New York, NY – October 16, 2012 – Good morning, ladies and gentlemen.
I am Rupert Murdoch, Chairman and Chief Executive Officer of News Corporation. It is my pleasure to welcome all of you to the 2012 Annual Meeting of Stockholders of News Corporation. Before calling the meeting to order, I would like to present some remarks about the performance of the Company.
As you know, we have never thought of ourselves as a conventional company. Our success has come from our willingness to take well-informed risks, and the tireless work of our employees to produce and distribute high-quality, exciting content all around the world.
We never try to identify trends to follow. We don’t quiver in the face of new technology. Instead, we focus on writing our own future, and by doing so we have transformed the media landscape and added value for our shareholders.
This is not to say we have not had mishaps. We have acknowledged the serious wrongdoing that occurred at some of our publications in the United Kingdom. As a result, we have had to work hard to make amends. But just as important, we seized the moment as an opportunity to strengthen our governance and our organization in key ways.
Under the guidance of our general counsel Gerson Zweifach — who now also serves as our Chief Compliance Officer — we’ve modernized our entire system of compliance from top to bottom.
We’ve organized this new global structure into five compliance groups that together cover every region where we operate and every business within it.
We’ve imposed strict, uniform policies with centralized oversight. We’ve improved employee training. We’ve also imposed more auditing and testing, so that we can fix any problem by identifying it early. And we’ve backed it all up by appointing top-notch professionals who have a track record that cannot be questioned– including a former director of enforcement for the U.S. Securities and Exchange Commission and a former U.S. federal prosecutor.
Because these problems were based in the United Kingdom, we’ve put a special emphasis on our operations there. As you might expect, this has meant especially rigorous internal reviews. And we have confirmed that the problems in the United Kingdom were not found at our other publications.
Our findings were born out by the recent, in-depth report by Ofcom, the United Kingdon’s independent media regulator. After looking at the evidence related to phone hacking, Ofcom found no basis for concluding that News Corporation acted inappropriately in any way.
This has been a difficult period in our company’s 50-year history. However, I believe the numbers will bear out that the market likes the work we are doing and has confidence in our future. Since addressing shareholders a year ago, our stock price has risen nearly 45%.
Here are some other noteworthy items for fiscal year 2012:
Our Adjusted Total Segment Operating Income increased 13% to $5.6 billion.
Our Adjusted Earnings Per Share grew 19% — to $1.41 per share.
Our company repurchased 260 million shares of Class A Common Stock. We spent $4.6 billion of the $10 billion authorized, and although our pace has recently slowed, we are fully committed to completing the balance of this buyback.
In the last year we purchased Fox Pan American Sports from our partners, sold NDS and announced agreements to purchase the remaining ownership stake of ESPN STAR Sports in India, and Consolidated Media Holdings in Australia.
We greatly expanded the digital reach of The Wall Street Journal through new local language sites in Korean, and Bahasa for Indonesia, adding to our current portfolio of localized sites in Germany, Japan and China.
Let me conclude with what you know is our biggest potential change and opportunity in the coming year: the transformation of one of the world’s most successful media companies into two separate, publicly-traded companies. One will be focused on news, publishing and education. The other will focus on media and entertainment.
We are pursuing this for a simple reason. Notwithstanding our success, our company is undervalued. With this separation, we will free up each company to better deliver on its promises to customers across the globe. As we do, it will also mean unlocking more value for our shareholders.
As we head into this future, the company you know will be replaced by two dynamic new ones with separate names and different missions. But they will be driven by the same ethos of creativity, competition and entrepreneurship that has always been at the heart of our efforts.
This split will take time, but it is my expectation that by the end of the calendar year, we will be ready to announce more details about the executive management structures and Board memberships. I am deeply excited and energized by this future, and I hope you are as well.
Before closing, I just want to take a moment to thank our retiring directors – Andrew Knight, John Thornton, as well as Arthur Siskind, who will become a director emeritus, for their many years of active engagement and fine service on our Board. I would also like to welcome our two distinguished new directors, former U.S. Secretary of Labor Elaine Chao, and the former President of Columbia, Alvaro Uribe, both of whom I know will bring great wisdom and experience to our deliberations.