Exhibit 99.1
Clear Channel Outdoor Reports Third Quarter 2007 Results
SAN ANTONIO--(BUSINESS WIRE)--Nov. 8, 2007--Clear Channel Outdoor
Holdings, Inc. (NYSE:CCO) today reported results for its third quarter
ended September 30, 2007.
The Company reported revenues of $817.5 million in the third
quarter of 2007, a 14% increase over the $720.3 million reported for
the third quarter of 2006. Included in the Company's revenue is a
$32.4 million increase due to movements in foreign exchange; excluding
the effects of these movements in foreign exchange, revenue growth
would have been 9%. 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 13% to $565.7
million during the third quarter of 2007 compared to 2006. Included in
the Company's 2007 expenses is a $27.0 million increase due to
movements in foreign exchange; excluding the effects of these
movements in foreign exchange, growth in expenses would have been 7%.
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 $54.7 million and $0.15, respectively, during the third quarter
of 2007. This compares to net income of $31.8 million or $0.09 per
diluted share in the third quarter of 2006 or increases of 72% and
67%, respectively.
The Company's OIBDAN was $237.9 million in the third quarter of
2007, a 16% increase from the third 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.
"Our growth in revenue and OIBDAN during the third quarter
demonstrates the extraordinary positioning and health of our outdoor
assets," said Mark Mays, Chief Executive Officer of Clear Channel
Outdoor. "Our growth rates are consistently among the strongest in the
global media industry as we capitalize on our diverse outdoor assets
and presence across a broad range of advertising categories. We remain
committed to investing in our outdoor assets with the goal of
strengthening our ability to engage our audiences and better serve our
growing base of global advertisers."
"As we look toward the balance of this year and 2008, this
quarter's solid growth in local sales in our U.S. markets was
particularly encouraging," commented Paul J. Meyer, Global President
and Chief Operating Officer. "We also were pleased with the strong
performance across our international division, particularly in some of
our larger European markets, such as France and Italy.
Revenue, Direct Operating and SG&A Expenses, and OIBDAN by Division
- ----------------------------------------------------------------------
(In thousands) Three Months Ended %
September 30, Change
-------------------
2007 2006
--------- ---------
Revenue
- ------------------------------------------
Americas $386,353 $356,384 8 %
International 431,188 363,870 19 %
--------- ---------
Consolidated revenue $817,541 $720,254 14 %
========= =========
Direct Operating and SG&A Expenses by
Division
- ------------------------------------------
Americas $203,975 $185,497
Less: Non-cash compensation expense (1,859) (1,173)
--------- ---------
202,116 184,324 10 %
International 361,725 316,760
Less: Non-cash compensation expense (398) (328)
--------- ---------
361,327 316,432 14 %
Plus: Non-cash compensation expense 2,257 1,501
--------- ---------
Consolidated direct operating and SG&A
expenses $565,700 $502,257 13 %
========= =========
The Company's 2007 revenue and direct operating and SG&A expenses
increased approximately $32.4 million and $27.0 million,
respectively, from foreign exchange movements during the third
quarter of 2007 as compared to the same period of 2006.
OIBDAN
- ------------------------------------------
Americas $184,237 $172,060 7 %
International 69,861 47,438 47 %
Corporate (16,197) (15,103)
--------- ---------
Consolidated OIBDAN $237,901 $204,395 16 %
========= =========
See reconciliation of OIBDAN to net income at the end of this
press release.
Americas
Americas revenue increased $30.0 million, or 8%, during the third
quarter of 2007 as compared to the same period of 2006. The revenue
growth occurred across the Company's inventory including bulletins,
posters, street furniture, airports and taxis. The growth was led by
bulletins, which was driven by increased rates and by airport displays
which had both increased rates and occupancy. Leading advertising
categories during the quarter were telecommunications, beverages,
retail, financial services, amusements and real estate. Revenue growth
occurred across the Company's markets, led by Los Angeles, New York,
Washington/Baltimore, Atlanta and Albuquerque.
Expenses increased $18.5 million in the third quarter of 2007 as
compared to 2006 from an $11.6 million increase in site lease expenses
primarily related to new contracts and an increase in airport, transit
and taxi revenue. Commission and selling related expenses also
increased primarily associated with the increase in revenue.
