iHeartMedia 2010 Annual Report Download - page 48

D
iscontinued Operations
During 2008, we completed the sale of our television business to Newport Television, LLC for $1.0 billion and completed the
sales of certain radio stations for $110.5 million. The cash received from these sales was recorded as a component of cash flows from
discontinued operations during 2008.
A
nticipated Cash Requirements
Our primary source of liquidity is cash on hand and cash flow from operations. We have a large amount of indebtedness, and a
substantial portion of our cash flows are used to service debt. At December 31, 2010, we had $1.9 billion of cash on our balance
sheet, with $624.0 million held by our subsidiary, CCOH, and its subsidiaries. We have debt maturities totaling $885.1 million and
$292.8 million in 2011 and 2012, respectively.
Our ability to fund our working capital needs, debt service and other obligations, and to comply with the financial covenant
under our financing agreements depends on our future operating performance and cash flow, which are in turn subject to prevailing
economic conditions and other factors, many of which are beyond our control. If our future operating performance does not meet our
expectations or our plans materially change in an adverse manner or prove to be materially inaccurate, we may need additional
financing. Consequently, there can be no assurance that such financing, if permitted under the terms of our financing agreements, will
be available on terms acceptable to us or at all. The inability to obtain additional financing in such circumstances could have a
material adverse effect on our financial condition and on our ability to meet our obligations.
We frequently evaluate strategic opportunities both within and outside our existing lines of business. We expect from time to
time to pursue additional acquisitions and may decide to dispose of certain businesses. These acquisitions or dispositions could be
material.
Based on our current and anticipated levels of operations and conditions in our markets, we believe that cash on hand (including
amounts available under our senior secured credit facilities) as well as cash flow from operations will enable us to meet our working
capital, capital expenditure, debt service and other funding requirements for at least the next 12 months.
We expect to be in compliance with the covenants contained in our material financing agreements in 2011, including the
maximum consolidated senior secured net debt to consolidated EBITDA limitation contained in our senior secured credit facilities.
However, our anticipated results are subject to significant uncertainty and our ability to comply with this limitation may be affected
by events beyond our control, including prevailing economic, financial and industry conditions. The breach of any covenants set forth
in our financing agreements would result in a default thereunder. An event of default would permit the lenders under a defaulted
financing agreement to declare all indebtedness thereunder to be due and payable prior to maturity. Moreover, the lenders under the
revolving credit facility under our senior secured credit facilities would have the option to terminate their commitments to make
further extensions of revolving credit thereunder. If we are unable to repay our obligations under any secured credit facility, the
lenders could proceed against any assets that were pledged to secure such facility. In addition, a default or acceleration under any of
our material financing agreements could cause a default under other of our obligations that are subject to cross-default and cross-
acceleration provisions. The threshold amount for a cross-default under the senior secured credit facilities is $100.0 million.
Our current corporate credit ratings by Standard & Poor’s Ratings Services and Moody’s Investors Service are speculative grade
ratings. Adjustments to our ratings have no impact on our borrowing costs under the credit agreements. However, reductions in our
credit ratings could increase our borrowing costs, reduce the availability of financing to us or increase the cost of doing business or
otherwise negatively impact our business operations.
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