EX-99.1 3 d07776exv99w1.txt PRESS RELEASE EXHIBIT 99.1 CLEAR CHANNEL REPORTS SECOND QUARTER 2003 RESULTS SAN ANTONIO, TEXAS JULY 29, 2003...Clear Channel Communications, Inc. (NYSE: CCU) today reported results for its second quarter ended June 30, 2003. The Company's reported revenues of $2.32 billion for the second quarter increased 6.6 percent over 2002 revenues of $2.17 billion. Clear Channel reported net earnings of $251.3 million or $0.41 per diluted share for the second quarter of 2003. This compares to net earnings of $238.0 million or $0.39 per diluted share in 2002. The Company's second quarter 2003 net earnings included approximately $41.3 million of pre-tax gains, $0.04 per share after tax, related primarily to the early extinguishment of debt. Excluding those gains, net earnings would have been $225.7 million or $0.37 per diluted share. Clear Channel's second quarter 2002 net earnings also included pre-tax gains, which were approximately $21.4 million or $0.02 per share after tax. The pre-tax gains were related to the sale of certain assets and a favorable litigation settlement. Excluding those gains, diluted net income would have been $230.6 million or $0.37 per diluted share. Excluding these gains in both periods, earnings per share would be flat year-over-year. EBITDA As Adjusted (defined as revenue less divisional operating expenses and corporate expenses and referred to as EBITDA - see reconciliation to net income at the end of this release) increased 1 percent over the second quarter of 2002, to $632.9 million. On a pro forma basis, second quarter 2003 revenues of $2.24 billion were essentially flat when compared with last year's revenues of $2.23 billion. Pro forma EBITDA declined 1.5 percent to $622.9 million from $632.4 million for 2002. Pro forma revenues, divisional operating expenses and EBITDA include adjustments to the prior period (2002) for all acquisitions for the same time frame as actually owned in the current period (2003), include an adjustment for foreign exchange to present current period results in constant dollars, and exclude results from divestitures from both 2002 and 2003 results. See reconciliation of pro forma information at the end of this release. By presenting EBITDA, pro forma revenues and pro forma EBITDA, Clear Channel intends to provide investors a better understanding of the core operating results and underlying trends to measure past performance as well as prospects for the future. Clear Channel evaluates operating performance based on several measures, including EBITDA, as Clear Channel believes it is an important measure of the operational strength of its businesses. For the six months ended June 30, 2003, cash flow from operating activities was $943.7 million, cash flow used in investing activities was $197.9 million, and cash flow used in financing activities was $720.3 million for a net increase in cash of $25.5 million. Free cash flow (defined as EBITDA, less interest expense, taxes and non-revenue producing capital expenditures - see reconciliation to cash flow from operating activities at the end of this release) increased 21.4 percent to $443.5 million for the second quarter of 2003. Clear Channel considers free cash flow to be an important measure of a company's ability to provide value to shareholders. By presenting free cash flow, Clear Channel intends to provide investors a better understanding of the Company's ability to pay a dividend, pay down debt, make acquisitions and invest in its businesses. Lowry Mays, Chairman and Chief Executive Officer of Clear Channel said, "Our second quarter results reflect our ability to execute our business strategy in a challenging economic environment. We are especially proud of the performance of our local management teams this quarter, as their focus on serving the needs of their communities was the foundation of our success. We believe that we are very well positioned for future growth." Mark Mays, President and Chief Operating Officer commented, "Our second quarter results were driven by operating improvements across many of our divisions. We delivered significant free cash flow and continued to focus on strengthening our balance sheet and investing in our future growth. We are seeing a gradual 1 improvement in the economy and are looking for a stronger second half as the environment improves. We remain focused on increasing shareholder value by serving the needs of our communities, employing the best people and providing the highest quality products and services that deliver results for our customers." OPERATING RESULTS (IN $000S) Below are the consolidated reported and pro forma results for the second quarter of 2003 versus 2002.
