10Q298.doc, 08/13/98 10:11 AM Page 17 of 21
                                    FORM 10-Q


                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                      QUARTERLY REPORT UNDER SECTION 15(D)
                     OF THE SECURITIES EXCHANGE ACT OF 1934


     For the quarter ended June 30, 1998          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 Concord Plaza, Suite 600
                          San Antonio, Texas 78216-6940
                                 (210) 822-2828

                          (Address and telephone number
                         of principal executive offices)



         Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934 during the preceding 12 months (or for shorter  period that the  registrant
was  required  to file such  reports),  and (2) has been  subject to such filing
requirements for the past 90 days. Yes __x__ No _____

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



            Class                                Outstanding at August 13, 1998
- - - - - - - - - - - - - - - - -                  - - -  - - - - - - - - - -
Common Stock, $.10 par value                               248,333,084


<PAGE>



               CLEAR CHANNEL COMMUNICATIONS, INC. AND SUBSIDIARIES

                                      INDEX




                                                                      Page No.
                                                                  - - - - - - -

Part I -- Financial Information

     Item 1.  Unaudited Financial Statements

     Consolidated Balance Sheets at June 30, 1998
     and December 31, 1997                                                 3

     Consolidated Statements of Earnings for the six
     and three months ended June 30, 1998 and 1997                         5

     Consolidated Statements of Cash Flows for the
     six months ended June 30, 1998 and 1997                               6

     Notes to Consolidated Financial Statements                            8

     Item 2.  Management's Discussion and Analysis of
     Financial Condition and Results of Operations                        11

     Item 3.  Quantitative and Qualitative Disclosures
     About Market Risk                                                    14


Part II -- Other Information

     Item 4.  Submission of Matters to a Vote of Security Holders         15

     Item 6.  Exhibits and reports on Form 8-K                            16

         (a)  Exhibits
         (b)  Reports on Form 8-K

     Signatures                                                           17

     Index to Exhibits                                                    18


<PAGE>




                                     PART I

Item 1.  UNAUDITED FINANCIAL STATEMENTS
               CLEAR CHANNEL COMMUNICATIONS, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                                     ASSETS
                            (In thousands of dollars)

                                        June 30,                   December 31,
                                          1998                         1997
                                       (Unaudited)                      (*)
                                     ----------------           ---------------
Current Assets
   Cash and cash equivalents             $     58,374              $     24,657
   Income tax receivable                           --                     3,202
   Accounts receivable, less allowance
     of $17,938 at June 30, 1998 and 
     $9,850 at December 31, 1997              265,676                   155,962
   Film rights - current                       11,247                    14,826
                                       --------------            --------------
     Total Current Assets                     335,297                   198,647

Property, Plant and Equipment
   Land, buildings and improvements           121,653                    84,118
   Structures and site leases               1,195,573                   487,857
   Transmitter and studio equipment           230,179                   215,755
   Furniture and other equipment               84,764                    46,584
   Construction in progress                   210,865                    39,992
                                       --------------            --------------
                                            1,843,034                   874,306
Less accumulated depreciation                (176,957)                 (128,022)
                                       --------------            --------------
                                            1,666,077                   746,284
Intangible Assets
   Network affiliation agreements              33,727                    33,727
   Licenses and goodwill                    4,418,434                 2,175,944
   Covenants not-to-compete                    24,892                    24,892
   Other intangible assets                     33,560                    19,593
                                      ---------------           ---------------
                                            4,510,613                 2,254,156
Less accumulated amortization                (204,324)                 (141,066)
                                     ----------------           ---------------
                                            4,306,289                 2,113,090
Other Assets
   Notes receivable                                --                    35,373
   Film rights                                 10,252                    14,171
   Investments in, and advances to, 
   nonconsolidated affiliates                 294,035                   266,691
   Other assets                               133,392                    30,122
   Other investments                           99,550                    51,259
                                      ---------------           ---------------
Total Assets                               $6,844,892                $3,455,637
                                            =========                 =========
* From audited financial statements
                 See Notes to Consolidated Financial Statements


<PAGE>


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

                                        June 30,                   December 31,
                                          1998                         1997
                                       (Unaudited)                      (*)
                                     ----------------           ---------------
Current Liabilities
   Accounts payable                      $    56,861              $     11,904
   Accrued interest                           29,145                     9,950
   Accrued expenses                          141,058                    34,489
   Accrued income taxes                       16,672                        --
   Deferred income                             1,300                     1,340
   Current portion of long-term debt           4,094                    13,294
   Current portion of film rights
   liability                                  12,320                    15,875
                                      --------------             -------------
   Total Current Liabilities                 261,450                    86,852

