanying Consolidated Financial Statements.

Income tax expense—The Company’s income tax expense and effective tax rate for the fiscal year ended June 30, 2022 were $52 million and 6%, respectively, as compared to an income tax expense and effective tax rate of $61 million and 14%, respectively, for fiscal 2021.

For the fiscal year ended June 30, 2022, the Company recorded income tax expense of $52 million on pre-tax income of $812 million, resulting in an effective tax rate that was lower than the U.S. statutory tax rate. The tax rate was impacted by foreign operations which are subject to higher tax rates, offset by the reversal of valuation allowances, including $149 million related to certain foreign deferred tax assets that are more likely than not to be realized, the lower tax impact related to the sale of REA Group’s Malaysia and Thailand businesses and the remeasurement of deferred taxes in the U.K.

For the fiscal year ended June 30, 2021, the Company recorded income tax expense of $61 million on pre-tax income of $450 million, resulting in an effective tax rate that was lower than the U.S. statutory tax rate. The tax rate was impacted by valuation

42

Table of Contents

allowances being recorded against tax benefits in certain foreign jurisdictions with operating losses and by the impact of foreign operations which are subject to higher tax rates, offset by a release of valuation allowances of $64 million related to certain U.S. deferred tax assets that are more likely than not to be realized and the remeasurement of deferred taxes in the U.K.

Management assesses available evidence to determine whether sufficient future taxable income will be generated to permit the use of existing deferred tax assets. Based on management’s assessment of available evidence, it has been determined that it is more likely than not that deferred tax assets in certain foreign jurisdictions may not be realized and therefore, a valuation allowance has been established against those tax assets.

Net income—Net income was $760 million for the fiscal year ended June 30, 2022, as compared to $389 million for the fiscal year ended June 30, 2021, an improvement of $371 million, or 95%, primarily driven by higher Total Segment EBITDA, lower impairment and restructuring charges and lower losses from equity affiliates, partially offset by lower Other, net and higher interest expense.

Net income attributable to noncontrolling interests—Net income attributable to noncontrolling interests was $137 million for the fiscal year ended June 30, 2022, as compared to net income attributable to noncontrolling interests of $59 million for the fiscal year ended June 30, 2021, primarily driven by increased earnings at REA Group, which included the $107 million gain from the disposition of its entities in Malaysia and Thailand.

Segment Analysis

Segment EBITDA is defined as revenues less operating expenses and selling, general and administrative expenses. Segment EBITDA does not include: depreciation and amortization, impairment and restructuring charges, equity losses of affiliates, interest (expense) income, net, other, net and income tax (expense) benefit. Segment EBITDA may not be comparable to similarly titled measures reported by other companies, since companies and investors may differ as to what items should be included in the calculation of Segment EBITDA.

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

Total Segment EBITDA is a non-GAAP measure and should be considered in addition to, not as a substitute for, net income (loss), cash flow and other measures of financial performance reported in accordance with GAAP. In addition, this measure does not reflect cash available to fund requirements and excludes items, such as depreciation and amortization and impairment and restructuring charges, which are significant components in assessing the Company’s financial performance. The Company believes that the presentation of Total Segment EBITDA provides useful information regarding the Company’s operations and other factors that affect the Company’s reported results. Specifically, the Company believes that by excluding certain one-time or non-cash items such as impairment and restructuring charges and depreciation and amortization, as well as potential distortions between periods caused by factors such as financing and capital structures and changes in tax positions or regimes, the Company provides users of its consolidated financial statements with insight into both its core operations as well as the factors that affect reported results between periods but which the Company believes are not representative of its core business. As a result, users of the Company’s consolidated financial statements are better able to evaluate changes in the core operating results of the Company across different periods.

43

Table of Contents

The following table reconciles Net income to Total Segment EBITDA for the fiscal years ended June 30, 2022 and 2021:

The following table sets forth the Company’s Revenues and Segment EBITDA by reportable segment for the fiscal years ended June 30, 2022 and 2021:

Digital Real Estate Services (17% and 15% of the Company’s consolidated revenues in fiscal 2022 and 2021, respectively)

For the fiscal year ended June 30, 2022, revenues at the Digital Real Estate Services segment increased $348 million, or 25%, as compared to fiscal 2021. At REA Group, revenues increased $277 million, or 37%, to $1,029 million for the fiscal year ended June 30, 2022 from $752 million in fiscal 2021, primarily due to the $143 million contribution from the acquisition of Mortgage Choice in the fourth quarter of fiscal 2021, an increase in Australian depth revenue driven by higher national listings and price increases and an $18 million increase from the acquisition of REA India in the second quarter of fiscal 2021, partially offset by the $29 million negative impact of foreign currency fluctuations and the $22 million adverse impact from a valuation adjustment related to expected trail commissions at its financial services business. Revenues at Move increased $71 million, or 11%, to $712

44

Table of Contents

million for the fiscal year ended June 30, 2022 from $641 million in fiscal 2021, primarily driven by higher real estate revenues. The traditional lead generation product benefited from higher contribution from Market VIPSM, a hybrid product offering, in addition to increased yield from ConnectionsSM Plus, partially offset by lower lead volume. The referral model benefited from higher average home values, partially offset by lower transaction volume, and generated 31% of total Move revenues. These increases were partially offset by the $12 million impact from the sale of Top Producer in the third quarter of fiscal 2021. Lead volumes declined 23% for the fiscal year ended June 30, 2022, as compared to fiscal 2021. The impact of the 53rd week in fiscal 2022 resulted in a revenue increase of approximately $14 million for the segment.

For the fiscal year ended June 30, 2022, Segment EBITDA at the Digital Real Estate Services segment increased $60 million, or 12%, as compared to fiscal 2021. The increase in Segment EBITDA was primarily driven by the $75 million higher contribution from REA Group, mainly due to the higher revenues discussed above, and inclusive of a $9 million and $3 million negative impact from the acquisitions of REA India and Mortgage Choice, respectively. The increase was partially offset by higher employee costs at Move and REA Group, $29 million of higher marketing costs at Move, the $14 million adverse impact from a valuation adjustment related to expected trail commissions at REA Group’s financial services business and the $12 million negative impact of foreign currency fluctuations.

