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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-K
For the fiscal year ended December 31, 2007, or
For the transition period from to .
Commission File Number
1-9645
CLEAR CHANNEL COMMUNICATIONS, INC.
(Exact name of registrant as specified in its charter)
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:
Securities registered pursuant to Section 12(g) of the Act: None.
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. YES NO
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act.
YES NO
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 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.
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting
company. See definition of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
(Check one):
Indicate by checkmark whether the registrant is a shell company (as defined in Exchange Act Rule 12b-2). YES NO
As of June 30, 2007, the aggregate market value of the Common Stock beneficially held by non-affiliates of the registrant was approximately
$17.4 billion based on the closing sale price as reported on the New York Stock Exchange. (For purposes hereof, directors, executive officers
and 10% or greater shareholders have been deemed affiliates).
On February 13, 2008, there were 497,879,312 outstanding shares of Common Stock, excluding 173,897 shares held in treasury.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of our Definitive Proxy Statement for the 2008 Annual Meeting, expected to be filed within 120 days of our fiscal year end, are
incorporated by reference into Part III.
Annual re
p
ort
p
ursuant to Section 13 or 15(d) of the Securities Exchan
g
e Act of 1934
Transition re
p
ort
p
ursuant to Section 13 or 15(d) of the Securities Exchan
g
e Act of 1934
Texas
(State of Incorporation)
74-1787539
(I.R.S. Employer Identification No.)
Title of each class Name of each exchange on which registered
Common Stock, $0.10 par value per share New York Stock Exchange
Large accelerated filer Accelerated filer Non-accelerated filer Smaller reporting company
(Do not check if a smaller reporting company)

Table of contents

  • Page 1
    ... on the closing sale price as reported on the New York Stock Exchange. (For purposes hereof, directors, executive officers and 10% or greater shareholders have been deemed affiliates). On February 13, 2008, there were 497,879,312 outstanding shares of Common Stock, excluding 173,897 shares held in...

  • Page 2
    ...Accountants on Accounting and Financial Disclosure Item 9A. Controls and Procedures Item 9B. Other Information PART III. Item 10. Directors, Executive Officers and Corporate Governance Item 11. Executive Compensation Item 12. Security Ownership of Certain Beneficial Owners and Management and Related...

  • Page 3
    ... name Live Nation. As of December 31, 2007, we owned 717 core radio stations, 288 non-core radio stations which are being marketed for sale and a leading national radio network operating in the United States. In addition, we had equity interests in various international radio broadcasting companies...

  • Page 4
    ... not a condition to the closing of the merger and is not contingent on the closing of the merger. Operating Segments We have three reportable business segments: Radio Broadcasting, Americas Outdoor Advertising and International Outdoor Advertising. • Radio Broadcasting. As of December 31, 2007, we...

  • Page 5
    ... have invested in real estate locations and new display technologies, such as digital billboards, which we believe will continue to support future revenue growth. • Attractive Out-of-home Industry Fundamentals. We believe both radio broadcasting and outdoor advertising offer valuable out-ofhome...

  • Page 6
    ... revenue and cash flow. Our radio broadcasting strategy also entails improving the ongoing operations of our stations through effective programming, promotion, marketing and sales and careful management of costs. Drive Local and National Advertising. We intend to drive growth in our radio business...

  • Page 7
    ... interact directly with the station, including finding titles/artists, requesting songs and downloading station wallpapers. • • • Americas and International Outdoor We seek to capitalize on our global outdoor network and diversified product mix to maximize revenue. In addition, by sharing...

  • Page 8
    ... markets for audiences, advertising revenue and programming with other radio stations owned by companies such as CBS, Cox Radio, Entercom and Radio One. We also compete with other advertising media, including satellite radio, broadcast and cable television, print media, outdoor advertising, direct...

  • Page 9
    Market Market Rank* Number of Stations New York, NY Los Angeles, CA Chicago, IL San Francisco, CA Dallas-Ft. Worth, TX Houston-Galveston, TX Philadelphia, PA...-San Bernardino, CA Sacramento, CA Cleveland, OH Cincinnati, OH San Antonio, TX Salt Lake City-Ogden-Provo, UT Las Vegas, NV Orlando, FL San...

  • Page 10
    Spokane, WA Mobile, AL Colorado Springs, CO Ft. Pierce-Stuart-Vero Beach, FL Melbourne-Titusville-Cocoa, FL Wichita, KS Madison, WI Various U.S. Cities Various U.S. Cities Various U.S. Cities Various U.S. Cities Various U.S. Cities Non-core (a) Total (b) 92 93 95 96 97 98 99 101-150 151-200 201-250...

  • Page 11
    ... Mexican radio station that we provide programming to and sell airtime for under exclusive sales agency arrangements. Also excluded are radio stations in Australia, New Zealand and Mexico. We own a 50%, 50% and 40% equity interest in companies that have radio broadcasting operations in these markets...

  • Page 12
    ... posters. Street Furniture Displays Our street furniture displays, marketed under our global AdshelTM brand, are advertising surfaces on bus shelters, information kiosks, public toilets, freestanding units and other public structures, and are primarily located in major metropolitan cities and along...

