Good day and welcome to the News Corp fourth quarter fiscal 2017 earnings call. Today's call is being recorded. Media is allowed to join today's conference in a listen-only basis. At this time for opening remarks and introductions, I would like to turn the conference over to Mr. Mike Florin, Senior Vice President and Head of Investor Relations. Please go ahead.

Thank you very much Kevin. Hello everyone and welcome to News Corp's fiscal fourth quarter 2017 earnings call. We issued our earnings press release about an hour ago and it is now posted on our website at newscorp.com. On the call today are Robert Thompson, Chief Executive and Susan Panuccio, Chief Financial Officer. We will open with some prepared remarks and then we will be happy to take questions from the investment community. This call may include certain forward-looking information with respect to News Corp's business and strategy. Actual results could differ materially from what is said. News Corp's Form 10-K and Form 10-Q filings identify risks and uncertainties that could cause actual results to differ and contain cautionary statements regarding forward-looking information. Additionally, this call will include certain non-GAAP financial measurements such as total segment EBITDA, adjusted segment EBITDA and adjusted EPS. The definitions and GAAP to non-GAAP reconciliations of such measures can be found in our earnings release. With that, I will pass it over to Robert Thomson, for some opening comments.

Thank you Mike. Fiscal 2017 was an important year for News Corp as we posted tangible improvement in profitability, powered by the fast-growing digital real estate services segment. And we monetized premium content while continuing our commitment to increased operating efficiencies. Since our reincarnation, we have been assertively digital and have led to global debate on the value of content, by word and by deed, at a time of profound change in our markets and in society. That strategy continues to pay off, as evidenced by our full year operating results and by the broadening debate for which News Corp has been a catalyst. We are more than the sum of our parts. Our acquisitions and digital development have changed the composition of the company but enhanced the personality and principles that have defined us since the conception of the original News Corporation. Revenues were relatively stable this year at over $8.1 billion, despite luxury print advertising headwinds and an extra week in the prior year. But importantly, total segment EBITDA improved to $885 million compared to $684 million in the prior year, which included litigation settlement charges and gains. Even absent those settlements and other items, adjusted total segment EBITDA expanded 5%. For the quarter, we took significant impairments as we recognized the challenges facing print and oriented the company towards the future. Susan will provide you with further details. In the fourth quarter, excluding the impact of the Zillow settlement, digital real estate continued to deliver on its potential, not only as a strong source of growth but also in its rapidly expanding contribution to overall adjusted EBITDA. At both REA and Move, we were pleased to see increased traffic, improved engagement and continuing revenue growth, particularly at Realtor.com, where Move is making positive contributions to segment EBITDA.…

Thank you Robert. Before I review the financial results, I wanted to highlight a few themes from this past year and the quarter. News Corp's expansion into digital real estate is poised to reshape our long-term growth. We posted very strong operating results this quarter at both REA and at Move. In this quarter, the segment accounted for 40% of total segment EBITDA even while investing in developing markets. And as a point of reference, our revenue of this segment has nearly tripled since separation and is approaching $1 billion annually. We think there is a good long term tailwind to the segment and see further revenue opportunity beyond the core property search. We are making progress transitioning news and information services to digital. We have seen increased evidence that our quality newspapers, The Wall Street Journal, The Times of London and The Australian have a clear digital path. All three now have digital paid subscribers that are approaching or are, in the case of The Wall Street Journal, beyond 50% of total subscribers and they are showing solid growth in paid volumes and improving circulation revenues. We are continuing to right size the cost base by removing legacy costs at news and information services. However, I believe there is more we can do, as I mentioned last quarter, which I will discuss shortly. With that, I would like to now discuss our financial results. For the full year fiscal 2017, total revenues were $8.1 billion, a 2% decline compared to the prior year. You will recall that the prior year had the 5third week, which positively impacted fiscal 2016 revenues by $112 million. Reported total segment EBITDA for the year was $885 million compared to $684 million in the prior year. As a reminder, the prior year included a…

[Operator Instructions]. We will take our first question from John Janedis with Jefferies. Please go ahead.

Hi. Thank you. Can you talk a little bit more about digital service in The Wall Street Journal? As you anniversary the new cycle from the election and the price increases kick in, do you expect continued growth? Or are you seeing a slowdown? I know it's early. And with the increased engagement, to what extent are you seeing incremental demand from advertisers?

