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PROPERTY, PLANT AND EQUIPMENT, INTANGIBLE ASSETS AND GOODWILL | 12 Months Ended
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Dec. 31, 2022
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 Acquisitions On March 31, 2021, the Company acquired Triton Digital, a global leader in digital audio and podcast technology and measurement services, from The E.W. Scripps Company for $228.5 million in cash. The assets acquired as part of this transaction consisted of $69.4 million in current and fixed assets, consisting primarily of accounts receivable and technology, and $191.3 million in intangible assets, consisting primarily of customer relationships, along with $168.0 million in goodwill (of which $6.9 million is tax-deductible). The Company also assumed liabilities of $32.2 million, consisting primarily of accounts payable and deferred tax liabilities. Property, Plant and Equipment The Company’s property, plant and equipment consisted of the following classes of assets as of December 31, 2022 and 2021, respectively:
(In thousands) | December 31, 2022 |  | December 31, 2021
Land, buildings and improvements | $ | 340,692 |  |  | $ | 355,474 |
Towers, transmitters and studio equipment | 215,655 |  |  | 180,571 |
Computer equipment and software | 617,794 |  |  | 521,872 |
Furniture and other equipment | 41,924 |  |  | 35,390 |
Construction in progress | 29,091 |  |  | 64,732 |
| 1,245,156 |  |  | 1,158,039 |
Less: accumulated depreciation | 550,314 |  |  | 375,946 |
Property, plant and equipment, net | $ | 694,842 |  |  | $ | 782,093 |
Indefinite-lived Intangible Assets The Company’s indefinite-lived intangible assets consist of FCC broadcast licenses in its Multiplatform Group segment. FCC broadcast licenses are granted to radio stations for up to eight years under the Telecommunications Act of 1996 (the “Act”). The Act requires the FCC to renew a broadcast license if the FCC finds that the station has served the public interest, convenience and necessity, there have been no serious violations of either the Communications Act of 1934 or the FCC’s rules and regulations by the licensee, and there have been no other serious violations which taken together constitute a pattern of abuse. The licenses may be renewed indefinitely at little or no cost. The Company does not believe that the technology of wireless broadcasting will be replaced in the foreseeable future. Annual Impairment Test on Indefinite-lived Intangible Assets The Company performs its annual impairment test on indefinite-lived intangible assets, including FCC licenses, as of July 1 of each year. In addition, the Company tests for impairment of indefinite-lived intangible assets whenever events and circumstances indicate that such assets might be impaired. The impairment tests for indefinite-lived intangible assets consist of a comparison between the fair value of the indefinite-lived intangible asset at the market level with its carrying amount. If the carrying amount of the indefinite-lived intangible asset exceeds its fair value, an impairment loss is recognized equal to that excess. After an impairment loss is recognized, the adjusted carrying amount of the indefinite-lived asset is its new accounting basis. The fair value of the indefinite-lived asset is determined using the direct valuation method as prescribed in ASC 805-20-S99. Under the direct valuation method, the fair value of the indefinite-lived assets is calculated at the market level as prescribed by ASC 350-30-35. The Company engaged a third-party valuation firm to assist it in the development of the assumptions and the Company’s determination of the fair value of its indefinite-lived intangible assets. The application of the direct valuation method attempts to isolate the income that is attributable to the indefinite-lived intangible asset alone (that is, apart from tangible and identified intangible assets and goodwill). It is based upon modeling a hypothetical “greenfield” build-up to a “normalized” enterprise that, by design, lacks inherent goodwill and whose only other assets have essentially been paid for (or added) as part of the build-up process. The Company forecasts revenue, expenses, and cash flows over a ten-year period for each of its markets in its application of the direct valuation method. The Company also calculates a “normalized” residual year which represents the perpetual cash flows of each market. The residual year cash flow was capitalized to arrive at the terminal value of the licenses in each market. Under the direct valuation method, it is assumed that rather than acquiring indefinite-lived intangible assets as part of a going concern business, the buyer hypothetically develops indefinite-lived intangible assets and builds a new operation with similar attributes from scratch. Thus, the buyer incurs start-up costs during the build-up phase which are normally associated with going concern value. Initial capital costs are deducted from the discounted cash flow model which results in value that is directly attributable to the indefinite-lived intangible assets. The current macroeconomic conditions have led to uncertainty, resulting in slowing broadcast revenue growth and declines in margins as inflation and interest rates have risen. These factors negatively impacted the key assumptions used in the discounted cash flow models that we utilized to value our FCC licenses as of July 1, 2022, resulting in a significant decrease in the fair values of certain of our FCC licenses. The key assumptions used in applying the direct valuation approach include 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, and estimated start-up capital costs. This data is populated using industry normalized information representing an average asset within a market. The Company obtained recent broadcast radio industry revenue projections which it considered along with various other sources of data in developing the assumptions used for purposes of performing impairment testing on our FCC licenses as of July 1, 2022. Considerations in developing these assumptions included the extent of the economic downturn, ranges of expected timing of recovery, discount rates and other factors. Based on the Company's testing, the estimated fair value of the FCC licenses was below their carrying values. As a result, in the third quarter of 2022 the Company recognized a non-cash impairment charge of $302.1 million on its FCC licenses. While the Company believes it has made reasonable estimates and utilized reasonable assumptions to calculate the fair values of its indefinite-lived FCC licenses, it is possible a material