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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
For the fiscal year ended December 31, 2011,
or
For the transition period from to .
Commission File Number
001-9645
CLEAR CHANNEL COMMUNICATIONS, INC.
(Exact name of registrant as specified in its charter)
(210) 822-2828
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act: None
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
The registrant meets the conditions set forth in General Instructions I(1)(a) and (b) of Form 10-K as, among other things, all of the
registrant’s equity securities are owned indirectly by CC Media Holdings, Inc., which is a reporting company under the Securities
Exchange Act of 1934 and which has filed with the SEC all materials required to be filed pursuant to Section 13, 14 or 15(d) thereof,
and the registrant is therefore filing this Form 10-K with a reduced disclosure format.
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every
Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or
for such shorter period that the registrant was required to submit and post such files). 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
re
p
ortin
g
com
p
an
y
. See the definitions of “lar
g
e accelerated filer,” “accelerated filer” and “smaller re
p
ortin
g
com
p
an
y
” in Rule 12b-2
Annual report pursuant to Section 13 or 15(d) of the Securities Exchange 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
74-1787539
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer Identification No.)
200 East Basse Road
San Antonio, Texas
78209
(Address of principal executive offices) (Zip Code)

Table of contents

  • Page 1
    ... period from to . Commission File Number 001-9645 CLEAR CHANNEL COMMUNICATIONS, INC. (Exact name of registrant as specified in its charter) Texas (State or other jurisdiction of incorporation or organization) 74-1787539 (I.R.S. Employer Identification No.) 200 East Basse Road San Antonio, Texas...

  • Page 2
    ...-accelerated filer ⌧ Accelerated filer Smaller reporting company NO Indicate by check mark whether the registrant is a shell company (as defined in Exchange Act Rule 12b-2). YES The registrant has no voting or nonvoting equity held by non-affiliates. On February 10, 2012, there were 500,000,000...

  • Page 3
    CLEAR CHANNEL COMMUNICATIONS, INC. INDEX TO FORM 10-K Page Number PART I. Item 1. Business 1 15 23 23 24 25 Item 1A. Risk Factors Item 1B. Unresolved Staff Comments Item 2. Item 3. Item 4. PART II. Item 5. Item 6. Item 7. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer...

  • Page 4
    ...outdoor advertising segments, as well as Katz Media and other support services and initiatives. We are a leading global media and entertainment company specializing in radio, digital, out-of-home, mobile and ondemand entertainment and information services for national audiences and local communities...

  • Page 5
    ... for our listeners. We deliver music, news, talk, sports, traffic and other content using an array of distribution technologies, including: broadcast radio and HD radio channels; satellite radio; online applications via iHeartRadio and our stations' hundreds of websites; mobile via smart phones...

  • Page 6
    ...To date, our iHeartRadio mobile application has been downloaded more than 48 million times. iHeartRadio provides a unique digital music experience by offering access to more than 800 live broadcast and digital-only radio stations, plus user-created custom stations with broad social media integration...

  • Page 7
    .... Total Traffic Network Our traffic business, Total Traffic Network, delivers real-time traffic data to vehicles via in-car and portable navigation systems, broadcast media, wireless and Internet-based services to thousands of radio and television stations across America. Our goal is to save time...

  • Page 8
    ...the 20 largest markets. Our Americas outdoor assets consist of billboards, street furniture and transit displays, airport displays, mall displays, and wallscapes and other spectaculars, which we own or operate under lease management agreements. Our Americas outdoor advertising business is focused on...

  • Page 9
    Year Ended December 31, 2011 2010 2009 Billboards: Bulletins Posters Street furniture displays Transit displays Other displays (1) Total (1) Includes spectaculars, mall displays and wallscapes. Our Americas outdoor segment generates revenues from local, regional and national sales. Our advertising ...

  • Page 10
    Street Furniture Displays Our street furniture displays include advertising surfaces on bus shelters, information kiosks, freestanding units and other public structures, are available in both traditional and digital formats, and are primarily located in major metropolitan areas and along major ...

  • Page 11
    ...of out-of-home communication solutions internationally. Through our new international digital brand, Clear Channel Play, we are able to offer networks of digital displays in multiple formats and multiple environments including bus shelters, airports, transit, malls and flagship locations. We seek to...

  • Page 12
    ...allows local management to operate their markets as separate profit centers, encouraging customer cultivation and service. Street Furniture Displays Our International street furniture displays, available in traditional and digital formats, are substantially similar to their Americas street furniture...

  • Page 13
    ...and digital multicast stations. Katz Media generates revenue primarily through contractual commissions realized from the sale of national spot and online advertising. National spot advertising is commercial airtime sold to advertisers on behalf of radio and television stations. Katz Media represents...

