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FORM 10-Q

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

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

For the quarter ended September 30, 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 October 31, 2003Common Stock, $.10 par value
    
    615,581,355






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TABLE OF CONTENTS



|                                           |                                                                                               |                                            |  |  |  |  |  | 
|------------------------------------------ | --------------------------------------------------------------------------------------------- | ------------------------------------------ |  |  |  |  |  | 
|PART I                                    
|                                           | Item 1. UNAUDITED FINANCIAL STATEMENTS                                                       
|                                           |                                                                                               | 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                                
|INDEX TO EXHIBITS                         
|EX-11 Computation of Per Share Earnings   
|EX-12 Computation of Ratios               
|EX-31.1 Certification of CEO - Section 302
|EX-31.2 Certification of CFO - Section 302
|EX-32.1 Certification of CEO - Section 906
|EX-32.2 Certification of CFO - Section 906



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CLEAR CHANNEL COMMUNICATIONS, INC. AND SUBSIDIARIES

INDEX

Page No.Part I  Financial InformationItem 1. Unaudited Financial StatementsConsolidated Balance Sheets at September 30, 2003 and December 31, 2002
    
    
    3Consolidated Statements of Operations for the nine and three months ended September 30, 2003 and 2002
    
    
    5Consolidated Statements of Cash Flows for the nine months ended September 30, 2003 and 2002
    
    
    6Notes to Consolidated Financial Statements
    
    
    7Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    15Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    31Item 4. Controls and Procedures
    
    
    31Part II  Other InformationItem 1. Legal Proceedings
    
    
    33Item 6. Exhibits and reports on Form 8-K
    
    
    33(a) Exhibits(b) Reports on Form 8-KSignatures
    
    
    33Index to Exhibits
    
    
    34






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PART I







Item 1. UNAUDITED FINANCIAL STATEMENTS







CLEAR CHANNEL COMMUNICATIONS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
(In thousands)

September 30,
    
    December 31,2003
    
    2002(Unaudited)
    
    (Audited)Current AssetsCash and cash equivalents
    
    $
    211,434
    
    
    $
    170,086Accounts receivable, less allowance of $65,540 at
September 30, 2003 and $67,338 at December 31, 2002
    
    
    1,655,834
    
    
    
    1,584,995Prepaid expenses
    
    
    245,030
    
    
    
    203,578Other current assets
    
    
    156,972
    
    
    
    164,836Total Current Assets
    
    
    2,269,270
    
    
    
    2,123,495Property, Plant and EquipmentLand, buildings and improvements
    
    
    1,565,463
    
    
    
    1,519,845Structures and site leases
    
    
    2,787,296
    
    
    
    2,581,414Towers, transmitter and studio equipment
    
    
    795,789
    
    
    
    743,463Furniture and other equipment
    
    
    668,961
    
    
    
    629,264Construction in progress
    
    
    197,554
    
    
    
    227,8536,015,063
    
    
    
    5,701,839Less accumulated depreciation
    
    
    1,822,514
    
    
    
    1,459,0274,192,549
    
    
    
    4,242,812Intangible AssetsDefinite-lived intangibles, net
    
    
    691,771
    
    
    
    761,728Indefinite-lived intangibles  licenses
    
    
    11,770,916
    
    
    
    11,738,947Indefinite-lived intangibles  other
    
    
    430,508
    
    
    
    389,801Goodwill
    
    
    7,271,723
    
    
    
    7,241,231Other AssetsNotes receivable
    
    
    19,302
    
    
    
    21,658Investments in, and advances to, nonconsolidated affiliates
    
    
    347,287
    
    
    
    542,214Other assets
    
    
    476,711
    
    
    
    520,423Other investments
    
    
    695,339
    
    
    
    89,844Total Assets
    
    $
    28,165,376
    
    
    $
    27,672,153


See Notes to Consolidated Financial Statements

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

September 30,
    
    December 31,2003
    
    2002(Unaudited)
    
    (Audited)Current LiabilitiesAccounts payable
    
    $
    364,744
    
    
    $
    345,093Accrued interest
    
    
    98,834
    
    
    
    71,335Accrued expenses
    
    
    959,569
    
    
    
    894,166Accrued income taxes
    
    
    165,100
    
    
    
    Current portion of long-term debt
    
    
    147,205
    
    
    
    1,396,532Deferred income
    
    
    307,060
    
    
    
    277,042Other current liabilities
    
    
    28,883
    
    
    
    26,471Total Current Liabilities
    
    
    2,071,395
    
    
    
    3,010,639Long-term debt
    
    
    7,180,658
    
    
    
    7,382,090Other long-term borrowings
    
    
    151,568
    
    
    
    64,114Deferred income taxes
    
    
    2,929,889
    
    
    
    2,470,458Other long-term liabilities
    
    
    526,307
    
    
    
    488,687Minority interest
    
    
    55,029
    
    
    
    46,073Shareholders EquityCommon stock
    
    
    61,575
    
    
    
    61,340Additional paid-in capital
    
    
    30,932,498
    
    
    
    30,868,725Accumulated deficit
    
    
    (15,755,980
    )
    
    
    (16,652,789
    )Accumulated other comprehensive income (loss)
    
    
    34,603
    
    
    
    (47,798
    )Other
    
    
    (932
    )
    
    
    (3,131
    )Cost of shares held in treasury
    
    
    (21,234
    )
    
    
    (16,255
    )Total Shareholders Equity
    
    
    15,250,530
    
    
    
    14,210,092Total Liabilities and Shareholders Equity
    
    $
    28,165,376
    
    
    $
    27,672,153


See Notes to Consolidated Financial Statements

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

Nine Months Ended September 30,
    
    Three Months Ended September 30,2003
    
    2002
    
    2003
    
    2002Revenue
    
    $
    6,640,838
    
    
    $
    6,211,322
    
    
    $
    2,544,146
    
    
    $
    2,340,425Operating expenses:Divisional operating expenses (excludes non-cash compensation
expense of $1,326, $3,680, $310 and $903 for the nine months
ended and three months ended September 30, 2003 and 2002,
respectively)
    
    
    4,845,309
    
    
    
    4,475,749
    
    
    
    1,842,329
    
    
    
    1,680,371Non-cash compensation expense
    
    
    3,458
    
    
    
    4,219
    
    
    
    880
    
    
    
    936Depreciation and amortization
    
    
    487,324
    
    
    
    449,182
    
    
    
    165,882
    
    
    
    160,503Corporate expenses (excludes non-cash compensation expense of
$2,132, $539, $570 and $33 for the nine months ended and three
months ended September 30, 2003 and 2002, respectively)
    
    
    129,288
    
    
    
    122,557
    
    
    
    44,050
    
    
    
    44,385Operating income
    
    
    1,175,459
    
    
    
    1,159,615
    
    
    
    491,005
    
    
    
    454,230Interest expense
    
    
    294,455
    
    
    
    326,652
    
    
    
    98,192
    
    
    
    107,935Gain (loss) on sale of assets related to mergers
    
    
    
    
    
    
    3,991
    
    
    
    
    
    
    
    Gain (loss) on marketable securities
    
    
    680,400
    
    
    
    (7,108
    )
    
    
    675,027
    
    
    
    (16,009
    )Equity in earnings of nonconsolidated affiliates
    
    
    12,005
    
    
    
    16,619
    
    
    
    2,957
    
    
    
    5,906Other income (expense)  net
    
    
    37,304
    
    
    
    62,575
    
    
    
    (1,840
    )
    
    
    20,974Income before income taxes and cumulative effect of a change in
accounting principle
    
    
    1,610,713
    
    
    
    909,040
    
    
    
    1,068,957
    
    
    
    357,166Income tax (expense) benefit:Current
    
    
    (199,377
    )
    
    
    (231,079
    )
    
    
    (159,051
    )
    
    
    (25,321
    )Deferred
    
    
    (452,961
    )
    
    
    (137,082
    )
    
    
    (273,877
    )
    
    
    (119,331
    )Income before cumulative effect of a change in accounting principle
    
    
    958,375
    
    
    
    540,879
    
    
    
    636,029
    
    
    
    212,514Cumulative effect of a change in accounting principle
    
    
    
    
    
    
    (16,778,526
    )
    
    
    
    
    
    
    Net income (loss)
    
    
    958,375
    
    
    
    (16,237,647
    )
    
    
    636,029
    
    
    
    212,514Other comprehensive income (loss), net of tax:Foreign currency translation adjustments
    
    
    48,658
    
    
    
    1,976
    
    
    
    14,677
    
    
    
    8,483Unrealized gain (loss) on securities:Unrealized holding gain (loss)
    
    
    53,151
    
    
    
    (90,026
    )
    
    
    (12,198
    )
    
    
    (11,798
    )Reclassification adjustment for gains on shares held prior
to mergers
    
    
    
    
    
    
    (3,982
    )
    
    
    
    
    
    
    Reclassification adjustment for (gains) losses included in
net income (loss)
    
    
    (19,408
    )
    
    
    13,005
    
    
    
    (17,539
    )
    
    
    15,480Comprehensive income (loss)
    
    $
    1,040,776
    
    
    $
    (16,316,674
    )
    
    $
    620,969
    
    
    $
    224,679Per common share:Income (loss) before cumulative effect of a change in
accounting principle  Basic
    
    $
    1.56
    
    
    $
    .89
    
    
    $
    1.03
    
    
    $
    .35Cumulative effect of a change in accounting principle  Basic
    
    
    
    
    
    
    (27.74
    )
    
    
    
    
    
    
    Net income (loss)  Basic
    
    $
    1.56
    
    
    $
    (26.85
    )
    
    $
    1.03
    
    
    $
    .35Income (loss) before cumulative effect of a change in
accounting principle  Diluted
    
    $
    1.55
    
    
    $
    .88
    
    
    $
    1.03
    
    
    $
    .34Cumulative effect of a change in accounting principle  Diluted
    
    
    
    
    
    
    (26.77
    )
    
    
    
    
    
    
    Net income (loss)  Diluted
    
    $
    1.55
    
    
    $
    (25.89
    )
    
    $
    1.03
    
    
    $
    .34Dividends declared per share
    
    $
    .10
    
    
    $
    
    
    
    $
    .10
    
    
    $
    


See Notes to Consolidated Financial Statements

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

Nine Months Ended September 30,2003
    
    2002Cash Flows from operating activities:Net income (loss)
    
    $
    958,375
    
    
    $
    (16,237,647
    )Reconciling Items:Cumulative effect of a change in accounting principle, net of tax
    
    
    
    
    
    
    16,778,526Depreciation and amortization
    
    
    487,324
    
    
    
