##### Table of Contents



FORM 10-Q

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

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

|                                     |  |                              
|------------------------------------ |  | -----------------------------
|For the quarter ended March 31, 2003 |  | Commission file number 1-9645

CLEAR CHANNEL COMMUNICATIONS, INC.

(Exact name of registrant as specified in its charter)

|                               |  |                                                
|------------------------------ |  | -----------------------------------------------
|Texas
(State of Incorporation) |  | 74-1787539
(I.R.S. Employer Identification No.)

200 East Basse Road
San Antonio, Texas 78209
(210) 822-2828

(Address and telephone number
of principal executive offices)

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

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act). 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 April 30, 2003
|                             |  |                              
|Common Stock, $.10 par value |  | 614,134,900                  





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TABLE OF CONTENTS



|                                                 |                                                                                               |                                            |  |  |  |  |  | 
|------------------------------------------------ | --------------------------------------------------------------------------------------------- | ------------------------------------------ |  |  |  |  |  | 
|PART I                                          
|                                                 | Item 1. UNAUDITED FINANCIAL STATEMENTS                                                       
|                                                 |                                                                                               | CONSOLIDATED BALANCE SHEETS               
|                                                 |                                                                                               | CONSOLIDATED BALANCE SHEETS               
|                                                 |                                                                                               | CONSOLIDATED STATEMENTS OF OPERATIONS     
|                                                 |                                                                                               | CONSOLIDATED STATEMENTS OF CASH FLOWS     
|                                                 |                                                                                               | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|                                                 | Item 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|                                                 | ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                           
|                                                 | ITEM 4. CONTROLS AND PROCEDURES                                                              
|Part II  OTHER INFORMATION                     
|                                                 | Item 1. Legal Proceedings                                                                    
|                                                 | Item 6. Exhibits and Reports on Form 8-K                                                     
|Signatures                                      
|Certification                                   
|INDEX TO EXHIBITS                               
|EX-11 Computation of Per Share Earnings         
|EX-12 Computation of Ratios                     
|EX-99.1 Certification of Chief Executive Officer
|EX-99.2 Certification of Chief Financial Officer



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##### Table of Contents



CLEAR CHANNEL COMMUNICATIONS, INC. AND SUBSIDIARIES

INDEX

|                               |                                                                                               |                         |  |          |  | 
|------------------------------ | --------------------------------------------------------------------------------------------- | ----------------------- |  | -------- |  | 
|                               |                                                                                               |                         |  | Page No. | 
|                               |                                                                                               |                         |  |          | 
|Part I  Financial Information |                                                                                               |                         |  |         
|                               |                                                                                               |                         |  |         
|                               | Item 1. Unaudited Financial Statements                                                        |                         |  |          | 
|                               |                                                                                               |                         |  |         
|                               | Consolidated Balance Sheets at March 31, 2003 and December 31, 2002                           |                         |  | 3        | 
|                               |                                                                                               |                         |  |         
|                               | Consolidated Statements of Operations for the three months ended March 31, 2003 and 2002      |                         |  | 5        | 
|                               |                                                                                               |                         |  |         
|                               | Consolidated Statements of Cash Flows for the three months ended March 31, 2003 and 2002      |                         |  | 6        | 
|                               |                                                                                               |                         |  |         
|                               | Notes to Consolidated Financial Statements                                                    |                         |  | 7        | 
|                               |                                                                                               |                         |  |         
|                               | Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations |                         |  | 13       | 
|                               |                                                                                               |                         |  |         
|                               | Item 3. Quantitative and Qualitative Disclosures About Market Risk                            |                         |  | 28       | 
|                               |                                                                                               |                         |  |         
|                               | Item 4. Controls and Procedures                                                               |                         |  | 28       | 
|                               |                                                                                               |                         |  |         
|Part II  Other Information    |                                                                                               |                         |  |         
|                               |                                                                                               |                         |  |         
|                               | Item 1. Legal Proceedings                                                                     |                         |  | 29       | 
|                               |                                                                                               |                         |  |         
|                               | Item 6. Exhibits and reports on Form 8-K                                                      |                         |  | 29       | 
|                               |                                                                                               |                         |  |         
|                               |                                                                                               | (a) Exhibits            |  |          |  | 
|                               |                                                                                               | (b) Reports on Form 8-K |  |          |  | 
|                               |                                                                                               |                         |  |         
|                               | Signatures                                                                                    |                         |  | 29       | 
|                               |                                                                                               |                         |  |         
|                               | Certification                                                                                 |                         |  | 30       | 
|                               |                                                                                               |                         |  |         
|                               | Index to Exhibits                                                                             |                         |  | 32       | 





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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, |           
|                              |                                                                                                   |   | 2003        |            |  | 2002         |           
|                              |                                                                                                   |   | (Unaudited) |            |  | (Audited)    |           
|                              |                                                                                                   |   |             |            |  |              |           
|Current Assets                |                                                                                                   |   |             |            |  |              |            |           
|                              | Cash and cash equivalents                                                                         |   | $           | 349,242    |  |              | $          | 170,086    | 
|                              | Accounts receivable, less allowance of $66,392 at March
31, 2003 and $67,338 at December 31, 2002 |   |             | 1,422,868  |  |              |            | 1,584,995  | 
|                              | Prepaid expenses                                                                                  |   |             | 258,875    |  |              |            | 203,578    | 
|                              | Other current assets                                                                              |   |             | 182,979    |  |              |            | 164,836    | 
|                              |                                                                                                   |   |             |            |  |              |           
|Total Current Assets          |                                                                                                   |   | 2,213,964   |            |  |              | 2,123,495  |           
|                              |                                                                                                   |   |             |            |  |              |            |           
|Property, Plant and Equipment |                                                                                                   |   |             |            |  |              |            |           
|                              | Land, buildings and improvements                                                                  |   |             | 1,528,294  |  |              |            | 1,519,845  | 
|                              | Structures and site leases                                                                        |   |             | 2,622,411  |  |              |            | 2,581,414  | 
|                              | Towers, transmitter and studio equipment                                                          |   |             | 755,089    |  |              |            | 743,463    | 
|                              | Furniture and other equipment                                                                     |   |             | 636,715    |  |              |            | 629,264    | 
|                              | Construction in progress                                                                          |   |             | 217,307    |  |              |            | 227,853    | 
|                              |                                                                                                   |   |             |            |  |              |           
|                              |                                                                                                   |   | 5,759,816   |            |  |              | 5,701,839  |           
|Less accumulated depreciation |                                                                                                   |   | 1,569,338   |            |  |              | 1,459,027  |           
|                              |                                                                                                   |   |             |            |  |              |           
|                              |                                                                                                   |   | 4,190,478   |            |  |              | 4,242,812  |           
|Intangible Assets             |                                                                                                   |   |             |            |  |              |            |           
|                              | Definite-lived intangibles, net                                                                   |   |             | 736,184    |  |              |            | 761,728    | 
|                              | Indefinite-lived intangibles - licenses                                                           |   |             | 11,742,747 |  |              |            | 11,738,947 | 
|                              | Indefinite-lived intangibles - other                                                              |   |             | 401,649    |  |              |            | 389,801    | 
|                              | Goodwill                                                                                          |   |             | 7,258,186  |  |              |            | 7,241,231  | 
|                              |                                                                                                   |   |             |            |  |              |            |           
|Other Assets                  |                                                                                                   |   |             |            |  |              |            |           
|                              | Notes receivable                                                                                  |   |             | 18,730     |  |              |            | 21,658     | 
|                              | Investments in, and advances to, nonconsolidated affiliates                                       |   |             | 548,419    |  |              |            | 542,214    | 
|                              | Other assets                                                                                      |   |             | 524,383    |  |              |            | 520,423    | 
|                              | Other investments                                                                                 |   |             | 126,253    |  |              |            | 89,844     | 
|                              |                                                                                                   |   |             |            |  |              |            |           
|                              |                                                                                                   |   |             |            |  |              |           
|Total Assets                  |                                                                                                   | $ | 27,760,993  |            |  | $            | 27,672,153 |           
|                              |                                                                                                   |   |             |            |  |              |           

See Notes to Consolidated Financial Statements

-3-



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##### Table of Contents






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

|                                           |                                      |   |             |             |   |              |            |             |  
|------------------------------------------ | ------------------------------------ | - | ----------- | ----------- | - | ------------ | ---------- | ----------- | -
|                                           |                                      |   | March 31,   |             |   | December 31, |           
|                                           |                                      |   | 2003        |             |   | 2002         |           
|                                           |                                      |   | (Unaudited) |             |   | (Audited)    |           
|                                           |                                      |   |             |             |   |              |           
|Current Liabilities                        |                                      |   |             |             |   |              |            |            
|                                           | Accounts payable                     |   | $           | 304,813     |   |              | $          | 345,093     |  
|                                           | Accrued interest                     |   |             | 117,746     |   |              |            | 71,335      |  
|                                           | Accrued expenses                     |   |             | 808,047     |   |              |            | 894,166     |  
|                                           | Current portion of long-term debt    |   |             | 1,374,958   |   |              |            | 1,396,532   |  
|                                           | Deferred income                      |   |             | 405,267     |   |              |            | 277,042     |  
|                                           | Other current liabilities            |   |             | 21,872      |   |              |            | 26,471      |  
|                                           |                                      |   |             |             |   |              |           
|Total Current Liabilities                  |                                      |   | 3,032,703   |             |   |              | 3,010,639  |            
|                                           |                                      |   |             |             |   |              |            |            
|Long-term debt                             |                                      |   | 7,259,130   |             |   |              | 7,382,090  |            
|Deferred income taxes                      |                                      |   | 2,543,123   |             |   |              | 2,470,458  |            
|Other long-term liabilities                |                                      |   | 552,127     |             |   |              | 552,801    |            
|                                           |                                      |   |             |             |   |              |            |            
|Minority interest                          |                                      |   | 46,014      |             |   |              | 46,073     |            
|                                           |                                      |   |             |             |   |              |            |            
|Shareholders Equity                       |                                      |   |             |             |   |              |            |            
|                                           | Common stock                         |   |             | 61,427      |   |              |            | 61,340      |  
|                                           | Additional paid-in capital           |   |             | 30,888,949  |   |              |            | 30,868,725  |  
|                                           | Accumulated deficit                  |   |             | (16,581,743 | ) |              |            | (16,652,789 | )
|                                           | Accumulated other comprehensive loss |   |             | (17,277     | ) |              |            | (47,798     | )
|                                           | Other                                |   |             | (2,300      | ) |              |            | (3,131      | )
|                                           | Cost of shares held in treasury      |   |             | (21,160     | ) |              |            | (16,255     | )
|                                           |                                      |   |             |             |   |              |           
|Total shareholders equity                 |                                      |   | 14,327,896  |             |   |              | 14,210,092 |            
|                                           |                                      |   |             |             |   |              |            |            
|                                           |                                      |   |             |             |   |              |           
|Total Liabilities and Shareholders Equity |                                      | $ | 27,760,993  |             |   | $            | 27,672,153 |            
|                                           |                                      |   |             |             |   |              |           

See Notes to Consolidated Financial Statements

-4-



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##### Table of Contents






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

|                                                                                     |                                                                                                                           |                                                                              |           |                   |        |                              |             |           |         |   |        |  
|------------------------------------------------------------------------------------ | ------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------- | --------- | ----------------- | ------ | ---------------------------- | ----------- | --------- | ------- | - | ------ | -
|                                                                                     |                                                                                                                           |                                                                              |           |                   |        | Three Months Ended March 31, |            
|                                                                                     |                                                                                                                           |                                                                              |           |                   |        |                              |            
|                                                                                     |                                                                                                                           |                                                                              |           |                   |        | 2003                         |             |           | 2002    |  
|                                                                                     |                                                                                                                           |                                                                              |           |                   |        |                              |             |           |         |  
|Revenue                                                                              |                                                                                                                           | $                                                                            | 1,779,443 |                   |        | $                            | 1,697,987   |          
|                                                                                     |                                                                                                                           |                                                                              |           |                   |        |                              |             |          
|Operating expenses:                                                                  |                                                                                                                           |                                                                              |           |                   |        |                              |             |          
|                                                                                     | Divisional operating expenses (excludes non-cash compensation
expenses of $516 and $1,460 in 2003 and 2002, respectively) |                                                                              |           | 1,361,075         |        |                              |             | 1,288,977 |        
|                                                                                     | Non-cash compensation expense                                                                                             |                                                                              |           | 799               |        |                              |             | 1,838     |        
|                                                                                     | Depreciation and amortization                                                                                             |                                                                              |           | 159,562           |        |                              |             | 142,418   |        
|                                                                                     | Corporate expenses (excludes non-cash compensation expenses of $283
and $378 in 2003 and 2002, respectively)              |                                                                              |           | 42,779            |        |                              |             | 38,969    |        
|                                                                                     |                                                                                                                           |                                                                              |           |                   |        |                             
|Operating income                                                                     |                                                                                                                           |                                                                              | 215,228   |                   |        |                              | 225,785     |          
|                                                                                     |                                                                                                                           |                                                                              |           |                   |        |                              |             |          
|Interest expense                                                                     |                                                                                                                           |                                                                              | 100,952   |                   |        |                              | 110,367     |          
|Gain (loss) on sale of assets related to mergers                                     |                                                                                                                           |                                                                              |          |                   |        |                              | 3,991       |          
|Gain (loss) on marketable securities                                                 |                                                                                                                           |                                                                              | 2,792     |                   |        |                              | 2,984       |          
|Equity in earnings of nonconsolidated affiliates                                     |                                                                                                                           |                                                                              | 2,335     |                   |        |                              | 3,213       |          
|Other income (expense) - net                                                         |                                                                                                                           |                                                                              | 2         |                   |        |                              | 26,207      |          
|                                                                                     |                                                                                                                           |                                                                              |           |                   |        |                             
|Income before income taxes and cumulative effect of a change in
accounting principle |                                                                                                                           |                                                                              | 119,405   |                   |        |                              | 151,813     |          
|Income tax (expense) benefit:                                                        |                                                                                                                           |                                                                              |           |                   |        |                              |             |          
|                                                                                     | Current                                                                                                                   |                                                                              |           | 17,995            |        |                              |             | 6,593     |        
|                                                                                     | Deferred                                                                                                                  |                                                                              |           | (66,354           | )      |                              |             | (68,077   | )      
|                                                                                     |                                                                                                                           |                                                                              |           |                   |        |                             
|Income before cumulative effect of a change in accounting principle                  |                                                                                                                           |                                                                              | 71,046    |                   |        |                              | 90,329      |          
|Cumulative effect of a change in accounting principle, net of tax of
$4,324,446      |                                                                                                                           |                                                                              |          |                   |        |                              | (16,778,526 | )        
|                                                                                     |                                                                                                                           |                                                                              |           |                   |        |                             
|Net income (loss)                                                                    |                                                                                                                           |                                                                              | 71,046    |                   |        |                              | (16,688,197 | )        
|                                                                                     |                                                                                                                           |                                                                              |           |                   |        |                              |             |          
|Other comprehensive income (loss), net of tax:                                       |                                                                                                                           |                                                                              |           |                   |        |                              |             |          
|                                                                                     | Foreign currency translation adjustments                                                                                  |                                                                              |           | 7,207             |        |                              |             | (12,262   | )      
|                                                                                     | Unrealized gain (loss) on securities:                                                                                     |                                                                              |           |                   |        |                              |             |           |        
|                                                                                     |                                                                                                                           | Unrealized holding gain (loss)                                               |           |                   | 25,037 |                              |             |           | (37,121 | )
|                                                                                     |                                                                                                                           | Reclassification adjustment for (gains) losses included in net
income (loss) |           |                   | (1,723 | )                            |             |           | (2,475  | )
|                                                                                     |                                                                                                                           |                                                                              |           |                   |        |                             
|Comprehensive income (loss)                                                          |                                                                                                                           | $                                                                            | 101,567   |                   |        | $                            | (16,740,055 | )        
|                                                                                     |                                                                                                                           |                                                                              |           |                   |        |                             
|                                                                                     |                                                                                                                           |                                                                              |           |                   |        |                              |             |          
|Net income (loss) per common share:                                                  |                                                                                                                           |                                                                              |           |                   |        |                              |             |          
|                                                                                     | Basic:                                                                                                                    |                                                                              |           |                   |        |                              |             |           |        
|                                                                                     |                                                                                                                           | Income before cumulative effect of a change in accounting principle          |           | $                 | .12    |                              |             | $         | .15     |  
|                                                                                     |                                                                                                                           | Cumulative effect of a change in accounting principle                        |           |                   |       |                              |             |           | (28.00  | )
|                                                                                     |                                                                                                                           |                                                                              |           |                   |        |                             
|                                                                                     |                                                                                                                           |                                                                              |           | Net income (loss) |        | $                            | .12         |           |         | $ | (27.85 | )
|                                                                                     |                                                                                                                           |                                                                              |           |                   |        |                             
|                                                                                     | Diluted:                                                                                                                  |                                                                              |           |                   |        |                              |             |           |        
|                                                                                     |                                                                                                                           | Income before cumulative effect of a change in accounting principle          |           | $                 | .12    |                              |             | $         | .15     |  
|                                                                                     |                                                                                                                           | Cumulative effect of a change in accounting principle                        |           |                   |       |                              |             |           | (27.76  | )
|                                                                                     |                                                                                                                           |                                                                              |           |                   |        |                             
|                                                                                     |                                                                                                                           |                                                                              |           | Net income (loss) |        | $                            | .12         |           |         | $ | (27.61 | )
|                                                                                     |                                                                                                                           |                                                                              |           |                   |        |                             

