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TOWER SALE AND LEASEBACK (Block)
12 Months Ended
Dec. 31, 2014
Tower Sale And Leaseback [Abstract]  
Tower Sale And Leaseback [Text Block]

9. TOWER SALE AND LEASEBACK

During the second quarter of 2013, the Company: (1) recorded current and deferred gains of $1.6 million and $9.9 million, respectively, from the sale of certain towers; and (2) applied sale and leaseback accounting to the leases that the Company had entered into for radio station space on these same towers. Due to the Company’s continuing economic involvement in this transaction since the sale of the towers in 2009, the recording of the gain and the sale and leaseback accounting were deferred until 2013 when the Company’s continuing economic involvement ceased. The recording of the gain was non-cash in 2013 as $12.6 million in cash from this sale was received in 2009. All of the leases were accounted for as operating leases.

The current gain was included in 2013 in the statement of operations under net (gain) loss on sale or disposal of assets. The deferred gain is amortized on a straight-line basis over the remaining life of the leases, which was 16.5 years as of June 2013, and during this period the gain will be reflected as a net (gain) loss on sale or disposal of assets. As of December 31, 2014, the Company recorded on the balance sheet $0.6 million of deferred gain as a short-term liability under other current liabilities and $8.4 million of deferred gain as a long-term liability under other long-term liabilities.

As background, in connection with the sale of the towers and the Company’s continuing involvement as described above, the 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 remained on the consolidated balance sheet and continued to be depreciated; (2) no gain was recognized for book purposes (the gain was recognized in 2009 for tax purposes); (3) proceeds of $12.6 million received by the Company from these transactions were recorded as a finance method lease 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 enabled 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 sites through new third-party tenants.

Minimum rental commitments at December 31, 2014 for these non-cancellable leases are included within the operating lease commitment table under Note 20.