<PAGE> 1
Filed pursuant to Rule 424(b)(1)
Registration No. 333-04581
3,500,000 SHARES
LOGO CLEAR CHANNEL COMMUNICATIONS, INC.
COMMON STOCK
------------------------
All of the shares of Common Stock offered hereby are being sold by Clear
Channel Communications, Inc. (the "Company"). The Common Stock of the Company is
traded on the New York Stock Exchange under the symbol "CCU". On June 13, 1996,
the last reported sale price of the Common Stock was $84.25 per share. See
"Price Range of Common Stock."
------------------------
SEE "RISK FACTORS" BEGINNING ON PAGE 8 FOR A DISCUSSION OF CERTAIN MATTERS
THAT SHOULD BE CONSIDERED BY PROSPECTIVE INVESTORS.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
================================================================================
UNDERWRITING
PRICE TO DISCOUNTS AND PROCEEDS TO
PUBLIC COMMISSIONS(1) COMPANY(2)
<S> <C> <C> <C>
- --------------------------------------------------------------------------------
Per Share............. $84.00 $3.05 $80.95
- --------------------------------------------------------------------------------
Total(3).............. $294,000,000 $10,675,000 $283,325,000
================================================================================
</TABLE>
(1) See "Underwriting" for information relating to the indemnification of the
Underwriters.
(2) Before deducting expenses payable by the Company estimated at $500,000.
(3) The Company has granted to the Underwriters a 30-day option to purchase up
to 350,000 additional shares of Common Stock solely to cover
over-allotments, if any. If such option is exercised in full, the total
Price to Public, Underwriting Discounts and Commissions and Proceeds to
Company will be $323,400,000, $11,742,500 and $311,657,500, respectively.
See "Underwriting."
------------------------
The shares of Common Stock are offered by the several Underwriters, subject
to prior sale, when, as and if delivered to and accepted by them, and subject to
the right of the Underwriters to reject any order in whole or in part. It is
expected that delivery of the Common Stock will be made at the offices of Alex.
Brown & Sons, Incorporated, Baltimore, Maryland, on or about June 19, 1996.
ALEX. BROWN & SONS
INCORPORATED
CS FIRST BOSTON
GOLDMAN, SACHS & CO.
LEHMAN BROTHERS
THE DATE OF THIS PROSPECTUS IS JUNE 14, 1996
<PAGE> 2
[ARTWORK]
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK OF
THE COMPANY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK STOCK EXCHANGE OR
OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
DURING THIS OFFERING, CERTAIN PERSONS AFFILIATED WITH PERSONS PARTICIPATING
IN THE DISTRIBUTION MAY ENGAGE IN TRANSACTIONS FOR THEIR OWN ACCOUNTS OR FOR THE
ACCOUNTS OF OTHERS IN THE COMMON STOCK PURSUANT TO EXEMPTIONS FROM RULES 10B-6,
10B-7 AND 10B-8 UNDER THE SECURITIES EXCHANGE ACT OF 1934.
2
<PAGE> 3
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more detailed
information and financial statements, including notes thereto, appearing in the
documents incorporated by reference into this Prospectus. All information set
forth herein has been adjusted to reflect five-for-four stock splits in February
1992, February 1993, and February 1994, and a two-for-one stock split in
November 1995. Unless otherwise indicated, the information in this Prospectus
assumes no exercise of the Underwriters' over-allotment option. See
"Underwriting."
THE COMPANY
Clear Channel Communications, Inc. (the "Company"), which began operations
in 1972, is a diversified broadcasting company that currently owns or operates
72 radio stations and 16 television stations in 27 domestic markets. In
addition, the Company owns a 50% equity interest in the Australian Radio Network
Pty. Ltd. ("ARN"), which operates eight radio stations in Australia, and a 21.3%
equity interest in Heftel Broadcasting Corporation (NASDAQ:HBCCA) ("Heftel"), a
leading domestic Spanish-language broadcaster which operates 11 AM and six FM
radio stations in six domestic markets. The Company currently has acquisitions
pending for 33 radio stations, including nine stations which the Company
currently operates under Local Marketing Agreements ("LMA") or Joint Sales
Agreements ("JSA"), and one television station in 14 domestic markets. The
Company has also commenced a stock purchase and tender offer for the remaining
shares of Heftel. After completing the pending acquisitions, the stock purchase
and tender offer for Heftel and the divestiture of one station, the Company will
own or operate 44 AM and 68 FM radio stations and 17 television stations in 37
domestic markets.
The 28 AM and 44 FM radio stations currently owned or operated by the
Company are principally located in the South, Southwest, Northeast and Midwest.
These radio stations employ a wide variety of programming formats, such as
News/Talk/Sports, Country, Adult Contemporary, Urban and Album Rock. The 16
television stations currently owned or operated by the Company are located in
the South, Southwest, New York, Pennsylvania and Minnesota. Six of these
television stations are affiliated with the FOX television network; seven are
affiliated with the UPN television network; one is affiliated with the ABC
television network; one is affiliated with the NBC television network; and one
is affiliated with the CBS television network. Additionally, the Company
operates five radio networks serving Oklahoma, Texas, Iowa, Kentucky, Virginia
and New Mexico. In 1995, the Company derived approximately 58% of its net
broadcasting revenue from radio operations and approximately 42% from television
operations.
The diversity of the Company's radio and television stations and markets,
combined with the Company's successful acquisition and operating strategies,
have enabled the Company to achieve consistent growth in revenue and cash flow.
Since 1991, the Company has achieved compounded annual growth rates of
approximately 39% in net broadcasting revenue, approximately 55% in broadcast
cash flow (defined as station operating income before depreciation, amortization
and corporate expenses) and approximately 66% in after-tax cash flow (defined as
net income plus depreciation, amortization of intangibles (including
non-consolidated affiliates) and deferred taxes).
On February 8, 1996, the Telecommunications Act of 1996 (the "1996 Act")
was signed into law. The 1996 Act represents the most sweeping overhaul of the
country's telecommunications laws since the Communications Act of 1934. The 1996
Act relaxes the broadcast ownership rules and simplifies the process for renewal
of broadcast station licenses. Accordingly, the Company has acted to capitalize
on the opportunities provided by the 1996 Act. Since the 1996 Act became
effective, the Company has closed or entered into agreements to acquire
approximately $580,970,000 of broadcast properties.
3
<PAGE> 4
The Company's strategy is to identify and acquire under-performing stations
on favorable terms and to utilize management's extensive operating experience to
improve the performance of such stations as well as its existing stations
through effective programming, reduction of costs and aggressive promotion,
marketing and sales. In addition, the Company employs a marketing strategy that
emphasizes direct sales to local customers rather than through advertising
agencies and other intermediaries. The Company believes that this focus has
enabled its stations to achieve market revenue shares exceeding their audience
shares.
The Company's radio strategy is to continue to capitalize on the 1996 Act
by attempting to assemble and operate a cluster of radio stations in each of its
principal markets. The Company believes that by controlling a larger share of
the total advertising inventory in a particular market, it can offer advertisers
attractive packages of advertising options while maintaining rate integrity. The
Company also believes that its cluster approach will allow it to operate its
stations with more highly skilled local management teams and eliminate
duplicative operating and overhead expenses. The Company's television strategy
is to own and operate one station in each of its markets and to operate an
additional station under an LMA in each such market. In six of its television
markets, the Company operates an additional television station under an LMA. The
1996 Act should allow the continuation or renewal of these television LMAs. See
"Business -- Federal Regulation of Television and Radio Broadcasting."
RECENT DEVELOPMENTS
Since the enactment of the 1996 Act, the Company has completed the
acquisition of 23 radio stations for $202,550,000, for properties in three
existing markets and six new markets. In addition, the Company has entered into
definitive agreements to acquire 33 radio stations and one television station in
ten existing and five new markets for approximately $378,420,000. There can be
no assurances that such pending acquisitions will be consummated. All such
domestic acquisitions are subject to Federal Communications Commission ("FCC")
approval, which the Company does not have at this time. Certain of such pending
acquisitions may also be subject to other regulatory approvals and other
conditions.
COMPLETED ACQUISITIONS
- In May 1996, the Company acquired all of the common stock of US Radio,
Inc. ("US Radio"), for approximately $142,500,000. US Radio owns or
operates 13 FM and five AM stations in eight domestic markets.
- In May 1996, the Company acquired radio stations WTVR-AM/FM in Richmond,
Virginia, from Park Broadcasting of Virginia, Inc., for approximately
$18,000,000.
- In February 1996, the Company acquired substantially all of the operating
assets of WOOD-AM/FM and WBCT-FM in Grand Rapids, Michigan; the remaining
assets, including the FCC license, were acquired in May 1996 from WOOD
Radio Limited Partnership. The total amount of the acquisition was
approximately $42,050,000.
PENDING ACQUISITIONS
- In May 1996, the Company entered into a definitive agreement to purchase
15 FM and four AM radio stations in eight U.S. markets from a group of
general partnerships referred to herein collectively as Radio Equity
Partners ("REP") for approximately $240,000,000. The Company's
acquisition of the various REP stations will enhance the Company's
broadcasting presence in New Orleans, Louisiana; Memphis, Tennessee;
Oklahoma City, Oklahoma; and Providence, Rhode Island and it will
introduce the Company into new markets in Greensboro, North Carolina;
Springfield, Massachusetts; Columbia, South Carolina; and Ft.
Myers/Naples, Florida.
4
<PAGE> 5
- In May 1996, US Radio entered into definitive agreements to acquire radio
stations KJMS-FM and KWAM-AM in Memphis, Tennessee, and WTCD-FM in
Raleigh, North Carolina, for approximately $20,000,000.
- In May 1996, the Company entered into a definitive agreement to acquire
radio stations WCUZ-AM/FM in Grand Rapids, Michigan, and KQLL-AM/FM and
KOAS-FM in Tulsa, Oklahoma, from Federated Media for approximately
$15,400,000.
- In May 1996, the Company entered into a definitive agreement to acquire
radio stations WTFX-FM and WWKY-AM in Louisville, Kentucky, from SFX
Broadcasting for approximately $6,882,000.
- In May 1996, the Company entered into a definitive agreement to acquire
the intellectual property and intangible assets, excluding the FCC
license, of WHKW-FM and all of the assets of WHKW-AM (now WKJK-AM) in
Louisville, Kentucky for $2,000,000.
- In April 1996, the Company entered into a definitive agreement to acquire
WPRI-TV in Providence, Rhode Island, from CBS, Inc. for approximately
$68,000,000.
- In April 1996, the Company formed New Zealand Radio Network ("NZRN") as a
joint venture with two equal partners. NZRN acquired all of the stock of
Radio New Zealand Commercial from the Government of New Zealand. The
Company's one-third share of the total NZ$89,000,000 investment in NZRN
will be approximately $20,372,000 (based on an exchange rate of NZ
$0.6867/U.S.$1.00). NZRN owns 41 radio stations in 26 New Zealand markets
and is the leading radio broadcaster in New Zealand. However, the
transaction is subject to the New Zealand Government's successful
resolution of an appeal by the native inhabitants of New Zealand, the
Maori, challenging a lower court's ruling that the transaction is
permissible under New Zealand law.
- In April 1996, the Company entered into an agreement to acquire radio
stations KEYI-FM and KFON-AM in Austin, Texas, from Mercury Broadcasting
Co., Inc., for approximately $3,166,000.
- In April 1996, US Radio entered into an agreement to swap the assets of
WSVY-AM (now WGPL-AM) plus $2,600,000 for all the assets of WMYK-FM, both
of which serve Norfolk, Virginia.
THE HEFTEL TRANSACTION
The Company has entered into a tender offer agreement with Heftel dated
June 1, 1996, as amended, and a purchase agreement with certain stockholders of
Heftel. Pursuant to such agreements (the "Heftel Agreements"), the Company has
agreed to purchase 3,516,529 shares of common stock of Heftel and commence a
tender offer for 5,879,403 shares of common stock (together, the "Heftel
Transaction"). The purchase price and the tender price is $23.00 per share or up
to approximately $206,000,000 in the aggregate (net of approximately $9,800,000
in proceeds from the exercise of warrants and options). Consummation of the
Heftel Transaction is subject to FCC and other regulatory approvals, as well as
certain other conditions. Currently, the Company does not know how many, if any,
shares of Heftel common stock will be tendered by Heftel's stockholders pursuant
to the Company's tender offer. The other parties to the Heftel Agreements have
the right to terminate such agreements under certain circumstances in the event
that Heftel receives a higher offer. As of March 31, 1996, Heftel had
approximately $136,633,000 of total liabilities. In connection with this
transaction, two officers of Heftel will receive approximately $25,700,000
pursuant to settlement and noncompetition agreements. The Company presently owns
2,156,799 shares of Heftel common stock (approximately a 21.3% equity interest).
