Fox CorpFOXA
Fox Corp Income Taxes Disclosure
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, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| (in millions) | |||||||||||||||||
| U.S. | |||||||||||||||||
| Federal | $ | 429 | $ | 300 | $ | 127 | |||||||||||
| State, local and other | 175 | 47 | 35 | ||||||||||||||
| Total current | 604 | 347 | 162 | ||||||||||||||
| Deferred | 164 | 203 | 321 | ||||||||||||||
| Provision for income taxes | $ | 768 | $ | 550 | $ | 483 | |||||||||||
The following table is a reconciliation of income tax computed at the statutory rate to income tax expense:
For the years ended June 30, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| U.S. federal income tax rate | 21 | % | 21 | % | 21 | % | |||||||||||
| State and local taxes | 3 | 4 | 4 | ||||||||||||||
| Effect of enacted tax law changes | — | (2) | 1 | ||||||||||||||
| Valuation allowance movement | — | 2 | 2 | ||||||||||||||
| Nondeductible compensation | 1 | 1 | — | ||||||||||||||
| Effective tax rate | 25 | % | 26 | % | 28 | % | |||||||||||
The following is a summary of the components of the deferred tax accounts:
As of June 30, | |||||||||||
| 2025 | 2024 | ||||||||||
| (in millions) | |||||||||||
| Deferred tax assets | |||||||||||
Basis difference(a) | $ | 2,288 | $ | 2,645 | |||||||
| Operating lease liabilities | 210 | 232 | |||||||||
| Sports rights contracts | 90 | — | |||||||||
| Net operating loss carryforwards | 48 | 38 | |||||||||
| Tax credit carryforwards | 45 | 96 | |||||||||
| Equity-based compensation | 44 | 39 | |||||||||
| Other | 339 | 238 | |||||||||
| Total deferred tax assets | 3,064 | 3,288 | |||||||||
| Deferred tax liabilities | |||||||||||
| Operating lease ROU assets | (198) | (220) | |||||||||
| Accrued liabilities | (10) | (24) | |||||||||
| Pension benefit obligations | — | (19) | |||||||||
| Sports rights contracts | — | (33) | |||||||||
| Total deferred tax liabilities | (208) | (296) | |||||||||
| Net deferred tax asset before valuation allowance | 2,856 | 2,992 | |||||||||
| Less: valuation allowance | (140) | (119) | |||||||||
Total net deferred tax assets(b) | $ | 2,716 | $ | 2,873 | |||||||
(a) | As a result of the Transaction (See Note 14—Commitments and Contingencies under the heading "Other"), 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 remaining estimated deferred tax asset recorded as a result of the additional tax basis. | ||||
(b) | Includes a $5 million deferred tax liability recorded in Other liabilities in the Balance Sheets as of June 30, 2025 and 2024. | ||||
As of June 30, 2025, the Company had $48 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. As of June 30, 2025, the Company has $45 million of tax credit carryforwards primarily attributable to the corporate alternative minimum tax credit which can be carried forward indefinitely.
The net increase in the valuation allowance to $140 million as of June 30, 2025 was primarily due to the additional valuation allowance required on tax attributes.
The following table sets forth the change in the uncertain tax positions, excluding interest and penalties:
For the years ended June 30, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| (in millions) | |||||||||||||||||
| Balance, beginning of year | $ | 26 | $ | 26 | $ | 28 | |||||||||||
Additions for prior year tax positions(a) | 26 | 6 | 2 | ||||||||||||||
| Additions for current year tax positions | — | — | 2 | ||||||||||||||
Reduction for prior year tax positions(b) | (2) | (6) | (6) | ||||||||||||||
| Balance, end of year | $ | 50 | $ | 26 | $ | 26 | |||||||||||
(a) | The additions for prior year tax positions in fiscal 2025 is primarily due to federal tax matters related to the corporate alternative minimum tax. The additions for prior year tax positions in fiscal 2024 is primarily due to the impact of state tax law changes. | ||||
(b) | The reduction for tax positions was primarily due to audit settlements or 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 $15 million and $12 million as of June 30, 2025 and 2024, respectively, and the amounts of interest income/expense recorded in each of fiscal 2025, 2024 and 2023 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 movement in the balance of uncertain tax positions in fiscal 2025 is primarily attributable to federal tax matters. The Company does not expect significant changes to these positions over the next 12 months. As of June 30, 2025 and 2024, $20 million would affect the Company’s effective income tax rate if the Company’s position with respect to the uncertainties is sustained.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Aug 6, 2025 | Showing above |
| 2024 | Aug 8, 2024 | |
| 2023 | Aug 11, 2023 | |
| 2022 | Aug 12, 2022 | |
| 2021 | Aug 10, 2021 | |
| 2020 | Aug 10, 2020 | |
| 2019 | Aug 9, 2019 | |
About Income Taxes Disclosures
The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.
Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.