iHeartMedia 2006 Annual Report Download - page 23

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consent decrees requiring radio station divestitures in a particular market based on allegations that acquisitions would
lead to unacceptable concentration levels. The DOJ also actively reviews proposed acquisitions of outdoor advertising
properties. In addition, the antitrust laws of foreign jurisdictions will apply if we acquire international broadcasting
properties.
Environmental, Health, Safety and Land Use Laws and Regulations May Limit or Restrict Some of Our
Operations
As the owner or operator of various real properties and facilities, especially in our outdoor advertising
operations, we must comply with various foreign, federal, state and local environmental, health, safety and land use laws
and regulations. We and our properties are subject to such laws and regulations relating to the use, storage, disposal,
emission and release of hazardous and non-hazardous substances and employee health and safety as well as zoning
restrictions. Historically, we have not incurred significant expenditures to comply with these laws. However, additional
laws, which may be passed in the future, or a finding of a violation of or liability under existing laws, could require us to
make significant expenditures and otherwise limit or restrict some of our operations.
Government regulation of outdoor advertising may restrict our outdoor advertising operations
U.S. federal, state and local regulations have a significant impact on the outdoor advertising industry and our
outdoor advertising business. One of the seminal laws was The Highway Beautification Act of 1965 (HBA), which
regulates outdoor advertising on the 306,000 miles of Federal-Aid Primary, Interstate and National Highway Systems
roads. HBA regulates the locations of billboards, mandates a state compliance program, requires the development of
state standards, promotes the expeditious removal of illegal signs, and requires just compensation for takings. Size,
location, lighting and the use of new technologies for changing displays, such as digital, are regulated by federal, state
and local governments. Some states have enacted bans on billboard advertising altogether. Changes in laws and
regulations affecting outdoor advertising at any level of government, including laws of the foreign jurisdictions in which
we operate, could have a significant financial impact on us by requiring us to make significant expenditures or otherwise
limiting or restricting some of our operations.
From time to time, certain state and local governments and third parties have attempted to force the removal of
displays under various state and local laws, including amortization. Amortization permits the display owner to operate
its display which does not meet current code requirements for a specified period of time, after which it must remove or
otherwise conform its display to the applicable regulations at its own cost without any compensation. Several
municipalities within our existing markets have adopted amortization ordinances. Other regulations limit our ability to
rebuild or replace nonconforming displays and require us to remove or modify displays that are not in strict compliance
with applicable laws. In addition, from time to time third parties or local governments assert that we own or operate
displays that either are not properly permitted or otherwise are not in strict compliance with applicable law. Such
regulations and allegations have not had a material impact on our results of operations to date, but if we are increasingly
unable to resolve such allegations or obtain acceptable arrangements in circumstances in which our displays are subject
to removal, modification or amortization, or if there occurs an increase in such regulations or their enforcement, our
results could suffer.
Legislation has from time to time been introduced in both the United States and foreign jurisdictions attempting
to impose taxes on revenues of outdoor advertising companies. Several jurisdictions have already imposed such taxes as
a percentage of our gross receipts of outdoor advertising revenues in that jurisdiction. While these taxes have not had a
material impact on our business and financial results to date, we expect states to continue to try to impose such taxes as a
way of increasing revenues. The increased imposition of these taxes and our inability to pass on the cost of these taxes
to our clients could negatively affect our operating income.
International regulation of the outdoor advertising industry varies by region and country, but generally limits
the size, placement, nature and density of out-of-home displays. Significant international regulations include the Law of
December 29, 1979 in France, the Town and Country Planning (Control of Advertisements) Regulations 1992 in the
United Kingdom, and Règlement Régional Urbain de l’agglomération Bruxelloise in Belgium. These laws define issues
such as the extent to which advertisements can be erected in rural areas, the hours during which illuminated signs may
be lit and whether the consent of local authorities is required to place a sign in certain communities. Other regulations
limit the subject matter and language of out-of-home displays. For instance, the United States and most European Union
countries, among other nations, have banned outdoor advertisements for tobacco products. Our failure to comply with
these or any future international regulations could have an adverse impact on the effectiveness of our displays or their
attractiveness to clients as an advertising medium and may require us to make significant expenditures to ensure
compliance. As a result, we may experience a significant impact on our operations, revenues, international client base