Subscription Video Services (20% and 22% of the Company’s consolidated revenues in fiscal 2022 and 2021, respectively)

For the fiscal year ended June 30, 2022, revenues at the Subscription Video Services segment decreased $46 million, or 2%, as compared to fiscal 2021, due to the negative impact of foreign currency fluctuations, as the $114 million increase in streaming revenues, primarily from BINGE and Kayo, and higher advertising revenues more than offset lower residential subscription revenues resulting from fewer residential broadcast subscribers. Foxtel Group streaming subscription revenues represented approximately 20% of total circulation and subscription revenues for the fiscal year ended June 30, 2022, as compared to 14% in fiscal 2021. The impact of foreign currency fluctuations of the U.S. dollar against local currencies resulted in a revenue decrease of $61 million, or 3%, for the fiscal year ended June 30, 2022, as compared to fiscal 2021.

For the fiscal year ended June 30, 2022, Segment EBITDA increased $1 million as compared to fiscal 2021, primarily due to the absence of $57 million of additional sports programming rights and production costs recognized in the prior year that were deferred from the fourth quarter of fiscal 2020 due to COVID-19 and lower employee costs due to reduced headcount, largely offset by higher sports and entertainment programming rights costs due to increased content availability, higher technology costs, higher investment spending on streaming products, mainly in marketing, and the negative $8 million impact of foreign currency fluctuations.

The following tables provide information regarding certain key performance indicators for the Foxtel Group, the primary reporting unit within the Subscription Video Services segment, as of and for the fiscal years ended June 30, 2022 and 2021. Management believes these metrics provide useful information to allow investors to understand trends in consumer behavior and acceptance of the various services offered by the Foxtel Group. Management utilizes these metrics to track and forecast subscription revenue trends across the business’s various linear and streaming products. See “Part I. Business” for further detail regarding these performance indicators including definitions and methods of calculation.

45

Table of Contents

(a)Subscribing households throughout Australia as of June 30, 2022 and 2021.

(b)Commercial subscribers throughout Australia as of June 30, 2022 and 2021.

(c)Total and Paid subscribers for the applicable streaming service as of June 30, 2022 and 2021. Paid subscribers excludes customers receiving service for no charge under certain new subscriber promotions.

(d)Total subscribers consists of Foxtel’s broadcast and streaming services listed above, and, as of June 30, 2022, Flash.

(e)Average monthly broadcast residential subscription revenue per user (excluding Optus) (Broadcast ARPU) for the fiscal years ended June 30, 2022 and 2021.

(f)Broadcast residential subscriber churn rate (excluding Optus) (Broadcast Subscriber Churn) for the fiscal years ended June 30, 2022 and 2021.

Dow Jones (19% and 18% of the Company’s consolidated revenues in fiscal 2022 and 2021, respectively)

For the fiscal year ended June 30, 2022, revenues at the Dow Jones segment increased $302 million, or 18%, as compared to fiscal 2021, primarily driven by the increase in circulation and subscription revenues, higher advertising revenues, the $65 million impact from the acquisition of IBD in the fourth quarter of fiscal 2021 and the $47 million impact from the acquisition of OPIS in the third quarter of fiscal 2022. Digital revenues at the Dow Jones segment represented 75% of total revenues for the fiscal year ended June 30, 2022, as compared to 72% in fiscal 2021. The impact of foreign currency fluctuations of the U.S. dollar against local currencies resulted in a revenue decrease of $10 million for the fiscal year ended June 30, 2022 as compared to fiscal 2021. The impact of the 53rd week in fiscal 2022 resulted in a revenue increase of approximately $40 million.

46

Table of Contents

Circulation and subscription revenues

Circulation and subscription revenues increased $220 million, or 17%, during the fiscal year ended June 30, 2022 as compared to fiscal 2021. Circulation and other revenues increased $120 million, or 15%, primarily driven by the $59 million impact from the acquisition of IBD and the growth in digital-only subscriptions at The Wall Street Journal and Barron’s Group. During the fourth quarter of fiscal 2022, average daily digital-only subscriptions at The Wall Street Journal increased 14% to 3.1 million as compared to fiscal 2021, and digital revenues represented 67% of circulation revenue for the fiscal year ended June 30, 2022, as compared to 64% in fiscal 2021. Revenues at the professional information business increased $100 million, or 21%, primarily driven by the $47 million impact from the acquisition of OPIS and an increase of $35 million in Risk & Compliance revenues. The impact of the 53rd week in fiscal 2022 resulted in a circulation and subscription revenue increase of approximately $31 million.

The following table summarizes average daily consumer subscriptions during the three months ended June 30, 2022 and 2021 for select publications and for all consumer subscription products.(a)

________________________

(a)Based on internal data for the periods from March 28, 2022 to July 3, 2022 and March 29, 2021 to June 27, 2021, respectively, with independent verification procedures performed by PricewaterhouseCoopers LLP UK.

(b)Subscriptions include individual consumer subscriptions, as well as subscriptions purchased by companies, schools, businesses and associations for use by their respective employees, students, customers or members. Subscriptions exclude single-copy sales and copies purchased by hotels, airlines and other businesses for limited distribution or access to customers.

(c)For some publications, including The Wall Street Journal and Barron’s, Dow Jones sells bundled print and digital products. For bundles that provide access to both print and digital products every day of the week, only one unit is reported each day and is designated as a print subscription. For bundled products that provide access to the print product only on specified days and full digital access, one print subscription is reported for each day that a print copy is served and one digital subscription is reported for each remaining day of the week.

(d)Barron’s Group consists of Barron’s, MarketWatch, Financial News and Private Equity News.

(e)Total Consumer consists of The Wall Street Journal, Barron’s Group and Investor’s Business Daily.

Advertising revenues

Advertising revenues increased $76 million, or 20%, during the fiscal year ended June 30, 2022 as compared to fiscal 2021. Digital advertising revenues increased by $47 million, driven by higher average yields, and represented 59% of advertising revenue for the fiscal year ended June 30, 2022, as compared to 58% in fiscal 2021. The increase in advertising revenues was also due to the $29 million increase in print advertising revenues driven by the ongoing recovery from COVID-19. The impact of the 53rd week in fiscal 2022 resulted in an advertising revenue increase of approximately $9 million.

