##### Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.
20549

FORM 10-Q

(Mark One)

|x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2009
|- | -----------------------------------------------------------------------------------------------------------------------------------------



| ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM
 TO
|- | ---------------------------------------------------------------------------------------------------------------------------

Commission File Number

1-32663

CLEAR CHANNEL OUTDOOR HOLDINGS, INC.

(Exact name of registrant as specified in its charter)



|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Delaware                                                       |  | 86-0812139                          
|(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification No.)
|                                                               | 
|200 East Basse Road San Antonio, Texas                         |  | 78209                               
|(Address of principal executive offices)                       |  | (Zip Code)                          

(210) 832-3700

(Registrants telephone number, including area code)

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

Indicate by check mark whether the registrant has submitted electronically and posted on its
corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was
required to submit and post such files).    Yes   ̈    No   ̈

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.
See definition of large accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act.



|                        |  |   |  |                           |  |  
|----------------------- |  | - |  | ------------------------- |  | -
|Large accelerated filer |  | x |  | Accelerated filer         |  |  ̈
|Non-accelerated filer   |  |  ̈ |  | Smaller reporting company |  |  ̈

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the
Exchange Act).    Yes   ̈    No  x

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



|                                     |  |                                 |  |            |  |  |  |  |  | 
|------------------------------------ |  | ------------------------------- |  | ---------- |  |  |  |  |  | 
|Class                                |  | Outstanding at November 9, 2009
|Class A Common Stock, $.01 par value |  |                                 |  | 40,658,399 |  | 
|Class B Common Stock, $.01 par value |  | 315,000,000                    



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CLEAR CHANNEL OUTDOOR HOLDINGS, INC. AND SUBSIDIARIES

INDEX



|                                                                                                                                                                                                                                                                                       |  |         
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | --------
|                                                                                                                                                                                                                                                                                       |  | Page No.
|Part I  Financial Information                                                                                                                                                                                                                                                         |  |         
|                                                                                                                                                                                                                                                                                       | 
|Item 1. Unaudited Financial Statements                                                                                                                                                                                                                                                 |  |         
|                                                                                                                                                                                                                                                                                       | 
|Consolidated Balance Sheets at September 30, 2009 and December 31, 2008                                                                                                                                                                                                                |  | 3       
|                                                                                                                                                                                                                                                                                       | 
|Consolidated Statements of Operations for the three and nine months ended September 
30, 2009, the post-merger period from July 31 through September 30, 2008, the pre-merger period from July 1 through July 30, 2008, and the pre-merger period from January 1 through July 30, 2008 |  | 5       
|                                                                                                                                                                                                                                                                                       | 
|Condensed Consolidated Statements of Cash Flows for the nine months ended September 
30, 2009, the post-merger period from July 31 through September 30, 2008 and the pre-merger period from January 1 through July 30, 2008                                                           |  | 7       
|                                                                                                                                                                                                                                                                                       | 
|Notes to Consolidated Financial Statements                                                                                                                                                                                                                                             |  | 8       
|                                                                                                                                                                                                                                                                                       | 
|Item 2. Managements Discussion and Analysis of Financial Condition and Results of
Operations                                                                                                                                                                                          |  | 24      
|                                                                                                                                                                                                                                                                                       | 
|Item 3. Quantitative and Qualitative Disclosures About Market Risk                                                                                                                                                                                                                     |  | 46      
|                                                                                                                                                                                                                                                                                       | 
|Item 4. Controls and Procedures                                                                                                                                                                                                                                                        |  | 46      
|                                                                                                                                                                                                                                                                                       | 
|Part II  Other Information                                                                                                                                                                                                                                                            |  |         
|                                                                                                                                                                                                                                                                                       | 
|Item 1. Legal Proceedings                                                                                                                                                                                                                                                              |  | 47      
|                                                                                                                                                                                                                                                                                       | 
|Item 1A. Risk Factors                                                                                                                                                                                                                                                                  |  | 47      
|                                                                                                                                                                                                                                                                                       | 
|Item 2. Unregistered Sales of Equity Securities and Use of Proceeds                                                                                                                                                                                                                    |  | 47      
|                                                                                                                                                                                                                                                                                       | 
|Item 3. Defaults Upon Senior Securities                                                                                                                                                                                                                                                |  | 47      
|                                                                                                                                                                                                                                                                                       | 
|Item 4. Submission of Matters to a Vote of Security Holders                                                                                                                                                                                                                            |  | 47      
|                                                                                                                                                                                                                                                                                       | 
|Item 5. Other Information                                                                                                                                                                                                                                                              |  | 47      
|                                                                                                                                                                                                                                                                                       | 
|Item 6. Exhibits                                                                                                                                                                                                                                                                       |  | 48      
|                                                                                                                                                                                                                                                                                       | 
|Signatures                                                                                                                                                                                                                                                                             |  | 49      





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##### Table of Contents

PART I



|Item 1. | UNAUDITED FINANCIAL STATEMENTS
|------- | ------------------------------

CLEAR CHANNEL OUTDOOR HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

ASSETS

(In thousands)



|                                                                                                      |  |                              |           |                                |   |          
|----------------------------------------------------------------------------------------------------- |  | ---------------------------- | --------- | ------------------------------ | - | ---------
|                                                                                                      |  | September 30,2009(Unaudited) |           | December 31,2008(As adjusted)*
|CURRENT ASSETS                                                                                        |  |                              |           |                                |   |          
|Cash and cash equivalents                                                                             |  | $                            | 165,392   |                                | $ | 94,812   
|Accounts receivable, less allowance of $50,089 at September 30, 2009 and $48,600 at December 31, 2008 |  |                              | 737,668   |                                |   | 806,553  
|Due from Clear Channel Communications                                                                 |  |                              | 529,018   |                                |   | 431,641  
|Prepaid expenses                                                                                      |  |                              | 74,166    |                                |   | 69,817   
|Other current assets                                                                                  |  |                              | 179,413   |                                |   | 144,700  
|Income taxes receivable                                                                               |  |                              | 11,652    |                                |   | 7,129    
|                                                                                                      |  |                              |           |                                |   |          
|Total Current Assets                                                                                  |  |                              | 1,697,309 |                                |   | 1,554,652
|                                                                                                      |  |                             
|PROPERTY, PLANT AND EQUIPMENT                                                                         |  |                              |           |                                |   |          
|Land, buildings and improvements                                                                      |  |                              | 209,884   |                                |   | 201,210  
|Structures                                                                                            |  |                              | 2,498,666 |                                |   | 2,355,776
|Furniture and other equipment                                                                         |  |                              | 68,055    |                                |   | 60,476   
|Construction in progress                                                                              |  |                              | 58,649    |                                |   | 85,791   
|                                                                                                      |  |                              |           |                                |   |          
|                                                                                                      |  |                              | 2,835,254 |                                |   | 2,703,253
|Less accumulated depreciation                                                                         |  |                              | 336,955   |                                |   | 116,533  
|                                                                                                      |  |                              |           |                                |   |          
|                                                                                                      |  |                              | 2,498,299 |                                |   | 2,586,720
|                                                                                                      |  |                             
|INTANGIBLE ASSETS                                                                                     |  |                              |           |                                |   |          
|Definite-lived intangibles, net                                                                       |  |                              | 847,596   |                                |   | 1,000,485
|Indefinite-lived intangibles  permits                                                                |  |                              | 1,137,201 |                                |   | 1,529,068
|Goodwill                                                                                              |  |                              | 912,366   |                                |   | 1,180,141
|                                                                                                      |  |                             
|OTHER ASSETS                                                                                          |  |                              |           |                                |   |          
|Notes receivable                                                                                      |  |                              | 2,780     |                                |   | 3,140    
|Investments in, and advances to, nonconsolidated affiliates                                           |  |                              | 28,532    |                                |   | 51,812   
|Other assets                                                                                          |  |                              | 102,702   |                                |   | 122,231  
|Other investments                                                                                     |  |                              | 12,275    |                                |   | 22,512   
|                                                                                                      |  |                              |           |                                |   |          
|Total Assets                                                                                          |  | $                            | 7,239,060 |                                | $ | 8,050,761
|                                                                                                      |  |                              |           |                                |   |          



|* | As adjusted for the adoption of ASC 810-10-45, which requires minority interests to be recharacterized as noncontrolling interests and classified as a component of
equity within the consolidated balance sheets.
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

See Notes to Consolidated Financial Statements



-3-



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##### Table of Contents

CLEAR CHANNEL OUTDOOR HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

LIABILITIES AND SHAREHOLDERS EQUITY

(In thousands)



|                                                |  |                              |            |   |                                |   |            |  
|----------------------------------------------- |  | ---------------------------- | ---------- | - | ------------------------------ | - | ---------- | -
|                                                |  | September 30,2009(Unaudited) |            |   | December 31,2008(As adjusted)* |  
|CURRENT LIABILITIES                             |  |                              |            |   |                                |   |            |  
|Accounts payable                                |  | $                            | 85,138     |   |                                | $ | 118,290    |  
|Accrued expenses                                |  |                              | 481,434    |   |                                |   | 494,250    |  
|Accrued interest                                |  |                              | 414        |   |                                |   | 292        |  
|Deferred income                                 |  |                              | 134,734    |   |                                |   | 109,511    |  
|Current portion of long-term debt               |  |                              | 2,579,895  |   |                                |   | 69,522     |  
|                                                |  |                              |            |   |                                |   |            |  
|Total Current Liabilities                       |  |                              | 3,281,615  |   |                                |   | 791,865    |  
|                                                |  |                             
|Long-term debt                                  |  |                              | 31,336     |   |                                |   | 32,332     |  
|Debt with Clear Channel Communications          |  |                              |           |   |                                |   | 2,500,000  |  
|Other long-term liabilities                     |  |                              | 253,215    |   |                                |   | 178,875    |  
|Deferred tax liability                          |  |                              | 852,768    |   |                                |   | 1,003,866  |  
|                                                |  |                             
|Commitments and contingent liabilities (Note 4) |  |                              |            |   |                                |   |            |  
|                                                |  |                             
|SHAREHOLDERS EQUITY                            |  |                              |            |   |                                |   |            |  
|Noncontrolling interest                         |  |                              | 192,502    |   |                                |   | 211,813    |  
|Class A common stock                            |  |                              | 407        |   |                                |   | 407        |  
|Class B common stock                            |  |                              | 3,150      |   |                                |   | 3,150      |  
|Additional paid-in capital                      |  |                              | 6,674,160  |   |                                |   | 6,676,714  |  
|Retained deficit                                |  |                              | (3,829,991 | ) |                                |   | (3,018,637 | )
|Accumulated other comprehensive loss            |  |                              | (220,021   | ) |                                |   | (329,580   | )
|Cost of shares held in treasury                 |  |                              | (81        | ) |                                |   | (44        | )
|                                                |  |                              |            |   |                                |   |            |  
|Total Shareholders Equity                      |  |                              | 2,820,126  |   |                                |   | 3,543,823  |  
|                                                |  |                              |            |   |                                |   |            |  
|Total Liabilities and Shareholders Equity      |  | $                            | 7,239,060  |   |                                | $ | 8,050,761  |  
|                                                |  |                              |            |   |                                |   |            |  



|* | As adjusted for the adoption of ASC 810-10-45, which requires minority interests to be recharacterized as noncontrolling interests and classified as a component of
equity within the consolidated balance sheets.
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

See Notes to Consolidated Financial Statements



-4-



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##### Table of Contents

CLEAR CHANNEL OUTDOOR HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

(In thousands, except per share data)



|                                                                                      |  |                                    |         |   |                                             |   |          |                                        |  |   |         |  
|------------------------------------------------------------------------------------- |  | ---------------------------------- | ------- | - | ------------------------------------------- | - | -------- | -------------------------------------- |  | - | ------- | -
|                                                                                      |  | Three MonthsEndedSeptember 30,2009 |         |   | Period fromJuly 31 throughSeptember 30,2008 |   |          | Period fromJuly 1 throughJuly 30, 2008 | 
|                                                                                      |  | Post-Merger                        |         |   | Post-Merger(As
adjusted)*                   |   |          | Pre-Merger(As
adjusted)*               | 
|Revenue                                                                               |  | $                                  | 660,622 |   |                                             | $ | 541,699  |                                        |  | $ | 271,676 |  
|Operating expenses:                                                                   |  |                                    |         |   |                                             |   |          |                                        |  |   |         |  
|Direct operating expenses (excludes depreciation and amortization)                    |  |                                    | 398,766 |   |                                             |   | 304,763  |                                        |  |   | 158,354 |  
|Selling, general and administrative expenses (excludes depreciation and amortization) |  |                                    | 108,824 |   |                                             |   | 93,175   |                                        |  |   | 49,202  |  
|Depreciation and amortization                                                         |  |                                    | 111,053 |   |                                             |   | 81,015   |                                        |  |   | 37,783  |  
|Corporate expenses (excludes depreciation and amortization)                           |  |                                    | 15,547  |   |                                             |   | 11,231   |                                        |  |   | 5,311   |  
|Other operating income  net                                                          |  |                                    | 1,160   |   |                                             |   | 1,528    |                                        |  |   | 2,506   |  
|                                                                                      |  |                                    |         |   |                                             |   |          |                                        |  |   |         |  
|Operating income                                                                      |  |                                    | 27,592  |   |                                             |   | 53,043   |                                        |  |   | 23,532  |  
|Interest expense on debt with Clear Channel Communications                            |  |                                    | 36,558  |   |                                             |   | 29,440   |                                        |  |   | 14,508  |  
|Interest expense                                                                      |  |                                    | 1,350   |   |                                             |   | 966      |                                        |  |   | 504     |  
|Interest income on Due from Clear Channel Communications                              |  |                                    | 133     |   |                                             |   | 766      |                                        |  |   | 430     |  
|Loss on marketable securities                                                         |  |                                    | (11,315 | ) |                                             |   |         |                                        |  |   |        |  
|Equity in loss of nonconsolidated affiliates                                          |  |                                    | (2,046  | ) |                                             |   | (947     | )                                      |  |   | (8,867  | )
|Other income (expense)  net                                                          |  |                                    | 492     |   |                                             |   | (977     | )                                      |  |   | 3,067   |  
|                                                                                      |  |                                    |         |   |                                             |   |          |                                        |  |   |         |  
|Income (loss) before income taxes                                                     |  |                                    | (23,052 | ) |                                             |   | 21,479   |                                        |  |   | 3,150   |  
|Income tax benefit (expense):                                                         |  |                                    |         |   |                                             |   |          |                                        |  |   |         |  
|Current                                                                               |  |                                    | (13,025 | ) |                                             |   | (5,032   | )                                      |  |   | (4,808  | )
|Deferred                                                                              |  |                                    | 2,026   |   |                                             |   | (82      | )                                      |  |   | 1,119   |  
|                                                                                      |  |                                    |         |   |                                             |   |          |                                        |  |   |         |  
|Income tax expense                                                                    |  |                                    | (10,999 | ) |                                             |   | (5,114   | )                                      |  |   | (3,689  | )
|                                                                                      |  |                                    |         |   |                                             |   |          |                                        |  |   |         |  
|Consolidated net income (loss)                                                        |  |                                    | (34,051 | ) |                                             |   | 16,365   |                                        |  |   | (539    | )
|Amount attributable to noncontrolling interest                                        |  |                                    | 325     |   |                                             |   | 5,551    |                                        |  |   | 1,160   |  
|                                                                                      |  |                                    |         |   |                                             |   |          |                                        |  |   |         |  
|Net income (loss) attributable to the Company                                         |  | $                                  | (34,376 | ) |                                             | $ | 10,814   |                                        |  | $ | (1,699  | )
|Other comprehensive income (loss), net of tax:                                        |  |                                    |         |   |                                             |   |          |                                        |  |   |         |  
|Foreign currency translation adjustments                                              |  |                                    | 47,637  |   |                                             |   | (118,420 | )                                      |  |   | (10,306 | )
|Unrealized loss on marketable securities                                              |  |                                    | (2,165  | ) |                                             |   | (20,685  | )                                      |  |   | (2,404  | )
|Reclassification adjustment                                                           |  |                                    | 11,836  |   |                                             |   |         |                                        |  |   | (285    | )
|                                                                                      |  |                                    |         |   |                                             |   |          |                                        |  |   |         |  
|Comprehensive income (loss)                                                           |  |                                    | 22,932  |   |                                             |   | (128,291 | )                                      |  |   | (14,694 | )
|Amount attributable to noncontrolling interest                                        |  |                                    | 2,981   |   |                                             |   | (7,497   | )                                      |  |   | (999    | )
|                                                                                      |  |                                    |         |   |                                             |   |          |                                        |  |   |         |  
|Comprehensive income (loss) attributable to the Company                               |  | $                                  | 19,951  |   |                                             | $ | (120,794 | )                                      |  | $ | (13,695 | )
|                                                                                      |  |                                    |         |   |                                             |   |          |                                        |  |   |         |  
|Net income (loss) per common share attributable to the Company:                       |  |                                    |         |   |                                             |   |          |                                        |  |   |         |  
|Basic                                                                                 |  | $                                  | (.10    | ) |                                             | $ | .03      |                                        |  | $ | (.00    | )
|Weighted average common shares outstanding  Basic                                    |  |                                    | 355,389 |   |                                             |   | 355,294  |                                        |  |   | 355,294 |  
|Diluted                                                                               |  | $                                  | (.10    | ) |                                             | $ | .03      |                                        |  | $ | (.00    | )
|Weighted average common shares outstanding  Diluted                                  |  |                                    | 355,389 |   |                                             |   | 355,655  |                                        |  |   | 355,294 |  



|* | As adjusted for the adoption of ASC 810-10-45, which provides that net income or loss of an entity includes amounts attributable to the noncontrolling interest.
|- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------

See Notes to Consolidated Financial Statements



-5-



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##### Table of Contents

CLEAR CHANNEL OUTDOOR HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

(In thousands, except per share data)



|                                                                                      |  |                                   |           |   |                                            |   |          |                                          |  |   |           |  
|------------------------------------------------------------------------------------- |  | --------------------------------- | --------- | - | ------------------------------------------ | - | -------- | ---------------------------------------- |  | - | --------- | -
|                                                                                      |  | Nine MonthsEndedSeptember 30,2009 |           |   | Period fromJuly 31throughSeptember 30,2008 |   |          | Period fromJanuary 1throughJuly 30, 2008 | 
|                                                                                      |  | Post-Merger                       |           |   | Post-Merger(As adjusted)*                  |   |          | Pre-Merger(As adjusted)*                 | 
|Revenue                                                                               |  | $                                 | 1,934,955 |   |                                            | $ | 541,699  |                                          |  | $ | 1,962,063 |  
|Operating expenses:                                                                   |  |                                   |           |   |                                            |   |          |                                          |  |   |           |  
|Direct operating expenses (excludes depreciation and amortization)                    |  |                                   | 1,170,683 |   |                                            |   | 304,763  |                                          |  |   | 1,119,432 |  
|Selling, general and administrative expenses (excludes depreciation and amortization) |  |                                   | 347,930   |   |                                            |   | 93,175   |                                          |  |   | 344,846   |  
|Depreciation and amortization                                                         |  |                                   | 327,769   |   |                                            |   | 81,015   |                                          |  |   | 247,637   |  
|Corporate expenses (excludes depreciation and amortization)                           |  |                                   | 45,446    |   |                                            |   | 11,231   |                                          |  |   | 39,364    |  
|Impairment charge                                                                     |  |                                   | 812,390   |   |                                            |   |         |                                          |  |   |          |  
|Other operating income  net                                                          |  |                                   | 10,125    |   |                                            |   | 1,528    |                                          |  |   | 10,978    |  
|                                                                                      |  |                                   |           |   |                                            |   |          |                                          |  |   |           |  
|Operating income (loss)                                                               |  |                                   | (759,138  | ) |                                            |   | 53,043   |                                          |  |   | 221,762   |  
|Interest expense on debt with Clear Channel Communications                            |  |                                   | 110,368   |   |                                            |   | 29,440   |                                          |  |   | 87,464    |  
|Interest expense                                                                      |  |                                   | 4,624     |   |                                            |   | 966      |                                          |  |   | 3,913     |  
|Interest income on Due from Clear Channel Communications                              |  |                                   | 358       |   |                                            |   | 766      |                                          |  |   | 2,590     |  
|Loss on marketable securities                                                         |  |                                   | (11,315   | ) |                                            |   |         |                                          |  |   |          |  
|Equity in earnings (loss) of nonconsolidated affiliates                               |  |                                   | (26,094   | ) |                                            |   | (947     | )                                        |  |   | 70,842    |  
|Other income (expense)  net                                                          |  |                                   | (5,288    | ) |                                            |   | (977     | )                                        |  |   | 13,365    |  
|                                                                                      |  |                                   |           |   |                                            |   |          |                                          |  |   |           |  
|Income (loss) before income taxes                                                     |  |                                   | (916,469  | ) |                                            |   | 21,479   |                                          |  |   | 217,182   |  
|Income tax benefit (expense):                                                         |  |                                   |           |   |                                            |   |          |                                          |  |   |           |  
|Current                                                                               |  |                                   | (26,175   | ) |                                            |   | (5,032   | )                                        |  |   | (30,171   | )
|Deferred                                                                              |  |                                   | 127,877   |   |                                            |   | (82      | )                                        |  |   | (21,405   | )
|                                                                                      |  |                                   |           |   |                                            |   |          |                                          |  |   |           |  
|Income tax benefit (expense)                                                          |  |                                   | 101,702   |   |                                            |   | (5,114   | )                                        |  |   | (51,576   | )
|                                                                                      |  |                                   |           |   |                                            |   |          |                                          |  |   |           |  
|Consolidated net income (loss)                                                        |  |                                   | (814,767  | ) |                                            |   | 16,365   |                                          |  |   | 165,606   |  
|Amount attributable to noncontrolling interest                                        |  |                                   | (3,413    | ) |                                            |   | 5,551    |                                          |  |   | (1,948    | )
|                                                                                      |  |                                   |           |   |                                            |   |          |                                          |  |   |           |  
|Net income (loss) attributable to the Company                                         |  | $                                 | (811,354  | ) |                                            | $ | 10,814   |                                          |  | $ | 167,554   |  
|Other comprehensive income (loss), net of tax:                                        |  |                                   |           |   |                                            |   |          |                                          |  |   |           |  
|Foreign currency translation adjustments                                              |  |                                   | 116,553   |   |                                            |   | (118,420 | )                                        |  |   | 87,476    |  
|Unrealized loss on marketable securities                                              |  |                                   | (11,315   | ) |                                            |   | (20,685  | )                                        |  |   | (27,496   | )
|Reclassification adjustment                                                           |  |                                   | 11,323    |   |                                            |   |         |                                          |  |   | (285      | )
|                                                                                      |  |                                   |           |   |                                            |   |          |                                          |  |   |           |  
|Comprehensive income (loss)                                                           |  |                                   | (694,793  | ) |                                            |   | (128,291 | )                                        |  |   | 227,249   |  
|Amount attributable to noncontrolling interest                                        |  |                                   | 7,002     |   |                                            |   | (7,497   | )                                        |  |   | 14,019    |  
|                                                                                      |  |                                   |           |   |                                            |   |          |                                          |  |   |           |  
|Comprehensive income (loss) attributable to the Company                               |  | $                                 | (701,795  | ) |                                            | $ | (120,794 | )                                        |  | $ | 213,230   |  
|                                                                                      |  |                                   |           |   |                                            |   |          |                                          |  |   |           |  
|Net income (loss) per common share attributable to the Company:                       |  |                                   |           |   |                                            |   |          |                                          |  |   |           |  
|Basic                                                                                 |  | $                                 | (2.29     | ) |                                            | $ | .03      |                                          |  | $ | .47       |  
|Weighted average common shares outstanding  Basic                                    |  |                                   | 355,364   |   |                                            |   | 355,294  |                                          |  |   | 355,178   |  
|Diluted                                                                               |  | $                                 | (2.29     | ) |                                            | $ | .03      |                                          |  | $ | .47       |  
|Weighted average common shares outstanding  Diluted                                  |  |                                   | 355,364   |   |                                            |   | 355,655  |                                          |  |   | 355,741   |  



|* | As adjusted for the adoption of ASC 810-10-45, which provides that net income or loss of an entity includes amounts attributable to the noncontrolling interest.
|- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------

