##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 Form 10-Q
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 AND 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2008
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934FOR THE TRANSITION PERIOD FROM
 Commission file number 1-9645
 CLEAR CHANNEL COMMUNICATIONS, INC.
  Texas
(State of Incorporation)
    
    74-1787539
(I.R.S. Employer Identification No.)200 East Basse Road 
San Antonio, Texas
(Address of principal executive offices)
    
    78209
(Zip Code)
 (210) 822-2828
 þ o
  Large accelerated filer þ   
    Accelerated filer o
    Non-accelerated filer o
    Smaller reporting company o(Do not check if a smaller reporting company)
 o þ
  Class
    
    Outstanding at May 7, 2008Common Stock, $.10 par value
    
    497,883,965




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##### 



CLEAR CHANNEL COMMUNICATIONS, INC. AND SUBSIDIARIES
 INDEX
 Page No.Part I  Financial InformationItem 1. Unaudited Financial StatementsConsolidated Balance Sheets at March 31, 2008 and December 31, 2007
    
    
    3Consolidated Statements of Operations for the three months ended March 31, 2008
and 2007
    
    
    5Condensed Consolidated Statements of Cash Flows for the three months ended
March 31, 2008 and 2007
    
    
    6Notes to Consolidated Financial Statements
    
    
    7Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    15Item 3. Quantitative and Qualitative Disclosures about Market Risk
    
    
    26Item 4. Controls and Procedures
    
    
    26Part II  Other InformationItem 1. Legal Proceedings
    
    
    27Item 1A. Risk Factors
    
    
    28Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    28Item 6. Exhibits
    
    
    28Signatures
    
    
    32Computaion of Per Share EarningsComputation of RatiosCertification of CEO Pursuant to Section 302Certification of CFO Pursuant to Section 302Certification of CEO Pursuant to Section 906Certification of CFO Pursuant to Section 906




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##### Table of Contents



PART I
 
 Item 1. UNAUDITED FINANCIAL STATEMENTS
 CLEAR CHANNEL COMMUNICATIONS, INC. AND SUBSIDIARIES
 
 CONSOLIDATED BALANCE SHEETS
 ASSETS
 (In thousands)
 March 31,
    
    
    December 31,2008
    
    
    2007(Unaudited)
    
    
    (Audited)CURRENT ASSETSCash and cash equivalents
    
    $
    602,112
    
    
    $
    145,148Accounts receivable, net of allowance of $62,791 in 2008
and $59,169 in 2007
    
    
    1,681,514
    
    
    
    1,693,218Prepaid expenses
    
    
    125,387
    
    
    
    116,902Other current assets
    
    
    270,306
    
    
    
    243,248Current assets from discontinued operations
    
    
    
    
    
    
    96,067Total Current Assets
    
    
    2,679,319
    
    
    
    2,294,583PROPERTY, PLANT AND EQUIPMENTLand, buildings and improvements
    
    
    851,555
    
    
    
    840,832Structures
    
    
    3,947,728
    
    
    
    3,901,941Towers, transmitters and studio equipment
    
    
    586,804
    
    
    
    600,315Furniture and other equipment
    
    
    526,518
    
    
    
    527,714Construction in progress
    
    
    128,128
    
    
    
    119,2606,040,733
    
    
    
    5,990,062Less accumulated depreciation
    
    
    2,965,992
    
    
    
    2,939,6983,074,741
    
    
    
    3,050,364Property, plant and equipment from discontinued
operations, net
    
    
    15,487
    
    
    
    164,724INTANGIBLE ASSETSDefinite-lived intangibles, net
    
    
    489,542
    
    
    
    485,870Indefinite-lived intangibles  licenses
    
    
    4,213,262
    
    
    
    4,201,617Indefinite-lived intangibles  permits
    
    
    252,576
    
    
    
    251,988Goodwill
    
    
    7,268,059
    
    
    
    7,210,116Intangible assets from discontinued operations, net
    
    
    31,889
    
    
    
    219,722OTHER ASSETSNotes receivable
    
    
    11,630
    
    
    
    12,388Investments in, and advances to, nonconsolidated affiliates
    
    
    296,481
    
    
    
    346,387Other assets
    
    
    361,281
    
    
    
    303,791Other investments
    
    
    351,216
    
    
    
    237,598Other assets from discontinued operations
    
    
    7,728
    
    
    
    26,380Total Assets
    
    $
    19,053,211
    
    
    $
    18,805,528
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CLEAR CHANNEL COMMUNICATIONS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND SHAREHOLDERS EQUITY
(In thousands)
 March 31,
    
    
    December 31,2008
    
    
    2007(Unaudited)
    
    
    (Audited)CURRENT LIABILITIESAccounts payable
    
    $
    129,458
    
    
    $
    165,533Accrued expenses
    
    
    832,155
    
    
    
    912,665Accrued interest
    
    
    75,979
    
    
    
    98,601Accrued income taxes
    
    
    148,833
    
    
    
    79,973Current portion of long-term debt
    
    
    869,631
    
    
    
    1,360,199Deferred income
    
    
    242,861
    
    
    
    158,893Current liabilities from discontinued operations
    
    
    
    
    
    
    37,413Total Current Liabilities
    
    
    2,298,917
    
    
    
    2,813,277Long-term debt
    
    
    5,072,000
    
    
    
