XML 80 R16.htm IDEA: XBRL DOCUMENT
v3.2.0.727

Shareholders' Deficit | 12 Months Ended
--- | ---
Dec. 31, 2014
Shareholders' Deficit | NOTE 10 – SHAREHOLDERS’ DEFICIT The Company reports its noncontrolling interests in consolidated subsidiaries as a component of equity separate from the Company’s equity. The following table shows the changes in member’s deficit attributable to the Company and the noncontrolling interests of subsidiaries in which the Company has a majority, but not total ownership interest:
(In thousands) |  | The Company |  |  | Noncontrolling Interests |  |  | Consolidated |
Balances at January 1, 2014 |  | $ | (8,942,166) |  |  | $ | 245,531 |  |  | $ | (8,696,635) |
Net income (loss) |  |  | (793,761) |  |  |  | 31,603 |  |  |  | (762,158) |
Dividends and other payments to noncontrolling interests |  |  | - |  |  |  | (40,027) |  |  |  | (40,027) |
Purchase of additional noncontrolling interests |  |  | (46,806) |  |  |  | (1,944) |  |  |  | (48,750) |
Foreign currency translation adjustments |  |  | (101,980) |  |  |  | (19,898) |  |  |  | (121,878) |
Unrealized holding gain on marketable securities |  |  | 285 |  |  |  | 42 |  |  |  | 327 |
Other adjustments to comprehensive loss |  |  | (10,214) |  |  |  | (1,224) |  |  |  | (11,438) |
Reclassifications |  |  | 3,317 |  |  |  | - |  |  |  | 3,317 |
Other, net |  |  | 1,977 |  |  |  | 10,057 |  |  |  | 12,034 |
Balances at December 31, 2014 |  | $ | (9,889,348) |  |  | $ | 224,140 |  |  | $ | (9,665,208) |
(In thousands) |  | The Company |  |  | Noncontrolling Interests |  |  | Consolidated |
Balances at January 1, 2013 |  | $ | (8,299,188) |  |  | $ | 303,997 |  |  | $ | (7,995,191) |
Net income (loss) |  |  | (606,883) |  |  |  | 23,366 |  |  |  | (583,517) |
Dividends and other payments to noncontrolling interests |  |  | - |  |  |  | (91,887) |  |  |  | (91,887) |
Foreign currency translation adjustments |  |  | (29,755) |  |  |  | (3,246) |  |  |  | (33,001) |
Unrealized holding gain on marketable securities |  |  | 16,439 |  |  |  | 137 |  |  |  | 16,576 |
Unrealized holding gain on cash flow derivatives |  |  | 48,180 |  |  |  | - |  |  |  | 48,180 |
Other adjustments to comprehensive loss |  |  | 5,932 |  |  |  | 800 |  |  |  | 6,732 |
Reclassifications |  |  | (83,585) |  |  |  | (167) |  |  |  | (83,752) |
Other, net |  |  | 6,694 |  |  |  | 12,531 |  |  |  | 19,225 |
Balances at December 31, 2013 |  | $ | (8,942,166) |  |  | $ | 245,531 |  |  | $ | (8,696,635) |
Dividends The Company has not paid cash dividends since its formation and its ability to pay dividends is subject to restrictions should it seek to do so in the future. iHeart’s debt financing arrangements include restrictions on its ability to pay dividends thereby limiting the Company’s ability to pay dividends. Share-Based Compensation Stock Options The Company does not have any compensation plans under which it grants stock awards to employees. Prior to the merger, iHeartCommunications granted options to purchase its common stock to its employees and directors and its affiliates under its various equity incentive plans typically at no less than the fair value of the underlying stock on the date of grant. These options were granted for a term not exceeding ten years and were forfeited, except in certain circumstances, in the event the employee or director terminated his or her employment or relationship with iHeartCommunications or one of its affiliates. Prior to acceleration, if any, in connection with the merger, these options vested over a period of up to five years. All equity incentive plans contained anti-dilutive provisions that permitted an adjustment of the number of shares of iHeartCommunications’ common stock represented by each option for any change in capitalization. The Company has granted options to purchase its shares of Class A common stock to certain key executives under its equity incentive plan at no less than the fair value of the underlying stock on the date of grant. These options are granted for a term not to exceed ten years and are forfeited, except