See Notes to Consolidated Financial Statements



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##### Table of Contents

CLEAR CHANNEL OUTDOOR HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

(In thousands)



|                                                                                             |  |                                   |          |   |                                            |   |         |                                          |  |   |          |  
|-------------------------------------------------------------------------------------------- |  | --------------------------------- | -------- | - | ------------------------------------------ | - | ------- | ---------------------------------------- |  | - | -------- | -
|                                                                                             |  | Nine MonthsEndedSeptember 30,2009 |          |   | Period fromJuly 31throughSeptember 30,2008 |   |         | Period fromJanuary 1throughJuly 30, 2008 | 
|                                                                                             |  | Post-Merger                       |          |   | Post-Merger(As adjusted)*                  |   |         | Pre-Merger(As adjusted)*                 | 
|Cash flows provided by (used in) operating activities:                                       |  |                                   |          |   |                                            |   |         |                                          |  |   |          |  
|Consolidated net income (loss)                                                               |  | $                                 | (814,767 | ) |                                            | $ | 16,365  |                                          |  | $ | 165,606  |  
|                                                                                             |  |                                   |         
|Reconciling items:                                                                           |  |                                   |          |   |                                            |   |         |                                          |  |   |          |  
|Impairment charge                                                                            |  |                                   | 812,390  |   |                                            |   |        |                                          |  |   |         |  
|Depreciation and amortization                                                                |  |                                   | 327,769  |   |                                            |   | 81,015  |                                          |  |   | 247,637  |  
|Deferred taxes                                                                               |  |                                   | (127,877 | ) |                                            |   | 82      |                                          |  |   | 21,405   |  
|Provision for doubtful accounts                                                              |  |                                   | 9,059    |   |                                            |   | 2,760   |                                          |  |   | 8,588    |  
|Gain on sale of operating and fixed assets                                                   |  |                                   | (10,125  | ) |                                            |   | (1,528  | )                                        |  |   | (10,978  | )
|Loss on marketable securities                                                                |  |                                   | 11,315   |   |                                            |   |        |                                          |  |   |         |  
|Equity in (earnings) loss of nonconsolidated affiliates                                      |  |                                   | 26,094   |   |                                            |   | 947     |                                          |  |   | (70,842  | )
|Other reconciling items, net                                                                 |  |                                   | 11,168   |   |                                            |   | 1,729   |                                          |  |   | 6,506    |  
|Changes in operating assets and liabilities, net of effects of acquisitions and dispositions |  |                                   | 24,856   |   |                                            |   | 14,797  |                                          |  |   | (36,600  | )
|                                                                                             |  |                                   |          |   |                                            |   |         |                                          |  |   |          |  
|Net cash provided by operating activities                                                    |  |                                   | 269,882  |   |                                            |   | 116,167 |                                          |  |   | 331,322  |  
|                                                                                             |  |                                   |         
|Cash flows provided by (used in) investing activities:                                       |  |                                   |          |   |                                            |   |         |                                          |  |   |          |  
|Change in notes receivable, net                                                              |  |                                   | 299      |   |                                            |   | 111     |                                          |  |   | 239      |  
|Change in investments in, and advances to nonconsolidated affiliates  net                   |  |                                   | (4,354   | ) |                                            |   | (3,552  | )                                        |  |   | 7,646    |  
|Purchases of property, plant and equipment                                                   |  |                                   | (113,976 | ) |                                            |   | (38,821 | )                                        |  |   | (199,122 | )
|Proceeds from disposal of assets                                                             |  |                                   | 10,656   |   |                                            |   | 1,397   |                                          |  |   | 38,630   |  
|Acquisition of operating assets, net of cash acquired                                        |  |                                   | (5,125   | ) |                                            |   | (19,972 | )                                        |  |   | (84,821  | )
|Change in other  net                                                                        |  |                                   | 19,396   |   |                                            |   | (14,489 | )                                        |  |   | 4,296    |  
|                                                                                             |  |                                   |          |   |                                            |   |         |                                          |  |   |          |  
|Net cash used in investing activities                                                        |  |                                   | (93,104  | ) |                                            |   | (75,326 | )                                        |  |   | (233,132 | )
|                                                                                             |  |                                   |         
|Cash flows provided by (used in) financing activities:                                       |  |                                   |          |   |                                            |   |         |                                          |  |   |          |  
|Draws on credit facilities                                                                   |  |                                   | 6,508    |   |                                            |   |        |                                          |  |   | 72,150   |  
|Payments on credit facilities                                                                |  |                                   | (3,784   | ) |                                            |   | (4,171  | )                                        |  |   | (157,774 | )
|Proceeds from long-term debt                                                                 |  |                                   |         |   |                                            |   | 456     |                                          |  |   | 5,476    |  
|Payments on long-term debt                                                                   |  |                                   | (2,191   | ) |                                            |   | (11,667 | )                                        |  |   | (4,662   | )
|Net transfers to Clear Channel Communications                                                |  |                                   | (86,309  | ) |                                            |   | (15,218 | )                                        |  |   | (83,585  | )
|Payments for purchase of noncontrolling interest                                             |  |                                   | (25,190  | ) |                                            |   |        |                                          |  |   |         |  
|Proceeds from exercise of stock options                                                      |  |                                   |         |   |                                            |   |        |                                          |  |   | 4,261    |  
|Other, net                                                                                   |  |                                   |         |   |                                            |   |        |                                          |  |   | (264     | )
|                                                                                             |  |                                   |          |   |                                            |   |         |                                          |  |   |          |  
|Net cash used in financing activities                                                        |  |                                   | (110,966 | ) |                                            |   | (30,600 | )                                        |  |   | (164,398 | )
|                                                                                             |  |                                   |         
|Effect of exchange rate changes on cash                                                      |  |                                   | 4,768    |   |                                            |   | (1,237  | )                                        |  |   | 4,436    |  
|                                                                                             |  |                                   |          |   |                                            |   |         |                                          |  |   |          |  
|Net increase (decrease) in cash and cash equivalents                                         |  |                                   | 70,580   |   |                                            |   | 9,004   |                                          |  |   | (61,772  | )
|                                                                                             |  |                                   |         
|Cash and cash equivalents at beginning of period                                             |  |                                   | 94,812   |   |                                            |   | 73,125  |                                          |  |   | 134,897  |  
|                                                                                             |  |                                   |          |   |                                            |   |         |                                          |  |   |          |  
|Cash and cash equivalents at end of period                                                   |  | $                                 | 165,392  |   |                                            | $ | 82,129  |                                          |  | $ | 73,125   |  
|                                                                                             |  |                                   |          |   |                                            |   |         |                                          |  |   |          |  



|* | As adjusted for the adoption of ASC 810-10-45, which provides that net income or loss of an entity includes amounts attributable to the noncontrolling interest.
|- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------

See Notes to Consolidated Financial Statements



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CLEAR CHANNEL OUTDOOR HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Note 1: BASIS OF PRESENTATION AND NEW ACCOUNTING STANDARDS

Preparation of Interim Financial Statements

The consolidated financial statements were prepared by Clear Channel Outdoor Holdings, 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. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (GAAP) have been condensed or omitted pursuant to such
SEC rules and regulations. Management believes that the disclosures made are adequate to make the information presented not misleading.

The
Company became a publicly traded company on November 11, 2005, through an initial public offering (IPO), in which it sold 10% of its common stock, or 35.0 million shares of Class A common stock. Prior to the IPO, the
Company was an indirect wholly-owned subsidiary of Clear Channel Communications. Clear Channel Communications currently owns all outstanding shares of the Companys Class B common stock, representing approximately 89% of the outstanding shares
of common stock and approximately 99% of the total voting power of common stock.

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 and combined financial statements and notes thereto included in the
Companys 2008 Annual Report on Form 10-K. The Company has evaluated subsequent events through November 9, 2009, the date that these financial statements were issued.

The consolidated financial statements include the accounts of the Company and its subsidiaries and give effect to allocations of expenses from Clear Channel Communications, Inc. (Clear Channel
Communications). These allocations were made on a specifically identifiable basis or using relative percentages of headcount or other methods management considered to be a reasonable reflection of the utilization of services provided.
Significant intercompany transactions have been eliminated in consolidation. 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.

Clear Channel Communications Merger

Clear Channel Communications consummated its merger with a wholly-owned subsidiary of CC Media Holdings, Inc. (CC Media Holdings)
on July 30, 2008 (the merger) and accounted for the merger as a purchase business combination in conformity with Statement of Financial Accounting Standards No. 141, Business Combinations, and Emerging Issues Task Force
Issue 88-16, Basis in Leveraged Buyout Transactions. ASC 805-50-S99-1 requires the application of push down accounting in situations where the ownership of an entity has changed. As a result, the post-merger financial statements of the
Company reflect the new basis of accounting. The purchase price allocation was complete as of July 30, 2009 in accordance with ASC 805-10-25, which requires that the allocation period not exceed one year from the date of acquisition.

The accompanying consolidated statements of operations and statements of cash flows are presented for two periods: post-merger and
pre-merger. Purchase accounting adjustments pursuant to the aforementioned standards were pushed down to the opening balance sheet of the Company on July 31, 2008, as the merger occurred at the close of business on July 30, 2008. The
merger resulted in a new basis of accounting beginning on July 31, 2008 and the financial reporting periods are presented as follows:



| |  |  | The three and nine month periods ended September 30, 2009 and the period from July 31 through September 30, 2008 reflect the post-merger
period of the Company, including the purchase accounting adjustments related to the merger that were pushed down to the Company.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The periods from January 1 through July 30, 2008 and July 1 through July 30, 2008 reflect the pre-merger period of the Company. The
consolidated financial statements for all pre-merger periods were prepared using the historical basis of accounting for the Company. As a result of the merger and the associated purchase accounting, the consolidated financial statements of the
post-merger periods are not comparable to periods preceding the merger.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The opening balance sheet reflected the preliminary
allocation of purchase price, based on available information and certain assumptions management believed were reasonable. During the first seven months of 2009, the Company decreased the initial fair value estimate of its permits, contracts, site
leases and other assets and liabilities primarily in its Americas segment by $100.7 million



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based on additional information received, which resulted in an increase to goodwill of $55.8 million and a decrease to deferred taxes of $44.9 million. During the third quarter of 2009, the
Company recorded a $45.0 million increase to goodwill in its International outdoor segment related to the fair value of certain minority interests recorded pursuant to ASC 480-10-S99, which distinguishes liabilities from equity, and which had no
related tax effect. In addition, during the third quarter of 2009, the Company adjusted deferred taxes by $24.5 million to true-up its tax rates in certain jurisdictions that were estimated in the initial purchase price allocation.

Relationship with Clear Channel Communications

There are several agreements which govern the Companys relationship with Clear Channel Communications, including the Corporate Services Agreement, Employee Matters Agreement and Tax Matters
Agreement. Clear Channel Communications has the right to terminate these agreements in various circumstances as long as such termination or amendment complies with restrictions contained in Clear Channel Communications credit agreements, where
applicable. As of the date of the filing of this report, no notice of termination of any of these agreements has been received from Clear Channel Communications. The terms and conditions of the Companys agreements with Clear Channel
Communications have not changed following the consummation of the merger of Clear Channel Communications. See Note 5 for further discussion.

Liquidity

The Companys primary source of liquidity is cash flow from operations,
which has been adversely affected by the global economic downturn. The risks associated with the Companys businesses become more acute in periods of a slowing economy or recession, which may be accompanied by a decrease in
advertising. Expenditures by advertisers tend to be cyclical, reflecting overall economic conditions and budgeting and buying patterns. The global economic downturn has resulted in a decline in advertising and marketing services among
customers, resulting in a decline in advertising revenues across the Companys businesses. This reduction in advertising revenues has had an adverse effect on revenue, profit margins, cash flow and liquidity. A continuation of the
global economic downturn would continue to adversely impact revenue, profit margins, cash flow and liquidity.

Another significant source of
the Companys liquidity is borrowings under the cash management notes with Clear Channel Communications. Clear Channel Communications ability to meet its obligations with respect to the Due from Clear Channel
Communications account and to lend under the cash management note depends on its working capital needs, debt service obligations and its future operating performance and cash flow, which are in turn subject to prevailing economic conditions
and other factors, many of which are beyond its control. The inability of Clear Channel Communications to meet its obligations with respect to the Due from Clear Channel Communications account could have a material adverse effect on
the Companys financial condition and on the Companys ability to meet its obligations. The cash management notes mature on August 10, 2010. After such date, Clear Channel Communications will continue to provide day-to-day cash
management services to the Company pursuant to the Corporate Services Agreement, whereby the Companys bank accounts are swept daily into accounts of Clear Channel Communications. The net balance as a result of these cash management services
will continue to be reflected as Due from/to Clear Channel Communications on the balance sheet.

The Companys $2.5 billion
note to Clear Channel Communications matures on August 2, 2010. On June 2, 2009, the Company announced that it is actively pursuing alternatives to address the maturity of the $2.5 billion note to Clear Channel Communications. The
alternatives to refinance the $2.5 billion note to Clear Channel Communications may include the use of its cash flow and capital resources, seeking an extension of the maturity of the note, selling assets, seeking additional equity capital, an
offering of new senior or senior subordinated notes for cash, an exchange of new senior or subordinated notes for outstanding indebtedness or other transactions.

Management believes that the Company will be successful in obtaining financing due to its long history of strong operating margins and free cash flow generation through its portfolio of diversified
products and geographically diverse markets. However, management also believes that new financing would likely carry higher interest rates and may contain more restrictive terms than its current agreements based on prevailing interest rates and
current debt capital market conditions. Higher interest rates would reduce the Companys capital available for investment and growth and terms may restrict, among other things, its ability to invest in its business. The $2.5 billion
note and Master Agreement with Clear Channel Communications include restrictive covenants that, among other things, restrict the Companys ability to incur additional indebtedness. Therefore, any refinancing of the $2.5 billion note must be
approved by the parent, Clear Channel Communications, and there is no such assurance that the Company would receive such approval. The Company is pursuing these alternatives which might be unsuccessful or inadequate in permitting it to meet
scheduled debt obligations. Additionally, in light of the current credit environment, the Company may be unable to restructure or refinance its obligations and obtain additional equity financing or sell assets on satisfactory terms or at
all. As a result, the Companys inability to meet its debt obligations could cause it to default on those obligations. A default under any debt instrument could, in turn, result in defaults under other debt instruments. Any such
defaults could materially impair its financial condition, liquidity and results of operations.



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In January 2009, CC Media Holdings announced that it commenced a restructuring program targeting a reduction
of fixed costs. The Company recognized approximately $6.6 million and $23.6 million of expenses related to the restructuring program during the three and nine months ended September 30, 2009, respectively.

The Company expects to be in compliance with the covenants governing its indebtedness in 2009. However, the Companys anticipated results are subject
to significant uncertainty and there can be no assurance that actual results will be in compliance with the covenants. In addition, the Companys ability to comply with the covenants governing its indebtedness may be affected by events beyond
the Companys control, including prevailing economic, financial and industry conditions.

Furthermore, in its Quarterly Report on Form
10-Q filed with the SEC on November 9, 2009, CC Media Holdings, the Companys indirect parent, stated that it expects to be in compliance with the covenants under Clear Channel Communications senior secured credit facilities in 2009.
CC Media Holdings similarly stated in such Quarterly Report that its anticipated results are also subject to significant uncertainty and there can be no assurance that actual results will be in compliance with the covenants. Moreover, CC Media
Holdings stated in such Quarterly Report that its ability to comply with the covenants in Clear Channel Communications financing agreements may be affected by events beyond CC Media Holdings control, including prevailing economic,
financial and industry conditions. As discussed therein, the breach of any covenants set forth in Clear Channel Communications financing agreements would result in a default thereunder, and an event of default would permit the lenders under a
defaulted financing agreement to declare all indebtedness thereunder to be due and payable prior to maturity. Moreover, as discussed therein, the lenders under the revolving credit facility under Clear Channel Communications senior secured
credit facilities would have the option to terminate their commitments to make further extensions of revolving credit thereunder. In addition, CC Media Holdings stated in such Quarterly Report that if CC Media Holdings is unable to repay Clear
Channel Communications obligations under any senior secured credit facilities or the receivables based credit facility, the lenders under such senior secured credit facilities or receivables based credit facility could proceed against any
assets that were pledged to secure such senior secured credit facilities or receivables based credit facility. Finally, CC Media Holdings stated in such Quarterly Report that a default or acceleration under any of Clear Channel Communications
financing agreements could cause a default under other obligations that are subject to cross-default and cross-acceleration provisions.

For
so long as Clear Channel Communications maintains significant control over the Company, a deterioration in the financial condition of Clear Channel Communications could have the effect of increasing the Companys borrowing costs or impairing
the Companys access to capital markets. Neither the $2.5 billion term note payable to Clear Channel Communications nor the Due from Clear Channel Communications note contain in their terms a right of offset. As of
September 30, 2009, Clear Channel Communications had $1.4 billion recorded as Cash and cash equivalents on its consolidated balance sheets. The $2.5 billion note and Master Agreement with Clear Channel Communications include
restrictive covenants that, among other things, restrict the Companys ability to incur additional indebtedness.

CC Media Holdings
and Clear Channel Communications corporate credit and issue-level ratings were downgraded on June 8, 2009 by Standard & Poors Ratings Services. CC Media Holdings and Clear Channel Communications corporate
credit ratings were lowered from B- to CCC, where they currently remain. The downgrade had no impact on CC Media Holdings and Clear Channel Communications borrowing costs under the credit agreements.

Impairment Charges

The
Company performed an interim impairment test on its indefinite-lived intangible assets as of June 30, 2009 as a result of the global economic downturn and its negative impact on the Companys business. The industry cash flow forecasts
during the first six months of 2009 were below the forecasts used in the discounted cash flow models used to calculate the impairments at December 31, 2008. The estimated fair value of the Companys permits was below their carrying value,
which resulted in a non-cash impairment charge of $345.4 million. See Note 2 for further discussion.

The Company also performed an interim
goodwill impairment test as of June 30, 2009. The revenue forecasts for 2009 declined 7% and 9% for the Americas outdoor segment and International outdoor segment, respectively, compared to the forecasts used in the 2008 impairment test
primarily as a result of the revenues realized during the first six months of 2009. As a result, the estimated fair value of the reporting units was below their carrying value, which required the Company to compare the implied fair value of each
reporting units goodwill with its carrying value. As a result, the Company recognized a non-cash impairment charge of $419.5 million to reduce goodwill. See Note 2 for further discussion.

Additionally, the Company impaired certain contracts in its Americas outdoor and International outdoor segments by $38.8 million. See Note 2 for further
discussion.



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##### Table of Contents

Share-Based Compensation Cost

Share-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as expense on a straight-line basis over
the vesting period. The following table details compensation costs related to share-based payments for the three and nine months ended September 30, 2009 and 2008:



|                                             |  |                                    |       |                                            |   |                                      |  |                                   |       |                                         |   |       |  |   |      
|-------------------------------------------- |  | ---------------------------------- | ----- | ------------------------------------------ | - | ------------------------------------ |  | --------------------------------- | ----- | --------------------------------------- | - | ----- |  | - | -----
|(In thousands)                               |  | Three MonthsEndedSeptember 30,2009 |       | Period fromJuly 31throughSeptember 30,2008 |   | Period fromJuly 1throughJuly 30,2008 |  | Nine MonthsEndedSeptember 30,2009 |       | Period fromJanuary 1throughJuly 30,2008
|                                             |  | Post-Merger                        |       | Post-Merger                                |   | Pre-Merger                           |  | Post-Merger                       |       | Pre-Merger                             
|Direct operating expenses                    |  | $                                  | 1,694 |                                            | $ | 1,394                                |  | $                                 | 1,062 |                                         | $ | 5,698 |  | $ | 5,019
|Selling, general and administrative expenses |  |                                    | 618   |                                            |   | 181                                  |  |                                   | 381   |                                         |   | 2,079 |  |   | 1,804
|Corporate expenses                           |  |                                    | 182   |                                            |   | 152                                  |  |                                   | 76    |                                         |   | 611   |  |   | 585  
|                                             |  |                                    |       |                                            |   |                                      |  |                                   |       |                                         |   |       |  |   |      
|Total share-based payments                   |  | $                                  | 2,494 |                                            | $ | 1,727                                |  | $                                 | 1,519 |                                         | $ | 8,388 |  | $ | 7,408
|                                             |  |                                    |       |                                            |   |                                      |  |                                   |       |                                         |   |       |  |   |      

As of September 30, 2009, there was $18.4 million of unrecognized compensation cost, net of
estimated forfeitures, related to unvested share-based compensation arrangements. This cost is expected to be recognized over a weighted average period of approximately two years.

New Accounting Pronouncements

In August 2009, the Financial Accounting Standards Board (FASB) issued Accounting Standards Codification (ASC) Update No. 2009-05, Measuring Liabilities at Fair Value. The update is to ASC Subtopic
820-10, Fair Value Measurements and Disclosures-Overall, for the fair value measurement of liabilities. The purpose of this update is to reduce ambiguity in financial reporting when measuring the fair value of liabilities. The guidance
provided in this update is effective for the first reporting period beginning after the date of issuance. The Company will adopt the amendment on October 1, 2009 and does not anticipate the adoption to have a material impact on its financial
position or results of operations.

Statement of Financial Accounting Standards No. 168, The FASB Accounting
Standards CodificationTMand the Hierarchy of Generally Accepted
Accounting Principles,codified in ASC 105-10, was issued in June 2009. ASC 105-10 identifies the sources of accounting principles and the framework for selecting the principles used in
the preparation of financial statements of nongovernmental entities that are presented in conformity with GAAP in the United States. ASC 105-10 establishes the ASC as the source of authoritative GAAP recognized by the FASB to be applied by
nongovernmental entities. Following this statement, the FASB will issue new standards in the form of Accounting Standards Updates (ASUs). ASC 105-10 is effective for financial statements issued for interim and annual periods ending after
September 15, 2009. The Company adopted the provisions of ASC 105-10 on July 1, 2009.

Statement of Financial Accounting
Standards No. 167, Amendments to FASB Interpretation No. 46(R)(Statement No. 167), which is not yet codified, was issued in June 2009. Statement No. 167 shall be effective as of the beginning of each reporting
entitys first annual reporting period that begins after November 15, 2009, for interim periods within that first annual reporting period, and for interim and annual reporting periods thereafter. Earlier application is prohibited.
Statement No. 167 amends Financial Accounting Standards Board Interpretation No. 46(R), Consolidation of Variable Interest Entities, codified in ASC 810-10-25, to replace the quantitative-based risks and rewards calculation for
determining which enterprise, if any, has a controlling financial interest in a variable interest entity with an approach focused on identifying which enterprise has the power to direct the activities of a variable interest entity that most
significantly impact the entitys economic performance and (1) the obligation to absorb losses of the entity or (2) the right to receive benefits from the entity. An approach that is expected to be primarily qualitative will be more
effective for identifying which enterprise has a controlling financial interest in a variable interest entity. Statement No. 167 requires an additional reconsideration event when determining whether an entity is a variable interest entity when
any changes in facts and circumstances occur such that the holders of the equity investment at risk, as a group, lose the power from voting rights or similar rights of those investments to direct the activities of the entity that most significantly
impact the entitys economic performance. It also requires ongoing assessments of whether an enterprise is the primary beneficiary of a variable interest entity. These requirements will provide more relevant and timely information to users of
financial statements. Statement No. 167 amends ASC 810-10-25 to require additional disclosures about an enterprises involvement in variable interest entities, which will enhance the information provided to users of financial statements.
The Company will adopt Statement No. 167 on January 1, 2010 and is currently evaluating the impact of adoption.

Statement of
Financial Accounting Standards No. 165, Subsequent Events,codified in ASC 855-10, was issued in May 2009. The provisions of ASC 855-10 are effective for interim and annual periods ending after June 15, 2009 and are intended to
establish general



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standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. ASC 855-10 requires the
disclosure of the date through which an entity has evaluated subsequent events and the basis for that datethat is, whether that date represents the date the financial statements were issued or were available to be issued. This disclosure
should alert all users of financial statements that an entity has not evaluated subsequent events after that date in the set of financial statements being presented. In accordance with the provisions of ASC 855-10, the Company currently evaluates
subsequent events through the date the financial statements are issued.

Financial Accounting Standards Board Staff Position Emerging Issues
Task Force 03-6-1, Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities, codified in ASC 260-10-45, was issued in June 2008. ASC 260-10-45 clarifies that unvested share-based payment awards
with a right to receive nonforfeitable dividends are participating securities. Guidance is also provided on how to allocate earnings to participating securities and compute basic earnings per share using the two-class method. All prior-period
earnings per share data presented shall be adjusted retrospectively (including interim financial statements, summaries of earnings, and selected financial data) to conform with the provisions of ASC 260-10-45. The Company retrospectively adopted the
provisions of ASC 260-10-45 on January 1, 2009. There was no impact of adopting ASC 260-10-45 to previously reported earnings per share for the periods July 31 through September 30, 2008, July 1 through July 30, 2008,
and January 1 through July 30, 2008.

Statement of Financial Accounting Standards No. 160, Noncontrolling Interests in
Consolidated Financial Statementsan amendment of ARB No. 51,codified in ASC 810-10-45, was issued in December 2007 and clarifies the classification of noncontrolling interests in consolidated statements of financial position and the
accounting for and reporting of transactions between the reporting entity and holders of such noncontrolling interests. Under this guidance, noncontrolling interests are considered equity and should be reported as an element of consolidated equity,
net income will encompass the total income of all consolidated subsidiaries and there will be separate disclosure on the face of the income statement of the attribution of that income between the controlling and noncontrolling interests, and
increases and decreases in the noncontrolling ownership interest amount will be accounted for as equity transactions. The provisions of ASC 810-10-45 are effective for the first annual reporting period beginning on or after December 15, 2008,
and earlier application is prohibited. Guidance is required to be adopted prospectively, except for reclassifying noncontrolling interests to equity, separate from the parents shareholders equity, in the consolidated statement of
financial position and recasting consolidated net income (loss) to include net income (loss) attributable to both the controlling and noncontrolling interests, both of which are required to be adopted retrospectively. The Company adopted the
provisions of ASC 810-10-45 on January 1, 2009, which resulted in a reclassification of approximately $211.8 million of noncontrolling interests to shareholders equity.

