Clear Channel Reports Third Quarter 2002 Results.Business Editors SAN ANTONIO--(BUSINESS WIRE)--Oct. 29, 2002 Clear Channel Communications Not to be confused with clear channel radio stations, which are AM radio stations with certain technical parameters. Clear Channel Communications (NYSE: CCU) is a media conglomerate company based in the United States. Inc. (NYSE NYSE See: New York Stock Exchange :CCU CCU abbr. 1. coronary care unit 2. critical care unit CCU critical care unit. CCU Critical care unit, see there ) -- Free Cash Flow increases 108% to $419 Million -- EBITDA up 11% to $616 Million -- Revenues of $2.34 Billion, up 2% Clear Channel Communications Inc. (NYSE:CCU) today reported results for its third quarter ended Sept. 30, 2002. The Company reported revenues for the third quarter of 2002 of $2.34 billion, an increase of 2% when compared with 2001 reported revenues of $2.30 billion. EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become as adjusted (defined as operating cash flow Operating cash flow Earnings before depreciation minus taxes. Measures the cash generated from operations, not counting capital spending or working capital requirements. less corporate expenses, referred to as "EBITDA") was $616 million, compared to $556 million for the same period in 2001, an increase of 11%. Attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk EBITDA (defined as EBITDA including nonconsolidated affiliates owned in both periods, referred to as "Attributable EBITDA") for the third quarter of 2002 was $635 million, compared to $577 million for the third quarter of 2001, an increase of 10%. For the third quarter of 2002, free cash flow (defined as EBITDA less interest expense, taxes and non-revenue producing capital expenditures) increased 108% to $419 million or $0.66 per share, compared to $201 million or $0.33 per share for the same period in 2001. Clear Channel reported net earnings of $213 million, or $0.34 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share for the third quarter of 2002. This compares to a net loss of $232 million or a net loss of $0.39 per diluted share in the third quarter of 2001. Assuming the adoption of FAS 142 "Goodwill and Other Intangibles Property that is a "right" such as a patent, Copyright, or trademark, or one that is lacking physical existence, such as good will. " had occurred at the beginning of 2001, net earnings would have been $119 million or $0.20 per diluted share for the third quarter of 2001, representing an increase of 70% on a per share basis. On a pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma basis, the Company reported third quarter 2002 revenues of $2.31 billion, a decline of 3% when compared with last year's third quarter revenues of $2.38 billion. Pro forma EBITDA was $612 million, an increase of 8% when compared to $567 million for the third quarter of 2001. "I am proud that Clear Channel is on a strong and steady course to compete fairly in our industries, grow our business honestly and manage our business with integrity. I am proud that we work aggressively for all our constituents. We've we've Contraction of we have. we've have operated this Company that way for 30 years and it's it's 1. Contraction of it is. 2. Contraction of it has. See Usage Note at its. it's it is or it has it's be ~have what we are going to continue to do. The fundamentals of our business are sound and I am very proud of the results we are seeing as our people continue to focus on serving our customers and communities," said Lowry Mays Lester Lowry Mays (b. 24 July 1935) is the founder and current chairman of Clear Channel Communications. Early Years Lester Lowry Mays was born on July 24, 1935 in Harris County, Texas to Lester T. Mays and Mary Virginia Lowry. , chairman and chief executive officer. "We have always said that the biggest strength of this company is our ability to develop the very best management teams in our businesses. Our divisional leaders have worked hard with their teams to maximize In a graphical environment, to enlarge a window to the full size of the screen. See Win Maximize windows. our collection of assets to serve our customers and our communities. If we continue to work hard for our customers and our communities, we will win for our shareholders," said Mark Mays Mark Mays is the president and CEO of Clear Channel Communications, Inc., a global media and entertainment company based in San Antonio, Texas, USA. Mays took over as president and CEO in October 2004, after serving the company in other roles. Mays holds a B.A. , president and chief operating officer Chief Operating Officer (COO) The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. . Segment Operating Results RADIO: Clear Channel Radio revenues were $964 million, an increase of 11% over the same period in 2001, and EBITDA was $418 million, reflecting an increase of 18% over the same period in 2001. On a pro forma basis, revenues for the quarter increased 9% and EBITDA increased 17% when compared to the same period in 2001. John Hogan John Hogan is the name of more than one notable man:
