Company: IHETW
Filing Date: 2025-02-27
Form Type: 10-K
Source: 0001400891-25-000009
Chunk: 103

Company: iHeartMedia, Inc.
Filing Date: 2025-02-27
Form: 10-K
Item: Item 7
Chunk 103
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 a build-up period, reaching market revenue forecast by year 3;

•Operating margins of 8.0% in the first year gradually climb to the industry average margin in year 3 of up to 16.3%, depending on market size; and

•Assumed discount rates of 9.5% for large markets and 10.0% for small markets.

While we believe we have made reasonable estimates and utilized appropriate assumptions to calculate the fair value of our indefinite-lived intangible assets, it is possible a material change could occur. If future results are not consistent with our assumptions and estimates, we may be exposed to impairment charges in the future. The following table shows the decrease in the fair value of our indefinite-lived intangible assets that would result from a 100 basis point decline in our discrete and terminal period revenue growth rate and profit margin assumptions and a 100 basis point increase in our discount rate assumption:

Impact on the Fair Value of our FCC Licenses due to 100 bps Change in:Revenue Growth RateProfit MarginDiscount Rate(in thousands)$123,114 $120,132 $142,164 

At December 31, 2024, the carrying value of our FCC licenses was $809.9 million after the impairment of $304.1 million. An increase in discount rates, a decrease in revenue growth rates or profit margins, or a decrease in BIA revenue forecasts could result in additional impairment to our FCC licenses.

Goodwill

We test goodwill at interim dates if events or changes in circumstances indicate that goodwill might be impaired. The fair value of our reporting units is used to apply value to the net assets of each reporting unit. To the extent that the carrying amount of net assets would exceed the fair value, an impairment charge may be required to be recorded. The impairment testing performed as of June 30, 2024 has resulted in a decrease in the fair values of our reporting units. The carrying values of our Multiplatform and RCS reporting units exceeded their fair values. The fair values of our Digital and Katz reporting units exceeded their carrying values.

The valuation methodology we use for valuing goodwill involves considering the implied fair values of our reporting units based on market factors including the trading prices of our debt and equity securities, and estimating future cash flows 

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expected to be generated from the related assets, discounted to their present values using a risk-adjusted discount rate. Terminal values are also estimated and discounted to their present values. 

On June 30, 2024,