  • Page 13
    ... respective markets, including broadcast and cable television, radio, print media, the Internet and direct mail. Advertising Inventory and Markets As of December 31, 2007, we owned or operated approximately 209,000 displays in our Americas Outdoor Advertising segment. The following table sets forth...

  • Page 14
    DMA® Region Rank Markets Billboards Bulletins Posters Street Furniture Displays Transit Displays Other Displays (1) Total Displays 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 41 42 43 44 45 46 47 48 49 50 51-100 101-150 151+ n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a ...

  • Page 15
    ... out-of-home advertising displays, such as neon displays. The following table shows the approximate percentage of revenue derived from each inventory category of our International Outdoor Advertising segment: 2007 Year Ended December 31, 2006 2005 Billboards (1) Street furniture displays Transit...

  • Page 16
    ... our International Outdoor Advertising inventory, which are listed in descending order according to 2007 revenue contribution: Street Furniture Displays Transit Displays (2) Other Displays (3) Total Displays International Markets Billboards(1) France United Kingdom Italy China Spain Australia/New...

  • Page 17
    ... the displays listed above, as of December 31, 2007, we had equity investments in various out-of-home advertising companies that operate in the following markets: Equity Investment Street Furniture Transit Displays Displays Market Company Billboards(1) Outdoor Advertising Companies South Africa...

  • Page 18
    ... television networks, including ABC, CBS, NBC, FOX, CW, CW100+, MyNetworkTV, Telemundo, our internally created Variety TV network and several independent, non-affiliated stations. Television revenue is generated primarily from the sale of local and national advertising. Advertising rates depend...

  • Page 19
    ... licenses to both radio and television stations for terms of up to eight years. The 1996 Act requires the FCC to renew a broadcast license if it finds that the station has served the public interest, convenience and necessity; there have been no serious violations of either the Communications...

  • Page 20
    ...licensee's station 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...

  • Page 21
    ...public interest benefits the combinations have produced and the extent to which the combinations have enabled the television stations involved to convert to digital operation. In November 2007, the FCC issued its initial order approving the sale of our television stations. Upon the sale's completion...

  • Page 22
    ... the public interest, based on a liberalized set of waiver criteria. The FCC eliminated its rules prohibiting ownership of a daily newspaper and a broadcast station, and limiting ownership of television and radio stations, in the same market. In place of those rules, the FCC adopted new "cross-media...

  • Page 23
    ... the laws of a foreign nation are barred from holding broadcast licenses. Non-United States citizens, collectively, may own or vote up to 20% of the capital stock of a corporate licensee. A broadcast license may not be granted to or held by any entity that is controlled, directly or indirectly, by...

  • Page 24
    ...-affiliate relations, the ability of stations to obtain exclusive rights to air syndicated programming, cable and satellite systems' carriage of syndicated and network programming on distant stations, political advertising practices, obscenity and indecency in broadcast programming, application...

  • Page 25
    ... 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 establishment of...

  • Page 26
    ... and 31.2 to this report. Additionally, in 2007 our Chief Executive Officer submitted a Section 303A.12(a) CEO Certification to the New York Stock Exchange ("NYSE") certifying that he was not aware of any violation by Clear Channel of the NYSE's corporate governance listing standards. Item 1A. Risk...

  • Page 27
    ... rapidly changing public tastes. A loss of such popularity or audience loyalty is beyond our control and could limit our ability to generate revenue. Our business is also dependent upon the performance of our management team and other key employees. Although we have entered into long-term agreements...

  • Page 28
    ...agreements to provide programming to or sell advertising on stations we do not own. Moreover, the FCC's existing rules in some cases permit a company to own fewer radio stations than allowed by the 1996 Act in markets or geographical areas where the company also owns television stations. These rules...

  • Page 29
    ... location of billboards and the use of new technologies for changing displays, such as digital displays, are regulated by federal, state and local governments. From time to time, states and municipalities have prohibited or significantly limited the construction of new outdoor advertising structures...

  • Page 30
    ... in our direct revenue from such advertisements and an increase in the available space on the existing inventory of billboards in the outdoor advertising industry. Our business may be adversely affected if planned dispositions of small market radio station assets and our television business are not...

  • Page 31
    ... advertising revenue with other radio stations and outdoor advertising companies, as well as with other media, such as newspapers, magazines, television, direct mail, satellite radio and Internet based media, within their respective markets. Audience ratings and market shares are subject to change...

  • Page 32
    ... media platforms compete with our radio and television stations for audience share and advertising revenue, and in the case of some products, allow listeners and viewers to avoid traditional commercial advertisements. The FCC has also approved new technologies for use in the radio broadcasting...

  • Page 33
    ... office building and an approximately 123,000 square foot data and administrative service center. Radio Broadcasting Our radio executive operations are located in our corporate headquarters in San Antonio, Texas. The types of properties required to support each of our radio stations include offices...

  • Page 34
    ... regarding commercial advertising run by us on behalf of offshore and/or online (Internet) gambling businesses, including sports bookmaking and casino-style gambling. On October 5, 2006, we received a subpoena from the Assistant United States Attorney for the Southern District of New York requiring...

