iHeartMedia 2009 Annual Report Download - page 67

The Series B Notes indenture restricts CCOH’s ability to incur additional indebtedness and pay dividends based on an
incurrence test. In order to incur additional indebtedness, CCOH’s debt to adjusted EBITDA ratios (as defined by the indenture) must
be lower than 6.5:1 and 3.25:1 for total debt and senior debt, respectively. Similarly in order for CCOH to pay dividends from the
proceeds of indebtedness or the proceeds from asset sales, its debt to adjusted EBITDA ratios (as defined by the indenture) must be
lower than 6.0:1 and 3.0:1 for total debt and senior debt, respectively. If these ratios are not met, CCOH has certain exceptions that
allow it to incur additional indebtedness and pay dividends, such as a $500.0 million exception for the payment of dividends. CCOH
was in compliance with these covenants as of December 31, 2009.
A portion of the proceeds of the Notes were used to (i) pay the fees and expenses of the Notes offering, (ii) fund $50.0
million of the Liquidity Amount (the $50.0 million liquidity amount of the non-guarantor subsidiaries was satisfied) and (iii) apply
$2.0 billion of the cash proceeds (which amount is equal to the aggregate principal amount of the Series B Notes) to repay an equal
amount of indebtedness under our senior secured credit facilities. In accordance with the senior secured credit facilities, the $2.0
billion cash proceeds were applied ratably to the Term Loan A, Term Loan B, and both delayed draw term loan facilities, and within
each such class, such prepayment was applied to remaining scheduled installments of principal.
The balance of the proceeds is available to CCOI for general corporate purposes. In this regard, all of the remaining
proceeds could be used to pay dividends from CCOI to CCOH. In turn, CCOH could declare a dividend to its shareholders of which
we would receive our proportionate share. Payment of such dividends would not be prohibited by the terms of the Notes or any of the
loan agreements or credit facilities of CCOI or CCOH.
Dispositions and Other
During 2009, we sold six radio stations for approximately $12.0 million and recorded a loss of $12.8 million in “Other
operating income (expense) – net.” In addition, we exchanged radio stations in our radio markets for assets located in a different
market and recognized a loss of $28.0 million in “Other operating income (expense) – net.”
During 2009, we sold international assets for $11.3 million resulting in a gain of $4.4 million in “Other operating income
(expense) – net.” In addition, we sold assets for $6.8 million in our Americas outdoor segment and recorded a gain of $4.9 million in
“Other operating income (expense) – net.” We sold our taxi advertising business and recorded a loss of $20.9 million in our Americas
outdoor segment included in “Other operating income (expense) –net.” We also received proceeds of $18.3 million from the sale of
corporate assets during 2009 and recorded a loss of $0.7 million in “Other operating income (expense) – net.”
In addition, we sold our remaining interest in Grupo ACIR for approximately $40.5 million and recorded a loss of
approximately $5.8 million during 2009.
During 2008, we received proceeds of $110.5 million related to the sale of radio stations recorded as investing cash flows
from discontinued operations and recorded a gain of $28.8 million as a component of “Income from discontinued operations, net”
during 2008. We received proceeds of $1.0 billion related to the sale of our television business recorded as investing cash flows from
discontinued operations and recorded a gain of $662.9 million as a component of “Income from discontinued operations, net”.
In addition, we sold our 50% interest in Clear Channel Independent during 2008 and recognized a gain of $75.6 million in
“Equity in earnings (loss) of nonconsolidated affiliates” based on the fair value of the equity securities received in the pre-merger
period.
We sold a portion of our investment in Grupo ACIR for approximately $47.0 million on July 1, 2008 and recorded a gain
of $9.2 million in “Equity in earnings (loss) of nonconsolidated affiliates.”
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• purchase or otherwise effectively cancel or retire any of the Series B Notes if after doing so the ratio of (a) the outstanding
aggregate principal amount of the Series A Notes to (b) the outstanding aggregate principal amount of the Series B Notes
shall be greater than 0.250. This stipulation ensures, among other things, that as long as the Series A Notes are outstanding,
the Series B Notes are outstanding.