3. GOODWILL AND RADIO BROADCASTING LICENSES:

Impairment Testing

In accordance with ASC 350, “Intangibles - Goodwill and Other,” we do not amortize our indefinite-lived radio broadcasting licenses and goodwill. Instead, we perform a test for impairment annually across all reporting units, or on an interim basis when events or changes in circumstances or other conditions suggest impairment may have occurred in any given reporting unit. Other intangible assets continue to be amortized on a straight-line basis over their useful lives. We perform our annual impairment test as of October 1 of each year. We evaluate all events and circumstances on an interim basis to determine if an interim indicator is present.

Valuation of Broadcasting Licenses

During the quarter ended March 31, 2020, the Company recorded a non-cash impairment charge of approximately $47.7 million associated with our Atlanta, Cincinnati, Dallas, Houston, Indianapolis, Philadelphia, Raleigh, Richmond and St. Louis radio market broadcasting licenses. We did not identify any impairment indicators for the three months ended March 31, 2019.

Beginning in March 2020, the Company noted that the COVID-19 pandemic and the resulting government stay at home orders were dramatically impacting certain of the Company's revenues. Most notably, a number of advertisers across significant advertising categories have reduced or ceased advertising spend due to the outbreak and stay at home orders which effectively shut many businesses down in the markets in which we operate. This was particularly true within our radio segment which derives substantial revenue from local advertisers who have been particularly hard hit due to social distancing and government interventions. As a result of COVID-19, the total market revenue growth for certain markets in which we operate was below that assumed in our annual impairment testing. We deemed that to be an impairment indicator that warranted interim impairment testing of certain markets’ radio broadcasting licenses, which we performed as of March 31, 2020. Below are some of the key assumptions used in the income approach model for estimating broadcasting licenses fair values for the interim impairment assessments for the quarter ended March 31, 2020.


Radio Broadcasting	March 31,
Licenses	2020 (a)

Pre-tax impairment charge (in millions)	$	47.7

Discount Rate		9.5	%
Year 1 Market Revenue Growth Rate Range		(13.3)	%
Long-term Market Revenue Growth Rate Range (Years 6 – 10)		0.7% – 1.1	%
Mature Market Share Range		6.9% – 25.0	%
Operating Profit Margin Range		27.6% – 39.7	%

(a)Reflects changes only to the key assumptions used in the interim testing for certain units of accounting.

Valuation of Goodwill

During the quarter ended March 31, 2020, the Company recorded a non-cash impairment charge of approximately $6.0 million to reduce the carrying value of our Atlanta and Indianapolis market goodwill balances. We did not identify any impairment indicators at any of our other reportable segments for the three months ended March 31, 2020. We did not identify any impairment indicators at any of our reportable segments for the three months ended March 31, 2019.

As noted above, during the first quarter of 2020 due to the COVID-19 pandemic, we identified an impairment indicator at certain of our radio markets, and, as such, we performed an interim analysis for certain radio market goodwill as of March 31, 2020. Below are some of the key assumptions used in the income approach model for estimating reporting unit fair values for the interim impairment assessments for the quarter ended March 31, 2020.


Goodwill (Radio Market	March 31,
Reporting Units)	2020 (a)

Pre-tax impairment charge (in millions)	$	6.0

Discount Rate		9.5	%
Year 1 Market Revenue Growth Rate Range		(14.5)% – (12.9)	%
Long-term Market Revenue Growth Rate Range (Years 6 – 10)		0.9% – 1.1	%
Mature Market Share Range		11.1% – 13.0	%
Operating Profit Margin Range		29.4% – 39.0	%

(a)Reflects changes only to the key assumptions used in the interim testing for certain units of accounting.

Goodwill Valuation Results

The table below presents the changes in the Company’s goodwill carrying values for its four reportable segments.


	Radio		Reach				Cable
	Broadcasting		Media		Digital		Television
	Segment		Segment		Segment		Segment		Total
	(In thousands)
Gross goodwill	$	155,000	$	30,468	$	27,567	$	165,044	$	378,079
Additions		—		—		—		—		—
Impairments		(5,950)		—		—		—		(5,950)
Accumulated impairment losses		(101,848)		(16,114)		(20,345)		—		(138,307)
Net goodwill at March 31, 2020	$	47,202	$	14,354	$	7,222	$	165,044	$	233,822