10-Q

UNITED STATES

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, 2007

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 filer, 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.

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 1, 2008, 2,140,726,442 shares of Class A Common Stock, par value $0.01 per share, and 986,520,953 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, 2007 and 2006	3
		Consolidated Balance Sheets at December 31, 2007 (unaudited) and June 30, 2007 (audited)	4
		Unaudited Consolidated Statements of Cash Flows for the six months ended December 31, 2007 and 2006	5
		Notes to the Unaudited Consolidated Financial Statements	6
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	41
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	60
	Item 4.	Controls and Procedures	61
Part II.	Other Information
	Item 1.	Legal Proceedings	61
	Item 1A.	Risk Factors	61
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	64
	Item 3.	Defaults Upon Senior Securities	64
	Item 4.	Submission of Matters to a Vote of Security Holders	64
	Item 5.	Other Information	65
	Item 6.	Exhibits	66
	Signature		67

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,
	2007			2006			2007			2006
Revenues	$	8,590		$	7,844		$	15,657		$	13,758
Expenses:
Operating		5,443			5,341			9,851			9,095
Selling, general and administrative		1,442			1,153			2,732			2,255
Depreciation and amortization		287			206			609			413
Operating income		1,418			1,144			2,465			1,995
Other income (expense):
Equity (losses) earnings of affiliates		(50	)		249			196			492
Interest expense, net		(245	)		(212	)		(458	)		(412	)
Interest income		78			72			178			147
Other, net		187			18			187			446
Income before income tax expense and minority interest in subsidiaries		1,388			1,271			2,568			2,668
Income tax expense		(520	)		(431	)		(934	)		(969	)
Minority interest in subsidiaries, net of tax		(36	)		(18	)		(70	)		(34	)
Net income	$	832		$	822		$	1,564		$	1,665
Per share amounts:
Basic earnings	$	0.27					$	0.50
Class A				$	0.27					$	0.56
Class B				$	0.23					$	0.46
Diluted earnings	$	0.27					$	0.50
Class A				$	0.27					$	0.55
Class B				$	0.23					$	0.46

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

3

NEWS CORPORATION

CONSOLIDATED BALANCE SHEETS

(in millions, except share and per share amounts)

	At December 31, 2007		At June 30, 2007
	(unaudited)		(audited)
Assets
Current assets:
Cash and cash equivalents	$	3,495	$	7,654
Receivables, net		7,489		5,842
Inventories, net		2,719		2,039
Other		625		371
Total current assets		14,328		15,906
Non-current assets:
Receivables		509		437
Investments		10,959		11,413
Inventories, net		2,823		2,626
Property, plant and equipment, net		6,585		5,617
Intangible assets, net		13,998		11,703
Goodwill		18,294		13,819
Other non-current assets		1,420		822
Total assets	$	68,916	$	62,343
Liabilities and Stockholders’ Equity
Current liabilities:
Borrowings	$	836	$	355
Accounts payable, accrued expenses and other current liabilities		5,567		4,545
Participations, residuals and royalties payable		1,403		1,185
Program rights payable		916		940
Deferred revenue		856		469
Total current liabilities		9,578		7,494
Non-current liabilities:
Borrowings		13,213		12,147
Other liabilities		4,831		3,319
Deferred income taxes		5,503		5,899
Minority interest in subsidiaries		1,039		562
Commitments and contingencies
Stockholders’ Equity:
Class A common stock(1)		21		21
Class B common stock(2)		10		10
Additional paid-in capital		27,400		27,333
Retained earnings and accumulated other comprehensive income		7,321		5,558
Total stockholders’ equity		34,752		32,922
Total liabilities and stockholders’ equity	$	68,916	$	62,343

⁽¹⁾ Class A common stock, par value $0.01 per share, 6,000,000,000 shares authorized, 2,140,324,444 shares and 2,139,585,571 shares issued and outstanding, net of 1,777,514,167 and 1,777,593,698 treasury shares at par at December 31, 2007 and June 30, 2007, respectively.

⁽²⁾ Class B common stock, par value $0.01 per share, 3,000,000,000 shares authorized, 986,520,953 shares issued and outstanding, net of 313,721,702 treasury shares at par at December 31, 2007 and June 30, 2007.

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,
	2007			2006
Operating activities:
Net income	$	1,564		$	1,665
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization		609			413
Amortization of cable distribution investments		35			39
Equity earnings of affiliates		(196	)		(492	)
Cash distributions received from affiliates		158			121
Other, net		(187	)		(446	)
Minority interest in subsidiaries, net of tax		70			34
Change in operating assets and liabilities, net of acquisitions:
Receivables and other assets		(1,441	)		(1,014	)
Inventories, net		(667	)		(586	)
Accounts payable and other liabilities		794			971
Net cash provided by operating activities		739			705
Investing activities:
Property, plant and equipment, net of acquisitions		(699	)		(608	)
Acquisitions, net of cash acquired		(5,368	)		(292	)
Investments in equity affiliates		(21	)		(181	)
Other investments		(40	)		(297	)
Proceeds from sale of investments and other non-current assets		299			358
Net cash used in investing activities		(5,829	)		(1,020	)
Financing activities:
Borrowings		1,262			160
Repayment of borrowings		(132	)		(190	)
Issuance of shares		66			173
Repurchase of shares		(122	)		(59	)
Dividends paid		(186	)		(185	)
Other, net		22			—
Net cash provided by (used in) financing activities		910			(101	)
Net decrease in cash and cash equivalents		(4,180	)		(416	)
Cash and cash equivalents, beginning of period		7,654			5,783
Exchange movement on opening cash balance		21			71
Cash and cash equivalents, end of period	$	3,495		$	5,438

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

5

NEWS CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Note 1—Basis of Presentation

News Corporation, a Delaware corporation, with its subsidiaries (together “News Corporation” or the “Company”), is a diversified entertainment company, which manages and reports its businesses in eight segments: Filmed Entertainment, Television, Cable Network Programming, Direct Broadcast Satellite Television (“DBS”), Magazines and Inserts, Newspapers and Information Services, Book Publishing and Other.

The accompanying unaudited consolidated financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. In the opinion of management, all adjustments consisting only of normal recurring adjustments necessary for a fair presentation have been reflected in these unaudited consolidated financial statements. Operating results for the interim periods presented are not necessarily indicative of the results that may be expected for the fiscal year ending June 30, 2008.

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, 2007 as filed with the Securities and Exchange Commission (“SEC”) on August 23, 2007.

The consolidated financial statements include the accounts of News Corporation and its subsidiaries. Intercompany transactions and balances have been eliminated. Equity investments in which the Company exercises significant influence but does not exercise control and is not the primary beneficiary are accounted for using the equity method. Investments in which the Company is not able to exercise significant influence over the investee are 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 2007 amounts have been reclassified to conform to the fiscal 2008 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, 2007 and December 31, 2006 relate to the three and six month periods ended December 30, 2007 and December 31, 2006, respectively. For convenience purposes, the Company continues to date its financial statements as of December 31.

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,
	2007		2006		2007			2006
	(in millions)
Net income, as reported	$	832	$	822	$	1,564		$	1,665
Other comprehensive income:
Foreign currency translation adjustments		78		240		407			316
Unrealized holding gains (losses) on securities, net of tax		54		9		(28	)		84
Total comprehensive income	$	964	$	1,071	$	1,943		$	2,065

6

NEWS CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Recent Accounting Pronouncements

On July 1, 2007, the Company adopted the provisions of Financial Accounting Standards Board (“FASB”) Interpretation No. 48, “Accounting for Uncertainty in Income Taxes, an interpretation of FAS 109, Accounting for Income Taxes” (“FIN 48”), which did not have a material impact to the Company’s liability for unrecognized tax benefits. Total unrecognized tax benefits at the date of adoption of FIN 48 were $2.2 billion, of which $2.0 billion would affect the Company’s effective income tax rate, if and when recognized in future fiscal years. The increase in the accrued balance during the six months ended December 31, 2007 was $210 million. The six month movement includes $27 million of acquired unrecognized tax benefits from the acquisition of Dow Jones & Company Inc. (“Dow Jones”). The Company does not presently anticipate such uncertain income tax positions will significantly increase or decrease in the next 12 months; however, actual developments in this area could differ from those currently expected. The implementation impact includes an increase in Other Liabilities of approximately $1.2 billion offset by a similar reduction in deferred income taxes as of July 1, 2007.

The Company recognizes interest and penalty charges related to unrecognized tax benefits as income tax expense, which is consistent with the recognition in prior reporting periods. Through July 1, 2007, the Company had recorded liabilities for accrued interest of $258 million. The increase in the accrual for interest for the six months ended December 31, 2007 was $66 million, which includes $6 million of acquired interest from Dow Jones.

The Internal Revenue Service recently concluded its examination of the Company’s U.S. federal income tax returns through 2002, and has commenced examining the Company’s returns for the years subsequent to 2002. Additionally, the Company’s income tax returns for the years 2000 through 2006 are under examination in various foreign jurisdictions.

In December 2007, FASB issued SFAS No. 141(revised 2007), “Business Combinations” (“SFAS No. 141R”). SFAS No. 141R significantly changes the accounting for business combinations in a number of areas, including the treatment of contingent consideration, preacquisition contingencies, transaction costs, in-process research and development and restructuring costs. In addition, under SFAS No. 141R, changes in an acquired entity’s deferred tax assets and uncertain tax positions after the measurement period will impact income tax expense. SFAS No. 141R is effective for fiscal years beginning after December 15, 2008. The Company will adopt SFAS No. 141R beginning in the first quarter of fiscal 2010. This standard will change the Company’s accounting treatment for business combinations on a prospective basis.

In December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements, an amendment of ARB No. 51” (“SFAS No. 160”). SFAS No. 160 changes the accounting and reporting for minority interests, which will be recharacterized as noncontrolling interests and classified as a component of equity. This new consolidation method significantly changes the accounting for transactions with minority interest holders. SFAS No. 160 is effective for fiscal years beginning after December 15, 2008. The Company will adopt SFAS No. 160 beginning in the first quarter of fiscal 2010. The Company is currently evaluating what effects, if any, the adoption of SFAS No. 160 will have on the Company’s future results of operations and financial condition.

7

NEWS CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Note 2—Acquisitions, Disposals and Other Transactions

Fiscal 2008 Transactions

Acquisitions

In July 2007, the Company acquired Photobucket, a web-based provider of photo- and video-sharing services, for initial consideration of approximately $237 million in cash. Additional consideration of up to $50 million may be payable contingent upon the achievement of certain performance objectives.

On December 13, 2007, the Company completed the acquisition of Dow Jones pursuant to the Agreement and Plan of Merger, dated as of July 31, 2007, by and among the Company, Ruby Newco LLC, a wholly-owned subsidiary of the Company (“Ruby Newco”), Dow Jones and Diamond Merger Sub Corporation, as amended (the “Merger Agreement”). Pursuant to the terms of the Merger Agreement, each share of Dow Jones common stock was converted into the right to receive, at the election of the holder, either (x) $60.00 in cash or (y) 2.8681 Class B common units of Ruby Newco. Each Class B common unit of Ruby Newco is convertible after a period of time into a share of News Corporation Class A common stock. The consideration for the acquisition was approximately $5,700 million which consists of: $5,100 million in cash, assumed net debt of approximately $330 million, approximately $200 million in equity instruments and the Company anticipates making additional acquisition related cash payments of $100 million during the remainder of fiscal 2008. The results of Dow Jones have been included in the Company’s unaudited consolidated statement of operations from December 13, 2007, the date of acquisition.

As part of the Dow Jones acquisition, the Company assumed total debt of $378 million which consisted of: 3.875% notes due 2008 in the amount of $225 million, $131 million in commercial paper, and a $22 million variable interest note. In December, the Company retired all of the commercial paper outstanding.

In addition, in December 2007, the Company issued approximately 8 million Class B common units of Ruby Newco, approximately 7 million stock options and approximately 500,000 restricted share units over the Company’s Class A common stock, par value $0.01 per share (“Class A Common Stock”). The total fair value of these instruments was approximately $200 million.

News Corporation believes that this acquisition will position it as a leader in the financial news and information market and will enhance its ability to adapt to future challenges and opportunities within News Corporation’s Newspapers and Information Services segment and across the Company’s other related business segments.

The following Unaudited Pro Forma Consolidated Statements of Operations give effect to the Company’s acquisition of Dow Jones, as if the acquisition had occurred on July 1, 2006.

	For the three months ended December 31,				For the six months ended December 31,
	2007		2006(1)		2007		2006(1)
	(in millions, except per share amounts)
Revenue	$	9,159	$	8,322	$	16,712	$	14,642
Net income		835		809		1,536		1,606
Per share amounts:
Basic earnings	$	0.27			$	0.49
Class A			$	0.27			$	0.54
Class B			$	0.22			$	0.45
Diluted earnings	$	0.27			$	0.49
Class A			$	0.27			$	0.53
Class B			$	0.22			$	0.44

⁽¹⁾ Excludes discontinued operations

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NEWS CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

The unaudited pro forma data is provided for informational purposes only. The pro forma information is not necessarily indicative of the results that would have been obtained had the acquisition been completed at the dates indicated. In addition, the unaudited pro forma data does not purport to project the future financial position or operating results of the Company and Dow Jones.

Under the purchase method of accounting, the total purchase price is allocated to Dow Jones net tangible and intangible assets based upon Dow Jones’ estimated fair value as of the date of completion of the acquisition. Based upon the purchase price and the valuation performed, the preliminary purchase price allocation, which is subject to change based on the Company’s final analysis, is as follows:

	As of December 31, 2007
	(in millions)
Assets acquired:
Current assets	$	444
Property, plant and equipment		634
Other assets		448
Intangible assets		2,093
Goodwill		3,934
Total assets acquired	$	7,553
Liabilities assumed:
Current liabilities	$	491
Deferred income taxes		744
Deferred revenue		218
Other liabilities		425
Borrowings		378
Total liabilities assumed		2,256
Minority interest in subsidiaries		165
Net assets acquired	$	5,132

The Company has not finalized the detailed valuation studies necessary to arrive at the required estimates of the fair market value of the Dow Jones assets acquired and the liabilities assumed and the related allocations of purchase price. The Company allocated, on a preliminary basis, approximately $600 million to amortizable intangible assets primarily consisting of subscriber relationship intangible assets with a weighted-average useful life of 25 years. The Company also allocated, on a preliminary basis, approximately $1,500 million to trade names, which will not be amortized as they have an indefinite remaining useful life based primarily on their market position and the Company’s plans for continued indefinite use. Further, approximately $4,000 million was preliminarily allocated to goodwill, which represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired. The goodwill is not being amortized in accordance with SFAS No. 142, “Goodwill and Other Intangible Assets,” (“SFAS No. 142”) and is not deductible for tax purposes. The preliminary allocation of Goodwill is included in the Other segment, until the final valuation is complete. The amount of goodwill assumed will change depending on the fair values allocated to the tangible and intangible assets and liabilities acquired. For every $25 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 $1 million per fiscal year, representing amortization expense assuming an average useful life of 25 years.

9

NEWS CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Actual allocations may differ from these once the Company has completed the valuation studies necessary to finalize the required purchase price allocations and identified any necessary conforming accounting changes for Dow Jones. There can be no assurance that this finalization will not result in material changes to the purchase price allocation above.

As a result of the Dow Jones acquisition, the Company established and approved plans to integrate the acquired operations into the Company’s Newspapers and Information Services segment, for which the Company preliminarily recorded approximately $150 million in accrued liabilities in December 2007. These purchase accounting adjustments consist of separation payments for certain Dow Jones executives under the change in control plan Dow Jones had previously established, non-cancelable lease commitments and lease termination charges for leased facilities that will be exited and other contract termination costs associated with the restructuring activities. The finalization of certain of these actions could result in changes in the accrual amount.

Disposals

In November 2007, Dow Jones announced that it would explore strategic alternatives for the Ottaway Community Newspapers (the “Ottaway Newspapers”), which the Company acquired as part of the Dow Jones transaction. The strategic options include, but are not limited to, the possible sale of some or all of the Ottaway Newspapers’ publications and related properties. No agreement has yet been entered into with respect to any transaction involving the Ottaway Newspapers. At December 31, 2007, the assets and liabilities of the Ottaway Newspapers are classified as assets held for sale. Assets held for sale of $25 million and $423 million are included in Other current assets and Other non-current assets, respectively, and liabilities related to assets held for sale of $23 million are included in other current liabilities in the Company’s consolidated balance sheet at December 31, 2007.

In December 2007, Fox Television Stations, Inc., a Delaware corporation and a wholly owned subsidiary of the Company and FoxCo Acquisition Sub, LLC, a Delaware limited liability company and an indirect, wholly owned subsidiary of Oak Hill Capital Partners III, L.P. (“Oak Hill Capital”), entered into a Stock and Asset Purchase Agreement (the “Purchase Agreement”), pursuant to which the Company agreed to sell eight of its owned-and-operated FOX network affiliated television stations (the “Stations”) to Oak Hill Capital for approximately $1.1 billion in cash. The Stations include: WJW in Cleveland, OH; KDVR in Denver, CO; KTVI in St. Louis, MO; WDAF in Kansas City, MO; WITI in Milwaukee, WI; KSTU in Salt Lake City, UT; WBRC in Birmingham, AL; and WGHP in Greensboro, NC. The transaction is subject to customary closing conditions, including, among other things, (a) regulatory approvals, (b) the receipt of the consent of the Federal Communications Commission (the “FCC”) relating to the assignment or transfer of control of the television broadcasting licenses issued by the FCC for the Stations and (c) with regard to two of the Stations only, certain other actions by the FCC in connection with the digital television facilities for the two Stations. In the event the closing condition described in (c) above is not satisfied or waived by Oak Hill Capital, the transaction shall be effected as a sale of six of the Stations, excluding the Stations described in (c) above, at an adjusted price. The transaction is expected to be completed in the third calendar quarter of 2008.

