Company: IHETW
Filing Date: 2025-02-27
Form Type: 10-K
Source: 0001400891-25-000009
Chunk: 109

Company: iHeartMedia, Inc.
Filing Date: 2025-02-27
Form: 10-K
Item: Item 8
Chunk 109
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 accuracy of the underlying data supporting the significant assumptions mentioned above. We compared the projected cash flows to the Company’s historical cash flows and other available market forecast information, including third-party projections for the advertising industry. We involved our valuation specialists to assist in reviewing the valuation methodology and testing the discount rates. We assessed the historical accuracy of management’s estimates and performed sensitivity analyses of significant assumptions to evaluate the changes in the fair value of the reporting units that would result from changes in the assumptions. In addition, we also tested management’s reconciliation of the fair value of the reporting units to the market capitalization of the Company. Valuation of FCC licensesDescription of the MatterAs described in Note 1 and Note 4 to the consolidated financial statements, at December 31, 2024 the Company’s FCC licenses with indefinite lives were $0.8 billion. Management conducts impairment tests for indefinite-lived intangibles annually, or more frequently, if events or circumstances indicate the carrying value of indefinite-lived intangibles may be impaired. In the second quarter, the Company performed an interim impairment test which resulted in FCC license impairment charges of $304.1 million.Auditing management’s interim impairment tests for FCC licenses was complex and judgmental and required the involvement of a valuation specialist. The fair value of the FCC license was estimated by the Company using a discounted cash flow approach and market approach. The Company's discounted cash flow models involved assumptions such as changes in projected revenue growth rates, earnings before interest, taxes, depreciation, and amortization (“EBITDA”) margins, and discount rates. These assumptions are sensitive to and affected by expected future market or economic conditions.

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How We Addressed the Matter in Our AuditWe obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s FCC licenses impairment review process, including controls over management’s review of the significant assumptions described above and management’s review of data used in their valuation models.To test the estimated fair values of the Company’s FCC licenses, our audit procedures included, among others, evaluating the Company's selection of the valuation methodology, evaluating the significant assumptions used by management, and evaluating the completeness and accuracy of the underlying data supporting the significant assumptions mentioned above. We compared the projected revenue growth rates and EBITDA margins utilized within the Company's forecasted cash flows to external third-party projections for the advertising industry, to the Company's peer group, and to the recent historical results of the Company. We involved our valuation specialists to assist in reviewing the valuation methodology and testing the discount rates.