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Income Taxes | 12 Months Ended
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Jun. 30, 2022
Income Tax Disclosure [Abstract] |
Income Taxes | INCOME TAXES Income before income tax expense was attributable primarily to the U.S. jurisdiction. Significant components of the Company's provision for income taxes were as follows:
| For the years ended June 30,
| 2022 |  | 2021 |  | 2020
| (in millions)
U.S. |  |  |  |  |
Federal | $ | 88 |  |  | $ | 181 |  |  | $ | 110 |
State, local and other | 31 |  |  | 2 |  |  | 9 |
Total current | 119 |  |  | 183 |  |  | 119 |
Deferred | 342 |  |  | 534 |  |  | 283 |
Provision for income taxes | $ | 461 |  |  | $ | 717 |  |  | $ | 402 |
The reconciliation of income tax computed at the statutory rate to income tax expense was:
| For the years ended June 30,
| 2022 |  | 2021 |  | 2020
U.S. federal income tax rate | 21 | % |  | 21 | % |  | 21 | %
State and local taxes | 4 |  |  | 4 |  |  | 4 |
Nondeductible compensation | 1 |  |  | 1 |  |  | 2 |
Valuation allowance movements | — |  |  | — |  |  | 1 |
Adjustments for tax matters, net | — |  |  | (1) |  |  | (1) |
Return to accrual(a) | 2 |  |  | — |  |  | — |
Other | (1) |  |  | — |  |  | — |
Effective tax rate | 27 | % |  | 25 | % |  | 27 | %
(a) | Primarily attributable to a remeasurement of the Company's net deferred tax assets associated with changes in the mix of jurisdictional earnings.
The following is a summary of the components of the deferred tax accounts:
| As of June 30,
| 2022 |  | 2021
| (in millions)
Deferred tax assets |  |  |
Basis difference(a) | $ | 3,371 |  |  | $ | 3,676 |
Operating lease liabilities | 123 |  |  | 121 |
Pension benefit obligations | 34 |  |  | 64 |
Equity-based compensation | 30 |  |  | 33 |
Accrued liabilities | — |  |  | 37 |
Net operating loss carryforwards | 31 |  |  | 18 |
Other | 104 |  |  | 117 |
Total deferred tax assets | 3,693 |  |  | 4,066 |
Deferred tax liabilities |  |  |
Operating lease ROU assets | (116) |  |  | (114) |
Accrued liabilities | (2) |  |  | — |
Sports rights contracts | (108) |  |  | (108) |
Total deferred tax liabilities | (226) |  |  | (222) |
Net deferred tax asset before valuation allowance | 3,467 |  |  | 3,844 |
Less: valuation allowance | (34) |  |  | (24) |
Total net deferred tax assets(b) | $ | 3,433 |  |  | $ | 3,820 |
(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 $7 million and $2 million deferred tax liability recorded in Other liabilities on the Consolidated Balance Sheet as of June 30, 2022 and 2021, respectively.
As of June 30, 2022, the Company had $31 million of tax attributes from net operating loss carryforwards available to offset future taxable income. A substantial portion of these losses can be carried forward indefinitely. The net increase in the valuation allowance to $34 million as of June 30, 2022 was primarily due to the additional valuation allowance required on net operating loss carryforwards not expected to be utilized, partially offset by the release from the utilization of a capital loss carryforward. The following table sets forth the change in the uncertain tax positions, excluding interest and penalties:
| For the years ended June 30, |
| 2022 |  | 2021 |  | 2020 |
| (in millions) |
Balance, beginning of year | $ | 30 |  |  | $ | 73 |  |  | $ | 94 |  |
Additions for prior year tax positions | 1 |  |  | — |  |  | 1 |  |
Additions for current year tax positions | 2 |  |  | 2 |  |  | 2 |  |
Reduction for prior year tax positions | (5) |  | (a) | (45) |  | (a) | (24) |  | (a)
Balance, end of year | $ | 28 |  |  | $ | 30 |  |  | $ | 73 |  |
(a) | The reduction for prior year tax positions in fiscal 2022 of $5 million is primarily from the expiration of statutes of limitations. The reduction for prior year tax positions in fiscal 2021 includes $31 million from the settlement of audits and $14 million from the expiration of statutes of limitations. The reduction for prior year tax positions in fiscal 2020 includes $21 million from the expiration of statutes of limitations.
The Company recognizes interest and penalty charges related to uncertain tax positions as income tax (expense) benefit. The Company recorded liabilities for accrued interest of $11 million as of June 30, 2022 and 2021 and the amounts of interest income/expense recorded in each of fiscal 2022, 2021 and 2020 were not material. The Company is subject to tax primarily in various domestic jurisdictions and, as a matter of ordinary course, the Company is regularly audited by federal and state tax authorities. The Company believes it has appropriately accrued for the expected outcome of all pending tax matters and does not anticipate that the resolution of these pending tax matters will have a material adverse effect on its consolidated financial condition, future results of operations or liquidity. The net decrease to the balance of uncertain tax positions in fiscal 2022 is primarily attributable to state matters. The Company does not expect significant changes to these positions over the next 12 months. As of June 30, 2022 and 2021, $22 million and $24 million, respectively, would affect the Company's effective income tax rate if the Company's position with respect to the uncertainties is sustained.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI https://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI https://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
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