SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 11-K
[x] Annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934 [No Fee Required]
For the four months ended April 30, 2002,
or
[_] Transition report pursuant to Section 15(d) of the Securities Exchange Act
of 1934
For the transition period from ________ to _________.
Commission File Number
1-9645
CLEAR CHANNEL OUTDOOR, INC. 401(k) PLAN
(Full title of the plan)
CLEAR CHANNEL COMMUNICATIONS, INC.
200 East Basse Road
San Antonio, Texas 78209
Telephone (210) 822-2828
(Name of Issuer of the securities held pursuant to the plan
and address of its principal executive office)
CLEAR CHANNEL OUTDOOR, INC. 401(k) PLAN
INDEX TO FORM 11-K
REQUIRED INFORMATION
Independent Auditor's Report........................................ 3
Financial Statements
Statements of Net Assets Available for Plan Benefits................ 4
Statement of Changes in Net Assets Available for Plan Benefits...... 5
Notes to Financial Statements....................................... 6
EXPLAINATORY NOTE:
The Clear Channel Outdoor, Inc. 401(k) Plan was merged into the Clear
Channel Communications, Inc. 401(k) Savings Plan on April 30, 2002. This is the
final Annual Report on Form 11-K to be filed with respect to the Clear Channel
Outdoor, Inc. 401(k) Plan and is for the four months ended April 30, 2002.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees (or other person who administer the employee benefit plan) have duly
caused this annual report to be signed on its behalf by the undersigned,
thereunto duly authorized.
CLEAR CHANNEL OUTDOOR, INC. 401(k) PLAN
Date: October 25, 2002
By: /s/ Randall T. Mays
---------------------------------------------------------
Name: Randall T. Mays
----------------------------------------------------
Title: Executive Vice President/Chief Financial Officer
---------------------------------------------------
2
INDEPENDENT AUDITOR'S REPORT
To the Clear Channel Outdoor, Inc. 401(k) Plan
San Antonio, Texas
We have audited the accompanying statements of net assets available for Plan
benefits of the Clear Channel Outdoor, Inc. 401(k) Plan as of April 30, 2002 and
December 31, 2001, and the related statement of changes in net assets available
for Plan benefits for the four months ended April 30, 2002. These financial
statements are the responsibility of the Plan's management. Our responsibility
is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for Plan benefits of Clear
Channel Outdoor, Inc. 401(k) Plan as of April 30, 2002 and December 31, 2001,
and the changes in its net assets available for Plan benefits for the four
months ended April 30, 2002, in conformity with accounting principles generally
accepted in the United States of America.
/s/ THE HANKE GROUP, P.C.
October 15, 2002
3
CLEAR CHANNEL OUTDOOR, INC. 401 (k) PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
APRIL 30, 2002 AND DECEMBER 31, 2001
ASSETS 2002 2001
INVESTMENTS
Plan interest in Clear Channel Communications, Inc. - $ - $11,011,254
----------- -----------
Master Trust
TOTAL ASSETS - 11,011,254
LIABILITIES
Administrative fee payable - 1,803
----------- -----------
TOTAL LIABILITIES - 1,803
----------- -----------
NET ASSETS AVAILABLE FOR PLAN BENEFITS $ - $11,009,451
=========== ===========
See notes to financial statements. Page 4
CLEAR CHANNEL OUTDOOR, INC. 401 (k) PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
FOUR MONTHS ENDED APRIL 30, 2002
ADDITIONS TO NET ASSETS ATTRIBUTED TO:
Investment income:
Net depreciation in fair value of investments $ (240,702)
Dividends and interest 44,595
------------
TOTAL DECREASES (196,107)
DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO:
Benefits paid to participants 89,479
Administrative Fees 1,106
------------
TOTAL DEDUCTIONS 90,585
------------
Net decrease before transfer of plan assets (286,692)
Transfer of plan assets to the Clear Channel Communications, Inc. 401 (k)
Savings Plan (10,722,759)
------------
Net decrease (11,009,451)
NET ASSETS AVAILABLE FOR PLAN BENEFITS:
Beginning of year 11,009,451
------------
End of year $ -
============
See notes to financial statements. Page 5
CLEAR CHANNEL OUTDOOR, INC. 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 2002 AND DECEMBER 31, 2001
1. DESCRIPTION OF PLAN
The following description of the Clear Channel Outdoor, Inc. (the Company and
Plan Sponsor) 401(k) Plan (the Plan), provides only general information.
Participants should refer to the Plan document for a more complete description
of the Plan's provisions.
General -- The Plan is a defined contribution plan generally covering all
eligible employees of the Company who have one year of service. It is subject to
the provisions of the Employee Retirement Income Security Act of 1974.
Effective January 1, 1998, the Plan froze employer and employee contributions
and ceased new participant loans. Active participants were required to leave
their assets in the Plan and allowed to contribute to a new account established
under the participant's name in the Clear Channel Communications, Inc. 401(k)
Savings Plan. All participants in the Plan became 100% vested in their account
balance on the date the Plan was frozen. As of August 1, 1999, new participant
loans under the Plan again became available.
Effective April 30, 2002, the Plan merged with the Clear Channel Communications,
Inc. 401(k) Savings Plan.
Contributions -- Effective January 1, 1998, the Plan froze new participation and
employer and employee contributions. As a result, no contributions were made to
the Plan for the four months ended April 30, 2002.
Participants may reallocate their accounts among the investment options offered
by the Plan. Prior to the merger, the Plan offered ten registered investment
funds and one sponsored stock fund from which participants may invest their
funds.
