than 50%, ~~THL~~Bain Capital and ~~Bain~~THL will continue to be able to strongly influence or effectively control our decisions.

We may terminate our Exchange Act reporting, if permitted by applicable law

If at any time our Class A common stock is held by fewer than 300 holders of record, we will be permitted to cease to be a reporting company under the Exchange Act to the extent we are not otherwise required to continue to report pursuant to any contractual agreements, including with respect to any of our indebtedness. If we were to cease filing reports under the Exchange Act, the information now available to our stockholders in the annual, quarterly and other reports we currently file with the SEC would not be available to them as a matter of right.

Risks Related to Our Indebtedness

Our subsidiary, Clear Channel, may not be able to generate sufficient cash to service all of its indebtedness and may be forced to take other actions to satisfy its obligations under its indebtedness, which may not be successful

We have a ~~large~~substantial amount of ~~indebtedness~~

~~We currently use a significant portion~~indebtedness. At December 31, 2011, we had $20.2 billion of ~~our~~total indebtedness outstanding, including: (1) $11.5 billion aggregate principal amount outstanding under Clear Channel’s term loan credit facilities and delayed draw credit facilities, which obligations mature at various dates from 2014 through 2016; (2) $1.3 billion aggregate principal amount outstanding under Clear Channel’s revolving credit facility, which will be available through July 2014, at which time all outstanding principal amounts under the revolving credit facility will be due and payable; (3) $1.7 billion aggregate principal amount outstanding of Clear Channel’s priority guarantee notes, net of $44.6 million of unamortized discounts, which mature March 2021; (4) $31.0 million aggregate principal amount of other secured debt; (5) $796.3 million and $829.8 million outstanding of Clear Channel’s senior cash ~~flow~~pay notes and senior toggles notes, respectively, which mature August 2016; (6) $1.5 billion aggregate principal amount outstanding of Clear Channel’s senior notes, net of unamortized purchase accounting discounts of $469.8 million, which mature at various dates from ~~operations for debt service. Our exposure to floating rate indebtedness could make us vulnerable to an increase in interest rates or a downturn in the operating performance~~2012 through 2027; (7) $2.5 billion aggregate principal amount outstanding of ~~our businesses due to various factors including a decline in general economic conditions. Our debt~~subsidiary senior notes; and (8) other long-term obligations ~~could increase substantially because~~ of ~~acquisitions and other transactions that may be approved by our Board as well as the indebtedness of companies that we may acquire in the future.~~

~~Such a~~$19.9 million. This large amount of indebtedness could have negative consequences for us, including, without limitation:

requiring us to dedicate a substantial portion of our cash flow to the payment of principal and interest on indebtedness, thereby reducing cash available for other purposes, including to fund operations and capital expenditures, invest in new technology and pursue other business opportunities;

	•		dedicating a substantial portion of our cash flow to the payment of principal and interest on indebtedness, thereby reducing cash available for other purposes, including to fund operations and capital expenditures, invest in new technology and pursue other business opportunities;

	•		limiting our liquidity and operational flexibility and limiting our ability to obtain additional financing for working capital, capital expenditures, debt service requirements, acquisitions and general corporate or other purposes;

	•		~~limiting our ability to adjust to changing economic, business and competitive conditions;~~

	•		~~requiring us to defer planned capital expenditures, reduce discretionary spending, sell assets, restructure existing indebtedness or defer acquisitions or other strategic opportunities;~~

	•		~~limiting our ability to refinance any of our indebtedness or increasing the cost of any such financing in any downturn in our operating performance or decline in general economic conditions;~~

	•		~~making us more vulnerable to an increase in interest rates, a downturn in our operating performance or a decline in general economic conditions; and~~

	•		~~making us more susceptible to changes in credit ratings which could impact our ability to obtain financing in the future and increase the cost of such financing.~~

limiting our liquidity and operational flexibility and limiting our ability to obtain additional financing for working capital, capital expenditures, debt service requirements, acquisitions and general corporate or other purposes;

limiting our ability to adjust to changing economic, business and competitive conditions;

requiring us to defer planned capital expenditures, reduce discretionary spending, sell assets, restructure existing indebtedness or defer acquisitions or other strategic opportunities;

limiting our ability to refinance any of the indebtedness or increasing the cost of any such financing in any downturn in our operating performance or decline in general economic conditions;

making us more vulnerable to an increase in interest rates, a downturn in our operating performance or a decline in general economic or industry conditions; and

making us more susceptible to changes in credit ratings, which could impact our ability to obtain financing in the future and increase the cost of such financing.

If compliance with ~~our~~Clear Channel’s debt obligations materially hinders our ability to operate our business and adapt to changing industry conditions, we may lose market share, our revenue may decline and our operating results may suffer. The terms of ~~our~~Clear Channel’s credit facilities and other indebtedness allow us, under certain conditions, to incur further indebtedness, including secured indebtedness, which heightens the foregoing risks. ~~If we are unable~~

Clear Channel’s ability to ~~generate~~make scheduled payments on its debt obligations depends on its financial condition and operating performance, which is subject to prevailing economic and competitive conditions and to certain financial, business and other factors beyond its or our control. In addition, because Clear Channel derives a substantial portion of its operating income from its subsidiaries, Clear Channel’s ability to repay its debt depends upon the performance of its subsidiaries and their ability to dividend or distribute funds to Clear Channel. Clear Channel may not be able to maintain a level of cash flows sufficient ~~cash flow from operations in~~to permit it to pay the ~~future, which together with cash~~principal, premium, if any, and interest on ~~hand and availability under our senior secured credit facilities, is~~its indebtedness.

For the year ended December 31, 2011, Clear Channel’s earnings were not sufficient to cover fixed charges by $402.4 million and, for the year ended December 31, 2010, Clear Channel’s earnings were not sufficient to cover fixed charges by $617.5 million.

If Clear Channel’s cash flows and capital resources are insufficient to fund its debt service ~~our debt,~~obligations, we may ~~have~~be forced to reduce or delay capital expenditures, sell assets or operations, seek additional capital or restructure or refinance ~~all~~the indebtedness. We may not be able to take any of these actions, and these actions may not be successful or ~~a portion~~permit Clear Channel to meet the scheduled debt service obligations. Furthermore, these actions may not be permitted under the terms of existing or future debt agreements.

The ability to restructure or refinance Clear Channel’s debt will depend on the condition of the capital markets and our ~~indebtedness or to obtain additional financing. There can be no assurance that any~~financial condition at such time. Any refinancing of ~~this kind would be possible or that any additional financing~~the debt could be ~~obtained.~~

at higher interest rates and increase Clear Channel’s debt service obligations and may require us and Clear Channel to comply with more onerous covenants, which could further restrict our business operations. The terms of existing or future debt instruments may restrict us from adopting some of these alternatives. These alternative measures may not be successful and may not permit us or Clear Channel to meet scheduled debt service obligations. If we or Clear Channel cannot make scheduled payments on indebtedness, it will be in default under one or more of the debt agreements and, as a result we could be forced into bankruptcy or liquidation.

The documents governing ~~our~~Clear Channel’s indebtedness contain restrictions that limit our flexibility in operating our business

Clear Channel’s material financing agreements, including its credit agreements ~~bond~~and indentures, ~~and subsidiary senior notes,~~ contain various covenants ~~that limit our ability to engage in specified types of transactions. These covenants limit our ability to,~~restricting, among other things, our ability to:

make acquisitions or investments;

make loans or otherwise extend credit to others;

incur indebtedness or ~~guarantee additional indebtedness, incur~~issue shares or ~~permit liens,~~ guarantees;

create liens;

sell, lease, transfer or dispose of assets;

merge or consolidate with ~~or into, another company, sell assets, pay dividends~~other companies; and ~~other payments in respect~~

make a substantial change to the general nature of our ~~capital stock, including to redeem or repurchase our capital stock, prepay or amend certain junior indebtedness, make certain acquisitions and investments and enter into transactions with affiliates.~~business.

Our failure to comply with the covenants in Clear Channel’s material financing agreements could be an event of default and could accelerate the payment obligations and, in some cases, could affect other obligations with cross-default and cross-acceleration provisions

In addition, to covenants contained in Clear Channel’s material financing agreements, including the subsidiary senior notes, that impose restrictions on our business and operations, Clear Channel’s senior secured credit facilities include a maximum consolidated senior secured net debt to adjusted EBITDA limitation. Our ability to comply with this limitation may be affected by events beyond our control, including prevailing economic, financial and industry conditions. The breach of any covenants set forth in our financing agreements, including the subsidiary senior notes, would result in a default thereunder. An event of default would permit the lenders under a defaulted financing agreement to declare all indebtedness thereunder to be due and payable prior to maturity. Moreover, the lenders under the revolving credit facility under Clear Channel’s senior secured credit facilities, ~~would have the option~~Clear Channel is required to ~~terminate their commitments to make further extensions of revolving credit thereunder. If we are unable to repay~~comply with certain affirmative covenants and certain specified financial covenants and ratios. For instance, Clear Channel’s ~~obligations under any~~senior secured credit ~~facility,~~facilities require it to comply on a quarterly basis with a financial covenant limiting the ~~lenders could proceed against any assets that were pledged~~ratio of its consolidated secured debt, net of cash and cash equivalents, to ~~secure such facility (including certain deposit accounts). In addition, a default or acceleration~~its consolidated EBITDA (as defined under ~~any~~the terms of ~~Clear Channel’s~~

material financing agreements, including the subsidiary senior notes, could cause a default under other obligations that are subject to cross-default and cross-acceleration provisions. The threshold amount for a cross-default under the senior secured credit ~~facilities is $100 million dollars.~~

facilities) for the preceding four quarters.
The restrictions contained in Clear Channel’s credit agreements and indentures could affect our ability to operate our business and may limit our ability to react to market conditions or take advantage of potential business opportunities as they arise. For example, such restrictions could adversely affect our ability to finance our operations, make strategic acquisitions, investments or alliances, restructure our organization or finance our capital needs. Additionally, the ability to comply with these covenants and restrictions may be affected by events beyond Clear Channel’s or our control. These include prevailing economic, financial and industry conditions. If any of these covenants or restrictions are breached, Clear Channel could be in default under the agreements governing its indebtedness, and as a result we would be forced into bankruptcy or liquidation.

Cautionary Statement Concerning Forward-Looking Statements

The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements made by us or on our behalf. Except for the historical information, this report contains various forward-looking statements which represent our expectations or beliefs concerning future events, including, without limitation, our future operating and financial performance, our ability to comply with the covenants in the agreements governing our

indebtedness and the availability of capital ~~resources~~ and the terms thereof. Statements expressing expectations and projections with respect to future matters are forward-looking statements within the meaning of the Private Securities Litigation Reform ~~Act.~~Act of 1995. We caution that these forward-looking statements involve a number of risks and uncertainties and are subject to many variables which could impact our future performance. These statements are made on the basis of management’s views and assumptions, as of the time the statements are made, regarding future events and performance. There can be no assurance, however, that management’s expectations will necessarily come to pass. We do not intend, nor do we undertake any duty, to update any forward-looking statements.

A wide range of factors could materially affect future developments and performance, including:

the impact of our substantial indebtedness, including the effect of our leverage on our financial position and earnings;

	•		~~the impact of the substantial indebtedness incurred to finance the consummation of the merger;~~

	•		~~risks associated with the global economic crisis and its impact on capital markets and liquidity;~~

	•		~~the need to allocate significant amounts of our cash flow to make payments on our indebtedness, which in turn could reduce our financial flexibility and ability to fund other activities;~~

	•		the impact of the global economic downturn, which has adversely affected advertising revenues across our businesses and other general economic and political conditions in the United States and in other countries in which we currently do business, including those resulting from recessions, political events and acts or threats of terrorism or military conflicts;

	•		~~our restructuring program may not be entirely successful;~~

	•		~~the impact of the geopolitical environment;~~

	•		~~our ability to integrate the operations of recently acquired companies;~~

	•		~~shifts in population and other demographics;~~

	•		~~industry conditions, including competition;~~

	•		~~fluctuations in operating costs;~~

	•		~~technological changes and innovations;~~

	•		~~changes in labor conditions;~~

	•		~~fluctuations in exchange rates and currency values;~~

	•		~~capital expenditure requirements;~~

	•		~~the outcome of pending and future litigation settlements;~~

	•		~~legislative or regulatory requirements;~~

	•		~~changes in interest rates;~~

	•		~~the effect of leverage on our financial position and earnings;~~

	•		~~taxes;~~

	•		~~access to capital markets and borrowed indebtedness; and~~

	•		~~certain other factors set forth in our other filings with the Securities and Exchange Commission.~~

the need to allocate significant amounts of our cash flow to make payments on our indebtedness, which in turn could reduce our financial flexibility and ability to fund other activities;

risks associated with a global economic downturn and its impact on capital markets;

other general economic and political conditions in the United States and in other countries in which we currently do business, including those resulting from recessions, political events and acts or threats of terrorism or military conflicts;

industry conditions, including competition;

the level of expenditures on advertising;

legislative or regulatory requirements;

fluctuations in operating costs;

technological changes and innovations;

changes in labor conditions, including on-air talent, program hosts and management;

capital expenditure requirements;

risks of doing business in foreign countries;

fluctuations in exchange rates and currency values;

the outcome of pending and future litigation;

changes in interest rates;

taxes and tax disputes;

shifts in population and other demographics;

access to capital markets and borrowed indebtedness;

our ability to implement our business strategies;

the risk that we may not be able to integrate the operations of acquired businesses successfully;

the risk that our cost savings initiatives may not be entirely successful or that any cost savings achieved from those initiatives may not persist; and

certain other factors set forth in our other filings with the Securities and Exchange Commission.

This list of factors that may affect future performance and the accuracy of forward-looking statements is illustrative and is not intended to be exhaustive. Accordingly, all forward-looking statements should be evaluated with the understanding of their inherent uncertainty.

ITEM 1B. ~~Unresolved Staff Comments~~UNRESOLVED STAFF COMMENTS

None.

ITEM 2. ~~Properties~~PROPERTIES

Corporate

Our corporate headquarters isand executive offices are located in San Antonio, Texas, where we own an approximately 55,000 square foot executive office building and an approximately 123,000 square foot data and administrative service center.

In addition, certain of our executive and other operations are located in New York, New York.
CCME
~~Radio Broadcasting~~
Our ~~radio~~CCME executive operations are located in our corporate headquarters in San Antonio, ~~Texas.~~Texas and in New York, New York. The types of properties required to support each of our radio stations include offices, studios, transmitter sites and antenna sites. We either own or lease our transmitter and antenna sites. These leases generally have expiration dates that range from five to 15 years. A radio station’s studios are generally housed with its offices in downtown or business districts. A radio station’s transmitter sites and antenna sites are generally located in a manner that provides maximum market coverage.

Americas Outdoor and International Outdoor Advertising
The headquarters of our Americas ~~Outdoor Advertising~~outdoor operations is in Phoenix, Arizona, and the headquarters of our International ~~Outdoor Advertising~~outdoor operations is in London, England. The types of properties required to support each of our outdoor advertising branches include offices, production facilities and structure sites. An outdoor branch and production facility is generally located in an industrial or warehouse district.
With respect to each of the Americas outdoor and International ~~Outdoor Advertising~~outdoor segments, we primarily lease our outdoor display sites and own or have acquired permanent easements for relatively few parcels of real property that serve as the sites for our outdoor displays. Our leases generally range from month-to-month to year-to-year and can be for terms of 10 years or longer, and many provide for renewal options.
There is no significant concentration of displays under any one lease or subject to negotiation with any one landlord. We believe that an important part of our management activity is to negotiate suitable lease renewals and extensions.

Consolidated
The studios and offices of our radio stations and outdoor advertising branches are located in leased or owned facilities. These leases generally have expiration dates that range from one to 40 years. We do not anticipate any difficulties in renewing those leases that expire within the next several years or in leasing other space, if required. We own substantially all of the equipment used in our ~~radio broadcasting~~CCME and outdoor advertising businesses.
     ~~As noted above, as of December 31, 2009, we owned 894 radio stations~~ For additional information regarding our CCME and ~~owned or leased approximately 834,000~~ outdoor ~~advertising display faces in various markets throughout the world. Therefore, no one property is material to our overall operations. We believe that our~~ properties, ~~are in good condition and suitable for our operations.~~
see “Item 1. Business.”
ITEM 3. ~~Legal Proceedings~~LEGAL PROCEEDINGS
We currently are involved in certain legal proceedings arising in the ordinary course of business and, as required, have accrued an estimate of the probable costs for the resolution of those claims for which the occurrence of loss is probable and the amount can be reasonably estimated. These estimates have been developed in consultation with counsel and are based upon an analysis of potential results, assuming a ~~co-defendant~~combination of litigation and settlement strategies. It is possible, however, that future results of operations for any particular period could be materially affected by changes in our assumptions or the effectiveness of our strategies related to these proceedings. Additionally, due to the inherent uncertainty of litigation, there can be no assurance that the resolution of any particular claim or proceeding would not have a material adverse effect on our financial condition or results of operations.
Certain of our subsidiaries are co-defendants with Live Nation (which was spun off as an independent company in December 2005) in 22 putative class actions filed ~~beginning in May 2006~~ by different named plaintiffs in various district courts throughout the ~~country.~~country beginning in May 2006. These actions generally allege that the defendants monopolized or attempted to monopolize the market for “live rock concerts” in violation of Section 2 of the Sherman Act. Plaintiffs claim that they paid higher ticket prices for defendants’ “rock concerts” as a result of defendants’ conduct. They seek damages in an undetermined amount. On April 17, 2006, the Judicial Panel for Multidistrict Litigation centralized these class action proceedings in the Central District of California. ~~On March 2, 2007, plaintiffs filed motions for class certification~~The district court has certified classes in five “template” cases involving five regional ~~markets,~~markets: Los Angeles, Boston, New York City, Chicago and Denver. ~~Defendants opposed that motion~~Discovery has closed, and on October 22, 2007, the district court issued its decision certifying the class for each regional market. On February 20, 2008, defendants filed a Motion for Reconsideration of the Class Certification Order, which is still pending. Plaintiffs filed a Motion for Approval of the Class Notice Plan on September 25, 2009, but the Court denied the Motion as premature and ordered the entire case stayed until the 9th Circuit issues its en banc opinion in~~Dukes v. Wal-Mart, 509 F.3d 1168 (9th Cir. 2007), a case that may change the standard for granting class certification in the 9th Circuit.~~ dispositive motions have been filed.
In the Master Separation and Distribution Agreement between usone of our subsidiaries and Live Nation that was entered into in connection with ~~our~~the spin-off of Live Nation in December 2005, Live Nation agreed, among other things, to assume responsibility for legal actions existing at the time of, or initiated after, the spin-off in which we are a defendant if such actions relate in any material respect to the business of Live Nation. Pursuant to the Agreement, Live Nation also agreed to indemnify us with respect to all liabilities assumed by Live Nation, including those pertaining to the claims discussed above.
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On or about July 12, 2006 and April 12, 2007, two of our operating businesses (L&C Outdoor Ltda. (“L&C”) and Publicidad Klimes São Paulo Ltda. (“Klimes”), respectively) in the São Paulo, Brazil market received notices of infraction from the state taxing authority, seeking to impose a value added tax (“VAT”) on such businesses, retroactively for the period from December 31, 2001 through January 31, 2006. The taxing authority contends that these businesses fall within the definition of “communication services” and as such are subject to the VAT.
~~Executive Officers~~L&C and Klimes have filed separate petitions to challenge the imposition of this tax. L&C’s challenge in the administrative courts was unsuccessful at the first level, but successful at the second administrative level. The state taxing authority filed an appeal to the third and final administrative level, which required consideration by a full panel of 16 administrative law judges. On September 27, 2010, L&C received an unfavorable ruling at this final administrative level, which concluded that the VAT applied. On December 15, 2011, a Special Chamber of the ~~Registrant~~administrative court considered the reasonableness of the amount of the penalty assessed against L&C and significantly reduced the penalty. With the reduction, the amounts allegedly owed by L&C are approximately $8.6 million in taxes, approximately $4.3 million in penalties and approximately $18.4 million in interest (as of December 31, 2011 at an exchange rate of 0.534). On January 27, 2012, L&C filed a writ of mandamus in the 8th lower public treasury court in São Paulo, State of São Paulo, appealing the administrative court’s decision that the VAT applies. On that same day, L&C filed a motion for an injunction barring the taxing authority from collecting the tax, penalty and interest while the appeal is pending. The court denied the motion on January 30, 2012. L&C filed a motion for reconsideration, and in early February 2012, the court granted that motion and issued an injunction.
Klimes’ challenge was unsuccessful at the first level of the administrative courts, and denied at the second administrative level on or about September 24, 2009. On January 5, 2011, the administrative law judges at the third administrative level published a ruling that the VAT applies but significantly reduced the penalty assessed by the taxing authority. With the penalty reduction, the amounts allegedly owed by Klimes are approximately $9.7 million in taxes, approximately $4.8 million in penalties and approximately $20.1 million in interest (as of December 31, 2011 at an exchange rate of 0.534). In late February 2011, Klimes filed a writ of mandamus in the 13th lower public treasury court in São Paulo, State of São Paulo, appealing the administrative court’s decision that the VAT applies. On that same day, Klimes filed a motion for an injunction barring the taxing authority from collecting the tax, penalty and interest while the appeal is pending. The court denied the motion in early April 2011. Klimes filed a motion for reconsideration with the court and also appealed that ruling to the São Paulo State Higher Court, which affirmed in late April 2011. On June 20, 2011, the 13th lower public treasury court in São Paulo reconsidered its prior ruling and granted Klimes an injunction suspending any collection effort by the taxing authority until a decision on the merits is obtained at the first judicial level.
On August 8, 2011, Brazil’s National Council of Fiscal Policy (CONFAZ) published a rule authorizing a general amnesty to sixteen states, including the State of São Paulo, to reduce the principal amount of VAT allegedly owed for communications services and reduce or waive related interest and penalties. The State of São Paulo ratified the amnesty in late August 2011. However, in late 2011, the State of São Paulo decided not to pursue the general amnesty, but it has indicated that it would be willing to consider a special amnesty for the out-of-home industry. Klimes and L&C are actively exploring this opportunity but do not know whether the State ultimately will offer a special amnesty or what the terms of any special amnesty might be. Accordingly, the businesses continue to vigorously pursue their appeals in the lower public treasury court.
At December 31, 2011, the range of reasonably possible loss is from zero to approximately $31.2 million in the L&C matter and is from zero to approximately $34.6 million in the Klimes matter. The maximum loss that could ultimately be paid depends on the timing of the final resolution at the judicial level and applicable future interest rates. Based on our review of the law, the outcome of similar cases at the judicial level and the advice of counsel, we have not accrued any costs related to these claims and believe the occurrence of loss is not probable.
ITEM 4. MINE SAFETY DISCLOSURES
Not Applicable
EXECUTIVE OFFICERS OF THE REGISTRANT
The following information with respect to our executive officers is presented as of ~~March 10, 2010:~~
February 15, 2012:
Name
     Age
Position
Robert W. Pittman
~~Name~~58    ~~Age~~ ~~Position~~
~~Mark P. Mays~~ 46 ~~Chairman of the Board, President,~~ Chief Executive Officer and Director
Thomas W. Casey    4749    Executive Vice President and Chief Financial Officer
C. William Eccleshare 56    Chief ~~Financial~~Executive Officer—Outdoor
Scott D. Hamilton 42 Senior Vice President, Chief Accounting Officer and Assistant Secretary
John E. Hogan 55 Chairman and Chief Executive Officer—Clear Channel Media and Entertainment
Robert H. Walls, Jr.    49 51    Executive Vice President, General Counsel and Secretary
~~Herbert W. Hill, Jr.~~ 51 ~~Senior Vice President/Chief Accounting Officer and Assistant Secretary~~
~~John Hogan~~ 53 ~~Senior Vice President — CC Media Holdings, Inc.~~
The officers named above serve until the next Board of Directors meeting immediately following the Annual Meeting of ~~Shareholders.~~Stockholders or until their respective successors are chosen and qualified, in each case unless the officer sooner dies, resigns, is removed or becomes disqualified. We expect to retain the individuals named above as our executive officers at such next Board of Directors ~~meeting.~~
     ~~Mr. M. Mays~~ meeting immediately following the Annual Meeting of Stockholders.
Robert W. Pittmanwas appointed as our Chief Executive Officer and a director, as Chief Executive Officer and a director of ~~the Company~~Clear Channel and as Executive Chairman and a director of Clear Channel Outdoor Holdings, Inc. on October 2, 2011. Prior thereto, Mr. Pittman served as Chairman of Media and Entertainment Platforms for us and Clear Channel since November 2010. He has been a member of, and an investor in, Pilot Group Manager, LLC, Pilot Group GP, LLC, and Pilot Group LP, a private equity partnership, since April 2003, and Pilot Group II GP, LLC, and Pilot Group II LP, a private equity partnership, since 2006. Mr. Pittman was formerly Chief Operating Officer of AOL Time Warner, Inc. from May 2002 to July ~~30, 2008. Mr. M. Mays was Clear Channel’s~~2002. He also served as Co-Chief Operating Officer of AOL Time Warner, Inc. from January 2001 to May 2002, and earlier, as President and Chief Operating Officer of America Online, Inc. from February ~~1997 until his appointment~~1998 to January 2001. Mr. Pittman serves on the boards of numerous charitable organizations, including the Alliance for Lupus Research, the New York City Ballet, Public Theater, the Rock and Roll Hall of Fame Foundation and the Robin Hood Foundation, where he has served as past Chairman.
Thomas W. Caseywas appointed as our Executive Vice President and Chief Financial Officer, and as Executive ~~Officer in October 2004. He relinquished his duties as~~Vice President ~~in February 2006 until he was reappointed President in January 2010. He has been one~~and Chief Financial Officer of Clear ~~Channel’s directors since May 1998. Mr. M. Mays is the son of L. Lowry Mays, our Chairman Emeritus~~Channel and ~~the brother of Randall T. Mays, our Vice Chairman.~~
     ~~Mr. Casey was appointed Chief Financial Officer~~Clear Channel Outdoor Holdings, Inc., effective as of January 4, 2010. ~~Previously,~~On March 31, 2011, Mr. Casey was appointed to serve in the newly-created Office of the Chief Executive Officer of CC Media Holdings, Inc., Clear Channel and Clear Channel Outdoor Holdings, Inc., in addition to his existing offices. Mr. Casey served in the Office of the Chief Executive Officer of CC Media Holdings, Inc. and Clear Channel until October 2, 2011, and served in the Office of the Chief Executive Officer of Clear Channel Outdoor Holdings, Inc. until January 24, 2012. Prior to January 4, 2010, Mr. Casey served as Executive Vice President and Chief Financial Officer of Washington Mutual, Inc. from November 2002 until October 2008. Washington Mutual, Inc. filed for protection under Chapter 11 of the United States Bankruptcy Code in September 2008. Prior ~~thereto,~~to November 2002, Mr. Casey served as Vice President of General Electric Company and Senior Vice President and Chief Financial Officer of GE Financial Assurance since 1999.
C. William Eccleshare was appointed as Chief Executive Officer – Outdoor of CC Media Holdings, Inc. and Clear Channel and as Chief Executive Officer of Clear Channel Outdoor Holdings, Inc. on January 24, 2012. Prior thereto, he served as Chief Executive Officer—Clear Channel Outdoor—International of CC Media Holdings, Inc. and Clear Channel since February 17, 2011 and served as Chief Executive Officer—International of Clear Channel Outdoor Holdings, Inc. since September 1, 2009. Previously, he was Chairman and CEO of BBDO EMEA from 2005 to 2009. Prior thereto, he was Chairman and CEO of Young & Rubicam EMEA since 2002.
Scott D. Hamilton was appointed as our Senior Vice President, Chief Accounting Officer and Assistant Secretary, and as Senior Vice President, Chief Accounting Officer and Assistant Secretary of Clear Channel and Clear Channel Outdoor Holdings, Inc., on April 26, 2010. Previously, Mr. ~~Walls~~ Hamilton served as Controller and Chief Accounting Officer of Avaya Inc. (“Avaya”), a multinational telecommunications company, from October 2008 to April 2010. Prior thereto, Mr. Hamilton served in various accounting and finance positions at Avaya, beginning in October 2004. Prior thereto, Mr. Hamilton was employed by PricewaterhouseCoopers from September 1992 until September 2004.
John E. Hoganwas appointed as Chairman and Chief Executive Officer – Clear Channel Media and Entertainment of CC Media Holdings, Inc. and Clear Channel on February 16, 2012. Previously, he served as President and Chief Executive Officer—Clear Channel Media and Entertainment (formerly known as Clear Channel Radio) of CC Media Holdings, Inc. and Clear Channel since July 30, 2008. Prior thereto, he served as the Senior Vice President and President and CEO of Radio for Clear Channel since August 2002.
Robert H. Walls, Jr.was appointed as our Executive Vice President, General Counsel and Secretary, and as Executive Vice President, General Counsel and Secretary of Clear Channel and Clear Channel Outdoor Holdings, Inc., on January 1, 2010. ~~Previously,~~On March 31, 2011, Mr. Walls was appointed to serve in the newly-created Office of the Chief Executive Officer of CC Media Holdings, Inc., Clear Channel and Clear Channel Outdoor Holdings, Inc., in addition to his existing offices. Mr. Walls served ~~as Managing Director~~in the Office of the Chief Executive Officer of CC Media Holdings, Inc. and Clear Channel until October 2, 2011, and served in the Office of the Chief Executive Officer of Clear Channel Outdoor Holdings, Inc. until January 24, 2012. Prior to January 1, 2010, Mr. Walls was a founding partner of Post Oak Energy Capital, LP and served as Managing Director through December 31, ~~2009.~~2009, and remains an advisor to and a partner of Post Oak Energy Capital, LP. Prior thereto, Mr. Walls was Executive Vice President and General Counsel atof Enron Corp., and a member of its Chief Executive Office since 2002. Prior thereto, he was Executive Vice President and General Counsel atof Enron Global Assets and Services, Inc. and Deputy General Counsel atof Enron Corp.
     Mr. Hill was appointed Senior Vice President/Chief Accounting Officer and Assistant Secretary on July 30, 2008. Mr. Hill was appointed Senior Vice President and Chief Accounting Officer of Clear Channel in February 1997. Mr. Hill’s service as Senior Vice President, Chief Accounting Officer and Assistant Secretary of the Company will end effective March 31, 2010. Following March 31, 2010, Mr. Hill has agreed to continue with the Company as Director of Special Accounting and Information Systems Operations for an additional year.
     Mr. Hogan was appointed a Senior Vice President of the Company on July 30, 2008. He was appointed President/Chief Executive Officer — Clear Channel Broadcasting, Inc., our indirect subsidiary, in August 2002. Prior thereto Mr. Hogan served as Chief Operating Officer of Clear Channel Broadcasting, Inc. from June 2002 and Senior Vice President of Clear Channel Broadcasting, Inc. for the balance of the relevant period.
27
PART II
~~ITEM 5.~~ ~~Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities~~
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Market Information
Our Class A common shares are quoted for trading on the ~~OTC~~Over-The-Counter (“OTC”) Bulletin Board under the symbol “CCMO”. There were ~~385~~343 shareholders of record as of ~~March 10, 2010.~~January 31, 2012. This figure does not include an estimate of the indeterminate number of beneficial holders whose shares may be held of record by brokerage firms and clearing agencies. The following quotations obtained from the OTC Bulletin Board reflect the high and low bid prices for our Class A common stock based on inter-dealer prices, without retail mark-up, mark-down or commission and may not represent actual transactions.

Common Stock Market Price
High Low
2009

First Quarter. $ 2.45 $ 0.51
Second Quarter 2.45 0.65
Third Quarter. 1.75 0.75
Fourth Quarter 4.00 1.11

Common Stock Market Price
High Low
2008

Third Quarter $ 18.95 $ 7.75
Fourth Quarter 13.25 1.15

   Class A
Common Stock
Market Price          Class A
Common Stock
Market Price

High

Low

High

Low

2011
            2010
First Quarter
   $ 9.00       $ 7.25
First Quarter
   $ 4.95       $ 2.60
Second Quarter
   9.83       6.00
Second Quarter
   16.00       4.20
Third Quarter
   8.50       5.00
Third Quarter
   8.00       5.00
Fourth Quarter
   6.50       4.00
Fourth Quarter
   11.00       6.00
There is no established public trading market for our Class B and Class C common stock. There were 555,556 Class B common shares and 58,967,502 Class C common shares outstanding on ~~March 10, 2010.~~January 31, 2012. All of our outstanding shares of Class B common stock are held by Clear Channel Capital IV, LLC and all of our outstanding shares of Class C common stock are held by Clear Channel Capital V, L.P.

Dividend Policy
     ~~The Company~~
We currently ~~does~~do not intend to pay regular quarterly cash dividends on the shares of ~~its~~our common stock. ~~The Company has~~We have not declared any dividend on ~~its~~our common stock since ~~its~~our incorporation. We are a holding company with no independent operations and no significant assets other than the stock of our subsidiaries. We, therefore, are dependent on the receipt of dividends or other distributions from our subsidiaries to pay dividends. In addition, Clear Channel’s debt financing arrangements include restrictions on its ability to pay dividends, which in turn affects ~~the Company’s~~our ability to pay dividends.
~~Equity Compensation Plan~~
     ~~The following table summarizes information as~~ See “Management’s Discussion and Analysis of ~~December 31, 2009, relating~~Financial Condition and Results of Operations- Liquidity and Capital Resources- Sources of Capital” and Note 5 to the ~~Company’s equity compensation plan pursuant to which grants of options, restricted stock or other rights to acquire shares may be granted from time to time.~~

Number of
securities
remaining available
Number of for future issuance
securities to be under equity
issued upon compensation plans
exercise price of Weighted-average (excluding
outstanding exercise price of securities
options, warrants outstanding reflected in column
and rights warrants and rights (a))
Plan category (a) (b) (c)
Equity compensation plans approved by security holders 6,791,922 $ 31.29 5,307,985
Equity compensation plans not approved by security holders (1) — — —
Total (2) 6,791,922 $ 31.29 5,307,985
~~(1)~~ ~~Represents the Clear Channel 2008 Executive Incentive Plan.~~
~~(2)~~ Does not include option to purchase an aggregate of 745,621 shares, at a weighted average exercise price of $5.42, granted under plans assumed in connection with acquisition transactions. No additional options may be granted under these assumed plans.
Consolidated Financial Statements.
Sales of Unregistered Securities
We did not sell any equity securities during ~~2009~~2011 that were not registered under the Securities Act of 1933.

Purchases of Equity Securities
     ~~We did not purchase any~~
The following table sets forth the purchases made during the quarter ended December 31, 2011 by us or on our behalf or by or on behalf of an affiliated purchaser of shares of our Class A common stock registered pursuant to Section 12 of the Exchange Act:
Period
Total Number
of Shares
Purchased Average
Price Paid
per Share Total Number of
Shares Purchased as
Part of Publicly
Announced Plans or
Programs Maximum Number
(or Approximate
Dollar Value) of
Shares that May Yet
Be Purchased Under
the Plans or Programs
October 1 through October 31 —   —   —   (1)
November 1 through November 30 —   —   —   (1)
December 1 through December 31 —   —   —   (1)
Total —   —   —   $    83,627,310 (1)
(1)
On August 9, 2010, Clear Channel announced that its board of directors approved a stock purchase program under which Clear Channel or its subsidiaries may purchase up to an aggregate of $100 million of our Class A common stock and/or the Class A common stock of Clear Channel Outdoor Holdings, Inc., an
indirect subsidiary of Clear Channel. No shares of our Class A common stock were purchased under the stock purchase program during the ~~fourth quarter~~three months ended December 31, 2011. However, during the three months ended December 31, 2011, a subsidiary of ~~2009.~~
28Clear Channel purchased $5,749,343 of the Class A common stock of Clear Channel Outdoor Holdings, Inc. (555,721 shares) through open market purchases, which, together with previous purchases under the program, leaves an aggregate of $83,627,310 available under the stock purchase program to purchase our Class A common stock and/or the Class A common stock of Clear Channel Outdoor Holdings, Inc. The stock purchase program does not have a fixed expiration date and may be modified, suspended or terminated at any time at Clear Channel’s discretion.
ITEM 6. ~~Selected Financial Data~~SELECTED FINANCIAL DATA
The following tables set forth our summary historical consolidated financial and other data as of the dates and for the periods indicated. The summary historical financial data are derived from our audited consolidated financial statements. Certain prior period amounts have been reclassified to conform to the 2011 presentation. Historical results are not necessarily indicative of the results to be expected for future periods. Acquisitions and dispositions impact the comparability of the historical consolidated financial data reflected in this schedule of Selected Financial Data.
     ~~We adopted Statement of Financial Accounting Standards No. 160,~~~~Noncontrolling Interests in Consolidated Financial Statements — an amendment of ARB No. 51,~~codified in ASC 810-10-45 on January 1, 2009. Adoption of this standard requires retrospective application in the financial statements of earlier periods on January 1, 2009. In connection with our subsidiary’s offering of $500.0 million aggregate principal amount of Series A Senior Notes and $2.0 billion aggregate principal amount of Series B Senior Notes, we filed a Form 8-K on December 11, 2009 to retrospectively recast the historical financial statements and certain disclosures included in our Annual Report on Form 10-K for the year ended December 31, 2008 for the adoption of ASC 810-10-45.
The summary historical consolidated financial and other data should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and the related notes thereto ~~appearing elsewhere in~~located within Item 8 of Part II of this Annual Report on Form 10-K. The statement of operations for the year ended December 31, 2008 is comprised of two periods: post-merger and pre-merger. We applied purchase accounting adjustments to the opening balance sheet on July 31, 2008 as the merger occurred at the close of business on July 30, 2008. The merger resulted in a new basis of accounting beginning on July 31, 2008. ~~For additional discussion regarding the pre-merger and post-merger periods, please refer to the consolidated financial statements in Item 8 of this Annual Report on Form 10-K.~~

For the Years Ended December 31,
2009 2008 2007⁽¹⁾ 2006⁽²⁾ 2005
(In thousands) Post-Merger Combined Pre-Merger Pre-Merger Pre-Merger
Results of Operations Information:

Revenue $ 5,551,909 $ 6,688,683 $ 6,921,202 $ 6,567,790 $ 6,126,553
Operating expenses:
Direct operating expenses (excludes depreciation and amortization) 2,583,263 2,904,444 2,733,004 2,532,444 2,351,614
Selling, general and administrative expenses (excludes depreciation and amortization) 1,466,593 1,829,246 1,761,939 1,708,957 1,651,195
Depreciation and amortization 765,474 696,830 566,627 600,294 593,477
Corporate expenses (excludes depreciation and amortization) 253,964 227,945 181,504 196,319 167,088
Merger expenses — 155,769 6,762 7,633 —
Impairment charges⁽³⁾
4,118,924 5,268,858 — — —
Other operating income (expense) — net (50,837 ) 28,032 14,113 71,571 49,656

Operating income (loss) (3,687,146 ) (4,366,377 ) 1,685,479 1,593,714 1,412,835
Interest expense 1,500,866 928,978 451,870 484,063 443,442
Gain (loss) on marketable securities (13,371 ) (82,290 ) 6,742 2,306 (702 )
Equity in earnings (loss) of nonconsolidated affiliates (20,689 ) 100,019 35,176 37,845 38,338
Other income (expense) — net 679,716 126,393 5,326 (8,593 ) 11,016

Income (loss) before income taxes and discontinued operations (4,542,356 ) (5,151,233 ) 1,280,853 1,141,209 1,018,045
Income tax benefit (expense) 493,320 524,040 (441,148 ) (470,443 ) (403,047 )

Income (loss) before discontinued operations (4,049,036 ) (4,627,193 ) 839,705 670,766 614,998
Income from discontinued operations, net⁽⁴⁾
— 638,391 145,833 52,678 338,511

Consolidated net income (loss) (4,049,036 ) (3,988,802 ) $ 985,538 $ 723,444 $ 953,509
Amount attributable to noncontrolling interest (14,950 ) 16,671 47,031 31,927 17,847

Net income (loss) attributable to the Company $ (4,034,086 ) $ (4,005,473 ) $ 938,507 $ 691,517 $ 935,662

29

(In thousands)    For the Years Ended December 31,
   2011
Post-Merger 2010
Post-Merger 2009
Post-Merger 2008
Combined 2007⁽¹⁾
Pre-Merger
Results of Operations Data:

Revenue
   $ 6,161,352    $ 5,865,685    $ 5,551,909    $ 6,688,683    $ 6,921,202
Operating expenses:

Direct operating expenses (excludes depreciation and amortization)
   2,504,036    2,381,647    2,529,454    2,836,082    2,672,852
Selling, general and administrative expenses (excludes depreciation and amortization)
   1,617,258    1,570,212    1,520,402    1,897,608    1,822,091
Corporate expenses (excludes depreciation and amortization)
   227,096    284,042    253,964    227,945    181,504
Depreciation and amortization
   763,306    732,869    765,474    696,830    566,627
Merger expenses
   —    —    —    155,769    6,762
Impairment charges⁽²⁾
   7,614    15,364    4,118,924    5,268,858    —
Other operating income (expense) – net
   12,682    (16,710 ) (50,837 ) 28,032    14,113


Operating income (loss)
   1,054,724    864,841    (3,687,146 ) (4,366,377 ) 1,685,479
Interest expense
   1,466,246    1,533,341    1,500,866    928,978    451,870
Gain (loss) on marketable securities
   (4,827 ) (6,490 ) (13,371 ) (82,290 ) 6,742
Equity in earnings (loss) of nonconsolidated affiliates
   26,958    5,702    (20,689 ) 100,019    35,176
Other income (expense) – net
   (4,616 ) 46,455    679,716    126,393    5,326


Income (loss) before income taxes and discontinued operations
   (394,007 ) (622,833 ) (4,542,356 ) (5,151,233 ) 1,280,853
Income tax benefit (expense)
   125,978    159,980    493,320    524,040    (441,148 )


Income (loss) before discontinued operations
   (268,029 ) (462,853 ) (4,049,036 ) (4,627,193 ) 839,705
Income from discontinued operations, net⁽³⁾
   —      —      —      638,391    145,833


Consolidated net income (loss)
   (268,029 ) (462,853 ) (4,049,036 ) (3,988,802 ) 985,538
Less amount attributable to noncontrolling interest
   34,065    16,236    (14,950 ) 16,671    47,031


Net income (loss) attributable to the Company
   $ (302,094 ) $ (479,089 ) $ (4,034,086 ) $ (4,005,473 ) $ 938,507


$ 000,000 $ 000,000 $ 000,000 $ 000,000 $ 000,000 $ 000,000
Post-Merger Pre-Merger
For the Years Ended
December 31, For the Five
Months
Ended
December
31, For the
Seven
Months
Ended
July 30, For the Year
Ended
December
31,
2011 2010 2009 2008 2008 2007⁽¹⁾
Net income (loss) per common share:

Basic:

Income (loss) attributable to the Company before discontinued operations
$ (3.70 ) $ (5.94 ) $ (49.71 ) $ (62.04 ) $ 0.80    $ 1.59
Discontinued operations
—    —    —    (0.02 ) 1.29    0.30

Net income (loss) attributable to the Company
$ (3.70 ) $ (5.94 ) $ (49.71 ) $ (62.06 ) $ 2.09    $ 1.89

Diluted:

Income (loss) attributable to the Company before discontinued operations
$ (3.70 ) $ (5.94 ) $ (49.71 ) $ (62.04 ) $ 0.80    $ 1.59
Discontinued operations
—    —    —    (0.02 ) 1.29    0.29

Net income (loss) attributable to the Company
$ (3.70 ) $ (5.94 ) $ (49.71 ) $ (62.06 ) $ 2.09    $ 1.88

Dividends declared per share
$ —    $ —    $ —    $ —    $ —    $ 0.75
(In thousands)    As of December 31,
Balance Sheet Data:    2011
Post-Merger 2010
Post-Merger 2009
Post-Merger 2008
Post-Merger 2007⁽¹⁾
Pre-Merger
Current assets
   $ 2,985,285    $ 3,603,173    $ 3,658,845    $ 2,066,555    $ 2,294,583
Property, plant and equipment – net, including discontinued operations
   3,063,327    3,145,554    3,332,393    3,548,159    3,215,088
Total assets
   16,542,039    17,460,382    18,047,101    21,125,463    18,805,528
Current liabilities
   1,428,962    2,098,579    1,544,136    1,845,946    2,813,277
Long-term debt, net of current maturities
   19,938,531    19,739,617    20,303,126    18,940,697    5,214,988
Shareholders’ equity (deficit)
   (7,471,941 ) (7,204,686 ) (6,844,738 ) (2,916,231 ) 9,233,851

Post-Merger Pre-Merger
For the Five For the Seven
Year Ended Months Ended Months Ended For the Years
December 31, December 31, July 30, Ended December 31,
2009 2008 2008 2007⁽¹⁾ 2006⁽²⁾ 2005
Net income (loss) per common share:
Basic:
Income (loss) attributable to the Company before discontinued operations $ (49.71 ) $ (62.04 ) $ .80 $ 1.59 $ 1.27 $ 1.09
Discontinued operations — (.02 ) 1.29 .30 .11 .62

Net income (loss) attributable to the Company $ (49.71 ) $ (62.06 ) $ 2.09 $ 1.89 $ 1.38 $ 1.71

Diluted:
Income (loss) attributable to the Company before discontinued operations $ (49.71 ) $ (62.04 ) $ .80 $ 1.59 $ 1.27 $ 1.09
Discontinued operations — (.02 ) 1.29 .29 .11 .62

Net income (loss) attributable to the Company $ (49.71 ) $ (62.06 ) $ 2.09 $ 1.88 $ 1.38 $ 1.71

Dividends declared per share — $ — $ — $ .75 $ .75 $ .69

As of December 31,
2009 2008 2007⁽¹⁾ 2006⁽²⁾ 2005
(In thousands) Post-Merger Post-Merger Pre-Merger Pre-Merger Pre-Merger
Balance Sheet Data:

Current assets $ 3,658,845 $ 2,066,555 $ 2,294,583 $ 2,205,730 $ 2,398,294
Property, plant and equipment — net, including discontinued operations⁽⁵⁾
3,332,393 3,548,159 3,215,088 3,236,210 3,255,649
Total assets 18,047,101 21,125,463 18,805,528 18,886,455 18,718,571
Current liabilities 1,544,136 1,845,946 2,813,277 1,663,846 2,107,313
Long-term debt, net of current maturities 20,303,126 18,940,697 5,214,988 7,326,700 6,155,363
Shareholders’ equity (deficit) (6,844,738 ) (2,916,231 ) 9,233,851 8,391,733 9,116,824
(1) Effective January 1, 2007, ~~the Company~~we adopted FASB Interpretation No. 48,Accounting for Uncertainty in Income Taxes, codified in ASC 740-10. In accordance with the provisions of ASC 740-10, the effects of adoption were accounted for as a cumulative-effect adjustment recorded to the balance of retained earnings on the date of adoption. The adoption of ASC 740-10 resulted in a decrease of $0.2 million to the January 1, 2007 balance of “Retained deficit”, an increase of $101.7 million in “Other long term-liabilities” for unrecognized tax benefits and a decrease of $123.0 million in “Deferred income taxes”.

(2) ~~Effective January 1, 2006, the Company adopted FASB Statement No. 123(R),~~~~Share-Based Payment,~~~~codified in ASC 718-10. In accordance with the provisions~~We recorded non-cash impairment charges of ~~ASC 718-10, the Company elected to adopt the standard using the modified prospective method.~~
~~(3)~~ $7.6 million and $15.4 million during 2011 and 2010, respectively. We also recorded non-cash impairment charges of $4.1 billion in 2009 and $5.3 billion in 2008 as a result of the global economic downturn which adversely affected advertising revenues across our ~~businesses, as~~businesses. Our impairment charges are discussed more fully in Item 7.8 of Part II of this Annual Report on Form 10-K.

~~(4)~~ (3) Includes the results of operations of ~~our live entertainment and sports representation businesses, which we spun-off on December 21, 2005,~~ our television business, which we sold on March 14, 2008, and certain of our non-core radio stations.
~~(5)~~ITEM 7. ~~Excludes the property, plant and equipment — net of our live entertainment and sports representation businesses, which we spun-off on December 21, 2005.~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
30
OVERVIEW
~~ITEM 7~~~~. Management’s Discussion and Analysis of Financial Condition and Results of Operations~~
~~Consummation of Merger~~
     We were formed in May 2007 by private equity funds sponsored by Bain Capital Partners, LLC and Thomas H. Lee Partners, L.P. (together, the “Sponsors”) for the purpose of acquiring the business of Clear Channel Communications, Inc., (“Clear Channel”). The acquisition was completed pursuant to the Agreement and Plan of Merger, dated November 16, 2006, as amended on April 18, 2007, May 17, 2007 and May 13, 2008. As a result of the merger, each issued and outstanding share of Clear Channel, other than shares held by certain of our principals that were rolled over and exchanged for shares of our Class A common stock, was either exchanged for (i) $36.00 in cash consideration or (ii) one share of our Class A common stock.
     ~~We accounted for our acquisition of Clear Channel as a purchase business combination in conformity with Statement of Financial Accounting Standards No. 141,~~~~Business Combinations~~~~, and Emerging Issues Task Force Issue 88-16,~~~~Basis in Leveraged Buyout Transactions~~. We allocated a portion of the consideration paid to the assets and liabilities acquired at their respective fair values with the remaining portion recorded at the continuing shareholders’ basis. Excess consideration after this allocation was recorded as goodwill.
     During the first seven months of 2009, we decreased the initial fair value estimate of our permits, contracts, site leases and other assets and liabilities primarily in our Americas segment by $116.1 million based on additional information received, which resulted in an increase to goodwill of $71.7 million and a decrease to deferred taxes of $44.4 million. During the third quarter of 2009, we adjusted deferred taxes by $44.3 million to true-up our tax rates in certain jurisdictions that were estimated in the initial purchase price allocation. Also, during the third quarter of 2009, we recorded a $45.0 million increase to goodwill in our International outdoor segment related to the fair value of certain noncontrolling interests which existed at the merger date, with no related tax effect. This noncontrolling interest was recorded pursuant to ASC 480-10-S99 which determines the classification of redeemable noncontrolling interests. We subsequently determined that the increase in goodwill related to these noncontrolling interests should have been included in the impairment charge resulting from the December 31, 2008 interim goodwill impairment test. As a result, during the fourth quarter of 2009, we impaired this entire goodwill amount, which after considering the effects of foreign exchange movements, was $41.4 million.
     ~~The purchase price allocation was complete as of July 30, 2009 in accordance with ASC 805-10-25, which requires that the allocation period not exceed one year from the date of acquisition.~~
Format of Presentation
     Our consolidated statements of operations and statements of cash flows are presented for two periods: post-merger and pre-merger. The merger resulted in a new basis of accounting beginning on July 31, 2008 and the financial reporting periods are presented as follows:
• The year ended December 31, 2009 and the period from July 31 through December 31, 2008 reflect our post-merger period. Subsequent to the acquisition, Clear Channel became an indirect, wholly-owned subsidiary of ours and our business became that of Clear Channel and its subsidiaries.
• The period from January 1 through July 30, 2008 and the year ended December 31, 2007 reflect the pre-merger period of Clear Channel. Prior to the consummation of our acquisition of Clear Channel, we had not conducted any activities, other than activities incident to our formation and in connection with the acquisition, and did not have any assets or liabilities, other than as related to the acquisition. The consolidated financial statements for all pre-merger periods were prepared using the historical basis of accounting for Clear Channel. As a result of the merger and the associated purchase accounting, the consolidated financial statements of the post-merger periods are not comparable to periods preceding the merger.
     The discussion in this MD&A is presented on a combined basis of the pre-merger and post-merger periods for 2008. The 2008 post-merger and pre-merger results are presented but are not discussed separately. We believe that the discussion on a combined basis is more meaningful as it allows the results of operations to be analyzed to comparable periods in 2009 and 2007.
Management’s discussion and analysis of our results of operations and financial condition (“MD&A”) should be read in conjunction with the consolidated financial statements and related footnotes. Our discussion is presented on both a consolidated and segment basis. Our reportable operating segments are ~~radio broadcasting~~Media and Entertainment (“~~radio” or “radio~~
31
~~broadcasting”)~~CCME”, ~~which includes~~formerly known as our ~~national syndication business,~~Radio segment), Americas ~~Outdoor Advertising~~outdoor advertising (“~~Americas”~~Americas outdoor” or “Americas outdoor advertising”), and International ~~Outdoor Advertising~~outdoor advertising (“~~International”~~International outdoor” or “International outdoor advertising”). Our CCME segment provides media and entertainment services via broadcast and digital delivery and also includes our national syndication business. Our Americas outdoor and International outdoor segments provide outdoor advertising services in their respective geographic regions using various digital and traditional display types. Included in the ~~“other”~~“Other” segment are our media representation business, Katz Media Group, as well as other general support services and ~~initiatives.~~
initiatives, which are ancillary to our other businesses.
We manage our operating segments primarily focusing on their operating income, while Corporate expenses, ~~Merger expenses,~~ Impairment ~~charge,~~charges, Other operating income (expense) — net, Interest expense, ~~Gain (loss)~~Loss on marketable securities, Equity in earnings (loss) of nonconsolidated affiliates, Other income (expense) — net and Income tax benefit ~~(expense) and Income (loss) from discontinued operations, net~~ are managed on a total company basis and are, therefore, included only in our discussion of consolidated results.
~~Cash Flow and Liquidity~~
     Our primary source of liquidity is cash on hand as well as cash flow from operations. We have a large amount of indebtedness, and a substantial portion of our operating income and cash flow are used to service debt. At December 31, 2009, we had $1.9 billion of cash on our balance sheet, with $609.4 million held by our subsidiary, Clear Channel Outdoor Holdings, Inc., and its subsidiaries. We have debt maturities totaling $403.2 million and $873.0 million in 2010 and 2011, respectively. Based on our current operations and anticipated levels of operations and conditions in our markets, we believe that cash on hand as well as cash flow from operations will enable us to meet our working capital, capital expenditure, debt service and other funding requirements for at least the next 12 months.
     Our ability to fund our working capital needs, debt service and other obligations depends on our future operating performance and cash flow. If our future operating performance does not meet our expectation or our plans materially change in an adverse manner or prove to be materially inaccurate, we may need additional financing. Continuing adverse securities and credit market conditions could significantly affect the availability of equity or credit financing. Consequently, there can be no assurance that such financing, if permitted under the terms of our financing agreements, will be available on terms acceptable to us or at all. The inability to obtain additional financing in such circumstances could have a material adverse effect on our financial condition and on our ability to meet our obligations.
~~Impairment Charges~~
~~Impairments to Definite-lived Tangible and Intangible Assets~~
     We review our definite-lived tangible and intangible assets for impairment when events and circumstances indicate that amortizable long-lived assets might be impaired and the undiscounted cash flows estimated to be generated from those assets are less than the carrying amount of those assets. When specific assets are determined to be unrecoverable, the cost basis of the asset is reduced to reflect the current fair market value.
     We use various assumptions in determining the current fair market value of these assets, including future expected cash flows, industry growth rates and discount rates. Impairment loss calculations require management to apply judgment in estimating future cash flows, including forecasting useful lives of the assets and selecting the discount rate that reflects the risk inherent in future cash flows.
     During fourth quarter of 2009, we recorded impairments of $28.8 million primarily related to contract intangible assets and street furniture tangible assets in our International segment and $11.3 million related to corporate assets based on the provisions of ASC 360-10. ASC 360-10 states that long-lived assets should be tested for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The decline in our contract intangible assets was primarily driven by a decline in cash flow projections from these contracts. The remaining balance of the contract intangible assets, for the contracts that were impaired, and the remaining balance of the corporate assets after impairment was $4.4 million and $20.2 million, respectively.
     During the second quarter of 2009, we recorded a $21.3 million impairment to taxi contract intangible assets in our Americas segment and a $26.2 million impairment primarily related to street furniture tangible assets and contract intangible assets in our International segment under ASC 360-10. We determined fair values using a discounted cash flow model. The decline in fair value of the contracts was primarily driven by a decline in the revenue projections since the date of the merger. The decline in revenue related to taxi contract intangible assets and street furniture and billboard contract intangible assets was in the range of 10% to 15%. The balance of these taxi contract intangible assets and street furniture and billboard contract intangible assets after the impairment charges, for the contracts that were impaired, was $3.3 million and $16.0 million, respectively. We subsequently sold our taxi advertising business in the fourth quarter of 2009 and recorded a loss of $20.9 million.
32
~~Interim Impairments to FCC Licenses~~
     FCC broadcast licenses are granted to radio stations for up to eight years under the Telecommunications Act of 1996 (the “Act”). The Act requires the FCC to renew a broadcast license if the FCC finds that the station has served the public interest, convenience and necessity, thereCertain prior period amounts have been no serious violations of either the Communications Act of 1934 or the FCC’s rules and regulations by the licensee, and there have been no other serious violations which taken together constitute a pattern of abuse. The licenses may be renewed indefinitely at little or no cost.
     ~~The United States and global economies have undergone an economic downturn, which caused, among other things, a general tightening in the credit markets, limited access~~reclassified to conform to the credit markets, lower levels of liquidity and lower consumer and business spending. These disruptions in the credit and financial markets and the impact of adverse economic, financial and industry conditions on the demand for advertising negatively impacted the key assumptions in the discounted cash flow models used to value our FCC licenses since the merger. Therefore, we performed an interim impairment test on our FCC licenses as of December 31, 2008, which resulted in a non-cash impairment charge of $936.2 million.
     The industry cash flows forecast by BIA Financial Network, Inc. (“BIA”) during the first six months of 2009 were below the BIA forecast used in the discounted cash flow model used to calculate the impairment at December 31, 2008. As a result, we performed another interim impairment test as of June 30, 2009 on our FCC licenses resulting in an additional non-cash impairment charge of $590.3 million.
     Our impairment tests consisted of a comparison of the fair value of the FCC licenses at the market level with their carrying amount. If the carrying amount of the FCC license exceeded its fair value, an impairment loss was recognized equal to that excess. After an impairment loss is recognized, the adjusted carrying amount of the FCC license is its new accounting basis. The fair value of the FCC licenses was determined using the direct valuation method as prescribed in ASC 805-20-S99. Under the direct valuation method, the fair value of the FCC licenses was calculated at the market level as prescribed by ASC 350-30-35.We engaged Mesirow Financial Consulting LLC (“Mesirow Financial”), a third-party valuation firm, to assist us in the development of the assumptions and our determination of the fair value of our FCC licenses.
     Our application of the direct valuation method attempts to isolate the income that is properly attributable to the license alone (that is, apart from tangible and identified intangible assets and goodwill). It is based upon modeling a hypothetical “greenfield” build up to a “normalized” enterprise that, by design, lacks inherent goodwill and whose only other assets have essentially been paid for (or added) as part of the build-up process. We forecasted revenue, expenses, and cash flows over a ten-year period for each of our markets in our application of the direct valuation method. We also calculated a “normalized” residual year which represents the perpetual cash flows of each market. The residual year cash flow was capitalized to arrive at the terminal value of the licenses in each market.
     Under the direct valuation method, it is assumed that rather than acquiring indefinite-lived intangible assets as part of a going concern business, the buyer hypothetically develops indefinite-lived intangible assets and builds a new operation with similar attributes from scratch. Thus, the buyer incurs start-up costs during the build-up phase which are normally associated with going concern value. Initial capital costs are deducted from the discounted cash flow model which results in value that is directly attributable to the indefinite-lived intangible assets.
     Our key assumptions using the direct valuation method are market revenue growth rates, market share, profit margin, duration and profile of the build-up period, estimated start-up capital costs and losses incurred during the build-up period, the risk-adjusted discount rate and terminal values. This data is populated using industry normalized information representing an average FCC license within a market.
     ~~Management uses publicly available information from BIA regarding the future revenue expectations for the radio broadcasting industry.~~
     The build-up period represents the time it takes for the hypothetical start-up operation to reach normalized operations in terms of achieving a mature market share and profit margin. Management believes that a three-year build-up period is required for a start-up operation to obtain the necessary infrastructure and obtain advertisers. It is estimated that a start-up operation would gradually obtain a mature market revenue share in three years. BIA forecasted industry revenue growth of 1.9% and negative 1.8%, respectively, during the build-up period used in the December 31, 2008 and June 30, 2009 impairment tests. The cost structure is expected to reach the normalized level over three years due to the time required to establish operations and recognize the synergies and cost savings associated with the ownership of the FCC licenses within the market.
33
2011 presentation.
CCME
     The estimated operating margin in the first year of operations was assumed to be 12.5% based on observable market data for an independent start-up radio station for both the December 31, 2008 and June 30, 2009 impairment tests. The estimated operating margin in the second year of operations was assumed to be the mid-point of the first-year operating margin and the normalized operating margin. The normalized operating margin in the third year was assumed to be the industry average margin of 30% and 29% based on an analysis of comparable companies for the December 31, 2008 and June 30, 2009 impairment tests, respectively. The first and second-year expenses include the non-operating start-up costs necessary to build the operation (i.e. development of customers, workforce, etc.).
     In addition to cash flows during the projection period, a “normalized” residual cash flow was calculated based upon industry-average growth of 2% beyond the discrete build-up projection period for both the December 31, 2008 and June 30, 2009 impairment tests. The residual cash flow was then capitalized to arrive at the terminal value.
     The present value of the cash flows is calculated using an estimated required rate of return based upon industry-average market conditions. In determining the estimated required rate of return, management calculated a discount rate using both current and historical trends in the industry.
     We calculated the discount rate as of the valuation date and also one-year, two-year, and three-year historical quarterly averages. The discount rate was calculated by weighting the required returns on interest-bearing debt and common equity capital in proportion to their estimated percentages in an expected capital structure. The capital structure was estimated based on the quarterly average of data for publicly traded companies in the radio broadcasting industry.
     The calculation of the discount rate required the rate of return on debt, which was based on a review of the credit ratings for comparable companies (i.e., market participants). We calculated the average yield on a Standard & Poor’s “B” and “CCC” rated corporate bond which was used for the pre-tax rate of return on debt and tax-effected such yield based on applicable tax rates.
     The rate of return on equity capital was estimated using a modified Capital Asset Pricing Model (“CAPM”). Inputs to this model included the yield on long-term U.S. Treasury Bonds, forecast betas for comparable companies, calculation of a market risk premium based on research and empirical evidence and calculation of a size premium derived from historical differences in returns between small companies and large companies using data published by Ibbotson Associates.
     Our concluded discount rate used in the discounted cash flow models to determine the fair value of the licenses was 10% for our 13 largest markets and 10.5% for all of our other markets in both the December 31, 2008 and June 30, 2009 impairment models. Applying the discount rate, the present value of cash flows during the discrete projection period and terminal value were added to estimate the fair value of the hypothetical start-up operation. The initial capital investment was subtracted to arrive at the value of the licenses. The initial capital investment represents the fixed assets needed to operate the radio station.
     The discount rate used in the December 31, 2008 impairment model increased 150 basis points compared to the discount rate used in the preliminary purchase price allocation as of July 30, 2008 which resulted in a decline in the fair value of our licenses. As a result, we recognized a non-cash impairment charge in approximately one-quarter of our markets, which totaled $936.2 million. The fair value of our FCC licenses was $3.0 billion at December 31, 2008.
     The BIA forecast for 2009 declined 8.7% and declined between 13.8% and 15.7% through 2013 compared to the BIA forecasts used in the 2008 impairment test. Additionally, the industry profit margin declined 100 basis points from the 2008 impairment test. These market driven changes were primarily responsible for the decline in fair value of the FCC licenses below their carrying value. As a result, we recognized a non-cash impairment charge in approximately one-quarter of our markets, which totaled $590.3 million. The fair value of our FCC licenses was $2.4 billion at June 30, 2009.
     In calculating the fair value of our FCC licenses, we primarily relied on the discounted cash flow models. However, we relied on the stick method for those markets where the discounted cash flow model resulted in a value less than the stick method indicated.
     To estimate the stick values for our markets, we obtained historical radio station transaction data from BIA which involved sales of individual radio stations whereby the station format was immediately abandoned after acquisition. These transactions are highly indicative of stick transactions in which the buyer does not assign value to any of the other acquired assets (i.e. tangible or intangible assets) and is only purchasing the FCC license.
34
     In addition, we analyzed publicly available FCC license auction data involving radio broadcast licenses. Periodically, the FCC will hold an auction for certain FCC licenses in various markets and these auction prices reflect the purchase of only the FCC radio license.
     Based on this analysis, the stick values were estimated to be the minimum value of a radio license within each market. This value was considered to be the fair value of the license for those markets where the present value of the cash flows and terminal value did not exceed the estimated stick value. Approximately 17% and 23% of the fair value of our FCC licenses at December 31, 2008 and June 30, 2009, respectively, was determined using the stick method.
     The following table shows the increase to the FCC license impairment that would have occurred using hypothetical percentage reductions in fair value, had the hypothetical reductions in fair value existed at the time of our impairment testing:

(In thousands) June 30, 2009 December 31, 2008
Percent change in fair value Change to impairment Change to impairment
5% $ 118,877 $ 151,008
10% $ 239,536 $ 302,016
15% $ 360,279 $ 453,025
~~Annual Impairment Test to FCC Licenses~~
     We perform our annual impairment test on October 1 of each year. We engaged Mesirow Financial, a third-party valuation firm, to assist us in the development of the assumptions and our determination of the fair value of our FCC licenses. The aggregate fair value of our FCC licenses on October 1, 2009 increased approximately 11% from the fair value at June 30, 2009. The increase in fair value resulted primarily from an increase of $120.4 million related to improved revenue forecasts and an increase of $195.9 million related to a decline in the discount rate of 50 basis points. We calculated the discount rate as of the valuation date and also one-year, two-year, and three-year historical quarterly averages. The discount rate was calculated by weighting the required returns on interest-bearing debt and common equity capital in proportion to their estimated percentages in an expected capital structure. The capital structure was estimated based on the quarterly average of data for publicly traded companies in the radio broadcasting industry. These market driven changes were responsible for the decline in the calculated discount rate.
     As a result of the increase in the fair value of our FCC licenses, no impairment was recorded at October 1, 2009. The fair value of our FCC licenses at October 1, 2009 was approximately $2.7 billion.
     While we believe we have made reasonable estimates and utilized reasonable assumptions to calculate the fair value of our FCC licenses, it is possible a material change could occur. If our future actual results are not consistent with our estimates, we could be exposed to future impairment losses that could be material to our results of operations. The following table shows the decline in the fair value of our FCC licenses that would result from a 100 basis point decline in our discrete and terminal period revenue growth rate and profit margin assumptions and a 100 basis point increase in our discount rate assumption:

(In thousands)
Indefinite-lived intangible Revenue growth rate Profit margin Discount rate
FCC licenses $ 275,410 $ 117,410 $ 378,300
~~Interim Impairments to Billboard Permits~~
     Our billboard permits are effectively issued in perpetuity by state and local governments as they are transferable or renewable at little or no cost. Permits typically specify the locations at which we are allowed to operate an advertising structure. Due to significant differences in both business practices and regulations, billboards in our International segment are subject to long-term, finite contracts unlike our permits in the United States and Canada. Accordingly, there are no indefinite-lived assets in our International segment.
     The United States and global economies have undergone a period of economic uncertainty, which caused, among other things, a general tightening in the credit markets, limited access to the credit markets, lower levels of liquidity and lower consumer and business spending. These disruptions in the credit and financial markets and the impact of adverse economic, financial and industry conditions on the demand for advertising negatively impacted the key assumptions in the discounted cash flow models used to value our billboard permits since the merger. Therefore, we
35
~~performed an interim impairment test on our billboard permits as of December 31, 2008, which resulted in a non-cash impairment charge of $722.6 million.~~
     Our cash flows during the first six months of 2009 were below those in the discounted cash flow model used to calculate the impairment at December 31, 2008. As a result, we performed an interim impairment test as of June 30, 2009 on our billboard permits resulting in a non-cash impairment charge of $345.4 million.
     Our impairment tests consisted of a comparison of the fair value of the billboard permits at the market level with their carrying amount. If the carrying amount of the billboard permit exceeded its fair value, an impairment loss was recognized equal to that excess. After an impairment loss is recognized, the adjusted carrying amount of the billboard permit is its new accounting basis. The fair value of the billboard permits was determined using the direct valuation method as prescribed in ASC 805-20-S99. Under the direct valuation method, the fair value of the billboard permits was calculated at the market level as prescribed by ASC 350-30-35. ~~We engaged Mesirow Financial to assist us in the development of the assumptions and our determination of the fair value of our billboard permits.~~
     Our application of the direct valuation method utilized the “greenfield” approach as discussed above. Our key assumptions using the direct valuation method are market revenue growth rates, market share, profit margin, duration and profile of the build-up period, estimated start-up capital costs and losses incurred during the build-up period, the risk-adjusted discount rate and terminal values. This data is populated using industry normalized information representing an average billboard permit within a market.
     Management uses its internal forecasts to estimate industry normalized information as it believes these forecasts are similar to what a market participant would expect to generate. This is due to the pricing structure and demand for outdoor signage in a market being relatively constant regardless of the owner of the operation. Management also relied on its internal forecasts because there is little public data available for each of its markets.
     The build-up period represents the time it takes for the hypothetical start-up operation to reach normalized operations in terms of achieving a mature market revenue share and profit margin. Management believes that a one-year build-up period is required for a start-up operation to erect the necessary structures and obtain advertisers in order to achieve mature market revenue share. It is estimated that a start-up operation would be able to obtain 10% of the potential revenues in the first year of operations and 100% in the second year. Management assumed industry revenue growth of negative 9% and negative 16% during the build-up period for the December 31, 2008 and June 30, 2009 interim impairment tests, respectively. However, the cost structure is expected to reach the normalized level over three years due to the time required to recognize the synergies and cost savings associated with the ownership of the permits within the market.
     For the normalized operating margin in the third year, management assumed a hypothetical business would operate at the lower of the operating margin for the specific market or the industry average margin of 46% and 45% based on an analysis of comparable companies in the December 31, 2008 and June 30, 2009 impairment models, respectively. For the first and second year of operations, the operating margin was assumed to be 50% of the “normalized” operating margin for both the December 31, 2008 and June 30, 2009 impairment models. The first and second-year expenses include the non-recurring start-up costs necessary to build the operation (i.e. development of customers, workforce, etc.).
     In addition to cash flows during the projection period, a “normalized” residual cash flow was calculated based upon industry-average growth of 3% beyond the discrete build-up projection period in both the December 31, 2008 and June 30, 2009 impairment models. The residual cash flow was then capitalized to arrive at the terminal value.
     The present value of the cash flows is calculated using an estimated required rate of return based upon industry-average market conditions. In determining the estimated required rate of return, management calculated a discount rate using both current and historical trends in the industry.
     We calculated the discount rate as of the valuation date and also one-year, two-year, and three-year historical quarterly averages. The discount rate was calculated by weighting the required returns on interest-bearing debt and common equity capital in proportion to their estimated percentages in an expected capital structure. The capital structure was estimated based on the quarterly average of data for publicly traded companies in the outdoor advertising industry.
     The calculation of the discount rate required the rate of return on debt, which was based on a review of the credit ratings for comparable companies (i.e. market participants). We used the yield on a Standard & Poor’s “B” rated corporate bond for the pre-tax rate of return on debt and tax-effected such yield based on applicable tax rates.
36
     The rate of return on equity capital was estimated using a modified CAPM. Inputs to this model included the yield on long-term U.S. Treasury Bonds, forecast betas for comparable companies, calculation of a market risk premium based on research and empirical evidence and calculation of a size premium derived from historical differences in returns between small companies and large companies using data published by Ibbotson Associates.
     Our concluded discount rate used in the discounted cash flow models to determine the fair value of the permits was 9.5% at December 31, 2008 and 10% at June 30, 2009. Applying the discount rate, the present value of cash flows during the discrete projection period and terminal value were added to estimate the fair value of the hypothetical start-up operation. The initial capital investment was subtracted to arrive at the value of the permits. The initial capital investment represents the expenditures required to erect the necessary advertising structures.
     The discount rate used in the December 31, 2008 impairment model increased approximately 100 basis points over the discount rate used to value the permits in the preliminary purchase price allocation as of July 30, 2008. Industry revenue forecasts declined 10% through 2013 compared to the forecasts used in the preliminary purchase price allocation as of July 30, 2008. These market driven changes were primarily responsible for the decline in fair value of the billboard permits below their carrying value. As a result, we recognized a non-cash impairment charge which totaled $722.6 million. The fair value of our permits was $1.5 billion at December 31, 2008.
     The discount rate used in the June 30, 2009 impairment model increased approximately 50 basis points over the discount rate used to value the permits at December 31, 2008. Industry revenue forecasts declined 8% through 2013 compared to the forecasts used in the 2008 impairment test. These market driven changes were primarily responsible for the decline in fair value of the billboard permits below their carrying value. As a result, we recognized a non-cash impairment charge in all but five of our markets in the United States and Canada, which totaled $345.4 million. The fair value of our permits was $1.1 billion at June 30, 2009.
     The following table shows the increase to the billboard permit impairment that would have occurred using hypothetical percentage reductions in fair value, had the hypothetical reductions in fair value existed at the time of our impairment testing:

(In thousands) June 30, 2009 December 31, 2008
Percent change in fair value Change to impairment Change to impairment
5% $ 55,776 $ 80,798
10% $ 111,782 $ 156,785
15% $ 167,852 $ 232,820
~~Annual Impairment Test to Billboard Permits~~
     We perform our annual impairment test on October 1 of each year. We engaged Mesirow Financial to assist us in the development of the assumptions and our determination of the fair value of our billboard permits. The aggregate fair value of our permits on October 1, 2009 increased approximately 8% from the fair value at June 30, 2009. The increase in fair value resulted primarily from an increase of $57.7 million related to improved industry revenue forecasts. The discount rate was unchanged from the June 30, 2009 interim impairment analysis. We calculated the discount rate as of the valuation date and also one-year, two-year, and three-year historical quarterly averages. The discount rate was calculated by weighting the required returns on interest-bearing debt and common equity capital in proportion to their estimated percentages in an expected capital structure. The capital structure was estimated based on the quarterly average of data for publicly traded companies in the outdoor advertising industry.
     ~~The fair value of our permits at October 1, 2009 was approximately $1.2 billion.~~
     While we believe we have made reasonable estimates and utilized reasonable assumptions to calculate the fair value of our permits, it is possible a material change could occur. If our future actual results are not consistent with our estimates, we could be exposed to future impairment losses that could be material to our results of operations. The following table shows the decline in the fair value of our billboard permits that would result from a 100 basis point decline in our discrete and terminal period revenue growth rate and profit margin assumptions and a 100 basis point increase in our discount rate assumption:

(In thousands)
Indefinite-lived intangible Revenue growth rate Profit margin Discount rate
Billboard permits $ 405,900 $ 102,500 $ 428,100
37
~~Interim Impairments to Goodwill~~
     We test goodwill at interim dates if events or changes in circumstances indicate that goodwill might be impaired. The United States and global economies have undergone a period of economic uncertainty, which caused, among other things, a general tightening in the credit markets, limited access to the credit markets, lower levels of liquidity and lower consumer and business spending. These disruptions in the credit and financial markets and the impact of adverse economic, financial and industry conditions on the demand for advertising negatively impacted the key assumptions in the discounted cash flow model used to value our reporting units since the merger. Therefore, we performed an interim impairment test resulting in a non-cash impairment charge of $3.6 billion as of December 31, 2008.
     Our cash flows during the first six months of 2009 were below those used in the discounted cash flow model used to calculate the impairment at December 31, 2008. Additionally, the fair value of our debt and equity at June 30, 2009 was below the carrying amount of our reporting units at June 30, 2009. As a result of these indicators, we performed an interim goodwill impairment test as of June 30, 2009 resulting in a non-cash impairment charge of $3.1 billion.
     Our goodwill impairment test is a two-step process. The first step, used to screen for potential impairment, compares the fair value of the reporting unit with its carrying amount, including goodwill. If applicable, the second step, used to measure the amount of the impairment loss, compares the implied fair value of the reporting unit goodwill with the carrying amount of that goodwill. We engaged Mesirow Financial to assist us in the development of the assumptions and our determination of the fair value of our reporting units.
     Each of our U.S. radio markets and outdoor advertising markets are components. Our U.S. radio markets are aggregated into a single reporting unit and our U.S. outdoor advertising markets are aggregated into a single reporting unit for purposes of the goodwill impairment test using the guidance in ASC 350-20-55. We also determined that in our Americas segment, Canada, Mexico, Peru, and Brazil constitute separate reporting units and each country in our International segment constitutes a separate reporting unit.
     The discounted cash flow model indicated that we failed the first step of the impairment test for substantially all reporting units as of December 31, 2008 and June 30, 2009, which required us to compare the implied fair value of each reporting unit’s goodwill with its carrying value.
     The discounted cash flow approach we use for valuing our reporting units involves estimating future cash flows expected to be generated from the related assets, discounted to their present value using a risk-adjusted discount rate. Terminal values are also estimated and discounted to their present value.
     We forecasted revenue, expenses, and cash flows over a ten-year period for each of our reporting units. In projecting future cash flows, we consider a variety of factors including our historical growth rates, macroeconomic conditions, advertising sector and industry trends as well as company-specific information. Historically, revenues in our industries have been highly correlated to economic cycles. Based on these considerations, our assumed 2008 and 2009 revenue growth rates used in the December 31, 2008 and June 30, 2009 impairment models were negative followed by assumed revenue growth with an anticipated economic recovery in 2009 and 2010, respectively. To arrive at our projected cash flows and resulting growth rates, we evaluated our historical operating results, current management initiatives and both historical and anticipated industry results to assess the reasonableness of our operating margin assumptions. We also calculated a “normalized” residual year which represents the perpetual cash flows of each reporting unit. The residual year cash flow was capitalized to arrive at the terminal value of the reporting unit.
     We calculated the weighted average cost of capital (“WACC”) as of December 31, 2008 and June 30, 2009 and also one-year, two-year, and three-year historical quarterly averages for each of our reporting units. WACC is an overall rate based upon the individual rates of return for invested capital (equity and interest-bearing debt). The WACC is calculated by weighting the required returns on interest-bearing debt and common equity capital in proportion to their estimated percentages in an expected capital structure. The capital structure was estimated based on the quarterly average data for publicly traded companies in the radio and outdoor advertising industry. Our calculation of the WACC considered both current industry WACCs and historical trends in the industry.
     The calculation of the WACC requires the rate of return on debt, which was based on a review of the credit ratings for comparable companies (i.e. market participants) and the indicated yield on similarly rated bonds.
38
     The rate of return on equity capital was estimated using a modified CAPM. Inputs to this model included the yield on long-term U.S. Treasury Bonds, forecast betas for comparable companies, calculation of a market risk premium based on research and empirical evidence and calculation of a size premium derived from historical differences in returns between small companies and large companies using data published by Ibbotson Associates.
     In line with advertising industry trends, our operations and expected cash flow are subject to significant uncertainties about future developments, including timing and severity of the recessionary trends and customers’ behaviors. To address these risks, we included company-specific risk premiums for each of our reporting units in the estimated WACC. Based on this analysis, as of December 31, 2008, company-specific risk premiums of 100 basis points, 300 basis points and 300 basis points were included for our Radio, Americas outdoor and International outdoor segments, respectively, resulting in WACCs of 11%, 12.5% and 12.5% for each of our reporting units in the Radio, Americas and International segments, respectively. As of June 30, 2009, company-specific risk premiums of 100 basis points, 250 basis points and 350 basis points were included for our Radio, Americas outdoor and International outdoor segments, respectively, resulting in WACCs of 11%, 12.5% and 13.5% for each of our reporting units in the Radio, Americas and International segments, respectively. Applying these WACCs, the present value of cash flows during the discrete projection period and terminal value were added to estimate the fair value of the reporting units.
     The discount rate utilized in the valuation of the FCC licenses and outdoor permits as of December 31, 2008 and June 30, 2009 excludes the company-specific risk premiums that were added to the industry WACCs used in the valuation of the reporting units. Management believes the exclusion of this premium is appropriate given the difference between the nature of the licenses and billboard permits and reporting unit cash flow projections. The cash flow projections utilized under the direct valuation method for the licenses and permits are derived from utilizing industry “normalized” information for the existing portfolio of licenses and permits. Given that the underlying cash flow projections are based on industry normalized information, application of an industry average discount rate is appropriate. Conversely, our cash flow projections for the overall reporting unit are based on our internal forecasts for each business and incorporate future growth and initiatives unrelated to the existing license and permit portfolio. Additionally, the projections for the reporting unit include cash flows related to non-FCC license and non-permit based assets. In the valuation of the reporting unit, the company-specific risk premiums were added to the industry WACCs due to the risks inherent in achieving the projected cash flows of the reporting unit.
     We also utilized the market approach to provide a test of reasonableness to the results of the discounted cash flow model. The market approach indicates the fair value of the invested capital of a business based on a company’s market capitalization (if publicly traded) and a comparison of the business to comparable publicly traded companies and transactions in its industry. This approach can be estimated through the quoted market price method, the market comparable method, and the market transaction method.
     One indication of the fair value of a business is the quoted market price in active markets for the debt and equity of the business. The quoted market price of equity multiplied by the number of shares outstanding yields the fair value of the equity of a business on a marketable, noncontrolling basis. We then apply a premium for control and add the estimated fair value of interest-bearing debt to indicate the fair value of the invested capital of the business on a marketable, controlling basis.
     The market comparable method provides an indication of the fair value of the invested capital of a business by comparing it to publicly traded companies in similar lines of business. The conditions and prospects of companies in similar lines of business depend on common factors such as overall demand for their products and services. An analysis of the market multiples of companies engaged in similar lines of business yields insight into investor perceptions and, therefore, the value of the subject business. These multiples are then applied to the operating results of the subject business to estimate the fair value of the invested capital on a marketable, noncontrolling basis. We then apply a premium for control to indicate the fair value of the business on a marketable, controlling basis.
     The market transaction method estimates the fair value of the invested capital of a business based on exchange prices in actual transactions and on asking prices for controlling interests in similar companies recently offered for sale. This process involves comparison and correlation of the subject business with other similar companies that have recently been purchased. Considerations such as location, time of sale, physical characteristics, and conditions of sale are analyzed for comparable businesses.
     The three variations of the market approach indicated that the fair value determined by our discounted cash flow model was within a reasonable range of outcomes as of December 31, 2008 and June 30, 2009.
39
     Our revenue forecasts for 2009 declined 18%, 21% and 29% for Radio, Americas outdoor and International outdoor, respectively, compared to the forecasts used in the July 30, 2008 preliminary purchase price allocation primarily as a result of our revenues realized for the year ended December 31, 2008. These market driven changes were primarily responsible for the decline in fair value of our reporting units below their carrying value. As a result, we recognized a non-cash impairment charge to reduce our goodwill of $3.6 billion at December 31, 2008.
     Our revenue forecasts for 2009 declined 8%, 7% and 9% for Radio, Americas outdoor and International outdoor, respectively, compared to the forecasts used in the 2008 impairment test primarily as a result of our revenues realized during the first six months of 2009. These market driven changes were primarily responsible for the decline in fair value of our reporting units below their carrying value. As a result, we recognized a non-cash impairment charge to reduce our goodwill of $3.1 billion at June 30, 2009.
     The following table shows the increase to the goodwill impairment that would have occurred using hypothetical percentage reductions in fair value, had the hypothetical reduction in fair value existed at the time of our impairment testing:

