10-Q

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)

x Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended December 31, 2005

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 001-32352

NEWS CORPORATION

(Exact Name of Registrant as Specified in its Charter)

Delaware	26-0075658
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)
1211 Avenue of the Americas, New York, New York	10036
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s telephone number, including area code (212) 852-7000

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

Indicate by check mark whether the registrant is a large accelerated filed, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

        Large accelerated filer  x         Accelerated filer  ¨ Non-accelerated filer  ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Securities Exchange Act of 1934).    Yes  ¨    No  x

As of February 6, 2006, 2,190,537,373 shares of Class A Common Stock, par value $0.01 per share, and 1,010,096,530 shares of Class B Common Stock, par value $0.01 per share, were outstanding.

NEWS CORPORATION

FORM 10-Q

TABLE OF CONTENTS

			Page
Part I.	Financial Information
	Item 1.	Financial Statements
		Unaudited Consolidated Statements of Operations for the three and six months ended December 31, 2005 and 2004	3
		Consolidated Balance Sheets at December 31, 2005 (unaudited) and June 30, 2005 (audited)	4
		Unaudited Consolidated Statements of Cash Flows for the six months ended December 31, 2005 and 2004	5
		Notes to the Unaudited Consolidated Financial Statements	6
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	45
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	65
	Item 4.	Controls and Procedures	66
Part II.	Other Information
	Item 1.	Legal Proceedings	66
	Item1A.	Risk Factors	66
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	66
	Item 3.	Defaults Upon Senior Securities	67
	Item 4.	Submission of Matters to a Vote of Security Holders	67
	Item 5.	Other Information	67
	Item 6.	Exhibits	67
	Signature		69

2

NEWS CORPORATION

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

(in millions, except per share amounts)

	For the three months ended December 31,						For the six months ended December 31,
	2005			2004			2005			2004
Revenues	$	6,665		$	6,562		$	12,347		$	11,708
Expenses:
Operating		4,471			4,485			8,110			7,865
Selling, general and administrative		978			938			1,937			1,797
Depreciation and amortization		197			149			372			277
Other operating charges		99			36			99			49
Operating income		920			954			1,829			1,720
Other (Expense) Income:
Interest expense, net		(141	)		(137	)		(269	)		(262	)
Equity earnings of affiliates		160			48			346			63
Other, net		62			(114	)		73			77
Income from continuing operations before income tax expense and minority interest in subsidiaries		1,001			751			1,979			1,598
Income tax expense		(292	)		(276	)		(674	)		(456	)
Minority interest in subsidiaries, net of tax		(15	)		(89	)		(31	)		(131	)
Income from continuing operations		694			386			1,274			1,011
Gain on disposition of discontinued operations, net of tax		381			—			381			—
Income before cumulative effect of accounting change		1,075			386			1,655			1,011
Cumulative effect of accounting change, net of tax		—			—			(1,013	)		—
Net income	$	1,075		$	386		$	642		$	1,011
Basic earnings per share:
Income from continuing operations
Class A	$	0.23		$	0.14		$	0.41		$	0.37
Class B	$	0.19		$	0.12		$	0.35		$	0.31
Net income
Class A	$	0.35		$	0.14		$	0.21		$	0.37
Class B	$	0.29		$	0.12		$	0.17		$	0.31
Diluted earnings per share:
Income from continuing operations
Class A	$	0.22		$	0.14		$	0.41		$	0.36
Class B	$	0.19		$	0.11		$	0.34		$	0.30
Net income
Class A	$	0.35		$	0.14		$	0.21		$	0.36
Class B	$	0.29		$	0.11		$	0.17		$	0.30

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

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NEWS CORPORATION

CONSOLIDATED BALANCE SHEETS

(in millions, except share and per share amounts)

	At December 31, 2005			At June 30, 2005
	(unaudited)			(audited)
Assets
Current Assets:
Cash and cash equivalents	$	5,243		$	6,470
Receivables, net		5,433			4,353
Inventories, net		1,917			1,516
Other		385			440
Total Current Assets		12,978			12,779
Non-Current Assets:
Receivables		708			673
Investments		10,414			10,268
Inventories, net		2,598			2,366
Property, plant and equipment, net		4,454			4,346
Intangible assets		11,189			12,517
Goodwill		12,167			10,944
Other non-current assets		933			799
Total Non-Current Assets		42,463			41,913
Total Assets	$	55,441		$	54,692
Liabilities and Stockholders’ Equity
Current Liabilities:
Borrowings	$	944		$	912
Accounts payable, accrued expenses and other current liabilities		3,956			3,564
Participations, residuals and royalties payable		1,277			1,051
Program rights payable		745			696
Deferred revenue		510			426
Total Current Liabilities		7,432			6,649
Non-current Liabilities:
Borrowings		11,260			10,087
Other liabilities		3,492			3,543
Deferred income taxes		4,434			4,817
Minority interest in subsidiaries		224			219
Commitments and contingencies
Stockholders’ Equity:
Class A Common Stock, $0.01 par value per share, 6,000,000,000 shares authorized, 2,191,342,381 shares and 2,237,072,659 shares issued and outstanding, net of 1,761,945,527 and 1,739,914,819 treasury shares at par at December 31, and June 30, 2005, respectively		22			22
Class B Common Stock, $0.01 par value, 3,000,000,000 shares authorized, 1,011,238,230 shares and 1,029,576,988 shares issued and outstanding, net of 313,721,702 treasury shares at par at December 31, and June 30, 2005		10			10
Additional paid-in capital		28,858			30,044
Accumulated deficit and accumulated other comprehensive loss		(291	)		(699	)
Total Stockholders’ Equity		28,599			29,377
Total Liabilities and Stockholders’ Equity	$	55,441		$	54,692

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

4

NEWS CORPORATION

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions)

	For the six months ended December 31,
	2005			2004
Operating activities:
Net income	$	642		$	1,011
Gain on disposition of discontinued operations, net of tax		(381	)		—
Cumulative effect of accounting change, net of tax		1,013			—
Income from continuing operations		1,274			1,011
Adjustments to reconcile income from continuing operations to cash provided by operating activities:
Depreciation and amortization		372			277
Amortization of cable distribution investments		53			58
Equity earnings of affiliates		(346	)		(63	)
Cash distributions received from investees		94			52
Other, net		(73	)		(77	)
Minority interest in subsidiaries, net of tax		31			131
Change in operating assets and liabilities, net of acquisitions:
Receivables and other assets		(1,280	)		(1,026	)
Inventories, net		(833	)		(276	)
Accounts payable and other liabilities		1,169			893
Net cash provided by operating activities		461			980
Investing activities:
Property, plant and equipment, net of acquisitions		(412	)		(425	)
Acquisitions, net of cash acquired		(1,576	)		(114	)
Investments in equity affiliates		(29	)		(61	)
Other investments		(40	)		(30	)
Proceeds from sale of investments and other non-current assets		115			544
Proceeds from disposition of discontinued operations		395			—
Net cash used in investing activities		(1,547	)		(86	)
Financing activities:
Borrowings		1,149			1,755
Repayment of borrowings		(7	)		(1,829	)
Cash on deposit		—			275
Issuance of shares		73			37
Repurchase of shares		(1,067	)		—
Dividends paid		(241	)		(121	)
Net cash (used in) provided by financing activities		(93	)		117
Net (decrease) increase in cash and cash equivalents		(1,179	)		1,011
Cash and cash equivalents, beginning of period		6,470			4,051
Exchange movement on opening cash balance		(48	)		133
Cash and cash equivalents, end of period	$	5,243		$	5,195

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

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NEWS CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Note 1—Basis of Presentation

On November 12, 2004, a new Delaware corporation named News Corporation (for periods after November 12, 2004, the “Company”) became, through a wholly-owned subsidiary named News Australia Holdings Pty Ltd (“News Australia Holdings”), the parent of News Holdings Limited (formerly known as The News Corporation Limited), an Australian corporation (“TNCL” or for periods prior to November 12, 2004, the “Company”). These transactions are collectively referred to as the “Reorganization.”

In the Reorganization, all outstanding TNCL ordinary shares and preferred limited voting ordinary shares were cancelled and shares of the Company’s Class A common stock (“Class A Common Stock”) and Class B common stock (“Class B Common Stock”), were issued in exchange on a one-for-two share basis. The financial statements have been presented as if the one-for-two share exchange took place on July 1, 2004.

News Corporation is a diversified entertainment and media company. The Company manages and reports its businesses in eight segments, which are: Filmed Entertainment, Television, Cable Network Programming, Direct Broadcast Satellite Television, Magazines and Inserts, Newspapers, Book Publishing and Other.

The accompanying unaudited consolidated financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. In the opinion of management, all adjustments consisting only of normal recurring adjustments necessary for a fair presentation have been reflected in these unaudited consolidated financial statements. Operating results for the interim periods presented are not necessarily indicative of the results that may be expected for the fiscal year ending June 30, 2006.

These interim unaudited consolidated financial statements and notes thereto should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2005 as filed with the Securities and Exchange Commission (“SEC”) on September 1, 2005.

The financial statements include the accounts of News Corporation and its subsidiaries. Intercompany transactions and balances have been eliminated. Equity investments in which the Company exercises significant influence but does not exercise control and are 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 accounted for under the cost method.

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

Certain fiscal 2005 amounts have been reclassified to conform to the fiscal 2006 presentation.

The Company maintains a 52-53 week fiscal year ending on the Sunday nearest to each reporting date. As such, all references to December 31, 2005 and December 31, 2004 relate to the three and six month periods ended January 1, 2006 and January 2, 2005, respectively. For convenience purposes, the Company continues to date its financial statements as of December 31^st.

6

NEWS CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

In accordance with Statement of Financial Accounting Standards (“SFAS”) No. 130, “Reporting Comprehensive Income,” total comprehensive income for the Company consists of the following:

	For the three months ended December 31,					For the six months ended December 31,
	2005			2004		2005			2004
	(in millions)
Net income, as reported	$	1,075		$	386	$	642		$	1,011
Other comprehensive income:
Foreign currency translation adjustments		(268	)		487		(185	)		543
Unrealized holding (losses) gains on securities, net of tax		(7	)		28		(49	)		20
Total comprehensive income	$	800		$	901	$	408		$	1,574

Recent Accounting Pronouncements

In October 2004, the American Jobs Creation Act (the “Act”) was signed into law. The Act includes a temporary incentive for U.S. multinationals to repatriate foreign earnings at an effective 5.25% tax rate. Such repatriations must occur in either an enterprise’s last tax year that began before the enactment date or the first tax year that begins during the one-year period beginning on the date of enactment. In December 2004, the Financial Accounting Standards Board (“FASB”) issued a FASB Staff Position (“FSP”), “Accounting and Disclosure Guidance for the Foreign Earnings Repatriation Provision within the American Jobs Creation Act of 2004” (“FSP 109-2”). FSP 109-2 allows companies additional time to evaluate the effect of the Act as to whether unrepatriated foreign earnings continue to qualify for the SFAS No. 109, “Accounting for Income Taxes,” exception regarding non-recognition of deferred tax liabilities and requires explanatory disclosures from those who need the additional time.

Under the Act, the maximum amount that the Company can repatriate under the favorable tax treatment is $500 million, which results in a tax benefit of approximately $150 million. Through December 31, 2005, the Company has provided deferred taxes on a portion of undistributed earnings of foreign subsidiaries, at the statutory federal rate, in anticipation of repatriating these earnings in the future. As of December 31, 2005, approximately $340 million of this income is planned to be repatriated at the favorable effective tax rate of 5.25%, and has resulted in a tax benefit of approximately $100 million which is included in the unaudited consolidated statements of operations for the three and six months ended December 31, 2005. The Company is still evaluating the repatriation of the remaining balance of approximately $160 million allowed under the Act. If the Company does repatriate the full amount, it will recognize an additional $50 million tax benefit due to the favorable tax rate. The amounts repatriated will be used to compensate non-executive U.S. employees for services performed within the United States.

In May 2005, the FASB issued SFAS No. 154, “Accounting Changes and Error Corrections—a replacement of APB Opinion No. 20 and FASB Statement No. 3.” This standard establishes, unless impracticable, retrospective application as the required method for reporting a change in accounting principle in the absence of explicit transition requirements specific to the newly adopted accounting principle. SFAS No. 154 will become effective for the Company for accounting changes and corrections of errors beginning in fiscal 2007.

In November 2005, the FASB issued FSP FAS 115-1, “The Meaning of Other-Than-Temporary Impairment and Its Application to Certain Investments,” (“FSP 115-1”) which addresses the determination as to when an investment is considered impaired, whether that impairment is other than temporary and the measurement of an impairment loss. FSP 115-1 also includes accounting considerations subsequent to the recognition of an other-than-temporary impairment and requires certain disclosures about unrealized losses that have not been

7

NEWS CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

recognized as other-than-temporary impairments. The guidance in FSP 115-1 amends FASB Statement No. 115, “Accounting for Certain Investments in Debt and Equity Securities,” and Accounting Principles Board (“APB”) Opinion No. 18, “The Equity Method of Accounting for Investments in Common Stock.” FSP 115-1 is effective for reporting periods beginning after December 15, 2005. The Company is currently evaluating what the effect that the adoption of the FSP 115-1 will have on its consolidated financial statements, but the Company does not believe the adoption of FSP 115-1 will have a material impact.

Note 2—Acquisitions and Disposals

Fiscal 2006 Acquisitions

In September 2005, the Company acquired the 25% stake in News Out of Home (“NOOH”) that it did not own from Capital International Global Emerging Markets Private Equity Fund, L.P. for approximately $175 million in cash. This acquisition increased the Company’s ownership of NOOH to 100%. The excess purchase price over the fair value of the net assets acquired of approximately $133 million has been preliminarily allocated to certain identifiable indefinite-lived intangible assets, which in accordance with SFAS No. 142 “Goodwill and Other Intangible Assets,” (“SFAS No. 142”) are not being amortized. The allocation of the excess purchase price is not final and is subject to changes upon completion of final valuations of certain assets and liabilities.

In order to increase the Company’s Internet presence, the Company purchased several Internet companies during September and October 2005 through its recently formed Fox Interactive Media (“FIM”) division. The amount of goodwill resulting from Internet acquisitions during the six months ended December 31, 2005 was approximately $1.2 billion and primarily related to the following fiscal 2006 transactions:

In September 2005, the Company acquired all of the outstanding common and preferred stock of Intermix Media, Inc. (“Intermix”) for approximately $580 million in cash. Under an existing stockholders’ agreement between Intermix, MySpace, Inc. (“MySpace”), an Internet entertainment company, and certain other stockholders of MySpace, Intermix exercised its option in July 2005 to acquire the outstanding 47% equity interest of MySpace that it did not already own for approximately $70 million in cash which closed in October 2005. This transaction increased Intermix’s ownership in MySpace to 100%. In a related intercompany restructuring, the Company issued approximately 19 million shares of Class A Common Stock, which are considered treasury shares, to one of its subsidiaries. The excess purchase price over the fair value of the net assets acquired from Intermix was approximately $640 million, of which $564 million has been preliminarily allocated to goodwill.

In September 2005, the Company acquired Scout Media, Inc., the parent company of Scout.com, the country’s leading independent online sports network, and Scout Publishing, producer of widely read local sports magazines in the United States, for approximately $60 million, of which $59 million has been preliminarily allocated to goodwill.

In October 2005, the Company acquired IGN Entertainment, Inc., a leading community-based Internet media and services company for video games and other forms of digital entertainment, for approximately $620 million in cash and approximately $30 million to be paid in cash pending the satisfaction of certain conditions. The excess purchase price over the fair value of the net assets acquired was approximately $613 million, of which $542 million has been preliminarily allocated to goodwill.

In accordance with SFAS No. 142 excess purchase price that has been preliminarily allocated to goodwill is not being amortized for all of the acquisitions noted above. The allocation of the excess purchase price is not final and is subject to changes upon completion of final valuations of certain assets and liabilities. A future reduction in goodwill for additional value to be assigned to identifiable finite-lived intangible assets or tangible assets could reduce future earnings as a result of additional amortization. For every $100 million reduction in

8

NEWS CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

goodwill for additional value to be assigned to identifiable finite-lived intangible assets or tangible assets, Depreciation and amortization expense would increase by approximately $10 million per year, representing amortization expense assuming an average useful life of ten years.

Fiscal 2006 Disposals

In October 2005, the Company sold its TSL Education Ltd. division (“TSL”), which included The Times Educational Supplement and other newspapers, magazines, websites and exhibitions aimed at teachers and education professionals in the United Kingdom, to Exponent Private Equity for cash consideration of approximately $395 million. In connection with this transaction, the Company recorded a gain of $381 million in Gain on disposition of discontinued operations in the unaudited consolidated statements of operations. The net income, assets, liabilities and cash flow attributable to the TSL operations are not material to the Company in any of the periods presented and accordingly have not been presented separately. The provision for income taxes of $0 reported in discontinued operations differs from the amount computed using the statutory income tax rate, due to the tax being offset by a release of a valuation allowance that was applied to an existing deferred tax asset established for capital losses, which because of the TSL transaction can now be utilized. Therefore there is no resulting tax liability.

Fiscal 2005 Transactions

Incorporation in the United States

In April 2004, the Company announced that it would pursue a reorganization that would change the Company’s place of incorporation from Australia to the United States. In August 2004, the Company announced that a Special Committee of non-executive Directors and the Board of Directors of the Company had unanimously recommended the proposed reorganization of the Company. On October 26, 2004, the reorganization was approved by the Company’s stockholders and option holders and on November 3, 2004, the Federal Court of Australia also approved the reorganization.

On November 12, 2004, the proposed reorganization was accomplished under Australian law whereby the holders of TNCL’s ordinary and preferred limited voting ordinary shares, including those ordinary shares and preferred limited voting ordinary shares represented by American Depositary Receipts (“ADRs”), had their shares cancelled and received in exchange shares of voting and non-voting common stock of News Corporation at a one-for-two ratio. Reorganization costs expensed during fiscal 2005 amounted to $49 million and were included in Other operating charge in the Other segment in the consolidated statements of operations. Of these costs, $13 million and $36 million were expensed in the first and second quarter of fiscal 2005, respectively.

In connection with this reorganization, the Company acquired from the A.E. Harris Trust (the “Harris Trust”) the approximate 58% interest in Queensland Press Pty Ltd. (“QPL”) not already owned by the Company through the acquisition of the Cruden Group of companies. The principal assets of the Cruden Group were shares of the Company and a 58% interest in QPL. QPL owns a publishing business which includes two metropolitan and eight regional newspapers in Queensland, Australia, as well as shares of the Company. The consideration for the acquisition of the net assets of the Cruden Group, excluding shares of the Company owned directly through the Cruden Group and indirectly (through QPL) by the Cruden Group, was the issuance of approximately 61 million shares of Class B Common Stock valued at approximately $1.0 billion and the assumption of approximately $400 million of debt. All of the debt assumed was retired in November 2004. The excess purchase price over the fair value of the net assets acquired of approximately $1.3 billion has been allocated to newspaper mastheads and goodwill, which in accordance with SFAS No. 142 are not being amortized. As a result of the purchase of this interest in QPL, the Company’s ownership interest in QPL increased from 42% to 100% and accordingly on November 12, 2004, the Company ceased to equity account for QPL. The results of QPL have been included in the Company’s consolidated statements of operations from November 12, 2004, the date of acquisition.

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NEWS CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

As a result of the Reorganization, News Corporation became the new parent company of TNCL. News Corporation has a primary listing on the New York Stock Exchange and secondary listings on the Australian Stock Exchange and the London Stock Exchange.

In exchange for approximately 78 million shares of Class A Common Stock and approximately 247 million shares of Class B Common Stock owned directly through the Cruden Group and indirectly (through QPL) by the Cruden Group, the Harris Trust received shares of News Corporation in the same exchange ratio as all other TNCL stockholders in the Reorganization. The shares of News Corporation non-voting stock that the Harris Trust received were reduced by the number of shares equal in value to the net debt and certain other net liabilities of the Cruden Group which were assumed by the Company in the transaction. The shares issued to the Harris Trust were approximately 61 million shares of Class A Common Stock and approximately 247 million shares of Class B Common Stock with an approximate aggregate value of $6 billion, and the Company assumed approximately $250 million of net debt and certain other net liabilities of the Cruden Group. All of the debt assumed was retired in November 2004.

The 61 million shares of Class A Common Stock issued to the Harris Trust were based on agreed estimates. The Company agreed to compensate the Harris Trust for any difference between the estimated amounts and the actual amounts (the “Adjustment Amount”) after the completion of the Company’s reincorporation to the United States, and it was subsequently agreed that the Company would issue to the Harris Trust additional shares of Class A Common Stock of approximately equivalent value to the Adjustment Amount. The Adjustment Amount owed to the Harris Trust was approximately an additional $32 million. Following approval by shareholders on October 21, 2005, a total of approximately two million additional shares of Class A Common Stock were issued to the Harris Trust on October 27, 2005, to provide for the difference between the estimated and actual amounts. The number of shares was determined based on the New York Stock Exchange closing price of the Class A Common Stock on October 25, 2005.

The Company shares acquired through the acquisition of the Cruden Group, as well as the shares which were indirectly owned by the Company through its 42% ownership interest in QPL prior to the acquisition, are considered treasury shares. The treasury shares are accounted for using the par value method. Shares of Class A Common Stock and shares of Class B Common Stock related to this transaction that were held in treasury at December 31, 2005 were approximately 109 million and 314 million, respectively. Immediately following the Reorganization, the Harris Trust owned approximately 29.5% of the voting shares of News Corporation.

Fox Entertainment Group Acquisition

In March 2005, Fox Acquisition Corp., a direct wholly-owned subsidiary of the Company, completed its offer to the holders of Class A common stock of Fox Entertainment Group, Inc. (“FEG”) to exchange 2.04 shares of the Company’s Class A Common Stock for each outstanding share of FEG’s Class A common stock validly tendered and not withdrawn in the exchange offer (the “Offer”). Shortly thereafter, the Company effected a merger of FEG with and into Fox Acquisition Corp. Each share of FEG Class A common stock not acquired in the Offer, other than the shares already owned by the Company, was converted in the merger into 2.04 shares of the Company’s Class A Common Stock. The Company issued approximately 357 million shares of News Corporation’s Class A Common Stock valued at approximately $6.3 billion in exchange for the outstanding shares of FEG Class A common stock, resulting in an excess purchase price of approximately $2.9 billion. After the consummation of the Offer and the subsequent merger, Fox Acquisition Corp. changed its name to “Fox Entertainment Group, Inc.” As a result of the Offer, the Company’s ownership interest increased from approximately 82% to 100%. This acquisition of the remaining non-controlling interests in FEG has been accounted for under the purchase method in accordance with SFAS No. 141, “Business Combinations” (“SFAS No. 141”).

10

NEWS CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

In connection with the Offer and subsequent merger, a wholly-owned subsidiary of the Company tendered the shares of Fox Class A common stock and Fox Class B common stock that it owned prior to the acquisition to Fox Acquisition Corp. in exchange for News Corporation Class A Common Stock at the same exchange ratio as was provided in the Offer for shares of Fox Class A common stock. As a result of the exchange, the wholly-owned subsidiary owns 1,631 million shares of News Corporation’s Class A Common Stock, with an approximate value of $8 billion, which are reflected as treasury shares. The treasury shares are accounted for using the par value method.

The Company has not yet finalized the evaluation and allocation of the purchase price as the appraisals associated with the valuation of tangible and intangible assets are not yet complete. The Company has preliminarily allocated the purchase price to certain finite-lived intangible assets which are being amortized, and certain indefinite-lived intangibles and goodwill, which are not being amortized in accordance with SFAS No. 142, until the final allocation is complete. These assets are included in the Filmed Entertainment, Television, Cable Network Programming and Other segments. A future reduction in goodwill for additional value to be assigned to identifiable finite-lived intangible assets or tangible assets could reduce future earnings as a result of additional amortization. For every $100 million reduction in goodwill for additional value to be assigned to identifiable finite-lived intangible assets or tangible assets, Depreciation and amortization expense would increase by approximately $10 million per year representing amortization expense assuming an average useful life of ten years.

Other Fiscal 2005 Transactions

In September 2004, the Company purchased Telecom Italia S.p.A.’s (“Telecom Italia”) 20% interest in SKY Italia for cash consideration of $108 million (€88 million), thereby increasing the Company’s ownership interest in SKY Italia to 100%.

Note 3—United Kingdom Redundancy Program

In fiscal 2005, the Company announced its intentions to invest in new printing plants in the United Kingdom to take advantage of technological and market changes. As the new automated technology comes on line, the Company expects lower production costs and improved newspaper quality, including expanded color.

In conjunction with this project during the three months ended December 31, 2005, the Company received formal approval for the construction of the main new plant which was the last contingency, thereby committing the Company to a redundancy program (the “Program”) for certain production employees at the Company’s United Kingdom newspaper operations. The Program is in response to the reduced workforce that will be required as new printing presses and the new printing facilities eventually come on line. As a result of this Program, the Company expects to reduce its production workforce by approximately 65%, and as of December 31, 2005, approximately 700 employees in the United Kingdom have already voluntarily accepted severance agreements and are expected to leave the Company primarily in fiscal 2007 and 2008.

In accordance with SFAS No. 88, “Employers’ Accounting for Settlements & Curtailments of Defined Benefit Pension Plans and for Termination Benefits,” the Company recorded a redundancy provision of approximately $99 million during the second quarter of fiscal 2006 in Other operating charges and Non-current other liabilities in the unaudited consolidated financial statements. Through fiscal 2008, the Company will record an additional provision of approximately $35 million to record accretion on the redundancy provision and to recognize any retention bonuses earned. A majority of the Program’s costs are expected to be paid in cash to employees in fiscal 2008.

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NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Note 4—Inventories, net

The Company’s inventory was comprised of the following:

	At December 31, 2005			At June 30, 2005
	(in millions)
Current inventories:
Raw materials	$	147		$	132
Work and projects in progress		42			55
Finished goods		136			123
Programming rights		1,624			1,235
		1,949			1,545
Less: inventory reserve		(32	)		(29	)
Total current inventories, net		1,917			1,516
Non-current inventories:
Filmed entertainment costs:
Films:
Released (including acquired film libraries)		655			733
Completed, not released		79			234
In production		491			218
In development or preproduction		105			90
		1,330			1,275
Television productions:
Released (including acquired libraries)		505			470
Completed, not released		—			14
In production		249			149
In development or preproduction		—			2
		754			635
Total filmed entertainment costs, less accumulated amortization		2,084			1,910
Programming rights		514			456
Total non-current inventories		2,598			2,366
Total inventories, net	$	4,515		$	3,882

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NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Note 5—Investments

The Company’s investments were comprised of the following:

		Ownership Percentage	At December 31, 2005		At June 30, 2005
			(in millions)
Equity investments:
The DIRECTV Group, Inc. (1)	DBS operator principally in the U.S.	34%	$	6,732	$	6,688
Gemstar-TV Guide International, Inc. (1)	U.S. print and electronic guidance company	41%		637		608
British Sky Broadcasting Group plc (1)	U.K. DBS operator	38% (3)		884		787
China Network Systems	Taiwan cable TV operator	various		232		225
Sky Network Television Ltd.	New Zealand media company	44%		268		254
National Geographic Channel (US) (2)	U.S. cable channel	67%		318		320
National Geographic International	International cable channel	50%		137		133
Other equity method investments		various		662		627
Cost method investments		various		544		626
			$	10,414	$	10,268

⁽¹⁾ The market values of the Company’s investments in The DIRECTV Group, Inc. (“DIRECTV”), Gemstar-TV Guide International Inc. (“Gemstar-TV Guide”) and British Sky Broadcasting Group plc (“BSkyB”) were $6,642 million, $457 million and $5,854 million, respectively, at December 31, 2005.

⁽²⁾ The Company does not consolidate this entity as it does not hold a majority on the Board of Directors, is unable to dictate operating decision-making and the National Geographic Channel is not a variable interest entity.

⁽³⁾ The Company’s ownership in BSkyB increased from approximately 37% at June 30, 2005.

During the six months ended December 31, 2005, Gemstar-TV Guide and DIRECTV experienced declines in their market values. As a result of these declines, the Company’s carrying values in Gemstar-TV Guide and DIRECTV exceed their market value by approximately $180 million and $90 million, respectively.

In determining if the decline in Gemstar-TV Guide’s and DIRECTV’s market value was other than temporary, the Company considered a number of factors: (1) the financial condition, operating performance and near term prospects of the investee; (2) the reason for the decline in fair value, be it general market conditions, industry specific or investee specific; (3) analysts’ ratings and estimates of 12 month share price targets for the investee; (4) the length of the time and the extent to which the investee’s market value has been less than the carrying value of the Company’s investment; and (5) the Company’s intent and ability to hold the investment for a period of time sufficient to allow for a recovery in fair value. Upon review, the Company has determined that at this time the impairment in the value of its investments in Gemstar-TV Guide and DIRECTV are temporary.

The Company will continue to monitor these investments for future impairments.

Fiscal Year 2006 Acquisitions and Disposals

In July 2005, the Company sold its entire cost investment in China Netcom Group Corporation (“China Netcom”). The Company’s 77 million shares of China Netcom were sold for total consideration of approximately $112 million. The Company recognized a gain of approximately $52 million on this sale in the first quarter of fiscal 2006 included in Other, net in the unaudited consolidated statement of operations for the six months ended December 31, 2005.

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NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Fiscal Year 2005 Acquisitions and Disposals

In October 2004, the Company and its 34% investee, DIRECTV, announced a series of transactions with Grupo Televisa, Globopar and Liberty Media International, Inc. that will result in the reorganization of the companies’ direct-to-home (“DTH”) satellite television platforms in Latin America. The transactions will result in DIRECTV Latin America and Sky Latin America consolidating their two DTH platforms into a single platform in each of the major territories served in the region. As part of these transactions, DIRECTV will acquire News Corporation’s interests in Sky Brasil, Innova and Sky Multi-Country Partners. As the Sky Multi-Country Partners transaction has closed, the Company recorded a pre-tax loss during the three months ended December 31, 2004 of $55 million which was included in Other, net in the unaudited consolidated statements of operations. Upon the completion of the reorganization of the other platforms, which is subject to the necessary governmental approvals, the Company expects to record a gain. As a result of these transactions, the Company’s transponder lease guarantee increased by $175 million. Upon the closing of the Latin American DTH reorganization transactions, the Company will be released from the transponder lease guarantees.

In December 2004, the Company sold its 20% investment in Rogers Sportsnet to Rogers Broadcasting Limited for $41 million. Rogers Sportsnet operates regional sports networks in Canada covering local sports events plus national programming. For the six months ended December 31, 2004, the Company recognized a gain of $39 million on this sale in Other, net in the unaudited consolidated statements of operations.

Summarized financial information for significant equity affiliates, determined in accordance with Regulation S-X, accounted for under the equity method is as follows:

	For the three months ended December 31,					For the six months ended December 31,
	2005		2004			2005		2004
	(in millions)					(in millions)
Revenues	$	5,542	$	3,362		$	10,601	$	6,224
Operating (loss) income		566		(437	)		1,106		(1,987	)
Income (loss) from continuing operations before discontinued operations and cumulative effect of accounting changes		356		(283	)		700		(1,209	)
Net income (loss)		356		(283	)		700		(1,292	)

Note 6—Intangible Assets

Effective July 1, 2005, the Company adopted Emerging Issues Task Force Topic No. D-108 “Use of the Residual Method to Value Acquired Assets Other Than Goodwill” (“D-108”). D-108 requires companies who have applied the residual value method in the valuation of acquired identifiable intangibles for purchase accounting and impairment testing to now use a direct value method. As a result of the adoption, the Company recorded a non-cash charge of $1.6 billion ($1.0 billion net of tax, or ($0.32) per diluted share of Class A Common Stock and ($0.27) per diluted share of Class B Common Stock), to reduce the intangible balances attributable to its television stations’ Federal Communications Commission (“FCC”) licenses. As required, this charge has been reflected as a cumulative effect of accounting change, net of tax in the unaudited consolidated statement of operations.

At June 30, 2005, the Company’s FCC licenses were valued at approximately $8.5 billion. The Company’s FCC licenses are recorded as intangible assets with indefinite lives and are not subject to amortization. As of December 31, 2005, the Company’s FCC licenses were valued at approximately $6.9 billion, reflecting a $1.6 billion reduction of the intangible balances attributable to its television stations’ FCC licenses due to the adoption of D-108 which requires the application of a direct value method to determine the fair value of assets other than goodwill.

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NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Note 7—Borrowings

LYONs

In February 2001, the Company issued Liquid Yield Option Notes (“LYONs™”) which pay no interest and have an aggregate principal amount at maturity of $1,515 million representing a yield of 3.5% per annum on the issue price. The holders may exchange the notes at any time into Class A Common Stock or, at the option of the Company, the cash equivalent thereof at a fixed exchange rate of 24.2966 shares of Class A Common Stock per $1,000 note. The notes are redeemable at the option of the holders on February 28, 2006, February 28, 2011 and February 28, 2016 at a price of $594.25, $706.82 and $840.73, respectively. The Company, at its election, may satisfy the redemption amounts in cash, Class A Common Stock or any combination thereof. The Company has given notice to holders that any notes tendered on February 28, 2006 will be redeemed for cash at the specified redemption amounts. The notes, which have been recorded at a discount, are being accreted using the effective interest rate method and had a carrying value of $896 million at December 31, 2005 and are included in Borrowings within current liabilities.

Notes due 2035

In December 2005, the Company issued $1,150 million of 6.40% Senior Notes due 2035. The Company received proceeds of approximately $1,133 million on the issuance of this debt, net of expenses. These notes are issued under the Amended and Restated Indenture, dated as of March 24, 1993, as supplemented, among News America Incorporated, the Company and the subsidiary guarantors named therein and The Bank of New York, as Trustee.

Note 8—Stockholders’ Equity

In August 2005, the Company announced that its Board of Directors (the “Board”) determined to extend the expiration date of the Company’s stockholder rights plan for an additional two-year period.

