Good day, everyone, and welcome to today's Clear Channel second quarter 2006 earnings release conference call. As a reminder, this call is being recorded. At this time for opening remarks and introductions I would like to turn the conference over to the Senior Vice President of Investor Relations, Mr. Randy Palmer. Please go ahead, sir.

Thank you, operator. Good morning and thank you for joining us for Clear Channel Communications' and Clear Channel Outdoor's second quarter 2006 conference call. Joining me today for the call are Lowry Mays, our Chairman; Mark Mays, Chief Executive Officer; Randall Mays, President and Chief Financial Officer; John Hogan, Chief Executive Officer of Clear Channel Radio; and Paul Meyer, Global President of Clear Channel Outdoor. Mark will open up the call and will be followed by Randall. After Randall's comments we will open up the lines for questions. Let me note that statements made during this call may contain forward-looking information. These forward-looking statements involve known and unknown risks, uncertainties, and other factors which may cause the actual results, performance, or achievements of the Company to be different from any future results, performance, and achievements expressed or implied by these statements. The following important factors, among others, could affect future results, causing these results to differ materially from those expressed in our forward-looking statements. Things such as changes in general economic conditions, both domestically and internationally, industry conditions, fluctuations in exchange rates and currency values, capital expenditure requirements, and legislative or regulatory requirements. The complete list of risks and uncertainties are noted in the Clear Channel Communications and Clear Channel Outdoor securities filings and the press releases that were released this morning. If you did not receive a copy of these releases, please contact our investor relations department at 210-822-2828 or go to our website at www.ClearChannel.com or www.ClearChannelOutdoor.com. A replay of this conference call will be available for 72 hours. I will now turn the call over to Mark Mays, our CEO.

Well, thank you, Randy, and good morning. Thanks, everybody, for joining us for the Clear Channel Communications and Clear Channel Outdoor call. As you know, this call will cover both Clear Channel Communications and Clear Channel Outdoor. For the call, I will review each of the operating segments and after I have completed my operating commentary, Randall will review the financials for both companies. We will then open it up to Q&A for both companies. I would like to begin my discussion this morning by telling you how excited I am about our performance, about where we are, and how thrilled I am about where we are going. As you know, when we announced and implemented our strategic realignment last year, our primary purpose for implementing the plan was to create an environment for our operating divisions that would foster long-term growth. As we stated in our last earnings call, we are focused on: The Q1 and Q2 performance clearly demonstrates that the investments we have made in our businesses are paying off, and we believe our momentum is carrying us into Q3 and beyond. Looking at the specific numbers for the second quarter of 2006, Clear Channel Communications reported revenues of $1.85 billion, which represented year-over-year growth of 7%. OIBDAN, defined as operating income before depreciation and amortization, non-cash compensation expense, and gains and losses on disposition of assets, was $647 million or 10% year-over-year growth. Clear Channel Outdoor reported $748 million in revenues, or 9% year-over-year growth for the second quarter. OIBDAN was $242 million, reflecting year-over-year growth of 15%. As I turn to the operating divisions, let me review the radio business first. Radio revenues grew 6% during the quarter. The radio segment saw growth across its businesses including local, national, network, traffic, and the Internet. As…

Thanks, Mark. I will quickly go over some of the financial highlights, first for Clear Channel Communications and then follow that with Clear Channel Outdoor. Looking at Clear Channel Communications, CCU’s long-term debt at June 30 was $7.9 billion with leverage defined as debt net of cash divided by trailing 12-month EBITDA of 3.7 times. We continue to remain committed to maintaining a strong balance sheet and leverage levels that we believe are indicative of an investment-grade company. Since we announced our initial strategic realignment plan, we have substantially completed our return of $1.6 billion in capital to shareholders with share repurchases of approximately $1.5 billion. There is $130 million remaining under the current $600 million share repurchase authorization. CapEx for the second quarter was $92 million for CCU, with $62 million of that related to Outdoor. We had originally expected our 2006 CapEx to be at relatively the same level as 2005 CapEx of $330 million; however, we have had several initiatives and contract wins within our international Outdoor business that will increase revenue-producing CapEx, which will in turn push total CapEx for CCU up to $350 million to $360 million for the year. Major contract wins contributing to the increase in revenue-producing CapEx were in Shanghai, Rome, and Stockholm, as well as more aggressive digital build out. Flipping over to Clear Channel Outdoor, CCO's total net debt at June 30 was $2.7 billion with leverage, defined as debt net of cash divided by the trailing 12-month EBITDA, of 3.5 times. Just like CCU, Clear Channel Outdoor is also committed to maintaining a strong balance sheet. CapEx for the quarter was $62 million for CCO. We had originally expected our 2006 CapEx to be at relatively the same levels as 2005 CapEx of $208 million. However, as I previously noted, there are several contract wins and initiatives that result in $230 million to $240 million of expected CapEx for CCO for the year. With that, I will open up the call for questions.

