iHeartMedia 2006 Annual Report Download - page 79

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As of December 31, 2006, the Company's future minimum rental commitments under non-cancelable operating
lease agreements with terms in excess of one year, minimum payments under non-cancelable contracts in excess of
one year, and capital expenditure commitments consist of the following:
(In thousands) Non-Cancelable
Operating Leases
Non-Cancelable
Contracts
Capital
Expenditures
2007 $ 318,652 $ 673,672 $ 95,032
2008 296,239 544,580 49,990
2009 262,776 434,129 15,252
2010 220,667 260,566 8,853
2011 181,769 210,903 4,612
Thereafter 948,873 690,243 7,730
Total $ 2,228,976 $ 2,814,093 $ 181,469
Rent expense charged to continuing operations for 2006, 2005 and 2004 was $1.1 billion, $985.6 million and
$924.7 million, respectively.
The Company is currently involved in certain legal proceedings and, as required, has accrued its estimate of the
probable costs for the resolution of these claims. These estimates have been developed in consultation with counsel
and are based upon an analysis of potential results, assuming a combination of litigation and settlement strategies. It
is possible, however, that future results of operations for any particular period could be materially affected by
changes in the Company’s assumptions or the effectiveness of its strategies related to these proceedings.
In various areas in which the Company operates, outdoor advertising is the object of restrictive and, in some cases,
prohibitive zoning and other regulatory provisions, either enacted or proposed. The impact to the Company of loss
of displays due to governmental action has been somewhat mitigated by federal and state laws mandating
compensation for such loss and constitutional restraints.
Various acquisition agreements include deferred consideration payments based on performance requirements by the
seller typically involving the completion of a development or obtaining appropriate permits that enable the
Company to construct additional advertising displays. At December 31, 2006, the Company believes its maximum
aggregate contingency, which is subject to performance requirements by the seller, is approximately $35.0 million.
As the contingencies have not been met or resolved as of December 31, 2006, these amounts are not recorded. If
future payments are made, amounts will be recorded as additional purchase price.
The Company has various investments in nonconsolidated affiliates that are subject to agreements that contain
provisions that may result in future additional investments to be made by the Company. The put values are
contingent upon financial performance of the investee and typically based on the investee meeting certain EBITDA
targets, as defined in the agreement. The Company will continue to accrue additional amounts related to such
contingent payments if and when it is determinable that the applicable financial performance targets will be met.
The aggregate of these contingent payments, if performance targets are met, would not significantly impact the
financial position or results of operations of the Company.
NOTE J - GUARANTEES
Within the Company’s $1.75 billion credit facility, there exists a $150.0 million sub-limit available to certain of the
Company’s international subsidiaries. This $150.0 million sub-limit allows for borrowings in various foreign
currencies, which are used to hedge net assets in those currencies and provides funds to the Company’s international
operations for certain working capital needs. Subsidiary borrowings under this sub-limit are guaranteed by the
Company. At December 31, 2006, this portion of the $1.75 billion credit facility’s outstanding balance was $23.5
million, which is recorded in “Long-term debt” on the Company’s financial statements.
Within the Company's bank credit facility agreement is a provision that requires the Company to reimburse lenders
for any increased costs that they may incur in an event of a change in law, rule or regulation resulting in their