iHeartMedia 2004 Annual Report Download - page 51

The scheduled maturities of our credit facility, other long-term debt outstanding, future minimum rental commitments under non-cancelable
lease agreements, minimum payments under other non-cancelable contracts, payments under employment/talent contracts, and capital
expenditure commitments as of December 31, 2004 are as follows:
Market Risk
Interest Rate Risk
At December 31, 2004, approximately 24% of our long-term debt, including fixed-rate debt on which we have entered into 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 2004 interest expense would have changed by $35.4 million and that our 2004 net income would have changed by
$22.0 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, this interest rate 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.
At December 31, 2004, we had entered into interest rate swap agreements with a $1.3 billion aggregate notional amount that effectively
float interest at rates based upon LIBOR. These agreements expire from February 2007 to March 2012. The fair value of these agreements at
December 31, 2004 was an asset of $6.5 million.
Equity Price Risk
The carrying value of our available-for-sale and trading equity securities is affected by changes in their quoted market prices. It is estimated
that a 20% change in the market prices of these securities would change their carrying value at December 31, 2004 by $73.4 million and would
change accumulated comprehensive income (loss) and net income by $40.9 million and $4.6 million, respectively. At December 31, 2004, we
also held $20.5 million of investments that do not have a quoted market price, but are subject to fluctuations in their value.
We maintain derivative instruments on certain of our available-for-sale and trading equity securities to limit our exposure to and benefit
from price fluctuations on those securities.
Foreign Currency
We have operations in countries throughout the world. Foreign operations are measured in their local currencies except in hyper-inflationary
countries in which we operate. As a result, our financial results could be affected by factors such as changes in foreign currency exchange rates
or weak economic conditions in the foreign markets in which we have operations. To mitigate a portion of the exposure of international
currency fluctuations, we maintain a natural hedge through borrowings in currencies other than the U.S. dollar. In addition, we have a U.S.
dollar – Euro cross currency swap which is also designated as a hedge of our net investment in foreign denominated assets. These hedge
positions are reviewed monthly. Our foreign operations reported a net income of $17.4 million
48
(In millions) Payment due by Period
Less than More than
Contractual Obligations Total 1-year 1to3Years 3to5Years 5Years
Long-term Deb
t
Credit Facility $ 350.5 $

$

$ 350.5 $

Other Long-term Deb
t
7,029.3 417.3 1,006.7 1,815.3 3,790.0
Non-Cancelable Operating Leases 2,619.5 322.8 550.9 421.2 1,324.6
Non-Cancelable Contracts 2,763.6 806.7 894.1 505.8 557.0
Employment/Talent Contracts 334.2 144.8 134.4 50.4 4.6
Capital Expenditures 254.3 133.3 80.1 25.2 15.7
Total $13,351.4 $ 1,824.9 $ 2,666.2 $ 3,168.4 $ 5,691.9