Ladies and gentlemen, good afternoon. Thank you for standing by and welcome to the Clear Channel second quarter earnings conference call. At this time, all lines are in a listen only mode. There will be an opportunity for questions. (Operator Instructions) At this time, I’d like to turn the conference over to our host, Senior Vice President and Treasurer, Mr. Brian Coleman. Please go ahead.

Good afternoon and thank you for joining our earnings call for the second quarter of 2012. On the call with me today is Tom Casey, Executive Vice President and Chief Financial Officer. During today’s call, we will provide an overview of the second quarter financial and operating performances of CC Media Holdings, Clear Channel Communications, and Clear Channel Outdoor Holdings. For purposes of this call, when we describe the financial and operating performances of CC Media Holdings, we are also describing the performance of its subsidiary, Clear Channel Communications. After Tom’s comments, we will open up the line for questions. Before we begin, I would like to remind everyone that this conference call may include forward-looking statements. They involve uncertainties and risks. There can be no assurance that management’s expectations, beliefs, and projections will result or be achieved or that actual results will not differ from expectations. Please see our annual reports on Form 10-K and our quarterly reports on Form 10-Q, filed with the Securities and Exchange Commission for discussion of important factors that could affect our actual results. Pacing data may be mentioned during this call. For those not familiar with pacing data, it reflects revenues booked at a specific date versus the comparable date in a prior period, and may or may not reflect the actual revenue growth at the end of the period. The company’s revenue pacing information includes an adjustment to prior periods to include all acquisitions and exclude all the divestitures in both periods presented for comparative purposes. It also excludes the effects of movements in foreign exchange rates. During today’s call, we will provide certain performance measures that do not conform to generally accepted accounting principles. We have provided schedules that reconcile these non-GAAP measures with our reported results on GAAP basis as part of our earnings press release, which can be found on the investor sections of our websites. A webcast of this call and earnings press releases issued today can be found on the investor sections of our websites at www.clearchannel.com, www.clearchanneloutdoor.com, or www.ccmediaholdings.com. A replay of this conference call will be available for a period of 30 days. And with that, I will now turn the call over to Tom Casey.

Thank you Brian, and good afternoon everyone. During the second quarter we continued to make solid progress against our strategy to strengthen our business and improve our competitive position. As I discussed with you last quarter, our strategic investments in our Media and Entertainment and our Outdoor operations are key to keeping driving our business forward. Building our size, scale, and operating strength, these investments make it possible for us to take full advantage of our opportunity and continue to generate meaningful growth. Most of all, we’ve had industry leadership, global diversification, and constant innovation. We need to leverage the quality and reach of our assets across the company, today and into the future. Earlier this year, Media and Entertainment launched our new strategic partnerships, national sales, and integrated marketing and sales groups. So now we can offer a groundbreaking constant marketing solution that only Clear Channel can deliver. That’s helping us gain real traction with our major national advertisers, a key objective of our strategy. Our industry-leading digital radio platform, iHeartRadio recently reached 10 million registered users faster than any other internet service, and it has been one of the major beneficiaries of this growing national advertising success. This September’s iHeartRadio Music Festival is another example of our ability to leverage our assets. The festival is being sponsored by such national brands as Amazon Kindle Fire, Dish, Macy’s, MGM Resorts International, NBC’s The Voice, and State Farm. Our Outdoor businesses, the American and international, reach hundreds of millions of people every month, and we will continue to compete for significant advertising contracts that attract new target audiences around the world for our clients. Our investments in our Outdoor business are also continuing to pay off. In the Americas, over the last 12 months, we have deployed more than 250…

(Operator Instructions) Your first question comes from the line of James Dix.

Just a couple, one easy housekeeping one for you – my ears must be going bad; were the Americas for the third quarter pacing up 2% or 3%?

3%.

I'm sorry, 3%? And then in the second quarter, excluding digital, would Americas have had a positive growth on the revenue line?

Well, we don't break out the individual products. As you know, we sell digital as part of a broader network. Digital continues to ramp up capacity, so it obviously is going to have a faster growth rate than the rest of the traditional business, which is not growing new capacity. In fact, it's shrinking capacity as we modify traditional boards into digital boards. So we continue to see great growth in digital. We did see some softness in posters as I mentioned but overall capacity we're generating and the excitement with better-run digital continues to be a key driver.