    5,214,988Other long-term obligations
    
    
    167,775
    
    
    
    127,384Deferred income taxes
    
    
    830,937
    
    
    
    793,850Other long-term liabilities
    
    
    560,945
    
    
    
    567,848Long-term liabilities from discontinued operations
    
    
    
    
    
    
    54,330Minority interest
    
    
    460,728
    
    
    
    436,360Commitments and contingent liabilities (Note 5)SHAREHOLDERS EQUITYCommon Stock
    
    
    49,817
    
    
    
    49,808Additional paid-in capital
    
    
    26,871,648
    
    
    
    26,858,079Retained deficit
    
    
    (17,689,490
    )
    
    
    (18,489,143
    )Accumulated other comprehensive income
    
    
    436,544
    
    
    
    383,698Cost of shares held in treasury
    
    
    (6,610
    )
    
    
    (4,951
    )Total Shareholders Equity
    
    
    9,661,909
    
    
    
    8,797,491Total Liabilities and Shareholders Equity
    
    $
    19,053,211
    
    
    $
    18,805,528
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CLEAR CHANNEL COMMUNICATIONS, INC. AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF OPERATIONS
 (UNAUDITED)
 (In thousands, except per share data)
 Three Months Ended March 31,2008
    
    
    2007Revenue
    
    $
    1,564,207
    
    
    $
    1,505,077Operating expenses:Direct operating expenses (includes share based payments of $3,604 and
$3,000 in 2008 and 2007, respectively, and excludes depreciation and
amortization)
    
    
    705,947
    
    
    
    627,879Selling, general and administrative expenses (includes share based
payments of $3,135 and $2,831 in 2008 and 2007, respectively, and
excludes depreciation and amortization)
    
    
    426,381
    
    
    
    416,319Depreciation and amortization
    
    
    152,278
    
    
    
    139,685Corporate expenses (includes share based payments of $2,851 and
$2,414 in 2008 and 2007, respectively, and excludes depreciation and
amortization)
    
    
    46,303
    
    
    
    48,150Merger expenses
    
    
    389
    
    
    
    1,686Gain on disposition of assets  net
    
    
    2,097
    
    
    
    6,947Operating income
    
    
    235,006
    
    
    
    278,305Interest expense
    
    
    100,003
    
    
    
    118,077Gain on marketable securities
    
    
    6,526
    
    
    
    395Equity in earnings of nonconsolidated affiliates
    
    
    83,045
    
    
    
    5,264Other income (expense)  net
    
    
    11,787
    
    
    
    (12
    )Income before income taxes, minority interest and discontinued operations
    
    
    236,361
    
    
    
    165,875Income tax benefit (expense):Current
    
    
    (23,833
    )
    
    
    (32,359
    )Deferred
    
    
    (42,748
    )
    
    
    (38,107
    )Income tax benefit (expense)
    
    
    (66,581
    )
    
    
    (70,466
    )Minority interest expense, net of tax
    
    
    8,389
    
    
    
    276Income before discontinued operations
    
    
    161,391
    
    
    
    95,133Income from discontinued operations, net
    
    
    638,262
    
    
    
    7,089Net income
    
    $
    799,653
    
    
    $
    102,222Other comprehensive income (loss), net of tax:Foreign currency translation adjustments
    
    
    57,967
    
    
    
    8,751Unrealized holding gain (loss) on marketable securities
    
    
    (5,121
    )
    
    
    (6,959
    )Comprehensive income
    
    $
    852,499
    
    
    $
    104,014Net income per common share:Income before discontinued operations  Basic
    
    $
    .33
    
    
    $
    .19Discontinued operations  Basic
    
    
    1.29
    
    
    
    .02Net income  Basic
    
    $
    1.62
    
    
    $
    .21Weighted average common shares  Basic
    
    
    494,749
    
    
    
    493,843Income before discontinued operations  Diluted
    
    $
    .32
    
    
    $
    .19Discontinued operations  Diluted
    
    
    1.29
    
    
    
    .02Net income  Diluted
    
    $
    1.61
    
    
    $
    .21Weighted average common shares  Diluted
    
    
    496,388
    
    
    
    494,868Dividends declared per share
    
    $
    
    
    
    $
    .1875
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CLEAR CHANNEL COMMUNICATIONS, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 (UNAUDITED)
 (In thousands)
 Three Months Ended March 31,2008
    
    
    2007Cash flows from operating activities:Net income
    
    $
    799,653
    
    
    $
    102,222(Income) loss from discontinued operations, net
    
    
    (638,262
    )
    
    
    (7,089
    )161,391
    
    
    
    95,133Reconciling items:Depreciation and amortization
    
    
    152,278
    
    
    
    139,685Deferred taxes
    
    
    42,748
    
    
    
    38,107(Gain) loss on disposal of assets
    
    
    (2,097
    )
    
    
    (6,947
    )(Gain) loss forward exchange contract
    
    
    (13,342
    )
    
    
    2,962(Gain) loss on trading securities
    
    
    6,816
    
    
    
    (3,358
    )Provision for doubtful accounts
    
    
    10,332
    
    
    
    9,049Share-based compensation
    
    
    9,590
    
    
    
    8,245Equity in earnings of nonconsolidated affiliates
    
    
    (83,046
    )
    