ASC 810-10-50-1A requires a reconciliation at the beginning and the end of the period of the carrying amount of total equity, equity attributable to the Company and equity attributable to the
noncontrolling interests. The following table presents the changes in equity attributable to the Company and equity attributable to the noncontrolling interests for the nine months ended September 30, 2009 and 2008.



|                                         |  |             |           |   |                         |   |         |              |  |   |           |  
|---------------------------------------- |  | ----------- | --------- | - | ----------------------- | - | ------- | ------------ |  | - | --------- | -
|(In thousands)                           |  | The Company |           |   | NoncontrollingInterests |   |         | Consolidated | 
|Balances at January 1, 2009              |  | $           | 3,332,010 |   |                         | $ | 211,813 |              |  | $ | 3,543,823 |  
|Net loss                                 |  |             | (811,354  | ) |                         |   | (3,413  | )            |  |   | (814,767  | )
|Foreign currency translation adjustments |  |             | 109,551   |   |                         |   | 7,002   |              |  |   | 116,553   |  
|Other - net                              |  |             | (2,583    | ) |                         |   | (22,900 | )            |  |   | (25,483   | )
|                                         |  |             |           |   |                         |   |         |              |  |   |           |  
|Balances at September 30, 2009           |  | $           | 2,627,624 |   |                         | $ | 192,502 |              |  | $ | 2,820,126 |  
|                                         |  |             |           |   |                         |   |         |              |  |   |           |  



|                                                 |  |             |           |   |                         |   |         |              |  |   |           |  
|------------------------------------------------ |  | ----------- | --------- | - | ----------------------- | - | ------- | ------------ |  | - | --------- | -
|(In thousands)                                   |  | The Company |           |   | NoncontrollingInterests |   |         | Consolidated | 
|Balances at January 1, 2008                      |  | $           | 1,982,730 |   |                         | $ | 215,864 |              |  | $ | 2,198,594 |  
|Net income                                       |  |             | 178,368   |   |                         |   | 3,603   |              |  |   | 181,971   |  
|Purchase price adjustment                        |  |             | 4,504,255 |   |                         |   |        |              |  |   | 4,504,255 |  
|Foreign currency translation adjustments         |  |             | (37,465   | ) |                         |   | 6,521   |              |  |   | (30,944   | )
|Unrealized holding loss on marketable securities |  |             | (48,181   | ) |                         |   |        |              |  |   | (48,181   | )
|Other - net                                      |  |             | 11,945    |   |                         |   | (8,387  | )            |  |   | 3,558     |  
|                                                 |  |             |           |   |                         |   |         |              |  |   |           |  
|Balances at September 30, 2008                   |  | $           | 6,591,652 |   |                         | $ | 217,601 |              |  | $ | 6,809,253 |  
|                                                 |  |             |           |   |                         |   |         |              |  |   |           |  



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Financial Accounting Standards Board Staff Position No. FAS 157-4, Determining Fair Value When the Volume
and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly, codified in ASC 820-10-35, was issued in April 2009. ASC 820-10-35 provides additional guidance for estimating fair
value when the volume and level of activity for the asset or liability have significantly decreased. ASC 820-10-35 also includes guidance on identifying circumstances that indicate a transaction is not orderly. This guidance is effective for interim
and annual reporting periods ending after June 15, 2009, and shall be applied prospectively. Early adoption is permitted for periods ending after March 15, 2009. Earlier adoption for periods ending before March 15, 2009 is not
permitted. The Company adopted the provisions of ASC 820-10-35 on April 1, 2009 with no material impact to its financial position or results of operations.

Financial Accounting Standards Board Staff Position No. FAS 115-2 and FAS 124-2, Recognition and Presentation of Other-Than-Temporary Impairments,codified in ASC 320-10, was
issued in April 2009. ASC 320-10 amends the other-than-temporary impairment guidance in U.S. GAAP for debt securities to make the guidance more operational and to improve the presentation and disclosure of other-than-temporary impairments on debt
and equity securities in the financial statements. ASC 320-10 does not amend existing recognition and measurement guidance related to other-than-temporary impairments of equity securities. This guidance is effective for interim and annual reporting
periods ending after June 15, 2009, with early adoption permitted for periods ending after March 15, 2009. Earlier adoption for periods ending before March 15, 2009 is not permitted. The Company adopted the provisions of ASC 320-10 on
April 1, 2009 with no material impact to its financial position or results of operations.

Financial Accounting Standards Board
Staff Position No. FAS 141(R)-1, Accounting for Assets Acquired and Liabilities Assumed in a Business Combination That Arise from Contingencies, codified in ASC 805-20, was issued in April 2009. ASC 805-20 addresses application issues raised
by preparers, auditors, and members of the legal profession on initial recognition and measurement, subsequent measurement and accounting, and disclosure of assets and liabilities arising from contingencies in a business combination. This guidance
is effective for assets or liabilities arising from contingencies in business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. The impact of
ASC 805-20 on accounting for contingencies in a business combination is dependent upon the nature of future acquisitions.

Financial
Accounting Standards Board Staff Position No. FAS 107-1 and APB 28-1, Interim Disclosures about Fair Value of Financial Instruments,codified in ASC 825-10, was issued in April 2009. ASC 825-10 amends prior authoritative guidance to require
disclosures about fair value of financial instruments for interim reporting periods of publicly traded companies as well as in annual financial statements. The provisions of ASC 825-10 are effective for interim reporting periods ending after
June 15, 2009, with early adoption permitted for periods ending after March 15, 2009. The Company adopted the disclosure requirements of ASC 825-10 on April 1, 2009.

Financial Accounting Standards Board Staff Position Emerging Issues Task Force 08-6, Equity Method Investment Accounting Considerations, codified in ASC 323-10-35, was issued in November 2008. ASC
323-10-35 clarifies the accounting for certain transactions and impairment considerations involving equity method investments. This guidance is effective for fiscal years beginning on or after December 15, 2008, and interim periods within those
fiscal years and shall be applied prospectively. The Company adopted the provisions of ASC 323-10-35 on January 1, 2009 with no material impact to its financial position or results of operations.

Note 2: INTANGIBLE ASSETS AND GOODWILL

Definite-lived Intangibles

The Company has definite-lived intangible assets which consist primarily of transit and street
furniture contracts and other contractual rights. The Company also has permanent easements that provide the Company the right to operate and access certain of its outdoor displays at specified locations. Definite-lived intangible assets are
amortized over the shorter of either the respective lives of the agreements or over the period of time the assets are expected to contribute directly or indirectly to the Companys future cash flows.

The following table presents the gross carrying amount and accumulated amortization for each major class of definite-lived intangible assets at
September 30, 2009 and December 31, 2008:



|                                                        |  |                     |           |                         |   |                     |  |                         |           |  |   |       
|------------------------------------------------------- |  | ------------------- | --------- | ----------------------- | - | ------------------- |  | ----------------------- | --------- |  | - | ------
|(In thousands)                                          |  | September 30, 2009  |           | December 31, 2008      
|                                                        |  | GrossCarryingAmount |           | AccumulatedAmortization |   | GrossCarryingAmount |  | AccumulatedAmortization
|Transit, street furniture, and other contractual rights |  | $                   | 831,545   |                         | $ | 147,414             |  | $                       | 883,130   |  | $ | 49,818
|Other                                                   |  |                     | 171,226   |                         |   | 7,761               |  |                         | 169,007   |  |   | 1,834 
|                                                        |  |                     |           |                         |   |                     |  |                         |           |  |   |       
|Total                                                   |  | $                   | 1,002,771 |                         | $ | 155,175             |  | $                       | 1,052,137 |  | $ | 51,652
|                                                        |  |                     |           |                         |   |                     |  |                         |           |  |   |       



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Total amortization expense from continuing operations related to definite-lived intangible assets for the
nine months ended September 30, 2009 was $75.0 million.

During the first seven months of 2009, the Company decreased the initial fair
value estimate of its permits, contracts, site leases and other assets and liabilities in its Americas segment by $100.7 million based on additional information received, which resulted in a credit to amortization expense of approximately $6.9
million.

The Company reviews its definite-lived intangibles for impairment when events and circumstances indicate that amortizable long-lived
assets might be impaired and the undiscounted cash flows estimated to be generated from those assets are less than the carrying amount of those assets. When specific assets are determined to be unrecoverable, the cost basis of the asset is reduced
to reflect the current fair market value.

The Company uses various assumptions in determining the current fair market value of these assets,
including future expected cash flows, industry growth rates and discount rates. Impairment loss calculations require management to apply judgment in estimating future cash flows, including forecasting useful lives of the assets and selecting the
discount rate that reflects the risk inherent in future cash flows.

During the second quarter of 2009, the Company recorded a $21.3 million
impairment to taxi contracts in its Americas segment and a $17.5 million impairment primarily related to street furniture and billboard contracts in its International segment. The Company determined fair values using a discounted cash flow model.
The decline in fair value of the contracts was primarily driven by a decline in the revenue projections. The decline in revenue related to taxi contracts and street furniture and billboard contracts was in the range of 10% to 15%. The balance of
these taxi contracts and street furniture and billboard contracts after the impairment charges, for the contracts that were impaired, was $3.3 million and $16.0 million, respectively.

The following table presents the Companys estimate of amortization expense for each of the five succeeding fiscal years for definite-lived intangible assets:





|               |  |   |       
|-------------- |  | - | ------
|(In thousands) |  |  
|2010           |  | $ | 94,254
|2011           |  |   | 92,616
|2012           |  |   | 82,636
|2013           |  |   | 78,945
|2014           |  |   | 68,752

As acquisitions and dispositions occur in the future, amortization expense may vary.

Indefinite-lived Intangibles

The Companys indefinite-lived intangibles consist of billboard permits. The Companys billboard permits are effectively issued in perpetuity by state and local governments as they are transferable or renewable at little or no
cost. Permits typically specify the locations at which the Company is allowed to operate an advertising structure. The Companys permits are located on owned land, leased land or land for which we have acquired permanent easements. In cases
where the Companys permits are located on leased land, the leases typically have initial terms of between 10 to 20 years and renew indefinitely, with rental payments generally escalating at an inflation-based index. If the Company loses its
lease, the Company will typically obtain permission to relocate the permit or bank it with the municipality for future use.

The Company does
not amortize its billboard permits. The Company tests these indefinite-lived intangible assets for impairment at least annually using a direct valuation method. This direct valuation method assumes that rather than acquiring indefinite-lived
intangible assets as a part of a going concern business, the buyer hypothetically develops indefinite-lived intangible assets and builds a new operation with similar attributes from scratch. Thus, the buyer incurs start-up costs during the build-up
phase which are normally associated with going concern value. Initial capital costs are deducted from the discounted cash flows model which results in value that is directly attributable to the indefinite-lived intangible assets.

The Company performed an interim impairment test on its billboard permits as of December 31, 2008, which resulted in a non-cash impairment charge of
$722.6 million. The Companys cash flows during the first six months of 2009 were below those in the discounted cash flow model used to calculate the impairment at December 31, 2008. As a result, the Company performed an interim impairment
test as of June 30, 2009 on its billboard permits resulting in a non-cash impairment charge of $345.4 million.



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The fair value of the permits was determined using the direct valuation method as prescribed in ASC
805-20-S99. Under the direct valuation method, the fair value of the permits was calculated at the market level as prescribed by ASC 350-30-35. The Company engaged Mesirow Financial Consulting, LLC (Mesirow Financial), a
third-party valuation firm, to assist it in the development of the assumptions and the Companys determination of the fair value of its permits. The impairment test consisted of a comparison of the fair value of the permits at the market level
with their carrying amount. If the carrying amount of the permits exceeded their fair value, an impairment loss was recognized equal to that excess. After an impairment loss is recognized, the adjusted carrying amount of the permit is its new
accounting basis.

The application of the direct valuation method attempts to isolate the income that is properly attributable to the permit
alone (that is, apart from tangible and identified intangible assets and goodwill). It is based upon modeling a hypothetical greenfield build up to a normalized enterprise that, by design, lacks inherent goodwill and whose
only other assets have essentially been paid for (or added) as part of the build-up process. The Company forecasted revenue, expenses, and cash flows over a ten-year period for each of its markets in its application of the direct valuation method.
The Company also calculated a normalized residual year which represents the perpetual cash flows of each market. The residual year cash flow was capitalized to arrive at the terminal value of the permits in each market.

Management uses its internal forecasts to estimate industry normalized information as it believes these forecasts are similar to what a market participant
would expect to generate. This is due to the pricing structure and demand for outdoor signage in a market being relatively constant regardless of the owner of the operation. Management also relied on its internal forecasts because there is nominal
public data available for each of its markets.

The build-up period represents the time it takes for the hypothetical start-up operation to
reach normalized operations in terms of achieving a mature market revenue share and profit margin. Management believes that a one-year build-up period is required for a start-up operation to erect the necessary structures and obtain advertisers in
order achieve mature market revenue share. It is estimated that a start-up operation would be able to obtain 10% of the potential revenues in the first year of operations and 100% in the second year. Management assumed industry revenue growth of
negative 16% during the build-up period. However, the cost structure is expected to reach the normalized level over three years due to the time required to recognize the synergies and cost savings associated with the ownership of the permits within
the market.

For the normalized operating margin in the third year, management assumed a hypothetical business would operate at the lower of
the operating margin for the specific market or the industry average margin of 45% based on an analysis of comparable companies. For the first and second year of operations, the operating margin was assumed to be 50% of the normalized
operating margin. The first and second-year expenses include the non-recurring start-up costs necessary to build the operation (i.e. development of customers, workforce, etc.).

In addition to cash flows during the projection period, a normalized residual cash flow was calculated based upon industry-average growth of 3% beyond the discrete build-up projection period.
The residual cash flow was then capitalized to arrive at the terminal value.

The present value of the cash flows is calculated using an
estimated required rate of return based upon industry-average market conditions. In determining the estimated required rate of return, management calculated a discount rate using both current and historical trends in the industry.

The Company calculated the discount rate as of the valuation date and also one-year, two-year, and three-year historical quarterly averages. The discount
rate was calculated by weighting the required returns on interest-bearing debt and common equity capital in proportion to their estimated percentages in an expected capital structure. The capital structure was estimated based on the quarterly
average data for publicly traded companies in the outdoor advertising industry.

The calculation of the discount rate required the rate of
return on debt, which was based on a review of the credit ratings for comparable companies (i.e., market participants). Management used the yield on a Standard & Poors B rated corporate bond for the pre-tax rate of return
on debt and tax-effected such yield based on applicable tax rates.

The rate of return on equity capital was estimated using a modified
Capital Asset Pricing Model (CAPM). Inputs to this model included the yield on long-term U.S. Treasury bonds, forecast betas for comparable companies, calculation of a market risk premium based on research and empirical evidence and
calculation of a size premium derived from historical differences in returns between small companies and large companies using data published by Ibbotson Associates.

The concluded discount rate used in the discounted cash flow models to determine the fair value of the permits was 10%. Applying the discount rate, the present value of cash flows during the discrete
projection period and terminal value were added to estimate the



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fair value of the hypothetical start-up operation. The initial capital investment was subtracted to arrive at the value of the permits. The initial capital investment represents the fixed assets
needed to erect the necessary advertising structures.

The discount rate used in the impairment model increased approximately 50 basis points
over the discount rate used to value the permits at December 31, 2008. Industry revenue forecasts declined 8% through 2013 compared to the forecasts used in the 2008 impairment test. These market driven changes were primarily responsible for
the decline in fair value of the billboard permits below their carrying value. As a result, the Company recognized a non-cash impairment charge in all but five of its markets in the United States and Canada, which totaled $345.4 million. The fair
value of the permits was $1.1 billion at June 30, 2009.

Goodwill

The following table presents the changes in the carrying amount of goodwill in each of the Companys reportable segments:



|                                                                      |  |          |            |   |               |   |          |       |  |   |            |  
|--------------------------------------------------------------------- |  | -------- | ---------- | - | ------------- | - | -------- | ----- |  | - | ---------- | -
|(In thousands)                                                        |  | Americas |            |   | International |   |          | Total | 
|Pre-merger                                                            |  |          |            |   |               |   |          |       |  |   |            |  
|Balance as of December 31, 2007                                       |  | $        | 688,336    |   |               | $ | 474,253  |       |  | $ | 1,162,589  |  
|Acquisitions                                                          |  |          |           |   |               |   | 12,341   |       |  |   | 12,341     |  
|Foreign currency translation                                          |  |          | (293       | ) |               |   | 28,596   |       |  |   | 28,303     |  
|Adjustments                                                           |  |          | (970       | ) |               |   |         |       |  |   | (970       | )
|                                                                      |  |          |            |   |               |   |          |       |  |   |            |  
|Balance as of July 30, 2008                                           |  |          | 687,073    |   |               |   | 515,190  |       |  |   | 1,202,263  |  
|Post-merger                                                           |  |          |            |   |               |   |          |       |  |   |            |  
|Preliminary fair value adjustment resulting from push-down accounting |  |          | 2,118,707  |   |               |   | 88,522   |       |  |   | 2,207,229  |  
|Net adjustments to push-down accounting                               |  |          | 438,025    |   |               |   | (76,116  | )     |  |   | 361,909    |  
|Dispositions                                                          |  |          |           |   |               |   | (542     | )     |  |   | (542       | )
|Foreign currency translation                                          |  |          | (29,605    | ) |               |   | (63,519  | )     |  |   | (93,124    | )
|Impairment                                                            |  |          | (2,321,602 | ) |               |   | (173,435 | )     |  |   | (2,495,037 | )
|Adjustments                                                           |  |          |           |   |               |   | (2,557   | )     |  |   | (2,557     | )
|                                                                      |  |          |            |   |               |   |          |       |  |   |            |  
|Balance as of December 31, 2008                                       |  |          | 892,598    |   |               |   | 287,543  |       |  |   | 1,180,141  |  
|Acquisitions                                                          |  |          | 2,250      |   |               |   | 110      |       |  |   | 2,360      |  
|Foreign currency translation                                          |  |          | 16,073     |   |               |   | 20,117   |       |  |   | 36,190     |  
|Impairment                                                            |  |          | (389,828   | ) |               |   | (29,722  | )     |  |   | (419,550   | )
|Net adjustments to push-down accounting                               |  |          | 68,896     |   |               |   | 45,041   |       |  |   | 113,937    |  
|Adjustments                                                           |  |          | (712       | ) |               |   |         |       |  |   | (712       | )
|                                                                      |  |          |            |   |               |   |          |       |  |   |            |  
|Balance as of September 30, 2009                                      |  | $        | 589,277    |   |               | $ | 323,089  |       |  | $ | 912,366    |  
|                                                                      |  |          |            |   |               |   |          |       |  |   |            |  

The Company performed an interim impairment test as of December 31, 2008 which resulted in a
non-cash impairment charge of $2.5 billion to reduce its goodwill. The goodwill impairment test is a two-step process. The first step, used to screen for potential impairment, compares the fair value of the reporting unit with its carrying amount,
including goodwill. The second step, used to measure the amount of the impairment loss, compares the implied fair value of the reporting unit goodwill with the carrying amount of that goodwill.

Each of the Companys U.S. outdoor advertising markets is a component. The U.S. outdoor advertising markets are aggregated into a single reporting unit
for purposes of the goodwill impairment test using the guidance in ASC 350-20-55. The Company also determined that in its Americas segment, Canada, Mexico, Peru, and Brazil constitute separate reporting units and each country in its International
segment constitutes a separate reporting unit.

The Companys reporting units are valued using a discounted cash flow model which
requires estimating future cash flows expected to be generated from the reporting unit, discounted to their present value using a risk-adjusted discount rate. Terminal values were also estimated and discounted to their present value. Assessing the
recoverability of goodwill requires the Company to make estimates and assumptions about sales, operating margins, growth rates and discount rates based on its budgets, business plans, economic projections, anticipated future cash flows and
marketplace data. There are inherent uncertainties related to these factors and managements judgment in applying these factors. The Company engaged Mesirow Financial, a third-party valuation firm, to assist the Company in the development of
these assumptions and the Companys determination of the fair value of its reporting units.

The Company tests goodwill at interim dates
if events or changes in circumstances indicate that goodwill might be impaired. The Companys cash flows during the first six months of 2009 were below those used in the discounted cash flow model used to calculate the impairment at
December 31, 2008. Additionally, the fair value of the Companys debt and equity at June 30, 2009 declined from



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the values at December 31, 2008. As a result of these indicators, the Company performed an interim goodwill impairment test as of June 30, 2009, which resulted in a non-cash impairment
charge of $419.5 million.

The discounted cash flow model indicated that the Company failed the first step of the impairment test for certain
of its reporting units, which required it to compare the implied fair value of each reporting units goodwill with its carrying value.

The discounted cash flow approach the Company uses for valuing goodwill involves estimating future cash flows expected to be generated from the related assets, discounted to their present value using a risk-adjusted discount rate. Terminal
values are also estimated and discounted to their present value.

The Company forecasted revenue, expenses, and cash flows over a ten-year
period for each of its reporting units. In projecting future cash flows, the Company considers a variety of factors including its historical growth rates, macroeconomic conditions, advertising sector and industry trends as well as Company-specific
information. Historically, revenues in its industries have been highly correlated to economic cycles. Based on these considerations, the assumed 2009 revenue growth rates were negative followed by assumed revenue growth with an anticipated economic
recovery in 2010. To arrive at the projected cash flows and resulting growth rates, the Company evaluated its historical operating results, current management initiatives and both historical and anticipated industry results to assess the
reasonableness of the operating margin assumptions. The Company also calculated a normalized residual year which represents the perpetual cash flows of each reporting unit. The residual year cash flow was capitalized to arrive at the
terminal value of the reporting unit.

The Company calculated the weighted average cost of capital (WACC) as of June 30, 2009
and also one-year, two-year, and three-year historical quarterly averages for each of its reporting units. WACC is an overall rate based upon the individual rates of return for invested capital (equity and interest-bearing debt). The WACC is
calculated by weighting the required returns on interest-bearing debt and common equity capital in proportion to their estimated percentages in an expected capital structure. The capital structure was estimated based on the quarterly average data
for publicly traded companies in the outdoor advertising industry. The calculation of the WACCs considered both current industry WACCs and historical trends in the industry.

The calculation of the WACC requires the rate of return on debt, which was based on a review of the credit ratings for comparable companies (i.e. market participants) and the indicated yield on similarly
rated bonds.

The rate of return on equity capital was estimated using a modified CAPM. Inputs to this model included the yield on long-term
U.S. Treasury bonds, forecast betas for comparable companies, calculation of a market risk premium based on research and empirical evidence and calculation of a size premium derived from historical differences in returns between small companies and
large companies using data published by Ibbotson Associates.

In line with advertising industry trends, the Companys operations and
expected cash flow are subject to significant uncertainties about future developments, including timing and severity of the recessionary trends and customers behaviors. To address these risks, the Company included company-specific risk
premiums for each of the reporting units in the estimated WACC. Based on this analysis, company-specific risk premiums of 250 basis points and 350 basis points were included for Americas and International, respectively, resulting in WACCs of 12.5%
and 13.5% for each of the reporting units in the Americas and International segments, respectively. Applying these WACCs, the present value of cash flows during the discrete projection period and terminal value were added to estimate the fair value
of the reporting units.

The discount rate utilized in the valuation of the permits as of June 30, 2009 excludes the company-specific
risk premiums that were added to the industry WACCs used in the valuation of the reporting units. Management believes the exclusion of this premium is appropriate given the difference between the nature of the billboard permits and reporting
unit cash flow projections. The cash flow projections utilized under the direct valuation method for the permits are derived from utilizing industry normalized information for the existing portfolio of permits. Given that the
underlying cash flow projections are based on industry normalized information, application of an industry average discount rate is appropriate. Conversely, the cash flow projections for the overall reporting unit are based on its internal
forecasts for each business and incorporate future growth and initiatives unrelated to the existing permit portfolio. Additionally, the projections for the reporting unit include cash flows related to non-permit based assets. In the
valuation of the reporting unit, the company-specific risk premiums were added to the industry WACCs due to the risks inherent in achieving the projected cash flows of the reporting unit.

The Company also utilized the market approach to provide a test of reasonableness to the results of the discounted cash flow model. The market approach
indicates the fair value of the invested capital of a business based on a companys market capitalization (if publicly traded) and a comparison of the business to comparable publicly traded companies and transactions in its industry. This
approach can be estimated through the quoted market price method, the market comparable method, and the market transaction method.



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One indication of the fair value of a business is the quoted market price in active markets for the debt and
equity of the business. The quoted market price of equity multiplied by the number of shares outstanding yields the fair value of the equity of a business on a marketable, noncontrolling basis. A premium for control is then applied and added to the
estimated fair value of interest-bearing debt to indicate the fair value of the invested capital of the business on a marketable, controlling basis.

