UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
AMENDMENT OF THE ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1995
Commission file number 1-9645
CLEAR CHANNEL COMMUNICATIONS, INC.
(Exact name of registrant as specified in its charter)
Texas 74-1787539
(State of Incorporation) (I.R.S. Employer Identification No.)
200 Concord Plaza, Suite 600
San Antonio, Texas 78216
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code:(210) 822-2828
___________________________________________
Securities Registered Pursuant to Section 12(b) of the Act:
Title of each class Name of Exchange on which registered
Common Stock $.10 par value New York Stock Exchange
Securities Registered Pursuant to Section 12(g) of the Act:
None
___________________________________________
Indicate by check mark whether the registrant (1) has
filed all reports required to be filed by Section 13 or 15(d) of
the Securities Exchange Act of 1934 during the preceding 12
months (or for shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes __X___ No ____
___________________________________________
Indicate by check mark if disclosure of delinquent
filers pursuant to Item 405 of Regulation S-K (229.405 of this
chapter) 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/A or any amendment to this Form 10-K/A.
Yes ____ No
___________________________________________
As of March 1, 1995, 34,592,019 shares of Clear Channel
Communications, Inc. Common Stock were outstanding including
13,439 held in treasury, and the aggregate market value (based
upon the last reported sale price on the New York Stock Exchange
on February 29, 1996) of the shares of Common Stock held by non-
affiliates was approximately $1,042,190,000. (For purposes of
calculating the preceding amount only, all directors and officers
of the registrant are assumed to be affiliates.)
___________________________________________
PART IV
ITEM 14. Exhibits, Financial Statement Schedules and Reports on
Form 8-K
(a)1 Financial Statements. The following consolidated financial
statements and report of independent auditors are incorporated by
reference to the Registrant's Annual Report on pages 19 through
33:
Report of Independent Auditors
Consolidated Balance Sheets as of December 31,1995 and 1994.
Consolidated Statements of Earnings for the Years Ended
December 31, 1995, 1994 and 1993.
Consolidated Statements of Changes in Shareholders' Equity
for the Years Ended December 31, 1995, 1994 and 1993.
Consolidated Statements of Cash Flows for the Years Ended
December 31, 1995, 1994 and 1993.
Notes to Consolidated Financial Statements
(a)2 Financial Statement Schedules. The following financial
statement schedules for the years ended December 31, 1995, 1994
and 1993 are filed as part of this report and should be read in
conjunction with the financial statements.
SCHEDULE II
VALUATION AND QUALIFYING ACCOUNTS
Allowance for doubtful accounts
<TABLE>
Charges
Balance at to Costs, Write-off Balance
Beginning Expenses of Accounts at end of
Description of period and other Receivable Period
- ----------- ---------- --------- --------- ----------
<S> <C> <C> <C> <C>
$1,639,545(1)
1,224,460
Year ended -------------
December 31,
1993 $1,779,312 $2,864,005 $1,616,532 $3,026,785
========== ========== ========== ==========
$ 442,490(1)
1,394,535
Year ended ---------------
December 31,
1994 $3,026,785 $1,837,025 $1,746,314 $3,117,496
========== ========== ========== ==========
$1,003,995(1)
2,352,300
Year ended -------------
December 31,
1995 $3,117,496 $3,356,295 $2,664,262 $3,809,529
========== ========== ========== ==========
</TABLE>
(1) Allowance on accounts receivable acquired in acquisitions net
of deletion related to dispositions.
SCHEDULE II
VALUATION AND QUALIFYING ACCOUNTS
Accumulated Amortization of Intangibles
<TABLE>
Charges
Balance at to Costs, Balance
Beginning Expenses at end of
Description of period and other Deletions (1) Period
- ---------- ---------- --------- ------------- ---------
<S> <C> <C> <C> <C>
Year ended
December 31,
1993 $15,798,019 $ 8,230,280 -- $24,028,299
=========== =========== ============= ===========
Year ended
December 31,
1994 $24,028,299 $12,029,436 $2,195,935 $33,861,800
=========== =========== ========== ===========
Year ended
December 31,
1995 $33,861,800 $18,389,056 $ 58,529 $52,192,327
=========== =========== ========== ===========
</TABLE>
(1) Related to disposition of stations and fully amortized
intangible assets.
All other schedules for which provision is made in the
applicable accounting regulation of the Securities and Exchange
Commission are not required under the related instructions or are
inapplicable, and therefore have been omitted.
(a)3 Exhibits. Refer to (c) below.
(b) Reports on Form 8-K. No reports on Form 8-K were filed
during the last quarter of the year ended December 31, 1995.
(c) Exhibits
(a) 3.1 -- Articles of Incorporation, as amended, of Registrant
(v) 3.11 -- Articles of Amendment to the Articles of
Incorporation of Clear Channel Communications, Inc.
(a) 3.2 -- Amended and Restated Bylaws of Registrant
(a) 4 -- Buy-Sell Agreement among Clear Channel
Communications, Inc., L. Lowry Mays, B. J. McCombs,
John M. Schaefer and John W. Barger dated May 31,
1977.
(a)10.1 -- Incentive Stock Option Plan of Clear Channel
Communications, Inc. as of January 1, 1984.
(b)10.2 -- Television Asset Purchase Agreement dated January 27,
1992, by and between Chase Broadcasting of Memphis,
Inc. and Clear Channel Television, Inc.
(b)10.3 -- Radio Asset Purchase Agreement dated January 31,
1992, by and between Noble Broadcasting of
Connecticut, Inc. and Clear Channel Radio, Inc.
(b)10.4 -- Radio Asset Purchase Agreement dated April 19, 1992,
by and between Edens Broadcasting, Inc. and Clear
Channel Radio, Inc.
(k)10.33 -- Radio Asset Purchase Agreement dated January 31,
1993, by and between KHFI Venture, LTD. and Clear
Channel Radio, Inc.
(l)10.34 -- Radio Asset Purchase Agreement dated December 28,
1992, by and between Westinghouse
Broadcasting Company, Inc. and Clear Channel Radio,
Inc.
(c)10.5 -- Radio Asset Purchase Agreement dated December 23,
1992, by and between Inter-Urban Broadcasting of New
Orleans Partnership and Snowden
Broadcasting, Inc.
(d)10.6 -- Television Asset Purchase Agreement dated August 19,
1993, by and between Television Marketing Group of
Memphis, Inc. and Clear Channel Television,
Inc.
(e)10.7 -- Radio Asset Purchase Agreement April 1, 1993, by and
Capital Broadcasting of Virginia, Inc. and Clear
Channel Radio, Inc.
(f)10.8 -- Television Asset Purchase Agreement dated August 31,
1993, by and between Nationwide Communications, Inc.
and Clear Channel Television, Inc.
(g)10.9 -- Radio Asset Merger Agreement dated March 22, 1994, by
and between Metroplex Communications, Inc. and Clear
Channel Radio, Inc.
(h)10.10 -- Radio Partnership Interest Purchase Agreement dated
April 5, 1994, by and between Cook Inlet
Communications, Inc. and WCC Associates and Clear
Channel Radio, Inc.
(i)10.11 -- Television Asset Purchase Agreement September 12,
1994, by and between Heritage Broadcasting Company of
New York, Inc. and Clear Channel Television, Inc. and
Clear Channel Television Licenses, Inc.
(j)10.12 -- Radio Asset Purchase Agreement dated November
17,1994, by and between Noble Broadcast of Houston,
Inc. and Clear Channel Radio, Inc.
(k)10.13 -- Australian Radio Network Shareholders Agreement dated
February, 1995, by and between APN Broadcasting
Investments Pty Ltd, Australian Provincial
Newspapers Holdings Limited, APN Broadcasting Pty Ltd
and Clear Channel Radio, Inc. and Clear Channel
Communications, Inc.
(l)10.14 -- $600,000,000 Amended and Restated Credit Agreement
Among Clear Channel Communications, Inc., Certain
Lenders, and Nationsbank of Texas, N.A., as
Administrative Lender, dated October 19, 1995.
(m)10.15 -- Clear Channel Communications, Inc. 1994 Incentive
Stock Option Plan.
(m)10.16 -- Clear Channel Communications, Inc. 1994 Nonqualified
Stock Option Plan.
(m)10.17 -- Clear Channel Communications, Inc. Directors'
Nonqualified Stock Option Plan.
(m)10.18 -- Option Agreement for Officer
10.19 -- Employment Agreement between Clear Channel
Communications, Inc. and L. Lowry Mays
13.1 -- Annual Report to Shareholders for Fiscal Year Ended
December 31, 1995.
22 -- Subsidiaries of the Registrant.
24.1 -- Consent of Independent Auditors - Ernst & Young LLP
24.2 -- Consent of Independent Auditors - KPMG
99.1 -- Report of Independent Auditors - KPMG
(a) -- Incorporated by reference to the exhibits of the
Company's Registration Statement on Form S-1(Reg. No.
289161) dated April 19, 1984.
(b) -- Incorporated by reference to the Registrant's Form 8-
K dated July 14, 1992.
(c) -- Incorporated by reference to the Registrant's Form
10-Q dated May 12, 1993.
(d) -- Incorporated by reference to the Registrant's Form 8-
K dated September 2, 1993.
(e) -- Incorporated by reference to the Registrant's Form
10-Q dated November 1, 1993.
(f) -- Incorporated by reference to the Registrant's Form 8-
K dated October 27, 1993.
(g) -- Incorporated by reference to the Registrant's Form 8-
K dated October 26, 1994.
(h) -- Incorporated by reference to the Registrant's Form
10-Q dated November 14, 1994.
(i) -- Incorporated by reference to the Registrant's Form 8-
K dated December 14, 1994.
(j) -- Incorporated by reference to the Registrant's Form 8-
K dated January 13, 1995.
(k) -- Incorporated by reference to the Registrant's Form 8-
K dated May 26, 1995.
(l) -- Incorporated by reference to the Registrant's Form
10-Q dated November 14, 1995.
(m) -- Incorporated by reference to the Registrant's Form S-
8 dated November 20, 1995.
EXHIBIT 13.1 - ANNUAL REPORT TO SHAREHOLDERS
Clear Channel Communications, Inc.
Annual Report 1995
1995 Accomplishments
Record Sales
Achieved record sales of $283 million, an increase of 41 percent
over 1994.
Record Operating Profits at the Station Level
Earned $113 million in station operating income before
depreciation and amortization, an increase of 55 percent over
1994.
Record After Tax Cash Flow
Generated more than $71 million in after tax cash flow, an
increase of 52 percent over 1994.
Record After Tax Cash Flow Per Share
Reported after tax cash flow per share of $2.03, adjusted for a
two-for-one stock split on November 30, 1995, an increase of 50
percent over 1994.
Long-Term Stock Price Performance
In a recently released survey in the Wall Street Journal for the
year ended 1995, Clear Channel Communications was the eighth best
performing stock over the last 10 years, the 11th best performing
stock over the last five years and the 17th best performing stock
over the last three years.
Increased Access to Capital
Improved financial availability and flexibility by completing a
new $600 million revolving credit facility.
Domestic Radio Acquisitions
Acquired KPRC-AM, KSEV-AM, and KMJQ-FM in Houston, TX. Acquired
a 21.4 percent interest in Heftel Broadcasting Corporation, the
largest domestic Spanish-language broadcaster.
Domestic Television Acquisitions
Acquired WHP-TV, the CBS affiliate in Harrisburg, PA and entered
into Local Marketing Agreements with WLYH-TV and WNFT-TV, the UPN
affiliates serving Harrisburg, PA and Jacksonville, FL,
respectively.
International Acquisitions
Acquired a 50 percent interest in the second largest radio group
in Australia, the Australian Radio Network Pty Ltd.
Television Affiliation Changes and Local News Expansion
WPTY-TV became the ABC affiliate in Memphis, TN on December 1,
1995. WPMI-TV became the NBC affiliate in the Mobile, AL /
Pensacola, FL market on January 1, 1996. Both stations have
launched extensive local news operations.
Strengthened Management
Strengthened management at all levels and updated the Company's
strategic plan.
W. Ripperton Riordan was promoted to the position of Executive
Vice President and Chief Operating Officer of Clear Channel
Television.
Financial Highlights
<TABLE>
In Thousands, Except
Per Share Amounts 1995 1994 % Change
<S> <C> <C> <C>
Gross broadcasting
revenue $283,357 $200,695 +41
Station operating
income before
depreciation and
amortization 112,555 72,673 +55
Operating income 71,372 42,904 +66
Net income 32,014 22,009 +45
Net income per share
(1) .91 .63 +44
After tax cash flow
(2) 71,140 46,866 +52
After tax cash flow
per share(1)(2) 2.03 1.35 +50
</TABLE>
(1) Adjusted for two-for-one stock split effective November 30,
1995.
(2) Defined as net income plus depreciation, intangible
amortization (including nonconsolidated affiliates) and
deferred taxes.
Note: Following this table in the glossy annual report are four
bar graphs depicting the increase in gross revenue, station
operating income, after-tax cash flow, and after-tax cash flow
per share from fiscal year 1991 to fiscal year 1995.