See Notes to Consolidated Financial Statements

-5-



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##### Table of Contents






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

|                                                    |                                                                                        |   |                              |          |   |      |          |             |  
|--------------------------------------------------- | -------------------------------------------------------------------------------------- | - | ---------------------------- | -------- | - | ---- | -------- | ----------- | -
|                                                    |                                                                                        |   | Three Months Ended March 31, |         
|                                                    |                                                                                        |   |                              |         
|                                                    |                                                                                        |   | 2003                         |          |   | 2002 |         
|                                                    |                                                                                        |   |                              |          |   |      |         
|Cash Flows from operating activities:               |                                                                                        |   |                              |          |   |      |          |            
|                                                    | Net loss                                                                               |   | $                            | 71,046   |   |      | $        | (16,688,197 | )
|                                                    |                                                                                        |   |                              |          |   |      |          |            
|Reconciling Items:                                  |                                                                                        |   |                              |          |   |      |          |            
|                                                    | Cumulative effect of a change in accounting principle, net of tax                      |   |                              |         |   |      |          | 16,778,526  |  
|                                                    | Depreciation and amortization                                                          |   |                              | 159,562  |   |      |          | 142,418     |  
|                                                    | Deferred taxes                                                                         |   |                              | 66,354   |   |      |          | 68,077      |  
|                                                    | (Gain) loss on disposal of assets                                                      |   |                              | 3,381    |   |      |          | (14,698     | )
|                                                    | (Gain) loss on sale of assets related to mergers                                       |   |                              |         |   |      |          | (3,991      | )
|                                                    | (Gain) loss on sale of other investments                                               |   |                              | (2,779   | ) |      |          |            |  
|                                                    | (Gain) loss on forward exchange contract                                               |   |                              | 3,988    |   |      |          | (10,966     | )
|                                                    | (Gain) loss on trading securities                                                      |   |                              | (4,001   | ) |      |          | 7,982       |  
|                                                    | Increase (decrease) other, net                                                         |   |                              | (1,421   | ) |      |          | (7,837      | )
|                                                    | Changes in other operating assets and liabilities, net of
effects of acquisitions      |   |                              | 139,712  |   |      |          | 178,539     |  
|                                                    |                                                                                        |   |                              |          |   |      |         
|Net cash provided by (used in) operating activities |                                                                                        |   | 435,842                      |          |   |      | 449,853  |            
|                                                    |                                                                                        |   |                              |          |   |      |          |            
|Cash flows from investing activities:               |                                                                                        |   |                              |          |   |      |          |            
|                                                    | (Investment in) liquidation of restricted cash, net                                    |   |                              |         |   |      |          | (14,347     | )
|                                                    | Decrease (increase) in notes receivable - net                                          |   |                              | 2,928    |   |      |          | 1,899       |  
|                                                    | Decrease (increase) in investments in and advances to
nonconsolidated affiliates - net |   |                              | 3,195    |   |      |          | (3,418      | )
|                                                    | Purchases of investments                                                               |   |                              | (2,079   | ) |      |          | (250        | )
|                                                    | Proceeds from sale of investments                                                      |   |                              | 10,332   |   |      |          | 11,827      |  
|                                                    | Purchases of property, plant and equipment                                             |   |                              | (64,432  | ) |      |          | (108,650    | )
|                                                    | Proceeds from disposal of assets                                                       |   |                              | 3,196    |   |      |          | 9,945       |  
|                                                    | Proceeds from divestitures placed in restricted cash                                   |   |                              |         |   |      |          | 18,000      |  
|                                                    | Acquisition of operating assets                                                        |   |                              | (30,792  | ) |      |          | (17,138     | )
|                                                    | Acquisition of operating assets with restricted cash                                   |   |                              |         |   |      |          | (3,653      | )
|                                                    | Decrease (increase) in other-net                                                       |   |                              | (19,738  | ) |      |          | (31,979     | )
|                                                    |                                                                                        |   |                              |          |   |      |         
|Net cash (used in) provided by investing activities |                                                                                        |   | (97,390                      | )        |   |      | (137,764 | )          
|                                                    |                                                                                        |   |                              |          |   |      |          |            
|Cash flows from financing activities:               |                                                                                        |   |                              |          |   |      |          |            
|                                                    | Draws on credit facilities                                                             |   |                              | 242,209  |   |      |          | 325,760     |  
|                                                    | Payments on credit facilities                                                          |   |                              | (829,799 | ) |      |          | (500,722    | )
|                                                    | Proceeds from long-term debt                                                           |   |                              | 999,164  |   |      |          |            |  
|                                                    | Payments on long-term debt                                                             |   |                              | (581,399 | ) |      |          | (153,458    | )
|                                                    | Proceeds from exercise of stock options, stock purchase plan and
common stock warrants |   |                              | 10,529   |   |      |          | 43,528      |  
|                                                    |                                                                                        |   |                              |          |   |      |         
|Net cash used in financing activities               |                                                                                        |   | (159,296                     | )        |   |      | (284,892 | )          
|                                                    |                                                                                        |   |                              |          |   |      |         
|                                                    |                                                                                        |   |                              |          |   |      |          |            
|Net increase in cash and cash equivalents           |                                                                                        |   | 179,156                      |          |   |      | 27,197   |            
|                                                    |                                                                                        |   |                              |          |   |      |          |            
|Cash and cash equivalents at beginning of period    |                                                                                        |   | 170,086                      |          |   |      | 154,744  |            
|                                                    |                                                                                        |   |                              |          |   |      |         
|Cash and cash equivalents at end of period          |                                                                                        | $ | 349,242                      |          |   | $    | 181,941  |            
|                                                    |                                                                                        |   |                              |          |   |      |         

See Notes to Consolidated Financial Statements

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

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Preparation of Interim Financial Statements

The consolidated financial statements have been prepared by Clear Channel
Communications, Inc. (the Company) pursuant to the rules and regulations of
the Securities and Exchange Commission (SEC) and, in the opinion of
management, include all adjustments (consisting of normal recurring accruals
and adjustments necessary for adoption of new accounting standards) necessary
to present fairly the results of the interim periods shown. Certain
information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles in the United States have been condensed or omitted pursuant to
such SEC rules and regulations. Management believes that the disclosures
made are adequate to make the information presented not misleading. Due to
seasonality and other factors, the results for the interim periods are not
necessarily indicative of results for the full year. The financial
statements contained herein should be read in conjunction with the
consolidated financial statements and notes thereto included in the Companys
2002 Annual Report on Form 10-K.

The consolidated financial statements include the accounts of the Company and
its subsidiaries, the majority of which are wholly-owned. Investments in
companies in which the Company owns 20 percent to 50 percent of the voting
common stock or otherwise exercises significant influence over operating and
financial policies of the company are accounted for under the equity method.
All significant intercompany transactions are eliminated in the consolidation
process. Certain reclassifications have been made to the 2002 consolidated
financial statements to conform to the 2003 presentation.

Stock-Based Compensation

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

|                                                                                         |                                                  |                                  |   |        |     |  |      |        |     | 
|---------------------------------------------------------------------------------------- | ------------------------------------------------ | -------------------------------- | - | ------ | --- |  | ---- | ------ | --- | 
|(In thousands, except per share data)                                                    |                                                  | The three months ended March 31, |  
|                                                                                         |                                                  |                                  |  
|                                                                                         |                                                  |                                  |   | 2003   |     |  | 2002 |       
|                                                                                         |                                                  |                                  |   |        |     |  |      |       
|Net income before cumulative effect of a change in accounting principle                 
|                                                                                         | Reported                                         |                                  | $ | 71,046 |     |  | $    | 90,329 |    
|                                                                                         | Pro forma stock compensation expense, net of tax |                                  |   | 12,237 |     |  |      | 13,257 |    
|                                                                                         |                                                  |                                  |   |        |     | 
|                                                                                         | Pro Forma                                        |                                  | $ | 58,809 |     |  | $    | 77,072 |    
|                                                                                         |                                                  |                                  |   |        |     | 
|                                                                                         |                                                  |                                  |   |        |     |  |      |       
|Net income before cumulative effect of a change in accounting principle per common share
|                                                                                         | Basic:                                           |                                  |   |        |     |  |      |        |    
|                                                                                         |                                                  | Reported                         |   | $      | .12 |  |      | $      | .15 | 
|                                                                                         |                                                  | Pro Forma                        |   | $      | .10 |  |      | $      | .13 | 
|                                                                                         |                                                  |                                  |   |        |     |  |      |       
|Net income before cumulative effect of a change in accounting principle per common share
|                                                                                         | Diluted:                                         |                                  |   |        |     |  |      |        |    
|                                                                                         |                                                  | Reported                         |   | $      | .12 |  |      | $      | .15 | 
|                                                                                         |                                                  | Pro Forma                        |   | $      | .10 |  |      | $      | .13 | 

The fair value for these options was estimated at the date of grant using a
Black-Scholes option-pricing model with the following weighted average
assumptions for 2003 and 2002:

|                                                                                 |  |                                      |  |                                     
|-------------------------------------------------------------------------------- |  | ------------------------------------ |  | ------------------------------------
|                                                                                 |  | 2003                                 |  | 2002                                
|                                                                                 |  |                                      |  |                                     
|Risk-free interest rate
Dividend yield
Volatility factors
Expected life in years |  | 2.91% - 3.76%
0%
43% - 47%
5.0 - 7.5 |  | 2.85% - 5.33%
0%
36% - 49%
3.5 - 7.5

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Recent Accounting Pronouncements

On January 1, 2003, the Company adopted Statement of Financial Accounting
Standards No. 143, Accounting for Asset Retirement Obligations(Statement
143). Statement 143 applies to legal obligations associated with the
retirement of long-lived assets that result from acquisition, construction,
development and/or the normal operation of a long-lived asset. Adoption of
this statement did not materially impact the Companys financial position or
results of operations.

On January 1, 2003, the Company adopted Statement of Financial Accounting
Standards No. 146, Accounting for Costs Associated with Exit or Disposal
Activities(Statement 146). Statement 146 addresses the accounting and
reporting for costs associated with exit or disposal activities and nullifies
Emerging Issues Task Force (EITF) Issue No. 94-3, Liability Recognition
for Certain Employee Terminations Benefits and Other Costs to Exit an
Activity. It also substantially nullifies EITF Issue No. 88-10, Costs
Associated with Lease Modification or Termination. Adoption of this
statement did not materially impact the Companys financial position or
results of operations.

On January 1, 2003, the Company adopted Financial Accounting Standards Board
Interpretation No. 45, Guarantors Accounting and Disclosure Requirements for
Guarantees, Including Indirect Guarantees of Indebtedness of Others(the
Interpretation). The Interpretation applies to contracts or indemnification
agreements that contingently require the guarantor to make payments to the
guaranteed party based on changes in an underlying that is related to an
asset, liability, or an equity security of the guaranteed party. The
Interpretations disclosure requirements were effective for financial
statements of interim or annual periods ending after December 15, 2002. The
Interpretations initial recognition and initial measurement provisions were
applicable on a prospective basis to guarantees issued or modified after
December 31, 2002, irrespective of the guarantors fiscal year-end. The
Company adopted the disclosure requirements of this Interpretation for its
2002 annual report. Adoption of the initial recognition and initial
measurement requirements of the Interpretation did not materially impact the
Companys financial position or results of operations.

Note 2: INTANGIBLE ASSETS AND GOODWILL

Definite-lived Intangibles
The Companys definite-lived intangible assets consist primarily of transit
and street furniture contracts and other contractual rights in the outdoor
segment, talent contracts in the radio segment, and in the Companys other
segment, representation contracts for non-affiliated television and radio
stations, all of which are amortized over the respective lives of the
agreements. Other definite-lived intangible assets are amortized over the
period of time the assets are expected to contribute directly or indirectly
to the Companys future cash flows. The following table presents the gross
carrying amount and accumulated amortization for each major class of
definite-lived intangible asset at March 31, 2003 and December 31, 2002:

|                                                                |       |                |          |           |                   |              |         |         |          |       |         |              |  |   |         |         | 
|--------------------------------------------------------------- | ----- | -------------- | -------- | --------- | ----------------- | ------------ | ------- | ------- | -------- | ----- | ------- | ------------ |  | - | ------- | ------- | 
|(In thousands)                                                  |       | March 31, 2003 |          |           | December 31, 2002 |             
|                                                                |       |                |          |           |                   |             
|                                                                |       |                | Gross    |           |                   |              |         |         |          | Gross |         |              |  |   |        
|                                                                |       |                | Carrying |           |                   | Accumulated  |         |         | Carrying |       |         | Accumulated  | 
|                                                                |       |                | Amount   |           |                   | Amortization |         |         | Amount   |       |         | Amortization | 
|                                                                |       |                |          |           |                   |              |         |         |          |       |         |              | 
|Transit, street
furniture, and other
outdoor contractual
rights |       | $              | 604,911  |           |                   | $            | 241,488 |         |          | $     | 600,221 |              |  | $ | 228,037 |        
|Talent contracts                                                |       |                | 202,161  |           |                   |              | 109,792 |         |          |       | 212,326 |              |  |   | 112,259 |        
|Representation contracts                                        |       |                | 200,675  |           |                   |              | 43,542  |         |          |       | 197,636 |              |  |   | 37,846  |        
|Other                                                           |       |                | 213,332  |           |                   |              | 90,073  |         |          |       | 219,410 |              |  |   | 89,723  |        
|                                                                |       |                |          |           |                   |              |         |         |          |       |         |             
|                                                                | Total |                | $        | 1,221,079 |                   |              | $       | 484,895 |          |       | $       | 1,229,593    |  |   | $       | 467,865 | 
|                                                                |       |                |          |           |                   |              |         |         |          |       |         |             

Total amortization expense from definite-lived intangible assets for the
three months ended March 31, 2003 and for the year ended December 31, 2002
was $34.9 million and $137.1 million, respectively. The following table
presents the Companys estimate of amortization expense for each of the five
succeeding fiscal years for definite-lived intangible assets:

|               |  |   |         | 
|-------------- |  | - | ------- | 
|(In thousands) |  |   |         | 
|2004           |  | $ | 116,907 | 
|2005           |  |   | 101,906 | 
|2006           |  |   | 82,347  | 
|2007           |  |   | 58,218  | 
|2008           |  |   | 47,519  | 

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

Indefinite-lived Intangibles
In accordance with Statement of Financial Accounting Standards Statement No.
142 (Statement 142), the Company tested its FCC licenses and billboard
permits for impairment as of January 1, 2002 by comparing their fair value to
their carrying value at that date. The test resulted in no impairment to the
Companys billboard permits. However, the Company recognized impairment on
its FCC licenses of approximately $6.0 billion, net of deferred tax of $3.7
billion, which was recorded as a component of the cumulative effect of a
change in accounting principle during the three months ended March 31, 2002.
The Company used the income approach to value FCC licenses, which involved
estimating future cash flows expected to be generated from the licenses,
discounted to their present value using a risk-adjusted discount rate.
Terminal values were also estimated and discounted to their present value.
In estimating future cash flows, the Company took into account the economic
slow down in the radio industry at the end of 2001, coupled with the economic
impact of the events of September 11th.

