Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This document, including the following discussion and analysis, contains statements that constitute “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Section 27A of the Securities Act of 1933, as amended. All statements that are not statements of historical fact are forward-looking statements. The words “expect,” “will,” “estimate,” “anticipate,” “predict,” “believe,” “should” and similar expressions and variations thereof are intended to identify forward-looking statements. These statements appear in a number of places in this discussion and analysis and include statements regarding the intent, belief or current expectations of the Company, its directors or its officers with respect to, among other things, trends affecting the Company’s business, financial condition or results of operations, the Company’s strategy and strategic initiatives, including potential acquisitions, investments and dispositions, the Company’s cost savings initiatives, including announced headcount reductions, and the outcome of contingencies such as litigation and investigations. Readers are cautioned that any forward-looking statements are not guarantees of future performance and involve risks and uncertainties. More information regarding these risks and uncertainties and other important factors that could cause actual results to differ materially from those in the forward-looking statements is set forth under the heading “Risk Factors” in Part I, Item 1A. in News Corporation’s Annual Report on Form 10-K for the fiscal year ended June 30, 2023, as filed with the Securities and Exchange Commission (the “SEC”) on August 15, 2023 (the “2023 Form 10-K”), and as may be updated in this and other subsequent Quarterly Reports on Form 10-Q. The Company does not ordinarily make projections of its future operating results and undertakes no obligation (and expressly disclaims any obligation) to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. Readers should carefully review this document and the other documents filed by the Company with the SEC. This section should be read together with the unaudited consolidated financial statements of News Corporation and related notes set forth elsewhere herein and the audited consolidated financial statements of News Corporation and related notes set forth in the 2023 Form 10-K.

INTRODUCTION

News Corporation (together with its subsidiaries, “News Corporation,” “News Corp,” the “Company,” “we,” or “us”) is a global diversified media and information services company comprised of businesses across a range of media, including: digital real estate services, subscription video services in Australia, news and information services and book publishing.

The unaudited consolidated financial statements are referred to herein as the “Consolidated Financial Statements.” The consolidated statements of operations are referred to herein as the “Statements of Operations.” The consolidated balance sheets are referred to herein as the “Balance Sheets.” The consolidated statements of cash flows are referred to herein as the “Statements of Cash Flows.” The Consolidated Financial Statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”).

Management’s discussion and analysis of financial condition and results of operations is intended to help provide an understanding of the Company’s financial condition, changes in financial condition and results of operations. This discussion is organized as follows:

• Overview of the Company’s Businesses—This section provides a general description of the Company’s businesses, as well as developments that occurred to date during fiscal 2024 that the Company believes are important in understanding its results of operations and financial condition or to disclose known trends.

• Results of Operations—This section provides an analysis of the Company’s results of operations for the three months ended September 30, 2023 and 2022. This analysis is presented on both a consolidated basis and a segment basis. Supplemental revenue information is also included for reporting units within certain segments and is presented on a gross basis, before eliminations in consolidation. In addition, a brief description is provided of significant transactions and events that impact the comparability of the results being analyzed.

• Liquidity and Capital Resources—This section provides an analysis of the Company’s cash flows for the three months ended September 30, 2023 and 2022, as well as a discussion of the Company’s financial arrangements and outstanding commitments, both firm and contingent, that existed as of September 30, 2023.

OVERVIEW OF THE COMPANY’S BUSINESSES

The Company manages and reports its businesses in the following six segments:

• Digital Real Estate Services—The Digital Real Estate Services segment consists of the Company’s 61.4% interest in REA Group and 80% interest in Move. The remaining 20% interest in Move is held by REA Group. REA

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Group is a market-leading digital media business specializing in property and is listed on the Australian Securities Exchange (“ASX”) (ASX: REA). REA Group advertises property and property-related services on its websites and mobile apps, including Australia’s leading residential, commercial and share property websites, realestate.com.au, realcommercial.com.au and Flatmates.com.au, property.com.au and property portals in India. In addition, REA Group provides property-related data to the financial sector and financial services through a digital property search and financing experience and a mortgage broking offering.

Move is a leading provider of digital real estate services in the U.S. and primarily operates Realtor.com®, a premier real estate information, advertising and services platform. Move offers real estate advertising solutions to agents and brokers, including its ConnectionsSM Plus, Market VIPSM and AdvantageSM Pro products as well as its referral-based services, ReadyConnect ConciergeSM and UpNest. Move also offers online tools and services to do-it-yourself landlords and tenants.

• Subscription Video Services—The Company’s Subscription Video Services segment provides sports, entertainment and news services to pay-TV and streaming subscribers and other commercial licensees, primarily via satellite and internet distribution, and consists of (i) the Company’s 65% interest in the Foxtel Group (with the remaining 35% interest held by Telstra, an ASX-listed telecommunications company) and (ii) Australian News Channel (“ANC”). The Foxtel Group is the largest Australian-based subscription television provider. Its Foxtel pay-TV service provides approximately 200 live channels and video on demand covering sports, general entertainment, movies, documentaries, music, children’s programming and news. Foxtel and the Group’s Kayo Sports streaming service offer the leading sports programming content in Australia, with broadcast rights to live sporting events including: National Rugby League, Australian Football League, Cricket Australia and various motorsports programming. The Foxtel Group’s other streaming services include BINGE, its entertainment streaming service, and Foxtel Now, a streaming service that provides access across Foxtel’s live and on-demand content.

ANC operates the SKY NEWS network, Australia’s 24-hour multi-channel, multi-platform news service. ANC channels are distributed throughout Australia and New Zealand and available on Foxtel and Sky Network Television NZ. ANC also owns and operates the international Australia Channel IPTV service and offers content across a variety of digital media platforms, including web, mobile and third party providers.

• Dow Jones**—The Dow Jones segment consists of Dow Jones, a global provider of news and business information whose products target individual consumers and enterprise customers and are distributed through a variety of media channels including newspapers, newswires, websites, mobile apps, newsletters, magazines, proprietary databases, live journalism, video and podcasts. Dow Jones’s consumer products include premier brands such as The Wall Street Journal, Barron’s, MarketWatch and Investor’s Business Daily. Dow Jones’s professional information products, which target enterprise customers, include Dow Jones Risk & Compliance, a leading provider of data solutions to help customers identify and manage regulatory, corporate and reputational risk with tools focused on financial crime, sanctions, trade and other compliance requirements, Dow Jones Energy (which includes OPIS), a leading provider of pricing data, news, insights, analysis and other information for energy commodities and key base chemicals, Factiva, a leading provider of global business content, and Dow Jones Newswires, which distributes real-time business news, information and analysis to financial professionals and investors.

