<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
September 6, 2000
(August 30, 2000)
Clear Channel Communications, Inc.
(Exact name of registrant as specified in its charter)
Texas
(State of Incorporation)
1-9645 74-1787536
(Commission File Number) (I.R.S. Employer Identification No.)
200 East Basse Road
San Antonio, Texas 78209
(210) 822-2828
(Address and telephone number of principal executive offices)
<PAGE> 2
Clear Channel Communications, Inc.
Form 8-K
Item 2.(a) Acquisition or Disposition of Assets.
On August 30, 2000, Clear Channel Communications, Inc., (the "Company" or
"Registrant"), a Texas corporation, and AMFM Inc., a Delaware corporation
("AMFM"), consummated a merger (the "Merger") whereby CCU Merger Sub, Inc., a
Delaware corporation and a wholly-owned subsidiary of the Company ("Sub"), was
merged with and into AMFM pursuant to the Agreement and Plan of merger (the
"Merger Agreement"), dated October 2, 1999. As a result of the Merger, AMFM has
become a wholly-owned subsidiary of the Company. The Merger was a tax-free,
stock-for-stock transaction.
Pursuant to the terms and conditions set forth in the Merger Agreement, AMFM
shareholders received 0.94 shares of Clear Channel Communications, Inc. common
stock for each AMFM share. The Company will issue an aggregate of approximately
205.4 million shares of Clear Channel Common Stock in exchange for shares of
AMFM common stock.
Item 2.(b)
AMFM is a national radio broadcasting and related media company with operations
in radio broadcasting and media representation. AMFM's operations include
approximately 415 radio stations and Katz Media, a full-service media
representation firm that sells national spot advertising time for its clients in
the radio and television industries.
Item 7.(a) Financial Statements of Businesses Acquired.
<PAGE> 3
AMFM INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS, EXCEPT FOR SHARE DATA)
<TABLE>
<CAPTION>
DECEMBER 31, JUNE 30,
1999 2000
------------ -----------
(UNAUDITED)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents................................. $ 59,277 $ 76,900
Accounts receivable, less allowance for doubtful accounts
of $21,428 in 1999 and $27,000 in 2000................. 531,818 547,935
Other current assets...................................... 92,324 61,802
----------- -----------
Total current assets.............................. 683,419 686,637
Property and equipment, net................................. 471,508 445,171
Intangible assets, net...................................... 10,346,005 9,896,518
Investments in non-consolidated affiliates.................. 1,103,442 1,058,154
Other assets, net........................................... 261,434 239,028
----------- -----------
$12,865,808 $12,325,508
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses..................... $ 293,155 $ 277,494
Long-term debt.............................................. 5,890,217 5,742,027
Deferred tax liabilities.................................... 1,707,023 1,628,643
Other liabilities........................................... 60,154 49,052
----------- -----------
Total liabilities................................. 7,950,549 7,697,216
----------- -----------
Commitments and contingencies
Minority interest in consolidated subsidiary................ 3,694 3,192
Redeemable senior exchangeable preferred stock of
subsidiary, par value $.01 per share; 10,000,000 shares
authorized in 1999; 1,254,616 shares issued and
outstanding in 1999....................................... 151,982 --
Stockholders' equity:
Preferred stock, $.01 par value. 2,200,000 shares of 7%
convertible preferred stock authorized, issued and
outstanding in 1999.................................... 110,000 --
Common stock, $.01 par value. 750,000,000 shares
authorized; 210,158,922 shares and 217,600,324 shares
issued and outstanding in 1999 and 2000,
respectively........................................... 2,102 2,176
Paid-in capital........................................... 5,115,785 5,308,725
Accumulated deficit....................................... (468,304) (685,801)
----------- -----------
Total stockholders' equity........................ 4,759,583 4,625,100
----------- -----------
$12,865,808 $12,325,508
=========== ===========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
3
<PAGE> 4
AMFM INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
------------------- ----------------------
JUNE 30, JUNE 30, JUNE 30, JUNE 30,
1999 2000 1999 2000
-------- -------- --------- ----------
<S> <C> <C> <C> <C>
Gross revenues.................................. $490,720 $722,825 $ 884,843 $1,311,709
Less agency commissions....................... 56,574 84,924 100,432 152,538
-------- -------- --------- ----------
Net revenues.......................... 434,146 637,901 784,411 1,159,171
Operating expenses.............................. 219,258 318,485 427,768 626,573
Depreciation and amortization................... 145,139 222,994 292,883 435,485
Corporate general and administrative............ 12,798 14,010 30,612 29,312
Non-cash compensation........................... -- 957 -- 35,835
Merger and non-recurring costs.................. -- 7,831 28,979 18,946
-------- -------- --------- ----------
Operating income.............................. 56,951 73,624 4,169 13,020
Interest expense, net........................... 87,719 119,032 172,111 242,677
Gain on disposition of assets................... (12,488) (8,285) (12,406) (31,104)
Gain on disposition of representation
contracts..................................... (5,168) (772) (8,853) (16,989)
-------- -------- --------- ----------
Loss before income taxes...................... (13,112) (36,351) (146,683) (181,564)
Income tax expense (benefit).................... 2,777 (9,767) (27,349) (20,516)
Credit on exchange of preferred stock of
subsidiary.................................... -- -- -- 3,310
-------- -------- --------- ----------
Loss before equity in net loss of affiliates
and minority interest and extraordinary
item....................................... (15,889) (26,584) (119,334) (157,738)
Equity in net loss of affiliates and minority
interest...................................... 200 22,717 200 47,089
-------- -------- --------- ----------
Loss before extraordinary item................ (16,089) (49,301) (119,534) (204,827)
Extraordinary loss, net of income tax benefit... -- 6,255 -- 12,349
-------- -------- --------- ----------
Net loss.............................. (16,089) (55,556) (119,534) (217,176)
Preferred stock dividends....................... 6,418 -- 12,835 321
-------- -------- --------- ----------
Net loss attributable to common
stockholders............................... $(22,507) $(55,556) $(132,369) $ (217,497)
======== ======== ========= ==========
Basic and diluted loss per common share:
Before extraordinary item..................... $ (0.16) $ (0.23) $ (0.93) $ (0.95)
Extraordinary item............................ -- (0.03) -- (0.06)
-------- -------- --------- ----------
Net loss.............................. $ (0.16) $ (0.26) $ (0.93) $ (1.01)
======== ======== ========= ==========
Weighted average common shares outstanding...... 143,334 217,111 142,349 216,113
======== ======== ========= ==========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
4
<PAGE> 5
AMFM INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
---------------------
JUNE 30, JUNE 30,
1999 2000
--------- ---------
<S> <C> <C>
Net cash provided by operating activities................... $ 71,886 $ 246,942
--------- ---------
Cash flows from investing activities:
Acquisitions, net of cash acquired........................ (364,608) (5,255)
Proceeds from sale of assets.............................. 44,085 101,076
Purchases of property and equipment....................... (17,685) (23,259)
Construction of advertising structures.................... (16,687) --
Payments made for purchases of representation contracts... (16,249) (13,704)
Payments received from sales of representation
contracts.............................................. 10,914 9,323
Other..................................................... (33,158) 6,063
--------- ---------
Net cash provided by (used by) investing
activities...................................... (393,388) 74,244
--------- ---------
Cash flows from financing activities:
Proceeds of long-term debt................................ 427,000 362,500
Payments on long-term debt................................ (103,000) (681,912)
Net proceeds from issuance of equity instruments.......... 20,466 25,302
Dividends on preferred stock.............................. (12,835) (9,453)
--------- ---------
Net cash provided by (used by) financing
activities...................................... 331,631 (303,563)
--------- ---------
Increase in cash and cash equivalents....................... 10,129 17,623
Cash and cash equivalents at beginning of period............ 12,256 59,277
--------- ---------
Cash and cash equivalents at end of period.................. $ 22,385 $ 76,900
========= =========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
5
<PAGE> 6
AMFM INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE DATA)
1. BASIS OF PRESENTATION
The accompanying unaudited interim financial statements include the
accounts of AMFM Inc. and its wholly-owned and majority-owned subsidiaries
(collectively, the "Company" or "AMFM"). All significant intercompany balances
and transactions have been eliminated in consolidation and, in the opinion of
management, all adjustments (consisting of normal recurring accruals) necessary
to present fairly the financial position, results of operations and cash flows
have been recorded. Investments in which the Company owns 20 percent to 50
percent of the voting common stock or otherwise exercises significant influence
over operating and financial policies of the investee are accounted for using
the equity method. Interim period results are not necessarily indicative of
results to be expected for the year.
These financial statements should be read in conjunction with the
consolidated financial statements and the notes thereto included in the
Company's Annual Report on Form 10-K for the year ended December 31, 1999. The
year-end consolidated balance sheet data was derived from the audited financial
statements, but does not include all disclosures required by generally accepted
accounting principles.
Loss per common share is based on the weighted average shares of common
stock outstanding during the period. Weighted average shares excluded from the
calculation that related to potentially dilutive securities amounted to
approximately 23.5 million and 7.8 million for the three months ended June 30,
1999 and 2000, respectively, and 23.2 million and 8.7 million for the six months
ended June 30, 1999 and 2000, respectively. Such shares have been excluded as
their inclusion would have been antidilutive.
Certain reclassifications have been made to prior period condensed
consolidated financial statements to conform to the current period presentation.
2. CLEAR CHANNEL MERGER
On October 2, 1999, AMFM and Clear Channel Communications, Inc. ("Clear
Channel") entered into a definitive merger agreement. Under the terms of the
merger agreement, AMFM stockholders will receive 0.94 shares of Clear Channel
common stock, on a fixed exchange basis, for each share of the Company's common
stock held on the closing date of the transaction and AMFM will become a
wholly-owned subsidiary of Clear Channel. On April 26, 2000 and April 27, 2000,
stockholders of both companies approved the merger. On July 20, 2000, the U.S.
Department of Justice preliminarily cleared the merger after AMFM and Clear
Channel agreed to divest approximately 100 stations in 27 markets and also to
dispose of AMFM's approximate 30% equity interest in Lamar Advertising Company
("Lamar"). AMFM and Clear Channel are currently negotiating a consent decree
with the U.S. Department of Justice documenting the agreement reached. To date,
AMFM and Clear Channel have signed definitive agreements to sell approximately
100 radio stations for aggregate proceeds of approximately $4.2 billion. Of
these stations, 58 are owned and operated by AMFM. As the transaction is
currently structured, a further seven stations currently owned by AMFM will be
put into trust until the eventual sale of these stations can be approved by the
various regulatory agencies. Completion of these sales is subject to the
completion of the Clear Channel merger, obtaining final regulatory approvals and
other closing conditions. It is expected that the merger will be consummated
during the third quarter of 2000. The accompanying financial statements do not
include any adjustments related to the merger and divestitures.
6
<PAGE> 7
AMFM INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
3. ACQUISITIONS AND DISPOSITIONS
(a) Completed Transactions
On January 14, 2000, the Company sold the capital stock of its Puerto Rico
subsidiaries to Spanish Broadcasting System of Puerto Rico, Inc. for $90,860 in
cash and recognized a pre-tax gain of approximately $22,800. The Company owned
and operated eight radio stations in Puerto Rico.
On January 31, 2000, the Company sold radio stations KIOK-FM, KALE-AM and
KEGX-FM in Richland, Washington and KTCR-AM in Kennewick, Washington to New
Northwest Broadcasters II, Inc. for $3,781 in cash.
On January 31, 2000, the Company acquired radio station KQOD-FM in
Stockton, California from Carson Group, Inc. for a purchase price of $5,255 in
cash, including direct acquisition costs. The Company had previously been
operating KQOD-FM under a local marketing agreement effective September 20,
1999.
On June 30, 2000, the Company sold radio station KSKY-AM in Dallas in
exchange for radio station KPRZ-FM (now known as KMOM-FM) in Colorado Springs
plus $7,500 in cash from Bison Media, Inc. and recorded a preliminary pre-tax
gain of approximately $8,300.
The foregoing acquisitions were accounted for as purchases. Accordingly,
the accompanying consolidated financial statements include the results of
operations of the acquired entities from their respective dates of acquisition.
A summary of the net assets acquired in the six-month period ended June 30,
2000 follows:
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
JUNE 30,
2000
----------
<S> <C>
Property and equipment................................... $ 808
Intangible assets........................................ 9,947
-------
Total net assets acquired...................... 10,755
Less:
Assets transferred in exchange......................... 5,500
-------
Cash paid for acquisitions..................... $ 5,255
=======
</TABLE>
The unaudited pro forma condensed consolidated results of operations data
for the six months ended June 30, 1999 and 2000, as if the acquisitions and
dispositions through June 30, 2000 occurred at January 1, 1999, follow:
<TABLE>
<CAPTION>
SIX MONTHS ENDED
---------------------
JUNE 30, JUNE 30,
1999 2000
-------- ----------
<S> <C> <C>
Net revenues.......................................... $966,174 $1,158,631
Loss before extraordinary item........................ (281,632) (203,838)
Net loss.............................................. (281,632) (216,187)
Basic and diluted loss per common share -- before
extraordinary item.................................. (1.50) (0.94)
Basic and diluted loss per common share............... (1.50) (1.00)
</TABLE>
The pro forma results are not necessarily indicative of the financial
results which would have occurred if the transactions had been in effect for the
entire periods presented.
