iHeartMedia 2000 Annual Report Download - page 8

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associated with our national footprint and our clustering of stations in our markets, our management seeks
to improve the performance of our existing stations through effective programming, reduction of costs,
and aggressive promotion, marketing, and sales. By complementing our radio operations with our other
businesses, we are able to increase revenue and profitability through synergies such as cross selling and
cross promoting utilizing our outdoor advertising and entertainment operations.
Outdoor Advertising
Our outdoor advertising strategy involves expanding our market presence and improving the
operating results of our existing operations. By acquiring additional displays in our existing markets and
expanding into new markets, we strive to increase our market share while managing our advertising rates
to maximize revenues. We focus on attracting new categories of advertisers to the outdoor medium
through significant investments in sales, marketing, creative, and research services. We take advantage of
technological advances that increase our sales force productivity, production department efficiency, and
the quality of our product. We will continue to take advantage of the fragmented outdoor advertising
industry in our international markets, which presents us with opportunities to increase our profitability
both from our existing operations and from acquisitions.
Live Entertainment
Our entry into live entertainment operations allowed us to take advantage of the natural synergies
between radio and live music events and to gain immediate industry leadership. We can now leverage our
broadcasting assets to reach listeners who have an affinity for music to promote our live entertainment
events and ultimately increase ticket revenue. Our entry into the live entertainment industry enables us to
reach revenue sources that we had not reached in the past. Our strategy involves improving operating
results driven primarily by our ability to increase the utilization of venues, the number of tickets sold per
event, sponsorship opportunities, and radio audiences. We strive to form strategic alliances with top
brands for marketing opportunities, complete our footprint with investments in music and theater, and
foster collaborations with our other media businesses.
Recent Developments
AMFM Merger
On August 30, 2000, we closed our merger with AMFM Inc. Pursuant to the terms of the merger
agreement, each share of AMFM common stock was exchanged for 0.94 shares of our common stock.
Approximately 205.4 million shares of our common stock were issued in the AMFM merger, valuing the
merger, based on the average market price of our common stock at the signing of the merger agreement,
at $15.9 billion plus the assumption of AMFM’ s outstanding debt of $3.5 billion. Additionally, we
assumed AMFM options and common stock warrants with a fair value of $1.2 billion, which are
convertible, subject to applicable vesting, into approximately 25.5 million shares of our common stock.
We refinanced $540.0 million of AMFM’ s $3.5 billion of long-term debt at the closing of the merger
using our credit facilities. The AMFM merger was accounted for as a purchase with resulting goodwill of
approximately $7.1 billion, which is being amortized over 25 years on a straight-line basis. This purchase
price allocation is preliminary pending completion of appraisals and other fair value analysis of assets and
liabilities. The results of operations of AMFM have been included in our financial statements beginning
August 30, 2000.