iHeartMedia 2010 Annual Report Download - page 36

Corporate Expenses
Corporate expenses increased $30.1 million during 2010 compared to 2009, primarily due to a $49.9 million increase in bonus
expense from improved operating performance and a $53.8 million increase primarily related to headcount from centralization efforts
and the expansion of corporate capabilities. Partially offsetting the 2010 increase was $23.5 million related to an unfavorable outcome
of litigation recorded in 2009, a $22.6 million decrease in expenses during 2010 associated with our restructuring program and an
$18.6 million decrease related to various corporate accruals.
D
epreciation and Amortization
Depreciation and amortization decreased $32.6 million during 2010 compared to 2009, primarily as a result of assets in our
International outdoor segment that became fully amortized during 2009. Additionally, 2009 included $8.0 million of additional
amortization expense associated with the finalization of purchase price allocations to the acquired intangible assets in our Radio
segment.
I
mpairment Charges
We performed our annual impairment test on October 1, 2010 on our goodwill, FCC licenses, billboard permits, and other
intangible assets and recorded impairment charges of $15.4 million. We also performed impairment tests on our goodwill, FCC
licenses, billboard permits, and other intangible assets in 2009 and recorded impairment charges of $4.1 billion. Please see the notes
to the consolidated financial statements included in Item 8 of Part II of this Annual Report on Form 10-K for a further description of
the impairment charges.
Other Operating Expense - Net
Other operating expense of $16.7 million for 2010 primarily related to a $25.3 million loss recorded as a result of the transfer of
our subsidiary’s interest in its Branded Cities business, partially offset by a $6.2 million gain on the sale of representation contracts.
The $50.8 million expense for 2009 is primarily related to a $42.0 million loss on the sale and exchange of radio stations and a
$20.9 million loss on the sale of our taxi advertising business. The losses were partially offset by a $10.1 million gain on the sale of
Americas and International outdoor assets.
I
nterest Expense
Interest expense increased $32.5 million during 2010 compared to 2009, primarily as a result of the issuance of $2.5 billion in
subsidiary senior notes in December 2009. This increase was partially offset by decreased interest expense due to maturities of the
4.5% senior notes due January 2010, repurchases of senior toggle notes during the first quarter of 2010, repurchases of senior notes
during the fourth quarter of 2009 and prepayment of $2.0 billion of term loans in December 2009. Our weighted average cost of debt
for 2010 and 2009 was 6.1% and 5.8%, respectively.
L
oss on Marketable Securities
The loss on marketable securities of $6.5 million and $13.4 million in 2010 and 2009, respectively, related primarily to the
impairment of Independent News & Media PLC (“INM”). The fair value of INM was below cost for an extended period of time. As a
result, we considered the guidance in ASC 320-10-S99 and reviewed the length of the time and the extent to which the market was
less than cost and the financial condition and near-term prospects of the issuer. After this assessment, we concluded that the
impairment at each date was other than temporary and recorded non-cash impairment charges to our investment in INM as noted
above.
E
quity in Earnings (Loss) of Nonconsolidated Affiliates
Equity in earnings of nonconsolidated affiliates increased in 2010 and was partially offset by an $8.3 million impairment of an
equity investment in our International outdoor segment. Equity in loss of nonconsolidated affiliates for 2009 included a $22.9 million
impairment of equity investments in our International outdoor segment in addition to a $4.0 million loss on the sale of a portion of our
investment in Grupo ACIR Communicaciones (“Grupo ACIR”).
Other Income (Expense) – Net
Other income of $46.5 million in 2010 primarily related to an aggregate gain of $60.3 million on the repurchase of our senior
toggle notes partially offset by a $12.8 million foreign exchange loss on the translation of short-term intercompany notes. Please refer
to the “Debt Repurchases, Tender Offers, Maturities and Other” section within this Management’s Discussion and Analysis of
Financial Condition and Results of Operations (“MD&A”) for additional discussion of the repurchase.
32