7
<PAGE> 8
AMFM INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(b) Pending Transaction
On August 30, 1999, the Company entered into an agreement with Cox Radio,
Inc. ("Cox") to acquire KOST-FM and KFI-AM in Los Angeles plus $3,000 in cash
payable by Cox in exchange for 13 of its radio stations including WEDR-FM in
Miami, WFOX-FM in Atlanta, WEFX-FM, WNLK-AM, WKHL-FM and WSTC-AM in
Stamford/Norwalk, WFYV-FM, WAPE-FM, WBWL-AM, WKQL-FM, WMXQ-FM and WOKV-AM in
Jacksonville and WPLR-FM and the local sales rights of a 14th station, WYBC-FM,
in New Haven. The Company began programming KOST-FM and KFI-AM in Los Angeles
and Cox began programming the 13 Company stations under time brokerage
agreements effective October 1, 1999. Although there can be no assurance, the
Company expects that the Cox exchange will be consummated during the third
quarter of 2000.
4. PREFERRED STOCK CONVERSIONS AND REDEMPTIONS OF DEBT
On December 8, 1999, the Company gave notice to the holders of its 7%
Convertible Preferred Stock of its election to redeem all of the outstanding
shares of 7% Convertible Preferred Stock at a per share redemption price of
$52.45, plus accrued and unpaid dividends. Each holder had the right to convert
each share of the 7% Convertible Preferred Stock held by it into approximately
2.76 shares of the Company's common stock in lieu of being redeemed. On January
19, 2000, preferred holders converted all 2,200,000 shares of 7% Convertible
Preferred Stock into 6,078,995 shares of the Company's common stock.
Effective January 1, 2000, the Company exchanged all of the outstanding
shares of its 12% Senior Exchangeable Preferred Stock for $125,462 in aggregate
principal amount of its 12% Subordinated Exchange Debentures due 2009. The 12%
Subordinated Exchange Debentures due 2009 were revalued at fair market value
upon the exchange, and the excess of the carrying value of the preferred stock
over the fair value of the subordinated debentures of $3,310 has been reflected
in the financial statements as a credit on exchange of preferred stock of
subsidiary.
On February 1, 2000, the Company completed the redemption of all of its
outstanding 9 3/8% Senior Subordinated Notes due 2004 for an aggregate
repurchase cost of $216,355, which included the principal amount of the notes of
$200,000, premiums on the repurchase of the notes of $9,376 and accrued and
unpaid interest on the notes from October 1, 1999 through February 14, 2000 of
$6,979. An extraordinary charge of $6,094 (net of a tax benefit of $3,282) was
recorded in connection with the redemption.
On June 2, 2000, the Company completed a cash tender offer to acquire its
outstanding 10 1/2% Senior Subordinated Notes due 2007. Prior to the initiation
of the tender offer, the Company received the irrevocable consent of the holder
of the majority of the notes to certain amendments, which eliminated most of the
restrictive covenants and certain other provisions of the indenture pursuant to
which the notes were issued. Approximately $99,400 in aggregate principal amount
of the notes, representing 99.4% of the outstanding notes, was accepted for
payment for an aggregate repurchase cost of approximately $112,995, which
included the principal amount of the notes of $99,400, premiums on the
repurchase of the notes of $9,592, accrued and unpaid interest on the notes from
January 16, 2000 through June 1, 2000 of $3,972 and other transaction costs of
$31. An extraordinary change of $6,255 (net of a tax benefit of $3,368) was
recorded in connection with the redemption. On June 29, 2000, the Company
purchased an additional $100 principal amount of the 10 1/2% Senior Subordinated
Notes due 2007 for an aggregate purchase price of approximately $114.
5. CONTINGENCIES
On July 24, 1998, in connection with Capstar Broadcasting Corporation's
then pending acquisition of Triathlon Broadcasting Company, Capstar Broadcasting
was notified of an action filed on behalf of all holders of depositary shares of
Triathlon against Triathlon, Triathlon's directors, and Capstar Broadcasting.
The action was filed in the Court of Chancery of the State of Delaware (Civil
Action No. 16560) in and for New Castle
8
<PAGE> 9
AMFM INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
County, Delaware by Herbert Behrens. The complaint alleges that Triathlon and
its directors breached their fiduciary duties to the class of depositary
stockholders. Capstar Broadcasting is accused of knowingly aiding and abetting
the breaches of fiduciary duties allegedly committed by the other defendants.
The complaint sought to have the action certified as a class action and sought
to enjoin the Triathlon acquisition, or in the alternative, sought monetary
damages in an unspecified amount. On April 30, 1999, the acquisition of
Triathlon closed. On May 26, 2000, the parties signed a Stipulation Settlement
that provided for a proposed settlement of the lawsuit. That proposed settlement
is subject to court approval. The amount of the settlement will equal $0.11 in
additional consideration for each depositary share owned by any class member at
the effective time of the Triathlon acquisition. At the time of the acquisition,
there were approximately 5.8 million depositary shares outstanding. Capstar
Broadcasting also agreed not to oppose plaintiff's counsel's application for
attorney fees and expenses in the aggregate amount of $150. On July 11, 2000,
the court preliminarily approved the proposed settlement. The court has set a
fairness hearing for the proposed settlement for August 29, 2000. On November
19, 1999, Capstar Broadcasting merged into Chancellor Mezzanine Holdings
Corporation and the surviving corporation was renamed AMFM Holdings Inc.
In September 1998, a stockholder class action complaint was filed in the
Delaware Court of Chancery by a stockholder purporting to act individually and
on behalf of all other persons, other than defendants, who own securities of the
Company and are similarly situated. The defendants named in the case are the
Company, Hicks Muse, Thomas O. Hicks, Jeffrey A. Marcus, James E. de Castro,
Eric C. Neuman, Lawrence D. Stuart, Jr., Steven Dinetz, Thomas J. Hodson, Perry
Lewis, John H. Massey and Vernon E. Jordan, Jr. The plaintiff alleges breach of
fiduciary duties, gross mismanagement, gross negligence or recklessness, and
other matters relating to the defendants' actions in connection with the Capstar
merger. The plaintiff sought to certify the complaint as a class action, enjoin
consummation of the Capstar merger, order defendants to account to plaintiff and
other alleged class members for damages, and award attorneys' fees and other
costs. The Company believes that the lawsuit is without merit and intends to
vigorously defend the action.
On April 11, 2000, an action was commenced in New York Supreme Court, New
York County, by Interep National Radio Sales, Inc. seeking $47,118 in damages,
plus interest, from Clear Channel Communications, Inc. and $19,691 in damages,
plus interest, from Katz Communications, Inc., a co-defendant and an indirect
wholly-owned subsidiary of the Company. The complaint alleges, among other
things, that Clear Channel wrongfully terminated a February 3, 1996 agreement
between Clear Channel and Interep under which Interep agreed to act as Clear
Channel's exclusive advertising representative by procuring advertising time on
Clear Channel's radio stations and also under which Interep, Clear Channel and
Katz executed certain "triparty agreements" in which Interep agreed to buy out
the existing representation agreement of Clear Channel's then current
representative, Katz, for $23,000. The complaint also alleges that Interep's
representation agreement, by its terms, could not be terminated by Clear Channel
until February 1, 2005 and that Clear Channel's November 30, 1999 termination of
Interep constituted a breach of the representation agreement. The complaint
alleges further that Clear Channel and Katz continue to demand that Interep make
all buy out payments to Katz as set forth in the various triparty agreements.
$5,188 of the requested damages correspond to buyouts in excess of the pro rata
amount attributable to the time Interep had the right to represent the bought
out stations and $280 of the requested damages correspond to a refund of a
portion of a "signing bonus" paid by Interep to Clear Channel upon the execution
of Interep's representation agreement. The complaint does not specify the basis
for the remaining damages sought by Interep. Although this matter is in the
early stages of litigation, Katz has pending before the Court a motion to
dismiss entirely all the claims asserted by Interep against it.
On July 13, 2000, a lawsuit was filed in the Supreme Court of the State of
New York, County of Westchester by plaintiff Charles E. Armstrong against AMFM
Inc. and AMFM Interactive, Inc. The complaint alleges that AMFM Inc. and AMFM
Interactive, Inc. breached an alleged employment agreement and also an alleged
agreement to issue stock options to the plaintiff. The plaintiff seeks a
declaration regarding his rights and obligations under the alleged employment
agreement and compensatory and punitive damages
9
<PAGE> 10
AMFM INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
in excess of $50,000. AMFM Inc. and AMFM Interactive, Inc. deny the existence of
any employment agreement, and also deny that they have breached any agreement to
issue stock options to Mr. Armstrong. AMFM Inc. and AMFM Interactive, Inc. are
vigorously defending the action.
The Company is also involved in various other claims and lawsuits which are
generally incidental to its business. The Company is also vigorously contesting
all of these matters and believes that the ultimate resolution of these matters
and those mentioned above will not have a material adverse effect on its
consolidated financial position, results of operations or cash flows.
6. NON-CASH COMPENSATION
The Company recorded non-cash compensation of $35,835 during the six months
ended June 30, 2000 primarily related to amendments made to the stock option
agreements of certain operating personnel terminated upon implementation of the
Company's market strategy.
7. MERGER AND NON-RECURRING COSTS
Merger and non-recurring costs consist of the following:
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
------------------- -------------------
JUNE 30, JUNE 30, JUNE 30, JUNE 30,
1999 2000 1999 2000
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Severance(a).................................. $ -- $ 914 $12,196 $ 9,313
Merger and other(b)........................... -- 6,917 16,783 9,633
------- ------ ------- -------
$ -- $7,831 $28,979 $18,946
======= ====== ======= =======
</TABLE>
---------------
(a) 1999
----
On March 15, 1999, the Company announced an executive realignment and
recorded a charge of $12,196 for executive severance and other costs.
2000
----
On February 16, 2000, the Company announced the retirement of James E. de
Castro as Vice-Chairman of AMFM Inc., President and Chief Executive Officer
of AMFM Radio Group and Chairman and Chief Executive Officer of AMFM
Interactive, Inc., effective February 18, 2000. In connection with Mr. de
Castro's retirement, the Company recorded a charge of $5,340 for severance
costs.
In 1999, the Company announced its market strategy, whereby each cluster of
stations in a market will be managed as a single business unit. In
connection with this strategy, certain personnel, consisting primarily of
operating personnel, have been terminated and other personnel-related costs
have been incurred to align formats within a market to target certain
demographics. During the three months and six months ended June 30, 2000,
the Company incurred costs of $914 and $3,973, respectively, of which $603
and $3,240 related to personnel costs. At June 30, 2000, $7,294 of the total
costs incurred to date were accrued and are expected to be paid during the
remainder of 2000.
(b) 1999
----
Effective March 15, 1999, the Company and LIN Television Corporation ("LIN")
agreed to terminate the LIN merger agreement. The Company subsequently
assigned to LIN its contract to acquire Petry Media Corporation ("Petry").
The Company recorded a charge of $16,783 to write off transaction costs
incurred in connection with the LIN merger agreement and Petry transaction.
2000
----
During the three months and six months ended June 30, 2000, the Company
incurred costs of $5,141 and $6,804, respectively, related to the Clear
Channel merger, developmental costs of $1,044 and $2,097, respectively,
related to the Galaxy(TM) system, AMFM's proprietary traffic system, and
other non-recurring charges of $732.
10
<PAGE> 11
AMFM INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
8. SEGMENT DATA
During the six months ended June 30, 1999, the Company conducted business
in three distinct operating segments consisting of radio broadcasting, new media
and outdoor advertising. Following the sale of the Company's outdoor advertising
business to Lamar on September 15, 1999, the Company operates in only the radio
broadcasting and new media segments. Separate financial data for each of the
Company's operating segments is provided below. The Company evaluates the
performance of its segments based on the following:
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
------------------- ---------------------
JUNE 30, JUNE 30, JUNE 30, JUNE 30,
1999 2000 1999 2000
-------- -------- -------- ----------
<S> <C> <C> <C> <C>
AMFM Radio Group -- radio broadcasting:
Net revenues........................... $334,406 $589,105 $596,185 $1,069,811
Operating expenses..................... 162,861 290,865 316,982 570,527
Depreciation and amortization.......... 101,419 202,837 206,101 395,164
Merger and non-recurring costs......... -- 794 -- 9,181
Operating income....................... 66,031 92,167 65,733 89,425
AMFM New Media Group -- media
representation:
Net revenues........................... 48,841 59,976 88,536 109,760
Operating expenses..................... 32,503 38,800 63,251 76,446
Depreciation and amortization.......... 7,685 14,025 15,468 28,157
Merger and non-recurring costs......... -- 1,044 -- 2,097
Operating income (loss)................ 7,135 3,395 6,791 (2,480)
Chancellor Outdoor Group -- outdoor
advertising:
Net revenues........................... 57,288 -- 110,889 --
Operating expenses..................... 30,283 -- 58,734 --
Depreciation and amortization.......... 32,131 -- 63,527 --
Merger and non-recurring costs......... -- -- -- --
Operating loss......................... (8,185) -- (17,256) --
</TABLE>
The segment financial data includes intersegment revenues and expenses
which must be excluded to reconcile to the Company's consolidated financial
statements. In addition, certain depreciation and amortization expenses,
corporate general and administrative expenses, non-cash compensation and merger
and non-recurring costs were not allocated to operating segments and must be
included to reconcile to the Company's consolidated financial statements.
