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PROPERTY, PLANT AND EQUIPMENT, INTANGIBLE ASSETS AND GOODWILL | 9 Months Ended
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Sep. 30, 2019
Property, Plant and Equipment [Abstract] |
PROPERTY, PLANT AND EQUIPMENT, INTANGIBLE ASSETS AND GOODWILL | PROPERTY, PLANT AND EQUIPMENT, INTANGIBLE ASSETS AND GOODWILL Property, Plant and Equipment The Company’s property, plant and equipment consisted of the following classes of assets as of September 30, 2019 (Successor) and December 31, 2018 (Predecessor), respectively:
(In thousands) | Successor Company |  |  | Predecessor Company
| September 30, 2019 |  |  | December 31, 2018
Land, buildings and improvements | $ | 379,204 |  |  |  | $ | 427,501 |
Towers, transmitters and studio equipment | 154,426 |  |  |  | 365,991 |
Furniture and other equipment | 309,201 |  |  |  | 591,601 |
Construction in progress | 36,243 |  |  |  | 43,809 |
| 879,074 |  |  |  | 1,428,902 |
Less: accumulated depreciation | 45,061 |  |  |  | 926,700 |
Property, plant and equipment, net | $ | 834,013 |  |  |  | $ | 502,202 |
In connection with the Company's emergence from bankruptcy and in accordance with ASC 852, the Company applied the provisions of fresh start accounting to its Consolidated Financial Statements on the Effective Date. As a result, the Company adjusted Property, plant and equipment to their respective fair values at the Effective Date (see Note 3, Fresh Start Accounting). Indefinite-lived Intangible Assets The Company’s indefinite-lived intangible assets consist of FCC broadcast licenses in its Audio segment. In connection with the Company's emergence from bankruptcy and in accordance with ASC 852, the Company applied the provisions of fresh start accounting to its Consolidated Financial Statements on the Effective Date. As a result, the Company adjusted its FCC licenses to their respective estimated fair values as of the Effective Date of $2,281.7 million (see Note 3, Fresh Start Accounting). Annual Impairment Test on Indefinite-lived Intangible Assets The Company performs its annual impairment test on indefinite-lived intangible assets as of July 1 of each year. The Company also tests indefinite-lived intangible assets at interim dates if events or changes in circumstances indicate that indefinite-lived intangible assets might be impaired. Generally, the annual impairment test includes a full quantitative assessment, which involves the preparation of a fair value estimate for each of the Company's reporting units based on the most recent projected financial results, market and industry factors, including comparison to peer companies and the application of the Company's current estimated WACC. However, in connection with emergence from bankruptcy, the Company qualified for and adopted fresh start accounting on the Effective Date. As of May 1, 2019, the Company allocated its estimated enterprise fair value to its individual assets and liabilities based on their estimated fair values in conformity with ASC 805, "Business Combinations." As a result of the recent fair value exercise applied in connection with fresh start accounting, the Company opted to use a qualitative assessment for its annual indefinite-lived intangible asset impairment test as of July 1, 2019 in lieu of performing the full quantitative assessment, as permitted by ASC 350, "Intangibles - Goodwill and Other". The qualitative impairment assessment performed for indefinite-lived intangible assets considered the general macroeconomic environment, industry and market specific conditions, financial performance, including changes in costs and actual versus forecasted results, as well other issues or events specific to the Audio segment. Based on this assessment and the totality of facts and circumstances, including the business environment in the third quarter of 2019, the Company determined that it was not more likely than not that the fair value of the Company and its reporting units is less than their respective carrying amounts. As such, the Company concluded no indefinite-lived intangible asset impairment was required for the three months ended September 30, 2019. During the period from January 1, 2019 through May 1, 2019, the Predecessor Company recognized non-cash impairment charges of $91.4 million in relation to indefinite-lived FCC licenses as a result of an increase in the WACC used in performing the annual impairment test. The Predecessor Company recognized impairment charges related to its indefinite-lived intangible assets within several iHM radio markets of $33.2 million during the three and nine months ended September 30, 2018. Other Intangible Assets Other intangible assets include definite-lived intangible assets and permanent easements. The Company’s definite-lived intangible assets primarily include customer and advertiser relationships, talent and representation contracts, trademarks and tradenames and other contractual rights, all of which are amortized over the shorter of either the respective lives of the agreements or over the period of time the assets are expected to contribute directly or indirectly to the Company’s future cash flows. Permanent easements are indefinite-lived intangible assets which include certain rights to use real property not owned by the Company. The Company periodically reviews the appropriateness of the amortization periods related to its definite-lived intangible assets. These assets are recorded at amortized cost. In connection with the Company's emergence from bankruptcy and in accordance with ASC 852, the Company applied the provisions of fresh start accounting to its Consolidated Financial Statements on the Effective Date. As a result, the Company adjusted Other intangible assets to their respective fair values at the Effective Date (see Note 3, Fresh Start Accounting). The following table presents the gross carrying amount and accumulated amortization for each major class of other intangible assets as of September 30, 2019 (Successor) and December 31, 2018 (Predecessor), respectively:
(In thousands) | Successor Company |  |  | Predecessor Company
| September 30, 2019 |  |  | December 31, 2018