Goodwill
Statement 142 requires the Company to test goodwill for impairment using a
two-step process. The first step is a screen for potential impairment, while
the second step measures the amount of impairment. The Company completed
the two-step impairment test during the first quarter of 2002. As a result
of this test, the Company recognized impairment of approximately $10.8
billion, net of deferred taxes of $659.1 million related to tax deductible
goodwill, as a component of the cumulative effect of a change in accounting
principle during the three months ended March 31, 2002. Consistent with the
Companys approach to fair valuing FCC licenses, the income approach was used
to determine the fair value of each of the Companys reporting units.
Throughout 2001, unfavorable economic conditions persisted in the industries
that the Company serves, which caused its customers to reduce the number of
advertising dollars spent on the Companys media inventory and live
entertainment events as compared to prior periods. These conditions
adversely impacted the cash flow projections used to determine the fair value
of each reporting unit, resulting in the write-off of a portion of goodwill.
The following table presents the changes in the carrying amount of goodwill
in each of the Companys reportable segments for the three-month period ended
March 31, 2003:

|                                |  |       |           |  |         |   |         |               |  |   |         |  |  |       |        |  |  |   |           |  
|------------------------------- |  | ----- | --------- |  | ------- | - | ------- | ------------- |  | - | ------- |  |  | ----- | ------ |  |  | - | --------- | -
|(In thousands)                  |  | Radio |           |  | Outdoor |   |         | Entertainment |  |   | Other   |  |  | Total |       
|                                |  |       |           |  |         |   |         |               |  |   |         |  |  |       |       
|Balance as of December 31, 2002 |  | $     | 6,416,146 |  |         | $ | 640,966 |               |  | $ | 155,377 |  |  | $     | 28,742 |  |  | $ | 7,241,231 |  
|Acquisitions                    |  |       | 236       |  |         |   | 5,719   |               |  |   | 80      |  |  |       |       |  |  |   | 6,035     |  
|Foreign currency                |  |       |          |  |         |   | 7,223   |               |  |   | 3,851   |  |  |       |       |  |  |   | 11,074    |  
|Adjustments                     |  |       |          |  |         |   | (235    | )             |  |   | 81      |  |  |       |       |  |  |   | (154      | )
|                                |  |       |           |  |         |   |         |               |  |   |         |  |  |       |       
|Balance as of March 31, 2003    |  | $     | 6,416,382 |  |         | $ | 653,673 |               |  | $ | 159,389 |  |  | $     | 28,742 |  |  | $ | 7,258,186 |  
|                                |  |       |           |  |         |   |         |               |  |   |         |  |  |       |       

Note 3: RECENT DEVELOPMENTS

Pending Hispanic Broadcasting Merger with Univision

On June 12, 2002, Univision Communications, Inc., a Spanish language
television group, announced that it would acquire Hispanic Broadcasting in a
stock for stock merger. Pursuant to the terms of the merger agreement, each
share of Hispanic will be exchanged for .85 shares of Univision. As the
Company currently owns 26% of Hispanic, it accounts for this investment using
the equity method of accounting. Once this merger is completed, the Company
will own less than 20% of the combined company. As a result, it will no
longer account for this investment using the equity method of accounting, but
instead will account for this investment as a cost investment. Upon the
consummation of this merger, the Company will carry this investment at its
fair market value. Assuming a market price of $24.00 per Univision share on
the date of this merger, the Company would record a pre-tax gain of
approximately $400.0 million. The merger is subject to approval by the FCC.

Recent Legal Proceedings

The Company is among the defendants in a lawsuit filed on June 12, 2002 in
the United States District Court for the Southern District of Florida by
Spanish Broadcasting System. The plaintiffs allege that the Company is in
violation of Section One and Section Two of the Sherman Antitrust Act as well
as various other claims, such as unfair trade practices and defamation, among
other counts. This case was dismissed with prejudice on January 31, 2003.
The plaintiffs have filed with the court for reconsideration.

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Note 4: RESTRUCTURING

As a result of the Companys merger with The Ackerley Group, Inc.
(Ackerley) in June 2002, the Company recorded a $40.0 million accrual
related to the restructuring of Ackerleys operations. Of the $40.0 million,
$19.0 million is related to severance and $21.0 million is related to lease
terminations. The Ackerley corporate office closed in July 2002. Also, in
connection with the Companys mergers in 2000 with SFX and AMFM, the Company
restructured the SFX and AMFM operations. The AMFM corporate offices in
Dallas and Austin, Texas were closed on March 31, 2001 and a portion of the
SFX corporate office in New York was closed on June 30, 2001. Other
operations of AMFM have either been discontinued or integrated into existing
similar operations. As of March 31, 2003, the restructuring has resulted in
the actual termination of approximately 780 employees and the pending
termination of approximately 20 more employees. The Company has recorded a
liability in purchase accounting primarily related to severance for
terminated employees and lease terminations as follows:

|                                                          |                                                                         |                    |        |        |                   |   |        |         |  
|--------------------------------------------------------- | ----------------------------------------------------------------------- | ------------------ | ------ | ------ | ----------------- | - | ------ | ------- | -
|(In thousands)                                            |                                                                         | Three Months Ended |        |        | Year ended        |  
|                                                          |                                                                         | March 31, 2003     |        |        | December 31, 2002 |  
|                                                          |                                                                         |                    |        |        |                   |   |       
|Severance and lease termination costs:                    |                                                                         |                    |        |        |                   |   |        |        
|                                                          | Accrual at January 1                                                    |                    | $      | 73,573 |                   |   | $      | 53,182  |  
|                                                          | Estimated costs charged to restructuring
accrual in purchase accounting |                    |        |       |                   |   |        | 40,043  |  
|                                                          | Adjustments to restructuring accrual                                    |                    |        |       |                   |   |        | (4,162  | )
|                                                          | Payments charged against restructuring accrual                          |                    |        | (3,366 | )                 |   |        | (15,490 | )
|                                                          |                                                                         |                    |        |        |                   |   |       
|Ending balance of severance and lease
termination accrual |                                                                         | $                  | 70,207 |        |                   | $ | 73,573 |        
|                                                          |                                                                         |                    |        |        |                   |   |       

The remaining severance and lease accrual is comprised of $42.2 million of
severance and $28.0 million of lease termination. The severance accrual
includes amounts that will be paid over the next several years related to
deferred payments to former employees as well as other compensation. The
lease termination accrual will be paid over the next five years. During the
quarter ended March 31, 2003, $2.6 million was paid and charged to the
restructuring reserve related to severance. The purchase price allocation
related to the Ackerley merger will be finalized during the second quarter of
2003. All adjustments have been, and any future potential excess reserves
will be recorded as an adjustment to the purchase price.

Note 5: COMMITMENTS AND CONTINGENCIES

Certain agreements relating to acquisitions provide for purchase price
adjustments and other future contingent payments based on the financial
performance of the acquired companies. The Company will continue to accrue
additional amounts related to such contingent payments if and when it is
determinable that the applicable financial performance targets will be met.
The aggregate of these contingent payments, if performance targets are met,
would not significantly impact the financial position or results of
operations of the Company.

There are various lawsuits and claims pending against the Company. The
Company believes that any ultimate liability resulting from those actions or
claims will not have a material adverse effect on the results of operations,
financial position or liquidity of the Company.

Note 6: GUARANTEES

As of March 31, 2003, the Company guaranteed third party debt of
approximately $98.5 million. The guarantees arose primarily in 2000 in
conjunction with the Company entering into long-term contracts with third
parties. The guarantees will terminate on the earlier of the sale of the
underlying assets or September 2004. The operating assets associated with
these contracts secure the debt that the Company has guaranteed. Only to the
extent that the assets are either sold by the third-party for less than the
guaranteed amount or the third party is unable to service the debt will the
Company be required to make a cash payment under the guarantee. As of March
31, 2003, management does not believe that it is probable that the Company
will be required to make a payment under these guarantees. Thus, as of March
31, 2003, the guarantees associated with long-term operating contracts are
not recorded on the Companys financial statements. These guarantees are
included in the Companys calculation of its leverage ratio covenant under
the bank credit facilities. During the three months ended March 31, 2003,
the Company did not enter into any new guarantees of third party debt.

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The Company has provided a guarantee under a certain performance contract of
approximately $77.4 million that expires in 2004. As of March 31, 2003, the
remaining amount of the guarantee is $40.9 million. Under this guarantee, if
the amount collected from the third parties that receive the benefit under
the performance contract does not exceed the guarantee amount, the Company
must make payment for the shortfall. During the first quarter of 2003, under
this guarantee, the Company made payments of $4.0 million. As of March 31,
2003, the Company has a liability recorded and classified in Other current
liabilities on its financial statements of approximately $.2 million for
unpaid shortfalls under this guarantee for the contract period of 2002. As
of March 31, 2003, the Company cannot reasonably estimate whether it will
have to make any future payments under this guarantee for the 2003 and 2004
contract periods. As such, possible losses on this executory performance
contract will be appropriately recorded in the period that they are incurred.
During the three months ended March 31, 2003, the Company did not enter into
any new performance contracts.

The Company guarantees a $150.0 million five-year revolving credit facility
between its international subsidiary and a group of international banks. The
credit facility expires in 2005. The facility allows for borrowings in
various foreign currencies, which are used to hedge net assets in those
currencies and provides funds to the Companys international operations for
certain working capital needs. At March 31, 2003, the outstanding balance on
the credit facility was $83.1 million. The outstanding balance on the credit
facility is recorded in Long-term debt on the Companys financial
statements.

AMFM Operating Inc., an indirect wholly-owned subsidiary of the Company, has
guaranteed a portion of the Companys bank credit facilities including the
reducing revolving line of credit facility, the $1.5 billion five-year
multi-currency revolving credit facility and the $1.5 billion three-year term
loan with outstanding balances at March 31, 2003, of $-0- million, $1.6
million, and $1.5 billion, respectively. At March 31, 2003, the contingent
liability under these guarantees was $1.0 billion. At March 31, 2003, these
outstanding balances are recorded in Long-term debt on the Companys
financial statements.

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

The Company currently has guarantees that provide protection to its
international subsidiarys banking institutions related to overdraft lines
and credit card charge-back transactions up to approximately $61.6 million.
As of March 31, 2003, no amounts were outstanding under these agreements.

As of March 31, 2003, the Company has outstanding commercial standby letters
of credit and surety bonds of $115.3 million and $35.2 million, respectively,
that primarily expire in 2003 and 2004. These letters of credit and surety
bonds relate to various operational matters including insurance, bid, and
performance bonds as well as other items. These letters of credit reduce the
borrowing availability on the Companys bank credit facilities, and are
included in the Companys calculation of its leverage ratio covenant under
the bank credit facilities. The surety bonds are not considered as
borrowings under the Companys bank credit facilities.

Note 7: OTHER

The results of operations for the three months ended March 31, 2002 do not
include the operations of Ackerley which the Company acquired on June 14,
2002. Unaudited pro forma consolidated results of operations for the three
months ended March 31, 2002, assuming the Ackerley acquisition had occurred
on January 1, 2002 would have been as follows:

|                                                                                               |  |   |             |  
|---------------------------------------------------------------------------------------------- |  | - | ----------- | -
|(In thousands, except per share data)                                                          |  |   |             |  
|Revenue                                                                                        |  | $ | 1,737,089   |  
|Income before cumulative effect of a change in accounting
principle                            |  |   | 81,849      |  
|Net loss                                                                                       |  |   | (16,696,677 | )
|                                                                                               |  |   |             |  
|Income before cumulative effect of a change in accounting
principle per common share - Basic   |  | $ | .13         |  
|Net loss per common share - Basic                                                              |  | $ | (27.32      | )
|Income before cumulative effect of a change in accounting
principle per common share - Diluted |  | $ | .13         |  
|Net loss per common share - Diluted                                                            |  | $ | (27.10      | )

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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 merger
occurred at the beginning of 2002, nor is it indicative of future results of
operations.

