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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________________________________
FORM 10-Q
_________________________________________
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2021
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number 001-35769
_________________________________________
nws-20210930_g1.jpg
NEWS CORPORATION
(Exact name of registrant as specified in its charter)
_________________________________________
Delaware46-2950970
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
1211 Avenue of the Americas, New York, New York
10036
(Address of principal executive offices)(Zip Code)
(212) 416-3400
(Registrant’s telephone number, including area code)
_________________________________________
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading
Symbol(s)
Name of each exchange
on which registered
Class A Common Stock, par value $0.01 per shareNWSAThe Nasdaq Global Select Market
Class B Common Stock, par value $0.01 per shareNWSThe Nasdaq Global Select Market

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
Accelerated filer
Non-accelerated filer
Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule12b-2 of the Exchange Act). Yes No
As of October 29, 2021, 393,037,782 shares of Class A Common Stock and 199,630,240 shares of Class B Common Stock were outstanding.


NEWS CORPORATION
FORM 10-Q
TABLE OF CONTENTS
Page


PART I
ITEM 1. FINANCIAL STATEMENTS
NEWS CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited; millions, except per share amounts)
For the three months ended
September 30,
Notes20212020
Revenues:
Circulation and subscription$1,077 $1,002 
Advertising405 332 
Consumer524 441 
Real estate320 235 
Other176 107 
Total Revenues22,502 2,117 
Operating expenses(1,244)(1,164)
Selling, general and administrative(848)(685)
Depreciation and amortization(165)(164)
Impairment and restructuring charges4(22)(40)
Equity losses of affiliates5 (1)
Interest expense, net(22)(8)
Other, net13137 17 
Income before income tax expense338 72 
Income tax expense11(71)(25)
Net income267 47 
Less: Net income attributable to noncontrolling interests(71)(13)
Net income attributable to News Corporation stockholders$196 $34 
Net income attributable to News Corporation stockholders per share, basic and diluted9$0.33 $0.06 
The accompanying notes are an integral part of these unaudited consolidated financial statements.
2

NEWS CORPORATION
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited; millions)
For the three months ended
September 30,
20212020
Net income$267 $47 
Other comprehensive (loss) income:
Foreign currency translation adjustments(164)107 
Net change in the fair value of cash flow hedges(a)
1 (2)
Benefit plan adjustments, net(b)
5 8 
Other comprehensive (loss) income(158)113 
Comprehensive income109 160 
Less: Net income attributable to noncontrolling interests(71)(13)
Less: Other comprehensive loss (income) attributable to noncontrolling interests(c)
38 (17)
Comprehensive income attributable to News Corporation stockholders$76 $130 
(a)    Net of income tax expense of nil for both the three months ended September 30, 2021 and 2020.
(b)    Net of income tax expense of $2 million and $3 million for the three months ended September 30, 2021 and 2020, respectively.
(c)    Primarily consists of foreign currency translation adjustment.
The accompanying notes are an integral part of these unaudited consolidated financial statements.
3

NEWS CORPORATION
CONSOLIDATED BALANCE SHEETS
(Millions, except share and per share amounts)
NotesAs of
September 30, 2021
As of
June 30, 2021
(unaudited)(audited)
Assets:
Current assets:
Cash and cash equivalents$2,100 $2,236 
Receivables, net131,499 1,498 
Inventory, net308 253 
Other current assets465 469 
Total current assets4,372 4,456 
Non-current assets:
Investments5499 351 
Property, plant and equipment, net2,162 2,272 
Operating lease right-of-use assets1,008 1,035 
Intangible assets, net2,106 2,179 
Goodwill4,568 4,653 
Deferred income tax assets11345 378 
Other non-current assets131,358 1,447 
Total assets$16,418 $16,771 
Liabilities and Equity:
Current liabilities:
Accounts payable$309 $321 
Accrued expenses1,173 1,339 
Deferred revenue2467 473 
Current borrowings6300 28 
Other current liabilities131,023 1,073 
Total current liabilities3,272 3,234 
Non-current liabilities:
Borrowings61,964 2,285 
Retirement benefit obligations208 211 
Deferred income tax liabilities11249 260 
Operating lease liabilities1,079 1,116 
Other non-current liabilities498 519 
Commitments and contingencies10
Class A common stock(a)
4 4 
Class B common stock(b)
2 2 
Additional paid-in capital11,980 12,057 
Accumulated deficit(2,715)(2,911)
Accumulated other comprehensive loss(1,061)(941)
Total News Corporation stockholders’ equity8,210 8,211 
Noncontrolling interests938 935 
Total equity79,148 9,146 
Total liabilities and equity$16,418 $16,771 
(a)    Class A common stock, $0.01 par value per share (“Class A Common Stock”), 1,500,000,000 shares authorized, 393,025,796 and 391,212,047 shares issued and outstanding, net of 27,368,413 treasury shares at par at September 30, 2021 and June 30, 2021, respectively.
