CLEAR CHANNEL OUTDOOR HOLDINGS, INC. REPORTS RESULTS FOR THE SECOND QUARTER OF 2023
"We delivered improved consolidated revenue results during the second quarter as compared to the prior year, excluding movements in foreign exchange rates and European business sales, and we made notable progress in executing on several facets of our strategic plan," said Scott Wells, Chief Executive Officer of Clear Channel Outdoor Holdings, Inc. "At the heart of our strategy, we remain focused on strengthening our digital capabilities and helping our clients plan, measure and maximize their campaigns, which we believe is elevating our role within the advertising ecosystem and broadening the range of advertisers we can serve.
"As we execute that digital transformation, we have continued to move forward in our plan to optimize our portfolio through the sale of our business in
"Looking ahead, we're seeing some moderation in advertising demand and our visibility is reduced, but we remain within our annual financial guidance ranges after adjusting for our European business sales. We're closely monitoring business trends and are reducing costs as appropriate. We remain committed to maintaining ample liquidity on our balance sheet and operating in a disciplined manner as we execute on our strategic plan."
Financial Highlights:
Financial highlights for the second quarter of 2023 as compared to the same period of 2022, including financial highlights excluding movements in foreign exchange rates ("FX")1:
(In millions) | Three Months | % Change | |
Revenue: | |||
Consolidated Revenue | $ 637.2 | (1.0) % | |
Excluding movements in FX1 | 636.1 | (1.1) % | |
America Revenue | 287.5 | 0.9 % | |
Airports Revenue | 71.0 | 16.3 % | |
Europe-North Revenue | 149.9 | 2.9 % | |
Excluding movements in FX1 | 152.3 | 4.5 % | |
Europe-South Revenue | 106.4 | (18.8) % | |
Excluding movements in FX1 | 104.0 | (20.6) % | |
Net Loss: | |||
Consolidated Net Loss | $ (36.6) | (44.0) % | |
Adjusted EBITDA1: | |||
Adjusted EBITDA1 | $ 146.3 | (10.9) % | |
Excluding movements in FX1 | 146.0 | (11.1) % | |
America Segment Adjusted EBITDA2 | 129.5 | (3.3) % | |
Airports Segment Adjusted EBITDA2 | 16.3 | 10.5 % | |
Europe-North Segment Adjusted EBITDA2 | 26.2 | (5.8) % | |
Excluding movements in FX1 | 26.5 | (5.0) % | |
Europe-South Segment Adjusted EBITDA2 | 2.4 | (85.7) % | |
Excluding movements in FX1 | 2.3 | (86.2) % |
1 | This is a non-GAAP financial measure. See "Supplemental Disclosures" section herein for more information. |
2 | Segment Adjusted EBITDA is a GAAP financial measure. See "Supplemental Disclosures" section herein for more information. |
Update Regarding Review of Strategic Alternatives for European Businesses:
As previously disclosed, our Board of Directors has authorized a review of strategic alternatives for our European businesses, including the potential disposition of certain of our lower-margin European assets (and/or other European assets of lower priority to our European business as a whole), while retaining, for now, our higher-margin European assets.
On March 31, 2023, we sold our business in
On July 17, 2023, we announced that we have entered into exclusive discussions to sell our business in
Our Board is continuing its review of strategic alternatives for our remaining European businesses, as well as evaluating a range of other strategic opportunities to enhance value. However, there can be no assurance that these reviews will result in any additional transactions or particular outcomes. Further, we have not set a timetable for completion of these processes and may suspend them at any time.
Guidance:
Our expectations for the third quarter of 2023 are as follows:
Third Quarter of 2023 | |||
(in millions) | Low | High | |
Consolidated Revenue1 | $ 570 | $ 600 | |
America | 273 | 283 | |
Airports | 73 | 78 | |
Europe-North1 | 132 | 142 |
1 | Excludes movements in FX |
We have updated our full year 2023 guidance from the guidance previously provided in our earnings release issued on May 9, 2023 to reflect the sale of our former business in
Full Year of 2023 | |||
(in millions) | Low | High | |
Consolidated Revenue1 | $ 2,465 | $ 2,535 | |
America | 1,095 | 1,115 | |
Airports | 285 | 295 | |
Europe-North1 | 590 | 610 | |
Consolidated Net Loss1 | (98) | (73) | |
Adjusted EBITDA1,2 | 522 | 552 | |
Adjusted Funds from Operations ("AFFO")1,2 | 62 | 82 | |
Capital Expenditures | 163 | 183 |
1 | Excludes movements in FX |
2 | This is a non-GAAP financial measure. See "Supplemental Disclosures" section herein for more information. |
Expected results and estimates may be impacted by factors outside of the Company's control, and actual results may be materially different from this guidance. See "Cautionary Statement Concerning Forward-Looking Statements" herein.