  • Page 14
    ... one or more radio stations in a market and programs more than 15% of the broadcast time, or sells more than 15% per week of the advertising time, on a radio station in the same market is generally deemed to have an attributable interest in that station. Debt instruments, non-voting corporate stock...

  • Page 15
    ..., obtained consent decrees requiring radio station divestitures. The current FCC ownership rules relevant to our business are summarized below. • Local Radio Ownership Rule. The maximum allowable number of radio stations that may be commonly owned in a market is based on the size of the market...

  • Page 16
    ...receive deliveries of their sound recordings for use in our Internet operations. The rates at which we pay royalties to copyright owners are privately negotiated or set pursuant to a regulatory process. There is no guarantee that the licenses and associated royalty rates that currently are available...

  • Page 17
    ... significant new programming and operational requirements designed to increase local community-responsive programming, and enhance public interest reporting requirements. Regulation of our Americas and International Outdoor Advertising Businesses The outdoor advertising industry in the United States...

  • Page 18
    ... to calculate the fair value of our licenses, billboard permits and reporting units, it is possible a material change could occur. If actual market conditions and operational performance for the respective reporting units underlying the intangible assets were to deteriorate, or if facts and...

  • Page 19
    ...direct mail, iPods, smart mobile phones, satellite radio and Internet-based media, within their respective markets. Audience ratings and market shares are subject to change, which could have the effect of reducing our revenues in that market. Our competitors may develop services or advertising media...

  • Page 20
    ... the new technologies and media platforms used by us, compete with our radio stations for audience share and advertising revenues. We are unable to predict the effect that such technologies and related services and products will have on our broadcasting operations, but the capital expenditures...

  • Page 21
    ... outdoor advertising on Federal-Aid Primary, Interstate and National Highway Systems' roads in the United States. The HBA regulates the size and location of billboards, mandates a state compliance program, requires the development of state standards, promotes the expeditious removal of illegal signs...

  • Page 22
    ...in our direct revenues from such advertisements and an increase in the available space on the existing inventory of billboards in the outdoor advertising industry. Environmental, health, safety and land use laws and regulations may limit or restrict some of our operations As the owner or operator of...

  • Page 23
    ...The FCC's media ownership rules remain subject to ongoing agency and court proceedings. Future changes could restrict our ability to acquire new radio assets or businesses. Significant equity investors control us and may have conflicts of interest with us in the future Private equity funds sponsored...

  • Page 24
    ... capital, capital expenditures, debt service requirements, acquisitions and general corporate or other purposes; limiting our ability to adjust to changing economic, business and competitive conditions; requiring us to defer planned capital expenditures, reduce discretionary spending, sell assets...

  • Page 25
    ..., including competition; the level of expenditures on advertising; legislative or regulatory requirements; fluctuations in operating costs; technological changes and innovations; changes in labor conditions, including on-air talent, program hosts and management; capital expenditure requirements; 22

  • Page 26
    ...office building and an approximately 123,000 square foot data and administrative service center. In addition, certain of our executive and other operations are located in New York, New York. CCME Our CCME executive operations are located in our corporate headquarters in San Antonio, Texas and in New...

  • Page 27
    ...: Los Angeles, Boston, New York City, Chicago and Denver. Discovery has closed, and dispositive motions have been filed. In the Master Separation and Distribution Agreement between us and Live Nation that was entered into in connection with the spin-off of Live Nation in December 2005, Live Nation...

  • Page 28
    On August 8, 2011, Brazil's National Council of Fiscal Policy (CONFAZ) published a rule authorizing a general amnesty to sixteen states, including the State of São Paulo, to reduce the principal amount of VAT allegedly owed for communications services and reduce or waive related interest and ...

  • Page 29
    ... equity interests of Clear Channel Capital II, LLC are owned by CCMH. All equity interests in CCMH are owned, directly or indirectly, by the Sponsors and their co-investors, public investors and certain employees of CCMH and its subsidiaries, including certain executive officers and directors...

  • Page 30
    ... financial statements and related footnotes included in Item 6 and Item 8 of Part II of this Annual Report on Form 10-K are those of Clear Channel Capital I, LLC ("Clear Channel Capital I"), the direct parent of Clear Channel Communications, Inc., a Texas corporation ("Clear Channel" or "Subsidiary...

  • Page 31
    ...affected advertising revenues across our businesses. Our impairment charges are discussed more fully in Item 8 of Part II of this Annual Report on Form 10-K. (3) Includes the results of operations of our television business, which we sold on March 14, 2008, and certain of our non-core radio stations...

  • Page 32
    ... via the Internet, mobile and other digital platforms which reach national, regional and local audiences and derive revenues primarily from selling advertising time with advertising contracts similar to those used by our radio stations. CCME management monitors average advertising rates, which are...

  • Page 33
    ... one to 20 years. Americas Outdoor Advertising Our advertising rates are based on a number of different factors including location, competition, size of display, illumination, market and gross ratings points. Gross ratings points are the total number of impressions delivered by a display or group of...