June 30, 2009 December 31, 2008
(In thousands) Change to impairment Change to impairment
Reportable segment 5% 10% 15% 5% 10% 15%
Radio Broadcasting $ 353,000 $ 706,000 $ 1,059,000 $ 460,007 $ 920,007 $ 1,380,007
Americas Outdoor $ 164,950 $ 329,465 $ 493,915 $ 166,303 $ 341,303 $ 516,303
International Outdoor $ 7,207 $ 18,452 $ 33,774 $ 6,761 $ 14,966 $ 24,830
~~Annual Impairment Test to Goodwill~~
     We perform our annual impairment test on October 1 of each year. We engaged Mesirow Financial to assist us in the development of the assumptions and our determination of the fair value of our reporting units. The fair value of our reporting units on October 1, 2009 increased from the fair value at June 30, 2009. The increase in fair value of our radio reporting unit was primarily the result of a 50 basis point decline in the WACC as well as a 130 basis point increase in the long-term operating margin. The increase in fair value of our Americas reporting unit was primarily the result of a 150 basis point decline in the WACC. Application of the market approach described above supported lowering the company-specific risk premium used in the discounted cash flow model to fair value the Americas reporting unit. The increase in the aggregate fair value of the reporting units in our International outdoor segment was primarily the result of an improvement in the long-term revenue forecasts. A certain reporting unit in our International outdoor segment recognized a $41.4 million impairment to goodwill related to the fair value adjustments of certain noncontrolling interests recorded in the merger pursuant to ASC 480-10-S99.
     While we believe we have made reasonable estimates and utilized appropriate assumptions to calculate the fair value of our reporting units, it is possible a material change could occur. If future results are not consistent with our assumptions and estimates, we may be exposed to impairment charges in the future. The following table shows the decline in the fair value of each of our reportable segments that would result from a 100 basis point decline in our discrete and terminal period revenue growth rate and profit margin assumptions and a 100 basis point increase in our discount rate assumption:

(In thousands)
Reportable segment Revenue growth rate Profit margin Discount rates
Radio Broadcasting $ 770,000 $ 210,000 $ 700,000
Americas Outdoor $ 480,000 $ 110,000 $ 430,000
International Outdoor $ 180,000 $ 150,000 $ 160,000
40
     ~~A rollforward of our goodwill balance from July 30, 2008 through December 31, 2009 by reporting unit is as follows:~~

Balances as Balances as of
of Foreign December 31,
(In thousands) July 30, 2008 Acquisitions Dispositions Currency Impairment Adjustments 2008
United States Radio Markets $ 6,691,260 $ 3,486 $ — $ — $ (1,115,033 ) $ (523 ) $ 5,579,190
United States Outdoor Markets 3,121,645 — — — (2,296,915 ) — 824,730
France 122,865 — — (14,747 ) (23,620 ) — 84,498
Switzerland 57,664 — — (977 ) — 198 56,885
Australia 40,520 — — (11,813 ) — (529 ) 28,178
Belgium 37,982 — — (4,549 ) (7,505 ) — 25,928
Sweden 31,794 — — (8,118 ) — — 23,676
Norway 26,434 — — (7,626 ) — — 18,808
Ireland 16,224 — — (1,939 ) — — 14,285
United Kingdom 32,336 — — (10,162 ) (22,174 ) — —
Italy 23,649 — (542 ) (2,808 ) (20,521 ) 222 —
China 31,187 — — 234 (31,421 ) — —
Spain 21,139 — — (2,537 ) (18,602 ) — —
Turkey 17,896 — — — (17,896 ) — —
Finland 13,641 — — (1,637 ) (12,004 ) — —
Americas Outdoor — Canada 35,390 — — (5,783 ) (24,687 ) — 4,920
All Others — Americas 86,770 — — (23,822 ) — — 62,948
All Others — International Outdoor 54,265 — — 3,160 (19,692 ) (2,448 ) 35,285
Other 331,290 — — — — — 331,290

$ 10,793,951 $ 3,486 $ (542 ) $ (93,124 ) $ (3,610,070 ) $ (3,080 ) $ 7,090,621

Balances as of Balances as of
(In thousands) December 31, 2008 Acquisitions Dispositions Foreign Currency Impairment Adjustments December 31, 2009
United States Radio Markets $ 5,579,190 $ 4,518 $ (62,410 ) $ — $ (2,420,897 ) $ 46,468 $ 3,146,869
United States Outdoor Markets 824,730 2,250 — — (324,892 ) 69,844 571,932
Switzerland 56,885 — — 1,276 (7,827 ) — 50,334
Ireland 14,285 — — 223 (12,591 ) — 1,917
Baltics 10,629 — — — (10,629 ) — —
Americas Outdoor — Mexico 8,729 — — 7,440 (10,085 ) (442 ) 5,642
Americas Outdoor — Chile 3,964 — — 4,417 (8,381 ) — —
Americas Outdoor — Peru 45,284 — — — (37,609 ) — 7,675
Americas Outdoor — Brazil 4,971 — — 4,436 (9,407 ) — —
Americas Outdoor — Canada 4,920 — — — — (4,920 ) —
All Others — International Outdoor 205,744 110 — 15,913 (42,717 ) 45,042 224,092
Other 331,290 — (2,276 ) — (211,988 ) (482 ) 116,544

$ 7,090,621 $ 6,878 $ (64,686 ) $ 33,705 $ (3,097,023 ) $ 155,510 $ 4,125,005

41
~~Restructuring Program~~
     In 2008 and continuing into 2009, the global economic downturn adversely affected advertising revenues across our businesses. In the fourth quarter of 2008, we initiated an ongoing, company-wide strategic review of our costs and organizational structure to identify opportunities to maximize efficiency and realign expenses with our current and long-term business outlook. As of December 31, 2009, we had incurred a total of $260.3 million of costs in conjunction with this restructuring program. We estimate the benefit of the restructuring program was an approximate $441.3 million aggregate reduction to fixed operating and corporate expenses in 2009 and that the benefit of these initiatives will be fully realized by 2011.
     No assurance can be given that the restructuring program will achieve all of the anticipated cost savings in the timeframe expected or at all, or that the cost savings will be sustainable. In addition, we may modify or terminate the restructuring program in response to economic conditions or otherwise.
     The following table shows the expenses related to our restructuring program recognized as components of direct operating expenses, selling, general and administrative (“SG&A”) expenses and corporate expenses for the year ended December 31, 2009 and 2008, respectively:

Post-Merger Combined
Year Ended Year Ended
December 31, December 31,
(In thousands) 2009 2008
Direct operating expenses $ 89,604 $ 31,704
SG&A expenses 39,193 57,909
Corporate expenses 35,612 6,288

Total $ 164,409 $ 95,901

~~Sale of Non-core Radio Stations~~
     Clear Channel’s sale of non-core radio stations was substantially complete in the first half of 2008. We determined that each radio station market in Clear Channel’s non-core radio station sales represents a disposal group consistent with the provisions of ASC 360-10. Consistent with the provisions of ASC 360-10, Clear Channel classified these assets sales as discontinued operations. Additionally, net income and cash flow from these non-core radio station sales were classified as discontinued operations in the consolidated statements of operations and the consolidated statements of cash flows, respectively, in 2008 through the date of sale and for all of 2007.
~~Sale of the Television Business~~
     On March 14, 2008, Clear Channel completed the sale of its television business to Newport Television, LLC for $1.0 billion, adjusted for certain items including proration of expenses and adjustments for working capital. As a result, Clear Channel recorded a gain of $662.9 million as a component of “Income (loss) from discontinued operations, net” in our consolidated statement of operations during 2008. Additionally, net income and cash flows from the television business were classified as discontinued operations in the consolidated statements of operations and the consolidated statements of cash flows, respectively, in 2008 through the date of sale and for all of 2007.
~~Radio Broadcasting~~
     Our radio business has been adversely impacted and may continue to be adversely impacted by the recession in the United States. The weak economy in the United States has, among other things, adversely affected our clients’ need for advertising and marketing services thereby reducing demand for, and prices for, our advertising spots. Continued weak demand for these services could materially affect our business, financial condition and results of operations.
Our revenue is derived primarily from selling advertising time, or spots, on our radio stations, with advertising contracts typically less than one year in duration. The programming formats of our radio stations are designed to reach audiences with targeted demographic characteristics that appeal to our advertisers. ~~Management~~We also provide streaming content via the Internet, mobile and other digital platforms which reach national, regional and local audiences and derive revenues primarily from selling advertising time with advertising contracts similar to those used by our radio stations.
CCME management monitors average advertising rates, which are principally based on the length of the spot and how many people in a targeted audience listen to our stations, as measured by an independent ratings service. ~~The size of the market influences rates as well, with larger markets typically receiving higher rates than smaller markets.~~ Also, our advertising rates are influenced by the time of day the advertisement airs, with morning and evening drive-time hours typically ~~highest priced.~~priced the highest. Management monitors yield per available minute in addition to average rates because yield allows management to track revenue performance across our inventory. Yield is measured by management in a variety of ways, including revenue earned divided by minutes of advertising sold.
42
Management monitors ~~macro level~~macro-level indicators to assess our ~~radio~~CCME operations’ performance. Due to the geographic diversity and autonomy of our markets, we have a multitude of ~~market specific~~market-specific advertising rates and audience demographics. Therefore, management reviews average unit rates across each of our stations.
Management looks at our ~~radio~~CCME operations’ overall revenue as well as the revenue from each type of advertising, including local advertising, which is sold predominately in a station’s local market, and national advertising, which is sold across multiple markets. Local advertising is sold by each radio station’s sales staff while national advertising is sold, for the most part, through our national representation firm. Local advertising, which is our largest source of advertising revenue, and national advertising revenues are tracked separately because these revenue streams have different sales forces and respond differently to changes in the economic environment. We periodically review and refine our selling structures in all markets in an effort to maximize the value of our offering to advertisers and, therefore, our revenue.
Management also looks at ~~radio~~CCME revenue by market size. Typically, larger markets can reach larger audiences with wider demographics than smaller markets. Additionally, management reviews our share of ~~radio~~CCME advertising revenues in markets where such information is available, as well as our share of target demographics listening to the radio in an average quarter hour. This metric gauges how well our formats are attracting and retaining listeners.
A portion of our ~~radio~~CCME segment’s expenses vary in connection with changes in revenue. These variable expenses primarily relate to costs in our sales department, such as commissions and bad debt. Our programming and general and administrative departments incur most of our fixed costs, such as talent costs, rights fees, utilities and office salaries. ~~Lastly, we~~We incur discretionary costs in our marketing and promotions, which we primarily use in an effort to maintain and/or increase our audience share.
~~Americas~~ Lastly, we have incentive systems in each of our departments which provide for bonus payments based on specific performance metrics, including ratings, sales levels, pricing and ~~International~~ overall profitability.
Outdoor Advertising
Our outdoor advertising business has been, and may continue to be, adversely impacted by the difficult economic conditions currently present in the United States and other countries in which we operate. The recession has, among other things, adversely affected our clients’ need for advertising and marketing services, resulted in increased cancellations and non-renewals by our clients, thereby reducing our occupancy levels, and could require us to lower our rates in order to remain competitive, thereby reducing our yield, or affect our client’s solvency. Any one or more of these effects could materially affect our business, financial condition and results of operations.
     ~~Our~~ revenue is derived from selling advertising space on the displays we own or operate in key markets worldwide, consisting primarily of billboards, street furniture and transit displays. Part of our long-term strategy for our outdoor advertising businesses is to pursue the technology of digital displays, including flat screens, LCDs and LEDs, as alternatives to traditional methods of displaying our clients’ advertisements. We are currently installing these technologies in certain markets, both domestically and internationally.
Management typically monitors our business by reviewing the average rates, average revenue per display, or yield, occupancy, and inventory levels of each of our display types by market.
We own the majority of our advertising displays, which typically are located on sites that we either lease or own or for which we have acquired permanent easements. Our advertising contracts with clients typically outline the number of displays reserved, the duration of the advertising campaign and the unit price per display.
     Our advertising rates are based on a number of different factors including location, competition, size of display, illumination, market and gross ratings points. Gross ratings points are the total number of impressions delivered by a display or group of displays, expressed as a percentage of a market population. The number of impressions delivered by a display is measured by the number of people passing the site during a defined period of time and, in some international markets, is weighted to account for such factors as illumination, proximity to other displays and the speed and viewing angle of approaching traffic. Management typically monitors our business by reviewing the average rates, average revenue per display, or yield, occupancy, and inventory levels of each of our display types by market. In addition, because a significant portion of our advertising operations are conducted in foreign markets, primarily the Euro area, the United Kingdom and China, management reviews the operating results from our foreign operations on a constant dollar basis. A constant dollar basis allows for comparison of operations independent of foreign exchange movements.
The significant expenses associated with our operations include (i) direct production, maintenance and installation expenses, (ii) site lease expenses for land under our displays and (iii) revenue-sharing or minimum guaranteed amounts payable under our billboard, street furniture and transit display contracts. Our direct production, maintenance and installation expenses include costs for printing, transporting and changing the advertising copy on our displays, the related labor costs, the vinyl and paper costs, electricity costs and the costs for cleaning and maintaining our displays. Vinyl and paper costs vary according to the complexity of the advertising copy and the quantity of displays. Our site lease expenses include lease payments for use of the land under our displays, as well as any revenue-sharing arrangements or minimum guaranteed amounts payable that we may have with the landlords. The terms of our site leases and revenue-sharing or minimum guaranteed contracts generally range from one to 20 years.
43
Americas Outdoor Advertising
Our advertising rates are based on a number of different factors including location, competition, size of display, illumination, market and gross ratings points. Gross ratings points are the total number of impressions delivered by a display or group of displays, expressed as a percentage of a market population. The number of impressions delivered by a display is measured by the number of people passing the site during a defined period of time. For all of our billboards in the United States, we use independent, third-party auditing companies to verify the number of impressions delivered by a display.
Client contract terms typically range from four weeks to one year for the majority of our display inventory in the United States. Generally, we own the street furniture structures and are responsible for their construction and maintenance. Contracts for the right to place our street furniture and transit displays and sell advertising space on them are awarded by municipal and transit authorities in competitive bidding processes governed by local law or are negotiated with private transit operators. Generally, these contracts have terms ranging from 10 to 20 years.
International Outdoor Advertising
Similar to our Americas outdoor business, advertising rates generally are based on the gross ratings points of a display or group of displays. The number of impressions delivered by a display, in some countries, is weighted to account for such factors as illumination, proximity to other displays and the speed and viewing angle of approaching traffic. In addition, because our International ~~business, normal market practice~~outdoor advertising operations are conducted in foreign markets, primarily Europe and Asia, management reviews the operating results from our foreign operations on a constant dollar basis. A constant dollar basis allows for comparison of operations independent of foreign exchange movements.
Our International display inventory is typically sold to ~~sell billboards and street furniture as~~clients through network packages, with client contract terms typically ranging from one to two weeks ~~compared to contract~~with terms ~~typically ranging from four weeks~~of up to one year available as well. Internationally, contracts with municipal and transit authorities for the right to place our street furniture and transit displays typically provide for terms ranging from three to 15 years. The major difference between our International and Americas street furniture businesses is in the ~~U.S.~~nature of the municipal contracts. In ~~addition,~~our International outdoor business, these contracts typically require us to provide the municipality with a broader range of metropolitan amenities in exchange for which we are authorized to sell advertising space on certain sections of the structures we erect in the public domain. A different regulatory environment for billboards and competitive bidding for street furniture and transit display contracts, which constitute a larger portion of our ~~International~~ business ~~and a different regulatory environment for billboards,~~internationally, may result in higher site lease ~~cost~~costs in our International ~~business compared to our Americas~~ business. As a result, our margins are typically ~~less~~lower in our International business than in the Americas.
Macroeconomic Indicators
Our advertising revenue for all of our segments is highly correlated to changes in gross domestic product (“GDP”) as advertising spending has historically trended in line with GDP, both domestically and internationally. According to the U.S. Department of Commerce, estimated U.S. GDP growth for 2011 was 1.7%. Internationally, our results are impacted by fluctuations in foreign currency exchange rates as well as the economic conditions in the foreign markets in which we have operations.
Executive Summary
The key highlights of our business for the year ended December 31, 2011 are summarized below:
Consolidated revenue increased $295.7 million during 2011 compared to 2010.
     ~~Our street furniture and transit display contracts,~~
CCME revenue increased $117.6 million during 2011 compared to 2010, due primarily to increased revenue resulting from our April 2011 addition of a complementary traffic operation to our existing traffic business, Total Traffic Network, through our acquisition of the ~~terms~~traffic business of ~~which range from three to 20 years, generally require~~Westwood One, Inc. (the “Traffic acquisition”). We also purchased a cloud-based music technology business in the first quarter of 2011 that has enabled us to ~~make upfront investments in property, plant~~accelerate the development and ~~equipment. These contracts may also include upfront lease payments and/or minimum annual guaranteed lease payments. We can give no assurance that~~growth of the next generation of our ~~cash flows from operations over the terms of these contracts will exceed the upfront and minimum required payments.~~iHeartRadio digital products.
~~THE COMPARISON OF YEAR ENDED DECEMBER 31, 2009 TO YEAR ENDED DECEMBER 31, 2008 IS AS FOLLOWS:~~

Period from Period from
July 31 January 1
Year ended through through Year ended
December December July 30, December 31,
31, 2009 31, 2008 2008 2008 %
(In thousands) Post-Merger Post-Merger Pre-Merger Combined Change
Revenue $ 5,551,909 $ 2,736,941 $ 3,951,742 $ 6,688,683 (17 %)
Operating expenses:
Direct operating expenses (excludes depreciation and amortization) 2,583,263 1,198,345 1,706,099 2,904,444 (11 %)
Selling, general and administrative expenses (excludes depreciation and amortization) 1,466,593 806,787 1,022,459 1,829,246 (20 %)
Depreciation and amortization 765,474 348,041 348,789 696,830 10 %
Corporate expenses (excludes depreciation and amortization) 253,964 102,276 125,669 227,945 11 %
Merger expenses — 68,085 87,684 155,769
Impairment charges 4,118,924 5,268,858 — 5,268,858
Other operating income (expense) — net (50,837 ) 13,205 14,827 28,032

Operating income (loss) (3,687,146 ) (5,042,246 ) 675,869 (4,366,377 )
Interest expense 1,500,866 715,768 213,210 928,978
Gain (loss) on marketable securities (13,371 ) (116,552 ) 34,262 (82,290 )
Equity in earnings (loss) of nonconsolidated affiliates (20,689 ) 5,804 94,215 100,019
Other income (expense) — net 679,716 131,505 (5,112 ) 126,393

Income (loss) before income taxes and discontinued operations (4,542,356 ) (5,737,257 ) 586,024 (5,151,233 )
Income tax benefit (expense):
Current 76,129 76,729 (27,280 ) 49,449
Deferred 417,191 619,894 (145,303 ) 474,591

Income tax benefit (expense) 493,320 696,623 (172,583 ) 524,040

Income (loss) before discontinued operations (4,049,036 ) (5,040,634 ) 413,441 (4,627,193 )
Income (loss) from discontinued operations, net — (1,845 ) 640,236 638,391

Consolidated net income (loss) (4,049,036 ) (5,042,479 ) 1,053,677 (3,988,802 )
Amount attributable to noncontrolling interest (14,950 ) (481 ) 17,152 16,671

Net income (loss) attributable to the Company $ (4,034,086 ) $ (5,041,998 ) $ 1,036,525 $ (4,005,473 )

44
~~Consolidated Results of Operations~~
~~Revenue~~
     Our consolidated revenue decreased $1.14 billion during 2009 compared to 2008. Revenue declined $557.5 million during 2009 compared to 2008 from our radio business associated with decreases in both local and national advertising. Our Americas outdoor revenue ~~also declined approximately $192.1~~increased $46.6 million ~~attributable~~during 2011 compared to ~~decreases~~2010, driven by revenue growth across our bulletin, airport and shelter displays, particularly digital displays. During 2011, we deployed 242 digital billboards in ~~bulletin, poster~~the United States, compared to 158 for 2010. We continue to see opportunities to invest in digital displays and ~~airport revenues associated with cancellations and non-renewals from larger national advertisers. Our~~ expect our digital display deployments will continue throughout 2012.
International outdoor revenue ~~declined approximately $399.2~~increased $159.3 million during 2011 compared to 2010, primarily as a result of ~~challenging advertising climates~~increased street furniture revenues and the effects of movements in foreign exchange. The weakening of the U.S. Dollar throughout 2011 has significantly contributed to revenue growth in our ~~markets~~International outdoor advertising business. The revenue increase attributable to movements in foreign exchange was $82.0 million for 2011.
•
Our indirect subsidiary, Clear Channel Communications, Inc. (“Clear Channel”), issued $1.75 billion aggregate principal amount of 9.0% Priority Guarantee Notes due 2021 during 2011, consisting of $1.0 billion aggregate principal amount issued in February (the “February 2011 Offering”) and an additional $750.0 million aggregate principal amount issued in June (the “June 2011 Offering”). Proceeds of the February 2011 Offering, along with available cash on hand, were used to repay $500.0 million of the senior secured credit facilities and $692.7 million of Clear Channel’s 6.25% senior notes at maturity in March 2011. Please refer to the “Refinancing Transactions” section within this MD&A for further discussion of the offerings, including the use of the proceeds of the June 2011 Offering.
During 2011, CC Finco, LLC (“CC Finco”), our indirect subsidiary, repurchased $80.0 million aggregate principal amount of Clear Channel’s outstanding 5.5% senior notes due 2014 for $57.1 million, including accrued interest, through open market purchases.
During 2011, CC Finco purchased 1,553,971 shares of our indirect subsidiary, Clear Channel Outdoor Holdings, Inc.’s (“CCOH”), Class A common stock through open market purchases for approximately $16.4 million.
During 2011, Clear Channel repaid its 4.4% senior notes at maturity for $140.2 million (net of $109.8 million principal amount held by and ~~approximately $118.5~~repaid to a subsidiary of Clear Channel), plus accrued interest.
The key highlights of our business for the year ended December 31, 2010 are summarized below:
Consolidated revenue increased $313.8 million during 2010 compared to 2009, primarily as a result of improved economic conditions.
CCME revenue increased $163.9 million during 2010 compared to 2009, primarily as a result of increased average rates per minute driven by increased demand for both national and local advertising.
Americas outdoor revenue increased $51.9 million during 2010 compared to 2009, driven by revenue growth across our advertising inventory, particularly digital.
International outdoor revenue increased $48.1 million during 2010 compared to 2009, primarily as a result of increased revenue from street furniture across most countries, partially offset by a decrease from movements in foreign ~~exchange.~~exchange of $10.3 million.
Our subsidiary, Clear Channel Investments, Inc. (“CC Investments”), repurchased $185.2 million aggregate principal amount of Clear Channel’s senior toggle notes for $125.0 million during 2010.
Clear Channel repaid $240.0 million upon the maturity of its 4.5% senior notes during 2010.
During 2010, Clear Channel repaid its remaining 7.65% senior notes upon maturity for $138.8 million with proceeds from its delayed draw term loan facility that was specifically designated for this purpose.
During 2010, we received $132.3 million in Federal income tax refunds.
On October 15, 2010, CCOH transferred its interest in its Branded Cities operations to its joint venture partner, The Ellman Companies. We recorded a loss of $25.3 million in “Other operating income (expense) – net” related to the transfer.
RESULTS OF OPERATIONS
Consolidated Results of Operations
The comparison of our historical results of operations for the year ended December 31, 2011 to the year ended December 31, 2010 is as follows:
$0,000,000,000 $0,000,000,000 $0,000,000,000
(In thousands)    Years Ended December 31,    %
Change
   2011    2010
Revenue
   $ 6,161,352          $ 5,865,685          5%
Operating expenses:

Direct operating expenses (excludes depreciation and amortization)
   2,504,036          2,381,647          5%
Selling, general and administrative expenses (excludes depreciation and amortization)
   1,617,258          1,570,212          3%
Corporate expenses (excludes depreciation and amortization)
   227,096          284,042          (20%)
Depreciation and amortization
   763,306          732,869          4%
Impairment charges
   7,614          15,364
Other operating income (expense) – net
   12,682          (16,710)





Operating income
   1,054,724          864,841
Interest expense
   1,466,246          1,533,341
Loss on marketable securities
   (4,827)         (6,490)
Equity in earnings of nonconsolidated affiliates
   26,958          5,702
Other income (expense) – net
   (4,616)         46,455





Loss before income taxes
   (394,007)         (622,833)
Income tax benefit
   125,978          159,980





Consolidated net loss
   (268,029)         (462,853)
Less amount attributable to noncontrolling interest
   34,065          16,236





Net loss attributable to the Company
   $ (302,094)         $ (479,089)





Consolidated Revenue
Our consolidated revenue increased $295.7 million during 2011 compared to 2010. Our CCME revenue increased $117.6 million, driven primarily by a $107.1 million increase due to our Traffic acquisition and higher advertising revenues from our digital radio services primarily as a result of improved rates and increased volume. Americas outdoor revenue increased $46.6 million, driven by increases in revenue across bulletin, airport and shelter displays, particularly digital displays, as a result of our continued deployment of new digital displays and increased rates. Our International outdoor revenue increased $159.3 million, primarily from increased street furniture revenue across our markets and an $82.0 million increase from the impact of movements in foreign exchange.
Consolidated Direct Operating Expenses
Direct operating expenses increased $122.4 million during 2011 compared to 2010. Our ~~consolidated~~CCME direct operating expenses ~~decreased approximately $321.2~~increased $40.7 million, ~~during 2009 compared~~primarily due to ~~2008. Our international outdoor business contributed $217.6 million~~an increase of ~~the overall decrease primarily from a decrease in site-lease expenses from lower revenue and cost savings from the restructuring program and $85.6~~$56.6 million related to ~~movements~~our Traffic acquisition offset by a decline in ~~foreign exchange. Our~~music license fees related to a settlement of prior year license fees. Americas outdoor direct operating expenses decreased $39.4 million driven by decreased site-lease expenses from lower revenue and cost savings from the restructuring program. Our radio broadcasting direct operating expenses decreased approximately $77.5increased $18.6 million, primarily ~~related~~due to ~~decreased compensation~~increased site lease expense associated with ~~cost savings from~~higher airport and bulletin revenue, particularly digital displays, and the ~~restructuring program.~~
~~SG&A Expenses~~
     ~~Our SG&A expenses decreased approximately $362.7 million during 2009 compared to 2008. SG&A~~increased deployment of digital displays. Direct operating expenses in our ~~radio business decreased approximately $249.1~~International outdoor segment increased $60.2 million, primarily from ~~decreases~~a $52.0 million increase from movements in foreign exchange.
Consolidated Selling, General and Administrative (“SG&A”) Expenses
SG&A expenses increased $47.0 million during 2011 compared to 2010. Our CCME SG&A expenses increased $17.1 million, primarily due to an increase of $41.0 million related to our Traffic acquisition, partially offset by declines in compensation expense. SG&A expenses increased $6.4 million in our Americas outdoor segment, which was primarily as a result of increased commission ~~and salary expenses and decreased marketing and promotional expenses.~~expense associated with the increase in revenue. Our ~~international~~International outdoor SG&A expenses ~~decreased approximately $71.3~~increased $39.8 million primarily ~~attributable~~due to ~~$23.7~~a $15.9 million increase from movements in foreign exchange, ~~and an overall decline in compensation and administrative expenses. Our Americas outdoor SG&A expenses decreased approximately $50.7~~a $6.5 million ~~primarily~~increase related to ~~a decline in commission expense.~~
~~Depreciation~~the unfavorable impact of litigation and ~~Amortization~~
     ~~Depreciation~~increased selling and ~~amortization expense increased $68.6 million in 2009 compared to 2008 primarily due to $139.9 million~~marketing expenses associated with the ~~fair value adjustments to the assets acquired~~increase in the merger. Partially offsetting the increase was a $43.2 million decrease in depreciation expense associated with the impairment of assets in our International outdoor segment during the fourth quarter of 2008 and a $20.6 million decrease from movements in foreign exchange.
revenue.
Corporate Expenses
Corporate expenses ~~increased $26.0~~decreased $56.9 million ~~in 2009~~during 2011 compared to ~~2008~~2010, primarily as a result of a ~~$29.3 million increase~~decrease in bonus expense related to our variable compensation plans and decreased expense related to employee benefits. Also contributing to the decline was a decrease in share-based compensation related to the ~~restructuring program~~shares tendered by Mark P. Mays to us in the third quarter of 2010 pursuant to a put option included in his amended employment agreement and the cancellation of certain of his options during 2011, and a ~~$23.5~~decrease in restructuring expenses. Partially offsetting the decreases was an increase in general corporate infrastructure support services and initiatives.
Depreciation and Amortization
Depreciation and amortization increased $30.4 million ~~accrual~~during 2011 compared to 2010, primarily due to increases in accelerated depreciation and amortization related to ~~an unfavorable outcome~~the removal of ~~litigation concerning a breach~~various structures, including the removal of ~~contract regarding internet advertising~~traditional billboards in connection with the continued deployment of digital billboards. Increases in depreciation and ~~our radio stations. The increase was partially offset by $33.3 million primarily~~amortization related to ~~reductions~~our Traffic acquisition of $7.5 million also contributed to the increase. In addition, movements in foreign exchange contributed an increase of $7.4 million during 2011.
Impairment Charges
We performed our annual impairment tests on October 1, 2011 and 2010 on our goodwill, FCC licenses, billboard permits, and other intangible assets and recorded impairment charges of $7.6 million and $15.4 million, respectively. Please see Note 2 to the ~~legal accrual as~~consolidated financial statements included in Item 8 of Part II of this Annual Report on Form 10-K for a ~~result~~further description of ~~litigation settled in~~ the ~~current year.~~
impairment charges.
Other Operating Income (Expense) — Net
     ~~The $50.8~~
Other operating income of $12.7 million ~~expense for 2009 is~~in 2011 primarily related to a ~~$42.0 million loss on the sale and exchange of radio stations and a $20.9 million loss~~gain on the sale of a tower and proceeds received from condemnations of bulletins.
Other operating expense of $16.7 million for 2010 primarily related to a $25.3 million loss recorded as a result of the transfer of our ~~taxi advertising business. The losses were~~subsidiary’s interest in its Branded Cities business, partially offset by a ~~$10.1~~$6.2 million gain on the sale of ~~Americas and International outdoor assets.~~
     ~~The $28.0 million income in 2008 consists of a gain of $3.3 million from the sale of sports broadcasting rights, a $7.0 million gain on the disposition of a~~ representation contract, a $4.0 million gain on the sale of property, plant and equipment, a $1.7 million gain on the sale of international street furniture and $9.6 million from the favorable settlement of a lawsuit.
contracts.
Interest Expense
Interest expense ~~increased $571.9~~decreased $67.1 million ~~in 2009~~during 2011 compared to ~~2008 primarily from an increase in outstanding indebtedness~~2010. Higher interest expense associated with the 2011 issuances of Clear Channel’s 9.0% Priority Guarantee Notes was offset by decreased expense on term loan facilities due to the ~~merger. Additionally, we borrowed approximately $1.6 billion under~~prepayment of $500.0 million of Clear Channel’s ~~$2.0 billion~~senior secured credit facilities made in connection with the February 2011 Offering and the paydown of Clear Channel’s receivables-based credit facility made prior to, and in connection with, the June 2011 Offering. Also contributing to the decline in interest expense was the timing of repurchases and repayments at maturity of certain of Clear Channel’s senior notes. Clear Channel’s weighted average cost of debt during ~~the first quarter of 2009 to improve our liquidity position in light of the uncertain economic environment.~~
both 2011 and 2010 was 6.1%.
~~Gain (Loss)~~Loss on Marketable Securities
The loss on marketable securities of ~~$13.4~~$4.8 million ~~in 2009 relates~~and $6.5 million during 2011 and 2010, respectively, primarily related to the impairment of Independent News & Media PLC (“INM”). The fair value of INM was below cost for an extended period of time. As a result, we considered the guidance in ASC 320-10-S99 and reviewed the length of the time and the extent to which the market value was less than cost, the financial condition and the near-term prospects of the issuer. After this assessment, we concluded that the impairment at each date was other than temporary and recorded non-cash impairment charges to our investment in INM, as noted above.
Equity in Earnings of Nonconsolidated Affiliates
Equity in earnings of nonconsolidated affiliates of $5.7 million for 2010 included an $8.3 million impairment related to an equity investment in our International outdoor segment.
Other Income (Expense) — Net
Other expense of $4.6 million for 2011 primarily related to the accelerated expensing of $5.7 million of loan fees upon the prepayment of $500.0 million of Clear Channel’s senior secured credit facilities in connection with the February 2011 Offering described elsewhere in this MD&A, partially offset by an aggregate gain of $4.3 million on the repurchase of Clear Channel’s 5.5% senior notes due 2014.
Other income of $46.5 million in 2010 primarily related to an aggregate gain of $60.3 million on the repurchase of Clear Channel’s senior toggle notes partially offset by $12.8 million in foreign exchange transaction losses on short-term intercompany accounts. Please refer to the “Debt Repurchases, Maturities and Other” section within this MD&A for additional discussion of the 2011 and 2010 repurchases.
Income Tax Benefit
The effective tax rate for the year ended December 31, 2011 was 32.0% as compared to 25.7% for the year ended December 31, 2011. The effective tax rate for 2011 was favorably impacted by our settlement of U.S. Federal and state tax examinations during the year. Pursuant to the settlements, we recorded a reduction to income tax expense of approximately $16.3 million to reflect the net tax benefits of the settlements. This benefit was partially offset by additional tax recorded during 2011 related to the write-off of deferred tax assets associated with the vesting of certain equity awards and our inability to benefit from certain tax loss carryforwards in foreign jurisdictions.
The effective tax rate for the year ended December 31, 2010 was 25.7% as compared to 10.9% for the year ended December 31, 2009. The effective tax rate for 2010 was impacted by our inability to benefit from tax losses in certain foreign jurisdictions due to the uncertainty of the ability to utilize those losses in future years. In addition, we recorded a valuation allowance of $13.6 million in 2010 against deferred tax assets related to capital allowances in foreign jurisdictions due to the uncertainty of the ability to realize those assets in future periods.
CCME Results of Operations
Our CCME operating results were as follows:
(In thousands)    Years Ended December 31,
   2011    2010    % Change
Revenue
   $ 2,986,828       $ 2,869,224       4%
Direct operating expenses
   849,265       808,592       5%
SG&A expenses
   980,960       963,853       2%
Depreciation and amortization
   268,245       256,673       5%





Operating income
   $ 888,358       $ 840,106       6%





CCME revenue increased $117.6 million during 2011 compared to 2010, primarily driven by a $107.1 million increase due to our Traffic acquisition. We experienced increases in our digital radio services revenue as a result of improved rates, increased volume and revenues related to our iHeartRadio Music Festival. Offsetting the increases were slight declines in local and national advertising across various markets and advertising categories including telecommunication, travel and tourism and, most notably, political.
Direct operating expenses increased $40.7 million during 2011 compared to 2010, primarily due to an increase of $56.6 million from our Traffic acquisition and an increase in expenses related to our digital initiatives, including our iHeartRadio Player and iHeartRadio Music Festival. These increases were partially offset by a $19.0 million decline in music license fees related to a settlement of 2011 and 2010 license fees. In addition, included in our 2011 results are restructuring expenses of $8.9 million, which represents a decline of $4.8 million compared to 2010. SG&A expenses increased $17.1 million, primarily due to an increase of $41.0 million related to our Traffic acquisition, which was partially offset by a decline of $21.9 million in compensation expense primarily related to reduced salaries and commission.
Depreciation and amortization increased $11.6 million, primarily due to our Traffic acquisition.
Americas Outdoor Advertising Results of Operations
Our Americas outdoor operating results were as follows:
$0,000,000,00 $0,000,000,00 $0,000,000,00
(In thousands)    Years Ended December 31,
   2011    2010    % Change
Revenue
   $ 1,336,592         $ 1,290,014         4%
Direct operating expenses
   607,210         588,592         3%
SG&A expenses
   225,217         218,776         3%
Depreciation and amortization
   222,554         209,127         6%





Operating income
   $ 281,611         $ 273,519         3%





Our Americas outdoor revenue increased $46.6 million during 2011 compared to 2010, driven primarily by revenue increases from bulletin, airport and shelter displays, and particularly digital displays. Bulletin revenues increased primarily due to digital growth driven by the increased number of digital displays, in addition to increased rates. Airport and shelter revenues increased primarily on higher average rates.
Direct operating expenses increased $18.6 million, primarily due to increased site lease expense associated with higher airport and bulletin revenue, particularly digital displays, and the increased deployment of digital displays. SG&A expenses increased $6.4 million, primarily as a result of increased commission expense associated with the increase in revenue.
Depreciation and amortization increased $13.4 million, primarily due to increases in accelerated depreciation and amortization related to the removal of various structures, including the removal of traditional billboards in connection with the continued deployment of digital billboards.
International Outdoor Advertising Results of Operations
Our International outdoor operating results were as follows:
$0,000,000,00 $0,000,000,00 $0,000,000,00
(In thousands)    Years Ended December 31,
   2011    2010    % Change
Revenue
   $ 1,667,282         $ 1,507,980         11%
Direct operating expenses
   1,031,591         971,380         6%
SG&A expenses
   315,655         275,880         14%
Depreciation and amortization
   208,410         204,461         2%





Operating income
   $ 111,626         $ 56,259         98%





International outdoor revenue increased $159.3 million during 2011 compared to 2010, primarily as a result of increased street furniture revenue across most of our markets. Improved yields and additional displays contributed to the revenue increase in China, and improved yields in combination with a new contract drove the revenue increase in Sweden. The increases from street furniture were partially offset by declines in billboard revenue across several of our markets, primarily Italy and the U.K. Foreign exchange movements resulted in an $82.0 million increase in revenue.
Direct operating expenses increased $60.2 million, attributable to a $52.0 million increase from movements in foreign exchange. In addition, increased site lease expense of $10.7 million associated with the increase in revenue was partially offset by an $8.8 million decline in restructuring expenses. SG&A expenses increased $39.8 million primarily due to a $15.9 million increase from movements in foreign exchange, a $6.5 million increase related to the unfavorable impact of litigation and higher selling expenses associated with the increase in revenue.
Consolidated Results of Operations
The comparison of our historical results of operations for the year ended December 31, 2010 to the year ended December 31, 2009 is as follows:
$0,000,000,00 $0,000,000,00 $0,000,000,00
(In thousands)    Years Ended December 31,    %
Change
   2010    2009
Revenue
   $ 5,865,685          $ 5,551,909          6%
Operating expenses:

Direct operating expenses (excludes depreciation and amortization)
   2,381,647          2,529,454          (6%)
Selling, general and administrative expenses (excludes depreciation and amortization)
   1,570,212          1,520,402          3%
Corporate expenses (excludes depreciation and amortization)
   284,042          253,964          12%
Depreciation and amortization
   732,869          765,474          (4%)
Impairment charges
   15,364          4,118,924
Other operating expense – net
   (16,710)         (50,837)





Operating income (loss)
   864,841          (3,687,146)
Interest expense
   1,533,341          1,500,866
Loss on marketable securities
   (6,490)         (13,371)
Equity in earnings (loss) of nonconsolidated affiliates
   5,702          (20,689)
Other income– net
   46,455          679,716
Loss before income taxes
   (622,833)         (4,542,356)





Income tax benefit
   159,980          493,320
Consolidated net loss
   (462,853)         (4,049,036)
Less amount attributable to noncontrolling interest
   16,236          (14,950)





Net loss attributable to the Company
   $ (479,089)         $ (4,034,086)





Consolidated Revenue
Consolidated revenue increased $313.8 million during 2010 compared to 2009. Our CCME revenue increased $163.9 million driven by increases in both national and local advertising from average rates per minute. Americas outdoor revenue increased $51.9 million, driven by revenue increases across most of our advertising inventory, particularly digital. Our International outdoor revenue increased $48.1 million, primarily due to revenue growth from street furniture across most countries, partially offset by a $10.3 million decrease from the effects of movements in foreign exchange. Other revenue increased $61.0 million, primarily from stronger national advertising in our media representation business.
Consolidated Direct Operating Expenses
Direct operating expenses decreased $147.8 million during 2010 compared to 2009. Our CCME direct operating expenses decreased $77.3 million, primarily from a $29.9 million decline in expenses incurred in connection with our restructuring program from which cost savings resulted in declines of $26.7 million and $11.0 million in programming expenses and compensation expenses, respectively. Americas outdoor direct operating expenses decreased $19.5 million, primarily as a result of the disposition of our taxi advertising business (as described in the “Disposition of Taxi Business” section within this MD&A), partially offset by an increase in site lease expenses associated with the increase in revenue. Direct operating expenses in our International outdoor segment decreased $45.6 million, primarily as a result of a $20.4 million decline in expenses incurred in connection with our restructuring program in addition to decreased site lease expenses associated with cost savings from our restructuring program, and included an $8.2 million decrease from movements in foreign exchange.
Consolidated SG&A Expenses
SG&A expenses increased $49.8 million during 2010 compared to 2009. Our CCME SG&A expenses increased $45.5 million, primarily as a result of increased bonus and commission expense associated with the increase in revenue. SG&A expenses increased $16.6 million in our Americas outdoor segment, primarily as a result of increased selling and marketing costs associated with the increase in revenue in addition to the unfavorable impact of litigation. Our International outdoor SG&A expenses decreased $6.3 million, primarily as a result of a decrease in business tax related to a change in French tax law, and included a $2.3 million decrease from movements in foreign exchange.
Corporate Expenses
Corporate expenses increased $30.1 million during 2010 compared to 2009, primarily due to a $49.9 million increase in bonus expense from improved operating performance and a $53.8 million increase primarily related to headcount from centralization efforts and the expansion of corporate capabilities. Partially offsetting the 2010 increase was $23.5 million related to an unfavorable outcome of litigation recorded in 2009, a $22.6 million decrease in expenses during 2010 associated with our restructuring program and an $18.6 million decrease related to various corporate accruals.
Depreciation and Amortization
Depreciation and amortization decreased $32.6 million during 2010 compared to 2009, primarily as a result of assets in our International outdoor segment that became fully amortized during 2009. Additionally, 2009 included $8.0 million of additional amortization expense associated with the finalization of purchase price allocations to the acquired intangible assets in our CCME segment.
Impairment Charges
We performed our annual impairment test on October 1, 2010 on our goodwill, FCC licenses, billboard permits, and other intangible assets and recorded impairment charges of $15.4 million. We also performed impairment tests on our goodwill, FCC licenses, billboard permits, and other intangible assets in 2009 and recorded impairment charges of $4.1 billion. Please see the notes to the consolidated financial statements included in Item 8 of Part II of this Annual Report on Form 10-K for a further description of the impairment charges.
A rollforward of our goodwill balance from December 31, 2008 through December 31, 2009 by reporting unit is as follows:
$ 000,00000 $ 000,00000 $ 000,00000 $ 000,00000 $ 000,00000 $ 000,00000 $ 000,00000
(In thousands)    Balances as of
December 31,
2008    Acquisitions    Dispositions    Foreign
Currency    Impairment    Adjustments    Balances as of
December 31,
2009
United States Radio Markets
     $ 5,579,190         $ 4,518         $ (62,410)         $ —         $ (2,420,897)         $ 46,468       $ 3,146,869
United States Outdoor Markets
   824,730       2,250       —       —       (324,892)       69,844       571,932
Switzerland
   56,885       —       —       1,276       (7,827)       —       50,334
Ireland
   14,285       —       —       223       (12,591)       —       1,917
Baltics
   10,629       —       —       —       (10,629)       —       —
Americas Outdoor – Mexico
   8,729       —       —       7,440       (10,085)       (442)       5,642
Americas Outdoor – Chile
   3,964       —       —       4,417       (8,381)       —       —
Americas Outdoor – Peru
   45,284       —       —       —       (37,609)       —       7,675
Americas Outdoor – Brazil
   4,971       —       —       4,436       (9,407)       —       —
Americas Outdoor – Canada
   4,920       —       —       —       —       (4,920)       —
All Others – International Outdoor
   205,744       110       —       15,913       (42,717)       45,042       224,092
Other
   331,290       —       (2,276)       —       (211,988)       (482)       116,544














     $ 7,090,621         $ 6,878         $ (64,686)         $ 33,705         $ (3,097,023)         $ 155,510         $ 4,125,005














Other Operating Expense - Net
Other operating expense of $16.7 million for 2010 primarily related to a $25.3 million loss recorded as a result of the transfer of our subsidiary’s interest in its Branded Cities business, partially offset by a $6.2 million gain on the sale of representation contracts.
Other operating expense of $50.8 million for 2009 primarily related to a $42.0 million loss on the sale and exchange of radio stations and a $20.9 million loss on the sale of our taxi advertising business. The losses were partially offset by a $10.1 million gain on the sale of Americas and International outdoor assets.
Interest Expense
Interest expense increased $32.5 million during 2010 compared to 2009, primarily as a result of the issuance of $2.5 billion in subsidiary senior notes in December 2009. This increase was partially offset by decreased interest expense due to maturities of Clear Channel’s 4.5% senior notes due January 2010, repurchases of Clear Channel’s senior toggle notes during the first quarter of 2010, repurchases of Clear Channel’s senior notes during the fourth quarter of 2009 and prepayment of $2.0 billion of term loans in December 2009. Clear Channel’s weighted average cost of debt for 2010 and 2009 was 6.1% and 5.8%, respectively.
Loss on Marketable Securities
The loss on marketable securities of $6.5 million and $13.4 million in 2010 and 2009, respectively, related primarily to the impairment of INM. The fair value of INM was below cost for an extended period of time. As a result, we considered the guidance in ASC 320-10-S99 and reviewed the length of the time and the extent to which the market was less than cost and the financial condition and near-term prospects of the issuer. After this assessment, we concluded that the
45
impairment at each date was other than temporary and recorded ~~an $11.3 million~~ non-cash impairment ~~charge~~charges to our investment in ~~INM. In addition, we recognized a $1.8 million loss on the third quarter sale of our remaining 8.6% interest in Grupo ACIR Communicaciones (“Grupo ACIR”).~~
     ~~During the fourth quarter of 2008, we recorded a non-cash impairment charge to~~ INM and Sirius XM Radio. The fair value of these available-for-sale securities was below their cost each month subsequent to the closing of the merger. After considering the guidance in ASC 320-10-S99, we concluded that the impairment was other than temporary and recorded a $116.6 million impairment charge to our investments in INM and Sirius XM Radio. This loss was partially offset by a net gain of $27.0 million recorded in the second quarter of 2008 on the unwinding of our secured forward exchange contracts and the sale of our American Tower Corporation (“AMT”) shares.
as noted above.
Equity in Earnings (Loss) of ~~Non-consolidated~~Nonconsolidated Affiliates
Equity in earnings of nonconsolidated affiliates in 2010 included an $8.3 million impairment of an equity investment in our International outdoor segment.
Equity in loss of nonconsolidated affiliates ~~of $20.7 million in~~for 2009 ~~is primarily related to~~included a $22.9 million impairment of equity investments in our International outdoor segment in addition to a $4.0 million loss on the sale of a portion of our investment in Grupo ~~ACIR. Subsequent~~ACIR Communicaciones (“Grupo ACIR”).
Other Income – Net
Other income of $46.5 million in 2010 primarily related to ~~the January 2009 sale~~an aggregate gain of ~~57% of our remaining 20% interest in Grupo ACIR, we no longer accounted for our investment as an equity method investment and began accounting for it at cost in accordance with ASC 323.~~
     ~~Included in equity in earnings of nonconsolidated affiliates in 2008 is a $75.6~~$60.3 million ~~gain~~ on the ~~sale~~repurchase of Clear Channel’s ~~50% interest in Clear Channel Independent,~~senior toggle notes partially offset by a ~~South African outdoor advertising company.~~
$12.8 million foreign exchange loss on the translation of short-term intercompany notes. Please refer to the “~~Other Income (Expense) — Net~~Debt Repurchases, Maturities and Other”
section within this MD&A for additional discussion of the repurchase.
Other income of $679.7 million in 2009 relates to an aggregate gain of $368.6 million on the repurchases of certain of Clear Channel’s senior notes and an aggregate gain of $373.7 million on the repurchases of certain of Clear Channel’s senior toggle notes and senior cash pay notes. The gains on extinguishment of debt were partially offset by a $29.3 million loss related to loan costs associated with the $2.0 billion retirement of certain of Clear Channel’s outstanding senior secured debt. Please refer to the “~~Sources~~Debt Repurchases, Maturities and ~~Uses~~Other”section within this MD&A for additional discussion of the repurchases and debt retirement.
     Other income of $126.4 million in 2008 relates to an aggregate net gain of $94.7 million on the tender of certain of Clear Channel’s outstanding notes, a $29.3 million foreign exchange gain on translating short-term intercompany notes and an $8.0 million dividend received from a cost investment, partially offset by a $4.7 million impairment of our investment in a radio partnership.
Income ~~Taxes~~Tax Benefit
     Current tax benefits for 2009 increased $26.7 million compared to the full year for 2008 primarily due to our ability to carry back certain net operating losses to prior years. On November 6, 2009, the Worker, Homeownership, and Business Assistance Act of 2009 (the “Act”) was enacted into law. The Act amended Section 172 of the Internal Revenue Code to allow net operating losses realized in a tax year ended after December 31, 2007 and beginning before January 1, 2010 to be carried back for up to five years (such losses were previously limited to a two-year carryback). This change will allow us to carryback fiscal 2009 taxable losses of approximately $361 million, based on our projections of projected taxable losses eligible for carryback, to prior years and receive refunds of previously paid Federal income taxes of approximately $126.4 million. The ultimate amount of such refunds realized from net operating loss carryback is dependent on our actual taxable losses for fiscal 2009, which may vary from our current expectations.
The effective tax rate for the year ended December 31, ~~2009~~2010 was ~~10.9%~~25.7% as compared to ~~10.2%~~10.9% for the year ended December 31, ~~2008.~~ 2009. The effective tax rate for 2010 was impacted by our inability to benefit from tax losses in certain foreign jurisdictions due to the uncertainty of the ability to utilize those losses in future years. In addition, we recorded a valuation allowance of $13.6 million in 2010 against deferred tax assets related to capital allowances in foreign jurisdictions due to the uncertainty of the ability to realize those assets in future periods.
The effective tax rate for 2009 was impacted by the goodwill impairment charges, which are not deductible for tax ~~purposes. In addition,~~purposes, along with our inability to benefit from tax losses in certain foreign jurisdictions as ~~noted above, due~~discussed above.
CCME Results of Operations
Our CCME operating results were as follows:
(In thousands)    Years Ended December 31,
   2010    2009    % Change
Revenue
   $ 2,869,224       $ 2,705,367       6%
Direct operating expenses
   808,592       885,870       (9%)
SG&A expenses
   963,853       918,397       5%
Depreciation and amortization
   256,673       261,246       (2%)





Operating income
   $ 840,106       $ 639,854       31%





CCME revenue increased $163.9 million during 2010 compared to ~~the law change on November 6,~~ 2009, ~~that allows us~~driven primarily by a $79.5 million increase in national advertising and a $51.0 million increase in local advertising. Average rates per minute increased during 2010 compared to ~~carryback a portion of our~~ 2009 net operating losses back five years and based on our expectations as to future taxable income from deferred tax liabilities that reverse in the relevant carryforward period for those net operating losses that cannot be carried back, we believe that the realization of the deferred tax assets associated with the remaining net operating loss carryforwards and other deferred tax assets is more likely than not and therefore no valuation allowance is needed for the majority of our deferred tax assets.
     The 2008 effective tax rate was impacted by the impairment charge that resulted in a $5.3 billion decrease in “Income (loss) before income taxes and discontinued operations” and tax benefits of approximately $648.2 million. Partially offsetting this decrease to the effective rate were tax benefits recorded as a result of ~~the release~~improved economic conditions. Increases occurred across various advertising categories including automotive, political, food and beverage and healthcare.
Direct operating expenses decreased $77.3 million during 2010 compared to 2009, primarily from a $29.9 million decline in expenses incurred in connection with our restructuring program. Cost savings from our restructuring program resulted in declines of ~~valuation allowances on the capital loss carryforwards that were used to offset the taxable gain~~$26.7 million and $11.0 million in programming expenses and compensation expenses, respectively. Direct operating expenses declined further from the ~~disposition~~non-renewals of sports contracts, offset by the impact of $8.0 million associated with the finalization of purchase accounting during 2009. SG&A expenses increased $45.5 million, primarily as a result of a $26.6 million increase in bonus and commission expense associated with the increase in revenue in addition to a $24.1 million increase in selling and marketing expenses.
Depreciation and amortization decreased $4.6 million during 2010 compared to 2009. The 2009 results included $8.0 million of additional amortization expense associated with the finalization of purchase price allocations to the acquired intangible assets.
Americas Outdoor Advertising Results of Operations
Disposition of Taxi Business
On December 31, 2009, our subsidiary, Clear Channel Outdoor, Inc. (“CCOI”), disposed of Clear ~~Channel’s investment in AMT and Grupo ACIR. Additionally, Clear~~ Channel ~~sold its 50% interest in Clear Channel~~
46
Independent in 2008, which was structured as a tax free disposition. The sale resulted in a gain of $75.6 million with no current tax expense. Further, in 2008 valuation allowances were recorded on certain net operating losses generated during the period that were not able to be carried back to prior years.
Taxi Media, LLC (“Taxis”), our taxi advertising business. For the year ended December 31, 2009, ~~deferred tax benefits decreased $57.4~~Taxis contributed $41.5 million in revenue, $39.8 million in direct operating expenses and $10.5 million in SG&A expenses.
Our Americas outdoor operating results were as follows:
(In thousands)    Years Ended December 31,
   2010    2009    % Change
Revenue
   $ 1,290,014       $ 1,238,171       4%
Direct operating expenses
   588,592       608,078       (3%)
SG&A expenses
   218,776       202,196       8%
Depreciation and amortization
   209,127       210,280       (1%)





Operating income
   $ 273,519       $ 217,617       26%





Americas outdoor revenue increased $51.9 million during 2010 compared to ~~2008 primarily due to larger impairment charges recorded in 2008 related to the tax deductible intangibles. This decrease was partially offset by increases in deferred tax expense in~~ 2009 as a result of revenue growth across most of our advertising inventory, particularly digital. The increase was driven by increases in both occupancy and rate. Partially offsetting the ~~deferral of certain discharge of indebtedness income, for income tax purposes, resulting from~~revenue increase was the ~~reacquisition of business indebtedness, as provided by the American Recovery and Reinvestment Act of 2009 signed into law on February 17, 2009.~~
~~Income (Loss) from Discontinued Operations~~
     ~~Income from discontinued operations of $638.4 million recorded during 2008 primarily relates to a gain of $631.9 million, net of tax,~~decrease in revenue related to the sale of ~~Clear Channel’s television business~~Taxis.
Direct operating expenses decreased $19.5 million during 2010 compared to 2009. The decline in direct operating expenses was due to the disposition of Taxis, partially offset by a $20.2 million increase in site-lease expenses associated with the increase in revenue. SG&A expenses increased $16.6 million as a result of a $6.3 million increase primarily related to the unfavorable impact of litigation, a $4.7 million increase in consulting costs and a $6.2 million increase primarily due to bonus and commission expenses associated with the ~~sale~~increase in revenue, partially offset by the disposition of ~~radio stations.~~
~~Radio Broadcasting~~Taxis.
International Outdoor Advertising Results of Operations
Our ~~radio broadcasting~~International outdoor operating results were as follows:

Years Ended December 31,
2009 2008
(In thousands) Post-Merger Combined % Change
Revenue $ 2,736,404 $ 3,293,874 (17 %)
Direct operating expenses 901,799 979,324 (8 %)
SG&A expenses 933,505 1,182,607 (21 %)
Depreciation and amortization 261,246 152,822 71 %

Operating income $ 639,854 $ 979,121 (35 %)

     ~~Our radio broadcasting~~
(In thousands)    Years Ended December 31,
   2010    2009    % Change
Revenue
     $   1,507,980            $   1,459,853          3%
Direct operating expenses
   971,380          1,017,005          (4%)
SG&A expenses
   275,880          282,208          (2%)
Depreciation and amortization
   204,461          229,367          (11%)





Operating income (loss)
     $   56,259            $   (68,727)         182%





International outdoor revenue ~~declined approximately $557.5~~increased $48.1 million ~~in 2009~~during 2010 compared to 2008, driven by decreases in local and national revenues of $388.5 million and $115.1 million, respectively. Local and national revenue were down as a result of an overall weakness in advertising and the economy. The decline in advertising demand led to declines in total minutes sold and yield per minute in 2009, ~~compared to 2008. Our radio revenue experienced declines across markets and advertising categories.~~
     ~~Direct operating expenses declined approximately $77.5 million in 2009 compared to 2008. Compensation expense declined approximately $55.0 million~~ primarily as a result of ~~cost savings~~revenue growth from the restructuring program. We also reclassified $34.2 million of direct operating expenses to amortization expense related to a purchase accounting adjustment to talent contracts. Non-renewals of sports contracts resulted in a decrease of $9.1 million while non-cash compensation decreased $13.5 million as a result of accelerated expense taken in 2008 related to options that vested in the merger. The declines werestreet furniture across most countries, partially offset by ~~an increase of approximately $9.4 million~~the exit from the businesses in ~~programming expenses primarily related to new contract talent payments in our national syndication business~~Greece and ~~an increase of $34.1 million in expense primarily associated with severance accruals related to the restructuring program. SG&A~~India. Foreign exchange movements negatively impacted revenue by $10.3 million.
Direct operating expenses decreased ~~approximately $249.1~~$45.6 million ~~in 2009~~during 2010 compared to 2008, primarily from a $43.3 million decline in marketing and promotional expenses, a $122.9 million decline in commission and compensation expenses related to the decline in revenue and cost savings from the restructuring program, and an $18.3 million decline in bad debt expense. Non-cash compensation decreased $16.0 million as a result of accelerated expense taken in 2008 on options that vested in the merger.
     ~~Depreciation and amortization increased approximately $108.4 million in~~ 2009, ~~compared to 2008,~~ primarily as a result of ~~additional amortization associated~~a $20.4 million decrease in expenses incurred in connection with ~~the purchase accounting adjustments to intangible assets acquired in the merger.~~
47
~~Americas Outdoor Advertising Results of Operations~~
     ~~Our Americas outdoor advertising operating results were as follows:~~

Years Ended December 31,
2009 2008
(In thousands) Post-Merger Combined % Change
Revenue $ 1,238,171 $ 1,430,258 (13 %)
Direct operating expenses 608,078 647,526 (6 %)
SG&A expenses 202,196 252,889 (20 %)
Depreciation and amortization 210,280 207,633 1 %

Operating income $ 217,617 $ 322,210 (32 %)

     ~~Our Americas revenue decreased approximately $192.1~~our restructuring program and a $15.6 million in 2009 compared to 2008 primarily driven by declines in bulletin, poster and transit revenues due to cancellations and non-renewals from larger national advertisers resulting from the overall weakness in advertising and the economy. The decline ~~in bulletin, poster and transit revenues was also impacted by a decline in rate compared to 2008.~~
     ~~Our Americas direct operating expenses decreased $39.4 million in 2009 compared to 2008, primarily from a $25.3 million decrease~~ in site-lease expenses associated with cost savings from ~~the~~our restructuring ~~program and the decline in revenues. This decrease was partially offset by $5.7 million related~~program. Also contributing to the ~~restructuring program. Our SG&A~~decreased expenses ~~decreased $50.7 million in 2009 compared to 2008, primarily from a $26.0 million decline in compensation expense associated with~~was the ~~decline in revenue and cost savings~~exit from the ~~restructuring program~~businesses in Greece and ~~a $16.2 million decline in bad debt expense as a result of accounts collected~~India and an ~~improvement in the agings of our accounts receivable during the current year.~~
~~International Outdoor Advertising Results of Operations~~
     ~~Our international operating results were as follows:~~

Years Ended December 31,
2009 2008
(In thousands) Post-Merger Combined % Change
Revenue $ 1,459,853 $ 1,859,029 (21 %)
Direct operating expenses 1,017,005 1,234,610 (18 %)
SG&A expenses 282,208 353,481 (20 %)
Depreciation and amortization 229,367 264,717 (13 %)

Operating income (loss) $ (68,727 ) $ 6,221 (1205 %)

     Our International revenue decreased approximately $399.2 million in 2009 compared to 2008, with approximately $118.5 million from movements in foreign exchange. The revenue decline occurred across most countries, with the most significant decline in France of $75.5 million due to weak advertising demand. Other countries with significant declines include the U.K. and Italy, which declined $30.4 million and $28.3 million, respectively, due to weak advertising markets.
     Direct operating expenses decreased $217.6 million in 2009 compared to 2008, in part due to a decrease of $85.6 million from movements in foreign exchange. The remaining decrease in direct operating expenses was primarily attributable to a $146.4 million decline in site lease expenses partially attributable to cost savings from the restructuring program. The decrease in direct operating expenses was partially offset by $12.8 million related to the restructuring program and the decline in revenue. SG&A expenses decreased $71.3 million in 2009 compared to 2008, primarily from $23.7 million related to movements in foreign exchange, $34.3 million related to a decline in compensation expense and a $25.8 million decrease in administrative expenses, both partially attributable to cost savings from the restructuring program and the decline in revenue.
     Depreciation and amortization decreased $35.4 million in 2009 compared to 2008, primarily related to a $43.2 million decrease in depreciation expense associated with the impairment of assets during the fourth quarter of 2008 and a $20.6$8.2 million decrease from movements in foreign exchange. ~~The~~SG&A expenses decreased $6.3 million during 2010 compared to 2009, primarily as a result of a $5.4 million decrease ~~was partially offset by $31.9 million~~in business tax related to ~~additional~~a change in French tax law and a $2.3 million decrease from movements in foreign exchange.
Depreciation and amortization ~~associated with the purchase accounting adjustments~~decreased $24.9 million during 2010 compared to ~~the acquired intangible assets.~~
48
2009 primarily as a result of assets that became fully amortized during 2009.
Reconciliation of Segment Operating Income (Loss)

Years Ended December 31,
2009 2008
(In thousands) Post-Merger Combined
Radio Broadcasting $ 639,854 $ 979,121
Americas Outdoor Advertising 217,617 322,210
International Outdoor Advertising (68,727 ) 6,221
Other (43,963 ) (31,419 )
Impairment charges (4,118,924 ) (5,268,858 )
Other operating income (expense) — net (50,837 ) 28,032
Merger expenses — (155,769 )
Corporate (262,166 ) (245,915 )

Consolidated operating income (loss) $ (3,687,146 ) $ (4,366,377 )

~~THE COMPARISON OF YEAR ENDED DECEMBER 31, 2008 TO YEAR ENDED DECEMBER 31, 2007 IS AS FOLLOWS:~~

Years Ended December 31,
2008 2007
(In thousands) Combined Pre-Merger % Change
Revenue $ 6,688,683 $ 6,921,202 (3 %)
Operating expenses:
Direct operating expenses (excludes depreciation and amortization) 2,904,444 2,733,004 6 %
Selling, general and administrative expenses (excludes depreciation and amortization) 1,829,246 1,761,939 4 %
Depreciation and amortization 696,830 566,627 23 %
Corporate expenses (excludes depreciation and amortization) 227,945 181,504 26 %
Merger expenses 155,769 6,762
Impairment charges 5,268,858 —
Other operating income — net 28,032 14,113

Operating income (loss) (4,366,377 ) 1,685,479
Interest expense 928,978 451,870
Gain (loss) on marketable securities (82,290 ) 6,742
Equity in earnings of nonconsolidated affiliates 100,019 35,176
Other income — net 126,393 5,326

Income (loss) before income taxes and discontinued operations (5,151,233 ) 1,280,853
Income tax benefit (expense):
Current 49,449 (252,910 )
Deferred 474,591 (188,238 )

Income tax benefit (expense) 524,040 (441,148 )

Income (loss) before discontinued operations (4,627,193 ) 839,705
Income from discontinued operations, net 638,391 145,833

Consolidated net income (loss) (3,988,802 ) 985,538
Amount attributable to noncontrolling interest 16,671 47,031

Net income (loss) attributable to the Company $ (4,005,473 ) $ 938,507

49
~~Consolidated Results of Operations~~
~~Revenue~~
     ~~Our consolidated revenue decreased $232.5 million during 2008 compared~~ to 2007. Revenue growth during the first nine months of 2008 was offset by a decline of $254.0 million in the fourth quarter. Revenue declined $264.7 million during 2008 compared to 2007 from our radio business associated with decreases in both local and national advertising. Our Americas outdoor revenue also declined approximately $54.8 million attributable to decreases in poster and bulletin revenues associated with cancellations and non-renewals from major national advertisers. The declines were partially offset by an increase from our international outdoor revenue of approximately $62.3 million, with roughly $60.4 million from movements in foreign exchange.
~~Direct Operating Expenses~~
     Our consolidated direct operating expenses increased approximately $171.4 million during 2008 compared to 2007. Our international outdoor business contributed $90.3 million to the increase primarily from an increase in site-lease expenses and $39.5 million related to movements in foreign exchange. Our Americas outdoor business contributed $57.0 million to the increase primarily from new contracts. These increases were partially offset by a decline in direct operating expenses in our radio segment of approximately $3.6 million related to a decline in programming expenses.
~~SG&A Expenses~~
     Our SG&A expenses increased approximately $67.3 million during 2008 compared to 2007. Approximately $48.3 million of this increase occurred during the fourth quarter primarily as a result of an increase in severance. Our international outdoor business contributed approximately $41.9 million to the increase primarily from movements in foreign exchange of $11.2 million and an increase in severance in 2008 associated with the restructuring program of approximately $20.1 million. Our Americas outdoor SG&A expenses increased approximately $26.4 million largely from increased bad debt expense of $15.5 million and an increase in severance in 2008 associated with the restructuring program of $4.5 million. SG&A expenses in our radio business decreased approximately $7.5 million primarily from reduced marketing and promotional expenses and a decline in commissions associated with the decline in revenues, partially offset by increase in severance in 2008 associated with the restructuring program of approximately $32.6 million.
~~Depreciation and Amortization~~
     Depreciation and amortization expense increased $130.2 million in 2008 compared to 2007 primarily due to $86.0 million in additional depreciation and amortization associated with the preliminary purchase accounting adjustments to the acquired assets, $29.3 million of accelerated depreciation in our Americas and International outdoor segments from billboards that were removed and approximately $11.3 million related to impaired advertising display contracts in our international segment.
~~Corporate Expenses~~
     The increase in corporate expenses of $46.4 million in 2008 compared to 2007 primarily relates to a $16.7 million increase in non-cash compensation related to awards that vested at closing of the merger, a $6.3 million management fee to the Sponsors in connection with the management and advisory services provided following the merger, and $6.2 million related to outside professional services.
~~Merger Expenses~~
     ~~Merger expenses for 2008 were $155.8 million and include accounting, investment banking, legal and other expenses.~~
~~Impairment Charge~~
     The global economic downturn has adversely affected advertising revenues across our businesses in recent months. As discussed above, we performed an impairment test in the fourth quarter of 2008 and recognized a non-cash impairment charge to our indefinite-lived intangible assets and goodwill of $5.3 billion.
50
~~Other~~Consolidated Operating Income ~~— Net~~
     The $28.0 million income for 2008 consists of a gain of $3.3 million from the sale of sports broadcasting rights, a $7.0 million gain on the disposition of a representation contract, a $4.0 million gain on the sale of property, plant and equipment, a $1.7 million gain on the sale of international street furniture and $9.6 million from the favorable settlement of a lawsuit. The $14.1 million income in 2007 related primarily to $8.9 million gain from the sale of street furniture assets and land in our international outdoor segment as well as $3.4 million from the disposition of assets in our radio segment.
~~Interest~~(Loss)

(In thousands)    Years Ended December 31,
   2011    2010    2009
CCME
     $   888,358            $   840,106            $   639,854
Americas outdoor advertising
   281,611          273,519          217,617
International outdoor advertising
   111,626          56,259          (68,727)
Other
   9,427          20,716          (43,963)
Impairment charges
   (7,614)         (15,364)         (4,118,924)
Other operating income (expense) - net
   12,682          (16,710)         (50,837)
Corporate expenses⁽¹⁾
   (241,366)         (293,685)         (262,166)






Consolidated operating income (loss)
     $   1,054,724            $   864,841            $   (3,687,146)






¹
Corporate expenses include expenses related to CCME, Americas outdoor, International outdoor and our Other segment, as well as overall executive, administrative and support functions.
Share-Based Compensation Expense
     The increase in interest expense for 2008 over 2007 is the result of the increase in our average debt outstanding after the merger. Our outstanding debt was $19.5 billion and $6.6 billion at December 31, 2008 and 2007, respectively.
~~Gain (Loss) on Marketable Securities~~
     During the fourth quarter of 2008, we recorded a non-cash impairment charge to certain available-for-sale securities. The fair value of these available-for-sale securities was below their cost each month subsequent to the closing of the merger. As a result, we considered the guidance in ASC 320-10-S99 and reviewed the length of the time and the extent to which the market value was less than cost and the financial condition and near-term prospects of the issuer. After this assessment, we concluded that the impairment was other than temporary and recorded a $116.6 million impairment charge. This loss was partially offset by a net gain of $27.0 million recorded in the second quarter of 2008 on the unwinding of our secured forward exchange contracts and the sale of our AMT shares.
     ~~The $6.7 million gain on marketable securities for 2007 primarily related to changes in fair value of the shares of AMT held by Clear Channel and the related forward exchange contracts.~~
~~Equity in Earnings of Non-consolidated Affiliates~~
     Equity in earnings of nonconsolidated affiliates increased $64.8 million in 2008 compared to 2007 primarily from a $75.6 million gain recognized in the first quarter 2008 on the sale of Clear Channel’s 50% interest in Clear Channel Independent, a South African outdoor advertising company. We also recognized a gain of $9.2 million on the disposition of 20% of Grupo ACIR. These gains were partially offset by a $9.0 million impairment charge to one of our international outdoor equity method investments and declines in equity in income from our investments in certain international radio broadcasting companies as well as the loss of equity in earnings from the disposition of Clear Channel Independent.
~~Other Income – Net~~
     Other income of $126.4 million in 2008 relates to an aggregate gain of $124.5 million on the fourth quarter 2008 tender of certain of Clear Channel’s outstanding notes, a $29.3 million foreign exchange gain on translating short-term intercompany notes, an $8.0 million dividend received, partially offset by a $29.8 million loss on the third quarter 2008 tender of certain of Clear Channel’s outstanding notes and a $4.7 million impairment of our investment in a radio partnership and $0.9 million of various other items.
     ~~Other income of $5.3 million in 2007 primarily relates to a foreign exchange gain on translating short-term intercompany notes.~~
~~Income Taxes~~
     Current tax expense for 2008 decreased $302.4 million compared to 2007 primarily due to a decrease in “income (loss) before income taxes and discontinued operations” of $1.2 billion which excludes the non-tax deductible impairment charge of $5.3 billion recorded in 2008. In addition, current tax benefits of approximately $74.6 million were recorded during 2008 related to the termination of Clear Channel’s cross currency swap. Also, we recognized additional tax depreciation deductions as a result of the bonus depreciation provisions enacted as part of the Economic Stimulus Act of 2008. These current tax benefits were partially offset by additional current tax expense recorded in 2008 related to currently non deductible transaction costs as a result of the merger.
     The effective tax rate for the year ended December 31, 2008 decreased to 10.2% as compared to 34.4% for the year ended December 31, 2007, primarily due to the impairment charge that resulted in a $5.3 billion decrease in
51
“income (loss) before income taxes and discontinued operations” and tax benefits of approximately $648.2 million. Partially offsetting this decrease to the effective rate were tax benefits recorded as a result of the release of valuation allowances on the capital loss carryforwards that were used to offset the taxable gain from the disposition of Clear Channel’s investment in AMT and Grupo ACIR. Additionally, Clear Channel sold its 50% interest in Clear Channel Independent in 2008, which was structured as a tax free disposition. The sale resulted in a gain of $75.6 million with no current tax expense. Further, in 2008 valuation allowances were recorded on certain net operating losses generated during the period that were not able to be carried back to prior years. Due to the lack of earnings history as a merged company and limitations on net operating loss carryback claims allowed, the Company cannot rely on future earnings and carryback claims as a means to realize deferred tax assets which may arise as a result of future period net operating losses. Pursuant to the provision of ASC 740-10, deferred tax valuation allowances would be required on those deferred tax assets.
     For the year ended December 31, 2008, deferred tax expense decreased $662.8 million as compared to 2007 primarily due to the impairment charge recorded in 2008 related to the tax deductible intangibles. This decrease was partially offset by increases in deferred tax expense in 2008 related to recording of valuation allowances on certain net operating losses as well as the termination of the cross currency swap and the additional tax depreciation deductions as a result of the bonus depreciation provisions enacted as part of the Economic Stimulus Act of 2008 mentioned above.
~~Income (Loss) from Discontinued Operations~~
     Income from discontinued operations of $638.4 million recorded during 2008 primarily relates to a gain of $631.9 million, net of tax, related to the sale of Clear Channel’s television business and the sale of radio stations.
~~Radio Broadcasting Results of Operations~~
     ~~Our radio broadcasting operating results were as follows:~~

Years Ended December 31,
2008 2007
(In thousands) Combined Pre-Merger % Change
Revenue $ 3,293,874 $ 3,558,534 (7 %)
Direct operating expenses 979,324 982,966 (0 %)
SG&A expenses 1,182,607 1,190,083 (1 %)
Depreciation and amortization 152,822 107,466 42 %

Operating income $ 979,121 $ 1,278,019 (23 %)

     Our radio broadcasting revenue declined approximately $264.7 million during 2008 compared to 2007, with approximately 43% of the decline occurring during the fourth quarter. Our local revenues were down $205.6 million in 2008 compared to 2007. National revenues declined as well. Both local and national revenues were down as a result of overall weakness in advertising. Our radio revenue experienced declines across advertising categories including automotive, retail and entertainment advertising categories. For the year ended December 31, 2008, our total minutes sold and average minute rate declined compared to 2007.
     Direct operating expenses declined approximately $3.6 million. Decreases in programming expenses of approximately $21.2 million from our radio markets were partially offset by an increase in programming expenses of approximately $16.3 million in our national syndication business. The increase in programming expenses in our national syndication business was mostly related to contract talent payments. SG&A expenses decreased approximately $7.5 million primarily from reduced marketing and promotional expenses and a decline in commission expenses associated with the revenue decline. Partially offsetting the decline in SG&A expenses was an increase in severance in 2008 associated with the restructuring program of approximately $32.6 million and an increase in bad debt expense of approximately $17.3 million.
     Depreciation and amortization increased approximately $45.4 million mostly as a result of additional amortization associated with the preliminary purchase accounting adjustments to the acquired intangible assets.
52
~~Americas Outdoor Advertising Results of Operations~~
     ~~Our Americas outdoor advertising operating results were as follows:~~

Years Ended December 31,
2008 2007
(In thousands) Combined Pre-Merger % Change
Revenue $ 1,430,258 $ 1,485,058 (4 %)
Direct operating expenses 647,526 590,563 10 %
SG&A expenses 252,889 226,448 12 %
Depreciation and amortization 207,633 189,853 9 %

Operating income $ 322,210 $ 478,194 (33 %)

     Revenue decreased approximately $54.8 million during 2008 compared to 2007, with the entire decline occurring in the fourth quarter. Driving the decline was approximately $87.4 million attributable to poster and bulletin revenues associated with cancellations and non-renewals from major national advertisers, partially offset by an increase of $46.2 million in airport revenues, digital display revenues and street furniture revenues. Also impacting the decline in bulletin revenue was decreased occupancy while the decline in poster revenue was affected by a decrease in both occupancy and rate. The increase in airport and street furniture revenues was primarily driven by new contracts while digital display revenue growth was primarily the result of an increase in the number of digital displays. Other miscellaneous revenues also declined approximately $13.6 million.
     Our Americas direct operating expenses increased $57.0 million primarily from higher site-lease expenses of $45.2 million primarily attributable to new taxi, airport and street furniture contracts and an increase of $2.4 million in severance. Our SG&A expenses increased $26.4 million largely from increased bad debt expense of $15.5 million and an increase of $4.5 million in severance in 2008 associated with our restructuring program.
     Depreciation and amortization increased approximately $17.8 million mostly as a result of $6.6 million related to additional depreciation and amortization associated with preliminary purchase accounting adjustments to the acquired assets and $11.3 million of accelerated depreciation from billboards that were removed.
~~International Outdoor Advertising Results of Operations~~
     ~~Our international operating results were as follows:~~

Years Ended December 31,
2008 2007
(In thousands) Combined Pre-Merger % Change
Revenue $ 1,859,029 $ 1,796,778 3 %
Direct operating expenses 1,234,610 1,144,282 8 %
SG&A expenses 353,481 311,546 13 %
Depreciation and amortization 264,717 209,630 26 %

Operating income $ 6,221 $ 131,320 (95 %)

