NOTE 10. GOODWILL AND OTHER INTANGIBLE ASSETS
The changes in the carrying values of the Company's intangible assets and related accumulated amortization were as follows:
| Amortizable Intangible | ||||||||||||||||||||||
| Intangible Assets Not Subject to Amortization | Assets, Net | |||||||||||||||||||||
| Other | Total | |||||||||||||||||||||
| Total | Film | Intangible | Total | Intangible | ||||||||||||||||||
| FCC | Continuing | Library, | Assets, | Continuing | Discontinued | Assets, | ||||||||||||||||
| Licenses | Other | Operations | Net(a) | Net(b) | Operations | Operations | Net | |||||||||||||||
| (in millions) | ||||||||||||||||||||||
| Balance, June 30, 2012 | $ | 2,404 | $ | 1,025 | $ | 3,429 | $ | 397 | $ | 773 | $ | 1,170 | $ | 2,534 | $ | 7,133 | ||||||
| Acquisitions | 60 | - | 60 | - | 674 | 674 | - | 734 | ||||||||||||||
| Foreign exchange | - | - | - | - | (4) | (4) | - | (4) | ||||||||||||||
| Amortization | - | - | - | (31) | (152) | (183) | - | (183) | ||||||||||||||
| Dispositions | (66) | - | (66) | - | (16) | (16) | - | (82) | ||||||||||||||
| Separation of News Corp | - | - | - | - | - | - | (2,534) | (2,534) | ||||||||||||||
| Balance, June 30, 2013 | $ | 2,398 | $ | 1,025 | $ | 3,423 | $ | 366 | $ | 1,275 | $ | 1,641 | $ | - | $ | 5,064 | ||||||
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 | |||||||
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 business combination. That is, the estimated fair value of the reporting unit is allocated to all of the assets and liabilities of that unit (including any unrecognized intangible assets) as if the reporting unit had been acquired in a business combination and the estimated fair value of the reporting unit was the purchase price paid. The implied fair value of the reporting unit's goodwill is compared with the carrying amount of that goodwill. If the carrying amount of the reporting unit's goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to that excess.
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 historical performance in each market and estimates of future performance in each market.
Fiscal 2013 and 2012
During fiscal 2012, the Company recorded a non-cash goodwill impairment charge of $201 million reflecting the pending sale of a business in its Digital Media Group below its carrying value. During fiscal 2013, the Company recorded an additional goodwill impairment charge of $35 million related to this business, which was sold in fiscal 2013.
Other than the fiscal 2013 impairment noted above, the Company determined that the goodwill and indefinite-lived intangible assets included in the consolidated balance sheets were not impaired.
Fiscal 2011
In fiscal 2011, the Company performed an interim impairment review of its Digital Media Group reporting unit's goodwill as a result of lower than expected earnings and cash flows relative to the assumptions utilized in its fiscal 2010 annual impairment review, as well as the organizational restructuring at this reporting unit. As a result of the review performed, the Company recorded a non-cash goodwill impairment charge of $168 million in the fiscal year ended June 30, 2011.