News Corporation Reports Third Quarter Operating Income of $1.0 Billion; Growth of 14% over Third Quarter a Year Ago

QUARTER HIGHLIGHTS

-- SKY Italia generates operating income of $69 million, an improvement of $90 million compared to the third quarter a year ago, as the subscriber base expands to more than 3.7 million subscribers.

-- Cable Network Programming operating income up 23% on increased affiliate revenue at the Regional Sports Networks and advertising strength at Fox News Channel.

-- Primetime ratings strength at the FOX Network and advertising growth at STAR drive Television operating income up 29%.

-- Filmed Entertainment delivers solid operating income contribution of $225 million. Decrease versus a year ago reflects record prior year results on strength of home entertainment sales of film and television titles.

-- Total print business operating income declines 9% as double-digit growth at Magazines and Inserts was more than offset primarily by the absence of TSL Education business earnings in the Newspaper segment following its sale in October 2005.

News Corporation (NYSE: NWS, NWSA; ASX: NWS, NWSLV) today reportedthird quarter operating income of $1.0 billion, an increase of 14%over the $889 million a year ago on revenues of $6.2 billion, up $155million from the $6.0 billion reported in the third quarter of fiscal2005. The year-on-year operating income growth was primarily driven bydouble-digit percentage increases at the Television, Cable NetworkProgramming and Magazines and Inserts segments, as well as by a $90million improvement at SKY Italia.

Third quarter net income of $820 million ($0.26 per share on adiluted combined basis(1)) more than doubled from the $400 million($0.13 per share on a diluted combined basis(1)) reported in the thirdquarter a year ago. These results primarily reflect the increasedconsolidated operating income, higher equity earnings of affiliatesand increased Other income, reflecting a gain on the sale of Innovapartially offset by the unrealized charge for the fair value ofcertain outstanding exchangeable debt securities.
(1) See supplemental financial data on page 13 for detail on earnings
per share

Commenting on the results, Chairman and Chief Executive OfficerRupert Murdoch said:

"We are obviously pleased with the 14% operating income growth andtwo-fold increase in net income we delivered this quarter. Our growthwas as diverse as it was deep: continued subscriber expansion at SKYItalia; ratings success at our broadcast network; sustained momentumacross our array of cable channels; and a dramatic increase in equityearnings from DIRECTV.

"This quarter also saw accelerated progress in our new mediaevolution. MySpace expanded to over 70 million registered users,solidifying its prominence as one of the fastest growing sites on theInternet. We also launched Mobizzo, a comprehensive new destinationfor mobile content, putting us in the vanguard of this exploding newplatform. And we reached agreement with our broadcast affiliates onrepurposing network content, thus allowing us to aggressively developnew ways of distributing and monetizing our programming across thefull range of new media platforms.

"At the same time, as we invest in these new opportunities, ourstrong balance sheet has enabled us to continue aggressively with ourstock repurchase program. We have completed close to $2.5 billion ofthe original $3.0 billion buyback program we initiated last June, andtoday we announced that the Board of Directors has approved anincrease in the stock buyback program to $6.0 billion. This $3.0billion step up clearly reinforces our view that repurchases of NewsCorporation shares are among the best uses of our cash in today'senvironment."
Consolidated Operating Income 3 Months Ended 9 Months Ended
March 31, March 31,
2006 2005 2006 2005
------- ------- ------- -------
US Millions

Filmed Entertainment $ 225 $ 251 $ 892 $ 949
Television 286 221 629 608
Cable Network Programming 211 172 670 565
Direct Broadcast Satellite Television 69 (21) (45) (247)
Magazines and Inserts 90 79 242 216
Newspapers 153 186 347 488
Book Publishing 26 30 173 152
Other (49) (29) (68) (122)
------- ------- ------- -------
Total Consolidated Operating Income $1,011 $ 889 $2,840 $2,609
------- ------- ------- -------

REVIEW OF OPERATING RESULTS

FILMED ENTERTAINMENT

The Filmed Entertainment segment reported third quarter operatingincome of $225 million versus the $251 million reported in the sameperiod a year ago. The year on year decline is primarily due tocomparisons with record results a year ago led by the homeentertainment performances of Alien vs. Predator, Napoleon Dynamiteand I, Robot. The current-year results primarily reflect severalsuccessful film and television home entertainment releases, as well asincreased contributions from the worldwide theatrical and pay-TVmarkets.

