Clear Channel Outdoor Holdings, Inc. (NYSE:CCO) today reported
financial results for the third quarter ended September 30,
2017.
“Our Outdoor businesses continue to build out our digital
footprint worldwide,” said Bob Pittman, Chairman and Chief
Executive Officer of Clear Channel Outdoor Holdings, Inc. “At the
same time, we are focused on enhancing our automated ad-buying,
data analytics and attribution capabilities to generate improved
results for our advertising and marketing partners.”
Rich Bressler, Chief Financial Officer of Clear Channel Outdoor
Holdings, Inc. said: “Our consolidated results decreased in the
third quarter. However, revenue increased, after adjusting for the
impact from foreign exchange and certain businesses we sold. We
continue to be committed to financial discipline as we invest in
data, programmatic and attribution to grow our businesses.”
Key Financial Highlights
The Company’s key financial highlights for the third quarter of
2017 include:
- Consolidated revenue decreased 3.6%.
Consolidated revenue increased 0.8%, after adjusting for a $10.2
million impact from movements in foreign exchange rates and the
$39.3 million impact of the sale of certain businesses.
- Americas 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 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
business in Australia.
- Operating income decreased 49.3% to
$30.8 million.
- OIBDAN decreased 17.6%. OIBDAN
decreased 13.4%, excluding the impact from movements in foreign
exchange rates and the impact of the sale of certain
businesses.
Key Non-Financial
Highlights
The Company’s recent key non-financial highlights include:
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 Americas $
316,587 $ 322,997 (2.0 )% $ 919,967 $ 931,058 (1.2 )% International
328,502 346,224 (5.1 )% 942,167 1,035,263
(9.0 )%
Consolidated revenue $ 645,089
$ 669,221 (3.6 )%
$ 1,862,134 $ 1,966,321
(5.3 )% Direct Operating and SG&A expenses1
Americas $ 196,298 $ 197,489 (0.6 )% $ 592,719 $ 588,699 0.7 %
International 288,199 290,925 (0.9 )% 811,554
866,071 (6.3 )%
Consolidated Direct
Operating and SG&A expenses1
$ 484,497 $ 488,414
(0.8 )% $ 1,404,273
$ 1,454,770 (3.5 )% Operating
income Americas $ 73,254 $ 78,266 (6.4 )% $ 189,559 $ 201,476 (5.9
)% International 7,417 18,281 (59.4 )% 35,464 56,117 (36.8 )%
Corporate2 (36,508 ) (29,623 ) 23.2 % (109,255 ) (90,191 ) 21.1 %
Impairment charges (1,591 ) (7,274 ) (78.1 )% (1,591 ) (7,274 )
(78.1 )% Other operating income, net (11,783 ) 1,095 28,657
226,485
Consolidated Operating income $
30,789 $ 60,745 (49.3
)% $ 142,834 $ 386,613
(63.1 )% 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 $1.2 million and $1.5
million for the three months ended September 30, 2017 and 2016,
respectively, and $4.0 million and $4.2 million for the nine months
ended September 30, 2017 and 2016, respectively.
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 Americas $ 315,704 $ 322,997 (2.3 )%
$ 917,219 $ 931,058 (1.5 )% International 319,171 346,224
(7.8 )% 962,970 1,035,263 (7.0 )%
Consolidated revenue
excluding movements in foreign exchange
$ 634,875 $ 669,221
(5.1 )% $ 1,880,189 $
1,966,321 (4.4 )% Direct Operating and
SG&A expenses1 excluding movements in foreign exchange Americas
$ 195,635 $ 197,489 (0.9 )% $ 590,336 $ 588,699 0.3 % International
279,016 290,925 (4.1 )% 828,164 866,071
(4.4 )%
Consolidated Direct Operating
and SG&A expenses excluding movements
in foreign exchange
$ 474,651 $ 488,414
(2.8 )% $ 1,418,500 $
1,454,770 (2.5 )% OIBDAN Americas $
120,289 $ 125,508 (4.2 )% $ 327,248 $ 342,359 (4.4 )% International
40,303 55,299 (27.1 )% 130,613 169,192 (22.8 )% Corporate (32,439 )
(25,361 ) 27.9 % (98,060 ) (77,809 ) 26.0 %
Consolidated
OIBDAN $ 128,153 $ 155,446
(17.6 )% $ 359,801
$ 433,742 (17.0 )%
OIBDAN excluding movements in foreign
exchange
Americas $ 120,069 $ 125,508 (4.3 )% $ 326,883 $ 342,359 (4.5 )%
International 40,155 55,299 (27.4 )% 134,806 169,192 (20.3 )%
Corporate (32,455 ) (25,361 ) 28.0 % (99,992 ) (77,809 ) 28.5 %
Consolidated OIBDAN
excluding movements in foreign exchange
$ 127,769 $ 155,446
(17.8 )% $ 361,697 $
433,742 (16.6 )% Revenue excluding
effects of foreign exchange and revenue from markets and businesses
