Clear Channel Outdoor Holdings, Inc. (NYSE: CCO) today reported
financial results for the fourth quarter and year ended
December 31, 2016.
“We continue to invest in transforming our Americas and
International outdoor businesses to more effectively compete in an
increasingly digital world,” said Bob Pittman, Executive Chairman
and Chief Executive Officer of Clear Channel Outdoor Holdings, Inc.
“Both Americas outdoor and International outdoor made great
progress in building out their industry-leading data-rich,
analytics capabilities and programmatic ad-buying solutions to do
business in the same way that the advertising industry does today
while expanding their digital networks and winning new
contracts.”
“We are pleased with the successful execution of our strategic
initiatives this year,” said Rich Bressler, Chief Financial Officer
of Clear Channel Outdoor Holdings, Inc. “In the fourth quarter and
full year 2016, consolidated revenue declined and operating income
increased. However, excluding the impact of the 2016 sales of
certain U.S. markets and International businesses as well as
foreign exchange, Americas outdoor and International outdoor
revenues, operating income and OIBDAN all increased. Throughout
2016, we continued to invest in innovative products at both
businesses for the benefit of our audiences and partners while
maintaining tight operating and financial discipline.”
Key Financial Highlights
The Company’s key financial highlights for the fourth quarter of
2016 include:
- Consolidated revenue decreased 5.9%.
Consolidated revenue increased 4.7%, after adjusting for a $19.8
million impact from movements in foreign exchange rates and the
$58.9 million impact of markets and businesses sold in 2016.
- Americas revenues decreased $17.2
million, or 4.7%. Revenues increased $10.5 million, or 3.1%, after
adjusting for a $0.1 million impact from movements in foreign
exchange rates and a $27.9 million impact from the sale of
non-strategic markets in the first quarter of 2016.
- International revenues decreased $28.4
million, or 7.0%. Revenues increased $22.5 million, or 6.2%, after
adjusting for a $19.9 million impact from movements in foreign
exchange rates and a $31.0 million impact from the sale of our
businesses in Turkey in the second quarter of 2016 and Australia in
the fourth quarter of 2016.
- Operating income increased 115.7% to
$250.9 million.
- OIBDAN decreased 3.8%. OIBDAN increased
9.6%, excluding the impact from movements in foreign exchange rates
and the impact of the non-strategic markets sold in 2016.
The Company’s key financial highlights for 2016 include:
- Consolidated revenue decreased 3.7%.
Consolidated revenue increased 2.7%, after adjusting for a $47.6
million impact from movements in foreign exchange rates and the
$125.4 million impact of the markets and businesses sold in 2016.
- Americas outdoor revenues decreased
$70.6 million, or 5.2%. Revenues increased $39.9 million, or 3.2%,
after adjusting for a $7.7 million impact from movements in foreign
exchange rates and a $102.7 million impact from the non-strategic
markets sold in the first quarter of 2016.
- International outdoor revenues
decreased $33.2 million, or 2.3%. Revenues increased $29.3 million,
or 2.2%, after adjusting for a $39.9 million impact from movements
in foreign exchange rates and a $22.7 million impact from the sale
of our businesses in Turkey in the second quarter of 2016 and
Australia in the fourth quarter of 2016.
- Operating income increased $376.5
million, or 144.3%.
- OIBDAN decreased 4.1% and increased
4.9%, excluding the impact from movements in foreign exchange rates
and the impact of the markets and businesses sold in 2016.
Key Non-Financial
Highlights
The Company’s recent key non-financial highlights include:
- Installed 31 new digital billboards in
the fourth quarter and 82 over the full year for an end of year
total of 1,113 across North America, and installed 1,077 digital
displays in the fourth quarter and almost 3,600 over the full year
in the International markets for an end-of-year total of more than
9,600.
- Launched first nationwide programmatic
private marketplace (PMP) solution in the U.S. for out-of-home
ad-buying. This will enable advertisers and brands to purchase
almost 1,000 of Americas outdoor's high impact digital inventory
billboards at scale, seamlessly, within a PMP.
- Being named to AdWeek's Top Mobile
Innovators of 2016 for the launch of RADAR - the industry's first
suite of third-party research, data and mobile analytics tools for
planning, attribution, measurement and retargeting - as well as the
integration of RADAR into the first-to-market programmatic
out-of-home buying solution via private marketplaces.
- Introduced the first out-of-home
programmatic buying tool in Europe - this automated solution is
live in Belgium with plans to continue the roll-out across Europe
including the UK in March. Customers can now access and buy
audience-based packages on an Automated Guaranteed basis across
Clear Channel's digital out-of-home network in the city of
Brussels.
- Awarded 10-year contract extension to
provide Nashville International Airport with an entirely new
digital advertising network that will include technologically
sophisticated, state-of-the-art media.
- Won five-year partnership extension to
bolster the digital media program for Austin-Bergstrom
International airport.
- Renewed the city of Lyon transit
contract for seven years to operate out-of-home advertising across
its buses, bus shelters, Tramway and Metro. Lyon's metro system is
the second largest in France after Paris.