International
International revenue increased $67.3 million, or 19%, in the
third quarter of 2007 as compared to 2006. Included in the increase
was approximately $30.7 million related to movements in foreign
exchange. The Company's revenue growth occurred across inventory
categories including billboards, street furniture and transit. The
growth was driven by both increased rates and occupancy. The revenue
growth was led by increased revenues in France, Italy, Australia,
China and Ireland.
Expenses increased $45.0 million during the third quarter of 2007
as compared to 2006. Included in the increase was approximately $25.7
million related to movements in foreign exchange. The remaining
increase in operating expenses is primarily attributable to an
increase in site lease and selling related expenses associated with
the increase in revenue.
Digital Conversion
The Company is on track to have digital networks deployed in
approximately 20 U.S. markets by the end of 2007 and has installed 80
digital displays in 16 markets during the first nine months of 2007,
putting it ahead of schedule to deploy a total of over 100 digital
displays during the course of this calendar year.
FAS No. 123 (R): Share-Based Payment ("FAS 123(R)")
The following table details non-cash compensation expense, which
represents employee compensation costs related to stock option grants
and restricted stock awards, for the third quarter of 2007 and 2006:
(In thousands) Three Months Ended
September 30,
------------------
2007 2006
----------- ------
Direct operating expense $1,629 $1,081
SG&A 628 420
Corporate 125 22
----------- ------
Total share-based payments $2,382 $1,523
=========== ======
The Company will not be holding a Conference Call or Webcast
As a result of the Clear Channel Communications, Inc. pending
merger transaction that was approved by Clear Channel Communications,
Inc. shareholders on September 25, 2007, the Company will not be
hosting a teleconference or webcast to discuss results. The pending
merger is still subject to various regulatory approvals and closing
conditions.
Fourth Quarter and 2007 Outlook
Due to the pending 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 November 2, 2007, the Company's revenues are pacing up 7.7%
with Americas slightly below and International slightly above the 7.7%
pacing for the fourth quarter 2007 as compared to the fourth quarter
of 2006. As of the first week of November, the Company has
historically experienced revenues booked of approximately 85% of the
actual revenues recorded for the fourth quarter.
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 $100 to
$110 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 7% to 8% range 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. 123 (R): 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 40%.
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) September 30, %
-------------------
2007 2006 Change
--------- --------- ------
Revenue $817,541 $720,254 14 %
Direct operating expenses 434,472 383,833
Selling, general and administrative
expenses 131,228 118,424
Corporate expenses 16,322 15,125
Depreciation and amortization 99,793 102,123
Gain (loss) on disposition of assets - net 414 (834)
--------- ---------
Operating Income 136,140 99,915 36 %
Interest expense 40,178 43,599
Equity in earnings (loss) of
nonconsolidated affiliates (836) 1,823
Other income - net 2,815 467
--------- ---------
Income before income taxes and minority
interest 97,941 58,606
Income tax expense:
Current 31,663 14,376
Deferred 5,784 12,270
--------- ---------
Income tax expense 37,447 26,646
Minority interest expense, net of tax 5,778 127
--------- ---------
Net income $ 54,716 $ 31,833 72 %
========= =========
Diluted net earnings per share $ .15 $ .09
========= =========
Weighted average shares outstanding -
Diluted 355,802 354,255
TABLE 2 - Selected Balance Sheet Information - Unaudited
- ----------------------------------------------------------------------
Selected balance sheet information for
2007 and 2006 was:
(In millions) September 30, December 31,
2007 2006
------------- ------------
Cash $ 114.1 $ 105.4
Due from Clear Channel Communications $ 134.2 $ --
Total Current Assets $1,441.6 $1,189.9
Net Property, Plant and Equipment $2,190.2 $2,191.8
Total Assets $5,698.1 $5,421.9
Due to Clear Channel Communications $ -- $ 4.2
Current Liabilities (excluding current
portion of long-term debt) $ 794.6 $ 755.2