     Revenue increased approximately $62.3 million, with roughly $60.4 million from movements in foreign exchange. The remaining revenue growth was primarily attributable to growth in China, Turkey and Romania, partially offset by revenue declines in France and the United Kingdom. China and Turkey benefited from strong advertising environments. We acquired operations in Romania at the end of the second quarter of 2007, which also contributed to revenue growth in 2008. The decline in France was primarily driven by the loss of a contract to advertise on railways and the decline in the United Kingdom was primarily driven by weak advertising demand.
     During the fourth quarter of 2008, revenue declined approximately $88.6 million compared to the fourth quarter of 2007, of which approximately $51.8 million was attributable to movements in foreign exchange and the remainder primarily the result of a decline in advertising demand.
     Direct operating expenses increased $90.3 million. Included in the increase is approximately $39.5 million related to movements in foreign exchange. The remaining increase in direct operating expenses was driven by an increase in site-lease expenses. SG&A expenses increased $41.9 million in 2008 over 2007 with approximately $11.2 million related to movements in foreign exchange and $20.1 million related to severance in 2008 associated with the restructuring program.
53
     Depreciation and amortization expenses increased $55.1 million with $18.8 million related to additional depreciation and amortization associated with the preliminary purchase accounting adjustments to the acquired assets, approximately $18.0 million related to an increase in accelerated depreciation from billboards to be removed, approximately $11.3 million related to impaired advertising display contracts and $4.9 million related to an increase from movements in foreign exchange.
~~Reconciliation of Segment Operating Income (Loss)~~

Years Ended December 31,
2008 2007
(In thousands) Combined Pre-Merger
Radio Broadcasting $ 979,121 $ 1,278,019
Americas Outdoor Advertising 322,210 478,194
International Outdoor Advertising 6,221 131,320
Other (31,419 ) (11,659 )
Impairment charges (5,268,858 ) —
Other operating income — net 28,032 14,113
Merger expenses (155,769 ) (6,762 )
Corporate (245,915 ) (197,746 )

Consolidated operating income (loss) $ (4,366,377 ) $ 1,685,479

~~Share-Based Payments~~
As of December 31, ~~2009,~~2011, there was ~~$83.9~~$42.8 million of unrecognized compensation cost, net of estimated forfeitures, related to unvested share-based compensation arrangements that will vest based on service conditions. This cost is expected to be recognized over ~~three~~a weighted average period of approximately two years. In addition, as of December 31, ~~2009,~~2011, there was ~~$80.2~~$15.2 million of unrecognized compensation cost, net of estimated forfeitures, related to unvested share-based compensation arrangements that will vest based on market, performance and service conditions. This cost will be recognized when it becomes probable that the performance condition will be satisfied.
     Vesting of certain Clear Channel stock options and restricted stock awards was accelerated upon the closing of the merger. As a result, holders of stock options, other than certain executive officers and holders of certain options that could not, by their terms, be cancelled prior to their stated expiration date, received cash or, if elected, an amount of Company stock, in each case equal to the intrinsic value of the awards based on a market price of $36.00 per share while holders of restricted stock awards received, with respect to each share of restricted stock, $36.00 per share in cash or, if elected, a share of Company stock. Approximately $39.2 million of share-based compensation was recognized in the 2008 pre-merger period as a result of the accelerated vesting of stock options and restricted stock awards and is included in the table below.
The following table ~~details~~indicates non-cash compensation costs related to share-based payments for the years ended December 31, 2011, 2010 and 2009, respectively:
$00,00000 $00,00000 $00,00000
(In thousands)    Years Ended December 31,
   2011    2010    2009
CCME
     $ 4,606           $ 7,152           $ 8,276
Americas outdoor advertising
   7,601         9,207         7,977
International outdoor advertising
   3,165         2,746         2,412
Corporate¹
   5,295         15,141         21,121






Total share-based compensation expense
     $ 20,667           $ 34,246           $ 39,786






¹
Included in corporate share-based compensation for year ended December 31, 2011 is a $6.6 million reversal of expense related to the cancellation of a portion of an executive’s stock options.
We completed a voluntary stock option exchange program on March 21, 2011 and exchanged 2.5 million stock options granted under the Clear Channel 2008 Executive Incentive Plan for 1.3 million replacement stock options with a lower exercise price and ~~2007:~~

Years Ended December 31,
2009 2008 2007
(In millions) Post-Merger Combined Pre-Merger
Radio Broadcasting
Direct operating expenses $ 3.8 $ 17.2 $ 10.0
SG&A expenses 4.5 20.6 12.2
Americas Outdoor Advertising
Direct operating expenses $ 5.7 $ 6.3 $ 5.7
SG&A expenses 2.2 2.1 2.2
International Outdoor Advertising
Direct operating expenses $ 1.9 $ 1.7 $ 1.2
SG&A expenses 0.6 0.4 0.5

Corporate and other expenses $ 21.1 $ 30.3 $ 12.2

Total $ 39.8 $ 78.6 $ 44.0

54
different service and performance conditions. We accounted for the exchange program as a modification of the existing awards under ASC 718 and will recognize incremental compensation expense of approximately $1.0 million over the service period of the new awards.
Additionally, we recorded compensation expense of $6.0 million in “Corporate expenses” related to shares tendered by Mark P. Mays to us on August 23, 2010 for purchase at $36.00 per share pursuant to a put option included in his amended employment agreement.
LIQUIDITY AND CAPITAL RESOURCES
~~Liquidity~~The following discussion highlights cash flow activities during the years ended December 31, 2011, 2010 and ~~Capital Resources~~
2009.
Cash Flows

Period from Period from
Year ended July 31 through January 1 to Year ended
December 31, December 31, July 30, December 31,
2009 2008 2008 2008 2007
(In thousands) Post-Merger Post-Merger Pre-Merger Combined Pre-Merger
Cash provided by (used in):
Operating activities $ 181,175 $ 246,026 $ 1,035,258 $ 1,281,284 $ 1,576,428
Investing activities $ (141,749 ) $ (17,711,703 ) $ (416,251 ) $ (18,127,954 ) $ (482,677 )
Financing activities $ 1,604,722 $ 17,554,739 $ (1,646,941 ) $ 15,907,798 $ (1,431,014 )
Discontinued operations $ — $ 2,429 $ 1,031,141 $ 1,033,570 $ 366,411
$000,0000 $000,0000 $000,0000
(In thousands)    Year ended December 31,
   2011    2010    2009
Cash provided by (used for):

Operating activities
     $   373,958            $   582,373            $   181,175
Investing activities
     $   (368,086)           $   (240,197)           $   (141,749)
Financing activities
     $   (698,116)           $   (305,244)           $   1,604,722
Operating Activities
2011
The decrease in cash flows from operations in 2011 compared to 2010 was primarily driven by declines in working capital partially offset by improved profitability, including a 5% increase in revenue. Our net loss of $268.0 million, adjusted for $832.2 million of non-cash items, provided positive cash flows of $564.1 million in 2011. Cash generated by higher operating income in 2011 compared to 2010 was offset by the decrease in accrued expenses in 2011 as a result of higher variable compensation payments in 2011 associated with our employee incentive programs based on 2010 operating performance. In addition, in 2010 we received $132.3 million in U.S. Federal income tax refunds that increased cash flow from operations in 2010.
Non-cash items affecting our net loss include depreciation and amortization, deferred taxes, (gain) loss on disposal of operating assets, (gain) loss on extinguishment of debt, provision for doubtful accounts, share-based compensation, equity in earnings of nonconsolidated affiliates, amortization of deferred financing charges and note discounts – net and other reconciling items – net as presented on the face of the statement of cash flows.
2010
The increase in cash flows from operations in 2010 compared to 2009 was primarily driven by improved profitability, including a 6% increase in revenue and a 2% decrease in direct operating and SG&A expenses. Our net loss, adjusted for $792.7 million of non-cash items, provided positive cash flows of $329.8 million in 2010. We received $132.3 million in Federal income tax refunds during the third quarter of 2010. Working capital, excluding taxes, provided $120.3 million to cash flows from operations in the current year.
2009
The decline in cash flow from operations in 2009 compared to 2008 was primarily driven by a 17% decline in consolidated revenues associated with the weak economy and challenging advertising markets and a 62% increase in interest expense to service our debt obligations. ~~Other factors contributing to our operating cash flow include a consolidated~~Our net loss, ~~of $4.0 billion~~ adjusted for non-cash ~~impairment charges~~items of ~~$4.1~~$4.2 billion, ~~related to goodwill and intangible assets, depreciation and amortization~~provided positive cash flows of ~~$765.5~~$157.9 million. Changes in working capital provided an additional $23.2 million ~~and $229.5~~in operating cash flows for 2009.
Investing Activities
2011
Cash used for investing activities during 2011 primarily reflected capital expenditures of $362.3 million. We spent $61.4 million for capital expenditures in our CCME segment, $131.1 million in our Americas outdoor segment primarily related to the ~~amortization~~construction of ~~debt issuance costs~~new digital billboards, and ~~accretion of fair value adjustments~~$160.0 million in our International outdoor segment primarily related to new billboard and street furniture contracts and renewals of existing ~~Clear Channel notes in~~contracts. Cash paid for purchases of businesses primarily related to our Traffic acquisition and the ~~purchase accounting for the merger.~~cloud-based music technology business we purchased during 2011. In addition, we ~~recorded a $713.0~~received proceeds of $54.3 million ~~gain on the extinguishment of debt discussed further in the~~~~Debt Repurchases, Tender Offers, Maturities and Other~~~~section within this MD&A and deferred taxes of $417.2 million. We also recorded a $20.7 million loss in equity of nonconsolidated affiliates~~ primarily ~~due to a $22.9 million non-cash impairment of equity investments in our International segment.~~
~~2008~~
     Cash provided by operating activities for 2008 primarily reflects a net loss before discontinued operations of $4.6 billion adjusted for non-cash impairment charges of $5.3 billion related to goodwill and intangible assets, depreciation and amortization of $696.8 million and $106.4 million related to the amortization of debt issuance costs and accretion of fair value adjustments made to existing Clear Channel notes in the purchase accounting for the merger. In addition, we recorded a deferred tax benefit of $474.6 million that was partially offset by share-based compensation of $78.6 million. In addition, Clear Channel recorded $100.0 million in equity in earnings primarily related to a $75.6 million gain in equity in earnings of nonconsolidated affiliates related to the sale of ~~its 50% interest~~radio stations, a tower and other assets in ~~Clear Channel Independent, a South African~~our CCME, Americas outdoor, ~~company, based on~~and International outdoor segments.
2010
Cash used for investing activities during 2010 primarily reflected capital expenditures of $241.5 million. We spent $35.5 million for capital expenditures in our CCME segment, $96.7 million in our Americas outdoor segment primarily related to the ~~fair value~~construction of ~~the equity securities received. Clear Channel also recorded a net gain of $27.0~~new digital billboards, and $98.6 million ~~on the termination of its secured forward sales~~in our International outdoor segment primarily related to new billboard and street furniture contracts and renewals of existing contracts. In addition, we acquired representation contracts for $14.1 million and received proceeds of $28.6 million primarily related to the sale of ~~its AMT shares.~~
radio stations, assets in our Americas outdoor and International outdoor segments and representation contracts.
~~2007~~2009
     ~~Net cash flow from operating~~
Cash used for investing activities during ~~2007~~2009 primarily reflected ~~income before discontinued operations~~capital expenditures of ~~$839.7 million plus depreciation and amortization of $566.6 million and deferred taxes of $188.2~~$223.8 million.
~~Investing Activities~~
~~2009~~
     ~~In 2009, we~~ We spent $41.9 million for ~~non-revenue producing~~ capital expenditures in our ~~Radio segment. We spent~~CCME segment, $84.4 million in our Americas outdoor segment for the purchase of property, plant and equipment mostly related to the construction of new billboards and $91.5 million in our International outdoor segment for the purchase of property, plant and equipment related to new billboard and street furniture contracts and renewals of existing contracts. We received proceeds of $41.6 million primarily related to the sale of our remaining investment in Grupo ACIR. In addition, we received proceeds of $48.8 million primarily related to the disposition of radio stations and corporate assets.
~~2008~~Financing Activities
2011
Cash used ~~in investing~~for financing activities during ~~2008 principally reflects cash used~~2011 primarily reflected debt issuances in the ~~acquisition~~February 2011 Offering and the June 2011 Offering, and the use of proceeds from the February 2011 Offering, as well as cash on hand, to prepay $500.0 million of Clear ~~Channel of $17.5 billion. In 2008,~~Channel’s senior secured credit facilities and repay at maturity Clear Channel’s 6.25% senior notes that matured in 2011 as discussed in the “Refinancing Transactions” section within this MD&A. Clear Channel ~~spent $61.5~~also repaid all outstanding amounts under its receivables based facility prior to, and in connection with, the June 2011 Offering. Cash used for financing activities also included the $95.0 million ~~for non-revenue producing capital expenditures in its Radio segment.~~of pre-existing, intercompany debt owed by acquired Westwood One subsidiaries repaid immediately after the closing of the Traffic acquisition. Clear Channel ~~spent $175.8~~repaid its 4.4% senior notes at maturity in May 2011 for $140.2 million, plus accrued interest, with available cash on hand, and repaid $500.0 million of its revolving credit facility on June 27, 2011. Additionally, CC Finco repurchased $80.0 million aggregate principal amount of Clear Channel’s 5.5% senior notes for $57.1 million, including accrued interest, as discussed in ~~its Americas segment~~the “Debt Repurchases, Maturities and Other” section within this MD&A.
2010
During 2010, CC Investments repurchased $185.2 million aggregate principal amount of Clear Channel’s senior toggle notes for $125.0 million as discussed in the ~~purchase of~~
55
~~property, plant~~“Debt Repurchases, Maturities and equipment mostly related to the construction of new billboards and $182.5 million in its International segment for the purchase of property, plant and equipment related to new billboard and street furniture contracts and renewals of existing contracts.Other” section within this MD&A. Clear Channel ~~spent $177.1~~repaid its remaining 7.65% senior notes upon maturity for $138.8 million ~~primarily~~with proceeds from its delayed draw term loan facility that was specifically designated for ~~the purchase of outdoor display faces and additional equity interest in international outdoor companies, representation contracts and two FCC licenses.~~this purpose. In addition, Clear Channel ~~received proceeds of $38.6~~repaid its remaining 4.5% senior notes upon maturity for $240.0 million ~~primarily from the sale of radio stations, $41.5 million related to the sale of Americas and International assets and $9.6 million related to a litigation settlement.~~
~~2007~~
     ~~Net~~with available cash used in investing activities during 2007 principally reflects the purchase of property, plant and equipment of $363.3 million. Clear Channel spent $79.7 million for non-revenue producing capital expenditures in its Radio segment. Clear Channel spent $142.8 million in its Americas segment for the purchase of property, plant and equipment mostly related to the construction of new billboards and $132.9 million in its International segment for the purchase of property, plant and equipment related to new billboard and street furniture contracts and renewals of existing contracts. During 2007, Clear Channel acquired domestic outdoor display faces and additional equity interests in international outdoor companies for $69.1 million. In addition, Clear Channel’s national representation business acquired representation contracts for $53.0 million.
~~Financing Activities~~
on hand.
2009
Cash provided by financing activities during 2009 primarily ~~reflects~~reflected a draw of remaining availability of $1.6 billion under Clear Channel’s ~~$2.0 billion~~ revolving credit facility and $2.5 billion of proceeds from the issuance of subsidiary senior notes, offset by the $2.0 billion paydown of Clear Channel’s senior secured credit facilities. WeClear Channel also ~~redeemed~~repaid the remaining principal amount of ~~Clear Channel’s~~its 4.25% senior notes at maturity with a draw under the $500.0 million delayed draw term loan facility that iswas specifically designated for this purpose as discussed in the “Debt Repurchases, ~~Tender Offers,~~ Maturities and ~~Other~~Other”section within this MD&A. Our wholly-owned subsidiaries, CC Finco and Clear Channel Acquisition, LLC (formerly CC Finco II, ~~LLC,~~LLC), together repurchased certain of Clear Channel’s outstanding senior notes for $343.5 million as discussed in the “Debt Repurchases, ~~Tender Offers,~~ Maturities and ~~Other~~Other”section within this MD&A. In addition, during 2009, our Americas ~~Outdoor~~outdoor segment purchased the remaining 15% interest in our fully consolidated subsidiary, Paneles Napsa S.A., for $13.0 million and our International ~~Outdoor~~outdoor segment acquired an additional 5% interest in our fully consolidated subsidiary, Clear Channel Jolly Pubblicita SPA, for $12.1 million.
~~2008~~
     Cash used in financing activities during 2008 primarily reflects $15.4 billion in debt proceeds used to finance the acquisition of Clear Channel and an equity contribution of $2.1 billion to finance the merger. Also included in financing activities is $1.9 billion related to the redemption of Clear Channel’s 4.625% senior notes due 2008 and 6.625% senior notes due 2008 at their maturity, the redemption of and cash tender offer for AMFM Operating Inc.’s 8% senior notes due 2008, and the cash tender offer and consent solicitation for Clear Channel’s 7.65% senior notes due 2010. In addition, $93.4 million relates to dividends paid.
~~2007~~
     Net cash used in financing activities for the year ended December 31, 2007 principally reflects $372.4 million in dividend payments and a net reduction in debt of approximately $1.1 billion. Cash used in financing was partially offset by the proceeds from the exercise of stock options of $80.0 million.
~~Discontinued Operations~~
     During 2008, we completed the sale of Clear Channel’s television business to Newport Television, LLC for $1.0 billion and completed the sales of certain radio stations for $110.5 million. The cash received from these sales was recorded as a component of cash flows from discontinued operations during 2008.
     ~~The proceeds from the sale of 160 stations in 2007 are classified as cash flows from discontinued operations in 2007.~~
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Anticipated Cash Requirements
Our primary source of liquidity is cash on hand and cash flow from operations ~~which has been adversely affected by the global economic downturn. The risks associated with~~and borrowings under Clear Channel’s revolving credit facility and receivables based credit facility. We have a large amount of indebtedness, and a substantial portion of our ~~businesses become more acute in periods~~cash flows are used to service debt. At December 31, 2011, we had $1.2 billion of a slowing economy or recession, which may be accompanied by a decrease in advertising. Expenditures by advertisers tend to be cyclical, reflecting overall economic conditions and budgeting and buying patterns. The current global economic downturn has resulted in a decline in advertising and marketing services among our customers, resulting in a decline in advertising revenues across our businesses. This reduction in advertising revenues has had an adverse effectcash on our ~~revenue, profit margins, cash flow~~balance sheet, with $542.7 million held by our subsidiary, CCOH, and ~~liquidity. A continuation of the global economic downturn may continue to adversely impact our revenue, profit margins, cash flow~~its subsidiaries. We have debt maturities totaling $275.6 million and ~~liquidity.~~
$420.5 million in 2012 and 2013, respectively.
Our ability to fund our working capital needs, debt service and other obligations, and to comply with the financial covenant under our financing agreements depends on our future operating performance and cash flow, which are in turn subject to prevailing economic conditions and other factors, many of which are beyond our control. If our future operating performance does not meet our ~~expectation~~expectations or our plans materially change in an adverse manner or prove to be materially inaccurate, we may need additional financing. Consequently, there can be no assurance that such financing, if permitted under the terms of Clear Channel’s financing agreements, will be available on terms acceptable to us or at all. The inability to obtain additional financing in such circumstances could have a material adverse effect on our financial condition and on our ability to meet Clear Channel’s obligations.
We frequently evaluate strategic opportunities both within and outside our existing lines of business. We expect from time to time to pursue additional acquisitions and may decide to dispose of certain businesses. These acquisitions or dispositions could be material.
Based on our current and anticipated levels of operations and conditions in our markets, we believe that cash on hand, ~~(including amounts drawn or available~~availability under Clear Channel’s ~~senior secured~~revolving credit ~~facilities)~~facility and receivables based facility, as well as cash flow from operations will enable us to meet our working capital, capital expenditure, debt service and other funding requirements for at least the next 12 months.
We expect to be in compliance with the covenants contained in Clear Channel’s material financing agreements ~~including the subsidiary senior notes,~~ in ~~2010,~~2012, including the maximum consolidated senior secured net debt to ~~adjusted~~consolidated EBITDA limitation contained in ~~our~~Clear Channel’s senior secured credit facilities. However, our anticipated results are subject to significant uncertainty and our ability to comply with this limitation may be affected by events beyond our control, including prevailing economic, financial and industry conditions. The breach of any covenants set forth in Clear Channel’s financing agreements would result in a default thereunder. An event of default would permit the lenders under a defaulted financing agreement to declare all indebtedness thereunder to be due and payable prior to maturity. Moreover, the lenders under the revolving credit facility under Clear Channel’s senior secured credit facilities would have the option to terminate their commitments to make further extensions of revolving credit thereunder. If we are unable to repay Clear Channel’s obligations under any secured credit facility, the lenders could proceed against any assets that were pledged to secure such facility. In addition, a default or acceleration under any of Clear Channel’s material financing agreements ~~including the subsidiary senior notes,~~ could cause a default under other of our obligations that are subject to cross-default and cross-acceleration provisions. The threshold amount for a cross-default under the senior secured credit facilities and receivables based facility is ~~$100 million dollars.~~
     Our and Clear Channel’s current corporate ratings are “CCC+” and “Caa2” by Standard & Poor’s Ratings Services and Moody’s Investors Service, respectively, which are speculative grade ratings. These ratings have been downgraded and then upgraded at various times during the two years ended December 31, 2009. These adjustments had no impact on Clear Channel’s borrowing costs under the credit agreements.
57$100.0 million.
Sources of Capital
As of December 31, ~~2009~~2011 and ~~2008,~~2010, we had the following ~~indebtedness outstanding:~~

Post-Merger Post-Merger
December 31, December 31,
(In millions) 2009 2008
Senior Secured Credit Facilities:
Term Loan A Facility $ 1,127.7 $ 1,331.5
Term Loan B Facility 9,061.9 10,700.0
Term Loan C – Asset Sale Facility 695.9 695.9
Delayed Draw Term Loan Facilities 874.4 532.5
Receivables Based Facility 355.7 445.6
Revolving Credit Facility⁽¹⁾
1,812.5 220.0
Secured Subsidiary Debt 5.2 6.6

Total Secured Debt 13,933.3 13,932.1

Senior Cash Pay Notes 796.3 980.0
Senior Toggle Notes 915.2 1,330.0
Clear Channel Senior Notes⁽²⁾
2,479.5 3,192.3
Subsidiary Senior Notes 2,500.0 —
Clear Channel Subsidiary Debt 77.7 69.3

Total Debt 20,702.0 19,503.7
Less: Cash and cash equivalents 1,884.0 239.8

$ 18,818.0 $ 19,263.9

debt outstanding, net of cash and cash equivalents:
$00,000000 $00,000000
(In millions)    As of December 31,
   2011    2010
Senior Secured Credit Facilities:

Term Loan A Facility
     $ 1,087.1            $ 1,127.7
Term Loan B Facility
   8,735.9          9,061.9
Term Loan C – Asset Sale Facility
   670.8          695.9
Revolving Credit Facility⁽¹⁾
   1,325.6          1,842.5
Delayed Draw Term Loan Facilities
   976.8          1,013.2
Receivables Based Facility⁽²⁾
   —         384.2
Priority Guarantee Notes
   1,750.0          —
Other Secured Subsidiary Debt
   30.9          4.7




Total Secured Debt
   14,577.1          14,130.1
Senior Cash Pay Notes
   796.3          796.3
Senior Toggle Notes
   829.8          829.8
Clear Channel Senior Notes
   1,998.4          2,911.4
Subsidiary Senior Notes
   2,500.0          2,500.0
Other Clear Channel Subsidiary Debt
   19.9          63.1
Purchase accounting adjustments and original issue discount
   (514.3)         (623.3)




Total Debt
   20,207.2          20,607.4
Less: Cash and cash equivalents
   1,228.7          1,920.9




     $ 18,978.5            $ 18,686.5




(1) ~~In February 2009, Clear Channel borrowed the approximately $1.6 billion~~We had $536.0 million of ~~remaining~~ availability under ~~this facility.~~the Revolving Credit Facility as of December 31, 2011.

(2) ~~Includes $788.1 million and $1.1 billion at~~As of December 31, ~~2009 and 2008, respectively, in unamortized fair value purchase accounting discounts related to~~2011, we had available under the ~~merger with Clear Channel.~~Receivables Based Facility the lesser of $625 million (the revolving credit commitment) or the borrowing base amount, as defined under the Receivables Based Facility.
We and our subsidiaries have from time to time repurchased certain debt obligations of Clear Channel and outstanding equity securities of CCOH, and we may in the future, as part of various financing and investment strategies, ~~we may elect to pursue,~~ purchase additional outstanding indebtedness of Clear Channel or its subsidiaries or our outstanding equity securities or outstanding equity securities of ~~Clear Channel Outdoor Holdings, Inc.,~~CCOH, in tender offers, open market purchases, privately negotiated transactions or otherwise. We may also sell certain assets or properties and use the proceeds to reduce our ~~indebtedness or the indebtedness of our subsidiaries.~~indebtedness. These purchases or sales, if any, could have a material positive or negative impact on our liquidity available to repay outstanding debt obligations or on our consolidated results of operations. These transactions could also require or result in amendments to the agreements governing outstanding debt obligations or changes in our leverage or other financial ratios, which could have a material positive or negative impact on our ability to comply with the covenants contained in ~~our~~Clear Channel’s debt agreements. These transactions, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. The amounts involved may be material.
Senior Secured Credit Facilities
As of December 31, 2011, Clear Channel had a total of $12,796 million outstanding under its senior secured credit facilities, consisting of:
a $1,087 million term loan A facility which matures in July 2014;
an $8,736 million term loan B facility which matures in July 2016;
a $670.8 million term loan C—asset sale facility, subject to reduction as described below, which matures in January 2016;
two delayed draw term loan facilities, of which $568.6 million and $408.2 million was drawn as of December 31, 2011, respectively, and which mature in January 2016; and
a $1,928 million revolving credit facility, including a letter of credit sub-facility and a swingline loan sub-facility, of which $1,326 million was drawn as of December 31, 2011, which matures in July 2014.
Clear Channel may raise incremental term loans or incremental commitments under the revolving credit facility of up to (a) $1.5 billion, plus (b) the excess, if any, of (x) 0.65 times pro forma consolidated EBITDA (as calculated in the manner provided in the senior secured credit facilities documentation), over (y) $1.5 billion, plus (c) the aggregate
amount of certain principal prepayments made in respect of the term loans under the senior secured credit facilities. Availability of such incremental term loans or revolving credit commitments is subject, among other things, to the absence of any default, pro forma compliance with the financial covenant and the receipt of commitments by existing or additional financial institutions.
Clear Channel is the primary borrower under the senior secured credit facilities, except that certain of its domestic restricted subsidiaries are co-borrowers under a portion of the term loan facilities. Clear Channel also has the ability to designate one or more of its foreign restricted subsidiaries in certain jurisdictions as borrowers under the revolving credit facility, subject to certain conditions and sublimits and have so designated certain subsidiaries in the Netherlands and the United Kingdom.
Interest Rate and Fees
Borrowings under ~~the~~Clear Channel’s senior secured credit facilities bear interest at a rate equal to an applicable margin plus, at Clear Channel’s option, either (i) a base rate determined by reference to the higher of (A) the prime lending rate publicly announced by the administrative agent ~~and~~or (B) the Federal funds effective rate from time to time plus 0.50%, or (ii) a Eurocurrency rate determined by reference to the costs of funds for deposits for the interest period relevant to such borrowing adjusted for certain additional costs.
The margin percentages applicable to the term loan facilities and revolving credit facility are the following percentages per annum:
with respect to loans under the term loan A facility and the revolving credit facility, (i) 2.40% in the case of base rate loans and (ii) 3.40% in the case of Eurocurrency rate ~~loans subject to downward adjustments if our leverage ratio of total debt to EBITDA (as calculated in accordance with the senior secured credit facilities) decreases below 7 to 1;~~loans; and
58
with respect to loans under the term loan B facility, term loan C —- asset sale facility and delayed draw term loan facilities, (i) 2.65%, in the case of base rate loans and (ii) 3.65%, in the case of Eurocurrency rate ~~loans~~loans.
The margin percentages are subject to ~~downward adjustments if our~~adjustment based upon Clear Channel’s leverage ~~ratio of total debt to EBITDA decreases below 7 to 1.~~
ratio.
Clear Channel is required to pay each revolving credit lender a commitment fee in respect of any unused commitments under the revolving credit facility, which is currently 0.50% per annum, but subject to ~~downward adjustments if~~adjustment based on Clear Channel’s leverage ratio of total debt to EBITDA decreases below 4 to 1. Clear Channel is required to pay each delayed draw term facility lender a commitment fee in respect of any undrawn commitments under the delayed draw term facilities, which initially is 1.825% per annum until theratio. The delayed draw term facilities are fully drawn, ortherefore there are currently no commitment fees associated with any unused commitments ~~thereunder terminated.~~
     The senior secured credit facilities include two delayed draw term loan facilities. The first is a $589.8 million facility which may be drawn to purchase or redeem Clear Channel’s outstanding 7.65% senior notes due 2010, of which $451.0 million was drawn as of December 31, 2009, and a $423.4 million facility which was drawn to redeem Clear Channel’s outstanding 4.25% senior notes in May 2009.
thereunder.
Prepayments
The senior secured credit facilities require usClear Channel to prepay outstanding term loans, subject to certain exceptions, with:
50% (which percentage may be reduced to 25% and to 0% based upon Clear Channel’s leverage ratio) of our annual excess cash flow (as calculated in accordance with the senior secured credit facilities), less any voluntary prepayments of term loans and revolving credit loans (to the extent accompanied by a permanent reduction of the commitment) and subject to customary credits;
• 50% (which percentage will be reduced to 25% and to 0% based upon our leverage ratio) of our annual excess cash flow (as calculated in accordance with the senior secured credit facilities), less any voluntary prepayments of term loans and revolving credit loans (to the extent accompanied by a permanent reduction of the commitment) and subject to customary credits;
• 100% (which percentage will be reduced to 75% and 50% based upon our leverage ratio) of the net cash proceeds of sales or other dispositions by us or our wholly-owned restricted subsidiaries (including casualty and condemnation events) of assets other than specified assets subject to reinvestment rights and certain other exceptions; and
• ~~100% of the net cash proceeds of any incurrence of certain debt, other than debt permitted under the senior secured credit facilities.~~
100% of the net cash proceeds of sales or other dispositions of specified assets being marketed for sale (including casualty and condemnation events), subject to certain exceptions;
100% (which percentage may be reduced to 75% and 50% based upon Clear Channel’s leverage ratio) of the net cash proceeds of sales or other dispositions by Clear Channel or its wholly-owned restricted subsidiaries of assets other than specified assets being marketed for sale, subject to reinvestment rights and certain other exceptions; and
100% of the net cash proceeds of (i) any incurrence of certain debt, other than debt permitted under Clear Channel’s senior secured credit facilities, (ii) certain securitization financing and (iii) certain issuances of Permitted Additional Notes (as defined in the senior secured credit facilities).
The foregoing prepayments with the net cash proceeds of certain incurrences of debt and annual excess cash flow will be applied (i) first to the term loans other than the term loan C —- asset sale facility loans (on a pro rata basis) and (ii) second to the term loan C —- asset sale facility loans, in each case to the remaining installments thereof in direct order of maturity. The foregoing prepayments with the net cash proceeds of the sale of assets (including casualty and condemnation events) will be applied (i) first to the term loan C —- asset sale facility loans and (ii) second to the other term loans (on a pro rata basis), in each case to the remaining installments thereof in direct order of maturity.
     We
Clear Channel may voluntarily repay outstanding loans under ~~our~~the senior secured credit facilities at any time without premium or penalty, other than customary “breakage” costs with respect to Eurocurrency rate loans.
     ~~We are~~
Amortization of Term Loans
Clear Channel is required to repay the loans under ~~our~~the term loan facilities, after giving effect to (1) the December 2009 prepayment of $2.0 billion of term loans with proceeds from the issuance of subsidiary senior notes discussed elsewhere in this MD&A ~~as follows:~~
• ~~the term loan A facility will amortize in quarterly installments commencing on the third interest payment date after the fourth anniversary~~and, (2) the February 2011 prepayment of $500.0 million of the closing date of the merger, in annual amounts equal to 4.7% of the original funded principal amount of such facility in year four, 10% thereafter, with the balance being payable on the final maturity date (July 2014) of such term loans; and
• ~~the term loan B facility and the delayed draw facilities will be payable in full on the final maturity date (January 2016) of such term loans; and~~
• the term loan C facility will amortize in quarterly installments on the first interest payment date after the third anniversary of the closing date of the merger, in annual amounts equal to 2.5% of the original funded principal amount of such facilities in years four and five and 1% thereafter, with the balance being payable on the final maturity date (January 2016) of such term loans.
     ~~We are required to repay all borrowings under the receivables based facility and the~~ revolving credit facility ~~at their final maturity~~and term loans with the proceeds of the February 2011 Offering discussed elsewhere in this MD&A as follows:
(In millions)
Year
   Tranche A Term
Loan
Amortization*    Tranche B Term
Loan
Amortization**    Tranche C Term
Loan
Amortization**    Delayed Draw 1
Term Loan
Amortization**    Delayed Draw 2
Term Loan
Amortization**
2012
   –       –       $ 1.0       –       –
2013
   $ 88.5       –       $ 12.2       –       –
2014
   $ 998.6       –       $ 7.0       –       –
2015
   –       –       $ 3.4       –       –
2016
   –       $ 8,735.9       $ 647.2       $ 568.6       $ 408.2










Total
   $ 1,087.1       $ 8,735.9       $ 670.8       $ 568.6       $ 408.2
*Balance of Tranche A Term Loan is due July ~~2014.~~
30, 2014
**Balance of Tranche B Term Loan, Tranche C Term Loan, Delayed Draw 1 Term Loan and Delayed Draw 2 Term Loan are due January 29, 2016
Collateral and Guarantees
The senior secured credit facilities are guaranteed by Clear Channel and each of ~~our~~Clear Channel’s existing and future material wholly-owned domestic restricted subsidiaries, subject to certain exceptions.
59
All obligations under the senior secured credit facilities, and the guarantees of those obligations, are secured, subject to permitted liens, including prior liens permitted by the indenture governing the Clear Channel senior notes, and other exceptions, by:
a ~~first-priority~~ lien on the capital stock of Clear Channel;
100% of the capital stock of any future material wholly-owned domestic license subsidiary that is not a “Restricted Subsidiary” under the indenture governing the Clear Channel senior notes;
certain assets that do not constitute “principal property” (as defined in the indenture governing the Clear Channel senior notes);
certain specified assets of Clear Channel and the guarantors that constitute “principal property” (as defined in the indenture governing the Clear Channel senior notes) securing obligations under the senior secured credit facilities up to the maximum amount permitted to be secured by such assets without requiring equal and ratable security under the indenture governing the Clear Channel senior notes; and
a ~~second-priority~~ lien on the accounts receivable and related assets securing ~~our~~Clear Channel’s receivables based credit facility that is junior to the lien securing Clear Channel’s obligations under such credit facility.
The obligations of any foreign subsidiaries that are borrowers under the revolving credit facility ~~will~~are also be guaranteed by certain of their material wholly-owned restricted subsidiaries, and secured by substantially all assets of all such borrowers and guarantors, subject to permitted liens and other exceptions.
Certain Covenants and Events of Default
The senior secured credit facilities require Clear Channel to comply on a quarterly basis with a ~~maximum~~financial covenant limiting the ratio of consolidated secured debt, net of cash and cash equivalents, to consolidated EBITDA for the preceding four quarters. Clear Channel’s secured debt consists of the senior secured credit facilities, the receivables-based credit facility, the priority guarantee notes and certain other secured subsidiary debt. Clear Channel’s consolidated EBITDA for the preceding four quarters of $2.0 billion is calculated as operating income (loss) before depreciation, amortization, impairment charges and other operating income (expense) – net, ~~debt~~plus non-cash compensation, and is further adjusted for the following items: (i) an increase of $18.5 million for cash received from nonconsolidated affiliates; (ii) an increase of $31.5 million for non-cash items; (iii) an increase of $40.1 million related to ~~adjusted EBITDA~~costs incurred in connection with the closure and/or consolidation of facilities, retention charges, consulting fees and other permitted activities; and (iv) an increase of $31.6 million for various other items. The maximum ratio ~~(maximum of 9.5:1). This~~under this financial covenant is currently set at 9.5:1 and becomes more restrictive over time beginning in the second quarter of 2013. Clear Channel’s secured debt consists of the senior secured credit facilities, the receivables based credit facility and certain other secured subsidiary debt. Secured leverage, defined as secured debt, net of cash, divided by the trailing 12-month consolidated EBITDA was 7.4:1 atAt December 31, 2009. Clear Channel’s consolidated adjusted EBITDA of $1.6 billion is calculated as the trailing twelve months operating income before depreciation, amortization, impairment charge, other operating income (expense) – net, all as shown on the consolidated statement of operations plus non-cash compensation, and is further adjusted for certain items, including: (i) an increase for expected cost savings (limited to $100.0 million in any twelve month period) of $100.0 million; (ii) an increase of $20.9 million for cash received from nonconsolidated affiliates; (iii) an increase of $24.6 million for non-cash items; (iv) an increase of $164.4 million related to expenses incurred associated with2011, our ~~cost savings program; and (v) an increase of $38.8 million for various other items.~~
ratio was 6.9:1.
In addition, the senior secured credit facilities include negative covenants that, subject to significant exceptions, limit our ability and the ability of ~~our~~the restricted subsidiaries to, among other things:
incur additional indebtedness;
create liens on assets;
engage in mergers, consolidations, liquidations and dissolutions;
sell assets;
pay dividends and distributions or repurchase ~~its~~Clear Channel’s capital stock;
make investments, loans, or advances;
prepay certain junior indebtedness;
engage in certain transactions with affiliates;
amend material agreements governing certain junior indebtedness; and
change ~~our~~ lines of business.
The senior secured credit facilities include certain customary representations and warranties, affirmative covenants and events of default, including payment defaults, breach of representations and warranties, covenant defaults, cross-defaults to certain indebtedness, certain events of bankruptcy, certain events under ERISA, material judgments, the invalidity of material provisions of the senior secured credit facilities documentation, the failure of collateral under the security documents for the senior secured credit facilities, the failure of the senior secured credit facilities to be senior debt under the subordination provisions of certain of ~~our~~Clear Channel’s subordinated debt and a change of control. If an event of default occurs, the lenders under the senior secured credit facilities will be entitled to take various actions, including the acceleration of all amounts due under the senior secured credit facilities and all actions permitted to be taken by a secured creditor.
Receivables Based Credit Facility
As of December 31, 2011, Clear Channel had no borrowings outstanding under Clear Channel’s receivables based credit facility. On June 8, 2011, Clear Channel made a voluntary paydown of all amounts outstanding under this facility using cash on hand. Clear Channel’s voluntary paydown did not reduce its commitments under this facility and Clear Channel may reborrow under this facility at any time.
The receivables based credit facility ~~of $783.5 million~~ provides revolving credit commitments ~~in an amount equal to the initial borrowing~~ of ~~$533.5 million on the closing date plus $250~~$625.0 million, subject to a borrowing base. The
60
borrowing base at any time equals 85% of ~~our~~Clear Channel’s and certain of ~~our~~Clear Channel’s subsidiaries’ eligible accounts receivable. The receivables based credit facility includes a letter of credit sub-facility and a swingline loan sub-facility.
     ~~Borrowings, excluding~~ The maturity of the ~~initial borrowing,~~receivables based credit facility is July 2014.
All borrowings under the receivables based credit facility are subject to the absence of any default, the accuracy of representations and warranties and compliance with the borrowing base. In addition, borrowings under the receivables based credit facility, excluding the initial borrowing, are subject to compliance with a minimum fixed charge coverage ratio of 1.0:1.0 if at any time excess availability under the receivables based credit facility is less than $50 million, or if aggregate excess availability under the receivables based credit facility and revolving credit facility is less than 10% of the borrowing base.
Clear Channel and certain subsidiary borrowers are the borrowers under the receivables based credit facility. Clear Channel has the ability to designate one or more of its restricted subsidiaries as borrowers under the receivables based credit facility. The receivables based credit facility loans and letters of credit are available in U.S. dollars.
Interest Rate and Fees
Borrowings under the receivables based credit facility bear interest at a rate equal to an applicable margin plus, at Clear Channel’s option, either (i) a base rate determined by reference to the higher of (A) the prime lending rate publicly announced by the administrative agent ~~and~~or (B) the Federal funds effective rate from time to time plus 0.50%, or (ii) a Eurocurrency rate determined by reference to the costs of funds for deposits for the interest period relevant to such borrowing adjusted for certain additional costs.
The margin percentage applicable to the receivables based credit facility ~~which~~ is (i) 1.40%, in the case of base rate loans and (ii) 2.40% in the case of Eurocurrency rate loans subject to ~~downward adjustments~~adjustment if Clear Channel’s leverage ratio of total debt to EBITDA decreases below 7 to 1.
Clear Channel is required to pay each lender a commitment fee in respect of any unused commitments under the receivables based credit facility, which is currently 0.375% per annum, subject to ~~downward adjustments if~~adjustment based on Clear Channel’s leverage ~~ratio of total debt to EBITDA decreases below 6 to 1.~~
ratio.
Prepayments
If at any time the sum of the outstanding amounts under the receivables based credit facility (including the letter of credit outstanding amounts and swingline loans thereunder) exceeds the lesser of (i) the borrowing base and (ii) the aggregate commitments under the receivables based credit facility, weClear Channel will be required to repay outstanding loans and cash collateralize letters of credit in an aggregate amount equal to such excess.
     We
Clear Channel may voluntarily repay outstanding loans under the receivables based credit facility at any time without premium or penalty, other than customary “breakage” costs with respect to Eurocurrency rate loans.
Any voluntary prepayments Clear Channel makes will not reduce its commitments under this facility.
Collateral and Guarantees
The receivables based credit facility is guaranteed by, subject to certain exceptions, the guarantors of the senior secured credit facilities. All obligations under the receivables based credit facility, and the guarantees of those obligations, are secured by a perfected ~~first priority~~ security interest in all of ~~our~~Clear Channel’s and all of the guarantors’ accounts receivable and related assets and proceeds thereof, that is senior to the security interest of the senior secured credit facilities in such accounts receivable and related assets and proceeds thereof, subject to permitted liens, including prior liens permitted by the indenture governing the Clear Channel senior notes, and certain exceptions.
The receivables based credit facility includes negative covenants, representations, warranties, events of default, ~~conditions precedent~~ and termination provisions substantially similar to those governing our senior secured credit facilities.
Priority Guarantee Notes
As of December 31, 2011, Clear Channel had outstanding $1.75 billion aggregate principal amount of 9.0% Priority Guarantee Notes due 2021.
The Priority Guarantee Notes mature on March 1, 2021 and bear interest at a rate of 9.0% per annum, payable semi-annually in arrears on March 1 and September 1 of each year, beginning on September 1, 2011. The Priority Guarantee Notes are Clear Channel’s senior obligations and are fully and unconditionally guaranteed, jointly and severally, on a senior basis by the guarantors named in the indenture. The Priority Guarantee Notes and the guarantors’ obligations under the guarantees are secured by (i) a lien on (a) the capital stock of Clear Channel and (b) certain property and related assets that do not constitute “principal property” (as defined in the indenture governing the Clear Channel senior notes), in each case equal in priority to the liens securing the obligations under Clear Channel’s senior secured credit facilities, subject to certain exceptions, and (ii) a lien on the accounts receivable and related assets securing Clear Channel’s receivables based credit facility junior in priority to the lien securing Clear Channel’s obligations thereunder, subject to certain exceptions.
Clear Channel may redeem the Priority Guarantee Notes at its option, in whole or part, at any time prior to March 1, 2016, at a price equal to 100% of the principal amount of the Priority Guarantee Notes redeemed, plus accrued and unpaid interest to the redemption date and plus an applicable premium. Clear Channel may redeem the Priority Guarantee Notes, in whole or in part, on or after March 1, 2016, at the redemption prices set forth in the indenture plus accrued and unpaid interest to the redemption date. At any time on or before March 1, 2014, Clear Channel may elect to redeem up to 40% of the aggregate principal amount of the Priority Guarantee Notes at a redemption price equal to 109.0% of the principal amount thereof, plus accrued and unpaid interest to the redemption date, with the net proceeds of one or more equity offerings.
The indenture governing the Priority Guarantee Notes contains covenants that limit Clear Channel’s ability and the ability of its restricted subsidiaries to, among other things: (i) pay dividends, redeem stock or make other distributions or investments; (ii) incur additional debt or issue certain preferred stock; (iii) modify any of Clear Channel’s existing senior notes; (iv) transfer or sell assets; (v) engage in certain transactions with affiliates; (vi) create restrictions on dividends or other payments by the restricted subsidiaries; and (vii) merge, consolidate or sell substantially all of Clear Channel’s assets. The indenture contains covenants that limit Clear Channel Capital I, LLC’s and Clear Channel’s ability and the ability of its restricted subsidiaries to, among other things: (i) create liens on assets and (ii) materially impair the value of the security interests taken with respect to the collateral for the benefit of the notes collateral agent and the holders of the Priority Guarantee Notes. The indenture also provides for customary events of default.
Senior Cash Pay Notes and Senior Toggle Notes
     ~~We have~~
As of December 31, 2011, Clear Channel had outstanding $796.3 million aggregate principal amount of 10.75% senior cash pay notes due 2016 and ~~$915.2~~$829.8 million aggregate principal amount of 11.00%/11.75% senior toggle notes due 2016.
The senior cash pay notes and senior toggle notes are unsecured and are guaranteed by Clear Channel Capital I, LLC and all of Clear Channel’s existing and future material wholly-owned domestic restricted subsidiaries, subject to certain exceptions. The senior toggle notes mature on August 1, 2016 and may require a special redemption of up to $30.0 million on August 1, 2015. WeClear Channel may elect on each interest election date to pay all or 50% of such interest on the senior toggle notes in cash or by increasing the principal amount of the senior toggle notes or by issuing new senior toggle notes (such increase or issuance, “PIK Interest”). Interest on the senior toggle notes payable in cash will accrue at a rate of 11.00% per annum and PIK Interest will accrue at a rate of 11.75% per annum.
Clear Channel may redeem some or all of the senior cash pay notes and senior toggle notes at any time prior to August 1, 2012, at a price equal to 100% of the principal amount of such notes plus accrued and unpaid interest thereon to the redemption date and an “applicable premium,” as described in the indenture governing such notes. Clear Channel may redeem some or all of the senior cash pay notes and senior toggle notes at any time on or after August 1, 2012 at the redemption prices set forth in the indenture governing such notes. If Clear Channel undergoes a change of control, sells certain of its assets, or issues certain debt, it may be required to offer to purchase the senior cash pay notes and senior toggle notes from holders.
The senior cash pay notes and senior toggle notes are senior unsecured debt and rank equal in right of payment with all of Clear Channel’s existing and future senior debt. Guarantors of obligations under the senior secured credit facilities, the receivables based credit facility and the priority guarantee notes guarantee the senior cash pay notes and senior toggle notes with unconditional guarantees that are unsecured and equal in right of payment to all existing and future senior debt of such guarantors, except that the guarantees are subordinated in right of payment only to the guarantees of obligations under the senior secured credit facilities, the receivables based credit facility and the priority guarantee notes to the extent of the value of the assets securing such indebtedness. In addition, the senior cash pay notes and senior toggle notes and the guarantees are structurally senior to the Clear Channel senior notes and existing and future debt to the extent that such debt is not guaranteed by the guarantors of the senior cash pay notes and senior toggle notes. The senior cash pay notes and senior toggle notes and the guarantees are effectively subordinated to Clear Channel’s existing and future secured debt and that of the guarantors to the extent of the value of the assets securing such indebtedness and are structurally subordinated to all obligations of subsidiaries that do not guarantee the senior cash pay notes and senior toggle notes.
On ~~January 15, 2009,~~July 16, 2010, Clear Channel made ~~a permitted~~the election ~~under the indenture governing the senior toggle notes~~ to pay PIK Interest under the senior toggle notes for the semi-annual interest period commencing February 1, 2009. For subsequent interest periods, Clear Channel must make an election regarding whether the applicable interest payment on the senior toggle notes will be made entirely in cash, entirely through PIK Interest or 50% in cash and 50% in PIK Interest. In the absence of such an election for any interest period, interest on the senior toggle notes entirely in cash, effective for the interest period commencing August 1, 2010. Assuming the cash interest election remains in effect for the remaining term of the notes, Clear Channel will be ~~payable according~~contractually obligated to ~~the election for the immediately preceding interest period. As~~make a ~~result, Clear Channel is deemed to have made the PIK Interest election for future interest periods unless and until Clear Channel elects otherwise.~~
     ~~A contractual~~ payment to bondholders ~~will be required~~of $57.4 million on August 1, 2013. ~~The~~This amount is included in “Interest payments on long-term debt” in the “Contractual ~~Obligations~~Obligations”table of this MD~~&A assumes that~~ &A.
Clear Channel ~~continues~~Senior Notes
As of December 31, 2011, Clear Channel’s senior notes (the “senior notes”) represented approximately $2.0 billion of aggregate principal amount of indebtedness outstanding.
The senior notes were the obligations of Clear Channel prior to ~~make~~ the ~~PIK election.~~
61merger. The senior notes are senior, unsecured obligations that are effectively subordinated to Clear Channel’s secured indebtedness to the extent of the value of Clear Channel’s assets securing such indebtedness and are not guaranteed by any of Clear Channel’s subsidiaries and, as a result, are structurally subordinated to all indebtedness and other liabilities of Clear Channel’s subsidiaries. The senior notes rank equally in right of payment with all of Clear Channel’s existing and future senior indebtedness and senior in right of payment to all existing and future subordinated indebtedness. The senior notes are not guaranteed by Clear Channel’s subsidiaries.
Subsidiary Senior Notes
     In
As of December ~~2009 Clear Channel Worldwide Holdings, Inc. (“CCWH”), an indirect, wholly-owned~~31, 2011, we had outstanding $2.5 billion aggregate principal amount of subsidiary senior notes, which consisted of ~~our publicly traded subsidiary, Clear Channel Outdoor Holdings, Inc. (“CCOH”), issued~~ $500.0 million aggregate principal amount of Series A Senior Notes due 2017 (the “Series A Notes”) and $2.0 billion aggregate principal amount of Series B Senior Notes due 2017 ~~(collectively,~~(the “Series B Notes” and, collectively with the ~~“Notes”~~Series A Notes, the “subsidiary senior notes”). The ~~Notes~~subsidiary senior notes were issued by Clear Channel Worldwide Holdings, Inc. (“CCWH”) and are guaranteed by CCOH, ~~Clear Channel Outdoor, Inc. (“CCOI”), a wholly-owned subsidiary of CCOH,~~CCOI and certain ~~other existing~~of CCOH’s direct and ~~future domestic subsidiaries~~indirect subsidiaries. The subsidiary senior notes bear interest on a daily basis and contain customary provisions, including covenants requiring CCWH to maintain certain levels of ~~CCOH (collectively, the “Guarantors”).~~
credit availability and limitations on incurring additional debt.
The ~~Notes~~subsidiary senior notes are senior obligations that rank pari passu in right of payment to all unsubordinated indebtedness of CCWH and the guarantees of the ~~Notes will~~subsidiary senior notes rank pari passu in right of payment to all unsubordinated indebtedness of the ~~Guarantors.~~
guarantors.
The indentures governing the ~~Notes~~subsidiary senior notes require usCCWH to maintain at least $100 million in cash or other liquid assets or have cash available to be borrowed under committed credit facilities consisting of (i) $50.0 million at the issuer and guarantor entities (principally the Americas outdoor segment) and (ii) $50.0 million at the non-guarantor subsidiaries (principally the International outdoor segment) (together the “Liquidity Amount”), in each case under the sole control of the relevant entity. In the event of a bankruptcy, liquidation, dissolution, reorganization, or similar proceeding of Clear Channel, ~~Communications, Inc.,~~ for the period thereafter that is the shorter of such proceeding and 60 days, the Liquidity Amount shall be reduced to $50.0 million, with a $25.0 million requirement at the issuer and guarantor entities and a $25.0 million requirement at the non-guarantor subsidiaries.
In addition, interest on the ~~Notes~~subsidiary senior notes accrues daily and is payable into an account established by the trustee for the benefit of the bondholders (the “Trustee Account”). Failure to make daily payment on any day does not constitute an event of default so long as (a) no payment or other transfer by CCOH or any of its ~~Subsidiaries~~subsidiaries shall have been made on such day under the cash management sweep with Clear Channel ~~Communications, Inc.~~ and (b) on each semiannual interest payment date the aggregate amount of funds in the Trustee Account is equal to at least the aggregate amount of accrued and unpaid interest on the ~~Notes.~~
subsidiary senior notes.
The indenture governing the Series A Notes contains covenants that limit CCOH and its restricted subsidiaries ability to, among other things:
incur or guarantee additional debt to persons other than Clear Channel and its subsidiaries (other than CCOH) or issue certain preferred stock;
• ~~incur or guarantee additional debt to persons other than Clear Channel Communications and its subsidiaries (other than CCOH) or issue certain preferred stock;~~
• ~~create liens on its restricted subsidiaries assets to secure such debt;~~
• ~~create restrictions on the payment of dividends or other amounts to CCOH from its restricted subsidiaries that are not guarantors of the notes;~~
• ~~enter into certain transactions with affiliates;~~
• ~~merge or consolidate with another person, or sell or otherwise dispose of all or substantially all of its assets;~~
• ~~sell certain assets, including capital stock of its subsidiaries, to persons other than Clear Channel Communications and its subsidiaries (other than CCOH).~~
create liens on its restricted subsidiaries assets to secure such debt;
create restrictions on the payment of dividends or other amounts to CCOH from its restricted subsidiaries that are not guarantors of the notes;
enter into certain transactions with affiliates;
merge or consolidate with another person, or sell or otherwise dispose of all or substantially all of its assets;
sell certain assets, including capital stock of its subsidiaries, to persons other than Clear Channel and its subsidiaries (other than CCOH); and
purchase or otherwise effectively cancel or retire any of the Series A Notes if after doing so the ratio of (a) the outstanding aggregate principal amount of the Series A Notes to (b) the outstanding aggregate principal amount of the Series B Notes shall be greater than 0.250.
In addition, the indenture governing the Series A Notes provides that if CCWH (i) makes an optional redemption of the Series B Notes or purchases or makes an offer to purchase the Series B Notes at or above 100% of the principal amount thereof, then CCWH shall apply a pro rata amount to make an optional redemption or purchase a pro rata amount of the Series A Notes or (ii) makes an asset sale offer under the indenture governing the Series B Notes, then CCWH shall apply a pro rata amount to make an offer to purchase a pro rata amount of Series A Notes.
The indenture governing the Series A Notes does not include limitations on dividends, distributions, investments or asset sales.
The indenture governing the Series B Notes contains covenants that limit CCOH and its restricted subsidiaries ability to, among other things:
incur or guarantee additional debt or issue certain preferred stock;
• ~~incur or guarantee additional debt or issue certain preferred stock;~~
•
redeem, repurchase or retire CCOH’s subordinated debt;
• ~~make certain investments;~~
• ~~create liens on its or its restricted subsidiaries’ assets to secure debt;~~
• ~~create restrictions on the payment of dividends or other amounts to it from its restricted subsidiaries that are not guarantors of the Notes;~~
• ~~enter into certain transactions with affiliates;~~
• ~~merge or consolidate with another person, or sell or otherwise dispose of all or substantially all of its assets;~~
• ~~sell certain assets, including capital stock of its subsidiaries;~~
• ~~designate its subsidiaries as unrestricted subsidiaries;~~
• ~~pay dividends, redeem or repurchase capital stock or make other restricted payments; and~~
62
make certain investments;
create liens on its or its restricted subsidiaries’ assets to secure debt;
create restrictions on the payment of dividends or other amounts to it from its restricted subsidiaries that are not guarantors of the subsidiary senior notes;
enter into certain transactions with affiliates;
merge or consolidate with another person, or sell or otherwise dispose of all or substantially all of its assets;
sell certain assets, including capital stock of its subsidiaries;
designate its subsidiaries as unrestricted subsidiaries;
pay dividends, redeem or repurchase capital stock or make other restricted payments; and
purchase or otherwise effectively cancel or retire any of the Series B Notes if after doing so the ratio of (a) the outstanding aggregate principal amount of the Series A Notes to (b) the outstanding aggregate principal amount of the Series B Notes shall be greater than 0.250. This stipulation ensures, among other things, that as long as the Series A Notes are outstanding, the Series B Notes are outstanding.
The Series A Notes indenture and Series B Notes indenture ~~restricts~~restrict CCOH’s ability to incur additional indebtedness ~~and pay dividends~~but permit CCOH to incur additional indebtedness based on an incurrence test. In order to incur additional indebtedness under this test, CCOH’s debt to adjusted EBITDA ratios (as defined by the ~~indenture)~~indentures) must be lower than 6.5:1 and 3.25:1 for total debt and senior debt, respectively. ~~Similarly in order for~~The indentures contain certain other exceptions that allow CCOH to incur additional indebtedness. The Series B Notes indenture also permits CCOH to pay dividends from the proceeds of indebtedness or the proceeds from asset sales if its debt to adjusted EBITDA ratios (as defined by the ~~indenture) must be~~indentures) are lower than 6.0:1 and 3.0:1 for total debt and senior debt, respectively. ~~If these ratios are~~The Series A Notes indenture does not ~~met, CCOH has~~limit CCOH’s ability to pay dividends. The Series B Notes indenture contains certain exceptions that allow itCCOH to incur additional indebtedness and pay dividends, ~~such as~~including a $500.0 million exception for the payment of dividends. CCOH was in compliance with these covenants as of December 31, ~~2009.~~
2011.
A portion of the proceeds of the ~~Notes~~subsidiary senior notes offering were used to (i) pay the fees and expenses of the ~~Notes~~ offering, (ii) fund $50.0 million of the Liquidity Amount (the $50.0 million liquidity amount of the non-guarantor subsidiaries was satisfied) and (iii) apply $2.0 billion of the cash proceeds (which amount is equal to the aggregate principal amount of the Series B Notes) to repay an equal amount of indebtedness under Clear Channel’s senior secured credit facilities. In accordance with the senior secured credit facilities, the $2.0 billion cash proceeds were applied ratably to the ~~Term Loan~~term loan A, ~~Term Loan~~term loan B, and both delayed draw term loan facilities, and within each such class, such prepayment was applied to remaining scheduled installments of principal.
The balance of the proceeds is available to CCOI for general corporate purposes. In this regard, all of the remaining proceeds could be used to pay dividends from CCOI to CCOH. In turn, CCOH could declare a dividend to its shareholders, of which Clear Channel would receive its proportionate share. Payment of such dividends would not be prohibited by the terms of the ~~Notes~~subsidiary senior notes or any of the loan agreements or credit facilities of CCOI or CCOH.
Refinancing Transactions
During the first quarter of 2011 Clear Channel amended its senior secured credit facilities and its receivables based credit facility and issued $1.0 billion aggregate principal amount of 9.0% Priority Guarantee Notes due 2021 (the “Initial Notes”). We capitalized $39.5 million in fees and expenses associated with the offering and are amortizing them through interest expense over the life of the Initial Notes.
Clear Channel used the proceeds of the Initial Notes offering to prepay $500.0 million of the indebtedness outstanding under its senior secured credit facilities. The $500.0 million prepayment was allocated on a ratable basis between outstanding term loans and revolving credit commitments under Clear Channel’s revolving credit facility, thus permanently reducing the revolving credit commitments under Clear Channel’s revolving credit facility to $1.9 billion. The prepayment resulted in the accelerated expensing of $5.7 million of loan fees recorded in “Other income (expense) – net”.
The proceeds from the offering of the Initial Notes, along with available cash on hand, were also used to repay at maturity $692.7 million in aggregate principal amount of Clear Channel’s 6.25% senior notes, which matured during the first quarter of 2011.
Clear Channel obtained, concurrent with the offering of the Initial Notes, amendments to its credit agreements with respect to its senior secured credit facilities and its receivables based credit facility (revolving credit commitments under the receivables based facility were reduced from $783.5 million to $625.0 million), which were required as a
condition to complete the offering. The amendments, among other things, permit Clear Channel to request future extensions of the maturities of its senior secured credit facilities, provide Clear Channel with greater flexibility in the use of its accordion capacity, provide Clear Channel with greater flexibility to incur new debt, provided that the proceeds from such new debt are used to pay down senior secured credit facility indebtedness, and provide greater flexibility for CCOH and its subsidiaries to incur new debt, provided that the net proceeds distributed to Clear Channel from the issuance of such new debt are used to pay down senior secured credit facility indebtedness.
In June 2011, Clear Channel issued an additional $750.0 million in aggregate principal amount of 9.0% Priority Guarantee Notes due 2021 (the “Additional Notes”) at an issue price of 93.845% of the principal amount of the Additional Notes. Interest on the Additional Notes accrued from February 23, 2011 and accrued interest was paid by the purchaser at the time of delivery of the Additional Notes on June 14, 2011. Of the $703.8 million of proceeds from the issuance of the Additional Notes ($750.0 million aggregate principal amount net of $46.2 million of discount), Clear Channel used $500 million for general corporate purposes (to replenish cash on hand that Clear Channel previously used to pay senior notes at maturity on March 15, 2011 and May 15, 2011) and intends to use the remaining $203.8 million to repay at maturity a portion of Clear Channel’s 5% senior notes which mature in March 2012.
We capitalized an additional $7.1 million in fees and expenses associated with the offering of the Additional Notes and are amortizing them through interest expense over the life of the Additional Notes.
The Additional Notes were issued as additional notes under the indenture, dated as of February 23, 2011 (the “Indenture”), among Clear Channel, the guarantors named therein, Wilmington Trust FSB, as trustee (the “Trustee”), and the other agents named therein, under which Clear Channel previously issued the Initial Notes. The Additional Notes were issued pursuant to a supplemental indenture to the Indenture, dated as of June 14, 2011, between Clear Channel and the Trustee. The Initial Notes and the Additional Notes have identical terms and are treated as a single class.
Dispositions and Other
During 2011, we divested and exchanged 27 radio stations for approximately $22.7 million and recorded a loss of $0.5 million in “Other operating income (expense) – net.”
On October 15, 2010, CCOH transferred its interest in its Branded Cities operations to its joint venture partner, The Ellman Companies. We recognized a loss of $25.3 million in “Other operating income (expense) – net” related to this transfer.
During 2010, our International outdoor segment sold its outdoor advertising business in India, resulting in a loss of $3.7 million included in “Other operating income (expense) – net.” In addition, we sold three radio stations, donated one station, and recorded a gain of $1.3 million in “Other operating income (expense) – net.” We also sold representation contracts and recorded a gain of $6.2 million in “Other operating income (expense) – net.”
During 2009, we sold six radio stations for approximately $12.0 million and recorded a loss of $12.8 million in “Other operating income (expense) – net.” In addition, we exchanged radio stations in our radio markets for assets located in a different market and recognized a loss of $28.0 million in “Other operating income (expense) – net.”
During 2009, we sold international assets for $11.3 million resulting in a gain of $4.4 million in “Other operating income (expense) – net.” In addition, we sold assets for $6.8 million in our Americas outdoor segment and recorded a gain of $4.9 million in “Other operating income (expense) – net.” We sold our taxi advertising business and recorded a loss of $20.9 million in our Americas outdoor segment included in “Other operating income (expense) –net.” We also received proceeds of $18.3 million from the sale of corporate assets during 2009 and recorded a loss of $0.7 million in “Other operating income (expense) – net.”
In addition, we sold our remaining interest in Grupo ACIR for approximately $40.5 million and recorded a loss of approximately $5.8 million during 2009.
     During 2008, Clear Channel received proceeds of $110.5 million related to the sale of radio stations recorded as investing cash flows from discontinued operations and recorded a gain of $28.8 million as a component of “Income from discontinued operations, net” during 2008. Clear Channel received proceeds of $1.0 billion related to the sale of its television business recorded as investing cash flows from discontinued operations and recorded a gain of $662.9 million as a component of “Income from discontinued operations, net”.
     In addition, Clear Channel sold its 50% interest in Clear Channel Independent during 2008 and recognized a gain of $75.6 million in “Equity in earnings (loss) of nonconsolidated affiliates” based on the fair value of the equity securities received in the pre-merger period.
     Clear Channel sold a portion of its investment in Grupo ACIR for approximately $47.0 million on July 1, 2008 and recorded a gain of $9.2 million in “Equity in earnings (loss) of nonconsolidated affiliates.”
63
Uses of Capital
Debt Repurchases, ~~Tender Offers,~~ Maturities and Other
     ~~During~~
Between 2009 and ~~2008,~~2011, our indirect wholly-owned subsidiaries, CC ~~Finco, LLC, and~~Investments, CC Finco ~~II,~~and Clear Channel Acquisition, LLC (“CC Acquisition”), repurchased certain of Clear Channel’s outstanding senior notes, senior cash pay and senior toggle notes through open market repurchases, privately negotiated transactions and tenders as shown in the table below. Notes repurchased and held by CC Investments, CC Finco ~~LLC~~ and CC ~~Finco II, LLC,~~Acquisition are eliminated in consolidation.

Year Ended December 31,
2009 2008
(In thousands) Post-Merger Post-Merger
CC Finco, LLC
Principal amount of debt repurchased $ 801,302 $ 102,241
Purchase accounting adjustments⁽¹⁾
(146,314 ) (24,367 )
Deferred loan costs and other (1,468 ) —
Gain recorded in “Other income (expense) – net”⁽²⁾
(368,591 ) (53,449 )

Cash paid for repurchases of long-term debt $ 284,929 $ 24,425

CC Finco II, LLC
Principal amount of debt repurchased⁽³⁾
$ 433,125 $ —
Deferred loan costs and other (813 ) —
Gain recorded in “Other income (expense) – net”⁽²⁾
(373,775 ) —

Cash paid for repurchases of long-term debt $ 58,537 $ —

(In thousands)    Years Ended December 31,
   2011    2010    2009
CC Investments

Principal amount of debt repurchased
     $ —           $     185,185         $ —
Deferred loan costs and other
   —         104       —
Gain recorded in “Other income (expense) – net”⁽²⁾
   —         (60,289)       —






Cash paid for repurchases of long-term debt
     $ —           $ 125,000         $ —






CC Finco

Principal amount of debt repurchased
     $ 80,000         $ —           $ 801,302
Purchase accounting adjustments⁽¹⁾
   (20,476)       —         (146,314)
Deferred loan costs and other
   —         —         (1,468)
Gain recorded in “Other income (expense) – net”⁽²⁾
   (4,274)       —         (368,591)






Cash paid for repurchases of long-term debt
     $ 55,250         $ —           $ 284,929






CC Acquisition

Principal amount of debt repurchased⁽³⁾
     $ —           $ —           $ 433,125
Deferred loan costs and other
   —         —         (813)
Gain recorded in “Other income (expense) – net”⁽²⁾
   —         —         (373,775)






Cash paid for repurchases of long-term debt
     $ —           $ —           $ 58,537






(1) Represents unamortized fair value purchase accounting discounts recorded as a result of the merger.

(2) CC Investments, CC Finco ~~LLC,~~ and CC ~~Finco II, LLC,~~Acquisition repurchased certain of Clear Channel’s ~~legacy~~senior notes, senior cash pay notes and senior toggle notes at a discount, resulting in a gain on the extinguishment of debt.

(3) CC ~~Finco II, LLC~~Acquisition immediately cancelled these notes subsequent to the purchase.
     ~~On January 15, 2008,~~
During 2011, Clear Channel ~~redeemed~~repaid its ~~4.625%~~4.4% senior notes at ~~their~~ maturity for $140.2 million (net of $109.8 million principal amount held by and repaid to a subsidiary of Clear Channel), plus accrued interest, with available cash on hand.
As noted in the “Refinancing Transactions” section of MD&A above, Clear Channel repaid its 6.25% senior notes at maturity for $692.7 (net of $57.3 million principal amount held by and repaid to a subsidiary of Clear Channel) with proceeds from the February 2011 Offering.
Prior to, and in connection with the June 2011 Offering, Clear Channel repaid all amounts outstanding under its receivables based credit facility on June 8, 2011, using cash on hand. This voluntary repayment did not reduce Clear Channel’s commitments under this facility and Clear Channel may reborrow amounts under this facility at any time. In addition, on June 27, 2011, Clear Channel made a voluntary payment of $500.0 million on its revolving credit facility, which did not reduce Clear Channel’s commitments under this facility and Clear Channel may reborrow amounts under this facility at any time.
During 2010, Clear Channel repaid its remaining 7.65% senior notes upon maturity for $138.8 million, including $5.1 million of accrued interest, with proceeds from its ~~bank credit facility. On June 15, 2008,~~delayed draw term loan facility that was specifically designated for this purpose. Also during 2010, Clear Channel ~~redeemed~~repaid its ~~6.625%~~remaining 4.5% senior notes ~~at their~~upon maturity for ~~$125.0~~$240.0 million with available cash on hand.
During 2009, Clear Channel ~~terminated its cross currency swaps on July 30, 2008 by paying the counterparty $196.2 million from available cash on hand.~~
     On August 7, 2008, Clear Channel announced that it commenced a cash tender offer and consent solicitation for the outstanding $750.0 million principal amount of 7.65% senior notes due 2010. The tender offer and consent payment expired on September 9, 2008. The aggregate principal amount of 7.65% senior notes validly tendered and accepted for payment was $363.9 million. Clear Channel recorded a $21.8 million loss in “Other income (expense) – net” during the pre-merger period as a result of the tender.
     Clear Channel repurchased $639.2 million aggregate principal amount of the AMFM Operating Inc. 8% senior notes pursuant to a tender offer and consent solicitation in connection with the merger. The remaining 8% senior notes were redeemed at maturity on November 1, 2008. The aggregate loss on the extinguishment of debt recorded in 2008 as a result of the tender offer for the AMFM Operating Inc. 8% notes was $8.0 million.
     On November 24, 2008, Clear Channel announced that it commenced another cash tender offer to purchase its outstanding 7.65% Senior Notes due 2010. The tender offer and consent payment expired on December 23, 2008. The aggregate principal amount of 7.65% senior notes validly tendered and accepted for payment was $252.4 million. The aggregate gain on the extinguishment of debt recorded during the post-merger period as a result of the tender offer for the 7.65% senior notes due 2010 was $74.7 million.
     ~~During the second quarter of 2009, we redeemed~~repaid the remaining principal amount of ~~Clear Channel’s~~its 4.25% senior notes at maturity with a draw under the $500.0 million delayed draw term loan facility that iswas specifically designated for this purpose.
64
Capital Expenditures
Capital expenditures for the years ended December 31, 2011, 2010 and 2009 were as follows:
(In millions)    Years Ended December 31,
   2011    2010    2009
CCME
     $ 61.4             $ 35.5             $ 41.9
Americas outdoor advertising
   131.1           96.7           84.4
International outdoor advertising
   160.0           98.6           91.5
Corporate and Other
   9.8           10.7           6.0






Total capital expenditures
     $         362.3             $         241.5             $         223.8






Our capital expenditures are not of significant size individually and primarily relate to the ongoing deployment of digital displays and recurring maintenance.
Dividends
We have never paid cash dividends on our Class A common stock, and we currently do not intend to pay cash dividends on our Class A common stock in the future. Clear Channel’s debt financing arrangements include restrictions on its ability to pay dividends, which in turn affects our ability to pay dividends.
     ~~Prior~~
Acquisitions
On April 29, 2011, we completed our Traffic acquisition for $24.3 million to add a complementary traffic operation to our existing traffic business. Immediately after closing, the ~~merger,~~acquired subsidiaries repaid pre-existing, intercompany debt owed by the subsidiaries to Westwood One, Inc. in the amount of $95.0 million.
During 2011, we also acquired Brouwer & Partners, a street furniture business in Holland, for $12.5 million.
Stock Purchases
On August 9, 2010, Clear Channel ~~declared~~announced that its board of directors approved a ~~$93.4~~stock purchase program under which Clear Channel or its subsidiaries may purchase up to an aggregate of $100 million ~~dividend on December 3, 2007 payable to shareholders~~ of ~~record on December 31, 2007~~the Class A common stock of the Company and/or the Class A common stock of CCOH. The stock purchase program does not have a fixed expiration date and ~~paid on January 15, 2008.~~
~~Capital Expenditures~~
     ~~Capital expenditures were $223.8 million in the year ended December 31, 2009. Capital expenditures on a combined basis~~may be modified, suspended or terminated at any time at Clear Channel’s discretion. During 2011, CC Finco purchased 1,553,971 shares of CCOH’s Class A common stock through open market purchases for ~~the year ended December 31, 2008 were $430.5~~approximately $16.4 million.

Year Ended December 31, 2009
Americas Outdoor International Corporate
(In millions) Radio Advertising Outdoor Advertising and Other Total
Non-revenue producing $ 41.9 $ 23.3 $ 23.8 $ 6.0 $ 95.0
Revenue producing — 61.1 67.7 — 128.8

$ 41.9 $ 84.4 $ 91.5 $ 6.0 $ 223.8

~~Acquisitions~~
     ~~During 2009, our Americas outdoor segment paid $5.0 million primarily for the acquisition of land and buildings.~~
     We acquired FCC licenses in our radio segment for $11.7 million in cash during 2008. We acquired outdoor display faces and additional equity interests in international outdoor companies for $96.5 million in cash during 2008. Our national representation business acquired representation contracts valued at $68.9 million during 2008.
Purchases of Additional Equity Interests
During 2009, our Americas outdoor segment purchased the remaining 15% interest in our consolidated subsidiary, Paneles Napsa S.A., for $13.0 million and our International outdoor segment acquired an additional 5% interest in our consolidated subsidiary, Clear Channel Jolly Pubblicita SPA, for $12.1 million.

Certain Relationships with the Sponsors
     ~~We are~~ and Management
Clear Channel is party to a management agreement with certain affiliates of Bain Capital Partners, LLC and Thomas H. Lee Partners, L.P. (together, the ~~Sponsors~~“Sponsors”) and certain other parties pursuant to which such affiliates of the Sponsors will provide management and financial advisory services until 2018. These arrangements require management fees to be paid to such affiliates of the Sponsors for such services at a rate not greater than $15.0 million per year, plus reimbursable expenses. During the ~~year~~years ended December 31, 2011, 2010 and 2009, we recognized management fees and reimbursable expenses of ~~$15.0~~$15.7 million, $17.1 million and $20.5 million, respectively.
As part of the employment agreement for our new Chief Executive Officer, we agreed to provide the Chief Executive Officer an aircraft for his personal and business use during the term of his employment. Subsequently, one of our subsidiaries entered into a six-year aircraft lease with Yet Again Inc., a company controlled by the Chief Executive Officer, to lease an airplane for use by the Chief Executive Officer in exchange for a one-time upfront lease payment of $3.0 million. ~~For~~Our subsidiary also is responsible for all related taxes, insurance, and maintenance costs during the ~~post-merger period~~lease term (other than discretionary upgrades, capital improvements or refurbishment). If the lease is terminated prior to the expiration of ~~2008, we recognized Sponsors’ management fees~~its term, Yet Again Inc. will be required to refund a pro rata portion of ~~$6.3 million.~~
     ~~In addition, we reimbursed~~ the ~~Sponsors for additional expenses in~~lease payment and a pro rata portion of the tax associated with the amount of ~~$5.5~~the lease payment refunded, based upon the period remaining in the term.
Additionally, subsequent to December 31, 2011, Clear Channel is in the process of negotiating a sublease with Pilot Group Manager, LLC, an entity that our Chief Executive Officer is a member of and an investor in, to rent space in Rockefeller Plaza in New York City through July 29, 2014. Fixed rent is expected to be approximately $0.6 million annually plus a proportionate share of building expenses. Pending finalization of the sublease, Clear Channel reimbursed Pilot Group Manager, LLC $40,000 per month for the ~~year ended December 31, 2009.~~
     ~~In connection with the merger, we paid certain affiliates~~use of ~~the Sponsors $87.5 million~~its office space in fees and expenses for financial and structural advice and analysis, assistance with due diligence investigations and debt financing negotiations and $15.9 million for reimbursement of escrow and other out-of-pocket expenses. This amount was allocated between merger expenses, deferred loan costs or includedRockefeller Plaza in ~~the overall purchase price of the merger.~~
New York City.
Commitments, Contingencies and Guarantees
We are currently involved in certain legal ~~proceedings. Based on current assumptions, we~~proceedings arising in the ordinary course of business and, as required, have accrued anour estimate of the probable costs for ~~the~~ resolution of ~~these claims. Future~~those claims for which the occurrence of loss is probable and the amount can be reasonably estimated. These estimates have been developed in consultation with counsel and are based upon an analysis of potential results, assuming a combination of litigation and settlement strategies. It is possible, however, that future results of operations for any particular period could be materially affected by changes in our assumptions or the effectiveness of our strategies related to these ~~assumptions.~~
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proceedings. Please refer to Item 3. Legal Proceedings within Part I of this Annual Report on
Form 10-K.
Certain agreements relating to acquisitions provide for purchase price adjustments and other future contingent payments based on the financial performance of the acquired companies generally over a one to five-year period. The aggregate of these contingent payments, if performance targets are met, would not significantly impact our financial position or results of operations.
In addition to our scheduled maturities on our debt, we have future cash obligations under various types of contracts. We lease office space, certain broadcast facilities, equipment and the majority of the land occupied by our outdoor advertising structures under long-term operating leases. Some of our lease agreements contain renewal options and annual rental escalation clauses (generally tied to the consumer price index), as well as provisions for our payment of utilities and maintenance.
We have minimum franchise payments associated with non-cancelable contracts that enable us to display advertising on such media as buses, ~~taxis,~~ trains, bus shelters and terminals. The majority of these contracts contain rent provisions that are calculated as the greater of a percentage of the relevant advertising revenue or a specified guaranteed minimum annual payment. Also, we have non-cancelable contracts in our radio broadcasting operations related to program rights and music license fees.
In the normal course of business, our broadcasting operations have minimum future payments associated with employee and talent contracts. These contracts typically contain cancellation provisions that allow us to cancel the contract with good cause.
The scheduled maturities of ~~our~~Clear Channel’s senior secured credit facilities, receivables based facility, senior cash pay and senior toggle notes, other long-term debt outstanding, and our future minimum rental commitments under non-cancelable lease agreements, minimum payments under other non-cancelable contracts, payments under employment/talent contracts, capital expenditure commitments, and other long-term obligations as of December 31, ~~2009~~2011 are as follows:

(In thousands) Payments due by Period
Contractual Obligations Total 2010 2011-2012 2013-2014 Thereafter
Long-term Debt
Senior Secured Debt $ 13,928,111 $ — $ 26,095 $ 3,315,026 $ 10,586,990
Senior Cash Pay and Senior Toggle Notes⁽¹⁾
1,711,450 — — — 1,711,450
Clear Channel Senior Notes 3,267,549 356,156 1,082,829 853,564 975,000
Subsidiary Senior Notes 2,500,000 — — — 2,500,000
Other Long-term Debt 82,882 47,077 31,769 4,036 —
Interest payments on long-term debt⁽²⁾
7,270,202 1,152,658 2,033,704 2,334,780 1,749,060

Non-Cancelable Operating Leases 2,649,573 367,524 588,254 468,144 1,225,651
Non-Cancelable Contracts 2,294,611 541,683 748,929 423,184 580,815
Employment/Talent Contracts 458,903 168,505 179,442 55,689 55,267
Capital Expenditures 136,262 67,372 45,638 19,837 3,415
Other long-term obligations⁽³⁾
152,499 1,224 13,077 3,448 134,750

Total⁽⁴⁾
$ 34,452,042 $ 2,702,199 $ 4,749,737 $ 7,477,708 $ 19,522,398

(In thousands)    Payments due by Period
Contractual Obligations
   Total    2012    2013-2014    2015-2016    Thereafter
Long-term Debt:

Secured Debt
     $   14,577,149             $   5,938             $   2,456,703             $   10,363,454             $   1,751,054
Senior Cash Pay and Senior Toggle Notes⁽¹⁾
   1,626,081           —           —           1,626,081           —
Clear Channel Senior Notes
   1,998,415           249,851           773,564           500,000           475,000
Subsidiary Senior Notes
   2,500,000           —           —           —           2,500,000
Other Long-term Debt
   19,860           19,860           —           —           —
Interest payments on long-term debt⁽²⁾
   6,446,889           1,279,981           2,395,966           1,625,771           1,145,171
Non-cancelable operating leases
   2,808,273           383,456           629,185           507,752           1,287,880
Non-cancelable contracts
   2,472,542           548,830           803,639           599,712           520,361
Employment/talent contracts
   222,620           83,455           81,672           57,493           —
Capital expenditures
   148,878           67,879           39,220           34,858           6,921
Unrecognized tax benefits⁽³⁾
   217,172           4,500           —           —           212,672
Other long-term obligations⁽⁴⁾
   147,735           71           10,625           28,824           108,215










Total⁽⁵⁾
     $   33,185,614             $   2,643,821             $   7,190,574             $   15,343,945             $   8,007,274










(1) On ~~January 15, 2009,~~July 16, 2010, Clear Channel made ~~a permitted~~the election ~~under the indenture governing the senior toggle notes~~ to pay PIK Interest with respect to 100% of the senior toggle notes for the semi-annual interest period commencing February 1, 2009. For subsequent interest periods, Clear Channel must make an election regarding whether the applicable interest payment on the senior toggle notes will be made entirely in cash, entirely through PIK Interest or 50% in cash and 50% in PIK Interest. In the absence of such an election for any interest period, interest on the senior toggle notes ~~will be payable according to the election~~entirely in cash, effective for the ~~immediately preceding~~ interest ~~period. As a result,~~period commencing August 1, 2010. Clear Channel is deemed to have made the ~~PIK Interest~~cash interest election for future interest periods unless and until Clear Channel elects otherwise. ~~Therefore,~~Assuming the cash interest ~~payments on the senior toggle notes assume that the PIK Interest~~ election remains ~~the default election over~~in effect for the term of the ~~notes. Assuming the PIK Interest election remains in effect over the term of the Notes, we are~~notes, Clear Channel is contractually obligated to make a payment of ~~$486.1~~$57.4 million on August 1, 2013 which is included in “Interest payments on long-term debt” in the table above.
(2) Interest payments on the senior secured credit facilities, other than the revolving credit facility, assume the obligations are repaid in accordance with the amortization schedule ~~included~~(after giving effect to the December 2009 prepayment of $2.0 billion of term loans with proceeds from the issuance of subsidiary senior notes and the $500.0 million repayment of revolving credit facility and term loans associated with the priority guarantee notes, both discussed elsewhere in ~~the credit agreement~~this MD&A) and the interest rate is held constant over the remaining ~~term based on the weighted average interest rate at December 31, 2009 on the senior secured credit facilities.~~term.
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Interest payments related to the revolving credit facility assume the balance and interest rate as of December 31, 2011 is held constant over the remaining term.
Interest payments on $2.5 billion of the Term Loan B facility are effectively fixed at an interest rate of 4.4%, plus applicable margins, per annum, as a result of an aggregate $2.5 billion interest rate swap agreement maturing in September 2013. Interest expense assumes the rate is fixed through maturity of the remaining swap, at which point the rate reverts back to the floating rate in effect at December 31, 2011.
Interest payments related to the revolving credit facility assume the balance and interest rate as of December 31, 2009 is held constant over the remaining term. Interest payments on $6.0 billion of the Term Loan B facility are effectively fixed at interest rates between 2.6% and 4.4%, plus applicable margins, per annum, as a result of an aggregate $6.0 billion notional amount of interest rate swap agreements. $3.5 billion notional amount of interest rate swap agreements mature in October of 2010 with the remaining $2.5 billion maturing in September 2013. Interest expense assumes the rate is fixed through maturity of the swaps, at which point the rate reverts back to the floating rate in effect at December 31, 2009.
(3) The non-current portion of the unrecognized tax benefits is included in the “Thereafter” column as we cannot reasonably estimate the timing or amounts of additional cash payments, if any, at this time. For additional information, see Note 10 included in Item 8 of Part II of this Annual Report on Form 10-K.
(4) Other long-term obligations consist of ~~$51.3~~$51.0 million related to asset retirement obligations recorded pursuant to ASC 410-20, which assumes the underlying assets will be removed at some period over the next 50 years. Also included are ~~$36.1~~$31.8 million of contract payments in our syndicated radio and media representation businesses and ~~$65.1~~$65.0 million of various other long-term obligations.
~~(4)~~ (5) Excluded from the table is ~~$672.1~~$347.4 million related to various obligations with no specific contractual commitment or maturity, ~~$308.3 million of which relates to unrecognized tax benefits and accrued interest and penalties recorded pursuant to ASC 740-10 and $237.2~~$159.1 million of which relates to the fair value of our interest rate swap ~~agreements.~~agreement.
~~Market~~
SEASONALITY
Typically, our CCME, Americas outdoor and International outdoor segments experience their lowest financial performance in the first quarter of the calendar year, with International outdoor historically experiencing a loss from operations in that period. Our International outdoor segment typically experiences its strongest performance in the second and fourth quarters of the calendar year. We expect this trend to continue in the future.
MARKET RISK
We are exposed to market risk arising from changes in market rates and prices, including movements in interest rates, equity security prices and foreign currency exchange rates.
Equity Price Risk
The carrying value of our available-for-sale equity securities is affected by changes in their quoted market prices. It is estimated that a 20% change in the market prices of these securities would change their carrying value and our comprehensive loss at December 31, 2011 by approximately $14.6 million.
Interest Rate Risk
     ~~After the merger a~~
A significant amount of our long-term debt bears interest at variable rates. Accordingly, our earnings will be affected by changes in interest rates. At December 31, ~~2009~~2011 we had an interest rate swap ~~agreements~~agreement with a ~~$6.0~~$2.5 billion notional amount that effectively fixes interest rates on a portion of our floating rate debt at ~~rates between 2.6% and~~a rate of 4.4%, plus applicable margins, per annum. The fair value of ~~these agreements~~this agreement at December 31, ~~2009~~2011 was a liability of ~~$237.2~~$159.1 million. At December 31, ~~2009,~~2011, approximately ~~36%~~50% of our aggregate principal amount of long-term debt, including taking into consideration debt on which we have entered into ~~pay-fixed rate receive floating rate~~a pay-fixed-rate-receive-floating-rate swap ~~agreements,~~agreement, bears interest at floating rates.
Assuming the current level of borrowings and interest rate swap contracts and assuming a 30% change in LIBOR, it is estimated that our interest expense for the year ended December 31, ~~2009~~2011 would have changed by approximately ~~$5.6~~$9.1 million.
In the event of an adverse change in interest rates, management may take actions to further mitigate its exposure. However, due to the uncertainty of the actions that would be taken and their possible effects, ~~this~~the preceding interest rate sensitivity analysis assumes no such actions. Further, the analysis does not consider the effects of the change in the level of overall economic activity that could exist in such an environment.

