Income Taxes (Tables)

12 Months Ended

Jun. 30, 2015

Income Tax Disclosure [Abstract]

Schedule of (Loss) Income Before Income Tax (Benefit) Expense Attributable to Jurisdictions

Income (loss) before income tax expense (benefit) expense was attributable to the following jurisdictions:

	For the fiscal years ended June 30,
	2015			2014(a)			2013
	(in millions)
U.S.	$	(348	)	$	(821	)	$	(432	)
Foreign		404			424			605
Income (loss) before income tax expense (benefit)	$	56		$	(397	)	$	173

^(a)  See Discussion of Foreign Tax Refund below.

Schedule of Components of Income Tax (Benefit) Expense

The significant components of the Company’s income tax expense (benefit) were as follows:

	For the fiscal years ended June 30,
	2015			2014(a)			2013
	(in millions)
Current:
U.S.
Federal	$	2		$	11		$	183
State & local		11			(19	)		21
Foreign		135			(734	)		99
Total current tax		148			(742	)		303
Deferred:
U.S.
Federal		(2	)		17			(317	)
State & local		1			12			(33	)
Foreign		(13	)		22			(327	)
Total deferred tax		(14	)		51			(677	)
Total income tax expense (benefit)	$	134		$	(691	)	$	(374	)

^(a) See Discussion of Foreign Tax Refund below.

Net Impact of Tax Refund and Interest, Net of Tax, Recorded in Statement of Operations

Refer to the table below for the net impact of the tax refund and interest, net of tax, recorded in the Statements of Operations:

	For the fiscal year ended June 30, 2014
	(in millions)
Other, net	$	(721	)
Income tax (expense) benefit		721
Net impact to the Statement of Operations	$	—

Effective Income Tax Rate Reconciliation

The reconciliation between the Company’s actual effective tax rate and the statutory U.S. Federal income tax rate of 35% was:

	For the fiscal years ended June 30,
	2015			2014			2013
U.S. federal income tax rate		35	%		35	%		35	%
State and local taxes, net		12			1			(2	)
Foreign operations at lower tax rates(a)		(23	)		17			(35	)
Foreign tax refund received(b)		—			182			—
Foreign tax refund paid to 21st Century Fox(b)		—			(64	)		—
Impact of CMH transaction(c)		—			—			(247	)
Non-taxable gain on SKY Network Television Ltd.(d)		—			—			(56	)
Non-deductible goodwill on asset impairment(e)		201			—			87
Non-deductible compensation and benefits		7			—			—
Other, net(f)		7			3			2
Effective tax rate(g)		239	%		174	%		(216	)%

^(a)  The Company’s foreign operations are located primarily in Australia and the United Kingdom (“UK”) which have lower income tax rates than the U.S. For the fiscal years ended June 30, 2015 and June 30, 2013, the effect of foreign operations at lower tax rates decreased the Company’s effective tax rate 23% and 35%, respectively, as the Company recorded an overall pre-tax book income on a consolidated basis. Furthermore, the impact of foreign operations at lower tax rates had a greater percentage impact on the Company’s effective tax rate in those years due to jurisdictional income mix and the comparatively low amount of consolidated pre-tax book income in those years. For the year ended June 30, 2014, the effect of foreign operations at lower tax rates increased the Company’s effective tax rate 17% as the company recorded an overall pre-tax book loss on a consolidated basis. The significant amount of pre-tax income from foreign jurisdictions in fiscal 2013 disclosed in the table of jurisdictional earnings above is primarily attributable to non-recurring gains from our operations in Australia, including the CMH transaction, and gain from the sale of the Company’s investment in SKY Network Television Ltd. which are discussed in footnotes (c) and (d) below.

^(b)  The Company recorded a tax benefit, net of applicable taxes on interest, of $721 million for the fiscal year ended June 30, 2014 to Income tax benefit in the Statements of Operations related to certain foreign tax refunds received. See the discussion of Foreign Tax Refund above. The tax benefit related to these refunds increased our effective tax rate 182%. These foreign tax refunds received were remitted to 21st Century Fox, net of applicable taxes on interest, in accordance with the terms of the Tax Sharing and Indemnification Agreement. Accordingly, for the fiscal year ended June 30, 2014, the Company recorded an expense to Other, net of approximately $721 million for the payment to 21st Century Fox in the Statements of Operations. This expense is a non-deductible item the tax effect of which is approximately $252 million and reflected as a decrease of approximately 64% in our effective tax rate.

