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, 2003,
or
[ ] Transition report pursuant to Section 15(d) of the Securities Exchange
Act of 1934
For the transition period from to .
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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
Report of Independent Registered Public Accounting Firm..........................................................3
Financial Statements:
Statements of Net Assets Available for Plan Benefits
as of December 31, 2003 and 2002...............................................................................4
Statement of Changes in Net Assets Available for Plan Benefits
for the Year Ended December 31, 2003...........................................................................5
Notes to Financial Statements....................................................................................6
Supplemental Schedules:
Schedule of Assets Held for Investment Purposes as of December 31, 2003.........................................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 28, 2004
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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Page 2
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Clear Channel Communications, Inc. 401(k) Savings Plan
San Antonio, Texas
We have audited the financial statements of the Clear Channel Communications,
Inc. 401(k) Savings Plan as of December 31, 2003 and 2002, and for the year
ended December 31, 2003, as listed in the accompanying contents page. 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 the standards of the Public Company
Accounting Oversight Board (United States). 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, 2003 and
2002, and the changes in its net assets available for plan benefits for the year
ended December 31, 2003, in conformity with accounting principles generally
accepted in the United States of America.
Our audits were conducted 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, 2003, 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. 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, 2003, 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.
San Antonio, Texas
June 18, 2004
Page 3
CLEAR CHANNEL COMMUNICATIONS, INC. 401(K) SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
DECEMBER 31, 2003 AND 2002
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ASSETS 2003 2002
INVESTMENT:
Plan interest in Clear Channel Communications, Inc. -
Master Trust $472,372,648 $316,991,443
RECEIVABLES:
Employer's contribution 285,086 269,307
Participants' contributions 1,480,581 1,203,156
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Total receivables 1,765,667 1,472,463
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TOTAL ASSETS 474,138,315 318,463,906
LIABILITIES
Administrative fees payable 26,256 49,622
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TOTAL LIABILITIES 26,256 49,622
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NET ASSETS AVAILABLE FOR PLAN BENEFITS $474,112,059 $318,414,284
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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, 2003
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ADDITIONS TO NET ASSETS ATTRIBUTED TO:
Investment income:
Net appreciation in fair value of investments $ 82,408,504
Dividends and interest 7,092,820
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Total investment income 89,501,324
Contributions:
Employer 16,495,921
Participants 50,324,700
Rollovers 1,580,789
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Total contributions 68,401,410
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TOTAL ADDITIONS 157,902,734
DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO:
Benefits paid to participants 29,594,341
Administrative expenses 116,583
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TOTAL DEDUCTIONS 29,710,924
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Net increase before transfer of plan assets 128,191,810
Transfer of plan assets 27,505,965
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Net increase 155,697,775
NET ASSETS AVAILABLE FOR PLAN BENEFITS:
Beginning of year 318,414,284
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End of year $474,112,059
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See notes to financial statements. Page 5
CLEAR CHANNEL COMMUNICATIONS, INC. 401(K) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2003 AND 2002
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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 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.
CONTRIBUTIONS -- Employer contributions to the Plan include matching
contributions. Additionally, elective contributions may be made annually at the
discretion of the plan sponsor's Board of Directors. The employer matching
contribution was $16,495,921 for the year ended December 31, 2003.
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 25% of pre-tax 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 sponsored
Company stock, one common commingled pool, and seventeen 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 certain
stock fund expenses and transaction fees. Allocations are based on participant
account balances and participant directed transactions, 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,
2003, approximately $712,574 of forfeitures was used to reduce employer
contributions. There are unallocated forfeitures of approximately $30,000 as of
December 31, 2003.
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) for
contributions made prior to January 1, 2002. A participant is 100% vested after
five years of credited service (or upon the death or disability of the
participant) for contributions made after January 1, 2002.
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.
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.
Hardship withdrawals are available to Plan participants upon approval.