Letter to the Shareholders
Dear Fellow Shareholders,
Nineteen ninety-five was the most successful year in your
company's history. I am pleased to report that the share price
of the Company's common stock increased 74 percent during 1995.
Financial results again achieved record levels in our core
businesses of radio and television broadcasting. After tax cash
flow per share, the most important measure of your company's
financial performance, increased 50 percent from $1.35 to $2.03.
Gross revenues reached $283.4 million, up 41 percent compared to
1994. After tax cash flow increased 52 percent from $46.9 million
to $71.1 million.
Station operating income before depreciation and amortization
rose 55 percent from $72.7 million to $112.6 million. Net income
increased 45 percent from $22.0 million, or $.63 per share, to
$32.0 million, or $.91 per share. All per share amounts have been
adjusted to reflect a two-for-one stock split effective November
30, 1995.
Radio
Your company made significant investments in each of its radio
markets to maintain its marketing and strategic presence. These
investments will help the radio division maintain strong growth
in 1996. Management has significantly improved the performance of
recent acquisitions and continues to look for new opportunities
to increase shareholder value. Subsequent to the Company's
January 1995 acquisition of KPRC, KSEV and KMJQ in Houston,
Texas, the Company is now the leader in both revenue share and
audience share in Houston, the ninth largest radio market in the
United States. This strategic combination is indicative of how
the Company continues to expand and dominate its markets.
In May of 1995, your company made its first foray into
international broadcasting by acquiring 50 percent of the second
largest radio broadcaster in Australia through the formation of a
new venture, the Australian Radio Network Pty Ltd, which owns
half of the commercial FM stations in Australia's two largest
cities, Sydney and Melbourne, as well as stations in Brisbane,
Canberra and Albury/Wodonga. Based upon the initial success of
our Australian investment, the Company will continue to look for
international opportunities that meet our stringent investment
criteria.
In May of 1995, your company also acquired a 21.4 percent
interest in Heftel Broadcasting Corporation, the largest Spanish-
language radio broadcaster in the United States. This investment
gives the Company the ability to participate in a rapidly growing
niche within our industry.
In February of 1996, the Company purchased the broadcasting
assets of WOOD-AM/FM and WBCT-FM in Grand Rapids, MI for
approximately $42 million and entered into a Local Marketing
Agreement (LMA) with an option to purchase the FCC licenses.
These stations will give the Company a significant presence in
Grand Rapids. In March of 1996, the Company entered into a
definitive agreement to acquire US Radio, Inc. for $140 million.
US Radio owns or operates 13 FM and 5 AM stations in eight
markets. We expect to close this transaction during the Summer of
1996.
Television
At the end of 1995, your company owned and/or operated television
stations which are affiliated with five different networks: one
each with CBS, ABC and NBC, six with Fox and seven with UPN. In
Memphis, WPTY-TV switched from Fox to ABC on December 1, 1995;
while in Mobile/Pensacola, WPMI- TV switched from Fox to NBC on
January 1, 1996. In each of these markets, the Company has made
considerable investments to start up local news franchises. While
these investments are significant and dilutive to earnings in the
short- term, we believe that they are important to our long-term
strategic presence in these markets. An alternative news product
will also be broadcast in different time slots on our LMA
stations in each of these markets.
In November, the Company acquired WHP-TV, the CBS affiliate in
the Harrisburg/Lancaster/Lebanon/York market of Pennsylvania.
This market had two CBS affiliates serving the same market, which
made it difficult for either station to attract sufficient
audience or advertisers to compete effectively. Therefore, the
company entered into an LMA with WLYH-TV, the other CBS
affiliate. WLYH-TV subsequently switched from CBS to UPN. It is
our hope that the CBS audience can be consolidated with WHP-TV
and a new audience can be reached through the new UPN affiliation
on WLYH-TV. Additionally, the Company intends to increase
greatly its presence in local news and make both stations
significant news outlets.
Deregulation
The Telecommunications Act of 1996 (the Act) has significantly
relaxed ownership regulations with regard to both radio and
television stations. The Act has eliminated restrictions on the
total number of radio stations the Company can own nationally and
allows the Company to own up to 8 radio stations per market in
most of its existing markets. The Company believes that this
potential for consolidation will improve the operating
characteristics of the entire radio industry. The Act has also
eliminated restrictions on the number of television stations the
Company can own, subject to a national ownership limit of
stations that control no more than 35 percent of the total United
States viewing audience. The Company is optimistic about the new
opportunities the Act creates to increase shareholder value.
Strategic Direction
Your company continues to be committed to its proven corporate
strategy:
Decentralized, flexible, entrepreneurial business units that
place emphasis on simplifying structures and procedures,
Sound centralized financial management,
Growth through internal expansion of existing broadcast
properties, supplemented by strategic acquisitions,
Internal capital investment to improve quality and market
leadership,
Insistence on adherence to the highest standard of integrity and
business conduct, and
Significant attention to long-term strategic planning.
The future of our core businesses of radio and television is
bright, and the markets we serve continue to improve. Our
position in each of those markets remains one of leadership. To
the over 1,800 members of our team who made 1995 possible,
I personally thank you. And to our shareholders, you may continue
to expect that our team is committed to enhancing the long-term
value of your investment.
Sincerely,
Lowry Mays
President and Chief Executive Officer
March 4, 1996
Acquisitions
We believe the ultimate measure of our success is to provide a
superior value to our shareholders, balancing near-term and long-
term objectives. To that end, Clear Channel continues to improve
existing operations while maximizing opportunities for expansion.
Historically, Clear Channel has capitalized on expanded ownership
of radio and television stations to enhance its competitive
position in virtually every market in which it operates.
Nineteen ninety-five provided the Company with opportunities for
international expansion in radio and diversification into every
major television network.
International Expansion
The Company recognized two significant factors that made
expansion into the Australian market attractive. First, beginning
in 1992, the Australian government relaxed broadcasting laws,
allowing for 100 percent foreign ownership of radio properties,
subject to approval by the Foreign Investment Review Board.
Second, this same legislation allowed for duopoly (ownership of
two stations in the same market of the same service -- AM or FM)
in radio, changing the economics of the industry for the better.
However, it was not until the Summer of 1994, that a significant
opportunity became available that warranted our management's time
and energy.
In the Spring of 1995, the Company entered into a transaction
that combined the radio operations of three Australian entities
to create the Australian Radio Network Pty Ltd (ARN). ARN
combined Wesgo Limited, a publicly-traded company recently
acquired by Australian Provincial Newspapers, with the Australian
Radio Network, which had been owned by the Albert Family. Gold
104FM in Melbourne was purchased by ARN as a stand-alone station.
Those three entities were combined and renamed the Australian
Radio Network Pty Ltd, of which the Company owns 50 percent,
while Australian Provincial Newspapers owns the other 50 percent.
In addition to the opportunity for 100 percent foreign ownership
within a rapidly consolidating industry, the Australian
broadcasting industry has a number of other factors which are
compelling for the Company. Australia has a stable government
with a defined licensing process which eliminates the risk of
losing any licenses or having new licenses that are not regulated
coming into the market. It also has a stable currency which is
monitored by a federal reserve board that is attuned to the
monetary policy of the United States Federal Reserve. Another
advantage is that English is the primary language in Australia,
in contrast to other foreign markets where language differences
pose significant barriers to entry. All of these factors
combined to make ARN an attractive investment.
Having seen the positive effects of duopoly in the U.S., the
Company is optimistic about the possibilities of duopoly in
Australia. ARN and Austereo, the largest radio broadcaster in
Australia, control approximately 62 percent of radio revenues in
the two major cities of Melbourne and Sydney.
ARN, along with other Australian broadcasters, hopes to expand
the usage of radio by advertisers in Australia. The long-term
goal for the Australian radio industry is to provide a more cost-
effective advertising medium. The dynamics of increased radio
advertising and increased capital committed to radio advertising
should have a significantly positive impact on ARN.
Clear Channel will continue to employ its decentralized
management philosophy with regard to ARN. ARN has hired Nigel
Milan, the former CEO of Radio New Zealand. He successfully
turned around Radio New Zealand which owns and operates over 40
radio stations in New Zealand. We believe Mr. Milan brings a
level of intensity and enthusiasm to ARN which will provide
strong leadership and prosperity for ARN.
Though globalization has become quite popular for publicly traded
companies, Clear Channel has not felt compelled to have an
international presence. Our mandate is simply to try to create as
much value for our shareholders as possible. When Australia
changed its laws in 1992, allowing for duopoly and 100 percent
foreign ownership, the Company recognized that it might provide
attractive returns on investments. To that end, your company
continues to be opportunistic, rather than expansionary, when
evaluating acquisitions in global markets.
The pro forma results for 100% of ARN, after station
divestitures, for the year ended December 31, 1995 are detailed
below. At February 29, 1996, the foreign currency exchange rate
was US $1 = A $1.31.
Revenues A$ 83,242,000
Operating expenses A$ 55,948,000
Station operating income before
depreciation and amortization A$ 27,294,000
Corporate/other A$ 2,765,000
EBITDA A$ 24,529,000
Expansion within the United States
Heftel Broadcasting Corporation
In May of 1995, the opportunity to acquire a significant interest
in the largest Spanish- language broadcasting company in the
United States, Heftel Broadcasting Corporation, became available
and the Company took a 21.4 percent equity position in Heftel's
publicly-traded Class A common stock. Heftel's stock is traded on
the NASDAQ under the symbol HBCCA.
Strategically, this acquisition positions the company in the
attractive and rapidly growing Spanish-language broadcasting
niche. Because the Hispanic population is the fastest growing
population segment in the United States and because fewer
stations per capita target the Spanish-language market, the
Company believes that Spanish-language broadcasting is an
attractive, long-term growth industry. Due to the fact that
well-established market positions held by existing radio stations
make it difficult to start new Spanish-language stations, the
Company opted to invest in an established Spanish-language
broadcaster. Consistent with the Company's own long-term strategy
to dominate its markets, Heftel's strategy is to become the
dominant Spanish-language broadcaster in the U.S. Heftel should
benefit from the increased consolidation of the Spanish-language
niche made possible by the Telecommunications Act of 1996. The
Company's initial investment in Heftel in May of 1995 has more
than doubled in value and we look forward to increased growth in
this investment.
US Radio, Inc.
In March of 1996, the Company entered into a definitive agreement
to acquire US Radio, Inc. for $140 million. US Radio owns and/or
operates 13 FM and 5 AM stations in eight markets in the U.S.
This transaction will expand our broadcasting presence in some of
our existing markets and give the Company an excellent foundation
in other markets from which it can continue to grow.
Oklahoma City
We believe we have an obligation to the well-being of the
communities in which we work. We further believe the future of
the Company's core businesses is closely tied to public service
and that the standards we set will be measured closely by the
communities we serve and the regulators who license us.
Clear Channel's involvement in an event that challenged the
entire nation's belief in the good of humanity, the April 19,
1995 bombing of the Alfred P. Murrah federal building in Oklahoma
City, is an example of Clear Channel's commitment to responsive
and responsible broadcasting in all of the communities it serves.
In this particular incident, Clear Channel's own KTOK, itself,
became part of the story. As the city's most prominent news talk
station, the media found the voice of Oklahoma City to be KTOK.
April 19, 1995 was anything but exceptional for KTOK until 9:02
that morning. A gas explosion, an airplane crash, a tanker truck
involved in an accident, an earthquake, and even a bomb, were
initial descriptions of the reverberations felt by personnel
inside Clear Channel Communications' Oklahoma City offices. The
view to the southeast did not immediately answer any questions.
It did, however, confirm that something tragic had
happened in downtown Oklahoma City.
At 9:02 a.m., KTOK reporter Carrie Hulsey was en route to an
assignment at the federal courthouse. She was stopped at a light
about a block south of the Alfred P. Murrah federal building when
the blast occurred. Gathering up her wits, as well as the car's
two-way radio, Carrie made her way to the building. By 9:03
a.m., KTOK reporter Craig Logsdon was on the air, describing the
view from the Clear Channel studios at 50 Penn Place. Within one
minute and thirty seconds after the explosion, Carrie Hulsey was
on the air, via her car's two- way radio, describing the
destruction and confusion that had only begun to rain down on the
city. Moments later, KTOK News Director Jerry Bohnen began nine
hours of anchoring the stations' initial coverage.
As the news of the tragedy spread throughout the country, the
calls for news feeds came from every major network and station in
the world. The incredible speed with which information was
disseminated across the nation and the world was no accident. Due
to Clear Channel's expertise in feeding other news organizations
daily through the Oklahoma News Network (ONN), the implementation
of a crisis management plan to ensure information integrity and
the rapid relay of wire feeds was basically standard operating
procedure. KTOK and the Oklahoma News Network served as the link
to the tragedy in
Oklahoma City. A significant amount of the continuous coverage
aired by the ABC radio
networks consisted of KTOK programming. Also, ONN and KTOK
provided feeds to hundreds of radio stations and news services
throughout the world.
