iHeartMedia 2006 Annual Report Download - page 69

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69
provisions of Statement 144, the Company classified these markets’ assets and liabilities that are subject to transfer
under the definitive asset purchase agreements as “held for sale” at December 31, 2006 and 2005. Accordingly,
depreciation and amortization associated with these assets was discontinued. Additionally, the Company
determined that these markets comprise operations and cash flows that can be clearly distinguished, operationally
and for financial reporting purposes, from the rest of the Company. Therefore, the results of operations for these
markets were presented as discontinued operations, net of tax, for all periods presented. As of December 31, 2006,
the Company determined that the estimated fair value less costs to sell attributable to these markets was in excess of
the carrying value of their related net assets held for sale.
Summarized operating results from these markets are as follows:
(In thousands) 2006 2005 2004
Revenue $ 32,455 $ 31,613 $ 33,936
Income before income taxes and cumulative effect of a change in
accounting principle
$ 4,669
$ 2,477
$ 3,789
Included in income from discontinued operations, net is income tax expense of $1.9 million, $1.0 million and $1.5
million for the years ended December 31, 2006, 2005 and 2004, respectively.
NOTE C - INTANGIBLE ASSETS AND GOODWILL
Definite-lived Intangibles
The Company has definite-lived intangible assets which consist primarily of transit and street furniture contracts
and other contractual rights in the outdoor segments, talent and program right contracts in the radio segment, and in
the Company’s other segment, representation contracts for non-affiliated radio and television stations, all of which
are amortized over the respective lives of the agreements. Other definite-lived intangible assets are amortized over
the shorter of either the respective lives of the agreements or over the period of time the assets are expected to
contribute directly or indirectly to the Company’s future cash flows. The following table presents the gross carrying
amount and accumulated amortization for each major class of definite-lived intangible assets at December 31, 2006
and 2005:
(In thousands) 2006
2005
Gross Carrying
Amount
Accumulated
Amortization
Gross Carrying
Amount
Accumulated
Amortization
Transit, street furniture, and other
outdoor contractual rights
$ 821,364
$ 530,063
$ 651,455
$ 408,018
Talent contracts 125,270 115,537 202,161 175,553
Representation contracts 349,493 175,658 313,004 133,987
Other 124,881 76,933 135,782 104,054
Total $ 1,421,008 $ 898,191 $ 1,302,402 $ 821,612
Total amortization expense from continuing operations related to definite-lived intangible assets for the years ended
December 31, 2006, 2005 and 2004 was $150.8 million, $154.2 million and $133.4 million, respectively. The
following table presents the Company’s estimate of amortization expense for each of the five succeeding fiscal
years for definite-lived intangible assets that exist at December 31, 2006:
(In thousands)
2007 $ 96,877
2008 79,059
2009 66,727
2010 50,303
2011 42,420
As acquisitions and dispositions occur in the future and as purchase price allocations are finalized, amortization
expense may vary.