Exhibit 99.1
Clear Channel Outdoor Reports First Quarter 2006 Results
SAN ANTONIO--(BUSINESS WIRE)--May 3, 2006--Clear Channel Outdoor
Holdings Inc. (NYSE:CCO) today reported results for its first quarter
ended March 31, 2006.
The Company reported revenues of $598.4 million in the first
quarter of 2006, a 3% increase over the $579.0 million reported for
the first quarter of 2005. Included in the Company's revenue is a
$28.5 million decline due to movements in foreign exchange; strictly
excluding the effects of these movements in foreign exchange, revenue
growth would have been 8%. See reconciliation of revenue excluding
effects of foreign exchange to revenue. Clear Channel Outdoor's
expenses increased 1% to $459.4 million during the first quarter of
2006 compared to 2005. Included in the Company's expenses is
approximately $1.5 million of non-cash compensation and a $26.5
million decline due to movements in foreign exchange.
Clear Channel Outdoor's income and diluted earnings per share were
$8.1 million and $0.02, respectively, during the first quarter of
2006. This compares to a net loss of $5.9 million or $0.02 loss per
diluted share in the first quarter of 2005.
The Company's first quarter 2006 net income included approximately
$17.1 million of pre-tax gains, $0.03 per diluted share after-tax, on
the swap of certain assets. Excluding these gains, Clear Channel
Outdoor's first quarter 2006 net income would have been a net loss of
$1.5 million or $0.01 loss per diluted share. See reconciliation of
net income and diluted earnings per share at the end of this press
release.
The Company's OIBDAN (defined as Operating Income before
Depreciation & amortization, Non-cash compensation expense and Gain on
disposition of assets -- net) was $125.9 million in the first quarter
of 2006, a 14% increase from the first quarter of 2005. Strictly
excluding the effects of foreign exchange movements, the Company's
first quarter 2006 OIBDAN would have increased 16% as compared to the
first quarter of 2005. See reconciliation of OIBDAN to net income at
the end of this press release.
"Our first quarter results highlight the extraordinary strength of
our business model," said Mark P. Mays, Chief Executive Officer.
"Solid revenue growth across our operations, combined with a
disciplined approach to costs, lead to a significant increase in our
operating income. Even as we invest in further strengthening the value
proposition of our platform through digital technologies, we continue
to deliver consistent improvement in our profitability. Going forward,
we remain focused on maximizing our global footprint to capitalize on
the exciting array of growth opportunities in front of us."
"Our first quarter top-line and OIBDAN growth over the first
quarter of 2005 are testaments to the inherent strength of our medium
and, more importantly, to the success of our continued efforts to
build sales intensity, enhance customer service and drive operating
efficiencies," added Paul J. Meyer, Global President and Chief
Operating Officer.
Revenue and Direct Operating and SG&A Expenses by Division
(In thousands) Three Months Ended
March 31, % Change
--------------------- ---------
2006 2005
---------- ----------
Revenue
- -------
Americas $274,102 $253,850 8%
International Outdoor 324,267 325,109 0%
---------- ----------
Consolidated revenue $598,369 $578,959 3%
========== ==========
Direct Operating and SG&A Expenses
by Division
- ----------------------------------
Americas $168,205 $161,752
Less: Non-cash compensation expense (1,157) (156)
---------- ----------
167,048 161,596 3%
International Outdoor 291,226 293,899
Less: Non-cash compensation expense (323) --
---------- ----------
290,903 293,899 (1%)
Plus: Non-cash compensation expense 1,480 156
---------- ----------
Consolidated direct operating
and SG&A expenses $459,431 $455,651 1%
========== ==========
The Company's 2006 revenue and direct operating and SG&A expenses
declined approximately $28.5 million and $26.3 million, respectively,
from foreign exchange movements during the first quarter of 2006 as
compared to the same period of 2005.
