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IHEARTCOMMUNICATIONS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
80
During the third quarter of 2014, the FASB issued ASU No. 2014-12, Accounting for Share-Based Payments When the Terms of an
Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period. This new standard clarifies that a
performance target in a share-based compensation award that could be achieved after an employee completes the requisite service
period should be treated as a performance condition that affects the vesting of the award. The standard is effective for annual periods
and interim periods within those annual periods, beginning after December 15, 2015. The Company is currently evaluating the impact
of the provisions of this new standard on its financial position and results of operations.
NOTE 2 – PROPERTY, PLANT AND EQUIPMENT, INTANGIBLE ASSETS AND GOODWILL
Acquisitions
The Company is the beneficiary of Aloha Station Trust, LLC (the “Aloha Trust”), which owns and operates radio stations which the
Aloha Trust is required to divest in order to comply with Federal Communication Commission (“FCC”) media ownership rules, and
which are being marketed for sale. During 2014, the Aloha Trust completed a transaction in which it exchanged two radio stations for
a portfolio of 29 radio stations. In this transaction the Company received 28 radio stations. One radio station was placed into the
Brunswick Station Trust, LLC in order to comply with FCC media ownership rules where it is being marketed for sale, and the
Company is the beneficiary of this trust. The exchange was accounted for at fair value in accordance with ASC 805, Business
Combinations. The disposal of these radio stations resulted in a gain on sale of $43.5 million, which is included in other operating
income, net. This acquisition resulted in an aggregate increase in net assets of $49.2 million, which includes $13.8 million in
indefinite-lived intangible assets, $10.2 million in definite-lived intangibles, $8.1 million in property, plant and equipment and $0.8
million of assumed liabilities. In addition, the Company recognized $17.9 million of goodwill.
During 2012, a wholly owned subsidiary of the Company completed the acquisition of WOR-AM in New York City for $30.0 million
and WFNX-FM in Boston for $14.5 million. These acquisitions resulted in an aggregate increase of $5.3 million to property plant and
equipment, $15.2 million to intangible assets and $24.7 million to goodwill, in addition to $0.7 million of assumed liabilities.
Purchase accounting adjustments were finalized during 2013.
Dispositions
During 2013, the Company’s Americas outdoor segment divested certain outdoor advertising assets in Times Square for
approximately $18.7 million resulting in a gain of $12.2 million. In addition, iHM exercised a put option to sell five radio stations in
the Green Bay market for approximately $17.6 million, resulting in a gain of $0.5 million. These net gains are included in “Other
operating income, net.”
During 2012, the Company’s International outdoor segment sold its international neon business and its outdoor advertising business in
Romania, resulting in an aggregate gain of $39.7 million included in “Other operating income, net.”
Property, Plant and Equipment
The Company’s property, plant and equipment consisted of the following classes of assets at December 31, 2014 and 2013,
respectively.
(In thousands)
December 31,
December 31,
2014
2013
Land, buildings and improvements
$
731,925
$
723,268
Structures
2,999,582
3,021,152
Towers, transmitters and studio equipment
453,044
440,612
Furniture and other equipment
536,255
473,995
Construction in progress
95,671
123,814
4,816,477
4,782,841
Less: accumulated depreciation
2,117,413
1,885,211
Property, plant and equipment, net
$
2,699,064
$
2,897,630
The Company recorded an impairment charge related to property of $4.5 million during 2014. The Company recorded an impairment
charge related to radio broadcast equipment in one market of $1.3 million based on a sales agreement entered into during the fourth