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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
[X] Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the fiscal year ended December 31, 2012, or
[ ] Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period from ________ to _________.
Commission File Number 001-9645
CLEAR CHANNEL COMMUNICATIONS, INC.
(Exact name of registrant as specified in its charter)
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)
(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 [X]
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 [X] 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 [X]
Pursuant to the terms of its bond indentures, the registrant is a voluntary filer of reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934, and has filed all such reports as required by its bond indentures during the preceding 12 months.
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 [X] NO [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to
the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X]
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 the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. Large
accelerated filer [ ] Accelerated filer [ ] Non-accelerated filer [X] Smaller reporting company [ ]
Indicate by check mark whether the registrant is a shell company (as defined in Exchange Act Rule 12b-2). YES [ ] NO [X]
The registrant has no voting or nonvoting equity held by non-affiliates.
On January 31, 2013, there were 500,000,000 outstanding shares of common stock.
DOCUMENTS INCORPORATED BY REFERENCE

Table of contents

  • Page 1
    ... ended December 31, 2012, or Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from _____ to _____. Commission File Number 001-9645 CLEAR CHANNEL COMMUNICATIONS, INC. (Exact name of registrant as specified in its charter) Texas (State...

  • Page 2
    None.

  • Page 3
    CLEAR CHANNEL COMMUNICATIONS, INC. INDEX TO FORM 10-K Page Number PART I Item 1. Item 1A. Item 1B. Item 2. Item 3. Item 4. PART II Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities ...25 Selected Financial Data...26 Management's ...

  • Page 4
    ... Exchange Commission ("SEC"), the 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...

  • Page 5
    ... well as sharing best practices across our stations in marketing, distribution, sales and cost management. Promote Local and National Advertising. We intend to grow our CCME businesses by continuing to develop effective programming, creating new solutions for our advertisers and agencies, fostering...

  • Page 6
    ... the years ended December 31, 2012, 2011 and 2010, respectively. The primary source of revenue in our CCME segment is the sale of commercials on our radio stations for local and national advertising. Our iHeartRadio mobile application and website, our station websites and Total Traffic Network also...

  • Page 7
    ...than 100 markets in the United States, Canada and Mexico. It operates the largest broadcast traffic navigation network in North America and has expanded its offerings to include news, weather and sports content. Competition Our broadcast radio stations, as well as our mobile and digital applications...

  • Page 8
    ... own or operate under lease management agreements. Our Americas outdoor advertising business is focused on metropolitan areas with dense populations. Strategy We seek to capitalize on our Americas outdoor network and diversified product mix to maximize revenue. In addition, by sharing best practices...

  • Page 9
    Year Ended December 31, 2012 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 and national sales. Our advertising rates are based on a ...

  • Page 10
    ... embellishments to create special effects. The majority of our spectaculars are located in Times Square in New York City, the Gardiner Expressway in Toronto, and the Fashion Show Mall and Miracle Mile Shops in Las Vegas. Client contracts for spectaculars typically have terms of one year or longer...

  • Page 11
    ... other out-of-home advertising displays. The following table shows the approximate percentage of revenue derived from each inventory category of our International outdoor segment: Year Ended December 31, 2012 Street furniture displays Billboards Other Total (2) (1) 2011 43% 28% 9% 20% 100% 2010 42...

  • Page 12
    ... 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 counterparts, and include bus shelters, freestanding units...

  • Page 13
    ... general support services and initiatives which are ancillary to our other businesses. Katz Media, a leading media representation firm in the U.S. for radio and television stations, sells national spot advertising time for clients in the radio and television industries throughout the United States...

  • Page 14
    ... over 15% of the licensee station's total weekly programming, or has an attributable broadcast or newspaper interest in the same market (the "EDP Rule"). An entity that owns one or more radio stations in a market and programs more than 15% of the broadcast time, or sells more than 15% per week...

  • Page 15
    ... negotiate and obtain direct licenses with each individual copyright owner as long as we operate in compliance with the rules of statutory licenses and pay the applicable royalty rates to SoundExchange, the non-profit organization designated by the Copyright Royalty Board to collect and distribute...

  • Page 16
    ... posted on our websites. We collect personally identifiable information directly from listeners when they register to use our services, fill out their listener profiles, post comments, use our social networking features, participate in polls and contests and sign up to receive email newsletters. We...

