NOTE 4. IMPAIRMENT AND RESTRUCTURING CHARGES

Fiscal 2017

During the three and six months ended December 31, 2016, the Company recorded restructuring charges of $47 million and $67 million, respectively, of which $47 million and $66 million, respectively, related to the News and Information Services segment. The restructuring charges recorded in fiscal 2017 were for employee termination benefits. Additionally, in connection with a reorganization at Dow Jones, the Company expects to incur approximately $30 to $40 million in restructuring charges during the remainder of fiscal 2017. The reorganization is expected to reduce the Company’s costs by approximately $100 million on an annualized basis by the end of fiscal 2018.

During the three months ended December 31, 2016, the Company recognized a non-cash impairment charge of approximately $310 million primarily related to the write-down of fixed assets at the Australian newspapers. The write-down was a result of the impact of adverse trends on the future expected performance of the Australian newspapers, where revenue declines from continued weakness in the print advertising market accelerated during the quarter. The write-down is comprised of approximately $149 million related to printing presses and print-related equipment, $77 million related to facilities, $66 million related to capitalized software and $18 million related to tradenames. The remaining carrying value of the News Corp Australia long-lived assets is approximately $420 million, which consists primarily of approximately $375 million of fixed assets and $30 million of intangible assets. Significant unobservable inputs utilized in the income approach valuation method were a discount rate of 11.5% and assumed no long-term growth rate.

The Company continually evaluates whether current factors or indicators require the performance of an interim impairment assessment of goodwill, long-lived assets and investments. The valuation of goodwill and long-lived assets requires assumptions and estimates of many factors, including revenue and market growth, operating cash flows, market multiples and discount rates. In the quarter ended December 31, 2016, the Company revised its future outlook for a reporting unit within the News and Information Services segment due to the acceleration of declines in the global print advertising markets during the first half of fiscal 2017. As a result, the Company determined that this reporting unit has goodwill and indefinite-lived intangible assets that are considered to be at risk for future impairment because the fair value of the reporting unit exceeded its carrying value by less than 5% as of December 31, 2016. Significant unobservable inputs utilized in the income approach valuation method for this reporting unit and the related indefinite-lived intangible assets were discount rates (ranging from 9.0%-10.0%), long-term growth rates (ranging from 1.6%-3.0%) and royalty rates (ranging from 1.5%-2.5%). Significant unobservable inputs utilized in the market approach valuation method were EBITDA multiples from guideline public companies operating in similar industries and a control premium of 10%. Any decrease in the discount rate or projected cash flows terminal growth rate would have resulted in this reporting unit failing step one of the goodwill impairment analysis, and would have required the completion of step two of the goodwill impairment analysis. Including those reporting units disclosed in the 2016 Form 10-K, the News and Information Services and Cable Network Programming segments have reporting units with goodwill and indefinite-lived intangible assets of approximately $2.4 billion at December 31, 2016 that are at risk for future impairment, of which $1.9 billion related to the News and Information Services segment and $0.5 billion related to the Cable Network Programming segment.

Fiscal 2016

During the three and six months ended December 31, 2015, the Company recorded restructuring charges of $22 million and $39 million, respectively, of which $20 million and $32 million, respectively, related to the News and Information Services segment. The restructuring charges recorded in fiscal 2016 were primarily for employee termination benefits.

Changes in restructuring program liabilities were as follows:


	For the three months ended December 31,
	2016										2015
	One time employee termination benefits			Facility related costs		Other costs		Total			One time employee termination benefits			Facility related costs		Other costs		Total
	(in millions)
Balance, beginning of period	$	30		$	5	$	6	$	41		$	34		$	5	$	6	$	45
Additions		47			—		—		47			21			1		—		22
Payments		(36	)		—		—		(36	)		(28	)		—		—		(28	)
Other		—			—		—		—			—			—		—		—

Balance, end of period	$	41		$	5	$	6	$	52		$	27		$	6	$	6	$	39


	For the six months ended December 31,
	2016										2015
	One time employee termination benefits			Facility related costs		Other costs		Total			One time employee termination benefits			Facility related costs		Other costs		Total
	(in millions)
Balance, beginning of period	$	33		$	5	$	6	$	44		$	47		$	5	$	6	$	58
Additions		67			—		—		67			38			1		—		39
Payments		(58	)		—		—		(58	)		(54	)		—		—		(54	)
Other		(1	)		—		—		(1	)		(4	)		—		—		(4	)

Balance, end of period	$	41		$	5	$	6	$	52		$	27		$	6	$	6	$	39

As of December 31, 2016, restructuring liabilities of approximately $42 million were included in the Balance Sheet in Other current liabilities and $10 million were included in Other non-current liabilities.