• Book Publishing—The Book Publishing segment consists of HarperCollins, the second largest consumer book publisher in the world, with operations in 15 countries and particular strengths in general fiction, nonfiction, children’s and religious publishing. HarperCollins owns more than 120 branded publishing imprints, including Harper, William Morrow, Mariner, HarperCollins Children’s Books, Avon, Harlequin and Christian publishers Zondervan and Thomas Nelson, and publishes works by well-known authors such as Harper Lee, George Orwell, Agatha Christie and Zora Neale Hurston, as well as global author brands including J.R.R. Tolkien, C.S. Lewis, Daniel Silva, Karin Slaughter and Dr. Martin Luther King, Jr. It is also home to many beloved children’s books and authors and a significant Christian publishing business.

• News Media**—The News Media segment consists primarily of News Corp Australia, News UK and the New York Post and includes The Australian, The Daily Telegraph, Herald Sun, The Courier Mail, The Advertiser and the news.com.au website in Australia, The Times, The Sunday Times, The Sun, The Sun on Sunday and thesun.co.uk in the U.K. and the-sun.com in the U.S. This segment also includes Wireless Group, operator of talkSPORT, the leading sports radio network in the U.K., TalkTV in the U.K. and Storyful, a social media content agency.

• Other—The Other segment consists primarily of general corporate overhead expenses, strategy costs and costs related to the U.K. Newspaper Matters (as defined in Note 9—Commitments and Contingencies to the Consolidated Financial Statements).

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Other Business Developments

Announced Headcount Reduction

In response to the macroeconomic challenges facing many of the Company’s businesses, the Company implemented a number of cost savings initiatives, including the 5% headcount reduction announced in February 2023. The Company has notified a substantial majority of the affected employees and recognized associated cash restructuring charges of approximately $96 million through September 30, 2023. Based on the actions taken to date and those expected to be completed in the near term, the Company expects to generate annualized gross cost savings of at least $160 million, the majority of which will be reflected in fiscal 2024. See Note 3—Impairment and Restructuring Charges in the accompanying Consolidated Financial Statements.

Proposed Combination of U.K. Printing Operations

In October 2023, News UK and DMG Media announced a proposed arrangement to combine certain printing operations of both companies within a separate joint venture. The Company believes this proposal would help improve the efficiency of News UK and DMG Media’s print operations and establish a sustainable business model for national newspaper printing in the U.K. The proposed arrangement is subject to regulatory approval, and each company’s print operations will remain separate until approval is granted.

RESULTS OF OPERATIONS

Results of Operations—For the three months ended September 30, 2023 versus the three months ended September 30, 2022

The following table sets forth the Company’s operating results for the three months ended September 30, 2023 as compared to the three months ended September 30, 2022.

									For the three months ended September 30,
																											2023						2022						Change						% Change
(in millions, except %)																																	Better/(Worse)
Revenues:
Circulation and subscription																											$	1,129					$	1,111					$	18					2		%
Advertising																											391						406						(15)						(4)		%
Consumer																											502						467						35						7		%
Real estate																											311						323						(12)						(4)		%
Other																											166						171						(5)						(3)		%
Total Revenues																											2,499						2,478						21						1		%
Operating expenses																											(1,273)						(1,273)						—						—		%
Selling, general and administrative																											(862)						(855)						(7)						(1)		%
Depreciation and amortization																											(171)						(179)						8						4		%
Impairment and restructuring charges																											(38)						(21)						(17)						(81)		%
Equity losses of affiliates																											(2)						(4)						2						50		%
Interest expense, net																											(23)						(27)						4						15		%
Other, net																											(35)						(18)						(17)						(94)		%
Income before income tax expense																											95						101						(6)						(6)		%
Income tax expense																											(37)						(35)						(2)						(6)		%
Net income																											58						66						(8)						(12)		%
Less: Net income attributable to noncontrolling interests																											(28)						(26)						(2)						(8)		%
Net income attributable to News Corporation stockholders																											$	30					$	40					$	(10)					(25)		%

** not meaningful

Revenues— Revenues increased $21 million, or 1%, for the three months ended September 30, 2023 as compared to the corresponding period of fiscal 2023.

The revenue increase for the three months ended September 30, 2023 was primarily driven by the increase at the Book Publishing segment due to higher physical book sales and improved returns in the U.S. resulting from the absence of the impact of Amazon’s reset of its inventory levels and rightsizing of its warehouse footprint in the prior year and at the Dow Jones

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segment due to higher professional information business revenues. These increases were partially offset by lower revenues at the Digital Real Estate Services segment primarily due to the continued impact of the macroeconomic environment on the U.S. housing market, the negative impact of foreign currency fluctuations at the Subscription Video Services segment and lower advertising revenues at the News Media segment. The impact of foreign currency fluctuations of the U.S. dollar against local currencies resulted in a revenue decrease of $14 million for the three months ended September 30, 2023 as compared to the corresponding period of fiscal 2023.

The Company calculates the impact of foreign currency fluctuations for businesses reporting in currencies other than the U.S. dollar by multiplying the results for each quarter in the current period by the difference between the average exchange rate for that quarter and the average exchange rate in effect during the corresponding quarter of the prior year and totaling the impact for all quarters in the current period.

Operating expenses— Operating expenses were flat for the three months ended September 30, 2023 as compared to the corresponding period of fiscal 2023.

Higher expenses primarily at the Dow Jones segment due to higher technology costs and at the Subscription Video Services segment driven by higher sports programming rights costs due to contractual increases, were offset by lower expenses at the Digital Real Estate Services segment due to lower employee costs at Move. The Company benefited from gross cost savings related to the announced 5% headcount reduction initiative. The impact of foreign currency fluctuations of the U.S. dollar against local currencies resulted in an Operating expense decrease of $3 million for the three months ended September 30, 2023 as compared to the corresponding period of fiscal 2023.

Selling, general and administrative— Selling, general and administrative increased $7 million, or 1%, for the three months ended September 30, 2023 as compared to the corresponding period of fiscal 2023.

The increase in selling, general and administrative for the three months ended September 30, 2023 was driven by higher employee costs at the Book Publishing and Dow Jones segments, partially offset by lower expenses at the Digital Real Estate Services segment driven by lower employee costs at Move. The Company benefited from gross cost savings related to the announced 5% headcount reduction initiative. The impact of foreign currency fluctuations of the U.S. dollar against local currencies resulted in a Selling, general and administrative decrease of $3 million for the three months ended September 30, 2023 as compared to the corresponding period of fiscal 2023.

Depreciation and amortization— Depreciation and amortization expense decreased $8 million, or 4%, for the three months ended September 30, 2023 as compared to the corresponding period of fiscal 2023. The impact of foreign currency fluctuations of the U.S. dollar against local currencies resulted in a depreciation and amortization expense decrease of $3 million, or 1%, for the three months ended September 30, 2023 as compared to the corresponding period of fiscal 2023.