Dividends

The Company declared a dividend of $0.07 per share for Class A Common Stock and $0.08 per share for Class B Common Stock in the three months ended September 30, 2005 which was paid in October 2005 to stockholders of record on September 14, 2005. The total dividend paid in October 2005 to stockholders was approximately $240 million.

Repurchase Program

In June 2005, the Company announced a stock repurchase program under which the Company is authorized to acquire from time to time up to an aggregate of $3 billion in Class A Common Stock and Class B Common Stock. Below is a summary of the Company’s purchases of its Class A Common Stock and Class B Common Stock from the announcement of the stock repurchase program through December 31, 2005:

	Total Number of Shares Purchased	Average Price per Share		Total Cost of Purchase			Remaining Authorized
	(in millions, except for share and per share amounts)
Class A Common Stock	65,776,849	$	15.72	$	1,034
Class B Common Stock	33,537,928		16.94		568
Total	99,314,777			$	1,602	(1)	$	1,400	(2)

⁽¹⁾ Of this amount, $1,067 million was repurchased in the six months ended December 31, 2005.

⁽²⁾ The remaining authorized amount at December 31, 2005 is excluding commission.

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NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Note 9—Stock Option Plans

In December 2004, the FASB issued SFAS No. 123 (Revised 2004), Share-Based Payment (“SFAS 123R”). SFAS 123R is a revision of SFAS No. 123, as amended, Accounting for Stock-Based Compensation (“SFAS 123”), and supersedes APB No. 25, Accounting for Stock Issued to Employees (“APB 25”). SFAS 123R eliminates the alternative to use the intrinsic value method of accounting that was provided in SFAS 123, which generally resulted in no compensation expense recorded in the financial statements related to the issuance of stock options. SFAS 123R requires that the cost resulting from all share-based payment transactions be recognized in the financial statements. SFAS 123R establishes fair value as the measurement objective in accounting for share-based payment arrangements and requires all companies to apply a fair-value-based measurement method in accounting for generally all share-based payment transactions with employees.

In July 2005, the Company adopted SFAS 123R using a modified prospective application, as permitted under SFAS 123R. Accordingly, prior period amounts have not been restated. Under this application, the Company is required to record compensation expense for all awards granted after the date of adoption and for the unvested portion of previously granted awards that remain outstanding at the date of adoption.

News Corporation 2005 Long-Term Incentive Plan

The Company has adopted the News Corporation 2005 Long-Term Incentive Plan (the “2005 Plan”) under which stock based compensation, including stock options, restricted stock, restricted stock units (“RSUs”) and other types of awards, may be granted. Such equity grants under the 2005 Plan will generally vest over a four-year period and expire ten years from the date of grant. The Company’s employees and directors are entitled to participate in the 2005 Plan. The Compensation Committee of the Board of Directors of the Company (the “Compensation Committee”) will determine the recipients, type of award to be granted and amounts of awards to be granted under the 2005 Plan. Stock options awarded under the 2005 Plan will be granted at exercise prices which are equal to or exceed the market price at the date of grant. The 2005 Plan replaced the Company’s existing News Corporation 2004 Stock Option Plan under which no additional stock options will be granted. The maximum number of shares of Class A Common Stock that may be issued under the 2005 Plan is 165 million shares. The remaining shares available for issuance under the 2005 Plan at December 31, 2005 were approximately 150 million. The Company will issue new shares of Class A Common Stock for award exercises.

The fair value of stock based compensation under the 2005 Plan will be calculated according to the type of award issued.

Stock options and Stock Appreciation Rights (“SARs”) issued under the 2005 Plan or under the NDS Group plc executive share option schemes will be fair valued using a Black-Scholes option valuation method that uses the following assumptions: expected volatility is based on the historical volatility of the Class A Common Stock; expected term of awards granted is derived from the historical activity of the Company’s awards and represents the period of time that the awards granted are expected to be outstanding; weighted average risk-free interest rate is an average of the interest rates of U.S. government bonds with similar lives on the dates of the option grants; and dividend yield was calculated as an average of a ten year history of the Company’s yearly dividend divided by the fiscal year’s average closing stock price.

RSU awards are grants that entitle the holder to shares of Class A Common Stock as the award vests, subject to the 2005 Plan and such other terms and conditions as the Compensation Committee may establish. RSUs issued under the 2005 Plan are fair valued based upon the fair market value of Class A Common Stock on the grant date. Any person who holds RSUs shall have no ownership interest in the shares of Class A Common Stock to which such RSUs relate until and unless shares of Class A Common Stock are delivered to the holder. All shares of Class A Common Stock reserved for cancelled or forfeited stock-based compensation awards or for awards that are settled in cash become available for future grants. Certain RSU awards are settled in cash and are subject to terms and conditions of the 2005 Plan and such other terms and conditions as the Compensation Committee may establish.

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NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

During the six months ended December 31, 2005, the Company issued 15.3 million RSUs which primarily vest over four years. The RSUs will be payable in shares of the Company’s Class A Common Stock, par value $0.01 per share, upon vesting, except for approximately 3.0 million RSUs that will be settled in cash.

The following table summarizes the activity related to the Company’s RSUs to be settled in stock:

	Restricted Stock Units		Weighted Average Grant-Date Fair Value
(Shares in thousands)
Unvested restricted stock units at July 1, 2005	—		$	—
Granted	12,322			15.26
Cancelled	(42	)		15.24
Unvested restricted stock units at December 31, 2005	12,280		$	15.26

News Corporation 2004 Stock Option Plan and 2004 Replacement Stock Option Plan

As a result of the Reincorporation, all preferred limited voting ordinary shares which the Company issued stock options over were cancelled and holders received in exchange stock options for shares of Class A Common Stock of the Company on a one-for-two basis with no change in the original terms under the News Corporation 2004 Stock Option Plan and 2004 Replacement Stock Option Plan (collectively, the “2004 Plan”). In addition, all other outstanding stock options to purchase preferred limited voting ordinary shares were adjusted to be exercisable into shares of Class A Common Stock subject to the one-for-two share exchange. Prior to the Reincorporation, stock options were granted to employees with Australian dollar exercise prices.

Under the 2004 Plan, equity grants generally vest over a four-year period and expire ten years from the date of grant. The equity awards granted prior to June 30, 2005 have exercise prices, which are equal to or exceed the market price at the date of grant valued, in Australian dollars. No future grants will be issued under the 2004 Plan and the 2004 Plan automatically terminates in 2014.

The fair value of each outstanding stock option award under the 2004 Plan was estimated on the date of grant using the Black-Scholes option valuation model that uses the following assumptions; expected volatility was based on historical volatility of the Company’s Class A Common Stock; expected term of stock options granted was derived from the historical activity of the Company’s stock options and represented the period of time that stock options granted were expected to be outstanding; weighted average risk-free interest rate was an average of the interest rates of Australian government bonds with similar lives on the dates of the stock option grants; and dividend yield was calculated as an average of a ten year history of the Company’s yearly dividend divided by the fiscal year’s average closing stock price.

Other

The Company operates an employee share ownership scheme in the United Kingdom. This plan enables employees to enter into a fixed-term savings contract with independent financial institutions linked to an option for Class A Common Stock. The savings contracts can range from three to seven years with an average expected life of four years.

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NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The following table summarizes information about the Company’s stock option transactions:

	Shares (in thousands)		Weighted average exercise price (in US$)		Weighted average exercise price (in A$)		Weighted average remaining contractual term (in years)	Aggregate intrinsic value (in US$ millions)
Outstanding at July 1, 2005	131,367		$	13.97	$	23.35
Granted	—			—		—
Exercised	(5,307	)		10.17		16.04
Cancelled	(4,120	)		14.18		24.68
Outstanding at December 31, 2005	121,940		$	14.13	$	23.83	5.2	$	172.9
Vested and unvested expected to vest at December 31, 2005	121,940		$	14.13	$	23.83	5.2	$	172.9
Vested and exercisable at December 31, 2005	113,655		$	14.44	$	24.36	5.6	$	126.3

The weighted average exercise prices for the stock options presented above are in Australian dollars. The U.S. dollar equivalents above have been converted at historical exchange rates; therefore, the proceeds from the exercise of these stock options may differ due to fluctuations in exchange rates in periods subsequent to the date of the grants. No stock options were granted in the six months ended December 31, 2005 and 2004. As of December 31, 2005, no stock options were issued under the 2005 Plan.

NDS Option Schemes

NDS Group plc (“NDS”), an indirect majority-owned subsidiary of the Company which is a publicly traded company, has three executive share option schemes (the “NDS Plans”). The NDS Plans provide for the grant of share options to purchase Series A ordinary shares in NDS with a maximum term of ten years. Share options granted under the NDS Plans vest over a four-year period. The NDS Plans authorize share options to be granted subject to a maximum of 10% of the ordinary shares of NDS on issue at the date of grant. All NDS employees are entitled to participate in the NDS Plans, however (with the exception of the employee share ownership schemes which are open to all), management determines to whom and how many share options are granted.

A summary of the NDS options:

	Shares (in thousands)		Weighted average exercise price (in US$)		Weighted average remaining contractual term (in years)	Aggregate intrinsic value (in US$ millions)
Outstanding at July 1, 2005	4,338		$	18.17
Granted	—			—
Exercised	(801	)		11.99
Cancelled	(20	)		15.79
Outstanding at December 31, 2005	3,517		$	19.59	6.1	$	76
Vested and unvested expected to vest at December 31, 2005	3,501		$	19.59	6.1	$	76
Exercisable at December 31, 2005	2,918		$	19.88	5.7	$	62

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NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The aggregate intrinsic value of options exercised for all of the Company’s plans presented during the first six months of fiscal 2006 and 2005 was $41 million and $24 million, respectively.

As a result of the adoption of SFAS 123R, for the three and six months ended December 31, 2005, the expense related to stock-based compensation was $30 million and $51 million, respectively. During the six months ended December 31, 2005, the Company received $73 million in cash from stock option exercises and recognized a tax benefit of $12 million on stock options exercised for all plans presented.

At December 31, 2005, the Company’s total compensation cost related to non-vested stock options and RSUs not yet recognized for all plans presented is approximately $243 million, a portion of which is expected to be recognized within the current fiscal year, with the remainder to be recognized over the next three fiscal years. Compensation expense on all stock-based awards is recognized on a straight line basis over the vesting period of the entire award.

Compensation Expense

On May 3, 2005, the Compensation Committee approved the acceleration of vesting of unvested out-of-the-money stock options granted under the Company’s 2004 Stock Option Plan. The affected stock options are those with exercise prices greater than A$19.74 per share, which was the closing price of the Company’s Class A Common Stock (as traded on the Australian Stock Exchange in the form of CHESS Depositary Interests) on May 2, 2005. Prior to the Reorganization, stock options were granted to employees with Australian dollar exercise prices. As a result of this action, the vesting of approximately 19,862,000 previously unvested stock options were accelerated and were immediately exercisable. None of the unvested stock options held by directors, some of whom have stock options with exercise prices in excess of A$19.74, were accelerated.

The Compensation Committee’s decision to accelerate the vesting of these stock options was in anticipation of the related compensation expense that would be recorded subsequent to the Company’s adoption of SFAS 123R. In addition, the Compensation Committee considered that because these stock options had exercise prices in excess of the prevailing market value on May 2, 2005 they were not fully achieving their original objectives of incentive compensation and employee retention, and it believed that the acceleration would have a positive effect on employee morale. Incremental expense of approximately $100 million ($65 million, net of tax) associated with the acceleration was recorded in the fourth quarter fiscal 2005 pro forma disclosure.

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NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The following table reflects the effect on net income and earnings per share as if the Company had applied the fair value recognition provisions for stock-based employee compensation prior to the adoption of SFAS 123R on July 1, 2004. These pro forma effects may not be representative of future amounts since the estimated fair value of stock options on the date of grant is amortized to expense over the vesting period, additional stock options may be granted in future years and the vesting of certain options was accelerated on May 3, 2005 (see above).

	For the three months ended December 31, 2004			For the six months ended December 31, 2004
Net income, as reported	$	386		$	1,011
Deduct: Total stock-based employee compensation expense determined under fair value based method for all awards, net of related tax effects		(15	)		(33	)
Pro forma net income	$	371		$	978
Basic earnings per share:
As reported:
Class A	$	0.14		$	0.37
Class B	$	0.12		$	0.31
Pro forma:
Class A	$	0.13		$	0.35
Class B	$	0.11		$	0.30
Diluted earnings per share:
As reported:
Class A	$	0.14		$	0.36
Class B	$	0.11		$	0.30
Pro forma:
Class A	$	0.13		$	0.35
Class B	$	0.11		$	0.29

Note 10—Commitments and Guarantees

Commitments

As a result of the FIM acquisitions that occurred in September and October 2005, the Company has commitments under certain contractual arrangements to make future payments of up to a maximum of $135 million as of December 31, 2005. These commitments are comprised of operating leases, capital expenditures and contractual employee obligations.

In December 2005, the Company signed a new broadcast rights agreement with the National Association of Stock Car Auto Racing (“NASCAR”) for certain races and exclusive rights for certain ancillary content for an eight year term, commencing in calendar year 2007 in the amount of $1.7 billion.

Other than noted above, the Company’s commitments have not changed significantly from disclosures included in the Company’s Annual Report Form 10-K for the fiscal year ended June 30, 2005 filed with the SEC on September 1, 2005.

Guarantees

The Company’s guarantees have not changed significantly from disclosures included in the Company’s Annual Report Form 10-K for the fiscal year ended June 30, 2005 filed with the SEC on September 1, 2005.

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NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Note 11—Contingencies

Stockholder Litigation

On October 6, 2005, 13 professionally managed investment funds that own the Company’s stock filed a complaint in the Court of Chancery of the State of Delaware against the Company and its individual directors. The complaint, captioned Unisuper et al. v. News Corp., C.A. No. 1699-N, raised claims of breach of contract, promissory estoppel, fraud, negligent misrepresentation and breach of fiduciary duty relating to the Board’s policy concerning the Company’s stockholder rights plan, and the August 2005 decision of the Board to extend the expiration of the existing stockholder rights plan until November 8, 2007. The plaintiffs are seeking, among other things: (1) a declaration that the amendment extending the stockholder rights plan until November 8, 2007 is null and void, and (2) an order permanently enjoining the defendants from extending the stockholder rights plan without first obtaining approval from the Company’s stockholders.

Also on October 6, 2005, the plaintiffs moved for expedited proceedings, requesting that the Court of Chancery set an expedited trial date. The Court of Chancery denied this request. On October 22, 2005, the Company filed a motion to dismiss the complaint. The Court of Chancery heard oral argument on that motion on November 10, 2005, and issued its decision on December 20, 2005. Specifically, the Court of Chancery granted the Company’s motion to dismiss as to plaintiffs’ claims for fraud, negligent misrepresentation, and breach of fiduciary duty, and denied the motion to dismiss with respect to the plaintiffs’ claims for breach of contract and promissory estoppel.

Thereafter, on December 29, 2005, the Company filed a motion requesting leave to take an interlocutory appeal to the Delaware Supreme Court from the Court of Chancery’s decision to deny the Company’s motion to dismiss the claims for breach of contract and promissory estoppel. The Company also moved for a stay of all proceedings pending such an appeal. On January 19, 2006, the Court of Chancery granted the Company’s motions. On January 27, 2006, the Delaware Supreme Court declined to accept the Company’s interlocutory appeal. Thus, proceedings will continue in the Court of Chancery on the two claims that were not dismissed from the litigation.

The duration and outcome of this litigation cannot be determined at this time. However, the Company believes that the remaining two claims in the lawsuit are without merit, and the Company will continue to vigorously defend against them.

DIRECTV

TNCL was named as a defendant in a Revised Amended Consolidated Complaint filed on May 7, 2004 in a lawsuit captioned In re General Motors (Hughes) Stockholders Litigation, filed in the Court of Chancery of the State of Delaware, Consolidated Civil Action No. 20269-NC. The lawsuit relates to TNCL’s acquisition of stock in Hughes on December 22, 2003 which was subsequently transferred to FEG. The complaint alleges that TNCL aided and abetted an alleged breach of fiduciary duty by the Board of Directors of General Motors (“GM”) allegedly owed to a class of certain GM stockholders. The plaintiffs allegedly seek “appropriate equitable relief… including rescissory remedies to the extent feasible…” The Company believes that the lawsuit is without merit and intends to vigorously defend against claims brought against TNCL in the lawsuit. The Company also believes it is entitled to indemnification by GM under the agreements related to the transaction. On August 30, 2004, TNCL filed a brief in support of its motion to dismiss the complaint. On October 18, 2004, the plaintiffs filed their opposition to the motion. The Company filed its reply on November 17, 2004. The oral argument was heard on March 7, 2005. On May 4, 2005, the court issued its decision granting the motion to dismiss. Plaintiffs have appealed the decision and the Company has cross-appealed on jurisdictional and improper service issues. Oral argument on the appeal took place on December 21, 2005. The court has not yet issued its decision.

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NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

NDS

Echostar Litigation

On June 6, 2003, Echostar Communications Corporation, Echostar Satellite Corporation, Echostar Technologies Corporation and Nagrastar L.L.C. (collectively, “Echostar”) filed an action against NDS in the United States District Court for the Central District of California. Echostar filed an amended complaint on October 8, 2003, which purported to allege claims for violation of the Digital Millennium Copyright Act (“DMCA”), the Communications Act of 1934 (“CA”), the Electronic Communications Privacy Act, the Computer Fraud and Abuse Act, California’s Unfair Competition statute and the federal RICO statute. The complaint also purported to allege claims for civil conspiracy, misappropriation of trade secrets and interference with prospective business advantage. The complaint sought injunctive relief, unspecified compensatory and exemplary damages and restitution. On December 22, 2003, all of the claims were dismissed by the court, except for the DMCA, CA and unfair competition claims, and the court limited these claims to acts allegedly occurring within three years of the filing of Echostar’s original complaint.

After Echostar filed a second amended complaint, NDS filed a motion to dismiss this complaint on March 31, 2004. On July 21, 2004, the court issued an order directing Echostar to, among other things, file a third amended complaint within ten days correcting various deficiencies noted in the second amended complaint. Echostar filed its third amended complaint on August 4, 2004. On August 6, 2004, the court ruled that NDS was free to file a motion to dismiss the third amended complaint, which NDS did on September 20, 2004. The hearing occurred on January 3, 2005. On February 28, 2005, the court issued an order treating NDS’s motion to dismiss as a motion for a more definite statement, granting the motion and giving Echostar until March 30, 2005 to file a fourth amended compliant correcting various deficiencies noted in the third amended complaint. On March 30, 2005, Echostar filed a fourth amended complaint, which NDS moved to dismiss. On July 27, 2005, the court granted in part and denied in part NDS’s motion to dismiss, and again limited Echostar’s surviving claims to acts allegedly occurring within three years of the filing of Echostar’s original complaint. NDS believes these surviving claims are without merit and intends to vigorously defend against them.

On October 24, 2005, NDS filed its Amended Answer with Counterclaims, alleging that Echostar misappropriated NDS’s trade secrets, violated the Computer Fraud and Abuse Act and engaged in unfair competition. On November 8, 2005, Echostar moved to dismiss NDS’s counterclaims for conversion and claim and delivery, arguing that these claims were preempted and time-barred. Echostar also moved for a more definite statement of NDS’s trade secret misappropriation claim. On December 8, 2005, the court granted in part and denied in part Echostar’s motion to dismiss and for a more definite statement, but granted NDS leave to file amended counterclaims. On December 13, 2005, NDS filed its Second Amended Answer with Counterclaims, which Echostar answered on December 27, 2005. The court has set this case to go to trial in April of 2008.

The International Electronic Technology Corp. Litigation

On April 18, 1997, International Electronic Technology Corp. (“IETC”) filed suit in the United States District Court for the Central District of California against NDS’s customers, Hughes, DIRECTV, Inc. and Thomson Consumer Electronics, Inc., alleging infringement of one U.S. patent and seeking unspecified damages and injunction.

Although not a party to this case, NDS has assumed the defense and agreed to indemnify the named defendants. The defendants have raised defenses, including non-infringement and invalidity. On September 22, 2005, the court issued an order construing certain terms in the patent as a matter of law, after an extensive delay due to the death of two judges previously assigned to the case. Following receipt of the claim construction order, defendants notified IETC that they intended to file a motion for summary judgment of non-infringement based on

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the claim construction. During a status conference with the court on January 9, 2006, IETC requested that defendants’ motion be deferred to permit it to seek additional document discovery. The court denied this request, and ordered IETC to make its request in response to defendants’ summary judgment motion. Defendants’ motion for summary judgment was filed on January 30, 2006.

Intermix

Downloads

On April 28, 2005, the Attorney General of the State of New York (the “NY AG”) commenced an action against Intermix for allegedly unlawful and deceptive acts and practices associated with Intermix’ distribution of toolbar, redirect and contextual ad serving applications (“downloads”). The NY AG asserted that Intermix and/or third parties distributed downloads that were installed by users without sufficient notice or consent and in a manner that made it difficult to locate and remove the programs. The petition sought disgorgement of profits, civil penalties and other remedies. In June 2005, Intermix announced an agreement in principle with the NY AG pursuant to which Intermix would pay a total of $7.5 million to the State of New York and would be prohibited from resuming distribution of its adware, redirect and toolbar programs. In September 2005, Intermix and the NY AG entered into a stipulation for entry of a Consent Order and Judgment memorializing the terms of the settlement, and the court entered the Consent Order and Judgment in October 2005. Intermix did not admit any wrongdoing or liability in connection with settlement of the matter. Intermix had voluntarily suspended distribution of the relevant applications in April 2005, and the payments to the State of New York exceed any and all profits associated with Intermix’ distribution of the subject downloadable applications.

In May 2005, Intermix was served with a Statement of Claim filed by an individual in the Federal Court of Canada in Montreal. The plaintiff in the action purports to act on behalf of an unspecified class of individuals who have been allegedly damaged by Intermix’ violation of provisions of Canada’s 1985 Competition Act in connection with Intermix’ distribution of downloads. The plaintiff is seeking an award of unjust enrichment, civil penalties and costs in unspecified amounts. Intermix has filed a motion seeking dismissal of the lawsuit on the grounds that the court lacks jurisdiction over the alleged claims and over Intermix and that the claims of the plaintiff are factually baseless. Intermix disputes the allegations of the Statement of Claim, believes they are without merit and intends to vigorously defend itself in this matter.

A similar complaint was also filed by an individual, Thomas Kerrins, against Intermix in the United States District Court for the Central District of California. Mr. Kerrins purports to act on behalf of all United States residents who, during the period from July 25, 2002 to the present, had spyware or adware put onto their computers by Intermix. The complaint alleges claims of trespass, unjust enrichment, violation of a California penal statute concerning unauthorized access to computers, computer systems and data, and unfair and deceptive business practices. The plaintiff is seeking an order certifying a class and appointing a class representative and class counsel, injunctive relief, disgorgement of ill-gotten gains and an award of unspecified damages, attorneys’ fees, costs and expenses. Intermix filed a motion to dismiss the lawsuit on the ground that, among others, the complaint fails to state a viable cause of action against Intermix. Prior to the hearing on the motion to dismiss, plaintiff amended his complaint. On November 14, 2005, Intermix filed a motion to dismiss plaintiff’s first amended complaint. This motion to dismiss was granted in part, and denied in part. The Judge denied Intermix’ request to dismiss all class allegations and claims for trespass to chattels and violation of California Penal Code section 502 but dismissed with prejudice the claims for unjust enrichment and violation of California Business and Professions Code section 17200.

In April 2005, the Los Angeles City Attorney’s Office (the “City”) approached Intermix about its downloadable software practices and threatened to file an action against Intermix. In or about June 2005, the City

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verbally informed Intermix that, in light of its proposed settlement with the NY AG, the City would not seek a monetary penalty. Then on August 31, 2005, the City provided a written offer to Intermix reiterating that it would not seek a monetary penalty in the threatened action if Intermix completed a settlement with the NY AG. On September 29, 2005, the day after Intermix finalized its settlement with the NY AG on the terms directed by the City’s August 31 proposal, the City changed its position and informed Intermix that it would seek to impose a monetary penalty. Intermix refused to agree to the imposition of a penalty. On November 17, 2005, the City filed a complaint against Intermix for equitable relief and civil penalties pursuant to California Business and Professions Code sections 17200 and 17500. On November 23, 2005, Intermix filed a verified answer denying the City’s allegations. Intermix believes the City’s claims are without merit and intends to vigorously defend itself.

FIM Transaction

On August 26, 2005, a purported class action lawsuit, captioned Ron Sheppard v. Richard Rosenblatt et. al., was filed in the California Superior Court, County of Los Angeles. In addition to Mr. Rosenblatt, Intermix’ former Chief Executive Officer and a former Intermix director, the lawsuit names as defendants all of the other then incumbent members of the Intermix Board and certain entities affiliated with VantagePoint Venture Partners, a former major Intermix stockholder. The complaint alleged that in pursuing the FIM Transaction and approving the merger agreement, the defendants breached their fiduciary duties to Intermix stockholders by, among other things, engaging in self-dealing and failing to obtain the highest price reasonably available for Intermix and its stockholders. The complaint further alleged that the merger agreement resulted from a flawed process and that the defendants tailored the terms of the merger to advance their own interests. On August 30, 2005, a similar purported class action lawsuit, captioned John Friedmann v. Intermix Media, Inc. et. al., was filed in the same Court naming as defendants all of the same individuals and entities named in the Sheppard action, as well as Intermix. The Friedmann complaint included substantially similar claims and allegations as those asserted in the Sheppard action.

Prior to the consummation of FIM Transaction on September 30, 2005, plaintiff in the Friedmann action conducted expedited discovery and filed a motion with the court seeking to enjoin the acquisition. Plaintiff withdrew his motion after Intermix filed supplemental proxy materials augmenting certain information included by Intermix in its proxy statement distributed to Intermix stockholders in connection with seeking stockholder approval of the FIM Transaction. On September 23, 2005, Mr. Greenspan announced his presentation of an alternative acquisition proposal to the Intermix board of directors which, on September 26, 2005, the board publicly rejected. Plaintiff thereafter applied to the court for an order delaying the vote by Intermix stockholders on the FIM Transaction in order to afford Intermix stockholders additional time to consider the Greenspan proposal. The Court denied the plaintiff’s request and Intermix stockholders approved the FIM Transaction on September 30, 2005.

The Friedmann and Sheppard lawsuits have since been consolidated and a consolidated amended complaint was filed January 17, 2006. The plaintiffs in the consolidated action are seeking various forms of declaratory relief, damages, disgorgement and fees and costs. Intermix believes that the lawsuits described above are meritless and intends to vigorously defend against the claims and allegations in the complaints.

In November 2005, plaintiff in a derivative action captioned LeBoyer v. Greenspan et al. pending against various former Intermix directors and officers in the United States District Court for the Central District of California filed a First Amended Class and Derivative Complaint (the “Amended Complaint”). The original derivative action was filed in May 2003 and arose out of Intermix’ restatement of quarterly financial results for its fiscal year ended March 31, 2003. Plaintiff asserted breach of fiduciary duty and related claims in connection with the restatement. Until the filing of the Amended Complaint, the action had been stayed by mutual agreement

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of the parties since its inception pending determination of whether plaintiffs in a related securities class action lawsuit (the “Securities Litigation”) would be able to state a claim against the defendants. The Securities Litigation was dismissed pursuant to a class settlement in September 2005. In addition, a substantially similar derivative action filed in Los Angeles Superior Court was dismissed based on inability of the plaintiffs to adequately plead demand futility. In the Amended Complaint, in addition to the previously pleaded restatement-related allegations and derivative claims, plaintiff includes various allegations and purported class claims arising out of the FIM Transaction, which are substantially similar to those asserted in the Friedmann and Sheppard lawsuits. The Amended Complaint also adds as defendants the individuals and entities named in the Friedmann and Sheppard lawsuits that were not already defendants in the matter. Plaintiff seeks unspecified damages, disgorgement, costs and fees. Intermix believes that the plaintiff in the action lacks standing to pursue any claims in a derivative capacity and, notwithstanding, that the lawsuit is generally without merit and Intermix intends to vigorously defend itself, and expects that the individual defendants will vigorously defend themselves in the matter.

See Note 17—Subsequent Events for additional discussion of Contingencies.

Other

The Company experiences routine litigation in the normal course of its business. The Company believes that none of its pending litigation will have a material adverse effect on its consolidated financial condition, future results of operations or liquidity.

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

Note 12—Pension Plans and Other Postretirement Benefits

The Company sponsors non-contributory pension plans and retiree health and life insurance benefit plans covering specific groups of employees. The benefits payable for the non-contributory pension plans are based primarily on a formula factoring both an employee’s years of service and pay near retirement. Participant employees are vested in the plans after five years of service. The Company’s policy for all pension plans is to fund amounts, at a minimum, in accordance with statutory requirements. During the six months ended December 31, 2005 and 2004, the Company made discretionary contributions of $59 million and $85 million, respectively, to its pension plans. Plan assets consist principally of common stocks, marketable bonds and government securities. The retiree health and life insurance benefit plans offer medical and/or life insurance to certain full-time employees and eligible dependents that retire after fulfilling age and service requirements.

The components of net periodic benefit costs were as follows:

	Pension Benefits						Postretirement Benefits
	For the three months ended December 31,
	2005			2004			2005			2004
	(in millions)
Service cost benefits earned during the period	$	20		$	22		$	1		$	1
Interest costs on projected benefit obligation		26			27			2			2
Expected return on plan assets		(30	)		(28	)		—			—
Amortization of deferred losses		12			7			1			1
Other		(1	)		(1	)		(1	)		(2	)
Net periodic costs	$	27		$	27		$	3		$	2

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	For the six months ended December 31,
	2005			2004			2005			2004
	(in millions)
Service cost benefits earned during the period	$	41		$	44		$	2		$	2
Interest costs on projected benefit obligation		53			54			4			4
Expected return on plan assets		(61	)		(56	)		—			—
Amortization of deferred losses		23			14			2			2
Other		—			(2	)		(3	)		(4	)
Net periodic costs	$	56		$	54		$	5		$	4

Note 13—Other, net

Other, net consisted of the following:

	For the three months ended December 31,						For the six months ended December 31,
	2005			2004			2005			2004
	(in millions)						(in millions)
Gain on sale of China Netcom (a)	$	—		$	—		$	52		$	—
Change in fair value of exchangeable securities (b)		68			(86	)		27			93
Loss on sale of Sky Multi-Country Partners (a)		—			(55	)		—			(55	)
Gain on sale of Rogers Sportsnet (a)		—			39			—			39
Other		(6	)		(12	)		(6	)		—
Total Other, net	$	62		$	(114	)	$	73		$	77

^(a) See Note 5—Investments

^(b) The Company has certain outstanding exchangeable debt securities which contain embedded derivatives. Pursuant to SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities,” these embedded derivatives require separate accounting and, as such, changes in their fair value are recognized in Other, net.

Note 14—Segment Information

The Company is a diversified entertainment company, which manages and reports its businesses in eight segments:

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

Television, which principally consists of the operation of 35 full power broadcast television stations, including nine duopolies, in the United States (of these stations, 25 are affiliated with the FOX network, nine with the UPN network and one is an independent station); the broadcasting of network programming in the United States; and the development, production and broadcasting of television programming in Asia.

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

Direct Broadcast Satellite Television, which principally consists of the distribution of premium programming services via satellite directly to subscribers in Italy.

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

Newspapers, which principally consists of the publication of four national newspapers in the United Kingdom, the publication of more than 110 newspapers in Australia, and the publication of a mass circulation, metropolitan morning newspaper in the United States.

Book Publishing, which principally consists of the publication of English language books throughout the world.

Other, which includes NDS, a company engaged in the business of supplying open end-to-end digital technology and services to digital pay-television platform operators and content providers; Global Cricket Corporation, which has the exclusive rights to broadcast the Cricket World Cup and other related International Cricket Council cricket events through 2007; News Outdoor, an advertising business which offers display advertising in locations throughout Russia and Eastern Europe; and Fox Interactive Media, which operates the Company’s Internet activities.

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

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	For the three months ended December 31,						For the six months ended December 31,
	2005			2004			2005			2004
	(in millions)						(in millions)
Revenues:
Filmed Entertainment	$	1,607		$	1,872		$	3,026		$	3,249
Television		1,596			1,564			2,644			2,568
Cable Network Programming		810			624			1,585			1,224
Direct Broadcast Satellite Television		620			581			1,118			996
Magazines and Inserts		265			259			532			491
Newspapers		1,010			1,010			2,022			1,875
Book Publishing		390			377			781			741
Other		367			275			639			564
Total revenues	$	6,665		$	6,562		$	12,347		$	11,708
Operating income (loss):
Filmed Entertainment	$	299		$	407		$	667		$	698
Television		183			153			343			387
Cable Network Programming		262			227			459			393
Direct Broadcast Satellite Television		(53	)		(105	)		(114	)		(226	)
Magazines and Inserts		76			73			152			137
Newspapers		69			184			194			302
Book Publishing		77			62			147			122
Other		7			(47	)		(19	)		(93	)
Total operating income		920			954			1,829			1,720
Interest expense, net		(141	)		(137	)		(269	)		(262	)
Equity earnings of affiliates		160			48			346			63
Other, net		62			(114	)		73			77
Income from continuing operations before income tax expense and minority interest in subsidiaries		1,001			751			1,979			1,598
Income tax expense		(292	)		(276	)		(674	)		(456	)
Minority interest in subsidiaries, net of tax		(15	)		(89	)		(31	)		(131	)
Income from continuing operations		694			386			1,274			1,011
Gain on disposition of discontinued operations, net of tax		381			—			381			—
Income before cumulative effect of accounting change		1,075			386			1,655			1,011
Cumulative effect of accounting change, net of tax		—			—			(1,013	)		—
Net income	$	1,075		$	386		$	642		$	1,011

Interest expense, net, Equity earnings of affiliates, Other, net, Minority interest in subsidiaries, net of tax and Income tax expense are not allocated to segments, as they are not under the control of segment management.