Reconciling financial data is provided below:
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
------------------- -------------------
JUNE 30, JUNE 30, JUNE 30, JUNE 30,
1999 2000 1999 2000
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Intersegment net revenues...................... $6,389 $11,180 $11,199 $20,400
Intersegment operating expenses................ 6,389 11,180 11,199 20,400
Unallocated depreciation and amortization...... 3,904 6,132 7,787 12,164
Unallocated corporate general and
administrative expenses...................... 4,126 8,856 14,333 18,258
Unallocated non-cash compensation.............. -- 957 -- 35,835
Unallocated merger and non-recurring costs..... -- 5,993 28,979 7,668
</TABLE>
11
<PAGE> 12
AMFM INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
9. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
In June 1998, the Financial Accounting Standards Board issued SFAS No. 133,
Accounting for Derivative Instruments and Hedging Activities. This statement
establishes accounting and reporting standards for derivative instruments and
hedging activities. SFAS No. 133, as amended by SFAS No. 137, is effective for
all fiscal quarters of all fiscal years beginning after June 15, 2000.
Management does not anticipate that this statement will have a material impact
on the Company's consolidated financial statements.
In March 2000, the Financial Accounting Standards Board issued
Interpretation No. 44, Accounting for Certain Transactions Involving Stock
Compensation, an interpretation of APB No. 25, Accounting for Stock Issued to
Employees. The provisions of this Interpretation became effective July 1, 2000.
Due to the terms of certain options previously granted, the Company will record
a non-cash charge upon consummation of the Clear Channel merger regardless of
the new Interpretation. The size of such charge is not presently determinable
since it will be based on, among other things, the fair value of AMFM's common
stock on the day of the merger. On July 5, 2000, the Company amended its stock
option plans to provide that all unvested options will accelerate and vest for
employees terminated as a result of the pending AMFM/Clear Channel merger.
Further, those employees will have the remainder of the term of the option to
exercise. As a result of the Interpretation, the amendments have no accounting
impact until an event of termination occurs.
12
<PAGE> 13
Item 7.(b) Pro Forma Financial Information.
UNAUDITED PRO FORMA COMBINED CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
The following unaudited pro forma combined condensed consolidated financial
statements give effect to the Merger. For accounting purposes, Clear Channel has
accounted for the Merger as a purchase of AMFM; accordingly, the net assets of
AMFM have been adjusted to their estimated fair values based upon a preliminary
purchase price allocation.
The unaudited pro forma combined condensed consolidated balance sheet at
June 30, 2000 gives effect to the Merger as if it occurred on June 30, 2000. The
unaudited pro forma combined condensed consolidated statements of operations for
the year ended December 31, 1999 and six months ended June 30, 2000 gives effect
to the Merger as if it had occurred on January 1, 1999.
The unaudited pro forma combined condensed consolidated balance sheet was
prepared based upon the historical balance sheet of Clear Channel adjusted to
reflect the merger with SFX Entertainment, Inc. as if such merger had occurred
on June 30, 2000 and the historical balance sheet of AMFM, adjusted for certain
transactions, as if such transactions had occurred on June 30, 2000. The
unaudited pro forma combined condensed consolidated statements of operations for
year ended December 31, 1999 and for the six months ended June 30, 2000 were
prepared based upon the historical statements of operations of Clear Channel,
adjusted to reflect the mergers with Jacor Communications, Inc. and SFX
Entertainment, Inc. as if such mergers had occurred on January 1, 1999 ("Clear
Channel Pro Forma"), and the historical statements of operations of AMFM,
adjusted to reflect the disposition of AMFM's outdoor advertising business to
Lamar Advertising Company, the merger with Capstar Broadcasting Corporation, the
acquisition of KKFR-FM and KFYI-AM from The Broadcast Group, Inc., the
disposition of WMVP-AM to ABC, Inc., the change in the accounting for AMFM's
approximate 30% ownership (11% voting) in Lamar from the equity method to the
cost method due to the discontinuance of any and all control over the operations
of Lamar per the consent decree entered into by AMFM and Clear Channel and
certain financing transactions as if such transactions had occurred on January
1, 1999 ("AMFM Pro Forma"). Additionally, both the Clear Channel pro forma
financial statements and the AMFM pro forma financial statements have been
adjusted for the divestitures of 108 radio stations in markets where the
combined AMFM and Clear Channel radio stations exceed the number necessary to
obtain regulatory approvals for the Merger. Certain amounts in the AMFM pro
forma financial statements have been reclassified to conform to Clear Channel's
presentation.
The unaudited pro forma combined condensed consolidated financial
statements should be read in conjunction with the historical financial
statements of AMFM and Clear Channel.
The unaudited pro forma combined condensed consolidated financial
statements are not necessarily indicative of the actual results of operations or
financial position that would have occurred had the Merger and the above
described acquisitions, dispositions, financing and merger transactions of Clear
Channel and AMFM occurred on the dates indicated nor are they necessarily
indicative of future operating results or financial position.
13
<PAGE> 14
CLEAR CHANNEL AND AMFM
UNAUDITED PRO FORMA COMBINED CONDENSED CONSOLIDATED BALANCE SHEET
(IN THOUSANDS OF DOLLARS)
AT JUNE 30, 2000
ASSETS
<TABLE>
<CAPTION>
CLEAR CHANNEL
PRO FORMA AND AMFM
CLEAR CHANNEL CLEAR CHANNEL AMFM AMFM MERGER PRO FORMA
PRO FORMA DIVESTITURES(A) PRO FORMA DIVESTITURES(B) ADJUSTMENTS(C) MERGER
------------- --------------- ----------- --------------- -------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Current Assets:
Cash and cash equivalents..... $ 223,279 $ -- $ 76,900 $ -- $ -- $ 300,179
Accounts receivable, net...... 1,031,085 -- 547,935 -- -- 1,579,020
Other current assets.......... 288,073 -- 61,802 175,067 -- 524,942
----------- --------- ----------- ----------- ----------- -----------
Total Current Assets.... 1,542,437 -- 686,637 175,067 -- 2,404,141
Property, plant & equipment,
net........................... 3,446,636 (19,866) 445,171 (63,377) -- 3,808,564
Intangible assets, net:......... 16,093,410 (365,684) 9,896,518 (1,416,310) 15,558,870 39,766,804
Other assets:
Restricted cash............... -- -- -- -- -- --
Notes receivable.............. 143,130 -- -- -- -- 143,130
Equity investments in and
advances to, nonconsolidated
affiliates.................. 460,518 -- 11,978 -- -- 472,496
Other assets.................. 385,103 -- 239,028 -- (59,857) 564,274
Other investments............. 797,463 -- 1,046,176 -- 89,727 1,933,366
----------- --------- ----------- ----------- ----------- -----------
TOTAL ASSETS............ $22,868,697 $(385,550) $12,325,508 $(1,304,620) $15,588,740 $49,092,775
=========== ========= =========== =========== =========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable, accrued
expenses and other current
liabilities................. $ 1,262,404 $ -- $ 277,494 $ -- $ -- $ 1,539,898
Current portion of long-term
debt........................ 44,901 -- -- -- -- 44,901
----------- --------- ----------- ----------- ----------- -----------
Total Current
Liabilities........... 1,307,305 -- 277,494 -- -- 1,584,799
Long-term debt.................. 6,336,850 (826,403) 5,742,027 (1,886,993) 493,428 9,853,909
Liquid Yield Options Notes...... 493,879 -- -- -- -- 493,879
Deferred income taxes........... 1,369,874 (21,364) 1,599,901 (214,158) 3,590,508 6,324,761
Other long-term liabilities..... 158,877 -- 49,052 -- -- 207,929
Minority interest............... 25,805 -- 3,192 -- -- 28,997
Temporary equity................ 15,126 -- -- -- -- 15,126
Shareholders' Equity:
Common stock.................. 37,797 -- 2,176 -- 18,139 58,112
Additional paid-in capital.... 12,321,134 -- 5,390,844 -- 11,544,018 29,255,996
Common stock warrants......... 250,583 -- -- -- -- 250,583
Retained earnings (accumulated
deficit).................... 287,966 462,217 (739,178) 796,531 (57,353) 750,183
Other comprehensive income.... 262,131 -- -- -- -- 262,131
Other......................... 2,304 -- -- -- -- 2,304
Cost of shares held in
treasury.................... (934) -- -- -- -- (934)
----------- --------- ----------- ----------- ----------- -----------
Total Shareholders'
Equity................ 13,160,981 462,217 4,653,842 796,531 11,504,804 30,578,375
----------- --------- ----------- ----------- ----------- -----------
TOTAL LIABILITIES AND
SHAREHOLDERS'
EQUITY................ $22,868,697 $(385,550) $12,325,508 $(1,304,620) $15,588,740 $49,092,775
=========== ========= =========== =========== =========== ===========
</TABLE>
14
<PAGE> 15
CLEAR CHANNEL AND AMFM
UNAUDITED PRO FORMA COMBINED CONDENSED
CONSOLIDATED STATEMENT OF OPERATIONS
(IN THOUSANDS OF DOLLARS, EXCEPT PER SHARE DATA)
YEAR ENDED DECEMBER 31, 1999
<TABLE>
<CAPTION>
CLEAR CHANNEL
1999 PRO FORMA AND AMFM
CLEAR CHANNEL CLEAR CHANNEL AMFM AMFM MERGER PRO FORMA
PRO FORMA DIVESTITURES(D) PRO FORMA DIVESTITURES(E) ADJUSTMENTS(F) MERGER
------------- --------------- ---------- --------------- -------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Net revenue................... $4,625,822 $ (95,967) $2,136,449 $(269,411) $ (19,547) $6,377,346
Operating expenses............ 3,312,269 (48,315) 1,166,792 (148,153) (13,156) 4,269,437
Depreciation and
amortization................ 1,039,747 (8,140) 839,493 (115,134) 262,982 2,018,948
Noncash compensation
expense..................... 7,250 -- 26,727 -- -- 33,977
Merger and nonrecurring
costs....................... -- -- 83,453 -- (5,475) 77,978
Corporate expenses............ 96,043 -- 64,750 -- -- 160,793
---------- --------- ---------- --------- --------- ----------
Operating income (loss)....... 170,513 (39,512) (44,766) (6,124) (263,898) (183,787)
Interest expense.............. 328,140 (45,569) 503,887 (146,242) (11,053) 629,163
Gain on disposition of
assets...................... 2,494 -- 12,289 -- -- 14,783
Gain on disposition of
representation contracts.... -- -- 18,173 -- -- 18,173
Other income (expense)........ 26,623 -- 1,250 -- -- 27,873
---------- --------- ---------- --------- --------- ----------
Income (loss) before income
taxes, equity in earnings
(loss) of nonconsolidated
affiliates and extraordinary
item........................ (128,510) 6,057 (516,941) 140,118 (252,845) (752,121)
Income tax (expense)
benefit..................... (89,256) 1,190 132,840 (17,840) 74,748 101,682
---------- --------- ---------- --------- --------- ----------
Income before equity in
earnings (loss) of
nonconsolidated affiliates
and extraordinary
item........................ (217,766) 7,247 (384,101) 122,278 (178,097) (650,439)
Equity in earnings (loss) of
nonconsolidated
affiliates.................. 20,980 -- (7,087) -- -- 13,893
---------- --------- ---------- --------- --------- ----------
Net income (loss) before
extraordinary item.......... $ (196,786) $ 7,247 $(391,188) $ 122,278 $(178,097) $ (636,546)
========== ========= ========== ========= ========= ==========
Net income (loss) before
extraordinary item per common
share:
Basic....................... $ (0.52) $ (1.09)
========== ==========
Diluted..................... $ (0.52) $ (1.09)
========== ==========
</TABLE>
15
<PAGE> 16
CLEAR CHANNEL AND AMFM
UNAUDITED PRO FORMA COMBINED CONDENSED
CONSOLIDATED STATEMENT OF OPERATIONS
(IN THOUSANDS OF DOLLARS, EXCEPT PER SHARE DATA)
SIX MONTHS ENDED JUNE 30, 2000
<TABLE>
<CAPTION>
CLEAR CHANNEL
2000 PRO FORMA AND AMFM
CLEAR CHANNEL CLEAR CHANNEL AMFM AMFM MERGER PRO FORMA
PRO FORMA DIVESTITURES(D) PRO FORMA DIVESTITURES(E) ADJUSTMENTS(F) MERGER
------------- --------------- ---------- --------------- -------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Net revenue................... 2,775,339 (48,640) $1,159,171 $(139,275) (181,919) $3,564,676