    
    (5,264
    )Other reconciling items  net
    
    
    11,724
    
    
    
    1,047Changes in operating assets and liabilities:Changes in other operating assets and liabilities,
net of effects of acquisitions and dispositions
    
    
    71,378
    
    
    
    42,804Net cash provided by operating activities
    
    
    367,772
    
    
    
    321,463Cash flows from investing activities:Decrease (increase) in notes receivable  net
    
    
    (735
    )
    
    
    42Decrease (increase) in investments in and advances
to nonconsolidated affiliates  net
    
    
    18,376
    
    
    
    5,911Sales (purchases) of investments
    
    
    487
    
    
    
    (393
    )Purchases of property, plant and equipment
    
    
    (93,693
    )
    
    
    (64,986
    )Proceeds from disposal of assets
    
    
    11,345
    
    
    
    13,078Acquisition of operating assets, net of cash acquired
    
    
    (83,897
    )
    
    
    (12,189
    )Decrease (increase) in other  net
    
    
    (6,140
    )
    
    
    (12,484
    )Net cash used in investing activities
    
    
    (154,257
    )
    
    
    (71,021
    )Cash flows from financing activities:Draws on credit facilities
    
    
    700,089
    
    
    
    252,881Payments on credit facilities
    
    
    (862,850
    )
    
    
    (239,582
    )Payments on long-term debt
    
    
    (503,017
    )
    
    
    (260,416
    )Proceeds from exercise of stock options, stock
purchase plan, common stock warrants and other
    
    
    5,953
    
    
    
    56,555Payments for purchase of common shares
    
    
    (1,257
    )
    
    
    Dividends paid
    
    
    (93,367
    )
    
    
    (92,603
    )Net cash used in financing activities
    
    
    (754,449
    )
    
    
    (283,165
    )Cash flows from discontinued operations:Net cash (used in) provided by operating activities
    
    
    (88,121
    )
    
    
    16,685Net cash provided by investing activities
    
    
    1,086,019
    
    
    
    9,228Net cash provided by (used in) financing activities
    
    
    
    
    
    
    Net cash provided by discontinued operations
    
    
    997,898
    
    
    
    25,913Net (decrease) increase in cash and cash equivalents
    
    
    456,964
    
    
    
    (6,810
    )Cash and cash equivalents at beginning of period
    
    
    145,148
    
    
    
    116,000Cash and cash equivalents at end of period
    
    $
    602,112
    
    
    $
    109,190
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CLEAR CHANNEL COMMUNICATIONS, INC. AND SUBSIDIARIES
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (UNAUDITED)
  Preparation of Interim Financial Statements
   Merger Update
  Certain Reclassifications
  Discontinued Operations and Assets Held for Sale
 Sale of non-core radio stations
 Accounting for
the Impairment or Disposal of Long-lived Assets
  - 7 -




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Total radio stations announced as being marketed for sale on November 16, 2006
    
    
    448Total radio stations no longer being marketed for sale
    
    
    (173
    )Adjusted number of radio stations being marketed for sale (Non-core radio stations)
    
    
    275Non-core radio stations sold through March 31, 2008
    
    
    (223
    )Remaining non-core radio stations at March 31, 2008 classified as discontinued operations
    
    
    52Non-core radio stations under definitive asset purchase agreements
    
    
    (32
    )Non-core radio stations being marketed for sale
    
    
    20
 Sale of other radio stations
   Sale of the television business
  Summarized Financial Information of Discontinued Operations
  Three Months(In thousands)
    
    2008
    
    2007Revenue
    
    $
    69,883
    
    
    $
    117,005Income before income taxes
    
    $
    695,364
    
    
    $
    9,365
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March 31,
    
    
    December 31,(In thousands)
    
    2008
    
    
    2007AssetsAccounts receivable, net
    
    $
    
    
    
    $
    76,426Other current assets
    
    
    
    
    
    
    19,641Total current assets
    
    $
    
    
    
    $
    96,067Land, buildings and improvements
    
    $
    9,393
    
    
    $
    73,138Transmitter and studio equipment
    
    
    16,133
    
    
    
    207,230Other property, plant and equipment
    
    
    2,725
    
    
    
    22,781Less accumulated depreciation
    
    
    12,764
    
    
    
    138,425Property, plant and equipment, net
    
    $
    15,487
    
    
    $
    164,724Definite-lived intangibles, net
    
    $
    
    
    
    $
    283Licenses
    
    
    3,976
    
    
    
    107,910Goodwill
    
    
    27,913
    
    
    
    111,529Total intangible assets
    
    $
    31,889
    
    
    $
    219,722Film rights
    
    $
    
    
    
    $
    18,042Other long-term assets
    
    
    7,728
    
    
    
    8,338Total other assets
    
    $
    7,728
    
    
    $
    26,380LiabilitiesAccounts payable and
accrued expenses
    
    $
    
    
    
    $
    10,565Film liability
    
    
    
    
    
    
    18,027Other current liabilities
    
    
    
    
    
    
    8,821Total current liabilities
    
    $
    
    
    
    $
    37,413Film liability
    
    $
    
    
    
    $
    19,902Other long-term liabilities
    
    
    
    
    
    
    34,428Total long-term liabilities
    
    $
    
    
    