Fiscal 2007 Transactions

Acquisitions

In November 2006, the Company, together with a local Turkish partner, acquired TGRT (now called “FOX TV”), a national general interest free-to-air broadcast television station in Turkey. The Company acquired its interest for approximately $103 million in cash plus acquisition related costs.

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NEWS CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

In December 2006, NDS Group plc (“NDS”), an indirect majority owned subsidiary of the Company, acquired Jungo Limited (“Jungo”), a developer and supplier of software for use in residential gateway devices, for approximately $91 million.

In January 2007, the Company and VeriSign, Inc. (“VeriSign”) formed a joint venture to provide entertainment content for mobile devices. The Company paid approximately $190 million for a controlling interest in VeriSign’s wholly-owned subsidiary, Jamba, which was combined with certain of the Company’s FOX Mobile Entertainment assets. The results of the joint venture have been included in the Company’s consolidated results of operations since January 2007. The Company and VeriSign have various put and call rights related to VeriSign’s ownership interests, including VeriSign’s right to put its interest in the joint venture to the Company for $150 million and $350 million, in fiscal 2010 and fiscal 2012, respectively. The Company accounts for the VeriSign put rights in accordance with Emerging Issues Task Force (“EITF”) Topic No. D-98, “Classification and Measurement of Redeemable Securities” (“EITF D-98”) because their exercise is outside the control of the Company and, accordingly, as of December 31, 2007, has reflected the accreted value of the put right in minority interest in subsidiaries in its unaudited consolidated balance sheet. The accreted value of VeriSign’s put right was determined by using the interest method and accreting the minority interest balance up to the fixed price put amount in fiscal 2010 and fiscal 2012. At December 31, 2007, the accreted value of VeriSign’s put right was determined using an annual interest rate of 12%.

In March 2007, the Company acquired Strategic Data Corporation (“SDC”), a developer of technology that allows websites to target advertisements to specific audiences. The Company acquired SDC for a total purchase price of $50 million, of which $40 million was in cash and $10 million in deferred consideration. The Company may be required to pay up to an additional $310 million through fiscal 2010 contingent upon SDC achieving specified advertising rate growth in future periods.

In April 2007, the Company completed its acquisition of Federal Publishing Company’s (“FPC”) magazines, newspapers and online properties in Australia from F Hannan Pty Limited for approximately $393 million.

In accordance with SFAS No. 142 the excess purchase price that has been allocated or has been preliminarily allocated to goodwill is not being amortized for all of the acquisitions noted above. Where the allocation of the excess purchase price is not final, the amount allocated to goodwill 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 $10 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 $1 million per fiscal year, representing amortization expense assuming an average useful life of ten years.

The aforementioned acquisitions were all accounted for in accordance with SFAS No. 141, “Business Combinations.”

Share Exchange Agreement

On December 22, 2006, the Company entered into a share exchange agreement (the “Share Exchange Agreement”) with Liberty Media Corporation (“Liberty”). Under the terms of the Share Exchange Agreement, Liberty will exchange its entire interest in the Company’s common stock (approximately 325 million shares of Class A Common Stock and 188 million shares of Class B common stock, par value $0.01 per share (“Class B Common Stock”)) for 100% of a News Corporation subsidiary (“Splitco”), whose holdings will consist of an

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NEWS CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

approximately 41% interest (approximately 470 million shares) in The DIRECTV Group, Inc. (“DIRECTV”) constituting the Company’s entire interest in DIRECTV, three of the Company’s Regional Sports Networks (“RSNs”) (FSN Northwest, FSN Pittsburgh and FSN Rocky Mountain (the “Three RSNs”)) and $588 million in cash, subject to adjustment. The transaction contemplated by the Share Exchange Agreement was approved by the Company’s Class B common stockholders on April 3, 2007, but remains subject to customary closing conditions, including, among other things, regulatory approvals and the absence of a material adverse effect on Splitco. If these conditions are satisfied, the transaction is expected to be completed no later than the first quarter of calendar 2008. The Company will enter into a non-competition agreement with DIRECTV and non-competition agreements with each of the Three RSNs, in each case, restricting its right to compete for a period of four years with DIRECTV and the Three RSNs in the respective regions in which such entities are operating on the date the Share Exchange Agreement is consummated.

Other Transactions

In fiscal 2007, the Company restructured the ownership interest in one of its majority-owned RSNs. The minority shareholder has a put right related to its ownership interest that is currently exercisable and is outside of the control of the Company. The Company accounts for this put arrangement in accordance with EITF D-98, and, as of December 31, 2007, has included the value of the put right in minority interest in subsidiaries in the consolidated balance sheet. The fair value of the minority shareholder’s put right was determined by using a discounted earnings (losses) before interest, taxes, depreciation, and amortization valuation model, assuming a 10% compounded annual growth rate and a 9% discount rate.

Note 3—Receivables, net

Receivables, net are presented net of an allowance for returns and doubtful accounts, which is an estimate of amounts that may not be collectible. In determining the allowance for returns, management analyzes historical returns, current economic trends and changes in customer demand and acceptance of the Company’s products. Based on this information, management reserves a percentage of each dollar of product sales that provide the customer with the right of return. The allowance for doubtful accounts is estimated based on historical experience, receivable aging, current economic trends, and specific identification of certain receivables that are at risk of not being paid. Receivables, net consist of:

	At December 31, 2007			At June 30, 2007
	(in millions)
Total Receivables	$	7,998		$	6,279
Less: Current receivables, net
Current receivables		8,792			6,944
Allowances for returns and doubtful accounts		(1,303	)		(1,102	)
Current receivables, net		7,489			5,842
Total non-current receivables	$	509		$	437

Note 4—United Kingdom Redundancy Program

In fiscal 2005, the Company announced its intention 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.

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In conjunction with this project, during the second quarter of fiscal 2006, 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 U.K. newspaper operations. The Program is in response to the reduced workforce that will be required as new printing presses and the new printing facilities 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, 2007, over 700 employees in the United Kingdom had already accepted severance agreements and are expected to leave the Company during fiscal 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 in connection with the Program. Changes in the program liabilities are as follows:

	For the three months ended December 31,						For the six months ended December 31,
	2007			2006			2007			2006
	(in millions)						(in millions)
Beginning of period	$	99		$	112		$	127		$	109
Additions (included in Operating expenses)		6			6			15			10
Payments		(16	)		(1	)		(55	)		(2	)
Foreign exchange movements		(3	)		6			(1	)		6
End of period	$	86		$	123		$	86		$	123

At December 31, 2007, all program liabilities were included in other current liabilities in the unaudited consolidated balance sheet. The Company expects to record an additional provision of approximately $3 million during the remainder of fiscal 2008 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 during the remainder of fiscal 2008.

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Note 5—Inventories, net

The Company’s inventories were comprised of the following:

	At December 31, 2007			At June 30, 2007
	(in millions)
Programming rights	$	3,069		$	2,390
Books, DVDs, paper and other merchandise		543			497
Filmed entertainment costs:
Films:
Released (including acquired film libraries)		468			557
Completed, not released		13			—
In production		544			450
In development or preproduction		122			82
		1,147			1,089
Television productions:
Released (including acquired libraries)		516			487
Completed, not released		—			13
In production		262			185
In development or preproduction		5			4
		783			689
Total filmed entertainment costs, less accumulated amortization(a)		1,930			1,778
Total inventories, net		5,542			4,665
Less: current portion of inventories, net(b)		(2,719	)		(2,039	)
Total non-current inventories, net	$	2,823		$	2,626

^(a) Does not include $537 million and $553 million of net intangible film library costs as of December 31, 2007 and June 30, 2007, respectively, which are included in intangible assets subject to amortization in the consolidated balance sheets.

^(b) Current inventory as of December 31, 2007 and June 30, 2007 was comprised of programming rights ($2,211 million and $1,578 million, respectively), books, DVDs, paper and other merchandise.

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Note 6—Investments

The Company’s investments were comprised of the following:

		Ownership Percentage	At December 31, 2007		At June 30, 2007
Equity investments:			(in millions)
The DIRECTV Group, Inc.(1)	DBS operator principally in the U.S.	41%(2)	$	7,451	$	7,224
Gemstar-TV Guide International, Inc.(1)	U.S. print and electronic guidance company	41%		769		717
British Sky Broadcasting Group plc(1)	U.K. DBS operator	39%		1,068		1,193
China Network Systems(3)	Taiwan cable TV operator	various		14		242
Sky Network Television Ltd.	New Zealand media company	44%		331		314
National Geographic Channel (US)(4)	U.S. cable channel	67%		—		316
Other equity method investments		various		719		771
Other investments		various		607		636
			$	10,959	$	11,413

⁽¹⁾ The market values of the Company’s investments in DIRECTV, Gemstar-TV Guide International Inc. (“Gemstar-TV Guide”) and British Sky Broadcasting Group plc (“BSkyB”) were $11,008 million, $841 million and $8,572 million, respectively, at December 31, 2007.

⁽²⁾ The Company’s ownership in DIRECTV increased from approximately 39% at June 30, 2007 to approximately 41% at December 31, 2007 due to DIRECTV’s share buyback program.

⁽³⁾ In July 2007, the Company and its joint venture partner sold a majority of the cable systems in Taiwan, in which the Company maintains a minority interest ownership, to a third party. (See Fiscal Year 2008 Disposals and Other Transactions below for further discussion)

⁽⁴⁾ Effective September 30, 2007, National Geographic Television agreed to give the Company control over National Geographic Channel (US) (“NGC US”) in which the Company has a 67% equity interest. Prior to September 30, 2007 the Company had 67% ownership but did not control this entity as it did not hold a majority on its board of directors, was unable to dictate operating decision making and it was not a variable interest entity. (See Fiscal Year 2008 Disposals and Other Transactions below for further discussion)

Fiscal Year 2008 Disposals and Other Transactions

In July 2007, the Company and its joint venture partner sold a majority of the cable systems in Taiwan, in which the Company maintains a minority interest ownership, to a third party. The Company recognized total consideration of $315 million of which $288 million was paid in cash and $27 million is receivable subject to final closing adjustments. The Company recognized a pre-tax gain of approximately $102 million on the sale included in Other, net in the unaudited consolidated statement of operations for the six months ended December 31, 2007. The Company and its joint venture partner intend to sell the remaining Taiwan cable systems in fiscal 2008.

Effective September 30, 2007, National Geographic Television agreed to give the Company control over NGC US in which the Company has a 67% equity interest. Accordingly, the results of NGC US were included in the Company’s unaudited consolidated results of operations beginning October 1, 2007.

During the six months ended December 31, 2007, the Company effectively acquired an additional 27% stake in NGC Network (UK) Limited (“NGC UK”) in exchange for a 23% interest NGC Network International LLC (“NGC International”) and a 14% interest in NGC Network Latin America LLC (“NGC Latin America”). As a result of this transaction, the Company owns 52% of NGC International, NGC Latin America and NGC UK. In January 2007, the Company obtained operating control over NGC International and NGC Latin America

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and has included their results in the Company’s consolidated results of operations since January 2007. The Company has included the operating results of NGC UK in the Company’s consolidated results in the six months ended December 31, 2007.

In December 2007, Macrovision Corporation agreed to acquire Gemstar-TV Guide in a cash and stock transaction. The closing of this transaction is subject to customary closing conditions, including the approval of the shareholders of both Macrovision Corporation and Gemstar-TV Guide.

Fiscal Year 2007 Acquisitions and Disposals

In August 2006, the Company sold a portion of its equity investment in Phoenix Satellite Television Holdings Limited (“Phoenix”), representing a 19.9%, stake for approximately $164 million. The Company recognized a pre-tax gain of approximately $136 million on the sale included in Other, net in the unaudited consolidated statement of operations for the six months ended December 31, 2006. The Company retained a 17.6% stake in Phoenix, which is accounted for under the cost method of accounting and, accordingly, the carrying value is adjusted to market value each reporting period as required under SFAS No. 115, “Accounting for Certain Investments in Debt and Equity Securities.”

In August 2006, the Company completed the sale of its investment in SKY Brasil, a Brazilian DTH platform, to DIRECTV for approximately $300 million in cash which was received in fiscal 2005 resulting in a total pre-tax gain of $426 million on the sale. Of this total gain, the Company recognized a pre-tax gain of approximately $261 million, which was included in Other, net in the consolidated statement of operations for the fiscal year ended June 30, 2007. The Company deferred the remaining $165 million of its total gain due to its indirect retained interest through the Company’s ownership of DIRECTV. The Company will recognize the deferred portion of the gain on SKY Brasil upon disposition of its investment in DIRECTV or DIRECTV’s disposition of its investment in SKY Brasil. The total gain of $426 million was greater than the total consideration received due to the recognition of losses in excess of the carrying amount of the investment as the Company was committed to provide further financial support to SKY Brasil. As a result of the transaction, the Company was released from its SKY Brasil transponder lease guarantee and was released from its SKY Brasil credit agreement guarantee in January 2007.

In December 2006, the Company acquired 25% stakes in each of NGC International and NGC UK joint ventures for a combined total of approximately $154 million. These two joint ventures produce and distribute the National Geographic Channel in various international markets. The transaction increased the Company’s interest in NGC International to 75% with National Geographic Television holding the remaining interest. In January 2007, National Geographic Television agreed to grant the Company operating control over these entities. Accordingly, the results of NGC International and NGC Latin America have been included in the Company’s consolidated results of operations since January 2007.

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,
	2007			2006		2007		2006
	(in millions)					(in millions)
Revenues	$	7,476		$	6,379	$	14,198	$	12,053
Operating income		928			1,005		1,783		1,970
Income (loss) from continuing operations		(49	)		604		439		1,191
Net income (loss)		(49	)		604		439		1,191

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Note 7—Goodwill and Other Intangible Assets

In accordance with SFAS No. 142, the Company’s intangible assets and related accumulated amortization are as follows:

	Weighted average useful lives	As of December 31, 2007		As of June 30, 2007
		(in millions)
FCC licenses	Indefinite-lived	$	6,910	$	6,910
Distribution networks	Indefinite-lived		754		750
Publishing rights & imprints	Indefinite-lived		506		506
Newspaper mastheads(1)	Indefinite-lived		2,437		918
Other(1)	Indefinite-lived		1,428		1,355
Intangible assets not subject to amortization			12,035		10,439
Film library, net of accumulated amortization of $86 million and $70 million as of December 31, 2007 and June 30, 2007, respectively	20 years		537		553
Other intangible assets, net of accumulated amortization of $297 million and $222 million as of December 31, 2007 and June 30, 2007, respectively(1)	3 – 25 years		1,426		711
Total intangibles, net		$	13,998	$	11,703

⁽¹⁾ Intangible balances increased primarily due to the acquisition of Dow Jones. (See Note 2—Acquisitions, Disposals and Other Transactions for further discussion of the purchase price allocation)

The changes in carrying value of goodwill, by segment, are as follows:

	Balance as of June 30, 2007		Additions		Adjustments			Balance as of December 31, 2007
	(in millions)
Filmed Entertainment	$	1,071	$	—	$	—		$	1,071
Television		3,284		—		—			3,284
Cable Network Programming		4,915		391		(44	)		5,262
Direct Broadcast Satellite Television		592		—		52			644
Magazines & Inserts		257		—		—			257
Newspapers and Information Services		1,395		—		40			1,435
Book Publishing		2		—		—			2
Other		2,303		4,156		(120	)		6,339
Total goodwill	$	13,819	$	4,547	$	(72	)	$	18,294

Goodwill balances increased $4,475 million during the six months ended December 31, 2007, primarily as a result of new acquisitions. The increased goodwill balance at the Other segment arose from the acquisitions of Dow Jones and Photobucket (See Note 2—Acquisitions, Disposals and Other Transactions.) The consolidation of NGC US beginning October 1, 2007 led to an increase in goodwill at the Cable segment (See Note 6—Investments.) Adjustments primarily relate to the finalization of purchase price allocations for previously announced acquisitions and foreign currency translation adjustments.

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Note 8—Borrowings

Bank Loans

The Company previously entered into two loan agreements with the European Bank for Reconstruction and Development (the “EBRD”) and had an outstanding balance of $154 million under these loans at June 30, 2006. In August 2006, the Company entered into a loan agreement with Raiffeisen Zentralbank Österreich AG (“RZB”) for $300 million and repaid all amounts outstanding under the Company’s loan agreements with the EBRD. As of December 31, 2007, $106 million remains available for future use under the RZB loan. The RZB loan bears interest at LIBOR for a period equal to each one, three or six month interest period, plus a margin of up to 2.85% per annum dependent upon certain financial metrics. Principal amounts under the RZB loan are to be repaid in equal amounts every six months starting on the second anniversary of the date of the agreement until the fifth anniversary of the date of the agreement. The remaining available amount under the RZB loan may be drawn prior to the second anniversary of the date of the agreement. The loans are secured by certain guarantees, bank accounts and share pledges of the Company’s Russian operating subsidiaries.

