iHeartMedia 2001 Annual Report Download - page 57

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57
payments if and when it is determinable that the applicable financial performance targets will be met.
The aggregate of these contingent payments, if performance targets are met, would not significantly
impact our financial position or results of operations.
Future Obligations
In addition to our scheduled maturities on our debt, we have future cash obligations under
various types of contracts. We lease office space, certain broadcast facilities, equipment and the majority
of the land occupied by our outdoor advertising structures under long-term operating leases. In addition,
we have minimum franchise payments associated to non-cancelable contracts that enable us to display
advertising on such media as buses, taxis, trains, bus shelters and terminals. Finally, we have
commitments relating to required purchases of property, plant and equipment under certain street
furniture contracts, as well as construction commitments for facilities and venues.
The scheduled maturities of our credit facilities; other long-term debt outstanding; future
minimum rental commitments, under non-cancelable lease agreements; minimum rental payments under
non-cancelable contracts; and capital expenditure commitments at December 31, 2001 are as follows:
(In millions)
Credit
Facilities
Other
Long-Term
Debt
Non-
Cancelable
Lease
Non-
Cancelable
Contracts
Capital
Expenditures
2002 $ $ 1,515.2 $ 314.1 $ 266.4 $ 419.6
2003 1,344.1 266.8 194.8 175.3
2004 407.5 12.0 232.0 157.8 17.4
2005 1,011.8 1,437.4 198.3 137.8 2.3
2006 755.1 176.1 87.3 2.6
Thereafter —
2,999.8 1,251.8 210.6 12.0
Total $ 1,419.3 $ 8,063.6 $ 2,439.1 $ 1,054.7 $ 629.2
Market Risk
Interest Rate Risk
At December 31, 2001, approximately 36% of our long-term debt, including fixed rate debt on
which we have entered interest rate swap agreements, bears interest at variable rates. Accordingly, our
earnings are affected by changes in interest rates. Assuming the current level of borrowings at variable
rates and assuming a two percentage point change in the year’s average interest rate under these
borrowings, it is estimated that our 2001 interest expense would have changed by $65.3 million and that
our 2001 net income would have changed by $40.5 million. In the event of an adverse change in interest
rates, management may take actions to further mitigate its exposure. However, due to the uncertainty of
the actions that would be taken and their possible effects, the analysis assumes no such actions. Further
the analysis does not consider the effects of the change in the level of overall economic activity that
could exist in such an environment.
We have entered into interest rate swap agreements that effectively float interest at rates based
upon LIBOR on $1.5 billion of our current fixed rate borrowings. These agreements expire from
September 2003 to June 2005. The fair value of these agreements at December 31, 2001 was an asset of
$106.6 million.