iHeartMedia 2004 Annual Report Download - page 85
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The reduction in the valuation allowance was a result of the resolution of certain tax contingencies during 2004 associated with prior
acquisitions. This reduction was recorded as an adjustment to the original purchase price allocation and did not impact income tax expense.
The reconciliation of income tax computed at the U.S. federal statutory tax rates to income tax expense (benefit) is:
During 2004, the Company utilized approximately $5.7 million of net operating loss carryforwards, the majority of which were generated by
certain acquired companies prior to their acquisition by the Company. The utilization of the net operating loss carryforwards reduced current
taxes payable and current tax expense as of and for the year ended December 31, 2004. As a result of the favorable resolution of certain tax
contingencies, current tax expense includes benefits of $34.1 million. The benefits resulted in an effective tax rate of 38% for the twelve
months ended December 31, 2004.
During 2003, the Company utilized approximately $31.4 million of net operating loss carryforwards, the majority of which were generated by
certain acquired companies prior to their acquisition by the Company. The utilization of the net operating loss carryforwards reduced current
taxes payable and current tax expense as of and for the year ended December 31, 2003.
During 2002, the Company utilized approximately $400.0 million of net operating loss carryforwards, the majority of which were generated by
certain acquired companies prior to their acquisition by the Company. In connection with accounting for these acquisitions, a deferred tax asset
valuation allowance was recorded based on the Company’s assessment of the likelihood of realization of these net operating loss carryforwards
and other deferred tax assets. The utilization of the net operating loss carryforwards reduced current taxes payable and current tax expense as o
f
and for the year ended December 31, 2002, and resulted in a reduction of the deferred tax asset valuation allowance.
The remaining federal net operating loss carryforwards of $14.7 million expire in various amounts from 2005 to 2020.
82
2004 2003 2002
(In thousands) Amoun
t
Percen
t
Amoun
t
Percen
t
Amoun
t
Percen
t
Income tax expense (benefit) at statutory rates $477,467 35% $673,877 35% $426,366 35%
State income taxes, net of federal tax benefit 35,247 3% 68,076 4% 42,784 4%
Foreign taxes 3,747 0% (3,521)(0%) (6,248)(1%)
Nondeductible items 6,278 0% 8,125 0% 8,527 1%
Other, ne
t
(4,346)(0)% 33,216 2% 21,937 2%
$518,393 38% $779,773 41% $493,366 41%