Traction is the use of a pulling force to treat muscle and skeleton disorders. Purpose Traction is usually applied to the arms and legs, the neck, the backbone, or the pelvis. through strong revenue growth. Our structure and initiatives continued supporting the decentralized de·cen·tral·ize v. de·cen·tral·ized, de·cen·tral·iz·ing, de·cen·tral·iz·es v.tr. 1. To distribute the administrative functions or powers of (a central authority) among several local authorities. responsibility and accountability The traceability of actions performed on a system to a specific system entity (user, process, device). For example, the use of unique user identification and authentication supports accountability; the use of shared user IDs and passwords destroys accountability. of our managers, while providing unparalleled resources to help them run their clusters." The deep and strong management team of Clear Channel Radio established clarity Clarity is the property of being clear or transparent. Clarity can refer to one's ability to clearly visualize an object or concept, as in thought, understanding, and the "mind's eye", as well as the traditional notion of visual perception, that is, with the of purpose and vision with the 400+ managers during the Clear Channel corporate meeting in September September: see month. . During the third quarter, Radio restructured its programming initiatives to provide more resources to the local markets and empowered them more fully to make local programming decisions. Clear Channel Radio's stations saw significant audience growth in key markets such as New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of and Los Angeles Los Angeles (lôs ăn`jələs, lŏs, ăn`jəlēz'), city (1990 pop. 3,485,398), seat of Los Angeles co., S Calif.; inc. 1850. . The division's early focus on 2003 planning and expense management, and its focus on sales staffing, innovations and overall results, are leading the way for this growth and success to continue. OUTDOOR: During the third quarter of 2002, Clear Channel Outdoor revenues were $478 million, an increase of 12%, and EBITDA was $131 million, a decrease of 3%. On a pro forma basis, third quarter revenues declined 1% and EBITDA declined 11% when compared to the same period in 2001. The U.S. Outdoor business is beginning to see recovery. Most markets grew their revenues significantly as two important operating units operating unit A type of operating company that engages in transactions with outsiders and that is owned by another business. For example, in 1995 the stockholders of Capital Cities/ABC approved a $19 billion merger with the Walt Disney Company, whereupon , the San Francisco San Francisco (săn frănsĭs`kō), city (1990 pop. 723,959), coextensive with San Francisco co., W Calif., on the tip of a peninsula between the Pacific Ocean and San Francisco Bay, which are connected by the strait known as the Golden market and the Airports division, lagged behind the rest of the country. The outdoor division was able to impact its operations by filling key management positions and increasing its national sales staff. All U.S. Outdoor markets are growing the local sales staffs in an attempt to continue to increase advertising demand. Our international outdoor operations continue to improve in the sluggish international markets. The management team is working hard to drive cash flow by optimizing the return on existing assets. They will continue to focus on their core markets, growing sales and marketing efforts where it will be most profitable. ENTERTAINMENT: Clear Channel Entertainment's third quarter 2002 revenues declined 16% to $790 million and EBITDA declined 18% to $79 million when compared to the same period in 2001. On a pro forma basis, third quarter 2002 revenues declined 18%, while EBITDA declined 20% when compared to the same period in 2001. Despite the year-over-year decline in attendance, the diversity of entertainment events in the Clear Channel Entertainment division continues. The current projects include musical tours like the Rolling Stones Rolling Stones, English rock music group that rose to prominence in the mid-1960s and continues to exert great influence. Members have included singer Mick Jagger (Michael Phillip Jagger), 1943–; guitarists Brian Jones and Aerosmith, Broadway Broadway, famous thoroughfare in New York City. It extends from Bowling Green near the foot of Manhattan island N to 262d St. in the Bronx. Throughout its length Broadway is chiefly a commercial street. shows touring in 40+ markets, The Titanic Titanic (tītăn`ĭk), British liner that sank on the night of Apr. 14–15, 1912, after crashing into an iceberg in the N Atlantic S of Newfoundland. More than 1,500 lives were lost. and African exhibits in major museums, family entertainment shows like The Nutcracker nutcracker, common name for a small crow of the genus Nucifraga in the family Corvidae (crow family). The Old World nutcracker (N. caryocatactes) is found throughout the colder regions of Europe, including high mountain forests. , and sporting events like the NFL NFL abbr. National Football League NFL (US) n abbr (= National Football League) → Fußball-Nationalliga season kickoff event in Times Square. Clear Channel Entertainment also continues to drive GetAccess, its on-line-ticket marketing program. All of these products combine to give sponsors' national programs that engage and reach the entertainment consumers.
