iHeartMedia, Inc. (PINK: IHRT) today reported financial results
for the third quarter ended September 30, 2017.
“As a true multi-platform, 21st-century media company, we
continue to expand the innovative ways for us to engage consumers
and to reinvent how we do business with our advertising and
marketing partners,” said Bob Pittman, Chairman and Chief Executive
Officer of iHeartMedia, Inc. “At our iHeartMedia business, in
addition to building out a data-first programmatic advertising
platform, we are continually growing our content offerings,
including iHeartRadio's podcast platform, with virtually all of the
top 200 U.S. podcasts. At Americas outdoor and International
outdoor, we are both expanding our digital footprint and enhancing
our automated ad-buying and data analytics and attribution
capabilities to generate better results for our partners.”
Rich Bressler, President, Chief Operating Officer and Chief
Financial Officer said: “Our consolidated revenues and operating
income declined in the third quarter. However, the iHeartMedia
segment extended its year-over-year revenue growth to eighteen
consecutive quarters. We continue to be committed to balancing
financial discipline with investments in data, programmatic and
attribution to grow our businesses while staying focused on
improving our capital structure.”
Key Financial Highlights
The Company’s key financial highlights for the third quarter of
2017 include:
- Consolidated revenue decreased 1.9%.
Consolidated revenue was flat, after adjusting for a $10.2 million
impact from movements in foreign exchange rates and the $39.3
million impact of the outdoor businesses sold.
- iHM revenues increased $2.4 million, or
0.3%. Revenues increased $8.0 million, or 0.9%, excluding
political revenue.
- Americas outdoor revenues decreased
$6.4 million, or 2.0%. Revenues decreased $3.1 million, or 1.0%,
after adjusting for a $0.9 million impact from movements in foreign
exchange rates and a $4.2 million impact from the sale of our
business in Canada.
- International outdoor revenues
decreased $17.7 million, or 5.1%. Revenues increased $8.1 million,
or 2.6%, after adjusting for a $9.3 million impact from movements
in foreign exchange rates and a $35.2 million impact from the sale
of our businesses in Australia and Turkey.
- Operating income decreased $71.0
million, or 23.7%, primarily due to a $33.8 million prior year
benefit resulting from the renegotiation of certain contracts and
the $12.1 million loss on the sale of our Canadian outdoor
market.
- OIBDAN decreased 14.3% and decreased
12.9%, excluding the impact from movements in foreign exchange
rates and the impact of the outdoor businesses sold.
Key Non-Financial
Highlights
For iHeartMedia, the Company’s recent key non-financial
highlights were:
Strengthening our presence in key markets:
- Announcing our plans to exchange the
Richmond and Chattanooga markets for Entercom and CBS Stations in
Boston and Seattle - two of the few markets where we did not have a
full complement of stations. This exchange will allow us to expand
our presence in these strategic markets, further strengthening our
position in Boston and Seattle.
Producing major events for fans that enhance artist
partnerships, providing grand-scale promotions for our stations and
delivering unique brand-building and activation opportunities to
advertisers:
- Hosting the seventh annual iHeartRadio
Music Festival in September including the iHeartRadio Daytime
Village presented by Capital One. This iconic two-day music event
featured many of the biggest names in music today, including
Coldplay, P!NK, The Weeknd, Lorde, Chris Stapleton, Kings of Leon,
Miley Cyrus and Big Sean. The Festival generated a record-setting
12 billion social impressions, up 16% over the prior year. The CW
Network exclusively live-streamed both days of the festival and
will air it as a two-night special later in November.
- Celebrating the best in Latin Music on
November 4th at the fourth annual iHeartRadio Fiesta Latina -
generating 4.9 billion social impressions, up 32% over the prior
year. Hosted by iHeartMedia's Enrique Santos, the star-studded
iHeartRadio Fiesta Latina included some of the most popular Latin
music artists including Ricky Martin, Gente De Zona, Don Omar, and
CNCO. This year's event honored the communities affected by recent
natural disasters across Texas, Florida, Puerto Rico, Mexico and
Northern California and special tribute was paid to the first
responders to these disasters. It aired live on Telemundo and was
also broadcast live across iHeartMedia's Spanish-Pop, Tropical,
regional Mexican and Spanish-Adult Hit radio stations nationwide
and streamed live on iHeartRadio's Official YouTube.
- Announcing the return of the legendary
national "iHeartRadio Jingle Ball Tour presented by Capital One"
that will feature top recording artists such as Taylor Swift, Ed
Sheeran, The Chainsmokers, Sam Smith and Fall Out Boy, who will
lead all-star lineups in a series of concerts across major U.S.
cities, including New York, Los Angeles, Miami, Chicago and
Dallas.
- Adding another major event to our
roster. The iHeartRadio ALTer EGO will celebrate everything
alternative rock on January 19th in Los Angeles and feature Mumford
& Sons, Cage the Elephant, Beck, Spoon, WALK THE MOON, The
National and Dashboard Confessional. This music event will be
broadcast live across over 60 Alternative and Rock iHeartRadio
stations and streamed on iHeartRadio.
Growing our reach with new partnerships:
- Teaming up with Fox TV on a new music
competition series - "The Four: Battle for Stardom" - to support
auditions, search for talent and boost careers of artists
throughout the run of the competition. The winner will join
iHeartMedia's coveted "On the Verge" artist development program,
which will promote the winning talent with airplay across
iHeartMedia radio stations nationwide. On the Verge helped launch
the careers of Sam Smith, Fifth Harmony, and Nick Jonas among many
other artists.
Expanding our content through digital and social channels
- Launching "iHeartRadio… After Elvis,"
with iHeartMedia's Elvis Duran, a brand-new entertainment show on
Facebook's new destination for watching shows, Watch. Every
afternoon, Elvis leads off-the-cuff conversations with popular
celebrities and iHeartRadio personalities from across the country
about the latest pop culture, entertainment news and the hottest
trends.
- Podcast listening on iHeartRadio
increased 58% year-over-year in the quarter, with virtually all of
the top 200 U.S. podcasts now available. The catalog includes
almost 10,000 podcasts across 18 different categories, including
iHeartMedia's Bobby Bones' newly launched Nashville Podcast Network
as well as NPR and Fatherly podcasts.
Focusing on emerging platforms including voice-controlled
devices:
- Expanding our voice-controlled
footprint in addition to the Amazon Echo family and Alexa devices,
iHeartRadio's Live Radio stations are available on Google Home and
the newly launched Google Assistant-enabled Google Home Mini,
Google Home Max and Google Pixel Buds, while iHeartRadio's Live
Radio stations and custom Artist Radio stations are now available
on the Android Wear 2.0 watch.
- Adding iHeartRadio All Access to Sonos
smart speakers for on-demand listening to playlists and customized
stations with unlimited skips - with the ability to curate, save
songs and access on demand playlists using the free Sonos app on
Android, iPhone or iPad.
Celebrating award-winning content:
- iHeartMedia's The Bobby Bones Show won
the CMA Award in the National Broadcast Personality of the Year
category and iHeartMedia's personalities Bobby Bones, Sean Hannity
and Bill Handel were inducted into the National Radio Hall of
Fame.