Operating expenses............ 2,027,320 (23,305) 626,573 (75,239) (179,281) 2,376,068
Depreciation and
amortization................ 579,081 (6,669) 435,485 (55,771) 135,472 1,087,597
Noncash compensation
expense..................... -- -- 35,835 -- -- 35,835
Merger and nonrecurring
costs....................... 95,566 -- 18,946 -- -- 114,512
Corporate expenses............ 66,115 -- 29,312 -- -- 95,427
---------- -------- ---------- --------- --------- ----------
Operating income (loss)....... 7,258 (18,666) 13,020 (8,265) (138,110) (144,763)
Interest expense.............. 196,035 (18,831) 242,718 (73,121) (10,599) 336,202
Gain on disposition of
assets...................... -- -- 31,104 -- -- 31,104
Gain on disposition of
representation contracts.... -- -- 16,989 -- -- 16,989
Other income (expense)........ 5,597 -- 1,128 -- -- 6,725
---------- -------- ---------- --------- --------- ----------
Income (loss) before income
taxes, equity in earnings
(loss) of nonconsolidated
affiliates and extraordinary
item........................ (183,180) 165 (180,477) 64,856 (127,511) (426,147)
Income tax (expense)
benefit..................... (64,135) (550) 20,136 (8,731) 37,193 (16,087)
---------- -------- ---------- --------- --------- ----------
Income before equity in
earnings (loss) of
nonconsolidated affiliates
and extraordinary
item........................ (247,315) (385) (160,341) 56,125 (90,318) (442,234)
Equity in earnings (loss) of
nonconsolidated
affiliates.................. 10,577 -- (6,382) -- -- 4,175
---------- -------- ---------- --------- --------- ----------
Net income (loss) before
extraordinary item.......... $ (236,758) $ (385) $(166,723) $ 56,125 $ (90,318) $ (438,059)
========== ======== ========== ========= ========= ==========
Net income (loss) before
extraordinary item per common
share:
Basic....................... $ (0.63) $ (0.75)
========== ==========
Diluted..................... $ (0.63) $ (0.75)
========== ==========
</TABLE>
16
<PAGE> 17
CLEAR CHANNEL AND AMFM
NOTES TO UNAUDITED PRO FORMA COMBINED
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS OF DOLLARS, EXCEPT PER SHARE DATA)
Clear Channel and AMFM unaudited pro forma combined condensed consolidated
financial statements reflect the Merger, accounted for as a purchase, as
follows:
<TABLE>
<S> <C>
AMFM common shares outstanding.............................. 216,113,446
------------
Share conversion number..................................... 0.94
------------
Clear Channel's common stock to be issued in the merger..... 203,146,639
Estimated value per share (based on the average price
between September 29, 1999 and October 6, 1999)........... $ 77.3229
------------
$ 15,707,887
Estimated value of common stock options and other equity.... 1,247,289
Estimated transaction costs................................. 250,000
------------
Total estimated purchase price.................... $ 17,205,176
============
</TABLE>
For purposes of these statements the total estimated purchase price was
allocated as follows:
<TABLE>
<S> <C>
Total estimated purchase price.............................. $17,205,176
Plus -- deferred tax liability.............................. 3,590,508
Plus -- estimated fair value of long-term debt in excess of
carrying value, net of deferred loan fees................. 303,285
Less -- estimated fair value adjustment to cost
investment................................................ 89,727
Less -- AMFM net assets at June 30, 2000.................... 5,450,373
Plus -- elimination of AMFM's existing net licenses and
goodwill.................................................. 8,480,208
-----------
Estimated purchase price allocated to licenses and
goodwill.................................................. $24,039,077
===========
</TABLE>
The estimated purchase price allocated to licenses and goodwill of
$24,039,077 will be amortized over a 25 year period using the straight-line
method, which will result in annual licenses and goodwill amortization of
$961,563.
Clear Channel is required to refinance certain outstanding AMFM long-term
debt.
The unaudited pro forma combined condensed consolidated balance sheet is
based on the assumption that AMFM's debt holders will not tender their debt
securities based on a change of control of AMFM, although Clear Channel must
offer to tender all of AMFM's senior notes and notes at prices ranging from 100%
to 101% of the principal amount of the notes. It is expected that the debt
holders will not accept Clear Channel's tender offer, as the fair value of this
debt is greater than the required offer at the time of the offer.
17
<PAGE> 18
CLEAR CHANNEL AND AMFM
NOTES TO UNAUDITED PRO FORMA COMBINED
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(A) Clear Channel Divestitures
<TABLE>
<CAPTION>
INCREASE
(DECREASE)
----------
<S> <C> <C>
(1) Decrease in property, plant and equipment, net of
accumulated depreciation.................................... $ (19,866)
(2) Decrease in intangible assets, net.......................... (365,684)
(3) Decrease in long-term debt resulting from the use of net
proceeds.................................................... (826,403)
(4) Decrease in deferred income taxes........................... (21,364)
(5) Increase in retained earnings resulting from the gain on the
sale of stations, net of tax at Clear Channel's assumed tax
rate of 40%................................................. 462,217
</TABLE>
(B) AMFM Divestitures
<TABLE>
<CAPTION>
INCREASE
(DECREASE)
-----------
<S> <C> <C>
(6) Increase in other current assets due to a reclassification
of net assets transferred to trust.......................... $ 175,067
(7) Decrease in property, plant and equipment, net of
accumulated depreciation.................................... (63,377)
(8) Decrease in intangible assets, net.......................... (1,416,310)
(9) Decrease in long-term debt resulting from the use of net
proceeds.................................................... (1,886,993)
(10) Decrease in deferred income taxes........................... (214,158)
(11) Increase in retained earnings resulting from the gain on the
sale of stations, net of tax at AMFM's assumed tax rate of
39%......................................................... 796,531
</TABLE>
(C) The pro forma merger adjustments at June 30, 2000 are as follows:
<TABLE>
<CAPTION>
INCREASE
(DECREASE)
-----------
<S> <C> <C>
(12) Increase in intangible assets, net equal to the excess
purchase price of the merger and the elimination of AMFM's
existing accumulated amortization on goodwill............... $15,558,870
(13) Decrease in other assets resulting from the limitation
of AMFM deferred loan fees.................................. (59,857)
(14) Increase in other investments due to the mark-up to fair
value of AMFM's investments................................. 89,727
(15) Increase in long-term debt resulting from mark-up to fair
value and estimated merger expenses......................... 493,428
(16) Increase in deferred income tax due to fair value write-up
of FCC licenses............................................. 3,590,508
(17) Increase in common stock to account for Clear Channel common
stock given in the merger at $0.10 par value................ 18,139
(18) Increase in additional paid-in capital to account for Clear
Channel common stock given in the merger at $77.3229 per
share less $0.10 par value ($15,687,573) plus the value of
AMFM stock options included in the merger ($1,247,289) less
AMFM's pro forma additional paid-in capital balance
($5,390,844)................................................ 11,544,018
(19) Decrease in retained earnings to eliminate AMFM's existing
pro forma retained earnings balance......................... (57,353)
</TABLE>
18
<PAGE> 19
CLEAR CHANNEL AND AMFM
NOTES TO UNAUDITED PRO FORMA COMBINED
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
The pro forma adjustments for the year ended December 31, 1999 and for the
six months ended June 30, 2000 relating to the sale of radio stations Clear
Channel and AMFM divested, are as follows:
(D) Clear Channel Divestitures
<TABLE>
<CAPTION>
INCREASE (DECREASE)
TO INCOME
---------------------
12/31/99 6/30/00
--------- ---------
<S> <C> <C> <C>
(20) Decrease in revenue.................................... $ (95,967) $ (48,640)
(21) Decrease in operating expenses......................... 48,315 23,305
(22) Decrease in depreciation and amortization, of which
$3,083 and $1,541 for 12/31/99 and 6/30/00,
respectively results in a permanent difference and will
not be deducted for federal income tax purposes........ 8,140 6,669
(23) Decrease in interest expense associated with the
reduction of long-term debt resulting from the use of
net proceeds........................................... 45,569 18,831
(24) Change in income tax expense associated with the tax
effect of adjustments (20) through (23) at Clear
Channel's assumed tax rate of 40%...................... 1,190 (550)
</TABLE>
(E) AMFM Divestitures
<TABLE>
<CAPTION>
INCREASE (DECREASE)
TO INCOME
---------------------
12/31/99 6/30/00
--------- ---------
<S> <C> <C> <C>
(25) Decrease in revenue................................... $(269,411) $(139,275)
(26) Decrease in operating expenses........................ 148,153 75,239
(27) Decrease in depreciation and amortization, of which
$94,376 and $42,468 for 12/31/99 and 6/30/00,
respectively, results in a permanent difference and
will not be deducted for federal income tax
purposes.............................................. 115,134 55,771
(28) Decrease in interest expense associated with the
reduction of long-term debt resulting from the use of
net proceeds.......................................... 146,242 73,121
(29) Increase in income tax expense associated with the tax
effect of adjustments (25) through (28) at AMFM's
assumed tax rate of 39%............................... (17,840) (8,731)
</TABLE>
19
<PAGE> 20
CLEAR CHANNEL AND AMFM
NOTES TO UNAUDITED PRO FORMA COMBINED
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(F) The pro forma merger adjustments for the year ended December 31, 1999
and for the six months ended June 30, 2000 are as follows:
<TABLE>
<CAPTION>
INCREASE (DECREASE)
TO INCOME
---------------------
12/31/99 6/30/00
--------- ---------
<S> <C> <C> <C>
(30) Decrease in revenue due to the elimination of services AMFM provided to
Clear Channel and services Clear Channel provided to AMFM......................... $ (19,547) $(181,919)
(31) Decrease in operating expense due to the elimination of services AMFM
provided to Clear Channel and services Clear Channel provided to AMFM of
$19,547 and $181,919 for 12/31/99 and 6/30/00, respectively, partially
offset by the increase in operating expense resulting from change in
classification for start-up and development costs of ($6,391 and $2,638
for 12/31/99 and 6/30/00 respectively) from treatment as depreciation
expense and as merger and non-recurring costs (AMFM's policy) to treatment
as operating expense (Clear Channel's policy)..................................... 13,156 179,281
(32) Increase in amortization expense resulting from the additional licenses
and goodwill created by the merger and a change in the life of licenses
and goodwill amortization from 15 years (AMFM's policy) to 25 years (Clear
Channel's policy). $65,975 and $34,528 for 12/31/99 and 6/30/00
respectively results in a permanent difference and will not be deductible
for federal income tax purposes. This is partially offset by the decrease
in amortization expense resulting from the change of classification of
start-up and development costs of ($916 and $2,638 for 12/31/99 and
6/30/00 respectively) from treatment as depreciation expense (AMFM's
policy) to treatment as operating expense (Clear Channel's policy)................ (262,982) (135,472)
(33) Decrease in merger and non-recurring costs resulting from the change in
classification for start-up and development costs from treatment as merger
and non-recurring costs (AMFM's policy) to treatment as operating expense
(Clear Channel's policy).......................................................... 5,475 --
(34) Change in interest expense associated with the increased long-term debt
resulting from the estimated merger expenses of $250,000.......................... 11,053 10,599