Note 8: SEGMENT DATA

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

|                                  |  |              |            |  |             |   |           |               |  |   |           |   |  |           |           |  |              |   |         |              |  |   |         |   |  |   |            | 
|--------------------------------- |  | ------------ | ---------- |  | ----------- | - | --------- | ------------- |  | - | --------- | - |  | --------- | --------- |  | ------------ | - | ------- | ------------ |  | - | ------- | - |  | - | ---------- | 
|(In thousands)                    |  | Radio        |            |  | Outdoor     |   |           | Live          |  |   |           |   |  |           |           |  |              |   |         |              |  |   |         |   | 
|                                  |  | Broadcasting |            |  | Advertising |   |           | Entertainment |  |   | Other     |   |  | Corporate |           |  | Eliminations |   |         | Consolidated | 
|                                  |  |              |            |  |             |   |           |               |  |   |           |   |  |           |           |  |              |   |         |              | 
|Three Months Ended March 31, 2003 |  |              |            |  |             |   |           |               |  |   |           |   |  |           |           | 
|Revenue                           |  | $            | 795,034    |  |             | $ | 450,528   |               |  | $ | 437,882   |   |  | $         | 125,418   |  |              | $ |        |              |  | $ | (29,419 | ) |  | $ | 1,779,443  | 
|Divisional operating expenses     |  |              | 495,104    |  |             |   | 364,709   |               |  |   | 421,136   |   |  |           | 109,545   |  |              |   |        |              |  |   | (29,419 | ) |  |   | 1,361,075  | 
|Non-cash compensation             |  |              | 516        |  |             |   |          |               |  |   |          |   |  |           |          |  |              |   | 283     |              |  |   |        |   |  |   | 799        | 
|Depreciation and amortization     |  |              | 37,300     |  |             |   | 88,966    |               |  |   | 14,819    |   |  |           | 12,497    |  |              |   | 5,980   |              |  |   |        |   |  |   | 159,562    | 
|Corporate expenses                |  |              |           |  |             |   |          |               |  |   |          |   |  |           |          |  |              |   | 42,779  |              |  |   |        |   |  |   | 42,779     | 
|                                  |  |              |            |  |             |   |           |               |  |   |           |   |  |           |           |  |              |   |         |              | 
|Operating income (loss)           |  | $            | 262,114    |  |             | $ | (3,147    | )             |  | $ | 1,927     |   |  | $         | 3,376     |  |              | $ | (49,042 | )            |  | $ |        |   |  | $ | 215,228    | 
|                                  |  |              |            |  |             |   |           |               |  |   |           |   |  |           |           |  |              |   |         |              | 
|                                  |  |              |            |  |             |   |           |               |  |   |           |   |  |           |           |  |              |   |         |              |  |   |         |   |  |   |            | 
|Identifiable assets               |  | $            | 19,689,777 |  |             | $ | 4,609,656 |               |  | $ | 1,334,580 |   |  | $         | 1,388,708 |  |              | $ | 738,272 |              |  | $ |        |   |  | $ | 27,760,993 | 
|Capital expenditures              |  | $            | 10,636     |  |             | $ | 39,776    |               |  | $ | 9,846     |   |  | $         | 3,754     |  |              | $ | 420     |              |  | $ |        |   |  | $ | 64,432     | 
|                                  |  |              |            |  |             |   |           |               |  |   |           |   |  |           |           |  |              |   |         |              |  |   |         |   |  |   |            | 
|Three Months Ended March 31, 2002 |  |              |            |  |             |   |           |               |  |   |           |   |  |           |           | 
|Revenue                           |  | $            | 782,823    |  |             | $ | 369,165   |               |  | $ | 475,785   |   |  | $         | 101,405   |  |              | $ |        |              |  | $ | (31,191 | ) |  | $ | 1,697,987  | 
|Divisional operating expenses     |  |              | 479,258    |  |             |   | 294,587   |               |  |   | 460,779   |   |  |           | 85,544    |  |              |   |        |              |  |   | (31,191 | ) |  |   | 1,288,977  | 
|Non-cash compensation             |  |              | 1,460      |  |             |   |          |               |  |   |          |   |  |           |          |  |              |   | 378     |              |  |   |        |   |  |   | 1,838      | 
|Depreciation and amortization     |  |              | 36,507     |  |             |   | 74,672    |               |  |   | 16,264    |   |  |           | 9,007     |  |              |   | 5,968   |              |  |   |        |   |  |   | 142,418    | 
|Corporate expenses                |  |              |           |  |             |   |          |               |  |   |          |   |  |           |          |  |              |   | 38,969  |              |  |   |        |   |  |   | 38,969     | 
|                                  |  |              |            |  |             |   |           |               |  |   |           |   |  |           |           |  |              |   |         |              | 
|Operating income (loss)           |  | $            | 265,598    |  |             | $ | (94       | )             |  | $ | (1,258    | ) |  | $         | 6,854     |  |              | $ | (45,315 | )            |  | $ |        |   |  | $ | 225,785    | 
|                                  |  |              |            |  |             |   |           |               |  |   |           |   |  |           |           |  |              |   |         |              | 
|                                  |  |              |            |  |             |   |           |               |  |   |           |   |  |           |           |  |              |   |         |              |  |   |         |   |  |   |            | 
|Identifiable assets               |  | $            | 19,584,644 |  |             | $ | 3,639,863 |               |  | $ | 1,320,851 |   |  | $         | 1,263,437 |  |              | $ | 490,936 |              |  | $ |        |   |  | $ | 26,299,731 | 
|Capital expenditures              |  | $            | 17,981     |  |             | $ | 65,226    |               |  | $ | 12,284    |   |  | $         | 3,842     |  |              | $ | 9,317   |              |  | $ |        |   |  | $ | 108,650    | 

Net revenue of $333.4 million and $275.9 million and identifiable assets of
$2.2 billion and $1.7 billion were derived from the Companys foreign
operations and are included in the March 31, 2003 and 2002 data above,
respectively.

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

OVERVIEW

Managements discussion and analysis of the results of operation and
financial condition of Clear Channel Communications, Inc. and its subsidiaries
should be read in conjunction with the Consolidated Financial Statements and
related Footnotes. The discussion is presented on both a consolidated and
segment basis. Our reportable operating segments are: Radio Broadcastingwhich
includes all domestic and international radio assets and radio networks;
Outdoor Advertisingwhich includes domestic and international billboards,
transit displays, street furniture and other outdoor advertising media; and
Live Entertainmentwhich includes live music, theatrical, family entertainment
and motor sports events. Included in the other segment are television
broadcasting, sports representation and our media representation business, Katz
Media.

RESULTS OF OPERATIONS

We evaluate the operating performance of our businesses using several
measures, one of them being EBITDA as Adjusted (defined as revenue less
divisional operating and corporate expenses). EBITDA as Adjusted eliminates
the uneven effect of such charges as depreciation and amortization,
non-operating gains and losses, income taxes and interest across our business
segments, as well as in comparison to other companies. While we and many in
the financial community consider EBITDA as Adjusted to be an important measure
of operating performance, it should be considered in addition to, but not as a
substitute for or superior to, other measures of financial performance prepared
in accordance with generally accepted accounting principles such as operating
income and net income. In addition, our definition of EBITDA as Adjusted is
not necessarily comparable to similarly titled measures reported by other
companies.

We measure the performance of our operating segments and managers based on
a pro forma measurement that includes adjustments to the prior period for all
current and prior year acquisitions. Adjustments are made to the prior period
to include the operating results of the acquisition for the corresponding
period of time that the acquisition was owned in the current period. In
addition, results of operations from divested assets are excluded from all
periods presented. We believe this pro forma presentation is the best
comparable measure of our operating performance as it includes the performance
of assets for the period of time we managed the assets.

Our pro forma results are presented in constant U.S. dollars by adjusting
our international functional currencies at constant exchange rates for both
periods presented allowing for comparison of operations independent of foreign
exchange movements.

The following tables set forth our consolidated and segment results of
operations on both a reported and a pro forma basis.

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Comparison of Three Months Ended March 31, 2003 to Three Months Ended March
31, 2002.

Consolidated

|                                                                    |                                                  |                              |           |          |          |      |             |          |              |  |    |    | 
|------------------------------------------------------------------- | ------------------------------------------------ | ---------------------------- | --------- | -------- | -------- | ---- | ----------- | -------- | ------------ |  | -- | -- | 
|(In thousands)                                                      |                                                  | Three Months Ended March 31, |           |          |          |      |            
|                                                                    |                                                  |                              |           |          | % Change |     
|                                                                    |                                                  |                              | 2003      |          |          | 2002 |             |          | 2003 v. 2002 | 
|                                                                    |                                                  |                              |           |          |          |      |             |          |              | 
|Reported Basis:                                                     |                                                  |                              |           |          |          |      |             |          |              |  |    |   
|Revenue                                                             |                                                  | $                            | 1,779,443 |          |          | $    | 1,697,987   |          |              |  | 5  | % 
|Divisional Operating Expenses                                       |                                                  |                              | 1,361,075 |          |          |      | 1,288,977   |          |              |  | 6  | % 
|Corporate Expenses                                                  |                                                  |                              | 42,779    |          |          |      | 38,969      |          |              |  | 10 | % 
|                                                                    |                                                  |                              |           |          |          |      |             |          |              | 
|EBITDA as Adjusted *                                                |                                                  |                              | 375,589   |          |          |      | 370,041     |          |              |  | 1  | % 
|                                                                    |                                                  |                              |           |          |          |      |             |          |              | 
|                                                                    |                                                  |                              |           |          |          |      |             |          |              |  |    |   
|Reconciliation to net income (loss):                                |                                                  |                              |           |          |          |      |             |          |              |  |    |   
|                                                                    | Non-cash compensation expense                    |                              |           | 799      |          |      |             | 1,838    |              |  |    |    | 
|                                                                    | Depreciation and amortization                    |                              |           | 159,562  |          |      |             | 142,418  |              |  |    |    | 
|                                                                    | Interest expense                                 |                              |           | 100,952  |          |      |             | 110,367  |              |  |    |    | 
|                                                                    | Gain (loss) on sale of assets related to mergers |                              |           |         |          |      |             | 3,991    |              |  |    |    | 
|                                                                    | Gain (loss) on marketable securities             |                              |           | 2,792    |          |      |             | 2,984    |              |  |    |    | 
|                                                                    | Equity in earnings of nonconsolidated affiliates |                              |           | 2,335    |          |      |             | 3,213    |              |  |    |    | 
|                                                                    | Other income (expense) - net                     |                              |           | 2        |          |      |             | 26,207   |              |  |    |    | 
|                                                                    | Income tax benefit (expense) - current           |                              |           | 17,995   |          |      |             | 6,593    |              |  |    |    | 
|                                                                    | Income tax benefit (expense) - deferred          |                              |           | (66,354  | )        |      |             | (68,077  | )            |  |    |    | 
|                                                                    |                                                  |                              |           |          |          |      |             |          |              | 
|Income before cumulative effect of a change in
accounting principle |                                                  |                              | 71,046    |          |          |      | 90,329      |          |              |  |    |   
|Cumulative effect of a change in accounting
principle               |                                                  |                              |          |          |          |      | (16,778,526 | )        |              |  |    |   
|                                                                    |                                                  |                              |           |          |          |      |             |          |              | 
|Net income (loss)                                                   |                                                  | $                            | 71,046    |          |          | $    | (16,688,197 | )        |              |  |    |   
|                                                                    |                                                  |                              |           |          |          |      |             |          |              | 
|                                                                    |                                                  |                              |           |          |          |      |             |          |              |  |    |   
|* See page 13 for cautionary disclosure                             |                                                  |                              |           |          |          |      |             |          |              |  |    |   
|                                                                    |                                                  |                              |           |          |          |      |             |          |              |  |    |   
|Other Data:                                                         |                                                  |                              |           |          |          |      |             |          |              |  |    |   
|                                                                    |                                                  |                              |           |          |          |      |             |          |              | 
|                                                                    | Cash Flow from Operating Activities              |                              | $         | 435,842  |          |      | $           | 449,853  |              |  |    |    | 
|                                                                    |                                                  |                              |           |          |          |      |             |          |              | 
|                                                                    | Cash Flow from Investing Activities              |                              | $         | (97,390  | )        |      | $           | (137,764 | )            |  |    |    | 
|                                                                    |                                                  |                              |           |          |          |      |             |          |              | 
|                                                                    | Cash Flow from Financing Activities              |                              | $         | (159,296 | )        |      | $           | (284,892 | )            |  |    |    | 
|                                                                    |                                                  |                              |           |          |          |      |             |          |              | 
|                                                                    |                                                  |                              |           |          |          |      |             |          |              |  |    |   
|Pro Forma Basis:                                                    |                                                  |                              |           |          |          |      |             |          |              |  |    |   
|Revenue                                                             |                                                  | $                            | 1,728,798 |          |          | $    | 1,734,612   |          |              |  | 0  | % 
|Divisional Operating Expenses                                       |                                                  |                              | 1,312,657 |          |          |      | 1,328,171   |          |              |  | (1 | %)
|                                                                    |                                                  |                              |           |          |          |      |             |          |              |  |    |   
|Reconciliation of Reported Basis to Pro Forma Basis                 |                                                  |                              |           |          |          |      |             |          |              |  |    |   
|Reported Revenue                                                    |                                                  | $                            | 1,779,443 |          |          | $    | 1,697,987   |          |              |  |    |   
|                                                                    | Acquisitions                                     |                              |           |         |          |      |             | 49,195   |              |  |    |    | 
|                                                                    | Divestitures                                     |                              |           | (8       | )        |      |             | (12,570  | )            |  |    |    | 
|                                                                    | Foreign Exchange adjustments                     |                              |           | (50,637  | )        |      |             |         |              |  |    |    | 
|                                                                    |                                                  |                              |           |          |          |      |             |          |              | 
|Pro Forma Revenue                                                   |                                                  | $                            | 1,728,798 |          |          | $    | 1,734,612   |          |              |  |    |   
|                                                                    |                                                  |                              |           |          |          |      |             |          |              | 
|                                                                    |                                                  |                              |           |          |          |      |             |          |              |  |    |   
|Reported Divisional Operating Expenses                              |                                                  | $                            | 1,361,075 |          |          | $    | 1,288,977   |          |              |  |    |   
|                                                                    | Acquisitions                                     |                              |           |         |          |      |             | 48,883   |              |  |    |    | 
|                                                                    | Divestitures                                     |                              |           | (85      | )        |      |             | (9,689   | )            |  |    |    | 
|                                                                    | Foreign Exchange adjustments                     |                              |           | (48,333  | )        |      |             |         |              |  |    |    | 
|                                                                    |                                                  |                              |           |          |          |      |             |          |              | 
|Pro Forma Divisional Operating Expenses                             |                                                  | $                            | 1,312,657 |          |          | $    | 1,328,171   |          |              |  |    |   
|                                                                    |                                                  |                              |           |          |          |      |             |          |              | 

Consolidated Revenue and Divisional Operating Expenses          On
a reported basis, revenue increased $81.5 million for the three
months ended March 31, 2003 from the same period of 2002. The reported basis
revenue increase is primarily attributable to foreign exchange gains of $50.6
million as well as acquisitions, the most significant of which was our
acquisition of Ackerley in June 2002. Ackerley contributed approximately
$40.6 million in reported basis revenue for the three months ended March 31,
2003. Also, excluding the impact of the Ackerley acquisition and foreign
exchange movements, our radio, outdoor and other operating segments posted
reported revenue gains of

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$7.8 million, $27.6 million and $3.2 million, respectively, for the
three months ended March 31, 2003 compared to the same time period in 2002.
These gains were offset by reported basis revenue declines of $50.2 million
in our live entertainment operating segment, excluding foreign exchange
movements.

On a pro forma basis, revenue decreased $5.8 million for the first
quarter of 2003 from the same period of 2002. We saw pro forma basis revenue
declines in our live entertainment segment, offset by a pro forma revenue
increase in our outdoor operating segment. Pro forma revenue for our radio
operating segment was flat.

Our live entertainment segment experienced a 9% pro forma revenue
decline. Foreign exchange movements of $12.3 million as well as lower ticket
revenue caused the decline. The ticket revenue decline was principally
attributable to the mix of events in the current year as compared to the
prior year.

Our outdoor operating segment experienced an 8% pro forma revenue
increase in the first three months of 2003 compared to the same period in
2002. Rates and occupancy on the majority of our outdoor inventory were up
in the first quarter of 2003 compared to the same period of 2002. We saw pro
forma revenue growth in most of our domestic markets, with pro forma revenue
from our top 25 markets up 13% in the three months ended March 31, 2003
compared to the same time period of 2002. Internationally, our best
performing markets were the United Kingdom, Italy and Australia.

Pro forma revenue from our radio operating segment was flat in the first
three months of 2003 compared to the same period of 2002. We did see 4%
growth in our national advertising revenue, but this was offset by a 1%
decline in our local advertising revenue. National advertising categories
such as retail, auto, telecom/utility and finance were the most resilient in
the first quarter of 2003 compared to the same period in 2002. As a whole,
our larger radio markets experienced greater pro forma revenue increases than
our smaller markets during the first three months of 2003 compared to 2002.

On a reported basis, divisional operating expenses increased $72.1
million for the three months ended March 31, 2003 as compared to the same
period of 2002. The reported basis divisional operating expense increase is
primarily attributable to foreign exchange movements of $48.3 million as well
as acquisitions, the most significant of which was our acquisition of
Ackerley. Ackerley contributed approximately $34.2 million in reported basis
divisional operating expense for the three months ended March 31, 2003.
Also, excluding the impact of the Ackerley acquisition and foreign exchange
movements, our radio, outdoor and other operating segments posted divisional
operating expense increases of $12.0 million, $24.2 million and $3.4 million,
respectively, for the first quarter of 2003 compared to the same period in
2002. These increases were offset by divisional operating expense declines
of $51.7 million in our live entertainment operating segment, excluding
foreign exchange movements.

On a pro forma basis, divisional operating expenses decreased $15.5
million for the three months ended March 31, 2003 as compared to the same
period of 2002. This decrease is related to a decline of $46.5 million
associated with variable expense and talent fee declines in our live
entertainment operating segment, partially offset by increases in our radio,
outdoor and other operating segments pro forma divisional operating expenses
of $6.4 million, $20.2 million, and $2.6 million, respectively.

Corporate Expenses          Corporate
expense increased $3.8 million for the three months ended
March 31, 2003 as compared to the same period of 2002. This increase
resulted from additional expenses related to outside legal and other
consulting services that we incurred during the first quarter of 2003.

