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TOWER SALE AND LEASEBACK (Block) | 6 Months Ended
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Jun. 30, 2013
Tower Sale And Leaseback [Abstract] |
Tower Sale And Leaseback [Text Block] | 5. TOWER SALE AND LEASEBACK During the fourth quarter of 2009, the Company completed the sale of certain tower facilities for $12.6 million in cash. At the same time, the Company entered into leases for space on the towers at most of these sites for use by the Company's radio stations. The sale agreement included the opportunity for additional cash consideration for the Company through an earn-out which would be paid to the Company if the buyer met agreed upon revenue targets during the earn-out period. The earn-out constituted a continuing involvement by the Company that precluded sale and leaseback accounting until the earn-out period was complete. On June 23, 2013, the earn-out period ended and it was determined that the Company was not entitled to receive any additional compensation. With the earn-out complete, the Company applied the guidance under sale and leaseback accounting and as a result, the Company recorded a current and deferred gain of $1.6 million and $9.9 million, respectively. The current gain is included in the statement of operations under net (gain) loss on sale or disposal of assets. T he deferred gain will be amortized on a straight-line basis over the remaining life of the lease, which is 16.5 years, and included under net (gain) loss on sale or disposal of assets. As of June 30, 2013, the Company recorded on the balance sheet $0.6 million of deferred gain as a short-term liability under other current liabili ti es and $9.3 million of deferred gain as a long-term liability under other long-term liabilities. For the six and three months ended June 30, 2013 and 2012, there was no material amount recorded for amortization of deferred gain. All of the leases were accounted for as operating leases. On June 23, 2013, the Company eliminated its finance method lease obligation of $12.6 million and recorded a gain on the disposition of the towers of $11.5 million, of which $9.9 million was deferred. The Company recorded this transaction during this quarter as a non-cash reduction of debt and non-cash recognition of the gain. As background, i n connection with the sale of the towers and the Company's continuing involvement as described above, t he Company classified this transaction under the financing method as $12.6 million in finance method lease obligations. Under the financing method: (1) the assets and accumulated depreciation remain ed on the consolidated balance sheet and continue d to be depreciated; (2) no gain was recognized; (3) proceeds of $12.6 million received by the Company from these transactions were recorded as a financing liability; and (4) transaction costs of $0.2 million were recorded as deferred financing expense, which was amortized over 42 months. Payments under these leases over the partial lease term of 42 months were applied as payments of imputed interest at an approximate interest rate of 5.5%. The earn-out component of this transaction enable d the Company to participate in the upside potential of these sites as the new owner (whose primary business is managing tower sites) was better suited to maximize the value of these site s through new third-party tenants. Minimum rental commitments at June 30, 2013 for these non-cancellable leases are as follows:
Minimum Rental Commitments Under Sale And Leaseback
| As of June 30, 2013
| Operating
| Leases
| (amounts in thousands)
Years ending December 31, |  |
2013 | $ | 386
2014 |  | 792
2015 |  | 816
2016 |  | 840
2017 |  | 865
Thereafter |  | 12,447
Total | $ | 16,146

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