(b)    Class B common stock, $0.01 par value per share (“Class B Common Stock”), 750,000,000 shares authorized, 199,630,240 shares issued and outstanding, net of 78,430,424 treasury shares at par at September 30, 2021 and June 30, 2021, respectively.
The accompanying notes are an integral part of these unaudited consolidated financial statements.
4

NEWS CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited; millions)
For the three months ended
September 30,
Notes20212020
Operating activities:
Net income$267 $47 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization165 164 
Operating lease expense32 32 
Equity losses of affiliates5 1 
Cash distributions received from affiliates4 4 
Other, net13(137)(17)
Deferred income taxes and taxes payable1127 10 
Change in operating assets and liabilities, net of acquisitions:
Receivables and other assets9 (46)
Inventories, net(59)2 
Accounts payable and other liabilities(240)(42)
Net cash provided by operating activities68 155 
Investing activities:
Capital expenditures(101)(93)
Acquisitions, net of cash acquired (1)
Investments in equity affiliates and other(16)(7)
Proceeds from property, plant and equipment and other asset dispositions(2)2 
Other, net24 3 
Net cash used in investing activities(95)(96)
Financing activities:
Borrowings6378 123 
Repayment of borrowings6(383)(119)
Dividends paid(27)(20)
Other, net(53)(34)
Net cash used in financing activities(85)(50)
Net change in cash and cash equivalents(112)9 
Cash and cash equivalents, beginning of period2,236 1,517 
Exchange movement on opening cash balance(24)13 
Cash and cash equivalents, end of period$2,100 $1,539 
The accompanying notes are an integral part of these unaudited consolidated financial statements.
5


NEWS CORPORATION
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION
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.
Basis of Presentation
The accompanying unaudited consolidated financial statements of the Company, which are referred to herein as the “Consolidated Financial Statements,” have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. In the opinion of management, all adjustments consisting only of normal recurring adjustments necessary for a fair presentation have been reflected in these Consolidated Financial Statements. Operating results for the interim period presented are not necessarily indicative of the results that may be expected for the fiscal year ending June 30, 2022. The preparation of the Company’s Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts that are reported in the Consolidated Financial Statements and accompanying disclosures. Actual results could differ from those estimates.
Intercompany transactions and balances have been eliminated. Equity investments in which the Company exercises significant influence but does not exercise control and is not the primary beneficiary are accounted for using the equity method. Investments in which the Company is not able to exercise significant influence over the investee are measured at fair value, if the fair value is readily determinable. If an investment’s fair value is not readily determinable, the Company will measure the investment at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for an identical or similar investment of the same issuer.
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 accompanying Consolidated Financial Statements and notes thereto should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2021 as filed with the Securities and Exchange Commission (the “SEC”) on August 10, 2021 (the “2021 Form 10-K”).
The Company’s fiscal year ends on the Sunday closest to June 30. Fiscal 2022 and fiscal 2021 include 53 and 52 weeks, respectively. All references to the three months ended September 30, 2021 and 2020 relate to the three months ended September 26, 2021 and September 27, 2020, respectively. For convenience purposes, the Company continues to date its Consolidated Financial Statements as of September 30.
Recently Adopted Accounting Pronouncements
In December 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes” (“ASU 2019-12”). The amendments in ASU 2019-12 remove certain exceptions to the general principles in Topic 740 and simplify other areas of Topic 740 including the accounting for and recognition of intraperiod tax allocation, deferred tax liabilities for outside basis differences for certain foreign subsidiaries, year-to-date losses in interim periods, deferred tax assets for goodwill in business combinations and franchise taxes in income tax expense. The Company adopted ASU 2019-12 on a prospective basis as of July 1, 2021 and the adoption did not have a material effect on the Company’s Consolidated Financial Statements.

