iHeartMedia 2006 Annual Report Download - page 20

20
implement digital television broadcasting in the U.S. Furthermore, the 1996 Act contains a number of provisions related
to television violence. We cannot predict the effect of the FCC’s present rules or future actions on our television
broadcasting operations.
Finally, Congress and the FCC from time to time consider, and may in the future adopt, new laws, regulations
and policies regarding a wide variety of other matters that could affect, directly or indirectly, the operation and
ownership of our broadcast properties. In addition to the changes and proposed changes noted above, such matters have
included, for example, spectrum use fees, political advertising rates, and potential restrictions on the advertising of
certain products such as beer and wine. Other matters that could affect our broadcast properties include technological
innovations and developments generally affecting competition in the mass communications industry, such as direct
broadcast satellite service, the continued establishment of wireless cable systems and low power television stations,
“streaming” of audio and video programming via the Internet, digital television and radio technologies, the
establishment of a low power FM radio service, and possible telephone company participation in the provision of video
programming service.
The foregoing is a brief summary of certain provisions of the Communications Act of 1934, the
Telecommunications Act of 1996 and specific regulations and policies of the FCC thereunder. This description does not
purport to be comprehensive and reference should be made to the Communications Act, the 1996 Act, the FCC’s rules
and the public notices and rulings of the FCC for further information concerning the nature and extent of federal
regulation of broadcast stations. Proposals for additional or revised regulations and requirements are pending before and
are being considered by Congress and federal regulatory agencies from time to time. Also, various of the foregoing
matters are now, or may become, the subject of court litigation, and we cannot predict the outcome of any such litigation
or its impact on our broadcasting business.
Available Information
You can find more information about us at our Internet website located at www.clearchannel.com. Our Annual
Report on Form 10-K, our Quarterly Reports on Form 10-Q, our Current Reports on Form 8-K and any amendments to
those reports are available free of charge on our Internet website as soon as reasonably practicable after we electronically
file such material with the SEC.
Item 1A. Risk Factors
We May Be Adversely Affected if the Proposed Merger is Not Completed
There is no assurance that the merger will be approved by our shareholders or that the other conditions to the
completion of the merger will be satisfied. In the event that the merger is not completed, we may be subject to several
risks including the following: the current market price of our common stock may reflect a market assumption that the
merger will occur and a failure to complete the merger could result in a decline in the market price of our common stock;
management’s attention from our day to day business may be diverted; uncertainties with regards to the merger may
adversely affect our relationships with our employees, vendors and customers; and we may be required to pay significant
transactions costs related to the merger, including under certain circumstances, a termination fee of $500.0 million, as
well as legal, accounting and other fees of the proposed buyer, up to a maximum of $45.0 million.
We Have a Large Amount of Indebtedness
We currently use a portion of our operating income for debt service. Our leverage could make us vulnerable to
an increase in interest rates or a downturn in the operating performance of our businesses due to various factors
including a decline in general economic conditions. At December 31, 2006, we had debt outstanding of $7.7 billion and
shareholders’ equity of $8.0 billion. We may continue to borrow funds to finance capital expenditures, share
repurchases, acquisitions or to refinance debt, as well as for other purposes. Our debt obligations could increase
substantially because of additional share repurchase programs, special dividends, or acquisitions that may be approved
by our Board as well as the debt levels of companies that we may acquire in the future.
Such a large amount of indebtedness could have negative consequences for us, including without limitation:
• limitations on our ability to obtain financing in the future;
• much of our cash flow will be dedicated to interest obligations and unavailable for other purposes;
• limiting our liquidity and operational flexibility in changing economic, business and competitive conditions
which could require us to consider deferring planned capital expenditures, reducing discretionary spending,