in certain circumstances, in the event the executive terminates his or her employment or relationship with the Company or one of its affiliates. Approximately three-fourths of the options outstanding at December 31, 2014 vest based solely on continued service over a period of up to five years with the remainder becoming eligible to vest over a period of up to five years if certain predetermined performance targets are met. The equity incentive plan contains antidilutive provisions that permit an adjustment of the number of shares of Parent’s common stock represented by each option for any change in capitalization. The Company accounts for its share-based payments using the fair value recognition provisions of ASC 718-10. The fair value of the portion of options that vest based on continued service is estimated on the grant date using a Black-Scholes option-pricing model and the fair value of the remaining options which contain vesting provisions subject to service, market and performance conditions is estimated on the grant date using a Monte Carlo model. Expected volatilities were based on historical volatility of peer companies’ stock, including the Company, over the expected life of the options. The expected life of the options granted represents the period of time that the options granted are expected to be outstanding. The Company used historical data to estimate option exercises and employee terminations within the valuation model. The Company includes estimated forfeitures in its compensation cost and updates the estimated forfeiture rate through the final vesting date of awards. The risk free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for periods equal to the expected life of the option. No options were granted during the years ended December 31, 2014 and 2013. The following assumptions were used to calculate the fair value of the options granted during the year ended December 31, 2012:
|  | Years Ended December 31,
|  | 2014(1) |  | 2013(1) |  | 2012
Expected volatility |  | N/A |  | N/A |  | 71% – 77%
Expected life in years |  | N/A |  | N/A |  | 6.3 – 6.5
Risk-free interest rate |  | N/A |  | N/A |  | 0.97% – 1.55%
Dividend yield |  | N/A |  | N/A |  | 0%
(1) No options were granted in 2013 and 2014 The following table presents a summary of the Company’s stock options outstanding at and stock option activity during the year ended December 31, 2014 (“Price” reflects the weighted average exercise price per share):
(In thousands, except per share data) |  | Options |  |  | Price |  |  | Weighted Average Remaining Contractual Term
Outstanding, January 1, 2014 |  |  | 2,509 |  |  | $ | 33.11 |  |  |
Granted(1) |  |  | - |  |  |  | - |  |  |
Exercised |  |  | - |  |  |  | - |  |  |
Forfeited |  |  | (125) |  |  |  | 36.00 |  |  |
Expired |  |  | (83) |  |  |  | 36.00 |  |  |
Outstanding, December 31, 2014 (2) |  |  | 2,301 |  |  |  | 32.85 |  |  | 4.3years
Exercisable |  |  | 1,480 |  |  |  | 31.95 |  |  | 4.0years
Expected to Vest |  |  | 797 |  |  |  | 35.20 |  |  | 4.7years
| (1) | The weighted average grant date fair value of options granted during the years ended December 31, 2012 was $2.68 per share. No options were granted during the years ended December 31, 2013 and 2014.
| (2) | Non-cash compensation expense has not been recorded with respect to 0.6 million shares as the vesting of these options is subject to performance conditions that have not yet been determined probable to meet.
A summary of the Company’s unvested options and changes during the year ended December 31, 2014 is presented below:
(In thousands, except per share data) |  | Options |  |  | Weighted Average Grant Date Fair Value |
Unvested, January 1, 2014 |  |  | 1,086 |  |  | $ | 10.74 |
Granted |  |  | - |  |  |  | - |
Vested(1) |  |  | (140) |  |  |  | 2.32 |
Forfeited |  |  | (125) |  |  |  | 2.16 |
Unvested, December 31, 2014 |  |  | 821 |  |  |  | 13.61 |
| (1) | The total fair value of the options vested during the years ended December 31, 2014, 2013 and 2012 was $0.3 million, $6.3 million and $3.9 million, respectively.
