10-Q 1 d10q.txt FORM 10-Q (Q.E. 6/30/2002) FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarter ended June 30, 2002 Commission file number 000-22486 AMFM Operating Inc. (an indirect, wholly-owned subsidiary of Clear Channel Communications, Inc.) (Exact name of registrant as specified in its charter) Delaware 13-3649750 (State of Incorporation) (I.R.S. Employer Identification No.) 200 East Basse Road San Antonio, Texas 78209 (210) 822-2828 (Address and telephone number of principal executive offices) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No[ ] Indicate the number of shares outstanding of each class of the issuer's classes of common stock, as of the latest practicable date: As of August 14, 2002, 1,040 shares of common stock of the Registrant's common stock were outstanding. The registrant meets the conditions set forth in General Instruction H(1)(a) and (b) of Form 10-Q and is therefore filing this report with the reduced disclosure format. AMFM OPERATING INC. INDEX

PART I Item 1. UNAUDITED FINANCIAL STATEMENTS AMFM OPERATING INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS ASSETS (In thousands)

See Notes to Consolidated Financial Statements -3- AMFM OPERATING INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS LIABILITIES AND SHAREHOLDER'S EQUITY (In thousands)

See Notes to Consolidated Financial Statements -4- AMFM OPERATING INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (In thousands)

See Notes to Consolidated Financial Statements -5- AMFM OPERATING INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (In thousands)

See Notes to Consolidated Financial Statements -6- AMFM OPERATING INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) Note 1: PREPARATION OF INTERIM FINANCIAL STATEMENTS AMFM Operating Inc. (the "Company"), together with its subsidiaries, is an indirect, wholly-owned subsidiary of Clear Channel Communications, Inc. ("Clear Channel"), a diversified media company with operations in radio broadcasting, outdoor advertising and live entertainment. The consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") and, in the opinion of management, include all adjustments (consisting of normal recurring accruals and adjustments necessary for adoption of new accounting standards) necessary to present fairly the results of the interim periods shown. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such SEC rules and regulations. Management believes that the disclosures made are adequate to make the information presented not misleading. Due to seasonality and other factors, the results for the interim periods are not necessarily indicative of results for the full year. The financial statements contained herein should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's 2001 Annual Report on Form 10-K. The consolidated financial statements include the accounts of the Company and its subsidiaries, all of which are wholly-owned. All significant intercompany transactions are eliminated in the consolidation process. Certain reclassifications have been made to the 2001 consolidated financial statements to conform to the 2002 presentation. Note 2: RECENT ACCOUNTING PRONOUNCEMENTS On January 1, 2002, the Company adopted Financial Accounting Standards No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets ("Statement 144"). Statement 144 supersedes Financial Accounting Standards No. 121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of, and the accounting and reporting provisions of APB Opinion No. 30, Reporting the Results of Operations-Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring Events and Transactions, for the disposal of a segment of a business. Statement 144 also amends ARB No. 51, Consolidated Financial Statements, to eliminate the exception to consolidation for a subsidiary for which control is likely to be temporary. Adoption of Statement 144 had no impact on the financial position of the Company or its results of operations. In April 2002, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 145, Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections ("Statement 145"). Statement 145 rescinds FASB Statement No. 4, Reporting Gains and Losses from Extinguishment of Debt, and an amendment of that Statement, FASB Statement No. 64, Extinguishments of Debt Made to Satisfy Sinking-Fund Requirements. Statement 145 also rescinds FASB Statement No. 44, Accounting for Leases, to eliminate an inconsistency between the required accounting for sale-leaseback