Operating Results
(in $000s)
Below are the consolidated reported and pro forma results for the
third quarter of 2002 versus 2001.
Revenue 3rd Quarter
------------------------------------------------------
Reported
------------------------------------------------------
2002 2001 % Change
----------- ----------- ---------
Radio $964,123 $866,106 11.3%
Outdoor 478,188 428,359 11.6%
Entertainment 789,793 939,896 (16.0%)
Other 143,844 100,777 42.7%
Eliminations (35,523) (34,905) 1.8%
----------- -----------
Consolidated $2,340,425 $2,300,233 1.7%
------------------------------------------------------
Pro forma(a)
------------------------------------------------------
2002 2001 % Change
----------- ----------- ---------
Radio $964,123 $881,396 9.4%
Outdoor 461,005 463,821 (0.6%)
Entertainment 776,815 943,389 (17.7%)
Other 143,844 126,385 13.8%
Eliminations (35,523) (34,905) 1.8%
----------- -----------
Consolidated $2,310,264 $2,380,086 (2.9%)
EBITDA 3rd Quarter
------------------------------------------------------
Reported
------------------------------------------------------
2002 2001 % Change
--------- --------- ---------
Radio $417,990 $353,537 18.2%
Outdoor 131,470 135,940 (3.3%)
Entertainment 78,846 96,143 (18.0%)
Other 31,748 18,032 76.1%
Corporate (44,385) (48,150) (7.8%)
--------- ---------
Consolidated $615,669 $555,502 10.8%
------------------------------------------------------
Pro forma(a)
------------------------------------------------------
2002 2001 % Change
--------- --------- ---------
Radio $417,990 $357,082 17.1%
Outdoor 129,446 144,816 (10.6%)
Entertainment 77,458 97,217 (20.3%)
Other 31,748 18,966 67.4%
Corporate (44,385) (51,453) (13.7%)
--------- ---------
Consolidated $612,257 $566,628 8.1%
(a) Includes adjustments to the prior period (2001) for all 2001 and
2002 acquisitions for the same time frame as actually owned in the
current period (2002). The 2002 pro forma includes an adjustment
for foreign exchange to present results in constant dollars.
Divestitures are excluded from both 2001 and 2002.
Free Cash Flow
(in $000s, except per share data)
Three Months Ended
September 30th
-------------------
%
2002 2001 Chg.
--------- --------- -----
EBITDA as Adjusted(b) $615,669 $555,502
Interest Expense (107,935) (134,744)
Current Tax Benefit (Expense)(c) (36,735) (122,561)
Non-Revenue Producing Capital Expenditures (52,407) (97,300)
--------- ---------
Total Free Cash Flow $418,592 $200,897 +108%
Total Free Cash Flow Per Share $0.66 $0.33 +100%
Weighted-Average Shares Outstanding(d) 630,846 606,028
(b) Defined as operating cash flow less corporate expenses.
(c) Current tax benefit (expense) reflects adjustments for non-routine
deferred tax items of ($11,414) for 2002 and $0 for 2001.
(d) The 2001 amount includes an additional 12,037 shares used to
calculate both adjusted earnings per share as required by FAS 142
and free cash flow per share.
