EXHIBIT 99.1
Published on November 1, 2006
EXHIBIT 99.1
Clear Channel Outdoor Reports Third Quarter 2006 Results
SAN ANTONIO--(BUSINESS WIRE)--Oct. 30, 2006--Clear Channel Outdoor
Holdings, Inc. (NYSE:CCO) today reported results for its third quarter
ended September 30, 2006.
The Company reported revenues of $720.3 million in the third
quarter of 2006, an 8% increase over the $668.0 million reported for
the third quarter of 2005. Included in the Company's revenue is a
$14.4 million increase due to movements in foreign exchange; strictly
excluding the effects of these movements in foreign exchange, revenue
growth would have been 6%. See reconciliation of revenue excluding
effects of foreign exchange to revenue at the end of this press
release. Clear Channel Outdoor's expenses increased 4% to $502.3
million during the third quarter of 2006 compared to 2005. Included in
the Company's 2006 expenses is approximately $1.5 million of
share-based payments and a $12.1 million increase due to movements in
foreign exchange.
Clear Channel Outdoor's income and diluted earnings per share were
$31.8 million and $0.09, respectively, during the third quarter of
2006. This compares to income of $9.5 million or $0.03 per diluted
share in the third quarter of 2005.
The Company's OIBDAN (defined as Operating Income before
Depreciation & amortization, Non-cash compensation expense and Gain
(loss) on disposition of assets - net) was $204.4 million in the third
quarter of 2006, an 18% increase from the third quarter of 2005. See
reconciliation of OIBDAN to net income at the end of this press
release.
"Our third quarter performance continues the trend of consistently
strong revenues and profits," commented Mark Mays, Chief Executive
Officer of Clear Channel Outdoor. "We continue to leverage the prime
positioning of our global outdoor asset base to attract new
advertisers and grow our revenues. We believe we have a global
strategy in place that will sustain our growth over the long term, and
we remain committed to aggressively pursuing new technologies that
will solidify our leadership position and drive meaningful value for
our shareholders."
Paul J. Meyer, Global President and Chief Operating Officer,
commented, "We are particularly pleased with another quarter of strong
top line and OIBDAN growth in our business in the Americas, and that
momentum is continuing into the fourth quarter. We expect improved
performance in the fourth quarter from our international markets, and
we are in the process of implementing a new regional management system
that will enhance our ability to achieve greater operational
efficiencies in our European businesses going forward."
Revenue, Direct Operating and SG&A Expenses, and OIBDAN by Division
- ----------------------------------------------------------------------
(In thousands) Three Months Ended %
September 30, Change
---------------------
2006 2005
---------- ----------
Revenue
- -----------------------------------------
Americas $356,384 $317,705 12%
International 363,870 350,298 4%
---------- ----------
Consolidated revenue $720,254 $668,003 8%
========== ==========
Direct Operating and SG&A Expenses by
Division
- -----------------------------------------
Americas $185,497 $167,808
Less: Non-cash compensation expense (1,173) (222)
---------- ----------
184,324 167,586 10%
International 316,760 315,042
Less: Non-cash compensation expense (328) (112)
---------- ----------
316,432 314,930 0%
Plus: Non-cash compensation expense 1,501 334
---------- ----------
Consolidated divisional operating
expenses $502,257 $482,850 4%
========== ==========
The Company's 2006 revenue and direct operating and SG&A expenses
increased approximately $14.4 million and $12.1 million, respectively,
from foreign exchange movements during the third quarter of 2006 as
compared to the third quarter of 2005.
(In thousands) Three Months Ended %
September 30, Change
---------------------
OIBDAN 2006 2005
- ---------------------------------------- ---------- ----------
Americas $172,060 $150,119 15%
International 47,438 35,368 34%
Corporate (15,103) (12,999)
---------- ----------
Consolidated OIBDAN $204,395 $172,488 18%
========== ==========
See reconciliation of OIBDAN to net income at the end of this
press release.
Americas
The Company's Americas revenue increased 12% during the third
quarter of 2006 as compared to the third quarter of 2005 primarily
attributable to bulletin and airport revenues. The increase in
bulletin revenue was driven by an increase in rates. The increase in
airport revenues was attributable to increased occupancy and rates as
well as the acquisition of Interspace Airport Advertising
("Interspace") in the current quarter, which contributed $14.6 million
to revenue growth over the third quarter of 2005. Strong revenue
growth for the quarter was achieved across a broad spectrum of markets
including Boston, Cleveland, Dallas, Minneapolis, Orlando, Sacramento,
San Antonio and Tucson. Top advertising client categories during the
quarter included autos, business and consumer services, entertainment,
insurance and retail.
