Clear Channel Outdoor Holdings, Inc. Reports Results For 2016 Third Quarter

Clear Channel Outdoor Holdings, Inc. (NYSE:CCO) today reported financial results for the third quarter ended September 30, 2016.

"In this quarter, our Americas and International outdoor businesses continued to invest in building programmatic buying platforms and developing new research analytics tools to help ensure our place with our advertisers in an increasingly digital world," said Bob Pittman, Chairman and Chief Executive Officer of Clear Channel Outdoor Holdings, Inc. "To stay as competitive as possible, we believe it's critical to do business with advertising and marketing partners in the same way that the digital advertising industry does today. And, we continue to invest in our digital out-of-home network to expand our ability to offer innovative solutions to our marketing partners."

"International outdoor delivered growth in both revenues and operating income," said Rich Bressler, Chief Financial Officer. "Americas outdoor revenue and operating income declined due to the sale of nine non-strategic markets. Excluding the sale, Americas outdoor revenues increased."

Key Financial Highlights

The Company's key financial highlights for the third quarter of 2016 include:
  • Consolidated revenue decreased 3.3%. Consolidated revenue increased 2.3%, after adjusting for a $5.9 million impact from movements in foreign exchange rates and the $32.8 million impact of non-strategic markets sold in 2016.
  • Americas revenues decreased $24.3 million, or 7.0%. Revenues increased $3.5 million, or 1.1%, after adjusting for a $0.1 million impact from movements in foreign exchange rates and a $27.9 million impact from the sale of non-strategic markets.
  • International revenues increased $1.2 million, or 0.3%. Revenues increased $12.1 million, or 3.5%, after adjusting for a $6.0 million impact from movements in foreign exchange rates and a $4.9 million impact from the sale of our business in Turkey in the second quarter of 2016.
  • Operating income increased 14.7% to $60.8 million. OIBDAN decreased 5.8%. OIBDAN increased 1.6%, excluding the impact from movements in foreign exchange rates and the impact of the non-strategic markets sold in 2016.

Key Non-Financial Highlights

The Company's recent key non-financial highlights include:
  • Installed 911 new digital displays in our North American and international markets for an end-of-quarter total of 1,082 across 28 markets in North America and over 9,000 digital displays in our international markets.
  • Renewed the contract for the Hartsfield-Jackson Atlanta International Airport, recently named the "World's Busiest Airport" for the 18th consecutive year.
  • Secured a new contract for the Roanoke-Blacksburg Regional Airport in Southern Virginia, home to Virginia Tech University and 20 other colleges and universities and awarded the media contract for the Punta Cana International Airport in the Dominican Republic.
  • Announced the conversion of 500 telephone boxes in London acquired in the first quarter into brand new phone boxes featuring Wi-Fi, interactive local maps and payphone services, with an Adshel Live digital screen integrated into every unit.
  • Awarded rights to market more than 800 display sites at premium municipal locations in Lucerne, Switzerland.
  • Launched Trace tool in the UK, which tracks the consumer purchase journey and allows media planners and advertisers to explore how best to engage their target audiences at the right time, in the right place with the right message.

GAAP Measures by Segment
 
(In thousands)    

Three Months EndedSeptember 30,
   

%Change
   

Nine Months EndedSeptember 30,
   

%Change
2016     2015 2016     2015
Revenue
Americas $ 322,997 $ 347,336 (7.0 )% $ 931,058 $ 984,485 (5.4 )%
International 350,060   348,941   0.3 % 1,044,866   1,049,654   (0.5 )%
Consolidated revenue $ 673,057   $ 696,277   (3.3 )% $ 1,975,924   $ 2,034,139   (2.9 )%

Direct Operating and SG&A expenses 1
Americas $ 197,489 $ 208,611 (5.3 )% $ 588,699 $ 617,540 (4.7 )%
International 294,761     296,664   (0.6 )% 875,674   882,700   (0.8 )%
Consolidated Direct Operating and SG&A expenses 1 $ 492,250     $ 505,275   (2.6 )% $ 1,464,373   $ 1,500,240   (2.4 )%
Operating income
Americas $ 78,266 $ 88,604 (11.7 )% $ 201,476 $ 215,371 (6.5 )%
International 18,281 10,713 70.6 % 56,117 41,993 33.6 %
Corporate 2 (29,578 ) (29,702 ) (0.4 )% (90,140 ) (91,258 ) (1.2 )%
Impairment charges (7,274 ) (21,631 ) (66.4 )% (7,274 ) (21,631 ) (66.4 )%
Other operating income (loss), net 1,095   5,029   (78.2 )% 226,485   244   92,721.7 %
Consolidated Operating income $ 60,790   $ 53,013   14.7 % $ 386,664   $ 144,719   167.2 %
 
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 $1.5 million and $1.4 million for the three months ended September 30, 2016 and 2015, respectively, and $4.2 million and $4.0 million for the nine months ended September 30, 2016 and 2015, respectively.
 