47

Table of Contents

Segment EBITDA

For the fiscal year ended June 30, 2022, Segment EBITDA at the Dow Jones segment increased $101 million, or 30%, as compared to fiscal 2021, including the $19 million and $17 million impacts from the acquisitions of IBD and OPIS, respectively, primarily due to the increase in revenues discussed above, partially offset by increased employee costs, the $25 million impact from OPIS and CMA-related transaction costs and increased sales and marketing costs.

Book Publishing (21% of the Company’s consolidated revenues in both fiscal 2022 and 2021)

For the fiscal year ended June 30, 2022, revenues at the Book Publishing segment increased $206 million, or 10%, as compared to fiscal 2021, primarily driven by the $149 million contribution from the acquisition of HMH Books and Media in the fourth quarter of fiscal 2021, increased book sales in the U.K. and higher revenues in the General Books category, which benefited from the releases of Twelve and a Half by Gary Vaynerchuk, The Storyteller by Dave Grohl and The Pioneer Woman Cooks: Super Easy! by Ree Drummond. Christian Publishing sales also improved, driven by the ongoing recovery of certain distribution channels from COVID-19. The increases were partially offset by a $16 million impact from lower sales of the Bridgerton series and lower sales in the foreign language and Children’s publishing categories. Digital sales increased by 4% as compared to fiscal 2021 due to growth in downloadable audiobooks, partially offset by lower sales of e-books. Digital sales represented approximately 21% of consumer revenues during the fiscal year ended June 30, 2022. The impact of foreign currency fluctuations of the U.S. dollar against local currencies resulted in a revenue decrease of $14 million, or 1%, for the fiscal year ended June 30, 2022 as compared to fiscal 2021. The impact of the 53rd week in fiscal 2022 resulted in a revenue increase of approximately $20 million.

For the fiscal year ended June 30, 2022, Segment EBITDA at the Book Publishing segment increased $3 million, or 1%, as compared to fiscal 2021, including a $22 million positive impact from the acquisition of HMH Books and Media, as the higher revenues discussed above were largely offset by higher manufacturing and freight costs related to increased sales volumes, the mix of titles and the impact from ongoing supply chain and inflationary pressures. These supply chain and inflationary pressures are expected to continue to impact the business in the near term.

News Media (23% and 24% of the Company’s consolidated revenues in fiscal 2022 and 2021, respectively)

For the fiscal year ended June 30, 2022, revenues at the News Media segment increased $218 million, or 10%, as compared to fiscal 2021. Advertising revenues increased $120 million as compared to fiscal 2021, driven by digital advertising growth across

48

Table of Contents

key mastheads, print advertising growth at News UK, the positive impact of the 53rd week and higher revenues at Wireless Group, partially offset by the negative impact of foreign currency fluctuations. Circulation and subscription revenues increased $83 million as compared to fiscal 2021, driven by higher content licensing revenues, primarily at News Corp Australia, digital subscriber growth across key mastheads, cover price increases and the positive impact of the 53rd week, partially offset by print volume declines and the negative impact of foreign currency fluctuations. Other revenues for the fiscal year ended June 30, 2022 increased $15 million as compared to fiscal 2021, primarily driven by increased revenues at News Corp Australia, partially offset by lower revenues at News UK. The impact of foreign currency fluctuations of the U.S. dollar against local currencies resulted in a revenue decrease of $47 million, or 2%, for the fiscal year ended June 30, 2022 as compared to fiscal 2021. The impact of the 53rd week in fiscal 2022 resulted in a revenue increase of approximately $36 million.

For the fiscal year ended June 30, 2022, Segment EBITDA at the News Media segment improved by $165 million as compared to fiscal 2021, primarily due to higher contributions from News Corp Australia of $109 million and News UK of $54 million mainly driven by the higher revenues described above, as well as increased contributions of $18 million and $16 million from Wireless Group and the New York Post, respectively, partially offset by increased costs associated with TalkTV.

News Corp Australia

Revenues were $1,088 million for the fiscal year ended June 30, 2022, an increase of $91 million, or 9%, as compared to fiscal 2021 revenues of $997 million. Circulation and subscription revenues increased $44 million, primarily driven by higher content licensing revenues, digital subscriber growth and the positive impact of the 53rd week, partially offset by the $14 million negative impact of foreign currency fluctuations and print volume declines. Advertising revenues increased $21 million, primarily due to higher digital advertising revenues driven by higher impressions and the positive impact of the 53rd week, partially offset by the $14 million negative impact of foreign currency fluctuations. Other revenues increased $26 million, primarily due to higher third-party printing and other services revenues. The impact of the 53rd week in fiscal 2022 resulted in a revenue increase of approximately $15 million.

News UK

Revenues were $1,007 million for the fiscal year ended June 30, 2022, an increase of $65 million, or 7%, as compared to fiscal 2021 revenues of $942 million. Advertising revenues increased $61 million, primarily due to higher digital advertising revenues, mainly at The Sun, and higher print advertising revenues, mainly at The Times, driven by the ongoing recovery of the advertising market from COVID-19 and the positive impact of the 53rd week, partially offset by the $4 million negative impact of foreign currency fluctuations. Circulation and subscription revenues increased $25 million, primarily driven by cover price increases, digital subscriber growth and the positive impact of the 53rd week, partially offset by print volume declines and the $8 million negative impact of foreign currency fluctuations. Other revenues decreased $21 million, primarily due to lower brand partnership revenues. The impact of the 53rd week in fiscal 2022 resulted in a revenue increase of approximately $18 million.

