iHeartMedia 2003 Annual Report Download - page 67

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On January 1, 2003, the Financial Accounting Standards Board issued Financial Accounting Standards Board Interpretation No. 46,
Consolidation of Variable Interest Entities (“FIN 46”). In addition, on December 24, 2003, the Financial Accounting Standards Board issued a
revision of FIN 46 (the“Revised Interpretation”). The Revised Interpretation addresses consolidation of business enterprises of variable interest
entities and is effective for variable interest entities for the first fiscal year or interim period ending after March 15, 2004. The Company does
not believe the adoption of FIN 46 will have a material impact on the Company’s financial position or results of operations.
NOTE B — INTANGIBLE ASSETS AND GOODWILL
On January 1, 2002, the Company adopted Statement of Financial Accounting Standards No. 142, Goodwill and Other Intangible Assets
(“Statement 142”). Statement 142 addresses financial accounting and reporting for acquired goodwill and other intangible assets and
supersedes APB Opinion No. 17, Intangible Assets. Statement 142 establishes new accounting for goodwill and other intangible assets
recorded in business combinations. Under the new rules, goodwill and intangible assets deemed to have indefinite lives are no longer amortized
but are subject to annual impairment tests in accordance with the statement. Other intangible assets continue to be amortized over their useful
lives.
The following table presents the impact of Statement 142 on net earnings (loss) and net earnings (loss) per share as if the standard had been in
effect for the year ended December 31, 2001:
D
efinite-lived Intangibles
The Company has definite-lived intangible assets recorded that continue to be amortized in accordance with Statement 142. These assets
consist primarily of transit and street furniture contracts and other contractual rights in the outdoor segment, talent and program right contracts
in the radio segment, and in the Company’s other segment, representation contracts for non-affiliated television and radio stations, all of which
are amortized over the respective lives of the agreements. Other definite-lived intangible assets are amortized over the period of time the assets
are expected to contribute directly or indirectly to the Company’s future cash flows. In accordance with the transitional requirements of
Statement 142, the Company reassessed the useful lives of these intangibles and made no material
67
(In thousands, except per share data) 2001
Adjusted net income (loss):
Reported net income (loss) $(1,144,026)
Add back: goodwill amortization 894,467
Add back: license amortization 888,781
Tax impact (390,633)
Adjusted net income $ 248,589
Basic earnings (loss) per share:
Reported net income (loss) $ (1.93)
Add back: goodwill amortization 1.51
Add back: license amortization 1.50
Tax impac
t
(.66)
Adjusted earnings per share- Basic $ .42
Diluted earnings (loss) per share:
Reported net income (loss) $ (1.93)
Anti-dilutive adjustment .04
Add back: goodwill amortization 1.48
Add back: license amortization 1.47
Tax impac
t
(.65)
Adjusted earnings per share- Dilute
d
$.41