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 June 30, 2001             Commission file number 1-9645


                       CLEAR CHANNEL COMMUNICATIONS, INC.

             (Exact name of registrant as specified in its charter)


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



                               200 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 shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes __x__ No _____

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



            Class                               Outstanding at August 10, 2001
- - - - - - - - - - - - - -                     - - - - - - - - - - - -  - - -
Common Stock, $.10 par value                               592,208,978


<PAGE>



               CLEAR CHANNEL COMMUNICATIONS, INC. AND SUBSIDIARIES

                                      INDEX




                                                                       Page No.
                                                                       - - - -

Part I -- Financial Information

     Item 1.  Unaudited Financial Statements

     Consolidated Balance Sheets at June 30, 2001 and December 31, 2000       3

     Consolidated Statements of Operations for the six and three months
         ended June 30, 2001 and 2000                                         5

     Consolidated Statements of Cash Flows for the six months ended
         June 30, 2001 and 2000                                               6

     Notes to Consolidated Financial Statements                               7

     Item 2.  Management's Discussion and Analysis of Financial
         Condition and Results of Operations                                 12

     Item 3.  Quantitative and Qualitative Disclosures About Market Risk     21


Part II -- Other Information

     Item 4.  Submission of Matters to a Vote of Security Holders            22

     Item 6.  Exhibits and reports on Form 8-K                               23

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

     Signatures                                                              23

     Index to Exhibits                                                       24


<PAGE>


<TABLE>


                                     PART I

Item 1.  UNAUDITED FINANCIAL STATEMENTS

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

                                                                       June 30,                   December 31,
                                                                         2001                         2000
                                                                      (Unaudited)                   (Audited)
                                                                      -----------                 ------------
Current Assets
<S>                                                                   <C>                       <C>
   Cash and cash equivalents                                          $    247,150              $    196,838
   Restricted cash                                                              --                   308,691
   Accounts receivable, less allowance of $59,915 at
     June 30, 2001 and $60,631 at December 31, 2000                      1,615,489                 1,557,048
   Prepaid expenses                                                        290,161                   146,767
   Other current assets                                                    137,644                   133,873
                                                                      ------------              ------------
     Total Current Assets                                                2,290,444                 2,343,217

Property, Plant and Equipment
   Land, buildings and improvements                                      1,263,812                 1,197,951
   Structures and site leases                                            2,157,288                 2,395,934
   Transmitter and studio equipment                                        709,912                   744,571
   Furniture and other equipment                                           505,996                   479,532
   Construction in progress                                                315,446                   222,286
                                                                      ------------              ------------
                                                                         4,952,454                 5,040,274
Less accumulated depreciation                                           (1,039,164)                 (785,040)
                                                                      ------------              ------------
                                                                         3,913,290                 4,255,234
Intangible Assets
   Contracts                                                             1,039,307                 1,075,472
   Licenses and goodwill                                                42,074,832                40,973,198
   Other intangible assets                                                 125,396                   175,451
                                                                      ------------              ------------
                                                                        43,239,535                42,224,121
Less accumulated amortization                                           (2,622,069)               (1,731,557)
                                                                      ------------              ------------
                                                                        40,617,466                40,492,564
Other Assets
   Restricted cash                                                           7,981                   319,450
   Notes receivable                                                         42,565                    99,818
   Investments in, and advances to, nonconsolidated affiliates             473,975                   427,303
   Other assets                                                            470,060                   513,773
   Other investments                                                       910,249                 1,605,102
                                                                      ------------              ------------
Total Assets                                                          $ 48,726,030              $ 50,056,461
                                                                      ============              ============

                 See Notes to Consolidated Financial Statements
</TABLE>

                                      -3-
<PAGE>

<TABLE>

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

                                                                       June 30,                  December 31,
                                                                         2001                         2000
                                                                      (Unaudited)                 (Audited)
                                                                     -------------              -------------
Current Liabilities
<S>                                                                   <C>                       <C>
   Accounts payable                                                   $    323,800              $    383,588
   Accrued interest                                                        111,308                   105,581
   Accrued expenses                                                        804,921                   884,941
   Accrued income taxes                                                     96,733                   445,499
   Current portion of long-term debt                                        79,273                    69,699
   Deferred income                                                         437,511                   218,670
   Other current liabilities                                                15,424                    20,572
                                                                      ------------              ------------
     Total Current Liabilities                                           1,868,970                 2,128,550

   Long-term debt                                                        9,804,736                10,610,452
   Deferred income taxes                                                 6,637,160                 6,771,198
   Other long-term liabilities                                             223,892                   137,343

   Minority interest                                                        74,736                    61,745

Shareholders' Equity
   Common stock                                                             59,219                    58,577
   Additional paid-in capital                                           29,924,865                29,558,908
   Common stock warrants                                                   248,626                   249,312
   Retained earnings (deficit)                                              (1,289)                  544,940
   Accumulated other comprehensive income (loss)                           (82,435)                  (32,433)
   Other                                                                   (17,293)                  (26,298)
   Cost of shares held in treasury                                         (15,157)                   (5,833)
                                                                     -------------              ------------
   Total shareholders' equity                                           30,116,536                30,347,173
                                                                     -------------              ------------
Total Liabilities and
   Shareholders' Equity                                               $ 48,726,030              $ 50,056,461
                                                                     =============              ============

                 See Notes to Consolidated Financial Statements

                                      -4-

</TABLE>


<PAGE>

<TABLE>

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


                                                               Six Months Ended                     Three Months Ended
                                                         June 30,         June 30,              June 30,           June 30,
                                                           2001             2000                  2001               2000
                                                       -----------       -----------           -----------      -----------

<S>                                                    <C>               <C>                   <C>              <C>
Gross revenue                                          $ 4,102,792       $ 1,950,017           $ 2,341,773      $ 1,078,642
Less:  agency commissions                                  295,168           201,603               162,512          112,767
                                                       -----------       -----------           -----------      -----------
Net revenue                                              3,807,624         1,748,414             2,179,261          965,875

Operating expenses                                       2,699,283         1,082,690             1,520,215          562,729
Non-cash compensation expense                               12,350                --                 8,456               --
Depreciation and amortization                            1,258,601           448,741               644,850          228,687
Corporate expenses                                          92,682            52,445                47,611           27,867
                                                       -----------       -----------           -----------      -----------
Operating income (loss)                                   (255,292)          164,538               (41,871)         146,592

Interest expense                                           293,939           125,460               137,539           69,911
Gain (loss) on sale of assets related to mergers           (57,390)               --               (51,000)              --
Gain (loss) on marketable securities                        23,805                --                 5,349               --
Equity in earnings of nonconsolidated affiliates             4,608             9,603                 4,045            6,667
Other income (expense) - net                               (17,398)            1,624                (9,765)           1,226
                                                       -----------       -----------           -----------      -----------
Income (loss) before income taxes                         (595,606)           50,305              (230,781)          84,574
Income tax (expense) benefit                                49,377           (58,472)               (6,220)         (53,339)
                                                       -----------       -----------           -----------      -----------
Net income (loss)                                         (546,229)           (8,167)             (237,001)          31,235

Other comprehensive income (loss), net of tax:
  Foreign currency translation adjustments                 (49,259)          (60,544)               (5,905)         (48,039)
  Unrealized gain (loss) on securities:
    Unrealized holding gain (loss) arising during period   (28,990)           73,116               121,671          (27,060)
    Reclassification adjustment for (gains)
      losses on securities transferred to trading          (45,315)               --                    --               --
    Reclassification adjustment for (gains)
      losses included in net income (loss)                  73,562                --                31,595               --
                                                       -----------       -----------           -----------     ------------
Comprehensive income (loss)                            $  (596,231)      $     4,405           $   (89,640)    $    (43,864)
                                                       ===========       ===========           ===========     ============

Net income (loss) per common share:
   Basic                                               $      (.93)      $      (.02)          $      (.40)    $        .09
                                                       ===========       ===========           ===========     ============

   Diluted                                             $      (.93)      $      (.02)          $      (.40)    $        .09
                                                       ===========       ===========           ===========     ============