Long-Term Debt (including current portion
of long-term debt) $ 125.6 $ 184.2
Debt with Clear Channel Communications $2,500.0 $2,500.0
Shareholders' Equity $1,849.9 $1,586.4
TABLE 3 - Capital Expenditures - Unaudited
- ----------------------------------------------------------------------
Capital expenditures for the nine months ended September 30, 2007 and
2006 were:
(In millions) September 30, September 30,
2007 2006
------------- -------------
Non-revenue producing $ 53.7 $ 58.3
Revenue producing 111.5 105.7
------------- -------------
Total capital expenditures $165.2 $164.0
============= =============
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 September 30, 2007, Clear Channel Outdoor had total debt of:
(In millions) September 30,
2007
-------------
Bank Credit Facility $ --
Debt with Clear Channel Communications 2,500.0
Other Debt 125.6
-------------
Total 2,625.6
Cash 114.1
Due from Clear Channel Communications 134.2
-------------
Net Debt $2,377.3
=============
Liquidity and Financial Position
For the nine months ended September 30, 2007, cash flow provided
by operating activities was $439.5 million, cash flow used by
investing activities was $203.9 million, cash flow used by financing
activities was $224.3 million, and the effect of exchange rate changes
on cash was a decline of $2.6 million for a net increase in cash of
$8.7 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 2.6x at September 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 September 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 September 30,
2007
- ------------------------------------
Americas $134,686 $ 1,859$ 47,692$ -- $184,237
International 17,362 398 52,101 -- 69,861
Corporate (16,322) 125 -- -- (16,197)
Gain (loss)
on
disposition
of assets -
net 414 -- -- (414) --
--------------------------------------------------------
Consolidated $136,140 $ 2,382$ 99,793$(414) $237,901
========================================================
Three Months Ended September 30,
2006
- ------------------------------------
Americas $124,990 $ 1,173$ 45,897$ -- $172,060
International (9,116) 328 56,226 -- 47,438
Corporate (15,125) 22 -- -- (15,103)
Gain (loss)
on
disposition
of assets -
net (834) -- -- 834 --
--------------------------------------------------------
Consolidated $ 99,915 $ 1,523$ 102,123$ 834 $204,395
========================================================
Reconciliation of Revenue excluding Foreign Exchange Effects to
Revenue
(In thousands) Three Months Ended %
September 30, Change
------------------
2007 2006
--------- --------
Revenue $817,541 $720,254 14%
Less: Foreign exchange increase (32,430) --
--------- --------
Revenue excluding effects of foreign
exchange $785,111 $720,254 9%
========= ========
International revenue $431,188 $363,870 19%
Less: Foreign exchange increase (30,734) --
--------- --------
International revenue excluding effects of
foreign exchange $400,454 $363,870 10%
========= ========
Reconciliation of Expense (Direct Operating and SG&A Expenses)
excluding Foreign Exchange Effects to Expense
(In thousands) Three Months Ended %
September 30, Change
------------------
2007 2006
--------- --------
Expense $565,700 $502,257 13 %
Less: Foreign exchange increase (27,036) --
--------- --------
Expense excluding effects of foreign
exchange $538,664 $502,257 7 %
========= ========
International expense $361,725 $316,760 14 %
Less: Foreign exchange increase (25,682) --
--------- --------
International expense excluding effects of
foreign exchange $336,043 $316,760 6 %
========= ========
Reconciliation of OIBDAN to Net income
(In thousands) Three Months Ended %
September 30, Change
-------------------
2007 2006
--------- ---------
OIBDAN $237,901 $204,395 16 %
Non-cash compensation expense 2,382 1,523
Depreciation & amortization 99,793 102,123
Gain (loss) on disposition of assets - net 414 (834)
--------- ---------
Operating Income 136,140 99,915 36 %
Interest expense 40,178 43,599
Equity in earnings (loss) of
nonconsolidated affiliates (836) 1,823
Other income- net 2,815 467
--------- ---------
Income before income taxes and minority
interest 97,941 58,606
Income tax expense:
Current 31,663 14,376
Deferred 5,784 12,270
--------- ---------
Income tax expense 37,447 26,646
Minority interest expense, net of tax 5,778 127
--------- ---------
Net income $ 54,716 $ 31,833
========= =========
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