Clear Channel Communications Reports Second Quarter 2006 Results

The Company reported revenues of approximately $1.9 billion in thesecond quarter of 2006, an increase of 7% from the $1.7 billionreported for the second quarter of 2005. The increase in revenues cameacross all operating segments led by the Company's outdoor advertisingsegment with 9% growth and the radio segment with 6% growth.

Clear Channel's income before discontinued operations decreased 7%to $197.5 million, as compared to $213.2 million for the same periodin 2005. The Company's diluted earnings before discontinued operationsper share remained at $0.39 for both periods.

The Company's OIBDAN (defined as Operating Income beforeDepreciation & Amortization, Non-cash compensation expense and Gain(loss) on disposition of assets - net) was $647.2 million in thesecond quarter of 2006, a 10% increase from the second quarter of2005. See reconciliation of OIBDAN to net income at the end of thispress release.

"We are successfully reshaping our Company to capitalize on thechanges in the global media market," said Mark P. Mays, ChiefExecutive Officer. "Through a systematic and prudent investmentstrategy, we are continuing to strengthen our content resources whileefficiently expanding our distribution channels. As we take steps tosecure our growth over the long-term, we remain committed togenerating profitable growth and cash returns for our shareholders."

"We remain very optimistic about our growth prospects in 2006,"Mays added. "Our operating momentum has continued into the currentquarter. Our radio division's performance surpassed our expectationsand once again far outpaced the industry. Our top-25 radio marketsperformed particularly well, generating the highest percentage growthof any of our markets. And our outdoor business continued the trend ofposting consistently strong revenues and profits, with considerablegains from the fast-growing sunbelt markets in the U.S., as well assolid results in France, Italy and Turkey."

"Our second quarter results reflect strong growth and healthyfundamentals across our operations," added Randall Mays, President andChief Financial Officer. "As we continue to convert our audience gainsinto top-line growth, we will continue to generate profitable returnsfor our shareholders. Looking ahead, our solid balance sheet andtremendous financial flexibility support our efforts to maximize thevalue of our assets."
Revenue, Direct Operating and SG&A Expenses and OIBDAN by Division

(In thousands) Three Months Ended %
June 30, Change
------------------------
2006 2005
------------ -----------
Revenue
-------
Radio Broadcasting $983,523 $931,929 6%
Outdoor Advertising 748,403 684,509 9%
Other 150,235 135,792 11%
Eliminations (31,514) (29,498)
------------ -----------
Consolidated revenue $1,850,647 $1,722,732 7%
============ ===========

Direct operating and SG&A expenses
----------------------------------
Radio Broadcasting $588,310 $554,217
Less: Non-cash compensation expense (6,310) --
------------ -----------
582,000 554,217 5%

Outdoor Advertising 493,758 460,000
Less: Non-cash compensation expense (1,573) --
------------ -----------
492,185 460,000 7%

Other 114,558 107,901
Less: Non-cash compensation expense (975) --
------------ -----------
113,583 107,901 5%

Eliminations (31,514) (29,498)

Plus: Non-cash compensation expense 8,858 --
------------ -----------

Consolidated divisional operating
expenses $1,165,112 $1,092,620 7%
============ ===========

OIBDAN
------
Radio Broadcasting $401,523 $377,712 6%
Outdoor Advertising 256,218 224,509 14%
Other 36,652 27,891 31%
Corporate (47,159) (40,957)
------------ -----------
Consolidated OIBDAN $647,234 $589,155 10%
============ ===========

See reconciliation of OIBDAN to net income at the end of this press
release.

Radio Broadcasting

The Company's radio broadcasting revenues increased 6% during thesecond quarter of 2006 as compared to the second quarter of 2005primarily from an increase in both local and national sales, driven byincreases in yield and average unit rates. The number of 30 second and15 second commercials broadcast as a percent of total minutes soldincreased in the second quarter of 2006 as compared to the secondquarter of 2005. The Company's top 25 markets performed well,experiencing the highest percent revenue growth of any of its markets.Strong advertising categories during the second quarter of 2006 ascompared to the second quarter of 2005 were services, automotive andretail.

The Company's radio broadcasting direct operating and SG&Aexpenses increased $34.1 million for the second quarter of 2006 ascompared to the second quarter of 2005. This growth includes anincrease in non-cash compensation expense of $6.3 million as a resultof adopting FAS 123(R). Also contributing to the increase wereincreased costs related to programming, sales and distributioninitiatives.

