iHeartMedia 2014 Annual Report Download - page 96

IHEARTCOMMUNICATIONS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
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power to all affected digital displays on April 15, 2013. The digital display structures remain intact but digital displays are currently
prohibited in the City. Clear Channel Outdoor, Inc. is seeking permits under the existing City sign code to either wrap the LED faces
with vinyl or convert the LED faces to traditional static signs, and has obtained a number of such permits. Clear Channel Outdoor,
Inc. is also pursuing a new ordinance to permit digital signage in the City.
NOTE 8 – GUARANTEES
As of December 31, 2014, the Company had outstanding surety bonds and commercial standby letters of credit of $47.7 million and
$113.9 million, respectively, of which no letters of credit were cash secured. These letters of credit and surety bonds relate to various
operational matters including insurance, bid, concession and performance bonds as well as other items.
As of December 31, 2014, the Company had outstanding bank guarantees of $55.1 million. Bank guarantees in the amount of
$15.2 million are backed by cash collateral.
NOTE 9 – INCOME TAXES
Significant components of the provision for income tax benefit (expense) are as follows:
(In thousands)
Years Ended December 31,
2014
2013
2012
Current - Federal
$
(503)
$
10,586
$
61,655
Current - foreign
(27,256)
(48,466)
(48,579)
Current - state
3,193
1,527
(9,408)
Total current benefit (expense)
(24,566)
(36,353)
3,668
Deferred - Federal
(29,284)
126,905
261,014
Deferred - foreign
4,308
8,932
27,970
Deferred - state
(8,947)
22,333
15,627
Total deferred benefit (expense)
(33,923)
158,170
304,611
Income tax benefit (expense)
$
(58,489)
$
121,817
$
308,279
Current tax expense of $24.6 million was recorded for 2014 as compared to a current tax expense of $36.4 million for 2013. The
change in current tax was primarily due to a reduction in unrecognized tax benefits during 2014, which resulted from the expiration of
statutes of limitations to assess taxes in the United Kingdom and several state jurisdictions. This decrease in unrecognized tax benefits
resulted in a reduction to current tax expense of $35.4 million during 2014.
Current tax expense of $36.4 million was recorded for 2013 as compared to a current tax benefit of $3.7 million for 2012. The change
in current tax was primarily due to the Company’s settlement of U.S. federal and foreign tax examinations during 2012. Pursuant to
the settlements, the Company recorded a reduction to current income tax expense of approximately $67.3 million during 2012 to
reflect the net current tax benefits of the settlements.
Deferred tax expense of $33.9 million was recorded for 2014 compared with deferred tax benefit of $158.2 million for 2013. The
change in deferred tax is primarily due to the valuation allowance of $339.8 million recorded against the Company’s current period
federal and state net operating losses during 2014.
Deferred tax benefit of $158.2 million for 2013 primarily relates to cancellation of debt income recognized during the year as a result
of certain debt restructuring transactions, and is lower when compared with the deferred tax benefit of $304.6 million for 2012. The
decrease in deferred tax benefit in 2013 is primarily due to the valuation allowance of $143.5 million recorded against a portion of the
Company’s federal and state net operating losses.