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ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: | 3 Months Ended
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Mar. 31, 2014
Accounting Policies [Abstract] |
Organization, Consolidation, Basis of Presentation, Business Description and Accounting Policies [Text Block] | 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (a) Organization Radio One, Inc. (a Delaware corporation referred to as “Radio One”) and its subsidiaries (collectively, the “Company”) is an urban-oriented, multi-media company that primarily targets African-American and urban consumers. Our core business is our radio broadcasting franchise that is the largest radio broadcasting operation that primarily targets African-American and urban listeners. We currently own and/or operate 54 broadcast stations located in 16 urban markets in the United States. While our primary source of revenue is the sale of local and national advertising for broadcast on our radio stations, our strategy is to operate the premier multi-media entertainment and information content provider targeting African-American and urban consumers. Thus, we have diversified our revenue streams by making acquisitions and investments in other complementary media properties. Our other media interests include our approximately 51.9% controlling ownership interest in TV One, LLC (“TV One”), an African-American targeted cable television network that we own together with an affiliate of Comcast Corporation; our 80.0% controlling ownership interest in Reach Media, Inc. (“Reach Media”), which operates the Tom Joyner Morning Show, the Rickey Smiley Morning Show, the Yolanda Adams Morning Show, the Russ Parr Morning Show and the DL Hughley Show; and our ownership of Interactive One, LLC (“Interactive One”), an online platform serving the African-American community through social content, news, information, and entertainment websites, including News One, UrbanDaily and HelloBeautiful and online social networking websites, including BlackPlanet and MiGente. Through our national multi-media presence, we provide advertisers with a unique and powerful delivery mechanism to the African-American and urban audiences. Recently, the Company has executed a letter of intent with MGM to invest in MGM’s development of a world-class casino property, MGM National Harbor, located in Prince George’s County, Maryland. This investment further diversifies our platform in the entertainment industry while still focusing on our core demographic. Beginning November 1, 2012, our Columbus, Ohio radio station, WJKR-FM (The Jack, 98.9 FM) was made the subject of a local marketing agreement (“LMA”), and on February 15, 2013, the Company sold that station’s assets. The results from operations of this station for the three months ended March 31, 2013, have been reclassified as discontinued operations in the accompanying consolidated financial statements. As of June 2011, our remaining Boston radio station was made the subject of a time brokerage agreement (“TBA”) whereby we have made available, for a fee, air time on this station to another party. In December 2013, we renegotiated the terms of the TBA, which now expires December 1, 2016, at which time the station will be conveyed. As a result, that station’s radio broadcasting license has been classified as a long-term other asset as of March 31, 2014, and December 31, 2013, and is being amortized through the anticipated conveyance date. As part of our consolidated financial statements, consistent with our financial reporting structure and how the Company currently manages its businesses, we have provided selected financial information on the Company’s four reportable segments: (i) Radio Broadcasting; (ii) Reach Media; (iii) Internet; and (iv) Cable Television. (See Note 8 – Segment Information.) (b) Interim Financial Statements The interim consolidated financial statements included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). In management’s opinion, the interim financial data presented herein include all adjustments (which include only normal recurring adjustments) necessary for a fair presentation. Certain information and footnote disclosures normally included in the financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) have been condensed or omitted pursuant to such rules and regulations. Results for interim periods are not necessarily indicative of results to be expected for the full year. This Form 10-Q should be read in conjunction with the financial statements and notes thereto included in the Company’s 2013 Annual Report on Form 10-K.