Outdoor Advertising

The Company's outdoor advertising revenue increased 9% during thesecond quarter of 2006 as compared to the second quarter of 2005.

Outdoor advertising expenses increased $33.8 million, including$1.5 million in non-cash compensation expense related to the adoptionof FAS 123(R), during the second quarter of 2006 as compared to thesecond quarter of 2005.

The Company's revenues declined approximately $0.8 million fromforeign exchange movements during the second quarter of 2006 ascompared to the second quarter of 2005. The Company's operatingexpenses increased approximately $0.9 million from foreign exchangemovements during the second quarter of 2006 as compared to the secondquarter of 2005.

-- Americas Outdoor

The Company's Americas revenue increased 6% during the secondquarter of 2006 as compared to the second quarter of 2005 primarilyattributable to revenue increases from its bulletin and airportinventory, while poster revenue was essentially unchanged. Theincrease in airport and bulletin revenue was driven by increased ratesover the second quarter of 2005. Strong market revenue growth duringthe quarter included, Albuquerque, Dallas, Orlando, Phoenix,Sacramento, San Antonio, Tampa, Tucson and Latin America. Strongadvertising client categories included business and consumer services,entertainment and automotive.

Direct operating and SG&A expenses increased $12.9 million in thesecond quarter of 2006 over the second quarter of 2005. The increasewas driven by increased site lease expenses primarily related torevenue shares on the Company's airport inventory associated with theincrease in revenue and from an increase in commission expenses, alsoassociated with the increase in revenue. Non-cash compensation expenseincreased $1.2 million related to the adoption of FAS 123(R).

-- International Outdoor

Revenues from the Company's international outdoor operationsincreased 12% in the second quarter of 2006 as compared to the secondquarter of 2005 primarily from an increase in street furniture revenueand the consolidation of Clear Media. The increase in street furniturerevenue was primarily a result of an increase in revenue per display.Street furniture revenue was the driver of the revenue increase inFrance, while revenue was down in the United Kingdom principally froma decline in billboard revenue. Clear Media, which the Companyconsolidated in the third quarter of 2005, contributed approximately$29.5 million to the revenue increase. Strong markets for the secondquarter of 2006 as compared to the second quarter of 2005 were France,Italy and Turkey. Strong advertising client categories during thesecond quarter of 2006 were retail, food and automotive.

Direct operating and SG&A expenses increased 7% over the secondquarter of 2005. The Company's expenses increased primarily fromincreased site lease expense associated with the revenue increase aswell as $14.6 million from Clear Media. Also included in the increaseis $0.3 million in non-cash compensation expense related to theadoption of FAS 123(R).

FAS No. 123 (R): Share-Based Payment ("FAS 123(R)")

The Company adopted FAS 123(R) on January 1, 2006 under themodified-prospective approach which requires it to recognize employeecompensation cost related to its stock option grants in the 2006financial statements for all options granted after the date ofadoption as well as for any options that were granted prior toadoption but not vested. Under the modified-prospective approach, nostock option expense is reflected in the financial statements for 2005attributable to these options. Non-cash compensation expenserecognized in the financial statements during 2005 relate to theexpense associated with restricted stock awards. The following tabledetails non-cash compensation expense for the second quarter of 2006and 2005, respectively, assuming the Company had applied theprovisions of FAS 123(R) during 2005:
(In millions) Three Months Ended June 30,
-------------------------------------
2006 2005(a) 2005(b)
---------- ---------- -----------
Direct operating expense $4.4 $-- 3.7
SG&A 4.5 -- 3.7
Corporate 2.3 1.4 3.4
---------- ---------- -----------
Total non-cash compensation $11.2 $1.4 $10.8
========== ========== ===========

(a) Actual non-cash compensation expense recognized in the 2005
financial statements.

(b) Assumes the Company expensed options during 2005.

Return of Capital to Shareholders

On August 9, 2005, the Company announced its intention to returnapproximately $1.6 billion of capital to shareholders through eithershare repurchases, a special dividend or a combination of both. Sinceannouncing its intent through the date of this release, the Companyhas returned approximately $1.5 billion to shareholders byrepurchasing 49.5 million shares of its common stock. Since announcinga share repurchase program in March 2004, the Company has repurchasedapproximately 126.9 million shares of its common stock forapproximately $4.2 billion. Subject to its financial condition, marketconditions, economic conditions and other factors, it remains theCompany's intention to return the remaining balance of theapproximately $1.6 billion in capital to its shareholders througheither share repurchases and/or a special dividend from fundsgenerated from the repayment of intercompany debt, the proceeds of anynew debt offerings, available cash balances and cash flow fromoperations. The timing and amount of a special dividend, if any, is inthe discretion of the Company's Board of Directors and will be basedon the factors described above.

