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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-K
[x] Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the fiscal year ended December 31, 2001, or
[ ] Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period from ________ to _________.
Commission File Number
1-9645
CLEAR CHANNEL COMMUNICATIONS, INC.
(Exact name of registrant as specified in its charter)
Texas
(State of Incorporation) 74-1787539
(I.R.S. Employer Identification No.)
200 East Basse Road
San Antonio, Texas 78209
Telephone (210) 822-2828
(Address, including zip code, and telephone number,
including area code, of registrant’s principal executive offices)
Securities registered pursuant to Section 12(b) of the Act: Common Stock, $.10 par value per share.
Securities registered pursuant to Section 12(g) of the Act: None.
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13
or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. YES X NO___
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not
contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. ___
On March 8, 2002, the aggregate market value of the Common Stock beneficially held by non-affiliates
of the Company was approximately $28.3 billion. (For purposes hereof, directors, executive officers and
10% or greater shareholders have been deemed affiliates).
On March 8, 2002, there were 599,518,802 outstanding shares of Common Stock, excluding 58,599
shares held in treasury.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of our Definitive Proxy Statement for the 2002 Annual Meeting, expected to be filed within 120
days of our fiscal year end, are incorporated by reference into Part III.

Table of contents

  • Page 1
    ...1-9645 CLEAR CHANNEL COMMUNICATIONS, INC. (Exact name of registrant as specified in its charter) Texas (State of Incorporation) 74-1787539 (I.R.S. Employer Identification No.) 200 East Basse Road San Antonio, Texas 78209 Telephone (210) 822-2828 (Address, including zip code, and telephone number...

  • Page 2
    ...and Executive Officers of the Registrant...100 Item 11. Executive Compensation ...102 Item 12. Security Ownership of Certain Beneficial Owners and Management...102 Item 13. Certain Relationships and Related Transactions ...102 PART IV. Item 14. Exhibits, Financial Statement Schedules, and Reports on...

  • Page 3
    ... 31% 4% 100% Segment Radio Broadcasting Outdoor Advertising Live Entertainment Other Total Our principal executive offices are located at 200 East Basse Road, San Antonio, Texas 78209 (telephone: 210-822-2828). Radio Broadcasting Radio Stations As of December 31, 2001, we owned, programmed or sold...

  • Page 4
    ... available revenue dollars without jeopardizing listening levels. Although the number of advertisements broadcast during a given time period may vary, the total number of advertisements broadcast on a particular station generally does not vary significantly from year to year. Our radio broadcasting...

  • Page 5
    ... owned or operated a total of 68 domestic venues and 28 international venues. Additionally, we currently own various interests in live entertainment companies, which we account for under the equity method of accounting. As a promoter, we typically book talent or tours, sell tickets and advertise the...

  • Page 6
    ... national advertising is sold by national sales representatives. The primary sources of programming for our ABC, NBC, CBS and FOX affiliated television stations are their respective networks, which produce and distribute programming in exchange for each station's commitment to air the programming...

  • Page 7
    ... system operators. Katz Media generates revenues primarily through contractual commissions realized from the sale of national spot advertising air time. National spot advertising is commercial air time sold to advertisers on behalf of radio and television stations and cable systems located outside...

  • Page 8
    ...promote one of our live entertainment events or venues. To support our radio broadcasting, outdoor advertising and live entertainment strategies, we have decentralized our operating structure in order to place authority, autonomy and accountability at the market level which provides local management...

  • Page 9
    ... respect to significant acquisitions not set forth in this report, we expect from time to time to pursue additional acquisitions and may decide to dispose of certain businesses. Such acquisitions or dispositions could be material. Public Offerings On October 26, 2001, we completed a debt offering of...

  • Page 10
    ... York, NY Los Angeles, CA Chicago, IL San Francisco, CA Dallas, TX Philadelphia, PA Washington, DC Boston, MA Houston, TX Detroit, MI Atlanta, GA Miami, FL Seattle, WA Phoenix, AZ Minneapolis, MN San Diego, CA Long Island, NY St. Louis, MO Baltimore, MD Tampa, FL Denver, CO Pittsburgh, PA Portland...