  • Page 35
    ...the outcome of the lawsuits, we may incur significant related expenses and costs that could have an adverse effect on our business and operations. Furthermore, the cases could involve a substantial diversion of the time of some members of management. Accordingly, we are unable to estimate the impact...

  • Page 36
    ... and Affiliated Purchases During the three months ended December 31, 2007, we accepted shares in payment of income taxes due upon the vesting of restricted stock awards as follows: Total Number of Shares Purchased as Average Part of Publicly Price Paid Announced per Share Programs Maximum Dollar...

  • Page 37
    ... other data should be read in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our consolidated financial statements and the related notes thereto appearing elsewhere in this Form 10-K. (In thousands) 2007 (1) 2006 (2) For the Years ended...

  • Page 38
    2007 (1) 2006 (2) For the Years ended December 31, 2005 2004 2003 Net income (loss) per common share: Basic: Income before discontinued operations and cumulative effect of a change in accounting principle Discontinued operations Income before cumulative effect of a change in accounting principle...

  • Page 39
    ...a group led by Thomas H. Lee Partners, L.P. and Bain Capital Partners, LLC on September 25, 2007. The transaction remains subject to customary closing conditions. Under the terms of the Merger Agreement, as amended, our shareholders will receive $39.20 in cash for each share they own plus additional...

  • Page 40
    ... Broadcasting, or radio, which includes our national syndication business, Americas Outdoor Advertising, or Americas, and International Outdoor Advertising, or International. Included in the "other" segment are our media representation business, Katz Media, as well as other general support services...

  • Page 41
    ... revenue-sharing or minimum guaranteed amounts payable under our billboard, street furniture and transit display contracts. Our direct production, maintenance and installation expenses include costs for printing, transporting and changing the advertising copy on our displays, the related labor costs...

  • Page 42
    ... compensation costs related to share-based payments for the years ended December 31, 2007 and 2006: (In millions) Year Ended December 31, 2007 2006 Radio Broadcasting Direct Operating Expenses SG&A Americas Outdoor Advertising Direct Operating Expenses SG&A International Outdoor Advertising Direct...

  • Page 43
    ... million for the year ended December 31, 2006 mostly related to $34.7 million in our radio segment primarily from the sale of stations and programming rights and $13.2 million in our Americas outdoor segment from the exchange of assets in one of our markets for the assets of a third party located in...

  • Page 44
    ...our television business that are recorded as income from discontinued operations for 2007 and 2006, respectively. Radio Broadcasting Results of Operations Our radio broadcasting operating results were as follows: (In thousands) Years Ended December 31, 2007 2006 % Change 2007 v. 2006 Revenue Direct...

  • Page 45
    ... advertising categories during the year were telecommunications, retail, automotive, financial services and amusements. Revenue growth occurred across our markets, led by Los Angeles, New York, Washington/Baltimore, Atlanta, Boston, Seattle and Minneapolis. Our Americas direct operating expenses...

  • Page 46
    ... Limited, or Clear Media, a Chinese outdoor advertising company. We began consolidating Clear Media in the third quarter of 2005. Increased street furniture revenue also contributed to our international revenue growth. Our 2006 revenue increased $17.4 million due to movements in foreign exchange...

  • Page 47
    ... million for the year ended December 31, 2006 mostly related to $34.7 million in our radio segment primarily from the sale of stations and programming rights and $13.2 million in our Americas outdoor segment from the exchange of assets in one of our markets for the assets of a third party located in...

  • Page 48
    ... growth was primarily focused in our top 100 media markets. Significant advertising categories contributing to the revenue growth for the year were political, services, automotive, retail and entertainment. Our radio broadcasting direct operating expenses increased $69.7 million during 2006 as...

  • Page 49
    ... of Clear Media and $2.9 million from movements in foreign exchange. Reconciliation of Segment Operating Income (Loss) (In thousands) Years Ended December 31, 2006 2005 Radio Broadcasting Americas Outdoor Advertising International Outdoor Advertising Other Gain on disposition of assets - net Merger...

  • Page 50
    ... in accounts receivable as a result of the increase in revenue and a $390.4 million federal income tax refund related to restructuring our international businesses consistent with our strategic realignment and the utilization of a portion of the capital loss generated on the spin-off of Live Nation...

  • Page 51
    ... in share repurchases, all partially offset by the proceeds from the initial public offering of CCO of $600.6 million, and proceeds of $40.2 million related to the exercise of stock options. Discontinued Operations Definitive asset purchase agreements were signed for 81 radio stations at December...

  • Page 52
    ... upon a change in long-term debt ratings that would have a material impact to our financial statements. Additionally, our 8% senior notes due 2008, which were originally issued by AMFM Operating Inc., a wholly-owned subsidiary of Clear Channel, contain certain restrictive covenants that limit the...

  • Page 53
    .... Acquisitions We acquired domestic outdoor display faces and additional equity interests in international outdoor companies for $69.1 million in cash during 2007. Our national representation business acquired representation contracts for $53.0 million in cash during 2007. Capital Expenditures Year...

  • Page 54
    ... 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...