^(c)  The Company recognized a non-recurring pre-tax gain of approximately $1.3 billion associated with the acquisition of CMH resulting in a 247% reduction in our effective tax rate in the fiscal year ended June 30, 2013. The gain recognized on the acquisition of CMH does not give rise to taxable income and was a result of revaluing the Company’s non-controlling interest to fair value as of the acquisition date in addition to the reversal of the historic deferred tax liability related to the consolidation of FOX SPORTS Australia. (See Note 3—Acquisitions, Disposals and Other Transactions for further information).

^(d)  In March 2013, the Company sold its 44% equity interest in SKY Network Television Ltd. and recorded a non-taxable gain of approximately $321 million which was included in Other, net in the Statements of Operations for the fiscal year ended June 30, 2013. (See Note 5—Investments).

^(e)  The Company recorded non-cash charges related to the impairment of Goodwill. To the extent these expenses are non-deductible they have an impact on our effective tax rate. (See Note 7—Goodwill and Other Intangible Assets).

^(f)  Other effective tax rate reconciliation items include non-deductible expenses are comparable year-over-year; however the impact appears more significant for the year-ended June 30, 2015 due to lower pre-tax book income.

^(g)  For the fiscal year ended June 30, 2015, the effective tax rate of 239% represents an income tax expense when compared to consolidated pre-tax book income. For the fiscal year ended June 30, 2014, the effective tax rate of 174% represents an income tax benefit when compared to consolidated pre-tax book loss. As a result, certain reconciling items between the U.S. federal income tax rate and the Company’s effective tax rate may have the opposite impact. For the fiscal year ended June 30, 2013, the negative effective tax rate results from the Company’s total tax benefit when compared to pre-tax book income. Further, reconciling items for the fiscal years ended June 30, 2015 and June 30, 2013, have a greater percentage impact on the Company’s effective tax rate due to the comparatively low amount of consolidated pre-tax book income.

Summary of Recognized Current and Deferred Income Taxes in Balance Sheets

The Company recognized current and deferred income taxes in the Balance Sheets at June 30, 2015 and 2014, respectively:

	As of June 30,
	2015			2014
	(in millions)
Other current assets	$	61		$	76
Other non-current assets		216			146
Other current liabilities		(1	)		(36	)
Deferred income taxes		(166	)		(224	)
Net deferred tax liabilities	$	110		$	(38	)

Schedule of Components of Deferred Tax Assets and Liabilities

The significant components of the Company’s deferred tax assets and liabilities were as follows:

	As of June 30,
	2015			2014
	(in millions)
Deferred tax assets:
Accrued liabilities	$	56		$	49
Capital loss carryforwards		892			1,120
Retirement benefit obligations		85			89
Net operating loss carryforwards		541			262
Business credits		46			47
Other		307			225
Total deferred tax assets		1,927			1,792
Deferred tax liabilities:
Asset basis difference and amortization		(468	)		(376	)
Other		(41	)		(61	)
Total deferred tax liabilities		(509	)		(437	)
Net deferred tax asset before valuation allowance		1,418			1,355
Less: valuation allowance (See Note 20 - Valuation and Qualifying Accounts)		(1,308	)		(1,393	)
Net deferred tax liabilities	$	110		$	(38	)

Schedule of Income Tax Net Operating Loss Carryforwards (NOLs) (Gross, Net Uncertain Tax Benefits)

As of June 30, 2015, the Company had income tax Net Operating Loss Carryforwards (NOLs) (gross, net of uncertain tax benefits), in various jurisdictions as follows:

Jurisdiction	Expiration	Amount (in millions)
U.S. Federal	2017 to 2034	$	833
U.S. States	Various		223
Australia	Indefinite		322
U.K.	Indefinite		253
Other Foreign	Various		323

Change in Unrecognized Tax Benefits, Excluding Interest and Penalties

The following table sets forth the change in the Company’s unrecognized tax benefits, excluding interest and penalties:

	For the fiscal years ended June 30,
	2015			2014			2013
	(in millions)
Balance, beginning of period	$	58		$	127		$	132
Additions for prior year tax positions		79			39			1
Additions for current year tax positions		4			5			6
Reduction for prior year tax positions		(7	)		(114	)		—
Impact of currency translations		(5	)		1			(12	)
Balance, end of period	$	129		$	58		$	127