  • Page 11
    ..., CA Riverside, CA Kansas City, KS/MO San Jose, CA San Antonio, TX Milwaukee, WI Salt Lake City, UT Providence, RI Columbus, OH Charlotte, NC Norfolk, VA Orlando, FL Indianapolis, IN Las Vegas, NV Greensboro, NC Austin, TX Nashville, TN New Orleans, LA Raleigh, NC West Palm Beach, FL Memphis...

  • Page 12
    ... Greece Holland Market Rank* 74 75 76 77 78 79 79 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 100 101-150 151-200 201-250 251+ unranked Radio Broadcasting Stations 4 4 6 5 2 6 7 7 4 6 5 3 6 7 6 5 4 7 6 2 6 4 144 142 131 101 169 Outdoor Live Advertising Entertainment Display Faces Venues...

  • Page 13
    ... programming to and sell airtime under exclusive sales agency arrangements. Also excluded are radio stations in Australia, New Zealand, Czech Republic, Mexico, Norway and The United Kingdom. We own a 50%, 33%, 50%, 40%, 50% and 32% equity interest in companies that have radio broadcasting operations...

  • Page 14
    ... than 100 syndicated radio programs for more than 7,800 radio stations including Rush Limbaugh, The Dr. Laura Show and The Rick Dees Weekly Top 40, which are three of the top rated radio programs in the United States. We also own various sports, news and agriculture networks. Live Entertainment In...

  • Page 15
    ... media companies, such as existing networks and major station groups, increased sharply the competition for and the prices of attractive stations. License Grant and Renewal Under the 1996 Act, the FCC grants broadcast licenses to both radio and television stations for terms of up to eight years...

  • Page 16
    ... effect on competition and diversity," with respect to certain applications for consent to radio station acquisitions based on estimated advertising revenue shares or other criteria. With respect to television, the 1996 Act directed the FCC to eliminate the then-existing 12station national limit for...

  • Page 17
    ... in the same market and sells all of the advertising within that programming. Under these rules, an entity that owns one or more radio or television stations in a market and programs more than 15% of the broadcast time on another station in the same service (radio or television) in the same market...

  • Page 18
    ... programming hours) or a same-market media owner (including broadcasters, cable operators, and newspapers). To the best of our knowledge at present, none of our officers, directors or five percent stockholders holds an interest in another television station, radio station, cable television system...

  • Page 19
    ... is completed, certain pending and future radio sale applications which raise "concerns" about how the FCC counts the number of stations a company may own in a market. This deferral policy has delayed FCC approval of our acquisitions of four radio stations in two pending transactions, and may delay...

  • Page 20
    ... air syndicated programming, cable and satellite systems' carriage of syndicated and network programming on distant stations, political advertising practices, application procedures and other areas affecting the business or operations of broadcast stations. Public Interest Programming. Broadcasters...

  • Page 21
    ... of radio programming with fidelity comparable to compact discs. The FCC has authorized two companies to launch and operate satellite digital audio radio service systems. Sirius Satellite Radio Inc. has launched three satellites and began commercial service in a few cities in February 2002. XM Radio...

  • Page 22
    ... affecting competition in the mass communications industry, such as direct broadcast satellite service, the continued establishment of wireless cable systems and low power television stations, "streaming" of audio and video programming via the Internet, digital television and radio technologies, the...

  • Page 23
    ... of our revenues from international radio broadcasting, outdoor advertising and live entertainment operations in countries around the world and a key element of our business strategy is to expand our international operations. The risks of doing business in foreign countries which could result in...

  • Page 24
    ... stations than allowed by the Telecommunications Act of 1996 in markets or geographical areas where the company also owns television stations. These modified rules could require us to divest radio stations we currently own in markets or areas where we also own television stations. Moreover, changes...

