##### Table of Contents



SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 Form 10-Q
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 AND 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2007
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 FOR THE TRANSITION PERIOD FROM
 Commission file number 1-9645
 CLEAR CHANNEL COMMUNICATIONS, INC.
  Texas
    
    74-1787539(State of Incorporation)
    
    (I.R.S. Employer Identification No.)200 East Basse RoadSan Antonio, Texas
    
    78209(Address of principal executive offices)
    
    (Zip Code)
 (210) 822-2828
 þ o
  þ o o
 o þ
  Class
    
    Outstanding at May 8, 2007Common Stock, $.10 par value
    
    496,372,680




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##### 



CLEAR CHANNEL COMMUNICATIONS, INC. AND SUBSIDIARIES
 INDEX
 Page No.Part I  Financial InformationItem 1. Unaudited Financial StatementsConsolidated Balance Sheets at March 31, 2007 and December 31, 2006
    
    
    3Consolidated Statements of Operations for the three months ended March 31, 2007 and 2006
    
    
    5Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2007 and 2006
    
    
    6Notes to Consolidated Financial Statements
    
    
    7Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    14Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    24Item 4. Controls and Procedures
    
    
    24Part II  Other InformationItem 1. Legal Proceedings
    
    
    25Item 1A. Risk Factors
    
    
    26Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    26Item 6. Exhibits
    
    
    26Signatures
    
    
    27Index to Exhibits
    
    
    28Current BylawsStatement re: Computation of Per Share EarningsStatement re: Computation of RatiosCertification of CEO Pursuant to Section 302Certification of CFO Pursuant to Section 302Certification of CEO Pursuant to Section 906Certification of CFO Pursuant to Section 906




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##### Table of Contents



PART I
 
 Item 1. UNAUDITED FINANCIAL STATEMENTS
 CLEAR CHANNEL COMMUNICATIONS, INC. AND SUBSIDIARIES
 
 CONSOLIDATED BALANCE SHEETS
 ASSETS
 (In thousands)
 March 31,
    
    
    December 31,2007
    
    
    2006(Unaudited)
    
    
    (Audited)CURRENT ASSETSCash and cash equivalents
    
    $
    107,605
    
    
    $
    114,004Accounts receivable, net of allowance of $60,896 in 2007
and $57,799 in 2006
    
    
    1,542,603
    
    
    
    1,695,348Prepaid expenses
    
    
    135,925
    
    
    
    122,845Other current assets
    
    
    269,208
    
    
    
    266,141Income taxes receivable
    
    
    10,465
    
    
    
    7,392Total Current Assets
    
    
    2,065,806
    
    
    
    2,205,730PROPERTY, PLANT AND EQUIPMENTLand, buildings and improvements
    
    
    891,215
    
    
    
    888,593Structures
    
    
    3,618,317
    
    
    
    3,601,653Towers, transmitters and studio equipment
    
    
    860,568
    
    
    
    855,940Furniture and other equipment
    
    
    568,633
    
    
    
    555,050Construction in progress
    
    
    96,172
    
    
    
    92,6416,034,905
    
    
    
    5,993,877Less accumulated depreciation
    
    
    2,871,290
    
    
    
    2,787,9343,163,615
    
    
    
    3,205,943Property, plant and equipment from discontinued
operations, net
    
    
    25,303
    
    
    
    30,267INTANGIBLE ASSETSDefinite-lived intangibles, net
    
    
    505,046
    
    
    
    522,817Indefinite-lived intangibles  licenses
    
    
    4,316,006
    
    
    
    4,323,447Indefinite-lived intangibles  permits
    
    
    242,343
    
    
    
    260,950Goodwill
    
    
    7,434,320
    
    
    
    7,421,924Intangible assets from discontinued operations, net
    
    
    86,009
    
    
    
    92,527OTHER ASSETSNotes receivable
    
    
    7,537
    
    
    
    7,587Investments in, and advances to, nonconsolidated affiliates
    
    
    318,462
    
    
    
    314,647Other assets
    
    
    283,682
    
    
    
    270,204Other investments
    
    
    238,201
    
    
    
    245,749Total Assets
    
    $
    18,686,330
    
    
    $
    18,901,792
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CLEAR CHANNEL COMMUNICATIONS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND SHAREHOLDERS EQUITY
(In thousands)
 March 31,
    
    
    December 31,2007
    
    
    2006(Unaudited)
    
    
    (Audited)CURRENT LIABILITIESAccounts payable
    
    $
    133,236
    
    
    $
    156,921Accrued expenses
    
    
    821,082
    
    
    
    893,045Accrued interest
    
    
    87,389
    
    
    
    112,049Current portion of long-term debt
    
    
    562,638
    
    
    
    336,375Deferred income
    
    
    193,677
    
    
    
    143,691Other current liabilities
    
    
    17,160
    
    
    
    21,765Total Current Liabilities
    
    
    1,815,182
    
    
    
    1,663,846Long-term debt
    
    
    6,862,109
    
    
    
    7,326,700Other long-term obligations
    
    
    73,165
    
    
    
    68,509Deferred income taxes
    
    
    649,231
    
    
    
    752,431Other long-term liabilities
    
    
    795,069
    
    
    