The Company has also agreed to use its best efforts to allow Heftel to remain a
public company for at least one year after the consummation of the Heftel
Transaction.
5
<PAGE> 6
THE OFFERING
<TABLE>
<S> <C>
Common Stock to be offered by the Company................... 3,500,000 shares
Common Stock to be outstanding after the Offering........... 38,114,826 shares(1)
Use of proceeds............................................. To repay indebtedness under the
Credit Facility
New York Stock Exchange symbol.............................. CCU
</TABLE>
- ---------------
(1) Excludes 582,159 shares of Common Stock currently issuable upon exercise of
options to purchase shares of the Company's Common Stock at prices ranging
from $3.87 to $46.25 per share.
6
<PAGE> 7
SUMMARY FINANCIAL INFORMATION
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, THREE MONTHS ENDED MARCH 31,
--------------------------------------------------------------------- --------------------------------------
PRO FORMA PRO FORMA
PRO FORMA US RADIO PRO FORMA US RADIO
US RADIO AND REP US RADIO AND REP
1991 1992 1993 1994 1995 1995(2) 1995(3) 1995 1996 1996(2) 1996(3)
------- -------- -------- -------- -------- --------- --------- -------- ------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF
OPERATIONS
DATA(1):
Net broadcasting
revenue........ $64,384 $82,205 $118,183 $173,109 $243,813 $271,305 $317,803 $ 51,858 $62,209 $69,128 $79,933
Station operating
expenses......... 44,981 53,532 75,990 100,437 131,258 146,814 171,198 33,182 38,230 42,797 49,465
Depreciation and
amortization...... 7,641 12,253 17,447 24,668 33,770 44,881 56,849 8,399 8,755 10,965 13,956
------- ------- -------- -------- -------- -------- -------- -------- ------- ------- -------
Station operating
income........... 11,762 16,420 24,746 48,004 78,785 79,610 89,756 10,277 15,224 15,366 16,512
Corporate expenses.. 2,403 2,890 3,464 5,100 7,414 7,414 7,414 1,531 1,674 1,674 1,674
------ ------- -------- -------- ------- -------- -------- -------- ------- ------- -------
Operating income... 9,359 13,530 21,282 42,904 71,371 72,196 82,342 8,746 13,550 13,692 14,838
Interest expense... (5,371) (4,739) (5,390) (7,669) (20,751) (30,442) 46,763 (4,448) (5,424) (7,597) 11,257
Other income
(expense)......... (1,483) (1,217) (196) 1,161 (803) (752) (762) 259 205 205 220
Equity in net income
of, and other income
from, nonconsolidated
affiliates......... -- -- -- -- 2,927 2,927 2,927 -- 875 875 875
------ ------- -------- -------- -------- -------- -------- -------- ------- ------- -------
Income before
income taxes....... 2,505 7,574 15,696 36,396 52,744 43,929 37,744 4,557 9,206 7,175 4,676
Income taxes....... 1,379 3,281 6,573 14,387 20,730 18,786 (16,622) 1,878 2,968 2,524 (1,649)
------ ------- -------- -------- -------- -------- --------- -------- ------- ------- -------
Net income......... $ 1,126 $ 4,293 $ 9,123 $ 22,009 $ 32,014 $ 25,143 $ 21,122 $ 2,679 $ 6,238 $ 4,651 $ 3,027
======= ======= ======== ======== ======== ======== ======== ======== ======= ======= =======
Net income per
common share...... $ .04 $ .14 $ .29 $ .63 $ .91 $ .72 $ .60 $ .08 $ .18 $ .13 $ .09
======= ======= ======== ======== ======== ======== ======== ======== ======= ======= =======
Weighted average
common shares and
common share
equivalents
outstanding........ 25,976 29,660 31,101 34,663 35,100 35,100 35,100 35,039 35,205 35,205 35,205
====== ======= ======== ======== ======== ======== ======== ======== ======= ======= =======
After-tax cash
flow(4)............ $ 9,300 $17,147 $ 26,638 $ 46,866 $ 71,140 $ 75,382 $ 83,329 $ 11,079 $16,079 $16,702 $18,069
======= ======= ======== ======== ======== ======== ======== ======== ======= ======= =======
After-tax cash flow
per share(5)....... $ .36 $ .58 $ .86 $ 1.35 $ 2.03 $ 2.15 $ 2.37 $ .32 $ .46 $ .47 $ .51
======= ======= ======== ======== ======== ======== ======== ======== ======= ======= =======
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31, MARCH 31, 1996
--------------------------------------------------- ---------------------
AS
1991 1992 1993 1994 1995 ACTUAL ADJUSTED(6)
------- -------- -------- -------- -------- --------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Cash and cash equivalents.................... $ 3,765 $ 2,790 $ 5,517 $ 6,818 $ 5,391 $ 12,006 $ 12,245
Total assets................................. 92,450 146,993 227,577 411,594 563,011 594,979 979,901
Long-term debt, net of current maturities.... 48,110 97,000 87,815 238,204 334,164 366,569 466,226
Shareholders' equity......................... 24,787 31,055 98,343 130,533 163,713 170,272 453,115
</TABLE>
- ---------------
(1) The comparability of results of operations is affected by acquisitions
consummated in certain of the periods presented. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations --
Results of Operations" included herein and as incorporated by reference
herein.
(2) Gives effect to the acquisition of US Radio as if such acquisition had
been consummated on January 1, 1995 and 1996 for the periods ended December
31, 1995 and March 31, 1996, respectively. The pro forma information is
based on a preliminary purchase price allocation.
(3) Gives effect to the acquisitions of US Radio and REP as if such
acquisitions had been consummated on January 1, 1995 and 1996 for the
periods ended December 31, 1995 and March 31, 1996, respectively. The pro
forma information is based on preliminary purchase price allocations. The
Company has presented pro forma financial information for REP, because it
believes that the pending acquisition of REP is material to the Company's
results of operation and financial position.
(4) Defined as net income plus depreciation, amortization of intangibles
(including non-consolidated affiliates) and deferred taxes. After-tax cash
flow is presented here not as a measure of operating results and does not
purport to represent cash provided by operating activities. After-tax cash
flow should not be considered in isolation or as a substitute for measures
of performance prepared in accordance with generally accepted accounting
principles.
(5) Defined as after-tax cash flow divided by weighted average common shares
and common share equivalents outstanding.
(6) As adjusted to give effect to the Offering and the application of the
estimated net proceeds therefrom of $282,843,000 and the acquisitions of US
Radio and REP as if such acquisitions had been consummated on March 31,
1996. The effect of the acquisitions of US Radio and REP are based on
preliminary purchase price allocations.
7
<PAGE> 8
RISK FACTORS
Prospective purchasers of the Common Stock should consider carefully the
factors set forth below, as well as the other information contained in this
Prospectus.
SIGNIFICANT SHAREHOLDERS
Upon completion of this offering (the "Offering"), the two principal
shareholders of the Company, L. Lowry Mays, President, Chief Executive Officer
and a Director of the Company, and B. J. McCombs, a Director of the Company,
collectively will own beneficially approximately 34.84% of the outstanding
shares of Common Stock (or approximately 34.53% if the Underwriters' over-
allotment option is exercised in full). As a result, Messrs. Mays and McCombs
will be able to exert significant influence over the outcome of elections of the
Company's directors and other matters requiring the vote or consent of the
shareholders of the Company. The Company, L. Lowry Mays and B.J. McCombs are
parties to a Buy-Sell Agreement (the "Repurchase Agreement") restricting the
disposition of shares of Common Stock owned by Messrs. Mays and McCombs. See
"Description of Capital Stock -- Repurchase Agreement."
DEPENDENCE ON KEY PERSONNEL
The Company believes that its success will continue to be dependent upon
its ability to attract and retain skilled managers and other personnel,
including its President and Chief Executive Officer, L. Lowry Mays. The Company
has entered into an employment agreement expiring in 2001 with Mr. Mays and
other employment agreements expiring at various times with key programming and
station personnel. The Company does not maintain a key man life insurance policy
on Mr. Mays.
FINANCIAL LEVERAGE
After giving effect to the sale of the Common Stock offered hereby and the
application of the estimated net proceeds therefrom (assuming a public offering
price of $84.00 per share) and the acquisition of US Radio and REP, the Company
would have had at March 31, 1996, borrowings under its credit facility of
approximately $457,157,000, shareholders' equity of $453,115,000 and
approximately $103,299,000 in unused borrowing capacity under its existing
revolving credit facility (the "Credit Facility"), under which it may borrow up
to $600,000,000 at floating rates (currently LIBOR plus 0.43%). The Company has
borrowed and expects to continue borrowing to finance acquisitions of
broadcasting and other media-related properties and for other corporate
purposes. In connection with pending acquisitions, the Company may incur
$378,420,000 of additional indebtedness prior to the application of the proceeds
of the Offering if all such acquisitions are consummated. Additionally, the
Company may incur up to $206,000,000 of indebtedness upon completion of the
Heftel Transaction. The total liabilities of Heftel ($136,633,000 at March 31,
1996) and the payment of approximately $25,700,000 to two Heftel officers
pursuant to settlement and noncompetition agreements would further reduce the
Company's available credit under the Credit Facility. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations --
Liquidity and Capital Resources." The Company will use the proceeds from the
Offering to pay debt under its Credit Facility. After consummation of the
Offering and increasing the Credit Facility to $1,000,000,000, the Company will
have sufficient funds under the Credit Facility to consummate all of the pending
acquisitions contemplated herein. While the Company has not formally amended the
commitment under the Credit Facility, the Company has been advised by its
Administrative Lender, NationsBank of Texas, N.A., that the Administrative
Lender agrees with expanding the existing Credit Facility to $1,000,000,000 on
terms that will not be substantially less favorable than the terms of the
existing Credit Facility. However, there can be no assurance that the Company
will be successful in increasing the size of the existing Credit Facility on
such terms or that it will be able to obtain alternative financing on comparable
terms. Future acquisitions of radio and television stations effected in
connection with the implementation of the Company's acquisition strategy are
expected to be financed from increased borrowings under the Credit Facility,
other debt or equity financings
8
<PAGE> 9
and cash flow from operations. Because of the amount of the Company's
indebtedness, a significant portion of the Company's operating income is
required for debt service. The Company's leverage could make it vulnerable to an
increase in interest rates or a downturn in the operating performance of its
radio and television stations or in general economic conditions. Substantially
all of the Company's assets are pledged to secure the payment by the Company of
its indebtedness under the Credit Facility. The Credit Facility contains certain
financial and operational covenants and other restrictions with which the
Company must comply, including limitations on capital expenditures, the
incurrence of additional indebtedness, payment of cash dividends, and
requirements to maintain certain financial ratios. See "Dividend Policy" and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Liquidity and Capital Resources."
GOVERNMENT REGULATION
The domestic broadcasting industry is subject to extensive federal
regulation which, among other things, requires approval by the FCC for the
issuance, renewal, transfer and assignment of broadcasting station operating
licenses and limits the number of broadcasting properties the Company may
acquire. The 1996 Act, which became law on February 8, 1996, creates significant
new opportunities for broadcasting companies but also creates uncertainties as
to how the FCC and the courts will enforce and interpret the 1996 Act.
The Company's business will continue to be dependent upon acquiring and
maintaining broadcasting licenses issued by the FCC, which are issued for a
maximum term of eight years. Although it is rare for the FCC to deny a renewal
application, there can be no assurance that future renewal applications will be
approved, or that renewals will not include conditions or qualifications that
could adversely affect the Company's operations. Moreover, governmental
regulations and policies may change over time and there can be no assurance
that such changes would not have a material adverse impact upon the Company's
business, financial condition and results of operations. See "Business --
Federal Regulation of Television and Radio Broadcasting."
RISK OF ACQUISITION STRATEGY
The Company intends to pursue growth through the opportunistic acquisition
of broadcasting companies, radio and television station groups and individual
radio and television stations. The Company routinely reviews potential
acquisitions. Although no agreements have been reached regarding any such
potential acquisitions, except as described in this Prospectus, it is likely
that the Company will continue to experience significant expansion in the
future. As a result, the Company's management will be required to manage
effectively a rapidly expanding and significantly larger portfolio of
broadcasting properties. The Company's acquisition strategy involves numerous
other risks, including difficulties in the integration of operations and
systems, the diversion of management's attention from other business concerns
and the potential loss of key employees of acquired stations. There can be no
assurance such acquisitions will benefit the Company.
