iHeartMedia 2010 Annual Report Download - page 21

Additional acquisitions by us of radio stations and outdoor advertising properties may require antitrust review by federal
antitrust agencies and may require review by foreign antitrust agencies under the antitrust laws of foreign jurisdictions. We can give
no assurances that the U.S. Department of Justice (“DOJ”), the Federal Trade Commission or foreign antitrust agencies will not seek
to bar us from acquiring additional radio stations or outdoor advertising properties in any market where we already have a significant
position. The DOJ actively reviews proposed acquisitions of outdoor advertising properties and radio broadcasting assets. In addition,
the antitrust laws of foreign jurisdictions will apply if we acquire international outdoor properties or radio broadcasting properties.
Further, radio station acquisitions by us are subject to FCC approval. Such acquisitions must comply with the Communications Act
and FCC regulatory requirements and policies, including with respect to the number of broadcast facilities in which a person or entity
may have an ownership or attributable interest, in a given local market, and the level of interest that may be held by a foreign
individual or entity. The FCC’s media ownership rules remain subject to ongoing agency and court proceedings. Future changes could
restrict our ability to acquire new radio stations.
Our cost savings initiatives may not be entirely successful
In the fourth quarter of 2008, CCMH initiated a restructuring program targeting a reduction in fixed costs through renegotiations
of lease agreements, workforce reductions, the elimination of overlapping functions and other cost savings initiatives. We incurred
restructuring and other expenses under the program, and have incurred additional such expenses during 2010. We may incur
additional expenses through ongoing cost-saving initiatives in the future. No assurance can be given that anticipated cost savings will
be achieved in the timeframe expected or at all, or for how long any cost savings will persist.
Significant equity investors control us and may have conflicts of interest with us in the future
Private equity funds sponsored by or co-investors with Bain Capital and THL indirectly own a majority of our outstanding
capital stock and will exercise control over matters requiring approval of our shareholder and Board of Directors. The directors
elected by THL and Bain Capital will have significant authority to effect decisions affecting our capital structure, the incurrence of
additional indebtedness, and the implementation of stock repurchase programs.
Additionally, THL and Bain Capital are in the business of making investments in companies and may acquire and hold interests
in businesses that compete directly or indirectly with us. One or more of the entities advised by or affiliated with THL or Bain Capital
may also pursue acquisition opportunities that may be complementary to our business and, as a result, those acquisition opportunities
may not be available to us. So long as entities advised by or affiliated with THL and Bain Capital directly or indirectly own a
significant amount of the voting power of our capital stock, even if such amount is less than 50%, THL and Bain Capital will continue
to be able to strongly influence or effectively control our decisions.
Risks Related to Our Indebtedness
We may not be able to generate sufficient cash to service all of our indebtedness and may be forced to take other actions to satisfy
our obligations under our indebtedness, which may not be successful
We have substantial amounts of indebtedness. At December 31, 2010, we had $20.6 billion of total indebtedness
outstanding, including (i) $13.7 billion aggregate principal amount outstanding under our senior secured credit facilities, which
obligations mature at various dates from 2014 through 2016; (ii) $384.2 million outstanding under our receivables based facility,
which matures in 2014; (iii) $796.3 million and $829.8 million outstanding under our senior cash pay notes and senior toggle notes,
respectively, which mature in August 2016; (iv) $2.3 billion outstanding under our senior notes, net of $623.3 million in unamortized
discounts; (v) $2.5 billion aggregate principal amount outstanding of subsidiary senior notes, which mature in 2017; and (vi) $67.8
million outstanding under other unsecured senior debt and long-term obligations. This large amount of indebtedness could have
negative consequences for us, including, without limitation:
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• expand corporate infrastructure to facilitate the integration of our operations with those of acquired properties,
because failure to do so may cause us to lose the benefits of any expansion that we decide to undertake by
leadin
g
to disru
p
tions in our on
g
oin
g
businesses or b
y
distractin
g
our mana
g
ement;
• we ma
y
enter into markets and
g
eo
g
ra
p
hic areas where we have limited or no ex
p
erience;
• we ma
y
encounter difficulties in the inte
g
ration of o
p
erations and s
y
stems;
• our mana
g
ement’s attention ma
y
be diverted from other business concerns; and
• we ma
y
lose ke
y
em
p
lo
y
ees of ac
q
uired com
p
anies or stations.
• dedicating a substantial portion of our cash flow to the payment of principal and interest on indebtedness, thereby reducing
cash available for other purposes, including to fund operations and capital expenditures, invest in new technology and
p
ursue other business o
pp
ortunities;