transactions and the required accounting for certain lease modifications that have economic effects that are similar to sale-leaseback transactions. Statement 145 also amends other existing authoritative pronouncements to make various technical corrections, clarify meanings, or describe their applicability under changed conditions. Early adoption of Statement 145 is encouraged and may be as of the beginning of the fiscal year or as of the beginning of the interim period in which the statement issued. The Company has elected to early adopt this statement effective January 1, 2002. Management does not believe adoption of this statement materially impacted the Company's financial position or results of operations. -7- Note 3: INTANGIBLE ASSETS AND GOODWILL On January 1, 2002, the Company adopted Statement of Financial Accounting Standards No. 142, Goodwill and Other Intangible Assets ("Statement 142"). Statement 142 addresses financial accounting and reporting for acquired goodwill and other intangible assets and supersedes APB Opinion No. 17, Intangible Assets. Under the new rules, goodwill and intangible assets deemed to have indefinite lives are no longer amortized but are subject to annual impairment tests in accordance with the statement. Other intangible assets will continue to be amortized over their useful lives. The following table presents the impact of Statement 142 on earnings net (loss) as if the standard had been in effect for the six and three months ended June 30, 2001:

Definite-lived Intangibles The Company has representation contracts for non-affiliated television and radio stations, which continue to be amortized in accordance with Statement 142. These agreements are amortized over their respective lives. In accordance with the transitional requirements of Statement 142, the Company reassessed the useful lives of these intangibles and made no material changes to their useful lives. Total amortization expense from representation contracts for the three and six months ended June 30, 2002 and for the year ended December 31, 2001 was $5.0 million, $9.3 million and $15.4 million, respectively. The gross carrying value of the contracts at June 30, 2002 was $188.8 million and accumulated amortization was $24.8 million. The gross carrying value of the contracts at December 31, 2001 was $185.7 million and accumulated amortization was $19.0 million. 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) 2003 $ 18,874 2004 17,048 2005 16,913 2006 15,232 2007 11,059 Indefinite-lived Intangibles Under the guidance in Statement 142, the Company's FCC licenses are considered indefinite-lived intangibles. These assets are not subject to amortization, but will be tested for impairment at least annually. In accordance with Statement 142, the Company tested these indefinite-lived intangible assets for impairment as of January 1, 2002 by comparing their fair value to their carrying value at that date. The Company recognized impairment on FCC licenses of approximately $5.5 billion, net of deferred tax of $3.4 billion, recorded as a component of the cumulative effect of a change in accounting principle during the three months ended March 31, 2002. The Company used the income approach to value FCC licenses, which involved estimating expected future cash flows from the licenses, discounted to their present value using a risk-adjusted discount rate. Terminal values were also estimated and discounted to their present value. In estimating future cash flows, the Company took into -8- account the economic slow down in the radio industry at the end of 2001, coupled with the economic impact of the events of September 11th. Goodwill Statement 142 requires the Company to test goodwill for impairment using a two-step process. The first step is a screen for potential impairment, while the second step measures the amount of impairment. The Company completed the two-step impairment test during the first quarter of 2002. As a result of this test, the Company recognized an impairment of approximately $3.9 billion as a component of the cumulative effect of a change in accounting principle during the three months ended March 31, 2002. Consistent with the Company's approach to fair valuing FCC licenses, the income approach was used to determine the fair value of the Company's reporting unit. Throughout 2001, unfavorable economic conditions persisted in the industries that the Company serves, which caused its customers to reduce the number of advertising dollars spent