REVENUE 2nd Quarter ---------------------------------------------------------------------------------------------------- Reported Pro forma (a) -------------------------------------------- ----------------------------------------------- 2003 2002 % Change 2003 2002 % Change ---------- ---------- -------- ---------- ---------- -------- Radio $ 970,565 $ 991,282 (2.1%) $ 970,228 $ 995,897 (2.6%) Outdoor 569,174 473,991 20.1% 519,683 500,405 3.9% Entertainment 675,920 619,225 9.2% 644,743 623,690 3.4% Other 139,305 116,845 19.2% 139,305 136,457 2.1% Eliminations (37,715) (28,433) 32.6% (37,715) (28,433) 32.6% ---------- ---------- ---------- ---------- Consolidated $2,317,249 $2,172,910 6.6% $2,236,244 $2,228,016 0.4%
EBITDA 2nd Quarter ---------------------------------------------------------------------------------------------------- Reported Pro forma (a) -------------------------------------------- ----------------------------------------------- 2003 2002 % Change 2003 2002 % Change ---------- ---------- -------- ---------- ---------- -------- Radio $ 433,677 $ 441,348 (1.7%) $ 434,146 $ 442,263 (1.8%) Outdoor 154,840 144,502 7.2% 147,453 149,865 (1.6%) Entertainment 56,640 51,587 9.8% 53,598 51,331 4.4% Other 30,187 29,072 3.8% 30,187 31,301 (3.6%) Corporate (42,459) (39,203) 8.3% (42,459) (42,362) 0.2% ---------- ---------- ---------- ---------- Consolidated $ 632,885 $ 627,306 0.9% $ 622,925 $ 632,398 (1.5%)
(a) Includes adjustments to the prior period (2002) for all acquisitions for the same time frame as actually owned in the current period (2003). Divestitures are excluded from both 2002 and 2003. The 2003 pro forma include an adjustment for foreign exchange to present results in constant dollars. RADIO BROADCASTING ------------------ Reported basis and pro forma revenue decreased 2.1 percent and 2.6 percent, respectively, for the three months ended June 30, 2003 as compared to the same period of 2002. Clear Channel Radio saw revenue declines, which were attributed to weakness in local spot sales, small market revenues, the Company's national syndication business and non-traditional revenues, which includes the loss of revenue resulting from its cessation of business with independent promoters. Retail, auto, telecom/utility, and entertainment were the strongest national advertising categories during the three months ended June 30, 2003, while the consumer products and fast food categories were weaker. Reported basis and pro forma divisional operating expenses decreased 2.4 percent and 3.2 percent, respectively, for the three months ended June 30, 2003 as compared to the same period of 2002. A portion of the declines relate to variable expense declines such as lower bonus, commission and other variable expenses, which are tied to revenue performance. 2 OUTDOOR ADVERTISING ------------------- Reported basis revenue and divisional operating expenses increased $95.2 million and $84.8 million, respectively, for the three months ended June 30, 2003 as compared to the same period of 2002. The increase is partially attributable to acquisitions, the largest being Ackerley, which included 3 markets. These markets contributed approximately $20.0 million to revenue and $9.6 million to divisional operating expenses for the three months ended June 30, 2003. Also, the devaluation of the dollar relative to the Company's international functional currencies contributed approximately $49.5 million to the reported basis revenue increase and $42.1 million to the reported basis divisional operating expenses increase for the three months ended June 30, 2003 as compared to the same period of 2002. Pro forma basis revenue increased $19.3 million for the three months ended June 30, 2003, as compared to the same period of 2002. Domestically, Clear Channel experienced broad based pro forma revenue increases across all markets and all products for the three months ended June 30, 2003, as compared to the same period of 2002. Internationally, street furniture and transit pro forma revenue grew for the three months ended June 30, 2003 compared to the same period of 2002. Pro forma revenue on the Company's international billboard inventory was down during this period, lead by pro forma revenue declines on its billboard inventory in the United Kingdom and France. Italy and Australia were strong performing international markets for the three months ended June 30, 2003 compared to the same period of 2002. Pro forma basis divisional operating expenses increased $21.7 million for the three months ended June 30, 2003, as compared to the same period of 2002. Approximately $9.0 million of the pro forma basis divisional operating expenses increase relates to restructuring expenses in France. Domestically, Clear Channel saw production, bonus and commission expenses increase associated with increased revenue. LIVE ENTERTAINMENT ------------------ Reported basis revenue and divisional operating expenses increased $56.7 million and $51.6 million, respectively, for the three months ended June 30, 2003 as compared to the same period of 2002. The increase in reported basis revenue and divisional operating expenses is largely attributable to the devaluation of the dollar relative to the Company's international functional currencies. The devaluation contributed approximately $31.2 million to the revenue increase and $28.1 million to the divisional operating expenses increase for the three months ended June 30, 2003 as compared to the same period of 2002. Pro forma basis revenue increased $21.1 million for the three months ended June 30, 2003 as compared to the same period of 2002. The pro forma basis revenue increase is attributable to increases in concessions and merchandising revenue, sponsorship revenues, box and season ticket revenues, theater touring revenues and other event revenues. These increases were slightly offset by a decline in ticket sales during this period. Pro forma basis divisional operating expenses increased $18.8 million for the three months ended June 30, 2003 as compared to the same period of 2002. The increase is attributable to variable expense increases associated with the increase in revenue, primarily driven by talent costs paid to the artists performing at our events. 3 FREE CASH FLOW (IN $000S)
Three Months Ended June 30 Inc./Dec (%) ------------------------------------ ------------ 2003 2002 -------- --------- EBITDA $632,885 $ 627,306 Interest Expense (95,311) (108,350) Current Tax Benefit (Expense) (1) (58,321) (87,187) Non-Revenue Producing Capital Expenditures (35,719) (66,397) -------- --------- Total Free Cash Flow (1) $443,534 $ 365,372 21.4%
(1) The 2002 free cash flow and current tax expense reflect adjustments for non-routine tax items, which would have reduced free cash flow by $125,164.