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NEWS CORPORATION
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2. REVENUES
The following tables present the Company’s disaggregated revenues by type and segment for the three months ended September 30, 2021 and 2020:

For the three months ended September 30, 2021
Digital Real
Estate
Services
Subscription
Video
Services
Dow JonesBook
Publishing
News MediaOtherTotal
Revenues
(in millions)
Revenues:
Circulation and subscription$3 $440 $349 $ $285 $ $1,077 
Advertising33 59 90  223  405 
Consumer   524   524 
Real estate320      320 
Other70 11 5 22 68  176 
Total Revenues$426 $510 $444 $546 $576 $ $2,502 
For the three months ended September 30, 2020
Digital Real
Estate
Services
Subscription
Video
Services
Dow JonesBook
Publishing
News MediaOtherTotal
Revenues
(in millions)
Revenues:
Circulation and subscription$8 $437 $311 $ $246 $ $1,002 
Advertising28 50 70  184  332 
Consumer   441   441 
Real estate235      235 
Other19 9 5 17 57  107 
Total Revenues$290 $496 $386 $458 $487 $ $2,117 
Contract liabilities and assets
The Company’s deferred revenue balance primarily relates to amounts received from customers for subscriptions paid in advance of the services being provided. The following table presents changes in the deferred revenue balance for the three months ended September 30, 2021 and 2020:
For the three months ended
September 30,
20212020
(in millions)
Balance, beginning of period$473 $398 
Deferral of revenue815 707 
Recognition of deferred revenue(a)
(814)(701)
Other(7)5 
Balance, end of period$467 $409 
(a)For the three months ended September 30, 2021 and 2020, the Company recognized $298 million and $257 million, respectively, of revenue which was included in the opening deferred revenue balance.
Contract assets were immaterial for disclosure as of September 30, 2021 and 2020.
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NEWS CORPORATION
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
Other revenue disclosures
The Company typically expenses sales commissions incurred to obtain a customer contract as those amounts are incurred as the amortization period is 12 months or less. These costs are recorded within Selling, general and administrative in the Statements of Operations. The Company also does not capitalize significant financing components when the transfer of the good or service is paid within 12 months or less, or the receipt of consideration is received within 12 months or less of the transfer of the good or service.
For the three months ended September 30, 2021, the Company recognized approximately $101 million in revenues related to performance obligations that were satisfied or partially satisfied in a prior reporting period. The remaining transaction price related to unsatisfied performance obligations as of September 30, 2021 was approximately $797 million, of which approximately $253 million is expected to be recognized over the remainder of fiscal 2022, approximately $256 million is expected to be recognized in fiscal 2023 and approximately $166 million is expected to be recognized in fiscal 2024, with the remainder to be recognized thereafter. These amounts do not include (i) contracts with an expected duration of one year or less, (ii) contracts for which variable consideration is determined based on the customer’s subsequent sale or usage and (iii) variable consideration allocated to performance obligations accounted for under the series guidance that meets the allocation objective under Accounting Standards Codification (“ASC”) 606, “Revenue From Contracts With Customers.”
NOTE 3. ACQUISITIONS
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.
The purchase price allocation has been prepared on a preliminary basis and changes to the preliminary purchase price allocations may occur as additional information concerning asset and liability valuations is finalized. As a result of the acquisition, the Company recorded net tangible liabilities of approximately $16 million primarily related to deferred revenue and approximately $123 million of identifiable intangible assets, consisting primarily of approximately $51 million related to the IBD tradename with an indefinite life, approximately $43 million of subscriber relationships with a useful life of seven years and approximately $20 million related to technology with a useful life of seven years. In accordance with ASC 350, “Intangibles—Goodwill and Other” (“ASC 350”), the excess of the total consideration over the fair values of the net tangible and intangible assets of approximately $166 million was recorded as goodwill on the transaction.
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.
The purchase price allocation has been prepared on a preliminary basis and changes to the preliminary purchase price allocations may occur as additional information concerning asset and liability valuations is finalized. As a result of the acquisition, the Company recorded net tangible assets of approximately $82 million, primarily consisting of accounts receivable, accounts payable, author advances and royalty payables and inventory. In addition, the Company recorded approximately $141 million of intangible assets, consisting primarily of $104 million of publishing rights for backlist titles with a useful life of nine years and $32 million of publishing licenses with a useful life of nine years. In accordance with ASC 350, the excess of the total consideration over the fair values of the net tangible and intangible assets of approximately $126 million was recorded as goodwill on the transaction.
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NEWS CORPORATION
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
Mortgage Choice
In June 2021, REA Group acquired Mortgage Choice Limited (“Mortgage Choice”) for approximately A$244 million in cash (approximately $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.
