NOTE 3. IMPAIRMENT AND RESTRUCTURING CHARGES

Fiscal 2018

During the three and nine months ended March 31, 2018, the Company recorded restructuring charges of $21 million and $48 million, respectively, of which $13 million and $38 million, respectively, related to the News and Information Services segment. The restructuring charges recorded in fiscal 2018 were primarily for employee termination benefits.

During the three and nine months ended March 31, 2018, the Company recognized non-cash impairment charges of $225 million primarily related to the impairment of goodwill and intangible assets at the News America Marketing reporting unit and impairment of goodwill at the FOX SPORTS Australia reporting unit.

The Company recognized a $165 million non-cash impairment of goodwill and indefinite-lived intangible assets at its News America Marketing reporting unit. Due to the impact of adverse trends on the future expected performance of the business, the Company revised its future outlook which resulted in a reduction in expected future cash flows. Based on the revised projections, the Company determined that the fair value of the reporting unit was less than its carrying value. The assumptions utilized in the income approach valuation method were discount rates (ranging from 12.5%-14%), long-term growth rates (ranging from (1.9%)-0.9%) and a royalty rate of 2.5%.

The Company recognized a $41 million non-cash impairment of goodwill at its FOX SPORTS Australia reporting unit. In the third quarter of fiscal 2018, as part of the Company’s long range planning process and in preparation for a potential transaction with Telstra Corporation Limited (“Telstra”) to combine Foxtel and FOX SPORTS Australia (the “Transaction”), the Company assessed the long-term prospects for Foxtel and FOX SPORTS Australia. As a result of lower-than-expected revenues at Foxtel, the Company revised its future outlook for FOX SPORTS Australia whose revenues are heavily predicated on Foxtel subscribers. Based on the revised projections, the Company determined that the fair value of the reporting unit was less than its carrying value. The assumptions utilized in the income approach valuation method were a discount rate of 9.5% and a long-term growth rate of 2.0%. See Note 4—Investments.

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.

During the nine months ended March 31, 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 in the second quarter of fiscal 2017. 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. The assumptions utilized in the income approach valuation method were a discount rate of 11.5% and no long-term growth.

Changes in restructuring program liabilities were as follows:


	For the three months ended March 31,
	2018												2017
	One time												One time
	employee			Facility									employee			Facility
	termination			related									termination			related
	benefits			costs			Other costs			Total			benefits			costs		Other costs		Total
	(in millions)
Balance, beginning of period	$	22		$	4		$	10		$	36		$	41		$	5	$	6	$	52
Additions		21			—			—			21			21			—		—		21
Payments		(22	)		—			—			(22	)		(33	)		—		—		(33	)
Other		3			—			—			3			—			—		—		—

Balance, end of period	$	24		$	4		$	10		$	38		$	29		$	5	$	6	$	40


	For the nine months ended March 31,
	2018												2017
	One time												One time
	employee			Facility									employee			Facility
	termination			related									termination			related
	benefits			costs			Other costs			Total			benefits			costs		Other costs		Total
	(in millions)
Balance, beginning of period	$	33		$	6		$	10		$	49		$	33		$	5	$	6	$	44
Additions		47			—			1			48			88			—		—		88
Payments		(60	)		(1	)		(1	)		(62	)		(91	)		—		—		(91	)
Other		4			(1	)		—			3			(1	)		—		—		(1	)

Balance, end of period	$	24		$	4		$	10		$	38		$	29		$	5	$	6	$	40

As of March 31, 2018, restructuring liabilities of approximately $27 million were included in the Balance Sheet in Other current liabilities and $11 million were included in Other non-current liabilities.