iHeartMedia 2005 Annual Report Download - page 3

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PART I
ITEM 1. Business
The Company
Clear Channel Communications, Inc. is a diversified media company with three reportable business segments:
radio broadcasting, outdoor advertising, which is reported geographically as the Americas and international. We were
incorporated in Texas in 1974. As of December 31, 2005, we owned 1,182 radio stations and a leading national radio
network operating in the United States. In addition, we had equity interests in various international radio broadcasting
companies. For the year ended December 31, 2005, the radio broadcasting segment represented 53% of our total
revenue. As of December 31, 2005, we also owned or operated 164,634 Americas outdoor advertising display faces and
710,638 international outdoor advertising display faces. For the year ended December 31, 2005, the Americas and
international outdoor advertising segments represented 18% and 22% of our total revenue, respectively. As of
December 31, 2005 we also owned or programmed 41 television stations and own a media representation firm, as well
as other general support services and initiatives, all of which are within the category “other”. This segment represented
7% of our total revenue for the year ended December 31, 2005. Prior to December 21, 2005, we also operated a live
entertainment and sports representation business.
Our principal executive offices are located at 200 East Basse Road, San Antonio, Texas 78209 (telephone: 210-
822-2828).
On April 29, 2005, we announced a plan to strategically realign our businesses. The plan included an initial
public offering, or IPO, of approximately 10% of the common stock of Clear Channel Outdoor Holdings, Inc., or CCO,
comprised of our Americas and international outdoor segments, and a 100% spin-off of our live entertainment segment
and sports representation business, which now operates under the name Live Nation. We completed the IPO on
November 11, 2005 and the spin-off on December 21, 2005.
The IPO consisted of the sale of 35.0 million shares of Class A common stock of CCO, our indirect, wholly
owned subsidiary prior to the IPO. After the offering, we own all of CCO’s outstanding shares of Class B common
stock, representing approximately 90% of the outstanding shares of CCO’s common stock and approximately 99% of
the total voting power of CCO’s common stock. The net proceeds from the offering, after deducting underwriting
discounts and offering expenses, was approximately $600.6 million. All of the net proceeds of the offering were used to
repay a portion of the outstanding balances of intercompany notes owed to us by CCO.
The spin-off consisted of a dividend of .125 share of Live Nation common stock for each share of our common
stock held on December 21, 2005, the date of the distribution. Our Board of Directors determined that the spin-off was
in the best interests of our shareholders because: (i) it would enhance both our success and the success of Live Nation by
enabling each company to resolve management and systemic problems that arose by the operation of the businesses
within a single affiliated group; (ii) it would improve the competitiveness of our business by resolving inherent conflicts
and the appearance of such conflicts with artists and promoters; (iii) it would simplify and reduce our and Live Nation’s
regulatory burdens and risks; (iv) it would enhance our ability and the ability of Live Nation to issue equity efficiently
and effectively for acquisitions and financings; and (v) it would enhance the efficiency and effectiveness of our and Live
Nation’s equity-based compensation.
Operating Segments
After the realignment, our business consists of three reportable operating segments: radio broadcasting,
Americas outdoor advertising and international outdoor advertising. The radio broadcasting segment includes radio
stations for which we are the licensee and for which we program and/or sell air time under local marketing agreements
or joint sales agreements. The radio broadcasting segment also operates radio networks. Our Americas outdoor
advertising segment consists of our operations in the United States, Canada and Latin America, with approximately 94%
of our 2005 revenues in this segment derived from the United States. Our international outdoor advertising segment
consists of our advertising operations in Europe, Australia, Asia and Africa, with approximately 51% of our 2005
revenues in this segment derived from France and the United Kingdom. The Americas and international outdoor
advertising segments include advertising display faces which we own or operate under lease management agreements.
We also own television stations and a media representation business.