(Operator Instructions) Our first question comes from Victor Miller - Bear Stearns.

Good morning, thanks for taking the call. You really set a formula reducing the minutes, the audience trends drifting up, changing your mix, increasing the yield. Maybe you could talk about those gains, the yield gains in the quarter. The revenues have gone up. The question really is, is the rest of the industry following? To what extent do you think that the rest of the industry has to follow in order for the industry to advance? I'd like to get John's thought on that if he's joined you. Secondly, Randall, as you do grind down to the last $130 million of the return of capital, how do you look at returning capital going forward? Should we expect another similarly sized move on that? Thanks very much. Bye.

Good morning, Victor. Thanks for the comments. Our yield performance, like all of our key metrics, were really very, very strong in Q2. Our yield per minute was up over previous quarter. Our rates were directionally positive. Our overall use of the available inventory was also very, very encouraging. We're really proud of the fact that our managers continue to use what I think are the best diagnostics in the industry; our ability to see what inventory we have available, to price it intelligently to get the best yield, to use a variety of spot links so that we can be as responsive as possible to both of our customer bases, our listeners and our advertisers. As far as the industry, I think that some of our competitors clearly understand that we need to be consumer-centric, that we need to be programming our radio stations so that we give people more of what they come to radio for, and that is content. That we need to be more creative and innovative in how we put commercials into the mix. I think some of them are doing that. I think some others are less likely to have acknowledged that the environment has changed. We don't think that the old idea of a unit is a unit is a unit necessarily applies today. It certainly doesn't apply for listeners. It is hard to engage someone for 60 seconds. We think by offering a variety of spot length and spot positions, that we're providing a better product. I think as our performance continues to improve, as our performance continues to outpace the industry, that our competitors will look at that and hopefully take from that things that can help them improve, as well.

The other thing I would add on that, Victor, is that the one thing that we have spent an enormous amount of time, energy and money on is getting incredible systems. John has such great diagnostic capabilities within his organization, that he's able to see and react and do things that other competitors, unfortunately, are not able to do. One of the things that we're looking at is whether we're better off, from an industry perspective, if everybody had really, really good systems like ours. So you should anticipate that we're looking at different things like that to enable them to be better at how they react to advertisers and how they can help get new categories and new advertisers into radio.

Flipping over to the second part of that question, which I think primarily dealt with how are we going to utilize the free cash flow? Obviously that's a question that we love to get, because it means we have a lot of free cash flow that we can do something with. So hopefully we'll keep getting that question. We talked a lot about it in the past. I think on a more holistic level looking at it, obviously, there's a couple of buckets that we can push free cash flow toward. We can continue to use it to pay dividends. We can buy back stock. We can make acquisitions -- and I would include in that bucket revenue-producing CapEx -- or we can pay down debt. I think right now we're comfortable with our current dividend policy. That doesn't mean that we won't continue to look at it. But I think we feel pretty good about where we are from a dividend payout level. On the share repurchase side, we bought back some $4.3 billion worth of our stock. We do have $130 million remaining on our current share repurchase authorization. We continue to believe that at current valuations our stock is compelling, so we continue to believe that that's a very good use of free cash flow. I think as you look on the acquisition side, certainly looking at it from the CCU perspective, and on the broadcast side I think that you should expect that we would be very cautious with respect to making acquisitions in the broadcast arena, primarily because if you look at the implied valuation on our broadcasting business within CCU, it's substantially below where I think we can acquire things in the private market. That being said, that doesn't mean that there might not…

Thank you very much.