  • Page 34
    ... digital. International outdoor revenue increased $48.1 million during 2010 compared to 2009, primarily as a result of increased revenue from street furniture across most countries, partially offset by a decrease from movements in foreign exchange of $10.3 million. Our subsidiary, Clear Channel...

  • Page 35
    ... due to our Traffic acquisition and higher advertising revenues from our digital radio services primarily as a result of improved rates and increased volume. Americas outdoor revenue increased $46.6 million, driven by increases in revenue across bulletin, airport and shelter displays, particularly...

  • Page 36
    ...on October 1, 2011 and 2010 on our goodwill, FCC licenses, billboard permits, and other intangible assets and recorded impairment charges of $7.6 million and $15.4 million, respectively. Please see Note 2 to the consolidated financial statements included in Item 8 of Part II of this Annual Report on...

  • Page 37
    ... due to our Traffic acquisition. We experienced increases in our digital radio services revenue as a result of improved rates, increased volume and revenues related to our iHeartRadio Music Festival. Offsetting the increases were slight declines in local and national advertising across various...

  • Page 38
    ... deployment of digital billboards. International Outdoor Advertising Results of Operations Our International outdoor operating results were as follows: (In thousands) Revenue Direct operating expenses SG&A expenses Depreciation and amortization Operating income Years Ended December 31, 2011 2010...

  • Page 39
    ... in revenue. Direct operating expenses in our International outdoor segment decreased $45.6 million, primarily as a result of a $20.4 million decline in expenses incurred in connection with our restructuring program in addition to decreased site lease expenses associated with cost savings from...

  • Page 40
    ... of $50.8 million for 2009 primarily related to a $42.0 million loss on the sale and exchange of radio stations and a $20.9 million loss on the sale of our taxi advertising business. The losses were partially offset by a $10.1 million gain on the sale of Americas and International outdoor assets. 37

  • Page 41
    ... of nonconsolidated affiliates for 2009 included a $22.9 million impairment of equity investments in our International outdoor segment in addition to a $4.0 million loss on the sale of a portion of our investment in Grupo ACIR Communicaciones ("Grupo ACIR"). Other Income - Net Other income of $46...

  • Page 42
    ... the acquired intangible assets. Americas Outdoor Advertising Results of Operations Disposition of Taxi Business On December 31, 2009, our subsidiary, Clear Channel Outdoor, Inc. ("CCOI"), disposed of Clear Channel Taxi Media, LLC ("Taxis"), our taxi advertising business. For the year ended December...

  • Page 43
    ...thousands) CCME Americas outdoor advertising International outdoor advertising Other Impairment charges Other operating income (expense) - net Corporate expenses (1) Consolidated operating income (loss) 1 2011 $ 888,358 281,611 111,626 9,427 (7,614) 12,682 (241,366) $1,054,724 Years Ended December...

  • Page 44
    ... table indicates non-cash compensation costs related to share-based payments for the years ended December 31, 2011, 2010 and 2009, respectively: (In thousands) CCME Americas outdoor advertising International outdoor advertising Corporate 1 Total share-based compensation expense Years Ended December...

  • Page 45
    ... Traffic acquisition and the cloud-based music technology business we purchased during 2011. In addition, we received proceeds of $54.3 million primarily related to the sale of radio stations, a tower and other assets in our CCME, Americas outdoor, and International outdoor segments. 2010 Cash used...

  • Page 46
    ... debt maturities totaling $275.6 million and $420.5 million in 2012 and 2013, respectively. Our ability to fund our working capital needs, debt service and other obligations, and to comply with the financial covenant under our financing agreements depends on our future operating performance and cash...

  • Page 47
    ... B Facility Term Loan C - Asset Sale Facility Revolving Credit Facility(1) Delayed Draw Term Loan Facilities Receivables Based Facility(2) Priority Guarantee Notes Other Secured Subsidiary Debt Total Secured Debt Senior Cash Pay Notes Senior Toggle Notes Clear Channel Senior Notes Subsidiary Senior...

  • Page 48
    ... loan C - asset sale facility and delayed draw term loan facilities, (i) 2.65%, in the case of base rate loans and (ii) 3.65%, in the case of Eurocurrency rate loans. The margin percentages are subject to adjustment based upon our leverage ratio. We are required to pay each revolving credit lender...

  • Page 49
    ... facility and term loans with the proceeds of the February 2011 Offering discussed elsewhere in this MD&A as follows: (In millions) Year 2012 2013 2014 2015 2016 Total Tranche A Term Loan Amortization* - $ 88.5 $ 998.6 - - $ 1,087.1 Tranche B Term Loan Amortization 8,735.9 $ 8,735.9 Tranche C Term...

