Clear Channel Outdoor Holdings (CCO)

Effective Tax Rates

The Company’s effective tax rate for the three months ended March 31, 2009 was a negative 28.8%. The 2009 effective rate was impacted as a result of the Company’s inability to record tax benefits on net losses generated in the current period. Due to uncertainty on future taxable income and limitations on net operating loss carryback claims allowed, the Company cannot realize deferred tax assets which arose in the three months ended March 31, 2009 and may arise as a result of future period net operating losses. Pursuant to the provision of Statement of Financial Accounting Standards No. 109, Accounting for Income Taxes (“Statement No. 109”), deferred tax valuation allowances are required on those deferred tax assets. For the three months ended March 31, 2008, the tax expense recorded was at an effective tax rate of 8.3% and was favorably impacted by the nonrecognition of tax on the $75.6 million book gain recognized from the sale of our 50% interest in Clear Channel Independent.

Effective Tax Rates

The Company’s effective tax rate for the pre-merger period from January 1, 2008 through July 30, 2008 was 23.7%. The effective rate for the post-merger period from July 31, 2008 through September 30, 2008 was 23.8%. The effective rate for the pre-merger nine and three months ended September 30, 2007 was 39.6% and 38.2%, respectively. The lower effective rates in 2008 are primarily due to the tax free disposition of Clear Channel Independent mentioned above and the favorable settlement of certain tax return examinations.

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