Foreign Currency Exchange Rate Risk
We have operations in countries throughout the world. Foreign operations are measured in their local ~~currencies except in hyper-inflationary countries in which we operate.~~currencies. As a result, our financial results could be affected by factors such as changes in foreign currency exchange rates or weak economic conditions in the foreign markets in which we have operations. We believe we mitigate a small portion of our exposure to foreign currency fluctuations with a natural hedge through borrowings in currencies other than the U.S. dollar. Our foreign operations reported a net ~~loss~~income of approximately ~~$285.8~~$59.5 million for the year ended December 31, ~~2009.~~2011. We estimate a 10% ~~change~~increase in the value of the U.S. dollar relative to foreign currencies would have ~~changed~~increased our net loss for the year ended December 31, ~~2009~~2011 by approximately ~~$28.6 million.~~
     ~~Our earnings are also affected by fluctuations~~$5.9 million and that a 10% decrease in the value of the U.S. dollar ~~as compared~~relative to foreign currencies as a result of our equity method investments in various countries. It is estimated that the result of a 10% fluctuation in the value of the dollar relative to these foreign currencies at December 31, 2009 would ~~change our equity in loss of nonconsolidated affiliates by $2.1 million and would change~~have decreased our net loss by ~~approximately $1.3 million for the year ended December 31, 2009.~~
a corresponding amount.
This analysis does not consider the implications that such currency fluctuations could have on the overall economic activity that could exist in such an environment in the ~~U.S.~~United States or the foreign countries or on the results of operations of these foreign entities.
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Inflation
~~New Accounting Pronouncements~~
     ~~In January 2010, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2010-02,~~~~Accounting and Reporting for Decreases in Ownership of a Subsidiary—a Scope Clarification~~~~. The update is to ASC Topic 810,~~~~Consolidation~~. The ASU clarifies that the decrease-in-ownership provisions of ASC 810-10 and related guidance apply to (1) a subsidiary or group of assets that is a business or nonprofit activity, (2) a subsidiary or group of assets that is a business or nonprofit activity that is transferred to an equity method investee or joint venture, and (3) an exchange of a group of assets that constitutes a business or nonprofit activity for a noncontrolling interest in an entity (including an equity method investee or joint venture). In addition, the ASU expands the information an entity is required to disclose upon deconsolidation of a subsidiary. This standard is effective for fiscal years ending on or after December 15, 2009 with retrospective application required for the first period in which the entity adopted Statement of Financial Accounting Standards No. 160. We adopted the amendment upon issuance with no material impact to our financial position or results of operations.
     ~~In December 2009, the FASB issued ASU No. 2009-17,~~~~Improvements to Financial Reporting by Enterprises Involved with Variable Interest Entities~~~~. The update is to ASC Topic 810,~~~~Consolidation~~. This standard amends ASC 810-10-25 by requiring consolidation of certain special purpose entities that were previously exempted from consolidation. The revised criteria will define a controlling financial interest for requiring consolidation as: the power to direct the activities that most significantly affect the entity’s performance, and (1) the obligation to absorb losses of the entity or (2) the right to receive benefits from the entity. This standard is effective for fiscal years beginning after November 15, 2009. We adopted the amendment on January 1, 2010 with no material impact to our financial position or results of operations.
     ~~In August 2009, the FASB issued ASU No. 2009-05,~~~~Measuring Liabilities at Fair Value~~~~. The update is to ASC Subtopic 820-10,~~~~Fair Value Measurements and Disclosures-Overall~~, for the fair value measurement of liabilities. The purpose of this update is to reduce ambiguity in financial reporting when measuring the fair value of liabilities. The guidance provided in this update is effective for the first reporting period beginning after the date of issuance. We adopted the amendment on October 1, 2009 with no material impact to our financial position or results of operations.
     ~~Statement of Financial Accounting Standards No. 168,~~~~The FASB Accounting Standards Codification~~^TM ~~and the Hierarchy of Generally Accepted Accounting Principles~~, codified in ASC 105-10, was issued in June 2009. ASC 105-10 identifies the sources of accounting principles and the framework for selecting the principles used in the preparation of financial statements of nongovernmental entities that are presented in conformity with GAAP in the United States. ASC 105-10 establishes the ASC as the source of authoritative GAAP recognized by the FASB to be applied by nongovernmental entities. Following this statement, the FASB will issue new standards in the form of ASUs. ASC 105-10 is effective for financial statements issued for interim and annual periods ending after September 15, 2009. We adopted the provisions of ASC 105-10 on July 1, 2009.
     ~~Statement of Financial Accounting Standards No. 167,~~~~Amendments to FASB Interpretation No. 46(R)~~(“Statement No. 167”), which is not yet codified, was issued in June 2009. Statement No. 167 shall be effective as of the beginning of each reporting entity’s first annual reporting period that begins after November 15, 2009, for interim periods within that first annual reporting period, and for interim and annual reporting periods thereafter. Earlier application is prohibited. Statement No. 167 amends Financial Accounting Standards Board Interpretation No. 46(R),~~Consolidation of Variable Interest Entities~~, codified in ASC 810-10-25, to replace the quantitative-based risks and rewards calculation for determining which enterprise, if any, has a controlling financial interest in a variable interest entity with an approach focused on identifying which enterprise has the power to direct the activities of a variable interest entity that most significantly impact the entity’s economic performance and (1) the obligation to absorb losses of the entity or (2) the right to receive benefits from the entity. An approach that is expected to be primarily qualitative will be more effective for identifying which enterprise has a controlling financial interest in a variable interest entity. Statement No. 167 requires an additional reconsideration event when determining whether an entity is a variable interest entity when any changes in facts and circumstances occur such that the holders of the equity investment at risk, as a group, lose the power from voting rights or similar rights of those investments to direct the activities of the entity that most significantly impact the entity’s economic performance. It also requires ongoing assessments of whether an enterprise is the primary beneficiary of a variable interest entity. These requirements will provide more relevant and timely information to users of financial statements. Statement No. 167 amends ASC 810-10-25 to require additional disclosures about an enterprise’s involvement in variable interest entities, which will enhance the information provided to users of financial statements. We adopted Statement No. 167 on January 1, 2010 with no material impact to our financial position or results of operations.
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     ~~Statement of Financial Accounting Standards No. 165,~~~~Subsequent Events~~, codified in ASC 855-10, was issued in May 2009. The provisions of ASC 855-10 are effective for interim and annual periods ending after June 15, 2009 and are intended to establish general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. It requires the disclosure of the date through which an entity has evaluated subsequent events and the basis for that date—that is, whether that date represents the date the financial statements were issued or were available to be issued. This disclosure should alert all users of financial statements that an entity has not evaluated subsequent events after that date in the set of financial statements being presented. In accordance with the provisions of ASC 855-10, we currently evaluate subsequent events through the date the financial statements are issued.
     ~~FASB Staff Position Emerging Issues Task Force 03-6-1,~~~~Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities~~, codified in ASC 260-10-45, was issued in June 2008. ASC 260-10-45 clarifies that unvested share-based payment awards with a right to receive nonforfeitable dividends are participating securities. Guidance is also provided on how to allocate earnings to participating securities and compute basic earnings per share using the two-class method. All prior-period earnings per share data presented shall be adjusted retrospectively (including interim financial statements, summaries of earnings, and selected financial data) to conform with the provisions of ASC 260-10-45. We retrospectively adopted the provisions of ASC 260-10-45 on January 1, 2009. The impact of adopting ASC 260-10-45 decreased previously reported basic earnings per share by $.01 for the pre-merger year ended December 31, 2007.
     ~~Statement of Financial Accounting Standards No. 160,~~~~Noncontrolling Interests in Consolidated Financial Statements — an amendment of ARB No. 51~~, codified in ASC 810-10-45, was issued in December 2007. ASC 810-10-45 clarifies the classification of noncontrolling interests in consolidated statements of financial position and the accounting for and reporting of transactions between the reporting entity and holders of such noncontrolling interests. Under this guidance, noncontrolling interests are considered equity and should be reported as an element of consolidated equity, net income will encompass the total income of all consolidated subsidiaries and there will be separate disclosure on the face of the income statement of the attribution of that income between the controlling and noncontrolling interests, and increases and decreases in the noncontrolling ownership interest amount will be accounted for as equity transactions. The provisions of ASC 810-10-45 are effective for the first annual reporting period beginning on or after December 15, 2008, and earlier application is prohibited. Guidance is required to be adopted prospectively, except for reclassifying noncontrolling interests to equity, separate from the parent’s shareholders’ equity, in the consolidated statement of financial position and recasting consolidated net income (loss) to include net income (loss) attributable to both the controlling and noncontrolling interests, both of which are required to be adopted retrospectively. We adopted the provisions of ASC 810-10-45 on January 1, 2009, which resulted in a reclassification of approximately $426.2 million of noncontrolling interests to shareholders’ equity.
     ~~Statement of Financial Accounting Standards No. 161,~~~~Disclosures about Derivative Instruments and Hedging Activities~~, codified in ASC 815-10-50, was issued in March 2008. ASC 815-10-50 requires additional disclosures about how and why an entity uses derivative instruments, how derivative instruments and related hedged items are accounted for and how derivative instruments and related hedged items effect an entity’s financial position, results of operations and cash flows. We adopted the provisions of ASC 815-10-50 on January 1, 2009. Please refer to Note H in Item 8 of Part II of this Annual Report on Form 10-K for disclosure required by ASC 815-10-50.
     ~~FASB Staff Position No. FAS 157-2,~~~~Effective Date of FASB Statement No. 157~~~~, codified in ASC 820-10, was issued in February 2008. ASC 820-10 delays the effective date of FASB Statement No. 157,~~~~Fair Value Measurements~~, for nonfinancial assets and liabilities, except for items that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually), to fiscal years beginning after November 15, 2008. We adopted the provisions of ASC 820-10 on January 1, 2009 with no material impact to our financial position or results of operations.
     ~~FASB Staff Position No. FAS 157-4,~~~~Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly~~, codified in ASC 820-10, was issued in April 2009. ASC 820-10-35 provides additional guidance for estimating fair value when the volume and level of activity for the asset or liability have significantly decreased. ASC 820-10 also includes guidance on identifying circumstances that indicate a transaction is not orderly. This guidance is effective for interim and annual reporting periods ending after June 15, 2009, and shall be applied prospectively. Early adoption is permitted for periods ending after March 15, 2009. Earlier adoption for periods ending before March 15, 2009 is not permitted. We adopted the provisions of ASC 820-10 on April 1, 2009 with no material impact to our financial position or results of operations.
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     ~~FASB Staff Position No. FAS 115-2 and FAS 124-2,~~~~Recognition and Presentation of Other-Than-Temporary Impairments~~, codified in ASC 320-10-35, was issued in April 2009. It amends the other-than-temporary impairment guidance in U.S. GAAP for debt securities to make the guidance more operational and to improve the presentation and disclosure of other-than-temporary impairments on debt and equity securities in the financial statements. ASC 320-10-35 does not amend existing recognition and measurement guidance related to other-than-temporary impairments of equity securities. This guidance is effective for interim and annual reporting periods ending after June 15, 2009, with early adoption permitted for periods ending after March 15, 2009. Earlier adoption for periods ending before March 15, 2009 is not permitted. We adopted the provisions of ASC 320-10-35 on April 1, 2009 with no material impact to our financial position or results of operations.
     ~~FASB Staff Position No. FAS 107-1 and APB 28-1,~~~~Interim Disclosures about Fair Value of Financial Instruments~~, codified in ASC 825-10-50, was issued in April 2009. ASC 825-10-50 amends prior authoritative guidance to require disclosures about fair value of financial instruments for interim reporting periods of publicly traded companies as well as in annual financial statements. The provisions of ASC 825-10-50 are effective for interim reporting periods ending after June 15, 2009, with early adoption permitted for periods ending after March 15, 2009. We adopted the disclosure requirements of ASC 825-10-50 on April 1, 2009.
~~Inflation~~
Inflation is a factor in the economies in which we do business and we continue to seek ways to mitigate its effect. Inflation has affected our performance in terms of higher costs for wages, salaries and equipment. Although the exact impact of inflation is indeterminable, we believe we have offset these higher costs by increasing the effective advertising rates of most of our broadcasting stations and outdoor display faces.
~~Critical~~
NEW ACCOUNTING PRONOUNCEMENTS
In April 2011, the Financial Accounting ~~Estimates~~
Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2011-04,Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs. The amendments in this ASU change the wording used to describe many of the requirements in U.S. generally accepted accounting principles (“GAAP”) for measuring fair value and for disclosing information about fair value measurements. For many of the requirements, the FASB does not intend for the amendments in this ASU to result in a change in the application of the requirements in Topic 820. Some of the amendments clarify the FASB’s intent about the application of existing fair value measurement requirements. Other amendments change a particular principle or requirement for measuring fair value or for disclosing information about fair value measurements. The amendments in this ASU are to be applied prospectively for interim and annual periods beginning after December 15, 2011. We do not expect the provisions of ASU 2011-04 to have a material effect on our financial position or results of operations.
In June 2011, the FASB issued ASU No. 2011-05,Comprehensive Income (Topic 220): Presentation of Comprehensive Income.This ASU improves the comparability, consistency, and transparency of financial reporting and increases the prominence of items reported in other comprehensive income by eliminating the option to present components of other comprehensive income as part of the statement of changes in stockholders’ equity. The amendments require that all nonowner changes in stockholders’ equity be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements. The changes apply for interim and annual financial statements and should be applied retrospectively, effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. Early adoption is permitted. We currently comply with the provisions of this ASU by presenting the components of comprehensive income in a single continuous financial statement within our consolidated statement of operations for both interim and annual periods.
In September 2011, the FASB issued ASU No. 2011-08, Intangibles-Goodwill and Other (Topic 350): Testing Goodwill for Impairment.Under the revised guidance, entities testing goodwill for impairment have the option of performing a qualitative assessment before calculating the fair value of the reporting unit (i.e., step 1 of the goodwill impairment test). If entities determine, on the basis of qualitative factors, that the fair value of the reporting unit is more likely than not less than the carrying amount, the two-step impairment test would be required. The ASU does not change how goodwill is calculated or assigned to reporting units, nor does it revise the requirement to test goodwill annually for impairment. The amendments are effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. Early adoption is permitted. We early adopted the provisions of this ASU as of October 1, 2011 with no material impact to our financial position or results of operations. Please refer to Note 2 included in Item 8 of Part II of this Annual Report on Form 10-K for a further discussion of our impairment testing.
In December 2011, the FASB issued ASU No. 2011-12, Comprehensive Income (Topic 220): Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05. The ASU defers the requirement to present components of reclassifications of other comprehensive income on the face of the income statement in response to requests from some investors for greater clarity about the impact of reclassification adjustments on net income. The guidance in ASU 2011-05 called for reclassification adjustments from other comprehensive income to be measured and presented by income statement line item in net income and also in other comprehensive income. All other requirements in ASU 2011-05 are not affected by this Update. The amendments are effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. We do not expect the provisions of ASU 2011-12 to have a material effect on our financial position or results of operations.
CRITICAL ACCOUNTING ESTIMATES
The preparation of our financial statements in conformity with U.S. ~~generally accepted accounting principles (“GAAP”)~~GAAP requires management to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of expenses during the reporting period. On an ongoing basis, we evaluate our estimates that are based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. The result of these evaluations forms the basis for making judgments about the carrying values of assets and liabilities and the reported amount of expenses that are not readily apparent from other sources. Because future events and their effects cannot be determined with certainty, actual results could differ from our assumptions and estimates, and such difference could be material. Our significant accounting policies are discussed in the notes to our consolidated financial statements included in Item 8 of Part II of this Annual Report on Form 10-K. Management believes that the following accounting estimates are the most critical to aid in fully understanding and evaluating our reported financial results, and they require management’s most difficult, subjective or complex judgments, resulting from the need to make estimates about the effect of matters that are inherently uncertain. The following narrative describes these critical accounting estimates, the judgments and assumptions and the effect if actual results differ from these assumptions.

Allowance for Doubtful Accounts
We evaluate the collectability of our accounts receivable based on a combination of factors. In circumstances where we are aware of a specific customer’s inability to meet its financial obligations, we record a specific reserve to reduce the amounts recorded to what we believe will be collected. For all other customers, we recognize reserves for bad debt based on historical experience of bad debts as a percent of revenue for each business unit, adjusted for relative improvements or deteriorations in the agings and changes in current economic conditions.
If our agings were to improve or deteriorate resulting in ~~a 10%~~a10% change in our allowance, we estimated that our bad debt expense for the year ended December 31, ~~2009,~~2011 would have changed by approximately ~~$7.2~~$6.3 million and our net loss for the same period would have changed by approximately ~~$4.4~~$3.9 million.
~~Long-Lived~~
Long-lived Assets
Long-lived assets, such as property, plant and equipment and definite-lived intangibles, are reviewed for impairment when events and circumstances indicate that depreciable and amortizable long-lived assets might be impaired and the undiscounted cash flows estimated to be generated by those assets are less than the carrying ~~amount~~amounts of those assets. When specific assets are determined to be unrecoverable, the cost basis of the asset is reduced to reflect the current fair market value.
70
We use various assumptions in determining the current fair market value of these assets, including future expected cash flows, industry growth rates and discount rates, as well as future salvage values. Our impairment loss calculations require management to apply judgment in estimating future cash flows, including forecasting useful lives of the assets and selecting the discount rate that reflects the risk inherent in future cash flows.
     Using the impairment review described above, we recorded aggregate impairment charges of approximately $87.6 million for the year ended December 31, 2009. For additional information, please refer to the~~Impairment Chargessection included in the beginning of this MD&A.~~
If actual results are not consistent with our assumptions and judgments used in estimating future cash flows and asset fair values, we may be exposed to future impairment losses that could be material to our results of operations. ~~For additional information, please refer to the~~~~Impairment Charges~~~~section included in the beginning of this MD&A.~~

Indefinite-lived Intangible Assets
Indefinite-lived intangible assets, such as our FCC licenses and our billboard permits, are reviewed annually for possible impairment using the direct valuation method as prescribed in ASC 805-20-S99. Under the direct valuation method, the estimated fair value of the indefinite-lived intangible assets was calculated at the market level as prescribed
by ASC 350-30-35.Under the direct valuation method, it is assumed that rather than acquiring indefinite-lived intangible assets as a part of a going concern business, the buyer hypothetically obtains indefinite-lived intangible assets and builds a new operation with similar attributes from scratch. Thus, the buyer incurs start-up costs during the build-up phase which are normally associated with going concern value. Initial capital costs are deducted from the discounted cash flows model which results in value that is directly attributable to the indefinite-lived intangible assets.
Our key assumptions using the direct valuation method are market revenue growth rates, market share, profit margin, duration and profile of the build-up period, estimated start-up capital costs and losses incurred during the build-up period, the risk-adjusted discount rate and terminal values. This data is populated using industry normalized information representing an average asset within a market.
     In
On October 1, 2011, we performed our annual impairment test in accordance with ASC ~~350-30,~~350-30-35 and recognized aggregate impairment charges of $6.5 million related to permits in one of our markets.
In determining the fair value of our FCC licenses, the following key assumptions were used:
§ Market revenue growth, forecast and published by BIA Financial Network, Inc. (“BIA”), of 4.5% was used for the initial four-year period;
§ 2% revenue growth was assumed beyond the initial four-year period;
§ Revenue was grown proportionally over a build-up period, reaching market revenue forecast by year 3;
§ Operating margins of 12.5% in the first year gradually climb to the industry average margin in year 3 of up to 30%, depending on market size by year 3; and
§ Assumed discount rates of 9% for the 13 largest markets and 9.5% for all other markets.
In determining the fair value of our billboard permits, the following key assumptions were used:
§ Industry revenue growth forecast at 7.8% was used for the initial four-year period;
§ 3% revenue growth was assumed beyond the initial four-year period;
§ Revenue was grown over a build-up period, reaching maturity by year 2;
§ Operating margins gradually climb to the industry average margin of up to 52%, depending on market size, by year 3; and
§ Assumed discount rate of 10%.
While we ~~performed an interim~~believe we have made reasonable estimates and utilized appropriate assumptions to calculate the fair value of our indefinite-lived intangible assets, it is possible a material change could occur. If future results are not consistent with our assumptions and estimates, we may be exposed to impairment ~~test as~~charges in the future. The following table shows the change in the fair value of ~~December 31, 2008~~our indefinite-lived intangible assets that would result from a 100 basis point decline in our discrete and ~~again as of June 30, 2009.~~ terminal period revenue growth rate and profit margin assumptions and a 100 basis point increase in our discount rate assumption:
(In thousands)

Description
   Revenue growth rate    Profit margin    Discount rates
FCC licenses
     $ (403,470)             $     (164,040)             $     (511,440)
Billboard permits
     $ (596,200)             $     (129,200)             $     (603,700)
The estimated fair value of our FCC licenses and billboard permits at October 1, 2011 was ~~below their carrying values at the date of each interim impairment test. As a result, we recognized non-cash impairment charges of $1.7~~$3.4 billion and ~~$935.6 million at December 31, 2008~~$2.1 billion, respectively, while the carrying value was $2.4 billion and ~~June 30, 2009, respectively, related to our indefinite-lived FCC licenses and permits. For additional information, please refer to the~~~~Impairment Charges~~~~section included in the beginning of this MD&A.~~
     ~~If our future results are not consistent with our estimates, we could be exposed to future impairment losses that could be material to our results of operations.~~
$1.1 billion, respectively.
Goodwill
Goodwill represents the excess of the purchase price over the fair value of identifiable net assets acquired in business combinations. We test goodwill at interim dates if events or changes in circumstances indicate that goodwill might be impaired. The fair value of our reporting units is used to apply value to the net assets of each reporting unit. To the extent that the carrying amount of net assets would exceed the fair value, an impairment charge may be required to be recorded.
The discounted cash flow approach we use for valuing goodwill as part of the two-step impairment testing approach involves estimating future cash flows expected to be generated from the related assets, discounted to their present value using a risk-adjusted discount rate. Terminal values are also estimated and discounted to their present value. In
On October 1, 2011, we performed our annual impairment test in accordance with ASC ~~350-20, we performed~~350-20-35 and recognized an ~~interim~~ impairment ~~test on goodwill as~~charge of ~~December 31, 2008 and again as of June 30, 2009.~~
     ~~The estimated~~$1.1 million related to one country in our International outdoor segment. We utilized the option to assess qualitative factors to determine whether it was more likely than not that the fair value of our reporting units was ~~below~~less than their carrying ~~values at~~amounts, including goodwill. As part of our qualitative assessment, we considered the ~~date~~following factors:
§ macroeconomic characteristics of the environment in which the reporting unit operates;
§ any significant changes in the business’ products, operating model or laws or regulations;
§ any significant changes in the business’ cost structure and/or margin trends;
§ comparisons of current and prior year operating performance and forecast trends for future operating performance;
§ changes in management, business strategy or customer base during the current year;
§ sustained decreases in share price relative to our peers; and
§ the excess of fair value over carrying value and the significance of recorded goodwill as of October 1, 2010.
Generally, the qualitative factors for our reporting units indicated stable or improving margins despite economic conditions, new contracts, no adverse business or management changes, favorable or stable forecasted economic conditions and the existence of ~~each interim impairment test, which required us to compare~~excess fair value over carrying value for the ~~implied~~majority of our reporting units. Based on our annual assessment using the qualitative factors described above, we determined that it was not more likely than not that the fair value of ~~each~~our CCME reporting ~~unit’s goodwill with~~unit was less than its carrying ~~value.~~amount. As a result, further testing of goodwill for impairment was not required for this reporting unit. Our assessment for the reporting units within our Americas outdoor segment required further testing of goodwill for impairment in one country while our assessment for the reporting units within our International outdoor segment required further testing for three countries. Further testing indicated that goodwill was impaired by $1.1 million in one country within our International outdoor segment in 2011.
We believe we ~~recognized non-cash impairment charges~~have made reasonable estimates and utilized appropriate assumptions to evaluate whether it was more likely than not that the fair value of ~~$3.6 billion and $3.1 billion at December 31, 2008 and June 30, 2009, respectively, to reduce~~ our ~~goodwill. For additional information, please refer to the~~~~Impairment Charges~~~~section included in the beginning of this MD&A.~~
reporting units was less than their carrying values. If ~~our~~ future results are not consistent with our assumptions and estimates, we ~~could~~may be exposed to ~~future~~ impairment ~~losses that could be material to our results of operations.~~
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charges in the future.
Tax Accruals
     The IRS and other taxing authorities routinely examine our tax returns we file as part of the consolidated tax returns filed by us. From time to time, the IRS challenges certain of our tax positions. We believe our tax positions comply with applicable tax law and we would vigorously defend these positions if challenged. The final disposition of any positions challenged by the IRS could require us to make additional tax payments. We believe that we have adequately accrued for any foreseeable payments resulting from tax examinations and consequently do not anticipate any material impact upon their ultimate resolution.
Our estimates of income taxes and the significant items giving rise to the deferred tax assets and liabilities are shown in the notes to our consolidated financial statements and reflect our assessment of actual future taxes to be paid on items reflected in the financial statements, giving consideration to both timing and probability of these estimates. Actual income taxes could vary from these estimates due to future changes in income tax law or results from the final review of our tax returns by Federal, state or foreign tax authorities.
We use our judgment to determine whether it is more likely than not that we will sustain positions that we have ~~considered these potential~~taken on tax returns and, if so, the amount of benefit to initially recognize within our financial statements. We regularly review our uncertain tax positions and adjust our unrecognized tax benefits (UTBs) in light of changes in ~~accordance~~facts and circumstances, such as changes in tax law, interactions with ~~ASC 740-10, which requires us~~taxing authorities and developments in case law. These adjustments to ~~record reserves for estimates~~our UTBs may affect our income tax expense. Settlement of ~~probable settlements~~uncertain tax positions may require use of ~~Federal and state tax audits.~~
our cash.
Litigation Accruals
We are currently involved in certain legal ~~proceedings and, as required,~~proceedings. Based on current assumptions, we have accrued ~~our~~an estimate of the probable costs for the resolution of those claims for which the occurrence of loss is probable and the amount can be reasonably estimated. Future results of operations could be materially affected by changes in these ~~claims.~~
assumptions or the effectiveness of our strategies related to these proceedings.
Management’s estimates used have been developed in consultation with counsel and are based upon an analysis of potential results, assuming a combination of litigation and settlement strategies.
     It is possible, however, that future results of operations for any particular period could be materially affected by changes in our assumptions or the effectiveness of our strategies related to these proceedings. During 2009, we recorded a $23.5 million accrual related to an unfavorable outcome of litigation concerning a breach of contract regarding internet advertising and our radio stations.

Insurance Accruals
We are currently self-insured beyond certain retention amounts for various insurance coverages, including general liability and property and casualty. Accruals are recorded based on estimates of actual claims filed, historical payouts, existing insurance coverage and projected future development of costs related to existing claims.
Our self-insured liabilities contain uncertainties because management must make assumptions and apply judgment to estimate the ultimate cost to settle reported claims and claims incurred but not reported as of December 31, ~~2009.~~
2011.
If actual results are not consistent with our assumptions and judgments, we may be exposed to gains or losses that could be material. A 10% change in our self-insurance liabilities at December 31, ~~2009,~~2011 would have affected our net loss by approximately ~~$2.8~~$2.3 million for the year ended December 31, ~~2009.~~
2011.
Asset Retirement Obligations
ASC 410-20 requires us to estimate our obligation upon the termination or nonrenewal of a lease, to dismantle and remove our billboard structures from the leased land and to reclaim the site to its original condition. We record the present value of obligations associated with the retirement of tangible long-lived assets in the period in which they are incurred. When the liability is recorded, the cost is capitalized as part of the related long-lived asset’s carrying amount. Over time, accretion of the liability is recognized as an operating expense and the capitalized cost is depreciated over the expected useful life of the related asset.
Due to the high rate of lease renewals over a long period of time, our calculation assumes all related assets will be removed at some period over the next 50 years. An estimate of third-party cost information is used with respect to the dismantling of the structures and the reclamation of the site. The interest rate used to calculate the present value of such costs over the retirement period is based on an estimated risk-adjusted credit rate for the same period. If our assumption of the risk-adjusted credit rate used to discount current year additions to the asset retirement obligation decreased approximately 1%, our liability as of December 31, ~~2009~~2011 would ~~increase approximately $0.2 million.~~not be materially impacted. Similarly, if our assumption of the risk-adjusted credit rate increased approximately 1%, our liability would ~~decrease approximately $0.1 million.~~
72
not be materially impacted.
Share-Based Compensation
~~Shared-based Payments~~
Under the fair value recognition provisions of ASC 718-10, ~~stock based~~share-based compensation cost is measured at the grant date based on the fair value of the award. For awards that vest based on service conditions, this cost is recognized as expense on a straight-line basis over the vesting period. For awards that will vest based on market, performance and service conditions, this cost will be recognized when it becomes probable that the performance conditions will be satisfied. Determining the fair value of share-based awards at the grant date requires assumptions and judgments about expected volatility and forfeiture rates, among other factors. If actual results differ significantly from these estimates, our results of operations could be materially impacted.
~~ITEM 7A. Quantitative and Qualitative Disclosures about Market Risk~~
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Required information is located within Item 7.
737 of Part II of this Annual Report on Form 10-K.
ITEM 8. ~~Financial Statements and Supplementary Data~~FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
MANAGEMENT’S REPORT ON FINANCIAL STATEMENTS
The consolidated financial statements and notes related thereto were prepared by and are the responsibility of management. The financial statements and related notes were prepared in conformity with U.S. generally accepted accounting principles and include amounts based upon management’s best estimates and judgments.
It is management’s objective to ensure the integrity and objectivity of its financial data through systems of internal controls designed to provide reasonable assurance that all transactions are properly recorded in our books and records, that assets are safeguarded from unauthorized use and that financial records are reliable to serve as a basis for preparation of financial statements.
The financial statements have been audited by our independent registered public accounting firm, Ernst & Young LLP, to the extent required by auditing standards of the Public Company Accounting Oversight Board (United States) and, accordingly, they have expressed their professional opinion on the financial statements in their report included herein.
The Board of Directors meets with the independent registered public accounting firm and management periodically to satisfy itself that they are properly discharging their responsibilities. The independent registered public accounting firm has unrestricted access to the Board, without management present, to discuss the results of their audit and the quality of financial reporting and internal accounting controls.
/s/ ~~Mark P. Mays~~ Robert W. Pittman
~~President and~~ Chief Executive Officer
/s/Thomas W. Casey
Executive Vice President and Chief Financial Officer
/s/ ~~Herbert W. Hill, Jr.~~ Scott D. Hamilton
Senior Vice ~~President/~~President and Chief Accounting Officer
74
Report of Independent Registered Public Accounting Firm
The Board of Directors and Shareholders
CC Media Holdings, Inc.
We have audited the accompanying consolidated balance sheets of CC Media Holdings, Inc. ~~(Holdings)~~(the Company) as of December 31, ~~2009~~2011 and ~~2008,~~2010, the related consolidated statements of ~~operations,~~comprehensive loss, changes in shareholders’ ~~equity (deficit),~~deficit, and cash flows of ~~Holdings~~the Company for each of the ~~year~~three years in the period ended December 31, 2009 and for the period from July 31, 2008 through December 31, 2008, the related consolidated statement of operations, shareholders’ equity, and cash flows of Clear Channel Communications, Inc. (Clear Channel) for the period from January 1, 2008 through July 30, 2008 and for the year ended December 31, 2007.2011. Our audits also include the financial statement schedule listed in the index as Item 15(a)2. These financial statements and schedule are the responsibility of ~~Holdings’~~the Company’s management. Our responsibility is to express an opinion on these financial statements and schedule 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 audit 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 consolidated financial position of ~~Holdings~~the Company at December 31, ~~2009~~2011 and ~~2008,~~2010, the consolidated results of ~~Holdings’~~its operations and its cash flows for each of the ~~year~~three years in the period ended December 31, 2009 and for the period from July 31, 2008 through December 31, 2008, the consolidated results of Clear Channel’s operations and cash flows for the period from January 1, 2008 through July 30, 2008 and the year ended December 31, 2007,2011, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, when considered in relation to the consolidated financial statements taken as a whole, presents fairly in all material respects the information set forth therein.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), ~~Holdings’~~the Company’s internal control over financial reporting as of December 31, ~~2009,~~2011, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated ~~March 16, 2010~~February 21, 2012 expressed an unqualified opinion thereon.
/s/ Ernst & Young LLP
San Antonio, Texas
~~March 16, 2010~~
75
February 21, 2012
CONSOLIDATED BALANCE SHEETS
~~ASSETS~~
(In thousands)

December 31, December 31,
2009 2008
CURRENT ASSETS
Cash and cash equivalents $ 1,883,994 $ 239,846
Accounts receivable, net of allowance of $71,650 in 2009 and $97,364 in 2008 1,301,700 1,431,304
Income taxes receivable 136,207 46,615
Prepaid expenses 81,669 133,217
Other current assets 255,275 215,573

Total Current Assets
3,658,845 2,066,555

PROPERTY, PLANT AND EQUIPMENT
Land, buildings and improvements 633,222 614,811
Structures 2,514,602 2,355,776
Towers, transmitters and studio equipment 381,046 353,108
Furniture and other equipment 234,101 242,287
Construction in progress 88,391 128,739

3,851,362 3,694,721
Less accumulated depreciation 518,969 146,562

3,332,393 3,548,159

INTANGIBLE ASSETS
Definite-lived intangibles, net 2,599,244 2,881,720
Indefinite-lived intangibles – licenses 2,429,839 3,019,803
Indefinite-lived intangibles – permits 1,132,218 1,529,068
Goodwill 4,125,005 7,090,621

OTHER ASSETS
Notes receivable 1,465 11,633
Investments in, and advances to, nonconsolidated affiliates 345,349 384,137
Other assets 378,058 560,260
Other investments 44,685 33,507

Total Assets
$ 18,047,101 $ 21,125,463

   As of December 31,
   2011    2010
CURRENT ASSETS

Cash and cash equivalents
       $   1,228,682               $   1,920,926
Accounts receivable, net of allowance of $63,098 in 2011 and $74,660 in 2010
   1,404,674           1,373,880
Prepaid expenses
   161,317           124,114
Other current assets
   190,612           184,253




Total Current Assets
   2,985,285           3,603,173
PROPERTY, PLANT AND EQUIPMENT

Structures, net
   1,950,437           2,007,399
Other property, plant and equipment, net
   1,112,890           1,138,155
INTANGIBLE ASSETS

Definite-lived intangibles, net
   2,017,760           2,288,149
Indefinite-lived intangibles – licenses
   2,411,367           2,423,828
Indefinite-lived intangibles – permits
   1,105,704           1,114,413
Goodwill
   4,186,718           4,119,326
OTHER ASSETS

Other assets
   771,878           765,939




Total Assets
       $   16,542,039               $   17,460,382




CURRENT LIABILITIES

Accounts payable
       $   134,576               $   127,263
Accrued expenses
   722,151           829,604
Accrued interest
   160,361           121,199
Current portion of long-term debt
   268,638           867,735
Deferred income
   143,236           152,778




Total Current Liabilities
   1,428,962           2,098,579
Long-term debt
   19,938,531           19,739,617
Deferred income taxes
   1,938,599           2,050,196
Other long-term liabilities
   707,888           776,676
Commitments and contingent liabilities (Note 7)

SHAREHOLDERS’ DEFICIT

Noncontrolling interest
   521,794           490,920
Class A Common Stock, par value $.001 per share, authorized 400,000,000 shares,
issued 24,106,139 and 24,118,358 shares in 2011 and 2010, respectively
   24           24
Class B Common Stock, par value $.001 per share, authorized 150,000,000 shares,
issued 555,556 shares in 2011 and 2010
   1           1
Class C Common Stock, par value $.001 per share, authorized 100,000,000 shares,
issued 58,967,502 shares in 2011 and 2010
   58           58
Additional paid-in capital
   2,132,368           2,130,871
Retained deficit
   (9,857,267)          (9,555,173)
Accumulated other comprehensive loss
   (266,043)          (268,816)
Cost of shares (530,944 in 2011 and 487,126 in 2010) held in treasury
   (2,876)          (2,571)




Total Shareholders’ Deficit
   (7,471,941)          (7,204,686)




Total Liabilities and Shareholders’ Deficit
       $   16,542,039               $   17,460,382




See Notes to Consolidated Financial Statements
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CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(In thousands, except per share data)    Years Ended December 31,
   2011    2010    2009
Revenue
     $     6,161,352             $     5,865,685             $     5,551,909
Operating expenses:

Direct operating expenses (excludes depreciation and amortization)
   2,504,036           2,381,647           2,529,454
Selling, general and administrative expenses (excludes depreciation and amortization)
   1,617,258           1,570,212           1,520,402
Corporate expenses (excludes depreciation and amortization)
   227,096           284,042           253,964
Depreciation and amortization
   763,306           732,869           765,474
Impairment charges
   7,614           15,364           4,118,924
Other operating income (expense) - net
   12,682           (16,710)          (50,837)






Operating income (loss)
   1,054,724           864,841           (3,687,146)
Interest expense
   1,466,246           1,533,341           1,500,866
Loss on marketable securities
   (4,827)          (6,490)          (13,371)
Equity in earnings (loss) of nonconsolidated affiliates
   26,958           5,702           (20,689)
Other income (expense) – net
   (4,616)          46,455           679,716






Loss before income taxes
   (394,007)          (622,833)          (4,542,356)
Income tax benefit
   125,978           159,980           493,320






Consolidated net loss
   (268,029)          (462,853)          (4,049,036)
Less amount attributable to noncontrolling interest
   34,065           16,236           (14,950)






Net loss attributable to the Company
     $ (302,094)            $ (479,089)            $ (4,034,086)
Other comprehensive income (loss), net of tax:

Foreign currency translation adjustments
   (29,647)          26,301           151,422
Unrealized gain (loss) on securities and derivatives:

Unrealized holding gain (loss) on marketable securities
   (224)          17,187           1,678
Unrealized holding gain (loss) on cash flow derivatives
   33,775           15,112           (74,100)
Reclassification adjustment for realized loss on securities included in net income and other
   3,787           14,750           10,008






Other comprehensive income
   7,691           73,350           89,008






Comprehensive loss
   (294,403)          (405,739)          (3,945,078)
Less amount attributable to noncontrolling interest
   4,324           8,857           20,788






Comprehensive loss attributable to the Company
   (298,727)            $ (414,596)            $ (3,965,866)






Net loss attributable to the Company per common share:

Basic
     $ (3.70)            $ (5.94)            $ (49.71)
Weighted average common shares outstanding
�� 82,487           81,653           81,296
Diluted
     $ (3.70)            $ (5.94)            $ (49.71)
Weighted average common shares outstanding
   82,487           81,653           81,296
~~LIABILITIES AND SHAREHOLDERS’ DEFICIT~~
~~(In thousands, except share data)~~

December 31, December 31,
2009 2008
CURRENT LIABILITIES
Accounts payable $ 132,193 $ 155,240
Accrued expenses 726,311 793,366
Accrued interest 137,236 181,264
Current portion of long-term debt 398,779 562,923
Deferred income 149,617 153,153

Total Current Liabilities
1,544,136 1,845,946

Long-term debt 20,303,126 18,940,697
Deferred income taxes 2,220,023 2,679,312
Other long-term liabilities 824,554 575,739

Commitments and contingent liabilities (Note J)

SHAREHOLDERS’ DEFICIT
Noncontrolling interest 455,648 426,220
Class A Common Stock, par value $.001 per share, authorized 400,000,000 shares, issued 23,428,807 and 23,605,923 shares in 2009 and 2008, respectively 23 23
Class B Common Stock, par value $.001 per share, authorized 150,000,000 shares, issued 555,556 shares in 2009 and 2008 1 1
Class C Common Stock, par value $.001 per share, authorized 100,000,000 shares, issued 58,967,502 shares in 2009 and 2008 58 58
Additional paid-in capital 2,109,110 2,100,995
Retained deficit (9,076,084 ) (5,041,998 )
Accumulated other comprehensive loss (333,309 ) (401,529 )
Cost of shares (147,783 in 2009 and 81 in 2008) held in treasury (185 ) (1 )

Total Shareholders’ Deficit
(6,844,738 ) (2,916,231 )

Total Liabilities and Shareholders’ Deficit
$ 18,047,101 $ 21,125,463

See Notes to Consolidated Financial Statements
77
CONSOLIDATED STATEMENTS OF ~~OPERATIONS~~
~~(In thousands, except per share data)~~

Period from Period from
Year Ended July 31 through January 1 Year Ended
December 31, December 31, through July 30, December 31,
2009 2008 2008 2007
Post-Merger Post-Merger Pre-Merger Pre-Merger
Revenue $ 5,551,909 $ 2,736,941 $ 3,951,742 $ 6,921,202
Operating expenses:
Direct operating expenses (excludes depreciation and amortization) 2,583,263 1,198,345 1,706,099 2,733,004
Selling, general and administrative expenses (excludes depreciation and amortization) 1,466,593 806,787 1,022,459 1,761,939
Depreciation and amortization 765,474 348,041 348,789 566,627
Corporate expenses (excludes depreciation and amortization) 253,964 102,276 125,669 181,504
Merger expenses — 68,085 87,684 6,762
Impairment charges 4,118,924 5,268,858 — —
Other operating income (loss)–net
(50,837 ) 13,205 14,827 14,113

Operating income (loss) (3,687,146 ) (5,042,246 ) 675,869 1,685,479
Interest expense 1,500,866 715,768 213,210 451,870
Gain (loss) on marketable securities (13,371 ) (116,552 ) 34,262 6,742
Equity in earnings (loss) of nonconsolidated affiliates (20,689 ) 5,804 94,215 35,176
Other income (expense) – net 679,716 131,505 (5,112 ) 5,326

Income (loss) before income taxes and discontinued operations (4,542,356 ) (5,737,257 ) 586,024 1,280,853
Income tax benefit (expense):
Current 76,129 76,729 (27,280 ) (252,910 )
Deferred 417,191 619,894 (145,303 ) (188,238 )

Income tax benefit (expense) 493,320 696,623 (172,583 ) (441,148 )

Income (loss) before discontinued operations (4,049,036 ) (5,040,634 ) 413,441 839,705
Income (loss) from discontinued operations, net — (1,845 ) 640,236 145,833

Consolidated net income (loss) (4,049,036 ) (5,042,479 ) 1,053,677 985,538
Amount attributable to noncontrolling interest (14,950 ) (481 ) 17,152 47,031

Net income (loss) attributable to the Company $ (4,034,086 ) $ (5,041,998 ) $ 1,036,525 $ 938,507

Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments 151,422 (382,760 ) 46,679 105,574
Unrealized gain (loss) on securities and derivatives:
Unrealized holding gain (loss) on marketable securities 1,678 (95,669 ) (52,460 ) (8,412 )
Unrealized holding loss on cash flow derivatives (74,100 ) (75,079 ) — (1,688 )
Reclassification adjustment for realized (gain) loss on securities and derivatives included in net income 10,008 102,766 (29,791 ) —

Comprehensive income (loss) (3,945,078) (5,492,740 ) 1,000,953 1,033,981
Amount attributable to noncontrolling interest 20,788 (49,212 ) 19,210 30,369

Comprehensive income (loss) attributable to the Company $ (3,965,866 ) $ (5,443,528 ) $ 981,743 $ 1,003,612

Net income (loss) per common share:
Income (loss) attributable to the Company before discontinued operations – basic $ (49.71 ) $ (62.04 ) $ .80 $ 1.59
Discontinued operations – basic — (.02 ) 1.29 .30

Net income (loss) attributable to the Company – basic $ (49.71 ) $ (62.06 ) $ 2.09 $ 1.89

Weighted average common shares – basic 81,296 81,242 495,044 494,347
Income (loss) attributable to the Company before discontinued operations – diluted $ (49.71 ) $ (62.04 ) $ .80 $ 1.59
Discontinued operations – diluted — (.02 ) 1.29 .29

Net income (loss) attributable to the Company – diluted $ (49.71 ) $ (62.06 ) $ 2.09 $ 1.88

Weighted average common shares – diluted 81,296 81,242 496,519 495,784

Dividends declared per share $ — $ — $ — $ .75
CHANGES IN
SHAREHOLDERS’ DEFICIT
      Controlling Interest
(In thousands, except
share data)
Class C
Shares

Class B
Shares

Common
Shares
Issued

Non-
controlling
Interest

Common
Stock

Additional
Paid-in
Capital

Retained
Deficit

Accumulated
Other
Comprehensive
Income (Loss)

Treasury
Stock

Total

Balances at
December 31, 2008
   58,967,502       555,556       23,605,923    $ 426,220    $ 82       $ 2,100,995    $ (5,041,998 ) $ (401,529 ) $ (1 ) $ (2,916,231 )
Net loss
         (14,950 )    (4,034,086 ) (4,049,036 )
Issuance (forfeiture) of
restricted stock
         (177,116 )    4    (184 ) (180 )
Amortization of share-based compensation
         12,104       27,682    39,786
Other
         11,486       (19,571 ) (8,085 )
Other comprehensive income
         20,788       68,220    89,008








Balances at
December 31, 2009
   58,967,502       555,556       23,428,807    $ 455,648    $ 82       $ 2,109,110    $ (9,076,084 ) $ (333,309 ) $ (185 ) $ (6,844,738 )
Net income (loss)
         16,236       (479,089 ) (462,853 )
Shares issued through stock purchase agreement
         706,215    1       4,999    5,000
Issuance (forfeiture) of restricted stock
         (16,664 ) 792       478    (2,386 ) (1,116 )
Amortization of share-based compensation
         12,046       22,200    34,246
Other
         (2,659 )    (5,916 ) (8,575 )
Other comprehensive income
         8,857       64,493    73,350








Balances at
December 31, 2010
   58,967,502       555,556       24,118,358    $ 490,920    $ 83       $ 2,130,871    $ (9,555,173 ) $ (268,816 ) $ (2,571 ) $ (7,204,686 )
Net income (loss)
         34,065       (302,094 ) (268,029 )
Issuance (forfeiture) of restricted stock
         (12,219 ) 735       (305 ) 430
Amortization of share-based compensation
         10,705       9,962    20,667
Purchases of additional noncontrolling interest
         (14,428 )    (5,492 ) (594 ) (20,514 )
Other
         (4,527 )    (2,973 ) (7,500 )
Other comprehensive income
         4,324       3,367    7,691








Balances at
December 31, 2011
   58,967,502       555,556       24,106,139    $ 521,794    $ 83       $ 2,132,368    $ (9,857,267 ) $ (266,043 ) $ (2,876 ) $ (7,471,941 )








See Notes to Consolidated Financial Statements
78
CONSOLIDATED STATEMENTS OF ~~CHANGES IN SHAREHOLDERS’ EQUITY (DEFICIT)~~

Controlling Interest
Accumulated
Common Additional Other
Shares Noncontrolling Common Paid-in Retained Comprehensive Treasury
(In thousands, except share data) Issued Interest Stock Capital (Deficit) Income Stock Total
Pre-merger Balances at December 31, 2006
493,982,851 $ 363,966 $ 49,399 $ 26,745,687 $ (19,054,365 ) $ 290,401 $ (3,355 ) $ 8,391,733
Cumulative effect of FIN 48 adoption (152 ) (152 )
Net income 47,031 938,507 985,538
Dividends declared (373,133 ) (373,133 )
Subsidiary common stock issued for a business acquisition 5,084 5,084
Exercise of stock options and other 4,092,566 10,780 409 74,827 (1,596 ) 84,420
Amortization and adjustment of deferred compensation 9,370 37,565 46,935
Other (2,049 ) 1 (2,048 )
Comprehensive income:
Currency translation adjustment 30,369 75,205 105,574
Unrealized (loss) on cash flow derivatives (1,688 ) (1,688 )
Unrealized (loss) on investments (8,412 ) (8,412 )

Pre-merger Balances at December 31, 2007
498,075,417 464,551 49,808 26,858,079 (18,489,143 ) 355,507 (4,951 ) 9,233,851
Net income 17,152 1,036,525 1,053,677
Exercise of stock options and other 82,645 30 4,963 (2,024 ) 2,969
Amortization and adjustment of deferred compensation 10,767 57,855 68,622
Other (39,813 ) 33,383 (6,430 )
Comprehensive income:
Currency translation adjustment 22,367 24,312 46,679
Unrealized (loss) on investments (3,125 ) (49,335 ) (52,460 )
Reclassification adjustments for realized gain included in net income (32 ) (29,759 ) (29,791 )

Pre-merger Balances at July 30, 2008
498,158,062 471,867 49,838 26,920,897 (17,452,618 ) 334,108 (6,975 ) 10,317,117

Elimination of pre-merger equity (498,158,062 ) (471,867 ) (49,838 ) (26,920,897 ) 17,452,618 (334,108 ) 6,975 (10,317,117 )
Class C Class B Class A
Shares Shares Shares

Post-merger Balances at July 31, 2008
58,967,502 555,556 21,718,569 471,867 81 2,089,266 — — — 2,561,214
Net (loss) (481 ) (5,041,998 ) (5,042,479 )
Issuance of restricted stock awards and other 1,887,354 1 (1 ) —
Amortization and adjustment of deferred compensation 4,182 11,729 15,911
Other (136 ) 1 (135 )
Comprehensive income:
Currency translation adjustment (50,010 ) (332,750 ) (382,760 )
Unrealized (loss) on cash flow derivatives (75,079 ) (75,079 )
Unrealized (loss) on investments (6,856 ) (88,813 ) (95,669 )
Reclassification adjustment for realized loss included in net income 7,654 95,112 102,766

Post-merger Balances at December 31, 2008
58,967,502 555,556 23,605,923 426,220 82 2,100,995 (5,041,998 ) (401,529 ) (1 ) (2,916,231 )

79
CASH FLOWS
(In thousands)    Years Ended December 31,
   2011    2010    2009
CASH FLOWS FROM OPERATING ACTIVITIES:

Consolidated net loss
     $     (268,029)            $     (462,853)            $     (4,049,036)
Reconciling Items:

Impairment charges
   7,614           15,364           4,118,924
Depreciation and amortization
   763,306           732,869           765,474
Deferred taxes
   (143,944)          (211,180)          (417,191)
Provision for doubtful accounts
   13,723           23,118           52,498
Amortization of deferred financing charges and note discounts, net
   188,034           214,950           229,464
Share-based compensation
   20,667           34,246           39,786
(Gain) loss on disposal of operating and fixed assets
   (12,682)          16,710           50,837
Loss on marketable securities
   4,827           6,490           13,371
Equity in (earnings) loss of nonconsolidated affiliates
   (26,958)          (5,702)          20,689
(Gain) loss on extinguishment of debt
   1,447           (60,289)          (713,034)
Other reconciling items, net
   16,120           26,090           46,166
Changes in operating assets and liabilities, net of effects of
acquisitions and dispositions:

Decrease (increase) in accounts receivable
   (7,835)          (119,860)          99,225
Decrease in Federal income taxes receivable
   —           132,309           75,939
Increase (decrease) in accrued expenses
   (127,242)          117,432           (51,970)
Increase (decrease) in accounts payable and other liabilities
   (15,131)          (6,924)          24,036
Increase (decrease) in accrued interest
   39,170           87,053           33,047
Increase (decrease) in deferred income
   (10,776)          796           2,168
Changes in other operating assets and liabilities, net of effects of
acquisitions and dispositions
   (68,353)          41,754           (159,218)






Net cash provided by operating activities
   373,958           582,373           181,175
CASH FLOWS FROM INVESTING ACTIVITIES:

Proceeds from sale of other investments
   6,894           1,200           41,627
Purchases of businesses
   (46,356)          —           —
Purchases of property, plant and equipment
   (362,281)          (241,464)          (223,792)
Proceeds from disposal of assets
   54,270           28,637           48,818
Purchases of other operating assets
   (20,995)          (16,110)          (8,300)
Change in other - net
   382           (12,460)          (102)






Net cash used for investing activities
   (368,086)          (240,197)          (141,749)
CASH FLOWS FROM FINANCING ACTIVITIES:

Draws on credit facilities
   55,000           198,670           1,708,625
Payments on credit facilities
   (960,332)          (152,595)          (202,241)
Proceeds from long-term debt
   1,731,266           145,639           500,000
Proceeds from issuance of subsidiary senior notes
   —           —           2,500,000
Payments on long-term debt
   (1,398,299)          (369,372)          (2,472,419)
Repurchases of long-term debt
   (55,250)          (125,000)          (343,466)
Deferred financing charges
   (46,659)          —           (60,330)
Change in other - net
   (23,842)          (2,586)          (25,447)






Net cash provided by (used for) financing activities
   (698,116)          (305,244)          1,604,722
Net increase (decrease) in cash and cash equivalents
   (692,244)          36,932           1,644,148
Cash and cash equivalents at beginning of period
   1,920,926           1,883,994           239,846






Cash and cash equivalents at end of period
     $ 1,228,682             $ 1,920,926             $ 1,883,994






SUPPLEMENTAL DISCLOSURES:

Cash paid during the year for:

Interest
     $ 1,260,767             $ 1,235,755             $ 1,240,322
Income taxes
   81,162           —           —

Common Controlling Interest
Shares Accumulated
Issued Additional Other
Class C Class B Class A Noncontrolling Common Paid-in Retained Comprehensive Treasury
(In thousands, except share data) Shares Shares Shares Interest Stock Capital (Deficit) Income Stock Total
Post-merger Balances at December 31, 2008
58,967,502 555,556 23,605,923 $ 426,220 $ 82 $ 2,100,995 $ (5,041,998 ) $ (401,529 ) $ (1 ) $ (2,916,231 )
Net (loss) (14,950 ) (4,034,086 ) (4,049,036 )
Issuance (forfeiture) of restricted stock awards and other (177,116 ) 4 (184 ) (180 )
Amortization and adjustment of deferred compensation 12,104 27,682 39,786
Other 11,486 (19,571 ) (8,085 )
Comprehensive income:
Currency translation adjustment 21,201 130,221 151,422
Unrealized (loss) on cash flow derivatives (74,100 ) (74,100 )
Reclassification adjustments for realized loss included in net income 727 9,281 10,008
Unrealized gain (loss) on investments (1,140 ) 2,818 1,678

Post-merger Balances at December 31, 2009
58,967,502 555,556 23,428,807 $ 455,648 $ 82 $ 2,109,110 $ (9,076,084 ) $ (333,309 ) $ (185 ) $ (6,844,738 )

See Notes to Consolidated Financial Statements
80
CC MEDIA HOLDINGS, INC. AND SUBSIDIARIES
~~CONSOLIDATED STATEMENTS OF CASH FLOWS~~

Period from Period from
Year Ended July 31 through January 1 Year Ended
December 31, December 31, through July 30, December 31,
2009 2008 2008 2007
(In thousands) Post-Merger Post-Merger Pre-Merger Pre-Merger
CASH FLOWS PROVIDED BY (USED IN) OPERATING ACTIVITIES:
Consolidated net income (loss) $ (4,049,036 ) $ (5,042,479 ) $ 1,053,677 $ 985,538
Less: Income (loss) from discontinued operations, net — (1,845 ) 640,236 145,833

Net income (loss) from continuing operations (4,049,036 ) (5,040,634 ) 413,441 839,705

Reconciling Items:
Depreciation 423,835 197,702 290,454 461,598
Amortization of intangibles 341,639 150,339 58,335 105,029
Impairment charges 4,118,924 5,268,858 — —
Deferred taxes (417,191 ) (619,894 ) 145,303 188,238
Provision for doubtful accounts 52,498 54,603 23,216 38,615
Amortization of deferred financing charges, bond premiums and accretion of note discounts, net 229,464 102,859 3,530 7,739
Share-based compensation 39,786 15,911 62,723 44,051
(Gain) loss on sale of operating and fixed assets 50,837 (13,205 ) (14,827 ) (14,113 )
Loss on forward exchange contract — — 2,496 3,953
(Gain) loss on securities 13,371 116,552 (36,758 ) (10,696 )
Equity in loss (earnings) of nonconsolidated affiliates 20,689 (5,804 ) (94,215 ) (35,176 )
(Gain) loss on extinguishment of debt (713,034 ) (116,677 ) 13,484 —
(Gain) loss on other investments and assets 9,595 — — —
Increase (decrease) in other, net 36,571 12,089 9,133 (91 )

Changes in operating assets and liabilities, net of effects of acquisitions and dispositions:
Decrease (increase) in accounts receivable 99,225 158,142 24,529 (111,152 )
Decrease (increase) in prepaid expenses 9,105 6,538 (21,459 ) 5,098
Decrease (increase) in other current assets (21,604 ) 156,869 (29,329 ) 694
Increase (decrease) in accounts payable, accrued expenses and other liabilities (27,934 ) (130,172 ) 190,834 27,027
Increase (decrease) in accrued interest 33,047 98,909 (16,572 ) (13,429 )
Increase (decrease) in deferred income 2,168 (54,938 ) 51,200 26,013
Increase (decrease) in accrued income taxes (70,780 ) (112,021 ) (40,260 ) 13,325

Net cash provided by operating activities 181,175 246,026 1,035,258 1,576,428
~~See Notes to Consolidated Financial Statements~~
81

Period from Period from
Year Ended July 31 through January 1 Years Ended
December 31, December 31, through July 30, December 31,
2009 2008 2008 2007
Post-Merger Post-Merger Pre-Merger Pre-Merger
CASH FLOWS PROVIDED BY (USED IN) INVESTING ACTIVITIES:
Decrease (increase) in notes receivable, net 823 741 336 (6,069 )
Decrease (increase) in investments in, and advances to nonconsolidated affiliates — net (3,811 ) 3,909 25,098 20,868
Cross currency settlement of interest — — (198,615 ) (1,214 )
Purchases of investments (3,372 ) (26 ) (98 ) (726 )
Proceeds from sale of other investments 41,627 — 173,467 2,409
Purchases of property, plant and equipment (223,792 ) (190,253 ) (240,202 ) (363,309 )
Proceeds from disposal of assets 48,818 16,955 72,806 26,177
Acquisition of operating assets (8,300 ) (23,228 ) (153,836 ) (122,110 )
Decrease (increase) in other — net 6,258 (47,342 ) (95,207 ) (38,703 )
Cash used to purchase equity — (17,472,459 ) — —

Net cash used in investing activities (141,749 ) (17,711,703 ) (416,251 ) (482,677 )

CASH FLOWS PROVIDED BY (USED IN) FINANCING ACTIVITIES:
Draws on credit facilities 1,708,625 180,000 692,614 886,910
Payments on credit facilities (202,241 ) (128,551 ) (872,901 ) (1,705,014 )
Proceeds from long-term debt 500,000 557,520 5,476 22,483
Proceeds from issuance of subsidiary senior notes 2,500,000 — — —
Payments on long-term debt (472,419 ) (554,664 ) (1,282,348 ) (343,041 )
Payments on senior secured credit facilities (2,000,000 ) — — —
Repurchases of long-term debt (343,466 ) (24,425 ) — —
Deferred financing charges (60,330 ) — — —
Debt proceeds used to finance the merger — 15,382,076 — —
Equity contribution used to finance the merger — 2,142,830 — —
Payments on forward exchange contract — — (110,410 ) —
Proceeds from exercise of stock options and other — — 17,776 80,017
Dividends paid — — (93,367 ) (372,369 )
Payments for purchase of noncontrolling interest (25,263 ) — — —
Payments for purchase of common shares (184 ) (47 ) (3,781 ) —

Net cash provided by (used in) financing activities 1,604,722 17,554,739 (1,646,941 ) (1,431,014 )
~~See Notes to Consolidated Financial Statements~~
82

Period from Period from
Year Ended July 31 through January 1 Years Ended
December 31, December 31, through July 30, December 31,
2009 2008 2008 2007
Post-Merger Post-Merger Pre-Merger Pre-Merger
CASH FLOWS PROVIDED BY (USED IN) DISCONTINUED OPERATIONS:

Net cash provided by (used in) operating activities — 2,429 (67,751 ) 33,832
Net cash provided by investing activities — — 1,098,892 332,579
Net cash provided by financing activities — — — —

Net cash provided by discontinued operations — 2,429 1,031,141 366,411

Net increase in cash and cash equivalents 1,644,148 91,491 3,207 29,148

Cash and cash equivalents at beginning of period 239,846 148,355 145,148 116,000
Cash and cash equivalents at end of period $ 1,883,994 $ 239,846 $ 148,355 $ 145,148

SUPPLEMENTAL DISCLOSURE:
Cash paid during the year for:
Interest $ 1,240,322 $ 527,083 $ 231,163 $ 462,181
Income taxes — 37,029 138,187 299,415
~~See Notes to Consolidated Financial Statements~~
83
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE ~~A —~~1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Business
CC Media Holdings, Inc. (the “Company”) was formed in May 2007 by private equity funds sponsored by Bain Capital Partners, LLC and Thomas H. Lee Partners, L.P. (together, the “Sponsors”) for the purpose of acquiring the business of Clear Channel Communications, Inc., a Texas company (“Clear Channel”). The acquisition was completed on July 30, 2008 pursuant to the Agreement and Plan of Merger, dated November 16, 2006, as amended on April 18, 2007, May 17, 2007 and May 13, 2008 (the “Merger Agreement”).
~~As a result~~
The Company’s reportable operating segments are Media and Entertainment (“CCME”, formerly known as the Radio segment), Americas outdoor advertising (“Americas outdoor” or “Americas outdoor advertising”), and International outdoor advertising (“International outdoor” or “International outdoor advertising”). The CCME segment provides media and entertainment services via broadcast and digital delivery. The Americas outdoor and International outdoor segments provide outdoor advertising services in their respective geographic regions using various digital and traditional display types. Included in the “Other” segment are the Company’s media representation business, Katz Media Group, as well as other general support services and initiatives, which are ancillary to its other businesses.
Use of Estimates
The preparation of the merger, each issued and outstanding share of Clear Channel, other than shares held by certain principals of the Company that were rolled over and exchanged for Class A common stock of the Company, was either exchanged for (i) $36.00 in cash consideration or (ii) one share of Class A common stock of the Company.
The purchase price was approximately $23 billion including $94 million in capitalized transaction costs. The merger was funded primarily through a $3 billion equity contribution, including the rollover of Clear Channel shares, and $20.8 billion in debt financing, including the assumption of $5.1 billion aggregate principal amount of Clear Channel debt.
~~The Company accounted for its acquisition of Clear Channel as a purchase business combination~~consolidated financial statements in conformity with ~~Statement of Financial Accounting Standards No. 141,~~~~Business Combinations~~,U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates, judgments, and ~~Emerging Issues Task Force Issue 88-16,~~~~Basis~~assumptions that affect the amounts reported in ~~Leveraged Buyout Transactions~~.the consolidated financial statements and accompanying notes including, but not limited to, legal, tax and insurance accruals. The Company ~~allocated a portion of the consideration paid to the assets~~bases its estimates on historical experience and liabilities acquired at their respective fair values with the remaining portion recorded at the continuing shareholders’ basis. Excess consideration after this allocation was recorded as goodwill. The purchase price allocation was complete as of July 30, 2009 in accordance with ASC 805-10-25, which requireson various other assumptions that ~~the allocation period not exceed one year from the date of acquisition.~~
~~The merger is discussed more fully in Note B.~~
~~Liquidity~~
The Company’s primary source of liquidity is cash flow from operations, which has been adversely affected by the global economic downturn. The risks associated with the Company’s businesses become more acute in periods of a slowing economy or recession, which may be accompanied by a decrease in advertising. Expenditures by advertisers tendare believed to be cyclical, reflecting overall economic conditions and budgeting and buying patterns. The global economic downturn has resulted in a decline in advertising and marketing services among the Company’s customers, resulting in a decline in advertising revenues across the Company’s businesses. This reduction in advertising revenues has had an adverse effect on the Company’s revenue, profit margins, cash flow and liquidity. The continuation of the global economic downturn may continue to adversely impact the Company’s revenue, profit margins, cash flow and liquidity.
The Company commenced a restructuring program in the fourth quarter of 2008 targeting a reduction of fixed costs. The Company recognized approximately $164.4 million and $95.9 million of costs related to its restructuring program during the year ended December 31, 2009 and 2008, respectively.
On February 6, 2009 Clear Channel borrowed the approximately $1.6 billon of remaining availability under its $2.0 billion revolving credit facility. In December of 2009, Clear Channel applied $2.0 billion of the cash proceeds it received from Clear Channel Outdoor, Inc. from the issuance and sale of the Clear Channel Worldwide Holdings Senior Notes to repay an equal amount of indebtedness under its senior secured credit facilities, thereby strengthening the Company’s capital structure meaningfully in the short and long term.
84
Based on the Company’s current and anticipated levels of operations and conditions in its markets, it believes that cash on hand (including amounts drawn or available under Clear Channel’s senior secured credit facilities) as well as cash flow from operations will enable the Company to meet its working capital, capital expenditure, debt service and other funding requirements for at least the next 12 months.
The Company expects to be in compliance with the covenants contained in Clear Channel’s material financing agreements, including the subsidiary senior notes, in 2010, including the maximum consolidated senior secured net debt to adjusted EBITDA limitation contained in Clear Channel’s senior secured credit facilities. However, the Company’s anticipated results are subject to significant uncertainty and the Company’s ability to comply with this limitation may be affected by events beyond its control, including prevailing economic, financial and industry conditions. The breach of any covenants set forth in the financing agreements would result in a default thereunder. An event of default would permit the lenders under a defaulted financing agreement to declare all indebtedness thereunder to be due and payable prior to maturity. Moreover, the lendersreasonable under the revolving credit facility under the senior secured credit facilities would have the option to terminate their commitments to make further extensions of revolving credit thereunder. If the Company is unable to repay Clear Channel’s obligations under any senior secured credit facilities or the receivables based credit facility, the lenderscircumstances. Actual results could proceed against any assets that were pledged to secure such facility. In addition, a default or acceleration under any of Clear Channel’s material financing agreements, including the subsidiary senior notes, could cause a default under other obligations that are subject to cross-default and cross-acceleration provisions. The threshold amount for a cross-default under the senior secured credit facilities is $100 million dollars.
The Company’s and Clear Channel’s current corporate ratings are “CCC+” and “Caa2” by Standard & Poor’s Ratings Services and Moody’s Investors Service, respectively, which are speculative grade ratings. These ratings have been downgraded and then upgraded at various times during the two years ended December 31, 2009. The adjustments had no impact on Clear Channel’s borrowing costs under the credit agreements.
~~Format of Presentation~~
The accompanying consolidated statements of operations, statements of cash flows and shareholders’ equity are presented for two periods: post-merger and pre-merger. The merger resulted in a new basis of accounting beginning on July 31, 2008 and the financial reporting periods are presented as follows:
• The year ended December 31, 2009 and the period from July 31 through December 31, 2008 reflect the post-merger period of the Company, including the merger of a wholly-owned subsidiary of the Company with and into Clear Channel. Subsequent to the acquisition, Clear Channel became an indirect, wholly-owned subsidiary of the Company and the business of the Company became that of Clear Channel and its subsidiaries.
• The periods from January 1 through July 30, 2008 and the year ended December 31, 2007 reflect the pre-merger period of Clear Channel. Prior to its acquisition of Clear Channel, the Company had not conducted any activities, other than activities incident to its formation and in connection with the acquisition, and did not have any assets or liabilities, other than as related to the acquisition. The consolidated financial statements for all pre-merger periods were prepared using the historical basis of accounting for Clear Channel. As a result of the merger and the associated purchase accounting, the consolidated financial statements of the post-merger periods are not comparable to periods preceding the merger.
differ from those estimates.
Principles of Consolidation
The consolidated financial statements include the accounts of the Company and its subsidiaries. ~~All significant intercompany accounts have been eliminated~~Also included in ~~consolidation.~~the consolidated financial statements are entities for which the Company has a controlling financial interest or is the primary beneficiary. Investments in companies in which the Company owns 20 percent to 50 percent of the voting common stock or otherwise exercises significant influence over operating and financial policies of the ~~company~~Company are accounted for using the equity method of accounting.
All significant intercompany accounts have been eliminated in consolidation.
Certain prior period amounts have been reclassified to conform to the 2011 presentation.
The Company ~~holds nontransferable, noncompliant station combinations pursuant to~~owns certain ~~FCC~~radio stations which, under current Federal Communications Commission (“FCC”) rules, are not permitted or ~~in a few cases, pursuant to temporary waivers.~~transferable. These ~~noncompliant station combinations~~radio stations were placed in a trust in order to
85
~~bring~~ comply with FCC rules at the time of the closing of the merger ~~into compliance with~~that resulted in the ~~FCC’s media ownership rules.~~Company’s acquisition of Clear Channel. The Company is the beneficial owner of the trust, but the radio stations are managed by an independent trustee. The Company will have to divest all of ~~certain~~these radio stations ~~in these noncompliant station combinations. The trust will be terminated, with respect to each noncompliant station combination, if at~~unless any ~~time the~~ stations may be owned by the Company under ~~the~~ then-current FCC ~~media ownership rules.~~rules, in which case the trust will be terminated with respect to such stations. The trust agreement stipulates that the Company must fund any operating shortfalls of the trust activities, and any excess cash flow generated by the trust is distributed to the Company. The Company is also the beneficiary of proceeds from the sale of stations held in the trust. The Company consolidates the trust in accordance with ASC 810-10, which requires an enterprise involved with variable interest entities to perform an analysis to determine whether the enterprise’s variable interest or interests give it a controlling financial interest in the variable interest entity, as the trust was determined to be a variable interest entity and the Company is its primary beneficiary.

Cash and Cash Equivalents
Cash and cash equivalents include all highly liquid investments with an original maturity of three months or less.

CC MEDIA HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Allowance for Doubtful Accounts
The Company evaluates the collectability of its accounts receivable based on a combination of factors. In circumstances where it is aware of a specific customer’s inability to meet its financial obligations, it records a specific reserve to reduce the amounts recorded to what it believes will be collected. For all other customers, it recognizes reserves for bad debt based on historical experience of bad debts as a percent of revenue for each business unit, adjusted for relative improvements or deteriorations in the agings and changes in current economic conditions. The Company believes its concentration of credit risk is limited due to the large number and the geographic diversification of its customers.
~~Land Leases and Other Structure Licenses~~
Most of the Company’s outdoor advertising structures are located on leased land. Americas outdoor land rents are typically paid in advance for periods ranging from one to twelve months. International outdoor land rents are paid both in advance and in arrears, for periods ranging from one to twelve months. Most international street furniture display faces are operated through contracts with the municipalities for up to 20 years. The street furniture contracts often include a percent of revenue to be paid along with a base rent payment. Prepaid land leases are recorded as an asset and expensed ratably over the related rental term and license and rent payments in arrears are recorded as an accrued liability.

Purchase Accounting
The Company accounts for its business combinations under the acquisition method of accounting. The total cost of an acquisition is allocated to the underlying identifiable net assets, based on their respective estimated fair values. The excess of the purchase price over the estimated fair values of the net assets acquired is recorded as goodwill. Determining the fair value of assets acquired and liabilities assumed requires management’s judgment and often involves the use of significant estimates and assumptions, including assumptions with respect to future cash inflows and outflows, discount rates, asset lives and market multiples, among other items. Various acquisition agreements may include contingent purchase consideration based on performance requirements of the investee. The Company accounts for these payments in conformity with the provisions of ASC 805-20-30, which establish the requirements related to recognition of certain assets and liabilities arising from contingencies.

Property, Plant and Equipment
Property, plant and equipment are stated at cost. Depreciation is computed using the straight-line method at rates that, in the opinion of management, are adequate to allocate the cost of such assets over their estimated useful lives, which are as follows:
Buildings and improvements —- 10 to 39 years
Structures —- 5 to 40 years
Towers, transmitters and studio equipment —- 7 to 20 years
Furniture and other equipment —- 3 to 20 years
Leasehold improvements —- shorter of economic life or lease term assuming renewal periods, if appropriate
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For assets associated with a lease or contract, the assets are depreciated at the shorter of the economic life or the lease or contract term, assuming renewal periods, if appropriate. Expenditures for maintenance and repairs are charged to operations as incurred, whereas expenditures for renewal and betterments are capitalized.
The Company tests for possible impairment of property, plant, and equipment whenever events ~~or changes in~~and circumstances ~~such as a reduction in operating~~indicate that depreciable assets might be impaired and the undiscounted cash ~~flow or a dramatic change in~~flows estimated to be generated by those assets are less than the ~~manner for which~~carrying amounts of those assets. When specific assets are determined to be unrecoverable, the cost basis of the asset is ~~intended~~reduced to be used indicate that the carrying amount of the asset may not be recoverable. If indicators exist, the Company compares the estimated undiscounted future cash flows related to the asset to the carrying value of the asset. If the carrying value is greater than the estimated undiscounted future cash flow amount, an impairment charge is recorded in depreciation and amortization expense in the statement of operations for amounts necessary to reduce the carrying value of the asset to fair value. The impairment loss calculations require management to apply judgment in estimating future cash flows and the discount rates that reflect the ~~risk inherent~~current fair market value.
The Company impaired outdoor advertising structures in ~~future cash flows.~~
~~In the second quarter of~~its Americas outdoor segment by $4.0 million during 2010. During 2009, the Company recorded ~~an $8.7~~a $21.0 million impairment to street furniture tangible assets in its International ~~segment. Additionally, during the fourth quarter of 2009, the Company recorded a $12.3 million impairment primarily related to street furniture tangible assets in its International~~outdoor segment and an $11.3 million impairment of corporate assets.