    449,182Deferred taxes
    
    
    452,961
    
    
    
    137,082(Gain) loss on disposal of assets
    
    
    (5,208
    )
    
    
    (38,183
    )(Gain) loss on sale of assets related to mergers
    
    
    
    
    
    
    (3,991
    )(Gain) loss on available-for-sale securities
    
    
    (32,128
    )
    
    
    25,322(Gain) loss on other investments
    
    
    (650,315
    )
    
    
    (Gain) loss forward exchange contract
    
    
    14,528
    
    
    
    (34,058
    )(Gain) loss on trading securities
    
    
    (12,485
    )
    
    
    15,844Increase (decrease) accrued income and other taxes
    
    
    195,436
    
    
    
    197,704Increase (decrease) other  net
    
    
    (45,742
    )
    
    
    (20,529
    )Changes in other operating assets and liabilities, net of
effects of acquisitions
    
    
    (24,010
    )
    
    
    (15,422
    )Net cash provided by operating activities
    
    
    1,338,736
    
    
    
    1,253,830Cash flows from investing activities:(Investment in) liquidation of restricted cash, net
    
    
    
    
    
    
    (152
    )Cash acquired in stock-for-stock mergers
    
    
    
    
    
    
    4,305Decrease (increase) in notes receivable  net
    
    
    2,356
    
    
    
    2,968Decrease (increase) in investments in and advances to
nonconsolidated affiliates  net
    
    
    11,654
    
    
    
    (4,361
    )Purchases of investments
    
    
    (5,205
    )
    
    
    (500
    )Proceeds from sale of investments
    
    
    344,206
    
    
    
    15,180Purchases of property, plant and equipment
    
    
    (231,169
    )
    
    
    (338,529
    )Proceeds from disposal of assets
    
    
    12,869
    
    
    
    76,284Proceeds from divestitures placed in restricted cash
    
    
    
    
    
    
    25,303Acquisition of operating assets
    
    
    (55,355
    )
    
    
    (174,523
    )Acquisition of operating assets with restricted cash
    
    
    
    
    
    
    (19,979
    )Decrease (increase) in other-net
    
    
    (20,083
    )
    
    
    (29,323
    )Net cash (used in) provided by investing activities
    
    
    59,273
    
    
    
    (443,327
    )Cash flows from financing activities:Draws on credit facilities
    
    
    2,201,847
    
    
    
    2,938,908Payments on credit facilities
    
    
    (3,632,060
    )
    
    
    (2,845,039
    )Proceeds from long-term debt
    
    
    1,997,817
    
    
    
    Payments on long-term debt
    
    
    (2,049,737
    )
    
    
    (935,883
    )Proceeds from forward exchange contract
    
    
    83,519
    
    
    
    Proceeds from exercise of stock options, stock purchase plan and
common stock warrants
    
    
    41,953
    
    
    
    64,396Net cash (used in) provided by financing activities
    
    
    (1,356,661
    )
    
    
    (777,618
    )Net increase in cash and cash equivalents
    
    
    41,348
    
    
    
    32,885Cash and cash equivalents at beginning of period
    
    
    170,086
    
    
    
    154,744Cash and cash equivalents at end of period
    
    $
    211,434
    
    
    $
    187,629


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 Compensation,are as follows:

(In thousands, except per share data)
    
    Nine Months Ended September 30,
    
    Three Months Ended September 30,2003
    
    2002
    
    2003
    
    2002Net income before cumulative effect
of a change in accounting principleReported
    
    $
    958,375
    
    
    $
    540,879
    
    
    $
    636,029
    
    
    $
    212,514Pro forma stock compensation
expense, net of tax
    
    
    (34,264
    )
    
    
    (39,232
    )
    
    
    (10,299
    )
    
    
    (13,027
    )Pro Forma
    
    $
    924,111
    
    
    $
    501,647
    
    
    $
    625,730
    
    
    $
    199,487Net income before cumulative effect
of a change in accounting principle
per common shareBasic:Reported
    
    $
    1.56
    
    
    $
    .89
    
    
    $
    1.03
    
    
    $
    .35Pro Forma
    
    $
    1.50
    
    
    $
    .83
    
    
    $
    1.02
    
    
    $
    .33Diluted:Reported
    
    $
    1.55
    
    
    $
    .88
    
    
    $
    1.03
    
    
    $
    .34Pro Forma
    
    $
    1.49
    
    
    $
    .81
    
    
    $
    1.01
    
    
    $
    .32


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
    
    2002Risk-free interest rate
    
    
    2.91% - 3.81%
    
    
    
    2.85% - 5.33%Dividend yield
    
    
    0% - 1.01%
    
    
    
    0%Volatility factors
    
    
    43% - 47%
    
    
    
    36% - 49%Expected life in years
    
    
    5.0 - 7.5
    
    
    
    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(FIN 45).
FIN 45 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. FIN 45s disclosure requirements were effective for
financial statements of interim or annual periods ending after December 15,
2002. FIN 45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 FIN 45 did not materially impact the Companys financial
position or results of operations.

On January 1, 2003, the Financial Accounting Standards Board issued Financial
Accounting Standards Board Interpretation No. 46, Consolidation of Variable
Interest Entities(FIN 46). FIN 46 addresses consolidation of business
enterprises of variable interest entities. FIN 46 is effective immediately for
all variable interest entities created after January 31, 2003 and for the first
fiscal year or interim period ending after December 15, 2003 for variable
interest entities in which an enterprise holds a variable interest that it
acquired before February 1, 2003. The Company has not acquired any variable
interest entities subsequent to January 31, 2003 and will therefore adopt FIN
46 for its annual report for the year ending December 31, 2003. The Company
has certain investments, accounted for under the equity method, that include a
put and call structure that guarantees a minimum return to the counterparty.
The Company also has certain long-term contracts related to the programming
and/or sale of advertising air time for radio stations that it does not own.
The Company is currently evaluating the applicability of FIN 46 to these
arrangements, as well as other equity investments and arrangements, and the
possible impact on its future consolidated results of operation and
consolidated balance sheet.

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 September 30, 2003 and December 31, 2002:

(In thousands)
    
    September 30, 2003
    
    December 31, 2002Gross Carrying
    
    Accumulated
    
    Gross Carrying
    
    AccumulatedAmount
    
    Amortization
    
    Amount
    
    AmortizationTransit, street
furniture, and other
outdoor contractual
rights
    
    $
    639,353
    
    
    $
    282,367
    
    
    $
    600,221
    
    
    $
    228,037Talent contracts
    
    
    202,161
    
    
    
    125,150
    
    
    
    212,326
    
    
    
    112,259Representation contracts
    
    
    201,990
    
    
    
    55,503
    
    
    
    197,636
    
    
    
    37,846Other
    
    
    214,297
    
    
    
    103,010
    
    
    
    219,410
    
    
    
    89,723Total
    
    $
    1,257,801
    
    
    $
    566,030
    
    
    $
    1,229,593
    
    
    $
    467,865


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Total amortization expense from definite-lived intangible assets for the three
and nine months ended September 30, 2003 and for the year ended December 31,
2002 was $33.4 million, $103.3 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
    
    $
    122,0072005
    
    
    102,4842006
    
    
    87,7652007
    
    
    62,6392008
    
    
    47,157


As acquisitions and dispositions 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 11, 2001.

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 nine-month period ended September 30, 2003:

(In thousands)
    
    Radio
    
    Outdoor
    
    Entertainment
    
    Other
    
    TotalBalance as of December 31, 2002
    
    $
    6,416,146
    
    
    $
    640,966
    
    
    $
    155,377
    
    
    $
    28,742
    
    
    $
    7,241,231Acquisitions
    
    
    2,959
    
    
    
    12,506
    
    
    
    1,704
    
    
    
    
    
    
    
    17,169Foreign currency
    
    
    
    
    
    
    22,789
    
    
    
    3,554
    
    
    
    
    
    
    
    26,343Adjustments
    
    
    (13
    )
    
    
    5,596
    
    
    
    (18,603
    )
    
    
    
    
    
    
    (13,020
    )Balance as of September 30, 2003
    
    $
    6,419,092
    
    
    $
    681,857
    
    
    $
    142,032
    
    
    $
    28,742
    
    
    $
    7,271,723


Note 3: SECURED FORWARD EXCHANGE CONTRACT

On June 5, 2003, Clear Channel Investments, Inc. (CCI, Inc.), a wholly owned
subsidiary of the Company, entered into a five-year secured forward exchange
contract (the contract) with respect to 8.3 million shares of its investment
in XM Satellite Radio Holdings, Inc. (XMSR). Under the terms of the
contract, the counterparty paid $83.5 million at inception of the contract,
which the Company classified in Other long-term borrowings. The contract has
a maturity value of $98.8 million, with an effective interest rate of 3.4%,
which the Company will accrete over the life of the contract using the
effective interest method. CCI, Inc. retains ownership of the XMSR shares
during the term of the contract.

Upon maturity of the contract, CCI, Inc. is obligated to deliver to the
counterparty, at CCI, Inc.s option, cash or a number of shares of XMSR equal
to the cash payment, but no more than 8.3 million XMSR shares. The contract
hedges the Companys cash flow exposure of the forecasted sale of the XMSR
shares by purchasing a put option and selling the counterparty a call option
(the collar)

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on the XMSR shares. The net cost of the collar was $.5 million, which the
Company initially classified in other long-term assets. The collar effectively
limits the Companys cash flow exposure upon the forecasted sale of XMSR shares
to the counterparty between $11.86 and $15.58 per XMSR share.

The collar meets the requirements of Statement 133 Implementation Issue G20,
Assessing and Measuring the Effectiveness of a Purchased Option Used in a Cash
Flow Hedge. Under this guidance, complete hedging effectiveness is assumed and
the entire change in fair value of the collar is recorded in other
comprehensive income. Annual assessments are required to ensure that the
critical terms of the contract have not changed. As of September 30, 2003, the
fair value of the collar was a $10.5 million liability, and the amount recorded
in other comprehensive income, net of tax, related to the change in fair value
of the collar for the three and nine months ended September 30, 2003 was $9.7
million and $6.8 million, respectively.

Also included in Other long-term borrowings is CCI, Inc.s obligation under
its secured forward exchange contracts on its investment in American Tower
Corporation (AMT). In 2001, CCI, Inc. entered into two ten-year secured
forward exchange contracts that monetized 2.9 million shares of its investment
in AMT. The AMT contracts had a value of $67.1 million and $64.1 million at
September 30, 2003 and December 31, 2002, respectively.