GAAP Measures by Segment
(In thousands) Three Months EndedDecember 31,
%Change Year EndedDecember 31,
%
Change
2016 2015 2016 2015 Revenue Americas $
347,355 $ 364,536 (4.7 )% $ 1,278,413 $ 1,349,021 (5.2 )%
International 379,116 407,529 (7.0 )% 1,423,982
1,457,183 (2.3 )%
Consolidated revenue
$ 726,471 $ 772,065
(5.9 )% $ 2,702,395 $
2,806,204 (3.7 )% Direct Operating and
SG&A expenses1 Americas $ 207,026 $ 213,096 (2.8 )% $ 795,725 $
830,636 (4.2 )% International 279,372 313,070
(10.8 )% 1,155,046 1,195,770 (3.4 )%
Consolidated Direct Operating
and SG&A expenses1
$ 486,398 $
526,166 (7.6 )% $
1,950,771 $ 2,026,406
(3.7 )% Operating income Americas $ 95,558 $ 98,500
(3.0 )% $ 297,034 $ 313,871 (5.4 )% International 60,061 53,360
12.6 % 116,178 95,353 21.8 % Corporate2 (32,955 ) (30,510 ) 8.0 %
(123,095 ) (121,768 ) 1.1 % Impairment charges — —
nm
(7,274 ) (21,631 ) (66.4 )% Other operating income (loss), net
128,203 (5,068 ) (2,629.7 )% 354,688 (4,824 )
(7,452.6 )%
Consolidated Operating income $
250,867 $ 116,282 115.7
% $ 637,531 $ 261,001
144.3 % 1
Direct Operating and SG&A Expenses as
included throughout this earnings release refers to the sum of
Direct operating expenses (excludes depreciation and amortization)
and Selling, general and administrative expenses (excludes
depreciation and amortization).
2 Includes Corporate depreciation and amortization of $1.5
million and $1.4 million for the three months ended December 31,
2016 and 2015, respectively, and $5.7 million and $5.4 million for
the years ended December 31, 2016 and 2015, respectively.
Non-GAAP Measures1 (see preceding table for
comparable GAAP measures)
(In thousands) Three Months EndedDecember 31,
Year EndedDecember 31, %
Change
2016 2015 2016 2015 Revenue
excluding movements in foreign exchange Americas $ 347,214 $
364,536 (4.8 )% $ 1,286,134 $ 1,349,021 (4.7 )% International
399,029 407,529 (2.1 )% 1,463,876 1,457,183
0.5 %
Consolidated revenue excluding
movements in foreign exchange
$ 746,243 $ 772,065
(3.3 )% $ 2,750,010 $
2,806,204 (2.0 )% Direct Operating and
SG&A expenses1 excluding movements in foreign exchange Americas
$ 206,766 $ 213,096 (3.0 )% $ 801,449 $ 830,636 (3.5 )%
International 293,383 313,070 (6.3 )% 1,188,284
1,195,770 (0.6 )%
Consolidated Direct Operating and
SG&A expenses excluding movements in foreign
exchange
$ 500,149 $ 526,166
(4.9 )% $ 1,989,733 $
2,026,406 (1.8 )% OIBDAN Americas $
140,329 $ 151,440 (7.3 )% $ 482,688 $ 518,385 (6.9 )% International
99,744 94,459 5.6 % 268,936 261,413 2.9 % Corporate (29,336 )
(26,812 ) 9.4 % (107,145 ) (108,021 ) (0.8 )%
Consolidated
OIBDAN $ 210,737 $ 219,087
(3.8 )% $ 644,479
$ 671,777 (4.1 )% OIBDAN
excluding movements in foreign exchange Americas $ 140,448 $
151,440 (7.3 )% $ 484,685 $ 518,385 (6.5 )% International 105,646
94,459 11.8 % 275,592 261,413 5.4 % Corporate (31,092 ) (26,812 )
16.0 % (111,274 ) (108,021 ) 3.0 %
Consolidated OIBDAN
excluding movements in foreign exchange
$ 215,002 $ 219,087
(1.9 )% $ 649,003 $
671,777 (3.4 )% Revenue excluding
effects of foreign exchange and revenue from markets and businesses
sold Americas $ 347,214 $ 336,653 3.1 % $ 1,283,664 $ 1,243,847 3.2
% International $ 388,422 $ 365,902 6.2 % $ 1,342,836 $ 1,313,491
2.2 %
Consolidated revenue, excluding
effects of foreign exchange and revenue from markets
and businesses sold
$ 735,636 $ 702,555 4.7 %
$ 2,626,500 $ 2,557,338 2.7
% OIBDAN excluding effects of foreign exchange and revenue
from markets and businesses sold Americas $ 140,448 $ 138,200 1.6 %
$ 483,985 $ 470,771 2.8 % International $ 102,445 $ 81,803 25.2 % $
250,543 $ 231,175 8.4 %
Consolidated OIBDAN, excluding
effects of foreign exchange and revenue from markets
and businesses sold
$ 211,801 $ 193,191 9.6 %
$ 623,254 $ 593,925 4.9 %
Certain prior period amounts have been reclassified to conform
to the 2016 presentation of financial information throughout the
press release.
1 1 See the end of this press release for reconciliations of (i)
OIBDAN excluding effects of foreign exchange rates and OIBDAN for
each segment to segment and consolidated operating income (loss);
(ii) revenues excluding effects of foreign exchange rates to
revenues; (iii) direct operating and SG&A expenses excluding
effects of foreign exchange rates to direct operating and SG&A
expenses; (iv) corporate expenses excluding non-cash compensation
expenses and effects of foreign exchange rates to corporate
expenses; (v) Consolidated and segment revenues excluding the
effects of foreign exchange rates and results from markets and
businesses sold to Consolidated and segment revenues; (vi)
Consolidated and segment direct operating and SG&A expenses
excluding the effects of foreign exchange rates and results from
markets and businesses sold to Consolidated and segment direct
operating and SG&A expenses; and (vii) Consolidated and segment
OIBDAN excluding the effects of foreign exchange rates and results
from markets and businesses sold to Consolidated and segment
operating income. See also the definition of OIBDAN under the
Supplemental Disclosure section in this release.