Thank you. Moving on to Jonathan Jacoby - Banc of American Securities.

Good morning. The first set of questions is a little bit of a follow-up and geared to Mr. Hogan. Maybe we can bear down a little bit. If you can go through roughly what your units are versus last year and what you are seeing in terms of pricing on the 60s, 30s, 15s on the year-ago rates so we can kind of get a little bit more sense on the yields? Also, the second question is ratings seemed to have pulled back in the first half of this year. Do you think this is more just related to the “less is more” comparison? May we see a reacceleration? Also there's been a re-jig of the Hispanic group in the Arbitron ratings. I wonder if that is an impact. The third question is Internet and other platforms. What percentage of revenues are these right now? Where do you see it growing at? What is the current growth rate? Thanks.

Jonathan, before I let John jump in on that, I'd like to make one comment, because you said something in there that I'm not sure the data would reflect, and that is that the ratings have pulled back. If you look at it, our ratings have continued to grow and we're very excited about that. The other thing that I think is very compelling is that if you look at the Arbitron rated markets, the 130 markets or whatever markets that Arbitron rates, if you look at the 120 markets that Arbitron rates that we compete in, radio listening is up 1.8% over the winter. Compared to markets where we don't compete in, the radio listening is up 0.5%. The only reason I think that's an interesting data point is I think it clearly shows that what we're focused on is bringing good content and focused on one of our biggest customers, our audiences. We have to find ways to make sure those audiences find radio compelling and that content compelling. I think as we look at it, we're trying to get more people to the radio dial and that's one of the things we've really been focused on. We think that we're doing that, and clearly the markets that we're competing in, that clearly is the case. So I think that's a good data point with regard to just the overall rating industry. With that, I'll turn it over to John for more of the specifics.

Good morning, Jonathan. I'll try and address the questions that you raised. I think to put a little context around it, I am going to reiterate how important and how beneficial our diagnostic systems have been for us. We have terrific real-time accuracy and insight into what inventory available, what inventory has been sold, what the pricing on the inventory has been. I think it has allowed us to do a much better job of managing that inventory and increasing our yield. Again, I would say that the skill level and the fluency, if you will, that our managers have with our systems has increased tremendously from this point last year and continues to get better. Having said that, I would tell you that our rates are better in Q2 on 60s, on 30s, on 15s. We are, as I said, directionally positive there. The utilization of the available inventory continues to be encouraging. We sold more of the available inventory in Q2 than we did in Q1. The percentage of shorter-length commercials that we employed and our advertisers took advantage of was around 35%, which we think is really very encouraging. I think you asked if some of this was due just to maybe weaker comps --

No, I was asking on the ratings. Mark, actually I think the difference, the way I look at is, we look at it revenue weighted by market versus just absolute markets.

That's good, because if you look at it that way, that's the way we look at it, too, clearly. If you look at it, our 18 to 34 revenue-weighted ratings are up 2.5% for the spring booked year-over-year. Clearly way up over the winter. But up 2.5% year-over-year. They're about flat on the 25 to 54 revenue-weighted. But if you look at it, clearly the top 10 revenue stations, top 20, they are significantly up, in other words, in the 25 to 54 category. If you look at our top 10 revenue stations, they're up 4%. If you look at our top 20 stations, they're up almost 3%. So as we look at it, we're very positive on the spring ratings book, particularly if you look at it on a revenue-weighted basis.

I think that it goes together pretty nicely. We've created a better environment, a better experience for our listeners. We have reduced the amount of overall commercial and promotional inventory. We have reduced the length of our spot breaks. Clearly the listeners have been responsive. That has translated into better revenue performance because we're giving advertisers a better opportunity. We're giving them a competitively advantaged experience. There are better positions for them, and so we think they go hand-in-hand. As it relates to the Internet, that is another area that we're extremely excited about. As it relates to the Internet, that is another area that we are extremely excited about. Our Internet opportunities to grow for both listeners and for advertisers. The richness and the variety and quality on our websites gets better literally every day. What we can offer listeners on these sites is really highly compelling. It is a terrific online extension of the great local brands that we have. We focused on creating great content first, and now have turned to monetizing that content. Our revenue growth on the Internet was up in double-digits in Q2. We expect that kind of strong revenue performance would continue. We do not break it out anymore specifically than that, but it is a very, very exciting area for us.