Impairment and restructuring charges— During the three months ended September 30, 2023, the Company recognized non-cash impairment charges of $21 million at the News Media segment related to the write-down of fixed assets associated with the proposed combination of certain U.K. printing operations with those of a third party.

During the three months ended September 30, 2023 and 2022, the Company recorded restructuring charges of $17 million and $21 million, respectively.

See Note 3—Impairment and Restructuring Charges in the accompanying Consolidated Financial Statements.

Equity losses of affiliates— Equity losses of affiliates decreased by $2 million for the three months ended September 30, 2023 as compared to the corresponding period of fiscal 2023. See Note 4—Investments in the accompanying Consolidated Financial Statements.

Interest expense, net— Interest expense, net decreased by $4 million, or 15%, for the three months ended September 30, 2023 as compared to the corresponding period of fiscal 2023, primarily driven by higher interest income as a result of higher interest rates on cash balances. See Note 5—Borrowings and Note 7—Financial Instruments and Fair Value Measurements in the accompanying Consolidated Financial Statements.

Other, net— Other, net decreased $17 million, or 94%, for the three months ended September 30, 2023 as compared to the corresponding period of fiscal 2023. See Note 12—Additional Financial Information in the accompanying Consolidated Financial Statements.

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Income tax expense— For the three months ended September 30, 2023, the Company recorded income tax expense of $37 million on pre-tax income of $95 million, resulting in an effective tax rate that was higher than the U.S. statutory tax rate. The tax rate was impacted by foreign operations which are subject to higher tax rates and by valuation allowances recorded against tax benefits in certain businesses.

For the three months ended September 30, 2022, the Company recorded income tax expense of $35 million on pre-tax income of $101 million, resulting in an effective tax rate that was higher than the U.S. statutory tax rate. The tax rate was impacted by foreign operations which are subject to higher tax rates and by valuation allowances recorded against tax benefits in certain businesses.

Management assesses available evidence to determine whether sufficient future taxable income will be generated to permit the use of existing deferred tax assets. Based on management’s assessment of available evidence, it has been determined that it is more likely than not that certain deferred tax assets may not be realized and therefore, a valuation allowance has been established against those tax assets. See Note 10—Income Taxes in the accompanying Consolidated Financial Statements.

Net income— Net income for the three months ended September 30, 2023 was $58 million compared to net income of $66 million for the corresponding period of fiscal 2023.

Net income for the three months ended September 30, 2023 decreased by $8 million, or 12%, as compared to the corresponding period of fiscal 2023, primarily driven by higher impairment and restructuring charges and lower Other, net, partially offset by higher Total Segment EBITDA.

Net income attributable to noncontrolling interests— Net income attributable to noncontrolling interests increased $2 million, or 8%, for the three months ended September 30, 2023 as compared to the corresponding period of fiscal 2023.

Segment Analysis

Segment EBITDA is defined as revenues less operating expenses and selling, general and administrative expenses. Segment EBITDA does not include: depreciation and amortization, impairment and restructuring charges, equity losses of affiliates, interest (expense) income, net, other, net and income tax (expense) benefit. Segment EBITDA may not be comparable to similarly titled measures reported by other companies, since companies and investors may differ as to what items should be included in the calculation of Segment EBITDA.

Segment EBITDA is the primary measure used by the Company’s chief operating decision maker to evaluate the performance of, and allocate resources within, the Company’s businesses. Segment EBITDA provides management, investors and equity analysts with a measure to analyze the operating performance of each of the Company’s business segments and its enterprise value against historical data and competitors’ data, although historical results may not be indicative of future results (as operating performance is highly contingent on many factors, including customer tastes and preferences).

Total Segment EBITDA is a non-GAAP measure and should be considered in addition to, not as a substitute for, net income (loss), cash flow and other measures of financial performance reported in accordance with GAAP. In addition, this measure does not reflect cash available to fund requirements and excludes items, such as depreciation and amortization and impairment and restructuring charges, which are significant components in assessing the Company’s financial performance. The Company believes that the presentation of Total Segment EBITDA provides useful information regarding the Company’s operations and other factors that affect the Company’s reported results. Specifically, the Company believes that by excluding certain one-time or non-cash items such as impairment and restructuring charges and depreciation and amortization, as well as potential distortions between periods caused by factors such as financing and capital structures and changes in tax positions or regimes, the Company provides users of its consolidated financial statements with insight into both its core operations as well as the factors that affect reported results between periods but which the Company believes are not representative of its core business. As a result, users of the Company’s consolidated financial statements are better able to evaluate changes in the core operating results of the Company across different periods.

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The following table reconciles Net income to Total Segment EBITDA for the three months ended September 30, 2023 and 2022:

									For the three months ended September 30,
															2023						2022
(in millions)
Net income															$	58					$	66
Add:
Income tax expense															37						35
Other, net															35						18
Interest expense, net															23						27
Equity losses of affiliates															2						4
Impairment and restructuring charges															38						21
Depreciation and amortization															171						179
Total Segment EBITDA															$	364					$	350

The following table sets forth the Company’s Revenues and Segment EBITDA by reportable segment for the three months ended September 30, 2023 and 2022:

			For the three months ended September 30,
			2023												2022
(in millions)			Revenues						Segment EBITDA						Revenues						Segment EBITDA
Digital Real Estate Services			$	403					$	122					$	421					$	119
Subscription Video Services			486						93						502						111
Dow Jones			537						124						515						113
Book Publishing			525						65						487						39
News Media			548						14						553						18
Other			—						(54)						—						(50)
Total			$	2,499					$	364					$	2,478					$	350

Digital Real Estate Services (16% and 17% of the Company’s consolidated revenues in the three months ended September 30, 2023 and 2022, respectively)

									For the three months ended September 30,
																											2023						2022						Change						% Change
(in millions, except %)																																	Better/(Worse)
Revenues:
Circulation and subscription																											$	3					$	3					$	—					—		%
Advertising																											35						35						—						—		%
Real estate																											311						323						(12)						(4)		%
Other																											54						60						(6)						(10)		%
Total Revenues																											403						421						(18)						(4)		%
Operating expenses																											(49)						(57)						8						14		%
Selling, general and administrative																											(232)						(245)						13						5		%
Segment EBITDA																											$	122					$	119					$	3					3		%

For the three months ended September 30, 2023, revenues at the Digital Real Estate Services segment decreased $18 million, or 4%, as compared to the corresponding period of fiscal 2023. Revenues at Move decreased $27 million, or 16%, to $142 million for the three months ended September 30, 2023 from $169 million in the corresponding period of fiscal 2023, primarily driven by the continued impact of the macroeconomic environment on the housing market, including higher interest rates. The market downturn resulted in lower lead volumes, which decreased 11%, and lower transaction volumes. These factors adversely impacted revenues from both the referral model, which includes the ReadyConnect Concierge℠ product, and the traditional

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lead generation product. Revenues at REA Group increased $9 million, or 4%, to $261 million for the three months ended September 30, 2023 from $252 million in the corresponding period of fiscal 2023, driven by higher Australian residential revenues due to price increases, increased depth penetration and growth in national listings, partially offset by the $11 million negative impact of foreign currency fluctuations.