  • Page 55
    ... of which relates to unrecognized tax benefits recorded pursuant to Financial Accounting Standards Board Interpretation No. 48, Accounting for Uncertainty in Income Taxes. Market Risk Interest Rate Risk At December 31, 2007, approximately 20% of our long-term debt, including fixed-rate debt on...

  • Page 56
    ... its deferred tax benefits that are recognizable because of a business combination either in income from continuing operations in the period of the combination or directly in contributed capital, depending on the circumstances. Statement 141(R) is effective for fiscal years beginning after December...

  • Page 57
    ... losses that could be material to our results of operations. Goodwill Goodwill represents the excess of the purchase price over the fair value of identifiable net assets acquired in business combinations. We review goodwill for potential impairment annually using the income approach to determine 56

  • Page 58
    ... assumptions using the direct method are market revenue growth rates, market share, profit margin, duration and profile of the build-up period, estimated start-up capital costs and losses incurred during the build-up period, the risk-adjusted discount rate and terminal values. This data is populated...

  • Page 59
    ..., 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: 2007 2006 Year Ended December 31, 2005 2004 2003 2.35...

  • Page 60
    ... the Public Company Accounting Oversight Board (United States) and, accordingly, they have expressed their professional opinion on the financial statements in their report included herein. The Board of Directors meets with the independent registered public accounting firm and management periodically...

  • Page 61
    ... statements, in 2006 the Company changed its method of accounting for stock-based compensation. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the Company's internal control over financial reporting as of December 31, 2007...

  • Page 62
    ... $59,169 in 2007 and $56,068 in 2006 Prepaid expenses Other current assets Income taxes receivable Current assets from discontinued operations Total Current Assets PROPERTY, PLANT AND EQUIPMENT Land, buildings and improvements Structures Towers, transmitters and studio equipment Furniture and other...

  • Page 63
    ...AND SHAREHOLDERS' EQUITY (In thousands, except share data) December 31, 2007 December 31, 2006 CURRENT LIABILITIES Accounts payable Accrued expenses Accrued interest Accrued income taxes Current portion of long-term debt Deferred income Current liabilities from discontinued operations Total Current...

  • Page 64
    CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) 2007 Year Ended December 31, 2006 2005 Revenue Operating expenses: Direct operating expenses (includes share-based payments of $16,975, $16,142 and $212 in 2007, 2006 and 2005, respectively and excludes depreciation and ...

  • Page 65
    ...,590 (29,447) (In thousands, except share data) Balances at December 31, 2004 Net income Dividends declared Spin-off of Live Nation Gain on sale of subsidiary common stock Purchase of common shares Treasury shares retired and cancelled Exercise of stock options and other Amortization and adjustment...

  • Page 66
    ... exchange contract (Gain) loss on trading securities Equity in earnings of nonconsolidated affiliates Minority interest, net of tax Increase (decrease) other, net Changes in operating assets and liabilities, net of effects of acquisitions and dispositions: Decrease (increase) in accounts receivable...

  • Page 67
    ... Proceeds from long-term debt Payments on long-term debt Payment to terminate forward exchange contract Proceeds from exercise of stock options, stock purchase plan and common stock warrants Dividends paid Proceeds from initial public offering Payments for purchase of common shares Net cash used...

  • Page 68
    ... in Texas in 1974, is a diversified media company with three principal business segments: radio broadcasting, Americas outdoor advertising and international outdoor advertising. The Company's radio broadcasting segment owns, programs and sells airtime generating revenue from the sale of national and...

  • Page 69
    ... expensed ratably over the related rental term and license and rent payments in arrears are recorded as an accrued liability. Purchase Accounting The Company accounts for its business acquisitions under the purchase method of accounting. The total cost of acquisitions is allocated to the underlying...

  • Page 70
    ... of Reporting Unit Guidance in Paragraph 30 of FASB Statement No. 142. The Company's reporting units for radio broadcasting and Americas outdoor advertising are the reportable segments. The Company determined that each country in its International outdoor segment constitutes a reporting unit and...

  • Page 71
    ...is recognized ratably over the term of the contract. Advertising revenue is reported net of agency commissions. Agency commissions are calculated based on a stated percentage applied to gross billing revenue for the Company's broadcasting and outdoor operations. Payments received in advance of being...

  • Page 72
    ... to direct operating expenses in 2006 and 2005 to conform to current year presentation. The historical financial statements and footnote disclosures have been revised to exclude amounts related to the Company's television business, certain radio stations and Live Nation as discussed below. New...

  • Page 73
    ..., 2006, the Company announced plans to sell 448 non-core radio stations. The merger is not contingent on the sales of these stations, and the sales of these stations are not contingent on the closing of the Company's merger discussed above. Definitive asset purchase agreements were signed for 73 non...

  • Page 74
    ...a failure of a condition to closing the acquisition. On November 29, 2007, the FCC issued its initial consent order approving the assignment of our television station licenses to the buyer. The Company determined that each of these radio station markets and its television business represent disposal...

  • Page 75
    ... December 21, 2005. Included in income from discontinued operations, net is an income tax benefit of $316.7 million for the year ended December 31, 2005. Transactions with Live Nation The Company sells advertising and other services to Live Nation. For the years ended December 31, 2007 and 2006 the...