Six Months Ended June 30 Inc./Dec (%) ------------------------------------ ------------ 2003 2002 -------- --------- EBITDA $1,008,474 $ 997,347 Interest Expense (196,263) (218,717) Current Tax Benefit (Expense) (2) (40,326) (98,458) Non-Revenue Producing Capital Expenditures (65,468) (124,112) ---------- --------- Total Free Cash Flow (2) $ 706,417 $ 556,060 27.0%
(2) The 2002 free cash flow and current tax expense reflect adjustments for non-routine tax items, which would have reduced free cash flow by $107,300. SELECTED BALANCE SHEET INFORMATION
(In $000s) June 30, March 31, 2003 2003 ----------- ----------- Cash $ 195,628 $ 349,242 Total Current Assets $ 2,316,376 $ 2,213,964 Net Property, Plant and Equipment $ 4,225,088 $ 4,190,478 Total Assets $27,978,582 $27,760,993 Current Liabilities (excluding current portion of long-term debt) $ 1,914,073 $ 1,657,745 Long-Term Debt (including current portion of long-term debt) $ 7,973,901 $ 8,634,088 Shareholders' Equity $14,673,389 $14,327,896
CAPITAL EXPENDITURES (IN $000S) Capital expenditures for the second quarter were:
June 30, June 30, 2003 2002 -------- -------- Recurring $33,244 $ 36,557 Non-recurring projects 2,475 29,840 Revenue producing 40,128 54,862 ------- -------- Total capital expenditures $75,847 $121,259
The Company defines recurring capital expenditures as those expenditures that are required each year. Non-recurring projects are expenditures arising primarily from the integration of newly acquired entities. Revenue producing is discretionary capital investment for new revenue streams. 4 LIQUIDITY AND FINANCIAL POSITION At June 30, 2003, Clear Channel had long-term debt of:
(In $Millions) Bank Credit Facilities $ 625.7 Public Notes 7,130.5 Other Debt 217.7 --------- Total $ 7,973.9
Leverage, defined as debt*, net of cash, divided by the trailing 12-month pro forma EBITDA**, was 3.57x at June 30, 2003. Randall Mays, Chief Financial Officer for the Company, said, "The Company once again showed its ability to generate significant free cash flow. Despite a tough economic environment, free cash flow increased 21% for the second quarter and is up 27% for the first half of 2003. I am pleased that we were able to strengthen our balance sheet by decreasing total debt $660 million during the second quarter and improving our leverage ratio to 3.57x. We believe that it is appropriate, given the significant amount of free cash flow that the company generates, that we return a portion of those profits to our shareholders and consequently announced last week the initiation of a quarterly dividend. The Board remains committed to maintaining our bias for improving the leverage ratios of the company, while continuing to balance that with strategic acquisitions and long-term capital requirements." During the second quarter of 2003, Clear Channel issued $500 million of 4.25% Senior Notes due 2009, $250 million of 4.40% Senior Notes due 2011 and $250 million of 4.90% Senior Notes due 2015. The proceeds from the issuances were used to pay down the Company's bank credit facilities and three-year term loan. Clear Channel redeemed the 2.625% Senior Convertible Notes due 2003 at their maturity on April 1, 2003 and the 4.75% Liquid Yield Option Notes due 2018 (LYONS) on April 17, 2003. The LYONS were redeemed pursuant to call provisions in the indentures. As of July 29, 2003, Clear Channel will have approximately $2.4 billion available on its three domestic bank credit facilities. The Company currently has approximately $737 million of public debt maturing during the remainder of 2003 in addition to other indebtedness including notes, maturing in later years. The Company intends to utilize the existing capacity