Notes due 2037

In November 2007, the Company issued $1,250 million of 6.65% Senior Notes due 2037. The net proceeds of approximately $1,248 million will be used for general corporate purposes. These notes were issued under the Amended and Restated Indenture, dated as of March 24, 1993, as supplemented, among News America Incorporated, the guarantor named therein and The Bank of New York Mellon Corporation, as Trustee.

Note 9—Stockholders’ Equity

Rights of Holders of Common Stock

On August 8, 2006, the Company announced that, in accordance with the terms of the settlement of a lawsuit regarding the Company’s stockholder rights plan, the Company’s Board of Directors (the “Board”) had approved the adoption of an Amended and Restated Rights Plan (the “Rights Plan”), extending the term of the Company’s original stockholder rights plan from November 7, 2007 to October 20, 2008. The Board has the right to extend the term for an additional year if the situation with Liberty has not, in the Board’s judgment, been resolved. The terms of the Rights Plan remain the same as the Company’s original stockholder rights plan in all other material respects. Pursuant to the terms of the settlement, on October 20, 2006, the Rights Plan was presented for a vote of the Company’s Class B stockholders at the Company’s 2006 annual meeting of stockholders and the stockholders voted in favor of its approval. On January 3, 2007, the Rights Plan was amended to allow for the grant of an irrevocable proxy to Liberty in connection with the Share Exchange Agreement. The Company has announced that it intends to redeem the rights issued under the Rights Plan if the transactions contemplated under the Share Exchange Agreement are consummated. (See Note 2—Acquisitions, Disposals and Other Transactions for further discussion of the Share Exchange Agreement)

Dividends

The Company declared a dividend of $0.06 per share of Class A Common Stock and $0.05 per share of Class B Common Stock in the three months ended September 30, 2007, which was paid in October 2007 to stockholders of record on September 12, 2007. The total aggregate dividend paid to stockholders in October 2007 was approximately $179 million.

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Repurchase Program

In June 2005, the Company announced a stock repurchase program under which the Company was authorized to acquire from time to time up to an aggregate of $3 billion in Class A Common Stock and Class B Common Stock. In May 2006, the Company announced that the Board had authorized increasing the total amount of the stock repurchase program to $6 billion. The remaining authorized amount under the Company’s stock repurchase program at December 31, 2007, excluding commissions, was approximately $2 billion.

Note 10—Equity Based Compensation

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

	For the three months ended December 31,				For the six months ended December 31,
	2007		2006		2007		2006
	(in millions)				(in millions)
Equity-based compensation	$	34	$	37	$	72	$	66
Cash received from exercise of equity-based compensation	$	27	$	100	$	56	$	159
Total intrinsic value of options exercised	$	18	$	48	$	42	$	79

At December 31, 2007, the Company’s total compensation cost related to non-vested stock options, restricted stock units (“RSUs”) and stock appreciation rights not yet recognized for all plans was approximately $292 million, the majority of which is expected to be recognized over the next three fiscal years. Compensation expense on all equity-based awards is recognized on a straight-line basis over the vesting period of the entire award.

Stock options exercised during the six months ended December 31, 2007 and 2006 resulted in the Company’s issuance of approximately 4 million and 11 million shares of Class A Common Stock, respectively. The Company recognized a tax benefit on stock options exercised of $9 million and $26 million for the six months ended December 31, 2007 and 2006, respectively.

During the six months ended December 31, 2007, the Company issued 5.6 million RSUs. These RSUs will be settled in shares of Class A Common Stock upon vesting, except for approximately 1 million RSUs that will be settled in cash. RSUs granted to executive directors are settled in cash and certain awards granted to employees in certain foreign locations are settled in cash. At December 31, 2007 and June 30, 2007, the liability for cash-settled RSUs was $33 million and $47 million, respectively.

During the six months ended December 31, 2007 and 2006, approximately 5.3 million and 4.0 million RSUs vested, respectively, of which approximately 4.6 million and 3.4 million, respectively, were settled in Class A Common Stock, before statutory tax withholdings, and the remaining RSUs were settled in cash. The Company recognized a tax benefit on vested RSUs of $5 million and $7 million for the six months ended December 31, 2007 and 2006, respectively.

Note 11—Commitments and Guarantees

Commitments

In July 2007, the Company entered into a contract with the Big Ten Conference for rights to telecast certain Big Ten Conference sporting events through fiscal 2032. The Company will pay approximately $2.8 billion over the term of the contract for these rights.

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In November 2007, the Company entered into a long-term supply contract pursuant to which the Company will purchase paper for its newspaper printing facilities in the United Kingdom from a third party. The contract requires the Company to purchase a minimum of $590 million of paper from this third party through fiscal 2015.

In December 2007, as part of the Dow Jones acquisition, the Company assumed approximately $994 million of commitments previously entered into by Dow Jones which included $247 million of indebtedness at December 31, 2007.

Other than previously disclosed in the notes to these unaudited consolidated financial statements, the Company’s commitments have not changed significantly from disclosures included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2007 filed with the SEC on August 23, 2007.

Guarantees

Other than previously disclosed in the notes to these unaudited consolidated financial statements, the Company’s guarantees have not changed significantly from disclosures included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2007 filed with the SEC on August 23, 2007.

Note 12—Contingencies

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 Racketeer Influenced and Corrupt Organizations (“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 complaint 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’s management believes these surviving claims are without merit and intends to vigorously defend against them.

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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 a Second Amended Answer with Counterclaims, which Echostar answered on December 27, 2005. NDS filed motions for summary judgment dismissing EchoStar’s claims and EchoStar filed a motion for summary judgment dismissing NDS’ counterclaims on October 29, 2007. Those motions were heard on January 7, 2008. On January 16, 2008, the court granted the motions in part and denied them in part. The court has set this case to go to trial in April 2008.

Sogecable Litigation

On July 25, 2003, Sogecable, S.A. and its subsidiary Canalsatellite Digital, S.L., Spanish satellite broadcasters and customers of Canal+ Technologies SA (together, “Sogecable”), filed an action against NDS in the United States District Court for the Central District of California. Sogecable filed an amended complaint on October 9, 2003, which purported to allege claims for violation of the DMCA and the federal RICO statute. The amended complaint also purported to allege claims for interference with contract and 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. Sogecable filed a second amended complaint. NDS filed a motion to dismiss the second amended complaint on March 31, 2004. On August 4, 2004, the court issued an order dismissing the second amended complaint in its entirety. Sogecable had until October 4, 2004 to file a third amended complaint. On October 1, 2004, Sogecable notified the court that it would not be filing a third amended complaint, but would appeal the court’s entry of final judgment dismissing the suit to the United States Ninth Circuit Court of Appeals. On December 14, 2006, the appellate court issued a memorandum decision reversing the district court’s dismissal. On January 26, 2007, NDS filed its petition for rehearing by an en banc panel of the United States Ninth Circuit Court of Appeals. On February 21, 2007, the petition was denied. On June 11, 2007, NDS filed a petition for a Writ of Certiorari in the United States Supreme Court seeking reversal of the Ninth Circuit Court of Appeals’ decision. On August 27, 2007, NDS renewed its motion to dismiss the second amended complaint on grounds not previously decided. On October 1, 2007, the petition for a Writ of Certiorari was denied. On January 25, 2008, the court issued an order granting-in-part and denying-in-part the Company’s renewed motion to dismiss Sogecable’s second amended complaint. The court dismissed Sogecable’s claim for tortious interference with prospective economic advantage, but allowed Sogecable to proceed on its RICO and DMCA claims, as well as its claim for tortious interference with contract. The court has set June 2, 2009 as the trial date. NDS believes that Sogecable’s claims are without merit and will continue to vigorously defend itself in this matter.

Intermix

FIM Transaction

On August 26, 2005 and August 30, 2005, two purported class action lawsuits captioned, respectively, Ron Sheppard v. Richard Rosenblatt et. al., and John Friedmann v. Intermix Media, Inc. et al., were filed in the California Superior Court, County of Los Angeles. Both lawsuits named as defendants all of the then incumbent members of the Intermix Board, including Mr. Rosenblatt, Intermix’s former Chief Executive Officer, and certain entities affiliated with VantagePoint Venture Partners (“VantagePoint”), a former major Intermix stockholder. The complaints alleged that, in pursuing the transaction whereby Intermix was to be acquired by FIM (the “FIM Transaction”) and approving the related merger agreement, the director defendants breached their

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fiduciary duties to Intermix stockholders by, among other things, engaging in self-dealing and failing to obtain the highest price reasonably available for Intermix and its stockholders. The complaints further alleged that the merger agreement resulted from a flawed process and that the defendants tailored the terms of the merger to advance their own interests. The FIM Transaction was consummated on September 30, 2005. The Friedmann and Sheppard lawsuits were subsequently consolidated and, on January 17, 2006, a consolidated amended complaint was filed (the “Intermix Media Shareholder Litigation”). The plaintiffs in the consolidated action sought various forms of declaratory relief, damages, disgorgement and fees and costs. On March 20, 2006, the court ordered that substantially identical claims asserted in a separate state action filed by Brad Greenspan, captioned Greenspan v. Intermix Media, Inc., et al., be severed and related to the Intermix Media Shareholder Litigation. The defendants filed demurrers seeking dismissal of all claims in the Intermix Media Shareholder Litigation and the severed Greenspan claims, which were heard by the court on July 6, 2006. On October 6, 2006, the court sustained the demurrers without leave to amend. On December 13, 2006, the court dismissed the complaints and entered judgment for the defendants. Greenspan and plaintiffs in the Intermix Media Shareholder Litigation filed notices of appeal, and subsequently filed respective opening briefs on appeal in October 2007. Defendants intend to file opposing briefs on appeal. The Court of Appeal has not yet heard argument in the matter.

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’s restatement of quarterly financial results for its fiscal year ended March 31, 2003. Until the filing of the Amended Complaint, the action had been stayed by mutual agreement of the parties since its inception. A substantially similar derivative action filed in Los Angeles Superior Court was dismissed based on inability of the plaintiffs to adequately plead demand futility. Plaintiff LeBoyer’s November 2005 Amended Complaint added various allegations and purported class claims arising out of the FIM Transaction which are substantially similar to those asserted in the Intermix Media Shareholder Litigation. The Amended Complaint also added as defendants the individuals and entities named in the Intermix Media Shareholder Litigation that were not already defendants in the matter. On July 14, 2006, the parties filed their briefing on defendants’ motion to dismiss and stay the matter. On October 16, 2006, the court dismissed the fourth through seventh claims for relief, which related to the 2003 restatement, finding that the plaintiff is precluded from relitigating demand futility. At the same time, the court asked for further briefing regarding plaintiffs’ standing to assert derivative claims based on the FIM Transaction, including for alleged violation of Section 14(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the effect of the state judge’s dismissal of the claims in the Greenspan case and the Intermix Media Shareholder Litigation on the remaining direct class action claims alleging breaches of fiduciary duty and other common law claims leading up to the FIM Transaction. The parties filed the requested additional briefing in which the defendants requested that the court stay the direct LeBoyer claims pending the resolution of any appeal in the Greenspan case and the Intermix Media Shareholder Litigation. The court took the matter under submission. By order dated May 22, 2007, the court granted defendants’ motion to dismiss the derivative claims arising out of the FIM Transaction, and denied the defendants’ request to stay the two remaining direct claims. As explained in more detail in the next paragraph, the court subsequently consolidated this case with the Brown v. Brewer action also pending before the court. On July 11, 2007, plaintiffs filed the consolidated first amended complaint. Pursuant to the stipulated briefing schedule ordered by the court, the parties’ joint brief on defendants’ motion to dismiss the consolidated complaint was filed on October 11, 2007 and taken under submission. By order dated January 17, 2008, the court granted in part defendants’ motion to dismiss, with leave to amend, as explained in greater detail under the discussion of the consolidated case, Brown v. Brewer, below.

On June 14, 2006, a purported class action lawsuit, captioned Jim Brown v. Brett C. Brewer, et al., was filed against certain former Intermix directors and officers in the United States District Court for the Central District of

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NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

California. The plaintiff asserted claims for alleged violations of Section 14a of the Exchange Act and SEC Rule 14a-9, as well as control person liability under Section 20a. The plaintiff alleged that certain defendants disseminated false and misleading definitive proxy statements on two occasions: one on December 30, 2003 in connection with the shareholder vote on January 29, 2004 on the election of directors and ratification of financing transactions with certain entities of VantagePoint, and another on August 25, 2005 in connection with the shareholder vote on the FIM Transaction. The complaint named as defendants certain VantagePoint related entities and the members of the Intermix Board who were incumbent on the dates of the respective proxy statements. Intermix was not named as a defendant, but has certain indemnity obligations to the former officer and director defendants in connection with these claims and allegations. Intermix believes that the claims are without merit and expects that the individual defendants will vigorously defend themselves in the matter. On August 25, 2006, plaintiff amended his complaint to add certain investment banks (the “Investment Banks”) as defendants. Intermix has certain indemnity obligations to the Investment Banks as well. Plaintiff amended his complaint again on September 27, 2006. On October 19, 2006, defendants filed motions to dismiss all claims in the Second Amended Complaint. These motions were scheduled to be heard on February 12, 2007. On February 9, 2007, the case was transferred from Judge Walter to Judge George H. King, the judge assigned to the LeBoyer action on the grounds that it raises substantially related questions of law and fact as LeBoyer, and would entail substantial duplication of labor if heard by different judges. Judge King took the February 26, 2007 hearing date for the motions to dismiss off-calendar. On June 11, 2007, Judge King ordered the Brown case be consolidated with the LeBoyer action, ordered plaintiffs’ counsel to file a consolidated first amended complaint, and further ordered the parties to file a joint brief on defendants’ contemplated motion to dismiss the consolidated first amended complaint. On July 11, 2007, plaintiffs filed the consolidated first amended complaint. Pursuant to the stipulated briefing schedule ordered by the court, the parties’ joint brief on defendants’ motion to dismiss was filed on October 11, 2007 and was taken under submission without a hearing. By order dated January 17, 2008, Judge King granted defendants’ motion to dismiss the 2003 proxy claims (concerning VantagePoint transactions) and the 2005 proxy claims (concerning the FIM Transaction), as well as a claim against the VantagePoint entities alleging unjust enrichment. The court found it unnecessary to rule on dismissal of the remaining claims, which are related to the 2005 FIM Transaction, because the dismissal disposed of those claims. The court granted plaintiffs until February 8, 2008 to file an amended complaint. Intermix believes that the claims are without merit and expects that the defendants will continue to vigorously defend themselves in the matter.

Greenspan Litigation

On February 10, 2005, Brad Greenspan, Intermix’s former Chairman and Chief Executive Officer who was asked to resign as CEO and was removed as Chairman in the fall of 2003, filed a derivative complaint in Los Angeles Superior Court against Intermix, various of its former directors and officers, VantagePoint and certain of VantagePoint’s principals and affiliates. The complaint alleged claims of libel and fraud against Intermix and various of its then current and former officers and directors, claims of intentional interference with contract and prospective economic advantage, unfair competition and fraud against VantagePoint and certain of its affiliates and principals and claims alleging that Intermix’s forecasts of profitability leading up to its January 2004 annual stockholder meeting and associated proxy contest waged by Mr. Greenspan were false and misleading. These claims generally related to Intermix’s decision to consummate its Series C Preferred Stock financing with VantagePoint in October 2003, Mr. Greenspan’s contemporaneous separation from Intermix and matters arising during the proxy contest. The complaint also alleged that Intermix’s acquisition of the assets of a company known as Supernation LLC (“Supernation”) in July 2004 involved breaches of fiduciary duty. Mr. Greenspan sought remittance of compensation received by the various then current and former Intermix director and officer defendants, unspecified damages, removal of various Intermix directors, disgorgement of unspecified profits, reformation of the Supernation purchase, punitive damages, fees and costs, injunctive relief and other remedies. Intermix and the other defendants filed motions challenging the validity of the action and Mr. Greenspan’s ability to pursue it. Mr. Greenspan voluntarily dismissed this action in October 2005.

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NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Prior to dismissing his derivative lawsuit, in August 2005, Mr. Greenspan filed another complaint in Los Angeles Superior Court against the same defendants. The complaint, for breach of fiduciary duty, included substantially the same allegations made by Mr. Greenspan in the above-referenced lawsuit. Mr. Greenspan further alleged that defendants’ actions have, with the FIM Transaction, culminated in the loss of Mr. Greenspan’s interest in Intermix for a cash payment allegedly below its value. On October 31, 2005, the defendants filed motions seeking dismissal of the lawsuit on the grounds that the complaint failed to state any cause of action. Instead of responding to these motions, Mr. Greenspan filed an amended complaint on February 21, 2006, in which Mr. Greenspan omitted certain previously named defendants and added two other former directors as defendants. In this amended complaint, Mr. Greenspan asserted seven causes of action. The first two causes of action, for intentional interference with prospective economic advantage and violation of California’s Business Professions Code section 17200, generally related to Intermix’s decision to consummate its Series C Preferred Stock financing with VantagePoint in October 2003 and allege that Mr. Greenspan was “forced” to resign. The third through sixth causes of action asserted various claims for breach of fiduciary duty related to the FIM Transaction and substantially mirrored the allegations in the Intermix Media Shareholder Litigation. By Order of March 20, 2006, the court ordered that Mr. Greenspan’s claims based on the FIM Transaction be severed from the rest of his complaint and coordinated with the claims asserted in the Intermix Media Shareholder Litigation. Mr. Greenspan asserted a seventh cause of action against Intermix for indemnification. In his amended complaint, Mr. Greenspan sought compensatory and consequential damages, punitive damages, fees and costs, injunctive relief and other remedies. Motions to dismiss the first six causes of action were filed and, on October 6, 2006, granted without leave to amend. On November 21, 2006, Mr. Greenspan dismissed with prejudice the seventh cause of action for indemnity, which was the only remaining claim and his sole cause of action against Intermix. On January 24, 2007, Mr. Greenspan filed a notice of appeal of the court’s October 6, 2006 ruling. Mr. Greenspan’s opening brief in the Court of Appeal was filed on October 23, 2007.