  • Page 50
    ...; sell assets; pay dividends and distributions or repurchase our capital stock; make investments, loans, or advances; prepay certain junior indebtedness; engage in certain transactions with affiliates; amend material agreements governing certain junior indebtedness; and change our lines of business...

  • Page 51
    ...; and (vii) merge, consolidate or sell substantially all of our assets. The indenture contains covenants that limit Clear Channel Capital I, LLC's and our ability and the ability of our restricted subsidiaries to, among other things: (i) create liens on assets and (ii) materially impair the value...

  • Page 52
    ... all of the senior cash pay notes and senior toggle notes at any time on or after August 1, 2012 at the redemption prices set forth in the indenture governing such notes. If we undergo a change of control, sell certain of our assets, or issue certain debt, we may be required to offer to purchase the...

  • Page 53
    ... require CCWH to maintain at least $100 million in cash or other liquid assets or have cash available to be borrowed under committed credit facilities consisting of (i) $50.0 million at the issuer and guarantor entities (principally the Americas outdoor segment) and (ii) $50.0 million at the non...

  • Page 54
    ... us from the issuance of such new debt are used to pay down senior secured credit facility indebtedness. In June 2011, we issued an additional $750.0 million in aggregate principal amount of 9.0% Priority Guarantee Notes due 2021 (the "Additional Notes") at an issue price of 93.845% of the principal...

  • Page 55
    ... in "Other operating income (expense) - net." We sold our taxi advertising business and recorded a loss of $20.9 million in our Americas outdoor segment included in "Other operating income (expense) -net." We also received proceeds of $18.3 million from the sale of corporate assets during 2009 and...

  • Page 56
    Uses of Capital Debt Repurchases, Maturities and Other Between 2009 and 2011, our indirect wholly-owned subsidiaries, CC Investments, CC Finco and Clear Channel Acquisition, LLC ("CC Acquisition"), repurchased certain of our outstanding senior notes, senior cash pay and senior toggle notes through ...

  • Page 57
    ... International outdoor segment acquired an additional 5% interest in our consolidated subsidiary, Clear Channel Jolly Pubblicita SPA, for $12.1 million. Certain Relationships with the Sponsors and Management We are party to a management agreement with certain affiliates of Bain Capital Partners, LLC...

  • Page 58
    ..., we reimbursed Pilot Group Manager, LLC $40,000 per month for the use of its office space in Rockefeller Plaza in New York City. Commitments, Contingencies and Guarantees We are currently involved in certain legal proceedings arising in the ordinary course of business and, as required, have accrued...

  • Page 59
    ... interest rate swap agreement. SEASONALITY Typically, our CCME, Americas outdoor and International outdoor segments experience their lowest financial performance in the first quarter of the calendar year, with International outdoor historically experiencing a loss from operations in that period. Our...

  • Page 60
    ... income or in two separate but consecutive statements. The changes apply for interim and annual financial statements and should be applied retrospectively, effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. Early adoption is permitted. We currently...

  • Page 61
    ... obtains indefinite-lived intangible assets and builds a new operation with similar attributes from scratch. Thus, the buyer incurs start-up costs during the build-up phase which are normally associated with going concern value. Initial capital costs are deducted from the discounted cash flows...

  • Page 62
    ...lived intangible assets that would result from a 100 basis point decline in our discrete and terminal period revenue growth rate and profit margin assumptions and a 100 basis point increase in our discount rate assumption: (In thousands) Description FCC licenses Billboard permits Revenue growth rate...

  • Page 63
    ... changes in the business' cost structure and/or margin trends; comparisons of current and prior year operating performance and forecast trends for future operating performance; changes in management, business strategy or customer base during the current year; sustained decreases in share price...

  • Page 64
    ... costs over the retirement period is based on an estimated risk-adjusted credit rate for the same period. If our assumption of the risk-adjusted credit rate used to discount current year additions to the asset retirement obligation decreased approximately 1%, our liability as of December 31, 2011...

  • Page 65
    .... The independent registered public accounting firm has 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. /s/ Robert W. Pittman Chief Executive Officer /s/Thomas W. Casey...

  • Page 66
    ... sheets of Clear Channel Capital I, LLC (Clear Channel Capital I) as of December 31, 2011 and 2010, the related consolidated statements of comprehensive loss, changes in member's deficit, and cash flows of Clear Channel Capital I for each of the three years in the period ended December 31, 2011...

  • Page 67
    ...SHEETS OF CLEAR CHANNEL CAPITAL I, LLC (In thousands) As of December 31, 2011 2010 CURRENT ASSETS Cash and cash equivalents Accounts receivable, net of allowance of $63,098 in 2011 and $74,660 in 2010 Prepaid expenses Other current assets Total Current Assets PROPERTY, PLANT AND EQUIPMENT Structures...