Note 4: RECENT DEVELOPMENTS

Hispanic Broadcasting Merger with Univision

On September 22, 2003, Univision Communications, Inc. (Univision), a Spanish
language media group, completed its acquisition of Hispanic Broadcasting
Corporation (Hispanic), in a stock-for-stock merger. Pursuant to the terms
of the merger agreement, each share of Hispanic converted into 0.85 of a share
of Univision. As a result, the Company received approximately 24.1 million
shares of Univision in exchange for its 26% investment in Hispanic. Prior to
the merger of Hispanic with Univision, the Company owned 26 percent of Hispanic
and accounted for its investment under the equity method of accounting. After
the merger, the Company accounts for its investment under the cost method of
accounting, as it now owns less than 20 percent of Univision. Upon the closing
of the merger on September 22, 2003, and the exchange of Hispanic shares for
Univision shares, the Companys investment in Univision was recorded at fair
value with a resulting non-cash gain of $657.3 million being recorded in Gain
(loss) on marketable securities and corresponding deferred tax expense of
$249.8 million.

On September 23, 2003, the Company sold 8.3 million of its shares of Univision
in accordance with Rule 145 under the Securities Act of 1933, as amended, and
received proceeds of $281.7 million resulting in the recognition of a loss of
$6.4 million, which was recorded as Gain (loss) on marketable securities.
Although a book loss was recorded, a taxable gain was recognized resulting in
the recognition of $89.2 million of current tax expense.

Recent Legal Proceedings

At the Senate Judiciary Committee hearing on July 24, 2003, the Assistant
United States Attorney General announced that the Department of Justice (the
DOJ), is pursuing two separate antitrust inquiries concerning the Company.
One inquiry is whether the Company has violated antitrust laws in one of its
radio markets. The other is whether the Company has limited airplay of artists
who do not use its concert services in violation of antitrust laws. The
Company is cooperating fully with all DOJ requests.

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

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 an appeal with the 11th Circuit Court of Appeals.

Note 5: 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

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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 September
30, 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
for Ackerley, SFX and AMFM, primarily related to severance for terminated
employees and lease terminations as follows:

(In thousands)
    
    Nine Months Ended
    
    Year endedSeptember 30, 2003
    
    December 31, 2002Severance and lease termination costs:Accrual at January 1
    
    $
    73,573
    
    
    $
    53,182Estimated costs charged to restructuring
accrual in purchase accounting
    
    
    
    
    
    
    40,043Adjustments to restructuring accrual
    
    
    
    
    
    
    (4,162
    )Payments charged against restructuring accrual
    
    
    (14,946
    )
    
    
    (15,490
    )Ending balance of severance and lease
termination accrual
    
    $
    58,627
    
    
    $
    73,573


The remaining severance and lease accrual is comprised of $40.1 million of
severance and $18.5 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 nine
months ended September 30, 2003, $4.7 million was paid and charged to the
restructuring reserve related to severance. The purchase price allocation
related to the Ackerley merger was 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.

In addition to the restructuring described above, the Company restructured its
outdoor advertising operations in France during the second quarter of 2003. As
a result, the Company has recorded a $13.5 million accrual in divisional
operating expenses. Of the $13.5 million, $12.3 million is related to
severance and $1.2 million is related to lease terminations and consulting
costs. As of September 30, 2003, this accrual balance was $8.5 million. This
restructuring has resulted in the termination of 134 employees.

Note 6: CAPITAL MARKET TRANSACTIONS

On January 9, 2003, the Company 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 the Companys 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.

On February 10, 2003, the Company redeemed 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, the Company redeemed 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. These notes were redeemed pursuant to call provisions in the
indentures governing the notes.

On March 17, 2003, the Company 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 its bank credit facilities and to finance
the redemption of all of the Companys 4.75% LYONs due 2008. As a result of
the redemption, the Company recognized a non-cash gain on the extinguishment of
debt of $41.3 million during the second quarter of 2003, recorded in Other
income (expense)  net.

On May 1, 2003, the Company 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 Companys $1.5 billion three-year term loan. In conjunction
with the issuance, the Company 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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On May 21, 2003, the Company completed a debt offering of $250.0 million 4.40%
notes due May 15, 2011 and $250.0 million 4.90% notes due May 15, 2015.
Interest is payable on May 15 and November 15 on both series of notes. The
aggregate net proceeds of approximately $496.1 million were used to repay
borrowings outstanding on the Companys $1.5 billion three-year term loan.

Note 7: 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.

In addition to the legal proceedings discussed in Note 4, 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 8: GUARANTEES

As of September 30, 2003, the Company guaranteed third-party debt of
approximately $75.1 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 September
30, 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 September
30, 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 nine months ended September 30, 2003, the
Company did not enter into any new guarantees of third-party debt.

The Company has provided a guarantee under a certain performance contract of
approximately $77.4 million that expires in 2004. As of September 30, 2003,
the remaining amount of the guarantee is $19.3 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 nine months of 2003, the
Company made payments of $4.0 million under this guarantee. As of September
30, 2003, the Company has a liability recorded and classified in Other current
liabilities on its financial statements of approximately $4.3 million for
unpaid shortfalls under this guarantee for the contract period of 2003. As of
September 30, 2003, the Company cannot reasonably estimate whether it will have
to make any future payments under this guarantee for the remaining contract
period. As such, possible losses on this executory performance contract will
be appropriately recorded in the period that they are incurred. During the
nine months ended September 30, 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 September 30, 2003, the outstanding balance on the credit
facility was $55.7 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 three-year term loan with
outstanding balances at September 30, 2003, of $475.0 million, $1.6 million,
and $200.0 million, respectively. At September 30, 2003, the contingent
liability under these guarantees was $1.0 billion. At September 30, 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.

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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 $63.8 million. As of
September 30, 2003, no amounts were outstanding under these agreements.

As of September 30, 2003, the Company has outstanding commercial standby
letters of credit and surety bonds of $122.5 million and $56.2 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 9: OTHER

The results of operations for the nine months ended September 30, 2002 only
include the operations of Ackerley as of June 14, 2002, as the Company acquired
Ackerley on June 14, 2002. Unaudited pro forma consolidated results of
operations for the nine months ended September 30, 2002, assuming the Ackerley
acquisition had occurred on January 1, 2002 would have been as follows:

(In thousands, except per share data)Revenue
    
    $
    6,291,331Income before cumulative effect of a change in accounting
principle
    
    $
    529,822Net loss
    
    $
    (16,248,704
    )Income before cumulative effect of a change in accounting
principle per common share  Basic
    
    $
    .87Net loss per common share  Basic
    
    $
    (26.55
    )Income before cumulative effect of a change in accounting
principle per common share  Diluted
    
    $
    .86Net loss per common share  Diluted
    
    $
    (25.63
    )


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 10: SEGMENT DATA

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

Radio
    
    Outdoor
    
    Live(In thousands)
    
    Broadcasting
    
    Advertising
    
    Entertainment
    
    Other
    
    Corporate
    
    Eliminations
    
    ConsolidatedNine Months Ended
September 30, 2003Revenue
    
    $
    2,729,234
    
    
    $
    1,559,791
    
    
    $
    2,050,015
    
    
    $
    403,961
    
    
    $
    
    
    
    $
    (102,163
    )
    
    $
    6,640,838Divisional operating
expenses
    
    
    1,568,487
    
    
    
    1,170,047
    
    
    
    1,879,818
    
    
    
    329,120
    
    
    
    
    
    
    
    (102,163
    )
    
    
    4,845,309Non-cash compensation
    
    
    1,326
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,132
    
    
    
    
    
    
    
    3,458Depreciation and
amortization
    
    
    114,525
    
    
    
    272,306
    
    
    
    44,659
    
    
    
    38,470
    
    
    
    17,364
    
    
    
    
    
    
    
    487,324Corporate expenses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    129,288
    
    
    
    
    
    
    
    129,288Operating income (loss)
    
    $
    1,044,896
    
    
    $
    117,438
    
    
    $
    125,538
    
    
    $
    36,371
    
    
    $
    (148,784
    )
    
    $
    
    
    
    $
    1,175,459Identifiable assets
    
    $
    19,789,121
    
    
    $
    4,784,424
    
    
    $
    1,377,791
    
    
    $
    1,762,611
    
    
    $
    451,429
    
    
    $
    
    
    
    $
    28,165,376Capital expenditures
    
    $
    39,214
    
    
    $
    127,863
    
    
    $
    48,234
    
    
    $
    12,997
    
    
    $
    2,861
    
    
    $
    
    
    
    $
    231,169


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Radio
    
    Outdoor
    
    Live(In thousands)
    
    Broadcasting
    
    Advertising
    
    Entertainment
    
    Other
    
    Corporate
    
    Eliminations
    
    ConsolidatedThree Months Ended
September 30, 2003Revenue
    
    $
    963,635
    
    
    $
    540,089
    
    
    $
    936,213
    
    
    $
    139,238
    
    
    $
    
    
    
    $
    (35,029
    )
    
    $
    2,544,146Divisional operating
expenses
    
    
    536,495
    
    
    
    391,004
    
    
    
    839,402
    
    
    
    110,457
    
    
    
    
    
    
    
    (35,029
    )
    
    
    1,842,329Non-cash compensation
    
    
    310
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    570
    
    
    
    
    
    
    
    880Depreciation and
amortization
    
    
    38,449
    
    
    
    93,869
    
    
    
    14,914
    
    
    
    13,394
    
    
    
    5,256
    
    
    
    
    
    
    
    165,882Corporate expenses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    44,050
    
    
    
    
    
    
    
    44,050Operating income (loss)
    
    $
    388,381
    
    
    $
    55,216
    
    
    $
    81,897
    
    
    $
    15,387
    
    
    $
    (49,876
    )
    
    $
    
    
    
    $
    491,005Nine Months Ended
September 30, 2002Revenue
    
    $
    2,738,228
    
    
    $
    1,321,344
    
    
    $
    1,884,803
    
    
    $
    362,094
    
    
    $
    
    
    
    $
    (95,147
    )
    
    $
    6,211,322Divisional operating
expenses
    
    
    1,575,325
    
    
    
    970,794
    
    
    
    1,739,364
    
    
    
    285,413
    
    
    
    
    
    
    
    (95,147
    )
    
    
    4,475,749Non-cash compensation
    
    
    3,680
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    539
    
    
    
    
    
    
    
    4,219Depreciation and
amortization
    
    
    115,475
    
    
    
    240,178
    
    
    
    45,088
    
    
    
    30,570
    
    
    
    17,871
    
    
    
    
    
