10-Q

FORM 10-Q

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

QUARTERLY REPORT PURSUANT TO SECTION 13 AND 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarter ended September 30, 2005 Commission file number 1-9645

CLEAR CHANNEL COMMUNICATIONS, INC.

(Exact name of registrant as specified in its charter)

Texas	74-1787539
(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 such 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 þ No o

     Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes þ No o

     Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ

     Indicate the number of shares outstanding of each class of the issuer’s classes of common stock, as of the latest practicable date.

Class	Outstanding at November 4, 2005
Common Stock, $.10 par value	540,523,925

CLEAR CHANNEL COMMUNICATIONS, INC. AND SUBSIDIARIES

INDEX

	Page No.
Part I — Financial Information
Item 1. Unaudited Financial Statements
Consolidated Balance Sheets at September 30, 2005 and December 31, 2004		3
Consolidated Statements of Operations for the nine and three months ended September 30, 2005 and 2004		5
Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2005 and 2004		6
Notes to Consolidated Financial Statements		7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		15
Item 3. Quantitative and Qualitative Disclosures About Market Risk		28
Item 4. Controls and Procedures		28
Part II — Other Information
Item 1. Legal Proceedings		29
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		29
Item 6. Exhibits		29
Signatures		30
Index to Exhibits		31
Severance Agreement and General Release
Settlement Agreement
Statement re: Computation of Per Share Earnings
Statement re: Computation of Ratios
Certification of CEO Pursuant to Section 302
Certification of CFO Pursuant to Section 302
Certification of CEO Pursuant to Section 906
Certification of CFO Pursuant to Section 906

PART I

Item 1. UNAUDITED FINANCIAL STATEMENTS

CLEAR CHANNEL COMMUNICATIONS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
ASSETS
(In thousands)

	September 30,		December 31,
	2005		2004
	(Unaudited)		(Audited)
Current Assets
Cash and cash equivalents	$	412,746	$	210,476
Accounts receivable, less allowance of $60,082 at September 30, 2005 and $57,574 at December 31, 2004		1,752,210		1,658,650
Prepaid expenses		340,816		213,387
Other current assets		195,527		187,409
Total Current Assets		2,701,299		2,269,922
Property, Plant and Equipment
Land, buildings and improvements		1,762,793		1,740,990
Structures		3,287,778		3,110,233
Towers, transmitter and studio equipment		877,171		845,295
Furniture and other equipment		773,268		779,632
Construction in progress		145,598		95,305
		6,846,608		6,571,455
Less accumulated depreciation		2,750,375		2,447,181
		4,096,233		4,124,274
Intangible Assets
Definite-lived intangibles, net		531,281		629,663
Indefinite-lived intangibles — licenses		4,309,788		4,323,297
Indefinite-lived intangibles — permits		212,507		211,690
Goodwill		7,321,580		7,220,444
Other Assets
Notes receivable		15,800		16,801
Investments in, and advances to, nonconsolidated affiliates		325,111		395,371
Other assets		405,452		348,898
Other investments		390,395		387,589
Total Assets	$	20,309,446	$	19,927,949

See Notes to Consolidated Financial Statements

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CLEAR CHANNEL COMMUNICATIONS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND SHAREHOLDERS’ EQUITY
(In thousands)

	September 30,			December 31,
	2005			2004
	(Unaudited)			(Audited)
Current Liabilities
Accounts payable and accrued expenses	$	1,486,491		$	1,295,106
Accrued interest		102,315			95,525
Accrued income taxes		23,878			34,683
Current portion of long-term debt		176,490			417,275
Deferred income		381,508			317,682
Other current liabilities		21,983			24,281
Total Current Liabilities		2,192,665			2,184,552
Long-term debt		7,824,554			6,962,560
Other long-term obligations		213,912			283,937
Deferred income taxes		413,383			237,827
Other long-term liabilities		686,873			703,766
Minority interest		192,056			67,229
Commitments and contingent liabilities (Note 6)
Shareholders’ Equity
Common stock		54,241			56,757
Additional paid-in capital		28,360,743			29,183,595
Accumulated deficit		(19,732,074	)		(19,933,777	)
Accumulated other comprehensive income		110,743			194,590
Other		—			(213	)
Cost of shares held in treasury		(7,650	)		(12,874	)
Total shareholders’ equity		8,786,003			9,488,078
Total Liabilities and Shareholders’ Equity	$	20,309,446		$	19,927,949

See Notes to Consolidated Financial Statements

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CLEAR CHANNEL COMMUNICATIONS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(In thousands, except per share data)

	Nine Months Ended						Three Months Ended
	September 30,						September 30,
	2005			2004			2005			2004
Revenue	$	7,020,570		$	7,103,473		$	2,676,879		$	2,648,873
Operating expenses:
Divisional operating expenses (excludes non-cash compensation expense of $212, $714, $-0- and $221 for the nine months ended and three months ended September 30, 2005 and 2004, respectively)		5,279,508			5,197,225			2,009,274			1,937,194
Non-cash compensation expense		6,164			2,619			2,725			786
Depreciation and amortization		511,050			511,062			169,667			170,150
Corporate expenses (excludes non-cash compensation expense of $5,952, $1,905, $2,725 and $565 for the nine months ended and three months ended September 30, 2005 and 2004, respectively)		149,539			142,590			49,966			46,645
Operating income		1,074,309			1,249,977			445,247			494,098
Interest expense		325,936			266,815			113,666			91,607
Gain (loss) on marketable securities		(278	)		47,705			(815	)		3,485
Equity in earnings of nonconsolidated affiliates		28,318			20,504			12,341			3,194
Other income (expense) — net		7,207			(20,586	)		(3,477	)		(622	)
Income before income taxes		783,620			1,030,785			339,630			408,548
Income tax (expense) benefit:
Current		(157,389	)		(296,945	)		(47,999	)		(44,072	)
Deferred		(152,142	)		(102,376	)		(86,156	)		(103,242	)
Net income		474,089			631,464			205,475			261,234
Other comprehensive income, net of tax:
Foreign currency translation adjustments		(91,225	)		(10,168	)		3,344			16,833
Unrealized gain (loss) on securities:
Unrealized holding gain (loss) on marketable securities		(5,135	)		11,995			13,838			19,348
Unrealized holding gain (loss) on cash flow derivatives		12,513			(33,012	)		(9,644	)		(16,498	)
Reclassification adjustment for (gains) losses included in net income (loss)		—			(32,513	)		—			—
Comprehensive income	$	390,242		$	567,766		$	213,013		$	280,917
Net income per common share:
Basic	$	.86		$	1.04		$	.38		$	.45
Diluted	$	.86		$	1.04		$	.38		$	.44
Dividends declared per share	$	.50		$	.325		$	.1875		$	.125

See Notes to Consolidated Financial Statements

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CLEAR CHANNEL COMMUNICATIONS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(In thousands)

	Nine Months Ended September 30,
	2005			2004
Cash Flows from operating activities:
Net income	$	474,089		$	631,464
Reconciling Items:
Depreciation and amortization		511,050			511,062
Deferred taxes		152,142			102,376
(Gain) loss on disposal of assets		(10,975	)		(10,773	)
(Gain) loss on available-for-sale securities		—			(48,429	)
(Gain) loss forward exchange contract		13,447			9,832
(Gain) loss on trading securities		(13,169	)		(9,108	)
Increase (decrease) other — net		(15,185	)		4,452
Changes in operating assets and liabilities:
Increase (decrease) in accrued income and other taxes		(46,875	)		116,306
Changes in other operating assets and liabilities, net of effects of acquisitions		5,604			(8,245	)
Net cash provided by operating activities		1,070,128			1,298,937
Cash flows from investing activities:
(Investment in) liquidation of restricted cash, net		—			(7,809	)
Decrease (increase) in notes receivable — net		1,001			2,088
Decrease (increase) in investments in and advances to nonconsolidated affiliates — net		12,374			2,015
Purchases of investments		(707	)		(1,287	)
Proceeds from sale of investments		370			627,505
Purchases of property, plant and equipment		(291,350	)		(242,659	)
Proceeds from disposal of assets		24,176			25,968
Proceeds from divestitures placed in restricted cash		—			47,838
Acquisition of operating assets, net of cash acquired		(158,187	)		(137,919	)
Acquisition of operating assets with restricted cash		—			(39,857	)
Decrease (increase) in other—net		(6,691	)		(25,192	)
Net cash (used in) provided by investing activities		(419,014	)		250,691
Cash flows from financing activities:
Draws on credit facilities		1,591,074			3,691,149
Payments on credit facilities		(752,995	)		(3,681,265	)
Proceeds from long-term debt		21,257			753,545
Payments on long-term debt		(236,589	)		(617,101	)
Payments for purchase of treasury shares		(859,140	)		(1,428,103	)
Proceeds from exercise of stock options, stock purchase plan and common stock warrants		29,052			22,889
Dividends paid		(241,503	)		(183,452	)
Net cash used in financing activities		(448,844	)		(1,442,338	)
Net increase in cash and cash equivalents		202,270			107,290
Cash and cash equivalents at beginning of period		210,476			123,334
Cash and cash equivalents at end of period	$	412,746		$	230,624

See Notes to Consolidated Financial Statements

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CLEAR CHANNEL COMMUNICATIONS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     Preparation of Interim Financial Statements

The consolidated financial statements have been prepared by Clear Channel Communications, Inc. (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 in the United States 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 2004 Annual Report on Form 10-K.

The consolidated financial statements include the accounts of the Company and its subsidiaries, the majority of which are wholly-owned. 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 are accounted for under the equity method. All significant intercompany transactions are eliminated in the consolidation process. Certain reclassifications have been made to the 2004 consolidated financial statements to conform to 2005 presentation.

     Stock-Based Compensation

The Company accounts for its stock-based award plans in accordance with Accounting Principles Board (“APB”) Opinion No. 25, Accounting for Stock Issued to Employees, and related interpretations, under which compensation expense is recorded to the extent that the market price on the grant date of the underlying stock exceeds the exercise price. The required pro forma net income and pro forma earnings per share as if the stock-based awards had been accounted for using the provisions of Statement of Financial Accounting Standards No. 123, Accounting for Stock-Based Compensation, are as follows:

	Nine Months Ended September 30,						Three Months Ended September 30,
(In thousands, except per share data)	2005			2004			2005			2004
Net income
Reported	$	474,089		$	631,464		$	205,475		$	261,234
Pro forma stock compensation expense, net of tax		(18,878	)		(58,213	)		(2,902	)		(20,628	)
Pro Forma	$	455,211		$	573,251		$	202,573		$	240,606
Net income per common share
Basic:
Reported	$	.86		$	1.04		$	.38		$	.45
Pro Forma	$	.83		$	.95		$	.37		$	.41
Diluted:
Reported	$	.86		$	1.04		$	.38		$	.44
Pro Forma	$	.83		$	.94		$	.37		$	.41

The fair value for these options was estimated at the date of grant using a Black-Scholes option-pricing model with the following weighted average assumptions for 2005 and 2004:

	2005			2004
Risk-free interest rate		4.06% — 4.20	%		2.21% — 4.30	%
Dividend yield		2.30	%		.90% — 1.46	%
Volatility factors		25	%		42% — 50	%
Expected life in years		5.0 - 7.5			3.0 — 7.5

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     Recent Accounting Pronouncements

In March 2005, the Financial Accounting Standards Board (“FASB”) issued Interpretation No. 47, Accounting for Conditional Asset Retirement Obligations (“FIN 47”). FIN 47 is an interpretation of FASB Statement 143, Accounting for Asset Retirement Obligations, which was issued in June 2001. According to FIN 47, uncertainty about the timing and (or) method of settlement because they are conditional on a future event that may or may not be within the control of the entity should be factored into the measurement of the asset retirement obligation when sufficient information exists. FIN 47 also clarifies when an entity would have sufficient information to reasonably estimate the fair value of an asset retirement obligation. FIN 47 is effective no later than the end of fiscal years ending after December 15, 2005. Retrospective application of interim financial information is permitted, but is not required. The Company adopted FIN 47 on January 1, 2005, which did not materially impact the Company’s financial position or results of operations.

In March 2005, the SEC issued Staff Accounting Bulletin No. 107 Share-Based Payment (“SAB 107”). SAB 107 expresses the SEC staff’s views regarding the interaction between Statement of Financial Accounting Standards No. 123(R) Share-Based Payment (“Statement 123(R)”) and certain SEC rules and regulations and provides the staff’s views regarding the valuation of share-based payment arrangements for public companies. In particular, SAB 107 provides guidance related to share-based payment transactions with nonemployees, the transition from nonpublic to public entity status, valuation methods (including assumptions such as expected volatility and expected term), the accounting for certain redeemable financial instruments issued under share-based payment arrangements, the classification of compensation expense, non-GAAP financial measures, first time adoption of Statement 123(R) in an interim period, capitalization of compensation cost related to share-based payment arrangements, the accounting for income tax effects of share-based payment arrangements upon adoption of Statement 123(R) and the modification of employee share options prior to adoption of Statement 123(R). The Company is unable to quantify the impact of adopting SAB 107 and Statement 123(R) at this time because it will depend on levels of share-based payments granted in the future. Additionally, the Company is still evaluating the assumptions it will use upon adoption.

In April 2005, the SEC issued a press release announcing that it would provide for phased-in implementation guidance for Statement 123(R). The SEC would require that registrants that are not small business issuers adopt Statement 123(R)’s fair value method of accounting for share-based payments to employees no later than the beginning of the first fiscal year beginning after June 15, 2005. The Company intends to adopt Statement 123(R) on January 1, 2006.

In June 2005, the Emerging Issues Task Force (“EITF”) issued EITF 05-6, Determining the Amortization Period of Leasehold Improvements (“EITF 05-6”). EITF 05-6 requires that assets recognized under capital leases generally be amortized in a manner consistent with the lessee’s normal depreciation policy except that the amortization period is limited to the lease term (which includes renewal periods that are reasonably assured). EITF 05-6 also addresses the determination of the amortization period for leasehold improvements that are purchased subsequent to the inception of the lease. Leasehold improvements acquired in a business combination or purchased subsequent to the inception of the lease should be amortized over the lesser of the useful life of the asset or the lease term that includes reasonably assured lease renewals as determined on the date of the acquisition of the leasehold improvement. The Company adopted EITF 05-6 on July 1, 2005 which did not materially impact its financial position or results of operations.

In October 2005, the FASB issued Staff Position 13-1 (“FSP 13-1”). FSP 13-1 requires rental costs associated with ground or building operating leases that are incurred during a construction period be recognized as rental expense. The guidance in FSP 13-1 shall be applied to the first reporting period beginning after December 15, 2005. The Company will adopt FSP 13-1 January 1, 2006 and does not anticipate adoption to materially impact its financial position or results of operations.

Note 2: INTANGIBLE ASSETS AND GOODWILL

     Definite-lived Intangibles

The Company has definite-lived intangible assets which consist primarily of transit and street furniture contracts and other contractual rights in the outdoor segment, talent and program right contracts in the radio segment, and contracts for non-affiliated radio and television stations in the Company’s media representation operations, all of which are amortized over the respective lives of the agreements. Other definite-lived intangible assets are amortized 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 September 30, 2005 and December 31, 2004:

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	September 30, 2005				December 31, 2004
	Gross				Gross
	Carrying		Accumulated		Carrying		Accumulated
(In thousands)	Amount		Amortization		Amount		Amortization
Transit, street furniture, and other outdoor contractual rights	$	641,316	$	396,720	$	688,373	$	364,939
Talent contracts		202,161		170,818		202,161		155,647
Representation contracts		300,170		123,836		268,283		94,078
Other		193,962		114,954		197,462		111,952
Total	$	1,337,609	$	806,328	$	1,356,279	$	726,616

Total amortization expense from definite-lived intangible assets for the three and nine months ended September 30, 2005 and for the year ended December 31, 2004 was $36.8 million, $115.0 million and $136.6 million, respectively. 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)
2006	$	121,272
2007		72,921
2008		38,121
2009		30,986
2010		21,667

As acquisitions and dispositions occur in the future and as purchase price allocations are finalized, amortization expense may vary.

     Indefinite-lived Intangibles

The Company’s indefinite-lived intangible assets consist of FCC broadcast licenses and billboard permits. FCC broadcast licenses are granted to both radio and television stations for up to eight years under the Telecommunications Act of 1996. The Act requires the FCC to renew a broadcast license if: it 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 issued in perpetuity by state and local governments and are transferable or renewable at little or no cost. Permits typically include the location for which the permit allows the Company the right to operate an advertising structure. The Company’s permits are located on either owned or leased land. In cases where the Company’s permits are located on leased land, the leases are typically from 10 to 30 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 Company does not amortize its FCC broadcast licenses or billboard permits. The Company tests these indefinite-lived intangible assets for impairment at least annually using the direct method. Under the direct 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.

Under the direct method, the Company continues to aggregate its indefinite-lived intangible assets at the market level for purposes of impairment testing. The Company’s key assumptions using the direct 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.

     Goodwill

The Company tests goodwill for impairment using 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. 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.

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The following table presents the changes in the carrying amount of goodwill in each of the Company’s reportable segments for the nine-month period ended September 30, 2005:

(In thousands)	Radio			Outdoor			Entertainment			Other		Total
Balance as of December 31, 2004	$	6,369,182		$	787,694		$	34,429		$	29,139	$	7,220,444
Acquisitions		16,683			17,287			99,834			13,784		147,588
Dispositions		(1,253	)		—			—			—		(1,253	)
Foreign currency		—			(42,049	)		(852	)		—		(42,901	)
Adjustments		(117	)		(1,733	)		(448	)		—		(2,298	)
Balance as of September 30, 2005	$	6,384,495		$	761,199		$	132,963		$	42,923	$	7,321,580

Note 3: DERIVATIVE INSTRUMENTS

The Company holds a net purchased option (the “collar”) under a secured forward exchange contract that limits its exposure to and benefit from price fluctuations in XM Satellite Radio Holding, Inc. (“XMSR”) over the term of the contract. The collar is accounted for as a hedge of the forecasted sale of the underlying shares. At September 30, 2005 and December 31, 2004, the fair value of the collar was a liability recorded in “Other long-term obligations” of $188.0 million and $208.1 million, respectively, and the amount recorded in other comprehensive income (loss), net of tax, related to the change in fair value of the collar for the nine months ended September 30, 2005 and the year ended December 31, 2004 was $12.5 million, and $(65.8) million, respectively.

