Exhibit 99.1
Clear Channel Outdoor Reports Second Quarter 2007 Results
Advertising Writers/Business Editors
SAN ANTONIO--(BUSINESS WIRE)--July 27, 2007--Clear Channel Outdoor
Holdings, Inc. (NYSE:CCO) today reported results for its second
quarter ended June 30, 2007.
The Company reported revenues of $836.7 million in the second
quarter of 2007, a 12% increase over the $748.4 million reported for
the second quarter of 2006. Included in the Company's revenue is a
$29.0 million increase due to movements in foreign exchange; 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 at the end of this press release.
Clear Channel Outdoor's operating expenses increased 14% to $563.7
million during the second quarter of 2007 compared to 2006. Included
in the Company's 2007 expenses is a $24.3 million increase due to
movements in foreign exchange; excluding the effects of these
movements in foreign exchange, growth in expenses would have been 9%.
See reconciliation of expenses excluding effects of foreign exchange
to expenses at the end of this press release.
Clear Channel Outdoor's net income and diluted earnings per share
were $68.6 million and $0.19, respectively, during the second quarter
of 2007. This compares to net income of $48.0 million or $0.14 per
diluted share in the second quarter of 2006.
The Company's OIBDAN was $262.9 million in the second quarter of
2007, a 9% increase from the second quarter of 2006. 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 (loss) on
disposition of assets - net; and, D&A. See reconciliation of OIBDAN to
net income at the end of this press release.
"During the second quarter, we continued to demonstrate strong
trends across the majority of our outdoor assets," commented Mark
Mays, Chief Executive Officer of Clear Channel Outdoor. "Led by the
best team in the industry, we continue to improve the value
proposition of our global outdoor asset base, which is fueling our
ability to attract new advertisers and drive revenues."
Paul J. Meyer, Global President and Chief Operating Officer,
commented, "We are pleased to report yet another quarter of strong
revenue and OIBDAN growth. As we enter the second half of 2007 we are
clearly seeing the benefits from the investments we have made in our
technology, operations and management."
Revenue, Direct Operating and SG&A Expenses, and OIBDAN by Division
- ----------------------------------------------------------------------
(In thousands) Three Months Ended %
June 30, Change
------------------
2007 2006
------------------
Revenue
- --------------------------------------------
Americas $376,843 $335,247 12%
International 459,870 413,156 11%
------------------
Consolidated revenue $836,713 $748,403 12%
==================
Direct Operating and SG&A Expenses by Division
- --------------------------------------------------------------
Americas $201,010 $179,545
Less: Non-cash compensation expense (2,466) (1,230)
------------------
198,544 178,315 11%
International 362,690 314,213
Less: Non-cash compensation expense (529) (343)
------------------
362,161 313,870 15%
Plus: Non-cash compensation expense 2,995 1,573
------------------
Consolidated direct operating and SG&A
expenses $563,700 $493,758 14%
==================
The Company's 2007 revenue and direct operating and SG&A expenses
increased approximately $29.0 million and $24.3 million,
respectively, from foreign exchange movements during the second
quarter of 2007 as compared to the same period of 2006.
OIBDAN
- --------------------------------------------
Americas $178,299 $156,932 14%
International 97,709 99,286 (2%)
Corporate (13,103) (14,097)
------- -------
Consolidated OIBDAN $262,905 $242,121 9%
======= =======
See reconciliation of OIBDAN to net income at the end of this
press release.
Americas
Americas revenue increased $41.6 million, or 12%, during the
second quarter of 2007 as compared to 2006. Interspace Airport
Advertising, which the Company acquired in July 2006, contributed
approximately $15.1 million to the increase. The Company experienced
rate increases across its inventory. The growth was led by bulletin
revenues due to the increased rates while occupancy was essentially
flat in 2007 compared to 2006. Revenue growth occurred across many of
the Company's markets, including Boston, Washington, Philadelphia and
Seattle. Advertising categories that contributed to the strong growth
were automotive, telecommunications and retail.
