Good day, and welcome to the News Corp, 4Q Fiscal 2021 Conference Call. Today's conference is being recorded. [Operator Instructions] At this time, I would like to turn the conference over to Mike Florin, Senior Vice President and Head of Investor Relations. Please go ahead.

Thank you very much, Valerie. Hello, everyone, and welcome to News Corp's fiscal fourth quarter 2021 earnings call. We issued our earnings press release about 30 minutes 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 past year has been a severe test for families, for countries and for companies. The stresses and strains of a pandemic have stretched the social fabric and the commercial canvas. I want, fore-mostly, to express my gratitude to the employees of News Corporation, who around the world, have navigated these testing times with professionalism and with principal. Their efforts, their creativity, and their commitment have built on the company's proud foundations and been a catalyst for these impressive results for News Corp and for our group companies. Overall, revenues in fiscal '21 rose 4% and by 30% in the fourth quarter, that is 30%, indicating that the company is surely gaining in momentum, while profitability improved by 26% for the year. We have continued to focus our investment on growth areas, with the acquisition of Investor's Business Daily, Mortgage Choice in Australia and the Books & Media division of. We have also continued to simplify the business with the rationalization of REA's Asian property business and the amicable settlement of residual litigation regarding News America Marketing, which we successfully sold just ahead of fiscal '21. Our strong cash generation has given us increased optionality. Our cash balance exceeded $2.2 billion at the end of June. And so we were able to take advantage of the required sale of Opus which we expect to strengthen and ultimately transform the Dow Jones' Professional Information business. And our clearly robust cash position has prompted the company to actively review our capital returns policy with a greater focus on buybacks. A few highlights before delving deeper into the businesses. For fiscal 2021, we had a record number of digital subscriptions at our key mastheads. Record traffic at realtor.com, where audience growth, according to comScore, is significantly outpacing that of its…

Thank you, Robert. Fiscal 2021 fourth quarter total revenues were almost $2.5 billion, up 30%, the highest level since the second quarter of fiscal 2019 when we still owned News America Marketing. Total segment EBITDA was $210 million, up 8% versus the prior year, including record high segment EBITDA at Digital Real Estate Services. Total segment EBITDA included several non-recurring items that depressed year-over-year comparisons this quarter, including $49 million of non-recurring legal settlement and transaction costs. The results also include $11 million of one-off costs at Foxtel, which I'll come back to. Excluding the divestment of News America Marketing, acquisitions, currency fluctuations and the other items disclosed in our release, adjusted revenues increased 20% and adjusted total segment EBITDA increased 26%, driven by a strong performance of Digital Real Estate Services and a big year-over-year improvement in News Media. For the quarter, we reported a net loss per share of $0.02 compared to a loss of $0.67 in the prior year. Last year's loss included $292 million of non-cash impairment charges, primarily related to fixed assets in the UK and Australia. Fiscal 2021 results included a $64 million tax benefit due to an adjustment to valuation allowance in the U.S. and a $54 million non-cash write-down of Foxtel's investment related to the Nickelodeon Australian joint venture, which is now covered through a separate affiliate agreement. Adjusted earnings per share were $0.16 in the quarter compared to a loss per share of $0.03 in the prior year. Importantly, on a full year basis, free cash flow available to News Corp improved to $731 million from $180 million in the prior year, driven by higher total segment EBITDA, improvements in working capital and lower capital spending. Moving on to the results for the individual reporting segments, starting with Digital Real Estate…

Thank you. [Operator Instructions] And we will take our first question from the line of Kane Hannan of Goldman Sachs. Please go ahead.

Good morning, guys. Just two quick ones for me quickly. Just firstly on that comment around the buybacks. Could you just give us a little bit more detail around potential outcomes there? What sort of quantum and timing you should be thinking about? And then on Move, just obviously very strong revenue growth this year. Can you just talk about sort of how we think about the sustainability of that growth into FY '22 and some of those pricing tailwinds that you mentioned?

Sure. On buybacks, obviously, we're indicating that there's a more vigorous, livier [ph] discussion about capital allocation. For a start, we have more capital to allocate, given the strong cash generation in the company over the past year and for the foreseeable future. The acquisition of Opus does not change that thinking, which is at an advanced stage. So I'll reiterate what we said earlier, we are actively reviewing our capital returns policy with a greater focus on buybacks. As for REALTOR, REALTOR really is at a very early stage of its exponential evolution. The growth over the past year has come despite a relative paucity of listings. And the encouraging sign is the level of listings is on the rise again, and the immutable laws of supply and demand, as always, is beginning to take effect. And it is worth reiterating that we've grown faster than Zillow and Trulia, as measured independently for 17 successive months, and in the past 8 months, that growth has exceeded 20 percentage points. And that is a profound transformation and surely indicates that the fundamentals are favorable.

And Kane, just in relation to Move as well as we sort of think about the coming year, notwithstanding, obviously, market conditions, we do expect to see yield optimization on the core lead-gen product moving into 2022, and we still see opportunities to improve sell-through within that product. In relation to the referral business, we expect to continue to benefit from record home prices, yield optimization, and we'll continue to focus on improving the close rates. Overall, agent demand remains very robust and existing home sales remain notably higher than pre-COVID levels. So we feel very confident.