Renewing key agreements:
- Signing a multi-year renewal with
Nielsen for audience measurement and key analytics.
Outdoor
Building out Americas outdoor and International outdoor digital
footprint:
- Installing over 450 new digital
displays in the third quarter in our North American and
International outdoor markets for an end-of-quarter total of 1,180
digital billboards across Americas outdoor's markets and more than
13,300 digital displays across International outdoor's markets as
of September 30, 2017.
- Renewing a five-year contract with
Clinton National Airport in Little Rock, Arkansas and 10-year
contract with the Port of Seattle, in addition to signing a new
five-year exclusive agreement with Bangor International Airport to
provide state-of-the-art advertising solutions.
- Signing a new contract in France with
Effia to operate advertising sites in nearly 50 parking lots
located in the heart of major cities, including Lille, Nice,
Antibes, Grenoble and Dijon, as well as near heavily trafficked TGV
railway stations.
- Launching the first-ever digital
roadside network of digital screens across heavily trafficked
locations in Northern Ireland, following the retention of the
Translink contract for managing 1,400 bus shelters there.
- Increasing reach in Nordic countries
with the launch of 'The Fame' in Finland, the largest LCD digital
OOH screen in the region.
- Announcing a new deal with Amscreen to
extend our successful digital partnership into sixteen new country
markets. This will be in addition to the 2,500+ displays in the UK,
where total digital out-of-home revenue now represents over 50% of
all UK revenues.
Expanding our programmatic, data analytics and attribution
capabilities:
- Enhancing Americas outdoor's nationwide
programmatic platform by partnering with Adelphic and Vistar --
further integrating buying OOH into the broader programmatic media
ecosystem through the same dashboard that brands use to buy other
media programmatically.
- Winning a North American Smarties award
for "location based services or targeting" for Americas outdoor's
"24-Hour Fitness: Out-of-home advertising & mobile work better
together" mobile amplification campaign.
GAAP Measures by Segment
(In thousands)
Three Months EndedSeptember 30,
%Change
Nine Months EndedSeptember 30,
%Change
2017 2016 2017 2016 Revenue iHM $ 859,531 $ 857,099
0.3 % $ 2,501,084 $ 2,463,899 1.5 % Americas Outdoor 316,587
322,997 (2.0 )% 919,967 931,058 (1.2 )% International Outdoor
328,502 346,224 (5.1 )% 942,167 1,035,263 (9.0 )% Other 34,452
41,414 (16.8 )% 99,332 114,663 (13.4 )% Eliminations (1,656 )
(1,152 ) (5,444 ) (2,031 )
Consolidated revenue $
1,537,416 $ 1,566,582
(1.9 )% $ 4,457,106 $
4,542,852 (1.9 )% Direct Operating and
SG&A expenses1 iHM $ 553,471 $ 498,280 11.1 % $ 1,667,996 $
1,516,441 10.0 % Americas Outdoor 196,298 197,489 (0.6 )% 592,719
588,699 0.7 % International Outdoor 288,199 290,925 (0.9 )% 811,554
866,071 (6.3 )% Other 23,298 27,288 (14.6 )% 74,522 83,649 (10.9 )%
Eliminations (717 ) (542 ) (2,694 ) (1,421 )
Consolidated Direct
Operating and SG&A expenses $ 1,060,549
$ 1,013,440 4.6 %
$ 3,144,097 $ 3,053,439
3.0 % Operating Income iHM $ 247,971 $ 298,128 (16.8
)% $ 658,142 $ 764,952 (14.0 )% Americas Outdoor 73,254 78,266 (6.4
)% 189,559 201,476 (5.9 )% International Outdoor 7,417 18,281 (59.4
)% 35,464 56,117 (36.8 )% Other 7,261 9,643 (24.7 )% 13,713 18,205
(24.7 )% Corporate2 (86,752 ) (96,461 ) (10.1 )% (261,006 )
(279,738 ) (6.7 )% Impairment charges (7,631 ) (8,000 ) (4.6 )%
(7,631 ) (8,000 ) (4.6 )% Other operating income (loss), net
(13,215 ) (505 ) 24,785 219,768
Consolidated
Operating Income $ 228,305 $
299,352 (23.7 )% $
653,026 $ 972,780 (32.9
)%
1Direct 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).
2Includes Corporate depreciation and amortization of $7.8
million and $9.0 million for the three months ended
September 30, 2017 and 2016, respectively, and $24.8 million
and $26.8 million for the nine months ended September 30, 2017
and 2016, respectively, as well as intercompany charges.
Non-GAAP Measures1 (see
preceding table for comparable GAAP measures)
(In thousands)
Three Months EndedSeptember 30,
%Change
Nine Months EndedSeptember 30,
%Change
2017 2016 2017 2016 Revenue, excluding movements in
foreign exchange iHM $ 859,531 $ 857,099 0.3 % $ 2,501,084 $
2,463,899 1.5 % Americas Outdoor 315,704 322,997 (2.3 )% 917,219
931,058 (1.5 )% International Outdoor 319,171 346,224 (7.8 )%
962,970 1,035,263 (7.0 )% Other 34,452 41,414 (16.8 )% 99,332
114,663 (13.4 )% Eliminations (1,656 ) (1,152 ) (5,444 ) (2,031 )
Consolidated revenue excluding movements in foreign exchange
$ 1,527,202 $ 1,566,582
(2.5 )% $ 4,475,161 $
4,542,852 (1.5 )% Direct Operating and
SG&A expenses, excluding movements in foreign exchange iHM $
553,471 $ 498,280 11.1 % $ 1,667,996 $ 1,516,441 10.0 % Americas
Outdoor 195,635 197,489 (0.9 )% 590,336 588,699 0.3 % International
Outdoor 279,016 290,925 (4.1 )% 828,164 866,071 (4.4 )% Other
23,298 27,288 (14.6 )% 74,522 83,649 (10.9 )% Eliminations (717 )
(542 ) (2,694 ) (1,421 )
Consolidated Direct Operating and
SG&A expenses, excluding movements in foreign exchange
$ 1,050,703 $ 1,013,440
3.7 % $ 3,158,324 $
3,053,439 3.4 % OIBDAN iHM $ 306,060 $
358,819 (14.7 )% $ 833,088 $ 947,458 (12.1 )% Americas Outdoor
120,289 125,508 (4.2 )% 327,248 342,359 (4.4 )% International
Outdoor 40,303 55,299 (27.1 )% 130,613 169,192 (22.8 )% Other
11,154 14,126 (21.0 )% 24,810 31,014 (20.0 )% Corporate (74,428 )
(83,348 ) (10.7 )% (224,467 ) (241,998 ) (7.2 )% Eliminations (939
) (610 ) (2,750 ) (610 )
Consolidated OIBDAN $
402,439 $ 469,794 (14.3
)% $ 1,088,542 $
1,247,415 (12.7 )% OIBDAN, excluding
movements in foreign exchange iHM $ 306,060 $ 358,819 (14.7 )% $
833,088 $ 947,458 (12.1 )% Americas Outdoor 120,069 125,508 (4.3 )%
326,883 342,359 (4.5 )% International Outdoor 40,155 55,299 (27.4
)% 134,806 169,192 (20.3 )% Other 11,154 14,126 (21.0 )% 24,810
31,014 (20.0 )% Corporate (74,444 ) (83,348 ) (10.7 )% (226,399 )
(241,998 ) (6.4 )% Eliminations (939 ) (610 ) (2,750 ) (610 )
Consolidated OIBDAN, excluding movements in foreign exchange
$ 402,055 $ 469,794
(14.4 )% $ 1,090,438 $
1,247,415 (12.6 )% Revenue excluding
effects of foreign exchange and revenue from outdoor businesses
sold Americas Outdoor $ 313,107 $ 316,232 (1.0 )% $ 903,539 $
906,449 (0.3 )% International Outdoor 319,171 311,074 2.6 % 962,970
928,718 3.7 %
Consolidated revenue, excluding effects of foreign
exchange and revenue from outdoor businesses sold $
1,524,605 $ 1,524,667 — %
$ 4,461,481 $ 4,411,698 1.1
% OIBDAN excluding effects of foreign exchange and revenue
from outdoor businesses sold Americas Outdoor $ 119,892 $ 125,624
(4.6 )% $ 326,788 $ 341,235 (4.2 )% International Outdoor 40,155
47,033 (14.6 )% 134,806 147,749 (8.8 )%
Consolidated OIBDAN,
excluding effects of foreign exchange and revenue from outdoor
businesses sold $ 401,878 $ 461,644
(12.9 )% $ 1,090,343 $
1,224,848 (11.0 )%
Certain prior period amounts have been reclassified to conform
to the 2017 presentation of financial information throughout the
press release.