  • Page 25
    Antitrust Regulations May Limit Our Acquisition Strategy Additional acquisitions by us of radio and television stations, outdoor advertising properties and live entertainment operations or entities may require antitrust review by federal antitrust agencies and may require review by foreign antitrust...

  • Page 26
    ... billboard advertising near schools and other locations frequented by children. Some cities have proposed even broader restrictions, including complete bans on outdoor tobacco advertising on billboards, kiosks, and private business window displays. It is possible that state and local governments may...

  • Page 27
    ... of operations and systems; our management's attention may be diverted from other business concerns; and we may lose key employees of acquired companies or stations. We frequently evaluate strategic opportunities both within and outside our existing lines of business. We expect from time to time to...

  • Page 28
    ... advertising fees, ticket prices or profit margins include: • unfavorable economic conditions, both general and relative to the radio broadcasting, outdoor advertising and live entertainment industries, which may cause companies to reduce their expenditures on advertising or corporate sponsorship...

  • Page 29
    ... service obligations on television broadcasters in return for their use of the digital television spectrum. This could add to our operational costs. One issue yet to be resolved is the extent to which cable systems will be required to carry broadcasters' new digital channels. Our television stations...

  • Page 30
    ... in other countries in which we currently do business; our ability to integrate the operations of recently acquired companies; shifts in population and other demographics; industry conditions, including competition; fluctuations in operating costs; technological changes and innovations; changes in...

  • Page 31
    .... A radio station's transmitter sites and antenna sites are generally located in a manner that provides maximum market coverage. Outdoor Advertising The headquarters of our domestic outdoor advertising operations is in 15,505 square feet of leased office space in Phoenix, Arizona. The lease on this...

  • Page 32
    ... all of the equipment used in our radio broadcasting, outdoor advertising and live entertainment businesses. As noted in Item 1 above, as of December 31, 2001, we own or program 1,165 radio stations, own or lease 730,039 outdoor advertising display faces and own or operate 96 entertainment venues in...

  • Page 33
    ... number of beneficial holders whose shares may be held of record by brokerage firms and clearing agencies. The following table sets forth, for the calendar quarters indicated, the reported high and low sales prices of the common stock as reported on the NYSE. Clear Channel Common Stock Market Price...

  • Page 34
    ... Corporate expenses Operating income (loss) Interest expense Gain (loss) on sale of assets related to mergers Gain (loss) on marketable securities Equity in earnings of nonconsolidated affiliates Other income (expense) - net Income before income taxes and extraordinary item Income tax benefit...

  • Page 35
    ... and international radio assets and radio networks; Outdoor Advertising which includes domestic and international billboards, transit displays, street furniture and other outdoor advertising media; and Live Entertainment which includes live music, theatrical, family entertainment and motor sports...

  • Page 36
    ... affiliates Other income (expense) - net Income tax benefit (expense) Net income (loss) Other Data: Cash Flow from Operating Activities Cash Flow from Investing Activities Cash Flow from Financing Activities * See page 35 for cautionary disclosure Years Ended December 31, % Change 2000 2001...

  • Page 37
    ...of selling costs and artist payments related to our change in the mix of live music events within the entertainment division as compared to fiscal year 2000. In addition, pro forma divisional operating expenses increased in our other segments relating to the reorganization of these business units as...

  • Page 38
    ... to the sale of 39 stations in connection with governmental directives regarding the AMFM merger, which realized a gain of $805.2 million. This gain for 2000 was partially offset by a loss of $5.8 million related to the sale of 1.3 million shares of Lamar Advertising Company that we acquired in the...

  • Page 39
    ... recognized in 2001 related primarily to a $168.0 million gain on a non-cash, tax-free exchange of the assets of one television station for the assets of two television stations. Income taxes for the year ended December 31, 2001 and 2000 were provided at the federal and state statutory rates plus...

  • Page 40
    ... these markets was predominately due to the decline in national advertising during 2001 as compared to 2000. In addition, our radio network revenue declined $45.1 million, or 15% of the total decline during 2001 as compared to 2000, again directly related to the decline in the overall economy. On...

