1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934 Date of Report (Date of earliest event reported) May 6, 1999 (May 4, 1999) Clear Channel Communications, Inc. (Exact name of registrant as specified in its charter) Texas (State of Incorporation) 1-9645 74-1787536 (Commission File Number) (I.R.S. Employer Identification No.) 200 Concord Plaza, Suite 600 San Antonio, Texas 78216 (210) 822-2828 (Address and telephone number of principal executive offices)

2 Clear Channel Communications, Inc. Form 8-K Item 2 ACQUISITION OF ASSETS On May 4, 1999, the Clear Channel Communications, Inc., a Texas corporation (the "Company"), closed its merger with Jacor Communications, Inc. ("Jacor"). Pursuant to the terms of the agreement, each share of Jacor common stock was exchanged for 1.1573151 shares of the Company's common stock or approximately 60.9 million shares. In addition, the Company assumed approximately $1.4 billion of Jacor's long-term debt, as well as Jacor's Liquid Yield Option Notes with an accreted value of approximately $309.4 million. Jacor options and stock appreciation rights outstanding at the time of the merger are now exercisable for approximately 3.4 million shares of the Company's common stock. In addition, Jacor common stock purchase warrants and Liquid Yield Option Notes are exercisable or convertible into approximately 12.6 million shares of our common stock. The Company refinanced $850 million of Jacor's long term debt at the closing of the merger using the Company's credit facility. This acquisition is being accounted for as a purchase with resulting goodwill of approximately $5.6 billion being amortized over 25 years on a straight-line basis. This purchase price allocation is preliminary and the results of operations of Jacor will be included in the Company's financial statements beginning May 1, 1999.

3 Item 7 FINANCIAL STATEMENTS AND EXHIBITS (a) Financial statements of business acquired. JACOR COMMUNICATIONS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except share data) (UNAUDITED) <TABLE> <CAPTION> March 31, December 31, 1999 1998 ---------- ----------- <S> <C> <C> ASSETS Current assets: Cash and cash equivalents $ 14,726 $ 20,051 Accounts receivable, less allowance for doubtful accounts of $8,407 in 1999 and $8,303 in 1998 173,538 201,466 Prepaid expenses and other 39,719 32,796 ---------- ---------- Total current assets 227,983 254,313 Property and equipment, net 293,753 281,049 Intangible assets, net 2,818,653 2,749,348 Other assets 120,725 135,998 ---------- ---------- Total assets $3,461,114 $3,420,708 ========== ========== LIABILITIES Current liabilities: Current portion long-term debt $ 35,000 $ 35,000 Accounts payable, accrued expenses and other current liabilities 153,466 128,400 ---------- ---------- Total current liabilities 188,466 163,400 Long-term debt 1,279,584 1,289,574 Liquid Yield Option Notes 308,169 306,202 Deferred tax liability 345,478 345,478 Other liabilities 114,880 112,988 Commitments and contingencies SHAREHOLDERS' EQUITY Preferred stock, authorized and unissued 4,000,000 shares -- -- Common stock, no par value, $0.01 per share stated value; authorized 100,000,000 shares, issued and outstanding shares: 51,340,273 in 1999 and 51,184,217 in 1998 513 512 Additional paid-in capital 1,129,326 1,124,057 Common stock warrants 30,599 30,819 Accumulated other comprehensive income -- 25,428 Retained earnings 64,099 22,250 ---------- ---------- Total shareholders' equity 1,224,537 1,203,066 ---------- ---------- Total liabilities and shareholders' equity $3,461,114 $3,420,708 ========== ========== </TABLE> The accompanying notes are an integral part of the condensed consolidated financial statements.

4 JACOR COMMUNICATIONS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME for the three months ended March 31, 1999 and 1998 (in thousands, except per share data) (UNAUDITED) <TABLE> <CAPTION> 1999 1998 ---------- ---------- <S> <C> <C> Broadcast revenue $ 219,714 $ 159,192 Less agency commissions 25,051 17,164 ---------- ---------- Net revenue 194,663 142,028 Broadcast operating expenses 139,756 107,353 Depreciation and amortization 35,023 27,450 Corporate general and administrative expenses 5,629 3,644 ---------- ---------- Operating income 14,255 3,581 Interest expense (29,909) (23,958) Gain on sale of assets 83,476 -- Other (expense) income, net (173) 2,479 ---------- ---------- Income (loss) before income taxes 67,649 (17,898) Income tax (expense) benefit (25,800) 11,000 ---------- ---------- Net income (loss) 41,849 (6,898) ---------- ---------- Other comprehensive income (loss) before tax: Reclassification adjustment for gains included in net income, net of taxes (25,428) -- ---------- ---------- Comprehensive income (loss) $ 16,421 $ (6,898) ========== ========== Basic net income (loss) per common share $ .82 $ (.14) ========== ========== Diluted net income (loss) per common share $ .70 $ (.14) ========== ========== Number of common shares used in Basic calculation 51,303 48,419 ========== ========== Number of common shares used in Diluted calculation 62,261 48,419 ========== ========== </TABLE> The accompanying notes are an integral part of the condensed consolidated financial statements.