Other

Other than previously disclosed in the notes to these unaudited consolidated financial statements, the Company is party to several other purchase and sale arrangements which become exercisable over the next ten years by the Company or the counter-party to the agreement. In the next twelve months, none of these arrangements that become exercisable are material. Purchase arrangements that are exercisable by the counter-party to the agreement, and that are outside the sole control of the Company are accounted for in accordance with EITF D-98. Accordingly, the fair values of such purchase arrangements are classified in Minority interest liabilities.

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

Note 13—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

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NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

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, 2007 and 2006, the Company made discretionary contributions of $12 million and $18 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,
	2007			2006			2007			2006
	(in millions)
Service cost benefits earned during the period	$	21		$	17		$	1		$	1
Interest costs on projected benefit obligation		35			30			2			2
Expected return on plan assets		(40	)		(33	)		—			—
Amortization of deferred losses		4			4			—			—
Other		—			—			(1	)		(1	)
Net periodic costs	$	20		$	18		$	2		$	2
	For the six months ended December 31,
	2007			2006			2007			2006
	(in millions)
Service cost benefits earned during the period	$	42		$	34		$	2		$	2
Interest costs on projected benefit obligation		70			60			4			4
Expected return on plan assets		(80	)		(66	)		—			—
Amortization of deferred losses		8			9			1			1
Other		—			—			(3	)		(3	)
Net periodic costs	$	40		$	37		$	4		$	4

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 and licensing of television programming worldwide.

• 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 and ten are affiliated with the MyNetworkTV network), 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 primarily in the United States.

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NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

• Direct Broadcast Satellite Television, which principally consists of the distribution of premium programming services via satellite and broadband 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 the provision of in-store marketing products and services, primarily to consumer packaged goods manufacturers in the United States and Canada.

• Newspapers and Information Services, which principally consists of the publication of four national newspapers in the United Kingdom, the publication of approximately 145 newspapers in Australia, the publication of a metropolitan newspaper and a national newspaper (with international editions) in the United States and the provision of information services.

• 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; News Outdoor Group, an advertising business which offers display advertising in outdoor locations primarily throughout Russia and Eastern Europe; and Fox Interactive Media (“FIM”), 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.

Operating income (loss) before depreciation and amortization, defined as operating income (loss) plus depreciation and amortization and the amortization of cable distribution investments, eliminates the variable effect across all business segments of non-cash depreciation and amortization. Depreciation and amortization expense includes the depreciation of property and equipment, as well as amortization of finite-lived intangible assets. Amortization of cable distribution investments represents a reduction against revenues over the term of a carriage arrangement and, as such, it is excluded from Operating income (loss) before depreciation and amortization. Operating income (loss) before depreciation and amortization is a non-GAAP measure and it should be considered in addition to, not as a substitute for, operating income (loss), net income (loss), cash flow and other measures of financial performance reported in accordance with GAAP. Operating income (loss) before depreciation and amortization does not reflect cash available to fund requirements, and the items excluded from Operating income (loss) before depreciation and amortization, such as depreciation and amortization, are significant components in assessing the Company’s financial performance.

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NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Management believes that Operating income (loss) before depreciation and amortization is an appropriate measure for evaluating the operating performance of the Company’s business segments. Operating income (loss) before depreciation and amortization provides management, investors and equity analysts a measure to analyze operating performance of each business segment and enterprise value against historical and competitors’ data, although historical results, including Operating income (loss) before depreciation and amortization, may not be indicative of future results (as operating performance is highly contingent on many factors, including customer tastes and preferences).

	For the three months ended December 31,						For the six months ended December 31,
	2007			2006			2007			2006
	(in millions)						(in millions)
Revenues:
Filmed Entertainment	$	1,976		$	2,265		$	3,558		$	3,478
Television		1,530			1,600			2,675			2,703
Cable Network Programming		1,236			920			2,338			1,809
Direct Broadcast Satellite Television		955			764			1,702			1,386
Magazines and Inserts		273			266			537			541
Newspapers and Information Services		1,416			1,118			2,660			2,167
Book Publishing		406			393			736			761
Other		798			518			1,451			913
Total revenues	$	8,590		$	7,844		$	15,657		$	13,758
Operating income (loss):
Filmed Entertainment	$	403		$	470		$	765		$	709
Television		245			112			428			304
Cable Network Programming		337			275			626			524
Direct Broadcast Satellite Television		62			(12	)		110			(25	)
Magazines and Inserts		85			74			164			152
Newspapers and Information Services		196			170			289			294
Book Publishing		67			54			103			109
Other		23			1			(20	)		(72	)
Total operating income	$	1,418		$	1,144		$	2,465		$	1,995
Equity (losses) earnings of affiliates		(50	)		249			196			492
Interest expense, net		(245	)		(212	)		(458	)		(412	)
Interest income		78			72			178			147
Other, net		187			18			187			446
Income before income tax expense and minority interest in subsidiaries		1,388			1,271			2,568			2,668
Income tax expense		(520	)		(431	)		(934	)		(969	)
Minority interest in subsidiaries, net of tax		(36	)		(18	)		(70	)		(34	)
Net income	$	832		$	822		$	1,564		$	1,665

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

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NEWS CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Intersegment revenues, generated primarily by the Filmed Entertainment segment, of approximately $253 million and $239 million for the three months ended December 31, 2007 and 2006, respectively, and of approximately $425 million and $436 million for the six months ended December 31, 2007 and 2006, respectively, have been eliminated within the Filmed Entertainment segment. Intersegment operating profit generated primarily by the Filmed Entertainment segment of approximately $12 million and $24 million for the three months ended December 31, 2007 and 2006, respectively and of approximately $41 million and $36 million for the six months ended December 31, 2007 and 2006, respectively, have been eliminated within the Filmed Entertainment segment.

	For the three months ended December 31, 2007
	Operating income			Depreciation and amortization		Amortization of cable distribution investments		Operating income before depreciation and amortization
	(in millions)
Filmed Entertainment	$	403		$	21	$	—	$	424
Television		245			25		—		270
Cable Network Programming		337			19		23		379
Direct Broadcast Satellite Television		62			54		—		116
Magazines and Inserts		85			2		—		87
Newspapers and Information Services		196			105		—		301
Book Publishing		67			2		—		69
Other		23			59		—		82
Total	$	1,418		$	287	$	23	$	1,728
	For the three months ended December 31, 2006
	Operating income (loss)			Depreciation and amortization		Amortization of cable distribution investments		Operating income before depreciation and amortization
	(in millions)
Filmed Entertainment	$	470		$	20	$	—	$	490
Television		112			23		—		135
Cable Network Programming		275			14		16		305
Direct Broadcast Satellite Television		(12	)		43		—		31
Magazines and Inserts		74			2		—		76
Newspapers and Information Services		170			67		—		237
Book Publishing		54			2		—		56
Other		1			35		—		36
Total	$	1,144		$	206	$	16	$	1,366

28

NEWS CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

	For the six months ended December 31, 2007
	Operating income (loss)			Depreciation and amortization		Amortization of cable distribution investments		Operating income before depreciation and amortization
	(in millions)
Filmed Entertainment	$	765		$	42	$	—	$	807
Television		428			49		—		477
Cable Network Programming		626			39		35		700
Direct Broadcast Satellite Television		110			104		—		214
Magazines and Inserts		164			4		—		168
Newspapers and Information Services		289			244		—		533
Book Publishing		103			4		—		107
Other		(20	)		123		—		103
Total	$	2,465		$	609	$	35	$	3,109
	For the six months ended December 31, 2006
	Operating income (loss)			Depreciation and amortization		Amortization of cable distribution investments		Operating income (loss) before depreciation and amortization
	(in millions)
Filmed Entertainment	$	709		$	40	$	—	$	749
Television		304			45		—		349
Cable Network Programming		524			27		39		590
Direct Broadcast Satellite Television		(25	)		91		—		66
Magazines and Inserts		152			4		—		156
Newspapers and Information Services		294			135		—		429
Book Publishing		109			4		—		113
Other		(72	)		67		—		(5	)
Total	$	1,995		$	413	$	39	$	2,447

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NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

	At December 31, 2007		At June 30, 2007
	(in millions)
Total assets:
Filmed Entertainment	$	7,645	$	6,738
Television		13,543		12,974
Cable Network Programming		9,595		8,523
Direct Broadcast Satellite Television		2,367		2,030
Magazines and Inserts		1,284		1,278
Newspapers and Information Services(1)		8,169		5,343
Book Publishing		1,737		1,566
Other(1)		13,617		12,478
Investments		10,959		11,413
Total assets	$	68,916	$	62,343
Goodwill and Intangible assets, net:
Filmed Entertainment	$	1,963	$	1,979
Television		10,195		10,195
Cable Network Programming		5,950		5,517
Direct Broadcast Satellite Television		646		595
Magazines and Inserts		1,011		1,009
Newspapers and Information Services(1)		3,980		2,422
Book Publishing		508		508
Other(1)		8,039		3,297
Total goodwill and intangibles, net	$	32,292	$	25,522

⁽¹⁾ See Note 2—Acquisitions, Disposals and Other Transactions

Note 15—Earnings Per Share

Prior to fiscal 2008, earnings per share (“EPS”) was computed individually for the Class A Common Stock and Class B Common Stock and net income was apportioned to both Class A stockholders and Class B stockholders on a ratio of 1.2 to 1, 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 Common Stock was increased by 20% (the “Adjusted Class”) and was then compared to the sum of the weighted average Class B Common Stock and the weighted average Adjusted Class. The resulting percentage was then applied to the Net income to determine the apportionment for the Class A stockholders, with the balance attributable to the Class B stockholders. Subsequent to the final fiscal 2007 dividend, shares of Class A Common Stock no longer carry the right to a greater dividend than shares of Class B Common Stock and, therefore, Net income is allocated equally to Class A and Class B stockholders. Accordingly, since the apportionment of earnings has been eliminated as required by the Company’s Restated Certificate of Incorporation, the Company has presented the earnings of Class A Common Stock and Class B Common Stock as a single class for fiscal 2008.

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NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

The following tables set forth the computation of basic and diluted EPS under SFAS No. 128, “Earnings per Share”:

	For the three months ended December 31, 2007			For the six months ended December 31, 2007
	(in millions, except per share data)
Net income available to stockholders—basic	$	832		$	1,564
Other		—			(1	)
Net income available to stockholders—diluted	$	832		$	1,563
Weighted average shares—basic		3,126			3,126
Shares issuable under equity based compensation plans and other		13			13
Weighted average shares—diluted		3,139			3,139
Earnings per share:
Net income—basic	$	0.27		$	0.50
Net income—diluted	$	0.27		$	0.50
	For the three months ended December 31, 2006			For the six months ended December 31, 2006
	(in millions)
Net income available to stockholders—basic	$	822		$	1,665
Other		(2	)		(2	)
Net income available to stockholders—diluted	$	820		$	1,663

	For the three months ended December 31, 2006						For the six months ended December 31, 2006
	Class A		Class B		Total		Class A		Class B		Total
	(in millions, except per share data)
Allocation of income—basic:
Net income available to stockholders	$	597	$	225	$	822	$	1,208	$	457	$	1,665
Weighted average shares used in income allocation		2,614		987		3,601		2,610		987		3,597
Allocation of income—diluted:
Net income available to stockholders	$	597	$	223	$	820	$	1,210	$	453	$	1,663
Weighted average shares used in income allocation		2,640		987		3,627		2,634		987		3,621
Weighted average shares—basic		2,178		987		3,165		2,175		987		3,162
Shares issuable under equity based compensation plans		22		—		22		20		—		20
Weighted average shares—diluted		2,200		987		3,187		2,195		987		3,182
Earnings per share:
Net income—basic	$	0.27	$	0.23			$	0.56	$	0.46
Net income—diluted	$	0.27	$	0.23			$	0.55	$	0.46

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NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Note 16—Additional Financial Information

Supplemental Cash Flows Information

	For the six months ended December 31,
	2007			2006
	(in millions)
Supplemental cash flow information:
Cash paid for income taxes	$	(1,001	)	$	(545	)
Cash paid for interest		(412	)		(369	)
Sale of other investments		8			61
Purchase of other investments		(48	)		(358	)
Supplemental information on businesses acquired:
Fair value of assets acquired		8,204			307
Cash acquired		94			14
Less: Liabilities assumed		(2,427	)		(40	)
Minority interest acquired		(213	)		25
Cash paid		(5,462	)		(306	)
Fair value of equity instruments		31			—
Issuance of subsidiary common units		165			—
Fair value of equity instruments	$	196		$	—

Other, net consisted of the following:

	For the three months ended December 31,						For the six months ended December 31,
	2007			2006			2007			2006
	(in millions)						(in millions)
Gain on the sale of China Netcom(a)	$	—		$	—		$	102		$	—
Gain on the sale of SKY Brasil(a)		—			—			—			261
Gain on the sale of Phoenix(a)		—			—			—			136
Change in fair value of exchangeable securities(b)		189			30			102			68
Other		(2	)		(12	)		(17	)		(19	)
Total Other, net	$	187		$	18		$	187		$	446

^(a) See Note 6—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. A significant variance in the price of underlying stock could have a material impact on the operating results of the Company.

Note 17—Subsequent Events

In January 2008, the Company acquired a 14.6% stake in Premiere AG, the leading German pay-TV operator, for cash consideration of $422 million.

In January 2008, the Company retired its $350 million 6.625% Senior Notes due 2008.

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NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

A dividend of $0.06 per share of Class A Common Stock and Class B Common Stock has been declared and is payable on April 16, 2008. The record date for determining dividend entitlements is March 12, 2008.

Note 18—Supplemental Guarantor Information

In May 2007, News America Incorporated (“NAI”), a subsidiary of the Company, terminated its existing $1.75 billion Revolving Credit Agreement and entered into a new credit agreement (the “New Credit Agreement”), among NAI as Borrower, the Company as Parent Guarantor, the lenders named therein (the “Lenders”), Citibank, N.A. as Administrative Agent and JPMorgan Chase Bank, N.A. as Syndication Agent. The New Credit Agreement provides a $2.25 billion unsecured revolving credit facility with a sub-limit of $600 million available for the issuance of letters of credit. NAI may request an increase in the amount of the credit facility up to a maximum amount of $2.5 billion. Borrowings are in U.S. dollars only, while letters of credit are issuable in U.S. dollars or Euros. The significant terms of the agreement include the requirement that the Company maintain specific leveraging ratios and limitations on secured indebtedness. The Company pays a facility fee of 0.08% regardless of facility usage. The Company pays interest for borrowings and letters of credit at LIBOR plus 0.27%. The Company pays an additional fee of 0.05% if borrowings under the facility exceed 50% of the committed facility. The interest and fees are based on the Company’s current debt rating. The maturity date is in May 2012, however, NAI may request that the Lenders’ commitments be renewed for up to two additional one year periods.

