Income Taxes (Tables)

12 Months Ended

Jun. 30, 2020

Income Tax Disclosure [Abstract]

Schedule of Components of Provision for Income Taxes

Income before income tax (expense) benefit was attributable to the U.S. jurisdiction. Significant components of the Company’s provision for income taxes were as follows:

	For the years ended June 30,
	2020		2019		2018
	(in millions)
U.S.
Federal	$	110	$	127	$	481
State, local and other		9		68		64
Total current		119		195		545
Deferred		283		386		(603	)
Provision for income taxes	$	402	$	581	$	(58	)

Effective Income Tax Rate Reconciliation

The reconciliation of income tax computed at the statutory rate to income tax (expense) benefit was:

	For the years ended June 30,
	2020				2019			2018
U.S. federal income tax rate		21		%		21	%		28		%
Impact of U.S. tax reform(a)		-				-			(28	)
State and local taxes		4				4			4
Nondeductible compensation		2				-			-
Valuation allowance movements		1				-			(3	)
Adjustments for tax matters, net		(1	)			-			(1	)
Domestic production activities deduction		-				-			(2	)
Other		-				1			(1	)
Effective tax rate		27		%		26	%		(3	)	%

^(a) On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the “Tax Act”) which, among other things, lowered the U.S corporate income tax rates. Since the Company has a June 30 fiscal year-end, the lower corporate income tax rate was phased in, resulting in a U.S. statutory federal rate of approximately 28% for fiscal 2018, and 21% for subsequent fiscal years. As of June 30, 2018, the Company recorded a provisional net tax benefit of $607 million to adjust its net deferred tax liability position to reflect the new federal statutory rate of 21% (35% prior to the Tax Act). In fiscal 2019, in accordance with SEC guidance, the Company finalized its analysis and did not materially modify the provisional amounts previously recorded in the financial statements.

Schedule of Components of Deferred Tax Assets and Liabilities

The following is a summary of the components of the deferred tax accounts:

	As of June 30,
	2020			2019
	(in millions)
Deferred tax assets
Basis difference(a)	$	4,176		$	4,574
Operating lease liabilities		140			-
Pension benefit obligations		93			50
Equity-based compensation		31			17
Accrued liabilities		31			5
Net operating loss carryforwards		28			107
Other		120			68
Total deferred tax assets		4,619			4,821
Deferred tax liabilities
Operating lease ROU assets		(133	)		-
Sports rights contracts		(110	)		(164	)
Total deferred tax liabilities		(243	)		(164	)
Net deferred tax asset before valuation allowance		4,376			4,657
Less: valuation allowance		(20	)		(6	)
Total net deferred tax assets(b)	$	4,356		$	4,651

^(a) As a result of the Separation and the Distribution, which was a taxable transaction for which the estimated tax liability of $5.8 billion was included in the Transaction Tax paid by the Company, FOX obtained a tax basis in its assets equal to their respective fair market values. This amount includes the additional estimated deferred tax asset recorded as a result of the increased tax basis (See Note 1—Description of Business and Basis of Presentation under the heading “Basis of Presentation”).

^(b) Includes a $2 million deferred tax liability recorded in Other liabilities on the Consolidated Balance Sheet as of June 30, 2020.

Change in the Accrual for Uncertain Tax Positions

The following table sets forth the change in the uncertain tax positions, excluding interest and penalties:

	For the years ended June 30,
	2020				2019			2018
	(in millions)
Balance, beginning of year	$	94			$	91		$	110
Additions for prior year tax positions		1				7			1
Additions for current year tax positions		2				9			-
Reduction for prior year tax positions		(24	)	(a)		(13	)		(20	)
Balance, end of year	$	73			$	94		$	91

^(a) The reduction for prior year tax positions in fiscal 2020 includes $21 million from the expiration of statutes of limitations.