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 COMMUNICATIONS, INC. 401(k) SAVINGS 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 COMMUNICATIONS, INC. 401(k) SAVINGS 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 .................................. 10
Schedule of Non-exempt Transactions ............................................................. 11
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 COMMUNICATIONS, INC. 401(k) SAVINGS PLAN
Date: June 27, 2002
By: /s/ Randall T. Mays
----------------------------------------------------------
Name: Randall T. Mays
----------------------------------------------------
Title: Executive Vice President/Chief Financial Officer
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Page 2
INDEPENDENT AUDITOR'S REPORT
To the Clear Channel Communications, Inc. 401(k) Savings Plan
San Antonio, Texas
We have audited the accompanying statements of net assets available for plan
benefits of the Clear Channel Communications, Inc. 401(k) Savings 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 and schedules 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 Communications, Inc. 401(k) Savings 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 State 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 schedules of assets held
for investment purposes as of December 31, 2001, and non-exempt transactions for
the year ended December 31, 2001, are presented for the purpose of additional
analysis and are 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. The 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.
June 18, 2002
Page 3
CLEAR CHANNEL COMMUNICATIONS, INC. 401(K) SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
DECEMBER 31, 2001 AND 2000
ASSETS 2001 2000
INVESTMENTS:
Plan interest in Clear Channel Communications,
Inc. - Master Trust $ 222,617,523 $ 173,357,172
RECEIVABLES:
Employer's contribution 263,234 1,101,138
Participants' contributions 1,112,971 1,662,445
Rollovers - 802,939
------------- -------------
Total receivables 1,376,205 3,566,522
------------- -------------
TOTAL ASSETS 223,993,728 176,923,694
LIABILITIES
Due to Universal Outdoor, Inc. Salary
Reduction Profit Sharing Plan - 95,230
Administrative fees payable 101,209 81,275
------------- -------------
TOTAL LIABILITIES 101,209 176,505
------------- -------------
NET ASSETS AVAILABLE FOR PLAN BENEFITS $ 223,892,519 $ 176,747,189
============= =============
See notes to financial statements. Page 4
CLEAR CHANNEL COMMUNICATIONS, INC. 401(K) SAVINGS 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 $ (3,923,040)
Dividends and interest 3,843,805
------------
(79,235)
Contributions:
Employer 10,284,419
Participants 47,323,445
Rollovers 4,202,971
------------
Total contributions 61,810,835
------------
TOTAL ADDITIONS 61,731,600
DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO:
Benefits paid to participants 24,166,029
Administrative expenses 413,420
------------
TOTAL DEDUCTIONS 24,579,449
------------
Net increase before transfer of plan assets 37,152,151
Transfer of plan assets 9,993,179
------------
Net Increase 47,145,330
NET ASSETS AVAILABLE FOR PLAN BENEFITS:
Beginning of year 176,747,189
------------
End of year $223,892,519
============
See notes to financial statements. Page 5
CLEAR CHANNEL COMMUNICATIONS, INC. 401(k) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2001 AND 2000
1. DESCRIPTION OF PLAN
The following description of the Clear Channel Communications, Inc. (the Company
and Plan Sponsor) 401(k) Savings 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.
Contributions -- Employer contributions to the Plan consist of matching
contributions and elective contributions made annually at the discretion of the
Plan Sponsor's Board of Directors. The employer contribution was $10,284,419 for
the year ended December 31, 2001.
Participants may elect to defer a portion of their compensation by an amount
that does not exceed the maximum allowed under IRS rules and regulations.
Participants are always 100% vested in their voluntary contributions.
Each year, participants may contribute up to 20 percent of pretax compensation,
as defined in the Plan. Participants may also contribute amounts representing
distributions from other qualified defined benefit or defined contribution
plans. Participants direct the investment of their contributions into various
investment options offered by the Plan. The Plan currently offers one sponsored
Company stock and ten registered investment funds.