Third quarter film results were largely driven by the domestichome entertainment performances of Walk the Line and Transporter 2 andby the continued success of Fantastic Four in the international homeentertainment market. Additionally, the pay-TV availability of Hideand Seek and Because of Winn Dixie contributed to the strong quarterlyresults. The current quarter also included release costs for severalsuccessful theatrical releases including Big Momma's House 2, TheHills Have Eyes and the phenomenal success of Ice Age 2: The Meltdown,which was released on March 31st and has grossed over $590 million inworldwide box office to date.

Twentieth Century Fox Television (TCFTV) had increasedcontributions versus the third quarter a year ago, primarilyreflecting continued momentum in home entertainment sales, mostnotably from Family Guy and 24. Several of TCFTV's new shows thisbroadcast season are delivering strong ratings including the numberone new comedy, My Name is Earl, and the top two new dramas, The Unitand Prison Break.

TELEVISION

The Television segment reported third quarter operating income of$286 million, an increase of $65 million, or 29%, versus the sameperiod a year ago, primarily reflecting higher contributions from theFOX Broadcasting Company and STAR.

At the FOX Broadcasting Company (FBC), third quarter operatingresults were solidly profitable versus a loss a year ago as ratingsmomentum and higher pricing drove primetime advertising revenuegrowth. The higher primetime advertising revenues in the current yearwere partially offset by increased programming costs for severalreturning series including American Idol and 24, which, along withHouse, fueled ratings growth of 17% among Adults 18-49 for thequarter. Additionally, the third quarter a year ago included a lossassociated with the broadcast of Super Bowl XXXIX.

Fox Television Stations' (FTS) third quarter operating incomedeclined only 4% despite the benefit a year ago from FBC's broadcastof Super Bowl XXXIX. Primetime ratings strength and the continuedsuccess of local news drove advertising revenue growth which waspartially offset by increased local sports rights and the furtherexpansion of local newscasts.

STAR's third quarter operating income increased 28% as advertisingrevenue growth, mainly from India, drove total revenues up 14%.Advertising gains were led by weekend programming initiatives at STARPlus and by the growth of STAR One and STAR Gold.

CABLE NETWORK PROGRAMMING

Cable Network Programming reported third quarter operating incomeof $211 million, an increase of $39 million over last year's result.The 23% growth primarily reflects advertising strength at the Fox NewsChannel and affiliate revenue growth at the Regional Sports Networks(RSNs).

The Fox News Channel (FNC) reported operating income growth of 24%compared to the third quarter a year ago, primarily from higheradvertising on increased pricing and volume. During the quarter,viewership at FNC was nearly double its nearest competitor inprimetime and was over 80% higher on a 24-hour basis reflecting FNCbroadcasting the top five shows in cable news.

At our other cable channels (including the RSNs, the FX Channel(FX) and SPEED Channel) operating profit increased 25% from lastyear's third quarter results. Revenue gains at the RSNs, primarilyfrom increased affiliate rates and additional DBS subscribers, werepartially offset by programming costs associated with broadcasting NHLgames. Current quarter results also included higher revenues and costsassociated with the consolidation of FSN Ohio, FSN Florida andNational Sports Partners after acquiring a controlling stake in thefourth quarter of fiscal 2005. At FX, double-digit revenue growth inthe quarter was driven by increased affiliate revenues from higherrates and additional subscribers, as well as by increased advertisingrevenues on ratings growth and higher pricing. These revenue gainswere more than offset by increased programming costs for returningseries, as well as promotional and programming spending for severalnew original series, including Black/White which had the most watchedpremiere of any original basic cable series this season. FX'sinvestment in programming has translated into significant ratingsmomentum with primetime ratings up 31% among Adults 18-49 during thethird quarter.

DIRECT BROADCAST SATELLITE TELEVISION

SKY Italia reported third quarter operating income of $69 million,an improvement of $90 million compared to a year ago on local currencyrevenue growth of 17%. This improvement primarily reflects theaddition of 472,000 net new subscribers over the past 12 months,bringing SKY Italia's subscriber base to 3.71 million at quarter-end.The related revenue growth was partially offset by increasedprogramming costs associated with the larger subscriber base, as wellas higher spending primarily due to the broadcast of additional movietitles and new entertainment channels on the basic programming tier.