on the Company's media inventory as compared to prior periods. These conditions adversely impacted the cash flow projections used to determine the fair value of the Company's reporting unit, resulting in a write-off of a portion of goodwill. The following table presents the changes in the carrying amount of goodwill for the six-month period ended June 30, 2002: (In thousands) Balance as of December 31, 2001 $ 6,744,779 Adjustments (61,083) Impairment loss related to the adoption of FAS 142 (3,886,921) ------------ Balance as of June 30, 2002 $ 2,796,775 ------------ Other Statement 142 does not change the requirements of Statement of Financial Accounting Standards No. 109, Accounting for Income Taxes, for recognition of deferred taxes related to FCC licenses and tax-deductible goodwill. As a result of adopting Statement 142, a deferred tax benefit for the difference between book and tax amortization on the Company's FCC licenses and tax-deductible goodwill will no longer be recognized as these assets are no longer amortized for book purposes. As the majority of the Company's deferred tax liability recorded on the balance sheet relates to the difference between book and tax basis on FCC licenses, the deferred tax liability will not reverse over time unless future impairment charges are recognized on FCC licenses or the FCC licenses are sold. Prior to adopting Statement 142, the Company recorded large amounts of non-deductible goodwill amortization, which resulted in a corresponding large permanent tax item, which adversely impacted the Company's effective tax rate. However, as a result of the Company's adoption of Statement 142, it no longer amortizes goodwill for book or tax purposes, thus its effective tax rate more closely approximates statutory tax rates. Note 4: RESTRUCTURING The combined company restructured the former AMFM operations primarily during 2001. The Company communicated to all affected employees the last date of their employment. The AMFM corporate offices in Dallas and Austin, Texas were closed on March 31, 2001 and other operations of AMFM have either been discontinued or integrated into existing similar operations of Clear Channel. As of June 30, 2002, the restructuring has resulted in the termination of 430 employees. The Company has recorded a liability in purchase accounting primarily related to severance for terminated employees and lease terminations as follows: (In thousands) Severance and lease termination costs: Accrual at January 1, 2002 $ 36,310 Payments charged against restructuring accrual (4,114) ------------ Remaining severance and lease termination accrual at June 30, 2002 $ 32,196 ------------

-9- The remaining severance and lease accrual is comprised of $23.8 million of severance and $8.4 million of lease termination. The severance accrual will be paid over the next several years. The lease termination accrual will be paid over the next five years. During the first half of 2002, $3.4 million was paid and charged to the restructuring reserve related to severance. The Company made adjustments to finalize the purchase price allocation related to the AMFM merger during 2001. Any potential excess reserves will be recorded as an adjustment to the purchase price. Note 5: CLEAR CHANNEL PROMISSORY NOTE AND LONG-TERM DEBT The Clear Channel promissory note and long-term debt consists of the following:

(a) Includes $48.0 million and $66.5 million as of June 30, 2002 and December 31, 2001, respectively, in unamortized fair value purchase accounting adjustments related to the merger with Clear Channel. Clear Channel Promissory Note The promissory note bears interest at 7% per annum. Accrued interest plus the note balance is payable on August 30, 2010 or upon demand. The Company is entitled to borrow additional funds and to repay outstanding borrowings, subject to the terms of the promissory note. 8% Senior Notes On November 17, 1998, the Company issued $750.0 million aggregate principal amount of 8% Senior Notes due 2008 (the "8% Senior Notes"). The 8% Senior Notes mature on November 1, 2008 and are redeemable, in whole or in part, at the option of the Company at a redemption price equal to 100% plus the Applicable Premium (as defined in the indenture governing the 8% Senior Notes) plus accrued and unpaid interest. 