The consummation of domestic broadcasting acquisitions, including all
pending acquisitions and the Heftel Transaction, requires FCC approval with
respect to the transfer of the broadcast license of the acquired station. The
consummation of acquisitions, including certain pending acquisitions and the
Heftel Transaction, may also be subject to the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended. Finally, the consummation of certain
acquisitions may also depend upon the Company's ability to expand its Credit
Facility. There can be no assurance that the FCC will approve pending or future
acquisitions, including the Heftel Transaction, that the Company will be able to
consummate such acquisitions or that the Company will be able to expand its
ability to borrow funds on acceptable terms to fund pending or future
acquisitions. See "Management's Discussion and Analysis of Financial Condition
and Results of Operations -- Liquidity and Capital Resources" and
"Business -- Federal Regulation of Television and Radio Broadcasting."
9
<PAGE> 10
COMPETITION; BUSINESS RISKS
Broadcasting is a highly competitive business. The Company's radio and
television stations compete for audiences and advertising revenues with other
radio and television stations, as well as with other media, such as newspapers,
magazines, cable television, outdoor advertising and direct mail, within their
respective markets. Audience ratings and market shares are subject to change and
any adverse change in a particular market could have a material adverse effect
on the revenue of stations located in that market. Future operations are further
subject to many variables which could have an adverse effect upon the Company's
financial performance. These variables include economic conditions, both general
and relative to the broadcasting industry; shifts in population and other
demographics; the level of competition for advertising dollars with other radio
stations, television stations and other entertainment and communications media;
fluctuations in operating costs; technological changes and innovations; changes
in labor conditions; and changes in governmental regulations and policies and
actions of federal regulatory bodies, including the FCC. Although the Company
believes that each of its stations are able to compete effectively in their
respective markets, there can be no assurance that any such station will be able
to maintain or increase its current audience ratings and advertising revenues.
10
<PAGE> 11
CAPITALIZATION
The following table sets forth the current portion of long-term debt and
capitalization of the Company as of March 31, 1996, and as adjusted to give
effect to the acquisitions of US Radio and REP and the consummation of the
Offering at an assumed price of $84.00 per share.
<TABLE>
<CAPTION>
MARCH 31, 1996
-----------------------------------------------
ACTUAL PRO FORMA(1) AS ADJUSTED(1)(2)
-------- ------------ -----------------
(In thousands)
<S> <C> <C> <C>
Current portion of long-term debt.............. $ 3,405 $ 3,405 $ 3,405
Credit Facility(3)............................. 357,500 740,000 457,157
Other long-term debt........................... 9,069 9,069 9,069
Shareholders' equity:
Preferred Stock, $1.00 par value, 2,000,000
shares authorized, no shares issued and
outstanding............................... -- -- --
Common Stock, $.10 par value, 100,000,000
shares authorized, 34,605,451 shares
issued and outstanding, (38,105,451 shares
as adjusted).............................. 3,461 3,461 3,811
Additional paid-in capital................... 91,489 91,489 373,982
Retained earnings............................ 74,597 74,597 74,597
Other equity................................. 896 896 896
Cost of shares held in treasury.............. (171) (171) (171)
-------- -------- --------
Total shareholders' equity................ 170,272 170,272 453,115
-------- -------- --------
Total capitalization................. $540,246 $922,746 $922,746
======== ======== ========
</TABLE>
- ---------------
(1) Pro forma to give effect to the acquisitions of US Radio and REP as if such
acquisitions had been consummated on March 31, 1996 for $382,500,000 in
borrowings under the Credit Facility.
(2) As adjusted to give effect to the Offering and the application of the
estimated net proceeds therefrom of $282,843,000.
(3) The Company may incur additional indebtedness of up to $138,420,000 in
connection with various pending acquisitions, and additional indebtedness of
$206,000,000 in connection with the Heftel Transaction. The total
liabilities of Heftel ($136,633,000 at March 31, 1996) and the payment of
approximately $25,700,000 to two Heftel officers pursuant to settlement and
noncompetition agreements would further reduce the Company's available
credit under the Credit Facility.
11
<PAGE> 12
USE OF PROCEEDS
The net proceeds to the Company from the sale of the shares of Common Stock
offered hereby, after deducting underwriting discounts and commissions and the
estimated expenses of the Offering, are estimated to be $282,843,000 (at an
assumed price of $84.00 per share). All of such net proceeds received by the
Company will be used to repay borrowings outstanding under the Credit Facility.
As of May 15, 1996, a total of approximately $498,000,000 in borrowings was
outstanding under the Credit Facility and the effective interest rate thereon
was approximately 6.1%. Borrowings under the Credit Facility have been used to
finance the US Radio acquisition and other acquisitions discussed in this
Prospectus. Borrowings under the Credit Facility, which must be paid in full by
September 2003, currently bear interest at a floating rate based on the LIBOR
plus 0.43%. Upon repayment of such borrowings, the amount repaid will become
immediately available to the Company for re-borrowing under the Credit Facility,
subject to the satisfaction of certain conditions. The Company expects that
amounts available for re-borrowing under the Credit Facility as a result of the
application of the net proceeds of the Offering, together with additional
amounts that become available for borrowing under the Credit Facility, will be
used to finance the REP acquisition, the Heftel Transaction and other pending
acquisitions discussed in this Prospectus. Future acquisitions of radio and
television stations effected in connection with the implementation of the
Company's acquisition strategy are expected to be financed from increased
borrowings under the Credit Facility, other debt or equity financings and cash
flow from operations.
PRICE RANGE OF COMMON STOCK
The Company's Common Stock is listed on the New York Stock Exchange
("NYSE") under the symbol "CCU." The following table sets forth, for the periods
indicated, the high and low closing sale prices per share (as adjusted for all
stock splits to date) as reported on the NYSE or, prior to November 1994, the
American Stock Exchange.
<TABLE>
<CAPTION>
HIGH LOW
------ ------
<S> <C> <C>
YEAR ENDED DECEMBER 31, 1994:
First Quarter...................................................... $20.19 $15.85
Second Quarter..................................................... 19.56 16.19
Third Quarter...................................................... 26.00 18.06
Fourth Quarter..................................................... 25.88 20.63
YEAR ENDED DECEMBER 31, 1995:
First Quarter...................................................... $30.25 $25.06
Second Quarter..................................................... 34.75 26.88
Third Quarter...................................................... 40.88 30.81
Fourth Quarter..................................................... 44.13 36.25
YEAR ENDED DECEMBER 31, 1996:
First Quarter...................................................... $58.25 $41.00
Second Quarter (through June 13, 1996)............................. 86.00 54.00
</TABLE>
On May 15, 1996, there were approximately 4,000 shareholders of record of
the Company's Common Stock.
DIVIDEND POLICY
The Company currently expects to retain its earnings for the development
and expansion of its business. Any future decision by the Board of Directors to
pay cash dividends will depend upon, among other factors, the Company's
earnings, financial position and capital requirements. The Company's Credit
Facility restricts the Company's ability to pay dividends, other than dividends
payable wholly in capital stock of the Company.
12
<PAGE> 13
SELECTED FINANCIAL INFORMATION
The selected financial information presented below for the five years ended
December 31, 1995 has been derived from the consolidated financial statements of
the Company, which have been audited by Ernst & Young LIP, independent auditors.
The selected financial information as of March 31, 1996 and for the three months
ended March 31, 1996 and 1995 has been derived from unaudited consolidated
financial statements of the Company. In the opinion of management of the
Company, the unaudited financial statements from which such information is
derived contain all adjustments (consisting only of normal recurring
adjustments) necessary for the fair presentation of the results of operations
for such periods. Results for the three months ended March 31, 1996 are not
necessarily indicative of the results that may be expected for the full fiscal
year. The pro forma financial information presents results of operations of the
Company as if US Radio and as if both US Radio and REP had been acquired on
January 1, 1995 and 1996 for the periods ended December 31, 1995 and March 31,
1996, respectively. The pro forma information is unaudited and is not
necessarily indicative of the results of operations of the Company had such
acquisitions occurred at the beginning of such period or of the Company's
results of operations for any future periods. The following selected financial
information should be read in conjunction with the consolidated financial
statements and notes thereto of the Company, which are incorporated by reference
herein.
SELECTED FINANCIAL INFORMATION
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------------------------------------------------------
PRO FORMA
PRO FORMA US RADIO
US RADIO AND REP
STATEMENT OF OPERATIONS DATA(1): 1991 1992 1993 1994 1995 1995(2) 1995(3)
------- -------- -------- -------- -------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Net broadcasting revenue............. $64,384 $ 82,205 $118,183 $173,109 $243,813 $271,305 $317,803
Station operating expenses........... 44,981 53,532 75,990 100,437 131,258 146,814 171,198
Depreciation and amortization........ 7,641 12,253 17,447 24,668 33,770 44,881 56,849
------- -------- -------- -------- -------- -------- --------
Station operating income............ 11,762 16,420 24,746 48,004 78,785 79,610 89,756
Corporate expenses................... 2,403 2,890 3,464 5,100 7,414 7,414 7,414
------- -------- -------- -------- -------- -------- --------
Operating income.................... 9,359 13,530 21,282 42,904 71,371 72,196 82,342
Interest expense..................... (5,371) (4,739) (5,390) (7,669) (20,751) (30,442) 46,763)
Other income (expense)............... (1,483) (1,217) (196) 1,161 (803) (752) (762)
Equity in net income of, and other
income from, nonconsolidated
affiliates.......................... -- -- -- -- 2,927 2,927 2,927
------- -------- -------- -------- -------- -------- --------
Income before income taxes........... 2,505 7,574 15,696 36,396 52,744 43,929 37,744
Income taxes........................ 1,379 3,281 6,573 14,387 20,730 18,786 (16,622)
------- -------- -------- -------- -------- -------- --------
Net income........................... $ 1,126 $ 4,293 $ 9,123 $ 22,009 $ 32,014 $ 25,143 $ 21,122
======= ======== ======== ======== ======== ======== ========
Net income per common share.......... $ .04 $ .14 $ .29 $ .63 $ .91 $ .72 $ .60
======= ======== ======== ======== ======== ======== ========
Weighted average common shares and
common share equivalents
outstanding......................... 25,976 29,660 31,101 34,663 35,100 35,100 35,100
======= ======== ======== ======== ======== ======== ========
After-tax cash flow(4)............... $ 9,300 $ 17,147 $ 26,638 $ 46,866 $ 71,140 $ 75,382 $ 83,329
======= ======== ======== ======== ======== ======== ========
After-tax cash flow per share(5)..... $ .36 $ .58 $ .86 $ 1.35 $ 2.03 $ 2.15 $ 2.37
======= ======== ======== ======== ======== ======== ========
<CAPTION>
THREE MONTHS ENDED MARCH 31,
--------------------------------------------
PRO FORMA
PRO FORMA US RADIO
US RADIO AND REP
STATEMENT OF OPERATIONS DATA(1): 1995 1996 1996(2) 1996(3)
-------- ------- --------- ---------
<S> <C> <C> <C> <C>
Net broadcasting revenue............. $ 51,858 $62,209 $69,128 $79,933
Station operating expenses........... 33,182 38,230 42,797 49,465
Depreciation and amortization........ 8,399 8,755 10,965 13,956
-------- ------- ------- -------
Station operating income............ 10,277 15,224 15,366 16,512
Corporate expenses................... 1,531 1,674 1,674 1,674
-------- ------- ------- -------
Operating income.................... 8,746 13,550 13,692 14,838
Interest expense..................... (4,448 (5,424) (7,597) 11,257
Other income (expense)............... 259 205 205 220
Equity in net income of, and other
income from, nonconsolidated
affiliates.......................... -- 875 875 875
-------- ------- ------- -------
Income before income taxes........... 4,557 9,206 7,175 4,676
Income taxes........................ 1,878 2,968 2,524 (1,649)
-------- ------- ------- -------
Net income........................... $ 2,679 $ 6,238 $ 4,651 $ 3,027
======== ======= ======= =======
Net income per common share.......... $ .08 $ .18 $ .13 $ .09
======= ======= ======= =======
Weighted average common shares and
common share equivalents
outstanding......................... 35,039 35,205 35,205 35,205
======== ======= ======= =======
After-tax cash flow(4)............... $ 11,079 $16,079 $16,702 $18,069
======== ======= ======= =======
After-tax cash flow per share(5)..... $ .32 $ .46 $ .47 $ .51
======== ======= ======= =======
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31, MARCH 31, 1996
--------------------------------------------------- -----------------------
AS
BALANCE SHEET DATA: 1991 1992 1993 1994 1995 ACTUAL ADJUSTED(6)
------- -------- -------- -------- -------- --------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Cash and cash equivalents............ $ 3,765 $ 2,790 $ 5,517 $ 6,818 $ 5,391 $ 12,006 $ 12,245
Current assets....................... 20,521 24,844 38,191 53,945 70,485 68,671 83,101
Property, plant and
equipment -- net.................... 27,169 48,017 67,750 85,318 99,885 102,987 136,970
Total assets......................... 92,450 146,993 227,577 411,594 563,011 594,979 979,901
Current liabilities.................. 9,960 10,073 26,125 27,679 36,005 31,048 33,470
Long-term debt, net of current
maturities.......................... 48,110 97,000 87,815 238,204 334,164 366,569 466,226
Shareholders' equity................. 24,787 31,055 98,343 130,533 163,713 170,272 453,115
</TABLE>
13
<PAGE> 14
- ---------------
(1) The comparability of results of operations is affected by acquisitions
consummated in certain of the periods presented. See "Management's
Discussion and Analysis of Financial Condition and Results of
Operations -- Results of Operations" included herein and as incorporated by
reference herein.