  • Page 17
    ... regulates outdoor advertising on Federal-Aid Primary, Interstate and National Highway Systems roads within the United States ("controlled roads"). The HBA regulates the size and placement of billboards, requires the development of state standards, mandates a state's compliance program, promotes the...

  • Page 18
    ... businesses compete for audiences and advertising revenues with other media and entertainment businesses and outdoor advertising businesses, as well as with other media, such as newspapers, magazines, television, direct mail, portable digital audio players, mobile devices, satellite radio, Internet...

  • Page 19
    ... technologies and alternative media platforms, including those 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. The capital...

  • Page 20
    ... our broadcast radio station websites and our iHeartRadio digital platform collect personal information as users register for our services, fill out their listener profiles, post comments, use our social networking features, participate in polls and contests and sign-up to receive email newsletters...

  • Page 21
    ...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 22
    ...have limited or no experience; we may encounter difficulties in the integration of operations and systems; and our management's attention may be diverted from other business concerns. ï,· ï,· ï,· Additional acquisitions by us of media and entertainment businesses and outdoor advertising businesses...

  • Page 23
    additional media and entertainment businesses or outdoor advertising businesses in any market where we already have a significant position. Further, radio acquisitions by us are subject to FCC approval. Such acquisitions must comply with the Communications Act and FCC regulatory requirements and ...

  • 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
    ... otherwise extend credit to others; incur indebtedness or issue shares or guarantees; create liens; enter into transactions with affiliates; sell, lease, transfer or dispose of assets; merge or consolidate with other companies; and make a substantial change to the general nature of our business. In...

  • Page 26
    ...requirements; fluctuations in operating costs; technological changes and innovations; changes in labor conditions, including on-air talent, program hosts and management; capital expenditure requirements; risks of doing business in foreign countries; fluctuations in exchange rates and currency values...

  • Page 27
    ...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 York, New York. The types of properties required to support each of our radio stations include offices, studios, transmitter...

  • Page 28
    ... on January 24, 2013, the Court granted that motion, extending the stay for thirty days from the date of the order. Los Angeles Litigation In 2008, Summit Media, LLC, one of our competitors, sued the City of Los Angeles, Clear Channel Outdoor, Inc. and CBS Outdoor in Los Angeles Superior Court (Case...

  • 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
    ... the SEC, the 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...

  • Page 31
    28

  • Page 32
    ...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. (2) 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 33
    ... 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 34
    ... period of time. For all of our billboards in the United States, we use independent, third-party auditing companies to verify the number of impressions delivered by a display. Client contract terms typically range from four weeks to one year for the majority of our display inventory in the United...

  • Page 35
    ... listening hours increasing by 100%. ï,· Americas outdoor revenue for 2012 increased $26.5 million compared to 2011 due to continued deployment of digital bulletins. During 2012, we deployed 178 digital displays in the United States bringing the total number of digital bulletins in the United States...

  • Page 36
    ... (the "traffic acquisition") to our existing traffic business, Total Traffic Network. We also purchased a cloud-based music technology business in the first quarter of 2011 that has enabled us to accelerate the development and growth of our iHeartRadio digital products. ï,· Americas outdoor revenue...

  • Page 37
    ... hours and rates and personnel costs. In addition, an increase of $29.6 million related to our traffic acquisition was partially offset by a decline in music license fees of $23.2 million. Americas outdoor direct operating expenses increased $14.9 million, primarily due to increased 34 $ Years Ended...

  • Page 38
    .... In addition, movements in foreign exchange contributed a decrease of $9.3 million during 2012. Impairment Charges We performed our annual impairment tests as of October 1, 2012 and 2011 on our goodwill, FCC licenses, billboard permits, and other intangible assets and recorded impairment charges of...

  • Page 39
    ... recorded during 2012 related to the write-off of deferred tax assets associated with the vesting of certain equity awards. The effective tax rate for the year ended December 31, 2011 was 32.0% as compared to 25.7% for the year ended December 31, 2010. The effective tax rate for 2011 was favorably...

  • Page 40
    ... programming sales. Direct operating expenses increased $23.9 million during 2012 compared to 2011, primarily due to an increase in digital expenses related to our iHeartRadio digital platform including higher digital streaming fees due to increased listening hours and rates and personnel costs...