For the three months ended September 30, 2023, Segment EBITDA at the Digital Real Estate Services segment increased $3 million, or 3%, as compared to the corresponding period of fiscal 2023 due to an increased contribution from REA Group, which was partially offset by the adverse impact from Move. The contribution from REA Group increased due to the higher revenues discussed above, partially offset by the $5 million, or 4%, negative impact of foreign currency fluctuations. The adverse impact from Move was due to the lower revenues discussed above, partially offset by gross cost savings related to the announced 5% headcount reduction initiative.

Subscription Video Services (19% and 20% of the Company’s consolidated revenues in the three months ended September 30, 2023 and 2022, respectively)

									For the three months ended September 30,
																											2023						2022						Change						% Change
(in millions, except %)																																	Better/(Worse)
Revenues:
Circulation and subscription																											$	415					$	425					$	(10)					(2)		%
Advertising																											62						64						(2)						(3)		%
Other																											9						13						(4)						(31)		%
Total Revenues																											486						502						(16)						(3)		%
Operating expenses																											(309)						(306)						(3)						(1)		%
Selling, general and administrative																											(84)						(85)						1						1		%
Segment EBITDA																											$	93					$	111					$	(18)					(16)		%

For the three months ended September 30, 2023, revenues at the Subscription Video Services segment decreased $16 million, or 3%, as compared to the corresponding period of fiscal 2023 due to the negative impact of foreign currency fluctuations. The $22 million increase in streaming revenues, primarily due to increased volume and pricing at Kayo and BINGE, and improvements in underlying advertising trends more than offset lower residential subscription revenues resulting from fewer residential broadcast subscribers. Foxtel Group streaming subscription revenues represented approximately 30% of total circulation and subscription revenues for the three months ended September 30, 2023 as compared to 25% in the corresponding period of fiscal 2023. The impact of foreign currency fluctuations of the U.S. dollar against local currencies resulted in a revenue decrease of $21 million, or 4%, for the three months ended September 30, 2023 as compared to the corresponding period of fiscal 2023.

For the three months ended September 30, 2023, Segment EBITDA decreased $18 million, or 16%, as compared to the corresponding period of fiscal 2023, driven by higher sports programming rights costs due to contractual increases and the $4 million, or 3%, negative impact of foreign currency fluctuations, partially offset by the revenue drivers discussed above and gross cost savings related to the announced 5% headcount reduction initiative.

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The following tables provide information regarding certain key performance indicators for the Foxtel Group, the primary reporting unit within the Subscription Video Services segment, as of and for the three months ended September 30, 2023 and 2022 (see the Company’s 2023 Form 10-K for further detail regarding these performance indicators):

			As of September 30,
			2023						2022
			(in 000's)
Broadcast Subscribers
Residential(a)			1,310						1,439
Commercial(b)			233						219
Streaming Subscribers (Total (Paid))(c)
Kayo			1,411 (1,403 paid)						1,270 (1,259 paid)
BINGE			1,506 (1,449 paid)						1,451 (1,342 paid)
Foxtel Now			167 (161 paid)						197 (191 paid)
Total Subscribers (Total (Paid))(d)			4,646 (4,573 paid)						4,605 (4,465 paid)

									For the three months ended September 30,
															2023						2022
Broadcast ARPU(e)															A$85 (US$56)						A$83 (US$57)
Broadcast Subscriber Churn(f)															11.4%						14.2%

(a) Subscribing households throughout Australia as of September 30, 2023 and 2022.

(b) Commercial subscribers throughout Australia as of September 30, 2023 and 2022. Commercial subscribers are calculated as residential equivalent business units and are derived by dividing total recurring revenue from these subscribers by an estimated average Broadcast ARPU which is held constant through the year.

(c) Total and Paid subscribers for the applicable streaming service as of September 30, 2023 and 2022. Paid subscribers excludes customers receiving service for no charge under certain new subscriber promotions.

(d) Total subscribers consists of Foxtel Group’s broadcast and streaming services listed above and its news aggregation streaming service.

(e) Average monthly broadcast residential subscription revenue per user (“Broadcast ARPU”) for the three months ended September 30, 2023 and 2022.

(f) Broadcast residential subscriber churn rate (“Broadcast Subscriber Churn”) for the three months ended September 30, 2023 and 2022. Broadcast subscriber churn represents the number of residential subscribers whose service is disconnected, expressed as a percentage of the average total number of residential subscribers, presented on an annual basis.

Dow Jones (22% and 21% of the Company’s consolidated revenues in the three months ended September 30, 2023 and 2022, respectively)

									For the three months ended September 30,
																											2023						2022						Change						% Change
(in millions, except %)																																	Better/(Worse)
Revenues:
Circulation and subscription																											$	436					$	414					$	22					5		%
Advertising																											91						94						(3)						(3)		%
Other																											10						7						3						43		%
Total Revenues																											537						515						22						4		%
Operating expenses																											(235)						(230)						(5)						(2)		%
Selling, general and administrative																											(178)						(172)						(6)						(3)		%
Segment EBITDA																											$	124					$	113					$	11					10		%

For the three months ended September 30, 2023, revenues at the Dow Jones segment increased $22 million, or 4%, as compared to the corresponding period of fiscal 2023, primarily driven by higher professional information business revenues. Digital

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revenues at the Dow Jones segment represented 81% of total revenues for the three months ended September 30, 2023, as compared to 79% in the corresponding period of fiscal 2023. The impact of foreign currency fluctuations of the U.S. dollar against local currencies resulted in a revenue increase of $4 million, or 1%, for the three months ended September 30, 2023 as compared to the corresponding period of fiscal 2023.

Circulation and subscription revenues

									For the three months ended September 30,
																											2023						2022						Change						% Change
(in millions, except %)																																	Better/(Worse)
Circulation and subscription revenues:
Circulation and other																											$	232					$	235					$	(3)					(1)		%
Professional information business																											204						179						25						14		%
Total circulation and subscription revenues																											$	436					$	414					$	22					5		%

Circulation and subscription revenues increased $22 million, or 5%, during the three months ended September 30, 2023 as compared to the corresponding period of fiscal 2023. Professional information business revenues increased $25 million, or 14%, primarily driven by the $13 million increase in Risk & Compliance revenues due to growth from both financial and corporate customers and the $10 million increase in Dow Jones Energy revenues resulting from price increases, new products and customers and a modest benefit from new events and one-time items. Circulation and other revenues decreased $3 million, or 1%, driven by lower content licensing revenues and print circulation declines, partially offset by growth in digital-only subscriptions, primarily at The Wall Street Journal. Digital revenues represented 70% of circulation revenue for the three months ended September 30, 2023, as compared to 68% in the corresponding period of fiscal 2023.