The Company also holds options under two secured forward exchange contracts that limit its exposure to and benefit from price fluctuations in American Tower Corporation (“AMT”) over the terms of the contracts. These options are not designated as hedges of the underlying shares of AMT. The AMT contracts had a value of $16.4 million and $29.9 million at September 30, 2005 and December 31, 2004, respectively, recorded in “Other assets”. For the nine months ended September 30, 2005 and year ended December 31, 2004, the Company recognized losses of $13.4 million and $17.4 million, respectively, in “Gain (loss) on marketable securities” related to the change in fair value of the options. To offset the change in the fair value of these contracts, the Company has recorded AMT shares as trading securities. During the nine months ended September 30, 2005 and year ended December 31, 2004, the Company recognized gains of $13.2 million and $15.2 million, respectively, in “Gain (loss) on marketable securities” related to the change in the fair value of the shares.

As a result of the Company’s foreign operations, the Company is exposed to foreign currency exchange risks related to its investment in net assets in foreign countries. To manage this risk, the Company entered into two United States dollar — Euro cross currency swaps with an aggregate Euro notional amount of €706.0 million and a corresponding aggregate U.S. dollar notional amount of $877.7 million. These cross currency swaps had a value of $26.0 million and $75.8 million at September 30, 2005 and December 31, 2004, respectively, which was recorded in “Other long-term obligations”. These cross currency swaps require the Company to make fixed cash payments on the Euro notional amount while it receives fixed cash payments on the equivalent U.S. dollar notional amount, all on a semiannual basis. The Company has designated these cross currency swaps as a hedge of its net investment in Euro denominated assets. The Company selected the forward method under the guidance of the Derivatives Implementation Group Statement 133 Implementation Issue H8, Foreign Currency Hedges: Measuring the Amount of Ineffectiveness in a Net Investment Hedge. The forward method requires all changes in the fair value of the cross currency swaps and the semiannual cash payments to be reported as a cumulative translation adjustment in other comprehensive income (loss) in the same manner as the underlying hedged net assets. As of the nine months ended September 30, 2005 and year ended December 31, 2004, a loss, net of tax of $15.8 million, and $47.5 million, respectively, was recorded as a cumulative translation adjustment to other comprehensive income (loss) related to the cross currency swap.

Note 4: RECENT DEVELOPMENTS

     Company Share Repurchase Program

On February 1, 2005 (“February 2005 Program”), the Company’s Board of Directors authorized its third share repurchase program of up to $1.0 billion effective immediately. The first two share repurchase programs, each for $1.0 billion, were authorized during 2004 and have each been completed. On August 9, 2005, the Company’s Board of Directors authorized a $692.6 million increase to the existing balance of the February 2005 Program, bringing the authorized amount to an aggregate of $1.0 billion. The increase in the February 2005 Program was effective immediately, and expires on August 8, 2006, although the program may be discontinued or suspended at any time prior to its expiration. As of September 30, 2005, the Company had purchased 77.4 million shares for an aggregate purchase price of $2.7 billion, including commission and fees, under its repurchase programs.

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     Clear Media Limited (“Clear Media”)

In July, 2005, the Company increased its investment in Clear Media, a Chinese company that operates street furniture displays throughout China, to a controlling majority ownership interest. As a result, the Company began consolidating the results of Clear Media in the third quarter of 2005. The Company had been accounting for Clear Media as an equity investment prior to July 2005. The net assets of Clear Media represent less than 2% of the Company’s consolidated net assets at September 30, 2005.

     Recent Legal Proceedings

At the U.S. House Judiciary Committee hearing on July 29, 2003, an Assistant United States Attorney General announced that the Department of Justice (“DOJ”) is pursuing two separate antitrust inquiries concerning the Company. One inquiry is whether the Company has violated antitrust laws in one of our radio markets. The other is whether the Company has tied radio airplay or the use of certain concert venues to the use of the Company’s concert promotion services, in violation of antitrust laws. The Company is cooperating with DOJ requests.

On September 9, 2003, the Assistant United States Attorney for the Eastern District of Missouri caused a Subpoena to Testify before Grand Jury to be issued to the Company. The Subpoena requires the Company to produce certain information regarding commercial advertising run on behalf of offshore and/or online (Internet) gambling businesses, including sports bookmaking and casino-style gambling. The Company is cooperating with such requirements.

On February 7, 2005, the Company received a subpoena from the State of New York Attorney General’s office, requesting information on policies and practices regarding record promotion on radio stations in the state of New York. The Company is cooperating with this subpoena.

The Company is among the defendants in a lawsuit filed September 3, 2002 by JamSports in United States Federal District Court for the Northern District of Illinois. The plaintiff alleged that the Company violated federal antitrust laws and wrongfully interfered with plaintiff’s business and contractual rights. On March 21, 2005, the jury rendered its verdict finding that the Company had not violated the antitrust laws, but had tortiously interfered with a contract which the plaintiff had entered into with co-defendant AMA Pro Racing and with the plaintiff’s prospective economic advantage. In connection with the findings regarding tortious interference, the jury awarded to the plaintiffs approximately $17.0 million in lost profits and $73.0 million in punitive damages. In April, 2005, the Company filed a Renewed Motion for Judgment as a Matter of Law and Motion For a New Trial, to seek a judgment notwithstanding the verdict or a new trial from the U.S. District Court that tried the case. On August 15, 2005, the District Court granted that motion in part, granting judgment in favor of the Clear Channel defendants on the plaintiff’s claim for tortious interference with prospective economic advantage and granting the Clear Channel defendants a new trial with respect to the issue of damages on the plaintiff’s claim for tortious interference with contract. The District Court has set a new date for this trial, on February 6, 2006. The Company is vigorously defending this remaining claim.

The Company is also currently involved in certain other legal proceedings and, as required, has accrued an estimate of the probable costs for the resolution of these claims, inclusive of those discussed above. 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.

Note 5: RESTRUCTURING

The following table represents the Company’s restructuring activities of acquired businesses, including the 2000 restructuring of the AMFM Inc. (“AMFM”) and SFX Entertainment, Inc. (“SFX”) operations, the 2002 restructuring of The Ackerley Group, Inc. (“Ackerley”) operations, and the 2005 restructuring of the Mean Fiddler Music Group Plc (“Mean Fiddler”) operations:

	Nine Months Ended			Year Ended
(In thousands)	September 30, 2005			December 31, 2004
Severance and lease termination costs:
Accrual at January 1	$	11,015		$	57,140
Estimated restructuring accruals		5,390			—
Adjustments to restructuring accrual		—			(43,623	)
Payments charged against restructuring accrual		(2,215	)		(2,502	)
Ending balance of severance and lease termination accrual	$	14,190		$	11,015

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During 2005, the Company acquired a controlling majority interest in Mean Fiddler, a promoter of music festivals and venues in the United Kingdom. As part of the acquisition, the Company recorded approximately $5.4 million in restructuring costs primarily related to lease terminations, which it expects to pay over the next several years. The remaining severance and lease termination accrual for AMFM, SFX, Ackerley and Mean Fiddler at September 30, 2005 is comprised of $2.0 million of severance and $12.2 million of lease termination costs. The severance accrual includes amounts that will be paid over the next several years related to deferred payments to former employees as well as other compensation. The lease termination accrual will be paid over the next several years. During the first nine months of 2005, $1.0 million was paid and charged to the restructuring accrual relating to severance. During 2004, the Company reduced its restructuring reserve by approximately $43.6 million, as amounts previously recorded were no longer expected to be paid. This reversal was recorded as an adjustment to the purchase price. Any future potential excess reserves will be recorded as an adjustment to the purchase price.

In addition to the restructurings described above, the Company restructured its outdoor operations in France during the third quarter of 2005. As a result, the Company recorded $26.6 million in restructuring costs as a component of divisional operating expenses during the third quarter of 2005; $22.5 million was related to severance costs and $4.1 million was related to other costs. It has been announced that the restructuring will result in the termination of 101 employees. During the third quarter, $2.7 million of related costs were paid and charged to the restructuring accrual. As of September 30, 2005, the accrual balance was $23.9 million.

Also, the Company restructured its outdoor advertising operations in Spain and France during 2004 and 2003, respectively. As a result of the Spain restructuring, the Company recorded in 2004 a $4.1 million accrual in divisional operating expenses; $2.2 million was related to severance and $1.9 million was related to consulting and other costs. As a result of the France restructuring, the Company recorded in 2003 a $13.8 million accrual in divisional operating expenses; $12.5 million was related to severance and $1.3 million was related to lease terminations and consulting costs. As of September 30, 2005, the aggregate accrual balance relating to the Spain and France restructuring was $2.5 million. It is expected that these accruals will be paid in the current year. These restructurings have resulted in the termination of 178 employees.

Note 6: COMMITMENTS AND CONTINGENCIES

Certain agreements relating to acquisitions provide for purchase price adjustments and other future contingent payments based on the financial performance of the acquired companies. 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 are met, would not significantly impact the financial position or results of operations of the Company.

As discussed in Note 4, there are various lawsuits and claims pending against the Company. Based on current assumptions, the Company has accrued its estimate of the probable costs for the resolution of these claims. Future results of operations could be materially affected by changes in these assumptions.

Note 7: GUARANTEES

As of September 30, 2005, the Company guaranteed third party debt of approximately $13.4 million. The guarantees arose primarily in 2000 in conjunction with the Company entering into long-term contracts with third parties. The operating assets associated with these contracts secure the debt that the Company has guaranteed. Only to the extent that the assets are either sold by the third-party for less than the guaranteed amount or the third party is unable to service the debt will the Company be required to make a cash payment under the guarantee. As of September 30, 2005, it is not probable that the Company will be required to make a payment under these guarantees. Thus, as of September 30, 2005, the guarantees associated with long-term operating contracts are not recorded on the Company’s financial statements. These guarantees are included in the Company’s calculation of its leverage ratio covenant under the bank credit facility.

Within the Company’s $1.75 billion credit facility, there exists a $150.0 million sub-limit available to certain of the Company’s international subsidiaries. This $150.0 million sub-limit allows for borrowings in various foreign currencies, which are used to hedge net assets in those currencies and provides funds to the Company’s international operations for certain working capital needs. Subsidiary borrowings under this sub-limit are guaranteed by the Company. At September 30, 2005, this portion of the $1.75 billion credit facility’s outstanding balance was $49.7 million. At September 30, 2005, this outstanding balance is recorded in “Long-term debt” on the Company’s financial statements.

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Within the Company’s bank credit facility agreement is a provision that requires the Company to reimburse lenders for any increased costs that they may incur in an event of a change in law, rule or regulation resulting in their reduced returns from any change in capital requirements. In addition to not being able to estimate the potential amount of any future payment under this provision, the Company is not able to predict if such event will ever occur.

The Company currently has guarantees that provide protection to its international subsidiaries’ banking institutions related to overdraft lines and credit card charge-back transactions up to approximately $65.5 million. As of September 30, 2005, no amounts were outstanding under these agreements.

As of September 30, 2005, the Company has outstanding commercial standby letters of credit and surety bonds of $230.0 million and $44.6 million, respectively, that primarily expire during the next twelve months. These letters of credit and surety bonds relate to various operational matters including insurance, bid and performance bonds as well as other items. These letters of credit are included in the Company’s calculation of its leverage ratio covenant under the bank credit facility. The surety bonds are not considered borrowings under the Company’s bank credit facility.

Note 8: SEGMENT DATA

The Company has three reportable segments, which it believes best reflects how the Company is currently managed – radio broadcasting, outdoor advertising and live entertainment. The category “other” includes television broadcasting, sports representation and media representation. Revenue and expenses earned and charged between segments are recorded at fair value and eliminated in consolidation.

	Radio		Outdoor		Live
(In thousands)	Broadcasting		Advertising		Entertainment		Other		Corporate			Eliminations			Consolidated
Nine Months Ended September 30, 2005
Revenue	$	2,624,736	$	1,931,470	$	2,137,441	$	429,577	$	¾		$	(102,654	)	$	7,020,570
Divisional operating expenses		1,612,039		1,400,603		2,012,670		356,850		¾			(102,654	)		5,279,508
Non-cash compensation		212		¾		¾		¾		5,952			¾			6,164
Depreciation and amortization		106,309		290,233		47,703		52,652		14,153			¾			511,050
Corporate expenses		—		—		—		—		149,539			—			149,539
Operating income (loss)	$	906,176	$	240,634	$	77,068	$	20,075	$	(169,644	)	$	¾		$	1,074,309
Intersegment revenues	$	36,102	$	7,049	$	550	$	58,953	$	¾		$	¾		$	102,654
Identifiable assets	$	12,246,440	$	4,833,310	$	1,707,462	$	1,205,938	$	316,296		$	¾		$	20,309,446
Capital expenditures	$	65,806	$	137,222	$	71,997	$	11,064	$	5,261		$	¾		$	291,350
Three Months Ended September 30, 2005
Revenue	$	919,245	$	668,003	$	983,454	$	145,120	$	¾		$	(38,943	)	$	2,676,879
Divisional operating expenses		546,615		483,379		897,959		120,264		¾			(38,943	)		2,009,274
Non-cash compensation		¾		¾		¾		¾		2,725			¾			2,725
Depreciation and amortization		36,185		95,405		15,341		18,054		4,682			¾			169,667
Corporate expenses		—		—		—		—		49,966			—			49,966
Operating income (loss)	$	336,445	$	89,219	$	70,154	$	6,802	$	(57,373	)	$	¾		$	445,247
Intersegment revenues	$	13,089	$	1,670	$	78	$	24,106	$	¾		$	¾		$	38,943
Nine Months Ended September 30, 2004
Revenue	$	2,789,834	$	1,761,308	$	2,223,114	$	429,591	$	¾		$	(100,374	)	$	7,103,473
Divisional operating expenses		1,603,276		1,277,110		2,069,432		347,781		¾			(100,374	)		5,197,225
Non-cash compensation		714		¾		¾		¾		1,905			¾			2,619
Depreciation and amortization		113,653		288,810		45,577		47,358		15,664			¾			511,062
Corporate expenses		—		—		—		—		142,590			—			142,590
Operating income (loss)	$	1,072,191	$	195,388	$	108,105	$	34,452	$	(160,159	)	$	¾		$	1,249,977
Intersegment revenues	$	43,221	$	9,701	$	497	$	46,955	$	¾		$	¾		$	100,374
Identifiable assets	$	19,740,902	$	4,804,175	$	1,506,654	$	1,425,597	$	299,398		$	¾		$	27,776,726
Capital expenditures	$	44,976	$	116,507	$	62,008	$	10,565	$	8,603		$	¾		$	242,659

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	Radio		Outdoor		Live
(In thousands)	Broadcasting		Advertising		Entertainment		Other		Corporate			Eliminations			Consolidated
Three Months Ended September 30, 2004
Revenue	$	960,066	$	600,166	$	974,675	$	147,313	$	¾		$	(33,347	)	$	2,648,873
Divisional operating expenses		538,179		431,383		883,645		117,334		¾			(33,347	)		1,937,194
Non-cash compensation		221		¾		¾		¾		565			¾			786
Depreciation and amortization		37,887		96,254		15,134		15,774		5,101			¾			170,150
Corporate expenses		—		—		—		—		46,645			—			46,645
Operating income (loss)	$	383,779	$	72,529	$	75,896	$	14,205	$	(52,311	)	$	¾		$	494,098
Intersegment revenues	$	14,181	$	2,446	$	30	$	16,690	$	¾		$	¾		$	33,347

Net revenue of $1.8 billion and $660.7 million for the nine and three months ended September 30, 2005, respectively, and $1.6 billion and $579.2 million for the nine and three months ended September 30, 2004, respectively, and identifiable assets of $2.9 billion and $2.5 billion as of September 30, 2005 and 2004, respectively, are included in the data above and are derived from the Company’s foreign operations.

Note 9: STRATEGIC REALIGNMENT

On April 29, 2005, the Company announced a plan to strategically realign its businesses. This plan includes an initial public offering (“IPO”) of approximately 10% of the common stock of the Company’s outdoor business (“Clear Channel Outdoor”) and a 100% spin-off of its entertainment business (“Clear Channel Entertainment”). The closing of the IPO and spin-off of Clear Channel Entertainment are subject to approval of the Company’s Board of Directors, receipt of a tax opinion of counsel and letter ruling from the IRS relating to the Clear Channel Entertainment spin-off, favorable market conditions, effectiveness of registration statements filed with the Securities and Exchange Commission and other customary conditions.

It is the Company’s current intention to return approximately $1.6 billion of capital to shareholders through either share repurchases, a special dividend or a combination of both. Since announcing its intent on August 9, 2005, the Company has returned $117.1 million to shareholders by repurchasing 3.8 million shares of its common stock. It is the Company’s current intention to pay a special dividend in 2006 after taking into account the results of the Company’s share repurchases, and subject to the Company’s financial condition, and market and economic conditions among other factors. The Company intends to fund any share repurchases and/or a special dividend from funds generated from the repayment of intercompany debt, the proceeds of any new debt offerings, available cash balances and cash flow from operations. The timing and amount of a special dividend, if any, is in the discretion of the Board of Directors and will be based on the economic and market factors described above, among others.

Note 10: SUBSEQUENT EVENTS

On October 26, 2005, the Company’s Board of Directors declared a quarterly cash dividend of $0.1875 per share on the Company’s Common Stock. The dividend is payable on January 15, 2006 to shareholders of record at the close of business on December 31, 2005.

From October 1, 2005 through November 4, 2005, 3.8 million shares were repurchased for an aggregate purchase price of $117.1 million, including commissions and fees, under the Company’s share repurchase program. At November 4, 2005 $882.9 million remained available for repurchase through the Company’s repurchase program authorized on August 9, 2005.

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Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Executive Summary

     Our outdoor advertising segment has experienced consistent revenue growth throughout 2005 as compared to 2004. Domestically, revenue growth was driven by increased rates on our bulletin and poster inventory. Internationally, growth was driven by increased revenue per display on our transit and street furniture inventory. We acquired a controlling majority interest in Clear Media Limited, a Chinese outdoor advertising company, during the third quarter of 2005. We have faced difficult economic and competitive environments in France throughout 2005, and announced a plan to restructure our outdoor advertising operations there. As a result of the restructuring, we recorded approximately $26.6 million as a component of divisional operating expenses during the third quarter of 2005.