OIBDAN
- ------
Americas $107,054 $92,254 16%
International Outdoor 33,364 31,210 7%
Corporate (14,563) (12,975)
---------- ----------
Consolidated OIBDAN $125,855 $110,489 14%
========== ==========
See reconciliation of OIBDAN to net income at the end of this press
release.
Americas
The Company's Americas revenue increased 8% during the first
quarter of 2006 as compared to the first quarter of 2005 primarily
attributable to growth in average rates across most of the Company's
inventory. Local revenues performed better than national revenues
during the quarter across the majority of the Company's markets.
Strong market revenue growth during the quarter included Los Angeles,
San Francisco, Orlando, San Antonio and Cleveland. The Company's Latin
American markets also had a very strong first quarter. Strong
advertising client categories included entertainment and amusements,
business and consumer services, insurance and real estate.
Direct operating and SG&A expenses increased 4% in the first
quarter of 2006 over the first quarter of 2005 primarily from an
increase in bonus and commission expenses of $2.9 million related to
the increase in revenue, and non-cash compensation expense of $1.2
million recognized in 2006 related to the adoption of FAS 123R. The
Company's direct production expenses were essentially unchanged during
the first quarter of 2006 compared to the first quarter of 2005
primarily from lower production expenses on its Spectacolor displays.
International Outdoor
Revenues from the Company's international outdoor operations
decreased $0.8 million in the first quarter of 2006 as compared to the
first quarter of 2005 primarily from movements in foreign exchange.
The Company's revenue growth would have been 9%, strictly excluding
the effects of foreign exchange. The growth in revenues was
attributable to growth in both street furniture and billboard sales
and Clear Media Limited (a Chinese outdoor company), which the Company
began consolidating in the third quarter of 2005. Strong markets for
the first quarter of 2006 as compared to the first quarter of 2005
included France, Italy and Australia.
Direct operating and SG&A expenses decreased 1% over the first
quarter of 2005. Strictly excluding the effects of foreign exchange,
the Company's expenses would have increased 8% primarily from the
consolidation of Clear Media and site lease expenses including an
increased rental from the renewal of a street furniture contract in
the United Kingdom. Also included in the increase is $0.3 million in
non-cash compensation expense related to the adoption of FAS 123R.
FAS No. 123R: Share Based Payment ("FAS 123R")
The Company adopted FAS 123R on January 1, 2006 under the
modified-prospective approach which requires it to recognize non-cash
compensation cost in the 2006 financial statements for all options
granted after the date of adoption as well as for any options that
were granted prior to adoption but not vested. Under the
modified-prospective approach, no stock option expense is reflected in
the financial statements for 2005 attributable to these options.
Non-cash compensation expense recognized in the financial statements
during 2005 relates to restricted stock awards. The following table
details non-cash compensation expense for the first quarter of 2006
and 2005, respectively, assuming the Company expensed options during
2005:
(In millions) Three Months Ended March 31,
------------------------------
2006 2005(a) 2005(b)
---------- --------- ---------
Direct operating expense $1.1 $0.2 $1.0
SG&A 0.4 -- 0.4
Corporate -- -- --
---------- --------- ---------
Total non-cash compensation $1.5 $0.2 $1.4
========== ========= =========
(a) Actual non-cash compensation expense recognized in the 2005
financial statements.
(b) Assumes the Company expensed options during 2005.
Conference Call
The Company will host a teleconference to discuss results today
beginning at 9:00 a.m. Eastern Time (in conjunction with the Clear
Channel Communications conference call). The conference call number is
866-719-0110 and the pass code is 8302224. The same conference call
number and pass code is being used for the Clear Channel
Communications teleconference as well. Please call 10 minutes in
advance to ensure that you are connected prior to the presentation.
The teleconference will also be available via a live audio cast on the
Clear Channel website, located at www.clearchannel.com. A replay of
the call will be available for 72 hours after the live conference
call, beginning at 12:00 p.m. Eastern Time. The replay number is
888-203-1112 and the pass code is 8302224. The audio cast will also be
archived on the website and will be available beginning 24 hours after
the call for a period of 30 days.