The market comparable method provides an indication of the fair value of the invested capital of a business by comparing it to publicly traded companies in similar lines of business. The conditions and prospects of companies in similar
lines of business depend on common factors such as overall demand for their products and services. An analysis of the market multiples of companies engaged in similar lines of business yields insight into investor perceptions and, therefore, the
value of the subject business. These multiples are then applied to the operating results of the subject business to estimate the fair value of the invested capital on a marketable, noncontrolling basis. The Company then applies a premium for control
to indicate the fair value of the business on a marketable, controlling basis.

The market transaction method estimates the fair value of the
invested capital of a business based on exchange prices in actual transactions and on asking prices for controlling interests in similar companies recently offered for sale. This process involves comparison and correlation of the subject business
with other similar companies that have recently been purchased. Considerations such as location, time of sale, physical characteristics, and conditions of sale are analyzed for comparable businesses.

The three variations of the market approach indicated that the fair value determined by the Companys discounted cash flow model was within a
reasonable range of outcomes.

The revenue forecasts for 2009 declined 7% and 9% for certain reporting units compared to the forecasts used in
the 2008 impairment test primarily as a result of the revenues realized during the first six months of 2009. These market driven changes were primarily responsible for the decline in fair value of the Companys reporting units below their
carrying value. As a result, the Company recognized a non-cash impairment charge to reduce its goodwill of $419.5 million at June 30, 2009.

Note 3: OTHER DEVELOPMENTS

Acquisitions

During the nine months ended September 30, 2009, the Companys Americas segment paid $5.0 million primarily for the acquisition of land and buildings. In addition, during the first nine months
of 2009, the Companys Americas segment purchased the remaining 15% interest in its consolidated subsidiary, Paneles Napsa S.A., for $13.0 million and the Companys International segment acquired an additional 5% interest in its
consolidated subsidiary, Clear Channel Jolly Pubblicita SPA, for $12.1 million.

During the nine months ended September 30, 2008, the
Companys Americas segment paid $53.1 million for the acquisition of advertising structures and earnout payments for Interspace Airport Advertising. The Companys International segment paid $51.7 million related to the acquisition of
additional equity interests in outdoor companies.

Disposition of Assets

During the nine months ended September 30, 2009, the Company sold assets for $5.5 million in the International segment resulting in a gain of $4.4
million included in Other operating income  net. In addition, the Company sold assets for $5.2 million in the Americas segment and recorded a gain of $3.7 million in Other operating income  net.

During the nine months ended September 30, 2008, the Company exchanged assets in one of its Americas markets for assets located in a different market
and recognized a gain of $2.6 million in Gain on disposition of assets  net. In addition, the Company sold its 50% interest in Clear Channel Independent, a South African outdoor advertising company, and recognized a gain of $75.6
million in Equity in earnings of nonconsolidated affiliates based on the fair value of the equity securities received as consideration. The Company classified these equity securities as available-for-sale on its consolidated balance
sheet in accordance with ASC Topic 320, Investments  Debt and Equity Securities.

Effective Tax Rates

The Companys effective tax rate for the three and nine months ended September 30, 2009 was (47.7%) and 11.1%, respectively.
The 2009 effective rates were impacted primarily due to the fact that the Company did not record tax benefits on net losses generated in the current period. Due to uncertainty on future taxable income and limitations on net operating loss carryback
claims allowed, the Company cannot realize deferred tax assets which arose in the three and nine months ended September 30, 2009. Pursuant to the provisions of ASC 740-10-30, deferred tax valuation allowances are



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required on those deferred tax assets. Additionally, the effective tax rate for the nine months ended September 30, 2009 was impacted by the impairment charge on goodwill recorded in the
second quarter 2009, which is not deductible for tax purposes.

The Companys effective tax rate for the three and nine months ended
September 30, 2008 was 35.7% and 23.8%, respectively. The effective rates for 2008 were favorably impacted by the nonrecognition of tax on the $75.6 million gain recognized from the sale of the Companys 50% interest in Clear Channel
Independent, a South African outdoor advertising company.

Legal Proceedings

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

Available-for-sale Marketable Equity Securities

The Company holds available-for-sale marketable equity securities classified in accordance with the provisions of ASC 320-10. These marketable equity securities are measured at fair value on each
reporting date using quoted prices in active markets. Due to the fact that the inputs used to measure the marketable equity securities at fair value are observable, the Company has categorized the fair value measurements of the securities as Level
1. The Company records its investments in these available-for-sale marketable equity securities on the balance sheet as Other Investments.

The unamortized cost, unrealized holding gains or losses, and fair value of the Companys investments at September 30, 2009 and December 31, 2008 are as follows:



|                   |  |                    |        |                   |   |                 |  |      |   |           |   |                  |  |                 |        |      |   |   |  |   |   |  |   |       
|------------------ |  | ------------------ | ------ | ----------------- | - | --------------- |  | ---- | - | --------- | - | ---------------- |  | --------------- | ------ | ---- | - | - |  | - | - |  | - | ------
|(In thousands)     |  | September 30, 2009 |        | December 31, 2008
|Investments        |  | FairValue          |        | UnrealizedLosses  |   | UnrealizedGains |  | Cost |   | FairValue |   | UnrealizedLosses |  | UnrealizedGains |        | Cost
|Available-for-sale |  | $                  | 11,200 |                   | $ |                |  | $    |  |           | $ | 11,200           |  | $               | 22,512 |      | $ |  |  | $ |  |  | $ | 22,512

The Companys available-for-sale equity security, Independent News & Media PLC
(INM), was in an unrealized loss position for the nine months ended September 30, 2009. As a result, the Company considered the guidance in ASC 320-10-S99 and reviewed the length of the time and the extent to which the market value
was less than cost and the financial condition and near-term prospects of the issuer. After this assessment, the Company concluded that the impairment was other than temporary and recorded an $11.3 million impairment in Loss on marketable
securities.

Note 4: COMMITMENTS AND CONTINGENCIES

Certain agreements relating to acquisitions provide for purchase price adjustments and other future contingent payments based on the financial performance of the acquired companies. For acquisitions
completed prior to the adoption of the provisions of ASC 805-10, the Company will continue to accrue additional amounts related to such contingent payments if and when it is determinable that the applicable financial performance targets will be met.
The aggregate of these contingent payments, if performance targets are met, would not significantly impact the financial position or results of operations of the Company. For acquisitions completed following the adoption of the provisions of ASC
805-10, the Company accounts for these payments based on the guidance in ASC 805-20, which clarifies the accounting treatment for assets acquired and liabilities assumed in a business combination that arise from contingencies.

As discussed in Note 3, there are various lawsuits and claims pending against the Company. Based on current assumptions, the Company has accrued its
estimate of the probable costs for the resolution of these claims. It is possible, however, that future results of operations for any particular period could be materially affected by changes in the Companys assumptions or the effectiveness of
its strategies related to these proceedings.

As of September 30, 2009, Clear Channel Communications had outstanding commercial standby
letters of credit and surety bonds of $79.8 million and $44.0 million, respectively, held on behalf of the Company. These letters of credit and surety bonds relate to various operational matters, including insurance, bid and performance bonds, as
well as other items.



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Note 5: RELATED PARTY TRANSACTIONS

As part of the day-to-day cash management services provided by Clear Channel Communications, the Company maintains accounts that represent net amounts due to or from Clear Channel Communications, which is
recorded as Due from/to Clear Channel Communications on the consolidated balance sheet. The accounts represent the revolving promissory note issued by the Company to Clear Channel Communications and the revolving promissory note issued
by Clear Channel Communications to the Company, in the face amount of $1.0 billion, or if more or less than such amount, the aggregate unpaid principal amount of all advances. Both of these revolving promissory notes mature on August 10, 2010.
The accounts accrue interest pursuant to the terms of the promissory notes and are generally payable on demand. Interest on the cash management note owed by the Company accrues on the daily net negative cash position based upon LIBOR plus a margin.
Interest on the cash management note owed by Clear Channel Communications accrues on the daily net positive cash position based upon the average one-month generic treasury bill rate. Included in the accounts are the net activities resulting from
day-to-day cash management services provided by Clear Channel Communications. As a part of these services, the Company maintains collection bank accounts swept daily into accounts of Clear Channel Communications. In return, Clear Channel
Communications funds the Companys controlled disbursement accounts as checks or electronic payments are presented for payment. The Companys claim in relation to cash transferred from its concentration account is on an unsecured basis and
is limited to the balance of the Due from Clear Channel Communications account. The Company is an unsecured creditor of Clear Channel Communications with respect to the revolving promissory note issued by Clear Channel Communications to
the Company. At September 30, 2009 and December 31, 2008, the asset recorded in Due from Clear Channel Communications on the consolidated balance sheet was $529.0 million and $431.6 million, respectively.

The cash management note the Company has recorded as Due from Clear Channel Communications is an unsecured obligation of Clear Channel
Communications. There is no observable market data on which to estimate the fair value of the cash management note.

The net interest
income for the three and nine months ended September 30, 2009 was $0.1 million and $0.4 million, respectively. The net interest income for the three and nine months ended September 30, 2008 was $1.2 million and $3.4 million, respectively.
At September 30, 2009 and 2008, the interest rate on the Due from Clear Channel Communications account was 0.056% and 0.840%, respectively, which represents the average one-month generic treasury bill rate as described above.

The Company has a note in the original principal amount of $2.5 billion to Clear Channel Communications which matures on August 2, 2010,
and may be prepaid in whole at any time, or in part from time to time. This note accrues interest at a variable per annum rate equal to the weighted average cost of debt for Clear Channel Communications, calculated on a monthly basis. This note is
mandatorily payable upon a change of control of the Company (as defined in the note) and, subject to certain exceptions, all net proceeds from debt or equity raised by the Company must be used to prepay such note. At September 30, 2009, the
interest rate on the $2.5 billion note was 5.7%.

The Companys $2.5 billion note payable to Clear Channel Communications is intercompany
indebtedness and neither it nor the Company has public debt ratings or observable market pricing information. As a result, the Company is not able to estimate the fair value of the note. Were the Company to obtain its own financing independent
of Clear Channel Communications, it believes that the rate of interest on such indebtedness would be higher than its current rate.

For so long
as Clear Channel Communications maintains significant control over the Company, a deterioration in the financial condition of Clear Channel Communications could have the effect of increasing the Companys borrowing costs or impairing the
Companys access to capital markets. Clear Channel Communications ability to meet its obligations with respect to the Due from Clear Channel Communications account depends on its working capital needs, debt service obligations
and its future operating performance and cash flow, which are in turn subject to prevailing economic conditions and other factors, many of which are beyond its control. The inability of Clear Channel Communications to meet its obligations with
respect to the Due from Clear Channel Communications account could have a material adverse effect on the Companys financial condition and on the Companys ability to meet its obligations. Neither the $2.5 billion term note
payable to Clear Channel Communications nor the Due from Clear Channel Communications note contain in their terms a right of offset. As of September 30, 2009, Clear Channel Communications had $1.4 billion recorded as Cash and
cash equivalents on its consolidated balance sheets.

Clear Channel Communications has a $2.0 billion multi-currency revolving credit
facility with a maturity in July 2014 which includes a $150.0 million sub-limit that certain of the Companys International subsidiaries may borrow against to the extent Clear Channel Communications has not already borrowed against this
capacity and is compliant with its covenants under the revolving credit facility. On February 6, 2009, Clear Channel Communications borrowed the remaining availability under its $2.0 billion revolving credit facility, including the remaining
availability under the $150.0 million sub-limit.



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The Company provides advertising space on its billboards for radio stations owned by Clear Channel
Communications. For the three and nine months ended September 30, 2009, the Company recorded $0.8 million and $2.0 million, respectively, in revenue for these advertisements. For the pre-merger period from January 1, 2008 through
July 30, 2008, the Company recorded $4.6 million in revenue for these advertisements. For the pre-merger period from July 1, 2008 through July 30, 2008, the Company recorded $0.4 million in revenue for these advertisements. For the
post-merger period from July 31, 2008 through September 30, 2008, the Company recorded $2.1 million in revenue for these advertisements.

Under the Corporate Services Agreement between Clear Channel Communications and the Company, Clear Channel Communications provides management services to the Company, which include, among other things: (i) treasury, payroll and other
financial related services; (ii) executive officer services; (iii) human resources and employee benefits services; (iv) legal and related services; (v) information systems, network and related services; (vi) investment
services; (vii) procurement and sourcing support services; and (viii) other general corporate services. These services are charged to the Company based on actual direct costs incurred or allocated by Clear Channel Communications based on
headcount, revenue or other factors on a pro rata basis. For the three and nine months ended September 30, 2009, the Company recorded $7.8 million and $22.0 million, respectively, as a component of corporate expenses for these services. For the
pre-merger period from January 1, 2008 through July 30, 2008, the Company recorded $14.2 million as a component of corporate expense for these services. For the pre-merger period from July 1, 2008 through July 30, 2008, the
Company recorded $2.1 million as a component of corporate expense for these services. For the post-merger period from July 31, 2008 through September 30, 2008, the Company recorded $5.3 million as a component of corporate expense for these
services.

Pursuant to the Tax Matters Agreement between Clear Channel Communications and the Company, the operations of the Company are
included in a consolidated federal income tax return filed by Clear Channel Communications. The Companys provision for income taxes has been computed on the basis that the Company files separate consolidated federal income tax returns with its
subsidiaries. Tax payments are made to Clear Channel Communications on the basis of the Companys separate taxable income. Tax benefits recognized on the Companys employee stock option exercises are retained by the Company.

The Company computes its deferred income tax provision using the liability method in accordance with ASC 740-10-30, as if the Company was a separate
taxpayer. Deferred tax assets and liabilities are determined based on differences between financial reporting bases and tax bases of assets and liabilities and are measured using the enacted tax rates expected to apply to taxable income in the
periods in which the deferred tax asset or liability is expected to be realized or settled. Deferred tax assets are reduced by valuation allowances if the Company believes it is more likely than not some portion or all of the asset will not be
realized.

Pursuant to the Employee Matters Agreement and following the consummation of the merger of Clear Channel Communications, the
Companys employees participate in CC Media Holdings employee benefit plans, including employee medical insurance and a 401(k) retirement benefit plan. These costs are recorded as a component of selling, general and administrative
expenses and were approximately $2.2 million and $7.2 million for the three and nine months ended September 30, 2009, respectively. These costs were approximately $6.7 million for the pre-merger period from January 1, 2008 through
July 30, 2008, $0.9 million for the pre-merger period from July 1, 2008 through July 30, 2008, and $1.9 million for the post-merger period from July 31, 2008 through September 30, 2008.

Note 6: SEGMENT DATA

The Company has two
reportable segments, which it believes best reflects how the Company is currently managed  Americas and International. The Americas segment primarily includes operations in the United States, Canada and Latin America, and the International
segment includes operations in primarily Europe, Asia and Australia. Share-based payments are recorded by each segment in direct operating expenses and selling, general and administrative expenses.

The following table presents the Companys operating segment results for the post-merger three and nine months ended September 30, 2009, and for
the post-merger period from July 31 through September 30, 2008, the pre-merger period from July 1 through July 30, 2008, and the pre-merger period from January 1 through July 30, 2008.



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|                                                             |  |          |           |               |   |           |                                     |  |   |              |   |  |   |            |  
|------------------------------------------------------------ |  | -------- | --------- | ------------- | - | --------- | ----------------------------------- |  | - | ------------ | - |  | - | ---------- | -
|(In thousands)                                               |  | Americas |           | International |   |           | Corporate,and otherreconcilingitems |  |   | Consolidated |  
|Three months ended September 30, 2009 (Post-merger)          |  |          |           |               |   |           |                                     |  |   |              |   |  |   |            |  
|Revenue                                                      |  | $        | 312,537   |               | $ | 348,085   |                                     |  | $ |             |   |  | $ | 660,622    |  
|Direct operating expenses                                    |  |          | 147,250   |               |   | 251,516   |                                     |  |   |             |   |  |   | 398,766    |  
|Selling, general and administrative expenses                 |  |          | 47,602    |               |   | 61,222    |                                     |  |   |             |   |  |   | 108,824    |  
|Depreciation and amortization                                |  |          | 54,102    |               |   | 56,951    |                                     |  |   |             |   |  |   | 111,053    |  
|Corporate expenses                                           |  |          |          |               |   |          |                                     |  |   | 15,547       |   |  |   | 15,547     |  
|Other operating income - net                                 |  |          |          |               |   |          |                                     |  |   | 1,160        |   |  |   | 1,160      |  
|                                                             |  |          |           |               |   |           |                                     |  |   |              |   |  |   |            |  
|Operating income (loss)                                      |  | $        | 63,583    |               | $ | (21,604   | )                                   |  | $ | (14,387      | ) |  | $ | 27,592     |  
|                                                             |  |          |           |               |   |           |                                     |  |   |              |   |  |   |            |  
|Share-based payments                                         |  | $        | 1,775     |               | $ | 537       |                                     |  | $ | 182          |   |  | $ | 2,494      |  
|                                                             |  |          |           |              
|Nine months ended September 30, 2009 (Post-merger)           |  |          |           |               |   |           |                                     |  |   |              |   |  |   |            |  
|Revenue                                                      |  | $        | 898,277   |               | $ | 1,036,678 |                                     |  | $ |             |   |  | $ | 1,934,955  |  
|Direct operating expenses                                    |  |          | 440,885   |               |   | 729,798   |                                     |  |   |             |   |  |   | 1,170,683  |  
|Selling, general and administrative expenses                 |  |          | 147,839   |               |   | 200,091   |                                     |  |   |             |   |  |   | 347,930    |  
|Depreciation and amortization                                |  |          | 158,612   |               |   | 169,157   |                                     |  |   |             |   |  |   | 327,769    |  
|Corporate expenses                                           |  |          |          |               |   |          |                                     |  |   | 45,446       |   |  |   | 45,446     |  
|Impairment charge                                            |  |          |          |               |   |          |                                     |  |   | 812,390      |   |  |   | 812,390    |  
|Other operating income - net                                 |  |          |          |               |   |          |                                     |  |   | 10,125       |   |  |   | 10,125     |  
|                                                             |  |          |           |               |   |           |                                     |  |   |              |   |  |   |            |  
|Operating income (loss)                                      |  | $        | 150,941   |               | $ | (62,368   | )                                   |  | $ | (847,711     | ) |  | $ | (759,138   | )
|                                                             |  |          |           |               |   |           |                                     |  |   |              |   |  |   |            |  
|Identifiable assets                                          |  | $        | 4,338,689 |               | $ | 2,350,806 |                                     |  | $ | 549,565      |   |  | $ | 7,239,060  |  
|Capital expenditures                                         |  | $        | 58,116    |               | $ | 55,860    |                                     |  | $ |             |   |  | $ | 113,976    |  
|Share-based payments                                         |  | $        | 5,971     |               | $ | 1,806     |                                     |  | $ | 611          |   |  | $ | 8,388      |  
|                                                             |  |          |           |              
|Period from July 1 through July 30, 2008 (Pre-merger)        |  |          |           |               |   |           |                                     |  |   |              |   |  |   |            |  
|Revenue                                                      |  | $        | 124,491   |               | $ | 147,185   |                                     |  | $ |             |   |  | $ | 271,676    |  
|Direct operating expenses                                    |  |          | 53,659    |               |   | 104,695   |                                     |  |   |             |   |  |   | 158,354    |  
|Selling, general and administrative expenses                 |  |          | 20,197    |               |   | 29,005    |                                     |  |   |             |   |  |   | 49,202     |  
|Depreciation and amortization                                |  |          | 17,637    |               |   | 20,146    |                                     |  |   |             |   |  |   | 37,783     |  
|Corporate expenses                                           |  |          |          |               |   |          |                                     |  |   | 5,311        |   |  |   | 5,311      |  
|Other operating income - net                                 |  |          |          |               |   |          |                                     |  |   | 2,506        |   |  |   | 2,506      |  
|                                                             |  |          |           |               |   |           |                                     |  |   |              |   |  |   |            |  
|Operating income (loss)                                      |  | $        | 32,998    |               | $ | (6,661    | )                                   |  | $ | (2,805       | ) |  | $ | 23,532     |  
|                                                             |  |          |           |               |   |           |                                     |  |   |              |   |  |   |            |  
|Share-based payments                                         |  | $        | 1,152     |               | $ | 291       |                                     |  | $ | 76           |   |  | $ | 1,519      |  
|                                                             |  |          |           |              
|Period from July 31 through September 30, 2008 (Post-merger) |  |          |           |               |   |           |                                     |  |   |              |   |  |   |            |  
|Revenue                                                      |  | $        | 245,239   |               | $ | 296,460   |                                     |  | $ |             |   |  | $ | 541,699    |  
|Direct operating expenses                                    |  |          | 109,209   |               |   | 195,554   |                                     |  |   |             |   |  |   | 304,763    |  
|Selling, general and administrative expenses                 |  |          | 39,590    |               |   | 53,585    |                                     |  |   |             |   |  |   | 93,175     |  
|Depreciation and amortization                                |  |          | 38,230    |               |   | 42,785    |                                     |  |   |             |   |  |   | 81,015     |  
|Corporate expenses                                           |  |          |          |               |   |          |                                     |  |   | 11,231       |   |  |   | 11,231     |  
|Other operating income - net                                 |  |          |          |               |   |          |                                     |  |   | 1,528        |   |  |   | 1,528      |  
|                                                             |  |          |           |               |   |           |                                     |  |   |              |   |  |   |            |  
|Operating income (loss)                                      |  | $        | 58,210    |               | $ | 4,536     |                                     |  | $ | (9,703       | ) |  | $ | 53,043     |  
|                                                             |  |          |           |               |   |           |                                     |  |   |              |   |  |   |            |  
|Identifiable assets                                          |  | $        | 8,697,963 |               | $ | 2,775,598 |                                     |  | $ | 385,288      |   |  | $ | 11,858,849 |  
|Capital expenditures                                         |  | $        | 23,317    |               | $ | 15,504    |                                     |  | $ |             |   |  | $ | 38,821     |  
|Share-based payments                                         |  | $        | 1,236     |               | $ | 339       |                                     |  | $ | 152          |   |  | $ | 1,727      |  



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|                                                         |  |          |         |               |   |                                     |  |   |              |   |  |   |          
|-------------------------------------------------------- |  | -------- | ------- | ------------- | - | ----------------------------------- |  | - | ------------ | - |  | - | ---------
|(In thousands)                                           |  | Americas |         | International |   | Corporate,and otherreconcilingitems |  |   | Consolidated
|Period from January 1 through July 30, 2008 (Pre-merger) |  |          |         |               |   |                                     |  |   |              |  
|Revenue                                                  |  | $        | 842,831 |               | $ | 1,119,232                           |  | $ |             |   |  | $ | 1,962,063
|Direct operating expenses                                |  |          | 370,924 |               |   | 748,508                             |  |   |             |   |  |   | 1,119,432
|Selling, general and administrative expenses             |  |          | 138,629 |               |   | 206,217                             |  |   |             |   |  |   | 344,846  
|Depreciation and amortization                            |  |          | 117,009 |               |   | 130,628                             |  |   |             |   |  |   | 247,637  
|Corporate expenses                                       |  |          |        |               |   |                                    |  |   | 39,364       |   |  |   | 39,364   
|Other operating income - net                             |  |          |        |               |   |                                    |  |   | 10,978       |   |  |   | 10,978   
|                                                         |  |          |         |               |   |                                     |  |   |              |   |  |   |          
|Operating income (loss)                                  |  | $        | 216,269 |               | $ | 33,879                              |  | $ | (28,386      | ) |  | $ | 221,762  
|                                                         |  |          |         |               |   |                                     |  |   |              |   |  |   |          
|Capital expenditures                                     |  | $        | 82,672  |               | $ | 116,450                             |  | $ |             |   |  | $ | 199,122  
|Share-based payments                                     |  | $        | 5,453   |               | $ | 1,370                               |  | $ | 585          |   |  | $ | 7,408    

Revenue of $375.4 million and $1.1 billion derived from the Companys foreign operations are
included in the data above for the three and nine months ended September 30, 2009. Identifiable assets of $2.6 billion derived from the Companys foreign operations are included in the data above as of September 30, 2009.

Revenue of $318.2 million and identifiable assets of $3.0 billion derived from foreign operations are included in the data above for the post-merger
period from July 31, 2008 through September 30, 2008. Revenue of $156.7 million and $1.2 billion derived from foreign operations are included in the data above for the pre-merger periods from July 1, 2008 through July 30, 2008
and from January 1, 2008 through July 30, 2008, respectively.



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

INTRODUCTION

Managements discussion and analysis of our financial condition and results of operations is provided as a supplement to the unaudited interim financial statements and accompanying notes thereto to help provide an understanding of our
financial condition, changes in our financial condition and results of our operations. The information included herein should be read in conjunction with the quarterly and annual financial statements. Our reportable operating segments are Americas
outdoor advertising (Americas) and International outdoor advertising (International).

Clear Channel
Communications Merger

On July 30, 2008, Clear Channel Communications, our parent company, completed its
merger with a subsidiary of CC Media Holdings, a company formed by private equity funds sponsored by Bain Capital Partners, LLC and Thomas H. Lee Partners, L.P. Clear Channel Communications is now an indirect wholly-owned subsidiary of CC Media
Holdings. The merger was accounted for as a purchase business combination in conformity with Statement of Financial Accounting Standards No. 141, Business Combinations, and Emerging Issues Task Force Issue 88-16, Basis in Leveraged
Buyout Transactions. ASC 805-50-S99-1 requires the application of push down accounting in situations where the ownership of an entity has changed. As a result, the post-merger financial statements reflect a new basis of accounting. The purchase
price allocation was complete as of July 30, 2009 in accordance with ASC 805-10-25, which requires that the allocation period not exceed one year from the date of acquisition.