     Our radio revenues declined each quarter of 2005 compared to the same periods of 2004, primarily as a result of the reduction in the amount of commercial minutes broadcast on our radio stations as part of our Less is More initiative. However, sequential improvement occurred each quarter of 2005 in our yield, or revenue divided by commercial minutes broadcast, as well as average unit rates for our inventory. 15 and 30 second advertisements as a percent of total advertising inventory increased each quarter of 2005 over the previous quarter.

     Our live entertainment revenues declined approximately $85.7 million for the nine months ended September 30, 2005 compared to the same period of 2004. The revenue decline is primarily the result of fewer events and lower attendance. During the third quarter of 2005, we acquired a controlling majority interest in Mean Fiddler, a promoter of music festivals and venue operator in the United Kingdom, and consolidated approximately $41.9 million in revenue.

Strategic Realignment of Businesses

     On April 29, 2005, we announced our plan to strategically realign our businesses. This plan includes an initial public offering (“IPO”) of approximately 10% of the common stock of our outdoor business (“Clear Channel Outdoor”) and a 100% spin-off of our entertainment business (“Clear Channel Entertainment”). The closing of the IPO and spin-off of Clear Channel Entertainment are subject to approval of our Board of Directors, receipt of a tax opinion of counsel and letter ruling from the IRS relating to the Clear Channel Entertainment spin-off, favorable market conditions, effectiveness of registration statements filed with the Securities and Exchange Commission and other customary conditions.

     It is our current intention to return approximately $1.6 billion of capital to shareholders through either share repurchases, a special dividend or a combination of both. Since announcing our intent on August 9, 2005, we have returned $117.1 million to shareholders by repurchasing 3.8 million shares of our common stock. It is our current intention to pay a special dividend in 2006 after taking into account the results of our share repurchases, and subject to our financial condition, and market and economic conditions among other factors. We intend to fund any share repurchases and/or a special dividend from funds generated from the repayment of intercompany debt, the proceeds of any new debt offerings, available cash balances and cash flow from operations. The timing and amount of a special dividend, if any, is in the discretion of the Board of Directors and will be based on the economic and market factors described above, among others.

Format of Presentation

      Management’s discussion and analysis of our results of operations and financial condition 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, which includes our national syndication business, Outdoor Advertising and Live Entertainment. Included in the “other” segment are television broadcasting, sports representation and our media representation business, Katz Media.

     We manage our operating segments primarily focusing on their operating income, while Corporate expenses, Interest expense, Gain (loss) on sale of marketable securities, Equity in earnings of nonconsolidated affiliates, Other income (expense) — net, and Income tax benefit (expense) are managed on a total company basis and are, therefore, included only in our discussion of consolidated results.

Radio Broadcasting

     Our local radio markets are run predominantly by local management teams who control the formats selected for their programming. The formats are designed to reach audiences with targeted demographic characteristics that appeal to our advertisers. Our advertising rates are principally based on 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.

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Also, our advertising rates are influenced by the time of day the advertisement airs, with morning and evening drive-time hours typically the highest. We sell a certain number of radio advertising spots per hour to our advertisers. Radio advertising contracts are typically less than one year.

     During the first quarter of 2005, we completed the rollout of our Less is More initiative, which lowered the amount of commercial minutes played per hour by approximately 15% — 20% across our stations. A key component of Less is More is encouraging advertisers to invest in shorter advertisements rather than the traditional 60-second spot. Based on our research, we believe that the effectiveness of a commercial is not related to its length. Because effectiveness is not tied to the length of the advertisement, on a cost per thousand listeners reached basis, we can provide our advertisers a more efficient investment with our new shorter commercials than with the traditional 60-second commercials.

     Management monitors macro level indicators to assess our radio operations’ performance. Due to the geographic diversity and autonomy of our markets, we have a multitude of market specific advertising rates and audience demographics. Therefore, our discussion of the results of operations of our radio broadcasting segment focuses on the macro level indicators that management monitors to assess our radio segment’s financial condition and results of operations.

     Management looks at our radio operations’ overall revenues as well as 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 our local radio stations’ sales staffs 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.

     Management also looks at radio revenue by market size, as defined by Arbitron. Typically, larger markets can reach bigger audiences with wider demographics than smaller markets. Over half of our radio revenue and divisional operating expenses comes from our 50 largest markets.

     Additionally, management reviews our share of target demographics listening to the radio in an average quarter hour. This metric gauges how well our formats are attracting and keeping listeners.

     A significant portion of our radio segment’s expenses vary in connection with changes in revenue. These variable expenses primarily relate to costs in our sales department, such as salaries, 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, our highly discretionary costs are in our marketing and promotions department, which we primarily incur to maintain and/or increase our audience share.

Outdoor Advertising

     Our outdoor advertising revenues are generated from selling advertisements on our display faces, which include bulletins, posters and transit displays, as well as street furniture panels. Our advertising rates are based on a particular display’s impressions in relation to the demographics of a particular market and its location within a market. The lengths of our outdoor advertising contracts vary across our inventory, ranging from one week to one year.

     To monitor the health of our outdoor business, management reviews average rates, average occupancy and inventory levels of each of our display faces by market. In addition, because a significant portion of our outdoor advertising is conducted in foreign markets, principally Europe, management looks at 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 significant outdoor expenses include production expenses, revenue sharing or minimum guarantees on our transit and street furniture contracts and site lease expenses, primarily for land under our advertising displays. Our site lease terms vary from monthly to yearly, can be for terms of 20 years or longer and typically provide for renewal options. Our street furniture contracts are usually won in a competitive bid and generally have terms of between 10 and 20 years.

Live Entertainment

     We derive live entertainment revenues primarily from promoting or producing music and theatrical events. Revenues from these events are mainly from ticket sales, rental income, corporate sponsorships, concessions and merchandise. We typically receive either all the ticket sales or a fixed fee for each event we host. We also generally receive fees representing a percentage of total concession sales from vendors and total merchandise sales from the merchandiser.

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     We generally receive higher music profits when an event is at a venue we own rather than a venue we rent. The higher music profits are due to our ability to share in a percentage of the revenues received from concession and merchandise sales as well as the opportunity to sell sponsorships for venue naming rights and signage.

     To judge the health of our live entertainment business, management monitors the number of shows, average paid attendance, talent cost as a percentage of revenue, sponsorship dollars and ticket revenues. In addition, because a significant portion of our live entertainment business is conducted in foreign markets, management looks at the operating results from our foreign operations on a constant dollar basis.

     The primary expense driver for live entertainment is talent cost. Talent cost is the amount we pay a musical artist or theatrical production to perform at an event. This is a negotiated amount primarily driven by what the artist or production requires to cover their direct costs and the value of their time. These fees are typically agreed to at a fixed guarantee, a percentage of ticket sales or the greater of the two amounts.

The comparison of Three and Nine Months Ended September 30, 2005 to Three and Nine Months Ended September 30, 2004 is as follows:

Consolidated

	Three Months Ended									Nine Months Ended
	September 30,						%			September 30,						%
(In thousands)	2005			2004			Change			2005			2004			Change
Revenue	$	2,676,879		$	2,648,873			1	%	$	7,020,570		$	7,103,473			(1	%)
Operating expenses:
Divisional operating expenses (excludes non-cash compensation expense of $212, $714, $-0- and $221 for the nine months ended and three months ended September 30, 2005 and 2004, respectively)		2,009,274			1,937,194			4	%		5,279,508			5,197,225			2	%
Non-cash compensation expense		2,725			786			247	%		6,164			2,619			135	%
Depreciation and amortization		169,667			170,150			0	%		511,050			511,062			0	%
Corporate expenses (excludes non-cash compensation expense of $5,952, $1,905, $2,725 and $565 for the nine months ended and three months ended September 30, 2005 and 2004, respectively)		49,966			46,645			7	%		149,539			142,590			5	%
Operating income		445,247			494,098			(10	%)		1,074,309			1,249,977			(14	%)
Interest expense		113,666			91,607						325,936			266,815
Gain (loss) on marketable securities		(815	)		3,485						(278	)		47,705
Equity in earnings of nonconsolidated affiliates		12,341			3,194						28,318			20,504
Other income (expense) — net		(3,477	)		(622	)					7,207			(20,586	)
Income before income taxes		339,630			408,548						783,620			1,030,785
Income tax (expense) benefit:
Current		(47,999	)		(44,072	)					(157,389	)		(296,945	)
Deferred		(86,156	)		(103,242	)					(152,142	)		(102,376	)
Net income	$	205,475		$	261,234					$	474,089		$	631,464

Consolidated Revenue

     Consolidated revenues increased $28.0 million for the three months ended September 30, 2005 compared to the same period of the prior year. This increase was the result of revenue increases of approximately $67.8 million in our outdoor segment primarily from domestic bulletin and poster sales and international street furniture and transit sales and approximately $22.9 million from our acquisition of a controlling majority interest in Clear Media, a Chinese outdoor company, during the third quarter of 2005. Our radio segment revenue declined $40.8 million, primarily as a result of fewer commercial minutes broadcast in the current year as part of our Less is More initiative. Live entertainment revenues increased approximately $8.8 million primarily from revenue growth in our European music division, as a result of our acquiring a controlling majority interest in Mean Fiddler, a promoter of music festivals and venues in the United Kingdom.

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     Consolidated revenues were down $82.9 million for the nine months ended September 30, 2005 compared to the same period of the prior year. Our radio segment revenue declined $165.1 million, primarily as a result of fewer commercial minutes broadcast in the current year as part of our Less is More initiative. Our live entertainment revenues were down $85.7 million for the nine months of 2005 compared to the same period of 2004 primarily attributable to a decline in ticket revenues resulting from fewer concerts and lower attendance in the current year. This decline was partially offset by our outdoor segment, which experienced revenue growth of $170.2 million for the period primarily from domestic bulletin sales and international street furniture and transit sales, approximately $22.9 million from the consolidation of Clear Media, and approximately $33.9 million from increase in foreign exchange fluctuations.

Consolidated Divisional Operating Expenses

     Consolidated divisional operating expenses increased $72.1 million for the three months ended September 30, 2005 compared to the same period of 2004 primarily related to approximately $26.6 million recorded from restructuring our outdoor advertising business in France during the third quarter of 2005 and approximately $12.5 million and $34.4 million related to our consolidation of Clear Media and Mean Fiddler, respectively, both of which we acquired a controlling majority interest in during the third quarter of 2005.

     Consolidated divisional operating expenses increased $82.3 million for the nine months ended September 30, 2005 compared to the same period of 2004 principally from $26.6 million of costs related to restructuring our outdoor advertising business in France, approximately $12.5 million from our consolidation of Clear Media, and approximately $28.7 million and from increases in foreign exchange as compared to the same period of 2004. In addition to the France restructuring, foreign exchange and the Clear Media acquisition, our outdoor segment contributed approximately $55.7 million primarily related to increased site lease, direct production and commission expenses associated with the increase in revenue. Our radio and other segment contributed approximately $8.7 million and $9.1 million, respectively to the increase. These increases were partially offset by a $56.8 million decline in divisional operating expenses in our live entertainment segment primarily due to fewer events that led to lower talent costs and reduced artist guarantees in the current year compared to 2004.

Non-cash Compensation Expense

     Non-cash compensation expense increased 247% and 135% during the three and nine months ended September 30, 2005, respectively, as compared to the same periods of 2004, primarily from the granting in 2005 of more restricted stock awards rather than stock options which we account for under Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees.

Corporate Expenses

     Corporate expenses increased $3.3 million and $6.9 million during the three and nine months ended September 30, 2005, respectively, as compared to the same periods of 2004. The increases for the three months is comprised of $3.0 million related to costs of our strategic realignment plan and approximately $3.7 million related to severance in conjunction with reorganizing our live entertainment business, offset by a decline in bonus expenses. The increase for the nine months primarily related to an increase in corporate legal expenses of approximately $12.5 million associated with legal contingencies in our live entertainment segment, offset by a decline in bonus expenses.

Interest Expense

     Interest expense increased $22.1 million and $59.1 million during the three and nine months ended September 30, 2005, respectively, as compared to the same periods of 2004, primarily as a result of an increase in our average debt outstanding as well as an increase in our weighted average cost of debt. Our debt balances and weighted average cost of debt at September 30, 2005 and 2004 were $8.0 billion, 5.7%, $7.2 billion and 5.2%, respectively.

Gain (Loss) on Marketable Securities

     Gain (loss) on marketable securities for the third quarter of 2005 and 2004 consisted entirely of changes in fair value of certain investment securities that are classified as trading and a related secured forward exchange contract associated with those securities.

     The loss on marketable securities for the nine months ended September 30, 2005 of $.3 million decreased $48.0 million compared to the gain of $47.7 million for the same period of 2004. The loss on marketable securities for the nine months ended September 30, 2005 consisted of changes in fair value of certain investment securities that are classified as trading and a related secured forward exchange contract associated with those securities. The gain on marketable securities during the nine months of 2004 consisted primarily of a $47.0 million gain on the sale of our remaining investment in Univision Communications, offset by changes in fair value of certain investment securities that are classified as trading and a related secured forward exchange contract associated with those securities.

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Other Income (Expense) — Net

     Other income (expense) — net decreased $2.9 million and increased $27.8 million for the three and nine months ended September 30, 2005, respectively, compared to the same period of 2004. The increase for the three months was attributable to an approximately $31.6 million loss on the early extinguishment of debt in 2004.

Income Tax Benefit (Expense)

     Current tax expense increased approximately $3.9 million for the three months ended September 30, 2005 as compared to the same period of 2004. Deferred tax expense decreased during the three months ended September 30, 2005 as compared to the same period of 2004 by approximately $17.1 million primarily due to higher deferred tax expense related to additional tax depreciation and tax gains on the sale of certain investments recorded during 2004.

     Current tax expense decreased $139.6 million for the nine months ended September 30, 2005 as compared to the same period of the prior year primarily as a result of current tax expense related to the sale of our remaining investment in Univision, partially offset by a tax benefit related to a tax loss on our early extinguishment of debt, both occurring during the nine months ended September 30, 2004. Deferred tax expense increased approximately $49.8 million for the nine months ended September 30, 2005 as compared to the same period of 2004 primarily due to net deferred tax benefits recorded during the prior year primarily related to our sale of our remaining investment in Univision.

Segment Revenue and Divisional Operating Expenses

Radio Broadcasting

	Three Months Ended							Nine Months Ended
	September 30,							September 30,
(In thousands)	2005		2004		% Change			2005		2004		% Change
Revenue	$	919,245	$	960,066		(4	%)	$	2,624,736	$	2,789,834		(6	%)
Divisional operating expenses		546,615		538,179		2	%		1,612,039		1,603,276		1	%
Non-cash compensation		—		221		(100	%)		212		714		(70	%)
Depreciation and amortization		36,185		37,887		(4	%)		106,309		113,653		(6	%)
Operating income	$	336,445	$	383,779		(12	%)	$	906,176	$	1,072,191		(15	%)

Three Months

     Our radio revenue declined $40.8 million, or 4%, to $919.2 million during the third quarter of 2005 compared to the same period of 2004. The decline includes a reduction of approximately $4.3 million from non-cash trade revenues. Both local and national revenues were down for the quarter as well, primarily from the reduction in commercial minutes made available for sale on our radio stations. As a result, some of our larger advertising categories declined during the quarter, including automotive and retail. Yield, or revenue divided by total minutes of available inventory, experienced an increase each month of the third quarter. Our 30 and 15 second commercials, as a percent of total commercial minutes available, were higher in the third quarter than in the first six months of the year. Average unit rates were also higher during the third quarter than during the first six months of the year.

     Radio divisional operating expenses increased $8.4 million during the third quarter of 2005 compared to the same period of 2004. This increase was driven by increases in promotion and advertising as well as programming and content expenses.

Nine Months

     Our radio revenue declined $165.1 million during the nine months ended September 30, 2005 compared to the same period of 2004. Both local and national revenues were down for the nine months, as we continue to implement Less is More. While there were increases in average unit rates of 30 and 15 second commercials as the year progressed, these increases have not yet offset the reduction of commercial minutes. The decline also includes a reduction of approximately $18.5 million from non-cash trade revenues.

     Radio divisional operating expenses increased, $8.8 million, or 1% during the nine months ended September 30, 2005 compared to the same period of 2004. While we experienced increased advertising and promotional expenditures as well as additional

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expenses associated with sports broadcasting rights related to contracts awarded in the second half of 2004. These increases were partially offset by decreases in commission expenses as well as a decline in non-cash trade expenses.

     Depreciation and amortization declined $7.3 million for the nine months ended September 30, 2005 compared to the same period of 2004 primarily related to syndicated radio talent and sports broadcasting contracts acquired through acquisitions of radio companies that became fully amortized in the fourth quarter of 2004.

Outdoor Advertising

	Three Months Ended							Nine Months Ended
	September 30,							September 30,
(In thousands)	2005		2004		% Change			2005		2004		% Change
Revenue	$	668,003	$	600,166		11	%	$	1,931,470	$	1,761,308		10	%
Divisional operating expenses		483,379		431,383		12	%		1,400,603		1,277,110		10	%
Depreciation and amortization		95,405		96,254		(1	%)		290,233		288,810		0	%
Operating income	$	89,219	$	72,529		23	%	$	240,634	$	195,388		23	%

Three Months

     Our outdoor advertising revenue increased $67.8 million during the third quarter of 2005 compared to the same period of 2004. Included in the third quarter 2005 results is an approximately $1.7 million increase related to foreign exchange compared to the third quarter of 2004. Approximately $22.9 million of the revenue growth is related to our third quarter acquisition of a controlling majority interest in Clear Media Limited. Clear Media is a Chinese outdoor company which we previously accounted for as an equity method investment.

     Our domestic revenue increased $31.6 million to $317.7 million during the third quarter of 2005 compared to the same period of 2004. The increase was mainly due to an increase in bulletin and poster revenues primarily attributable to increased rates during 2005. Increased revenues from our airport, street furniture and transit advertising displays also contributed to the revenue increase. Growth occurred across the majority of our markets including strong growth in New York, Miami, Houston, Seattle, Cleveland and Las Vegas. Strong advertising client categories for the nine months ended September 30, 2005 included automotive, entertainment and amusements, business and consumer services, retail and telecommunications.