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

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

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

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NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Supplemental Condensed Consolidating Statement of Operations

For the six months ended December 31, 2007

(in millions)

	News America Incorporated			News Corporation			Non-Guarantor			Reclassifications and Eliminations			News Corporation and Subsidiaries
Revenues	$	4		$	—		$	15,653		$	—		$	15,657
Expenses		150			—			13,042			—			13,192
Operating income (loss)		(146	)		—			2,611			—			2,465
Other Income (Expense):
Equity earnings of affiliates		2			—			194			—			196
Interest expense, net		(1,286	)		(214	)		(338	)		1,380			(458	)
Interest income		516			—			1,042			(1,380	)		178
Earnings (losses) from subsidiary entities		845			1,832			—			(2,677	)		—
Other, net		127			(54	)		114			—			187
Income (loss) before income tax expense and minority interest in subsidiaries		58			1,564			3,623			(2,677	)		2,568
Income tax (expense) benefit		(21	)		—			(1,317	)		404			(934	)
Minority interest in subsidiaries, net of tax		—			—			(70	)		—			(70	)
Net income (loss)	$	37		$	1,564		$	2,236		$	(2,273	)	$	1,564

See notes to supplemental guarantor information

34

NEWS CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Supplemental Condensed Consolidating Statement of Operations

For the six months ended December 31, 2006

(in millions)

	News America Incorporated			News Corporation			Non-Guarantor			Reclassifications and Eliminations			News Corporation and Subsidiaries
Revenues	$	3		$	—		$	13,755		$	—		$	13,758
Expenses		135			—			11,628			—			11,763
Operating income (loss)		(132	)		—			2,127			—			1,995
Other Income (Expense):
Equity earnings of affiliates		2			—			490			—			492
Interest expense, net		(1,043	)		(148	)		(38	)		817			(412	)
Interest income		108			—			856			(817	)		147
Earnings (losses) from subsidiary entities		746			1,859			2,364			(4,969	)		—
Other, net		61			(46	)		431			—			446
Income (loss) before income tax expense and minority interest in subsidiaries		(258	)		1,665			6,230			(4,969	)		2,668
Income tax (expense) benefit		94			—			(2,262	)		1,199			(969	)
Minority interest in subsidiaries, net of tax		—			—			(34	)		—			(34	)
Net income (loss)	$	(164	)	$	1,665		$	3,934		$	(3,770	)	$	1,665

See notes to supplemental guarantor information

35

NEWS CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Supplemental Condensed Consolidating Balance Sheet

At December 31, 2007

(in millions)

	News America Incorporated		News Corporation		Non-Guarantor			Reclassifications and Eliminations			News Corporation and Subsidiaries
Assets:
Current assets:
Cash and cash equivalents	$	1,294	$	—	$	2,201		$	—		$	3,495
Receivables, net		41		—		7,448			—			7,489
Inventories, net		—		—		2,719			—			2,719
Other		12		—		613			—			625
Total current assets		1,347		—		12,981			—			14,328
Non-current assets:
Receivables		1		—		508			—			509
Inventories, net		—		—		2,823			—			2,823
Property, plant and equipment, net		83		—		6,502			—			6,585
Intangible assets, net		—		—		13,998			—			13,998
Goodwill		—		—		18,294			—			18,294
Other		137		—		1,283			—			1,420
Investments
Investments in associated companies and other investments		90		46		10,823			—			10,959
Intragroup investments		39,902		45,299		—			(85,201	)		—
Total investments		39,992		45,345		10,823			(85,201	)		10,959
TOTAL ASSETS	$	41,560	$	45,345	$	67,212		$	(85,201	)	$	68,916
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Borrowings	$	550	$	—	$	286		$	—		$	836
Other current liabilities		3		—		8,739			—			8,742
Total current liabilities		553		—		9,025			—			9,578
Non-current liabilities:
Borrowings		13,047		—		166			—			13,213
Other non-current liabilities		480		1		9,853			—			10,334
Intercompany		10,600		10,592		(21,192	)		—			—
Minority interest in subsidiaries		—		—		1,039			—			1,039
Stockholders’ Equity		16,880		34,752		68,321			(85,201	)		34,752
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	41,560	$	45,345	$	67,212		$	(85,201	)	$	68,916

See notes to supplemental guarantor information

36

NEWS CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Supplemental Condensed Consolidating Balance Sheet

At June 30, 2007

(in millions)

	News America Incorporated		News Corporation		Non-Guarantor			Reclassifications and Eliminations			News Corporation and Subsidiaries
Assets:
Current assets:
Cash and cash equivalents	$	5,450	$	—	$	2,204		$	—		$	7,654
Receivables, net		24		—		5,818			—			5,842
Inventories, net		—		—		2,039			—			2,039
Other		9		—		362			—			371
Total current assets		5,483		—		10,423			—			15,906
Non-current assets:
Receivables		1		—		436			—			437
Inventories, net		—		—		2,626			—			2,626
Property, plant and equipment, net		82		—		5,535			—			5,617
Intangible assets, net		—		—		11,703			—			11,703
Goodwill		—		—		13,819			—			13,819
Other		131		1		690			—			822
Investments
Investments in associated companies and other investments		108		5		11,300			—			11,413
Intragroup investments		39,028		38,045		—			(77,073	)		—
Total investments		39,136		38,050		11,300			(77,073	)		11,413
												—
TOTAL ASSETS	$	44,833	$	38,051	$	56,532		$	(77,073	)	$	62,343
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Borrowings	$	350	$	—	$	5		$	—		$	355
Other current liabilities		1		—		7,138			—			7,139
Total current liabilities		351		—		7,143			—			7,494
Non-current liabilities:
Borrowings		11,960		—		187			—			12,147
Other non-current liabilities		519		2		8,697			—			9,218
Intercompany		14,608		5,127		(19,735	)		—			—
Minority interest in subsidiaries		—		—		562			—			562
Stockholders’ Equity		17,395		32,922		59,678			(77,073	)		32,922
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	44,833	$	38,051	$	56,532		$	(77,073	)	$	62,343

See notes to supplemental guarantor information

37

NEWS CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Supplemental Condensed Consolidating Statement of Cash Flows

For the six months ended December 31, 2007

(in millions)

	News America Incorporated			News Corporation			Non-Guarantor			Reclassifications and Eliminations		News Corporation and Subsidiaries
Operating activities:
Net cash provided by (used in) operating activities	$	(5,397	)	$	241		$	5,895		$	—	$	739
Investing and other activities:
Property, plant and equipment		(7	)		—			(692	)		—		(699	)
Investments		—			—			(5,429	)		—		(5,429	)
Proceeds from sale of investments and non-current assets		—			—			299			—		299
Net cash used in investing activities		(7	)		—			(5,822	)		—		(5,829	)
Financing activities:
Borrowings		1,248			—			14			—		1,262
Repayment of borrowings		—			—			(132	)		—		(132	)
Issuance of shares		—			59			7			—		66
Repurchase of shares		—			(122	)		—			—		(122	)
Dividends paid		—			(178	)		(8	)		—		(186	)
Other, net		—			—			22			—		22
Net cash provided by (used in) financing activities		1,248			(241	)		(97	)		—		910
Net decrease in cash and cash equivalents		(4,156	)		—			(24	)		—		(4,180	)
Cash and cash equivalents, beginning of period		5,450			—			2,204			—		7,654
Exchange movement on opening cash balance		—			—			21			—		21
Cash and cash equivalents, end of period	$	1,294		$	—		$	2,201		$	—	$	3,495

See notes to supplemental guarantor information

38

NEWS CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Supplemental Condensed Consolidating Statement of Cash Flows

For the six months ended December 31, 2006

(in millions)

	News America Incorporated			News Corporation			Non-Guarantor			Reclassifications and Eliminations		News Corporation and Subsidiaries
Operating activities:
Net cash provided by (used in) operating activities	$	(384	)	$	68		$	1,021		$	—	$	705
Investing and other activities:
Property, plant and equipment		(2	)		—			(606	)		—		(608	)
Investments		(14	)		—			(756	)		—		(770	)
Proceeds from sale of investments and non-current assets		5			—			353			—		358
Net cash used in investing activities		(11	)		—			(1,009	)		—		(1,020	)
Financing activities:
Borrowings		—			—			160			—		160
Repayment of borrowings		—			—			(190	)		—		(190	)
Issuance of shares		—			154			19			—		173
Repurchase of shares		—			(59	)		—			—		(59	)
Dividends paid		—			(180	)		(5	)		—		(185	)
Net cash used in financing activities		—			(85	)		(16	)		—		(101	)
Net decrease in cash and cash equivalents		(395	)		(17	)		(4	)		—		(416	)
Cash and cash equivalents, beginning of period		4,094			17			1,672			—		5,783
Exchange movement on opening cash balance		—			—			71			—		71
Cash and cash equivalents, end of period	$	3,699		$	—		$	1,739		$	—	$	5,438

See notes to supplemental guarantor information

39

NEWS CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Notes to Supplemental Guarantor Information

(1) Investments in the Company’s subsidiaries, for purposes of the supplemental 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.

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

40

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 Item 1A “Risk Factors,” in this report. News Corporation does not ordinarily make projections of its future operating results and undertakes no obligation (and expressly disclaims any obligation) to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. Readers should carefully review 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.

INTRODUCTION

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

• 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 to date during fiscal 2008 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, 2007 and 2006. This analysis is presented on both a consolidated and a segment basis. In addition, a brief description is provided of significant transactions and events that have an impact on the comparability of the results being analyzed.

• Liquidity and Capital Resources—This section provides an analysis of the Company’s cash flows for six months ended December 31, 2007 and 2006. 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.

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 and licensing of television programming worldwide.

• 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 and ten are affiliated with the MyNetworkTV network), the broadcasting of network programming in the United States and the development, production and broadcasting of television programming in Asia.

41

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

• Direct Broadcast Satellite Television, which principally consists of the distribution of premium programming services via satellite and broadband 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 the provision of in-store marketing products and services, primarily to consumer packaged goods manufacturers, in the United States and Canada.

• Newspapers and Information Services, which principally consists of the publication of four national newspapers in the United Kingdom, the publication of approximately 145 newspapers in Australia, the publication of a metropolitan newspaper and a national newspaper (with international editions) in the United States and the provision of information services.

• 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; News Outdoor Group (“News Outdoor”), an advertising business which offers display advertising primarily in outdoor locations throughout Russia and Eastern Europe; and Fox Interactive Media (“FIM”), 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 and subsequently released in seasonal DVD box sets. More successful series are later syndicated in domestic markets. The length of the revenue cycle for television series will vary depending on the number of seasons a series remains in active production and, therefore, may cause fluctuations in operating results. License fees received for television exhibition (including international and U.S. premium television and basic cable television) are recorded as revenue in the period that licensed films or programs are available for such exhibition, which may cause substantial fluctuations in operating results.

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

The Company enters into arrangements with third parties to co-produce many of its theatrical productions. These arrangements, which are referred to as co-financing arrangements, take various forms. The parties to these arrangements include studio and non-studio entities, both domestic and foreign. In several of these agreements, other parties control certain distribution rights. The Filmed Entertainment segment records the amounts received for the sale of an economic interest as a reduction of the cost of the film, as the investor assumes full risk for that portion of the film asset acquired in these transactions. The substance of these arrangements is that the third-party

42

investors own an interest in the film and, therefore, receive a participation based on the respective third-party investor’s interest in the profits or losses incurred on the film. Consistent with the requirements of Statement of Position 00-2, “Accounting by Producers or Distributors of Films,” the estimate of a third-party investor’s interest in profits or losses incurred on the film is determined by reference to the ratio of actual revenue earned to date in relation to total estimated ultimate revenues.

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

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

Television and Cable Network Programming

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

The U.S. television broadcast environment is highly competitive and the primary methods of competition are the development and acquisition of popular programming. Program success is measured by ratings, which are an indication of market acceptance, with the top rated programs commanding the highest advertising prices. FOX and MyNetworkTV compete for audience, advertising revenues and programming with other broadcast networks, such as CBS, ABC, NBC and The CW, independent television stations, cable program services, as well as other media, including DBS services, DVDs, video games, print and the Internet. In addition, FOX and MyNetworkTV compete with the other broadcast networks to secure affiliations with independently owned television stations in markets across the country.

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

In Asia, STAR’s channels are primarily distributed 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 and affiliate fees from these pay-television platform operators.

The Company’s U.S. cable network operations primarily consist of the Fox News Channel (“Fox News”), the FX Network (“FX”) and the Regional Sports Networks (“RSNs”). The Company’s international cable networks consist of the Fox International Channels (“FIC”) with operations primarily in Latin America and Europe.

43

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. Affiliate fee revenues are net of the amortization of cable distribution investments (capitalized fees paid to a cable operator or DBS operator to facilitate the launch of a cable network). The Company defers the cable distribution investments and amortizes the amounts on a straight-line basis over the contract period. Cable television and DBS are currently the predominant means of distribution of the Company’s program services in the United States. Internationally, distribution technology varies region by region.

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

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

The Company has several multi-year sports rights agreements, including contracts with the National Football League (“NFL”) through fiscal 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, a contract with Major League Baseball (“MLB”) through calendar year 2013 and a contract for the Bowl Championship Series (“BCS”) through fiscal year 2010. 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 profit to estimated total operating profit for the remaining term of the contract.

The profitability of these long-term national sports contracts is based on the Company’s best estimates at December 31, 2007 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, 2007, a loss may be recorded. Should revenues improve as compared to estimated revenues, the Company may have an improved operating profit related to the contract, which may be recognized over the estimated remaining contract term.

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

Direct Broadcast Satellite Television

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

44

In 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 pay DTT service under regulations of the European Commission. In addition, the Italian government previously offered a subsidy on the purchase of DTT decoders.

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

Magazines and Inserts

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

Newspapers and Information Services

The Newspapers and Information Services segment derives revenues primarily 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 promotional activities.

Operating expenses for the Newspapers and Information Services 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 and Information Services segment’s advertising volume, circulation 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, circulation and newsprint prices in managing its businesses to maximize operating profit during expanding and contracting economic cycles. Newsprint is a basic commodity and its price is sensitive to the balance of supply and demand. The Company’s costs and expenses are affected by the cyclical increases and decreases in the price of newsprint. The newspapers published by the Company compete for readership and advertising with local and national newspapers and also compete with television, radio, Internet and other media alternatives in their respective locales. Competition for newspaper circulation is based on the news and editorial content of the newspaper, service, cover price and, from time to time, various promotions. The success of the newspapers published by the Company in competing with other newspapers and media for advertising depends upon advertisers’ judgments as to the most effective use of their advertising budgets. Competition for advertising among newspapers is based upon circulation levels, readership levels, reader demographics, advertising rates and advertiser results. Such judgments are based on factors such as cost, availability of alternative media, circulation and quality of readership demographics. In recent years, the newspaper industry has experienced difficulty increasing circulation volume and revenues. This is due to, among other factors, increased competition from new media formats and sources, and shifting preferences among some consumers to receive all or a portion of their news from sources other than a newspaper.

The Newspapers and Information Services segment also derives revenue from the provision of subscriber-based information services and the licensing of products and content to third-parties. Losses in the number of subscribers for these information services may affect revenues. The information services provided by the

45

Company also compete with other media sources (free and subscription-based) and new media formats. Licensing revenues depend on new and renewed customer contracts, and may be affected if the Company is unable to generate new licensing business or if existing customers renew for lesser amounts, terminate early or forego renewal.

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

Book Publishing

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

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

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

The 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. 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 Hachette Livre, for the rights to works by well-known authors and public personalities. Although the Company currently has strong positions in each of its book publishing markets, further consolidation in the industry could place the Company at a competitive disadvantage with respect to scale and resources.

Other

NDS

NDS supplies open end-to-end digital technology and services to digital pay-television platform operators and content providers. NDS technologies include conditional access and microprocessor security, broadcast stream management, set-top box and residential gateway middleware, electronic program guides, digital video recording technologies and interactive infrastructure and applications. NDS provides technologies and services supporting standard definition and high definition televisions and a variety of industry, Internet and Internet protocol standards, as well as technology for mobile devices. NDS’ software systems, consultancy and systems integration services are focused on providing platform operators and content providers with technology to help them profit from the secure distribution of digital information and entertainment to consumer devices which incorporate various technologies supplied by NDS.

News Outdoor

The Company sells, through its News Outdoor businesses, outdoor advertising space on various media, primarily in Russia and Eastern Europe. In June 2007, the Company announced that it intends to explore strategic options for News Outdoor in connection with News Outdoor’s continued development plans. The strategic

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options include, but are not limited to, exploring the opportunity to expand News Outdoor’s existing shareholder group through new strategic and private equity partners. No agreement has yet been entered into with respect to any transaction.

FIM

The Company sells, through its FIM division, advertising, sponsorships and subscription services on the Company’s various Internet properties. The Company’s Internet properties include the social networking site MySpace.com, IGN.com, AmericanIdol.com, Scout.com and FOXsports.com. The Company also has a distribution agreement with Microsoft’s MSN for FOXsports.com.

Other Business Developments

In November 2007, Dow Jones announced that it would explore strategic alternatives for the Ottaway Community Newspapers (the “Ottaway Newspapers”), which the Company acquired as part of the Dow Jones transaction. The strategic options include, but are not limited to, the possible sale of some or all of the Ottaway Newspapers’ publications and related properties. No agreement has yet been entered into with respect to any transaction involving the Ottaway Newspapers.

On December 13, 2007, the Company completed the acquisition of Dow Jones pursuant to the Agreement and Plan of Merger, dated as of July 31, 2007, by and among the Company, Ruby Newco LLC, a wholly-owned subsidiary of the Company (“Ruby Newco”), Dow Jones and Diamond Merger Sub Corporation, as amended (the “Merger Agreement”). Pursuant to the terms of the Merger Agreement, each share of Dow Jones common stock was converted into the right to receive, at the election of the holder, either (x) $60.00 in cash or (y) 2.8681 Class B common units of Ruby Newco. Each Class B common unit of Ruby Newco is convertible after a period of time into a share of News Corporation Class A common stock. The consideration for the acquisition was approximately $5,700 million which consists of: $5,100 million in cash, assumed net debt of approximately $330 million, approximately $200 million in equity instruments and the Company anticipates making additional acquisition related cash payments of $100 million during the remainder of fiscal 2008. The results of Dow Jones have been included in the Company’s unaudited consolidated statement of operations from December 13, 2007, the date of acquisition.

The Company believes that the Dow Jones acquisition will position it as a leader in the financial news and information market and will enhance its ability to adapt to future challenges and opportunities within the Company’s Newspapers and Information Services segment and across the Company’s other related business segments.