change could occur to the estimated fair value of these assets as a result of the uncertainty regarding current economic conditions. No impairment was required as part of the 2021 annual impairment testing. As a result of the COVID-19 pandemic and the economic downturn starting in March 2020, the Company performed an interim impairment test as of March 31, 2020 on its indefinite-lived FCC licenses, resulting in a non-cash impairment charge of $502.7 million. No further impairment was recognized as a result of the Company's annual impairment test on indefinite-lived intangible assets in 2020. Other Intangible Assets Other intangible assets consists of definite-lived intangible assets, which 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 that the assets are expected to contribute directly or indirectly to the Company’s future cash flows. The Company periodically reviews the appropriateness of the amortization periods related to its definite-lived intangible assets. These assets are recorded at amortized cost. The Company tests for possible impairment of other intangible assets whenever events and circumstances indicate that they might be impaired and the undiscounted cash flows estimated to be generated by those assets are less than the carrying amounts of those assets. When specific assets are determined to be unrecoverable, the cost basis of the asset is reduced to reflect the current fair market value. The following table presents the gross carrying amount and accumulated amortization for each major class of other intangible assets as of December 31, 2022, and December 31, 2021, respectively:
(In thousands) | December 31, 2022 |  | December 31, 2021
| Gross Carrying Amount |  | Accumulated Amortization |  | Gross Carrying Amount |  | Accumulated Amortization
Customer / advertiser relationships | $ | 1,652,455 |  |  | $ | (633,352) |  |  | $ | 1,646,402 |  |  | $ | (459,620) |
Talent and other contracts | 338,900 |  |  | (160,500) |  |  | 338,900 |  |  | (117,337) |
Trademarks and tradenames | 335,862 |  |  | (122,403) |  |  | 335,862 |  |  | (88,252) |
Other | 18,443 |  |  | (9,735) |  |  | 17,794 |  |  | (7,149) |
Total | $ | 2,345,660 |  |  | $ | (925,990) |  |  | $ | 2,338,958 |  |  | $ | (672,358) |
Total amortization expense related to definite-lived intangible assets for the years ended December 31, 2022, 2021, and 2020 was $253.6 million, $280.6 million and $258.9 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) |
2023 | $ | 245,900 |
2024 | 244,707 |
2025 | 213,514 |
2026 | 201,512 |
2027 | 176,171 |
Goodwill The following tables present the changes in the carrying amount of goodwill:
(In thousands) | Multiplatform Group |  | Digital Audio Group |  | Audio & Media Services Group |  | Consolidated
Balance as of January 1, 2021(1) | $ | 1,462,217 |  |  | $ | 579,319 |  |  | $ | 104,399 |  |  | $ | 2,145,935 |
Acquisitions | 1,267 |  |  | 168,031 |  |  | — |  |  | 169,298 |
Dispositions | (1,446) |  |  | — |  |  | — |  |  | (1,446) |
Foreign currency | — |  |  | — |  |  | (206) |  |  | (206) |
Balance as of December 31, 2021 | $ | 1,462,038 |  |  | $ | 747,350 |  |  | $ | 104,193 |  |  | $ | 2,313,581 |
Dispositions | (16) |  |  | — |  |  | — |  |  | (16) |
Foreign currency | — |  |  | — |  |  | (162) |  |  | (162) |
Balance as of December 31, 2022 | $ | 1,462,022 |  |  | $ | 747,350 |  |  | $ | 104,031 |  |  | $ | 2,313,403 |
(1) Goodwill balance is presented net of accumulated impairment losses of $1.2 billion related to the Multiplatform Group segment. No impairments were recorded in 2022 or 2021. Goodwill Impairment We perform our annual impairment test on our 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. The goodwill impairment test requires measurement of the fair value of the Company's reporting units, which is compared to the carrying value of the reporting units, including goodwill. Each reporting unit is valued using a discounted cash flow model which requires estimating future cash flows expected to be generated from the reporting unit, discounted to their present value using a risk-adjusted discount rate. Terminal values are also estimated and discounted to their present value. Assessing the recoverability of goodwill requires estimates and assumptions about sales, operating margins, growth rates and discount rates based on budgets, business plans, economic projections, anticipated future cash flows and marketplace data. As with the impairment testing performed on the Company's FCC licenses described above, the Company engaged a third-party valuation firm to assist it in the development of the assumptions and the Company’s determination of the fair value of its reporting units as of July 1, 2022 as part of the annual impairment test. The deterioration in market conditions and uncertainty in the markets impacted the assumptions used to estimate the discounted future cash flows of our reporting units for purposes of performing the annual goodwill impairment test. Although the impairment testing resulted in a significant decrease in the fair values of our reporting units, no goodwill impairment was recorded for 2022 as the estimated fair values of our reporting units exceeded the carrying values of the reporting units’ net assets, including goodwill. While we believe we have made reasonable estimates and utilized reasonable assumptions to calculate the fair values of our reporting units, it is possible a material change could occur to the estimated fair value of the reporting units as a result of the uncertainty regarding current economic conditions. As a result of the changes in the Company's management structure and its reportable segments effective at the beginning of 2021, the Company performed an interim impairment test on goodwill as of January 1, 2021. No impairment charges were recorded in the first quarter of 2021 in connection with the interim impairment test. The carrying values of the Company’s reporting units were based on estimated fair values determined upon our Emergence, and the rapid deterioration in economic conditions resulting from the COVID-19 pandemic resulted in lower estimated fair values determined in connection with our interim goodwill impairment testing as of March 31, 2020. The estimated fair value of one of the Company's reporting units was below its carrying value, including goodwill. The macroeconomic factors discussed above had an adverse effect on the Company's estimated cash flows used in the discounted cash flow model. As a result, the Company recognized a non-cash impairment charge of $1.2 billion in the first quarter of 2020 to reduce goodwill.

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