Results:
Revenue:
(In thousands) | Three Months Ended June 30, | % Change | Six Months Ended June 30, | % Change | |||||||
2023 | 2022 | 2023 | 2022 | ||||||||
Revenue: | |||||||||||
America | $ 287,517 | $ 285,026 | 0.9 % | $ 523,566 | $ 524,282 | (0.1) % | |||||
Airports | 71,045 | 61,106 | 16.3 % | 124,834 | 116,989 | 6.7 % | |||||
Europe-North | 149,909 | 145,718 | 2.9 % | 278,412 | 267,816 | 4.0 % | |||||
Europe-South1 | 106,419 | 131,081 | (18.8) % | 214,434 | 220,631 | (2.8) % | |||||
Other | 22,349 | 20,449 | 9.3 % | 41,428 | 39,350 | 5.3 % | |||||
Consolidated Revenue | $ 637,239 | $ 643,380 | (1.0) % | $ 1,182,674 | $ 1,169,068 | 1.2 % | |||||
Revenue excluding movements in FX2: | |||||||||||
America | $ 287,517 | $ 285,026 | 0.9 % | $ 523,566 | $ 524,282 | (0.1) % | |||||
Airports | 71,045 | 61,106 | 16.3 % | 124,834 | 116,989 | 6.7 % | |||||
Europe-North | 152,299 | 145,718 | 4.5 % | 292,531 | 267,816 | 9.2 % | |||||
Europe-South | 104,025 | 131,081 | (20.6) % | 215,953 | 220,631 | (2.1) % | |||||
Other | 21,218 | 20,449 | 3.8 % | 39,846 | 39,350 | 1.3 % | |||||
Consolidated Revenue excluding | $ 636,104 | $ 643,380 | (1.1) % | $ 1,196,730 | $ 1,169,068 | 2.4 % |
1 | Revenue from our former businesses in |
2 | This is a non-GAAP financial measure. See "Supplemental Disclosures" section herein for more information. |
Revenue for the second quarter of 2023, as compared to the same period of 2022:
America: Revenue up
- Higher revenue in most markets partially offset by impact of weakness in
San Francisco/Bay Area market - Digital revenue up
2.4% to from$98.4 million $96.0 million - National sales comprised
35.0% of America revenue, compared to35.9% in the prior year
Airports: Revenue up
- Driven by increased demand due to recovery of air travel after COVID-19 and timing of campaign spending
- Digital revenue up
22.5% to from$42.1 million $34.4 million - National sales comprised
59.7% of Airports revenue, compared to52.7% in the prior year
Europe-North: Revenue up
- Driven primarily by higher street furniture revenue
- Higher revenue in most countries, most notably
Belgium , theU.K. andDenmark ; partially offset by lower revenue inSweden andNorway - Digital revenue up
5.0% to from$79.5 million ; digital revenue, excluding movements in FX, up$75.7 million 6.2% to$80.5 million
Europe-South: Revenue down
- Sales of former businesses in
Switzerland andItaly resulted in an FX-adjusted decrease of .4 million$28 - Higher revenue from
Spain related to continued recovery from COVID-19, partially offset by lower revenue fromFrance due to weaker demand as a result of civil unrest and protests, as well as billboard takedowns
Other: Revenue up
- Higher advertising revenue offset by termination of public bicycle rental program
Direct Operating and SG&A Expenses1:
(In thousands) | Three Months Ended June 30, | % Change | Six Months Ended June 30, | % Change | |||||||
2023 | 2022 | 2023 | 2022 | ||||||||
Direct operating and SG&A expenses: | |||||||||||
America | $ 158,004 | $ 151,339 | 4.4 % | $ 312,702 | $ 290,533 | 7.6 % | |||||
Airports | 54,711 | 46,329 | 18.1 % | 102,236 | 92,282 | 10.8 % | |||||
Europe-North | 123,987 | 117,969 | 5.1 % | 245,552 | 233,387 | 5.2 % | |||||
Europe-South2 | 104,203 | 115,364 | (9.7) % | 224,751 | 226,517 | (0.8) % | |||||
Other | 18,838 | 18,618 | 1.2 % | 37,548 | 37,059 | 1.3 % | |||||
Consolidated Direct operating and SG&A expenses3 | $ 459,743 | $ 449,619 | 2.3 % | $ 922,789 | $ 879,778 | 4.9 % | |||||
Direct operating and SG&A expenses excluding movements in FX4: | |||||||||||
