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Income Taxes - Effective Income Tax Rate Reconciliation (Detail)
12 Months Ended
Jun. 30, 2018
Jun. 30, 2017
Jun. 30, 2016
Income Tax Disclosure [Abstract]      
U.S. federal income tax rate [1] 28.00% 35.00% 35.00%
State and local taxes, net (1.00%) 0.00% (8.00%)
Effect of foreign operations [2] (2.00%) (17.00%) (1.00%)
Change in valuation allowance [3] 1.00% (7.00%) (62.00%)
Non-deductible goodwill and asset impairments [4] (32.00%) (7.00%) 0.00%
Impact of the Tax Act [5] (22.00%) 0.00% 0.00%
Write-off of channel distribution agreement [6] (9.00%) 0.00% 0.00%
Income tax audit settlements [7] 5.00% (10.00%) 0.00%
Non-deductible compensation and benefits (1.00%) (1.00%) 3.00%
R&D credits (0.00%) 1.00% (2.00%)
Other, net 0.00% 1.00% 5.00%
Effective tax rate [8] (33.00%) (5.00%) (30.00%)
[1] As the Company has a June 30 fiscal year-end, the impact of the lower tax rate from the Tax Act will be phased in resulting in a U.S. statutory federal tax rate of approximately 28% for the fiscal year ended June 30, 2018 and a 21% U.S. statutory federal tax rate for fiscal years thereafter.
[2] The Company's effective tax rate is impacted by the geographic mix of its pre-tax income. The Company's foreign operations are located primarily in Australia and the United Kingdom ("U.K.") which prior to fiscal year ended June 30, 2018 had lower income tax rates than the U.S.
[3] For the fiscal year ended June 30, 2017, valuation allowance increased by $40 million related to foreign net operating losses, which more likely than not will not be utilized. For the fiscal year ended June 30, 2016, included in the change in valuation allowance is a tax benefit of $106 million related to the release of previously established valuation allowances related to certain U.S. federal NOLs and state deferred tax assets. This benefit was recognized in conjunction with management's plan to dispose of the Company's digital education business during fiscal 2016, as the Company now expects to generate sufficient U.S. taxable income to utilize these deferred tax assets prior to expiration.
[4] For the fiscal year ended June 30, 2018, the Company recorded non-cash charges of $218 million related to the impairment of goodwill and a write-down of assets and investments of approximately $1.1 billion, which reduced the Company's tax benefit by $54 million and $301 million, respectively. These impairments and write-downs have an impact on our effective tax rate to the extent a tax benefit is not recorded. For the fiscal year ended June 30, 2017, the Company recorded non-cash charges of $48 million related to the impairment of goodwill, which was non-deductible, and a write-down of $360 million on U.K. fixed assets, a portion of which were non-deductible, which reduced the Company's tax benefit by $12 million and $29 million, respectively. These impairments and write-downs have an impact on our effective tax rate to the extent a tax benefit is not recorded.
[5] As a result of the Tax Act, the Company recognized a net provisional income tax expense of $237 million primarily related to the re-measurement of U.S. deferred tax balances for the reduction in tax rate, valuation allowances recorded on certain deferred tax assets, and the liability for the transition tax.
[6] Represents the tax effect of the write-off of the FOX SPORTS Australia channel distribution agreement intangible asset as a result of the Transaction as well as other costs directly attributable to the Transaction.
[7] In the fiscal year ended June 30, 2018, certain pre-Separation tax matters were effectively settled with the Internal Revenue Service. As a result of the settlement, the Company recorded a net income tax benefit of $49 million, comprised of a current tax benefit of $2 million and a deferred tax benefit of $47 million. In the fiscal year ended June 30, 2017, the Company reached an agreement with a foreign tax authority to settle certain tax issues related to fiscal years 2010 through 2015. As a result of the settlement, the Company recorded net income tax expense of $63 million. See "Uncertain Tax Positions" below.
[8] For the fiscal years ended June 30, 2018 and June 30, 2017, the effective tax rates of (33)% and (5)%, respectively, represents income tax expense when compared to consolidated pre-tax book loss. For the fiscal year ended June 30, 2016, the effective tax rate of (30)% represents income tax benefit when compared to consolidated pre-tax book income.