Restructuring and Impairment Charges

6 Months Ended

Mar. 30, 2024

Restructuring and Related Activities [Abstract]

Restructuring and Related Activities Disclosure

Restructuring and Impairment Charges

Goodwill Impairments

In the second quarter of fiscal 2024, as a result of Star India assets and liabilities being classified as held for sale (see Note 4), they have been removed from the entertainment goodwill reporting units along with a proportional amount of goodwill. As a result, we evaluated the residual goodwill at our entertainment DTC services and linear networks reporting units for impairment. Star sports was a standalone reporting unit which did not have any goodwill.

The evaluation resulted in a $0.7 billion non-cash charge for impairment of goodwill at our entertainment linear networks reporting unit. Goodwill was not impaired at the entertainment DTC services reporting unit.

The impairment evaluation compares the reporting unit’s carrying value to its fair value, which is based on estimated discounted future cash flows. These future cash flows are based on internal forecasts, which consider projected inflation and other economic indicators, as well as industry growth projections. Significant judgments and assumptions in the discounted cash flow model relate to future revenues and certain operating expenses, terminal growth rates and discount rates. Discount rates are determined based on the inherent risks of the underlying operations. We believe our estimates are consistent with how a marketplace participant would value our reporting units.

In addition, we recorded a $1.3 billion non-cash goodwill impairment charge related to the Star India Transaction (see Note 4 for additional information). Both of these charges were recorded in “Restructuring and impairment charges” in the Condensed Consolidated Statements of Operations.

Other Restructuring

In the prior-year quarter ended April 1, 2023, the Company recognized restructuring charges of $152 million primarily for severance costs. The six months ended April 1, 2023 included charges of $221 million primarily for severance costs and costs related to exiting our businesses in Russia. These charges are recorded in “Restructuring and impairment charges” in the Condensed Consolidated Statements of Operations.