America | $ 158,004 | $ 151,339 | 4.4 % | $ 312,702 | $ 290,533 | 7.6 % | |||||
Airports | 54,711 | 46,329 | 18.1 % | 102,236 | 92,282 | 10.8 % | |||||
Europe-North | 126,133 | 117,969 | 6.9 % | 258,864 | 233,387 | 10.9 % | |||||
Europe-South | 101,889 | 115,364 | (11.7) % | 227,224 | 226,517 | 0.3 % | |||||
Other | 18,082 | 18,618 | (2.9) % | 36,355 | 37,059 | (1.9) % | |||||
Consolidated Direct operating and SG&A expenses excluding movements in FX | $ 458,819 | $ 449,619 | 2.0 % | $ 937,381 | $ 879,778 | 6.5 % |
1 | "Direct operating and SG&A expenses" as presented throughout this earnings release refers to the sum of direct operating expenses (excluding depreciation and amortization) and selling, general and administrative expenses (excluding depreciation and amortization). |
2 | Direct operating and SG&A expenses from our former businesses in |
3 | Includes restructuring and other costs of |
4 | This is a non-GAAP financial measure. See "Supplemental Disclosures" section herein for more information. |
Direct operating and SG&A expenses for the second quarter of 2023, as compared to the same period of 2022:
America: Direct operating and SG&A expenses up
- Site lease expense up
6.8% to from$85.5 million driven by lease renewals and amendments, as well as lower rent abatements$80.1 million
Airports: Direct operating and SG&A expenses up
- Site lease expense up
24.7% to from$42.8 million driven by lower rent abatements and higher revenue$34.3 million
Europe-North: Direct operating and SG&A expenses up
- Higher rental costs related to additional digital displays
- Higher labor costs and electricity prices
- Site lease expense up
0.9% to from$58.3 million ; site lease expense, excluding movements in FX, up$57.8 million 3.4% to .8 million driven by higher revenue and new contracts$59
Europe-South: Direct operating and SG&A expenses down
- Sales of former businesses in
Switzerland andItaly resulted in an FX-adjusted decrease of$21.4 million - Direct operating and SG&A expenses up in
France andSpain driven by higher site lease expense mainly related to new contracts
Other: Direct operating and SG&A expenses up
- Lower expenses related to termination of public bicycle rental program
Corporate Expenses:
(In thousands) | Three Months Ended June 30, | % Change | Six Months Ended June 30, | % Change | |||||||
2023 | 2022 | 2023 | 2022 | ||||||||
Corporate expenses1 | $ 57,557 | $ 39,081 | 47.3 % | $ 92,098 | $ 82,726 | 11.3 % | |||||
Corporate expenses excluding movements in FX2 | 57,645 | 39,081 | 47.5 % | 92,997 | 82,726 | 12.4 % |
1 | Includes restructuring and other costs of |
2 | This is a non-GAAP financial measure. See "Supplemental Disclosures" section herein for more information. |
Corporate expenses for the second quarter of 2023, as compared to the same period of 2022, up
Net Loss:
(In thousands) | Three Months Ended June 30, | % Change | Six Months Ended June 30, | % Change | |||||||
2023 | 2022 | 2023 | 2022 | ||||||||
Consolidated net loss | $ (36,579) | $ (65,317) | (44.0) % | $ (72,001) | $ (155,046) | (53.6) % |
Adjusted EBITDA1:
(In thousands) | Three Months Ended June 30, | % Change | Six Months Ended June 30, | % Change | |||||||
2023 | 2022 | 2023 | 2022 | ||||||||
Segment Adjusted EBITDA2: | |||||||||||
America | $ 129,513 | $ 133,977 | (3.3) % | $ 210,878 | $ 234,383 | (10.0) % | |||||
Airports | 16,334 | 14,777 | 10.5 % | 22,598 | 24,707 | (8.5) % | |||||
Europe-North | 26,234 | 27,859 | (5.8) % | 33,406 | 34,833 | (4.1) % | |||||
Europe-South | 2,368 | 16,542 | (85.7) % | (9,852) | (5,265) | (87.1) % | |||||
