Goodwill and Intangible Assets, Net

12 Months Ended

Jun. 30, 2020

Goodwill And Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets, Net

NOTE 8. GOODWILL AND INTANGIBLE ASSETS, NET

The changes in the carrying values of the Company’s intangible assets and related accumulated amortization were as follows:

	Intangible assets not subject to amortization
	FCC licenses			Other		Total			Amortizable intangible assets, net(a)			Total intangible assets, net
	(in millions)
Balance, June 30, 2019	$	2,167		$	642	$	2,809		$	42		$	2,851
Acquisitions(b)		113			-		113			300			413
Disposals(b)		(30	)		-		(30	)		-			(30	)
Amortization		-			-		-			(36	)		(36	)
Balance, June 30, 2020	$	2,250		$	642	$	2,892		$	306		$	3,198

^(a) Net of accumulated amortization of $165 million and $129 million as of June 30, 2020 and 2019, respectively. The average useful life of amortizable intangible assets ranges from three to 20 years.

^(b) See Note 3—Acquisitions, Disposals and Other Transactions under the heading “Acquisitions and Disposals.”

Amortization related to finite-lived intangible assets was $36 million, $15 million and $14 million for fiscal 2020, 2019 and 2018, respectively.

Based on the current balance of finite-lived intangible assets, the estimated amortization expense for each of the succeeding five fiscal years is as follows:

	For the years ending June 30,
	2021		2022		2023		2024		2025
	(in millions)
Estimated amortization expense(a)	$	61	$	52	$	48	$	31	$	26

^(a) These amounts may vary as acquisitions and dispositions occur in the future.

The changes in the carrying value of goodwill, by segment, are as follows:

	Cable Network Programming		Television			Other, Corporate and Eliminations		Total Goodwill
	(in millions)
Balance, June 30, 2019	$	987	$	1,704		$	-	$	2,691
Acquisitions(a)		45		462			222		729
Disposals(a)		-		(11	)		-		(11	)
Balance, June 30, 2020	$	1,032	$	2,155		$	222	$	3,409

^(a) See Note 3—Acquisitions, Disposals and Other Transactions under the heading “Acquisitions and Disposals.”

The carrying amount of Television segment goodwill was net of accumulated impairments of $371 million as of June 30, 2020 and 2019.

Annual Impairment Review

Goodwill

If the Company determines it is more likely than not that the fair value of a reporting unit is less than its carrying amount after a qualitative assessment, the Company performs a quantitative impairment test to calculate the fair value of the reporting unit and compare it with its carrying amount, including goodwill. In performing the quantitative assessment, the Company determines the fair value of a reporting unit primarily by using discounted cash flow analysis and market-based valuation approach methodologies. Determining fair value requires the exercise of significant judgments, including judgments about appropriate discount rates, long-term growth rates, company earnings multiples and relevant comparable transactions, as applicable, and the amount and timing of expected future cash flows. The cash flows employed in the analyses are based on the Company’s estimated outlook and various growth rates have been assumed for years beyond the long-term business plan period. Discount rate assumptions are based on an assessment of the risk inherent in the future cash flows of the respective reporting units. In assessing the reasonableness of its determined fair values, the Company evaluates its results against other value indicators, such as comparable public company trading values. If the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is not impaired. If the carrying amount of a reporting unit exceeds its fair value, an impairment loss is recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit.

FCC licenses

The Company performs impairment reviews consisting of a comparison of the estimated fair value of the Company’s FCC licenses with their carrying amount on a station-by-station basis using a discounted cash flow valuation method, assuming a hypothetical start-up scenario for a broadcast station in each of the markets the Company operates in. The significant assumptions used are the discount rate and terminal growth rates and operating margins, as well as industry data on future advertising revenues in the markets where the Company owns television stations. These assumptions are based on actual third-party historical performance and estimates of future performance in each market.

Fiscal 2020 and 2019

During fiscal 2020 and 2019, the Company determined that the goodwill and indefinite-lived intangible assets included in the Balance Sheets as of June 30, 2020 and 2019, respectively, were not impaired.