    $
    54,330
 Recent Accounting Pronouncements
 Disclosures
about Derivative Instruments and Hedging Activities
 New Accounting Standards
 The Fair Value Option
for Financial Assets and Financial Liabilities
 Fair Value Measurements
 Accounting for Certain Investments in Debt and Equity Securities
  - 9 -




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(In thousands)
 Quoted Prices in
    
    
    Significant OtherActive markets for
    
    
    Observable
    
    
    SignificantIdentical Assets
    
    
    Inputs
    
    
    Unobservable(Level 1)
    
    
    (Level 2)
    
    
    Inputs (Level 3)Asset / (Liability)Trading securities
    
    $
    78,833
    
    
    $
    
    
    
    $
    Available-for-sale securities
    
    
    261,018
    
    
    
    
    
    
    
    Derivatives
    
    
    
    
    
    
    (127,402
    )
    
    
    (3,636
    )Total
    
    $
    339,851
    
    
    $
    (127,402
    )
    
    $
    (3,636
    )
  (In thousands)
 2008Beginning balance at January 1
    
    $
    (16,978
    )Unrealized gain included in Gain on marketable securities
    
    
    13,342Ending balance at March 31
    
    $
    (3,636
    )
  Definite-lived Intangibles
   (In thousands)
 March 31, 2008
    
    
    December 31, 2007Gross Carrying
    
    
    Accumulated
    
    
    Gross Carrying
    
    
    AccumulatedAmount
    
    
    Amortization
    
    
    Amount
    
    
    AmortizationTransit, street
furniture, and other
outdoor contractual
rights
    
    $
    918,456
    
    
    $
    654,343
    
    
    $
    867,283
    
    
    $
    613,897Representation contracts
    
    
    403,982
    
    
    
    222,255
    
    
    
    400,316
    
    
    
    212,403Other
    
    
    83,922
    
    
    
    40,220
    
    
    
    84,004
    
    
    
    39,433Total
    
    $
    1,406,360
    
    
    $
    916,818
    
    
    $
    1,351,603
    
    
    $
    865,733
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(In thousands)
 2009
    
    $
    85,3852010
    
    
    68,0202011
    
    
    52,7072012
    
    
    43,0712013
    
    
    38,261
  Indefinite-lived Intangibles
    Goodwill
  Americas
    
    
    International(In thousands)
    
    Radio
    
    
    Outdoor
    
    
    Outdoor
    
    
    Other
    
    
    TotalBalance as of December 31, 2007
    
    $
    6,045,527
    
    
    $
    688,336
    
    
    $
    474,253
    
    
    $
    2,000
    
    
    $
    7,210,116Acquisitions
    
    
    
    
    
    
    25
    
    
    
    18,465
    
    
    
    
    
    
    
    18,490Dispositions
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Foreign currency
    
    
    
    
    
    
    (276
    )
    
    
    39,902
    
    
    
    
    
    
    
    39,626Adjustments
    
    
    (173
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (173
    )Balance as of March 31, 2008
    
    $
    6,045,354
    
    
    $
    688,085
    
    
    $
    532,620
    
    
    $
    2,000
    
    
    $
    7,268,059
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 Foreign Currency Hedges: Measuring the Amount of Ineffectiveness in a Net
Investment Hedge
  Acquisitions
   Disposition of Assets
   Debt Maturities
  Legal Proceedings
  - 12 -




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Corporate,Merger andAmericas
    
    
    International
    
    
    
    
    
    
    Gain onRadio
    
    
    Outdoor
    
    
    Outdoor
    
    
    
    
    
    
    disposition of(In thousands)
    
    Broadcasting
    
    
    Advertising
    
    
    Advertising
    
    
    Other
    
    
    assets - net
    
    
    Eliminations
    
    
    ConsolidatedThree Months Ended
March 31, 2008Revenue
    
    $
    769,611
    
    
    $
    333,362
    
    
    $
    442,217
    
    
    $
    44,453
    
    
    $
    3⁄4
    
    
    $
    (25,436
    )
    
    $
    1,564,207Direct operating expenses
    
    
    231,496
    
    
    
    156,245
    
    
    
    314,589
    
    
    
    17,324
    
    
    
    3⁄4
    
    
    
    (13,707
    )
    
    
    705,947Selling, general and
administrative expenses
    
    
    269,282
    
    
    
    58,375
    
    
    
    86,235
    
    
    
    24,218
    
    
    
    
    
    
    
    (11,729
    )
    
    
    426,381Depreciation and
amortization
    
    
    31,487
    
    
    
    50,099
    
    
    
    54,991
    
    
    
    11,555
    
    
    
    4,146
    
    
    
    3⁄4
    
    
    
    152,278Corporate expenses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    46,303
    
    
    
    
    
    
    
    46,303Merger expenses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    389
    
    
    
    
    
    
    
    389Gain on disposition of
assets  net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,097
    
    
    
    
    
    
    
    2,097Operating income (loss)
    
    $
    237,346
    
    
    $
    68,643
    
    
    $
    (13,598
    )
    
    $
    (8,644
    )
    
    $
    (48,741
    )
    
    $
    
    
    
    $
    235,006Intersegment revenues
    
    $
    10,964
    
    
    $
    1,677
    
    
    $
    
    
    