LIQUIDITY AND CAPITAL RESOURCES

Current Financial Condition

The Company’s principal source of liquidity is internally generated funds and cash and cash equivalents on hand. As of June 30, 2022, the Company’s cash and cash equivalents were $1.82 billion. The Company also has available borrowing capacity under the Revolving Facility and certain other facilities, as described below, and expects to have access to the worldwide credit and capital markets, subject to market conditions, in order to issue additional debt if needed or desired. The Company currently expects these elements of liquidity will enable it to meet its liquidity needs for at least the next 12 months, including repayment of indebtedness. Although the Company believes that its cash on hand and future cash from operations, together with its access to the credit and capital markets, will provide adequate resources to fund its operating and financing needs for at least the next 12 months, its access to, and the availability of, financing on acceptable terms in the future will be affected by many factors, including: (i) the financial and operational performance of the Company and/or its operating subsidiaries, as applicable; (ii) the Company’s credit ratings and/or the credit rating of its operating subsidiaries, as applicable; (iii) the provisions of any relevant debt instruments, credit agreements, indentures and similar or associated documents; (iv) the liquidity of the overall credit and capital markets; and (v) the state of the economy. There can be no assurances that the Company will continue to have access to the credit and capital markets on acceptable terms.

As of June 30, 2022, the Company’s consolidated assets included $853 million in cash and cash equivalents that were held by its foreign subsidiaries. Of this amount, $169 million is cash not readily accessible by the Company as it is held by REA Group, a majority owned but separately listed public company. REA Group must declare a dividend in order for the Company to have access to its share of REA Group’s cash balance. Prior to the enactment of the Tax Cuts and Jobs Act (“Tax Act”), the Company’s

49

Table of Contents

undistributed foreign earnings were considered permanently reinvested and as such, United States federal and state income taxes were not previously recorded on these earnings. As a result of the Tax Act, substantially all of the Company’s earnings in foreign subsidiaries generated prior to the enactment of the Tax Act were deemed to have been repatriated and taxed accordingly. As of June 30, 2022, the Company has approximately $900 million of undistributed foreign earnings that it intends to reinvest permanently. It is not practicable to estimate the amount of tax that might be payable if these earnings were repatriated. The Company may repatriate future earnings of certain foreign subsidiaries in which case the Company may be required to accrue and pay additional taxes, including any applicable foreign withholding taxes and income taxes.

The principal uses of cash that affect the Company’s liquidity position include the following: operational expenditures including employee costs, paper purchases and programming costs; capital expenditures; income tax payments; investments in associated entities; acquisitions; the repurchase of shares; dividends; and the repayment of debt and related interest. In addition to the acquisitions and dispositions disclosed elsewhere, the Company has evaluated, and expects to continue to evaluate, possible future acquisitions and dispositions of certain businesses. Such transactions may be material and may involve cash, the issuance of the Company’s securities or the assumption of indebtedness.

Issuer Purchases of Equity Securities

On September 22, 2021, the Company announced a new Repurchase Program authorizing the Company to purchase up to $1 billion in the aggregate of its outstanding Class A Common Stock and Class B Common Stock. The Repurchase Program replaces the Company’s $500 million Class A Common Stock repurchase program approved by the Board of Directors in May 2013. The manner, timing, number and share price of any repurchases will be determined by the Company at its discretion and will depend upon such factors as the market price of the stock, general market conditions, applicable securities laws, alternative investment opportunities and other factors. The Repurchase Program has no time limit and may be modified, suspended or discontinued at any time. As of June 30, 2022, the remaining authorized amount under the Repurchase Program was approximately $817 million.

Stock repurchases commenced on November 9, 2021. During the fiscal year ended June 30, 2022, the Company repurchased and subsequently retired 5.8 million shares of Class A Common Stock for approximately $122 million and 2.9 million shares of Class B Common Stock for approximately $61 million. The Company did not purchase any of its Class A Common Stock or Class B Common Stock during the fiscal year ended June 30, 2021.

Dividends

The following table summarizes the dividends declared and paid per share on both the Company’s Class A Common Stock and Class B Common Stock:

The timing, declaration, amount and payment of future dividends to stockholders, if any, is within the discretion of the Board of Directors. The Board of Directors’ decisions regarding the payment of future dividends will depend on many factors, including the Company’s financial condition, earnings, capital requirements and debt facility covenants, other contractual restrictions, as well as legal requirements, regulatory constraints, industry practice, market volatility and other factors that the Board of Directors deems relevant.

Sources and Uses of Cash—Fiscal 2022 versus Fiscal 2021

Net cash provided by operating activities for the fiscal years ended June 30, 2022 and 2021 was as follows (in millions):

Net cash provided by operating activities increased by $117 million for the fiscal year ended June 30, 2022 as compared to fiscal 2021. The increase was primarily due to higher Total Segment EBITDA, partially offset by higher working capital, driven by higher employee bonus and equity-based compensation payments, payments related to one-time legal settlement costs and higher inventory purchases, and $41 million in higher interest payments.

50

Table of Contents

Net cash used in investing activities for the fiscal years ended June 30, 2022 and 2021 was as follows (in millions):

Net cash used in investing activities was $2,076 million for the fiscal year ended June 30, 2022 as compared to net cash used in investing activities of $1,292 million for fiscal 2021.

During the fiscal year ended June 30, 2022, the Company used $1,501 million of cash for acquisitions, of which $1,146 million and $288 million related to the acquisitions of OPIS and CMA in February and June 2022, respectively. The Company also used $499 million of cash for capital expenditures, of which $189 million related to the Foxtel Group, and $112 million for investments.

During the fiscal year ended June 30, 2021, the Company used $886 million of cash for acquisitions, primarily HMH Books & Media, IBD and Mortgage Choice, and used $390 million of cash for capital expenditures, of which $139 million related to the Foxtel Group.

Net cash provided by financing activities for the fiscal years ended June 30, 2022 and 2021 was as follows (in millions):

The Company had net cash provided by financing activities of $404 million for the fiscal year ended June 30, 2022 as compared to net cash provided by financing activities of $699 million for fiscal 2021.

During the fiscal year ended June 30, 2022, the Company issued $500 million of 2022 Senior Notes and incurred $500 million of Term A Loans and had new borrowings for REA Group and the Foxtel Group of $690 million. The net cash provided by financing activities was partially offset by $838 million of borrowing repayments, primarily related to the Foxtel Group’s 2019 Credit Facility and REA Group’s refinancing of its bridge facility, $179 million of repurchases of outstanding Class A and Class B Common Stock under the Repurchase Program and dividend payments of $175 million to News Corporation stockholders and REA Group minority stockholders. See Note 9—Borrowings in the accompanying Consolidated Financial Statements.