   Long-term debt                          2,137,601                 1,540,421
   Film rights liability                      11,057                    15,551
   Deferred income taxes                      59,456                    10,114
   Deferred income                             9,100                     9,750
   Other long-term liabilities                90,251                    25,378

   Convertible debt                          575,000                      ----
   Minority interest                         125,729                    20,787

 Shareholders' Equity
   Common stock                               12,414                     9,823
   Additional paid-in capital              3,330,115                 1,541,865
   Retained earnings                         203,119                   169,631
   Other                                       1,087                     2,398
   Unrealized gain on investments             30,376                    23,754
   Cost of shares held in treasuy             (1,863)                     (687)
                                     ---------------            --------------
   Total shareholders' equity              3,575,248                 1,746,784
                                     ---------------            --------------
Total Liabilities and
   Shareholders' Equity                 $  6,844,892              $  3,455,637
                                          ==========                ==========
* From audited financial statements

                 See Notes to Consolidated Financial Statements



<PAGE>


               CLEAR CHANNEL COMMUNICATIONS, INC. AND SUBSIDIARIES
                       CONSOLIDATED STATEMENTS OF EARNINGS
                                   (UNAUDITED)
                (In thousands of dollars, except per share data)

<TABLE>
<CAPTION>

                                                               Six Months Ended                     Three Months Ended
                                                         June 30,         June 30,              June 30,           June 30,
                                                           1998             1997                  1998               1997
                                                      --------------   --------------        --------------     --------------
<S>                                                 <C>               <C>                   <C>              <C>               
Gross revenue                                          $   590,810       $   323,031           $   360,961     $    212,200
Less agency commissions                                     67,140            37,963                40,933           25,421
                                                    --------------    --------------        --------------   --------------
Net revenue                                                523,670           285,068               320,028          186,779
Operating expenses                                         289,342           166,733               165,568          103,678
Depreciation and amortization                              113,440            48,670                70,428           32,724
                                                    --------------    --------------        --------------   --------------
Operating income before corporate expenses                 120,888            69,665                84,032           50,377
Corporate expenses                                          13,779             7,871                 7,870            5,017
                                                    --------------    --------------        --------------   --------------
Operating income                                           107,109            61,794                76,162           45,360

Interest expense                                            53,733            32,314                28,032           21,268
Other income (expense) - net                                10,198             5,199                 7,403            (1,060)
                                                    --------------    --------------        --------------   --------------
Income before income taxes                                  63,574            34,679                55,533           23,032
Income taxes                                                36,619            17,307                32,360           12,345
                                                    --------------    --------------        --------------   --------------
Income before equity in earnings
of nonconsolidated affiliates                               26,955            17,372                23,173           10,687
Equity in earnings  of nonconsolidated affiliates            6,533             5,321                 4,736            4,407
                                                    --------------    --------------        --------------   --------------
Net income                                           $      33,488    $       22,693         $      27,909     $     15,094
                                                     =============    ==============         =============     ============

Net income per common share:
   Basic                                          $            .30    $          .28         $         .22     $        .18
                                                  =================   ==============         =============     ============

   Diluted                                        $            .29    $          .26         $         .22     $        .16
                                                  ================    ==============         =============     ============
</TABLE>

                 See Notes to Consolidated Financial Statements



<PAGE>



               CLEAR CHANNEL COMMUNICATIONS, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)
                            (In thousands of dollars)


                                                     Six Months Ended
                                          June 30,                    June 30,
                                            1998                        1997
                                       --------------              ------------

Cash flows from operating activities:
   Net income                           $     33,488              $     22,693

Reconciling Items:
   Depreciation                               49,954                    23,416
   Amortization of intangibles                63,485                    25,254
   Deferred taxes                              9,342                     2,756
   Amortization of film rights                 8,409                     8,132
   Payments on film liabilities               (8,961)                   (8,446)
   Recognition of deferred income               (690)                     (730)
   Loss on disposal of assets                    389                       467
   Gain on sale of other investments         (18,812)                     ----
   Equity in earnings of 
   nonconsolidated affiliates                 (3,549)                   (4,327)
   Dividend and other payments from
   nonconsolidated affiliates                  1,399                        --
   Decrease minority interest                     (3)                     (271)

Changes in operating assets and
liabilities:
   (Increase) decrease accounts
    receivable                               (18,515)                   (6,577)
   (Decrease) increase accounts 
    payable                                   (5,047)                    1,146
   Increase (decrease) accrued 
   interest                                    3,669                    (2,336)
   Increase (decrease) accrued 
   expenses and other liabilities              5,072                      (363)
   Increase (decrease) accrued 
   income and other taxes                     19,874                     5,269
                                     ---------------            --------------
   Net cash provided by operating
   activities                           $    139,504              $     66,083