Participant Accounts -- Each participant's account is credited with allocations
of the Plan Sponsor's contribution and Plan earnings and charged with an
allocation of administrative expenses. Allocations are based on participant
earnings or account balances, as defined. The benefit to which a participant is
entitled is the benefit that can be provided from the participant's vested
account.
Forfeitures -- Participant forfeitures of non-vested contributions are used to
reduce employer contributions to the Plan. For the year ending December 31,
2001, approximately $623,000 of forfeitures was used to reduce employer
contributions.
Vesting -- Participants are immediately vested in their contributions plus
actual earnings thereon. Vesting in the Plan Sponsor's contributions is based on
years of continuous service. A participant is 100% vested after seven years of
credited service (or upon the death or disability of the participant).
Participant Loans -- Participants may borrow $1,000 up to a maximum of $50,000
or 50% of their vested account balance, whichever is less. The loans are secured
by the balance in the participant's account and bear a fixed interest rate
determined by the Plan Sponsor.
Page 6
CLEAR CHANNEL COMMUNICATIONS, INC. 401(k) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2001 AND 2000
1. DESCRIPTION OF PLAN (continued)
Payment of Benefits -- On termination of service, the Plan provides that
benefits less than $5,000 will be paid by lump sum distribution or rollover. For
benefits over $5,000, benefits may be paid by lump sum distribution, remain in
the Plan until the earlier of age 65 or death of the participant, or rolled over
into another qualified plan.
For those who were Plan participants prior to July 1, 1999, benefits may be paid
out in quarterly or annual installments. This option is no longer available as
of July 1, 2001.
Hardship withdrawals are available to Plan participants upon approval.
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 of the Company 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.
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 sponsored
Company stock.
The purpose of the Master Trust is the collective investment of the assets of
participating employee benefit plans of the Company. 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 91.4% and 87.0%, respectively.
Page 7
CLEAR CHANNEL COMMUNICATIONS, INC. 401(k) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2001 AND 2000
4. PLAN MERGERS
Effective January 1, 2001 and December 31, 2001, all of the net assets of the
Triumph Taxi Advertising, LLC 401(k) Plan and certain net assets of AMFM Inc.
401(k) Savings Plan were merged into the Clear Channel Communications, Inc.
401(k) Savings Plan. The transferred net assets have been recognized in the
accounts of the Clear Channel Communications, Inc. 401(k) Savings Plan at
amounts previously carried in the accounts of the merged plans. A summary of the
transferred net assets follows:
Investments at fair value:
AMFM Inc. 401(k) Savings Plan $ 9,827,934
Triumph Taxi Advertising, LLC, 401(k) Plan 165,245
--------------
$ 9,993,179
==============
5. INVESTMENTS
The following presents investments that represent 5% or more of the Plan's net
assets as of December 31, 2001 and 2000:
2001 2000
Clear Channel Communications, Inc. (unitized*) $ 84,586,087 $ 81,521,345
Fidelity Puritan Fund 23,540,602 15,214,440
Spartan US Equity Index Fund 17,618,051 14,244,585
Fidelity Equity Income Fund 15,862,922 11,948,922
Fidelity Dividend Growth Fund 19,615,747 11,873,301
Fidelity Retirement Money Market Fund - 11,846,782
MSIFT Mid-Cap Growth Advisor Fund 12,409,555 8,998,520
During 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:
Clear Channel Communications, Inc., stock (unitized*) $ 4,776,913
Registered investment funds (8,699,953)
--------------
$ (3,923,040)
==============
*A non-registered fund comprised of the underlying Company stock and a
short-term cash component.
6. RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
The following is a reconciliation of net assets available for Plan benefits per
the financial statements at December 31, 2001 and 2000, to Forms 5500:
2001 2000
Net assets available for plan benefits per the accompanying
financial statements $ 223,892,519 $ 176,747,189
Transfer of assets from the AMFM Inc. 401(k) Savings Plan* 85,066,573 -
-------------- ---------------
$ 308,959,092 $ 176,747,189
============== ===============
*The transfer of net assets from the AMFM Inc. 401(k) Savings Plan is recorded
on Form 5500 as of December 31, 2001, for a transfer that occurred on January
1, 2002.