                 See Notes to Consolidated Financial Statements

                                      -5-

</TABLE>


<PAGE>

<TABLE>


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

                                                                                    Six Months Ended
                                                                          June 30,                     June 30,
                                                                            2001                         2000
                                                                       -----------                 -----------
Cash flows from operating activities:
<S>                                                                    <C>                         <C>
   Net loss                                                            $  (546,229)                $    (8,167)

Reconciling Items:
   Depreciation and amortization                                         1,258,601                     448,741
   Deferred tax (benefit) expense                                         (144,698)                     15,856
   (Recognition) deferral of deferred income                               208,592                       2,554
   (Gain) loss on disposal of assets                                         3,982                      (2,204)
   (Gain) loss on sale of other investments                                 52,133                          --
   (Gain) loss on sale of assets related to mergers                         57,390                          --
   (Gain) loss on forward exchange contract and related securities         (75,938)                         --
   Increase (decrease) other, net                                           13,217                       1,664
   Changes in operating assets and liabilities, net of
     effects of acquisitions                                              (731,852)                   (143,797)
                                                                       -----------                 -----------
Net cash provided by operating activities                                   95,198                     314,647

Cash flows from investing activities:
   Liquidation of restricted cash, net                                     583,762                       4,349
   Decrease (increase) in notes receivable - net                            (3,747)                    (76,000)
   Decrease (increase) in investments in and advances
     to nonconsolidated affiliates - net                                   (16,889)                     (3,657)
   Purchases of investments                                                   (918)                    (41,842)
   Proceeds from sale of investments                                       595,634                          --
   Purchases of property, plant and equipment                             (285,312)                   (201,602)
   Proceeds from disposal of assets                                         74,531                       3,377
   Proceeds from divestitures placed in restricted cash                     41,000
   Acquisition of operating assets                                        (240,086)                   (821,129)
   Acquisition of broadcasting assets with restricted cash                (355,010)                         --
   Decrease (increase) in other-net                                        (42,725)                    (11,230)
                                                                       -----------                 -----------
Net cash provided by (used in) investing activities                        350,240                  (1,147,734)

Cash flows from financing activities:
   Draws on credit facilities                                            1,418,572                   1,568,871
   Payments on credit facilities                                        (1,947,851)                 (1,209,694)
   Proceeds from issuance of long-term debt                                     --                   1,018,790
   Payments on long-term debt                                               (2,796)                   (573,107)
   Proceeds from forward exchange contract                                  90,826                          --
   Proceeds from exercise of stock options, stock
     purchase plan and common stock warrants                                55,123                       8,396
   Payments for purchase of treasury shares                                 (9,000)                         --
                                                                       -----------                 -----------
Net cash (used in) provided by financing activities                       (395,126)                    813,256

   Net (decrease) increase in cash and cash equivalents                     50,312                     (19,831)

   Cash and cash equivalents at beginning of period                        196,838                      76,724
                                                                       -----------                 -----------
   Cash and cash equivalents at end of period                          $   247,150                 $    56,893
                                                                       ===========                 ===========

                 See Notes to Consolidated Financial Statements
</TABLE>
                                      -6-

<PAGE>


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

Note 1:  PREPARATION OF INTERIM FINANCIAL STATEMENTS

The  consolidated  financial  statements  have been  prepared  by Clear  Channel
Communications,  Inc. (the  "Company")  pursuant to the rules and regulations of
the  Securities  and  Exchange   Commission  ("SEC")  and,  in  the  opinion  of
management, include all adjustments (consisting of normal recurring accruals and
adjustments  necessary for adoption of new  accounting  standards)  necessary to
present fairly the results of the interim periods shown. Certain information and
footnote  disclosures  normally  included in  financial  statements  prepared in
accordance with generally accepted accounting  principles have been condensed or
omitted pursuant to such SEC rules and regulations. Management believes that the
disclosures made are adequate to make the information  presented not misleading.
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  2000 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 2000
consolidated  financial statements to conform to the 2001 presentation.

Note 2:  RECENT  ACCOUNTING  PRONOUNCEMENTS

On January 1, 2001, the Company adopted Financial  Accounting Standards No. 133,
Accounting for Derivative  Instruments and Hedging Activities ("Statement 133"),
as amended.  Statement 133 requires that all derivative  instruments be reported
on the balance sheet at fair value and establishes  criteria for designation and
effectiveness  of hedging  relationships.  Statement 133 requires the transition
adjustment resulting from adopting these Statements to be reported in net income
or accumulated other  comprehensive  income,  as appropriate,  as the cumulative
effect of a change in accounting principle.  Upon adoption, the Company recorded
the fair value of its derivative  instruments on its balance sheet.  Adoption of
Statement 133 had no impact on the Company's  results of  operations.  Also upon
adoption,  the Company  reclassified  2.0 million  shares of its  investment  in
American   Tower    Corporation    ("AMT")   that   had   been   classified   as
available-for-sale  securities to trading securities under Financial  Accounting
Standards  No.  115  Accounting  for  Certain  Investments  in Debt  and  Equity
Securities  ("Statement  115").  In accordance  with Statement 115 and Statement
133,  the shares  were  transferred  to a trading  classification  at their fair
market value on January 1, 2001,  of $76.2  million,  and an  unrealized  pretax
holding gain of $69.7  million was  recorded in earnings as "Gain on  marketable
securities".

In June 2001,  the  Financial  Accounting  Standards  Board issued  Statement of
Financial Accounting Standards No. 141, Business Combinations ("Statement 141").
Statement  141  addresses  financial   accounting  and  reporting  for  business
combinations and supersedes APB Opinion No. 16, Business Combinations,  and FASB
Statement  38,  Accounting  for  Preacquisitition   Contingencies  of  Purchased
Enterprises.  Statement 141 is effective for all business combinations initiated
after June 30, 2001. Statement 141 eliminates the pooling-of-interest  method of
accounting for business combinations except for qualifying business combinations
that were  initiated  prior to July 1,  2001.  Statement  141 also  changes  the
criteria to recognize intangible assets apart from goodwill. The Company adopted
this  statement  on July 1,  2001.  As the  Company  has  historically  used the
purchase  method to account for all business  combinations,  management does not
believe  adoption  of  this  statement  will  materially  impact  the  Company's
financial position or results of operations.

In June 2001,  the  Financial  Accounting  Standards  Board issued  Statement of
Financial  Accounting  Standards No. 142,  Goodwill and Other Intangible  Assets
("Statement 142").  Statement 142 addresses  financial  accounting and reporting
for acquired goodwill and other intangible assets and supersedes APB Opinion No.
17,  Intangible  Assets.  Statement 142 is effective for fiscal years  beginning
after December 15, 2001. This statement  establishes new accounting for goodwill
and other  intangible  assets recorded in business  combinations.  Under the new

                                      -7-
<PAGE>

rules,  goodwill and intangible  assets deemed to have indefinite  lives will no
longer be amortized but will be subject to annual impairment tests in accordance
with the statement.  Other intangible  assets will continue to be amortized over
their useful lives. As the Company's  amortization of goodwill and certain other
indefinite life  intangibles is a significant  non-cash expense that the Company
currently  records,  Statement 142 will have a material  impact on the Company's
financial  statements.  For the  three  and six  months  ended  June  30,  2001,
amortization  expense  related to goodwill and indefinite  life  intangibles was
approximately $440.0 million and $880.0 million, respectively. In addition, upon
adoption, the Company will perform the first of the required impairment tests of
goodwill and indefinite  life  intangibles  and have not yet determined what the
effect of these tests will be on the Company's  financial position or results of
operations.