<PAGE>


               CLEAR CHANNEL COMMUNICATIONS, INC. AND SUBSIDIARIES
                   SCHEDULE RECONCILING NET INCOME TO NET CASH
                     FLOWS PROVIDED BY OPERATING ACTIVITIES
                                   (UNAUDITED)
                            (In thousands of dollars)


                                                    Six Months Ended
                                              June 30,                June 30,
                                                1998                    1997
                                            ------------          -------------
Cash flows from investing activities:

   Decrease in notes receivable - net         $   35,373          $     52,750
   Increase in investments in and 
    advances to nonconsolidated 
    affiliates - net                             (57,697)               (37,340)
   Purchases of investments                      (17,193)               (24,279)
   Proceeds from sale of investments              25,768                   ----
   Purchases of property, plant and equipment    (27,775)               (12,689)
   Proceeds from disposal of assets                3,626                    267
   Acquisition of broadcasting assets           (168,247)               (91,765)
   Acquisition of outdoor assets                (864,847)              (766,039)
   Increase in other intangible assets            (8,278)                (3,684)
   (Increase) decrease in other-net               (3,722)                 2,364
                                             -----------            -----------

   Net cash used in investing activities      (1,082,992)              (880,415)

Cash flows from financing activities:
   Proceeds of long-term debt                  1,694,813                883,434
   Payments on long-term debt                 (1,864,151)              (346,650)
   Payments of current maturities                   (131)                  (686)
   Proceeds from exercise of stock options         3,415                  2,210
   Proceeds from issuance of common stock        577,250                288,443
   Proceeds from issuance of convertible 
   debt                                          566,009                    ---
                                            ------------           ------------
   Net cash provided by financing 
   activities                                    977,205                826,751

   Net increase in cash and cash 
   equivalents                                    33,717                 12,419

   Cash and cash equivalents at 
   beginning of period                            24,657                 16,701
                                           -------------          -------------
   Cash and cash equivalents at 
   end of period                           $      58,374          $      29,120
                                               =========              =========

                 See Notes to Consolidated Financial Statements


<PAGE>


               CLEAR CHANNEL COMMUNICATIONS, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

Note 1:  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  only  of  normal  recurring
accruals and  adjustments  necessary for adoption of new  accounting  standards)
necessary to present fairly the results of the interim  periods  shown.  Certain
information and footnote  disclosures  normally included in financial statements
prepared in accordance with generally accepted  accounting  principles have been
condensed  or omitted  pursuant  to such SEC rules and  regulations.  Management
believes  that  the  disclosures  made  are  adequate  to make  the  information
presented  not  misleading.   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 1997 Annual Report.

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 1997  consolidated
financial statements to conform to the 1998 presentation.

Note 2:  RECENT ACCOUNTING PRONOUNCEMENTS

As of January 1, 1998,  the Company  adopted  Statement of Financial  Accounting
Standards No. 130 Reporting Comprehensive Income.  Statement 130 establishes new
rules for the reporting and display of comprehensive  income and its components;
however,  the  adoption of this  Statement  had no impact on the  Company's  net
income or  shareholders'  equity.  Statement  130 requires  unrealized  gains or
losses on the  Company's  available-for-sale  securities  and  foreign  currency
translation  adjustments,  which prior to adoption were  reported  separately in
shareholders' equity, to be included in comprehensive income.

During the second quarter of 1998 and 1997, total comprehensive  income amounted
to $27.9  million and $15.1  million  respectively.  During the six months ended
June 30, 1998 and 1997, total comprehensive income amounted to $40.1 million and
$22.7 million respectively.  The primary component of other comprehensive income
was unrealized gains on the Company's available-for-sale securities.

Note 3:  RECENT DEVELOPMENTS

On January 21, 1998 the Company's  affiliate,  Heftel  Broadcasting  Corporation
("Heftel"),  of which the Company owned 32.3% of the  outstanding  common stock,
issued 5,075,000  additional shares of its common stock decreasing the Company's
total ownership to approximately 29.1% of Heftel's aggregate outstanding Class A
and Class B common stock.

On April 1, 1998, the Company closed its merger with Universal Outdoor Holdings,
Inc.  ("Universal").  Pursuant  to the  terms of the  agreement,  each  share of
Universal  common stock was  exchanged  for .67 shares of the  Company's  common
stock or  approximately  19.3 million  shares.  Universal's  operations  include
approximately  34,000 outdoor advertising display faces in 23 major metropolitan
markets.  This  acquisition is being  accounted for as a purchase with resulting
goodwill of  approximately  $1.3 billion based on a preliminary  purchase  price
allocations, which is being amortized over 25 years on a straight-line basis.