Intersegment revenues, generated primarily by the Filmed Entertainment segment, of approximately $210 million and $143 million for the three months ended December 31, 2005 and 2004, respectively, and of approximately $395 million and $319 million for the six months ended December 31, 2005 and 2004, respectively, have been eliminated within the Filmed Entertainment segment. Intersegment operating profit, generated primarily by the Filmed Entertainment segment, of approximately $9 million for the three months ended December 31, 2005 and 2004 and approximately $21 million and $28 million for the six months ended December 31, 2005 and 2004, respectively, have been eliminated within the Filmed Entertainment segment.

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	For the three months ended December 31, 2005
	Operating income (loss)			Depreciation and amortization		Amortization of cable distribution investments		Operating income (loss) before depreciation and amortization
	(in millions)
Filmed Entertainment	$	299		$	27	$	—	$	326
Television		183			23		—		206
Cable Network Programming		262			13		26		301
Direct Broadcast Satellite Television		(53	)		43		—		(10	)
Magazines and Inserts		76			1		—		77
Newspapers		69			65		—		134
Book Publishing		77			1		—		78
Other		7			24		—		31
Total	$	920		$	197	$	26	$	1,143
	For the three months ended December 31, 2004
	Operating income (loss)			Depreciation and amortization		Amortization of cable distribution investments		Operating income (loss) before depreciation and amortization
	(in millions)
Filmed Entertainment	$	407		$	13	$	—	$	420
Television		153			21		—		174
Cable Network Programming		227			10		28		265
Direct Broadcast Satellite Television		(105	)		40		—		(65	)
Magazines and Inserts		73			1		—		74
Newspapers		184			46		—		230
Book Publishing		62			2		—		64
Other		(47	)		16		—		(31	)
Total	$	954		$	149	$	28	$	1,131
	For the six months ended December 31, 2005
	Operating income (loss)			Depreciation and amortization		Amortization of cable distribution investments		Operating income (loss) before depreciation and amortization
	(in millions)
Filmed Entertainment	$	667		$	46	$	—	$	713
Television		343			42		—		385
Cable Network Programming		459			25		53		537
Direct Broadcast Satellite Television		(114	)		84		—		(30	)
Magazines and Inserts		152			3		—		155
Newspapers		194			131		—		325
Book Publishing		147			3		—		150
Other		(19	)		38		—		19
Total	$	1,829		$	372	$	53	$	2,254

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	For the six months ended December 31, 2004
	Operating income (loss)			Depreciation and amortization		Amortization of cable distribution investments		Operating income (loss) before depreciation and amortization
	(in millions)
Filmed Entertainment	$	698		$	25	$	—	$	723
Television		387			41		—		428
Cable Network Programming		393			20		58		471
Direct Broadcast Satellite Television		(226	)		72		—		(154	)
Magazines and Inserts		137			3		—		140
Newspapers		302			81		—		383
Book Publishing		122			3		—		125
Other		(93	)		32		—		(61	)
Total	$	1,720		$	277	$	58	$	2,055

	At December 31, 2005		At June 30, 2005
	(in millions)
Total assets:
Filmed Entertainment	$	6,934	$	5,971
Television (1)		13,152		14,275
Cable Network Programming		7,211		7,065
Direct Broadcast Satellite Television		1,998		1,862
Magazines and Inserts		1,281		1,253
Newspapers		4,996		5,195
Book Publishing		1,510		1,382
Other		7,945		7,421
Investments		10,414		10,268
Total assets	$	55,441	$	54,692
Goodwill and Intangible assets, net:
Filmed Entertainment	$	1,754	$	1,807
Television (1)		10,332		11,892
Cable Network Programming		4,955		4,929
Direct Broadcast Satellite Television		526		537
Magazines and Inserts		1,004		1,002
Newspapers		1,684		1,724
Book Publishing		501		501
Other		2,600		1,069
Total goodwill and intangibles, net	$	23,356	$	23,461

⁽¹⁾ See Note 6—Intangible Assets.

Note 15—Earnings Per Share

Earnings per share (“EPS”) is computed individually for the Class A Common Stock and Class B Common Stock. Net income is apportioned to both Class A stockholders and Class B stockholders on the ratio of 1.2 to 1,

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respectively, in accordance with the rights of the stockholders as described in the Company’s Restated Certificate of Incorporation. In order to give effect to this apportionment when determining EPS, the weighted average Class A shares is increased by 20% (the “Adjusted Class”) and is then compared to the sum of the weighted average Class B shares and the weighted average Adjusted Class. The resulting percentage is then applied to the Net income to determine the apportionment for the Class A stockholders with the balance attributable to the Class B stockholders.

EPS has been presented in the two-class presentation, as the shares of Class B Common Stock participate in dividends with the shares of Class A Common Stock.

The following table sets forth the computation of basic and diluted earnings per share under SFAS No. 128, “Earnings per Share” (in millions, except per share amounts and %):

	For the three months ended December 31,						For the six months ended December 31,
	2005			2004			2005			2004
	(in millions)						(in millions)
Income from continuing operations	$	694		$	386		$	1,274		$	1,011
Perpetual preference dividends		—			(3	)		—			(10	)
Income from continuing operations available to shareholders—basic		694			383			1,274			1,001
Interest on convertible debt		5			5			10			10
Other		(1	)		—			(1	)		—
Income from continuing operations available to shareholders—diluted	$	698		$	388		$	1,283		$	1,011

	For the three months ended December 31,
	2005								2004
	Class A			Class B			Total		Class A			Class B			Total
	(in millions, except % and per share data)
Allocation percent—basic		72	%		28	%	100	%		69	%		31	%	100	%
Allocation of income from continuing operations—basic		500			194		694			265			118		383
Allocation percent—diluted		73	%		27	%	100	%		70	%		30	%	100	%
Allocation of income from continuing operations—diluted		507			191		698			272			116		388
Weighted average shares-basic		2,206			1,025		3,231			1,901			1,016		2,917
Weighted average shares-diluted		2,255			1,025		3,280			1,976			1,016		2,992
Earnings per share:
Income from continuing operations—basic	$	0.23		$	0.19				$	0.14		$	0.12
Income from continuing operations—diluted	$	0.22		$	0.19				$	0.14		$	0.11

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	For the six months ended December 31,
	2005								2004
	Class A			Class B			Total		Class A			Class B			Total
	(in millions, except % and per share data)
Allocation percent—basic		72	%		28	%	100	%		70	%		30	%	100	%
Allocation of income from continuing opeartions—basic		919			355		1,274			696			305		1,001
Allocation percent—diluted		73	%		27	%	100	%		70	%		30	%	100	%
Allocation of income from continuing operations—diluted		932			351		1,283			711			300		1,011
Weighted average shares—basic		2,220			1,027		3,247			1,902			998		2,900
Weighted average shares—diluted		2,277			1,027		3,304			1,974			998		2,972
Earnings per share:
Income from continuing operations—basic	$	0.41		$	0.35				$	0.37		$	0.31
Income from continuing operations—diluted	$	0.41		$	0.34				$	0.36		$	0.30

	For the three months ended December 31,				For the six months ended December 31,
	2005		2004		2005		2004
	(in millions)				(in millions)
Gain on disposition of discontinued operations	$	381	$	—	$	381	$	—

	For the three months ended December 31,
	2005								2004
	Class A			Class B			Total		Class A			Class B			Total
	(in millions, except % and per share data)
Allocation percent—basic		72	%		28	%	100	%		69	%		31	%	100	%
Allocation of gain on disposition of discontinued operations—basic		275			106		381			—			—		—
Allocation percent—diluted		73	%		27	%	100	%		70	%		30	%	100	%
Allocation of gain on disposition of discontinued operations—diluted		276			105		381			—			—		—
Weighted average shares—basic		2,206			1,025		3,231			1,901			1,016		2,917
Weighted average shares—diluted		2,255			1,025		3,280			1,976			1,016		2,992
Earnings per share:
Gain on disposition of discontinued operations—basic	$	0.12		$	0.10				$	—		$	—
Gain on disposition of discontinued operations—diluted	$	0.12		$	0.10				$	—		$	—

32

NEWS CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

	For the six months ended December 31,
	2005								2004
	Class A			Class B			Total		Class A			Class B			Total
	(in millions, except % and per share data)
Allocation percent—basic		72	%		28	%	100	%		70	%		30	%	100	%
Allocation gain on of disposition of discontinued operations—basic		275			106		381			—			—		—
Allocation percent—diluted		73	%		27	%	100	%		70	%		30	%	100	%
Allocation of gain on disposition of discontinued operations—diluted		277			104		381			—			—		—
Weighted average shares—basic		2,220			1,027		3,247			1,902			998		2,900
Weighted average shares—diluted		2,277			1,027		3,304			1,974			998		2,972
Earnings per share:
Gain on disposition of discontinued operations—basic	$	0.12		$	0.10				$	—		$	—
Gain on disposition of discontinued operations—diluted	$	0.12		$	0.10				$	—		$	—

	For the three months ended December 31,				For the six months ended December 31,
	2005		2004		2005			2004
	(in millions)				(in millions)
Cumulative effect of accounting change	$	—	$	—	$	(1,013	)	$	—

	For the three months ended December 31,
	2005								2004
	Class A			Class B			Total		Class A			Class B			Total
	(in millions, except % and per share data)
Allocation percent—basic		72	%		28	%	100	%		69	%		31	%	100	%
Allocation of cumulative effect of accounting change, net of tax—basic		—			—		—			—			—		—
Allocation percent—diluted		73	%		27	%	100	%		70	%		30	%	100	%
Allocation of cumulative effect of accounting change, net of tax—diluted		—			—		—			—			—		—
Weighted average shares—basic		2,206			1,025		3,231			1,901			1,016		2,917
Weighted average shares—diluted		2,255			1,025		3,280			1,976			1,016		2,992
Earnings per share:
Cumulative effect of accounting change, net of tax—basic	$	—		$	—				$	—		$	—
Cumulative effect of accounting change, net of tax—diluted	$	—		$	—				$	—		$	—

33

NEWS CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

	For the six months ended December 31,
	2005								2004
	Class A			Class B			Total		Class A			Class B			Total
	(in millions, except % and per share data)
Allocation percent—basic		72	%		28	%	100	%		70	%		30	%	100	%
Allocation of cumulative effect of accounting change, net of tax—basic		(731	)		(282	)	(1,013	)		—			—		—
Allocation percent—diluted		73	%		27	%	100	%		70	%		30	%	100	%
Allocation of cumulative effect of accounting change, net of tax—diluted		(736	)		(277	)	(1,013	)		—			—		—
Weighted average shares—basic		2,220			1,027		3,247			1,902			998		2,900
Weighted average shares—diluted		2,277			1,027		3,304			1,974			998		2,972
Earnings per share:
Cumulative effect of accounting change, net of tax—basic	$	(0.33	)	$	(0.27	)			$	—		$	—
Cumulative effect of accounting change, net of tax—diluted	$	(0.32	)	$	(0.27	)			$	—		$	—

	For the three months ended December 31,						For the six months ended December 31,
	2005			2004			2005			2004
	(in millions)						(in millions)
Net income	$	1,075		$	386		$	642		$	1,011
Perpetual preference dividends		—			(3	)		—			(10	)
Net income available to shareholders—basic		1,075			383			642			1,001
Interest on convertible debt		5			5			10			10
Other		(1	)		—			(1	)		—
Net income available to shareholders—diluted	$	1,079		$	388		$	651		$	1,011

	For the three months ended December 31,
	2005								2004
	Class A			Class B			Total		Class A			Class B			Total
	(in millions, except % and per share data)
Allocation percent—basic		72	%		28	%	100	%		69	%		31	%	100	%
Allocation of net income—basic		775			300		1,075			265			118		383
Allocation percent—diluted		73	%		27	%	100	%		70	%		30	%	100	%
Allocation of net income—diluted		783			296		1,079			272			116		388
Weighted average shares—basic		2,206			1,025		3,231			1,901			1,016		2,917
Weighted average shares—diluted		2,255			1,025		3,280			1,976			1,016		2,992
Earnings per share:
Net income—basic	$	0.35		$	0.29				$	0.14		$	0.12
Net income—diluted	$	0.35		$	0.29				$	0.14		$	0.11

34

NEWS CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

	For the six months ended December 31,
	2005								2004
	Class A			Class B			Total		Class A			Class B			Total
	(in millions, except % and per share data)
Allocation percent—basic		72	%		28	%	100	%		70	%		30	%	100	%
Allocation of net income—basic		463			179		642			696			305		1,001
Allocation percent—diluted		73	%		27	%	100	%		70	%		30	%	100	%
Allocation of net income—diluted		473			178		651			711			300		1,011
Weighted average shares—basic		2,220			1,027		3,247			1,902			998		2,900
Weighted average shares—diluted		2,277			1,027		3,304			1,974			998		2,972
Earnings per share:
Net income—basic	$	0.21		$	0.17				$	0.37		$	0.31
Net income—diluted	$	0.21		$	0.17				$	0.36		$	0.30

Note 16—Additional Financial Information

Interest Expense, Net

Interest expense, net consists of:

	For the three months ended December 31,						For the six months ended December 31,
	2005			2004			2005			2004
	(in millions)						(in millions)
Interest income	$	55		$	40		$	116		$	82
Interest expense		(204	)		(186	)		(398	)		(362	)
Interest capitalized		8			9			13			18
Interest expense, net	$	(141	)	$	(137	)	$	(269	)	$	(262	)

Supplemental Cash Flows Information

	For the six months ended December 31,
	2005			2004
	(in millions)
Cash paid for income taxes	$	236		$	205
Cash paid for interest		337			305
Supplemental information on businesses acquired:
Fair value of assets acquired		1,704			1,633
Cash acquired		25			46
Less: Liabilities assumed		(133	)		(800	)
Consideration payable		—			(1	)
Minority interest acquired		38			82
Cash paid		(1,601	)		(160	)
Fair value of stock consideration issued to third parties		33			800
Treasury stock acquired		—			5,559
Fair value of stock consideration	$	33		$	6,359

35

NEWS CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Note 17—Subsequent Events

A dividend of $0.06 per Class A Common Stock and a dividend of $0.05 per Class B Common Stock has been declared and is payable on April 19, 2006 to stockholders of record on March 15, 2006.

In January 2006, CBS Corp., owner of the UPN network (“UPN”), and Time Warner Inc., owner of the WB network (the “WB”), announced that UPN and the WB will combine to form a new network (the “new network”), which is expected to launch in September 2006. The Company currently owns nine major-market television stations that are affiliated with UPN. The Company’s affiliation agreement with UPN is set to expire in August 2006 and the affected stations are not expected to be affiliated with the new network. As such, the Company will have to find other programming to broadcast on these stations. To the extent that the Company is not successful launching new programming on the affected stations, the Company’s operating results in the Television segment may be adversely impacted.

On January 18, 2006, Valassis Communications, Inc. (“Valassis”) filed suit against News America Incorporated, News America Marketing FSI, LLC and News America Marketing In-Store, Inc. (collectively “News America”) in the United States District Court for the Eastern District of Michigan. Valassis alleges that News America possesses monopoly power in a claimed in-store advertising and promotions market (the “in-store market”) and has used that power to gain an unfair advantage over Valassis in a purported market for coupons distributed by free standing inserts (“FSIs”). Valassis alleges that News America has entrenched its monopoly power in the in-store market by entering into exclusive contracts with retailers. Valassis further alleges that News America has unlawfully bundled the sale of in-store advertising and promotions with the sale of FSIs and that such bundling constitutes unlawful tying in violation of Sections 1 and 3 of the Sherman Antitrust Act of 1890, as amended (the “Sherman Act”). Valassis also has asserted that News America has violated Section 2 of the Sherman Act, various state antitrust statutes and has tortiously interfered with Valassis’ actual or expected business relationships. The plaintiff’s complaint seeks injunctive relief, damages, fees and costs. News America believes Valassis’ claims are without merit and intends to vigorously defend itself in this matter.

On January 31, 2006, the Company reached an agreement to sell Sky Radio Limited, a commercial radio station group in the Netherlands, to Telegraaf Media Groep N.V. and ING Corporate Investments Participaties B.V., for cash consideration of approximately $225 million. The Company expects to record a gain upon the closing of this transaction.

Note 18—Supplemental Guarantor Information

On June 27, 2003, News America Incorporated (“NAI”), an indirect wholly-owned subsidiary of News Corporation, entered into a $1.75 billion Five Year Credit Agreement (the “Credit Agreement”) with Citibank N.A., as administrative agent, JP Morgan Chase Bank, as syndication agent, and the lenders named therein. News Corporation, FEG Holdings, Inc., Fox Entertainment Group, Inc., News America Marketing FSI, LLC, News Publishing Australia Limited and News Australia Holdings Pty Limited are guarantors (the “Guarantors”) under the Credit Agreement.

The Credit Agreement provides a $1.75 billion revolving credit facility with a sub-limit of $600 million available for the issuance of letters of credit, and expires on June 30, 2008. Borrowings are in U.S. dollars only, while letters of credit are issuable in U.S. dollars or Euros. The significant terms of the Credit Agreement include the requirement that the Company maintain specific gearing and interest coverage ratios and limitations on secured indebtedness. The Company pays a facility fee of 0.15% regardless of facility usage. The Company pays interest of a margin over LIBOR for borrowings and a letter of credit fee of 0.60%. The Company is subject to an additional fee of 0.125% if borrowings under the facility exceed 25% of the committed facility. The interest and fees are based on the Company’s current debt rating.

36

NEWS CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The Guarantors presently guarantee the senior public indebtedness of NAI. The supplemental condensed consolidating financial information of the Guarantors should be read in conjunction with the unaudited consolidated financial statements included herein.

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

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

37

NEWS CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Supplemental Condensed Consolidating Statement of Operations

For the six months ended December 31, 2005

(US$ in millions)

	News America Incorporated		News Corporation		Guarantor		Non-Guarantor		Reclassifications and Eliminations		News Corporation and Subsidiaries
Revenues	3		—		316		12,028		—		12,347
Expenses	103		—		210		10,205		—		10,518
Operating (loss) income	(100	)	—		106		1,823		—		1,829
Other (Expense) Income:
Interest expense, net	(957	)	(35	)	223		500		—		(269	)
Equity earnings (losses) of affiliates	(1	)	—		19		328		—		346
Earnings (losses) from subsidiary entities	624		719		293		—		(1,636	)	—
Other, net	26		(42	)	18		71		—		73
Income (loss) from continuing operations before income tax expense and minority interest in subsidiaries	(408	)	642		659		2,722		(1,636	)	1,979
Income tax (expense) benefit	139		—		(225	)	(927	)	339		(674	)
Minority interest in subsidiaries, net of tax	—		—		—		(31	)	—		(31	)
Income (loss) from continuing operations	(269	)	642		434		1,764		(1,297	)	1,274
Gain on disposition of discontinued operations	—		—		—		381		—		381
Income (loss) before cumulative effect of accounting change	(269	)	642		434		2,145		(1,297	)	1,655
Cumulative effect of accounting change, net of tax	—		—		—		(1,013	)	—		(1,013	)
Net income (loss)	(269	)	642		434		1,132		(1,297	)	642

See notes to supplemental guarantor information

38

NEWS CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Supplemental Condensed Consolidating Statement of Operations

For the six months ended December 31, 2004

(US$ in millions)

	News America Incorporated		News Corporation	Guarantor		Non-Guarantor		Reclassifications and Eliminations		News Corporation and Subsidiaries
Revenues	3		—	305		11,400		—		11,708
Expenses	143		—	217		9,628		—		9,988
Operating (loss) income	(140	)	—	88		1,772		—		1,720
Other (Expense) Income:
Interest expense, net	(1,440	)	—	347		831		—		(262	)
Equity earnings of affiliate	—		—	7		56		—		63
Earnings (losses) from subsidiary entities	1,661		1,011	2,272		—		(4,944	)	—
Other, net	114		—	(3	)	(34	)	—		77
Income (loss) before income tax expense and minority interest in subsidiaries	195		1,011	2,711		2,625		(4,944	)	1,598
Income tax (expense) benefit	(68	)	—	(948	)	(916	)	1,476		(456	)
Minority interest in subsidiaries, net of tax	—		—	(118	)	(13	)	—		(131	)
Net income (loss)	127		1,011	1,645		1,696		(3,468	)	1,011

See notes to supplemental guarantor information

39

NEWS CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Supplemental Condensed Consolidating Balance Sheet

At December 31, 2005

(US$ in millions)

	News America Incorporated	News Corporation	Guarantor		Non-Guarantor		Reclassifications and Eliminations		News Corporation and Subsidiaries
Assets:
Current Assets:
Cash and cash equivalents	2,300	2	—		2,941		—		5,243
Receivables, net	25	—	—		5,408		—		5,433
Inventories, net	—	—	57		1,860		—		1,917
Other	22	—	—		357		6		385
Total Current Assets	2,347	2	57		10,566		6		12,978
Non-Current Assets:
Receivables	1	—	—		707		—		708
Inventories, net	—	—	—		2,598		—		2,598
Property, plant and equipment, net	85	—	1		4,368		—		4,454
Intangible assets	121	—	70		10,998		—		11,189
Goodwill	—	—	—		12,167		—		12,167
Other non-current assets	137	—	—		796		—		933
Investments
Investments in associated companies and Other investments	123	—	1,263		9,028		—		10,414
Intragroup investments	45,112	76,640	74,127		15,297		(211,176	)	—
Total Investments	45,235	76,640	75,390		24,325		(211,176	)	10,414
Total Non-Current Assets	45,579	76,640	75,461		55,959		(211,176	)	42,463
Total Assets	47,926	76,642	75,518		66,525		(211,170	)	55,441
Liabilities and Stockholders’ Equity
Current Liabilities:
Borrowings	895	—	—		49		—		944
Other current liabilities	256	—	1,239		4,634		359		6,488
Total Current Liabilities	1,151	—	1,239		4,683		359		7,432
Non-current Liabilities:
Borrowings	11,134	—	—		126		—		11,260
Other liabilities	—	—	1,055		6,471		400		7,926
Intercompany	12,526	1,837	(5,117	)	(9,246	)	—		—
Minority interest in subsidiaries	—	—	—		224		—		224
Stockholders’ Equity	23,115	74,805	78,341		64,267		(211,929	)	28,599
Total Liabilities and Stockholders’ Equity	47,926	76,642	75,518		66,525		(211,170	)	55,441

See notes to supplemental guarantor information

40

NEWS CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Supplemental Condensed Consolidating Balance Sheet

At June 30, 2005

(US$ in millions)

	News America Incorporated	News Corporation	Guarantor		Non-Guarantor		Reclassifications and Eliminations		News Corporation and Subsidiaries
Assets:
Current Assets:
Cash and cash equivalents	4,234	—	—		2,236		—		6,470
Receivables, net	22	—	—		4,331		—		4,353
Inventories, net	—	—	56		1,460		—		1,516
Deferred income taxes	—	—	—		—		155		155
Other	1	—	—		284		—		285
Total Current Assets	4,257	—	56		8,311		155		12,779
Non-Current Assets:
Receivables	1	—	—		672		—		673
Inventories, net	—	—	—		2,366		—		2,366
Property, plant and equipment, net	86	—	9		4,251		—		4,346
Intangible assets	132	—	69		12,316		—		12,517
Goodwill	—	—	—		10,944		—		10,944
Other	130	—	—		669		—		799
Investments
Investments in associated companies and Other investments	109	—	1,245		8,914		—		10,268
Intragroup investments	44,445	75,622	73,917		15,735		(209,719	)	—
Total Investments	44,554	75,622	75,162		24,649		(209,719	)	10,268
Total Non-Current Assets	44,903	75,622	75,240		55,867		(209,719	)	41,913
Total Assets	49,160	75,622	75,296		64,178		(209,564	)	54,692
Liabilities and Stockholders’ Equity
Current Liabilities:
Borrowings	880	—	—		32		—		912
Other current liabilities	316	—	1,246		4,081		94		5,737
Total Current Liabilities	1,196	—	1,246		4,113		94		6,649
Non-Current Liabilities:
Borrowings	9,958	—	—		129		—		10,087
Other non-current liabilities	—	—	1,799		8,361		(1,800	)	8,360
Intercompany	15,180	593	(4,987	)	(10,786	)	—		—
Minority interest in subsidiaries	—	—	—		219		—		219
Stockholders’ Equity	22,826	75,029	77,238		62,142		(207,858	)	29,377
Total Liabilities and Stockholders’ Equity	49,160	75,622	75,296		64,178		(209,564	)	54,692

See notes to supplemental guarantor information

41

NEWS CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Supplemental Condensed Consolidating Statement of Cash Flows

For the six months ended December 31, 2005

(US$ in millions)

	News America Incorporated		News Corporation		Guarantor	Non-Guarantor		Reclassifications and Eliminations	News Corporation and Subsidiaries
Operating activities:
Net cash (used in) provided by operating activities	(3,062	)	1,243		—	2,280		—	461
Investing and other activities:
Property, plant and equipment	(7	)	—		—	(405	)	—	(412	)
Investments	2		—		—	(1,647	)	—	(1,645	)
Proceeds from sale of investments, non-current assets and business disposals	—		—		—	510		—	510
Net cash used in investing activities	(5	)	—		—	(1,542	)	—	(1,547	)
Financing activities:
Issuance of debt	1,133		—		—	16		—	1,149
Repayment of debt	—		—		—	(7	)	—	(7	)
Issuance of shares	—		63		—	10		—	73
Repurchase of shares	—		(1,067	)	—	—		—	(1,067	)
Dividends paid	—		(237	)	—	(4	)	—	(241	)
Net cash provided by (used in) financing activities	1,133		(1,241	)	—	15		—	(93	)
Net (decrease) increase in cash and cash equivalents	(1,934	)	2		—	753		—	(1,179	)
Cash and cash equivalents, beginning of period	4,234		—		—	2,236		—	6,470
Exchange movement on opening cash balance	—		—		—	(48	)	—	(48	)
Cash and cash equivalents, end of period	2,300		2		—	2,941		—	5,243

See notes to supplemental guarantor information

42

NEWS CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Supplemental Condensed Consolidating Statement of Cash Flows

For the six month period ended December 31, 2004

(US$ in millions)

	News America Incorporated		News Corporation		Guarantor		Non-Guarantor		Reclassifications and Eliminations	News Corporation and Subsidiaries
Operating activities:
Net cash (used in) provided by operating activities	(569	)	72		125		1,352		—	980
Investing and other activities:
Property, plant and equipment	(1	)	—		(3	)	(421	)	—	(425	)
Investments	(3	)	—		(122	)	(80	)	—	(205	)
Proceeds from sale of investments, non-current assets and business disposals	14		—		—		530		—	544
Net cash provided by (used in) investing activities	10		—		(125	)	29		—	(86	)
Financing activities:
Issuance of debt	1,743		—		—		12		—	1,755
Repayment of debt	(15	)	—		—		(1,814	)	—	(1,829	)
Cash on deposit	275		—		—		—		—	275
Issuance of shares	—		30		—		7		—	37
Dividends paid	—		(100	)	—		(21	)	—	(121	)
Net cash provided by (used in) financing activities	2,003		(70	)	—		(1,816	)	—	117
Net (decrease) increase in cash and cash equivalents	1,444		2		—		(435	)	—	1,011
Cash and cash equivalents, beginning of period	1,972		—		3		2,076		—	4,051
Exchange movement on opening cash balance	—		—		—		133		—	133
Cash and cash equivalents, end of period	3,416		2		3		1,774		—	5,195

See notes to supplemental guarantor information

43

NEWS CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Notes to Supplemental Guarantor Information

(1) Guarantors consist of the Company and the following wholly-owned subsidiaries of the Company:

Subsidiaries	Jurisdiction of Incorporation	Principal Business
News Australia Holdings Pty Ltd	Australia	A subsidiary of News Corporation, which holds all of the stock of News Holdings Limited (formerly known as The News Corporation Limited),
News Publishing Australia Limited	Delaware, USA	U.S. holding company, which owns 100% of NAI.
FEG Holdings, Inc.	Delaware, USA	A subsidiary of NAI.
News America Marketing FSI, LLC	Delaware, USA	Publishes free-standing inserts.
Fox Entertainment Group, Inc.	Delaware, USA	A subsidiary of News Corporation, principally engaged in the development, production and worldwide distribution of feature films and television programs, television broadcasting, and cable network programming.

(2) Investments in the Company’s subsidiaries, for purposes of the supplemental condensed consolidating presentation, are accounted for by their parent companies under the equity method of accounting whereby earnings of subsidiaries are reflected in the parent company’s investment account and earnings.

(3) The guarantees of NAI’s senior public indebtedness constitute senior indebtedness of each of the guarantors thereto, including the Company, and rank pari passu with all present and future senior indebtedness of such guarantors. Because the factual basis underlying the obligations created pursuant to the various facilities and other obligations constituting senior indebtedness of the Company and the guarantors of NAI’s senior public indebtedness, including the Company, differ, it is not possible to predict how a court in bankruptcy would accord priorities among the obligations of the Company and its subsidiaries.

44

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This document contains statements that constitute “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended. The words “expect,” “estimate,” “anticipate,” “predict,” “believe” and similar expressions and variations thereof are intended to identify forward-looking statements. These statements appear in a number of places in this document and include statements regarding the intent, belief or current expectations of News Corporation, its directors or its officers with respect to, among other things, trends affecting News Corporation’s financial condition or results of operations. The readers of this document are cautioned that any forward-looking statements are not guarantees of future performance and involve risks and uncertainties. More information regarding these risks, uncertainties and other factors is set forth under the heading “Risk Factors,” in this report. News Corporation does not ordinarily make projections of its future operating results and undertakes no obligation (and expressly disclaims any obligation) to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. Readers should carefully review other documents filed by News Corporation with the Securities and Exchange Commission (“SEC”). This section should be read together with the unaudited consolidated financial statements of News Corporation and related notes set forth elsewhere herein.

REORGANIZATION

Effective November 12, 2004, the Company changed its corporate domicile from Australia to the United States and its reporting currency from the Australian dollar to the U.S. dollar (“the Reorganization”). As a result, the Company’s accompanying consolidated financial statements are stated in U.S. dollars as opposed to Australian dollars, which was the currency the Company previously used to present its financial statements, and have been prepared in accordance with U.S. generally accepted accounting principles, or GAAP.

In the Reorganization, all outstanding ordinary shares and preferred limited voting ordinary shares of The News Corporation Limited (“TNCL”) were cancelled and shares of Class A Common Stock and Class B Common Stock of the Company were issued in exchange, respectively, on a one-for-two share basis. The financial statements have been presented as if the one-for-two share exchange took place on July 1, 2004.

INTRODUCTION

Management’s discussion and analysis of financial condition and results of operations (“MD&A”) is intended to help provide an understanding of the Company’s financial condition, changes in financial condition and results of operations. MD&A is organized as follows:

• Overview of the Company’s Business—This section provides a general description of the Company’s businesses, as well as recent developments that have occurred either during fiscal 2006 that the Company believes are important in understanding the 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 three and six months ended December 31, 2005 and 2004. This analysis is presented on both a consolidated and a segment basis. In addition, a brief description of significant transactions and events that impact the comparability of the results being analyzed is provided.

• Liquidity and Capital Resources—This section provides an analysis of the Company’s cash flows for the six months ended December 31, 2005 and 2004. Included in the discussion of outstanding debt is a discussion of the amount of financial capacity available to fund the Company’s future commitments and obligations, as well as a discussion of other financing arrangements.

45

OVERVIEW OF THE COMPANY’S BUSINESS

The Company is a diversified entertainment company, which manages and reports its businesses in eight segments:

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

• Television, which principally consists of the operation of 35 full power broadcast television stations, including nine duopolies, in the United States (of these stations, 25 are affiliated with the FOX network, nine with the UPN network and one is an independent station); the broadcasting of network programming in the United States; and the development, production and broadcasting of television programming in Asia.

• Cable Network Programming, which principally consists of the production and licensing of programming distributed through cable television systems and direct broadcast satellite (“DBS”) operators in the United States.

• Direct Broadcast Satellite Television, which principally consists of the distribution of premium programming services via satellite directly to subscribers in Italy.

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

• Newspapers, which principally consists of the publication of four national newspapers in the United Kingdom, the publication of more than 110 newspapers in Australia, and the publication of a mass circulation, metropolitan morning newspaper in the United States.

• Book Publishing, which principally consists of the publication of English language books throughout the world.

• Other, which includes NDS Group plc (“NDS”), a company engaged in the business of supplying open end-to-end digital technology and services to digital pay-television platform operators and content providers; Global Cricket Corporation, which has the exclusive rights to broadcast the Cricket World Cup and other related International Cricket Council cricket events through 2007; News Outdoor, an advertising business which offers display advertising in locations throughout Russia and Eastern Europe; and Fox Interactive Media, which operates the Company’s Internet activities.

Filmed Entertainment

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

The revenues and operating results of the Filmed Entertainment segment are significantly affected by the timing of the Company’s theatrical and home entertainment releases, the number of its original and returning

46

television series that are aired by television networks, and the number of its television series in off-network syndication. Theatrical and home entertainment release dates are determined by several factors, including timing of vacation and holiday periods and competition in the marketplace. A general reduction in timing between theatrical and home entertainment releases could adversely affect the revenues and operating results of this segment. In seeking to manage its risk, the Company has pursued a strategy of entering into agreements to share the financing of certain films with other parties. The parties to these arrangements include studio and non-studio entities, both domestic and foreign. In several of these agreements, other parties control certain distribution rights.

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

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

In the operation of its businesses, the Company engages the services of writers, directors, actors and others, which are subject to collective bargaining agreements. Work stoppages and/or higher costs in connection with these agreements could adversely impact the Company’s operations.