The $1 billion share repurchase plan authorized on August 9, 2005,has been completed. A $600 million repurchase plan was authorized bythe Board of Directors on March 9, 2006 and $130.4 million remainsunder this plan.

Acquisition of Interspace Airport Advertising ("Interspace")

The Company's subsidiary, Clear Channel Outdoor Holdings, Inc.(NYSE:CCO), announced it completed the acquisition of Interspace onJuly 1, 2006, for a cash purchase price of approximately $81.3 millionand the issuance of 4.25 million shares of CCO's Class A Common Stock.Interspace's 2005 revenues and operating expenses (excludingdepreciation and amortization) were approximately $45.8 million and$32.5 million, respectively.

Conference Call

The Company will host a teleconference to discuss its resultstoday at 9:00 a.m. Eastern Time. The conference call number is866-564-7444 and the pass code is 4016671. Please call ten minutes inadvance to ensure that you are connected prior to the presentation.The teleconference will also be available via a live audio cast on theCompany's website, located at www.clearchannel.com. A replay of thecall will be available for 72 hours after the live conference call,beginning at 12:00 p.m. Eastern Time. The replay number is888-203-1112 and the pass code is 4016671. The audio cast will also bearchived on the Company's website and will be available beginning 24hours after the call for a period of thirty days.
TABLE 1 - Financial Highlights of Clear Channel Communications, Inc.
and Subsidiaries - (Unaudited)

(In thousands, except per share Three Months Ended
data) June 30,
----------------------- %
2006 2005 Change
----------- ----------- --------

Revenue $1,850,647 $1,722,732 7%
Direct operating expenses (includes
non-cash compensation expense of
$4,382 and none in 2006 and 2005,
respectively) 652,770 611,418
Selling, general and administrative
expenses (includes non-cash
compensation expense of $4,476 and
none in 2006 and 2005,
respectively) 512,342 481,202
Corporate expenses (includes non-
cash compensation expense of $2,332
and $1,417 in 2006 and 2005,
respectively) 49,491 42,374
Depreciation and amortization 158,258 152,708
Gain (loss) on disposition of
assets - net (425) 4,891
----------- -----------
Operating Income 477,361 439,921 9%

Interest expense 123,298 105,058
Gain (loss) on marketable securities (1,000) 1,610
Equity in earnings of
nonconsolidated affiliates 9,577 11,962
Other income (expense) - net (4,633) 7,705
----------- -----------
Income before income taxes, minority
interest and discontinued
operations 358,007 356,140
Income tax benefit (expense):
Current (110,830) (107,938)
Deferred (35,953) (32,738)
----------- -----------
Income tax benefit (expense) (146,783) (140,676)
Minority interest income (expense),
net of tax (13,736) (2,229)
----------- -----------
Income before discontinued
operations 197,488 213,235 (7%)
Discontinued operations -- 7,497
----------- -----------

Net Income $197,488 $220,732 (11%)
=========== ===========

Diluted earnings per share:

Diluted earnings before discontinued
operations per share $.39 $.39
=========== ===========

Diluted earnings per share $.39 $.40
=========== ===========

Weighted average shares
outstanding - Diluted 502,060 545,090


TABLE 2 - Selected Balance Sheet Information

Selected balance sheet information for 2006 and 2005 was:

(In millions) June 30, December 31,
2006 2005
-------------- -------------
(Unaudited) (Audited)
Cash $104.7 $82.8
Total Current Assets $2,315.8 $2,398.3
Net Property, Plant and Equipment $3,233.9 $3,255.6
Total Assets $18,813.0 $18,703.4
Current Liabilities (excluding current
portion of long-term debt) $1,258.2 $1,216.1
Long-Term Debt (including current
portion of long-term debt) $7,911.7 $7,046.5
Shareholders' Equity $7,889.9 $8,826.5


TABLE 3 - Capital Expenditures - Unaudited

Capital expenditures for the second quarter of 2006 and 2005 were:

(In millions) June 30, 2006 June 30, 2005
--------------- ---------------

Non-revenue producing $48.9 $51.8
Revenue producing 42.7 22.6
--------------- ---------------
Total capital expenditures $91.6 $74.4
=============== ===============

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

TABLE 4 - Long-term Debt - Unaudited

At June 30, 2006, Clear Channel had long-term debt of:

(In millions) June 30, 2006
----------------

Bank Credit Facilities $718.7
Public Notes 7,008.0
Other Debt 185.0
----------------
Total $7,911.7
================

Liquidity and Financial Position

For the six months ended June 30, 2006, cash flow from operatingactivities was $828.4 million, cash flow used by investing activitieswas $411.2 million, and cash flow used in financing activities was$395.3 million for a net increase in cash of $21.9 million.