While major networks and news stations dealt with the logistics
of getting their people to the scene in Oklahoma, KTOK became the
world's link to this Midwest tragedy. Abandoning their usual
entertainment formats, Clear Channel's two FM stations, KJ103 and
KEBC, began to air the complete KTOK news feed, giving KTOK
unprecedented exposure to the Oklahoma City market.
Fifty Penn Place, in the collage at left, is home not only to the
Oklahoma City contingent of Clear Channel, but to the Oklahoma
city branch of the FBI as well. Almost every building housing
federal authorities in Oklahoma City was to be evacuated and
swept for bombs. Keeping the station on the forefront of the
coverage was going to be a challenge if personnel were not
allowed to remain inside, or if it was a dangerous situation. The
cooperation and teamwork among all the stations and employees
made the evacuation of just about everybody but news personnel
and a few technicians a relatively simple matter.
It was hardly just a few people, though, that gave KTOK its
prowess during this crisis. It was a classic case of the whole
being greater than the sum of its parts. Everyone from every
department of all three Clear Channel stations, as well as ONN,
contributed. A production director fed reports from the fire
department headquarters, FM announcers did reports from blood
donation sites, sales people helped gather information from
across the nation and receptionists fielded the countless
telephone calls.
While there were hundreds of stories to report as a result of the
bombing, KTOK's principal
assignments included two reporters at the command/media center
next to the federal building 24 hours a day and another reporter
covering the blast site from a different local site approximately
12 hours a day.
When the station was not broadcasting news reports, KTOK focused
on the other thing it does so well-talk. The station simply
opened the phones and let the city talk-about its feelings, its
theories, its fears, its hopes. In a continuing effort to serve
the community, the station provided 12 hours of psychological
discussion during the first week following the blast. On the
Sunday after the blast, nationally-syndicated counselor Dr. Laura
Schlessinger provided two hours of discussion and grief
counseling specifically for Oklahoma City.
Not only did every Clear Channel employee in Oklahoma City go
beyond the call of duty, but the company as a whole did much
more than broadcast some of the most timely and thorough
information available. For example, the three Clear Channel
radio stations and the Oklahoma News network, in conjunction with
the Bank of Oklahoma, initiated a relief fund which raised more
than $200,000 to help families of the victims of the bombing. The
Clear Channel Oklahoma City stations' key fund-raising event was
the "Healing in the Heartland" concert in the Summer of 1995,
which featured various country and contemporary recording
artists, including headliner Tony Bennett.
From being the first to broadcast from the blast scene, to the
memorial services, to the demolition of the building, and even
through to the end of the Nichols and McVeigh trials, KTOK has
been, and will continue to be, a primary source of breaking news
regarding the bombing-thanks, in no small part, to the teamwork
of everyone associated with the operation. Our corporate
stewardship is possible only through Clear Channel personnel's
commitment to our communities, which proves once again that your
company upholds its creed: Clear Channel people are our most
important asset, making the critical difference in how we
perform. They are what separates us from our competitors.
Investment Highlights
Five-year Cumulative Return - bar graph showing the relative
values of a $1,000 investment in Clear Channel Communications,
Inc. Common Stock, compared to the same relative values of the
S&P 500 Index and the Paul Kagan Associates Broadcast Index at
December 31 of each of the past five years:
Year-end value of $1,000 invested at December 31, 1990 over the
last five years. This represents a compound annual growth rate of
approximately 75%
1990: $ 1,000
1991: $ 1,329
1992: $ 2,397
1993: $ 6,765
1994: $ 9,329
1995: $ 16,222
% Revenue by Market - Pie chart showing the following
percentages:
San Antonio: 5.9%
Louisville: 6.2%
Albany: 3.6%
Harrisburg: 0.7%
Tulsa: 6.0%
Tucson: 0.2%
Memphis: 7.7%
Minneapolis: 9.8%
Mobile/
Pensacola: 3.9%
Cleveland: 3.6%
Miami/Ft.
Lauderdale: 5.2%
Houston: 11.1%
New Haven: 2.4%
Little Rock: 3.9%
Austin: 3.2%
Wichita: 2.9%
New Orleans: 3.3%
Tampa: 6.0%
Jacksonville: 5.2%
Oklahoma City: 4.1%
Richmond: 5.1%
Family Tree
RADIO
San Antonio, TX
WOAI-AM
News/Talk/Sports
1200 AM
KQXT-FM
Adult Contemporary
101.9 FM
KTKR-AM
News/Talk/Sports
760 AM
KAJA-FM
Country
97.3 FM
KSJL-FM*
Adult Urban
96.1 FM
New Haven, CT
WKCI-FM
Contemporary Hits
101.3 FM
WAVZ-AM
Nostalgia
1300 AM
WELI-AM
News/Talk
960 AM
Austin, TX
KPEZ-FM
Classic Rock
102.3 FM
KHFI-FM
Contemporary Hits
96.7 FM
KEYI-FM*
Oldies
103.5 FM
KFON-AM*
News/Talk
1490 AM
Houston, TX
KPRC-AM &
News/Talk/Sports
950 AM
KSEV-AM &
News/Talk/Sports
700 AM
KMJQ-FM
Adult Urban
102.1 FM
KBXX-FM
Urban Contemporary
97.9 FM
KHYS-FM*
Jazz
98.5 FM
KJOJ-AM;
Religious
880 AM
KJOJ-FM;
Religious
103.3 FM
Louisville, KY
WHAS-AM
News/Adult Contemporary
840 AM
WAMZ-FM
Country
97.5 FM
WKJK-FM*
Traditional Country
98.9 FM
Tulsa, OK
KAKC-AM
News/Sports/Oldies
1300 AM
KMOD-FM
Album Oriented Rock
97.5 FM
Oklahoma City, OK
KTOK-AM
News/Talk/Sports
1000 AM
KEBC-FM
Country
94.7 FM
KJYO-FM
Contemporary Hits
102.7 FM
WKY-AM*
News/Talk
930 AM
Tampa, FL
WMTX-AM
Adult Contemporary
1040 AM
WMTX-FM
Adult Contemporary
95.7 FM
WRBQ-AM
Adult Urban
1380 AM
WRBQ-FM
Country
104.7 FM
New Orleans, LA
WODT-AM
News/Talk/Sports
1280 AM
WQUE-FM
Urban Contemporary
93.3 FM
WYLD-AM
Gospel
940 AM
WYLD-FM
Adult Urban
98.5 FM
Miami, FL
WHYI-FM
Contemporary Hits
100.7 FM
WBGG-FM
Classic Hits
105.9 FM
Richmond, VA
WRVA-AM
News/Talk/Sports
1140 AM
WRVH-AM
News/Talk/Sports
910 AM
WRVQ-FM
Contemporary Hits
94.5 FM
WRXL-FM
Album Oriented Rock
102.1 FM
Cleveland, OH
WNCX-FM
Classic Rock
98.5 FM
WERE-AM
News/Talk
1300 AM
WENZ-FM*
Modern Rock
107.9 FM
Grand Rapids, MI
WOOD-AM % )(
News/Talk/Sports
1300 AM
WOOD-FM % )(
Adult Contemporary
105.7 FM
WBCT-FM % )(
Country
93.7 FM
Memphis, TN
WHRK-FM)(
Urban Contemporary
97.1 FM
WDIA-AM)(
Adult Urban
1070 AM
Norfolk, VA
WOWI-FM)(
Urban Contemporary
102.9 FM
WJCD-FM)(
Jazz
105. 3 FM
WSVY-AM)(
Adult Urban
1350 AM
WSVY-FM)(
Adult Urban
107.7 FM
Raleigh, NC
WQOK-FM)(
Urban Contemporary
97.5 FM
WNND-FM)(
Jazz
103.9 FM
El Paso, TX
KPRR-FM)(
Contemporary Hits
102.1 FM
KHEY-FM)(
Country
96.3 FM
KHEY-AM)(
Oldies
690 AM
Milwaukee, WI
WKKV-FM)(
Urban Contemporary
100.7 FM
Little Rock, AR
KDDK-FM)(
Country
100.3 FM
KMJX-FM)(
Classic Rock
105.1 FM
Reading, PA
WRAW-AM)(
Nostalgia
1340 AM
WRFY-AM)(
Contemporary Hits
102.5 FM
TELEVISION
Mobile, AL; Pensacola, FL
WPMI-TV
NBC TV-15
WJTC-TV %
UPN TV-44
Jacksonville, FL
WAWS-TV
FOX TV-30
WNFT-TV %
UPN TV-47
Tulsa, OK
KOKI-TV
FOX TV-23
KTFO-TV %
UPN TV-41
Tucson, AZ
KTTU-TV
UPN TV-18
Wichita, KS
KSAS-TV
FOX TV-24
Memphis, TN
WPTY-TV
ABC TV-24
WLMT-TV %
UPN TV-30
Little Rock, AR
KLRT-TV
FOX TV-16
KASN-TV %
UPN TV-38
Albany, NY
WXXA-TV
FOX TV-23
Harrisburg, PA
WHP-TV
CBS TV-21
Lebanon/
Lancaster, PA
WLYH-TV %
UPN TV-15
Minneapolis, MN
WFTC-TV
FOX TV-29
NETWORKS
Louisville, KY
Kentucky news Network
News/Agriculture Network
Richmond, VA
Virginia News Network
News/Agriculture Network
Oklahoma City, OK
Oklahoma News Network
News/Agriculture Network
San Angelo, TX
Voice of Southwest agriculture
News/Agriculture Network
College Station, TX
Des Moines, IA
Clear Channel Sports
College Sports Networks
* Joint Sales Agreement (FCC license not owned
or station not programmed by the Company)
& 80% owned by the Company
% Local Marketing or Time Brokerage Agreement
(FCC license not owned by the Company)
)( Pending acquisition
Diversification
On pages 12 and 13 of the glossy annual report are graphical maps
of the U.S. and Australia, showing the states and markets in
which Clear Channel Communications, Inc. has the following profit
centers and headquarters:
Legend
Corporate Headquarters
Networks
Joint Sales Agreements/Local Marketing Agreements
Television Stations
Radio Stations
Pending Acquisitions
Australian Radio Network Pty Ltd
RADIO
2WS
Sydney, NSW
Adult Contemporary
101.7 FM
MIX 106
Sydney, NSW
Hot Adult Contemporary
106.5 FM
GOLD 104
Melbourne, Victoria
Adult Contemporary
104.3 FM
TTFM
Melbourne, Victoria
Hot Adult Contemporary
101.1 FM
4KQ
Brisbane, Queensland
Adult Contemporary
693 AM
2AY
Albury, NSW
Oldies
1494 AM
B 105
Albury, NSW
Rock
104.9 FM
106.3 FM
Canberra
Adult Contemporary
106.3 FM
ARNSAT
Satellite distribution
of radio programming
ARN Radio Sales
National Representation Company
Legend
Corporate Headquarters
Networks
Radio Stations
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Comparison of 1995 vs. 1994
Consolidated
Consolidated net broadcasting revenue in 1995 increased 41% to
$243,813,000 from $173,109,000 in 1994. Station operating
expenses in 1995 increased 31% to $131,258,000 compared to
$100,437,000 for 1994. Station operating income before
depreciation and amortization in 1995 increased to $112,555,000
from $72,673,000, or 55%. Depreciation and amortization
increased 37% to $33,769,000 in 1995 from $24,669,000 in 1994.
Interest expense increased to $20,751,000 from $7,669,000 or
171%. Net income was $32,014,000 in 1995 compared to $22,009,000
for 1994. Equity in net income of, and other income from,
nonconsolidated affiliates was $2,927,000 in 1995. Income tax
expense in 1995 was $20,730,000, reflecting an annual effective
rate of 40%, compared to $14,387,000, or a 40% effective rate in
1994.
The majority of the increase in net broadcasting revenue was due
to the additional revenue associated with radio and television
stations acquired in 1995 and the inclusion of a full year of
operations for those stations acquired in 1994. These stations
are as follows:
<TABLE>
Acquisition Network or
Date Station Location
<S> <C> <C>
1995 Acquisitions
January 1, 1995 KMJQ-FM Houston, TX
January 1, 1995 KPRC-AM/KSEV-AM
(2) Houston, TX
October 17, 1995 Voice of Southwest
Agriculture San Angelo, TX
October 31, 1995 WHP-TV Harrisburg, PA
October 31, 1995 WLYH-TV (1) Harrisburg, PA
1994 Acquisitions
January 14, 1994 KEBC-FM Oklahoma City, OK
February 28, 1994 KLRT-TV/KASN-TV(1) Little Rock, AR
March 9, 1994 WAXY-FM
(now WBGG-FM) Miami/Ft. Lauderdale, FL
August 15, 1994 KBXX-FM Houston, TX
October 12, 1994 Metroplex
Communications,
Inc. Miami/Ft. Lauderdale, FL;
Tampa, FL;
Cleveland, OH
November 1, 1994 WENZ-FM (1) Cleveland, OH
December 1, 1994 WXXA-TV Albany, NY
</TABLE>
(1) The Company operates these stations under time sales or time
brokerage agreements and does not own the FCC licenses.
(2) The Company acquired an 80% interest in these stations.
