Please standby. We’re about to begin. Good day. And welcome to the News Corp.’s First Quarter Fiscal 2018 Earnings Conference 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’d like to turn the conference over to Mr. Mike Florin, Senior Vice President and Head of Investor Relations. Please go ahead, sir.

Thank you very much Janet. Hello, everyone. And welcome to News Corp.’s fiscal first quarter 2018 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 Thomson, 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. Our new fiscal year is off to a sterling start, with robust results reflecting our steadfast strategy to pursue global and digital expansion, and to create a cogently balanced revenue mix. In the first quarter, revenues and EBITDA increased across every segment of our business compared to the same quarter last year, with particularly strong growth in digital real estate, where we continue to be the world’s largest and leading company. In summary, revenues grew 5% to $2.1 billion and reported total segment EBITDA grew 92% to reach $249 million, up from $130 million in the prior year. Adjusted total segment EBITDA grew 46%. Reported earnings per share grew to $0.12 versus loss of $0.03 in the prior year. These results truly underscore the increasing strength of digital real estate and how it has positively transformed the character of News Corp., and positioned us for further growth in the future. We can also see the tangible benefits of our sustained commitment to cost reduction, while we continue to invest in the highest quality content. In August, we and Telstra in Australia announced a non-binding agreement to combine Foxtel and FOX SPORTS, with News Corp owning 65% of the new company. Pending definitive documentation and regulatory approval, we expect to close in the first half of calendar year 2018. Combining Foxtel and FOX SPORTS and providing News Corp with majority control should give us a better opportunity to take advantage of fortified scale to leverage our immensely valuable sports and entertainment rights, as well as a boosting our ability to collect commissioned customer data. We await regulatory approval and discussion over details continues with our partner, Telstra. But once completed, the combined company is expected to make a substantial contribution to our revenue and EBITDA and fundamentally transform…

Thank you, Robert. Turning to the financials, we delivered very strong operating results for the first fiscal quarter of 2018. We reported fiscal 2018 first quarter total revenues of around $2.1 billion, an increase of $93 million or 5% compared to the prior year. Of that increase, acquisitions and divestments accounted for $51 million and currency added $26 million, with the balance being operational, excluding those items adjusted revenues grew 1%. Reported total segment EBITDA was $249 million, compared to $130 million in the prior year, up 92% versus the prior year. Reported results include a benefit of $46 million from the reversal of previously accrued net liabilities related to certain employment taxes in the U.K. Excluding the net impact of acquisitions, divestments, foreign currency and the U.K. newspaper matters, adjusted total segment EBITDA this quarter grew 46%. For the quarter, earnings per share were $0.12, compared to a loss of $0.03 in the prior year and adjusted earnings per share were $0.07, compared to a loss of $0.01 in the prior year. Turning now to the individual operating segments, in News and Information Services, revenues for the quarter were $1.2 billion, up 2% compared to the prior year. The Wireless Group and the Australian Regional Media or ARM acquisitions contributed $54 million and FX contributed $14 million this quarter. Within segment revenues, advertising was flat and circulation and subscription revenues increased 3%. News and Information Services reported segment EBITDA this quarter was $73 million or up 59% versus the prior year, led by an improvement at Dow Jones, ongoing cost initiatives, lower investment spending at Checkout 51 and the absence of transaction costs related to the acquisition of Wireless Group in the prior year. I will now look at the performance for the quarter across our key operation divisions.…

Thank you. [Operator Instructions] We’ll take your first question from Entcho Raykovski from Deutsche Bank.

Hi, Robert. Hello, Susan. My question is around the digital subs within News and Info Services, and I mean, you’re obviously seeing some very strong growth rates year-on-year, but there has been some slight slowdown in net digital ads for the quarter. Is there any seasonality not those numbers that’s impacting those ads and if we look, say, a couple of years out, given you are still seeing strong year-on-year growth rates, where do you expect the digital subs to be for The Journal in Australia in particular?