Depreciation and Amortization          Depreciation
and amortization expense increased $17.1 million for the
three months ended March 31, 2003 as compared to the same period of 2002.
The increase is primarily related to a $14.3 million increase in our outdoor
operating segment resulting from prior year capital expenditures in our
international outdoor business associated with revenue producing assets as
well as accelerated depreciation recorded on display takedowns and
abandonments in our domestic outdoor business.

Interest Expense          Interest
expense was $101.0 million and $110.4 million for the three
months ended March 31, 2003 and 2002, respectively, a decrease of $9.4
million. The decrease in interest expense for the three months ended March
31, 2003 was due to an overall decrease in LIBOR rates as well as a decrease
in our total debt outstanding. At March 31, 2003 and 2002, LIBOR was
approximately 1.32% and 1.88% and outstanding debt was $8.6 billion and $9.1
billion, respectively.

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Gain (loss) on Sale of Assets Related to Mergers          During
the three months ended March 31, 2002, a $4.0 million gain on
sale of assets related to mergers was recorded relating to the sale of
791,000 shares of Entravision Corporation that we acquired in the AMFM
merger.

Other Income (Expense) - Net          For
the three months ended March 31, 2003, other income (expense)  net
was income of $2.0 thousand as compared to $26.2 million for the same period
of 2002. The income recognized for the three months ended March 31, 2003
related to $1.8 million related to the extinguishment of debt and a $.9
million net gain on other miscellaneous items, offset by a loss of $2.5
million on the sale of radio assets. The income recognized during the first
quarter of 2002 primarily related to a gain of $17.9 million recognized on
the sale of a television license and a gain of $6.3 million recognized
related to the early extinguishment of debt.

Cumulative Effect of a Change in Accounting Principle          The
loss recorded as a cumulative effect of a change in accounting
principle during the three months ended March 31, 2002 relates to our
adoption of FAS 142 on January 1, 2002. FAS 142 required that we test
goodwill and indefinite-lived intangibles for impairment using a fair value
approach. As a result of the goodwill test, we recorded a non-cash, net of
tax, impairment charge of approximately $10.8 billion. Also, as a result of
the indefinite-lived intangible test, we recorded a non-cash, net of tax,
impairment charge on our FCC licenses of approximately $6.0 billion.

The non-cash impairments of our goodwill and FCC licenses were generally
caused by unfavorable economic conditions, which persisted in the industries
we served throughout 2001. This weakness contributed to our customers
reducing the number of advertising dollars spent on our media inventory and
live entertainment events. These conditions adversely impacted the cash flow
projections used to determine the fair value of our licenses and each
reporting unit. These factors resulted in the non-cash impairment charge of
a portion of our licenses and goodwill.

Segment Revenue and Divisional Operating Expenses

Radio Broadcasting

|                                                    |                              |                              |         |     |   |      |         |       |        |  |    |    | 
|--------------------------------------------------- | ---------------------------- | ---------------------------- | ------- | --- | - | ---- | ------- | ----- | ------ |  | -- | -- | 
|(In thousands)                                      |                              | Three Months Ended March 31, |         |     |   |      |        
|                                                    |                              |                              |         |     | % |     
|                                                    |                              |                              | 2003    |     |   | 2002 |         |       | Change | 
|                                                    |                              |                              |         |     |   |      |         |       |        | 
|Reported Basis:                                     |                              |                              |         |     |   |      |         |       |        |  |    |   
|Revenue                                             |                              | $                            | 795,034 |     |   | $    | 782,823 |       |        |  | 2  | % 
|Divisional Operating Expenses                       |                              |                              | 495,104 |     |   |      | 479,258 |       |        |  | 3  | % 
|                                                    |                              |                              |         |     |   |      |         |       |        | 
|EBITDA as Adjusted *                                |                              | $                            | 299,930 |     |   | $    | 303,565 |       |        |  | (1 | %)
|                                                    |                              |                              |         |     |   |      |         |       |        | 
|                                                    |                              |                              |         |     |   |      |         |       |        |  |    |   
|* See page 13 for cautionary disclosure             |                              |                              |         |     |   |      |         |       |        |  |    |   
|                                                    |                              |                              |         |     |   |      |         |       |        |  |    |   
|                                                    |                              |                              |         |     |   |      |         |       |        |  |    |   
|Pro Forma Basis:                                    |                              |                              |         |     |   |      |         |       |        |  |    |   
|Revenue                                             |                              | $                            | 795,026 |     |   | $    | 792,214 |       |        |  | 0  | % 
|Divisional Operating Expenses                       |                              |                              | 495,019 |     |   |      | 488,657 |       |        |  | 1  | % 
|                                                    |                              |                              |         |     |   |      |         |       |        |  |    |   
|                                                    |                              |                              |         |     |   |      |         |       |        |  |    |   
|Reconciliation of Reported Basis to Pro Forma Basis |                              |                              |         |     |   |      |         |      
|Reported Revenue                                    |                              | $                            | 795,034 |     |   | $    | 782,823 |       |        |  |    |   
|                                                    | Acquisitions                 |                              |         |    |   |      |         | 9,487 |        |  |    |    | 
|                                                    | Divestitures                 |                              |         | (8  | ) |      |         | (96   | )      |  |    |    | 
|                                                    | Foreign Exchange adjustments |                              |         |    |   |      |         |      |        |  |    |    | 
|                                                    |                              |                              |         |     |   |      |         |       |        | 
|Pro Forma Revenue                                   |                              | $                            | 795,026 |     |   | $    | 792,214 |       |        |  |    |   
|                                                    |                              |                              |         |     |   |      |         |       |        | 
|                                                    |                              |                              |         |     |   |      |         |       |        |  |    |   
|Reported Divisional Operating Expenses              |                              | $                            | 495,104 |     |   | $    | 479,258 |       |        |  |    |   
|                                                    | Acquisitions                 |                              |         |    |   |      |         | 9,560 |        |  |    |    | 
|                                                    | Divestitures                 |                              |         | (85 | ) |      |         | (161  | )      |  |    |    | 
|                                                    | Foreign Exchange adjustments |                              |         |    |   |      |         |      |        |  |    |    | 
|                                                    |                              |                              |         |     |   |      |         |       |        | 
|Pro Forma Divisional Operating Expenses             |                              | $                            | 495,019 |     |   | $    | 488,657 |       |        |  |    |   
|                                                    |                              |                              |         |     |   |      |         |       |        | 

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Reported basis revenue increased 2%, or $12.2 million for the three
months ended March 31, 2003 as compared to the same period of 2002. The
increase is largely attributable to acquisitions, the largest being Ackerley
in June of 2002, which included 4 radio stations.

Pro forma revenues for the three months ended March 31, 2003 were
essentially flat as compared to the same period of 2002. On a pro forma
basis, the top 25 markets grew revenue 2% during the current quarter as
compared to the same quarter of the prior year. During the three months
ended March 31, 2003, our national revenue grew faster than our local revenue
as compared to 2002. Strong national revenue categories in the first quarter
of 2003 were retail, telecom/utility, entertainment, auto and finance. We
also saw stronger revenues in our national syndication business.

Reported basis divisional operating expenses increased $15.8 million for
the three months ended March 31, 2003 as compared to the same period of 2002.
The increase is primarily attributable to acquisitions, the largest being
the stations acquired with Ackerley in June of 2002. Also contributing to the
divisional operating expense growth in the first quarter of 2003 was a $4.0
million increase in promotional expenses relating to format changes and
continued investment spending in our brands.

Outdoor Advertising

|                                                    |                              |                              |         |         |   |      |         |        |        |  |    |   | 
|--------------------------------------------------- | ---------------------------- | ---------------------------- | ------- | ------- | - | ---- | ------- | ------ | ------ |  | -- | - | 
|(In thousands)                                      |                              | Three Months Ended March 31, |         |         |   |      |        
|                                                    |                              |                              |         |         | % |     
|                                                    |                              |                              | 2003    |         |   | 2002 |         |        | Change | 
|                                                    |                              |                              |         |         |   |      |         |        |        | 
|Reported Basis:                                     |                              |                              |         |         |   |      |         |        |        |  |    |  
|Revenue                                             |                              | $                            | 450,528 |         |   | $    | 369,165 |        |        |  | 22 | %
|Divisional Operating Expenses                       |                              |                              | 364,709 |         |   |      | 294,587 |        |        |  | 24 | %
|                                                    |                              |                              |         |         |   |      |         |        |        | 
|EBITDA as Adjusted *                                |                              | $                            | 85,819  |         |   | $    | 74,578  |        |        |  | 15 | %
|                                                    |                              |                              |         |         |   |      |         |        |        | 
|                                                    |                              |                              |         |         |   |      |         |        |        |  |    |  
|* See page 13 for cautionary disclosure             |                              |                              |         |         |   |      |         |        |        |  |    |  
|                                                    |                              |                              |         |         |   |      |         |        |        |  |    |  
|                                                    |                              |                              |         |         |   |      |         |        |        |  |    |  
|Pro Forma Basis:                                    |                              |                              |         |         |   |      |         |        |        |  |    |  
|Revenue                                             |                              | $                            | 412,157 |         |   | $    | 383,255 |        |        |  | 8  | %
|Divisional Operating Expenses                       |                              |                              | 328,467 |         |   |      | 308,300 |        |        |  | 7  | %
|                                                    |                              |                              |         |         |   |      |         |        |        |  |    |  
|                                                    |                              |                              |         |         |   |      |         |        |        |  |    |  
|Reconciliation of Reported Basis to Pro Forma Basis |                              |                              |         |         |   |      |         |       
|Reported Revenue                                    |                              | $                            | 450,528 |         |   | $    | 369,165 |        |        |  |    |  
|                                                    | Acquisitions                 |                              |         |        |   |      |         | 15,847 |        |  |    |   | 
|                                                    | Divestitures                 |                              |         |        |   |      |         | (1,757 | )      |  |    |   | 
|                                                    | Foreign Exchange adjustments |                              |         | (38,371 | ) |      |         |       |        |  |    |   | 
|                                                    |                              |                              |         |         |   |      |         |        |        | 
|Pro Forma Revenue                                   |                              | $                            | 412,157 |         |   | $    | 383,255 |        |        |  |    |  
|                                                    |                              |                              |         |         |   |      |         |        |        | 
|                                                    |                              |                              |         |         |   |      |         |        |        |  |    |  
|Reported Divisional Operating Expenses              |                              | $                            | 364,709 |         |   | $    | 294,587 |        |        |  |    |  
|                                                    | Acquisitions                 |                              |         |        |   |      |         | 15,576 |        |  |    |   | 
|                                                    | Divestitures                 |                              |         |        |   |      |         | (1,863 | )      |  |    |   | 
|                                                    | Foreign Exchange adjustments |                              |         | (36,242 | ) |      |         |       |        |  |    |   | 
|                                                    |                              |                              |         |         |   |      |         |        |        | 
|Pro Forma Divisional Operating Expenses             |                              | $                            | 328,467 |         |   | $    | 308,300 |        |        |  |    |  
|                                                    |                              |                              |         |         |   |      |         |        |        | 

Reported and pro forma basis revenue increased $81.4 million and $28.9
million for the three months ended March 31, 2003, respectively, as compared
to the same period of 2002. The reported basis increase is partially
attributable to acquisitions, the largest being Ackerley, which included 3
markets. These markets contributed approximately $15.4 million to revenue in
the first quarter of 2003. Also, the devaluation of the dollar relative to
our international functional currencies contributed approximately $38.4
million to the reported basis revenue increase.

Domestically, we experienced broad based revenue increases across our
markets and our products in the first three months of 2003 compared to the
first three months of 2002 on both a reported and pro forma basis. The
majority of our domestic markets showed positive revenue growth, with our top
25 markets up 13% on a pro forma basis. Our domestic poster, bulletin and
transit revenue showed positive growth, with occupancy on each up in the
first three months of 2003 compared to the first three months of 2002. Rates
also increased during this same time for our posters and bulletins.

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During the first three months of 2003 we experienced pro forma revenue
increases on our international street furniture and transit revenue, offset
by pro forma revenue declines on our international billboards compared to the
first three months of 2002. During the first quarter of 2003 our inventory
of international transit and billboard displays remained about the same, but
we increased our inventory of international street furniture displays
compared to the first quarter of 2002. Revenue per board was up on our
international street furniture, billboards and transit inventory in the first
three months of 2003 compared to the same period of 2002. The United
Kingdom, Italy and Australia were our strongest performing international
markets.

Both reported and pro forma divisional operating expenses increased
$70.1 million and $20.2 million, respectively, for the three months ended
March 31, 2003 as compared to the same period of 2002. Ackerley contributed
approximately $9.7 million in reported divisional operating expense during
the first three months 2003. Also, the devaluation of the dollar contributed
approximately $36.2 million to the reported divisional operating expense
increase. The remaining increase to the reported and pro forma divisional
operating expense is primarily attributable to variable costs associated with
the increase in revenue.

Live Entertainment

|                                                    |                              |                              |         |         |   |      |         |        |        |  |     |    | 
|--------------------------------------------------- | ---------------------------- | ---------------------------- | ------- | ------- | - | ---- | ------- | ------ | ------ |  | --- | -- | 
|(In thousands)                                      |                              | Three Months Ended March 31, |         |         |   |      |        
|                                                    |                              |                              |         |         | % |     
|                                                    |                              |                              | 2003    |         |   | 2002 |         |        | Change | 
|                                                    |                              |                              |         |         |   |      |         |        |        | 
|Reported Basis:                                     |                              |                              |         |         |   |      |         |        |        |  |     |   
|Revenue                                             |                              | $                            | 437,882 |         |   | $    | 475,785 |        |        |  | (8  | %)
|Divisional Operating Expenses                       |                              |                              | 421,136 |         |   |      | 460,779 |        |        |  | (9  | %)
|                                                    |                              |                              |         |         |   |      |         |        |        | 
|EBITDA as Adjusted *                                |                              | $                            | 16,746  |         |   | $    | 15,006  |        |        |  | 12  | % 
|                                                    |                              |                              |         |         |   |      |         |        |        | 
|                                                    |                              |                              |         |         |   |      |         |        |        |  |     |   
|* See page 13 for cautionary disclosure             |                              |                              |         |         |   |      |         |        |        |  |     |   
|                                                    |                              |                              |         |         |   |      |         |        |        |  |     |   
|                                                    |                              |                              |         |         |   |      |         |        |        |  |     |   
|Pro Forma Basis:                                    |                              |                              |         |         |   |      |         |        |        |  |     |   
|Revenue                                             |                              | $                            | 425,616 |         |   | $    | 468,556 |        |        |  | (9  | %)
|Divisional Operating Expenses                       |                              |                              | 409,045 |         |   |      | 455,508 |        |        |  | (10 | %)
|                                                    |                              |                              |         |         |   |      |         |        |        |  |     |   
|                                                    |                              |                              |         |         |   |      |         |        |        |  |     |   
|Reconciliation of Reported Basis to Pro Forma Basis |                              |                              |         |         |   |      |         |       
|Reported Revenue                                    |                              | $                            | 437,882 |         |   | $    | 475,785 |        |        |  |     |   
|                                                    | Acquisitions                 |                              |         |        |   |      |         | 2,352  |        |  |     |    | 
|                                                    | Divestitures                 |                              |         |        |   |      |         | (9,581 | )      |  |     |    | 
|                                                    | Foreign Exchange adjustments |                              |         | (12,266 | ) |      |         |       |        |  |     |    | 
|                                                    |                              |                              |         |         |   |      |         |        |        | 
|Pro Forma Revenue                                   |                              | $                            | 425,616 |         |   | $    | 468,556 |        |        |  |     |   
|                                                    |                              |                              |         |         |   |      |         |        |        | 
|                                                    |                              |                              |         |         |   |      |         |        |        |  |     |   
|Reported Divisional Operating Expenses              |                              | $                            | 421,136 |         |   | $    | 460,779 |        |        |  |     |   
|                                                    | Acquisitions                 |                              |         |        |   |      |         | 2,394  |        |  |     |    | 
|                                                    | Divestitures                 |                              |         |        |   |      |         | (7,665 | )      |  |     |    | 
|                                                    | Foreign Exchange adjustments |                              |         | (12,091 | ) |      |         |       |        |  |     |    | 
|                                                    |                              |                              |         |         |   |      |         |        |        | 
|Pro Forma Divisional Operating Expenses             |                              | $                            | 409,045 |         |   | $    | 455,508 |        |        |  |     |   
|                                                    |                              |                              |         |         |   |      |         |        |        | 

Reported basis revenue decreased $37.9 million for the three months
ended March 31, 2003 as compared to the same period of 2002 and pro forma
basis revenue decreased $42.9 million for the three months ended March 31,
2003 as compared to the same period of 2002.