8.125% Notes On December 22, 1997, the Company issued $500.0 million aggregate principal amount of 8.125% Senior Subordinated Notes due 2007 (the "8.125% Notes"). The 8.125% Notes mature on December 15, 2007 and are redeemable, in whole or in part, at the option of the Company on or after December 15, 2002, at redemption prices ranging from 104.063% at December 15, 2002 and declining to 100% on or after December 15, 2005, plus in each case accrued and unpaid interest. 8.75% Notes Upon consummation of the merger with Chancellor Broadcasting Company on September 5, 1997, the Company assumed Chancellor Radio Broadcasting Company's $200.0 million aggregate principal amount of 8.75% Senior Subordinated Notes due 2007 (the "8.75% Notes"). The 8.75% Notes mature on June 15, 2007 and are redeemable, in whole or in part, at the option of the Company on or after June 15, 2002, at redemption prices ranging from -10- 104.375% at June 15, 2002 and declining to 100% on or after June 15, 2005, plus in each case accrued and unpaid interest. 12.625% Notes On January 15, 2002, the Company redeemed all of the outstanding 12.625% Debentures originally issued under the Company's prior name, SFX Broadcasting, Inc. At December 31, 2001 the face value of these notes was $141.8 million and the unamortized fair value purchase accounting adjustment premium was $15.3 million. The 12.625% debentures were redeemed for $150.8 million plus accrued interest. The redemption resulted in a gain of $6.3 million recorded in other income (expense) - net. Other Upon the occurrence of a change in control (as defined in the indenture governing the 8.0%, 8.125% and 8.75% Notes (the "Notes"), the holders of the Notes have the right to require the Company to repurchase all or any part of the Notes at a purchase price equal to 101% plus accrued and unpaid interest. Although the Clear Channel merger resulted in a change of control with respect to the Notes, the repurchase option has expired. AMFM Operating's 8.75% Notes and 8.125% Notes (collectively, the "Subordinated Notes") are unsecured obligations of AMFM Operating. The Subordinated Notes are subordinated in right of payment to all existing and any future senior indebtedness of AMFM Operating. The Subordinated Notes are fully and unconditionally guaranteed, on a joint and several basis, by all of AMFM Operating's direct and indirect subsidiaries (the "Subsidiary Guarantors"). In addition, AMFM Operating's independent assets and operations are insignificant, as the majority of the assets and all of the operations are at the level of the Subsidiary Guarantors. Additionally, all of the Subsidiary Guarantors are 100% owned by the Company. The 8% Senior Notes are senior unsecured obligations of AMFM Operating and rank equal in right of payment to the obligations of AMFM Operating and all other indebtedness of AMFM Operating not expressly subordinated to the 8% Senior Notes. The 8% Senior Notes are fully and unconditionally guaranteed, on a joint and several basis, by the Subsidiary Guarantors. AMFM Operating's 8% Senior Notes and the Subordinated Notes contain customary restrictive covenants, which, among other things and with certain exceptions, limit the ability of the Company to incur additional indebtedness and liens in connection therewith, enter into certain transactions with affiliates, pay dividends, consolidate, merge or effect certain asset sales, issue additional stock, effect an asset swap and make acquisitions. We have guaranteed certain Clear Channel debt obligations, including a reducing revolving long-term line of credit facility, a $1.5 billion five-year multi-currency revolving credit facility and a $1.5 billion 364-day revolving credit facility with outstanding balances at June 30, 2002 of $795.0 million, $570.8 million and $0, respectively. At June 30, 2002, the contingent liability under these guarantees was limited to $1.0 billion. At June 30, 2002, the Company was in compliance with all debt covenants. The Company expects to remain in compliance throughout 2002. The Company has no scheduled maturities of long-term debt until 2007. Note 6: COMMITMENTS AND CONTINGENCIES There are various lawsuits and claims pending against the Company. The Company believes that any ultimate liability resulting from those actions or claims will not have a material adverse effect on the results of operations, financial position or liquidity of the Company. -11- Note 7: SEGMENT DATA The Company has one reportable operating segment - radio broadcasting. The Company's media representation firm is reported in "other". Revenue and expenses earned and charged between segments are recorded at fair value and eliminated in consolidation.