During the first seven months of 2009, we decreased the initial fair value estimate of our permits, contracts, site leases and other assets
and liabilities primarily in our Americas segment by $100.7 million based on additional information received, which resulted in an increase to goodwill of $55.8 million and a decrease to deferred taxes of $44.9 million. During the third quarter of
2009, we recorded a $45.0 million increase to goodwill in our International segment related to the fair value of certain minority interests recorded pursuant to ASC 480-10-S99, which distinguishes liabilities from equity, and which had no related
tax effect. In addition, during the third quarter of 2009, we adjusted deferred taxes by $24.5 million to true-up tax rates in certain jurisdictions that were estimated in the initial purchase price allocation.

Format of Presentation

Our consolidated statements of operations and statements of cash flows are presented for two periods: post-merger and pre-merger. The merger resulted in a new basis of accounting beginning on July 31, 2008 and the financial reporting
periods are presented as follows:



| |  |  | The three and nine month periods ended September 30, 2009 and the period from July 31 through September 30, 2008 reflect our post-merger
period, including the purchase accounting adjustments related to the merger that were pushed down to us.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The periods from January 1 through July 30, 2008 and July 1 through July 30, 2008 reflect our pre-merger period. The consolidated
financial statements for all pre-merger periods were prepared using the historical basis of accounting for Clear Channel Communications. As a result of the merger and the associated purchase accounting, the consolidated financial statements of the
post-merger periods are not comparable to periods preceding the merger.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The discussion in this MD&A is
presented on a combined basis of the pre-merger and post-merger periods for 2008. The 2008 post-merger and pre-merger results are presented but are not discussed separately. We believe that the discussion on a combined basis is more meaningful as it
allows the results of operations to be analyzed to comparable periods in 2009.

There are several agreements which govern our
relationship with Clear Channel Communications, including the Corporate Services Agreement, Employee Matters Agreement and Tax Matters Agreement. Clear Channel Communications has the right to terminate these agreements in various circumstances. As
of the date of the filing of this Quarterly Report, no notice of termination of any of these agreements has been received from Clear Channel Communications. The terms and conditions of our agreements with Clear Channel Communications have not
changed following the consummation of the merger of Clear Channel Communications.



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Impairment Charges

Impairment to Definite-lived Intangibles

We review our definite-lived intangibles for impairment when events and circumstances indicate that amortizable long-lived assets might be impaired and the undiscounted cash flows estimated to be
generated from those assets are less than the carrying amount of those assets. When specific assets are determined to be unrecoverable, the cost basis of the asset is reduced to reflect the current fair market value.

We use various assumptions in determining the current fair market value of these assets, including future expected cash flows, industry
growth rates and discount rates. Impairment loss calculations require management to apply judgment in estimating future cash flows, including forecasting useful lives of the assets and selecting the discount rate that reflects the risk inherent in
future cash flows.

During the second quarter of 2009, we recorded a $21.3 million impairment to taxi contracts in our
Americas segment and a $17.5 million impairment primarily related to street furniture and billboard contracts in our International segment. We determined fair values using a discounted cash flow model. The decline in fair value of the contracts was
primarily driven by a decline in the revenue projections. The decline in revenue related to taxi contracts and street furniture and billboard contracts was in the range of 10% to 15%. The balance of these taxi contracts and street furniture and
billboard contracts after the impairment charges, for the contracts that were impaired, was $3.3 million and $16.0 million, respectively.

Impairment to Billboard Permits

Our billboard permits are
effectively issued in perpetuity by state and local governments as they are transferable or renewable at little or no cost. Permits typically specify the locations at which we are allowed to operate an advertising structure. Due to significant
differences in both business practices and regulations, billboards in our International segment are subject to long-term, finite contracts versus permits in the United States and Canada. Accordingly, there are no indefinite-lived assets in our
International segment.

We performed an interim impairment test on our billboard permits as of December 31, 2008, which
resulted in a non-cash impairment charge of $722.6 million. Our cash flows during the first six months of 2009 were below those in the discounted cash flow model used to calculate the impairment at December 31, 2008. As a result, we performed
an interim impairment test as of June 30, 2009 on our billboard permits, resulting in a non-cash impairment charge of $345.4 million.

The fair value of the permits was determined using the direct valuation method as prescribed in ASC 805-20-S99. Under the direct valuation method, the fair value of the permits was calculated at the
market level as prescribed by ASC 350-30-35. We engaged Mesirow Financial, a third-party valuation firm, to assist us in the development of the assumptions and our determination of the fair value of our permits. Our impairment test consisted
of a comparison of the fair value of the permits at the market level with their carrying amount. If the carrying amount of the permit exceeded its fair value, an impairment loss was recognized equal to that excess. After an impairment loss is
recognized, the adjusted carrying amount of the permit is its new accounting basis.

Our application of the direct valuation
method attempts to isolate the income that is properly attributable to the permit alone (that is, apart from tangible and identified intangible assets and goodwill). It is based upon modeling a hypothetical greenfield build up to a
normalized enterprise that, by design, lacks inherent goodwill and whose only other assets have essentially been paid for (or added) as part of the build-up process. We forecasted revenue, expenses, and cash flows over a ten-year period
for each of our markets in our application of the direct valuation method. We also calculated a normalized residual year which represents the perpetual cash flows of each market. The residual year cash flow was capitalized to arrive at
the terminal value of the permits in each market.

Our key assumptions using the direct valuation method are market revenue
growth rates, market share, profit margin, duration and profile of the build-up period, estimated start-up capital costs and losses incurred during the build-up period, the risk-adjusted discount rate and terminal values. This data is populated
using industry normalized information representing an average billboard permit within a market.

Management uses its internal
forecasts to estimate industry normalized information as it believes these forecasts are similar to what a market participant would expect to generate. This is due to the pricing structure and demand for outdoor signage in a market being relatively
constant regardless of the owner of the operation. Management also relied on its internal forecasts because there is nominal public data available for each of its markets.



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The build-up period represents the time it takes for the hypothetical start-up operation to
reach normalized operations in terms of achieving a mature market revenue share and profit margin. Management believes that a one-year build-up period is required for a start-up operation to erect the necessary structures and obtain advertisers in
order achieve mature market revenue share. It is estimated that a start-up operation would be able to obtain 10% of the potential revenues in the first year of operations and 100% in the second year. Management assumed industry revenue growth of
negative 16% during the build-up period. However, the cost structure is expected to reach the normalized level over three years due to the time required to recognize the synergies and cost savings associated with the ownership of the permits within
the market.

For the normalized operating margin in the third year, management assumed a hypothetical business would operate
at the lower of the operating margin for the specific market or the industry average margin of 45% based on an analysis of comparable companies. For the first and second year of operations, the operating margin was assumed to be 50% of the
normalized operating margin. The first and second-year expenses include the non-recurring start-up costs necessary to build the operation (i.e. development of customers, workforce, etc.).

In addition to cash flows during the projection period, a normalized residual cash flow was calculated based upon
industry-average growth of 3% beyond the discrete build-up projection period. The residual cash flow was then capitalized to arrive at the terminal value.

The present value of the cash flows is calculated using an estimated required rate of return based upon industry-average market conditions. In determining the estimated required rate of return, management
calculated a discount rate using both current and historical trends in the industry.

We calculated the discount rate as of
the valuation date and also one-year, two-year, and three-year historical quarterly averages. The discount rate was calculated by weighting the required returns on interest-bearing debt and common equity capital in proportion to their estimated
percentages in an expected capital structure. The capital structure was estimated based on the quarterly average of data for publicly traded companies in the outdoor advertising industry.

The calculation of the discount rate required the rate of return on debt, which was based on a review of the credit ratings for comparable
companies (i.e. market participants). We used the yield on a Standard & Poors B rated corporate bond for the pre-tax rate of return on debt and tax-effected such yield based on applicable tax rates.

The rate of return on equity capital was estimated using a modified Capital Asset Pricing Model (CAPM). Inputs to this model
included the yield on long-term U.S. Treasury bonds, forecast betas for comparable companies, calculation of a market risk premium based on research and empirical evidence and calculation of a size premium derived from historical differences in
returns between small companies and large companies using data published by Ibbotson Associates.

Our concluded discount rate
used in the discounted cash flow models to determine the fair value of the permits was 10%. Applying the discount rate, the present value of cash flows during the discrete projection period and terminal value were added to estimate the fair value of
the hypothetical start-up operation. The initial capital investment was subtracted to arrive at the value of the permits. The initial capital investment represents the fixed assets needed to erect the necessary advertising structures.

The discount rate used in the impairment model increased approximately 50 basis points over the discount rate used to value the permits at
December 31, 2008. Industry revenue forecasts declined 8% through 2013 compared to the forecasts used in the 2008 impairment test. These market driven changes were primarily responsible for the decline in fair value of the billboard permits
below their carrying value. As a result, we recognized a non-cash impairment charge in all but five of our markets in the United States and Canada, which totaled $345.4 million. The fair value of our permits was $1.1 billion at June 30, 2009.

While we believe we have made reasonable estimates and utilized reasonable assumptions to calculate the fair value of our
permits, it is possible a material change could occur. If our future actual results are not consistent with our estimates, we could be exposed to future impairment losses that could be material to our results of operations. The following table shows
the resulting decline in the fair value of our billboard permits of a 100 basis point decline in our discrete and terminal period revenue growth rate and profit margin assumptions and a 100 basis point increase in our discount rate assumption,
respectively:



|                            |  |                     |         |               |   |                |  |   |        
|--------------------------- |  | ------------------- | ------- | ------------- | - | -------------- |  | - | -------
|(In thousands)              |  |                     |         |               |   |               
|Indefinite-lived intangible |  | Revenue growth rate |         | Profit margin |   | Discount rates
|Billboard permits           |  | $                   | 386,700 |               | $ | 73,300         |  | $ | 408,300

The following table shows the increase to the billboard permit impairment that would
have occurred using hypothetical percentage reductions in fair value, had the hypothetical reductions in fair value existed at the time of our impairment testing:



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|                             |  |  |  |                      |        
|---------------------------- |  |  |  | -------------------- | -------
|(In thousands)               |  |  |  |                     
|Percent change in fair value |  |  |  | Change to impairment
|5%                           |  |  |  | $                    | 55,776 
|10%                          |  |  |  | $                    | 111,782
|15%                          |  |  |  | $                    | 167,852

Impairment to Goodwill

We performed an interim impairment test as of December 31, 2008 which resulted in a non-cash impairment charge of $2.5 billion to reduce
our goodwill. Our goodwill impairment test is a two-step process. The first step, used to screen for potential impairment, compares the fair value of the reporting unit with its carrying amount, including goodwill. The second step, used to measure
the amount of the impairment loss, compares the implied fair value of the reporting unit goodwill with the carrying amount of that goodwill. We engaged Mesirow Financial to assist us in the development of the assumptions and our determination of the
fair value of our reporting units.

Each of our U.S. outdoor advertising markets is a component. Our U.S. outdoor advertising
markets are aggregated into a single reporting unit for purposes of the goodwill impairment test using the guidance in ASC 350-20-55. We also determined that in our Americas segment, Canada, Mexico, Peru, and Brazil constitute separate reporting
units and each country in our International segment constitutes a separate reporting unit.

We test goodwill at interim dates
if events or changes in circumstances indicate that goodwill might be impaired. Our cash flows during the first six months of 2009 were below those used in the discounted cash flow model used to calculate the impairment at December 31, 2008.
Additionally, the fair value of our debt and equity at June 30, 2009 was below the carrying amount of our reporting units at June 30, 2009. As a result of these indicators, we performed an interim goodwill impairment test as of
June 30, 2009, which resulted in a non-cash impairment charge of $419.5 million.

The discounted cash flow model
indicated that we failed the first step of the impairment test for substantially all reporting units, which required us to compare the implied fair value of each reporting units goodwill with its carrying value.

The discounted cash flow approach we use for valuing goodwill involves estimating future cash flows expected to be generated from the
related assets, discounted to their present value using a risk-adjusted discount rate. Terminal values are also estimated and discounted to their present value.

We forecasted revenue, expenses, and cash flows over a ten-year period for each of our reporting units. In projecting future cash flows, we considered a variety of factors including our historical growth
rates, macroeconomic conditions, advertising sector and industry trends as well as company-specific information. Historically, revenues in our industries have been highly correlated to economic cycles. Based on these considerations, our assumed 2009
revenue growth rates were negative followed by assumed revenue growth with an anticipated economic recovery in 2010. To arrive at our projected cash flows and resulting growth rates, we evaluated our historical operating results, current management
initiatives and both historical and anticipated industry results to assess the reasonableness of our operating margin assumptions. We also calculated a normalized residual year which represents the perpetual cash flows of each reporting
unit. The residual year cash flow was capitalized to arrive at the terminal value of the reporting unit.

We calculated the
weighted average cost of capital (WACC) as of June 30, 2009 and also one-year, two-year, and three-year historical quarterly averages for each of our reporting units. WACC is an overall rate based upon the individual rates of return
for invested capital (equity and interest bearing debt). The WACC is calculated by weighting the required returns on interest-bearing debt and common equity capital in proportion to their estimated percentages in an expected capital structure. The
capital structure was estimated based on the quarterly average data for publicly traded companies in the outdoor advertising industry. Our calculation of the WACC considered both current industry WACCs and historical trends in the industry.

The calculation of the WACC requires the rate of return on debt, which was based on a review of the credit ratings for
comparable companies (i.e. market participants) and the indicated yield on similarly rated bonds.



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The rate of return on equity capital was estimated using a modified CAPM. Inputs to this
model included the yield on long-term U.S. Treasury bonds, forecast betas for comparable companies, calculation of a market risk premium based on research and empirical evidence and calculation of a size premium derived from historical differences
in returns between small companies and large companies using data published by Ibbotson Associates.

In line with advertising
industry trends, our operations and expected cash flow are subject to significant uncertainties about future developments, including timing and severity of the recessionary trends and customers behaviors. To address these risks, we included
company-specific risk premiums for each of our reporting units in the estimated WACC. Based on this analysis, company-specific risk premiums of 250 basis points and 350 basis points were included for our Americas and International segments,
respectively, resulting in WACCs of 12.5% and 13.5% for each of our reporting units in the Americas and International segments, respectively. Applying these WACCs, the present value of cash flows during the discrete projection period and terminal
value were added to estimate the fair value of the reporting units.

The discount rate utilized in the valuation of the
outdoor permits as of June 30, 2009 excludes the company-specific risk premiums that were added to the industry WACCs used in the valuation of the reporting units. Management believes the exclusion of this premium is appropriate given the
difference between the nature of the billboard permits and reporting unit cash flow projections. The cash flow projections utilized under the direct valuation method for the permits are derived from utilizing industry normalized
information for the existing portfolio of permits. Given that the underlying cash flow projections are based on industry normalized information, application of an industry average discount rate is appropriate. Conversely, our cash flow
projections for the overall reporting unit are based on our internal forecasts for each business and incorporate future growth and initiatives unrelated to the existing permit portfolio. Additionally, the projections for the reporting unit
include cash flows related to non-permit based assets. In the valuation of the reporting unit, the company-specific risk premiums were added to the industry WACCs due to the risks inherent in achieving the projected cash flows of the reporting
unit.

We also utilized the market approach to provide a test of reasonableness to the results of the discounted cash flow
model. The market approach indicates the fair value of the invested capital of a business based on a companys market capitalization (if publicly traded) and a comparison of the business to comparable publicly traded companies and transactions
in its industry. This approach can be estimated through the quoted market price method, the market comparable method, and the market transaction method.

One indication of the fair value of a business is the quoted market price in active markets for the debt and equity of the business. The quoted market price of equity multiplied by the number of shares
outstanding yields the fair value of the equity of a business on a marketable, noncontrolling basis. We then apply a premium for control and add the estimated fair value of interest-bearing debt to indicate the fair value of the invested capital of
the business on a marketable, controlling basis.

The market comparable method provides an indication of the fair value of the
invested capital of a business by comparing it to publicly traded companies in similar lines of business. The conditions and prospects of companies in similar lines of business depend on common factors such as overall demand for their products and
services. An analysis of the market multiples of companies engaged in similar lines of business yields insight into investor perceptions and, therefore, the value of the subject business. These multiples are then applied to the operating results of
the subject business to estimate the fair value of the invested capital on a marketable, noncontrolling basis. We then apply a premium for control to indicate the fair value of the business on a marketable, controlling basis.

The market transaction method estimates the fair value of the invested capital of a business based on exchange prices in actual transactions
and on asking prices for controlling interests in similar companies recently offered for sale. This process involves comparison and correlation of the subject business with other similar companies that have recently been purchased. Considerations
such as location, time of sale, physical characteristics, and conditions of sale are analyzed for comparable businesses.

The
three variations of the market approach indicated that the fair value determined by our discounted cash flow model was within a reasonable range of outcomes.

Our revenue forecasts for 2009 declined 7% and 9% for Americas and International, respectively, compared to the forecasts used in the 2008 impairment test primarily as a result of our revenues realized
during the first six months of 2009. These market driven changes were primarily responsible for the decline in fair value of our reporting units below their carrying value. As a result, we recognized a non-cash impairment charge to reduce our
goodwill of $419.5 million at June 30, 2009.

A rollforward of our goodwill balance from December 31, 2008 through
September 30, 2009 by reporting unit is as follows:



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|                              |  |                                |           |              |   |              |  |                 |   |            |   |        |             |   |          |                                 |  |   |         |   |  |   |        
|----------------------------- |  | ------------------------------ | --------- | ------------ | - | ------------ |  | --------------- | - | ---------- | - | ------ | ----------- | - | -------- | ------------------------------- |  | - | ------- | - |  | - | -------
|(In thousands)                |  | Balances as ofDecember 31,2008 |           | Acquisitions |   | Dispositions |  | ForeignCurrency |   | Impairment |   |        | Adjustments |   |          | Balances as ofSeptember 30,2009
|United States Outdoor Markets |  | $                              | 824,730   |              | $ | 2,250        |  | $               |  |            | $ |       |             | $ | (324,893 | )                               |  | $ | 73,546  |   |  | $ | 575,633
|Switzerland                   |  |                                | 56,885    |              |   |             |  |                 |  |            |   | 1,087  |             |   | (7,827   | )                               |  |   |        |   |  |   | 50,145 
|Ireland                       |  |                                | 14,285    |              |   |             |  |                 |  |            |   | 302    |             |   | (10,360  | )                               |  |   |        |   |  |   | 4,227  
|Baltics                       |  |                                | 10,629    |              |   |             |  |                 |  |            |   |       |             |   | (10,235  | )                               |  |   |        |   |  |   | 394    
|Americas  Mexico             |  |                                | 8,729     |              |   |             |  |                 |  |            |   | 7,220  |             |   | (10,085  | )                               |  |   | (442    | ) |  |   | 5,422  
|Americas  Chile              |  |                                | 3,964     |              |   |             |  |                 |  |            |   | 4,417  |             |   | (7,834   | )                               |  |   |        |   |  |   | 547    
|Americas  Peru               |  |                                | 45,284    |              |   |             |  |                 |  |            |   |       |             |   | (37,609  | )                               |  |   |        |   |  |   | 7,675  
|Americas  Brazil             |  |                                | 4,971     |              |   |             |  |                 |  |            |   | 4,436  |             |   | (9,407   | )                               |  |   |        |   |  |   |       
|All Others  International    |  |                                | 205,744   |              |   | 110          |  |                 |  |            |   | 18,728 |             |   | (1,300   | )                               |  |   | 45,041  |   |  |   | 268,323
|Americas  Canada             |  |                                | 4,920     |              |   |             |  |                 |  |            |   |       |             |   |         |                                 |  |   | (4,920  | ) |  |   |       
|                              |  |                                |           |              |   |              |  |                 |   |            |   |        |             |   |          |                                 |  |   |         |   |  |   |        
|                              |  | $                              | 1,180,141 |              | $ | 2,360        |  | $               |  |            | $ | 36,190 |             | $ | (419,550 | )                               |  | $ | 113,225 |   |  | $ | 912,366
|                              |  |                                |           |              |   |              |  |                 |   |            |   |        |             |   |          |                                 |  |   |         |   |  |   |        

While we believe we have made reasonable estimates and utilized appropriate
assumptions to calculate the fair value of our reporting units, it is possible a material change could occur. If future results are not consistent with our assumptions and estimates, we may be exposed to impairment charges in the future. The
following table shows the resulting decline in the fair value of each of our reportable segments of a 100 basis point decline in our discrete and terminal period revenue growth rate and profit margin assumptions and a 100 basis point increase in our
discount rate assumption, respectively:



|                      |  |                     |         |               |   |                |  |   |        
|--------------------- |  | ------------------- | ------- | ------------- | - | -------------- |  | - | -------
|(In thousands)        |  |                     |         |               |   |               
|Reportable segment    |  | Revenue growth rate |         | Profit margin |   | Discount rates
|Americas Outdoor      |  | $                   | 320,000 |               | $ | 90,000         |  | $ | 300,000
|International Outdoor |  | $                   | 140,000 |               | $ | 100,000        |  | $ | 120,000

The following table shows the increase to the goodwill impairment that would have
occurred using hypothetical percentage reductions in fair value, had the hypothetical reduction in fair value existed at the time of our impairment testing:



|                      |  |    |         |     |   |         |  |   |        
|--------------------- |  | -- | ------- | --- | - | ------- |  | - | -------
|(In thousands)        |  |    |         |     |   |        
|Reportable segment    |  | 5% |         | 10% |   | 15%    
|Americas Outdoor      |  | $  | 164,950 |     | $ | 329,465 |  | $ | 493,915
|International Outdoor |  | $  | 7,207   |     | $ | 18,452  |  | $ | 33,774 

Restructuring Program

On January 20, 2009, CC Media Holdings announced that it had commenced a restructuring program (the restructuring program)
targeting a reduction of fixed costs. For the three months ended September 30, 2009, we recognized approximately $0.5 million, $5.4 million and $0.7 million as components of direct operating expenses, selling, general and administrative
(SG&A) expenses and corporate expenses, respectively, related to the restructuring program. For the nine months ended September 30, 2009, we recognized approximately $13.5 million, $6.5 million and $3.6 million as components of
direct operating expenses, SG&A expenses and corporate expenses, respectively, related to the restructuring program.

Description of
Business

Our outdoor advertising business has been, and may continue to be, adversely impacted by the difficult
economic conditions currently present in the United States and other countries in which we operate. The continuing weakening economy has, among other things, adversely affected our clients need for advertising and marketing services, resulting
in increased cancellations and non-renewals by our clients, thereby reducing our occupancy levels, and could require us to lower our rates in order to remain competitive, thereby reducing our yield, or affect our clients solvency. Any one or
more of these effects could materially affect our business, financial condition and results of operations.

Our revenue is
derived from selling advertising space on displays owned or operated by us, consisting primarily of billboards, street furniture and transit displays. We own the majority of our advertising displays, which typically are located on sites that we
either lease or own or for which we have acquired permanent easements. Our advertising contracts with clients typically outline the number of displays reserved, the duration of the advertising campaign and the unit price per display.



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Our advertising rates are based on a number of different factors including location,
competition, size of display, illumination, market and gross ratings points. Gross ratings points are the total number of impressions delivered by a display or group of displays, expressed as a percentage of a market population. The number of
impressions delivered by a display is measured by the number of people passing the site during a defined period of time and, in some international markets, is weighted to account for such factors as illumination, proximity to other displays and the
speed and viewing angle of approaching traffic. Management typically monitors our business by reviewing the average rates, average revenue per display, or yield, occupancy and inventory levels of each of our display types by market. In addition,
because a significant portion of our advertising operations are conducted in foreign markets, the largest being France and the United Kingdom, management reviews the operating results from our foreign operations on a constant dollar basis. A
constant dollar basis allows for comparison of operations independent of foreign exchange movements.

The significant expenses
associated with our operations include (i) direct production, maintenance and installation expenses, (ii) site-lease expenses for land under our displays and (iii) revenue-sharing or minimum guaranteed amounts payable under our
billboard, street furniture and transit display contracts. Our direct production, maintenance and installation expenses include costs for printing, transporting and changing the advertising copy on our displays, the related labor costs, the vinyl
and paper costs and the costs for cleaning and maintaining our displays. Vinyl and paper costs vary according to the complexity of the advertising copy and the quantity of displays. Our site-lease expenses include lease payments for use of the land
under our displays, as well as any revenue-sharing arrangements or minimum guaranteed amounts payable that we may have with the landlords. The terms of our site leases and revenue-sharing or minimum guaranteed contracts generally range from one to
20 years.

In our International business, normal market practice is to sell billboards and street furniture advertising as
network packages with contract terms typically ranging from one to two weeks, compared to contract terms typically ranging from four weeks to one year in the United States. In addition, competitive bidding for street furniture and transit display
contracts, which constitute a larger portion of our International business, and a different regulatory environment for billboards, result in higher site-lease cost in our International business compared to our Americas business. As a result, our
margins are typically less in our International business than in the Americas.