Note 3: ACQUISITIONS

Restructuring
-------------

Due to the Company's mergers with SFX Entertainment,  Inc. ("SFX") and AMFM Inc.
("AMFM"),  the  Company  formalized  a plan to  restructure  the  SFX  and  AMFM
operations.  The Company communicated to all affected employees the last date of
their employment.  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 or will be either
discontinued  or integrated  into existing  similar  operations.  As of June 30,
2001, the restructuring has resulted in the actual  termination of 511 employees
and the pending termination of approximately 46 more employees.  The majority of
the  restructuring  was  completed by June 30, 2001.  The Company has recorded a
liability in purchase  accounting  primarily related to severance for terminated
employees and lease terminations as follows:

<TABLE>
(In thousands)
                                                                 June 30, 2001           December 31, 2000
                                                                --------------           -----------------
     Severance costs:
<S>                                                             <C>                          <C>
         Severance accrual at January 1                         $    41,265                  $     1,882
         Estimated costs charged to restructuring
             accrual in purchase accounting                              --                       78,525
         Adjustments to purchase accounting                          10,062                       (1,735)
         Payments charged against restructuring
             accrual                                                (45,730)                     (37,407)
                                                                -----------                  -----------

     Remaining severance accrual                                $     5,597                  $    41,265
                                                                ===========                  ===========


     Lease termination and other restructuring costs:
         Lease accrual at January 1                             $    43,026                  $     2,466
         Estimated costs charged to restructuring
             accrual in purchase accounting                              --                       46,473
         Adjustments to purchase accounting                             367                       (2,466)
         Payments charged against restructuring
             accrual                                                 (1,763)                      (3,447)
                                                                -----------                  -----------

     Remaining lease and other restructuring cost accrual       $    41,630                  $    43,026
                                                                ===========                  ===========

</TABLE>

                                      -8-
<PAGE>


Pro Forma
---------

The results of operations for the six-month  period ending June 30, 2001 include
the  operations  of SFX,  AMFM and Donrey  Media Group  ("Donrey").  The Company
completed  its mergers with SFX and AMFM in August 2000 and  acquired  Donrey in
September  2000.  Assuming the mergers with SFX and AMFM and the  acquisition of
Donrey had all  occurred at January 1, 2000,  unaudited  pro forma  consolidated
results of operations  for the six months ended June 30, 2000 would have been as
follows:

(In thousands, except per share data)

           Net revenue                                    $ 3,749,156
           Net loss                                       $  (340,993)
           Net loss per share basic and diluted           $      (.75)

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
mergers/acquisitions  of SFX, AMFM and Donrey occurred at the beginning of 2000,
nor is it  indicative  of future  results of  operations.  The Company had other
acquisitions during 2000 and the first six months of 2001, the effects of which,
individually and in aggregate,  were not material to the Company's  consolidated
financial position or results of operations.

The purchase price allocations of SFX, AMFM and Donrey are preliminary,  pending
the refinement of contingent items.

Other
-----

As a result of the Company's recent acquisitions,  it has integrated  operations
and  performed  analysis of the  deployed  assets,  with those  assets no longer
necessary  being  written  down  to  net  realizable  value.  This  resulted  in
additional  depreciation  expense  for the six  months  ended  June 30,  2001 of
approximately $50.0 million.

Note 4: ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

Statement  133 requires that all  derivatives  be recognized as either assets or
liabilities at fair value.  Derivatives  that are not hedges must be adjusted to
fair value through income. If the derivative is a hedge, depending on the nature
of the hedge,  changes in fair value will either be offset against the change in
fair value of the hedged assets or liabilities  through earnings,  or recognized
in accumulated other comprehensive income until the hedged item is recognized in
earnings.

In accordance with the Company's risk management policies, it formally documents
its hedging relationships,  including  identification of the hedging instruments
and the hedged items, as well as its risk  management  objectives and strategies
for undertaking the hedge transaction.  The Company formally  assesses,  both at
inception and at least quarterly  thereafter,  whether the derivatives  that are
used in hedging  transactions  are highly  effective  in  offsetting  changes in
either the fair value or cash flows of the hedged item.  If a derivative  ceases
to be a highly effective hedge, the Company  discontinues hedge accounting.  The
Company does not enter into  derivative  instruments  for speculation or trading
purposes.

Interest Rate Risk Management
-----------------------------

The  Company's  policy is to manage  interest  expense  using a mix of fixed and
variable rate debt. To manage this mix in a cost-efficient  manner,  the Company
enters  into  interest  rate  swap  agreements  in which the  Company  agrees to
exchange,  at specified  variables,  the  difference  between fixed and variable
interest amounts  calculated by reference to an agreed-upon  notional  principal
amount.  These  swaps,   designated  as  fair  value  hedges,  hedge  underlying
fixed-rate debt obligations  with a principal amount of $1.5 billion.  The terms
of the underlying debt and the interest rate swap agreements coincide; therefore
the  hedge  qualifies  for  the  short-cut  method  defined  in  Statement  133.
Accordingly,  no net gains or losses  were  recorded  in income  related  to the
Company's underlying debt and interest rate swap agreements.  In accordance with
Statement 133, on January 1, 2001, the Company  recorded an asset on the balance
sheet as "Other long-term  assets" of $49.0 million to reflect the fair value of
the interest  rate swap  agreements  and  increased  the  carrying  value of the
underlying  debt by an equal  amount.  On June 30,  2001,  the fair value of the
interest rate swap agreements was approximately $70.2 million.  Accordingly,  an
adjustment was made to the asset and carrying  value of the  underlying  debt on
June 30, 2001 to reflect the increase in fair value.

                                      -9-
<PAGE>

Secured Forward Exchange Contract
---------------------------------

On January 31, 2001,  and again on June 25,  2001,  Clear  Channel  Investments,
Inc., a wholly-owned  subsidiary of the Company,  entered into ten-year  forward
sale contracts that monetized,  in aggregate 2.9 million shares of the Company's
investment in AMT. The secured forward  exchange  contracts  protect the Company
against  decreases in the fair value of AMT stock while providing  participation
in  increases  in the fair  value of the stock.  During the term of the  secured
forward exchange contracts, the Company retains ownership of the AMT shares. The
Company's   obligation   under  the  secured  forward   exchange   contracts  is
collateralized  by a security  interest in the AMT shares.

Under  Statement  133,  these  contracts  are  considered  hybrid  instruments -
long-term  obligations with derivative  instruments embedded into the contracts.
Statement  133  requires  a hybrid  instrument  to be  bifurcated  such that the
long-term  obligations and the embedded derivatives are accounted for separately
under the appropriate  accounting guidance.  The long-term obligations have been
recorded on the balance  sheet as "Other  long-term  liabilities"  at their fair
value at inception  of $56.9  million and are being  accreted to their  maturity
values of an aggregate  of $103.0  million over their  ten-year  term,  with the
accretion  classified as interest  expense.  As of June 30, 2001,  the aggregate
balance of the long-term obligations was $58.5 million. As of June 30, 2001, the
aggregate balance of the embedded  derivatives  recorded on the balance sheet as
"Other  assets" was $6.9  million.  For the three and six months  ended June 30,
2001, the fair value of the embedded  derivative  increased $1 million and $40.8
million,  respectively.  The  increase in fair value was recorded in earnings as
"Gain on marketable securities".  On June 30, 2001, the fair market value of the
2.0 million shares of AMT that had been  reclassified as trading  securities was
$41.6 million.  For the three and six months ended June 30, 2001, the fair value
of the AMT shares  classified as trading  securities  had increased $4.3 million
and decreased $31.2 million,  respectively.  The change in the fair market value
of  these  shares  has  been   recorded  in  earnings  as  "Gain  on  marketable
securities".  For the six months  ended June 30, 2001,  the amounts  recorded in
"Gain  on  marketable  securities"  relating  to the  secured  forward  exchange
contracts  were partially  offset by a net loss of $52.1 million  related to the
impairment of various investments.

Foreign Currency Rate Management
--------------------------------

As a result of the  Company's  foreign  operations,  the  Company  is exposed to
foreign currency exchange risks related to its net assets in foreign  countries.
To manage this risk, the Company enters into foreign denominated debt to hedge a
portion of the  effect of  movements  in  currency  exchange  rates on these net
investments.  The Company's major foreign  currency  exposure  involves  markets
operating in Euros and the British pound.  The primary  purpose of the Company's
foreign currency hedging  activities is to offset the translation gain or losses
associated with the Company's net investments  denominated in foreign currencies
reported in shareholders'  equity as "Accumulated other  comprehensive  income".
Since the debt is  denominated  in the same currency of the foreign  denominated
net investment,  the hedge will offset a portion of the  translation  changes in
the corresponding net investment.  Since an assessment of this hedge revealed no
ineffectiveness,  all of the translation  gains and losses  associated with this
debt  are  reflected  as  a  translation  adjustment  within  accumulated  other
comprehensive  income  within  shareholders'   equity.  As  of  June  30,  2001,
cumulative  translation losses of $188.9 million have been reported as a part of
"Accumulated other comprehensive  income" within  shareholders' equity.



