iHeartMedia 2000 Annual Report Download - page 58

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58
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE A - SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES
Nature of Business
Clear Channel Communications, Inc., incorporated in Texas in 1974, is a diversified media company with
three principal business segments: radio broadcasting, outdoor advertising and live entertainment. The
Company owns, programs and sells airtime for various radio stations. The Company also is one of the
world’ s largest outdoor advertising companies based on total advertising display inventory in the United
States and internationally. In addition, the Company is one of the world’ s largest diversified promoters,
producers and venue operators of live entertainment events based on the total number of events,
productions and owned or operated venues.
Principles of Consolidation
The consolidated financial statements include the accounts of the Company and its subsidiaries,
substantially all of which are wholly-owned. Significant intercompany accounts have been eliminated in
consolidation. Investments in nonconsolidated affiliates are accounted for using the equity method of
accounting. Certain amounts in prior years have been reclassified to conform to the 2000 presentation.
Cash and Cash Equivalents
Cash and cash equivalents include all highly liquid investments with an original maturity of three months
or less.
Land Leases and Other Structure Licenses
Most of the Company’ s outdoor advertising structures are located on leased land. Domestic land rents are
typically paid in advance for periods ranging from one to twelve months. International land rents are paid
both in advance and in arrears, for periods ranging from one to twelve months. Most international street
furniture advertising display faces are licensed through municipalities for up to 20 years. The street
furniture licenses often include a percent of revenue to be paid along with a base rent payment. Prepaid
land leases are recorded as an asset and expensed ratably over the related rental term and license and rent
payments in arrears are recorded as an accrued liability.
Prepaid Expenses
Included in prepaid expenses are event expenses including show advances and deposits and other costs
directly related to future entertainment events. Such costs are charged to operations upon completion of
the related events.
Property, Plant and Equipment
Property, plant and equipment are stated at cost. Depreciation is computed principally using the straight-
line method at rates that, in the opinion of management, are adequate to allocate the cost of such assets
over their estimated useful lives, which are as follows:
Buildings and improvements- 10 to 30 years
Structures and site leases - 2 to 20 years
Transmitter and studio equipment - 7 to 15 years
Furniture and other equipment - 2 to 10 years
Leasehold improvements - generally life of lease