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 consolidated and segment 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) revenues, excluding political
advertising revenues, to revenues; (v) corporate expenses,
excluding non-cash compensation expenses and effects of foreign
exchange rates, to corporate expenses; (vi) consolidated and
outdoor revenues, excluding effects of foreign exchange rates and
results from outdoor markets and businesses sold, to consolidated
and outdoor revenues; (vii) consolidated and outdoor direct
operating and SG&A expenses, excluding the effects of foreign
exchange rates and results from outdoor markets and businesses
sold, to consolidated and outdoor direct operating and SG&A
expenses; and (vii) consolidated and outdoor OIBDAN, excluding
effects of foreign exchange rates and results from outdoor markets
sold, to consolidated and outdoor operating income. See also the
definition of OIBDAN under the Supplemental Disclosure section in
this release.
Third Quarter 2017
Results
Consolidated
Consolidated revenue decreased $29.2 million, or 1.9%, during
the third quarter of 2017 as compared to the third quarter of 2016.
Revenue growth from our iHM business was offset by lower revenue
generated by our International and Americas outdoor businesses as a
result of the sales of certain outdoor businesses. Consolidated
revenue was flat, after adjusting for a $10.2 million impact from
movements in foreign exchange rates and the $39.3 million impact of
outdoor businesses sold in 2016.
Consolidated direct operating and SG&A expenses increased
$47.1 million, or 4.6%, during the third quarter of 2017 as
compared to the third quarter of 2016. Consolidated direct
operating and SG&A expenses increased $68.6 million, or 7.0%,
in the third quarter after adjusting for a $9.8 million impact of
movements in foreign exchange rates and the $31.4 million impact
from the sale of the outdoor businesses.
Consolidated operating income decreased $71.0 million, or 23.7%,
during the third quarter of 2017 as compared to the third quarter
of 2016, primarily due to a $33.8 million prior year benefit
resulting from contract renegotiations and the $12.1 million loss
on the sale of our Canadian outdoor market.
The Company's OIBDAN decreased 14.3% to $402.4 million during
the third quarter of 2017 as compared to the third quarter of 2016.
After adjusting for the movements in foreign exchange rates and the
impact of the sale of outdoor businesses, the Company’s OIBDAN
decreased 12.9% in the third quarter of 2017, compared to the same
period in 2016.
Included in the 2017 third quarter operating income and OIBDAN
were $4.9 million of direct operating and SG&A expenses and
$1.1 million of corporate expenses associated with the Company’s
strategic revenue and efficiency initiatives, compared to $5.0
million and $1.0 million of such expenses in the prior year,
respectively.
iHeartMedia
iHeartMedia revenues increased $2.4 million, or 0.3%, during the
third quarter of 2017 as compared to the third quarter of 2016,
with growth in national and digital revenue being partially offset
by lower local revenue. National revenue grew due to an increase in
national trade and barter, largely from the iHeartMedia Music
Festival, as well as increased programmatic buying in response to
our national sales initiatives and investments, partially offset by
a decrease in national traffic and weather revenue. Local revenue
decreased as a result of lower spot revenue, partially offset by an
increase in local trade and barter.
Direct operating and SG&A expenses increased $55.2 million,
or 11.1%, during the third quarter of 2017 as compared to the third
quarter of 2016 primarily driven by a $33.8 million prior year
benefit resulting from the renegotiation of certain contracts,
higher trade and barter, higher content and programming costs, and
higher variable expenses, including sales activation costs.
Operating income decreased 16.8% to $248.0 million, and OIBDAN
decreased 14.7% to $306.1 million for the third quarter of 2017 as
compared to the third quarter of 2016. Each of operating income and
OIBDAN for 2017 includes $2.4 million in expenses related to
investments in strategic revenue and efficiency initiatives
compared to $2.5 million in the 2016 period.
Americas Outdoor
Americas outdoor revenues decreased $6.4 million, or 2.0%,
during the third quarter of 2017 as compared to the third quarter
of 2016. Revenues decreased $3.1 million, or 1.0%, after adjusting
for a $0.9 million impact from movements in foreign exchange rates
and the $4.2 million impact from the sale of our business in
Canada. The decrease in revenue is primarily due to higher revenue
in the prior year period due to the 2016 Olympics in Brazil and the
exchange of outdoor markets in the first quarter of 2017. This was
partially offset by increased digital revenue from new and existing
airports contracts.
Direct operating and SG&A expenses decreased $1.2 million,
or 0.6%, during the third quarter of 2017 as compared to the third
quarter of 2016. Direct operating and SG&A expenses increased
$2.6 million, or 1.4%, after adjusting for a $0.7 million impact
from movements in foreign exchange rates and the $4.5 million
impact from the sale of our business in Canada. Direct operating
and SG&A expenses increased primarily from higher fixed site
lease expenses, partially offset by lower variable expenses due to
the 2016 Olympics in Brazil.
Operating income decreased 6.4% to $73.3 million during the
third quarter of 2017 as compared to the third quarter of 2016,
resulting primarily from the $12.1 million loss on the sale of our
Canadian outdoor market. OIBDAN decreased $5.2 million, or 4.2%.
OIBDAN decreased $5.7 million, or 4.6%, during the third quarter
2017, after adjusting for a $0.2 million impact from movements in
foreign exchange rates and the $0.3 million impact from the sale of
our business in Canada. Operating income and OIBDAN in the third
quarter of 2017 each included $0.5 million in expenses related to
investments in strategic revenue and efficiency initiatives
compared to $0.3 million in the 2016 period.