TABLE 1 -- Financial Highlights of Clear Channel Outdoor Holdings Inc.
and Subsidiaries -- Unaudited
Three Months Ended
(In thousands, except per share data) March 31,
---------------------
2006 2005 % Change
---------- ---------- ---------
Revenue $598,369 $578,959 3%
Direct operating expenses (includes
non-cash compensation expenses of
$1,066 and $156 in 2006 and 2005,
respectively) 328,626 326,054
Selling, general and administrative
expenses (includes non-cash
compensation expenses of $414 and
none in 2006 and 2005, respectively) 130,805 129,597
Corporate expenses (includes non-cash
compensation expenses of $22 and none
in 2006 and 2005, respectively) 14,585 12,975
Depreciation and amortization 96,320 98,266
Gain on disposition of assets -- net 22,756 1,581
---------- ----------
Operating Income 50,789 13,648 272%
Interest expense 40,054 39,658
Equity in earnings of nonconsolidated
affiliates 1,378 345
Other income (expense) -- net (434) (2,842)
---------- ----------
Income (loss) before income taxes and
minority interest 11,679 (28,507)
Income tax benefit (expense):
Current 18,475 14,511
Deferred (23,614) 9,054
---------- ----------
Income tax benefit (expense) (5,139) 23,565
Minority interest income (expense),
net of tax 1,593 (950)
---------- ----------
Net income (loss) $8,133 $(5,892)
========== ==========
Diluted net earnings (loss)
per share(a) $.02 $(.02)
========== ==========
Weighted average shares outstanding
-- Diluted(a) 350,001 350,000
(a) Diluted per share amount for 2005 is calculated on a pro forma
basis assuming the initial public offering of 10% of the Company's
stock occurred on January 1, 2005. Diluted net loss per share for
the three months ended March 31, 2005, based on actual weighted
average shares outstanding of 315,000, was $0.02 per diluted
share.
TABLE 2 -- Selected Balance Sheet Information
Selected balance sheet information was:
(In millions) March 31, 2006 December 31, 2005
-------------- -----------------
(Unaudited) Audited
Cash $87.3 $108.6
Due from Clear Channel Communications $35.7 $0.1
Total Current Assets $1,065.2 $1,050.2
Net Property, Plant and Equipment $2,140.8 $2,153.4
Total Assets $4,925.2 $4,918.3
Current Liabilities (excluding
current portion of long-term debt) $627.1 $653.0
Long-Term Debt (including current
portion of long-term debt) $228.2 $227.8
Debt with Clear Channel
Communications $2,500.0 $2,500.0
Shareholders' Equity $1,241.6 $1,209.4
TABLE 3 -- Capital Expenditures -- Unaudited
Capital expenditures for the first quarter of 2006 and 2005 were:
(In millions) March 31, 2006 March 31, 2005
-------------- --------------
Non-revenue producing $18.7 $14.6
Revenue producing 25.0 20.5
-------------- --------------
Total capital expenditures $43.7 $35.1
============== ==============
The Company defines non-revenue producing capital expenditures as
those expenditures that are required on a recurring basis. Revenue
producing capital expenditures are discretionary capital investments
for new revenue streams, similar to an acquisition.
TABLE 4 -- Long-Term Debt -- Unaudited
At March 31, 2006, Clear Channel Outdoor had long-term debt of:
(In millions) March 31, 2006
--------------
Bank Credit Facility $15.4
Debt with Clear Channel 2,500.0
Other Debt 212.8
--------------
Total $2,728.2
Cash 87.3
Due from Clear Channel Communications 35.7
--------------
Net Debt $2,605.2
==============
Liquidity and Financial Position
For the quarter ended March 31, 2006, cash flow from operating
activities was $80.1 million, cash flow used by investing activities
was $65.2 million, cash flow used in financing activities was $35.1
million, and the effect of exchange rate changes on cash was $1.2
million for a net decrease in cash of $21.4 million.