(2) Gives effect to the acquisition of US Radio as if such acquisition had been
consummated on January 1, 1995 and 1996 for the periods ended December 31,
1995 and March 31, 1996, respectively. The pro forma information is based on
a preliminary purchase price allocation.
(3) Gives effect to the acquisitions of US Radio and REP as if such acquisitions
had been consummated on January 1, 1995 and 1996 for the periods ended
December 31, 1995 and March 31, 1996, respectively. The pro forma
information is based on preliminary purchase price allocations. The Company
has presented pro forma financial information for REP, because it believes
that the pending acquisition of REP is material to the Company's results of
operations and financial position.
(4) Defined as net income plus depreciation, amortization of intangibles
(including non-consolidated affiliates) and deferred taxes. After-tax cash
flow is presented here not as a measure of operating results and does not
purport to represent cash provided by operating activities. After-tax cash
flow should not be considered in isolation or as a substitute for measures
of performance prepared in accordance with generally accepted accounting
principles.
(5) Defined as after-tax cash flow divided by weighted average common shares and
common share equivalents outstanding.
(6) As adjusted to give effect to the Offering and the application of the
estimated net proceeds therefrom of $282,843,000 and the acquisitions of US
Radio and REP as if such acquisitions had been consummated on March 31,
1996. The effect of the acquisitions of US Radio and REP are based on
preliminary purchase price allocations.
14
<PAGE> 15
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
COMPARISON OF THREE MONTHS ENDED MARCH 31, 1996 TO THREE MONTHS ENDED MARCH
31, 1995
Net broadcasting revenue for the three months ended March 31, 1996
increased 20% to $62,209,000 from $51,858,000 for the same quarter of 1995.
Station operating expenses increased 15% to $38,230,000 from $33,182,000.
Depreciation and amortization increased 4% from $8,399,000 to $8,755,000 in the
first quarter of 1996. Station operating income increased $4,947,000 or 48% to
$15,224,000, compared to $10,277,000 for the first quarter of 1995. Interest
expense increased 22% from $4,448,000 to $5,424,000 in the first quarter of
1996. Net income increased 133% from $2,679,000, or $.08 per share to
$6,238,000, or $.18 per share.
The majority of the growth in net broadcasting revenue and station
operating income was due to the improved operating results of the Company's
radio stations in Houston and television stations in Memphis and Little Rock,
the acquisitions of the broadcasting assets of WOOD-AM/FM and WBCT-FM in Grand
Rapids, Michigan on February 14, 1996, the purchase of the broadcasting assets,
except the FCC license, of WLYH-TV in Lancaster/Lebanon, Pennsylvania, the
purchase of the broadcasting assets and the license of the Harrisburg,
Pennsylvania CBS-affiliate, WHP-TV, on October 31, 1995 and the purchase of the
broadcasting assets, except the FCC license, of WNFT-TV in Jacksonville,
Florida. The majority of the increase in depreciation and amortization was due
to the above-mentioned acquisitions. Interest expense increased primarily due to
an increase in the average amount of debt outstanding -- which resulted from the
above-mentioned acquisitions, the purchase in May 1995 of a 50% interest in ARN
and the purchase in May 1995 of a 21.4% interest in Heftel.
The investments in ARN and Heftel are accounted for under the equity
method; together they contributed $875,000 to net earnings in the first quarter
of 1996. The majority of the increase in net income also was primarily due to
the factors stated above, but was partially offset by an increase of $143,000 in
corporate-related expenses.
LIQUIDITY AND CAPITAL RESOURCES
The major sources of capital for the Company have historically been cash
flow from operations, advances on its credit facility and funds supplied by the
Company's stock offerings. As of May 15, 1996, the Company had approximately
$498,000,000 outstanding under the $600,000,000 Credit Facility, a total of
$11,500,000 in guarantees to third parties, a $7,000,000 letter of credit and a
$3,000,000 note payable to a third party, leaving approximately $80,500,000
available for future borrowings under the Credit Facility.
In addition, the Company has entered into agreements to acquire radio and
television stations from various parties for an aggregate consideration of
$378,420,000, including approximately $240,000,000 for REP, approximately
$68,000,000 for WPRI-TV in Providence, Rhode Island and approximately
$20,372,000 for a one-third interest in New Zealand Radio Network.
The Heftel Transaction will require up to approximately $206,000,000 to
fund its completion. The total liabilities of Heftel ($136,633,000 at March 31,
1996) and the payment of approximately $25,700,000 to two Heftel officers
pursuant to settlement and noncompetition agreements would further reduce the
Company's available credit under the Credit Facility.
The Company will use the proceeds from the Offering to pay down debt under
the Credit Facility. After consummation of the Offering and increasing the
Credit Facility to $1,000,000,000, the Company will have sufficient funds under
the Credit Facility to consummate all pending acquisitions and the Heftel
Transaction. While the Company has not formally amended the commitment under the
Credit Facility, the Company has been advised by its Administrative Lender,
NationsBank of Texas, N.A. that the Administrative Lender agrees with expanding
the existing Credit
15
<PAGE> 16
Facility to $1,000,000,000 on terms that will not be substantially less
favorable than the terms of the existing Credit Facility. However, there can be
no assurance that the Company will be successful in increasing the size of the
existing Credit Facility on such terms or that it could obtain alternative
financing on comparable terms.
The Company believes that cash flow from operations, together with amounts
available to it under its anticipated expanded Credit Facility, will be
sufficient to finance the operating requirements of the Company, anticipated
debt service requirements and anticipated capital expenditures for the Company
through the current fiscal year.
BUSINESS
The Company consists of two principal business segments -- radio
broadcasting and television broadcasting. Currently, the radio segment includes
57 stations for which the Company is the licensee and 15 stations operated under
LMAs or JSAs. These 72 stations operate in 20 different markets. The radio
segment also operates five networks. Assuming all pending acquisitions and one
divestiture are consummated (which include nine stations which the Company
currently operates under LMAs or JSAs), the Company will own 95 radio stations
in 25 markets.
Currently, the television segment includes ten television stations for
which the Company is the licensee and six stations operated under LMAs. These 16
stations operate in ten different markets. The Company has entered into a
definitive agreement to acquire one additional television station, WPRI-TV, the
CBS affiliate in Providence, Rhode Island.
INDUSTRY SEGMENTS
Selected information relating to the Company's two principal business
segments for 1993, 1994 and 1995 is presented in the following table:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------------------------
1993 1994 1995
------------- ------------- -------------
<S> <C> <C> <C>
RADIO
Net broadcasting revenue.................... $ 71,605,141 $ 94,097,668 $141,737,053
Station operating expenses.................. 52,254,074 62,383,246 85,023,929
Depreciation................................ 4,605,256 5,664,700 6,973,801
Amortization of intangibles................. 4,508,583 6,659,726 13,007,026
------------ ------------ ------------
Station operating income.................... $ 10,237,228 $ 19,389,996 $ 36,732,297
============ ============ ============
TELEVISION
Net broadcasting revenue.................... $ 46,577,498 $ 79,011,706 $102,076,064
Station operating expenses.................. 23,735,957 38,053,612 46,234,281
Depreciation................................ 4,611,726 6,974,404 8,406,025
Amortization of intangibles................. 3,721,697 5,369,710 5,382,030
------------ ------------ ------------
Station operating income.................... $ 14,508,118 $ 28,613,980 $ 42,053,728
============ ============ ============
CONSOLIDATED
Net broadcasting revenue.................... $118,182,639 $173,109,374 $243,813,117
Station operating expenses.................. 75,990,031 100,436,858 131,258,210
Depreciation................................ 9,216,982 12,639,104 15,379,826
Amortization of intangibles................. 8,230,280 12,029,436 18,389,056
------------ ------------ ------------
Station operating income.................... $ 24,745,346 $ 48,003,976 $ 78,786,025
============ ============ ============
</TABLE>
16
<PAGE> 17
RADIO BROADCASTING
The following table sets forth certain selected information with regard to
each of the Company's 27 AM and 43 FM radio stations and five radio networks
which it owned or operated as of May 15, 1996, and those stations for which an
acquisition is pending, but not those stations that the Company would acquire
through the Heftel Transaction.
