Property, Plant and Equipment

12 Months Ended

Jun. 30, 2017

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment

NOTE 7. PROPERTY, PLANT AND EQUIPMENT

	Useful Lives		As of June 30,
			2017			2016
			(in millions)
Land			$	153		$	153
Buildings and leaseholds		3 to 50 years		1,733			1,793
Machinery and equipment(a)		3 to 40 years		2,985			2,872
				4,871			4,818
Less: accumulated depreciation and amortization(b)				(3,339	)		(2,524	)
				1,532			2,294
Construction in progress				92			111
Total Property, plant and equipment, net			$	1,624		$	2,405

^(a)  Includes capitalized software of approximately $997 million and $950 million as of June 30, 2017 and 2016, respectively.

^(b)  Includes accumulated amortization of capitalized software of approximately $691 million and $498 million as of June 30, 2017 and 2016, respectively.

Depreciation and amortization related to property, plant and equipment was $358 million, $415 million, and $407 million for the fiscal years ended June 30, 2017, 2016 and 2015, respectively. This includes amortization of capitalized software of $168 million, $194 million and $169 million for the fiscal years ended June 30, 2017, 2016 and 2015, respectively.

Total operating lease expense was approximately $156 million, $164 million and $195 million for the fiscal years ended June 30, 2017, 2016 and 2015, respectively.

Fixed Asset Impairment

During the fiscal year ended June 30, 2017, the Company recognized total fixed asset impairment charges of $679 million, primarily at News UK and News Corp Australia.

During the fourth quarter of fiscal 2017, as part of the Company’s long-range planning process, the Company reduced its outlook for the U.K. newspapers due to the impact of adverse print advertising and print circulation trends on the future expected performance of the business. As a result, the Company recognized a non-cash impairment charge of approximately $360 million related to the write-down of fixed assets at the U.K. newspapers. The write-down was comprised of approximately $252 million related to print sites, $85 million related to printing presses and print related equipment and $23 million related to capitalized software. Significant unobservable inputs utilized in the income approach valuation method were a discount rate of 8.5% and a -1.0% long term growth rate.

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.