  • Page 41
    ... 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, 2012 1,667...

  • Page 42
    ... digital displays and increased rates. International outdoor revenue increased $170.1 million, primarily from increased street furniture revenue across our markets and an $84.5 million increase from the impact of movements in foreign exchange. Consolidated Direct Operating Expenses Direct operating...

  • Page 43
    ... to our traffic acquisition also contributed to the increase. In addition, the impact of movements in foreign exchange contributed an increase of $7.4 million during 2011. Impairment Charges We performed our annual impairment tests on October 1, 2011 and 2010 on our goodwill, FCC licenses, billboard...

  • Page 44
    ... $117.3 million during 2011 compared to 2010, primarily driven by a $107.1 million increase due to our traffic acquisition. We experienced increases in our digital services revenue as a result of improved rates, increased listening hours through our iHeartRadio platform and revenues related to our...

  • Page 45
    ... 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 1,751...

  • Page 46
    ... performance condition will be satisfied. The following table presents amounts related to share-based compensation expense for the years ended December 31, 2012, 2011 and 2010, respectively: (In thousands) 2012 CCME Americas outdoor advertising International outdoor advertising Corporate (1) Total...

  • Page 47
    ... stock options granted under the Clear Channel 2008 Executive Incentive Plan for 1.3 million replacement stock options with a lower exercise price and different service and performance conditions. We accounted for the exchange program as a modification of the existing awards under ASC 718 and will...

  • Page 48
    ... 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 49
    ... flows are used to service debt. At December 31, 2012, we had $1.2 billion of cash on our balance sheet, with $562.0 million held by our subsidiary, CCOH, and its subsidiaries. We have debt maturities totaling $381.7 million and $1.3 billion in 2013 and 2014, respectively. Based on our current and...

  • Page 50
    ... C - Asset Sale Facility Revolving Credit Facility (1) Delayed Draw Term Loan Facilities Receivables Based Facility (2) Priority Guarantee Notes due 2019 Priority Guarantee Notes due 2021 Other Secured Subsidiary Debt Total Secured Debt Senior Cash Pay Notes Senior Toggle Notes Clear Channel Senior...

  • Page 51
    ..., in tender offers, open market purchases, privately negotiated transactions or otherwise. We may also sell certain assets or properties and use the proceeds to reduce our indebtedness. These purchases or sales, if any, could have a material positive or negative impact on our liquidity available to...

  • Page 52
    ... 500.5 513.7 (In millions) Year 2013 2014 2015 2016 2017 Total $ $ *Balance of Tranche A Term Loan is due July 30, 2014 **Balance of Tranche B Term Loan and Tranche C Term Loan are due January 29, 2016 Collateral and Guarantees The senior secured credit facilities are guaranteed by us and each...

  • Page 53
    ... ratio under this financial covenant is currently set at 9.5:1 and reduces to 9.25:1, 9:1 and 8.75:1 for the quarters ended June 30, 2013, December 31, 2013 and December 31, 2014, respectively. At December 31, 2012, our ratio was 5.9:1. In addition, the senior secured credit facilities include...

  • Page 54
    ... 24, 2012. The receivables based credit facility provides revolving credit commitments of $535.0 million, subject to a borrowing base. The borrowing base at any time equals 90% of our and certain of our subsidiaries' eligible accounts receivable. The receivables based credit facility includes...

  • Page 55
    ... or sell assets; (v) engage in certain transactions with affiliates; (vi) create restrictions on dividends or other payments by the restricted subsidiaries; and (vii) merge, consolidate or sell substantially all of our assets. The indenture contains covenants that limit Clear Channel Capital I, 52

  • Page 56
    ... and senior toggle notes at any time 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 senior cash pay notes and senior toggle notes from holders...

  • Page 57
    ... CCWH Senior Notes are guaranteed by CCOH, Clear Channel Outdoor, Inc. ("CCOI") and certain of CCOH's direct and indirect subsidiaries. The proceeds from the issuance of the CCWH Senior Notes were used to fund the repurchase of the Existing CCWH Senior Notes. We capitalized $30.0 million in fees and...

  • Page 58
    ... or consolidate with another person, or sell or otherwise dispose of all or substantially all of its assets; sell certain assets, including capital stock of its subsidiaries; designate its subsidiaries as unrestricted subsidiaries; and pay dividends, redeem or repurchase capital stock or make other...