Full Year 2016 Results
Consolidated
Consolidated revenue decreased $103.8 million, or 3.7%, during
2016 as compared to 2015. Consolidated revenue increased $69.2
million, or 2.7%, after adjusting for a $47.6 million impact from
movements in foreign exchange rates and the $125.4 million impact
of markets and businesses sold in 2016.
Consolidated direct operating and SG&A expenses decreased
$75.6 million, or 3.7%, during 2016 as compared to 2015.
Consolidated direct operating and SG&A expenses increased $36.6
million, or 2.0%, during 2016 as compared to 2015, after adjusting
for a $39.0 million impact of movements in foreign exchange rates
and the $73.2 million impact of the sale of the markets and
businesses.
Consolidated operating income increased $376.5 million, or
144.3%, during 2016 as compared to 2015, primarily due to the net
gain of $278.3 million on sale of nine non-strategic outdoor
markets in the first quarter of 2016 and the net gain of $127.6
million on sale on our Australia business in the fourth quarter of
2016, partially offset by the $56.6 million loss, which includes
$32.2 million in cumulative translation adjustments, on the sale of
our Turkey business in the second quarter of 2016.
The Company's OIBDAN decreased 4.1% to $644.5 million during
2016 as compared to 2015. After adjusting for the movements in
foreign exchange rates and the impact of the sale of markets and
businesses, the Company’s OIBDAN increased 4.9% in 2016 compared to
2015.
Included in the 2016 operating income and OIBDAN were $10.5
million of direct operating and SG&A expenses and $2.5 million
of corporate expenses associated with the Company’s strategic
revenue and efficiency initiatives, compared to $13.5 million and
$6.8 million of such expenses in 2015, respectively.
Americas Outdoor
Americas outdoor revenues decreased $70.6 million, or 5.2%,
during 2016 as compared to 2015. Revenues increased $39.9 million,
or 3.2%, after adjusting for a $7.7 million impact from movements
in foreign exchange rates and a $102.7 million impact from
non-strategic markets sold in the first quarter of 2016. The
increase was primarily due to increased revenues from digital
billboards as a result of new deployments and higher occupancy on
existing digital billboards, as well as new airport contracts, and
higher revenues in Latin America.
Direct operating and SG&A expenses decreased $34.9 million,
or 4.2%, during 2016 as compared to 2015. Direct operating and
SG&A expenses increased $26.6 million, or 3.4%, after adjusting
for a $5.7 million impact from movements in foreign exchange rates
and the $55.8 million impact from the sale of non-strategic markets
during the first quarter 2016, due primarily to higher operating
expenses related to new contracts and higher variable compensation
expense related to higher revenues.
Operating income decreased 5.4% to $297.0 million during 2016 as
compared to 2015, resulting primarily from the sale of the
non-strategic outdoor markets in 2016. OIBDAN decreased $35.7
million, or 6.9%. OIBDAN increased 2.8% during 2016 as compared to
2015, after adjusting for a $2.0 million impact from movements in
foreign exchange rates and the $46.9 million impact from the sale
of the non-strategic markets.
International Outdoor
International outdoor revenues decreased $33.2 million, or 2.3%,
during 2016 as compared to 2015. Revenues increased $29.3 million,
or 2.2%, after adjusting for a $39.9 million impact from movements
in foreign exchange rates and the $22.7 million impact from the
sale of our businesses in Turkey and Australia in the second and
fourth quarters of 2016, respectively. Higher revenue primarily
from new digital assets and new contracts in China, Italy, Spain,
Sweden, France and Belgium was partially offset by lower revenue
due to the sale of our businesses in Turkey and Australia, as well
as lower revenue in the United Kingdom due to the London bus
shelter contract not being renewed.
Direct operating and SG&A expenses decreased $40.8 million,
or 3.4%, during 2016 as compared to 2015. Direct operating and
SG&A expenses increased $10.0 million, or 0.9%, after adjusting
for a $33.3 million impact from movements in foreign exchange rates
and the $17.4 million impact from the sale of our businesses in
Turkey and Australia in the second and fourth quarters of 2016,
respectively. Direct operating and SG&A expenses increased
primarily due to higher site lease and production expenses related
to higher revenues. This was partially offset by lower site lease
expense due to lower revenue in the United Kingdom, as well as
operating expenses of $11.4 million recorded in the fourth quarter
of 2015 to correct for accounting errors included in the results
for our Netherlands subsidiary reported in prior years.
Operating income increased 21.8% to $116.2 million during 2016
as compared to 2015. OIBDAN increased $7.5 million, or 2.9%. OIBDAN
increased $19.3 million, or 8.4%, during 2016 as compared to 2015,
after adjusting for a $6.6 million impact from movements in foreign
exchange rates and the $5.3 million impact from the sale of our
businesses in Turkey and Australia in the second and fourth
quarters of 2016, respectively. Operating income and OIBDAN in
2016 each include $7.4 million in expenses related to investments
in strategic revenue and efficiency initiatives compared to $11.1
million in 2015.
Clear Channel International B.V. (“CCIBV”)
CCIBV’s consolidated revenues decreased $53.7 million to
$1,168.7 million in 2016 compared to 2015. This decrease includes a
$35.3 million impact from movements in foreign exchange rates.
CCIBV’s operating income was $100.7 million in 2016 compared to
operating income of $23.8 million in 2015. This increase includes a
$5.8 million impact from movements in foreign exchange rates. The
increase was primarily due to the net gain of $127.6 million on
sale on our business in Australia in the fourth quarter of 2016,
partially offset by the $56.6 million loss, which includes $32.2
million in cumulative translation adjustments, on the sale of our
business in Turkey in the second quarter of 2016.
