Long-Lived Assets

6 Months Ended

Jun. 30, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Long-Lived AssetsThe assumptions and estimates used in our analyses below require significant judgment about future events, market conditions and financial performance. Given the uncertainty around the severity and duration of the COVID-19 pandemic and the

measures taken, or may be taken, in response to the COVID-19 pandemic, actual results may differ materially from these assumptions and estimates, which may result in impairment charges of our long-lived assets in the future.

Goodwill

In the first quarter of 2020, we performed a qualitative assessment to determine if there has been a triggering event and impairment of goodwill as a result of the COVID-19 pandemic. As a result of the analysis performed, we determined that it was not “more likely than not” that the carrying value of any of our reporting units exceeded their fair value and no further evaluation of goodwill was necessary. We did not identify a triggering event in the second quarter of 2020.

Intangible Assets

Our identifiable intangible assets primarily consist of acquired permits and leasehold agreements, and franchise agreements, which grant us the right to operate out-of-home structures in specified locations and the right to provide advertising space on railroad and municipal transit properties. Identifiable intangible assets are amortized on a straight-line basis over their estimated useful life, which is the respective life of the agreement that in some cases includes historical experience of renewals.

Our identifiable intangible assets consist of the following:


(in millions)	Gross		Accumulated Amortization		Net
As of June 30, 2020:
Permits and leasehold agreements	$	1,185.4	$	(755.7)	$	429.7
Franchise agreements	503.6		(379.2)		124.4
Other intangible assets	45.6		(40.4)		5.2
Total intangible assets	$	1,734.6	$	(1,175.3)	$	559.3

As of December 31, 2019:
Permits and leasehold agreements	$	1,153.3	$	(735.7)	$	417.6
Franchise agreements	497.4		(371.1)		126.3
Other intangible assets	47.1		(40.1)		7.0
Total intangible assets	$	1,697.8	$	(1,146.9)	$	550.9

All of our intangible assets, except goodwill, are subject to amortization. Amortization expense was $21.7 million in the three months ended June 30, 2020, and $27.6 million in the three months ended June 30, 2019, which includes the amortization of direct lease acquisition costs of $6.3 million in the three months ended June 30, 2020, and $13.0 million in the three months ended June 30, 2019. Amortization expense was $48.0 million in the six months ended June 30, 2020, and $52.3 million in the six months ended June 30, 2019, which includes the amortization of direct lease acquisition costs of $17.6 million in the six months ended June 30, 2020, and $23.3 million in the six months ended June 30, 2019. Direct lease acquisition costs are amortized on a straight-line basis over the related customer lease term, which generally ranges from four weeks to one year.

New York Metropolitan Transportation Authority (the “MTA”) Agreement

In the first quarter of 2020, we identified the COVID-19 pandemic as a trigger for an impairment review of our Prepaid MTA equipment deployment costs and related intangible assets. After updating our projections to reflect related declines in revenues in 2020 and delays in our anticipated deployment schedule as a result of the impact of the COVID-19 pandemic, among other things, no impairment was identified. In the second quarter of 2020, we updated our projections in connection with the amendment to the MTA agreement (see Note 18. Commitments and Contingencies to the Consolidated Financial Statements) and did not identify a triggering event for an impairment review of our Prepaid MTA equipment deployment costs. It’s unlikely we will recoup any costs in 2020, and as of June 30, 2020, we have reclassified almost all amounts previously included in current Prepaid MTA equipment deployment costs to non-current Prepaid MTA equipment deployment costs on the Consolidated Statement of Financial Position.