                                      -10-
<PAGE>

Note 5: CONVERSION OF LONG-TERM DEBT

On May 7, 2001, the Company delivered notice of its intent to redeem on June 12,
2001 the total  outstanding  principal  amount of its 5.50%  Liquid Yield Option
Notes  ("LYONs"),  recorded  on the  balance  sheet  as  "Long-term  debt".  The
redemption  price was $581.25 per each $1,000 LYON outstanding at June 12, 2001.
Each LYON was convertible, at the option of the holder, at any time prior to the
close of business June 12, 2001.  Substantially all of the 5.50% LYONs converted
into 3.9 million  shares of the Company's  common stock prior to the  redemption
date.

Note 6:  SEGMENT DATA

The Company has three reportable operating segments, which best reflects how the
Company is currently managed - radio broadcasting,  outdoor advertising and live
entertainment.  Revenue and  expenses  earned and charged  between  segments are
recorded at fair value.
<TABLE>

(In thousands)                                      Six Months Ended                     Three Months Ended
                                               June 30,          June 30,             June 30,          June 30,
                                                 2001              2000                 2001              2000
                                               --------          --------             --------          --------
Net revenue
<S>                                       <C>               <C>                   <C>              <C>
   Radio Broadcasting                     $   1,698,822     $     874,825         $     940,831    $     479,372
   Outdoor Advertising                          860,707           797,192               461,451          441,421
   Live Entertainment                         1,098,335                --               697,255               --
   Other                                        213,810           103,637               112,306           57,771
   Eliminations                                 (64,050)          (27,240)              (32,582)         (12,689)
                                          -------------     -------------         -------------    -------------
Consolidated                              $   3,807,624     $   1,748,414         $   2,179,261    $     965,875

Operating expenses
   Radio Broadcasting                     $   1,000,655     $     539,280         $     536,306    $     276,526
   Outdoor Advertising                          577,020           501,742               294,209          259,084
   Live Entertainment                         1,025,639                --               641,335               --
   Other                                        160,019            68,908                80,947           39,808
   Eliminations                                 (64,050)          (27,240)              (32,582)         (12,689)
                                          -------------     -------------         -------------    -------------
Consolidated                              $   2,699,283     $   1,082,690         $   1,520,215    $     562,729

Depreciation and Amortization
   Radio Broadcasting                     $     808,335     $     230,546         $     428,448    $     116,169
   Outdoor Advertising                          269,132           200,698               122,548          103,388
   Live Entertainment                           133,448                --                62,848               --
   Other                                         47,686            17,497                31,006            9,130
                                          -------------     -------------         -------------    -------------
Consolidated                              $   1,258,601     $     448,741         $     644,850    $     228,687

Operating income (loss)
   Radio Broadcasting                     $    (110,168)    $     105,077         $     (23,923)   $      85,940
   Outdoor Advertising                           (6,452)           73,219                34,301           68,815
   Live Entertainment                           (82,058)               --               (18,778)              --
   Other                                        (56,614)          (13,758)              (33,471)          (8,163)
                                          -------------     -------------         -------------    -------------
Consolidated                              $    (255,292)    $     164,538         $     (41,871)   $     146,592
</TABLE>


                                                          As of
                                               June 30,          June 30,
                                                 2001              2000
                                               --------          --------
Total identifiable assets
   Radio Broadcasting                     $  33,979,277     $   9,414,817
   Outdoor Advertising                        7,655,874         6,759,525
   Live Entertainment                         5,632,589                --
   Other                                      1,458,290         1,473,718
                                          -------------     -------------
Consolidated                              $  48,726,030     $  17,648,060

Net revenue of $579.2  million and $258.8  million for the six and three  months
ended June 30, 2001,  respectively and $388.6 million and $215.6 million for the
six and three months ended June 30, 2000, respectively,  and identifiable assets
of $2.7 billion and $2.2 billion as of June 30, 2001 and 2000,  respectively are
included in the data above and are derived from the Company's foreign
operations.

                                     -11-
<PAGE>

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

                              RESULTS OF OPERATIONS

         We evaluate the operating performance of our businesses using several
measures, one of them being EBITDA (defined as net revenue less operating and
corporate expenses). EBITDA eliminates the uneven effect across our business
segments, as well as in comparison to other companies, of considerable amounts
of non-cash depreciation and amortization recognized in business combinations
accounted for under the purchase method. Historically, we have accounted for all
mergers and acquisitions under the purchase method. Non-cash depreciation and
amortization is significant due to the consolidation in our industry. While we
and many in the financial community consider EBITDA to be an important measure
of operating performance, it should be considered in addition to, but not as a
substitute for or superior to, other measures of financial performance prepared
in accordance with generally accepted accounting principles such as operating
income and net income.

         We measure the performance of our operating segments and managers based
on a pro forma measurement. Pro forma includes adjustments to the prior period
for all acquisitions. For each acquisition, 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 that pro forma is the best measure of our
operating performance as it includes the performance of assets for the period of
time we managed the assets.

         Pro forma is compared in constant U.S. dollars (i.e. a currency
exchange adjustment is made to the current period actual results to present
foreign revenues and expenses in prior period dollars) allowing for comparison
of operations independent of foreign exchange movements. In order to properly
reflect the above definition, for the six months ended June 30 amounts,
adjustments were made to the three months ended March 31 amounts, which when
previously reported, had included our proportionate share of the results of
operations of actively managed equity investments.

         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 Six Months Ended June 30, 2001 to Three and Six Months
Ended June 30, 2000.
<TABLE>

Consolidated
------------
(In thousands)

                                                      As Reported
                                              Three Months Ended June 30,
                                           -----------------------------------     % Change         % Change
                                               2001                  2000        As Reported        Pro Forma
                                             ----------            --------      -----------        ---------
<S>                                          <C>                   <C>                  <C>            <C>
Net Revenue                                  $2,179,261            $965,875             126%           (1%)
Operating Expenses                            1,520,215             562,729             170%            5%
Corporate Expenses                               47,611              27,867              71%          (15%)
                                             ----------            --------
EBITDA                                        $ 611,435            $375,279              63%          (13%)
                                             ==========            ========

                                                      As Reported
                                               Six Months Ended June 30,
                                           -----------------------------------     % Change         % Change
                                                2001                 2000        As Reported        Pro Forma
                                             ------------          ----------    -----------        ---------
Net Revenue                                    $3,807,624          $1,748,414           118%             (5%)
Operating Expenses                              2,699,283           1,082,690           149%             (1%)
Corporate Expenses                                 92,682              52,445            77%            (15%)
                                               ----------          ----------
EBITDA                                         $1,015,659          $  613,279            66%            (13%)
                                               ==========          ==========
</TABLE>
                                      -12-
<PAGE>


         On a reported basis, net revenue and operating expenses increased
primarily due to our 2000 acquisitions. Included in our three and six months
ended June 30, 2001 reported basis amounts are the net revenues and operating
expenses for our 2000 acquisitions, the most significant being SFX
Entertainment, Inc. acquired on August 1, 2000, AMFM Inc. acquired on August 30,
2000, and Donrey acquired on September 1, 2000. Corporate expenses increased on
a reported basis also due to the above acquisitions.

         On a pro forma basis, net revenue decreased in the three and six months
ended June 30, 2001 due to an overall softening of the advertising industry,
especially as compared to the strong advertising environment during the first
six months of 2000. During the first six months of 2000, advertising rates were
higher in our radio and outdoor businesses related to the increased inventory
demand within the advertising industry. For the three months ended June 30,
2001, operating expenses increased primarily due to the increase in revenue
within the entertainment division during the current period as compared to the
prior period. This increase in operating expenses along with a smaller increase
in the outdoor division was partially offset by a decrease in the radio
division. For the six months ended June 30, 2001 operating expenses declined as
a result of the decrease in revenue. Also, corporate expenses declined on a pro
forma basis primarily related to savings associated with our recent mergers and
other cost saving measures.

