Clear Channel Outdoor Holdings, Inc. Reports Results for 2017 Fourth Quarter and Full Year

SAN ANTONIO–(BUSINESS WIRE)–Clear Channel Outdoor Holdings, Inc. (NYSE:CCO) today reported financial
results for the fourth quarter and year ended December 31, 2017.

“We continue to invest in our global network of innovative products to
help brands more effectively connect with broad audiences and target
specific customers,” said Bob Pittman, Chairman and Chief Executive
Officer of Clear Channel Outdoor Holdings, Inc. “We also continue to
expand our digital footprint and programmatic ad-buying offerings, as
well as enhance our in-depth data analytics and attribution
capabilities, to maximize the reach and value of our out-of-home digital
platform.”

Rich Bressler, Chief Financial Officer of Clear Channel Outdoor
Holdings, Inc. said: “Consolidated revenue increased in the fourth
quarter and was down for the full year. Operating income was down in the
fourth quarter and full year. We remain focused on balancing financial
discipline with the investments we are making in digital, data,
programmatic and attribution to strengthen our business.”

Key Financial Highlights

The Company’s key financial highlights for the fourth quarter of 2017
include:

  • Consolidated revenue increased 0.9%. Consolidated revenue decreased
    0.3%, after adjusting for a $26.7 million impact from movements in
    foreign exchange rates and the $18.2 million impact of the sale of
    certain businesses.

    • Americas revenues decreased $11.0 million, or 3.2%. Revenues
      decreased $5.0 million, or 1.5%, after adjusting for a $1.0
      million impact from movements in foreign exchange rates and a $7.0
      million impact from the sale of our business in Canada.
    • International revenues increased $17.6 million, or 4.7%. Revenues
      increased $3.1 million, or 0.9%, after adjusting for a $25.7
      million impact from movements in foreign exchange rates and a
      $11.2 million impact from the sale of our business in Australia.
  • Operating income decreased 64.3% to $89.6 million.
  • OIBDAN decreased 11.8%. OIBDAN decreased 12.3%, excluding the impact
    from movements in foreign exchange rates and the impact of the sale of
    certain businesses.

The Company’s key financial highlights for 2017 include:

  • Consolidated revenue decreased 3.6%. Consolidated revenue increased
    1.2%, after adjusting for a $8.6 million impact from movements in
    foreign exchange rates and the $135.7 million impact of the markets
    and businesses sold in 2016.

    • Americas outdoor revenues decreased $22.1 million, or 1.7%.
      Revenues decreased $7.9 million, or 0.6%, after adjusting for a
      $3.8 million impact from movements in foreign exchange rates and a
      $17.9 million impact from the non-strategic markets sold in the
      first quarter of 2016.
    • International outdoor revenues decreased $75.5 million, or 5.4%.
      Revenues increased $37.4 million, or 2.9%, after adjusting for a
      $4.9 million impact from movements in foreign exchange rates and a
      $117.8 million impact from the sale of our businesses in Turkey in
      the second quarter of 2016 and Australia in the fourth quarter of
      2016.
  • Operating income decreased 63.5% to $232.4 million.
  • OIBDAN decreased 15.3% and decreased 12.1%, excluding the impact from
    movements in foreign exchange rates and the impact of the markets and
    businesses sold in 2016.

Key Non-Financial Highlights

The Company’s recent key non-financial highlights include:

Strengthening Americas outdoor and International outdoor digital
offerings:

  • Installing 12 new digital billboards during the fourth quarter and 49
    over the full year for an end-of-year total of 1,192 across North
    America, and installing 473 digital displays in the fourth quarter and
    over 1,600 over the full year in the International markets for an
    end-of-year total of more than 13,500.
  • Launching Americas outdoors’ first two “Digital Urban Panel” networks
    in San Francisco – street-level digital ad networks that total 100
    dynamic IP addressable HD screens – capable of reaching consumers with
    mobile insights from pedestrian and vehicular traffic to enable brands
    and agencies through Clear Channel Outdoor RADAR campaign planning and
    attribution solutions to target their desired audiences in highly
    sought-after urban areas.
  • Announcing the 5-year renewal with Long Beach Airport for a
    state-of-the art media program to help brands engage with 3.8 million
    passengers annually.
  • Expanding Adshel Live to the West End of London through the
    installation of New World Payphones. Upon the completion of the roll
    out, the number of New World Payphones nationally will be 350.
  • Introducing Storm, a premium digital out-of-home network, in the
    Italian city of Milan, featuring nine high-impact digital billboards
    positioned in key pedestrian locations and along the city’s major
    highways to provide advertisers with a creative and flexible solution
    to build brands.
  • Securing a contract with AdCityMedia to sell advertising on 90 digital
    screens in shopping malls across Sweden. Clear Channel’s digital
    network in Sweden currently totals over 600 screens, and will exceed
    over 800 screens following the fulfillment of existing contracts.
  • Partnering in Finland’s second biggest city – Espoo – with the
    official supplier, CityBike Finland, to take responsibility for the
    commercialization of a new urban bicycle network, which will feature
    digital screens for advertisers to reach and engage audiences in some
    of the city’s busiest locations.
  • Transforming Oslo Airport with the installation of 56 digital out of
    home screens in a contract with Avinor that runs to 2024. The new
    screens will give advertisers a premium channel to reach more than 27
    million passengers who pass through the airport annually.