     Our international revenues increased $36.2 million to $350.3 million during the three months ended September 30, 2005 as compared to the same period in 2004. Included in the revenue growth is approximately $22.9 million in revenue from Clear Media. In addition, the remaining revenue growth was attributable to increases in our street furniture and transit revenues. Leading markets contributing to our international revenue growth were Italy, Sweden and Australia.

     Our divisional operating expenses increased $52.0 million to $483.4 million during the third quarter of 2005 compared to the same period of 2004. Included in the increase is approximately $1.4 million from increases in foreign exchange. Our consolidation of Clear Media contributed approximately $12.5 million to the increase. Also, we began a restructuring of our business in France during the third quarter of 2005 and recorded approximately $26.6 million in restructuring costs.

     Domestic divisional operating expenses increased $5.7 million to $168.5 million during the third quarter as compared to the same period in 2004. The increase is related to increases in site lease expenses, commission expenses associated with the increase in revenue and direct production expenses. International divisional operating expenses grew $46.3 million to $314.9 million during the quarter ended September 30, 2005 as compared to the same period of the 2004, primarily from the consolidation of Clear Media and the France restructuring.

Nine Months

     Our revenue increased approximately $170.2 million, or 10%, during the nine months ended September 30, 2005 as compared to the same period of 2004. Included in these results is approximately $33.9 million from increases in foreign exchange as compared to the same period of 2004. Our domestic operations contributed approximately $85.9 million to the increase primarily from growth in bulletin and poster revenues of approximately $41.4 million. In addition to foreign exchange, our international operations contributed approximately $50.4 million to the increase from our consolidation of Clear Media and increases from our street furniture and transit revenues.

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      Divisional operating expenses increased approximately $123.5 million during the nine months ended September 30, 2005 as compared to the same period of 2004. Included in these expenses is approximately $28.7 million from increases in foreign exchange as compared to the same period of 2004. Our domestic operations contributed approximately $29.4 million to the increased expense, of which approximately $5.6 million related to direct production expenses, $6.0 million related to site lease expenses, $2.9 million from an increase in commission expenses, and $1.8 million from an increase in bad debt expense. In addition to foreign exchange, our international operations contributed approximately $65.4 million to the increase, comprised of an approximate $25.9 million increase in fixed rent and minimum annual guarantees associated with the increase in revenues on our street furniture and transit contracts, approximately $12.5 million from our consolidation of Clear Media and approximately $26.6 million of costs related to the restructuring of our business in France.

Live Entertainment

	Three Months Ended							Nine Months Ended
	September 30,							September 30,
(In thousands)	2005		2004		% Change			2005		2004		% Change
Revenue	$	983,454	$	974,675		1	%	$	2,137,441	$	2,223,114		(4	%)
Divisional operating expenses		897,959		883,645		2	%		2,012,670		2,069,432		(3	%)
Depreciation and amortization		15,341		15,134		1	%		47,703		45,577		5	%
Operating income	$	70,154	$	75,896		(8	%)	$	77,068	$	108,105		(29	%)

Three Months

     Our live entertainment revenue increased $8.8 million for the third quarter of 2005 compared to the same period of 2004. The revenue increase was led by our European music division primarily as a result of acquiring a controlling majority interest in Mean Fiddler, a promoter of music festivals and venue operator in the United Kingdom, which contributed approximately $41.9 million to the net increase. This increase was partially offset by a decline in revenue from our domestic music and theater divisions. This was the result of a decline in the number of events and average ticket prices in the current year compared to 2004. The lower number of events led to a decline in ancillary revenues as well. The third quarter revenues also included a decline of approximately $6.1 million related to foreign exchange compared to 2004 due to the strengthening of the U.S. dollar relative to our international functional currencies.

     Our live entertainment divisional operating expenses increased $14.3 million for the third quarter of 2005 compared to the same period of 2004. During the quarter, we recorded approximately $8.4 million related to certain legal costs and certain severance costs in conjunction with reorganizing the business. Also included in the increase is approximately $34.4 million from the consolidation of Mean Fiddler. These increases were partially offset by approximately $5.3 million from decreases in foreign exchange due to the strengthening of the U.S. dollar and by decreases in talent costs associated with the decrease in revenues.

Nine Months

     Our live entertainment revenue declined $85.7 million for the nine months of 2005 compared to the same period of 2004. The decline was primarily attributable to an overall decline in ticket revenues resulting from fewer concerts and lower attendance in the current year. The lower number of shows and attendance at our amphitheaters led to a decline in concessions and merchandising. The decline in revenues was partially offset by an increase of approximately $41.9 million from the consolidation of Mean Fiddler and approximately $7.0 million from foreign exchange fluctuations.

     Our live entertainment divisional operating expenses were down $56.8 million during the nine months ended September 30, 2005 compared to the same period of 2004. This decline correlates with fewer events which led to decreased artist costs. The decline was partially offset by an increase of approximately $34.4 million from the consolidation of Mean Fiddler, approximately $7.1 million from foreign exchange fluctuations, an increase of approximately $12.5 million from expenses related to legal contingencies recorded in the first quarter of 2005, and approximately $8.4 million related to certain legal costs and certain severance costs in conjunction with reorganizing the business in the third quarter of 2005.

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Reconciliation of Segment Operating Income (Loss) to Consolidated Operating Income

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
(In thousands)	2005			2004			2005			2004
Radio Broadcasting	$	336,445		$	383,779		$	906,176		$	1,072,191
Outdoor Advertising		89,219			72,529			240,634			195,388
Live Entertainment		70,154			75,896			77,068			108,105
Other		6,802			14,205			20,075			34,452
Corporate		(57,373	)		(52,311	)		(169,644	)		(160,159	)
Consolidated Operating Income	$	445,247		$	494,098		$	1,074,309		$	1,249,977

LIQUIDITY AND CAPITAL RESOURCES

Cash Flow

Operating Activities:

          Net cash provided by operating activities was $228.8 million less for the nine months ended September 30, 2005 compared to the same period of 2004 principally from a decline in net income of $157.4 million. Also contributing to the decline were taxes accrued but not yet paid on the sale of our remaining investment in Univision during 2004 and tax return adjustments that were paid during 2005 upon the completion of our 2004 federal tax return.

Investing Activities:

          Net cash provided by investing activities of $250.7 million for the nine months ended September 30, 2004 declined $669.7 million to net cash used in investing activities of $419.0 million for the nine months ended September 30, 2005. The decline was primarily due to $627.5 million in proceeds from the sale of investments primarily related to our remaining investment in Univision Communications during 2004.

Financing Activities:

          Net cash used in financing activities for the nine months ended September 30, 2005 declined approximately $993.5 million compared to the same period of 2004 primarily from a reduction of treasury share repurchases during 2005 of $569.0 million.

          We expect to fund anticipated cash requirements (including payments of principal and interest on outstanding indebtedness and commitments, acquisitions, anticipated capital expenditures, quarterly dividends and share repurchases) for the foreseeable future with cash flows from operations and various externally generated funds.

SOURCES OF CAPITAL

As of September 30, 2005 and December 31, 2004 we had the following debt outstanding:

	September 30,		December 31,
(In millions)	2005		2004
Credit facility	$	1,201.5	$	350.5
Long-term bonds (a)		6,551.9		6,846.1
Other borrowings		247.6		183.2
Total Debt		8,001.0		7,379.8
Less: Cash and cash equivalents		412.7		210.5
	$	7,588.3	$	7,169.3

(a) Includes $11.4 million and $13.8 million in unamortized fair value purchase accounting adjustment premiums related to the merger with AMFM at September 30, 2005 and December 31, 2004, respectively. Also includes $(20.9) million and $6.5 million related to fair value adjustments for interest rate swap agreements at September 30, 2005 and December 31, 2004, respectively.

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Credit Facility

     We have a multi-currency revolving credit facility in the amount of $1.75 billion, which can be used for general working capital purposes including commercial paper support as well as to fund capital expenditures, share repurchases, acquisitions and the refinancing of public debt securities. At September 30, 2005, the outstanding balance on this facility was $1.2 billion and, taking into account letters of credit of $227.4 million, $321.1 million was available for future borrowings, with the entire balance to be repaid on July 12, 2009.

     During the nine months ended September 30, 2005, we made principal payments totaling $753.0 million and drew down $1.6 billion on the credit facility. As of November 4, 2005, the credit facility’s outstanding balance was $1.3 billion and, taking into account outstanding letters of credit, $238.1 million was available for future borrowings.

Shelf Registration

     On April 22, 2004, we filed a Registration Statement on Form S-3 covering a combined $3.0 billion of debt securities, junior subordinated debt securities, preferred stock, common stock, warrants, stock purchase contracts and stock purchase units. The shelf registration statement also covers preferred securities that may be issued from time to time by our three Delaware statutory business trusts and guarantees of such preferred securities by us. The SEC declared this shelf registration statement effective on April 26, 2004. After debt offerings on September 15, 2004, November 17, 2004, and December 16, 2004, $1.75 billion remains available from this shelf registration statement.

Debt Covenants

     The significant covenants on our $1.75 billion five-year, multi-currency revolving credit facility relate to leverage and interest coverage contained and defined in the credit agreement. The leverage ratio covenant requires us to maintain a ratio of consolidated funded indebtedness to operating cash flow (as defined by the credit agreement) of less than 5.25x. The interest coverage covenant requires us to maintain a minimum ratio of operating cash flow (as defined by the credit agreement) to interest expense of 2.50x. In the event that we do not meet these covenants, we are considered to be in default on the credit facility at which time the credit facility may become immediately due. At September 30, 2005, our leverage and interest coverage ratios were 3.5x and 5.2x, respectively. This credit facility contains a cross default provision that would be triggered if we were to default on any other indebtedness greater than $200.0 million.

     Our other indebtedness does not contain provisions that would make it a default if we were to default on our credit facility.

     The fees we pay on our $1.75 billion, five-year multi-currency revolving credit facility depend on our long-term debt ratings. Based on our current ratings level of BBB-/Baa3, our fees on borrowings are a 45.0 basis point spread to LIBOR and are 17.5 basis points on the total $1.75 billion facility. In the event our ratings improve, the fee on borrowings and facility fee decline gradually to 20.0 basis points and 9.0 basis points, respectively, at ratings of A/A3 or better. In the event that our ratings decline, the fee on borrowings and facility fee increase gradually to 120.0 basis points and 30.0 basis points, respectively, at ratings of BB/Ba2 or lower.

     We believe there are no other agreements that contain provisions that trigger an event of default upon a change in long-term debt ratings that would have a material impact to our financial statements.

     Additionally, our 8% senior notes due 2008, which were originally issued by AMFM Operating Inc., a wholly-owned subsidiary of Clear Channel, contain certain restrictive covenants that limit the ability of AMFM Operating Inc. to incur additional indebtedness, enter into certain transactions with affiliates, pay dividends, consolidate, or effect certain asset sales.

     At September 30, 2005, we were in compliance with all debt covenants. We expect to remain in compliance throughout 2005.

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USES OF CAPITAL

Dividends

          Our Board of Directors declared quarterly cash dividends as follows:

     (In millions, except per share data)

	Amount
	per
Declaration	Common
Date	Share		Record Date	Payment Date	Total Payment
October 20, 2004	$	0.125	December 31, 2004	January 15, 2005	$	70.9
February 16, 2005		0.125	March 31, 2005	April 15, 2005		68.9
April 26, 2005		0.1875	June 30, 2005	July 15, 2005		101.7
July 27, 2005		0.1875	September 30, 2005	October 15, 2005		101.8

          Additionally, on October 26, 2005, the Company’s Board of Directors declared a quarterly cash dividend of $0.1875 per share on the Company’s Common Stock. The dividend is payable on January 15, 2006 to shareholders of record at the close of business on December 31, 2005.

Acquisitions

          During the nine months ended September 30, 2005, we acquired radio stations for $8.7 million in cash. We also acquired outdoor display faces for $43.7 million in cash. Our live entertainment segment used $67.9 million in cash, primarily for our acquisition of Mean Fiddler. In addition, our national representation firm acquired contracts for $32.5 million in cash and our television business acquired a station for $5.4 million in cash.

Capital Expenditures

          Capital expenditures were $291.4 million and $242.7 million in the nine months ended September 30, 2005 and 2004, respectively.

	Nine Months Ended September 30, 2005 Capital Expenditures
							Corporate and
(In millions)	Radio		Outdoor		Entertainment		Other		Total
Non-revenue producing	$	65.8	$	53.0	$	40.0	$	16.4	$	175.2
Revenue producing		—		84.2		32.0		—		116.2
	$	65.8	$	137.2	$	72.0	$	16.4	$	291.4

Treasury Stock Transactions

          Our Board of Directors approved two separate share repurchase programs during 2004, each for $1.0 billion. On February 1, 2005, our Board of Directors approved a third $1.0 billion share repurchase program. On August 9, 2005, our Board of Directors authorized an increase in and extension of the February 2005 program, which had $307.4 million remaining, by $692.6 million, for a total of $1.0 billion. This increase expires on August 8, 2006, although the program may be discontinued or suspended at anytime prior to its expiration. As of November 4, 2005, 81.2 million shares had been repurchased for an aggregate purchase price of $2.8 billion, including commission and fees, under the share repurchase programs. From January 1, 2005 through November 4, 2005, we repurchased 29.7 million shares of our common stock for an aggregate purchase price of $968.3 million, including commission and fees.

Commitments, Contingencies and Guarantees

Commitments and Contingencies

          We are among the defendants in a lawsuit filed September 3, 2002 by JamSports in United States Federal District Court for the Northern District of Illinois. The plaintiff alleged that we violated federal antitrust laws and wrongfully interfered with plaintiff’s business and contractual rights. On March 21, 2005, the jury rendered its verdict finding that we had not violated the antitrust laws, but had tortiously interfered with a contract which the plaintiff had entered into with co-defendant AMA Pro Racing and with the plaintiff’s prospective economic advantage. In connection with the findings regarding tortious interference, the jury awarded to the plaintiffs approximately $17.0 million in lost profits and $73.0 million in punitive damages. In April, 2005, we filed a Renewed Motion for

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Judgment as a Matter of Law and Motion For a New Trial, to seek a judgment notwithstanding the verdict or a new trial from the U.S. District Court that tried the case. On August 15, 2005, the District Court granted that motion in part, granting judgment in favor of the Clear Channel defendants on the plaintiff’s claim for tortious interference with prospective economic advantage and granting the Clear Channel defendants a new trial with respect to the issue of damages on the plaintiff’s claim for tortious interference with contract. The District Court has set a new date for this trial, on February 6, 2006. We are vigorously defending this remaining claim.

          There are various other lawsuits and claims pending against us. Based on current assumptions, we have accrued an estimate of the probable costs for the resolution of these claims. Future results of operations could be materially affected by changes in these assumptions.

          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. We 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 are met, would not significantly impact our financial position or results of operations.

Guarantees

          As of September 30, 2005, we guaranteed the debt of third parties of approximately $13.4 million primarily related to long-term operating contracts. The third parties’ associated operating assets secure a substantial portion of these obligations.

Market Risk

Interest Rate Risk

          At September 30, 2005, approximately 34% of our long-term debt, including fixed-rate debt on which we have entered into interest rate swap agreements, bears interest at variable rates. Accordingly, our earnings are affected by changes in interest rates. Assuming the current level of borrowings at variable rates and assuming a two percentage point change in the quarter’s average interest rate under these borrowings, it is estimated that our interest expense for the nine months ended September 30, 2005 would have changed by $40.4 million and that our net income for the nine months ended September 30, 2005 would have changed by $25.0 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 interest rate 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.

          At September 30, 2005, we had entered into interest rate swap agreements with a $1.3 billion aggregate notional amount that effectively float interest at rates based upon LIBOR. These agreements expire from February 2007 to March 2012. The fair value of these agreements at September 30, 2005 was a liability of $20.9 million.

Equity Price Risk

          The carrying value of our available-for-sale and trading 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 at September 30, 2005 by $74.4 million and would change accumulated comprehensive income (loss) and net income by $39.9 million and $6.2 million, respectively. At September 30, 2005, we also held $18.4 million of investments that do not have a quoted market price, but are subject to fluctuations in their value.

          We maintain derivative instruments on certain of our available-for-sale and trading equity securities to limit our exposure to and benefit from price fluctuations on those securities.

Foreign Currency

          We have operations in countries throughout the world. 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. To mitigate a portion of the exposure of international currency fluctuations, we maintain a natural hedge through borrowings in currencies other than the U.S. dollar. In addition, we have U.S. dollar – Euro cross currency swaps which are also designated as a hedge of our net investment in foreign denominated assets. These hedge positions are reviewed monthly. Our foreign operations reported net income of $3.5 million for the nine months ended September 30, 2005. It is estimated that a 10% change in the value of the U.S. dollar to foreign currencies would change net income for the nine months ended September 30, 2005 by $0.4 million.

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     Our earnings are also affected by fluctuations in the value of the U.S. dollar as compared to foreign currencies as a result of our investments in various countries, all of which are accounted for under the equity method. It is estimated that the result of a 10% fluctuation in the value of the dollar relative to these foreign currencies at September 30, 2005 would change our equity in earnings of nonconsolidated affiliates by $2.8 million and would change our net income by approximately $1.8 million for the nine months ended September 30, 2005.

     This analysis does not consider the implications that such fluctuations could have on the overall economic activity that could exist in such an environment in the U.S. or the foreign countries or on the results of operations of these foreign entities.

Recent Accounting Pronouncements

     In March 2005, the Financial Accounting Standards Board (“FASB”) issued Interpretation No. 47, Accounting for Conditional Asset Retirement Obligations (“FIN 47”). FIN 47 is an interpretation of FASB Statement 143, Asset Retirement Obligations, which was issued in June 2001. According to FIN 47, uncertainty about the timing and (or) method of settlement because they are conditional on a future event that may or may not be within the control of the entity should be factored into the measurement of the asset retirement obligation when sufficient information exists. FIN 47 also clarifies when an entity would have sufficient information to reasonably estimate the fair value of an asset retirement obligation. FIN 47 is effective no later than the end of fiscal years ending after December 15, 2005. Retrospective application of interim financial information is permitted, but is not required. We adopted FIN 47 on January 1, 2005, which did not materially impact our financial position or results of operations.