Thank you, Kane. Valerie, will take our next question, please.

Thank you. [Operator Instructions] We'll move to our next question from the line of Entcho Raykovski of Credit Suisse. Please go ahead.

Hi, Robert, Susan, so if I can ask one on books and just a very quick one on Opus. So books in the quarter, you had very strong revenue growth, but adjusted EBITDA was flat. And obviously, you've talked about the mix of titles. But just wanted to understand, are there any one-off cost factors driving this? And should we expect perhaps a reversal in future quarters? If you could provide us more detail that would be useful. And then with the Opus acquisition announced earlier this week, do you see any potential synergies from that transaction? And if you do, can you talk to what areas that perhaps come from? Thank you.

Entcho, I might start in relation to HarperCollins. So look, there's not anything really that's material in one-off. We have had some integration costs for HMH, but they're not material in the context of the overall results. It really rolls down to just the mix of slightly lower digital sales. The backlist mix was a little bit different, 2% difference quarter-on-quarter, year-on-year. But the consumption trends do remain favorable. So we are expecting to see the momentum continue.

On Opus, Entcho, Opus was opportunistic. It was a required sale, and we were able to act swiftly and decisively. And we do have a significant amount of expertise in that sector, thanks to Dow Jones and a very clear sense of how we can develop the Opus business, which is already high-margin, cash-generative and decidedly digital. I mean it's grown every year since 2007 despite the ebb and flow of energy cycles. And so there's no doubt that Opus will be an important source of ongoing revenue and profit and cash flow for Dow Jones and News Corp. And we're talking energy, commodities, renewables and carbon-related products, which will have a long runway deep into the future.

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

Thank you. We'll move on to our next question from the line of Darren Leung of Macquarie. Please go ahead.

Hi, guys. Thanks for the time. Just a very quick question, obviously considering a buyback. Can you give us a feel for, I suppose, the other side of capital management, like, obviously, with the Opus acquisition, how we should think about debt levels on a sustainable basis going forward, please?

Look, Darren, I don't think we can give you any more detail than that which we have revealed today. But as I just made clear, the Opus acquisition itself has not affected our thinking on capital allocation, and we are in the fortuitous position of having more capital to allocate.

And Darren, just to add to that, I mean, as I mentioned, we've got a healthy cash balance of about $2.2 billion at the end of the year. The Opus transaction will be an all-cash transaction, but we still will be retaining a healthy cash balance. And having generated meaningful free cash flow this year, we are continuing to focus on free cash flow generation as we move forward. So at this stage, we're fairly comfortable with what our balance sheet looks like. A - Mike Florin Thank you, Darren. Valerie, we'll take our next question please?

Thank you. We will now take our next question from the line of Brian Han of Morningstar. Please go ahead.

Robert, you mentioned several times the optionality that's opening up for Foxtel. Can you please elaborate on what that means? And when you will make a decision on which option you're going to take? And Susan, you mentioned the decline in capital intensity for Foxtel. Can you shed some light on how CapEx will change for Foxtel in '22 compared to '21? Thanks.

Well, Brian, it's very clear that what we have with Foxtel are options, and that's a tribute to the team in Australia, who patently transformed the business and its fortunes. We've got the key sports rights long into the future. We have an absolutely contemporary customer-friendly streaming platform network and those systems are another means of monetizing existing rights at no extra cost. We have a broadcast experience that is world-class and is now the village square for video in Australia. And we surely have price elasticity in a market where an ever larger number of people in Australia understand that you pay a premium for premium content. And these are all special circumstances and their confluence combined with sage leadership from Patrick and Siobhan has transformed Foxtel fortunes and certainly given us choices.

And then just a follow on in relation to the CapEx question. So the increasing investment next year is in relation to the iQ5 box, as I mentioned, which really is to focus on IP for that business going forward, which will drive efficiencies going forward. So whilst CapEx will be slightly elevated relative to this financial year, it will then start to come down. And even the forecast for financial year '22 is materially below the financial year '20 numbers. A - Mike Florin Thank you. Valerie we'll take our next question please.

Thank you. And we have a follow-up question from Kane Hannan of Goldman Sachs. Please go ahead.

Hi, guys. I know you're not talking to specifics around the Google, Facebook 9-figure earnings number. But just was there any of that benefit in this fourth quarter? And then just any comments, I suppose you can make around the Dow Jones versus the News Media split of that number?

Kane, the numbers for Q4 are actually pretty immaterial. So we're expecting to see the full benefit of those deals come through into financial year '22. We haven't actually given any guidance on the allocation. It's fair to say the bulk of that allocation is obviously going to go across the Dow Jones segment and the News Media segment. And we'll obviously be updating on that as we work through the year.

Thank you, Kane. Valerie, we’ll take our next question, please?

[Operator Instructions] It appears that there are no further questions at this time. I'd like to turn the conference back to Mr. Florin for any additional or closing remarks.

Well, thank you, Valerie, and thank you for all participating today. Have a great day. And as always, we look forward to speaking with you all again in the very near future. Take care. This concludes today's call. Thank you for your participation. You may now disconnect.