Non-GAAP Measures 1 (see preceding table for comparable GAAP measures)
 
(In thousands)    

Three Months EndedSeptember 30,
   

%Change
   

Nine Months EndedSeptember 30,
   

%Change
2016     2015 2016     2015
Revenue excluding movements in foreign exchange
Americas $ 322,857 $ 347,336 (7.0 )% $ 938,920 $ 984,485 (4.6 )%
International 356,128   348,941   2.1 % 1,064,232   1,049,654   1.4 %
Consolidated revenue excluding movements in foreign exchange $ 678,985   $ 696,277   (2.5 )% $ 2,003,152   $ 2,034,139   (1.5 )%
Direct Operating and SG&A expenses 1 excluding movements in foreign exchange
Americas $ 197,199 $ 208,611 (5.5 )% $ 594,684 $ 617,540 (3.7 )%
International 300,602   296,664   1.3 % 894,492   882,700   1.3 %
Consolidated Direct Operating and SG&A expenses excluding movements in foreign exchange $ 497,801   $ 505,275   (1.5 )% $ 1,489,176   $ 1,500,240   (0.7 )%
OIBDAN
Americas $ 125,508 $ 138,725 (9.5 )% $ 342,359 $ 366,945 (6.7 )%
International 55,299 52,277 5.8 % 169,192 166,954 1.3 %
Corporate (25,361 ) (26,031 ) (2.6 )% (77,809 ) (81,209 ) (4.2 )%
Consolidated OIBDAN $ 155,446   $ 164,971   (5.8 )% $ 433,742   $ 452,690   (4.2 )%

OIBDAN excluding movements in foreign exchange
Americas $ 125,658 $ 138,725 (9.4 )% $ 344,236 $ 366,945 (6.2 )%
International 55,526 52,277 6.2 % 169,740 166,954 1.7 %
Corporate (26,833 ) (26,031 ) 3.1 % (80,182 ) (81,209 ) (1.3 )%

Consolidated OIBDAN excluding movements in foreign exchange
$ 154,351   $ 164,971   (6.4 )% $ 433,794   $ 452,690   (4.2 )%
Revenue excluding effects of foreign exchange and revenue from non-strategic markets sold
Americas $ 322,857 $ 319,447 1.1 % $ 936,450 $ 907,194 3.2 %
International $ 356,128 $ 344,010 3.5 % $ 1,053,661 $ 1,031,143 2.2 %
Consolidated revenue, excluding effects of foreign exchange and revenue from non-strategic markets sold $ 678,985 $ 663,457 2.3 % $ 1,990,111 $ 1,938,337 2.7 %
OIBDAN excluding effects of foreign exchange and revenue from non-strategic markets sold
Americas $ 125,658 $ 125,322 0.3 % $ 343,536 $ 332,571 3.3 %
International $ 55,526 $ 52,601 5.6 % $ 169,603 $ 164,934 2.8 %
Consolidated OIBDAN, excluding effects of foreign exchange and revenue from non-strategic markets sold $ 154,351 $ 151,892 1.6 % $ 432,957 $ 416,296 4.0 %
 

Certain prior period amounts have been reclassified to conform to the 2016 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 segment and consolidated operating income (loss); (ii) revenues excluding effects of foreign exchange rates to revenues; (iii) direct operating and SG&A expenses excluding effects of foreign exchange rates to direct operating and SG&A expenses; (iv) corporate expenses excluding non-cash compensation expenses to corporate expenses; (v) Consolidated and segment revenues excluding the effects of foreign exchange rates and non-strategic markets sold to Consolidated and segment revenues; (vi) Consolidated and segment direct operating and SG&A expenses excluding the effects of foreign exchange rates and non-strategic markets sold to Consolidated and segment direct operating and SG&A expenses; and (vii) Consolidated and segment OIBDAN excluding the effects of foreign exchange rates and non-strategic markets sold to Consolidated and segment operating income. See also the definition of OIBDAN under the Supplemental Disclosure section in this release.
 

Third Quarter 2016 Results

Consolidated

Consolidated revenue decreased $23.2 million, or 3.3%, during the third quarter of 2016 as compared to the third quarter of 2015. Consolidated revenue increased $15.5 million, or 2.3%, after adjusting for a $5.9 million impact from movements in foreign exchange rates and the $32.8 million impact of the non-strategic markets sold in 2016.

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