iHeartMedia 2014 Annual Report Download - page 35

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Gain On Marketable Securities
The gain on marketable securities of $130.9 million during 2013 resulted from the sale of the shares we held in Sirius XM
Radio, Inc.
Equity In Loss Of Nonconsolidated Affiliates
Equity in loss of nonconsolidated affiliates of $9.4 million for 2014 primarily related to the $4.5 million gain on the sale of
our 50% interest in Buspak in the third quarter, offset by the first quarter 2014 sale of our 50% interest in Australian Radio Network
Pty Ltd (“ARN”), which included a loss on the sale of $2.4 million and $11.5 million of foreign exchange losses that were reclassified
from accumulated other comprehensive income at the date of the sale.
Equity in loss of nonconsolidated affiliates of $77.7 million for 2013 primarily included the loss from our investments in
Australia Radio Network and New Zealand Radio Network. On February 18, 2014, a subsidiary of ours sold its 50% interest in ARN.
As of December 31, 2013 the book value of our investment in ARN exceeded the estimated selling price. Accordingly, we recorded
an impairment charge of $95.4 million during the fourth quarter of 2013 to write down the investment to its estimated fair value.
Loss On Extinguishment Of Debt
During the fourth quarter of 2014, CC Finco repurchased $57.1 million aggregate principal amount of our 5.5% Senior Notes
due 2016 and $120.0 million aggregate principal amount of our 10.0% Senior Notes due 2018 for a total of $159.3 million, including
accrued interest, through open market purchases. In connection with these transactions, we recognized a net gain of $12.9 million.
In September of 2014, we prepaid $974.9 million of the loans outstanding under its Term Loan B facility and $16.1 million
of the loans outstanding under its Term Loan C-asset sale facility. In connection with these transactions, we recognized a loss of $4.8
million.
During June 2014, we redeemed $567.1 million aggregate principal amount of its outstanding 5.5% Senior Notes due 2014
and $241.0 million aggregate principal amount of its outstanding 4.9% Senior Notes due 2015. In connection with these transactions,
we recognized a loss of $47.5 million.
During the first quarter of 2014, CC Finco repurchased $52.9 million aggregate principal amount of our outstanding 5.5%
Senior Notes due 2014 and $9.0 million aggregate principal amount of our outstanding 4.9% Senior Notes due 2015 for a total of
$63.1 million, including accrued interest, through open market purchases. In connection with these transactions, we recognized a loss
of $3.9 million.
During 2013, we recognized a loss of $84.0 million due to a debt exchange related to our 10.75% Senior Cash Pay Notes due
2016 and 11.00%/11.75% Senior Toggle Notes due 2016 into 14.0% Senior Notes due 2021. In addition, we recognized a loss of $3.9
million due to the write-off of deferred loan costs in connection with the prepayment of Term Loan A of our senior secured credit
facilities.
Other Income (Expense), Net
Other income of $9.1 million for 2014 primarily related to gains on foreign exchange transactions.
In connection with the June 2013 exchange offer of a portion of 10.75% Senior Cash Pay Notes due 2016 and
11.00%/11.75% Senior Toggle Notes due 2016 for newly-issued 14.0% Senior Notes due 2021 and in connection with the senior
secured credit facility amendments discussed elsewhere in the MD&A, all of which were accounted for as modifications of existing
debt, we incurred expenses of $23.6 million partially offset by $1.8 million in foreign exchange gains on short-term intercompany
accounts.
Income Tax Benefit (Expense)
The effective tax rate for the year ended December 31, 2014 was (8.3%) as compared to 17.3% for the year ended December
31, 2013. The effective tax rate for 2014 was impacted by the $339.8 million valuation allowance recorded against the Company’s
current period federal and state net operating losses due to the uncertainty of the ability to utilize those losses in future periods. This
expense was partially offset by $28.9 million in net tax benefits associated with a decrease in unrecognized tax benefits resulting from
the expiration of statutes of limitations to assess taxes in the United Kingdom and several state jurisdictions.