Our street furniture and transit display
contracts, the terms of which range from three to 20 years, generally require us to make upfront investments in property, plant and equipment. These contracts may also include upfront lease payments and/or minimum annual guaranteed lease payments.
We can give no assurance that our cash flows from operations over the terms of these contracts will exceed the upfront and minimum required payments.

Relationship with Clear Channel Communications

We became a publicly traded company on November 11,
2005, through an initial public offering (IPO), in which we sold 10% of our common stock, or 35.0 million shares of our Class A common stock. Prior to our IPO, we were an indirect wholly-owned subsidiary of Clear Channel
Communications. Clear Channel Communications currently owns all of our outstanding shares of Class B common stock, representing approximately 89% of the outstanding shares of our common stock and approximately 99% of the total voting power of our
common stock.

In accordance with the Master Agreement, our branch managers follow a corporate policy allowing Clear Channel
Communications to use, without charge, Americas displays they believe would otherwise be unsold. Our sales personnel receive partial revenue credit for that usage for compensation purposes. This partial revenue credit is not included in our
reported revenue. Clear Channel Communications bears the cost of producing the advertising and we bear the costs of installing and removing this advertising. We estimated this discounted revenue would have been less than 1% of our Americas revenue
for the three and nine months ended September 30, 2009 and 2008.

Under the Corporate Services Agreement, Clear Channel
Communications provides management services to us, which include, among other things: (i) treasury, payroll and other financial related services; (ii) executive officer services; (iii) human resources and employee benefits services;
(iv) legal and related services; (v) information systems, network and related services; (vi) investment services; (vii) procurement and sourcing support services; and (viii) other general corporate services. These services
are charged to us based on actual direct costs incurred or allocated by Clear Channel Communications based on headcount, revenue or other factors on a pro rata basis. For the three months ended September 30, 2009 and 2008, we recorded
approximately $7.8 million and $7.4 million, respectively, as a component of corporate expenses for these services. For the nine months ended September 30, 2009 and 2008, we recorded approximately $22.0 million and $19.5 million, respectively,
as a component of corporate expenses for these services.



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Share-Based Payments

As of September 30, 2009, there was $18.4 million of unrecognized compensation cost, net of estimated forfeitures, related to unvested
share-based compensation arrangements. This cost is expected to be recognized over a weighted average period of approximately two years. The following table details compensation costs related to share-based payments for the three and nine months
ended September 30, 2009 and 2008:



|                                             |  |                                 |       |                                |   |                 |  |              |       |  |   |      
|-------------------------------------------- |  | ------------------------------- | ----- | ------------------------------ | - | --------------- |  | ------------ | ----- |  | - | -----
|(In thousands)                               |  | Three Months EndedSeptember 30, |       | Nine Months EndedSeptember 30,
|                                             |  | 2009Post-merger                 |       | 2008Combined                   |   | 2009Post-merger |  | 2008Combined
|Direct operating expenses                    |  | $                               | 1,694 |                                | $ | 2,456           |  | $            | 5,698 |  | $ | 6,413
|Selling, general and administrative expenses |  |                                 | 618   |                                |   | 562             |  |              | 2,079 |  |   | 1,985
|Corporate expenses                           |  |                                 | 182   |                                |   | 228             |  |              | 611   |  |   | 737  
|                                             |  |                                 |       |                                |   |                 |  |              |       |  |   |      
|Total share-based payments                   |  | $                               | 2,494 |                                | $ | 3,246           |  | $            | 8,388 |  | $ | 9,135
|                                             |  |                                 |       |                                |   |                 |  |              |       |  |   |      

RESULTS OF OPERATIONS

Consolidated Results of Operations

The comparison of the Three and
Nine Months Ended September 30, 2009 to the Three and Nine Months Ended September 30, 2008 is as follows:



|                                                                                      |  |                                |         |   |                                         |   |         |                                   |  |   |                                |   |  |         |         |   |  |     |   
|------------------------------------------------------------------------------------- |  | ------------------------------ | ------- | - | --------------------------------------- | - | ------- | --------------------------------- |  | - | ------------------------------ | - |  | ------- | ------- | - |  | --- | --
|(In thousands)                                                                        |  | Three MonthsEndedSeptember 30, |         |   | Period fromJuly 31 throughSeptember 30, |   |         | Period fromJuly 1 throughJuly 30, |  |   | Three MonthsEndedSeptember 30, |   |  |         |        
|                                                                                      |  | 2009Post-Merger                |         |   | 2008Post-Merger                         |   |         | 2008Pre-Merger                    |  |   | 2008Combined                   |   |  | %Change |        
|Revenue                                                                               |  | $                              | 660,622 |   |                                         | $ | 541,699 |                                   |  | $ | 271,676                        |   |  | $       | 813,375 |   |  | (19 | %)
|Operating expenses:                                                                   |  |                                |         |   |                                         |   |         |                                   |  |   |                                |   |  |         |         |   |  |     |   
|Direct operating expenses (excludes depreciation and amortization)                    |  |                                | 398,766 |   |                                         |   | 304,763 |                                   |  |   | 158,354                        |   |  |         | 463,117 |   |  | (14 | %)
|Selling, general and administrative expenses (excludes depreciation and amortization) |  |                                | 108,824 |   |                                         |   | 93,175  |                                   |  |   | 49,202                         |   |  |         | 142,377 |   |  | (24 | %)
|Depreciation and amortization                                                         |  |                                | 111,053 |   |                                         |   | 81,015  |                                   |  |   | 37,783                         |   |  |         | 118,798 |   |  | (7  | %)
|Corporate expenses                                                                    |  |                                | 15,547  |   |                                         |   | 11,231  |                                   |  |   | 5,311                          |   |  |         | 16,542  |   |  | (6  | %)
|Other operating income - net                                                          |  |                                | 1,160   |   |                                         |   | 1,528   |                                   |  |   | 2,506                          |   |  |         | 4,034   |   |  |     |   
|                                                                                      |  |                                |         |   |                                         |   |         |                                   |  |   |                                |   |  |         |         |   |  |     |   
|Operating income                                                                      |  |                                | 27,592  |   |                                         |   | 53,043  |                                   |  |   | 23,532                         |   |  |         | 76,575  |   |  | (64 | %)
|Interest expense on debt with Clear Channel Communications                            |  |                                | 36,558  |   |                                         |   | 29,440  |                                   |  |   | 14,508                         |   |  |         | 43,948  |   |  |     |   
|Interest expense                                                                      |  |                                | 1,350   |   |                                         |   | 966     |                                   |  |   | 504                            |   |  |         | 1,470   |   |  |     |   
|Interest income on Due from Clear Channel Communications                              |  |                                | 133     |   |                                         |   | 766     |                                   |  |   | 430                            |   |  |         | 1,196   |   |  |     |   
|Loss on marketable securities                                                         |  |                                | (11,315 | ) |                                         |   |        |                                   |  |   |                               |   |  |         |        |   |  |     |   
|Equity in loss of nonconsolidated affiliates                                          |  |                                | (2,046  | ) |                                         |   | (947    | )                                 |  |   | (8,867                         | ) |  |         | (9,814  | ) |  |     |   
|Other income (expense) - net                                                          |  |                                | 492     |   |                                         |   | (977    | )                                 |  |   | 3,067                          |   |  |         | 2,090   |   |  |     |   
|                                                                                      |  |                                |         |   |                                         |   |         |                                   |  |   |                                |   |  |         |         |   |  |     |   
|Income (loss) before income taxes                                                     |  |                                | (23,052 | ) |                                         |   | 21,479  |                                   |  |   | 3,150                          |   |  |         | 24,629  |   |  |     |   
|Income tax benefit (expense):                                                         |  |                                |         |   |                                         |   |         |                                   |  |   |                                |   |  |         |         |   |  |     |   
|Current                                                                               |  |                                | (13,025 | ) |                                         |   | (5,032  | )                                 |  |   | (4,808                         | ) |  |         | (9,840  | ) |  |     |   
|Deferred                                                                              |  |                                | 2,026   |   |                                         |   | (82     | )                                 |  |   | 1,119                          |   |  |         | 1,037   |   |  |     |   
|                                                                                      |  |                                |         |   |                                         |   |         |                                   |  |   |                                |   |  |         |         |   |  |     |   
|Income tax expense                                                                    |  |                                | (10,999 | ) |                                         |   | (5,114  | )                                 |  |   | (3,689                         | ) |  |         | (8,803  | ) |  |     |   
|                                                                                      |  |                                |         |   |                                         |   |         |                                   |  |   |                                |   |  |         |         |   |  |     |   
|Consolidated net income (loss)                                                        |  | $                              | (34,051 | ) |                                         | $ | 16,365  |                                   |  | $ | (539                           | ) |  | $       | 15,826  |   |  |     |   
|Amount attributable to noncontrolling interest                                        |  |                                | 325     |   |                                         |   | 5,551   |                                   |  |   | 1,160                          |   |  |         | 6,711   |   |  |     |   
|                                                                                      |  |                                |         |   |                                         |   |         |                                   |  |   |                                |   |  |         |         |   |  |     |   
|Net income (loss) attributable to the Company                                         |  | $                              | (34,376 | ) |                                         | $ | 10,814  |                                   |  | $ | (1,699                         | ) |  | $       | 9,115   |   |  |     |   
|                                                                                      |  |                                |         |   |                                         |   |         |                                   |  |   |                                |   |  |         |         |   |  |     |   



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|                                                                                      |  |                               |           |   |                                         |   |         |                                      |  |   |                               |   |  |         |           |   |  |      |   
|------------------------------------------------------------------------------------- |  | ----------------------------- | --------- | - | --------------------------------------- | - | ------- | ------------------------------------ |  | - | ----------------------------- | - |  | ------- | --------- | - |  | ---- | --
|(In thousands)                                                                        |  | Nine MonthsEndedSeptember 30, |           |   | Period fromJuly 31 throughSeptember 30, |   |         | Period fromJanuary 1 throughJuly 30, |  |   | Nine MonthsEndedSeptember 30, |   |  |         |          
|                                                                                      |  | 2009Post-Merger               |           |   | 2008Post-Merger                         |   |         | 2008Pre-Merger                       |  |   | 2008Combined                  |   |  | %Change |          
|Revenue                                                                               |  | $                             | 1,934,955 |   |                                         | $ | 541,699 |                                      |  | $ | 1,962,063                     |   |  | $       | 2,503,762 |   |  | (23  | %)
|Operating expenses:                                                                   |  |                               |           |   |                                         |   |         |                                      |  |   |                               |   |  |         |           |   |  |      |   
|Direct operating expenses (excludes depreciation and amortization)                    |  |                               | 1,170,683 |   |                                         |   | 304,763 |                                      |  |   | 1,119,432                     |   |  |         | 1,424,195 |   |  | (18  | %)
|Selling, general and administrative expenses (excludes depreciation and amortization) |  |                               | 347,930   |   |                                         |   | 93,175  |                                      |  |   | 344,846                       |   |  |         | 438,021   |   |  | (21  | %)
|Depreciation and amortization                                                         |  |                               | 327,769   |   |                                         |   | 81,015  |                                      |  |   | 247,637                       |   |  |         | 328,652   |   |  | 0    | % 
|Corporate expenses                                                                    |  |                               | 45,446    |   |                                         |   | 11,231  |                                      |  |   | 39,364                        |   |  |         | 50,595    |   |  | (10  | %)
|Impairment charge                                                                     |  |                               | 812,390   |   |                                         |   |        |                                      |  |   |                              |   |  |         |          |   |  |      |   
|Other operating income - net                                                          |  |                               | 10,125    |   |                                         |   | 1,528   |                                      |  |   | 10,978                        |   |  |         | 12,506    |   |  |      |   
|                                                                                      |  |                               |           |   |                                         |   |         |                                      |  |   |                               |   |  |         |           |   |  |      |   
|Operating income (loss)                                                               |  |                               | (759,138  | ) |                                         |   | 53,043  |                                      |  |   | 221,762                       |   |  |         | 274,805   |   |  | (376 | %)
|Interest expense on debt with Clear Channel Communications                            |  |                               | 110,368   |   |                                         |   | 29,440  |                                      |  |   | 87,464                        |   |  |         | 116,904   |   |  |      |   
|Interest expense                                                                      |  |                               | 4,624     |   |                                         |   | 966     |                                      |  |   | 3,913                         |   |  |         | 4,879     |   |  |      |   
|Interest income on Due from Clear Channel Communications                              |  |                               | 358       |   |                                         |   | 766     |                                      |  |   | 2,590                         |   |  |         | 3,356     |   |  |      |   
|Loss on marketable securities                                                         |  |                               | (11,315   | ) |                                         |   |        |                                      |  |   |                              |   |  |         |          |   |  |      |   
|Equity in earnings (loss) of nonconsolidated affiliates                               |  |                               | (26,094   | ) |                                         |   | (947    | )                                    |  |   | 70,842                        |   |  |         | 69,895    |   |  |      |   
|Other income (expense) - net                                                          |  |                               | (5,288    | ) |                                         |   | (977    | )                                    |  |   | 13,365                        |   |  |         | 12,388    |   |  |      |   
|                                                                                      |  |                               |           |   |                                         |   |         |                                      |  |   |                               |   |  |         |           |   |  |      |   
|Income (loss) before income taxes                                                     |  |                               | (916,469  | ) |                                         |   | 21,479  |                                      |  |   | 217,182                       |   |  |         | 238,661   |   |  |      |   
|Income tax benefit (expense):                                                         |  |                               |           |   |                                         |   |         |                                      |  |   |                               |   |  |         |           |   |  |      |   
|Current                                                                               |  |                               | (26,175   | ) |                                         |   | (5,032  | )                                    |  |   | (30,171                       | ) |  |         | (35,203   | ) |  |      |   
|Deferred                                                                              |  |                               | 127,877   |   |                                         |   | (82     | )                                    |  |   | (21,405                       | ) |  |         | (21,487   | ) |  |      |   
|                                                                                      |  |                               |           |   |                                         |   |         |                                      |  |   |                               |   |  |         |           |   |  |      |   
|Income tax benefit (expense)                                                          |  |                               | 101,702   |   |                                         |   | (5,114  | )                                    |  |   | (51,576                       | ) |  |         | (56,690   | ) |  |      |   
|                                                                                      |  |                               |           |   |                                         |   |         |                                      |  |   |                               |   |  |         |           |   |  |      |   
|Consolidated net income (loss)                                                        |  | $                             | (814,767  | ) |                                         | $ | 16,365  |                                      |  | $ | 165,606                       |   |  | $       | 181,971   |   |  |      |   
|Amount attributable to noncontrolling interest                                        |  |                               | (3,413    | ) |                                         |   | 5,551   |                                      |  |   | (1,948                        | ) |  |         | 3,603     |   |  |      |   
|                                                                                      |  |                               |           |   |                                         |   |         |                                      |  |   |                               |   |  |         |           |   |  |      |   
|Net income (loss) attributable to the Company                                         |  | $                             | (811,354  | ) |                                         | $ | 10,814  |                                      |  | $ | 167,554                       |   |  | $       | 178,368   |   |  |      |   
|                                                                                      |  |                               |           |   |                                         |   |         |                                      |  |   |                               |   |  |         |           |   |  |      |   

Consolidated Revenue

Our consolidated revenue decreased $152.8 million during the third quarter of 2009 as compared to the third quarter of 2008. Our
International outdoor revenue declined $95.6 million, including the $11.1 million positive impact from movements in foreign exchange. Our Americas outdoor revenue declined $57.2 million primarily from a decline in bulletin, poster and airport
revenue.

Our consolidated revenue decreased $568.8 million during the first nine months of 2009 as compared to the same
period of 2008. Our International revenue decreased $379.0 million, with approximately $108.7 million from movements in foreign exchange. Our Americas revenue decreased $189.8 million primarily from a decline in bulletin, poster and airport revenue.

Consolidated Direct Operating Expenses

Our consolidated direct operating expenses decreased $64.4 million during the third quarter of 2009 as compared to the third quarter of 2008. Direct operating expenses in the third quarter of 2009 include
$0.5 million related to the restructuring program. Our International segment contributed $48.7 million of the overall decrease, which includes an increase of $8.4 million related to movements in foreign exchange. Our Americas direct operating
expenses decreased $15.6 million primarily driven by decreased site-lease expenses.



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Our consolidated direct operating expenses decreased $253.5 million during the first nine
months of 2009 as compared to the same period of 2008. Direct operating expenses in the first nine months of 2009 include $13.5 million related to the restructuring program. Our International segment contributed $214.3 million of the overall
decrease, of which $76.9 million related to movements in foreign exchange and the remainder of the decrease was driven by a decline in site-lease expenses. Our Americas direct operating expenses decreased $39.2 million primarily driven by decreased
site-lease expenses.

Consolidated Selling, General and Administrative Expenses

Our SG&A expenses decreased $33.6 million during the third quarter of 2009 as compared to the same period of 2008. Our International
SG&A expenses decreased $21.4 million primarily attributable to a decline in compensation and administrative expenses. SG&A expenses decreased $12.2 million in our Americas segment, primarily related to a decline in commission expense.

Our SG&A expenses decreased $90.1 million during the first nine months of 2009 as compared to the same period of 2008.
Our International outdoor SG&A expenses decreased $59.7 million primarily attributable to $21.7 million from movements in foreign exchange. SG&A expenses decreased $30.4 million in our Americas outdoor segment primarily related to a decline
in commission expenses.

Depreciation and Amortization

Depreciation and amortization decreased $7.7 million during the three months ended September 30, 2009 as compared to the same period of
2008. The decline was primarily attributable to purchase accounting adjustments offset by movements in foreign exchange.

Depreciation and amortization decreased $0.9 million during the nine months ended September 30, 2009 as compared to the same period of 2008. Increases from the fair value adjustments to acquired assets were partially offset by foreign
exchange movements.

Corporate Expenses

Corporate expenses decreased $1.0 million and $5.1 million during the three and nine months ended September 30, 2009, respectively, as compared to the same periods of 2008. Increases related to the
restructuring program of $0.7 million and $3.6 million recorded during the three and nine months ended September 30, 2009, respectively, were offset by declines related to foreign exchange movements and decreased legal expenses.

Impairment Charge

The global economic downturn has adversely affected advertising revenues across our businesses in recent months. As discussed above, we performed an impairment test in the second quarter of 2009 and recognized a non-cash impairment
charge to our indefinite-lived intangible assets and goodwill of approximately $812.4 million.

Other Operating Income  Net

Other operating income  net for the nine months ended September 30, 2009 was $10.1 million and primarily
relates to a gain of $4.4 million on the sale of International assets and a gain of $3.7 million on the sale of Americas assets.

The $4.0 million gain for the three months ended September 30, 2008 consists of a $1.7 million gain on the sale of International street furniture and miscellaneous other items. During the first nine months of 2008, we recorded a $4.0
million gain on the sale of an office building in France and a $2.6 million gain on the exchange of Americas assets, in addition to the $1.7 million gain recorded in the third quarter 2008 as discussed above.

Interest Expense  Net (Including Interest on Debt with Clear Channel Communications)

Interest expense decreased $6.4 million and $3.8 million during the three and nine months ended September 30, 2009, respectively, as
compared to the same periods of 2008. The decline was due to a lower weighted average cost of debt of Clear Channel Communications during 2009.

Loss on Marketable Securities

The loss on marketable securities of $11.3 million during the three and
nine months ended September 30, 2009, relates to an impairment to certain available-for-sale securities. The fair value of the available-for-sale securities was below cost for the nine months ended September 30, 2009. As a result, we
considered the guidance in ASC 320-10-S99 and reviewed the length of the time and the extent to which the market value was less than cost and the financial condition and near-term prospects of the issuer. After



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this assessment, we concluded that the impairment was other than temporary and recorded an $11.3 million non-cash impairment charge to our investment in Independent News & Media PLC
(INM).

Equity in Earnings (Loss) of Nonconsolidated Affiliates

Equity in loss of nonconsolidated affiliates of $26.1 million for the nine months ended September 30, 2009 primarily relates to a $19.7
million impairment of equity investments in our International segment.

Included in equity in earnings of nonconsolidated
affiliates in the three and nine months ended September 30, 2008 is a $9.0 million impairment charge to one of our International equity method investments recorded during the third quarter 2008. Included in equity in earnings for the nine
months ended September 30, 2008 is a $75.6 million gain on the sale of Clear Channel Communications 50% interest in Clear Channel Independent, a South African outdoor advertising company.

Other Income (Expense)  Net

Other income (expense)  net recorded in the three and nine months ended September 30, 2009 primarily relates to foreign exchange transaction gains/losses on short-term intercompany accounts.

Income Taxes

Three Months

Current tax expense for the three months ended September 30, 2009 increased $3.2 million
compared to the same period of 2008, primarily due the fact that we did not record tax benefits on net losses generated in the current period. Due to uncertainty on future taxable income and limitations on net operating loss carryback claims
allowed, the Company cannot realize deferred tax assets which arose in the three and nine months ended September 30, 2009. In addition, during the three months ended September 30, 2008, we recorded current tax benefits due to favorable
settlements of certain tax return examinations. The effective tax rate for the three months ended September 30, 2009 was (47.7%) as compared to 35.7% for the same period of 2008, primarily due to the fact that we did not record tax
benefits on net losses generated in the current period.

Nine Months

Current tax expense for the nine months ended September 30, 2009 decreased $9.0 million compared to the same period of 2008 primarily
due to a decrease in income (loss) before income taxes of $342.7 million, before considering the impairment charge of $812.4 million recorded during the second quarter of 2009. However, we recorded a valuation allowance of $27.6 million during the
nine months ended September 30, 2009 as a result of our inability to record tax benefits on net losses generated in the current period. Due to the uncertainty of the future taxable income and limitations on net operating loss carryback claims
allowed, we cannot realize tax assets which arose in the nine months ended September 30, 2009. Pursuant to the provisions of ASC 740-10-30, deferred tax valuation allowances are required on those tax assets. The effective tax rate for the nine
months ended September 30, 2009 decreased to 11.1% as compared to 23.8% for the same period of 2008, primarily due to the non-cash impairment charge on goodwill that is not deductible for tax purposes.

Deferred tax benefits of $127.9 million were recorded for the nine months ended September 30, 2009 as compared to deferred tax expense
of $21.5 million for the same period of 2008, primarily due to deferred tax benefits of $143.6 million recorded in the second quarter of 2009 related to the impairment of certain indefinite-lived intangibles.

Americas Results of Operations



|                                             |  |                                 |         |              |   |         |                                |     |                 |  |              |         |         |   |           |  |     |   
|-------------------------------------------- |  | ------------------------------- | ------- | ------------ | - | ------- | ------------------------------ | --- | --------------- |  | ------------ | ------- | ------- | - | --------- |  | --- | --
|                                             |  | Three Months EndedSeptember 30, |         |              |   |         | Nine Months EndedSeptember 30, |     |                 | 
|(In thousands)                               |  | 2009Post-merger                 |         | 2008Combined |   | %Change |                                |     | 2009Post-merger |  | 2008Combined |         | %Change |  
|Revenue                                      |  | $                               | 312,537 |              | $ | 369,730 |                                | (15 | %)              |  | $            | 898,277 |         | $ | 1,088,070 |  | (17 | %)
|Direct operating expenses                    |  |                                 | 147,250 |              |   | 162,868 |                                | (10 | %)              |  |              | 440,885 |         |   | 480,133   |  | (8  | %)
|Selling, general and administrative expenses |  |                                 | 47,602  |              |   | 59,787  |                                | (20 | %)              |  |              | 147,839 |         |   | 178,219   |  | (17 | %)
|Depreciation and amortization                |  |                                 | 54,102  |              |   | 55,867  |                                | (3  | %)              |  |              | 158,612 |         |   | 155,239   |  | 2   | % 
|                                             |  |                                 |         |              |   |         |                                |     |                 |  |              |         |         |   |           |  |     |   
|Operating income                             |  | $                               | 63,583  |              | $ | 91,208  |                                | (30 | %)              |  | $            | 150,941 |         | $ | 274,479   |  | (45 | %)
|                                             |  |                                 |         |              |   |         |                                |     |                 |  |              |         |         |   |           |  |     |   



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Three Months

Our Americas revenues were impacted by weak demand for local and national advertising across most markets. Revenue declined approximately $57.2 million during the third quarter of 2009 compared to the
same period of 2008 driven by a decline in bulletin, poster and airport revenues. The decline in bulletin, poster and airport revenues was driven primarily by a decline in rate compared to the third quarter of 2008.

Direct operating expenses decreased $15.6 million during the third quarter of 2009 compared to the same period of 2008 primarily from a
$10.8 million decrease in site-lease expenses associated with cost savings from our restructuring program and the decline in revenues. This decrease was partially offset by $2.0 million related to the restructuring program. SG&A expenses
decreased $12.2 million during the third quarter of 2009 compared to the same period of 2008 primarily from a $2.8 million decline in commissions and a $3.0 million decline in administrative expenses.

Depreciation and amortization remained relatively flat during the third quarter of 2009 compared to the same period of 2008.