On June 25, 1998,  the Company  completed  the first closing of its tender offer
for all of the issued and to be issued shares of More Group Plc.,  ("More"),  an
outdoor  advertising  company  based in the United  Kingdom.  More's  operations
include  approximately 90,000 outdoor advertising display faces in 22 countries.
At June 30, 1998,  through a series of transactions  including the first closing
of the tender offer,  the Company had  purchased  35,857,951  shares,  or 86% of
issued  share  capital  of More for  (pound)11.10  per share,  or  approximately
US$18.33  per share  totaling  approximately  $657.3  million.  In addition  the
Company  assumed  approximately  $137.7 million in long-term debt from More. The
Company's  pro-rata  share of the earnings of More for the month of June,  which
was $1.1 million,  was accounted for under the equity method and was recorded in
"Equity in earnings of nonconsolidated  affiliates" in the second quarter. As of
June 30, 1998, a preliminary  purchase price allocation for More was included in
the  Company's  accounts  resulting  in a $110.8  million  addition  to minority
interest for the  approximately 14% of shares not purchased as of June 30, 1998.
The Company  consolidated the assets and liabilities of More as of June 30, 1998
and will begin consolidating the results of operations July 1, 1998.

<PAGE>

Through subsequent  closings,  on August 6, 1998, the Company has purchased 100%
of the issued share capital of More.  The aggregate  consideration  for all such
shares purchased was approximately (pound)462.3 million or $768.1 million.

The results of  operations  for the six month  periods  ending June 30, 1998 and
1997 include the operations of Eller Media ("Eller"),  Paxson Radio  ("Paxson"),
Universal  and More  from the  respective  dates of  acquisition  or  merger  as
appropriate. Assuming the acquisitions of Eller, Paxson and More, and the merger
with Universal had occurred at January 1, 1997, unaudited pro forma consolidated
results of operations for the six months ended June 30, 1998 and 1997 would have
been as follows:

                              Pro Forma (Unaudited)
                            Six Months Ended June 30,
                       In thousands, except per share data

                                           1998                       1997
                                           ----                       ----

           Net revenue                $   723,636                 $  599,080
           Net (loss)                 $   (21,798)                $  (47,194)
           Net (loss) per share:
               Basic                  $      (.17)                $     (.44)
               Diluted                $      (.17)                $     (.44)

The  pro  forma  information  above  is  presented  in  response  to  applicable
accounting  rules  relating  to  business  acquisitions  and is not  necessarily
indicative  of the  actual  results  that  would  have  been  achieved  had  the
acquisitions of Eller,  Paxson and More, and the merger with Universal  occurred
at the beginning of 1997,  nor is it indicative of future results of operations.
The Company had other acquisitions during the six months ended June 30, 1998 and
1997, the effects of which,  individually and in aggregate, were not material to
the Company's consolidated financial position or results of operations.

To facilitate possible future acquisitions,  on March 16, 1998 the Company filed
a  registration  statement on Form S-3 covering a combined  $1.5 billion of debt
securities, junior subordinated debt securities,  preferred stock, common stock,
warrants,  stock  purchase  contracts  and  stock  purchase  units  (the  "shelf
registration statement"). The shelf registration statement also covers preferred
securities  that may be issued from time to time by the Company's three Delaware
statutory  business  trusts and guarantees of such  preferred  securities by the
Company.

On March 30, 1998,  the Company  completed its offering of six million shares of
common stock under the shelf registration statement. Also, on March 30, 1998 the
Company  completed its offering of $500 million  aggregate  principal  amount of
2.625% Senior  Convertible Notes due April 1, 2003, under the shelf registration
statement.  On April 28,  1998,  the Company  issued an  additional  $75 million
aggregate principal amount of 2.625% Senior Convertible Notes due April 1, 2003.
The net  proceeds to the  Company of $577.2  million,  $492.5  million and $73.5
million,  respectively were used to reduce the outstanding balance on the credit
facility.

On May 6, 1998, The Company amended the shelf registration statement to increase
the amount of securities registered pursuant to the registration statement filed
on March 16, 1998 back to $1.5 billion.  On June 16, 1998, the Company completed
its offering of $175 million 6.875% senior debentures due June 15, 2018 and $125
million  6.625%  senior  notes due June 15,  2008  under the shelf  registration
statement.  The net proceeds of approximately $296 million,  in aggregate,  were
used to purchase issued share capital of More.