     In March 2005, the Securities and Exchange Commission (“SEC”) issued Staff Accounting Bulletin No. 107 Share-Based Payment (“SAB 107”). SAB 107 expresses the SEC staff’s views regarding the interaction between Statement of Financial Accounting Standards No. 123(R) Share-Based Payment (“Statement 123(R)”) and certain SEC rules and regulations and provides the staff’s views regarding the valuation of share-based payment arrangements for public companies. In particular, SAB 107 provides guidance related to share-based payment transactions with nonemployees, the transition from nonpublic to public entity status, valuation methods (including assumptions such as expected volatility and expected term), the accounting for certain redeemable financial instruments issued under share-based payment arrangements, the classification of compensation expense, non-GAAP financial measures, first time adoption of Statement 123(R) in an interim period, capitalization of compensation cost related to share-based payment arrangements, the accounting for income tax effects of share-based payment arrangements upon adoption of Statement 123(R) and the modification of employee share options prior to adoption of Statement 123(R). We are unable to quantify the impact of adopting SAB 107 and Statement 123(R) at this time because it will depend on levels of share-based payments granted in the future. Additionally, we are still evaluating the assumptions we will use upon adoption.

     In April 2005, the SEC issued a press release announcing that it would provide for phased-in implementation guidance for Statement 123(R). The SEC would require that registrants that are not small business issuers adopt Statement 123(R)’s fair value method of accounting for share-based payments to employees no later than the beginning of the first fiscal year beginning after June 15, 2005. We intend to adopt Statement 123(R) on January 1, 2006.

     In June 2005, the Emerging Issues Task Force (“EITF”) issued EITF 05-6, Determining the Amortization Period of Leasehold Improvements (“EITF 05-6”). EITF 05-6 requires that assets recognized under capital leases generally be amortized in a manner consistent with the lessee’s normal depreciation policy except that the amortization period is limited to the lease term (which includes renewal periods that are reasonably assured). EITF 05-6 also addresses the determination of the amortization period for leasehold improvements that are purchased subsequent to the inception of the lease. Leasehold improvements acquired in a business combination or purchased subsequent to the inception of the lease should be amortized over the lesser of the useful life of the asset or the lease term that includes reasonably assured lease renewals as determined on the date of the acquisition of the leasehold improvement. We adopted EITF 05-6 on July 1, 2005 which did not materially impact our financial position or results of operations.

     In October 2005, the FASB issued Staff Position 13-1 (“FSP 13-1”). FSP 13-1 requires rental costs associated with ground or building operating leases that are incurred during a construction period be recognized as rental expense. The guidance in FSP 13-1 shall be applied to the first reporting period beginning after December 15, 2005. We will adopt FSP 13-1 January 1, 2006 and do not anticipate adoption to materially impact our financial position or results of operations.

Inflation

     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 in various manners.

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Ratio of Earnings to Fixed Charges

     The ratio of earnings to fixed charges is as follows:

Nine Months ended September 30,			Year Ended December 31,
2005	2004		2004		2003		2002		2001		2000
2.23		2.85		2.80		3.62		2.62		*		2.20

* For the year ended December 31, 2001, fixed charges exceeded earnings before income taxes and fixed charges by $1.3 billion.

     The ratio of earnings to fixed charges was computed on a total enterprise basis. Earnings represent income from continuing operations before income taxes less equity in undistributed net income (loss) of unconsolidated affiliates plus fixed charges. Fixed charges represent interest, amortization of debt discount and expense, and the estimated interest portion of rental charges. We had no preferred stock outstanding for any period presented.

Risks Regarding 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 the future levels of cash flow from operations. Management believes that all statements that express expectations and projections with respect to future matters, including the success of our strategic realignment plan, our Less is More initiative; the strategic fit of radio assets; expansion of market share; our ability to negotiate contracts having more favorable terms; and the availability of capital resources; 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 which could impact our financial 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 business performance. There can be no assurance, however, that management’s expectations will necessarily come to pass.

     Various risks that could cause future results to differ from those expressed by the forward-looking statements included in this Quarterly Report on Form 10-Q include, but are not limited to:

• the impact of general economic 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;

• 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;

• changes in capital expenditure requirements;

• the outcome of pending and future litigation;

• changes in governmental regulations and policies and actions of regulatory bodies;

• fluctuations in interest rates;

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

• changes in tax rates;

• risks and costs inherent in the contemplated IPO, spin-off, cash dividends or borrowings;

• access to capital markets and changes in credit ratings, including those that may result from the proposed strategic realignment; and

• certain other factors set forth in our SEC filings, including our Annual Report on Form 10-K for the year ended December 31, 2004.

     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.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Required information is within Item 2

ITEM 4. CONTROLS AND PROCEDURES

     Our principal executive and financial officers have concluded, based on their evaluation as of the end of the period covered by this Form 10-Q, that our disclosure controls and procedures, as defined under Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, are effective to ensure that information we are required to disclose in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and include controls and procedures designed to ensure that information we are required to disclose in such reports is accumulated and communicated to management, including our principal executive and financial officers, as appropriate to allow timely decisions regarding required disclosure.

     Subsequent to our evaluation, there were no significant changes in internal controls or other factors that could significantly affect these internal controls.

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Part II — OTHER INFORMATION

Item 1. Legal Proceedings

     We are among the defendants in a lawsuit filed September 3, 2002 by JamSports in United States Federal District Court for the Northern District of Illinois. The plaintiff alleged that we violated federal antitrust laws and wrongfully interfered with plaintiff’s business and contractual rights. On March 21, 2005, the jury rendered its verdict finding that we had not violated the antitrust laws, but had tortiously interfered with a contract which the plaintiff had entered into with co-defendant AMA Pro Racing and with the plaintiff’s prospective economic advantage. In connection with the findings regarding tortious interference, the jury awarded to the plaintiffs approximately $17.0 million in lost profits and $73.0 million in punitive damages. In April, 2005, we filed a Renewed Motion for Judgment as a Matter of Law and Motion For a New Trial, to seek a judgment notwithstanding the verdict or a new trial from the U.S. District Court that tried the case. On August 15, 2005, the District Court granted that motion in part, granting judgment in favor of the Clear Channel defendants on the plaintiff’s claim for tortious interference with prospective economic advantage and granting the Clear Channel defendants a new trial with respect to the issue of damages on the plaintiff’s claim for tortious interference with contract. The District Court has set a new date for this trial, on February 6, 2006. We are vigorously defending this remaining claim.

     We are currently involved in certain legal proceedings and, as required, have accrued our estimate of the probable costs for the resolution of these claims. 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 proceedings.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

     (c) Purchases of Equity Securities by the Issuer and Affiliated Purchases.

     On March 30, 2004, July 21, 2004, and then again on February 1, 2005, we publicly announced that our Board of Directors authorized share repurchase programs each up to $1.0 billion effective immediately. The March 30, 2004 program was completed at August 2, 2004 and the July 21, 2004 program was completed at February 4, 2005 upon the repurchase of $1.0 billion each in our shares. On August 9, 2005, our Board of Directors authorized an increase in and extension of the February 2005 program, which had $307.4 million remaining, by $692.6 million, for a total of $1.0 billion. This increase expires on August 8, 2006, although the program may be discontinued or suspended at anytime prior to its expiration. During the three months ended September 30, 2005, we did not repurchase shares.

Item 6. Exhibits

     See Exhibit Index on Page 31

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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.

	CLEAR CHANNEL COMMUNICATIONS, INC.
November 8, 2005	/s/ Randall T. Mays
	Randall T. Mays
	Executive Vice President and Chief Financial Officer
November 8, 2005	/s/ Herbert W. Hill, Jr.
	Herbert W. Hill, Jr.
	Senior Vice President and Chief Accounting Officer

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INDEX TO EXHIBITS

Exhibit
Number	Description
2.1	Agreement and Plan of Merger dated as of October 5, 2001, by and among Clear Channel, CCMM Sub, Inc. and The Ackerley Group, Inc. (incorporated by reference to the exhibits of Clear Channel’s Current Report on Form 8-K filed October 9, 2001).
3.1	Current Articles of Incorporation of the Company (incorporated by reference to the exhibits of the Company’s Registration Statement on Form S-3 (Reg. No. 333-33371) dated September 9, 1997).
3.2	Fourth Amended and Restated Bylaws of the Company (incorporated by reference to the exhibits of the Company’s Current Report on Form 8-K dated April 26, 2005).
3.3	Amendment to the Company’s Articles of Incorporation (incorporated by reference to the exhibits to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 1998).
3.4	Second Amendment to Clear Channel’s Articles of Incorporation (incorporated by reference to the exhibits to Clear Channel’s Quarterly Report on Form 10-Q for the quarter ended March 31, 1999).
3.5	Third Amendment to Clear Channel’s Articles of Incorporation (incorporated by reference to the exhibits to Clear Channel’s Quarterly Report on Form 10-Q for the quarter ended May 31, 2000).
4.1	Agreement Concerning Buy-Sell Agreement by and between Clear Channel Communications, Inc., L. Lowry Mays, B.J. McCombs, John M. Schaefer and John W. Barger, dated August 3, 1998 (incorporated by reference to the exhibits to Clear Channel’s Schedule 13-D/A, dated October 10, 2002).
4.2	Waiver and Second Agreement Concerning Buy-Sell Agreement by and between Clear Channel Communications, Inc., L. Lowry Mays and B.J. McCombs, dated August 17, 1998 (incorporated by reference to the exhibits to Clear Channel’s Schedule 13-D/A, dated October 10, 2002).
4.3	Waiver and Third Agreement Concerning Buy-Sell Agreement by and between Clear Channel Communications, Inc., L. Lowry Mays and B.J. McCombs, dated July 26, 2002 (incorporated by reference to the exhibits to Clear Channel’s Schedule 13-D/A, dated October 10, 2002).
4.4	Waiver and Fourth Agreement Concerning Buy-Sell Agreement by and between Clear Channel Communications, Inc., L. Lowry Mays and B.J. McCombs, dated September 27, 2002 (incorporated by reference to the exhibits to Clear Channel’s Schedule 13-D/A, dated October 10, 2002).
4.5	Buy-Sell Agreement by and between Clear Channel Communications, Inc., L. Lowry Mays, B. J. McCombs, John M. Schaefer and John W. Barger, dated May 31, 1977 (incorporated by reference to the exhibits of the Company’s Registration Statement on Form S-1 (Reg. No. 33-289161) dated April 19, 1984).
4.6	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 the exhibits to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 1997).
4.7	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 the exhibits to the Company’s Current Report on Form 8-K dated August 27, 1998).
4.8	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 by reference to the exhibits to the Company’s Current Report on Form 8-K dated August 27, 1998).

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Exhibit
Number	Description
4.9	Sixth Supplemental Indenture dated June 21, 2000, 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 the exhibits of Clear Channel’s registration statement on Form S-3 (Reg. No. 333-42028) dated July 21, 2000).
4.10	Seventh Supplemental Indenture dated July 7, 2000, 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 the exhibits of Clear Channel’s registration statement on Form S-3 (Reg. No. 333-42028) dated July 21, 2000).
4.11	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 Trustee (incorporated by reference to the exhibits to Clear Channel’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2000).
4.12	Tenth Supplemental Indenture dated October 26, 2001, 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 the exhibits to Clear Channel’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2001).
4.13	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 by reference to the exhibits to Clear Channel’s Annual Report on Form 10-K for the year ended December 31, 2002).
4.14	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 the exhibits to Clear Channel’s Current Report on Form 8-K dated March 18, 2003).
4.15	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 the exhibits to Clear Channel’s Current Report on Form 8-K dated May 2, 2003).
4.16	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 by reference to the exhibits to Clear Channel’s Current Report on Form 8-K dated May 22, 2003).
4.17	Fifteenth Supplemental Indenture dated November 5, 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 the exhibits to Clear Channel’s Current Report on Form 8-K dated November 14, 2003).
4.18	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 by reference to the exhibits to Clear Channel’s Current Report on Form 8-K dated December 10, 2003).
4.19	Seventeenth Supplemental Indenture dated September 15, 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 the exhibits to Clear Channel’s Current Report on Form 8-K dated September 15, 2004).

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Exhibit
Number	Description
4.20	Eighteenth Supplemental Indenture dated November 22, 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 the exhibits to Clear Channel’s Current Report on Form 8-K dated November 17, 2004).
4.21	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 the exhibits to Clear Channel’s Current Report on Form 8-K dated December 13, 2004).
10.1	Employment Agreement dated August 5, 2005 between Clear Channel Outdoor Holdings, Inc. and Paul Meyer (incorporated by reference to the exhibits of Clear Channel’s Current Report on Form 8-K filed August 10, 2005).
10.2*	Severance Agreement and General Release effective September 30, 2005 among Brian E. Becker, SFX Entertainment, Inc. d/b/a Clear Channel Entertainment, and Clear Channel Communications, Inc.
10.3	Employment Agreement dated August 17, 2005 between SFX Entertainment, Inc. d/b/a Clear Channel Entertainment and Michael Rapino (incorporated by reference to the exhibits of Clear Channel’s Current Report on Form 8-K filed August 23, 2005).
10.4	Settlement Agreement dated May 27, 2005 among Roger Parry and Clear Channel Outdoor, Inc.
11	Statement re: Computation of Per Share Earnings.
12	Statement re: Computation of Ratios.
31.1	Certification of Chief Executive Officer 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 of Chief Financial Officer 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.

* Confidential treatment has been requested with respect to certain portions of this exhibit. Omitted portions have been filed separately with the Securities and Exchange Commission.

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EX-10.2

CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTION.

Exhibit 10.2 Severance Agreement and General Release effective September 30, 2005 among Brian E. Becker, SFX Entertainment, Inc. d/b/a Clear Channel Entertainment, and Clear Channel Communications, Inc.

SEVERANCE AGREEMENT AND GENERAL RELEASE

     This Agreement is made and entered into by Brian E. Becker, SSN: [**], (hereinafter referred to as “Employee” or “Executive”); SFX Entertainment, Inc., d/b/a Clear Channel Entertainment and all of its past, present and future parents, subsidiaries and affiliates and their employees, officers, directors, agents, insurers and legal counsel (hereinafter referred to as “Company”); and, Clear Channel Communications, Inc. and all of its past, present and future parents, subsidiaries and affiliates and their employees, officers, directors, agents, insurers and legal counsel (hereinafter referred to as “Clear Channel”), in full and final settlement of any and all claims Employee may have or hereafter claim to have against Company and Clear Channel.

     WHEREAS, Employee and Clear Channel entered into an Employment Agreement, effective August 1, 2000, as amended on February 12, 2004 (“Employment Agreement”); and

     WHEREAS, Employee and Clear Channel mutually agree to terminate the Employment Agreement, except as stated herein;

     NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:

1. Consideration for Agreement.

     1.1 Employee will no longer be a full-time employee of Company as of September 30, 2005 (the “Termination Date”). However, Clear Channel agrees to retain Employee as a

[**]   CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTION.

1

CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTION

consultant to Clear Channel from the Termination Date through the earlier of either (i) the date Employee exercises his stock option grants under the SFX Entertainment Inc. 1998 and 1999

[**]   CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTION.

2

Stock Option and Restricted Stock Plans (“SFX Stock Options”), or (ii) the expiration of the SFX Stock Options on October 8, 2008, whichever occurs first. Clear Channel will compensate Employee for his services as a consultant in the amount of $1,000.00 per month. Employee’s duties as a consultant shall not exceed three (3) hours per month and shall be performed at such times and places as may be mutually agreed upon by Employee and the Company. The Company shall report the consulting fee payments made hereunder by (i) filing the appropriate 1099 forms for this amount, and (ii) making any other reports required by law. Employee agrees to comply, on a timely basis, with all tax reporting requirements applicable to the receipt of such payments and other compensation received hereunder and to timely pay all taxes due with respect to such amounts.

     1.2 In return for this Agreement and in full and final settlement, compromise, and release of all of Employee’s claims (as described in Section 2 below), Company agrees to pay as severance compensation to Employee the sum of Nine Hundred Twenty-Five Thousand Dollars ($925,000.00), less applicable federal and state withholding and all other ordinary payroll deductions. The first payment of $800,000.00 shall be paid between October 8-14, 2005, and the second payment of $125,000.00 shall be paid between January 1–7, 2006.

     1.3 Company agrees to pay as severance compensation to Employee an amount based on the percentage increase in Company’s EBITDA (earnings before interest, taxes, depreciation and amortization, as determined in accordance with generally accepted accounting principles by the firm of independent certified public accountants regularly engaged by the Company to prepare its financial statements and audit reports) as set forth in Exhibit A for (i) calendar year 2005 and (ii) calendar year 2006, multiplied by 119/365 (the ratio of the number of days in 2006 through April 29, 2006 to the total number of days in the year). This compensation shall be paid

3

by Company as soon as practicable following publication of the Company’s financial statements for the applicable year, but in no event later than 60 days following the end of 2005 or 2006, as the case may be, and only if Employee does not revoke this Agreement.

     1.4 Company agrees to pay to Becker Entertainment Group, LLC (“BEG”) the sum of [**], between [**] to fund operating expenses for the purpose of [**]. Until [**], Employee and/or BEG shall offer to Company the right of first refusal for Company to [**]. Company shall have fourteen (14) days after receipt of the proposal to accept or decline the proposal, unless a third party artist or rights holder provides written notice of a shorter response time. If Company declines any opportunity required to be offered to it pursuant to the preceding sentence, then Employee and/or BEG shall be free to pursue such opportunity for their own account or with third parties, provided that they do so on substantially the same terms that are offered to Company.

     1.5 Company agrees that Employee shall have the right of first refusal, at a price to be determined by Company, for the following Company divestitures should they occur: [**]. Employee shall have up to twenty-one (21) days after receipt of financial statements related to such asset to exercise the right of first refusal. If Employee declines any opportunity required to be offered to him pursuant to this section, then Company shall be free to pursue such opportunity for its own account or with third parties, provided that it does so on substantially the same terms that are offered to Employee.

     1.6 If not already vested, all of Employee’s Clear Channel stock option grants under the Clear Channel Communications, Inc. 1998 and 2001 Stock Incentive Plans (“CCC Stock Options”) shall fully vest on the Termination Date. Employee shall have the remainder of the

[**]   CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTION.