MAGAZINES AND INSERTS

The Magazines and Inserts segment reported third quarter operatingincome of $90 million, an increase of 14% versus the $79 millionreported in the quarter a year ago. The growth was driven by higherrevenues due to increased demand for in-store marketing products,partially offset by lower revenue rates from the publication of freestanding inserts.

NEWSPAPERS

The Newspapers segment reported third quarter operating income of$153 million, a decrease of $33 million from last year's resultsprimarily reflecting lower contributions from the U.K. newspapergroup.

While the U.K. newspaper group reported an operating incomedecline in local currency terms in the third quarter, this wasprincipally the result of the absence of operating income from the TSLEducation business and costs associated with the launch of a consumermagazine division. Without these factors, results were in-line with ayear ago, as double-digit circulation revenue growth was offset by aslight reduction in advertising revenues. The circulation revenuegains were the result of increased cover prices across all majortitles, with particular revenue growth at The Sun, The Sunday Timesand The Times.

The Australian newspaper group reported third quarter operatingincome in-line with a year ago in local currency terms as display andclassified advertising growth was offset by higher editorial andproduction costs. Display advertising experienced gains in thenational and property sectors, while classified revenues were led bystrength in the employment market. Circulation revenues also increasedslightly during the quarter mainly from higher cover pricing at themajor weekend newspapers.

BOOK PUBLISHING

HarperCollins reported third quarter operating income of $26million, a decrease of $4 million versus the same period a year ago.The prior year included robust sales of The Purpose Driven Life andLemony Snicket's A Series of Unfortunate Events, as well as strongcontributions from Winning by Jack Welch and Suzy Welch and JoseCanseco's Juiced. The current quarter results included continuedstrong sales of Marley & Me by John Grogan and Freakonomics by StevenD. Levitt and Stephen J. Dubner, as well as the release of BadChildhood-Good Life by Dr. Laura. During the quarter, HarperCollinshad 36 books on The New York Times bestseller list, including fourbooks that reached the #1 spot.

OTHER ITEMS

In February 2006 the Company completed its previously announcedsale of its investment in Innova, a Mexican DTH platform, to DIRECTVfor $285 million. As a result of this transaction the Companyrecognized a pre-tax gain of $206 million, which is included in Other,net in the Consolidated Statement of Operations.

On June 13, 2005, the Company announced that its Board ofDirectors approved a stock repurchase program, under which the Companywas authorized to acquire up to an aggregate of $3.0 billion in theCompany's Class A and Class B common stock. Today, the Boardauthorized an increase of that $3.0 billion buyback to $6.0 billion.As of May 10, 2006, the Company has purchased nearly $2.5 billion ofstock under the program. The remaining repurchases are expected to becompleted within the next two years, but may be suspended ordiscontinued at any time.

REVIEW OF EQUITY EARNINGS OF AFFILIATES' RESULTS

Third quarter net earnings from affiliates were $264 millionversus $91 million in the same period a year ago. The $173 millionimprovement was primarily due to an increased contribution from TheDIRECTV Group on subscriber growth and increased pricing. The DIRECTVGroup's results also reflect lower expenses associated with a newset-top receiver lease program. Additionally, the improved resultsinclude recognition of a tax benefit by Innova and a favorable impactfrom foreign currency fluctuations at Sky Brasil.

The Company's share of equity earnings (losses) of affiliates isas follows:
3 Months Ended 9 Months Ended
March 31, March 31,
% Owned 2006 2005 2006 2005
------- ---------------------------------
US Millions US Millions
BSkyB 37.9% (a) $ 100 $ 107 $ 286 $ 249
The DIRECTV Group 36.8% (b) 61 (40) 89 (217)
Sky Brasil 49.7% 19 (2) 23 23
Innova 30.0% (c) 41 6 61 17
FOXTEL 25.0% 2 (3) (1) (17)
Other affiliates Various (d) 41 23 152 99
---------------------------------
Total equity earnings
of affiliates $ 264 $ 91 $ 610 $ 154
=================================


Further details on the certain affiliated entities follow.

(a) Due to BSkyB's stock repurchase program, News' ownership in BSkyB
increased to 37.9% as of March 31, 2006 from 37.6% as of December
31, 2005.

(b) Due to The DIRECTV Group's stock repurchase program, News'
ownership in The DIRECTV Group increased to 36.8% at March 31,
2006 from 33.8% at December 31, 2005.