The following table summarizes average daily consumer subscriptions during the three months ended September 30, 2023 and 2022 for select publications and for all consumer subscription products.(a)

			For the three months ended September 30**(b)****,**
			2023						2022						Change						% Change
(in thousands, except %)															Better/(Worse)
The Wall Street Journal
Digital-only subscriptions(c)			3,457						3,157						300						10		%
Total subscriptions			3,991						3,778						213						6		%
Barron’s Group(d)
Digital-only subscriptions(c)			1,055						862						193						22		%
Total subscriptions			1,197						1,040						157						15		%
Total Consumer(e)
Digital-only subscriptions(c)			4,611						4,099						512						12		%
Total subscriptions			5,308						4,922						386						8		%

(a)Based on internal data for the periods from July 3, 2023 through October 1, 2023 and July 4, 2022 through October 2, 2022, respectively, with independent verification procedures performed by PricewaterhouseCoopers LLP UK.

(b)Subscriptions include individual consumer subscriptions, as well as subscriptions purchased by companies, schools, businesses and associations for use by their respective employees, students, customers or members. Subscriptions exclude single-copy sales and copies purchased by hotels, airlines and other businesses for limited distribution or access to customers.

(c)For some publications, including The Wall Street Journal and Barron’s, Dow Jones sells bundled print and digital products. For bundles that provide access to both print and digital products every day of the week, only one unit is reported each day and is designated as a print subscription. For bundled products that provide access to the print product only on specified days and full digital access, one print subscription is reported for each day that a print copy is served and one digital subscription is reported for each remaining day of the week.

(d)Barron’s Group consists of Barron’s, MarketWatch, Financial News and Private Equity News.

(e)Total Consumer consists of The Wall Street Journal, Barron’s Group and Investor’s Business Daily.

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Advertising revenues

Advertising revenues decreased $3 million, or 3%, during the three months ended September 30, 2023 as compared to the corresponding period of fiscal 2023. Digital advertising represented 66% of advertising revenue for the three months ended September 30, 2023, as compared to 65% in the corresponding period of fiscal 2023.

Segment EBITDA

For the three months ended September 30, 2023, Segment EBITDA at the Dow Jones segment increased $11 million, or 10%, as compared to the corresponding period of fiscal 2023, primarily due to the increase in revenues discussed above and gross cost savings related to the announced 5% headcount reduction initiative, partially offset by higher technology and employee costs.

Book Publishing (21% and 20% of the Company’s consolidated revenues in the three months ended September 30, 2023 and 2022, respectively)

									For the three months ended September 30,
																											2023						2022						Change						% Change
(in millions, except %)																																	Better/(Worse)
Revenues:
Consumer																											$	502					$	467					$	35					7		%
Other																											23						20						3						15		%
Total Revenues																											525						487						38						8		%
Operating expenses																											(366)						(366)						—						—		%
Selling, general and administrative																											(94)						(82)						(12)						(15)		%
Segment EBITDA																											$	65					$	39					$	26					67		%

For the three months ended September 30, 2023, revenues at the Book Publishing segment increased $38 million, or 8%, as compared to the corresponding period of fiscal 2023, primarily driven by an increase in physical book sales and improved returns in the U.S. resulting from the absence of the impact of Amazon’s reset of its inventory levels and rightsizing of its warehouse footprint in the prior year. Digital sales increased by 3% as compared to the corresponding period of fiscal 2023 and represented approximately 22% of consumer revenues, as compared to 23% in the corresponding period of fiscal 2023. Backlist sales represented approximately 61% of total revenues during the three months ended September 30, 2023, as compared to 65% in the corresponding period of fiscal 2023. The impact of foreign currency fluctuations of the U.S. dollar against local currencies resulted in a revenue increase of $7 million, or 2%, for the three months ended September 30, 2023 as compared to the corresponding period of fiscal 2023.

For the three months ended September 30, 2023, Segment EBITDA at the Book Publishing segment increased $26 million, or 67%, as compared to the corresponding period of fiscal 2023, primarily due to the higher revenues discussed above and lower manufacturing, freight and distribution costs driven by product mix and easing supply chain challenges and inventory and inflationary pressures, partially offset by higher employee costs.

News Media (22% of the Company’s consolidated revenues in both the three months ended September 30, 2023 and 2022)

									For the three months ended September 30,
																											2023						2022						Change						% Change
(in millions, except %)																																	Better/(Worse)
Revenues:
Circulation and subscription																											$	275					$	269					$	6					2		%
Advertising																											203						213						(10)						(5)		%
Other																											70						71						(1)						(1)		%
Total Revenues																											548						553						(5)						(1)		%
Operating expenses																											(314)						(314)						—						—		%
Selling, general and administrative																											(220)						(221)						1						—		%
Segment EBITDA																											$	14					$	18					$	(4)					(22)		%

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Revenues at the News Media segment decreased $5 million, or 1%, for the three months ended September 30, 2023 as compared to the corresponding period of fiscal 2023. Advertising revenues decreased $10 million as compared to the corresponding period of fiscal 2023, primarily driven by lower print advertising at News Corp Australia and News UK, lower digital advertising at News Corp Australia and a decline in traffic at some mastheads due to platform related changes, partially offset by the $2 million positive impact of foreign currency fluctuations. Circulation and subscription revenues increased $6 million as compared to the corresponding period of fiscal 2023, driven by the $5 million positive impact of foreign currency fluctuations, as cover price increases and digital subscriber growth across key mastheads were largely offset by print volume declines. The impact of foreign currency fluctuations of the U.S. dollar against local currencies resulted in a revenue increase of $7 million, or 1%, for the three months ended September 30, 2023 as compared to the corresponding period of fiscal 2023.

Segment EBITDA at the News Media segment decreased by $4 million, or 22%, for the three months ended September 30, 2023 as compared to the corresponding period of fiscal 2023, which includes $3 million of one-time costs at News UK pertaining to the proposed combination of printing operations with DMG Media. The decrease is primarily due to the lower revenues discussed above, partially offset by gross cost savings related to the announced 5% headcount reduction initiative.

News Corp Australia

Revenues were $238 million for the three months ended September 30, 2023, a decrease of $17 million, or 7%, compared to revenues of $255 million in the corresponding period of fiscal 2023. Advertising revenues decreased $11 million due to lower print and digital advertising revenues and the $4 million negative impact of foreign currency fluctuations. Circulation and subscription revenues decreased $5 million due to the $5 million negative impact of foreign currency fluctuations, as print volume declines were offset by cover price increases and digital subscriber growth. The impact of foreign currency fluctuations of the U.S. dollar against local currencies resulted in a revenue decrease of $11 million, or 5%, for the three months ended September 30, 2023 as compared to the corresponding period of fiscal 2023.