<TABLE>
<CAPTION>
TARGET DATE OF
MARKET(RANK)/STATION(1) AUDIENCE(2) STATION FORMAT ACQUISITION FREQUENCY
- ----------------------------------- ------------- ------------------------- ------------ ------------
<S> <C> <C> <C> <C>
HOUSTON, TX(9)
KPRC-AM(3) Adults 25-54 News/Talk/Sports Jan. 1995 950 AM
KSEV-AM(3) Adults 25-54 News/Talk/Sports Jan. 1995 700 AM
KMJQ-FM Adults 24-54 Adult Urban Jan. 1995 102.1 FM
KBXX-FM Adults 18-49 Urban Contemporary Aug. 1994 97.9 FM
KHYS-FM(4) Adults 25-54 Jazz LMA 98.5 FM
KJOJ-AM Adults 25-54 Religious LMA 880 AM
KJOJ-FM Adults 25-54 Jazz May 1996 103.3 FM
MIAMI/FT. LAUDERDALE, FL(11)
WHYI-FM(5) Adults 18-49 Contemporary Hits Oct. 1994 100.7 FM
WBGG-FM Adults 18-49 Classic Hits Mar. 1994 105.9 FM
TAMPA/ST. PETERSBURG, FL(21)
WMTX-AM(5) Adults 25-54 Adult Contemporary Oct. 1994 1040 AM
WMTX-FM Adults 25-54 Adult Contemporary Oct. 1994 95.7 FM
WRBQ-AM Adults 18-49 Adult Urban July 1992 1380 AM
WRBQ-FM Adults 25-54 Country July 1992 104.7 FM
CLEVELAND, OH(22)
WNCX-FM(5) Adults 25-54 Classic Rock Oct. 1994 98.5 FM
WERE-AM(5) Adults 25-54 News/Talk Oct. 1994 1300 AM
WENZ-FM(5) Adults 18-49 Modern Rock May 1996 107.9 FM
MILWAUKEE, WI(28)
WKKV-FM Adults 18-49 Urban Contemporary May 1996 100.7 FM
PROVIDENCE, RI(31)
WWBB-FM Adults 25-54 Oldies Pending 101.5 FM
WWRX-FM Adults 25-54 Classic Rock Pending 103.7 FM
NORFOLK, VA(33)
WOWI-FM Adults 18-49 Urban Contemporary May 1996 102.9 FM
WJCD-FM Adults 25-54 Jazz May 1996 105.3 FM
WGPL-AM(7) Adults 25-54 Adult Urban May 1996 1350 AM
WMYK-FM(7) Adults 25-54 Adult Urban Pending 92.1 FM
WSVY-FM Adults 25-54 Adult Urban LMA 107.7 FM
SAN ANTONIO, TX(34)
WOAI-AM Adults 25-54 News/Talk/Sports June 1975 1200 AM
KQXT-FM Adults 25-54 Adult Contemporary Feb. 1993 101.9 FM
KTKR-AM Adults 25-54 News/Talk/Sports July 1993 760 AM
KAJA-FM Adults 25-54 Country Mar. 1972 97.3 FM
KSJL-FM(6) Adults 25-54 Adult Urban JSA 96.1 FM
</TABLE>
17
<PAGE> 18
<TABLE>
<CAPTION>
TARGET DATE OF
MARKET(RANK)/STATION(1) AUDIENCE(2) STATION FORMAT ACQUISITION FREQUENCY
- ----------------------------------- ------------- ------------------------- ------------ ------------
<S> <C> <C> <C> <C>
NEW ORLEANS, LA(38)
WODT-AM(5) Adults 25-54 News/Talk/Sports Oct. 1984 1280 AM
WQUE-FM(5) Adults 18-49 Urban Contemporary Oct. 1984 93.3 FM
WYLD-AM(5) Adults 25-54 Gospel Aug. 1995 940 AM
WYLD-FM(5) Adults 25-54 Adult Urban Jan. 1995 98.5 FM
WNOE-FM(5) Adults 25-54 Country Pending 101.1 FM
KLJZ-FM(5) Adults 25-54 Jazz Pending 106.7 FM
GREENSBORO, NC(42)
WXRA-FM Adults 18-49 Rock Pending 94.5 FM
WTQR-FM Adults 25-54 Country Pending 104.1 FM
WSJS-AM Adults 25-54 News/Talk Pending 600 AM
MEMPHIS, TN(43)
WHRK-FM(5) Adults 18-49 Urban Contemporary May 1996 97.1 FM
WDIA-AM(5) Adults 25-54 Adult Urban May 1996 1070 AM
WEGR-FM(5) Adults 25-54 Album Oriented Rock Pending 107.7 FM
WREC-AM(5) Adults 35-64 News/Talk Pending 600 AM
WRXQ-FM(5) Adults 18-49 Modern Rock Pending 95.7 FM
KJMS-FM(5) Adults 18-49 Urban Contemporary Pending 101.1 FM
KWAM-AM(5) Adults 25-54 Religious Pending 990 AM
LOUISVILLE, KY(49)
WHAS-AM(5) Adults 25-54 News/Adult Contemporary Sept. 1986 840 AM
WAMZ-FM(5) Adults 25-54 Country Sept. 1986 97.5 FM
WHKW-FM(5)(4) Adults 25-54 Country LMA 98.9 FM
WTFX-FM(5) Adults 25-54 Album Oriented Rock Pending 100.5 FM
WWKY-AM(5) Adults 25-54 News/Talk Pending 790 AM
WKJK-AM(5) Adults 35-54 Traditional Country LMA/Pending 1080 AM
RALEIGH, NC(50)
WQOK-FM Adults 18-49 Urban Contemporary May 1996 97.5 FM
WTCD-FM(4) Adults 25-54 Jazz LMA/Pending 103.9 FM
OKLAHOMA CITY, OK(51)
KTOK-AM Adults 25-54 News/Talk/Sports Oct. 1984 1000 AM
KEBC-FM Adults 18-49 Country Jan. 1994 94.7 FM
KJYO-FM Adults 18-34 Contemporary Hits Oct. 1984 102.7 FM
WKY-AM(6) Adults 25-54 News/Talk LMA 930 AM
KTST-FM Adults 18-34 Country Pending 101.9 FM
KXXY-FM Adults 25-54 Country Pending 96.1 FM
KXXY-AM Adults 25-54 Sports/Talk Pending 1340 AM
AUSTIN, TX(54)
KPEZ-FM Adults 25-54 Classic Rock July 1982 102.3 FM
KHFI-FM Adults 18-49 Contemporary Hits Mar. 1993 96.7 FM
KEYI-FM(6) Adults 25-54 Oldies JSA/Pending 103.5 FM
KFON-AM(6) Adults 25-54 News/Talk JSA/Pending 1490 AM
RICHMOND, VA(56)
WRVA-AM Adults 25-54 News/Talk/Sports July 1992 1140 AM
WRVH-AM Adults 25-54 News/Talk/Sports Sept. 1993 910 AM
WRVQ-FM Adults 18-49 Contemporary Hits July 1992 94.5 FM
WRXL-FM Adults 18-49 Album Oriented Rock Sept. 1993 102.1 FM
WTVR-FM Adults 25-54 Adult Contemporary May 1996 98.1 FM
WTVR-AM Adults 35-64 Nostalgia May 1996 1380 AM
</TABLE>
18
<PAGE> 19
<TABLE>
<CAPTION>
TARGET DATE OF
MARKET(RANK)/STATION(1) AUDIENCE(2) STATION FORMAT ACQUISITION FREQUENCY
- ----------------------------------- ------------- ------------------------- ------------ ------------
<S> <C> <C> <C> <C>
TULSA, OK(60)
KAKC-AM Adults 25-54 News/Sports/Oldies Oct. 1973 1300 AM
KMOD-FM Adults 25-54 Album Oriented Rock Oct. 1973 97.5 FM
KQLL-AM(6) Adults 25-54 Sports/Talk JSA/Pending 1430 AM
KQLL-FM(6) Adults 25-54 Oldies JSA/Pending 106.1 FM
KOAS-FM(6) Adults 25-54 Jazz JSA/Pending 92.1 FM
GRAND RAPIDS, MI(66)
WOOD-AM(5) Adults 35-64 News/Talk/Sports May 1996 1300 AM
WOOD-FM(5) Adults 25-54 Adult Contemporary May 1996 105.7 FM
WBCT-FM(5) Adults 18-49 Country May 1996 93.7 FM
WCUZ-AM(4)(5) Adults 25-54 Sports/Talk/News LMA/Pending 1230 AM
WCUZ-FM(4)(5) Adults 25-54 Country LMA/Pending 101.3 FM
EL PASO, TX(70)
KPRR-FM Adults 18-49 Contemporary Hits May 1996 102.1 FM
KHEY-FM Adults 25-54 Country May 1996 96.3 FM
KHEY-AM Adults 25-54 Oldies May 1996 690 AM
SPRINGFIELD, MA(76)
WHYN-AM Adults 25-54 News/Talk Pending 560 AM
WHYN-FM Adults 25-54 Adult Contemporary Pending 93.1 FM
FT. MYERS/NAPLES, FL(77)
WCKT-FM Adults 25-54 Country Pending 107.1 FM
WXRM-FM Adults 25-54 Soft Adult Pending 105.5 FM
LITTLE ROCK, AR(82)
KDDK-FM Adults 25-54 Country May 1996 100.3 FM
KMJX-FM Adults 25-54 Classic Rock May 1996 105.1 FM
COLUMBIA, SC(88)
WWDM-FM Adults 25-54 Urban Contemporary Pending 101.3 FM
WARQ-FM Adults 18-49 Modern Rock Pending 93.5 FM
NEW HAVEN, CT(95)
WKCI-FM Adults 18-49 Contemporary Hits May 1992 101.3 FM
WAVZ-AM Adults 25-54 Nostalgia May. 1992 1300 AM
WELI-AM Adults 25-54 News/Talk Oct. 1984 960 AM
READING, PA(129)
WRAW-AM Adults 35-64 Nostalgia May 1996 1340 AM
WRFY-FM Adults 18-49 Contemporary Hits May 1996 102.5 FM
RADIO NETWORKS
LOUISVILLE, KY
Kentucky News Network Adults 25-54 News/Agriculture Jan. 1992 N/A
RICHMOND, VA
Virginia News Network Adults 25-54 News/Agriculture Sept. 1993 N/A
OKLAHOMA CITY, OK
Oklahoma News Network Adults 25-54 News/Agriculture Oct. 1984 N/A
SAN ANGELO, TX
Voice of Southwest Agriculture Adults 25-54 News/Agriculture Oct. 1995 N/A
COLLEGE STATION, TX/DES MOINES, IA
Clear Channel Sports Adults 18-49 College Sports Networks Various N/A
</TABLE>
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<PAGE> 20
- ---------------
(1) Number in parenthesis next to each market indicates that market's national
rank according to BIA Publications, Inc.'s "Investing in Radio 1996 Market
Report, 2nd Edition."
(2) Due to variations that may exist within the same station programming
format(such as variations in the tempo of the music or the age of the songs
broadcast), the primary demographic may be different even though the station
programming format is the same.
(3) 80% owned by the Company.
(4) LMA(FCC license not owned by the Company).
(5) Application for renewal of license pending with the FCC.
(6) JSA(FCC license not owned and station not programmed by the Company).
(7) The Company has entered into a definitive agreement to swap WGPL-AM plus
$2,600,000 for WMYK-FM in Norfolk, Virginia.
TELEVISION BROADCASTING
The following table sets forth certain selected information with regard to
each of the Company's 16 television stations which it owned or operated as of
May 15, 1996, and one pending station acquisition.
<TABLE>
<CAPTION>
NETWORK DATE OF
MARKET (RANK)/STATION(1) AFFILIATION CHANNEL ACQUISITION
- ------------------------------------------------ ----------- -------- ------------
<S> <C> <C> <C>
MINNEAPOLIS, MN(14)
WFTC-TV FOX TV-29 Oct. 1993
MEMPHIS, TN(42)
WPTY-TV ABC TV-24 Apr. 1992
WLMT-TV(2) UPN TV-30 LMA
HARRISBURG/LEBANON/LANCASTER, PA(44)
WHP-TV CBS TV-21 Oct. 1995
WLYH-TV(2) UPN TV-15 LMA
PROVIDENCE/NEW BEDFORD, RI(46)
WPRI-TV CBS TV-13 Pending
ALBANY/SCHENECTADY/TROY, NY(52)
WXXA-TV FOX TV-23 Dec. 1994
JACKSONVILLE, FL(55)
WAWS-TV FOX TV-30 Sept. 1989
WTEV-TV(2) UPN TV-47 LMA
LITTLE ROCK, AR(58)
KLRT-TV FOX TV-16 Feb. 1994
KASN-TV(2) UPN TV-38 LMA
TULSA, OK(59)
KOKI-TV FOX TV-23 Dec. 1989
KTFO-TV(2) UPN TV-41 LMA
MOBILE, AL/PENSACOLA, FL(61)
WPMI-TV NBC TV-15 Dec. 1988
WJTC-TV(2) UPN TV-44 LMA
WICHITA, KS(63)
KSAS-TV FOX TV-24 Aug. 1990
TUCSON, AZ(80)
KTTU-TV(3) UPN TV-18 Feb. 1989
</TABLE>
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<PAGE> 21
- ---------------
(1) Number in parenthesis next to each market indicates that market's national
rank according to BIA Publications, Inc.'s "Investing in Television 1996
Market Report, 2nd Edition."
(2) LMA (FCC license not owned by the Company).
(3) On April 1, 1995, the Commission renewed the license of KTTU-TV for a period
of two years due to a finding of violations of the Commission's rules
limiting the amount of commercial matter that may be aired during children's
programming. The Commission also imposed quarterly reporting requirements
during the license term to show continued compliance with the children's
television rules. The Company owns the FCC license for KTTU-TV but entered
into an LMA under which substantially all of the station's programming is
supplied by another party.
Sources of programming for the Company's affiliated stations include the
FOX, ABC, NBC, CBS and UPN television networks, which produce and distribute
programming in exchange for each station's commitment to air the programming at
specified times and for commercial announcement time during the programming.
Each FOX contract currently runs for a five-year term expiring in 1998 except
for the FOX contract for WXXA-TV Albany, New York, which expires in 1999, and
may be renewed by FOX or the Company. Based on the performance of its
FOX-affiliated stations to date, the Company expects it will continue to be able
to renew its FOX contracts, although no assurances in this regard can be given.
The network affiliation agreements with ABC (for WPTY-TV in Memphis, Tennessee,
effective December 1, 1995), CBS (for WHP-TV in Harrisburg, Pennsylvania,
renewed and effective December 18, 1995) and NBC (for WPMI-TV in Mobile,
Alabama, effective January 1, 1996) run for ten-year terms. The Company's
network affiliation agreement with UPN for KTTU-TV in Tucson, Arizona, was
entered into in March 1995 and runs for three years.
The Company purchases the broadcast rights for the majority of its
television programming for its FOX and UPN affiliates from various syndicators.
The Company competes with other television stations within each market for these
broadcast rights. The affiliation changes to NBC in Mobile, Alabama/Pensacola,
Florida and to ABC in Memphis, Tennessee have reduced the Company's need to
obtain outside programming in these markets.