    698,574Minority interest
    
    
    362,852
    
    
    
    349,391Commitments and contingent liabilities (Note 6)SHAREHOLDERS EQUITYCommon Stock
    
    
    49,632
    
    
    
    49,399Additional paid-in capital
    
    
    26,805,623
    
    
    
    26,745,687Retained deficit
    
    
    (19,029,751
    )
    
    
    (19,054,365
    )Accumulated other comprehensive income
    
    
    306,767
    
    
    
    304,975Cost of shares held in treasury
    
    
    (3,549
    )
    
    
    (3,355
    )Total Shareholders Equity
    
    
    8,128,722
    
    
    
    8,042,341Total Liabilities and Shareholders Equity
    
    $
    18,686,330
    
    
    $
    18,901,792
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CLEAR CHANNEL COMMUNICATIONS, INC. AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF OPERATIONS
 (UNAUDITED)
 (In thousands, except per share data)
 Three Months Ended March 31,2007
    
    
    2006Revenue
    
    $
    1,608,315
    
    
    $
    1,489,609Operating expenses:Direct operating expenses (includes share based payments of $3,202 and
$4,316 in 2007 and 2006, respectively, and excludes depreciation and
amortization)
    
    
    669,271
    
    
    
    623,302Selling, general and administrative expenses (includes share based
payments of $3,026 and $4,450 in 2007 and 2006, respectively, and
excludes depreciation and amortization)
    
    
    461,177
    
    
    
    448,658Depreciation and amortization
    
    
    147,377
    
    
    
    150,066Corporate expenses (includes share based payments of $2,414 and
$3,403 in 2007 and 2006, respectively, and excludes depreciation and
amortization)
    
    
    49,144
    
    
    
    41,524Merger expenses
    
    
    1,686
    
    
    
    Gain on disposition of assets  net
    
    
    5,297
    
    
    
    47,507Operating income
    
    
    284,957
    
    
    
    273,566Interest expense
    
    
    118,074
    
    
    
    114,376Gain (loss) on marketable securities
    
    
    395
    
    
    
    (2,324
    )Equity in earnings of nonconsolidated affiliates
    
    
    5,094
    
    
    
    6,909Other income (expense)  net
    
    
    53
    
    
    
    (583
    )Income before income taxes, minority interest and discontinued operations
    
    
    172,425
    
    
    
    163,192Income tax benefit (expense):Current
    
    
    (36,004
    )
    
    
    (4,159
    )Deferred
    
    
    (36,932
    )
    
    
    (62,750
    )Income tax benefit (expense)
    
    
    (72,936
    )
    
    
    (66,909
    )Minority interest income (expense), net of tax
    
    
    (276
    )
    
    
    780Income before discontinued operations
    
    
    99,213
    
    
    
    97,063Income (loss) from discontinued operations, net
    
    
    3,009
    
    
    
    (249
    )Net income
    
    $
    102,222
    
    
    $
    96,814Other comprehensive income (loss), net of tax:Foreign currency translation adjustments
    
    
    8,751
    
    
    
    9,089Unrealized gain (loss) on securities and derivatives:Unrealized holding gain (loss) on marketable securities
    
    
    (6,959
    )
    
    
    (24,058
    )Unrealized holding gain (loss) on cash flow derivatives
    
    
    
    
    
    
    25,564Comprehensive income
    
    $
    104,014
    
    
    $
    107,409Net income (loss) per common share:Income before discontinued operations  Basic
    
    $
    .20
    
    
    $
    .19Discontinued operations  Basic
    
    
    .01
    
    
    
    (.00
    )Net income (loss)  Basic
    
    $
    .21
    
    
    $
    .19Income before discontinued operations  Diluted
    
    $
    .20
    
    
    $
    .19Discontinued operations  Diluted
    
    
    .01
    
    
    
    (.00
    )Net income (loss)  Diluted
    
    $
    .21
    
    
    $
    .19Dividends declared per share
    
    $
    .1875
    
    
    $
    .1875
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CLEAR CHANNEL COMMUNICATIONS, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 (UNAUDITED)
 (In thousands)
 Three Months Ended March 31,2007
    
    
    2006Cash flows from operating activities:Net income
    
    $
    102,222
    
    
    $
    96,814(Income) loss from discontinued operations, net
    
    
    (3,009
    )
    
    
    24999,213
    
    
    
    97,063Reconciling items:Depreciation and amortization
    
    
    147,377
    
    
    
    150,066Deferred taxes
    
    
    36,932
    
    
    
    62,750(Gain) loss on disposal of assets
    
    
    (5,297
    )
    
    
    (47,507
    )(Gain) loss forward exchange contract
    
    
    2,962
    
    
    
    8,798(Gain) loss on trading securities
    
    
    (3,358
    )
    
    
    (6,474
    )Provision for doubtful accounts
    
    
    9,215
    
    
    
    6,894Share-based compensation
    
    
    8,642
    
    
    
    12,169Equity in earnings of non-consolidated affiliates
    
    
    (5,094
    )
    
    
    (6,909
    )Other reconciling items  net
    
    
    129
    
    
    
    (2,258
    )Changes in operating assets and liabilities:Decrease in income taxes receivable
    