    $
    12,795
    
    
    $
    3⁄4
    
    
    $
    3⁄4
    
    
    $
    25,436Identifiable assets
    
    $
    11,641,673
    
    
    $
    2,904,243
    
    
    $
    2,877,597
    
    
    $
    721,556
    
    
    $
    853,038
    
    
    $
    3⁄4
    
    
    $
    18,998,107Capital expenditures
    
    $
    18,420
    
    
    $
    30,050
    
    
    $
    43,251
    
    
    $
    905
    
    
    $
    1,067
    
    
    $
    3⁄4
    
    
    $
    93,693Share-based payments
    
    $
    4,809
    
    
    $
    1,538
    
    
    $
    392
    
    
    $
    
    
    
    $
    2,851
    
    
    $
    3⁄4
    
    
    $
    9,590Three Months Ended
March 31, 2007Revenue
    
    $
    799,201
    
    
    $
    317,023
    
    
    $
    373,833
    
    
    $
    45,674
    
    
    $
    3⁄4
    
    
    $
    (30,654
    )
    
    $
    1,505,077Direct operating expenses
    
    
    234,518
    
    
    
    134,914
    
    
    
    259,291
    
    
    
    17,705
    
    
    
    3⁄4
    
    
    
    (18,549
    )
    
    
    627,879Selling, general and
administrative expenses
    
    
    276,693
    
    
    
    54,243
    
    
    
    73,290
    
    
    
    24,198
    
    
    
    
    
    
    
    (12,105
    )
    
    
    416,319Depreciation and amortization
    
    
    29,901
    
    
    
    46,561
    
    
    
    49,109
    
    
    
    9,966
    
    
    
    4,148
    
    
    
    3⁄4
    
    
    
    139,685Corporate expenses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    48,150
    
    
    
    
    
    
    
    48,150Merger expenses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,686
    
    
    
    
    
    
    
    1,686Gain on disposition of
assets  net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,947
    
    
    
    
    
    
    
    6,947Operating income (loss)
    
    $
    258,089
    
    
    $
    81,305
    
    
    $
    (7,857
    )
    
    $
    (6,195
    )
    
    $
    (47,037
    )
    
    $
    
    
    
    $
    278,305Intersegment revenues
    
    $
    15,282
    
    
    $
    1,883
    
    
    $
    
    
    
    $
    13,489
    
    
    $
    3⁄4
    
    
    $
    3⁄4
    
    
    $
    30,654Identifiable assets
    
    $
    11,828,170
    
    
    $
    2,764,927
    
    
    $
    2,391,523
    
    
    $
    654,587
    
    
    $
    332,578
    
    
    $
    3⁄4
    
    
    $
    17,971,785Capital expenditures
    
    $
    14,677
    
    
    $
    22,582
    
    
    $
    24,671
    
    
    $
    1,589
    
    
    $
    1,467
    
    
    $
    3⁄4
    
    
    $
    64,986Share-based payments
    
    $
    4,464
    
    
    $
    1,126
    
    
    $
    241
    
    
    $
    
    
    
    $
    2,414
    
    
    $
    3⁄4
    
    
    $
    8,245
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##### Table of Contents



Item 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 Approved Merger With a Group Led by Thomas H. Lee Partners, L.P. and Bain Capital Partners, LLC
  Sale of Radio Stations and All of Our Television Stations
 Sale of non-core radio stations
 Accounting for the Impairment or Disposal
of Long-lived Assets
   Total radio stations announced as being marketed for sale on November 16, 2006
    
    
    448Total radio stations no longer being marketed for sale
    
    
    (173
    )Adjusted number of radio stations being marketed for sale (Non-core radio stations)
    
    
    275Non-core radio stations sold through March 31, 2008
    
    
    (223
    )Remaining non-core radio stations at March 31, 2008 classified as discontinued operations
    
    
    52Non-core radio stations under definitive asset purchase agreements
    
    
    (32
    )Non-core radio stations being marketed for sale
    
    
    20
 Sale of other radio stations
    Sale of the television business
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Format of Presentation
   Radio Broadcasting
      Americas and International Outdoor Advertising
   - 16 -




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##### Table of Contents



FAS 123(R), Share-Based Payment
  Three Months ended March 31,(In millions)
    
    2008
    
    2007Radio BroadcastingDirect Operating Expenses
    
    $
    2.2
    
    
    $
    2.0SG&A
    
    
    2.6
    
    
    
    2.5Americas Outdoor AdvertisingDirect Operating Expenses
    
    $
    1.1
    
    
    $
    0.8SG&A
    
    
    0.4
    
    
    
    0.3International Outdoor AdvertisingDirect Operating Expenses
    
    $
    0.3
    
    
    $
    0.2SG&A
    
    
    0.1
    
    
    
    0.1OtherDirect Operating Expenses
    
    $
    
    
    
    $
    SG&A
    
    
    
    
    
    
    Corporate
    
    $
    2.9
    
    
    $
    2.4
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##### Table of Contents



The comparison of Three Months Ended March 31, 2008 to Three Months Ended March 31, 2007 is as
follows:
 Three Months EndedMarch 31,
    
    
    %(In thousands)
    
    2008
    
    
    2007
    
    
    ChangeRevenue
    
    $
    1,564,207
    
    
    $
    1,505,077
    
    
    
    4
    %Operating expenses:Direct operating expenses
    
    
    705,947
    
    
    
    627,879
    
    
    