  • Page 59
    ..., in whole or in part, on or after March 15, 2015, at the redemption prices set forth in the applicable indenture governing the CCWH Subordinated Notes plus accrued and unpaid interest to the redemption date. At any time on or before March 15, 2015, CCWH may elect to redeem up to 40% of the then...

  • Page 60
    ...CCOH, which in turn distributed the CCOH Dividend on March 15, 2012 in an amount equal to $6.0832 per share to its Class A and Class B stockholders of record at the close of business on March 12, 2012, including Clear Channel Holdings, Inc. ("CC Holdings") and CC Finco, our wholly-owned subsidiaries...

  • Page 61
    ... During 2012, our International outdoor segment sold its international neon business and its outdoor advertising business in Romania, resulting in an aggregate gain of $39.7 million included in "Other operating income (expense) - net." During 2011, we divested and exchanged 27 radio stations for...

  • Page 62
    ...with the trustee sufficient funds to pay the redemption price, plus accrued and unpaid interest on the remaining outstanding Existing CCWH Senior Notes to, but not including, the December 19, 2012 redemption date. During October 2012, we consummated a private exchange offer of $2.0 billion aggregate...

  • Page 63
    ... available cash on hand. Capital Expenditures Capital expenditures for the years ended December 31, 2012, 2011 and 2010 were as follows: (In millions) CCME Americas outdoor advertising International outdoor advertising Corporate and Other Total capital expenditures $ Years Ended December 31, 2011...

  • Page 64
    ..., bus shelters and terminals. The majority of these contracts contain rent provisions that are calculated as the greater of a percentage of the relevant advertising revenue or a specified guaranteed minimum annual payment. Also, we have noncancelable contracts in our radio broadcasting operations...

  • Page 65
    ...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 International outdoor segment typically experiences its strongest performance in...

  • Page 66
    ... these higher costs by increasing the effective advertising rates of most of our broadcasting stations and outdoor display faces. NEW ACCOUNTING PRONOUNCEMENTS In December 2011, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2011-11, Disclosures...

  • Page 67
    ... of operations. However, for our annual impairment test as of October 1, 2012, we elected to perform a quantitative assessment and applied the two-step impairment test. CRITICAL ACCOUNTING ESTIMATES The preparation of our financial statements in conformity with U.S. GAAP requires management to...

  • Page 68
    ...-lived intangible assets. Our key assumptions using the direct valuation 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 riskadjusted discount rate...

  • Page 69
    ... of our reporting units, we used the following assumptions: ï,§ Expected cash flows underlying our business plans for the periods 2013 through 2017. Our cash flow assumptions are based on detailed, multi-year forecasts performed by each of our operating segments, and reflect the advertising outlook...

  • Page 70
    ... 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, 2012...

  • Page 71
    ... 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 72
    ... balance sheets of Clear Channel Capital I, LLC and subsidiaries (the Company) as of December 31, 2012 and 2011, and the related consolidated statements of comprehensive loss, changes in member's deficit and cash flows for each of the three years in the period ended December 31, 2012. Our...

  • Page 73
    CONSOLIDATED BALANCE SHEETS OF CLEAR CHANNEL CAPITAL I, LLC AND SUBSIDIARIES (In thousands) CURRENT ASSETS Cash and cash equivalents $ Accounts receivable, net of allowance of $55,917 in 2012 and $63,098 in 2011 Prepaid expenses Other current assets Total Current Assets PROPERTY, PLANT AND EQUIPMENT...

  • Page 74
    ... LOSS OF CLEARCHANNEL CAPITAL I, LLC AND SUBSIDIARIES (In thousands) Years Ended December 31, 2012 2011 2010 Revenue $ 6,246,884 $ 6,161,352 $ 5,865,685 Operating expenses: Direct operating expenses (excludes depreciation and amortization) 2,496,550 2,504,036 2,381,647 Selling, general and...

  • Page 75
    ...STATEMENTS OF CHANGES IN MEMBER'S DEFICIT OF CLEAR CHANNEL CAPITAL I, LLC (In thousands, except share data) Noncontrolling Interest Balances at December 31, 2009 $ 455,648 Net income (loss) 16,236 Shares...759 $ 2,135,842 $ (10,281,746) $ (153,284) Total $ (6,844,738) (462,853) 5,000 (1,116) 34,246 ...