Station operating expenses rose due to the increase in selling
expenses associated with this revenue increase and the additional
operating expenses associated with the above acquisitions. The
major cause of the increase in depreciation and amortization was
the acquisition of the tangible and intangible assets associated
with the purchases of the above mentioned stations. The majority
of the increase in interest expense was due to an increase in the
average amount of debt outstanding and an increase in the average
interest rate from 5.7% in 1994 to 6.8% in 1995.
The equity in net income of, and other income from,
nonconsolidated affiliates resulted from the Company's purchase
of a 50% interest in the Australian Radio Network Pty Ltd (ARN),
which owns and operates radio stations, a narrowcast radio
broadcast service and a radio representation company in Australia
and the purchase of 21.4% of the Common Stock of Heftel
Broadcasting Corporation (Heftel), a Spanish-language radio
broadcaster in the United States. Income tax expense was up due
to the increase in earnings. Net income rose for the above
stated reasons, but was partially offset by a $2,315,000, or 45%,
increase in corporate related expenses warranted by the increase
in current business activity.
RADIO
Net broadcasting revenue in 1995 increased 51% to $141,737,000
from $94,098,000 in 1994. Station operating expenses increased
36% to $85,024,000 in 1995, compared to $62,383,000 for 1994.
Station operating income before depreciation and amortization in
1995 increased to $56,713,000 from $31,715,000, or 79%.
Depreciation and amortization increased 62% to $19,981,000 from
$12,324,000. Station operating income increased from $19,390,000
in 1994 to $36,732,000 in 1995, or 89%.
The majority of the increase in net broadcasting revenue, station
operating expenses and depreciation and amortization was due to
the aforementioned radio and network acquisitions. The increase
in station operating income was primarily due to the inclusion of
the operating results of the above stated acquisitions. At
December 31, 1995 the radio segment included 36 stations for
which the Company owns the Federal Communications
Commission (FCC) license and seven stations operated under lease
management or time brokerage agreements. These 43 stations
operate in 12 different markets. The radio segment also operates
five networks.
With the passage of the Telecommunications Act (the Act) in
February 1996, the limit on the maximum number of licenses that
one company may own in the United States was eliminated, and the
limit on the number of licenses that one company may own in any
given market was changed. This limit depends on the size of the
market; in the largest markets, for example, one company may not
own more than eight licenses total, with no more than five
licenses of one service (AM or FM). This allows the Company
significant flexibility in future growth in its radio
broadcasting operations.
TELEVISION
Net broadcasting revenue in 1995 increased 29% to $102,076,000
from $79,012,000. Station operating expenses in 1995 increased
21% to $46,234,000 compared to $38,054,000 for 1994. Station
operating income before depreciation and amortization in 1995
increased to $55,842,000 from $40,958,000, or 36%. Depreciation
and amortization increased 12% to $13,788,000 from $12,344,000.
Station operating income increased to $42,054,000 from
$28,614,000, or 47%.
The majority of the increase in net broadcasting revenue was due
to the increase in advertising revenue resulting from improved
ratings at the majority of the television stations, the
additional revenue associated with the television stations
acquired in 1995, and the inclusion of a full year of operations
for those stations acquired in 1994. Station operating expenses
rose due to the increase in selling expenses associated with
these revenue increases, the expenses associated with the start
up of two news departments, and the operating expenses of the
newly acquired stations. The major cause of the increase in
depreciation and amortization was the acquisition of the tangible
and intangible assets
associated with the purchase of the aforementioned stations. At
December 31, 1995, the television segment included ten television
stations for which the Company owns the license and six stations
which are operated under lease management or time brokerage
agreements. These 16 stations operate in ten different markets.
With passage of the Act in February 1996, the restrictions on
ownership of television stations include a national ownership
limit of stations that control no more that 35% of the total
United States television audience and the limit of one license
per market for any one broadcaster. This allows the Company
greater opportunity to expand its presence in television
broadcasting.
Comparison of 1994 vs. 1993
Consolidated
Consolidated net broadcasting revenue in 1994 increased 46% to
$173,109,000 from $118,183,000. Station operating expenses in
1994 increased 32% to $100,437,000, compared to $75,990,000 for
1993. Station operating income before depreciation and
amortization in 1994 increased to $72,673,000 from $42,193,000,
or 72%. Depreciation and amortization increased 41% to
$24,669,000 from $17,447,000. Interest expense increased to
$7,669,000 from $5,390,000, or 42%. Other income (expense)
increased from ($196,000) to $1,161,000. Net income was
$22,009,000 for 1994, compared to $9,123,000 in 1993. Income tax
expense in 1994 was $14,387,000, reflecting an annual average
effective tax rate of 40%, compared to $6,572,000, or a 42%
effective rate in 1993.
The majority of the increase in net broadcasting revenue was due
to the additional revenue associated with the radio and
television stations acquired in 1994 and the inclusion of a full
year of operations for those stations acquired in 1993. These
stations are as follows:
<TABLE>
Acquisition Network or
Date Station Location
<S> <C> <C>
1994 Acquisitions
January 14, 1994 KEBC-FM Oklahoma City, OK
February 28, 1994 KLRT-TV/KASN-TV(1) Little Rock, AR
March 9, 1994 WAXY-FM
(now WBGG-FM) Miami/Ft. Lauderdale, FL
August 15, 1994 KBXX-FM Houston, TX
October 12, 1994 Metroplex
Communications,
Inc. Miami/Ft. Lauderdale, FL;
Tampa, FL;
Cleveland, OH
November 1, 1994 WENZ-FM (1) Cleveland, OH
December 1, 1994 WXXA-TV Albany, NY
1993 Acquisitions
February 1, 1993 KQXT-FM San Antonio, TX
March 9, 1993 KHFI-FM Austin, TX
March 25, 1993 WYLD-AM/FM New Orleans, LA
July 1, 1993 KSJL-AM
(now KTKR-AM) San Antonio, TX
August 19, 1993 WLMT-TV (1) Memphis, TN
September 15, 1993 WRXL-FM, WRNL-AM Richmond, VA
(now WRVH-AM), Virginia
News Network
October 13, 1993 KITN-TV
(now WFTC-TV) Minneapolis, MN
November 3, 1993 KTFO-TV (1) Tulsa, OK
</TABLE>
(1) The Company operates these stations under lease management
agreements and does not own the FCC licenses.
Station operating expenses rose due to the increase in selling
expenses associated with this revenue increase and the additional
operating expenses associated with the above acquisitions. The
major cause of the increase in depreciation and amortization was
the acquisition of the tangible and intangible assets associated
with the purchases of the above mentioned stations. The majority
of the increase in interest expense was due to an increase in the
average amount of debt outstanding and an increase in the average
interest rate from 5.2% to 5.7%.
Income tax expense was up due to the increase in earnings, while
the average effective rate was down due to the drop in the amount
of nondeductible goodwill as a percentage of earnings. Net income
rose for the above stated reasons, but was partially offset by a
$1,636,000 increase in corporate related expenses warranted by
the increase in current business activity.
RADIO
Net broadcasting revenue in 1994 increased 31% to $94,098,000
from $71,605,000. Station operating expenses increased 19% to
$62,383,000, compared to $52,254,000 for 1993. Station operating
income before depreciation and amortization in 1994 increased
$31,714,000 from $19,351,000, or 64%. Depreciation and
amortization increased 35% to $12,324,000 from $9,114,000.
Station operating income increased to 89% to $19,390,000 in 1994
from $10,237,000 in 1993.
The majority of the increase in net broadcasting revenue, station
operating expenses and depreciation and amortization was due to
the aforementioned radio and network acquisitions. The increase
in station operating income was primarily due to the inclusion of
the operating results of the aforementioned radio and network
acquisitions. At December 31, 1994, the radio segment included 33
stations for which the Company was the licensee and six stations
operated under time sales or time brokerage agreements, all of
which operated in twelve different markets.
TELEVISION
Net broadcasting revenue in 1994 increased 70% to $79,012,000
from $46,577,000. Station operating expenses in 1994 increased
60% to $38,054,000 compared to $23,736,000 for 1993. Station
operating income before depreciation and amortization in 1994
increased to $40,958,000 from $22,842,000, or 79%. Depreciation
and amortization increased 48% to $12,344,000 from $8,333,000.
Station operating income increased 97% to $28,614,000 in 1994
from $14,508,000 in 1993.
The majority of the increase in net broadcasting revenue was due
to the inclusion of the aforementioned television acquisitions in
1994 and 1993. Station operating expenses rose due to the
increase in selling expenses associated with these revenue
increases as well as the operating expenses of the new stations.
The major cause of the increase in depreciation and amortization
was the acquisition of tangible and intangible assets associated
with the purchase of the aforementioned television stations. At
December 31, 1994, the television segment included nine
television stations for which the Company was the licensee and
four stations which were operated under time sales or time
brokerage agreements, all of which operated in nine different
markets.
LIQUIDITY AND CAPITAL RESOURCES
The major sources of capital for the Company historically have
been cash flow from operations, advances on its revolving long-
term line of credit facility (the credit facility), and funds
provided by the initial stock offering in 1984 and subsequent
stock offerings in July 1991 and October 1993. Historically,
cash flow has exceeded earnings by a significant amount due to
the high amortization and depreciation associated with the
broadcasting industry.
Effective September 30, 1995, the Company refinanced the credit
facility, increasing the total funds available to $600,000,000.
This facility converts into a reducing revolving line
of credit on the last business day of September 1998, with
quarterly repayment of the outstanding principal balance to
begin the last business day of December 1998 and continue during
the subsequent five year period, with the entire balance to be
repaid by the last business day of September 2003.
During 1995, the Company used the credit facility to purchase
broadcasting assets (radio and television stations) and equity
interests in the broadcasting operations of ARN and Heftel.
Advances on the credit facility related to such purchases totaled
$162,600,000. The Company made principal payments on the credit
facility totaling $64,800,000.
During the first quarter of 1996, the Company purchased the
broadcasting assets of, and entered into a local marketing
agreement for, radio stations WOOD-AM/FM and WBCT-FM in Grand
Rapids, MI for approximately $42,000,000, using the credit
facility and cash flow from operations to fund the acquisition.
After giving effect to the above mentioned transaction subsequent
to December 31, 1995, the Company had $367,000,000 outstanding
under the credit facility, with $211,000,000 available for future
borrowings. Interest rates on most of these borrowings adjust
every 30 days. Based on the outstanding debt under the credit
facility at December 31, 1996, a 1% increase in interest rates
would result in a net after tax charge to the Company's earnings
of approximately $1,997,950. In addition, other notes payable
amounting to $12,570,026 were outstanding at December 31, 1995.
The Company also had $5,391,104 in unrestricted cash and cash
equivalents at December 31, 1995.
The Company expects that cash flow from operations in 1996 will
be sufficient to make all required interest and principal
payments on long- term debt.
CAPITAL EXPENDITURES AND PROGRAM COMMITMENTS
Capital expenditures of $15,110,000 during 1995 included
$3,806,000 and $1,437,000 for land and buildings, and
broadcasting equipment, respectively, for the radio segment and
$1,122,000 and $8,745,000 for land and buildings, and
broadcasting equipment, respectively, for the television segment.
Capital expenditures in 1994 in the amounts of $1,889,000 and
$3,858,000 for the radio and television segments, respectively,
were entirely for the purchase of broadcasting equipment. The
majority of the increase in capital outlays in 1995 for the
Company was attributable to the start-up of news departments at
two of the stations in the television segment and the purchase of
land and buildings in the radio segment.
Capital outlays are expected to increase very little in 1996,
reflective only of the growth in the number of radio and
television stations. As the operator of 16 television stations
and one sports network, the Company will continue to enter into
programming commitments to purchase the broadcast rights to
various feature films, syndicated shows, sports events and other
programming. Total commitments at December 31, 1995 were
$10,358,000. These commitments were not available for television
or radio broadcast at December 31, 1995 but are expected to
become available over the next few years, at which time
the commitments will be recorded. Most commitments will then be
payable over a period not exceeding five years.
The Company anticipates paying for these program commitments and
capital outlays with cash generated from operations. It
anticipates funding any subsequent radio and television station
acquisitions with the credit facility and cash flow generated
from operations.
OTHER
Accounting Pronouncement
In 1996, the Company will adopt Statement of Financial Accounting
Standards No. 121, Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to Be Disposed Of, which becomes
effective for the fiscal year ended December 31, 1996. The
adoption of this new accounting standard is not expected to have
a material impact on the Company.
Inflation
Inflation has affected the Company's performance in terms of
higher costs for wages, salaries and equipment. Although the
exact impact of inflation is indeterminable, the Company believes
it has offset these higher costs by increasing the effective
advertising rates of most of its radio and television stations.
1995 Financial Report
MANAGEMENT'S REPORT ON FINANCIAL STATEMENTS
The consolidated financial statements and notes related thereto
were prepared by and are the responsibility of management. The
financial statements and related notes were prepared in
conformity with generally accepted accounting principles and
include amounts based upon management's best estimates and
judgments.
It is management's objective to ensure the integrity and
objectivity of its financial data through systems of internal
controls designed to provide reasonable assurance that all
transactions are properly recorded in the Company's books and
records, that assets are safeguarded from unauthorized use, and
that financial records are reliable to serve as a basis for
preparation of financial statements.