International Outdoor
International outdoor revenues decreased $17.7 million, or 5.1%,
during the third quarter of 2017 as compared to the third quarter
of 2016. Revenues increased $8.1 million, or 2.6%, after adjusting
for a $9.3 million impact from movements in foreign exchange rates
and the $35.2 million impact from the sale of our businesses in
Australia and Turkey. The increase is primarily due to growth
across several markets including China, Spain, Switzerland and the
United Kingdom, primarily from new contracts and digital
expansion.
Direct operating and SG&A expenses decreased $2.7 million,
or 0.9%, during the third quarter of 2017 as compared to the third
quarter of 2016. Direct operating and SG&A expenses increased
$15.0 million, or 5.7%, after adjusting for a $9.2 million impact
from movements in foreign exchange rates and the $26.9 million
impact from the sale of our businesses in Australia and
Turkey. Direct operating and SG&A expenses increased
primarily due to higher site lease expense in certain countries
experiencing revenue growth.
Operating income decreased 59.4% to $7.4 million during the
third quarter of 2017 as compared to the third quarter of 2016.
OIBDAN decreased $15.0 million, or 27.1%. OIBDAN decreased $6.9
million, or 14.6%, during the third quarter 2017, after adjusting
for a $0.1 million impact from movements in foreign exchange rates
and the $8.3 million impact from the sale of our businesses in
Australia and Turkey. Operating income and OIBDAN in the third
quarter of 2017 each include $2.0 million in expenses related to
investments in strategic revenue and efficiency initiatives
compared to $2.1 million in the 2016 period.
Liquidity and Financial
Position
As of September 30, 2017, we had $286.4 million of cash on
our balance sheet, including $222.4 million of cash held by our
subsidiary, CCOH. A total of $214.1 million of our cash is held
outside the U.S. For the nine months ended September 30, 2017,
cash used for operating activities was $558.7 million, cash used
for investing activities was $145.0 million, cash provided by
financing activities was $137.1 million, and the effect of exchange
rate changes on cash totaled $8.0 million. The net decrease in
cash from December 31, 2016 was $558.7 million.
Capital expenditures for the nine months ended
September 30, 2017 were $184.9 million compared to $201.0
million in the nine months ended September 30, 2016. We
estimate capital expenditures for 2017 to be between $275 million
and $300 million.
As of September 30, 2017, we had a borrowing base of $499.1
million under iHeartCommunications' receivables-based credit
facility, had $365.0 million of outstanding borrowings and had
$49.1 million of outstanding letters of credit, resulting in $85.0
million of excess availability. However, any incremental borrowings
under iHeartCommunications' receivables-based credit facility may
be further limited by the terms contained in iHeartCommunications'
material financing agreements.
On February 7, 2017, iHeartCommunications completed an exchange
offer of $476.4 million principal amount of our 10.0% Senior Notes
due 2018 for $476.4 million principal amount of newly-issued 11.25%
Priority Guarantee Notes due 2021. Of the $476.4 million principal
amount of 11.25% Priority Guarantee Notes due 2021 issued in the
exchange offer, $241.4 million principal amount was issued to
subsidiaries of iHeartCommunications that participated in the
exchange offer.
On February 9, 2017, CCOH declared a special dividend of $282.5
million using a portion of the proceeds from the sales of certain
U.S. outdoor markets and of our Australia business, which was paid
on February 23, 2017. We received 89.9% of the dividend or
approximately $254.0 million, with the remaining 10.1% or
approximately $28.5 million, paid to public stockholders of
CCOH.
On March 15, 2017, iHeartCommunications commenced exchange
offers to exchange certain series of its outstanding debt
securities for new securities of the Company, iHeartCommunications
and CC Outdoor Holdings, Inc., a wholly-owned subsidiary of the
Company, and concurrent consent solicitations with respect to the
terms of the existing notes. On March 15, 2017, the Company also
commenced offers to amend its outstanding Term Loan D and Term Loan
E borrowings under its senior secured credit facility and/or issue
new securities of the Company, CC Outdoor Holdings, Inc., Broader
Media, LLC and/or iHeartCommunications to participating lenders.
The notes exchange offeres were amended on April 14, 2017. Both the
notes exchange offers and the term loan offers were open as of
November 8, 2017. The terms of the notes exchange offers and
the term loan offers have been revised and are subject to
substantial further revision, and the offers may never be
consummated, on the terms currently proposed or otherwise.
On July 10, 2017, we exchanged $15.6 million of aggregate
principal amount of 10.0% Senior Notes due 2018 that were held by
an unaffiliated party for $15.6 million of aggregate principal
amount of 11.25% Priority Guarantee Notes due 2021 that were held
by a subsidiary of iHeartCommunications.
On July 31, 2017, we borrowed an additional $60.0 million under
our receivables-based credit facility.
On August 14, 2017, CCIBV, our indirect subsidiary,
issued $150.0 million in aggregate principal amount of 8.75% Senior
Notes due 2020 (the “New Notes”). The New Notes were issued as
additional notes under the indenture governing CCIBV’s existing
8.75% Senior Notes due 2020 and were issued at a premium, which
resulted in $156.0 million in proceeds. The New Notes mature on
December 15, 2020 and bear interest at a rate of
8.75% per annum, payable semi-annually in arrears on
June 15 and December 15 of each year.
In October 2017, we exchanged $45.0 million in aggregate
principal amount of 11.25% Priority Guarantee Notes due 2021 that
were held by a subsidiary of iHeartCommunications for $45.0 million
of aggregate principal amount outstanding of its 10.0% Senior Notes
due 2018 that were held by unaffiliated third parties.
The senior secured credit facilities require us to comply on a
quarterly basis with a financial covenant limiting the ratio of
consolidated secured debt, net of cash and cash equivalents, to
consolidated EBITDA (as defined by iHeartCommunications’ senior
secured credit facilities) for the preceding four quarters. We were
in compliance with this covenant and, except as otherwise disclosed
in our Quarterly Report on Form 10-Q filed on November 8,
2017, the other covenants in the senior secured credit facilities
and in iHeartCommunications’ other material financing agreements as
of September 30, 2017.