sold Americas $ 313,107 $ 316,232 (1.0 )% $ 903,539 $ 906,449 (0.3
)% International $ 319,171 $ 311,074 2.6 % $ 962,970 $ 928,718 3.7
%
Consolidated revenue,
excluding effects of foreign exchange
and revenue from markets and businesses
sold
$ 632,278 $ 627,306 0.8 %
$ 1,866,509 $ 1,835,167 1.7
% OIBDAN excluding effects of foreign exchange and revenue
from markets and businesses sold Americas $ 119,892 $ 125,624 (4.6
)% $ 326,788 $ 341,235 (4.2 )% International $ 40,155 $ 47,033
(14.6 )% $ 134,806 $ 147,749 (8.8 )%
Consolidated OIBDAN,
excluding effects of foreign exchange
and revenue from markets and businesses
sold
$ 127,592 $ 147,296 (13.4
)% $ 361,602 $ 411,175
(12.1 )%
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) corporate expenses, excluding non-cash
compensation expenses and effects of foreign exchange rates, to
corporate expenses; (v) Consolidated and segment revenues,
excluding 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 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 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.
Third Quarter 2017
Results
Consolidated
Consolidated revenue decreased $24.1 million, or 3.6%, during
the third quarter of 2017 as compared to the third quarter of 2016.
Consolidated revenue increased $5.0 million, or 0.8%, after
adjusting for a $10.2 million impact from movements in foreign
exchange rates and the $39.3 million impact from the sale of
certain businesses.
Consolidated direct operating and SG&A expenses decreased
$3.9 million, or 0.8%, during the third quarter of 2017 as compared
to the third quarter of 2016. Consolidated direct operating and
SG&A expenses increased $17.6 million, or 3.9%, in the third
quarter, after adjusting for a $9.8 million impact from movements
in foreign exchange rates and the $31.4 million impact from the
sale of certain businesses.
Consolidated operating income decreased 49.3% to $30.8 million,
during the third quarter of 2017 as compared to the third quarter
of 2016.
The Company's OIBDAN decreased 17.6% to $128.2 million, during
the third quarter of 2017 as compared to the third quarter of 2016.
The Company’s OIBDAN decreased 13.4% in the third quarter 2017
compared to the same period of 2016, after adjusting for movements
in foreign exchange rates and the impact from the sale of certain
businesses.
Included in the 2017 third quarter operating income and OIBDAN
were $2.5 million of direct operating and SG&A expenses and
$0.1 million of Corporate expenses associated with the Company’s
strategic revenue and efficiency initiatives, a decrease of $0.7
million compared to such expenses in the prior year.
Americas
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.
OIBDAN decreased $5.2 million, or 4.2%. OIBDAN decreased $5.7
million, or 4.6%, during the third quarter of 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
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 of 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 in 2016. 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.
Clear Channel International B.V. (“CCIBV”)
CCIBV’s consolidated revenues decreased $23.6 million to $257.2
million in the third quarter of 2017 compared to the same period in
2016. This decrease includes a $9.3 million impact from movements
in foreign exchange rates. Excluding the impact from movements in
foreign exchange rates and a $35.2 million decrease resulting from
the sale of our Australia and Turkey businesses in 2016, CCIBV
revenues increased $2.3 million during the third quarter of 2017 as
compared to the same period in 2016.
CCIBV’s operating loss was $22.6 million in the third quarter of
2017 compared to operating loss of $13.5 million in the same period
in 2016.
Liquidity and Financial
Position
As of September 30, 2017, we had $222.4 million of cash on
our balance sheet, including $206.1 million of cash held outside
the U.S. by our subsidiaries. For the nine months ended
September 30, 2017, cash provided by operating activities was
$72.1 million, cash used for investing activities was $87.1
million, cash used for financing activities was $312.1 million, and
there was $7.5 million impact from movements in foreign exchange
rates on cash. The net decrease in cash from December 31, 2016 was
$319.6 million.