The financial statements have been audited by our independent
auditors, Ernst & Young LLP, to the extent required by generally
accepted auditing standards 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 auditors and
management periodically to satisfy itself that they are properly
discharging their responsibilities. The independent auditors
have unrestricted access to the Board, without management
present, to discuss the results of their audit and the quality of
financial reporting and internal accounting controls.
Lowry Mays
President and Chief Executive Officer
Herbert W. Hill, Jr.
Vice President/Controller
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
SHAREHOLDERS AND BOARD OF DIRECTORS
CLEAR CHANNEL COMMUNICATIONS, INC.
We have audited the accompanying consolidated balance sheets of
Clear Channel Communications, Inc. and Subsidiaries (the Company)
as of December 31, 1995 and 1994, and the related consolidated
statements of earnings, changes in shareholders' equity and cash
flow for each of the three years in the period ended December 31,
1995. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion
on these financial statements based on our audits. The financial
statements of the Australian Radio Network Pty Ltd, a corporation
in which the Company has a 50% interest, have been audited by
other auditors whose report has been furnished to us; insofar as
our opinion on the consolidated financial statements relates to
data included for the Australian Radio Network Pty Ltd, it is
based solely on their report.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, based on our audits and the report of other
auditors, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated
financial position of Clear Channel Communications, Inc. and
Subsidiaries at December 31, 1995 and 1994, and the consolidated
results of their operations and their cash flows for each of the
three years in the period ended December 31, 1995, in conformity
with generally accepted accounting principles.
ERNST & YOUNG LLP
San Antonio, Texas
February 16, 1996
CONSOLIDATED BALANCE SHEETS
<TABLE>
ASSETS
December 31,
1995 1994
------------ ------------
<S> <C> <C>
Current Assets
Cash and cash equivalents $ 5,391,104 $ 6,817,595
Accounts receivable, less
allowance of $ 3,809,529
in 1995 and
$3,117,496 in 1994 52,920,450 38,280,518
Film rights - current 12,173,527 8,847,262
------------ ------------
Total Current Assets 70,485,081 53,945,375
Property, Plant and Equipment
Land 7,821,899 6,409,013
Buildings 17,068,026 10,642,563
Transmitter and studio
equipment 109,517,279 93,530,635
Furniture and other equipment 13,996,987 13,514,125
Leasehold improvements 4,560,289 4,059,725
Construction in progress 5,079,864 784,850
------------ ------------
158,044,344 128,940,911
Less accumulated depreciation 58,159,152 43,623,032
------------ ------------
99,885,192 85,317,879
Intangible Assets
Leases 1,455,000 1,455,000
Network affiliation
agreements 23,422,904 20,484,904
Licenses and goodwill 286,406,955 194,408,601
Covenants not-to-compete 22,871,932 22,271,938
Other intangible assets 4,361,987 2,858,436
------------ ------------
338,518,778 241,478,879
Less accumulated amortization 52,192,327 33,861,800
------------ ------------
286,326,451 207,617,079
Other
Restricted cash -- 38,500,000
Film rights 15,968,502 12,653,817
Equity investments in, and
advances to, nonconsolidated
affiliates 81,911,343 --
Other assets 7,021,531 7,998,036
Other investments 1,412,704 5,561,839
------------ ------------
Total Assets $563,010,804 $411,594,025
============ ============
</TABLE>
See Notes to Consolidated Financial Statements
<TABLE>
December 31,
-----------------------------------------------------------------
1995 1994
____________ ____________
CURRENT LIABILITIES
- --------------------
<S> <C> <C>
Accounts payable $ 5,314,716 $ 5,686,835
Accrued interest 508,271 741,490
Accrued expenses 7,760,002 3,928,738
Accrued income and
other taxes 5,906,580 3,308,586
Current portion of
long-term debt 3,406,297 4,584,335
Current portion of film
rights liability 13,109,024 9,428,591
------------ ------------
Total Current Liabilities 36,004,890 27,678,575
Long-Term Debt 334,163,729 238,204,386
Film Rights Liability 17,143,812 12,578,636
Deferred Income Taxes 5,552,835 2,599,223
Minority Interest 6,432,903 ---
SHAREHOLDERS' EQUITY
----------------------------------------------------------------
Preferred Stock, par value $1.00
per share, authorized 2,000,000
shares, no shares issued and
outstanding --- ---
Common Stock, par value $.10
per share, authorized
100,000,000 shares, issued
and outstanding 34,592,695
and 17,230,409 shares in
1995 and 1994, respectively 3,459,269 1,723,041
Additional paid-in capital 91,433,138 92,535,139
Retained earnings 68,359,190 36,345,575
Other 632,036 ---
Cost of shares (13,439 in 1995
and 5,082 in 1994) held in
treasury (170,998) (70,550)
------------ ------------
Total Shareholders' Equity 163,712,635 130,533,205
------------ ------------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $563,010,804 $411,594,025
============ ============
</TABLE>
See Notes to Consolidated Financial Statements
CONSOLIDATED STATEMENTS OF EARNINGS
<TABLE>
Year Ended December 31,
1995 1994 1993
------------ ------------ ------------
<S> <C> <C> <C>
Gross broadcasting
revenue $283,357,052 $200,694,908 $135,680,023
Less: agency and
national
representative
commissions 39,543,935 27,585,534 17,497,384
------------ ------------ ------------
Net broadcasting
revenue 243,813,117 173,109,374 118,182,639
Station operating
expenses 131,258,210 100,436,858 75,990,031
Depr. and
amortization 33,768,882 24,668,540 17,447,262
------------ ------------ ------------
Station operating
income 78,786,025 48,003,976 24,745,346
Corporate general and
administrative
expenses 7,414,457 5,099,834 3,463,523
Operating income 71,371,568 42,904,142 21,281,823
Interest expense 20,751,454 7,669,000 5,389,691
Other income
(expense)-net (803,280) 1,161,456 (196,482)
Equity in net income
of, and other
income from,
nonconsolidated
affiliates 2,927,191 -- --
------------ ------------ ------------
Income before income
taxes 52,744,025 36,396,598 15,695,650
Income taxes 20,730,410 14,387,102 6,572,434
------------ ------------ ------------
Net income $ 32,013,615 $ 22,009,496 $ 9,123,216
============ ============ ============
Net income per
common share $ .91 $ .63 $ .29
Weighted average
common and
common share
equivalents
outstanding 35,100,398 34,662,906 31,100,522
============ ============ ============
</TABLE>
See Notes to Consolidated Financial Statements
<TABLE>
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
Additional
Common paid-in Retained Treasury
Stock capital earnings Other stock Total
<S> <C> <C> <C> <C> <C> <C>
Balances at
January 1,
1993 $1,198,692 $26,986,856 $ 5,212,863 - ($2,343,642) $ 31,054,769
Net income for year 9,123,216 9,123,216
Exercise of stock
options 869 89,028 89,897
Stock split
effected in
the form of a
dividend 343,015 (343,015) --
Proceeds from
issuance of
1,725,000
shares of
Common
Stock 172,500 57,902,364 58,074,864
---------- ----------- ----------- -------- ----------- ------------
Balances at
December 31,
1993 1,715,076 84,635,233 14,336,079 - (2,343,642) 98,342,746
Net income for
year 22,009,496 22,009,496
Exercise of stock
options 1,168 2,805,735 (27,440) 2,779,463
Issuance of
119,048 shares
of Common Stock
to purchase
minority
interest 1,891,968 1,609,532 3,501,500
Issuance of
117,975 shares
of Common Stock
for a business
acquisition 6,797 3,202,203 691,000 3,900,000
---------- ----------- ----------- ------- ----------- ------------
Balances at
December 31,
1994 1,723,041 92,535,139 36,345,575 - (70,550) 130,533,205
Net income for
year 32,013,615 32,013,615
Exercise of
stock
options 7,209 627,018 (100,448) 533,779
Currency
translation
adjustment 102,292 102,292
Unrealized
holding
gains on
marketable
securities 529,744 529,744
Stock split 1,729,019 (1,729,019) --
---------- ----------- ----------- -------- ---------- ------------
Balances at
December
31,1995 $3,459,269 $91,433,138 $68,359,190 $632,036 ($170,998) $163,712,635
========== =========== =========== ======== ========== ============
</TABLE>
See Notes to Consolidated Financial Statements
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE> Year Ended December 31,
1995 1994 1993
------------ ------------ -----------
<S> <C> <C> <C>
Net Cash Flow From
Operating
Activities $ 64,330,005 $ 41,131,501 $ 27,780,463
Cash Flows From
Investing
Activities:
Decrease (increase)
in restricted
cash 38,500,000 (38,500,000) --
(Increase) in
equity investments
in and
advances to
nonconsolidated
affiliates-net (81,279,307) -- --
Purchases of
property,
plant and
equipment (15,109,896) (5,747,166) (2,691,743)
Proceeds from
disposal
of property,
plant and
equipment -- 130,047 109,175
Proceeds from
disposal
of broadcasting
assets 383,053 2,025,000 --
Acquisition of
broadcasting
assets (105,135,886) (127,427,369) (68,231,275)
Purchase of
minority
interest -- (4,000,000) --
(Increase)
decrease
in other
investments 4,149,136 (4,135,718) (525,068)
(Increase) in other
intangible
assets (1,870,183) (1,160,990) (333,050)
(Increase)
decrease in
other-net 691,503 (1,094,531) (2,427,534)
------------ ------------ ------------
Net cash
(used in)
investing
activities (159,671,580) (179,910,727) (74,099,495)
Cash Flows From Financing Activities:
Proceeds of
long-term
debt 162,600,000 165,100,000 63,400,000
Payments on
long-term
debt (64,800,000) (25,800,000) (72,500,000)
Payments of
current
maturities (4,418,695) (1,999,492) (18,954)
Exercise of
stock
options 533,779 2,779,463 89,897
Proceeds from
issuance
of Common
Stock -- -- 58,074,864
------------ ------------ ------------
Net cash provided
by financing
activities 93,915,084 140,079,971 49,045,807
------------ ------------ ------------
Net increase
(decrease)
in cash (1,426,491) 1,300,745 2,726,775
------------ ------------ ------------
Cash at beginning
of year 6,817,595 5,516,850 2,790,075
Cash at end of
year $ 5,391,104 $ 6,817,595 $ 5,516,850
============ ============ ============
</TABLE>
See Notes to Consolidated Financial Statements
SCHEDULE RECONCILING EARNINGS TO NET CASH FROM OPERATING
ACTIVITIES
<TABLE>
Year Ended December 31,
1995 1994 1993
------------ ------------ ------------
<S> <C> <C> <C>
Net income $ 32,013,615 $ 22,009,496 $ 9,123,216
Reconciling Items:
Depreciation 15,379,826 12,639,104 9,216,982
Amortization of
intangibles 18,389,056 12,029,436 8,230,280
Deferred taxes 2,953,612 188,059 68,001
Amortization of
film rights 11,262,835 9,857,530 5,935,921
Payments on film
liabilities (10,353,200) (10,037,749) (6,195,072)
(Gain) loss on
disposal
of assets 404,994 (598,863) 7,943
Changes in operating assets and liabilities:
(Increase) accounts
receivable (11,544,653) (8,408,540) (6,667,872)
Decrease federal
income tax
receivable - - 1,936,146
Increase (decrease)
accounts
payable (372,119) 1,151,467 1,751,352
Increase (decrease)
accrued
interest (233,219) 485,721 (203,634)
Increase (decrease)
accrued
expenses 3,831,264 (221,855) 2,548,202
Increase accrued
income and other
taxes 2,597,994 2,037,695 2,028,998
------------ ------------ ------------
Net cash from
operating
activities $ 64,330,005 $ 41,131,501 $ 27,780,463
============ ============ ============
</TABLE>
See Notes to Consolidated Financial Statements
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE A - SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation:
The consolidated financial statements include the accounts of the
Company and its subsidiaries, substantially all of which are
wholly-owned. Significant intercompany accounts have been
eliminated in consolidation. Investments in nonconsolidated
affiliates are accounted for under the equity method of
accounting. Certain amounts in prior years have been reclassified
to conform to the 1995 presentation.
Property, Plant and Equipment:
Property, plant and equipment are stated at cost. Depreciation is
computed principally by the straight-line method at rates which,
in the opinion of management, are adequate to allocate the cost
of such assets over their estimated useful lives, which are as
follows:
Buildings - 10 to 30 years
Transmitter and studio equipment - 7 to 15 years
Furniture and other equipment - 5 to 10 years
Leasehold improvements - generally life of lease
Expenditures for maintenance and repairs are charged to
operations as incurred, whereas expenditures for renewal and
betterments are capitalized.
Intangible Assets:
Intangible assets are stated at cost and are being amortized by
the straight-line method. For the years prior to 1993, excess
cost over the fair value of net assets acquired (goodwill) and
certain licenses were amortized between 25 and 40 years. All
goodwill and licenses acquired subsequent to 1992 are being
amortized over 25 years. The Company evaluates the carrying
values of goodwill and licenses to determine if the facts and
circumstances suggest that they may be impaired. If this review
indicates that goodwill and licenses will not be recoverable, as
determined based on the undiscounted cash flows of the entity
acquired over the remaining amortization period, the carrying
value of the goodwill and licenses will be reduced accordingly.