<PAGE>


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

Results of Operations

Comparison  of Three and Six Months  Ended June 30, 1998 to Three and Six Months
Ended June 30, 1997.

(In thousands of dollars, except per share data)
<TABLE>
<CAPTION>
                          Six Months       As-Reported    Pro Forma         Three Months     As-Reported   Pro Forma
                         Ended June 30,     % Increase    % Increase        Ended June 30,    % Increase    %Increase
   Consolidated          1998       1997    (Decrease)    (Decrease)       1998       1997    (Decrease)   (Decrease)
   ------------          ----       ----    ----------    ----------       ----       ----    ----------   ----------
<S>                    <C>        <C>            <C>           <C>        <C>        <C>           <C>          <C>
Net revenue            $523,670   $285,068        84%          21%        $320,028   $186,779       71%         27%
Operating expenses      289,342    166,733        74%          18%         165,568    103,678       60%         22%
Depreciation and
  amortization          113,440     48,670       133%          12%          70,428     32,724      115%         15%
Operating income        107,109     61,794        73%          46%          76,162     45,360       68%         57%
Interest expense         53,733     32,314        66%                       28,032     21,268       32%
Net income               33,488     22,693        48%                       27,909     15,094       85%
Net income per share:
    Basic              $    .30   $    .28         7%                     $    .22   $    .18       22%
    Diluted            $    .29   $    .26        12%                     $    .22   $    .16       38%
</TABLE>

The  majority  of the growth in the "as  reported"  net  revenue  and  operating
expenses  for the three  months  ended June 30,  1998 was due to the merger with
Universal Outdoor Holdings Inc.  ("Universal") on April 1, 1998. The majority of
the growth in the "as reported"  net revenue and operating  expenses for the six
months  ended  June  30,  1998  was due to the  merger  with  Universal  and the
acquisitions  of the Eller Media  Company  ("Eller") in April of 1997 and Paxson
Radio ("Paxson"), which has been included in the operations of the Company since
October of 1997. In addition 28 radio  stations and 4,748 outdoor  display faces
were  purchased  during  the first six  months of 1998,  the  effects  of which,
individually  and  in  the  aggregate,   were  not  material  to  the  Company's
consolidated  financial  position or results of  operations.  The  tangible  and
intangible  assets  associated with the purchase the  above-mentioned  radio and
outdoor  operations  account for the majority of the  increase in "as  reported"
depreciation and amortization. Interest expense increased as a result of greater
average  borrowing  level,  which  resulted from the  above-mentioned  radio and
outdoor  acquisitions.  This increase in interest expense for the second quarter
of 1998 was partially offset by the issuance of 2.625% senior  convertible notes
dated April 1, 1998.  The majority of the increase in "as  reported"  net income
also  was  primarily  due to the  inclusion  of  operations  resulting  from the
aforementioned business acquisitions.

Pro forma  presentation  referred to above assumes the acquisition and/or merger
of Eller, Paxson, Universal and More Group Plc., ("More") occurred on January 1,
1997. Pro forma net revenue  increased due to improved  advertising rates in the
broadcasting  segment and improved  occupancy  and increased  advertising  rates
within the outdoor segment.  Pro forma operating  expenses  increased  primarily
from the incremental selling costs related to the additional revenues.




<PAGE>


Liquidity and Capital Resources

The  major  sources  of  capital  for the  Company  have  been  cash  flow  from
operations,  advances on its revolving  long-term  line of credit  facility (the
"credit facility"),  and funds provided by various stock,  convertible and other
bond offerings, and other borrowings. As of June 30, 1998 and December 31, 1997,
the Company had the following debt outstanding:
                                            (In millions of dollars)
                                   June 30, 1998               December 31, 1997
                                   -------------               -----------------
         Credit facility            $1,350.7                        $1,215.2
         Senior convertible notes      575.0                              --
         Long-term bonds               600.0                           300.0
         Other borrowings              191.0                            38.5
                                 -----------                     -----------
         Total                      $2,716.7                        $1,553.7
                                     =======                         =======

In  addition,  the  Company  had $58.4  million  in  unrestricted  cash and cash
equivalents on hand at June 30, 1998.

On March  16,  1998  the  Company  filed a  registration  statement  on Form S-3
covering a combined $1.5 billion of debt securities,  junior  subordinated  debt
securities,  preferred stock, common stock,  warrants,  stock purchase contracts
and  stock  purchase  units  (the  "shelf  registration  statement").  The shelf
registration  statement also covers preferred securities that may be issued from
time to time by the  Company's  three  Delaware  statutory  business  trusts and
guarantees of such preferred  securities by the Company. Due to various debt and
equity offerings during March and April, on May 6, 1998, the Company amended the
shelf  registration  statement to increase the amount of  securities  registered
pursuant  to the  registration  statement  filed on March 16,  1998 back to $1.5
billion.