Liquidity and Financial
Position
As of December 31, 2016, we had $542.0 million of cash on
our balance sheet, including $180.1 million of cash held outside
the U.S. by our subsidiaries. For the year ended December 31,
2016, cash flow provided by operating activities was $310.3
million, cash flow provided by investing activities was $551.5
million, cash flow used for financing activities was $726.5
million, and there was $(6.0) million impact from movements in
foreign exchange rates on cash. The net increase in cash from
December 31, 2015 was $129.3 million.
Capital expenditures for the year ended December 31, 2016
were $229.8 million compared to $218.3 million for the same period
in 2015.
In the first quarter of 2016, we sold nine non-strategic U.S.
markets for net proceeds, including cash and certain advertising
assets in Florida, totaling $592.3 million. These markets
contributed $2.5 million and $105.2 million in revenue during the
years ended December 31, 2016 and 2015, respectively.
We sold our business in Turkey in the second quarter of 2016. We
sold our business in Australia in the fourth quarter of 2016 for
net cash proceeds of $195.7 million. These businesses contributed
$121.0 million and $143.7 million in revenue during the years ended
December 31, 2016 and 2015, respectively.
On January 7, 2016, CCOH paid a special dividend of $217.8
million using the proceeds of the issuance of $225.0 million in
aggregate principal amount of 8.75% Senior Notes due 2020 by Clear
Channel International B.V., an indirect wholly-owned subsidiary of
CCOH, in December 2015.
On February 4, 2016, CCOH paid a special cash dividend of $540.0
million to our stockholders using proceeds relating to a $300
million demand on the intercompany note owed by
iHeartCommunications to the Company and a portion of the proceeds
from the sale of non-strategic U.S. markets.
On February 9, 2017, CCOH declared a special dividend of $282.5
million to our stockholders using a portion of the proceeds from
the sales of certain non-strategic U.S. markets and of our
Australia business. The dividend was paid on February 23, 2017 to
shareholders of record as of February 20, 2017.
Conference Call
The Company, along with its parent company, iHeartMedia, Inc.,
will host a conference call to discuss results on February 23,
2017 at 8:30 a.m. Eastern Time. The conference call number is (800)
230-1092 (U.S. callers) and (612) 288-0329 (International callers)
and the passcode for both is 417884. A live audio webcast of the
conference call will also be available on the investor section of
www.iheartmedia.com and www.clearchanneloutdoor.com. After the live
conference call, a replay will be available for a period of thirty
days. The replay numbers are (800) 475-6701 (U.S. callers) and
(320) 365-3844 (International callers) and the passcode for both is
417884. An archive of the webcast will be available beginning 24
hours after the call for a period of thirty days.
TABLE 1 - Financial Highlights of Clear
Channel Outdoor Holdings, Inc. and Subsidiaries
(In thousands) Three Months EndedDecember 31,
Year EndedDecember 31, 2016 2015 2016
2015 Revenue $ 726,471 $ 772,065 $ 2,702,395
2,806,204 Operating expenses:
Direct operating expenses
(excludesdepreciation and amortization)
359,728 386,873 1,435,569 1,494,902
Selling, general and administrative
expenses(excludes depreciation and amortization)
126,670 139,293 515,202 531,504
Corporate expenses (excludes depreciation
andamortization)
31,434 29,126 117,383 116,380 Depreciation and amortization 85,975
95,423 344,124 375,962 Impairment charges — — 7,274 21,631 Other
operating income, net 128,203 (5,068 ) 354,688 (4,824
)
Operating income 250,867 116,282
637,531 261,001 Interest expense 93,056 89,609
374,892 355,669
Interest income on Due
fromiHeartCommunications
13,876 15,507 50,309 61,439 Equity in loss of nonconsolidated
affiliates (315 ) 352 (1,689 ) (289 ) Other income (expense), net
(23,953 ) (5,085 ) (70,151 ) 12,387 Income (loss) before
income taxes 147,419 37,447 241,108 (21,131 ) Income tax benefit
(expense) (39,078 ) (69,886 ) (76,675 ) (50,177 ) Consolidated net
income (loss) 108,341 (32,439 ) 164,433 (71,308 )
Less: Amount attributable to
noncontrollinginterest
6,840 8,944 23,002 24,764
Net income (loss) attributable to
the Company
$ 101,501 $ (41,383 )
$ 141,431 $ (96,072 )
For the three months ended December 31, 2016, foreign
exchange rate movements decreased the Company’s revenues by $19.8
million and decreased direct operating expenses by $10.5 million,
SG&A expenses by $3.2 million and Corporate expenses by $1.8
million. For the year ended December 31, 2016, foreign
exchange rate movements decreased the Company’s revenues by $47.6
million and decreased direct operating expenses by $29.0 million,
SG&A expenses by $9.9 million and Corporate expenses by $4.1
million.