As we said last quarter, Jonathan, if you look at the new initiatives, and as John said, they are growing double-digits, but if you look at whether it is the Internet or the podcasting or the HD radio and traffic content, all of those -- they are obviously our fastest-growing segments. That is the good news. The bad news is they are still less than 5% of our overall revenues, so we hope to continue to grow those so they become a more significant portion over the next couple of years.

Thank you. We will now move on to John Blackledge with JPMorgan.

Thank you for taking the question. I am going to go to the outdoors side. I am just wondering if you can comment on the London digital boards, any initial thoughts there. When can we think about Clear Channel Outdoor significantly scaling up its digital operations, or is it going to be more targeted approach that we are currently seeing out of Clear Channel Outdoor? Thank you.

Paul is with us, so I am going to let him talk a little bit about that. I will just add a couple of comments at the beginning here, which is we think digital is a great opportunity for outdoor, as we have said time and time again. We think the digital transformation will enhance the overall revenue streams of outdoor because it will enable advertisers to use outdoor differently than it is using it currently. It will enable an advertiser to day-part, it will enable advertisers to be very price sensitive if they want to do price advertising -- all of those types of advertising categories that we are currently not participating with on the outdoor side, that will enable us to go after those dollars. So as we look at it, we are very excited about the digital. That being said, we want to temper that excitement with fiscal responsibility and prudently making sure that we are rolling out the very best technology, and we are rolling it out in a way that advertisers want to utilize it. Clearly what we have seen is our Cleveland experiment has shown that using outdoor in the networks has been by far the most advertiser-friendly component to that rollout, so as we do that, as we have announced, we have announced Vegas and London and we announced Albuquerque yesterday, you should anticipate that we are going to continue to roll it out prudently. At the same time, as quickly as we can in the prudent fashion. With that, I will turn it over to Paul.

Let me first respond to the question on the London deployment. As we previously announced in London for the first time, we are moving from LED technology to Magink technology, which is a very different technology that has a number of advantages, one of which is much, much less power consumption. Another is that the overall capital cost of that technology is less. We actually have had the first Magink display delivered in London. It is currently being tested at our corporate headquarters in London, and the response to how it has projected images has been very, very positive. In fact, we had a press meeting and a special invitation to clients and agency demonstration about a week ago in London, and everybody reacted very positively. So we are pleased with how the technology is showing, both in the daytime and at nighttime. We will be beginning our deployment over the third quarter and expect it to be fully operational some time early in the fourth quarter. I think Mark has pretty much answered the second question, and that is we do -- our plan right now is to continue our targeted approach to networks. We have network planning going on in virtually all of our major U.S. markets at a select number of European markets, and we will continue to launch networks in those markets over time, experimenting with technology, experimenting with how we sell and how we price.

Thank you very much.

Thank you. We will now move on to Eileen Furukawa with Citigroup.

Thanks for taking the questions. First, you talked about acquisitions, but can you give us an update on your interest in potential sales of non-core assets to monetize remaining NOL’s? Also, is there any remaining tax refund to be delivered from already applied NOL’s? If so, what is the amount and when might you get that? Finally, we have heard some mixed messages on demand for radio assets. CBS has been out there saying they have seen strong interest trends, and yesterday Radio One said that they saw less than they expected in interest. Have you been out there taking the temperature of potential interest in any of your assets? If so, can you tell us what demand you think exists out there? Thank you.

Could you repeat the second question?

Sure. We have seen mixed messages. CBS has said that they have seen strong…

No, we got that one, the demand. I got the first one, which is the sale of assets utilized the NOL. What was the second one?

Do you have any tax refunds to be delivered and what is the amount and when are you going to get it?

