Twenty-First Century Fox 2007 Annual Report Download - page 109

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NEWS CORPORATION
Notes to the Consolidated Financial Statements (continued)
Note 18 Income Taxes
Income from continuing operations before income tax expense and minority interest in subsidiaries was attributable to the following
jurisdictions:
2007 2006 2005
For the years ended June 30, (in millions)
United States (including exports) $4,586 $3,748 $2,896
Foreign 720 657 665
Income from continuing operations before income tax expense and minority interest in
subsidiaries $5,306 $4,405 $3,561
Significant components of the Company’s provisions for income taxes from continuing operations were as follows:
2007 2006 2005
For the years ended June 30, (in millions)
Current:
United States
Federal $ 281 $ 145 $ 51
State & local 69 66 45
Foreign 390 357 179
Total current 740 568 275
Deferred 1,074 958 945
Total provision for income taxes $1,814 $1,526 $1,220
In October 2004, the American Jobs Creation Act (the “AJCA”) was signed into law. The AJCA includes a temporary incentive for
U.S. multinationals to repatriate foreign earnings at the favorable effective tax rate of 5.25%. Such repatriations must occur in either
an enterprise’s last tax year that began before the enactment date or the first tax year that begins during the one-year period
beginning on the date of enactment. In accordance with the AJCA, the Company repatriated $420 million at a favorable tax rate of
5.25%, which resulted in a tax benefit to the Company of approximately $125 million. The amounts repatriated were used to
compensate non-executive U.S. employees for services performed within the United States.
The reconciliation of income tax attributable to continuing operations computed at the statutory rate to income tax expense is:
For the years ended June 30, 2007 2006 2005
US federal income tax rate 35% 35% 35%
State and local taxes 121
Effect of foreign taxes 211
AJCA Section 965 Benefit — (3) —
Resolution of tax matters (2) — (3)
Change in valuation allowance (1) (1) (1)
Other permanent differences (1) 1 1
Effective tax rate 34% 35% 34%
108