TABLE 2 - Selected Balance Sheet
Information
Selected balance sheet information for December 31, 2016
and December 31, 2015:
(In millions) December 31, 2016
2015 Cash and cash equivalents $ 542.0 $ 412.7 Total current assets
1,341.4 1,567.7 Net property, plant and equipment 1,412.8 1,628.0
Due from iHeartCommunications 885.7 930.8 Total assets 5,718.8
6,306.8 Current liabilities (excluding current portion of long-term
debt) 634.7 916.3 Long-term debt (including current portion of
long-term debt) 5,117.0 5,110.8 Shareholders’ deficit (932.8 )
(569.7 )
TABLE 3 - Total Debt
At December 31, 2016 and December 31, 2015, Clear
Channel Outdoor Holdings had a total net debt of:
(In millions) December 31, 2016
2015 Clear Channel Worldwide Senior Notes: 6.5% Series A Senior
Notes Due 2022 $ 735.8 $ 735.8 6.5% Series B Senior Notes Due 2022
1,989.2 1,989.2 Clear Channel Worldwide Holdings Senior
Subordinated Notes: 7.625% Series A Senior Subordinated Notes Due
2020 275.0 275.0 7.625% Series B Senior Subordinated Notes Due 2020
1,925.0 1,925.0 Clear Channel International B.V. Senior Notes due
2020 225.0 225.0 Other debt 14.8 19.0 Original issue discount (6.7
) (7.8 ) Long-term debt fees (41.1 ) (50.4 ) Total debt 5,117.0
5,110.8 Cash 542.0 412.7 Net Debt $ 4,575.0 $
4,698.1
The current portion of long-term debt was $7.0 million and $4.3
million as of December 31, 2016 and December 31, 2015,
respectively.
Supplemental Disclosure Regarding
Non-GAAP Financial Information
The following tables set forth the Company’s OIBDAN for the
three months and year ended December 31, 2016 and 2015. The
Company defines OIBDAN as consolidated operating income adjusted to
exclude non-cash compensation expenses, included within corporate
expenses, as well as the following line items presented in its
Statement of Operations: Depreciation and amortization; Impairment
charges; and Other operating income, net.
The Company uses OIBDAN, among other measures, to evaluate the
Company's operating performance. This measure is among the primary
measures used by management for the planning and forecasting of
future periods, as well as for measuring performance for
compensation of executives and other members of management. We
believe this measure is an important indicator of the Company's
operational strength and performance of its business because it
provides a link between operational performance and operating
income. It is also a primary measure used by management in
evaluating companies as potential acquisition targets.
The Company believes the presentation of this measure is
relevant and useful for investors because it allows investors to
view performance in a manner similar to the method used by the
Company's management. The Company believes it helps improve
investors' ability to understand the Company's operating
performance and makes it easier to compare the Company's results
with other companies that have different capital structures or tax
rates. In addition, the Company believes this measure is also among
the primary measures used externally by the Company's investors,
analysts and peers in its industry for purposes of valuation and
comparing the operating performance of the Company to other
companies in its industry.
Since OIBDAN is not a measure calculated in accordance with
GAAP, it should not be considered in isolation of, or as a
substitute for, operating income as an indicator of operating
performance and may not be comparable to similarly titled measures
employed by other companies. OIBDAN is not necessarily a measure of
the Company's ability to fund its cash needs. As it excludes
certain financial information compared with operating income, the
most directly comparable GAAP financial measure, users of this
financial information should consider the types of events and
transactions which are excluded.
The other non-GAAP financial measures presented in the tables
below are: (i) revenues, direct operating and SG&A expenses and
OIBDAN, each excluding the effects of foreign exchange rates; (ii)
revenues, direct operating and SG&A expenses and OIBDAN, each
excluding the effects of foreign exchange rates and the results
from markets and businesses sold and (iii) corporate expenses,
excluding non-cash compensation expenses and the effects of foreign
exchange rates.
The Company presents revenues, direct operating and SG&A
expenses and OIBDAN, each excluding the effects of foreign exchange
rates, because management believes that viewing certain financial
results without the impact of fluctuations in foreign currency
rates facilitates period to period comparisons of business
performance and provides useful information to investors. A
significant portion of the Company's advertising operations are
conducted in foreign markets, principally Europe, the U.K. and
China, and management reviews the results from its foreign
operations on a constant dollar basis. Revenues, direct operating
and SG&A expenses and OIBDAN, each excluding the effects of
foreign exchange rates, are calculated by converting the current
period's amounts in local currency to U.S. dollars using average
foreign exchange rates for the prior period.
In the first quarter of 2016, the Company sold nine
non-strategic Americas markets. The Company sold its businesses in
Turkey and Australia in the second and fourth quarters of 2016,
respectively. The Company presents revenues, direct operating and
SG&A expenses and OIBDAN, each excluding the effects of foreign
exchange rates and the results from markets and businesses sold,
for the consolidated Company and the Company's segments, in order
to facilitate investors' understanding of operational trends
without the impact of fluctuations in foreign currency rates and
without the results from the markets and businesses that were sold,
as these results will not be included in the Company's results in
current and future periods.
Corporate expenses excluding the effects of non-cash
compensation expenses is presented as OIBDAN excludes non-cash
compensation expenses.
Since these non-GAAP financial measures are not calculated in
accordance with GAAP, they should not be considered in isolation
of, or as a substitute for, the most directly comparable GAAP
financial measures as an indicator of operating performance.
As required by the SEC rules, the Company provides
reconciliations below to the most directly comparable amounts
reported under GAAP, including (i) OIBDAN excluding effects of
foreign exchange rates and OIBDAN for each segment to consolidated
and segment operating income (loss); (ii) Revenues excluding the
effects of foreign exchange rates to revenues; (iii) Direct
operating and SG&A expenses excluding the effects of foreign
exchange rates to direct operating and SG&A expenses; (iv)
Corporate expenses excluding non-cash compensation expenses and
effects of foreign exchange rates to Corporate expenses; (v)
Consolidated and segment revenues excluding the effects of foreign
exchange rates and results from markets and businesses sold to
Consolidated and segment revenues; (vi) Consolidated and segment
direct operating and SG&A expenses excluding the effects of
foreign exchange rates and results from markets and businesses sold
to Consolidated and segment direct operating and SG&A expenses;
(vii) Consolidated and segment OIBDAN excluding the effects of
foreign exchange rates and results from markets and businesses sold
to Consolidated and segment Operating income.