Well, Entcho, generally, we’re very confident about digital subs, and clearly, the changes that Google have made to First Click Free, are the abolition of it will itself create an environment, an ecosystem, which is itself more conducive to subscription, because the fact was that Google was punishing, banishing premium content by not indexing it and so the early signs are positive, but they are, of course, early. But what you’ll see over the next couple of months is that sites like The Wall Street Journal in Australia and The Times, and our other subscription offerings are properly indexed by Google, that the content is properly surfaced and the propensity for people to subscribe should increase.

Operator, we will take our next question, please.

We’ll move next to Craig Huber from Huber Research Partners.

Yes. Hi. I was curious to hear, you’ve done very strong performance at Realtor.com since you bought it a few years ago. Could you just tell us what you’ve -- generally what you have done there to improve the operations there dramatically, frankly, versus the prior ownership?

Thank you for that question, Craig. What we envisaged when we took over Move as it’s known, but Realtor.com as we prefer to refer to it, is that we would be able to use our media platforms to complement the Realtor platform to drive traffic, to increase engagement by improving news and analysis, and frankly, those things have happened. We’re really copying the model that Lachlan Murdoch often envisaged with the initial investment in REA back many years ago. And look, we’re not complaining for a second, because while it’s obviously strong growth there and you remember this time last year it was single-digit growth in revenue. It’s now well into double digits. We are constantly reflecting on what we can do better, how we can serve realtors more efficiently, but also how we can drive revenue and EBITDA and growth for the benefit of all our shareholders.

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

[Operator Instructions] We’ll move next to Brian Han from Morningstar.

Oh! Hi. On the Foxtel, FOX SPORTS merger, have you done any work on areas where you can expect synergies and will M&A be a focus of the combined entity?

Well, as you know, the discussions are continuing with Telstra and we hoped that -- and we subject to regulatory approval, we hope that there will be agreement in the second half of the financial year. But the three reasons for doing this deal, scale, which is increasingly important in a competitive media environment, the resident brands that the combined Foxtel and FOX SPORTS will have, and the great collection of sports and entertainment content that’s inherent in the consolidation of the company. That clearly there are going to be synergies, but not just synergies, there will be an ability for us to take advantage of changes in the digital marketplace. We’re going to be digitally deft, not digitally daft, and for example, it’s not OTT to expect OTT growth in Australia and we’ll be able to prepare for that. Susan?

Yes. Thanks, Robert. I think, Brian, one of the benefits of doing this combination will be the flexibility we have to launch new products, particularly when we move into consolidate its position where we can control it, particularly in the sports area. And of course, part of the exercise that we’re looking at the moment is where we do exact synergies between the two companies, so that’s going to be an important path going forward as well.

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

That will come from Raymond Tong from Evans and Partners.

Hi, Robert and Susan. Just a question for you, maybe Robert, just wondering whether you could provide an update on your discussions on putting The Wall Street Journal content on the Facebook platform and you made some comments a couple months ago, but can you maybe sort of just give us sense of where you are at with this, please?

Raymond, it’s not opportune to reveal the details of those negotiations at the moment other than to say that they are ongoing at a very senior level. But it is reflective of a fundamental change in the approach to content, the content landscape, which clearly was not beneficial to producers of great journalism as we do across the world with our mastheads and has become more conducive to us being able to extract a reasonable price and increase elasticity for those mastheads. So all I can say is that it’s still early days, but it’s also fair to say that there has been a fundamental change in the attitude to content by both Google and Facebook and we are still at an early phase of that evolution of the relationship between us and those companies.

Thank you, Raymond. Operator, we will take our next, please.

We’ll take a follow-up from Brian Han from Morningstar.

Hello. Thanks for that. Susan, as you continued on your digitization journey, where do you think your D&A charge will sale at?

That’s a very good question. I mean, I don’t think we expect actually to increase massively at the moment. We are looking to keep it relatively consistently going forward, as you can see our CapEx spend is going to be relatively in line for the full year, so we’re not expecting to see significant changes in that line.

Thanks.

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

And at this time, we have no additional callers in the queue.

Great. Well, thank you all very much for participating. Have a great day.