5 JACOR COMMUNICATIONS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS for the three months ended March 31, 1999 and 1998 (in thousands) (UNAUDITED) <TABLE> <CAPTION> 1999 1998 ---- ---- <S> <C> <C> Cash flows from operating activities: Net cash provided by operating activities $ 46,022 $ 19,391 ---------- ---------- Cash flows from investing activities: Capital expenditures (7,713) (4,795) Cash paid for acquisitions (114,628) (34,485) Deposits on broadcast stations (7,656) (23,783) Proceeds from sale of investments 85,502 -- ---------- ---------- Net cash used by investing activities (44,495) (63,063) ---------- ---------- Cash flows from financing activities: Issuance of long-term debt 105,000 149,539 Common stock proceeds, net of issuance costs 3,148 244,939 Issuance of Liquid Yield Option Notes -- 166,950 Repayment of long-term debt (115,000) (197,500) Payment of finance costs -- (7,403) Other -- 1,862 ---------- ---------- Net cash (used) provided by financing activities (6,852) 358,387 ---------- ---------- Net (decrease) increase in cash and cash equivalents (5,325) 314,715 Cash and cash equivalents at beginning of period 20,051 28,724 ---------- ---------- Cash and cash equivalents at end of period $ 14,726 $ 343,439 ========== ========== Supplemental schedule of non-cash investing and financing activities: Fair value of assets exchanged, net of cash -- $ 70,000 Liabilities assumed in acquisitions -- 2,687 </TABLE> The accompanying notes are an integral part of the condensed consolidated financial statements.

6 JACOR COMMUNICATIONS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 1. FINANCIAL STATEMENTS The December 31, 1998 condensed consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by generally accepted accounting principles. The financial statements included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Although 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 rules and regulations, the Company believes that the disclosures are adequate to make the information presented not misleading and reflect all adjustments (consisting only of normal recurring adjustments) which are necessary for a fair presentation of results of operations for such periods. Results for interim periods may not be indicative of results for the full year. It is suggested that these condensed consolidated financial statements be read in conjunction with the consolidated financial statements for the year ended December 31, 1998 and the notes thereto. 2. CLEAR CHANNEL MERGER On October 8, 1998 the Company entered into a definitive merger agreement with Clear Channel Communications, Inc. ("Clear Channel") for a tax-free, stock for stock transaction (the "Merger" or the "Clear Channel Merger"). The Company and Clear Channel expect to consummate the Merger at the close of business May 4, 1999 or shortly thereafter. Pursuant to terms of the agreement, each share of Jacor common stock will be exchanged for 1.1573151 shares of Clear Channel common stock assuming a close on May 4, 1999. Upon consummation of the Merger, a change in control event will have occurred with respect to covenants in the Company's credit facility, liquid yield option notes and each outstanding issue of the senior subordinated notes. Such change in control would give the credit facility lenders the right to require repayment of amounts borrowed under the facility, and require the Company to offer repayment of the senior subordinated notes at 101% of the principal amount and the liquid yield option notes at their issue price plus accrued original issue discount at such date. As a result of the Merger, all options and stock appreciation rights for Jacor common stock not vested at the effective time of the Merger become fully vested and exercisable one day before the effective time of the Merger. Clear Channel will assume all of these options and stock appreciation rights on the same terms and conditions as were applicable prior to the effective time of the Merger. The holders may exercise such options and stock appreciation rights for or with respect to shares of Clear Channel common stock at an exercise price adjusted to reflect the exchange ratio of the Merger. In August 1998, the Company entered into an advisory agreement with Equity Group Investments, Inc. ("EGI"), an affiliate of the Company's largest stockholder, the Zell/Chilmark Fund L.P., whereby the Company agreed to pay EGI a fee equal to .75% of the equity value of the Company, as defined in the advisory agreement, on any change in control event.

7 JACOR COMMUNICATIONS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 3. ACQUISITIONS AND DISPOSITIONS COMPLETED RADIO STATION ACQUISITIONS January Transactions The Company acquired KEZY-FM and KORG-AM in Anaheim, California from ML Media Partners for $30.1 million in cash, of which $3.0 million was placed in escrow in 1998. The Company acquired KBKB-AM and KBKB-FM in Ft. Madison, Iowa from Talley Broadcasting for approximately $0.9 million in cash. The Company acquired KBET-AM in Los Angeles, California from Saddleback Broadcasting for $3.0 million in cash, of which $0.3 million was placed in escrow in 1998. The Company acquired the stock of WTTF, Inc., owner of WTTF-AM and WTTF-FM in Tiffin, Ohio for $2.4 million in cash, of which approximately $0.1 million was placed in escrow in 1998. The Company acquired KZSF-FM in San Francisco, California from KZSF Broadcasting for $16.5 million in cash, of which $0.8 million was placed in escrow in 1998. February Transactions The Company acquired KFYR-AM and KYYY-FM in Bismarck, North Dakota from Meyers Broadcasting for $4.8 million in cash, of which approximately $0.5 million was placed in escrow in 1998. The Company acquired WIKX-FM, WCCF-AM, and WCVU-FM in Punta Gorda, Florida from Intermart Broadcasting for approximately $7.8 million in cash, of which $0.4 million was placed in escrow in 1998. The Company acquired KVKI-FM, KRUF-FM, KITT-FM, KEEL-AM and KWKH-AM in Shreveport, Louisiana from Progressive Broadcasting for $24.0 million in cash, of which $2.3 million was placed in escrow in 1998.

