iHeartMedia 2004 Annual Report Download - page 73

NOTE C - BUSINESS ACQUISITIONS
2004 Acquisitions:
Medallion Merger
On September 3, 2004, the Company closed its merger with Medallion Taxi Media, Inc., (“Medallion”). Pursuant to the terms of the
agreement, the Company exchanged approximately .9 million shares of its common stock for 100% of the outstanding stock of Medallion,
valuing this merger at approximately $33.6 million. Medallion’s operations include advertising displays placed on the top of taxi cabs. The
Company began consolidating the results of operations on September 3, 2004.
In addition to the above, during 2004 the Company acquired radio stations for $59.4 million in cash and $38.9 million in restricted cash. The
Company also acquired outdoor display faces for $60.9 million in cash and acquired equity interest in international outdoor companies for
$2.5 million in cash. The Company’s live entertainment segment made cash payments of $16.2 million during the year ended December 31,
2004, primarily related to various earn-outs and deferred purchase price consideration on prior year acquisitions. Also, the Company acquired
two television stations for $10.0 million in cash and $8.7 million in restricted cash and our national representation business acquired new
contracts for a total of $32.4 million in cash during the year ended December 31, 2004. Finally, the Company exchanged outdoor advertising
assets, valued at $23.7 million for other outdoor advertising assets valued at $32.3 million. As a result of this exchange, the Company recorded
a gain of $8.6 million in “Other income (expense) – net”.
2003 Acquisitions:
During 2003 the Company acquired radio stations for $45.9 million in cash. The Company also acquired domestic outdoor display faces for
$28.3 million in cash. The Company’s outdoor segment also acquired investments in nonconsolidated affiliates for $10.7 million in cash and
acquired an additional 10% interest in a subsidiary for $5.1 million in cash. The Company’s live entertainment segment made cash payments of
$2.8 million during the year ended December 31, 2003, primarily related to various earn-outs and deferred purchase price consideration on
prior year acquisitions. Also, the Company’s national representation business acquired new contracts for a total of $42.6 million, of which
$12.6 million was paid in cash during the year ended December 31, 2003 and $30.0 million was recorded as a liability at December 31, 2003.
2002 Acquisitions:
Ackerley Merger
On June 14, 2002, the Company consummated its merger with The Ackerley Group, Inc. (“Ackerley”). Pursuant to the terms of the merger
agreement, each share of Ackerley ordinary and Class B common stock was exchanged for 0.35 shares of the Company’s common stock. After
canceling 1.2 million shares of Ackerley common stock that were held by the Company prior to the signing of the merger agreement,
approximately 12.0 million shares of the Company’s common stock were issued to Ackerley shareholders. The Company also assumed all of
Ackerley’s outstanding employee stock options, which as of the merger date were exercisable for approximately 114,000 shares of the
Company’s common stock. The merger is valued at approximately $493.0 million based on the number of the Company’s common shares
issued, which were at the average share price at the signing of the merger agreement, the historical cost of the Ackerley shares held prior to the
merger date and the fair value of the employee stock options at the merger date. In addition, the Company assumed all of Ackerley’s
outstanding debt, which had a fair value of $319.0 million at the merger date. The Company refinanced Ackerley’s credit facility and made a
tender offer for Ackerley’s public debt concurrent with the merger. The tender offer was finalized on July 3, 2002 at a price of $1,129 per
$1,000 tendered, resulting in the repurchase of substantially all of Ackerley’s public debt. This merger resulted in the recognition of
approximately $361.0 million of goodwill.
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