Participant Accounts -- Each participant's account is credited (debited) with an
allocation of the Plan earnings (losses) and charged with an allocation of
administrative expenses. Allocations are based on account balances, as defined
in the Plan document. The benefit to which a participant is entitled is the
benefit that can be provided from the participant's vested account.
Vesting -- As of January 1, 1998, all participants of the Plan became 100%
vested.
Participant Loans -- Participants may borrow $1,000 up to a maximum of $50,000
or 50% of their account balance, whichever is less. The loans are secured by the
balance in the participant's account and bear interest at a fixed rate
determined by the Plan Sponsor.
Payment of Benefits -- On termination of service due to death, disability or
retirement, a participant may elect to receive a lump sum amount equal to the
value of the participant's vested interest in his or her account, or quarterly
or annual installments over a period not to exceed the joint life expectancy of
the participant and his or her spouse. For termination of service for other
reasons, a participant may receive the value of the vested interest in his or
her account as a lump sum distribution.
Effective July 1, 2001, the Plan was amended so that the only form of benefit is
a single lump sum distribution.
Page 6
CLEAR CHANNEL OUTDOOR, INC. 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
APRIL 30, 2002 AND DECEMBER 31, 2001
2. SUMMARY OF ACCOUNTING POLICIES
Basis of Accounting -- The financial statements of the Plan are prepared using
the accrual method of accounting.
Investment Valuation and Income Recognition -- The Plan's investments are stated
at fair value. The Plan's investments in the common stock are reported at fair
value based on quoted market prices. Shares of mutual funds are valued at the
net asset value of shares held by the Plan. Participant loans are valued at cost
which approximates fair value.
Purchases and sales of securities are recorded on a trade date basis. Dividends
are recorded on the ex-dividend date.
Payments of Benefits -- Benefits are recorded when paid.
Use of Estimates -- The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect certain
reported amounts and disclosures. Accordingly, actual results could differ from
those estimates.
3. PLAN INTEREST IN CLEAR CHANNEL COMMUNICATIONS, INC. - MASTER TRUST
Effective July 1, 1999, the Plan transferred all investments to the Clear
Channel Communications, Inc. - Master Trust (Master Trust), which is held by
Fidelity Management Trust Company (Trustee). The Master Trust was established
for the investment of assets of the Plan and five other Clear Channel
Communications, Inc., sponsored retirement plans. These investments in the
Master Trust consist primarily of registered investment companies and Company
sponsored stock.
The purpose of the Master Trust is the collective investment of the assets of
participating employee benefit plans of Clear Channel Communications, Inc. The
Master Trust's assets are allocated among participating plans by assigning to
each plan those transactions (primarily contributions and benefit payments)
which can be specifically identified and allocating among all plans (in
proportion to the fair value of the assets assigned to each plan), the income
and expenses resulting from the collective investment of the assets.
The proportionate interest of the Plan in the Master Trust at April 30, 2002 and
December 31, 2001, was approximately 0.0% and 3.3%, respectively.
Page 7
CLEAR CHANNEL OUTDOOR, INC. 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
APRIL 30, 2002 AND DECEMBER 31, 2001
4. INVESTMENTS
The following presents investments that represent 5% or more of the Plan's net
assets at April 30, 2002 and December 31, 2001
2002 2001
Clear Channel Communications, Inc.
Common Stock (unitized*) $ - $3,012,090
Fidelity Retirement Money Market Fund - 1,668,510
Fidelity Equity Income Fund - 1,420,968
Spartan U.S. Equity Index Fund - 1,062,299
Fidelity Diversified International Fund - 628,814
Fidelity Puritan Fund - 789,636
Fidelity Low Priced Stock Fund - 889,695
PIMCO Total Return Fund - 676,193
During the four months ended April 30, 2002, the Plan's investments including
gains and losses on investments bought and sold, as well as held during the year
depreciated in value as follows:
Registered investment companies $ (13,147)
Common Stock - Clear Channel Communications, Inc. (unitized*) (227,555)
----------
$ (240,702)
==========
*A non-registered fund comprised of the underlying company stock and a
short-term cash component.
5. RELATED PARTY TRANSACTIONS
Certain Plan investments are shares of mutual funds managed by Fidelity
Management Trust Company (Fidelity). Fidelity is the Trustee as defined by the
Plan and, therefore, these transactions qualify as party-in-interest
transactions.
The Plan Sponsor paid approximately $1,000 in administrative expenses related to
the Plan for the four months ended April 30, 2002.
6. PLAN TERMINATION
The Company adopted a corporate resolution on behalf of the Clear Channel
Outdoor, Inc. 401(k) Plan wherein both employer and employee contributions to
the Plan were frozen as of January 1, 1998. Participants' account balances
became fully vested in the Plan as of January 1, 1998. All employees of the
Company became eligible to participate in the Clear Channel Communications, Inc.
401(k) Savings Plan effective January 1, 1999.
Effective April 30, 2002, the Plan was merged with the Clear Channel
Communications, Inc. 401(k) Savings Plan.
Page 8
7. TAX STATUS
The Internal Revenue Service has determined and informed the Company by a letter
dated December 1, 1997, that the Plan and related trust are designed in
accordance with applicable sections of the Internal Revenue Code (IRC). Although
the Plan has been amended and restated since receiving the determination letter,
the Plan Administrator and the Plan's tax counsel believe that the Plan was
designed and was operating in compliance with the applicable requirements of the
IRC.
Page 9
EXHIBIT INDEX
23.1 Consent of The Hanke Group, P.C.