  • Page 41
    Outdoor Advertising (In thousands) As Reported Basis: Revenue Divisional Operating Expenses EBITDA as Adjusted * * See page 35 for cautionary disclosure Years Ended December 31, % Change 2000 2001 v. 2000 2001 $ 1,748,031 $ 1,729,438 1% 1,220,681 1,078,540 13% $ 527,350 $ 650,898 (19)% Years Ended ...

  • Page 42
    ... the number of live events decreased over the prior period, during 2001, we changed the mix of live music events to include approximately 48% more stadium and arena events as compared to the prior year. Stadium and arenas are generally larger venues that allow for more ticket sales related to...

  • Page 43
    ... revenue, as well as additional costs relating to the reorganization of the division during the quarter ended December 31, 2001. Segment Reconciliations (In thousands) EBITDA as Adjusted * Radio Broadcasting Outdoor Advertising Live Entertainment Other Corporate Consolidated EBITDA as Adjusted...

  • Page 44
    ... extraordinary item Other Data: Cash Flow from Operating Activities Cash Flow from Investing Activities Cash Flow from Financing Activities * See page 35 for cautionary disclosure Years Ended December 31, % Change 1999 2000 v. 1999 2000 $ 5,345,306 $ 2,678,160 100% 3,480,706 1,632,115 113% 142,627...

  • Page 45
    ... in our radio and outdoor businesses as well as increased inventory demand within the advertising industry. The increase in the number of live entertainment events and the number of show dates in fiscal year 2000 also contributed to the increase in revenue on a pro forma basis. Divisional operating...

  • Page 46
    ... shares of Lamar Advertising Company that we acquired in the AMFM merger; and a net loss of $15.7 million related to write-downs of investments acquired in mergers. The gain in 1999 of $138.7 million relates to the sale of 12 radio stations as a result of governmental directives related to the...

  • Page 47
    ... due to our 2000 and 1999 acquisitions and internal growth. Included in our fiscal year 2000 reported basis amounts are revenues and divisional operating expenses for a twelve-month period from our acquisition of Jacor that was acquired in May 1999 and Dame Media which was acquired in July 1999. In...

  • Page 48
    ... revenue for the entire year. In addition, our national platform approach to selling advertising to our national customers helped increase our overall rates, especially in our larger markets. High growth rates were primarily achieved internationally in our United Kingdom and France markets. On...

  • Page 49
    ... live entertainment business with our acquisition of SFX in August 2000, we did not report revenue and divisional operating expenses in 1999. On a pro forma basis, revenue increased due to an increase in the number of events and the number of show dates in fiscal year 2000 as compared to fiscal year...

  • Page 50
    Segment Reconciliations (In thousands) EBITDA as Adjusted * Radio Broadcasting Outdoor Advertising Live Entertainment Other Corporate Consolidated EBITDA as Adjusted * * See page 35 for cautionary disclosure As Reported Years Ended December 31, 1999 2000 $ 1,045,696 $ 499,692 650,898 468,096 73,472 ...

  • Page 51
    ... fair value purchase accounting adjustment premiums related to the merger with AMFM. Also includes $106.6 million related to fair value adjustments for interest rate swap agreements. (c) Total face value of outstanding debt was $9.4 billion at December 31, 2001. Domestic Credit Facilities We...

  • Page 52
    ... interest. We utilized availability on the reducing revolving line of credit to finance the redemption. The redemption resulted in a gain of $3.9 million, net of tax. Chancellor Media Corporation, Capstar Radio Broadcasting Partners, Capstar Broadcasting Partners, Inc. and AMFM Operating Inc., or...

  • Page 53
    .... Sale of Marketable Securities In connection with our merger with AMFM on August 30, 2000, Clear Channel and AMFM entered into a Consent Decree with the Department of Justice regarding AMFM's investment in Lamar Advertising Company. The Consent Decree, among other things, required us to sell all...