(35) Decrease in income tax expense associated with the tax effect of the
adjustments in note (32) and (34) at Clear Channel's assumed tax rate of 40%...... 74,748 37,193
</TABLE>
20
<PAGE> 21
CLEAR CHANNEL AND AMFM
NOTES TO UNAUDITED PRO FORMA COMBINED
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Pro forma basic and diluted share information is as follows:
<TABLE>
<CAPTION>
(IN THOUSANDS)
-------------------
12/31/99 6/30/00
-------- -------
<S> <C> <C>
Basic:
Clear Channel pro forma weighted-average shares
outstanding............................................ 379,251 377,872
AMFM pro forma weighted-average shares outstanding........ 215,223 216,748
Decrease weighted-average common stock outstanding to
account for Clear Channel's common stock given in the
merger at the share conversion number of 0.94.......... (11,959) (13,601)
------- -------
Clear Channel and AMFM Pro Forma merger weighted-average
shares outstanding..................................... 582,515 581,019
======= =======
Diluted:
Clear Channel pro forma weighted-average shares
outstanding............................................ 399,153 384,788
AMFM pro forma weighted-average shares outstanding........ 222,433 224,816
Decrease weighted-average common stock outstanding to
account for Clear Channel's common stock given in the
merger and to account for the dilution effect AMFM's
common stock warrants, employee stock options and
other dilutive shares have on the Company at the share
conversion number of 0.94.............................. (13,262) (13,359)
------- -------
Clear Channel and AMFM Pro Forma merger weighted-average
shares outstanding..................................... 608,324 596,245
======= =======
</TABLE>
21
<PAGE> 22
CLEAR CHANNEL
UNAUDITED PRO FORMA COMBINED CONDENSED CONSOLIDATED BALANCE SHEET
(IN THOUSANDS OF DOLLARS)
AT JUNE 30, 2000
ASSETS
<TABLE>
<CAPTION>
CLEAR CHANNEL SFX PRO FORMA CLEAR CHANNEL
HISTORICAL HISTORICAL ADJUSTMENTS(A) PRO FORMA
------------- ---------- -------------- -------------
<S> <C> <C> <C> <C>
Current Assets:
Cash and cash equivalents....................... $ 56,893 $ 236,386 $ (70,000) $ 223,279
Accounts receivable, net........................ 844,366 186,719 -- 1,031,085
Other current assets............................ 143,313 144,760 -- 288,073
----------- ---------- ---------- -----------
Total Current Assets.................... 1,044,572 567,865 (70,000) 1,542,437
Property, plant & equipment, net.................. 2,736,889 709,747 -- 3,446,636
Intangible assets, net............................ 12,077,337 1,589,865 2,426,208 16,093,410
Other assets:
Restricted cash................................. -- -- -- --
Notes receivable................................ 129,675 13,455 -- 143,130
Equity investments in, and advances to,
nonconsolidated affiliates................... 386,918 95,070 (21,470) 460,518
Other assets.................................... 339,269 92,437 (46,603) 385,103
Other investments............................... 933,400 -- (135,937) 797,463
----------- ---------- ---------- -----------
TOTAL ASSETS............................ $17,648,060 $3,068,439 $2,152,198 $22,868,697
=========== ========== ========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable, accrued expenses and other
current liabilities.......................... $ 661,055 $ 601,349 $ -- $ 1,262,404
Current portion of long-term debt............... 30,510 14,391 -- 44,901
----------- ---------- ---------- -----------
Total Current Liabilities............... 691,565 615,740 -- 1,307,305
Long-term debt.................................... 4,875,879 1,406,933 54,038 6,336,850
Liquid Yield Options Notes........................ 493,879 -- -- 493,879
Deferred income taxes............................. 1,340,070 47,674 (17,870) 1,369,874
Other long-term liabilities....................... 129,256 29,621 -- 158,877
Minority interest................................. 17,103 8,702 -- 25,805
Temporary equity.................................. -- 15,126 -- 15,126
Shareholders' Equity:
Common stock.................................... 33,897 664 3,236 37,797
Additional paid-in capital...................... 9,231,175 1,298,926 1,791,033 12,321,134
Common stock warrants........................... 250,583 -- -- 250,583
Retained earnings (accumulated deficit)......... 287,966 (347,048) 347,048 287,966
Other comprehensive income...................... 295,317 -- (33,186) 262,131
Other........................................... 2,304 (2,041) 2,041 2,304
Cost of shares held in treasury................. (934) (5,858) 5,858 (934)
----------- ---------- ---------- -----------
Total Shareholders' Equity.............. 10,100,308 944,643 2,116,030 13,160,981
----------- ---------- ---------- -----------
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY................................ $17,648,060 $3,068,439 $2,152,198 $22,868,697
=========== ========== ========== ===========
</TABLE>
22
<PAGE> 23
CLEAR CHANNEL
UNAUDITED PRO FORMA COMBINED CONDENSED CONSOLIDATED
STATEMENT OF OPERATIONS
(IN THOUSANDS OF DOLLARS, EXCEPT PER SHARE DATA)
YEAR ENDED DECEMBER 31, 1999
<TABLE>
<CAPTION>
JACOR
HISTORICAL
CLEAR 1/1 TO 1999 CLEAR
CHANNEL SFX PRO FORMA 5/4 PRO FORMA CHANNEL
HISTORICAL HISTORICAL ADJUSTMENTS(B) 1999 ADJUSTMENTS(C) PRO FORMA
---------- ---------- -------------- ---------- -------------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net revenue.................... $2,678,160 $1,684,355 $ (8,340) $271,647 $ -- $4,625,822
Operating expenses............. 1,632,115 1,478,813 9,264 192,077 -- 3,312,269
Depreciation and
amortization................. 722,233 142,583 80,104 46,951 47,876 1,039,747
Noncash compensation expense... -- 7,250 -- -- -- 7,250
Merger and nonrecurring
costs........................ -- -- -- -- -- --
Corporate expenses............. 70,146 18,524 -- 7,373 -- 96,043
---------- ---------- --------- -------- --------- ----------
Operating income (loss)........ 253,666 37,185 (97,708) 25,246 (47,876) 170,513
Interest expense............... 192,321 100,825 (5,664) 39,731 927 328,140
Gain on disposition of
assets....................... 138,659 760 -- 130,385 (267,310) 2,494
Gain on disposition of
representation contracts..... -- -- -- -- -- --
Other income
(expense) -- net............. 20,209 6,577 -- (163) -- 26,623
---------- ---------- --------- -------- --------- ----------
Income (loss) before income
taxes, equity in earnings
(loss) of nonconsolidated
affiliates and extraordinary
item......................... 220,213 (56,303) (92,044) 115,737 (316,113) (128,510)
Income tax (expense) benefit... (150,635) (1,597) (2,266) (52,300) 117,542 (89,256)
---------- ---------- --------- -------- --------- ----------
Income (loss) before equity in
earnings of nonconsolidated
affiliates and extraordinary
item......................... 69,578 (57,900) (94,310) 63,437 (198,571) (217,766)
Equity in earnings of
nonconsolidated affiliates... 16,077 -- 4,903 -- -- 20,980
---------- ---------- --------- -------- --------- ----------
Net income (loss) before
extraordinary item........... $ 85,655 $ (57,900) $ (89,407) $ 63,437 $(198,571) (196,786)
========== ========== ========= ======== ========= ==========
Net income (loss) before extraordinary item per common share:
Basic........................ $ 0.27 $ (0.52)
========== ==========
Diluted...................... $ 0.26 $ (0.52)
========== ==========
</TABLE>
23
<PAGE> 24
CLEAR CHANNEL
UNAUDITED PRO FORMA COMBINED CONDENSED CONSOLIDATED
STATEMENT OF OPERATIONS
(IN THOUSANDS OF DOLLARS, EXCEPT PER SHARE DATA)
SIX MONTHS ENDED JUNE 30, 2000
<TABLE>
<CAPTION>
2000
CLEAR CLEAR
CHANNEL SFX PRO FORMA CHANNEL
HISTORICAL HISTORICAL ADJUSTMENTS(B) PRO FORMA
---------- ---------- -------------- ----------
<S> <C> <C> <C> <C>
Net revenue............................................ $1,748,414 $1,034,175 $ (7,250) $2,775,339
Operating expenses..................................... 1,082,690 945,662 (1,032) 2,027,320
Depreciation and amortization.......................... 448,741 97,220 33,119 579,081
Noncash compensation expense........................... -- -- -- --
Merger, nonrecurring & sys. dev. expenses.............. -- 108,566 (13,000) 95,566
Corporate expenses..................................... 52,445 13,670 -- 66,115
---------- ---------- -------- ----------
Operating income (loss)................................ 164,538 (130,943) (26,337) 7,258
Interest expense....................................... 125,460 73,983 (3,408) 196,035
Gain on disposition of assets.......................... -- -- -- --
Gain on disposition of representation contracts........ -- -- -- --
Other income (expense) -- net.......................... 1,624 3,973 -- 5,597
---------- ---------- -------- ----------
Income (loss) before income taxes, equity in earnings
(loss) of nonconsolidated affiliates and
extraordinary item................................... 40,702 (200,953) (22,929) (183,180)
Income tax (expense) benefit........................... (58,472) (4,300) (1,363) (64,135)
---------- ---------- -------- ----------
Income before equity in earnings
Income (loss) before equity in earnings (loss) of
nonconsolidated affiliates and extraordinary item.... (17,770) (205,253) (24,292) (247,315)
Equity in earnings of nonconsolidated affiliates....... 9,603 -- 954 10,557
---------- ---------- -------- ----------
Net income (loss) before extraordinary item............ $ (8,167) $ (205,253) $(23,338) $ (236,758)
========== ========== ======== ==========
Net income (loss) before extraordinary item, per common
share:
Basic................................................ $ (0.02) $ (0.63)
==========
Diluted.............................................. $ (0.02) $ (0.63)
==========
</TABLE>
24
<PAGE> 25
CLEAR CHANNEL
NOTES TO UNAUDITED PRO FORMA COMBINED
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS OF DOLLARS, EXCEPT SHARE DATA)
SFX MERGER
Clear Channel and SFX unaudited pro forma combined condensed consolidated
financial statements reflect the merger with SFX, accounted for as a purchase,
as follows:
<TABLE>
<S> <C>
SFX Class A common shares outstanding less shares held
in treasury............................................... 63,759,456
Less: Class A shares held by Clear Channel ................. (3,000,000)
-----------
Adjusted Class A common stock outstanding................... 60,759,456
Share conversion number..................................... 0.60
-----------
Clear Channel's common stock to be issued to Class A
holders................................................... 36,455,674
SFX Class B common shares outstanding (1:1 conversion)...... 2,545,557
-----------
Total Clear Channel common stock to be issued in the
merger.................................................... 39,001,231
Estimated value per share (based on the average price
between February 23, 2000 and March 2, 2000).............. $ 74.0089
-----------
$ 2,886,438
Estimated value of common stock options and other equity.... 207,421
Historical cost of SFX common shares held by Clear
Channel................................................... 84,881
Estimated transaction costs................................. 70,000
-----------
Total estimated purchase price.................... $ 3,248,740
===========
</TABLE>
For purposes of these statements the total estimated purchase price was
allocated as follows:
<TABLE>
<S> <C>
Total estimated purchase price.............................. $3,248,740
Plus -- estimated fair value of long-term debt in excess of
carrying value, net of deferred loan fees................. 100,641
Less -- SFX net assets at June 30, 2000..................... 944,643
Plus -- Historical cost of SFX investment not purchased..... 21,470
Plus -- elimination of SFX's existing net goodwill and other
intangible assets......................................... 1,589,865
----------
Estimated purchase price allocated to goodwill and other
intangible assets......................................... $4,016,073
==========
</TABLE>
The estimated purchase price allocated to goodwill and other intangible
assets of $4,016,073 will be amortized over a 20 year period using the
straight-line method, which will result in annual amortization of $200,804.
Clear Channel was required to refinance certain outstanding SFX long-term
debt.