    
    
    449,182Corporate expenses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    122,557
    
    
    
    
    
    
    
    122,557Operating income (loss)
    
    $
    1,043,748
    
    
    $
    110,372
    
    
    $
    100,351
    
    
    $
    46,111
    
    
    $
    (140,967
    )
    
    $
    
    
    
    $
    1,159,615Identifiable assets
    
    $
    19,829,298
    
    
    $
    4,561,203
    
    
    $
    1,360,556
    
    
    $
    1,444,013
    
    
    $
    493,336
    
    
    $
    
    
    
    $
    27,688,406Capital expenditures
    
    $
    60,958
    
    
    $
    191,584
    
    
    $
    39,490
    
    
    $
    27,181
    
    
    $
    19,316
    
    
    $
    
    
    
    $
    338,529Three Months Ended
September 30, 2002Revenue
    
    $
    964,123
    
    
    $
    478,188
    
    
    $
    789,793
    
    
    $
    143,844
    
    
    $
    
    
    
    $
    (35,523
    )
    
    $
    2,340,425Divisional operating
expenses
    
    
    546,133
    
    
    
    346,718
    
    
    
    710,947
    
    
    
    112,096
    
    
    
    
    
    
    
    (35,523
    )
    
    
    1,680,371Non-cash compensation
    
    
    903
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    33
    
    
    
    
    
    
    
    936Depreciation and
amortization
    
    
    40,562
    
    
    
    87,850
    
    
    
    14,629
    
    
    
    11,361
    
    
    
    6,101
    
    
    
    
    
    
    
    160,503Corporate expenses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    44,385
    
    
    
    
    
    
    
    44,385Operating income (loss)
    
    $
    376,525
    
    
    $
    43,620
    
    
    $
    64,217
    
    
    $
    20,387
    
    
    $
    (50,519
    )
    
    $
    
    
    
    $
    454,230


Net revenue of $1.3 billion and $486.7 million for the nine and three months
ended September 30, 2003, respectively, and $1.1 billion and $391.4 million for
the nine and three months ended September 30, 2002, respectively, and
identifiable assets of $2.4 billion and $2.1 billion as of September 30, 2003
and 2002, respectively, are included in the data above and are derived from the
Companys foreign operations.

Note 11: SUBSEQUENT EVENTS

On October 6, 2003, the Company exercised a call provision on its 7.875% senior
notes due June 15, 2005. The redemption price of $842.6 million included the
principal amount of $750.0 million, a premium of $74.4 million and $18.2
million of accrued interest. In conjunction with calling these senior notes,
the Company terminated the two interest rate swap agreements associated with
the notes and received proceeds of $83.8 million. As a result of calling these
notes and terminating the associated swap agreement, the Company recognized a
pre-tax net loss of $4.7 million.

On October 23, 2003, the Companys Board of Directors declared a quarterly cash
dividend of $0.10 per share on the Companys Common Stock. The dividend is
payable on January 15, 2004 to shareholders of record at the close of business
on December 31, 2003.

On November 5, 2003, the Company commenced a debt offering of $250.0 million
aggregate principal amount of 3.125% senior notes due February 1, 2007.
Interest on these notes will be payable each February 1 and August 1 commencing
August 1, 2004. The Company anticipates that it will receive the net proceeds
from this offering on November 14, 2003. The net proceeds will be used to
repay borrowings outstanding on the Companys credit facilities. In
conjunction with the issuance, the Company anticipates entering into an
interest rate swap agreement with a $250.0 million notional amount that
effectively floats interest at a rate based upon six-month LIBOR. A
registration statement relating to the notes has been filed with and declared
effective by the Securities and Exchange Commission. This report shall not
constitute an offer to sell or the solicitation of an offer to buy the notes,
and any offering of notes shall be made only by means of a prospectus.

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##### Table of Contents









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 Unaudited 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 in the United
States 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.

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##### Table of Contents



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

Comparison of Three and Nine Months Ended September 30, 2003 to Three and
Nine Months Ended September 30, 2002.

Consolidated

(In thousands)
    
    Three Months Ended September 30,
    
    
    
    
    
    Nine Months Ended September 30,2003
    
    2002
    
    % Change
    
    2003
    
    2002
    
    % ChangeAs Reported Basis:Revenue
    
    $
    2,544,146
    
    
    $
    2,340,425
    
    
    
    9
    %
    
    $
    6,640,838
    
    
    $
    6,211,322
    
    
    
    7
    %Divisional Operating Expenses
    
    
    1,842,329
    
    
    
    1,680,371
    
    
    
    10
    %
    
    
    4,845,309
    
    
    
    4,475,749
    
    
    
    8
    %Corporate Expenses
    
    
    44,050
    
    
    
    44,385
    
    
    
    (1
    %)
    
    
    129,288
    
    
    
    122,557
    
    
    
    5
    %EBITDA as Adjusted *
    
    
    657,767
    
    
    
    615,669
    
    
    
    7
    %
    
    
    1,666,241
    
    
    
    1,613,016
    
    
    
    3
    %Reconciliation to net income (loss):Non-cash compensation expense
    
    
    880
    
    
    
    936
    
    
    
    
    
    
    
    3,458
    
    
    
    4,219Depreciation and amortization
    
    
    165,882
    
    
    
    160,503
    
    
    
    
    
    
    
    487,324
    
    
    
    449,182Interest expense
    
    
    98,192
    
    
    
    107,935
    
    
    
    
    
    
    
    294,455
    
    
    
    326,652Gain (loss) on sale of assets related
to mergers
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,991Gain (loss) on marketable securities
    
    
    675,027
    
    
    
    (16,009
    )
    
    
    
    
    
    
    680,400
    
    
    
    (7,108
    )Equity in earnings of nonconsolidated
affiliates
    
    
    2,957
    
    
    
    5,906
    
    
    
    
    
    
    
    12,005
    
    
    
    16,619Other income (expense)  net
    
    
    (1,840
    )
    
    
    20,974
    
    
    
    
    
    
    
    37,304
    
    
    
    62,575Income tax benefit (expense)  current
    
    
    (159,051
    )
    
    
    (25,321
    )
    
    
    
    
    
    
    (199,377
    )
    
    
    (231,079
    )Income tax benefit (expense) -
deferred
    
    
    (273,877
    )
    
    
    (119,331
    )
    
    
    
    
    
    
    (452,961
    )
    
    
    (137,082
    )Income before cumulative effect of a
change in accounting principle
    
    
    636,029
    
    
    
    212,514
    
    
    
    
    
    
    
    958,375
    
    
    
    540,879Cumulative effect of a change in
accounting principle, net of tax of
$4,324,446
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (16,778,526
    )Net income (loss)
    
    $
    636,029
    
    
    $
    212,514
    
    
    
    
    
    
    $
    958,375
    
    
    $
    (16,237,647
    )* See page 15 for cautionary disclosureOther Data:Cash Flow from Operating Activities
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    1,338,736
    
    
    $
    1,253,830Cash Flow from Investing Activities
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    59,273
    
    
    $
    (443,327
    )Cash Flow from Financing Activities
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    (1,356,661
    )
    
    $
    (777,618
    )Pro Forma Basis:Revenue
    
    $
    2,488,673
    
    
    $
    2,358,159
    
    
    
    6
    %
    
    $
    6,452,047
    
    
    $
    6,317,350
    
    
    
    2
    %Divisional Operating Expenses
    
    
    1,795,611
    
    
    
    1,697,452
    
    
    
    6
    %
    
    
    4,676,972
    
    
    
    4,575,378
    
    
    
    2
    %Reconciliation of Reported Basis to
Pro Forma BasisReported Revenue
    
    $
    2,544,146
    
    
    $
    2,340,425
    
    
    
    
    
    
    $
    6,640,838
    
    
    $
    6,211,322Acquisitions
    
    
    
    
    
    
    27,209
    
    
    
    
    
    
    
    
    
    
    
    137,615Divestitures
    
    
    (2,466
    )
    
    
    (9,475
    )
    
    
    
    
    
    
    (4,479
    )
    
    
    (31,587
    )Foreign Exchange adjustments
    
    
    (53,007
    )
    
    
    
    
    
    
    
    
    
    
    (184,312
    )
    
    
    Pro Forma Revenue
    
    $
    2,488,673
    
    
    $
    2,358,159
    
    
    
    
    
    
    $
    6,452,047
    
    
    $
    6,317,350Reported Divisional Operating Expenses
    
    $
    1,842,329
    
    
    $
    1,680,371
    
    
    
    
    
    
    $
    4,845,309
    
    
    $
    4,475,749Acquisitions
    
    
    
    
    
    
    24,138
    
    
    
    
    
    
    
    
    
    
    
    124,553Divestitures
    
    
    23
    
    
    
    (7,057
    )
    
    
    
    
    
    
    (3,024
    )
    
    
    (24,924
    )Foreign Exchange adjustments
    
    
    (46,741
    )
    
    
    
    
    
    
    
    
    
    
    (165,313
    )
    
    
    Pro Forma Divisional Operating Expenses
    
    $
    1,795,611
    
    
    $
    1,697,452
    
    
    
    
    
    
    $
    4,676,972
    
    
    $
    4,575,378


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Consolidated Revenue and Divisional Operating Expenses

The increase in reported revenue and divisional operating expenses for
the three and nine months ended September 30, 2003 as compared to the same
periods of 2002 was impacted by foreign currency gains in our outdoor and
live entertainment segments. In the aggregate, foreign currency movements
contributed $53.0 million for revenue and $46.7 million for divisional
operating expenses for the three months ended September 30, 2003, and $184.3
million for revenue and $165.3 million for divisional operating expenses for
the nine months ended September 30, 2003. Revenue and divisional operating
expenses also increased on a reported basis due to our acquisition of
Ackerley, which was completed in June 2002. The reported amounts for the
nine months ended September 30, 2002 only include operations of Ackerley
beginning in June 2002. Ackerley contributed $90.2 million in revenue and
$68.1 million in divisional operating expense during the first six months of
2003.