  • Page 76
    CONSOLIDATED STATEMENTS OF CASH FLOWS OF CLEAR CHANNEL CAPITAL I, LLC AND SUBSIDIARIES (In thousands) 2012 Cash flows from operating activities: Consolidated net loss Reconciling items: Impairment charges Depreciation and amortization Deferred taxes Provision for doubtful accounts Amortization of ...

  • Page 77
    ... and Exchange Commission (the "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...

  • Page 78
    CLEAR CHANNEL CAPITAL I, LLC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS merger that resulted in the Company's acquisition of Clear Channel. The Company is the beneficial owner of the trust, but the radio stations are managed by an independent trustee. The Company will have to divest...

  • Page 79
    ... and street furniture contracts, talent and representation contracts, customer and advertiser relationships, and site-leases, all of which are amortized over the respective lives of the agreements, or over the period of time the assets are expected to contribute directly or indirectly to the Company...

  • Page 80
    CLEAR CHANNEL CAPITAL I, LLC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Other Investments Other investments are composed primarily of equity securities. These securities are classified as available-for-sale or trading and are carried at fair value based on quoted market prices. ...

  • Page 81
    ... to the merger, Clear Channel granted equity awards to its employees under its own equity incentive plans. 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 82
    CLEAR CHANNEL CAPITAL I, LLC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012. Early adoption is permitted. The Company did not early adopt the provisions of this ASU during 2012 in ...

  • Page 83
    ... and street furniture contracts, talent and representation contracts, customer and advertiser relationships, and site-leases, all of which are amortized over the respective lives of the agreements, or over the period of time the assets are expected to contribute directly or indirectly to the Company...

  • Page 84
    ...-lived intangible assets: (In thousands) 2013 2014 2015 2016 2017 $ 283,942 264,221 239,211 223,293 196,681 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...

  • Page 85
    ... reporting unit goodwill with the carrying amount of that goodwill. For the year ended December 31, 2011, the Company recognized a non-cash impairment charge to goodwill of $1.1 million due to a decline in the fair value of one country within the Company's International outdoor segment. For the year...

  • Page 86
    ... 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 87
    CLEAR CHANNEL CAPITAL I, LLC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 5 - LONG-TERM DEBT Long-term debt at December 31, 2012 and 2011 consisted of the following: (In thousands) Senior Secured Credit Facilities: Term Loan A Facility Due 2014 Term Loan B Facility Due 2016 Term ...

  • Page 88
    ... 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 89
    ..., other than customary "breakage" costs with respect to Eurocurrency rate loans. Amendments During the fourth quarter of 2012, Clear Channel amended the terms of its senior secured credit facilities (the "Amendments"). The Amendments, among other things: (i) permit exchange offers of term loans for...

  • Page 90
    ... 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...

  • Page 91
    CLEAR CHANNEL CAPITAL I, LLC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS applicable margin for borrowings under the receivables based credit facility is 1.75% with respect to Eurocurrency borrowings and 0.75% with respect to base-rate borrowings. The applicable margin for borrowings ...

  • Page 92
    CLEAR CHANNEL CAPITAL I, LLC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS prepay certain junior indebtedness; engage in certain transactions with affiliates; amend material agreements governing certain junior indebtedness; and change lines of business. The receivables based credit ...

  • Page 93
    ... or all of the senior cash pay notes and senior toggle notes at any time 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 required to offer to purchase the senior cash...

  • Page 94
    CLEAR CHANNEL CAPITAL I, LLC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Channel will be contractually obligated to make a payment to bondholders of $57.4 million on August 1, 2013. Clear Channel Senior Notes As of December 31, 2012, Clear Channel's senior notes represented ...

  • Page 95
    CLEAR CHANNEL CAPITAL I, LLC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS In addition, the indenture governing the Series A CCWH Senior Notes provides that if CCWH (i) makes an optional redemption of the Series B CCWH Senior Notes or purchases or makes an offer to purchase the Series ...

  • Page 96
    CLEAR CHANNEL CAPITAL I, LLC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS At any time prior to March 15, 2015, CCWH may redeem the CCWH Subordinated Notes, in whole or in part, at a price equal to 100% of the principal amount of the CCWH Subordinated Notes plus a "make-whole" premium,...