(c) The Company sold its investment in Innova on February 16, 2006.
The Company's share of equity earnings for Innova for 2006
reflects results through the date of sale.

(d) Primarily comprising Gemstar-TV Guide International, Fox Cable
Networks affiliates, Sky Network Television Limited and Queensland
Press (through November 12, 2004).



BSkyB (in STG and IFRS)(2)
-----------------------
3 Months Ended 9 Months Ended
March 31, March 31,
2006 2005(1) 2006 2005(1)
----------- ---------- ----------- -----------
Millions Millions
(except subscribers) (except subscribers)

Revenues GBP 1,063 GBP 958 GBP 3,079 GBP 2,813
Operating profit 246 217 660 573
Net income GBP 151 GBP 140 GBP 425 GBP 385
========= ======== ========== ===========

News' reportable 37.9%
share (in US$ and US
GAAP) $ 100 $ 107 $ 286 $ 249
========= ======== ========== ===========

Ending Subscribers 11,999,000 11,565,000
DTH Subscribers 8,099,000 7,704,000


(1) Certain amounts have been restated upon adoption of International
Financial Reporting Standards on July 1, 2005.



The DIRECTV Group, Inc. (2)
-----------------------------

3 Months Ended 9 Months Ended
March 31, March 31,
2006 2005 2006 2005
------- ------- ----------- -----------
Millions Millions
(except subscribers) (except subscribers)

Revenues $3,386 $3,148 $10,215 $ 9,372
Operating profit (loss) 392 (54) 767 (2,049)
Net income (loss) $ 235 $ (41) $ 451 $(1,338)
======= ======= =========== ===========

News' reportable 36.8% share $ 61 $ (40) $ 89 $ (217)
======= ======= =========== ===========

Ending Subscribers 15,388,000 14,445,000


(2) Please refer to respective companies' earnings releases for
detailed information.

Foreign Exchange Rates

Average foreign exchange rates used in the year-to-date resultsare as follows:
9 Months Ended
March 31,
2006 2005
----------- ------------
Australian Dollar/U.S. Dollar 0.75 0.74
U.K. Pounds Sterling/U.S. Dollar 1.76 1.86
Euro/U.S. Dollar 1.20 1.27

To receive a copy of this press release through the Internet,access News Corp.'s corporate Web site located athttp://www.newscorp.com

Audio from News Corp.'s conference call with analysts on the thirdquarter results can be heard live on the Internet at 4:30 PM. EasternDaylight Time today. To listen to the call, visithttp://www.newscorp.com

Cautionary Statement Concerning Forward-Looking Statements

This document contains certain "forward-looking statements" withinthe meaning of the Private Securities Litigation Reform Act of 1995.These statements are based on management's views and assumptionsregarding future events and business performance as of the time thestatements are made. Actual results may differ materially from theseexpectations due to changes in global economic, business, competitivemarket and regulatory factors. More detailed information about theseand other factors that could affect future results is contained in ourfilings with the Securities and Exchange Commission. The"forward-looking statements" included in this document are made onlyas of the date of this document and we do not have any obligation topublicly update any "forward-looking statements" to reflect subsequentevents or circumstances, except as required by law.

CONSOLIDATED STATEMENTS OF OPERATIONS

3 Months Ended 9 Months Ended
March 31, March 31,
2006 2005 2006 2005
------- ------- -------- --------
US Millions
(except per share amounts)

Revenues $6,198 $6,043 $18,545 $17,751
Expenses:
Operating expenses 4,006 4,060 12,116 11,925
Selling, general, and
administrative 989 918 2,926 2,715
Depreciation and amortization 189 176 561 453
Other operating charge 3 - 102 49
------ ------ ------- -------
Operating income 1,011 889 2,840 2,609
Other income (expense):
Interest expense, net (141) (143) (410) (405)
Equity earnings of affiliates 264 91 610 154
Other, net 170 (62) 243 15
------ ------ ------- -------
Income from continuing operations
before income tax expense and
minority interest in subsidiaries 1,304 775 3,283 2,373
Income tax expense (471) (317) (1,145) (773)
Minority interest in
subsidiaries, net of tax (13) (58) (44) (189)
------ ------ ------- -------
Income from continuing operations 820 400 2,094 1,411
Gain on disposition of
discontinued operations, net of
tax - - 381 -
------ ------ ------- -------
Income before cumulative effect of
accounting change 820 400 2,475 1,411
Cumulative effect of accounting
change, net of tax - - (1,013) -
------ ------ ------- -------
Net income $ 820 $ 400 $ 1,462 $ 1,411
====== ====== ======= =======