    
    
    
    
    
    118,120Changes in other operating assets and liabilities,
net of effects of acquisitions
    
    
    47,134
    
    
    
    50,163Net cash provided by operating activities
    
    
    337,855
    
    
    
    442,875Cash flows from investing activities:Decrease (increase) in notes receivable  net
    
    
    50
    
    
    
    1,920Decrease (increase) in investments in and advances
to nonconsolidated affiliates  net
    
    
    5,835
    
    
    
    2,710Purchases of investments
    
    
    (393
    )
    
    
    Purchases of property, plant and equipment
    
    
    (67,537
    )
    
    
    (63,806
    )Proceeds from disposal of assets
    
    
    13,333
    
    
    
    44,217Acquisition of operating assets, net of cash acquired
    
    
    (12,189
    )
    
    
    (61,452
    )Decrease (increase) in other  net
    
    
    (14,816
    )
    
    
    (20,558
    )Net cash used in investing activities
    
    
    (75,717
    )
    
    
    (96,969
    )Cash flows from financing activities:Draws on credit facilities
    
    
    252,881
    
    
    
    1,054,007Payments on credit facilities
    
    
    (239,582
    )
    
    
    (926,772
    )Proceeds from long-term debt
    
    
    
    
    
    
    508,849Payments on long-term debt
    
    
    (260,416
    )
    
    
    (9,189
    )Payments for purchase of common shares
    
    
    
    
    
    
    (876,316
    )Proceeds from exercise of stock options, stock
purchase plan, common stock warrants, and other
    
    
    56,555
    
    
    
    9,756Dividends paid
    
    
    (92,603
    )
    
    
    (100,909
    )Net cash used in financing activities
    
    
    (283,165
    )
    
    
    (340,574
    )Cash flows from discontinued operations:Net cash provided by operating activities
    
    
    703
    
    
    
    1,837Net cash provided by (used in) investing activities
    
    
    13,925
    
    
    
    (319
    )Net cash provided by (used in) financing activities
    
    
    
    
    
    
    Net cash provided by (used in) discontinued operations
    
    
    14,628
    
    
    
    1,518Net (decrease) increase in cash and cash equivalents
    
    
    (6,399
    )
    
    
    6,850Cash and cash equivalents at beginning of period
    
    
    114,004
    
    
    
    82,786Cash and cash equivalents at end of period
    
    $
    107,605
    
    
    $
    89,636
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CLEAR CHANNEL COMMUNICATIONS, INC. AND SUBSIDIARIES
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (UNAUDITED)
  Preparation of Interim Financial Statements
   Certain Reclassifications
  Discontinued Operations and Assets Held for Sale  Accounting
for the Impairment or Disposal of Long-lived Assets
  (In thousands)
    
    2007
    
    2006Revenue
    
    $
    11,030
    
    
    $
    14,773Income (loss) before income taxes
    
    $
    2,815
    
    
    $
    (422
    )
  Recent Accounting Pronouncements
 The Fair Value Option for Financial Assets and
Financial Liabilities  including an amendment of FASB Statement No. 115
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Fair
Value Measurements, Disclosures about Fair Value of Financial Instruments.
 New Accounting Standard
 Accounting for
Uncertainty in Income Taxes
      March 31, 2007
    
    
    December 31, 2006Gross Carrying
    
    
    Accumulated
    
    
    Gross Carrying
    
    
    Accumulated(In thousands)
    
    Amount
    
    
    Amortization
    
    
    Amount
    
    
    AmortizationTransit, street
furniture, and other
outdoor contractual
rights
    
    $
    822,827
    
    
    $
    544,239
    
    
    $
    821,364
    
    
    $
    530,063Talent contracts
    
    
    125,270
    
    
    
    119,708
    
    
    
    125,270
    
    
    
    115,537Representation contracts
    
    
    356,737
    
    
    
    184,002
    
    
    
    349,493
    
    
    
    175,658Other
    
    
    125,868
    
    
    
    77,707
    
    
    
    124,881
    
    
    
    76,933Total
    
    $
    1,430,702
    
    
    $
    925,656
    
    
    $
    1,421,008
    
    
    $
    898,191
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(In thousands)2008
    
    $
    78,5402009
    
    
    66,5732010
    
    
    50,0862011
    
    
    41,1782012
    
    
    38,667
     Goodwill
  Americas
    
    
    International(In thousands)
    
    Radio
    
    
    Outdoor
    
    
    Outdoor
    
    
    Other
    
    
    TotalBalance as of December 31, 2006
    
    $
    6,279,240
    
    
    $
    667,986
    
    
    $
    425,630
    
    
    $
    49,068
    
    
    $
    7,421,924Acquisitions
    
    
    
    
    
    
    5,610
    
    
    
    1,420
    
    
    
    
    
    
    
    7,030Dispositions
    
    
    (204
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (204
    )Foreign currency
    
    
    
    
    
    
    1,937
    
    
    
    1,308
    
    
    
    
    
    
    
    3,245Adjustments
    
    
    2,701
    
    
    
    (177
    )
    
    
    
    
    
    
    (199
    )
    
