iHeartMedia 2007 Annual Report Download - page 32

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ew technologies may affect our broadcasting operations
Our broadcasting businesses face increasing competition from new broadcast technologies, such as broadband wireless and satellite
television and radio, and new consumer products, such as portable digital audio players and personal digital video recorders. These new
technologies and alternative media platforms compete with our radio and television stations for audience share and advertising revenue, and in
the case of some products, allow listeners and viewers to avoid traditional commercial advertisements. The FCC has also approved new
technologies for use in the radio broadcasting industry, including the terrestrial delivery of digital audio broadcasting, which significantly
enhances the sound quality of radio broadcasts. In the television broadcasting industry, the FCC has established standards and a timetable for
the implementation of digital television broadcasting in the United States. We have substantially completed the implementation of our digital
television broadcasting. We have currently converted approximately 441 of our radio stations to digital broadcasting. We are unable to predict
the effect such technologies and related services and products will have on our broadcasting operations, but the capital expenditures necessary
to implement such technologies could be substantial and other companies employing such technologies could compete with our businesses.
We may be adversely affected by a general deterioration in economic conditions
The risks associated with our businesses become more acute in periods of a slowing economy or recession, which may be accompanied
by a decrease in advertising. A decline in the level of business activity of our advertisers could have an adverse effect on our revenue and profit
margins. During economic slowdowns in the United States, many advertisers have reduced their advertising expenditures. The impact of
slowdowns on our business is difficult to predict, but they may result in reductions in purchases of advertising.
We may be adversely affected by the occurrence of extraordinary events, such as terrorist attacks
The occurrence of extraordinary events, such as terrorist attacks, intentional or unintentional mass casualty incidents, or similar events
may substantially decrease the use of and demand for advertising, which may decrease our revenue or expose us to substantial liability. The
September 11, 2001 terrorist attacks, for example, caused a nationwide disruption of commercial activities. As a result of the expanded news
coverage following the attacks and subsequent military actions, we experienced a loss in advertising revenue and increased incremental
operating expenses. The occurrence of future terrorist attacks, military actions by the United States, contagious disease outbreaks, or similar
events cannot be predicted, and their occurrence can be expected to further negatively affect the economies of the United States and other
foreign countries where we do business generally, specifically the market for advertising.
Caution Concerning Forward Looking Statements
The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements made by us or on our behalf.
Except for the historical information, this report contains various forward-looking statements which represent our expectations or beliefs
concerning future events, including the future levels of cash flow from operations. Management believes that all statements that express
expectations and projections with respect to future matters, including the success of our Merger Agreement and the planned sale of radio and
television assets; our ability to negotiate contracts having more favorable terms; and the availability of capital resources; are forward-looking
statements within the meaning of the Private Securities Litigation Reform Act. We caution that these forward-looking statements involve a
number of risks and uncertainties and are subject to many variables which could impact our financial performance. These statements are made
on the basis of management’s views and assumptions, as of the time the statements are made, regarding future events and business
performance. There can be no assurance, however, that management’s expectations will necessarily come to pass.
A wide range of factors could materially affect future developments and performance, including:
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• changes in governmental regulations and policies and actions of federal regulatory bodies which could restrict the advertising media
which we employ or restrict some or all of our customers that operate in regulated areas from using certain advertising media, or
from advertising at all.
• the occurrence of any event, change or other circumstance that could give rise to the termination of the Merger Agreement;
• the outcome of any legal proceedings that have been or may be instituted against us relating to the Merger Agreement;
• our inability to complete the merger due to the failure to satisfy any conditions to completion of the merger;
• the impact of the substantial indebtedness incurred to finance the consummation of the merger;
• the impact of general economic and political conditions in the U.S. and in other countries in which we currently do business,
including those resulting from recessions, political events and acts or threats of terrorism or military conflicts;