Direct operating and SG&A expenses increased $17.7 million in the
third quarter of 2006 over the third quarter of 2005. The increase was
driven by increased site lease and commission expenses associated with
the increase in revenue. Interspace contributed $9.0 million to direct
operating and SG&A expenses in the third quarter of 2006. Non-cash
compensation expense increased $1.2 million related to the adoption of
FAS 123R.
International Outdoor
Revenues from the Company's international outdoor operations
increased 4% in the third quarter of 2006 as compared to the third
quarter of 2005 primarily from movements in foreign exchange.
Excluding the effects of foreign exchange, the Company's international
outdoor revenue was flat over the third quarter of 2005 primarily as a
result of growth in street furniture revenues offset by declines in
billboard revenues in France and the United Kingdom. Top advertising
client categories during the quarter included autos, business and
consumer services, entertainment, insurance and retail.
Direct operating and SG&A expenses increased 1% over the third
quarter of 2005 primarily from increases due to movements in foreign
exchange and an increase in fixed rent associated with guarantees on
new contracts. Included in direct operating and SG&A expenses in the
third quarter of 2005 is approximately $26.6 million related to
restructuring the Company's businesses in France. Also included in the
2006 expenses 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 employee
compensation cost related to its stock option grants 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 the
expense associated with restricted stock awards. The following table
details non-cash compensation expense for the third quarter of 2006
and 2005, respectively:
(In thousands) Three Months Ended
September 30,
-----------------------
2006 2005(1)
----------- -----------
Direct operating expense $1,081 $334
SG&A 420 --
Corporate 22 --
----------- -----------
Total share-based payments $1,523 $334
=========== ===========
(1) Actual non-cash compensation expense recognized in the 2005
financial statements.
Conference Call
The Company will host a teleconference to discuss results today at
9:00 a.m. Eastern Time (in conjunction with the Clear Channel
Communications conference call). The conference call number is
800-309-1245 and the pass code is 9703475. The same conference call
number and pass code is being used for the Clear Channel
Communications teleconference as well. Please call ten 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 9703475. The audio cast will also be
archived on the website and will be available beginning 24 hours after
the call for a period of thirty days.
TABLE 1 - Financial Highlights of Clear Channel Outdoor Holdings, Inc.
and Subsidiaries - Unaudited
- ----------------------------------------------------------------------
(In thousands, except Three Months Ended
per share data) September 30,
---------------------
2006 2005 % Change
---------- ---------- ---------
Revenue $720,254 $668,003 8%
Direct operating expenses 367,620 329,688
Selling, general and administrative
expenses 134,637 153,162
Corporate expenses 15,125 12,999
Depreciation and amortization 102,123 95,405
Gain (loss) on disposition of assets -
net (834) 1,043
---------- ----------
Operating Income 99,915 77,792 28%
Interest expense 43,599 63,672
Equity in earnings of nonconsolidated
affiliates 1,823 3,961
Other income (expense) - net 467 (5,748)
---------- ----------
Income before income taxes and
minority interest 58,606 12,333
Income tax benefit (expense):
Current (14,376) 8,978
Deferred (12,270) (5,856)
---------- ----------
Income tax benefit (expense) (26,646) 3,122
Minority interest income (expense),
net of tax (127) (5,913)
---------- ----------
Net income $31,833 $9,542
========== ==========
Diluted net earnings per share (a) $.09 $.03 200%
========== ==========
Weighted average shares outstanding -
Diluted (a) 354,256 350,000
(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 earnings per share for
the three months ended September 30, 2005, based on actual weighted
average shares outstanding of 315,000, was $.03 per diluted share.