And just two others, one for corporate; it seemed to spike up a little bit year-over-year in the third quarter, in the second quarter. Any color on that and is that good run rate to think about the rest of the year? And then any outlook on capital expenditures for the rest of the year, especially given some of the street furniture transit contract wins and defenses that you've had.

A couple comments on corporate, we did see about $15 million increase in corporate. We did have some unfavorable benefit reserve on some healthcare issues that came through the quarter. We also are seeing higher bonus calculations than prior years, so that's obviously a recovery from last year when we were – saw a much weaker environment than we had anticipated. Obviously we have (Bob) onboard now and also we continue to ramp up our initiatives in some of the things I mentioned earlier in Outdoor and the CC&E. So I think that with regard to CapEx, I think we've given you kind of an idea of where we're coming in for the year I don't think that we have anything – changes to that right now but I would say that clearly we're looking at being disciplined about how we deploy capital. Frankly, a lot of capital we will deploy up to now and into years already been committed and this is just a rollout of certain tenders that we've previously won. So that's – we'll give you an update on the next quarter and as we start getting into next year what we look like next year. But I think we're still on track for our target this year.

Your next question comes from the line of Marci Ryvicker.

The first question, the weakness in posters in the second quarter, since posters are shorter term, is this indicative of macro issues? Is there a certain category? Could you talk about what drove the weakness in this segment?

I think nothing in particular. I mean, I would agree that we're seeing a shorter and shorter sales cycle here. So we're getting later and later postings and so the whole turn time is much shorter. No one individual market came out as being a unique driver. Our local, international business were pretty much in line with each other for the quarter with the 1% growth in revenue. We didn't see a significant delta if you will really year-over-year as far as national, local or in individual markets.

Then there has been some thought that billboard companies may pursue conversion to a REIT. Is this something that Clear Channel Outdoor would consider or discuss?

We saw the same press that you saw and we have no plans or are not contemplating any restructuring on our company into a REIT. And we'll monitor the developments but at this time we have no plans.

Then my last question is on the media and entertainment division. You called out higher expenses related to traffic acquisition. What about revenue in the second quarter?

Revenue for the quarter was about, if I recall, up about $3 million or about $35 million for the full quarter. (Inaudible) is down to about $3 million. So we clearly are seeing some improvement in our top line. We are looking at the TV business as a bit of a raw piece of our business, so that is putting some pressure on the overall metro line. But the total was plus about $3.5 million, given the fact that we didn't have the full acquisition in last year.

Your next question comes from the line of Avi Steiner.

Just a very quick follow-up, did you say $3 million incremental weight from traffic?

$3.5 million in part because of the – I think we acquired in April last year, so we had a little bit of a – not a full quarter in last year's comparable numbers.

Just in radio, anecdotally we had been hearing the quarter was down. And I'm curious what's going on there with respect to you guys. And I know you called out some national things but I don't know if that's more of a back half event. But are you taking share in the radio division? I mean, this looked like a good number relative to what we were expecting.

We think we continue to position ourselves to take share. We saw a strong national growth about double what we saw in local. We're seeing strong verticals in auto, political, telecommunications and so on, financial services as well. But I think more importantly we are starting to see the efforts we put in place with our strategic partnerships and our national programs to really start to leverage the relationships we're starting to build through. We feel real optimistic about the traction we're getting and we think that we will differentiate ourselves across the radio business. So we have historically outperformed the radio business and I would expect with this additional efforts and energy we're putting behind us, we're encouraged with our numbers for the quarter.

And then if I can go to the – I think the radio but going to the royalty comments you made. You called out in the press release I believe a $26 million royalty benefit and then this – in your opening comments you talked about a $21 million credit on future royalty payments. So do we think about that as $47 million of one-time benefits in the quarter and on some of the lower royalty payments is that same magnitude going forward in the upcoming quarters?

Yes, the big one this quarter was (NYSE:BMI) and so we tried to break it out for you because there's really two things happening there. We did get a credit for about $21 million. We'll reduce our go-forward rate. We also got a quarter run rate reduction as well. So it's really two pieces to the puzzle. The quarterly run rate reduction was about $3 million or so going forward.

So the $21 million is not a subset of the $26 million, correct?

Yes, it is.

$21 million is a subset of that.

Absolutely, yes.

And then maybe if I can turn it over to the balance sheet and then I'll let other people chime in, really two questions. One, do you have the ability to buy back any bonds in the open market and then have you done anything subsequent to your quarter close?