Operating expenses increased $21.5 million in the second quarter
of 2007 as compared to 2006 with Interspace contributing approximately
$10.6 million to the increase. The remainder of the increase is
primarily attributable to sales and site lease expenses associated
with the increase in revenue.
International
International revenue increased $46.7 million, or 11%, in the
second quarter of 2007 as compared to 2006. Included in the increase
was approximately $28.1 million related to movements in foreign
exchange; excluding the effects of these movements in foreign
exchange, growth would have been 5%. Growth was led by street
furniture revenues. The increase in street furniture revenues was
primarily attributable to increased yield. On a constant dollar basis,
revenue from the Company's operations in France decreased in the
second quarter of 2007 over 2006 primarily from a decline in national
advertising during the French Presidential elections and due to some
retailers shifting to television advertising from outdoor. Revenue was
essentially unchanged in the United Kingdom. Markets contributing to
the revenue growth were Italy, Spain and Ireland.
Operating expenses increased $48.5 million during the second
quarter of 2007 as compared to 2006. Included in the increase was
approximately $23.5 million related to movements in foreign exchange.
Excluding the effects of these movements in foreign exchange, growth
would have been 8%. During the second quarter of 2007, the Company
experienced higher expenses on political advertising campaigns in
France, the renewal of several street furniture contracts and certain
severance costs. The remainder of the increase in expenses is due to
an increase in site lease expenses associated with the increase in
revenue.
Digital Conversion
The Company has installed 53 digital displays in twelve markets
during the first six months of 2007 and currently plans to deploy a
total of over 100 digital displays in approximately 20 markets in
2007.
FAS No. 123R: Share-Based Payment ("FAS 123R")
The following table details non-cash compensation expense, which
represents employee compensation costs related to stock option grants
and restricted stock awards, for the second quarter of 2007 and 2006:
(In thousands) Three Months
Ended
June 30,
---------------
2007 2006
---------------
Direct operating expense $ 2,161 $1,132
SG&A 834 441
Corporate 168 23
---------------
Total share-based payments $ 3,163 $1,596
===============
The Company will not be holding a Conference Call or Webcast
As a result of the Clear Channel Communications, Inc. proposed
merger transaction that was announced on November 16, 2006 and amended
on April 18, 2007 and May 17, 2007, the Company will not be hosting a
teleconference or webcast to discuss results.
Third Quarter and 2007 Outlook
Due to the proposed merger transaction of Clear Channel
Communications, Inc. and the Company not hosting a teleconference to
discuss financial and operating results, the Company is providing the
following information regarding its current information related to
2007 operating results.
Pacing information presented below reflects revenues booked at a
specific date versus the comparable date in the prior period and may
or may not reflect the actual revenue growth at the end of the period.
The Company's revenue pacing information includes an adjustment to
prior periods to include all acquisitions and exclude all divestitures
in both periods presented for comparative purposes. All pacing metrics
exclude the effects of foreign exchange movements. Except as expressly
identified, the Company's operating expense forecasts are on a
reportable basis excluding non-cash compensation expense, i.e. there
is not an adjustment for acquisitions, divestitures or the effects of
foreign exchange movements.
As of July 26, 2007, the Company's revenues are pacing up 10.6%
with Americas below and the International above the 10.6% pacing for
the third quarter 2007 as compared to the third quarter of 2006. For
the full year 2007 versus the full year 2006, the Company's revenues
are pacing up 7.2% with both the Americas and International pacing at
approximately that level. As of the last week in July, the Company has
historically experienced revenues booked of approximately 80% of the
actual revenues recorded for the third quarter and approximately 80%
of the actual revenues recorded for the full year.
For the full year 2007 as compared to the full year 2006, current
Company forecasts show low double-digit growth in total operating
expenses for the Company. Excluding the effects of movements in
foreign exchange, which management currently forecasts at an $85 to
$90 million increase for the full year 2007 and excluding Interspace's
(acquired by the Company on July 1, 2006) operating expenses of $20.2
million for the first six months of 2007, operating expense growth is
currently forecasted to be in the mid single-digits for 2007 as
compared to 2006.
