Company: IHETW
Filing Date: 2025-11-10
Form Type: 10-Q
Source: 0001628280-25-051036
Chunk: 141

Company: iHeartMedia, Inc.
Filing Date: 2025-11-10
Form: 10-Q
Item: Item 2
Chunk 141
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Our key assumptions using the direct valuation method are market revenue growth rates, profit margin, and the risk-adjusted discount rate as well as other assumptions including market share, duration and profile of the build-up period,  estimated start-up costs and capital expenditures. This data is populated using industry normalized information representing an average asset within a market.

We performed our annual impairment test as of July 1, 2025 in accordance with ASC 350-30-35 and we concluded that a $208.5 million impairment of the indefinite-lived intangible assets was required. In determining the fair value of our FCC licenses, the following key assumptions were used:

•Revenue forecasts published by BIA Financial Network, Inc. (“BIA”), varying by market;

•2.0% over-the-air revenue growth and 3.0% digital revenue growth was assumed beyond the initial five-year period and 1.0% revenue growth was assumed in the terminal period;

•Revenue was grown proportionally over 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 14.1%, depending on market size; and

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

FCC licenses valued using a market approach estimate the fair value by referencing recent transactions involving comparable spectrum assets. This method considers observable market data, adjusted for differences in signal strength and market size.

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:

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Impact on the Fair Value of our FCC Licenses due to 100 bps Change in:Revenue Growth RateProfit MarginDiscount Rate(in thousands)$77,136 $89,771 $93,518 

At September 30, 2025, the carrying value of our FCC licenses was $601.4 million after the impairment of  $208.5 million. An increase in discount rates, a decrease