NOTE 4. IMPAIRMENT AND RESTRUCTURING CHARGES

Fiscal 2017

During the three and nine months ended March 31, 2017, the Company recorded restructuring charges of $21 million and $88 million, respectively, of which $19 million and $85 million, respectively, related to the News and Information Services segment. The restructuring charges recorded in fiscal 2017 were for employee termination benefits.

In connection with a reorganization at Dow Jones, the Company has incurred $28 million of restructuring expense through the nine months ended March 31, 2017 which are included in the restructuring charges discussed above. The Company expects to incur approximately $5 million to $15 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 second quarter of fiscal 2017, 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 second quarter. The write-down was 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. Significant unobservable inputs utilized in the income approach valuation method were a discount rate of 11.5% and no long-term growth.

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 increase in the discount rate or decrease in the projected cash flows terminal growth rate could have resulted in this reporting unit failing step one 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 March 31, 2017 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 nine months ended March 31, 2016, the Company recorded restructuring charges of $24 million and $63 million, respectively, of which $24 million and $56 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 March 31,
	2017										2016
	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	$	41		$	5	$	6	$	52		$	27		$	6	$	6	$	39
Additions		21			—		—		21			24			—		—		24
Payments		(33	)		—		—		(33	)		(17	)		—		—		(17	)

Balance, end of period	$	29		$	5	$	6	$	40		$	34		$	6	$	6	$	46


	For the nine months ended March 31,
	2017										2016
	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		88			—		—		88			62			1		—		63
Payments		(91	)		—		—		(91	)		(71	)		—		—		(71	)
Other		(1	)		—		—		(1	)		(4	)		—		—		(4	)

Balance, end of period	$	29		$	5	$	6	$	40		$	34		$	6	$	6	$	46

As of March 31, 2017, restructuring liabilities of approximately $31 million were included in the Balance Sheet in Other current liabilities and $9 million were included in Other non-current liabilities.