iHeartMedia 2006 Annual Report Download - page 74

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74
Other Investments
Other investments of $245.7 million and $324.6 million at December 31, 2006 and 2005, respectively, include
marketable equity securities and other investments classified as follows:
(In thousands) Fair Unrealized
Investments Value Gains (Losses) Net Cost
2006
Available-for sale $ 154,297 $ 118,563 $ ― $ 118,563 $ 35,734
Trading 74,953 67,695 ― 67,695 7,258
Other cost investments 16,499 ― ― ― 16,499
Total $ 245,749 $ 186,258 $ ― $ 186,258 $ 59,491
(In thousands) Fair Unrealized
Investments Value Gains (Losses) Net Cost
2005
Available-for sale $ 251,904 $ 216,170 $ ― $ 216,170 $ 35,734
Trading 54,486 47,228 ― 47,228 7,258
Other cost investments 18,191 ― ― ― 18,191
Total $ 324,581 $ 263,398 $ ― $ 263,398 $ 61,183
A certain amount of the Company’s trading securities secure its obligations under forward exchange contracts
discussed in Note H.
Accumulated net unrealized gain (loss) on available-for-sale securities, net of tax, of $76.1 million and $136.6
million were recorded in shareholders’ equity in “Accumulated other comprehensive income” at December 31, 2006
and 2005, respectively. The net unrealized gain (loss) on trading securities of $20.5 million and $17.5 million for
the years ended December 31, 2006 and 2005, respectively, is recorded on the statement of operations in “Gain
(loss) on marketable securities”. Other cost investments include various investments in companies for which there
is no readily determinable market value.
During 2004, the Company sold its remaining investment in Univision Corporation for $599.4 million in net
proceeds. As a result, it recorded a gain of $47.0 million in “Gain (loss) on marketable securities”.
NOTE F - ASSET RETIREMENT OBLIGATION
The Company has an asset retirement obligation of $59.3 million as of December 31, 2006 which is reported in
“Other long-term liabilities”. The liability relates to the Company’s obligation to dismantle and remove its outdoor
advertising displays from leased land and to reclaim the site to its original condition upon the termination or non-
renewal of a lease. The liability is capitalized as part of the related long-lived assets’ carrying value. Due to the
high rate of lease renewals over a long period of time, the calculation assumes that all related assets will be removed
at some period over the next 50 years. An estimate of third-party cost information is used with respect to the
dismantling of the structures and the reclamation of the site. The interest rate used to calculate the present value of
such costs over the retirement period is based on an estimated risk adjusted credit rate for the same period.
The following table presents the activity related to the Company’s asset retirement obligation:
(In thousands) 2006 2005
Balance at January 1 $ 49,807 $ 49,216
Adjustment due to change in estimate of related costs 7,581 (1,344)
Accretion of liability 3,539 3,616
Liabilities settled (1,647) (1,681)
Balance at December 31 $ 59,280 $ 49,807