The tax refund. Okay. If you look at it, Eileen, I will try to answer one and three and then I will let Randall clean up everything that I missed. As you look at it, as we have said, our focus first and foremost primarily is how do we grow the overall cash flow of the companies. As I have said, we think that we have done a great job of aligning and capitalizing our companies to enable them to grow very, very quickly. We obviously did a lot of work on that last year. One of the things that we did was we created a NOL with a spin-off of Live Nation. That is clearly an asset that we have. What we do not want to do is rush into anything with regard to the utilization of that asset. You can assume that it is an asset that we are looking to figure out how to utilize. At the same time, we want to make sure that we are not going to do anything that inhibits the overall growth rates of the company, because we think that is going to maintain the biggest shareholder value increase. That being said, you should expect that we are continually looking at it and when we have something that is worthy of announcement, that we will announce it. With regard to demand for radio stations, we have not been out there testing the markets. It is so easy for us, and our belief, as Randall said, that utilization of our free cash flow and buying what we think are very attractive implied multiples of our stock that it is difficult for us to go out there and make acquisitions that make any sense with regard to that.

Then, the question on the tax refund is we are expecting a tax refund some time in the fourth quarter, maybe toward the end of the fourth quarter. We are expecting approximately $270 million for the tax refund.

Thank you very much.

Thank you. We will now hear from Lee Westerfield with BMO Capital Markets.

Thank you, gentlemen, good morning. I just have two questions on the radio side for John, and then if I can get some elaboration on one thing on the outdoor side. John, in the less is more program, or I should say, now that we are well beyond the anniversary of less is more, you are still seeing yield per minute increases, and by my calculations, they are close to 9% -- a little over 9% in the second quarter. However, your commercial reduction, there has been a very slight commercial reduction in the past couple of months. It has been basically equal to that of your other peers, roughly 1%. So I wonder if you can help us get a better understanding of where that yield per minute leverage is coming from. Is it 30’s, or is it the cycling through of bonus time that was much lower priced a year ago and still phasing through? Where is the leverage coming from? Basically, I am targeting how long can we expect you to continue to outpace fears next to the benefits of less is more. The question on the outdoor side, Mark, you made a comment about international in Western Europe reversing trend in the third quarter and yet you do not expect that to be enduring. I wonder if you could elaborate what you are seeing as to why that would not be enduring.

Okay. John, do you want to take the…

Good morning, Lee. I think the leverage as it relates to yield per minute and the improvement that we are seeing there really comes from several different places. One is a continued improvement in our programming and in turn, our ratings. We talked about that a little bit. It is something that we are very focused on and very proud of, and believe has helped contribute to an increase in yield. The second thing, as I said earlier, is a greater familiarity and expertise by our managers with the diagnostics that they have available to them. No one has better insight into the capacity, the sell-outs, the pricing than our managers have. I think what you are seeing is that tool, or those tools being put to use in helping us get a better result. Also, we are certainly seeing increases in our rates. There is also a greater not only acceptance but embrace of the shorter-length commercials. At this time last year, we were aggressively selling the concept of 30’s and 15’s, thanks to very strong efforts, both locally and nationally. The idea has really taken hold and advertisers have migrated towards these innovative choices, and they are employing 30’s, 15’s, and even shorter length commercials. The five-second adlets that we have, and also you may have heard of our one-second spot, the Blink. All of those are gaining traction with advertisers and helping us increase the overall yield.

On the outdoor side, I am going to let Paul answer that one, since he is with us.

Thank you, Mark. In terms of the international markets, in particular the larger Western European markets, I think in a couple of countries, we have had some what I would call internal restructuring issues, which we have been working through, and I think are going to be particularly significant to those countries in the third quarter, but by the time we get through that third quarter, they will be behind us. For example, in the U.K., we knew we had some challenges with our billboard industry and some challenges with how management was structured in the U.K. We have gone through significant management changes there. We have restructured our sales force. We are in the process of restructuring our compensation system. We have also adopted a number of new product offerings, and those product offerings I think will have a positive effect over the balance of the year, including launching our premium billboard business, 150 of the most significant billboard locations throughout the greater London area in particular, and of course, we are going to be launching our digital network in the U.K. Similarly, in France, we have had an awful lot of focus going into the third quarter on the French restructuring. Now that we have that social plan not only approved but now actually implemented, I think our French management team is in a position to focus much more on the revenue generation side of the business. As always, pacings are not always completely reflective of what results are going to be in a particular market. The example I would pick there would be Italy. Italy right now, among those Western European markets, probably has the weakest pacing going into the third quarter, but we have already seen signs that Italy, which had a very, very strong second quarter, will improve significantly at its pacings over the course of the quarter.