Basic earnings per share:
Income from continuing operations
Class A $0.27 $0.14 $0.68 $0.51
Class B $0.23 $0.12 $0.57 $0.43
Net income
Class A $0.27 $0.14 $0.48 $0.51
Class B $0.23 $0.12 $0.40 $0.43

Diluted earnings per share:
Income from continuing operations
Class A $0.27 $0.14 $0.68 $0.50
Class B $0.22 $0.12 $0.57 $0.42
Net income
Class A $0.27 $0.14 $0.48 $0.50
Class B $0.22 $0.12 $0.40 $0.42




CONSOLIDATED BALANCE SHEETS
March 31, June 30,
2006 2005
-------- --------
Assets US Millions
Current assets:
Cash and cash equivalents $ 5,324 $ 6,470
Receivables, net 4,893 4,353
Inventories, net 1,817 1,516
Other 368 440
-------- --------
Total current assets 12,402 12,779
-------- --------


Non-current assets:
Receivables 703 673
Investments 10,393 10,268
Inventories, net 2,872 2,366
Property, plant, and equipment, net 4,505 4,346
Intangible assets 11,280 12,517
Goodwill 12,148 10,944
Other non-current assets 962 799
-------- --------
Total non-current assets 42,863 41,913
-------- --------
Total assets $55,265 $54,692
======== ========

Liabilities and Stockholders' Equity
Current liabilities:
Borrowings $ 57 $ 912
Accounts payable, accrued expenses and other current
liabilities 3,966 3,564
Participations, residuals and royalties payable 1,218 1,051
Program rights payable 878 696
Deferred revenue 526 426
-------- --------
Total current liabilities 6,645 6,649
-------- --------

Non-current liabilities:
Borrowings 11,368 10,087
Other liabilities 3,714 3,543
Deferred income taxes 4,782 4,817
Minority interest in subsidiaries 242 219
Commitments and contingencies

Stockholders' Equity:
Class A common stock, $0.01 par value 22 22
Class B common stock, $0.01 par value 10 10
Additional paid-in capital 28,179 30,044
Retained earnings (deficit) and accumulated other
comprehensive loss 303 (699)
-------- --------
Total stockholders' equity 28,514 29,377
-------- --------
Total liabilities and stockholders' equity $55,265 $54,692
======== ========

CONSOLIDATED STATEMENTS OF CASH FLOWS

9 Months Ended
March 31,
2006 2005
--------- --------
US Millions
Operating activities:
Net income $ 1,462 $ 1,411
Gain on disposition of discontinued
operations, net of tax (381) -
Cumulative effect of accounting change, net of tax 1,013 -
- ------- --------
Income from continuing operations $ 2,094 $ 1,411
Adjustments to reconcile income from continuing
operations to cash provided by operating
activities:
Depreciation and amortization 561 453
Amortization of cable distribution investments 78 86
Equity earnings of affiliates (610) (154)
Cash distributions received from investees 111 78
Other, net (243) (15)
Minority interest in subsidiaries, net of tax 44 189
Change in operating assets and liabilities, net
of acquisitions:
Receivables and other assets (692) (612)
Inventories, net (995) 20
Accounts payable and other liabilities 1,701 857
- ------- --------
Net cash provided by operating activities 2,049 2,313
- ------- --------

Investing activities:
Property, plant, and equipment, net of
acquisitions (648) (710)
Acquisitions, net of cash acquired (1,578) (141)
Investments in equity affiliates (39) (142)
Other investments (46) (30)
Proceeds from sale of investments and other non-
current assets 404 643
Proceeds from disposition of discontinued
operations 395 -
- ------- --------
Net cash used in investing activities (1,512) (380)
- ------- --------

Financing activities:
Borrowings 1,149 1,776
Repayment of borrowings (839) (2,095)
Cash on deposit - 275
Issuance of shares 110 65
Repurchase of shares (1,810) -
Dividends paid (246) (124)
- ------- --------
Net cash used in financing activities (1,636) (103)
- ------- --------