    12
    %Selling, general and administrative expenses
    
    
    426,381
    
    
    
    416,319
    
    
    
    2
    %Depreciation and amortization
    
    
    152,278
    
    
    
    139,685
    
    
    
    9
    %Corporate expenses
    
    
    46,303
    
    
    
    48,150
    
    
    
    (4
    %)Merger expenses
    
    
    389
    
    
    
    1,686Gain on disposition of assets  net
    
    
    2,097
    
    
    
    6,947Operating income
    
    
    235,006
    
    
    
    278,305
    
    
    
    (16
    %)Interest expense
    
    
    100,003
    
    
    
    118,077Gain on marketable securities
    
    
    6,526
    
    
    
    395Equity in earnings of nonconsolidated
affiliates
    
    
    83,045
    
    
    
    5,264Other income (expense)  net
    
    
    11,787
    
    
    
    (12
    )Income before income taxes, minority interest
and discontinued operations
    
    
    236,361
    
    
    
    165,875Income tax benefit (expense):Current
    
    
    (23,833
    )
    
    
    (32,359
    )Deferred
    
    
    (42,748
    )
    
    
    (38,107
    )Income tax benefit (expense)
    
    
    (66,581
    )
    
    
    (70,466
    )Minority interest expense, net of tax
    
    
    8,389
    
    
    
    276Income before discontinued operations
    
    
    161,391
    
    
    
    95,133Income from discontinued operations, net
    
    
    638,262
    
    
    
    7,089Net income
    
    $
    799,653
    
    
    $
    102,222
 Consolidated Revenue
  Consolidated Direct Operating Expenses
  Consolidated Selling, General and Administrative Expenses, or SG&A
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##### Table of Contents



Depreciation and Amortization
  Corporate Expenses
  Gain on Disposition of Assets  Net
   Interest Expense
  Gain on Marketable Securities
  Equity in Earnings of Nonconsolidated Affiliates
  Other Income (Expense)  Net
  Income Tax Benefit (Expense)
   Minority Interest Expense, Net of Tax
  Income from Discontinued Operations, Net
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##### Table of Contents



Segment Revenue and Divisional Operating Expenses
 Radio Broadcasting
 Three Months EndedMarch 31,
    
    
    %(In thousands)
    
    2008
    
    
    2007
    
    
    ChangeRevenue
    
    $
    769,611
    
    
    $
    799,201
    
    
    
    (4
    %)Direct operating expenses
    
    
    231,496
    
    
    
    234,518
    
    
    
    (1
    %)Selling, general and administrative
expenses
    
    
    269,282
    
    
    
    276,693
    
    
    
    (3
    %)Depreciation and amortization
    
    
    31,487
    
    
    
    29,901
    
    
    
    5
    %Operating income
    
    $
    237,346
    
    
    $
    258,089
    
    
    
    (8
    %)
   Americas Outdoor Advertising
 Three Months EndedMarch 31,
    
    
    %(In thousands)
    
    2008
    
    
    2007
    
    
    ChangeRevenue
    
    $
    333,362
    
    
    $
    317,023
    
    
    
    5
    %Direct operating expenses
    
    
    156,245
    
    
    
    134,914
    
    
    
    16
    %Selling, general and administrative
expenses
    
    
    58,375
    
    
    
    54,243
    
    
    
    8
    %Depreciation and amortization
    
    
    50,099
    
    
    
    46,561
    
    
    
    8
    %Operating income
    
    $
    68,643
    
    
    $
    81,305
    
    
    
    (16
    %)
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##### Table of Contents



International Outdoor Advertising
 Three Months EndedMarch 31,
    
    
    %(In thousands)
    
    2008
    
    
    2007
    
    
    ChangeRevenue
    
    $
    442,217
    
    
    $
    373,833
    
    
    
    18
    %Direct operating expenses
    
    
    314,589
    
    
    
    259,291
    
    
    
    21
    %Selling, general and administrative
expenses
    
    
    86,235
    
    
    
    73,290
    
    
    
    18
    %Depreciation and amortization
    
    
    54,991
    
    
    
    49,109
    
    
    
    12
    %Operating income (loss)
    
    $
    (13,598
    )
    
    $
    (7,857
    )
    
    NA
   Reconciliation of Segment Operating Income (Loss) to Consolidated Operating Income
 Three Months ended March 31,(In thousands)
    
    2008
    
    
    2007Radio Broadcasting
    
    $
    237,346
    
    
    $
    258,089Americas Outdoor Advertising
    
    
    68,643
    
    
    
    81,305International Outdoor Advertising
    
    
    (13,598
    )
    
    
    (7,857
    )Other
    
    
    (8,644
    )
    
    
    (6,195
    )Gain on disposition of assets  net
    
    
    2,097
    
    
    
    6,947Corporate and merger expenses
    
    
    (50,838
    )
    
    
    (53,984
    )Consolidated operating income
    
    $
    235,006
    
    
    $
    278,305
 LIQUIDITY AND CAPITAL RESOURCES
 Cash Flows
 Three Months Ended March 31,(In thousands)
    
    2008
    
    2007Cash provided by (used in):Operating activities
    
    $
    367,772
    
    
    $
    321,463Investing activities
    
    $
    (154,257
    )
    
    $
    (71,021
    )Financing activities
    
    $
    (754,449
    )
    