The reported and pro forma basis revenue declines are attributable to a
decline in ticket revenues associated with the mix of events in the first
quarter of 2003 as compared to the same period of 2002. During 2002, we
promoted the Billy Joel and Elton John and Crosby, Stills, Nash and Young
tours, with no revenue generating tours of comparable size in the first
quarter of 2003. Also, we had fewer theatrical tours during the three months
ended March 31, 2003 as compared to the same period of 2002.

Reported and pro forma divisional operating expenses decreased $39.6
million and $46.5 million, respectively, for the three months ended March 31,
2003 as compared to the same period of 2002. The declines are partially
attributable to variable expenses associated with the decrease in revenue.
Additionally, we experienced a $33.7 million decline on a reported basis in
talent expenses associated with the mix of events in 2003 compared to 2002
and the reduction in theatrical tours.

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Segment Reconciliations(In thousands)

|                                        |                                                     |  |                              |           |   |      |   |           |  
|--------------------------------------- | --------------------------------------------------- |  | ---------------------------- | --------- | - | ---- | - | --------- | -
|                                        |                                                     |  | Three Months Ended March 31, |          
|                                        |                                                     |  |                              |          
|                                        |                                                     |  | 2003                         |           |   | 2002 |  
|                                        |                                                     |  |                              |           |   |      |  
|Reported EBITDA as Adjusted *           |                                                     |  |                              |           |   |      |   |          
|                                        | Radio Broadcasting                                  |  | $                            | 299,930   |   |      | $ | 303,565   |  
|                                        | Outdoor Advertising                                 |  |                              | 85,819    |   |      |   | 74,578    |  
|                                        | Live Entertainment                                  |  |                              | 16,746    |   |      |   | 15,006    |  
|                                        | Other                                               |  |                              | 15,873    |   |      |   | 15,861    |  
|                                        | Corporate                                           |  |                              | (42,779   | ) |      |   | (38,969   | )
|                                        |                                                     |  |                              |           |   |     
|                                        | Consolidated EBITDA as Adjusted *                   |  | $                            | 375,589   |   |      | $ | 370,041   |  
|                                        |                                                     |  |                              |           |   |     
|                                        |                                                     |  |                              |           |   |      |   |          
|* See page 13 for cautionary disclosure |                                                     |  |                              |           |   |      |   |          
|                                        |                                                     |  |                              |           |   |      |   |          
|Pro Forma Revenue                       |                                                     |  |                              |           |   |      |   |          
|                                        | Radio Broadcasting                                  |  | $                            | 795,026   |   |      | $ | 792,214   |  
|                                        | Outdoor Advertising                                 |  |                              | 412,157   |   |      |   | 383,255   |  
|                                        | Live Entertainment                                  |  |                              | 425,616   |   |      |   | 468,556   |  
|                                        | Other                                               |  |                              | 125,418   |   |      |   | 121,778   |  
|                                        | Eliminations                                        |  |                              | (29,419   | ) |      |   | (31,191   | )
|                                        |                                                     |  |                              |           |   |     
|                                        | Consolidated Pro Forma Revenue                      |  | $                            | 1,728,798 |   |      | $ | 1,734,612 |  
|                                        |                                                     |  |                              |           |   |     
|                                        |                                                     |  |                              |           |   |      |   |          
|Pro Forma Divisional Operating Expense  |                                                     |  |                              |           |   |      |   |          
|                                        | Radio Broadcasting                                  |  | $                            | 495,019   |   |      | $ | 488,657   |  
|                                        | Outdoor Advertising                                 |  |                              | 328,467   |   |      |   | 308,300   |  
|                                        | Live Entertainment                                  |  |                              | 409,045   |   |      |   | 455,508   |  
|                                        | Other                                               |  |                              | 109,545   |   |      |   | 106,897   |  
|                                        | Eliminations                                        |  |                              | (29,419   | ) |      |   | (31,191   | )
|                                        |                                                     |  |                              |           |   |     
|                                        | Consolidated Pro Forma Divisional
Operating Expense |  | $                            | 1,312,657 |   |      | $ | 1,328,171 |  
|                                        |                                                     |  |                              |           |   |     

LIQUIDITY AND CAPITAL RESOURCES

Cash Flow

Operating Activities:

Net cash flow from operating activities of $435.8 million for the three
months ended March 31, 2003 principally reflects a net income of $71.0
million plus depreciation and amortization of $159.6 million. Cash flow from
operations also reflects a positive change in working capital of
approximately $139.7 million primarily due to an increase in deferred income
and a decrease in accounts receivable. Net cash flow from operating
activities of $449.9 million for the three months ended March 31, 2002
principally reflects net loss of $16.7 billion offset by non-cash charges of
$16.8 billion for the adoption of SFAS 142 and depreciation and amortization
of $142.4 million. Cash flow from operations also reflects increases in
deferred income, accounts payable, taxes payable and other accrued expenses
partially offset by an increase in receivables and prepaids.

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Investing Activities:

Net cash expenditures used in investing activities of $97.4 million for
the three months ended March 31, 2003 principally reflect capital
expenditures of $64.4 million related to purchases of property, plant and
equipment and $30.8 million primarily related to acquisitions of radio and
outdoor assets. Net cash expenditures for investing activities of $137.8
million for the three months ended March 31, 2002 reflect $108.7 million
related to purchases of property, plant and equipment and $20.8 million
relating to acquisitions and dispositions of radio, outdoor, and
entertainment assets.

Financing Activities:

Financing activities for the three months ended March 31, 2003
principally reflect the net reduction in debt of $169.8 million and proceeds
of $10.5 million related to the exercise of stock options. Financing
activities for the three months ended March 31, 2002 reflect a net reduction
in debt of $328.4 million and proceeds of $43.5 million related to the
exercise of stock options and warrants.

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

SOURCES OF CAPITAL

As of March 31, 2003 and December 31, 2002 we had the following debt
outstanding:

(In millions)

|                                |  |           |         |  |              |   |         | 
|------------------------------- |  | --------- | ------- |  | ------------ | - | ------- | 
|                                |  | March 31, |         |  | December 31, |  
|                                |  | 2003      |         |  | 2002         |  
|                                |  |           |         |  |              |  
|Credit facilities - domestic    |  | $         | 1,501.6 |  |              | $ | 2,056.6 | 
|Credit facility - international |  |           | 83.1    |  |              |   | 95.7    | 
|Senior convertible notes        |  |           | 517.6   |  |              |   | 517.6   | 
|Liquid Yield Option Notes (a)   |  |           | 249.2   |  |              |   | 252.1   | 
|Long-term bonds (b)             |  |           | 6,102.6 |  |              |   | 5,655.9 | 
|Other borrowings                |  |           | 180.0   |  |              |   | 200.7   | 
|                                |  |           |         |  |              |  
|Total Debt (c)                  |  |           | 8,634.1 |  |              |   | 8,778.6 | 
|Less: Cash and cash equivalents |  |           | 349.2   |  |              |   | 170.1   | 
|                                |  |           |         |  |              |  
|                                |  | $         | 8,284.9 |  |              | $ | 8,608.5 | 
|                                |  |           |         |  |              |  



|(a) |  | Includes $41.4 million and $42.1 million in unamortized fair value
purchase accounting adjustment premiums related to the merger with Jacor
Communications, Inc. at March 31, 2003 and December 31, 2002,
respectively.                                                                                                                                                         
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(b) |  | Includes $18.9 million and $44.6 million in unamortized fair value
purchase accounting adjustment premiums related to the merger with AMFM
Inc. at March 31, 2003 and December 31, 2002, respectively. Also
includes $117.6 million and $119.8 million related to fair value
adjustments for interest rate swap agreements at March 31,2003 and
December 31, 2002, respectively.
|   
|(c) |  | Total face value of outstanding debt was $8.6 billion and $8.7 billion
at March 31, 2003 and December 31, 2002, respectively.                                                                                                                                                                                                                                                   

Domestic Credit Facilities

We currently have three separate domestic credit facilities. These
provide cash for both working capital needs as well as to fund certain
acquisitions and refinancing of certain public debt securities.

The first credit facility is a reducing revolving credit facility,
originally in the amount of $2.0 billion. At March 31, 2003, $-0- was
outstanding and $1.3 billion was available for future borrowings. The amount
available for future borrowings under this credit facility began reducing on
September 30, 2000, with quarterly reductions to continue through the last
business day of June 2005. The reductions in amounts available for future
borrowings total $109.4 million per quarter in 2003 and 2004, $131.3 million
in the first quarter of 2005 and $381.3 million in the second quarter of
2005.

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The second facility is a $1.5 billion, five-year multi-currency
revolving credit facility. At March 31, 2003, the outstanding balance was
$1.6 million and, taking into account letters of credit of $114.5 million,
$1.4 billion was available for future borrowings, with the entire balance to
be repaid on August 30, 2005.

The third facility is a $1.5 billion three-year term loan with a
maturity of August 28, 2005. At March 31, 2003, the outstanding balance was
$1.5 billion. On April 30, 2003, we paid down $500.0 million to permanently
reduce this balance to $1.0 billion.

During the three months ended March 31, 2003, we made principal payments
totaling $755.0 million and drew down $200.0 million on these credit
facilities. As of May 1, 2003, the credit facilities aggregate outstanding
balance was $1.5 billion and, taking into account outstanding letters of
credit, $2.2 billion was available for future borrowings.

International Credit Facility

We have a $150.0 million five-year revolving credit facility with a
group of international banks. This facility allows for borrowings in various
foreign currencies, which are used to hedge net assets in those currencies
and provides funds to our international operations for certain working
capital needs. At March 31, 2003, $83.1 million was outstanding. This
credit facility expires on December 8, 2005.

Liquid Yield Option Notes

We assumed 4.75% Liquid Yield Option Notes (LYONs) due 2018 as a part
of the merger with Jacor. Each LYON has a principal amount at maturity of
$1,000 and is convertible, at the option of the holder, at any time on or
prior to maturity, into our common stock at a conversion rate of 7.227 shares
per LYON. The LYONs balance, after conversions to common stock, amortization
of purchase accounting premium and accretion of interest, at March 31, 2003
was $249.2 million, which includes an unamortized fair value purchase
accounting premium of $41.4 million.

We could purchase the LYONs, at the option of the holder, on February 9,
2003 for a purchase price of $494.52 per LYON, representing a 4.75% yield per
annum to the holder on such date. At February 9, 2003, 9,683 LYONs were put
to us, which we purchased for an aggregate price of $4.8 million. On April
17, 2003, we redeemed, pursuant to a call provision in the indenture
governing the LYONs, all of the outstanding 4.75% LYONs, originally issued by
Jacor Communications, Inc., for $208.2 million. As a result of the
redemption, we will recognize a non-cash gain on the extinguishment of debt
of $41.3 million during the second quarter of 2003.

Long-Term Bonds

On January 9, 2003, we completed a debt offering of $300.0 million
4.625% notes due January 15, 2008 and $500.0 million 5.75% notes due January
15, 2013. Interest is payable on January 15 and July 15 on both series of
notes. The aggregate net proceeds of approximately $791.2 million were used
to repay borrowings outstanding under our bank credit facilities and to
finance the redemption of AMFM Operating, Inc.s outstanding 8.125 % senior
subordinated notes due in 2007 and 8.75% senior subordinated notes due in
2007. The AMFM notes were redeemed pursuant to call provisions in the
indentures governing the notes.

On February 10, 2003, we called all of AMFM Operating Inc.s outstanding
8.125% senior subordinated notes due 2007, originally issued by Chancellor
Media Corporation of Los Angeles, for $379.2 million plus accrued interest.
On February 18, 2003, we called all of AMFM Operating Inc.s outstanding
8.75% senior subordinated notes due 2007, originally issued by Chancellor
Radio Broadcasting Company, for $193.4 million plus accrued interest.

On March 17, 2003, we completed a debt offering of $200.0 million 4.625%
notes due January 15, 2008. Interest is payable on January 15 and July 15.
The aggregate net proceeds of approximately $203.4 million were used to repay
borrowings outstanding under our bank credit facilities and to finance the
redemption of all of the 4.75 % LYONs due 2008.

On May 1, 2003, we completed a debt offering of $500.0 million 4.25%
notes due May 15, 2009. Interest is payable on May 15 and November 15. The
aggregate net proceeds of $497.0 million were used to repay borrowings
outstanding on the $1.5 billion three-year term loan. In conjunction with
the issuance, we entered into an interest rate swap agreement with a $500.0
million notional amount that effectively floats interest at a rate based upon
LIBOR.

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Cash and Cash Equivalents

At March 31, 2003 the Company had cash and cash equivalents of $349.2
million. Substantially all of this cash was used for the April 1, 2003
redemption of the 2.625% senior convertible notes due April 1, 2003.

Shelf Registration

On March 29, 2002, we filed a Registration Statement on Form S-3
covering a combined $3.0 billion of debt securities, junior subordinated debt
securities, preferred stock, common stock, warrants, stock purchase contracts
and stock purchase units (the shelf registration statement). The shelf
registration statement also covers preferred securities that may be issued
from time to time by our three Delaware statutory business trusts and
guarantees of such preferred securities by us. The SEC made this shelf
registration statement effective on April 2, 2002. After the debt offerings
of January 9, 2003, March 17, 2003 and May 1, 2003, $1.5 billion remains
available from this shelf registration statement.

Debt Covenants

Our only significant covenants relate to leverage ratio and interest
coverage contained and defined in the credit facilities. The leverage ratio
covenant requires us to maintain a ratio of total debt to EBITDA (as defined
by the credit facilities) of less than 5.50x through June 30, 2003 and less
than 5.00x from July 1, 2003 through the maturity of the facilities. The
interest coverage covenant requires us to maintain a minimum ratio of EBITDA
(as defined by the credit facilities) to interest expense of 2.00x. In the
event that we do not meet these covenants, we are considered to be in default
on the credit facilities at which time the credit facilities may become
immediately due. At March 31, 2003, our leverage and interest coverage
ratios were 3.9x and 5.1x, respectively. Including our cash and cash
equivalents recorded at March 31, 2003, our leverage on a net debt basis was
3.8x. Our bank credit facilities have cross-default provisions among the
bank facilities only. No other Clear Channel debt agreements have
cross-default or cross-acceleration provisions.

Additionally, the AMFM long-term bonds contain certain restrictive
covenants that limit the ability of AMFM Operating Inc., a wholly-owned
subsidiary of Clear Channel, to incur additional indebtedness, enter into
certain transactions with affiliates, pay dividends, consolidate, or effect
certain asset sales. The AMFM long-term bonds have cross-default and
cross-acceleration provisions among the AMFM long-term bonds only.

Our domestic credit facilities include a provision for an increase in
fees of 12.5 basis points on borrowings and 5 basis points on amounts
available for future borrowings in the event that both of our long-term debt
ratings drop below our current ratings of BBB-/Baa3. Conversely, if our
long-term debt ratings improve, we have a proportionate decrease in fees.
Our $150.0 million international credit facility includes a put option in the
event that our long-term debt ratings fall below BB+/Ba1. We believe there
are no other agreements that contain provisions that trigger an event upon a
change in long-term debt ratings that would have a material impact to our
financial statements.