Restricted Stock Awards The Company has granted restricted stock awards to its employees and affiliates under its equity incentive plan. The restricted stock awards are restricted in transferability for a term of up to five years. Restricted stock awards are forfeited, except in certain circumstances, in the event the employee terminates his or her employment or relationship with the Company prior to the lapse of the restriction. Dividends or distributions paid in respect of unvested restricted stock awards will be held by the Company and paid to the recipients of the restricted stock awards upon vesting of the shares. The following table presents a summary of the Company’s restricted stock outstanding and restricted stock activity as of and during the year ended December 31, 2014 (“Price” reflects the weighted average share price at the date of grant):
(In thousands, except per share data) |  | Awards |  |  | Price |
Outstanding, January 1, 2014 |  |  | 3,919 |  |  | $ | 3.35 |
Granted |  |  | 1,826 |  |  |  | 7.86 |
Vested (restriction lapsed) |  |  | (506) |  |  |  | 3.14 |
Forfeited |  |  | (710) |  |  |  | 8.85 |
Outstanding, December 31, 2014 |  |  | 4,529 |  |  |  | 5.02 |
CCOH Share-Based Awards CCOH Stock Options The Company’s subsidiary, CCOH, has granted options to purchase shares of its Class A common stock to employees and directors of CCOH and its affiliates under its equity incentive plan at no less than the fair market value of the underlying stock on the date of grant. These options are granted for a term not exceeding ten years and are forfeited, except in certain circumstances, in the event the employee or director terminates his or her employment or relationship with CCOH or one of its affiliates. These options vest solely on continued service over a period of up to five years. The equity incentive stock plan contains anti-dilutive provisions that permit an adjustment of the number of shares of CCOH’s common stock represented by each option for any change in capitalization. CCOH determined that the CCOH dividend discussed in Note 5 was considered a change in capitalization and therefore adjusted outstanding options as of March 15, 2012. No incremental compensation cost was recognized in connection with the adjustment. The fair value of each option awarded on CCOH common stock is estimated on the date of grant using a Black-Scholes option-pricing model. Expected volatilities are based on historical volatility of CCOH’s stock over the expected life of the options. The expected life of options granted represents the period of time that options granted are expected to be outstanding. CCOH uses historical data to estimate option exercises and employee terminations within the valuation model. CCOH includes estimated forfeitures in its compensation cost and updates the estimated forfeiture rate through the final vesting date of awards. The risk free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for periods equal to the expected life of the option. The following assumptions were used to calculate the fair value of CCOH’s options on the date of grant:
|  | Years Ended December 31,
|  | 2014 |  | 2013 |  | 2012
Expected volatility |  | 54% – 56% |  | 55% – 56% |  | 54% – 56%
Expected life in years |  | 6.3 |  | 6.3 |  | 6.3
Risk-free interest rate |  | 1.73% – 2.08% |  | 1.05% – 2.19% |  | 0.92% – 1.48%
Dividend yield |  | 0% |  | 0% |  | 0%
The following table presents a summary of CCOH’s stock options outstanding at and stock option activity during the year ended December 31, 2014 (“Price” reflects the weighted average exercise price per share):
(In thousands, except per share data) |  | Options |  |  | Price |  |  | Weighted Average Remaining Contractual Term |  | Aggregate Intrinsic Value |
Outstanding, January 1, 2014 |  |  | 6,909 |  |  |  | $9.60 |  |  |  |  |  |  |
Granted(1) |  |  | 627 |  |  |  | 8.64 |  |  |  |  |  |  |
Exercised(2) |  |  | (459) |  |  |  | 5.23 |  |  |  |  |  |  |
Forfeited |  |  | (628) |  |  |  | 8.11 |  |  |  |  |  |  |
Expired |  |  | (424) |  |  |  | 10.58 |  |  |  |  |  |  |
Outstanding, December 31, 2014 |  |  | 6,025 |  |  |  | 9.92 |  |  | 5.1years |  |  | $13,956 |
Exercisable |  |  | 4,471 |  |  |  | 10.56 |  |  | 4.1years |  |  | $10,065 |
Expected to vest |  |  | 1,487 |  |  |  | 8.08 |  |  | 7.8years |  |  | $3,729 |
| (1) | The weighted average grant date fair value of CCOH options granted during the years ended December 31, 2014, 2013 and 2012 was $4.69, $4.10 and $4.43 per share, respectively.