TABLE 2 - Selected Balance Sheet
Information
- -------------------------------------------
Selected balance sheet information was:
(In millions) September 30, December 31,
2006 2005
------------- ------------
(Unaudited) Audited
Cash $104.7 $108.6
Due from Clear Channel Communications $-- $0.1
Total Current Assets $1,113.8 $1,050.2
Net Property, Plant and Equipment $2,157.4 $2,153.4
Total Assets $5,222.7 $4,918.3
Due to Clear Channel Communications $49.9 $--
Current Liabilities (excluding current
portion of long-term debt) $758.3 $653.0
Long-Term Debt (including current portion
of long-term debt) $183.0 $227.8
Debt with Clear Channel Communications $2,500.0 $2,500.0
Shareholders' Equity $1,444.9 $1,209.4
TABLE 3 - Capital Expenditures - Unaudited
- ----------------------------------------------------------------------
Capital expenditures for the third quarter of 2006 and 2005 were:
(In millions) September 30, September 30,
2006 2005
------------- -------------
Non-revenue producing $20.7 $19.4
Revenue producing 38.0 33.2
------------- -------------
Total capital expenditures $58.7 $52.6
============= =============
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, 2006, Clear Channel Outdoor had total debt of:
(In millions) September 30,
2006
-------------
Bank Credit Facility $30.7
Debt with Clear Channel Communications 2,500.0
Other Debt 152.3
Due to Clear Channel Communications 49.9
-------------
Total 2,732.9
Cash 104.7
-------------
Net Debt $2,628.2
=============
Liquidity and Financial Position
For the nine months ended September 30, 2006, cash flow from
operating activities was $386.4 million, cash flow used by investing
activities was $382.9 million, cash flow used by financing activities
was $5.9 million, and the effect of exchange rate changes on cash was
$1.6 million for a net decrease in cash of $4.0 million.
Leverage, defined as total debt including the payable to Clear
Channel Communications, net of cash, divided by the trailing 12-month
OIBDAN, was 3.3x at September 30, 2006.
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, 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 (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 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, including (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 (vi)
OIBDAN to net income, the most directly comparable amounts reported
under GAAP.
Gain
(In (loss)
thousands) on
Operating Non-cash disposition
income compensation of assets -
(loss) expense D&A net OIBDAN
--------- ------------- --------- ------------ ---------
Three Months Ended September 30, 2006
- -------------------------------------
Americas $124,990 $1,173 $45,897 $-- $172,060
Intl Outdoor (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
========= ============= ========= ============ =========
Three Months Ended September 30, 2005
- -------------------------------------
Americas $108,969 $222 $40,928 $-- $150,119
Intl Outdoor (19,221) 112 54,477 -- 35,368
Corporate (12,999) -- -- -- (12,999)
Gain (loss)
on
disposition
of assets -
net 1,043 -- -- (1,043) --
--------- ------------- --------- ------------ ---------
Consolidated $77,792 $334 $95,405 $(1,043) $172,488
========= ============= ========= ------------ =========
Reconciliation of Revenue excluding Foreign Exchange Effects to
Revenue
(In thousands) Three Months Ended
September 30,
-------------------
2006 2005
--------- ---------
Revenue $720,254 $668,003 8%
Less: Foreign exchange increase (14,367) --
--------- ---------
Revenue excluding effects of foreign
exchange $705,887 $668,003 6%
International Outdoor Revenue $363,870 $350,298 4%
Less: Foreign exchange increase (13,129) --
--------- ---------
International Outdoor Revenue excluding
effects of foreign exchange $350,741 $350,298 0%
Reconciliation of Expense excluding Foreign Exchange Effects to
Expense
(In thousands) Three Months Ended
September 30,
---------------------
2006 2005
---------- ----------
International Outdoor Expense $316,760 $315,042 1%
Less: Foreign exchange increase (11,214) --
---------- ----------
International Outdoor Expense
excluding effects of foreign
exchange $305,546 $315,042 (3%)
Outdoor OIBDAN excluding Foreign Exchange Effects to OIBDAN
(In thousands) Three Months Ended
September 30,
-------------------
2006 2005
--------- ---------
OIBDAN $204,395 $172,488 18%
Less: Foreign exchange increase (2,239) --
--------- ---------
OIBDAN excluding effects of foreign
exchange $202,156 $172,488 17%
Reconciliation of OIBDAN to Net income
(In thousands) Three Months Ended
September 30,
---------------------
2006 2005
---------- ----------
OIBDAN $204,395 $172,488
Non-cash compensation expense 1,523 334
Depreciation & amortization 102,123 95,405
Gain (loss) on disposition of assets - net (834) 1,043
---------- ----------
Operating Income 99,915 77,792
Interest expense 43,599 63,672
Equity in earnings of nonconsolidated affiliates 1,823 3,961
Other income (expense) - net 467 (5,748)
---------- ----------
Income before income taxes and minority interest 58,606 12,333
Income tax benefit (expense):
Current (14,376) 8,978
Deferred (12,270) (5,856)
---------- ----------
Income tax benefit (expense) (26,646) 3,122
Minority interest income (expense) (127) (5,913)
---------- ----------
Net income $31,833 $9,542
========== ==========
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.
For further information contact:
Investors - Randy Palmer, Senior Vice President of Investor
Relations at 210-832-3315 or Media - Lisa Dollinger, Chief
Communications Officer, 210-832-3474 or visit our web site at
www.clearchanneloutdoor.com.
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, San Antonio
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