Gentlemen, thank you very much.

The only other thing I would add, Lee, is if you look at some of the Western European, like for instance, Spain, where we got out of some transit contracts that were very unprofitable for us, -- actually, while our revenue would be down, our OIBDAN would be up in that country as well, so there is, as Paul said, some extenuating circumstances, and some of them are those countries which give us confidence as we move forward.

That is helpful. Thank you.

Thank you. We will now move on to John Klim with Credit Suisse.

Good morning. Two quick questions for you. Could you touch on the regulatory environment at the radio vision, and specifically on your thoughts surrounding regulatory release in local markets? Secondly, the outdoor division, and the international divisions specifically, should we anticipate margin expansion at that segment over the next three to five years? Would you be interested in exiting any international markets that you currently operate in? Thank you.

Okay, John, let me take a stab at some of those, and anybody can jump in that feels like they are adding. On the regulatory ownership, as you look at it, the radio local ownership limits that have been out there I think are old and very arbitrary at this point and do not make a whole lot of sense. That starts with the very large markets and the fact that a place like New York, where there are 60, 70, 80 radio stations, yet we are limited to eight does not make any sense from a media ownership perspective, particularly when you look at all the other different media that we compete against -- one, two, three newspapers, five or six TV stations -- it just does not make a whole lot of sense. So we think that rationale and logic will prevail. That is not always the case in Washington, D.C., so I guess that is what we believe is, is that over time we will have regulatory relief on the ownership side and on the local ownership side. The question becomes is when will we get that. Will we get it in the near-term or will we get it in the long-term? Our belief is that we are going to continue to educate policy makers on the irrationality of the existing regulations and how and why we should get relief from it. I think we as an industry are united in that front, and so I think you will continue to see the radio industry push for that. On the margin expansion, as Paul was saying, we do think that there is margin expansion opportunity in, and particularly in, our Western European markets, and that is why we have been spending an enormous amount of time focused on that. That is, as Paul said, the restructuring in France and getting the cost side out. That is a big part of figuring out how to expand margins in France. The U.K. reorganization, realignment is a very big focus of how to get margin enhancement out of the U.K. So as we look at it, we do believe that there is margin expansion in the international side over the next three to five years. As you look at the -- we are always very prudent with regard to portfolio management of looking at, on the international side, of entering into, getting into countries that we are not in, particularly from an organic perspective. For instance, Korea and Japan, we think there is opportunity on the [inaudible] side, but you could also expect that we look and continue to look at our portfolio. We have exited countries that we did not think would have a meaningful contribution to the overall sector as well. You should expect that we will continue to do that.

Thanks very much.

Thank you. We will now move on to Mark Wienkes with Goldman Sachs.

Thank you. Could you provide a little more color on the strength of the outdoor business domestically by asset class? Any color on the Innerspace acquisition you are willing to share with us? Then, lastly, just a follow-up on the restructuring efforts in Europe, most of that sounds like they are impacting the cost side of the business, so even with the revenues pacing down year over year, could you combine the cost cuts there with the nine European international operations, would you expect EBITDA growth year over year in the international business in the third quarter?

I am going to let Paul try to -- there were a lot of questions in there. I am not sure I got it totally, but I am going to let Paul try to answer some of it. The business for the third quarter on a domestic side is pretty broad-breadth, if you look at it. It is across lots of different product segments, lots of different markets. It is fairly broad-breadth, so I think that is a positive. It is not necessarily one sector or another.

There is nothing you see there that would make you change that? If it continues, then into 4Q, I guess is what I am asking for. How much visibility do you have that will extend into 4Q?

We are optimistic that it will continue into 4Q. Nothing would lead us to believe at this point that it is not going to extend into 4Q. Activity levels continue to be extremely high for outdoor, as they do for radio as well. It is an overall business environment in the advertising for outdoors is extremely well done. As we all know, it is a very good mechanism for advertisers to use and there continues to be more advertisers using it and more advertisers using more of it, so we see a lot of activity that it would be positive for Q4 and beyond. Do you want to talk about Innerspace?