  • Page 97
    ...to pay senior notes at maturity on March 15, 2011 and May 15, 2011) and used the remaining $203.8 million to repay at maturity a portion of Clear Channel's 5% senior notes that matured in March 2012. The Company capitalized an additional $7.1 million in fees and expenses associated with the offering...

  • Page 98
    ... sufficient funds to pay the redemption price, plus accrued and unpaid interest on the remaining outstanding Existing CCWH Senior Notes to, but not including, the December 19, 2012 redemption date. During October 2012, Clear Channel consummated a private exchange offer of $2.0 billion aggregate...

  • Page 99
    ...$ Years Ended December 31, 2011 $ $ 2010 185,185 104 (60,289) 125,000 $ - $ 80,000 (20,476) (4,274) $ - $ 55,250 $ - (1) Represents unamortized fair value purchase accounting discounts recorded as a result of the merger. (2) CC Investments and CC Finco repurchased certain of Clear Channel...

  • Page 100
    ... on a cost investment for the year ended December 31, 2012, which was a non-cash impairment charge recorded in "Loss on marketable securities." The Company's available-for-sale security, Independent News & Media PLC ("INM"), was in an unrealized loss position for an extended period of time. As...

  • Page 101
    ... into account the present value of the future cash flows under the terms of the agreements by using market information available as of the reporting date, including prevailing interest rates and credit spread. Due to the fact that the inputs are either directly or indirectly observable, the Company...

  • Page 102
    CLEAR CHANNEL CAPITAL I, LLC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS involving the completion of a development or obtaining appropriate permits that enable the Company to construct additional advertising displays. At December 31, 2012, the Company believes its maximum aggregate ...

  • Page 103
    ...that motion, extending the stay for thirty days from the date of the order. Los Angeles Litigation In 2008, Summit Media, LLC, one of the Company's competitors, sued the City of Los Angeles, Clear Channel Outdoor, Inc. and CBS Outdoor in Los Angeles Superior Court (Case No. BS116611) challenging the...

  • Page 104
    CLEAR CHANNEL CAPITAL I, LLC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 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 benefit (expense) ...

  • Page 105
    CLEAR CHANNEL CAPITAL I, LLC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Significant components of the Company's deferred tax liabilities and assets as of December 31, 2012 and 2011 are as follows: (In thousands) Deferred tax liabilities: Intangibles and fixed assets Long-term debt ...

  • Page 106
    CLEAR CHANNEL CAPITAL I, LLC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The reconciliation of income tax computed at the U.S. Federal statutory tax rates to income tax benefit is: Years Ended December 31, 2011 Amount Percent $ 137,903 18,877 (4,683) (3,154) (15,816) (7,149) 125,978...

  • Page 107
    ... limiting the Company's ability to pay dividends. Share-Based Compensation Stock Options The Company does not have any compensation plans under which it grants stock awards to employees. Prior to the merger, Clear Channel granted options to purchase its common stock to its employees and directors...

  • Page 108
    CLEAR CHANNEL CAPITAL I, LLC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CCMH has granted options to purchase its shares of Class A common stock to certain key executives under its equity incentive plan at no less than the fair value of the underlying stock on the date of grant. ...

  • Page 109
    CLEAR CHANNEL CAPITAL I, LLC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS A summary of CCMH's unvested options and changes during the year ended December 31, 2012 is presented below: (In thousands, except per share data) Weighted Average Grant Date Fair Value $ 7.10 2.68 7.74 3.38 3....

  • Page 110
    ... of awards. The risk free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for periods equal to the expected life of the option. The following assumptions were used to calculate the fair value of CCOH's options on the date of grant: Years Ended December 31, 2012...

  • Page 111
    CLEAR CHANNEL CAPITAL I, LLC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS A summary of CCOH's unvested options at and changes during the year ended December 31, 2012 is presented below: (In thousands, except per share data) Weighted Average Grant Date Fair Value $ 6.41 4.43 5.48 5.80...

  • Page 112
    ... stock option exchange program on November 19, 2012 and exchanged 2.0 million stock options granted under the Clear Channel 2008 Executive Incentive Plan for 1.8 million replacement restricted share awards with different service and performance conditions. CCMH accounted for the exchange program as...