The purchase price allocation has been prepared on a preliminary basis and changes to the preliminary purchase price allocations may occur as additional information concerning asset and liability valuations is finalized. As a result of the acquisition, the Company recorded net tangible assets of A$66 million (US$50 million) consisting primarily of commission contract receivables and payables and approximately A$74 million (US$56 million) of identifiable intangible assets, consisting of A$46 million (US$35 million) related to franchisee relationships with a useful life of 17 years, A$17 million (US$13 million) of software with useful lives ranging from one to five years and A$11 million (US$8 million) primarily related to the Mortgage Choice tradenames with indefinite lives. In accordance with ASC 350, the excess of the total consideration over the fair values of the net tangible and intangible assets of approximately A$104 million (US$79 million) was recorded as goodwill on the transaction.
Agreement to acquire OPIS
In July 2021, the Company entered into an agreement to acquire the Oil Price Information Service business and related assets (“OPIS”) from S&P Global Inc. (“S&P”) and IHS Markit Ltd. (“IHS”) 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. OPIS will be a subsidiary of Dow Jones, and its results will be included in the Dow Jones segment. The acquisition is subject to customary closing conditions, including regulatory approvals and the consummation of the S&P and IHS merger, and is expected to close in the second half of fiscal 2022.
NOTE 4 . RESTRUCTURING PROGRAMS
During the three months ended September 30, 2021 and 2020, the Company recorded restructuring charges of $22 million and $40 million, respectively, of which $12 million and $31 million, respectively, related to the News Media segment. The restructuring charges recorded in fiscal 2022 primarily related to employee termination benefits. Restructuring charges in fiscal 2021 primarily related to exit costs associated with the closure of the Company’s operations at its Bronx print plant.
Changes in restructuring program liabilities were as follows:
For the three months ended September 30,
20212020
One time
employee
termination
benefits
Other costsTotalOne time
employee
termination
benefits
Other costsTotal
(in millions)
Balance, beginning of period$51 $35 $86 $64 $9 $73 
Additions18 4 22 19 21 40 
Payments(41)(2)(43)(48) (48)
Other   (1) (1)
Balance, end of period$28 $37 $65 $34 $30 $64 
As of September 30, 2021, restructuring liabilities of approximately $37 million were included in the Balance Sheet in Other current liabilities and $28 million were included in Other non-current liabilities.
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NEWS CORPORATION
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 5. INVESTMENTS
The Company’s investments were comprised of the following:
Ownership Percentage as of September 30, 2021As of
September 30, 2021
As of
June 30, 2021
(in millions)
Equity method investments(a)
various$211 $71 
Equity securities(b)
various288 280 
Total Investments$499 $351 
(a)During the three months ended September 30, 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.
(b)Equity securities are primarily comprised of Tremor, certain investments in China and the Company’s investment in HT&E Limited, which operates a portfolio of Australian radio and outdoor media assets.
The Company has equity securities with quoted prices in active markets as well as equity securities without readily determinable fair market values. Equity securities without readily determinable fair market values are valued at cost, less any impairment, plus or minus changes in fair value resulting from observable price changes in orderly transactions for an identical or similar investment of the same issuer. The components comprising total gains and losses on equity securities are set forth below:
For the three months ended
September 30,
20212020
(in millions)
Total gains recognized on equity securities$28 $9 
Less: Net gains recognized on equity securities sold  
Unrealized gains recognized on equity securities held at end of period$28 $9 
Equity Losses of Affiliates
The Company’s share of the losses of its equity affiliates was nil and $1 million for the three months ended September 30, 2021 and 2020, respectively.