(c) Financial Instruments Financial instruments as of March 31, 2014, and December 31, 2013, consisted of cash and cash equivalents, investments, trade accounts receivable, accounts payable, certain accrued expenses, long-term debt and redeemable noncontrolling interests. The carrying amounts approximated fair value for each of these financial instruments as of March 31, 2014, and December 31, 2013, except for the Company’s outstanding senior subordinated notes. The 121/2%/15% Senior Subordinated Notes that the Company repurchased or otherwise redeemed in March 2014 had a carrying value of approximately $327.0 million and a fair value of approximately $328.7 million as of December 31, 2013. Our new 9.25% Senior Subordinated Notes which are due in February 2020 (the “2020 Notes”) had a carrying value of approximately $335.0 million and fair value of approximately $355.9 million as of March 31, 2014. The fair values of the 2020 Notes, classified as Level 2 instruments, were determined based on the trading values of these instruments in an inactive market as of the reporting date. The Company’s 10% Senior Secured TV One Notes due March 2016 are classified as Level 3 since they are not market traded financial instruments. (d) Revenue Recognition Within our radio broadcasting and Reach Media segments, the Company recognizes revenue for broadcast advertising when a commercial is broadcast and is reported, net of agency and outside sales representative commissions, in accordance with Accounting Standards Codification (“ASC”) 605, “Revenue Recognition.” Agency and outside sales representative commissions are calculated based on a stated percentage applied to gross billing. Generally, clients remit the gross billing amount to the agency or outside sales representative, and the agency or outside sales representative remits the gross billing, less their commission, to the Company. For our radio broadcasting segment, agency and outside sales representative commissions were approximately $7.2 million and $6.9 million for the three months ended March 31, 2014 and 2013, respectively. Interactive One generates the majority of the Company’s internet revenue, and derives such revenue principally from advertising services on non-radio station branded but Company owned websites, including advertising aimed at diversity recruiting and studio services, where Interactive One provides services to other publishers. Advertising services include the sale of banner and sponsorship advertisements. Advertising revenue is recognized either as impressions (the number of times advertisements appear in viewed pages) are delivered, when “click through” purchases are made or leads are generated, or ratably over the contract period, where applicable. In addition, Interactive One derives revenue from its studio operations, which provide third-party clients with digital platforms and expertise. In the case of the studio operations, revenue is recognized primarily based on fixed contractual monthly fees or as a share of the third party’s reported revenue. TV One, the driver of revenues in our cable television segment, derives advertising revenue from the sale of television air time to advertisers, net of agency and outside sales representative commissions, and recognizes revenue when the advertisements are run. TV One also receives affiliate fees and records revenue during the term of various affiliation agreements based on the most recent subscriber counts reported by the applicable affiliate. (e) Launch Support TV One has entered into certain affiliate agreements requiring various payments by TV One for launch support. Launch support assets are used to initiate carriage under new affiliation agreements and are amortized over the term of the respective contracts. Launch amortization is recorded as a reduction to revenue to the extent that revenue is recognized from the vendor, and any excess amortization is recorded as launch support amortization expense. The weighted-average amortization period for launch support is approximately 10.9 years at each of March 31, 2014, and December 31, 2013. The remaining weighted-average amortization period for launch support is 1.2 years and 1.4 years as of March 31, 2014, and December 31, 2013, respectively. For each of the three month periods ended March 31, 2014, and 2013, launch asset amortization of approximately $2.5 million was recorded as a reduction of revenue. (f) Barter Transactions The Company provides advertising time in exchange for programming content and certain services and accounts for these exchanges in accordance with ASC 605, “Revenue Recognition.” The terms of these exchanges generally permit the Company to preempt such time in favor of advertisers who purchase time in exchange for cash. The Company includes the value of such exchanges in both net revenue and station operating expenses. The valuation of barter time is based upon the fair value of the network advertising time provided for the programming content and services received. For the three months ended March 31, 2014 and 2013, barter transaction revenues were $819,000 and $618,000, respectively. Additionally, barter transaction costs were reflected in programming and technical expenses and selling, general and administrative expenses of $778,000 and $549,000 and $41,000 and $69,000, for the three months ended March 31, 2014 and 2013, respectively.
(g) Earnings Per Share Basic earnings per share is computed on the basis of the weighted average number of shares of common stock (Classes A, B, C and D) outstanding during the period. Diluted earnings per share is computed on the basis of the weighted average number of shares of common stock plus the effect of dilutive potential common shares outstanding during the period using the treasury stock method. The Company’s potentially dilutive securities include stock options and restricted stock. Diluted earnings per share considers the impact of potentially dilutive securities except in periods in which there is a net loss, as the inclusion of the potentially dilutive common shares would have an anti-dilutive effect. The following table sets forth the calculation of basic and diluted earnings per share from continuing operations (in thousands, except share and per share data):
|  | Three Months Ended March 31, |
|  | 2014 |  | 2013 |
|  | (Unaudited) |
Numerator: |  |  |  |  |  |  |
Net loss attributable to common stockholders |  | $ | (25,183) |  | $ | (18,996) |
Denominator: |  |  |  |  |  |  |
Denominator for basic net loss per share - weighted-average outstanding shares |  |  | 47,441,175 |  |  | 49,861,964 |
Effect of dilutive securities: |  |  |  |  |  |  |
Stock options and restricted stock |  |  | - |  |  | - |
Denominator for diluted net loss per share - weighted-average outstanding shares |  |  | 47,441,175 |  |  | 49,861,964 |
Net loss attributable to common stockholders per share -basic and diluted |  | $ | (0.53) |  | $ | (0.38) |
All stock options and restricted stock awards were excluded from the diluted calculation for the three months ended March 31, 2014 and 2013, as their inclusion would have been anti-dilutive. The following table summarizes the potential common shares excluded from the diluted calculation.