8 JACOR COMMUNICATIONS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 3. ACQUISITIONS AND DISPOSITIONS, Continued March Transactions The Company acquired WDFM-FM and low-powered television station WDFM in Defiance, Ohio from Lankenau Media Network for $4.0 million in cash. The Company acquired WKST-AM and WKST-FM in New Castle, Pennsylvania from Great Scott Broadcasting for $2.5 million in cash. The Company acquired WKBN-AM and WKBN-FM in Youngstown, Ohio from WKBN Broadcasting for $11.0 million in cash, of which approximately $2.6 million was placed in escrow in 1997. The Company acquired KLLP-FM (formerly KRSS-FM) in Pocatello, Idaho from CSN International for approximately $0.8 million in cash, of which approximately $0.1 million was placed in escrow in 1998. The Company acquired KCKC-AM in San Bernadino, California from All Pro Broadcasting for $3.0 million in cash, of which approximately $0.2 million was placed in escrow in 1998. The Company acquired WBEX-AM in Chillicothe, Ohio from Secret Communications for $0.1 million in cash. Pro Forma Results of Operations The Company's 1999 completed acquisitions both individually and in the aggregate are immaterial to the Company's results of operations. Assuming the Company's significant acquisitions in 1998 were completed as of January 1, 1998, unaudited pro forma consolidated results of operations would have been as follows (in thousands except per share amounts): <TABLE> <CAPTION> Pro forma (Unaudited) Three Months Ended March 31, 1998 --------------------- <S> <C> Net revenue $ 162,453 Loss before extraordinary items $ (7,375) Diluted loss per common share before extraordinary items $ (0.14) </TABLE> These unaudited pro forma amounts do not purport to be indicative of the results that might have occurred if the foregoing transactions had been consummated on the indicated dates. RADIO STATION ACQUISITIONS AND DISPOSITIONS COMPLETED SUBSEQUENT TO MARCH 31, 1999 The Company completed the acquisitions of four radio stations in two new broadcast areas and one existing broadcast area for $4.4 million in cash, of which approximately $0.2 million was placed in escrow in 1998. The Company completed the disposition of one radio station for $5.0 million in cash.

9 JACOR COMMUNICATIONS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 3. ACQUISITIONS AND DISPOSITIONS, Continued PENDING RADIO STATION ACQUISITIONS AND DISPOSITIONS The Company has entered into agreements to purchase the FCC licenses and substantially all of the broadcast assets of 15 radio stations in six of the Company's existing broadcast areas and three new broadcast areas for approximately $166.6 million in cash, of which approximately $9.4 million has been placed in escrow. The Company has also entered into agreements to exchange the FCC licenses and substantially all of the broadcast assets of six radio stations in two broadcast areas, valued at approximately $103.0 million. 4. SUBSIDIARY GUARANTORS The Company's 10 1/8% Notes, 9 3/4% Notes, 8 3/4% Notes, and 8% Notes (the "Notes") are obligations of JCC, and are jointly and severally, fully and unconditionally guaranteed on a senior subordinated basis by Jacor and by all of the Company's subsidiaries (the "Subsidiary Guarantors"). JCC is a wholly-owned subsidiary of Jacor and the Subsidiary Guarantors are wholly-owned subsidiaries of JCC. Separate financial statements of JCC and each of the Subsidiary Guarantors are not presented because Jacor believes that such information would not be material to investors. The direct and indirect non-guarantor subsidiaries of Jacor are inconsequential, both individually and in the aggregate. Additionally, there are no current restrictions on the ability of the Subsidiary Guarantors to make distributions to JCC, except to the extent provided by law generally. JCC's credit facility and the terms of the indentures governing the Notes do restrict the ability of JCC and of the Subsidiary Guarantors to make distributions to the Registrant. Summarized financial information with respect to Jacor, JCC and with respect to the Subsidiary Guarantors on a combined basis as of March 31, 1999 and for the three months ended March 31, 1999 and 1998 is as follows: <TABLE> <CAPTION> Jacor JCC ------------------------- --------------------------- March 31, March 31, March 31, March 31, 1999 1998 1999 1998 ---- ---- ---- ---- <S> <C> <C> <C> <C> Operating Statement Data (in thousands): Net revenue -- -- -- -- Equity in earnings of subsidiaries $ (5,951) $ (5,484) $ (5,696) $ (6,463) Operating loss (12,127) (9,398) (5,696) (6,463) Income (loss) before extraordinary items 41,849 (6,898) (5,951) (5,484) Net income (loss) 41,849 (6,898) (5,951) (5,484) Balance Sheet Data (in thousands): Current assets $ 4,011 $ 21,243 Non-current assets 1,670,913 2,969,982 Current liabilities 43,071 19,980 Non-current liabilities 407,317 2,304,017 Shareholders' equity 1,224,536 667,228 </TABLE>

10 JACOR COMMUNICATIONS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 4. SUBSIDIARY GUARANTORS, Continued <TABLE> <CAPTION> Jacor JCC ------------------------- --------------------------- March 31, March 31, March 31, March 31, 1999 1998 1999 1998 ---- ---- ---- ---- <S> <C> <C> <C> <C> Statement of Cash Flow Data (in thousands): Operating activities $ (5,900) $ (3,644) $ 330 $ 2,670 Investing activities 84,653 (1,274) (122,284) (58,268) Financing activities (78,753) 167,076 116,629 200,057 Net change in cash and cash equivalents -- 162,158 (5,325) 144,459 Cash and cash equivalents at beginning of period -- (613) 20,051 29,337 Cash and cash equivalents at end of period -- 161,545 14,726 173,796 </TABLE> <TABLE> <CAPTION> Combined Subsidiary Guarantors ------------------------- March 31, March 31, 1999 1998 ---- ---- <S> <C> <C> Operating Statement Data (in thousands): Net revenue $ 194,663 $ 142,664 Equity in earnings of subsidiaries -- -- Operating income 20,431 7,495 Loss before extraordinary items (5,696) (6,463) Net loss (5,696) (6,463) Balance Sheet Data (in thousands): Current assets $ 202,729 Non-current assets 3,258,385 Current liabilities 90,416 Non-current liabilities 2,146,162 Shareholders' equity 1,224,536 Statement of Cash Flow Data (in thousands): Operating activities $ 51,592 $ 20,365 Investing activities (6,864) (3,521) Financing activities (44,728) (8,746) Net change in cash and cash equivalents -- 8,098 Cash and cash equivalents at beginning of period -- -- Cash and cash equivalents at end of period -- 8,098 </TABLE>