    
    2,325Balance as of March 31, 2007
    
    $
    6,281,737
    
    
    $
    675,356
    
    
    $
    428,358
    
    
    $
    48,869
    
    
    $
    7,434,320
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 Foreign Currency Hedges: Measuring the Amount of
Ineffectiveness in a Net Investment Hedge
  Acquisitions
  Disposition of Assets
  Debt Maturities
  Recent Legal Proceedings
    - 10 -




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Corporate andAmericas
    
    
    International
    
    
    
    
    
    
    gain onRadio
    
    
    Outdoor
    
    
    Outdoor
    
    
    
    
    
    
    disposition of(In thousands)
    
    Broadcasting
    
    
    Advertising
    
    
    Advertising
    
    
    Other
    
    
    assets - net
    
    
    Eliminations
    
    
    ConsolidatedThree Months Ended March
31, 2007Revenue
    
    $
    819,744
    
    
    $
    317,023
    
    
    $
    373,833
    
    
    $
    129,737
    
    
    $
    3⁄4
    
    
    $
    (32,022
    )
    
    $
    1,608,315Direct operating expenses
    
    
    239,692
    
    
    
    134,914
    
    
    
    259,291
    
    
    
    53,794
    
    
    
    3⁄4
    
    
    
    (18,420
    )
    
    
    669,271Selling, general and
administrative expenses
    
    
    288,334
    
    
    
    54,243
    
    
    
    73,290
    
    
    
    58,912
    
    
    
    
    
    
    
    (13,602
    )
    
    
    461,177Depreciation and
amortization
    
    
    31,585
    
    
    
    46,561
    
    
    
    49,109
    
    
    
    15,775
    
    
    
    4,347
    
    
    
    3⁄4
    
    
    
    147,377Corporate expenses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    49,144
    
    
    
    
    
    
    
    49,144Merger expenses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,686
    
    
    
    
    
    
    
    1,686Gain on disposition of
assets  net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,297
    
    
    
    
    
    
    
    5,297Operating income (loss)
    
    $
    260,133
    
    
    $
    81,305
    
    
    $
    (7,857
    )
    
    $
    1,256
    
    
    $
    (49,880
    )
    
    $
    
    
    
    $
    284,957Intersegment revenues
    
    $
    10,577
    
    
    $
    1,904
    
    
    $
    
    
    
    $
    19,541
    
    
    $
    3⁄4
    
    
    $
    3⁄4
    
    
    $
    32,022Identifiable assets
    
    $
    12,019,918
    
    
    $
    2,764,927
    
    
    $
    2,391,523
    
    
    $
    1,064,020
    
    
    $
    334,630
    
    
    $
    3⁄4
    
    
    $
    18,575,018Capital expenditures
    
    $
    16,394
    
    
    $
    22,582
    
    
    $
    24,671
    
    
    $
    2,423
    
    
    $
    1,467
    
    
    $
    3⁄4
    
    
    $
    67,537Share-based payments
    
    $
    4,464
    
    
    $
    1,126
    
    
    $
    241
    
    
    $
    397
    
    
    $
    2,414
    
    
    $
    3⁄4
    
    
    $
    8,642Three Months Ended
March 31, 2006Revenue
    
    $
    794,123
    
    
    $
    274,102
    
    
    $
    324,267
    
    
    $
    129,353
    
    
    $
    3⁄4
    
    
    $
    (32,236
    )
    
    $
    1,489,609Direct operating expenses
    
    
    242,703
    
    
    
    120,011
    
    
    
    224,385
    
    
    
    54,237
    
    
    
    3⁄4
    
    
    
    (18,034
    )
    
    
    623,302Selling, general and
administrative expenses
    
    
    289,535
    
    
    
    48,194
    
    
    
    66,841
    
    
    
    58,290
    
    
    
    
    
    
    
    (14,202
    )
    
    
    448,658Depreciation and
amortization
    
    
    32,653
    
    
    
    42,232
    
    
    
    54,088
    
    
    
    16,721
    
    
    
    4,372
    
    
    
    3⁄4
    
    
    
    150,066Corporate expenses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    41,524
    
    
    
    
    
    
    
    41,524Gain on disposition of
assets  net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    47,507
    
    
    
    
    
    
    
    47,507Operating income (loss)
    
    $
    229,232
    
    
    $
    63,665
    
    
    $
    (21,047
    )
    
    $
    105
    
    
    $
    1,611
    
    
    $
    
    
    
    $
    273,566Intersegment revenues
    
    $
    10,943
    
    
    $
    1,821
    
    
    $
    
    
    
    $
    19,472
    
    
    $
    3⁄4
    
    
    $
    3⁄4
    
    
    $
    32,236Identifiable assets
    
    $
    11,963,535
    
    
    $
    2,517,865
    
    
    $
    2,132,607
    
    
    $
    1,111,044
    
    
    $
    663,504
    
    
    $
    3⁄4
    
    
    $
    18,388,555Capital expenditures
    
    $
    18,192
    
    
    $
    14,220
    
    
    $
    29,498
    
    
    $
    1,878
    
    
    $
    18
    
    
    $
    3⁄4
    
    
    $
    63,806Share-based payments
    
    $
    6,309
    
    
    $
    1,157
    
    
    $
    323
    
    
    $
    977
    
    
    $
    3,403
    
    
    $
    3⁄4
    
    
    $
    12,169
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Item 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 Proposed Merger with a Group led by Thomas H. Lee Partners, L.P. and Bain Capital Partners, LLC
   Sale of Radio Stations and all of our Television Stations
   Format of Presentation
   Radio Broadcasting
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Americas and International Outdoor Advertising
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FAS 123(R), Share-Based Payment
  (In millions)
    