Net increase (decrease) in cash and cash
equivalents (1,099) 1,830
Cash and cash equivalents, beginning of period 6,470 4,051
Exchange movement on opening cash balance (47) 112
- ------- --------
Cash and cash equivalents, end of period $ 5,324 $ 5,993
= ======= ========


SEGMENT INFORMATION

3 Months Ended 9 Months Ended
March 31, March 31,
2006 2005 2005 2005
------- ------- -------- --------
US Millions US Millions

Revenues

Filmed Entertainment $1,388 $1,477 $ 4,414 $ 4,726
Television 1,347 1,414 3,991 3,982
Cable Network Programming 839 633 2,424 1,857
Direct Broadcast Satellite
Television 675 624 1,793 1,620
Magazines and Inserts 300 283 832 774
Newspapers 1,015 1,062 3,037 2,937
Book Publishing 275 300 1,056 1,041
Other 359 250 998 814
------- ------- -------- --------
$6,198 $6,043 $18,545 $17,751
======= ======= ======== ========


Operating Income

Filmed Entertainment $ 225 $ 251 $ 892 $ 949
Television 286 221 629 608
Cable Network Programming 211 172 670 565
Direct Broadcast Satellite
Television 69 (21) (45) (247)
Magazines and Inserts 90 79 242 216
Newspapers 153 186 347 488
Book Publishing 26 30 173 152
Other (49) (29) (68) (122)
------- ------- -------- --------
$1,011 $ 889 $ 2,840 $ 2,609
======= ======= ======== ========

NOTE 1 - SUPPLEMENTAL EARNINGS PER SHARE DATA

Earnings per share is presented on a combined basis as the Companywill not be required to present the two class method beginning inFiscal 2008. Currently under US GAAP, earnings per share is computedindividually for the Class A and Class B shares. Class A non-votingshares carry rights to a greater dividend than Class B voting sharesthrough fiscal 2007. As such, net income available to the Company'scommon stockholders is allocated between our two classes of commonstock. The allocation between classes was based upon the two-classmethod. Earnings per share by class and by total weighted averageshares outstanding (Class A and Class B combined) is as follows:

3 Months 9 Months
Ended Ended
March 31, March 31,
2006 2005 2006 2005
------ ------ ------- ------

Basic earnings per share:
Income from continuing operations
Class A $0.27 $0.14 $0.68 $0.51
Class B $0.23 $0.12 $0.57 $0.43
Total $0.26 $0.14 $0.65 $0.48
Gain on disposition of discontinued
operations, net of tax
Class A $- $- $0.12 $-
Class B $- $- $0.10 $-
Total $- $- $0.12 $-
Cumulative effect of accounting change,
net of tax
Class A $- $- ($0.33) $-
Class B $- $- ($0.28) $-
Total $- $- ($0.31) $-
Net income
Class A $0.27 $0.14 $0.48 $0.51
Class B $0.23 $0.12 $0.40 $0.43
Total $0.26 $0.14 $0.45 $0.48

Diluted earnings per share:
Income from continuing operations
Class A $0.27 $0.14 $0.68 $0.50
Class B $0.22 $0.12 $0.57 $0.42
Total $0.26 $0.13 $0.64 $0.47
Gain on disposition of discontinued
operations, net of tax
Class A $- $- $0.12 $-
Class B $- $- $0.10 $-
Total $- $- $0.12 $-
Cumulative effect of accounting change,
net of tax
Class A $- $- ($0.33) $-
Class B $- $- ($0.27) $-
Total $- $- ($0.31) $-


Net income
Class A $0.27 $0.14 $0.48 $0.50
Class B $0.22 $0.12 $0.40 $0.42
Total $0.26 $0.13 $0.45 $0.47

Weighted average shares outstanding
(diluted), in millions:
Class A 2,203 1,966 2,227 1,969
Class B 1,004 1,045 1,020 1,014
------ ------ ------- ------
Total 3,207 3,011 3,247 2,983
====== ====== ======= ======