Other Income and Expense Information
------------------------------------

         Non-cash compensation expense of $8.5 million and $12.4 million was
recorded during the three and six months ended June 30, 2001, respectively. This
expense is primarily due to assumed unvested stock options granted to AMFM
employees that are now convertible into Clear Channel stock. To the extent that
these employees' options continue to vest, we recognize non-cash compensation
expense over the remaining vesting period. Vesting dates range from January 2001
to April 2005. If no employees forfeit their unvested options by leaving the
company, we expect to recognize non-cash compensation expense of approximately
$17.5 million during the remaining vesting period. In addition to the expense
associated with the assumed unvested stock options granted to AMFM employees, we
have recognized expense associated with modifications made to existing options
during specific employee contract negotiations. We expect to recognize non-cash
compensation expense of approximately $6.6 million over the next five years
relating to these specific contracts.

         For the three and six months ended June 30, 2001, depreciation and
amortization expense increased from $228.7 million and $448.7 million,
respectively to $644.9 million and $1.3 billion, respectively. The increase is
due primarily to additional amortization of FCC licenses and goodwill associated
with the AMFM acquisition and amortization of goodwill and other intangibles
associated with the SFX acquisition. In addition to the increase relating to
recent acquisitions, during the six months ended June 30, 2001, we wrote down
certain assets deemed to be no longer necessary in our ongoing operations to
their net realizable value. The majority of the assets identified resulted from
the continuing integration of recent acquisitions, as well as analog television
equipment, and an impairment of an operating contract. As we continue
integration and analysis of the assets deployed in the operations of our
business, with those assets deemed no longer necessary being written down to
their net realizable value, we will possibly recognize additional depreciation
and amortization expense.

         Interest expense was $293.9 million and $125.5 million for the six
months ended June 30, 2001 and 2000, respectively. For the three months ended
June 30, 2001 and 2000, interest expense increased $67.6 million from $69.9
million to $137.5 million, a 97% increase. The increase was due to the overall
increase in average amounts of debt outstanding and the higher coupons on fixed
rate issuances during 2000. This increase was partially offset by the decrease
in LIBOR rates. Currently, approximately 47% of our debt is variable-rate debt
that bears interest based upon LIBOR. The 1-Month LIBOR rates decreased from
6.64% at June 30, 2000 to 3.86% at June 30, 2001.

         The loss on sale of assets related to mergers for the six months ended
June 30, 2001 of $57.4 million is primarily due to a loss of $78.7 million
related to the sale of 14.5 million shares of Lamar Advertising Company that we
acquired in the AMFM merger, and a net loss of $11.6 million related to
write-downs of other investments acquired in mergers. This loss was partially
offset by a gain of $32.9 million realized on the sale of five stations in
connection with governmental directives regarding the AMFM merger. For the three
months ended June 30, 2001, a loss of $51.0 million was recorded related to the
sale of 8.0 million shares of Lamar Advertising Company.

                                      -13-

<PAGE>

         The gain on marketable securities is primarily related to the
reclassification of 2.0 million shares of American Tower Corporation to a
trading security under Financial Accounting Standards No. 115 Accounting for
Certain Investments in Debt and Equity Securities and Financial Accounting
Standards No. 133 Accounting for Derivative Instruments and Hedging Activities.
On January 1, 2001, the shares were transferred to a trading classification at
their fair market value of $76.2 million and an unrealized pretax holding gain
of $69.7 million was recognized. During the six months ended June 30, 2001, we
entered into two secured forward exchange contracts that monetized part of our
investment in American Tower. The fair value adjustment of the American Tower
trading shares and the secured forward exchange contract netted gains of $5.3
million and $9.6 million during the three and six months ended June 30, 2001,
respectively. In addition, during the first quarter of 2001, a net loss of $52.1
million was recognized related to impairments of other investments that had
declines in their market values that were considered to be other than temporary.

         Equity in earnings of nonconsolidated affiliates for the six months
ended June 30, 2001 was $4.6 million as compared to $9.6 million for the same
period of 2000. The decrease was due to declining operating results primarily in
our radio broadcasting equity investments. For similar reasons, equity in
earnings of nonconsolidated affiliates for the three months ended June 30, 2001
declined $2.6 million from $6.7 million for the three months ended June 30,
2000.

         For the three and six months ended June 30, 2001, Other income
(expense) net was an expense of $9.8 million and $17.4 million, respectively, as
compared to income of $1.2 million and $1.6 million in the same periods of 2000,
respectively. The additional expense recognized in 2001 related primarily to the
reimbursements of capital costs within certain operating contracts as well as
software development costs and other miscellaneous expenses.

         An income tax benefit of $49.4 million was recorded for the six months
ended June 30, 2001, as compared to an income tax expense of $58.5 million
recorded in the same period of 2000. Each period's effective tax rate was
adversely affected by amortization of intangibles in excess of amounts that are
deductible for tax purposes.

<TABLE>

Radio Broadcasting
------------------
(In thousands)

                                                      As Reported
                                              Three Months Ended June 30,
                                           -----------------------------------     % Change         % Change
                                               2001                  2000        As Reported        Pro Forma
                                            ---------              --------      -----------        ---------
<S>                                          <C>                   <C>                 <C>             <C>
Net Revenue                                  $940,831              $479,372            96%             (7%)
Operating Expenses                            536,306               276,526            94%             (2%)
                                            ---------              --------
EBITDA                                       $404,525              $202,846            99%            (13%)
                                            =========              ========

                                                      As Reported
                                               Six Months Ended June 30,
                                           -----------------------------------     % Change         % Change
                                                2001                 2000        As Reported        Pro Forma
                                             ----------            --------      -----------        ---------
Net Revenue                                  $1,698,822            $874,825            94%             (8%)
Operating Expenses                            1,000,655             539,280            86%             (5%)
                                             ----------            --------
EBITDA                                       $  698,167            $335,545           108%            (10%)
                                             ==========            ========
</TABLE>

         Net revenues and operating expenses increased on a reported basis due
to our acquisitions completed during 2000. Included in our three and six months
ended June 30, 2001 reported amounts are net revenues and operating expenses
from our acquisition of AMFM in August 2000.

         On a pro forma basis, net revenue decreased due to high inventory
demands and advertising rates experienced during the first six months of 2000
related to the overall strength of the U.S. economy and the rapid growth of the
Internet industry. On a pro forma basis, operating expenses decreased
incrementally with the decrease in net revenue.

<TABLE>
                                      -14-

<PAGE>


Outdoor Advertising
-------------------
(In thousands)

                                                      As Reported
                                              Three Months Ended June 30,
                                           -----------------------------------     % Change         % Change
                                               2001                  2000        As Reported        Pro Forma
                                             --------              --------      -----------        ---------
<S>                                          <C>                   <C>                  <C>            <C>
Net Revenue                                  $461,451              $441,421             5%             (6%)
Operating Expenses                            294,209               259,084            14%              1%
                                             --------              --------
EBITDA                                       $167,242              $182,337            (8%)           (15%)
                                             ========              ========

                                                      As Reported
                                               Six Months Ended June 30,
                                           -----------------------------------     % Change         % Change
                                               2001                  2000        As Reported        Pro Forma
                                               ----                  ----        -----------        ---------
Net Revenue                                  $860,707              $797,192             8%             (4%)
Operating Expenses                            577,020               501,742            15%              2%
                                             --------              --------
EBITDA                                       $283,687              $295,450            (4%)           (13%)
                                             ========              ========
</TABLE>

         Net revenues and operating expenses increased on a reported basis due
to our acquisitions completed during 2000. Included in the three and six months
ended June 30, 2001 reported basis amounts are net revenues and operating
expenses from our acquisition of Donrey in September 2000, as well as other less
significant acquisitions.

         On a pro forma basis, due to difficult comparisons to the prior year
period, net revenues decreased during the three and six months ended June 30,
2001 as compared to the same periods of 2000. Pro forma operating expenses
increased primarily due to increased expenses associated with investments and
expansion of operations of recently acquired assets and contracts.

