Impairment and Restructuring Charges

9 Months Ended

Mar. 31, 2019

Restructuring and Related Activities [Abstract]

Impairment and Restructuring Charges

NOTE 4. IMPAIRMENT AND RESTRUCTURING CHARGES

Fiscal 2019

During the three and nine months ended March 31, 2019, the Company recorded restructuring charges of $25 million and $62 million, respectively, of which $23 million and $55 million, respectively, related to the News and Information Services segment. The restructuring charges recorded in fiscal 2019 were for employee termination benefits.

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. 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 5—Investments.

Changes in restructuring program liabilities were as follows:

	For the three months ended March 31,
	2019											2018
	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	$	20		$	2	$	11		$	33		$	22		$	4	$	10	$	36
Additions		25			—		—			25			21			—		—		21
Payments		(17	)		—		(1	)		(18	)		(22	)		—		—		(22	)
Other		—			—		—			—			3			—		—		3
Balance, end of period	$	28		$	2	$	10		$	40		$	24		$	4	$	10	$	38

	For the nine months ended March 31,
	2019											2018
	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	$	29		$	2	$	11		$	42		$	33		$	6		$	10		$	49
Additions		62			—		—			62			47			—			1			48
Payments		(61	)		—		(2	)		(63	)		(60	)		(1	)		(1	)		(62	)
Other		(2	)		—		1			(1	)		4			(1	)		—			3
Balance, end of period	$	28		$	2	$	10		$	40		$	24		$	4		$	10		$	38

As of March 31, 2019, restructuring liabilities of approximately $30 million were included in the Balance Sheets in Other current liabilities and $10 million were included in Other non-current liabilities.