Land Leases and Other Structure Licenses
Most of the Company’s outdoor advertising structures are located on leased land. Americas outdoor land leases are typically paid in advance for periods ranging from one to 12 months. International outdoor land leases are paid both in advance and in arrears, for periods ranging from one to 12 months. Most International street furniture display faces are operated through contracts with municipalities for up to 20 years. The leased land and street furniture contracts often include a percent of revenue to be paid along with a base rent payment. Prepaid land leases are recorded as an asset and expensed ratably over the related rental term and license and rent payments in arrears are recorded as an accrued liability.
Intangible Assets
~~The Company classifies~~ and Goodwill
Definite-lived intangible assets ~~as definite-lived, indefinite-lived or goodwill. Definite-lived intangibles~~ include primarily transit and street furniture contracts, talent and representation contracts, customer and advertiser relationships, and site-leases, all of which are amortized over the respective lives of the agreements, or over the period of time the assets are expected to contribute directly or indirectly to the Company’s future cash flows. The Company periodically reviews the appropriateness of the amortization periods related to its definite-lived intangible assets. These assets are recorded at cost.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
The Company tests for possible impairment of definite-lived intangible assets whenever events and circumstances indicate that amortizable long-lived assets might be impaired and the undiscounted cash flows estimated to be generated by those assets are less than the carrying amounts of those assets. When specific assets are determined to be unrecoverable, the cost basis of the asset is reduced to reflect the current fair market value.
The Company impaired certain definite-lived intangible assets primarily related to a talent contract in its CCME segment by $3.9 million during 2010. The Company impaired definite-lived intangible assets related to certain street furniture and billboard contract intangible assets in its Americas outdoor and International outdoor segments by ~~$38.8~~$55.3 million ~~as of June 30,~~during 2009. ~~During the fourth quarter of 2009, the Company recorded a $16.5 million impairment related to billboard contract intangible assets in its International segment.~~
The Company’s indefinite-lived ~~intangibles~~intangible assets include FCC broadcast ~~FCC~~ licenses in its ~~radio broadcasting~~CCME segment and billboard permits in its Americas outdoor advertising segment. The ~~excess cost over fair value of net assets acquired is classified as goodwill. The~~ Company’s indefinite-lived ~~intangibles and goodwill~~intangible assets are not subject to amortization, but are tested for impairment at least annually. The Company tests for possible impairment of ~~definite-lived~~indefinite-lived intangible assets whenever events or changes in circumstances, such as a significant reduction in operating cash flow or a dramatic change in the manner for which the asset is intended to be used indicate that the carrying amount of the asset may not be recoverable. If indicators exist, the Company compares the undiscounted cash flows related to the asset to the carrying value of the asset. If the carrying value is greater than the undiscounted cash flow amount, an impairment charge is recorded in amortization expense in the statement of operations for amounts necessary to reduce the carrying value of the asset to fair value.
The Company performs its annual impairment test for its FCC licenses and permits using a direct valuation technique as prescribed in ASC 805-20-S99. The key assumptions used in the direct valuation method include market revenue growth rates, market share, profit margin, duration and profile of the build-up period, estimated start-up cost and losses incurred during the build-up period, the risk adjusted discount rate and terminal values. The Company engages Mesirow Financial Consulting LLC (“Mesirow Financial”), a third party valuation firm, to assist the Company in the development of these assumptions and the Company’s determination of the fair value of its FCC licenses and permits.
The Company performed ~~an interim~~its annual impairment test on its indefinite-lived intangible assets as of ~~December 31, 2008~~October 1, 2011, which resulted in a non-cash impairment charge of $6.5 million related to permits in one specific market. The Company performed impairment tests during 2010 and ~~June 30,~~ 2009, which resulted in non-cash impairment charges of ~~$1.7 billion~~$5.3 million and $935.6 million, respectively, onrelated to its indefinite-lived FCC licenses and permits. See Note D2 for further discussion.
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At least annually, the Company performs its impairment test for each reporting unit’s ~~goodwill using a discounted cash flow model~~goodwill. Beginning with its annual impairment testing in the fourth quarter of 2011, the Company utilized the option to assess qualitative factors under ASC 350-20-35 to determine ~~if the carrying value of the reporting unit, including goodwill, is less~~whether it was more likely than not that the fair value of ~~the~~its reporting ~~unit.~~units was less than their carrying amounts, including goodwill. The Company has identified its reporting units in accordance with ASC 350-20-55. The U.S. radio markets are aggregated into a single reporting unit and the Company’s U.S. outdoor advertising markets are aggregated into a single reporting unit for purposes of the goodwill impairment test. The Company also determined that within its Americas outdoor segment, Canada, Mexico, Peru, and Brazil constitute separate reporting units and each country in its International outdoor segment constitutes a separate reporting unit.
~~Each of~~
If, after the ~~Company’s reporting units~~qualitative approach, further testing is ~~valued using~~required, the Company uses a discounted cash flow model ~~which requires estimating future cash flows expected~~ to ~~be generated from~~determine if the carrying value of the reporting unit, ~~discounted to their present value using a risk-adjusted discount rate. Terminal values were also estimated and discounted to their present value. Assessing the recoverability of~~including goodwill, requires the Company to make estimates and assumptions about sales, operating margins, growth rates and discount rates based on its budgets, business plans, economic projections, anticipated future cash flows and marketplace data. There are inherent uncertainties related to these factors and management’s judgment in applying these factors. The Company engages Mesirow Financial to assist the Company in the development of these assumptions and the Company’s determination ofis less than the fair value of the reporting unit. The Company recognized a non-cash impairment charge of $1.1 million to reduce goodwill in one country within its ~~reporting units.~~
International outdoor segments for 2011, which is further discussed in Note 2.
The Company performed ~~an interim~~its annual goodwill impairment test asduring 2010, and recognized a non-cash impairment charge of ~~December 31, 2008 and June 30,~~$2.1 million related to a specific reporting unit in its International outdoor segment. See Note 2 for further discussion. The Company performed its impairment tests during 2009 and recognized non-cash impairment charges of ~~$3.6 billion and~~ $3.1 ~~billion, respectively, to reduce its goodwill.~~billion. See Note D2 for further discussion.

Nonconsolidated Affiliates
In general, investments in which the Company owns 20 percent to 50 percent of the common stock or otherwise exercises significant influence over the investee are accounted for under the equity method. The Company does not recognize gains or losses upon the issuance of securities by any of its equity method investees. The Company reviews the value of equity method investments and records impairment charges in the statement of operations as a component of ~~“equity~~“Equity in earnings (loss) of nonconsolidated affiliates” for any decline in value that is determined to be other-than-temporary.

For 2010 and 2009, the Company recorded non-cash impairment charges of $8.3 million and $22.9 million, respectively, related to certain equity investments in its International outdoor segment.
CC MEDIA HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Other Investments
Other investments are composed primarily of equity securities. These securities are classified as available-for-sale or trading and are carried at fair value based on quoted market prices. Securities are carried at historical value when quoted market prices are unavailable. The net unrealized gains or losses on the available-for-sale securities, net of tax, are reported in accumulated other comprehensive loss as a component of shareholders’ equity. ~~The net unrealized gains or losses on the trading securities are reported in the statement of operations.~~ In addition, the Company holds investments that do not have quoted market prices. The Company periodically assesses the value of available-for-sale and non-marketable securities and records impairment charges in the statement of operations for any decline in value that is determined to be other-than-temporary. The average cost method is used to compute the realized gains and losses on sales of equity securities.
The Company periodically assesses the value of its available-for-sale securities. Based on these assessments, the Company concluded that an other-than-temporary ~~impairment~~impairments existed at December 31, ~~2008~~2011, 2010 and September 30, 2009 and recorded non-cash impairment charges of ~~$116.6~~$4.8 million, $6.5 million and $11.3 million, respectively, during each of these years. Such charges are recorded on the statement of operations in ~~“Gain (loss)~~“Loss on marketable securities”.
Derivative Instruments and Hedging Activities
The provisions of ASC 815-10 require the Company to recognize its interest rate swap agreement as either an asset or liability in the consolidated balance sheet at fair value. The accounting for changes in the fair value of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging relationship, and further, on the type of hedging relationship. The interest rate swap is designated and qualifies as a hedging instrument, and is characterized as a cash flow hedge. The Company ~~assessed~~formally documents all relationships between hedging instruments and hedged items, as well as its risk management objectives and strategies for undertaking various hedge transactions. The Company formally assesses, both at inception and at least quarterly thereafter, whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in either the fair value or cash flows of ~~these available-for-sale securities through December 31, 2009 and concluded that no other-than-temporary impairment existed.~~
the hedged item. If a derivative ceases to be a highly effective hedge, the Company discontinues hedge accounting.
Financial Instruments
Due to their short maturity, the carrying amounts of accounts and notes receivable, accounts payable, accrued liabilities, and short-term borrowings approximated their fair values at December 31, ~~2009~~2011 and ~~2008.~~
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2010.
Income Taxes
The Company accounts for income taxes using the liability method. Under this method, deferred tax assets and liabilities are determined based on differences between financial reporting bases and tax bases of assets and liabilities and are measured using the enacted tax rates expected to apply to taxable income in the periods in which the deferred tax asset or liability is expected to be realized or settled. Deferred tax assets are reduced by valuation allowances if the Company believes it is more likely than not that some portion or the entire asset will not be realized. As all earnings from the Company’s foreign operations are permanently reinvested and not distributed, the Company’s income tax provision does not include additional U.S. taxes on foreign operations. It is not practical to determine the amount of Federal income taxes, if any, that might become due in the event that the earnings were distributed.

Revenue Recognition
~~Radio broadcasting~~
CCME revenue is recognized as advertisements or programs are broadcast and is generally billed monthly. Outdoor advertising contracts typically cover periods of a few weeks up to ~~three years~~one year and are generally billed monthly. Revenue for outdoor advertising ~~space rental~~ is recognized ratably over the term of the contract. Advertising revenue is reported net of agency commissions. Agency commissions are calculated based on a stated percentage applied to gross billing revenue for the Company’s broadcasting and outdoor operations. Payments received in advance of being earned are recorded as deferred income.
Barter transactions represent the exchange of advertising spots or display space for merchandise or services. These transactions are ~~generally~~ recorded at the estimated fair market value of the advertising spots or display space or the fair value of the merchandise or services ~~received.~~received, whichever is most readily determinable. Revenue is recognized on barter and trade transactions when the advertisements are broadcasted or displayed. Expenses are recorded ratably over a period that estimates when the merchandise or service received is utilized, or when the event occurs. Barter and trade revenues and expenses from continuing operations are included in consolidated revenue and selling, general and administrative expenses, respectively. Barter and trade revenues and expenses from continuing operations ~~were:~~

Period from Period from
Year ended July 31 through January 1 through Year ended
December 31, December 31, July 30, December 31,
2009 2008 2008 2007
(In millions) Post-Merger Post-Merger Pre-Merger Pre-Merger
Barter and trade revenues $ 71.9 $ 33.7 $ 40.2 $ 70.7
Barter and trade expenses 86.7 35.0 38.9 70.4
were as follows:
CC MEDIA HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
$000.000 $000.000 $000.000
(In millions)    Years Ended December 31,
   2011    2010    2009
Barter and trade revenues
       $ 61.2           $ 67.0           $ 71.9
Barter and trade expenses
   63.4       66.4       86.7
Barter and trade expenses for 2009 include $14.9 million of trade receivables written off as it was determined they no longer had value to the Company.

Advertising Expense
The Company records advertising expense as it is incurred. Advertising expenses were $92.2 million, $82.0 million and $67.3 million for the years ended December 31, 2011, 2010 and 2009, respectively.
Share-Based ~~Payments~~
Compensation
Under the fair value recognition provisions of ASC 718-10, ~~stock based~~share-based compensation cost is measured at the grant date based on the fair value of the award. For awards that vest based on service conditions, this cost is recognized as expense on a straight-line basis over the vesting period. For awards that will vest based on market or performance ~~and service~~ conditions, this cost will be recognized when it becomes probable that the performance conditions will be satisfied. Determining the fair value of share-based awards at the grant date requires assumptions and judgments about expected volatility and forfeiture rates, among other factors. If actual results differ significantly from these estimates, the Company’s results of operations could be materially impacted.
~~Derivative Instruments and Hedging Activities~~
The provisions of ASC 815-10 require the Company to recognize all of its derivative instruments as either assets or liabilities in the consolidated balance sheet at fair value. The accounting for changes in the fair value of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging relationship, and further, on
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the type of hedging relationship. For derivative instruments that are designated and qualify as hedging instruments, the Company must designate the hedging instrument, based upon the exposure being hedged, as a fair value hedge, cash flow hedge or a hedge of a net investment in a foreign operation. The Company formally documents all relationships between hedging instruments and hedged items, as well as its risk management objectives and strategies for undertaking various hedge transactions. The Company formally assesses, both at inception and at least quarterly thereafter, whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in either the fair value or cash flows of the hedged item. If a derivative ceases to be a highly effective hedge, the Company discontinues hedge accounting. The Company accounts for its derivative instruments that are not designated as hedges at fair value, with changes in fair value recorded in earnings. The Company does not enter into derivative instruments for speculation or trading purposes.
Foreign Currency
Results of operations for foreign subsidiaries and foreign equity investees are translated into U.S. dollars using the average exchange rates during the year. The assets and liabilities of those subsidiaries and investees ~~other than those of operations in highly inflationary countries,~~ are translated into U.S. dollars using the exchange rates at the balance sheet date. The related translation adjustments are recorded in a separate component of shareholders’ equity, “Accumulated other comprehensive income (loss)”. Foreign currency transaction gains and losses ~~as well as gains and losses from translation of financial statements of subsidiaries and investees in highly inflationary countries,~~ are included in operations.
~~Advertising Expense~~
~~The Company records advertising expense as it is incurred. Advertising expenses from continuing operations were:~~

Period from July Period from
Year ended 31 through January 1 Year ended
December 31, December 31, through July 30, December 31,
2009 2008 2008 2007
(In millions) Post-Merger Post-Merger Pre-Merger Pre-Merger
Advertising expenses $ 67.3 $ 51.8 $ 56.1 $ 138.5
~~Use of Estimates~~
The preparation of the consolidated financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates, judgments, and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes including, but not limited to, legal, tax and insurance accruals. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Actual results could differ from those estimates.

New Accounting Pronouncements
In ~~January 2010,~~April 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. ~~2010-02,~~2011-04,~~Accounting~~Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and ~~Reporting for Decreases~~Disclosure Requirements in ~~Ownership of a Subsidiary—a Scope Clarification~~U.S. GAAP and IFRSs. The ~~update is~~amendments in this ASU change the wording used to ~~ASC~~describe many of the requirements in U.S. GAAP for measuring fair value and for disclosing information about fair value measurements. For many of the requirements, the FASB does not intend for the amendments in this ASU to result in a change in the application of the requirements in Topic ~~810,~~~~Consolidation~~.820. Some of the amendments clarify the FASB’s intent about the application of existing fair value measurement requirements. Other amendments change a particular principle or requirement for measuring fair value or for disclosing information about fair value measurements. The amendments in this ASU ~~clarifies that~~are to be applied prospectively for interim and annual periods beginning after December 15, 2011. The Company does not expect the ~~decrease-in-ownership~~ provisions of ~~ASC 810-10~~ASU 2011-04 to have a material effect on its financial position or results of operations.
In June 2011, the FASB issued ASU No. 2011-05,Comprehensive Income (Topic 220): Presentation of Comprehensive Income.This ASU improves the comparability, consistency, and ~~related guidance~~transparency of financial reporting and increases the prominence of items reported in other comprehensive income by eliminating the option to present components of other comprehensive income as part of the statement of changes in stockholders’ equity. The amendments require that all nonowner changes in stockholders’ equity be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements. The changes apply to (1) a subsidiary or group of assets that is a business or nonprofit activity, (2) a subsidiary or group of assets that is a business or nonprofit activity that is transferred to an equity method investee or joint venture,for interim and (3) an exchange of a group of assets that constitutes a business or nonprofit activity for a noncontrolling interest in an entity (including an equity method investee or joint venture). In addition, the ASU expands the information an entity is required to disclose upon deconsolidation of a subsidiary. This standard isannual financial statements and should be applied retrospectively, effective for fiscal years, ~~ending on or~~and interim periods within those years, beginning after December 15, ~~2009 with retrospective application required for the first period in which the entity adopted Statement of Financial Accounting Standards No. 160.~~2011. Early adoption is permitted. The Company currently complies with the provisions of this ASU by presenting the components of comprehensive income in a single continuous financial statement within its consolidated statement of operations for both interim and annual periods.
In September 2011, the FASB issued ASU No. 2011-08, Intangibles-Goodwill and Other (Topic 350): Testing Goodwill for Impairment.Under the revised guidance, entities testing goodwill for impairment have the option of performing a qualitative assessment before calculating the fair value of the reporting unit (i.e., step 1 of the goodwill impairment test). If entities determine, on the basis of qualitative factors, that the fair value of the reporting unit is more likely than not less than the
CC MEDIA HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
carrying amount, the two-step impairment test would be required. The ASU does not change how goodwill is calculated or assigned to reporting units, nor does it revise the requirement to test goodwill annually for impairment. The amendments are effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. Early adoption is permitted. The Company early adopted the ~~amendment upon issuance~~provisions of this ASU as of October 1, 2011 with no material impact to its financial position or results of operations.
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Please refer to Note 2 for additional discussion.
In December ~~2009,~~2011, the FASB issued ASU No. ~~2009-17,~~2011-12~~Improvements~~, Comprehensive Income (Topic 220): Deferral of the Effective Date for Amendments to ~~Financial Reporting by Enterprises Involved with Variable Interest Entities~~the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05. The ~~update is~~ASU defers the requirement to ~~ASC Topic 810,~~~~Consolidation~~~~. This standard amends ASC 810-10-25 by requiring consolidation~~present components of ~~certain special purpose entities that were previously exempted from consolidation. The revised criteria will define a controlling financial interest for requiring consolidation as:~~reclassifications of other comprehensive income on the ~~power to direct the activities that most significantly affect the entity’s performance, and (1) the obligation to absorb losses~~face of the ~~entity or (2)~~income statement in response to requests from some investors for greater clarity about the ~~right~~impact of reclassification adjustments on net income. The guidance in ASU 2011-05 called for reclassification adjustments from other comprehensive income to ~~receive benefits from the entity. This standard is~~be measured and presented by income statement line item in net income and also in other comprehensive income. All other requirements in ASU 2011-05 are not affected by this Update. The amendments are effective for fiscal years, and interim periods within those years, beginning after ~~November~~December 15, ~~2009.~~2011. The Company ~~adopted~~does not expect the ~~amendment~~provisions of ASU 2011-12 to have a material effect on ~~January 1, 2010 with no material impact to~~ its financial position or results of operations.
~~In August 2009,~~
NOTE 2 – PROPERTY, PLANT AND EQUIPMENT, INTANGIBLE ASSETS AND GOODWILL
Acquisitions
On April 29, 2011, a wholly owned subsidiary of the ~~FASB issued ASU No. 2009-05,~~~~Measuring Liabilities at Fair Value~~~~. The update is~~Company purchased the traffic business of Westwood One, Inc. for $24.3 million. Immediately after closing, the acquired subsidiaries repaid pre-existing, intercompany debt owed by the subsidiaries to ~~ASC Subtopic 820-10,~~~~Fair Value Measurements and Disclosures-Overall~~, for the fair value measurement of liabilities. The purpose of this update is to reduce ambiguity in financial reporting when measuring the fair value of liabilities. The guidance provided in this update is effective for the first reporting period beginning after the date of issuance. The Company adopted the amendment on October 1, 2009 with no material impact to its financial position or results of operations.
~~Statement of Financial Accounting Standards No. 168,~~~~The FASB Accounting Standards Codification~~^TM ~~and the Hierarchy of Generally Accepted Accounting Principles, codified in ASC 105-10, was issued in June 2009. ASC 105-10 identifies the sources of accounting principles and the framework for selecting the principles used~~Westwood One, Inc. in the preparation of financial statements of nongovernmental entities that are presented in conformity with GAAP in the United States. ASC 105-10 establishes the ASC as the source of authoritative GAAP recognized by the FASB to be applied by nongovernmental entities. Following this statement, the FASB will issue new standards in the form of ASUs. ASC 105-10 is effective for financial statements issued for interim and annual periods ending after September 15, 2009. The Company adopted the provisions of ASC 105-10 on July 1, 2009.
~~Statement of Financial Accounting Standards No. 167,~~~~Amendments to FASB Interpretation No. 46(R)~~ (“Statement No. 167”), which is not yet codified, was issued in June 2009. Statement No. 167 shall be effective as of the beginning of each reporting entity’s first annual reporting period that begins after November 15, 2009, for interim periods within that first annual reporting period, and for interim and annual reporting periods thereafter. Earlier application is prohibited. Statement No. 167 amends Financial Accounting Standards Board Interpretation No. 46(R),~~Consolidation of Variable Interest Entities~~, codified in ASC 810-10-25, to replace the quantitative-based risks and rewards calculation for determining which enterprise, if any, has a controlling financial interest in a variable interest entity with an approach focused on identifying which enterprise has the power to direct the activities of a variable interest entity that most significantly impact the entity’s economic performance and (1) the obligation to absorb losses of the entity or (2) the right to receive benefits from the entity. An approach that is expected to be primarily qualitative will be more effective for identifying which enterprise has a controlling financial interest in a variable interest entity. Statement No. 167 requires an additional reconsideration event when determining whether an entity is a variable interest entity when any changes in facts and circumstances occur such that the holders of the equity investment at risk, as a group, lose the power from voting rights or similar rights of those investments to direct the activities of the entity that most significantly impact the entity’s economic performance. It also requires ongoing assessments of whether an enterprise is the primary beneficiary of a variable interest entity. These requirements will provide more relevant and timely information to users of financial statements. Statement No. 167 amends ASC 810-10-25 to require additional disclosures about an enterprise’s involvement in variable interest entities, which will enhance the information provided to users of financial statements. The Company adopted Statement No. 167 on January 1, 2010 with no material impact to its financial position or results of operations.
~~Statement of Financial Accounting Standards No. 165,~~~~Subsequent Events~~, codified in ASC 855-10, was issued in May 2009. The provisions of ASC 855-10 are effective for interim and annual periods ending after June 15, 2009 and are intended to establish general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. ASC 855-10 requires the disclosure of the date through which an entity has evaluated subsequent events and the basis for that date—that is, whether that date represents the date the financial statements were issued or were available to be issued. This disclosure should alert all users of financial statements that an entity has not evaluated subsequent events after that date in the set of financial statements being presented. In accordance with the provisions of ASC 855-10, the Company currently evaluates subsequent events through the date the financial statements are issued.
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~~FASB Staff Position Emerging Issues Task Force 03-6-1,~~~~Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities~~, codified in ASC 260-10-45, was issued in June 2008. ASC 260-10-45 clarifies that unvested share-based payment awards with a right to receive nonforfeitable dividends are participating securities. Guidance is also provided on how to allocate earnings to participating securities and compute basic earnings per share using the two-class method. All prior-period earnings per share data presented shall be adjusted retrospectively (including interim financial statements, summaries of earnings, and selected financial data) to conform with the provisions of ASC 260-10-45. The Company retrospectively adopted the provisions of ASC 260-10-45 on January 1, 2009. The impact of adopting ASC 260-10-45 decreased previously reported basic earnings per share by $.01 for the pre-merger year ended December 31, 2007.
~~Statement of Financial Accounting Standards No. 160,~~~~Noncontrolling Interests in Consolidated Financial Statements — an amendment of ARB No. 51~~, codified in ASC 810-10-45, was issued in December 2007. ASC 810-10-45 clarifies the classification of noncontrolling interests in consolidated statements of financial position and the accounting for and reporting of transactions between the reporting entity and holders of such noncontrolling interests. Under this guidance, noncontrolling interests are considered equity and should be reported as an element of consolidated equity, net income will encompass the total income of all consolidated subsidiaries and there will be separate disclosure on the face of the income statement of the attribution of that income between the controlling and noncontrolling interests, and increases and decreases in the noncontrolling ownership interest amount will be accounted for as equity transactions. The provisions of ASC 810-10-45 are effective for the first annual reporting period beginning on or after December 15, 2008, and earlier application is prohibited. Guidance is required to be adopted prospectively, except for reclassifying noncontrolling interests to equity, separate from the parent’s shareholders’ equity, in the consolidated statement of financial position and recasting consolidated net income (loss) to include net income (loss) attributable to both the controlling and noncontrolling interests, both of which are required to be adopted retrospectively. The Company adopted the provisions of ASC 810-10-45 on January 1, 2009, which resulted in a reclassification of approximately $426.2 million of noncontrolling interests to shareholders’ equity. Adoption of this standard requires retrospective application in the financial statements of earlier periods on January 1, 2009. In connection with the offering of $500.0 million aggregate principal amount of Series A Senior Notes and $2.0 billion aggregate principal amount of Series B Senior Notes by the Company’s subsidiary, the Company filed a Form 8-K filed on December 11, 2009 to retrospectively recast the historical financial statements and certain disclosures included in its Annual Report on Form 10-K for the year ended December 31, 2008 for the adoption of ASC 810-10-45.
~~Statement of Financial Accounting Standards No. 161,~~~~Disclosures about Derivative Instruments and Hedging Activities,~~codified in ASC 815-10-50, was issued in March 2008. ASC 815-10-50 requires additional disclosures about how and why an entity uses derivative instruments, how derivative instruments and related hedged items are accounted for and how derivative instruments and related hedged items effect an entity’s financial position, results of operations and cash flows.$95.0 million. The ~~Company adopted the provisions of ASC 815-10-50 on January 1, 2009. Please refer to Note H for disclosure required by ASC 815-10-50.~~
~~FASB Staff Position No. FAS 157-2,~~~~Effective Date of FASB Statement No. 157~~~~, codified in ASC 820-10, was issued in February 2008. ASC 820-10 delays the effective date of FASB Statement No. 157,~~~~Fair Value Measurements~~, for nonfinancial assets and liabilities, except for items that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually), to fiscal years beginning after November 15, 2008. The Company adopted the provisions of ASC 820-10 on January 1, 2009 with no material impact to its financial position or results of operations.
~~FASB Staff Position No. FAS 157-4,~~~~Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly~~, codified in ASC 820-10-35, was issued in April 2009. ASC 820-10 provides additional guidance for estimating fair value when the volume and level of activity for the asset or liability have significantly decreased. ASC 820-10 also includes guidance on identifying circumstances that indicate a transaction is not orderly. This guidance is effective for interim and annual reporting periods ending after June 15, 2009, and shall be applied prospectively. Early adoption is permitted for periods ending after March 15, 2009. Earlier adoption for periods ending before March 15, 2009 is not permitted. The Company adopted the provisions of ASC 820-10 on April 1, 2009 with no material impact to its financial position or results of operations.
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~~FASB Staff Position No. FAS 115-2 and FAS 124-2,~~~~Recognition and Presentation of Other-Than-Temporary Impairments~~, codified in ASC 320-10-35, was issued in April 2009. It amends the other-than-temporary impairment guidance in U.S. GAAP for debt securities to make the guidance more operational and to improve the presentation and disclosure of other-than-temporary impairments on debt and equity securities in the financial statements. ASC 320-10-35 does not amend existing recognition and measurement guidance related to other-than-temporary impairments of equity securities. This guidance is effective for interim and annual reporting periods ending after June 15, 2009, with early adoption permitted for periods ending after March 15, 2009. Earlier adoption for periods ending before March 15, 2009 is not permitted. The Company adopted the provisions of ASC 320-10-35 on April 1, 2009 with no material impact to its financial position or results of operations.
~~FASB Staff Position No. FAS 107-1 and APB 28-1,~~~~Interim Disclosures about Fair Value of Financial Instruments~~, codified in ASC 825-10-50, was issued in April 2009. ASC 825-10-50 amends prior authoritative guidance to require disclosures about fair value of financial instruments for interim reporting periods of publicly traded companies as well as in annual financial statements. The provisions of ASC 825-10-50 are effective for interim reporting periods ending after June 15, 2009, with early adoption permitted for periods ending after March 15, 2009. The Company adopted the disclosure requirements of ASC 825-10-50 on April 1, 2009.
~~NOTE B — BUSINESS ACQUISITIONS~~
~~2009 Purchases of Additional Equity Interests~~
During 2009, the Company’s Americas outdoor segment purchased the remaining 15% interest in its consolidated subsidiary, Paneles Napsa S.A., for $13.0 million and the Company’s International outdoor segment acquired an additional 5% interest in its consolidated subsidiary, Clear Channel Jolly Pubblicita SPA, for $12.1 million.
~~2008 Acquisitions~~
~~The Company completed its~~ acquisition ~~of Clear Channel on July 30, 2008. The transaction was accounted for as a purchase in accordance with Statement of Financial Accounting Standards No. 141,~~~~Business Combinations~~~~, and Emerging Issues Task Force Issue 88-16,~~~~Basis in Leveraged Buyout Transactions~~. The Company allocated a portion of the consideration paid to the assets and liabilities acquired at their respective fair values with the remaining portion recorded at the continuing shareholders’ basis. Excess consideration after this allocation was recorded as goodwill. The purchase price allocation was complete as of July 30, 2009 in accordance with ASC 805-10-25, which requires that the allocation period not exceed one year from the date of acquisition.
~~Following is a summary of the purchase price allocations:~~

Preliminary 2008 2009 Final
(In thousands) Allocation Adjustments Adjustments Allocation
Consideration paid $ 18,082,938 $ 18,082,938
Debt assumed 5,136,929 5,136,929
Historical carryover basis (825,647 ) (825,647 )

$ 22,394,220 $ 22,394,220

Total current assets 2,311,777 5,041 1,234 2,318,052
PP&E — net 3,745,422 125,357 (2,664 ) 3,868,115
Intangible assets — net 20,634,499 (764,472 ) 51,293 19,921,320
Long-term assets 1,079,704 44,787 — 1,124,491
Current liabilities (1,219,033 ) (13,204 ) 26,555 (1,205,682 )
Long-term liabilities (4,158,149 ) 602,491 (43,036 ) (3,598,694 )

22,394,220 — 33,382 22,427,602
Other comprehensive income — — (33,382 ) (33,382 )

$ 22,394,220 $ — $ — $ 22,394,220

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~~2008 Adjustments~~
The adjustments to PP&E – net primarily relate to fair value appraisals received for land and buildings. The adjustments to intangible assets – net primarily relate to an aggregate $3.6 billion adjustment to lower the estimated fair value of the Company’s FCC licenses and permits based on appraised values, partially offset by a $1.5 billion fair value adjustment to recognize advertiser relationships and trade names in the Company’s radio segment based on appraised values, a $240.6 million fair value adjustment to advertising contracts in the Company’s Americas and International outdoor segments based on appraised values and an increase of $1.0 billion to goodwill. The adjustment to long-term liabilities primarily relates to the deferred tax effects of the fair value adjustments.
~~The purchase price allocation adjustments related to the Company’s FCC licenses, permits and goodwill were recorded prior to the Company’s interim impairment test.~~
~~2009 Adjustments~~
During the first seven months of 2009, the Company decreased the initial fair value estimate of its permits, contracts, site leases and other assets and liabilities primarily in its Americas outdoor segment by $116.1 million based on additional information received, which resulted in an increase ~~to goodwill~~ of ~~$71.7 million and a decrease to deferred taxes of $44.4 million. During the third quarter of 2009, the Company increased its deferred tax liability by $44.3~~$17.2 million to true-up its tax rates in certain jurisdictions that were estimated in the initial purchase price allocation. Additionally, the Company increased other comprehensive income by $33.4 million and decreased accrued income taxes by $18.9 million. Other miscellaneous adjustments resulted in an additional increase of $15.0 million to goodwill and a decrease of $8.6 million to other intangible assets. Also, during the third quarter of 2009, the Company recorded a $45.0 million increase to goodwill in its International outdoor segment related to the fair value of certain noncontrolling interests which existed at the merger date, with no related tax effect. This noncontrolling interest was recorded pursuant to ASC 480-10-S99 which determines the classification of redeemable noncontrolling interests. The Company subsequently determined that the increase in goodwill related to these noncontrolling interests should have been included in the impairment charge resulting from the December 31, 2008 interim goodwill impairment test. As a result, during the fourth quarter of 2009, the Company impaired this entire goodwill amount, which after considering the effects of foreign exchange movements, was $41.4 million.
~~The purchase price allocation was complete as of July 30, 2009 in accordance with ASC 805-10-25, which requires that the allocation period not exceed one year from the date of acquisition.~~
The following unaudited supplemental pro forma information reflects the consolidated results of operations of the Company as if the merger had occurred on January 1, 2007. The historical financial information was adjusted to give effect to items that are (i) directly attributed to the merger, (ii) factually supportable, and (iii) expected to have a continuing impact on the consolidated results. Such items include depreciation and amortization expense associated with preliminary valuations of property, plant and equipment, ~~and definite-lived~~$35.0 million to intangible assets ~~corporate expenses associated with new equity based awards granted~~and $70.6 million to ~~certain members of management, expenses associated with the accelerated vesting of employee share based awards upon closing~~goodwill.
During 2011, a subsidiary of the ~~merger, interest expense related to debt issued~~Company acquired Brouwer & Partners, a street furniture business in ~~conjunction with the merger~~Holland, for $12.5 million.
Property, Plant and ~~the fair value adjustment to Clear Channel’s existing debt~~Equipment
The Company’s property, plant and ~~the related tax effects of these items. This unaudited pro forma information should not be relied upon as necessarily being indicative~~equipment consisted of the ~~historical results that would have been obtained if the merger had actually occurred on that date, nor~~following classes of ~~the results that may be obtained in the future.~~

(In thousands) Unaudited Unaudited
Period from January Year ended
1 through July 30, December 31,
2008 2007
(In thousands) Pre-merger Pre-merger
Revenue $ 3,951,742 $ 6,921,202
Income (loss) before discontinued operations $ (64,952 ) $ 4,179
Net income (loss) $ 575,284 $ 150,012
Earnings (loss) per share — basic $ 7.08 $ 1.85
Earnings (loss) per share — diluted $ 7.05 $ 1.85
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~~The Company also acquired~~ assets in its operating segments in addition to the merger described above. The Company acquired FCC licenses in its radio segment for $11.7 million in cash during 2008. The Company acquired outdoor display faces and additional equity interests in international outdoor companies for $96.5 million in cash during 2008. The Company’s national representation business acquired representation contracts valued at ~~$68.9 million during 2008.~~
~~2007 Acquisitions~~
Clear Channel acquired domestic outdoor display faces and additional equity interests in international outdoor companies for $69.1 million in cash during 2007. Clear Channel’s national representation business acquired representation contracts for $53.0 million in cash during 2007.
~~The following is a summary of the assets and liabilities acquired and the consideration given for acquisitions made during 2007:~~

(In thousands) 2007
Property, plant and equipment $ 28,002
Accounts receivable —
Definite lived intangibles 55,017
Indefinite-lived intangible assets 15,023
Goodwill 41,696
Other assets 3,453

143,191
Other liabilities (13,081 )
Noncontrolling interest —
Deferred tax —
Subsidiary common stock issued, net of noncontrolling interest —

(13,081 )

Less: fair value of net assets exchanged in swap (8,000 )

Cash paid for acquisitions $ 122,110

The Company has entered into certain agreements relating to acquisitions that provide for purchase price adjustments and other future contingent payments based on the financial performance of the acquired company. The Company will continue to accrue additional amounts related to such contingent payments if and when it is determinable that the applicable financial performance targets will be met. The aggregate of these contingent payments, if performance targets were met, would not significantly impact the Company’s financial position or results of operations.
~~NOTE C – DISCONTINUED OPERATIONS~~
~~Sale of non-core radio stations~~
The Company determined that each radio station market in Clear Channel’s previously announced non-core radio station sales represents a disposal group consistent with the provisions of ASC 360-10. Consistent with the provisions of ASC 360-10, the Company classified these assets that are subject to transfer under the definitive asset purchase agreements as discontinued operations for all periods presented. Accordingly, depreciation and amortization associated with these assets was discontinued. Additionally, the Company determined that these assets comprised operations and cash flows that can be clearly distinguished, operationally and for financial reporting purposes, from the rest of the Company.
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~~Sale of the television business~~
On March 14, 2008, Clear Channel completed the sale of its television business to Newport Television, LLC for $1.0 billion, adjusted for certain items including proration of expenses and adjustments for working capital. As a result, Clear Channel recorded a gain of $662.9 million as a component of “Income (loss) from discontinued operations, net” in its consolidated statement of operations during the first quarter of 2008. Additionally, net income and cash flows from the television business were classified as discontinued operations in the consolidated statements of operations and the consolidated statements of cash flows, respectively, in 2008 through the date of sale and for the year ended December 31, ~~2007. The net assets related to the television business were classified as discontinued operations as of December 31, 2007.~~
~~Summarized Financial Information of Discontinued Operations~~
~~Summarized operating results for the years ended December 31, 2008~~2011 and ~~2007 from these businesses are as follows:~~

Period from July 31 Period from January Year ended
through December 31, 1 through July 30, December 31,
2008 2008 2007
(In thousands) Post-Merger Pre-Merger Pre-Merger
Revenue $ 1,364 $ 74,783 $ 442,263
Income (loss) before income taxes $ (3,160 ) $ 702,698 $ 209,882
Included in income (loss) from discontinued operations, net is an income tax benefit of $1.3 million for the period July 31 through December 31, 2008. Included for the period from January 1 through July 30, 2008 is income tax expense of $62.4 million and a gain of $695.8 million related to the sale of Clear Channel’s television business and certain radio stations. The Company estimates utilization of approximately $585.3 million of capital loss carryforwards to offset a portion of the taxes associated with these gains. The Company had approximately $699.6 million, before valuation allowance, in capital loss carryforwards remaining as of December 31, 2008.
Included in income (loss) from discontinued operations, net is income tax expense of $64.0 million for the year ended December 31, 2007. Also included in income (loss) from discontinued operations, net for the year ended December 31, 2007 are gains on the sale of certain radio stations of $144.6 million.
~~NOTE D — INTANGIBLE ASSETS~~2010, respectively:
$0,000,000,00 $0,000,000,00
(In thousands)    December 31,    December 31,
   2011    2010
Land, buildings and improvements
     $ 657,346           $ 652,575
Structures
   2,783,434         2,623,561
Towers, transmitters and studio equipment
   400,832         397,434
Furniture and other equipment
   365,137         282,385
Construction in progress
   68,658         65,173




   4,275,407         4,021,128
Less: accumulated depreciation
   1,212,080         875,574




Property, plant and equipment, net
     $ 3,063,327           $ 3,145,554




CC MEDIA HOLDINGS, INC. AND ~~GOODWILL~~
SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Definite-lived Intangible Assets
The Company has definite-lived intangible assets which consist primarily of transit and street furniture contracts, permanent easements that provide the Company access to certain of its outdoor displays, and other contractual rights in its Americas and International outdoor segments. The Company has talent and program right contracts in its radio segment and contracts for non-affiliated radio and television stations in its media representation operations. These definite-lived intangible assets are amortized over the shorter of either the respective lives of the agreements or over the period of time the assets are expected to contribute directly or indirectly to the Company’s future cash flows.
The following table presents the gross carrying amount and accumulated amortization for each major class of definite-lived intangible assets at December 31, ~~2009~~2011 and ~~2008:~~
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2010, respectively:
$0,000,000,00 $0,000,000,00 $0,000,000,00 $0,000,000,00
(In thousands)    December 31, 2011    December 31, 2010
   Gross Carrying
Amount    Accumulated
Amortization    Gross Carrying
Amount    Accumulated
Amortization
Transit, street furniture, and other outdoor contractual rights
     $ 773,238           $ 329,563           $ 789,867           $ 256,685
Customer / advertiser relationships
   1,210,269         409,794         1,210,205         289,824
Talent contracts
   347,489         139,154         317,352         99,050
Representation contracts
   237,451         137,058         231,623         101,650
Other
   560,978         96,096         551,197         64,886








Total
     $ 3,129,425           $ 1,111,665           $ 3,100,244           $ 812,095








Post-Merger Post-Merger
December 31, 2009 December 31, 2008
Gross Carrying Accumulated Gross Carrying Accumulated
(In thousands) Amount Amortization Amount Amortization
Transit, street furniture, and other outdoor contractual rights $ 803,297 $ 166,803 $ 883,130 $ 49,818
Customer / advertiser relationships 1,210,205 169,897 1,210,205 49,970
Talent contracts 320,854 57,825 161,644 7,479
Representation contracts 218,584 54,755 216,955 21,537
Other 550,041 54,457 548,180 9,590

Total $ 3,102,981 $ 503,737 $ 3,020,114 $ 138,394

Total amortization expense ~~from continuing operations~~ related to definite-lived intangible assets ~~was:~~

Period from July Period from
Year ended 31 through January 1 through Year ended
December 31, December 31, July 30, December 31,
2009 2008 2008 2007
(In millions) Post-Merger Post-Merger Pre-Merger Pre-Merger
Amortization expense $ 341.6 $ 150.3 $ 58.3 $ 105.0
~~Included in amortization expense in 2009 is $32.4~~was $328.3 million, $332.3 million, and $341.6 million for ~~amounts since~~ the ~~date of the merger related to a purchase accounting adjustment of $157.7 million to increase the balance of the Company’s talent contracts.~~
~~During the first seven months of~~years ended December 31, 2011, 2010 and 2009, the Company decreased the initial fair value estimate of its permits, contracts, site leases, and other assets and liabilities primarily in its Americas segment by $116.1 million based on additional information received.
respectively.
As acquisitions and dispositions occur in the future, ~~and as purchase price allocations are finalized,~~ amortization expense may vary. The following table presents the Company’s estimate of amortization expense for each of the five succeeding fiscal years for definite-lived intangible assets:

(In thousands)
2010 $ 319,967
2011 298,927
2012 289,449
2013 275,033
2014 253,626

$000000000
(In thousands)
  2012
   $ 302,374
  2013
   282,921
  2014
   259,860
  2015
   232,293
  2016
   217,248
Indefinite-lived Intangible Assets
and Goodwill
The Company’s indefinite-lived intangible assets consist of FCC broadcast licenses and billboard permits. FCC broadcast licenses are granted to radio stations for up to eight years under the Telecommunications Act of 1996 (the “Act”). The Act requires the FCC to renew a broadcast license if the FCC finds that the station has served the public interest, convenience and necessity, there have been no serious violations of either the Communications Act of 1934 or the FCC’s rules and regulations by the licensee, and there have been no other serious violations which taken together constitute a pattern of abuse. The licenses may be renewed indefinitely at little or no cost. The Company does not believe that the technology of wireless broadcasting will be replaced in the foreseeable future.
The Company’s billboard permits are ~~effectively issued in perpetuity by state and local governments and are transferable or renewable at little or no cost. Permits typically specify the location which allows the Company~~granted for the right to operate an advertising structure at the specified ~~location.~~location as long as the structure is in compliance with the laws and regulations of each jurisdiction. The Company’s permits are located on owned
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land, leased land or land for which we have acquired permanent easements. In cases where the Company’s permits are located on leased land, the leases typically have initial terms of between 10 and 20 years and renew indefinitely, with rental payments generally escalating at an inflation-based index. If the Company loses its lease, the Company will typically obtain permission to relocate the permit or bank it with the municipality for future use.
~~The indefinite-lived intangibles~~ Due to significant differences in both business practices and ~~goodwill~~regulations, billboards in the International outdoor segment are ~~not~~ subject to ~~amortization, but~~long-term, finite contracts unlike the Company’s permits in the United States and Canada. Accordingly, there are ~~tested for impairment at least annually. The Company tests for possible impairment of~~no indefinite-lived intangible assets ~~whenever events or changes in circumstances, such as a reduction in operating cash flow or a dramatic change~~ in the manner for which the asset is intended to be used, indicate that the carrying amount of the asset may not be recoverable. If indicators exist, the Company compares the undiscounted cash flows related to the asset to the carrying value of the asset. If the carrying value is greater than the undiscounted cash flow amount, an impairment charge is recorded in amortization expense in the statement of operations for amounts necessary to reduce the carrying value of the asset to fair value.
~~Interim Impairments to FCC Licenses~~
The United States and global economies have undergone an economic downturn, which caused, among other things, a general tightening in the credit markets, limited access to the credit markets, lower levels of liquidity and lower consumer and business spending. These disruptions in the credit and financial markets and the impact of adverse economic, financial and industry conditions on the demand for advertising negatively impacted the key assumptions used in the discounted cash flow models used to value the Company’s FCC licenses since the merger. Therefore, the Company performed an interim impairment test on its FCC licenses as of December 31, 2008, which resulted in a non-cash impairment charge of $936.2 million.
The industry cash flows forecast by BIA Financial Network, Inc. (“BIA”) during the first six months of 2009 were below the BIA forecast used in the discounted cash flow model used to calculate the impairment at December 31, 2008. As a result, the Company performed another interim impairment test as of June 30, 2009 on its FCC licenses resulting in an additional non-cash impairment charge of $590.3 million.
International outdoor segment.
The impairment ~~test consisted~~tests for indefinite-lived intangible assets consist of a comparison ofbetween the fair value of the ~~FCC licenses~~indefinite-lived intangible asset at the market level with ~~their~~its carrying amount. If the carrying amount of the ~~FCC license exceeded~~indefinite-lived intangible asset exceeds its fair value, an impairment loss ~~was~~is recognized equal to that excess. After an impairment loss is recognized, the adjusted carrying amount of the ~~FCC license~~indefinite-lived asset is its new accounting basis. The fair value of the ~~FCC licenses was~~indefinite-lived asset is determined using the direct valuation method as prescribed in ASC 805-20-S99. Under the direct valuation method, the fair value of the ~~FCC licenses was~~indefinite-lived assets is calculated at the market level as prescribed by ASC 350-30-35. The Company engaged Mesirow Financial, a third-party valuation firm, to assist it in the development of the assumptions and the Company’s determination of the fair value of its ~~FCC licenses.~~
indefinite-lived intangible assets.
CC MEDIA HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
The application of the direct valuation method attempts to isolate the income that is properly attributable to the ~~license~~indefinite-lived intangible asset alone (that is, apart from tangible and identified intangible assets and goodwill). It is based upon modeling a hypothetical “greenfield” ~~build up~~build-up to a “normalized” enterprise that, by design, lacks inherent goodwill and whose only other assets have essentially been paid for (or added) as part of the build-up process. The Company ~~forecasted~~forecasts revenue, expenses, and cash flows over a ten-year period for each of its markets in its application of the direct valuation method. The Company also ~~calculated~~calculates a “normalized” residual year which represents the perpetual cash flows of each market. The residual year cash flow was capitalized to arrive at the terminal value of the licenses in each market.
Under the direct valuation method, it is assumed that rather than acquiring indefinite-lived intangible assets as part of a going concern business, the buyer hypothetically develops indefinite-lived intangible assets and builds a new operation with similar attributes from scratch. Thus, the buyer incurs start-up costs during the build-up phase which are normally associated with going concern value. Initial capital costs are deducted from the discounted cash flow model which results in value that is directly attributable to the indefinite-lived intangible assets.
The key assumptions using the direct valuation method are market revenue growth rates, market share, profit margin, duration and profile of the build-up period, estimated start-up capital costs and losses incurred during the build-up period, the risk-adjusted discount rate and terminal values. This data is populated using industry
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normalized information representing an average FCC license or billboard permit within a market.
~~Management uses publicly available information from BIA regarding the future revenue expectations for the radio broadcasting industry.~~
~~The build-up period represents the time it takes for the hypothetical start-up operation~~
Annual Impairment Test to ~~reach normalized operations in terms of achieving a mature market share~~FCC Licenses and profit margin. Management believes that a three-year build-up period is required for a start-up operation to obtain the necessary infrastructure and obtain advertisers. It is estimated that a start-up operation would gradually obtain a mature market revenue share in three years. BIA forecasted industry revenue growth of 1.9% and negative 1.8%, respectively, during the build-up period used in the December 31, 2008 and June 30, 2009 impairment tests. The cost structure is expected to reach the normalized level over three years due to the time required to establish operations and recognize the synergies and cost savings associated with the ownership of the FCC licenses within the market.
The estimated operating margin in the first year of operations was assumed to be 12.5% based on observable market data for an independent start-up radio station for both the December 31, 2008 and June 30, 2009 impairment tests. The estimated operating margin in the second year of operations was assumed to be the mid-point of the first-year operating margin and the normalized operating margin. The normalized operating margin in the third year was assumed to be the industry average margin of 30% and 29%, respectively, based on an analysis of comparable companies for the December 31, 2008 and June 30, 2009 impairment tests. The first and second-year expenses include the non-operating start-up costs necessary to build the operation (i.e. development of customers, workforce, etc.).
In addition to cash flows during the projection period, a “normalized” residual cash flow was calculated based upon industry-average growth of 2% beyond the discrete build-up projection period for both the December 31, 2008 and June 30, 2009 impairment tests. The residual cash flow was then capitalized to arrive at the terminal value.
The present value of the cash flows is calculated using an estimated required rate of return based upon industry-average market conditions. In determining the estimated required rate of return, management calculated a discount rate using both current and historical trends in the industry.
Billboard Permits
The Company ~~calculated the discount rate as~~performs its annual impairment test on October 1 of ~~the valuation date and also one-year, two-year, and three-year historical quarterly averages.~~ each year.
The discount rate was calculated by weighting the required returns on interest-bearing debt and common equity capital in proportion to their estimated percentages in an expected capital structure. The capital structure was estimated based on the quarterly average of data for publicly traded companies in the radio broadcasting industry.
The calculation of the discount rate required the rate of return on debt, which was based on a review of the credit ratings for comparable companies (i.e. market participants). The Company calculated the average yield on a Standard & Poor’s “B” and “CCC” rated corporate bond which was used for the pre-tax rate of return on debt and tax-effected such yield based on applicable tax rates.
The rate of return on equity capital was estimated using a modified Capital Asset Pricing Model (“CAPM”). Inputs to this model included the yield on long-term U.S. Treasury Bonds, forecast betas for comparable companies, calculation of a market risk premium based on research and empirical evidence and calculation of a size premium derived from historical differences in returns between small companies and large companies using data published by Ibbotson Associates.
The concluded discount rate used in the discounted cash flow models to determine the fair value of the licenses was 10% for the 13 largest markets and 10.5% for all other markets in both the December 31, 2008 and June 30, 2009 impairment models. Applying the discount rate, the present value of cash flows during the discrete projection period and terminal value were added to estimate the fair value of the hypothetical start-up operation. The initial capital investment was subtracted to arrive at the value of the licenses. The initial capital investment represents the fixed assets needed to operate the radio station.
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The discount rate used in the December 31, 2008 impairment model increased 150 basis points compared to the discount rate used in the preliminary purchase price allocation as of July 30, 2008 which resulted in a decline in the fair value of the Company’s licenses. As a result, the Company recognized a non-cash impairment charge in approximately one-quarter of its markets, which totaled $936.2 million. Theaggregate fair value of the Company’s FCC licenses ~~was $3.0 billion~~on October 1, 2011 and 2010 increased approximately 10% and 14% from the fair value at ~~December 31, 2008.~~
October 1, 2010 and 2009, respectively. The increase in fair value for both years resulted primarily from improvements to general market conditions leading to increased advertising spending, which results in higher revenues for the industry. The aggregate fair value of the Company’s permits on October 1, 2011 and 2010 increased approximately 12% and 58% from the fair value at October 1, 2010 and 2009, respectively. The increase in fair value resulted primarily from improvements to general market conditions leading to increased advertising spending and results in higher revenues for the industry.
During 2011, the Company recognized a $6.5 million impairment charge related to billboard permits in one market due to significant declines in permit value resulting from flat revenues, a slight decline in margin and increased capital expenditures within the market. During 2010, although the aggregate fair values of FCC licenses and billboard permits increased, certain markets experienced continuing declines. As a result, impairment charges were recorded in 2010 for FCC licenses and billboard permits of $0.5 million and $4.8 million, respectively.
Interim Impairment to FCC Licenses
The Company performed an interim impairment test on its FCC licenses as of June 30, 2009 as a result of the poor economic environment during the period. In determining the fair value of the Company’s FCC licenses, the following key assumptions were used:
§ Industry revenue forecast by BIA Financial Network, Inc. (“BIA”) of 1.8% were used during the three year build-up period;
§ Operating margin of 12.5% in the first year gradually climbs to the industry average margin in year three of 29%;
§ 2% revenue growth was assumed beyond the discrete build-up projection; and
§ Assumed discount rates of 10% for the 13 largest markets and 10.5% for all other markets.
The BIA forecast for 2009 declined 8.7% and declined between 13.8% and 15.7% through 2013 compared to the BIA forecasts used in the 2008 impairment test. Additionally, the industry profit margin declined 100 basis points from the 2008 impairment test. These market driven changes were primarily responsible for the decline in fair value of the FCC licenses below their carrying value. As a result, the Company recognized a non-cash impairment charge at June 30, 2009 in approximately one-quarter of its markets, which totaled $590.3 million. ~~The fair value of the Company’s FCC licenses was $2.4 billion at June 30, 2009.~~
In calculating the fair value of its FCC licenses, the Company primarily relied on the discounted cash flow models. However, the Company relied on the stick method for those markets where the discounted cash flow model resulted in a value less than the stick method indicated.
To estimate the stick values for its markets, the Company obtained historical radio station transaction data from BIA which involved sales of individual radio stations whereby the station format was immediately abandoned after acquisition. These transactions are highly indicative of stick transactions in which the buyer does not assign value to any of the other acquired assets (i.e. tangible or intangible assets) and is only purchasing the FCC license.
In addition, the Company analyzed publicly available FCC license auction data involving radio broadcast licenses. Periodically, the FCC will hold an auction for certain FCC licenses in various markets and these auction prices reflect the purchase of only the FCC radio license.
Based on this analysis, the stick values were estimated to be the minimum value of a radio license within each market. This value was considered to be the fair value of the license for those markets where the present value of the cash flows and terminal value did not exceed the estimated stick value. Approximately ~~17% and~~ 23% of the fair value of the Company’s FCC licenses at ~~December 31, 2008 and~~ June 30, 2009 ~~respectively,~~ was determined using the stick method.
~~Annual Impairment Test to FCC Licenses~~
The Company performs its annual impairment test on October 1 of each year. The Company engaged Mesirow Financial, a third-party valuation firm, to assist it in the development of the assumptions and the Company’s determination of the fair value of its FCC licenses. The aggregate fair value of the Company’s FCC licenses on October 1, 2009 increased approximately 11% from the fair value at June 30, 2009. The increase in fair value resulted primarily from an increase of $120.4 million related to improved revenue forecasts and an increase of $195.9 million related to a decline in the discount rate of 50 basis points. The Company calculated the discount rate as of the valuation date and also one-year, two-year, and three-year historical quarterly averages. The discount rate was calculated by weighting the required returns on interest-bearing debt and common equity capital in proportion to their estimated percentages in an expected capital structure. The capital structure was estimated based on the quarterly average of data for publicly traded companies in the radio broadcasting industry. These market driven changes were responsible for the decline in the calculated discount rate.
As a result of the increase in the fair value of the Company’s FCC licenses, no impairment was recorded at October 1, 2009. The fair value of the Company’s FCC licenses at October 1, 2009 was approximately $2.7 billion.
~~100~~
CC MEDIA HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Interim ~~Impairments~~Impairment to Billboard Permits
The Company’s billboard permits are effectively issued in perpetuity by state and local governments as they are transferable or renewable at little or no cost. Permits typically include the location which permits the Company to operate an advertising structure. Due to significant differences in both business practices and regulations, billboards in the International segment are subject to long-term, finite contracts unlike the Company’s permits in the United States and Canada. Accordingly, there are no indefinite-lived assets in the International segment.
The United States and global economies have undergone a period of economic uncertainty, which caused, among other things, a general tightening in the credit markets, limited access to the credit markets, lower levels of liquidity and lower consumer and business spending. These disruptions in the credit and financial markets and the impact of adverse economic, financial and industry conditions on the demand for advertising negatively impacted the key assumptions used in the discounted cash flow models used to value the Company’s billboard permits since the merger. Therefore, the Company performed an interim impairment test on its billboard permits as ~~of December 31, 2008, which resulted in a non-cash impairment charge of $722.6 million.~~
The Company’s cash flows during the first six months of 2009 were below those in the discounted cash flow model used to calculate the impairment at December 31, 2008. As a result, the Company performed an interim impairment test as of June 30, 2009 ~~on its billboard permits resulting in~~as a ~~non-cash impairment charge~~result of ~~$345.4 million.~~
~~The impairment test consisted of a comparison of~~the poor economic environment during the period. In determining the fair value of the Company’s billboard permits, at the market level with their carrying amount. If the carrying amount of the billboard permits exceeded their fair value, an impairment loss was recognized equal to that excess. After an impairment loss is recognized, the adjusted carrying amount of the billboard permit is its new accounting basis. The fair value of the billboard permits was determined using the direct valuation method as prescribed in ASC 805-20-S99. Under the direct valuation method, the fair value of the billboard permits was calculated at the market level as prescribed by ASC 350-30-35.~~The Company engaged Mesirow Financial to assist it in the development of the assumptions and the Company’s determination of the fair value of the billboard permits.~~
~~The Company’s application of the direct valuation method utilized the “greenfield” approach as discussed above. The~~following key assumptions using the direct valuation method are market revenue growth rates, market share, profit margin, duration and profile of the build-up period, estimated start-up capital costs and losses incurred during the build-up period, the risk-adjusted discount rate and terminal values. This data is populated using industry normalized information representing an average billboard permit within a market.
Management uses its internal forecasts to estimate industry normalized information as it believes these forecasts are similar to what a market participant would expect to generate. This is due to the pricing structure and demand for outdoor signage in a market being relatively constant regardless of the owner of the operation. Management also relied on its internal forecasts because there is little public data available for each of its markets.
The build-up period represents the time it takes for the hypothetical start-up operation to reach normalized operations in terms of achieving a mature market revenue share and profit margin. Management believes that a one-year build-up period is required for a start-up operation to erect the necessary structures and obtain advertisers in order achieve mature market revenue share. It is estimated that a start-up operation would be able to obtain 10% of the potential revenues in the first year of operations and 100% in the second year. Management assumed industry revenue growth of negative 9% and negative 16%, respectively, during the build-up period used in the December 31, 2008 and June 30, 2009 interim impairment tests. However, the cost structure is expected to reach the normalized level over three years due to the time required to recognize the synergies and cost savings associated with the ownership of the permits within the market.
For the normalized operating margin in the third year, management assumed a hypothetical business would operate at the lower of the operating margin for the specific market or the industry average margin of approximately 46% and 45% based on an analysis of comparable companies in the December 31, 2008 and June 30, 2009 impairment models, respectively. For the first and second-year of operations, the operating margin was assumed to be 50% of the “normalized” operating margin for both the December 31, 2008 and June 30, 2009 impairment models. The first and second-year expenses include the non-recurring start-up costs necessary to build the operation (i.e. development of customers, workforce, etc.).
In addition to cash flows during the projection period, a “normalized” residual cash flow was calculated based upon industry-average growth of 3% beyond the discrete build-up projection period in both the December 31, 2008 and June 30, 2009 impairment models. The residual cash flow was then capitalized to arrive at the terminal value.
~~101~~
were used:
§ Industry revenue growth of negative 16% during the one year build-up period;
§ Cost structure reached a normalized level over a three year period and the operating margins gradually grew over that period to the industry average margins of 45%. The margin in year three was the lower of the industry average margin or the actual margin for the market;
§ Industry average revenue growth of 3% beyond the discrete build-up projection; and
§ A discount rate of 10%.
The present value of the cash flows is calculated using an estimated required rate of return based upon industry-average market conditions. In determining the estimated required rate of return, management calculated a discount rate using both current and historical trends in the industry.
The Company calculated the discount rate as of the valuation date and also one-year, two-year, and three-year historical quarterly averages. The discount rate was calculated by weighting the required returns on interest-bearing debt and common equity capital in proportion to their estimated percentages in an expected capital structure. The capital structure was estimated based on the quarterly average of data for publicly traded companies in the outdoor advertising industry.
The calculation of the discount rate required the rate of return on debt, which was based on a review of the credit ratings for comparable companies (i.e. market participants). Management used the yield on a Standard & Poor’s “B” rated corporate bond for the pre-tax rate of return on debt and tax-effected such yield based on applicable tax rates.
The rate of return on equity capital was estimated using a modified CAPM. Inputs to this model included the yield on long-term U.S. Treasury Bonds, forecast betas for comparable companies, calculation of a market risk premium based on research and empirical evidence and calculation of a size premium derived from historical differences in returns between small companies and large companies using data published by Ibbotson Associates.
The concluded discount rate used in the discounted cash flow models to determine the fair value of the permits was 9.5% at December 31, 2008 and 10% at June 30, 2009. Applying the discount rate, the present value of cash flows during the discrete projection period and terminal value were added to estimate the fair value of the hypothetical start-up operation. The initial capital investment was subtracted to arrive at the value of the permits. The initial capital investment represents the expenditures required to erect the necessary advertising structures.
The discount rate used in the December 31, 2008 impairment model increased approximately 100 basis points over the discount rate used to value the permits in the preliminary purchase price allocation as of July 30, 2008. Industry revenue forecasts declined 10% through 2013 compared to the forecasts used in the preliminary purchase price allocation as of July 30, 2008. These market driven changes were primarily responsible for the decline in fair value of the billboard permits below their carrying value. As a result, the Company recognized a non-cash impairment charge which totaled $722.6 million. The fair value of the permits was $1.5 billion at December 31, 2008.
The discount rate used in the June 30, 2009 impairment model increased approximately 50 basis points over the discount rate used to value the permits at December 31, 2008. Industry revenue forecasts declined 8% through 2013 compared to the forecasts used in the 2008 impairment test. These market driven changes were primarily responsible for the decline in fair value of the billboard permits below their carrying value. As a result, the Company recognized a non-cash impairment charge at June 30, 2009 in all but five of its markets in the United States and Canada, which totaled $345.4 million. ~~The fair value of the permits was $1.1 billion at June 30, 2009.~~
Annual Impairment Test to ~~Billboard Permits~~Goodwill
The Company performs its annual impairment test on October 1 of each year. Each of the Company’s U.S. radio markets and outdoor advertising markets are components. The U.S. radio markets are aggregated into a single reporting unit and the U.S. outdoor advertising markets are aggregated into a single reporting unit for purposes of the goodwill impairment test using the guidance in ASC 350-20-55. The Company ~~engaged Mesirow Financial to assist it~~also determined that within its Americas outdoor segment, Canada, Mexico, Peru, and Brazil constitute separate reporting units and each country in its International outdoor segment constitutes a separate reporting unit.
Beginning with its annual impairment testing in the ~~development~~fourth quarter of 2011, the ~~assumptions and~~Company utilized the ~~Company’s determination of~~option to assess qualitative factors under ASC 350-20-35 to determine whether it was more likely than not that the fair value of the billboard permits. The aggregate fair value of the Company’s permits on October 1, 2009 increased approximately 8% from the fair value at June 30, 2009. The increase in fair value resulted primarily from an increase of $57.7 million related to improved industry revenue forecasts. The discount rate was unchanged from the June 30, 2009 interim impairment analysis. The Company calculated the discount rate as of the valuation date and also one-year, two-year, and three-year historical quarterly averages. The discount rate was calculated by weighting the required returns on interest-bearing debt and common equity capital in proportion to their estimated percentages in an expected capital structure. The capital structure was estimated based on the quarterly average of data for publicly traded companies in the outdoor advertising industry.
~~The fair value of the Company’s permits at October 1, 2009 was approximately $1.2 billion.~~
~~102~~
~~Interim Impairments to Goodwill~~
The Company tests goodwill at interim dates if events or changes in circumstances indicate that goodwill might be impaired. The United States and global economies have undergone a period of economic uncertainty, which caused, among other things, a general tightening in the credit markets, limited access to the credit markets, lower levels of liquidity and lower consumer and business spending. These disruptions in the credit and financial markets and the impact of adverse economic, financial and industry conditions on the demand for advertising negatively impacted the key assumptions used in the discounted cash flow model used to value the Company’s reporting units since the merger. Therefore, the Company performed an interim impairment test resulting in a non-cash impairment charge of $3.6 billion as of December 31, 2008.
The Company’s cash flows during the first six months of 2009 were below those used in the discounted cash flow model used to calculate the impairment at December 31, 2008. Additionally, the fair value of the Company’s debt and equity at June 30, 2009 was below the carrying amount of its reporting units ~~at June 30, 2009. As~~was less than their carrying amounts, including goodwill. Based on a ~~result of these indicators,~~qualitative assessment, the Company ~~performed an interim~~concluded that no further testing of goodwill for impairment ~~test as~~was required for its CCME reporting unit and for all of ~~June 30, 2009 resulting~~the reporting units within its Americas outdoor segment, with the exception of one country, for which further testing was required. Further testing was also required for three of the countries within its International outdoor segment.
If further testing of goodwill for impairment is required after assessing qualitative factors, the Company follows the two-step impairment testing approach in ~~a non-cash impairment charge of $3.1 billion.~~
~~The goodwill impairment test is a two-step process.~~accordance with ASC 350-20-35. The first step, used to screen for potential impairment, compares the fair value of the reporting unit with its carrying amount, including goodwill. If applicable, the second step, used to measure the amount of the impairment loss, compares the implied fair value of the reporting unit goodwill with the carrying amount of that goodwill.
Each of the Company’s reporting units is valued using a discounted cash flow model which requires estimating future cash flows expected to be generated from the reporting unit, discounted to their present value using a risk-adjusted discount rate. Terminal values were also estimated and discounted to their present value. Assessing the recoverability of goodwill requires the Company to make estimates and assumptions about sales, operating margins, growth rates and discount rates based on its budgets, business plans, economic projections, anticipated future cash flows and marketplace data. There are inherent uncertainties related to these factors and management’s judgment in applying these factors. ~~The Company engaged Mesirow Financial to assist~~
For the year ended December 31, 2011, the Company ~~in the development~~recognized a non-cash impairment charge to goodwill of ~~these assumptions and the Company’s determination of~~$1.1 million due to a decline in the fair value of ~~its~~one country within the Company’s International outdoor segment.
The fair value of the Company’s reporting ~~units.~~
units on October 1, 2010 increased from the fair value at October 1, 2009. The increase in the fair value of the Company’s CCME reporting unit was primarily the result of a 50 basis point decline in the discount rate and a $210.0 million increase related to industry projections. The increase in the fair value of the Company’s Americas outdoor reporting unit was primarily the result of a $638.6 million increase related to forecast revenues and operating margins. As a result of increase in fair value across the CCME and Americas outdoor reporting units, no goodwill impairments were recognized in these segments. Within the Company’s International outdoor segment, one country experienced a decline in fair value which resulted in a $2.1 million non-cash impairment to goodwill recorded for the year ended December 31, 2010.
CC MEDIA HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
The following table presents the changes in the carrying amount of goodwill in each of the Company’s reportable segments. The provisions of ASC 350-20-50-1 require the disclosure of cumulative impairment. As a result of the merger, a new basis in goodwill was recorded in accordance with ASC 805-10. All impairments shown in the table below have been recorded subsequent to the merger and, therefore, do not include any pre-merger impairment.

(In thousands) Americas International
Pre-Merger Radio Outdoor Outdoor Other Total
Balance as of December 31, 2007 $ 6,045,527 $ 688,336 $ 474,253 $ 2,000 $ 7,210,116
Acquisitions 7,051 — 12,341 — 19,392
Dispositions (20,931 ) — — — (20,931 )
Foreign currency — (293 ) 28,596 — 28,303
Adjustments (423 ) (970 ) — — (1,393 )

Balance as of July 30, 2008 $ 6,031,224 $ 687,073 $ 515,190 $ 2,000 $ 7,235,487

~~103~~
$0,000,000 $0,000,000 $0,000,000 $0,000,000 $0,000,000
(In thousands)
CCME

Americas
Outdoor
Advertising

International
Outdoor
Advertising

Other

Consolidated

Balance as of December 31, 2009
   $ 3,146,869    $ 585,249    $ 276,343    $ 116,544       $ 4,125,005
Impairment
   —    —    (2,142 ) —       (2,142 )
Acquisitions
   —    —    —    342       342
Dispositions
   (5,325 ) —    —    —       (5,325 )
Foreign currency
   —    285    3,299    —       3,584
Other
   (1,346 ) —    (792 ) —       (2,138 )




Balance as of December 31, 2010
   $ 3,140,198    $ 585,534    $ 276,708    $ 116,886       $ 4,119,326
Impairment
   —    —    (1,146 ) —       (1,146 )
Acquisitions
   82,844    —    2,995    212       86,051
Dispositions
   (10,542 ) —    —    —       (10,542 )
Foreign currency
   —    (670 ) (6,228 ) —       (6,898 )
Other
   (73 ) —    —    —       (73 )




Balance as of December 31, 2011
   $ 3,212,427    $ 584,864    $ 272,329    $ 117,098       $ 4,186,718




(In thousands) Americas International
Post-Merger Radio Outdoor Outdoor Other Total
Balance as of July 31, 2008 $ — $ — $ — $ — $ —
Preliminary purchase price allocation 6,335,220 2,805,780 603,712 60,115 9,804,827
Purchase price adjustments — net 356,040 438,025 (76,116 ) 271,175 989,124
Impairment (1,115,033 ) (2,321,602 ) (173,435 ) — (3,610,070 )
Acquisitions 3,486 — — — 3,486
Foreign exchange — (29,605 ) (63,519 ) — (93,124 )
Other (523 ) — (3,099 ) — (3,622 )

Balance as of December 31, 2008 5,579,190 892,598 287,543 331,290 7,090,621
Impairment (2,420,897 ) (390,374 ) (73,764 ) (211,988 ) (3,097,023 )
Acquisitions 4,518 2,250 110 — 6,878
Dispositions (62,410 ) — — (2,276 ) (64,686 )
Foreign currency — 16,293 17,412 — 33,705
Purchase price adjustments — net 47,086 68,896 45,042 (482 ) 160,542
Other (618 ) (4,414 ) — — (5,032 )

Balance as of December 31, 2009 $ 3,146,869 $ 585,249 $ 276,343 $ 116,544 $ 4,125,005

~~Each~~The balance at December 31, 2009 is net of cumulative impairments of $3.5 billion, $2.7 billion, $247.2 million and $212.0 million in the Company’s U.S. radio markets and outdoor advertising markets are components. The U.S. radio markets are aggregated into a single reporting unit and the U.S. outdoor advertising markets are aggregated into a single reporting unit for purposes of the goodwill impairment test using the guidance in ASC 350-20-55. The Company also determined that within itsCCME, Americas outdoor, ~~segment, Canada, Mexico, Peru, and Brazil constitute separate reporting units and each country in its~~ International outdoor ~~segment constitutes a separate reporting unit.~~
and Other segments, respectively.
Interim Impairment Test to Goodwill
The discounted cash flow model indicated that the Company failed the first step of the impairment test for certain of its reporting units as of ~~December 31, 2008 and~~ June 30, 2009, which required it to compare the implied fair value of each reporting unit’s goodwill with its carrying value.
The discounted cash flow approach the Company uses for valuing its reporting units involves estimating future cash flows expected to be generated from the related assets, discounted to their present value using a risk-adjusted discount rate. Terminal values are also estimated and discounted to their present value.
~~The Company forecasted revenue, expenses, and cash flows over a ten-year period for each~~
As of its reporting units. In projecting future cash flows, the Company considers a variety of factors including its historical growth rates, macroeconomic conditions, advertising sector and industry trends as well as Company-specific information. Historically, revenues in its industries have been highly correlated to economic cycles. Based on these considerations, the assumed 2008 and 2009 revenue growth rates used in the December 31, 2008 and June 30, 2009, ~~impairment models were negative followed by assumed revenue growth with an anticipated economic recovery in 2009 and 2010, respectively. To arrive at~~ the projected cash flows and resulting growth rates, the Company evaluated its historical operating results, current management initiatives and both historical and anticipated industry results to assess the reasonableness of the operating margin assumptions. The Company also calculated a “normalized” residual year which represents the perpetual cash flows of each reporting unit. The residual year cash flow was capitalized to arrive at the terminal value of the reporting unit.
~~The~~ Company calculated the weighted average cost of capital (“WACC”) as of December 31, 2008 and June 30, 2009 and also one-year, two-year, and three-year historical quarterly averages for each of its reporting units. WACC is an overall rate based upon the individual rates of return for invested capital (equity and interest-bearing debt). The WACC is calculated by weighting the required returns on interest-bearing debt and common equity capital in proportion to their estimated percentages in an expected capital structure. The capital structure was estimated based on the quarterly average data for publicly traded companies in the radio and outdoor advertising industry. The calculation of the WACC considered both current industry WACCs and historical trends in the industry.
~~104~~
The calculation of the WACC requires the rate of return on debt, which was based on a review of the credit ratings for comparable companies (i.e. market participants) and the indicated yield on similarly rated bonds.
The rate of return on equity capital was estimated using a modified CAPM. Inputs to this model included the yield on long-term U.S. Treasury Bonds, forecast betas for comparable companies, calculation of a market risk premium based on research and empirical evidence and calculation of a size premium derived from historical differences in returns between small companies and large companies using data published by Ibbotson Associates.
In line with advertising industry trends, the Company’s operations and expected cash flow are subject to significant uncertainties about future developments, including timing and severity of the recessionary trends and customers’ behaviors. To address these risks, the Company included company-specific risk premiums for each of the reporting units in the estimated WACC. Based on this analysis, as of December 31, 2008, company-specific risk premiums of 100 basis points, 300 basis points and 300 basis points were included for the Radio, Americas outdoor and International outdoor segments, respectively, resulting in WACCs of 11%, 12.5% and 12.5% for each of the reporting units in the Radio, Americas outdoor and International outdoor segments, respectively. As of June 30, 2009, company-specific risk premiums of 100 basis points, 250 basis points and 350 basis points were included for the Radio, Americas outdoor and International outdoor segments, respectively, resulting in WACCs of 11%, 12.5% and 13.5% for each of the reporting units in the ~~Radio,~~CCME, Americas outdoor and International outdoor segments, respectively. ~~Applying these WACCs, the present value of cash flows during the discrete projection period and terminal value were added to estimate the fair value of the reporting units.~~
The discount rate utilized in the valuation of the FCC licenses and outdoor permits as of December 31, 2008 and June 30, 2009 excludes the company-specific risk premiums that were added to the industry WACCs used in the valuation of the reporting units. Management believes the exclusion of this premium is appropriate given the difference between the nature of the licenses and billboard permits and reporting unit cash flow projections. The cash flow projections utilized under the direct valuation method for the licenses and permits are derived from utilizing industry “normalized” information for the existing portfolio of licenses and permits. Given that the underlying cash flow projections are based on industry normalized information, application of an industry average discount rate is appropriate. Conversely, the cash flow projections for the overall reporting unit are based on internal forecasts for each business and incorporate future growth and initiatives unrelated to the existing license and permit portfolio. Additionally, the projections for the reporting unit include cash flows related to non-FCC license and non-permit based assets. In the valuation of the reporting unit, the company-specific risk premiums were added to the industry WACCs due to the risks inherent in achieving the projected cash flows of the reporting unit.
The Company also utilized the market approach to provide a test of reasonableness to the results of the discounted cash flow model. The market approach indicates the fair value of the invested capital of a business based on a company’s market capitalization (if publicly traded) and a comparison of the business to comparable publicly traded companies and transactions in its industry. This approach can be estimated through the quoted market price method, the market comparable method, and the market transaction method.
One indication of the fair value of a business is the quoted market price in active markets for the debt and equity of the business. The quoted market price of equity multiplied by the number of shares outstanding yields the fair value of the equity of a business on a marketable, noncontrolling basis. A premium for control is then applied and added to the estimated fair value of interest-bearing debt to indicate the fair value of the invested capital of the business on a marketable, controlling basis.
The market comparable method provides an indication of the fair value of the invested capital of a business by comparing it to publicly traded companies in similar lines of business. The conditions and prospects of companies in similar lines of business depend on common factors such as overall demand for their products and services. An analysis of the market multiples of companies engaged in similar lines of business yields insight into investor perceptions and, therefore, the value of the subject business. These multiples are then applied to the operating results of the subject business to estimate the fair value of the invested capital on a marketable, noncontrolling basis. The Company then applies a premium for control to indicate the fair value of the business on a marketable, controlling basis.
~~105~~
The market transaction method estimates the fair value of the invested capital of a business based on exchange prices in actual transactions and on asking prices for controlling interests in similar companies recently offered for sale. This process involves comparison and correlation of the subject business with other similar companies that have recently been purchased. Considerations such as location, time of sale, physical characteristics, and conditions of sale are analyzed for comparable businesses.
The three variations of the market approach indicated that the fair value determined by the Company’s discounted cash flow model was within a reasonable range of ~~outcomes as~~outcomes.
The Company forecasted revenue, expenses, and cash flows over a ten-year period for each of ~~December 31, 2008 and June 30, 2009.~~
The revenue forecasts for 2009 declined 18%, 21% and 29% for Radio, Americas outdoor and International outdoor, respectively, compared to the forecasts used in the July 30, 2008 preliminary purchase price allocation primarily as a result of the revenues realized for the year ended December 31, 2008. These market driven changes were primarily responsible for the decline in fair value of theits reporting ~~units below their carrying value. As a result, the Company recognized a non-cash impairment charge to reduce its goodwill of $3.6 billion at December 31, 2008.~~
units. The revenue forecasts for 2009 declined 8%, 7% and 9% for ~~Radio,~~CCME, Americas outdoor and International outdoor, respectively, compared to the forecasts used in the 2008 impairment test primarily as a result of the revenues realized during the first six months of 2009. These market driven changes were primarily responsible for the decline in fair value of the reporting units below their carrying value. As a result, the Company recognized a non-cash impairment charge to reduce its goodwill of $3.1 billion at June 30, 2009.
~~Annual Impairment Test to Goodwill~~
The Company performs its annual impairment test on October 1 of each year. The Company engaged Mesirow Financial to assist the Company in the development of these assumptions and the Company’s determination of the fair value of its reporting units. The fair value of the Company’s reporting units on October 1, 2009 increased from the fair value at June 30, 2009. The increase in fair value of the radio reporting unit was primarily the result of a 50 basis point decline in the WACC as well as a 130 basis point increase in the long-term operating margin. The increase in fair value of the Americas reporting unit was primarily the result of a 150 basis point decline in the WACC. Application of the market approach described above supported lowering the company-specific risk premium used in the discounted cash flow model to fair value the Americas reporting unit. The increase in the aggregate fair value of the reporting units in the Company’s International outdoor segment was primarily the result of an improvement in the long-term revenue forecasts. As discussed in Note B, a certain reporting unit in the International outdoor segment recognized a $41.4 million impairment to goodwill related to the fair value adjustments of certain noncontrolling interests recorded in the merger pursuant to ASC 480-10-S99.

CC MEDIA HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE E3 – INVESTMENTS
The Company’s most significant investments in nonconsolidated affiliates are listed below:

Australian Radio Network
The Company owns a fifty-percent (50%) interest in Australian Radio Network (“ARN”), an Australian company that owns and operates radio stations in Australia and New Zealand.
~~Grupo ACIR Comunicaciones~~
Clear Channel sold a portion of its investment in Grupo ACIR for approximately $47.0 million on July 1, 2008 and recorded a gain of $9.2 million in “equity in earnings of nonconsolidated affiliates” during the pre-merger period ended July 30, 2008. Effective January 30, 2009 the Company sold 57% of its remaining 20% interest in Grupo ACIR. The Company sold the remainder of its interest on July 28, 2009.