-12- Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Abbreviated pursuant to General Instruction H(2)(a) of Form 10-Q) RESULTS OF OPERATIONS Comparison of Three and Six Months Ended June 30, 2002 to Three and Six Months Ended June 30, 2001 is as follows: Consolidated

Revenue increased $18.7 million and $17.1 million for the three and six months ended June 30, 2002 as compared to the same periods of 2001, respectively. During the six months ended June 30, 2002, we continued to see positive effects from the increased number of sales and marketing people and reorganization of our radio business that occurred during the latter part of 2001. These initiatives helped to create more demand on our advertising inventory, which in turn has improved rates in some of our markets. As we progressed through the first six months of the current year, we experienced sequential improvement in radio revenues. This improvement was partially spurred by the rebound in the radio industry as advertising dollars continue to return to the medium. We believe we are poised to benefit from the reorganization we initiated in our radio business and to take advantage of our market leadership position. Our revenue increased across all of our revenue categories, with national and local revenue up 4% and 3%, respectively, in the second quarter of 2002 as compared to the same period of the prior year. For the first six months of the year, national and local revenue were up 3% and 1%, respectively, as compared to the same time period of the prior year. These two categories represent approximately 88% of our total radio revenue. We also saw growth in our barter revenue during the second quarter of 2002. Growth from our revenue derived from national advertising outpaced growth from local advertising. Both categories benefited from the increased demand on our advertising inventory that began during the first quarter of this year. Similar with the first quarter of 2002, we continued to see improvement in national accounts such as retail, consumer products, auto, telecom/utility, and fast food. Divisional operating expenses increased $3.2 million for the three months ended June 30, 2002 as compared to the same period of 2001. This increase was primarily due to increased expenses within our syndicated radio programs. Divisional operating expenses decreased $1.5 million in the first six months of 2002 compared to the same period of 2001 as a result of reductions in promotional related spending within our radio markets during the first six months of 2002. Other Income and Expense Information Non-cash compensation expense relates to unvested stock options granted to AMFM employees that have been assumed by Clear Channel and that are now convertible into Clear Channel stock. To the extent that these employees' options continue to vest post-merger, we recognize non-cash compensation expense over the remaining vesting period. Vesting dates vary through April 2005. If no employees forfeit their unvested options by leaving the company, we expect to recognize non-cash compensation expense of approximately $5.0 million during the remaining vesting period. -13- Depreciation and amortization expense decreased $240.6 million and $486.0 million for the three and six months ended June 30, 2002 as compared to the same periods of 2001, respectively. Upon our adoption of FAS 142 on January 1, 2002, we no longer amortize goodwill and FCC licenses. For the three and six months ended June 30, 2001, goodwill and FCC license amortization was approximately $242.1 million and $482.0 million, respectively. Corporate expenses increased $2.0 million for the six months ended June 30, 2002 from the same period of 2001, primarily resulting from additional sales force hired in late 2001. Clear Channel's methodology of allocating corporate expense is based on head count, thus increasing the corporate allocation. Interest expense was $29.7 million and $49.4 million for the three months ended June 30, 2002 and 2001 respectively, a decrease of $19.7 million, or 40%. The decrease is due to the January 15, 2002 redemption of all of the outstanding 12.625% Debentures as well as a decrease in the balance of the Clear Channel Promissory Note. The gain on sale of marketable securities for the six months ended June 30, 2002 of $4.0 million is related to the sale of 791,000 shares of Entravision Corporation. Income tax expense was $89.2 million and $139.5 million for the three and six months ended June 30, 2002, respectively, compared to a benefit of $23.2 million and $61.3 million for the three and six months ended June 30, 2001, respectively. Income