Leverage, defined as debt(c), net of cash, divided by the trailing12-month pro forma EBITDA(d), was 3.7x at June 30, 2006.

As of June 30, 2006, 73% of the Company's debt bears interest atfixed rates while 27% of the Company's debt bears interest at floatingrates based upon LIBOR. The Company's weighted average cost of debt atJune 30, 2006 was 6.17%.

As of August 7, 2006, the Company had approximately $704.9 millionavailable on its bank credit facility. The Company has $750.0 millionof public debt maturing during 2006. The Company may utilize existingcapacity under its bank facility and other available funds for generalworking capital purposes including funding capital expenditures,acquisitions, stock repurchases and the refinancing of certain publicdebt securities. Capacity under the facility can also be used tosupport commercial paper programs. Redemptions or repurchases ofsecurities will occur through open market purchases, privatelynegotiated transactions, or other means.

There were 501.5 million shares outstanding as of June 30, 2006.

(c) As defined by Clear Channel's credit facility, debt is long-term debt of $7.912 million plus letters of credit of $162 million; guarantees of third party debt of $8 million; net original issue discount/premium of $15 million; deferred purchase consideration of $8 million included in other long-term liabilities; plus the fair value of interest rate swaps of $57 million; and less purchase accounting premiums of $9 million.

(d) As defined by Clear Channel's credit facility, pro forma EBITDA is the trailing twelve-month EBITDA adjusted to include EBITDA of any assets acquired in the trailing twelve-month period.
Supplemental Disclosure Regarding Non-GAAP Financial Information

Operating Income before Depreciation and Amortization (D&A),
Non-cash Compensation Expense and Gain (Loss) on Disposition of
Assets - Net (OIBDAN)

The following tables set forth Clear Channel's OIBDAN for thethree months ended June 30, 2006 and 2005. The Company defines OIBDANas net income adjusted to exclude non-cash compensation and thefollowing line items presented in its Statement of Operations:Discontinued operations, Minority interest, net of tax; Income taxbenefit (expense); Other income (expense) - net; Equity in earnings ofnonconsolidated affiliates; Gain (loss) on marketable securities;Interest expense; Gain (loss) on disposition of assets - net; and D&A.

The Company uses OIBDAN, among other things, to evaluate theCompany's operating performance. This measure is among the primarymeasures used by management for planning and forecasting of futureperiods, as well as for measuring performance for compensation ofexecutives and other members of management. This measure is animportant indicator of the Company's operational strength andperformance of its business because it provides a link betweenprofitability and cash flows from operating activities. It is also aprimary measure used by management in evaluating companies aspotential acquisition targets.

The Company believes the presentation of this measure is relevantand useful for investors because it allows investors to viewperformance in a manner similar to the method used by the Company'smanagement. It helps improve investors' ability to understand theCompany's operating performance and makes it easier to compare theCompany's results with other companies that have different capitalstructures, stock option structures or tax rates. In addition, thismeasure is also among the primary measures used externally by theCompany's investors, analysts and peers in its industry for purposesof valuation and comparing the operating performance of the Company toother companies in its industry. Additionally, the Company's bankcredit facilities use this measure for compliance with leveragecovenants.

Since OIBDAN is not a measure calculated in accordance with GAAP,it should not be considered in isolation of, or as a substitute for,net income as an indicator of operating performance and may not becomparable to similarly titled measures employed by other companies.OIBDAN is not necessarily a measure of the Company's ability to fundits cash needs. As it excludes certain financial information comparedwith operating income and net income (loss), the most directlycomparable GAAP financial measures, users of this financialinformation should consider the types of events and transactions,which are excluded.