On June 29, 1998 the Company filed a registration statement on Form S-4 covering
1,500,000 shares of common stock, which may be offered and issued by the Company
from time to time in connection with the  acquisition  directly or indirectly by
the Company of various businesses or properties, or interests therein.

Credit Facility:
On July 1, 1998, the Company  expanded its revolving  credit facility from $1.75
billion to $2 billion, of which $1,350.7 million is outstanding and, taking into
account other guarantees, $628.1 million is available for future borrowings. The
credit  facility  converts into a reducing  revolving line of credit on the last
business day of September  2000,  with  quarterly  repayment of the  outstanding
principal  balance to begin the last business day of September 2000 and continue
during the subsequent five year period,  with the entire balance to be repaid by
the last business day of June 2005. During the first six months of the year, the
Company made principal payments on the credit facility totaling $1,235.3 million
including  $566.0  million and $577.2  million  from the net  proceeds  from the
convertible  debt offering and the equity  offering,  respectively and drew down
$1,370.8 million. Funding for the majority of the Company's acquisitions and the
refinancing  of long-term  debt in the merger with Universal was provided by the
Company's credit facility.

Equity Offerings:
On March 30, 1998,  the Company  completed an offering of six million  shares of
common  stock.  The net proceeds to the Company were $577.2  million,  which was
used to pay down the outstanding balance under the credit facility.

Senior Convertible Notes Offering:
On March 30,  and April 28,  1998 the  Company  completed  an  offering  of $500
million and $75 million aggregate  principal  amounts,  respectively,  of 2.625%
senior  convertible  notes due April 1, 2003  resulting  in net  proceeds to the
Company of $492.5 million and $73.5 million, respectively, which was used to pay
down  the  outstanding  balance  under  the  credit  facility.   The  notes  are
convertible  into the Company's  common stock at any time  following the date of
original issuance,  unless previously redeemed, at a conversion price of $123.90
per share,  subject to  adjustment in certain  events.  Interest on the notes is
payable  semiannually on each April 1 and October 1, beginning  October 1, 1998.
The notes are  redeemable,  in whole or in part, at the option of the Company at
any time on or after April 1, 2001 and until March 31, 2002 at  101.050%;  on or
after April 1, 2002 and until March 31, 2003 at 100.525%;  and on or after April
1, 2003 at 100%, plus accrued interest.

<PAGE>

Bond Offerings and Refinancings:
On June 16,  1998,  the Company  completed  an offering of $175  million  6.875%
senior  debentures  due June 15, 2018 and $125 million  6.625%  senior notes due
June 15,  2008  under the shelf  registration  statement.  The net  proceeds  of
approximately $296.0 million, in aggregate, were used to fund the acquisition of
issued share capital of More. Interest on the senior debentures and senior notes
is payable  semiannually on each June l5 and December 15, beginning December 15,
1998. In addition, the Company assumed approximately $567 million of Universal's
long-term  debt,  $242 million of which was refinanced at the closing date using
the  Company's  credit  facility.  In May 1998,  the Company  completed a public
tender offer for the remaining $325 million of 9.75% debentures, the majority of
which were purchased for  approximately  $374 million leaving  approximately  $2
million outstanding at June 30, 1998.

Other Borrowings:
Other borrowings consist principally of $137.7 million of long-term debt assumed
as part of the More acquisition.  The Company  anticipates  utilizing the credit
facility to refinance this debt during the third quarter.

Other:
During the first six months of 1998,  the  Company  purchased  the  broadcasting
assets of certain  radio  stations  in Mobile,  Alabama;  Monterey,  California;
Allentown,  Pennsylvania;  Jackson,  Mississippi;  Dayton,  Ohio; Daytona Beach,
Florida;  Greenville, South Carolina; and El Paso, Texas for approximately $24.1
million,  $23.7 million,  $29.0 million,  $20.0  million,  $14.5 million,  $11.5
million, $35.0 million and $10.5 million,  respectively.  Also, during the first
six months of 1998,  the Company  merged  with  Universal,  acquired  86% of the
common  stock of More,  and also  acquired  approximately  4,748  other  outdoor
display faces in 16 markets for $1.3 billion, $657.3 million and $152.2 million,
respectively.  In addition,  the Company purchased  capital  equipment  totaling
$27.8 million.

