iHeartMedia 2000 Annual Report Download - page 75

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75
(In thousands)
2000 1999 1998
Amount Percent Amount Percent Amount Percent
Income tax expense
at statutory rates $ 249,739 35% $ 83,439 35 % $ 44,880 35%
State income taxes, net
of federal tax benefit 25,686 3% 18,084 8 % 5,108 4%
Amortization of goodwill 169,365 24% 54,279 23 % 21,365 17%
Other, net 19,941 3% (11,142) (5)% 2,843 2%
$ 464,731 65% $144,660 61% $ 74,196 58%
Included in the above reconciliation of income tax for 1999 is $8.1 million of benefit related to
extraordinary loss resulting from early extinguishment of long-term debt.
The Company has certain net operating loss carryforwards amounting to $40.7 million, which expire in
the year 2018. These loss carryforwards were generated by certain acquired companies prior to their
acquisition by the Company. During the current year, the Company utilized $188.4 million in net
operating loss carryforwards.
The Company established a valuation allowance against its acquired operating loss carryforwards
generated by certain companies acquired during 1999 and 1998 following an assessment of the likelihood
of realizing such amounts. During 2000, based on a reassessment of the likelihood of the realization of
future benefits, the Company reduced the valuation allowance to zero.
NOTE J – CAPITAL STOCK
Eller Put/Call Agreement
The holders of the approximately 7% of the outstanding capital stock of Eller, not purchased by the
Company in April 1997, had the right to put such stock to the Company for approximately 2.2 million
shares of the Company’ s common stock until April 10, 2002. During 1998, the former Eller stockholders
exercised their put right for 260,000 shares of the Company’ s common stock. In June 1999, the former
Eller stockholders and the Company terminated the put rights agreement and at which time the Eller
stockholders received the remaining 1.9 million shares of the Company’ s common stock.
Common Stock Warrants
The Company assumed two issues of fully exercisable common stock warrants as a part of the merger
with Jacor in 1999 with a fair value of $253.4 million.
Warrants expiring September 18, 2001
The Company assumed 21.6 million common stock warrants that expire on September 18, 2001. Each
warrant represents the right to receive .2355422 shares of the Company’ s common stock, at an exercise
price of $24.19 per full share of the Company’ s common stock. The Company issued 220 and 5,850
shares of common in 2000 and 1999, respectively, on exercises of these common stock warrants. At
December 31, 2000, approximately 5.1 million shares of common stock were reserved for the conversion
of these warrants.