|  | Three Months Ended March 31, |
|  | 2014 |  | 2013 |
|  | (Unaudited) |
|  | (In thousands) |
Stock options |  |  | 4,300 |  |  | 4,630 |
Restricted stock awards |  |  | 130 |  |  | 57 |
(h) Fair Value Measurements We report our financial and non-financial assets and liabilities measured at fair value on a recurring and non-recurring basis under the provisions of ASC 820, “Fair Value Measurements and Disclosures.” ASC 820 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. The fair value framework requires the categorization of assets and liabilities into three levels based upon the assumptions (inputs) used to price the assets or liabilities. Level 1 provides the most reliable measure of fair value, whereas Level 3 generally requires significant management judgment. The three levels are defined as follows:
| Level 1: Inputs are unadjusted quoted prices in active markets for identical assets and liabilities that can be accessed at measurement date.
| Level 2: Observable inputs other than those included in Level 1 (i.e., quoted prices for similar assets or liabilities in active markets or quoted prices for identical assets or liabilities in inactive markets).
| Level 3: Unobservable inputs reflecting management’s own assumptions about the inputs used in pricing the asset or liability.
As of March 31, 2014, and December 31, 2013, the fair values of our financial assets and liabilities are categorized as follows:
|  | Total |  | Level 1 |  | Level 2 |  | Level 3 |
|  | (Unaudited) |
|  | (In thousands) |
As of March 31, 2014 |  |  |  |  |  |  |  |  |  |  |  |  |
Assets subject to fair value measurement: |  |  |  |  |  |  |  |  |  |  |  |  |
Corporate debt securities (a) |  | $ | 913 |  | $ | 913 |  | $ | — |  | $ | — |
Government sponsored enterprise mortgage-backed securities (a) |  |  | 102 |  |  | — |  |  | 102 |  |  | — |
Mutual funds (a) |  |  | 2,335 |  |  | 2,335 |  |  | — |  |  | — |
Total |  | $ | 3,350 |  | $ | 3,248 |  | $ | 102 |  | $ | — |
Liabilities subject to fair value measurement: |  |  |  |  |  |  |  |  |  |  |  |  |
Incentive award plan (b) |  | $ | 2,220 |  | $ | — |  | $ | — |  | $ | 2,220 |
Employment agreement award (c) |  |  | 14,641 |  |  | — |  |  | — |  |  | 14,641 |
Total |  | $ | 16,861 |  | $ | — |  | $ | — |  | $ | 16,861 |
Mezzanine equity subject to fair value measurement: |  |  |  |  |  |  |  |  |  |  |  |  |
Redeemable noncontrolling interests (d) |  | $ | 11,455 |  | $ | — |  | $ | — |  | $ | 11,455 |
As of December 31, 2013 |  |  |  |  |  |  |  |  |  |  |  |  |
Assets subject to fair value measurement: |  |  |  |  |  |  |  |  |  |  |  |  |
Corporate debt securities (a) |  | $ | 147 |  | $ | 147 |  | $ | — |  | $ | — |
Mutual funds (a) |  |  | 2,315 |  |  | 2,315 |  |  | — |  |  | — |
Total |  | $ | 2,462 |  | $ | 2,462 |  | $ | — |  | $ | — |
Liabilities subject to fair value measurement: |  |  |  |  |  |  |  |  |  |  |  |  |
Incentive award plan (b) |  | $ | 2,114 |  | $ | — |  | $ | — |  | $ | 2,114 |
Employment agreement award (c) |  |  | 13,688 |  |  | — |  |  | — |  |  | 13,688 |
Total |  | $ | 15,802 |  | $ | — |  | $ | — |  | $ | 15,802 |
Mezzanine equity subject to fair value measurement: |  |  |  |  |  |  |  |  |  |  |  |  |
Redeemable noncontrolling interests (d) |  | $ | 11,999 |  | $ | — |  | $ | — |  | $ | 11,999 |
(a) Where quoted market prices are available in an active market, securities are classified within Level 1 of the valuation hierarchy. If quoted market prices are not available, fair values are estimated using pricing models, quoted prices of securities with similar characteristics or discounted cash flows. (b) These balances are measured based on the estimated enterprise fair value of TV One. Significant inputs to the discounted cash flow analysis include forecasted operating results, discount rate and a terminal value. A third-party valuation firm assisted the Company in estimating TV One’s fair value. (c) Pursuant to an employment agreement (the “Employment Agreement”) executed in April 2008, the Chief Executive Officer (“CEO”) is eligible to receive an award amount equal to 8% of any proceeds from distributions or other liquidity events in excess of the return of the Company’s aggregate investment in TV One. The Company reviews the factors underlying this award at the end of each quarter including the valuation of TV One and an assessment of the probability that the employment agreement will be renewed and contain this provision. There are probability factors included in the calculation of the award related to the likelihood that the award will be realized. The Company’s obligation to pay the award will be triggered only after the Company’s recovery of the aggregate