ENTRAVISION COMMUNICATIONS CORP Goodwill & Intangibles Disclosure

5. GOODWILL AND OTHER INTANGIBLE ASSETS

As a result of the sale of the Company’s EGP business, goodwill of $4.6 million was allocated to discontinued operations based on the relative fair value of the EGP business compared to the fair value of the remaining components that represent a business in the Company’s then digital reporting unit. Further, effective July 1, 2024, the Company has realigned its operating segments into two segments – media and advertising technology & services – based on the products and services it sells, consistent with the Company's current operational and management structure (see Note 18 for more details). The Company has identified each of these two operating segments to be separate reporting units. As a result of this realignment, $2.8 million of goodwill was allocated from the advertising technology & services reporting unit to the media reporting unit based on the relative fair value of the reallocated components that represent a business.

The aggregate amount of amortization expense for the years ended December 31, 2025, 2024 and 2023 was approximately $1.8 million, $2.7 million and $3.1 million, respectively. Estimated amortization expense for the next five years and thereafter is as follows (in thousands):

Impairment

The carrying values of the Company's reporting units are determined by allocating all applicable assets (including goodwill) and liabilities based upon the unit in which the assets are employed and to which the liabilities relate, considering the methodologies utilized to determine the fair value of the reporting units.

Goodwill and indefinite life intangibles are not amortized but are tested annually for impairment, or more frequently, if events or changes in circumstances indicate that the assets might be impaired. The annual testing date is October 1.

During the year ended December 31, 2024 the Company recorded a goodwill impairment charge of $43.3 million in its media reporting unit. This impairment charge was a result of the Company updating its internal forecasts of future performance based on lower than anticipated political revenue in the fourth quarter of 2024 and higher projected future costs due to planned investments in news programming and the sales and marketing teams. As a result, there was no goodwill in the media reporting unit as of the annual goodwill testing date, October 1, 2025.

As of the annual goodwill testing date, October 1, 2025, there was $7.4 million of goodwill in the advertising technology & services reporting unit. Based on the assumptions and estimates in Note 2, the fair value of the advertising technology & services reporting unit exceeded its carrying value by over 100%, resulting in no impairment charge for the year ended December 31, 2024. For the year ended December 31, 2025, the Company performed a qualitative assessment and determined that it is more likely than not that the fair value of its advertising technology & services reporting unit is greater than its respective carrying amounts. As a result, the Company determined that a quantitative analysis was not necessary. During the years ended December 31, 2025 and 2024 the Company did not record a goodwill impairment charge in its advertising technology & services reporting unit.

During the year ended December 31, 2023 the Company did not record a goodwill impairment charge in its then television, audio and digital reporting units.

The Company also conducted a review of the fair value of the television and radio FCC licenses in 2025, 2024 and 2023. The estimated fair value of indefinite life intangible assets is determined by an income approach. The income approach estimates fair value based on the estimated future cash flows of each market cluster that a hypothetical buyer would expect to generate, discounted by an estimated weighted-average cost of capital that reflects current market conditions, which reflect the level of inherent risk. The income approach requires the Company to make a series of assumptions, such as discount rates, revenue projections, profit margin projections and terminal values. The Company estimates the discount rates on a blended rate of return considering both debt and equity for comparable publicly-traded companies. These comparable publicly-traded companies have similar size, operating characteristics and/or financial profiles to the Company. The Company estimated the revenue projections and profit margin projections based on various market clusters signal coverage of the markets and industry information for an average station within a given market. The information for each market cluster includes such things as estimated market share, estimated capital start-up costs, population, household income, retail sales and other expenditures that would influence advertising expenditures. Alternatively, some stations under evaluation have had limited relevant cash flow history due to planned or actual conversion of format or upgrade of station signal. The assumptions the Company makes about cash flows after conversion are based on the performance of similar stations in similar markets and potential proceeds from the sale of the assets.

As a result of this impairment analysis, taking into consideration the foregoing factors, the Company recorded the following impairment charges:

As further discussed in Notes 2 and 3, following the communication from Meta on March 4, 2024, that it intended to wind down its ASP program globally and end its relationship with all of its ASPs, including the Company, by July 1, 2024, the Company updated its internal forecasts of future performance and determined that a triggering event had occurred during the first quarter of 2024 that required interim impairment tests within its then digital reporting unit. As a result, the Company recorded a goodwill impairment charge of $35.4 million and intangibles subject to amortization impairment charge of $14.0 million during the first quarter of 2024, with respect to the Company's then digital segment, which amounts were included in the results of discontinued operations.