We have not repurchased any bonds in the open market. We have a variety of (baskets) available under the credit agreement that permit us to repurchase debt securities but we have not during the quarter.

How about – I'm sorry. I hate to nit pick but the question was subsequent. If you don't answer, that's great and I'll turn it over.

We have not purchased anything subsequent to the quarter, sorry.

Your next question comes from the line of Bishop Cheen.

Let me go back to something that Avi was talking about. (CC&E) certainly has the entertainment component in it now but it – that hasn't been broken out really I guess because it's too new with all the digital initiatives. So I'm just trying to get a sense, since you have been, by perception, the leader in the digital revolution, how much of a lift has the digital component of (CC&E) added to your (inaudible) in Q2?

We are seeing very good growth in our digital business. It's one of our fastest growing areas. But keep in mind that we're not monetizing the custom radio streams rather in our iHeart radio today. However, we are leveraging the platform for us to – for example, our iHeartRadio festival we've got coming up in Las Vegas in September is another example where we leverage our assets to drive additional sponsorships and national advertisers to the media. So we're excited about what we can do. We haven't broken it out. It's part of our – the way we're running our business and I think we're getting some good traction where we can really differentiate our asset base and our reach across the country for large national advertisers. So we're quite encouraged. Still early days but early, early indications are we're getting good traction.

Your next question comes from the line of Jason Kim.

So on the – any update you can provide in terms of potentially extending an ABL facility which you briefly alluded to during last quarter's call? And second, as we get closer to the December calling on the (inaudible) senior notes, I was curious where your appetite was to refinance the piece of paper at a better rate than you're currently paying.

I guess first, with regard to the ABL, I know I mentioned it on the last quarter's call and I actually got a couple calls from some of the banks that are in that facility asking what's going on. And I guess what I would say to date is that's an attractive market. We feel that that is a target piece of paper, a target facility that we can extend. We would like to extend that. It expires in 2014. It's undrawn. By extending it, we have – we extend our liquidity. But I say all that in the context of we don't feel like there's any pressure to extend today and so it's something as with other initiatives that we look at, it's something that we'll continue to take a look at and when we feel it is opportune to do so, we'll like to extend. So I do think it's one of those things that's in the toolkit. It's something we're looking at. But we don’t feel under a great deal of pressure to move forward on it. But don't be surprised if you see some action, you know, at some point in the future. Your second question, with regard to the senior Outdoor notes that have a fixed price call in December of this, that's a balance. It's a balance between the economics of issuing new notes to replace those at a lower market rate versus the cost of the call. And I think you throw into the mix the likely set of terms and conditions we can get under new notes are improved versus the current indenture. I don't have an answer for you whether or not we'll take action in December or subsequent to the fixed price call kicking in. But it is one of the things that we also take a look at, so we're looking at these things as well as other initiatives. We'll be opportunistic if the markets (presents) an opportunity. We may avail ourselves of those, but not real guidance at this point.

Then just a follow-up; when you look a potential refi transaction on the senior, I mean, do you look at that as an opportunity as a way to reduce interest cost principally or is it more about getting additional proceeds to chip away your (bank end) maturities in the (prada) basis?

I think it can be a combination of both. I think we would have to look at all of the potential impacts of a refinancing event and what our goals are. So I think it's a little above when we would take a look at whether or not to exercise the call.

And just lastly, a housekeeping question and I apologize because I probably should know this already but next year I think you have about $57 million worth of (OHIDA) payment on your – for the (inaudible) through August of 2013. Is that payment owed to the (inaudible) that are outstanding to third parties such as on the $830 million outstanding or does it actually include the (inaudible) notes that you had bought back a while ago but have not retired, so it's owned to $1.3 billion, which I believe is the original amount of the bond at issuance.

I believe it's an offer that’s made to the notes that are outstanding. It doesn't include the ones that have been retired.

So that would also include the bond that you currently hold that (you are) repurchase but have not been retired.

That is correct. That's the essence of your question. The ones that have been repurchased by an unrestricted sub and have not been retired. That's correct.

Your next question comes from the line of Lance Vitanza.

I wanted to ask on the Outdoor side, (inaudible) talked earlier in the week about an expected five to six point increase in the UK market thanks to the Olympics. And I wanted to ask you is that consistent with what you're seeing?

Say again.

(JC Dacode) talked about seeing a five to six point increase in the UK market thanks to the Olympics. Is that consistent with what you're seeing?