During the fiscal year ended June 30, 2021, the Company issued $1.0 billion of senior notes and had new borrowings related to REA Group and the Foxtel Group of $515 million, which includes drawdowns under REA Group's 2021 bridge facility to repay outstanding debt in connection with its refinancing completed in the fourth quarter of fiscal 2021. The net cash provided by financing activities was partially offset by $557 million of repayments for borrowings related to the Foxtel Group and REA Group and dividend payments of $163 million to News Corporation stockholders and REA Group minority stockholders.

Reconciliation of Free Cash Flow Available to News Corporation

Free cash flow available to News Corporation is a non-GAAP financial measure defined as net cash provided by operating activities, less capital expenditures (“free cash flow”), less REA Group free cash flow, plus cash dividends received from REA Group. Free cash flow available to News Corporation should be considered in addition to, not as a substitute for, cash flows from operations and other measures of financial performance reported in accordance with GAAP. Free cash flow available to News Corporation may not be comparable to similarly titled measures reported by other companies, since companies and investors may differ as to what items should be included in the calculation of free cash flow.

The Company considers free cash flow available to News Corporation to provide useful information to management and investors about the amount of cash that is available to be used to strengthen the Company’s balance sheet and for strategic opportunities including, among others, investing in the Company’s business, strategic acquisitions, dividend payouts and repurchasing stock. The Company believes excluding REA Group’s free cash flow and including dividends received from REA Group provides users of its consolidated financial statements with a measure of the amount of cash flow that is readily available to the Company, as REA Group is a separately listed public company in Australia and must declare a dividend in order for the Company to have access to its share of REA Group’s cash balance. The Company believes free cash flow available to News Corporation provides a more conservative view of the Company’s free cash flow because this presentation includes only that amount of cash the Company actually receives from REA Group, which has generally been lower than the Company’s unadjusted free cash flow.

A limitation of free cash flow available to News Corporation is that it does not represent the total increase or decrease in the cash balance for the period. Management compensates for the limitation of free cash flow available to News Corporation by also relying on the net change in cash and cash equivalents as presented in the Statements of Cash Flows prepared in accordance with GAAP which incorporate all cash movements during the period.

51

Table of Contents

The following table presents a reconciliation of net cash provided by operating activities to free cash flow available to News Corporation:

Free cash flow available to News Corporation decreased $68 million in the fiscal year ended June 30, 2022 to $663 million from $731 million in fiscal 2021, primarily due to higher capital expenditures and higher REA Group free cash flow, partially offset by higher net cash provided by operating activities as discussed above and higher dividends received from REA Group.

Borrowings

As of June 30, 2022, the Company, certain subsidiaries of NXE Australia Pty Limited (the “Foxtel Group” and together with such subsidiaries, the “Foxtel Debt Group”) and REA Group and certain of its subsidiaries (REA Group and certain of its subsidiaries, the “REA Debt Group”) had total borrowings of $3.07 billion, including the current portion. Both the Foxtel Group and REA Group are consolidated but non wholly-owned subsidiaries of News Corp, and their indebtedness is only guaranteed by members of the Foxtel Debt Group and REA Debt Group, respectively, and is non-recourse to News Corp.

News Corporation Borrowings

As of June 30, 2022, the Company had (i) borrowings of $1,979 million, consisting of its outstanding 2021 Senior Notes, 2022 Senior Notes and Term A Loans and (ii) $750 million of undrawn commitments available under the Revolving Facility.

In February 2022, the Company issued $500 million of senior notes due 2032. The 2022 Senior Notes bear interest at a fixed rate of 5.125% per annum, payable in cash semi-annually on February 15 and August 15 of each year, commencing on August 15, 2022. The notes will mature on February 15, 2032.

Term Loan A and Revolving Credit Facilities

On March 29, 2022, the Company terminated its existing unsecured $750 million revolving credit facility and entered into the 2022 Credit Agreement that provides for $1,250 million of unsecured credit facilities comprised of the $500 million Term A Facility and the $750 million Revolving Facility that can be used for general corporate purposes. The Company borrowed the full amount of the Term A Facility during the fourth quarter of fiscal 2022, and the Revolving Facility remains undrawn as of June 30, 2022.

The Term A Loans will amortize in equal quarterly installments in an aggregate annual amount equal to 0.0%, 2.5%, 2.5%, 5.0% and 5.0%, respectively, of the original principal amount of the Term A Facility for each 12-month period commencing on June 30, 2022. The loans under the Revolving Facility will not amortize. All amounts under the 2022 Credit Agreement with respect to the Facilities are due on March 31, 2027, unless earlier terminated in the circumstances set forth in the 2022 Credit Agreement. The Company may request that the maturity date of the Term A Facility be extended under certain circumstances as set forth in the 2022 Credit Agreement by at least one year. The Company may also request that the maturity date of the revolving credit commitments under the Revolving Facility be extended under certain circumstances as set forth in the 2022 Credit Agreement for up to two additional one-year periods.

Interest on borrowings is based on either (a) an Alternative Currency Term Rate formula, (b) a Term SOFR formula, (c) an Alternative Currency Daily Rate formula ((a) through (c) each, a “Relevant Rate”) or (d) the Base Rate formula, each as set forth in the 2022 Credit Agreement. The applicable margin for borrowings under the Facilities and the commitment fee for undrawn balances under the Revolving Facility are based on the pricing grid in the 2022 Credit Agreement, which varies based on the Company’s adjusted operating income net leverage ratio. At June 30, 2022, the Company was paying a commitment fee of 0.20%

52

Table of Contents

on any undrawn balance under the Revolving Facility and, with respect to any outstanding borrowings under the Facilities, an applicable margin of 0.375% for a Base Rate borrowing and 1.375% for a Relevant Rate borrowing.

The Company entered into an interest rate swap derivative to fix the floating rate interest component of its Term A Loans at 2.083%. Refer to Note 11—Financial Instruments and Fair Value Measurements in the accompanying Consolidated Financial Statements for further detail.