25
<PAGE> 26
CLEAR CHANNEL
NOTES TO UNAUDITED PRO FORMA COMBINED
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(A) The pro forma merger adjustments at June 30, 2000 are as follows:
<TABLE>
<CAPTION>
INCREASE
(DECREASE)
----------
<S> <C> <C>
(1) Decrease in cash resulting from estimated merger expenses
including a $34.5 million settlement of SFX shareholder
suits....................................................... $ (70,000)
(2) Increase in intangible assets, net equal to the excess
purchase price of the merger and the elimination of SFX's
pre-existing intangible assets.............................. 2,426,208
(3) Decrease in equity investment in, and advances to,
nonconsolidated affiliates resulting from the elimination of
SFX investments not purchased............................... (21,470)
(4) Decrease in other investments resulting from the elimination
of Clear Channel's investment in SFX common stock........... (135,937)
(5) Decrease in other assets resulting from the elimination
of SFX deferred loan fees................................... (46,603)
(6) Increase in long-term debt resulting from the mark-up of
SFX's debt to fair value in excess of carrying value........ 54,038
(7) Decrease in deferred income taxes resulting from the
elimination of deferred tax on unrealized gain related to
Clear Channel's investment in SFX common stock.............. (17,870)
(8) Increase in common stock to account for Clear Channel common
stock given in the merger, net of SFX's outstanding shares,
at $0.10 par value.......................................... 3,236
(9) Increase in additional paid-in capital to account for Clear
Channel common stock given in the merger at $74.0089 per
share less $0.10 par value plus the value of SFX stock
options included in the merger less SFX's additional paid-in
capital balance............................................. 1,791,033
(10) Increase in retained earnings (accumulated deficit) to
eliminate SFX's existing accumulated deficit balance........ 347,048
(11) Decrease in other comprehensive income resulting from the
elimination of Clear Channel's unrealized gain on their
investment in SFX common stock.............................. (33,186)
(12) Increase in other equity resulting from the elimination of
SFX's deferred compensation................................. 2,041
(13) Increase in cost of shares held in treasury resulting from
the cancelation of SFX's shares held in treasury............ 5,858
</TABLE>
26
<PAGE> 27
CLEAR CHANNEL
NOTES TO UNAUDITED PRO FORMA COMBINED
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(B) The pro forma merger adjustments for the year ended December 31, 1999 and
for the six months ended June 30, 2000 are as follows:
<TABLE>
<CAPTION>
INCREASE (DECREASE)
TO INCOME
--------------------
12/31/99 6/30/00
--------- --------
<S> <C> <C> <C>
(14) Decrease in revenue due to the elimination of services SFX provided to
Clear Channel and services Clear Channel provided to SFX and the
reclassification of earnings from equity method investments out of net
revenue (SFX's policy) into equity in earnings of nonconsolidated
affiliates (Clear Channel's policy)........................................................ $ (8,340) $ (7,250)
(15) Change in operating expense due to the elimination of services SFX
provided to Clear Channel and services Clear Channel provided to SFX of
$3,437 and $6,296 for 12/31/99 and 6/30/00, respectively, offset by the
increase in operating expenses resulting from change in classification of
integration and start-up costs of $12,701 and $5,264 for 12/31/99 and
6/30/00, respectively, from treatment as depreciation expense (SFX's
policy) to treatment as operating expense (Clear Channel's policy)......................... (9,264) 1,032
(16) Increase in amortization expense resulting from the additional goodwill
created by the merger, other intangible assets acquired in the merger and
a change in the life of intangible assets amortization from an average of
15 years (SFX's policy) to an average of 20 years (Clear Channel's policy)
of $92,805 and $38,383 for 12/31/99 and 6/30/00, respectively, partially
offset by the reclassification of $12,701 and $5,264 for 12/31/99 and
6/30/00, respectively, from depreciation expense to operating expense...................... (80,104) (33,119)
(17) Decrease in merger and non-recurring costs due to the elimination of
direct merger related expenses............................................................. -- 13,000
(18) Decrease in interest expense resulting from the amortization of premium
on long-term debt resulting from the mark-up to fair value................................. 5,664 3,408
(19) Increase in income tax expense associated with the tax effect of
adjustment (16) at Clear Channel's assumed tax rate of 40%................................. (2,266) (1,363)
(20) Increase in equity in earnings (loss) of nonconsolidated affiliates
resulting from the reclassification of earnings from equity method
investments out of revenue (SFX's policy) into equity in earnings of
nonconsolidated affiliates (Clear Channel's policy)........................................ 4,903 954
</TABLE>
27
<PAGE> 28
CLEAR CHANNEL
NOTES TO UNAUDITED PRO FORMA COMBINED
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS OF DOLLARS)
JACOR MERGER
The Jacor acquisition pro forma adjustments exclude the effect of any
divestiture of stations, which were required for regulatory approval, as Clear
Channel utilized funds received from divestitures to be reinvested in
acquisitions of similar stations in other markets.
(C) The pro forma merger adjustments for the year ended December 31, 1999
are as follows:
<TABLE>
<CAPTION>
INCREASE (DECREASE)
TO INCOME
-------------------
<S> <C> <C>
(21) Increase in amortization expense resulting from the
additional goodwill created by the merger and a change
in the life of goodwill amortization from 40 years
(Jacor's policy) to 25 years (Clear Channel's policy).
This amortization expense results in a permanent
difference and will not be deductible for federal
income tax purposes.................................... $ (47,876)
(22) Increase in interest expense associated with the
increased long-term debt resulting from the estimated
merger expenses of $50,000............................. (927)
(23) Decrease in gain on disposition of assets as this
gain is associated directly with the merger of Jacor
and is a non-recurring item............................ (267,310)
(24) Decrease in income tax expense associated with the
tax effect of adjustments (22) and (23) at Clear
Channel's assumed tax rate of 40%...................... 117,542
</TABLE>
28
<PAGE> 29
AMFM
UNAUDITED PRO FORMA COMBINED CONDENSED CONSOLIDATED BALANCE SHEET
AT JUNE 30, 2000
(IN THOUSANDS OF DOLLARS)
<TABLE>
<CAPTION>
AMFM PRO FORMA AMFM
HISTORICAL ADJUSTMENTS PRO FORMA
----------- ----------- -----------
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents....................... $ 76,900 $ -- $ 76,900
Accounts receivable, net........................ 547,935 -- 547,935
Other current assets............................ 61,802 -- 61,802
----------- ----------- -----------
Total current assets.................... 686,637 -- 686,637
Property and equipment, net....................... 445,171 -- 445,171
Intangible assets, net............................ 9,896,518 -- 9,896,518
Other assets:
Investment in nonconsolidated affiliates........ 1,058,154 (1,046,176)(1) 11,978
Other assets.................................... 239,028 1,046,176(1) 1,285,204
----------- ----------- -----------
TOTAL ASSETS............................ $12,325,508 $ -- $12,325,508
=========== =========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses........... $ 277,494 $ -- $ 277,494
Long-term debt.................................... 5,742,027 -- 5,742,027
Deferred tax liabilities.......................... 1,628,643 (28,742)(2) 1,599,901
Other liabilities................................. 49,052 -- 49,052
Minority interest................................. 3,192 -- 3,192
Stockholders' equity:
Common stock.................................... 2,176 -- 2,176
Additional paid-in capital...................... 5,308,725 82,119(2) 5,390,844
Accumulated deficit............................. (685,801) (53,377)(2) (739,178)
----------- ----------- -----------
Total stockholders' equity.............. 4,625,100 28,742 4,653,842
----------- ----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY................................ $12,325,508 $ -- $12,325,508
=========== =========== ===========
</TABLE>
29
<PAGE> 30
AMFM
UNAUDITED PRO FORMA COMBINED CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1999
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
PRO FORMA CAPSTAR AS PRO FORMA
ADJUSTMENTS ADJUSTED FOR ADJUSTMENTS
LAMAR FOR THE THE COMPLETED FOR THE
AMFM TRANSACTION LAMAR CAPSTAR CAPSTAR
HISTORICAL(3) HISTORICAL(4) TRANSACTION TRANSACTIONS(8) MERGER
------------- ------------- ----------- ---------------- -----------
<S> <C> <C> <C> <C> <C>
Net revenues.................... $1,977,888 $(156,627) $ -- $ 347,290 $(31,397)(9)
Operating expenses.............. 1,048,711 (84,583) -- 207,001 (4,221)(9)
Depreciation and amortization... 732,233 (94,062) -- 78,338 (26,832)(9)
146,977(10)
Noncash compensation expense.... 6,443 -- -- 20,284 --
Merger and non-recurring
costs......................... 81,829 (2,154) -- 51,288 (47,510)(11)
Corporate expenses.............. 57,559 (6,835) -- 14,026 --
---------- --------- --------- --------- --------
Operating income (loss)......... 51,113 31,007 -- (23,647) (99,811)
Interest expense................ 426,681 (171) (36,128)(5) 90,075 (9,650)(9)
1,406(12)
Interest income................. 10,644 -- -- 302 (9,650)(9)
Gain on disposition of assets... 221,312 947 (209,970)(6) -- --
Gain on disposition of
representation contracts...... 18,173 -- -- -- --
Other income (expense).......... -- -- -- (46) --
---------- --------- --------- --------- --------
Income (loss) before income
taxes......................... (125,439) 32,125 (173,842) (113,466) (101,217)
Income tax (expense) benefit.... 6,391 (8,867) 60,845(7) 26,759 35,426(13)
Dividends and accretion on
preferred stock of
subsidiaries.................. 11,846 -- -- 17,390 --
---------- --------- --------- --------- --------
Income (loss) before equity in
net loss of nonconsolidated
affiliates.................... (130,894) 23,258 (112,997) (104,097) (65,791)
Equity in net loss of
nonconsolidated affiliates.... (27,651) -- -- (2,444) --
---------- --------- --------- --------- --------
Net income (loss)............... (158,545) 23,258 (112,997) (106,541) (65,791)
Preferred stock dividends....... 15,936 -- -- -- --
---------- --------- --------- --------- --------
Income (loss) attributable to
common stockholders........... $ (174,481) $ 23,258 $(112,997) $(106,541) $(65,791)
========== ========= ========= ========= ========
Basic and diluted loss per
common share.................. $ (1.01)
==========
Weighted-average common shares
outstanding(20)............... 172,967 28,464
========== ========
<CAPTION>
PRO FORMA
ADJUSTMENTS
FOR THE OTHER
OTHER COMPLETED PRO FORMA AMFM
TRANSACTIONS(14) ADJUSTMENTS PRO FORMA
---------------- ----------- ----------
<S> <C> <C> <C>
Net revenues.................... $ (705) $ -- $2,136,449
Operating expenses.............. (116) -- 1,166,792
Depreciation and amortization... 2,839 -- 839,493
Noncash compensation expense.... -- -- 26,727
Merger and non-recurring
costs......................... -- -- 83,453
Corporate expenses.............. -- -- 64,750
------- -------- ----------
Operating income (loss)......... (3,428) -- (44,766)
Interest expense................ 3,009 28,665(15) 503,887
Interest income................. -- -- 1,296
Gain on disposition of assets... -- -- 12,289
Gain on disposition of
representation contracts...... -- -- 18,173
Other income (expense).......... -- -- (46)
------- -------- ----------
Income (loss) before income
taxes......................... (6,437) (28,665) (516,941)
Income tax (expense) benefit.... 2,253 10,033(16) 132,840
Dividends and accretion on
preferred stock of
subsidiaries.................. -- (29,236)(17) --
------- -------- ----------
Income (loss) before equity in
net loss of nonconsolidated
affiliates.................... (4,184) 10,604 (384,101)
Equity in net loss of
nonconsolidated affiliates.... -- 23,008(18) (7,087)
------- -------- ----------
Net income (loss)............... (4,184) 33,612 (391,188)
Preferred stock dividends....... -- (15,936)(19) --
------- -------- ----------
Income (loss) attributable to
common stockholders........... $(4,184) $ 49,548 $ (391,188)
======= ======== ==========
Basic and diluted loss per
common share.................. $ (1.82)
==========
Weighted-average common shares
outstanding(20)............... 13,792 215,223
======== ==========
</TABLE>
30
<PAGE> 31
AMFM
UNAUDITED PRO FORMA COMBINED CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 2000
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
OTHER
AMFM PRO FORMA AMFM
HISTORICAL(5) ADJUSTMENTS PRO FORMA
------------- ----------- ----------
<S> <C> <C> <C>
Net revenues................................................ $1,159,171 $ -- $1,159,171
Operating expenses.......................................... 626,573 -- 626,573
Depreciation and amortization............................... 435,485 -- 435,485
Noncash compensation expense................................ 35,835 -- 35,835
Merger and non-recurring costs.............................. 18,946 -- 18,946
Corporate expenses.......................................... 29,312 -- 29,312
---------- ------- ----------
Operating income (loss)..................................... 13,020 -- 13,020
Interest expense............................................ 243,805 (1,087)(15) 242,718
Interest income............................................. 1,128 -- 1,128
Gain on disposition of assets............................... 31,104 -- 31,104
Gain on disposition of representation contracts............. 16,989 -- 16,989
---------- ------- ----------
Income (loss) before income taxes........................... (181,564) 1,087 (180,477)
Income tax (expense) benefit................................ 20,516 (380)(16) 20,136
Credit on preferred stock of subsidiary..................... 3,310 (3,310)(17) --
---------- ------- ----------
Income (loss) before equity in net loss of nonconsolidated
affiliates................................................ (157,738) (2,603) (160,341)
Equity in net loss of nonconsolidated affiliates............ (47,089) 40,707(18) (6,382)
---------- ------- ----------
Net income (loss)........................................... (204,827) 38,104 (166,723)
Preferred stock dividends................................... 321 (321)(19) --
---------- ------- ----------
Income (loss) attributable to common stockholders........... (205,148) 38,425 (166,723)
========== ======= ==========
Basic and diluted loss per common share..................... (0.95) (0.77)
========== ==========
Weighted-average common shares outstanding(22).............. 216,113 635 216,748
========== ======= ==========
</TABLE>
31
<PAGE> 32
AMFM
NOTES TO UNAUDITED PRO FORMA COMBINED
CONDENSED CONSOLIDATED FINANCIAL INFORMATION
(IN THOUSANDS OF DOLLARS)
ADJUSTMENTS TO THE UNAUDITED PRO FORMA COMBINED CONDENSED CONSOLIDATED BALANCE
SHEET
(1) As a condition for approval from the Department of Justice for the
merger with Clear Channel, AMFM is prohibited from exercising any
governance rights over Lamar. Since AMFM may no longer exercise
significant influence over the operations of Lamar, AMFM's investment
in Lamar will be accounted for using the cost method instead of the
equity method subsequent to the merger date. This adjustment
reclassifies AMFM's investment in Lamar from an equity method
investment to a cost method investment.
(2) Reflects the adjustments to record (1) estimated stock option
compensation expense of $38,064, net of a tax benefit of $20,497,
relating to certain executive stock options which became exercisable
upon the Clear Channel merger and (2) estimated charges of $15,313, net
of a tax benefit of $8,245, related to amendments made to AMFM's stock
option plans on July 5, 2000 to provide that all unvested options will
accelerate and vest for employees terminated as a result of the Clear
Channel merger.