<TABLE>

Live Entertainment
------------------
(In thousands)

                                                      As Reported
                                              Three Months Ended June 30,
                                           -----------------------------------    % Change         % Change
                                               2001                  2000        As Reported        Pro Forma
                                               ----                  ----        -----------        ---------
<S>                                             <C>                  <C>                                <C>
Net Revenue                                     $697,255             $  --           n/a                12%
Operating Expenses                               641,335                --           n/a                12%
                                                --------             -----
EBITDA                                          $ 55,920             $  --           n/a                11%
                                                ========             =====

                                                      As Reported
                                               Six Months Ended June 30,
                                           -----------------------------------     % Change         % Change
                                               2001                  2000        As Reported        Pro Forma
                                               ----                  ----        -----------        ---------
Net Revenue                                   $1,098,335             $  --           n/a                 2%
Operating Expenses                             1,025,639                --           n/a                 3%
                                              ----------             -----
EBITDA                                        $   72,696             $  --           n/a               (16%)
                                              ==========             =====
</TABLE>

         We entered the live entertainment business with our acquisition of SFX
in August 2000. On a pro forma basis, net revenue increased during the three and
six months ended June 30, 2001 as compared to the same periods of the prior year
due to a change in the mix of live events during 2001 as compared to 2000.
Although the number of live events decreased over the prior period, there were
more stadium and arena events in 2001, which generated higher revenues due to
increased seating capacity. In addition, sell-out rates slightly increased over
the prior period. Operating expenses increased on a pro forma basis due to the
increase in revenue.

                                      -15-

<PAGE>



                         LIQUIDITY AND CAPITAL RESOURCES

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

         As of June 30, 2001 and December 31, 2000 we had the following debt
outstanding:
<TABLE>

(In millions)
                                                         June 30, 2001          December 31, 2000
                                                         -------------          -----------------
<S>                                                       <C>                     <C>
         Credit facilities - domestic                     $   2,662.9             $   3,203.8
         Credit facility - international                         87.2                   118.3
         Senior convertible notes                             1,575.0                 1,575.0
         Liquid Yield Option Notes                              240.6 (a)               497.1
         Long-term bonds                                      5,168.5 (b)             5,153.6
         Other borrowings                                       149.8                   132.4
                                                          -----------             -----------
         Total                                            $   9,884.0 (c)         $  10,680.2
                                                          ===========             ===========
</TABLE>

(a) Includes $44.8 million in unamortized fair value purchase accounting
    adjustment related to the merger with Jacor Communications, Inc.
(b) Includes $70.8 million in unamortized fair value purchase accounting
    adjustments related to the mergers with Jacor and AMFM. Also includes $70.2
    million related to fair value adjustments for interest rate swap agreements.
(c) Total face value of outstanding debt was $9.8 billion at June 30, 2001.

         We had $247.2 million in unrestricted cash and cash equivalents on hand
at June 30, 2001.

SOURCES OF CAPITAL

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.

         The first credit facility is a $1.8 billion revolving credit facility.
At June 30, 2001, $1.6 billion was outstanding and, taking into account
outstanding letters of credit, $145.2 million was available for future
borrowings. This credit facility began reducing on September 30, 2000, with
quarterly repayment of the outstanding principal balance to continue over the
next five years and the entire balance to be repaid by the last business day of
June 2005.

         The second facility is a $1.5 billion, 364-day revolving credit
facility, which we have the option, prior to its August 29, 2001 maturity, to
convert into a term loan with a four-year maturity. There was no amount
outstanding at June 30, 2001 and $1.5 billion was available for future
borrowings. We requested a 364-day extension of this facility and at August 10,
2001 have received $1.5 billion in commitments to extend the facility to August
28, 2002.

         The third facility is a $1.5 billion, five-year multi-currency
revolving credit facility. At June 30, 2001, the outstanding balance was $1.1
billion and, taking into account letters of credit, $400.7 million was available
for future borrowings.

         During the six months ended June 30, 2001, we made principal payments
totaling $1.9 billion and drew down $1.3 billion on these credit facilities. As
of August 10, 2001, the credit facilities aggregate outstanding balance was $2.9
billion and, taking into account outstanding letters of credit, $1.8 billion was
available for future borrowings.

                                      -16-
<PAGE>

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
and smaller acquisitions. At June 30, 2001, approximately $62.8 million was
available for future borrowings and $87.2 million was outstanding. This credit
facility expires on December 8, 2005.

Restricted Cash
---------------

         In connection with the AMFM merger and related governmental directives,
we divested five radio stations, which had been placed in a trust, for $41.0
million. These proceeds were placed in a restricted trust for the purchase of
replacement properties. The following table details the activity in the
restricted cash accounts:

(In thousands)
Restricted cash balance at January 1, 2001                         $ 628,141
Proceeds from sale of stations                                        41,000
Restricted cash used in acquisitions                                (355,010)
Interest, net of fees                                                  4,601
Expired amount refunded                                             (310,751)
                                                                   ---------
Restricted cash balance at June 30, 2001                           $   7,981
                                                                   =========

Sale of Marketable Securities
-----------------------------

         In connection with our merger with AMFM on August 30, 2000, Clear
Channel and AMFM entered into a Consent Decree with the Department of Justice
regarding AMFM's investment in Lamar Advertising Company. The Consent Decree,
among other things, required us to sell all of our 26.2 million shares of Lamar
by December 31, 2002 and relinquish all shareholder rights during the
disposition period. As a result, we do not exercise significant influence and
account for the investment under the cost method of accounting. During the six
months ended June 30, 2001, we received proceeds of $595.6 million relating to
the sale of 14.5 million shares of Lamar common stock.

USES OF CAPITAL

Acquisitions
------------

         During the six months ended June 30, 2001, we acquired 151 radio
stations in 44 markets for $28.4 million in cash, $343.3 million in restricted
cash plus the exchange of seven radio stations. We also acquired approximately
1,450 additional outdoor display faces in 25 domestic markets and approximately
7,750 additional display faces in 38 international markets for a total of $94.7
million in cash. Our outdoor segment also acquired investments in
non-consolidated affiliates for a total of $37.9 million in cash. During the six
months ended June 30, 2001, our live entertainment segment acquired music,
sports and racing events, promotional assets and sports talent representation
contracts for $73.9 million in cash. We also acquired the FCC license of a
television station that we had previously been operating under a local marketing
agreement and other Internet assets for a total of $5.1 million in cash and
$11.7 million in restricted cash.

                                      -17-

<PAGE>


Capital Expenditures
--------------------

         Capital expenditures increased from $201.6 million for the six months
ended June 30, 2000 to $285.3 million in same period of 2001. Overall, capital
expenditures increased due the increase in the number of radio stations,
billboards and displays owned during the six months ended June 30, 2001 as
compared to the six months ended June 30, 2000. In addition, we incurred capital
expenditures related to our new live entertainment segment during the six months
ended June 30, 2001 that we did not incur in the same period of 2000. The
increase for the six months ended June 30, 2001 primarily relates to additional
spending relating to facility consolidation resulting from our acquisitions,
technological upgrades of operating assets, and the construction and purchase of
new revenue-producing advertising displays.
<TABLE>

(In millions)
                                       Six Months Ended June 30, 2001 Capital Expenditures
                                       ---------------------------------------------------

                                  Radio      Outdoor    Entertainment    Other         Total
                                  -----      -------    -------------    -----         -----

<S>                            <C>          <C>           <C>          <C>            <C>
     Recurring                 $   17.8     $   30.2      $   8.4      $  10.2        $   66.6
     Non-recurring projects        59.0          6.4         20.1         26.8           112.3
     Revenue producing               --         93.8         12.6           --           106.4
                               --------     --------      -------      -------        --------
                               $   76.8     $  130.4      $  41.1      $  37.0        $  285.3
                               ========     ========      =======      =======        ========
</TABLE>

         Our radio broadcasting capital expenditures during the six months ended
June 30, 2001 are related primarily to expenditures associated with the
consolidation of operations in certain markets in conjunction with acquisitions
that are expected to result in improved operating results in such markets.