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NEWS CORPORATION
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 6. BORROWINGS
The Company’s total borrowings consist of the following:
Interest rate at September 30, 2021Maturity at September 30, 2021As of
September 30, 2021
As of
June 30, 2021
(in millions)
News Corporation
2021 Senior notes3.875 %May 15, 2029$986 $985 
Foxtel Group(a)
2019 Credit facility(b)
2.32 %May 31, 2024218 232 
2019 Term loan facility6.25 %Nov 22, 2024181 190 
2017 Working capital facility(b)
2.32 %May 31, 2024  
Telstra Facility7.82 %Dec 22, 202768 60 
2012 US private placement — USD portion — tranche 2(c)
4.27 %Jul 25, 2022199 202 
2012 US private placement — USD portion — tranche 3(c)
4.42 %Jul 25, 2024150 152 
2012 US private placement — AUD portion7.04 %Jul 25, 202274 78 
REA Group(a)
2021 Bridge facility %Jul 31, 2022 314 
2022 Credit facility — tranche 1(d)
1.06 %Sep 16, 2024290  
2022 Credit facility — tranche 2(d)
1.21 %Sep 16, 20259  
Finance lease and other liabilities89 100 
Total borrowings2,264 2,313 
Less: current portion(e)
(300)(28)
Long-term borrowings
$1,964 $2,285 
(a)These borrowings were incurred by 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”), consolidated but non wholly-owned subsidiaries of News Corp, and are only guaranteed by the Foxtel Group and REA Group and their respective subsidiaries, as applicable, and are non-recourse to News Corp.
(b)As of September 30, 2021, the Foxtel Debt Group had undrawn commitments of A$339 million available under these facilities.
(c)The carrying values of the borrowings include any fair value adjustments related to the Company’s fair value hedges. See Note 8—Financial Instruments and Fair Value Measurements.
(d)As of September 30, 2021, REA Group had total undrawn commitments of A$187 million available under the 2022 Credit Facility (as defined below).
(e)The Company classifies the current portion of long term debt as non-current liabilities on the Balance Sheets when it has the intent and ability to refinance the obligation on a long-term basis, in accordance with ASC 470-50 “Debt.” $27 million and $28 million relates to the current portion of finance lease liabilities as of September 30, 2021 and June 30, 2021, respectively.
REA Group Refinancing
During the three months ended September 30, 2021, 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”). REA
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NEWS CORPORATION
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
Group may request increases in the amount of the 2022 Credit Facility up to a maximum amount of A$500 million, subject to the terms and limitations set forth in the syndicated facility agreement.
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.
The 2022 Credit Facility requires REA Group to maintain (i) a net leverage ratio of not more than 3.5 to 1.0 and (ii) an interest coverage ratio of not less than 3.0 to 1.0. The syndicated facility agreement also contains certain other customary affirmative and negative covenants. Subject to certain exceptions, these covenants restrict or prohibit REA Group and its subsidiaries from, among other things, incurring or guaranteeing debt, disposing of certain properties or assets, merging or consolidating with any other person, making financial accommodation available, entering into certain other financing arrangements, creating or permitting certain liens, engaging in non arms’ length transactions with affiliates, undergoing fundamental business changes and making restricted payments.
Covenants
The Company’s borrowings and those of its consolidated subsidiaries contain customary representations, covenants and events of default, including those discussed above and in the Company’s 2021 Form 10-K. If any of the events of default occur and are not cured within applicable grace periods or waived, any unpaid amounts under the applicable debt agreements may be declared immediately due and payable. The Company was in compliance with all such covenants at September 30, 2021.
NOTE 7 . EQUITY
The following tables summarize changes in equity for the three months ended September 30, 2021 and 2020:


For the three months ended September 30, 2021
Class A Common
Stock
Class B Common
Stock
Additional
Paid-in
Capital
Accumulated
Deficit
Accumulated
Other
Comprehensive
Loss
Total
News
Corp
Equity
Non-controlling
Interests
Total
Equity
SharesAmountSharesAmount
(in millions)
Balance, June 30, 2021391 $4 200 $2 $12,057 $(2,911)$(941)$8,211 $935 $9,146 
Net income— — — — — 196 — 196 71 267 
Other comprehensive loss— — — — — — (120)(120)(38)(158)
Dividends
— — — — (59)— — (59)(27)(86)
Other
2 — — — (18)— — (18)(3)(21)
Balance, September 30, 2021393 $4 200 $2 $11,980 $(2,715)$(1,061)$8,210 $938 $9,148 
For the three months ended September 30, 2020
Class A
Common Stock
Class B
Common Stock
Additional
Paid-in
Capital
Accumulated
Deficit
Accumulated
Other
Comprehensive
Loss
Total
News
Corp
Equity
Non-controlling
Interests
Total
Equity
SharesAmountSharesAmount
(in millions)
Balance, June 30, 2020389 $4 200 $2 $12,148 $(3,241)$(1,331)$7,582 $807 $8,389 
Net income— — — — — 34 — 34 13 47 
Other comprehensive income— — — — — — 96 96 17 113 
Dividends
— — — — (59)— — (59)(20)(79)
Other
2 — — — (14)  (14)(2)(16)
Balance, September 30, 2020391 $4 200 $2 $12,075 $(3,207)$(1,235)$7,639 $815 $8,454 
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NEWS CORPORATION
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
Stock Repurchases
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 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.