Television and Cable Network Programming

The Company’s U.S television operations consist of the FOX Broadcasting Company (“FOX”) and the 35 television stations owned by the Company. The Company’s international television operations consist primarily of STAR Group Limited (“STAR”).

The television broadcast environment is highly competitive. The primary methods of competition in broadcast television are the development and acquisition of popular programming and the development of audience interest through programming promotion, in order to sell advertising at profitable rates. FOX competes for audience, advertising revenues and programming with other broadcast networks such as CBS, ABC, NBC, UPN and the WB, independent television stations, cable program services, as well as other media, including DBS television services, DVDs, video games, print and the Internet. In addition, FOX competes with the other broadcast networks to secure affiliations with independently owned television stations in markets across the country. (See Other Recent Business Developments below for discussion of the announced UPN and WB network combination.)

The television stations owned and operated by the Company compete for programming, audiences and advertising revenues with other television stations and cable networks in their respective coverage areas and, in some cases, with respect to programming, with other station groups, and in the case of advertising revenues, with other local and national media. The competitive position of the television stations owned by the Company is largely influenced by the strength of FOX, and, in particular, the primetime viewership of FOX, as well as the quality of the syndicated programs and local news programs in time periods not programmed by FOX.

In 2002, Nielsen Media Research (“Nielsen”) began to transition the existing local television ratings system to the use of Local People Meters (“LPMs”) in certain large markets. The transition to LPMs has adversely impacted the ratings of the television stations owned by the Company in the markets where the transition has

47

occurred. In January 2006, Nielsen introduced LPMs in the Dallas and Detroit markets and plans to establish LPMs in the Atlanta market in fiscal 2007.

Generally, the Company’s cable networks, which target various demographics, derive a majority of their revenues from monthly affiliate fees received from cable television systems and DBS operators based on the number of its subscribers, net of the amortization of cable distribution investments (capitalized fees paid to a cable operator or DBS operator to facilitate the launch of a cable network). Cable television and DBS are currently the predominant means of distribution of the Company’s program services in the United States. Internationally, distribution technology varies region by region.

The Company’s cable networks compete for carriage on cable television systems, DBS operators and other distributors with other program services, as well as other uses of bandwidth, such as retransmission of free over-the-air broadcast networks, telephony and data transmission. A primary focus of competition is for distribution of the Company’s cable networks that are not already distributed within a particular cable television or DBS system. For such program services, distributors make decisions on the use of bandwidth based on various considerations, including amounts paid by programmers for launches, subscription fees payable by distributors and appeal to the distributors’ subscribers.

In Asia, STAR’s programming is primarily distributed via satellite to local cable operators or other pay-television platform operators for distribution to their subscribers. STAR derives its revenue from the sale of advertising time as well as affiliate fees from these pay-television platform operators.

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

The Company has several multi-year sports rights agreements, including contracts with the National Football League (“NFL”) through fiscal 2012, contracts with the National Association of Stock Car Auto Racing (“NASCAR”) for certain races and exclusive rights for certain ancillary content through calendar year 2014, and a contract with Major League Baseball (“MLB”) through calendar year 2006. These contracts provide the Company with the broadcast rights to certain national sporting events during their respective terms. The costs of these sports contracts are charged to expense based on the ratio of each period’s operating profits to estimated total remaining operating profit of the contract.

The profitability of these long-term national sports contracts, as discussed above, is based on the Company’s best estimates at December 31, 2005 of directly attributable revenues and costs; such estimates may change in the future, and such changes may be significant. Should revenues decline from estimates applied at December 31, 2005, a loss will be recorded. Should revenues improve as compared to estimated revenues, the Company will have a positive operating profit related to the contract, which will be recognized over the estimated remaining contract term.

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

Direct Broadcast Satellite Television

SKY Italia derives revenues principally from subscriber fees. The Company believes that the quality and variety of video, audio and interactive programming, quality of picture, access to service, customer service and

48

price are the key elements for gaining and maintaining market share. SKY Italia’s competition includes companies that offer video, audio, interactive programming, telephony, data and other information and entertainment services, including broadband Internet providers, digital terrestrial transmission (“DTT”) services, wireless companies and companies that are developing new technologies.

During fiscal 2005, competitive DTT services in Italy expanded to include pay-per-view offering of soccer games previously available exclusively on the SKY Italia platform. The Company is currently prohibited from providing a DTT service under regulations of the European Commission. In addition, the Italian government has previously offered a subsidy on the purchase of DTT decoders. As a result, DTT operators could entice potential SKY Italia subscribers to their system.

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

Magazines and Inserts

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

Newspapers

The Newspapers segment derives revenues from the sale of advertising space and the sale of published newspapers. Adverse changes in general market conditions for advertising may affect revenues. Circulation revenues can be greatly affected by changes in competitors’ cover prices and by promotion activities. Operating expenses for the Newspapers segment include costs related to newsprint, ink, printing costs and editorial content. Selling, general and administrative expenses include salaries, employee benefits, rent and other routine overhead.

The Newspapers segment’s advertising volume and the price of newsprint are the key uncertainties whose fluctuations can have a material effect on the Company’s operating results and cash flow. The Company has to anticipate the level of advertising volume and newsprint prices in managing its businesses to maximize operating profit during expanding and contracting economic cycles. Newsprint is a basic commodity and its price is sensitive to the balance of supply and demand. The Company’s costs and expenses are affected by the cyclical increases and decreases in the price of newsprint. The newspapers published by the Company compete for readership and advertising with local and national newspapers and also compete with television, radio and other communications media in their respective locales. Competition for newspaper circulation is based on the news and editorial content of the newspaper, cover price and, from time to time, various promotions. The success of the newspapers published by the Company in competing with other newspapers and media for advertising depends upon advertisers’ judgments as to the most effective use of their advertising budgets. Competition for advertising among newspapers is based upon circulation levels, reader demographics, advertising rates and advertiser results. Such judgments are based on factors, such as cost, availability of alternative media, circulation and quality of readership demographics.

Book Publishing

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

49

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

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

The book publishing business operates in a highly competitive market and has been affected by consolidation trends. This market continues to change in response to technological innovations and other factors. Recent years have brought a number of significant mergers among the leading book publishers. The book superstore remains a significant factor in the industry contributing to the general trend toward consolidation in the retail channel. There have also been a number of mergers completed in the distribution channel. The Company must compete with other publishers such as Random House, Penguin Group, Simon & Schuster and Time Warner for the rights to works by well-known authors and public personalities. Although the Company currently has strong positions in each of its markets, further consolidation in the book publishing industry could place the Company at a competitive disadvantage with respect to scale and resources.

Other Recent Business Developments

In January 2006, CBS Corp., owner of the UPN network (“UPN”), and Time Warner Inc., owner of the WB network (the “WB”), announced that UPN and the WB will combine to form a new network (the “new network”), which is expected to launch in September 2006. The Company currently owns nine major-market television stations that are affiliated with UPN. The Company’s affiliation agreement with UPN is set to expire in August 2006 and the affected stations are not expected to be affiliated with the new network. As such, the Company will have to find other programming to broadcast on these stations. To the extent that the Company is not successful launching new programming on the affected stations, the Company’s operating results in the Television segment may be adversely impacted.

In July 2005, the Company formed a new division, Fox Interactive Media (“FIM”), to expand the Company’s Internet presence, and increase the Company’s opportunity to participate in the growing web-based advertising market. FIM’s primary focus is to build an integrated online Internet network of premier destinations that allows users to experience, engage, customize and personalize their web experience. The Company purchased several Internet companies during September and October through its FIM division.

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RESULTS OF OPERATIONS

Results of Operations—For the three and six months ended December 31, 2005 versus the three and six months ended December 31, 2004.

The following table sets forth the Company’s operating results, for the three and six months ended December 31, 2005 as compared to the three and six months ended December 31, 2004.

	For the three months ended December 31,								For the six months ended December 31,
	2005			2004			% Change		2005			2004			% Change
	(in millions, except % and per share amounts)
Revenues	$	6,665		$	6,562		2	%	$	12,347		$	11,708		5	%
Expenses:
Operating		4,471			4,485		—			8,110			7,865		3	%
Selling, general and administrative		978			938		4	%		1,937			1,797		8	%
Depreciation and amortization		197			149		32	%		372			277		34	%
Other operating charge		99			36		**			99			49		**
Total operating income	$	920		$	954		(4	)%	$	1,829		$	1,720		6	%
Interest expense, net		(141	)		(137	)	(3	)%		(269	)		(262	)	(3	)%
Equity earnings of affiliates		160			48		**			346			63		**
Other, net		62			(114	)	**			73			77		(5	)%
Income from continuing operations before income tax expense and minority interest in subsidiaries		1,001			751		33	%	$	1,979		$	1,598		24	%
Income tax expense		(292	)		(276	)	(6	)%		(674	)		(456	)	(48	)%
Minority interest in subsidiaries, net of tax		(15	)		(89	)	83	%		(31	)		(131	)	76	%
Income from continuing operations		694			386		80	%		1,274			1,011		26	%
Gain on disposition of discontinued operations, net of tax		381			—		**			381			—		**
Income before cumulative effect of accounting change		1,075			386		**			1,655			1,011		64	%
Cumulative effect of accounting change, net of tax		—			—		**			(1,013	)		—		**
Net income	$	1,075		$	386		**		$	642		$	1,011		(36	)%
Diluted earnings per share from continuing operations (1)	$	0.21		$	0.13		62	%	$	0.39		$	0.34		15	%

** not meaningful

⁽¹⁾ Represents earnings per share based on the total weighted average shares outstanding (Class A and Class B combined) for the three and six months ended December 31, 2005 and 2004. Class A non-voting common stock (“Class A Common Stock”) carry rights to a greater dividend than Class B voting common stock (“Class B Common Stock”) through fiscal 2007. As such, net income available to the Company’s stockholders is allocated between our two classes of common stock, Class A Common Stock and Class B Common Stock. In fiscal 2008, Class A Common Stock cease to carry any rights to a greater dividend than Class B Common Stock.

Overview—The Company’s revenues increased 2% and 5%, for the three and six months ended December 31, 2005, respectively, as compared to the corresponding periods of fiscal 2005. The increases for the three and six months ended December 31, 2005 were primarily due to revenue increases at the Cable Network Programming, Television, Direct Broadcast Satellite Television and Other segments, which were offset by

51

revenue declines at the Filmed Entertainment segment. Increased revenues at the Newspapers segment also contributed to the revenue increase for the six months ended December 31, 2005 noted above.

Operating expenses were consistent for the three months ended December 31, 2005 with the corresponding period of fiscal 2005. Operating expenses for the six months ended December 31, 2005 increased approximately 3% from the corresponding period of fiscal 2005, primarily due to the Cable Network Programming and Newspaper segments, offset by reduced operating expenses at the Filmed Entertainment segment. The increased operating expenses at the Cable Network Programming segment were due to the consolidation of the Florida and Ohio Regional Sports Networks (“RSNs”), and the consolidation of Fox Sports Net, a national sports program service, in April 2005 and higher programming costs at the remaining RSNs and FX Network (“FX”). The increase at Newspapers segment was primarily due to the consolidation of Queensland Press Pty Ltd (“QPL”). The operating expense reduction at the Filmed Entertainment segment was due to reduced amortization of production and participation costs, as well as reduced home entertainment marketing and manufacturing costs.

Selling, general and administrative expenses increased approximately 4% and 8% for the three and six months ended December 31, 2005, respectively, from the corresponding periods of fiscal 2005, primarily due to the consolidation of the Florida and Ohio RSNs, Fox Sports Net and QPL. In addition, the impact of acquisitions at FIM also contributed to the increase in selling, general and administrative expenses during the three months ended December 31, 2005. Depreciation and amortization expense increased approximately 32% and 34% during the three and six months ended December 31, 2005, respectively, when compared to the corresponding periods of fiscal 2005, primarily due to accelerated depreciation recognized on printing plant assets in the United Kingdom and the amortization of intangible assets acquired on the purchase of the Fox Entertainment Group, Inc. minority interest in March 2005, as well as incremental expenses resulting from the acquisitions at FIM noted above.

During the three and six months ended December 31, 2005, Operating income decreased 4% and increased 6%, respectively, from the corresponding periods of fiscal 2005. The decrease in Operating income during the three months ended December 31, 2005, was primarily due to the $99 million redundancy provision recorded as an other operating charge during the period, at the Newspapers segment, for certain U.K. employees as a result of the Company committing to a reduction in workforce, which is associated with the development of a new printing plant in the United Kingdom. The redundancy provision more than offset the net improvements in revenues and expenses for the three months ended December 31, 2005, noted above. The increase during the six months was due to the changes in revenues and expenses noted above, which were partially offset by the $99 million redundancy provision, also noted above.

Interest expense, net—Interest expense, net, increased $4 million and $7 million for the three and six months ended December 31, 2005, respectively, as compared to the corresponding periods of fiscal 2005. These increases are due primarily to interest on the Company’s issuance of $1.75 billion in senior notes in December 2004 and $1.15 billion in senior notes in December 2005.

Equity earnings (losses) of affiliates—Net earnings from equity affiliates for the three and six months ended December 31, 2005 increased $112 million and $283 million, respectively, as compared to the corresponding periods of fiscal 2005. These improvements were primarily due to increased contributions from The DIRECTV Group (“DIRECTV”) and British Sky Broadcasting Group, plc (“BSkyB”) as a result of higher DBS subscribers and increased pricing, partially offset by the unfavorable impact from foreign currency fluctuations at Sky Brasil.

52

	For the three months ended December 31,								For the six months ended December 31,
	2005			2004			% Change		2005			2004			% Change
	(in millions, except %)
BSkyB	$	86		$	64		34	%	$	186		$	142		31	%
DIRECTV		19			(77	)	**			28			(177	)	**
Sky Brasil		(10	)		12		**			4			25		(84	)%
FOXTEL		(1	)		(7	)	86	%		(3	)		(14	)	79	%
Other equity affiliates		66			56		18	%		131			87		51	%
Total equity earnings of affiliates	$	160		$	48		**		$	346		$	63		**

** not meaningful

Other, net—Other, net for the three months ended December 31, 2005 was primarily comprised of $68 million of unrealized gains in fair value on the Company’s exchangeable securities, as compared to $86 million of unrealized losses included in the corresponding period of fiscal 2005. Other, net for the six months ended December 31, 2005 was primarily comprised of a $52 million gain on the sale of a cost method investment in China Netcom Group Corporation that occurred during the first quarter of fiscal 2006 and unrealized gains in fair value on the Company’s exchangeable securities of approximately $27 million. The three and six months ended December 31, 2004 included a $55 million loss on the sale of Sky Multi-Country Partners, partially offset by a $39 million gain on the sale of Rogers Sportsnet. The six months ended December 31, 2004 also included unrealized gains in fair value on the Company’s exchangeable securities of approximately $93 million.

Income tax expense—The effective tax rate for the three and six months ended December 31, 2005 was 29.2% and 34.1%, respectively. The effective tax rates for the fiscal 2006 periods are lower than the U.S. statutory rate primarily due to the positive impact of the Company’s application of the American Jobs Creation Act of 2004 (“AJCA”). The Company reflected a tax benefit of approximately $100 million relating to the AJCA primarily resulting from the reduction of prior tax accruals relating to the planned repatriation of foreign earnings at the lower rate of 5.25% under the AJCA.

The effective tax rate for the three months ended December 31, 2005 was lower than the effective tax rate of 36.8% for the corresponding period of fiscal 2005 due to the impact of the AJCA noted above. The effective tax rate for the six months ended December 31, 2005 was higher than the effective tax rate for the corresponding period of fiscal 2005 of 28.6% primarily due to the impact on the effective rate of the resolution of foreign income tax audits in September 2004.

Minority interest in subsidiaries, net of tax—Minority interest expense improved by $74 million and $100 million for the three and six months ended December 31, 2005, respectively, as compared to the corresponding periods of fiscal 2005. These improvements are primarily due to the acquisition of minority shareholders of Fox Entertainment Group, Inc. (“FEG”) in fiscal 2005.

Gain on disposition of discontinued operations, net of tax—In October 2005, the Company sold its TSL Education Ltd. division, which primarily included The Times Educational Supplement publication in the United Kingdom, to Exponent Private Equity for cash consideration of approximately $395 million. In connection with this transaction, the Company recorded a gain of $381 million, net of tax of $0, in Gain on disposition of discontinued operations in the unaudited consolidated statements of operations.

The provision for income taxes reported in discontinued operations of $0 differs from the amount computed using the statutory income tax rate, due to the tax being offset by a release of a valuation allowance that was applied to an existing deferred tax asset established for capital losses, which because of the TSL transaction can now be utilized. Therefore there is no resulting tax liability.

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Cumulative effect of accounting change, net of tax—Effective July 1, 2005, the Company adopted Emerging Issues Task Force Topic No. D-108 “Use of the Residual Method to Value Acquired Assets Other Than Goodwill” (“D-108”). D-108 requires companies who have applied the residual value method in the valuation of acquired identifiable intangibles for purchase accounting and impairment testing to now use a direct value method. As a result of the adoption, the Company recorded a charge of $1.6 billion ($1 billion net of tax, or ($0.32) per share of Class A Common Stock and ($0.27) per share of Class B Common Stock), to reduce the intangible balances attributable to its television stations’ FCC licenses. This charge has been reflected as a cumulative effect of accounting change, net of tax in the unaudited consolidated statements of operations.

Net income—Net income increased $689 million and decreased $369 million for the three and six months ended December 31, 2005, respectively, as compared to the corresponding periods of fiscal 2005. The improvement for the three months ended December 31, 2005 primarily reflects the gain on disposition of discontinued operations, an increase in equity earnings from affiliates, increased other income and lower minority interest expense, partially offset by the decrease in operating income. The decline for the six months ended December 31, 2005 primarily reflects the cumulative effect of accounting change, partially offset by the gain on disposition of discontinued operations, an increase in equity earnings from affiliates, lower minority interest expense and the increase in operating income.

Segment Analysis:

The following table sets forth the Company’s revenues and operating income by segment, for the three and six months ended December 31, 2005, as compared to the three and six months ended December 31, 2004.

	For the three months ended December 31,								For the six months ended December 31,
	2005			2004			% Change		2005			2004			% Change
	(in millions, except %)
Revenues:
Filmed Entertainment	$	1,607		$	1,872		(14	)%	$	3,026		$	3,249		(7	)%
Television		1,596			1,564		2	%		2,644			2,568		3	%
Cable Network Programming		810			624		30	%		1,585			1,224		29	%
Direct Broadcast Satellite Television		620			581		7	%		1,118			996		12	%
Magazines and Inserts		265			259		2	%		532			491		8	%
Newspapers		1,010			1,010		—			2,022			1,875		8	%
Book Publishing		390			377		3	%		781			741		5	%
Other		367			275		33	%		639			564		13	%
Total revenues	$	6,665		$	6,562		2	%	$	12,347		$	11,708		5	%
Operating (loss) income:
Filmed Entertainment	$	299		$	407		(27	)%	$	667		$	698		(4	)%
Television		183			153		20	%		343			387		(11	)%
Cable Network Programming		262			227		15	%		459			393		17	%
Direct Broadcast Satellite Television		(53	)		(105	)	50	%		(114	)		(226	)	50	%
Magazines and Inserts		76			73		4	%		152			137		11	%
Newspapers		69			184		(63	)%		194			302		(36	)%
Book Publishing		77			62		24	%		147			122		20	%
Other		7			(47	)	*	*		(19	)		(93	)	80	%
Total operating (loss) income	$	920		$	954		(4	)%	$	1,829		$	1,720		6	%

** not meaningful

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Filmed Entertainment (25% and 28% of the Company’s consolidated revenues in the first six months of fiscal 2006 and 2005, respectively)

For the three and six months ended December 31, 2005, revenues at the Filmed Entertainment segment decreased $265 million, or 14%, and $223 million, or 7%, respectively, as compared with the corresponding periods of fiscal 2005. These decreases are primarily due to worldwide home entertainment revenues, which declined 21% and 12% for the three and six months ended December 31, 2005, respectively, as compared to the corresponding periods of fiscal 2005 principally due to a lower number of releases in the current period. The three months ended December 31, 2005 included the worldwide home entertainment releases of Fantastic Four, Kingdom of Heaven, 24 and Family Guy and two distribution releases, Star Wars Episode III: Revenge of the Sith and Mr. & Mrs. Smith. The three months ended December 31, 2004 had a higher volume of releases, including The Day After Tomorrow, I, Robot, Garfield, Dodgeball and Napoleon Dynamite and the catalog performance of the Star Wars Trilogy. Partially offsetting the decrease in worldwide home entertainment revenues in the second quarter of fiscal 2006 was an increase in domestic theatrical revenue attributed principally to the releases of Walk the Line, The Family Stone, Cheaper by the Dozen 2 and The Ringer, as compared to the releases of Sideways, Kinsey, Taxi, Flight of the Phoenix and Fat Albert in the second quarter of fiscal 2005. Domestic theatrical revenues for the six months ended December 31, 2005 were consistent with domestic theatrical revenues for the first half of fiscal 2005.

Home entertainment revenues generated from the sale and distribution of film and television titles in the three months ended December 31, 2005 were 70% and 30%, respectively, and in the six months ended December 31, 2005 were 73% and 27%, respectively.

For the three and six months ended December 31, 2005, the Filmed Entertainment segment Operating income decreased $108 million, or 27%, and $31 million, or 4%, respectively, as compared to the corresponding periods of fiscal 2005. These reductions were due to lower home entertainment revenue, as noted above, and higher theatrical releasing costs, partially offset by lower amortization of production and participation costs directly associated with the decrease in revenues noted above.

Television (21% and 22% of the Company’s consolidated revenues in the first six months of fiscal 2006 and 2005, respectively)

For the three and six months ended December 31, 2005, the Television segment reported revenue increases of $32 million, or 2%, and $76 million, or 3%, respectively, as compared to the corresponding periods of fiscal 2005. For the three and six months ended December 31, 2005, the Television segment reported an increase of $30 million, or 20%, and a decrease of $44 million, or 11%, in Operating income, respectively, from the corresponding periods of fiscal 2005.

Revenues at the Company’s U.S. television operations increased for the three and six months ended December 31, 2005 as compared to the corresponding prior year periods. Advertising revenues increased as a result of higher prime time ratings versus fiscal 2005. Operating Income at the Company’s U.S. television operations for the three months ended December 31, 2005 increased approximately 24% from the second quarter of fiscal 2005. This is attributable to a decrease in operating expenses in the second quarter of fiscal 2006 as compared to the second quarter of fiscal 2005 due to the timing of off-air media costs relating to the earlier launch of the fall prime time line-up on FOX as compared to fiscal 2005. Operating income for the Company’s U.S. television operations for the six months ended December 31, 2005 decreased by approximately 10% as compared to the corresponding period of fiscal 2005. Expenses increased for the first half of fiscal 2006 as compared to the corresponding period of fiscal 2005 due to higher programming costs for returning series and local news expansions and new sports programming on the Company’s UPN stations.

Revenues for the three and six months ended December 31, 2005 at the Company’s international television operations increased over the corresponding periods of fiscal 2005. These increases were primarily driven by

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higher advertising and subscription revenues from India. Operating income for the Company’s international television operations increased for the three and six months ended December 31, 2005 over the corresponding periods of fiscal 2005, primarily driven by increased revenues, as noted above, which were partially offset by increased programming costs associated with the launch of new channels and programming.

Cable Network Programming (13% and 10% of the Company’s consolidated revenues in the first six months of fiscal 2006 and 2005, respectively)

For the three and six months ended December 31, 2005, revenues for the Cable Network Programming segment increased $186 million, or 30%, and $361 million, or 29%, respectively, as compared to the corresponding periods of fiscal 2005. For the second quarter of fiscal 2006, Fox News Channel’s (“Fox News”), the FX’s and the RSNs’ revenues increased 12%, 23% and 38%, respectively, from the second quarter of fiscal 2005. For the first half of fiscal 2006, Fox News’, FX’s and the RSNs’ revenues increased 14%, 21% and 34%, respectively, from the corresponding fiscal 2005 period.

Fox News’ advertising revenue increased 7% and 12% for the three and six months ended December 31, 2005, respectively, primarily driven by higher pricing and higher volume. Net affiliate revenue increased 7% and 8% for the three and six months ended December 31, 2005, respectively, as a result of increases in subscribers and average rates per subscriber from the corresponding periods of fiscal 2005. As of December 31, 2005, Fox News reached approximately 88 million Nielsen households.

FX’s advertising revenues increased 27% and 25% for the three and six months ended December 31, 2005, respectively, as compared to the corresponding periods of fiscal 2005. The increases were driven by higher pricing and higher volume in the quarter, as well as higher volume in the first half of fiscal 2006 as compared to the respective periods of fiscal 2005. For the three and six months ended December 31, 2005, net affiliate revenue increased 19% and 18%, respectively, as compared to the corresponding periods of fiscal 2005, reflecting an increase in average rates per subscriber and DBS subscribers. As of December 31, 2005, FX reached approximately 87 million Nielsen households, a 3% increase over the corresponding period of fiscal 2005.

RSNs’ advertising revenues increased 24% and 29% for the three and six months ended December 31, 2005, respectively, as compared to the corresponding periods of fiscal 2005. These increases were primarily due to the consolidation of the Florida and Ohio RSNs acquired in April 2005 and the resumption of NHL games in the second quarter of fiscal 2006 after the cancellation of the 2004-05 National Hockey League (“NHL”) season. In addition, there was an increase in MLB events in the six months ended December 31, 2005 as compared to the corresponding period of fiscal 2005. Affiliate revenues increased 41% and 35% for the three and six months ended December 31, 2005, respectively, as compared to the corresponding periods of fiscal 2005. These increases are primarily due to the consolidation of the Florida and Ohio RSNs, the absence of allowances recorded in the prior year related to the cancellation of the 2004-05 NHL season, an increase in DBS subscribers and higher average rates per subscriber.

The Cable Network Programming segment Operating income increased $35 million, or 15%, and $66 million, or 17% for the three and six months ended December 31, 2005, respectively, as compared to the corresponding periods of fiscal 2005. These improvements were primarily driven by the revenue increases noted above, partially offset by higher programming expenses. Programming expenses increased primarily due to the consolidation of the Florida and Ohio RSNs and Fox Sports Net in April 2005 and the programming costs associated with the resumption of NHL games after the cancellation of the 2004-05 season. Also contributing to this increase were newly acquired series and more original programming at FX. In addition, for the first half of fiscal 2006, marketing expenses increased at FX due to increased promotion costs for its new original series as well as returning shows in the first quarter of fiscal 2006.

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Direct Broadcast Satellite Television (9% of the Company’s consolidated revenues in the first six months of fiscal 2006 and 2005)

For the three and six months ended December 31, 2005, SKY Italia revenues increased $39 million, or 7%, and $122 million, or 12%, respectively, as compared to the corresponding periods of fiscal 2005. During the three and six months ended December 31, 2005, the strengthening of the U.S. dollar resulted in decreases of approximately 7% and 4% of revenues, respectively, and 8% and 4% of operating results, respectively, as compared to the corresponding periods of fiscal 2005. This revenue growth was primarily driven by an increase of approximately 500,000 subscribers over the corresponding period of fiscal 2005. During the second quarter of fiscal 2006, SKY Italia added 200,000 net subscribers, which resulted in SKY Italia’s subscriber base totaling 3.6 million at December 31, 2005. The total churn in the second quarter of fiscal 2006 was approximately 70,000 subscribers on an average subscriber base of 3.5 million as compared to churn of approximately 70,000 subscribers on an average subscriber base of 3 million in the corresponding period of fiscal 2005. Subscriber churn for the period represents the number of SKY Italia subscribers whose service is disconnected during the period. The total churn for the six months ended December 31, 2005 was approximately 186,000 on an average subscriber base of 3.5 million as compared to churn of approximately 150,000 subscribers on an average subscriber base of 2.9 million in the corresponding period of fiscal 2005.

Average revenue per subscriber (“ARPU”) for the three and six months ended December 31, 2005 was approximately €45 and approximately €41, respectively, which is consistent with the ARPU for the corresponding periods of fiscal 2005. SKY Italia calculates ARPU by dividing total subscriber-related revenues for the period by the average subscribers for the period and dividing that amount by the number of months in the period. Subscriber-related revenues are comprised of total subscription revenue, pay-per-view revenue and equipment rental revenue for the period. Average subscribers are calculated for the period by adding the beginning and ending subscribers for the period and dividing by two.

Subscriber acquisition costs per subscriber (“SAC”) increased from approximately €245 in the second quarter of fiscal 2005 to approximately €275 in the second quarter of fiscal 2006 due to higher costs associated with the free installation offer for new subscribers. SAC is calculated by dividing total subscriber acquisition costs for a period by the number of gross SKY Italia subscribers during the period. Subscriber acquisition costs include the cost of the commissions paid to retailers and other distributors, the cost of equipment sold directly by SKY Italia to subscribers and the costs related to installation and acquisition advertising, net of any upfront activation fee. SKY Italia excludes the value of equipment capitalized under SKY Italia’s equipment lease program as well as payments and the value of returned equipment related to disconnected lease program subscribers from subscriber acquisition costs.

For the three and six months ended December 31, 2005, operating losses at SKY Italia improved by $52 million, or 50%, and $112 million, or 50%, as compared to the corresponding periods of fiscal 2005. These improvements were primarily due to the revenue increases noted above, partially offset by higher operating expenses as a result of the increased volume and higher selling expenses due to higher new subscriber selection of the free installation offer and a $12 million charge resulting from an arbitration settlement on certain programming rights.

Magazines and Inserts (4% of the Company’s consolidated revenues in the first six months of fiscal 2006 and 2005)

For the three and six months ended December 31, 2005 revenues at the Magazines and Inserts segment increased $6 million, or 2%, and $41 million, or 8%, as compared to the corresponding periods of fiscal 2005, respectively. The increase in the three months ended December 31, 2005 primarily resulted from an increase in the Company’s In-Store advertising business due to higher demand for its In-Store shelf advertising products in supermarkets, partially offset by lower volume and revenue rates in the free standing insert division. For the six months ended December 31, 2005, volume increases in the free standing inserts division, as well as an increase in demand for the Company’s In-Store shelf products resulted in an increase in revenues as compared to the first half of fiscal 2005.

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Operating income for the three and six months ended December 31, 2005 increased $3 million, or 4%, and $15 million, or 11%, as compared to the corresponding periods of fiscal 2005, respectively. The increases were primarily due to volume increases at the In-Store advertising business, partially offset by the lower revenue rates in the free standing insert division, as noted above.

Newspapers (16% of the Company’s consolidated revenues in the first six months of fiscal 2006 and 2005)

The Newspapers segment revenues remained consistent for the three months ended December 31, 2005 as compared to the corresponding period of fiscal 2005 and increased $147 million, or 8%, for the six months ended December 31, 2005 as compared to the corresponding period of fiscal 2005. For the three and six months ended December 31, 2005, Operating income decreased $115 million, or 63%, and $108 million, or 36%, respectively, from the corresponding periods of fiscal 2005. During the three months ended December 31, 2005, the strengthening of the U.S. dollar resulted in decreases of approximately 3% and 4% in revenues and operating income, respectively, as compared to the corresponding period of fiscal 2005. The value of the U.S. dollar during the six months ended December 31, 2005, was consistent with that of the corresponding period of fiscal 2005.

For the three and six months ended December 31, 2005, U.K. newspapers’ revenues decreased 5% and 10%, respectively, as compared to the corresponding periods of fiscal 2005. For the three and six months ended December 31, 2005, U.K. newspapers’ advertising revenues decreased from the corresponding periods of fiscal 2005 as a result of a general weakness in the U.K. advertising market. Circulation revenues increased over the corresponding periods of fiscal 2005 due to cover price increases across all titles and higher net circulation on The Sun and The Times as a result of promotional activities. Operating income at the U.K. newspapers decreased 32% and 44% for the three and six months ended December 31, 2005, respectively, as compared to the corresponding periods of fiscal 2005. The decreases are principally due to increased depreciation and other costs associated with the development of new printing plants in the United Kingdom and a $99 million redundancy provision recorded in the second quarter of fiscal 2006 for certain U.K. production employees as a result of the Company committing to reduction in workforce expected to occur in fiscal 2007 and 2008. The Company expects annualized personnel cost savings of approximately $65 million when the U.K. workforce reduction is completed. Also contributing to the decrease in operating income were increased promotional costs on The Sun, The Times and The News of the World and higher newsprint costs.

For the three and six months ended December 31, 2005, the Australian newspapers’ revenues increased 12% and 26%, respectively, as compared to the corresponding periods of fiscal 2005. The increases during the three and six months ended December 31, 2005 are primarily due to the consolidation of the results of QPL beginning in November 2004. Improved display and classified advertising revenues also contributed to the increase during the six months ended December 31, 2005 as compared to the corresponding period of fiscal 2005. The advertising revenue increase during the six months ended December 31, 2005 was driven by the continued stable economic conditions in Australia and new sales initiatives, resulting in gains in national and classified advertising. The Australian newspapers Operating income increased 9% and 29%, respectively, for the three and six months ended December 31, 2005 as compared to the corresponding periods of fiscal 2005 primarily due to the revenue increases noted above offset by increased personnel and promotional costs.

Book Publishing (6% of the Company’s consolidated revenues in the first six months of fiscal 2006 and 2005)

For the three and six months ended December 31, 2005, revenues at HarperCollins increased $13 million, or 3%, and $40 million, or 5%, from the corresponding periods of fiscal 2005, respectively. These increases are primarily attributable to more bestsellers in the quarter and the strength of The Chronicles of Narnia series in the Childrens divisions. During the three months ended December 31, 2005, HarperCollins had 43 titles on the New York Times Bestseller List with five titles reaching the number one position. During the six months ended December 31, 2005, HarperCollins had 66 titles on the New York Times Bestseller List with ten reaching the number one position.

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Operating income for the three and six months ended December 31, 2005 increased $15 million, or 24%, and $25 million, or 20%, from the corresponding periods of fiscal 2005, respectively, primarily due to the revenue increases noted above.

