iHeartMedia 2002 Annual Report Download - page 94

(In thousands)
The deferred tax liability related to intangibles and fixed assets primarily relates to the difference in book and tax basis of acquired FCC
licenses and goodwill created from the Company’s various stock acquisitions. As discussed in Note B, upon adoption of Statement No. 142, the
Company recorded an impairment charge of approximately $6.0 billion, net of deferred tax of $3.7 billion, related to its FCC licenses. In
accordance with Statement No. 142, the Company no longer amortizes FCC licenses. Thus, a deferred tax benefit for the difference between
book and tax amortization for the Company’s FCC licenses and tax-deductible goodwill is no longer recognized, as these assets are no longer
amortized for book purposes. As a result, this deferred tax liability will not reverse over time unless the Company recognizes future impairment
charges on its FCC licenses or sells its FCC licenses. As the Company continues to amortize its tax basis in its FCC licenses, the deferred tax
liability will increase over time.
The reconciliation of income tax computed at the U.S. federal statutory tax rates to income tax expense (benefit) is:
(In thousands)
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
valuationallowancewasrecordedbasedonthe
2002 2001
Deferred tax liabilities:
Intangibles and fixed assets $2,605,842 $6,509,478
Unrealized gain in marketable securities —45,365
Accrued liabilities —120,636
Foreign 77,715 101,704
Equity in earnings 17,110 5,641
Investments 5,398 1,631
Other 12,417 28,136
Total deferred tax liabilities 2,718,482 6,812,591
Deferred tax assets:
Unrealized loss in marketable securities 20,876
—
Accrued expenses 110,236 143,682
Long-term debt 81,044 104,678
Net operating loss carryforwards 21,438 151,730
Alternative minimum tax carryforwards 13,437 2,697
Bad debt reserves 21,259 18,804
Deferred income 13,416 17,704
Other 32,985 25,149
Total gross deferred tax assets 314,691 464,444
Valuation allowance 66,667 164,070
Total deferred tax assets 248,024 300,374
Net deferred tax liabilities $2,470,458 $6,512,217
2002 2001 2000
Amount Percent Amount Percent Amount Percent
Income tax expense (benefit) at statutory rates $426,366 35% $(437,149)(35%) $249,739 35%
State income taxes, net of federal tax benefi
t
42,784 4% (344) 0% 25,686 3%
Amortization of goodwill
—
238,474 19%169,365 24%
Foreign taxes (6,248) (1%) 34,766 3% 20,774 3%
Nondeductible items 8,527 1% 7,009 1% 4,812 1%
Other, ne
t
21,937 2% 52,273 4% (5,645) (1%)
$493,366 41% $(104,971)(8%) $464,731 65%