amount of its capital contribution in TV One and only upon actual receipt of distributions of cash or marketable securities or proceeds from a liquidity event with respect to the Company’s membership interest in TV One. The CEO was fully vested in the award upon execution of the Employment Agreement, and the award lapses if the CEO voluntarily leaves the Company or is terminated for cause. A third-party valuation firm assisted the Company in estimating TV One’s fair value. Significant inputs to the discounted cash flow analysis include forecasted operating results, discount rate and a terminal value. The terms of the April 2008 employment agreement remain in effect including eligibility for the TV One award. (d) The redeemable noncontrolling interest in Reach Media is measured at fair value using a discounted cash flow methodology. A third-party valuation firm assisted the Company in estimating the fair value. Significant inputs to the discounted cash flow analysis include forecasted operating results, discount rate and a terminal value. The following table presents the changes in Level 3 liabilities measured at fair value on a recurring basis for the three months ended March 31, 2014 and 2013, respectively:
|  | Incentive Award Plan |  | Employment Agreement Award |  | Redeemable Noncontrolling Interests |
|  | (In thousands) |
Balance at December 31, 2013 |  | $ | 2,114 |  | $ | 13,688 |  | $ | 11,999 |
Net income attributable to noncontrolling interests |  |  | — |  |  | — |  |  | 10 |
Change in fair value |  |  | 106 |  |  | 953 |  |  | (554) |
Balance at March 31, 2014 |  | $ | 2,220 |  | $ | 14,641 |  | $ | 11,455 |
The amount of total losses for the period included in earnings attributable to the change in unrealized losses relating to assets and liabilities still held at the reporting date |  | $ | (106) |  | $ | (953) |  | $ | — |
|  | Incentive Award Plan |  | Employment Agreement Award |  | Redeemable Noncontrolling Interests |
|  | (In thousands) |
Balance at December 31, 2012 |  | $ | 5,345 |  | $ | 11,374 |  | $ | 12,853 |
Net loss attributable to noncontrolling interests |  |  | — |  |  | — |  |  | (187) |
Change in fair value |  |  | — |  |  | 462 |  |  | 346 |
Balance at March 31, 2013 |  | $ | 5,345 |  | $ | 11,836 |  | $ | 13,012 |
The amount of total losses for the period included in earnings attributable to the change in unrealized losses relating to assets and liabilities still held at the reporting date |  | $ | — |  | $ | (462) |  | $ | — |
Losses included in earnings were recorded in the consolidated statements of operations as corporate selling, general and administrative expenses for the three months ended March 31, 2014 and 2013. For Level 3 assets and liabilities measured at fair value on a recurring basis, the significant unobservable inputs used in the fair value measurements were as follows:
|  |  |  |  |  | As of March 31, 2014 |  |  | As of December 31, 2013 |  |  | As of March 31, 2013 |
Level 3 liabilities |  | Valuation Technique |  | Significant Unobservable Inputs |  | Significant Unobservable Input Value |
Incentive award plan |  | Discounted Cash Flow |  | Discount Rate |  |  | 10.7 | % |  | 10.8 | % |  | 10.8 | %
Incentive award plan |  | Discounted Cash Flow |  | Long-term Growth Rate |  |  | 3.0 | % |  | 3.0 | % |  | 3.0 | %
Employment agreement award |  | Discounted Cash Flow |  | Discount Rate |  |  | 10.7 | % |  | 10.8 | % |  | 10.8 | %
Employment agreement award |  | Discounted Cash Flow |  | Long-term Growth Rate |  |  | 3.0 | % |  | 3.0 | % |  | 3.0 | %
Redeemable noncontrolling interest |  | Discounted Cash Flow |  | Discount Rate |  |  | 13.0 | % |  | 12.5 | % |  | 12.5 | %
Redeemable noncontrolling interest |  | Discounted Cash Flow |  | Long-term Growth Rate |  |  | 1.5 | % |  | 1.5 | % |  | 2.0 | %
Any significant increases or decreases in discount rate or long-term growth rate inputs could result in significantly higher or lower fair value measurements. Certain assets and liabilities are measured at fair value on a non-recurring basis using Level 3 inputs as defined in ASC 820. These assets are not measured at fair value on an ongoing basis but are subject to fair value adjustments only in certain circumstances. Included in this category are goodwill, radio broadcasting licenses and other intangible assets, net, that are written down to fair value when they are determined to be impaired, as well as content assets that are periodically written down to net realizable value. The Company concluded these assets were not impaired during the three months ended March 31, 2014, and, therefore, were reported at carrying value as opposed to fair value. The Company recorded impairment of