Other (5% of the Company’s consolidated revenues in the first six months of fiscal 2006 and 2005)

For the three and six months ended December 31, 2005, revenues at the Other segment increased $92 million, or 33%, and $75 million, or 13%, respectively, as compared to the corresponding periods of fiscal 2005. The increases were primarily driven by incremental revenues from FIM as the Company acquired Intermix Media, Inc. and Scout Media, Inc. in September 2005 and IGN Entertainment, Inc. in October 2005.

For the three and six months ended December 31, 2005, Operating results improved $54 million and $74 million, respectively, as compared to the corresponding periods of fiscal 2005. The prior year results included reorganization costs in connection with the Company’s incorporation in the United States. Also contributing to the three and six months ended December 31, 2005 improvements, was higher operating profit from News Outdoor.

Liquidity and Capital Resources

Current Financial Condition

The Company’s principal source of liquidity is internally generated funds; however, the Company has access to the worldwide capital markets, a $1.75 billion revolving credit facility and various film financing alternatives to supplement its cash flows. The availability under the revolving credit facility as of December 31, 2005 was reduced by letters of credit issued which totaled $166 million. As of December 31, 2005, the Company had consolidated cash and cash equivalents of approximately $5.2 billion. The Company believes that cash flows from operations will be adequate for the Company to conduct its operations. The Company’s internally generated funds are highly dependent upon the state of the advertising market and public acceptance of film and television products. Any significant decline in the advertising market or the performance of its films could adversely impact its cash flows from operations which could require the Company to seek other sources of funds including proceeds from the sale of certain assets or other alternative sources.

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

Sources and uses of cash

Net cash provided by operating activities for the six months ended December 31, 2005 and 2004 was as follows (in millions):

For the six months ended December 31,	2005		2004
Net cash provided by operating activities	$	461	$	980

The decrease in net cash provided by operating activities primarily reflects the timing of the sale of home entertainment product and related lower cash collections, higher film and television production spending at the Filmed Entertainment segment and higher sports rights payments during the six months ended December 31, 2005.

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Net cash used in investing activities for the six months ended December 31, 2005 and 2004 was as follows (in millions):

For the six months ended December 31,	2005			2004
Property, plant and equipment	$	(412	)	$	(425	)
Acquisitions, net of cash acquired		(1,576	)		(114	)
Investments in equity affiliates		(29	)		(61	)
Other investments		(40	)		(30	)
Proceeds from sale of investments and other non-current assets		115			544
Proceeds from disposition of discontinued operations		395			—
Net cash used in investing activities	$	(1,547	)	$	(86	)

Cash used in investing activities during the six months ended December 31, 2005 was higher than the corresponding period of fiscal 2005 primarily due to the acquisitions of Intermix Media, Inc. and IGN Entertainment, Inc. that occurred during the first half of fiscal 2006. The cash used in investing activities during the six months ended December 31, 2005 was partially offset by proceeds received from the disposition of discontinued operations as the Company sold its TSL Education Ltd. division to Exponent Private Equity for approximately $395 million in cash consideration in October 2005.

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

In fiscal 2005, the Company announced its intentions to invest in new printing plants in the United Kingdom and Australia to take advantage of technological and market changes. The Company intends to invest approximately $1 billion in the United Kingdom on printing plants for The Sun, the News of the World, The Times and The Sunday Times and $500 million for Australian printing plants. The Company plans to fully fund the investment out of its operating cash flow. Depreciation expense on plant and equipment that will be replaced will be accelerated over the next four to five years.

Net cash (used in) provided by financing activities for the six months ended December 31, 2005 and 2004 was as follows (in millions):

For the six months ended December 31,	2005			2004
Borrowings	$	1,149		$	1,755
Repayment of borrowings		(7	)		(1,829	)
Cash on deposit		—			275
Issuance of shares		73			37
Repurchase of shares		(1,067	)		—
Dividends paid		(241	)		(121	)
Net cash (used in) provided by financing activities	$	(93	)	$	117

Net cash used in financing activities during the six months ended December 31, 2005 changed from net cash provided by financing activities in the corresponding period of fiscal 2005 primarily due to the implementation of the stock repurchase program, offset by an increase in net borrowings in the first half of 2006 as compared to the first half of fiscal 2005.

Borrowings	2005
Notes due 2035	$	1,133
All other		16
	$	1,149

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In December 2005, the Company issued approximately $1,150 million of 6.40% Senior Notes due 2035. The Company received proceeds of $1,133 million on the issuance of this debt, net of expenses. These notes are issued under the Amended and Restated Indenture, dated as of March 24, 1993, as supplemented, among News America Incorporated, the Company and the subsidiary guarantors named therein and The Bank of New York, as Trustee.

LYONs

The Company’s Liquid Yield Option Notes (“LYONs^™”) pay no interest and have an aggregate principal amount at maturity of $1,515 million representing a yield of 3.5% per annum on the issue price. The holders may exchange the notes at any time into Class A Common Stock or, at the option of the Company, the cash equivalent thereof at a fixed exchange rate of 24.2966 shares of Class A Common Stock per $1,000 note. The notes are redeemable at the option of the holders on February 28, 2006, February 28, 2011 and February 28, 2016 at a price of $594.25, $706.82 and $840.73, respectively. The Company, at its election, may satisfy the redemption amounts in cash, Class A Common Stock or any combination thereof. The Company has given notice to holders that any notes tendered on February 28, 2006 will be redeemed for cash at the specified redemption amounts. The Company expects the holders of the LYONs will exercise their redemption right on February 28, 2006 and the Company currently expects to satisfy this redemption by paying cash. If all of the outstanding LYONs are redeemed, the cash amount paid by the Company on February 28, 2006, will be approximately $900 million.

Other

The Company’s $200 million, 8.45% Senior Debentures due August 2034 may be put at the option of the holder to the Company in August 2006 at par. Additionally, the Company’s $240 million, 7.43% Senior Debentures due October 2026 may be put at the option of the holder to the Company in October 2006 at par. These debentures are currently trading significantly above par and the Company believes that under the current low U.S. interest rate environment the debentures will not be put to the Company. Accordingly, the Company does not currently believe that these borrowings will impact the Company’s liquidity in the next twelve months.

Ratings of the Public Debt

The table below summarizes the Company’s credit ratings as of December 31, 2005.

Rating Agency	Senior Debt	Outlook
Moody’s	Baa 2	Stable
Standard & Poor’s	BBB	Stable

Revolving Credit Agreement

On June 27, 2003, News America Incorporated (“NAI”), a subsidiary of the Company, entered into a $1.75 billion Five Year Credit Agreement (the “Credit Agreement”) with Citibank N.A., as administrative agent, JP Morgan Chase Bank, as syndication agent, and the lenders named therein. News Corporation, FEG Holdings, Inc., Fox Entertainment Group, Inc., News America Marketing FSI, LLC, News Publishing Australia Limited and News Australia Holdings Pty Limited are guarantors (the “Guarantors”) under the Credit Agreement. The Credit Agreement provides a $1.75 billion revolving credit facility with a sub-limit of $600 million available for the issuance of letters of credit, and expires on June 30, 2008. Borrowings are in U.S. dollars only, while letters of credit are issuable in U.S. dollars or Euros. The significant terms of the Credit Agreement include the requirement that the Company maintain specific gearing and interest coverage ratios and limitations on secured indebtedness. The Company pays a facility fee of 0.15% regardless of facility usage. The Company pays interest of a margin over LIBOR for borrowings and a letter of credit fee of 0.60%. The Company is subject to additional fees of 0.125% if borrowings under the facility exceed 25% of the committed facility. The interest and fees are based on the Company’s current debt rating. At December 31, 2005, letters of credit representing $166 million were issued under the Credit Agreement.

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Commitments

As a result of the FIM acquisitions that occurred in September and October 2005, the Company has commitments under certain contractual arrangements to make future payments of up to a maximum of $135 million as of December 31, 2005. These commitments are comprised of operating leases, capital expenditures and contractual employee obligations.

In December 2005, the Company signed a new broadcast rights agreement with NASCAR for certain races and exclusive rights for certain ancillary content for an eight year term, commencing in calendar year 2007 in the amount of $1.7 billion.

Other than noted above, the Company’s commitments have not changed significantly from disclosures included in the Company’s Annual Report Form 10-K for the fiscal year ended June 30, 2005 filed with the SEC on September 1, 2005.

Guarantees

The Company’s guarantees have not changed significantly from disclosures included in the Company’s Annual Report Form 10-K for the fiscal year ended June 30, 2005 filed with the SEC on September 1, 2005.

Contingencies

The Company is party to several purchase and sale arrangements, which become exercisable over the next ten years by the Company or the counter-party to the agreement. Total contingent receipts/payments under these agreements (including cash and stock) have not been included in the Company’s financial statements.

The Company currently has one significant arrangement that is exercisable. The Company’s wholly-owned subsidiary, News Out of Home owns and operates outdoor advertising companies located in Eastern Europe and also owns 68% of Media Support Services Limited, an outdoor advertising company with operating subsidiaries located in Russia. The minority stockholders of Media Support Services Limited currently have the right to sell their interests to News Out of Home. The Company believes that none of the purchase and sale arrangements expected to take place in the next twelve months will have a material effect on its consolidated financial condition, future results of operations or liquidity.

The Company experiences routine litigation in the normal course of its business. The Company believes that none of its pending litigation will have a material adverse effect on its consolidated financial condition, future results of operations or liquidity.

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

Risk Factors

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

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

The Company derives substantial revenues from the sale of advertising on its television stations, broadcast and cable networks, newspapers and inserts and DBS television services. Expenditures by advertisers tend to be cyclical, reflecting overall economic conditions, as well as budgeting and buying patterns. A decline in the economic prospects of advertisers or the economy in general could alter current or prospective advertisers’

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spending priorities. This could cause the Company’s revenues and operating results to decline significantly in any given period or in specific markets. Rating points for the Company’s television stations and broadcast and cable networks are also factors that are weighed when deciding on the advertising rates and the renegotiation of affiliate rates that the Company receives. Poor ratings can lead to a reduction in pricing and advertising spending. In addition, newer technologies, including video-on-demand, personal video recorders and other devices that allow users to view television or motion pictures from a remote location or on a time-delayed basis, and technologies which implement the ability for users to fast-forward, rewind, pause and skip programming may cause changes in consumer behavior that could affect the attractiveness of the Company’s offerings to viewers, advertisers and/or distributors and could, therefore, have an adverse effect on the Company’s businesses.

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

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

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

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

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

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

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

The Company seeks to limit the threat of content piracy and DBS programming signal theft; however, policing unauthorized use of the Company’s products and services and related intellectual property is often difficult and the

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

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

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

Provisions in the Company’s Corporate Documents, Delaware Law and the Ownership of the Company’s Class B Common Stock by Certain Principal Stockholders Could Delay or Prevent a Change of Control of News Corporation, Even if That Change Would be Beneficial to the Company’s Stockholders.

The existence of some provisions in the Company’s corporate documents could delay or prevent a change of control of News Corporation, even if that change would be beneficial to the Company’s stockholders. The Company’s Restated Certificate of Incorporation and Amended and Restated By-laws, contain provisions that may make acquiring control of News Corporation difficult, including:

• provisions relating to the classification, nomination and removal of directors;

• a provision prohibiting stockholder action by written consent;

• provisions regulating the ability of the Company’s stockholders to bring matters for action before annual and special meetings of the Company’s stockholders; and

• the authorization given to the Company’s Board of Directors to issue and set the terms of preferred stock.

In addition, the Company has also adopted a stockholder rights plan, which would cause extreme dilution to any person or group that attempts to acquire a significant interest in the Company without advance approval of its Board of Directors. Further, as a result of Mr. K. Rupert Murdoch’s ability to appoint certain members of the board of directors of the corporate trustee of the A.E. Harris Trust, which beneficially owns 2.7% of the Company’s Class A Common Stock and 29.4% of its Class B Common Stock, Mr. K. Rupert Murdoch may be deemed to be a beneficial owner of the shares beneficially owned by the A.E. Harris Trust. Mr. K. Rupert Murdoch, however, disclaims any beneficial ownership of those shares. Also, Mr. K. Rupert Murdoch beneficially owns an additional 0.7% of the Company’s Class A Common Stock and 1.1% of its Class B Common Stock. Thus, Mr. K. Rupert Murdoch may be deemed to beneficially own in the aggregate 3.4% of the Company’s Class A Common Stock and 30.5% of its Class B Common Stock.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

News Corporation has exposure to several types of market risk: changes in foreign currency exchange rates, interest rates and stock prices. The Company neither holds nor issues financial instruments for trading purposes. The following sections provide quantitative information on the Company’s exposure to foreign currency exchange rate risk, interest rate risk and stock price risk. It makes use of sensitivity analyses that are inherently limited in estimating actual losses in fair value that can occur from changes in market conditions.

Foreign Currency Exchange Rates

News Corporation conducts operations in four principal currencies: the U.S. dollar, the British pound sterling, the Australian dollar and the Euro. These currencies operate as the functional currency for the Company’s U.S., U.K., Australian and Italian operations, respectively. Cash is managed centrally within each of the four regions with net earnings reinvested locally and working capital requirements met from existing liquid funds. To the extent such funds are not sufficient to meet working capital requirements, drawdowns in the appropriate local currency are available either under the Credit Agreement or from intercompany borrowings. Since earnings of the Company’s Australian and European operations are expected to be reinvested in those businesses indefinitely (excluding amounts that have been or will be repatriated under the American Jobs Creation Act), the Company does not hedge its investment in the net assets of those foreign operations.

At December 31, 2005, the Company’s outstanding financial instruments with foreign currency exchange rate risk exposure had an aggregate fair value of $95 million (including the Company’s non-U.S. dollar-denominated fixed rate debt). The potential increase in the fair values of these instruments resulting from a 10% adverse change in quoted foreign currency exchange rates would be approximately $22 million at December 31, 2005.

Interest Rates

The Company’s current financing arrangements and facilities include $12.2 billion of outstanding debt which is substantially fixed interest and the Credit Agreement, which carries variable interest. Fixed and variable rate debts are impacted differently by changes in interest rates. A change in the interest rate or yield of fixed rate debt will only impact the fair value of such debt, while a change in the interest rate of variable debt will impact interest expense, as well as the amount of cash required to service such debt. As of December 31, 2005, substantially all of the Company’s financial instruments with exposure to interest rate risk was denominated in U.S. dollars and had an aggregate fair value of $13.2 billion. The potential change in fair value for these financial instruments from an adverse 10% change in quoted interest rates across all maturities, often referred to as a parallel shift in the yield curve, would be approximately $557 million at December 31, 2005.

Stock Prices

The Company has common stock investments in several publicly traded companies that are subject to market price volatility. These investments principally represent the Company’s equity affiliates and have an aggregate fair value of approximately $14,034 million as of December 31, 2005. A hypothetical decrease in the market price of these investments of 10% would result in a fair value of approximately $12,631 million. Such a hypothetical decrease would result in a decrease in comprehensive income of approximately $7 million, as any changes in fair value of the Company’s equity affiliates are not recognized unless deemed other-than-temporary, as these investments are accounted for under the equity method.

In accordance with SFAS No. 133, the Company has recorded the conversion feature embedded in its exchangeable debentures in other liabilities. At December 31, 2005, the fair value of this conversion feature is $130 million and is sensitive to movements in the share price of one of the Company’s publicly traded equity affiliates. A 10% increase in the price of the underlying stock, holding other factors constant, would increase the fair value of the call option by approximately $32 million.

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PART I

ITEM 4. CONTROLS AND PROCEDURES

(a) Disclosure Controls and Procedures

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

(b) Internal Control Over Financial Reporting

There have not been any changes in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15(d)-15(f) under the Exchange Act) during the Company’s second quarter of fiscal 2006 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II

ITEM 1. LEGAL PROCEEDINGS

See Note 11 to the unaudited consolidated financial statements, which is incorporated by reference.

ITEM 1A. RISK FACTORS

See “Risk Factors” beginning on page 62, which is incorporated by reference.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

In June 2005, the Company announced a stock repurchase program under which the Company is authorized to acquire from time to time up to an aggregate of $3 billion in Class A Common Stock and Class B Common Stock.

Below is a summary of the Company’s purchases of its Class A Common Stock and Class B Common Stock during the three months ended December 31, 2005:

	Total Number of Shares Purchased	Average Price per Share	Total Cost of Purchase
			(in millions)
Common Stock—October Class A	13,416,600	15.19		204
Common Stock—November Class A	10,239,500	14.86		152
Common Stock—November Class B	5,732,200	15.40		88
Common Stock—December Class A	13,067,100	15.61		204
Common Stock—December Class B	12,606,558	16.34		206
Total	55,061,958		$	854

The remaining authorized amount at December 31, 2005, excluding commissions under the Company’s stock repurchase program is approximately $1.4 million.

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ITEM 3. DEFAULTS UPON SENIOR SECURITIES

Not applicable.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

The Company held its Annual Meeting of Stockholders (the “Annual Meeting”) on October 21, 2005. A brief description of the matters voted upon at the Annual Meeting and the results of the voting on such matters is set forth below.

Proposal 1: The following individuals were elected as Class III Directors:

Name	For	Withheld
Chase Carey	680,091,445	119,986,760
Peter Chernin	694,227,697	108,385,267
Roderick I. Eddington	672,506,004	122,577,461
Andrew S.B. Knight	679,401,096	118,211,977

Proposal 2: A proposal to ratify the selection of Ernst & Young LLP as the Company’s independent registered public accounting firm for the fiscal year ending June 30, 2006 was voted upon as follows:

For:	811,995,582
Against:	4,148,804
Abstain:	1,430,258

Proposal 3: A proposal to approve the issuance of shares of Class A Common Stock to the A.E. Harris Trust, in lieu of cash, pursuant to an amendment to an agreement relating the Company’s reincorporation to the United States in November 2004 was voted upon as follows:

For:	457,860,038
Against:	18,039,072
Abstain:	309,762,584

Proposal 4: A proposal to approve an increase in the aggregate annual limit on the amount of fees paid to Non-Executive Directors was voted upon as follows:

For:	333,095,873
Against:	143,686,516
Abstain:	309,488,153

ITEM 5. OTHER INFORMATION

Not applicable.

ITEM 6. EXHIBITS

(a) Exhibits.

4.1	Form of Notes representing $1.15 billion principal amount of 6.40% Senior Notes due 2035 and Officers’ Certificate of News Corporation relating thereto, dated December 23, 2005, pursuant to Section 301 of the Amended and Restated Indenture, dated as of March 24, 1993, as supplemented, among the Company and the subsidiary guarantors named therein and The Bank of New York, as Trustee.*
4.2	Registration Rights Agreement, dated December 23, 2005, by and among News America Incorporated, the Guarantors listed therein and Citigroup Global Markets Inc.*

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4.3	Tenth Supplemental Indenture, dated as of March 14, 2005, by and among News America Incorporated, the guarantors named therein and the Bank of New York, as Trustee, with respect to senior debt securities.*
4.4	Eleventh Supplemental Indenture, dated as of March 21, 2005, by and among News America Incorporated, the guarantors named therein and the Bank of New York, as Trustee, with respect to senior debt securities.*
10.1	Non-Executive Director Compensation Summary Sheet.*
10.2	Amended and Restated Employment Agreement, effective as of August 15, 2005, between News America Incorporated and Roger Ailes.1
12.1	Ratio of Earnings to Fixed Charges *
31.1	Chairman and Chief Executive Officer Certification required by Rules 13a-14 and 15d-14 under the Securities Exchange Act of 1934, as amended.*
31.2	Chief Financial Officer Certification required by Rules 13a-14 and 15d-14 under the Securities Exchange Act of 1934, as amended.*
32.1	Certification of Chairman and Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of Sarbanes Oxley Act of 2002.*

* Filed herewith.

¹ Incorporated by reference to exhibit 10.1 to the Current Report of News Corporation on Form 8-K (File No. 001-32352) filed with the Securities and Exchange Commission of December 20, 2005.

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SIGNATURE

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

NEWS CORPORATION (Registrant)
By:	/S/    DAVID F. DEVOE
	David F. DeVoe Senior Executive Vice President and Chief Financial Officer

Date: February 8, 2006

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EX-4.1

Exhibit 4.1

FORM OF 6.400% SENIOR NOTE

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), NEW YORK, NEW YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC) ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE.

THE NOTES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933 (THE “SECURITIES ACT”) AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A)(1) TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (2) IN AN OFFSHORE TRANSACTION COMPLYING WITH RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (3) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE), (4) TO AN INSTITUTIONAL ACCREDITED INVESTOR IN A TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OR (5) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (B) IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED STATES AND OTHER JURISDICTIONS.

**$                    **

NEWS AMERICA INCORPORATED

6.400% SENIOR NOTES DUE DECEMBER 15, 2035

CUSIP 652482 BK 5

see reverse for certain definitions

NEWS AMERICA INCORPORATED, a Delaware corporation (“NAI” or the “Company”, which terms include any successor Person under the Indenture hereinafter referred to), for value received, hereby promises to pay to

**CEDE & CO.**

or registered assigns;

the principal amount of **                                                           DOLLARS**

on December 15, 2035 and to pay interest thereon from December 23, 2005 or from the most recent Interest Payment Date to which interest has been paid or duly provided for, semi-annually on June 15, and December 15 of each year, commencing June 15, 2006, at the rate of 6.40% per annum, until the principal hereof is fully paid or made available for payment. The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in the Indenture, be paid to the Person in whose name this Note (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date, which shall be the June 1 or December 1 (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date. Any such interest not so punctually paid or duly provided for will forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to the Person in whose name this Note (or one or more Predecessor Securities) is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to Holders of Notes not less than 10 days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Note may be listed, and upon such notice as may be required by such exchange, all as more fully provided in such Indenture.

This Note is unconditionally guaranteed by News Corporation, a Delaware corporation (“News Corporation”), and the other Guarantors listed herein, as set forth in Article Twelve of the Indenture and in the Guarantee endorsed hereon. The Guarantors other than News Corporation may change from time to time pursuant to the terms of the Indenture.

Payment of the principal of, and interest on, this Note will be made at the offices or agencies of the Company maintained for that purpose in The City of New York, New York in such coin or currency of the United States of America as at the time of payment is legal tender

for payment of public debts; provided, however, that, at the option of the Company, payment of interest may be made by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register or by wire transfer to an account maintained by the Person entitled thereto as specified in the Security Register.

Reference is hereby made to the further provisions of this Note set forth herein which further provisions shall for all purposes have the same effect as if set forth at this place.

Unless the certificate of authentication hereon has been executed by the Trustee referred to herein by manual signature, this Note shall not be entitled to any benefit under the Indenture, or be valid or obligatory for any purpose.

IN WITNESS WHEREOF, NAI has caused this Note to be signed manually or by facsimile by its duly authorized officers and a facsimile of its corporate seal to be affixed hereto or imprinted hereon.

Dated: December 23, 2005

NEWS AMERICA INCORPORATED
By:		By:
	Secretary		Authorized Signatory

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

This is one of the Securities referred

to in the within-mentioned Indenture

THE BANK OF NEW YORK, as Trustee

By:
	Authorized Signatory
	Date: December 23, 2005

NEWS AMERICA INCORPORATED

6.400% SENIOR NOTES DUE DECEMBER 15, 2035

Indenture

This Security is one of a duly authorized series (this series being the “Securities”) of debt securities of News America Incorporated, a Delaware corporation (“NAI” or the “Company”), issued under an Amended and Restated Indenture dated as of March 24, 1993, as supplemented by a First Supplemental Indenture, dated as of May 20, 1993, a Second Supplemental Indenture, dated as of May 28, 1993, a Third Supplemental Indenture, dated as of July 21, 1993, a Fourth Supplemental Indenture, dated as of October 20, 1995, a Fifth Supplemental Indenture, dated as of January 8, 1998, a Sixth Supplemental Indenture, dated as of March 1, 1999, a Seventh Supplemental Indenture, dated as of February 14, 2001, an Eighth Supplemental Indenture, dated as of June 27, 2003, a Ninth Supplemental Indenture, dated as of November 12, 2004, a Tenth Supplemental Indenture, dated as of March 14, 2005, and an Eleventh Supplemental Indenture, dated as of March 21, 2005 (as so supplemented, the “Indenture”), among NAI, the Guarantors named therein (the “Guarantors”) and The Bank of New York, as Trustee (the “Trustee”, which term includes any successor trustee under the indenture), which provides for the issuance by NAI from time to time of debt securities (the “Debt Securities”) in one or more series, in which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Guarantors, the Trustee and the Holders of the Debt Securities and of the terms upon which the Debt Securities are, and are to be, authenticated and delivered. The terms of the Securities include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939, as in effect on the date of the Indenture (the “TIA”), and as provided in the Indenture. The terms of the Securities and Guarantee set forth in this certificate are qualified in their entirety by reference to the terms of the Indenture. The Securities are subject to all such terms, and Securityholders are referred to the Indenture and the TIA for a statement of those terms. The Securities are unconditionally guaranteed on a senior basis (the “Guarantee”) by the Guarantors. Capitalized terms used herein and not defined herein have the meanings ascribed thereto in the Indenture.

1. Paying Agent and Security Registrar

Initially, the Trustee will act as Paying Agent and Security Registrar. NAI may appoint and change any Paying Agent or Security Registrar without notice, other than notice to the Trustee. NAI or any Subsidiary or an Affiliate of either of them may act as Paying Agent, Security Registrar or co-registrar.

2. Optional Redemption by the Company

This Note is redeemable, as a whole or in part, at our option, at any time or from time to time, upon mailed notice to the registered address of the Holder at least 30 days but not more than 60 days prior to the redemption. The redemption price will be equal to the greater of (1) 100% of the principal amount of the Notes to be redeemed and (2) the sum of the present values

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of the Remaining Scheduled Payments (as defined below) on such Notes discounted to the date of redemption, on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months), at a rate equal to the sum of the applicable Treasury Rate (as defined below) plus 30 basis points. Accrued interest will be paid to the date of redemption.

“Treasury Rate” means, with respect to any redemption date, the rate per annum equal to the semiannual equivalent yield to maturity (computed as of the third business day immediately preceding that redemption date) of the Comparable Treasury Issue (as defined below), assuming a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for that redemption date.

“Comparable Treasury Issue” means the United States Treasury security selected by the Reference Treasury Dealer (as defined below) as having a maturity comparable to the remaining term of the Notes, that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of the Notes.

“Comparable Treasury Price” means, with respect to any redemption date, the Reference Treasury Dealer Quotations (as defined below) for that redemption date.

“Reference Treasury Dealer” means Citigroup Global Markets Inc. and its successor. If it shall cease to be a primary U.S. Government securities dealer, we will substitute another nationally recognized investment banking firm that is a primary U.S. Government securities dealer.

“Reference Treasury Dealer Quotations” means, with respect to the Reference Treasury Dealer and any redemption date, the average, as determined by the trustee, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the trustee by the Reference Treasury Dealer at 3:30 p.m., New York City time, on the third business day preceding that redemption date.

“Remaining Scheduled Payments” means the remaining scheduled payments of principal of and interest on the Notes that would be due after the related redemption date but for that redemption. If that redemption date is not an interest payment date with respect to the Notes, the amount of the next succeeding scheduled interest payment on the Notes will be reduced by the amount of interest accrued on the Notes to such redemption date.

On and after the redemption date, interest will cease to accrue on this Note or any portion of this Note called for redemption (unless we default in the payment of the redemption price and accrued interest). On or before the redemption date, the Company will deposit with a paying agent (or the trustee) money sufficient to pay the redemption price of and accrued interest on the Notes to be redeemed on that date. If less than all of the Notes are to be redeemed, the Notes to be redeemed shall be selected by the trustee by a method the trustee deems to be fair and appropriate.

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3. Redemption Upon the Requirement of a Foreign Guarantor to Pay Certain Additional Amounts (as defined in the Indenture)

The Securities may be redeemed at the option of NAI, in whole, but not in part, at 100% of principal amount, plus accrued interest to the redemption date in the event that NAI has delivered to the Trustee an Officer’s Certificate stating that (i) NAI does not have sufficient funds to fulfill its obligations under the Indenture and a Guarantor is required to make the payments on the Securities pursuant to the Guarantee, (ii) a Guarantor that is not a United States resident has or will become obligated to pay the Additional Amounts which are described in Section 1204 of the Indenture and (iii) such obligation cannot be avoided by the Guarantor taking reasonable measures (including News Corporation causing any other Guarantor to make payments pursuant to the Guarantee) that require no material cost to News Corporation or any other Guarantor.

Notice of redemption will be mailed at least 30 days but not more than 60 days before the Redemption Date to each Holder of Securities to be redeemed at the Holder’s registered address.

4. Repurchase Upon Change of Control Triggering Event

Subject to the terms and conditions of the Indenture, NAI shall become immediately obligated to offer to purchase the Securities pursuant to Section 1301 of the Indenture upon the occurrence of a Change of Control Triggering Event at a price equal to 101% of aggregate principal amount, plus accrued interest, if any, to the date of purchase.

5. Denominations; Transfer; Exchange

The Securities are in registered form, without coupons, in denominations of US$1,000 of principal amount and integral multiples thereof. A Holder may transfer or exchange Securities in accordance with the terms of the Indenture. The Security Registrar may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and to pay any taxes and fees required by law or permitted by the Indenture. The Security Registrar need not register the transfer or exchange of any Securities for a period of 15 days before the selection of any Securities for redemption or of any Securities so selected for redemption in whole or in part, except the unredeemed portion of any Security being redeemed in part.

6. Persons Deemed Owners

The registered Holder of this Security may be treated as the owner of the Security for all purposes.

7. Amendment; Waiver

The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of Securities under the Indenture and the waiver of compliance by the Company with certain provisions of the Indenture at any time with the consent of the Holders of a majority in aggregate principal amount of the Debt Securities at the time outstanding (or, in case less than all of the several series of Debt Securities then outstanding are affected, of the Holders of a majority

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in principal amount of the Debt Securities at the time outstanding of each affected series). The Indenture also permits the Holders of a majority in principal amount of the Securities at the time outstanding, on behalf of the Holders of all the Securities, to waive certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder hereof shall be conclusive and binding upon such Holder and upon all future Holders hereof and of any Securities issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof, whether or not notation of such consent or waiver is made hereon.

8. Defeasance

The Indenture contains provisions for defeasance at any time of (i) the entire indebtedness of the Securities and (ii) certain restrictive covenants and certain Events of Default applicable to the Securities, upon compliance by the Company with certain conditions set forth in the Indenture.

9. Defaults and Remedies

Under the Indenture, Events of Default include (i) default in payment of the principal amount, premium, if any, or interest, in respect of the Securities when the same becomes due and payable subject, in the case of interest, to the grace period contained in the Indenture; (ii) failure by the Company or the Guarantors to perform any other covenant or warranty (other than a covenant included in the Indenture solely for the benefit of another series of Debt Securities), subject to notice and lapse of time; (iii) failure to pay at Stated Maturity (after the expiration of any grace period) certain indebtedness; (iv) certain events of acceleration prior to maturity of certain indebtedness; (v) certain final judgments which remain undischarged; or (vi) certain events of bankruptcy or insolvency. If an Event of Default occurs and is continuing, the Holders of at least 25% in aggregate principal amount of the Securities at the time outstanding may declare all the Securities to be due and payable immediately. Certain events of bankruptcy or insolvency are Events of Default which will result in the Securities becoming due and payable immediately upon the occurrence of such Events of Default.

Securityholders may not enforce the Indenture or the Securities except as provided in the Indenture. The Trustee may refuse to enforce the Indenture or the Securities unless it receives reasonable indemnity or security. Subject to certain limitations, Holders of a majority in aggregate principal amount of the Securities at the time outstanding may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Securityholders notice of any continuing Default (except a Default in payment of amounts specified in clause (i) above) if it determines that withholding notice is in their interests.

10. Trustee Dealings with NAI

Subject to certain limitations imposed by the TIA, the Trustee under the Indenture, in its individual or any other capacity, may become the owner or pledgee of Securities and may otherwise deal with and collect obligations owed to it by NAI or its Affiliates and may otherwise deal with NAI or its Affiliates with the same rights it would have if it were not Trustee.

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11. No Recourse Against Others

A director, officer, employee or stockholder, as such, of NAI shall not have any liability for any obligations of NAI under the Securities or the Indenture or for any claim based on, in respect of or by reason of such obligations or their creation. By accepting a Security, each Securityholder waives and releases all such liability. The waiver and release are part of the consideration for the issue of the Securities.

12. Abbreviations

Customary abbreviations may be used in the name of a Principal or an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the entireties), JT TEN (=joint tenants with right of survivorship and not as tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gifts to Minors Acts).

13. Governing Law

THE INDENTURE AND THIS SECURITY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.

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OPTION OF HOLDER TO ELECT PURCHASE

If you wish to have this Security purchased by the Company pursuant to Section 1301 of the Indenture, check the Box.  ¨

If you wish to have a portion of this Security purchased by the Company pursuant to Section 1301 of the Indenture, state the amount (in original principal amount):

$                            

______________________________________________________________________________________________________________________________________________

Date: Your Signature                                         

__________________________________________________

(Sign exactly as your name appears in this Note)

Signature Guarantee:

Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements of the Security Registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined by the Security Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.

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GUARANTEE

Each of News Corporation and the other entities listed below, each a “Guarantor” and collectively the “Guarantors”, which terms include any successor Person under the Indenture (as defined in the Security upon which this notation is endorsed), have unconditionally guaranteed on a senior basis (i) the due and punctual payment of the principal of, premium, if any, and interest (including post-petition interest) on the Securities, when and as the same shall become due and payable, whether at maturity, by acceleration, as a result of redemption, upon a Change of Control Triggering Event, by acceleration or otherwise, (ii) the due and punctual payment of interest on the overdue principal of, premium and interest, if any, on the Securities, to the extent lawful, (iii) the due and punctual performance of all other obligations of NAI to the Holders or the Trustee under the Indenture and (iv) in case of any extension of time of payment or renewal of any Securities or any of such other obligations, that the same will be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at Stated Maturity, by acceleration or otherwise.

