Good day and welcome to News Corp 2Q FY 2018 Earnings Conference Call. Today's call is being recorded. Media is invited on a listen-only basis. At this time, I'd like to turn the conference over to Mike Florin, Senior Vice President and Head of Investor Relations. Please go ahead sir.

Thank you very much, Justin. Hello everyone and welcome to News Corp's fiscal second quarter 2018 earnings call. We issued our earnings press release about an hour ago and it's now posted on our website at newscorp.com. On the call today are Robert Thomson, Chief Executive; and Susan Panuccio, Chief Financial Officer. We'll open with some prepared remarks and then we'll 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. The robust results for the first half of this fiscal year highlight the virtue of our strategy to become increasingly digital and global, the discipline of our financial management, and our commitment to premium content and to high quality, high integrity news. Second quarter revenues grew 3% to $2.2 billion and reported total segment EBITDA was up 1% to $329 million. First half revenues were up 4% and reported segment EBITDA rose 27%. Clearly, there are profound changes taking place in the creation and the distribution of digital content. The big tech disruptors are in the midst of a particularly disruptive period commercially, socially, and politically. We appreciate that Google has ended the prejudicial First Click Free and that Facebook is prioritizing provenance, but these are modest steps towards changing a digital environment that is dysfunctional and sometimes dystopian. With the support of Rupert and Lachlan Murdoch and the clear backing of the News Corp Board, our company has long been the strongest international advocate of necessary changes to this mephitic landscape. It is certainly in the interests of our shareholders that there be a digital reorientation towards quality and integrity and that more people are encouraged to pay for professional journalism. There is a social and commercial value to journalism, but that value needs to be valued by the digital publishing platforms. The bot-infested badlands are hardly a safe space for advertisers, whose brands are being tarnished by association with the extreme, the violent, and the repulsive. Now, let's get into the details of this quarter's results. I'll start with Digital Real Estate Services, which once again reported a strong quarter with 21% revenue growth and 25% EBITDA growth, solidifying its role as a significant engine of expansion at News Corp. At Move, home of Realtor.com,…

Thank you, Robert. Turning to the financials, we delivered another quarter of strong operating results. Fiscal 2018 second quarter total revenues were around $2.2 billion, an increase of $64 million or 3% compared to the prior year, led by our Digital Real Estate Services segment. Reported total segment EBITDA was $329 million, up from $325 million in the prior year. For the quarter, earnings per share were a loss of $0.14 compared to a loss of $0.50 in the prior year. This quarter's results include a charge related to the remission of deferred tax asset due to the lowering of the U.S. corporate tax rate. I'll discuss in a few moments the expected impact from the U.S. tax reform going forward. You may recall the prior year period included a pretax non-cash impairment charge of $310 million related to The Australian publishing division fixed assets and a $227 million pretax non-cash write-down related to the adjustment of the carrying value of the company's investment in Foxtel. Adjusted earnings per share, which excludes both items and the other items shown in the press release reconciliation table, were $0.24 compared to $0.19 in the prior year. Turning now to the individual operating segments. In News and Information Services, revenues for the quarter were $1.3 billion, relatively flat with the prior year. The acquisition of Australian Regional Media or ARM and foreign exchange contributed $30 million and $33 million, respectively, this quarter. Within segment revenues, advertising was down 6% and circulation and subscription revenues increased 6%. Within our core news businesses, Dow Jones revenues rose 1%, News U.K. grew by 7%, and News Australia grew by 4%. These increases were offset by a 16% decline at News America Marketing as we flagged during the last earnings call. More revenue details will be provided…

Thank you. [Operator Instructions] Our first question today comes from Entcho Raykovski with Deutsche Bank.

Hi Robert, hi Susan. My question is around Foxtel and Fox Sports. And I just wanted to get your perspective on the combined entities appetite to bid for cricket rights in Australia, given they're coming up for tender very shortly. And is there any change in strategy for the entity under Patrick Delaney as CEO which, Robert, you've obviously spoken about?