under its bank facilities and other available funds to redeem or repurchase any or all of its debt through open market purchases, privately negotiated transactions, or other means. Footnotes: * As defined by Clear Channel's credit facilities, debt is long-term debt of $7,973.9 million plus letters of credit of $109.5 million; guarantees of third party debt of $85.4 million; net original issue discount/premium of $2.6 million; deferred purchase consideration of $23.9 million included in other long-term liabilities; and less fair value of interest rate swaps of $108.9 million and purchase accounting premiums of $18.2 million. ** As defined by Clear Channel's credit facilities, pro forma EBITDA is the trailing twelve-month EBITDA adjusted to include EBITDA of any assets acquired in the trailing twelve-month period. BUSINESS OUTLOOK The Company believes that, based on the current economic and advertising environment, EBITDA for the third quarter 2003 will increase in the mid to high single digits versus the third quarter 2002 on both a reported and pro forma basis. For the full year, the Company expects both reported and pro forma EBITDA growth in the mid to high single digits with resulting free cash flow growth in the mid to high teens. 5 CONFERENCE CALL Clear Channel's second-quarter 2003 earnings conference call will be held on July 29th at 9:00 a.m. Eastern Time. The dial-in number is 1-800-946-0719 and the pass code is 636164. 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 website, located at http://www.clearchannel.com. A replay of the call will be available at 11:00 a.m. Eastern Time and will be accessible for 72 hours after the conference call. The replay number is 1-888-203-1112 and the pass code 636164. The audio cast will also be archived on the Company's website and will be available beginning 24 hours after the call for a period of one week. RECONCILIATION OF EBITDA TO NET INCOME
(In $000s) Three Months Ended June 30 -------------------------- 2003 2002 -------- -------- EBITDA $632,885 $627,306 Less: Noncash compensation expense 1,779 1,445 Depreciation and amortization 161,880 146,261 -------- -------- Operating Income $469,226 $479,600 Less: Interest Expense 95,311 108,350 Plus: Gain on marketable securities 2,581 5,917 Plus: Equity in earnings of nonconsolidated affiliates 6,713 7,500 Plus: Other income - net 39,142 15,394 -------- -------- Income before income taxes $422,351 $400,061 Income tax expense 171,051 162,025 -------- -------- Net Income $251,300 $238,036
RECONCILIATION OF CASH FLOW FROM OPERATING ACTIVITIES TO FCF
(In $000s) Three Months Ended June 30 -------------------------- 2003 2002 --------- --------- Net cash provided by operating activities $ 507,896 $ 399,980 Changes in operating assets and liabilities (37,276) (85,267) Non-revenue producing capital expenditures (35,719) (66,397) Non-routine deferred tax items -- 125,164 Other 8,633 (8,108) --------- --------- Free cash flow $ 443,534 $ 365,372
RECONCILIATION OF CASH FLOW FROM OPERATING ACTIVITIES TO FCF
(In $000s) Six Months Ended June 30 -------------------------- 2003 2002 --------- --------- Net cash provided by operating activities $ 943,738 $ 849,833 Changes in operating assets and liabilities (176,988) (263,806) Non-revenue producing capital expenditures (65,468) (124,112) Non-routine deferred tax items -- 107,300 Other 5,135 (13,155) --------- --------- Free cash flow $ 706,417 $ 556,060
6 RECONCILIATION OF REPORTED BASIS TO PRO FORMA BASIS CONSOLIDATED RECONCILIATION OF REPORTED BASIS TO PRO FORMA BASIS