    2007
    
    2006Radio BroadcastingDirect Operating Expenses
    
    $
    2.0
    
    
    $
    2.8SG&A
    
    
    2.5
    
    
    
    3.5Americas Outdoor AdvertisingDirect Operating Expenses
    
    $
    0.8
    
    
    $
    0.8SG&A
    
    
    0.3
    
    
    
    0.3International Outdoor AdvertisingDirect Operating Expenses
    
    $
    0.2
    
    
    $
    0.2SG&A
    
    
    0.1
    
    
    
    0.1OtherDirect Operating Expenses
    
    $
    0.2
    
    
    $
    0.5SG&A
    
    
    0.2
    
    
    
    0.6Corporate
    
    $
    2.4
    
    
    $
    3.4
 The comparison of Three Months Ended March 31, 2007 to Three Months Ended March 31, 2006 is as follows:
 Three Months Ended March 31,
    
    
    %(In thousands)
    
    2007
    
    
    2006
    
    
    ChangeRevenue
    
    $
    1,608,315
    
    
    $
    1,489,609
    
    
    
    8
    %Operating expenses:Direct operating expenses
    
    
    669,271
    
    
    
    623,302
    
    
    
    7
    %Selling, general and administrative expenses
    
    
    461,177
    
    
    
    448,658
    
    
    
    3
    %Depreciation and amortization
    
    
    147,377
    
    
    
    150,066
    
    
    
    (2
    %)Corporate expenses
    
    
    49,144
    
    
    
    41,524
    
    
    
    18
    %Merger expenses
    
    
    1,686
    
    
    
    Gain on disposition of assets  net
    
    
    5,297
    
    
    
    47,507Operating income
    
    
    284,957
    
    
    
    273,566
    
    
    
    4
    %Interest expense
    
    
    118,074
    
    
    
    114,376Gain (loss) on marketable securities
    
    
    395
    
    
    
    (2,324
    )Equity in earnings of nonconsolidated
affiliates
    
    
    5,094
    
    
    
    6,909Other income (expense)  net
    
    
    53
    
    
    
    (583
    )Income before income taxes, minority
interest, and discontinued operations
    
    
    172,425
    
    
    
    163,192Income tax benefit (expense):Current
    
    
    (36,004
    )
    
    
    (4,159
    )Deferred
    
    
    (36,932
    )
    
    
    (62,750
    )Income tax benefit (expense)
    
    
    (72,936
    )
    
    
    (66,909
    )Minority interest expense, net of tax
    
    
    (276
    )
    
    
    780Income before discontinued operations
    
    
    99,213
    
    
    
    97,063Income (loss) from discontinued operations,
net
    
    
    3,009
    
    
    
    (249
    )Net income
    
    $
    102,222
    
    
    $
    96,814
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Consolidated Revenue
  Consolidated Direct Operating Expenses
  Consolidated Selling, General and Administrative Expenses, or SG&A
  Corporate Expenses
  Gain (loss) on Disposition of Assets  Net
   Interest Expense
  Gain (loss) on marketable securities
  Income Tax Benefit (Expense)
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Discontinued operations
  Segment Revenue and Divisional Operating Expenses
 Radio Broadcasting
 Three Months Ended March 31,(In thousands)
    
    2007
    
    
    2006
    
    
    % ChangeRevenue
    
    $
    819,744
    
    
    $
    794,123
    
    
    
    3
    %Direct operating expenses
    
    
    239,692
    
    
    
    242,703
    
    
    
    (1
    %)Selling, general and administrative expense
    
    
    288,334
    
    
    
    289,535
    
    
    
    (0
    %)Depreciation and amortization
    
    
    31,585
    
    
    
    32,653
    
    
    
    (3
    %)Operating income
    
    $
    260,133
    
    
    $
    229,232
    
    
    
    13
    %
   Americas Outdoor Advertising
 Three Months Ended March 31,(In thousands)
    
    2007
    
    
    2006
    
    
    % ChangeRevenue
    
    $
    317,023
    
    
    $
    274,102
    
    
    
    16
    %Direct operating expenses
    
    
    134,914
    
    
    
    120,011
    
    
    
    12
    %Selling, general and administrative expenses
    
    
    54,243
    
    
    
    48,194
    
    
    
    13
    %Depreciation and amortization
    
    
    46,561
    
    
    
    42,232
    
    
    
    10
    %Operating income
    
    $
    81,305
    
    
    $
    63,665
    
    
    
    28
    %
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International Outdoor Advertising
 Three Months Ended March 31,(In thousands)
    
    2007
    
    
    2006
    
    
    % ChangeRevenue
    
    $
    373,833
    
    
    $
    324,267
    
    
    
    15
    %Direct operating expenses
    
    
    259,291
    
    
    