News UK

Revenues were $228 million for the three months ended September 30, 2023, an increase of $7 million, or 3%, as compared to revenues of $221 million in the corresponding period of fiscal 2023. Circulation and subscription revenues increased $10 million due to the $10 million positive impact of foreign currency fluctuations, as print volume declines were offset by cover price increases and digital subscriber growth. Advertising revenues decreased $2 million, primarily driven by lower print advertising revenues, partially offset by the $3 million positive impact of foreign currency fluctuations. The impact of foreign currency fluctuations of the U.S. dollar against local currencies resulted in a revenue increase of $15 million, or 7%, for the three months ended September 30, 2023 as compared to the corresponding period of fiscal 2023.

LIQUIDITY AND CAPITAL RESOURCES

Current Financial Condition

The Company’s principal source of liquidity is internally generated funds and cash and cash equivalents on hand. As of September 30, 2023, the Company’s cash and cash equivalents were $1.5 billion. The Company also has available borrowing capacity under its revolving credit facility (the “Revolving Facility”) and certain other facilities, as described below, and expects to have access to the worldwide credit and capital markets, subject to market conditions, in order to issue additional debt if needed or desired. The Company currently expects these elements of liquidity will enable it to meet its liquidity needs for at least the next 12 months, including repayment of indebtedness. Although the Company believes that its cash on hand and future cash from operations, together with its access to the credit and capital markets, will provide adequate resources to fund its operating and financing needs for at least the next 12 months, its access to, and the availability of, financing on acceptable terms in the future will be affected by many factors, including: (i) the financial and operational performance of the Company and/or its operating subsidiaries, as applicable, (ii) the Company’s credit ratings and/or the credit rating of its operating subsidiaries, as applicable, (iii) the provisions of any relevant debt instruments, credit agreements, indentures and similar or associated documents, (iv) the liquidity of the overall credit and capital markets and (v) the state of the economy. There can be no assurances that the Company will continue to have access to the credit and capital markets on acceptable terms.

As of September 30, 2023, the Company’s consolidated assets included $674 million in cash and cash equivalents that were held by its foreign subsidiaries. Of this amount, $118 million is cash not readily accessible by the Company as it is held by REA Group, a majority owned but separately listed public company. REA Group must declare a dividend in order for the Company to have access to its share of REA Group’s cash balance.

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The principal uses of cash that affect the Company’s liquidity position include the following: operational expenditures including employee costs, paper purchases and programming costs; capital expenditures; income tax payments; investments in associated entities; acquisitions; the repurchase of shares; dividends; and the repayment of debt and related interest. In addition to the acquisitions and dispositions disclosed elsewhere, the Company has evaluated, and expects to continue to evaluate, possible future acquisitions and dispositions of certain businesses. Such transactions may be material and may involve cash, the issuance of the Company’s securities or the assumption of indebtedness.

Issuer Purchases of Equity Securities

The Company’s Board of Directors (the “Board of Directors”) has authorized a repurchase program to purchase up to $1 billion in the aggregate of the Company’s outstanding Class A Common Stock and Class B Common Stock (the “Repurchase Program”). The manner, timing, number and share price of any repurchases will be determined by the Company at its discretion and will depend upon such factors as the market price of the stock, general market conditions, applicable securities laws, alternative investment opportunities and other factors. The Repurchase Program has no time limit and may be modified, suspended or discontinued at any time. As of September 30, 2023, the remaining authorized amount under the Repurchase Program was approximately $548 million.

During the three months ended September 30, 2023, the Company repurchased and subsequently retired 1.0 million shares of Class A Common Stock for approximately $20 million and 0.4 million shares of Class B Common Stock for approximately $9 million. During the three months ended September 30, 2022, the Company repurchased and subsequently retired 5.0 million shares of Class A Common Stock for approximately $84 million and 2.5 million shares of Class B Common Stock for approximately $43 million. See Note 6—Equity in the accompanying Consolidated Financial Statements.

Dividends

In August 2023, the Board of Directors declared a semi-annual cash dividend of $0.10 per share for Class A Common Stock and Class B Common Stock. The dividend was paid on October 11, 2023 to stockholders of record as of September 13, 2023. The timing, declaration, amount and payment of future dividends to stockholders, if any, is within the discretion of the Board of Directors. The Board of Directors’ decisions regarding the payment of future dividends will depend on many factors, including the Company’s financial condition, earnings, capital requirements and debt facility covenants, other contractual restrictions, as well as legal requirements, regulatory constraints, industry practice, market volatility and other factors that the Board of Directors deems relevant.

Sources and Uses of Cash—For the three months ended September 30, 2023 versus the three months ended September 30, 2022

Net cash used in operating activities for the three months ended September 30, 2023 and 2022 was as follows (in millions):

For the three months ended September 30,			2023						2022
Net cash used in operating activities			$	(55)					$	(31)

Net cash used in operating activities increased by $24 million for the three months ended September 30, 2023 as compared to the three months ended September 30, 2022. The increase was primarily due to higher working capital and higher restructuring payments, partially offset by lower tax payments and higher Total Segment EBITDA.

Net cash used in investing activities for the three months ended September 30, 2023 and 2022 was as follows (in millions):

For the three months ended September 30,			2023						2022
Net cash used in investing activities			$	(159)					$	(130)

Net cash used in investing activities increased by $29 million for the three months ended September 30, 2023, as compared to the three months ended September 30, 2022. During the three months ended September 30, 2023, the Company used $124 million of cash for capital expenditures, of which $50 million related to Foxtel, and $35 million for acquisitions and investments. During the three months ended September 30, 2022, the Company used $104 million of cash for capital expenditures, of which $40 million related to Foxtel.

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Net cash used in financing activities for the three months ended September 30, 2023 and 2022 was as follows (in millions):

For the three months ended September 30,			2023						2022
Net cash used in financing activities			$	(65)					$	(149)

Net cash used in financing activities was $65 million for the three months ended September 30, 2023, as compared to $149 million for the three months ended September 30, 2022.

During the three months ended September 30, 2023, the Company had $933 million of borrowing repayments, primarily related to the refinancing of Foxtel and REA Groups’ debt portfolios, $29 million of stock repurchases of outstanding Class A and Class B Common Stock under the Repurchase Program and dividend payments of $28 million to REA Group minority stockholders. The net cash used in financing activities was partially offset by new borrowings of $925 million primarily related to the refinancings at Foxtel and REA Group and $53 million related to the net settlement of certain hedges which were terminated in connection with the refinancing at Foxtel.

During the three months ended September 30, 2022, the Company had $337 million of borrowing repayments, primarily related to Foxtel’s U.S. private placement senior unsecured notes that matured in July 2022, $127 million of stock repurchases of outstanding Class A and Class B Common Stock under the Repurchase Program and dividend payments of $31 million to REA Group minority stockholders. The net cash used in financing activities was partially offset by new borrowings of $328 million related to Foxtel.