Pro forma and reported basis revenue increased for the three and nine
months ended September 30, 2003 primarily in our entertainment segment, which
contributed 72% of the reported revenue increase and 85% of the pro forma
revenue increase for the three months ended September 30, 2003 as compared to
the same period of 2002. Our live entertainment segment has benefited
throughout the year from increased attendance and increases in ancillary
revenues such as sponsorships and concessions. Pro forma and reported basis
revenue also increased in our outdoor segment. Our domestic outdoor business
has seen revenue increases throughout 2003 from its bulletin, shelter, and
transit inventory. Quarter over quarter, our average transit and bulletin
rates were up and our average shelter and poster rates were slightly down.
Average occupancy on our transit, bulletin and shelter inventory was up and
average poster occupancy was slightly down. Year to date 2003, our average
rates and occupancy on our posters were slightly down while average rates and
occupancy on our bulletins were up compared to the same period of 2002. Our
international outdoor business experienced pro forma revenue increases on its
street furniture and transit inventories, offset by a slight decline in its
billboard revenues during the third quarter of 2003 as compared to the same
period of 2002. We have experienced this trend throughout the year, with
transit and street furniture revenues up, and billboard revenues down in a
soft billboard market in France and Spain.

Our radio segments revenue was essentially flat on both a reported and
pro forma basis for the three and nine months ended September 30, 2003 as
compared to the same periods of 2002.

Pro forma basis divisional operating expenses increased for the three
and nine months ended September 30, 2003 primarily due to our outdoor and
live entertainment segments. Increases in these expenses in our outdoor
segment are related to direct production costs, site lease expenses, bonus
and commission expenses associated with the increase in revenue while the
increase in these expenses in our live entertainment segment relates to
increased operating and talent costs associated with the increase in revenue.

Our radio segments pro forma and reported basis divisional operating
expenses were down for the three and nine months ended September 30, 2003 as
compared to the same periods of 2002. The decrease was driven by declines in
bonus, bad debt, and commission expenses. Also, our focus on trimming low
margin non-traditional revenue business has reduced expenses during 2003. Also
contributing to the divisional operating expense decline was a decrease in
expenses from our national syndication business, which was primarily due to a
focus on higher margin programs, resulting in a reduction in employees and
radio programs.

Corporate Expenses

Corporate expenses remained relatively flat for the three months ended
September 30, 2003, while they increased $6.7 million for the nine months
ended September 30, 2003 as compared to the same periods of 2002. The
increase resulted from additional expenses related to outside legal and other
consulting services as well as increased insurance costs that we incurred
during 2003.


Depreciation and Amortiation

Depreciation and amortization expense increased $5.4 million and $38.1
million for the three and nine months ended September 30, 2003, respectively,
compared to the same periods of 2002. The increase is primarily related to
increases in our outdoor segment, caused by prior year capital expenditures
in our international outdoor business associated with revenue producing
assets, the devaluation of the dollar relative to our international
functional currencies and accelerated depreciation recorded on display
takedowns and abandonments in our domestic outdoor business.


Interest Expense

Interest expense decreased $9.7 million and $32.2 million for the three
and nine months ended September 30, 2003, respectively, as compared to the
same periods of 2002. The decrease in interest expense resulted from lower
LIBOR rates on our floating rate debt and the refinancing of debt, which
allowed us to take advantage of the lower interest rate environment in 2003.
LIBOR was 1.12% and 1.81% at September 30, 2003 and 2002, respectively.
Additionally, a decrease in our total debt outstanding


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resulted in lower interest expense for the three and nine months ended
September 30, 2003 as compared to the same periods of 2002. Outstanding debt
was $7.3 billion and $9.1 billion at September 30, 2003 and 2002,
respectively.

Gain (loss) on Marketable Securities

The gain on marketable securities for the three months ended September
30, 2003 relates primarily to the conversion of our Hispanic Broadcasting
Corporation investment, which had been accounted for as an equity method
investment, to Univision Communications Inc. shares, which were recorded as
an available-for-sale cost investment. On September 22, 2003, Univision
completed its acquisition of Hispanic in a stock-for-stock merger. As a
result, we received shares of Univision, which we recorded on our balance
sheet at the date of the merger at their fair value. The exchange of our
Hispanic investment into our Univision investment resulted in a $657.3
million pre-tax book gain. In addition, on September 23, 2003, we sold a
portion of our Univision investment, which resulted in a pre-tax book loss of
$6.4 million. Also during the quarter ended September 30, 2003 we recorded a
$34.7 million gain related to the sale of a marketable security and a $3.6
million loss on a forward exchange contract and its underlying investment.
Finally, during the same period, we recorded an impairment charge on a radio
technology investment for $7.0 million due to a decline in its market value
that was considered to be other-than-temporary.


For the quarter ended September 30, 2002, we recorded a $9.3 million
gain on a forward exchange contract and its underlying investment and an
impairment charge of $25.3 million on an investment in a media company that
had a decline in its market value that was considered to be
other-than-temporary.

For the nine months September 30, 2003, the gain on marketable
securities relates to the following:

(In millions)Gain on conversion of Hispanic to Univision
    
    $
    657.3Sale of Univision shares
    
    
    (6.4
    )Impairment of a media investment
    
    
    (7.0
    )Forward exchange contract
    
    
    (1.3
    )Gain on sale of marketable securities
    
    
    37.8$
    680.4


For the nine months ended September 30, 2002, a loss of $7.1 million was
recorded primarily relating to a $25.3 million impairment charge on an
investment in a media company that had a decline in its market value that was
considered to be other-than-temporary, partially offset by
$18.2 million in gains on a forward
exchange contract and its underlying investment.

Other Income (Expense)  Net

Other income (expense)  net was expense of $1.8 million for the third
quarter of 2003 versus income of $21.0 million for the third quarter of 2002.
The income reported in 2002 primarily relates to a $21.7 million aggregate
gain on the sale of a television license and the early extinguishment of
certain debt.


Other income (expense)  net was income of $37.3 million for the nine
months ended September 30, 2003, a decrease of $25.3 million from the income
of $62.6 million reported for the nine months ended September 30, 2002. The
income recognized in 2003 related primarily to a $41.3 million gain on the
early extinguishment of the 4.75% Liquid Yield Option Notes due 2018. The
income recognized in 2002 related to an aggregate $44.5 million gain from:
(1) the sale of a television license, (2) the sale of assets in our live
entertainment segment, and (3) the sale of our interest in a British radio
license. In addition, for the nine months ended September 30, 2002, we
recognized a gain of $12.0 million on the early extinguishment of debt, an
$11.9 million gain on the sale of contracts recorded as part of a final
settlement of a dispute with a third-party representation firm, a gain of
$1.3 million on various miscellaneous items, offset by a $7.1 million foreign
exchange loss associated with interest payments on our Euro-denominated debt.

Income Taxes

Current tax expense increased $133.7 million and decreased $31.7 million
for the three and nine months ended September 30, 2003, respectively.
Current tax expense for the three months ended September 30, 2003 includes
$105.6 million related to the sale of a portion of our Univision investment.
Although a book loss was recorded in Gain (loss) on marketable securities
during the three months ended September 30, 2003 related to the sale of a
portion of our Univision investment, a large taxable gain was realized based
on the difference between the market value of our Univision investment and
our historical tax basis in our Hispanic investment. Also included in
current tax expense for the three months ended September 30, 2003, is $14.1
million related to the sale of a marketable security.


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Deferred tax expense increased $154.5 million and decreased $315.9
million for the three and nine months ended September 30, 2003, respectively.
Deferred tax expense for the three months ended September 30, 2003 includes
$158.0 million related to the conversion of our Hispanic shares to Univision
shares, partially offset by the effect on deferred taxes related to the
subsequent sale of a portion of our Univision investment. Although a book
gain was recorded in Gain (loss) on marketable securities during the three
months ended September 30, 2003 related to the conversion of our Hispanic
investment, which was accounted for as an equity method investment, to
Univision, which is carried on our balance sheet at fair value, the gain is
not taxable. As a result, deferred tax expense increased during the three
months ended September 30, 2003.

Deferred tax expense for the nine months ended September 30, 2002
includes one-time deferred tax benefits of $95.9 million. This amount is
comprised of the deferred tax benefit associated with a lawsuit settlement,
partially offset by deferred tax expenses associated with the extinguishment
of debt and the sale of a television license.

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 September 30,
    
    
    
    
    
    Nine Months Ended September 30,2003
    
    2002
    
    % Change
    
    2003
    
    2002
    
    % ChangeAs Reported Basis:Revenue
    
    $
    963,635
    
    
    $
    964,123
    
    
    
    0
    %
    
    $
    2,729,234
    
    
    $
    2,738,228
    
    
    
    0
    %Divisional Operating Expenses
    
    
    536,495
    
    
    
    546,133
    
    
    
    (2
    %)
    
    
    1,568,487
    
    
    
    1,575,325
    
    
    
    0
    %EBITDA as Adjusted *
    
    $
    427,140
    
    
    $
    417,990
    
    
    
    2
    %
    
    $
    1,160,747
    
    
    $
    1,162,903
    
    
    
    0
    %* See page 15 for cautionary disclosurePro Forma Basis:Revenue
    
    $
    963,635
    
    
    $
    964,170
    
    
    
    0
    %
    
    $
    2,728,889
    
    
    $
    2,751,335
    
    
    
    (1
    %)Divisional Operating Expenses
    
    
    536,495
    
    
    
    545,859
    
    
    
    (2
    %)
    
    
    1,567,596
    
    
    
    1,586,975
    
    
    
    (1
    %)Reconciliation of Reported Basis
to Pro Forma BasisReported Revenue
    
    $
    963,635
    
    
    $
    964,123
    
    
    
    
    
    
    $
    2,729,234
    
    
    $
    2,738,228Acquisitions
    
    
    
    
    
    
    939
    
    
    
    
    
    
    
    
    
    
    
    16,032Divestitures
    
    
    
    
    
    
    (892
    )
    
    
    
    
    
    
    (345
    )
    
    
    (2,925
    )Foreign Exchange adjustments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Pro Forma Revenue
    
    $
    963,635
    
    
    $
    964,170
    
    
    
    
    
    
    $
    2,728,889
    
    
    $
    2,751,335Reported Divisional Operating Expenses
    
    $
    536,495
    
    
    $
    546,133
    
    
    
    
    
    
    $
    1,568,487
    
    
    $
    1,575,325Acquisitions
    
    
    
    
    
    
    944
    
    
    
    
    
    
    
    
    
    
    
    15,472Divestitures
    
    
    
    
    
    
    (1,218
    )
    
    
    
    
    
    
    (891
    )
    
    
    (3,822
    )Foreign Exchange adjustments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Pro Forma Divisional Operating Expenses
    
    $
    536,495
    
    
    $
    545,859
    
    
    
    
    
    
    $
    1,567,596
    
    
    $
    1,586,975


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##### Table of Contents



Revenue
was essentially flat on both a reported and pro forma basis for the three and
nine months ended September 30, 2003, compared to the same periods of 2002. In
general, revenue performance from our top 50 markets outpaced our smaller
markets during 2003 as compared to 2002. Revenue from our top 50 markets was
up $11.8 million, or 2%, and $12.9 million, or 1%, during the three and nine
months ended September 30, 2003, respectively, as compared to the same periods
of 2002. The strongest contributors were New York, San Francisco, Cincinnati,
Cleveland and Sacramento.