Summarized Financial Information
The following table summarizes the Company’s investments in nonconsolidated affiliates:
~~106~~
$000,00000 $000,00000 $000,00000
(In thousands)        ARN        All
    Others             Total
Balance at December 31, 2009
     $ 320,778            $ 24,571             $ 345,349
Reclass to cost method investments and other
   —            1,574             1,574
Dispositions of investments, net
   —            (987)           (987)
Cash advances
   —          2,556           2,556
Equity in net earnings (loss)
   15,685          (9,983)         5,702
Foreign currency transaction adjustment
   (6,881)         —           (6,881)
Foreign currency translation adjustment
   21,589          (434)         21,155
Distributions received
   (8,386)         (2,331)         (10,717)






Balance at December 31, 2010
     $ 342,785            $ 14,966             $ 357,751
Cash advances (repayments)
   —          (929)         (929)
Dispositions of investments, net
   —          (6,316)         (6,316)
Equity in earnings
   20,958          6,000         26,958
Foreign currency transaction adjustment
   (153)         —           (153)
Foreign currency translation adjustment
   (1,125)         290         (835)
Distributions received
   (15,088)         (1,701)         (16,789)
Other
   —          —           —






Balance at December 31, 2011
     $ 347,377            $ 12,310             $ 359,687






All
(In thousands) ARN Grupo ACIR Others Total
At December 31, 2008 $ 290,808 $ 41,518 $ 51,811 $ 384,137
Reclass to cost method investments and other — (17,469 ) 1,283 (16,186 )
Acquisition (disposition) of investments, net — (19,153 ) (19 ) (19,172 )
Cash advances (repayments) (17,263 ) 3 4,402 (12,858 )
Equity in net earnings (loss) 15,191 (4,372 ) (31,508 ) (20,689 )
Foreign currency transaction adjustment (10,354 ) — — (10,354 )
Foreign currency translation adjustment 42,396 (527 ) 819 42,688
Fair value adjustments — — (2,217 ) (2,217 )

At December 31, 2009 $ 320,778 $ — $ 24,571 $ 345,349

The investments in the table above are not consolidated, but are accounted for under the equity method of accounting, whereby the Company records its investments in these entities in the balance sheet as ~~“Investments in, and advances to, nonconsolidated affiliates.~~“Other assets.” The Company’s interests in their operations are recorded in the statement of operations as “Equity in earnings (loss) of nonconsolidated affiliates”. There were no undistributed earnings for the year ended December 31, 2009. Accumulated undistributed earnings included in retained deficit for these investments were $3.6 million and $133.6 million for the years ended December 31, 2008 and 2007, respectively.
~~Other Investments~~
~~Other investments of $44.7 million and $33.5 million at December 31, 2009 and 2008, respectively, include marketable equity securities and other investments classified as follows:~~

(In thousands) Fair Gross Unrealized Gross Unrealized
Investments Value Losses Gains Cost
2009
Available-for sale $ 38,902 $ (12,237 ) $ 32,035 $ 19,104
Other cost investments 5,783 — — 5,783

Total $ 44,685 $ (12,237 ) $ 32,035 $ 24,887

2008
Available-for sale $ 27,110 $ — $ — $ 27,110
Other cost investments 6,397 — — 6,397

Total $ 33,507 $ — $ — $ 33,507

The Company’s available-for-sale security, Independent News & Media PLC (“INM”), was in an unrealized loss position for an extended period of time in 2008 and 2009. As a result, the Company considered the guidance in ASC 320-10-S99 and reviewed the length of the time and the extent to which the market value was less than cost and the financial condition and near-term prospects of the issuer. After this assessment, the Company concluded that the impairment was other than temporary and recorded a non-cash impairment charge of $11.3 million and $59.8 million in “Gain (loss) on marketable securities” for the year ended December 31, 2009 and 2008, respectively.
In addition, the fair value of the Company’s available-for-sale security, Sirius XM Radio, Inc., was below its cost for an extended period of time in 2008. After considering ASC 320-10-S99 guidance, the Company concluded that the impairment was other than temporary and recorded a non-cash impairment charge of $56.7 million in “Gain (loss) on marketable securities” for the year ended December 31, 2008.
Clear Channel sold its American Tower Corporation securities in the second quarter of 2008 and recorded a gain of $30.4 million on the statement of operations in “Gain (loss) on marketable securities”.
~~107~~
~~Other cost investments include various investments in companies for which there is no readily determinable market value.~~
NOTE ~~F —~~4 – ASSET RETIREMENT OBLIGATION
The Company’s asset retirement obligation is reported in “Other long-term liabilities” with the current portion recorded in “Accrued liabilities” and relates to its obligation to dismantle and remove outdoor advertising displays from leased land and to reclaim the site to its original condition upon the termination or non-renewal of a lease. When the liability is recorded, the cost is capitalized as part of the related long-lived assets’ carrying value. Due to the high rate of lease renewals over a long period of time, the calculation assumes that all related assets will be removed at some period over the next 50 years. An estimate of third-party cost information is used with respect to the dismantling of the structures and the reclamation of the site. The interest rate used to calculate the present value of such costs over the retirement period is based on an estimated risk adjusted credit rate for the same period.
The following table presents the activity related to the Company’s asset retirement obligation:

Post-Merger Post-Merger Pre-Merger
Year ended Period ended Period ended
(In thousands) December 31, 2009 December 31, 2008 July 30, 2008
Beginning balance $ 55,592 $ 59,278 $ 70,497
Adjustment due to change in estimate of related costs (6,721 ) (3,123 ) 1,853
Accretion of liability 5,209 2,233 3,084
Liabilities settled (2,779 ) (2,796 ) (2,558 )

Ending balance $ 51,301 $ 55,592 $ 72,876

~~108~~
(In thousands)    Years Ended December 31,
       2011            2010
Beginning balance
     $ 52,099             $ 51,301
Adjustment due to change in estimate of related costs
   (3,174)         (1,839)
Accretion of liability
   5,001           5,202
Liabilities settled
   (2,631)         (2,565)




Ending balance
     $ 51,295             $ 52,099




CC MEDIA HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE ~~G —~~5 – LONG-TERM DEBT
Long-term debt at December 31, ~~2009~~2011 and ~~2008~~2010 consisted of the following:

December 31, 2009 December 31, 2008
(In thousands) Post-Merger Post-Merger
Senior Secured Credit Facilities:
Term loan A Facility Due 2014⁽¹⁾
$ 1,127,657 $ 1,331,500
Term loan B Facility Due 2016 9,061,911 10,700,000
Term loan C — Asset Sale Facility Due 2016⁽¹⁾
695,879 695,879
Revolving Credit Facility Due 2014 1,812,500 220,000
Delayed Draw Facilities Due 2016 874,432 532,500
Receivables Based Facility Due 2014 355,732 445,609
Other Secured Long-term Debt 5,225 6,604

Total Consolidated Secured Debt 13,933,336 13,932,092

Senior Cash Pay Notes 796,250 980,000
Senior Toggle Notes 915,200 1,330,000
Clear Channel Senior Notes:
4.25% Senior Notes Due 2009 — 500,000
7.65% Senior Notes Due 2010 116,181 133,681
4.5% Senior Notes Due 2010 239,975 250,000
6.25% Senior Notes Due 2011 692,737 722,941
4.4% Senior Notes Due 2011 140,241 223,279
5.0% Senior Notes Due 2012 249,851 275,800
5.75% Senior Notes Due 2013 312,109 475,739
5.5% Senior Notes Due 2014 541,455 750,000
4.9% Senior Notes Due 2015 250,000 250,000
5.5% Senior Notes Due 2016 250,000 250,000
6.875% Senior Debentures Due 2018 175,000 175,000
7.25% Senior Debentures Due 2027 300,000 300,000
Subsidiary Senior Notes:
9.25% Series A Senior Notes Due 2017 500,000 —
9.25% Series B Senior Notes Due 2017 2,000,000 —
Other long-term debt 77,657 69,260
Purchase accounting adjustments and original issue discount (788,087 ) (1,114,172 )

20,701,905 19,503,620
Less: current portion 398,779 562,923

Total long-term debt $ 20,303,126 $ 18,940,697

$00,000,000,00 $00,000,000,00
(In thousands)        As of December 31,
       2011            2010
Senior Secured Credit Facilities:

Term Loan A Facility Due 2014⁽¹⁾
     $ 1,087,090           $ 1,127,657
Term Loan B Facility Due 2016
   8,735,912           9,061,911
Term Loan C - Asset Sale Facility Due 2016⁽¹⁾
   670,845           695,879
Revolving Credit Facility Due 2014
   1,325,550           1,842,500
Delayed Draw Term Loan Facilities Due 2016
   976,776           1,013,227
Receivables Based Facility Due 2014
   —           384,232
Priority Guarantee Notes Due 2021
   1,750,000           —
Other Secured Subsidiary Debt
   30,976           4,692




Total Consolidated Secured Debt
   14,577,149           14,130,098
Senior Cash Pay Notes Due 2016
   796,250           796,250
Senior Toggle Notes Due 2016
   829,831           829,831
Clear Channel Senior Notes:

6.25% Senior Notes Due 2011
   —           692,737
4.4% Senior Notes Due 2011
   —           140,241
5.0% Senior Notes Due 2012
   249,851           249,851
5.75% Senior Notes Due 2013
   312,109           312,109
5.5% Senior Notes Due 2014
   461,455           541,455
4.9% Senior Notes Due 2015
   250,000           250,000
5.5% Senior Notes Due 2016
   250,000           250,000
6.875% Senior Debentures Due 2018
   175,000           175,000
7.25% Senior Debentures Due 2027
   300,000           300,000
Subsidiary Senior Notes:

9.25% Series A Senior Notes Due 2017
   500,000           500,000
9.25% Series B Senior Notes Due 2017
   2,000,000           2,000,000
Other Clear Channel Subsidiary Debt
   19,860           63,115
Purchase accounting adjustments and original issue discount
   (514,336)         (623,335)




   20,207,169           20,607,352
Less: current portion of long-term debt
   268,638           867,735




Total long-term debt
     $ 19,938,531             $ 19,739,617




(1) These facilities are subject to an amortization schedule with the final payment on the Term Loan A and Term Loan C due 2014 and 2016, respectively.
The Company’s weighted average interest rate at December 31, ~~2009~~2011 was ~~6.3%~~6.2%. The aggregate market value of the Company’s debt based on quoted market prices for which quotes were available was approximately ~~$17.7~~$16.2 billion and ~~$17.2~~$18.7 billion at December 31, ~~2009~~2011 and ~~2008,~~2010, respectively.
~~109~~
The Company and its subsidiaries have from time to time repurchased certain debt obligations of Clear Channel and outstanding equity securities of Clear Channel Outdoor Holdings, Inc. (“CCOH”), and may in the future, as part of various financing and investment strategies, ~~it may elect to pursue,~~ purchase additional outstanding indebtedness of Clear Channel or its subsidiaries or the Company’s outstanding equity securities or outstanding equity securities of ~~Clear Channel Outdoor Holdings, Inc.,~~CCOH, in tender offers, open market purchases, privately negotiated transactions or otherwise. The Company or its subsidiaries may also sell certain assets or properties and use the proceeds to reduce its ~~indebtedness or the indebtedness of its subsidiaries.~~indebtedness. These purchases or sales, if any, could have a material positive or negative impact on the Company’s liquidity available to repay outstanding debt obligations or on the Company’s consolidated results of operations. These transactions could also require or result in amendments to the agreements governing outstanding debt
CC MEDIA HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
obligations or changes in the Company’s leverage or other financial ratios, which could have a material positive or negative impact on the Company’s ability to comply with the covenants contained in ~~its~~Clear Channel’s debt agreements. These transactions, if any, will depend on prevailing market conditions, the Company’s liquidity requirements, contractual restrictions and other factors. The amounts involved may be material.

Senior Secured Credit Facilities
As of December 31, 2011, Clear Channel had a total of $12,796 million outstanding under its senior secured credit facilities, consisting of:
a $1,087 million term loan A facility which matures in July 2014;
an $8,736 million term loan B facility which matures in July 2016;
a $670.8 million term loan C—asset sale facility, subject to reduction as described below, which matures in January 2016;
two delayed draw term loan facilities, of which $568.6 million and $408.2 million was drawn as of December 31, 2011, respectively, and which mature in January 2016; and
a $1,928 million revolving credit facility, including a letter of credit sub-facility and a swingline loan sub-facility, of which $1,326 million was drawn as of December 31, 2011, which matures in July 2014.
Clear Channel may raise incremental term loans or incremental commitments under the revolving credit facility of up to (a) $1.5 billion, plus (b) the excess, if any, of (x) 0.65 times pro forma consolidated EBITDA (as calculated in the manner provided in the senior secured credit facilities documentation), over (y) $1.5 billion, plus (c) the aggregate amount of certain principal prepayments made in respect of the term loans under the senior secured credit facilities. Availability of such incremental term loans or revolving credit commitments is subject, among other things, to the absence of any default, pro forma compliance with the financial covenant and the receipt of commitments by existing or additional financial institutions.
Clear Channel is the primary borrower under the senior secured credit facilities, except that certain of its domestic restricted subsidiaries are co-borrowers under a portion of the term loan facilities. Clear Channel also has the ability to designate one or more of its foreign restricted subsidiaries in certain jurisdictions as borrowers under the revolving credit facility, subject to certain conditions and sublimits and have so designated certain subsidiaries in the Netherlands and the United Kingdom.
Interest Rate and Fees
Borrowings under ~~the~~Clear Channel’s senior secured credit facilities bear interest at a rate equal to an applicable margin plus, at Clear Channel’s option, either (i) a base rate determined by reference to the higher of (A) the prime lending rate publicly announced by the administrative agent ~~and~~or (B) the Federal funds effective rate from time to time plus 0.50%, or (ii) a Eurocurrency rate determined by reference to the costs of funds for deposits for the interest period relevant to such borrowing adjusted for certain additional costs.

The margin percentages applicable to the term loan facilities and revolving credit facility are the following percentages per annum:
with respect to loans under the term loan A facility and the revolving credit facility, (i) 2.40% in the case of base rate loans and (ii) 3.40% in the case of Eurocurrency rate loans; and
• with respect to loans under the term loan A facility and the revolving credit facility, (i) 2.40% in the case of base rate loans and (ii) 3.40% in the case of Eurocurrency rate loans, subject to downward adjustments if Clear Channel’s leverage ratio of total debt to EBITDA (as calculated in accordance with the senior secured credit facilities) decreases below 7 to 1; and
• with respect to loans under the term loan B facility, term loan C — asset sale facility and delayed draw term loan facilities, (i) 2.65% in the case of base rate loans and (ii) 3.65% in the case of Eurocurrency rate loans subject to downward adjustments if the Company’s leverage ratio of total debt to EBITDA decreases below 7 to 1.
with respect to loans under the term loan B facility, term loan C - asset sale facility and delayed draw term loan facilities, (i) 2.65%, in the case of base rate loans and (ii) 3.65%, in the case of Eurocurrency rate loans.
The margin percentages are subject to adjustment based upon Clear Channel’s leverage ratio.
Clear Channel is required to pay each revolving credit lender a commitment fee in respect of any unused commitments under the revolving credit facility, which is currently 0.50% per annum, but subject to ~~downward adjustments if~~adjustment based on Clear Channel’s leverage ratio of total debt to EBITDA decreases below 4 to 1. Clear Channel is required to pay each delayed draw term facility lender a commitment fee in respect of any undrawn commitments under the delayed draw term facilities, which initially is 1.825% per annum until theratio. The delayed draw term facilities are fully drawn, ortherefore there are currently no commitment fees associated with any unused commitments ~~thereunder terminated.~~
The senior secured credit facilities include two delayed draw term loan facilities. The first is a $589.8 million facility which may be drawn to purchase or redeem Clear Channel’s outstanding 7.65% senior notes due 2010, of which $451.0 million was drawn as of December 31, 2009, and a $423.4 million facility which was drawn to redeem Clear Channel’s outstanding 4.25% senior notes in May 2009.
thereunder.
Prepayments
The senior secured credit facilities require ~~the Company~~Clear Channel to prepay outstanding term loans, subject to certain exceptions, with:
50% (which percentage may be reduced to 25% and to 0% based upon Clear Channel’s leverage ratio) of Clear Channel’s annual excess cash flow (as calculated in accordance with the senior secured credit facilities), less any voluntary prepayments of term loans and revolving credit loans (to the extent accompanied by a permanent reduction of the commitment) and subject to customary credits;
~~110~~
CC MEDIA HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
100% of the net cash proceeds of sales or other dispositions of specified assets being marketed for sale (including casualty and condemnation events), subject to certain exceptions;
100% (which percentage may be reduced to 75% and 50% based upon Clear Channel’s leverage ratio) of the net cash proceeds of sales or other dispositions by Clear Channel or its wholly-owned restricted subsidiaries of assets other than specified assets being marketed for sale, subject to reinvestment rights and certain other exceptions; and
• 50% (which percentage will be reduced to 25% and to 0% based upon the Company’s leverage ratio) of the Company’s annual excess cash flow (as calculated in accordance with the senior secured credit facilities), less any voluntary prepayments of term loans and revolving credit loans (to the extent accompanied by a permanent reduction of the commitment) and subject to customary credits;
• 100% (which percentage will be reduced to 75% and 50% based upon the Company’s leverage ratio) of the net cash proceeds of sales or other dispositions by the Company or its wholly-owned restricted subsidiaries (including casualty and condemnation events) of assets other than specified assets subject to reinvestment rights and certain other exceptions; and
• ~~100% of the net cash proceeds of any incurrence of certain debt, other than debt permitted under the senior secured credit facilities.~~
100% of the net cash proceeds of (i) any incurrence of certain debt, other than debt permitted under Clear Channel’s senior secured credit facilities. (ii) certain securitization financing and (iii) certain issuances of Permitted Additional Notes (as defined in the senior secured credit facilities).
The foregoing prepayments with the net cash proceeds of certain incurrences of debt and annual excess cash flow will be applied (i) first to the term loans other than the term loan C —- asset sale facility loans (on a pro rata basis) and (ii) second to the term loan C —- asset sale facility loans, in each case to the remaining installments thereof in direct order of maturity. The foregoing prepayments with the net cash proceeds of the sale of assets (including casualty and condemnation events) will be applied (i) first to the term loan C —- asset sale facility loans and (ii) second to the other term loans (on a pro rata basis), in each case to the remaining installments thereof in direct order of maturity.
~~The Company~~
Clear Channel may voluntarily repay outstanding loans under ~~its~~the senior secured credit facilities at any time without premium or penalty, other than customary “breakage” costs with respect to Eurocurrency rate loans.
~~The Company~~
Amortization of Term Loans
Clear Channel is required to repay the loans under ~~its~~the term loan facilities, after giving effect to (1) the December 2009 prepayment of $2.0 billion of term loans with proceeds from the issuance of subsidiary senior notes discussed elsewhere in this Note ~~G, as follows:~~
• ~~the term loan A facility will amortize in quarterly installments commencing on the third interest payment date after the fourth anniversary~~5 and, (2) the February 2011 prepayment of $500.0 million of the closing date of the merger in annual amounts equal to 4.7% of the original funded principal amount of such facility in year four, 10% thereafter, with the balance being payable on the final maturity date (July 2014) of such term loans; and
• ~~the term loan B facility and delayed draw facilities will be payable in full on the final maturity date (January 2016) of such term loans; and~~
• the term loan C facility will amortize in quarterly installments on the first interest payment date after the third anniversary of the closing date of the merger, in annual amounts equal to 2.5% of the original funded principal amount of such facilities in years four and five and 1% thereafter, with the balance being payable on the final maturity date (January 2016) of such term loans.
~~The Company is required to repay all borrowings under the receivables based facility and the~~ revolving credit facility ~~at their final maturity~~and term loans with the proceeds of the February 2011 Offering discussed elsewhere in ~~July 2014.~~
this Note 5, as follows:
(In millions)
    Year
   Tranche A Term
Loan
    Amortization*        Tranche B Term
Loan
    Amortization**        Tranche C Term
Loan
    Amortization**        Delayed Draw 1
Term Loan
    Amortization**        Delayed Draw 2
Term Loan
    Amortization**
2012
   –       –       $ 1.0       –       –
2013
   $ 88.5       –       $ 12.2       –       –
2014
   $ 998.6       –       $ 7.0       –       –
2015
   –       –       $ 3.4       –       –
2016
   –       $ 8,735.9       $ 647.2       $ 568.6       $ 408.2










Total
   $ 1,087.1       $ 8,735.9       $ 670.8       $ 568.6       $ 408.2
*Balance of Tranche A Term Loan is due July 30, 2014
**Balance of Tranche B Term Loan, Tranche C Term Loan, Delayed Draw 1 Term Loan and Delayed Draw 2 Term Loan are due January 29, 2016
Collateral and Guarantees
The senior secured credit facilities are guaranteed by Clear Channel and each of ~~the Company’s~~Clear Channel’s existing and future material wholly-owned domestic restricted subsidiaries, subject to certain exceptions.

All obligations under the senior secured credit facilities, and the guarantees of those obligations, are secured, subject to permitted liens, including prior liens permitted by the indenture governing the Clear Channel senior notes, and other exceptions, by:
a lien on the capital stock of Clear Channel;
• ~~a first-priority lien on the capital stock of Clear Channel;~~
• ~~100% of the capital stock of any future material wholly-owned domestic license subsidiary that is not a “Restricted Subsidiary” under the indenture governing the Clear Channel senior notes;~~
• ~~certain assets that do not constitute “principal property” (as defined in the indenture governing the Clear Channel senior notes);~~
• certain assets that constitute “principal property” (as defined in the indenture governing the Clear Channel senior notes) securing obligations under the senior secured credit facilities up to the maximum amount permitted to be secured by such assets without requiring equal and ratable security under the indenture governing the Clear Channel senior notes; and
• ~~a second-priority lien on the accounts receivable and related assets securing our receivables based credit facility.~~
100% of the capital stock of any future material wholly-owned domestic license subsidiary that is not a “Restricted Subsidiary” under the indenture governing the Clear Channel senior notes;
certain assets that do not constitute “principal property” (as defined in the indenture governing the Clear Channel senior notes);
~~111~~
CC MEDIA HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
certain specified assets of Clear Channel and the guarantors that constitute “principal property” (as defined in the indenture governing the Clear Channel senior notes) securing obligations under the senior secured credit facilities up to the maximum amount permitted to be secured by such assets without requiring equal and ratable security under the indenture governing the Clear Channel senior notes; and
a lien on the accounts receivable and related assets securing Clear Channel’s receivables based credit facility that is junior to the lien securing Clear Channel’s obligations under such credit facility.
The obligations of any foreign subsidiaries that are borrowers under the revolving credit facility ~~will~~are also be guaranteed by certain of their material wholly-owned restricted subsidiaries, and secured by substantially all assets of all such borrowers and guarantors, subject to permitted liens and other exceptions.
Certain Covenants and Events of Default
The senior secured credit facilities contain a financial covenant that requires Clear Channel to comply on a quarterly basis with a maximum consolidated senior secured net debt to ~~adjusted~~consolidated EBITDA ratio (maximum of 9.5:1). This financial covenant becomes more restrictive over time. Clear Channel’s senior secured debt consists of the senior secured facilities, the receivables based credit facility, the priority guarantee notes and certain other secured subsidiary debt. ~~The Company~~Clear Channel was in compliance with this covenant as of December 31, ~~2009.~~
2011.
In addition, the senior secured credit facilities include negative covenants that, subject to significant exceptions, limit ~~the Company’s~~Clear Channel’s ability and the ability of its restricted subsidiaries to, among other things:
incur additional indebtedness;
• ~~incur additional indebtedness;~~
• ~~create liens on assets;~~
• ~~engage in mergers, consolidations, liquidations and dissolutions;~~
• ~~sell assets;~~
• ~~pay dividends and distributions or repurchase its capital stock;~~
• ~~make investments, loans, or advances;~~
• ~~prepay certain junior indebtedness;~~
• ~~engage in certain transactions with affiliates;~~
• ~~amend material agreements governing certain junior indebtedness; and~~
• ~~change its lines of business.~~
create liens on assets;
engage in mergers, consolidations, liquidations and dissolutions;
sell assets;
pay dividends and distributions or repurchase Clear Channel’s capital stock;
make investments, loans, or advances;
prepay certain junior indebtedness;
engage in certain transactions with affiliates;
amend material agreements governing certain junior indebtedness; and
change lines of business.
The senior secured credit facilities include certain customary representations and warranties, affirmative covenants and events of default, including payment defaults, breach of representations and warranties, covenant defaults, cross-defaults to certain indebtedness, certain events of bankruptcy, certain events under ERISA, material judgments, the invalidity of material provisions of the senior secured credit facilities documentation, the failure of collateral under the security documents for the senior secured credit facilities, the failure of the senior secured credit facilities to be senior debt under the subordination provisions of certain of ~~the Company’s~~Clear Channel’s subordinated debt and a change of control. If an event of default occurs, the lenders under the senior secured credit facilities will be entitled to take various actions, including the acceleration of all amounts due under the senior secured credit facilities and all actions permitted to be taken by a secured creditor.

Receivables Based Credit Facility
As of December 31, 2011, Clear Channel had no borrowings outstanding under Clear Channel’s receivables based credit facility. On June 8, 2011, Clear Channel made a voluntary paydown of all amounts outstanding under this facility using cash on hand. Clear Channel’s voluntary paydown did not reduce its commitments under this facility and Clear Channel may reborrow under this facility at any time.
The receivables based credit facility ~~of $783.5 million~~ provides revolving credit ~~commitments in an amount equal to the initial borrowing~~ of ~~$533.5 million on the closing date plus $250~~$625.0 million, subject to a borrowing base. The borrowing base at any time equals 85% of ~~the~~Clear Channel’s and certain of Clear Channel’s subsidiaries’ eligible accounts ~~receivable for certain subsidiaries of the Company.~~receivable. The receivables based credit facility includes a letter of credit sub-facility and a swingline loan sub-facility.
~~Borrowings, excluding~~ The maturity of the ~~initial borrowing,~~receivables based credit facility is July 2014.
All borrowings under the receivables based credit facility are subject to the absence of any default, the accuracy of representations and warranties and compliance with the borrowing base. In addition, borrowings under the receivables based credit facility, excluding the initial borrowing, are subject to compliance with a minimum fixed charge coverage ratio of 1.0:1.0 if at any time excess availability under the receivables based credit facility is less than $50 million, or if aggregate excess availability under the receivables based credit facility and revolving credit facility is less than 10% of the borrowing base.
CC MEDIA HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Clear Channel and certain subsidiary borrowers are the borrowers under the receivables based credit facility. Clear Channel has the ability to designate one or more of its restricted subsidiaries as borrowers under the receivables based credit facility. The receivables based credit facility loans and letters of credit are available in U.S. dollars.
Interest Rate and Fees
Borrowings under the receivables based credit facility bear interest at a rate equal to an applicable margin plus, at Clear Channel’s option, either (i) a base rate determined by reference to the higher of (A) the prime lending rate publicly announced by the administrative agent ~~and~~or (B) the Federal funds effective rate from time to time plus 0.50%, or (ii) a Eurocurrency rate determined by reference to the costs of funds for deposits for the interest period relevant to such borrowing adjusted for certain additional costs.
The margin percentage applicable to the receivables based credit facility ~~which~~ is (i) 1.40%, in the case of base rate loans and (ii) 2.40% in the case of Eurocurrency rate loans subject to ~~downward adjustments~~adjustment if ~~the Company’s~~
~~112~~
Clear Channel’s leverage ratio of total debt to EBITDA decreases below 7 to 1.
Clear Channel is required to pay each lender a commitment fee in respect of any unused commitments under the receivables based credit facility, which is currently 0.375% per annum, subject to ~~downward adjustments if~~adjustment based on Clear Channel’s leverage ~~ratio of total debt to EBITDA decreases below 6 to 1.~~
ratio.
Prepayments
If at any time the sum of the outstanding amounts under the receivables based credit facility (including the letter of credit outstanding amounts and swingline loans thereunder) exceeds the lesser of (i) the borrowing base and (ii) the aggregate commitments under the receivables based credit facility, ~~the Company~~Clear Channel will be required to repay outstanding loans and cash collateralize letters of credit in an aggregate amount equal to such excess.
~~The Company~~
Clear Channel may voluntarily repay outstanding loans under the receivables based credit facility at any time without premium or penalty, other than customary “breakage” costs with respect to Eurocurrency rate loans.
Any voluntary prepayments Clear Channel makes will not reduce its commitments under this facility.
Collateral and Guarantees
The receivables based credit facility is guaranteed by, subject to certain exceptions, the guarantors of the senior secured credit facilities. All obligations under the receivables based credit facility, and the guarantees of those obligations, are secured by a perfected ~~first priority~~ security interest in all of ~~the Company’s~~Clear Channel’s and all of the guarantors’ accounts receivable and related assets and proceeds thereof, that is senior to the security interest of the senior secured credit facilities in such accounts receivable and related assets and proceeds thereof, subject to permitted liens, including prior liens permitted by the indenture governing the Clear Channel senior notes, and certain exceptions.
The receivables based credit facility includes negative covenants, representations, warranties, events of default, ~~conditions precedent~~ and termination provisions substantially similar to those governing ~~our~~the senior secured credit facilities.

Priority Guarantee Notes
As of December 31, 2011, Clear Channel had outstanding $1.75 billion aggregate principal amount of 9.0% Priority Guarantee Notes due 2021.
The Priority Guarantee Notes mature on March 1, 2021 and bear interest at a rate of 9.0% per annum, payable semi-annually in arrears on March 1 and September 1 of each year, beginning on September 1, 2011. The Priority Guarantee Notes are Clear Channel’s senior obligations and are fully and unconditionally guaranteed, jointly and severally, on a senior basis by the guarantors named in the indenture. The Priority Guarantee Notes and the guarantors’ obligations under the guarantees are secured by (i) a lien on (a) the capital stock of Clear Channel and (b) certain property and related assets that do not constitute “principal property” (as defined in the indenture governing certain legacy notes of Clear Channel), in each case equal in priority to the liens securing the obligations under Clear Channel’s senior secured credit facilities, subject to certain exceptions, and (ii) a lien on the accounts receivable and related assets securing Clear Channel’s receivables based credit facility junior in priority to the lien securing Clear Channel’s obligations thereunder, subject to certain exceptions.
CC MEDIA HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Clear Channel may redeem the Priority Guarantee Notes at its option, in whole or part, at any time prior to March 1, 2016, at a price equal to 100% of the principal amount of the Priority Guarantee Notes redeemed, plus accrued and unpaid interest to the redemption date and plus an applicable premium. Clear Channel may redeem the Priority Guarantee Notes, in whole or in part, on or after March 1, 2016, at the redemption prices set forth in the indenture plus accrued and unpaid interest to the redemption date. At any time on or before March 1, 2014, Clear Channel may elect to redeem up to 40% of the aggregate principal amount of the Priority Guarantee Notes at a redemption price equal to 109.0% of the principal amount thereof, plus accrued and unpaid interest to the redemption date, with the net proceeds of one or more equity offerings.
The indenture governing the Priority Guarantee Notes contains covenants that limit Clear Channel’s ability and the ability of its restricted subsidiaries to, among other things: (i) pay dividends, redeem stock or make other distributions or investments; (ii) incur additional debt or issue certain preferred stock; (iii) modify any of Clear Channel’s existing senior notes; (iv) transfer or sell assets; (v) engage in certain transactions with affiliates; (vi) create restrictions on dividends or other payments by the restricted subsidiaries; and (vii) merge, consolidate or sell substantially all of Clear Channel’s assets. The indenture contains covenants that limit Clear Channel Capital I, LLC’s and Clear Channel’s ability and the ability of its restricted subsidiaries to, among other things: (i) create liens on assets and (ii) materially impair the value of the security interests taken with respect to the collateral for the benefit of the notes collateral agent and the holders of the Priority Guarantee Notes. The indenture also provides for customary events of default.
Senior Cash Pay Notes and Senior Toggle Notes
As of December 31, 2011, Clear Channel ~~has~~had outstanding $796.3 million aggregate principal amount of 10.75% senior cash pay notes due 2016 and ~~$915.2~~$829.8 million aggregate principal amount of 11.00%/11.75% senior toggle notes due 2016.
The senior cash pay notes and senior toggle notes are unsecured and are guaranteed by Clear Channel Capital I, LLC and each of Clear Channel’s existing and future material wholly-owned domestic restricted subsidiaries, subject to certain exceptions. The senior toggle notes mature on August 1, 2016 and may require a special redemption of up to $30.0 million on August 1, 2015. ~~The Company~~Clear Channel may elect on each interest election date to pay all or 50% of such interest on the senior toggle notes in cash or by increasing the principal amount of the senior toggle notes or by issuing new senior toggle notes (such increase or issuance, “PIK Interest”). Interest on the senior toggle notes payable in cash will accrue at a rate of 11.00% per annum and PIK Interest will accrue at a rate of 11.75% per annum.
~~The Company~~
Clear Channel may redeem some or all of the senior cash pay notes and senior toggle notes at any time prior to August 1, 2012, at a price equal to 100% of the principal amount of such notes plus accrued and unpaid interest thereon to the redemption date and ~~a “make-whole~~an “applicable premium,” as described in the indenture governing such notes. ~~The Company~~Clear Channel may redeem some or all of the senior cash pay notes and senior toggle notes at any time on or after August 1, 2012 at the redemption prices set forth in the indenture governing such notes. ~~In addition, the Company may redeem up to 40% of any series of the outstanding notes at any time on or prior to August 1, 2011 with the net cash proceeds raised in one or more equity offerings.~~ If ~~the Company~~Clear Channel undergoes a change of control, sells certain of its assets, or issues certain debt, ~~offerings,~~ it may be required to offer to purchase the senior cash pay notes and senior toggle notes from holders.
The senior cash pay notes and senior toggle notes are senior unsecured debt and rank equal in right of payment with all of ~~the Company’s~~Clear Channel’s existing and future senior debt. Guarantors of obligations under the senior secured credit facilities, ~~and~~ the receivables based credit facility and the priority guarantee notes guarantee the senior cash pay notes and senior toggle notes with unconditional guarantees that are unsecured and equal in right of payment to all existing and future senior debt of such guarantors, except that the guarantees are subordinated in right of payment only to the guarantees of obligations under the senior secured credit facilities, ~~and~~ the receivables based credit ~~facility.~~facility and the priority guarantee notes to the extent of the value of the assets securing such indebtedness. In addition, the senior cash pay notes and senior toggle notes and the guarantees are structurally senior to the Clear ~~Channel’s~~Channel senior notes and existing and future debt to the extent that such debt is not guaranteed by the guarantors of the senior cash pay notes and senior toggle notes. The senior cash pay notes and senior toggle notes and the guarantees are effectively subordinated to ~~the~~Clear Channel’s existing and future secured debt and that of the guarantors to the extent of the value of the assets securing such indebtedness and are structurally subordinated to all obligations of subsidiaries that do not guarantee the senior cash pay notes and senior toggle notes.
On ~~January 15, 2009,~~July 16, 2010, Clear Channel made ~~a permitted~~the election ~~under the indenture governing the senior toggle notes~~ to pay ~~PIK Interest with respect to 100% of the senior toggle notes for the semi-annual interest period commencing~~
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February 1, 2009. For subsequent interest periods, Clear Channel must make an election regarding whether the applicable interest payment on the senior toggle notes will be made entirely in cash, entirely through PIK Interest or 50% in cash and 50% in PIK Interest. In the absence of such an election for any interest period, interest on the senior toggle notes entirely in cash, effective for the interest period commencing August 1, 2010. Assuming the cash interest election remains in effect for the remaining term of the notes, Clear Channel will be ~~payable according~~contractually obligated to make a payment to bondholders of $57.4 million on August 1, 2013.
Clear Channel Senior Notes
As of December 31, 2011, Clear Channel’s senior notes (the “senior notes”) represented approximately $2.0 billion of aggregate principal amount of indebtedness outstanding.
CC MEDIA HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
The senior notes were the obligations of Clear Channel prior to the ~~election for~~merger. The senior notes are senior, unsecured obligations that are effectively subordinated to Clear Channel’s secured indebtedness to the ~~immediately preceding interest period. As~~extent of the value of Clear Channel’s assets securing such indebtedness and are not guaranteed by any of Clear Channel’s subsidiaries and, as a result, are structurally subordinated to all indebtedness and other liabilities of Clear ~~Channel is deemed~~Channel’s subsidiaries. The senior notes rank equally in right of payment with all of Clear Channel’s existing and future senior indebtedness and senior in right of payment to ~~have made the PIK Interest election for~~all existing and future ~~interest periods unless and until it elects otherwise.~~
subordinated indebtedness. The senior notes are not guaranteed by Clear Channel’s subsidiaries.
Subsidiary Senior Notes
In
As of December ~~2009, Clear Channel Worldwide Holdings, Inc. (“CCWH”), an indirect wholly-owned~~31, 2011, the Company had outstanding $2.5 billion aggregate principal amount of subsidiary senior notes, which consisted of ~~the Company’s publicly traded subsidiary, Clear Channel Outdoor Holdings, Inc. (“CCOH”), issued~~ $500.0 million aggregate principal amount of Series A Senior Notes due 2017 (the “Series A Notes”) and $2.0 billion aggregate principal amount of Series B Senior Notes due 2017 ~~(collectively,~~(the “Series B Notes” and, collectively with the ~~“Notes”~~Series A Notes, the “subsidiary senior notes”). The ~~Notes~~subsidiary senior notes were issued by Clear Channel Worldwide Holdings, Inc. (“CCWH”) and are guaranteed by CCOH, Clear Channel Outdoor, Inc. (“CCOI”)~~, a wholly-owned subsidiary of CCOH,~~ and certain ~~other existing~~of CCOH’s direct and ~~future domestic subsidiaries~~indirect subsidiaries. The subsidiary senior notes bear interest on a daily basis and contain customary provisions, including covenants requiring CCWH to maintain certain levels of ~~CCOH (collectively, the “Guarantors”).~~
credit availability and limitations on incurring additional debt.
The ~~Notes~~subsidiary senior notes are senior obligations that rank pari passu in right of payment to all unsubordinated indebtedness of CCWH and the guarantees of the ~~Notes will~~subsidiary senior notes rank pari passu in right of payment to all unsubordinated indebtedness of the ~~Guarantors.~~
guarantors.
The indentures governing the ~~Notes~~subsidiary senior notes require ~~the Company~~CCWH to maintain at least $100 million in cash or other liquid assets or have cash available to be borrowed under committed credit facilities consisting of (i) $50.0 million at the issuer and guarantor entities (principally the Americas outdoor segment) and (ii) $50.0 million at the non-guarantor subsidiaries (principally the International outdoor segment) (together the “Liquidity Amount”), in each case under the sole control of the relevant entity. In the event of a bankruptcy, liquidation, dissolution, reorganization, or similar proceeding of Clear Channel, ~~Communications, Inc.,~~ for the period thereafter that is the shorter of such proceeding and 60 days, the Liquidity Amount shall be reduced to $50.0 million, with a $25.0 million requirement at the issuer and guarantor entities and a $25.0 million requirement at the non-guarantor subsidiaries.
In addition, interest on the ~~Notes~~subsidiary senior notes accrues daily and is payable into an account established by the trustee for the benefit of the bondholders (the “Trustee Account”). Failure to make daily payment on any day does not constitute an event of default so long as (a) no payment or other transfer by CCOH or any of its ~~Subsidiaries~~subsidiaries shall have been made on such day under the cash management sweep with Clear Channel ~~Communications, Inc.~~ and (b) on each semiannual interest payment date the aggregate amount of funds in the Trustee Account is equal to at least the aggregate amount of accrued and unpaid interest on the ~~Notes.~~
subsidiary senior notes.
The indenture governing the Series A Notes contains covenants that limit CCOH and its restricted subsidiaries ability to, among other things:
incur or guarantee additional debt to persons other than Clear Channel and its subsidiaries (other than CCOH) or issue certain preferred stock;
• ~~incur or guarantee additional debt to persons other than Clear Channel Communications and its subsidiaries (other than CCOH) or issue certain preferred stock;~~
• ~~create liens on its restricted subsidiaries assets to secure such debt;~~
• ~~create restrictions on the payment of dividends or other amounts to CCOH from its restricted subsidiaries that are not guarantors of the notes;~~
• ~~enter into certain transactions with affiliates;~~
• ~~merge or consolidate with another person, or sell or otherwise dispose of all or substantially all of its assets;~~
• ~~sell certain assets, including capital stock of its subsidiaries, to persons other than Clear Channel Communications and its subsidiaries (other than CCOH).~~
create liens on its restricted subsidiaries’ assets to secure such debt;
create restrictions on the payment of dividends or other amounts to CCOH from its restricted subsidiaries that are not guarantors of the notes;
enter into certain transactions with affiliates;
merge or consolidate with another person, or sell or otherwise dispose of all or substantially all of its assets;
sell certain assets, including capital stock of its subsidiaries, to persons other than Clear Channel and its subsidiaries (other than CCOH); and
purchase or otherwise effectively cancel or retire any of the Series A Notes if after doing so the ratio of (a) the outstanding aggregate principal amount of the Series A Notes to (b) the outstanding aggregate principal amount of the Series B Notes shall be greater than 0.250.
In addition, the indenture governing the Series A Notes provides that if CCWH (i) makes an optional redemption of the Series B Notes or purchases or makes an offer to purchase the Series B Notes at or above 100% of the principal amount thereof, then CCWH shall apply a pro rata amount to make an optional redemption or purchase a pro rata amount of the Series A Notes or (ii) makes an asset sale offer under the indenture governing the Series B Notes, then CCWH shall apply a pro rata amount to make an offer to purchase a pro rata amount of Series A Notes.
CC MEDIA HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
The indenture governing the Series A Notes does not include limitations on dividends, distributions, investments or asset sales.
The indenture governing the Series B Notes contains covenants that limit CCOH and its restricted subsidiaries ability to, among other things:
incur or guarantee additional debt or issue certain preferred stock;
redeem, repurchase or retire CCOH’s subordinated debt;
make certain investments;
create liens on its or its restricted subsidiaries’ assets to secure debt;
create restrictions on the payment of dividends or other amounts to it from its restricted subsidiaries that are not guarantors of the subsidiary senior notes;
enter into certain transactions with affiliates;
merge or consolidate with another person, or sell or otherwise dispose of all or substantially all of its assets;
sell certain assets, including capital stock of its subsidiaries;
designate its subsidiaries as unrestricted subsidiaries;
pay dividends, redeem or repurchase capital stock or make other restricted payments; and
purchase or otherwise effectively cancel or retire any of the Series B Notes if after doing so the ratio of (a) the outstanding aggregate principal amount of the Series A Notes to (b) the outstanding aggregate principal amount of the Series B Notes shall be greater than 0.250. This stipulation ensures, among other things, that as long as the Series A Notes are outstanding, the Series B Notes are outstanding.
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• ~~incur or guarantee additional debt or issue certain preferred stock;~~
• ~~redeem, repurchase or retire CCOH’s subordinated debt;~~
• ~~make certain investments;~~
• ~~create liens on its or its restricted subsidiaries’ assets to secure debt;~~
• ~~create restrictions on the payment of dividends or other amounts to it from its restricted subsidiaries that are not guarantors of the Notes;~~
• ~~enter into certain transactions with affiliates;~~
• ~~merge or consolidate with another person, or sell or otherwise dispose of all or substantially all of its assets;~~
• ~~sell certain assets, including capital stock of its subsidiaries;~~
• ~~designate its subsidiaries as unrestricted subsidiaries;~~
• ~~pay dividends, redeem or repurchase capital stock or make other restricted payments;~~The Series A Notes indenture and
• purchase or otherwise effectively cancel or retire any of the Series B Notes if after doing so the ratio of (a) the outstanding aggregate principal amount of the Series A Notes to (b) the outstanding aggregate principal amount of the Series B Notes shall be greater than 0.250. This stipulation ensures, among other things, that as long as the Series A Notes are outstanding, the Series B Notes are outstanding.
~~The~~ Series B Notes indenture ~~restricts~~restrict CCOH’s ability to incur additional indebtedness ~~and pay dividends~~but permit CCOH to incur additional indebtedness based on an incurrence test. In order to incur additional indebtedness under this test, CCOH’s debt to adjusted EBITDA ratios (as defined by the ~~indenture)~~indentures) must be lower than 6.5:1 and 3.25:1 for total debt and senior debt, respectively. ~~Similarly in order for~~The indentures contain certain other exceptions that allow CCOH to incur additional indebtedness. The Series B Notes indenture also permits CCOH to pay dividends from the proceeds of indebtedness or the proceeds from asset sales if its debt to adjusted EBITDA ratios (as defined by the ~~indenture) must be~~indentures) are lower than 6.0:1 and 3.0:1 for total debt and senior debt, respectively. ~~If these ratios are~~The Series A Notes indenture does not ~~met, CCOH has~~limit CCOH’s ability to pay dividends. The Series B Notes indenture contains certain exceptions that allow itCCOH to incur additional indebtedness and pay dividends, ~~such as~~including a $500.0 million exception for the payment of dividends. CCOH was in compliance with these covenants as of December 31, ~~2009.~~
2011.
A portion of the proceeds of the ~~Notes~~subsidiary senior notes offering were used to (i) pay the fees and expenses of the ~~Notes~~ offering, (ii) fund $50.0 million of the Liquidity Amount (the $50.0 million liquidity amount of the non-guarantor subsidiaries was satisfied) and (iii) ~~applied~~apply $2.0 billion of the cash proceeds (which amount is equal to the aggregate principal amount of the Series B Notes) to repay an equal amount of indebtedness under Clear Channel’s senior secured credit facilities. In accordance with the senior secured credit facilities, the $2.0 billion cash proceeds were applied ratably to the ~~Term Loan~~term loan A, ~~Term Loan~~term loan B, and both delayed draw term loan facilities, and within each such class, such prepayment was applied to remaining scheduled installments of principal. ~~The Company recorded a loss of $29.3 million in “Other income (expense) – net” related to deferred loan costs associated with the retired senior secured debt.~~
The balance of the proceeds is available to CCOI for general corporate purposes. In this regard, all of the remaining proceeds could be used to pay dividends from CCOI to CCOH. In turn, CCOH could declare a dividend to its shareholders, of which Clear Channel would receive its proportionate share. Payment of such dividends would not be prohibited by the terms of the ~~Notes~~subsidiary senior notes or any of the loan agreements or credit facilities of CCOI or CCOH.

Refinancing Transactions
During the first quarter of 2011, Clear Channel amended its senior secured credit facilities and its receivables based credit facility and issued $1.0 billion aggregate principal amount of 9.0% Priority Guarantee Notes due 2021 (the “Initial Notes”). The Company capitalized $39.5 million in fees and expenses associated with the offering of the Initial Notes and is amortizing them through interest expense over the life of the Initial Notes.
Clear Channel used the proceeds of the Initial Notes offering to prepay $500.0 million of the indebtedness outstanding under its senior secured credit facilities. The $500.0 million prepayment was allocated on a ratable basis between outstanding term loans and revolving credit commitments under Clear Channel’s revolving credit facility, thus permanently reducing the revolving credit commitments under Clear Channel’s revolving credit facility to $1.9 billion. The prepayment resulted in the accelerated expensing of $5.7 million of loan fees recorded in “Other income (expense) – net”.
CC MEDIA HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
The proceeds from the offering of the Initial Notes, along with available cash on hand, were also used to repay at maturity $692.7 million in aggregate principal amount of Clear Channel’s 6.25% senior notes, which matured during the first quarter of 2011.
Clear Channel obtained, concurrent with the offering of the Initial Notes, amendments to its credit agreements with respect to its senior secured credit facilities and its receivables based credit facility (revolving credit commitments under the receivables based facility were reduced from $783.5 million to $625.0 million), which were required as a condition to complete the offering. The amendments, among other things, permit Clear Channel to request future extensions of the maturities of its senior secured credit facilities, provide Clear Channel with greater flexibility in the use of its accordion capacity, provide Clear Channel with greater flexibility to incur new debt, provided that the proceeds from such new debt are used to pay down senior secured credit facility indebtedness, and provide greater flexibility for CCOH and its subsidiaries to incur new debt, provided that the net proceeds distributed to Clear Channel from the issuance of such new debt are used to pay down senior secured credit facility indebtedness.
In June 2011, Clear Channel issued an additional $750.0 million in aggregate principal amount of its 9.0% Priority Guarantee Notes due 2021 (the “Additional Notes”) at an issue price of 93.845% of the principal amount of the Additional Notes. Interest on the Additional Notes accrued from February 23, 2011, and accrued interest was paid by the purchaser at the time of delivery of the Additional Notes on June 14, 2011. The Initial Notes and the Additional Notes have identical terms and are treated as a single class. Of the $703.8 million of proceeds from the issuance of the Additional Notes ($750.0 million aggregate principal amount net of $46.2 million of discount), Clear Channel used $500 million for general corporate purposes (to replenish cash on hand that Clear Channel previously used to pay senior notes at maturity on March 15, 2011 and May 15, 2011) and intends to use the remaining $203.8 million to repay at maturity a portion of Clear Channel’s 5% senior notes which mature in March 2012.
The Company capitalized an additional $7.1 million in fees and expenses associated with the offering of the Additional Notes and is amortizing them through interest expense over the life of the Additional Notes.
Debt Repurchases, ~~Tender Offers,~~ Maturities and Other
~~During~~
Between 2009 and ~~2008,~~2011, CC Investments, Inc. (“CC Investments”), CC Finco, LLC and Clear Channel Acquisition, LLC (previously known as CC Finco II, ~~LLC, both~~LLC), indirect wholly-owned subsidiaries of the Company, repurchased certain of Clear Channel’s outstanding senior notes, senior cash pay notes and senior toggle notes through open market repurchases, privately negotiated transactions and tenders as shown in the table below. Notes repurchased and held by CC Investments, CC Finco, LLC and ~~CC Finco II,~~Clear Channel Acquisition, LLC are eliminated in consolidation.
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(In thousands)    Years Ended December 31,
     2011        2010        2009
CC Investments

Principal amount of debt repurchased
     $ —             $ 185,185             $ —
Deferred loan costs and other
   —           104           —
Gain recorded in “Other income (expense) – net”⁽²⁾
   —           (60,289)         —






Cash paid for repurchases of long-term debt
     $ —             $   125,000             $ —






CC Finco, LLC



Principal amount of debt repurchased
     $   80,000             $ —             $ 801,302
Purchase accounting adjustments⁽¹⁾
   (20,476)         —           (146,314)
Deferred loan costs and other
   —           —           (1,468)
Gain recorded in “Other income (expense) – net”⁽²⁾
   (4,274)         —           (368,591)






Cash paid for repurchases of long-term debt
     $ 55,250             $ —             $   284,929






Clear Channel Acquisition, LLC

Principal amount of debt repurchased⁽³⁾
     $ —             $ —             $ 433,125
Deferred loan costs and other
   —           —           (813)
Gain recorded in “Other income (expense) – net”⁽²⁾
   —           —           (373,775)






Cash paid for repurchases of long-term debt
     $ —             $ —             $ 58,537






CC MEDIA HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Year Ended December 31,
2009 2008
(In thousands) Post-Merger Post-Merger
CC Finco, LLC
Principal amount of debt repurchased $ 801,302 $ 102,241
Purchase accounting adjustments⁽¹⁾
(146,314 ) (24,367 )
Deferred loan costs and other (1,468 ) —
Gain recorded in “Other income (expense) — net”⁽²⁾
(368,591 ) (53,449 )

Cash paid for repurchases of long-term debt $ 284,929 $ 24,425

CC Finco II, LLC
Principal amount of debt repurchased⁽³⁾
$ 433,125 $ —
Deferred loan costs and other (813 ) —
Gain recorded in “Other income (expense) — net”⁽²⁾
(373,775 ) —

Cash paid for repurchases of long-term debt $ 58,537 $ —

(1) Represents unamortized fair value purchase accounting discounts recorded as a result of the merger.

(2) CC Investments, CC Finco, LLC and ~~CC Finco II,~~Clear Channel Acquisition, LLC, repurchased certain of Clear Channel’s ~~legacy~~senior notes, senior cash pay notes and senior toggle notes at a discount, resulting in a gain on the extinguishment of debt.

(3) ~~CC Finco II,~~Clear Channel Acquisition, LLC immediately cancelled these notes subsequent to the purchase.
~~On January 15, 2008,~~
During 2011, Clear Channel ~~redeemed~~repaid its ~~4.625%~~4.4% senior notes at ~~their~~ maturity for $140.2 million (net of $109.8 million principal amount held by and repaid to a subsidiary of Clear Channel), plus accrued interest, with available cash on hand.
As noted in the “Refinancing Transactions” section above, Clear Channel repaid its 6.25% senior notes at maturity for $692.7 (net of $57.3 million principal amount held by and repaid to a subsidiary of Clear Channel) with proceeds from the February 2011 Offering.
Prior to, and in connection with the June 2011 Offering, Clear Channel repaid all amounts outstanding under its receivables based credit facility on June 8, 2011, using cash on hand. This voluntary repayment did not reduce Clear Channel’s commitments under this facility and Clear Channel may reborrow amounts under this facility at any time. In addition, on June 27, 2011, Clear Channel made a voluntary payment of $500.0 million on its revolving credit facility, which did not reduce Clear Channel’s commitments under this facility and Clear Channel may reborrow amounts under this facility at any time.
During 2010, Clear Channel repaid its remaining 7.65% senior notes upon maturity for $138.8 million, including $5.1 million of accrued interest, with proceeds from its ~~bank credit facility. On June 15, 2008,~~delayed draw term loan facility that was specifically designated for this purpose. Also during 2010, Clear Channel ~~redeemed~~repaid its ~~6.625% Senior Notes at their~~remaining 4.50% senior notes upon maturity for ~~$125.0~~$240.0 million with available cash on hand.
During 2009, Clear Channel ~~terminated its cross currency swaps on July 30, 2008 by paying the counterparty $196.2 million from available cash on hand.~~
On August 7, 2008, Clear Channel announced that it commenced a cash tender offer and consent solicitation for its outstanding $750.0 million principal amount of 7.65% senior notes due 2010. The tender offer and consent payment expired on September 9, 2008. The aggregate principal amount of 7.65% senior notes validly tendered and accepted for payment was $363.9 million. Clear Channel recorded a $21.8 million loss in “Other income (expense) — net” during the pre-merger period as a result of the tender.
Clear Channel repurchased $639.2 million aggregate principal amount of the AMFM Operating Inc. 8% senior notes pursuant to a tender offer and consent solicitation in connection with the merger. The remaining 8% senior notes were redeemed at maturity on November 1, 2008. The aggregate loss on the extinguishment of debt recorded in “Other income (expense) — net” in 2008 as a result of the tender offer for the AMFM Operating Inc. 8% notes was $8.0 million.
On November 24, 2008, Clear Channel announced that it commenced another cash tender offer to purchase its outstanding 7.65% Senior Notes due 2010. The tender offer and consent payment expired on December 23, 2008. The aggregate principal amount of 7.65% senior notes validly tendered and accepted for payment was $252.4 million. The Company recorded an aggregate gain on the extinguishment of debt of $74.7 million in “Other income (expense) — net” during the post-merger period as a result of the tender offer for the 7.65% senior notes due 2010.
~~During the second quarter of 2009, the Company redeemed~~repaid the remaining principal amount of ~~Clear Channel’s~~its 4.25% senior notes at maturity with a draw under the $500.0 million delayed draw term loan facility that iswas specifically designated for this purpose.
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Future maturities of long-term debt at December 31, ~~2009 are~~2011are as follows:

(In thousands)
2010 $ 403,233
2011 873,035
2012 267,658
2013 457,355
2014 3,715,271
Thereafter 15,773,439

Total⁽¹⁾
$ 21,489,991

(In thousands)
2012
   $ 275,649
2013
   420,495
2014
   2,809,772
2015
   253,535
2016
   12,236,000
Thereafter
   4,726,054


Total⁽¹⁾
   $     20,721,505
⁽¹⁾ (1) Excludes ~~a negative~~ purchase accounting ~~fair value adjustment~~adjustments and original issue discount of ~~$788.1~~$514.3 million, which is amortized through interest expense over the life of the underlying debt obligations.
NOTE ~~H — FINANCIAL INSTRUMENTS~~
~~Interest Rate Swaps~~
The Company’s aggregate $6.0 billion notional amount interest rate swap agreements are designated as a cash flow hedge and the effective portion of the gain or loss on the swap is reported as a component of other comprehensive income. Ineffective portions of a cash flow hedging derivative’s change in fair value are recognized currently in earnings. No ineffectiveness was recorded in earnings related to these interest rate swaps.
The Company entered into the swaps to effectively convert a portion of its floating-rate debt to a fixed basis, thus reducing the impact of interest rate changes on future interest expense. The Company assesses at inception, and on an ongoing basis, whether its interest rate swap agreements are highly effective in offsetting changes in the interest expense of its floating rate debt. A derivative that is not a highly effective hedge does not qualify for hedge accounting.
The Company continually monitors its positions with, and credit quality of, the financial institutions which are counterparties to its interest rate swaps. The Company may be exposed to credit loss in the event of nonperformance by the counterparties to the interest rate swaps. However, the Company considers this risk to be low. If a derivative instrument no longer qualifies as a cash flow hedge, hedge accounting is discontinued and the gain or loss that was recorded in other comprehensive income is recognized currently in income.
~~Secured Forward Exchange Contracts~~
Clear Channel terminated its secured forward exchange contracts effective June 13, 2008, receiving net proceeds of $15.2 million. A net gain of $27.0 million was recorded in the pre-merger period in “Gain (loss) on marketable securities” related to terminating the contracts and selling the underlying AMT shares.
~~Foreign Currency Rate Management~~
Clear Channel terminated its cross currency swap contracts on July 30, 2008 by paying the counterparty $196.2 million from available cash on hand. The contracts were recorded on the balance sheet at fair value, which was equivalent to the cash paid to terminate them. The related fair value adjustments in other comprehensive income were deleted when the merger took place.
~~NOTE I —~~6 – FAIR VALUE MEASUREMENTS
~~The Company adopted Financial Accounting Standards Board Statement No. 157,~~~~Fair Value Measurements,~~codified in ASC 820-10, on January 1, 2008 and began to apply its recognition and disclosure provisions to its financial assets and financial liabilities that are remeasured at fair value at least annually.
ASC 820-10-35 establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs
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other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.
Marketable Equity Securities
The Company’s marketable equity securities and interest rate ~~swaps~~swap are measured at fair value on each reporting date.
The marketable equity securities are measured at fair value using quoted prices in active markets. Due to the fact that the inputs used to measure the marketable equity securities at fair value are observable, the Company has categorized the fair value measurements of the securities as Level 1.
CC MEDIA HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
The cost, unrealized holding gains or losses, and fair value of ~~these securities~~the Company’s investments at December 31, 2011 and 2010 are as follows:
(In thousands)       Gross
Unrealized    Gross
Unrealized    Fair
Investments
   Cost    Losses    Gains    Value
2011

Available-for sale
     $ 7,786           $ —             $ 65,214           $ 73,000
Other cost investments
   4,766           —             —             4,766








Total
     $   12,552           $ —             $ 65,214           $ 77,766








2010

Available-for sale
     $ 12,614           $ —             $ 57,945           $ 70,559
Other cost investments
   4,773           —             —             $ 4,773








Total
     $ 17,387           $ —             $ 57,945           $ 75,332








Other cost investments include various investments in companies for which there is no readily determinable market value.
The Company’s available-for-sale security, Independent News & Media PLC (“INM”), was in an unrealized loss position for an extended period of time throughout 2009 through 2011. As a result, the Company considered the guidance in ASC 320-10-S99 and ~~2008~~reviewed the length of the time and the extent to which the market value was ~~$38.9~~less than cost and the financial condition and near-term prospects of the issuer. After this assessment, the Company concluded that the impairment was other than temporary and recorded a non-cash impairment charge of $4.8 million, $6.5 million and ~~$27.1~~$11.3 million in “Loss on marketable securities” for the years ended December 31, 2011, 2010 and 2009, respectively.
Interest Rate Swap
The Company’s ~~aggregate $6.0~~$2.5 billion notional amount of interest rate swap ~~agreements are~~agreement is designated as a cash flow hedge and the effective portion of the gain or loss on the swap is reported as a component of other comprehensive ~~income.~~ income (loss). Ineffective portions of a cash flow hedging derivative’s change in fair value are recognized currently in earnings. In accordance with ASC 815-20-35-9, as the critical terms of the swap and the floating-rate debt being hedged were the same at inception and remained the same during the current period, no ineffectiveness was recorded in earnings.
The Company entered into ~~the swaps~~its swap agreement to effectively convert a portion of its floating-rate debt to a fixed basis, thus reducing the impact of ~~interest-rate~~interest rate changes on future interest expense. ~~Due~~The Company assesses at inception, and on an ongoing basis, whether its interest rate swap agreement is highly effective in offsetting changes in the interest expense of its floating rate debt. A derivative that is not a highly effective hedge does not qualify for hedge accounting.
The Company continually monitors its positions with, and credit quality of, the financial institution which is counterparty to its interest rate swap. The Company may be exposed to credit loss in the event of nonperformance by its counterparty to the ~~fact that the inputs to the model used to estimate fair value are either directly or indirectly observable,~~interest rate swap. However, the Company ~~classified~~considers this risk to be low. If a derivative instrument no longer qualifies as a cash flow hedge, hedge accounting is discontinued and the ~~fair value measurements of these agreements as Level 2. No ineffectiveness~~gain or loss that was recorded in ~~earnings related to these~~other comprehensive income is recognized currently in income.
The swap agreement is valued using a discounted cash flow model that takes into account the present value of the future cash flows under the terms of the agreements by using market information available as of the reporting date, including prevailing interest ~~rate swaps.~~
rates and credit spread. Due to the fact that the inputs are either directly or indirectly observable, the Company classified the fair value ~~measurements~~measurement of ~~these agreements~~the agreement as Level 2.
The ~~table below shows the balance sheet classification and~~ fair value of the Company’s $2.5 billion notional amount interest rate ~~swaps~~swap designated as a hedging ~~instruments:~~

(In thousands)
Classification as of December 31, 2009 Fair Value Classification as of December 31, 2008 Fair Value

Other long-term liabilities $ 237,235 Other long-term liabilities $ 118,785
instrument and recorded in “Other long-term liabilities” was $159.1 million and $213.1 million at December 31, 2011 and 2010, respectively.
CC MEDIA HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
The following table ~~details~~provides the beginning and ending accumulated other comprehensive loss and the current period activity related to the interest rate swap agreements:

(In thousands) Accumulated other
comprehensive loss
Balance at January 1, 2009 $ 75,079
Other comprehensive loss 74,100

Balance at December 31, 2009 $ 149,179

(In thousands) Accumulated other
comprehensive loss
Balance at December 31, 2009
    $ 149,179
Other comprehensive income
    15,112
Balance at December 31, 2010
    134,067
Other comprehensive income
    33,775
Balance at December 31, 2011
    $ 100,292
NOTE ~~J —~~7 – COMMITMENTS AND CONTINGENCIES
The Company accounts for its rentals that include renewal options, annual rent escalation clauses, minimum franchise payments and maintenance related to displays under the guidance in ASC ~~Topic 840,~~~~Leases~~.
840.
The Company considers its non-cancelable contracts that enable it to display advertising on buses, ~~taxis, trains,~~ bus shelters, trains, etc. to be leases in accordance with the guidance in ASC 840-10. These contracts may contain minimum annual franchise payments which generally escalate each year. The Company accounts for these minimum franchise payments on a straight-line basis. If the rental increases are not scheduled in the lease, ~~for example~~such as an increase based on subsequent changes in the ~~CPI,~~index or rate, those rents are considered contingent rentals and are recorded as expense when accruable. Other contracts may contain a variable rent component based on revenue. The Company accounts for these variable components as contingent rentals and records these payments as expense when accruable.
~~118~~
The Company accounts for annual rent escalation clauses included in the lease term on a straight-line basis under the guidance in ASC ~~840-10.~~840-20-25. The Company considers renewal periods in determining its lease terms if at inception of the lease there is reasonable assurance the lease will be renewed. Expenditures for maintenance are charged to operations as incurred, whereas expenditures for renewal and betterments are capitalized.
The Company leases office space, certain broadcasting facilities, equipment and the majority of the land occupied by its outdoor advertising structures under long-term operating leases. The Company accounts for these leases in accordance with the policies described above.
The Company’s contracts with municipal bodies or private companies relating to street furniture, ~~billboard,~~billboards, transit and malls generally require the Company to build bus stops, kiosks and other public amenities or advertising structures during the term of the contract. The Company owns these structures and is generally allowed to advertise on them for the remaining term of the contract. Once the Company has built the structure, the cost is capitalized and expensed over the shorter of the economic life of the asset or the remaining life of the contract.
In addition, the Company has commitments relating to required purchases of property, plant and equipment under certain street furniture contracts. Certain of the Company’s contracts contain penalties for not fulfilling its commitments related to its obligations to build bus stops, kiosks and other public amenities or advertising structures. Historically, any such penalties have not materially impacted the Company’s financial position or results of operations.
Certain acquisition agreements include deferred consideration payments based on performance requirements by the seller typically involving the completion of a development or obtaining appropriate permits that enable the Company to construct additional advertising displays. At December 31, 2011, the Company believes its maximum aggregate contingency, which is subject to performance requirements by the seller, is approximately $32.5 million. As the contingencies have not been met or resolved as of December 31, 2011, these amounts are not recorded.
As of December 31, ~~2009,~~2011, the Company’s future minimum rental commitments under non-cancelable operating lease agreements with terms in excess of one year, minimum payments under non-cancelable contracts in excess of one year, and capital expenditure commitments consist of the following:

Non-Cancelable Non-Cancelable Capital
(In thousands) Operating Leases Contracts Expenditures
2010 $ 367,524 $ 541,683 $ 67,372
2011 311,768 447,708 32,274
2012 276,486 301,221 13,364
2013 250,836 232,136 9,970
2014 217,308 191,048 9,867
Thereafter 1,225,651 580,815 3,415

Total $ 2,649,573 $ 2,294,611 $ 136,262

CC MEDIA HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(In thousands)    Non-Cancelable
Operating Leases    Non-Cancelable
Contracts    Capital
Expenditure
Commitments
2012
     $ 383,456           $ 548,830           $ 67,879
2013
     334,200           427,703           26,472
2014
     294,985           375,936           12,748
2015
     284,647           333,130           16,402
2016
     223,105           266,582           18,456
Thereafter
     1,287,880           520,361           6,921






Total
     $ 2,808,273           $ 2,472,542           $ 148,878






Rent expense charged to ~~continuing~~ operations for the ~~year~~years ended December 31, 2011, 2010 and 2009 was $1.16 billion, $1.10 billion and $1.13 ~~billion. Rent expense charged~~billion, respectively.
In various areas in which the Company operates, outdoor advertising is the object of restrictive and, in some cases, prohibitive zoning and other regulatory provisions, either enacted or proposed. The impact to ~~continuing operations~~the Company of loss of displays due to governmental action has been somewhat mitigated by Federal and state laws mandating compensation for ~~the post-merger period from July 31, 2008 to December 31, 2008~~such loss and the pre-merger period from January 1, 2008 to July 30, 2008 was $526.6 million and $755.4 million, respectively. Rent expense charged to continuing operations for the pre-merger year ended December 31, 2007 was $1.2 billion.
constitutional restraints.
The Company isand its subsidiaries are currently involved in certain legal proceedings arising in the ordinary course of business and, as required, the Company has accrued its estimate of the probable costs for ~~the~~ resolution of ~~these claims.~~those claims for which the occurrence of loss is probable and the amount can be reasonably estimated. These estimates have been developed in consultation with counsel and are based upon an analysis of potential results, assuming a combination of litigation and settlement strategies. It is possible, however, that future results of operations for any particular period could be materially affected by changes in the Company’s assumptions or the effectiveness of its strategies related to these proceedings.
~~In various areas~~
On or about July 12, 2006 and April 12, 2007, two of the Company’s operating businesses (L&C Outdoor Ltda. (“L&C”) and Publicidad Klimes São Paulo Ltda. (“Klimes”), respectively) in the São Paulo, Brazil market received notices of infraction from the state taxing authority, seeking to impose a value added tax (“VAT”) on such businesses, retroactively for the period from December 31, 2001 through January 31, 2006. The taxing authority contends that the Company’s businesses fall within the definition of “communication services” and as such are subject to the VAT.
L&C and Klimes have filed separate petitions to challenge the imposition of this tax. L&C’s challenge in the administrative courts was unsuccessful at the first level, but successful at the second administrative level. The state taxing authority filed an appeal to the third and final administrative level, which required consideration by a full panel of 16 administrative law judges. On September 27, 2010, L&C received an unfavorable ruling at this final administrative level, which concluded that the ~~Company operates, outdoor advertising~~VAT applied. On December 15, 2011, a Special Chamber of the administrative court considered the reasonableness of the amount of the penalty assessed against L&C and significantly reduced the penalty. With the reduction, the amounts allegedly owed by L&C are approximately $8.6 million in taxes, approximately $4.3 million in penalties and approximately $18.4 million in interest (as of December 31, 2011 at an exchange rate of 0.534). On January 27, 2012, L&C filed a writ of mandamus in the 8th lower public treasury court in São Paulo, State of São Paulo, appealing the administrative court’s decision that the VAT applies. On that same day, L&C filed a motion for an injunction barring the taxing authority from collecting the tax, penalty and interest while the appeal is pending. The court denied the ~~object of restrictive~~motion on January 30, 2012. L&C filed a motion for reconsideration, and in ~~some cases, prohibitive zoning~~early February 2012, the court granted that motion and ~~other regulatory provisions, either enacted~~issued an injunction.
Klimes’ challenge was unsuccessful at the first level of the administrative courts, and denied at the second administrative level on or ~~proposed.~~about September 24, 2009. On January 5, 2011, the administrative law judges at the third administrative level published a ruling that the VAT applies but significantly reduced the penalty assessed by the taxing authority. With the penalty reduction, the amounts allegedly owed by Klimes are approximately $9.7 million in taxes, approximately $4.8 million in penalties and approximately $20.1 million in interest (as of December 31, 2011 at an exchange rate of 0.534). In late February 2011, Klimes filed a writ of mandamus in the 13th lower public treasury court in São Paulo, State of São Paulo, appealing the administrative court’s decision that the VAT applies. On that same day, Klimes filed a motion for an injunction barring the taxing authority from collecting the tax, penalty and interest while the appeal is pending. The ~~impact~~court denied the motion in early April 2011. Klimes filed a motion for reconsideration with the court and also appealed that ruling to the ~~Company of loss of displays due to governmental action has been somewhat mitigated by Federal~~São Paulo State Higher Court, which affirmed in late April 2011. On June 20, 2011, the 13th lower public treasury court in São Paulo reconsidered its prior ruling and ~~state laws mandating compensation for such loss and constitutional restraints.~~
~~Certain acquisition agreements include deferred consideration payments based on performance requirements~~granted Klimes an injunction suspending any collection effort by the ~~seller typically involving~~taxing authority until a decision on the ~~completion~~merits is obtained at the first judicial level.
CC MEDIA HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
On August 8, 2011, Brazil’s National Council of Fiscal Policy (CONFAZ) published a ~~development~~rule authorizing a general amnesty to sixteen states, including the State of São Paulo, to reduce the principal amount of VAT allegedly owed for communications services and reduce or ~~obtaining appropriate permits~~waive related interest and penalties. The State of São Paulo ratified the amnesty in late August 2011. However, in late 2011, the State of São Paulo decided not to pursue the general amnesty, but it has indicated that ~~enable~~it would be willing to consider a special amnesty for the ~~Company~~out-of-home industry. Klimes and L&C are actively exploring this opportunity but do not know whether the State ultimately will offer a special amnesty or what the terms of any special amnesty might be. Accordingly, the businesses continue to ~~construct additional advertising displays.~~ vigorously pursue their appeals in the lower public treasury court.
At December 31, ~~2009,~~2011, the range of reasonably possible loss is from zero to approximately $31.2 million in the L&C matter and is from zero to approximately $34.6 million in the Klimes matter. The maximum loss that could ultimately be paid depends on the timing of the final resolution at the judicial level and applicable future interest rates. Based on the Company’s review of the law, the outcome of similar cases at the judicial level and the advice of counsel, the Company has not accrued any costs related to these claims and believes ~~its maximum aggregate contingency, which~~the occurrence of loss is ~~subject to performance requirements by the seller, is approximately $35.0 million. As the contingencies have~~ not ~~been met or resolved as of December 31, 2009, these amounts are not recorded. If future~~
~~119~~
probable.
NOTE 8 – GUARANTEES
~~payments are made, amounts will be recorded as additional purchase price.~~
~~NOTE K — GUARANTEES~~
At December 31, ~~2009, the Company~~2011, Clear Channel guaranteed ~~$39.9~~$39.5 million of credit lines provided to certain of its international subsidiaries by a major international bank. Most of these credit lines related to intraday overdraft facilities covering participants in ~~the Company’s~~Clear Channel’s European cash management pool. As of December 31, ~~2009,~~2011, no amounts were outstanding under these agreements.
As of December 31, ~~2009, the Company~~2011, Clear Channel had outstanding surety bonds and commercial standby letters of credit ~~and surety bonds~~ of ~~$175.7~~$48.3 million and ~~$95.2~~$136.5 million, ~~respectively.~~respectively, of which $67.5 million of letters of credit were cash secured. Letters of credit in the amount of ~~$67.5~~$9.1 million are collateral in support of surety bonds and these amounts would only be drawn under the letters of credit in the event the associated surety bonds were funded and ~~the Company~~Clear Channel did not honor its reimbursement obligation to the issuers.
These letters of credit and surety bonds relate to various operational matters including insurance, bid, and performance bonds as well as other items.