On August 14, 2017, Clear Channel International B.V.
("CCIBV"), our indirect subsidiary, issued $150.0 million in
aggregate principal amount of 8.75% Senior Notes due 2020 (the “New
CCIBV Notes”). The New CCIBV 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 CCIBV 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.
Capital expenditures for the nine months ended
September 30, 2017 were $134.9 million compared to $148.0
million for the same period in 2016.
On February 23, 2017, we paid 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.
On October 5, 2017, we made a demand for repayment of $25.0
million outstanding under the Due from iHeartCommunications Note
and simultaneously paid a special cash dividend of $25.0 million.
iHeartCommunications received approximately 89.5%, or approximately
$22.4 million, of the proceeds of the dividend through its
wholly-owned subsidiaries, with the remaining approximately 10.5%,
or approximately $2.6 million, of the proceeds of the dividend paid
to our public stockholders. On October 31, 2017, we made a demand
for repayment of $25.0 million outstanding under the Due from
iHeartCommunications Note and simultaneously paid a special cash
dividend of $25.0 million. iHeartCommunications received
approximately 89.5%, or approximately $22.4 million, of the
proceeds of the dividend through its wholly-owned subsidiaries,
with the remaining approximately 10.5%, or approximately $2.6
million, of the proceeds of the dividend paid to our public
stockholders.
Conference Call
The Company, along with its parent company, iHeartMedia, 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 Clear
Channel Outdoor Holdings, Inc. and Subsidiaries
(In thousands) Three Months
EndedSeptember 30, Nine Months EndedSeptember 30, 2017
2016 2017 2016 Revenue $ 645,089 $ 669,221 $
1,862,134 1,966,321 Operating expenses:
Direct operating expenses
(excludes depreciation and amortization)
356,100 362,250 1,034,204 1,066,238
Selling, general and administrative
expenses (excludes depreciation and amortization)
128,397 126,164 370,069 388,532
Corporate expenses (excludes depreciation
and amortization)
35,333 28,103 105,213 86,000 Depreciation and amortization 81,096
85,780 236,880 258,149 Impairment charges 1,591 7,274 1,591 7,274
Other operating income (expense), net (11,783 ) 1,095 28,657
226,485
Operating income 30,789
60,745 142,834 386,613 Interest expense 95,467
93,313 282,730 281,836
Interest income on Due
from iHeartCommunications
17,087 12,429 47,277 36,433 Equity in loss of nonconsolidated
affiliates (628 ) (727 ) (829 ) (1,374 ) Other income (expense),
net 9,164 (6,524 ) 21,804 (46,198 ) Income (loss)
before income taxes (39,055 ) (27,390 ) (71,644 ) 93,638 Income tax
benefit (expense) (16,347 ) 3,619 (12,900 ) (37,579 )
Consolidated net income (loss) (55,402 ) (23,771 ) (84,544 ) 56,059
Less: Amount attributable to
noncontrolling interest
6,237 7,329 10,873 16,162
Net income
(loss) attributable to the Company $ (61,639
) $ (31,100 ) $ (95,417
) $ 39,897
For the three months ended September 30, 2017, foreign
exchange rate movements increased the Company’s revenues by $10.2
million and increased direct operating expenses by $7.2 million,
SG&A expenses by $2.6 million and Corporate expenses by $0.0
million. For the nine months ended September 30, 2017, foreign
exchange rate movements decreased the Company’s revenues by $18.1
million and decreased direct operating expenses by $11.3 million,
SG&A expenses by $3.0 million and Corporate expenses by $1.9
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 and cash equivalents $ 222.4 $ 542.0 Total
current assets 1,049.2 1,341.4 Net property, plant and equipment
1,380.4 1,412.8 Due from iHeartCommunications 1,051.3 885.7 Total
assets 5,580.5 5,718.8 Current liabilities (excluding current
portion of long-term debt) 711.0 634.7 Long-term debt (including
current portion of long-term debt) 5,264.9 5,117.0 Shareholders’
deficit (1,284.2) (930.9)
TABLE 3 - Total Debt
At September 30, 2017 and December 31, 2016, Clear
Channel Outdoor Holdings had a total net debt of:
(In millions) September 30, 2017
December 31, 2016 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 375.0 225.0 Other debt 2.5 14.8 Original issue discount (0.1)
(6.7) Long-term debt fees (37.5) (41.1) Total debt 5,264.9 5,117.0
Cash 222.4 542.0 Net Debt $ 5,042.5 $ 4,575.0
On August 14, 2017, Clear Channel International B.V.