    224,385
    
    
    
    16
    %Selling, general and administrative expenses
    
    
    73,290
    
    
    
    66,841
    
    
    
    10
    %Depreciation and amortization
    
    
    49,109
    
    
    
    54,088
    
    
    
    (9
    %)Operating income
    
    $
    (7,857
    )
    
    $
    (21,047
    )
    
    
    N.A.
    Reconciliation of Segment Operating Income (Loss) to Consolidated Operating Income
 Three Months Ended March 31,(In thousands)
    
    2007
    
    
    2006Radio Broadcasting
    
    $
    260,133
    
    
    $
    229,232Americas Outdoor Advertising
    
    
    81,305
    
    
    
    63,665International Outdoor Advertising
    
    
    (7,857
    )
    
    
    (21,047
    )Other
    
    
    1,256
    
    
    
    105Gain on disposition of assets  net
    
    
    5,297
    
    
    
    47,507Corporate
    
    
    (55,177
    )
    
    
    (45,896
    )Consolidated operating income
    
    $
    284,957
    
    
    $
    273,566
 LIQUIDITY AND CAPITAL RESOURCES
 Cash Flows
 Three Months Ended March 31,(In thousands)
    
    2007
    
    2006Cash provided by (used in):Operating activities
    
    $
    337,855
    
    
    $
    442,875Investing activities
    
    $
    (75,717
    )
    
    $
    (96,969
    )Financing activities
    
    $
    (283,165
    )
    
    $
    (340,574
    )Discontinued operations
    
    $
    14,628
    
    
    $
    1,518
 Operating Activities
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Investing Activities
  Financing Activities
  Discontinued Operations
  Anticipated Cash Requirements
    March 31,
    
    
    December 31,(In millions)
    
    2007
    
    
    2006Credit facilities
    
    $
    994.7
    
    
    $
    966.5Long-term bonds (a)
    
    
    6,289.2
    
    
    
    6,531.6Other borrowings
    
    
    140.9
    
    
    
    164.9Total Debt
    
    
    7,424.8
    
    
    
    7,663.0Less: Cash and cash equivalents
    
    
    107.6
    
    
    
    114.0$
    7,317.2
    
    
    $
    7,549.0
 
 (a)
    
    Includes $6.2 million and $7.1 million in unamortized fair value purchase accounting
adjustment premiums related to the merger with AMFM at March 31, 2007 and December 31,
2006, respectively. Also includes negative $21.8 million and $29.8 million related to fair
value adjustments for interest rate swap agreements at March 31, 2007 and December 31,
2006, respectively. Credit Facility
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Shelf Registration
  Debt Covenants
        Dividends
  (In millions, except per share data)
 AmountperDeclaration
    
    Common
    
    
    
    
    
    
    
    
    
    TotalDate
    
    Share
    
    Record Date
    
    Payment Date
    
    PaymentOctober 25, 2006
    
    
    0.1875
    
    
    December 31, 2006
    
    January 15, 2007
    
    $
    92.6February 21, 2007
    
    
    0.1875
    
    
    March 31, 2007
    
    April 15, 2007
    
    
    93.0
  Acquisitions
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Capital Expenditures
  Three Months Ended March 31, 2007 Capital ExpendituresAmericas
    
    
    InternationalOutdoor
    
    
    Outdoor
    
    
    Corporate and(In millions)
    
    Radio
    
    
    Advertising
    
    
    Advertising
    
    
    Other
    
    
    TotalNon-revenue producing
    
    $
    16.4
    
    
    $
    9.5
    
    
    $
    8.4
    
    
    $
    3.8
    
    
    $
    38.1Revenue producing
    
    
    
    
    
    
    13.1
    
    
    
    16.3
    
    
    
    
    
    
    
    29.4$
    16.4
    
    
    $
    22.6
    
    
    $
    24.7
    
    
    $
    3.8
    
    
    $
    67.5
 Commitments, Contingencies and Guarantees
   Debt Maturities
   Interest Rate Risk
   Equity Price Risk
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Foreign Currency
    Recent Accounting Pronouncements
 The Fair Value Option for Financial
Assets and Financial Liabilities  including an amendment of FASB Statement No. 115 Fair
Value Measurements, Disclosures about Fair Value of Financial Instruments.
 Inflation
  Ratio of Earnings to Fixed Charges
  Three Months EndedMarch 31,
    
    Year Ended December 31,2007
    
    2006
    
    2006
    
    2005
    
    2004
    
    2003
    
    20021.81
    
    1.80
    
    2.35
    
    2.31
    
    2.86
    
    3.64
    
    2.58
  Risks Regarding Forward Looking Statements
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
    
    the occurrence of any event, change or other circumstance that could give rise to the
termination of the Merger Agreement;
    
    the outcome of any legal proceedings that have been or may be instituted against us
relating to the Merger Agreement;
    
    our inability to complete the merger due to the failure to obtain shareholder
approval or to satisfy any other conditions to completion of the merger;
    
    the impact of the substantial indebtedness incurred to finance the consummation of
the merger;
    
    the impact of general economic and political conditions in the U.S. and in other
countries in which we currently do business, including those resulting from recessions,
political events and acts or threats of terrorism or military conflicts;
    
    the impact of the geopolitical environment;
    
    our ability to integrate the operations of recently acquired companies;
    
    shifts in population and other demographics;
    
    industry conditions, including competition;
    
    fluctuations in operating costs;
    
    technological changes and innovations;
    
    changes in labor conditions;
    
    fluctuations in exchange rates and currency values;
    
    capital expenditure requirements;
    
    the outcome of pending and future litigation settlements;
    
    legislative or regulatory requirements;
    
    interest rates;
    
    the effect of leverage on our financial position and earnings;
    
    taxes;
    
    access to capital markets; and
    
    certain other factors set forth in our filings with the Securities and Exchange Commission.
  