Sure. Innerspace acquisition really has gone very well for us, with the business performing as projected. We are very excited about the local sale model that they have developed, and developed so effectively with good, solid margins. It is a model in which they have now proven they can export outside the U.S., so we anticipate that the Innerspace, the small- to mid-sized airport business will continue to grow and will not only grow domestically but will grow outside of the U.S. The other real attraction of this business, as we have indicated in the past, is that when we put the two businesses side by side, they really -- when I say the two businesses, I am talking about Innerspace and then our prior large airport business, they really complement one another extremely well, because our national sales force can now start moving national business, which was more difficult for Innerspace to obtain, into Innerspace’s larger airports. At the same time, we are looking at Innerspace to provide a very effective local sales program for unsold inventory in our large airports. We are very pleased with the acquisition and how it has been going.

Mark, now with regard to your last question with regard to international, we would anticipate international being up for the year, so I am not sure if that was the question or not. In addition, we are focused on the cost side of the equation, but we are also focused on the revenue enhancement side of the equation. As Paul said earlier, with regard to reorganizing some of our assets and making better product offerings for the advertisers. We are focused on both line items with regard to margin expansion on that.

Thank you.

Thank you. We will now move on to Jason Helfstein with CIBC World Markets.

Thank you. Three quick, easy questions. Can you actually give us numbers for pricing versus inventory? I understand you do not want to give an exact breakdown on your different unit lines, but maybe on average, what was the average pricing up in the quarter versus inventory? Number two, can you give us some specific numbers with respect to digital? How many displays did you have at the end of the quarter, and maybe in how many cities did you have displays? Lastly, because I do not think it was in the press release, how much stock did you buy back in the quarter? Thank you.

Pricing, inventory -- if you look at the yield, most of the yield enhancements was due to pricing rather than occupancy, with regard to radio. On the digital side, on the digital rollout side, we continue to -- I think our target, as we said, was four to six networks to roll out by the end of the year. Obviously we already have four rolled out with Cleveland, Las Vegas, Albuquerque and London, so you should anticipate that we are going to roll out a few more. We kind of think that we will be ahead of that target with regard to the network rollouts with regard to digital. Obviously, as we look at it, we are very excited, as you know, from the Cleveland results and the results that we have had to date on those digital networks, so as we said, we are prudently but quickly rolling those out where we can get the regulatory approval and be financially responsible with doing it. I did not hear what the third question was.

During the second quarter, we bought back about 227 million of stock. Since the end of the second quarter, we have bought back a little over 150 million in stock. I think all that will be disclosed in the Q, which will be filed.

Then, just a quick follow-up. How many displays do you have on average per network?

They vary by market, but if you look at the networks that are in place and you look at the ones that are being planned, I would say that they range between six units and 10 units.

Thank you very much.

Thank you. We will now move on to Laraine Mancini with Merrill Lynch.

Good morning. In your numbers, or in your press release, you indicated that for radio, auto was up, which we have not heard from anyone. Is there something about less is more that is causing you to get more auto out of the market, or is it imports as opposed to domestic and you just have more exposure there? Second, on the outdoor side, do you have any types of digital economic statistics that you can give us? Lamar had multiples of revenue and EBITDA margin expansion that they like to talk about. Do you have any of those types of statistics you can give us?

I will talk to you about the automotive success we have been having. It is something that we are very encouraged about. I think less is more has some fundamental impact on it by being more attractive to both listeners and advertisers. But more importantly, advertisers generally, and automotive advertisers in particular, are looking for results. What we have focused on is being the company that can provide the most opportunities, the most potential solutions, the most choices for advertisers, and we have been able to go to automotive clients with a wide variety of options. Many of the successes that we have seen in converting folks from 60’s to shorter length commercials have been in the automotive field. Many of the advertisers who have taken advantage of our creative services group and who have used the resources to create more compelling, more powerful, more effective commercials have been in the automotive industry. I think that the third thing is that we have just gone to them with better ideas. We had a great success earlier this year in working with Volvo on a Pirates of the Caribbean promotion. That employed a lot of creative elements. We have what I think is a very innovative program that we are doing right now in Phoenix. It is called Test Drive Wednesday, and the short version is that it marries the power of our on-air presence with the power of our online presence to really drive folks to both the web and to the dealership to see the offerings that are there for the group in Phoenix. I guess the most succinct way to say it would be that we are very, very customer-focused. We know that our advertisers are looking for more and better solutions. As they get into more competitive environments, they are turning to us for better solutions. We are talking to people in the automotive industry, but also really in every category at higher levels about more creative, innovative solutions, more in-depth conversations, and you are seeing it in the increased revenues from that category and others.