Entcho thanks. For those of you who are not familiar with sport in Australia, cricket is, for many people, an interesting game. It's complicated. It has various forms, the five-day tests, one-days, Big Bash, 20-over games. And clearly, it's a part of the Australian summer and Australian viewing in the summer that we're interested in, but it will be fascinating over coming weeks to track the negotiations for cricket rights, but it's pretty fair to say that we aren't going to pay ridiculous prices for any rights anywhere in the world. But what we do have for any sport is the best possible platform for engagement, both through broadcast and digital. And also, we have, as you just mentioned, Patrick Delaney, who has a background in Foxtel, did a marvelous job at Fox Sports and is now overseeing Foxtel, and he'll be very much involved in guiding us on what's the appropriate course of action with cricket. And, no doubt, focusing in particular on the upcoming selling season for the winter sports, which is the most crucial sales period for us and Foxtel and, frankly, Fox Sports in the year because we have, in the autumn, the launch of the IFL season Aussie Rules and NRL, which is Rugby League, the two most watched sports in Australia.

Thank you, Entcho. Justin we'll take our next question please.

Thank you. That question will come from Craig Huber with Huber Research Partners.

Yes, hi. Thanks for taking the question. Just what's the updated thoughts of you whether -- you have upwards of $2 billion of cash on your balance sheet. Just investors are always wondering what the plan is for that, please. Thanks.

Hi Craig, Susan here. I think it's a good question and we've talked about this before. We continue to remain focused on investment with that cash and we would continue to look at opportunities that may arise. But we do remain flexible to having a look at any option that retains value for our shareholders.

Thank you.

And thank you, Craig. Justin we'll take our next question please.

Certainly. That question will come from Brian Han with Morningstar.

Thank you. In the News and Information segment, how much in cost reduction was banked in the second quarter results? And also how thick do you think the [Indiscernible] is there before it starts to impact on your product quality?

So, I think the actual -- when you look at the numbers, it looks like the costs are relatively flat, but if you exclude M&A and currency, the costs are actually down 5% quarter-on-quarter, year-on-year. So, I think we remain very pleased with the cost reduction work that those businesses are doing, particularly in Australia and across the U.K. As far as focusing on whether it impacts on our product, we continue to look at back office, overheads, corporate functions. We look at platform consolidation, production and manufacturing, which we constantly can continue to find cost savings with as the businesses rationalize. So, I think we remain very comfortable that we're getting the balance right between cost reduction and reinvestment in our digital properties and, in fact, our print properties going forward.

Thank you, Brian. Justin we'll take our next question please.

[Operator Instructions] Our next question will come from Eric Katz with Wells Fargo.

Thank you. You guys are seeing some nice growth in circulation and subscription revenue. But how should we think about the impact on advertising as more people migrate to digital? I assume that there's a different sort of economics around digital advertising versus print. So, any color would be helpful there. Thank you.

Well, we're still in the midst of obviously a transition from print. Print, which remains a strong platform, and we're seeing that with a new real estate magazine that we're launching in coming months, which is oversubscribed by advertisers. So, don't discount print. But the digital market itself really is in the midst of our people where you have both advertisers and ad agencies reviewing their role in the market. A great deal of concern about the sort of environments in which famous prestigious advertisers find themselves. And I think what we are gradually going to see, and I think we have little doubt about this, is that there will be a migration to premium and that's where we have a comparative advantage because titles around the world are the leading titles in their markets. And to supplement that, we are creating News IQ, which is our own in-house based advertising platform, taking advantage of the great inventory we have and the authenticated audiences we have and being able to offer advertisers an opportunity to project their image and their wares in a space that won't be detrimental to their image, but brand enhancing.

Thank you, Eric. Justin, we'll take our next question.

That does conclude the question-and-answer session. And I'll now turn the conference back over to you for any additional or closing remarks.

Great. Thank you, Justin and thank you for all participating. Have a great day.