In December 2007, Fox Television Stations, Inc., a Delaware corporation and a wholly owned subsidiary of the Company and FoxCo Acquisition Sub, LLC, a Delaware limited liability company and an indirect, wholly owned subsidiary of Oak Hill Capital Partners III, L.P. (“Oak Hill Capital”), entered into a Stock and Asset Purchase Agreement (the “Purchase Agreement”), pursuant to which the Company agreed to sell eight of its owned-and-operated FOX network affiliated television stations (the “Stations”) to Oak Hill Capital for approximately $1.1 billion in cash. The Stations include: WJW in Cleveland, OH; KDVR in Denver, CO; KTVI in St. Louis, MO; WDAF in Kansas City, MO; WITI in Milwaukee, WI; KSTU in Salt Lake City, UT; WBRC in Birmingham, AL; and WGHP in Greensboro, NC. The transaction is subject to customary closing conditions, including, among other things, (a) regulatory approvals, (b) the receipt of the consent of the Federal Communications Commission (the “FCC”) relating to the assignment or transfer of control of the television broadcasting licenses issued by the FCC for the Stations and (c) with regard to two of the Stations only, certain other actions by the FCC in connection with the digital television facilities for the two Stations. In the event the closing condition described in (c) above is not satisfied or waived by Oak Hill Capital, the transaction shall be effected as a sale of six of the Stations, excluding the Stations described in (c) above, at an adjusted price. The transaction is expected to be completed in the third calendar quarter of 2008.

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In December 2007, Macrovision Corporation agreed to acquire Gemstar-TV Guide in a cash and stock transaction. The closing of this transaction is subject to customary closing conditions including the approval of the shareholders of both Macrovision Corporation and Gemstar-TV Guide.

In January 2008, the Company acquired a 14.6% stake in Premiere AG, the leading German pay-TV operator, for cash consideration of $422 million.

RESULTS OF OPERATIONS

Results of Operations—For the three and six months ended December 31, 2007 versus the three and six months ended December 31, 2006.

The following table sets forth the Company’s operating results for the three and six months ended December 31, 2007, as compared to the three and six months ended December 31, 2006.

	For the three months ended December 31,								For the six months ended December 31,
	2007			2006			% Change		2007			2006			% Change
	(in millions, except % and per share amounts)
Revenues	$	8,590		$	7,844		10	%	$	15,657		$	13,758		14	%
Expenses:
Operating		5,443			5,341		2	%		9,851			9,095		8	%
Selling, general and administrative		1,442			1,153		25	%		2,732			2,255		21	%
Depreciation and amortization		287			206		39	%		609			413		47	%
Total operating income		1,418			1,144		24	%		2,465			1,995		24	%
Equity (losses) earnings of affiliates		(50	)		249		*	*		196			492		(60	)%
Interest expense, net		(245	)		(212	)	16	%		(458	)		(412	)	11	%
Interest income		78			72		8	%		178			147		21	%
Other, net		187			18		*	*		187			446		(58	)%
Income before income tax expense and minority interest in subsidiaries		1,388			1,271		9	%		2,568			2,668		(4	)%
Income tax expense		(520	)		(431	)	21	%		(934	)		(969	)	(4	)%
Minority interest in subsidiaries, net of tax		(36	)		(18	)	*	*		(70	)		(34	)	*	*
Net income	$	832		$	822		1	%	$	1,564		$	1,665		(6	)%
Diluted earnings per share(1)	$	0.27		$	0.26		4	%	$	0.50		$	0.52		(4	)%

** not meaningful

⁽¹⁾ Represents earnings per share based on the total weighted average shares outstanding (Class A Common Stock and Class B common stock, par value $0.01 per share (“Class B Common Stock”) combined) for the three and six months ended December 31, 2007 and 2006. During fiscal 2007, Class A Common Stock carried rights to a greater dividend than Class B Common Stock. Subsequent to the final fiscal 2007 dividend, shares of Class A Common Stock cease to carry any rights to a greater dividend than shares of Class B Common Stock. See Note 15—Earnings Per Share to the Unaudited Consolidated Financial Statements of News Corporation.

Overview—The Company’s revenues increased 10% and 14% for the three and six months ended December 31, 2007, respectively, as compared to the corresponding periods of fiscal 2007. The increases for three and six months ended December 31, 2007 were primarily due to revenue increases at the Cable Network Programming, Newspapers and Information Services, DBS, and Other segments.

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Operating expenses for the three and six months ended December 31, 2007 increased approximately 2% and 8%, respectively, from the corresponding periods of fiscal 2007. The increases were primarily due to an increase in the amortization of production expenses and increased participation costs at the Filmed Entertainment segment, unfavorable foreign exchange movements at the DBS and Newspapers and Information Services segments and incremental expenses related to acquisitions. Partially offsetting these increases were lower sports programming costs at the Television segment.

Selling, General and Administrative expenses for the three and six months ended December 31, 2007 increased approximately 25% and 21%, respectively, as compared to the corresponding periods of fiscal 2007. These increases were primarily due to incremental expenses related to acquisitions, increased employee costs and Internet initiatives.

Depreciation and Amortization increased 39% and 47% for the three and six months ended December 31, 2007, respectively, as compared to the corresponding periods of fiscal 2007. The increases in depreciation and amortization were primarily due to accelerated depreciation at the Newspapers and Information Services segment and an increase in the amortization of finite lived intangible assets in conjunction with acquisitions made in fiscal 2007. Also contributing to the increases were additional property, plant and equipment placed into service.

During both the three and six months ended December 31, 2007, Operating income increased 24% from the corresponding periods of fiscal 2007. The increases in the three and six months ended December 31, 2007 were primarily due to increased Operating income at the Television, DBS, Cable Network Programming and Other Segments.

Equity (losses) earnings of affiliates—Net earnings from equity affiliates decreased $299 million and $296 million for the three and six months ended December 31, 2007, respectively, as compared to the corresponding periods of fiscal 2007. The decreases were primarily a result of lower contributions from British Sky Broadcasting Group plc (“BSkyB”) due to the write-down of its ITV plc investment in the three months ended December 31, 2007. The Company’s portion of the ITV plc write-down was $273 million.

	For the three months ended December 31,							For the six months ended December 31,
	2007			2006		% Change		2007		2006		% Change
	(in millions, except %)
DBS equity affiliates		(74	)		202	*	*		99		409	(76	)%
Cable channel equity affiliates		14			23	(39	)%		37		44	(16	)%
Other equity affiliates		10			24	(58	)%		60		39	54	%
Total equity (losses) earnings of affiliates	$	(50	)	$	249	*	*	$	196	$	492	(60	)%

** not meaningful

Interest expense, net—Interest expense, net increased $33 million and $46 million for the three and six months ended December 31, 2007, respectively, as compared to the corresponding periods of fiscal 2007, primarily due to the issuance of $1 billion 6.15% Senior Notes due 2037 in March 2007 and $1.25 billion 6.65% Senior Notes due 2037 in November 2007.

Interest income—Interest income increased $6 million and $31 million for the three and six months ended December 31, 2007, respectively, as compared to the corresponding periods of fiscal 2007, primarily as a result of higher average cash balances.

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Other, net—Other, net consisted of the following:

	For the three months ended December 31,						For the six months ended December 31,
	2007			2006			2007			2006
	(in millions)						(in millions)
Gain on the sale of China Netcom(a)	$	—		$	—		$	102		$	—
Gain on the sale of SKY Brasil(a)		—			—			—			261
Gain on the sale of Phoenix(a)		—			—			—			136
Change in fair value of exchangeable securities(b)		189			30			102			68
Other		(2	)		(12	)		(17	)		(19	)
Total Other, net	$	187		$	18		$	187		$	446

^(a) See Note 6—Investments to the Unaudited Consolidated Financial Statements of News Corporation.

^(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” (“SFAS No. 133”), these embedded derivatives require separate accounting and, as such, changes in their fair value are recognized in Other, net. A significant variance in the price of underlying stock could have a material impact on the operating results of the Company.

Income tax expense—The Company’s effective tax rate for the three and six months ended December 31, 2007 was 37% and 36%, respectively. The effective tax rate for the second quarter of fiscal 2008 was higher than the corresponding prior year period as the second quarter of fiscal 2007 effective tax rate was impacted by the resolution of foreign tax audits and the utilization of certain income tax credits. The effective rate for the six months ended December 31, 2007 of 36% was consistent with the effective rate for the six months ended December 31, 2006. The effective tax rate for the three and six months ended December 31, 2007 was higher than the U.S. statutory rate primarily due to foreign and state income taxes.

Minority interest in subsidiaries, net of tax—Minority interest expense increased $18 million and $36 million for the three and six months ended December 31, 2007, respectively, as compared to the corresponding periods of fiscal 2007. These increases were primarily due to the additional minority interest allocated to minority shareholders of National Geographic Channel (US) (“NGC US”) and the international National Geographic entities that were not consolidated in the corresponding periods of the prior fiscal year.

Net income—Net income increased $10 million and decreased $101 million for the three and six months ended December 31, 2007, respectively, as compared to the corresponding periods of fiscal 2007. The increase in Net income for the three months ended December 31, 2007 was primarily due to the increase in Operating income noted above and an increase in Other, net, partially offset by the decrease in earnings from equity affiliates noted above. The decrease in Net income for the six months ended December 31, 2007 was primarily due to the decrease in earnings from equity affiliates noted above and a decrease in Other, net due to the absence of gains on the sale of SKY Brasil and Phoenix Satellite Television Holdings Limited included in the corresponding period of fiscal 2007. The decrease in Net income for the six months ended December 31, 2007 was partially offset by the increase in Operating income noted above.

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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, 2007, as compared to the three and six months ended December 31, 2006.

	For the three months ended December 31,							For the six months ended December 31,
	2007		2006			% Change		2007			2006			% Change
	(in millions, except %)
Revenues:
Filmed Entertainment	$	1,976	$	2,265		(13	)%	$	3,558		$	3,478		2	%
Television		1,530		1,600		(4	)%		2,675			2,703		(1	)%
Cable Network Programming		1,236		920		34	%		2,338			1,809		29	%
Direct Broadcast Satellite Television		955		764		25	%		1,702			1,386		23	%
Magazines and Inserts		273		266		3	%		537			541		(1	)%
Newspapers and Information Services		1,416		1,118		27	%		2,660			2,167		23	%
Book Publishing		406		393		3	%		736			761		(3	)%
Other		798		518		54	%		1,451			913		59	%
Total revenues	$	8,590	$	7,844		10	%	$	15,657		$	13,758		14	%
Operating income (loss):
Filmed Entertainment	$	403	$	470		(14	)%	$	765		$	709		8	%
Television		245		112		*	*		428			304		41	%
Cable Network Programming		337		275		23	%		626			524		19	%
Direct Broadcast Satellite Television		62		(12	)	*	*		110			(25	)	*	*
Magazines and Inserts		85		74		15	%		164			152		8	%
Newspapers and Information Services		196		170		15	%		289			294		(2	)%
Book Publishing		67		54		24	%		103			109		(6	)%
Other		23		1		*	*		(20	)		(72	)	(72	)%
Total operating income	$	1,418	$	1,144		24	%	$	2,465		$	1,995		24	%

** not meaningful

Filmed Entertainment (23% and 25% of the Company’s consolidated revenues in the first six months of fiscal 2008 and 2007, respectively)

For the three months ended December 31, 2007, revenues and Operating income at the Filmed Entertainment segment decreased $289 million, or 13%, and $67 million, or 14%, respectively, as compared to the corresponding period of fiscal 2007. The revenue decrease was primarily due to a decrease in worldwide theatrical and home entertainment revenues partially offset by higher syndication revenues from Twentieth Century Fox Television. The three months ended December 31, 2006 included the successful theatrical performances of The Devil Wears Prada, Night at the Museum and Borat: Cultural Learnings of America for Make Benefit Glorious Nation of Kazakhstan and the successful home entertainment performances of Ice Age: The Meltdown, X-Men: The Last Stand and The Devil Wears Prada. The three months ended December 31, 2007 included the successful theatrical releases and initial releasing costs of Alvin and the Chipmunks and Juno and the home entertainment performance of The Simpsons Movie, Live Free or Die Hard and Fantastic Four: Rise of the Silver Surfer. The decrease in Operating income was primarily due to the revenue decreases noted above, partially offset by a $226 million decrease in operating expenses. The decrease in operating expenses was due to lower releasing costs and lower amortization of production and participation expenses.

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For the six months ended December 31, 2007, revenues and Operating income at the Filmed Entertainment segment increased $80 million, or 2%, and $56 million, or 8%, respectively, as compared to the corresponding period of fiscal 2007. The revenue increase was primarily due to an increase in worldwide theatrical and pay television revenues, as well as higher syndication revenues from Twentieth Century Fox Television, partially offset by lower home entertainment revenues. The increase in worldwide theatrical revenues for the six months ended December 31, 2007 was primarily due to the worldwide success of The Simpsons Movie, Alvin and the Chipmunks and Live Free or Die Hard. Syndication revenues increased primarily due to the worldwide availability of Family Guy and higher international revenues from Prison Break and The Simpsons. The increase in worldwide pay television revenues for motion picture product was primarily due to a stronger film lineup in fiscal 2008. Worldwide home entertainment revenues decreased primarily due to the successful performance of Ice Age: The Meltdown in the corresponding period of fiscal 2007. The increase in Operating income was primarily due to the revenue increases noted above, partially offset by an increase in amortization of production and participation expenses.

Television (17% and 20% of the Company’s consolidated revenues in the first six months of fiscal 2008 and 2007, respectively)

For the three and six months ended December 31, 2007, Television segment revenues decreased $70 million, or 4%, and $28 million, or 1%, respectively, as compared to the corresponding periods of fiscal 2007. The Television segment reported an increase in Operating income for the three and six months ended December 31, 2007 of $133 million and $124 million, respectively, as compared to the corresponding periods of fiscal 2007.

Revenues for the three and six months ended December 31, 2007 at the Company’s U.S. television operations decreased 6% and 3%, respectively, as compared to the corresponding periods of fiscal 2007. The decreases were primarily due to the absence of the MLB Divisional Series in fiscal 2008 and a decrease in political advertising revenue at the Company’s television stations. These revenue decreases were partially offset by higher advertising revenue due to increased pricing and higher network ratings for NFL and entertainment programming and from the Emmy Awards, which was broadcast in the six months ended December 31, 2007. Operating income for the three and six months ended December 31, 2007 at the Company’s U.S. television operations increased as compared to the corresponding periods of fiscal 2007. The increases in Operating income were a result of the higher revenue increases noted above and a decrease in sports programming costs due to the absence of the MLB Divisional Series. Also contributing to the increases in Operating income were improved operating results at MyNetworkTV due to lower programming costs.

Revenues for the three and six months ended December 31, 2007 at the Company’s international television operations increased as compared to the corresponding periods of fiscal 2007. The increases were primarily due to higher advertising revenues in India and higher subscription revenues. Operating income at the Company’s international television operations increased for the three and six months ended December 31, 2007 as compared to the corresponding periods of fiscal 2007, primarily due to the revenue increases noted above which were partially offset by increased programming costs.

Cable Network Programming (15% and 13% of the Company’s consolidated revenues in the first six months of fiscal 2008 and 2007, respectively)

For the three and six months ended December 31, 2007, revenues for the Cable Network Programming segment increased $316 million, or 34%, and $529 million, or 29%, respectively, as compared to the corresponding periods of fiscal 2007. These increases were driven by higher net affiliate and advertising revenues at Fox News, the RSNs, FX, and the Company’s international cable channels. Also contributing to the revenue growth was incremental revenues of $125 million and $181 million for the three and six months ended December 31, 2007, respectively, due to the consolidation of the National Geographic channels.

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For the three and six months ended December 31, 2007, Fox News’ revenues increased 26% and 30%, respectively, as compared to the corresponding periods of fiscal 2007, primarily due to an increase in net affiliate and advertising revenues. Net affiliate revenues increased 62% and 79% for the three and six months ended December 31, 2007, respectively, primarily due to higher average rates per subscriber and lower cable distribution amortization as compared to the corresponding periods of fiscal 2007. Advertising revenues for both the three and six months ended December 31, 2007 increased 10% as compared to the corresponding periods of fiscal 2007 due to higher volume and higher pricing. As of December 31, 2007, Fox News reached approximately 95 million Nielsen households.

The RSNs’ revenues increased 10% for both the three and six months ended December 31, 2007 as compared to the corresponding periods of fiscal 2007, primarily due to increases in net affiliate revenues. During the three and six months ended December 31, 2007, net affiliate revenues increased 13% and 12%, respectively, as compared to the corresponding periods of fiscal 2007, primarily due to higher affiliate rates and a higher number of subscribers. Advertising revenue increased approximately 5% during the six months ended December 31, 2007, primarily due to additional revenues from the increased number of MLB and National Basketball Association (“NBA”) games broadcasted and higher advertising rates.

FX’s revenues increased 6% for both the three and six months ended December 31, 2007 as compared to the corresponding periods of fiscal 2007, driven by net affiliate revenue and ancillary revenue increases. Net affiliate revenues increased for the three and six months ended December 31, 2007 as a result of an increase in average rate per subscriber and the number of subscribers. As of December 31, 2007, FX reached approximately 95 million Nielsen households.