    $
    (283,165
    )Discontinued operations
    
    $
    997,898
    
    
    $
    25,913
 Operating Activities
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##### Table of Contents



Investing Activities
  Financing Activities
  Discontinued Operations
  Anticipated Cash Requirements
    March 31,
    
    
    December 31,(In millions)
    
    2008
    
    
    2007Credit facilities
    
    $
    
    
    
    $
    174.6Long-term bonds (a)
    
    
    5,823.1
    
    
    
    6,294.5Other borrowings
    
    
    118.5
    
    
    
    106.1Total Debt
    
    
    5,941.6
    
    
    
    6,575.2Less: Cash and cash equivalents
    
    
    602.1
    
    
    
    145.1$
    5,339.5
    
    
    $
    6,430.1
 
 (a)
    
    Includes $2.3 million and $3.2 million at March 31, 2008 and December 31, 2007,
respectively, in unamortized fair value purchase accounting adjustment premiums related to
the merger with AMFM. Also includes positive $40.4 million and $11.4 million fair value
adjustments for interest rate swap agreements at March 31, 2008 and December 31, 2007,
respectively. Credit Facility
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##### Table of Contents



Shelf Registration
  Debt Covenants
        Dividends
  (In millions, except per share data)
 Declaration
    
    Amount per
    
    
    
    
    
    TotalDate
    
    Common Share
    
    Record Date
    
    Payment Date
    
    PaymentDecember 3, 2007
    
    
    0.1875
    
    
    December 31, 2007
    
    January 15, 2008
    
    $
    93.4
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##### Table of Contents



Acquisitions
   Capital Expenditures
  (In millions)
 Three Months Ended March 31, 2008 Capital ExpendituresAmericas
    
    
    InternationalOutdoor
    
    
    Outdoor
    
    
    Corporate andRadio
    
    
    Advertising
    
    
    Advertising
    
    
    Other
    
    
    TotalNon-revenue producing
    
    $
    18.4
    
    
    $
    9.6
    
    
    $
    13.4
    
    
    $
    2.0
    
    
    $
    43.4Revenue producing
    
    
    
    
    
    
    20.5
    
    
    
    29.8
    
    
    
    
    
    
    
    50.3$
    18.4
    
    
    $
    30.1
    
    
    $
    43.2
    
    
    $
    2.0
    
    
    $
    93.7
 Commitments, Contingencies and Guarantees
   Debt Maturities
   Interest Rate Risk
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##### Table of Contents



Equity Price Risk
   Foreign Currency
    Recent Accounting Pronouncements
 Disclosures about Derivative Instruments and Hedging Activities
 Inflation
  Ratio of Earnings to Fixed Charges
  Three Months EndedMarch 31,
    
    Year Ended December 31,2008
    
    
    2007
    
    
    
    2007
    
    
    
    2006
    
    
    
    2005
    
    
    
    2004
    
    
    
    20031.72
    
    
    1.78
    
    
    
    2.38
    
    
    
    2.23
    
    
    
    2.21
    
    
    
    2.71
    
    
    
    3.51
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##### Table of Contents



Risks Regarding Forward-Looking Statements
   
    
    the occurrence of any event, change or other circumstance that could give rise to the
termination of the Merger Agreement;
    
    the ability of the private equity sponsors to obtain financing necessary to complete
the merger;
    
    the outcome of any legal proceedings that have been or may be instituted by us or
against us relating to the Merger Agreement;
    
    our inability to complete the merger due to the failure to satisfy any conditions to
completion of the merger;
    
    the impact of the substantial indebtedness incurred to finance the consummation of
the merger;
    
    the impact of general economic and political conditions in the U.S. 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;
    
    capital expenditure requirements;
    
    the outcome of pending and future litigation settlements;
    
    legislative or regulatory requirements;
    
    interest rates;
    
    the effect of leverage on our financial position and earnings;
    
    taxes;
    
    access to capital markets; and
    
    certain other factors set forth in our filings with the Securities and Exchange
Commission.
  
 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  
 ITEM 4. CONTROLS AND PROCEDURES
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##### Table of Contents



Part II  OTHER INFORMATION
 
 Item 1. Legal Proceedings
     Merger-Related Litigation
 Clear Channel Communications, Inc., and CC Media
Holdings, Inc. v. Citigroup Global Markets, Inc.; Citicorp USA, Inc.; Citicorp North America, Inc.;
Morgan Stanley Senior Funding, Inc.; Credit Suisse Securities USA, LLC; RBS Securities Corporation;
Wachovia Investment Holdings, LLC; and Wachovia Capital Markets, LLC;
  - 27-




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##### Table of Contents



Item 1A. Risk Factors
   
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
   Total Number ofShares Purchased as
    
    Maximum Dollar ValueTotal Number
    
    Average Price
    
    Part of Publicly
    
    of Shares that May Yetof Shares
    
    Paid per
    
    Announced
    
    Be Purchased Under thePeriod
    
    
    Purchased
    
    Share
    
    Programs
    
    ProgramsJanuary 1 through
January 31
    
    
    
    13,163
    
    
    $
    34.46
    
    
    
    -0-
    
    
    $
    -0-February 1 through
February 29
    
    
    
    2,855
    
    
    $
    31.06
    
    
    