 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  
 ITEM 4. CONTROLS AND PROCEDURES
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Part II  OTHER INFORMATION
 
 Item 1. Legal Proceedings
    Merger related litigation
 Manson v. Clear Channel Communications, Inc., et al. th
 th Teitelbaum v. Clear Channel Communications, Inc., et al. City of St. Clair Shores Police and Fire Retirement System
v. Clear Channel Communications, Inc., et al. Levy
Investments, Ltd. v. Clear Channel Communications, Inc., et al. DD Equity Partners LLC v. Clear Channel Communications, Inc., et al. Pioneer Investments Kapitalanlagegesellschaft MBH v. L. Lowry Mays,
et al.
 Pioneer Investments
Kapitalanlagegesellschaft mbH v. Clear Channel Communications, Inc., et al. Alaska Laborers Employees Retirement Fund v.
Clear Channel Communications, Inc., et. al. th
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Item 1A. Risk Factors
   
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
   Total Number ofShares Purchased as
    
    Maximum Dollar ValueTotal Number
    
    Average Price
    
    Part of Publicly
    
    of Shares that May Yetof Shares
    
    Paid per
    
    Announced
    
    Be Purchased Under thePeriod
    
    Purchased
    
    Share
    
    Programs
    
    ProgramsJanuary 1 through
January 31
    
    
    1,331
    
    
    $
    36.38
    
    
    
    
    
    
    $
    1,017,476,855February 1 through
February 28
    
    
    3,245
    
    
    $
    37.68
    
    
    
    
    
    
    $
    1,017,476,855March 1 through
March 31
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    1,000,000,000Total
    
    
    4,576
    
    
    
    
    
    
    
    
 
 Item 6. Exhibits
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Signatures
  CLEAR CHANNEL COMMUNICATIONS, INC.May 9, 2007
    
    /s/ Randall T. MaysRandall T. MaysPresident andChief Financial OfficerMay 9, 2007
    
    /s/ Herbert W. Hill, Jr.Herbert W. Hill, Jr.Senior Vice President andChief Accounting Officer
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INDEX TO EXHIBITS
 ExhibitNumber
    
    Description2.1
    
    Agreement and Plan of Merger among BT Triple Crown Merger
Co., Inc., B Triple Crown Finco, LLC, T Triple Crown Finco,
LLC and Clear Channel Communications, Inc., dated as of
November 16, 2006 (incorporated by reference to the
exhibits to Clear Channels Current Report on Form 8-K
dated November 16, 2006).2.2
    
    Amendment No. 1, dated April 18, 2007, to the Agreement and
Plan of Merger, dated as of November 16, 2006, by and among
BT Triple Crown Merger Co., Inc., B Triple Crown Finco,
LLC, T Triple Crown Finco, LLC and Clear Channel
Communications, Inc. (incorporated by reference to the
exhibits to Clear Channels Current Report on Form 8-K
dated April 18, 2007).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
    
    Current Bylaws of the Company.3.3
    
    Amendment to the Companys Articles of Incorporation
(incorporated by reference to the exhibits to the Companys
Quarterly Report on Form 10-Q for the quarter ended
September 30, 1998).3.4
    
    Second Amendment to Clear Channels Articles of
Incorporation (incorporated by reference to the exhibits to
Clear Channels Quarterly Report on Form 10-Q for the
quarter ended March 31, 1999).3.5
    
    Third Amendment to Clear Channels Articles of
Incorporation (incorporated by reference to the exhibits to
Clear Channels Quarterly Report on Form 10-Q for the
quarter ended May 31, 2000).4.1
    
    Agreement Concerning Buy-Sell Agreement by and between
Clear Channel Communications, Inc., L. Lowry Mays, B.J.
McCombs, John M. Schaefer and John W. Barger, dated August
3, 1998 (incorporated by reference to the exhibits to Clear
Channels Schedule 13-D/A, dated October 10, 2002).4.2
    
    Waiver and Second Agreement Concerning Buy-Sell Agreement
by and between Clear Channel Communications, Inc., L. Lowry
Mays and B.J. McCombs, dated August 17, 1998 (incorporated
by reference to the exhibits to Clear Channels Schedule
13-D/A, dated October 10, 2002).4.3
    
    Waiver and Third Agreement Concerning Buy-Sell Agreement by
and between Clear Channel Communications, Inc., L. Lowry
Mays and B.J. McCombs, dated July 26, 2002 (incorporated by
reference to the exhibits to Clear Channels Schedule
13-D/A, dated October 10, 2002).4.4
    