11 JACOR COMMUNICATIONS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 5. EARNINGS PER SHARE The following is a reconciliation of the numerators and denominators of the basic and diluted earnings per share ("EPS") computations for income before extraordinary items for the three months ended March 31, 1999 and 1998 (in thousands except per share amounts): <TABLE> <CAPTION> Three Months Ended ------------------ 1999 1998 <S> <C> <C> Net income (loss) for basic EPS $41,849 $ (6,898) LYONs interest expense, net of tax 1,906 -- ------- -------- Net income (loss) for diluted EPS $43,755 $ (6,898) ======= ======== Weighted average shares - basic 51,303 48,419 Effect of dilutive securities: Stock options 1,661 -- Warrants 2,817 -- LYONs 6,097 -- Other 383 -- ------- -------- Weighted average shares - diluted 62,261 48,419 ======= ======== Net income (loss) per common share: Basic $ 0.82 $ (0.14) Diluted $ 0.70 $ (0.14) </TABLE> The Company's 1996 Liquid Yield Option Notes and 1998 Liquid Yield Option Notes (collectively, the "LYONs") can be converted into approximately 6.1 million shares of common stock at the option of the holder. Assuming conversion of the LYONs for the three months ended March 31, 1998 would result in a decrease in the diluted net loss per share amount, therefore the LYONs are not included in the computation of diluted EPS.

12 JACOR COMMUNICATIONS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 6. SEGMENT INFORMATION The Company operates in a single reportable segment, radio, which derives its revenue from the sale of commercial broadcast inventory. The radio segment includes all of the Company's radio stations owned or operated and Premiere, a radio syndication business. The Company also aggregates into the category "other", one television station and several broadcast related businesses that provide market research, traffic reporting and satellite connectivity. Intersegment sales consist primarily of license fees for syndicated programming and broadcast services provided to the Company's radio stations. Intersegment revenues are recorded at market value. No single customer provides more than 10% of the Company's revenues, and the Company derives less than 10% of its revenues from markets outside of the U.S. "Broadcast cash flow" means operating income before depreciation and amortization and corporate general and administrative expenses. The Company's management believes that broadcast cash flow is helpful in understanding cash flow generated from its broadcasting in comparing operating performance of the Company's broadcast entities to other broadcast companies. Broadcast cash flow is also a key factor in the Company's assessment of performance. Broadcast cash flow should not be considered an alternative to net income or operating income as an indicator of the Company's overall performance. Financial information for the Company's business segment is as follows (in thousands): <TABLE> <CAPTION> QUARTER ENDED MARCH 31, 1999 RADIO OTHER CORPORATE ELIMINATIONS CONSOLIDATED ----- ----- --------- ------------ ------------ <S> <C> <C> <C> <C> <C> Net broadcast revenue $ 182,801 $ 14,290 -- $ (2,428) $ 194,663 Broadcast operating expenses 129,731 12,648 $ (250) (2,373) 139,756 Broadcast cash flow 53,070 1,642 250 (55) 54,907 Corporate expenses -- -- 5,629 -- 5,629 Depreciation 6,346 915 183 -- 7,444 Amortization 26,076 1,164 342 (3) 27,579 Operating income (loss) 20,648 (437) (5,904) (52) 14,255 Capital expenditures 6,624 240 849 -- 7,713 Radio station and other acquisitions 122,284 -- -- -- 122,284 Total assets 3,050,576 257,504 177,485 (24,451) 3,461,114 </TABLE>

13 JACOR COMMUNICATIONS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 6. SEGMENT INFORMATION, Continued <TABLE> <CAPTION> QUARTER ENDED MARCH 31, 1998 RADIO OTHER CORPORATE ELIMINATIONS CONSOLIDATED ----- ----- --------- ------------ ------------ <S> <C> <C> <C> <C> <C> Net broadcast revenue $ 127,746 $ 15,335 -- $ (1,053) $ 142,028 Broadcast operating expenses 96,417 11,989 -- (1,053) 107,353 Broadcast cash flow 31,329 3,346 -- -- 34,675 Corporate expenses -- -- $ 3,644 -- 3,644 Depreciation 4,610 838 288 -- 5,736 Amortization 20,394 991 329 -- 21,714 Operating income (loss) 6,325 1,517 (4,261) -- 3,581 Capital expenditures 2,582 939 1,274 -- 4,795 Radio station and other acquisitions 58,268 -- -- -- 58,268 Total assets 2,301,709 198,826 467,858 (3,354) 2,965,039 </TABLE>

