iHeartMedia 2007 Annual Report Download - page 59

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It is possible, however, that future results of operations for any particular period could be materially affected by changes in our
assumptions or the effectiveness of our strategies related to these proceedings.
Insurance Accruals
We are currently self-insured beyond certain retention amounts for various insurance coverages, including general liability and property
and casualty. Accruals are recorded based on estimates of actual claims filed, historical payouts, existing insurance coverage and projections of
future development of costs related to existing claims.
Our self-insured liabilities contain uncertainties because management must make assumptions and apply judgment to estimate the
ultimate cost to settle reported claims and claims incurred but not reported as of December 31, 2007.
If actual results are not consistent with our assumptions and judgments, we may be exposed to gains or losses that could be material. A
10% change in our self-insurance liabilities at December 31, 2007, would have affected net income by approximately $3.5 million for the year
ended December 31, 2007.
Inflation
Inflation has affected our performance in terms of higher costs for wages, salaries and equipment. Although the exact impact of inflation
is indeterminable, we believe we have offset these higher costs by increasing the effective advertising rates of most of our broadcasting stations
and outdoor display faces.
Ratio of Earnings to Fixed Charges
The ratio of earnings to fixed charges is as follows:
The ratio of earnings to fixed charges was computed on a total enterprise basis. Earnings represent income from continuing operations
before income taxes less equity in undistributed net income (loss) of unconsolidated affiliates plus fixed charges. Fixed charges represent
interest, amortization of debt discount and expense, and the estimated interest portion of rental charges. We had no preferred stock outstanding
for any period presented.
ITEM 7A. Quantitative and Qualitative Disclosures about Market Risk
Required information is within Item 7.
58
Year Ended December 31,
2007 2006 2005 2004 2003
2.35 2.23 2.21 2.71 3.51