Goodwill and Other Intangible Assets

6 Months Ended

Jun. 30, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

The carrying amount of goodwill, by operating segment is as follows:


(In thousands)	National Networks		International and Other		Total
December 31, 2019	$	237,103	$	464,877	$	701,980
Impairment charge	—		(25,062)		(25,062)
Amortization of "second component" goodwill	(664)		—		(664)
Foreign currency translation	—		(10,364)		(10,364)
June 30, 2020	$	236,439	$	429,451	$	665,890

As of June 30, 2020 and December 31, 2019, accumulated impairment charges in the International and Other segment totaled $123.1 million and $98.0 million, respectively.

The reduction of $0.7 million in the carrying amount of goodwill for National Networks is due to the realization of a tax benefit for the amortization of "second component" goodwill at SundanceTV. Second component goodwill is the amount of tax deductible goodwill in excess of goodwill for financial reporting purposes. In accordance with the authoritative guidance at the time of the SundanceTV acquisition, the tax benefits associated with this excess are applied to first reduce the amount of goodwill, and then other intangible assets for financial reporting purposes, if and when such tax benefits are realized in the Company's tax returns.

The Company performs its annual goodwill impairment test as of December 1 each year. In addition to the annual impairment test, the Company is required to regularly assess whether a triggering event has occurred which would require an interim impairment test. As a result of the continuing impact of the COVID-19 pandemic, the Company qualitatively assessed whether it was more likely than not that goodwill and long-lived assets were impaired as of June 30, 2020. The Company considered the current and expected future economic and market conditions surrounding the COVID-19 pandemic and its impact on each of its reporting units. Further, the Company assessed the current forecasts (including significant assumptions about revenue growth rates, long-term growth rates and enterprise specific discount rates) and the amount of excess fair value over carrying value for each of its reporting units in the 2019 impairment test. In connection with the preparation of the second quarter financial information, the Company determined that a triggering event had occurred with respect to its AMCNI reporting unit, which required an interim impairment test to be performed as of June 30, 2020. As such, the Company performed a quantitative assessment for its AMCNI reporting unit. The fair value was determined using a combination of an income approach, using a discounted cash flow (DCF) model, and a market comparables approach. The DCF model includes significant assumptions about revenue growth rates, long-term growth rates and enterprise specific discount rates. Additionally, the market comparables approach is determined using guideline company financial multiples. Given the uncertainty in determining assumptions underlying the DCF approach, actual results may differ from those used in the valuations.

Based on the valuations performed, in response to current and expected trends across the International television broadcasting markets, the fair value of the Company's AMCNI reporting unit declined below its carrying amount. As a result, in June 2020, the Company recognized an impairment charge of $25.1 million related to the AMCNI reporting unit, included in impairment charges in the condensed consolidated income statement.

No impairment charge was required for any of the Company's other reporting units.

The determination of fair value of the Company's AMCNI reporting unit represents a Level 3 fair value measurement in the fair value hierarchy due to its use of internal projections and unobservable measurement inputs. Changes in significant judgments and estimates could significantly impact the concluded fair value of the reporting unit or the valuation of intangible assets. Changes to assumptions that would decrease the fair value of the reporting unit would result in corresponding increases to the impairment of goodwill at the reporting unit.

We are unable to predict how long the COVID-19 pandemic conditions will persist, what additional measures may be introduced by governments or private parties or what effect any such additional measures may have on our business. If these estimates or related assumptions change in the future, we may be required to record additional impairment charges related to goodwill.

The following tables summarize information relating to the Company's identifiable intangible assets:


(In thousands)	June 30, 2020
			Gross			Accumulated Amortization			Net		Estimated Useful Lives
Amortizable intangible assets:
Affiliate and customer relationships	$	611,324		$	(306,696)		$	304,628		6 to 25 years
Advertiser relationships	46,282			(23,924)			22,358			11 years
Trade names	110,918			(32,778)			78,140			3 to 20 years
Other amortizable intangible assets	2,799			(2,592)			207			5 to 15 years
Total amortizable intangible assets	771,323			(365,990)			405,333
Indefinite-lived intangible assets:
Trademarks	19,900			—			19,900
Total intangible assets	$	791,223		$	(365,990)		$	425,233
(In thousands)	December 31, 2019
			Gross			Accumulated Amortization			Net
Amortizable intangible assets:
Affiliate and customer relationships	$	616,197		$	(232,193)		$	384,004
Advertiser relationships	46,282			(21,820)			24,462
Trade names	113,075			(17,997)			95,078
Other amortizable intangible assets	2,798			(1,711)			1,087
Total amortizable intangible assets	778,352			(273,721)			504,631
Indefinite-lived intangible assets:
Trademarks	19,900			—			19,900
Total intangible assets	$	798,252		$	(273,721)		$	524,531

Aggregate amortization expense for amortizable intangible assets for the six months ended June 30, 2020 and 2019 was $23.1 million and $22.3 million, respectively. Estimated aggregate amortization expense for intangible assets subject to amortization for each of the following five years is:


(In thousands)
Years Ending December 31,
2020	$	41,779
2021	37,567
2022	37,394
2023	37,288
2024	37,220

Impairment Test of Long-Lived Assets

In June 2020, given the continuing and expected future economic and market conditions surrounding the COVID-19 pandemic and its impact, the Company revised its outlook for the AMCNI business, resulting in lower expected future cash flows. As a result, the Company determined that sufficient indicators of potential impairment of long-lived assets existed and the Company performed a recoverability test of the long-lived asset groups within the AMCNI business. Based on the recoverability tests performed, the Company determined that certain long-lived assets were not recoverable and recognized an impairment charge of $105.3 million related primarily to certain identifiable intangible assets, as well as property and equipment, and operating lease right-of-use assets, which is included in impairment charges in the condensed consolidated statement of income.