approximately $1.4 million related to our Cincinnati radio broadcasting licenses during the three months ended March 31, 2013. (i) Impact of Recently Issued Accounting Pronouncements In July 2012, the FASB issued ASU 2012-02, which provides companies the option to perform a qualitative assessment to determine whether it is more likely than not that an indefinite-lived intangible asset is impaired rather than calculating the fair value of the indefinite-lived intangible asset. ASU 2012-02 is effective prospectively for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012, with early adoption permitted. The Company adopted this guidance on January 1, 2013, and elected to not apply the qualitative assessment as allowed by ASU 2012-02. In February 2013, the FASB issued ASU 2013-02, “Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income,” which adds new disclosure requirements for items reclassified out of accumulated other comprehensive income. ASU 2013-02 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2012. The adoption of this guidance did not have a material impact on the Company's financial statements, other than presentation and disclosure. In July 2013, the FASB issued ASU 2013-11, “Income Taxes (Topic 740) Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists,” which adds new disclosure requirements for taxes. ASU 2013-11 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2013. The adoption of this guidance did not have a material impact on the Company's financial statements. (j) Redeemable noncontrolling interest Redeemable noncontrolling interests are interests in subsidiaries that are redeemable outside of the Company’s control either for cash or other assets. These interests are classified as mezzanine equity and measured at the greater of estimated redemption value at the end of each reporting period or the historical cost basis of the noncontrolling interests adjusted for cumulative earnings allocations. The resulting increases or decreases in the estimated redemption amount are affected by corresponding charges against retained earnings, or in the absence of retained earnings, additional paid-in-capital. (k) Investments Investment Securities Investments consist primarily of corporate fixed maturity securities, government sponsored enterprise mortgage-backed securities and mutual funds. Investments with original maturities in excess of three months and less than one year are classified as short-term investments. Long-term investments have original maturities in excess of one year. All of our investment securities are classified as “available-for-sale” and reported at fair value. Investments in available-for-sale fixed maturity securities are classified as either current or noncurrent assets based on their contractual maturities. Fixed maturity securities are carried at estimated fair value based on quoted market prices for the same or similar instruments. Investment income is recognized when earned and reported net of investment expenses. Unrealized gains and losses are excluded from earnings and are reported as a separate component of accumulated other comprehensive income (loss) until realized, unless the losses are deemed to be other than temporary. Realized gains or losses, including any provision for other-than-temporary declines in value, are included in the statements of operations. For purposes of computing realized gains and losses, the specific-identification method of determining cost was used. Evaluating Investments for Other than Temporary Impairments The Company periodically performs evaluations, on a lot-by-lot and security-by-security basis, of its investment holdings in accordance with its impairment policy to evaluate whether any declines in the fair value of investments are other than temporary. This evaluation consists of a review of several factors, including but not limited to: length of time and extent that a security has been in an unrealized loss position, the existence of an event that would impair the issuer’s future earnings potential, and the near-term prospects for recovery of the market value of a security. The FASB has issued guidance for recognition and presentation of other than temporary impairment (“OTTI”), or FASB OTTI guidance. Accordingly, any credit-related impairment of fixed maturity securities that the Company does not intend to sell, and is not likely to be required to sell, is recognized in the consolidated statements of operations, with the noncredit-related impairment recognized in accumulated other comprehensive income (loss). The Company believes that it has adequately reviewed its investment securities for OTTI and that its investment securities are carried at