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Page 6
CLEAR CHANNEL COMMUNICATIONS, INC. 401(k) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 2003 AND 2002
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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 interest in the Clear
Channel Communications, Inc. Master Trust is stated at 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 the plan administrator 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
The Master Trust was established for the investment of assets of the Plan and
three other Clear Channel Communications, Inc., sponsored retirement plans.
These investments in the Master Trust consist of and are valued as follows:
o Sponsored Company stock - quoted market price.
o Registered investment funds - net asset value of shares held at December
31.
o Common commingled pool - fair value of the underlying publicly-traded
stocks.
o Participant loans - valued at cost which approximates fair value.
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, 2003
AND 2002, WAS APPROXIMATELY 90.6% AND 90.6%, RESPECTIVELY.
The following table presents the fair values of investments and investment
income for the Master Trust:
2003 2002
Investments at fair value:
Clear Channel Communications, Inc., stock (unitized) $ 80,224,035 $ 67,343,100
Registered investment funds 383,304,496 243,577,987
Common commingled pool 48,623,212 31,223,703
Participant Loans 9,359,973 7,738,452
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$521,511,716 $349,883,242
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Investment income:
Net appreciation in fair value of investments:
Clear Channel Communications, Inc., stock (unitized) $ 17,324,681
Registered investment funds 62,498,813
Common commingled pool 10,431,226
------------
90,254,720
Interest and dividends 7,803,269
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$ 98,057,989
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Page 7
CLEAR CHANNEL COMMUNICATIONS, INC. 401(k) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 2003 AND 2002
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4. PLAN MERGERS
Effective January 16, 2003, all of the net assets of The Ackerley Group, Inc.
Savings and Retirement Plan merged into the Clear Channel Communications, Inc.
401(k) Savings Plan. Effective December 1, 2003, all of the net assets of WIXT
TV Savings and Retirement Plan merged into the Clear Channel Communications,
Inc. 401(k) Savings Plan. The net assets transferred were recorded by the Clear
Channel Communications, Inc. 401(k) Savings Plan at their fair market value at
the date of merger. The changes in net assets of the combined plans are included
in the accompanying statement of changes in net assets available for benefits
from the effective date of respective plan mergers through December 31, 2003. A
summary of the transferred net assets follows:
Investments at fair value:
Ackerley Group, Inc. Savings and Retirement Plan $26,330,344
WIXT TV Savings and Retirement Plan 1,175,621
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$27,505,965
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5. INVESTMENTS
The following presents investments that represent 5% or more of the Plan's net
assets as of December 31, 2003 and 2002:
2003 2002
Clear Channel Communications, Inc. (unitized*) $78,227,576 $65,754,022
Fidelity Puritan Fund $39,210,293 $36,394,878
Fidelity U.S. Equity Index Commingled Pool $40,664,211 $25,985,601
Fidelity Equity-Income Fund $31,819,412 $18,988,698
Fidelity Dividend Growth Fund $49,038,048 $33,827,334
Fidelity Retirement Money Market Portfolio $37,470,215 $31,652,551
MSIFT Mid Cap Growth Portfolio - Adviser Class $40,681,770 $24,375,051
PIMCO Total Return Fund - Institutional Class $27,902,362 $21,247,097
Fidelity Low-Priced Stock Fund $41,986,575 $26,549,917
Fidelity Diversified International Fund $28,231,052 $16,084,717
During 2003, the Plan's investments (including gains and losses on investments
bought and sold, as well as held during the year) appreciated in value as
follows:
Clear Channel Communications, Inc., stock (unitized*) $16,919,107
Common commingled pool 8,726,455
Registered investment funds 56,762,942
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$82,408,504
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*A non-registered fund comprised of the underlying Company stock and a
short-term cash component.
6. RELATED PARTY TRANSACTIONS
Certain Plan investments are 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 $245,000 in professional fees related to the
Plan for the year ended December 31, 2003.
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Page 8
CLEAR CHANNEL COMMUNICATIONS, INC. 401(k) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 2003 AND 2002
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7. 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% vested in the employer's
contributions allocated to their account.