Leverage, defined as total debt, net of cash and the receivable
from Clear Channel Communications, divided by the trailing 12-month
OIBDAN, was 3.5x at March 31, 2006.
Supplemental Disclosure Regarding Non-GAAP Financial Information
Operating Income before Depreciation and Amortization (D&A),
Non-cash Compensation Expense and Gain on Disposition of Assets -- Net
(OIBDAN)
The following tables set forth Clear Channel Outdoor's OIBDAN for
the three months ended March 31, 2006 and 2005. The Company defines
OIBDAN as net income adjusted to exclude non-cash compensation expense
and the following line items presented in its Statement of Operations:
Minority interest, net of tax, Income tax benefit (expense); Other
income (expense) -- net; Equity in earnings of nonconsolidated
affiliates; Interest expense; Gain on disposition of assets -- net;
and, D&A.
The Company uses OIBDAN, among other things, to evaluate the
Company's operating performance. This measure is among the primary
measures used by management for planning and forecasting of future
periods, as well as for measuring performance for compensation of
executives and other members of management. This measure is an
important indicator of the Company's operational strength and
performance of its business because it provides a link between
profitability and cash flows from operating activities. 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. 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, stock option structures or tax rates. In addition, 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,
net 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 and net income (loss), the most directly
comparable GAAP financial measures, users of this financial
information should consider the types of events and transactions,
which are excluded.
In addition, because a significant portion of the Company's
advertising operations are conducted in foreign markets, principally
France and the United Kingdom, management reviews the operating
results from its foreign operations on a constant dollar basis. A
constant dollar basis (i.e. a foreign currency adjustment is made to
the 2006 actual foreign revenues and expenses at average 2005 foreign
exchange rates) allows for comparison of operations independent of
foreign exchange movements.
As required by the SEC, the Company provides reconciliations below
of (i) OIBDAN for each segment to consolidated operating income; (ii)
Revenue excluding foreign exchange effects to Revenue; (iii) Expense
excluding foreign exchange effects to Expense; (iv) OIBDAN to net
income, the most directly comparable amounts reported under GAAP; and
(v) Net Income and Diluted Earnings Per Share excluding certain items
discussed earlier.
Gain on
Operating Non-cash disposition
(In income compensation of assets --
thousands) (loss) expense D&A net OIBDAN
--------- ------------- -------- ------------- ---------
Three Months
Ended March
31, 2006
- -------------
Americas $63,665 $1,157 $42,232 $-- $107,054
Intl Outdoor (21,047) 323 54,088 -- 33,364
Corporate (14,585) 22 -- -- (14,563)
Gain on
disposition
of assets --
net 22,756 -- -- (22,756) --
--------- ------------- -------- ------------- ---------
Consolidated $50,789 $1,502 $96,320 $(22,756) $125,855
========= ============= ======== ============= =========
Three Months
Ended March
31, 2005
- -------------
Americas $48,995 $156 $43,103 $-- $92,254
Intl Outdoor (23,953) -- 55,163 -- 31,210
Corporate (12,975) -- -- -- (12,975)
Gain on
disposition
of assets --
net 1,581 -- -- (1,581) --
--------- ------------- -------- ------------- ---------
Consolidated $13,648 $156 $98,266 $(1,581) $110,489
========= ============= ======== ============= =========
Reconciliation of Revenue excluding Foreign Exchange Effects to
Revenue
March 31, March 31,
(In thousands) 2006 2005
---------- ----------
Revenue $598,369 $578,959 3%
Add: Foreign exchange decline 28,525 --
---------- ----------
Revenue excluding effects of foreign
exchange $626,894 $578,959 8%
========== ==========
International Outdoor Revenue $324,267 $325,109 0%
Add: Foreign exchange decline 29,537 --
---------- ----------
International Outdoor Revenue
excluding effects of foreign exchange $353,804 $325,109 9%
========== ==========
Reconciliation of Expense excluding Foreign Exchange Effects to
Expense
March 31, March 31,
(In thousands) 2006 2005