Expanding our reach with new contracts:

  • Renewing Clear Channel France’s partnership with Transdev to operate
    the advertising on buses in eight major French cities, with the new
    contract covering two new cities in the region: Niort and
    Romans-sur-Isère. Clear Channel France also strengthened its position
    in Ile-de-France, gaining the networks in Chelles and Brunoy. In
    total, these networks enable advertisers to reach an audience of 3
    million people.

Winning leading industry awards:

  • Americas Outdoor won the Ratings-Driven Media Planning Award from the
    Outdoor Advertising Association of America for its Playstation
    campaign with Sony Interactive Entertainment America & Kinetic
    Worldwide. It also won OOH Media Planning Awards for two efficient,
    strategic plans: a Gold Award for Playstation and a Silver for the 24
    Hour Fitness campaign which leveraged CCO RADAR and mobile retargeting
    solutions.

GAAP Measures by Segment

         
(In thousands) Three Months Ended
December 31,
%
Change
Year Ended
December 31,
%

Change

2017   2016 2017   2016
Revenue
Americas $ 336,359 $ 347,355 (3.2 )% $ 1,256,326 $ 1,278,413 (1.7 )%
International 392,772   375,208   4.7 % 1,334,939   1,410,471   (5.4 )%
Consolidated revenue $ 729,131   $ 722,563   0.9 % $ 2,591,265   $ 2,688,884   (3.6 )%
Direct Operating and SG&A expenses1
Americas $ 200,861 $ 207,026 (3.0 )% $ 793,580 $ 795,725 (0.3 )%
International 306,268     275,464   11.2 % 1,117,822   1,141,535   (2.1 )%
Consolidated Direct Operating and SG&A expenses1 $ 507,129     $ 482,490   5.1 % $ 1,911,402   $ 1,937,260   (1.3 )%
Operating income
Americas $ 83,480 $ 95,558 (12.6 )% $ 273,039 $ 297,034 (8.1 )%
International 50,429 60,061 (16.0 )% 85,893 116,178 (26.1 )%
Corporate2 (39,483 ) (32,957 ) 19.8 % (148,738 ) (123,148 ) 20.8 %
Impairment charges (2,568 ) nm (4,159 ) (7,274 ) (42.8 )%
Other operating income, net (2,266 ) 128,203   26,391   354,688  
Consolidated Operating income $ 89,592   $ 250,865   (64.3 )% $ 232,426   $ 637,478   (63.5 )%
 

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 $1.0
million and $1.5 million for the three months ended December 31, 2017
and 2016, respectively, and $5.1 million and $5.7 million for the years
ended December 31, 2017 and 2016, respectively.

               

Non-GAAP Measures1 (see preceding
table for comparable GAAP measures)

 
(In thousands) Three Months Ended
December 31,
%
Change
Year Ended
December 31,
%