Amortization of goodwill and licenses was $9,918,585, $4,481,660
and $1,976,972 in 1995, 1994 and 1993, respectively.
Covenants not-to-compete are amortized over the respective lives
of the agreements. Network affiliation agreements are being
amortized over 10 years. Leases are amortized over the remaining
lease terms.
The periods of amortization are evaluated annually to determine
whether circumstances warrant revision.
Film Rights:
The capitalized costs of film rights are recorded when the
license period begins and the film rights are available for use.
The rights are amortized based on the number of showings or
license periods.
Unamortized film rights assets are classified as current or
noncurrent based on estimated usage. Amortization of film rights
is included in station operating expenses. Film rights
liabilities are classified as current or noncurrent based on
anticipated payments.
Barter Transactions:
Revenue from barter transactions is recognized when
advertisements are broadcast, and merchandise or services
received are charged to expense when received or used.
Income Taxes:
The Company accounts for income taxes using Statement of
Financial Accounting Standards No. 109, Accounting for Income
Taxes (SFAS 109). Under SFAS 109, income taxes for financial
reporting purposes are determined using the liability method.
Under this method, deferred tax assets and liabilities are
determined based on differences between financial reporting bases
and tax bases of assets and liabilities and are measured using
the enacted tax rates expected to apply to taxable income in the
periods in which the deferred tax asset or liability is expected
to be realized or settled.
Foreign Currency Gains and Losses:
Components of the Company's foreign currency gains and losses are
included in shareholders' equity, while other components are
included in the determination of net income for the period.
Foreign currency translation adjustments, which result from the
translation of financial statement information from Australian
dollars to U.S. dollars for the Company's investment in
Australian Radio Network Pty Ltd. (ARN), are accounted for as
a separate component of shareholders' equity. Transaction gains
or losses resulting from cash transactions between the Company
and ARN are recorded as income or expense as incurred. See Note I
for further discussion of the Company's equity investment in ARN.
During 1995, net translation gains or losses resulting from the
translation of ARN financial statement information from
Australian dollars to U.S. dollars in the reconciliation of
Australian accounting principles to accounting principles
generally accepted in the United States (U.S. GAAP) amounted to
$102,292, and net transaction gains amounted to $101,319.
Cash and Cash Equivalents:
Cash and cash equivalents include all highly liquid investments
with an original maturity of three months or less.
Financial Instruments:
The carrying amounts of the Company's financial instruments
approximate their fair value.
Use of Estimates:
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the amounts reported
in the financial statements and accompanying notes. Actual
results could differ from those estimates.
NOTE B - LONG-TERM DEBT
Long-term debt at December 31, 1995 and 1994 consisted of the
following:
<TABLE>
December 31,
1995 1994
<S> <C> <C>
Revolving long-term line of
credit facility payable to banks,
three years interest only through
September 1998, payable quarterly,
rate based upon prime, LIBOR or
Fed funds rate, at the Company's
discretion, principal to be paid
in full by September 2003, $275.0
million remains undrawn, secured by
100% of the Common Stock of the
Company's wholly owned
subsidiaries (1) $325,000,000 $227,200,000
Note payable to third party,
interest and principal due
October 1996, 6% interest,
guaranteed by a subsidiary 2,518,858 5,188,847
Notes payable to third parties,
interest paid quarterly, principal
due 1999 5.25% interest rate,
unsecured 2,700,000 2,700,000
Other long-term debt 7,351,168 7,699,874
------------ ------------
337,570,026 242,788,721
Less: current portion 3,406,297 4,584,335
------------ ------------
Total long-term debt $334,163,729 $238,204,386
============ ============
</TABLE>
(1) Principal repayment on the credit facility begins the last
business day of December 1998 and continues quarterly through the
last business day of September 2003, when the commitment must be
paid in full. Of the $275.0 million undrawn, $3.0 million is
unavailable due to the note payable to third party (including
interest) described above and $19.0 million is unavailable due to
several guarantees and letters of credit, as described in
Note I. This leaves $253.0 million available at December 31, 1995
for future borrowings under the credit facility.
The Company's current line of credit agreement with banks
contains certain covenants which substantially restrict, among
other matters, the payment of cash dividends.
Future maturities of long-term debt at December 31, 1995 are as
follows:
1996 $ 3,406,297
1997 1,207,111
1998 9,602,280
1999 42,641,838
2000 57,275,000
2001 and thereafter 223,437,500
------------
$337,570,026
============
Interest paid in 1995, 1994 and 1993 amounted to $20,984,673,
$7,183,279 and $5,593,325, respectively.
NOTE C - COMMITMENTS
The Company leases office space and certain broadcasting
facilities and equipment under long- term operating leases. Some
of the lease agreements contain renewal options and annual rental
escalation clauses (generally tied to the consumer price index or
a maximum of 5%), as well as provisions for the payment of
utilities and maintenance by the Company. As of December 31,
1995, the Company's future minimum rental commitments, under
noncancelable lease agreements with terms in excess of one year,
consist of the following:
1996 $ 2,849,252
1997 2,408,095
1998 2,098,871
1999 1,620,034
2000 1,103,663
2001 and thereafter 5,312,252
-----------
$15,392,167
===========
Rent expense charged to operations for 1995, 1994 and 1993 was
$4,510,413, $3,272,870 and $2,344,385, respectively. The
Company's film rights commitments and related film assets are
recorded on the earliest date the rights are available for
telecast. At December 31, 1995, the future payments on these film
rights liabilities are as follows:
1996 $13,109,024
1997 9,174,074
1998 5,670,702
1999 2,112,874
2000 185,096
2001 and thereafter 1,066
-----------
$30,252,836
===========
Commitments for additional film license agreements in the amount
of $7,515,749 have been executed. However, they are not included
in the amounts above because the programs were not available for
telecast as of December 31, 1995. In addition, commitments for
sports rights have been executed in the amount of $2,842,000 for
future radio and television broadcast of sporting events.
NOTE D - STOCK SPLITS AND DIVIDENDS
In October 1995, the Board of Directors authorized a two-for-one
stock split distributed on November 30, 1995 to stockholders of
record on November 15, 1995.
In February 1994 and 1993, the Board of Directors authorized
five-for-four stock splits in the form of 25 percent stock
dividends distributed on February 22, 1994 and February 19, 1993,
respectively, to stockholders of record on February 15, 1994 and
February 12, 1993, respectively.
A total of 17,290,188; 6,860,300 and 4,794,354 shares,
respectively, were issued in connection with the 1995, 1994 and
1993 stock splits. Fractional shares were paid in cash based on
the closing price on the record date. All share, per share, stock
price and stock option amounts shown in the financial statements
(except the balance sheet and statement of changes in
shareholders' equity) and related footnotes have been restated to
reflect the stock splits.
NOTE E - BUSINESS ACQUISITIONS AND DISPOSITIONS
During 1995, 1994 and 1993, the Company acquired substantially
all the broadcasting assets of the following radio stations,
television stations and news and agricultural networks, which
were all principally funded by borrowings under the credit
facility.
<TABLE>
Acquisition Network or
Date Station Location
<S> <C> <C>
1995 Acquisitions
January 1, 1995 KMJQ-FM Houston, TX
January 1, 1995 KPRC-AM/KSEV-AM
(2) Houston, TX
October 17, 1995 Voice of Southwest
Agriculture San Angelo, TX
October 31, 1995 WHP-TV Harrisburg, PA
October 31, 1995 WLYH-TV (1) Harrisburg, PA
1994 Acquisitions
January 14, 1994 KEBC-FM Oklahoma City, OK
February 28, 1994 KLRT-TV/KASN-TV(1) Little Rock, AR
March 9, 1994 WAXY-FM
(now WBGG-FM) Miami/Ft. Lauderdale, FL
August 15, 1994 KBXX-FM Houston, TX
October 12, 1994 Metroplex
Communications,
Inc. Miami/Ft. Lauderdale, FL;
Tampa, FL;
Cleveland, OH
November 1, 1994 WENZ-FM (1) Cleveland, OH
December 1, 1994 WXXA-TV Albany, NY
1993 Acquisitions
February 1, 1993 KQXT-FM San Antonio, TX
March 9, 1993 KHFI-FM Austin, TX
March 25, 1993 WYLD-AM/FM New Orleans, LA
July 1, 1993 KSJL-AM
(now KTKR-AM) San Antonio, TX
August 19, 1993 WLMT-TV (1) Memphis, TN
September 15, 1993 WRXL-FM, WRNL-AM Richmond, VA
(now WRVH-AM), Virginia
News Network
October 13, 1993 KITN-TV
(now WFTC-TV) Minneapolis, MN
November 3, 1993 KTFO-TV (1) Tulsa, OK
</TABLE>
(1) The Company operates these stations under time sales or time
brokerage agreements and does not own the FCC licenses.
(2) The Company issued 135,950 shares of Common Stock and
released 100,000 shares of treasury stock in conjunction with
this purchase.
(3) The Company acquired an 80% interest in these stations.
The following is a summary of the assets acquired and the
consideration given for the above stated acquisitions:
<TABLE>
1995 1994 1993
<S> <C> <C> <C>
Property, plant
and equipment $ 15,012,828 $ 26,385,571 $ 26,392,219
Accounts
receivable 3,095,279 5,334,476 2,466,089
Licenses, goodwill
and other
assets 93,716,385 113,444,182 56,497,812
------------ ------------ ------------
Total assets
acquired 111,824,492 145,164,229 85,356,120
Less:
Seller financing (1,400,000) -- --
Liabilities
assumed (5,288,606) (13,836,860) (17,124,845)
Common Stock
issued -- (3,900,000) --
------------ ------------ ------------
Cash paid on
acquisitions $105,135,886 $127,427,369 $ 68,231,275
============ ============ ============
</TABLE>
The results of operations for 1995, 1994, and 1993 include the
operations of each station, for which the Company purchased the
license, from the respective date of acquisition except for WRXL-
FM and WRNL-AM (now WRVH-AM), where the results of operations
were included since April 1, 1993 via a time brokerage agreement.
Assuming each of the acquisitions had occurred at January 1,
1993, unaudited pro forma consolidated results of
operations would have been as follows:
Pro Forma (Unaudited)
Year Ended December 31,
in thousands (except per share amounts)
1995 1994 1993
Net broadcasting revenue $252,884 $228,923 $192,358
Net income $ 34,719 $ 15,084 $ 15,172
Net income per share $ .99 $ .44 $ .49
The pro forma information above is presented in response to
applicable accounting rules relating to business acquisitions and
is not necessarily indicative of the actual results that would
have been achieved had each of the stations been acquired at the
beginning of 1993, nor is it indicative of future results of
operations.
In January 1995, the Company sold KYOK-AM and KHYS- FM in
Houston, TX and KALO-AM in Beaumont/Port Arthur, TX for
$2,475,000, $5,000,000 and $450,000, respectively, to a third
party, of which $350,000 was in cash and the remainder in notes
receivable. Of the resulting gain, approximately $324,000 is
included in other income, and the remaining $5,014,000 is
deferred. The net assets and operations of these stations were
not significant.
During 1994, the Company sold substantially all the broadcasting
assets of four radio stations. KEYN-FM and KQAM-AM in Wichita, KS
were sold for $2,000,000 to a third party, while KORA-FM and
KTAM-AM, in Bryan/College Station, TX, were sold to a former
employee for $25,000 in cash and $2,200,000 in notes receivable.
These transactions resulted in a net gain of approximately
$700,000 which is included in other income. Net assets and
operations of these four radio stations were not significant.
NOTE F - INCOME TAXES
Significant components of the provision for income taxes are as
follows:
1995 1994 1993
Current -
federal $16,084,974 $12,068,573 $5,519,762
Deferred 2,953,612 188,059 68,001
State 1,691,824 2,130,470 984,671
----------- ----------- ----------
Total $20,730,410 $14,387,102 $6,572,434
=========== =========== ==========
Significant components of the Company's deferred tax liabilities
and assets as of December 31, 1995 and 1994 are as follows:
1995 1994
Deferred tax
liabilities:
Tax over book
depreciation $6,658,528 $6,887,492
Film
amortization 778,366 747,854
Basis reduction of
acquired
assets 558,000 --
Other 326,600 362,495
Total deferred tax
liabilities 8,321,494 7,997,841
Deferred tax assets:
Gain on sale of
assets 360,895 342,008
Book over tax
amortization 2,270,963 2,726,763
Deferred income 136,801 197,603
NOL
carryforwards -- 1,933,980
Other -- 198,264
---------- ----------
Total deferred tax
assets 2,768,659 5,398,618
---------- -----------
Net deferred tax
liabilities $5,552,835 $2,599,223
========== ==========
The reconciliation of income tax computed at the U.S. federal
statutory tax rates to income tax expense is:
<TABLE>
1995 1994 1993
-------------------- -------------------- -------------------
Amount Percent Amount Percent Amount Percent
<S> <C> <C> <C> <C> <C> <C>
Income tax expense at
statutory
rates $18,460,409 35% $12,738,809 35% $5,493,477 35%
State income taxes,
net of federal
tax benefit 1,099,686 2% 1,384,806 4% 640,036 4%
Amortization of
goodwill 1,543,250 3% 461,261 1% 318,395 2%
Other, net (372,935) (197,774) 120,526 1%
----------- --- ----------- --- ---------- ---
$20,730,410 40% $14,387,102 40% $6,572,434 42%
</TABLE>
Income taxes paid in 1995, 1994 and 1993 amounted to $18,132,416,
$13,107,514 and $3,900,337, respectively. Federal income tax
refunds received in 1993 amounted to $1,639,245.