  • Page 113
    CLEAR CHANNEL CAPITAL I, LLC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 12 - OTHER INFORMATION The following table discloses the components of "Other income (expense)" for the years ended December 31, 2012, 2011 and 2010, respectively: (In thousands) 2012 Foreign exchange loss ...

  • Page 114
    ...segment provides 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 and Canada. The International outdoor advertising segment...

  • Page 115
    ... and amortization Impairment charges Corporate expenses Other operating income - net Operating income (loss) $ Intersegment revenues $ Segment assets $ Capital expenditures $ Share-based compensation expense $ Year Ended December 31, 2011 Revenue $ Direct operating expenses Selling, general and...

  • Page 116
    CLEAR CHANNEL CAPITAL I, LLC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Revenue of $1.7 billion, $1.8 billion and $1.7 billion derived from the Company's foreign operations are included in the data above for the years ended December 31, 2012, 2011 and 2010, respectively. Revenue of ...

  • Page 117
    ...the years ended December 31, 2012, 2011 and 2010, the Company recognized management fees and reimbursable expenses of $15.9 million, $15.7 million and $17.1 million, respectively. Stock Purchases On August 9, 2010, Clear Channel announced that its board of directors approved a stock purchase program...

  • Page 118
    ...(d): (In thousands) Parent Company Cash and cash equivalents Accounts receivable, net of allowance Intercompany receivables (1) Prepaid expenses Other current assets Total Current Assets Property, plant and equipment, net Indefinite-lived intangibles - licenses Indefinite-lived intangibles - permits...

  • Page 119
    CLEAR CHANNEL CAPITAL I, LLC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (In thousands) Parent Company Cash and cash equivalents Accounts receivable, net of allowance Intercompany receivables (1) Prepaid expenses Other current assets Total Current Assets Property, plant and equipment...

  • Page 120
    CLEAR CHANNEL CAPITAL I, LLC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (In thousands) Parent Company Revenue Operating expenses: Direct operating expenses Selling, general and administrative expenses Corporate expenses Depreciation and amortization Impairment charge Other operating...

  • Page 121
    CLEAR CHANNEL CAPITAL I, LLC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (In thousands) Parent Company Revenue Operating expenses: Direct operating expenses Selling, general and administrative expenses Corporate expenses Depreciation and amortization Impairment charges Other ...

  • Page 122
    CLEAR CHANNEL CAPITAL I, LLC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (In thousands) Parent Company Revenue Operating expenses: Direct operating expenses Selling, general and administrative expenses Corporate expenses Depreciation and amortization Impairment charges Other ...

  • Page 123
    CLEAR CHANNEL CAPITAL I, LLC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (In thousands) Parent Company Cash flows from operating activities: Consolidated net income (loss) Reconciling items: Impairment charges Depreciation and amortization Deferred taxes Provision for doubtful ...

  • Page 124
    CLEAR CHANNEL CAPITAL I, LLC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (In thousands) Parent Company Cash flows from operating activities: Consolidated net income (loss) Reconciling items: Impairment charges Depreciation and amortization Deferred taxes Provision for doubtful ...

  • Page 125
    CLEAR CHANNEL CAPITAL I, LLC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (In thousands) Parent Company Cash flows from operating activities: Consolidated net income (loss) Reconciling items: Impairment charges Depreciation and amortization Deferred taxes Provision for doubtful ...

  • Page 126
    ...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, 2012. The report, which...

  • Page 127
    ...of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of the Company as of December 31, 2012 and 2011, and the related consolidated statements of comprehensive loss, changes in member's deficit and cash flows for each of the three years in the period ended...

  • Page 128
    ITEM 9B. OTHER INFORMATION Not Applicable 125

  • Page 129
    PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE Intentionally omitted in accordance with General Instruction I(2)(c) ...Form 10-K. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS Intentionally omitted in accordance with ...

  • Page 130
    ... ACCOUNTING FEES AND SERVICES Fees are incurred by CCMH for both the CCMH and Clear Channel audit services and are not allocated between the two companies. The following fees for services provided by Ernst & Young LLP were incurred by CCMH with respect to the years ended December 31, 2012 and 2011...

  • Page 131
    ...financial statement schedule for the years ended December 31, 2012, 2011 and 2010 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 schedules...