Future  acquisitions  of  broadcasting  stations,  outdoor  facilities and other
media-related properties,  affected in connection with the implementation of the
Company's  acquisition  strategy  are  expected  to be financed  from  increased
borrowings  under  the  credit  facility,  additional  public  equity  and  debt
offerings  and cash flow from  operations.  The Company  believes that cash flow
from  operations as well as the proceeds from  securities  offerings made by the
Company  from  time to time  will be  sufficient  to make  all  required  future
interest and principal payments on the credit facility, senior convertible notes
and bonds, and will be sufficient to fund all anticipated capital expenditures.

The  Company's  earnings are affected by  fluctuations  in the value of the U.S.
dollar as  compared  to foreign  currencies  as a result of its  investments  in
various  foreign  countries,  all of which are  accounted  for under the  equity
method.  The Company  believes  that the foreign  currency  risks to which it is
exposed  are not  reasonably  likely to have a  material  adverse  effect on the
Company's  cash flows,  results of  operations or financial  position  given the
concentration of revenue in the United States.

The ratio of earnings to combined fixed charges and preferred stock dividends is
as follows:

    6 Months ended
       June 30,                                  Year Ended
------------------------      --------------------------------------------
1998         1997              1997      1996       1995     1994     1993
------      ------            ------    ------     ------   ------   ------
 2.15        2.10              2.32      3.63       3.32     5.54     3.81

The ratio of earnings of combined  fixed charges and preferred  stock  dividends
has been 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.  The  Company  had  no  Preferred  Stock
outstanding and paid no dividends thereon for any period presented.

<PAGE>

Risks Regarding Forward Looking Statements

Except  for  the   historical   information,   this  report   contains   various
"forward-looking  statements"  which  represent  the Company's  expectations  or
beliefs concerning future events,  including the future levels of cash flow from
operations. The Company cautions that these forward-looking statements involve a
number of risks and  uncertainties and are subject to many variables which could
have an adverse effect upon the Company's financial performance. These variables
include  economic  conditions,  the  ability  of the  Company to  integrate  the
operations of Eller, Paxson,  Universal and More, shifts in population and other
demographics,  level of competition  for  advertising  dollars,  fluctuations in
operating  costs,  technological  changes  and  innovations,  changes  in  labor
conditions,  changes in governmental regulations and policies, and certain other
factors set forth in the  Company's  SEC filings.  Actual  results in the future
could differ materially from those described in the forward-looking statements.


Item 3.  Quantitative and Qualitative Disclosures About Market Risk.

Interest Rate Risk:

At June 30,  1998,  approximately  54% of the  Company's  long-term  debt  bears
interest at variable rates.  Accordingly,  the Company's  earnings and after tax
cash flow 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 first six months of 1998 average interest rate under these borrowings, it is
estimated  that the Company's  first six months of 1998  interest  expense would
have changed by $27.0  million and that the  Company's  first six months of 1998
net income and after tax cash flow would have changed by $17.6  million.  In the
event of an adverse  change in  interest  rates,  management  would  likely take
actions to further mitigate its exposure. However, due to the uncertainty of the
actions that would be taken and their possible effects,  the 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 June 30, 1998, the Company has several  interest rate  protection  agreements
that it obtained  through an acquisition.  These  agreements,  the fair value of
which are not material at June 30, 1998 and are not expected to become  material
in the near term,  have not been considered in the above analysis as the Company
intends to terminate these agreements during 1998.


Equity Price Risk:

The carrying  value of the  Company's  available-for-sale  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 June 30, 1998 by $12.9 million.



<PAGE>


Part II -- OTHER INFORMATION


Item 4.  Submission of Matters to a Vote of Security Holders

An annual  meeting of  shareholders  of the Company was held on May 5, 1998.  L.
Lowry Mays, Karl Eller,  Mark P. Mays, Alan D. Feld, B. J. McCombs,  Theodore H.
Strauss and John H. Williams  were elected as directors of the Company,  each to
hold office until the next annual meeting of shareholders or until his successor
has been elected and qualified,  subject to earlier resignation and removal. The
shareholders  also  approved the Clear Channel  Communications,  Inc. 1998 Stock
Incentive Plan. Additionally, the shareholders approved the selection of Ernst &
Young LLP as  independent  auditors for the year ending  December 31, 1998.  The
shareholders  did  not  approve  an  amendment  to  the  Company's  Articles  of
Incorporation increasing the number of authorized shares of Preferred Stock from
2,000,000 to 10,000,000 and the number of authorized shares of Common Stock from
150,000,000 to 600,000,000.