| Gross Carrying Amount |  | Accumulated Amortization |  |  | Gross Carrying Amount |  | Accumulated Amortization
Customer / advertiser relationships | 1,649,770 |  |  | (74,420 | ) |  |  | 1,326,636 |  |  | (1,278,885 | )
Talent and other contracts | 375,399 |  |  | (21,087 | ) |  |  | 164,933 |  |  | (148,578 | )
Trademarks and tradenames | 321,977 |  |  | (13,538 | ) |  |  | — |  |  | — |
Other | 762 |  |  | (440 | ) |  |  | 376,978 |  |  | (240,662 | )
Total | $ | 2,347,908 |  |  | $ | (109,485 | ) |  |  | $ | 1,868,547 |  |  | $ | (1,668,125 | )
Total amortization expense related to definite-lived intangible assets for the Successor Company for the three months ended September 30, 2019 and the period from May 2, 2019 through September 30, 2019 was $67.0 million and $109.5 million, respectively. Total amortization expense related to definite-lived intangible assets for the Predecessor Company for the three months ended September 30, 2018, the period from January 1, 2019 through May 1, 2019 and the nine months ended September 30, 2018 was $19.2 million, $12.7 million and $101.1 million, respectively. As acquisitions and dispositions occur in the future, amortization expense may vary. The following table presents the Company’s estimate of amortization expense for each of the five succeeding fiscal years for definite-lived intangible assets:
(In thousands) |
2020 | $ | 263,125 |
2021 | 262,727 |
2022 | 257,502 |
2023 | 246,927 |
2024 | 246,237 |
Goodwill Annual Impairment Test to Goodwill The Company performs its annual impairment test on goodwill as of July 1 of each year. The Company also tests goodwill at interim dates if events or changes in circumstances indicate that goodwill might be impaired. Generally, the Company's annual impairment test includes a full quantitative assessment, which involves the preparation of a fair value estimate for each reporting unit based on the most recent projected financial results, market and industry factors, including comparison to peer companies and the application of the Company's current estimated WACC. However, in connection with emergence from bankruptcy, the Company qualified for and adopted fresh start accounting on the Effective Date. As of May 1, 2019, the Company allocated its estimated enterprise fair value to its individual assets and liabilities based on their estimated fair values in conformity with ASC 805, "Business Combinations." Upon application of fresh start accounting in accordance with ASC 852 in connection with the emergence from bankruptcy, the Company recorded goodwill of $3.3 billion, which represented the excess of Reorganization Value over the estimated fair value of the Company's assets and liabilities. Goodwill was further allocated to reporting units based on the relative fair values of the Company's reporting units as of May 1, 2019. As a result of the recent fair value exercise applied in connection with fresh start accounting, the Company opted to use a qualitative assessment for its annual goodwill impairment test as of July 1, 2019 in lieu of performing the full quantitative assessment, as permitted by ASC 350, "Intangibles - Goodwill and Other". As of July 1, 2019, the qualitative impairment assessment performed for goodwill considered the general macroeconomic environment, industry and market specific conditions for each reporting unit, financial performance, including changes in costs and actual versus forecasted results, as well other issues or events specific to each reporting unit. In addition, the Company evaluated the impact of changes in the Company's stock price and the trading values of its publicly-traded debt from May 1, 2019 to July 1, 2019 to determine whether or not any changes would indicate a potential impairment of goodwill allocated to its reporting units. Based on this assessment and the totality of facts and circumstances, including the business environment in the third quarter of 2019, the Company determined that it was not more likely than not that the fair value of the Company and its reporting units is less than their respective carrying amounts. As such, the Company concluded no goodwill impairment was required during the three months ended September 30, 2019 (Successor), the three months ended September 30, 2018 (Predecessor), the period from May 2, 2019 through September 30, 2019 (Successor), the period from January 1, 2019 through May 1, 2019 (Predecessor), and the nine months ended September 30, 2018 (Predecessor). The following table presents the changes in the carrying amount of goodwill:
(In thousands) | Audio |  | Audio & Media Services |  | Consolidated
Balance as of December 31, 2017 (Predecessor) | $ | 3,255,208 |  |  | $ | 81,831 |  |  | $ | 3,337,039 |
Acquisitions | 77,320 |  |  | — |  |  | 77,320 |
Dispositions | (1,606 | ) |  | — |  |  | (1,606 | )
Balance as of December 31, 2018 (Predecessor) | $ | 3,330,922 |  |  | $ | 81,831 |  |  | $ | 3,412,753 |
Acquisitions | — |  |  | 2,767 |  |  | 2,767 |
Foreign currency | — |  |  | (28 | ) |  | (28 | )
Balance as of May 1, 2019 (Predecessor) | $ | 3,330,922 |  |  | $ | 84,570 |  |  | $ | 3,415,492 |
Impact of fresh start accounting | (111,712 | ) |  | 19,585 |  |  | (92,127 | )
Balance as of May 2, 2019 (Successor) | $ | 3,219,210 |  |  | $ | 104,155 |  |  | $ | 3,323,365 |
Acquisitions | 4,637 |  |  | — |  |  | 4,637 |
Dispositions | (9,466 | ) |  | — |  |  | (9,466 | )
Foreign currency | — |  |  | (77 | ) |  | (77 | )
Other | 7,087 |  |  | — |  |  | 7,087 |
Balance as of September 30, 2019 (Successor) | $ | 3,221,468 |  |  | $ | 104,078 |  |  | $ | 3,325,546 |

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- Definition The entire disclosure for long-lived, physical assets used in the normal conduct of business and not intended for resale. Includes, but is not limited to, accounting policies and methodology, roll forwards, depreciation, depletion and amortization expense, including composite depreciation, accumulated depreciation, depletion and amortization expense, useful lives and method used, income statement disclosures, assets held for sale and public utility disclosures. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 360 -URI http://asc.fasb.org/topic&trid=2155823 + Details
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