("CCIBV"), our indirect subsidiary, issued $150.0 million in
aggregate principal amount of 8.75% Senior Notes due 2020 (the “New
CCIBV Notes”). The New CCIBV 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 CCIBV 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.
The current portion of long-term debt was $0.6 million and $7.0
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 Operations: 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 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
Australia and Turkey in the second and fourth quarters of 2016,
respectively. In the first quarter of 2017, the Company sold its
Indianapolis market. 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
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 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 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
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-cashcompensationexpenses
Depreciationandamortization
Impairmentcharges
Otheroperating(income)expense, net
Operatingincome (loss)
Three Months Ended
September 30, 2017 Americas $ 120,069 $ 220
$
120,289 $ — $ 47,035 $ — $ — $ 73,254 International 40,155
148
40,303 — 32,886 — — 7,417 Corporate (32,455 ) 16
(32,439 ) 2,894 1,175 — — (36,508 ) Impairment
charges — —
— — — 1,591 — (1,591 ) Other operating expense,
net — —
— — — —
11,783 (11,783 )
Consolidated $ 127,769
$ 384 $ 128,153
$ 2,894 $ 81,096 $
1,591 $ 11,783 $
30,789 Three Months Ended September 30, 2016
Americas $ 125,508 $ —
$ 125,508 $ — $ 47,242 $ — $ —
$ 78,266 International 55,299 —
55,299 — 37,018 — — 18,281
Corporate (25,361 ) —
(25,361 ) 2,742 1,520 — —
(29,623 ) Impairment charges — —
— — — 7,274 — (7,274 )
Other operating income, net — —
—
— — — (1,095 ) 1,095
Consolidated $ 155,446 $
— $ 155,446 $
2,742 $ 85,780 $
7,274 $ (1,095 ) $
60,745 (In thousands)
OIBDANexcludingeffects
offoreignexchange
Foreignexchangeeffects
OIBDAN (subtotal)
Non-cashcompensationexpenses
Depreciationandamortization
Impairmentcharges
Otheroperating(income)expense, net
Operatingincome (loss)
Nine Months Ended September 30, 2017
Americas $ 326,883 $ 365
$
327,248 $ — $ 137,689
$ — $ — $ 189,559 International
134,806 (4,193 )
130,613 — 95,149 — — 35,464 Corporate
(99,992 ) 1,932
(98,060 ) 7,153 4,042 — — (109,255 )
Impairment charges — —
— — — 1,591 — (1,591 ) Other
operating income, net — —
— — —
— (28,657 ) 28,657
Consolidated
$ 361,697 $ (1,896 )
$ 359,801 $ 7,153
$ 236,880 $ 1,591
$ (28,657 ) $ 142,834
Nine Months Ended September 30, 2016 Americas $ 342,359 $ —
$ 342,359 $ — $ 140,883 $ — $ — $ 201,476
International 169,192 —
169,192 — 113,075 — — 56,117
Corporate (77,809 ) —
(77,809 ) 8,191 4,191 — —
(90,191 ) Impairment charges — —
— — — 7,274 — (7,274 )
Other operating income, net — —
— —
— — (226,485 ) 226,485
Consolidated $ 433,742 $
— $ 433,742 $
8,191 $ 258,149 $
7,274 $ (226,485 ) $
386,613
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 $ 645,089 $ 669,221 (3.6 )% $ 1,862,134 1,966,321 (5.3 )%
Excluding: Foreign
exchange (increase) decrease
(10,214 ) — 18,055 —
Consolidated revenue
excluding effects of foreign exchange
$ 634,875 $ 669,221 (5.1
)%
$ 1,880,189 $ 1,966,321
(4.4 )% Americas revenue $ 316,587 $ 322,997 (2.0 )%
$ 919,967 $ 931,058 (1.2 )%
Excluding: Foreign
exchange increase
(883 ) — (2,748 ) —
Americas revenue excluding effects of
foreign exchange
$ 315,704 $ 322,997 (2.3
)%
$ 917,219 $ 931,058
(1.5 )% International revenue $ 328,502 $ 346,224 (5.1 )% $
942,167 $ 1,035,263 (9.0 )%
Excluding: Foreign
exchange (increase) decrease
(9,331 ) — 20,803 —
International 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
$ 484,497 $ 488,414 (0.8 )% $ 1,404,273 $ 1,454,770 (3.5 )%
Excluding: Foreign
exchange (increase) decrease
(9,846 ) — 14,227 —
Consolidated direct operating
and SG&A expenses excluding effects of foreign
exchange
$ 474,651 $ 488,414 (2.8
)%
$ 1,418,500 $ 1,454,770
(2.5 )%
Americas 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 direct operating
and SG&A expenses excluding effects of foreign
exchange
$ 195,635 $ 197,489 (0.9
)%
$ 590,336 $ 588,699
0.3 %