For the year ended December 31, 2016, we adopted a new
accounting standard that requires us to evaluate on a quarterly
basis whether there is substantial doubt about our ability to
continue as a going concern for a period of 12 months following the
date our financial statements are issued. A substantial amount of
our cash requirements are for debt service obligations. Although we
have generated operating income in excess of $1.0 billion in each
of the years ended December 31, 2016 and 2015, we incurred net
losses and had negative cash flows from operations for each of
these years as a result of significant cash interest payments
arising from our substantial debt balance. For the nine months
ended September 30, 2017, we used cash of $558.7 million for
operating activities, which included cash paid for interest of
$1,426.4 million. Our current forecast indicates we will continue
to incur net losses and generate negative cash flows from operating
activities as a result of our indebtedness and significant related
interest expense. At September 30, 2017, the Company had debt
maturities totaling $366.9 million, $308.5 million (net of $277.1
million due to certain of our subsidiaries) and $8,368.9 million in
2017, 2018 and 2019, respectively. In October 2017, we exchanged
$45.0 million in aggregate principal amount of 11.25% Priority
Guarantee Notes due 2021 that were held by our subsidiary for $45.0
million of aggregate principal amount outstanding of our 10.0%
Senior Notes due 2018 that were held by an unaffiliated
third-party. As of November 8, 2017, our debt maturities in the
next 12 months include (i) $365.0 million outstanding under
iHeartCommunications' receivables-based credit facility, which
matures on December 24, 2017, (ii) $51.5 million of 10% Senior
Notes due January 15, 2018 (after giving effect to the private note
exchanges), (iii) $175.0 million of 6.875% Senior Notes due June
15, 2018 and (iv) $24.8 million of contractual AHYDO catch-up
payments to be made on iHeartCommunications' 14% Senior Notes due
2021 on the interest payment due on August 1, 2018. Our forecast
also includes approximately $1.8 billion in cash interest payments
in the next 12 months, of which $344.6 million is payable in the
fourth quarter of 2017 and $548.2 million is payable in the first
quarter of 2018. In addition, in certain circumstances, a committee
of the CCOH board of directors formed for the specific purpose of
monitoring the Intercompany Note (the “CCOH Intercompany Note
Committee”) has the non-exclusive authority to demand payments
under the Intercompany Note, as long as the CCOH board of directors
declares a simultaneous dividend equal to the amount so demanded.
As of November 8, 2017, the CCOH Intercompany Note Committee
has the right pursuant to the terms of the settlement for the
derivative litigation filed by CCOH’s stockholders regarding the
Intercompany Note but not the obligation, to make a demand on the
Intercompany Note. If the CCOH Intercompany Note Committee
exercised this right to demand a full repayment of the Intercompany
Note and the CCOH board of directors declared a simultaneous
dividend, based on the balance of the Intercompany Note outstanding
at September 30, 2017, approximately $110.4 million would be
payable to the public stockholders of CCOH. If we are unable to
refinance the receivables-based credit facility, the 10% Senior
Notes due January 15, 2018, and/or the 6.875% Senior Notes due June
15, 2018 and take other steps to create additional liquidity,
forecasted cash flows are not sufficient for us to meet our
obligations, including upcoming interest payments and maturities,
as they become due in the ordinary course of business for a period
of 12 months following November 8, 2017.
Conference Call
iHeartMedia, Inc. along with its wholly owned subsidiary,
iHeartCommunications, Inc., and its publicly traded subsidiary,
Clear Channel Outdoor Holdings, Inc., will host a conference call
to discuss results on November 8, 2017, at 8:30 a.m. Eastern
Time. The conference call number is (877) 531-2986 (U.S.
callers) and (612) 332-1210 (International callers) and the
passcode for both is 432190. 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 432190. 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 iHeartMedia, Inc. and
Subsidiaries
(In thousands)
Three Months EndedSeptember 30,
Nine Months EndedSeptember 30,
2017 2016 2017 2016
Revenue $
1,537,416 $ 1,566,582 $
4,457,106 $ 4,542,852 Operating expenses:
Direct operating expenses (excludes depreciation and amortization)
621,895 591,740 1,807,534 1,771,590 Selling, general and
administrative expenses (excludes depreciation and amortization)
438,654 421,700 1,336,563 1,281,849 Corporate expenses (excludes
depreciation and amortization) 77,967 86,832 233,487 252,348
Depreciation and amortization 149,749 158,453 443,650 476,053
Impairment charges 7,631 8,000 7,631 8,000 Other operating income
(expense), net (13,215 ) (505 ) 24,785 219,768
Operating income 228,305 299,352
653,026 972,780 Interest expense 470,250 459,852
1,388,747 1,389,793 Loss on investments, net (2,173 ) (13,767 )
(2,433 ) (13,767 ) Equity in earnings (loss) of nonconsolidated
affiliates (2,238 ) 1,117 (2,240 ) (926 ) Gain on extinguishment of
debt — 157,556 — 157,556 Other income (expense), net 2,223
(7,323 ) (11,244 ) (47,054 ) Loss before income taxes (244,133 )
(22,917 ) (751,638 ) (321,204 ) Income tax expense (2,051 ) (5,613
) (50,143 ) (42,243 ) Consolidated net loss (246,184 ) (28,530 )
(801,781 ) (363,447 ) Less: Amount attributable to noncontrolling
interest 1,993 6,471 8,648 38,950 Net
loss attributable to the Company
$ (248,177 )
$ (35,001 ) $ (810,429 )
$ (402,397 )
For the three months ended September 30, 2017, foreign
exchange rate movements increased the Company’s revenues by $10.2
million, increased direct operating expenses by $7.2 million and
SG&A expenses by $2.6 million. For the nine months ended
September 30, 2017, foreign exchange rate movements decreased
the Company’s revenues by $18.1 million, decreased direct operating
expenses by $11.3 million and SG&A expenses by $3.0
million.
TABLE 2 - Selected Balance Sheet
Information
Selected balance sheet information for September 30, 2017
and December 31, 2016:
(In millions) September 30, 2017
December 31, 2016 Cash $ 286.4 $ 845.0 Total Current Assets 2,027.5
2,504.7 Net Property, Plant and Equipment 1,888.1 1,948.2 Total
Assets 12,257.3 12,862.2 Current Liabilities (excluding current
portion of long-term debt) 1,240.6 1,331.7 Long-term Debt
(including current portion of long-term debt) 20,614.9 20,365.0
Shareholders’ Deficit (11,677.7 ) (10,885.5 )
TABLE 3 - Total Debt
At September 30, 2017 and December 31, 2016,
iHeartMedia, Inc. had total debt of:
(In millions) September 30, 2017
December 31, 2016 Senior Secured Credit Facilities $ 6,300.0 $
6,300.0 Receivables Based Credit Facility 365.0 330.0 Priority
Guarantee Notes 6,525.3 6,274.8 Subsidiary Revolving Credit
Facility due 2018 — — Other Secured Subsidiary Debt 8.7 21.0
Total Secured Debt 13,199.0 12,925.8 Senior Notes due 2021
1,763.9 1,729.2 iHeartCommunications Legacy Notes1 475.0 475.0
Senior Notes due 2018 96.5 347.0 Subsidiary Senior Notes due 2022
2,725.0 2,725.0 Subsidiary Senior Subordinated Notes due 2020
2,200.0 2,200.0 Subsidiary Senior Notes due 2020 375.0 225.0 Other
Subsidiary Debt 25.6 28.0 Purchase accounting adjustments and
original issue discount (142.8 ) (167.0 ) Long-term debt fees
(102.3 ) (123.0 ) Total long-term debt (including current portion
of long-term debt) $ 20,614.9 $ 20,365.0 1
Net of $57.1 million of outstanding Legacy Notes held by a
subsidiary of iHeartCommunications.