For the consolidated company, current management forecasts show
corporate expenses of $60 million to $65 million for the full year
2007. Non-cash compensation expense (i.e. FAS No. 123R: share-based
payments) are currently projected to be in the range of $8 million to
$10 million for the full year of 2007, excluding any compensation
expense associated with future option or share grants that may or may
not occur in 2007.
The Company currently forecasts overall capital expenditures for
2007 of $225 million to $250 million, excluding any capital
expenditures associated with new contract wins the Company may have
during 2007.
Income tax expense as a percent of "Income before income taxes and
minority interest" is currently projected to be approximately 41%.
Current income tax expense as a percent of "Income before income taxes
and minority interest" is currently expected to be 30% to 35%. These
percentages do not include the effects of any resolution of
governmental examinations.
TABLE 1 - Financial Highlights of Clear Channel Outdoor Holdings, Inc.
and Subsidiaries - Unaudited
- ----------------------------------------------------------------------
Three Months Ended
(In thousands, except per share data) June 30, %
------------------
2007 2006 Change
-------- ---------------
Revenue $836,713 $748,403 12%
Direct operating expenses 429,143 374,159
Selling, general and administrative expenses 134,557 119,599
Corporate expenses 13,271 14,120
Depreciation and amortization 98,153 100,827
Gain (loss) on disposition of assets - net 1,204 (315)
-------- ---------
Operating Income 162,793 139,383 17%
Interest expense 39,939 41,692
Equity in earnings of nonconsolidated
affiliates 2,820 2,421
Other income - net 1,040 1,634
-------- ---------
Income before income taxes and minority
interest 126,714 101,746
Income tax expense:
Current 44,069 32,677
Deferred 6,830 12,091
-------- ---------
Income tax expense 50,899 44,768
Minority interest expense, net of tax 7,218 8,931
-------- ---------
Net income $ 68,597 $ 48,047 43%
======== =========
Diluted net earnings per share $ .19 $ .14
======== =========
Weighted average shares outstanding - Diluted 355,951 350,003
TABLE 2 - Selected Balance Sheet Information - Unaudited
- ----------------------------------------------------------------------
Selected balance sheet information for 2007 and 2006 was:
(In millions) June 30, December 31,
2007 2006
-------- ------------
Cash $ 94.7 $ 105.4
Due from Clear Channel Communications $ 74.5 $ --
Total Current Assets $1,293.4 $1,189.9
Net Property, Plant and Equipment $2,175.0 $2,191.8
Total Assets $5,537.8 $5,421.9
Due to Clear Channel Communications $ -- $ 4.2
Current Liabilities (excluding current portion of
long-term debt) $ 719.0 $ 755.2
Long-Term Debt (including current portion of
long-term debt) $ 157.2 $ 184.2
Debt with Clear Channel Communications $2,500.0 $2,500.0
Shareholders' Equity $1,739.9 $1,586.4
TABLE 3 - Capital Expenditures - Unaudited
- ----------------------------------------------------------------------
Capital expenditures for the six months ended June 30, 2007 and 2006
were:
(In millions) June 30, June 30,
2007 2006
--------- ---------
Non-revenue producing $ 36.8 $ 37.6
Revenue producing 75.3 67.7
--------- ---------
Total capital expenditures $112.1 $105.3
========= =========
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 - Total Debt - Unaudited
- ------------------------------------------------------------------
At June 30, 2007, Clear Channel Outdoor had total debt of:
(In millions) June 30, 2007
---------------------
Bank Credit Facility $ 16.1
Debt with Clear Channel Communications 2,500.0
Other Debt 141.1
---------------------
Total 2,657.2
Cash 94.7
Due from Clear Channel Communications 74.5
---------------------
Net Debt $2,488.0
=====================
Liquidity and Financial Position
For the six months ended June 30, 2007, cash flow from operating
activities was $244.9 million, cash flow used by investing activities
was $149.6 million, cash flow used by financing activities was $103.4
million, and the effect of exchange rate changes on cash was $2.6
million for a net decrease in cash of $10.7 million.