  • Page 68
    CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS OF CLEAR CHANNEL CAPITAL I, LLC (In thousands) Revenue Operating expenses: Direct operating expenses (excludes depreciation and amortization) Selling, general and administrative expenses (excludes depreciation and amortization) Corporate expenses (...

  • Page 69
    ... STATEMENTS OF CHANGES IN MEMBER'S DEFICIT (In thousands) Non-controlling Interest $ 426,220 (14,950) 12,104 11,486 20,788 455,648 16,236 792 12,046 (2,659) 8,857 490,920 34,065 735 10,705 (14,428) (4,527) 4,324 521,794 Controlling Interest Accumulated Other Comprehensive Member's Retained Income...

  • Page 70
    ...) in accounts receivable Decrease in Federal income taxes receivable Increase (decrease) in accrued expenses Increase (decrease) in accounts payable and other liabilities Increase (decrease) in accrued interest Increase (decrease) in deferred income Changes in other operating assets and liabilities...

  • Page 71
    ... "SEC"), the financial statements and related footnotes included in Item 8 of Part II of this Annual Report on Form 10-K are those of Clear Channel Capital I, LLC (the "Company" or the "Parent Company"), the direct parent of Clear Channel Communications, Inc., a Texas corporation ("Clear Channel" or...

  • Page 72
    ...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 - 5 to 40 years Towers, transmitters and studio equipment - 7 to 20 years Furniture and...

  • Page 73
    CLEAR CHANNEL CAPITAL I, LLC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) Land Leases and Other Structure Licenses Most of the Company's outdoor advertising structures are located on leased land. Americas outdoor land leases are typically paid in advance for periods ...

  • Page 74
    ... have quoted market prices. The Company periodically assesses the value of available-for-sale and non-marketable securities and records impairment charges in the statement of operations for any decline in value that is determined to be other-than-temporary. The average cost method is used to compute...

  • Page 75
    .... 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 earned are recorded as deferred income. Barter...

  • Page 76
    CLEAR CHANNEL CAPITAL I, LLC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) Foreign Currency Results of operations for foreign subsidiaries and foreign equity investees are translated into U.S. dollars using the average exchange rates during the year. The assets and ...

  • Page 77
    CLEAR CHANNEL CAPITAL I, LLC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) NOTE 2 - PROPERTY, PLANT AND EQUIPMENT, INTANGIBLE ASSETS AND GOODWILL Acquisitions On April 29, 2011, a wholly owned subsidiary of the Company purchased the traffic business of Westwood One, Inc. ...

  • Page 78
    CLEAR CHANNEL CAPITAL I, LLC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) Indefinite-lived Intangible Assets and Goodwill The Company's indefinite-lived intangible assets consist of FCC broadcast licenses and billboard permits. FCC broadcast licenses are granted to radio ...

  • Page 79
    ... Canada, which totaled $345.4 million. Annual Impairment Test to Goodwill The Company performs its annual impairment test on October 1 of each year. Each of the Company's U.S. radio markets and outdoor advertising markets are components. The U.S. radio markets are aggregated into a single reporting...

  • Page 80
    ... from the reporting unit, discounted to their present value using a risk-adjusted discount rate. Terminal values were also estimated and discounted to their present value. Assessing the recoverability of goodwill requires the Company to make estimates and assumptions about sales, operating margins...

  • Page 81
    .... The Company forecasted revenue, expenses, and cash flows over a ten-year period for each of its reporting units. The revenue forecasts for 2009 declined 8%, 7% and 9% for CCME, Americas outdoor and International outdoor, respectively, compared to the forecasts used in the 2008 impairment test...

  • Page 82
    ... cost 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, the calculation assumes that all related assets will be removed at some period over the next 50 years. An estimate of third-party cost information is used...

  • Page 83
    ... of Clear Channel or its subsidiaries or CCMH's outstanding equity securities or outstanding equity securities of CCOH, in tender offers, open market purchases, privately negotiated transactions or otherwise. The Company or its subsidiaries may also sell certain assets or properties and use the...

  • Page 84
    CLEAR CHANNEL CAPITAL I, LLC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) obligations or on the Company's consolidated results of operations. These transactions could also require or result in amendments to the agreements governing outstanding debt obligations or changes ...

  • Page 85
    CLEAR CHANNEL CAPITAL I, LLC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) Prepayments The senior secured credit facilities require Clear Channel...February 2011 Offering discussed elsewhere in this Note 5, as follows: (In millions) Year 2012 2013 2014 2015 2016 Total Tranche ...

  • Page 86
    ...subsidiaries to, among other things: incur additional indebtedness; create liens on assets; engage in mergers, consolidations, liquidations and dissolutions; sell assets; pay dividends and distributions or repurchase Clear Channel's capital stock; make investments, loans, or advances; prepay certain...