(In $000s) Three Months Ended June 30 ------------------------------- 2003 2002 ----------- ----------- Reported Revenue $ 2,317,249 $ 2,172,910 Acquisitions -- 61,211 Divestitures (337) (6,105) Foreign Exchange adjustments (80,668) -- ----------- ----------- Pro Forma Revenue $ 2,236,244 $ 2,228,016 Reported Divisional Operating Expenses $ 1,641,905 $ 1,506,401 Acquisitions -- 51,532 Divestitures (806) (4,677) Foreign Exchange adjustments (70,239) -- ----------- ----------- Pro Forma Divisional Operating Expenses $ 1,570,860 $ 1,553,256 Reported Corporate Expense $ 42,459 $ 39,203 Acquisitions -- 3,159 Divestitures -- -- Foreign Exchange adjustments -- -- ----------- ----------- Pro Forma Corporate Expense $ 42,459 $ 42,362 Reported EBITDA $ 632,885 $ 627,306 Acquisitions -- 6,520 Divestitures 469 (1,428) Foreign Exchange adjustments (10,429) -- ----------- ----------- Pro Forma EBITDA $ 622,925 $ 632,398
RADIO RECONCILIATION OF REPORTED BASIS TO PRO FORMA BASIS
(In $000s) Three Months Ended June 30 --------------------------- 2003 2002 --------- --------- Reported Revenue $ 970,565 $ 991,282 Acquisitions -- 5,606 Divestitures (337) (991) Foreign Exchange adjustments -- -- --------- --------- Pro Forma Revenue $ 970,228 $ 995,897 Reported Divisional Operating Expenses $ 536,888 $ 549,934 Acquisitions -- 4,968 Divestitures (806) (1,268) Foreign Exchange adjustments -- -- --------- --------- Pro Forma Divisional Operating Expenses $ 536,082 $ 553,634 Reported EBITDA $ 433,677 $ 441,348 Acquisitions -- 638 Divestitures 469 277 Foreign Exchange adjustments -- -- --------- --------- Pro Forma EBITDA $ 434,146 $ 442,263
7 OUTDOOR RECONCILIATION OF REPORTED BASIS TO PRO FORMA BASIS
(In $000s) Three Months Ended June 30 --------------------------- 2003 2002 --------- --------- Reported Revenue $ 569,174 $ 473,991 Acquisitions -- 28,309 Divestitures -- (1,895) Foreign Exchange adjustments (49,491) -- --------- --------- Pro Forma Revenue $ 519,683 $ 500,405 Reported Divisional Operating Expenses $ 414,334 $ 329,489 Acquisitions -- 22,931 Divestitures -- (1,880) Foreign Exchange adjustments (42,104) -- --------- --------- Pro Forma Divisional Operating Expenses $ 372,230 $ 350,540 Reported EBITDA $ 154,840 $ 144,502 Acquisitions -- 5,378 Divestitures -- (15) Foreign Exchange adjustments (7,387) -- --------- --------- Pro Forma EBITDA $ 147,453 $ 149,865
LIVE ENTERTAINMENT RECONCILIATION OF REPORTED BASIS TO PRO FORMA BASIS
(In $000s) Three Months Ended June 30 --------------------------- 2003 2002 --------- --------- Reported Revenue $ 675,920 $ 619,225 Acquisitions -- 6,928 Divestitures -- (2,463) Foreign Exchange adjustments (31,177) -- --------- --------- Pro Forma Revenue $ 644,743 $ 623,690 Reported Divisional Operating Expenses $ 619,280 $ 567,638 Acquisitions -- 6,250 Divestitures -- (1,529) Foreign Exchange adjustments (28,135) -- --------- --------- Pro Forma Divisional Operating Expenses $ 591,145 $ 572,359 Reported EBITDA $ 56,640 $ 51,587 Acquisitions -- 678 Divestitures -- (934) Foreign Exchange adjustments (3,042) -- --------- --------- Pro Forma EBITDA $ 53,598 $ 51,331
OTHER (INCLUDES THE TELEVISION, MEDIA REPRESENTATION AND SPORTS REPRESENTATION BUSINESSES) RECONCILIATION OF REPORTED BASIS TO PRO FORMA BASIS
(In $000s) Three Months Ended June 30 -------------------------- 2003 2002 --------- --------- Reported Revenue $ 139,305 $ 116,845 Acquisitions -- 20,368 Divestitures -- (756) Foreign Exchange adjustments -- -- --------- --------- Pro Forma Revenue $ 139,305 $ 136,457 Reported Divisional Operating Expenses $ 109,118 $ 87,773
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(In $000s) Three Months Ended June 30 -------------------------- 2003 2002 --------- --------- Acquisitions -- 17,383 Divestitures -- -- Foreign Exchange adjustments -- -- --------- --------- Pro Forma Divisional Operating Expenses $ 109,118 $ 105,156 Reported EBITDA $ 30,187 $ 29,072 Acquisitions -- 2,985 Divestitures -- (756) Foreign Exchange adjustments -- -- --------- --------- Pro Forma EBITDA $ 30,187 $ 31,301