  • Page 76
    ... its FCC broadcast licenses or billboard permits. The Company tests these indefinite-lived intangible assets for impairment at least annually using a direct method. This direct method assumes that rather than acquiring indefinite-lived intangible assets as a part of a going concern business, the...

  • Page 77
    ... 2007. 2006 Acquisitions The Company acquired radio stations for $16.4 million and a music scheduling company for $44.3 million in cash plus $10.0 million of deferred purchase consideration during 2006. The Company also acquired Interspace Airport Advertising, Americas and international outdoor...

  • Page 78
    ... in Clear Media Limited for $8.9 million. Clear Media is a Chinese outdoor advertising company and as a result of consolidating its operations during the third quarter of 2005, the acquisition resulted in an increase in the Company's cash of $39.7 million. Also, the Company's national representation...

  • Page 79
    ... income" at December 31, 2007 and 2006, respectively. The net unrealized gain (loss) on trading securities of $10.7 million and $20.5 million for the years ended December 31, 2007 and 2006, respectively, is recorded on the statement of operations in "Gain (loss) on marketable securities". Other cost...

  • Page 80
    ... outdoor advertising displays from leased land and to reclaim the site to its original condition upon the termination or non-renewal of a lease. The liability is capitalized as part of the related long-lived assets' carrying value. Due to the high rate of lease renewals over a long period of time...

  • Page 81
    ...principal amount of the 7.65% Senior Notes due 2010 on the terms and conditions set forth in the Offer to Purchase and Consent Solicitation Statement dated December 17, 2007. As of February 13, 2008, the Company had received tenders and consents representing 98% of its outstanding 7.65% Senior Notes...

  • Page 82
    ... fair value purchase accounting adjustment premiums related to the merger with AMFM, the $11.4 million related to fair value adjustments for interest rate swap agreements and the $15.0 million related to original issue discounts. NOTE H - FINANCIAL INSTRUMENTS The Company has entered into...

  • Page 83
    ... years ended December 31, 2007, 2006 and 2005, the Company recognized income of $10.7 million, $20.5 million and $17.5 million, respectively, in "Gain (loss) on marketable securities" related to the change in the fair value of the shares. Foreign Currency Rate Management As a result of the Company...

  • Page 84
    ...'s contracts with municipal bodies or private companies relating to street furniture, billboard, transit and malls generally require the Company to build bus stops, kiosks and other public amenities or advertising structures during the term of the contract. The Company owns these structures and is...

  • Page 85
    ... acquisition agreements include deferred consideration payments based on performance requirements by the seller typically involving the completion of a development or obtaining appropriate permits that enable the Company to construct additional advertising displays. At December 31, 2007, the Company...

  • Page 86
    ...: (In thousands) 2007 2006 Deferred tax liabilities: Intangibles and fixed assets Unrealized gain in marketable securities Foreign Equity in earnings Investments Deferred Income Other Total deferred tax liabilities Deferred tax assets: Accrued expenses Long-term debt Net operating loss/Capital loss...

  • Page 87
    ... were generated by certain acquired companies prior to their acquisition by the Company. The utilization of the net operating loss carryforwards reduced current taxes payable and current tax expense for the year ended December 31, 2007. The Company's effective income tax rate for 2007 was 34.4% as...

  • Page 88
    ...goodwill attributable to prior acquisitions, and $118.7 million as adjustments to current and deferred tax payables and other balance sheet accounts. The IRS is currently auditing the Company's 2005 and 2006 tax years. Substantially all material state, local, and foreign income tax matters have been...

  • Page 89
    ... or one of its affiliates. These options vest over a period of up to five years. All option plans contain antidilutive provisions that permit an adjustment of the number of shares of the Company's common stock represented by each option for any change in capitalization. The Company adopted the fair...

  • Page 90
    ... stock awards, is estimated using a BlackScholes option-pricing model and amortized to expense over the options' vesting periods. (In thousands, except per share data) 2005 Income before discontinued operations: Reported Add: Share-based payments included in reported net income, net of related...

  • Page 91
    ... the Company's stock options outstanding at and stock option activity during the year ended December 31, 2007 ("Price" reflects the weighted average exercise price per share): Weighted Average Remaining Contractual Term Aggregate Intrinsic Value (In thousands, except per share data) Options Price...

  • Page 92
    ... 31, 2007 Subsidiary Share-Based Awards 2,282 1,161 (53) (89) 3,301 $32.64 38.07 34.63 32.47 34.52 The Company's subsidiary, Clear Channel Outdoor Holdings, Inc. ("CCO"), grants options to purchase shares of its Class A common stock to its employees and directors and its affiliates under its...

  • Page 93
    ... during the year ended December 31, 2007 and 2006 was $2.0 million and $1.6 million, respectively. CCO also grants restricted stock awards to employees and directors of CCO and its affiliates. These common shares hold a legend which restricts their transferability for a term of up to five years and...