Yes, I think we clearly, clearly are seeing a lift in the Olympics for the quarter. It's hard to determine exactly what the Olympic (inaudible) will be, so I'm not going to give you a specific number. But we would say that we are definitely seeing a lift and I'll have better information for you, how it all plays through in the third quarter. But right now it is included in our pacings for CCI. There's still a negative one pacing right now and we'll have to wait and see how this plays out. We had a similar pacing number for your last quarter. I'll give you an update next earnings call but we're well positioned in the UK with regard to the Olympics and are absorbing as much revenue as we can to take advantage of the market there.

And then aside from the Olympics, do you think that the Northern European markets have bottomed out and what kind of recovery do you suspect? Is it going to be a U-shaped or perhaps something more positive?

Well, clearly Northern Europe is definitely starting to feel, over the last few quarters, definitely starting to feel some of the challenges that Southern Europe has had. So we're clearly experiencing that in our numbers. You're seeing that. As I've said in the past, we continue to see good growth in Australia and China and actually even in Switzerland. But the Northern European countries are clearly starting to feel the pressure, significantly feel the pressure. As far as where we are in that cycle, it's difficult to determine. Southern Europe, while it continues to be slow, we're not seeing the same level of declines year-over-year that we're seeing in Northern Europe.

And then I think someone asked about this earlier but (Daco) had also come through on their earnings call with enhanced disclosures surrounding digital revenues, percent of total revenue and the pace at which their digital revenues are increasing. Can you do the same? Is that something that you guys have thought about and would be prepared to disclose in perhaps in subsequent quarters?

Well, yes, I had a look at their specific disclosure and what their objective was. Our digital business in the US is significantly different than theirs. We are different formats as well as the way we sell them in broader networks. We are continuing to grow our digital footprint in our international business, which tends to be more transient in malls. So it is becoming a different format when you look at different mediums, including airports, malls, street furniture and our big format business in the US. So a little hard to give really apples-to-apples comparison. So we sell them as a network and haven't been breaking them out because it's a combination of both digital and traditional that we really think is important for our clients to be purchasing. So just breaking out one is a little bit of half the story.

Then lastly for Brian, I was just wondering if you could give me some additional disclosures around cash flows in the quarter. I was looking for cash interest, cash taxes and working capital as a use of cash in the quarter if you can provide that please.

For CCMH, operating cash flow was about – from operations, was about $120 million, $121 million. And then CapEx, as we told you was about $102 million.

Can you help with the cash – interest in cash taxes? I’m – basically I’m trying to reconcile from the EBITDA numbers down to that cash flow of up – the CFO numbers.

Yes, the cash tax is – I believe they are disclosed in the financial statements of both the 10-Qs and it looks like it's up about $16 million of cash benefit this quarter.

The Qs have been filed.

Yes, they have.

Your next question comes from the line of Aaron Watts.

On the radio side, I thought the deal you guys announced with Big Machine was pretty interesting, obviously something new for the industry. Can you maybe just talk a little bit more about that and what – how material does a deal like that impact your expenses? And to the extent that it makes the digital platform much more viable to the bottom line going forward, should we expect to see more of those deals or are the costs of doing this kind of prohibited right now to keep you from striking a lot more of those deals?

Well, as you know, this was really the first agreement that we've entered into where artists will now participate in traditional broadcast revenues as well as digital and share in the growth of digital radio, which we believe this partnership will help drive growth. The agreement does shift the way we pay Big Machine and we think – that also matches the way we make money. So we thin it's a great transaction to do that. This is a very small percentage of our – of the music we play. We do believe it is a bit groundbreaking because it does change the fundamental structures that we work under. But we think that it's a – it puts us on the same side of the fence as far as how we draw our business and it's a start. But it's an early – we're in early days here and we're working hard to get our arms around (inaudible) opportunities to align ourselves with the labels.

And then just one other one for me on political; hearing big talk out of the television guys on what political is going to look like this year. Any reason to believe that political shouldn't be a record-type number for you guys this year as well compared to what you've done in the past?

We've been hearing the same thing. We gave you the numbers. We're not in a position to tell you exactly what that's going to be. As you can imagine, this business gets placed pretty late in the cycle and it's where the – typically going to be where the key states are. We think we're well positioned. We think we'll get more than our fair share but we just have not projected out what we think political is going to be in any of the quarters. I did indicate that in our pacing number for 3%. We don't really see a very significant impact in the current pacing. So as we get closer to the elections, maybe we'll start to see more significant. But I’m not prepared to talk about record setting at this point.