Change

2017   2016 2017   2016
Revenue excluding movements in foreign exchange
Americas $ 335,347 $ 347,355 (3.5 )% $ 1,252,568 $ 1,278,413 (2.0 )%
International 367,118   375,208   (2.2 )% 1,330,088   1,410,471   (5.7 )%
Consolidated revenue excluding movements in foreign exchange $ 702,465   $ 722,563   (2.8 )% $ 2,582,656   $ 2,688,884   (4.0 )%
Direct Operating and SG&A expenses1 excluding
movements in foreign exchange
Americas $ 200,257 $ 207,026 (3.3 )% $ 790,593 $ 795,725 (0.6 )%
International 285,927   275,464   3.8 % 1,114,093   1,141,535   (2.4 )%
Consolidated Direct Operating and SG&A expenses excluding
movements in foreign exchange
$ 486,184   $ 482,490   0.8 % $ 1,904,686   $ 1,937,260   (1.7 )%
OIBDAN
Americas $ 135,498 $ 140,329 (3.4 )% $ 462,746 $ 482,688 (4.1 )%
International 86,504 99,744 (13.3 )% 217,117 268,936 (19.3 )%
Corporate (36,028 ) (29,336 ) 22.8 % (134,088 ) (107,145 ) 25.1 %
Consolidated OIBDAN $ 185,974   $ 210,737   (11.8 )% $ 545,775   $ 644,479   (15.3 )%
OIBDAN excluding movements in foreign exchange
Americas $ 135,090 $ 140,329 (3.7 )% $ 461,975 $ 482,688 (4.3 )%
International 81,191 99,744 (18.6 )% 215,995 268,936 (19.7 )%
Corporate (35,527 ) (29,336 ) 21.1 % (135,519 ) (107,145 ) 26.5 %
Consolidated OIBDAN excluding movements
in foreign exchange
$ 180,754   $ 210,737   (14.2 )% $ 542,451   $ 644,479   (15.8 )%
Revenue excluding effects of foreign exchange and revenue from
markets and businesses sold
Americas $ 335,347 $ 340,326 (1.5 )% $ 1,238,888 $ 1,246,775 (0.6 )%
International $ 367,118 $ 363,996 0.9 % $ 1,330,088 $ 1,292,714 2.9 %
Consolidated revenue, excluding effects of foreign exchange and
revenue from markets and businesses sold
$ 702,465 $ 704,322 (0.3 )% $ 2,568,976 $ 2,539,489 1.2 %
OIBDAN excluding effects of foreign exchange and revenue from
markets and businesses sold
Americas $ 135,090 $ 139,141 (2.9 )% $ 461,880 $ 480,377 (3.9 )%
International $ 81,191 $ 96,361 (15.7 )% $ 215,995 $ 244,109 (11.5 )%
Consolidated OIBDAN, excluding effects of foreign exchange and
revenue from markets and businesses sold
$ 180,754 $ 206,166 (12.3 )% $ 542,356 $ 617,341 (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.

 

Fourth Quarter 2017 Results

Consolidated

Consolidated revenue increased $6.6 million, or 0.9%, during the fourth
quarter of 2017 as compared to the fourth quarter of 2016. Consolidated
revenue decreased $1.9 million, or 0.3%, after adjusting for a $26.7
million impact from movements in foreign exchange rates and the $18.2
million impact from the sale of certain businesses.

Consolidated direct operating and SG&A expenses increased $24.6 million,
or 5.1%, during the fourth quarter of 2017 as compared to the fourth
quarter of 2016. Consolidated direct operating and SG&A expenses
increased $17.4 million, or 3.7%, in the fourth quarter, after adjusting
for a $20.9 million impact from movements in foreign exchange rates and
the $13.7 million impact from the sale of certain businesses.

Consolidated operating income decreased 64.3% to $89.6 million, during
the fourth quarter of 2017 as compared to the fourth quarter of 2016,
primarily due to the net gain of $127.6 million recognized on the sale
of our business in Australia in the fourth quarter of 2016.

The Company’s OIBDAN decreased 11.8% to $186.0 million, during the
fourth quarter of 2017 as compared to the fourth quarter of 2016. The
Company’s OIBDAN decreased 12.3% in the fourth 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 fourth quarter operating income and OIBDAN were
$2.8 million of direct operating and SG&A expenses and $0.5 million of
Corporate expenses associated with the Company’s strategic revenue and
efficiency initiatives, a decrease of $2.8 million compared to such
expenses in the prior year.

Americas

Americas revenues decreased $11.0 million, or 3.2%, during the fourth
quarter of 2017 as compared to the fourth quarter of 2016. Revenues
decreased $5.0 million, or 1.5%, after adjusting for a $1.0 million
impact from movements in foreign exchange rates and the $7.0 million
impact from the sale of our business in Canada. The decrease in revenue
is primarily due to the exchange of outdoor markets in the first quarter
of 2017.

Direct operating and SG&A expenses decreased $6.2 million, or 3.0%,
during the fourth quarter of 2017 as compared to the fourth quarter of
2016. Direct operating and SG&A expenses decreased $0.9 million, or
0.5%, after adjusting for a $0.6 million impact from movements in
foreign exchange rates and the $5.9 million impact from the sale of our
business in Canada, primarily driven by utility expense savings,
resulting from increased LED light installations, and lower employee
costs, partially offset by higher site lease expense.