  • Page 132
    ... Year ended December 31, 2010 Year ended December 31, 2011 Year ended December 31, 2012 Write-off of Accounts Receivable 20,731 27,345 14,082 $ $ $ Other (1) 718 2,060 $ $ Balance at End of Period 74,660 63,098 55,917 (4,814) $ (1) Primarily foreign currency adjustments and acquisition...

  • Page 133
    SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS Deferred Tax Asset Valuation Allowance (In thousands) Balance at Beginning Description Year ended December 31, 2010 Year ended December 31, 2011 Year ended December 31, 2012 $ $ $ of Period 3,854 17,434 14,177 $ $ $ Charges to Costs, Expenses and other ...

  • Page 134
    ... by reference to Exhibit 3.2 to the Clear Channel Communications, Inc. Annual Report on Form 10-K for the year ending December 31, 2007). 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...

  • Page 135
    ... 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 136
    ... 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-borrowers and foreign subsidiary borrowers named therein, Citibank, N.A., as Administrative Agent, the lenders from time to time party thereto and...

  • Page 137
    ... Communications, Inc. Annual Report on Form 10-K for the year ended December 31, 2009). Amendment No. 1, dated as of July 9, 2008, to the Credit Agreement, dated as of May 13, 2008, by and among Clear Channel Communications, Inc., the subsidiary borrowers party thereto, Clear Channel Capital I, LLC...

  • Page 138
    ... to Exhibit 10.2 to the Clear Channel Communications, Inc. Annual Report on Form 10-K for the year ended December 31, 2009). Side Letter Agreement, dated as of July 29, 2008, among CC Media Holdings, Inc., Clear Channel Capital IV, LLC, Clear Channel Capital V, L.P., L. Lowry Mays, Mark P. Mays...

  • Page 139
    ... the CC Media Holdings, Inc. Annual Report on Form 10-K for the year ended December 31, 2011). Form of Restricted Stock Award Agreement under the CCOH Stock Incentive Plan (Incorporated by reference to Exhibit 10.3 to the Clear Channel Outdoor Holdings, Inc. Registration Statement on Form S-8 (File...

  • Page 140
    ... 10.16 to the Clear Channel Outdoor Holdings, Inc. Annual Report on Form 10-K for the year ended December 31, 2010). Clear Channel Outdoor Holdings, Inc. 2012 Stock Incentive Plan (Incorporated by reference to Exhibit 99.1 to the Clear Channel Outdoor Holdings, Inc. Registration Statement on Form...

  • Page 141
    ...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). Form of Amendment to Senior Executive Option Agreement under the CC Executive Incentive Plan, dated as of October 14, 2008...

  • Page 142
    ... Agreement under the CC Executive Incentive Plan, dated as of December 31, 2010, between John Hogan and CC Media Holdings, Inc. (Incorporated by reference to Exhibit 10.43 to the Clear Channel Communications, Inc. Annual Report on Form 10-K for the year ended December 31, 2010). Form of Executive...

  • Page 143
    ..., Inc. Annual Report on Form 10-K for the year ended December 31, 2010). Form of Restricted Stock Unit Agreement under the CCOH Stock Incentive Plan, dated March 26, 2012, between Robert H. Walls, Jr. and Clear Channel Outdoor Holdings, Inc. (Incorporated by reference to Exhibit 10.3 to the CC Media...

  • Page 144
    ...Exchange Act of 1934. In accordance with Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement... Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections. A management contract or compensatory plan ...

  • Page 145
    ... Exchange Act of 1934, this report has been signed by the following persons on behalf of the Registrant and in the capacities and on the dates indicated. Name Title Date /s/ Robert W. Pittman Robert W. Pittman Chief Executive Officer (Principal Executive Officer) and Director February 19, 2013...

  • Page 146
    Name Title Date /s/ Irving L. Azoff Irving L. Azoff Director February 19, 2013 /s/ Richard J. Bressler Richard J. Bressler Director February 19, 2013 /s/ Charles A. Brizius Charles A. Brizius Director February 19, 2013 /s/ John P. Connaughton John P. Connaughton Director February 19, ...

  • Page 147
    ... 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 the statements made, in light of the...

  • Page 148
    ... W. Casey, 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...

  • Page 149
    ... 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 the Securities Exchange Act...

  • Page 150
    ... 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 the Securities Exchange Act...