Twenty-First Century Fox 2013 Annual Report Download - page 122

TWENTY-FIRST CENTURY FOX, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Amortization related to amortizable intangible assets, net was $183 million, $126 million and $110 million
for the fiscal years ended June 30, 2013, 2012 and 2011, respectively.
Based on the current amount of amortizable intangible assets, net, the estimated amortization expense for
each of the succeeding five fiscal years is as follows: 2014—$303 million; 2015—$275 million; 2016—$259
million; 2017—$235 million; and 2018—$226 million. These amounts may vary as acquisitions and disposals
occur in the future and as purchase price allocations are finalized.
The changes in the carrying value of goodwill, by segment, are as follows:
Cable
Network
Programming Television Filmed
Entertainment
Direct
Broadcast
Satellite
Television
Other,
Corporate
and
Eliminations Discontinued Operations Total Goodwill
(in millions)
Balance, June 30, 2012 . . . . . . . $6,494 $1,909 $1,557 $ 554 $ 72 $ 2,588 $13,174
Acquisitions . . . . . . . . . . . . . . . . 1,169 — — 5,623 — — 6,792
Foreign exchange movements . . — — (15) (125) — — (140)
Dispositions . . . . . . . . . . . . . . . . — (27) (5) — (6) — (38)
Impairments (a) .............. — — — — (35) — (35)
Adjustments (b) .............. 90 — — — — — 90
Separation of News Corp . . . . . . — — — — — (2,588) (2,588)
Balance, June 30, 2013 . . . . . . . $7,753 $1,882 $1,537 $6,052 $ 31 $ — $17,255
(a) The carrying amount of goodwill at June 30, 2013 and 2012 included accumulated impairments of $371
million and $1,170 million, respectively.
(b) Adjustments relate to the final purchase price allocations of FSLA.
The increase in the carrying value of Goodwill during fiscal 2013 was primarily due to the consolidation of
Sky Deutschland at the Direct Broadcast Satellite Television segment and the consolidation of Fox Sports Asia
and the acquisitions of EMM and SportsTime Ohio at the Cable Network Programming segment.
Annual Impairment Review
The Company’s goodwill impairment reviews are determined using a two-step process. The first step of the
process is to compare the fair value of a reporting unit with its carrying amount, including goodwill. In
performing the first step, the Company determines the fair value of a reporting unit by primarily using a
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, relevant comparable company earnings multiples 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 and the second step of the impairment review is
not necessary. If the carrying amount of a reporting unit exceeds its fair value, the second step of the goodwill
impairment review is required to be performed to estimate the implied fair value of the reporting unit’s goodwill.
The implied fair value of goodwill is determined in the same manner as the amount of goodwill recognized in a
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