Foxtel Group Borrowings

As of June 30, 2022, the Foxtel Debt Group had (i) borrowings of approximately $742 million, including the full drawdown of its 2019 Term Loan Facility, amounts outstanding under the 2019 Credit Facility and 2017 Working Capital Facility, its outstanding U.S. private placement senior unsecured notes and amounts outstanding under the Telstra Facility (described below), and (ii) total undrawn commitments of A$539 million available under the 2017 Working Capital Facility and 2019 Credit Facility.

In addition to third-party indebtedness, the Foxtel Debt Group has related party indebtedness, including A$700 million of outstanding principal of shareholder loans and A$200 million of available shareholder facilities from the Company. The shareholder loans bear interest at a variable rate of the Australian BBSY plus an applicable margin ranging from 6.30% to 7.75% and mature in December 2027. The shareholder revolving credit facility bears interest at a variable rate of the Australian BBSY plus an applicable margin ranging from 2.00% to 3.75%, depending on the Foxtel Debt Group’s net leverage ratio, and matures in July 2024. Additionally, the Foxtel Debt Group has an A$170 million subordinated shareholder loan facility with Telstra which can be used to finance cable transmission costs due to Telstra. The Telstra Facility bears interest at a variable rate of the Australian BBSY plus an applicable margin of 7.75% and matures in December 2027. The Company excludes the utilization of the Telstra Facility from the Statements of Cash Flows because it is non-cash.

REA Group Borrowings

As of June 30, 2022, REA Group had (i) borrowings of approximately $281 million, consisting of amounts outstanding under its 2022 Credit Facility (as defined below), and (ii) A$187 million of undrawn commitments available under its 2022 Credit Facility.

During the fiscal year ended June 30, 2022, REA Group completed a debt refinancing in which it repaid all amounts outstanding under its 2021 Bridge facility with the proceeds from a new A$600 million unsecured syndicated credit facility (the “2022 Credit Facility”) consisting of two sub-facilities: (i) a three year, A$400 million revolving loan facility (the “2022 Credit facility — tranche 1”) and (ii) a four year, A$200 million revolving loan facility (the “2022 Credit facility — tranche 2”).

Borrowings under the 2022 Credit facility — tranche 1 accrue interest at a rate of the Australian BBSY plus a margin of between 1.00% and 2.10%, depending on REA Group’s net leverage ratio. Borrowings under the 2022 Credit facility — tranche 2 accrue interest at a rate of the Australian BBSY plus a margin of between 1.15% and 2.25%, depending on REA Group’s net leverage ratio. Both tranches carry a commitment fee of 40% of the applicable margin on any undrawn balance.

All of the Company’s borrowings contain customary representations, covenants and events of default. The Company was in compliance with all such covenants at June 30, 2022.

See Note 9—Borrowings in the accompanying Consolidated Financial Statements for further details regarding the Company’s outstanding debt, including additional information about interest rates, maturities and covenants related to such debt arrangements.

Commitments

The Company has commitments under certain firm contractual arrangements (“firm commitments”) to make future payments. These firm commitments secure the current and future rights to various assets and services to be used in the normal course of operations.

53

Table of Contents

The following table summarizes the Company’s material firm commitments as of June 30, 2022:

________________________

(a)The Company has commitments under purchase obligations related to minimum subscriber guarantees for license fees, printing contracts, capital projects, marketing agreements, production services and other legally binding commitments.

(b)The Company has sports programming rights commitments with the National Rugby League, Australian Football League and Cricket Australia, as well as certain other broadcast rights which are payable through fiscal 2028.

(c)The Company has programming rights commitments with various suppliers for programming content.

(d)The Company leases office facilities, warehouse facilities, printing plants, satellite services and equipment. These leases, which are classified as operating leases, are expected to be paid at certain dates through fiscal 2048. Amounts reflected represent only the Company’s lease obligations for which it has firm commitments.

(e)The Company has contractual commitments for satellite transmission services. The Company’s satellite transponder services arrangements extend through fiscal 2032 and are accounted for as operating or finance leases, based on the underlying terms of those arrangements.

(f)See Note 9—Borrowings in the accompanying Consolidated Financial Statements.

(g)Reflects the Company’s expected future interest payments based on borrowings outstanding and interest rates applicable at June 30, 2022. Such rates are subject to change in future periods. See Note 9—Borrowings in the accompanying Consolidated Financial Statements.

The Company has certain contracts to purchase newsprint, ink and plates that require the Company to purchase a percentage of its total requirements for production. Since the quantities purchased annually under these contracts are not fixed and are based on the Company’s total requirements, the amount of the related payments for these purchases is excluded from the table above.

The table also excludes the Company’s pension obligations, other postretirement benefits (“OPEB”) obligations and the liabilities for unrecognized tax benefits for uncertain tax positions as the Company is unable to reasonably predict the ultimate amount and timing of the commitments. The Company made contributions of $29 million and $35 million to its pension plans in fiscal 2022 and fiscal 2021, respectively. Future plan contributions are dependent upon actual plan asset returns, interest rates and statutory requirements. The Company anticipates that it will make contributions of approximately $12 million in fiscal 2023, assuming that actual plan asset returns are consistent with the Company’s returns in fiscal 2022 and those expected beyond, and that interest rates remain constant. The Company will continue to make voluntary contributions as necessary to improve the funded status of the plans. Payments due to participants under the Company’s pension plans are primarily paid out of underlying trusts. Payments due under the Company’s OPEB plans are not required to be funded in advance, but are paid as medical costs are incurred by covered retiree populations, and are principally dependent upon the future cost of retiree medical benefits under the Company’s OPEB plans. The Company expects its OPEB payments to approximate $8 million in fiscal 2023. See Note 17—Retirement Benefit Obligations in the accompanying Consolidated Financial Statements.

Other significant ongoing expenses or cash requirements for each of the Company’s segments are discussed above in “Overview of the Company’s Businesses.” The Company generally expects to fund these short and long-term cash requirements with internally-generated funds and cash and cash equivalents on hand.