Leverage, defined as total debt adjusting for the due to/due from
Clear Channel Communications, net of cash, divided by the trailing
12-month OIBDAN, was 2.8x at June 30, 2007.
Supplemental Disclosure Regarding Non-GAAP Financial Information
Operating Income before Depreciation and Amortization (D&A),
Non-cash Compensation Expense and Gain (Loss) on Disposition of Assets
- - Net (OIBDAN)
The following tables set forth Clear Channel Outdoor's OIBDAN for
the three months ended June 30, 2007 and 2006. 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 (loss) 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 2007 actual foreign revenues and expenses at average 2006 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 and (iv) OIBDAN to net
income, the most directly comparable amounts reported under GAAP.
Gain (loss)
(In on
thousands) Operating Non-cash Depreciation disposition
income compensation and of assets -
(loss) expense amortization net OIBDAN
---------------------------------------------------------
Three Months Ended
June 30, 2007
- ----------------------
Americas $129,201 $ 2,466$ 46,632$ -- $178,299
International 45,659 529 51,521 -- 97,709
Corporate (13,271) 168 -- -- (13,103)
Gain (loss)
on
disposition
of assets -
net 1,204 -- -- (1,204) --
---------------------------------------------------------
Consolidated$162,793 $ 3,163$ 98,153$(1,204) $262,905
=========================================================
Three Months Ended
June 30, 2006
- ----------------------
Americas $114,449 $ 1,230$ 41,253$ -- $156,932
International 39,369 343 59,574 -- 99,286
Corporate (14,120) 23 -- -- (14,097)
Gain (loss)
on
disposition
of assets -
net (315) -- -- 315 --
---------------------------------------------------------
Consolidated$139,383 $ 1,596$ 100,827$ 315 $242,121
=========================================================
Reconciliation of Revenue excluding Foreign Exchange Effects to
Revenue
(In thousands) Three Months
Ended %
June 30, Change
-----------------
2007 2006
-----------------
Revenue $836,713 $748,403 12%
Less: Foreign exchange increase (29,030) --
-----------------
Revenue excluding effects of foreign exchange $807,683 $748,403 8%
=================
International revenue $459,870 $413,156 11%
Less: Foreign exchange increase (28,087) --
-----------------
International revenue excluding effects of
foreign exchange $431,783 $413,156 5%
=================
Reconciliation of Expense (Direct Operating and SG&A Expenses)
excluding Foreign Exchange Effects to Expense
(In thousands) Three Months
Ended %
June 30, Change
-----------------
2007 2006
-----------------
Expense $563,700 $493,758 14%
Less: Foreign exchange increase (24,316) --
-----------------
Expense excluding effects of foreign exchange $539,384 $493,758 9%
=================
International expense $362,690 $314,213 15%
Less: Foreign exchange increase (23,542) --
-----------------
International expense excluding effects of
foreign exchange $339,148 $314,213 8%
=================
Reconciliation of OIBDAN to Net income
(In thousands) Three Months Ended %
June 30, Change
------------------
2007 2006
-------- ---------
OIBDAN $262,905 $242,121 9%
Non-cash compensation expense 3,163 1,596
Depreciation & amortization 98,153 100,827
Gain (loss) on disposition of assets - net 1,204 (315)
-------- ---------
Operating Income 162,793 139,383 17%
Interest expense 39,939 41,692
Equity in earnings of nonconsolidated
affiliates 2,820 2,421
Other income- net 1,040 1,634
-------- ---------
Income before income taxes and minority
interest 126,714 101,746
Income tax expense:
Current 44,069 32,677
Deferred 6,830 12,091
-------- ---------
Income tax expense 50,899 44,768
Minority interest expense 7,218 8,931
-------- ---------
Net income $ 68,597 $ 48,047
======== =========
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, 2006. 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.
Investors
Senior Vice President of Investor Relations
Randy Palmer, 210-832-3315
or
Media
Chief Communications Officer
Lisa Dollinger, 210-832-3474
www.clearchanneloutdoor.com