14 (b) Pro forma financial information. UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS The following unaudited pro forma combined condensed financial statements give effect to the merger. For accounting purposes Clear Channel has accounted for the merger as a purchase of Jacor; accordingly the net assets of Jacor have been adjusted to their estimated fair values based upon a preliminary purchase price allocation. The unaudited pro forma combined condensed statements of operations for the year ended December 31, 1998 and for the three months ended March 31, 1999 give effect to the merger as if it had occurred on January 1, 1998 and 1999, respectively. The unaudited pro forma combined condensed balance sheet at March 31, 1999 gives effect to the merger as if it occurred on March 31, 1999. The unaudited pro forma combined condensed statement of operations for the year ended December 31, 1998 was prepared based upon the historical statement of operations of Clear Channel, adjusted to reflect the merger with Universal Outdoor Holding, Inc. ("Universal"), and the acquisition of More Group, Plc ("More"), as if such merger and acquisition had occurred on January 1, 1998 ("1998 Clear Channel Pro Forma"), and based upon the historical statement of operations of Jacor adjusted to reflect the acquisition of the assets of 17 radio stations from Nationwide Communications ("Nationwide") as if such acquisition had occurred on January 1, 1998 ("1998 Jacor Pro Forma"). The unaudited pro forma combined condensed statement of operations for the three months ended March 31, 1999 was prepared based upon the historical statement of operations of Clear Channel and the historical statement of operations of Jacor. The unaudited pro forma combined condensed balance sheet was prepared based upon the historical balance sheet of Clear Channel and the historical balance sheet of Jacor. Certain amounts in Jacor's financial statements have been reclassified to conform to Clear Channel's presentation. The unaudited pro forma combined condensed financial statements should be read in conjunction with the historical financial statements of Jacor and Clear Channel. The unaudited pro forma combined condensed financial statements are not necessarily indicative of the actual results of operations or financial position that would have occurred had the merger and the above described acquisitions and merger transactions of Clear Channel and Jacor occurred on the dates indicated nor are they necessarily indicative of future operating results or financial position.

15 CLEAR CHANNEL AND JACOR UNAUDITED PRO FORMA COMBINED CONDENSED BALANCE SHEET (IN THOUSANDS OF DOLLARS) MARCH 31, 1999 <TABLE> <CAPTION> CLEAR CHANNEL PRO FORMA AND JACOR CLEAR CHANNEL JACOR MERGER PRO FORMA HISTORICAL HISTORICAL ADJUSTMENT MERGER ------------- ------------ ------------ ------------ <S> <C> <C> <C> <C> ASSETS Current assets: Cash and cash equivalents.................... $ 30,290 $ 14,726 $ -- $ 45,016 Accounts receivable, net..................... 279,994 173,538 -- 453,532 Other current assets......................... 93,705 39,719 -- 133,424 ------------ ------------ ------------ ------------ Total Current Assets................... 403,989 227,983 -- 631,972 Property, plant & equipment, net............... 1,934,200 293,753 -- 2,227,953 Intangible assets: Contract valuations.......................... 386,813 400,674 -- 787,487 Licenses and goodwill........................ 4,253,564 2,628,377 2,951,677 9,833,618 Other intangible assets...................... 94,361 -- 94,361 ------------ ------------ ------------ ------------ 4,734,738 3,029,051 2,951,677 10,715,466 Less accumulated amortization.................. (369,351) (210,398) 210,398 (369,351) ------------ ------------ ------------ ------------ 4,365,387 2,818,653 3,162,075 10,346,115 Other assets: Notes receivable............................. 56,612 -- 56,612 Investments in and advances to, nonconsolidated affiliates................. 337,668 -- 337,668 Other assets................................. 117,727 120,725 -- 238,452 Other investments............................ 274,488 -- 274,488 ------------ ------------ ------------ ------------ TOTAL ASSETS........................... $ 7,490,071 $ 3,461,114 $ 3,162,075 $ 14,113,260 ============ ============ ============ ============ LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable, accrued expenses and other current liabilities........................ $ 237,462 $ 153,466 $ -- $ 390,928 Current portion of long-term debt............ 27,023 35,000 -- 62,023 ------------ ------------ ------------ ------------ Total Current Liabilities.............. 264,485 188,466 -- 452,951 Long-term debt................................. 2,260,694 1,279,584 50,000 3,590,278 Deferred income taxes.......................... 364,247 345,478 -- 709,725 Other long-term liabilities.................... 72,141 114,880 -- 187,021 Liquid yield options notes..................... -- 308,169 179,901 488,070 Minority interest.............................. 22,637 -- -- 22,637 Shareholders' equity: Preferred stock.............................. -- -- -- -- Common stock................................. 26,618 513 5,428 32,559 Additional paid-in capital................... 4,165,879 1,129,326 2,986,958 8,282,163 Common stock warrants........................ -- 30,599 3,887 34,486 Retained earnings............................ 210,926 64,099 (64,099) 210,926 Other........................................ (22,727) -- -- (22,727) Unrealized gain on investments............... 125,171 -- -- 125,171 Cost of shares held in treasury.............. -- -- -- -- ------------ ------------ ------------ ------------ Total Shareholders' Equity............. 4,505,867 1,224,537 2,932,174 8,662,578 ------------ ------------ ------------ ------------ TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY............................... $ 7,490,071 $ 3,461,114 $ 3,162,075 $ 14,113,260 ============ ============ ============ ============ </TABLE>