National advertising was up in the high single digits on a percentage
basis during 2003 as compared to 2002, which benefited our top 50 markets.
National advertising categories that showed strong growth over the third
quarter of 2002 were retail, finance, telecom/utility, travel, auto, and
entertainment.

Offsetting these advances in revenue were declines from our small markets
outside the top 50 of $6.8 million, or 3%, and $19.2 million, or 3%, during the
three and nine months ended September 30, 2003, respectively, as compared to
the same periods of 2002. Local advertising primarily drives these markets,
and it has remained sluggish throughout 2003. We also saw declines in revenue
streams from sports broadcasting rights that we did not renew such as those for
the L.A. Dodgers and Atlanta Falcons. Also, we no longer conduct business with
independent promoters, and we saw revenue declines from our national
syndication business during 2003 as compared to 2002.

Divisional operating expenses declined on both a reported and pro forma
basis during the three and nine months ended September 2003 as compared to the
same periods of 2002. The decline was driven by declines in bonus, bad debt,
and commission expenses. Also, our focus on trimming low margin
non-traditional revenue business has helped reduce expenses during 2003.
Consistent with their underperformance in revenue relative to our top 50
markets, our smaller markets were the biggest contributor to the decline in
divisional operating expenses during 2003. Divisional operating expenses also
decreased due to the reduction in sports broadcasting rights. Also
contributing to the divisional operating expense decline was a decline in
expenses from our national syndication business, which was primarily due to a
focus on higher margin programs resulting in a reduction in employees and radio
programs.

Outdoor Advertising

(In thousands)
    
    Three Months Ended September 30,
    
    
    
    
    
    Nine Months Ended September 30,2003
    
    2002
    
    % Change
    
    2003
    
    2002
    
    % ChangeAs Reported Basis:Revenue
    
    $
    540,089
    
    
    $
    478,188
    
    
    
    13
    %
    
    $
    1,559,791
    
    
    $
    1,321,344
    
    
    
    18
    %Divisional Operating Expenses
    
    
    391,004
    
    
    
    346,718
    
    
    
    13
    %
    
    
    1,170,047
    
    
    
    970,794
    
    
    
    21
    %EBITDA as Adjusted *
    
    $
    149,085
    
    
    $
    131,470
    
    
    
    13
    %
    
    $
    389,744
    
    
    $
    350,550
    
    
    
    11
    %* See page 15 for cautionary disclosurePro Forma Basis:Revenue
    
    $
    507,188
    
    
    $
    484,949
    
    
    
    5
    %
    
    $
    1,439,028
    
    
    $
    1,368,609
    
    
    
    5
    %Divisional Operating Expenses
    
    
    362,779
    
    
    
    351,208
    
    
    
    3
    %
    
    
    1,063,476
    
    
    
    1,010,048
    
    
    
    5
    %Reconciliation of Reported Basis to
Pro Forma BasisReported Revenue
    
    $
    540,089
    
    
    $
    478,188
    
    
    
    
    
    
    $
    1,559,791
    
    
    $
    1,321,344Acquisitions
    
    
    
    
    
    
    9,813
    
    
    
    
    
    
    
    
    
    
    
    53,969Divestitures
    
    
    
    
    
    
    (3,052
    )
    
    
    
    
    
    
    
    
    
    
    (6,704
    )Foreign Exchange adjustments
    
    
    (32,901
    )
    
    
    
    
    
    
    
    
    
    
    (120,763
    )
    
    
    Pro Forma Revenue
    
    $
    507,188
    
    
    $
    484,949
    
    
    
    
    
    
    $
    1,439,028
    
    
    $
    1,368,609Reported Divisional Operating Expenses
    
    $
    391,004
    
    
    $
    346,718
    
    
    
    
    
    
    $
    1,170,047
    
    
    $
    970,794Acquisitions
    
    
    
    
    
    
    8,236
    
    
    
    
    
    
    
    
    
    
    
    46,743Divestitures
    
    
    
    
    
    
    (3,746
    )
    
    
    
    
    
    
    
    
    
    
    (7,489
    )Foreign Exchange adjustments
    
    
    (28,225
    )
    
    
    
    
    
    
    
    
    
    
    (106,571
    )
    
    
    Pro Forma Divisional Operating Expenses
    
    $
    362,779
    
    
    $
    351,208
    
    
    
    
    
    
    $
    1,063,476
    
    
    $
    1,010,048


Pro forma basis revenue was up 5% for both the three and nine months ended
September 30, 2003 compared to the same periods of 2002. Domestically, we saw
revenue increases for the three months ended September 30, 2003 from our
bulletin, shelter,

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##### Table of Contents



and transit inventory, offset by declines in revenue from
our poster inventory. Quarter over quarter, our average transit and bulletin
rates were up and our average shelter and poster rates were slightly down.
Average occupancy on our transit, bulletin and shelter inventory was up and
average poster occupancy was slightly down. Year to date 2003, our average
rates and occupancy on our posters were slightly down while average rates and
occupancy on our bulletins were up compared to the same period of 2002. Strong
markets for the third quarter included New York, San Francisco, Los Angeles and
Miami.

Internationally, we experienced pro forma revenue increases on our street
furniture and transit inventories, offset by a slight decline in billboards
during the third quarter of 2003 compared to the same period of 2002. We have
experienced this trend throughout the year, with transit and street furniture
revenues up, and billboard revenues down on a soft billboard market in France
and Spain. At the end of the third quarter of 2003 compared to the third
quarter of 2002, our inventory of street furniture displays was up, with
billboard and transit inventory basically flat. Revenue per display during
these same periods was up on our entire inventory. Strong markets for our
street furniture inventory were Norway, Australia, Sweden, Spain, France and
the United Kingdom.

On a reported basis, roughly half of the increase in revenue and
divisional operating expenses for the three months ended September 30, 2003 was
caused by foreign currency gains of $32.9 million for revenue and $28.2 million
for divisional operating expenses. For the nine months ended September 30,
2003, currency gains were $120.8 million and $106.6 million for revenue and
divisional operating expenses, respectively. Also included in the nine month
reported basis increase are the operations of Ackerley, which we acquired in
June 2002. Therefore, we have nine months of Ackerley operations in 2003 where
we only had three months in 2002. Ackerleys operations contributed $35.4
million to reported basis revenue and $19.3 million to reported basis
divisional operating expenses for the first six months of 2003.

The pro forma basis increase in divisional operating expenses for the
three and nine months ended September 30, 2003 as compared to the same periods
of 2002 is related to direct production costs, site lease expenses, bonus and
commission expenses associated with the increase in revenue.

Live Entertainment

(In thousands)
    
    Three Months Ended September 30,
    
    
    
    
    
    Nine Months Ended September 30,2003
    
    2002
    
    % Change
    
    2003
    
    2002
    
    % ChangeAs Reported Basis:Revenue
    
    $
    936,213
    
    
    $
    789,793
    
    
    
    19
    %
    
    $
    2,050,015
    
    
    $
    1,884,803
    
    
    
    9
    %Divisional Operating Expenses
    
    
    839,402
    
    
    
    710,947
    
    
    
    18
    %
    
    
    1,879,818
    
    
    
    1,739,364
    
    
    
    8
    %EBITDA as Adjusted *
    
    $
    96,811
    
    
    $
    78,846
    
    
    
    23
    %
    
    $
    170,197
    
    
    $
    145,439
    
    
    
    17
    %* See page 15 for cautionary disclosurePro Forma Basis:Revenue
    
    $
    913,641
    
    
    $
    802,233
    
    
    
    14
    %
    
    $
    1,982,332
    
    
    $
    1,891,988
    
    
    
    5
    %Divisional Operating Expenses
    
    
    820,909
    
    
    
    723,812
    
    
    
    13
    %
    
    
    1,818,943
    
    
    
    1,749,353
    
    
    
    4
    %Reconciliation of Reported Basis
to Pro Forma BasisReported Revenue
    
    $
    936,213
    
    
    $
    789,793
    
    
    
    
    
    
    $
    2,050,015
    
    
    $
    1,884,803Acquisitions
    
    
    
    
    
    
    16,457
    
    
    
    
    
    
    
    
    
    
    
    25,737Divestitures
    
    
    (2,466
    )
    
    
    (4,017
    )
    
    
    
    
    
    
    (4,134
    )
    
    
    (18,552
    )Foreign Exchange adjustments
    
    
    (20,106
    )
    
    
    
    
    
    
    
    
    
    
    (63,549
    )
    
    
    Pro Forma Revenue
    
    $
    913,641
    
    
    $
    802,233
    
    
    
    
    
    
    $
    1,982,332
    
    
    $
    1,891,988Reported Divisional Operating Expenses
    
    $
    839,402
    
    
    $
    710,947
    
    
    
    
    
    
    $
    1,879,818
    
    
    $
    1,739,364Acquisitions
    
    
    
    
    
    
    14,958
    
    
    
    
    
    
    
    
    
    
    
    23,602Divestitures
    
    
    23
    
    
    
    (2,093
    )
    
    
    
    
    
    
    (2,133
    )
    
    
    (13,613
    )Foreign Exchange adjustments
    
    
    (18,516
    )
    
    
    
    
    
    
    
    
    
    
    (58,742
    )
    
    
    Pro Forma Divisional Operating Expenses
    
    $
    820,909
    
    
    $
    723,812
    
    
    
    
    
    
    $
    1,818,943
    
    
    $
    1,749,353


Pro forma revenue increased $111.4 million and $90.3 million for the three
and nine months ended September 30, 2003, respectively, as compared to the same
periods of 2002. Increased attendance, concessions and sponsorship revenues
drove the

-21-Table of Contents

increase. Average attendance was up in the third quarter at our
amphitheater events. The number of amphitheater events was down in the third
quarter of 2003 as compared to the same period of 2002. We presented more
theater weeks in the third quarter of 2003 compared to third quarter of 2002,
including the Mamma Miatour. Significant music acts during the third quarter
of 2003 included Aerosmith/KISSand John Mayer/Counting Crows.

Additionally, reported basis revenue and divisional operating expenses
increased for the three months ended September 30, 2003 as compared to the same
periods of 2002 due to foreign currency gains of $20.1 million for revenue and
$18.5 million for divisional operating expenses. We experienced currency gains
of $63.5 million and $58.7 million for revenue and divisional operating
expenses, respectively, for the nine months ended September 30, 2003.