The obligations of each Guarantor to the Holders of the Securities and to the Trustee pursuant to the Guarantees and the Indenture are expressly set forth to the extent and in the manner provided in Article Twelve of the Indenture and reference is hereby made to such Indenture for the precise terms of the Guarantees therein made. The Guarantors, other than News Corporation, may change from time to time pursuant to the terms of the Indenture. Reference is hereby made to the Indenture and all Indentures supplemental thereto for a complete list of the Guarantors as of any date subsequent to December 3, 2004.

No stockholder, officer, director or incorporator, as such, past, present or future, of any Guarantor shall have any personal liability under the Guarantee by reason of his or its status as such stockholder, officer, director or incorporator.

The Guarantees shall not be valid or obligatory for any purpose until the certificate of authentication on the Securities upon which this Guarantee is noted shall have been executed by the Trustee under the Indenture by the manual signature of one of its authorized signatories.

Executed as a deed in New York, New York.

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GUARANTORS

News Corporation	News America Marketing FSI, LLC	News Publishing Australia Limited
FEG Holdings, Inc.	News Australia Holdings Pty. Limited
Fox Entertainment Group, Inc.

By: Authorized Signatory for the Guarantors

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ASSIGNMENT FORM

To assign the Security, fill in the form below:

I or we assign and transfer this security to

INSERT ASSIGNEE’S SOC. SEC. OR TAX ID NO.

(Print or type assignee’s name, address and zip code)

and irrevocably appoint

to transfer this Security on the books of NAI. The agent may substitute another to act for him.

Date:	Your Signature:
	(Sign exactly as your name appears in this Security)

Guaranteed:

Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements of the Security Registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined by the Security Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.

FORM OF 6.400% SENIOR NOTE

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), NEW YORK, NEW YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC) ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE.

THE NOTES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933 (THE “SECURITIES ACT”) AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A)(1) TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (2) IN AN OFFSHORE TRANSACTION COMPLYING WITH RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (3) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE), (4) TO AN INSTITUTIONAL ACCREDITED INVESTOR IN A TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OR (5) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (B) IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED STATES AND OTHER JURISDICTIONS.

**$                    **

NEWS AMERICA INCORPORATED

6.400% SENIOR NOTES DUE DECEMBER 15, 2035

CUSIP U65249 AM 3

see reverse for certain definitions

NEWS AMERICA INCORPORATED, a Delaware corporation (“NAI” or the “Company”, which terms include any successor Person under the Indenture hereinafter referred to), for value received, hereby promises to pay to

**CEDE & CO.**

or registered assigns;

the principal amount of **                                                   DOLLARS**

on December 15, 2035 and to pay interest thereon from December 23, 2005 or from the most recent Interest Payment Date to which interest has been paid or duly provided for, semi-annually on June 15, and December 15 of each year, commencing June 15, 2006, at the rate of 6.40% per annum, until the principal hereof is fully paid or made available for payment. The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in the Indenture, be paid to the Person in whose name this Note (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date, which shall be the June 1 or December 1 (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date. Any such interest not so punctually paid or duly provided for will forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to the Person in whose name this Note (or one or more Predecessor Securities) is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to Holders of Notes not less than 10 days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Note may be listed, and upon such notice as may be required by such exchange, all as more fully provided in such Indenture.

This Note is unconditionally guaranteed by News Corporation, a Delaware corporation (“News Corporation”), and the other Guarantors listed herein, as set forth in Article Twelve of the Indenture and in the Guarantee endorsed hereon. The Guarantors other than News Corporation may change from time to time pursuant to the terms of the Indenture.

Payment of the principal of, and interest on, this Note will be made at the offices or agencies of the Company maintained for that purpose in The City of New York, New York in such coin or currency of the United States of America as at the time of payment is legal tender

for payment of public debts; provided, however, that, at the option of the Company, payment of interest may be made by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register or by wire transfer to an account maintained by the Person entitled thereto as specified in the Security Register.

Reference is hereby made to the further provisions of this Note set forth herein which further provisions shall for all purposes have the same effect as if set forth at this place.

Unless the certificate of authentication hereon has been executed by the Trustee referred to herein by manual signature, this Note shall not be entitled to any benefit under the Indenture, or be valid or obligatory for any purpose.

IN WITNESS WHEREOF, NAI has caused this Note to be signed manually or by facsimile by its duly authorized officers and a facsimile of its corporate seal to be affixed hereto or imprinted hereon.

Dated: December 23, 2005

NEWS AMERICA INCORPORATED
By:		By:
	Secretary		Authorized Signatory

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

This is one of the Securities referred

to in the within-mentioned Indenture

THE BANK OF NEW YORK, as Trustee

By:
	Authorized Signatory
	Date: December 23, 2005

NEWS AMERICA INCORPORATED

6.400% SENIOR NOTES DUE DECEMBER 15, 2035

Indenture

This Security is one of a duly authorized series (this series being the “Securities”) of debt securities of News America Incorporated, a Delaware corporation (“NAI” or the “Company”), issued under an Amended and Restated Indenture dated as of March 24, 1993, as supplemented by a First Supplemental Indenture, dated as of May 20, 1993, a Second Supplemental Indenture, dated as of May 28, 1993, a Third Supplemental Indenture, dated as of July 21, 1993, a Fourth Supplemental Indenture, dated as of October 20, 1995, a Fifth Supplemental Indenture, dated as of January 8, 1998, a Sixth Supplemental Indenture, dated as of March 1, 1999, a Seventh Supplemental Indenture, dated as of February 14, 2001, an Eighth Supplemental Indenture, dated as of June 27, 2003, a Ninth Supplemental Indenture, dated as of November 12, 2004, a Tenth Supplemental Indenture, dated as of March 14, 2005, and an Eleventh Supplemental Indenture, dated as of March 21, 2005 (as so supplemented, the “Indenture”), among NAI, the Guarantors named therein (the “Guarantors”) and The Bank of New York, as Trustee (the “Trustee”, which term includes any successor trustee under the indenture), which provides for the issuance by NAI from time to time of debt securities (the “Debt Securities”) in one or more series, in which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Guarantors, the Trustee and the Holders of the Debt Securities and of the terms upon which the Debt Securities are, and are to be, authenticated and delivered. The terms of the Securities include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939, as in effect on the date of the Indenture (the “TIA”), and as provided in the Indenture. The terms of the Securities and Guarantee set forth in this certificate are qualified in their entirety by reference to the terms of the Indenture. The Securities are subject to all such terms, and Securityholders are referred to the Indenture and the TIA for a statement of those terms. The Securities are unconditionally guaranteed on a senior basis (the “Guarantee”) by the Guarantors. Capitalized terms used herein and not defined herein have the meanings ascribed thereto in the Indenture.

14. Paying Agent and Security Registrar

Initially, the Trustee will act as Paying Agent and Security Registrar. NAI may appoint and change any Paying Agent or Security Registrar without notice, other than notice to the Trustee. NAI or any Subsidiary or an Affiliate of either of them may act as Paying Agent, Security Registrar or co-registrar.

15. Optional Redemption by the Company

This Note is redeemable, as a whole or in part, at our option, at any time or from time to time, upon mailed notice to the registered address of the Holder at least 30 days but not more than 60 days prior to the redemption. The redemption price will be equal to the greater of (1) 100% of the principal amount of the Notes to be redeemed and (2) the sum of the present values

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of the Remaining Scheduled Payments (as defined below) on such Notes discounted to the date of redemption, on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months), at a rate equal to the sum of the applicable Treasury Rate (as defined below) plus 30 basis points. Accrued interest will be paid to the date of redemption.

“Treasury Rate” means, with respect to any redemption date, the rate per annum equal to the semiannual equivalent yield to maturity (computed as of the third business day immediately preceding that redemption date) of the Comparable Treasury Issue (as defined below), assuming a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for that redemption date.

“Comparable Treasury Issue” means the United States Treasury security selected by the Reference Treasury Dealer (as defined below) as having a maturity comparable to the remaining term of the Notes, that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of the Notes.

“Comparable Treasury Price” means, with respect to any redemption date, the Reference Treasury Dealer Quotations (as defined below) for that redemption date.

“Reference Treasury Dealer” means Citigroup Global Markets Inc. and its successor. If it shall cease to be a primary U.S. Government securities dealer, we will substitute another nationally recognized investment banking firm that is a primary U.S. Government securities dealer.

“Reference Treasury Dealer Quotations” means, with respect to the Reference Treasury Dealer and any redemption date, the average, as determined by the trustee, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the trustee by the Reference Treasury Dealer at 3:30 p.m., New York City time, on the third business day preceding that redemption date.

“Remaining Scheduled Payments” means the remaining scheduled payments of principal of and interest on the Notes that would be due after the related redemption date but for that redemption. If that redemption date is not an interest payment date with respect to the Notes, the amount of the next succeeding scheduled interest payment on the Notes will be reduced by the amount of interest accrued on the Notes to such redemption date.

On and after the redemption date, interest will cease to accrue on this Note or any portion of this Note called for redemption (unless we default in the payment of the redemption price and accrued interest). On or before the redemption date, the Company will deposit with a paying agent (or the trustee) money sufficient to pay the redemption price of and accrued interest on the Notes to be redeemed on that date. If less than all of the Notes are to be redeemed, the Notes to be redeemed shall be selected by the trustee by a method the trustee deems to be fair and appropriate.

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16. Redemption Upon the Requirement of a Foreign Guarantor to Pay Certain Additional Amounts (as defined in the Indenture)

The Securities may be redeemed at the option of NAI, in whole, but not in part, at 100% of principal amount, plus accrued interest to the redemption date in the event that NAI has delivered to the Trustee an Officer’s Certificate stating that (i) NAI does not have sufficient funds to fulfill its obligations under the Indenture and a Guarantor is required to make the payments on the Securities pursuant to the Guarantee, (ii) a Guarantor that is not a United States resident has or will become obligated to pay the Additional Amounts which are described in Section 1204 of the Indenture and (iii) such obligation cannot be avoided by the Guarantor taking reasonable measures (including News Corporation causing any other Guarantor to make payments pursuant to the Guarantee) that require no material cost to News Corporation or any other Guarantor.

Notice of redemption will be mailed at least 30 days but not more than 60 days before the Redemption Date to each Holder of Securities to be redeemed at the Holder’s registered address.

17. Repurchase Upon Change of Control Triggering Event

Subject to the terms and conditions of the Indenture, NAI shall become immediately obligated to offer to purchase the Securities pursuant to Section 1301 of the Indenture upon the occurrence of a Change of Control Triggering Event at a price equal to 101% of aggregate principal amount, plus accrued interest, if any, to the date of purchase.

18. Denominations; Transfer; Exchange

The Securities are in registered form, without coupons, in denominations of US$1,000 of principal amount and integral multiples thereof. A Holder may transfer or exchange Securities in accordance with the terms of the Indenture. The Security Registrar may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and to pay any taxes and fees required by law or permitted by the Indenture. The Security Registrar need not register the transfer or exchange of any Securities for a period of 15 days before the selection of any Securities for redemption or of any Securities so selected for redemption in whole or in part, except the unredeemed portion of any Security being redeemed in part.

19. Persons Deemed Owners

The registered Holder of this Security may be treated as the owner of the Security for all purposes.

20. Amendment; Waiver

The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of Securities under the Indenture and the waiver of compliance by the Company with certain provisions of the Indenture at any time with the consent of the Holders of a majority in aggregate principal amount of the Debt Securities at the time outstanding (or, in case less than all of the several series of Debt Securities then outstanding are affected, of the Holders of a majority

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in principal amount of the Debt Securities at the time outstanding of each affected series). The Indenture also permits the Holders of a majority in principal amount of the Securities at the time outstanding, on behalf of the Holders of all the Securities, to waive certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder hereof shall be conclusive and binding upon such Holder and upon all future Holders hereof and of any Securities issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof, whether or not notation of such consent or waiver is made hereon.

21. Defeasance

The Indenture contains provisions for defeasance at any time of (i) the entire indebtedness of the Securities and (ii) certain restrictive covenants and certain Events of Default applicable to the Securities, upon compliance by the Company with certain conditions set forth in the Indenture.

22. Defaults and Remedies

Under the Indenture, Events of Default include (i) default in payment of the principal amount, premium, if any, or interest, in respect of the Securities when the same becomes due and payable subject, in the case of interest, to the grace period contained in the Indenture; (ii) failure by the Company or the Guarantors to perform any other covenant or warranty (other than a covenant included in the Indenture solely for the benefit of another series of Debt Securities), subject to notice and lapse of time; (iii) failure to pay at Stated Maturity (after the expiration of any grace period) certain indebtedness; (iv) certain events of acceleration prior to maturity of certain indebtedness; (v) certain final judgments which remain undischarged; or (vi) certain events of bankruptcy or insolvency. If an Event of Default occurs and is continuing, the Holders of at least 25% in aggregate principal amount of the Securities at the time outstanding may declare all the Securities to be due and payable immediately. Certain events of bankruptcy or insolvency are Events of Default which will result in the Securities becoming due and payable immediately upon the occurrence of such Events of Default.

Securityholders may not enforce the Indenture or the Securities except as provided in the Indenture. The Trustee may refuse to enforce the Indenture or the Securities unless it receives reasonable indemnity or security. Subject to certain limitations, Holders of a majority in aggregate principal amount of the Securities at the time outstanding may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Securityholders notice of any continuing Default (except a Default in payment of amounts specified in clause (i) above) if it determines that withholding notice is in their interests.

23. Trustee Dealings with NAI

Subject to certain limitations imposed by the TIA, the Trustee under the Indenture, in its individual or any other capacity, may become the owner or pledgee of Securities and may otherwise deal with and collect obligations owed to it by NAI or its Affiliates and may otherwise deal with NAI or its Affiliates with the same rights it would have if it were not Trustee.

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24. No Recourse Against Others

A director, officer, employee or stockholder, as such, of NAI shall not have any liability for any obligations of NAI under the Securities or the Indenture or for any claim based on, in respect of or by reason of such obligations or their creation. By accepting a Security, each Securityholder waives and releases all such liability. The waiver and release are part of the consideration for the issue of the Securities.

25. Abbreviations

Customary abbreviations may be used in the name of a Principal or an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the entireties), JT TEN (=joint tenants with right of survivorship and not as tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gifts to Minors Acts).

26. Governing Law

THE INDENTURE AND THIS SECURITY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.

-5-

OPTION OF HOLDER TO ELECT PURCHASE

If you wish to have this Security purchased by the Company pursuant to Section 1301 of the Indenture, check the Box.  ¨

If you wish to have a portion of this Security purchased by the Company pursuant to Section 1301 of the Indenture, state the amount (in original principal amount):

$                            

______________________________________________________________________________________________________________________________________________

Date: Your Signature                                         

__________________________________________________

(Sign exactly as your name appears in this Note)

Signature Guarantee:

Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements of the Security Registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined by the Security Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.

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GUARANTEE

Each of News Corporation and the other entities listed below, each a “Guarantor” and collectively the “Guarantors”, which terms include any successor Person under the Indenture (as defined in the Security upon which this notation is endorsed), have unconditionally guaranteed on a senior basis (i) the due and punctual payment of the principal of, premium, if any, and interest (including post-petition interest) on the Securities, when and as the same shall become due and payable, whether at maturity, by acceleration, as a result of redemption, upon a Change of Control Triggering Event, by acceleration or otherwise, (ii) the due and punctual payment of interest on the overdue principal of, premium and interest, if any, on the Securities, to the extent lawful, (iii) the due and punctual performance of all other obligations of NAI to the Holders or the Trustee under the Indenture and (iv) in case of any extension of time of payment or renewal of any Securities or any of such other obligations, that the same will be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at Stated Maturity, by acceleration or otherwise.

The obligations of each Guarantor to the Holders of the Securities and to the Trustee pursuant to the Guarantees and the Indenture are expressly set forth to the extent and in the manner provided in Article Twelve of the Indenture and reference is hereby made to such Indenture for the precise terms of the Guarantees therein made. The Guarantors, other than News Corporation, may change from time to time pursuant to the terms of the Indenture. Reference is hereby made to the Indenture and all Indentures supplemental thereto for a complete list of the Guarantors as of any date subsequent to December 3, 2004.

No stockholder, officer, director or incorporator, as such, past, present or future, of any Guarantor shall have any personal liability under the Guarantee by reason of his or its status as such stockholder, officer, director or incorporator.

The Guarantees shall not be valid or obligatory for any purpose until the certificate of authentication on the Securities upon which this Guarantee is noted shall have been executed by the Trustee under the Indenture by the manual signature of one of its authorized signatories.

Executed as a deed in New York, New York.

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GUARANTORS

News Corporation	News America Marketing FSI, LLC	News Publishing Australia Limited
FEG Holdings, Inc.	News Australia Holdings Pty. Limited
Fox Entertainment Group, Inc.

By: Authorized Signatory for the Guarantors

-8-

ASSIGNMENT FORM

To assign the Security, fill in the form below:

I or we assign and transfer this security to

INSERT ASSIGNEE’S SOC. SEC. OR TAX ID NO.

(Print or type assignee’s name, address and zip code)

and irrevocably appoint

to transfer this Security on the books of NAI. The agent may substitute another to act for him.

Date:	Your Signature:
	(Sign exactly as your name appears in this Security)

Guaranteed:

Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements of the Security Registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined by the Security Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.

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EX-4.2

Exhibit 4.2

6.40% Senior Notes due 2035

REGISTRATION RIGHTS AGREEMENT

Dated as of December 23, 2005

by and among

NEWS AMERICA INCORPORATED

and

THE GUARANTORS

named herein

CITIGROUP GLOBAL MARKETS INC.

as Initial Purchaser

REGISTRATION RIGHTS AGREEMENT

THIS REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is made and entered into as of December 23, 2005 by and among NEWS AMERICA INCORPORATED, a Delaware corporation (the “Issuer”), the guarantors listed on the signature pages to this Agreement (the “Guarantors”) and CITIGROUP GLOBAL MARKETS INC. (the “Initial Purchaser”).

This Agreement is made pursuant to the Purchase Agreement dated as of December 20, 2005 by and among the Issuer, the Guarantors and the Initial Purchaser (the “Purchase Agreement”), which provides for, among other things, the sale by the Issuer to the Initial Purchaser of an aggregate of $1,150,000,000 principal amount of the Issuer’s 6.40% Senior Notes Due 2035 (the “Securities”). In order to induce the Initial Purchaser to enter into the Purchase Agreement, the Issuer has agreed to provide to the Initial Purchaser and its direct and indirect transferees the registration rights set forth in this Agreement. The execution and delivery of this Agreement is a condition to the closing under the Purchase Agreement.

In consideration of the foregoing, the parties hereto agree as follows:

1. Definitions. As used in this Agreement, the following capitalized defined terms shall have the following meanings:

“Additional Interest” shall have the meaning set forth in Section 2(e) hereof.

“Advice” shall have the meaning set forth in the last paragraph of Section 3 hereof.

“Applicable Period” shall have the meaning set forth in Section 3(s) hereof.

“Business Day” shall mean a day that is not a Saturday, a Sunday, or a day on which banking institutions in New York, New York are required to be closed.

“Closing Time” shall mean the Closing Time as defined in the Purchase Agreement.

“Depositary” shall mean The Depository Trust Company, or any other depositary appointed by the Issuer; provided, however, that such depositary must have an address in the Borough of Manhattan, in The City of New York.

“Effectiveness Period” shall have the meaning set forth in Section 2(b) hereof.

“Event Date” shall have the meaning set forth in Section 2(e) hereof.

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

“Exchange Offer” shall mean the exchange offer by the Issuer of Exchange Securities for Securities pursuant to Section 2(a) hereof.

“Exchange Offer Registration” shall mean a registration under the Securities Act effected pursuant to Section 2(a) hereof.

“Exchange Offer Registration Statement” shall mean an exchange offer registration statement on Form S-1 or S-4 (or, if applicable, on another appropriate form), and all amendments and supplements to such registration statement, in each case including the Prospectus contained therein, all exhibits thereto and all material incorporated by reference therein.

“Exchange Period” shall have the meaning set forth in Section 2(a) hereof.

“Exchange Securities” shall mean the senior debt securities issued by the Issuer under the Indenture containing terms identical to the Securities which terms shall include the guarantees on the original Securities (the “Exchange Guarantees”) (except that (i) interest thereon shall accrue from the last date on which interest was paid on the Securities or, if no such interest has been paid, from December 23, 2005 and (ii) the transfer restrictions thereon shall be eliminated) to be offered to Holders of Securities in exchange for Securities pursuant to the Exchange Offer.

“Holder” shall mean the Initial Purchaser, for so long as it owns any Registrable Securities, and each of its successors, assigns and direct and indirect transferees who become registered owners of Registrable Securities under the Indenture.

“Indenture” shall mean the Amended and Restated Indenture dated as of March 24, 1993, as supplemented by a First Supplemental Indenture, dated as of May 20, 1993, a Second Supplemental Indenture dated as of May 28, 1993, a Third Supplemental Indenture, dated as of July 21, 1993, a Fourth Supplemental Indenture, dated as of October 20, 1995, a Fifth Supplemental Indenture, dated as of January 8, 1998, a Sixth Supplemental Indenture, dated as of March 1, 1999, a Seventh Supplemental Indenture, dated as of February 14, 2001, an Eighth Supplemental Indenture, dated as of July 27, 2003, a Ninth Supplemental Indenture, dated as of November 12, 2004, a Tenth Supplemental Indenture, dated as of March 14, 2005 and an Eleventh Supplemental Indenture, dated as of March 21, 2005 (as so supplemented, the “Indenture”) relating to the Securities among the Issuer the Guarantors and The Bank of New York, as trustee (the “Trustee”) as the same may be amended from time to time in accordance with the terms thereof.

“Initial Purchaser” shall have the meaning set forth in the preamble to this Agreement.

“Inspectors” shall have the meaning set forth in Section 3(n) hereof.

“Issuer” shall have the meaning set forth in the preamble to this Agreement and also includes the Issuer’s successors and permitted assigns.

“Majority Holders” shall mean the Holders of a majority of the aggregate principal amount of outstanding Registrable Securities.

3

“Participating Broker-Dealer” shall have the meaning set forth in Section 3(t) hereof.

“Person” shall mean an individual, partnership, corporation, limited liability company, trust or unincorporated organization, or a government or agency or political subdivision thereof.

“Private Exchange” shall have the meaning set forth in Section 2(a) hereof.

“Private Exchange Securities” shall have the meaning set forth in Section 2(a) hereof.

“Prospectus” shall mean the prospectus included in a Registration Statement, including any preliminary prospectus, and any such prospectus as amended or supplemented by any prospectus supplement, including a prospectus supplement with respect to the terms of the offering of any portion of the Registrable Securities covered by a Shelf Registration Statement, and by all other amendments and supplements to a prospectus, including post-effective amendments, and in each case including all material incorporated by reference therein.

“Purchase Agreement” shall have the meaning set forth in the preamble to this Agreement.

“Records” shall have the meaning set forth in Section 3(n) hereof.

“Registrable Securities” shall mean each Security and, if issued, each Private Exchange Security until (i) the date on which such Security has been exchanged by a Person other than a Participating Broker-Dealer for an Exchange Security in the Exchange Offer, (ii) following the exchange by a Participating Broker-Dealer in the Exchange Offer of a Security for an Exchange Security, the date on which such Exchange Security is sold to a purchaser who receives from such Participating Broker-Dealer on or prior to the date of such sale a copy of the Prospectus contained in the Exchange Offer Registration Statement, as amended or supplemented, (iii) the date on which such Security or Private Exchange Security, as the case may be, has been effectively registered under the Securities Act and disposed of in accordance with the Shelf Registration Statement, (iv) the date on which such Security or Private Exchange Security, as the case may be, is eligible for distribution to the public pursuant to Rule 144(k) under the Securities Act (or any similar provision then in force, but not Rule 144A under the Securities Act), (v) the date such Security or Private Exchange Security, as the case may be, shall have been otherwise transferred by the holder thereof and a new Security not bearing a legend restricting further transfer shall have been delivered by the Issuer and subsequent disposition of such Security shall not require registration or qualification under the Securities Act or any similar state law then in force or (vi) such Security or Private Exchange Security, as the case may be, ceases to be outstanding.

“Registration Expenses” shall mean any and all expenses incident to performance of or compliance by the Issuer with this Agreement, including without limitation: (i) all SEC, stock exchange or National Association of Securities Dealers, Inc. (the “NASD”) registration and filing fees, including, if applicable, the reasonable fees and expenses of any “qualified independent underwriter” (and its counsel) that is required to be retained by the Initial Purchaser

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in accordance with the rules and regulations of the NASD, (ii) all reasonable fees and expenses incurred in connection with compliance with state securities or blue sky laws (including reasonable fees and disbursements of counsel for any underwriters or any Holder that was the Initial Purchaser in connection with blue sky qualification of any of the Exchange Securities or Registrable Securities) and compliance with the rules of the NASD, (iii) all reasonable expenses of any Persons (other than the Holders or Persons acting on the request of the Holders) in preparing or assisting in preparing, word processing, printing and distributing any Registration Statement, any Prospectus and any amendments or supplements thereto, and in preparing or assisting in preparing, printing and distributing any underwriting agreements and other documents relating to the performance of and compliance with this Agreement, (iv) all rating agency fees, (v) the reasonable fees and disbursements of counsel for the Issuer and the Guarantors and of the independent certified public accountants of the Issuer and the Guarantors, including the expenses of any “cold comfort” letters required by or incident to such performance and compliance, (vi) the reasonable fees and expenses of the Trustee, and any exchange agent or custodian, (vii) all fees and expenses incurred in connection with the listing, if any, of any of the Registrable Securities on any securities exchange or exchanges, (viii) any reasonable fees and disbursements of any underwriter customarily required to be paid by the Issuer or sellers of securities and the reasonable fees and expenses of any special experts retained by the Issuer in connection with any Registration Statement and (ix) all reasonable fees of Kirkland & Ellis LLP who shall initially act as counsel to Holders of the Registrable Securities or any one counsel designated in writing by the Majority Holders to act as counsel to the Holders of the Registrable Securities in connection with a Shelf Registration Statement, but excluding fees of counsel to the underwriters and underwriting discounts and commissions and transfer taxes, if any, relating to the sale or disposition of Registrable Securities by a Holder.

“Registration Statement” shall mean any registration statement of the Issuer which covers any of the Exchange Securities or Registrable Securities pursuant to the provisions of this Agreement, and all amendments and supplements to any such Registration Statement, including post-effective amendments, in each case including the Prospectus contained therein, all exhibits thereto and all material incorporated by reference therein.

“SEC” shall mean the Securities and Exchange Commission.

“Securities” shall have the meaning set forth in the preamble to this Agreement.

“Securities Act” shall mean the Securities Act of 1933, as amended.

“Shelf Registration” shall mean a registration effected pursuant to Section 2(b) hereof.

“Shelf Registration Statement” shall mean a “shelf” registration statement of the Issuer pursuant to the provisions of Section 2(b) hereof which covers all of the Registrable Securities or all of the Private Exchange Securities, as the case may be, on an appropriate form under Rule 415 under the Securities Act, or any similar rule that may be adopted by the SEC, and all amendments and supplements to such registration statement, including post-effective amendments, in each case including the Prospectus contained therein, all exhibits thereto and all material incorporated by reference therein.

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“TIA” shall have the meaning set forth in Section 3(1) hereof.

2. Registration Under the Securities Act.

(a) Exchange Offer. To the extent not prohibited by any applicable law or applicable SEC policy, the Issuer shall, for the benefit of the Holders, at the Issuer’s cost (i) file with the SEC within 90 days after the Closing Time an Exchange Offer Registration Statement on an appropriate form under the Securities Act covering the offer by the Issuer to the Holders to exchange all of the Registrable Securities (other than Private Exchange Securities) for a like principal amount of Exchange Securities, (ii) use its reasonable best efforts to cause such Exchange Offer Registration Statement to be declared effective under the Securities Act by the SEC on or prior to the 180th day after the Closing Time, (iii) use its reasonable best efforts to have such Registration Statement remain effective until the closing of the Exchange Offer and (iv) commence the Exchange Offer and use its reasonable best efforts to issue Exchange Securities in exchange for all Registrable Securities (other than the Private Exchange Securities) properly tendered prior thereto in the Exchange Offer not later than 225 days after the Closing Time. Upon the effectiveness of the Exchange Offer Registration Statement, the Issuer shall promptly commence the Exchange Offer, it being the objective of such Exchange Offer to enable each Holder eligible and electing to exchange Registrable Securities (other than Private Exchange Securities) for Exchange Securities (assuming that such Holder is not an affiliate of the Issuer within the meaning of Rule 405 under the Securities Act and is not a broker-dealer tendering Registrable Securities acquired directly from the Issuer for its own account, acquires the Exchange Securities in the ordinary course of such Holder’s business and has no arrangements or understandings with any Person to participate in the Exchange Offer for the purpose of distributing (within the meaning of the Securities Act) the Exchange Securities) to transfer such Exchange Securities from and after their receipt without any limitations or restrictions under the Securities Act and under state securities or blue sky laws.

In connection with the Exchange Offer, the Issuer shall:

(i) mail to each Holder a copy of the Prospectus forming part of the Exchange Offer Registration Statement, together with an appropriate letter of transmittal and related documents;

(ii) keep the Exchange Offer open for acceptance for a period of not less than 20 Business Days after the date notice thereof is mailed to the Holders (or longer if required by applicable law) (such period referred to herein as the “Exchange Period”);

(iii) utilize the services of the Trustee for the Exchange Offer;

(iv) permit Holders to withdraw tendered Securities at any time prior to the close of business, New York time, on the last Business Day of the Exchange Period, by sending to the institution specified in the notice, a telegram, telex, facsimile transmission or letter setting forth the name of such Holder, the principal amount of Securities delivered for exchange, and a statement that such Holder is withdrawing such Holder’s election to have such Securities exchanged;

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(v) notify each Holder that any Security not tendered will remain outstanding and continue to accrue interest, but will not retain any rights under this Agreement (except in the case of the Initial Purchaser and Participating Broker-Dealers as provided herein); and

(vi) otherwise comply in all respects with all applicable laws relating to the Exchange Offer.

If, prior to consummation of the Exchange Offer, the Initial Purchaser holds any Securities acquired by it and having the status of an unsold allotment in the initial distribution, the Issuer upon the request of the Initial Purchaser shall, simultaneously with the delivery of the Exchange Securities in the Exchange Offer, issue and deliver to the Initial Purchaser in exchange (the “Private Exchange”) for the Securities held by the Initial Purchaser, a like principal amount of debt securities of the Issuer that are identical (except that such securities shall bear appropriate transfer restrictions) to the Exchange Securities (the “Private Exchange Securities”).

The Exchange Securities and the Private Exchange Securities shall be issued under (i) the Indenture or (ii) an indenture identical to the Indenture in all material respects and which, in either case, has been qualified under the TIA and shall provide that the Exchange Securities shall not be subject to the transfer restrictions set forth in the Indenture. The Indenture or such indenture shall provide that the Exchange Securities, the Private Exchange Securities and the Securities shall vote and consent together on all matters as one class and that none of the Exchange Securities, the Private Exchange Securities or the Securities will have the right to vote or consent as a separate class on any matter. The Private Exchange Securities shall be of the same series as, and the Issuer shall use its reasonable best efforts to have the Private Exchange Securities bear the same CUSIP number as, the Exchange Securities.

As soon as practicable after the close of the Exchange Offer and/or the Private Exchange, as the case may be, the Issuer shall:

(i) accept for exchange all Securities or portions thereof tendered and not validly withdrawn pursuant to the Exchange Offer;

(ii) accept for exchange all Securities duly tendered pursuant to the Private Exchange; and

(iii) deliver, or cause to be delivered, to the Trustee for cancellation all Securities or portions thereof so accepted for exchange by the Issuer, and issue, and cause the Trustee under the Indenture to promptly authenticate and deliver to each Holder, a new Exchange Security or Private Exchange Security, as the case may be, equal in principal amount to the principal amount of the Securities surrendered by such Holder and accepted for exchange.

To the extent not prohibited by any law or applicable interpretation of the staff of the SEC, the Issuer shall use its reasonable best efforts to complete the Exchange Offer as provided above, and shall comply with the applicable requirements of the Securities Act, the Exchange Act and other applicable laws in connection with the Exchange Offer. The Exchange Offer shall not be subject to any conditions, other than that the Exchange Offer does not violate applicable law or any applicable interpretation of the staff of the SEC. Each Holder of Registrable Securities (other than Private Exchange Securities) who wishes to exchange such

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Registrable Securities (other than Private Exchange Securities) for Exchange Securities in the Exchange Offer will be required to make certain customary representations in connection therewith, including representations that such Holder is not an affiliate of the Issuer within the meaning of Rule 405 under the Securities Act, or if it is such an affiliate, it will comply with the registration and prospectus delivery requirements of the Securities Act to the extent applicable, that any Exchange Securities to be received by it will be acquired in the ordinary course of business and that at the time of the commencement of the Exchange Offer it has no arrangement with any Person to participate in the distribution (within the meaning of the Securities Act) of the Exchange Securities. The Issuer shall inform the Initial Purchaser, after consultation with the Trustee and the Initial Purchaser, of the names and addresses of the Holders to whom the Exchange Offer is made, and the Initial Purchaser shall have the right to contact such Holders and otherwise facilitate the tender of Registrable Securities in the Exchange Offer.

Upon consummation of the Exchange Offer in accordance with this Section 2(a), the provisions of this Agreement shall continue to apply, mutatis mutandis, solely with respect to Registrable Securities that are Private Exchange Securities and Exchange Securities held by Participating Broker-Dealers, and the Issuer shall have no further obligation to register Registrable Securities (other than Private Exchange Securities) pursuant to Section 2(b) hereof.

