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IHEARTCOMMUNICATIONS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
82
start-up costs for that market exceeding market value. During 2012, the Company recognized a $35.9 million impairment charge
related to billboard permits in certain markets due to a change in the Company’s forecast of revenue growth within the markets. There
was no impairment of FCC licenses during 2012.
Other Intangible Assets
Other intangible assets include definite-lived intangible assets and permanent easements. The Company’s definite-lived intangible
assets include primarily transit and street furniture contracts, talent and representation contracts, customer and advertiser relationships,
and site-leases, all of which are amortized over the respective lives of the agreements, or over the period of time the assets are
expected to contribute directly or indirectly to the Company’s future cash flows. Permanent easements are indefinite-lived intangible
assets which include certain rights to use real property not owned by the Company. During 2014, the Company recognized a $3.4
million impairment charge to easements in three markets primarily due to declining revenue forecasts. There were no impairments of
other intangible assets for the years ended December 31, 2013 and 2012.
The following table presents the gross carrying amount and accumulated amortization for each major class of other intangible assets at
December 31, 2014 and 2013, respectively:
(In thousands)
December 31, 2014
December 31, 2013
Gross Carrying
Amount
Accumulated
Amortization
Gross Carrying
Amount
Accumulated
Amortization
Transit, street furniture and other outdoor
contractual rights
$
716,723
$
(476,523)
$
777,521
$
(464,548)
Customer / advertiser relationships
1,222,518
(765,596)
1,212,745
(645,988)
Talent contracts
319,384
(223,936)
319,617
(195,403)
Representation contracts
238,313
(206,338)
252,961
(200,058)
Permanent easements
171,271
-
173,753
-
Other
388,160
(177,249)
387,405
(151,459)
Total
$
3,056,369
$
(1,849,642)
$
3,124,002
$
(1,657,456)
Total amortization expense related to definite-lived intangible assets was $263.4 million, $289.0 million and $300.0 million for the
years ended December 31, 2014, 2013 and 2012, respectively.
As acquisitions and dispositions occur in the future, amortization expense may vary. 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)
2015
$
2016
2017
2018
2019
Annual Impairment Test to Goodwill
The Company performs its annual impairment test on October 1 of each year. Each of the Company’s U.S. radio markets and outdoor
advertising markets are components. 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 using the guidance in
ASC 350-20-55. The Company also determined that within its Americas outdoor segment, Canada constitutes a separate reporting
unit and each country in its International outdoor segment constitutes a separate reporting unit.
The goodwill impairment test is a two-step process. The first step, used to screen for potential impairment, compares the fair value of
the reporting unit with its carrying amount, including goodwill. If applicable, the second step, used to measure the amount of the
impairment loss, compares the implied fair value of the reporting unit goodwill with the carrying amount of that goodwill.