Your next question comes from the line of (Jaime Morris) (Jaime Morris): I was just hoping to get a better understanding of what's driving the improvement in the US for the pacing number versus where the quarter ended up. I mean, is there anything you can give me, any color – is it billboards or street furniture or any categories that are particularly driving the improvement?

Again, we're not seeing anything in particular. We are seeing additional capacity growth in our digitals. We talked about continuing to put up a number of new signs, 250 year-over-year. But our national and local business has been pretty consistent. We're not seeing any particular markets that are driving it. But again, we think we're well positioned and teams are doing an excellent job to take advantage of the environment that we're in and we're encouraged. It's a point in time that both national and local are up and we'll have to see how the rest of the quarter plays out. (Jaime Morris): And can you just comment, in the quarter, how pricing was relative to occupancy within the US growth?

Yes, again, I should have mentioned that we're not seeing anything there either. Occupancy and pricing were pretty consistent, so not – unfortunately I don't have a lot of drivers for you because national and local were pretty consistent, occupancy and rate were pretty consistent. So not a lot – obviously it varies by market but in total really, really not very big distinguishing factors.

Your next question comes from the line of Doug Arthur. Your next question will come from the line of Andrew Finkelstein.

Just one follow-up on that Outdoor, US Outdoor, I mean, not to beat at a dead horse but I think last quarter you talked about how the slower economy is having an impact. Obviously we haven't seen much better economic numbers yet. But is that -- I mean, are you hearing back from the sales force? Is it a better – is there a better tone out there?

I think – you're still talking about Americas, right. So we continue to see some strength in the third quarter for retail and auto and those obviously are important. (Inaudible) has been good and healthcare, medical have been strong. I would say everyone's feeling kind of the slow recovery and there seems to be some pockets where we're able to see a little bit stronger growth than others. But again, it's a point in time – I'm not forecasting where we'll be for the third quarter. This is – obviously we're encouraged with the early start and the strong level of pacings. But again, we'll have to wait and see how the full quarter plays out into the third quarter.

And has their national been any better than local?

Again, they're both – they've been pretty consistent. I'm not seeing a big difference between local and national. We think there is – just like we thought in the radio side, we think there's opportunity in the national to continue to differentiate with what we're doing on the CCME side to leverage both parts of our business. We already have seen some terrific partnering between the two businesses with some large national buys. I think that's helped the early days of Outdoor's pacings. But as we do more and more national business, we'll have more and more swings in our international year-over-year numbers that maybe not have seen in the past. So I'll try to keep you up to speed on that but we're very encouraged by the early progress we're making and we're encouraged that it can really affect both businesses.

Then one last one for me, just on the international expenses, obviously business has been struggling a little bit. But the expenses were up I think 9% or 10% in the first quarter and I think it's 4% this quarter excluding FX. Is there any developments there or is it just built in contracts that you've got to work through?

Well, I think it's a couple things. I think it's clearly some of the economies are not getting resized fast enough for the reduction or slowdown we're seeing in revenues, that's first. So it's putting some pressure on the bottom line. And as I mentioned, we are committed to resizing where we can for those new environments. We continue to invest, as you mentioned, so we do have ongoing operating costs related to some of the tenders that we did, so that we're still digesting some of the large amounts of capital expenditures we put in place last year. And then finally, for the quarter, we also did have some of the revenue and expense initiatives, as I mentioned, so things like severance and some consultant costs and take down expenses that are affecting the quarter as well. And just for (NYSE:CCI) alone, that's probably in the $6 million range. So clearly we're working it hard but it is something that – it's country-by-country really reevaluating what we need to do to reposition some of these businesses. All right, well, thank you. That completes today's conference call. I would like to make one comment that a question that Jason Kim asked earlier about the (inaudible) payment. The $57 million that we disclose in our financial statements would be payable to third-party holders. So it would not include any notes held by our unrestricted subsidiary. I believe that it said it would also include that. So I apologize for that error. That does complete today's conference call. We appreciate each of you joining us today and if you have any follow-up questions, please feel free to contact us. Thank you.

Ladies and gentlemen, that does conclude our conference for today. Thank you for your participation and using the AT&T Executive Teleconference. You may now disconnect.