Intangible Assets and Goodwill

Intangible assets consist of the following:



June 30,	2017							2016
(In thousands)	Gross Amount		Accumulated Amortization			Net Amount		Gross Amount		Accumulated Amortization			Net Amount
Intangible assets subject to amortization
National media
Advertiser relationships	$	18,610	$	(15,514	)	$	3,096	$	18,610	$	(10,670	)	$	7,940
Customer lists	7,280		(3,395		)	3,885		5,230		(4,310		)	920
Other	22,325		(9,850		)	12,475		19,425		(8,685		)	10,740
Local media
Network affiliation agreements	229,309		(142,216		)	87,093		229,309		(135,789		)	93,520
Retransmission agreements	27,923		(10,700		)	17,223		21,229		(6,993		)	14,236
Other	1,680		(472		)	1,208		1,214		(419		)	795
Total	$	307,127	$	(182,147	)	124,980		$	295,017	$	(166,866	)	128,151
Intangible assets not subject to amortization
National media
Internet domain names						7,827							7,827
Trademarks						147,915							153,215
Local media
FCC licenses						675,161							624,684
Total						830,903							785,726
Intangible assets, net						$	955,883						$	913,877

Amortization expense was $19.1 million in fiscal 2017, $19.7 million in fiscal 2016, and $17.6 million in fiscal 2015. Future amortization expense for intangible assets is expected to be as follows: $17.2 million in fiscal 2018, $14.6 million in fiscal 2019, $13.8 million in fiscal 2020, $9.7 million in fiscal 2021, and $7.3 million in fiscal 2022. Actual future amortization expense could differ from these estimates as a result of future acquisitions, dispositions, and other factors.

Due to continued weakness in the Mywedding.com revenue forecasts and a lack of sales growth from recent brand support efforts, the annual impairment analysis performed as of May 31, 2017, of the Mywedding trademark indicated an impairment. As such, during fiscal 2017, the national media segment recorded a non-cash impairment charge of $5.3 million to fully impair the Mywedding trademark. During fiscal 2016, the Company recorded a non-cash impairment charge of $38.9 million on the national media segment's American Baby trademark. Management determined that this trademark was fully impaired as part of management's decision to discontinue the use of the American Baby brand following its combination with the Fit Pregnancy brand. These impairment charges are recorded in the impairment of goodwill and other long-lived assets line in the Consolidated Statements of Earnings.

Changes in the carrying amount of goodwill were as follows:



(In thousands)	National Media			Local Media		Total
Balance at June 30, 2015
Goodwill	$	932,471		$	68,775	$	1,001,246
Accumulated impairment losses	—			—		—
	932,471			68,775		1,001,246
Acquisitions	(1,168		)	—		(1,168		)
Impairment	(116,949		)	—		(116,949		)
	(118,117		)	—		(118,117		)
Balance at June 30, 2016
Goodwill	931,303			68,775		1,000,078
Accumulated impairment losses	(116,949		)	—		(116,949		)
	814,354			68,775		883,129
Acquisitions	12,500			11,829		24,329
Balance at June 30, 2017
Goodwill	943,803			80,604		1,024,407
Accumulated impairment losses	(116,949		)	—		(116,949		)
	$	826,854		$	80,604	$	907,458

During fiscal 2017, the Company performed a qualitative assessment of the local media reporting unit during its annual impairment review as of May 31, 2017, and concluded that it is not more likely than not that the fair value of the Company's local media reporting unit is less than its carrying amount. Therefore, the quantitative goodwill impairment test for the local media reporting unit was not necessary in fiscal 2017.

The national media segment is comprised of two reporting units, the magazine brands reporting unit, which has $772.0 million of goodwill, and the MXM reporting unit, which has $54.9 million of goodwill at June 30, 2017.

As of May 31, 2017, the fair value of the magazine brands reporting unit exceeded its net assets by approximately 30 percent. The fair value of the magazine brands reporting unit assumes a discount rate of 9.5 percent. Assumed revenue growth rates range from approximately flat to up 2.0 percent. The assumed terminal growth rate is 2.0 percent. These assumptions are contingent upon a stable economic environment, continuing strong consumer engagement, and a continuing shift to digital platforms. Holding other assumptions constant, a 100 basis point increase in the discount rate would result in an estimated fair value that exceeds net assets by 17 percent. Holding other assumptions constant, a 100 basis point decrease in the terminal growth rate would result in an estimated fair value that exceeds net assets by 22 percent. Both of these scenarios individually indicate no impairment in the magazine brands reporting unit.

As of May 31, 2017, the fair value of the MXM reporting unit exceeded its net assets by nearly 80 percent. The fair value of the MXM reporting unit assumes a discount rate of 12 percent, near term revenue growth rates ranging from 2.5 percent to 5.0 percent, and a terminal growth rate of 2.5 percent. These assumptions are contingent upon a stable economic environment and either retaining or replacing key customers. Holding other assumptions constant, a 100 basis point increase in the discount rate would result in an estimated fair value that exceeds net assets by 62 percent. Holding other assumptions constant, a 100 basis point decrease in the terminal growth rate would result in an estimated fair value that exceeds net assets by more than 61 percent. Both of these scenarios individually indicate no impairment in the MXM reporting unit.

Meredith completed annual impairment reviews of goodwill and intangible assets with indefinite lives for the local media reporting unit and the magazine brands reporting unit as of May 31, 2016. No impairments were recorded as a result of these reviews.

In fiscal 2016, the Company determined that triggering events, including reduced operating and cash flow forecasts, required us to perform an evaluation of goodwill for the MXM reporting unit for impairment. Due to the timing of the triggering events, this testing was performed in conjunction with the Company's annual impairment testing as of May 31, 2016. This evaluation indicated that the carrying value of MXM's goodwill exceeded its estimated fair value. As a result, the Company recorded a pre-tax non-cash impairment charge of $116.9 million to reduce the carrying value of MXM's goodwill in fiscal 2016. The Company recorded an income tax benefit of $9.5 million related to this charge. This impairment charge is recorded in the impairment of goodwill and other long-lived assets line in the Consolidated Statements of Earnings.

Meredith completed an annual impairment reviews of goodwill and intangible assets with indefinite lives as of May 31, 2015. No impairments were recorded as a result of this review.