iHeartMedia 2010 Annual Report Download - page 78

CLEAR CHANNEL CAPITAL I, LLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
The Company performed its annual impairment test on its indefinite-lived intangible assets on October 1, 2010, which resulted in a
non-cash impairment charge of $5.3 million related to its indefinite-lived FCC licenses and permits. See Note 4 for further discussion.
The Company performed impairment tests during 2009 and 2008, which resulted in non-cash impairment charges of $935.6 million
and $1.7 billion, respectively, on its indefinite-lived FCC licenses and permits. See Note 4 for further discussion.
At least annually, the Company performs its impairment test for each reporting unit’s goodwill using a discounted cash flow model to
determine if the carrying value of the reporting unit, including goodwill, is less than the fair value of the reporting unit. The Company
identified its reporting units in accordance with ASC 350-20-55. The U.S. radio markets are aggregated into a single reporting unit
and the U.S. outdoor advertising markets are aggregated into a single reporting unit for purposes of the goodwill impairment test. The
Company also determined that within its Americas outdoor segment, Canada, Mexico, Peru, and Brazil constitute separate reporting
units and each country in its International outdoor segment constitutes a separate reporting unit.
The Company performed its annual goodwill impairment test on October 1, 2010, and recognized a non-cash impairment charge of
$2.1 million related to a specific reporting unit in its International outdoor segment. See Note 4 for further discussion.
The Company performed impairment tests during 2009 and 2008, and recognized non-cash impairment charges of $3.1 billion and
$3.6 billion, respectively. See Note 4 for further discussion.
N
onconsolidated Affiliates
In general, investments in which the Company owns 20 percent to 50 percent of the common stock or otherwise exercises significant
influence over the investee are accounted for under the equity method. The Company does not recognize gains or losses upon the
issuance of securities by any of its equity method investees. The Company reviews the value of equity method investments and
records impairment charges in the statement of operations as a component of “Equity in earnings (loss) of nonconsolidated affiliates”
for any decline in value that is determined to be other-than-temporary.
For the years ended December 31, 2010 and 2009, the Company recorded non-cash impairment charges of $8.3 million and $22.9
million, respectively, related to certain equity investments in its International outdoor segment.
Other Investments
Other investments are composed primarily of equity securities. These securities are classified as available-for-sale or trading and are
carried at fair value based on quoted market prices. Securities are carried at historical value when quoted market prices are
unavailable. The net unrealized gains or losses on the available-for-sale securities, net of tax, are reported in accumulated other
comprehensive loss as a component of shareholders’ equity. In addition, the Company holds investments that do not have quoted
market prices. The Company periodically assesses the value of available-for-sale and non-marketable securities and records
impairment charges in the statement of operations for any decline in value that is determined to be other-than-temporary. The average
cost method is used to compute the realized gains and losses on sales of equity securities.
The Company periodically assesses the value of its available-for-sale securities. Based on these assessments, the Company concluded
that other-than-temporary impairments existed at December 31, 2010, September 30, 2009 and December 31, 2008, and recorded
non-cash impairment charges of $6.5 million, $11.3 million and $116.6 million, respectively, during each of these years. Such
charges are recorded on the statement of operations in “Gain (loss) on marketable securities”.
69