8. TAX STATUS
The Internal Revenue Service has determined and informed the plan sponsor by a
letter dated April 11, 2003, that the Plan and related trust are designed in
accordance with applicable sections of the Internal Revenue Code (IRC).
Effective January 1, 2003, the Clear Channel Communications, Inc. 401(k) Savings
Plan was amended and restated to reflect recent amendments to the Plan and
clarify certain provisions under the Plan, among other matters. 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.
9. SUBSEQUENT EVENTS
Effective January 1, 2004, the Plan was amended to allow for Age 50 Catch-Up
employee contributions.
Effective March 15, 2004, the Fidelity Growth Company Fund was added as an
investment option. The Janus Twenty Fund was eliminated and all account balances
in the Janus Twenty Fund were transferred to the Fidelity Growth Company Fund
effective as of the close of business on March 15, 2004. Any contribution
elections to the Janus Twenty Fund as of March 15, 2004, were re-allocated to
the Fidelity Growth Company Fund.
Effective March 31, 2004, the assets of the WOKR-TV 401(k) Profit Sharing and
Savings Plan (WOKR Plan) were transferred into the Plan. The participants of the
WOKR Plan began participating in the Plan as of December 1, 2003.
Effective July 30, 2004, the Fidelity Low-Priced Stock Fund will be closed to
new participants. Those participants investing in the fund will be permitted to
continue investing. Those participants who do not have a balance in this fund
will not be able to invest in the fund.
10. RISK AND UNCERTAINTIES
The Plan may invest in various types of investment securities. Investment
securities are exposed to various risks, such as interest rate, market, and
credit risks. Due to the level of risk associated with certain investment
securities, it is at least reasonably possible that changes in the values of
investment securities will occur in the near term and that such changes could
materially affect the amounts reported in the statement of net assets available
for Plan benefits.
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Page 9
SUPPLEMENTAL SCHEDULE
CLEAR CHANNEL COMMUNICATIONS, INC. 401(K) SAVINGS PLAN
EMPLOYER IDENTIFICATION NUMBER: 74-1787539
PLAN NUMBER: 001
DECEMBER 31, 2003
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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
-------------------------------------------------- ------------------------------------------------ ----------------------
Janus Twenty Fund $ 13,671,651
MSIFT Mid Cap Growth Portfolio - Adviser Class 40,681,770
PIMCO Total Return Fund - Institutional Class 27,902,362
Lord Abbett Mid-Cap Value Fund - Class A 3,041,038
* Clear Channel Communications, Inc. Common Stock (unitized) 78,227,576
* Fidelity Management Trust Company Puritan Fund 39,210,293
* Fidelity Management Trust Company Equity-Income Fund 31,819,412
* Fidelity Management Trust Company Low-Priced Stock Fund 41,986,575
* Fidelity Management Trust Company Diversified International Fund 28,231,052
* Fidelity Management Trust Company Dividend Growth Fund 49,038,048
* Fidelity Management Trust Company Small Cap Stock Fund 1,001,224
* Fidelity Management Trust Company Freedom Income Fund 363,056
* Fidelity Management Trust Company Freedom 2000 Fund 1,040,101
* Fidelity Management Trust Company Freedom 2010 Fund 21,085,970
* Fidelity Management Trust Company Freedom 2020 Fund 6,426,207
* Fidelity Management Trust Company Freedom 2030 Fund 1,188,910
* Fidelity Management Trust Company Freedom 2040 Fund 616,615
* Fidelity Management Trust Company Retirement Money Market Portfolio 37,470,215
* Fidelity Management Trust Company U.S. Equity Index Commingled Pool 40,664,211
Participant Loans Various due dates with interest rates between
5% - 11.5% 8,706,362
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$ 472,372,648
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* Denotes party-in-interest
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See accompanying report of independent registered
public accounting firm. Page 11
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
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23.1 Consent of The Hanke Group, P.C.