Laraine, with regard to -- great question on the digital economics. I think the good news is, and you highlighted it, is that as we look at it, our experience has been that we do get an up-lift, and it is a multiple of revenues type of up-lift, with regard to the digital networks. What I think we are cautionary on is having a few data points and trying to create some type of formulaic experience that you can roll out over an X amount of inventory, anything like that. I hope you can appreciate being cautionary with regard to that. I think the good news is that digital we know is going to provide great rates of return for capital deployment, and we know that it is going to provide a big up-lift in revenue, and we know that it is going to have a margin enhancing effect. All of those are extremely positive and we would be cautionary with regard to how we want to be specific on the formulaic aspects of that. I hope you can appreciate that. If we can have one last question.

Thank you. Our final question will come from James Dix with Deutsche Bank.

Good morning, gentlemen. Just three quick questions, hopefully. Two on outdoor. First, in the second quarter, just any color you can give on the Americas growth by national versus local advertising, and then any changes in those trends going into the third quarter. Secondly, on outdoor, it looked like operating expense in the Americas was up around 6%. I think Mark, you mentioned in your opening remarks there was some impact of mix that affected overall op-ex growth. Was that in the Americas specifically? If you could provide any color on that. Finally, on radio, I guess any color you could provide on the growth of your traffic business, either in terms of revenue or affiliates or product lines, would be very helpful. Thank you.

I am going to try to hit the second and third. I will let Paul come in and answer the national and the local. With regard to the operating expenses, as it is, if you look at it, a little bit of a mix. There is a little bit higher-than-normal. A lot of that has to do with the variable component on the domestic side. The biggest driver of that is our airport business did very well, and that tends to be a higher revenue share business than traditionally. With regard to radio and the traffic growth, obviously traffic is great local content, something that we are extremely focused on creating more and better local content, and therefore we will continue to grow that traffic business on an organic basis, and you can anticipate that we are going to continue to look for opportunities to monetize that the best we can, whether that is through different distribution mechanisms, whether that is through affiliates, existing radio partners or what not, so you should anticipate that we are going to continue to grow that business. With regard to national and local, Paul.

In the second quarter, our national business was up around 9%, driven a lot by the tremendous increase in our airport revenue, which is in the big airports, principally a national business. Our local business was up about 4%. That is almost a reversal of how those two broke out in growth in the second quarter.

Is it looking similar in the third?

We have not -- we do not really do our calculations between national and local until we get toward the end of the quarter, but as I look at our business, as it is developing in the third quarter, I think we are going to show good growth, both nationally and locally.

Thanks very much.

One thing to add on the traffic, John?

Well, just a couple of specifics -- we enjoyed double-digit growth in Q2 in traffic. We have added affiliates, both Clear Channel affiliates and non-Clear Channel radio and television stations. In terms of other products, that is something that we are very actively engaged in and are beginning to see some success with, is by providing the data that we have collected to a variety of third-party providers -- the in-car navigation, the automobile manufacturers and others have really seen that we do have very high quality content and we have been working with them. Traffic is really an example of why I think our success is sustainable across the board. We were creating better products. We are providing more choices. We are putting more people against the revenue opportunities and whether it is traffic or the Internet or our local or national spot base, NTR, we think that we have a very sustainable business model because of the work that we did over the last year or so, beginning with LIM and then including a number of other initiatives.

Thanks, John, and thank you all for taking your time this morning. As you can tell, we are extremely thrilled with our performance in the second quarter. We think that the momentum, as we have said, is carrying us into Q3 and beyond, so we are extremely excited about how our positions are set up to perform. We are extremely excited about the management teams that have put in place to make those assets and businesses perform so well. Thank you for taking the time to listen to us this morning and have a great week.

Thank you. That does conclude today’s conference call. We thank you for your participation. Have a great day.