---------- ----------
International Outdoor Expense $291,226 $293,899 (1%)
Add: Foreign exchange decline 27,062 --
---------- ----------
International Outdoor Expense
excluding effects of foreign
exchange $318,288 $293,899 8%
========== ==========
OIBDAN excluding Foreign Exchange Effects to OIBDAN
March 31, March 31,
(In thousands) 2006 2005
---------- ----------
OIBDAN $125,855 $110,489 14%
Add: Foreign exchange decline 2,247 --
---------- ----------
OIBDAN excluding effects of foreign
exchange $128,102 $110,489 16%
========== ==========
Reconciliation of OIBDAN to Net income
Three Months Ended
(In thousands) March 31,
---------------------
2006 2005
---------- ----------
OIBDAN $125,855 $110,489
Non-cash compensation expense 1,502 156
Depreciation & amortization 96,320 98,266
Gain on disposition of assets -- net 22,756 1,581
---------- ----------
Operating Income 50,789 13,648
Interest expense 40,054 39,658
Equity in earnings of nonconsolidated affiliates 1,378 345
Other income (expense) -- net (434) (2,842)
---------- ----------
Income (loss) before income taxes and minority
interest 11,679 (28,507)
Income tax benefit (expense):
Current 18,475 14,511
Deferred (23,614) 9,054
---------- ----------
Income tax benefit (expense) (5,139) 23,565
Minority interest (income) expense 1,593 (950)
---------- ----------
Net income (loss) $8,133 $(5,892)
========== ==========
Reconciliation of Net Income and Diluted Earnings per Share ("EPS")
(In millions, except per share Three Months Ended Three Months Ended
data) March 31, 2006 March 31, 2005
------------------ ------------------
Net Income EPS Net Income EPS
---------- ------- ---------- -------
Reported Amounts $8.1 $.02 $(5.9) $(.02)
Less: Gain on disposition
of asset (17.1) (.05) -- --
Current and deferred tax effects 7.5 .02 -- --
---------- ------- ---------- -------
Amounts excluding certain items $(1.5) $(.01) $(5.9) $(.02)
========== ======= ========== =======
About Clear Channel Outdoor Holdings
Clear Channel Outdoor, headquartered in San Antonio, Texas, is a
global leader in the outdoor advertising industry providing clients
with advertising opportunities through billboards, street furniture
displays, transit displays, and other out-of-home advertising displays
Certain statements in this document 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
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" and "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 are forward-looking statements.
Various risks that could cause future results to differ from those
expressed by the forward-looking statements included in this document
include, but are not limited to: changes in business, political and
economic conditions in the U.S. and in other countries in which Clear
Channel Outdoor currently does business (both general and relative to
the advertising industry); fluctuations in interest rates; changes in
operating performance; shifts in population and other demographics;
changes in the level of competition for advertising dollars;
fluctuations in operating costs; technological changes and
innovations; changes in labor conditions; changes in governmental
regulations and policies and actions of regulatory bodies;
fluctuations in exchange rates and currency values; changes in tax
rates; and changes in capital expenditure requirements and access to
capital markets. Other unknown or unpredictable factors also could
have material adverse effects on Clear Channel Outdoor's future
results, performance or achievements. In light of these risks,
uncertainties, assumptions and factors, the forward-looking events
discussed in this document 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 document. Other key risks are described in Clear Channel
Outdoor's reports and other documents filed with the U.S. Securities
and Exchange Commission, including in the section entitled "Item 1A.
Risk Factors" of the Company's Annual Report filed on Form 10-K for
the year ended December 31, 2005. Except as otherwise stated in this
document, Clear Channel Outdoor does not undertake any obligation to
publicly update or revise any forward-looking statements because of
new information, future events or otherwise.
CONTACT: Clear Channel Outdoor Holdings Inc., San Antonio
Investors:
Randy Palmer, 210-832-3315
or
Media:
Lisa Dollinger, 210-832-3474
www.clearchanneloutdoor.com