Operating income decreased 12.6% to $83.5 million during the fourth
quarter of 2017 as compared to the fourth quarter of 2016. OIBDAN
decreased $4.8 million, or 3.4%. OIBDAN decreased $4.1 million, or 2.9%,
during the fourth quarter of 2017, after adjusting for a $0.4 million
impact from movements in foreign exchange rates and the $1.2 million
impact from the sale of our business in Canada. Operating income and
OIBDAN in the fourth quarter of 2017 each included $0.7 million in
expenses related to investments in strategic revenue and efficiency
initiatives compared to $1.2 million in the 2016 period.

International

International revenues increased $17.6 million, or 4.7%, during the
fourth quarter of 2017 as compared to the fourth quarter of 2016.
Revenues increased $3.1 million, or 0.9%, after adjusting for a $25.7
million impact from movements in foreign exchange rates and the $11.2
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 Sweden, primarily from new contracts and
digital expansion, partially offset by lower revenue in Belgium and
Ireland due to the loss of contracts.

Direct operating and SG&A expenses increased $30.8 million, or 11.2%,
during the fourth quarter of 2017 as compared to the fourth quarter of
2016. Direct operating and SG&A expenses increased $18.3 million, or
6.8%, after adjusting for a $20.3 million impact from movements in
foreign exchange rates and the $7.8 million impact from the sale of our
businesses in Australia and Turkey. Direct operating and SG&A expenses
increased primarily due to a $10.2 million expense recorded to correct
for accounting errors related to the misappropriation of cash identified
at our China subsidiary and higher site lease expense in certain
countries experiencing revenue growth.

Operating income decreased 16.0% to $50.4 million during the fourth
quarter of 2017 as compared to the fourth quarter of 2016. OIBDAN
decreased $13.2 million, or 13.3%. OIBDAN decreased $15.2 million, or
15.7%, during the fourth quarter of 2017, after adjusting for a $5.3
million impact from movements in foreign exchange rates and the $3.4
million impact from the sale of our businesses in Australia and Turkey
in 2016. Operating income and OIBDAN in the fourth quarter of 2017 each
include $2.1 million in expenses related to investments in strategic
revenue and efficiency initiatives compared to $3.8 million in the 2016
period.

Clear Channel International B.V. (“CCIBV”)

CCIBV’s consolidated revenues increased $18.1 million to $321.9 million
in the fourth quarter of 2017 compared to the same period in 2016. This
decrease includes a $23.3 million impact from movements in foreign
exchange rates. Excluding the impact from movements in foreign exchange
rates and a $11.2 million decrease resulting from the sale of our
Australia and Turkey businesses in 2016, CCIBV revenues increased $6.0
million during the fourth quarter of 2017 as compared to the same period
in 2016.

CCIBV’s operating income was $25.1 million in the fourth quarter of 2017
compared to operating income of $167.9 million in the same period in
2016, primarily due to the net gain of $127.6 million recognized on the
sale of our business in Australia in the fourth quarter of 2016.

Full Year 2017 Results

Consolidated

Consolidated revenue decreased $97.6 million, or 3.6%, during 2017 as
compared to 2016. Consolidated revenue increased $29.5 million, or 1.2%,
after adjusting for a $8.6 million impact from movements in foreign
exchange rates and the $135.7 million impact of markets and businesses
sold in 2016.

Consolidated direct operating and SG&A expenses decreased $25.9 million,
or 1.3%, during 2017 as compared to 2016. Consolidated direct operating
and SG&A expenses increased $76.1 million, or 4.2%, during 2017 as
compared to 2016, after adjusting for a $6.7 million impact of movements
in foreign exchange rates and the $108.7 million impact of markets and
businesses sold in 2016.

Consolidated operating income decreased 63.5% to $232.4 million, during
2017 as compared to 2016, primarily due to the net gain of $278.3
million on sale of nine non-strategic outdoor markets in the first
quarter of 2016 and the net gain of $127.6 million on sale on our
Australia business in the fourth quarter of 2016, partially offset by
the $56.6 million loss, which includes $32.2 million in cumulative
translation adjustments, on the sale of our Turkey business in the
second quarter of 2016.

The Company’s OIBDAN decreased 15.3% to $545.8 million during 2017 as
compared to 2016. After adjusting for the movements in foreign exchange
rates and the impact of the sale of markets and businesses, the
Company’s OIBDAN decreased 12.1% in 2017 compared to 2016.