54

Table of Contents

Contingencies

The Company routinely is involved in various legal proceedings, claims and governmental inspections or investigations, including those discussed in Note 16—Commitments and Contingencies in the accompanying Consolidated Financial Statements. The outcome of these matters and claims is subject to significant uncertainty, and the Company often cannot predict what the eventual outcome of pending matters will be or the timing of the ultimate resolution of these matters. Fees, expenses, fines, penalties, judgments or settlement costs which might be incurred by the Company in connection with the various proceedings could adversely affect its results of operations and financial condition.

The Company establishes an accrued liability for legal claims when it determines that a loss is both probable and the amount of the loss can be reasonably estimated. Once established, accruals are adjusted from time to time, as appropriate, in light of additional information. The amount of any loss ultimately incurred in relation to matters for which an accrual has been established may be higher or lower than the amounts accrued for such matters. Legal fees associated with litigation and similar proceedings are expensed as incurred. The Company recognizes gain contingencies when the gain becomes realized or realizable. See Note 16—Commitments and Contingencies in the accompanying Consolidated Financial Statements.

The Company’s tax returns are subject to on-going review and examination by various tax authorities. Tax authorities may not agree with the treatment of items reported in the Company’s tax returns, and therefore the outcome of tax reviews and examinations can be unpredictable. The Company believes it has appropriately accrued for the expected outcome of uncertain tax matters and believes such liabilities represent a reasonable provision for taxes ultimately expected to be paid. However, these liabilities may need to be adjusted as new information becomes known and as tax examinations continue to progress, or as settlements or litigations occur.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

An accounting policy is considered to be critical if it is important to the Company’s financial condition and results of operations and if it requires significant judgment and estimates on the part of management in its application. The development and selection of these critical accounting policies have been determined by management of the Company. See Note 2—Summary of Significant Accounting Policies in the accompanying Consolidated Financial Statements.

Long-lived assets

The Company’s long-lived assets include goodwill, finite-lived and indefinite-lived intangible assets and property, plant and equipment. Assets acquired in business combinations are recorded at their estimated fair value at the date of acquisition. Goodwill is recorded as the difference between the cost of acquiring a business and the estimated fair values assigned to its tangible and identifiable intangible net assets and is assigned to one or more reporting units for purposes of testing for impairment.

Determining the fair value of assets acquired and liabilities assumed requires management’s judgment and often involves the use of significant estimates and assumptions, including assumptions with respect to future cash inflows and outflows, discount rates, asset lives and market multiples, among other items. Identifying reporting units and assigning goodwill to them requires judgment involving the aggregation of business units with similar economic characteristics and the identification of existing business units that benefit from the acquired goodwill. The judgments made in determining the estimated fair value assigned to each class of long-lived assets acquired, their reporting unit, as well as their useful lives can significantly impact net income. The Company allocates goodwill to disposed businesses using the relative fair value method.

Goodwill and Indefinite-lived Intangible Assets

The Company tests goodwill and indefinite-lived intangible assets for impairment on an annual basis in the fourth quarter and at other times if a significant event or change in circumstances indicates that it is more likely than not that the fair value of these assets has been reduced below their carrying value. The Company uses its judgment in assessing whether assets may have become impaired between annual impairment assessments. Indicators such as unexpected adverse economic factors, unanticipated technological changes or competitive activities, loss of key personnel and acts by governments and courts, may signal that an asset has become impaired.

Under ASC 350, in assessing goodwill for impairment, the Company has the option to first perform a qualitative assessment to determine whether events or circumstances exist that lead to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If the Company determines that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, the Company is not required to perform any additional tests in assessing goodwill

55

Table of Contents

for impairment. However, if the Company concludes otherwise or elects not to perform the qualitative assessment, then it is required to perform a quantitative analysis to determine the fair value of the reporting unit, and compare the calculated fair value of a reporting unit with its carrying amount, including goodwill. The Company determines the fair value of a reporting unit primarily by using both a discounted cash flow analysis and market-based valuation approach.

Determining fair value requires the exercise of significant judgments, including judgments about appropriate discount rates, long-term growth rates, relevant comparable company earnings multiples and the amount and timing of expected future cash flows. During the fourth quarter of fiscal 2022, as part of the Company’s long-range planning process, the Company completed its annual goodwill and indefinite-lived intangible asset impairment test.

The performance of the Company’s annual impairment analysis resulted in no impairments to goodwill and indefinite-lived intangible assets in fiscal 2022. Significant unobservable inputs utilized in the income approach valuation method were discount rates (ranging from 8.0% to 19.0%), long-term growth rates (ranging from 1.0% to 3.0%) and royalty rates (ranging from 0.25% to 7.0%). Significant unobservable inputs utilized in the market approach valuation method were EBITDA multiples from guideline public companies operating in similar industries and control premiums (ranging from 5.0% to 10.0%). Significant increases (decreases) in royalty rates, growth rates, control premiums and multiples, assuming no change in discount rates, would result in a significantly higher (lower) fair value measurement. Significant decreases (increases) in discount rates, assuming no changes in royalty rates, growth rates, control premiums and multiples, would result in a significantly higher (lower) fair value measurement. See Note 8—Goodwill and Other Intangible Assets in the accompanying Consolidated Financial Statements for further details regarding changes in these inputs and assumptions compared to prior fiscal years.

As of June 30, 2022, there were no reporting units with goodwill at-risk for future impairment. The Company will continue to monitor its goodwill for possible future impairment.

Programming Costs

Costs incurred in acquiring programming rights are accounted for in accordance with ASC 920, “Entertainment—Broadcasters.” Programming rights and the related liabilities are recorded at the gross amount of the liabilities when the license period has begun, the cost of the program is determinable and the program is accepted and available for airing. Programming costs are amortized based on the expected pattern of consumption over the license period or expected useful life of each program, which requires significant judgment. The pattern of consumption is based primarily on consumer viewership information as well as other factors. If initial airings are expected to generate higher viewership, an accelerated method of amortization is used. The Company monitors its programming amortization policy on an ongoing basis and any impact arising from changes to the policy would be recognized prospectively. The Company regularly reviews its programming assets to ensure they continue to reflect fair value. Changes in circumstances may result in a write-down of the asset to fair value. The Company has single and multi-year contracts for broadcast rights of sporting events. The costs of sports contracts are primarily charged to expense over the respective season as events are aired. For sports contracts with dedicated channels, the Company amortizes the sports programming rights costs over 12 months.