         Our outdoor advertising capital expenditures during the six months
ended June 30, 2001 are related primarily to the construction of new revenue
producing advertising displays as well as replacement expenditures on our
existing advertising displays.

         Our live entertainment capital expenditures during the six months ended
June 30, 2001 include expenditures primarily related to a consolidated sales and
operations facility, new venues and improvements to existing venues.

         Included in "other" capital expenditures during the six months ended
June 30, 2001 is the purchase of land for an additional corporate facility to
accommodate our growth, upgrades of our television related operating assets and
other technological expenditures.

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

Liquid Yield Option Notes
-------------------------

         We assumed 4.75% Liquid Yield Option Notes ("LYONs") due 2018 and 5.50%
LYONs due 2011 as a part of the merger with Jacor. Each LYON has a principal
amount at maturity of $1,000 and is convertible, at the option of the holder, at
any time on or prior to maturity, into our common stock at a conversion rate of
7.227 shares per LYON and 15.522 shares per LYON for the 2018 and 2011 issues,
respectively. On May 7, 2001, we delivered notice of our intent to redeem the
total outstanding principal amount of the 5.50% LYONs on June 12, 2001. Pursuant
to the indenture agreement, the redemption price of $581.25 per each $1,000 LYON
outstanding at June 12, 2001 was equal to the issue price plus accrued original
issue discount through the redemption date. Substantially all of the 5.50% LYONs
converted into our common stock prior to the redemption date. The LYONs balance,
after conversions to common stock, amortization of purchase accounting premium,
and accretion of interest, at June 30, 2001 was $240.6 million.

                                      -18-

<PAGE>


Other
-----

         During the six months ended June 30, 2001, we made cash tax payments of
$450.0 million relating to gains realized on divested radio stations.

Commitments and Contingencies

         There are various 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. 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.

Market Risk

   Interest Rate Risk

         At June 30, 2001, approximately 47% of our long-term debt, including
fixed rate debt on which we have entered 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 quarter's average interest rate
under these borrowings, it is estimated that our six months ended June 30, 2001
interest expense would have changed by $90.0 million and that our six months
ended June 30, 2001 net loss would have changed by $55.8 million. In the event
of an adverse change in interest rates, management may take actions to further
mitigate its exposure. However, due to the uncertainty of the actions that would
be taken and their possible effects, the analysis assumes no such actions.
Further, the analysis does not consider the effects of the change in the level
of overall economic activity that could exist in such an environment.

         We have entered into interest rate swap agreements that effectively
float interest at rates based upon LIBOR on $1.5 billion of our current fixed
rate borrowings. These agreements expire from September 2003 to June 2005. The
fair value of these agreements at June 30, 2001 was an asset of $70.2 million.

    Equity Price Risk

         The carrying value of our available-for-sale equity securities is
affected by changes in their quoted market prices. It is estimated that a 20%
change in the market prices of these securities would change their carrying
value at June 30, 2001 by $165.7 million and would change accumulated
comprehensive income by $102.7 million.

         In connection with the completion of the AMFM merger, Clear Channel and
AMFM entered into a Consent Decree with the Department of Justice regarding our
investment in Lamar Advertising Company. The Consent Decree, among other things,
required us to sell all of our shares of Lamar by December 31, 2002. In
accordance with APB 16, Business Combinations, our 26.2 million shares of Lamar
were recorded at their quoted market price on the closing date of the merger,
which was significantly higher than AMFM's historical purchase price. We will be
exposed to changes in Lamar's market price, which may result in large gains or
losses related to this disposition in future periods. At June 30, 2001, we held
10.4 million shares of Lamar Advertising common stock valued at $456.1 million.

                                      -19-

<PAGE>


    Foreign Currency

         We have operations in 63 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 currency fluctuations throughout
Europe and Asia, we have a natural hedge through borrowings in Euros, Sterling
and other currencies. This hedge position is reviewed monthly. We 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 loss of
$22.3 million for the six months ended June 30, 2001. It is estimated that a 10%
change in the value of the U.S. dollar to foreign currencies would change net
loss for the six months ended June 30, 2001 by $2.2 million.

Recent Accounting Pronouncements

         In June 2001, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 141, Business Combinations. Statement 141
addresses financial accounting and reporting for business combinations and
supersedes APB Opinion No. 16, Business Combinations, and FASB Statement 38,
Accounting for Preacquisitition Contingencies of Purchased Enterprises.
Statement 141 is effective for all business combinations initiated after June
30, 2001. Statement 141 eliminates the pooling-of-interest method of accounting
for business combinations except for qualifying business combinations that were
initiated prior to July 1, 2001. Statement 141 also changes the criteria to
recognize intangible assets apart from goodwill. We adopted this statement on
July 1, 2001. As we have historically used the purchase method to account for
all business combinations, management does not believe adoption of this
statement will materially impact the Company's financial position or results of
operations.

         In June 2001, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 142, Goodwill and Other Intangible Assets.
Statement 142 addresses financial accounting and reporting for acquired goodwill
and other intangible assets and supersedes APB Opinion No. 17, Intangible
Assets. Statement 142 is effective for fiscal years beginning after December 15,
2001. This statement establishes new accounting for goodwill and other
intangible assets recorded in business combinations. Under the new rules,
goodwill and intangible assets deemed to have indefinite lives will no longer be
amortized but will be subject to annual impairment tests in accordance with the
statement. Other intangible assets will continue to be amortized over their
useful lives. As our amortization of goodwill and certain other indefinite life
intangibles is a significant non-cash expense that we currently record,
Statement 142 will have a material impact on our financial statements. For the
three and six months ended June 30, 2001, amortization expense related to
goodwill and indefinite life intangibles was approximately $440.0 million and
$880.0 million, respectively. In addition, upon adoption, we will perform the
first of the required impairment tests of goodwill and indefinite life
intangibles and have not yet determined what the effect of these tests will be
on the Company's financial position or results of operations.
<TABLE>

Ratio
         The ratio of earnings to fixed charges is as follows:

           6 Months ended
              June 30,                                     Year Ended December 31,
        -----------------         --------------------------------------------------------------------------
        2001        2000          2000             1999              1998             1997              1996
        ----        ----          ----             ----              ----             ----              ----
<S>     <C>          <C>          <C>              <C>               <C>              <C>               <C>
        (.54)        1.25         2.20             2.04              1.83             2.32              3.63
</TABLE>

         The ratio of earnings to fixed charges was computed on a consolidated
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. For the six-month period
ended June 30, 2001, fixed charges exceeded earnings before income taxes and
fixed charges by $600.2 million.

                                      -20-
<PAGE>

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; and the
availability of capital resources; 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:

o        the impact of general economic conditions in the U.S. and in other
         countries in which we currently do business;
o        our ability to integrate the operations of recently acquired companies;
o        shifts in population and other demographics;
o        industry conditions, including competition;
o        fluctuations in operating costs;
o        technological changes and innovations;
o        changes in labor conditions;
o        fluctuations in exchange rates and currency values;
o        capital expenditure requirements;
o        legislative or regulatory requirements;
o        interest rates;
o        the effect of leverage on our financial position and earnings;
o        taxes;
o        access to capital markets; and
o        certain other factors set forth in our SEC filings.

         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

                                      -21-

<PAGE>


Part II -- OTHER INFORMATION

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

An annual meeting of  shareholders of the Company was held on April 26, 2001. L.
Lowry Mays, Karl Eller, Mark P. Mays, Randall T. Mays, Robert L. Crandall,  Alan
D. Feld,  Thomas O. Hicks,  Vernon E. Jordan,  Jr., Michael J. Levitt,  Perry J.
Lewis,  B. J. McCombs,  Theodore H. Strauss and John H. Williams were elected as
directors of the Company,  each to hold office until the next annual  meeting of
shareholders  or until his successor has been elected and qualified,  subject to
earlier  resignation  and removal.  The  shareholders  approved the selection of
Ernst & Young LLP as independent auditors for the year ending December 31, 2001.
The shareholders also approved the adoption of the Clear Channel Communications,
Inc. 2001 Stock Incentive Plan.