John, indeed we are continuing to see strong digital growth. I think you need to understand that there are really, for the Wall Street Journal, two paths to that growth. One is getting in the initial WSJ.com subscription. And secondly, developing products that allow us to up-sell premium customers to premium products, which obviously has far more elasticity and a greater premium profile. And so that is continuing well. I think it's fair to say, on the digital advertising front that in the last half of the fiscal, we didn't see the growth that we wanted. I think we have to be candid about that. There have been some changes made in that department under the leadership of Will Lewis in recent months. And we are confident that you will see, as you suggest, an improvement in advertising, which is coordinated indeed with the improvement in digital audience.

Thanks John. Operator, we will take our next question please.

Thank you. We will go to Kane Hannan with Goldman Sachs. Please go ahead.

Good morning Robert. Good morning Susan. Just on Move performance in the quarter and heading into FY 2018, I am wondering if you could give us a sense of the level of investment in that business into 2018? And then a sense of the EBITDA contribution you made in the fourth quarter, please?

Well, Kane, clearly in the way that Susan and I described it, direct comparison is difficult. It certainly was EBITDA positive, as we indicated it would be. And we were very happy with the progress there. I think what was particularly reassuring was and it should be so for investors, at the beginning of the year, we said we would see slow growth in Q1 and Q2 and we said it would accelerate in Q3 and Q4 and that is indeed what happened. And we like the momentum that we have achieved going into this current year. As Susan mentioned, the underlying revenue growth was 23%. But look, we are not, for a second, complacent. We are pushing Ryan and the team very hard at Realtor because we believe that they have a tremendous opportunity for growth in what is still an emerging e-market.

Thank you Kane. Operator, we will take our next question.

Thank you. We will go to Entcho Raykovski with Deutsche Bank. Please go ahead.

Hi Robert. Hi Susan. My question is for Susan. Given that you have been in the role now for a number of months, just interested in your perspective on capital management within the business? And whether you feel that there are further opportunities to deploy that capital to acquire further assets.

Thanks Entcho. My view is, it's important to be balanced between reinvestment and shareholder returns but we are focused on reinvestment for the long term that will drive shareholder value. As I have already said in previous calls, we will continue to monitor all our options, so that's effectively what we will be looking at.

Thank you Entcho. Operator, we will take our next question.

Thank you. We will go next to Alan Gould with Rosenblatt Securities. Please go ahead.

Hi. Thank you. Robert, I have got a question for you regarding the comments Jeff Bezos made at the recent Newspaper conference talking about the strength of the paper business, that if you invested in it, you could grow the businesses. Is that only for the big national papers? What can we do to, in a quicker way, stop the newspaper EBITDA from its continual declines?

Well, I think I was with Jeff at that conference and I agreed with what he said, at least about newspapers. There is no doubt that there is potential for growth, really across the spectrum. Clearly with a paper like The Australian or The Wall Street Journal or The Times, given the demographic, there is already a strong digital growth. But actually for our other papers, our other mastheads as well, there is potential. But it is dependent upon broader changes in the content ecosystem, which is why we have been so insistent that the large digital platforms need to take responsibility for content. It's not just about accounting. It's also about accountability. And so we will continue to push for a subscription mechanic that makes sense for them but certainly makes sense for newspaper mastheads. And that would frankly benefit us. It will benefit other players in the industry. But we have full confidence in what I would regard as the fact that our journalism is superior which, of itself, will allow our papers to charge a premium.

Thanks Alan. Operator, we will take our next question, please.

Thank you. We go next to Tim Nollen with Macquarie. Please go ahead.

Hi. Thanks. I wonder, Robert, if you could please comment on the underlying ad market. I think you did give a mention that it seems to be improving a little bit into the second half of the calendar year here. But any comments on advertisers thinking in terms of perhaps putting a little bit more money into, let's call it, traditional media versus digital media, if it can be stated that way? Just because we have had a lot of mixed results from a lot of media companies and ad agencies in their Q2 calendar years, I am just curious what your underlying sentiment is on ad spending, please?