NOTE 2 - OPERATING INCOME BEFORE DEPRECIATION AND AMORTIZATION

Operating income before depreciation and amortization, defined asoperating income plus depreciation and amortization and theamortization of cable distribution investments, eliminates thevariable effect across all business segments of non-cash depreciationand amortization. Since operating income before depreciation andamortization is a non-GAAP measure it should be considered in additionto, not as a substitute for, operating income, net income, cash flowand other measures of financial performance reported in accordancewith GAAP. Operating income before depreciation and amortization doesnot reflect cash available to fund requirements, and the itemsexcluded from operating income before depreciation and amortization,such as depreciation and amortization, are significant components inassessing the Company's financial performance. Management believesthat operating income before depreciation and amortization is anappropriate measure for evaluating the operating performance of theCompany's business segments. Operating income before depreciation andamortization, which is the information reported to and used by theCompany's chief decision maker for the purpose of making decisionsabout the allocation of resources to segments and assessing theirperformance, provides management, investors and equity analysts ameasure to analyze operating performance of each business segment andenterprise value against historical and competitors' data.

The following table reconciles operating income beforedepreciation and amortization to the presentation of operating income.
3 Months Ended 9 Months Ended
March 31, March 31,
2006 2005 2006 2005
------- ------- ------- -------
US $ Millions US $ Millions

Operating income $1,011 $ 889 $2,840 $2,609
Depreciation and amortization 189 176 561 453
Amortization of cable distribution
investments 25 28 78 86
------- ------- ------- -------
Operating income before depreciation
and amortization $1,225 $1,093 $3,479 $3,148
======= ======= ======= =======

For the Three Months Ended March 31, 2006
(US Millions)
-------------------------------------------------------
Operating
income
(loss)
Amortization before
Operating Depreciation of cable depreciation
income and distribution and
(loss) amortization investments amortization
---------- -------------- -------------- --------------
Filmed
Entertainment $ 225 $ 17 $ - $ 242
Television 286 24 - 310
Cable Network
Programming 211 13 25 249
Direct
Broadcast
Satellite
Television 69 37 - 106
Magazines and
Inserts 90 2 - 92
Newspapers 153 65 - 218
Book
Publishing 26 2 - 28
Other (49) 29 - (20)
---------- -------------- -------------- --------------
Consolidated
Total $ 1,011 $ 189 $ 25 $ 1,225
========== ============== ============== ==============




For the Three Months Ended March 31, 2005
(US Millions)
-------------------------------------------------------
Operating
income
(loss)
Amortization before
Operating Depreciation of cable depreciation
income and distribution and
(loss) amortization investments amortization
---------- -------------- -------------- --------------
Filmed
Entertainment $ 251 $ 14 $ - $ 265
Television 221 20 - 241
Cable Network
Programming 172 10 28 210
Direct
Broadcast
Satellite
Television (21) 42 - 21
Magazines and
Inserts 79 1 - 80
Newspapers 186 70 - 256
Book
Publishing 30 1 - 31
Other (29) 18 - (11)
---------- -------------- -------------- --------------
Consolidated
Total $ 889 $ 176 $ 28 $ 1,093
========== ============== ============== ==============



For the Nine Months Ended March 31, 2006
(US Millions)
-------------------------------------------------------
Operating
income
(loss)
Amortization before
Operating Depreciation of cable depreciation
income and distribution and
(loss) amortization investments amortization
---------- -------------- -------------- --------------
Filmed
Entertainment $ 892 $ 63 $ - $ 955
Television 629 66 - 695
Cable Network
Programming 670 38 78 786
Direct
Broadcast
Satellite
Television (45) 121 - 76
Magazines and
Inserts 242 5 - 247
Newspapers 347 196 - 543
Book
Publishing 173 5 - 178
Other (68) 67 - (1)
---------- -------------- -------------- --------------
Consolidated
Total $ 2,840 $ 561 $ 78 $ 3,479
========== ============== ============== ==============



For the Nine Months Ended March 31, 2005
(US Millions)
-------------------------------------------------------
Operating
income
(loss)
Amortization before
Operating Depreciation of cable depreciation
income and distribution and
(loss) amortization investments amortization
---------- -------------- -------------- --------------
Filmed
Entertainment $ 949 $ 39 $ - $ 988
Television 608 61 - 669
Cable Network
Programming 565 30 86 681
Direct
Broadcast
Satellite
Television (247) 114 - (133)
Magazines and
Inserts 216 4 - 220
Newspapers 488 151 - 639
Book
Publishing 152 4 - 156
Other (122) 50 - (72)
---------- -------------- -------------- --------------
Consolidated
Total $ 2,609 $ 453 $ 86 $ 3,148
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