Income Taxes

The Company is subject to income taxes in the U.S. and various foreign jurisdictions in which it operates and records its tax provision for the anticipated tax consequences in its reported results of operations. Tax laws are complex and subject to different interpretations by the taxpayer and respective governmental taxing authorities. Significant judgment is required in determining the Company’s tax expense and in evaluating its tax positions including evaluating uncertainties as promulgated under ASC 740, “Income Taxes.”

The Company’s annual tax rate is based primarily on its geographic income and statutory tax rates in the various jurisdictions in which it operates. Significant management judgment is required in determining the Company’s provision for income taxes, deferred tax assets and liabilities and the valuation allowance recorded against the Company’s net deferred tax assets, if any. In assessing the likelihood of realization of deferred tax assets, management considers estimates of the amount and character of future taxable income. The Company’s actual effective tax rate and income tax expense could vary from estimated amounts due to the future impacts of various items, including changes in income tax laws, tax planning and the Company’s forecasted financial condition and results of operations in future periods. Although the Company believes its current estimates are reasonable, actual results could differ from these estimates.

The Company recognizes tax benefits from uncertain tax positions only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in

56

Table of Contents

the Consolidated Financial Statements from such positions are then measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. Significant management judgment is required to determine whether the recognition threshold has been met and, if so, the appropriate amount of unrecognized tax benefits to be recorded in the Consolidated Financial Statements. Management re-evaluates tax positions each period in which new information about recognition or measurement becomes available. The Company’s policy is to recognize, when applicable, interest and penalties on unrecognized income tax benefits as part of Income tax (expense) benefit.

See Note 19—Income Taxes in the accompanying Consolidated Financial Statements for further details regarding these estimates and assumptions and changes compared to prior fiscal years.

Retirement Benefit Obligations

The Company’s employees participate in various defined benefit pension and postretirement plans sponsored by the Company and its subsidiaries. See Note 17—Retirement Benefit Obligations in the accompanying Consolidated Financial Statements.

The Company records amounts relating to its pension and other postretirement benefit plans based on calculations specified by GAAP. The measurement and recognition of the Company’s pension and other postretirement benefit plans require the use of significant management judgments, including discount rates, expected return on plan assets, mortality and other actuarial assumptions. Net periodic benefit costs (income) are calculated based upon a number of actuarial assumptions, including a discount rate for plan obligations, an expected rate of return on plan assets and mortality rates. Current market conditions, including changes in investment returns and interest rates, were considered in making these assumptions. In developing the expected long-term rate of return, the pension portfolio’s past average rate of returns and future return expectations of the various asset classes were considered. The weighted average expected long-term rate of return of 4.3% for fiscal 2023 is based on a weighted average target asset allocation assumption of 17% equities, 76% fixed-income securities and 7% cash and other investments.

The Company recorded nil and $(1) million in net periodic benefit (income) costs in the Statements of Operations for the fiscal years ended June 30, 2022 and 2021, respectively. The Company utilizes the full yield-curve approach to estimate the service and interest cost components of net periodic benefit costs (income) for its pension and other postretirement benefit plans.

Although the discount rate used for each plan will be established and applied individually, a weighted average discount rate of 4.1% will be used in calculating the fiscal 2023 net periodic benefit costs (income). The discount rate reflects the market rate for high-quality fixed-income investments on the Company’s annual measurement date of June 30 and is subject to change each fiscal year. The discount rate assumptions used to account for pension and other postretirement benefit plans reflect the rates at which the benefit obligations could be effectively settled. The rate was determined by matching the Company’s expected benefit payments for the plans to a hypothetical yield curve developed using a portfolio of several hundred high-quality non-callable corporate bonds. The weighted average discount rate is volatile from year to year because it is determined based upon the prevailing rates in the U.S., the U.K., Australia and other foreign countries as of the measurement date.

The key assumptions used in developing the Company’s fiscal 2022 and 2021 net periodic benefit costs (income) for its plans consist of the following:

57

Table of Contents

The Company will use a weighted average long-term rate of return of 4.3% for fiscal 2023 based principally on a combination of current asset mix and an expectation of future long term investment returns. The accumulated net pre-tax losses on the Company’s pension plans as of June 30, 2022 were approximately $459 million which decreased from approximately $542 million for the Company’s pension plans as of June 30, 2021. This net decrease of $83 million was primarily due to currency movements and unrecognized losses amortized during fiscal 2022. Lower discount rates increase present values of benefit obligations and increase the Company’s deferred losses and also increase subsequent-year benefit costs. Higher discount rates decrease the present values of benefit obligations and reduce the Company’s accumulated net loss and decrease subsequent-year benefit costs. These deferred losses are being systematically recognized in future net periodic benefit costs (income) in accordance with ASC 715, “Compensation—Retirement Benefits.” Unrecognized losses for the primary plans in excess of 10% of the greater of the market-related value of plan assets or the plan’s projected benefit obligation are recognized over the average life expectancy for plan participants for the primary plans.

The Company made contributions of $29 million and $35 million to its pension plans in fiscal 2022 and 2021, respectively. Future plan contributions are dependent upon actual plan asset returns, statutory requirements and interest rate movements. Assuming that actual plan asset returns are consistent with the Company’s expected returns in fiscal 2022 and beyond, and that interest rates remain constant, the Company anticipates that it will make contributions of approximately $12 million in fiscal 2023. The Company will continue to make voluntary contributions as necessary to improve the funded status of the plans. See Note 18—Other Postretirement Benefits in the accompanying Consolidated Financial Statements.

Changes in net periodic benefit costs may occur in the future due to changes in the Company’s expected rate of return on plan assets and discount rate resulting from economic events. The following table highlights the sensitivity of the Company’s pension obligations and expense to changes in these assumptions, assuming all other assumptions remain constant:

Recent Accounting Pronouncements

See Note 2—Summary of Significant Accounting Policies in the accompanying Consolidated Financial Statements.