At March 31, 2003, we were in compliance with all debt covenants. We
expect to remain in compliance throughout 2003.

USES OF CAPITAL

Acquisitions

During the three months ended March 31, 2003 we acquired one radio
station for $4.5 million in cash. We also acquired approximately 750 outdoor
display faces in nine domestic markets and approximately 600 display faces in
one international market for a total of $16.4 million in cash. Our outdoor
segment also acquired investments in nonconsolidated affiliates for a total
of $1.5 million in cash and acquired an additional 10% interest in a
subsidiary for $5.1 million in cash. Also, our national representation
business acquired new contacts for a total of $3.3 million in cash during the
three months ended March 31, 2003. We intend to continue to acquire certain
businesses that fit our strategic goals; however, the primary focus is on
reduction of debt.

Capital Expenditures

Capital expenditures in the three months ended March 31, 2003 decreased
from $108.7 million in 2002 to $64.4 million in the same period of 2003.
Overall, capital expenditures decreased due to less integration and
consolidation of our operations as well as less revenue producing capital
expenditures during the first quarter of 2003 as compared to the same period
of the prior year. We anticipate our total capital expenditures for 2003
will approximate $525 million.

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##### Table of Contents



(In millions)

|                       |  |                                                        |      |  |         |   |      |               |  |   |       |  |  |               |     |  |  |   |      | 
|---------------------- |  | ------------------------------------------------------ | ---- |  | ------- | - | ---- | ------------- |  | - | ----- |  |  | ------------- | --- |  |  | - | ---- | 
|                       |  | Three Months Ended March 31, 2003 Capital Expenditures |     
|                       |  |                                                        |     
|                       |  |                                                        |      |  |         |   |      |               |  |   |       |  |  | Corporate and |     |  |  |   |     
|                       |  | Radio                                                  |      |  | Outdoor |   |      | Entertainment |  |   | Other |  |  | Total         |    
|                       |  |                                                        |      |  |         |   |      |               |  |   |       |  |  |               |    
|Recurring              |  | $                                                      | 10.1 |  |         | $ | 11.6 |               |  | $ | 3.4   |  |  | $             | 3.0 |  |  | $ | 28.1 | 
|Non-recurring projects |  |                                                        | .5   |  |         |   |     |               |  |   |      |  |  |               | 1.1 |  |  |   | 1.6  | 
|Revenue producing      |  |                                                        |     |  |         |   | 28.3 |               |  |   | 6.4   |  |  |               |    |  |  |   | 34.7 | 
|                       |  |                                                        |      |  |         |   |      |               |  |   |       |  |  |               |    
|                       |  | $                                                      | 10.6 |  |         | $ | 39.9 |               |  | $ | 9.8   |  |  | $             | 4.1 |  |  | $ | 64.4 | 
|                       |  |                                                        |      |  |         |   |      |               |  |   |       |  |  |               |    

Radio broadcasting capital expenditures declined $7.4 million in the three
months ended March 31, 2003 as compared to the same period of 2002 due to
seasonal factors.

Outdoor advertising capital expenditures during the three months ended
March 31, 2003 decreased $25.3 million as compared to the same period of 2002
primarily due to less revenue producing related capital expenditures.

Live entertainment capital expenditures during the three months ended
March 31, 2003 decreased $2.5 million as compared to the same period of 2002
primarily related to less non-recurring capital expenditures related to
consolidation of operations. This decline was partially offset by a small
increase in revenue producing capital expenditures related to the construction
of new venues.

Capital expenditures listed under Corporate and Other declined $9.1
million during the three months ended March 31, 2003 as compared to the same
period of 2002 due to capital expenditures in 2002 related to the completion of
a new data and administrative service center which replaced leased locations.

Off-Balance Sheet Arrangements

In accordance with generally accepted accounting principles in the United
States, we do not record the following transactions on our balance sheet:

Commitments and Contingencies

We were among the defendants in a lawsuit filed on June 12, 2002 in the
United States District Court for the Southern District of Florida by Spanish
Broadcasting System. The plaintiffs alleged that we were in violation of
Section One and Section Two of the Sherman Antitrust Act as well as various
other claims, such as unfair trade practices and defamation, among other
counts. This case was dismissed with prejudice on January 31, 2003. The
plaintiffs have filed with the court for reconsideration.

There are various other lawsuits and claims pending against us. We
believe that any ultimate liability resulting from those actions or claims
will not have a material adverse effect on our results of operations,
financial position or liquidity.

Certain agreements relating to acquisitions provide for purchase price
adjustments and other future contingent payments based on the financial
performance of the acquired companies generally over a one to five year
period. We will continue to accrue additional amounts related to such
contingent payments if and when it is determinable that the applicable
financial performance targets will be met. The aggregate of these contingent
payments, if performance targets are met, would not significantly impact our
financial position or results of operations.

Guarantees

As of March 31, 2003, we guaranteed the debt of third parties of
approximately $98.5 million primarily related to long-term operating
contracts. The third parties associated operating assets secure a
substantial portion of these obligations.

At March 31, 2003, we guaranteed the third-party performance under a
certain contract for approximately $77.4 million that expires in 2004.

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Market Risk

Interest Rate Risk

At March 31, 2003, approximately 36% of our long-term debt, including
fixed rate debt on which we have entered into interest rate swap agreements,
bears interest at variable rates. Accordingly, our earnings are affected by
changes in interest rates. Assuming the current level of borrowings at
variable rates and assuming a two percentage point change in the years
average interest rate under these borrowings, it is estimated that our
interest expense would have changed by $61.4 million and that our net income
would have changed by $38.1 million during the first three months of 2003.
In the event of an adverse change in interest rates, management may take
actions to further mitigate its exposure. However, due to the uncertainty of
the actions that would be taken and their possible effects, 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 March 31, 2003, we had entered into interest rate swap agreements
with a $1.5 billion aggregate notional amount that effectively float interest
at rates based upon LIBOR. These agreements expire from September 2003 to
June 2005. The fair value of these agreements at March 31, 2003 was an asset
of $117.6 million.

Equity Price Risk

At March 31, 2003, the carrying value of our available-for-sale and
trading equity securities was $84.5 million and $11.1 million, respectively.
These investments are 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 March 31, 2003 by $19.1 million and would
change accumulated comprehensive income (loss) and net income (loss) by $10.5
million and $1.4 million, respectively. At March 31, 2003, we also held
$30.7 million of investments that do not have a quoted market price, but are
subject to fluctuations in their value.

Foreign Currency

We have operations in countries throughout the world. Foreign
operations are measured in their local currencies except in
hyper-inflationary countries in which we operate. As a result, our financial
results could be affected by factors such as changes in foreign currency
exchange rates or weak economic conditions in the foreign markets in which we
have operations. To mitigate a portion of the exposure to risk of
international currency fluctuations, we maintain a natural hedge through
borrowings in currencies other than the U.S. dollar. This hedge position is
reviewed monthly. We currently maintain no derivative instruments to
mitigate the exposure to translation and/or transaction risk. However, this
does not preclude the adoption of specific hedging strategies in the future.
Our foreign operations reported a net loss of $18.6 million for the three
months ended March 31, 2003. It is estimated that a 10% change in the value
of the U.S. dollar to foreign currencies would change net loss for the three
months ended March 31, 2003 by $1.9 million.

Our earnings are also affected by fluctuations in the value of the U.S.
dollar as compared to foreign currencies as a result of our investments in
various countries, all of which are accounted for under the equity method.
It is estimated that the result of a 10% fluctuation in the value of the
dollar relative to these foreign currencies at March 31, 2003 would change
our equity in earnings of nonconsolidated affiliates by $.2 million and would
change our net income for the three months ended March 31, 2003 by
approximately $.1 million. This analysis does not consider the implications
that such fluctuations could have on the overall economic activity that could
exist in such an environment in the U.S. or the foreign countries or on the
results of operations of these foreign entities.

Recent Accounting Pronouncements

On January 1, 2003, we adopted Statement of Financial Accounting
Standards No. 143, Accounting for Asset Retirement Obligations(Statement
143). Statement 143 applies to legal obligations associated with the
retirement of long-lived assets that result from acquisition, construction,
development and/or the normal operation of a long-lived asset. Adoption of
this statement did not materially impact our financial position or results of
operations.

On January 1, 2003, we adopted Statement of Financial Accounting
Standards No. 146, Accounting for Costs Associated with Exit or Disposal
Activities(Statement 146). Statement 146 addresses the accounting and
reporting for costs associated with exit or disposal activities and nullifies
Emerging Issues Task Force (EITF) Issue No. 94-3, Liability Recognition
for Certain Employee Terminations Benefits and Other Costs to Exit an
Activity. It also substantially nullifies EITF Issue No. 88-10, Costs

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Associated with Lease Modification or Termination. Adoption of this
statement did not materially impact our financial position or results of
operations.

On January 1, 2003, the Company adopted Financial Accounting Standards
Board Interpretation No. 45, Guarantors Accounting and Disclosure
Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of
Others(the Interpretation). The Interpretation applies to contracts or
indemnification agreements that contingently require the guarantor to make
payments to the guaranteed party based on changes in an underlying that is
related to an asset, liability, or an equity security of the guaranteed
party. The Interpretations disclosure requirements were effective for
financial statements of interim or annual periods ending after December 15,
2002. The Interpretations initial recognition and initial measurement
provisions were applicable on a prospective basis to guarantees issued or
modified after December 31, 2002, irrespective of the guarantors fiscal
year-end. We adopted the disclosure requirements of this Interpretation for
our 2002 annual report. Adoption of the initial recognition and initial
measurement requirements of the Interpretation did not materially impact our
financial position or results of operations.

Critical Accounting Policies

The preparation of financial statements in conformity with generally
accepted accounting principles in the United States requires management to make
estimates, judgments and assumptions that affect the reported amounts of assets
and liabilities, disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amount of expenses during the
reporting period. On an ongoing basis, we evaluate our estimates that are
based on historical experience and on various other assumptions that are
believed to be reasonable under the circumstances. The result of these
evaluations forms the basis for making judgments about the carrying values of
assets and liabilities and the reported amount of expenses that are not readily
apparent from other sources. Actual results may differ from these estimates
under different assumptions. The following accounting policies require
significant management judgments and estimates.

Allowance for Doubtful Accounts

We evaluate the collectibility of our accounts receivable based on a
combination of factors. In circumstances where we are aware of a specific
customers inability to meet its financial obligations, we record a specific
reserve to reduce the amounts recorded to what we believe will be collected.
For all other customers, we recognize reserves for bad debt based on historical
experience of bad debts as a percent of revenues for each business unit,
adjusted for relative improvements or deteriorations in the agings and changes
in current economic conditions.

Revenue Recognition

Radio broadcasting revenue is recognized as advertisements or programs are
broadcast and is generally billed monthly. Outdoor advertising provides
services under the terms of contracts covering periods up to three years, which
are generally billed monthly. Revenue for outdoor advertising space rental is
recognized ratably over the term of the contract. Advertising revenue is
reported net of agency commissions. Agency commissions are calculated based on
a stated percentage applied to gross billing revenue for our broadcasting and
outdoor operations. Clients remit the gross billing amount to the agency and
the agency remits gross billings less their commission to us. Payments
received in advance of being earned are recorded as deferred income.

Entertainment revenue from the presentation and production of an event is
recognized on the date of the performance. Revenue collected in advance of the
event is recorded as deferred income until the event occurs. Entertainment
revenue collected from advertising and other revenue, which is not related to
any single event, is classified as deferred revenue and generally amortized
over the operating season or the term of the contract.

Purchase Accounting

We account for our business acquisitions under the purchase method of
accounting. The total cost of acquisitions is allocated to the underlying net
assets, based on their respective estimated fair values. The excess of the
purchase price over the estimated fair values of the net assets acquired is
recorded as goodwill. Determining the fair value of assets acquired and
liabilities assumed requires managements judgment and often involves the use
of significant estimates and assumptions, including assumptions with respect to
future cash inflows and outflows, discount rates, asset lives and market
multiples, among other items. In addition, reserves have been established on
our balance sheet related to acquired liabilities and qualifying restructuring
costs based on assumptions made at the time of acquisition. We evaluate these
reserves on a regular basis to determine the adequacies of the amounts.

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Long-Lived Assets

We record impairment losses when events and circumstances indicate that
depreciable and amortizable long-lived assets might be impaired and the
undiscounted cash flows estimated to be generated by those assets are less than
the carrying amount of those assets. When specific assets are determined to be
unrecoverable, the cost basis of these assets are reduced to reflect their
current fair market value. We use various assumptions in determining the
current fair market value of these assets, including future expected cash flows
and discount rates, as well as future salvage values.

In the first quarter of 2002, we adopted Statement 142, Goodwill and Other
Intangible Assets. In accordance with Statement 142, we tested our FCC
licenses for impairment as of January 1, 2002 by comparing their fair value to
their carrying value at that date. We recorded an impairment charge of our FCC
licenses of approximately $6.0 billion, net of deferred tax of $3.7 billion.
We used an income approach to value the FCC licenses. We also recorded an
impairment charge of our goodwill of approximately $10.8 billion, net of
deferred taxes of $659.1 million. Similar to our test for impairment of FCC
licenses, we used the income approach to determine the fair value of our
reporting units. The fair value of our reporting units was used to apply value
to the net assets of each reporting unit. To the extent that the net assets
exceeded the fair value, an impairment charge was recorded. The income
approach used for valuing goodwill and FCC licenses involved estimating future
cash flows expected to be generated from the related assets, discounted to
their present value using a risk-adjusted discount rate. Terminal values were
also estimated and discounted to their present value. The fair values
calculated were significantly impacted by the assumptions made, which impacted
our impairment charge. We may incur additional impairment charges in future
periods under Statement 142 to the extent we do not achieve our expected cash
flow growth rates, and to the extent that market values and long-term interest
rates in general decrease and increase, respectively.

Accounting for Investments

At March 31, 2003, we had $126.3 million recorded as other investments.
Other investments are composed primarily of equity securities. These
securities are classified as available-for-sale or trading and are carried at
fair value based on quoted market prices. Securities are carried at historical
value when quoted market prices are unavailable. The net unrealized gains or
losses on available-for-sale securities, net of tax, are reported as a separate
component of shareholders equity. The net unrealized gains or losses on
trading securities are reported in the statement of operations. In addition,
we hold investments that do not have quoted market prices. We review the value
of these investments and record an impairment charge in the statement of
operations for any decline in value that is determined to be
other-than-temporary. For the three months ended March 31, 2003 and 2002, we
recorded no impairment charges related to other-than-temporary declines in the
value of our investments. In addition, at March 31, 2003, we had $548.4
million recorded as investments accounted for under the equity method. We
review the value of these investments and record an impairment charge in the
statement of operations for any decline in value that is determined to be
other-than-temporary.

Tax Accruals

The Internal Revenue Service and other taxing authorities routinely
examine our tax returns. From time to time, the IRS challenges certain of our
tax positions. We believe our tax positions comply with applicable tax law and
we would vigorously defend these positions if challenged. The final
disposition of any positions challenged by the IRS could require us to make
additional tax payments. We believe that we have adequately accrued for any
foreseeable payments resulting from tax examinations and consequently do not
anticipate any material impact upon their ultimate resolution.

Litigation Accruals

We are currently involved in certain legal proceedings and, as required,
have accrued our estimate of the probable costs for the resolution of these
claims. These estimates have been developed in consultation with counsel and
are based upon an analysis of potential results, assuming a combination of
litigation and settlement strategies. It is possible, however, that future
results of operations for any particular period could be materially affected by
changes in our assumptions or the effectiveness of our strategies related to
these proceedings.