The Company acquired certain net operating loss carryforwards in
conjunction with its purchase of KLRT/KASN-TV and Metroplex
Communications, Inc. At December 31, 1995, the Company had no
remaining net operating loss carryforwards.
NOTE G - STOCK OPTIONS
At December 31, 1995, the Company had options outstanding to
purchase 764,102 shares and had reserved an additional 1,190,187
shares of the Company's Common Stock for future options. All
option plans contain anti-dilutive provisions that require the
adjustment of the number of shares of the Company's Common Stock
represented by each option for any stock splits or stock
dividends. This does not apply to the 1991 Non-Qualified Stock
Option Plan of the Company's wholly owned subsidiary, Clear
Channel Television, Inc. (CCTV), which authorizes the granting of
options on shares of CCTV Common Stock. A summary of the
Company's various option plans is as follows:
1984 STOCK OPTION PLAN
The Company's 1984 Stock Option Plan (1984 Plan) expired on
December 31, 1993. Options previously granted will continue to be
outstanding. The options on shares of the Company's Common Stock
under the plan were granted to officers and key employees at no
less than 100% of the fair market value of the underlying stock
on the date of the grant. Options under the 1984 Plan are valid
for a term not exceeding five years, and they are forfeited in
the event the employee terminates his or her employment with the
Company. As of January 1, 1995, options on 421,442 shares were
outstanding under the 1984 Plan (including the increase of
210,721 shares for the retroactive treatment of the 1995 stock
split).
During 1995, no new options were granted. Options on 131,877
shares were exercised at prices ranging from $1.99 to $5.32 and
options on 12,018 shares were forfeited.
As of December 31, 1995, options on 277,547 shares were
outstanding with exercise prices ranging from $2.88 to $12.75,
vesting dates ranging from February 6, 1994 to August 16, 1996
and expiration dates ranging from February 6, 1996 to August 16,
1998.
1994 STOCK OPTION PLAN
Effective February 2, 1994, the Company adopted the 1994
Incentive Stock Option Plan (1994 Plan) under which options to
acquire up to 750,000 shares of Common Stock may be granted.
Options under this plan are granted to officers and key employees
at no less than 100% of the fair market value of the underlying
stock on the date of the grant, for a term not exceeding five
years and are forfeited in the event the employee terminates his
or her employment with the Company.
As of January 1, 1995, options on 61,570 shares were outstanding
under the 1994 Plan (including the increase of 30,785 shares for
the retroactive treatment of the 1995 stock split).
During 1995, options on 11,112 shares were granted under the 1994
Plan, and options on 11,894 shares were forfeited. No options
were exercised, as the earliest vesting date under this plan is
February 2, 1997.
As of December 31, 1995, there were options on 689,212 shares
available for grant and options on 60,788 shares outstanding with
exercise prices ranging from $16.15 to $25.56, vesting dates
ranging from February 2, 1997 to February 8, 1998 and expiration
dates ranging from February 8, 2002 to February 8, 2000.
1994 NON-QUALIFIED STOCK OPTION PLAN
Effective February 2, 1994, the Company adopted the 1994 Non-
Qualified Stock Option Plan (1994 N.Q. Plan) under which options
to acquire up to 750,000 shares of Common Stock may be granted.
The options under this plan are granted to officers, directors
and employees of the Company and its affiliates at exercise
prices determined by the Compensation Committee on the date of
the grant. Options granted under the 1994 N.Q. Plan are granted
for a term not exceeding ten years and are forfeited in the event
the employee (director) terminates his or her employment
(relationship) with the Company
or its affiliates.
As of January 1, 1995, options on 175,000 shares were outstanding
under the 1994 N.Q. Plan (including the increase of 87,500 shares
for the retroactive treatment of the 1995 stock split). These
options on 175,000 shares include options granted to an
officer/director of the Company and the directors of the Company
to purchase 125,000 and 50,000 shares, respectively, of the
Company's Common Stock at an exercise price of $16.15, which
was equal to the fair market value of the stock at the date of
grant. The options granted to the officer/director are
exercisable immediately, while the options granted to the
directors vest 20% per year. All options granted in 1994 to the
officer/director and to the directors expire on February 2, 2004.
During 1995, no options were exercised, and options on 6,000
shares were forfeited. Also
during 1995, options on 80,025 shares of the Company's Common
Stock were granted to employees of the Company and its affiliates
at the fair market value of the stock at the respective dates of
grant.
As of December 31, 1995, there were options on 500,975 shares
available for grant and options on 249,025 shares outstanding
with exercise prices ranging from $16.15 to $41.38, vesting dates
ranging from February 2, 1994 to November 30, 2000 and expiration
dates ranging from February 2, 1996 to February 2, 2004.
OTHER STOCK OPTIONS GRANTED
During 1993, the Company issued an option to an officer/director
of the Company to purchase 114,242 shares of the Company's Common
Stock at an exercise price of $8.45, which was equal to the fair
market value of the stock at the date of grant.
In February 1993, the Company granted options to the directors to
purchase a total of 62,500 shares of the Company's Common Stock
at an exercise price of $8.32. These options vest 20% per year
and do not expire.
In February 1991, CCTV, a wholly owned subsidiary of the Company,
adopted the 1991 Non-Qualified Stock Option Plan which authorized
the granting of options to purchase 50,000 shares of CCTV Common
Stock. In February 1993, CCTV elected to discontinue the granting
of options under this plan. At December 31, 1995, there were
9,500 options outstanding under this plan, with an exercise date
of January 1, 1999.
In addition, in January 1994, an officer of CCTV exercised his
option to purchase 100,000 shares of CCTV's Common Stock at $1.00
per share. In July 1994, the Board of Directors authorized the
Company to purchase the 100,000 CCTV shares from said officer. As
consideration, the Company paid $4,000,000 in cash and issued
238,096 shares (adjusted for the Company's 1995 two-for-one stock
split) of the Company's Common Stock out of
Treasury. The Company recorded this transaction as an acquisition
(and elimination) of the minority interest in CCTV, with the
resulting excess cost allocated to goodwill.
NOTE H - EMPLOYEE BENEFIT PLANS
Effective March 1, 1987, the Company adopted the Clear Channel
Communications, Inc. 401(K) Savings Plan for the purpose of
providing retirement benefits for substantially all employees.
Contributions to the Plan are made both by the employees and the
Company. The Company matches 35% of the first 5% of an employee's
deferred compensation to a maximum of $9,240 in 1995. Company
matched contributions vest to the employees based upon their
years of service to the Company. Contributions to this Plan of
$461,038, $398,369 and $292,814 were charged to expense for 1995,
1994 and 1993, respectively.
The Company does not offer or provide post- retirement health
care benefits to any of its
employees.
NOTE I - INVESTMENTS
On May 24, 1995, the Company purchased 21.4% of the outstanding
common stock of Heftel Broadcasting Corporation (Heftel) a
Spanish-language radio broadcaster in the United States. On May
11, 1995, the Company purchased a 50% interest in ARN, an
Australian company which owns and operates radio stations, a
narrowcast radio broadcast service and a radio representation
company in Australia.
These investments are not consolidated, but are accounted for
under the equity method of accounting, whereby the Company
records its investments in these entities in the balance sheet as
"Equity investments in, and advances to, nonconsolidated
affiliates." The Company's interest in the operations of Heftel
and ARN are recorded in the income statement as "Equity in net
income of, and other income from, nonconsolidated affiliates."
The Company's $285,451 equity in net income of Heftel recorded
for the period May 24 to December 31, 1995 is calculated as 21.4%
of the net income reported by Heftel for the two quarters ended
June 30, 1995 and September 30, 1995, with a pro rata allocation
applied to the quarter ended June 30, 1995 based on the number of
days during that quarter that the Company held its investment.
The Company's $2,911,765 equity in the net income of, and other
income from, ARN for the period May 11 to December 31, 1995 is
determined by reconciling ARN's net income for that period under
Australian accounting principles (Australian GAAP) to net income
under accounting principles generally accepted in the United
States (U.S. GAAP), plus the interest income and management fees
totaling $1,252,851 and $148,100, respectively, paid by ARN to
the Company.
The following table presents a rollforward of the Company's
investments in ARN and Heftel.
ARN Heftel Total
At acquisition
date $74,838,980 $20,498,612 $95,337,592
Dividends and
other returns
of investment
received (17,086,795) -- (17,086,795)
Equity in net
income of,
and other
income from,
nonconsolidated
affiliate 2,911,765 285,451 3,197,216
Amortization of
excess cost,
included in
equity in net
income -- (270,025) (270,025)
Currency
translation
adjustments 102,292 -- 102,292
Foreign currency
transaction
gains 101,319 -- 101,319
Unrealized gains on
marketable
securities 529,744 -- 529,744
----------- ----------- -----------
End of year $61,397,305 $20,514,038 $81,911,343
=========== =========== ===========
The following table presents selected financial information for
ARN for the period from May 11 to December 31, 1995 - the period
during which the Company held its investment in ARN. For
convenience purposes only, data for ARN have been translated from
Australian dollars to U.S. dollars at the December 31, 1995
exchange rate.
ARN in Australian GAAP
Balance sheet information at December 31, 1995:
Current assets $ 22,600,044
Noncurrent assets 134,875,697
Current liabilities 27,726,534
Noncurrent liabilities 44,246,707
Shareholders' equity 85,502,500
Income statement information for period investment held in 1995:
Net broadcasting revenues 45,938,169
Station operating expenses 32,240,125
Net income 14,288,682
The Company's equity in net income of ARN, which is based on U.S.
GAAP, is not directly comparable to net income reported by ARN,
which is based on Australian GAAP. The most significant
differences in accounting treatment between U.S. and Australian
GAAP all decrease net income under U.S. GAAP. Such differences
include radio license amortization in the amount of $3,024,171,
reversal of profit on sale of stations within one year of
acquisition in the amount of $6,347,773 and the reversal of
certain restructuring reserves capitalized under Australian GAAP
in the amount of $1,915,250.
During February 1994, the Company exercised its option to acquire
the remaining 51% of the Common Stock of its 49% owned
unconsolidated subsidiary Clear Channel Television of Little
Rock, Inc. (CCTLR) for a nominal amount of $510 from an officer
and director. CCTLR owned and operated KLRT-TV and KASN-TV in
Little Rock, AR. Total assets of this subsidiary amounted to
$17,146,000; current and long-term debt amounted to $21,833,000;
and the deficiency in assets was $5,240,000. Also, during
February 1994, the Company loaned CCTLR $18,900,000 in order that
CCTLR could settle its obligation with its principal creditor.
Upon consummation of these transactions, the Company began
consolidating CCTLR on March 1, 1994.
In addition, during 1995, 1994 and 1993, the Company provided
approximately $10,000,000, $2,200,000 and $2,600,000,
respectively, in financing to third parties, which was used to
effect the acquisition of radio and television broadcasting
operations. The financing provided in 1995 was in the form of a
$9,500,000 guarantee of debt and a $500,000 cash advance secured
by an option to purchase the broadcasting assets of a certain
television station at a nominal amount. The financing provided in
1994 and 1993 was in the form of a loan to former employees
secured by the broadcasting assets of certain radio stations. The
Company has no voting or equity interest in the third parties.
The Company is accounting for these transactions in a manner
similar to the equity method, the effect of which was not
significant for the years ended December 31, 1995, 1994 or
1993. The total amount of $4,697,000 due to the Company at
December 31, 1995 under these arrangements is included in other
assets.
NOTE J - CONTINGENCIES
From time to time, claims are made and lawsuits are filed against
the Company, arising out of the ordinary business of the Company.
In the opinion of the Company's management, liabilities, if any,
arising from these actions are either covered by insurance or
adequate reserves, or would not have a material adverse effect on
the financial condition of the Company.
NOTE K - SUBSEQUENT EVENTS
During the first quarter of 1996, the Company acquired the
broadcasting assets of radio stations WOOD-AM/FM and WBCT-FM in
Grand Rapids, Michigan. As consideration, the Company paid
approximately $42,000,000. Financing was provided by the credit
facility and cash flow from operations.
NOTE L - SEGMENT DATA
The Company consists of two principal business segments - radio
broadcasting and television broadcasting. At December 31, 1995,
the radio segment included 36 stations for which the Company is
the licensee and seven stations operated under lease management
or time brokerage agreements. These 43 stations operate in 12
different markets. The radio segment also operates five networks.