4

term of each CCC Stock Option to exercise such CCC Stock Option, determined without regard to the termination of Employee’s status as a full time employee of Company.

     1.7 Unless otherwise specified, the payments and obligations set forth in Sections 1.1 through 1.2 and 1.4 shall be made by Company and/or Clear Channel, as applicable, after the expiration of the seven-day revocation period noted in Section 7.4, and only if Employee does not revoke this Agreement. Unless required pursuant to federal and/or state tax requirements, the amounts payable to Employee under this Agreement shall not be subject to offset or adjustment.

2. Employee’s Release of Claims

     2.1 Employee hereby irrevocably and unconditionally releases and forever discharges Company and Clear Channel from any and all claims, demands, causes of action, and liabilities of any nature, both past and present, known and unknown, resulting from any act or omission of any kind occurring on or before the date of execution of this Agreement which arise under contract or common law, or any federal, state or local law, regulation or ordinance. Employee understands and agrees that this Release of Claims includes, but is not limited to, the following: all claims, demands, causes of action and liabilities for past or future loss of pay or benefits, expenses, damages for pain and suffering, punitive damages, compensatory damages, attorney’s fees, interest, court costs, physical or mental injury, damage to reputation, and any other injury, loss, damage or expense or equitable remedy of any kind whatsoever. However, nothing in this Agreement is intended to diminish any of Employee’s benefit rights which might continue after termination of employment.

     2.2 The provisions of Section 2.1 shall not include any rights for insurance coverage or indemnity with respect to any third party claims against Employee relating to his employment with Company. In addition, the Company shall indemnify the Employee to the fullest extent

5

permitted by the laws of the State of Delaware, as in effect at the time of the subject act or omission, and shall advance to the Employee reasonable attorneys’ fees and expenses as such fees and expenses are incurred (subject to an undertaking from the Employee to repay such advances if it shall be finally determined by a judicial decision which is not subject to further appeal that the Employee was not entitled to the reimbursement of such fees and expenses), and the Employee will be entitled to the protection of any insurance policies that the Company may elect to maintain generally for the benefit of its directors and officers against all costs, charges and expenses incurred or sustained by him in connection with any action, suit or proceeding to which he may be made a party by reason of his being or having been a director, officer or employee of the Company or any of its subsidiaries, or his serving or having served any other enterprise as a director, officer or employee at the request of the Company (other than any dispute, claim or controversy arising under or relating to this Agreement).

     2.3 Employee additionally hereby irrevocably and unconditionally releases and forever discharges Company and Clear Channel from any and all claims, demands, causes of action and liabilities arising out of or in any way connected with, directly or indirectly, Employee’s employment with Company or any incident thereof, including, without limitation, his treatment by Company or Clear Channel or any other person, and the terms and conditions of his employment, or any claims under the Older Workers Benefit Protection Act of 1990 and the Age Discrimination in Employment Act (which prohibits discrimination on the basis of age).

     2.4 Employee does not waive rights or claims that arise following the execution of this Agreement.

3. Nondisclosure of Confidential Information: Employee reaffirms his obligations pursuant to Section 4 of his Employment Agreement, as set forth fully below:

6

During the course of the Executive’s employment with the Company, the Company will provide the Executive with access to certain confidential information, trade secrets, and other matters which are of a confidential or proprietary nature, including but not limited to the Company’s customer lists, formatting and programming concepts and plans, pricing information, production and cost data, compensation and fee information, strategic business plans, budgets, financial statements, and other information the Company treats as confidential or proprietary (collectively the “Confidential Information”). The Company agrees to provide on an ongoing basis such Confidential Information as the Company deems necessary or desirable to aid the Executive in the performance of his duties. The Executive understands and acknowledges that such Confidential Information is confidential and proprietary, and agrees not to disclose such Confidential Information to anyone outside the Company except to the extent that (i) the Executive deems such disclosure or use reasonably necessary or appropriate in connection with performing his duties on behalf of the Company; (ii) the Executive is required by order of a court of competent jurisdiction (by subpoena or similar process) to disclose or discuss any Confidential Information, provided that in such case, the Executive shall promptly inform the Company of such event, shall cooperate with the Company in attempting to obtain a protective order or to otherwise restrict such disclosure, and shall only disclose Confidential Information to the minimum extent necessary to comply with any such court order; or (iii) such Confidential Information becomes generally known to and available for use in the industries in which the Company does business, other than as a result of any action or inaction by the Executive. The Executive further agrees that he will not during employment and/or at any time thereafter use such Confidential Information in competing, directly or indirectly, with the Company. At such time as the Employee shall cease to be employed by the Company, he will immediately turn over to the Company all Confidential Information, including papers, documents, writings, electronically stored information, other property, and all copies of them, provided to or created by him during the course of his employment with the Company, provided however, that Executive shall have the right to keep his rolodex (and/or the electronic equivalent thereof). This nondisclosure covenant is binding on the Executive, as well as his heirs, successors, and legal representatives, and will survive the termination of his Employment Agreement for any reason.

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4. Non-Competition.

     4.1 Employee reaffirms his obligations pursuant to Section 5 of his Employment Agreement as set forth fully below. However, the parties agree that this non-competition covenant shall only apply until April 29, 2006:

(a) To further preserve the rights of the Company pursuant to the nondisclosure covenant discussed above, and in consideration for the stock options and other consideration promised by the Company under his Employment Agreement, during Executive’s employment with the Company and for a period of 12 months thereafter regardless of the reason for termination of employment, the Executive will not, directly or indirectly, as an owner, director, principal, agent, officer, employee, partner, consultant, servant, or otherwise, carry on, operate, manage, control, or become involved in any manner with any business, operation, corporation, partnership, association, agency, or other person or entity which is in the business of primarily promoting, producing, and presenting live diversified entertainment events of a character presented by the Entertainment Businesses during the Executive’s employment by the Company in any location in which the Company, or any subsidiary or affiliate of the Company, operates or has specific plans to operate that were known to the Employee during the Employee’s employment with the Company, including any area within a 50-mile radius of any such location. The foregoing shall not prohibit the Employee from owning up to 5.0% of the outstanding securities or other interests in any partnership, trust, corporation, or other entity provided such ownership is passive or, after the Executive’s employment with the Company has terminated, from being employed in the entertainment industry provided such employment is not primarily related to the promotion, production and presentation of live diversified entertainment events of a character presented by the Entertainment Businesses during the Executive’s employment by the Company. Notwithstanding the foregoing, after the Executive’s employment with the Company has terminated, upon receiving written permission by the Board, the Executive shall be permitted to engage in such competing activities that would otherwise be prohibited by this covenant if such activities are determined in the sole discretion of the Board in good faith to be immaterial to the operations of the Company, or any subsidiary or affiliate of the Company, in the location in question.

8

(b) To further preserve the rights of the Company pursuant to the nondisclosure covenant discussed above, and for the consideration promised by the Company under his Employment Agreement, during the term of Executive’s employment with the Company and for a period of 12 months thereafter regardless of the reason for termination of employment, unless such termination is by the Executive for Good Reason, the Executive will not, directly or indirectly, either for himself or for any other business, operation, corporation, partnership, association, agency, or other person or entity, call upon, compete for, solicit, divert, or take away, or attempt to divert or take away any customer with whom the Company, or any subsidiary or affiliate of the Company, (i) has an existing agreement or business relationship; (ii) has had an agreement or business relationship within the six-month period preceding the Executive’s last day of employment with the Company; or (iii) has included as a prospect in its applicable pipeline and the same was known to the Executive during his employment with the Company.

(c) The Company and the Executive agree that the restrictions contained in this noncompetition covenant are reasonable in scope and duration and are necessary to protect the Company’s business interests and Confidential Information. If any provision of this noncompetition covenant as applied to any party or to any circumstance is adjudged by a court or arbitrator to be invalid or unenforceable, the same will in no way affect any other circumstance or the validity or enforceability of his Employment Agreement. If any such provision, or any part thereof, is held to be unenforceable because of the scope, duration, or geographic area covered thereby, the parties agree that the court or arbitrator making such determination shall have the power to reduce the scope and/or duration and/or geographic area of such provision, and/or to delete specific words or phrases, and in its reduced form, such provision shall then be enforceable and shall be enforced. The parties agree and acknowledge that the breach of this noncompetition covenant will cause irreparable damage to the Company, and upon breach of any provision of this noncompetition covenant, the Company shall be entitled to injunctive relief, specific performance, or other equitable relief; provided, however, that this shall in no way limit any other remedies which the Company may have (including, without limitation, the right to seek monetary damages).

(d) Should the Executive violate the provisions of this noncompetition covenant, then in addition to all other rights and remedies available to the Company at law or in equity, the duration of this covenant shall automatically be extended for the period of

9

time from which the Employee began such violation until he permanently ceases such violation.

     4.2 The Parties agree that Employee may be employed in the entertainment industry or own a company in the entertainment industry provided said employment or ownership does not violate the non-competition provisions set forth in Section 4.1 above (“Non-Compete”). In the event that Employee plans to acquire assets that in-whole or in-part violate the Non-Compete, Employee agrees that he shall remedy the violation prior to the closing of such acquisition (“Closing”). If Employee’s efforts are unsuccessful prior to the Closing, Employee shall have thirty (30) days to cure such breach of this Agreement by divesting the assets that are in competition with the Company’s business.

     4.3 . The Parties agree that Employee may call upon or otherwise engage in discussions and/or business with companies that are customers of Company, provided such contact does not divert or take away business from Company or otherwise violate the Non-Compete. In the event that Employee’s discussions or business with customers of Company violates the Non-Compete, Employee shall have thirty (30) days to cure such breach of this Agreement.

5. Non-Solicitation of Company Employees.

     5.1 Consistent with Employee’s obligations under Section 6 of his Employment Agreement, Employee agrees as follows:

To further preserve the rights of the Company pursuant to the nondisclosure covenant discussed above, and in consideration for the stock options grants and other consideration promised by the Company under his Employment Agreement and this Agreement, during the term of the Employee’s employment with the Company and until October 1, 2006 the Employee will not, directly or indirectly, (i) solicit or hire Bruce Eskowitz, Scott Zeiger, Steve Winton, or David Ian; (ii) solicit or encourage Bruce Eskowitz,

10

Scott Zeiger, Steve Winton, or David Ian to terminate their respective employment with the Company, or any subsidiary or affiliate of the Company; or (iii) solicit or encourage Bruce Eskowitz, Scott Zeiger, Steve Winton, or David Ian to accept employment with any business, operation, corporation, partnership, association, agency, or other person or entity with which the Employee may be associated. If, during the term of this nonsolicitation covenant, the Employee learns, (but without any duty or obligation to inquire) that any such employee has accepted employment with any business, operation, corporation, partnership, association, agency, or other person or entity with which the Employee may be associated (other than the Company), the Employee will immediately send notice to the Company identifying the employee and certifying that the Employee did not breach any provision of this nonsolicitation covenant.

     5.2 Company agrees to release and forever discharge Employee from any and all claims, causes of action, and liability related to conversations Employee has had with Bruce Eskowitz, Scott Zeiger, Steve Winton, or David Ian in violation of Section 5.1 herein, but only to the extent that such conversations occurred prior to the execution of this Agreement. The parties further agree that any discussions Employee has had or will have with Scott Zeiger relating solely to Section 1.5 above do not violate the provisions of Section 5.1 herein.

6. Cooperation: The Employee agrees to cooperate with the Company, as reasonably requested by the Company by responding to questions, attending depositions, administrative proceedings and court hearings, executing documents, and cooperating with the Company and its accountants and legal counsel with respect to business issues, and/or claims and litigation of which he has personal or corporate knowledge. The Employee further agrees, to maintain, in strict confidence, any information of which he has knowledge regarding current and/or future claims, administrative proceedings and litigation (except as required by subpoena or other applicable legal process, after the Company has been given reasonable notice and opportunity to seek relief from such requirement). The Employee agrees not to communicate with any

11

party(ies), their legal counsel or others adverse to the Company in any such claims, administrative proceedings or litigation except through the Company’s designated legal counsel (except as required by subpoena or other applicable legal process, after the Company has been given reasonable notice and opportunity to seek relief from such requirement). The Employee shall make himself available at reasonable times and upon reasonable notice to answer questions or provide other information within his possession as requested by the Company relating to the Company, its subsidiaries and/or their respective operations in order to facilitate the smooth transition of the Employee’s duties to his successor. The Company shall reimburse the Employee for any documented out-of-pocket expenses, including but not limited to reasonable and necessary legal fees, reasonably incurred by the Employee in complying with this Paragraph.

7. Other Understandings and Agreements:

     7.1 Employee agrees that this Agreement binds him and also binds his spouse, children, heirs, executors, administrators, assigns, agents, partners, successors in interest, and all other persons and entities in privity with him.

     7.2 Employee promises and represents that he will not disclose, disseminate, or publicize, or cause or permit to be disclosed, disseminated, or publicized, any of the terms of this Agreement, except (1) to the extent necessary to report income to appropriate taxing authorities; (2) in response to an order or subpoena of a court of competent jurisdiction; (3) in response to any subpoena issued by a state or federal governmental agency; (4) in order to clarify terms of the right of first refusal and/or overhead contributions with any financing partners; or (5) to his spouse, attorneys and financial advisors, as necessary, and all of whom shall agree to keep this Agreement confidential as a condition of any such disclosure. The Company shall issue a press

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release regarding the new relationship and activities of the parties as mutually agreed upon by the Company and the Employee.

     7.3 Employee promises and represents that he will not make or cause to be made any derogatory, negative or disparaging statements, either written or verbal, about Company.

     7.4 Employee may take up to twenty-one (21) days from receipt of this Agreement to decide whether to accept this Agreement. Employee may actually accept and sign this Agreement at any time within this 21-day period, but Employee is not required to do so by Company. If Employee has not signed this Agreement as of the 22^nd day after receipt, this severance offer is revoked by Company. In deciding whether to accept the terms of this Agreement, Employee is also advised that he may revoke this entire release up to seven days following its execution and that he may consult with an attorney of his choice.

     7.5 Employee agrees that, if any single section or clause of this Agreement should be found invalid or unenforceable, it shall be severed and the remaining sections and clauses enforced in accordance with the intent of this Agreement.

     7.6 This Agreement contains the entire understanding between Employee, Company and Clear Channel, and supersedes all prior agreements and understandings relating to the subject matter of this Agreement, including, but not limited to, Employee’s Employment Agreement. Notwithstanding the foregoing, Section 4 (Nondisclosure of Confidential Information), Section 5 (Non-Competition) and Section 6 (Nonsolicitation of Company Employees) of Employee’s Employment Agreement shall remain in full force and effect, except as modified in this Agreement. This Agreement shall not be modified, amended, or terminated unless such modification, amendment, or termination is executed in writing by Employee and an authorized representative of Company and/or Clear Channel.

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     7.7 Any disputes that relate in any way to the provisions of this Agreement shall be arbitrated by a single arbitrator pursuant to the American Arbitration Association National Rules for the Resolution of Employment Disputes. With the exception of attorney’s fees, all American Arbitration Association expenses will be paid by Company.

     7.8 This Agreement shall be construed in accordance with the laws of the State of Texas without regard to any applicable conflicts of law and shall be deemed performable in San Antonio, Bexar County, Texas.

     7.9 Employee represents and certifies that he (1) has received a copy of this Agreement for review and study and has had ample time to review it before signing; (2) has read this Agreement carefully; (3) has been given a fair opportunity to discuss and negotiate the terms of this Agreement; (4) understands its provisions; (5) understands that he has the right to consult with an attorney; (6) has determined that it is in his best interest to enter into this Agreement; (7) has not been influenced to sign this Agreement by any statement or representation by Company not contained in this Agreement; and (8) enters into this Agreement knowingly and voluntarily.

ACCEPTED AND AGREED:

	BRIAN E. BECKER
Date: 10/3/05	/s/ Brian E. Becker
	SFX ENTERTAINMENT, INC., D/B/A CLEAR CHANNEL ENTERTAINMENT
Date: 10/4/05	By:	/s/ Randall T. Mays
	Name Randall T. Mays
	Title:	Interim Chief Executive Officer
	CLEAR CHANNEL COMMUNICATIONS, INC.
Date: 10/4/05	By:	/s/ Randall T. Mays
	Name Randall T. Mays
	Title:	Executive Vice President

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EXHIBIT A

SUMMARY OF ADDITIONAL COMPENSATION TERMS

				Prorated Amount of
	Amount of Compensation			Compensation
Percentage EBITDA Increase	2005			2006
				(percentage
				increase in EBITDA
				for the full
				calendar year,
				multiplied by
				119/365 - the ratio
				of the number of
				days in 2006
				through April 29,
				2006 to the total
				number of days in
				the year )
Less than 15.0%	$	0.00		$	0.00
15.00% but less than 17.50%	$	225,000.00		$	73,356.00
17.50% but less than 20.00%	$	250,000.00		$	81,507.00
20.00% but less than 22.50%	$	300,000.00		$	97,808.00
22.50% but less than 25.00%	$	350,000.00		$	114,110.00
25.00% but less than 26.00%	$	400,000.00		$	130,411.00
26.00% but less than 27.00%	$	460,000.00		$	149,973.00
27.00% but less than 28.00%	$	530,000.00		$	172,795.00
28.00% but less than 29.00%	$	610,000.00		$	198,877.00
29.00% but less than 30.00%	$	700,000.00		$	228,219.00
30% or over	$	800,000.00	plus*	$	260,822.00	plus*

*	For 2005: ($100,000.00 multiplied by the total of each full 1.0% EBITDA increase over 30%). For example: If the percentage EBITDA increase is 35.30%, then the Amount of Annual Bonus will be $1,300,000.00 ($800,000.00 plus ($100,000.00 x 5)).
*	For 2006: ($32,603.00 multiplied by the total of each full 1.0% EBITDA increase over 30%). For example: If the percentage EBITDA increase is 35.30%, then the Amount of Compensation will be $423,837.00 ($260,822.00 plus ($32,603.00 x 5)).

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EX-10.4

Exhibit 10.4 Settlement Agreement dated May 27, 2005 among Roger Parry and Clear Channel Outdoor, Inc.