  • Page 54
    ... represented the right to purchase .2355422 shares of our common stock at an exercise price of $24.19 per full share. During the year ended December 31, 2001, we received $122.5 million in proceeds and issued 5.1 million shares of common stock on the exercise of these warrants. Shelf Registration...

  • Page 55
    ...increase in the number of radio stations, billboards and displays owned during the year ended December 31, 2001 as compared to the year ended December 31, 2000. In addition, we incurred capital expenditures related to our new live entertainment segment during the year ended December 31, 2001 that we...

  • Page 56
    ... year ended December 31, 2001 is the purchase of land for an additional corporate facility to replace leased space, purchase of certain corporate assets, upgrades of our television related operating assets and other technology expenditures. Future acquisitions of radio broadcasting stations, outdoor...

  • Page 57
    ...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. In addition...

  • Page 58
    ... foreign countries or on the results of operations of these foreign entities. Recent Accounting Pronouncements On July 1, 2001, we adopted Statement of Financial Accounting Standards No. 141, Business Combinations. Statement 141 addresses financial accounting and reporting for business combinations...

  • Page 59
    ... Assets. Statement 142 addresses financial accounting and reporting for acquired goodwill and other intangible assets and supersedes APB Opinion No. 17, Intangible Assets. Statement 142 is effective for fiscal years beginning after December 15, 2001. This statement establishes new accounting for...

  • Page 60
    ...the available-for-sale securities, net of tax, are reported as a separate component of shareholders' equity. The net unrealized gains or losses on the trading securities are reported in the statement of operations. In addition, we hold investments that do not have quoted market prices. We review the...

  • Page 61
    ...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: Year Ended December 31, 2001 2000 1999 1998 1997 * 2.20...

  • Page 62
    .... The independent auditors have unrestricted access to the Board, without management present, to discuss the results of their audit and the quality of financial reporting and internal accounting controls. Lowry Mays Chairman/Chief Executive Officer Herbert W. Hill, Jr. Senior Vice President/Chief...

  • Page 63
    ... at December 31, 2001 and 2000, and the consolidated results of their operations and their cash flows for each of the three years in the period ended December 31, 2001, in conformity with accounting principles generally accepted in the United States. Ernst & Young LLP San Antonio, Texas February 18...

  • Page 64
    ...$61,070 in 2001 and $60,631 in 2000 Prepaid expenses Other current assets Total Current Assets $ 154,744 4,600 1,475,276 163,283 143,396 1,941,299 $ 196,838 308,691 1,557,048 146,767 133,873 2,343,217 PROPERTY, PLANT AND EQUIPMENT Land, buildings and improvements Structures and site leases Towers...

  • Page 65
    ... shares, issued 598,270,433 and 585,766,166 shares in 2001 and 2000, respectively Additional paid-in capital Common stock warrants Retained earnings (deficit) Accumulated other comprehensive income (loss) Other Cost of shares (279,700 in 2001 and 115,557 in 2000) held in treasury Total Shareholders...

  • Page 66
    ...Corporate expenses (excludes non-cash compensation expense of $3,966, $11,673 and $-0- in 2001, 2000 and 1999, respectively) Operating income (loss) Interest expense Gain (loss) on sale of assets related to mergers Gain (loss) on marketable securities Equity in earnings of nonconsolidated affiliates...

  • Page 67
    ...) 20,709 Net income Common Stock, stock options and common stock warrants issued for business acquisitions Deferred compensation acquired Purchase of treasury shares Conversion of Liquid Yield Option Notes Exercise of stock options and common stock warrants Amortization and adjustment of deferred...

  • Page 68
    CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) 2001 Year Ended December 31, 2000 1999 CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) Reconciling Items: Depreciation Amortization of intangibles Deferred taxes Amortization of deferred financing charges, bond premiums and accretion of ...

  • Page 69
    ... Cash acquired in stock-for-stock mergers (Increase) decrease in notes receivable, net Decrease (increase) in investments in, and advances to nonconsolidated affiliates - net Purchases of available-for-sale securities Purchase of other investments Proceeds from sale of available-for-sale-securities...