Reconciliation of OIBDAN, excluding effects of foreign
exchange rates and OIBDAN for each segment to, Consolidated and
Segment Operating Income (Loss)
(In thousands)
OIBDANexcludingeffects
offoreignexchange
Foreignexchangeeffects
OIBDAN
(subtotal)
Non-cash
compensation
expenses
Depreciation
and
amortization
Impairmentcharges
Other
operating
(income)
expense, net
Operating
income (loss)
Three Months Ended December 31, 2016 Americas $ 140,448
$ (119 )
$ 140,329 $ — $
44,771 $ — $ — $ 95,558 International 105,646 (5,902
)
99,744 — 39,683 — — 60,061 Corporate (31,092 ) 1,756
(29,336 ) 2,098 1,521 — — (32,955 ) Impairment
charges — —
— — — — — — Other operating income, net —
—
— — —
— (128,203 ) 128,203
Consolidated $ 215,002
$ (4,265 ) $
210,737 $ 2,098 $
85,975 $ —
$ (128,203 ) $ 250,867
Three Months Ended December 31, 2015 Americas $ 151,440 $ —
$ 151,440 $ — $ 52,940 $ — $ — $ 98,500 International
94,459 —
94,459 — 41,099 — — 53,360 Corporate (26,812 ) —
(26,812 ) 2,314 1,384 — — (30,510 ) Impairment
charges — —
— — — — — — Other operating expense, net —
—
— —
— — 5,068 (5,068 )
Consolidated $ 219,087
$ — $ 219,087
$ 2,314 $ 95,423
$ — $ 5,068
$ 116,282 Year Ended December 31, 2016
Americas $ 484,685 $ (1,997 )
$ 482,688 $ — $ 185,654
$ — $ — $ 297,034 International 275,592 (6,656 )
268,936 —
152,758 — — 116,178 Corporate (111,274 ) 4,129
(107,145
) 10,238 5,712 — — (123,095 ) Impairment charges — —
— — — 7,274 — (7,274 ) Other operating income, net —
—
— — —
— (354,688 ) 354,688
Consolidated $ 649,003
$ (4,524 ) $
644,479 $ 10,238 $
344,124 $ 7,274
$ (354,688 ) $ 637,531
Year Ended December 31, 2015 Americas $ 518,385 $ —
$
518,385 $ — $ 204,514 $ — $ — $ 313,871 International
261,413 —
261,413 — 166,060 — — 95,353 Corporate (108,021 )
—
(108,021 ) 8,359 5,388 — — (121,768 ) Impairment
charges — —
— — — 21,631 — (21,631 ) Other operating
expense, net — —
—
— — — 4,824 (4,824
)
Consolidated $ 671,777
$ — $ 671,777
$ 8,359 $ 375,962
$ 21,631 $ 4,824
$ 261,001
Reconciliation of Revenues, excluding effects of foreign
exchange rates, to Revenues
(In thousands) Three Months EndedDecember 31,
%Change Year EndedDecember 31,
%
Change
2016 2015 2016 2015 Consolidated
revenue $ 726,471 $ 772,065 (5.9 )% $ 2,702,395 2,806,204 (3.7 )%
Excluding: Foreign exchangedecrease
19,772 — 47,615 —
Consolidated revenue excludingeffects of
foreign exchange
$ 746,243 $ 772,065 (3.3
)%
$ 2,750,010 $ 2,806,204
(2.0 )% Americas revenue $ 347,355 $ 364,536 (4.7 )%
$ 1,278,413 $ 1,349,021 (5.2 )%
Excluding: Foreign exchange(increase)
decrease
(141 ) — 7,721 —
Americas revenue excluding effectsof
foreign exchange
$ 347,214 $ 364,536 (4.8
)%
$ 1,286,134 $ 1,349,021
(4.7 )% International revenue $ 379,116 $ 407,529
(7.0 )% $ 1,423,982 $ 1,457,183 (2.3 )%
Excluding: Foreign exchangedecrease
19,913 — 39,894 —
International revenue excludingeffects of
foreign exchange
$ 399,029 $ 407,529 (2.1
)%
$ 1,463,876 $ 1,457,183
0.5 %
Reconciliation of Direct operating and SG&A expenses,
excluding effects of foreign exchange rates, to Direct operating
and SG&A expenses
(In thousands) Three Months EndedDecember 31,
%Change Year EndedDecember 31,
%
Change
2016 2015 2016 2015
Consolidated direct operating andSG&A
expenses
$ 486,398 $ 526,166 (7.6 )% $ 1,950,771 $ 2,026,406 (3.7 )%
Excluding: Foreign exchangedecrease
13,751 — 38,962 —
Consolidated direct operating andSG&A
expenses excludingeffects of foreign exchange
$ 500,149 $ 526,166 (4.9
)%
$ 1,989,733 $ 2,026,406
(1.8 )%
Americas direct operatingand SG&A
expenses
$ 207,026 $ 213,096 (2.8 )% $ 795,725 $ 830,636 (4.2 )%
Excluding: Foreign exchange(increase)
decrease
(260 ) — 5,724 —
Americas direct operating andSG&A
expenses excludingeffects of foreign exchange
$ 206,766 $ 213,096 (3.0
)%
$ 801,449 $ 830,636
(3.5 )%
International direct operating andSG&A
expenses
$ 279,372 $ 313,070 (10.8 )% $ 1,155,046 $ 1,195,770 (3.4 )%
Excluding: Foreign exchangedecrease
14,011 — 33,238 —
International direct operating andSG&A
expenses excludingeffects of foreign exchange
$ 293,383 $ 313,070 (6.3
)%
$ 1,188,284 $ 1,195,770
(0.6 )%
Reconciliation of Corporate expenses, excluding non-cash
compensation expenses and effects of foreign exchange rates, to
Corporate Expenses
(In thousands) Three Months EndedDecember 31,
%Change Year EndedDecember 31,
%
Change
2016 2015 2016 2015 Corporate Expense $
31,434 $ 29,126 7.9 % $ 117,383 $ 116,380 0.9 %
Excluding: Non-cashcompensation
expense
(2,098 ) (2,314 ) (10,238 ) (8,359 )
Corporate Expense excluding non-cash
compensation expense
$ 29,336 $ 26,812 9.4 %
$
107,145 $ 108,021 (0.8 )%
Excluding: Foreign exchangedecrease
$ 1,756 $ — $ 4,129 $ —
Corporate Expense excluding non-cash
compensation expense andeffects of foreign exchange
$ 31,092 $ 26,812 16.0 %
$ 111,274 $ 108,021 3.0 %
Reconciliation of Consolidated and Segment Revenues,
excluding effects of foreign exchange rates and results from
markets and businesses sold, to Consolidated and Segment
Revenues
(In thousands) Three Months EndedDecember 31,