ELIMINATIONS RECONCILIATION OF REPORTED BASIS TO PRO FORMA BASIS
(In $000s) Three Months Ended June 30 ------------------------- 2003 2002 -------- -------- Reported Revenue ($37,715) ($28,433) Acquisitions -- -- Divestitures -- -- Foreign Exchange adjustments -- -- -------- -------- Pro Forma Revenue ($37,715) ($28,433) Reported Divisional Operating Expenses ($37,715) ($28,433) Acquisitions -- -- Divestitures -- -- Foreign Exchange adjustments -- -- -------- -------- Pro Forma Divisional Operating Expenses ($37,715) ($28,433) Reported EBITDA -- -- Acquisitions -- -- Divestitures -- -- Foreign Exchange adjustments -- -- -------- -------- Pro Forma EBITDA -- --
ABOUT CLEAR CHANNEL WORLDWIDE Visit our website at http://www.clearchannel.com. Clear Channel Worldwide, headquartered in San Antonio, Texas, is a global leader in the out-of-home advertising and entertainment industries with radio and television stations, outdoor advertising displays, and live entertainment productions and venues throughout the United States and in 65 countries around the world. For further information contact: Investors - Randy Palmer, Senior Vice President of Investor Relations, (210) 832-3315 or Media - Lisa Dollinger, Senior Vice President of Corporate Communications, (210) 832-3474 or visit our web-site at http://www.clearchannel.com. THE NUMBERS CONTAINED WITHIN THIS RELEASE ARE UNAUDITED. CERTAIN STATEMENTS IN THIS RELEASE CONSTITUTE "FORWARD-LOOKING STATEMENTS" WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT 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 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 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 9 OTHER DEMOGRAPHICS; CHANGES IN THE LEVEL OF COMPETITION FOR ADVERTISING DOLLARS; FLUCTUATIONS IN OPERATING COSTS; TECHNOLOGICAL CHANGES AND INNOVATIONS; CHANGES IN LABOR CONDITIONS; CHANGES IN GOVERNMENTAL REGULATIONS AND POLICIES AND ACTIONS OF REGULATORY 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. 10 FINANCIAL HIGHLIGHTS CLEAR CHANNEL COMMUNICATIONS, INC. AND SUBSIDIARIES UNAUDITED (IN THOUSANDS OF DOLLARS, EXCEPT PER SHARE DATA)
THREE MONTHS ENDED JUNE 30, ------------------------------- % 2003 2002 CHANGE ----------- ----------- ------ REVENUE $ 2,317,249 $ 2,172,910 6.6% Divisional operating expenses 1,641,905 1,506,401 ----------- ----------- Operating cash flow 675,344 666,509 1.3% Corporate expenses 42,459 39,203 ----------- ----------- EBITDA AS ADJUSTED (1) 632,885 627,306 0.9% Non-cash compensation expense 1,779 1,445 Depreciation and amortization 161,880 146,261 Interest expense 95,311 108,350 Gain (loss) on marketable securities 2,581 5,917 Equity in earnings of nonconsolidated affiliates 6,713 7,500 Other income (expense) - net 39,142 15,394 ----------- ----------- Income before income taxes 422,351 400,061 Income tax (expense) benefit: Current (58,321) (212,351) Deferred (112,730) 50,326 ----------- ----------- NET INCOME $ 251,300 $ 238,036 =========== =========== Net income per share: BASIC $ 0.41 $ 0.40 =========== =========== DILUTED (2) $ 0.41 $ 0.39 =========== =========== Free Cash Flow (3) $ 443,534 $ 365,372 21.4% Weighted Average Shares Outstanding - Diluted 617,556 629,234
(1) Defined as operating cash flow less corporate expenses. (2) Diluted net income for the three months ended June 30, 2003 and 2002 is $251,300 and $243,896, respectively. (3) Defined as EBITDA as adjusted less interest expense, tax expense and non-revenue producing capital expenditures.