    Waiver and Fourth Agreement Concerning Buy-Sell Agreement
by and between Clear Channel Communications, Inc., L. Lowry
Mays and B.J. McCombs, dated September 27, 2002
(incorporated by reference to the exhibits to Clear
Channels Schedule 13-D/A, dated October 10, 2002).4.5
    
    Buy-Sell Agreement by and between Clear Channel
Communications, Inc., L. Lowry Mays, B. J. McCombs, John M.
Schaefer and John W. Barger, dated May 31, 1977
(incorporated by reference to the exhibits of the Companys
Registration Statement on Form S-1 (Reg. No. 33-289161)
dated April 19, 1984).4.6
    
    Senior Indenture dated October 1, 1997, by and between
Clear Channel Communications, Inc. and The Bank of New York
as Trustee (incorporated by reference to the exhibits to
the Companys Quarterly Report on Form 10-Q for the quarter
ended September 30, 1997).4.7
    
    Second Supplemental Indenture dated June 16, 1998 to Senior
Indenture dated October 1, 1997, by and between Clear
Channel Communications, Inc. and the Bank of New York, as
Trustee (incorporated by reference to the exhibits to the
Companys Current Report on Form 8-K dated August 27,
1998).
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ExhibitNumber
    
    Description4.8
    
    Third Supplemental Indenture dated June 16, 1998 to Senior
Indenture dated October 1, 1997, by and between Clear
Channel Communications, Inc. and the Bank of New York, as
Trustee (incorporated by reference to the exhibits to the
Companys Current Report on Form 8-K dated August 27,
1998).4.9
    
    Ninth Supplemental Indenture dated September 12, 2000, to
Senior Indenture dated October 1, 1997, by and between
Clear Channel Communications, Inc. and The Bank of New
York, as Trustee (incorporated by reference to the exhibits
to Clear Channels Quarterly Report on Form 10-Q for the
quarter ended September 30, 2000).4.10
    
    Eleventh Supplemental Indenture dated January 9, 2003, to
Senior Indenture dated October 1, 1997, by and between
Clear Channel Communications, Inc. and The Bank of New York
as Trustee (incorporated by reference to the exhibits to
Clear Channels Annual Report on Form 10-K for the year
ended December 31, 2002).4.11
    
    Twelfth Supplemental Indenture dated March 17, 2003, to
Senior Indenture dated October 1, 1997, by and between
Clear Channel Communications, Inc. and The Bank of New
York, as Trustee (incorporated by reference to the exhibits
to Clear Channels Current Report on Form 8-K dated March
18, 2003).4.12
    
    Thirteenth Supplemental Indenture dated May 1, 2003, to
Senior Indenture dated October 1, 1997, by and between
Clear Channel Communications, Inc. and The Bank of New
York, as Trustee (incorporated by reference to the exhibits
to Clear Channels Current Report on Form 8-K dated May 2,
2003).4.13
    
    Fourteenth Supplemental Indenture dated May 21, 2003, to
Senior Indenture dated October 1, 1997, by and between
Clear Channel Communications, Inc. and The Bank of New
York, as Trustee (incorporated by reference to the exhibits
to Clear Channels Current Report on Form 8-K dated May 22,
2003).4.14
    
    Sixteenth Supplemental Indenture dated December 9, 2003, to
Senior Indenture dated October 1, 1997, by and between
Clear Channel Communications, Inc. and The Bank of New
York, as Trustee (incorporated by reference to the exhibits
to Clear Channels Current Report on Form 8-K dated
December 10, 2003).4.15
    
    Seventeenth Supplemental Indenture dated September 15,
2004, to Senior Indenture dated October 1, 1997, by and
between Clear Channel Communications, Inc. and The Bank of
New York, as Trustee (incorporated by reference to the
exhibits to Clear Channels Current Report on Form 8-K
dated September 15, 2004).4.16
    
    Eighteenth Supplemental Indenture dated November 22, 2004,
to Senior Indenture dated October 1, 1997, by and between
Clear Channel Communications, Inc. and The Bank of New
York, as Trustee (incorporated by reference to the exhibits
to Clear Channels Current Report on Form 8-K dated
November 17, 2004).4.17
    
    Nineteenth Supplemental Indenture dated December 13, 2004,
to Senior Indenture dated October 1, 1997, by and between
Clear Channel Communications, Inc. and The Bank of New
York, as Trustee (incorporated by reference to the exhibits
to Clear Channels Current Report on Form 8-K dated
December 13, 2004).4.18
    
    Twentieth Supplemental Indenture dated March 21, 2006, to
Senior Indenture dated October 1, 1997, by and between
Clear Channel Communications, Inc. and The Bank of New
York, as Trustee (incorporated by reference to the exhibits
to Clear Channels Current Report on Form 8-K dated March
21, 2006).
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ExhibitNumber
    
    Description4.19
    
    Twenty-first Supplemental Indenture dated August 15, 2006,
to Senior Indenture dated October 1, 1997, by and between
Clear Channel Communications, Inc. and The Bank of New
York, as Trustee (incorporated by reference to the exhibits
to Clear Channels Current Report on Form 8-K dated August
16, 2006).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.
 - 30 -