International 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 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 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 $
35,333 $ 28,103 25.7 % $ 105,213 $ 86,000 22.3 %
Excluding: Non-cash compensation
expense
(2,894 ) (2,742 ) (7,153 ) (8,191 )
Corporate Expense excluding non-cash
compensation expense
$ 32,439 $ 25,361 27.9 %
$
98,060 $ 77,809 26.0 %
Excluding: Foreign
exchange decrease
$ 16 $ — $ 1,932 $ —
Corporate Expense excluding non- cash
compensation expense and effects of foreign exchange
$ 32,455 $ 25,361 28.0 %
$ 99,992 $ 77,809 28.5 %
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 EndedSeptember 30, %
Change
Nine Months EndedSeptember 30, %
Change
2017 2016 2017 2016 Consolidated
revenue $ 645,089 $ 669,221 (3.6 )% $ 1,862,134 $ 1,966,321 (5.3 )%
Excluding: Revenue from markets and
businesses sold
(2,597 ) (41,915 ) (13,680 ) (131,154 ) Excluding: Foreign exchange
decrease (10,214 ) — 18,055 —
Consolidated revenue, excluding effects of
foreign exchange and revenue from markets and businesses
sold
$ 632,278 $ 627,306 0.8 %
$ 1,866,509 $ 1,835,167
1.7 % Americas 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 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 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 decrease (9,331
) — 20,803 —
International 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 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 EndedSeptember 30, %
Change
Nine Months EndedSeptember 30, %
Change
2017 2016 2017 2016 Consolidated direct
operating and SG&A expenses $ 484,497 $ 488,414 (0.8 )% $
1,404,273 $ 1,454,770 (3.5 )%
Excluding: Operating expenses from 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 markets and
businesses sold
$ 472,231 $ 454,649 3.9 %
$ 1,404,915 $ 1,346,183
4.4 % Americas 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
increase (663 ) — (2,383 ) —
Americas 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 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 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 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 EndedSeptember 30, %
Change
Nine Months EndedSeptember 30, %
Change
2017 2016 2017 2016 Consolidated
operating income $ 30,789 $ 60,745 (49.3 )% $ 142,834 $ 386,613
(63.1 )%
Excluding: Revenue, direct operating and
SG&A expenses from markets and businesses sold
(177 ) (8,150 ) (95 ) (22,567 ) Excluding: Foreign exchange
decrease (384 ) — 1,896 — Excluding: Non-cash compensation expense
2,894 2,742 7,153 8,191 Excluding: Depreciation and amortization
81,096 85,780 236,880 258,149 Excluding: Impairment charges 1,591
7,274 1,591 7,274 Excluding: Other operating (income) expense, net
11,783 (1,095 ) (28,657 ) (226,485 )
Consolidated OIBDAN, excluding effects of
foreign exchange and OIBDAN from markets and businesses
sold
$ 127,592 $ 147,296 (13.4
)%
$ 361,602 $ 411,175
(12.1 )% 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 increase (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 Clear Channel Outdoor Holdings, Inc.
Clear Channel Outdoor Holdings, Inc., (NYSE: CCO) is one of the
world’s largest outdoor advertising companies, with over 580,000
displays in 31 countries across four continents, including 42 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 1,100 digital
billboards across 28 markets in the United States. Clear Channel
Outdoor Holdings’ International segment operates in 18 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: the impact of iHeartCommunications' substantial
indebtedness and liquidity position on our liquidity and operating
flexibility; 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, which has a significant need for
capital. 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.
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version on businesswire.com: http://www.businesswire.com/news/home/20171108005578/en/
Clear Channel Outdoor Holdings, Inc.MediaWendy Goldberg, 212-377-1105Executive Vice
President – CommunicationsorInvestorsEileen McLaughlin, 212-377-1116Vice
President – Investor Relations
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