Nine Months

Revenue
declined approximately $189.8 million during the nine months ended September 30, 2009 compared to the same period of 2008 driven by a decline in bulletin, poster and airport revenues. The decline in bulletin, poster and airport revenues was
driven primarily by a decline in rate compared to the first nine months of 2008.

Direct operating expenses decreased $39.2
million during the first nine months of 2009 compared to the same period of 2008 primarily from a $29.3 million decrease in site-lease expenses associated with cost savings from our restructuring program and the decline in revenues. This decrease
was partially offset by $6.5 million related to the restructuring program. SG&A expenses decreased $30.4 million during the first nine months of 2009 compared to the same period of 2008 primarily from a $9.6 million decline in commissions and a
$9.1 million decline in administrative expenses.

Depreciation and amortization increased $3.4 million primarily due to a
$15.2 million increase in accelerated depreciation on the removal of various structures, partially offset by a $6.9 million adjustment to amortization related to a change in the preliminary fair value adjustment of transit and street furniture
contracts.

International Results of Operations



|                                             |  |                                 |         |   |              |   |         |                                |  |      |                 |  |   |              |   |         |   |           |  |      |   
|-------------------------------------------- |  | ------------------------------- | ------- | - | ------------ | - | ------- | ------------------------------ |  | ---- | --------------- |  | - | ------------ | - | ------- | - | --------- |  | ---- | --
|                                             |  | Three Months EndedSeptember 30, |         |   |              |   |         | Nine Months EndedSeptember 30, |  |      |                
|(In thousands)                               |  | 2009Post-merger                 |         |   | 2008Combined |   |         | %Change                        |  |      | 2009Post-merger |  |   | 2008Combined |   | %Change |  
|Revenue                                      |  | $                               | 348,085 |   |              | $ | 443,645 |                                |  | (22  | %)              |  | $ | 1,036,678    |   |         | $ | 1,415,692 |  | (27  | %)
|Direct operating expenses                    |  |                                 | 251,516 |   |              |   | 300,249 |                                |  | (16  | %)              |  |   | 729,798      |   |         |   | 944,062   |  | (23  | %)
|Selling, general and administrative expenses |  |                                 | 61,222  |   |              |   | 82,590  |                                |  | (26  | %)              |  |   | 200,091      |   |         |   | 259,802   |  | (23  | %)
|Depreciation and amortization                |  |                                 | 56,951  |   |              |   | 62,931  |                                |  | (10  | %)              |  |   | 169,157      |   |         |   | 173,413   |  | (2   | %)
|                                             |  |                                 |         |   |              |   |         |                                |  |      |                 |  |   |              |   |         |   |           |  |      |   
|Operating income (loss)                      |  | $                               | (21,604 | ) |              | $ | (2,125  | )                              |  | (917 | %)              |  | $ | (62,368      | ) |         | $ | 38,415    |  | (262 | %)
|                                             |  |                                 |         |   |              |   |         |                                |  |      |                 |  |   |              |   |         |   |           |  |      |   

Three Months

Revenue decreased approximately $95.6 million during the third quarter of 2009 compared to the same period of 2008, including the positive impact of foreign exchange of $11.1 million. The revenue decline
occurred across most countries and was primarily driven by a decline in rate.

Direct operating expenses decreased $48.7
million primarily from a $23.9 million decline due to the impact of cost savings from our restructuring program and the decline in revenues. The decrease was partially offset by an increase of $8.4 million from movements in foreign exchange.
SG&A expenses decreased $21.4 million primarily from $10.9 million related to a decline in compensation expense and a $3.5 million decrease in administrative expenses. The decreases were partially offset by $2.1 million related to movements in
foreign exchange.

Nine Months

Revenue decreased approximately $379.0 million during the nine months ended September 30, 2009 compared to the same period of 2008, including the negative impact of foreign exchange of $108.7
million. The revenue decline occurred across most countries, with the most significant decline in France of $61.8 million primarily from the loss of a contract for advertising on railway



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land. Revenues in Italy and the U.K. declined $23.0 million and $22.4 million, respectively, due to challenging advertising markets resulting in a decline in rate.

Direct operating expenses decreased $214.3 million primarily from a decrease of $76.9 million from movements in foreign exchange. The
remaining decline was primarily attributable to a $76.1 million decline in site-lease expenses partially as a result of the loss of the rail contract discussed above. SG&A expenses decreased $59.7 million primarily from $21.7 million related to
movements in foreign exchange, $24.1 million related to a decline in compensation expense and $13.2 million related to a decrease in administrative expenses.

Reconciliation of Segment Operating Income (Loss)



|                                     |  |                                 |         |   |                                |   |         |                 |  |   |              |   |  |   |         |  
|------------------------------------ |  | ------------------------------- | ------- | - | ------------------------------ | - | ------- | --------------- |  | - | ------------ | - |  | - | ------- | -
|                                     |  | Three Months EndedSeptember 30, |         |   | Nine Months EndedSeptember 30, |  
|(In thousands)                       |  | 2009Post-merger                 |         |   | 2008Combined                   |   |         | 2009Post-merger |  |   | 2008Combined |  
|Americas                             |  | $                               | 63,583  |   |                                | $ | 91,208  |                 |  | $ | 150,941      |   |  | $ | 274,479 |  
|International                        |  |                                 | (21,604 | ) |                                |   | (2,125  | )               |  |   | (62,368      | ) |  |   | 38,415  |  
|Corporate expenses                   |  |                                 | (15,547 | ) |                                |   | (16,542 | )               |  |   | (45,446      | ) |  |   | (50,595 | )
|Impairment charge                    |  |                                 |        |   |                                |   |        |                 |  |   | (812,390     | ) |  |   |        |  
|Other operating income  net         |  |                                 | 1,160   |   |                                |   | 4,034   |                 |  |   | 10,125       |   |  |   | 12,506  |  
|                                     |  |                                 |         |   |                                |   |         |                 |  |   |              |   |  |   |         |  
|Consolidated operating income (loss) |  | $                               | 27,592  |   |                                | $ | 76,575  |                 |  | $ | (759,138     | ) |  | $ | 274,805 |  
|                                     |  |                                 |         |   |                                |   |         |                 |  |   |              |   |  |   |         |  

LIQUIDITY AND CAPITAL RESOURCES

Clear Channel Communications Merger

Clear Channel
Communications capitalization, liquidity and capital resources substantially changed due to the consummation of its merger on July 30, 2008. Upon the closing of the merger, Clear Channel Communications incurred additional debt and became
highly leveraged. We are not a borrower under Clear Channel Communications credit agreements other than for direct borrowings by certain of our International subsidiaries under the $150.0 million sub-limit included in Clear Channel
Communications $2.0 billion revolving credit facility and we are not a guarantor of Clear Channel Communications debt. As of September 30, 2009, the outstanding balance on the sub-limit was approximately $150.0 million of which
$30.0 million was drawn by us and the remaining amount drawn by Clear Channel Communications. The obligations of these International subsidiaries that are borrowers under the revolving credit facility are guaranteed by certain of our material
wholly-owned subsidiaries, and secured by substantially all of the assets of such borrowers and guarantors, subject to permitted liens and other exceptions.

Our Company and our consolidated subsidiaries are restricted subsidiaries under Clear Channel Communications credit agreements and are therefore subject to various restrictions contained therein.
The interest rate we pay on our $2.5 billion promissory note is based on Clear Channel Communications weighted average cost of debt, which was impacted due to the consummation of Clear Channel Communications merger. As such, our future
interest expense would be effected by, among other events, another change in Clear Channel Communications capitalization, liquidity and capital resources. To the extent we cannot pass on our increased borrowing costs to our clients, our
profitability, and potentially our ability to raise capital, could be materially affected.

Under our Master Agreement with
Clear Channel Communications and the $2.5 billion note payable to Clear Channel Communications, we are limited in our indebtedness from third parties to no more than $400.0 million.

The interest rate on outstanding balances under the revolving credit facility is based upon LIBOR or, for Euro denominated borrowings,
EURIBOR, plus, in each case, a margin, which margin is generally higher than the margin under Clear Channel Communications credit facility terminated in connection with the merger. See the discussion below under Sources of Capital 
Credit Facility. A deterioration in the financial condition of Clear Channel Communications or borrowings by Clear Channel Communications under the $150.0 million sub-limit could also further increase our borrowing costs or impair our access
to capital markets because of our reliance on Clear Channel Communications for availability under this revolving credit facility.

Also, so long as Clear Channel Communications maintains a significant interest in us, pursuant to the Master Agreement between Clear Channel Communications and us, Clear Channel Communications will have the option to limit our ability to
incur debt or issue equity securities, which could adversely affect our ability to meet our liquidity needs.



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CC Media Holdings and Clear Channel Communications corporate credit and
issue-level ratings were downgraded on June 8, 2009 by Standard & Poors Ratings Services. CC Media Holdings and Clear Channel Communications corporate credit ratings were lowered from B- to
CCC, where they currently remain. The downgrade had no impact on the borrowing costs of certain of our International subsidiaries under the credit agreements discussed in more detail above.

We have a revolving promissory note issued by Clear Channel Communications to us in the amount of $529.0 million as of September 30,
2009 described more fully below. We are an unsecured creditor of Clear Channel Communications with respect to the revolving promissory note.

Cash Flows

The following table summarizes our historical cash flows:



|                            |  |                                |          |   |              |   |          |  
|--------------------------- |  | ------------------------------ | -------- | - | ------------ | - | -------- | -
|                            |  | Nine Months EndedSeptember 30, |         
|(In thousands)              |  | 2009Post-merger                |          |   | 2008Combined |  
|Cash provided by (used in): |  |                                |          |   |              |   |          |  
|Operating activities        |  | $                              | 269,882  |   |              | $ | 447,489  |  
|Investing activities        |  | $                              | (93,104  | ) |              | $ | (308,458 | )
|Financing activities        |  | $                              | (110,966 | ) |              | $ | (194,998 | )

Operating Activities

Net cash provided by operating activities of $269.9 million for the nine months ended September 30, 2009 reflects a consolidated net
loss of $814.8 million adjusted for non-cash impairment charges of $812.4 million related to goodwill and intangible assets and depreciation and amortization of $327.8 million. In addition, we recorded a $26.1 million loss in equity of
nonconsolidated affiliates primarily due to a $19.7 million impairment of equity investments in our International segment. Net cash provided by operating activities was partially offset by deferred taxes of $127.9 million.

Net cash provided by operating activities of $447.5 million for the nine months ended September 30, 2008 principally reflected net
income of $182.0 million and depreciation and amortization of $328.7 million. In addition, in 2008 we recorded a $75.6 million gain in equity in earnings of nonconsolidated affiliates related to the sale of our 50% interest in Clear Channel
Independent based on the fair value of the equity securities received as consideration.

Investing Activities

For the nine months ended September 30, 2009, we spent $58.1 million in our Americas segment for the purchase of
property, plant and equipment mostly related to the construction of new billboards. We spent $55.9 million in our International segment for the purchase of property, plant and equipment related to new billboard and street furniture contracts and
renewals of existing contracts. We also received proceeds of $5.5 million from the sale of International assets and $5.2 million from the sale of Americas assets.

Net cash used in investing activities of $308.5 million for the nine months ended September 30, 2008 mainly reflected capital expenditures of $237.9 million related to purchases of property, plant
and equipment and $104.8 million related to acquisitions of operating assets, partially offset by proceeds from the sale of other assets of $40.0 million.

Financing Activities

Net cash used in financing activities of $111.0
million for the nine months ended September 30, 2009 includes net transfers of cash to Clear Channel Communications of $86.3 million. The net transfers of cash to Clear Channel Communications represent the activity in the Due from/to
Clear Channel Communications account. This activity primarily relates to working capital and settlement of interest on the cash management notes and the $2.5 billion note payable to Clear Channel Communications. In addition, we purchased the
remaining 15% interest in our fully consolidated subsidiary, Paneles Napsa S.A., for $13.0 million, and acquired an additional 5% interest in our consolidated subsidiary, Clear Channel Jolly Pubblicita SPA, for $12.1 million.

Net cash used in financing activities of $195.0 million for the nine months ended September 30, 2008 reflected a net reduction in debt
of $100.2 million and net transfers of cash to Clear Channel Communications of $98.8 million. The net transfers of cash to Clear Channel Communications represent the activity in the Due from/to Clear Channel Communications account. This



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activity primarily relates to working capital and settlement of interest on the cash management notes and the $2.5 billion note payable to Clear Channel Communications.

Anticipated Cash Requirements

Our primary source of liquidity is cash flow from operations, which has been adversely affected by the global economic downturn. The risks associated with our businesses become more acute in periods
of a slowing economy or recession, which may be accompanied by a decrease in advertising. Expenditures by advertisers tend to be cyclical, reflecting overall economic conditions and budgeting and buying patterns. The global economic
downturn has resulted in a decline in advertising and marketing services among our customers, resulting in a decline in our advertising revenues across our businesses. This reduction in advertising revenues has had an adverse effect on our
revenue, profit margins, cash flow and liquidity. A continuation of the global economic downturn would continue to adversely impact our revenue, profit margins, cash flow and liquidity.

Another significant source of our liquidity is borrowings under the cash management notes with Clear Channel Communications. Clear
Channel Communications ability to meet its obligations with respect to the Due from Clear Channel Communications account and to lend under the cash management note depends on its working capital needs, debt service obligations and
its future operating performance and cash flow, which are in turn subject to prevailing economic conditions and other factors, many of which are beyond its control. The inability of Clear Channel Communications to meet its obligations with
respect to the Due from Clear Channel Communications account could have a material adverse effect on the Companys financial condition and on the Companys ability to meet its obligations. The cash management notes mature on
August 10, 2010. After such date, Clear Channel Communications will continue to provide day-to-day cash management services to us pursuant to the Corporate Services Agreement, whereby our bank accounts are swept daily into accounts of Clear
Channel Communications. The net balance as a result of these cash management services will continue to be reflected as Due from/to Clear Channel Communications on our balance sheet. See Debt with Clear Channel Communications under
Sources of Capital below for further discussion of the Due from/to Clear Channel Communications account.

Our $2.5 billion note to Clear Channel Communications matures on August 2, 2010. On June 2, 2009, we announced that we are actively pursuing alternatives to address the maturity of the $2.5 billion note to Clear Channel
Communications. The alternatives to refinance the $2.5 billion note to Clear Channel Communications may include the use of our cash flow and capital resources, seeking an extension of the maturity of the note, selling assets, seeking additional
equity capital, an offering of new senior or senior subordinated notes for cash, an exchange of new senior or subordinated notes for outstanding indebtedness or other transactions.

We believe that we will be successful in obtaining financing due to our long history of strong operating margins and free cash flow
generation through our portfolio of diversified products and geographically diverse markets. However, we also believe that a new financing would likely carry higher interest rates and may contain more restrictive terms than our current
agreements based on prevailing interest rates and current debt capital market conditions. Higher interest rates would reduce our capital available for investment and growth and terms may restrict, among other things, our ability to invest in
our business. The $2.5 billion note and Master Agreement with Clear Channel Communications include restrictive covenants that, among other things, restrict the Companys ability to incur additional indebtedness. Therefore, any refinancing
of the $2.5 billion note must be approved by our parent, Clear Channel Communications and there is no such assurance that we would receive such approval. The alternatives we are pursuing might be unsuccessful or inadequate in permitting us to meet
scheduled debt obligations. Additionally, in light of the current credit environment, we may be unable to restructure or refinance our obligations and obtain additional equity financing or sell assets on satisfactory terms or at all. As a
result, our inability to meet our debt obligations could cause us to default on those obligations. A default under any debt instrument could, in turn, result in defaults under other debt instruments. Any such defaults could materially
impair our financial condition, liquidity and results of operations.

We expect to be in compliance with the covenants
governing our indebtedness in 2009. However, our anticipated results are subject to significant uncertainty and there can be no assurance that actual results will be in compliance with the covenants. In addition, our ability to comply with the
covenants governing our indebtedness may be affected by events beyond our control, including prevailing economic, financial and industry conditions.

Furthermore, in its Quarterly Report on Form 10-Q filed with the SEC on November 9, 2009, CC Media Holdings, our indirect parent, stated that it expects to be in compliance with the covenants under
Clear Channel Communications senior secured credit facilities in 2009. CC Media Holdings similarly stated in such Quarterly Report that its anticipated results are also subject to significant uncertainty and there can be no assurance that
actual results will be in compliance with the covenants. Moreover, CC Media Holdings stated in such Quarterly Report that its ability to comply with the covenants in Clear Channel Communications financing agreements may be affected by events
beyond CC Media Holdings control, including prevailing economic, financial and industry conditions. As discussed therein, the breach of any covenants set forth in Clear Channel Communications financing agreements would result in a
default thereunder, and an event of default would permit the lenders under a defaulted financing



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agreement to declare all indebtedness thereunder to be due and payable prior to maturity. Moreover, as discussed therein, the lenders under the revolving credit facility under Clear Channel
Communications senior secured credit facilities would have the option to terminate their commitments to make further extensions of revolving credit thereunder. In addition, CC Media Holdings stated in such Quarterly Report that if CC Media
Holdings is unable to repay Clear Channel Communications obligations under any senior secured credit facilities or the receivables based credit facility, the lenders under such senior secured credit facilities or receivables based credit
facility could proceed against any assets that were pledged to secure such senior secured credit facilities or receivables based credit facility. Finally, CC Media Holdings stated in such Quarterly Report that a default or acceleration under any of
Clear Channel Communications financing agreements could cause a default under other obligations that are subject to cross-default and cross-acceleration provisions.

For so long as Clear Channel Communications maintains significant control over us, a deterioration in the financial condition of Clear Channel Communications could have the effect of increasing our
borrowing costs or impairing our access to capital markets. Neither the $2.5 billion term note payable to Clear Channel Communications nor the Due from Clear Channel Communications note contain in their terms a right of offset. As of
September 30, 2009, Clear Channel Communications had $1.4 billion recorded as Cash and cash equivalents on its consolidated balance sheets.

SOURCES OF CAPITAL

As of September 30, 2009 and December 31,
2008, we had the following debt outstanding, cash and cash equivalents and amounts due from Clear Channel Communications:



|                                                                                                                       |  |                   |         |                  |   |        
|---------------------------------------------------------------------------------------------------------------------- |  | ----------------- | ------- | ---------------- | - | -------
|(In millions)                                                                                                          |  | September 30,2009 |         | December 31,2008
|Credit facility ($150.0 million sub-limit within Clear Channel Communications $2.0 billion revolving credit
facility) |  | $                 | 30.0    |                  | $ | 30.0   
|Debt with Clear Channel Communications                                                                                 |  |                   | 2,500.0 |                  |   | 2,500.0
|Other debt                                                                                                             |  |                   | 81.2    |                  |   | 71.9   
|                                                                                                                       |  |                   |         |                  |   |        
|Total debt                                                                                                             |  |                   | 2,611.2 |                  |   | 2,601.9
|Less: Cash and cash equivalents                                                                                        |  |                   | 165.4   |                  |   | 94.8   
|Less: Due from Clear Channel Communications                                                                            |  |                   | 529.0   |                  |   | 431.6  
|                                                                                                                       |  |                   |         |                  |   |        
|                                                                                                                       |  | $                 | 1,916.8 |                  | $ | 2,075.5
|                                                                                                                       |  |                   |         |                  |   |        

The Company may from time to time repay its outstanding debt or seek to purchase its
outstanding equity securities. Such transactions, if any, will depend on prevailing market conditions, the Companys liquidity requirements, contractual restrictions and other factors.

Credit Facility ($150 million sub-limit within Clear Channel Communications $2.0 billion revolving credit facility)

In addition to net cash flows from operations, another source of liquidity is through borrowings under a $150.0 million sub-limit included in
Clear Channel Communications multicurrency $2.0 billion revolving credit facility with a maturity in July 2014. Certain of our International subsidiaries may borrow under the sub-limit to the extent Clear Channel Communications has not already
borrowed against this capacity and is in compliance with its covenants under the revolving credit facility. The obligations of these International subsidiaries that are borrowers under the revolving credit facility are guaranteed by certain of our
material wholly-owned subsidiaries, and secured by substantially all of the assets of such borrowers and guarantors, subject to permitted liens and other exceptions.

The interest rate on outstanding balances under the revolving credit facility is equal to an applicable margin plus, at Clear Channel Communications option, either (i) a base rate determined by
reference to the higher of (A) the prime lending rate publicly announced by the administrative agent and (B) the federal funds effective rate from time to time plus 0.50%, or (ii) a Eurocurrency rate determined by reference to the
costs of funds for deposits for the interest period relevant to such borrowing adjusted for certain additional costs. The applicable margin percentage is 2.40% in the case of base rate loans, and 3.40% in the case of Eurocurrency rate loans, subject
to downward adjustments based upon Clear Channel Communications leverage ratio. At September 30, 2009, the interest rate on borrowings under the revolving credit facility was 3.7%. At November 9, 2009, the outstanding balance on this
sub-limit was $30.0 million, and no amount was available for future borrowings, due to the fact that Clear Channel Communications has borrowed the remaining amount available under this facility.



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Debt with Clear Channel Communications

As part of the day-to-day cash management services provided by Clear Channel Communications, we maintain accounts that represent net amounts
due to or from Clear Channel Communications, which is recorded as Due from/to Clear Channel Communications on the consolidated balance sheet. The accounts represent the revolving promissory note issued by us to Clear Channel
Communications and the revolving promissory note issued by Clear Channel Communications to us in the face amount of $1.0 billion, or if more or less than such amount, the aggregate unpaid principal amount of all advances. Both of the promissory
notes mature on August 10, 2010. The accounts accrue interest and are generally payable on demand. Interest on the cash management note owed by us accrues on the daily net negative cash position based upon LIBOR plus a margin. Interest on the
cash management note owed by Clear Channel Communications accrues on the daily net positive cash position based upon the average one-month generic treasury bill rate. Included in the accounts are the net activities resulting from day-to-day cash
management services provided by Clear Channel Communications. As a part of these services, we maintain collection bank accounts swept daily into accounts of Clear Channel Communications. In return, Clear Channel Communications funds our controlled
disbursement accounts as checks or electronic payments are presented for payment. Our claim in relation to cash transferred from our concentration account is on an unsecured basis and is limited to the balance of the Due from Clear Channel
Communications account. If Clear Channel Communications were to become insolvent, we would be an unsecured creditor of Clear Channel Communications with respect to the revolving promissory note issued by Clear Channel Communications to us. At
September 30, 2009 and December 31, 2008, the asset recorded in Due from Clear Channel Communications on the consolidated balance sheet was $529.0 million and $431.6 million, respectively. At September 30, 2009, we had no
borrowings under the cash management note to Clear Channel Communications.

The net interest income for the three months ended
September 30, 2009 and 2008 was $0.1 million and $1.2 million, respectively. The net interest income for the nine months ended September 30, 2009 and 2008 was $0.4 million and $3.4 million, respectively. At September 30, 2009 and
2008, the interest rate on the Due from Clear Channel Communications account was 0.056% and 0.840%, respectively, which represents the average one-month generic treasury bill rate as described above.

Unlike the management of cash from our U.S. based operations, the amount of cash, if any, which is transferred from our foreign operations
to Clear Channel Communications is determined on a basis mutually agreeable to us and Clear Channel Communications, and not on a pre-determined basis. In arriving at such mutual agreement, the reasonably foreseeable cash needs of our foreign
operations are evaluated before a cash amount is considered as an excess or surplus amount for transfer to Clear Channel Communications.

We have a note in the original principal amount of $2.5 billion to Clear Channel Communications which matures on August 2, 2010 and may be prepaid in whole at any time, or in part from time to time.
The note accrues interest at a variable per annum rate equal to Clear Channel Communications weighted average cost of debt, calculated on a monthly basis. This note is mandatorily payable upon our change of control (as defined in the note)
and, subject to certain exceptions, all net proceeds from debt or equity raised by us must be used to prepay such note. At September 30, 2009, the interest rate on the $2.5 billion note was 5.7%.

Our working capital requirements and capital for general corporate purposes, including acquisitions and capital expenditures, may be
provided to us by Clear Channel Communications, in its sole discretion, pursuant to a cash management note issued by us to Clear Channel Communications. Without the opportunity to obtain financing from Clear Channel Communications, we may need to
obtain additional financing from banks, or through public offerings or private placements of debt, strategic relationships or other arrangements at some future date. As stated above, we may be unable to successfully obtain additional debt or equity
financing on satisfactory terms or at all.

As long as Clear Channel Communications maintains a significant interest in us,
pursuant to the Master Agreement between Clear Channel Communications and us, Clear Channel Communications will have the option to limit our ability to incur debt or issue equity securities, which could adversely affect our ability to meet our
liquidity needs. In addition, the $2.5 billion note requires us to prepay it in full upon a change of control (as defined in the note) and, upon our issuances of equity and incurrence of debt, subject to certain exceptions, to prepay the note in the
amount of net proceeds received from such events. Under the Master Agreement with Clear Channel Communications and the $2.5 billion note, we are limited in our borrowing from third parties to no more than $400.0 million (including borrowings under
the $150.0 million sub-limit of Clear Channel Communications $2.0 billion revolving credit facility). As a result of current borrowings and commitments, we were limited to approximately $139.4 million in additional external borrowings as of
September 30, 2009.