ADJUSTMENTS TO THE UNAUDITED PRO FORMA COMBINED CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(3) AMFM began operating KKFR-FM and KFYI-AM in Phoenix under a time
brokerage agreement effective November 5, 1998. Therefore, the results
of operations of KKFR-FM and KFYI-AM are included in AMFM's historical
operations for the year ended December 31, 1999.
AMFM entered into a time brokerage agreement to sell substantially all
of the broadcast time of WMVP-AM in Chicago effective September 10,
1998. Therefore, substantially all of the results of operations of
WMVP-AM are excluded from AMFM's historical operations for the year
ended December 31, 1999.
(4) On September 15, 1999, AMFM completed the sale to Lamar of all of the
outstanding common stock of the subsidiaries which held all of AMFM's
assets used in its outdoor advertising business. AMFM received net cash
proceeds of approximately $700,000 and 26,227,273 shares of class A
common stock, par value $.01 per share, of Lamar. This adjustment
removes the historical results of operations of AMFM's outdoor
advertising business.
(5) Reflects the net decrease in interest expense of $36,128 for the year
ended December 31, 1999 in connection with the additional bank
borrowings related to the outdoor advertising acquisitions completed
during 1999 and the paydown of debt resulting from the net proceeds of
$700,000 received from Lamar.
(6) Reflects the elimination of the nonrecurring gain of $209,970 incurred
in connection with AMFM's sale of its outdoor advertising business.
(7) Reflects the tax effect of the pro forma adjustments.
32
<PAGE> 33
AMFM
NOTES TO UNAUDITED PRO FORMA COMBINED
CONDENSED CONSOLIDATED FINANCIAL INFORMATION -- (CONTINUED)
ADJUSTMENTS TO CAPSTAR'S HISTORICAL CONDENSED CONSOLIDATED STATEMENT OF
OPERATIONS
(8) Capstar's historical condensed consolidated statement of operations for
the period from January 1 to July 13, 1999 and pro forma adjustments
are summarized below:
<TABLE>
<CAPTION>
PERIOD FROM JANUARY 1 CAPSTAR PRO FORMA CAPSTAR
TO JULY 13, 1999 HISTORICAL ADJUSTMENTS PRO FORMA
--------------------- ---------- ----------- ---------
<S> <C> <C> <C>
Net revenues.................................... $ 347,290 $ -- $ 347,290
Operating expenses.............................. 207,001 -- 207,001
Depreciation and amortization................... 78,338 -- 78,338
Noncash compensation expense.................... 20,284 -- 20,284
LMA fees........................................ 387 (387)(A) --
Merger and non-recurring costs.................. 51,288 -- 51,288
Corporate expenses.............................. 14,026 -- 14,026
--------- ----- ---------
Operating income................................ (24,034) 387 (23,647)
Interest expense................................ 90,075 -- 90,075
Interest income................................. 302 -- 302
Other income (expense).......................... (46) -- (46)
--------- ----- ---------
Income (loss) before income taxes............... (113,853) 387 (113,466)
Income tax (expense) benefit.................... 26,894 (135)(B) 26,759
Dividends and accretion on preferred stock of
subsidiary.................................... 17,390 -- 17,390
--------- ----- ---------
Income (loss) before equity in net loss of
nonconsolidated affiliates.................... (104,349) 252 (104,097)
Equity in net loss of nonconsolidated
affiliates.................................... (2,444) -- (2,444)
--------- ----- ---------
Income (loss) attributable to common
stockholders.................................. $(106,793) $ 252 $(106,541)
========= ===== =========
</TABLE>
---------------
(A) Reflects the elimination of $387 of time brokerage (LMA) fees paid by
Capstar for the period from January 1 to July 13, 1999 related to acquired
radio stations that were previously operated under time brokerage
agreements.
(B) Reflects the tax effect of the pro forma adjustments.
ADJUSTMENTS TO UNAUDITED PRO FORMA COMBINED CONDENSED CONSOLIDATED STATEMENT OF
OPERATIONS RELATED TO THE CAPSTAR MERGER
(9) Reflects the elimination of intercompany transactions between AMFM and
Capstar for AMFM's media representation services provided to Capstar,
Capstar's participation in The AMFM Radio Networks, fees paid by AMFM
to Capstar under time brokerage (LMA) agreements and interest on
Capstar's note payable to AMFM of $150,000 for the period from January
1 to July 13, 1999.
33
<PAGE> 34
AMFM
NOTES TO UNAUDITED PRO FORMA COMBINED
CONDENSED CONSOLIDATED FINANCIAL INFORMATION -- (CONTINUED)
(10) Reflects incremental amortization related to the Capstar merger and is
based on the allocation of the total consideration as follows:
<TABLE>
<CAPTION>
PERIOD FROM
JANUARY 1 TO
JULY 13, 1999
-------------
<S> <C>
Amortization expense on $5,892,486 of intangible assets..... $210,602
Less: historical amortization expense....................... (63,625)
--------
Adjustment for net increase in amortization expense......... $146,977
========
</TABLE>
Historical depreciation expense of Capstar as adjusted for the completed
Capstar transactions is assumed to approximate depreciation expense on a
pro forma basis.
(11) Reflects the elimination of financial advisory and other expenses of
Capstar in connection with the Capstar merger of $47,510 for the
period from January 1 to July 13, 1999.
(12) Reflects the adjustment to record interest expense of $1,406 for the
year ended December 31, 1999 on additional bank borrowings related to
estimated financial advisors, legal, accounting and other professional
fees incurred by AMFM and Capstar.
(13) Reflects the tax effect of the pro forma adjustments.
ADJUSTMENTS TO UNAUDITED PRO FORMA COMBINED CONDENSED CONSOLIDATED STATEMENT OF
OPERATIONS RELATED TO THE OTHER COMPLETED TRANSACTIONS
On April 16, 1999, AMFM sold WMVP-AM in Chicago to ABC, Inc. for $21,000 in
cash. AMFM entered into a time brokerage agreement to sell substantially all of
the broadcast time of WMVP-AM effective September 10, 1998.
On July 1, 1999, AMFM acquired KKFR-FM and KFYI-AM in Phoenix from The
Broadcast Group, Inc. for $90,000 in cash. AMFM began operating KKFR-FM and
KFYI-AM under a time brokerage agreement effective November 5, 1998.
(14) The combined condensed statement of operations for the other completed
transactions for the year ended December 31, 1999 is summarized below:
<TABLE>
<CAPTION>
CHICAGO PRO FORMA
DISPOSITION ADJUSTMENTS FOR OTHER
YEAR ENDED HISTORICAL THE OTHER COMPLETED COMPLETED
DECEMBER 31, 1999 1/1-4/16 TRANSACTIONS TRANSACTIONS
----------------- ----------- ------------------- ------------
<S> <C> <C> <C>
Net revenues................................ $(705) $ -- $ (705)
Operating expenses.......................... (116) -- (116)
Depreciation and amortization............... -- 2,839(a) 2,839
----- ------- -------
Operating income (loss)..................... (589) (2,839) (3,428)
Interest expense............................ -- 3,009(b) 3,009
----- ------- -------
Income (loss) before income taxes........... (589) (5,848) (6,437)
Income tax (expense) benefit................ -- 2,253(c) 2,253
----- ------- -------
Income (loss)............................... $(589) $(3,595) $(4,184)
===== ======= =======
</TABLE>
34
<PAGE> 35
AMFM
NOTES TO UNAUDITED PRO FORMA COMBINED
CONDENSED CONSOLIDATED FINANCIAL INFORMATION -- (CONTINUED)
(a) Reflects incremental amortization related to the assets acquired in the
Phoenix acquisition and is based on the allocation of the total
consideration as follows:
<TABLE>
<CAPTION>
INCREMENTAL INTANGIBLE HISTORICAL ADJUSTMENT
YEAR ENDED AMORTIZATION ASSETS, AMORTIZATION AMORTIZATION FOR NET
DECEMBER 31, 1999 PERIOD(I) NET EXPENSE(I) EXPENSE INCREASE
----------------- ------------ ---------- ------------ ------------ ----------
<S> <C> <C> <C> <C> <C>
Phoenix acquisition......... 1/1-7/1 $85,160 $2,839 $ -- $2,839
</TABLE>
(i) Intangible assets are amortized on a straight-line basis over an
estimated average 15 year life. The incremental amortization period
represents the period of the year that the acquisition was not
completed.
Historical depreciation expense for the Phoenix acquisition is assumed to
approximate depreciation expense on a pro forma basis. Actual depreciation
and amortization may differ based upon final purchase price allocations.
(b) Reflects the adjustment to interest expense as follows:
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31, 1999
-----------------
<S> <C>
Additional bank borrowings related to other completed
transactions.............................................. $69,000
-------
Interest expense at 7.75%................................... 5,348
Less: historical interest expense recognized subsequent to
the completed transaction................................. 2,339
-------
Net increase in interest expense............................ $ 3,009
=======
</TABLE>
(c) Reflects the tax effect of the pro forma adjustments.
(15) Reflects (i) the net decrease in interest expense resulting from the
November 19, 1999 refinancing of the existing credit agreements of two
of AMFM's subsidiaries into a single new credit agreement with an
estimated average interest rate of 7.75%, (ii) the net decrease in
interest expense related to the purchase of $293,641 of aggregate
principal amount of AMFM's 10 3/4% Senior Subordinated Notes due 2006
and estimated fees and expenses pursuant to a tender offer which was
completed on November 12, 1999, funded with borrowings under the
credit agreement, (iii) the net decrease in interest expense related
to the purchase of $200,000 of aggregate principal amount of AMFM's 9
3/8% Senior Subordinated Notes due 2004 and estimated fees and
expenses which was completed on February 15, 2000, funded with
borrowings under the credit agreement, (iv) the net decrease in
interest expense related to the purchase of $99,400 aggregate
principal amount of AMFM's 10 1/2% Senior Subordinated Notes due 2007
and estimated fees and expenses which was completed on June 2, 2000,
funded with borrowings under the credit agreement, (v) the net
increase in interest expense related to the exchange of the 12 5/8%
Series E Cumulative Exchangeable Preferred Stock of AMFM for 12 5/8%
Senior Subordinated Exchange Debentures due 2006 on November 23, 1999
and (vi) the net increase in interest expense related to the exchange
of the 12% Senior Exchangeable Preferred Stock of AMFM for 12%
Subordinated Exchange Debentures due 2009 completed effective January
1, 2000.
(16) Reflects the tax effect of the pro forma adjustments.
(17) Reflects the elimination of 1999 dividends and credit on exchange of
preferred stock of subsidiary for the six months ended June 30, 2000
related to the exchange of the 12 5/8% Series E Cumulative
Exchangeable Preferred Stock of AMFM for 12 5/8% Senior Subordinated
Exchange Debentures due 2006 completed on November 23, 1999 and the
exchange of the 12%
35
<PAGE> 36
AMFM
NOTES TO UNAUDITED PRO FORMA COMBINED
CONDENSED CONSOLIDATED FINANCIAL INFORMATION -- (CONTINUED)
Senior Exchangeable Preferred Stock of AMFM for 12% Subordinated
Exchange Debentures due 2009 completed effective January 1, 2000.
(18) As a condition for approval of the merger with Clear Channel from the
Department of Justice, AMFM is prohibited from exercising any
governance rights over Lamar. Since AMFM may no longer exercise
significant influence over the operations of Lamar, AMFM's investment
in Lamar will be accounted for using the cost method instead of the
equity method subsequent to the merger date. This adjustment removes
the historical equity in losses of Lamar of $23,008 for the year ended
December 31, 1999 and $40,707 for the six months ended June 30, 2000.
(19) Reflects the elimination of preferred stock dividends related to (i)
the conversion of AMFM's $3.00 Convertible Exchangeable Preferred
Stock to AMFM common stock on August 24, 1999, pursuant to a notice of
redemption issued to holders and (ii) the conversion of AMFM's 7%
Convertible Preferred Stock to AMFM common stock on January 19, 2000
pursuant to a notice of redemption issued to holders.
(20) The pro forma combined loss per common share data is computed by
dividing pro forma loss attributable to common stockholders by the
weighted-average common shares assumed to be outstanding. A summary of
shares used in the pro forma combined loss per common share
calculation follows:
<TABLE>
<CAPTION>
YEAR ENDED SIX MONTHS ENDED
DECEMBER 31, 1999 JUNE 30, 2000
----------------- ----------------
(IN THOUSANDS)
<S> <C> <C>
Historical weighted-average shares
outstanding................................ 172,967 216,113
Incremental weighted-average shares relating
to:
53,553,966 shares of common stock issued in
connection with the Capstar merger on
July 13, 1999........................... 28,464 --
11,979,800 shares of common stock issued
upon the conversion of AMFM's $3.00
Convertible Exchangeable Preferred Stock
on August 24, 1999...................... 7,713 --
6,079,088 shares of common stock issued
upon the conversion of AMFM's 7%
Convertible Preferred Stock on January
19, 2000................................ 6,079 635
------- -------
Shares used in the pro forma combined
earnings per share calculation............. 215,223 216,748
======= =======
</TABLE>
36
<PAGE> 37
Item 7(c) Exhibits.