| (2) | Cash received from option exercises during the years ended December 31, 2014, 2013 and 2012 was $2.4 million, $4.2 million and $6.4 million, respectively. The total intrinsic value of the options exercised during the years ended December 31, 2014, 2013 and 2012 was $1.5 million, $5.0 million and $7.9 million, respectively.
A summary of CCOH’s unvested options at and changes during the year ended December 31, 2014 is presented below:
(In thousands, except per share data) |  | Options |  |  | Weighted Average Grant Date Fair Value |
Unvested, January 1, 2014 |  |  | 2,645 |  |  | $ | 5.21 |
Granted |  |  | 627 |  |  |  | 4.69 |
Vested(1) |  |  | (1,091) |  |  |  | 5.59 |
Forfeited |  |  | (628) |  |  |  | 4.74 |
Unvested, December 31, 2014 |  |  | 1,553 |  |  |  | 4.92 |
| (1) | The total fair value of CCOH options vested during the years ended December 31, 2014, 2013 and 2012 was $6.1 million, $7.1 million and $11.5 million, respectively.
CCOH Restricted Stock Awards CCOH has also granted both restricted stock and restricted stock unit awards to its employees and affiliates under its equity incentive plan. The restricted stock awards represent shares of Class A common stock that hold a legend which restricts their transferability for a term of up to five years. The restricted stock units represent the right to receive shares upon vesting, which is generally over a period of up to five years. Both restricted stock awards and restricted stock units are forfeited, except in certain circumstances, in the event the employee terminates his or her employment or relationship with CCOH prior to the lapse of the restriction. The following table presents a summary of CCOH’s restricted stock and restricted stock units outstanding at and activity during the year ended December 31, 2014 (“Price” reflects the weighted average share price at the date of grant):
(In thousands, except per share data) |  | Awards |  |  | Price |
Outstanding, January 1, 2014 |  |  | 1,892 |  |  | $ | 6.83 |
Granted |  |  | 1,040 |  |  |  | 8.88 |
Vested (restriction lapsed) |  |  | (64) |  |  |  | 6.86 |
Forfeited |  |  | (410) |  |  |  | 7.76 |
Outstanding, December 31, 2014 |  |  | 2,458 |  |  |  | 7.54 |
Share-Based Compensation Cost The share-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as expense on a straight-line basis over the vesting period. Share-based compensation payments are recorded in corporate expenses and were $10.7 million, $16.7 million and $28.5 million, during the years ended December 31, 2014, 2013 and 2012, respectively. The tax benefit related to the share-based compensation expense for the years ended December 31, 2014, 2013 and 2012 was $4.1 million, $6.3 million and $10.8 million, respectively. As of December 31, 2014, there was $22.4 million of unrecognized compensation cost related to unvested share-based compensation arrangements that will vest based on service conditions. This cost is expected to be recognized over a weighted average period of approximately three years. In addition, as of December 31, 2014, there was $24.7 million of unrecognized compensation cost related to unvested share-based compensation arrangements that will vest based on market, performance and service conditions. This cost will be recognized when it becomes probable that the performance condition will be satisfied. The Company completed a voluntary stock option exchange program on November 19, 2012 and exchanged 2.0 million stock options granted under the Clear Channel 2008 Executive Incentive Plan for 1.8 million replacement restricted share awards with different service and performance conditions. The Company accounted for the exchange program as a modification of the existing awards under ASC 718 and will recognize incremental compensation expense of approximately $1.7 million over the service period of the new awards. In connection with the exchange program, the Company granted an additional 1.5 million restricted stock awards pursuant to a tax assistance program offered to employees participating in the exchange. Of the total 1.5 million restricted stock awards granted, 0.9 million were repurchased by the Company upon expiration of the exchange program while the remaining 0.6 million awards were forfeited. The Company recognized $2.6 million of expense related to the awards granted in connection with the tax assistance program.