The Company did not purchase any of its Class A Common Stock or Class B Common Stock during the three months ended September 30, 2021 and 2020.
Stockholder Rights Agreement
On September 21, 2021, the Company amended the Fourth Amended and Restated Rights Agreement (as discussed in the Notes to the Consolidated Financial Statements included in the 2021 Form 10-K) (the “Rights Agreement”) to accelerate the expiration of the rights under the Rights Agreement to 11:59 P.M. (New York City time) on September 21, 2021, thereby terminating the Rights Agreement at such time. On the same date, the Company also entered into a stockholders agreement (the “Stockholders Agreement”) by and between the Company and the Murdoch Family Trust (the “MFT”). Pursuant to the Stockholders Agreement, the MFT and the Company have agreed not to take actions that would result in the MFT and Murdoch family members, including K. Rupert Murdoch, the Company’s Executive Chairman, and Lachlan K. Murdoch, the Company’s Co-Chairman, together owning more than 44% of the outstanding voting power of the shares of the Company’s Class B Common Stock (“Class B Shares”), or would increase the MFT’s voting power by more than 1.75% in any rolling twelve-month period. The MFT would forfeit votes in connection with an annual or special Company stockholders meeting to the extent necessary to ensure that the MFT and the Murdoch family collectively do not exceed 44% of the outstanding voting power of the Class B Shares at such meeting, except where a Murdoch family member votes their own shares differently from the MFT on any matter. The Stockholders Agreement will terminate upon the MFT’s distribution of all or substantially all of its Class B Shares.
Dividends
In August 2021, the Board of Directors declared a semi-annual cash dividend of $0.10 per share for Class A Common Stock and Class B Common Stock. This dividend was paid on October 13, 2021 to stockholders of record as of September 15, 2021. 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.
NOTE 8. FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS
In accordance with ASC 820, “Fair Value Measurements” (“ASC 820”) fair value measurements are required to be disclosed using a three-tiered fair value hierarchy which distinguishes market participant assumptions into the following categories: 
Level 1 — Quoted prices in active markets for identical assets or liabilities.
Level 2 — Observable inputs other than quoted prices included in Level 1. The Company could value assets and liabilities included in this level using dealer and broker quotations, certain pricing models, bid prices, quoted prices for similar assets and liabilities in active markets or other inputs that are observable or can be corroborated by observable market data.
Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. For the Company, this primarily includes the use of forecasted financial information and other valuation related assumptions such as discount rates and long term growth rates in the income approach as well as the market approach which utilizes certain market and transaction multiples.
Under ASC 820, certain assets and liabilities are required to be remeasured to fair value at the end of each reporting period.
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NEWS CORPORATION
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
The following table summarizes those assets and liabilities measured at fair value on a recurring basis:
As of September 30, 2021As of June 30, 2021
Level 1Level 2Level 3TotalLevel 1Level 2Level 3Total
(in millions)
Assets:
Cross-currency interest rate derivatives - fair value hedges$ $19 $ $19 $ $18 $ $18 
Cross-currency interest rate derivatives  77  77  73  73 
Equity securities(a)
198  90 288 164  116 280 
Total assets$198 $96 $90 $384 $164 $91 $116 $371 
Liabilities:
Interest rate derivatives - cash flow hedges$ $7 $ $7 $ $9 $ $9 
Cross-currency interest rate derivatives  11  11  13  13 
Total liabilities$ $18 $ $18 $ $22 $ $22 
(a)See Note 5—Investments.
During the three months ended September 30, 2021, the Company reclassified its investment in an equity security from Level 3 to Level 1 within the fair value hierarchy as the investment became publicly traded in the first quarter of fiscal 2022.
Equity securities
The fair values of equity securities with quoted prices in active markets are determined based on the closing price at the end of each reporting period. These securities are classified as Level 1 in the fair value hierarchy outlined above. The fair values of equity securities without readily determinable fair market values are determined based on cost, less any impairment, plus or minus changes in fair value resulting from observable price changes in orderly transactions for an identical or similar investment of the same issuer. These securities are classified as Level 3 in the fair value hierarchy outlined above.
A rollforward of the Company’s equity securities classified as Level 3 is as follows:
For the three months ended September 30,
20212020
(in millions)
Balance - beginning of period
$