    -0-
    
    
    $
    -0-March 1 through
March 31
    
    
    
    20,842
    
    
    $
    34.49
    
    
    
    -0-
    
    
    $
    -0-Total
    
    
    
    36,860
    
    
    
    
    
    
    
    -0-
    
    
    $
    -0-
 
 Item 6. Exhibits
 ExhibitNumber
    
    Description2.1
    
    Agreement and Plan of Merger among BT Triple Crown Merger Co.,
Inc., B Triple Crown Finco, LLC, T Triple Crown Finco, LLC and
Clear Channel Communications, Inc., dated as of November
 - 28-




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##### Table of Contents



ExhibitNumber
    
    Description2.2
    
    16,
2006 (incorporated by reference to the exhibits to Clear
Channels Current Report on Form 8-K dated November 16, 2006). 
Amendment No. 1, dated April 18, 2007, to the Agreement and
Plan of Merger, dated as of November 16, 2006, by and among BT
Triple Crown Merger Co., Inc., B Triple Crown Finco, LLC, T
Triple Crown Finco, LLC and Clear Channel Communications, Inc.
(incorporated by reference to the exhibits to Clear Channels
Current Report on Form 8-K dated April 18, 2007).2.3
    
    Amendment No. 2, dated May 17, 2007, to the Agreement and Plan
of Merger, dated as of November 16, 2006, by and among BT
Triple Crown Merger Co., Inc., B Triple Crown Finco, LLC, T
Triple Crown Finco, LLC, BT Triple Crown Holdings III, Inc.
and Clear Channel Communications, Inc., as amended
(incorporated by reference to the exhibits to Clear Channels
Current Report on Form 8-K dated May 18, 2007).2.4
    
    Asset Purchase Agreement dated April 20, 2007, between Clear
Channel Broadcasting, Inc., ABO Broadcasting Operations, LLC,
Ackerley Broadcasting Fresno, LLC, AK Mobile Television, Inc.,
Bel Meade Broadcasting, Inc., Capstar Radio Operating Company,
Capstar TX Limited Partnership, CCB Texas Licenses, L.P.,
Central NY News, Inc., Citicasters Co., Clear Channel
Broadcasting Licenses, Inc., Clear Channel Investments, Inc.
and TV Acquisition LLC (incorporated by reference to the
exhibits to Clear Channels Current Report on Form 8-K dated
April 26, 2007).2.5
    
    Amendment No. 1 to Asset Purchase Agreement, dated March 14,
2008, by and among Clear Channel Broadcasting, Inc., Ackerley
Broadcasting Operations, LLC, Ackerley Broadcasting Fresno,
LLC, AK Mobile Television, Inc., Bel Meade Broadcasting, Inc.,
Capstar Radio Operating Company, Capstar TX Limited
Partnership, CCB Texas Licenses, L.P., Central NY News, Inc.,
Citicasters Co., Clear Channel Broadcasting Licenses, Inc.,
Clear Channel Investments, Inc. and Newport Television, LLC
(incorporated by reference to the exhibits to Clear Channels
Current Report on Form 8-K dated March 20, 2008).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
    
    Seventh Amended and Restated Bylaws
of the Company, as amended (incorporated by reference to the exhibits
to Clear Channels Annual Report on Form 10-K for the year
ended December 31, 2007).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
 - 29-




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##### Table of Contents



ExhibitNumber
    
    Description4.5
    
    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). 
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).4.9
    
    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).4.10
    
    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).4.11
    
    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).4.12
    
    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).4.13
    
    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).4.14
    
    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).4.15
    
    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).4.16
    
    Eighteenth Supplemental Indenture dated November 22, 2004, to
Senior Indenture dated October 1,
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##### Table of Contents



ExhibitNumber
    
    Description4.17
    
    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). 
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).4.18
    
    Twentieth Supplemental Indenture dated March 21, 2006, to
Senior Indenture dated October 1, 1997, by and between Clear
Channel Communications, Inc. and The Bank of New York, as
Trustee (incorporated by reference to the exhibits to Clear
Channels Current Report on Form 8-K dated March 21, 2006).4.19
    
    Twenty-first Supplemental Indenture dated August 15, 2006, to
Senior Indenture dated October 1, 1997, by and between Clear
Channel Communications, Inc. and The Bank of New York, as
Trustee (incorporated by reference to the exhibits to Clear
Channels Current Report on Form 8-K dated August 16, 2006).4.20
    
    Twenty-Second Supplemental Indenture, dated as of January 2,
2008, by and between Clear Channel and The Bank of New York
Trust Company, N.A. (incorporated by reference to the exhibits
to Clear Channels Current Report on Form 8-K dated January 4,
2008).4.21
    
    Fourth Supplemental Indenture, dated as of January 2, 2008, by
and among AMFM, The Bank of New York Trust Company, N.A., and
the guarantors party thereto (incorporated by reference to the
exhibits to Clear Channels Current Report on Form 8-K dated
January 4, 2008).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.
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##### Table of Contents



Signatures
  CLEAR CHANNEL COMMUNICATIONS, INC.May 9, 2008
    /s/ Randall T. MaysRandall T. MaysPresident and
Chief Financial OfficerMay 9, 2008
    /s/ Herbert W. Hill, Jr.Herbert W. Hill, Jr.Senior Vice President and
Chief Accounting Officer - 32-