Other | 3,511 | 1,831 | 91.8 % | 3,880 | 2,291 | 69.4 % | |||||
Total Segment Adjusted EBITDA | 177,960 | 194,986 | (8.7) % | 260,910 | 290,949 | (10.3) % | |||||
Adjusted Corporate expenses1 | (31,678) | (30,727) | 3.1 % | (62,150) | (60,588) | 2.6 % | |||||
Adjusted EBITDA1 | $ 146,282 | $ 164,259 | (10.9) % | $ 198,760 | $ 230,361 | (13.7) % | |||||
Segment Adjusted EBITDA excluding movements in FX1: | |||||||||||
America | $ 129,513 | $ 133,977 | (3.3) % | $ 210,878 | $ 234,383 | (10.0) % | |||||
Airports | 16,334 | 14,777 | 10.5 % | 22,598 | 24,707 | (8.5) % | |||||
Europe-North | 26,471 | 27,859 | (5.0) % | 34,217 | 34,833 | (1.8) % | |||||
Europe-South | 2,285 | 16,542 | (86.2) % | (10,781) | (5,265) | (104.8) % | |||||
Other | 3,136 | 1,831 | 71.3 % | 3,491 | 2,291 | 52.4 % | |||||
Total Segment Adjusted EBITDA | 177,739 | 194,986 | (8.8) % | 260,403 | 290,949 | (10.5) % | |||||
Adjusted Corporate expenses excluding movements in FX1 | (31,767) | (30,727) | 3.4 % | (63,050) | (60,588) | 4.1 % | |||||
Adjusted EBITDA excluding movements in FX1 | $ 145,972 | $ 164,259 | (11.1) % | $ 197,353 | $ 230,361 | (14.3) % |
1 | This is a non-GAAP financial measure. See "Supplemental Disclosures" section herein for more information. |
2 | Segment Adjusted EBITDA is a GAAP financial measure. See "Supplemental Disclosures" section herein for more information. |
AFFO1:
(In thousands) | Three Months Ended June 30, | Six Months Ended June 30, | |
2023 | 2023 | ||
AFFO1 | $ 30,564 | $ (26,261) | |
AFFO excluding movements in FX1 | 30,515 | (27,667) |
1 | This is a non-GAAP financial measure. See "Supplemental Disclosures" section herein for more information. |
Capital Expenditures:
(In thousands) | Three Months Ended June 30, | % Change | Six Months Ended June 30, | % Change | |||||||
2023 | 2022 | 2023 | 2022 | ||||||||
America | $ 18,888 | $ 23,674 | (20.2) % | $ 35,696 | $ 38,474 | (7.2) % | |||||
Airports | 2,559 | 6,550 | (60.9) % | 7,310 | 9,562 | (23.6) % | |||||
Europe-North | 4,081 | 5,036 | (19.0) % | 11,147 | 11,486 | (3.0) % | |||||
Europe-South | 6,314 | 6,438 | (1.9) % | 11,365 | 15,061 | (24.5) % | |||||
Other | 1,036 | 290 | 257.2 % | 2,957 | 1,293 | 128.7 % | |||||
Corporate | 3,826 | 3,311 | 15.6 % | 6,656 | 5,232 | 27.2 % | |||||
Consolidated capital expenditures | $ 36,704 | $ 45,299 | (19.0) % | $ 75,131 | $ 81,108 | (7.4) % |
Markets and Displays:
As of June 30, 2023, we operated more than 470,000 print and digital out-of-home advertising displays in 21 countries, with the majority of our revenue generated by operations in the
Number of digital | Total number of displays as of June 30, 2023 | ||||||
Digital | Printed | Total | |||||
America1: | |||||||
Billboards2 | 51 | 1,765 | 34,486 | 36,251 | |||
Other displays3 | — | 584 | 19,193 | 19,777 | |||
Airports4 | (104) | 2,426 | 9,892 | 12,318 | |||
Europe-North | 275 | 14,531 | 248,247 | 262,778 | |||
Europe-South5 | (774) | 4,421 | 129,771 | 134,192 | |||
Other | 82 | 1,167 | 5,426 | 6,593 | |||
Total displays | (470) | 24,894 | 447,015 | 471,909 |
1 | As of June 30, 2023, our America segment had presence in 27 U.S. markets. |
2 | Billboards includes bulletins, posters, spectaculars and wallscapes. |
3 | Other displays includes street furniture and transit displays. |
4 | As of June 30, 2023, our Airports segment had displays across nearly 200 commercial and private airports in the |
5 | The decrease in Europe-South digital displays during the second quarter was driven by the sale of our former business in |
Clear Channel International B.V.