On January 31, 2017, iHeartCommunications prepaid $25.0 million
of the amount borrowed under its receivables-based credit facility,
bringing its total outstanding borrowings under this facility to
$305.0 million. On July 31, 2017, iHeartCommunications borrowed an
additional $60.0 million under its receivables-based credit
facility, bringing a total amount of $365.0 million outstanding
under this facility, which matures on December 24, 2017.
On February 7, 2017, iHeartCommunications completed an exchange
offer of $234.9 million principal amount of its 10.0% Senior Notes
due 2018 for $234.9 million principal amount of newly-issued 11.25%
Priority Guarantee Notes due 2021, which were issued as “additional
notes” under the indenture governing the 11.25% Priority Guarantee
Notes due 2021.
On July 10, 2017, iHeartCommunications exchanged $15.6 million
principal amount of iHeartCommunications' 10.0% Senior Notes due
2018 that were held by an unaffiliated third party for $15.6
million principal amount of iHeartCommunications' 11.25% Priority
Guarantee Notes due 2021 that were held by a subsidiary of
iHeartCommunications.
On August 14, 2017, Clear Channel International B.V.
(“CCIBV”), an indirect subsidiary of the Company, issued $150.0
million in aggregate principal amount of 8.75% Senior Notes due
2020 (the “New Notes”). The New Notes were issued as additional
notes under the indenture governing CCIBV’s existing 8.75% Senior
Notes due 2020 and were issued at a premium, which resulted in
$156.0 million in proceeds. The New Notes mature on
December 15, 2020 and bear interest at a rate of
8.75% per annum, payable semi-annually in arrears on
June 15 and December 15 of each year.
In October 2017, we exchanged $45.0 million in aggregate
principal amount of 11.25% Priority Guarantee Notes due 2021 that
were held by a subsidiary of iHeartCommunications for $45.0 million
of aggregate principal amount outstanding of its 10.0% Senior Notes
due 2018 that were held by unaffiliated third parties.
The current portion of long-term debt was $619.0 million and
$342.9 million as of September 30, 2017 and December 31,
2016, respectively.
Supplemental Disclosure Regarding
Non-GAAP Financial Information
The following tables set forth the Company’s OIBDAN for the
three and nine months ended September 30, 2017 and 2016. 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 Comprehensive Loss: Depreciation and amortization;
Impairment charges; and Other operating income (expense), 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 outdoor markets and businesses sold; (iii) revenues, excluding
political advertising revenues and (iv) corporate expenses,
excluding non-cash compensation expenses and 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 outdoor markets, in the second quarter of
2016, the Company sold its business in Turkey and in the fourth
quarter of 2016, the Company sold its business in Australia. In the
first quarter of 2017, the Company sold its Indianapolis market and
in the third quarter of 2017, the Company sold its business in
Canada. The Company presents revenues, direct operating and
SG&A expenses and OIBDAN, each excluding the effects of foreign
exchange rates and the results from outdoor markets and businesses
sold, for the consolidated Company and the Americas and
International outdoor 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 outdoor markets and businesses that were sold, as these results
will not be included in the Company’s results in current and future
periods.
The Company presents revenues, excluding the effects of
political revenue. Due to the cyclical nature of the electoral
system and the seasonality of the related political revenues,
management believes presenting revenue, excluding the effects of
political revenue, provides additional information to investors
about the Company’s revenue growth from period to period.
Corporate expenses, excluding the effects of non-cash
compensation expenses and the effects of foreign exchange rates, 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
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)
revenues, excluding political advertising revenues, to revenues;
(v) corporate expenses, excluding non-cash compensation expenses
and effects of foreign exchange rates, to corporate expenses; (vi)
consolidated and outdoor revenues, excluding effects of foreign
exchange rates and results from outdoor markets and businesses
sold, to consolidated and outdoor revenues; (vii) consolidated and
outdoor direct operating and SG&A expenses, excluding the
effects of foreign exchange rates and results from outdoor markets
and businesses sold, to consolidated and outdoor direct operating
and SG&A expenses; and (vii) consolidated and outdoor OIBDAN,
excluding effects of foreign exchange rates and results from
outdoor markets sold, to consolidated and outdoor 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)
OIBDAN,excludingeffects
offoreignexchange
Effects offoreignexchange
OIBDAN(subtotal)
Non-cashcompensationexpenses
Depreciationandamortization
Impairmentcharges
Otheroperating(income)expense, net
Operatingincome (loss)
Three Months Ended September 30, 2017 iHM $ 306,060 $ —
$ 306,060 $ — $ 58,089 $ — $ — $ 247,971 Americas
Outdoor 120,069 220
120,289 — 47,035 — — 73,254
International Outdoor 40,155 148
40,303 — 32,886 — — 7,417
Other 11,154 —
11,154 — 3,893 — — 7,261 Corporate (74,444 )
16
(74,428 ) 3,539 7,846 — — (85,813 ) Impairment
charges — —
— — — 7,631 — (7,631 ) Other operating expense,
net — —
— — — — 13,215 (13,215 ) Eliminations (939 ) —
(939 ) — — — — (939 )
Consolidated
$ 402,055 $ 384
$ 402,439 $ 3,539
$ 149,749 $ 7,631
$ 13,215 $ 228,305
Three Months Ended September 30, 2016 iHM $ 358,819 $ —
$ 358,819 $ — $ 60,691 $ — $ — $ 298,128 Americas
Outdoor 125,508 —
125,508 — 47,242 — — 78,266 International
Outdoor 55,299 —
55,299 — 37,018 — — 18,281 Other 14,126 —
14,126 — 4,483 — — 9,643 Corporate (83,348 ) —
(83,348 ) 3,484 9,019 — — (95,851 ) Impairment
charges — —
— — — 8,000 — (8,000 ) Other operating expense,
net — —
— — — — 505 (505 ) Eliminations (610 ) —
(610 ) — — — — (610 )
Consolidated
$ 469,794 $ —
$ 469,794 $ 3,484
$ 158,453 $ 8,000
$ 505 $ 299,352 (In
thousands)
OIBDAN,excludingeffects
offoreignexchange
Effects offoreignexchange