(b) Shelf Registration. To the extent not prohibited by any law or applicable SEC policy, in the event that (i) the Issuer is not permitted to file the Exchange Offer Registration Statement or to consummate the Exchange Offer because the Exchange Offer is not permitted by applicable law or SEC policy, (ii) the Exchange Offer is not for any other reason declared effective under the Securities Act by the SEC within 180 days after the Closing Time, (iii) any holder of Securities notifies the Issuer within 30 days after the commencement of the Exchange Offer that (a) due to a change in law or SEC policy it is not entitled to participate in the Exchange Offer, (b) due to a change in law or SEC policy it may not resell the Exchange Securities acquired by it in the Exchange Offer to the public without delivering a prospectus and the prospectus contained in the Exchange Offer Registration Statement is not appropriate or available for such resales by such holder or (c) it is a broker-dealer and owns Securities acquired directly from the Issuer or an affiliate of the Issuer or (iv) the holders of a majority in aggregate principal amount at maturity of the Securities may not resell the Exchange Securities acquired by them in the Exchange Offer to the public without restriction under the Securities Act and without restriction under applicable blue sky or state securities laws, then the Issuer shall, at its cost, file as promptly as practicable after such determination or date, as the case may be, and, in any event, prior to the later of (A) 90 days after the Closing Time or (B) 30 days after such filing obligation arises (provided, however, that if the Exchange Offer Registration Statement is not declared effective under the Securities Act by the SEC within 180 days after the Closing Time, then the Issuer shall file the Shelf Registration Statement with the SEC on or prior to the 210th day after the Closing Time, unless the Issuer has consummated the Exchange Offer prior to the 180^th day after the Closing Time whereby the Issuer’s obligation to file a Shelf Registration Statement pursuant to clause (b)(ii) above shall be cancelled, provided, that such cancellation shall not relieve the Issuer of any obligation to pay Additional Interest, if Additional Interest is otherwise due and payable), a Shelf Registration Statement providing for the sale by the Holders of all of the Registrable Securities affected thereby, and, to the extent not declared effective automatically by the SEC, shall use its reasonable best efforts to cause such Shelf Registration Statement to be declared effective by the SEC as soon as practicable and, in any event, on or prior to 90 days

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after the obligation to file the Shelf Registration Statement arises (in the case of (B) above). No Holder of Registrable Securities may include any of its Registrable Securities in any Shelf Registration pursuant to this Agreement unless and until such Holder furnishes to the Issuer in writing, within 10 days after receipt of a request therefor, such information as the Issuer may, after conferring with counsel with regard to information relating to Holders that would be required by the SEC to be included in such Shelf Registration Statement or Prospectus included therein, reasonably request for inclusion in any Shelf Registration Statement or Prospectus included therein. Each Holder as to which any Shelf Registration is being effected agrees to furnish to the Issuer all information with respect to such Holder necessary to make any information previously furnished to the Issuer by such Holder not materially misleading.

The Issuer agrees to use its reasonable best efforts to keep the Shelf Registration Statement continuously effective, supplemented and amended for a period of two years from the Closing Time (or such shorter period provided for in any amendment to Rule 144(k) under the Securities Act (or any successor provision other than Rule 144A) upon the expiration of which securities are eligible for distribution to the public) or such shorter period that will terminate when all the Registrable Securities covered by the Shelf Registration Statement have been sold pursuant thereto (subject to extension pursuant to the last paragraph of Section 3 hereof) (the “Effectiveness Period”), provided, however, that with respect to the Private Exchange Securities the Issuer shall only be obligated to keep the Shelf Registration Statement effective, supplemented and amended for a period of 60 days. The Issuer shall not permit any securities other than Registrable Securities to be included in the Shelf Registration. The Issuer further agrees, if necessary, to supplement or amend the Shelf Registration Statement, if required by the rules, regulations or instructions applicable to the registration form used by the Issuer for such Shelf Registration Statement or by the Securities Act or by any other rules and regulations thereunder for shelf registrations, and the Issuer agrees to furnish to the Holders of Registrable Securities copies of any such supplement or amendment promptly after its being used or filed with the SEC.

Notwithstanding the requirements contained in this Section 2(b), solely with respect to the Private Exchange Securities, the Issuer shall have no obligation to file or effect a Shelf Registration Statement registering such Private Exchange Securities, if the aggregate principal amount of such Private Exchange Securities does not exceed $5,000,000.

(c) Expenses. The Issuer shall pay all Registration Expenses in connection with the registration pursuant to Section 2(a) or 2(b) hereof. Except as provided in the preceding sentence, each Holder shall pay all expenses of its counsel, underwriting discounts and commissions and transfer taxes, if any, relating to the sale or disposition of such Holder’s Registrable Securities pursuant to the Shelf Registration Statement.

(d) Effective Registration Statement. An Exchange Offer Registration Statement pursuant to Section 2(a) hereof or a Shelf Registration Statement pursuant to Section 2(b) hereof will not be deemed to have become effective unless it has been declared effective by the SEC; provided, however, that if, after it has been declared effective, the offering of Registrable Securities pursuant to a Shelf Registration Statement is interfered with by any stop order, injunction or other order or requirement of the SEC or any other governmental agency or court, such Registration Statement will be deemed not to have been effective during the period of such

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interference, until the offering of Registrable Securities may legally resume. The Issuer will be deemed not to have used its reasonable best efforts to cause the Exchange Offer Registration Statement or the Shelf Registration Statement, as the case may be, to become, or to remain, effective during the requisite period if they voluntarily take any action that would result in any such Registration Statement not being declared effective or in the Holders of Registrable Securities covered thereby not being able to exchange or offer and sell such Registrable Securities during that period unless such action is required by applicable law. Notwithstanding the foregoing, the only remedy available under this Agreement for the failure of the Issuer to satisfy the obligations set forth in Sections 2(a), 2(b) and 3 hereof shall be payment by the Issuer of the Additional Interest as set forth in Section 2(e) hereof and the remedy of specific enforcement provided by Section 2(t) hereof.

(e) Additional Interest. If (i) the Issuer fails to file an Exchange Offer Registration Statement or the Shelf Registration Statement with respect to the Registrable Securities (other than the Private Exchange Securities) on or before the date specified herein for such filing, (ii) the Exchange Offer Registration Statement or the Shelf Registration Statement is not declared effective by the SEC or prior to the date specified herein for such effectiveness (the “Effectiveness Target Date”), (iii) the Exchange Offer is required to be consummated hereunder and the Issuer fails to issue Exchange Securities in exchange for all Securities properly tendered and not withdrawn in the Exchange Offer within 45 days of the Effectiveness Target Date with respect to the Exchange Offer Registration Statement, or (iv) the Exchange Offer Registration Statement or the Shelf Registration Statement required to be filed and declared effective hereunder is declared effective but thereafter ceases to be effective or usable in connection with the Exchange Offer or resales of Securities, as the case may be, during the periods specified herein (each such event referred to in clauses (i) through (iv) above, a “Registration Default”), then the interest rate borne by the Registrable Securities (other than the Private Exchange Securities as to which no additional amounts shall be payable under this Section 2(e)) as to which the Registration Default exists shall be increased (the “Additional Interest”), with respect to the first 90-day period (or portion thereof) while a Registration Default is continuing immediately following the occurrence of such Registration Default, by 0.25% per annum, such interest rate increasing by an additional 0.25 % per annum at the beginning of each subsequent 90-day period (or portion thereof) while a Registration Default is continuing until all Registration Defaults have been cured, up to a maximum rate of Additional Interest of 1.00% per annum. Upon (w) the filing of the Exchange Offer Registration Statement or the Shelf Registration Statement, as the case may be, required hereunder (in the case of clause (i) of the preceding sentence), (x) the effectiveness of the Exchange Offer Registration Statement or the Shelf Registration Statement, as the case may be, required hereunder (in the case of clause (ii) of the preceding sentence), (y) the issuance of Exchange Securities in exchange for all Securities (other than the Private Exchange Securities) properly tendered and not withdrawn in the Exchange Offer (in the case of clause (iii) of the preceding sentence) or (z) the effectiveness of the Exchange Offer Registration Statement or the Shelf Registration Statement, as the case may be, required hereunder which had ceased to be effective (in the case of clause (iv) of the preceding sentence), Additional Interest as a result of the Registration Default described in such clause shall cease to accrue (but any accrued amount shall be payable) and the interest rate on the Securities shall revert to the original rate if no other Registration Default has occurred and is continuing.

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The Issuer shall notify the Trustee within three Business Days after each and every date on which an event occurs in respect of which Additional Interest is required to be paid (an “Event Date”). Additional Interest shall be paid by depositing with the Trustee, in trust, for the benefit of the Holders of Securities (other than Private Exchange Securities) on or before the applicable semiannual interest payment date, immediately available funds in sums sufficient to pay the Additional Interest then due. The Additional Interest due shall be payable on each interest payment date to the record Holder of Securities entitled to receive the interest payment to be paid on such date as set forth in the Indenture. Each obligation to pay Additional Interest shall be deemed to accrue from and including the day following the applicable Event Date.

(f) Specific Enforcement. Without limiting the remedies available to the Initial Purchaser and the Holders, the Issuer acknowledges that any failure by the Issuer to comply with its obligations under Section 2(a) and Section 2(b) hereof may result in material irreparable injury to the Initial Purchaser or the Holders for which there is no adequate remedy at law, that it would not be possible to measure damages for such injuries precisely and that, in the event of any such failure, the Initial Purchaser or any Holder may obtain such relief as may be required to specifically enforce the Issuer’s obligations under Section 2(a) and Section 2(b) hereof.

3. Registration Procedures. In connection with the obligations of the Issuer with respect to the Registration Statements pursuant to Sections 2(a) and 2(b) hereof, the Issuer shall:

(a) prepare and file with the SEC a Registration Statement or Registration Statements as prescribed by Sections 2(a) and 2(b) hereof within the relevant time period specified in Section 2 hereof on the appropriate form under the Securities Act, which form (i) shall be selected by the Issuer, (ii) shall, in the case of a Shelf Registration, be available for the sale of the Registrable Securities by the selling Holders thereof and (iii) shall comply as to form in all material respects with the requirements of the applicable form and include all financial statements required by the SEC to be filed therewith; and use their reasonable best efforts to cause such Registration Statement to become effective and remain effective in accordance with Section 2 hereof; provided, however, that if (1) such filing is pursuant to Section 2(b), or (2) a Prospectus contained in an Exchange Offer Registration Statement filed pursuant to Section 2(a) is required to be delivered under the Securities Act by any Participating Broker-Dealer who seeks to sell Exchange Securities, before filing any Registration Statement or Prospectus or any amendments or supplements thereto, the Issuer shall furnish to and afford the Holders of the Registrable Securities and each such Participating Broker-Dealer, as the case may be, covered by such Registration Statement, their counsel and the managing underwriters, if any, a reasonable opportunity to review copies of all such documents (excluding copies of any documents to be incorporated by reference therein and all exhibits thereto) proposed to be filed (at least 5 Business Days prior to such filing). The Issuer shall not file any Registration Statement or Prospectus or any amendments or supplements thereto in respect of which the Holders must be afforded an opportunity to review prior to the filing of such document if the Majority Holders or such Participating Broker-Dealer, as the case may be, their counsel or the managing underwriters, if any, shall reasonably object;

(b) prepare and file with the SEC such amendments and post-effective amendments to each Registration Statement as may be necessary to keep such Registration Statement effective for the Effectiveness Period or the Applicable Period, as the case may be;

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and cause each Prospectus to be supplemented by any required prospectus supplement and as so supplemented to be filed pursuant to Rule 424 (or any similar provision then in force) under the Securities Act, and comply with the provisions of the Securities Act, the Exchange Act and the rules and regulations promulgated thereunder applicable to it with respect to the disposition of all securities covered by each Registration Statement during the Effectiveness Period or the Applicable Period, as the case may be, in accordance with the intended method or methods of distribution by the selling Holders thereof described in this Agreement (including sales by any Participating Broker Dealer);

(c) in the case of a Shelf Registration, (i) notify each Holder of Registrable Securities, at least three Business Days prior to filing, that a Shelf Registration Statement with respect to the Registrable Securities is being filed and advising such Holder that the distribution of Registrable Securities will be made in accordance with the method selected by the Majority Holders; and (ii) furnish to each Holder of Registrable Securities and to each underwriter of an underwritten offering of Registrable Securities, if any, without charge, as many copies of each Prospectus, including each preliminary prospectus, and any amendment or supplement thereto and such other documents as such Holder or underwriter may reasonably request, in order to facilitate the public sale or other disposition of the Registrable Securities; and (iii) subject to the last paragraph of Section 3(s) hereof, hereby consent to the use of the Prospectus or any amendment or supplement thereto by each of the selling Holders of Registrable Securities in connection with the offering and sale of the Registrable Securities covered by the Prospectus or any amendment or supplement thereto;

(d) in the case of a Shelf Registration, use its reasonable best efforts to register or qualify the Registrable Securities under all applicable state securities or “blue sky” laws of such jurisdictions by the time the applicable Registration Statement is declared effective by the SEC as any Holder of Registrable Securities covered by a Registration Statement and each underwriter of an underwritten offering of Registrable Securities shall reasonably request in advance of such date of effectiveness, and do any and all other acts and things which may be reasonably necessary or advisable to enable such Holder and underwriter to consummate the disposition in each such jurisdiction of such Registrable Securities owned by such Holder; provided, however, that the Issuer shall not be required to (i) qualify as a foreign corporation or as a dealer in securities in any jurisdiction where it would not otherwise be required to qualify but for this Section 3(d), (ii) file any general consent to service of process or (iii) subject itself to taxation in any such jurisdiction if it is not so subject;

(e) in the case of (1) a Shelf Registration or (2) Participating Broker-Dealers who have notified the Issuer that they will be utilizing the Prospectus contained in the Exchange Offer Registration Statement as provided in Section 3(s) hereof, notify each Holder of Registrable Securities, or such Participating Broker-Dealers, as the case may be, their counsel and the managing underwriters, if any, promptly and confirm such notice in writing (i) when a Registration Statement has become effective and when any post-effective amendments and supplements thereto become effective, (ii) of any request by the SEC or any state securities authority for amendments and supplements to a Registration Statement or Prospectus or for additional information after the Registration Statement has become effective, (iii) of the issuance by the SEC or any state securities authority of any stop order suspending the effectiveness of, a Registration Statement or the initiation of any proceedings for that purpose, (iv) if the Issuer

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receives any notification with respect to the suspension of the qualification of the Registrable Securities or the Exchange Securities to be sold by any Participating Broker-Dealer for offer or sale in any jurisdiction or the initiation of any proceeding for such purpose, (v) of the happening of any event or the failure of any event to occur or the discovery of any facts or otherwise during the Effectiveness Period or Applicable Period, as the case may be, which makes any statement made in a Registration Statement or the related Prospectus untrue in any material respect or which causes such Registration Statement or Prospectus to omit to state a material fact necessary to make the statements therein (in the case of the Prospectus, in the light of the circumstances under which they were made) not misleading and (vi) the Issuer’s reasonable determination that a post-effective amendment to the Registration Statement would be appropriate;

(f) take reasonable efforts to obtain the withdrawal of any order suspending the effectiveness of a Registration Statement as soon as practicable;

(g) in the case of a Shelf Registration, furnish to each Holder of Registrable Securities, without charge, at least one conformed copy of each Registration Statement relating to such Shelf Registration and any post-effective amendment thereto (without documents incorporated therein by reference or exhibits thereto, unless requested);

(h) in the case of a Shelf Registration, cooperate with the selling Holders of Registrable Securities to facilitate the timely preparation and delivery of certificates representing Registrable Securities sold and not bearing any restrictive legends; and cause such Registrable Securities to be in such denominations (consistent with the provisions of the Indenture) and registered in such names as the selling Holders or the underwriters may reasonably request at least two Business Days prior to the closing of any sale of Registrable Securities;

(i) in the case of a Shelf Registration or an Exchange Offer Registration, upon the occurrence of any circumstance contemplated by Section 3(e)(ii), 3(e)(iii), 3(e)(v) or 3(e)(vi) hereof, use its reasonable best efforts to prepare a supplement or post-effective amendment to a Registration Statement or the related Prospectus or any document incorporated therein by reference or file any other required document (subject to Section 3(a)) so that, as thereafter delivered to the purchasers of the Registrable Securities or Exchange Securities to whom a Prospectus is being delivered by a Participating Broker-Dealer who has notified the Issuer that it will be utilizing the Prospectus contained in the Exchange Offer Registration Statement as provided in Section 3(s) hereof, such Prospectus will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; and to notify each Holder or Participating Broker-Dealer, as the case may be, to suspend use of the Prospectus as promptly as practicable after the occurrence of such an event, and each Holder and Participating Broker-Dealer hereby agrees to suspend use of the Prospectus until the Issuer has amended or supplemented the Prospectus to correct such misstatement or omission;

(j) in the case of a Shelf Registration, upon the filing of any document which is to be incorporated by reference into a Registration Statement or a Prospectus after the initial filing of a Registration Statement, provide a reasonable number of copies of such document to the Holders;

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(k) obtain a CUSIP number for all Exchange Securities or Registrable Securities, as the case may be, not later than the effective date of a Registration Statement, and provide the Trustee with certificates for the Exchange Securities or the Registrable Securities, as the case may be, in a form eligible for deposit with the Depositary;

(l) in the case of a Shelf Registration, enter into such agreements (including underwriting agreements) as are customary in underwritten offerings and take all such other appropriate actions as are reasonably requested in order to expedite or facilitate the registration or the disposition of such Registrable Securities, and in such connection, whether or not an underwriting agreement is entered into and whether or not the registration is an underwritten registration, at the time of effectiveness of such Shelf Registration: (i) make such representations and warranties to Holders of such Registrable Securities and the underwriters (if any), with respect to the business of the Issuer and its subsidiaries as then conducted or proposed to be conducted and the Registration Statement, Prospectus and documents, if any, incorporated or deemed to be incorporated by reference therein, in each case, in form and substance similar to the representations and warranties given by the Issuer in the Purchase Agreement and reasonably satisfactory to the managing underwriters (if any) and the Holders of a majority in principal amount of the Registrable Securities being sold, and confirm the same if and when requested; (ii) obtain opinions of counsel to the Issuer and the Guarantors and updates thereof, if appropriate, in form and substance similar to the opinion given by counsel to the Issuer and the Guarantors pursuant to the Purchase Agreement and reasonably satisfactory to the managing underwriters (if any) and the Holders of a majority in principal amount of the Registrable Securities being sold, addressed to each selling Holder and the underwriters (if any); (iii) obtain “cold comfort” letters and updates thereof in form and substance reasonably satisfactory to the managing underwriters (if any) from the independent certified public accountants of the Issuer and the Guarantors (and, if necessary, any other independent certified public accountants of any subsidiary of the Issuer or of any business acquired by the Issuer for which financial statements and financial data are, or are required to be, included in the Registration Statement), addressed to the selling Holders of Registrable Securities (if appropriate) and to each of the underwriters (if any), such letters to be in customary form and covering matters of the type customarily covered in “cold comfort” letters in connection with underwritten offerings and such other matters as reasonably requested by such selling Holders and underwriters; and (iv) if an underwriting agreement is entered into, the same shall contain indemnification provisions and procedures no less favorable than those set forth in Section 4 hereof (or such other less favorable provisions and procedures acceptable to Holders of a majority in aggregate principal amount of Registrable Securities covered by such Registration Statement and the managing underwriters or agents) with respect to all parties to be indemnified pursuant to said Section (including, without limitation, such underwriters and selling Holders). The above shall be done at each closing under such underwriting agreement, or as and to the extent required thereunder;

(m) if (1) a Shelf Registration is filed pursuant to Section 2(b) or (2) a Prospectus contained in an Exchange Offer Registration Statement filed pursuant to Section 2(a) is required to be delivered under the Securities Act by any Participating Broker-Dealer who seeks to sell Exchange Securities during the Applicable Period, make available for inspection by any selling Holder of such Registrable Securities being sold, or each such Participating Broker Dealer, as the case may be, any underwriter participating in any such disposition of Registrable Securities, if any, and any attorney, accountant or other agent retained by any such selling Holder or each such

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Participating Broker-Dealer, as the case may be, or underwriter (collectively, the “Inspectors”), at the offices where normally kept, during reasonable business hours, all financial and other records, pertinent corporate documents and properties of the Issuer and the Guarantors and their subsidiaries (collectively, the “Records”) as shall be reasonably necessary to enable them to exercise any applicable due diligence responsibilities, and cause the officers, directors and employees of the Issuer, the Guarantors and their subsidiaries to supply all information in each case reasonably requested by any such Inspector in connection with such Registration Statement. Records which the Issuer or the Guarantors determine to be confidential or any Records which they notify the Inspectors are confidential shall not be disclosed by the Inspectors unless (i) the disclosure of such Records is necessary in connection with the Inspectors’ assertion of any claims or actions or with their establishment of any defense in an action then pending before a court of competent jurisdiction, (ii) the release of such Records is ordered pursuant to a subpoena or other order from a court of competent jurisdiction or (iii) the information in such Records has been made generally available to the public. Each selling Holder of such Registrable Securities and each such Participating Broker-Dealer will be required to agree that information obtained by it as a result of such inspections shall be deemed confidential and shall not be used by it as the basis for any market transactions in the securities of the Issuer unless and until such is made generally available to the public. Each selling Holder of such Registrable Securities and each such Participating Broker-Dealer will be required to further agree that it will, prior to disclosure of such Records pursuant to clause (i) or (ii) above, give prompt notice to the Issuer and the Guarantors and allow the Issuer and the Guarantors at their expense to undertake appropriate action to prevent disclosure to the public of the Records deemed confidential;

(n) comply with all applicable rules and regulations of the SEC and make generally available to their security holders earnings statements satisfying the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder (or any similar rule promulgated under the Securities Act) no later than 180 days after the end of any 12-month period (i) commencing at the end of any fiscal quarter in which Registrable Securities are sold to underwriters in a firm commitment or reasonable best efforts underwritten offering and (ii) if not sold to underwriters in such an offering, commencing on the first day of the first fiscal quarter of the Issuer after the effective date of a Registration Statement, which statements shall cover said 12-month period;

(o) upon consummation of an Exchange Offer or a Private Exchange, obtain an opinion of counsel to the Issuer and the Guarantors addressed to the Trustee for the benefit of all Holders of Registrable Securities participating in the Exchange Offer or the Private Exchange, as the case may be, and which includes an opinion that (i) the Issuer has duly authorized, executed and delivered the Exchange Securities and Private Exchange Securities and the Indenture, and (ii) each of the Exchange Securities or the Private Exchange Securities, as the case may be, and the Indenture constitute a legal, valid and binding obligation of the Issuer and the Guarantors, enforceable against the Issuer and the Guarantors in accordance with its respective terms (in each case, with customary exceptions);

(p) if an Exchange Offer or a Private Exchange is to be consummated, upon delivery of the Registrable Securities by Holders to the Issuer (or to such other Person as directed by the Issuer) in exchange for the Exchange Securities or the Private Exchange Securities, as the case may be, the Issuer shall mark, or cause to be marked, on such Registrable Securities

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delivered by such Holders that such Registrable Securities are being cancelled in exchange for the Exchange Securities or the Private Exchange Securities, as the case may be; in no event shall such Registrable Securities be marked as paid or otherwise satisfied;

(q) cooperate with each seller of Registrable Securities covered by any Registration Statement and each underwriter, if any, participating in the disposition of such Registrable Securities and their respective counsel in connection with any filings required to be made with the NASD;

(r) use their reasonable best efforts to take all other steps necessary to effect the registration of the Registrable Securities covered by a Registration Statement contemplated hereby;

(s) (A) in the case of the Exchange Offer Registration Statement (i) include in the Exchange Offer Registration Statement a section entitled “Plan of Distribution,” which section shall be reasonably acceptable to the Initial Purchaser or another representative of the Participating Broker-Dealers, and which shall contain a summary statement of the positions taken or policies made by the staff of the SEC with respect to the potential “underwriter” status of any broker-dealer (a “Participating Broker-Dealer”) that holds Registrable Securities acquired for its own account as a result of market-making activities or other trading activities and that will be the beneficial owner (as defined in Rule 13d-3 under the Exchange Act) of Exchange Securities to be received by such broker-dealer in the Exchange Offer, whether such positions or policies have been publicly disseminated by the staff of the SEC or such positions or policies, in the reasonable judgment of the Initial Purchaser or such other representative, represent the prevailing views of the staff of the SEC, including a statement that any such broker-dealer who receives Exchange Securities for Registrable Securities pursuant to the Exchange Offer may be deemed a statutory underwriter and must deliver a prospectus meeting the requirements of the Securities Act in connection with any resale of such Exchange Securities, (ii) furnish to each Participating Broker-Dealer who has delivered to the Issuer the notice referred to in Section 3(e), without charge, as many copies of each Prospectus included in the Exchange Offer Registration Statement, including any preliminary prospectus, and any amendment or supplement thereto, as such Participating Broker-Dealer may reasonably request (iii) hereby consent to the use of the Prospectus forming part of the Exchange Offer Registration Statement or any amendment or supplement thereto, by any Person subject to the prospectus delivery requirements of the SEC, including all Participating Broker-Dealers, in connection with the sale or transfer of the Exchange Securities covered by the Prospectus or any amendment or supplement thereto, (iv) use its reasonable best efforts to keep the Exchange Offer Registration Statement effective and to amend and supplement the Prospectus contained therein in order to permit such Prospectus to be lawfully delivered by all Persons subject to the prospectus delivery requirements of the Securities Act for such period of time as such Persons must comply with such requirements in order to resell the Exchange Securities; provided, however, that such period shall not be required to exceed 180 days (or such longer period if extended pursuant to the last sentence of this Section 3(s) hereof) (the “Applicable Period”), and (v) include in the transmittal letter or similar documentation to be executed by an exchange offeree in order to participate in the Exchange Offer (x) the following provision:

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“If the exchange offeree is a broker-dealer holding Registrable Securities acquired for its own account as a result of marketmaking activities or other trading activities, it will deliver a prospectus meeting the requirements of the Securities Act in connection with any resale of Exchange Securities received in respect of such Registrable Securities pursuant to the Exchange Offer.”

and (y) a statement to the effect that by a Participating Broker-Dealer making the acknowledgment described in clause (x) and by delivering a Prospectus in connection with the exchange of Registrable Securities, such Participating Broker-Dealer will not be deemed to admit that it is an underwriter within the meaning of the Securities Act; and

(B) in the case of any Exchange Offer Registration Statement, the Issuer agrees to deliver to the Initial Purchaser or to Participating Broker-Dealers upon consummation of the Exchange Offer (i) an opinion of counsel substantially in the form attached hereto as Exhibit A, and (ii) an officers’ certificate containing certifications substantially similar to those set forth in Section 5(b) of the Purchase Agreement and such additional certifications as are customarily delivered in a public offering of debt securities.

The Issuer may require each seller of Registrable Securities as to which any registration is being effected to furnish to the Issuer such information regarding such seller and the proposed distribution of such Registrable Securities, as the Issuer may from time to time reasonably request in writing. The Issuer may exclude from such registration the Registrable Securities of any seller who fails to furnish any such information which the Issuer reasonably requires in order for the Shelf Registration Statement to comply with applicable law and SEC policy within a reasonable time after receiving such request (without the accrual of Additional Interest on such excluded Registrable Securities) and shall be under no obligation to include the Registrable Securities of such seller in the Shelf Registration Statement or to compensate any such seller for any lost income, interest or other opportunity foregone, or any liability incurred, as a result of the Issuer’s decision to exclude such seller.

In the case of (1) a Shelf Registration Statement or (2) Participating Broker-Dealers who have notified the Issuer that they will be utilizing the Prospectus contained in the Exchange Offer Registration Statement as provided in this Section 3(s) that are seeking to sell Exchange Securities and are required to deliver Prospectuses, each Holder or Participating Broker-Dealer, as the case may be, agrees that, upon receipt of any notice from the Issuer of the happening of any event of the kind described in Section 3(e)(ii), 3(e)(iii), 3(e)(v) or 3(e)(vi) hereof, such Holder or Participating Broker-Dealer, as the case may be, will forthwith discontinue disposition of Registrable Securities pursuant to a Registration Statement or Exchange Securities, as the case may be, until such Holder’s or Participating Broker-Dealer’s, as the case may be, receipt of the copies of the supplemented or amended Prospectus contemplated by Section 3(i) hereof or until it is advised in writing (the “Advice”) by the Issuer that the use of the applicable Prospectus may be resumed, and, if so directed by the Issuer, such Holder or Participating Broker-Dealer, as the case may be, will deliver to the Issuer (at the Issuer’s expense) all copies in such Holder’s or Participating Broker-Dealer’s, as the case may be, possession, other than one permanent file copy then in such Holder’s or Participating Broker Dealer’s, as the case may be, possession, of the Prospectus covering such Registrable Securities

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or Exchange Securities, as the case may be, current at the time of receipt of such notice. If the Issuer shall give any such notice to suspend the disposition of Registrable Securities or Exchange Securities, as the case may be, pursuant to a Registration Statement, (x) the Issuer shall use its reasonable best efforts to file and have declared effective (if an amendment) as soon as practicable an amendment or supplement to the Registration Statement and, in the case of an amendment, have such amendment declared effective as soon as practicable; provided, however, that the Issuer may postpone the filing of such amendment or supplement for a period not to extend beyond the earlier to occur of (I) 30 days after the date of the determination of the Board of Directors and (II) the day after the cessation of the circumstances upon which such postponement is based, if the members of the Issuer determine reasonably and in good faith that such filing would require disclosure of material information which the Issuer has a bona fide purpose for preserving as confidential; provided, further, however, that the Issuer shall be entitled to such postponement only once during any 12-month period and the exercise by the Issuer of its rights under this provision shall not relieve the Issuer of any obligation to pay Additional Interest under Section 2(e); and (y) the Issuer shall extend the period during which such Registration Statement shall be maintained effective pursuant to this Agreement by the number of days in the period from and including the date of the giving of such notice to and including the date when the Issuer shall have made available to the Holders or Participating Broker-Dealers, as the case may be, (x) copies of the supplemented or amended Prospectus necessary to resume such dispositions or (y) the Advice.

4. Indemnification and Contribution. (a) The Issuer agrees to indemnify and hold harmless the Initial Purchaser, each Holder, each Participating Broker-Dealer, each underwriter who participates in an offering of Registrable Securities, their respective affiliates, each Person, if any, who controls any of such parties within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act and each of their respective directors, officers, employees and agents, as follows:

(i) against any and all loss, liability, claim, damage and expense whatsoever, joint or several, as incurred, arising out of any untrue statement or alleged untrue statement of a material fact contained in any Registration Statement (or any amendment or supplement thereto), covering Registrable Securities or Exchange Securities, including all documents incorporated therein by reference, or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein not misleading or arising out of any untrue statement or alleged untrue statement of a material fact contained in any Prospectus (or any amendment or supplement thereto) or the omission or alleged omission therefrom of a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading;

(ii) against any and all loss, liability, claim, damage and expense whatsoever, joint or several, as incurred, to the extent of the aggregate amount paid in settlement of any litigation, or any investigation or proceeding by any court or governmental agency or body, commenced or threatened, or of any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission, if such settlement is effected with the prior written consent of the Issuer; and

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(iii) against any and all expenses whatsoever, as incurred (including reasonable fees and disbursements of one counsel chosen by the Initial Purchaser, such Holder, such Participating Broker-Dealer or any underwriter (except to the extent otherwise expressly provided in Section 4(c) hereof)), reasonably incurred in investigating, preparing or defending against any litigation, or any investigation or proceeding by any court or governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission, to the extent that any such expense is not paid under subparagraph (i) or (ii) of this Section 4(a);

provided, however, that this indemnity does not apply to any loss, liability, claim, damage or expense to the extent arising out of an untrue statement or omission or alleged untrue statement or omission (i) made in reliance upon and in conformity with written information furnished in writing to the Issuer or the Guarantors by the Initial Purchaser, such Holder, such Participating Broker-Dealer or any underwriter with respect to the Initial Purchaser, Holder, Participating Broker-Dealer or underwriter, as the case may be, expressly for use in the Registration Statement (or any amendment or supplement thereto) or in any Prospectus (or any amendment or supplement thereto) or (ii) contained in any preliminary prospectus if the Initial Purchaser, such Holder, such Participating Broker-Dealer or such underwriter failed to send or deliver a copy of the Prospectus (in the form it was first provided to such parties for confirmation of sales or as amended or supplemented pursuant to Section 3(i) prior to such confirmation of sales) to the Person asserting such losses, claims, damages or liabilities on or prior to the delivery of written confirmation of any sale of securities covered thereby to such Person in any case where such delivery is required by the Securities Act and a court of competent jurisdiction in a judgment not subject to appeal or final review shall have determined that such Prospectus would have corrected such untrue statement or omission. Any amounts advanced by the Issuer to an indemnified party pursuant to this Section 4 as a result of such losses shall be returned to the Issuer if it shall be finally determined by such a court in a judgment not subject to appeal or final review that such indemnified party was not entitled to indemnification by the Issuer.

(b) Each Holder agrees, severally and not jointly, to indemnify and hold harmless the Issuer, the Guarantors, the Initial Purchaser, each underwriter who participates in an offering of Registrable Securities and the other selling Holders and each of their respective directors, officers (including each officer of the Issuer who signed the Registration Statement), employees and agents and each Person, if any, who controls the Issuer, the Guarantors, the Initial Purchaser, any underwriter or any other selling Holder within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, against any and all loss, liability, claim, damage and expense whatsoever described in the indemnity contained in Section 4(a) hereof, as incurred, but only with respect to untrue statements or omissions, or alleged untrue statements or omissions, made in the Registration Statement (or any amendment thereto) or in any Prospectus (or any amendment or supplement thereto) in reliance upon and in conformity with written information furnished to the Issuer or the Guarantors by such selling Holder with respect to such Holder expressly for use in the Registration Statement (or any supplement thereto), or in any such Prospectus (or any amendment thereto); provided, however, that, in the case of the Shelf Registration Statement, no such Holder shall be liable for any claims hereunder in excess of the amount of net proceeds received by such Holder from the sale or other disposition of Registrable Securities pursuant to the Shelf Registration Statement.