taxes for the six months ended June 30, 2002 and 2001 were provided at the federal and state statutory rates adjusted for the effects of permanent tax items. During the six months ended June 30, 2001, as a result of our large amounts of non-deductible goodwill amortization, our effective tax rate was adversely impacted. As we no longer amortize goodwill, our effective rate for the six months ended June 30, 2002, more closely approximates our statutory tax rates. Income (loss) before cumulative effect of a change in accounting principle for the three and six months ended June 30, 2002 was income of $131.0 million and $204.9 million, respectively, as compared to loss of $106.0 million and $247.0 million for the same periods of 2001, respectively. Income (loss) before cumulative effect of a change in accounting principle for the three and six months ended June 30, 2001, if we had adopted Statement 142 as of January 1, 2001, would have been income of $71.1 million and $105.7 million, respectively. The loss recorded as a cumulative effect of a change in accounting principle during the first six months of 2002 relates to our adoption of Statement 142 on January 1, 2002. Statement 142 requires us to test goodwill and indefinite-lived intangibles for impairment using a fair value approach. As a result of the goodwill test, we recorded a non-cash impairment charge of approximately $3.9 billion. Also, as a result of the indefinite-lived intangible test, we recorded a non-cash, net of tax impairment charge on our FCC licenses of approximately $5.5 billion. The non-cash impairments of our goodwill and FCC licenses were primarily caused by unfavorable economic conditions, which persisted in the industries we serve throughout 2001. This weakness contributed to our customers reducing the number of advertising dollars spent on our media inventory. These conditions adversely impacted the cash flow projections used to determine the fair value of our licenses and reporting unit. These factors resulted in the non-cash impairment charge of a portion of our licenses and goodwill. Risks Regarding Forward Looking Statements Except for the historical information, this report contains various forward-looking statements that represent our expectations or beliefs concerning future events, including the future levels of cash flow from operations. Management believes that all statements that express expectations and projections with respect to future matters, including expansion of market share; availability of capital resources; and expected changes in radio industry advertising revenues; are forward-looking statements within the meaning of the Private Securities Litigation Reform Act. We caution that these forward-looking statements involve a number of risks and uncertainties and are subject to many variables that could have an adverse effect upon our financial performance. These statements are made on the basis of management's views and assumptions, as of the time the statements are -14- made, regarding future events and business performance. There can be no assurance, however, that management's expectations will necessarily come to pass. A wide range of factors could materially affect future developments and performance, including: . the impact of general economic conditions and political developments in the U.S. and in other countries in which we currently do business; . competition and general conditions in the radio broadcasting industry; . shifts in population and other demographics; . fluctuations in operating costs; . technological changes and innovations; . changes in labor conditions; . capital expenditure requirements; . litigation settlements; . legislative or regulatory requirements, including the policies of the FCC, DOJ and FTC with respect to the conduct of our business; . legislative proposals; . interest rates; . the effect of leverage on our financial position and earnings; . taxes; and . certain other factors set forth in our SEC filings, including our Annual Report on Form 10-K for the year ended December 31, 2001. This list of factors that may affect future performance and the accuracy of forward-looking statements is illustrative, but by no means exhaustive. Accordingly, all forward-looking statements should be evaluated with the understanding of their inherent uncertainty. Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. Omitted pursuant to General Instruction H(2)(c) of Form 10-Q. -15- Part II -- OTHER INFORMATION Item 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits. See Exhibit Index on Page 17 (b) Reports on Form 8-K NONE Signatures Pursuant to the requirements 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. AMFM OPERATING INC. August 13, 2002 /s/ RANDALL T. MAYS ------------------------ Randall T. Mays Executive Vice President and Chief Financial Officer August 13, 2002 /s/ HERBERT W. HILL, JR. ------------------------ Herbert W. Hill, Jr. Senior Vice President and Chief Accounting Officer -16- INDEX TO EXHIBITS EXHIBIT NO. DESCRIPTION OF EXHIBIT ------- ---------------------- 3.1(1) -- Amended and Restated Certificate of Incorporation of AMFM Operating Inc. 3.2(2) -- Bylaws of AMFM Operating Inc. 4.1(3) -- Certificate of Designation for 12 5/8% Series E Cumulative Exchangeable Preferred Stock of AMFM Operating Inc. 4.2(4) -- Certificate of Amendment to Certificate of Designation for 12 5/8% Series E Cumulative Exchangeable Preferred Stock of AMFM Operating Inc. 4.3(5) -- Indenture, dated as of November 19, 1999, governing the 12 5/8% Senior Subordinated Exchange Debentures due 2006, of AMFM Operating Inc. 4.4(6) -- Indenture, dated as of June 24, 1997, governing the 8 3/4% Senior Subordinated Notes due 2007 of AMFM Operating Inc. (the "8 3/4% Notes Indenture"). 4.5(7) -- First Supplemental Indenture, dated as of September 5, 1997, to the 8 3/4% Notes Indenture. 4.6(8) -- Second Supplemental Indenture, dated as of October 28, 1997, to the 8 3/4% Notes Indenture. 4.7(8) -- Third Supplemental Indenture, dated as of August 23, 1999, to the 8 3/4% Notes Indenture. 4.8(8) -- Fourth Supplemental Indenture, dated as of November 19, 1999, to the 8 3/4% Notes Indenture. 4.9(8) -- Fifth Supplemental Indenture, dated as of January 18, 2000, to the 8 3/4% Notes Indenture. 4.10(9) -- Indenture, dated as of December 22, 1997, governing the 8 1/8% Senior Subordinated Notes due 2007 of AMFM Operating Inc. (the "8 1/8% Notes Indenture"). 4.11(8) -- First Supplemental Indenture, dated as of August 23, 1999, to the 8 1/8% Notes Indenture. 4.12(8) -- Second Supplemental Indenture, dated as of November 19, 1999, to the 8 1/8% Notes Indenture. 4.13(8) -- Third Supplemental Indenture, dated as of January 18, 2000, to the 8 1/8% Notes Indenture. 4.14(10) -- Indenture, dated as of November 17, 1998, governing the 8% Senior Notes due 2008 of AMFM Operating Inc. (the "8% Notes Indenture"). 4.15(8) -- First Supplemental Indenture, dated as of August 23, 1999, to the 8% Notes Indenture. 4.16(8) -- Second Supplemental Indenture, dated as of November 19, 1999, to the 8% Notes Indenture. 4.17(8) -- Third Supplemental Indenture, dated as of January 18, 2000, to the 8% Notes Indenture. 4.18(11) -- Intercompany Promissory Note between AMFM Operating Inc. and Clear Channel Communications, Inc. dated August 30, 2000. 99.1 -- Certification of Chief Executive Officer and Chief Financial Officer of AMFM Operating Inc. ------------ (1) Incorporated by reference to Exhibit 3.1 to the Quarterly Report on Form 10-Q of Capstar Communications, Inc. for the quarterly period ending June 30, 1999. (2) Incorporated by reference to Exhibit 3.2 to the Annual Report on Form 10-K of Capstar Communications, Inc. for the year ended December 31, 1998. -17- (3) Incorporated by reference to Exhibits to the Current Report on Form 8-K of SFX Broadcasting, Inc., filed on January 27, 1997. (4) Incorporated by reference to Exhibits to SFX Broadcasting, Inc.'s Annual Report on Form 10-K for the year ended December 31, 1997. (5) Incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K of AMFM Operating Inc. filed on November 19, 1999. (6) Incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K of Chancellor Broadcasting Company and Chancellor Radio Broadcasting Company filed on July 17, 1997. (7) Incorporated by reference to Exhibits to CMCLA's Registration Statement on Form S-4, initially filed on September 26, 1997, as amended (Registration Number 333-36451). (8) Incorporated by reference to Exhibits to the Annual Report on Form 10-K of AMFM Inc. for the year ended December 31, 1999. (9) Incorporated by reference to Exhibits to CMCLA's Registration Statement on Form S-4, initially filed on April 22, 1998, as amended (Registration Number 333-50739). (10) Incorporated by reference to Exhibits to CMCLA's Registration Statement on Form S-4, initially filed on November 9, 1998, as amended (Registration Number 333-66971). (11) The Company has not filed long-term debt instruments where the total amount under such instruments is less than ten percent of the total assets of the Company and its subsidiaries on a consolidated basis. However, the Company will furnish a copy of such instruments to the Commission upon request. -18-

AMFM OPERATING INC 10-Q