The results of voting at the annual meeting of the shareholders were as follows:

                                 Proposal No. 1
                             (Election of Directors)

    Nominee                              For                          Withheld
    L.Lowry Mays                      86,221,021                      1,193,939
    Karl Eller                        86,214,518                      1,200,442
    Mark P. Mays                      86,220,196                      1,194,764
    Alan D. Feld                      85,886,987                      1,527,973
    B.J. McCombs                      86,217,406                      1,197,554
    Theodore H. Strauss               86,367,960                      1,047,000
    John H. Williams                  86,376,841                      1,038,119


                                 Proposal No. 2
                       (Approve 1998 Stock Incentive Plan)

          For                  Withhold/Against             Exceptions/Abstain

       55,185,161                28,232,594                     145,996


                                 Proposal No. 3
                  (Amendment of the Articles of Incorporation)

          For                  Withhold/Against             Exceptions/Abstain

       52,402,978                32,056,811                     103,962


                                 Proposal No. 4
                       (Selection of Independent Auditors)

          For                  Withhold/Against             Exceptions/Abstain

       87,378,287                    12,054                      24,619


A special  meeting of shareholders of the Company was held on July 13, 1998. The
shareholders approved an amendment to the Company's Articles of Incorporation to
increase the number of authorized shares of Common Stock of the Company from 150
million to 600 million shares.  The  Shareholders  also approved an amendment to
the  Company's  Articles of  Incorporations  to authorize  the issuance of eight
million shares of a new class of preferred stock.

The  results  of voting  at the  special  meeting  of the  shareholders  were as
follows:


                                 Proposal No. 1
             (Amendment of the Articles of Incorporation to increase
                          Common Stock to 600 million)

          For                Withhold/Against             Exceptions/Abstain

       98,863,379                16,029,730                    35,168


                                 Proposal No. 2
            (Amendment of the Articles of Incorporation to authorize
                         a new class of Preferred Stock)

          For                Withhold/Against             Exceptions/Abstain

       83,324,710                27,322,142                  4,281,425


Item 6.  Exhibits and Reports on Form 8-K

   (a)  Exhibits.  See Exhibit Index on Page 18
   (b)  Reports on Form 8-K
        Filing    Date      Items Reported               Financial Statements 
                                                               Reported

        8-K      4/10/98    Item 2. Pro forma              Clear Channel 
                                    financial statements   Communications, Inc.
                                    assuming the merger    12/31/97    
                                    between the Company    Universal Outdoor 
`                                   and Universal          Holdings, Inc. 
                                    occurred on 1/1/97.    12/31/97  
                                                           Pro forma statements
                                                           12/31/97


        8-K      7/10/98    Item 2. Business               None, the required 
                                    acquisition of More    items under item 7(a)
                                    Group Plc. on June     and 7(b) will be 
                                    25, 1998.              filed within 60 days
                                                           of this filing.




<PAGE>


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.




Date     August 14, 1998                    /s/  Herbert W. Hill, Jr.
                                            Herbert W. Hill, Jr.
                                            Senior Vice President and
                                            Chief Accounting Officer


<PAGE>


                                                         INDEX TO EXHIBITS

Exhibit Number
                                                            Description

2.1             Agreement and Plan of Merger dated as of October 23, 1997, among
                Universal Outdoor Holdings, Inc., the Company, and UH Merger 
                Sub, Inc. (incorporated by reference to the exhibits of the 
                Company's Current Report on Form 8-K dated November 3, 1997).

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             Second Amended and Restated Bylaws 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).

4.1             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).

4.2             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  exhibit  4.2 of the  Company's
                Quarterly  Report on Form 10-Q for the quarter  ended  September
                30, 1997).

4.3             Third Amended and Restated  Credit  Agreement by and among Clear
                Channel  Communications,  Inc.,  NationsBank of Texas,  N.A., as
                administrative  lender,  the First  National Bank of Boston,  as
                documentation  agent,  the Bank of Montreal and Toronto Dominion
                (Texas),  Inc.,  as  co-syndication  agents,  and certain  other
                lenders   dated   April  10,   1997  (the   "Credit   Facility")
                (incorporated  by  reference  to the  exhibits of the  Company's
                Amendment No. 1 to the Registration  Statement on Form S-3 (Reg.
                No. 333-25497) dated May 9, 1997).

4.4             First  Supplemental  Indenture  dated  March 30,  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 Company's  Quarterly Report on
                Form 10-Q for the quarter ended March 31, 1998).

11              Computation of Earnings Per Share

12              Computation of Ratio of Earnings to Fixed Charges

27              Financial Data Schedule at June 30, 1998

27.1            Financial Data Schedule at June 30, 1997 (incorporated by 
                reference to exhibit 27 of the Company's Quarterly Report on 
                Form 10-Q for the quarter ended June 30, 1997).