Another source of programming is the production of local news programming
on the FOX, CBS, ABC and NBC affiliate stations in Jacksonville, Florida;
Harrisburg, Pennsylvania; Memphis, Tennessee; and Mobile, Alabama/Pensacola,
Florida, respectively. Local news programming traditionally has appealed to a
target audience of adults 25 to 54 years of age. Because these viewers generally
have increased buying power relative to viewers in other demographic groups,
they are one of the most sought-after target audiences for advertisers. With
such programming, these stations are able to attract advertisers to which they
otherwise would not have access.
Revenue is generated primarily from the sale of local and national
advertising, as well as from fees received from the affiliate television
networks. Advertising rates depend primarily on the quantitative and qualitative
characteristics of the audience the Company can deliver to the advertiser. Local
advertising is sold by the Company's sales personnel, while national advertising
is sold by independent national sales representatives. The Company's revenue is
seasonal, with the fourth quarter generating the highest level of revenue and
the first quarter generating the lowest. The fourth quarter generally reflects
higher advertising in preparation for the holiday season and, in the case of
television, the effect of political advertising in election years.
The Company's broadcasting results are dependent on a number of factors,
including the general strength of the economy, population growth, ability to
provide popular programming, relative efficiency of radio and television
broadcasting compared to other advertising media, signal strength, technological
capabilities and developments and governmental regulations and policies.
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<PAGE> 22
DIVERSIFICATION
The following table sets forth the percentage of net broadcasting revenue
of the Company generated from radio and television operations for stations owned
or operated as of December 31, 1995, in each market in 1995.
<TABLE>
<CAPTION>
PERCENTAGE OF 1995
NET BROADCASTING
MARKET REVENUE
- -------------------------------------------------------------------------- ------------------
<S> <C>
Albany/Schenectady/Troy, NY............................................... 3.6%
Austin, TX................................................................ 3.2
Cleveland, OH............................................................. 3.6
Harrisburg/Lebanon/Lancaster, PA.......................................... 0.7
Houston, TX............................................................... 11.1
Jacksonville, FL.......................................................... 5.2
Little Rock, AR........................................................... 3.9
Louisville, KY............................................................ 6.2
Memphis, TN............................................................... 7.7
Miami/Ft. Lauderdale, FL.................................................. 5.2
Minneapolis, MN........................................................... 9.8
Mobile, AL / Pensacola, FL................................................ 3.9
New Haven, CT............................................................. 2.4
New Orleans, LA........................................................... 3.3
Oklahoma City, OK......................................................... 4.1
Richmond, VA.............................................................. 5.1
San Antonio, TX........................................................... 5.9
Tampa, FL................................................................. 6.0
Tulsa, OK................................................................. 6.0
Tucson, AZ................................................................ 0.2
Wichita, KS............................................................... 2.9
-----
100.0%
=====
</TABLE>
The Company believes that the geographic diversity of its operations helps
to protect it from economic downturns in any particular market.
FEDERAL REGULATION OF TELEVISION AND RADIO BROADCASTING
Existing Regulation and Legislation. Television and radio broadcasting are
subject to the jurisdiction of the FCC under the Communications Act of 1934, as
amended (the "Communications Act"). The Communications Act prohibits the
operation of a television or radio broadcasting station except under a license
issued by the FCC and empowers the FCC, among other things, to issue, renew,
revoke and modify broadcasting licenses; assign frequency bands; determine
stations' frequencies, locations and power; regulate the equipment used by
stations; adopt other regulations to carry out the provisions of the
Communications Act; impose penalties for violation of such regulations; and
impose fees for processing applications and other administrative functions. The
Communications Act prohibits the assignment of a license or the transfer of
control of a licensee without prior approval of the FCC. Under the
Communications Act, the FCC also regulates certain aspects of the operation of
cable television systems and other electronic media that compete with broadcast
stations.
The recently enacted the 1996 Act represents the most comprehensive
overhaul of the country's telecommunications laws in more than 60 years. The
1996 Act significantly changes both the broadcast ownership rules and the
process for renewal of broadcast station licenses. The 1996 Act relaxes local
radio ownership restrictions, but leaves local TV restrictions in place pending
further
22
<PAGE> 23
FCC review. The FCC has already implemented some of these changes through
Commission Orders. Additionally, the 1996 Act substantially liberalizes the
national broadcast ownership rules, eliminating the national radio limits and
easing the national restrictions of TV ownership. The 1996 Act establishes a
"two-step" renewal process that limits the FCC's discretion to consider
applications filed in competition with an incumbent's renewal application.
This new regulatory flexibility is likely to engender aggressive local,
regional, and/or national acquisition campaigns. Removal of previous station
ownership limitations on leading incumbents (i.e., existing networks and major
station groups) can be expected to increase sharply the competition for and the
prices of attractive stations.
Multiple Ownership Restrictions. The FCC has promulgated rules that, among
other things, limit the ability of individuals and entities to own or have an
official position or ownership interest above a certain level (an "attributable"
interest, as defined more fully below) in broadcast stations, as well as other
specified mass media entities. Prior to the passage of the 1996 Act, these rules
included limits on the number of radio and television stations that could be
owned on both a national and local basis. On a national basis, the rules
generally precluded any individual or entity from having an attributable
interest in more than 20 AM radio stations, 20 FM radio stations and 12
television stations. Moreover, the aggregate audience reach of the co-owned
television stations could not exceed 25% of all U.S. television households.
The 1996 Act substantially relaxed the television and radio ownership
limitations. The FCC began its implementation of the 1996 Act with several
orders issued on March 8, 1996. With respect to television, the 1996 Act and the
FCC's subsequently issued orders eliminated the 12-station limit for station
ownership and increased the national audience reach limitation from 25% to 35%.
On a local basis, however, the 1996 Act did not alter current FCC rules limiting
an individual entity to maintaining an attributable interest in only one
television station in a market. The 1996 Act did require the FCC to conduct a
rulemaking proceeding, however, to determine whether to narrow the geographic
scope of the local television cross-ownership rule to permit some two-station
combinations in certain large markets (the "TV duopoly rule"). At the time of
the passage of the Act, the FCC had already initiated a rulemaking to consider
whether the TV duopoly rule should be retained, modified or eliminated.
With respect to radio licensees, the 1996 Act and the FCC's subsequently
issued rule changes eliminated the national ownership restriction, allowing a
single entity to own nationally any number of AM or FM broadcast stations. The
1996 Act and the FCC's new rules also greatly eased local radio ownership
restrictions. As with the old rules, the maximum allowable varies depending on
the number of radio stations within a market. In markets with more than 45
stations, one company may own, operate or control eight stations, with no more
than five in any one service (AM or FM). In markets of 30-44 stations, one
company may own seven stations, with no more than four in any one service; in
markets with 15-29 stations, one entity may own six stations, with no more than
four in any one service. In markets with 14 commercial stations or less, one
company may own up to five stations or 50% of all of the stations, whichever is
less, with no more than three in any one service.
In 1992, the FCC placed limitations on LMAs through which the licensee of
one radio station provides the programming for another licensee's station in the
same market. Stations operating in the same service (e.g., where both stations
are AM) and in the same market are prohibited from simulcasting more than 25% of
their programming. Moreover, in determining the number of stations that a single
entity may control, an entity programming a station pursuant to a LMA is
required, under certain circumstances, to count that station toward its maximum
even though it does not own the station. In a pending rulemaking, the FCC is
seeking comment on issues of control and attribution with respect to time
brokerage or LMAs entered into by television stations. The 1996 Act explicitly
stated that none of its provisions should be construed to prohibit the
origination, continuation, or renewal of any television local marketing
agreement that is in compliance with FCC rules. The Conference Committee Report
accompanying the 1996 Act indicated that the purpose of
23
<PAGE> 24
the provision was to grandfather existing LMAs and allow LMAs in the future,
consistent with FCC rules.
A number of cross-ownership rules pertain to licensees of television and
radio stations. FCC rules, the Communications Act or both generally prohibit an
individual or entity from having an attributable interest in both a television
station and a radio station, daily newspaper or cable television system that is
located in the same local market area served by the television station. The FCC
has employed a liberal waiver policy with respect to the TV/radio
cross-ownership restriction (the so-called "one-to-a-market" rule), generally
permitting common ownership of one AM, one FM and one TV station in any of the
25 largest markets, provided there are at least 30 separately owned stations.
The 1996 Act directed the Commission to extend its one-to-a-market waiver policy
to the top 50 markets, consistent with the public interest, convenience and
necessity. Moreover, in a pending 1995 rulemaking the FCC has proposed
eliminating the one-to-a-market rule entirely.
The 1996 Act eliminates a statutory prohibition against common ownership of
television broadcast stations and cable systems serving the same area, but
leaves the current FCC rule in place. The 1996 Act stipulates that the FCC
should not consider the repeal of the statutory ban in any review of its
applicable rules. The recent legislation also eliminates the FCC's former
network/cable cross-ownership limitations, but allows the FCC to adopt
regulations if necessary to ensure carriage, appropriate channel positioning and
nondiscriminatory treatment of non-affiliated broadcast stations on
network-owned cable systems. The FCC has already issued an order dated March 15,
1996 eliminating the network/cable cross-ownership ban, and is expected to
commence proceedings on the local television/cable crossownership limitation
during the second quarter of 1996.
The 1996 Act does not alter the FCC's newspaper/broadcast cross-ownership
restrictions. The 1996 Act does direct the FCC, however, to revise its
long-standing "dual network" rule to permit television broadcast stations to
affiliate with an entity that maintains two or more networks, unless the
combination is composed of (a) two of the four existing networks (ABC, CBS, NBC
or FOX) or (b) any of the four existing networks and one of the two emerging
networks (WBN or UPN). The Commission issued an order implementing this change
on March 8, 1996.
Expansion of the Company's broadcast operations in particular areas and
nationwide will continue to be subject to the FCC's ownership rules and any
further changes the FCC or Congress may adopt. Significantly, the 1996 Act
requires the Commission to review its remaining ownership rules biennially -- as
part of its regulatory reform obligations -- to determine whether its various
rules are still necessary. The Company cannot predict the impact of the biennial
review process or any other agency or legislative initiatives upon the FCC's
broadcast rules. Further, the 1996 Act's relaxation of the FCC's ownership rules
may increase the level of competition in one or more of the markets in which the
Company's stations are located, particularly to the extent that any of the
Company's competitors may have greater resources and thereby be in a better
position to capitalize on such changes.
Under the FCC's ownership rules, a direct or indirect purchaser of certain
types of securities of the Company could violate FCC regulations if that
purchaser owned or acquired an "attributable" or "meaningful" interest in other
media properties in the same areas as stations owned by the Company or in a
manner otherwise prohibited by the FCC. All officers and directors of a
licensee, as well as general partners, limited partners who are not properly
"insulated" from management activities, and stockholders who own five percent or
more of the outstanding voting stock of a licensee (either directly or
indirectly), generally will be deemed to have an attributable interest in the
license. Certain institutional investors who exert no control or influence over
a licensee may own up to ten percent of such outstanding voting stock before
attribution occurs. Under current FCC regulations, debt instruments, non-voting
stock, properly insulated limited partnership interests (as to which the
licensee certifies that the limited partners are not "materially involved" in
the management and operation of the subject media property) and voting stock
held by minority stockholders in cases in which there is a single majority
stockholder generally are not subject to attribution. The FCC's
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<PAGE> 25
"crossinterest" policy, which precludes an individual or entity from having a
"meaningful" (even though not attributable) interest in one media property and
an attributable interest in a broadcast, cable or newspaper property in the same
area, may be invoked in certain circumstances to reach interests not expressly
covered by the multiple ownership rules.
In January 1995, the FCC initiated a rulemaking proceeding designed to
permit a "thorough review of [its] broadcast media attribution rules." Among the
issues on which comment was sought were (i) whether to change the voting stock
attribution benchmarks from five percent to ten percent and, for passive
investors, from ten percent to twenty percent; (ii) whether there are any
circumstances in which non-voting stock interests, which are currently
considered non-attributable, should be considered attributable; (iii) whether
the FCC should eliminate its single majority shareholder exception (pursuant to
which voting interests in excess of five percent are not considered cognizable
if a single shareholder owns more than fifty percent of the voting power); (iv)
whether to relax insulation standards for business development companies and
other widely-held limited partnerships; (v) how to treat limited liability
companies and other new business forms for attribution purposes; (vi) whether to
eliminate or codify the cross-interest policy; and (vii) whether to adopt a new
policy which would consider whether multiple cross interests or other
significant business relationships (such as time brokerage agreements, debt
relationships or holdings of nonattributable interests), which individually do
not raise concerns, raise issues with respect to diversity and competition. The
Company cannot predict with certainty when this proceeding will be concluded or
whether any of these standards will be changed. Should the attribution rules be
changed, the Company is unable to predict what effect, if any, such changes
would have on the Company or its activities. To the best of the Company's
knowledge at present, no officer, director or five percent stockholder of the
Company holds an interest in another television station, radio station, cable
television system or daily newspaper that is inconsistent with the FCC's
ownership rules and policies or the Company's continued ownership of its
television stations.
