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 fiscal year ended December 31, 2001,
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
Statement of Net Assets Available for Plan Benefits ............... 4
Statement of Changes in Net Assets Available for Plan Benefits .... 5
Notes to Financial Statements ..................................... 6
Supplemental Schedule
Schedule of Assets Held for Investment Purposes at End of Year .... 9
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: June 27, 2002
By: /s/ Randall T. Mays
-----------------------------------------------------------
Name: Randall T. Mays
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Title: Executive Vice President/Chief Financial Officer
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2
INDEPENDENT AUDITOR'S REPORT
To the Clear Channel Outdoor, Inc. 401(k) Plan
We have audited the accompanying statements of net assets available for plan
benefits of the Clear Channel Outdoor, Inc. 401(k) Plan (formerly Eller Media
Company 401(k) Plan) as of December 31, 2001 and 2000, and the related statement
of changes in net assets available for plan benefits for the year ended December
31, 2001. 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 December 31, 2001 and 2000, and the
changes in its net assets available for plan benefits for the year ended
December 31, 2001, in conformity with accounting principles generally accepted
in the United States of America.
Our audit of the Plan's financial statements as of and for the year ended
December 31, 2001, was made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of assets held
for investment purposes as of December 31, 2001, is presented for the purpose of
additional analysis and is not a part of the basic financial statements but is
supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. This supplemental information is the responsibility of the
Plan's management. The supplemental information has been subjected to the
auditing procedures applied in the audit of the basic financial statements as of
and for the year ended December 31, 2001, and, in our opinion, is fairly stated
in all material respects in relation to the basic financial statements taken as
a whole.
/s/ THE HANKE GROUP, P.C.
May 21, 2002
3
CLEAR CHANNEL OUTDOOR, INC. 401(K) PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
DECEMBER 31, 2001 AND 2000
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ASSETS 2001 2000
INVESTMENTS
Plan interest in Clear Channel Communications, Inc. - Master Trust $11,011,254 $11,723,224
----------- -----------
TOTAL ASSETS 11,011,254 11,723,224
LIABILITIES
Administrative fee payable 1,803 -
----------- -----------
TOTAL LIABILITIES 1,803 -
----------- -----------
NET ASSETS AVAILABLE FOR PLAN BENEFITS $11,009,451 $11,723,224
=========== ===========
See notes to financial statements. Page 4
CLEAR CHANNEL OUTDOOR, INC. 401(K) PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
YEAR ENDED DECEMBER 31, 2001
--------------------------------------------------------------------------------
ADDITIONS TO NET ASSETS ATTRIBUTED TO:
Investment income:
Net depreciation in fair value of investments $ (230,153)
Dividends and interest 316,014
------------
TOTAL ADDITIONS 85,861
DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO:
Benefits paid to participants 789,150
Administrative expenses 10,484
------------
TOTAL DEDUCTIONS 799,634
------------
Net decrease (713,773)
NET ASSETS AVAILABLE FOR PLAN BENEFITS:
Beginning of year 11,723,224
------------
End of year $ 11,009,451
============
See notes to financial statements. Page 5
CLEAR CHANNEL OUTDOOR, INC. 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2001 AND 2000
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 agreement 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 July 1, 2001, the Plan's name was changed from the Eller Media Company
401(k) Plan to the Clear Channel Outdoor, Inc. 401(k) 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 year ended December 31, 2001.
Participants may reallocate their accounts among the investment options offered
by the Plan. The Plan currently offers ten registered investment funds and one
sponsored stock fund from which participants may invest their funds.
Participant Accounts -- Each participant's account is credited with an
allocation of the Plan earnings 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.
Basis of Accounting -- The financial statements of the Plan are prepared using
the accrual method of accounting.
Page 6
CLEAR CHANNEL OUTDOOR, INC. 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 2001 AND 2000
2. SUMMARY OF ACCOUNTING POLICIES
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 at December 31. 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
generally accepted accounting principles 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 four 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 December 31, 2001
and 2000, was approximately 3.3% and 6.0%, respectively.
Page 7
CLEAR CHANNEL OUTDOOR, INC. 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 2001 AND 2000
4. INVESTMENTS
The following presents investments that represent 5% or more of the Plan's net
assets at December 31, 2001 and 2000:
2001 2000
Clear Channel Communications, Inc., Common Stock (unitized*) $ 3,012,090 $3,332,793
Fidelity Retirement Money Market Fund 1,668,510 1,835,350
Fidelity Equity Income Fund 1,420,968 1,547,935
Spartan U.S. Equity Index Fund 1,062,299 1,297,938
Fidelity Diversified International Fund 628,814 862,555
Fidelity Puritan Fund 789,636 802,686
Fidelity Low Priced Stock Fund 889,695 726,462
PIMCO Total Return Fund 676,193 -
During the year ended December 31, 2001, the Plan's investments including gains
and losses on investments bought and sold, as well as held during the year
appreciated (depreciated) in value as follows:
Registered investment companies $ (496,373)
Common Stock - Clear Channel Communications, Inc. (unitized*) 266,220
----------
$ (230,153)
==========
*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 $15,000 in administrative expenses related
to the Plan for the year ended December 31, 2001.
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.
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 is
designed and is currently being operated in compliance with the applicable
requirements of the IRC.
Page 8
SUPPLEMENTAL SCHEDULE
CLEAR CHANNEL OUTDOOR, INC. 401(K) PLAN
EMPLOYER IDENTIFICATION NUMBER: 86-0801051
PLAN NUMBER: 003
DECEMBER 31, 2001
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Schedule H, Line 4(I): Schedule of Assets Held for Investment Purposes at End of Year
Description of investment
Identity of issuer, including maturity date,
borrower, lessor or rate of interest, Current
similar party collateral, par or maturity value value
---------------------------------------------- ------------------------------------------ ------------------
PIMCO Total Return Fund $ 676,193
Janus Twenty Fund 139,616
MSIFT Mid-Cap Growth Advisor Fund 314,798
* Clear Channel Communications, Inc. Common Stock (unitized) 3,012,090
* Fidelity Management Trust Company Puritan Fund 789,636
* Fidelity Management Trust Company Equity Income Fund 1,420,968
* Fidelity Management Trust Company Low Priced Stock Fund 889,695
* Fidelity Management Trust Company Diversified International Fund 628,814
* Fidelity Management Trust Company Dividend Growth Fund 210,591
* Fidelity Management Trust Company Retirement Money Market Fund 1,668,510
Spartan U.S. Equity Index Fund 1,062,299
Participant Loans Various due dates and interest rates 198,044
------------
$ 11,011,254
============
* denotes party-in-interest
See accompanying independent auditor's report. Page 9
EXHIBIT INDEX
23.1 Consent of The Hanke Group, P.C.