16 CLEAR CHANNEL AND JACOR UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENT OF OPERATIONS (IN THOUSANDS OF DOLLARS, EXCEPT PER SHARE DATA) YEAR ENDED DECEMBER 31, 1998 <TABLE> <CAPTION> CLEAR CHANNEL 1998 1998 PRO FORMA AND JACOR CLEAR CHANNEL JACOR MERGER PRO FORMA PRO FORMA PRO FORMA ADJUSTMENT MERGER ------------- --------- ---------- ------------- <S> <C> <C> <C> <C> Net revenue.......................... $ 1,550,906 $ 813,280 $ -- $ 2,364,186 Operating expenses................... 908,918 539,294 -- 1,448,212 Depreciation and amortization........ 355,473 130,300 121,639 607,412 Corporate expenses................... 44,950 21,090 -- 66,040 ----------- ----------- ----------- ----------- Operating income (loss).............. 241,565 122,596 (121,639) 242,522 Interest expense..................... 174,992 121,797 2,930 299,719 Other income (expense) -- net........ 3,211 19,802 -- 23,013 ----------- ----------- ----------- ----------- Income (loss) before income taxes.... 69,784 20,601 (124,569) (34,184) Income tax (expense) benefit......... (68,926) (24,275) 1,172 (92,029) ----------- ----------- ----------- ----------- Income (loss) before equity in earnings of nonconsolidated affiliates......................... 858 (3,674) (123,397) (126,213) Equity in earnings of nonconsolidated affiliates......... 8,091 -- -- 8,091 ----------- ----------- ----------- ----------- Net income (loss) before extraordinary items................ $ 8,949 $ (3,674) $ (123,397) $ (118,122) =========== =========== =========== =========== Net income (loss) before extraordinary items per common share: Basic.............................. $ 0.04 $ (0.39) =========== =========== Diluted............................ $ 0.04 $ (0.39) =========== =========== </TABLE>

17 CLEAR CHANNEL AND JACOR UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENT OF OPERATIONS (IN THOUSANDS OF DOLLARS, EXCEPT PER SHARE DATA) THREE MONTHS ENDED MARCH 31, 1999 <TABLE> <CAPTION> CLEAR CHANNEL PRO FORMA AND JACOR CLEAR CHANNEL JACOR MERGER PRO FORMA HISTORICAL HISTORICAL ADJUSTMENT MERGER ------------- ---------- ---------- ------------- <S> <C> <C> <C> <C> Net revenue.......................... $ 376,787 $ 194,663 $ $ 571,450 Operating expenses................... 244,822 139,756 384,578 Depreciation and amortization........ 110,648 35,023 28,222 173,893 Corporate expenses................... 12,447 5,629 18,076 ----------- ----------- ----------- ----------- Operating income (loss).............. 8,870 14,255 (28,222) (5,097) Interest expense..................... 31,832 29,909 695 62,436 Other income (expense) -- net........ 10,919 83,303 94,222 ----------- ----------- ----------- ----------- Income (loss) before income taxes.... (12,043) 67,649 (28,917) 26,689 Income tax (expense) benefit......... (2,889) (25,800) 278 (28,411) ----------- ----------- ----------- ----------- Income (loss) before equity in earnings of nonconsolidated affiliates......................... (14,932) 41,849 (28,639) (1,722) Equity in earnings of nonconsolidated affiliates......... 2,196 -- 2,196 ----------- ----------- ----------- ----------- Net income (loss) before extraordinary items................ $ (12,736) $ 41,849 $ (28,639) $ 474 =========== =========== =========== =========== Net income (loss) before extraordinary items per common share: Basic.............................. $ (0.05) $ 0.00 =========== =========== Diluted............................ $ (0.05) $ 0.00 =========== =========== </TABLE>

18 CLEAR CHANNEL AND JACOR NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS (IN THOUSANDS, EXCEPT PER SHARE DATA) Clear Channel and Jacor unaudited pro forma combined condensed financial statements reflect the merger, accounted for as a purchase, as follows: <TABLE> <S> <C> Jacor common stock outstanding (in whole shares)............ 51,333,942 Exchange ratio ............................................. 1.1573151 ------------- Clear Channel's common stock to be issued in the merger (in whole shares)............................................. 59,409,546 Estimated value per share................................... X $ 69.00 ------------- $ 4,099,259 Estimated value of common stock options..................... 22,966 Estimated transaction costs................................. 50,000 ------------- Total estimated purchase price.................... $ 4,172,225 ============= </TABLE> For purpose of these statements the total estimated purchase price was allocated as follows: <TABLE> <S> <C> Total estimated purchase price.............................. $ 4,172,225 Plus -- estimated fair value of LYONs notes in excess of carrying value............................................ 179,901 Plus -- estimated fair value of Jacor common stock warrants in excess of carrying value............................... 3,887 Less -- Jacor's net assets exchanged in the merger at March 31, 1999 adjusted for the elimination of existing net licenses and goodwill of $2,417,979.......... (1,224,041) ----------- Estimated excess purchase price (allocated to licenses and goodwill)................................................. $ 5,580,054 =========== </TABLE> The estimated excess purchase price allocated to licenses and goodwill of $5,580,054 will be amortized over a 25 year period using the straight line method which will result in annual goodwill amortization of $223,202.