Other Debt

Other debt consists primarily of loans with international banks. At September 30, 2009, approximately $81.2 million was outstanding as other debt.



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Debt Covenants

The $2.5 billion note requires us to comply with various negative covenants, including restrictions on the following activities: incurring consolidated funded indebtedness (as defined in the note),
excluding intercompany indebtedness, in a principal amount in excess of $400.0 million at any one time outstanding; creating liens; making investments; entering into sale and leaseback transactions (as defined in the note), which when
aggregated with consolidated funded indebtedness secured by liens, will not exceed an amount equal to 10% of our total consolidated shareholders equity (as defined in the note) as shown on our most recently reported annual audited consolidated
balance sheet; disposing of all or substantially all of our assets; entering into mergers and consolidations; declaring or making dividends or other distributions; making certain repurchases of our equity; and entering into transactions with our
affiliates.

In addition, the note requires us to prepay it in full upon a change of control. The note defines a change of
control to occur when Clear Channel Communications ceases to control (i) directly or indirectly, more than 50% of the aggregate voting equity interests of us, our operating subsidiary or our respective successors or assigns, or (ii) the
ability to elect a majority of our Board of Directors, or the Board of Directors of our operating subsidiary or our respective successors or assigns. Upon our issuances of equity and incurrences of debt, subject to certain exceptions, we are also
required to prepay the note in the amount of the net proceeds received by us from such events.

Clear Channel
Communications senior secured credit facilities, of which the $2.0 billion revolving credit facility comprises a part, requires Clear Channel Communications to comply on a quarterly basis with a maximum consolidated senior secured net debt to
adjusted EBITDA (as calculated in accordance with the senior secured credit facilities) ratio (maximum of 9.5:1). This financial covenant becomes more restrictive over time beginning in the second quarter of 2013. In its Quarterly Report on Form
10-Q filed with the SEC on November 9, 2009, CC Media Holdings stated that Clear Channel Communications secured leverage ratio, defined as secured debt, net of cash, divided by the trailing 12-month consolidated EBITDA (as calculated in
accordance with the senior secured credit facilities) was 8.8:1 at September 30, 2009.

There are no significant
covenants or events of default contained in the revolving promissory note issued by Clear Channel Communications to us or the revolving promissory note issued by us to Clear Channel Communications.

At September 30, 2009, we were in compliance with all debt covenants.

Dispositions and Other

During the nine months ended
September 30, 2009, we sold international assets for $5.5 million resulting in a gain of $4.4 million. In addition, we sold assets for $5.2 million in the Americas and recorded a gain of $3.7 million in Other operating income 
net.

USES OF CAPITAL

Acquisitions and Other

During the nine months ended September 30, 2009, our Americas segment paid
$5.0 million primarily for the acquisition of land and buildings. In addition, during the first nine months of 2009, the Companys Americas segment purchased the remaining 15% interest in our fully consolidated subsidiary, Paneles Napsa
S.A., for $13.0 million. Our International segment also acquired an additional 5% interest in our consolidated subsidiary, Clear Channel Jolly Pubblicita SPA, for $12.1 million.



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Capital Expenditures

Our capital expenditures have consisted of the following:



|                           |  |                                 |       |      |   |      
|-------------------------- |  | ------------------------------- | ----- | ---- | - | -----
|(In millions)              |  | Nine Months Ended September 30,
|                           |  | 2009                            |       | 2008
|Non-revenue producing      |  | $                               | 27.8  |      | $ | 59.2 
|Revenue producing          |  |                                 | 86.2  |      |   | 178.7
|                           |  |                                 |       |      |   |      
|Total capital expenditures |  | $                               | 114.0 |      | $ | 237.9
|                           |  |                                 |       |      |   |      

We define non-revenue producing capital expenditures as those expenditures required
on a recurring basis. Revenue producing capital expenditures are discretionary capital investments for new revenue streams, similar to an acquisition.

Commitments, Contingencies and Guarantees

From time to time, we are involved in legal proceedings
arising in the ordinary course of business. Under our agreements with Clear Channel Communications, we have assumed and will indemnify Clear Channel Communications for liabilities related to our business. Other than as described in our Annual Report
on Form 10-K for the year ended December 31, 2008 and Note 3 of the Notes to the Consolidated Financial Statements in Item 1 of Part 1 of this Quarterly Report on Form 10-Q, we do not believe there is any litigation pending that would
have, individually or in the aggregate, a material adverse effect on our financial position, results of operations or cash flow.

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

Seasonality

Typically, both our Americas and International segments experience their lowest financial performance in the first quarter of the calendar
year, with International typically experiencing a loss from operations in this period. Our Americas segment typically experiences consistent performance in the remainder of our calendar year. Our International segment typically experiences its
strongest performance in the second and fourth quarters of our calendar year. We expect this trend to continue in the future.

Inflation

Inflation is a factor in the economies in which we do business and we continue to seek ways to mitigate its effect.
Although the exact impact of inflation is indeterminable, to the extent permitted by competition, we pass increased costs on to our customers by increasing our effective advertising rates over time.

MARKET RISK

We are exposed
to market risks arising from changes in market rates and prices, including movements in interest rates, equity security prices and foreign currency exchange rates.

Interest Rate Risk

We had approximately $2.6 billion total debt
outstanding as of September 30, 2009, of which $2.5 billion is debt with Clear Channel Communications. The debt with Clear Channel Communications accrues interest at a variable per annum rate equal to the weighted average cost of debt for Clear
Channel Communications, calculated on a monthly basis. Furthermore, in its Quarterly Report on Form 10-Q filed with the SEC on November 9, 2009 CC Media Holdings stated that 46% of its debt was variable based on market interest rates. Each 12.5
basis point increase or decrease in interest rates would have resulted in a corresponding increase or decrease in our interest expense and cash outlay for the nine months ended September 30, 2009 of approximately $1.2 million. This potential
increase or decrease is based on the simplified assumption that the level of floating rate debt remained constant as of September 30, 2009. An increase or decrease to interest rates is then assumed and applied to that floating rate debt balance
to determine the per annum effect. This potential increase or decrease does not include any adjustment for a change in the fixed rate debt of Clear Channel Communications, which currently constitutes 54% of its total debt.



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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 and comprehensive loss at September 30, 2009 by $2.2 million.

Foreign Currency Exchange Rate Risk

We have operations in countries
throughout the world. The financial results of our foreign operations are measured in their local currencies, except in the 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 operate. We believe we mitigate a small portion of our exposure to foreign currency fluctuations with a natural hedge through borrowings in
currencies other than the U.S. dollar. Our foreign operations reported a net loss of approximately $226.2 million for the nine months ended September 30, 2009. We estimate a 10% change in the value of the U.S. dollar relative to foreign
currencies would have changed our net loss for the nine months ended September 30, 2009, by approximately $22.6 million.

Our earnings are also affected by fluctuations in the value of the U.S. dollar as compared to foreign currencies as a result of our equity method investments in various countries. It is estimated that the result of a 10% fluctuation in the
value of the dollar relative to these foreign currencies at September 30, 2009 would change our equity in earnings of nonconsolidated affiliates by $2.6 million and would change our net loss by approximately $1.6 million for the nine months
ended September 30, 2009.

This analysis does not consider the implications such currency fluctuations could have on the
overall economic activity that could exist in such an environment in the United States or the foreign countries or on the results of operations of these foreign entities.

New Accounting Pronouncements

In August 2009, the FASB issued ASC
Update No. 2009-05, Measuring Liabilities at Fair Value. The update is to ASC Subtopic 820-10, Fair Value Measurements and Disclosures-Overall, for the fair value measurement of liabilities. The purpose of this update is to reduce
ambiguity in financial reporting when measuring the fair value of liabilities. The guidance provided in this update is effective for the first reporting period beginning after the date of issuance. We will adopt the amendment on October 1, 2009
and do not anticipate the adoption to have a material impact on our financial position or results of operations.

Statement of Financial Accounting Standards No. 168, The FASB Accounting Standards CodificationTMand the Hierarchy of Generally Accepted Accounting Principles,codified in ASC 105-10, was issued in June 2009. ASC 105-10 identifies the sources of accounting principles and the framework for selecting the principles used in the preparation of financial statements of nongovernmental entities that are
presented in conformity with GAAP in the United States. ASC 105-10 establishes the ASC as the source of authoritative GAAP recognized by the FASB to be applied by nongovernmental entities. Following this statement, the FASB will issue new standards
in the form of ASUs. ASC 105-10 is effective for financial statements issued for interim and annual periods ending after September 15, 2009. We adopted the provisions of ASC 105-10 on July 1, 2009.

Statement of Financial Accounting Standards No. 167, Amendments to FASB Interpretation No. 46(R)(Statement
No. 167), which is not yet codified, was issued in June 2009. Statement No. 167 shall be effective as of the beginning of each reporting entitys first annual reporting period that begins after November 15, 2009, for
interim periods within that first annual reporting period, and for interim and annual reporting periods thereafter. Earlier application is prohibited. Statement No. 167 amends Financial Accounting Standards Board Interpretation No. 46(R),
Consolidation of Variable Interest Entities, codified in ASC 810-10-25, to replace the quantitative-based risks and rewards calculation for determining which enterprise, if any, has a controlling financial interest in a variable interest
entity with an approach focused on identifying which enterprise has the power to direct the activities of a variable interest entity that most significantly impact the entitys economic performance and (1) the obligation to absorb losses
of the entity or (2) the right to receive benefits from the entity. An approach that is expected to be primarily qualitative will be more effective for identifying which enterprise has a controlling financial interest in a variable interest
entity. Statement No. 167 requires an additional reconsideration event when determining whether an entity is a variable interest entity when any changes in facts and circumstances occur such that the holders of the equity investment at risk, as
a group, lose the power from voting rights or similar rights of those investments to direct the activities of the entity that most significantly impact the entitys economic performance. It also requires ongoing assessments of whether an
enterprise is the primary beneficiary of a variable interest entity. These requirements will provide more relevant and timely information to users of financial statements. Statement No. 167 amends ASC 810-10-25 to require additional disclosures
about an enterprises involvement in variable interest entities, which will enhance the information provided to users of financial statements. We will adopt Statement No. 167 on January 1, 2010 and are currently evaluating the impact
of adoption.

Statement of Financial Accounting Standards No. 165, Subsequent Events,codified in ASC 855-10, was
issued in May 2009. The provisions of ASC 855-10 are effective for interim and annual periods ending after June 15, 2009 and are intended to establish general standards of accounting for and disclosure of events that occur after the balance
sheet date but before financial statements are



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issued or are available to be issued. It requires the disclosure of the date through which an entity has evaluated subsequent events and the basis for that datethat is, whether that date
represents the date the financial statements were issued or were available to be issued. This disclosure should alert all users of financial statements that an entity has not evaluated subsequent events after that date in the set of financial
statements being presented. In accordance with the provisions of ASC 855-10, we are currently evaluating subsequent events through the date the financial statements are issued.

Financial Accounting Standards Board Staff Position Emerging Issues Task Force 03-6-1, Determining Whether Instruments Granted in
Share-Based Payment Transactions are Participating Securities, codified in ASC 260-10-45, was issued in June 2008. ASC 260-10-45 clarifies that unvested share-based payment awards with a right to receive nonforfeitable dividends are
participating securities. Guidance is also provided on how to allocate earnings to participating securities and compute basic earnings per share using the two-class method. All prior-period earnings per share data presented shall be adjusted
retrospectively (including interim financial statements, summaries of earnings, and selected financial data) to conform with the provisions of ASC 260-10-45. We retrospectively adopted the provisions of ASC 260-10-45 on January 1, 2009. There
was no impact of adopting ASC 260-10-45 to previously reported earnings per share for the periods July 31 through September 30, 2008, July 1 through July 30, 2008, and January 1 through July 30, 2008.

Statement of Financial Accounting Standards No, 160, Noncontrolling Interests in Consolidated Financial Statements  an amendment
of ARB No.51, codified in ASC 810-10-45, was issued in December 2007 and clarifies the classification of noncontrolling interests in consolidated statements of financial position and the accounting for and reporting of transactions between
the reporting entity and holders of such noncontrolling interests. Under this guidance, noncontrolling interests are considered equity and should be reported as an element of consolidated equity, net income will encompass the total income of all
consolidated subsidiaries and there will be separate disclosure on the face of the income statement of the attribution of that income between the controlling and noncontrolling interests, and increases and decreases in the noncontrolling ownership
interest amount will be accounted for as equity transactions. The provisions of ASC 810-10-45 are effective for the first annual reporting period beginning on or after December 15, 2008, and earlier application is prohibited. Guidance is
required to be adopted prospectively, except for reclassifying noncontrolling interests to equity, separate from the parents shareholders equity, in the consolidated statement of financial position and recasting consolidated net income
(loss) to include net income (loss) attributable to both the controlling and noncontrolling interests, both of which are required to be adopted retrospectively. We adopted the provisions of ASC 810-10-45 on January 1, 2009, which resulted in a
reclassification of approximately $211.8 million of noncontrolling interests to shareholders equity.

Financial
Accounting Standards Board Staff Position No. FAS 157-4, Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly,codified in ASC
820-10, was issued in April 2009 and provides additional guidance for estimating fair value when the volume and level of activity for the asset or liability have significantly decreased. ASC 820-10 also includes guidance on identifying circumstances
that indicate a transaction is not orderly. This guidance is effective for interim and annual reporting periods ending after June 15, 2009, and shall be applied prospectively. Early adoption is permitted for periods ending after March 15,
2009. Earlier adoption for periods ending before March 15, 2009 is not permitted. We adopted the provisions of ASC 820-10 on April 1, 2009 with no material impact to our financial position or results of operations.

Financial Accounting Standards Board Staff Position No. FAS 115-2 and FAS 124-2, Recognition and Presentation of
Other-Than-Temporary Impairments,codified in ASC 320-10, was issued in April 2009 and amends the other-than-temporary impairment guidance in U.S. GAAP for debt securities to make the guidance more operational and to improve the
presentation and disclosure of other-than-temporary impairments on debt and equity securities in the financial statements. ASC 320-10 does not amend existing recognition and measurement guidance related to other-than-temporary impairments of equity
securities. This guidance is effective for interim and annual reporting periods ending after June 15, 2009, with early adoption permitted for periods ending after March 15, 2009. Earlier adoption for periods ending before March 15,
2009 is not permitted. We adopted the provisions of ASC 320-10 on April 1, 2009 with no material impact to our financial position or results of operations.

Financial Accounting Standards Board Staff Position No. FAS 141(R)-1, Accounting for Assets Acquired and Liabilities Assumed in a
Business Combination That Arise fromContingencies, codified in ASC 805-20, was issued in April 2009 and addresses application issues raised by preparers, auditors, and members of the legal profession on initial recognition and measurement,
subsequent measurement and accounting, and disclosure of assets and liabilities arising from contingencies in a business combination. This guidance is effective for assets or liabilities arising from contingencies in business combinations for which
the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. The impact of ASC 805-20 on accounting for contingencies in a business combination is dependent upon the nature of
future acquisitions.

Financial Accounting Standards Board Staff Position No. FAS 107-1 and APB 28-1, Interim Disclosures
about Fair Value of Financial Instruments,codified in ASC 825-10, was issued in April 2009. ASC 825-10 amends prior authoritative guidance to require disclosures about fair value of financial instruments for interim reporting periods of
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financial statements. The provisions of ASC 825-10 are effective for interim reporting periods ending after June 15, 2009, with early adoption permitted for periods ending after
March 15, 2009. We adopted the disclosure requirements of ASC 825-10 on April 1, 2009.

Financial Accounting
Standards Board Staff Position Emerging Issues Task Force 08-6, Equity Method Investment Accounting Considerations,codified in ASC 323-10-35 was issued in November 2008. ASC 323-10-35 clarifies the accounting for certain transactions and
impairment considerations involving equity method investments. This guidance is effective for fiscal years beginning on or after December 15, 2008, and interim periods within those fiscal years, and shall be applied prospectively. We adopted
the provisions of ASC 323-10-35 on January 1, 2009 with no material impact to our financial position or results of operations.

Risks Regarding Forward-Looking Statements

The Private Securities Litigation Reform Act of 1995
provides a safe harbor for forward-looking statements made by us or on our behalf. Except for the historical information, this report contains various forward-looking statements which represent our expectations or beliefs concerning future events,
including without limitation, the future levels of cash flow from operations and availability of capital resources and the terms thereof. Management believes that all statements expressing expectations and projections with respect to future matters,
including our ability to negotiate contracts having more favorable terms and the availability of capital resources, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. We caution that these
forward-looking statements involve a number of risks and uncertainties and are subject to many variables which could impact 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. We do not intend, nor do we undertake any duty, to update any
forward-looking statements.

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



| |  |  | risks associated with the global economic crisis and its impact on capital markets and liquidity;
| | - |  | -------------------------------------------------------------------------------------------------



| |  |  | the impact of the global economic downturn, which has adversely affected advertising revenues across our businesses and other general economic and
political conditions in the United States and in other countries in which we currently do business, including those resulting from recessions, political events and acts or threats of terrorism or military conflicts;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | our restructuring program may not be entirely successful;
| | - |  | ---------------------------------------------------------



| |  |  | the impact of the geopolitical environment;
| | - |  | -------------------------------------------



| |  |  | access to capital markets and borrowed indebtedness;
| | - |  | ----------------------------------------------------



| |  |  | shifts in population and other demographics;
| | - |  | --------------------------------------------



| |  |  | industry conditions, including competition;
| | - |  | -------------------------------------------



| |  |  | fluctuations in operating costs;
| | - |  | --------------------------------



| |  |  | technological changes and innovations;
| | - |  | --------------------------------------



| |  |  | changes in labor conditions;
| | - |  | ----------------------------



| |  |  | fluctuations in exchange rates and currency values;
| | - |  | ---------------------------------------------------



| |  |  | capital expenditure requirements;
| | - |  | ---------------------------------



| |  |  | the outcome of pending and future litigation settlements;
| | - |  | ---------------------------------------------------------



| |  |  | legislative or regulatory requirements;
| | - |  | ---------------------------------------



| |  |  | changes in interest rates;
| | - |  | --------------------------



| |  |  | the effect of leverage on our financial position and earnings;
| | - |  | --------------------------------------------------------------



| |  |  | taxes;
| | - |  | ------



| |  |  | our ability to integrate the operations of recently acquired companies;
| | - |  | -----------------------------------------------------------------------



| |  |  | the impact of the above and similar factors on Clear Channel Communications, our primary direct or indirect external source of capital; and
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | certain other factors set forth in our filings with the SEC, including our Annual Report on Form 10-K for the year ended December 31, 2008.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------

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



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|Item 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|------- | ----------------------------------------------------------

Required information is presented under MARKET RISK within Item 2 of this Part I.



|Item 4. | CONTROLS AND PROCEDURES
|------- | -----------------------

The Company, under the supervision and with the participation of management, including our principal executive and principal financial officers evaluated the effectiveness of the Companys disclosure controls and procedures (as defined
in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the Exchange Act)) as of the end of the period covered by this report. Based on that evaluation, the principal executive and principal financial
officers concluded that the Companys disclosure controls and procedures were effective as of September 30, 2009 to ensure that information required to be disclosed in reports that we file or submit under the Exchange Act, is
(i) recorded, processed, summarized and reported within the time periods specified in the SECs rules and forms, and (ii) accumulated and communicated to management, including our principal executive and principal financial officers,
as appropriate, to allow timely decisions regarding required disclosure.

There were no changes in our internal control over
financial reporting that occurred during the three months ended September 30, 2009 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.



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Part II  OTHER INFORMATION



|Item 1. | Legal Proceedings
|------- | -----------------

We are
currently involved in certain legal proceedings arising in the ordinary course of business and, as required, have accrued an estimate of the probable costs for the resolution of these claims. These estimates have been developed in consultation with
counsel and are based upon an analysis of potential results, assuming a combination of litigation and settlement strategies. It is possible, however, that future results of operations for any particular period could be materially affected by changes
in our assumptions or the effectiveness of our strategies related to these proceedings. Additionally, due to the inherent uncertainty of litigation, there can be no assurance that the resolution of any particular claim or proceeding would not have a
material adverse effect on the Companys financial condition or results of operations.

On or about July 12, 2006,
two of the Companys operating businesses in the Sao Paulo, Brazil market received notices of infraction from the state taxing authority, seeking to impose a value added tax (VAT) on such businesses, retroactively for the period
from December 31, 2001 through January 31, 2006. The taxing authority contends that the Companys businesses fall within the definition of communication services and as such are subject to the VAT. The aggregate amount of
tax initially claimed to be owed by both businesses equals approximately $68.3 million, comprised of approximately $19.8 million in taxes, approximately $39.6 million in penalty and approximately $8.9 million in interest (all at September 30,
2009 exchange rates). In addition, the taxing authority is seeking to impose an additional aggregate amount of interest on the tax and penalty amounts until the initial tax, penalty and interest are paid of approximately $19.8 million (at
September 30, 2009 exchange rates). The aggregate amount of additional interest accrues monthly at an interest rate promulgated by the Brazilian government, which at September 30, 2009 is equal to approximately $0.58 million per month.

The Company has filed petitions to challenge the imposition of this tax against each of its businesses, which are proceeding
separately. The Companys challenge for the L&C business was unsuccessful at the first administrative level, but successful at the second administrative level. The state taxing authority has filed an appeal to the next administrative level
which requires consideration by a full panel of 16 administrative law judges. The Companys challenge for the Klimes business was unsuccessful at the first administrative level, and denied at the second administrative level on or about
September 24, 2009. The Company is appealing to the third administrative level which has a panel of 16 judges. If the Company is not successful with either of its administrative petitions, it may appeal to the judicial level.



|Item 1A. | Risk Factors
|-------- | ------------

For
information regarding our risk factors, please refer to Item 1A in our Annual Report on Form 10-K for the year ended December 31, 2008. There have not been any material changes in the risk factors disclosed in the 2008 Annual Report on
Form 10-K.

Additional information relating to risk factors is described in Managements Discussion and Analysis of
Financial Condition and Results of Operations under Risks Regarding Forward-Looking Statements.



|Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds
|------- | -----------------------------------------------------------

None.



|Item 3. | Defaults Upon Senior Securities
|------- | -------------------------------

None.



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

None.



|Item 5. | Other Information
|------- | -----------------

None.



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|Item 6. | Exhibits
|------- | --------



|               |  |                                                                                                                                                                                                                                           
|-------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit Number |  | Description                                                                                                                                                                                                                               
|3.1            |  | Amended and Restated Certificate of Incorporation of Clear Channel Outdoor Holdings, Inc. (incorporated herein by reference to Exhibit 3.1 to the Companys Annual Report on
Form 10-K filed March 31, 2006).                             
|               | 
|3.2            |  | Amended and Restated Bylaws of Clear Channel Outdoor Holdings, Inc., as amended (incorporated herein by reference to Exhibit 3.2 to the Companys Annual Report on Form 10-K
filed February 14, 2008).                                    
|               | 
|4.1            |  | Form of Specimen Class A Common Stock certificate of Clear Channel Outdoor Holdings, Inc. (incorporated herein by reference to Exhibit 4.1 to the Registration Statement on Form S-1
(File No. 333-127375 (the Registration Statement)).
|               | 
|4.2            |  | Form of Specimen Class B Common Stock certificate of Clear Channel Outdoor Holdings, Inc. (incorporated herein by reference to Exhibit 4.2 to the Registration
Statement).                                                                
|               | 
|10.1*          |  | Employment Separation Agreement, dated October 19, 2009, by and between Clear Channel Communications, Inc. and Herbert W. Hill.                                                                                                           
|               | 
|10.2*          |  | Contract of Employment, dated August 31, 2009, by and between Clear Channel Outdoor Ltd. and Christopher William Eccleshare.                                                                                                              
|               | 
|10.3           |  | Form of Independent Director Indemnification Agreement (incorporated herein by reference to Exhibit 10.1 of the Companys Current Report on Form 8-K filed June 3,
2009).                                                                 
|               | 
|10.4           |  | Form of Affiliate Director Indemnification Agreement (incorporated herein by reference to Exhibit 10.2 of the Companys Current Report on Form 8-K filed June 3,
2009).                                                                   
|               | 
|11*            |  | Statement re: Computation of Per Share Earnings.                                                                                                                                                                                          
|               | 
|31.1*          |  | Certification of Chief Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.                                       
|               | 
|31.2*          |  | Certification of Chief Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.                                       
|               | 
|32.1**         |  | Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                        
|               | 
|32.2**         |  | Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                        



|* | Filed herewith
|- | --------------



|** | Furnished herewith
|-- | ------------------



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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 OUTDOOR HOLDINGS, INC.
|                 |  | 
|November 9, 2009 |  |  |  | /s/ Randall T. Mays                 
|                 |  |  |  | Randall T. Mays                     
|                 |  |  |  | Chief Financial Officer             
|                 |  | 
|November 9, 2009 |  |  |  | /s/ Herbert W. Hill, Jr.            
|                 |  |  |  | Herbert W. Hill, Jr.                
|                 |  |  |  | Senior Vice President and           
|                 |  |  |  | Chief Accounting Officer            



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