As required by the SEC, the Company provides reconciliations belowto the most directly comparable amounts reported under GAAP, including(i) OIBDAN for each segment to consolidated operating income; and (ii)OIBDAN to net income.
Gain
(loss)
on
Disposition
Operating Non-cash Depreciation of
(In income compensation and assets
thousands) (loss) expense amortization - net OIBDAN
--------- ------------- ------------- -------- ---------

Three Months
Ended June
30, 2006
-------------
Radio
Broadcasting $359,674 $6,310 $35,539 $-- $401,523
Outdoor 153,818 1,573 100,827 -- 256,218
Other 18,794 975 16,883 -- 36,652
Gain (loss)
on
disposition
of assets -
net (425) -- -- 425 --
Corporate (54,500) 2,332 5,009 -- (47,159)
--------- ------------- ------------- -------- ---------
Consolidated $477,361 $11,190 $158,258 $425 $647,234
========= ============= ============= ======== =========

Three Months
Ended June
30, 2005
-------------
Radio
Broadcasting $343,282 $-- $34,430 $-- $377,712
Outdoor 127,947 -- 96,562 -- 224,509
Other 10,961 -- 16,930 -- 27,891
Gain (loss)
on
disposition
of assets -
net 4,891 -- -- (4,891) --
Corporate (47,160) 1,417 4,786 -- (40,957)
--------- ------------- ------------- -------- ---------
Consolidated $439,921 $1,417 $152,708 $(4,891) $589,155
========= ============= ============= ======== =========


Reconciliation of OIBDAN to Net income

(In thousands) Three Months Ended
June 30,
---------------------
2006 2005
--------- ---------

OIBDAN $647,234 $589,155
Non-cash compensation expense 11,190 1,417
Depreciation & amortization 158,258 152,708
Gain (loss) on disposition of assets - net (425) 4,891
--------- ---------
Operating Income 477,361 439,921

Interest expense 123,298 105,058
Gain (loss) on marketable securities (1,000) 1,610
Equity in earnings of nonconsolidated
affiliates 9,577 11,962
Other income (expense) - net (4,633) 7,705
--------- ---------
Income before income taxes, minority interest
and discontinued operations 358,007 356,140
Income tax benefit (expense):
Current (110,830) (107,938)
Deferred (35,953) (32,738)
--------- ---------
Income tax benefit (expense) (146,783) (140,676)
Minority interest income (expense), net of tax (13,736) (2,229)
--------- ---------
Income before discontinued operations 197,488 213,235
Discontinued operations -- 7,497
--------- ---------

Net income $197,488 $220,732
========= =========

About Clear Channel Communications

Clear Channel Communications, Inc. (NYSE:CCU), headquartered inSan Antonio, Texas, is a global leader in the out-of-home advertisingindustry with radio and television stations and outdoor displays invarious countries around the world.

Certain statements in this document constitute "forward-lookingstatements" within the meaning of the Private Securities LitigationReform Act of 1995. Such forward-looking statements involve known andunknown risks, uncertainties and other factors which may cause theactual results, performance or achievements of Clear ChannelCommunications to be materially different from any future results,performance or achievements expressed or implied by suchforward-looking statements. The words or phrases "guidance,""believe," "expect," "anticipate," "estimates" and "forecast" andsimilar words or expressions are intended to identify suchforward-looking statements. In addition, any statements that refer toexpectations or other characterizations of future events orcircumstances are forward-looking statements.

Various risks that could cause future results to differ from thoseexpressed by the forward-looking statements included in this documentinclude, but are not limited to: changes in business, political andeconomic conditions in the U.S. and in other countries in which ClearChannel Communications currently does business (both general andrelative to the advertising industry); fluctuations in interest rates;changes in operating performance; shifts in population and otherdemographics; changes in the level of competition for advertisingdollars; fluctuations in operating costs; technological changes andinnovations; changes in labor conditions; changes in governmentalregulations and policies and actions of regulatory bodies;fluctuations in exchange rates and currency values; changes in taxrates; and changes in capital expenditure requirements; access tocapital markets and changes in credit ratings. Other unknown orunpredictable factors also could have material adverse effects onClear Channel Communications' future results, performance orachievements. In light of these risks, uncertainties, assumptions andfactors, the forward-looking events discussed in this document may notoccur. You are cautioned not to place undue reliance on theseforward-looking statements, which speak only as of the date stated, orif no date is stated, as of the date of this document. Other key risksare described in Clear Channel Communications' reports filed with theU.S. Securities and Exchange Commission, including in the sectionentitled "Item 1A. Risk Factors" of the Company's Annual Report onForm 10-K for the year ended December 31, 2005. Except as otherwisestated in this document, Clear Channel Communications does notundertake any obligation to publicly update or revise anyforward-looking statements because of new information, future eventsor otherwise.