Property, Plant and Equipment

12 Months Ended

Jun. 30, 2019

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment

NOTE 7. PROPERTY, PLANT AND EQUIPMENT

	Useful Lives		As of June 30,
			2019			2018
			(in millions)
Land			$	146		$	150
Buildings and leaseholds		3 to 50 years		1,729			1,742
Digital set top units and installations		3 to 10 years		911			744
Machinery and equipment(a)		2 to 20 years		3,123			3,131
				5,909			5,767
Less: accumulated depreciation and amortization(b)				(3,524	)		(3,352	)
				2,385			2,415
Construction in progress				169			145
Total Property, plant and equipment, net			$	2,554		$	2,560

(a) Includes capitalized software of approximately $1,331 million and $1,189 million as of June 30, 2019 and 2018, respectively.

(b) Includes accumulated amortization of capitalized software of approximately $818 million and $734 million as of June 30, 2019 and 2018, respectively.

Depreciation and amortization related to property, plant and equipment was $533 million, $372 million and $358 million for the fiscal years ended June 30, 2019, 2018 and 2017, respectively. This includes amortization of capitalized software of $218 million, $175 million and $168 million for the fiscal years ended June 30, 2019, 2018 and 2017, respectively.

Total operating lease expense was approximately $195 million, $183 million and $156 million for the fiscal years ended June 30, 2019, 2018 and 2017, respectively.

Fixed Asset Impairments

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.