Included in the 2017 operating income and OIBDAN were $10.3 million of
direct operating and SG&A expenses and $0.9 million of corporate
expenses associated with the Company’s strategic revenue and efficiency
initiatives, a decrease of $1.8 million compared to such expenses in the
prior year.

Americas Outdoor

Americas outdoor revenues decreased $22.1 million, or 1.7%, during 2017
as compared to 2016. Revenues decreased $7.9 million, or 0.6%, after
adjusting for a $3.8 million impact from movements in foreign exchange
rates and a $17.9 million impact from non-strategic markets sold in the
first quarter of 2016. The decrease in revenue is primarily due to the
exchange of outdoor markets in the first quarter of 2017.

Direct operating and SG&A expenses decreased $2.1 million, or 0.3%,
during 2017 as compared to 2016. Direct operating and SG&A expenses
increased $10.6 million, or 1.4%, after adjusting for a $3.0 million
impact from movements in foreign exchange rates and the $15.7 million
impact from the sale of non-strategic markets during the first quarter
2016. Direct operating and SG&A expenses increased primarily from higher
airport and fixed site lease expenses, partially offset by utility
expense savings, resulting from increased LED light installations and
lower bad debt expense.

Operating income decreased 8.1% to $273.0 million during 2017 as
compared to 2016, resulting primarily from the sale of the non-strategic
outdoor markets in 2016. OIBDAN decreased $19.9 million, or 4.1%. OIBDAN
decreased 3.9% during 2017 as compared to 2016, after adjusting for a
$0.8 million impact from movements in foreign exchange rates and the
$2.2 million impact from the sale of the non-strategic markets.

International Outdoor

International outdoor revenues decreased $75.5 million, or 5.4%, during
2017 as compared to 2016. Revenues increased $37.4 million, or 2.9%,
after adjusting for a $4.9 million impact from movements in foreign
exchange rates and the $117.8 million impact from the sale of our
businesses in Australia and Turkey in the second and fourth quarters of
2016, respectively. The increase is primarily due to growth across
several markets including Spain, the United Kingdom, Switzerland and
China, primarily from new contracts and digital expansion.

Direct operating and SG&A expenses decreased $23.7 million, or 2.1%,
during 2017 as compared to 2016. Direct operating and SG&A expenses
increased $65.5 million, or 6.2%, after adjusting for a $3.7 million
impact from movements in foreign exchange rates and the $93.0 million
impact from the sale of our businesses in Australia and Turkey in the
second and fourth quarters of 2016, respectively. Direct operating and
SG&A expenses increased primarily due to higher site lease expense in
certain countries experiencing revenue growth and a $9.6 million expense
recorded to correct for accounting errors related to the
misappropriation of cash identified at our China subsidiary.

Operating income decreased 26.1% to $85.9 million during 2017 as
compared to 2016. OIBDAN decreased $51.8 million, or 19.3%. OIBDAN
decreased $28.1 million, or 11.5%, during 2017 as compared to 2016,
after adjusting for a $1.1 million impact from movements in foreign
exchange rates and the $24.8 million impact from the sale of our
businesses in Australia and Turkey in the second and fourth quarters of
2016, respectively. Operating income and OIBDAN in 2017 each include
$8.2 million in expenses related to investments in strategic revenue and
efficiency initiatives compared to $7.3 million in 2016.

Clear Channel International B.V. (“CCIBV”)

CCIBV’s consolidated revenues decreased $86.9 million to $1,081.8
million in 2017 compared to 2016. This decrease includes an $8.2 million
impact from movements in foreign exchange rates. Excluding the impact
from movements in foreign exchange rates and a $117.8 million decrease
resulting from the sale of our Australia and Turkey businesses in 2016,
CCIBV revenues increased $22.7 million during 2017 as compared to 2016.

CCIBV’s operating loss was $1.0 million in 2017 compared to operating
income of $100.7 million in 2016. This decrease includes a $2.6 million
impact from movements in foreign exchange rates. The decrease was
primarily due to the net gain of $127.6 million on the sale of our
business in Australia in the fourth quarter of 2016, partially offset by
the $56.

Contacts

For further information:
Clear Channel Outdoor Holdings, Inc.
Media
Wendy
Goldberg, (212) 377-1105
Executive Vice President – Communications
or
Investors
Eileen
McLaughlin, (212) 377-1116
Vice President – Investor Relations

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