  • Page 70
    ... entertainment. The Company is one of the largest domestic radio broadcasters based on the number of radio stations for which it owns, programs and sells airtime. The Company is also one of the world's largest outdoor advertising companies based on total advertising display inventory in the United...

  • Page 71
    ... using the straight-line method at rates that, in the opinion of management, are adequate to allocate the cost of such assets over their estimated useful lives, which are as follows: Buildings and improvements- 10 to 39 years Structures and site leases - 5 to 40 years, or life of lease Towers...

  • Page 72
    ... operations. Clients remit the gross billing amount to the agency and the agency remits gross billings less their commission to the Company. Radio broadcasting revenue is recognized as advertisements or programs are broadcast and is generally billed monthly. Outdoor advertising provides services...

  • Page 73
    ... is recognized when advertisements are broadcast or outdoor advertising space is utilized. Merchandise or services received are charged to expense when received or used. The Company believes that the credit risk, with respect to trade receivables is limited due to the large number and the geographic...

  • Page 74
    ... change on the statement of operations for the quarter ended March 31, 2002. In August 2001, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets ("Statement 144"). Statement 144 addresses...

  • Page 75
    ... of 2002. 2001 Acquisitions: During 2001, the Company acquired substantially all of the assets of 183 radio stations, approximately 6,900 additional outdoor display faces and the live entertainment segment acquired music, sports and racing events, promotional assets and sports talent representation...

  • Page 76
    ...on a straight-line basis. The results of operations of AMFM have been included in the financial statements of the Company beginning August 30, 2000. In connection with the AMFM merger and governmental directives, the Company divested 39 radio stations for $1.2 billion, resulting in a gain on sale of...

  • Page 77
    ... refinanced utilizing the Company's credit facility. Dame Media's operations include 21 radio stations in five markets located in New York and Pennsylvania. The Company began consolidating the results of operations on July 1, 1999. Dauphin On June 11, 1999, the Company acquired a 50.5% equity...

  • Page 78
    ... is being amortized over 25 years on a straight-line basis. The results of operations of Jacor have been included in the Company's financial statements beginning May 4, 1999. In order to comply with governmental directives regarding the Jacor merger, the Company divested certain assets valued at...

  • Page 79
    ...Inc. ("SFX") and AMFM Inc. ("AMFM"), the Company restructured the SFX and AMFM operations. The AMFM corporate offices in Dallas and Austin, Texas were closed on March 31, 2001 and a portion of the SFX corporate office in New York was closed on June 30, 2001. Other operations of AMFM have either been...

  • Page 80
    ... (50%) interest in Australian Radio Network ("ARN"), an Australian company that owns and operates radio stations, a narrowcast radio broadcast service and a radio representation company in Australia. Hispanic Broadcasting Corporation The Company owns 26% of the total number of shares of Hispanic...

  • Page 81
    ...Company's investments in these nonconsolidated affiliates: (In thousands) Clear ARN HBC ACIR Media All Others Total At December 31, 2000 $57,806 $157,629 $ 55,443 $ Acquisition of new investments Transfers from cost... Investments 2001 Available-for-sale Trading Other cost investments Total Fair ...

  • Page 82
    ... impairments include investments in various media companies. In connection with the completion of the AMFM merger, Clear Channel and AMFM entered into a Consent Decree with the Department of Justice regarding AMFM's investment in Lamar Advertising Company, ("Lamar"). The Consent Decree, among other...

  • Page 83
    ... value adjustments related to interest rate swaps Liquid Yield Option Notes Various subsidiary level notes Other long-term debt Less: current portion Total long-term debt Revolving Line of Credit Facilities The Company has three separate revolving line of credit facilities. Interest rates for each...