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

                                 Proposal No. 1
                             (Election of Directors)

        Nominee                     For                        Withheld
        -------                     ---                        --------

      L . Lowry Mays               474,159,868                48,756,042
          Karl Eller               500,910,431                22,005,479
        Mark P. Mays               499,227,972                23,687,938
     Randall T. Mays               494,142,216                28,773,694
  Robert L. Crandall               517,303,556                 5,612,354
        Alan D. Feld               505,192,058                17,723,852
     Thomas O. Hicks               516,897,928                 6,017,982
Vernon E. Jordan Jr.               504,786,260                18,129,650
   Michael J. Levitt               517,287,314                 5,628,596
      Perry J. Lewis               517,315,897                 5,600,013
        B.J. McCombs               505,580,236                17,335,674
 Theodore H. Strauss               516,948,266                 5,967,644
    John H. Williams               517,312,583                 5,603,327

                                 Proposal No. 2
 (Selection of Ernst & Young LLP as Independent Auditors for
                        the year ending December 31, 2001

          For                Withhold/Against          Exceptions/Abstain
          ---                ----------------          ------------------

      520,588,910                   841,785                 1,485,215


                                 Proposal No. 3
                     (Adoption of the Stock Incentive Plan)

          For                Withhold/Against          Exceptions/Abstain
          ---                ----------------          ------------------

      350,411,877               125,771,337                 2,727,851


                                      -22-

<PAGE>


Item 6.  Exhibits and Reports on Form 8-K

         (a)  Exhibits.  See Exhibit Index on Page 24
(b)      Reports on Form 8-K
                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.




August 14, 2001                              /s/  Herbert W. Hill, Jr.
                                             Herbert W. Hill, Jr.
                                             Senior Vice President and
                                             Chief Accounting Officer


                                      -23-
<PAGE>


                                INDEX TO EXHIBITS
Exhibit Number
                                   Description

2.1  Agreement  and Plan of Merger  dated as of  October 2,  1999,  among  Clear
     Channel,  CCU Merger Sub, Inc. and AMFM Inc.  (incorporated by reference to
     the exhibits of Clear Channel's Current Report on Form 8-K filed October 5,
     1999).

2.2  Agreement  and Plan of Merger dated as of February  28,  2000,  among Clear
     Channel, CCU II Merger Sub, Inc. and SFX Entertainment,  Inc. (incorporated
     by reference to the exhibits of Clear Channel's  Current Report on Form 8-K
     filed February 29, 2000).

3.1  Current Articles of Incorporation of the Company (incorporated by reference
     to the exhibits of the Company's  Registration  Statement on Form S-3 (Reg.
     No. 333-33371) dated September 9, 1997).

3.2  Second  Amended  and  Restated  Bylaws  of  the  Company  (incorporated  by
     reference to the exhibits of the Company's  Registration  Statement on Form
     S-3 (Reg. No. 333-33371) dated September 9, 1997).

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  Buy-Sell  Agreement by and between Clear Channel  Communications,  Inc., L.
     Lowry Mays, B. J. McCombs,  John M. Schaefer and John W. Barger,  dated May
     31, 1977  (incorporated  by  reference  to the  exhibits  of the  Company's
     Registration  Statement on Form S-1 (Reg.  No.  33-289161)  dated April 19,
     1984).

4.2  Senior  Indenture  dated  October 1, 1997,  by and  between  Clear  Channel
     Communications,  Inc. and The Bank of New York as Trustee  (incorporated by
     reference to exhibit 4.2 of the Company's Quarterly Report on Form 10-Q for
     the quarter ended September 30, 1997).

4.3  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).

4.4  Second Supplemental Indenture dated June 16, 1998 to Senior Indenture dated
     October 1, 1997, by and between Clear Channel Communications,  Inc. and the
     Bank of New York, as Trustee  (incorporated by reference to the exhibits to
     the Company's Current Report on Form 8-K dated August 27, 1998).

4.5  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).

4.6  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).

4.7  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).

                                      -24-

<PAGE>

4.8  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).

4.9  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).

4.10 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).

4.11 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).

11   Statement re: Computation of Earnings Per Share.

12   Statement re: Computation of Ratio of Earnings to Fixed Charges.

                                      -25-

<PAGE>

<TABLE>

EXHIBIT 11 - COMPUTATION OF EARNINGS PER SHARE

In thousands of dollars, except per share data

                                                                  Six months ended
                                                                      June 30,
                                                              ------------------------
                                                              2001                2000
                                                              ----                ----
Numerator:
<S>                                                          <C>                <C>
  Net loss                                                   $546,229)          $ (8,167)

  Effect of dilutive securities:
    Convertible debt - 2.625% issued in 1998                    4,679  *           4,905   *
    Convertible debt - 1.5% issued in 1999                      4,650  *           4,875   *
    LYONS - 1996 issue                                           (225) *            (241)  *
    LYONS - 1998 issue                                          2,270  *           2,271   *
    Less: Anti-dilutive items                                 (11,374)           (11,810)
                                                            ---------           --------

Numerator for net income (loss) per
  common share - diluted                                    $(546,229)          $ (8,167)
                                                            =========           ========

Denominator:
  Weighted average common shares                              588,027            338,871

  Effect of dilutive securities:
     Stock options and common stock warrants                   15,076  *          10,280   *
    Convertible debt - 2.625% issued in 1998                    9,282  *           9,282   *
    Convertible debt - 1.5% issued in 1999                      9,454  *           9,454   *
    LYONS - 1996 issue                                          3,487  *           3,872   *
    LYONS - 1998 issue                                          3,085  *           3,085   *
    Less: Anti-dilutive items                                 (40,384)           (35,973)
                                                            ---------           --------

Denominator for net income (loss)
  per common share - diluted                                  588,027            338,871
                                                            =========           ========

Net income (loss) per common share:
  Basic                                                     $    (.93)          $   (.02)
                                                            =========           ========

  Diluted                                                   $    (.93)          $   (.02)
                                                            =========           ========

* Denotes items that are anti-dilutive to the calculation of earnings per share.

</TABLE>

<PAGE>


EXHIBIT 12 - COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>

(In thousands, except ratio data)

                                               June 30,                              Year Ended
                                           -----------------       -----------------------------------------------------
                                           2001         2000         2000        1999        1998       1997       1996
                                           ----         ----         ----        ----        ----       ----       ----
Income (loss) before income
  taxes, equity in earnings of non-
  consolidated affiliates and
<S>                                        <C>          <C>         <C>         <C>         <C>        <C>         <C>
  extraordinary item                       (600,214)    40,702      688,384     220,213     117,922    104,077     71,240
Dividends and other received from
  nonconsolidated affiliates                  4,332        920        4,934       7,079       9,168      4,624     10,430
                                           --------    -------      -------     -------     -------    -------    -------

Total                                      (595,882)    41,622      693,318     227,292     127,090    108,701     81,670

Fixed Charges
Interest expense                            293,939    125,460      413,425     192,321     135,766     75,076     30,080
Amortization of loan fees                     7,538        156       12,401       1,970       2,220      1,451        506
Interest portion of rentals                  86,395     40,536      150,317      24,511      16,044      6,120        424
                                           --------    -------      -------     -------     -------    -------    -------

Total fixed charges                         387,872    166,152      576,143     218,802     154,030     82,647     31,010

Preferred stock dividends
Tax effect of preferred dividends                --         --           --          --          --         --         --
After tax preferred dividends                    --         --           --          --          --         --         --
                                           --------    -------      -------     -------     -------    -------    -------
Total fixed charges and
  preferred dividends                       387,872    166,152      576,143     218,802     154,030     82,647     31,010

Total earnings available for
 payment of fixed charges                  (208,010)   207,774    1,269,461     446,094     281,120    191,348    112,680
                                           ========    =======    =========     =======     =======    =======    =======
Ratio of earnings to fixed
  Charges                                      (.54)      1.25         2.20        2.04        1.83       2.32       3.63
                                           ========    =======    =========     =======     =======    =======    =======

Rental fees and charges                     246,843    202,678      429,476     306,393     200,550     76,500      5,299
Interest rate                                 35%        20%          35%          8%          8%          8%         8%
</TABLE>