iHeartMedia 2007 Annual Report Download - page 39

ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
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pproved Merger with a Group led by Thomas H. Lee Partners, L.P. and Bain Capital Partners, LLC
Our shareholders approved the adoption of the Merger Agreement, as amended, with a group led by Thomas H. Lee Partners, L.P. and Bain
Capital Partners, LLC on September 25, 2007. The transaction remains subject to customary closing conditions.
Under the terms of the Merger Agreement, as amended, our shareholders will receive $39.20 in cash for each share they own plus additional
per share consideration, if any, as the closing of the merger will occur after December 31, 2007. For a description of the computation of any
additional per share consideration and the circumstances under which it is payable, please refer to the Proxy Statement filed August 21, 2007.
As an alternative to receiving the $39.20 per share cash consideration, our unaffiliated shareholders were offered the opportunity on a purely
voluntary basis to exchange some or all of their shares of our common stock on a one-for-one basis for shares of Class A common stock in CC
Media Holdings, Inc. (subject to aggregate and individual caps), plus the additional per share consideration, if any.
Holders of shares of our common stock (including shares issuable upon conversion of outstanding options) in excess of the aggregate cap
provided in the Merger Agreement, as amended, elected to receive the stock consideration. As a result, unaffiliated shareholders of us will own
an aggregate of 30.6 million shares of CC Media Holdings, Inc. Class A common stock upon consummation of the merger.
Sale of Non-core Radio Stations
On November 16, 2006, we announced plans to sell 448 non-core radio stations. The sale of these assets is not contingent on the closing of
the merger described above. We sold 160 non-core radio stations and had definitive asset purchase agreements for 73 non-core radio stations at
December 31, 2007. These stations were classified as assets from discontinued operations in our consolidated balance sheet and as discontinued
operations in our consolidated financial statements as of and for the periods ended December 31, 2007. Through February 13, 2008, we
completed the sales of 57 non-core radio stations that were under definitive agreement at December 31, 2007.
We have 187 non-core radio stations that were no longer under a definitive asset purchase agreement at December 31, 2007. The definitive
asset purchase agreement was terminated in the fourth quarter of 2007. However we continue to actively market these radio stations and they
continue to meet the criteria in Statement of Financial Accounting Standards No. 144, Accounting for the Impairment or Disposal of Long-lived
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ssets, for classification as discontinued operations. Therefore, the assets, results of operations and cash flows from these stations remain
classified as discontinued operations in our consolidated financial statements as of and for the periods ended December 31, 2007.
Through February 13, 2008, we had definitive asset purchase agreements for the sale of 12 additional non-core radio stations, all of which
were part of the 187 stations mentioned above. The closing of these sales is subject to antitrust clearances, FCC approval and other customary
closing conditions. Further, the closing of these sales is not a condition to the closing of the merger described above.
Sale of Other Radio Stations
We sold 5 stations in the fourth quarter of 2006 and had definitive asset purchase agreements for 8 stations at December 31, 2007 in
addition to the non-core radio stations mentioned above. These stations were classified as assets from discontinued operations in our
consolidated financial statements as of and for the periods ended December 31, 2007.
Sale of our Television Business
On April 20, 2007, we entered into a definitive agreement with an affiliate (“buyer”) of Providence Equity Partners Inc. (“Providence”) to
sell our television business. Subsequently, a representative of Providence informed us that the buyer is considering its options under the
definitive agreement, including not closing the acquisition on the terms and conditions in the definitive agreement. The definitive agreement is
in full force and effect, has not been terminated
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Total non-core radio stations on November 16, 2006 448
Non-core radio stations sold through December 31, 2007 (160)
Non-core radio stations under definitive asset purchase agreements at December 31, 2007 (73)
Non-core radio stations not under definitive asset purchase agreements but recorded as discontinued operations at
December 31, 2007 (187)
Non-core radio stations included in continuing operations at December 31, 2007 28