iHeartMedia 2014 Annual Report Download - page 64

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2014, 2013 and 2012, we recognized management fees and reimbursable expenses of $15.2 million, $15.8 million and $15.9 million,
respectively.
CCOH Dividend
In connection with the cash management arrangements for CCOH, we maintain an intercompany revolving promissory note
payable by us to CCOH (the “Note”), which consists of the net activities resulting from day-to-day cash management services
provided by us to CCOH. As of December 31, 2014, the balance of the Note was $947.8 million, all of which is payable on demand.
The Note is eliminated in consolidation in our consolidated financial statements.
The Note previously was the subject of litigation. Pursuant to the terms of the settlement of that litigation, CCOH’s board of
directors established a committee for the specific purpose of monitoring the Note. That committee has the non-exclusive authority,
pursuant to the terms of its charter, to demand payments under the Note under certain specified circumstances tied to the Company’s
liquidity or the amount outstanding under the Due from Note as long as CCOH makes a simultaneous dividend equal to the amount so
demanded.
On August 11, 2014, in accordance with the terms of its charter, (i) that committee demanded repayment of $175 million
outstanding under the Note on such date and (ii) CCOH paid a special cash dividend in aggregate amount equal to $175 million to
CCOH’s stockholders of record as of August 4, 2014. As the indirect parent of CCOH, we were entitled to approximately 88% of the
proceeds from such dividend through our wholly-owned subsidiaries. The remaining approximately 12% of the proceeds from the
dividend, or approximately $21 million, was paid to the public stockholders of CCOH and is included in Dividends and other
payments to noncontrolling interests in our consolidated statement of cash flows. We funded the net payment of this $21 million with
cash on hand, which reduced the amount of cash we have available to fund our working capital needs, debt service obligations and
other obligations. Following satisfaction of the demand, the balance outstanding under the Note was reduced by $175 million.
Commitments, Contingencies and Guarantees
We are currently involved in certain legal proceedings arising in the ordinary course of business and, as required, have
accrued our estimate of the probable costs for resolution of those claims for which the occurrence of loss is probable and the amount
can be reasonably estimated. These estimates have been developed in consultation with counsel and are based upon an analysis of
potential results, assuming a combination of litigation and settlement strategies. 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. Please refer to Item 3. “Legal Proceedings” within Part I of this Annual Report on Form 10-K.
Certain agreements relating to acquisitions provide for purchase price adjustments and other future contingent payments
based on the financial performance of the acquired companies generally over a one to five-year period. The aggregate of these
contingent payments, if performance targets are met, would not significantly impact our financial position or results of operations.
In addition to our scheduled maturities on our debt, we have future cash obligations under various types of contracts. We
lease office space, certain broadcast facilities, equipment and the majority of the land occupied by our outdoor advertising structures
under long-term operating leases. Some of our lease agreements contain renewal options and annual rental escalation clauses
(generally tied to the consumer price index), as well as provisions for our payment of utilities and maintenance.
We have minimum franchise payments associated with non-cancelable contracts that enable us to display advertising on such
media as buses, trains, bus shelters and terminals. The majority of these contracts contain rent provisions that are calculated as the
greater of a percentage of the relevant advertising revenue or a specified guaranteed minimum annual payment. Also, we have non-
cancelable contracts in our radio broadcasting operations related to program rights and music license fees.
In the normal course of business, our broadcasting operations have minimum future payments associated with employee and
talent contracts. These contracts typically contain cancellation provisions that allow us to cancel the contract with good cause.