19 CLEAR CHANNEL AND JACOR NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS, CONTINUED The unaudited pro forma combined condensed balance sheet is based on the assumption that Jacor's debt holders will accept the transfer of debt to Clear Channel. However, Clear Channel must offer to purchase all outstanding senior subordinated notes at 101% of the principal amount. Clear Channel must also offer to purchase all liquid yield option notes at their accreted value of $308.2 million. It is unlikely that the debt holders will accept Clear Channel's offer, as the fair value of this debt is greater than the required offer. If all of Jacor's debt holders would accept Clear Channel's offer, the pro forma total debt balance would decrease by $174.5 million. The unaudited pro forma combined condensed financial statements of operations excludes the effect of any divestiture of stations, which were required for regulatory approval, as Clear Channel intends the funds received from any divestiture to be reinvested in acquisitions of similar stations in other markets. The pro forma merger adjustments at March 31, 1999 are as follows: <TABLE> <CAPTION> INCREASE (DECREASE) ---------- <S> <C> <C> (a) Increase in goodwill and licenses equal to the excess purchase price of the merger.............................. $2,951,677 (b) Decrease in accumulated amortization resulting from the elimination of Jacor's existing accumulated amortization on goodwill............................................... 210,398 (c) Increases in long-term debt resulting from estimated merger expenses........................................... 50,000 (d) Record liquid yield option notes at estimated fair value.... 179,901 (e) Increase common stock to account for Clear Channel common stock given in the merger at $0.10 par value.............. 5,428 (f) Increase additional paid-in capital to account for Clear Channel common stock given in the merger at $69.00 per share less $0.10 par value ($2,963,992) plus the value of Jacor stock options included in the Merger ($22,966)...... 2,986,958 (g) Record common stock warrants at estimated fair value........ 3,887 (h) Eliminate Jacor's existing retained earnings balance........ (64,099) </TABLE> The pro forma merger adjustment for the three months ended March 31, 1999 and the year ended December 31, 1998 are as follows: <TABLE> <CAPTION> INCREASE (DECREASE) TO INCOME March 31, 1999 December 31, 1998 -------------- ----------------- <S> <C> <C> <C> (i) Increase in amortization expense resulting from the additional goodwill created by the merger and a change in the life of goodwill amortization from 40 years (Jacor's policy) to 25 years (Clear Channel's policy). This amortization expense results in a permanent difference and will not be deductible for federal income tax purposes.......................... $ (28,222) $ 121,639 (j) Increase in interest expense associated with the increased long-term debt resulting from the estimated merger expenses of $50,000................. (695) (2,930) (k) Decrease in income tax expense associated with the tax effect of the additional interest expense referenced in note (j) at Clear Channel's effective tax rate of 40%............................................... 278 1,172 </TABLE>

20 CLEAR CHANNEL AND JACOR NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS, CONTINUED Pro forma basic and diluted share information is as follows: <TABLE> <CAPTION> (IN THOUSANDS) ------------------------- 3/31/99 12/31/98 ------- -------- <S> <C> <C> Basic Clear Channel pro forma weighted average shares outstanding............................................... 265,850 245,572 Jacor pro forma weighted average shares outstanding......... 51,303 50,389 Increase weighted average common stock outstanding to account for Clear Channel's common stock given in the merger at the exchange ratio of 1.1573151................. 8,106 8,847 ------- ------- Clear Channel and Jacor Pro Forma Merger.................... 325,259 304,808 ======= ======= Diluted Clear Channel pro forma weighted average shares outstanding............................................... 280,918 258,635 Jacor pro forma weighted average shares outstanding......... 62,261 54,565 Increase weighted average common stock outstanding to account for Clear Channel common stock given in the merger and to account for the dilution effect of Jacor's common stock warrants, employee stock options and other dilutive shares have on the Company at the exchange ratio of 1.1573151................................................. 9,830 9,504 ------- ------- Clear Channel and Jacor Pro Forma Merger.................... 353,009 322,704 ======= ======= </TABLE>

21 CLEAR CHANNEL UNAUDITED PRO FORMA COMBINED CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (IN THOUSANDS, EXCEPT PER SHARE DATA) YEAR ENDED DECEMBER 31, 1998 <TABLE> <CAPTION> 1998 CLEAR CLEAR CHANNEL UNIVERSAL PRO FORMA MORE PRO FORMA CHANNEL HISTORICAL HISTORICAL ADJUSTMENT(1) HISTORICAL ADJUSTMENT(2) PRO FORMA ---------- ---------- ------------- ---------- ------------- ---------- <S> <C> <C> <C> <C> <C> <C> Net revenue......................... $1,350,940 $55,292 $ -- $144,674 $ -- $1,550,906 Operating expenses.................. 767,265 30,826 -- 110,827 -- 908,918 Depreciation and amortization....... 304,972 15,517 7,720 15,699 11,565 355,473 Noncash compensation expense........ -- 106 (106) 3,476 (3,476) -- Corporate expenses.................. 37,825 1,414 -- 5,711 -- 44,950 -------- ------- ------- -------- -------- ---------- Operating income (loss)............. 240,878 7,429 (7,614) 8,961 (8,089) 241,565 Interest expense.................... 135,766 13,159 -- 3,715 22,352 174,992 Other income (expense) -- net....... 12,810 (23) -- (9,576) -- 3,211 -------- ------- ------- -------- -------- ---------- Income (loss) before income taxes... 117,922 (5,753) (7,614) (4,330) (30,441) 69,784 Income tax (expense) benefit........ (72,353) -- -- (3,301) 6,728 (68,926) -------- ------- ------- -------- -------- ---------- Income (loss) before equity in earnings of nonconsolidated affiliates........................ 45,569 (5,753) (7,614) (7,631) (23,713) 858 Equity in earnings (loss) of non- consolidated affiliates........... 8,462 -- -- (371) -- 8,091 -------- ------- ------- -------- -------- ---------- Net income (loss)................... $ 54,031 $(5,753) $(7,614) $ (8,002) $(23,713) $ 8,949 ======== ======= ======= ======== ======== ========== Net income per common share: Basic............................. $ 0.23 $ 0.04 ======== ========== Diluted........................... $ 0.22 $ 0.04 ======== ========== </TABLE>

