iHeartMedia 2009 Annual Report Download - page 125

Certain of the Company’s contracts contain penalties for not fulfilling its commitments related to its obligations to build bus stops,
kiosks and other public amenities or advertising structures. Historically, any such penalties have not materially impacted the
Company’s financial position or results of operations.
As of December 31, 2009, the Company’s future minimum rental commitments under non-cancelable operating lease agreements
with terms in excess of one year, minimum payments under non-cancelable contracts in excess of one year, and capital expenditure
commitments consist of the following:
Rent expense charged to continuing operations for the year ended December 31, 2009 was $1.13 billion. Rent expense charged to
continuing operations for the post-merger period from July 31, 2008 to December 31, 2008 and the pre-merger period from January 1,
2008 to July 30, 2008 was $526.6 million and $755.4 million, respectively. Rent expense charged to continuing operations for the
pre-merger year ended December 31, 2007 was $1.2 billion.
The Company is currently involved in certain legal proceedings and, as required, has accrued its estimate of the probable costs for the
resolution of these claims. These estimates have been developed in consultation with counsel and are based upon an analysis of
potential results, assuming a combination of litigation and settlement strategies. It is possible, however, that future results of
operations for any particular period could be materially affected by changes in the Company’s assumptions or the effectiveness of its
strategies related to these proceedings.
In various areas in which the Company operates, outdoor advertising is the object of restrictive and, in some cases, prohibitive zoning
and other regulatory provisions, either enacted or proposed. The impact to the Company of loss of displays due to governmental
action has been somewhat mitigated by Federal and state laws mandating compensation for such loss and constitutional restraints.
Certain acquisition agreements include deferred consideration payments based on performance requirements by the seller typically
involving the completion of a development or obtaining appropriate permits that enable the Company to construct additional
advertising displays. At December 31, 2009, the Company believes its maximum aggregate contingency, which is subject to
performance requirements by the seller, is approximately $35.0 million. As the contingencies have not been met or resolved as of
December 31, 2009, these amounts are not recorded. If future payments are made, amounts will be recorded as additional purchase
price.
NOTE K - GUARANTEES
At December 31, 2009, the Company guaranteed $39.9 million of credit lines provided to certain of its international subsidiaries by a
major international bank. Most of these credit lines related to intraday overdraft facilities covering participants in the Company’s
European cash management pool. As of December 31, 2009, no amounts were outstanding under these agreements.
As of December 31, 2009, the Company had outstanding commercial standby letters of credit and surety bonds of $175.7 million and
$95.2 million, respectively. Letters of credit in the amount of $67.5 million are collateral in support of surety bonds and these
amounts would only be drawn under the letters of credit in the event the associated surety bonds were funded and the Company did
not honor its reimbursement obligation to the issuers.
These letters of credit and surety bonds relate to various operational matters including insurance, bid, and performance bonds as well
as other items.
120
(In thousands)
Non-Cancelable
Operating Leases
Non-Cancelable
Contracts
Capital
Expenditures
2010 $ 367,524 $ 541,683 $ 67,372
2011
311,768 447,708 32,274
2012 276,486 301,221 13,364
2013
250,836 232,136 9,970
2014 217,308 191,048 9,867
Thereafter
1,225,651 580,815 3,415
Total $ 2,649,573 $ 2,294,611 $ 136,262