2.1 Agreement and Plan of Merger dated as of October 2, 1999,
among Clear Channel, CCU Merger Sub, Inc. and AMFM Inc.
(incorporated by reference to the exhibits of the
Company's Current Report on Form 8-K filed October 5,
1999.)
10.1 Asset Purchase Agreement between Clear Channel
Broadcasting, Inc., Clear Channel Broadcasting Licenses,
Inc., Citicasters Co., Capstar Radio Operating Company,
Capstar TX Limited Partnership, AMFM Ohio, Inc., and AMFM
Radio Licenses LLC, (the "Seller") and Chase Radio
Properties, LLC, (the "Buyer") dated March 3, 2000.
10.2 Amendment to Asset Purchase Agreement between Clear
Channel Broadcasting, Inc., Clear Channel Broadcasting
Licenses, Inc., Citicasters Co., Capstar Radio Operating
Company, Capstar TX Limited Partnership, AMFM Ohio, Inc.,
and AMFM Radio Licenses LLC, (the "Seller") and Chase
Radio Properties, LLC, (the "Buyer") dated March 14, 2000.
10.3 Second Amendment to Asset Purchase Agreement between Clear
Channel Broadcasting, Inc., Clear Channel Broadcasting
Licenses, Inc., Citicasters Co., Capstar Radio Operating
Company, Capstar TX Limited Partnership, AMFM Ohio, Inc.,
and AMFM Radio Licenses LLC, (the "Seller") and Chase
Radio Properties, LLC, (the "Buyer") dated July 10, 2000.
10.4 Third Amendment to Asset Purchase Agreement between Clear
Channel Broadcasting, Inc., Clear Channel Broadcasting
Licenses, Inc., Citicasters Co., Capstar Radio Operating
Company, Capstar TX Limited Partnership, AMFM Ohio, Inc.,
and AMFM Radio Licenses LLC, (the "Seller") and Chase
Radio Properties, LLC, (the "Buyer") dated July 17, 2000.
10.5 Asset Purchase Agreement between Clear Channel
Broadcasting, Inc., Clear Channel Broadcasting Licenses,
Inc., Citicasters Co., Capstar Radio Operating Company,
Capstar TX Limited Partnership, AMFM Texas Broadcasting,
LP and AMFM Texas Licenses Limited Partnership, (the
"Seller") and Cox Radio, lnc. and CXR Holdings, Inc. (the
"Buyer") dated March 3, 2000.
10.6 Asset Purchase Agreement between Capstar Radio Operating
Company and Capstar TX Limited Partnership, (the "Seller")
and Cumulus Broadcasting, Inc. and Cumulus Licensing Corp.
(the "Buyer") dated March 5, 2000.
10.7 Asset Exchange Agreement between Capstar Radio Operating
Company and Capstar TX Limited Partnership, (the "Seller")
and Cumulus Broadcasting, Inc. and Cumulus Licensing Corp.
(the "Exchange Party") dated March 5, 2000.
10.8 Amendment to Asset Exchange Agreement between Capstar
Radio Operating Company and Capstar TX Limited
Partnership, (the "Seller") and Cumulus Broadcasting, Inc.
and Cumulus Licensing Corp. (the "Exchange Party") dated
June 5, 2000.
10.9 Second Amendment to Asset Exchange Agreement between
Capstar Radio Operating Company and Capstar TX Limited
Partnership, (the "Seller") and Cumulus Broadcasting,
Inc., Cumulus Licensing Corp. and Cumulus Wireless
Services, Inc. (the "Exchange Party") dated July 17, 2000.
37
<PAGE> 38
10.10 Asset Purchase Agreement between AMFM Houston, Inc., AMFM
Ohio, Inc. and AMFM Radio Licenses, LLC, (the "Seller")
and Emmis Communications Corporation. (the "Buyer") dated
June 19, 2000.
10.11 Asset Purchase Agreement between Clear Channel
Broadcasting, Inc., Clear Channel Broadcasting Licenses,
Inc. and Citicasters Co., (the "Seller") and Inner City
Broadcasting Corporation, (the "Buyer") dated March 6,
2000.
10.12 Asset Purchase Agreement between Clear Channel
Broadcasting Licenses, Inc. and Pecan Partners, Ltd. dated
March 7, 2000.
10.13 Asset Purchase Agreement between Capstar TX Limited
Partnership, (the "Seller") and Saga Communications of New
England, Inc., (the "Buyer") dated March 6, 2000.
10.14 Asset Purchase Agreement between Capstar TX Limited
Partnership and Salem Communications Corporation dated
March 5, 2000.
10.15 Asset Purchase Agreement between Clear Channel
Broadcasting, Inc. and Clear Channel Broadcasting
Licenses, Inc., (the "Seller") and Secret 3 LLC, (the
"Buyer") dated July 14, 2000.
10.16 Asset Purchase Agreement between Citicasters Co., (the
"Seller") and Entravision Communications Corporation, (the
"Buyer") dated February 29, 2000.
10.17 Asset Exchange Agreement between Clear Channel
Broadcasting, Inc., Clear Channel Broadcasting Licenses,
Inc., Capstar Radio Operating Company and Capstar TX
Limited Partnership, (the "Seller") and Barnstable
Broadcasting, Inc., OBC Broadcasting, Inc. and Two Rivers
Broadcasting Limited Partnership, (the "Buyer") dated
March 7, 2000.
10.18 Amended and Restated Asset Purchase Agreement between
Citicasters Co., (the "Seller") and Rodriguez
Communications, Inc., (the "Buyer") dated March 7, 2000.
10.19 Asset Purchase Agreement between Clear Channel
Broadcasting, Inc. and Clear Channel Broadcasting
Licenses, Inc., (the "Seller") and Genesis Communications
I, Inc., (the "Buyer") dated April 25, 2000.
10.20 Asset Purchase Agreement between Clear Channel
Broadcasting, Inc., Clear Channel Broadcasting Licenses,
Inc., Capstar TX Limited Partnership, AMFM Ohio, Inc.,
Cleveland Radio Licenses LLC, AMFM San Diego, Inc., AMFM
Houston, Inc., AMFM Radio Licenses, LLC and Zebra
Broadcasting Corporation, (the "Seller") and CBS Radio,
Inc. (the "Buyer") dated March 3, 2000.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
Clear Channel Communications, Inc.
September 6, 2000
By /s/ HERBERT W. HILL, JR.
----------------------------
Herbert W. Hill, Jr.
Senior Vice President/
Chief Accounting Officer
38
<PAGE> 39
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<S> <C>
2.1 Agreement and Plan of Merger dated as of October 2, 1999,
among Clear, CCU Merger Sub, Inc. (incorporated by reference
to the exhibits of the Company's Current Report on Form 8-K
filed October 5, 1999.)
10.1 Asset Purchase Agreement between Clear Channel Broadcasting,
Inc., Clear Channel Broadcasting Licenses, Inc., Citicasters
Co., Capstar Radio Operating Company, Capstar TX Limited
Partnership, AMFM Ohio, Inc., and AMFM Radio Licenses LLC,
(the "Seller") and Chase Radio Properties, LLC, (the "Buyer")
dated March 3, 2000.
10.2 Amendment to Asset Purchase Agreement between Clear Channel
Broadcasting, Inc., Clear Channel Broadcasting Licenses,
Inc., Citicasters Co., Capstar Radio Operating Company,
Capstar TX Limited Partnership, AMFM Ohio, Inc., and AMFM
Radio Licenses LLC, (the "Seller") and Chase Radio
Properties, LLC, (the "Buyer") dated March 14, 2000.
10.3 Second Amendment to Asset Purchase Agreement between Clear
Channel Broadcasting, Inc., Clear Channel Broadcasting
Licenses, Inc., Citicasters Co., Capstar Radio Operating
Company, Capstar TX Limited Partnership, AMFM Ohio, Inc., and
AMFM Radio Licenses LLC, (the "Seller") and Chase Radio
Properties, LLC, (the "Buyer") dated July 10, 2000.
10.4 Third Amendment to Asset Purchase Agreement between Clear
Channel Broadcasting, Inc., Clear Channel Broadcasting
Licenses, Inc., Citicasters Co., Capstar Radio Operating
Company, Capstar TX Limited Partnership, AMFM Ohio, Inc., and
AMFM Radio Licenses LLC, (the "Seller") and Chase Radio
Properties, LLC, (the "Buyer") dated July 17, 2000.
10.5 Asset Purchase Agreement between Clear Channel Broadcasting,
Inc., Clear Channel Broadcasting Licenses, Inc., Citicasters
Co., Capstar Radio Operating Company, Capstar TX Limited
Partnership, AMFM Texas Broadcasting, LP and AMFM Texas
Licenses Limited Partnership, (the "Seller") and Cox Radio,
lnc. and CXR Holdings, Inc. (the "Buyer") dated March 3,
2000.
10.6 Asset Purchase Agreement between Capstar Radio Operating
Company and Capstar TX Limited Partnership, (the "Seller")
and Cumulus Broadcasting, Inc. and Cumulus Licensing Corp.
(the "Buyer") dated March 5, 2000.
10.7 Asset Exchange Agreement between Capstar Radio Operating
Company and Capstar TX Limited Partnership, (the "Seller")
and Cumulus Broadcasting, Inc. and Cumulus Licensing Corp.
(the "Exchange Party") dated March 5, 2000.
10.8 Amendment to Asset Exchange Agreement between Capstar Radio
Operating Company and Capstar TX Limited Partnership, (the
"Seller") and Cumulus Broadcasting, Inc. and Cumulus
Licensing Corp. (the "Exchange Party") dated June 5, 2000.
10.9 Second Amendment to Asset Exchange Agreement between Capstar
Radio Operating Company and Capstar TX Limited Partnership,
(the "Seller") and Cumulus Broadcasting, Inc., Cumulus
Licensing Corp. and Cumulus Wireless Services, Inc. (the
"Exchange Party") dated July 17, 2000.
</TABLE>
<PAGE> 40
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
------- -----------
<S> <C>
10.10 Asset purchase agreement between AMFM Houston, Inc., AMFM
Ohio, Inc. and AMFM Radio Licenses, LLC, (the "Seller")
and Emmis Communications Corporation. (the "Buyer") dated
June 19, 2000.
10.11 Asset purchase agreement between Clear Channel
Broadcasting, Inc., Clear Channel Broadcasting Licenses,
Inc. and Citicasters Co., (the "Seller") and Inner City
Broadcasting Corporation, (the "Buyer") dated March 6,
2000.
10.12 Asset purchase agreement between Clear Channel
Broadcasting Licenses, Inc. and Pecan Partners, Ltd. dated
March 7, 2000.
10.13 Asset purchase agreement between Capstar TX Limited
Partnership, (the "Seller") and Saga Communications of New
England, Inc., (the "Buyer") dated March 6, 2000.
10.14 Asset purchase agreement between Capstar TX Limited
Partnership and Salem Communications Corporation dated
March 5, 2000.
10.15 Asset purchase agreement between Clear Channel
Broadcasting, Inc. and Clear Channel Broadcasting
Licenses, Inc., (the "Seller") and Secret 3 LLC, (the
"Buyer") dated July 14, 2000.
10.16 Asset Purchase Agreement between Citicasters Co., (the
"Seller") and Entravision Communications Corporation, (the
"Buyer") dated February 29, 2000.
10.17 Asset Exchange Agreement between Clear Channel
Broadcasting, Inc., Clear Channel Broadcasting Licenses,
Inc., Capstar Radio Operating Company and Capstar TX
Limited Partnership, (the "Seller") and Barnstable
Broadcasting, Inc., OBC Broadcasting, Inc. and Two Rivers
Broadcasting Limited Partnership, (the "Buyer") dated
March 7, 2000.
10.18 Amended and Restated Asset Purchase Agreement between
Citicasters Co., (the "Seller") and Rodriguez
Communications, Inc., (the "Buyer") dated March 7, 2000.
10.19 Asset Purchase Agreement between Clear Channel
Broadcasting, Inc. and Clear Channel Broadcasting
Licenses, Inc., (the "Seller") and Genesis Communications
I, Inc., (the "Buyer") dated April 25, 2000.
10.20 Asset Purchase Agreement between Clear Channel
Broadcasting, Inc., Clear Channel Broadcasting Licenses,
Inc., Capstar TX Limited Partnership, AMFM Ohio, Inc.,
Cleveland Radio Licenses LLC, AMFM San Diego, Inc., AMFM
Houston, Inc., AMFM Radio Licenses, LLC and Zebra
Broadcasting Corporation, (the "Seller") and CBS Radio,
Inc. (the "Buyer") dated March 3, 2000.
</TABLE>