  • Page 94
    ..., relating to the Company's non-qualified deferred compensation plan. No shares were retired from the Company's shares held in treasury account during the year ended December 31, 2007 and 46.7 million shares were retired from the Company's shares held in treasury account during the year ended...

  • Page 95
    ...employees purchased 144,444 and 222,789 shares at weighted average share prices of $28.56 and $28.79, respectively. Effective January 1, 2007 the Company no longer accepts contributions to this plan as a condition of its Merger Agreement. The Company offers a non-qualified deferred compensation plan...

  • Page 96
    ... businesses. Share-based payments are recorded by each segment in direct operating and selling, general and administrative expenses. Americas Outdoor Advertising International Outdoor Advertising Corporate, merger and gain on disposition of assets - net (In thousands) Radio Broadcasting Other...

  • Page 97
    ...) Radio Broadcasting Americas Outdoor Advertising International Outdoor Advertising Other Corporate and gain on disposition of assets - net Eliminations Consolidated 2006 Revenue Direct operating expenses Selling, general and administrative expenses Depreciation and amortization Corporate...

  • Page 98
    ...: Direct operating expenses Selling, general and administrative expenses Depreciation and amortization Corporate expenses Merger expenses Gain (loss) on disposition of assets - net Operating income Interest expense Gain (loss) on marketable securities Equity in earnings of nonconsolidated affiliates...

  • Page 99
    ... customary closing conditions. The Company also completed the sales of 57 radio stations for total consideration of approximately $74.8 million it had under definitive asset purchase agreements at December 31, 2007. ITEM 9. Changes in and Disagreements with Accountants on Accounting and Financial...

  • Page 100
    ... relating to Clear Channel Communications, Inc. (the "Company"), including its consolidated subsidiaries, is made known to the officers who certify the Company's financial reports and to other members of senior management and the Board of Directors. Based on their evaluation as of December 31, 2007...

  • Page 101
    ... Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Clear Channel Communications, Inc. and subsidiaries as of December 31, 2007 and 2006, and the related consolidated statements of operations, shareholders' equity, and cash flows for each of the three years...

  • Page 102
    ...Chief Accounting Officer Global President and Chief Operating Officer - Clear Channel Outdoor President/Chief Executive Officer - Clear Channel Radio Executive Vice President/Chief Legal Officer and Secretary 1972 1989 1993 1989 1997 2002 2004 The officers named above serve until the next Board of...

  • Page 103
    .... Executive Compensation The information required by this item is incorporated by reference to the information set forth 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 and Related...

  • Page 104
    ...following financial statement schedule for the years ended December 31, 2007, 2006 and 2005 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 105
    ... (In thousands) Balance at Beginning of period Charges to Costs, Expenses and other Write-off of Accounts Receivable Balance at end of Period Description Other Year ended December 31, 2005 Year ended December 31, 2006 Year ended December 31, 2007 $ 45,909 $ 45,581 $ 56,068 $ 34,260 $ 34,627...

  • Page 106
    ... the disposition of primarily broadcast assets. The related valuation allowance was released as a result of the capital loss carryforward utilization. Related to a valuation allowance for the capital loss carryforward recognized during 2005 as a result of the spin-off of Live Nation. During 2006 the...

  • Page 107
    ... Asset Purchase Agreement dated April 20, 2007, between Clear Channel Broadcasting, Inc., ABO Broadcasting Operations, LLC, Ackerley Broadcasting Fresno, LLC, AK Mobile Television, Inc., Bel Meade Broadcasting, Inc., Capstar Radio Operating Company, Capstar TX Limited Partnership, CCB Texas Licenses...

  • Page 108
    ... Senior Indenture 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 Annual Report on Form 10-K for the year ended December 31, 2002). Twelfth Supplemental Indenture dated March 17...

  • Page 109
    ... Statement dated March 24, 1998). The Clear Channel Communications, Inc. 2000 Employee Stock Purchase Plan (incorporated by reference to the exhibits to Clear Channel's Annual Report on Form 10-K for the year ended December 31, 2002). The Clear Channel Communications, Inc. 2001 Stock Incentive Plan...

  • Page 110
    ... to Clear Channel's Current Report on Form 8-K filed May 1, 2007). Statement re: Computation of Per Share Earnings. Statement re: Computation of Ratios. Subsidiaries of the Company. Consent of Ernst & Young LLP. Power of Attorney (included on signature page). Certification of Chief Executive Officer...

  • Page 111
    Exhibit Number Description 31.2 32.1 32.2 Certification of Chief Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. Certification of Chief Executive Officer Pursuant to 18 ...

  • Page 112
    ... Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on February 13, 2008. CLEAR CHANNEL COMMUNICATIONS, INC. By: /S/ Mark P. Mays Mark P. Mays Chief Executive Officer Power of Attorney Each person whose...

  • Page 113
    Name Title Date /S/ Phyllis Riggins Phyllis Riggins /S/ Theodore H. Strauss Theodore H. Strauss /S/ J.C. Watts J. C. Watts /S/ John H. Williams John H. Williams /S/ John B. Zachry John B. Zachry Director February 13, 2008 Director February 13, 2008 Director February 13, 2008 Director ...

