Twenty-First Century Fox 2014 Annual Report Download - page 138

TWENTY-FIRST CENTURY FOX, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
132
As discussed in Note 3 – Acquisitions, Disposals and Other Transactions, in connection with the pending
disposition of Sky Italia and Sky Deutschland pursuant to sale agreements with BSkyB, the Company expects to use
most of its U.S. capital loss carryforwards and foreign tax credits carryforwards to offset a substantial amount of the
gain which is likely to be recognized.
The following table sets forth the change in the unrecognized tax benefits, excluding interest and penalties:
For the years ended June 30,
2014 2013 2012
(in millions)
Balance, beginning of period ............................................................................. $ 200 $ 173 $ 140
Additions for prior year tax positions ................................................................ 1 60 32
Additions for current year tax positions ............................................................. 13 4 14
Reduction for prior year tax positions ............................................................... (70 ) (37 ) (13)
Balance, end of period from continuing operations ........................................... 144 200 173
Balance, end of period from discontinued operations ........................................ - - 116
Balance, end of period ....................................................................................... $ 144 $ 200 $ 289
The Company recognizes interest and penalty charges related to unrecognized tax benefits as income tax
expense, which is consistent with the recognition in prior reporting periods. The Company recorded liabilities for
accrued interest of $29 million and $44 million as of June 30, 2014 and 2013, respectively and the amounts of
interest income/expense recorded in each of the three years ending June 30, 2014 were not material.
The Company is subject to tax in various domestic and international jurisdictions and, as a matter of ordinary
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 other pending tax matters and does not currently anticipate
that the ultimate resolution of other pending tax matters will have a material adverse effect on its consolidated
financial condition, future results of operations or liquidity. The U.S. Internal Revenue Service has concluded its
examination of the Company’s returns through fiscal year 2009. Additionally, the Company’s income tax returns for
fiscal years 2000 through 2014 are subject to examination in various foreign jurisdictions. The Company does not
expect significant changes to these positions over the next 12 months. As of June 30, 2014 and 2013, approximately
$144 million and $200 million, respectively, would affect the Company’s effective income tax rate, if and when
recognized in future fiscal years.
A foreign subsidiary of News Corp prior to the Separation filed for refunds to claim certain losses in a foreign
jurisdiction. Pursuant to the tax sharing and indemnification agreement, the proceeds of such claims, net of
applicable taxes incurred by News Corp, are to be paid to the Company. During fiscal 2014, these claims were
resolved. (See Note 4 – Discontinued Operations)
The Company has not provided for U.S. taxes on undistributed earnings of foreign subsidiaries as they are
considered to be reinvested indefinitely. Calculation of the unrecognized deferred tax liability for temporary
differences related to these earnings is not practicable. Undistributed earnings of foreign subsidiaries of the
Company considered to be indefinitely reinvested amounted to approximately $851 million at June 30, 2014.
NOTE 19. SEGMENT INFORMATION
The Company is a diversified global media and entertainment company, which manages and reports its
businesses in the following five segments:
yCable Network Programming, which principally consists of the production and licensing of
programming distributed through cable television systems, direct broadcast satellite operators and
telecommunication companies primarily in the U.S., Latin America, Europe and Asia.