iHeartMedia 2004 Annual Report Download - page 84
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NOTE J - INCOME TAXES
Significant components of the provision for income tax expense (benefit) are as follows:
Significant components of the Company’s deferred tax liabilities and assets as of December 31, 2004 and 2003 are as follows:
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 tax deductible goodwill created from the Company’s various stock acquisitions. As discussed in Note B, in 2004 the Company
adopted D-108, which resulted in the Company recording a non-cash charge of approximately $4.9 billion, net of deferred tax of $3.0 billion,
related to its FCC licenses and permits. In accordance with Statement No. 142, the Company no longer amortizes FCC licenses and permits.
Thus, a deferred tax benefit for the difference between book and tax amortization for the Company’s FCC licenses, permits 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 related to its FCC licenses, permits and tax deductible goodwill or
sells its FCC licenses or permits. As the Company continues to amortize its tax basis in its FCC licenses, permits and tax deductible goodwill,
the deferred tax liability will increase over time.
81
(In thousands) 2004 2003 2002
Current - federal $266,328 $197,608 $102,785
Current - foreign 48,764 25,542 33,594
Current - state 19,082 23,531 12,764
Total current 334,174 246,681 149,143
Deferred - federal 188,594 519,689 350,237
Deferred - foreign (20,540) (31,142) (36,034)
Deferred - state 16,165 44,545 30,020
Total deferred 184,219 533,092 344,223
Income tax expense (benefit) $518,393 $779,773 $493,366
(In thousands) 2004 2003
Deferred tax liabilities:
Intangibles and fixed assets $263,109 $2,944,240
Unrealized gain in marketable securities 27,629 208,854
Foreign 35,697 60,444
Equity in earnings 14,995 41,644
Investments 1,909 1,860
Other 13,292 11,830
Total deferred tax liabilities 356,631 3,268,872
Deferred tax assets:
Accrued expenses 25,538 99,232
Long-term debt 67,361 97,167
Net operating loss carryforwards 5,578 9,522
Bad debt reserves 16,073 17,473
Deferred income 12,184 20,028
Other 34,332 36,785
Total gross deferred tax assets 161,066 280,207
Valuation allowance —60,672
Total deferred tax assets 161,066 219,535
Net deferred tax liabilities $195,565 $3,049,337