Yes. And I think it's fair to say that not only media companies are under pressure, ad agencies are under pressure. Because there's no doubt, many clients are unhappy with some of the digital company that they keep. And therefore, we firmly believe that premium products and premium audiences will be important, almost regardless of the medium. What we are certainly seeing across most of our properties is, Wall Street Journal aside as I mentioned earlier, an increase in digital ad growth and the potential, for example, in the U.K. with The Sun where you had an exponential increase in its digital audience and now we are improving engagement levels. It is obviously real. But that shouldn't take away from the potential of some of what is referred to as the traditional print products. For example, the WSJ magazine spring edition this autumn will have a record amount of advertising in it. So that of itself shows the importance of print as a platform. But it all depends on the quality of content, the reliability of the environment and the level of engagement.

And I think, Tim, just to add something from me as well. The Australian newspaper, given the great growth that it had seen from a subscriber perspective as well, it's actually seeing print advertising increase year-over-year, which is quite unusual in this particular environment. But I think notwithstanding that, it is still very poor visibility and it remains very difficult to predict exactly what those trends will be going forward.

Thanks Tim. Kevin, we will take our next question, please.

Thank you. Our next question will come from Brian Han with Morningstar. Please go ahead.

Thank you. Robert or Susan, what percentage of news and information division revenue is generated from News America Marketing? And also the $175 million in other divisional losses, can you please shed some light on how much of that is from operating business losses? And how much of it is from just corporate overheads?

So on the NAM numbers, we don't call out the NAM numbers separately in relation to revenue. So we haven't given those before in the past. So we are not going to give those going forward. In relation to the $175 million in other, that really has the head office costs that fit within those numbers. So that makes up the bulk of that number.

Operator, we will take our next question, please.

Thank you. We will go next to Craig Huber with Huber Research Partners. Please go ahead.

Thank you. Can you tell us please what your cost cutting plans are for U.K. papers and Australia like you gave for The Wall Street Journal? What will those two numbers be, annualized basis, at the end of fiscal 2018? And I am also curious what is Move.com's EBITDA in the quarter we just finished? Thank you.

So just in relation to the costs targets, the only number we have actually given out is a The Wall Street Journal's number, which was $100 million annualized by the end of fiscal 2018. In relation to the Australian newspapers, we haven't given out the number. We did say that they delivered AUD40 million of cost savings in last financial year. We would expect it to be at least that in the coming year, albeit we did also mention that we will be reinvesting for growth. And across the U.K. newspapers, they also have fairly aggressive costs targets in there, though we haven't quantified those numbers publicly. In relation to the types of activities that they are looking at, they are focusing predominantly on, I guess, essential type costs or non-content related costs. I mean we continue to believe that we have to invest in our content in order to drive our products going forward. So we really are looking at any other sort of back office costs or centralized costs that we can have a look at going forward.

And Craig, it's Robert here. On Move or Realtor.com, as we refer to it, there is absolutely no doubt it was EBITDA positive when you look at the appropriate comparables. It is on a very positive track. What we are particularly emphasizing at this stage, given the phase of the growth of the market, is revenue and audience growth and we are confident you will see both this year.

Thanks Craig. Kevin, we will take our next question, please.

Thank you. We will go to Raymond Tong with Evans and Partners. Please go ahead.

Good morning Robert and Susan. I am just wondering whether you can talk about the strategic priorities for Foxtel in the medium term. Is it still sort of driving the subscriber growth over short term profitability?

Raymond, Robert here. We are pleased with the launch of Foxtel Now. The programming lineup, in particular Game of Thrones, has obviously made a difference. The business itself is changing in its character and will continue to change in a way that we think is positive. There's no doubt that the lineup of rights that we have at Foxtel and Fox Sports in the realm of sports rights, whether it be Rugby League or Aussie Rules or A-League soccer, is impressive. And we understand that that is a market that is changing and that there will be quite possibly more competition for rights in the future. But that was why we took the strategic decision to buy those rights long ahead because the upheaval in the market was obvious at that time and we have full confidence in the future of both Foxtel and Fox Sports.

Thank you. Kevin, we will take our next question, please.

At this time, there are no further questions. I will turn the conference back to Mr. Mike Florin for any additional or closing comments.

Great. Thank you Kevin. Thank you all for participating today. Have a great day.