As of December 31, 2011, Clear Channel had outstanding bank guarantees of $56.2 million. Bank guarantees in the amount of $4.3 million are backed by cash collateral.
NOTE ~~L —~~9 – INCOME TAXES
Significant components of the provision for income tax ~~expense (benefit)~~benefit (expense) are as follows:

Period from July 31 Period from January
Year ended December through December 1 through July 30, Year ended December
31, 2009 31, 2008 2008 31, 2007
(In thousands) Post-Merger Post-Merger Pre-Merger Pre-Merger
Current — Federal $ (104,539 ) $ (100,578 ) $ (6,535 ) $ 187,700
Current — foreign 15,301 15,755 24,870 43,776
Current — state 13,109 8,094 8,945 21,434

Total current (benefit) expense (76,129 ) (76,729 ) 27,280 252,910

Deferred — Federal (366,024 ) (555,679 ) 145,149 175,524
Deferred — foreign (30,399 ) (17,762 ) (12,662 ) (1,400 )
Deferred — state (20,768 ) (46,453 ) 12,816 14,114

Total deferred (benefit) expense (417,191 ) (619,894 ) 145,303 188,238

Income tax (benefit) expense $ (493,320 ) $ (696,623 ) $ 172,583 $ 441,148

~~120~~
(In thousands)    Years Ended December 31,
   2011    2010    2009
Current - Federal
     $ 18,608           $ (4,534)           $ 104,539
Current - foreign
     (51,293)           (41,388)           (15,301)
Current - state
     14,719           (5,278)           (13,109)






Total current benefit (expense)
     (17,966)           (51,200)           76,129
Deferred - Federal
     126,078           211,137           366,024
Deferred - foreign
     13,708           (3,859)           30,399
Deferred - state
     4,158           3,902           20,768






Total deferred benefit (expense)
     143,944           211,180           417,191






Income tax benefit (expense)
     125,978           $ 159,980           $ 493,320






~~Significant components~~Current tax expense of $18.0 million was recorded for 2011 as compared to current tax expenses of $51.2 million for 2010 primarily due to the Company’s settlement of U.S. Federal and state tax examinations during 2011. Pursuant to the settlements, the Company recorded a reduction to current income tax expense of approximately $51.1 million during 2011 to reflect the net current tax benefits of the ~~Company’s~~settlements.
Deferred tax benefits of $143.9 million for 2011, primarily relate to future benefits of net operating loss carryforwards, and were lower when compared with deferred tax ~~liabilities and assets as~~benefits of ~~December 31, 2009 and 2008~~$211.2 million for 2010. The decrease in deferred tax benefits in 2011 is primarily due to a decrease in Federal tax losses. Additional decreases are ~~as follows:~~

Post-Merger
(In thousands) 2009 2008
Deferred tax liabilities:
Intangibles and fixed assets $ 2,074,925 $ 2,332,924
Long-term debt 530,519 352,057
Foreign 62,661 87,654
Equity in earnings 36,955 27,872
Investments 18,067 15,268
Other 17,310 25,836

Total deferred tax liabilities 2,740,437 2,841,611

Deferred tax assets:
Accrued expenses 117,041 129,684
Unrealized gain in marketable securities 22,126 29,438
Net operating loss/Capital loss carryforwards 365,208 319,530
Bad debt reserves 11,055 28,248
Deferred Income 717 976
Other 27,701 17,857

Total gross deferred tax assets 543,848 525,733
Less: Valuation allowance 3,854 319,530

Total deferred tax assets 539,994 206,203

Net deferred tax liabilities $ 2,200,443 $ 2,635,408

~~Included in~~a result of the deferred tax impacts from the Company’s ~~net deferred~~settlement of U.S. Federal and state tax ~~liabilities are $19.6 million and $43.9 million~~examinations during 2011 along with the write-off of ~~current net~~ deferred tax assets ~~for 2009 and 2008, respectively. The Company presents these assets in “Other current assets” on its consolidated balance sheets. The remaining $2.2 billion and $2.7 billion~~associated with the 2011 vesting of ~~net deferred tax liabilities for 2009 and 2008, respectively, are presented in “Deferred tax liabilities” on the consolidated balance sheets.~~
certain equity awards.
CC MEDIA HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
For the year ended December 31, 2010, deferred tax benefits decreased $206.0 million as compared to 2009 ~~the Company recorded certain~~primarily due to larger impairment charges ~~that are not~~recorded in 2009 related to tax deductible ~~for tax purposes and resulted in a reduction of deferred tax liabilities of approximately $379.6 million. Additional decreases in net deferred tax liabilities are as a result of~~intangibles. This decrease was partially offset by increases in deferred tax assets associated with current period net operating losses. The Company is able to utilize those losses through either carrybacks to prior years as a result of the November 6, 2009, tax law change and expanded loss carryback provisions provided by the Worker, Homeownership, and Business Assistance Act of 2009 (the “Act”) or based on our expectations as to future taxable income from deferred tax liabilities that reverse in the relevant carryforward period for those net operating losses that cannot be carried back. Increasesexpense in 2009 ~~deferred tax liabilities of approximately $338.9 million are~~ as a result of the deferral of certain discharge of indebtedness income, for income tax purposes, resulting from the reacquisition of business indebtedness, ~~(see Note G). These gains are allowed to be deferred for tax purposes and recognized in future periods beginning in 2014 through 2019,~~ as provided by the American Recovery and Reinvestment Act of 2009 signed into law on February 17, 2009.
In addition, in 2010 the Company recorded additional deferred tax expenses related to excess tax over book depreciation resulting from the accelerated tax depreciation provisions available under the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 that was signed into law on December 17, 2010.
Significant components of the Company’s deferred tax liabilities and assets as of December 31, 2011and 2010 are as follows:
(In thousands)    2011    2010
Deferred tax liabilities:

Intangibles and fixed assets
       $   2,381,177             $   2,202,702
Long-term debt
   465,201         523,846
Foreign
   43,305         55,102
Investments in nonconsolidated affiliates
   46,502         48,880
Other investments
   7,068         7,012
Other
   25,834         18,488




Total deferred tax liabilities
   2,969,087         2,856,030
Deferred tax assets:

Accrued expenses
   92,038         123,225
Unrealized gain in marketable securities
   6,833         22,229
Net operating losses
   917,078         658,352
Bad debt reserves
   10,767         12,244
Deferred Income
   590         700
Other
   33,931         32,241




Total gross deferred tax assets
   1,061,237         848,991 ��
Less: Valuation allowance
   14,177         17,434




Total deferred tax assets
   1,047,060         831,557




Net deferred tax liabilities
       $   1,922,027             $   2,024,473




Included in the Company’s net deferred tax liabilities are $ 16.6 million and $25.7 million of current net deferred tax assets for 2011 and 2010, respectively. The Company presents these assets in “Other current assets” on its consolidated balance sheets. The remaining $1.9 billion and $2.0 billion of net deferred tax liabilities for 2011 and 2010, respectively, are presented in “Deferred tax liabilities” on the consolidated balance sheets.
At December 31, ~~2009,~~2011, the Company had recorded net operating loss carryforwards (tax effected) for federal and state income tax purposes of $917.1 million, expiring in various amounts through 2031. The Company expects to realize the benefits of the majority of net operating losses based on its expectations as to future taxable income from deferred tax liabilities that reverse in the relevant carryforward period and therefore the Company has not recorded a valuation allowance against those losses.
At December 31, 2011, net deferred tax liabilities include a deferred tax asset of ~~$23.2~~$27.5 million relating to stock-based compensation expense under ASC 718-10,Compensation—Stock Compensation. Full realization of this deferred tax asset requires stock options to be exercised at a price equaling or exceeding the sum of the grant price plus the fair value of the option at the grant date and restricted stock to vest at a price equaling or exceeding the fair market value at the grant date. Accordingly, there can be no assurance that the stock price of the Company’s common stock will rise to levels sufficient to realize the entire deferred tax benefit currently reflected in its balance sheet.
For the year ended December 31, 2008, the Company recorded approximately $2.5 billion in additional deferred tax liabilities associated with the applied purchase accounting adjustments resulting from the acquisition of Clear Channel. The additional deferred tax liabilities primarily relate to differences between the purchase accounting
~~121~~
adjusted book basis and the historical tax basis of the Company’s intangible assets. During the post-merger period ended December 31, 2008, the Company recorded an impairment charge to its FCC licenses, permits and tax deductible goodwill resulting in a decrease of approximately $648.2 million in recorded deferred tax liabilities.
The deferred tax liability related to intangibles and fixed assets primarily relates to the difference in book and tax basis of acquired FCC licenses, permits and tax deductible goodwill created from the Company’s various stock acquisitions. In accordance with ASC 350-10,Intangibles—Goodwill and Other, the Company ~~no longer amortizes~~does not amortize FCC licenses and permits. As a result, this deferred tax liability will not reverse over time unless the Company recognizes future impairment charges related to its FCC licenses, permits and tax deductible goodwill or sells its FCC licenses or permits. As the Company continues to amortize its tax basis in its FCC licenses, permits and tax deductible goodwill, the deferred tax liability will increase over time.
CC MEDIA HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
The reconciliation of income tax computed at the U.S. Federal statutory tax rates to income tax ~~expense (benefit)~~benefit (expense) is:

Post-merger year ended Post-merger period ended Pre-merger period ended Pre-merger year ended
December 31, 2009 December 31, 2008 July 30, 2008 December 31, 2007
(In thousands) Amount Percent Amount Percent Amount Percent Amount Percent
Income tax expense (benefit) at statutory rates $ (1,589,825 ) 35 % $ (2,008,040 ) 35 % $ 205,108 35 % $ 448,298 35 %
State income taxes, net of Federal tax benefit (7,660 ) 0 % (38,359 ) 1 % 21,760 4 % 35,548 3 %
Foreign taxes 92,648 (2 %) 95,478 (2 %) (29,606 ) (5 %) (8,857 ) (1 %)
Nondeductible items 3,317 (0 %) 1,591 (0 %) 2,464 0 % 6,228 0 %
Changes in valuation allowance and other estimates (54,579 ) 1 % 53,877 (1 %) (32,256 ) (6 %) (34,005 ) (3 %)
Impairment charge 1,050,535 (23 %) 1,194,182 (21 %) — — — —
Other, net 12,244 (0 %) 4,648 (0 %) 5,113 1 % (6,064 ) (0 %)

$ (493,320 ) 11 % $ (696,623 ) 12 % $ 172,583 29 % $ 441,148 34 %

   Years Ended December 31,
(In thousands)    2011    2010    2009
   Amount    Percent    Amount    Percent    Amount    Percent
Income tax benefit (expense) at statutory rates
   $ 137,903         35%             $   217,991         35%             $   1,589,825         35%
State income taxes, net of Federal tax benefit
   18,877         5%           (1,376)         0%           7,660         0%
Foreign taxes
   (4,683)         (1%)           (30,967)         (5%)           (92,648)         (2%)
Nondeductible items
   (3,154)         (1%)           (3,165)         (0%)           (3,317)         (0%)
Changes in valuation allowance and other estimates
   (15,816)         (4%)           (16,263)         (3%)           54,579         1%
Impairment charge
   —           0%           —           0%           (1,050,535)         (23%)
Other, net
   (7,149)         (2%)           (6,240)         (1%)           (12,244)         (0%)







Income tax benefit (expense)
     $   125,978         32%             $   159,980         26%             $   493,320         11%







A tax benefit was recorded for the ~~post-merger period~~year ended December 31, 2011 of 32%. The effective tax rate for 2011 was impacted by the Company’s settlement of U.S. Federal and state tax examinations during the year. Pursuant to the settlements, the Company recorded a reduction to income tax expense of approximately $16.3 million to reflect the net tax benefits of the settlements. This benefit was partially offset by additional tax recorded during 2011 related to the write-off of deferred tax assets associated with the vesting of certain equity awards and the inability to benefit from certain tax loss carryforwards in foreign jurisdictions. Foreign income before income taxes was approximately $94.0 million for 2011.
A tax benefit was recorded for the year ended December 31, 2010 of 26%. The effective tax rate for 2010 was impacted by the Company’s inability to benefit from tax losses in certain foreign jurisdictions due to the uncertainty of the ability to utilize those losses in future years. In addition, the Company recorded a valuation allowance of $13.6 million against deferred tax assets in foreign jurisdictions due to the uncertainty of the ability to realize those assets in future periods. Foreign income before income taxes was approximately $40.8 million for 2010.
A tax benefit was recorded for the year ended December 31, 2009 of 11%. The effective tax rate for ~~the post-merger period~~2009 was primarily impacted by the goodwill impairment charges which are not deductible for tax purposes (see Note D)2). In addition, the Company was unable to benefit tax losses in certain foreign jurisdictions due to the uncertainty of the ability to utilize those losses in future years. These impacts were partially offset by the reversal of valuation allowances on certain net operating losses as a result of the Company’s ability to utilize those losses through either carrybacks to prior years or based on our expectations as to future taxable income from deferred tax liabilities that reverse in the relevant carryforward period for those net operating losses that cannot be carried back.
A tax benefit was recorded for the post-merger period ended December 31, 2008 of 12% and reflects the Company’s ability to recover a limited amount of the Company’s prior period tax liabilities through certain net operating loss carrybacks. The effective tax rate for the 2008 post-merger period was primarily impacted by the goodwill impairment charges which are not deductible for tax purposes (see Note D). In addition, the Company recorded a valuation allowance on certain net operating losses generated during the post-merger period that are not able to be carried back to prior years. The effective tax rate for the 2008 pre-merger period was primarily impacted by the tax effect of the disposition of certain radio broadcasting assets and investments.
During 2007, Clear Channel utilized approximately $2.2 million of net operating loss carryforwards, the majority of which were generated by certain acquired companies prior to their acquisition by Clear Channel. The utilization of the net operating loss carryforwards reduced current taxes payable and current tax expense for the year ended December 31, 2007. Clear Channel’s effective income tax rate for 2007 was 34.4% as compared to 41.2% for 2006. For 2007, the effective tax rate was primarily affected by the recording of current tax benefits of approximately $45.7 million related to the settlement of several tax positions with the Internal Revenue Service (“IRS”) for the 1999 through 2004 tax years and deferred tax benefits of approximately $14.6 million related to the release of
~~122~~
valuation allowances for the use of certain capital loss carryforwards. These tax benefits were partially offset by additional current tax expense being recorded in 2007 due to an increase in Income (loss) before income taxes of $139.6 million.
~~The remaining Federal net operating loss carryforwards of $996.7 million expires in various amounts from 2020 to 2029.~~
The Company continues to record interest and penalties related to unrecognized tax benefits in current income tax expense. The total amount of interest accrued at December 31, ~~2009~~2011 and ~~2008~~2010 was ~~$70.7~~$61.0 million and ~~$53.5~~$87.5 million, respectively. The total amount of unrecognized tax benefits and accrued interest and penalties at December 31, ~~2009~~2011 and ~~2008~~2010 was ~~$308.3~~$236.8 million and ~~$267.8~~$312.9 million, respectively, of which $212.7 million and $269.3 million is included in “Other long-term liabilities”, and $4.5 million and $35.3 million is included in “Accrued Expenses” on the Company’s consolidated balance sheets, respectively. In addition, $19.6 million of unrecognized tax benefits are recorded net with the Company’s deferred tax assets for its net operating losses as opposed to being recorded in “Other long-term liabilities” ~~on the Company’s consolidated balance sheets. Of this total, $308.3 million~~ at December 31, ~~2009 represents the~~2011. The total amount of unrecognized tax benefits at December 31, 2011 and ~~accrued interest and penalties~~2010 that, if recognized, would ~~favorably affect~~impact the effective income tax rate ~~in future periods.~~

Post-merger year ended Post-merger period Pre-merger period ended
December 31, ended December 31, July 30,
Unrecognized Tax Benefits(In thousands) 2009 2008 2008
Balance at beginning of period $ 214,309 $ 207,884 $ 194,060
Increases for tax position taken in the current year 3,347 35,942 8,845
Increases for tax positions taken in previous years 33,892 3,316 7,019
Decreases for tax position taken in previous years (4,629 ) (20,564 ) (1,764 )
Decreases due to settlements with tax authorities (203 ) (9,975 ) (276 )
Decreases due to lapse of statute of limitations (9,199 ) (2,294 ) —

Balance at end of period $ 237,517 $ 214,309 $ 207,884

is $146.0 million and $204.6 million, respectively.
(In thousands)    Years Ended December 31,
Unrecognized Tax Benefits
   2011    2010
Balance at beginning of period
     $   225,469           $   237,517
Increases for tax position taken in the current year
   5,373         5,222
Increases for tax positions taken in previous years
   12,115         22,990
Decreases for tax position taken in previous years
   (37,677)         (20,705)
Decreases due to settlements with tax authorities
   (29,443)         (14,462)
Decreases due to lapse of statute of limitations
   (55)         (5,093)




Balance at end of period
     $   175,782           $   225,469




CC MEDIA HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
The Company and its subsidiaries file income tax returns in the United States Federal jurisdiction and various state and foreign jurisdictions. During ~~2009,~~2011, the Company ~~increased its unrecognized~~reached a settlement with the Internal Revenue Service (“IRS”) related to the examination of the tax ~~benefits for issues in prior~~ years ~~as a result of certain ongoing examinations in both the United States~~2003 and ~~certain foreign jurisdictions. In addition, the Company released certain unrecognized tax benefits in certain foreign jurisdictions as~~2004. As a result of the ~~lapse~~settlement the Company paid approximately $22.4 million, inclusive of interest to the ~~statute of limitations for certain~~IRS and reversed the excess liabilities related to the settled tax years. During ~~2008,~~2010, the Company ~~favorably settled certain issues in foreign jurisdictions that resulted in~~reached a settlement with the ~~decrease in unrecognized~~IRS related to the examination of the tax ~~benefits. In addition, as~~years 2005 and 2006. As a result of the ~~currency fluctuations during 2008,~~settlement the ~~balance~~Company paid approximately $14.3 million, inclusive of ~~unrecognized~~interest, to the IRS and reversed the excess liabilities related to the settled tax ~~benefits decreased approximately $12.0 million.~~years. The ~~Internal Revenue Service (“IRS”)~~IRS is currently auditing the Company’s 2007 and 2008 pre and post merger periods. ~~The company is currently in appeals with~~In addition, the ~~IRS for the 2005~~Company effectively settled several state and ~~2006~~foreign tax ~~years. The Company expects to settle certain state~~ examinations during 2010 and 2011 that resulted in a reduction to our net tax liabilities to reflect the ~~next twelve months. The Company has reclassed~~tax benefits of the ~~estimated amount of such settlements to “Accrued expenses” on the Company’s consolidated balance sheets.~~settlements. Substantially all material state, local, and foreign income tax matters have been concluded for years through ~~2000.~~
2003.
NOTE ~~M —~~10 - SHAREHOLDERS’ EQUITY
~~In connection with the merger, the~~
The Company has issued approximately ~~23.6~~24.1 million shares of Class A common stock, approximately 0.6 million shares of Class B common stock and approximately 59.0 million shares of Class C common stock. Every holder of shares of Class A common stock is entitled to one vote for each share of Class A common stock. Every holder of shares of Class B common stock is entitled to a number of votes per share equal to the number obtained by dividing (a) the sum of the total number of shares of Class B common stock outstanding as of the record date for such vote and the number of shares of Class C common stock outstanding as of the record date for such vote by (b) the number of shares of Class B common stock outstanding as of the record date for such vote. Except as otherwise required by law, the holders of outstanding shares of Class C common stock are not entitled to any votes upon any matters presented to our stockholders.
Except with respect to voting as described above, and as otherwise required by law, all shares of Class A common stock, Class B common stock and Class C common stock have the same powers, privileges, preferences and relative participating, optional or other special rights, and the qualifications, limitations or restrictions thereof, and ~~will be~~are identical to each other in all respects.
~~123~~
Dividends
Vesting of certain Clear Channel stock options and restricted stock awards was accelerated upon closing of the merger. As a result, except for certain executive officers and holders of certain options that could not, by their terms, be cancelled prior to their stated expiration date, holders of stock options received cash or, if elected, an amount of Company stock, in each case equal to the intrinsic value of the awards based on a market price of $36.00 per share. Holders of restricted stock awards received $36.00 per share in cash or a share of Company stock per share of Clear Channel restricted stock. Approximately $39.2 million of share-based compensation was recognized in the pre-merger period as a result of the accelerated vesting of the stock options and restricted stock awards.
~~Dividends~~
Clear Channel did not declare dividends in ~~2008~~2011, 2010 or 2009. The Company has never paid cash dividends on its Class A common stock, and currently does not intend to pay cash dividends on its Class A common stock in the future. Clear Channel’s debt financing arrangements include restrictions on its ability to pay dividends thereby limiting the Company’s ability to pay dividends.
~~Prior to the merger, Clear Channel’s Board of Directors declared a quarterly cash dividend of $93.4 million on December 3, 2007 and paid on January 15, 2008.~~

Share-Based ~~Payments~~
Compensation
Stock Options
The Company has granted options to purchase its shares of Class A common stock to certain key executives under its equity incentive plan at no less than the fair value of the underlying stock on the date of grant. These options are granted for a term not to exceed ten years and are forfeited, except in certain circumstances, in the event the executive terminates his or her employment or relationship with the Company or one of its affiliates. Approximately one-third of the options granted vest based solely on continued service over a period of up to five years with the remainder becoming eligible to vest over a period of up to five years if certain predetermined performance targets are met. The equity incentive plan contains antidilutive provisions that permit an adjustment of the number of shares of the Company’s common stock represented by each option for any change in capitalization.
The Company accounts for its share-based payments using the fair value recognition provisions of ASC 718-10. The fair value of the portion of options that vest based on continued service is estimated on the grant date using a Black-Scholes option-pricing model and the fair value of the remaining options which contain vesting provisions subject to service, market and performance conditions is estimated on the grant date using a Monte Carlo model. Expected volatilities were based on ~~implied volatilities from traded options on peer companies,~~ historical volatility on peer companies’ stock, ~~and other factors.~~including the Company, over the expected life of the options. The expected life of the options granted represents the period of time that the options granted are expected to be outstanding. The Company used historical data to estimate option exercises and employee terminations within the valuation model. The risk free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for periods equal to the expected life of the option. The following assumptions were used to calculate the fair value of these options:

2009 2008
Expected volatility 58% 58%
Expected life in years 5.5 – 7.5 5.5 –7.5
Risk-free interest rate 2.30% –3.26% 3.46% – 3.83%
Dividend yield 0% 0%
~~124~~
The following table presents a summary of the Company’s stock options outstanding at and stock option activity during the year ended December 31, 2009 (“Price” reflects the weighted average exercise price per share):

Weighted Average
Remaining Aggregate
(In thousands, except per share data) Options Price Contractual Term Intrinsic Value
Outstanding, January 1, 2009 7,751 $ 35.70
Granted⁽¹⁾
491 36.00
Exercised — n/a
Forfeited (1,797 ) 36.00
Expired (285 ) 46.01

Outstanding, December 31, 2009⁽²⁾
6,160 35.15 8.5 years $ 0

Exercisable 808 29.55 7.3 years 0
Expect to Vest 2,191 36.00 8.7 years 0
~~(1)~~ ~~The weighted average grant date fair value of options granted during the year ended December 31, 2009 was $0.12 per share.~~
~~(2)~~ Non-cash compensation expense has not been recorded with respect to 3.4 million shares as the vesting of these options is subject to performance conditions that have not yet been determined probable to meet.
~~A summary of the Company’s unvested options and changes during the year ended December 31, 2009 is presented below:~~

Weighted Average
Grant Date
(In thousands, except per share data) Options Fair Value
Unvested, January 1, 2009 7,354 $ 21.20
Granted 491 0.12
Vested (696 ) 6.38
Forfeited (1,797 ) 13.72

Unvested, December 31, 2009 5,352 19.29

~~Restricted Stock Awards~~
Prior to the merger, Clear Channel granted restricted stock awards to its employees and directors and its affiliates under its various equity incentive plans. These common shares held a legend which restricted their transferability for a term of up to five years and were forfeited, except in certain circumstances, in the event the employee or director terminated his or her employment or relationship with Clear Channel prior to the lapse of the restriction. Recipients of the restricted stock awards were entitled to all cash dividends as of the date the award was granted.
At July 30, 2008, there were 2,692,904 outstanding Clear Channel restricted stock awards held by Clear Channel’s employees and directors under Clear Channel’s equity incentive plans. Pursuant to the Merger Agreement, 1,876,315 of the Clear Channel restricted stock awards became fully vested and converted into the right to receive, with respect to each share of such restricted stock, a cash payment or equity in the Company equal to the value of $36.00 per share. The remaining 816,589 shares of Clear Channel restricted stock were converted on a one-for-one basis into restricted stock of the Company. These converted shares continue to vest in accordance with their original terms. Following the merger, Clear Channel restricted stock automatically ceased to exist and is no longer outstanding, and, following the receipt of the cash payment or equity, if any, described above, the holders thereof no longer have any rights with respect to Clear Channel restricted stock.
On July 30, 2008, the Company granted 555,556 shares of restricted stock to each its Chief Executive Officer and Chief Financial Officer under its 2008 Incentive Plan. The aggregate fair value of these awards was $40.0 million, based on the market value of a share of the Company’s Class A common stock on the grant date, or $36.00 per
~~125~~
share. These Class A common shares are subject to restrictions on their transferability, which lapse ratably over a term of five years and will be forfeited, except in certain circumstances, in the event the employee terminates his employment or relationship with the Company prior to the lapse of the restriction. The following table presents a summary of the Company’s restricted stock outstanding at and restricted stock activity during the year ended December 31, 2009 (“Price” reflects the weighted average share price at the date of grant):

(In thousands, except per share data) Awards Price
Outstanding January 1,2009 1,887 $ 36.00
Granted — n/a
Vested (restriction lapsed) (474 ) 36.00
Forfeited (36 ) 36.00

Outstanding, December 31, 2009 1,377 36.00

~~Subsidiary Share-Based Awards~~
~~Subsidiary Stock Options~~
The Company’s subsidiary, Clear Channel Outdoor Holdings, Inc. (“CCO”), grants options to purchase shares of its Class A common stock to its employees and directors and its affiliates under its equity incentive plan typically at no less than the fair market value of the underlying stock on the date of grant. These options are granted for a term not exceeding ten years and are forfeited, except in certain circumstances, in the event the employee or director terminates his or her employment or relationship with CCO or one of its affiliates. These options vest over a period of up to five years. The incentive stock plan contains anti-dilutive provisions that permit an adjustment of the number of shares of CCO’s common stock represented by each option for any change in capitalization.
Prior to CCO’s IPO, CCO did not have any compensation plans under which it granted stock awards to employees. However, Clear Channel had granted certain of CCO’s officers and other key employees, stock options to purchase shares of Clear Channel’s common stock under its own equity incentive plans. Concurrent with the closing of CCO’s IPO, all such outstanding options to purchase shares of Clear Channel’s common stock held by CCO employees were converted using an intrinsic value method into options to purchase shares of CCO Class A common stock.
The fair value of each option awarded on CCO common stock is estimated on the date of grant using a Black-Scholes option-pricing model. Expected volatilities are based on implied volatilities from traded options on CCO’s stock, historical volatility on CCO’s stock, and other factors. The expected life of options granted represents the period of time that options granted are expected to be outstanding. CCO uses historical data to estimate option exercises and employee terminations within the valuation model. CCO includes estimated forfeitures in its compensation cost and updates the estimated forfeiture rate through the final vesting date of awards. The risk free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for periods equal to the expected life of the option. The following assumptions were used to calculate the fair value of ~~CCO’s options on the date of grant:~~

Post-Merger Pre-Merger
Period from Period from
July 31 January 1
Year Ended through through Year Ended
December 31, December 31, July 30, December 31,
2009 2008 2008 2007
Expected volatility 58% n/a 27% 27%
Expected life in years 5.5 — 7.0 n/a 5.5 — 7.0 5.0 — 7.0
Risk-free interest rate 2.31% — 3.25% n/a 3.24% — 3.38% 4.76% — 4.89%
Dividend yield 0% n/a 0% 0%
~~126~~
these options:
CC MEDIA HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
   2011    2010    2009
Expected volatility
   67%    58%    58%
Expected life in years
   6.3 – 6.5    5.0 – 7.0    5.5 – 7.5
Risk-free interest rate
   1.22% – 2.37%    2.03% – 2.74%    2.30% – 3.26%
Dividend yield
   0%    0%    0%
The following table presents a summary of ~~CCO’s~~the Company’s stock options outstanding at and stock option activity during the year ended December 31, ~~2009 (“~~2011(“Price” reflects the weighted average exercise price per share):

Weighted
Average Aggregate
Remaining Intrinsic
(In thousands, except per share data) Options Price Contractual Term Value
Post-Merger

Outstanding, January 1, 2009 7,713 $ 22.03
Granted⁽¹⁾
2,388 5.92
Exercised⁽²⁾
— n/a
Forfeited (167 ) 17.37
Expired (894 ) 24.90

Outstanding, December 31, 2009 9,040 17.58 6.0 years $ 10,502

Exercisable 3,417 22.82 3.7 years 0
Expect to vest 5,061 14.66 7.4 years 9,095
(In thousands, except per share data)    Options Price    Weighted Average
Remaining
Contractual Term    Aggregate
Intrinsic Value
Outstanding, January 1, 2011
   6,320 $32.93
Granted⁽¹⁾
   2,948 17.32
Exercised
   —
Forfeited
   (3,824) 34.33
Expired
   (402) 36.00



Outstanding, December 31, 2011⁽²⁾
   5,042 22.49    8.2 years    $        —



Exercisable
   994 25.04    6.3 years              —
Expected to Vest
   2,050 25.05    8.8 years              —
(1) The weighted average grant date fair value of ~~CCO~~ options granted during the ~~post-merger year~~years ended December 31, 2011, 2010, and 2009 was ~~$3.38~~$2.69, $4.79, and $0.12 per share. The weighted average grant date fair value of CCO options granted during the pre-merger prior from January 1, 2008 through July 30, 2008 was $7.10 per share. The weighted average grant date fair value of CCO options granted during the pre-merger year ended December 31, 2007 was $11.05 per share.share, respectively.
(2) ~~No CCO~~Non-cash compensation expense has not been recorded with respect to 2.0 million shares as the vesting of these options exercised during the post-merger year ended December 31, 2009. Cash received from CCO option exercises during the pre-merger period from January 1, 2008 through July 30, 2008, was $4.3 million. Cash received from CCO option exercises during the pre-merger year ended December 31, 2007, was $10.8 million. The total intrinsic value of CCO options exercised during the pre-merger period from January 1, 2008 through July 30, 2008, was $0.7 million. The total intrinsic value of CCO options exercised during the pre-merger year ended December 31, 2007 was $2.0 million.is subject to performance conditions that have not yet been determined probable to meet.
A summary of ~~CCO’s nonvested~~the Company’s unvested options at and changes during the year ended December 31, ~~2009, is~~2011is presented below:

Weighted Average
(In thousands, except per share data) Options Grant Date Fair Value
Nonvested, January 1, 2009 4,734 $ 7.40
Granted 2,388 3.38
Vested⁽¹⁾
(1,332 ) 7.43
Forfeited (167 ) 6.43

Nonvested, December 31, 2009 5,623 5.71

(In thousands, except per share data)    Options Weighted Average
Grant Date
Fair Value
Unvested, January 1, 2011
   5,234 $    18.32
Granted
   2,948         2.69
Vested⁽¹⁾
   (310)       12.11
Forfeited
   (3,824)       18.65


Unvested, December 31, 2011
   4,048         7.10


(1) The total fair value of ~~CCO~~the options vested during the ~~post-merger year~~years ended December 31, 2011, 2010 and 2009 was $9.9 million. The total fair value of CCO options vested during the pre-merger period from January 1, 2008 through July 30, 2008 was $5.7 million. The total fair value of CCO options vested during the post-merger period from July 31 through December 31, 2008 was $2.3 million. The total fair value of CCO options vested during the pre-merger year ended December 31, 2007 was $2.0 million.$3.8 million, $4.5 million and $4.4 million, respectively.
Restricted Stock Awards
~~CCO also grants~~
The Company has granted restricted stock awards to its employees and ~~directors of CCO and~~affiliates under its ~~affiliates.~~equity incentive plan. These common shares ~~hold a legend which restricts their~~are restricted in transferability for a term of up to five years and are forfeited, except in certain circumstances, in the event the employee ~~terminates~~terminated his or her employment or relationship with ~~CCO~~the Company prior to the lapse of the restriction. ~~Restricted~~Recipients of the restricted stock awards ~~are granted under~~were entitled to all cash dividends as of the ~~CCO equity incentive plan.~~
~~127~~
date the award was granted.
CC MEDIA HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

The following table presents a summary of ~~CCO’s~~the Company’s restricted stock outstanding at and restricted stock activity during the year ended December 31, ~~2009~~2011 (“Price” reflects the weighted average share price at the date of grant):

(In thousands, except per share data) Awards Price
Post-Merger

Outstanding, January 1, 2009 351 $ 24.54
Granted 150 9.03
Vested (restriction lapsed) (122 ) 24.90
Forfeited (14 ) 22.11

Outstanding, December 31, 2009 365 18.14

(In thousands, except per share data)
   Awards Price
Outstanding January 1, 2011
             895     $36.00
Granted
            —
Vested (restriction lapsed)
        (438) 36.00
Forfeited
           (12) 36.00


Outstanding, December 31, 2011
           445 36.00


CCOH Share-Based Awards
CCOH Stock Options
The Company’s subsidiary, CCOH, has granted options to purchase shares of its Class A common stock to employees and directors of CCOH and its affiliates under its equity incentive plan at no less than the fair market value of the underlying stock on the date of grant. These options are granted for a term not exceeding ten years and are forfeited, except in certain circumstances, in the event the employee or director terminates his or her employment or relationship with CCOH or one of its affiliates. These options vest solely on continued service over a period of up to five years. The equity incentive stock plan contains anti-dilutive provisions that permit an adjustment of the number of shares of CCOH’s common stock represented by each option for any change in capitalization.
The fair value of each option awarded on CCOH common stock is estimated on the date of grant using a Black-Scholes option-pricing model. Expected volatilities are based on historical volatility of CCOH’s stock over the expected life of the options. The expected life of options granted represents the period of time that options granted are expected to be outstanding. CCOH uses historical data to estimate option exercises and employee terminations within the valuation model. CCOH includes estimated forfeitures in its compensation cost and updates the estimated forfeiture rate through the final vesting date of awards. The risk free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for periods equal to the expected life of the option. The following assumptions were used to calculate the fair value of CCOH’s options on the date of grant:
   Years Ended December 31,
   2011    2010    2009
Expected volatility
   57%    58%    58%
Expected life in years
   6.3    5.5 – 7.0    5.5 – 7.0
Risk-free interest rate
   1.26% – 2.75%    1.38% – 3.31%    2.31% – 3.25%
Dividend yield
   0%    0%    0%
The following table presents a summary of CCOH’s stock options outstanding at and stock option activity during the year ended December 31, 2011(“Price” reflects the weighted average exercise price per share):
(In thousands, except per share data)    Options    Price    Weighted
Average
Remaining
Contractual Term    Aggregate
Intrinsic
Value
Outstanding, January 1, 2011
   9,041         $ 15.55
Granted⁽¹⁾
   1,908         14.69
Exercised⁽²⁾
   (220)         6.39
Forfeited
   (834)         11.71
Expired
   (904)         24.08



Outstanding, December 31, 2011
   8,991         15.10       6.0 years    $ 14,615



Exercisable
   4,998         17.64       4.3 years    5,725
Expected to Vest
   3,638         11.88       8.2 years    8,320
(1) The weighted average grant date fair value of CCOH options granted during the years ended December 31, 2011, 2010 and 2009 was $8.30, $5.65 and $3.38 per share, respectively.
CC MEDIA HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(2) Cash received from option exercises during the years ended December 31, 2011 and 2010 was $1.4 million and $0.9 million, respectively. The total intrinsic value of the options exercised during the years ended December 31, 2011 and 2010 was $1.5 million and $1.1 million, respectively. No options were exercised during the year ended December 31, 2009.
A summary of CCOH’s unvested options at and changes during the year ended December 31, 2011 is presented below:
(In thousands, except per share data)    Options    Weighted
Average
Grant Date
Fair Value
Unvested, January 1, 2011
   4,389         $5.31
Granted
   1,908           8.30
Vested⁽¹⁾
   (1,470)           5.59
Forfeited
   (834)           6.15



Unvested, December 31, 2011
   3,993           6.41



(1) The total fair value of CCOH options vested during the years ended December 31, 2011, 2010 and 2009 was $8.2 million, $15.9 million and $9.9 million, respectively.
Restricted Stock Awards
CCOH has also granted both restricted stock and restricted stock unit awards to its employees and affiliates under its equity incentive plan. The restricted stock awards represent shares of Class A common stock that hold a legend which restricts their transferability for a term of up to five years. The restricted stock units represent the right to receive shares upon vesting, which is generally over a period of up to five years. Both restricted stock awards and restricted stock units are forfeited, except in certain circumstances, in the event the employee terminates his or her employment or relationship with CCOH prior to the lapse of the restriction.
The following table presents a summary of CCOH’s restricted stock and restricted stock units outstanding at and activity during the year ended December 31, 2011 (“Price” reflects the weighted average share price at the date of grant):
(In thousands, except per share data)
   Awards    Price
Outstanding, January 1, 2011
   180         $ 15.36
Granted
   —
Vested (restriction lapsed)
   (88)         19.44
Forfeited
   (9)         29.03



Outstanding, December 31, 2011
   83         8.69



Share-Based Compensation Cost
The share-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as expense on a straight-line basis over the vesting period. The following table presents the amount of share-based compensation recorded during the ~~year~~years ended December 31, ~~2009, five months~~2011, 2010 and 2009:

(In thousands)    Years Ended December 31,
   2011    2010    2009
Direct operating expenses
     $   10,013           $   11,996           $   11,361
Selling, general &administrative expenses
   5,359         7,109         7,304
Corporate expenses
   5,295         15,141         21,121






Total share based compensation expense
     $   20,667           $   34,246           $   39,786






The tax benefit related to the share-based compensation expense for the years ended December 31, ~~2008, the seven months ended July 30, 2008~~2011, 2010, and ~~the year ended December 31, 2007:~~

Post-Merger Pre-Merger
Year Ended July 31 - January 1 - Year Ended
December 31, December July 30, December
(In thousands) 2009 31, 2008 2008 31, 2007
Direct operating expenses $ 11,361 $ 4,631 $ 21,162 $ 16,975
Selling, general & administrative expenses 7,304 2,687 21,213 14,884
Corporate expenses 21,121 8,593 20,348 12,192

Total share based compensation expense $ 39,786 $ 15,911 $ 62,723 $ 44,051

2009 was $7.9 million, $13.0 million, and $15.1 million, respectively.
CC MEDIA HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
As of December 31, ~~2009,~~2011, there was ~~$83.9~~$42.8 million of unrecognized compensation cost, net of estimated forfeitures, related to unvested share-based compensation arrangements that will vest based on service conditions. This cost is expected to be recognized over ~~three~~two years. In addition, as of December 31, ~~2009,~~2011, there was ~~$80.2~~$15.2 million of unrecognized compensation cost, net of estimated forfeitures, related to unvested share-based compensation arrangements that will vest based on market, performance and service conditions. This cost will be recognized when it becomes probable that the performance condition will be satisfied.
~~128~~
Included in corporate share-based compensation for the year ended December 31, 2011 is a $6.6 million reversal of expense related to the cancellation of a portion of an executive’s stock options. Additionally, the Company completed a voluntary stock option exchange program on March 21, 2011 and exchanged 2.5 million stock options granted under the Clear Channel 2008 Executive Incentive Plan for 1.3 million replacement stock options with a lower exercise price and different service and performance conditions. The Company accounted for the exchange program as a modification of the existing awards under ASC 718 and will recognize incremental compensation expense of approximately $1.0 million over the service period of the new awards.
During the year ended December 31, 2010, the Company recorded additional share-based compensation expense of $6.0 million in “Corporate expenses” related to shares tendered by Mark P. Mays to the Company on August 23, 2010 for purchase at $36.00 per share pursuant to a put option included in his amended employment agreement.
Reconciliation of ~~Earnings (Loss)~~Loss per Share

Post-Merger Pre-Merger
Period from Period from
Year ended July 31 through January 1 Year ended
December 31, December 31, through July 30, December
(In thousands, except per share data) 2009 2008 2008 31, 2007
NUMERATOR:
Income (loss) before discontinued operations attributable to the Company — common shares $ (4,034,086 ) $ (5,041,998 ) $ 1,036,525 $ 938,507
Less: Participating securities dividends 6,799 — — —
Less: Income (loss) from discontinued operations, net — (1,845 ) 640,236 145,833

Net income (loss) from continuing operations attributable to the Company (4,040,885 ) (5,040,153 ) 396,289 792,674
Less: Income (loss) before discontinued operations attributable to the Company — unvested shares — — 2,333 4,786

Net income (loss) before discontinued operations attributable to the Company per common share — basic and diluted $ (4,040,885 ) $ (5,040,153 ) $ 393,956 $ 787,888

DENOMINATOR:
Weighted average common shares — basic 81,296 81,242 495,044 494,347

Effect of dilutive securities:
Stock options and common stock warrants (1) — — 1,475 1,437

Denominator for net income (loss) per common share — diluted 81,296 81,242 496,519 495,784

Net income (loss) per common share:
Income (loss) attributable to the Company before discontinued operations — basic $ (49.71 ) $ (62.04 ) $ .80 $ 1.59
Discontinued operations — basic — (.02 ) 1.29 .30

Net income (loss) attributable to the Company — basic $ (49.71 ) $ (62.06 ) $ 2.09 $ 1.89

Income (loss) attributable to the Company before discontinued operations — diluted $ (49.71 ) $ (62.04 ) $ .80 $ 1.59
Discontinued operations — diluted — (.02 ) 1.29 .29

Net income (loss) attributable to the Company — diluted $ (49.71 ) $ (62.06 ) $ 2.09 $ 1.88

(In thousands, except per share data)    Years Ended December 31,
   2011    2010    2009
NUMERATOR:

Net loss attributable to the Company – common shares
     $   (302,094)           $   (479,089)           $   (4,034,086)
Less: Participating securities dividends
   2,972         5,916         6,799
Less: Income (loss) attributable to the Company – unvested shares
   —         —         —






Net loss attributable to the Company per common share – basic and diluted
     $   (305,066)           $   (485,005)           $   (4,040,885)






DENOMINATOR:

Weighted average common shares outstanding - basic
   82,487         81,653         81,296
Effect of dilutive securities:

Stock options and common stock warrants⁽¹⁾
   —         —         —






Weighted average common shares outstanding - diluted
   82,487         81,653         81,296






Net loss attributable to the Company per common share:

Basic
     $   (3.70)           $   (5.94)           $   (49.71)
Diluted
     $   (3.70)           $   (5.94)           $ (49.71)
(1) ~~6.2~~5.5 million, 7.2 million and 7.6 million ~~7.8 million,~~stock options and ~~22.2 million stock options~~restricted shares were outstanding at December 31, 2011, 2010, and 2009, ~~July 30, 2008, December 31, 2008, and December 31, 2007~~respectively, that were not included in the computation of diluted earnings per share because to do so would have been anti-dilutive as the respective options’ strike price was greater than the current market price of the shares.
~~129~~
NOTE ~~N —~~11 – EMPLOYEE STOCK AND SAVINGS PLANS
The Company has various 401(k) savings and other plans for the purpose of providing retirement benefits for substantially all employees. Under these plans, an employee can make pre-tax contributions and the Company will match a portion of such an employee’s contribution. Employees vest in these Company matching contributions based upon their years of service to the Company. Contributions ~~from continuing operations~~of $27.8 million, $29.8 million and $23.0 million to these plans ~~of $23.0 million~~ for the ~~year~~years ended December 31, 2011, 2010 and 2009, ~~$12.4 million for~~respectively, were expensed. The Company suspended the post-merger period ended December 31, 2008 and $17.9 million for the pre-merger period ended July 30, 2008, were charged to expense. Contributions from continuing operations to these plans of $39.1 million were charged to expense for the year ended December 31, 2007. Asmatching contribution as of April 30, 2009 ~~the Company suspended~~and reinstated the matching ~~contribution.~~
~~Clear Channel sponsored a non-qualified employee stock purchase plan for all eligible employees. Under the plan, employees were provided with the opportunity~~contribution effective April 1, 2010 retroactive to purchase shares of the Clear Channel’s common stock at 95% of the market value on the day of purchase. During each calendar year, employees were able to purchase shares having a value not exceeding 10% of their annual gross compensation or $25,000, whichever was lower. The Company stopped accepting contributions to this plan, effective January 1, 2007, as a condition of its Merger Agreement. Clear Channel terminated this plan upon the closing of the merger and each share held under the plan was converted into the right to receive a cash payment equal to the value of $36.00 per share.
Clear Channel offered a non-qualified deferred compensation plan for its highly compensated executives, under which such executives were able to make an annual election to defer up to 50% of their annual salary and up to 80% of their bonus before taxes. Clear Channel accounted for the plan in accordance with the provisions of ASC 710-10,~~Compensation—General~~~~. Clear Channel terminated this plan upon the closing of the merger and the related asset and liability of approximately $38.4 million were settled.~~
2010.
The Company offers a non-qualified deferred compensation plan for its highly compensated executives, under which such executives are able to make an annual election to defer up to 50% of their annual salary and up to 80% of their bonus before taxes. The Company accounts for the plan in accordance with the provisions of ASC 710-10. Matching credits on amounts deferred may be made in the Company’s sole discretion and the Company retains ownership of all assets until distributed. Participants in the plan have the opportunity to allocate their deferrals and any Company matching credits among different investment options, the performance of which is used to determine the amounts to be paid to participants under the plan. In accordance with the provisions of ASC 710-10, the assets and liabilities of the non-qualified deferred compensation plan are
CC MEDIA HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
presented in “Other assets” and “Other long-term liabilities” in the accompanying consolidated balance sheets, respectively. The asset and liability under the deferred compensation plan at December 31, ~~2009~~2011 was approximately ~~$9.9~~$10.5 million recorded in “Other assets” and ~~$9.9~~$10.5 million recorded in “Other long-term liabilities”, respectively. The asset and liability under the deferred compensation plan at December 31, ~~2008 were~~2010 was approximately ~~$2.5~~$11.3 million recorded in “Other assets” and ~~$2.5~~$11.3 million recorded in “Other long-term liabilities”, respectively.

NOTE ~~O —~~12 – OTHER INFORMATION

Post-Merger Pre-Merger
Period from Period from
Year ended July 31 through January 1 Year ended
December 31, December 31, through July 30, December 31,
(In thousands) 2009 2008 2008 2007
The following details the components of “Other income (expense) — net”:
Foreign exchange gain (loss) $ (15,298 ) $ 21,323 $ 7,960 $ 6,743
Gain (loss) on early redemption of debt, net 713,034 108,174 (13,484 ) —
Other (18,020 ) 2,008 412 (1,417 )

Total other income (expense) — net $ 679,716 $ 131,505 $ (5,112 ) $ 5,326

~~130~~
The following table discloses the components of “Other income (expense)” for the years ended December 31, 2011, 2010 and 2009, respectively:
(In thousands)    Years Ended December 31,
   2011    2010    2009
Foreign exchange gain (loss)
     $   (234)           $   (12,783)           $   (15,298)
Gain (loss) on debt extinguishment
   (1,447)         60,289         713,034
Other
   (2,935)         (1,051)         (18,020)






Total other income (expense) – net
     $   (4,616)           $   46,455           $   679,716






The following table discloses the deferred income tax (asset) liability related to each component of other comprehensive income (loss) for the years ended December 31, 2011, 2010 and 2009, respectively:

Post-Merger Pre-Merger
Period from
July 31 Period from
Year ended through January 1 Year ended
December 31, December 31, through July 30, December 31,
(In thousands) 2009 2008 2008 2007
The following details the deferred income tax (asset) liability on items of other comprehensive income (loss):
Foreign currency translation adjustments $ 16,569 $ (20,946 ) $ (24,894 ) $ (16,233 )
Unrealized gain (loss) on securities and derivatives:
Unrealized holding gain (loss) $ 6,743 $ — $ (27,047 ) $ (5,155 )
Unrealized gain (loss) on cash flow derivatives $ (44,350 ) $ (43,706 ) $ — $ (1,035 )

Post-Merger
As of December 31,
(In thousands) 2009 2008
The following details the components of “Other current assets”:
Inventory $ 25,838 $ 28,012
Deferred tax asset 19,581 43,903
Deposits 20,064 7,162
Other prepayments 51,700 53,280
Deferred loan costs 55,479 29,877
Other 82,613 53,339

Total other current assets $ 255,275 $ 215,573

Post-Merger
As of December 31,
(In thousands) 2009 2008
The following details the components of “Other assets”:
Prepaid expenses $ 988 $ 125,768
Deferred loan costs 251,938 295,143
Deposits 11,225 27,943
Prepaid rent 87,960 92,171
Other prepayments 16,028 16,685
Non-qualified plan assets 9,919 2,550

Total other assets $ 378,058 $ 560,260

Post-Merger
As of December 31,
(In thousands) 2009 2008
The following details the components of “Other long-term liabilities”:
Unrecognized tax benefits $ 301,496 $ 266,852
Asset retirement obligation 51,301 55,592
Non-qualified plan liabilities 9,919 2,550
Interest rate swap 237,235 118,785
Deferred income 17,105 9,346
Other 207,498 122,614

Total other long-term liabilities $ 824,554 $ 575,739

(In thousands)    Years Ended December 31,
   2011    2010    2009
Foreign currency translation adjustments
     $   (449)           $   5,916           $   16,569
Unrealized holding gain on marketable securities
   2,667           14,475         6,743
Unrealized holding gain (loss) on cash flow derivatives
   20,157           9,067         (44,350)






Total income tax benefit (expense)
     $   22,375           $   29,458           $   (21,038)






~~131~~
The following table discloses the components of “Other current assets” as of December 31, 2011 and 2010, respectively:
(In thousands)    As of December 31,
   2011    2010
Inventory
     $   21,157           $   22,517
Deferred tax asset
   16,573         25,724
Deposits
   15,167         30,966
Deferred loan costs
   53,672         50,133
Other
   84,043         54,913




Total other current assets
     $   190,612           $   184,253




The following table discloses the components of “Other assets” as of December 31, 2011 and 2010, respectively:
(In thousands)    As of December 31,
   2011    2010
Investments in, and advances to, nonconsolidated affiliates
     $   359,687           $   357,751
Other investments
   77,766         75,332
Notes receivable
   512         761
Prepaid expenses
   600         794
Deferred loan costs
   188,823         204,772
Deposits
   17,790         13,804
Prepaid rent
   79,244         79,683
Other
   36,917         21,723
Non-qualified plan assets
   10,539         11,319




Total other assets
     $   771,878           $   765,939




CC MEDIA HOLDINGS, INC. AND SUBSIDIARIES

Post-Merger
As of December 31,
(In thousands) 2009 2008
The following details the components of “Accumulated other comprehensive income (loss)”:
Cumulative currency translation adjustment $ (202,529 ) $ (332,750 )
Cumulative unrealized gain (losses) on securities (85,995 ) (88,813 )
Reclassification adjustments 104,394 95,113
Cumulative unrealized gain (losses) on cash flow derivatives (149,179 ) (75,079 )

Total accumulated other comprehensive income (loss) $ (333,309 ) $ (401,529 )

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
The following table discloses the components of “Other long-term liabilities” as of December 31, 2011 and 2010, respectively:
$000,000,00 $000,000,00
(In thousands)    As of December 31,
   2011    2010
Unrecognized tax benefits
     $ 212,672            $ 269,347
Asset retirement obligation
   50,983          52,099
Non-qualified plan liabilities
   10,539          11,319
Interest rate swap
   159,124          213,056
Deferred income
   15,246          13,408
Redeemable noncontrolling interest
   57,855          57,765
Deferred rent
   81,599          61,650
Employee related liabilities
   40,145          34,551
Other
   79,725          63,481




Total other long-term liabilities
     $ 707,888            $ 776,676




The following table discloses the components of “Accumulated other comprehensive loss,” net of tax, as of December 31, 2011 and 2010, respectively:
$000,000,00 $000,000,00
(In thousands)    As of December 31,
   2011    2010
Cumulative currency translation adjustment
     $ (212,761)           $ (179,639)
Cumulative unrealized gain (losses) on securities
   41,302          36,698
Cumulative other adjustments
   5,708          8,192
Cumulative unrealized gain (losses) on cash flow derivatives
   (100,292)         (134,067)




Total accumulated other comprehensive loss
     $ (266,043)           $ (268,816)




NOTE ~~P —~~13 – SEGMENT DATA
The Company’s reportable ~~operating~~ segments, which it believes best ~~reflects~~reflect how the Company is currently managed, are ~~radio broadcasting,~~CCME, Americas outdoor advertising and ~~international~~International outdoor advertising. Revenue and expenses earned and charged between segments are recorded at fair value and eliminated in consolidation. The ~~radio broadcasting~~CCME segment provides media and entertainment services via broadcast and digital delivery and also ~~operates various radio networks.~~includes the Company’s national syndication business. The Americas outdoor advertising segment consists of ~~our~~ operations primarily in the United States, Canada and Latin America, with approximately ~~91%~~89% of its ~~2009~~2011 revenue in this segment derived from the United States. The international outdoor segment primarily includes operations in Europe, ~~the U.K.,~~ Asia and Australia. The Americas outdoor and ~~international~~International outdoor display inventory consists primarily of billboards, street furniture displays and transit displays. The ~~other~~Other category includes ~~our~~the Company’s media representation firm as well as other general support services and initiatives which are ancillary to ~~our~~the Company’s other businesses. Corporate includes infrastructure and support including, information technology, human resources, legal, finance and administrative functions of each of the Company’s operating segments, as well as overall executive, administrative and support functions. Share-based payments are recorded by each segment in direct operating and selling, general and administrative expenses.

Corporate
Americas International and other
Radio Outdoor Outdoor reconciling
(In thousands) Broadcasting Advertising Advertising Other items Eliminations Consolidated
Post-Merger Year Ended December 31, 2009
Revenue $ 2,736,404 $ 1,238,171 $ 1,459,853 $ 200,467 $ — $ (82,986 ) $ 5,551,909
Direct operating expenses 901,799 608,078 1,017,005 98,829 — (42,448 ) 2,583,263
Selling, general and administrative expenses 933,505 202,196 282,208 89,222 — (40,538 ) 1,466,593
Depreciation and amortization 261,246 210,280 229,367 56,379 8,202 — 765,474
Corporate expenses — — — — 253,964 — 253,964
Impairment charges — — — — 4,118,924 — 4,118,924
Other operating expense — net — — — — (50,837 ) — (50,837 )

Operating income (loss) $ 639,854 $ 217,617 $ (68,727 ) $ (43,963 ) $ (4,431,927 ) $ — $ (3,687,146 )

Intersegment revenues $ 31,974 $ 2,767 $ — $ 48,245 $ — $ — $ 82,986
Identifiable assets $ 8,601,490 $ 4,722,975 $ 2,216,691 $ 771,346 $ 1,734,599 $ — $ 18,047,101
Capital expenditures $ 41,880 $ 84,440 $ 91,513 $ 322 $ 5,637 $ — $ 223,792
Share-based payments $ 8,276 $ 7,977 $ 2,412 $ — $ 21,121 $ — $ 39,786
~~132~~
CC MEDIA HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Corporate
Americas International and other
Radio Outdoor Outdoor reconciling
(In thousands) Broadcasting Advertising Advertising Other items Eliminations Consolidated
Post-Merger Period from July 31, 2008 through December 31, 2008
Revenue $ 1,355,894 $ 587,427 $ 739,797 $ 97,975 $ — $ (44,152 ) $ 2,736,941
Direct operating expenses 409,090 276,602 486,102 46,193 — (19,642 ) 1,198,345
Selling, general and administrative expenses 530,445 114,260 147,264 39,328 — (24,510 ) 806,787
Depreciation and amortization 90,166 90,624 134,089 24,722 8,440 — 348,041
Corporate expenses — — — — 102,276 — 102,276
Merger expenses — — — — 68,085 — 68,085
Impairment charges — — — — 5,268,858 — 5,268,858
Other operating income — net — — — — 13,205 — 13,205

Operating income (loss) $ 326,193 $ 105,941 $ (27,658 ) $ (12,268 ) $ (5,434,454 ) $ — $ (5,042,246 )

Intersegment revenues $ 15,926 $ 3,985 $ — $ 24,241 $ — $ — $ 44,152
Identifiable assets $ 11,905,689 $ 5,187,838 $ 2,409,652 $ 1,016,073 $ 606,211 $ — $ 21,125,463
Capital expenditures $ 24,462 $ 93,146 $ 66,067 $ 2,567 $ 4,011 $ — $ 190,253
Share-based payments $ 3,399 $ 3,012 $ 797 $ 110 $ 8,593 $ — $ 15,911

Pre-Merger Period from January 1, 2008 through July 30, 2008
Revenue $ 1,937,980 $ 842,831 $ 1,119,232 $ 111,990 $ — $ (60,291 ) $ 3,951,742
Direct operating expenses 570,234 370,924 748,508 46,490 — (30,057 ) 1,706,099
Selling, general and administrative expenses 652,162 138,629 206,217 55,685 — (30,234 ) 1,022,459
Depreciation and amortization 62,656 117,009 130,628 28,966 9,530 — 348,789
Corporate expenses — — — — 125,669 — 125,669
Merger expenses — — — — 87,684 — 87,684
Other operating income — net — — — — 14,827 — 14,827

Operating income (loss) $ 652,928 $ 216,269 $ 33,879 $ (19,151 ) $ (208,056 ) $ — $ 675,869

Intersegment revenues $ 23,551 $ 4,561 $ — $ 32,179 $ — $ — $ 60,291
Identifiable assets $ 11,667,570 $ 2,876,051 $ 2,704,889 $ 558,638 $ 656,616 $ — $ 18,463,764
Capital expenditures $ 37,004 $ 82,672 $ 116,450 $ 1,609 $ 2,467 $ — $ 240,202
Share-based payments $ 34,386 $ 5,453 $ 1,370 $ 1,166 $ 20,348 $ — $ 62,723
~~133~~
The following table presents the Company’s operating segment results for the years ended December 31, 2011, 2010 and 2009.
(In thousands)    CCME    Americas
Outdoor
Advertising    International
Outdoor
Advertising    Other    Corporate and
other
reconciling
items    Eliminations    Consolidated
Year Ended December 31, 2011

Revenue
   $ 2,986,828         $ 1,336,592         $ 1,667,282         $ 234,542         $ —         $ (63,892)       $ 6,161,352
Direct operating expenses
   849,265         607,210         1,031,591         27,807         —         (11,837)       2,504,036
Selling, general and administrative expenses
   980,960         225,217         315,655         147,481         —         (52,055)       1,617,258
Depreciation and amortization
   268,245         222,554         208,410         49,827         14,270         —         763,306
Corporate expenses
   —         —         —         —         227,096         —         227,096
Impairment charges
   —         —         —         —         7,614         —         7,614
Other operating income – net
   —         —         —         —         12,682         —         12,682














Operating income (loss)
   $ 888,358         $ 281,611         $ 111,626         $ 9,427         $ (236,298)       $ —         $ 1,054,724














Intersegment revenues
   $ —         $ 4,141         $ —         $ 59,751         $ —         $ —         $ 63,892
Segment assets
   $ 8,364,246         $ 4,036,584         $ 2,015,687         $ 809,212         $ 1,316,310         $ —         $ 16,542,039
Capital expenditures
   $ 61,434         $ 132,770         $ 159,973         $ —         $ 9,797         $ —         $ 363,974
Share-based compensation expense
   $ 4,606         $ 7,601         $ 3,165         $ —         $ 5,295         $ —         $ 20,667
Year Ended December 31, 2010

Revenue
   $ 2,869,224         $ 1,290,014         $ 1,507,980         $ 261,461       $ —         $ (62,994)       $ 5,865,685
Direct operating expenses
   808,592         588,592         971,380         27,953       —         (14,870)       2,381,647
Selling, general and administrative expenses
   963,853         218,776         275,880         159,827       —         (48,124)       1,570,212
Depreciation and amortization
   256,673         209,127         204,461         52,965       9,643         —         732,869
Corporate expenses
   —         —         —         —         284,042         —         284,042
Impairment charges
   —         —         —         —         15,364         —         15,364
Other operating expense – net
   —         —         —         —         (16,710)       —         (16,710)














Operating income (loss)
   $ 840,106         $ 273,519         $ 56,259       $ 20,716       $ (325,759)       $ —         $ 864,841














Intersegment revenues
   $ —         $ 4,173         $ —         $ 58,821       $ —         $ —         $ 62,994
Segment assets
   $ 8,411,953         $ 4,578,130         $ 2,059,892         $ 812,189       $ 1,598,218         $ —         $ 17,460,382
Capital expenditures
   $ 35,463         $ 96,720         $ 98,553         $ —         $ 10,728         $ —         $ 241,464
Share-based compensation expense
   $ 7,152         $ 9,207         $ 2,746         $ —         $ 15,141         $ —         $ 34,246
Year Ended December 31, 2009

Revenue
   $ 2,705,367         $ 1,238,171         $ 1,459,853         $ 200,467       $ —         $ (51,949)       $ 5,551,909
Direct operating expenses
   885,870         608,078         1,017,005         29,912       —         (11,411)       2,529,454
Selling, general and administrative expenses
   918,397         202,196         282,208         158,139       —         (40,538)       1,520,402
Depreciation and amortization
   261,246         210,280         229,367         56,379       8,202         —         765,474
Corporate expenses
   —         —         —         —         253,964         —         253,964
Impairment charges
   —         —         —         —         4,118,924         —         4,118,924
Other operating expense – net
   —         —         —         —         (50,837)       —         (50,837)














Operating income (loss)
   $ 639,854         $ 217,617         $ (68,727)       $ (43,963)       $ (4,431,927)       $ —         $ (3,687,146)














Intersegment revenues
   $ 937         $ 2,767         $ —         $ 48,245       $ —         $ —         $ 51,949
Segment assets
   $ 8,601,490         $ 4,722,975         $ 2,216,691         $ 771,346       $ 1,734,599         $ —         $ 18,047,101
Capital expenditures
   $ 41,880         $ 84,440         $ 91,513         $ —         $ 5,959         $ —         $ 223,792
Share-based compensation expense
   $ 8,276         $ 7,977         $ 2,412         $ —         $ 21,121         $ —         $ 39,786
CC MEDIA HOLDINGS, INC. AND SUBSIDIARIES

Corporate
Americas International and other
Radio Outdoor Outdoor reconciling
(In thousands) Broadcasting Advertising Advertising Other items Eliminations Consolidated
Pre-Merger Year Ended December 31, 2007
Revenue $ 3,558,534 $ 1,485,058 $ 1,796,778 $ 207,704 $ — $ (126,872 ) $ 6,921,202
Direct operating expenses 982,966 590,563 1,144,282 78,513 — (63,320 ) 2,733,004
Selling, general and administrative expenses 1,190,083 226,448 311,546 97,414 — (63,552 ) 1,761,939
Depreciation and amortization 107,466 189,853 209,630 43,436 16,242 — 566,627
Corporate expenses — — — — 181,504 — 181,504
Merger expenses — — — — 6,762 — 6,762
Other operating income — net — — — — 14,113 — 14,113

Operating income (loss) $ 1,278,019 $ 478,194 $ 131,320 $ (11,659 ) $ (190,395 ) $ — $ 1,685,479

Intersegment revenues $ 44,666 $ 13,733 $ — $ 68,473 $ — $ — $ 126,872
Identifiable assets $ 11,732,311 $ 2,878,753 $ 2,606,130 $ 736,037 $ 345,404 $ — $ 18,298,635
Capital expenditures $ 78,523 $ 142,826 $ 132,864 $ 2,418 $ 6,678 $ — $ 363,309
Share-based payments $ 22,226 $ 7,932 $ 1,701 $ — $ 12,192 $ — $ 44,051
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Revenue of ~~$1.6~~$1.8 billion, ~~$799.8 million, $1.2~~$1.7 billion and ~~$1.9~~$1.6 billion derived from the Company’s foreign operations are included in the data above for the ~~year~~years ended December 31, 2011, 2010 and 2009, respectively. Revenue of $4.3 billion, $4.2 billion and $4.0 billion derived from the ~~post-merger period from July 31, 2008 through December 31, 2008,~~Company’s U.S. operations are included in the ~~pre-merger period January 1, 2008 through July 30, 2008, and~~data above for the ~~pre-merger year~~years ended December 31, ~~2007,~~2011, 2010 and 2009, respectively.
Identifiable long-lived assets of ~~$2.5 billion, $2.6 billion, $2.9 billion,~~$797.7 million, $802.4 million and ~~$2.9 billion~~$863.8 million derived from the Company’s foreign operations are included in the data above for the ~~year~~years ended December 31, 2011, 2010 and 2009, respectively. Identifiable long-lived assets of $2.3 billion, $2.3 billion and $2.5 billion derived from the ~~post-merger five months~~Company’s U.S. operations are included in the data above for the years ended December 31, ~~2008, the pre-merger seven months ended July 30, 2008,~~2011, 2010 and ~~the pre-merger year ended December 31, 2007,~~2009, respectively.
~~134~~
NOTE ~~Q —~~14 – QUARTERLY RESULTS OF OPERATIONS (Unaudited)

March 31, June 30, September 30, December 31,
2009 2008 2009 2008 2009 2008 2009 2008
(In thousands, except per share data) Post-Merger Pre-Merger Post-Merger Pre-Merger Post-Merger Combined⁽³⁾ Post-Merger Post-Merger
Revenue $ 1,207,987 $ 1,564,207 $ 1,437,865 $ 1,831,078 $ 1,393,973 $ 1,684,593 $ 1,512,084 $ 1,608,805
Operating expenses:
Direct operating expenses 618,349 705,947 637,076 743,485 632,778 730,405 695,060 724,607
Selling, general and administrative expenses 377,536 426,381 360,558 445,734 337,055 441,813 391,444 515,318
Depreciation and amortization 175,559 152,278 208,246 142,188 190,189 162,463 191,480 239,901
Corporate expenses 47,635 46,303 50,087 47,974 79,723 64,787 76,519 68,881
Merger expenses — 389 — 7,456 — 79,839 — 68,085
Impairment charges⁽¹⁾
— — 4,041,252 — — — 77,672 5,268,858
Other operating income (expense) — net (2,894 ) 2,097 (31,516 ) 17,354 1,403 (3,782 ) (17,830 ) 12,363

Operating income (loss) (13,986 ) 235,006 (3,890,870 ) 461,595 155,631 201,504 62,079 (5,264,482 )
Interest expense 387,053 100,003 384,625 82,175 369,314 312,511 359,874 434,289
Gain (loss) on marketable securities — 6,526 — 27,736 (13,378 ) — 7 (116,552 )
Equity in earnings (loss) of nonconsolidated affiliates (4,188 ) 83,045 (17,719 ) 8,990 1,226 4,277 (8 ) 3,707
Other income (expense) — net (3,180 ) 11,787 430,629 (6,086 ) 222,282 (21,727 ) 29,985 142,419

Income (loss) before income taxes and discontinued operations (408,407 ) 236,361 (3,862,585 ) 410,060 (3,553 ) (128,457 ) (267,811 ) (5,669,197 )

Income tax (expense) benefit⁽²⁾
(19,592 ) (66,581 ) 184,552 (125,137 ) (89,118 ) 52,344 417,478 663,414

Income (loss) before discontinued operations (427,999 ) 169,780 (3,678,033 ) 284,923 (92,671 ) (76,113 ) 149,667 (5,005,783 )
Income (loss) from discontinued operations, net — 638,262 — 5,032 — (4,071 ) — (832 )

Consolidated net income (loss) (427,999 ) 808,042 (3,678,033 ) 289,955 (92,671 ) (80,184 ) 149,667 (5,006,615 )
Amount attributable to noncontrolling interest (9,782 ) 8,389 (4,629 ) 7,628 (2,816 ) 10,003 2,277 (9,349 )

Net income (loss) attributable to the Company $ (418,217 ) $ 799,653 $ (3,673,404 ) $ 282,327 $ (89,855 ) $ (90,187 ) $ 147,390 $ (4,997,266 )

~~135~~
(In thousands, except per share data)
$0,000,000,00 $0,000,000,00 $0,000,000,00 $0,000,000,00 $0,000,000,00 $0,000,000,00 $0,000,000,00 $0,000,000,00
   Three Months Ended
March 31,    Three Months Ended
June 30,    Three Months Ended
September 30,    Three Months Ended
December 31,
   2011    2010    2011    2010    2011    2010    2011    2010
Revenue
   $ 1,320,826       $ 1,263,778       $ 1,604,386       $ 1,490,009       $ 1,583,352       $ 1,477,347       $ 1,652,788       $ 1,634,551
Operating expenses:

Direct operating expenses
   584,069       584,213       630,015       584,852       654,163       583,301       635,789       629,281
Selling, general and administrative expenses
   372,710       362,430       420,436       392,701       402,160       378,794       421,952       436,287
Corporate expenses
   52,347       64,496       56,486       64,109       54,247       80,518       64,016       74,919
Depreciation and amortization
   183,711       181,334       189,641       184,178       197,532       184,079       192,422       183,278
Impairment charges
   —       —       —       —       —       —       7,614       15,364
Other operating income (expense) – net
   16,714       3,772       3,229       3,264       (6,490)       (29,559)       (771)       5,813
















Operating income
   144,703       75,077       311,037       267,433       268,760       221,096       330,224       301,235
Interest expense
   369,666       385,795       358,950       385,579       369,233       389,197       368,397       372,770
Loss on marketable securities
   —       —       —       —       —       —       (4,827)       (6,490)
Equity in earnings (loss) of nonconsolidated affiliates
   2,975       1,871       5,271       3,747       5,210       2,994       13,502       (2,910)
Other income (expense) – net
   (2,036)       58,035       (4,517)       (787)       7,307       (5,700)       (5,370)       (5,093)
















Loss before income taxes
   (224,024)       (250,812)       (47,159)       (115,186)       (87,956)       (170,807)       (34,868)       (86,028)
Income tax benefit
   92,661       71,185       9,184       37,979       20,665       20,415       3,468       30,401
















Consolidated net loss
   (131,363)       (179,627)       (37,975)       (77,207)       (67,291)       (150,392)       (31,400)       (55,627)
Less amount attributable to noncontrolling interest
   469       (4,213)       15,204       9,117       6,765       4,293       11,627       7,039
















Net loss attributable to the Company
   $ (131,832)       $ (175,414)       $ (53,179)       $ (86,324)       $ (74,056)       $ (154,685)       $ (43,027)       $ (62,666)
















Net loss attributable to the Company per common share:

Basic:
   $ (1.62)       $ (2.17)       $ (0.65)       $ (1.06)       $ (0.91)       $ (1.91)       $ (0.53)       $ (0.80)
Diluted:
   $ (1.62)       $ (2.17)       $ (0.65)       $ (1.06)       $ (0.91)       $ (1.91)       $ (0.53)       $ (0.80)
CC MEDIA HOLDINGS, INC. AND SUBSIDIARIES

March 31, June 30, September 30, December 31,
2009 2008 2009 2008 2009 2008 2009 2008
Post-Merger Pre-Merger Post-Merger Pre-Merger Post-Merger Combined⁽³⁾ Post-Merger Post-Merger
Net income per common share:
Basic:
Income (loss) attributable to the Company before discontinued operations $ (5.15 ) $ .33 $ (45.23 ) $ .56 $ (1.12 ) N.A. $ 1.71 $ (61.50 )
Discontinued operations — 1.29 — .01 — N.A. — (.01 )

Net income (loss) attributable to the Company $ (5.15 ) $ 1.62 $ (45.23 ) $ .57 $ (1.12 ) N.A. $ 1.71 $ (61.51 )

Diluted:
Income (loss) before discontinued operations $ (5.15 ) $ .32 $ (45.23 ) $ .56 $ (1.12 ) N.A. $ 1.71 $ (61.50 )
Discontinued operations — 1.29 — .01 — N.A. — (.01 )

Net income (loss) attributable to the Company $ (5.15 ) $ 1.61 $ (45.23 ) $ .57 $ (1.12 ) N.A. $ 1.71 $ (61.51 )

Dividends declared per share $ — $ — $ — $ — $ — $ — $ — $ —
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 15 – CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
The Company’s Class A common shares are quoted for trading on the OTC Bulletin Board under the symbol CCMO.
~~(1)~~ ~~As discussed in Note B, the fourth quarter of 2009 includes~~ Clear Channel is a ~~$41.4 million adjustment related to previously recorded impairment charges.~~
~~(2)~~ ~~See Note L for further discussion of the tax benefits recorded in the fourth quarters of 2009 and 2008.~~
~~(3)~~ The third quarter results of operations contain two months of post-merger and one month of pre-merger results, which relate to the period succeeding the merger and the periods preceding the merger, respectively. The Company believes that the presentation on a combined basis is more meaningful as it allows the results of operations to be analyzed to comparable periods in 2009. The following table separates the combined results into the post-merger and pre-merger periods:
~~136~~

Period from July 31
through Period from July 1 through Three Months ended
September 30, July 30, September 30,
2008 2008 2008
(In thousands) Post-Merger Pre-Merger Combined
Revenue $ 1,128,136 $ 556,457 $ 1,684,593
Operating expenses:
Direct operating expenses (excludes depreciation and amortization) 473,738 256,667 730,405
Selling, general and administrative expenses (excludes depreciation and amortization) 291,469 150,344 441,813
Depreciation and amortization 108,140 54,323 162,463
Corporate expenses (excludes depreciation and amortization) 33,395 31,392 64,787
Merger expenses — 79,839 79,839
Gain (loss) on disposition of assets — net 842 (4,624 ) (3,782 )

Operating income (loss) 222,236 (20,732 ) 201,504
Interest expense 281,479 31,032 312,511
Equity in earnings of nonconsolidated affiliates 2,097 2,180 4,277
Other income (expense) — net (10,914 ) (10,813 ) (21,727 )

Income (loss) before income taxes and discontinued operations (68,060 ) (60,397 ) (128,457 )
Income tax benefit 33,209 19,135 52,344

Income (loss) before discontinued operations (34,851 ) (41,262 ) (76,113 )
Income (loss) from discontinued operations, net (1,013 ) (3,058 ) (4,071 )

Consolidated net income (loss) (35,864 ) (44,320 ) (80,184 )
Amount attributable to noncontrolling interest 8,868 1,135 10,003

Net income (loss) attributable to the Company $ (44,732 ) $ (45,455 ) $ (90,187 )

Net income (loss) per common share:
Income (loss) attributable to the Company before discontinued operations — Basic $ (.54 ) $ (.09 )
Discontinued operations — Basic (.01 ) —

Net income (loss) attributable to the Company — Basic $ (.55 ) $ (.09 )

Weighted average common shares — Basic 81,242 495,465
Income (loss) attributable to the Company before discontinued operations — Diluted $ (.54 ) $ (.09 )
Discontinued operations — Diluted (.01 ) —

Net income (loss) attributable to the Company — Diluted $ (.55 ) $ (.09 )

Weighted average common shares — Diluted 81,242 495,465

Dividends declared per share $ — $ —
~~137~~
~~NOTE R — CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS~~
In connection with the merger, the Company paid certain affiliates of the Sponsors $87.5 million in fees and expenses for financial and structural advice and analysis, assistance with due diligence investigations and debt financing negotiations and $15.9 million for reimbursement of escrow and other out-of-pocket expenses. This amount was preliminarily allocated between merger expenses, debt issuance costs or included in the overall purchase price of the merger.
~~The Company is~~ party to a management agreement with certain affiliates of the Sponsors and certain other parties pursuant to which such affiliates of the Sponsors will provide management and financial advisory services until 2018. These agreements require management fees to be paid to such affiliates of the Sponsors for such services at a rate not greater than $15.0 million per ~~year.~~year, plus reimbursable expenses. For the ~~year~~years ended December 31, 2011, 2010 and 2009, the Company recognized management fees and reimbursable expenses of ~~$15.0. For~~$15.7 million, $17.1 million and $20.5 million, respectively.
As part of the ~~post-merger period ended December 31, 2008,~~employment agreement for the Company’s new Chief Executive Officer, the Company ~~recognized management fees~~agreed to provide the Chief Executive Officer an aircraft for his personal and business use during the term of ~~$6.3 million.~~
~~In addition,~~his employment. Subsequently, a subsidiary of the Company ~~reimbursed~~entered into a six-year aircraft lease with Yet Again Inc., a company controlled by the ~~Sponsors~~Chief Executive Officer, to lease an airplane for ~~additional expenses~~use by the Chief Executive Officer in exchange for a one-time upfront lease payment of $3.0 million. The Company’s subsidiary also is responsible for all related taxes, insurance, and maintenance costs during the lease term (other than discretionary upgrades, capital improvements or refurbishment). If the lease is terminated prior to the expiration of its term, Yet Again Inc. will be required to refund a pro rata portion of the lease payment and a pro rata portion of the tax associated with the amount of ~~$5.5~~the lease payment refunded, based upon the period remaining in the term.
Additionally, subsequent to December 31, 2011, Clear Channel is in the process of negotiating a sublease with Pilot Group Manager, LLC, an entity that the Company’s Chief Executive Officer is a member of and an investor in, to rent space in Rockefeller Plaza in New York City through July 29, 2014. Fixed rent is expected to be approximately $0.6 million annually plus a proportionate share of building expenses. Pending finalization of the sublease, Clear Channel reimbursed Pilot Group Manager, LLC $40,000 per month for the ~~year ended December 31, 2009.~~
~~NOTE S — SUBSEQUENT EVENTS~~
use of its office space in Rockefeller Plaza in New York City.
Stock Purchases
On ~~January 15,~~August 9, 2010, Clear Channel ~~redeemed~~announced that its ~~4.50% senior notes~~board of directors approved a stock purchase program under which Clear Channel or its subsidiaries may purchase up to an aggregate of $100 million of the Class A common stock of the Company and/or the Class A common stock of CCOH. The stock purchase program does not have a fixed expiration date and may be modified, suspended or terminated at ~~their maturity~~any time at Clear Channel’s discretion. During 2011, CC Finco purchased 1,553,971 shares of CCOH’s Class A common stock through open market purchases for ~~$250.0 million with available cash on hand.~~
approximately $16.4 million.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
Not Applicable
ITEM 9A.
~~ITEM 9.~~ ~~Changes in and Disagreements with Accountants on Accounting and Financial Disclosure~~CONTROLS AND PROCEDURES
~~Not Applicable~~
~~138~~
~~ITEM 9A.~~ ~~Controls and Procedures~~
Evaluation of Disclosure Controls and Procedures
Under the supervision and with the participation of management, including our Chief Executive Officer and our Chief Financial Officer, ~~who joined us effective January 4, 2010,~~ we have carried out an evaluation of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act). Based on that evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that our disclosure controls and procedures were effective as of December 31, ~~2009~~2011 to ensure that information we are required to disclose in reports that are filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified by the SEC and is accumulated and communicated to our management, including our Chief Executive Officer and our Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Management’s Report on Internal Control Over Financial Reporting
The management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting. The Company’s internal control over financial reporting is a process designed under the supervision of the Company’s Chief Executive Officer and Chief Financial Officer to provide reasonable assurance regarding the reliability of financial reporting and preparation of the Company’s financial statements for external purposes in accordance with generally accepted accounting principles.
As of December 31, ~~2009,~~2011, management assessed the effectiveness of the Company’s internal control over financial reporting based on the criteria for effective internal control over financial reporting established inInternal Control —– Integrated Frameworkissued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on the assessment, management determined that the Company maintained effective internal control over financial reporting as of December 31, ~~2009,~~2011, based on those criteria.
Ernst & Young LLP, the independent registered public accounting firm that audited the consolidated financial statements of the Company included in this Annual Report on Form 10-K, has issued an attestation report on the effectiveness of the Company’s internal control over financial reporting as of December 31, ~~2009.~~2011. The report, which expresses an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting as of December 31, ~~2009,~~2011, is included in this Item under the heading “Report of Independent Registered Public Accounting Firm.”
Changes in Internal Control Over Financial Reporting
There were no changes in our internal control over financial reporting that occurred during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
~~139~~
Report of Independent Registered Public Accounting Firm
The Board of Directors and Shareholders
CC Media Holdings, Inc.
We have audited CC Media Holdings, Inc.’s ~~(Holdings)~~(the Company) internal control over financial reporting as of December 31, ~~2009,~~2011, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the COSO criteria). ~~Holdings’~~The Company’ management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report ~~of Management~~ on Internal Control ~~over~~Over Financial Reporting. Our responsibility is to express an opinion on ~~Holdings’~~the Company’s internal control over financial reporting based on our audit.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
In our opinion, ~~Holdings~~the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, ~~2009,~~2011, based ~~on the~~onthe COSO ~~criteria~~.
criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of ~~Holdings~~the Company as of December 31, ~~2009~~2011 and ~~2008,~~2010, the related consolidated statements of ~~operations,~~comprehensive loss, changes in shareholders’ ~~equity (deficit),~~deficit, and cash flows of ~~Holdings~~the Company for each of the ~~year~~three years in the period ended December 31, 2009 and for the period from July 31, 2008 through December 31, 2008, the related consolidated statement of operations, shareholders’ equity, and cash flows of Clear Channel Communications, Inc. for the period from January 1, 2008 through July 30, 2008, and for the year ended December 31, 2007,2011 and our report dated ~~March 16, 2010~~February 21, 2012 expressed an unqualified opinion thereon.
/s/ Ernst & Young LLP
~~/s/ Ernst & Young LLP~~
San Antonio, Texas
~~March 16, 2010~~
~~140~~
February 21, 2012
ITEM 9B. ~~Other Information~~OTHER INFORMATION
Not Applicable
~~141~~
PART III
~~ITEM 10.~~ ~~Directors, Executive Officers and Corporate Governance~~
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
The information required by this item with respect to our executive officers is set forth inat the end of Part I of this Annual Report on Form ~~10-K~~10-K.
The Clear Channel Code of Business Conduct and ~~all~~Ethics (the “Code”) applies to our principal executive officer, principal financial officer, principal accounting officer and controller. The Code is publicly available on our internet website at www.ccmediaholdings.com. We intend to satisfy the disclosure requirements of Item 5.05 of Form 8-K regarding any amendment to, or waiver from, a provision of the Code that applies to our principal executive officer, principal financial officer, principal accounting officer or controller and relates to any element of the definition of code of ethics set forth in Item 406(b) of Regulation S-K by posting such information on our website, www.ccmediaholdings.com.
All other information required by this item is incorporated by reference to the information set forth in our Definitive Proxy Statement ~~expected~~for our 2012 Annual Meeting of Stockholders (the “Definitive Proxy Statement”), which we expect to ~~be filed~~file with the ~~Securities and Exchange Commission~~SEC within 120 days ofafter our fiscal year end.
~~ITEM 11.~~ ~~Executive Compensation~~
     ~~The information required by this item is incorporated by reference to the information set forth in our Definitive Proxy Statement, expected to be filed within 120 days of our fiscal year end.~~
~~ITEM 12.~~ ~~Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters~~
ITEM 11. EXECUTIVE COMPENSATION
The information required by this item is incorporated by reference to our Definitive Proxy Statement, ~~expected~~which we expect to ~~be filed~~file with the SEC within 120 days ofafter our fiscal year end.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The following table summarizes information as of December 31, 2011 relating to our equity compensation plan pursuant to which grants of options, restricted stock or other rights to acquire shares may be granted from time to time.
Plan category
   Number of securities
to be issued upon
exercise of
outstanding options,
warrants and rights    Weighted-
average exercise
price of
outstanding
options,
warrants and
rights    Number of securities remaining
available for future issuance
under equity compensation
plans (excluding securities
reflected in column (a))
   (a)    (b)    (c)
Equity compensation plans approved by security holders⁽¹⁾
   5,250,811    $21.11    4,418,145
Equity compensation plans not approved by security holders
               —      —      —






Total⁽²⁾
   5,250,811    $21.11    4,418,145






(1)
~~ITEM 13.~~ ~~Certain Relationships and Related Transactions, and Director Independence~~Represents the Clear Channel 2008 Executive Incentive Plan.
(2) Does not include options to purchase an aggregate of 235,393 shares, at a weighted average exercise price of $10.99, granted under plans assumed in connection with acquisition transactions. No additional options may be granted under these assumed plans.
All other information required by this item is incorporated by reference to our Definitive Proxy Statement, which we expect to file with the SEC within 120 days after our fiscal year end.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
The information required by this item is incorporated by reference to our Definitive Proxy Statement, ~~expected~~which we expect to ~~be filed~~file with the SEC within 120 days ofafter our fiscal year end.
~~ITEM 14.~~ ~~Principal Accounting Fees and Services~~
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
The information required by this item is incorporated by reference to our Definitive Proxy Statement, ~~expected~~which we expect to ~~be filed~~file with the SEC within 120 days ofafter our fiscal year end.
~~142~~
PART IV
~~ITEM 15.~~ ~~Exhibits, Financial Statement Schedules~~
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a)1. Financial Statements.
The following consolidated financial statements are included in Item 8:
~~Consolidated Balance Sheets as of December 31, 2009 and 2008~~ 76
~~Consolidated Statements of Operations for the Years Ended December 31, 2009, 2008 and 2007.~~ 78
~~Consolidated Statements of Changes in Shareholders’ Equity (Deficit) for the Years Ended December 31, 2009, 2008 and 2007.~~ 79
~~Consolidated Statements of Cash Flows for the Years Ended December 31, 2009, 2008 and 2007.~~ 81
~~Notes to Consolidated Financial Statements~~ 84
Consolidated Balance Sheets as of December 31, 2011 and 2010.
Consolidated Statements of Comprehensive Loss for the Years Ended December 31, 2011, 2010 and 2009.
Consolidated Statements of Changes in Shareholders’ Deficit for the Years Ended December 31, 2011, 2010 and 2009.
Consolidated Statements of Cash Flows for the Years Ended December 31, 2011, 2010 and 2009.
Notes to Consolidated Financial Statements
(a)2. Financial Statement Schedule.
The following financial statement schedule for the years ended December 31, ~~2009, 2008~~2011, 2010 and ~~2007~~2009 and related report of independent auditors is filed as part of this report and should be read in conjunction with the consolidated financial statements.
Schedule II Valuation and Qualifying Accounts
All other schedules for which provision is made in the applicable accounting regulation of the Securities and Exchange Commission are not required under the related instructions or are inapplicable, and therefore have been omitted.
~~143~~
SCHEDULE II
VALUATION AND QUALIFYING ACCOUNTS
Allowance for Doubtful Accounts
(In thousands)

Charges
Balance at to Costs, Write-off Balance
Beginning Expenses of Accounts at end of
Description of period and other Receivable Other Period
Year ended December 31, 2007 $ 56,068 $ 38,615 $ 38,711 $ 3,197 (1) $ 59,169

Period from January 1, through July 30, 2008 $ 59,169 $ 23,216 $ 19,679 $ 2,157 (1) $ 64,863

Period from July 31, through December 31, 2008 $ 64,863 $ 54,603 $ 18,703 $ (3,399) (1) $ 97,364

Year ended December 31, 2009 $ 97,364 $ 52,498 $ 77,850 $ (362) (1) $ 71,650

            Description            Balance at
Beginning
  of period      Charges
to Costs,
Expenses
  and other      Write-off
of Accounts
   Receivable        Other   Balance
at End of
  Period
Year ended
December 31,
2009
   $ 97,364       $ 52,498       $ 77,850       $ (362 )⁽¹⁾ $ 71,650








Year ended
December 31,
2010
   $ 71,650       $ 23,023       $ 20,731       $ 718 ⁽¹⁾ $ 74,660








Year ended
December 31,
2011
   $ 74,660       $ 13,723       $ 27,345       $ 2,060 ⁽¹⁾ $ 63,098








(1) Primarily foreign currency ~~adjustments.~~adjustments and acquisition and/or divestiture activity.
~~144~~
SCHEDULE II
VALUATION AND QUALIFYING ACCOUNTS
Deferred Tax Asset Valuation Allowance
(In thousands)

Charges
Balance at to Costs, Balance
Beginning Expenses at end of
Description of period and other (1) Utilization (2) Adjustments (3) Period
Year ended December 31, 2007 $ 553,398 $ — $ (77,738 ) $ 41,262 $ 516,922

Period from January 1, through July 30, 2008 $ 516,922 $ — $ (264,243 ) $ — $ 252,679

Period from July 31, through December 31, 2008 $ 252,679 $ 62,114 $ 3,341 $ 1,396 $ 319,530

Year ended December 31, 2009 $ 319,530 $ — $ (7,369 ) $ (308,307 ) $ 3,854

            Description        Balance at
Beginning
of period    Charges
to Costs,
Expenses
and other ⁽¹⁾    Utilization ⁽²⁾ Adjustments ⁽³⁾ Balance
at end of
Period
Year ended
December 31,
2009
   $ 319,530       $ —       $ (7,369 ) $ (308,307 ) $ 3,854






Year ended
December 31,
2010
   $ 3,854       $ 13,580       $ —    $ —    $ 17,434






Year ended
December 31,
2011
   $ 17,434       $ —       $ —    $ (3,257 ) $ 14,177






(1) During ~~2008~~2010, the Company recorded a valuation allowance on certain ~~net operating losses that are not able~~capital allowance deferred tax assets due to ~~be carried back~~the uncertainty of the ability to ~~prior years.~~utilize those assets in future periods.

