Twenty-First Century Fox 2014 Annual Report Download - page 52

46
Other, net –
For the years ended June 30,
2014  2013
(in millions)
Gain on Sky Deutschland transaction(a) ................................................................................. $ - $ 2,069
(Loss) gain on sale of investment in NDS(b) .......................................................................... (30 ) 1,446
Gain on sale of investment in Phoenix(b) ............................................................................... 199 81
Gain on Fox Sports Asia transaction(a) ................................................................................... - 174
Gain on sale of investment in STATS(b) ................................................................................ 112 -
Shareholder litigation settlement(c) ........................................................................................ 111 -
Venezuela foreign currency devaluation(d) ............................................................................. (104 ) -
Loss on sale of Baltimore station(a) ........................................................................................ -  (92)
Investment impairment(b) ....................................................................................................... (69 ) (20)
Restructuring(e) ....................................................................................................................... (52 ) (13)
Change in fair value of securities(a) ........................................................................................ (4 ) 86
Other ...................................................................................................................................... 11 16
Other, net ............................................................................................................................... $ 174 $ 3,747
(a) See Note 3 – Acquisitions, Disposals and Other Transactions to the accompanying Consolidated Financial
Statements of Twenty-First Century Fox.
(b) See Note 7 – Investments to the accompanying Consolidated Financial Statements of Twenty-First Century
Fox.
(c) See Note 16 – Commitments and Contingencies to the accompanying Consolidated Financial Statements of
Twenty-First Century Fox.
(d) See Note 23 – Additional Financial Information to the accompanying Consolidated Financial Statements of
Twenty-First Century Fox.
(e) See Note 5 – Restructuring Programs to the accompanying Consolidated Financial Statements of Twenty-First
Century Fox.
Income tax expense – The Company’s tax provision and related effective tax rate of 25% for fiscal 2014 was
lower than the statutory rate of 35% primarily due to a 7% rate reduction from our foreign operations due to tax
credits and deductions arising from a corporate restructuring as well as the effect of income attributable to non-
controlling interests. The balance of the difference in the rate was primarily attributable to the Company’s ability to
utilize the domestic production activities deduction and the recognition of a deferred tax asset for additional tax
basis.
In connection with the pending disposition of Sky Italia and Sky Deutschland pursuant to sale agreements
with BSkyB, the Company plans 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. A benefit equal to the loss
carryforwards and foreign tax credit carryforwards utilized is expected to be recognized at that time, as a valuation
allowance is currently recorded against these assets. The agreements are subject to regulatory approvals, the
approval of BSkyB stockholders and customary closing conditions.
The Company’s tax provision and related effective tax rate of 19% for fiscal 2013 was lower than the statutory
rate of 35% primarily due to a 7% rate reduction as a result of adjustments to valuation allowances for the utilization
of foreign tax credit carryforwards in connection with the NDS Group Limited (“NDS”) transaction and the
consolidation of Sky Deutschland, which, in accordance with ASC 740, “Income Taxes” (“ASC 740”), reduced
income tax expense due to the removal of a historical valuation allowance. In addition, there is a 4% rate reduction
resulting from the sale of interests in subsidiaries and the non-taxable gain on the consolidation of Fox Sports Asia,
as well as a 2% rate reduction from our foreign operations due to tax credits and deductions arising from a corporate
restructuring. The effect of foreign operations was lower than in fiscal 2012 as a result of the substantial increase in
income from continuing operations.