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
UNIVERSAL OUTDOOR, INC.
SALARY REDUCTION PROFIT SHARING 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)
UNIVERSAL OUTDOOR, INC.
SALARY REDUCTION PROFIT SHARING 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.
UNIVERSAL OUTDOOR, INC. SALARY REDUCTION
PROFIT SHARING PLAN
Date: June 27, 2002
By: /s/ Randall T. Mays
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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 Universal Outdoor, Inc. Salary Reduction Profit Sharing Plan
We have audited the accompanying statements of net assets available for plan
benefits of the Universal Outdoor, Inc. Salary Reduction Profit Sharing 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 the 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 misstatements. 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 Universal
Outdoor, Inc. Salary Reduction Profit Sharing 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 required 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 23, 2002
Page 3
UNIVERSAL OUTDOOR, INC.
SALARY REDUCTION PROFIT SHARING 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 $ 12,610,823 $ 13,171,550
RECEIVABLES:
Due from Clear Channel Communications, Inc.
401(k) Savings Plan - 95,230
------------ ------------
Total receivables - 95,230
------------ ------------
TOTAL ASSETS 12,610,823 13,266,780
LIABILITIES
Accrued expenses 2,542 3,053
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TOTAL LIABILITIES 2,542 3,053
------------ ------------
NET ASSETS AVAILABLE FOR PLAN BENEFITS $ 12,608,281 $ 13,263,727
============ ============
See notes to financial statements. Page 4
UNIVERSAL OUTDOOR, INC.
SALARY REDUCTION PROFIT SHARING 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 $ (224,613)
Dividends and interest 486,700
-----------
TOTAL ADDITIONS 262,087
DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO:
Benefits paid to participants 905,865
Administrative expenses 11,668
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TOTAL DEDUCTIONS 917,533
-----------
Net decrease (655,446)
NET ASSETS AVAILABLE FOR PLAN BENEFITS:
Beginning of year 13,263,727
-----------
End of year $12,608,281
===========
See notes to financial statements. Page 5
UNIVERSAL OUTDOOR, INC.
SALARY REDUCTION PROFIT SHARING PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2001 AND 2000
1. DESCRIPTION OF PLAN
The following description of the Universal Outdoor, Inc. (the Company) Salary
Reduction Profit Sharing 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 December 31, 1999, the Plan froze employer and employee contributions.
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.
Contributions -- Effective December 31, 1999, 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 investment options offered by
the Plan. The Plan currently offers ten registered investment funds and one
sponsored stock fund in 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. The benefit to
which a participant is entitled is the benefit that can be provided from the
participant's vested account.
Vesting -- All participants of the Plan became 100% vested as of December 31,
1999.
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 either a lump sum amount equal to
the value of the participant's vested interest in his or her account 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.
2. SUMMARY OF ACCOUNTING POLICIES
Basis of Accounting -- The financial statements of the Plan are prepared using
the accrual method of accounting.
Page 6
UNIVERSAL OUTDOOR, INC.
SALARY REDUCTION PROFIT SHARING PLAN
NOTES TO FINANCIAL STATEMENTS (continued)
DECEMBER 31, 2001 AND 2000
2. SUMMARY OF ACCOUNTING POLICIES (continued)
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 year-end. 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 December 31, 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. As such, certain previous
investments were liquidated and redirected to other available investment
options. The 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 of 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 3.7% and 7.0%, respectively.
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 common stock (unitized)* $ 647,549 $ 565,720
Fidelity Diversified International Fund 872,563 1,129,874
Fidelity Retirement Money Market Fund 935,829 966,783
Fidelity Puritan Fund 1,252,603 1,265,395
Fidelity Equity Income Fund 1,366,729 1,549,119
Spartan U.S. Equity Index Fund 2,299,680 2,936,237
Fidelity Low Price Stock Fund 4,160,885 3,452,992
Page 7
UNIVERSAL OUTDOOR, INC.
SALARY REDUCTION PROFIT SHARING PLAN
NOTES TO FINANCIAL STATEMENTS (continued)
DECEMBER 31, 2001 AND 2000
4. INVESTMENTS (continued)
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 $ (247,558)
Common stock - Clear Channel Communications, Inc. (unitized)* 22,945
---------------
$ (224,613)
===============
*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.
Clear Channel Communications, Inc., the parent Company, paid approximately
$11,500 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 Universal Outdoor,
Inc., Salary Reduction Profit Sharing Plan wherein both employer and employee
contributions to the Plan were frozen as of December 31, 1999. Participants'
account balances were fully vested in the Plan as of December 31, 1999. All
employees of the Company became eligible to participate in the Clear Channel
Communications, Inc., 401(k) Savings Plan effective January 1, 2000. The Plan
Sponsor has not expressed an intent to terminate the Plan.
7. TAX STATUS
The Internal Revenue Service has determined and informed the Company by a letter
dated October 12, 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 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
UNIVERSAL OUTDOOR, INC.
SALARY REDUCTION PROFIT SHARING PLAN
EMPLOYER IDENTIFICATION NUMBER: 86-0801051
PLAN NUMBER: 004
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 $ 319,053
Janus Twenty Fund 21,609
MSIFT Mid-Cap Growth Advisor Fund 224,524
* Clear Channel
Communications, Inc. Common Stock (unitized) 647,549
* Fidelity Management
Trust Company Puritan Fund 1,252,603
* Fidelity Management
Trust Company Equity Income Fund 1,366,729
* Fidelity Management
Trust Company Low Priced Stock Fund 4,160,885
* Fidelity Management
Trust Company Diversified International Fund 872,563
* Fidelity Management
Trust Company Dividend Growth Fund 171,847
* Fidelity Management
Trust Company Retirement Money Market Fund 935,829
Spartan U.S. Equity Index Fund 2,299,680
Participant loans Various due dates with a fixed
interest rate of prime plus 1% 337,952
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$ 12,610,823
==============
* denotes party-in-interest
See accompanying independent auditor's report. Page 9
EXHIBIT INDEX
23.1 Consent of The Hanke Group, P.C.