The Company’s international cable channels’ revenues increased for the three and six months ended December 31, 2007 as compared to the corresponding periods of fiscal 2007, primarily due to the consolidation of NGC Network International LLC (“NGC International”), NGC Network Latin America LLC (“NGC Latin America”) and NGC Network Europe LLC (“NGC Europe”) which were not consolidated in the corresponding periods of the prior fiscal year. Also contributing to these increases were improved advertising sales and subscriber growth at the other FIC channels.

For the three and six months ended December 31, 2007, Operating income at the Cable Network Programming segment increased $62 million, or 23%, and $102 million, or 19%, respectively, as compared to the corresponding periods of fiscal 2007, primarily due to the increases in revenues noted above. The revenue increases were partially offset by $169 million and $288 million increases in operating expenses during the three and six months ended December 31, 2007, respectively, as compared to the corresponding periods of fiscal 2007. The increases in operating expenses were primarily due to increased programming costs resulting from an increase in the number of MLB and NBA games broadcasted, higher entertainment programming costs of movies and new shows, the launch of the Big Ten Network in August 2007, the consolidation of the international National Geographic channels and the October 2007 launch of Fox Business Network. The launches of the Big Ten Network and Fox Business Network resulted in approximately $50 million and $85 million in operating losses for the three and six months ended December 31, 2007, respectively. The consolidation of the National Geographic channels resulted in incremental Operating income of approximately $38 million and $56 million for the three and six months ended December 31, 2007, respectively. Also contributing to the increased expenses were higher Selling, General, and Administrative expenses during the three and six months ended December 31, 2007, primarily due to the launch of the new channels.

Direct Broadcast Satellite Television (11% and 10% of the Company’s consolidated revenues in the first six months of fiscal 2008 and 2007, respectively)

For the three and six months ended December 31, 2007, SKY Italia revenues increased $191 million, or 25%, and $316 million, or 23%, as compared to the corresponding periods of fiscal 2007. This revenue growth was primarily driven by an increase of approximately 400,000 subscribers over the corresponding period of fiscal 2007 and the weakening of the U.S. dollar which resulted in 12% and 10% of the increase in revenues for the three and six months ended December 31, 2007, respectively. During the second quarter of fiscal 2008, SKY

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Italia added approximately 189,000 net subscribers, which increased SKY Italia’s total subscriber base to 4.4 million at December 31, 2007. The total churn for the three months ended December 31, 2007 was approximately 80,000 subscribers on an average subscriber base of 4.3 million, as compared to churn of approximately 102,000 subscribers on an average subscriber base of 3.9 million in the corresponding period of fiscal 2007. The total churn for the six months ended December 31, 2007 was approximately 230,000 subscribers on an average subscriber base of 4.3 million, as compared to churn of approximately 249,000 subscribers on an average subscriber base of 3.9 million in the corresponding period of fiscal 2007. Subscriber churn for the period represents the number of SKY Italia subscribers whose service was disconnected during the period.

Average revenue per subscriber (“ARPU”) for the three and six months ended December 31, 2007 was approximately €45 and €42, respectively, which were consistent with the ARPU for the corresponding periods of fiscal 2007. SKY Italia calculates ARPU by dividing total subscriber-related revenues for the period by the average subscribers for the period and dividing that amount by the number of months in the period. Subscriber-related revenues are comprised of total subscription revenue, pay-per-view revenue and equipment rental revenue for the period. Average subscribers are calculated for the respective periods by adding the beginning and ending subscribers for the period and dividing by two.

Subscriber acquisition costs per subscriber (“SAC”) of approximately €270 in the second quarter of fiscal 2008 increased over the second quarter of fiscal 2007, primarily due to increased marketing costs both in the aggregate and on a per gross addition basis due to a lower number of gross SKY Italia subscribers added during the second quarter of fiscal 2008 as compared to the corresponding prior year period. SAC is calculated by dividing total subscriber acquisition costs for a period by the number of gross SKY Italia subscribers added during the period. Subscriber acquisition costs include the cost of the commissions paid to retailers and other distributors, the cost of equipment sold directly by SKY Italia to subscribers and the costs related to installation and acquisition advertising, net of any upfront activation fee. SKY Italia excludes the value of equipment capitalized under SKY Italia’s equipment lease program, as well as payments and the value of returned equipment related to disconnected lease program subscribers from subscriber acquisition costs.

For the three and six months ended December 31, 2007, SKY Italia’s operating results improved by $74 million and $135 million, respectively, as compared to the corresponding periods of fiscal 2007. The increases were primarily due to the revenue increases noted above, partially offset by an increase in operating expenses. The increase in operating expenses was due to higher fees paid for programming costs as a result of an increase in the number of subscribers and the additions of new channels. For the three and six months ended December 31, 2007, the weakening of the U.S. dollar represented 12% and 10%, respectively, of the total improvement in operating results.

Magazines and Inserts (3% and 4% of the Company’s consolidated revenues in the first six months of fiscal 2008 and 2007, respectively)

For the three months ended December 31, 2007, revenues at the Magazines and Inserts segment increased $7 million, or 3%, as compared to the corresponding period of fiscal 2007, primarily due to an increase in volume and rates of in-store marketing products, partially offset by lower rates and volume for free-standing insert products. For the six months ended December 31, 2007, revenues at the Magazines and Inserts segment decreased $4 million, or 1%, as compared to the corresponding period of fiscal 2007, primarily due to lower volume and rates on the Company’s free-standing insert products. These decreases were partially offset by higher rates and volume for in-store marketing products.

For the three and six months ended December 31, 2007, Operating income at the Magazines and Inserts segment increased $11 million, or 15%, and $12 million, or 8%, respectively, as compared to the corresponding periods of fiscal 2007. The increases were primarily due to lower printing and paper rates for free-standing insert products. The increase for the six months ended December 31, 2007 was partially offset by the decrease in revenues noted above.

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Newspapers and Information Services (17% and 16% of the Company’s consolidated revenues in the first six months of fiscal 2008 and 2007, respectively)

For the three and six months ended December 31, 2007, revenues at the Newspapers and Information Services segment increased $298 million, or 27%, and $493 million, or 23%, as compared to the corresponding periods of fiscal 2007. Revenues in Australia, the United States and the United Kingdom were all higher in the three and six months ended December 31, 2007. The increase in the U.S. revenue was due to the acquisition of Dow Jones on December 13, 2007. The Dow Jones results have been included in the Newspapers and Information Services segment since December 14, 2007. Operating income for the three months ended December 31, 2007 increased $26 million, or 15%, and decreased $5 million, or 2%, for the six months ended December 31, 2007, as compared to the corresponding periods of fiscal 2007, primarily related to the Australian and U.K. operating results as Dow Jones did not have a material impact on Operating income. During the three and six months ended December 31, 2007, the weakening of the U.S. dollar resulted in increases of approximately 9% in revenue and approximately 15% in operating income as compared to the corresponding periods of fiscal 2007.

For the three and six months ended December 31, 2007, the Australian newspapers’ revenues increased 33% and 31%, respectively, primarily due to higher advertising revenues, incremental revenues from the acquisition of the Federal Publishing Company’s group of companies in April 2007 and favorable foreign exchange movements. Operating income for the three and six months ended December 31, 2007 increased 32% and 30%, respectively, as compared to the corresponding periods of fiscal 2007, primarily due to the revenue increases noted above which were partially offset by an increase in employee related costs.

For both the three months and six months ended December 31, 2007, the UK newspapers’ revenues increased 9%, as compared to the corresponding periods of fiscal 2007, primarily due to higher Internet revenues, as well as favorable foreign exchange movements. Internet revenues increased primarily due to the incremental revenues from acquisitions made in fiscal 2007 and higher Internet advertising revenues. Operating income decreased for the three and six months ended December 31, 2007 as compared to the corresponding periods of fiscal 2007, primarily due to incremental accelerated depreciation of $24 million and $86 million, respectively, recorded for the U.K. printing presses and printing facilities that are being replaced earlier than originally anticipated. The Company’s upgrade to new printing plants and presses is expected to be completed in the fourth quarter of fiscal 2008.

Book Publishing (5% of the Company’s consolidated revenues in the first six months of fiscal 2008 and 2007, respectively)

For the three months ended December 31, 2007, revenues at the Book Publishing segment increased $13 million, or 3%, as compared to the corresponding period of fiscal 2007. Notable sales performances during the three months ended December 31, 2007, included The Daring Book For Girls by Andrea J. Buchanan and Miriam Peskowitz, The Dangerous Book For Boys by Conn and Hal Iggulden and Deceptively Delicious by Jessica Seinfeld. This increase was partially offset by a reduction in sales of the successful children’s Lemony Snicket’s Series of Unfortunate Events titles as compared to the corresponding period of fiscal 2007. During the three months ended December 31, 2007, HarperCollins had 40 titles on The New York Times Bestseller List with five titles reaching the number one position. For the six months ended December 31, 2007, revenues at Book Publishing segment decreased $25 million, or 3%, from the corresponding period of fiscal 2007, primarily due to lower revenue on Lemony Snicket’s Series of Unfortunate Events titles. This decrease was partially offset by higher distribution revenues earned on the final release of the Harry Potter series book published by Scholastic and the addition of a new distribution client during the six months ended December 31, 2007. During the six months ended December 31, 2007, HarperCollins had 81 titles on The New York Times Bestseller List with ten titles reaching the number one position.

Operating income for the three months ended December 31, 2007 increased $13 million, or 24%, as compared to the corresponding period of fiscal 2007, primarily due to the revenue increases noted above. Also contributing to the increases during the three months was a lower provision for bad debt as the prior fiscal year

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included a provision for the bankruptcy filing of a major distributor. Operating income for the six months ended December 31, 2007 decreased $6 million, or 6%, as compared to the corresponding period of fiscal 2007, primarily due to the revenue decreases noted above.

Other (9% and 7% of the Company’s consolidated revenues in the first six months of fiscal 2008 and 2007, respectively)

For the three and six months ended December 31, 2007, revenues at the Other operating segment increased $280 million, or 54%, and $538 million, or 59%, respectively, as compared to the corresponding periods of fiscal 2007, primarily due to incremental revenues received from the search technology and services agreement with Google and increased advertising revenues from FIM’s Internet sites. The revenue increases were also driven by incremental revenues from Jamba which was acquired in January 2007.

Operating results for the three and six months ended December 31, 2007 increased $22 million and $52 million, respectively, as compared to the corresponding periods of fiscal 2007. The increases were primarily due to approximately $59 million and $74 million increases in operating results at FIM for the three and six months ended December 31, 2007, respectively, which were due to the FIM revenue increases noted above. The improved operating results were partially offset by start up losses in conjunction with the Company’s Eastern European broadcasting initiatives.

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 $2.25 billion revolving credit facility and various film co-production alternatives to supplement its cash flows. Also, as of December 31, 2007, the Company had consolidated cash and cash equivalents of approximately $3.5 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 the Company’s 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 including employee costs; capital expenditures; interest expense; income tax payments; investments in associated entities; dividends; acquisitions; and stock repurchases.

Sources and uses of cash

Net cash provided by operating activities for the six months ended December 31, 2007 and 2006 was as follows (in millions):

	For the six months ended December 31,
	2007		2006
Net cash provided by operating activities	$	739	$	705

The increase in net cash provided by operating activities during the six months ended December 31, 2007 as compared to the corresponding period of fiscal 2007 reflects higher home entertainment receipts at the Filmed Entertainment segment which was partially offset by higher income tax payments.

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Net cash used in investing activities for the six months ended December 31, 2007 and 2006 was as follows (in millions):

	For the six months ended December 31,
	2007			2006
Net cash used in investing activities	$	(5,829	)	$	(1,020	)

Net cash used in investing activities during the six months ended December 31, 2007 increased as compared to the corresponding period of fiscal 2007. This increase was primarily due to Company’s acquisition of Dow Jones in December 2007 and Photobucket in July 2007.

Net cash provided by (used in) financing activities for the six months ended December 31, 2007 and 2006 was as follows (in millions):

	For the six months ended December 31,
	2007		2006
Net cash provided by (used in) financing activities	$	910	$	(101	)

Cash provided by financing activities was primarily due to net proceeds of $1,248 from the issuance of $1,250 million 6.65% Senior Notes due 2037 in November 2007. Cash provided by financing activities was partially offset by dividends paid, repayments of borrowings and stock repurchases. During the six months ended December 31, 2007, the Company repurchased approximately 6.0 million shares for $122 million under the Company’s stock repurchase program as compared to repurchases of 3.2 million shares for $59 million during the six months ended December 31, 2006.

Debt Instruments

	For the six months ended December 31,
	2007			2006
	(in millions)
Borrowings
Notes Due 2037	$	1,248		$	—
RZB loan		7			160
All other		7			—
Total borrowings	$	1,262		$	160
Repayments of borrowings
EBRD loan		—		$	(154	)
All other		(132	)		(36	)
Total repayments of borrowings	$	(132	)	$	(190	)

Other

The Company’s 6.625% Senior Notes due 2008 in the amount of $350 million are due within the next twelve months and are classified as current borrowings as of December 31, 2007. In January 2008, the Company retired its $350 million 6.625% Senior Notes.

The Company’s 7.375% Senior Notes due 2008 in the amount of $200 million are due within the next twelve months and are classified as current borrowings as of December 31, 2007.

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As part of the Dow Jones acquisition, the Company assumed total debt of $378 million which consisted of: 3.875% notes due 2008 in the amount of $225 million, $131 million in commercial paper and a $22 million variable interest note. In December 2007, the Company retired all of the commercial paper outstanding and in February 2008, the Company will retire its $225 million 3.875% notes. (See Note 2 to the Unaudited Consolidated Financial Statements of News Corporation for further discussion of the Dow Jones acquisition.)

Stock Repurchase Program

On June 13, 2005, the Company announced that its Board of Directors (the “Board”) approved a stock repurchase program, under which the Company was authorized to acquire up to an aggregate of $3.0 billion in Class A Common Stock and Class B Common Stock. In May 2006, the Company announced that the Board authorized increasing the total amount of the stock repurchase program to $6.0 billion. The remaining authorized amount under the Company’s stock repurchase program at December 31, 2007, excluding commissions, was approximately $2 billion.

Ratings of the Public Debt

The table below summarizes the Company’s current credit ratings.

	Senior Debt	Outlook
Rating Agency
Moody’s	Baa 2	Stable
S&P	BBB+	Stable

Revolving Credit Agreement

On May 23, 2007, News America Incorporated (“NAI”), a subsidiary of the Company, terminated its existing $1.75 billion Revolving Credit Agreement (the “Prior Credit Agreement”) and entered into a new Credit Agreement (the “New Credit Agreement”), among NAI as Borrower, the Company as Parent Guarantor, the lenders named therein (the “Lenders”), Citibank, N.A. as Administrative Agent and JPMorgan Chase Bank, N.A. as Syndication Agent. The New Credit Agreement consists of a $2.25 billion five-year unsecured revolving credit facility with a sublimit of $600 million available for the issuance of letters of credit. Borrowings are in U.S. dollars only, while letters of credit are issuable in U.S. Dollars or Euros. The significant terms of the New Credit Agreement include, among others, the requirement that the Company maintain specific leverage ratios and limitations on secured indebtedness. The Company will pay a facility fee of 0.08% regardless of facility usage. The Company will pay interest of a margin over LIBOR for borrowings and a letter of credit fee of 0.27%. The Company is subject to additional fees of 0.05% if borrowings under the facility exceed 50% of the committed facility. The interest and fees are based on the Company’s current debt rating. Under the New Credit Agreement, NAI may request an increase in the amount of the credit facility up to a maximum amount of $2.5 billion. The New Credit Agreement is available for the general corporate purposes of NAI, the Company and its subsidiaries. The maturity date is in May 2012, however, NAI may request that the Lenders’ commitments be renewed for up to two additional one year periods. At December 31, 2007, no amounts were outstanding under the New Credit Agreement.

Commitments

In July 2007, the Company entered into a contract with the Big Ten Conference for rights to telecast certain Big Ten Conference sporting events through fiscal 2032. The Company will pay approximately $2.8 billion over the term of the contract for these rights.

In November 2007, the Company entered into a long-term supply contract pursuant to which the Company will purchase paper for its newspaper printing facilities in the United Kingdom from a third party. The contract requires the Company to purchase a minimum of $590 million of paper from this third party through fiscal 2015.

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In December 2007, as part of the Dow Jones acquisition, the Company assumed approximately $994 million of commitments previously entered into by Dow Jones which included $247 million of indebtedness at December 31, 2007.

Other than previously disclosed in the notes to these unaudited consolidated financial statements, the Company’s commitments have not changed significantly from disclosures included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2007 filed with the SEC on August 23, 2007.

Guarantees

Other than previously disclosed in the notes to these unaudited consolidated financial statements, the Company’s guarantees have not changed significantly from disclosures included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2007 filed with the SEC on August 23, 2007.

Contingencies

Other than previously disclosed in the notes to the Company’s unaudited consolidated financial statements, the Company is party to several other purchase and sale arrangements which become exercisable over the next ten years by the Company or the counter-party to the agreement. In the next twelve months, none of these arrangements that become exercisable are material. Purchase arrangements that are exercisable by the counter-party to the agreement, and that are outside the sole control of the Company are accounted for in accordance with Emerging Issues Task Force Topic No. D-98 “Classification and Measurement of Redeemable Securities.” Accordingly, the fair values of such purchase arrangements are classified in Minority interest liabilities.