  • Page 114
    ..., San Antonio, Texas 78209, and the name of the registered agent at such address is Mark P. Mays. The Corporation may have, in addition to its registered office, offices and places of business at such places, both within and without the State of Texas as the Board of Directors may from time to time...

  • Page 115
    ... notice of the meeting. Section 5. Special Notice of Shareholder Proposals and Director Nominations. (a) Nominations of persons for election to the Board of Directors of the Corporation and the proposal of business to be considered by the shareholders may be made at an annual meeting of shareholders...

  • Page 116
    ... of the Corporation at the principal executive offices of the Corporation not later than the close of business on the tenth (10th) day following the day on which such public announcement is first made by the Corporation. (d) Only such business shall be conducted at a special meeting of shareholders...

  • Page 117
    ... at the direction of the Chief Executive Officer, the President, the Secretary or the officer or person calling the meeting, to each shareholder of record entitled to vote at the meeting. If mailed, such notice shall be deemed to be delivered when deposited in the United States mail addressed to the...

  • Page 118
    ... rights of the shares of any class or classes are limited or denied by statute, by the Articles of Incorporation or by any other certificate creating any class or series of stock. At any meeting of the shareholders, every shareholder having the right to vote shall be entitled to vote in person or by...

  • Page 119
    ... of the State of Texas. The directors shall be elected at the annual meeting of the shareholders, except as hereinafter provided and each director elected shall hold office until his successor shall be elected and shall qualify. Section 3. Change in Number. The number of directors may be increased...

  • Page 120
    ...taken. The Board of Directors shall act on the tendered resignation, taking into account the Nominating and Governance Committee's recommendation, and publicly disclose (by a press release, a filing with the Securities and Exchange Commission or other broadly disseminated means of communication) its...

  • Page 121
    may decrease the size of the Board of Directors pursuant to the provisions of Section 3 of this Article. Section 7. Place of Meeting. The directors of the Corporation may hold their meetings, both regular and special, either within or without the State of Texas. Section 8. Annual Meetings. The first...

  • Page 122
    ... the management of the business and affairs of the Corporation, except where action of the full Board of Directors is required by statute or by the Articles of Incorporation. Section 3. Change in Number. The number of members of the Executive Committee may be increased or decreased from time to time...

  • Page 123
    ... by the Board of Directors by resolution. Section 3. Compensation Committee . The Compensation Committee shall, from time to time, meet to review the various compensation plans, policies and practices of the Corporation, and to report its findings and recommendations to the Board of Directors or the...

  • Page 124
    ... or otherwise delegating specific power and authority to such committee and as limited by law, the Articles of Incorporation and these By-Laws, shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the Corporation, and may...

  • Page 125
    ... Board of Directors may also appoint one or more Assistant Secretaries and Assistant Treasurers and such other officers and assistant officers and agents (none of whom need be a member of the Board, a shareholder of the Corporation or a resident of the State of Texas) as it shall from time to time...

  • Page 126
    ... specified by the Board at the time of election or in an employment contract approved by the Board, each elected officer's term shall end at the first meeting of directors after the next annual meeting of shareholders. Each elected officer of the Corporation shall hold office until his successor...

  • Page 127
    ... general management and control of the day-to-day business operations of the Corporation and shall consult with and report to the Chief Executive Officer. The President shall put into operation the business policies of the Corporation as determined by the Chief Executive Officer and the Board and...

  • Page 128
    ... or as the Board of Directors or the Executive Committee may from time to time determine or as may be assigned to them by any competent superior officer. ARTICLE VIII. STOCK AND TRANSFER OF STOCK Section 1. Certificated and Uncertificated Shares. The shares of the Corporation shall be represented...

  • Page 129
    ... . The Board of Directors, the Executive Committee, the Chief Executive Officer, the President, or such other officer or officers of the Corporation as the Board of Directors may from time to time designate, in its or his discretion may direct a new certificate or certificates representing shares to...

  • Page 130
    ... other conditions for such transfer as shall be provided for under applicable law have been satisfied. Section 6. Foreign Ownership of Shares . Not more than one-fifth of the aggregate number of shares of stock of the Corporation shall at any time be owned of record or voted by or for the account of...

  • Page 131
    ...to the extent authorized from time to time by the Board of Directors, grant rights to indemnification and to the advancement of expenses to any employee or agent of the Corporation and to any person who is or was serving at the request of the Corporation as a director, officer, partner, venturer, 18

  • Page 132
    ...For purposes of this Article IX, (a) references to "fines" shall include any excise taxes assessed on a person with respect to an employee benefit plan, (b) the Corporation shall be deemed to have requested a director or officer of the Corporation to serve as a trustee, employee, agent or similar 19

  • Page 133
    ... her duties to the Corporation also imposes duties on or otherwise involves services by such person to the plan or participants or beneficiaries of the plan, and (c) any action taken or omitted by a such a person with respect to an employee benefit plan in the performance of such person's duties for...

  • Page 134
    ... officer, officers, agent or agents and in such manner as are permitted by these By-Laws and/or as, from time to time, may be prescribed by resolution (whether general or special) of the Board of Directors or the Executive Committee. Section 4. Fiscal Year. The fiscal year of the Corporation shall...