22 CLEAR CHANNEL NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS, CONTINUED UNIVERSAL MERGER (1) The pro forma merger adjustments for the year ended December 31, 1998 are as follows: <TABLE> <CAPTION> INCREASE (DECREASE) IN INCOME ------------------ <S> <C> <C> (a) Increase in amortization expense resulting from the additional goodwill created by the merger. ........... $(7,720) (b) Decrease in noncash compensation to reverse the effect of Financial Accounting Standards Board Statement No. 123 ("FAS 123") from the statement of operations as the Company elected to follow Accounting Principles Board Opinion Number 25("APB 25") for earnings presentation and implemented FAS 123 for footnote disclosure only. .... 106 </TABLE> MORE ACQUISITION (2) More is headquartered in London. Accordingly, More's financial statements are reported in British Pounds. The statement of operations was translated into US Dollars using the average exchange rate for the period and the balance sheet was translated into US Dollars using the exchange rate at the end of the period. The pro forma adjustments for the year ended December 31, 1998 are as follows: <TABLE> <CAPTION> INCREASE (DECREASE) IN INCOME ------------------ <S> <C> <C> (c) Increase in amortization expense resulting from the additional goodwill created by the acquisition. ...... $(11,565) (d) Decrease in noncash compensation to reverse the effect of FAS 123 from the statement of operations as Clear Channel elected to follow APB 25 for earnings presentation and implemented FAS 123 for footnote disclosure only. ..................................... 3,476 (e) Increase in interest expense due to financing the acquisition price of More at Clear Channel's average interest rate of 5.78% for 1998. ..................... (22,352) (f) The tax effect of adjustment (d) at the 1998 UK statutory rate of 31.5% offset by the tax benefit of adjustment (e) at Clear Channel's federal U.S. tax rate in 1998 of 35%. ................................. 6,728 </TABLE>

23 JACOR COMMUNICATIONS, INC. AND SUBSIDIARIES UNAUDITED PRO FORMA COMBINED CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (IN THOUSANDS, EXCEPT PER SHARE DATA) YEAR ENDED DECEMBER 31, 1998 <TABLE> <CAPTION> HISTORICAL NATIONWIDE SIX MONTHS NATIONWIDE ACQUISITION 1998 JACOR ENDED PRO FORMA PRO FORMA JACOR HISTORICAL JUNE 30, 1998 ADJUSTMENTS ADJUSTMENTS PRO FORMA ---------- ------------- ----------- ----------- --------- <S> <C> <C> <C> <C> <C> Net revenue................ $754,468 $50,171 $ -- $ 8,641(e) $813,280 Broadcast operating expenses................. 497,861 39,623 (738)(a) 2,548(e)(g) 539,294 Depreciation and amortization............. 120,392 5,044 299(a) 4,565(b) 130,300 Corporate general and administrative expenses................. 19,684 1,406 -- --(g) 21,090 -------- ------- ----- -------- -------- Operating income (loss).... 116,531 4,098 439 1,528 122,596 Interest expense, net...... 107,295 (452) -- 14,954(c) 121,797 Gain on sale of radio stations................. 10,896 -- -- -- 10,896 Other income (expense), net...................... 8,910 (4) -- -- 8,906 -------- ------- ----- -------- -------- Income (loss) before income taxes and extraordinary items.................... 29,042 4,546 439 (13,426) 20,601 Income tax (expense) credit................... (28,100) (1,546) -- 5,371(d) (24,275) -------- ------- ----- -------- -------- Income (loss) before extraordinary items...... $ 942 $ 3,000 $ 439 $ (8,055) $ (3,674) ======== ======= ===== ======== ======== Income (loss) per common share: Basic.................... $ 0.02 $ (0.08)(f) ======== ======== Diluted.................. $ 0.02 $ (0.08)(f) ======== ======== </TABLE>

24 JACOR COMMUNICATIONS, INC. AND SUBSIDIARIES NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (IN THOUSANDS) (a) The adjustments for the six months ended June 30, 1998 represent the elimination of time brokerage agreement fees and additional depreciation and amortization expenses resulting from the allocation of Nationwide's purchase price of KXGL in San Diego. (b) The adjustment reflects the additional depreciation and amortization expense resulting from the allocation of Jacor's purchase price to the assets acquired including an increase in property and equipment and identifiable intangible assets to their estimated fair market values. (c) The adjustment reflects additional interest expense related to additional borrowings under Jacor's credit facility, its 8% Notes and its 4 3/4% Liquid Yield Option Notes offering completed during February of 1998 to finance, in part, the acquisition of Nationwide. (d) To provide for the tax effect of pro forma adjustments using an assumed rate of 40%. (e) Additional revenues and expenses related to Nationwide Stations from July 1, 1998 to the date of acquisition consummation, net of elimination of the results for the divestiture of two San Diego stations. (f) The pro forma weighted average shares outstanding includes all shares outstanding as of December 31, 1998. The pro forma weighted averages shares outstanding of Jacor do not reflect any outstanding options and warrants or the assumed conversion of the LYON's as they are antidilutive. (g) The Company has experienced and anticipates continuing to experience significant expense savings, which are not reflected in the pro forma statements of operations, resulting from the elimination of redundant broadcast operating expenses arising from the operation of multiple stations in broadcast areas, changes in benefit plan and compensation structures to conform with Jacor's and the elimination of Nationwide's corporate office function. <TABLE> <CAPTION> YEAR ENDED DECEMBER 31, 1998 ----------------- <S> <C> ESTIMATED EXPENSE SAVINGS Corporate general and administrative..... $1,406 Benefit plan expenses.................... 1,741 Commissions.............................. 413 Promotion and programming................ 1,527 Personnel reductions..................... 1,955 Other.................................... 732 ------ TOTAL.......................... 7,774 Income Taxes............................. 3,110 ------ TOTAL, net of taxes............ $4,664 ====== </TABLE> (c) Index to Exhibits 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 hereunto duly authorized. Clear Channel Communications, Inc. Date May 6, 1999 By /s/ HERBERT W. HILL, JR. Herbert W. Hill, Jr. Senior Vice President/ Chief Accounting Officer