%
Change
Year EndedDecember 31, %
Change
2016 2015 2016 2015 Consolidated
revenue $ 726,471 $ 772,065 (5.9 )% $ 2,702,395 $ 2,806,204 (3.7 )%
Excluding: Revenue from markets and
businessessold
(10,607 ) (69,510 ) (123,510 ) (248,866 ) Excluding: Foreign
exchange decrease 19,772 — 47,615 —
Consolidated revenue, excluding effects of
foreignexchange and revenue from markets andbusinesses sold
$ 735,636 $ 702,555 4.7 %
$ 2,626,500 $ 2,557,338
2.7 % Americas revenue $ 347,355 $ 364,536 (4.7 )% $ 1,278,413 $
1,349,021 (5.2 )% Excluding: Revenue from non-strategic markets
sold — (27,883 ) (2,470 ) (105,174 ) Excluding: Foreign exchange
(increase) decrease (141 ) — 7,721 —
Americas revenue, excluding effects of
foreignexchange and revenue from non-strategic marketssold
$ 347,214 $ 336,653 3.1 %
$ 1,283,664 $ 1,243,847
3.2 % International revenue $ 379,116 $ 407,529 (7.0 )% $ 1,423,982
$ 1,457,183 (2.3 )% Excluding: Revenue from businesses sold (10,607
) (41,627 ) (121,040 ) (143,692 ) Excluding: Foreign exchange
decrease 19,913 — 39,894 —
International revenue, excluding effects
of foreignexchange and revenue from businesses sold
$ 388,422 $ 365,902 6.2 %
$ 1,342,836 $ 1,313,491
2.2 %
Reconciliation of Consolidated and Segment Direct operating
and SG&A expenses, excluding effects of foreign exchange rates
and results from markets and businesses sold, to Consolidated and
Segment Direct operating and SG&A expenses
(In thousands) Three Months EndedDecember 31,
%
Change
Year EndedDecember 31, %
Change
2016 2015 2016 2015 Consolidated direct
operating and SG&A expenses $ 486,398 $ 526,166 (7.6 )% $
1,950,771 $ 2,026,406 (3.7 )%
Excluding: Operating expenses from markets
andbusinesses sold
(7,406 ) (43,614 ) (97,761 ) (171,014 )
Excluding: Foreign exchange decrease
13,751 — 38,962 —
Consolidated direct operating and SG&A
expenses,excluding effects of foreign exchange andoperating
expenses from markets and businessessold
$ 492,743 $ 482,552 2.1 %
$ 1,891,972 $ 1,855,392
2.0 % Americas direct operating and SG&A expenses $ 207,026 $
213,096 (2.8 )% $ 795,725 $ 830,636 (4.2 )%
Excluding: Operating expenses from
non-strategicmarkets sold
— (14,643 ) (1,770 ) (57,560 ) Excluding: Foreign exchange
(increase) decrease (260 ) — 5,724 —
Americas direct operating and SG&A
expenses,excluding effects of foreign exchange andoperating
expenses from non-strategic marketssold
$ 206,766 $ 198,453 4.2 %
$ 799,679 $ 773,076 3.4 %
International direct operating and SG&A expenses $ 279,372 $
313,070 (10.8 )% $ 1,155,046 $ 1,195,770 (3.4 )% Excluding:
Operating expenses from businesses sold (7,406 ) (28,971 ) (95,991
) (113,454 ) Excluding: Foreign exchange decrease 14,011 —
33,238 —
International direct operating and
SG&Aexpenses, excluding effects of foreign exchangeand
operating expenses from businesses sold
$ 285,977 $ 284,099 0.7 %
$ 1,092,293 $ 1,082,316
0.9 %
Reconciliation of Consolidated and Segment OIBDAN, excluding
effects of foreign exchange rates and results from markets and
businesses sold to, Consolidated and Segment Operating
income
(In thousands) Three Months EndedDecember 31,
%
Change
Year EndedDecember 31, %
Change
2016 2015 2016 2015 Consolidated
operating income $ 250,867 $ 116,282 115.7 % $ 637,531 $ 261,001
144.3 %
Excluding: Revenue, direct operating and
SG&Aexpenses from markets and businesses sold
(3,201 ) (25,896 ) (25,749 ) (77,852 ) Excluding: Foreign exchange
(increase) decrease 4,265 — 4,524 — Excluding: Non-cash
compensation expense 2,098 2,314 10,238 8,359 Excluding:
Depreciation and amortization 85,975 95,423 344,124 375,962
Excluding: Impairment charges — — 7,274 21,631 Excluding: Other
operating (income) expense, net (128,203 ) 5,068 (354,688 )
4,824
Consolidated OIBDAN, excluding effects of
foreignexchange and OIBDAN from markets andbusinesses sold
$ 211,801 $ 193,191 9.6 %
$ 623,254 $ 593,925 4.9 %
Americas Outdoor operating income $ 95,558 $ 98,500 (3.0 )% $
297,034 $ 313,871 (5.4 )%
Excluding: Revenue, direct operating and
SG&Aexpenses from non-strategic markets sold
— (13,240 ) (700 ) (47,614 ) Excluding: Foreign exchange decrease
119 — 1,997 — Excluding: Depreciation and amortization 44,771
52,940 185,654 204,514
Americas Outdoor OIBDAN, excluding effects
offoreign exchange and OIBDAN from non-strategic markets sold
$ 140,448 $ 138,200 1.6 %
$ 483,985 $ 470,771 2.8 %
International Outdoor operating income $ 60,061 $ 53,360 12.6 % $
116,178 $ 95,353 21.8 %
Excluding: Revenue, direct operating and
SG&Aexpenses of businesses sold
(3,201 ) (12,656 ) (25,049 ) (30,238 ) Excluding: Foreign exchange
decrease 5,902 — 6,656 — Excluding: Depreciation and amortization
39,683 41,099 152,758 166,060
International Outdoor OIBDAN, excluding
effectsof foreign exchange and OIBDAN frombusinesses sold
$ 102,445 $ 81,803 25.2 %
$ 250,543 $ 231,175 8.4 %
About Clear Channel Outdoor Holdings, Inc.
Clear Channel Outdoor Holdings, Inc., (NYSE: CCO) is one of the
world’s largest outdoor advertising companies, with over 590,000