(In thousands, except per share data) |  | Years Ended December 31, |
|  | 2014 |  |  | 2013 |  |  | 2012 |
NUMERATOR: |  |  |  |  |  |  |  |  |  |  |  |
Net loss attributable to the Company – common shares |  | $ | (793,761) |  |  | $ | (606,883) |  |  | $ | (424,479) |
Less: Participating securities dividends |  |  | - |  |  |  | 2,566 |  |  |  | 8,456 |
Less: Income (loss) attributable to the Company – unvested shares |  |  | - |  |  |  | - |  |  |  | - |
Net loss attributable to the Company per common share – basic and diluted |  | $ | (793,761) |  |  | $ | (609,449) |  |  | $ | (432,935) |
DENOMINATOR: |  |  |  |  |  |  |  |  |  |  |  |
Weighted average common shares outstanding – basic |  |  | 83,941 |  |  |  | 83,364 |  |  |  | 82,745 |
Effect of dilutive securities: |  |  |  |  |  |  |  |  |  |  |  |
Stock options and common stock warrants(1) |  |  | - |  |  |  | - |  |  |  | - |
Weighted average common shares outstanding – diluted |  |  | 83,941 |  |  |  | 83,364 |  |  |  | 82,745 |
Net loss attributable to the Company per common share: |  |  |  |  |  |  |  |  |  |  |  |
Basic |  | $ | (9.46) |  |  | $ | (7.31) |  |  | $ | (5.23) |
Diluted |  | $ | (9.46) |  |  | $ | (7.31) |  |  | $ | (5.23) |
| (1) | 6.8 million, 6.4 million and 5.4 million stock options and restricted shares were outstanding at December 31, 2014, 2013 and 2012, respectively, that were not included in the computation of diluted earnings per share because to do so would have been anti-dilutive.

X
- Definition The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(d),(e)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21484-112644 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 310 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB TOPIC 4.E) -URI http://asc.fasb.org/extlink&oid=27010918&loc=d3e74512-122707 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 5 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21488-112644 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02.29-31) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section S99 -Paragraph 4 -Subparagraph (SAB TOPIC 4.C) -URI http://asc.fasb.org/extlink&oid=27012166&loc=d3e187143-122770 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 6 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21506-112644 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.3-04) -URI http://asc.fasb.org/extlink&oid=27012166&loc=d3e187085-122770 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 30 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6405834&loc=d3e23285-112656 Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21475-112644 Reference 11: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Glossary Preferred Stock -URI http://asc.fasb.org/extlink&oid=6521494 Reference 12: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21463-112644 Reference 13: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 11 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21564-112644 Reference 14: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Paragraph d -Article 4 Reference 15: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 02 -Paragraph 29, 30, 31 -Article 5 Reference 16: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Staff Accounting Bulletin (SAB) -Number Topic 4 -Section E Reference 17: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Article 4 Reference 18: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Staff Accounting Bulletin (SAB) -Number Topic 4 -Section C Reference 19: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 04 -Article 3 + Details
Name: | us-gaap_StockholdersEquityNoteDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration