You won’t hear it from the honchos in Rupert Murdoch’s print empire, but the new News Corporation only turned a loss into a profit in 2013-14 by mining its store of fat and juicy tax losses in Australia, the United Kingdom and United States.

You’ll find buried in the 2013-14 News Corp annual report what amounts to an insurance policy for the company: over US$5 billion of carry-forward tax losses and deferred tax assets … and a couple of revelations that throw a different light on protestations from local executives of the Murdoch print empire about how things are on the up.

The most elusive question in the News Corp accounts, here and offshore, is just how much News Corp earned in 2013-14. The News annual results release and annual report says the company had segment EBITDA (earnings before interest, tax, depreciation and amortisation) of US$770 million, against EBITDA in 2012-13 of US$688 million, so there was an apparent improvement in the year to June 2014.

But page 48 of the 2013-14 annual report revealed that News Corp in fact had a “loss before income tax benefit” of US$397 million against “income before tax benefit” of US$173 million in the year to June 2013.

Net income for the 2013-14 year reported in the annual report of US$239 million (which was actually US$2 million more than reported in the results release) was enabled by a “tax benefit” of US$691 million against one of US$374 million in 2012-13, which helped produce net income for that year of US$506 million.

The benefit in the 2013-14 figures was of course part of the big win the old News Corp had over the Australian Tax Office. The net figure for the new News Corp was around US$721 million, according to the accounts, under a deal struck as part of its spin-off from 21st Century Fox.

Which brings us to the discovery of the real treasures in the accounts of News Corp Australia and News Corp (HQ in New York). Carry forward tax losses of an indefinite kind (which means they can never disappear) for both operating income (from day-to-day business) and capital (covering the sale of assets at a profit). These are tax gold. The ultimate income profit shelter.

As of June 30, 2014, the company had approximately US$1.1 billion of net operating loss carry-forwards available to offset future taxable income in various jurisdictions, including US$213 million in Australia and US$509 million in the UK, both of which can be carried forward indefinitely, US$324 million in various other foreign jurisdictions of which US$30 million are subject to various expiration periods, and US$13 million in various US jurisdictions subject to varying expiration periods.

The company recorded deferred tax assets — an asset on a company’s balance sheet that may be used to reduce any subsequent period’s income tax expense — of US$262 million and US$275 million as of June 30, 2014 and 2013, respectively. Of course to use these tax losses, News has to turn a profit in Australia and the UK, and the jury is still out there.

But dig a little further and you find the biggest gold bar of all: as of June 30, 2014, the company had approximately US$2.3 billion and US$2.1 billion of capital loss carry-forwards in Australia and the UK, respectively, which may be carried forward indefinitely. Realisation of such capital losses is dependent on the generation of capital gain taxable income and in certain cases, meeting certain continuity of business requirements in order to use such losses. The company has recorded a deferred tax asset of US$1.1 billion as of June 30, 2013 and the same amount on June 30, 2014.

If it needed to sell, say, Fox Sports Australia, any profits would be sheltered. But it is hard to see what could be sold in the UK to generate a profit that would be sheltered by the provision in the UK accounts. To that extent the capital loss carry-forwards aren’t an asset at all because they can’t be used — it’s an accounting illusion.

It’s almost like an “earnings supermarket”, with a result for every occasion. This is a tax planner’s paradise — so many definitions of income to play with, so many “adjustments”, so many tax benefits with which to balance and/or polish the numbers so they say profit on the bottom line of choice. And all within the relevant accounting standards.

And then we get to the great unmentionable for News Corp Australia management and other parts of the News Corp empire — the chance of future impairments. A close reading of the accounts shows that there is US$1.7 billion of goodwill at risk of impairment in specified conditions (a 100-basis-point increase in the discount rate, or a 400 basis point decrease in the projected cash flows terminal growth rate), and News Corp Australia or the Amplify digital education business are the most likely candidates as Crikey wrote here last week. So if interest rates rise or the amount of cash in these businesses falls because of declining revenues and high costs then out comes the axe and down goes the value of the businesses in the accounts, plus other unquantifiable costs. Best bet is that Amplify goes first.

But it does help explain why, suddenly, there’s a sense of urgency at Holt Street about a future new plan for the business, according to stand-in CEO, Julian Clarke. Might that force him to follow the hated Kim Williams down the path of hacking and slashing (in a nice, genteel Melbourne-establishment way)?