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(c) Each indemnified party shall give notice as promptly as reasonably practicable to each indemnifying party of any action commenced against it in respect of which indemnity may be sought hereunder, but failure to so notify an indemnifying party shall not relieve such indemnifying party from any liability hereunder to the extent it is not materially prejudiced as a result thereof and in any event shall not relieve it from any liability which it may have otherwise than on account of this indemnity agreement. In the case of parties indemnified pursuant to Section 4(a) above, counsel to the indemnified parties shall be selected by the Initial Purchaser, and, in the case of parties indemnified pursuant to Section 4(b) above, counsel to the indemnified parties shall be selected by the Issuer. An indemnifying party may participate at its own expense in the defense of any such action; provided, however, that counsel to the indemnifying party shall not (except with the consent of the indemnified party) also be counsel to the indemnified party. If it so elects within a reasonable time after receipt of such notice, an indemnifying party, jointly with any other indemnifying parties receiving such notice, may assume the defense of such action with counsel chosen by it and approved by the indemnified parties defendant in such action, unless such indemnified parties reasonably object to such assumption on the ground that there may be legal defenses available to them which are different from or in addition to those available to such indemnifying party. If an indemnifying party assumes the defense of such action, the indemnifying parties shall not be liable for any fees and expenses of counsel for the indemnified parties incurred thereafter in connection with such action. In no event shall the indemnifying parties be liable for fees and expenses of more than one counsel (in addition to any local counsel) separate from their own counsel for all indemnified parties in connection with anyone action or separate but similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances. No indemnifying party shall, without the prior written consent of the indemnified parties, settle or compromise or consent to the entry of any judgment with respect to any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever in respect of which indemnification or contribution could be sought under this Section 4 (whether or not the indemnified parties are actual or potential parties thereto), unless such settlement, compromise or consent (i) includes an unconditional release of each indemnified party from all liability arising out of such litigation, investigation, proceeding or claim and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act by or on behalf of any indemnified party.

(d) If at any time an indemnified party shall have requested an indemnifying party to reimburse the indemnified party for reasonable fees and expenses of counsel, such indemnifying party agrees that it shall be liable for any settlement of the nature contemplated by Section 4(a)(ii) effected without its written consent if (i) such settlement is entered into more than 45 days after receipt by such indemnifying party of the aforesaid request, (ii) such indemnifying party shall have received notice of the terms of such settlement at least 30 days prior to such settlement being entered into and (iii) such indemnifying party shall not have reimbursed such indemnified party in accordance with such request prior to the date of such settlement. Notwithstanding the immediately preceding sentence, if at any time an indemnified party shall have requested an indemnifying party to reimburse the indemnified party for fees and expenses of counsel, such indemnifying party shall not be liable for any settlement of the nature contemplated by Section 7(a)(ii) effected without its prior written consent if such indemnifying party (i) reimburses such indemnified party in accordance with such request to the extent it considers such request to be reasonable and (ii) provides written notice to the indemnified party substantiating the unpaid balance as unreasonable, in each case prior to the date of such settlement.

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(e) In order to provide for just and equitable contribution in circumstances under which any of the indemnity provisions set forth in this Section 4 is for any reason held to be unavailable to the indemnified parties although applicable in accordance with its terms, the Issuer and the Holders shall contribute to the aggregate losses, liabilities, claims, damages and expenses of the nature contemplated by such indemnity agreement incurred by the Issuer, the Guarantors, the Initial Purchaser, the Holders and the Participating Broker-Dealers; provided, however, that no Person guilty of fraudulent misrepresentation (within the meaning of Section 11 (f) of the Securities Act) shall be entitled to contribution from any Person that was not guilty of such fraudulent misrepresentation. As between the Issuer, the Guarantors and the Holders, such parties shall contribute to such aggregate losses, liabilities, claims, damages and expenses of the nature contemplated by such indemnity agreement in such proportion as shall be appropriate to reflect the relative fault of the Issuer and the Guarantors on the one hand and of the Holder of Registrable Securities, the Participating Broker-Dealer or the Initial Purchaser, as the case may be, on the other hand in connection with the statements or omissions which resulted in such losses, liabilities, claims, damages or expenses, as well as any other relevant equitable considerations.

The relative fault of the Issuer and the Guarantors on the one hand and the Holder of Registrable Securities, the Participating Broker-Dealer or the Initial Purchaser, as the case may be, on the other hand shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Issuer, or the Guarantors, or by the Holder of Registrable Securities, the Participating Broker-Dealer or the Initial Purchaser, as the case may be, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.

The Issuer, the Guarantors and the Holders of the Registrable Securities and the Initial Purchaser agree that it would not be just and equitable if contribution pursuant to this Section 4 were determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to above in this Section 4.

For purposes of this Section 4, each affiliate of the Initial Purchaser or Holder, and each director, officer, employee, agent and Person, if any, who controls a Holder of Registrable Securities, the Initial Purchaser or a Participating Broker-Dealer within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act shall have the same fights to contribution as such other Person, and each member or director of the Issuer or a Guarantor, as the case may be, each officer of the Issuer who signed the Registration Statement, and each Person, if any, who controls the Issuer or the Guarantor within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act shall have the same rights to contribution as the Issuer or the Guarantor, as the case may be.

5. Participation in Underwritten Registrations. No Holder may participate in any underwritten registration hereunder unless such Holder (a) agrees to sell such Holder’s Registrable Securities on the basis provided in any underwriting arrangements approved by the

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Persons entitled hereunder to approve such arrangements and (b) completes and executes all reasonable questionnaires, powers of attorney, indemnities, underwriting agreements and other documents reasonably required under the terms of such underwriting arrangements. The Issuer shall be under no obligation to compensate any Holder for lost income, interest or other opportunity foregone, or other liability incurred, as a result of the Issuer’s decision to exclude such Holder from any underwritten registration if such Holder has not complied with the provisions of this Section 5 in all material respects following 5 business days’ written notice of noncompliance and the Issuer’s decision to exclude such Holder.

6. Selection of Underwriters. The Holders of Registrable Securities covered by the Shelf Registration Statement who desire to do so may sell the securities covered by such Shelf Registration in an underwritten offering. In any such underwritten offering, the underwriter or underwriters and manager or managers that will administer the offering will be selected by the Holders of a majority in aggregate principal amount of the Registrable Securities included in such offering; provided, however, that such underwriters and managers must be reasonably satisfactory to the Issuer.

7. Guarantors. The parties to this Agreement agree and acknowledge that all obligations of the Issuer under this Agreement are joint and several obligations of the Issuer and the Guarantors.

8. Miscellaneous.

(a) Rule 144 and Rule 144A. For so long as the Issuer is subject to the reporting requirements of Section 13 or 15 of the Exchange Act and any Registrable Securities remain outstanding, the Issuer covenants that it will file the reports required to be filed by them under the Securities Act and Section 13(a) or 15(d) of the Exchange Act and the rules and regulations adopted by the SEC thereunder, that if it ceases to be so required to file such reports, it will upon the request of any Holder of Registrable Securities (i) make publicly available such information as is necessary to permit sales pursuant to Rule 144 under the Securities Act, (ii) deliver such information to a prospective purchaser as is necessary to permit sales pursuant to Rule 144A under the Securities Act, and (iii) take such further action that is reasonable in the circumstances, in each case, to the extent required from time to time to enable such Holder to sell its Registrable Securities without registration under the Securities Act within the limitation of the exemptions provided by (a) Rule 144 under the Securities Act, as such rule may be amended from time to time, (b) Rule 144A under the Securities Act, as such rule may be amended from time to time, or (c) any similar rules or regulations hereafter adopted by the SEC. Upon the reasonable request of any Holder of Registrable Securities, the Issuer will deliver to such Holder a written statement as to whether it has complied with such requirements.

(b) No Inconsistent Agreements. The Issuer has not entered into nor will the Issuer on or after the date of this Agreement enter into any agreement which is inconsistent with the rights granted to the Holders of Registrable Securities in this Agreement or otherwise conflicts with the provisions hereof. The rights granted to the Holders hereunder do not in any way conflict with and are not inconsistent with the rights granted to the holders of the Issuer’s other issued and outstanding securities under any such agreements.

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(c) Amendments and Waivers. Except as permitted in paragraph (b) above, the provisions of this Agreement, including provisions of this sentence, may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given, otherwise than with the prior written consent of the Issuer and the Majority Holders; provided, however, that no amendment, modification, or supplement or waiver or consent to the departure with respect to the provisions of Section 4 hereof shall be effective as against any Holder of Registrable Securities unless consented to in writing by such Holder of Registrable Securities.

(d) Notices. All notices and other communications provided for or permitted hereunder shall be made in writing by hand-delivery, registered first-class mail, telecopier, or any courier guaranteeing overnight delivery (i) if to a Holder, at the most current address given by such Holder to the Issuer by means of a notice given in accordance with the provisions of this Section 8(d), which address initially is, with respect to the Initial Purchaser, the address set forth in the Purchase Agreement; and (ii) if to the Issuer, initially at the Issuer’s address set forth in the Purchase Agreement and thereafter at such other address, notice of which is given in accordance with the provisions of this Section 8(d).

All such notices and communications shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; five Business Days after being deposited in the mail, postage prepaid, if mailed; when receipt is acknowledged, if telecopied; and on the next Business Day, if timely delivered to an air courier guaranteeing overnight delivery.

Copies of all such notices, demands, or other communications shall be concurrently delivered by the Person giving the same to the Trustee, at the address specified in the Indenture.

(e) Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors, assigns and transferees of the Initial Purchaser, including, without limitation and without the need for an express assignment, subsequent Holders; provided, however, that nothing herein shall be deemed to permit any assignment, transfer or other disposition of Registrable Securities in violation of the terms of the Purchase Agreement or the Indenture. If any transferee of any Holder shall acquire Registrable Securities, in any manner, whether by operation of law or otherwise, such Registrable Securities shall be held subject to all of the terms of this Agreement, and by taking and holding such Registrable Securities, such Person shall be conclusively deemed to have agreed to be bound by and to perform all of the terms and provisions of this Agreement and such Person shall be entitled to receive the benefits hereof.

(f) Third Party Beneficiary. The Initial Purchaser shall be a third party beneficiary of the agreements made hereunder between the Issuer or the Guarantors, on the one hand, and the Holders, on the other hand, and shall have the right to enforce such agreements directly to the extent it deems such enforcement necessary or advisable to protect its rights or the rights of Holders hereunder.

(g) Counterparts. This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.

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(h) Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.

(i) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ANY PROVISIONS RELATING TO CONFLICTS OF LAWS. Specified times of day refer to New York City time.

(j) Severability. In the event that anyone or more of the provisions contained herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions contained herein shall not be affected or impaired thereby.

(k) Securities Held by the Issuer or any of its Affiliates. Whenever the consent or approval of Holders of a specified percentage of Registrable Securities is required hereunder, Registrable Securities held by the Issuer or any of their affiliates (as such term is defined in Rule 405 under the Securities Act) shall not be counted in determining whether such consent or approval was given by the Holders of such required percentage.

[Signature Pages Follow]

24

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.

NEWS AMERICA INCORPORATED
By:	/s/ David F. DeVoe
Name:	David F. DeVoe
Title:	Senior Executive Vice President and Chief Financial Officer
NEWS CORPORATION
NEWS AUSTRALIA HOLDINGS PTY LIMITED
FEG HOLDINGS, INC
FOX ENTERTAINMENT GROUP, INC.
NEWS AMERICA MARKETING FSI, LLC
NEWS PUBLISHING AUSTRALIA LIMITED
By:	/s/ David F. DeVoe
Name:	David F. DeVoe
Title:	Authorized Signatory for the Guarantors

CONFIRMED AND ACCEPTED, as of the date first above written: CITIGROUP GLOBAL MARKETS INC.
By	/s/ Citigroup Global Markets Inc.
	Authorized Signatory

26

Exhibit A

Form of Opinion of Counsel

1. Each of the Exchange Offer Registration Statement and the Prospectus; (other than the financial statements, Debentures or schedules thereto and other financial and statistical information and supplemental schedules included or referred to therein or omitted therefrom, as to which such counsel need express no opinion), complies as to form in all material respects with the applicable requirements of the Securities Act and the applicable rules and regulations promulgated under the Securities Act.

2. In the course of such counsel’s review and discussion of the contents of the Exchange Offer) Registration Statement and the Prospectus; with certain officers and other representatives of the Issuer and representatives of the independent certified public accountants of the Issuer, but without independent check or verification or responsibility for the accuracy, completeness or fairness of the statements contained therein, on the basis of the foregoing (reasonably relying as to materiality upon representations and opinions of officers and other representatives of the Issuer), no facts have come to such counsel’s attention which cause such counsel to believe that the Exchange Offer Registration Statement (other than the financial statements, Debentures and schedules thereto and other financial information contained or referred to therein, as to which such counsel need express no belief), at the time the Exchange Offer Registration Statement became effective and at the time of the consummation of the Exchange Offer, contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements contained therein not misleading, or that the Prospectus (other than the financial statements, Debentures and schedules thereto and other financial information contained or referred to therein, as to which such counsel need express no belief) contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements contained therein, in the light of the circumstances under which they were made, not misleading.

EX-4.3

Exhibit 4.3

NEWS AMERICA INCORPORATED,

Company,

NEWS CORPORATION,

NEWS HOLDINGS LIMITED,

NEWS AUSTRALIA HOLDINGS PTY LIMITED,

FEG HOLDINGS, INC.,

FOX ENTERTAINMENT GROUP, INC.,

NEWS AMERICA MARKETING FSI, LLC,

NEWS PUBLISHING AUSTRALIA LIMITED,

Guarantors

and

THE BANK OF NEW YORK,

Trustee

TENTH SUPPLEMENTAL INDENTURE

Dated as of March 14, 2005

Amending and Supplementing the

Amended and Restated Indenture

Dated as of March 24, 1993

Senior Securities

TENTH SUPPLEMENTAL INDENTURE, dated as of March 14, 2005, among News America Incorporated, a Delaware corporation (the “Company”), with its principal office located at 1211 Avenue of the Americas, New York, NY 10036, News Corporation, a Delaware corporation (“News Corporation”), News Holdings Limited (formerly known as, The News Corporation Limited), an Australia corporation (ABN 40 007 910 330) (“News Holdings”), News Australia Holdings Pty Limited (formerly known as Carlholt Pty Ltd), an Australia corporation (ABN 32 105 197 028) (“NAHPL”), FEG Holdings, Inc., Fox Entertainment Group, Inc., News America Marketing FSI, LLC, News Publishing Australia Limited, and The Bank of New York, a New York banking corporation (the “Trustee”), amending and supplementing the Amended and Restated Indenture, dated as of March 24, 1993 (the “Original Indenture”), among the Company, the guarantors named therein and the Trustee, which provided for the issuance from time to time of the Company’s senior debt securities to be issued in one or more series as provided therein (the “Securities”). (The Original Indenture, as supplemented by the First Supplemental Indenture, dated as of May 20, 1993, the Second Supplemental Indenture, dated as of May 28, 1993, the Third Supplemental Indenture, dated as of July 21, 1993, the Fourth Supplemental Indenture, dated as of October 20, 1995, the Fifth Supplemental Indenture, dated as of January 8, 1998, the Sixth Supplemental Indenture, dated as of March 1, 1999, the Seventh Supplemental Indenture, dated as of February 14, 2001, the Eighth Supplemental Indenture, dated as of June 27, 2003, the Ninth Supplemental Indenture, dated as of November 12, 2004, and this Tenth Supplemental Indenture, dated as of March 14, 2005 and as it may hereafter be supplemented is referred to herein as the or this “Indenture”.) Capitalized terms used herein and not otherwise defined herein have the meanings ascribed thereto in the Indenture.

RECITALS:

WHEREAS, on November 12, 2004, News Holdings effected a corporate reorganization in accordance with the Corporations Act of Australia pursuant to which the publicly held shares of News Holdings were exchanged for shares of News Corporation (the “Share Exchange”); and

WHEREAS, in connection with the Share Exchange, NAHPL became a wholly-owned Subsidiary of News Corporation and News Holdings became a Subsidiary of NAHPL and News Corporation; and

WHEREAS, on March 14, 2005, subject to the receipt of certain consents, all or substantially all of the assets of News Holdings will be transferred to NAHPL, which, on the date of such transfer, will continue to be a wholly owned Subsidiary of News Corporation (the “Asset Transfer”); and

WHEREAS, Section 801 of the Indenture provides that, without the consent of Holders, the parties to the Indenture may enter into an indenture supplemental to the Indenture to evidence the succession of another corporation to News Holdings and the assumption by such successor of the covenants of News Holdings contained in the Indenture and in the Securities; and

WHEREAS, Section 801 of the Indenture further provides that, without the consent of Holders, the parties to the Indenture may enter into an indenture supplemental to the Indenture to cure any ambiguity, to correct or supplement any provision of the Indenture which may be inconsistent with any other provision of the Indenture, or to make any other provisions with respect to matters or questions arising under the Indenture, provided that such action shall not adversely affect the interests of the Holders of Securities of any series in any material respect; and

WHEREAS, the Original Indenture is subject to the provisions of the United States Trust Indenture Act of 1939, as amended (the “TIA”), that are required to be part of the Original Indenture and the Indenture shall, to the extent applicable, be governed by such provisions; and

WHEREAS, the Company and each of the Guarantors have duly authorized the execution and delivery of this Tenth Supplemental Indenture and have done all things necessary to make this Tenth Supplemental Indenture a valid agreement in accordance with its terms.

NOW, THEREFORE, THIS INDENTURE WITNESSETH:

For and in consideration of the premises, it is mutually covenanted and agreed, for the equal and proportionate benefit of all Holders of the Securities or of any series thereof, as follows:

ARTICLE ONE

ORIGINAL INDENTURE

SECTION 101. Effect of Original Indenture.

Except as specifically provided in this Tenth Supplemental Indenture, the Original Indenture (as amended and supplemented prior to the date hereof) shall remain in full force and effect.

ARTICLE TWO

AMENDMENTS TO THE INDENTURE

SECTION 201. Amendments to the Indenture

Effective upon the Asset Transfer, in accordance with Section 801 of the Original Indenture:

(a) Without further action on the part of News Corporation, News Holdings or any other Person, (i) News Corporation shall assume all the obligations of News Holdings under the Securities and the Indenture, (ii) News Corporation shall succeed to, and be substituted for, and

2

may exercise every right and power of News Holdings under the Indenture with the same effect as if News Corporation had been named as “News Corporation” in the Indenture, and (iii) News Holdings shall be discharged and released from all obligations and covenants under the Indenture and the Securities.

(b) Section 101 of the Indenture shall be amended as follows:

(i) To delete the definition of News Holdings in its entirety.

(ii) To amend the definition of “Change of Control” by deleting the words “Ordinary Shares” and replacing them with the words “common stock.”

(c)   All references (in any form or terms) in the Indenture, the Securities and the Guarantees to News Corporation or News Holdings under its former name or any variation thereof, including News Corporation, shall be deemed to be references to News Corporation (and not News Holdings); provided that any such references in the definition of “Override Agreement” in Section 101 of the Indenture shall be deemed to refer to News Holdings.

(d)   News America Marketing FSI, Inc., a guarantor, has been converted from a Delaware corporation into a Delaware limited liability company named News America Marketing FSI, LLC.

ARTICLE THREE

MISCELLANEOUS

SECTION 301. Effect of Headings.

The Article and Section headings herein are for convenience of reference only and shall not affect the construction hereof.

SECTION 302. Governing Law.

Subject to the following sentence, this Tenth Supplemental Indenture shall be governed by, and construed in accordance with, the laws of the State of New York, without regard to principles of conflicts of laws. This Tenth Supplemental Indenture is subject to the provisions of the TIA that are required to be part of the Original Indenture and shall, to the extent applicable, be governed by such provisions.

SECTION 303. Counterparts.

This Tenth Supplemental Indenture may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

3

SECTION 304. Trustee.

The Trustee makes no representation as to the validity or sufficiency of this Tenth Supplemental Indenture. The recitals and statements herein are deemed to be those of the Company and the Guarantors and not of the Trustee.

4

IN WITNESS WHEREOF, the parties hereto have caused this Tenth Supplemental Indenture to be duly executed as of the day and year first above written.

News America Incorporated
By:	/s/ Lawrence A. Jacobs
Name:	Lawrence A. Jacobs
Title:	Senior Executive Vice President and General Counsel
News Holdings Limited, as Guarantor (until the Asset Transfer)
News Corporation (a Delaware corporation), as Guarantor
News Australia Holdings Pty Limited, as Guarantor
FEG Holdings, Inc., as Guarantor
Fox Entertainment Group, Inc., as Guarantor
News America Marketing FSI, LLC, as Guarantor
News Publishing Australia Limited, as Guarantor
By:	/s/ Lawrence A. Jacobs
Name:	Lawrence A. Jacobs
Title:	Senior Executive Vice President and General Counsel, News America Incorporated, as Attorney for the Guarantors

5

The Bank of New York, as Trustee
By:	/s/ Kisha A. Holder
Name:	Kisha A. Holder
Title:	Assistant Vice President

6

STATE OF NEW YORK	}
		ss.:
COUNTY OF NEW YORK

On this 14 day of March, 2005, before me personally appeared Lawrence A. Jacobs, who acknowledged himself to be the Senior Executive Vice President and General Counsel of News America Incorporated, and that he, as such Senior Executive Vice President and General Counsel, being authorized so to do, executed the foregoing instrument for the purposes therein contained, by signing in the name of such corporation as such Senior Executive Vice President and General Counsel.

IN WITNESS WHEREOF, I hereunto set my hand and official seal.

By:	/s/ Catherine B. McDermott
Name:	Catherine B. McDermott
Title:	Notary Public, State of New York
	No. 02MC4974028
	Qualified in Kings County
	Commission Expires November 5, 2006

[Notarial Seal]

7

EX-4.4

Exhibit 4.4

NEWS AMERICA INCORPORATED,

Company,

NEWS CORPORATION,

NEWS AUSTRALIA HOLDINGS PTY LIMITED,

FEG HOLDINGS, INC.,

FOX ENTERTAINMENT GROUP, INC.,

NEWS AMERICA MARKETING FSI, LLC,

NEWS PUBLISHING AUSTRALIA LIMITED,

Guarantors

and

THE BANK OF NEW YORK,

Trustee

ELEVENTH SUPPLEMENTAL INDENTURE

Dated as of March 21, 2005

Amending and Supplementing the

Amended and Restated Indenture

Dated as of March 24, 1993

Senior Securities

ELEVENTH SUPPLEMENTAL INDENTURE, dated as of March 21 2005, among News America Incorporated, a Delaware corporation (the “Company”), with its principal office located at 1211 Avenue of the Americas, New York, NY 10036, News Corporation, a Delaware corporation (“News Corporation”), News Australia Holdings Pty Limited, an Australia corporation (ABN 32 105 197 028) (“NAHPL”), FEG Holdings, Inc., a Delaware corporation, Fox Entertainment Group, Inc. (formerly known as Fox Acquisition Corp.), a Delaware corporation (“New FEG”), News America Marketing FSI, LLC, a Delaware limited liability company, News Publishing Australia Limited, a Delaware corporation, and The Bank of New York, a New York banking corporation (the “Trustee”), amending and supplementing the Amended and Restated Indenture, dated as of March 24, 1993 (the “Original Indenture”), among the Company, the guarantors named therein and the Trustee, which provided for the issuance from time to time of the Company’s senior debt securities to be issued in one or more series as provided therein. (The Original Indenture, as supplemented by the First Supplemental Indenture, dated as of May 20, 1993, the Second Supplemental Indenture, dated as of May 28, 1993, the Third Supplemental Indenture, dated as of July 21, 1993, the Fourth Supplemental Indenture, dated as of October 20, 1995, the Fifth Supplemental Indenture, dated as of January 8, 1998, the Sixth Supplemental Indenture, dated as of March 1, 1999, the Seventh Supplemental Indenture, dated as of February 14, 2001, the Eighth Supplemental Indenture, dated as of June 27, 2003, the Ninth Supplemental Indenture, dated as of November 12, 2004, the Tenth Supplemental Indenture, dated as of March 14, 2005, and this Eleventh Supplemental Indenture, dated as of March 21, 2005 and as it may hereafter be supplemented is referred to herein as the or this “Indenture”.) Capitalized terms used herein and not otherwise defined herein have the meanings ascribed thereto in the Indenture.

RECITALS:

WHEREAS, on January 10, 2005, News Corporation commenced an offer to exchange (the “Exchange Offer”) shares of News Corporation Class A common stock for all of the outstanding shares of Fox Entertainment Group, Inc. (“Old FEG”) Class A common stock; and

WHEREAS, on March 21, 2005, New FEG, a wholly owned subsidiary of News Corporation, will be the surviving corporation of a merger (the “Merger”) of Old FEG with and into New FEG, such Merger to be effected in order to convert any Old FEG Class A common stock into shares of News Corporation Class A common stock that News Corporation did not acquire in the Exchange Offer; and

WHEREAS, Section 801 of the Indenture provides that, without the consent of Holders, the parties to the Indenture may enter into an indenture supplemental to the Indenture to evidence the succession of another Person to any of the Guarantors and the assumption by such successor of the covenants of such guarantor contained in the Indenture; and

WHEREAS, the Original Indenture is subject to the provisions of the United States Trust Indenture Act of 1939, as amended (the “TIA”), that are required to be part of the Original Indenture and the Indenture shall, to the extent applicable, be governed by such provisions; and

WHEREAS, the Company and each of the Guarantors have duly authorized the execution and delivery of this Eleventh Supplemental Indenture and have done all things necessary to make this Eleventh Supplemental Indenture a valid agreement in accordance with its terms.

NOW, THEREFORE, THIS INDENTURE WITNESSETH:

For and in consideration of the premises, it is mutually covenanted and agreed, for the equal and proportionate benefit of all Holders of the Securities or of any series thereof, as follows:

ARTICLE ONE

ORIGINAL INDENTURE

SECTION 101. Effect of Original Indenture.

Except as specifically provided in this Eleventh Supplemental Indenture, the Original Indenture (as amended and supplemented prior to the date hereof) shall remain in full force and effect.

ARTICLE TWO

AMENDMENTS TO THE INDENTURE

SECTION 201. Amendments to the Indenture

Effective upon the Merger, in accordance with Section 801 of the Original Indenture:

(a) Without further action on the part of Old FEG, New FEG or any other Person, New FEG hereby acknowledges and agrees that, by operation of law, it succeeds to and assumes all the obligations of Old FEG under the Indenture.

(b) By reason of the Merger and the continuation, as Guarantors, of the Guarantors under the Indenture, all references in the Indenture to the “Guarantors” are hereby deemed to refer to each of such entities:

Name	Jurisdiction of Organization
News Corporation	Delaware
News Australia Holdings Pty Limited	Australia
FEG Holdings, Inc.	Delaware
Fox Entertainment Group, Inc. (formerly known as Fox Acquisition Corp.)	Delaware
News America Marketing FSI, LLC	Delaware
News Publishing Australia Limited	Delaware

2

ARTICLE THREE

MISCELLANEOUS

SECTION 301. Effect of Headings.

The Article and Section headings herein are for convenience of reference only and shall not affect the construction hereof.

SECTION 302. Governing Law.

Subject to the following sentence, this Eleventh Supplemental Indenture shall be governed by, and construed in accordance with, the laws of the State of New York, without regard to principles of conflicts of laws. This Eleventh Supplemental Indenture is subject to the provisions of the TIA that are required to be part of the Original Indenture and shall, to the extent applicable, be governed by such provisions.

SECTION 303. Counterparts.

This Eleventh Supplemental Indenture may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

SECTION 304. Trustee.

The Trustee makes no representation as to the validity or sufficiency of this Eleventh Supplemental Indenture. The recitals and statements herein are deemed to be those of the Company and the Guarantors and not of the Trustee.

3

IN WITNESS WHEREOF, the parties hereto have caused this Eleventh Supplemental Indenture to be duly executed as of the day and year first above written.

News America Incorporated
By:	/s/ Paula Wardynski
Name:	Paula Wardynski
Title:	Vice President
News Corporation, as Guarantor
News Australia Holdings Pty Limited, as Guarantor
FEG Holdings, Inc., as Guarantor
Fox Entertainment Group, Inc. (formerly known as Fox Acquisition Corp.), as Guarantor
News America Marketing FSI, LLC, as Guarantor
News Publishing Australia Limited, as Guarantor
By:	/s/ Paula Wardynski
Name:	Paula Wardynski
Title:	Vice President, News America Incorporated, as Attorney-in-Fact for the Guarantors

4

The Bank of New York, as Trustee
By:	/s/ Kisha A. Holder
Name:	Kisha A. Holder
Title:	Assistant Vice President

5

STATE OF NEW YORK	}
		ss.:
COUNTY OF NEW YORK

On this 21 day of March, 2005, before me personally appeared Paula Wardynski, who acknowledged herself to be the Vice President of News America Incorporated, and that she, as such Vice President, being authorized so to do, executed the foregoing instrument for the purposes therein contained, by signing in the name of such corporation as such Vice President.

IN WITNESS WHEREOF, I hereunto set my hand and official seal.

By:	/s/ Catherine B. McDermott
Name:	Catherine B. McDermott
Title:	Notary Public, State of New York
	No. 02MC4974028
	Qualified in Kings County
	Commission Expires November 5, 2006

[Notarial Seal]

6

EX-10.1

Exhibit 10.1

Summary Sheet

Compensation For Non-Executive Directors of News Corporation

Summary of compensation amounts

Cash (annual amount in US$)

1. Cash Retainer - $85,000

2. Committee Member Retainer

  Audit - $15,000

  Compensation - $10,000

  Nominating/Corporate Governance $10,000

3. Committee Chair Retainer:

  Audit - $25,000

  Compensation - $15,000

  Nominating/Corporate Governance - $15,000

4. Deferred Stock Retainer - $85,000 value

The annual retainer paid to non-executive directors is partly paid in cash and partly paid in deferred stock units for a total amount of $170,000 per year.

Cash

• Members of committees of the Board will receive a further retainer. The chairman of a committee will receive an additional retainer.

• There is no “per meeting attended” compensation.

• Non-executive directors who join or leave the board will receive a partial payment of the cash portion of the retainer.

Deferred Stock Units

• Non-executive directors are credited with the number of shares of News Corporation Class A Common Stock equal to $85,000 per year.

• The value of the shares will be paid to non-executive directors in cash on the fifth anniversary date of when it was credited to the directors’ account, unless such director leaves the board before such date.

• Upon a non-executive director’s end of service on the Board, such director will be paid the value of the shares credited to his or her account at the market value of such shares as of the date of the director’s end of service.

EX-12.1

Exhibit 12.1

News Corporation

Computation of Ratio of Earnings to Fixed Charges

(in Millions, Except Ratio Amounts)

(Unaudited)

	For the six months ended December 31, 2005			For the six months ended December 31, 2004
Earnings:
Income from continuing operations before income tax expense and minority interest in subsidiaries	$	1,979		$	1,598
Add:
Equity earnings from affiliates		(346	)		(63	)
Dividends received from affiliates		82			52
Fixed Charges (excluding capitalized interest and perpetual preference dividends)		440			392
Amortization of capitalized interest		23			26
Total earnings available for fixed charges	$	2,178		$	2,005
Fixed charges:
Interest on debt and finance lease charges	$	385		$	344
Capitalized interest		13			18
Perpetual preference dividends paid		—			10
Interest element on rental expense		55			48
Total fixed charges	$	453		$	420
Ratio of earnings to fixed charges		4.8			4.8

EX-31.1

Exhibit 31.1

Chairman and Chief Executive Officer Certification

Required by Rules 13a-14 and 15d-14 under the Securities Exchange Act of 1934, as amended

I, K. Rupert Murdoch, Chairman and Chief Executive Officer of News Corporation (“News Corporation” or the “Company”), certify that:

1. I have reviewed this quarterly report on Form 10-Q of News Corporation;

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this quarterly report;

4. The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and preparation of financial statements for the external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this quarterly report based on such evaluation; and

(d) Disclosed in this quarterly report any change in the Company’s internal control over financial reporting that occurred during the Company’s second quarter of fiscal 2006 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; and

5. The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s independent registered public accounting firm and the Audit Committee of the Company’s Board of Directors:

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting.

February 8, 2006

By:	/S/    K. RUPERT MURDOCH
	K. Rupert Murdoch
	Chairman and Chief Executive Officer

EX-31.2

Exhibit 31.2

Chief Financial Officer Certification

Required by Rules 13a-14 and 15d-14 under the Securities Exchange Act of 1934, as amended

I, David F. DeVoe, Senior Executive Vice President and Chief Financial Officer of News Corporation (“News Corporation” or the “Company”), certify that:

1. I have reviewed this quarterly report on Form 10-Q of News Corporation;

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this quarterly report;

4. The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and preparation of financial statements for the external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this quarterly report based on such evaluation; and

(d) Disclosed in this quarterly report any change in the Company’s internal control over financial reporting that occurred during the Company’s second quarter of fiscal 2006 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; and

5. The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s independent registered public accounting firm and the Audit Committee of the Company’s Board of Directors:

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting.

February 8, 2006

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

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE

SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of News Corporation on Form 10-Q for the fiscal quarter ended December 31, 2005, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), we, the undersigned officers of News Corporation, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that, to the best of our knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of News Corporation.

February 8, 2006

By:	/S/    K. RUPERT MURDOCH
	K. Rupert Murdoch
	Chairman and Chief Executive Officer
By:	/S/    DAVID F. DEVOE
	David F. DeVoe
	Senior Executive Vice President and Chief Financial Officer