(2) During ~~2007, 2008 and~~ 2009 the Company utilized capital loss carryforwards to offset the capital gains generated in ~~both~~ continuing ~~and discontinued~~ operations from the disposition of primarily broadcast assets and certain investments. The related valuation allowance was released as a result of the capital loss carryforward utilization.

(3) Related to a valuation allowance for the capital loss carryforward recognized during 2005 as a result of the spin-off of Live Nation and certain net operating loss carryforwards. During 2007 the amount of capital loss carryforward and the related valuation allowance were adjusted due to the impact of settlements of various matters with the Internal Revenue Service for the 1999-2004 tax years. During 2008 the amount of capital loss carryforward and the related valuation allowance were adjusted due to the true up of the amount utilized on the 2007 tax return and the impact certain IRS audit adjustments that were agreed to during the year. During 2009 the Company released all valuation allowances related to its capital loss carryforwards due to the fact the all capital loss carryforwards were utilized or expired as of December 31, 2009. In addition, the Company released valuation allowances related to certain net operating loss carryforwards due to the fact that the Company can now carryback certain losses to prior years as a result of the enactment of the Worker, Homeownership, and Business Assistance Act of 2009 (the “Act”) on November 6, 2009 that allowed carryback of certain net operating losses five years. The Company’s expectations as to future taxable income from deferred tax liabilities that reverse in the relevant carryforward period for those net operating losses that cannot be carried back will be sufficient for the realization of the deferred tax assets associated with the remaining net operating loss carryforwards. During 2011, the Company adjusted certain valuation allowances as a result of changes in tax rates in certain jurisdictions and changes to the net deferred tax liabilities.
~~145~~
(a)3. Exhibits.
Exhibit
Number

Description
~~Exhibit~~
~~Number~~ ~~Description~~
2.1    Agreement and Plan of Merger among BT Triple Crown Merger Co., Inc., B Triple Crown Finco, LLC, T Triple Crown Finco, LLC and Clear Channel Communications, Inc., dated as of November 16, 2006 ~~(incorporated~~(Incorporated by reference to Exhibit 2.1 to the Clear ~~Channel’s~~Channel Communications, Inc. Current Report on Form 8-K ~~dated~~filed November 16, 2006).
2.2    Amendment No. 1, dated April 18, 2007, to the Agreement and Plan of Merger, dated as of November 16, 2006, by and among BT Triple Crown Merger Co., Inc., B Triple Crown Finco, LLC, T Triple Crown Finco, LLC and Clear Channel Communications, Inc. ~~(incorporated~~(Incorporated by reference to Exhibit 2.1 to the Clear ~~Channel’s~~Channel Communications, Inc. Current Report on Form 8-K ~~dated~~filed April ~~18,~~19, 2007).
2.3    Amendment No. 2, dated May 17, 2007, to the Agreement and Plan of Merger, dated as of November 16, 2006, by and among BT Triple Crown Merger Co., Inc., B Triple Crown Finco, LLC, T Triple Crown Finco, LLC, BT Triple Crown Holdings III, Inc. and Clear Channel Communications, Inc., as amended ~~(incorporated~~(Incorporated by reference to Exhibit 2.1 to the Clear ~~Channel’s~~Channel Communications, Inc. Current Report on Form 8-K ~~dated~~filed May 18, 2007).
2.4    Amendment No. 3, dated May 13, 2008, to the Agreement and Plan of Merger, dated as of November 16, 2006, by and among BT Triple Crown Merger Co., Inc., B Triple Crown Finco, LLC, T Triple Crown Finco, LLC, CC Media Holdings, Inc. and Clear Channel Communications, Inc. ~~(incorporated~~(Incorporated by reference to Exhibit 2.1 to the Clear ~~Channel’s~~Channel Communications, Inc. Current Report on Form 8-K ~~dated~~filed May 14, 2008).
2.5    Asset Purchase Agreement dated April 20, 2007, between Clear Channel Broadcasting, Inc., ABO Broadcasting Operations, LLC, Ackerley Broadcasting Fresno, LLC, AK Mobile Television, Inc., Bel Meade Broadcasting, Inc., Capstar Radio Operating Company, Capstar TX Limited Partnership, CCB Texas Licenses, L.P., Central NY News, Inc., Citicasters Co., Clear Channel Broadcasting Licenses, Inc., Clear Channel Investments, Inc. and TV Acquisition LLC ~~(incorporated~~(Incorporated by reference to Exhibit 2.1 to the Clear ~~Channel’s~~Channel Communications, Inc. Current Report on Form 8-K ~~dated~~filed April 26, 2007).
3.1    Third Amended and Restated Certificate of Incorporation of ~~the Company~~CC Media Holdings, Inc. (Incorporated by reference to Exhibit 3.1 to the ~~Company’s~~CC Media Holdings, Inc. Registration Statement on Form S-4 ~~(Registration~~(File No. 333-151345) ~~declared effective by the Securities and Exchange Commission on~~filed June ~~17,~~2, 2008).
3.2    Amended and Restated Bylaws of ~~the Company~~CC Media Holdings, Inc. (Incorporated by reference to Exhibit 3.2 to the ~~Company’s~~CC Media Holdings, Inc. Registration Statement on Form S-4 ~~(Registration~~(File No. 333-151345) ~~declared effective by the Securities and Exchange Commission on~~filed June ~~17,~~2, 2008).
4.1    Form of Specimen Class A Common Stock certificate of CC Media Holdings, Inc. (Incorporated by reference to Exhibit 99.3 to the CC Media Holdings, Inc. Form 8-A Registration Statement filed July 30, 2008).
~~4.1~~
4.2    Senior Indenture dated October 1, 1997, by and between Clear Channel Communications, Inc. and The Bank of New York, as Trustee ~~(incorporated~~(Incorporated by reference to Exhibit 4.2 to the Clear ~~Channel’s~~Channel Communications, Inc. Quarterly Report on Form 10-Q for the quarter ended September 30, 1997).
~~4.2~~ Second Supplemental Indenture dated June 16, 1998 to Senior Indenture dated October 1, 1997, by and between Clear Channel Communications, Inc. and the Bank of New York, as Trustee (incorporated by reference to Exhibit 4.1 to the Clear Channel’s Current Report on Form 8-K dated August 27, 1998).
4.3    Third Supplemental Indenture dated June 16, 1998 to Senior Indenture dated October 1, 1997, by and between Clear Channel Communications, Inc. and The Bank of New York, as Trustee ~~(incorporated~~(Incorporated by reference to Exhibit 4.2 to the Clear ~~Channel’s~~Channel Communications, Inc. Current Report on Form 8-K ~~dated~~filed August ~~27,~~28, 1998).
4.4 ~~Ninth Supplemental Indenture dated September 12, 2000, to Senior Indenture dated October 1, 1997, by and between Clear Channel Communications, Inc. and The Bank of New York, as~~
~~146~~
~~Exhibit~~
~~Number~~ ~~Description~~
~~Trustee (incorporated by reference to Exhibit 4.11 to Clear Channel’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2000).~~
~~4.5~~    Eleventh Supplemental Indenture dated January 9, 2003, to Senior Indenture dated October 1, 1997, by and between Clear Channel Communications, Inc. and The Bank of New York, as Trustee ~~(incorporated~~(Incorporated by reference to Exhibit 4.17 to the Clear ~~Channel’s~~Channel Communications, Inc. Annual Report on Form 10-K for the year ended December 31, 2002).
Exhibit
Number

Description
~~4.6~~ Twelfth Supplemental Indenture dated March 17, 2003, to Senior Indenture dated October 1, 1997, by and between Clear Channel Communications, Inc. and The Bank of New York, as Trustee (incorporated by reference to Exhibit 99.3 to Clear Channel’s Current Report on Form 8-K dated March 18, 2003).
~~4.7~~ Thirteenth Supplemental Indenture dated May 1, 2003, to Senior Indenture dated October 1, 1997, by and between Clear Channel Communications, Inc. and The Bank of New York, as Trustee (incorporated by reference to Exhibit 99.3 to Clear Channel’s Current Report on Form 8-K dated May 2, 2003).
~~4.8~~ 4.5    Fourteenth Supplemental Indenture dated May 21, 2003, to Senior Indenture dated October 1, 1997, by and between Clear Channel Communications, Inc. and The Bank of New York, as Trustee ~~(incorporated~~(Incorporated by reference to Exhibit 99.3 to the Clear ~~Channel’s~~Channel Communications, Inc. Current Report on Form 8-K ~~dated~~filed May 22, 2003).
~~4.9~~ 4.6    Sixteenth Supplemental Indenture dated December 9, 2003, to Senior Indenture dated October 1, 1997, by and between Clear Channel Communications, Inc. and The Bank of New York, as Trustee ~~(incorporated~~(Incorporated by reference to Exhibit 99.3 to the Clear ~~Channel’s~~Channel Communications, Inc. Current Report on Form 8-K ~~dated~~filed December 10, 2003).
~~4.10~~ 4.7    Seventeenth Supplemental Indenture dated September ~~15,~~20, 2004, to Senior Indenture dated October 1, 1997, by and between Clear Channel Communications, Inc. and The Bank of New York, as Trustee ~~(incorporated~~(Incorporated by reference to Exhibit 10.1 to the Clear ~~Channel’s~~Channel Communications, Inc. Current Report on Form 8-K ~~dated~~filed September ~~15,~~21, 2004).
4.8
~~4.11~~ ~~Eighteenth~~Nineteenth Supplemental Indenture dated ~~November 22,~~December 16, 2004, to Senior Indenture dated October 1, 1997, by and between Clear Channel Communications, Inc. and The Bank of New York, as Trustee ~~(incorporated by reference to Exhibit 10.1 to Clear Channel’s Current Report on Form 8-K dated November 17, 2004).~~
~~4.12~~ Nineteenth Supplemental Indenture dated December 13, 2004, to Senior Indenture dated October 1, 1997, by and between Clear Channel Communications, Inc. and The Bank of New York, as Trustee (incorporated by reference to Exhibit 10.1 to Clear Channel’s Current Report on Form 8-K dated December 13, 2004).
~~4.13~~ Twentieth Supplemental Indenture dated March 21, 2006, to Senior Indenture dated October 1, 1997, by and between Clear Channel Communications, Inc. and The Bank of New York, as Trustee (incorporated by reference to Exhibit 10.1 to Clear Channel’s Current Report on Form 8-K dated March 21, 2006).
~~4.14~~ Twenty-first Supplemental Indenture dated August 15, 2006, to Senior Indenture dated October 1, 1997, by and between Clear Channel Communications, Inc. and The Bank of New York, as Trustee (incorporated by reference to Exhibit 10.1 to Clear Channel’s Current Report on Form 8-K dated August 16, 2006).
~~4.15~~ Twenty-Second Supplemental Indenture, dated as of January 2, 2008, by and between Clear Channel and The Bank of New York Trust Company, N.A. (incorporated by reference to Exhibit 4.1 to Clear Channel’s Current Report on Form 8-K dated January 4, 2008).
~~4.16~~ ~~Fourth Supplemental Indenture, dated as of January 2, 2008, by and among AMFM, The Bank of New York Trust Company, N.A., and the guarantors party thereto (incorporated by reference~~
~~147~~
~~Exhibit~~
~~Number~~ ~~Description~~
~~to Exhibit 4.2 to Clear Channel’s Current Report on Form 8-K dated January 4, 2008).~~
4.17* Indenture with respect to 9.25% Series A Senior Notes due 2017, dated as of December 23, 2009, by and among Clear Channel Worldwide Holdings, Inc., Clear Channel Outdoor Holdings, Inc., Clear Channel Outdoor, Inc., U.S. Bank National Association and the guarantors party thereto.
4.18* Indenture with respect to 9.25% Series B Senior Notes due 2017, dated as of December 23, 2009, by and among Clear Channel Worldwide Holdings, Inc., Clear Channel Outdoor Holdings, Inc., Clear Channel Outdoor, Inc., U.S. Bank National Association and the guarantors party thereto.
10.2** Stockholders Agreement, dated as of July 29, 2008, by and among CC Media Holdings, Inc., Clear Channel Capital IV, LLC, Clear Channel Capital V, L.P., L. Lowry Mays, Randall T. Mays, Mark P. Mays, LLM Partners, Ltd., MPM Partners, Ltd. and RTM Partners, Ltd. (Incorporated by reference to Exhibit 4 to the Company’s Form 8-A Registration Statement filed July 30, 2008).
10.3** Side Letter Agreement, dated as of July 29, 2008, among CC Media Holdings, Inc., Clear Channel Capital IV, LLC, Clear Channel Capital V, L.P., L. Lowry Mays, Mark P. Mays, Randall T. Mays, LLM Partners, Ltd., MPM Partners Ltd. and RTM Partners, Ltd. (Incorporated by reference to Exhibit 5 to the Company’s Form 8-A Registration Statement filed July 30, 2008).
~~10.4~~ Affiliate Transactions Agreement, dated as of July 30, 2008, by and among CC Media Holdings, Inc., Bain Capital Fund IX, L.P., Thomas H. Lee Equity Fund VI, L.P. and BT Triple Crown Merger Co., Inc. (Incorporated by reference to Exhibit 6 to the Company’s Form 8-A Registration Statement filed July 30, 2008).
~~10.5§~~ Amended and Restated Employment Agreement, dated as of April 24, 2007, by and between L. Lowry Mays and Clear Channel Communications, Inc. (Incorporated by reference to Exhibit 10.1 to Clear Channel’s Current Report on Form 8-K filed May 1, 2007).
~~10.6§~~ Amended and Restated Employment Agreement, dated as of April 24, 2007, by and between Mark P. Mays and Clear Channel Communications, Inc. (Incorporated by reference to Exhibit 10.2 to the Clear Channel’s Current Report on Form 8-K filed May 1, 2007).
~~10.7§~~ Amended and Restated Employment Agreement, dated as of April 24, 2007, by and between Randall T. Mays and Clear Channel Communications, Inc. (Incorporated by reference to Exhibit 10.3 to the Clear Channel’s Current Report on Form 8-K filed May 1, 2007).
~~10.8§~~ Amended and Restated Employment Agreement, dated as of July 28, 2008, by and among Randall T. Mays, CC Media Holdings, Inc. and BT Triple Crown Merger Co., Inc. (Incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K filed July 30, 2008).
~~10.9~~ Amended and Restated Employment Agreement, dated as of July 28, 2008, by and among Mark P. Mays, CC Media Holdings, Inc. and BT Triple Crown Merger Co., Inc. (Incorporated by reference to Exhibit 10.6 to the Company’s Current Report on Form 8-K filed July 30, 2008).
~~10.10§~~ Amended and Restated Employment Agreement, dated as of July 28, 2008, by and among L. Lowry Mays, CC Media Holdings, Inc. and BT Triple Crown Merger Co., Inc. (Incorporated by reference to Exhibit 10.7 to the Company’s Current Report on Form 8-K filed July 30, 2008).
~~10.11**§~~ Employment Agreement, dated as of June 29, 2008, by and between John E. Hogan and Clear Channel Broadcasting, Inc. (Incorporated by reference to Exhibit 10.8 to the Clear Channel’s Current Report on Form 8-K filed July 30, 2008).
~~10.12§~~ ~~Amendment, dated as of January 20, 2009, to the Amended and Restated Employment Agreement of Mark P. Mays, dated as of July 28, 2008, by and among Mark P. Mays, CC~~
~~148~~
~~Exhibit~~
~~Number~~ ~~Description~~
~~Media Holdings, Inc. and Clear Channel Communications, Inc. (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed January 21, 2009).~~
~~10.13§~~ Amendment, dated as of January 20, 2009, to the Amended and Restated Employment Agreement of Randall T. Mays, dated as of July 28, 2008, by and among Randall T. Mays, CC Media Holdings, Inc. and Clear Channel Communications, Inc. (Incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed January 21, 2009).
~~10.14§~~ ~~Employment Agreement, dated as of August 5, 2005, by and between Paul Meyer and Clear Channel Communications, Inc.~~ (Incorporated by reference to Exhibit 10.1 to the Clear ~~Channel’s~~Channel Communications, Inc. Current Report on Form 8-K filed ~~August 10, 2005)~~December 17, 2004).
~~10.15**†~~ Credit Agreement, dated as of May 13, 2008, by and among Clear Channel Communications, Inc. (as the successor-in-interest to BT Triple Crown Merger Co., Inc. following the effectiveness of the Merger), the subsidiary co-borrowers of the Company party thereto, Clear Channel Capital I, LLC, the lenders party thereto, Citibank, N.A., as Administrative Agent, and the other agents party thereto (Incorporated by reference to Exhibit 10.2 to the Company’s Registration Statement on Form S-4 (Registration No. 333-151345) declared effective by the Securities and Exchange Commission on June 17, 2008).
~~10.16~~ Amendment No. 1, dated as of July 9, 2008, to the Credit Agreement, dated as of May 13, 2008, by and among Clear Channel Communications, Inc., the subsidiary co-borrowers of the Company party thereto, Clear Channel Capital I, LLC, the lenders party thereto, Citibank, N.A., as Administrative Agent, and the other agents party thereto (Incorporated by reference to Exhibit 10.10 to the Company’s Current Report on Form 8-K filed July 30, 2008).
~~10.17~~ Amendment No. 2, dated as of July 28, 2008, to the Credit Agreement, dated as of May 13, 2008, by and among Clear Channel Communications, Inc., the subsidiary co-borrowers of the Company party thereto, Clear Channel Capital I, LLC, the lenders party thereto, Citibank, N.A., as Administrative Agent, and the other agents party thereto (Incorporated by reference to Exhibit 10.11 to the Company’s Current Report on Form 8-K filed July 30, 2008).
~~10.18**†~~ Credit Agreement, dated as of May 13, 2008, by and among Clear Channel Communications, Inc. (as the successor-in-interest to BT Triple Crown Merger Co., Inc. following the effectiveness of the Merger), the subsidiary borrowers of the Company party thereto, Clear Channel Capital I, LLC, the lenders party thereto, Citibank, N.A., as Administrative Agent, and the other agents party thereto (Incorporated by reference to Exhibit 10.3 to the Company’s Registration Statement on Form S-4 (Registration No. 333-151345) declared effective by the Securities and Exchange Commission on June 17, 2008).
~~10.19~~ Amendment No. 1, dated as of July 9, 2008, to the Credit Agreement, dated as of May 13, 2008, by and among Clear Channel Communications, Inc., the subsidiary borrowers of the Company party thereto, Clear Channel Capital I, LLC, the lenders party thereto, Citibank, N.A., as Administrative Agent, and the other agents party thereto (Incorporated by reference to Exhibit 10.13 to the Company’s Current Report on Form 8-K filed July 30, 2008).
~~10.20~~ Amendment No. 2, dated as of July 28 2008, to the Credit Agreement, dated as of May 13, 2008, by and among Clear Channel Communications, Inc., the subsidiary borrowers of the Company party thereto, Clear Channel Capital I, LLC, the lenders party thereto, Citibank, N.A., as Administrative Agent, and the other agents party thereto (Incorporated by reference to Exhibit 10.14 to the Company’s Current Report on Form 8-K filed July 30, 2008).
10.21** Purchase Agreement, dated May 13, 2008, by and among BT Triple Crown Merger Co., Inc., Deutsche Bank Securities Inc., Morgan Stanley & Co. Incorporated, Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, Greenwich Capital Markets, Inc. and Wachovia Capital Markets, LLC (Incorporated by reference to Exhibit 10.4 to the Company’s Registration Statement on Form S-4 (Registration No. 333-151345) declared effective by the Securities and Exchange Commission on June 17, 2008).
~~149~~
~~Exhibit~~
~~Number~~ ~~Description~~
10.22** 4.9    Indenture, dated July 30, 2008, by and among BT Triple Crown Merger Co., Inc., Law Debenture Trust Company of New York, Deutsche Bank Trust Company Americas and Clear Channel Communications, Inc. (as the successor-in-interest to BT Triple Crown Merger Co., Inc. following the effectiveness of the Merger) (Incorporated by reference to Exhibit ~~10.16~~10.22 to the ~~Company’s Current~~CC Media Holdings, Inc. Annual Report on Form ~~8-K filed July 30, 2008)~~10-K for the year ended December 31, 2009).
~~10.23~~ 4.10    Supplemental Indenture, dated July 30, 2008, by and among Clear Channel Capital I, LLC, certain subsidiaries of Clear Channel Communications, Inc. party thereto and Law Debenture Trust Company of New York ~~(incorporated~~(Incorporated by reference to Exhibit 10.17 to the ~~Company’s~~CC Media Holdings, Inc. Current Report on Form 8-K filed on July 30, 2008).
10.24* 4.11    Supplemental Indenture, dated December 9, 2008, by and among CC Finco Holdings, LLC, a subsidiary of Clear Channel Communications, Inc. and Law Debenture Trust Company of New ~~York.~~York (Incorporated by reference to Exhibit 10.24 to the CC Media Holdings, Inc. Annual Report on Form 10-K for the year ended December 31, 2009).
4.12    Indenture, dated as of February 23, 2011, among Clear Channel Communications, Inc., Clear Channel Capital I, LLC, the other guarantors party thereto, Wilmington Trust FSB, as Trustee, and the other agents party thereto (Incorporated by reference to Exhibit 4.1 to the Clear Channel Communications, Inc. Current Report on Form 8-K filed on February 24, 2011).
4.13    Supplemental Indenture, dated as of June 14, 2011, among Clear Channel Communications, Inc. and Wilmington Trust FSB, as Trustee (Incorporated by reference to Exhibit 4.1 to the Clear Channel Communications, Inc. Current Report on Form 8-K filed on June 14, 2011).
10.25**
4.14    Indenture with respect to 9.25% Series A Senior Notes due 2017, dated as of December 23, 2009, by and among Clear Channel Worldwide Holdings, Inc., Clear Channel Outdoor Holdings, Inc., Clear Channel Outdoor, Inc., U.S. Bank National Association and the guarantors party thereto (Incorporated by reference to Exhibit 4.17 to the CC Media Holdings, Inc. Annual Report on Form 10-K for the year ended December 31, 2009).
~~Registration Rights~~
4.15 Indenture with respect to 9.25% Series B Senior Notes due 2017, dated as of December 23, 2009, by and among Clear Channel Worldwide Holdings, Inc., Clear Channel Outdoor Holdings, Inc., Clear Channel Outdoor, Inc., U.S. Bank National Association and the guarantors party thereto (Incorporated by reference to Exhibit 4.18 to the CC Media Holdings, Inc. Annual Report on Form 10-K for the year ended December 31, 2009).
Exhibit
Number
Description
10.1+ Credit Agreement, dated as of May 13, 2008, by and among Clear Channel Communications, Inc. (as the successor-in-interest to BT Triple Crown Merger Co., Inc. following the effectiveness of the Merger), the subsidiary co-borrowers and foreign subsidiary revolving borrowers party thereto, Clear Channel Capital I, LLC, the lenders party thereto, Citibank, N.A., as Administrative Agent, and the other agents party thereto (Incorporated by reference to Exhibit 10.15 to the CC Media Holdings, Inc. Annual Report on Form 10-K for the year ended December 31, 2009).
10.2 Amendment No. 1, dated as of July ~~30,~~9, 2008, to the Credit Agreement, dated as of May 13, 2008, by and among Clear Channel Communications, Inc., ~~certain subsidiaries of~~the subsidiary co-borrowers and foreign subsidiary revolving borrowers party thereto, Clear Channel ~~Communications, Inc.~~Capital I, LLC, the lenders party thereto, ~~Deutsche Bank Securities Inc.~~Citibank, N.A., ~~Morgan Stanley & Co. Incorporated, Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, Greenwich Capital Markets, Inc.~~as Administrative Agent, and ~~Wachovia Capital Markets, LLC~~the other agents party thereto (Incorporated by reference to Exhibit ~~10.18~~10.10 to the ~~Company’s~~CC Media Holdings, Inc. Current Report on Form 8-K filed July 30, 2008).
10.3
~~10.26**§~~ Amendment No. 2, dated as of July 28, 2008, to the Credit Agreement, dated as of May 13, 2008, by and among Clear Channel ~~2008 Incentive Plan~~Communications, Inc., the subsidiary co-borrowers and foreign subsidiary revolving borrowers party thereto, Clear Channel Capital I, LLC, the lenders party thereto, Citibank, N.A., as Administrative Agent, and the other agents party thereto (Incorporated by reference to Exhibit ~~10.19~~10.11 to the ~~Company’s~~CC Media Holdings, Inc. Current Report on Form 8-K filed July 30, 2008).
10.4
~~10.27§~~ ~~Form~~Amendment and Restatement Agreement, dated as of ~~Senior Executive Option~~February 15, 2011, to the Credit Agreement, dated as of May 13, 2008, among Clear Channel Communications, Inc., Clear Channel Capital I, LLC, the subsidiary co-borrowers and foreign subsidiary borrowers named therein, Citibank, N.A., as Administrative Agent, the lenders from time to time party thereto and the other agents party thereto (Incorporated by reference to Exhibit ~~10.20~~10.1 to the ~~Company’s~~Clear Channel Communications, Inc. Current Report on Form 8-K filed on February 18, 2011).
10.5 Amended and Restated Credit Agreement, dated as of February 23, 2011, by and among Clear Channel Communications, Inc., the subsidiary co-borrowers and foreign subsidiary revolving borrowers party thereto, Clear Channel Capital I, LLC, Citibank, N.A., as Administrative Agent, the lenders from time to time party thereto and the other agents party thereto (Incorporated by reference to Exhibit 10.1 to the Clear Channel Communications, Inc. Current Report on Form 8-K filed on February 24, 2011).
10.6+ Credit Agreement, dated as of May 13, 2008, by and among Clear Channel Communications, Inc. (as the successor-in-interest to BT Triple Crown Merger Co., Inc. following the effectiveness of the Merger), the subsidiary borrowers party thereto, Clear Channel Capital I, LLC, the lenders party thereto, Citibank, N.A., as Administrative Agent, and the other agents party thereto (Incorporated by reference to Exhibit 10.18 to the CC Media Holdings, Inc. Annual Report on Form 10-K for the year ended December 31, 2009).
10.7 Amendment No. 1, dated as of July 9, 2008, to the Credit Agreement, dated as of May 13, 2008, by and among Clear Channel Communications, Inc., the subsidiary borrowers party thereto, Clear Channel Capital I, LLC, the lenders party thereto, Citibank, N.A., as Administrative Agent, and the other agents party thereto (Incorporated by reference to Exhibit 10.13 to the CC Media Holdings, Inc. Current Report on Form 8-K filed July 30, 2008).
10.8
~~10.28§~~ ~~Form~~Amendment No. 2, dated as of ~~Senior Executive Restricted Stock Award~~July 28 2008, to the Credit Agreement, dated as of May 13, 2008, by and among Clear Channel Communications, Inc., the subsidiary borrowers party thereto, Clear Channel Capital I, LLC, the lenders party thereto, Citibank, N.A., as Administrative Agent, and the other agents party thereto (Incorporated by reference to Exhibit ~~10.21~~10.14 to the ~~Company’s~~CC Media Holdings, Inc. Current Report on Form 8-K filed July 30, 2008).
10.9
~~10.29§~~ ~~Form~~Amendment No. 3, dated as of ~~Senior Management Option~~February 15, 2011, to the Credit Agreement, dated as of May 13, 2008, by and among Clear Channel Communications, Inc., the subsidiary co-borrowers party thereto, Clear Channel Capital I, LLC, the lenders party thereto, Citibank, N.A., as Administrative Agent, and the other agents party thereto (Incorporated by reference to Exhibit ~~10.22~~10.2 to the ~~Company’s~~Clear Channel Communications, Inc. Current Report on Form 8-K filed on February 18, 2011).
Exhibit
Number
Description
10.10 Revolving Promissory Note dated November 10, 2005 payable by Clear Channel Communications, Inc. to Clear Channel Outdoor Holdings, Inc. in the original principal amount of $1,000,000,000 (Incorporated by reference to Exhibit 10.8 to the Clear Channel Outdoor Holdings, Inc. Annual Report on Form 10-K for the year ended December 31, 2005).
10.11 First Amendment, dated as of December 23, 2009, to the Revolving Promissory Note, dated as of November 10, 2005, by Clear Channel Communications, Inc., as Maker, to Clear Channel Outdoor Holdings, Inc. (Incorporated by reference to Exhibit 10.41 to the CC Media Holdings, Inc. Annual Report on Form 10-K for the year ended December 31, 2009).
10.12 Revolving Promissory Note dated November 10, 2005 payable by Clear Channel Outdoor Holdings, Inc. to Clear Channel Communications, Inc. in the original principal amount of $1,000,000,000 (Incorporated by reference to Exhibit 10.7 to the Clear Channel Outdoor Holdings, Inc. Annual Report on Form 10-K for the year ended December 31, 2005).
10.13 First Amendment, dated as of December 23, 2009, to the Revolving Promissory Note, dated as of November 10, 2005, by Clear Channel Outdoor Holdings, Inc., as Maker, to Clear Channel Communications, Inc. (Incorporated by reference to Exhibit 10.42 to the CC Media Holdings, Inc. Annual Report on Form 10-K for the year ended December 31, 2009).
10.14 Corporate Services Agreement dated November 16, 2005 between Clear Channel Outdoor Holdings, Inc. and Clear Channel Management Services, L.P. (Incorporated by reference to Exhibit 10.3 to the Clear Channel Outdoor Holdings, Inc. Annual Report on Form 10-K for the year ended December 31, 2005).
10.15 First Amended and Restated Management Agreement, dated as of July 28, 2008, by and among CC Media Holdings, Inc., BT Triple Crown Merger Co., Inc., B Triple Crown Finco, LLC, T Triple Crown Finco, LLC, THL Managers VI, LLC and Bain Capital Partners, LLC (Incorporated by reference to Exhibit 10.1 to the CC Media Holdings, Inc. Current Report on Form 8-K filed July 30, 2008).
~~10.30§~~ ~~Form of Executive Option Agreement (Incorporated by reference to Exhibit 10.23 to the Company’s Current Report on Form 8-K filed July 30, 2008).~~
~~10.31§~~ ~~Clear Channel 2008 Investment Program (Incorporated by reference to Exhibit 10.24 to the Company’s Current Report on Form 8-K filed July 30, 2008).~~
~~10.32**§~~ ~~Clear Channel 2008 Annual Incentive Plan (Incorporated by reference to Exhibit 10.25 to the Company’s Current Report on Form 8-K filed July 30, 2008).~~
~~10.33~~ ~~Form of Indemnification Agreement (Incorporated by reference to Exhibit 10.26 to the Company’s Current Report on Form 8-K filed July 30, 2008).~~
~~10.34~~ 10.16    Amended and Restated Voting Agreement dated as of May 13, 2008 by and among BT Triple Crown Merger Co., Inc., B Triple Crown Finco, LLC, T Triple Crown Finco, LLC, CC Media Holdings, Inc., Highfields Capital I LP, Highfields Capital II LP, Highfields Capital III LP and Highfields Capital Management LP (Incorporated by reference to Annex E to the ~~Company’s~~CC Media Holdings, Inc. Registration Statement on Form S-4 ~~(Registration~~(File No. 333-151345) ~~declared effective by the Securities and Exchange Commission on~~filed June ~~17,~~2, 2008).
~~10.35~~ 10.17    Voting Agreement dated as of May 13, 2008 by and among BT Triple Crown Merger Co., Inc., B Triple Crown Finco, LLC, T Triple Crown Finco, LLC, CC Media Holdings, Inc., Abrams Capital Partners I, LP, Abrams Capital Partners II, LP, Whitecrest Partners, LP, Abrams Capital International, Ltd. ~~and~~And Riva Capital Partners, LP (Incorporated by reference to Annex F to the ~~Company’s~~CC Media Holdings, Inc. Registration Statement on Form S-4 ~~(Registration~~(File No. 333-151345) ~~declared effective by the Securities and Exchange Commission on~~filed June ~~17,~~2, 2008).
~~150~~
10.18§    Stockholders Agreement, dated as of July 29, 2008, by and among CC Media Holdings, Inc., BT Triple Crown Merger Co., Inc., Clear Channel Capital IV, LLC, Clear Channel Capital V, L.P., L. Lowry Mays, Randall T. Mays, Mark P. Mays, LLM Partners, Ltd., MPM Partners, Ltd. and RTM Partners, Ltd. (Incorporated by reference to Exhibit 10.2 to the CC Media Holdings, Inc. Annual Report on Form 10-K for the year ended December 31, 2009).
10.19§    Side Letter Agreement, dated as of July 29, 2008, among CC Media Holdings, Inc., Clear Channel Capital IV, LLC, Clear Channel Capital V, L.P., L. Lowry Mays, Mark P. Mays, Randall T. Mays, LLM Partners, Ltd., MPM Partners Ltd. and RTM Partners, Ltd. (Incorporated by reference to Exhibit 10.3 to the CC Media Holdings, Inc. Annual Report on Form 10-K for the year ended December 31, 2009).
~~Exhibit~~
10.20    Affiliate Transactions Agreement, dated as of July 30, 2008, by and among CC Media Holdings, Inc., Bain Capital Fund IX, L.P., Thomas H. Lee Equity Fund VI, L.P. and BT Triple Crown Merger Co., Inc. (Incorporated by reference to Exhibit 99.6 to the CC Media Holdings, Inc. Form 8-A Registration Statement filed July 30, 2008).
Exhibit
Number

Description
10.36*10.21§ ~~Purchase~~Side Letter Agreement, dated as of December ~~18,~~22, 2009, by and among ~~Clear Channel Worldwide~~CC Media Holdings, Inc., ~~Goldman, Sachs & Co.~~Clear Channel Capital IV, LLC, Clear Channel Capital V, L.P., ~~Citigroup Global Markets~~Randall T. Mays and RTM Partners, Ltd. (Incorporated by reference to Exhibit 99.3 to the CC Media Holdings, Inc. Current Report on Form 8-K filed December 29, 2009).
10.22§ Stock Purchase Agreement dated as of November 15, 2010 by and among CC Media Holdings, Inc., ~~Morgan Stanley & Co. Incorporated, Credit Suisse Securities (USA)~~Clear Channel Capital IV, LLC, ~~Deutsche Bank Securities~~Clear Channel Capital V, L.P. and Pittman CC LLC (Incorporated by reference to Exhibit 10.3 to the CC Media Holdings, Inc.~~, Moelis & Company LLC, Banc~~ Quarterly Report on Form 10-Q for the quarter ended September 30, 2011).
10.23*§ Aircraft Lease Agreement dated as of ~~America Securities LLC~~November 16, 2011 by and ~~Barclays Capital~~between Yet Again Inc. and Clear Channel Broadcasting, Inc.
10.24§ Clear Channel 2008 Executive Incentive Plan (the “CC Executive Incentive Plan”) (Incorporated by reference to Exhibit 10.26 to the CC Media Holdings, Inc. Annual Report on Form 10-K for the year ended December 31, 2009).
10.25§ Form of Senior Executive Option Agreement under the CC Executive Incentive Plan (Incorporated by reference to Exhibit 10.20 to the CC Media Holdings, Inc. Current Report on Form 8-K filed July 30, 2008).
10.37*
10.26§ Form of Senior Executive Restricted Stock Award Agreement under the CC Executive Incentive Plan (Incorporated by reference to Exhibit 10.21 to the CC Media Holdings, Inc. Current Report on Form 8-K filed July 30, 2008).
10.27§ Form of Senior Management Option Agreement under the CC Executive Incentive Plan (Incorporated by reference to Exhibit 10.22 to the CC Media Holdings, Inc. Current Report on Form 8-K filed July 30, 2008).
10.28§ Form of Executive Option Agreement under the CC Executive Incentive Plan (Incorporated by reference to Exhibit 10.23 to the CC Media Holdings, Inc. Current Report on Form 8-K filed July 30, 2008).
10.29§ Clear Channel Employee Equity Investment Program (Incorporated by reference to Exhibit 10.24 to the CC Media Holdings, Inc. Current Report on Form 8-K filed July 30, 2008).
10.30§ CC Media Holdings, Inc. 2008 Annual Incentive Plan (Incorporated by reference to Exhibit 10.32 to the CC Media Holdings, Inc. Annual Report on Form 10-K for the year ended December 31, 2009).
10.31§ Clear Channel Outdoor Holdings, Inc. 2005 Stock Incentive Plan, as amended and restated (the “CCOH Stock Incentive Plan”) (Incorporated by reference to Exhibit 10.2 to the Clear Channel Outdoor Holdings, Inc. Current Report on Form 8-K filed April 30, 2007).
10.32§ First Form of Option Agreement under the CCOH Stock Incentive Plan (Incorporated by reference to Exhibit 10.2 to the Clear Channel Outdoor Holdings, Inc. Registration ~~Rights~~Statement on Form S-8 (File No. 333-130229) filed December 9, 2005).
10.33*§ Form of Option Agreement ~~with respect~~under the CCOH Stock Incentive Plan (approved February 21, 2011).
10.34§ Form of Restricted Stock Award Agreement under the CCOH Stock Incentive Plan (Incorporated by reference to ~~9.25% Series A Senior Notes due 2017,~~Exhibit 10.3 to the Clear Channel Outdoor Holdings, Inc. Registration Statement on Form S-8 (File No. 333-130229) filed December 9, 2005).
10.35§ Form of Restricted Stock Unit Award Agreement under the CCOH Stock Incentive Plan (Incorporated by reference to Exhibit 10.16 to the Clear Channel Outdoor Holdings, Inc. Annual Report on Form 10-K for the year ended December 31, 2010).
10.36§ 2006 Annual Incentive Plan of Clear Channel Outdoor Holdings, Inc. (Incorporated by reference to Exhibit 10.1 to the Clear Channel Outdoor Holdings, Inc. Current Report on Form 8-K filed April 30, 2007).
Exhibit
Number
Description
10.37§ Relocation Policy – Chief Executive Officer and Direct Reports (Guaranteed Purchase Offer) (Incorporated by reference to Exhibit 10.1 to the CC Media Holdings, Inc. Current Report on Form 8-K filed October 12, 2010).
10.38§ Relocation Policy – Chief Executive Officer and Direct Reports (Buyer Value Option) (Incorporated by reference to Exhibit 10.2 to the CC Media Holdings, Inc. Current Report on Form 8-K filed October 12, 2010).
10.39§ Relocation Policy – Function Head Direct Reports (Incorporated by reference to Exhibit 10.3 to the CC Media Holdings, Inc. Current Report on Form 8-K filed October 12, 2010).
10.40§ Form of CC Media Holdings, Inc. and Clear Channel Communications, Inc. Indemnification Agreement (Incorporated by reference to Exhibit 10.26 to the CC Media Holdings, Inc. Current Report on Form 8-K filed July 30, 2008).
10.41§ Form of Clear Channel Outdoor Holdings, Inc. Independent Director Indemnification Agreement (Incorporated by reference to Exhibit 10.1 to the Clear Channel Outdoor Holdings, Inc. Current Report on Form 8-K filed June 3, 2009).
10.42§ Form of Clear Channel Outdoor Holdings, Inc. Affiliate Director Indemnification Agreement (Incorporated by reference to Exhibit 10.2 to the Clear Channel Outdoor Holdings, Inc. Current Report on Form 8-K filed June 3, 2009).
10.43§ Amended and Restated Employment Agreement, dated ~~December 23, 2009,~~as of July 28, 2008, by and among ~~Clear Channel Worldwide~~L. Lowry Mays, CC Media Holdings, Inc. and BT Triple Crown Merger Co., ~~certain subsidiaries of Clear Channel Worldwide~~Inc. (Incorporated by reference to Exhibit 10.7 to the CC Media Holdings, Inc. party thereto, Goldman, Sachs & Co., Citigroup Global Markets Inc., Morgan Stanley & Co. Incorporated, Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., Moelis & Company LLC, Banc of America Securities LLC and Barclays Capital Inc.Current Report on Form 8-K filed July 30, 2008).
10.38* Registration Rights Agreement with respect to 9.25% Series B Senior Notes due 2017, dated December 23, 2009, by and among Clear Channel Worldwide Holdings, Inc., certain subsidiaries of Clear Channel Worldwide Holdings, Inc. party thereto, Goldman, Sachs & Co., Citigroup Global Markets Inc., Morgan Stanley & Co. Incorporated, Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., Moelis & Company LLC, Banc of America Securities LLC and Barclays Capital Inc.
~~10.39**§~~ 10.44§    Amended and Restated Employment Agreement, dated as of December 22, 2009, by and among Randall T. Mays, Clear Channel Communications, Inc. and CC Media Holdings, Inc. (Incorporated by reference to Exhibit ~~99.1~~10.39 to the ~~Company’s Current Report on Form 8-K dated December 29, 2009).~~
~~10.40**§~~ ~~Employment Separation Agreement, dated as of July 13, 2009, by and between Andrew W. Levin and~~ CC Media Holdings, Inc. ~~(Incorporated by reference to Exhibit 10.1 to the Company’s Current~~Annual Report on Form ~~8-K dated July 17,~~10-K for the year ended December 31, 2009).
10.41* First Amendment, dated as of December 23, 2009, to the Revolving Promissory Note, dated as of November 10, 2005, by Clear Channel Communications, Inc., as Maker, to Clear Channel Outdoor Holdings, Inc.
10.42* First Amendment, dated as of December 23, 2009, to the Revolving Promissory Note, dated as of November 10, 2005, by Clear Channel Outdoor Holdings, Inc., as Maker, to Clear Channel Communications, Inc.
10.43* ~~Series A Senior Notes Proceeds Loan Agreement, dated as of December 23, 2009, by and between Clear Channel Worldwide Holdings, Inc. and Clear Channel Outdoor, Inc.~~
10.44* ~~Series B Senior Notes Proceeds Loan Agreement, dated as of December 23, 2009, by and between Clear Channel Worldwide Holdings, Inc. and Clear Channel Outdoor, Inc.~~
10.45§    Employment Separation Agreement, dated as of October 19, 2009, by and between Clear Channel Communications, Inc. and Herbert W. Hill (Incorporated by reference to Exhibit 10.2 to the Company’s Amendment to Form 10-Q filed November 13, 2009).
~~10.46§~~ ~~Amendment, dated as of January 20, 2009, to the~~ Amended and Restated Employment Agreement, dated ~~as of July 28, 2008,~~June 23, 2010, by and among Mark P. Mays, CC Media Holdings, Inc., and Clear Channel Communications, Inc., as successor to BT Triple Crown Merger Co., Inc. (Incorporated by reference to Exhibit 10.1 to the ~~Company’s~~CC Media Holdings, Inc. Current Report on Form 8-K filed June 24, 2010).
10.46§ Employment Agreement, dated as of October 2, 2011, between Robert Pittman and CC Media Holdings, Inc. (Incorporated by reference to Exhibit 10.1 to the CC Media Holdings, Inc. Quarterly Report on Form 10-Q for the quarter ended September 30, 2011).
10.47§ Employment Agreement, dated as of December 15, 2009, between Tom Casey and Clear Channel Communications, Inc. (Incorporated by reference to Exhibit 10.1 to the CC Media Holdings, Inc. Current Report on Form 8-K filed January ~~21,~~5, 2010).
10.48§ Employment Agreement, dated as of January 1, 2010, between Robert H. Walls, Jr., and Clear Channel Management Services, Inc. (Incorporated by reference to Exhibit 10.1 to the CC Media Holdings, Inc. Current Report on Form 8-K filed January 5, 2010).
10.49§ Amended and Restated Employment Agreement, dated as of November 15, 2010, between John E. Hogan and Clear Channel Broadcasting, Inc. (Incorporated by reference to Exhibit 10.1 to the CC Media Holdings, Inc. Current Report on Form 8-K filed November 18, 2010).
10.50§ Contract of Employment between C. William Eccleshare and Clear Channel Outdoor Ltd dated August 31, 2009 (Incorporated by reference to Exhibit 10.23 to the Clear Channel Outdoor Holdings, Inc. Annual Report on Form 10-K for the year ended December 31, 2009).
Exhibit
Number
Description
10.51§ Contract of Employment between Jonathan Bevan and Clear Channel Outdoor Ltd dated October 30, 2009 (Incorporated by reference to Exhibit 10.1 to the Clear Channel Outdoor Holdings, Inc. Current Report on Form 8-K filed December 11, 2009).
10.52§ Employment Agreement, dated as of December 10, 2009, between Ronald Cooper and Clear Channel Outdoor, Inc. (Incorporated by reference to Exhibit 10.25 to the Clear Channel Outdoor Holding, Inc. Annual Report on Form 10-K for the year ended December 31, 2010).
10.53*§ Severance Agreement and General Release, dated January 20, 2012, between Ronald Cooper and Clear Channel Outdoor Holdings, Inc.
~~10.47§~~
10.54§ Employment Agreement, dated as of July 19, 2010, by and among Joseph Bagan and Clear Channel Outdoor Holdings, Inc. (Incorporated by reference to Exhibit 10.1 to the Clear Channel Outdoor Holdings, Inc. Quarterly Report on Form 10-Q for the quarter ended September 30, 2010).
~~Letter~~
10.55§ Form of Executive Option Agreement under the CC Executive Incentive Plan, dated as of July 30, 2008, between John Hogan and CC Media Holdings, Inc. (Incorporated by reference to Exhibit 10.40 to the CC Media Holdings, Inc. Annual Report on Form 10-K for the year ended December 31, 2010).
10.56*§ Form of Amendment to Senior Executive Option Agreement under the CC Executive Incentive Plan, dated as of October 14, 2008.
10.57§ Second Amendment, dated as of December 22, 2009, ~~by and among~~to the Senior Executive Option Agreement under the CC Executive Incentive Plan, dated July 30, 2008, between Randall T. Mays and CC Media Holdings, Inc.~~, BT Triple Crown Merger Co., Inc., Clear Channel Capital IV, LLC, Clear Channel Capital V, L.P., Lowry Mays, Mark P. Mays and other parties thereto~~ (Incorporated by reference to Exhibit ~~99.3~~99.2 to the ~~Company’s~~CC Media Holdings, Inc. Current Report on Form 8-K ~~dated~~filed December 29, 2009).
10.58§ Second Amendment, dated as of June 23, 2010, to the Senior Executive Option Agreement under the CC Executive Incentive Plan, dated July 30, 2008, between Mark P. Mays and CC Media Holdings, Inc. (Incorporated by reference to Exhibit 10.2 to the CC Media Holdings, Inc. Current Report on Form 8-K filed June 24, 2010).
10.59§ Form of Executive Option Agreement under the CC Executive Incentive Plan, dated as of December 31, 2010, between Tom Casey and CC Media Holdings, Inc. (Incorporated by reference to Exhibit 10.43 to the CC Media Holdings, Inc. Annual Report on Form 10-K for the year ended December 31, 2010).
11*
10.60§ Form of Executive Option Agreement under the CC Executive Incentive Plan, dated as of December 31, 2010, between John Hogan and CC Media Holdings, Inc. (Incorporated by reference to Exhibit 10.44 to the CC Media Holdings, Inc. Annual Report on Form 10-K for the year ended December 31, 2010).
10.61§ Form of Executive Option Agreement under the CC Executive Incentive Plan, dated as of December 31, 2010, between Robert H. Walls, Jr. and CC Media Holdings, Inc. (Incorporated by reference to Exhibit 10.45 to the CC Media Holdings, Inc. Annual Report on Form 10-K for the year ended December 31, 2010).
10.62§ Form of Executive Replacement Option Agreement under the CC Executive Incentive Plan between John Hogan and CC Media Holdings, Inc. (Incorporated by reference to Exhibit 99(a)(1)(iv) to the CC Media Holdings, Inc. Schedule TO filed on February 18, 2011).
10.63*§ Form of Executive Option Agreement under the CC Executive Incentive Plan, dated as of May 19, 2011, between Scott Hamilton and CC Media Holdings, Inc.
Exhibit
Number
Description
10.64§ Executive Option Agreement under the CC Executive Incentive Plan, dated as of October 2, 2011, between Robert Pittman and CC Media Holdings, Inc. (Incorporated by reference to Exhibit 10.2 to the CC Media Holdings, Inc. Quarterly Report on Form 10-Q for the quarter ended September 30, 2011).
10.65§ Form of Stock Option Agreement under the CCOH Stock Incentive Plan, dated September 17, 2009, between C. William Eccleshare and Clear Channel Outdoor Holdings, Inc. (Incorporated by reference to Exhibit 10.34 to the Clear Channel Outdoor Holdings, Inc. Annual Report on Form 10-K for the year ended December 31, 2010).
10.66§ Form of Amended and Restated Stock Option Agreement under the CCOH Stock Incentive Plan, dated as of August 11, 2011, between C. William Eccleshare and Clear Channel Outdoor Holdings, Inc. (Incorporated by reference to Exhibit 10.1 to the Clear Channel Outdoor Holdings, Inc. Current Report on Form 8-K filed on August 12, 2011).
10.67§ Form of Stock Option Agreement under the CCOH Stock Incentive Plan, dated December 13, 2010, between C. William Eccleshare and Clear Channel Outdoor Holdings, Inc. (Incorporated by reference to Exhibit 10.35 to the Clear Channel Outdoor Holdings, Inc. Annual Report on Form 10-K for the year ended December 31, 2010).
10.68§ Form of Restricted Stock Unit Agreement under the CCOH Stock Incentive Plan, dated December 20, 2010, between C. William Eccleshare and Clear Channel Outdoor Holdings, Inc. (Incorporated by reference to Exhibit 10.36 to the Clear Channel Outdoor Holdings, Inc. Annual Report on Form 10-K for the year ended December 31, 2010).
11* Statement re: Computation of Per Share ~~Earnings.~~Earnings (Loss).
21* Subsidiaries.
23* Consent of Ernst ~~and~~& Young LLP.
24* Power of Attorney (included on signature page).
31.1* Certification Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2* Certification Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*** Certification ~~of Chief Executive Officer~~ Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2*** Certification ~~of Chief Financial Officer~~ Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101*** Interactive Data Files.
* Filed herewith.
** ~~Previously filed and being re-filed herewith solely for the purpose of including certain exhibits and schedules previously omitted.~~
~~***~~ This exhibit is furnished herewith and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that section, and shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934.
*** In accordance with Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.
§ A management contract or compensatory plan or arrangement required to be filed as an exhibit pursuant to Item 601 of Regulation S-K.
† + This Exhibit was filed separately with the Commission pursuant to an application for confidential treatment. The confidential portions of the Exhibit have been omitted and have been marked by the following symbol: [**].
~~151~~
SIGNATURES
~~SIGNATURES~~
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on ~~March 16, 2010.~~
February 21, 2012.
CC MEDIA HOLDINGS, INC.
~~By:~~   ~~/s/ Mark P. Mays~~
By: ~~Mark P. Mays~~ /s/ ROBERT W. PITTMAN
~~President and~~ Robert W. Pittman
Chief Executive Officer
Power of Attorney
Each person whose signature appears below authorizes ~~Mark P. Mays,~~Robert W. Pittman, Thomas W. Casey and ~~Herbert W. Hill, Jr.,~~Scott D. Hamilton, or any one of them, each of whom may act without joinder of the others, to execute in the name of each such person who is then an officer or director of the Registrant and to file any amendments to this ~~annual report~~Annual Report on Form 10-K necessary or advisable to enable the Registrant to comply with the Securities Exchange Act of 1934, as amended, and any rules, regulations and requirements of the Securities and Exchange Commission in respect thereof, which amendments may make such changes in such report as such attorney-in-fact may deem appropriate.
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
Name

Title
Date
/s/ Robert W. Pittman
Chief Executive Officer (Principal Executive Officer) and Director
February 21, 2012
Robert W. Pittman

~~Name~~
/s/ Thomas W. Casey
   ~~Title~~Executive Vice President and Chief Financial Officer (Principal Financial Officer) ~~Date~~February 21, 2012
Thomas W. Casey

/s/ Scott D. Hamilton
Senior Vice President, Chief Accounting Officer and Assistant Secretary (Principal Accounting Officer) February 21, 2012
Scott D. Hamilton
/s/ Mark P. Mays
~~Mark P. Mays~~
   Chairman of the Board ~~President, Chief Executive Officer~~ and Director ~~(Principal Executive Officer)~~ ~~March 16, 2010~~February 21, 2012
Mark P. Mays

/s/ Randall T. Mays
~~Randall T. Mays~~
   Vice Chairman and Director ~~March 16, 2010~~February 21, 2012
Randall T. Mays

~~/s/ Thomas W. Casey~~
Name

Title

Date
~~Thomas W. Casey~~ ~~Chief Financial Officer (Principal Financial Officer)~~ ~~March 16, 2010~~
~~/s/ Herbert W. Hill, Jr.~~
~~Herbert W. Hill, Jr.~~
~~Senior Vice President, Chief Accounting Officer~~
~~(Principal Accounting Officer)~~ ~~March 16, 2010~~
/s/ David C. Abrams
~~David Abrams~~
   Director    ~~March 16, 2010~~February 21, 2012
David C. Abrams

~~/s/ Steve Barnes~~
~~Steve Barnes~~
/s/ Irving L. Azoff
   Director    ~~March 16, 2010~~February 21, 2012
~~152~~
Irving L. Azoff

~~Name~~ ~~Title~~ ~~Date~~
/s/ ~~Richard J. Bressler~~
~~Richard J. Bressler~~Steven W. Barnes
   Director    ~~March 16, 2010~~February 21, 2012
Steven W. Barnes

/s/ ~~Charles A. Brizius~~
~~Charles A. Brizius~~Richard J. Bressler
   Director    ~~March 16, 2010~~February 21, 2012
Richard J. Bressler

/s/ ~~John Connaughton~~
~~John Connaughton~~Charles A. Brizius
   Director    ~~March 16, 2010~~February 21, 2012
Charles A. Brizius

/s/ ~~Blair Hendrix~~
~~Blair Hendrix~~John P. Connaughton
   Director    ~~March 16, 2010~~February 21, 2012
John P. Connaughton

/s/ ~~Jonathan S. Jacobson~~
~~Jonathan S. Jacobson~~Blair E. Hendrix
   Director    ~~March 16, 2010~~February 21, 2012
Blair E. Hendrix

/s/ ~~Ian K. Loring~~
~~Ian K. Loring~~Jonathon S. Jacobson
   Director    ~~March 16, 2010~~February 21, 2012
Jonathon S. Jacobson

/s/ ~~Scott M. Sperling~~
~~Scott M. Sperling~~Ian K. Loring
   Director    ~~March 16, 2010~~February 21, 2012
Ian K. Loring

/s/ ~~Kent R. Weldon~~
~~Kent R. Weldon~~Scott M. Sperling
   Director    ~~March 16, 2010~~February 21, 2012
Scott M. Sperling
~~153~~
124


Delaware		26-0241222
~~Delaware~~ (State or other jurisdiction of incorporation or organization)		~~26-0241222~~ (I.R.S. Employer Identification No.)

200 East Basse Road
San Antonio, Texas		78209
(Address of principal executive offices)		(Zip Code)


~~Large accelerated filer~~o	~~Accelerated filer~~o	~~Non-accelerated filer~~þ	~~Smaller reporting company~~o
		~~(Do not check if a smaller reporting company)~~



		Page
		Number
~~PART I.~~

PART I.

Item 1.
~~Item 1.~~	Business		1

Item 1A.	Risk Factors		15

Item 1B.	Unresolved Staff Comments		23

Item ~~1A.~~2.	~~Risk Factors~~Properties		1723

Item 3.	Legal Proceedings			24

Item ~~1B.~~4.	~~Unresolved Staff Comments~~Mine Safety Disclosures		25

PART II.

Item 5.
~~Item 2.~~	~~Properties~~		25

~~Item 3.~~	~~Legal Proceedings~~		26

~~PART II.~~

~~Item 5.~~	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities		28

Item 6.	Selected Financial Data			30

Item 6.7.	~~Selected Financial Data~~		29

~~Item 7.~~	Management’s Discussion and Analysis of Financial Condition and Results of Operations		3132

Item 7A.
~~Item 7A.~~	Quantitative and Qualitative Disclosures About Market Risk		7364

Item 8.
~~Item 8.~~	Financial Statements and Supplementary Data		7465

Item 9.
~~Item 9.~~	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure		~~138~~108

Item 9A.	Controls and Procedures		108

Item 9B.	Other Information
~~Item 9A.~~	~~Controls and Procedures~~		~~139~~110

PART III.

Item 10.
~~Item 9B.~~	~~Other Information~~		~~141~~

~~PART III.~~

~~Item 10.~~	Directors, Executive Officers and Corporate Governance		~~142~~111

Item 11.	Executive Compensation			111

Item ~~11.~~12.	~~Executive Compensation~~		~~142~~

~~Item 12.~~	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters		~~142~~111

Item 13.
~~Item 13.~~	Certain Relationships and Related Transactions, and Director Independence		~~142~~111

Item 14.
~~Item 14.~~	Principal Accounting Fees and Services		~~142~~111

PART IV.

Item 15.	Exhibits and Financial Statement Schedules			112
~~PART IV.~~

~~Item 15.~~	~~Exhibits, Financial Statement Schedules~~		~~143~~
~~EX-4.17~~
~~EX-4.18~~
~~EX-10.2~~
~~EX-10.3~~
~~EX-10.11~~
~~EX-10.15~~
~~EX-10.18~~
~~EX-10.21~~
~~EX-10.22~~
~~EX-10.24~~
~~EX-10.25~~
~~EX-10.26~~
~~EX-10.32~~
~~EX-10.36~~
~~EX-10.37~~
~~EX-10.38~~
~~EX-10.39~~
~~EX-10.40~~
~~EX-10.41~~
~~EX-10.42~~
~~EX-10.43~~
~~EX-10.44~~
~~EX-11~~
~~EX-21~~
~~EX-23~~
~~EX-31.1~~
~~EX-31.2~~
~~EX-32.1~~
~~EX-32.2~~


		Number
	Market	of
Market	Rank*	Stations
New York, NY	1	5
Los Angeles, CA	2	8
Chicago, IL	3	7
San Francisco, CA	4	7
Dallas-Ft. Worth, TX	5	6
Houston-Galveston, TX	6	6
Atlanta, GA	7	6
Philadelphia, PA	8	6
Washington, DC	9	5
Boston, MA	10	4
Detroit, MI	11	7
Miami-Ft. Lauderdale-Hollywood, FL	12	7
Seattle-Tacoma, WA	13	7
Phoenix, AZ	15	8
Minneapolis-St. Paul, MN	16	7
San Diego, CA	17	7
Nassau-Suffolk (Long Island), NY	18	2
Tampa-St. Petersburg-Clearwater, FL	19	8
Denver-Boulder, CO	20	8
St. Louis, MO	21	6
Baltimore, MD	22	4
Portland, OR	23	7
Charlotte-Gastonia-Rock Hill, NC-SC	24	5
Pittsburgh, PA	25	6
Riverside-San Bernardino, CA	26	6
Sacramento, CA	27	6
Cincinnati, OH	28	6
Cleveland, OH	29	6
Salt Lake City-Ogden-Provo, UT	30	6
San Antonio, TX	31	7
Las Vegas, NV	33	3
Orlando, FL	34	7
San Jose, CA	35	3
Columbus, OH	36	7
Milwaukee-Racine, WI	37	6
Austin, TX	38	6
Indianapolis, IN	39	3
Providence-Warwick-Pawtucket, RI	41	4
Raleigh-Durham, NC	42	4
Norfolk-Virginia Beach-Newport News, VA	43	4
Nashville, TN	44	5
Greensboro-Winston Salem-High Point, NC	45	5
Jacksonville, FL	46	6
West Palm Beach-Boca Raton, FL	47	6
Oklahoma City, OK	48	6
Memphis, TN	49	6
Hartford-New Britain-Middletown, CT	50	4
New Orleans, LA	52	7
Louisville, KY	54	8
Richmond, VA	55	6
Rochester, NY	56	7
Birmingham, AL	57	5
Greenville-Spartanburg, SC	58	6
McAllen-Brownsville-Harlingen, TX	59	5
Tucson, AZ	60	7
Dayton, OH	61	8
Ft. Myers-Naples-Marco Island, FL	62	4
Albany-Schenectady-Troy, NY	63	7
Honolulu, HI	64	7
Tulsa, OK	65	6
Fresno, CA	66	8
Grand Rapids, MI	67	7
Albuquerque, NM	68	7
Allentown-Bethlehem, PA	69	4
Omaha-Council Bluffs, NE-IA	72	5
Sarasota-Bradenton, FL	73	6
El Paso, TX	74	5
Bakersfield, CA	75	5
Akron, OH	76	4
Wilmington, DE	77	5
Harrisburg-Lebanon-Carlisle, PA	78	5
Baton Rouge, LA	79	5
Monterey-Salinas-Santa Cruz, CA	80	5
Stockton, CA	82	6
Charleston, SC	83	4
Syracuse, NY	84	6
Little Rock, AR	85	5
Springfield, MA	88	5
Columbia, SC	89	6
Des Moines, IA	90	5
Spokane, WA	91	6
Toledo, OH	92	5
Colorado Springs, CO	93	3
Mobile, AL	95	4
Ft. Pierce-Stuart-Vero Beach, FL	96	6
Melbourne-Titusville-Cocoa, FL	97	4
Wichita, KS	98	4
Madison, WI	99	6
Various U.S. Cities	100-150	99
Various U.S. Cities	151-200	98
Various U.S. Cities	201-250	53
Various U.S. Cities	251+	66
Various U.S. Cities	unranked	78

Total^{(1) (2)}		894


Arbitron Market Rank⁽¹⁾	Market	Number of Stations
1	New York, NY	5
2	Los Angeles, CA	8
3	Chicago, IL	7
4	San Francisco, CA	7
5	Dallas-Ft. Worth, TX	6
6	Houston-Galveston, TX	6
7	Philadelphia, PA	6
8	Washington, DC	5
9	Atlanta, GA	6
10	Boston, MA	4
11	Detroit, MI	7
12	Miami-Ft. Lauderdale-Hollywood, FL	7
13	Seattle-Tacoma, WA	7


þ	[X]	Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934


Title of each class		Name of each exchange on which registered

n/a		n/a


*		~~Per~~(1)	Source: Fall 2011 Arbitron ~~Rankings as of October 2009.~~Radio Market Rankings.


~~(1)~~		Excluded from the 894 radio stations owned by us is one radio station programmed pursuant to a local marketing agreement (FCC license not owned by us). Also excluded are radio stations in Australia and New Zealand. We own a 50% equity interest in the Australian Radio Network which has radio broadcasting operations in both of these markets.

(2)		Included in the total are stations that were placed in a trust in order to bring the merger into compliance with the FCC’s media ownership rules. We have divested certain of these stations in the past and will continue to divest these stations as required.


	Year Ended December 31,
	2009			2008			2007
Billboards
Bulletins⁽¹⁾		52	%		51	%		52	%
Posters		14	%		15	%		16	%
Street furniture displays		5	%		5	%		4	%
Transit displays		17	%		17	%		16	%
Other displays⁽²⁾		12	%		12	%		12	%

Total		100	%		100	%		100	%


	Year Ended December 31,
	2011		2010		2009
Billboards:
Bulletins		53%		53%		51%
Posters		13%		14%		14%
Street furniture displays		7%		6%		5%
Transit displays		16%		15%		17%
Other displays⁽¹⁾		11%		12%		13%

Total		100%		100%		100%


(1)		~~Includes digital displays.~~

~~(2)~~		Includes spectaculars, mall displays and wallscapes.


~~(1)~~		Included in transit displays is our airport advertising business which offers products such as traditional static wall displays, visitor information centers, and other digital products including LCD screens and touch screen kiosks. Our digital products provide multiple display opportunities unlike our traditional static wall displays. Each of the digital display opportunities is counted as a unique display in the table.

~~(2)~~		~~Includes wallscapes, spectaculars, mall and digital displays. Our inventory includes other small displays not in the table since their contribution to our revenue is not material.~~

~~(3)~~		~~Includes displays in Antigua, Aruba, Bahamas, Barbados, Belize, Costa Rica, Dominican Republic, Grenada, Guam, Jamaica, Netherlands Antilles, Saint Kitts and Nevis, Saint Lucia and Virgin Islands.~~


(1)		Includes revenue from ~~spectaculars~~posters and neon displays.

(2)		~~Includes small displays.~~

~~(3)~~		Includes advertising revenue from mall displays, other small displays, and non-advertising revenue from sales of street furniture equipment, cleaning and maintenance services, operation of Smartbike schemes and production revenue.


				~~Street~~
		~~Equity~~		~~Furniture~~	~~Transit~~
~~Market~~	~~Company~~	~~Investment~~	~~Billboards~~⁽¹⁾	~~Displays~~	~~Displays~~
*~~Outdoor Advertising Companies~~*
~~Italy~~	~~Alessi~~	~~36.75%~~	•	•	•
~~Italy~~	~~AD Moving SpA~~	~~18.75%~~	•		•
~~Hong Kong~~	~~Buspak~~	~~50.00%~~	•		•
~~Spain~~	~~Clear Channel Cemusa~~	~~50.00%~~	•
~~Thailand~~	~~Master & More~~	~~32.50%~~	•	•
~~Belgium~~	~~MTB~~	~~49.00%~~			•
*~~Other Media Companies~~*
~~Norway~~	~~CAPA~~	~~50.00%~~


~~(1)~~		~~Includes spectaculars and neon displays.~~

~~(2)~~		~~Includes small displays.~~

~~(3)~~		~~Includes mall displays and other small displays counted as separate displays in the table since they form a substantial part of our network and International revenue.~~

	•		unfavorable economic conditions, both general and relative to the radio broadcasting, outdoor advertising and all related media industries, which may cause companies to reduce their expenditures on advertising;

	•		unfavorable shifts in population and other demographics which may cause us to lose advertising customers as people migrate to markets where we have a smaller presence, or which may cause advertisers to be willing to pay less in advertising fees if the general population shifts into a less desirable age or geographical demographic from an advertising perspective;

	•		an increased level of competition for advertising dollars, which may lead to lower advertising rates as we attempt to retain customers or which may cause us to lose customers to our competitors who offer lower rates that we are unable or unwilling to match;

	•		~~unfavorable fluctuations in operating costs which we may be unwilling or unable to pass through to our customers;~~

	•		technological changes and innovations that we are unable to adopt or are late in adopting that offer more attractive advertising or listening alternatives than what we currently offer, which may lead to a loss of advertising customers or to lower advertising rates;

	•		~~the impact of potential new royalties charged for terrestrial radio broadcasting which could materially increase our expenses;~~

	•		~~unfavorable changes in labor conditions which may require us to spend more to retain and attract key employees; and~~

	•		changes in governmental regulations and policies and actions of regulatory bodies which could restrict the advertising media which we employ or restrict some or all of our customers that operate in regulated areas from using certain advertising media, or from advertising at all.

	•		~~exposure to local economic conditions;~~

	•		~~potential adverse changes in the diplomatic relations of foreign countries with the United States;~~

	•		~~hostility from local populations;~~

	•		~~the adverse effect of currency exchange controls;~~

	•		~~restrictions on the withdrawal of foreign investment and earnings;~~

	•		~~government policies against businesses owned by foreigners;~~

	•		~~investment restrictions or requirements;~~

	•		~~expropriations of property;~~

	•		~~the potential instability of foreign governments;~~

	•		~~the risk of insurrections;~~

	•		~~risks of renegotiation or modification of existing agreements with governmental authorities;~~

	•		~~foreign exchange restrictions;~~

	•		~~withholding and other taxes on remittances and other payments by subsidiaries;~~

	•		~~changes in taxation structure; and~~

	•		~~changes in laws or regulations or the interpretation or application of laws or regulations.~~

	•		~~certain of our acquisitions may prove unprofitable and fail to generate anticipated cash flows;~~

	•		~~to successfully manage our large portfolio of broadcasting, outdoor advertising and other properties, we may need to:~~

	•		recruit additional senior management as we cannot be assured that senior management of acquired companies will continue to work for us and we cannot be certain that any of our recruiting efforts will succeed, and

	•		expand corporate infrastructure to facilitate the integration of our operations with those of acquired properties, because failure to do so may cause us to lose the benefits of any expansion that we decide to undertake by leading to disruptions in our ongoing businesses or by distracting our management;

	•		~~we may enter into markets and geographic areas where we have limited or no experience;~~

	•		~~we may encounter difficulties in the integration of operations and systems;~~

	•		~~our management’s attention may be diverted from other business concerns; and~~

	•		~~we may lose key employees of acquired companies or stations.~~

	•		~~as a result of the risk factors listed in this annual report on Form 10-K;~~

	•		~~actual or anticipated fluctuations in our operating results;~~

	•		~~reasons unrelated to operating performance, such as reports by industry analysts, investor perceptions, or negative announcements by our customers or competitors regarding their own performance;~~

	•		~~regulatory changes that could impact our business; and~~

	•		~~general economic and industry conditions.~~


Name	Age		Position
Robert W. Pittman
~~Name~~58	~~Age~~		~~Position~~
~~Mark P. Mays~~		46			~~Chairman of the Board, President,~~ Chief Executive Officer and Director
Thomas W. Casey		4749		Executive Vice President and Chief Financial Officer
C. William Eccleshare	56		Chief ~~Financial~~Executive Officer—Outdoor
Scott D. Hamilton	42		Senior Vice President, Chief Accounting Officer and Assistant Secretary
John E. Hogan	55		Chairman and Chief Executive Officer—Clear Channel Media and Entertainment
Robert H. Walls, Jr.		49	51		Executive Vice President, General Counsel and Secretary
~~Herbert W. Hill, Jr.~~		51			~~Senior Vice President/Chief Accounting Officer and Assistant Secretary~~
~~John Hogan~~		53			~~Senior Vice President — CC Media Holdings, Inc.~~


~~ITEM 5.~~		~~Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities~~


	Common Stock Market Price
	High		Low
2009
First Quarter.	$	2.45	$	0.51
Second Quarter		2.45		0.65
Third Quarter.		1.75		0.75
Fourth Quarter		4.00		1.11


	Common Stock Market Price
	High		Low
2008
Third Quarter	$	18.95	$	7.75
Fourth Quarter		13.25		1.15


	Class A Common Stock Market Price					Class A Common Stock Market Price
	High		Low			High		Low
2011					2010
First Quarter	$	9.00	$	7.25	First Quarter	$	4.95	$	2.60
Second Quarter		9.83		6.00	Second Quarter		16.00		4.20
Third Quarter		8.50		5.00	Third Quarter		8.00		5.00
Fourth Quarter		6.50		4.00	Fourth Quarter		11.00		6.00


~~(1)~~		~~Represents the Clear Channel 2008 Executive Incentive Plan.~~

~~(2)~~		Does not include option to purchase an aggregate of 745,621 shares, at a weighted average exercise price of $5.42, granted under plans assumed in connection with acquisition transactions. No additional options may be granted under these assumed plans.


Period	Total Number of Shares Purchased		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs
October 1 through October 31		—		—		—		(1)
November 1 through November 30		—		—		—		(1)
December 1 through December 31		—		—		—		(1)

Total		—		—		—		$ 83,627,310 (1)


	For the Years Ended December 31,
	2009			2008			2007⁽¹⁾			2006⁽²⁾			2005
(In thousands)	Post-Merger			Combined			Pre-Merger			Pre-Merger			Pre-Merger
Results of Operations Information:
Revenue	$	5,551,909		$	6,688,683		$	6,921,202		$	6,567,790		$	6,126,553
Operating expenses:
Direct operating expenses (excludes depreciation and amortization)		2,583,263			2,904,444			2,733,004			2,532,444			2,351,614
Selling, general and administrative expenses (excludes depreciation and amortization)		1,466,593			1,829,246			1,761,939			1,708,957			1,651,195
Depreciation and amortization		765,474			696,830			566,627			600,294			593,477
Corporate expenses (excludes depreciation and amortization)		253,964			227,945			181,504			196,319			167,088
Merger expenses		—			155,769			6,762			7,633			—
Impairment charges⁽³⁾		4,118,924			5,268,858			—			—			—
Other operating income (expense) — net		(50,837	)		28,032			14,113			71,571			49,656

Operating income (loss)		(3,687,146	)		(4,366,377	)		1,685,479			1,593,714			1,412,835
Interest expense		1,500,866			928,978			451,870			484,063			443,442
Gain (loss) on marketable securities		(13,371	)		(82,290	)		6,742			2,306			(702	)
Equity in earnings (loss) of nonconsolidated affiliates		(20,689	)		100,019			35,176			37,845			38,338
Other income (expense) — net		679,716			126,393			5,326			(8,593	)		11,016

Income (loss) before income taxes and discontinued operations		(4,542,356	)		(5,151,233	)		1,280,853			1,141,209			1,018,045
Income tax benefit (expense)		493,320			524,040			(441,148	)		(470,443	)		(403,047	)

Income (loss) before discontinued operations		(4,049,036	)		(4,627,193	)		839,705			670,766			614,998
Income from discontinued operations, net⁽⁴⁾		—			638,391			145,833			52,678			338,511

Consolidated net income (loss)		(4,049,036	)		(3,988,802	)	$	985,538		$	723,444		$	953,509
Amount attributable to noncontrolling interest		(14,950	)		16,671			47,031			31,927			17,847

Net income (loss) attributable to the Company	$	(4,034,086	)	$	(4,005,473	)	$	938,507		$	691,517		$	935,662


(In thousands)	For the Years Ended December 31,
	2011 Post-Merger			2010 Post-Merger			2009 Post-Merger			2008 Combined			2007⁽¹⁾ Pre-Merger
Results of Operations Data:
Revenue	$	6,161,352		$	5,865,685		$	5,551,909		$	6,688,683		$	6,921,202
Operating expenses:
Direct operating expenses (excludes depreciation and amortization)		2,504,036			2,381,647			2,529,454			2,836,082			2,672,852
Selling, general and administrative expenses (excludes depreciation and amortization)		1,617,258			1,570,212			1,520,402			1,897,608			1,822,091
Corporate expenses (excludes depreciation and amortization)		227,096			284,042			253,964			227,945			181,504
Depreciation and amortization		763,306			732,869			765,474			696,830			566,627
Merger expenses		—			—			—			155,769			6,762
Impairment charges⁽²⁾		7,614			15,364			4,118,924			5,268,858			—
Other operating income (expense) – net		12,682			(16,710	)		(50,837	)		28,032			14,113

Operating income (loss)		1,054,724			864,841			(3,687,146	)		(4,366,377	)		1,685,479
Interest expense		1,466,246			1,533,341			1,500,866			928,978			451,870
Gain (loss) on marketable securities		(4,827	)		(6,490	)		(13,371	)		(82,290	)		6,742
Equity in earnings (loss) of nonconsolidated affiliates		26,958			5,702			(20,689	)		100,019			35,176
Other income (expense) – net		(4,616	)		46,455			679,716			126,393			5,326

Income (loss) before income taxes and discontinued operations		(394,007	)		(622,833	)		(4,542,356	)		(5,151,233	)		1,280,853
Income tax benefit (expense)		125,978			159,980			493,320			524,040			(441,148	)

Income (loss) before discontinued operations		(268,029	)		(462,853	)		(4,049,036	)		(4,627,193	)		839,705
Income from discontinued operations, net⁽³⁾		—			—			—			638,391			145,833

Consolidated net income (loss)		(268,029	)		(462,853	)		(4,049,036	)		(3,988,802	)		985,538
Less amount attributable to noncontrolling interest		34,065			16,236			(14,950	)		16,671			47,031

Net income (loss) attributable to the Company	$	(302,094	)	$	(479,089	)	$	(4,034,086	)	$	(4,005,473	)	$	938,507

		$ 000,000			$ 000,000			$ 000,000			$ 000,000			$ 000,000		$ 000,000
	Post-Merger												Pre-Merger
	For the Years Ended December 31,									For the Five Months Ended December 31,			For the Seven Months Ended July 30,		For the Year Ended December 31,
	2011			2010			2009			2008			2008		2007⁽¹⁾
Net income (loss) per common share:
Basic:
Income (loss) attributable to the Company before discontinued operations	$	(3.70	)	$	(5.94	)	$	(49.71	)	$	(62.04	)	$	0.80	$	1.59
Discontinued operations		—			—			—			(0.02	)		1.29		0.30

Net income (loss) attributable to the Company	$	(3.70	)	$	(5.94	)	$	(49.71	)	$	(62.06	)	$	2.09	$	1.89

Diluted:
Income (loss) attributable to the Company before discontinued operations	$	(3.70	)	$	(5.94	)	$	(49.71	)	$	(62.04	)	$	0.80	$	1.59
Discontinued operations		—			—			—			(0.02	)		1.29		0.29

Net income (loss) attributable to the Company	$	(3.70	)	$	(5.94	)	$	(49.71	)	$	(62.06	)	$	2.09	$	1.88

Dividends declared per share	$	—		$	—		$	—		$	—		$	—	$	0.75


(In thousands)	As of December 31,
Balance Sheet Data:	2011 Post-Merger			2010 Post-Merger			2009 Post-Merger			2008 Post-Merger			2007⁽¹⁾ Pre-Merger
Current assets	$	2,985,285		$	3,603,173		$	3,658,845		$	2,066,555		$	2,294,583
Property, plant and equipment – net, including discontinued operations		3,063,327			3,145,554			3,332,393			3,548,159			3,215,088
Total assets		16,542,039			17,460,382			18,047,101			21,125,463			18,805,528
Current liabilities		1,428,962			2,098,579			1,544,136			1,845,946			2,813,277
Long-term debt, net of current maturities		19,938,531			19,739,617			20,303,126			18,940,697			5,214,988
Shareholders’ equity (deficit)		(7,471,941	)		(7,204,686	)		(6,844,738	)		(2,916,231	)		9,233,851


	Post-Merger						Pre-Merger
				For the Five			For the Seven
	Year Ended			Months Ended			Months Ended		For the Years
	December 31,			December 31,			July 30,		Ended December 31,
	2009			2008			2008		2007⁽¹⁾		2006⁽²⁾		2005
Net income (loss) per common share:
Basic:
Income (loss) attributable to the Company before discontinued operations	$	(49.71	)	$	(62.04	)	$	.80	$	1.59	$	1.27	$	1.09
Discontinued operations		—			(.02	)		1.29		.30		.11		.62

Net income (loss) attributable to the Company	$	(49.71	)	$	(62.06	)	$	2.09	$	1.89	$	1.38	$	1.71

Diluted:
Income (loss) attributable to the Company before discontinued operations	$	(49.71	)	$	(62.04	)	$	.80	$	1.59	$	1.27	$	1.09
Discontinued operations		—			(.02	)		1.29		.29		.11		.62

Net income (loss) attributable to the Company	$	(49.71	)	$	(62.06	)	$	2.09	$	1.88	$	1.38	$	1.71

Dividends declared per share		—		$	—		$	—	$	.75	$	.75	$	.69


(1)		Effective January 1, 2007, ~~the Company~~we adopted FASB Interpretation No. 48,Accounting for Uncertainty in Income Taxes, codified in ASC 740-10. In accordance with the provisions of ASC 740-10, the effects of adoption were accounted for as a cumulative-effect adjustment recorded to the balance of retained earnings on the date of adoption. The adoption of ASC 740-10 resulted in a decrease of $0.2 million to the January 1, 2007 balance of “Retained deficit”, an increase of $101.7 million in “Other long term-liabilities” for unrecognized tax benefits and a decrease of $123.0 million in “Deferred income taxes”.