License Grant and Renewal. Prior to the passage of the 1996 Act, television
and radio broadcasting licenses generally were granted or renewed for a period
of five and seven years, respectively, upon a finding by the FCC that the
"public interest, convenience, and necessity" would be served thereby. At the
time an application is made for renewal of a television or radio license,
parties in interest may file petitions to deny the application, and such
parties, including members of the public, may comment upon the service the
station has provided during the preceding license term. In addition, prior to
passage of the 1996 Act, any person was permitted to file a competing
application for authority to operate on the station's channel and replace the
incumbent licensee. Renewal applications were granted without a hearing if there
were no competing applications or if issues raised by petitioners to deny such
applications were not serious enough to cause the FCC to order a hearing. If
competing applications were filed, a full comparative hearing was required.
Under the 1996 Act, the statutory restriction on the length of broadcast
licenses has been amended to allow the FCC to grant broadcast licenses for terms
of up to eight years. The 1996 Act also requires renewal of a broadcast license
if the FCC finds that (1) the station has served the public interest,
convenience, and necessity; (2) there have been no serious violations of either
the Communications Act or the FCC's rules and regulations by the licensee; and
(3) there have been no other serious violations which taken together constitute
a pattern of abuse. In making its determination, the FCC may still consider
petitions to deny but cannot consider whether the public interest would be
better served by a person other than the renewal applicant. Instead, under the
1996 Act, competing applications for the same frequency may be accepted only
after the Commission has denied an incumbent's application for renewal of
license.
By order dated April 12, 1996, the FCC modified its rules to implement the
new two-step renewal procedure and to eliminate the right to file an application
that is mutually exclusive with a renewal. Also on April 12, 1996, the FCC
issued a notice of Proposed Rulemaking to consider how to implement the new,
longer license term provision of the 1996 Act.
25
<PAGE> 26
Although in the vast majority of cases broadcast licenses are granted by
the FCC even when petitions to deny are filed against them, there can be no
assurance that any of the Company's stations' licenses will be renewed.
Alien Ownership Restrictions. The Communications Act restricts the ability
of foreign entities or individuals to own or hold certain interests in broadcast
licenses. Foreign governments, representatives of foreign governments, non-U.S.
citizens, representatives of non-U.S. citizens, and corporations or partnerships
organized under the laws of a foreign nation are barred from holding broadcast
licenses. Non-U.S. citizens, collectively, may directly or indirectly own or
vote up to twenty percent of the capital stock of a licensee. In addition, a
broadcast license may not be granted to or held by any corporation that is
controlled, directly or indirectly, by any other corporation more than one-
fourth of whose capital stock is owned or voted by non-U.S. citizens or their
representatives, by foreign governments or their representatives, or by non-U.S.
corporations, if the FCC finds that the public interest will be served by the
refusal or revocation of such license. The FCC has interpreted this provision of
the Communications Act to require an affirmative public interest finding before
a broadcast license may be granted to or held by any such corporation, and the
FCC has made such an affirmative finding only in limited circumstances. The
Company, which serves as a holding company for subsidiaries that serve as
licensees for the stations, therefore may be restricted from having more than
one-fourth of its stock owned or voted directly or indirectly by non-U.S.
citizens, foreign governments, representatives of non-U.S. citizens or foreign
governments, or foreign corporations. The Communications Act previously also
prohibited grant of a broadcast station license (i) to any corporation with an
alien officer or director, or (ii) to any corporation controlled by another
corporation with any alien officers or more than one-fourth alien directors. The
restrictions on non-U.S. citizens serving as officers or directors of licensees
and their parent corporations have been eliminated, however, by the 1996 Act.
Other Regulations Affecting Broadcast Stations. The FCC has significantly
reduced its past regulation of broadcast stations, including elimination of
formal ascertainment requirements and guidelines concerning amounts of certain
types of programming and commercial matter that may be broadcast. In 1990, the
U.S. Supreme Court refused to review a lower court decision that upheld the
FCC's 1987 action invalidating most aspects of the Fairness Doctrine, which had
required broadcasters to present contrasting views on controversial issues of
public importance. The FCC may, however, continue to regulate other aspects of
fairness obligations in connection with certain types of broadcasts. In
addition, there are FCC rules and policies, and rules and policies of other
federal agencies, that regulate matters such as network-affiliate relations, the
ability of stations to obtain exclusive rights to air syndicated programming,
cable systems' carriage of syndicated and network programming on distant
stations, political advertising practices, equal employment opportunity,
application procedures and other areas affecting the business or operations of
broadcast stations. The FCC has adopted rules to implement the Children's
Television Act of 1990 ("Children's Television Act"), which, among other
provisions, limits the permissible amount of commercial matter in children's
programs and requires each television station to present "educational and
informational" children's programming.
Recent Developments, Proposed Legislation and Regulation. The FCC recently
decided to eliminate the prime time access rule ("PTAR"), effective August 30,
1996. The PTAR currently limits the ability of television stations within the
fifty largest markets that are affiliated with ABC, CBS, or NBC to broadcast
network programming (including syndicated programming previously broadcast over
any of these networks) during certain prime time hours. The elimination of the
PTAR could increase the amount of network programming broadcast over a station
affiliated with ABC, CBS or NBC. Such elimination also could result in (i) an
increase in the compensation paid by the network (due to the additional prime
time hours during which network programming could be aired by a
network-affiliated station) and (ii) increased competition for syndicated
network programming that previously was unavailable for broadcast by network
affiliates during prime time. The FCC also recently announced the elimination of
its remaining financial interest and syndication
26
<PAGE> 27
("Fin/syn") rules. The original rules, first adopted in 1970, severely
restricted the ability of ABC, CBS and NBC to obtain financial interests in, or
participate in syndication of, prime-time entertainment programming created by
independent producers for airing during the networks' evening schedules. The FCC
previously lifted the financial interest rules and restraints on foreign
syndication. In January 1996, the Supreme Court refused to review lower court
decisions that upheld the FCC's restrictions on the broadcast of indecent
material and also upheld the agency's policy of imposing substantial monetary
sanctions on repeat offenders of the indecency rules. The rules require stations
to limit the airing of indecent programming to a 10 p.m.-6 a.m. "safe harbor"
period.
The FCC presently is seeking comment on its policies designed to increase
minority ownership of mass media facilities. Congress, however, recently enacted
legislation that eliminated the minority tax certificate program of the FCC,
which gave favorable tax treatment to entities selling broadcast stations to
entities controlled by an ethnic minority. In addition, a recent Supreme Court
decision has cast into doubt the continued validity of other FCC programs
designed to increase minority ownership of mass media facilities.
Congress and the FCC currently have under consideration, and may in the
future adopt, new laws, regulations and policies regarding a wide variety of
matters that could affect, directly or indirectly, the operation and ownership
of the Company's broadcast properties. In addition to the changes and proposed
changes noted above, such matters include, for example, the license renewal
process, spectrum use fees, political advertising rates, potential restrictions
on the advertising of certain products (beer and wine, for example), the rules
and policies to be applied in enforcing the FCC's equal employment opportunity
regulations, standards to more strictly define the type and quantify the amount
of educational and informational programming required under the Children's
Television Act, and regulatory schemes to control the amount of violent
television programming accessible to children (including implementation, as
required under the 1996 Act, of the so-called "V-chip technology," which would
permit parents to program television sets so that certain programming would be
inaccessible to children). Other matters that could affect the Company's
broadcast properties include technological innovations and developments
generally affecting competition in the mass communications industry, such as the
recent initiation of direct broadcast satellite service, the continued
establishment of wireless cable systems and low power television stations, and
the advent of telephone company participation in the provision of video
programming service.
The foregoing does not purport to be a complete summary of all the
provisions of the Communications Act, or the 1996 Act, nor of the regulations
and policies of the FCC thereunder. The 1996 Act and the rules and regulations
thereunder also apply to the distribution of video services by telephone
companies and revisions to the subject matter of the Cable Television Consumer
Protection and Competition Act of 1992. The FCC has under consideration the
initiation of advanced television service, digital audio radio service, and the
expansion of direct broadcast satellite service. Proposals for additional or
revised regulations and requirements are pending before and are being considered
by Congress and federal regulatory agencies from time to time. Also, various of
the foregoing matters are now, or may become, the subject of court litigation,
and the Company cannot predict the outcome of any such litigation or the impact
on its broadcast business. For additional information relating to regulatory
matters, see "Business -- Federal Regulation of Television and Radio
Broadcasting" set forth in the Company's Annual Report on Form 10-K for the year
ended December 31, 1995, as amended, incorporated by reference herein.
MANAGEMENT
The Company believes that one of its most important assets is its
experienced management team. General managers are responsible for the day-to-day
operation of their respective stations. The Company believes that the autonomy
of its station management enables it to attract top quality managers capable of
implementing the Company's aggressive marketing strategy and reacting to
competition in the local markets. Most general managers have stock options in
the Company. As an
27
<PAGE> 28
additional incentive, a portion of each manager's compensation is related to the
performance of the station or stations for which he or she is responsible. In an
effort to monitor expenses, corporate management routinely reviews staffing
levels and programming costs. Combined with the centralized accounting
functions, this monitoring enables the Company to control expenses effectively.
Corporate management also advises local station managers on programming and
other broad policy matters and is responsible for long-range planning,
allocating resources, and financial reporting and controls.
The Company, which began operations in 1972, has its principal executive
offices at 200 Concord Plaza, Suite 600, San Antonio, Texas 78216 (telephone:
210-822-2828).
DESCRIPTION OF CAPITAL STOCK
The authorized capital stock of the Company consists of 2,000,000 shares of
preferred stock, $1.00 par value per share ("Preferred Stock"), and 100,000,000
shares of Common Stock, $.10 par value per share, of which no shares of
Preferred Stock and 34,614,826 shares of Common Stock were issued and
outstanding at May 15, 1996.
PREFERRED STOCK
The Board of Directors has the authority to issue up to 2,000,000 shares of
Preferred Stock, in one or more series, and to fix the rights, preferences,
privileges and qualifications thereof without any further vote or action by the
shareholders. The issuance of Preferred Stock could decrease the amount of
earnings and assets available for distribution to holders of Common Stock, and
adversely affect the rights and powers, including voting rights, of such holders
and may have the effect of delaying, deferring or preventing a change in control
of the Company. No shares of Preferred Stock have ever been issued, and the
Company does not presently contemplate the issuance of Preferred Stock.
COMMON STOCK
Holders of Common Stock are entitled to one vote per share on all matters
submitted to a vote of shareholders of the Company and to ratably receive
dividends, if any, as may be declared from time to time by the Board of
Directors from funds legally available therefor, subject to the payment of any
preferential dividends declared with respect to any Preferred Stock that from
time to time may be outstanding. Upon liquidation, dissolution or winding up of
the Company, holders of Common Stock are entitled to share ratably in any assets
available for distribution to shareholders after payment of all obligations of
the Company, subject to the rights to receive preferential distributions of the
holders of any Preferred Stock then outstanding.
Shareholders do not have cumulative voting rights or preemptive or other
rights to acquire or subscribe to additional, unissued or treasury shares. The
shares of Common Stock currently outstanding are, and the shares of Common Stock
offered hereby will be, upon issuance thereof, validly issued, fully paid and
nonassessable.
REPURCHASE AGREEMENT
In May 1977, the Company and its then shareholders, including L. Lowry Mays
and B.J. McCombs, entered into a Buy-Sell Agreement (the "Repurchase Agreement")
restricting the disposition of the outstanding shares of Common Stock owned by
L. Lowry Mays and B.J. McCombs and their heirs, legal representatives,
successors and assigns (collectively, the "Restricted Parties"). The Repurchase
Agreement provides that in the event that a Restricted Party desires to dispose
of his shares, other than by disposition by will or intestacy or through gifts
to such Restricted Party's spouse or children, such shares must be offered for a
period of 30 days to the Company. Any shares not purchased by the Company must
then be offered for a period of 30 days to the other Restricted
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<PAGE> 29
Parties. If all of the offered shares are not purchased by the Company or the
other Restricted Parties, the Restricted Party offering his shares may sell them
to a third party during a period of 90 days thereafter at a price and on terms
not more favorable than those offered to the Company and the other Restricted
Parties. In addition, a Restricted Party may not individually or in concert with
others sell any shares so as to deliver voting control to a third party without
providing in any such sale that all Restricted Parties will be offered the same
price and terms for their shares. The Repurchase Agreement will continue in
effect following the Offering and may preserve the control of the present
principal shareholders.
