CLEAR CHANNEL POSTS WIDENING LOSS

Remains Bullish on Radio Upturn for First Quarter

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CHICAGO (AdAge.com) -- Radio broadcaster Clear Channel Worldwide reported widening fourth-quarter losses -- while taking a pre-tax charge of $15 billion to $25 billion after changing accounting practices involving goodwill from acquisitions -- but said it expects its radio division to rebound with a strong first quarter.

San Antonio, Texas-based Clear Channel reported fourth-quarter net losses of $365.6 million, or 61 cents per share, widening from $192 million, or 33 cents per share, in the year-earlier period.

Fourth-quarter revenue was down 8% to $1.86 billion from $2 billion in the year-earlier period, due to revenue drops in Clear Channel's three major divisions: radio, outdoor and entertainment.

The pre-tax charge of $15 billion to $25 billion follows a change on accounting for goodwill from acqusitions that stems from new guidelines from the Financial Accounting Standards Board. The new rules, which went into effect Jan. 1, state companies can only take the write off until the acquisition is no longer worth the initial purchase price.

Largest radio company in U.S.
Clear Channel

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is the largest radio and out-of-home media company in the country. It owns radio stations and outdoor boards in addition to its entertainment venue, Clear Channel Entertainment.

The company spent $80 million in the fourth quarter, higher than consensus estimates, due to significant one-time, non-recurring costs related to layoffs of 2,000 non-sales personnel and the hiring of a "stronger" sales force.

The company acted bullish, however, saying it predicts a strong peformance in the first quarter for its radio division, which accounts for 65% to 70% of overall cash flow. Radio revenue fell 6.9% in the fourth quarter to $890.6 million from $956.5 million the previous year. Full-year radio revenue was up 42% to $3.45 billion from $2.43 billion in 2000.

"The radio division is currently performing better than at any point in 2001," said Clear Channel CFO Randall Mays in a conference call to analysts and investors after close of market Tuesday. He said the company expects radio cash flow to be up 1% to 3% in the first quarter of 2002 on a pro forma basis.

'Positive territory'
"While 1% to 3% might not seem like a lot, it's exciting to be in positive territory again," Mr. Mays said.

He forecasted that outdoor would not see a turnaround until the second quarter domestically and third quarter internationally, and that entertainment would see an upturn in the second quarter.

Clear Channel reported a full-year net loss of $1.14 billion or $1.93 per share, compared with reported net income of $248.8 million, or 59 cents per share in 2000.

Revenue for 2001 was up 49% to $7.97 billion from $5.34 billion in 2000.

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