Selected Balance Sheet Information
(in $000s)
Sept. 30, June 30,
2002 2002
----------- -----------
Current Assets $2,209,789 $2,247,603
Net Property, Plant and Equipment 4,149,099 4,146,190
Total Assets 27,688,406 27,689,848
Current Liabilities (excluding current
portion of long-term debt) 1,805,454 1,920,854
Long-Term Debt (including current portion of
long-term debt) 9,092,758 9,298,745
Shareholders' Equity 13,990,516 13,758,875
Capital Expenditures
(in $000s)
Capital expenditures for the third quarter were:
Recurring $19,507
Non-recurring projects 32,900
Revenue producing 56,214
---------
Total capital expenditures $108,621
=========
The Company defines recurring re·cur intr.v. re·curred, re·cur·ring, re·curs 1. To happen, come up, or show up again or repeatedly. 2. To return to one's attention or memory. 3. To return in thought or discourse. capital expenditures as those expenditures that are required each year. Non-recurring projects are expenditures arising from the integration of newly acquired entities. Revenue producing is discretionary capital investment for new revenue streams. The Company previously provided capital expenditures guidance for the full-year 2002 of $675 million and $550-$575 million for the full-year 2003. Capital expenditures for 2002 are now expected to be $600-$625 million, and the Company reiterates its guidance of $550-$575 million for 2003. Liquidity and Financial Position At Sept. 30, 2002, Clear Channel had net long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. of $9.0 billion(e) consisting of $1.6 billion of bank debt, $7.0 billion of public notes and convertible notes and $400 million of other debt, net of cash. Leverage, defined as net long-term debt divided by the trailing 12-month pro forma EBITDA as adjusted, was 4.6x at Sept. 30, 2002. Clear Channel has three domestic bank credit facilities credit facilities npl → facilidades fpl de crédito credit facilities npl → facilités fpl de paiement credit facilities with $2.6 billion available at Sept. 30, 2002. (e) Net long-term debt includes letters of credit and third-party debt guarantees of $278 million. It does not include purchase accounting premiums and fair value of interest rate swaps Interest Rate Swap A deal between banks or companies where borrowers switch floating-rate loans for fixed rate loans in another country. These can be either the same or different currencies. of $229 million included in long-term debt on the balance sheet. Guidance The Company believes that, based on the current economic and advertising environment, Fourth Quarter 2002 EBITDA will be in the range of $525-550 million. This would represent an increase in 4th quarter EBITDA of 48-55% when compared with 4th quarter 2001 pro forma EBITDA of $355 million. It would also represent an increase of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 10% in EBITDA for the full year when compared to the Company's full-year pro forma EBITDA in 2001. Based on this estimate of full-year EBITDA, the Company expects to generate approximately $1.2 billion of free cash flow as defined above for the full-year 2002. This would represent free cash flow growth of approximately 50% when compared to the same period in 2001. Conference Call Our third quarter 2002 earnings conference call will be held today at 9:00 a.m. Eastern Time. The dial-in number is 801/983-4013 and a pass code is not required. Please call 10 minutes prior to the beginning of the call to ensure that you are connected before the start of the presentation. The teleconference will also be available via a live audio cast on the Company's Web site, located at http://www.clearchannel.com. A replay of the call will be available for 72 hours after the conference call. The replay number is 402/220-1490 and the pass code 1364. The audio cast will also be archived on the Company's Web site and will be available beginning 24 hours after the call for a period of one week. About Clear Channel Worldwide Visit our Web site at http://www.clearchannel.com. Clear Channel Worldwide, headquartered in San Antonio, Texas “San Antonio” redirects here. For other uses, see San Antonio (disambiguation). San Antonio is the second most populous city in Texas, the third most populous metropolitan area in Texas, and is the seventh most populous city in the United States. As of the 2006 U.S. , is a global leader in the out-of-home advertising Out-of-home advertising (also referred to as OOH) is essentially all type of advertising that reaches the consumer while he or she is outside the home. This is in contrast to broadcast, print, or internet advertising, which may be delivered to viewers out-of-home (e.g. and entertainment industries with radio and television stations, outdoor advertising displays, and live entertainment productions and venues throughout the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. and in 65 countries around the world. The numbers contained within this release are unaudited. Certain statements in this release constitute "forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. " within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied Inferred from circumstances; known indirectly. In its legal application, the term implied is used in contrast with express, where the intention regarding the subject matter is explicitly and directly indicated. by such forward-looking statements. The words or phrases "guidance," "expect," "anticipate," "estimates" and "forecast" and similar words or expressions are intended to identify such forward-looking statements. In addition, any statements that refer to expectations or other characterizations of future events or circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or are forward-looking statements. Various risks that could cause future results to differ from those expressed by the forward-looking statements included in this release include, but are not limited to: changes in economic conditions in the U.S. and in other countries in which Clear Channel currently does business (both general and relative to the advertising and entertainment industries); fluctuations in interest rates; changes in industry conditions; changes in operating performance; shifts in population and other demographics The attributes of people in a particular geographic area. Used for marketing purposes, population, ethnic origins, religion, spoken language, income and age range are examples of demographic data. ; changes in the level of competition for advertising dollars; fluctuations in operating costs operating costs npl → gastos mpl operacionales ; technological changes and innovations; changes in labor conditions; changes in governmental regulations and policies and actions of regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. bodies; fluctuations in exchange rates and currency values; changes in tax rates; changes in capital expenditure requirements and access to capital markets. Other key risks are described in the Clear Channel Communications' reports filed with the U.S. Securities and Exchange Commission. Except as otherwise stated in this news announcement, Clear Channel Communications does not undertake any obligation to publicly update or revise any forward-looking statements because of new information, future events or otherwise.
FINANCIAL HIGHLIGHTS
Clear Channel Communications Inc. and Subsidiaries
Unaudited
(In thousands of dollars, except per share data)
-----------------------
Three months ended
September 30,
----------------------- ------
%
2002 2001 Change
----------- ----------- ------
Revenue $2,340,425 $2,300,233 2%
Divisional operating expenses 1,680,371 1,696,581
----------- -----------
Operating cash flow 660,054 603,652 9%
Corporate expenses 44,385 48,150
----------- -----------
EBITDA as adjusted(a) 615,669 555,502 11%
Non-cash compensation expense 936 2,581
Depreciation and amortization 160,503 652,771
Interest expense 107,935 134,744
Gain (loss) on marketable securities (16,009) 5,707
Equity in earnings of nonconsolidated
affiliates 5,906 7,011
Other income (expense) -- net 20,974 (1,651)
----------- -----------
Income (loss) before income taxes and
cumulative effect of a change in
accounting principle 357,166 (223,527)
Income tax (expense) benefit:
Current (25,321) (122,561)
Deferred (119,331) 113,890
----------- -----------
Net income (loss) $212,514 ($232,198) 192%
=========== ===========
Net income (loss) per share:
Basic $0.35 ($0.39)
=========== ===========
Diluted $0.34 ($0.39)
=========== ===========
----------------------------------------------------------------------
Net income per share adjusted
for adoption of FAS 142(b):
Basic $0.35 $0.20 75%
Diluted $0.34 $0.20 70%
----------------------------------------------------------------------
----------------------------------------------------------------------
Attributable operating cash flow(c) $680,774 $626,671 9%
Attributable EBITDA(d) $635,448 $576,534 10%
----------------------------------------------------------------------
----------------------------------------------------------------------
Free cash flow(e) $418,592 $200,897 108%
Free cash flow per share $0.66 $0.33 100%
----------------------------------------------------------------------
----------------------------------------------------------------------
Weighted Average Shares Outstanding --
Diluted(f) 630,846 593,991
----------------------------------------------------------------------
(a) Defined as cash flow from operations less corporate expenses.
(b) Adjusted to present the impact of FAS 142 on net income per share
as if FAS 142 had been in effect for the three months ended
Sept. 30, 2001.
(c) Defined as cash flow from operations (including nonconsolidated
affiliates owned in both periods presented).
(d) Defined as cash flow from operations less corporate expenses
(including nonconsolidated affiliates owned in both periods
presented).
(e) Defined as EBITDA as adjusted less interest expense, tax expense
and non-revenue producing capital expenditures.
(f) The 2001 amount does not include an additional 12,037 shares for
the three months ended Sept. 30, 2001, used to calculate both
adjusted earnings per share as required by FAS 142 and free cash
flow per share.
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