  • Page 135
    ...of its shareholders and Board of Directors and shall keep at its registered office or principal place of business, or at the office of its transfer agent or registrar, a record of its shareholders, giving the names and addresses of all shareholders and the number and class of the shares held by each...

  • Page 136
    .... These By-Laws may be altered, amended or repealed or new By-Laws may be adopted at any meeting of the Board of Directors at which a quorum is present by the affirmative vote of a majority of the directors present at such meeting. Section 2. Amendment by the Shareholders . These By-Laws may...

  • Page 137
    ... share data) 2007 2006 2005 NUMERATOR: Income before discontinued operations Income from discontinued operations, net Net income Effect of dilutive securities: None Numerator for net income per common share - diluted DENOMINATOR: Weighted average common shares Effect of dilutive securities: Stock...

  • Page 138
    ..., except ratio) 2007 2006 Year Ended 2005 2004 2003 Income (loss) before income taxes, equity in earnings of non-consolidated affiliates, extraordinary item and cumulative effect of a change in accounting principle Dividends and other received from nonconsolidated affiliates Total Fixed Charges...

  • Page 139
    ... of Registrant, Clear Channel Communications, Inc. Name State of Incorporation 1567 Media, LLC Ackerley Broadcast Operations, LLC Ackerley Broadcasting of Fresno, LLC Ackerley Ventures, Inc. AK Mobile Television, Inc. AMFM Air Services, Inc. AMFM Broadcasting Licenses, LLC AMFM Broadcasting, Inc...

  • Page 140
    ... KVOS TV, Ltd. Lubbock Tower Company M Street Corp M Street, LLC Oklahoma City Tower Company Outdoor Management Services, Inc. Premiere Radio Networks, Inc. Radio-Active Media, Inc. Shelter Advertising Of America, Inc. Terrestrial RF Licensing, Inc. The New Research Group, Inc. DE TX NV DE NV TX DE...

  • Page 141
    ...Get Outdoors Florida, LLC Media Monitors, LLC Musicpoint International, LLC Interspace Services, Inc. Interspace Airport Advertising International, LLC Sunset Billboards, LLC AMFM.com, Inc. Westchester Radio, LLC Duncan American Radio, LLC Radio Impact, LLC Eller-PW Company, LLC Clear Channel Brazil...

  • Page 142
    ... AS Clear Channel Outdoor Company Canada Clear Channel Outdoor Limited Clear Channel Outdoor Mexico SA de CV Clear Channel Outdoor Mexico, Operaciones SA de CV Clear Channel Outdoor Mexico, Servicios Administrativos, SA de CV Clear Channel Outdoor Mexico, Servicios Corporativos, SA de CV United...

  • Page 143
    ... A/S. Felice Display GmbH Foxmark UK Ltd. France Bus Publicite France Rail Publicite Giganto Holding Cayman Giganto Outdoor SA Grosvenor Advertising Ltd. Hainan Whitehorse Advertising Media Investment Company Ltd. Australia Spain United Kingdom Singapore Switzerland Poland Sweden Brazil Scotland...

  • Page 144
    ... Urbano de Nueva Leon SA de CV Outdoor Advertising BV Outdoor International Holdings BV Outstanding Media I Norge AS Outstanding Media Stockholm AB Overtop Services SRL Paneles Napsa. S.A. Parkin Advertising Ltd. Plakanda Awi AG Plakanda GmbH Plakanda Management AG Plakanda Ofex AG Plakatron AG...

  • Page 145
    ...China) Company Ltd. Radio Computing Services of Australia Pty Ltd. Radio Computing Services (India) Pvt. Ltd. RCS Europe SARL Regentfile Ltd. Rockbox Ltd. SC Q Panel SRL Signways Ltd. Simon Outdoor Ltd. Sirocco International S.A. Sites International Ltd. Taxi Media Holdings Ltd. Taxi Media Ltd. Team...

  • Page 146
    ... statements and schedule of Clear Channel Communications, Inc. and subsidiaries, and the effectiveness of internal control over financial reporting of Clear Channel Communications, Inc., included in this Annual Report (Form 10-K) for the year ended December 31, 2007. /s/ERNST & YOUNG LLP San Antonio...

  • Page 147
    ... Executive Officer of Clear Channel Communications, Inc. certify that: 1. I have reviewed this Annual Report on Form 10-K of Clear Channel Communications, Inc.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary...

  • Page 148
    ... Financial Officer of Clear Channel Communications, Inc. certify that: 1. I have reviewed this Annual Report on Form 10-K of Clear Channel Communications, Inc.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary...

  • Page 149
    ... condition and results of operations of the Issuer. Dated: February 13, 2008 By: /s/ Mark P. MAYS Name: Mark P. Mays Title: Chief Executive Officer A signed original of this written statement required by Section 906 has been provided to the Issuer and will be furnished to the Securities and Exchange...

  • Page 150
    ... the Annual Report on Form 10-K (the "Form 10-K") for the year ended December 31, 2007 of Clear Channel Communications, Inc. (the "Issuer"). The undersigned hereby certifies that the Form 10-K fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act...