At December 31, 1995, the television segment included ten
television stations for which the Company is the licensee and six
stations which are operated under lease management or time
brokerage agreements. These 16 stations operate in ten different
markets. Substantially all revenues represent income from
unaffiliated companies.
<TABLE>
1995 1994 1993
<S> <C> <C> <C>
RADIO
Net broadcasting
revenue $141,737,053 $ 94,097,668 $ 71,605,141
Station operating
expenses 85,023,929 62,383,246 52,254,074
Depreciation 6,973,801 5,664,700 4,605,256
Amortization of
intangibles 13,007,026 6,659,726 4,508,583
------------ ------------ ------------
Station operating
income 36,732,297 19,389,996 10,237,228
============ ============ ============
Total identifiable
assets 340,684,912 244,296,718 114,684,055
============ ============ ============
Capital
expenditures 5,242,553 1,888,787 1,616,617
============ ============ ============
TELEVISION
Net broadcasting
revenue 102,076,064 79,011,706 46,577,498
Station operating
expenses 46,234,281 38,053,612 23,735,957
Depreciation 8,406,025 6,974,404 4,611,726
Amortization of
intangibles 5,382,030 5,369,710 3,721,697
------------ ------------ ------------
Station operating
income 42,053,728 28,613,980 14,508,118
============= ============ ============
Total identifiable
assets 222,325,892 167,297,307 112,892,486
Capital
expenditures 9,867,343 3,858,379 1,075,126
============= ============ ============
CONSOLIDATED
Net broadcasting
revenue 243,813,117 173,109,374 118,182,639
Station operating
expenses 131,258,210 100,436,858 75,990,031
Depreciation 15,379,826 12,639,104 9,216,982
Amortization of
intangibles 18,389,056 12,029,436 8,230,280
Station operating
income 78,786,025 48,003,976 24,745,346
============ ============ ============
Total identifiable
assets 563,010,804 411,594,025 227,576,541
============ ============ ============
Capital
expenditures 15,109,896 5,747,166 2,691,743
============ ============ ============
</TABLE>
See Note I for discussion of nonconsolidated equity investees
NOTE M - QUARTERLY RESULTS OF OPERATIONS (Unaudited)
<TABLE>
March 31, June 30, September 30, December 31,
1995 1994 1995 1994 1995 1994 1995 1994
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Gross
broadcasting
revenue $58,646,216 $38,871,413 $72,342,267 $48,110,302 $68,130,871 $47,573,068 $84,237,698 $66,140,125
=========== =========== =========== =========== =========== =========== =========== ===========
Net
broadcasting
revenue 50,476,379 33,917,189 62,047,364 41,444,716 58,661,201 41,009,946 72,628,173 56,737,523
Station
operating
expenses 31,800,664 22,020,153 32,471,374 23,690,102 30,727,392 23,767,486 36,258,780 30,959,117
Depreciation
and
amortization 8,399,455 5,479,616 8,165,573 5,785,149 8,018,075 6,189,146 9,185,779 7,214,629
----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
Station
operating
income 10,276,260 6,417,420 21,410,417 11,969,465 19,915,734 11,053,314 27,183,614 18,563,777
Corporate
expenses 1,530,324 1,231,337 1,585,898 1,061,724 1,608,243 1,092,338 2,689,992 1,714,435
----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
Operating
income 8,745,936 5,186,083 19,824,519 10,907,741 18,307,491 9,960,976 24,493,622 16,849,342
Interest
expense (4,447,973) (1,203,843) (5,214,279) (1,712,075) (5,559,145) (1,845,578) (5,530,057) (2,907,504)
Other income
(expenses) 258,580 (455,943) (241,341) 697,066 (98,095) 650,064 (722,424) 270,269
Equity in
earnings of
nonconsolidated
affiliates 0 0 478,186 0 1,337,233 0 1,111,772 0
---------- ----------- ----------- ----------- ----------- ---------- ----------- -----------
Income before
income
taxes 4,556,543 3,526,297 14,847,085 9,892,732 13,987,484 8,765,462 19,352,913 14,212,107
Income taxes 1,877,377 1,479,348 5,709,243 3,821,243 5,874,076 3,342,051 7,269,714 5,744,460
----------- ---------- ----------- ----------- ----------- ---------- ----------- -----------
Net income $2,679,166 $2,046,949 $ 9,137,842 $ 6,071,489 $ 8,113,408 $5,423,411 $12,083,199 $8,467,647
=========== =========== =========== =========== =========== ========== =========== ==========
Net income
per common
share (1) $0.08 $0.06 $0.26 $0.18 $0.23 $0.16 $0.34 $0.24
=========== =========== =========== =========== =========== =========== =========== ==========
Weighted
average
common shares
outstanding(1)
35,039,024 34,409,378 35,055,968 34,425,888 35,102,458 34,676,440 35,126,109 34,983,926
========== =========== =========== =========== =========== =========== =========== ===========
Stock price: (1)
High $30.2500 $20.1875 $34.7500 $19.5625 $40.8750 $26.0000 $44.1250 $25.8750
Low 25.0625 15.8500 26.8750 16.1875 30.8125 18.0625 36.2500 20.6250
</TABLE>
(1) Adjusted for two-for-one stock split declared by Board of Directors
in October 1995.
The Company's Common Stock was traded on the American Stock Exchange until
November 4, 1994 under the symbol CCU. Subsequent thereto, the stock is
traded on the New York Stock Exchange under the symbol CCU.
Selected Financial Data Year ended December 31,
<TABLE>
Results of operations
information 1995(5) 1994(4) 1993(3) 1992(2) 1991(1)
<S> <C> <C> <C> <C> <C>
Gross broadcasting revenue $283,357 $200,695 $135,680 $ 94,472 $74,142
======== ======== ======== ======== =======
Net broadcasting revenue 243,813 173,109 118,183 82,205 64,384
Station operating expenses 131,258 100,437 75,990 53,532 44,981
Depreciation and amortization 33,770 24,668 17,447 12,253 7,641
-------- -------- -------- -------- -------
Station operating income 78,785 48,004 24,746 16,420 11,762
Corporate expenses 7,414 5,100 3,464 2,890 2,403
-------- -------- -------- -------- -------
Operating income 71,371 42,904 21,282 13,530 9,359
Interest expense (20,751) (7,669) (5,390) (4,739) (5,371)
Other income (expense) (803) 1,161 (196) (1,217) (1,483)
Equity in net income of, and other income from,
nonconsolidated affiliates 2,927 0 0 0 0
-------- -------- -------- -------- -------
Income (loss) before income taxes 52,744 36,396 15,696 7,574 2,505
Income taxes 20,730 14,387 6,573 3,281 1,379
-------- -------- -------- -------- -------
Net income $ 32,014 $ 22,009 $ 9,123 $4,293 $ 1,126
======== ======== ======== ========= =======
Net income per common share(1) $ 0.91 $ 0.63 $ 0.29 $ 0.14 $ 0.04
======== ======== ======== ======== =======
Weighted average common shares
outstanding(1) 35,100 34,662 31,100 29,660 25,976
Cash dividends per share (1) - - - - -
======== ======== ======== ======== =======
Balance Sheet Data:
Current assets $ 70,485 $ 53,945 $ 38,191 $ 24,844 $20,521
Property, plant and equipment -
net 99,885 85,318 67,750 48,017 27,169
Total assets 563,011 411,594 227,577 146,993 92,450
Current liabilities 36,005 27,679 26,125 10,073 9,960
Long-term debt, net of current
maturities 334,164 238,204 87,815 97,000 48,110
Shareholders' equity 163,713 130,533 98,343 31,055 24,787
</TABLE>
(1) All per share amounts have been adjusted to reflect stock
splits issued on the following dates and in the following ratios:
Date of Split Ratio of Split
November 1995 two-for-one
February 1994 five-for-four
February 1993 five-for-four
February 1992 five-for-four
(2) Includes eleven months' results of operations of the
Kentucky News Network, nine months' results of operations of
WPTY-TV, eight months' results of operations of WKCI-FM and WAVZ-
AM and six months' results of operations of KEYN-FM, KQAM-AM,
WRVA-AM, WRVQ-FM and WRBQ-AM/FM - all acquired in 1992.
(3) Includes eleven months' results of operations of KQXT-FM,
ten months' results of operations of KHFI-FM, nine months'
results of operations of WYLD-AM/FM, WRXL-FM, WRNL-AM (now WRVH-
AM) and the Virginia News Network, six months' results of
operations of KSJL-AM (now KTKR-AM), four and one half months'
results of operations of WLMT-TV, three months' results of
operations of KITN-TV (now WFTC-TV) and two months' results of
operations of KTFO-TV - all acquired in 1993.
(4) Includes twelve months' results of operations of KEBC-FM,
ten months' results of operations of WAXY-FM (now WBGG-FM) and
KLRT-TV and KASN-TV, four and one half months' results of
operations of KBXX-FM, two and one half months' results of
operations of Metroplex Communications, Inc., two months' results
of operations of WENZ-FM and one months' results of operations of
WXXA-TV - all acquired in 1994.
(5) Includes twelve months' results of operations of KMJQ-FM,
KPRC-AM, and KSEV-AM, two and one half months' results of
operations of VSA and two months' results of operations of WHP-TV
and WLYH-TV - all acquired in 1995.
Corporate Officers
Lowry Mays
President / Chief Executive Officer
Mark P. Mays
Senior Vice President / Operations
Herbert W. Hill, Jr.
Vice President / Controller
Randall Mays
Vice President / Treasurer
Kenneth E. Wyker
Vice President / Legal Affairs
Board of Directors
Lowry Mays
President / Chief Executive Officer
Alan D. Feld
Partner: Akin, Gump, Strauss, Hauer and Feld
Red McCombs
Private Investor
Theodore H. Strauss*
Senior Managing Director: Bear, Stearns & Co., Inc.
John H. Williams*
Senior Vice President: Everen Securities, Inc.
*member of the audit committee
Radio
James D. Smith
Regional Vice President
Oklahoma
Miles Chandler
Vice President
Oklahoma City
Robert T. Cohen
Vice President
San Antonio
Linda Forem
Vice President
Richmond
Carl Hamilton
Vice President
Houston
Ernest Jackson
Vice President
Houston
Earnest James
Vice President
New Orleans
Betty Kocurek
Vice President
San Antonio
Kevin Malone
Vice President
Tampa
David Manning
Vice President
Tampa
Carl McNeill
Vice President
Richmond
Dan Patrick
Vice President
Houston
David Ross
Vice President
Miami
Robert R. Scherer
Vice President
Louisville
Walt Tiburski
Vice President
Cleveland
Stan Webb
Vice President
Austin
Tim West
Vice President
Oklahoma City
Faith Zila
Vice President
New Haven
Television
W. Ripperton Riordan
Executive Vice President /
Chief Operating Officer
Minneapolis
David Bird
Vice President
Minneapolis
Hal Capron
Vice President
Tulsa
Andy Comegys
Vice President
Mobile/Pensacola
David D'Antuono
Vice President
Albany
John Feeser
Vice President
Harrisburg
Jack Jacobson
General Manager
Tucson
Josh McGraw
Vice President
Jacksonville
Jack Peck
Vice President
Memphis
Steve Spendlove
Vice President
Wichita
Jerry Whitener
Vice President
Little Rock
Australia
Nigel Milan
Chief Executive Officer
Sydney
Rhys Holleran
General Manager
Melbourne
Graham Miles
General Manager
Sydney
Rob Molhoek
General Manager
Albury/Wodonga
John Hamilton
Chief Financial Officer
Sydney
Stephen Pead
General Manager
Canberra
Peter Verhoeven
General Manager
Brisbane
John Williams
General Manager
Sydney
Transfer Agent and Registrar
Bank of New York
101 Barclay Street
22 Floor West
New York, NY 10286
Independent Auditors
Ernst & Young, LLP
San Antonio, Texas
A copy of the Company's Annual Report on Form 10-K filed with the
Securities and Exchange Commission may be obtained without charge
upon written request to:
Herbert W. Hill, Jr.
Vice President
Clear Channel Communications, Inc.
P.O. Box 659512
San Antonio, Texas
78265-9512
Annual Meeting of Shareholders
The annual meeting of shareholders will be held at 200 Concord
Plaza on the 5th Floor in the Conference Room, San Antonio,
Texas, on Thursday, April 25, 1996, at 11 a.m.
Clear Channel Communications, Inc.
Mailing Address
P.O. Box 659512
San Antonio, Texas
78265-9512
Corporate Address:
200 Concord Plaza
Suite 600
San Antonio, Texas
78216-6940
210.822.2828
[facsimile 210.822.2299]
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused
this report to be signed on its behalf by the undersigned on
April 16, 1996, thereunto duly authorized.
Clear Channel
Communications, Inc.
(Registrant)
By: Herbert W. Hill, Jr.
- -------------------------
Herbert W. Hill, Jr.
Vice President and Controller
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons
on behalf of the Registrant in the capacities and on the date
indicated.
Signature Title Date
Herbert W. Hill, Jr. Vice President/Controller April 16, 1996
- --------------------
Herbert W. Hill, Jr. (Principal Financial Officer)