The pro forma and reported basis increase in divisional operating expenses
for the three and nine months ended September 30, 2003 as compared to the same
periods of 2002 is related to increased operating and talent costs associated
with the increase in revenue.

Segment Reconciliations

(In thousands)
    
    Three Months Ended September 30,
    
    Nine Months Ended September 30,2003
    
    2002
    
    2003
    
    2002As Reported EBITDA as Adjusted*Radio Broadcasting
    
    $
    427,140
    
    
    $
    417,990
    
    
    $
    1,160,747
    
    
    $
    1,162,903Outdoor Advertising
    
    
    149,085
    
    
    
    131,470
    
    
    
    389,744
    
    
    
    350,550Live Entertainment
    
    
    96,811
    
    
    
    78,846
    
    
    
    170,197
    
    
    
    145,439Other
    
    
    28,781
    
    
    
    31,748
    
    
    
    74,841
    
    
    
    76,681Corporate
    
    
    (44,050
    )
    
    
    (44,385
    )
    
    
    (129,288
    )
    
    
    (122,557
    )Consolidated EBITDA as Adjusted *
    
    $
    657,767
    
    
    $
    615,669
    
    
    $
    1,666,241
    
    
    $
    1,613,016* See page 15 for cautionary disclosurePro Forma RevenueRadio Broadcasting
    
    $
    963,635
    
    
    $
    964,170
    
    
    $
    2,728,889
    
    
    $
    2,751,335Outdoor Advertising
    
    
    507,188
    
    
    
    484,949
    
    
    
    1,439,028
    
    
    
    1,368,609Live Entertainment
    
    
    913,641
    
    
    
    802,233
    
    
    
    1,982,332
    
    
    
    1,891,988Other
    
    
    139,238
    
    
    
    142,330
    
    
    
    403,961
    
    
    
    400,565Eliminations
    
    
    (35,029
    )
    
    
    (35,523
    )
    
    
    (102,163
    )
    
    
    (95,147
    )Consolidated Pro Forma Revenue
    
    $
    2,488,673
    
    
    $
    2,358,159
    
    
    $
    6,452,047
    
    
    $
    6,317,350Pro Forma Divisional Operating
ExpensesRadio Broadcasting
    
    $
    536,495
    
    
    $
    545,859
    
    
    $
    1,567,596
    
    
    $
    1,586,975Outdoor Advertising
    
    
    362,779
    
    
    
    351,208
    
    
    
    1,063,476
    
    
    
    1,010,048Live Entertainment
    
    
    820,909
    
    
    
    723,812
    
    
    
    1,818,943
    
    
    
    1,749,353Other
    
    
    110,457
    
    
    
    112,096
    
    
    
    329,120
    
    
    
    324,149Eliminations
    
    
    (35,029
    )
    
    
    (35,523
    )
    
    
    (102,163
    )
    
    
    (95,147
    )Consolidated Pro Forma Divisional
Operating Expense
    
    $
    1,795,611
    
    
    $
    1,697,452
    
    
    $
    4,676,972
    
    
    $
    4,575,378


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##### Table of Contents



LIQUIDITY AND CAPITAL RESOURCES

Cash Flow

Operating Activities:

Net cash flow from operating activities of $1.3 billion for the nine
months ended September 30, 2003 principally reflects a net income of $958.4
million plus depreciation and amortization of $487.3 million. Cash flow from
operations also reflects a $195.4 million increase in taxes payable,
partially offset by increases in accounts receivable and prepaid expenses.
The increase in taxes payable is associated with our sale of a portion of our
Univision investment and other marketable securities, and the proceeds from
these transactions are included in investing activities. Net cash flow from
operating activities of $1.3 billion for the nine months ended September 30,
2002 principally reflects a net loss of $16.2 billion offset by non-cash
charges of $16.8 billion for the adoption of SFAS 142 and depreciation and
amortization of $449.2 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.

Investing Activities:

Net cash expenditures provided in investing activities of $59.3 million
for the nine months ended September 30, 2003 principally reflect capital
expenditures of $231.2 million related to purchases of property, plant and
equipment and $55.4 million related to acquisitions of operating assets as
well as proceeds from the sale of investments of $344.2 million. Net cash
expenditures used in investing activities of $443.3 million for the nine
months ended September 30, 2002 principally reflect capital expenditures of
$338.5 million related to purchases of property, plant and equipment and
$174.5 million primarily related to acquisitions of radio and outdoor assets.

Financing Activities:

Financing activities for the nine months ended September 30, 2003
principally reflect the net reduction in debt of $1.5 billion, proceeds from
a secured forward exchange contract of $83.5 million and proceeds of $42.0
million related to the exercise of stock options. Financing activities for
the nine months ended September 30, 2002 principally reflect the net
reduction in debt of $842.0 million and proceeds of $64.4 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, share repurchases and
dividends) for the foreseeable future with cash flows from operations and
various externally generated funds.

SOURCES OF CAPITAL

As of September 30, 2003 and December 31, 2002 we had the following debt
outstanding:

(In millions)
    
    September 30,
    
    December 31,2003
    
    2002Credit facilities  domestic
    
    $
    676.6
    
    
    $
    2,056.6Credit facility  international
    
    
    55.7
    
    
    
    95.7Senior convertible notes
    
    
    
    
    
    
    517.6Liquid Yield Option Notes (a)
    
    
    
    
    
    
    252.1Long-term bonds (b)
    
    
    6,395.1
    
    
    
    5,655.9Other borrowings
    
    
    200.5
    
    
    
    200.7Total Debt (c)
    
    
    7,327.9
    
    
    
    8,778.6Less: Cash and cash equivalents
    
    
    211.4
    
    
    
    170.1$
    7,116.5
    
    
    $
    8,608.5




|(a) |  | Includes $42.1 million in unamortized fair value purchase accounting
adjustment premiums related to the merger with Jacor Communications,
Inc. at December 31, 2002.
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(b) |  | Includes $17.5 million and $44.6 million in unamortized fair value
purchase accounting adjustment premiums related to the merger with AMFM
Inc. at September 30, 2003 and December 31, 2002, respectively. Also
includes $101.5 million and $119.8 million related to fair value
adjustments for interest rate swap agreements at September 30, 2003 and
December 31, 2002, respectively.
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(c) |  | Total face value of outstanding debt was $7.3 billion and $8.7 billion
at September 30, 2003 and December 31, 2002, respectively.
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------

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##### Table of Contents



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 September 30, 2003, $475.0
million was outstanding and $584.4 million 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.

The second facility is a $1.5 billion, five-year multi-currency
revolving credit facility. At September 30, 2003, the outstanding balance
was $1.6 million and, taking into account letters of credit of $122.7
million, $1.4 billion was available for future borrowings, with the entire
balance to be repaid on August 30, 2005.

The third facility was a $1.5 billion three-year term loan with a
maturity of August 28, 2005. On April 30, 2003, May 21, 2003, May 30, 2003
and September 29, 2003 we paid down $500.0 million, $145.0 million, $355.0
million and $300.0 million, respectively, all which permanently reduced this
term loan to $200.0 million at September 30, 2003.

During the nine months ended September 30, 2003, we made principal
payments totaling $3.5 billion and drew down $2.1 billion on these credit
facilities. As of October 31, 2003, the credit facilities aggregate
outstanding balance was $1.4 billion and, taking into account outstanding
letters of credit, $1.2 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 September 30, 2003, $55.7 million was outstanding. This
credit facility expires on December 8, 2005.

Liquid Yield Option Notes

On April 17, 2003, we redeemed all of our 4.75% Liquid Yield Option
Notes (LYONs), pursuant to a call provision in the indenture governing the
LYONs, for $208.2 million. As a result of the redemption, we recognized 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 as described below.

On February 10, 2003, we redeemed 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 redeemed 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. The AMFM notes were redeemed pursuant to call provisions in the
indentures governing the notes.

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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##### Table of Contents



On May 21, 2003, we completed a debt offering of $250.0 million 4.40%
notes due May 15, 2011 and $250.0 million 4.90% notes due May 15, 2015.
Interest is payable on May 15 and November 15 on both series of notes. The
aggregate net proceeds of approximately $496.1 million were used to repay
borrowings outstanding on the $1.5 billion three-year term loan.

On October 6, 2003, we exercised a call provision on our 7.875% senior
notes due June 15, 2005. The redemption price of $842.6 million included the
principal of $750.0 million, a premium of $74.4 million and accrued interest
of $18.2 million. The redemption was funded with borrowings on our bank
credit facilities.

On November 5, 2003, we commenced a debt offering of $250.0 million
aggregate principal amount of 3.125% senior notes due February 1, 2007.
Interest on these notes will be payable each February 1 and August 1
commencing August 1, 2004. We anticipate that we will receive the net
proceeds from this offering on November 14, 2003. The net proceeds will be
used to repay borrowings outstanding on our credit facilities. In
conjunction with the issuance, we anticipate entering into an interest rate
swap agreement with a $250.0 million notional amount that effectively floats
interest at a rate based upon six-month LIBOR. A registration statement
relating to the notes has been filed with and declared effective by the
Securities and Exchange Commission. This report shall not constitute an
offer to sell or the solicitation of an offer to buy the notes, and any
offering of notes shall be made only by means of a prospectus.

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, May 1, 2003, May 21, 2003 and upon
consummation of the November 5, 2003 offering, $750.0 million 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 September 30, 2003, our leverage and interest coverage
ratios were 3.3x and 5.6x, respectively. Including our cash and cash
equivalents recorded at September 30, 2003, our leverage on a net debt basis
was 3.2x. 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.

Our $1.5 billion, five-year multi-currency revolving credit facility and
our $200.0 million three-year term loan 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 September 30, 2003, we were in compliance with all debt covenants.
We expect to remain in compliance throughout 2003.

Investments

During the nine months ended September 30, 2003, we received $344.2
million of proceeds related to the sale of a portion of our investment in
Univision and other marketable securities transactions. In addition, during
the nine months ended September 30,

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2003, we entered into a 5-year secured forward exchange contract with
respect to 8.3 million shares of our investment in XM Satellite Radio Holdings.
As a result, we received $83.5 million at the inception of the contract.

USES OF CAPITAL

Dividends

On July 23, 2003 our Board of Directors declared a quarterly cash dividend
of $0.10 per share on our Common Stock. The $61.6 million dividend payment was
disbursed on October 15, 2003 to shareholders of record at the close of
business on September 30, 2003.