OIBDAN(subtotal)
Non-cashcompensationexpenses
Depreciationandamortization
Impairmentcharges
Otheroperating(income)expense, net
Operatingincome (loss)
Nine Months Ended September 30, 2017 iHM $ 833,088
$ —
$ 833,088 $ — $
174,946 $ — $ — $ 658,142 Americas Outdoor
326,883 365
327,248 — 137,689 — — 189,559 International
Outdoor 134,806 (4,193 )
130,613 — 95,149 — — 35,464 Other
24,810 —
24,810 — 11,097 — — 13,713 Corporate (226,399 )
1,932
(224,467 ) 9,020 24,769 — — (258,256 )
Impairment charges — —
— — — 7,631 — (7,631 ) Other
operating income, net —
— — — — (24,785 ) 24,785
Eliminations (2,750 )
(2,750 ) — —
— — (2,750 ) Consolidated
$
1,090,438 $ (1,896 ) $
1,088,542 $ 9,020 $
443,650 $ 7,631 $
(24,785 ) $ 653,026 Nine
Months Ended September 30, 2016 iHM $ 947,458 $ —
$
947,458 $ — $ 182,506 $ — $ — $ 764,952 Americas Outdoor
342,359 —
342,359 — 140,883 — — 201,476 International
Outdoor 169,192 —
169,192 — 113,075 — — 56,117 Other 31,014
—
31,014 — 12,809 — — 18,205 Corporate (241,998 ) —
(241,998 ) 10,350 26,780 — — (279,128 ) Impairment
charges — —
— — — 8,000 — (8,000 ) Other operating income,
net — —
— — — — (219,768 ) 219,768 Eliminations (610 ) —
(610 ) — — — —
(610 ) Consolidated
$ 1,247,415 $
— $ 1,247,415 $
10,350 $ 476,053 $
8,000 $ (219,768 ) $
972,780
Reconciliation of Revenues, excluding effects of foreign
exchange rates, to Revenues
(In thousands)
Three Months EndedSeptember 30,
%Change
Nine Months EndedSeptember 30,
%Change
2017 2016 2017 2016 Consolidated revenue $ 1,537,416
$ 1,566,582 (1.9 )% $ 4,457,106 $ 4,542,852 (1.9 )% Excluding:
Foreign exchange (increase) decrease (10,214 ) — 18,055
— Consolidated revenue, excluding effects of foreign
exchange
$ 1,527,202 $ 1,566,582
(2.5 )% $ 4,475,161
$ 4,542,852 (1.5 )%
Americas Outdoor revenue $ 316,587 $ 322,997 (2.0 )% $ 919,967 $
931,058 (1.2 )% Excluding: Foreign exchange increase (883 ) —
(2,748 ) — Americas Outdoor revenue, excluding
effects of foreign exchange
$ 315,704 $
322,997 (2.3 )% $ 917,219
$ 931,058 (1.5 )%
International Outdoor revenue $ 328,502 $ 346,224 (5.1 )% $ 942,167
$ 1,035,263 (9.0 )% Excluding: Foreign exchange (increase) decrease
(9,331 ) — 20,803 — International Outdoor
revenue, excluding effects of foreign exchange
$
319,171 $ 346,224 (7.8
)% $ 962,970 $ 1,035,263
(7.0 )%
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 EndedSeptember 30,
%Change
Nine Months EndedSeptember 30,
%Change
2017 2016 2017 2016 Consolidated direct operating and
SG&A expenses $ 1,060,549 $ 1,013,440 4.6 % $ 3,144,097 $
3,053,439 3.0 % Excluding: Foreign exchange (increase) decrease
(9,846 ) — 14,227 — Consolidated direct
operating and SG&A expenses, excluding effects of foreign
exchange
$ 1,050,703 $ 1,013,440
3.7 % $ 3,158,324
$ 3,053,439 3.4 % Americas
Outdoor direct operating and SG&A expenses $ 196,298 $ 197,489
(0.6 )% $ 592,719 $ 588,699 0.7 % Excluding: Foreign exchange
increase (663 ) — (2,383 ) — Americas Outdoor direct
operating and SG&A expenses, excluding effects of foreign
exchange
$ 195,635 $ 197,489
(0.9 )% $ 590,336
$ 588,699 0.3 % International
Outdoor direct operating and SG&A expenses $ 288,199 $ 290,925
(0.9 )% $ 811,554 $ 866,071 (6.3 )% Excluding: Foreign exchange
(increase) decrease (9,183 ) — 16,610 —
International Outdoor direct operating and SG&A expenses,
excluding effects of foreign exchange
$ 279,016
$ 290,925 (4.1 )%
$ 828,164 $ 866,071
(4.4 )%
Reconciliation of Revenues, excluding Political Advertising
Revenues, to Revenues
(In thousands)
Three Months EndedSeptember 30,
%Change
Nine Months EndedSeptember 30,
%Change
2017 2016 2017 2016 Consolidated revenue $ 1,537,416
$ 1,566,582 (1.9 )% $ 4,457,106 $ 4,542,852 (1.9 )% Excluding:
Political revenue (7,305 ) (18,645 ) (18,927 ) (45,248 )
Consolidated revenue, excluding effects of political revenue
$ 1,530,111 $ 1,547,937
(1.2 )% $ 4,438,179 $
4,497,604 (1.3 )% iHM revenue $
859,531 $ 857,099 0.3 % $ 2,501,084 $ 2,463,899 1.5 % Excluding:
Political revenue (5,288 ) (10,827 ) (13,618 ) (29,505 ) iHM
revenue excluding, effects of political revenue
$
854,243 $ 846,272 0.9
% $ 2,487,466 $ 2,434,394
2.2 % Americas Outdoor revenue $
316,587 $ 322,997 (2.0 )% $ 919,967 $ 931,058 (1.2 )% Excluding:
Political revenue (586 ) (802 ) (1,960 ) (1,609 ) Americas Outdoor
revenue, excluding effects of political revenue
$
316,001 $ 322,195 (1.9
)% $ 918,007 $ 929,449
(1.2 )% Other revenue $ 34,452 $ 41,414
(16.8 )% $ 99,332 $ 114,663 (13.4 )% Excluding: Political revenue
(1,431 ) (7,016 ) (3,349 ) (14,134 ) Other revenue, excluding
effects of political revenue
$ 33,021 $
34,398 (4.0 )% $ 95,983
$ 100,529 (4.5 )%
Reconciliation of Corporate Expenses, excluding Non-cash
compensation expenses and effects of foreign exchange rates, to
Corporate Expenses
(In thousands)
Three Months EndedSeptember 30,
%Change
Nine Months EndedSeptember 30,
%Change
2017 2016 2017 2016 Corporate Expense $ 77,967 $
86,832 (10.2 )% $ 233,487 $ 252,348 (7.5 )% Excluding: Non-cash
compensation expense (3,539 ) (3,484 ) (9,020 ) (10,350 ) Corporate
Expense, excluding non-cash compensation expense
$
74,428 $ 83,348 (10.7 )%
$ 224,467 $ 241,998 (7.2
)% Excluding: Foreign exchange decrease 16 —
1,932 — Corporate Expense, excluding non-cash
compensation expense and movements in foreign exchange
$
74,444 $ 83,348 (10.7
)% $ 226,399 $ 241,998
(6.4 )%
Reconciliation of Consolidated and Outdoor Revenues,
excluding effects of foreign exchange rates and results from
outdoor markets and businesses sold, to Consolidated and Outdoor
Revenues
(In thousands)
Three Months EndedSeptember 30,
%Change
Nine Months EndedSeptember 30,
%Change
2017 2016 2017 2016 Consolidated revenue $ 1,537,416
$ 1,566,582 (1.9 )% $ 4,457,106 $ 4,542,852 (1.9 )% Excluding:
Revenue from outdoor markets and businesses sold (2,597 ) (41,915 )
(13,680 ) (131,154 ) Excluding: Foreign exchange (increase)
decrease (10,214 ) — 18,055 — Consolidated
revenue, excluding effects of foreign exchange and revenue from
outdoor markets and businesses sold
$ 1,524,605
$ 1,524,667 — % $
4,461,481 $ 4,411,698 1.1
% Americas Outdoor revenue $ 316,587 $ 322,997 (2.0 )% $
919,967 $ 931,058 (1.2 )% Excluding: Revenue from markets and
business sold (2,597 ) (6,765 ) (13,680 ) (24,609 ) Excluding:
Foreign exchange increase (883 ) — (2,748 ) —