  • Page 87
    ... percentage applicable to the receivables based credit facility is (i) 1.40%, in the case of base rate loans and (ii) 2.40% in the case of Eurocurrency rate loans subject to adjustment if Clear Channel's leverage ratio of total debt to EBITDA decreases below 7 to 1. Clear Channel is required to pay...

  • Page 88
    ... may redeem some or all of the senior cash pay notes and senior toggle notes at any time on or after August 1, 2012 at the redemption prices set forth in the indenture governing such notes. If Clear Channel undergoes a change of control, sells certain its assets, or issues certain debt, it may be...

  • Page 89
    CLEAR CHANNEL CAPITAL I, LLC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) On July 16, 2010, Clear Channel made the election to pay interest on the senior toggle notes entirely in cash, effective for the interest period commencing August 1, 2010. Assuming the cash interest ...

  • Page 90
    ... be used to pay dividends from CCOI to CCOH. In turn, CCOH could declare a dividend to its shareholders, of which Clear Channel would receive its proportionate share. Payment of such dividends would not be prohibited by the terms of the subsidiary senior notes or any of the loan agreements or credit...

  • Page 91
    ... from the issuance of such new debt are used to pay down senior secured credit facility indebtedness. In June 2011, Clear Channel issued an additional $750.0 million in aggregate principal amount of its 9.0% Priority Guarantee Notes due 2021 (the "Additional Notes") at an issue price of 93.845% of...

  • Page 92
    ... under its receivables based credit facility on June 8, 2011, using cash on hand. This voluntary repayment did not reduce Clear Channel's commitments under this facility and Clear Channel may reborrow amounts under this facility at any time. In addition, on June 27, 2011, Clear Channel made...

  • Page 93
    ... CHANNEL CAPITAL I, LLC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) (In thousands) 2012 2013 2014 2015 2016 Thereafter Total (1) $ 275,649 420,495 2,809,772 253,535 12,236,000 4,726,054 $20,721,505 (1) Excludes purchase accounting adjustments and original issue discount...

  • Page 94
    ... land occupied by its outdoor advertising structures under long-term operating leases. The Company accounts for these leases in accordance with the policies described above. The Company's contracts with municipal bodies or private companies relating to street furniture, billboards, transit and malls...

  • Page 95
    CLEAR CHANNEL CAPITAL I, LLC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) In addition, the Company has commitments relating to required purchases of property, plant and equipment under certain street furniture contracts. Certain of the Company's contracts contain penalties...

  • Page 96
    ... a major international bank. Most of these credit lines related to intraday overdraft facilities covering participants in Clear Channel's European cash management pool. As of December 31, 2011, no amounts were outstanding under these agreements. As of December 31, 2011, Clear Channel had outstanding...

  • Page 97
    CLEAR CHANNEL CAPITAL I, LLC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) NOTE 9 - INCOME TAXES Significant components of the provision for income tax benefit (expense) are as follows: (In thousands) Current - Federal Current - foreign Current - state Total current ...

  • Page 98
    CLEAR CHANNEL CAPITAL I, LLC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) Significant components of the Company's deferred tax liabilities and assets as of December 31, 2011and 2010 are as follows: (In thousands) Deferred tax liabilities: Intangibles and fixed assets Long-...

  • Page 99
    CLEAR CHANNEL CAPITAL I, LLC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) The reconciliation of income tax computed at the U.S. Federal statutory tax rates to income tax benefit (expense) is: (In thousands) Income tax benefit (expense) at statutory rates State income taxes...

  • Page 100
    ... STATEMENTS (CONTINUED) The Company and its subsidiaries file income tax returns in the United States Federal jurisdiction and various state and foreign jurisdictions. During 2011, the Company reached a settlement with the Internal Revenue Service ("IRS") related to the examination of the tax years...

  • Page 101
    CLEAR CHANNEL CAPITAL I, LLC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) the options granted represents the period of time that the options granted are expected to be outstanding. The Company used historical data to estimate option exercises and employee terminations ...

  • Page 102
    CLEAR CHANNEL CAPITAL I, LLC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) CCMH has granted restricted stock awards to its employees and affiliates under its equity incentive plan. These common shares are restricted in transferability for a term of up to five years and are ...

  • Page 103
    CLEAR CHANNEL CAPITAL I, LLC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) The following table presents a summary of CCOH's stock options outstanding at and stock option activity during the year ended December 31, 2011("Price" reflects the weighted average exercise price ...

  • Page 104
    CLEAR CHANNEL CAPITAL I, LLC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) The following table presents a summary of CCOH's restricted stock and restricted stock units outstanding at and activity during the year ended December 31, 2011 ("Price" reflects the weighted average...

  • Page 105
    ... the Company will match a portion of such an employee's contribution. Employees vest in these Clear Channel matching contributions based upon their years of service to Clear Channel. Contributions of $27.8 million, $29.8 million and $23.0 million to these plans for the years ended December 31, 2011...

