Twenty-First Century Fox 2013 Annual Report Download - page 142

TWENTY-FIRST CENTURY FOX, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Company or the counter-party to the agreement. None of these arrangements that become or are exercisable in
the next twelve months are material. Purchase arrangements that are exercisable by the counter-party to the
agreement, and that are outside the sole control of the Company, are accounted for in accordance with ASC 480-
10-S99-3A, “Distinguishing Liabilities from Equity.” Accordingly, the fair values of such purchase arrangements
are classified in redeemable noncontrolling interests.
The Company’s operations are subject to tax in various domestic and international jurisdictions and as a
matter of course, the Company is regularly audited by federal, state and foreign tax authorities. The Company
believes it has appropriately accrued for the expected outcome of all pending tax matters and does not currently
anticipate that the ultimate resolution of pending tax matters will have a material adverse effect on its
consolidated financial condition, future results of operations or liquidity.
The Company establishes an accrued liability for legal claims when the Company 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. Any fees, expenses, fines, penalties, judgments or settlements which might be incurred by the
Company in connection with the various proceedings could affect the Company’s results of operations and
financial condition. For the contingencies disclosed above for which there is at least a reasonable possibility that
a loss may be incurred, other than the accrual provided, the Company was unable to estimate the amount of loss
or range of loss.
NOTE 17. PENSION AND OTHER POSTRETIREMENT BENEFITS
The Company participates in and/or sponsors various pension, savings and postretirement benefit plans. The
major pension plans and postretirement benefit plans are closed to new participants (with the exception of groups
covered by collective bargaining agreements). In connection with the Separation of News Corp, the Company
entered into an Employee Matters Agreement with News Corp which provides that employees of News Corp no
longer participate in benefit plans sponsored or maintained by the Company as of the Separation date. Upon
separation, the Company’s plans transferred assets and obligations to News Corp resulting in a net decrease in
sponsored pension and postretirement plan obligations of $558 million. Additionally, as a result of the
Separation, deferred items of approximately $500 million were transferred to News Corp.
The Company has a legally enforceable obligation to contribute to some plans and is not required to
contribute to others. The plans in the U.S. include both defined benefit pension plans and employee non-
contributory and employee contributory accumulation plans covering all eligible employees. The Company
makes contributions in accordance with applicable laws or contract terms in each jurisdiction in which the
Company operates. The Company’s benefit obligation is calculated using several assumptions which the
Company reviews on a regular basis.
The funded status of the plans can change from year to year, but the assets of the funded plans have been
sufficient to pay all benefits that came due in each of fiscal 2013, 2012 and 2011.
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