iHeartMedia 2007 Annual Report Download - page 90

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Prior to the adoption of Statement 123(R), the Company presented all tax benefits of deductions resulting from the exercise of stock options as
operating cash flows in the Statement of Cash Flows. Statement 123(R) requires the cash flows from the tax benefits resulting from tax
deductions in excess of the compensation cost recognized for those options (excess tax benefits) to be classified as financing cash flows. The
excess tax benefit that is required to be classified as a financing cash inflow after adoption of Statement 123(R) is not material.
The following table illustrates the effect on net income and earnings per share for the year ended December 31, 2005 as if the Company had
applied the fair value recognition provisions of Statement 123(R) to options granted under the Company’s stock option plans in all periods
presented. For purposes of this pro forma disclosure, the value of the options, excluding restricted stock awards, is estimated using a Black-
Scholes option-pricing model and amortized to expense over the options’ vesting periods.
89
(In thousands, except per share data) 2005
Income before discontinued operations:
Reported $580,771
Add: Share-based payments included in reported net income, net of related tax effects 6,081
Deduct: Total share-based payments determined under fair value based method for all awards, net of related tax effects (30,426)
Pro Forma $556,426
Income from discontinued operations, net of tax:
Reported $354,891
Add: Share-based payments included in reported net income, net of related tax effects 1,313
Deduct: Total share-based payments determined under fair value based method for all awards, net of related tax effects 4,067
Pro Forma $360,271
Income before discontinued operations per common share:
Basic:
Reported $1.06
Pro Forma $1.02
Diluted:
Reported $1.06
Pro Forma $1.02
Discontinued operations, net per common share:
Basic:
Reported $.65
Pro Forma $.66
Diluted:
Reported $.65
Pro Forma $ .66