FOREIGN OWNERSHIP
As a consequence of the restrictions imposed by the Communications Act on
ownership of Common Stock by aliens, the Company's bylaws were amended effective
December 31, 1983 to provide that (i) not more than one-fifth of the shares
outstanding shall at any time be owned of record, or voted, by or for the
account of aliens, their representatives, a foreign government or a corporation
organized under the laws of a foreign country, (ii) the Company shall not be
owned or controlled directly or indirectly by any other corporation of which any
officer or more than one-fourth of the directors are aliens or of which more
than one-fourth of the shares are owned of record or voted by aliens, (iii) no
person who is an alien may be elected or serve as an officer or director of the
Company, and (iv) if the stock records of the Company shall at any time reflect
one-fifth ownership, no transfers of additional shares to aliens shall be made
and, if it shall thereafter be found that any such additional shares are in fact
held by or for the account of an alien, such shares shall not be entitled to
vote, to receive dividends or to have any other rights. The holder of such
shares will be required to transfer them to a United States citizen or to the
Company. This restriction will be applicable to the shares of Common Stock
offered hereby and to the issuance or transfer of such shares after the date of
this Prospectus. The Company's stock certificates will bear a legend setting
forth this restriction.
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<PAGE> 30
UNDERWRITING
Subject to the terms and conditions of the Underwriting Agreement, the
Underwriters named below (the "Underwriters") have severally agreed to purchase
from the Company the following respective number of shares of Common Stock at
the public offering price less the underwriting discounts and commissions set
forth on the cover page of this Prospectus:
<TABLE>
<CAPTION>
NUMBER OF
UNDERWRITER SHARES
- -------------------------------------------------------------------------------- ---------
<S> <C>
Alex. Brown & Sons Incorporated................................................. 875,000
CS First Boston Corporation..................................................... 875,000
Goldman, Sachs & Co. ........................................................... 875,000
Lehman Brothers Inc. ........................................................... 875,000
---------
Total................................................................. 3,500,000
=========
</TABLE>
The Underwriting Agreement provides that the obligations of the
Underwriters are subject to certain conditions precedent and that the
Underwriters will purchase all shares of Common Stock offered hereby if any of
such shares are purchased.
The Company has been advised by the Underwriters that the Underwriters
propose to offer the shares of Common Stock to the public at the public offering
price set forth on the cover page of this Prospectus, and to certain dealers at
such price less a concession not in excess of $1.80 per share. The Underwriters
may allow, and such dealers may reallow, a concession not in excess of $.10 per
share to certain other dealers. After the Offering, the offering price and other
selling terms may be changed by the Underwriters.
The Company has granted to the Underwriters an option, exercisable not
later than 30 days after the date of this Prospectus, to purchase up to 350,000
additional shares of Common Stock at the public offering price less the
underwriting discounts and commission set forth on the cover page of this
Prospectus. To the extent that the Underwriters exercise such option, each of
the Underwriters will have a firm commitment to purchase approximately the same
percentage thereof that the number of shares of Common Stock to be purchased by
it shown in the above table bears to 350,000, and the Company will be obligated,
pursuant to the option, to sell such shares to the Underwriters. The
Underwriters may exercise such option only to cover over-allotments made in
connection with the sale of Common Stock offered hereby. If purchased, the
Underwriters will offer such additional shares on the same terms as those in
which the 3,500,000 shares are being offered.
The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as amended.
The Company and Messrs. L. Lowry Mays and B.J. McCombs have agreed that
they will not, directly or indirectly, offer, sell or otherwise dispose of any
equity securities of the Company or any securities convertible into, or
exchangeable for, or any rights to purchase or acquire, equity securities of the
Company (other than employee stock options granted by the Company in the
ordinary course of business) for a period of 90 days after the date of this
Prospectus, without the prior written consent of Alex. Brown & Sons
Incorporated.
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<PAGE> 31
LEGAL OPINIONS
Certain legal matters in connection with the shares of Common Stock offered
hereby will be passed upon for the Company by its special counsel, Akin, Gump,
Strauss, Hauer & Feld, L.L.P. (a partnership including professional
corporations), San Antonio, Texas, and for the Underwriters by their special
counsel, Wolin, Fuller, Ridley & Miller LLP, Dallas, Texas. Alan D. Feld, the
sole shareholder of a professional corporation which is a partner of Akin, Gump,
Strauss, Hauer & Feld, L.L.P., is a director of the Company and owns 34,615
shares of Common Stock (including presently exercisable nonqualified options to
acquire 14,375 shares).
EXPERTS
The consolidated financial statements (including schedules) of the Company
included or incorporated by reference in the Company's Annual Report (Form 10-K)
for the year ended December 31, 1995, have been audited by Ernst & Young LLP,
independent auditors, as set forth in their reports thereon included or
incorporated by reference therein and incorporated herein by reference which, as
to the year 1995, is based in part on the report of KPMG, independent auditors.
The financial statements referred to above are incorporated herein by reference
in reliance upon such reports given upon the authority of such firms as experts
in accounting and auditing.
The consolidated financial statements of Australian Radio Network Pty Ltd
incorporated by reference in the Company's Current Report (Form 8-K) dated May
26, 1995, as amended by Form 8-K/A dated July 27, 1995, have been audited by
KPMG, independent auditors, as set forth in their reports thereon included
therein and incorporated herein by reference. The financial statements referred
to above are incorporated herein by reference in reliance upon such reports
given upon the authority of such firm as experts in accounting and auditing.
The consolidated financial statements of Wesgo Limited and controlled
entities at June 30, 1994 for the year ended June 30, 1994 and at December 31,
1994 for the six month period ended December 31, 1994, and the combined
financial statements of Albert's radio stations, acquired by the Australian
Radio Network Pty Limited, at June 30, 1994 for the year ended June 30, 1994 and
at December 31, 1994 for the six month period ended December 31, 1994, included
in the Company's Current Report (Form 8-K/A) dated July 27, 1995, have been
incorporated by reference herein in reliance upon the reports of KPMG,
independent auditors, incorporated by reference herein, and upon the authority
of said firm as experts in accounting and auditing.
The consolidated financial statements of US Radio, Inc. for the years ended
December 31, 1995 and 1994, included in the Company's Current Report (Form 8-K)
dated May 24, 1996, have been audited by Ernst & Young LLP, independent
auditors, as set forth in their report thereon included therein and incorporated
herein by reference. Such consolidated financial statements are incorporated
herein by reference in reliance upon such report given upon the authority of
such firm as experts in accounting and auditing.
The combined financial statements of Ragan Henry Communications Group,
L.P., US Radio, L.P. and US Radio Stations, L.P. for the year ended December 31,
1994, included in the Company's Current Report (Form 8-K) dated May 24, 1996
have been audited by Ernst & Young LLP, independent auditors, as set forth in
their report thereon incorporated herein by reference. Such combined financial
statements are incorporated herein by reference in reliance upon such report
given upon the authority of such firm as experts in accounting and auditing.
The consolidated financial statements of Radio Equity Partners, L.P. and
its subsidiary as of December 31, 1995 and 1994, and for the years then ended
have been incorporated herein by reference in reliance upon the report of KPMG
Peat Marwick LLP, independent certified public accountants, appearing in the
Form 8-K of Clear Channel Communications, Inc. dated June 5, 1996, and upon the
authority of said firm as experts in accounting and auditing.
31
<PAGE> 32
AVAILABLE INFORMATION
The Company is subject to the information requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") and, in accordance
therewith, files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Reports, proxy and
information statements filed by the Company with the Commission pursuant to the
information requirements of the Exchange Act may be inspected and copied at the
public reference facilities maintained by the Commission at 450 Fifth Street,
N.W., Washington, D.C. 20549, and at the following Regional Offices of the
Commission: New York Regional Office, Seven World Trade Center, 14th Floor, New
York, New York, 10048, Los Angeles Regional Office, Suite 500 East, Tishman
Building, 5757 Wilshire Boulevard, Los Angeles, California, 90036, and Chicago
Regional Office, 500 W. Madison Street, 14th Floor, Chicago, Illinois 60661.
Copies of such material may be obtained from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed
rates. In addition, reports, proxy statements and other information concerning
the Company can be inspected and copied at the offices of the New York Stock
Exchange ("NYSE"), 20 Broad Street, New York, New York 10005, on which the
Common Stock of the Company (symbol: "CCU") is listed.
This Prospectus, which constitutes a part of a Registration Statement filed
by the Company with the Commission under the Securities Act, omits certain
information contained in the Registration Statement, and reference is hereby
made to the Registration Statement and to the exhibits thereto for further
information with respect to the Company and the Common Stock offered hereby.
Statements contained herein concerning provisions of any document are not
necessarily complete, and each statement is qualified in its entirety by
reference to the copy of such document filed with the Commission.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, heretofore filed by the Company with the
Commission pursuant to the Exchange Act, are hereby incorporated by reference
into this Prospectus and made a part hereof:
1. The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1995, dated March 29, 1996, as amended by Form 10-K/A, dated
April 19, 1996.
2. The Company's Quarterly Report on Form 10-Q for the fiscal quarter
ended March 31, 1995, dated May 15, 1996.
3. The Company's Current Report on Form 8-K dated May 24, 1996.
4. The Company's Current Report on Form 8-K dated May 26, 1995, as
amended by Form 8-K/A dated July 27,1995.
5. The Company's Current Report on Form 8-K dated June 5, 1996.
Any documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this Prospectus and prior to the
termination of the Offering of the Common Stock offered hereby shall be deemed
to be incorporated by reference in this Prospectus and to be a part hereof from
the date of filing of such documents.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any other subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus. To the extent that any
proxy statement is incorporated by reference herein, such incorporation shall
not include any information contained in
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<PAGE> 33
such proxy statement which is not, pursuant to the Commission's rules, deemed to
be "filed" with the Commission or subject to the liabilities of Section 18 of
the Exchange Act.
The Company will provide without charge to each person, including any
beneficial owner, to whom a copy of this Prospectus is delivered, upon the
written or oral request of any such person, a copy of any document described
above (other than exhibits, unless such exhibits are specifically incorporated
by reference). Requests for such copies should be directed, to Randall Mays,
Clear Channel Communications, Inc., 200 Concord Plaza, Suite 600, San Antonio,
Texas 78216 (telephone: (210) 822-2828).
33
<PAGE> 34
================================================================================
NO PERSON HAS BEEN AUTHORIZED IN CONNECTION WITH OFFERING MADE HEREBY TO
GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS
PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY UNDERWRITER. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF ANY OFFER
TO BUY ANY OF THE SECURITIES OFFERED HEREBY TO ANY PERSON OR BY ANYONE IN ANY
JURISDICTION IN WHICH IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. NEITHER
THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE INFORMATION CONTAINED HEREIN IS
CORRECT AS OF ANY DATE SUBSEQUENT TO THE DATE HEREOF.
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary.................................................. 3
Risk Factors........................................................ 8
Capitalization...................................................... 11
Use of Proceeds..................................................... 12
Price Range of Common Stock......................................... 12
Dividend Policy..................................................... 12
Selected Financial Information...................................... 13
Management's Discussion and Analysis of Financial Conditions
and Results of Operations......................................... 15
Business............................................................ 16
Description of Capital Stock........................................ 28
Underwriting........................................................ 30
Legal Opinions...................................................... 31
Experts............................................................. 31
Available Information............................................... 32
Incorporation of Certain Documents by Reference..................... 32
================================================================================
</TABLE>
================================================================================
3,500,000 SHARES
[CLEAR CHANNEL LOGO]
[CLEAR CHANNEL COMMUNICATIONS, INC.]
COMMON STOCK
-----------------------
PROSPECTUS
-----------------------
ALEX. BROWN & SONS
INCORPORATED
CS FIRST BOSTON
GOLDMAN, SACHS & CO.
LEHMAN BROTHERS
June 14, 1996
================================================================================