  • Page 106
    ... media and entertainment services via broadcast and digital delivery and also includes the Company's national syndication business. The Americas outdoor advertising segment consists of operations primarily in the United States, Canada and Latin America, with approximately 89% of its 2011 revenue...

  • Page 107
    CLEAR CHANNEL CAPITAL I, LLC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) The following table presents the Company's operating segment results for the years ended December 31, 2011, 2010 and 2009. (In thousands) CCME Year Ended December 31, 2011 Revenue Direct operating ...

  • Page 108
    CLEAR CHANNEL CAPITAL I, LLC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) Revenue of $1.8 billion, $1.7 billion and $1.6 billion derived from the Company's foreign operations are included in the data above for the years ended December 31, 2011, 2010 and 2009, respectively....

  • Page 109
    ...the employment agreement for the Company's new Chief Executive Officer, the Company agreed to provide the Chief Executive Officer an aircraft for his personal and business use during the term of his employment. Subsequently, a subsidiary of the Company entered into a six-year aircraft lease with Yet...

  • Page 110
    ... to December 31, 2011, Clear Channel is in the process of negotiating a sublease with Pilot Group Manager, LLC, an entity that the Company's Chief Executive Officer is a member of and an investor in, to rent space in Rockefeller Plaza in New York City through July 29, 2014. Fixed rent is expected...

  • Page 111
    ... licenses Indefinite-lived intangibles - permits Goodwill Intercompany notes receivable Long-term intercompany receivable Investment in subsidiaries Other assets Total Assets Accounts payable Accrued expenses Accrued interest Intercompany payable (1) Current portion of long-term debt Deferred income...

  • Page 112
    ... licenses Indefinite-lived intangibles - permits Goodwill Intercompany notes receivable Long-term intercompany receivable Investment in subsidiaries Other assets Total Assets Accounts payable Accrued expenses Accrued interest Intercompany payable (1) Current portion of long-term debt Deferred income...

  • Page 113
    CLEAR CHANNEL CAPITAL I, LLC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) (In thousands) Revenue Operating expenses: Direct operating expenses Selling, general and administrative expenses Corporate expenses Depreciation and amortization Impairment charges Other operating ...

  • Page 114
    ... (loss) Less amount attributable to noncontrolling interest Comprehensive income (loss) attributable to the Company 5,518 (225,304) - (28,257) (218,397) - (38,702) 490,714 (4,594) - 130,811 8,918 61,441 (472,227) - - (294,403) 4,324 $(225,304) $ (218,...

  • Page 115
    CLEAR CHANNEL CAPITAL I, LLC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) (In thousands) Revenue Operating expenses: Direct operating expenses Selling, general and administrative expenses Corporate expenses Depreciation and amortization Impairment charges Other operating ...

  • Page 116
    CLEAR CHANNEL CAPITAL I, LLC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) (In thousands) Revenue Operating expenses: Direct operating expenses Selling, general and administrative expenses Corporate expenses Depreciation and amortization Merger expenses Impairment charges ...

  • Page 117
    ...in accounts receivable Decrease in accrued expenses Increase (decrease) in accounts payable and other liabilities Increase in accrued interest Decrease in deferred income Changes in other operating assets and liabilities, net of effects of acquisitions and dispositions Net cash provided by (used for...

  • Page 118
    ... Repurchases of long-term debt Change in other - net Net cash provided by (used for) financing activities Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period $ - - (306) 8,212 - - - $ (46,697) - - 835...

  • Page 119
    ... Changes in other operating assets and liabilities, net of effects of acquisitions and dispositions Net cash provided by (used for) operating activities Cash flows from investing activities: Investment in Clear Channel notes Parent Company Subsidiary Issuer Year Ended December 31, 2010 Guarantor Non...

  • Page 120
    Proceeds from maturity of Clear Channel notes Proceeds from sales of other investments Purchases of property, plant and equipment Proceeds from disposal of assets Purchases of other operating assets Change in other - net Net cash provided by (used for) investing activities Cash flows from financing ...

  • Page 121
    CLEAR CHANNEL CAPITAL I, LLC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) Parent Company Cash flows from operating activities: Consolidated net income (loss) $(4,377,056) Reconciling items: Impairment charges - Depreciation and amortization - Deferred taxes 1,008 Provision...

  • Page 122
    ... notes receivable - net Investment in subsidiaries Investment in Clear Channel notes Proceeds from maturity of Clear Channel notes Proceeds from sales of other investments Purchases of property, plant and equipment Proceeds from disposal of assets Purchases of other operating assets Change in...

  • Page 123
    114

  • Page 124
    ...registered public accounting firm that audited the consolidated financial statements of the Company included in this Annual Report on Form 10-K, has issued an attestation report on the effectiveness of the Company's internal control over financial reporting as of December 31, 2011. The report, which...