Reconciliation of Free Cash Flow and Free Cash Flow Available to News Corporation

Free cash flow and free cash flow available to News Corporation are non-GAAP financial measures. Free cash flow is defined as net cash provided by (used in) operating activities, less capital expenditures, and free cash flow available to News Corporation is defined as free cash flow, less REA Group free cash flow, plus cash dividends received from REA Group. Free cash flow and free cash flow available to News Corporation should be considered in addition to, not as a substitute for, cash flows from operations and other measures of financial performance reported in accordance with GAAP. Free cash flow and free cash flow available to News Corporation may not be comparable to similarly titled measures reported by other companies, since companies and investors may differ as to what items should be included in the calculation of free cash flow.

The Company believes free cash flow provides useful information to management and investors about the Company’s liquidity and cash flow trends. The Company believes free cash flow available to News Corporation, which adjusts free cash flow to exclude REA Group’s free cash flow and include dividends received from REA Group, provides management and investors with a measure of the amount of cash flow that is readily available to the Company, as REA Group is a separately listed public company in Australia and must declare a dividend in order for the Company to have access to its share of REA Group’s cash balance. The Company believes free cash flow available to News Corporation provides a more conservative view of the Company’s free cash flow because this presentation includes only that amount of cash the Company actually receives from REA Group, which has generally been lower than the Company’s unadjusted free cash flow.

A limitation of both free cash flow and free cash flow available to News Corporation is that they do not represent the total increase or decrease in the cash balance for the period. Management compensates for the limitation of free cash flow and free cash flow available to News Corporation by also relying on the net change in cash and cash equivalents as presented in the Statements of Cash Flows prepared in accordance with GAAP which incorporate all cash movements during the period.

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The following table presents a reconciliation of net cash used in operating activities to free cash flow and free cash flow available to News Corporation:

			For the three months ended September 30,
			2023						2022
			(in millions)
Net cash used in operating activities			$	(55)					$	(31)
Less: Capital expenditures			(124)						(104)
Free cash flow			(179)						(135)
Less: REA Group free cash flow			(39)						(37)
Plus: Cash dividends received from REA Group			44						50
Free cash flow available to News Corporation			$	(174)					$	(122)

Free cash flow in the three months ended September 30, 2023 was $(179) million compared to $(135) million in the prior year. Free cash flow available to News Corporation in the three months ended September 30, 2023 was $(174) million compared to $(122) million in the prior year. Free cash flow and Free cash flow available to News Corporation decreased primarily due to higher cash used in operating activities and higher capital expenditures, as discussed above.

Borrowings

As of September 30, 2023, the Company, certain subsidiaries of NXE Australia Pty Limited (the “Foxtel Group” and together with such subsidiaries, the “Foxtel Debt Group”) and REA Group and certain of its subsidiaries (REA Group and certain of its subsidiaries, the “REA Debt Group”) had total borrowings of $3.0 billion, including the current portion. Both the Foxtel Group and REA Group are consolidated but non wholly-owned subsidiaries of News Corp, and their indebtedness is only guaranteed by members of the Foxtel Debt Group and REA Debt Group, respectively, and is non-recourse to News Corp.

News Corp Borrowings

As of September 30, 2023, the Company had (i) borrowings of $1,979 million, consisting of its outstanding 2021 Senior Notes, 2022 Senior Notes and Term A Loans and (ii) $750 million of undrawn commitments available under the Revolving Facility.

Foxtel Group Borrowings

As of September 30, 2023, the Foxtel Debt Group had (i) borrowings of approximately $699 million, including the amounts outstanding under the 2024 Foxtel Credit Facility (described below), the 2017 Working Capital Facility and the Telstra Facility (described below) and (ii) total undrawn commitments of A$304 million available under the 2024 Foxtel Credit Facility and 2017 Working Capital Facility.

During the three months ended September 30, 2023, the Foxtel Group refinanced its A$610 million 2019 revolving credit facility, A$250 million term loan facility and tranche 3 of its 2012 U.S. private placement senior unsecured notes with the proceeds of a new A$1.2 billion syndicated credit facility (the “2024 Foxtel Credit Facility”). The 2024 Foxtel Credit Facility consists of three sub-facilities: (i) an A$817.5 million three year revolving credit facility (the “2024 Foxtel Credit Facility — tranche 1”), (ii) a US$48.7 million four year term loan facility (the “ 2024 Foxtel Credit Facility — tranche 2”) and (iii) an A$311.0 million four year term loan facility (the “2024 Foxtel Credit Facility — tranche 3”). In addition, the Foxtel Group amended its 2017 Working Capital Facility to extend the maturity to August 2026 and modify the pricing.

Depending on the Foxtel Group’s net leverage ratio, (i) borrowings under the 2024 Foxtel Credit Facility — tranche 1 and 2017 Working Capital Facility bear interest at a rate of the Australian BBSY plus a margin of between 2.35% and 3.60%; (ii) borrowings under the 2024 Foxtel Credit Facility — tranche 2 bear interest at a rate based on a Term SOFR formula, as set forth in the 2024 Foxtel Credit Agreement, plus a margin of between 2.50% and 3.75%; and (iii) borrowings under the 2024 Foxtel Credit Facility — tranche 3 bear interest at a rate of the Australian BBSY plus a margin of between 2.50% and 3.75%. All tranches carry a commitment fee of 45% of the applicable margin on any undrawn balance during the relevant availability period. Tranches 2 and 3 of the 2024 Foxtel Credit Facility amortize on a proportionate basis in an aggregate annual amount equal to A$35 million in each of the first two years following closing and A$40 million in each of the two years thereafter.

The agreements governing the Foxtel Debt Group’s external borrowings contain customary affirmative and negative covenants and events of default, with customary exceptions, including specified financial and non-financial covenants calculated in accordance with Australian International Financial Reporting Standards. Subject to certain exceptions, these covenants restrict

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or prohibit members of the Foxtel Debt Group from, among other things, undertaking certain transactions, disposing of certain properties or assets (including subsidiary stock), merging or consolidating with any other person, making financial accommodation available, giving guarantees, entering into certain other financing arrangements, creating or permitting certain liens, engaging in transactions with affiliates, making repayments of certain other loans and undergoing fundamental business changes. In addition, the agreements require the Foxtel Debt Group to maintain a ratio of net debt to Earnings Before Interest, Tax, Depreciation and Amortization (“EBITDA”), as adjusted under the applicable agreements, of not more than 3.25 to 1.0. The agreements also require the Foxtel Debt Group to maintain a net interest coverage ratio of not less than 3.5 to 1.0. There are no assets pledged as collateral for any of the borrowings.

