Goodwill and Other Intangible Assets

3 Months Ended

Mar. 31, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill consisted of the following:



(in thousands)	Local Media			National Media			Total

Gross balance as of December 31, 2019	$	1,143,859		$	395,313		$	1,539,172
Accumulated impairment losses	(216,914		)	(50,403		)	(267,317		)
Net balance as of December 31, 2019	$	926,945		$	344,910		$	1,271,855

Gross balance as of March 31, 2020	$	1,147,347		$	395,297		$	1,542,644
Accumulated impairment losses	(216,914		)	(50,403		)	(267,317		)
Net balance as of March 31, 2020	$	930,433		$	344,894		$	1,275,327

Other intangible assets consisted of the following:



(in thousands)	As of March 31, 2020			As of December 31, 2019

Amortizable intangible assets:
Carrying amount:
Television network affiliation relationships	$	616,244		$	616,244
Customer lists and advertiser relationships	111,700			111,700
Other	109,281			109,156
Total carrying amount	837,225			837,100
Accumulated amortization:
Television network affiliation relationships	(90,872		)	(82,917		)
Customer lists and advertiser relationships	(51,419		)	(48,586		)
Other	(33,058		)	(29,721		)
Total accumulated amortization	(175,349		)	(161,224		)
Net amortizable intangible assets	661,876			675,876
Indefinite-lived intangible assets — FCC licenses	385,915			385,915
Total other intangible assets	$	1,047,791		$	1,061,791

Estimated amortization expense of intangible assets for each of the next five years is $43.3 million for the remainder of 2020, $55.2 million in 2021, $49.8 million in 2022, $44.7 million in 2023, $42.9 million in 2024, $40.0 million in 2025 and $386.0 million in later years.

Goodwill and other indefinite-lived intangible assets are tested for impairment annually and any time events occur or changes in circumstances indicate it is more likely than not the fair value of a reporting unit, or respective indefinite-lived intangible asset, is below its carrying value. Our reporting units are Local Media, Katz, Triton, Stitcher and Newsy. Such events or changes in circumstances include, but are not limited to, changes in business climate, declines in the price of our stock, or other factors resulting in lower cash flow related to such assets. If the carrying amount exceeds its fair value, then an impairment loss is recognized.

Weakness in economic conditions toward the end of the first quarter, reflecting the impact of the COVID-19 pandemic, and declines in our stock price, created indications of fair value declines for our reporting units as of March 31, 2020. Accordingly, during the quarter, we considered impacts to the estimated fair values for each of our reporting units to determine if it was more likely than not that fair value had declined below carrying value. Our analysis primarily relied upon market data and discounted cash flow analyses. The use of a discounted cash flow approach requires significant judgment to estimate future cash flows of the business and the period of time over which those cash flows will occur, as well as to determine an appropriate discount rate. While we believe the estimates and judgments used in the discounted cash flow analyses for our reporting units were appropriate, different assumptions with respect to future cash flows, long-term growth rates and discount rates, could produce different estimates of value.

We concluded that it was not more likely than not that the carrying value for any of our reporting units exceeded its fair value. However, the discounted cash flow values for each of our reporting units were lower than the values determined during our 2019 annual impairment test. In 2019, the fair value for our Local Media reporting unit exceeded its carrying value by approximately 25% and our other reporting units exceeded their carrying values by over 30%. The Local Media reporting unit has $0.9 billion of goodwill or 73% of the consolidated total for the Company.

We also concluded that it was not more likely than not that the carrying value of any of our FCC licenses exceeded their fair values. Our FCC licenses are indefinite-lived assets that are not subject to amortization. The value of a FCC license is estimated using an income approach, which requires multiple assumptions relating to the future prospects of each individual FCC license. While we believe the estimates and judgments used in determining that it was not more likely than not that the carrying values of the FCC licenses exceeded fair values were appropriate, different assumptions with respect to the income approach could produce different estimates of value. For example, as it relates to our 2019 annual impairment test, a 50-basis point increase in discount rates would reduce the aggregate fair value of the FCC licenses by approximately $65 million.