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

Recent Accounting Pronouncements

See Note 1—Basis of Presentation to the Unaudited Consolidated Financial Statements of News Corporation for discussion of recent accounting pronouncements.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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

The following sections provide quantitative information on the Company’s exposure to foreign currency exchange rate risk, interest rate risk and stock price risk. 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

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

At December 31, 2007, the Company’s outstanding financial instruments with foreign currency exchange rate risk exposure had an aggregate fair value of $188 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 $19 million at December 31, 2007.

Interest Rates

The Company’s current financing arrangements and facilities include $14.0 billion of outstanding debt with fixed interest and the New Credit Agreement, which carries variable interest. Fixed and variable rate debts are impacted differently by changes in interest rates. A change in the interest rate or yield of fixed rate debt will only impact the fair market value of such debt, while a change in the interest rate of variable debt will impact interest expense, as well as the amount of cash required to service such debt. As of December 31, 2007, substantially all of the Company’s financial instruments with exposure to interest rate risk were denominated in U.S. dollars and had an aggregate fair market value of $14.9 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 $725 million at December 31, 2007.

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 had an aggregate fair value of approximately $21,542 million as of December 31, 2007. A hypothetical decrease in the market price of these investments of 10% would result in a fair value of approximately $19,388 million. Such a hypothetical decrease would result in a before tax decrease in comprehensive income of approximately $20 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, “Accounting for Derivative Instruments and Hedging Activities,” the Company has recorded the conversion feature embedded in its exchangeable debentures in other liabilities. At December 31, 2007, the fair value of this conversion feature was $255 million and this conversion feature is sensitive to movements in the share price of one of the Company’s publicly traded equity affiliates. A significant variance in the price of the underlying stock could have a material impact on the operating results of the Company. A 10% increase in the price of the underlying shares, holding other factors constant, would increase the fair value of the call option by approximately $98 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 were effective in recording, processing, summarizing and reporting, on a timely basis, information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act and were effective in ensuring that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including the Company’s Chairman and Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

(b) Internal Control Over Financial Reporting

There has been no change in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15(d)-15(f) under the Exchange Act) during the Company’s second quarter of fiscal 2008 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II

ITEM 1. LEGAL PROCEEDINGS

See Note 12—Contingencies to the unaudited consolidated financial statements, which is incorporated herein by reference.

ITEM 1A. 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 or in its television stations, broadcast and cable networks, newspapers and inserts, websites and DBS services. Expenditures by advertisers tend to be cyclical, reflecting overall economic conditions, as well as budgeting and buying patterns. A decline in the economic prospects of advertisers or the economy in general could alter current or prospective advertisers’ spending priorities. Demand for the Company’s products is also a factor in determining advertising rates. For example, ratings points for the Company’s television stations, broadcast and cable networks and circulation levels for the Company’s newspapers are factors that are weighed when determining advertising rates, and with respect to the Company’s television stations and broadcast and television networks, when determining the affiliate rates received by the Company. In addition, newer technologies, including new video formats, streaming and downloading capabilities via the Internet, video-on-demand, personal video recorders and other devices and technologies are increasing the number of media and entertainment choices available to audiences. Some of these devices and technologies allow users to view television or motion pictures from a remote location or on a time- delayed basis and provide users the ability for users to fast-forward, rewind, pause and skip programming. These

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technological developments are increasing the number of media and entertainment choices available to audiences and may cause changes in consumer behavior that could affect the attractiveness of the Company’s offerings to viewers, advertisers and/or distributors. A decrease in advertising expenditures or reduced demand for the Company’s offerings can lead to a reduction in pricing and advertising spending, which could have an adverse effect on the Company’s businesses.

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

Feature film and television production and distribution are speculative businesses since the revenues derived from the production and distribution of a feature film or television series depend primarily upon its acceptance by the public, which is difficult to predict. The commercial success of a feature film or television series also depends upon the quality and acceptance of other competing films and television series released into the marketplace at or near the same time, the availability of a growing number of alternative forms of entertainment and leisure time activities, general economic conditions and 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 MyNetworkTV 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 steps taken by the Company may not in every case prevent the infringement by unauthorized third parties.

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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.

Labor Disputes May Have an Adverse Effect on the Company’s Business.

In a variety of the Company’s business, the Company and its partners engage the services of writers, directors, actors and other talent, trade employees and others who are subject to collective bargaining agreements, including employees of the Company’s film and television studio operations and newspapers. If the Company or its partners are unable to renew expiring collective bargaining agreements, certain of which have or are expiring within the next year or so, it is possible that the affected unions could take action in the form of strikes or work stoppages. Such actions, as well as higher costs in connection with these collective bargaining agreements or a significant labor dispute could have an adverse effect on the Company’s business by causing delays in production or by reducing profit margins. On November 5, 2007, the Writers Guild of America (East and West) (the “WGA”) commenced a strike against film and television studios following the expiration of its collective bargaining agreement on October 31, 2007. The Company’s Filmed Entertainment and Television segments and certain of its suppliers retain the services of writers who are members of the WGA. The WGA strike, depending on its duration, may cause delays in the production and/or release dates of the Company’s television programs and feature films, and may result in higher costs due to the strike itself or less favorable terms for the Company of a future agreement with the WGA. The Company is currently unable to estimate the impact of the WGA strike on the Company’s revenues and operating income, if any.

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

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;

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• 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 (the “Board”) to issue and set the terms of preferred stock.

In addition, the Company currently has in place 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 the Board. 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 Murdoch Family Trust, which beneficially owns 0.8% of the Company’s Class A Common Stock and 30.1% of the Class B Common Stock, Mr. K. Rupert Murdoch may be deemed to be a beneficial owner of the shares beneficially owned by the Murdoch Family Trust. Mr. K. Rupert Murdoch, however, disclaims any beneficial ownership of those shares. Also, Mr. K. Rupert Murdoch beneficially owns an additional 1.1% of the Class A Common Stock and 1.1% of the Class B Common Stock. Thus, Mr. K. Rupert Murdoch may be deemed to beneficially own in the aggregate 1.9% of the Class A Common Stock and 31.2% of the Class B Common Stock. If the Share Exchange Agreement is consummated, the Company intends to redeem the rights issued under the stockholder rights plan at that time and to take the necessary steps to declassify its classified board structure. Further, if the Share Exchange Agreement is consummated, the aggregate voting power represented by the shares of Class B Common Stock held by Mr. K. Rupert Murdoch and the Murdoch Family Trust would increase to approximately 38.6% of the Company’s aggregate voting power, subject to further increase to approximately 40.0% if the Company completes its previously announced stock repurchase program.

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

Not applicable.

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 19, 2007. 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 I Directors:

Name	For	Withheld
K. Rupert Murdoch	835,005,276	2,298,509
Peter L. Barnes	836,455,569	2,190,170
Kenneth E. Cowley	832,929,601	4,890,700
David F. DeVoe	826,958,107	9,087,771
Viet Dinh	834,562,322	4,092,127

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, 2008 was voted upon as follows:

For:	834,420,201
Against:	3,172,372
Abstain:	939,089

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Proposal 3: A stockholder proposal on the annual election of directors was voted upon as follows:

For:	139,626,577
Against:	666,560,172
Abstain:	8,524,483

Proposal 4: A stockholder proposal on the elimination of the Company’s dual class capital structure was voted upon as follows:

For:	184,952,845
Against:	620,955,265
Abstain:	8,550,721

ITEM 5. OTHER INFORMATION

Not applicable.

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ITEM 6. EXHIBITS

(a)    Exhibits.
4.1	Registration Rights Agreement, dated November 14, 2007, by and among News America Incorporated, News Corporation and J.P. Morgan Securities Inc. as Initial Purchaser.*
4.2	Form of Notes representing $1.25 billion principal amount of 6.65% Senior Notes due 2037 and Officers’ Certificate of News Corporation relating thereto, dated November 14, 2007, pursuant to Section 301 of the Amended and Restated Indenture, dated as of March 24, 1993, as supplemented, among News America Incorporated, the Guarantor named therein and The Bank of New York Mellon Corporation, as Trustee.*
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.

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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 6, 2008

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EX-4.1

Exhibit 4.1

Execution Version

6.65% Senior Notes due 2037

REGISTRATION RIGHTS AGREEMENT

Dated as of November 14, 2007

by and among

NEWS AMERICA INCORPORATED,

NEWS CORPORATION

and

J.P. MORGAN SECURITIES INC.

as Initial Purchaser

REGISTRATION RIGHTS AGREEMENT

THIS REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is made and entered into as of November 14, 2007 by and among NEWS AMERICA INCORPORATED, a Delaware corporation (the “Issuer”), NEWS CORPORATION, a Delaware corporation (the “Guarantor”), and J.P. MORGAN SECURITIES INC. (the “Initial Purchaser”).

This Agreement is made pursuant to the Purchase Agreement, dated as of November 8, 2007, by and among the Issuer, the Guarantor 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 $1,250,000,000 principal amount of the Issuer’s 6.65% Senior Notes Due 2037 (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)(ii) 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 guarantee of the Guarantor on the original Securities (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 November 14, 2007 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 relating to the Securities, dated as of March 24, 1993, among the Company as issuer of the Securities, the guarantors named therein, and The Bank of New York, as trustee (the “Trustee”), and 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, an Eleventh Supplemental Indenture, dated as of March 21, 2005, and a Twelfth Supplemental Indenture, dated as of May 23, 2007, as the same may be amended or supplemented 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(m) 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.

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“Participating Broker-Dealer” shall have the meaning set forth in Section 3(s) 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(m) 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 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 Guarantor and of the independent certified public accountants of the Issuer and the Guarantor, 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 Paul, Hastings, Janofsky & Walker 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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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, if issued) 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, if issued) 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, if issued) 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), with such Exchange Securities, from and after their receipt, having no limitations or restrictions on their transfer 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 Private Exchange Securities, if any, shall be issued under the Indenture. 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, if issued) who wishes to exchange such Registrable Securities (other than Private Exchange Securities, if issued) 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

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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, if issued, 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, if issued) 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 (1) due to a change in law or SEC policy it is not entitled to participate in the Exchange Offer, (2) 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 (3) 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 in the case of any of (i) through (iv), 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 180th 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 after the obligation to file the Shelf Registration Statement arises (in the case of (B) above). No Holder of Registrable Securities

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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, if issued, 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, if issued, 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 any 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 Shelf Registration Statement will be deemed not to have been effective during the period of such interference, until the offering of Registrable Securities may legally resume. The

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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(f) 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, if issued) 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 on 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, if issued, 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 (1) 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), (2) 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), (3) the issuance of Exchange Securities in exchange for all Securities (other than the Private Exchange Securities, if issued) properly tendered and not withdrawn in the Exchange Offer (in the case of clause (iii) of the preceding sentence), or (4) 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, if issued) 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 its 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 five 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;

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(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; 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, (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) notification from Participating Broker-Dealers 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

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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 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) of 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 Guarantor and updates thereof, if appropriate, in form and substance similar to the opinion given by counsel to the Issuer and the Guarantor 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 Guarantor (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

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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 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, the Guarantor and the other subsidiaries of Guarantor (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 Guarantor and the other subsidiaries of the Guarantor 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 Guarantor determines 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 Guarantor and allow the Issuer and the Guarantor 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 its 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 Guarantor 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 Guarantor, enforceable against the Issuer and the Guarantor in accordance with its respective terms (in each case, with customary exceptions);

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(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 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 its 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:

“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;”

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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, 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(c) 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

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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 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) hereof; 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, copies of the supplemented or amended Prospectus necessary to resume such dispositions or 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 (1) made in reliance upon and in conformity with written information furnished in writing to the Issuer or the Guarantor 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 (2) 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) hereof 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 Guarantor, 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 Guarantor, 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 Guarantor 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

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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.

(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

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expenses of counsel, such indemnifying party shall not be liable for any settlement of the nature contemplated by Section 4(a)(ii) effected without its prior written consent if such indemnifying party (1) reimburses such indemnified party in accordance with such request to the extent it considers such request to be reasonable and (2) provides written notice to the indemnified party substantiating the unpaid balance as unreasonable, in each case prior to the date of such settlement.

(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 Guarantor, 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 Guarantor 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 Guarantor 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 Guarantor 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 Guarantor, 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 Guarantor 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 rights to contribution as such other Person, and each member or director of the Issuer or the 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.

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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 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 five 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. Guarantor. 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 Guarantor.

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 it 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 (1) Rule 144 under the Securities Act, as such rule may be amended from time to time, (2) Rule 144A under the Securities Act, as such rule may be amended from time to time, or (3) 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. The provisions of this Agreement, including the 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 or the Guarantor, initially at the Issuer’s and the Guarantor’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 Guarantor, 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.

22

(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.

(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 its 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]

23

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

NEWS AMERICA INCORPORATED
By:	/s/ Janet Nova
Name:	Janet Nova
Title:	Senior Vice President and Deputy General Counsel
NEWS CORPORATION
By:	/s/ Janet Nova
Name:	Janet Nova
Title:	Senior Vice President and Deputy General Counsel

CONFIRMED AND ACCEPTED, as of the date first above written:
J.P. MORGAN SECURITIES INC.
By	/s/ Robert Bottamedi
	Authorized Signatory

Exhibit A

Form of Opinion of Counsel

1. Each of the Exchange Offer Registration Statement and the Prospectus (other than the financial statements and 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 and 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), 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 and 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) 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.

A-1

EX-4.2

Exhibit 4.2

FORM OF 6.650% 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

6.650% SENIOR NOTES DUE NOVEMBER 15, 2037

CUSIP 652482 BP4

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 November 15, 2037 and to pay interest thereon from November 14, 2007 or from the most recent Interest Payment Date to which interest has been paid or duly provided for, semi-annually on May 15, and November 15 of each year, commencing May 15, 2008, at the rate of 6.65% 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 May 1 or November 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”), as set forth in Article Twelve of the Indenture and in the Guarantee endorsed hereon.

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.

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

NEWS AMERICA INCORPORATED

6.650% SENIOR NOTES DUE NOVEMBER 15, 2037

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, an Eleventh Supplemental Indenture, dated as of March 21, 2005 and a Twelfth Supplemental Indenture, dated as of May 23, 2007 (as so supplemented, the “Indenture”), among NAI, News Corporation, a Delaware corporation (“News Corporation” or the “Guarantor”), 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 Guarantor, 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 Guarantor. 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)

-1-

100% of the principal amount of the Notes to be redeemed and (2) the sum of the present values 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 J.P. Morgan Securities 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.

-2-

3. 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.

4. 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.

5. Persons Deemed Owners

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

6. 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 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.

7. 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.

-3-

8. 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 Guarantor 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.

9. 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.

10. 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.

11. 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).

-4-

12. 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 CONTRACTS 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.

-6-

GUARANTEE

News Corporation (the “Guarantor”) has 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 the Guarantor to the Holders of the Securities and to the Trustee pursuant to the Guarantee 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 Guarantee therein made.

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

The Guarantee 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.

-7-

GUARANTOR
News Corporation
By:
	Authorized Signatory for the Guarantor

-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.

FORM OF 6.650% 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

6.650% SENIOR NOTES DUE NOVEMBER 15, 2037

CUSIP U65249 AP6

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 November 15, 2037 and to pay interest thereon from November 14, 2007 or from the most recent Interest Payment Date to which interest has been paid or duly provided for, semi-annually on May 15, and November 15 of each year, commencing May 15, 2008, at the rate of 6.65% 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 May 1 or November 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”), as set forth in Article Twelve of the Indenture and in the Guarantee endorsed hereon.

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.

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

NEWS AMERICA INCORPORATED

6.650% SENIOR NOTES DUE NOVEMBER 15, 2037

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, an Eleventh Supplemental Indenture, dated as of March 21, 2005 and a Twelfth Supplemental Indenture, dated as of May 23, 2007 (as so supplemented, the “Indenture”), among NAI, News Corporation, a Delaware corporation (“News Corporation” or the “Guarantor”), 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 Guarantor, 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 Guarantor. 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)

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100% of the principal amount of the Notes to be redeemed and (2) the sum of the present values 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 J.P. Morgan Securities 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. 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.

4. 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.

5. Persons Deemed Owners

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

6. 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 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.

7. 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.

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8. 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 Guarantor 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.

9. 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.

10. 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.

11. 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).

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12. 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 CONTRACTS 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

News Corporation (the “Guarantor”) has 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 the Guarantor to the Holders of the Securities and to the Trustee pursuant to the Guarantee 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 Guarantee therein made.

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

The Guarantee 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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GUARANTOR
News Corporation
By:
	Authorized Signatory for the Guarantor

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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.

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,
	2007			2006
Earnings:
Income before income tax expense and minority interest in subsidiaries	$	2,568		$	2,668
Add:
Equity earnings from affiliates		(196	)		(492	)
Dividends received from affiliates		158			121
Fixed Charges (excluding capitalized interest)		546			495
Amortization of capitalized interest		17			18
Total earnings available for fixed charges	$	3,093		$	2,810
Fixed charges:
Interest on debt and finance lease charges	$	458		$	412
Capitalized interest		18			9
Interest element on rental expense		88			83
Total fixed charges	$	564		$	504
Ratio of earnings to fixed charges		5.5			5.6

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 2008 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 6, 2008	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 2008 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 6, 2008

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, 2007, 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 6, 2008

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