Roger Parry
27 Edwardes Square
London
W8 6HH

27^th May 2005

Dear Roger,

This letter confirms our agreement regarding your status with Clear Channel Outdoor, Inc. (the “Company”) effective June 1, 2005 – May 31, 2009. This letter agreement (“Letter”) supersedes all prior understandings and agreements, except as stated in this Letter. All the terms of our relationship are set forth in this Letter. For the avoidance of doubt, save as set out in this Letter, your Service Agreement shall no longer continue in force or have any effect.

By signing a copy of the waiver at Schedule 1 which is attached to this Letter on the date of this Letter you confirm you have no claims whatsoever against the Company or any Associated Company for wrongful or unfair dismissal. You also undertake that you will sign a copy of the waiver at Schedule 2 following the termination of the period of Non Executive Employment referred to below (“NEE”), waiving any claims which you may have at the termination of the period of NEE against the Company or any Associated Company. You should note that the terms of this Letter are subject to you agreeing to execute Schedule 1 at the date of this Letter, and Schedule 2 at the end of the period of NEE, provided that the Company materially complies with its material obligations under this letter.

For the 12 months commencing June 1^st 2005 until May 31^st 2006 you agree that you will continue to work for the Company, but you will do so under revised contractual terms. The new details are described below under the heading of Modified Employment (“ME”).

Immediately after the end of the period of ME, you agree that for the 36 months from June 1^st 2006 until May 31^st 2009 you will work as a Non Executive Director for the Company for a period of NEE.

Modified Employment (“ME”) : June 1^st 2005 to May 31^st 2006

During the period of ME, you will continue to receive exactly the same compensation package as is current now — your base salary, car allowance, Term Assurance Policy (Scottish Widows No 8428557) and Executive Personal Pension Scheme (Merrill Lynch) for the remainder of calendar year 2005 and the first five months of 2006, as allowed by UK law and our benefits plans. All these are fixed amounts and are paid and taxed at source as salary. For the record, subject to the deduction of tax and national insurance, your compensation package (“the ME Terms”) will be as follows:

• a base salary at the rate of £37,493.75 per month;

• car benefit at the rate of £3,124.50 per month;

• contributions to the Term Assurance Policy at the rate of £277.07 per month;

• contributions to the Executive Personal Pension Scheme will continue at the rate of 20% of cash compensation per annum (£1,760 per month), up to the approved UK Government “Earnings Cap”.

• You confirm that you have already waived your rights to receive medical insurance benefits from the company and that you will continue to waive these rights for the entire period covered by this letter.

• Similarly, pension contributions will continue at the same rate (£1,760 per month), despite the abolition of the Earnings Cap as from 6 April 2006.

In the year 2006 for the 5 months which you will be employed under the ME Terms, the salary and allowances will continue at the same rate as stated above so, to be clear, even if there is an inflation pay rise given to UK employees, you will not receive this for the 5 months of 2006.

Your bonus for 2005 will continue on exactly the current agreed basis, as stated in the attached bonus plan of the Company (attached as Exhibit “A”). You will be paid a percentage of your base salary linked to the growth of OIBAN and OIBDAN of what is currently CCI. However, we agree that the minimum bonus that you will be paid for the period which you will be working under the ME Terms during 2005 will be £200,000. It is recognised that you will have no effective management control of the business from 1^st June 2005 onwards and so your ability to influence the bonus is effectively zero.

For the 5 months which you will be working under the ME Terms in 2006, your bonus will be calculated as being 5/12 of the bonus paid for the calendar year 2005 (i.e. a minimum of £83,333). For simplicity, this bonus will be paid in June 2006.

Your FURBS (Non-Approved retirement benefits scheme) arrangements for 2005 and the first 5 months of 2006 will remain exactly as they are now but the FURBS benefit will end on May 31^st 2006, subject to UK law.

For 2006 the final pension and FURBS payments will be made in June 2006. Your FURBS plan ceases on May 31^st 2006.

During the period of ME, Clear Channel will continue to provide you with office space at Cluny Mews and with the services of Zarina Khan as your assistant. She will report to you and follow your directions and support you in your Clear Channel projects and any additional Company duties as you define. It is the intention that you would remain in your existing office to minimise disruption, but if the needs of the business demand it, you will agree to move to another part of the site subject to any alternative office accommodation being reasonably suitable for your purposes. You will have no other employees reporting to you. At the end of May 2006, it is probable that Zarina will be made redundant. In the event that Zarina chooses to leave Clear Channel before the end of the period of ME, you will not be entitled to the appointment of a new assistant but the company will use its best efforts to supply assistant services from other existing employees where these services are required for Clear Channel duties.

In the event that Clear Channel chooses to move from Cluny Mews during the period of ME, the company will use its best efforts to provide you with alternative, suitable, office accommodation but this may not be possible.

During the period of ME, the Company will continue to supply you with computer equipment and a mobile phone/ Blackberry but all personal telephone calls not on Clear Channel business will be re-charged to you. At the end of the period of ME, this equipment will have to be returned to the Company unless it agrees to sell such equipment to you. All other Company property will be returned to the Company at the end of the ME period.

During the period of ME:

• You will be entitled to use the title “Chairman, Clear Channel International”. However, you do not have any authority to act on behalf of the Company and you agree that you will not do so. You will not be authorised to commit the Company to any contract or expenditure unless there is prior, explicit, written approval from the President of Clear Channel Outdoor.

• You will agree to use your best efforts to support and assist the Company in its preparation for its IPO. This will include reviewing documents and participating in meetings. Under the terms of this Letter you must make yourself available for work for a total of ten days during 2005. You will use your reasonable efforts to provide additional days of work if required and if mutually agreed with myself. Any legitimate expenses you incur in pursuit of theses authorised duties will be reimbursed by the Company on production of receipts consistent with past practices.

• You will also be required to continue as a member of the Board of Clear Media in China and to use your best efforts to ensure good working relations between Clear Media and Clear Channel. Any fees that are paid to you as Deputy Chairman of Clear Media will be paid to you directly by Clear Media. You will make yourself available for a maximum of 8 days in 2005 and a maximum of 5 days in 2006 for these duties. If mutually agreed between you and I you will provide additional days. During the ME period you will provide myself and the President of Clear Channel Outdoor with a written monthly report on progress in China and will use your best efforts to attend China Board meetings in person or by telephone. Any expenses you incur in connection with participating in these Board meetings will be reimbursed by Clear Channel, consistent with past practices.

• Apart from the two exceptions above relating to the IPO and to China, in carrying out your duties you will not be required to attend the Clear Channel offices, nor to participate in any meetings, nor to carry out any tasks on behalf of Clear Channel unless this is by mutual agreement between yourself and the President of Clear Channel Outdoor.

• It is the intention of the Company that you may be asked to carry out certain tasks for Clear Channel Outdoor such as investigating acquisitions or new contracts, subject to your agreement to carry out such tasks. Where these tasks are mutually agreed and approved in advance, the Company will reimburse you for all legitimate expenses incurred by you in pursuit of these agreed tasks. You will not be entitled to any other type of expense reimbursement other than for the approved projects.

As Chairman of Clear Channel International you will report to me in my capacity as Chief Executive Officer on a monthly basis as stated above, but you will not be required to carry out any duties whatsoever, save for the two exceptions stated above and except as mutually agreed. In respect of other mutually agreed projects, you will report directly to the President of Clear Channel Outdoor and follow his instructions.

Non Executive Employment (“NEE”): June 1^st 2006 to May 31^st 2009

On or before May 31^st 2006 you will be issued with a formal Letter of Appointment as a Non Executive Director/Part-Time Employee of Clear Channel International Ltd or some other company within the Clear Channel group. As a Non Executive Director/ Part-Time Employee you will receive a remuneration of £2,000 per month, subject to deductions at source for income tax and national insurance contributions, for a period of 36 months. You are not eligible for a bonus during NEE.

During the NEE period you will not be provided with office space or secretarial support. You will not have the use of a Company telephone. You will not be able to claim any expenses except for sums authorised in advance in writing in connection with mutually agreed projects. During this

employment you will continue to receive the Executive Personal Pension Scheme contribution from the Company (20% of cash compensation i.e. £400 a month) and the contributions to the Term Assurance Policy (£277.07 per month), subject at all times to UK law. You will not receive the FURBS payments nor any other benefits or allowances of any sort.

To facilitate your ability to provide services during the NEE period the Company will continue to provide (at the Company’s cost) use of a Company e mail address, a lap top computer and a broadband connection to your home. You will not have access to any part of the Company’s computer network (apart from your email box).

As a Non Executive Director/ Part-time Employee you will make yourself available for a maximum of twelve days a year to work on projects as requested by myself. If I ask you to work for more than twelve days a year, this will be subject to your agreement and will be remunerated at the rate of £2,000 a day or any other higher fee that we mutually agree.

During the period of NEE, you will continue to be a part-time employee of Clear Channel, and payroll taxes will be deducted and pension and assurance payments made at source. This means that during the period of NEE you will be continue to be eligible to continue vesting in Restricted Stock and Share Option schemes, subject to applicable UK law and the terms of the options plans.

Conduct and Duties

During the period of both ME and NEE, you will be entitled to undertake paid or unpaid work for any organisation that you choose, for any amount of time that you choose, even if this means you are never available to Clear Channel, except for the requirements stated above. The sole exception is that you agree that you will not provide services or advice, paid or unpaid, take employment with or otherwise be associated with or interested in any company or person which could be described as being in the outdoor advertising business. Specifically, this would mean companies such as JC Decaux, Viacom Outdoor, Maiden, Van Wagner, Lamar, and any similar organisations.

You may only provide services or advice to an outdoor advertising competitor if you have received explicit and unambiguous written approval from me. If I grant approval, you will then forfeit any monies or other benefits owed to you under this Letter , starting from the date at which my approval is granted. In the event you provide services or advice to an outdoor advertising competitor without receiving written approval from me, all future payments will cease, without prejudice to the Company’s other rights and remedies under English law.

If you ever, at any time, during or after the expiration of this Letter, reveal to any competitor trade secrets or provide them with any proprietary information or documents which you have obtained as part of your employment with Clear Channel, you will be liable for the normal sanctions under the laws of the United Kingdom. If such a breach of trust occurs during the period of this agreement you will forfeit any monies or benefits due under this Letter not yet paid at the time of the breach.

At all times that you remain an employee of Clear Channel, both during the period of ME and NEE, you will use your best efforts to promote the interests of Clear Channel and will seek to ensure that the Company is always held in the highest regard. You will continue to be bound by the normal rules of commercial confidentiality and, in particular, you will be continue to be bound by sections 13 and 14 of your Service Agreement, in respect of inventions and confidentiality. [Attached as Exhibit “B”.]

Save as set out below regarding material breach, the payments described in this Letter and on the attached schedule are regarded as contractual and absolutely binding. They are not in any way dependent upon your own performance, availability or conduct and there are no circumstances whatsoever under which the payments will not be made to you, save that should you materially breach

the obligations related to the items listed below, after written notice by the Company and an opportunity to cure such breach within 10 working days after receipt of said notice, the Company may terminate this agreement (without notice or payment in lieu of notice) and Company will have no further obligations to you whatsoever, including payment of any compensation, bonus, benefits or otherwise, and the Company will be entitled to all other remedies available under UK law. Vested benefits and all payments made to that date, however, will not be forfeited.

1.	Duty to not act on behalf of the Company except as mutually agreed,
2.	Duty to support and assist with IPO,
3.	Duties regarding Clear Media in China,
4.	Confidentiality of Trade Secrets and Proprietary Information,
5.	Duties regarding inventions and intellectual property,
6.	Duty regarding competitors,
7.	Any act which would entitle the Company under English law to dismiss you summarily for gross misconduct, such as misappropriation of Company funds.

The payments in respect of base salary, allowances and non executive fees will be exactly as specified in this Letter, except as noted above regarding material breach. The exact quantum of the payment in respect of bonuses, FURBS and pension are uncertain as they depend on corporate performance but that is the only uncertainty and they will be paid to you under any circumstances going forward, except as noted above regarding material breach.

In the event of your death during the period of ME or NEE, the sums of money owed to you under the terms of this Letter will be paid to your Estate. As you will not be expected to be able to influence the performance of the Company, the outcome of the bonus payments will be dependent on the actions of others but the payments of the bonuses will occur in any event.

This letter shall be subject to English law, and the parties submit to the exclusive jurisdiction of the English Courts.

For the purposes of this letter and its Schedules, Associated Company means any company or corporation which is a holding company for the time being of the Company, or a subsidiary for the time being of the Company or of any such holding company (“holding company” and “subsidiary” having the meanings set out in section 736, Companies Act 1985 as amended), or any company which is designated at any time an Associated Company by the directors of the board of the Company or any holding company.

I have very much enjoyed working with you over the past eight years and have valued your input in the building and development of the Clear Channel businesses. We are moving into a new and very different phase of the corporate relationship between us now but I am confident that this will be as happy, successful and mutually rewarding as the past eight years.

Please sign and return a copy of this letter together with a signed copy of Schedule 1 attached, to show your acceptance of the terms of this letter. You are required to take independent legal advice relating to the terms of the attached Schedule. Therefore, the Company agrees to reimburse you for reasonable and normal legal expenses in order to have this agreement and the attached Schedules reviewed by your independent legal counsel within 14 days receipt of an appropriate invoice from your legal advisors addressed to you.

Kind regards,

/s/ Mark P. Mays

Mark P. Mays
President & CEO

I confirm that I have read and understood the terms of this Letter and Schedule 1, and agree to its terms. I warrant that I will agree to and sign a copy of Schedule 2 upon the expiry of the period of NEE provided that the Company is not in material breach of this Letter at that date and I acknowledge that the fee for the last month of the NEE shall be withheld until I sign Schedule 2.

/s/ Roger Parry	7/June/05
Roger Parry	Date

SCHEDULE 1

This Deed is a Schedule to the letter dated May 27, 2005 (“the Letter”) between you, Roger Parry of 27 Edwardes Square, London, W8 6HH and Clear Channel Outdoor, Inc. (“the Company”).

1. You agree that you accept the terms of this Schedule in full and final settlement of all claims of whatever nature you have or may have against the Company, any Associated Company or any of its or their present or former officers or employees in any country or jurisdiction in the world arising from or in connection with your employment with the Company, including but not limited to any claims under the terms of your Service Agreement dated 20th May 1996 (which the Company denies is still in effect as of this Letter) or its termination and whether any such claim falls within the jurisdiction of an employment tribunal or not (including, without limitation, any claim for wrongful dismissal or for damages for loss of opportunity to exercise any statutory rights or otherwise but excluding any claim relating to personal injury which you are unaware of at the date of the Letter and/or any claim relating to any rights arising from or pursuant to the Company’s material obligations under the Letter.

2. Without prejudice to the generality of Clause 1 you agree that no termination or other payments, expenses or benefits are due to you except as provided for in the Letter to which this document forms the Schedule.

3. In consideration of the payments by the Company to you during the period of Modified Employment set out in the Letter and following careful consideration of the facts and circumstances relating to your employment and the terms of your Service Agreement dated 20th May 1996 and its termination of your employment, you confirm as a separate and binding agreement that you shall not institute or continue any proceedings or complaints against the Company any Associated Company or any of its or their present or former officers or employees before an employment tribunal or court arising out of or in connection with your employment with the Company and the terms of your Service Agreement dated 20th May 1996 or its termination in respect of any of the specific claims of which you are aware and that you hereby raise as follows:

• any claim arising out of a contravention or alleged contravention of Part X of the Employment Rights Act 1996 (unfair dismissal);

• any claim arising out of a contravention or alleged contravention of section 92 (written statement of reasons for dismissal) of the Employment Rights Act 1996;

• any claim pursuant to the Employment Act 2002 or the Employment Act 2002 (Dispute Resolution) Regulations 2004;

• any claim for wrongful dismissal.

4. You warrant that you are not aware of any statutory claims that you may have other than those referred to in clause 3 above.

5. You acknowledge that you have taken advice from the Legal Adviser (being a relevant independent adviser for the purposes of the legislation governing compromise agreements) being David Major of Lyons Davidson solicitors of Bridge House, Baldwin Street, Bristol as to the terms and effect of this Schedule and its effect on your ability to pursue your rights before an employment tribunal and you will procure that the Legal Adviser will sign below.

6. The conditions regulating compromise agreements under the Employment Rights Act 1996 are satisfied.

7. This Schedule shall be subject to English law and the parties submit to the exclusive jurisdiction of the English courts.

Executed as a Deed for and on behalf of the Company and any Associated Company and delivered on ___.

/s/ Mark P. Mays	Director
/s/ Randall Mays	Director

I confirm that I have read and understood the terms of this Schedule and agree to its terms.

Signed as a Deed by Roger Parry	/s/ Roger Parry
In the presence of :	/s/ T.J. Maunder
Name	T.J. Maunder
Address	Draguns, City, Bledlow Ridge
	High Wycombe
Occupation	Chartered Accountant

I, David Major of Lyons Davidson solicitors (“the Legal Adviser”), hereby confirm as follows:

1. I am a Solicitor of the Supreme Court of England and Wales holding a current practising certificate.

2. I have advised Roger Parry of the terms and effect of the Letter between him and Clear Channel Outdoor, Inc, and the terms of this Schedule to the Letter and, in particular, its effect on his ability to pursue his rights before an Employment Tribunal following its signing.

3. I am an independent adviser (as defined at section 203, Employment Rights Act 1996). I am not acting (and have not acted) in relation to this matter for the Company or any Associated Company (as defined in this Schedule).

4. There is in force and was in force when I gave the advice referred to above, cover under a contract of insurance, or an indemnity provided for members of a profession or professional bodies relating to the risk of a claim by Roger Parry in respect of loss arising from such advice.

SIGNED: /s/ David Major

REFERENCE:

DATED: 02 June 2005

SCHEDULE 2

This Deed is a Schedule to the letter dated May 27, 2005 (“the Letter”) between you, Roger Parry of 27 Edwardes Square, London, W8 6HH and Clear Channel Outdoor, Inc. of (“the Company”).

1. You agree that you accept the terms of this Schedule in full and final settlement of all claims of whatever nature you have or may have against the Company, any Associated Company or any of its or their present or former officers or employees in any country or jurisdiction in the world arising from or in connection with your employment with the Company or its termination and whether any such claim falls within the jurisdiction of an employment tribunal or not (including, without limitation, any claim for wrongful dismissal or for damages for loss of opportunity to exercise any statutory rights or otherwise) but excluding any claim arising after May 27, 2005 and relating to personal injury and/or accrued pension rights and/or any rights arising from or pursuant to Company’s material obligations under the Letter.