Inflation

Inflation has affected our performance in terms of higher costs for
wages, salaries and equipment. Although the exact impact of inflation is
indeterminable, we believe we have offset these higher costs in various
manners.

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Ratio of Earnings to Fixed Charges

The ratio of earnings to fixed charges is as follows:

|                   |      |  |                         |  |      |      |  |  |      |  |  |      |   |  |      |  |      |      |  |  |      |  |  |  |      | 
|------------------ | ---- |  | ----------------------- |  | ---- | ---- |  |  | ---- |  |  | ---- | - |  | ---- |  | ---- | ---- |  |  | ---- |  |  |  | ---- | 
|Three Months ended |      |  |                         |  |      |      |  |  |      |  |  |      |   |  |      |  |      |      |  |  |     
|March 31,          |      |  | Year Ended December 31, | 
|                   |      |  |                         | 
|2003               |      |  | 2002                    |  |      | 2002 |  |  | 2001 |  |  | 2000 |   |  | 1999 |  |      | 1998 | 
|                   |      |  |                         |  |      |      |  |  |      |  |  |      |   |  |      |  |      |      | 
|                   | 1.65 |  |                         |  | 1.83 |      |  |  | 2.62 |  |  |      | * |  |      |  | 2.20 |      |  |  | 2.04 |  |  |  | 1.83 | 

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

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

Risks Regarding Forward Looking Statements

Except for the historical information, this report contains various
forward-looking statements that represent our expectations or beliefs
concerning future events, including the future levels of cash flow from
operations. Management believes that all statements that express
expectations and projections with respect to future matters, including the
strategic fit of radio assets; expansion of market share; our ability to
capitalize on synergies between the live entertainment and radio broadcasting
businesses; the availability of capital resources; and expected changes in
advertising revenues; are forward-looking statements within the meaning of
the Private Securities Litigation Reform Act. We caution that these
forward-looking statements involve a number of risks and uncertainties and
are subject to many variables that could have an adverse effect upon our
financial performance. These statements are made on the basis of managements
views and assumptions, as of the time the statements are made, regarding
future events and business performance. There can be no assurance, however,
that managements expectations will necessarily come to pass.

A wide range of factors could materially affect future developments and
performance, including:



| |  |  | the impact of general economic conditions in the U.S. and in other countries in which we currently do business;                   
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | 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;                                                                                                 
|
| |  |  | 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 SEC filings, including our
Annual Report on Form 10-K for the year ended December 31, 2002.

This list of factors that may affect future performance and the accuracy
of forward-looking statements is illustrative, but by no means exhaustive.
Accordingly, all forward-looking statements should be evaluated with the
understanding of their inherent uncertainty.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Required information is within Item 2




ITEM 4. CONTROLS AND PROCEDURES

Our principal executive and financial officers have concluded, based on
their evaluation as of a date within 90 days before the filing of this Form
10-Q, that our disclosure controls and procedures under Rule 13a-14 of the
Securities Exchange Act of 1934 are effective to ensure that information we
are required to disclose in the reports we file or submit under the Exchange
Act is recorded, processed, summarized and reported within the time periods
specified in the SECs rules and forms, and include controls and procedures
designed to ensure that information we are required to disclose in such
reports is accumulated and communicated to management, including our
principal executive and financial officers, as appropriate to allow timely
decisions regarding required disclosure.

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

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##### Table of Contents






Part II  OTHER INFORMATION




Item 1. Legal Proceedings

We were among the defendants in a lawsuit filed on June 12, 2002 in the
United States District Court for the Southern District of Florida by Spanish
Broadcasting System. The plaintiffs alleged that we were in violation of
Section One and Section Two of the Sherman Antitrust Act as well as various
other claims, such as unfair trade practices and defamation, among other
counts. This case was dismissed with prejudice on January 31, 2003. The
plaintiffs have filed with the court for reconsideration.




Item 6. Exhibits and Reports on Form 8-K

(a) Exhibits. See Exhibit Index on Page 36          (b) Reports
on Form 8-K

|       |  |         |  |                |  |                              
|------ |  | ------- |  | -------------- |  | -----------------------------
|Filing |  | Date    |  | Items Reported |  | Financial Statements Reported
|       |  |         |  |                |  |                              
|8-K    |  | 1/7/03  |  | Item 5 - Other |  | None                         
|8-K    |  | 1/10/03 |  | Item 5 - Other |  | None                         
|8-K    |  | 3/12/03 |  | Item 5 - Other |  | None                         
|8-K    |  | 3/18/03 |  | Item 5 - Other |  | None                         




Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

|            |  |                                                                         |  | 
|----------- |  | ----------------------------------------------------------------------- |  | 
|            |  | CLEAR CHANNEL COMMUNICATIONS, INC.                                     
|            |  |                                                                         |  | 
|            |  |                                                                         |  | 
|May 1, 2003 |  | /s/ Randall T. Mays                                                     |  | 
|            |  |                                                                         |  | 
|            |  | Randall T. Mays
Executive Vice President and
Chief Financial Officer    |  | 
|            |  |                                                                         |  | 
|            |  |                                                                         |  | 
|May 1, 2003 |  | /s/ Herbert W. Hill, Jr.                                                |  | 
|            |  |                                                                         |  | 
|            |  | Herbert W. Hill, Jr.
Senior Vice President and
Chief Accounting Officer |  | 

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Certification

I, L. Lowry Mays, Chairman and Chief Executive Officer of Clear Channel
Communications, Inc., certify that:



|1. |  | I have reviewed this quarterly report on Form 10-Q of Clear Channel
Communications, Inc.;                                                                                                                                                                                                                                     
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|2. |  | Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this quarterly report;
|  
|3. |  | Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the periods presented in
this quarterly report;                   
|  
|4. |  | The registrants other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
we have:                                                                                                     



| | a) |  | designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly report
is being prepared;
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b) |  | evaluated the effectiveness of the registrants disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the Evaluation Date); and                                                                                                  
|
| | c) |  | presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;                                                                                                                        



|5. |  | The registrants other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrants auditors and the
audit committee of registrants board of directors (or persons
performing the equivalent function):
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | a) |  | all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrants ability to
record, process, summarize and report financial data and have
identified for the registrants auditors any material weaknesses in
internal controls; and
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b) |  | any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrants internal
controls; and                                                                                                                                        



|6. |  | The registrants other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in
internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant deficiencies
and material weaknesses.
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                                                      |  | 
|--------------------------------------------------------------------- |  | 
|Date: May 1, 2003                                                     |  | 
|                                                                      |  | 
|/s/ L. LOWRY MAYS

L. Lowry Mays
Chairman and Chief Executive Officer |  | 

-30-



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##### Table of Contents



Certification

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



|1. |  | I have reviewed this quarterly report on Form 10-Q of Clear Channel
Communications, Inc.;                                                                                                                                                                                                                                     
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|2. |  | Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this quarterly report;
|  
|3. |  | Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the periods presented in
this quarterly report;                   
|  
|4. |  | The registrants other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
we have:                                                                                                     



| | a) |  | designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly report
is being prepared;
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b) |  | evaluated the effectiveness of the registrants disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the Evaluation Date); and                                                                                                  
|
| | c) |  | presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;                                                                                                                        



|5. |  | The registrants other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrants auditors and the
audit committee of registrants board of directors (or persons
performing the equivalent function):
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | a) |  | all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrants ability to
record, process, summarize and report financial data and have
identified for the registrants auditors any material weaknesses in
internal controls; and
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b) |  | any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrants internal
controls; and                                                                                                                                        



|6. |  | The registrants other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in
internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant deficiencies
and material weaknesses.
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                                                                           |  | 
|------------------------------------------------------------------------------------------ |  | 
|Date: May 1, 2003                                                                          |  | 
|                                                                                           |  | 
|/s/ RANDALL T. MAYS

Randall T. Mays
Executive Vice President and  Chief
Financial Officer |  | 

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##### Table of Contents






INDEX TO EXHIBITS

|        |  |                                                                                                                                                                                                                                                                                                       
|------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |  |                                                                                                                                                                                                                                                                                                       
|Number  |  | Description                                                                                                                                                                                                                                                                                           
|        |  |                                                                                                                                                                                                                                                                                                       
|2.1     |  | Agreement and Plan of Merger dated as of October
5, 2001, by and among Clear Channel, CCMM Sub,
Inc. and The Ackerley Group, Inc. (incorporated by
reference to the exhibits of Clear Channels
Current Report on Form 8-K filed October 9, 2001).                                                    
|        |  |                                                                                                                                                                                                                                                                                                       
|3.1     |  | Current Articles of Incorporation of the Company
(incorporated by reference to the exhibits of the
Companys Registration Statement on Form S-3 (Reg.
No. 333-33371) dated September 9, 1997).                                                                                                        
|        |  |                                                                                                                                                                                                                                                                                                       
|3.2     |  | Third Amended and Restated Bylaws of the Company
(incorporated by reference to the exhibits of the
Companys Registration Statement on Form S-4 (Reg.
No. 333-74196) dated November 29, 2001).                                                                                                        
|        |  |                                                                                                                                                                                                                                                                                                       
|3.3     |  | Amendment to the Companys Articles of
Incorporation (incorporated by reference to the
exhibits to the Companys Quarterly Report on Form
10-Q for the quarter ended September 30, 1998).                                                                                                             
|        |  |                                                                                                                                                                                                                                                                                                       
|3.4     |  | Second Amendment to Clear Channels Articles of
Incorporation (incorporated by reference to the
exhibits to Clear Channels Quarterly Report on
Form 10-Q for the quarter ended March 31, 1999).                                                                                                      
|        |  |                                                                                                                                                                                                                                                                                                       
|3.5     |  | Third Amendment to Clear Channels Articles of
Incorporation (incorporated by reference to the
exhibits to Clear Channels Quarterly Report on
Form 10-Q for the quarter ended May 31, 2000).                                                                                                         
|        |  |                                                                                                                                                                                                                                                                                                       
|4.1     |  | Agreement Concerning Buy-Sell Agreement by and between Clear
Channel Communications, Inc., L. Lowry Mays, B.J. McCombs, John M.
Schaefer and John W. Barger, dated August 3, 1998 (incorporated by
reference to the exhibits to Clear Channels Schedule 13-D/A,
dated October 10, 2002).             
|        |  |                                                                                                                                                                                                                                                                                                       
|4.2     |  | Waiver and Second Agreement Concerning Buy-Sell Agreement by and
between Clear Channel Communications, Inc., L. Lowry Mays and B.J.
McCombs, dated August 17, 1998 (incorporated by reference to the
exhibits to Clear Channels Schedule 13-D/A, dated October 10,
2002).                            
|        |  |                                                                                                                                                                                                                                                                                                       
|4.3     |  | Waiver and Third Agreement Concerning Buy-Sell Agreement by and
between Clear Channel Communications, Inc., L. Lowry Mays and B.J.
McCombs, dated July 26, 2002 (incorporated by reference to the
exhibits to Clear Channels Schedule 13-D/A, dated October 10,
2002).                               
|        |  |                                                                                                                                                                                                                                                                                                       
|4.4     |  | Waiver and Fourth Agreement Concerning Buy-Sell Agreement by and
between Clear Channel Communications, Inc., L. Lowry Mays and B.J.
McCombs, dated September 27, 2002 (incorporated by reference to
the exhibits to Clear Channels Schedule 13-D/A, dated October 10,
2002).                         
|        |  |                                                                                                                                                                                                                                                                                                       
|4.5     |  | Buy-Sell Agreement by and between Clear Channel
Communications, Inc., L. Lowry Mays, B. J.
McCombs, John M. Schaefer and John W. Barger,
dated May 31, 1977 (incorporated by reference to
the exhibits of the Companys Registration
Statement on Form S-1 (Reg. No. 33-289161) dated
April 19, 1984).
|        |  |                                                                                                                                                                                                                                                                                                       
|4.6     |  | Senior Indenture dated October 1, 1997, by and
between Clear Channel Communications, Inc. and The
Bank of New York as Trustee (incorporated by
reference to exhibit 4.2 of the Companys
Quarterly Report on Form 10-Q for the quarter
ended September 30, 1997).                                     
|        |  |                                                                                                                                                                                                                                                                                                       
|4.7     |  | First Supplemental Indenture dated March 30, 1998
to Senior Indenture dated October 1, 1997, by and
between the Company 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 March 31, 1998).         
|        |  |                                                                                                                                                                                                                                                                                                       
|4.8     |  | 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).    

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##### Table of Contents



|        |  |                                                                                                                                                                                                                                                                                                                                 
|------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |  |                                                                                                                                                                                                                                                                                                                                 
|Number  |  | Description                                                                                                                                                                                                                                                                                                                     
|        |  |                                                                                                                                                                                                                                                                                                                                 
|4.9     |  | 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).                               
|        |  |                                                                                                                                                                                                                                                                                                                                 
|4.10    |  | Fourth Supplement Indenture dated November 24,
1999 to Senior Indenture dated October 1, 1997, by
and between Clear Channel and The Bank of New York
as Trustee (incorporated by reference to the
exhibits of the Companys Annual Report on Form
10-K for the year ended December 31, 1999).                                   
|        |  |                                                                                                                                                                                                                                                                                                                                 
|4.11    |  | Fifth Supplemental Indenture dated June 21, 2000,
to Senior Indenture dated October 1, 1997, by and
between Clear Channel Communications, Inc. and The
Bank of New York, as Trustee (incorporated by
reference to the exhibits of Clear Channels
registration statement on Form S-3 (Reg. No.
333-42028) dated July 21, 2000). 
|        |  |                                                                                                                                                                                                                                                                                                                                 
|4.12    |  | Sixth Supplemental Indenture dated June 21, 2000,
to Senior Indenture dated October 1, 1997, by and
between Clear Channel Communications, Inc. and The
Bank of New York, as Trustee (incorporated by
reference to the exhibits of Clear Channels
registration statement on Form S-3 (Reg. No.
333-42028) dated July 21, 2000). 
|        |  |                                                                                                                                                                                                                                                                                                                                 
|4.13    |  | Seventh Supplemental Indenture dated July 7, 2000,
to Senior Indenture dated October 1, 1997, by and
between Clear Channel Communications, Inc. and The
Bank of New York, as Trustee (incorporated by
reference to the exhibits of Clear Channels
registration statement on Form S-3 (Reg. No.
333-42028) dated July 21, 2000).
|        |  |                                                                                                                                                                                                                                                                                                                                 
|4.14    |  | Eighth 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).
|        |  |                                                                                                                                                                                                                                                                                                                                 
|4.15    |  | 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). 
|        |  |                                                                                                                                                                                                                                                                                                                                 
|4.16    |  | Tenth Supplemental Indenture dated October 26,
2001, to Senior Indenture dated October 1, 1997,
by and between Clear Channel Communications, Inc.
and The Bank of New York, as Trustee (incorporated
by reference to the exhibits to Clear Channels
Quarterly Report on Form 10-Q for the quarter
ended September 30, 2001).   
|        |  |                                                                                                                                                                                                                                                                                                                                 
|4.17    |  | 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).        
|        |  |                                                                                                                                                                                                                                                                                                                                 
|4.18    |  | 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).                          
|        |  |                                                                                                                                                                                                                                                                                                                                 
|11      |  | Statement re: Computation of Per Share Earnings.                                                                                                                                                                                                                                                                                
|        |  |                                                                                                                                                                                                                                                                                                                                 
|12      |  | Statement re: Computation of Ratios.                                                                                                                                                                                                                                                                                            
|        |  |                                                                                                                                                                                                                                                                                                                                 
|99.1    |  | Certification of Chief Executive Officer                                                                                                                                                                                                                                                                                        
|        |  |                                                                                                                                                                                                                                                                                                                                 
|99.2    |  | Certification of Chief Financial Officer                                                                                                                                                                                                                                                                                        

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