Page 8
CLEAR CHANNEL COMMUNICATIONS, INC. 401(k) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2001 AND 2000
7. 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 $406,000 in professional fees related to the
Plan for the year ended December 31, 2001.
8. PLAN TERMINATION
Although it has not expressed any intent to do so, the Plan Sponsor has the
right under the Plan to discontinue its contributions at any time and to
terminate the Plan subject to the provisions of ERISA. In the event of Plan
termination, participants would become 100 percent vested in the employer's
contributions.
9. TAX STATUS
The Internal Revenue Service has determined and informed the Plan Sponsor by a
letter dated January 7, 1995, 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.
10. SUBSEQUENT EVENTS
Effective January 1, 2002, the remaining assets of the AMFM Inc. 401(k) Savings
Plan were merged into the Clear Channel Communications, Inc. 401(k) Savings
Plan.
Effective April 2002, the Clear Channel Outdoor, Inc. 401(k) Plan merged into
the Clear Channel Communications, Inc. 401(k) Savings Plan.
The following amendments were made to the plan document effective January 1,
2002:
. Employer contributions made after December 31, 2001, will vest under a
five year graded vesting schedule.
. Participants may contribute up to 25 percent of pre-tax compensation,
not to exceed the maximum allowed under IRS rules and regulations.
Page 9
SUPPLEMENTAL SCHEDULES
CLEAR CHANNEL COMMUNICATIONS, INC. 401(K) SAVINGS PLAN
EMPLOYER IDENTIFICATION NUMBER: 74-1787539
PLAN NUMBER: 001
DECEMBER 31, 2001
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 $ 7,716,805
Janus Twenty Fund 10,678,126
MSIFT Midcap Growth Advisor Fund 12,409,555
* Clear Channel
Communications, Inc. Common Stock (unitized) 84,586,087
* Fidelity Management
Trust Company Puritan Fund 23,540,602
* Fidelity Management
Trust Company Equity Income Fund 15,862,922
* Fidelity Management
Trust Company Low Priced Stock Fund 8,789,473
* Fidelity Management
Trust Company Diversified International Fund 8,669,671
* Fidelity Management
Trust Company Dividend Growth Fund 19,615,747
* Fidelity Management
Trust Company Retirement Money Market Fund 9,310,323
Spartan U.S. Equity Index Fund 17,618,051
Loans to Participants Various due dates with interest
rates of prime plus 1% 3,820,161
-------------
$ 222,617,523
=============
* denotes party-in-interest
See accompanying independent auditor's report. Page 10
CLEAR CHANNEL COMMUNICATIONS, INC. 401(K) SAVINGS PLAN
EMPLOYER IDENTIFICATION NUMBER: 74-1787539
PLAN NUMBER: 001
YEAR ENDED DECEMBER 31, 2001
Schedule G, Part III - Schedule of Non-exempt Transactions
(c)
Description
of
transactions
(b) including
Relation- maturity (g) (j)
ship date, Expenses Net
to plan, rate of incurred gain
employer interest, in (i) or
(a) or collateral, connection (h) Current (loss)
Identity other par or (d) (e) (f) with Cost value on each
of party party-in maturity Purchase Selling Lease trans- of of trans-
involved interest value price price rental action asset asset action
----------------- --------- ------------ --------- -------- ------ ----------- ------- -------- --------
* Clear Channel Plan Failure to
Communications, Sponsor timely
Inc. segregate
salary
deferral
contri-
butions
- - - - $982 - -
* denotes party-in-interest
See accompanying independent auditor's report. Page 11
EXHIBIT INDEX
23.1 Consent The Hanke Group, P.C.