iHeartMedia 2003 Annual Report Download - page 84

The reconciliation of income tax computed at the U.S. federal statutory tax rates to income tax expense (benefit) is:
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. The reduction in the valuation allowance was recorded
as an adjustment to the original purchase price allocation and did not impact total income tax expense.
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 reduction in the
valuation allowance was recorded as an adjustment to the original purchase price allocation and did not impact total income tax expense.
The remaining federal net operating loss carryforwards of $20.0 million expire in various amounts from 2004 to 2020.
NOTE J — SHAREHOLDERS’ EQUITY
Dividends
The Company’s Board of Directors declared a $.10 per share cash dividend payable on October 15, 2003 and January 15, 2004 to shareholders
of record on September 30, 2003 and December 31, 2003, respectively. Total cash paid for dividends was $61.6 million during the year ended
December 31, 2003.
Stock Options
The Company has granted options to purchase its common stock to employees and directors of the Company and its affiliates under various
stock option plans at no less than the fair market value of the underlying stock on the date of grant. These options are granted for a term not
exceeding ten years and are forfeited in the event the employee or director terminates his or her employment or relationship with the Company
or one of its affiliates. All option plans contain anti-dilutive provisions that require the adjustment of the number of shares of the Company
common stock represented by each option for any stock splits or dividends.
As a result of the mergers with Ackerley in 2002 the Company assumed .1 million stock options that were granted to employees and affiliates
of this company. These options were granted in accordance with Ackerley’s policy and under the terms of that company’s stock option plan.
Pursuant to the merger agreement, the Company assumed the obligation to fulfill all options granted in accordance with the original grant terms
adjusted for the merger exchange ratio. At December 31, 2003, there were .05 million options assumed with the Ackerley merger that remain
outstanding.
84
(In thousands) 2003 2002 2001
Amount Percent Amount Percent Amount Percent
Income tax expense (benefit) at statutory rates $673,877 35% $426,366 35% $(437,149)(35%)
State income taxes, net of federal tax benefi
t
68,076 4% 42,784 4% (344) 0%
Amortization of goodwill
—
—238,474 19%
Foreign taxes (3,521) (0%) (6,248) (1%) 34,766 3%
Nondeductible items 8,125 0% 8,527 1% 7,009 1%
Other, net 33,216 2% 21,937 2% 52,273 4%
$779,773 41% $493,366 41% $(104,971)(8%)