displays in 35 countries across five continents, including 43 of
the 50 largest markets in the United States. Clear Channel Outdoor
Holdings offers many types of displays across its global platform
to meet the advertising needs of its customers. This includes a
growing digital platform that now offers more than 1,000 digital
billboards across 27 markets in the United States. Clear Channel
Outdoor Holdings’ International segment operates in 19 countries
across Asia and Europe in a wide variety of formats. More
information is available at www.clearchanneloutdoor.com and www.clearchannelinternational.com.
Certain statements in this press release constitute
“forward-looking statements” within the meaning of the Private
Securities Litigation Reform Act of 1995. Such forward-looking
statements involve known and unknown risks, uncertainties and other
factors which may cause the actual results, performance or
achievements of Clear Channel Outdoor Holdings, Inc. and its
subsidiary Clear Channel International B.V. to be materially
different from any future results, performance or achievements
expressed or implied by such forward-looking statements. The words
or phrases “guidance,” “believe,” “expect,” “anticipate,”
“estimates,” “forecast” and similar words or expressions are
intended to identify such forward-looking statements. In addition,
any statements that refer to expectations or other
characterizations of future events or circumstances, such as
statements about our business plans, strategies and initiatives and
our expectations about certain markets, are forward-looking
statements. These statements are not guarantees of future
performance and are subject to certain risks, uncertainties and
other factors, some of which are beyond our control and are
difficult to predict. Various risks that could cause future
results to differ from those expressed by the forward-looking
statements included in this press release include, but are not
limited to: weak or uncertain global economic conditions; changes
in general economic and political conditions in the United States
and in other countries in which the Company currently does
business; industry conditions, including competition; the level of
expenditures on advertising; legislative or regulatory
requirements; fluctuations in operating costs; technological
changes and innovations; changes in labor conditions; capital
expenditure requirements; risks of doing business in foreign
countries; fluctuations in exchange rates and currency values; the
outcome of pending and future litigation; taxes and tax disputes;
changes in interest rates; shifts in population and other
demographics; access to capital markets and borrowed indebtedness;
the Company’s ability to implement its business strategies; risks
relating to the successful integration of the operations of
acquired businesses; risks that the anticipated cost savings from
the Company's strategic revenue and efficiency initiatives may not
persist; the impact of the Company’s substantial indebtedness,
including the effect of the Company’s leverage on its financial
position and earnings; the Company’s ability to generate sufficient
cash from operations or liquidity-generating transactions to make
payments on its indebtedness; the Company’s relationship with
iHeartCommunications, including its ability to elect all of the
members of the Company’s Board of Directors and its ability, as
controlling stockholder, to determine the outcome of matters
submitted to the stockholders and certain additional matters
governed by intercompany agreements between the Company and
iHeartCommunications; and the impact of these and additional
factors on iHeartCommunications, the Company’s primary direct or
indirect external source of capital, which could have a significant
need for capital in the future. Other unknown or unpredictable
factors also could have material adverse effects on the Company’s
future results, performance or achievements. In light of these
risks, uncertainties, assumptions and factors, the forward-looking
events discussed in this press release may not occur. You are
cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date stated, or if no date
is stated, as of the date of this press release. Other key risks
are described in the Company’s reports filed with the U.S.
Securities and Exchange Commission, including the section entitled
“Item 1A. Risk Factors” of Clear Channel Outdoor Holdings, Inc.’s
Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q.
Except as otherwise stated in this press release, the Company does
not undertake any obligation to publicly update or revise any
forward-looking statements because of new information, future
events or otherwise.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170223005467/en/
MediaWendy Goldberg,
212-377-1105Executive Vice President – CommunicationsorInvestorsEileen McLaughlin, 212-377-1116Vice
President – Investor Relations
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