iHeartMedia 2002 Annual Report Download - page 77

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(In thousands)
Total amortization expense from definite-lived intangible assets for the years ended December 31, 2002, 2001 and 2000 was $137.1 million,
$185.1 million and $108.6 million, respectively. The following table presents the Company’s estimate of amortization expense for each of the
five succeeding fiscal years for definite-lived intangible assets:
(In thousands)
As acquisitions and dispositions occur in the future and as purchase price allocations are finalized, amortization expense may vary.
I
ndefinite-lived Intangibles
Under the guidance in Statement 142, the Company’s FCC licenses and billboard permits are considered indefinite-lived intangibles. These
assets are not subject to amortization, but will be tested for impairment at least annually. Upon adopting Statement of Financial Accounting
Standards No. 141, Business Combinations, on July 1, 2001, the Company began to separately record acquired billboard permit values and
goodwill. Prior to adoption, the Company did not obtain appraised values for acquired billboard permits, as the Company did not record
acquired billboard permits separate from goodwill. The following table presents the carrying amount for each major class of indefinite-lived
intangible asset at December 31, 2002 and 2001:
(In thousands)
In accordance with Statement 142, the Company tested these indefinite-lived intangible assets for impairment as of January 1, 2002 by
comparing their fair value to their carrying value at that date. The test resulted in no impairment to the Company’s billboard permits. However,
the Company recognized impairment on its FCC licenses of approximately $6.0 billion, net of deferred tax of $3.7 billion, which was recorded
as a component of the cumulative effect of a change in accounting principle during the first quarter of 2002. The Company used the income
approach to value FCC licenses, which involved estimating future cash flows expected to be generated from the licenses, discounted to their
present value using a risk-adjusted discount rate. Terminal values were also estimated and discounted to their present value. In estimating
future cash flows, the Company took into account the economic slow down in the radio industry at the end of 2001, coupled with the economic
impact of the events of September 11th. The Company performed a subsequent impairment test at October 1, 2002, which resulted in no further
impairment charge.
2002 2001
Gross Carr
y
in
g
Accumulated Gross Carr
y
in
g
Accumulated
Amount Amortization Amount Amortization
Transit, street furniture, and other outdoor
contractual rights $600,221 $228,037 $548,952 $156,548
Talent contracts 212,326 112,259 275,064 138,739
Representation contracts 197,636 37,846 184,883 18,742
Other 219,410 89,723 213,893 94,457
Total $1,229,593 $467,865 $1,222,792 $408,486
2003 $125,161
2004 112,732
2005 97,778
2006 83,138
2007 55,725
2002 2001
FCC Licenses $11,738,947 $21,116,280
Billboard Permits 389,801 155,593
Total $12,128,748 $21,271,873