In addition to third-party indebtedness, the Foxtel Debt Group has related party indebtedness consisting of A$700 million of outstanding principal of subordinated shareholder loans. The shareholder loans bear interest at a variable rate of the Australian BBSY plus an applicable margin ranging from 6.30% to 7.75% and mature in December 2027. Amounts outstanding under the shareholder loans are permitted to be repaid if (i) no actual or potential event of default exists both before and immediately after repayment and (ii) the net debt to EBITDA ratio of the Foxtel Debt Group was on the most recent covenant calculation date, and would be immediately after the cash repayment, less than or equal to 2.25 to 1.0. Additionally, the Foxtel Debt Group has an A$170 million subordinated shareholder loan facility with Telstra which can be used to finance cable transmission costs due to Telstra. The Telstra Facility bears interest at a variable rate of the Australian BBSY plus an applicable margin of 7.75% and matures in December 2027. The Company excludes the utilization of the Telstra Facility from the Statements of Cash Flows because it is non-cash.

REA Group Borrowings

As of September 30, 2023, REA Group had (i) borrowings of approximately $258 million, consisting of amounts outstanding under the 2024 REA Credit Facility (described below) and 2024 Subsidiary Facility (described below) and (ii) A$282 million of undrawn commitments available under the 2024 REA Credit Facility and the 2024 Subsidiary Facility.

During the three months ended September 30, 2023, REA Group entered into a new unsecured syndicated credit facility (the “2024 REA Credit Facility”) which replaces the 2022 Credit Facility and consists of two sub-facilities: (i) a five-year A$400 million revolving loan facility (the “2024 REA Credit Facility—tranche 1”) which was used to refinance tranche 1 of the 2022 Credit Facility and (ii) an A$200 million revolving loan facility representing the continuation of tranche 2 of the 2022 Credit Facility (the “2024 REA Credit Facility—tranche 2”). REA Group may request increases in the amount of the 2024 REA Credit Facility up to a maximum amount of A$500 million, subject to the terms and limitations set forth in the syndicated facility agreement.

Borrowings under the 2024 REA Credit Facility — tranche 1 accrue interest at a rate of the Australian BBSY plus a margin of between 1.45% and 2.35%, depending on REA Group’s net leverage ratio. Borrowings under the 2024 REA Credit Facility — tranche 2 continue to accrue interest at a rate of the Australian BBSY plus a margin of between 1.15% and 2.25%, depending on REA Group’s net leverage ratio. Both tranches carry a commitment fee of 40% of the applicable margin on any undrawn balance.

The syndicated facility agreement governing the 2024 REA Credit Facility requires REA Group to maintain (i) a net leverage ratio of not more than 3.5 to 1.0 and (ii) an interest coverage ratio of not less than 3.0 to 1.0. The agreement also contains certain other customary affirmative and negative covenants and events of default. Subject to certain exceptions, these covenants restrict or prohibit REA Group and its subsidiaries from, among other things, incurring or guaranteeing debt, disposing of certain properties or assets, merging or consolidating with any other person, making financial accommodation available, entering into certain other financing arrangements, creating or permitting certain liens, engaging in non arms’ length transactions with affiliates, undergoing fundamental business changes and making restricted payments.

During the three months ended September 30, 2023, REA Group also entered into an A$83 million unsecured bilateral revolving credit facility (the “2024 Subsidiary Facility”). Proceeds of the 2024 Subsidiary Facility will be used to refinance an existing facility at one of its subsidiaries and to fund its business of providing short-term financing to real estate agents and vendors. Borrowings under the 2024 Subsidiary Facility accrue interest at a rate of the Australian BBSY plus a margin of 1.40% and undrawn balances carry a commitment fee of 40% of the applicable margin. The facility agreement governing the 2024 Subsidiary Facility permits the lender to cancel its commitment and declare all outstanding amounts immediately due and payable after a consultation period in specified circumstances, including if certain key operating measures of its subsidiary fall

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below the budgeted amount for two consecutive quarters. The agreement also contains certain other customary affirmative and negative covenants and events of default that are similar to those governing the 2024 REA Credit Facility.

All of the Company’s borrowings contain customary representations, covenants and events of default. The Company was in compliance with all such covenants at September 30, 2023.

See Note 5—Borrowings in the accompanying Consolidated Financial Statements for further details regarding the Company’s outstanding debt, including additional information about interest rates, amortization (if any), maturities and covenants related to such debt arrangements.

Commitments

The Company has commitments under certain firm contractual arrangements (“firm commitments”) to make future payments. These firm commitments secure the current and future rights to various assets and services to be used in the normal course of operations. As a result of entering into the 2024 Foxtel Credit Facility, the 2024 REA Credit Facility and the 2024 Subsidiary Facility during the three months ended September 30, 2023, the Company has presented its commitments associated with its borrowings and the related interest payments in the table below. See Note 5—Borrowings. The Company’s other commitments as of September 30, 2023 have not changed significantly from the disclosures included in the 2023 Form 10-K.

			As of September 30, 2023
			Payments Due by Period
			Total						Less than 1 year						1-3 years						3-5 years						More than 5 years
			(in millions)
Borrowings(a)			$	2,954					$	35					$	622					$	797					$	1,500
Interest payments on borrowings(b)			712						151						266						167						128

(a)See Note 5—Borrowings.

(b)Reflects the Company’s expected future interest payments based on borrowings outstanding and interest rates applicable at September 30, 2023. Such rates are subject to change in future periods. See Note 5—Borrowings.

Contingencies

The Company routinely is involved in various legal proceedings, claims and governmental inspections or investigations, including those discussed in Note 9 to the Consolidated Financial Statements. The outcome of these matters and claims is subject to significant uncertainty, and the Company often cannot predict what the eventual outcome of pending matters will be or the timing of the ultimate resolution of these matters. Fees, expenses, fines, penalties, judgments or settlement costs which might be incurred by the Company in connection with the various proceedings could adversely affect its results of operations and financial condition.

The Company establishes an accrued liability for legal claims when it determines that a loss is both probable and the amount of the loss can be reasonably estimated. Once established, accruals are adjusted from time to time, as appropriate, in light of additional information. The amount of any loss ultimately incurred in relation to matters for which an accrual has been established may be higher or lower than the amounts accrued for such matters. Legal fees associated with litigation and similar proceedings are expensed as incurred. The Company recognizes gain contingencies when the gain becomes realized or realizable. See Note 9—Commitments and Contingencies in the accompanying Consolidated Financial Statements.

The Company’s tax returns are subject to on-going review and examination by various tax authorities. Tax authorities may not agree with the treatment of items reported in the Company’s tax returns, and therefore the outcome of tax reviews and examinations can be unpredictable. The Company believes it has appropriately accrued for the expected outcome of uncertain tax matters and believes such liabilities represent a reasonable provision for taxes ultimately expected to be paid. However, these liabilities may need to be adjusted as new information becomes known and as tax examinations continue to progress, or as settlements or litigations occur.