Americas Outdoor revenue, excluding effects of foreign exchange and
revenue from markets and business sold
$ 313,107
$ 316,232 (1.0 )%
$ 903,539 $ 906,449
(0.3 )% International Outdoor revenue $ 328,502 $
346,224 (5.1 )% $ 942,167 $ 1,035,263 (9.0 )% Excluding: Revenue
from businesses sold — (35,150 ) — (106,545 ) Excluding: Foreign
exchange (increase) decrease (9,331 ) — 20,803 —
International Outdoor revenue, excluding effects of foreign
exchange and revenue from businesses sold
$ 319,171
$ 311,074 2.6 % $
962,970 $ 928,718 3.7
%
Reconciliation of Consolidated and Outdoor Direct operating
and SG&A expenses, excluding effects of foreign exchange rates
and results from outdoor markets and businesses sold, to
Consolidated and Outdoor Direct operating and SG&A
expenses
(In thousands)
Three Months EndedSeptember 30,
%Change
Nine Months EndedSeptember 30,
%Change
2017 2016 2017 2016 Consolidated direct operating and
SG&A expenses $ 1,060,549 $ 1,013,440 4.6 % $ 3,144,097 $
3,053,439 3.0 % Excluding: Operating expenses from outdoor markets
and businesses sold (2,420 ) (33,765 ) (13,585 ) (108,587 )
Excluding: Foreign exchange decrease (9,846 ) — 14,227
— Consolidated direct operating and SG&A
expenses, excluding effects of foreign exchange and operating
expenses from outdoor markets and businesses sold
$
1,048,283 $ 979,675 7.0
% $ 3,144,739 $ 2,944,852
6.8 % Americas Outdoor direct operating and
SG&A expenses $ 196,298 $ 197,489 (0.6 )% $ 592,719 $ 588,699
0.7 % Excluding: Operating expenses from markets and business sold
(2,420 ) (6,881 ) (13,585 ) (23,485 ) Excluding: Foreign exchange
decrease (663 ) — (2,383 ) — Americas Outdoor direct
operating and SG&A expenses, excluding effects of foreign
exchange and operating expenses from markets and business sold
$ 193,215 $ 190,608
1.4 % $ 576,751 $
565,214 2.0 % International Outdoor
direct operating and SG&A expenses $ 288,199 $ 290,925 (0.9 )%
$ 811,554 $ 866,071 (6.3 )% Excluding: Operating expenses from
businesses sold — (26,884 ) — (85,102 ) Excluding: Foreign exchange
decrease (9,183 ) — 16,610 — International
Outdoor direct operating and SG&A expenses, excluding effects
of foreign exchange and operating expenses from businesses sold
$ 279,016 $ 264,041
5.7 % $ 828,164 $
780,969 6.0 %
Reconciliation of Consolidated and Outdoor OIBDAN, excluding
effects of foreign exchange rates and results from outdoor markets
and businesses sold, to Consolidated and Outdoor Operating
income
(In thousands)
Three Months EndedSeptember 30,
%Change
Nine Months EndedSeptember 30,
%Change
2017 2016 2017 2016 Consolidated operating income $
228,305 $ 299,352 (23.7 )% $ 653,026 $ 972,780 (32.9 )% Excluding:
Revenue, direct operating and SG&A expenses from outdoor
markets and businesses sold (177 ) (8,150 ) (95 ) (22,567 )
Excluding: Foreign exchange decrease (384 ) — 1,896 — Excluding:
Non-cash compensation expenses 3,539 3,484 9,020 10,350 Excluding:
Depreciation and amortization 149,749 158,453 443,650 476,053
Excluding: Impairment 7,631 8,000 7,631 8,000 Excluding: Other
operating (income) expense, net 13,215 505 (24,785 )
(219,768 ) Consolidated OIBDAN, excluding effects of foreign
exchange and OIBDAN from outdoor markets and businesses sold
$ 401,878 $ 461,644
(12.9 )% $ 1,090,343 $
1,224,848 (11.0 )% Americas Outdoor
operating income $ 73,254 $ 78,266 (6.4 )% $ 189,559 $ 201,476 (5.9
)% Excluding: Revenue, direct operating and SG&A expenses from
markets and business sold (177 ) 116 (95 ) (1,124 ) Excluding:
Foreign exchange decrease (220 ) — (365 ) — Excluding: Depreciation
and amortization 47,035 47,242 137,689 140,883
Americas Outdoor OIBDAN, excluding effects of foreign
exchange and OIBDAN from markets and business sold
$
119,892 $ 125,624 (4.6
)% $ 326,788 $ 341,235
(4.2 )% International Outdoor operating income
$ 7,417 $ 18,281 (59.4 )% $ 35,464 $ 56,117 (36.8 )% Excluding:
Revenue, direct operating and SG&A expenses of businesses sold
— (8,266 ) — (21,443 ) Excluding: Foreign exchange decrease (148 )
— 4,193 — Excluding: Depreciation and amortization 32,886
37,018 95,149 113,075 International Outdoor
OIBDAN, excluding effects of foreign exchange and OIBDAN from
businesses sold
$ 40,155 $
47,033 (14.6 )% $ 134,806
$ 147,749 (8.8 )%
About iHeartMedia, Inc.
iHeartMedia, Inc. (PINK: IHRT) is one of the leading global
multi-platform media and entertainment companies specializing in
radio, digital, out-of-home, mobile, live events, and on-demand
entertainment and information services for local communities and
providing premier opportunities for advertisers. Its
iHeartMedia division has the largest reach of any radio or
television outlet in America, serving 160+ local markets through
856 owned radio stations in addition to its iHeartRadio digital
platform. Its publicly traded Clear Channel Outdoor Holdings, Inc.
division (NYSE: CCO) is one of the world’s largest out-of-home
advertising companies, with over 580,000 displays in 31 countries
across four continents, including 42 of the 50 largest markets in
the United States. More information is available at www.iheartmedia.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 iHeartMedia, Inc. and its subsidiaries, including
iHeartMedia Capital I, LLC, iHeartCommunications, Inc. and Clear
Channel Outdoor Holdings, Inc., 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, our expectations about certain markets
and our liquidity, 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: the Company's ability to
continue as a going concern; 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 and
liquidity-generating transactions to make payments on its
indebtedness; 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; and risks that the anticipated cost savings
from the Company's strategic revenue and efficiency initiatives may
not persist. 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 in the section entitled “Item 1A. Risk
Factors” of iHeartMedia, Inc.’s, Clear Channel Outdoor Holdings,
Inc.’s, iHeartMedia Capital I, LLC’s and iHeartCommunications,
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/20171108005484/en/
iHeartMedia, Inc.MediaWendy
Goldberg, 212-377-1105Executive Vice President –
CommunicationsorInvestorsEileen
McLaughlin, 212-377-1116Vice President – Investor Relations
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