fair value. However, over time, the economic and market environment (including any ratings change for any such securities, including US treasuries and corporate bonds) may provide additional insight regarding the fair value of certain securities, which could change management’s judgment regarding OTTI. This could result in realized losses relating to other than temporary declines being charged against future income. Given the judgments involved, there is a continuing risk that further declines in fair value may occur and material OTTI may be recorded in future periods. (l) Content Assets TV One has entered into contracts to acquire entertainment programming rights and programs from distributors and producers. The Company also has programming for which the Company has engaged third parties to develop and produce, and it owns most or all rights. The license periods granted in these contracts generally run from one year to perpetuity. Contract payments are made in installments over terms that are generally shorter than the contract period. Each contract is recorded as an asset and a liability at an amount equal to its gross contractual commitment when the license period begins and the program is available for its first airing. Program rights are recorded at the lower of amortized cost or estimated net realizable value. Program rights are amortized based on the greater of the usage of the program or term of license. Estimated net realizable values are based on the estimated revenues directly associated with the program materials and related expenses. The Company recorded $58,000 additional amortization expense as a result of evaluating its contracts for recoverability for the three months ended March 31, 2014, and did not record any additional amortization expense for the three months ended March 31, 2013. All produced and licensed content is classified as a long-term asset, except for the portion of the unamortized content balance that will be amortized within one year which is classified as a current asset. Tax incentives state and local governments offer that are directly measured based on production activities are recorded as reductions in production costs consistent with the accounting prescribed by ASC 740-10-25-46 because the business substance of these transactions is to reduce the overall cost of production for film and television products. (m) Derivatives As of March 31, 2014, the Company was party to an Employment Agreement executed in April 2008 with the CEO. Pursuant to the Employment Agreement, the CEO is eligible to receive an award amount equal to 8% of any proceeds from distributions or other liquidity events in excess of the return of the Company’s aggregate investment in TV One. The Company estimated the fair value of the award at March 31, 2014, to be approximately $14.6 million, and accordingly, adjusted its liability to this amount. The Company’s obligation to pay the award will be triggered only after the Company’s recovery of the aggregate amount of its capital contribution in TV One and only upon actual receipt of distributions of cash or marketable securities or proceeds from a liquidity event with respect to the Company’s membership interest in TV One. The CEO was fully vested in the award upon execution of the Employment Agreement, and the award lapses if the CEO voluntarily leaves the Company, or is terminated for cause. The terms of the Employment Agreement remain in effect including eligibility for the TV One award. The fair values and the presentation of the Company’s derivative instruments in the consolidated balance sheets are as follows:
|  | Liability Derivatives |
|  | As of March 31, 2014 |  | As of December 31, 2013 |
|  | (Unaudited) |  |  |  |  |  |
|  | (In thousands) |
|  | Balance Sheet Location |  | Fair Value |  | Balance Sheet Location |  | Fair Value |
Derivatives not designated as hedging instruments: |  |  |  |  |  |  |  |  |  |  |
Employment agreement award |  | Other Long-Term Liabilities |  | $ | 14,641 |  | Other Long-Term Liabilities |  | $ | 13,688 |
Total derivatives |  |  |  | $ | 14,641 |  |  |  | $ | 13,688 |
The effect and the presentation of the Company’s derivative instruments on the consolidated statements of operations are as follows:
Derivatives Not Designated as Hedging Instruments |  | Location of Gain (Loss) in Income of Derivative |  | Amount of Gain (Loss) in Income of Derivative |
|  |  |  | Three Months Ended March 31, |
|  |  |  | 2014 |  | 2013 |
|  |  |  | (Unaudited) |
|  |  |  | (In thousands) |
Employment agreement award |  | Corporate selling, general and administrative expense |  | $ | (953) |  | $ | (462) |

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