On October 23, 2003 our Board of Directors declared a quarterly cash
dividend of $0.10 per share on our Common Stock. The dividend will be paid on
January 15, 2004 to shareholders of record at the close of business on December
31, 2003.

Acquisitions

During the nine months ended September 30, 2003 we acquired seven radio
stations for $14.0 million in cash. We also acquired approximately 575
outdoor display faces in seven domestic markets and approximately 1,675
display faces in two international markets for a total of $25.3 million in
cash. Our outdoor segment also acquired investments in nonconsolidated
affiliates for a total of $4.1 million in cash and acquired an additional 10%
interest in a subsidiary for $5.1 million in cash. Our live entertainment
segment made cash payments of $1.7 million during the nine months ended
September 30, 2003, primarily related to various earn-outs and deferred
purchase price consideration on prior year acquisitions. Also, our national
representation business acquired new contacts for a total of $5.2 million in
cash during the nine months ended September 30, 2003. We intend to continue
to acquire certain businesses that fit our strategic goals; however, our
primary focus is on reduction of debt.

Capital Expenditures

Capital expenditures in the nine months ended September 30, 2003 decreased
from $338.5 million in 2002 to $231.2 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 nine months ended September 30, 2003 as compared to the
same period of the prior year. In our Quarterly Report on Form 10-Q for the
period ended June 30, 2003, we stated that anticipated capital expenditures for
the fiscal year 2003 would be $500.0 million. We now anticipate fiscal 2003
capital expenditures will be lower than $500.0 million.

(In millions)Nine Months Ended September 30, 2003 Capital ExpendituresCorporate andRadio
    
    Outdoor
    
    Entertainment
    
    Other
    
    TotalRecurring
    
    $
    38.4
    
    
    $
    37.4
    
    
    $
    17.1
    
    
    $
    11.9
    
    
    $
    104.8Non-recurring projects
    
    
    .8
    
    
    
    
    
    
    
    .5
    
    
    
    4.0
    
    
    
    5.3Revenue producing
    
    
    
    
    
    
    90.5
    
    
    
    30.6
    
    
    
    
    
    
    
    121.1$
    39.2
    
    
    $
    127.9
    
    
    $
    48.2
    
    
    $
    15.9
    
    
    $
    231.2


Radio broadcasting capital expenditures declined $21.7 million in the nine
months ended September 30, 2003 as compared to the same period of 2002 due to
fewer non-recurring project related expenditures.

Outdoor advertising capital expenditures during the nine months ended
September 30, 2003 decreased $63.7 million as compared to the same period of
2002 primarily due to fewer revenue producing and non-recurring project related
capital expenditures.

Live entertainment capital expenditures during the nine months ended
September 30, 2003 increased $8.7 million as compared to the same period of
2002. Although revenue producing related capital expenditures increased during
the period due to the constructions of new venues, non-recurring project
related capital expenditures declined.

Capital expenditures listed under Corporate and Other declined $30.6
million during the nine months ended September 30, 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.

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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 an appeal with the 11th Circuit Court of Appeals.

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 September 30, 2003, we guaranteed the debt of third parties of
approximately $75.1 million primarily related to long-term operating
contracts. The third parties associated operating assets secure a
substantial portion of these obligations.

We have provided a guarantee under a certain performance contract of
approximately $77.4 million that expires in 2004. As of September 30, 2003,
the remaining amount of the guarantee is $19.3 million.

Market Risk

Interest Rate Risk

At September 30, 2003, approximately 30.5% 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 $44.6 million and that our net
income would have changed by $27.7 million during the first nine months of
2003. In the event of an adverse change in interest rates, management may
take actions to further mitigate our 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 September 30, 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 June 2005 to May
2011. The fair value of these agreements at September 30, 2003 was an asset
of $101.5 million.

On October 6, 2003, we exercised a call provision on our 7.875% senior
notes due 6/15/05, which were swapped to 3-month LIBOR plus 69 bps. In
conjunction with calling the notes, we terminated the two swaps associated
with these notes on October 3, 2003. We received total proceeds from the
swap counterparties of $83.8 million.

Equity Price Risk

At September 30, 2003, the carrying value of our available-for-sale and
trading equity securities was $647.5 million and $20.4 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 September 30, 2003 by $133.6 million and would
change accumulated comprehensive income (loss) and net income (loss) by $80.3
million and $2.5 million, respectively. At September 30, 2003, we also held
$27.4 million of investments that do not have a quoted market price, but are
subject to fluctuations in their value.

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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 $37.8 million for the nine
months ended September 30, 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
nine months ended September 30, 2003 by $3.8 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 September 30, 2003 would
change our equity in earnings of nonconsolidated affiliates by $1.2 million
and would change our net income for the nine months ended September 30, 2003
by approximately $.7 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
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, we adopted Financial Accounting Standards Board
Interpretation No. 45, Guarantors Accounting and Disclosure Requirements for
Guarantees, Including Indirect Guarantees of Indebtedness of Others(FIN
45). FIN 45 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. FIN 45s disclosure requirements
were effective for financial statements of interim or annual periods ending
after December 15, 2002. FIN 45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 FIN 45 did not materially
impact our financial position or results of operations.

On January 1, 2003, the Financial Accounting Standards Board issued
Financial Accounting Standards Board Interpretation No. 46, Consolidation of
Variable Interest Entities(FIN 46). FIN 46 addresses consolidation of
business enterprises of variable interest entities. FIN 46 is effective
immediately for all variable interest entities created after January 31, 2003
and for the first fiscal year or interim period ending after December 15, 2003
for variable interest entities in which an enterprise holds a variable interest
that it acquired before February 1, 2003. We have not acquired any variable
interest entities subsequent to January 31, 2003 and will therefore adopt FIN
46 for our annual report for the year ending December 31, 2003. We have
certain investments, accounted for under the equity method, that include a put
and call structure that guarantees a minimum return to the counterparty. We
also have certain long-term contracts related to the programming and/or sale of
advertising air time for radio stations that we do not own. We are currently
evaluating the applicability of FIN 46 to these arrangements, as well as other
equity investments and arrangements, and the possible impact on its future
consolidated results of operation and consolidated balance sheet.

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,

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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.

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.

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Accounting for Investments

At September 30, 2003, we had $695.3 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 nine months ended September 30, 2003 we recorded
an impairment of $7.0 million to an investment that suffered a decline in value
that management determined to be other-than temporary. For the nine months
ended September 30, 2002, we recorded a $25.3 million impairment related to
other-than-temporary declines in the value of certain investments. In
addition, at September 30, 2003, we had $347.3 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.

Ratio of Earnings to Fixed Charges

The ratio of earnings to fixed charges is as follows:

Nine Months endedSeptember 30,
    
    Year Ended December 31,2003
    
    2002
    
    2002
    
    2001
    
    2000
    
    1999
    
    19983.98
    
    
    2.64
    
    
    
    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.

Regulatory Matters

On June 2, 2003, the FCC adopted a decision modifying a number of its
rules governing the ownership of radio stations and other media outlets in
local and national markets. Among other changes, the modified rules establish
a new methodology for defining local radio markets and counting stations within
those markets, treat radio joint sales agreements as ownership interests of the
selling party in certain circumstances, allow for increased ownership of TV
stations at the local and national level, and permit additional local
cross-ownership of daily newspapers, television stations, and radio stations.

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After adoption, a number of parties (including Clear Channel) filed
petitions for review of the new FCC regulations with various federal courts.
These petitions have been consolidated in a proceeding before the United States
Court of Appeals for the Third Circuit. That court has issued a stay
preventing the implementation of the new regulations pending the outcome of
judicial review. Oral argument in the court case is currently scheduled for
February 2004. In addition, various parties have petitioned the FCC for
reconsideration of its decision, and Congress continues to review the new
regulations. Given these contingencies, it is unclear at this time whether the
new FCC regulations will be fully implemented in their current form.

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.







Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Required information is within Item 2







Item 4. CONTROLS AND PROCEDURES

Our principal executive and financial officers have concluded, based on
their evaluation as of the end of the period covered by this Form 10-Q, that
our disclosure controls and procedures, as defined under Rules 13a-15(e) and
15d-15(e) of the Securities Exchange Act of 1934, are effective to ensure
that information we are required to disclose in the reports we file or
submit

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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

See Note 4 to the Financial Statements. See also Item 2. Managements
Discussion and Analysis of Financial Condition and Results of Operations 
Liquidity and Capital Resources  Uses of Capital  Off Balance Sheet
Arrangements  Commitments and Contingencies.







Item 6. Exhibits and Reports on Form 8-K



|(a) |  | Exhibits. See Exhibit Index on Page 34
|--- |  | --------------------------------------



|(b) |  | Reports on Form 8-K
|--- |  | -------------------

Filing
    
    Date
    
    Items Reported
    
    Financial Statements Reported8-K
    
    
    7/23/03
    
    
    Item 5 & 7
    
    None8-K
    
    
    7/29/03
    
    
    Item 7 & 9
    
    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.November 6, 2003
    
    /s/ Randall T. MaysRandall T. Mays
Executive Vice President and
Chief Financial OfficerNovember 6, 2003
    
    /s/ Herbert W. Hill, Jr.Herbert W. Hill, Jr.
Senior Vice President and
Chief Accounting Officer


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INDEX TO EXHIBITS

ExhibitNumber
    
    Description2.1
    
    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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ExhibitNumber
    
    Description4.9
    
    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).4.19
    
    Thirteenth Supplemental Indenture dated May 1,
2003, to Senior Indenture dated October 1, 1997,
by and between Clear Channel Communications, Inc.
and The Bank of New York, as Trustee (incorporated
by reference to the exhibits to Clear Channels
Current Report on Form 8-K dated May 2, 2003).


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ExhibitNumber
    
    Description4.20
    
    Fourteenth Supplemental Indenture dated May 21, 2003, to Senior
Indenture dated October 1, 1997, by and between Clear Channel
Communications, Inc. and The Bank of New York, as Trustee
(incorporated by reference to the exhibits to Clear Channels Current
Report on Form 8-K dated May 22, 2003).11
    
    Statement re: Computation of Per Share Earnings.12
    
    Statement re: Computation of Ratios.31.1
    
    Certification of Chief Executive Officer Pursuant to Rules 13a-14(a)
and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.31.2
    
    Certification of Chief Financial Officer Pursuant to Rules 13a-14(a)
and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32.1
    
    Certification of Chief Executive Officer Pursuant to 18 U.S.C.
Section 1350, as Adopted Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.32.2
    
    Certification of Chief Financial Officer Pursuant to 18 U.S.C.
Section 1350, as Adopted Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.


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