  • Page 84
    ... due 2006, originally issued by SFX Broadcasting (AMFM Operating Inc.). The aggregate remaining balance of these series of AMFM longterm bonds was $1.4 billion at December 31, 2001, which includes a purchase accounting premium of $66.5 million. On January 15, 2002, the Company redeemed all of...

  • Page 85
    ... the Company's common stock at a conversion rate of 7.227 shares per LYON. The LYONs due 2018 had a balance, net of redemptions, conversions to common stock, amortization of premium, and accretion of interest, at December 31, 2001, of $244.4 million, which includes a purchase accounting premium of...

  • Page 86
    ... the Company discontinues hedge accounting. The Company does not enter into derivative instruments for speculation or trading purposes. Interest Rate Risk Management The Company's policy is to manage interest expense using a mix of fixed and variable rate debt. To manage this mix in a cost-efficient...

  • Page 87
    ... 31, 2001, and again on June 25, 2001, Clear Channel Investments, Inc., a wholly-owned subsidiary of the Company, entered into two ten-year secured forward exchange contracts that monetized 2.6 million shares and .3 million shares of the Company's investment in American Tower Corporation, ("AMT...

  • Page 88
    ... office space, certain broadcasting facilities, equipment and the majority of the land occupied by its outdoor advertising structures under long-term operating leases. Some of the lease agreements contain renewal options and annual rental escalation clauses (generally tied to the consumer price...

  • Page 89
    ...one to five year period. Contingent payments based on performance requirements by the seller typically involve the completion of a development or obtaining appropriate permits that enable the Company to construct additional advertising displays. At December 31, 2001, the Company believes its maximum...

  • Page 90
    ... primarily relates to the difference in book and tax basis of acquired radio broadcast intangibles created from the Company's various stock acquisitions. The reconciliation of income tax computed at the U.S. federal statutory tax rates to income tax expense (benefit) is: (In thousands) 2001 Amount...

  • Page 91
    ... acquisition by the Company. During the current year, the Company did not utilize any net operating loss carryforwards. During 2001, the Company recorded certain adjustments to deferred tax assets and related valuation allowances for net operating losses of certain acquired companies. If benefits...

  • Page 92
    ... exchange ratio. The following table presents a summary of the Company's stock options outstanding at and stock option activity during the years ended December 31, 2001, 2000 and 1999. (In thousands, except per share data) Weighted Average Exercise Price Options Per Share 6,007 17.00 3,666 28.00...

  • Page 93
    ...-free interest rates of 5.2% and 4.9% for options granted in 2001 with an expected life of eight years and six years, respectively, and 6.0% for all options granted in 2000 and 1999; a dividend yield of 0%; the volatility factors of the expected market price of the Company's common stock used was...

  • Page 94
    ... without an increase in the market price of Clear Channel stock. Such an increase in stock price would benefit all stockholders commensurately. Other As a result of mergers during 2000, the Company assumed 2.7 million employee stock options that will vest from January 2001 to April 2005. To the...

  • Page 95
    ... retirement benefits for substantially all employees. Both the employees and the Company make contributions to the plan. The Company matches a portion of an employee's contribution. Company matched contributions vest to the employees based upon their years of service to the Company. Contributions...

  • Page 96
    ... and 2000, employees purchased 265,862 and 118,941 shares at a weighted average share price of $45.26 and $64.00, respectively. In 2001, the Company initiated a non-qualified deferred compensation plan for highly compensated executives allowing deferrals of a portion of their annual salary and up...

  • Page 97
    ... three international markets. "Other" includes television broadcasting, sports representation and media representation. (In thousands) Radio Broadcasting Outdoor Live Advertising Entertainment Other Corporate Eliminations Consolidated 2001 Revenue Divisional operating expenses Non-cash compensation...

  • Page 98
    (In thousands) Radio Broadcasting Outdoor Live Advertising Entertainment Other Corporate Eliminations Consolidated 2000 Revenue Divisional operating expenses Non-cash compensation Depreciation Amortization Corporate expenses Operating income (loss) Identifiable assets Capital expenditures 1999 ...