2. Without prejudice to the generality of Clause 1 you agree that no termination or other payments, expenses or benefits are due to you except as provided for in the Letter to which this document forms the Schedule.

3. In consideration of the payments by the Company to you during the period of Non-Executive Employment set out in the Letter and following careful consideration of the facts and circumstances relating to your employment and its termination of your employment, you confirm as a separate and binding agreement that you shall not institute or continue any proceedings or complaints against the Company any Associated Company or any of its or their present or former officers or employees before an employment tribunal or court arising out of or in connection with your employment with the Company or its termination in respect of any of the specific claims of which you are aware and that you hereby raises as follows:

• any claim arising out of a contravention or alleged contravention of Part X of the Employment Rights Act 1996 (unfair dismissal);

• any claim arising out of a contravention or alleged contravention of section 92 (written statement of reasons for dismissal) of the Employment Rights Act 1996;

• any claim pursuant to the Employment Act 2002 or the Employment Act 2002 (Dispute Resolution) Regulations 2004;

• any claim for wrongful dismissal.

4. You warrant that you are not aware of any statutory claims that you may have other than those referred to in clause 3 above.

5. You acknowledge that you have taken advice from the Legal Adviser (being a relevant independent adviser for the purposes of the legislation governing compromise agreements) David Major of Lyons Davidson Solicitors of Bridge House, Baldwin Street, Bristol as to the terms and effect of this Schedule and its effect on your ability to pursue your rights before an employment tribunal and you will procure that the Legal Adviser will sign below.

6. The conditions regulating compromise agreements under the Employment Rights Act 1996 are satisfied.

7. This Schedule shall be subject to English law and the parties submit to the exclusive jurisdiction of the English courts.

Executed as a Deed for and on behalf of the Company and any Associated Company and delivered on _________.

_______________ Director

_______________ Director

I confirm that I have read and understood the terms of this Schedule and agree to its terms.

Signed as a Deed by Roger Parry	________________________
In the presence of :
Name	________________________
Address	________________________
	________________________
Occupation	________________________

I, David Major of Lyons Davidson Solicitors (“the Legal Adviser”), hereby confirm as follows:

1. I am a Solicitor of the Supreme Court of England and Wales holding a current practising certificate.

2. I have advised Roger Parry of the terms and effect of the Letter between him and Clear Channel Outdoor, Inc, and the terms of this Schedule to the Letter and, in particular, its effect on his ability to pursue his rights before an Employment Tribunal following its signing.

3. I am an independent adviser (as defined at section 203, Employment Rights Act 1996). I am not acting (and have not acted) in relation to this matter for the Company or any Associated Company (as defined in this Schedule).

4. There is in force and was in force when I gave the advice referred to above, cover under a contract of insurance, or an indemnity provided for members of a profession or professional bodies relating to the risk of a claim by Roger Parry in respect of loss arising from such advice.

SIGNED:

REFERENCE:

DATED:                  2009

EXHIBIT “A”

Clear Channel International

2005 OIBAN Bonus Scheme

Name:	Roger Parry	Bucket 1 — OIBAN growth			Bucket 2 — OIBDAN growth
Base Salary (£):	£449,925	Bonus per 1% growth	1.2	%	Bonus per 1% growth	3.0	%

Base OIBAN 000’s	$	70,066	Exchange Rate	0.5461
Base OIBDAN 000’s	$	227,526
Budget Depreciation	$	157,975

Bucket 1										Bucket 2										Total
			OIBAN		Bonus			Bonus							Bonus			Bonus		Bonus		Bonus
OIBAN	OIBAN		Growth		Payable			Payable		OIBDAN		OIBDAN			Payable			Payable		Payable		Payable		%age
Growth	$000’s		$000’s		%			£’s		$000’s		Growth			%			£’s		£’s		$’s		Salary
1%		70,767		701		1.20	%	£	5,399		228,742		0.53	%		1.60	%	£	7,212	£	12,611	$	23,093		2.8	%
2%		71,467		1,401		2.40	%	£	10,798		229,442		0.84	%		2.53	%	£	11,368	£	22,167	$	40,591		4.9	%
3%		72,168		2,102		3.60	%	£	16,197		230,143		1.15	%		3.45	%	£	15,525	£	31,722	$	58,089		7.1	%
4%		72,869		2,803		4.80	%	£	21,596		230,844		1.46	%		4.37	%	£	19,682	£	41,278	$	75,587		9.2	%
5%		73,569		3,503		6.00	%	£	26,996		231,544		1.77	%		5.30	%	£	23,838	£	50,834	$	93,085		11.3	%
6%		74,270		4,204		7.20	%	£	32,395		232,245		2.07	%		6.22	%	£	27,995	£	60,389	$	110,583		13.4	%
7%		74,971		4,905		8.40	%	£	37,794		232,946		2.38	%		7.15	%	£	32,151	£	69,945	$	128,081		15.5	%
8%		75,671		5,605		9.60	%	£	43,193		233,646		2.69	%		8.07	%	£	36,308	£	79,501	$	145,579		17.7	%
9%		76,372		6,306		10.80	%	£	48,592		234,347		3.00	%		8.99	%	£	40,465	£	89,056	$	163,077		19.8	%
10%		77,073		7,007		12.00	%	£	53,991		235,048		3.31	%		9.92	%	£	44,621	£	98,612	$	180,575		21.9	%
11%		77,773		7,707		13.20	%	£	59,390		235,748		3.61	%		10.84	%	£	48,778	£	108,168	$	198,073		24.0	%
12%		78,474		8,408		14.40	%	£	64,789		236,449		3.92	%		11.77	%	£	52,934	£	117,724	$	215,571		26.2	%
13%		79,175		9,109		15.60	%	£	70,188		237,150		4.23	%		12.69	%	£	57,091	£	127,279	$	233,069		28.3	%
14%		79,875		9,809		16.80	%	£	75,587		237,850		4.54	%		13.61	%	£	61,248	£	136,835	$	250,567		30.4	%
15%		80,576		10,510		18.00	%	£	80,987		238,551		4.85	%		14.54	%	£	65,404	£	146,391	$	268,066		32.5	%
16%		81,277		11,211		19.20	%	£	86,386		239,252		5.15	%		15.46	%	£	69,561	£	155,946	$	285,564		34.7	%
17%		81,977		11,911		20.40	%	£	91,785		239,952		5.46	%		16.38	%	£	73,717	£	165,502	$	303,062		36.8	%
18%		82,678		12,612		21.60	%	£	97,184		240,653		5.77	%		17.31	%	£	77,874	£	175,058	$	320,560		38.9	%
19%		83,379		13,313		22.80	%	£	102,583		241,354		6.08	%		18.23	%	£	82,030	£	184,613	$	338,058		41.0	%
20%		84,079		14,013		24.00	%	£	107,982		242,054		6.39	%		19.16	%	£	86,187	£	194,169	$	355,556		43.2	%
21%		84,780		14,714		25.20	%	£	113,381		242,755		6.69	%		20.08	%	£	90,344	£	203,725	$	373,054		45.3	%
22%		85,481		15,415		26.40	%	£	118,780		243,456		7.00	%		21.00	%	£	94,500	£	213,280	$	390,552		47.4	%
23%		86,181		16,115		27.60	%	£	124,179		244,156		7.31	%		21.93	%	£	98,657	£	222,836	$	408,050		49.5	%
24%		86,882		16,816		28.80	%	£	129,578		244,857		7.62	%		22.85	%	£	102,813	£	232,392	$	425,548		51.7	%
25%		87,583		17,517		30.00	%	£	134,978		245,558		7.93	%		23.78	%	£	106,970	£	241,948	$	443,046		53.8	%
26%		88,283		18,217		31.20	%	£	140,377		246,258		8.23	%		24.70	%	£	111,127	£	251,503	$	460,544		55.9	%
27%		88,984		18,918		32.40	%	£	145,776		246,959		8.54	%		25.62	%	£	115,283	£	261,059	$	478,042		58.0	%
28%		89,684		19,618		33.60	%	£	151,175		247,659		8.85	%		26.55	%	£	119,440	£	270,615	$	495,540		60.1	%
29%		90,385		20,319		34.80	%	£	156,574		248,360		9.16	%		27.47	%	£	123,596	£	280,170	$	513,039		62.3	%
30%		91,086		21,020		36.00	%	£	161,973		249,061		9.46	%		28.39	%	£	127,753	£	289,726	$	530,537		64.4	%
31%		91,786		21,720		37.20	%	£	167,372		249,761		9.77	%		29.32	%	£	131,910	£	299,282	$	548,035		66.5	%
32%		92,487		22,421		38.40	%	£	172,771		250,462		10.08	%		30.24	%	£	136,066	£	308,837	$	565,533		68.6	%
33%		93,188		23,122		39.60	%	£	178,170		251,163		10.39	%		31.17	%	£	140,223	£	318,393	$	583,031		70.8	%
34%		93,888		23,822		40.80	%	£	183,569		251,863		10.70	%		32.09	%	£	144,379	£	327,949	$	600,529		72.9	%
35%		94,589		24,523		42.00	%	£	188,969		252,564		11.00	%		33.01	%	£	148,536	£	337,504	$	618,027		75.0	%
36%		95,290		25,224		43.20	%	£	194,368		253,265		11.31	%		33.94	%	£	152,693	£	347,060	$	635,525		77.1	%
37%		95,990		25,924		44.40	%	£	199,767		253,965		11.62	%		34.86	%	£	156,849	£	356,616	$	653,023		79.3	%
38%		96,691		26,625		45.60	%	£	205,166		254,666		11.93	%		35.79	%	£	161,006	£	366,172	$	670,521		81.4	%
39%		97,392		27,326		46.80	%	£	210,565		255,367		12.24	%		36.71	%	£	165,162	£	375,727	$	688,019		83.5	%
40%		98,092		28,026		48.00	%	£	215,964		256,067		12.54	%		37.63	%	£	169,319	£	385,283	$	705,517		85.6	%
41%		98,793		28,727		49.20	%	£	221,363		256,768		12.85	%		38.56	%	£	173,476	£	394,839	$	723,015		87.8	%
42%		99,494		29,428		50.40	%	£	226,762		257,469		13.16	%		39.48	%	£	177,632	£	404,394	$	740,513		89.9	%
43%		100,194		30,128		51.60	%	£	232,161		258,169		13.47	%		40.40	%	£	181,789	£	413,950	$	758,011		92.0	%
44%		100,895		30,829		52.80	%	£	237,560		258,870		13.78	%		41.33	%	£	185,945	£	423,506	$	775,510		94.1	%
45%		101,596		31,530		54.00	%	£	242,960		259,571		14.08	%		42.25	%	£	190,102	£	433,061	$	793,008		96.3	%
46%		102,296		32,230		55.20	%	£	248,359		260,271		14.39	%		43.18	%	£	194,259	£	442,617	$	810,506		98.4	%
47%		102,997		32,931		56.40	%	£	253,758		260,972		14.70	%		44.10	%	£	198,415	£	452,173	$	828,004		100.5	%
48%		103,698		33,632		57.60	%	£	259,157		261,673		15.01	%		45.02	%	£	202,572	£	461,729	$	845,502		102.6	%
49%		104,398		34,332		58.80	%	£	264,556		262,373		15.32	%		45.95	%	£	206,728	£	471,284	$	863,000		104.7	%
50%		105,099		35,033		60.00	%	£	269,955		263,074		15.62	%		46.87	%	£	210,885	£	480,840	$	880,498		106.9	%

Exhibit “B”

13. INVENTIONS AND IMPROVEMENTS

     In the event that the Executive shall during the continuance of his employment by the Company either make or discover any invention or design or make any improvement upon any existing invention, literary, dramatic, musical or artistic work including any computer program or design or make any improvement upon any such invention work or design whether or not the same is capable of patent registered design design right copyright or other like protection and whether made or discovered alone or in conjunction with any other employee or employees of the Company or of any other Group Company or other persons the same shall belong to the Company and the Executive shall immediately disclose the same to the Board and shall at the Company’s request and expense do all such acts and execute all such documents as may be necessary to vest the rights of any such invention work design or improvement in the name of the Company to the intent that all such rights in any such invention work design or improvement shall be subject to any applicable provisions of the Patents Act 1977 become the property of the Company or its nominee.

14. CONFIDENTIALITY

     (A) As confidential and commercially sensitive information important to the business of the Company will from time to time become known to the Executive the Company considers and the Executive acknowledges that the following restraints are necessary for the reasonable protection by the Company of its business, the business of the Group, the clients thereof or their respective affairs.

     (B) The Executive shall not at any time either before or after the termination of his employment with the Company use disclose or communicate to any person whatsoever any confidential information relating to the business of the Company or any Group Company or any clients thereof or their affairs or any trade secrets of which he has or may have become possessed during the continuance of his employment with the Company or supply the names or addresses of any clients customers or agents of the Company or any Group Company to any person except in the proper course of the Business or as authorized in writing by the Board or as ordered by a Court of competent jurisdiction.

     (C) The Executive shall not at any time during the continuance of his employment with the Company make otherwise than for the benefit of the Company or any Group Company any notes or memoranda relating to any matter within the scope of the Business or concerning any of the dealings or affairs of the Company or Group Company.

     (D) The Executive shall not write any article for the press or otherwise for publication on any matter connected with or related to the business of the Company or any Group Company without first obtaining the written approval of the Group Chairman.

EX-11

EXHIBIT 11 — COMPUTATION OF EARNINGS PER SHARE

	Nine Months Ended September 30,				Three Months Ended September 30,
(In thousands of dollars, except per share data)	2005		2004		2005		2004
Numerator:
Net income	$	474,089	$	631,464	$	205,475	$	261,234
Effect of dilutive securities — none
Numerator for net income per common share — diluted	$	474,089	$	631,464	$	205,475	$	261,234
Denominator:
Weighted average common shares		548,464		604,343		542,152		586,193
Effect of dilutive securities:
Stock options and common stock warrants		1,312		2,391		1,323		1,659
Denominator for net income per common share — diluted		549,776		606,734		543,475		587,852
Net income (loss) per common share:
Basic	$	.86	$	1.04	$	.38	$	.45
Diluted	$	.86	$	1.04	$	.38	$	.44

EX-12

EXHIBIT 12 — COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES

	Nine Months Ended
	September 30,						Year Ended
(In thousands, except ratio data)	2005			2004			2004			2003			2002			2001			2000
Income (loss) before income taxes, equity in earnings of non-consolidated affiliates and extraordinary item	$	755,302		$	1,010,281		$	1,339,001		$	1,903,338		$	1,191,261		$	(1,259,390	)	$	688,384
Dividends and other received from nonconsolidated affiliates		10,461			10,005			13,491			2,096			6,295			7,426			4,934
Total		765,763			1,020,286			1,352,492			1,905,434			1,197,556			(1,251,964	)		693,318
Fixed Charges
Interest expense		325,936			266,815			367,753			388,000			432,786			560,077			413,425
Amortization of loan fees		*			*			*			*			12,077			14,648			12,401
Interest portion of rentals		298,233			285,649			385,438			338,965			293,831			270,653			150,317
Total fixed charges		624,169			552,464			753,191			726,965			738,694			845,378			576,143
Preferred stock dividends
Tax effect of preferred dividends		¾			¾			¾			¾			¾			¾			¾
After tax preferred dividends		¾			¾			¾			¾			¾			¾			¾
Total fixed charges and preferred dividends		624,169			552,464			753,191			726,965			738,694			845,378			576,143
Total earnings available for payment of fixed charges	$	1,389,932		$	1,572,750		$	2,105,683		$	2,632,399		$	1,936,250		$	(406,586	)	$	1,269,461
Ratio of earnings to fixed charges		2.23			2.85			2.80			3.62			2.62			**			2.20
Rental fees and charges		852,094			816,140			1,101,251			968,470			839,516			773,293			429,476
Interest component		35	%		35	%		35	%		35	%		35	%		35	%		35	%

*	Amortization of loan fees is included in Interest expense beginning January 1, 2003.
**	For the year ended December 31, 2001, fixed charges exceeded earnings before income taxes and fixed charges by $1.3 billion.

EX-31.1

EXHIBIT 31.1 — CERTIFICATION OF CHIEF EXECUTIVE OFFICER 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

I, Mark P. Mays, President and Chief Executive Officer of Clear Channel Communications, Inc., certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Clear Channel Communications, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 8, 2005

/s/ MARK P. MAYS

Mark P. Mays

President and Chief Executive Officer

EX-31.2

EXHIBIT 31.2 — CERTIFICATION OF CHIEF FINANCIAL OFFICER 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

I, Randall T. Mays, Executive Vice President and Chief Financial Officer of Clear Channel Communications, Inc., certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Clear Channel Communications, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 8, 2005

/s/ RANDALL T. MAYS

Randall T. Mays

Executive Vice President and

Chief Financial Officer

EX-32.1

EXHIBIT 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

This certification is provided pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and accompanies the Quarterly Report on Form 10-Q (the “Form 10-Q”) for the quarter ended September 30, 2005 of Clear Channel Communications, Inc. (the “Issuer”). The undersigned hereby certifies that the Form 10-Q fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)) and that the information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Issuer.

Date: November 8, 2005

By:	/s/ MARK P. MAYS
Name:	Mark P. Mays
Title:	President and Chief Executive Officer

A signed original of this written statement required by Section 906 has been provided to the Issuer and will be furnished to the Securities and Exchange Commission, or its staff, upon request.

EX-32.2

EXHIBIT 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

This certification is provided pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and accompanies the Quarterly Report on Form 10-Q (the “Form 10-Q”) for the quarter ended September 30, 2005 of Clear Channel Communications, Inc. (the “Issuer”). The undersigned hereby certifies that the Form 10-Q fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)) and that the information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Issuer.

Date: November 8, 2005

By:	/s/ RANDALL T. MAYS
Name:	Randall T. Mays
Title:	Executive Vice President and Chief Financial Officer

A signed original of this written statement required by Section 906 has been provided to the Issuer and will be furnished to the Securities and Exchange Commission, or its staff, upon request.