  • Page 125
    ... statements of comprehensive loss, changes in member's deficit, and cash flows of Clear Channel Capital I for each of the three years in the period ended December 31, 2011 and our report dated February 21, 2012 expressed an unqualified opinion thereon. /s/ Ernst & Young LLP San Antonio, Texas...

  • Page 126
    ITEM 9B. OTHER INFORMATION Not Applicable 117

  • Page 127
    ... are for assurance related services not reported under annual audit fees that reasonably relate to the performance of the audit or review of our financial statements, including due diligence related to mergers and acquisitions, internal control reviews and attest services not required by statute or...

  • Page 128
    ...following financial statement schedule for the years ended December 31, 2011, 2010 and 2009 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 129
    ... $ 74,660 Charges to Costs, Expenses and other $ 52,498 $ 23,023 $ 13,723 Write-off of Accounts Receivable $ $ $ 77,850 20,731 27,345 Balance at End of Period $ 71,650 $ 74,660 $ 63,098 Description Year ended December 31, 2009 Year ended December 31, 2010 Year ended December 31, 2011 Other $ (362...

  • Page 130
    ... the uncertainty of the ability to utilize those assets in future periods. (2) During 2009 the Company utilized capital loss carryforwards to offset the capital gains generated in continuing operations from the disposition of primarily broadcast assets and certain investments. The related valuation...

  • Page 131
    ... 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 132
    ... the CC Media Holdings, Inc. Annual Report on Form 10-K for the year ended December 31, 2009). Supplemental Indenture, dated July 30, 2008, by and among Clear Channel Capital I, LLC, certain subsidiaries of Clear Channel Communications, Inc. party thereto and Law Debenture Trust Company of New York...

  • Page 133
    ... 10.11 to the CC Media Holdings, Inc. Current Report on Form 8-K filed July 30, 2008). Amendment and Restatement Agreement, dated as of February 15, 2011, to the Credit Agreement, dated as of May 13, 2008, among Clear Channel Communications, Inc., Clear Channel Capital I, LLC, the subsidiary co...

  • Page 134
    ... to the Clear Channel Communications, Inc. Annual Report on Form 10-K for the year ended December 31, 2009). Affiliate Transactions Agreement, dated as of July 30, 2008, by and among CC Media Holdings, Inc., Bain Capital Fund IX, L.P., Thomas H. Lee Equity Fund VI, L.P. and BT Triple Crown Merger Co...

  • Page 135
    ... Channel Employee Equity Investment Program (Incorporated by reference to Exhibit 10.24 to the CC Media Holdings, Inc. Current Report on Form 8-K filed July 30, 2008). CC Media Holdings, Inc. 2008 Annual Incentive Plan (Incorporated by reference to Exhibit 10.32 to the Clear Channel Communications...

  • Page 136
    ... Inc. and Clear Channel Communications, Inc. Indemnification Agreement (Incorporated by reference to Exhibit 10.26 to the CC Media Holdings, Inc. Current Report on Form 8-K filed July 30, 2008). Form of Clear Channel Outdoor Holdings, Inc. Independent Director Indemnification Agreement (Incorporated...

  • Page 137
    ...General Release, dated January 20, 2012, between Ronald Cooper and Clear Channel Outdoor Holdings, Inc. (Incorporated by reference to Exhibit 10.53 to the CC Media Holdings, Inc. Annual Report on Form 10-K for the year ended December 31, 2011). Employment Agreement, dated as of July 19, 2010, by and...

  • Page 138
    ...34 to the Clear Channel Outdoor Holdings, Inc. Annual Report on Form 10-K for the year ended December 31, 2010). Form of Amended and Restated Stock Option Agreement under the CCOH Stock Incentive Plan, dated as of August 11, 2011, between C. William Eccleshare and Clear Channel Outdoor Holdings, Inc...

  • Page 139
    ... Securities 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 21, 2012. CLEAR CHANNEL COMMUNICATIONS, INC. By: /s/ ROBERT W. PITTMAN Robert W. Pittman Chief Executive Officer Power of Attorney Each...

  • Page 140
    Name Title Date /s/ David C. Abrams David...Director Director Director Director Director Director Director Director Director Director 131 February 21, 2012 February 21, 2012 February 21, 2012 February 21, 2012 February 21, 2012 February 21, 2012 February 21, 2012 February 21, 2012 February 21, 2012...

  • Page 141
    ... SARBANES-OXLEY ACT OF 2002 I, Robert W. Pittman, 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 to make...

  • Page 142
    ...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 to make the statements made, in light of the circumstances...

  • Page 143
    ...-Oxley Act of 2002 and accompanies the Annual Report on Form 10-K (the "Form 10-K") for the year ended December 31, 2011 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...

  • Page 144
    ...-Oxley Act of 2002 and accompanies the Annual Report on Form 10-K (the "Form 10-K") for the year ended December 31, 2011 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...