  • Page 99
    ... expense in the quarters ended September 30, 2000 and December 31, 2000 includes estimated taxes related to divestiture gains. The Company's Common Stock is traded on the New York Stock Exchange under the symbol CCU. ITEM 9. Changes in and Disagreements with Accountants on Accounting and Financial...

  • Page 100
    .../Chief Accounting Officer Senior Vice President/General Counsel and Secretary Chief Executive Officer - Clear Channel Outdoor Chief Executive Officer - Clear Channel International President/Chief Operating Officer - Clear Channel Outdoor Senior Vice President/Finance Chairman/Chief Executive Officer...

  • Page 101
    ... Vice President and General Counsel of Eller Media from March 1996 to March 1999. Mr. Meyer was appointed President/Chief Executive Officer - Clear Channel Outdoor effective with Mr. Eller's retirement on December 31, 2001. Ms. Hill was appointed Senior Vice President/Finance in May 2000. Prior...

  • Page 102
    ... to the information set forth under the caption "Executive Compensation" in our Definitive Proxy Statement, expected to be filed within 120 days of our fiscal year end. ITEM 12. Security Ownership of Certain Beneficial Owners and Management The information required by this item is incorporated by...

  • Page 103
    ...following financial statement schedule for the years ended December 31, 2001, 2000 and 1999 and related report of independent auditors is filed as part of this report and should be read in conjunction with the consolidated financial statements. Schedule II Valuation and Qualifying Accounts All other...

  • Page 104
    SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS Allowance for Doubtful Accounts (In thousands) Charges to Costs, Expenses and other Description Year ended December 31, 1999 Year ended December 31, 2000 Year ended December 31, 2001 Balance at Beginning of period Write-off of Accounts Receivable ...

  • Page 105
    SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS Deferred Tax Asset Valuation Allowance (In thousands) Charges to Costs, Expenses and other Description Year ended December 31, 1999 Year ended December 31, 2000 Year ended December 31, 2001 Balance at Beginning of period Deletions (2) Other (1) ...

  • Page 106
    ... to Clear Channel's Quarterly Report on Form 10-Q for the quarter ended March 31, 1999). Third Amendment to Clear Channel's Articles of Incorporation (incorporated by reference to the exhibits to Clear Channel's Quarterly Report on Form 10-Q for the quarter ended May 31, 2000). Buy-Sell Agreement...

  • Page 107
    ... dated October 1, 1997, by and between Clear Channel Communications, Inc. and The Bank of New York, as Trustee (incorporated by reference to the exhibits to Clear Channel's Quarterly Report on Form 10-Q for the quarter ended September 30, 2001). 4.5 4.6 4.7 4.8 4.9 4.10 4.11 4.12 107

  • Page 108
    ... 14A Proxy Statement dated March 24, 1998). Voting Agreement dated as of October 8, 1998, by and among Jacor Communications, Inc. and L. Lowry Mays, Mark P. Mays and Randall T. Mays and certain related family trusts (incorporated by reference to the exhibits to the Company's Quarterly Report on...

  • Page 109
    ...the quarter ended September 30, 1999). Fourth Amended and Restated Credit Agreement by and among Clear Channel Communications, Inc., Bank of America, N.A., as administrative agent, Fleet National Bank, as documentation agent, the Bank of Montreal and Toronto Dominion (Texas), Inc., as co-syndication...

  • Page 110
    ...Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on March 18, 2002. CLEAR CHANNEL COMMUNICATIONS, INC. By:/S/ L. Lowry Mays L. Lowry Mays Chairman and Chief Executive Officer Power of Attorney Each person whose...

  • Page 111
    Name /S/ Alan D. Feld Alan D. Feld /S/ Thomas O. Hicks Thomas O. Hicks /S/ Vernon E. Jordan, Jr. Vernon E. Jordan, Jr. /S/ Perry J. Lewis Perry J. Lewis /S/ B. J. McCombs B. J. McCombs /S/ Theodore H. Strauss Theodore H. Strauss /S/ John H. ...