Clear Channel International B.V. ("CCIBV"), an indirect wholly-owned subsidiary of the Company and the issuer of our
CCIBV results for the second quarter of 2023 as compared to the same period of 2022 are as follows:
- CCIBV revenue decreased
6.8% to from$261.3 million . Excluding the$280.3 million impact of movements in FX, CCIBV revenue decreased$0.1 million 6.9% driven by the sales of our former businesses inSwitzerland andItaly , which resulted in an FX-adjusted decrease of .4 million. This was partially offset by higher revenue from many of our remaining European businesses, as described in the above "Results" section of this Earnings Release.$28 Singapore represented less than2% of CCIBV revenue for the three months ended June 30, 2023. - CCIBV operating income was
compared to$12.7 million in the same period of 2022.$15.6 million
Liquidity and Financial Position:
Cash and Cash Equivalents:
As of June 30, 2023, we had
(In thousands) | Six months ended June 30, |
2023 | |
Net cash used for operating activities | $ (54,386) |
Net cash provided by investing activities1 | 13,360 |
Net cash used for financing activities | (18,968) |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | 5,040 |
Net decrease in cash, cash equivalents and restricted cash | $ (54,954) |
Cash paid for interest | $ 202,664 |
Cash paid for income taxes, net of refunds | $ 6,574 |
1 | Includes |
Debt:
During the six months ended June 30, 2023, we made
We anticipate having cash interest payment obligations of
Please refer to Table 3 in this earnings release for additional detail regarding our outstanding debt balance.
TABLE 1 - Financial Highlights of Clear Channel Outdoor Holdings, Inc. and its Subsidiaries: | |||||||
(In thousands) | Three Months Ended June 30, | Six Months Ended June 30, | |||||
2023 | 2022 | 2023 | 2022 | ||||
Revenue | $ 637,239 | $ 643,380 | $ 1,182,674 | $ 1,169,068 | |||
Operating expenses: | |||||||
Direct operating expenses1 | 346,560 | 331,325 | 691,410 | 652,527 | |||
Selling, general and administrative expenses1 | 113,183 | 118,294 | 231,379 | 227,251 | |||
Corporate expenses1 | 57,557 | 39,081 | 92,098 | 82,726 | |||
Depreciation and amortization | 71,138 | 60,577 | 144,101 | 120,984 | |||
Impairment charges | — | 21,805 | — | 21,805 | |||
Other operating (income) expense, net2 | (5,785) | 1,367 | (97,061) | (3,544) | |||
Operating income | 54,586 | 70,931 | 120,747 | 67,319 | |||
Interest expense, net | (105,242) | (86,594) | (207,995) | (169,392) | |||
Other income (expense), net | 12,319 | (26,235) | 21,323 | (32,234) | |||
Loss before income taxes | (38,337) | (41,898) | (65,925) | (134,307) | |||
Income tax benefit (expense) | 1,758 | (23,419) | (6,076) | (20,739) | |||
Consolidated net loss | (36,579) | (65,317) | (72,001) | (155,046) | |||
Less amount attributable to noncontrolling interest | 718 | 347 | 208 | 486 | |||
Net loss attributable to the Company | $ (37,297) | $ (65,664) | $ (72,209) | $ (155,532) |
1 | Excludes depreciation and amortization. |
2 | Other operating income, net, includes a gain of |
Weighted Average Shares Outstanding | |||||||
(In thousands) | Three Months Ended June 30, | Six Months Ended June 30, | |||||
2023 | 2022 | 2023 | 2022 | ||||
Weighted average common shares outstanding – | 482,373 | 475,125 | 480,448 | 472,859 |
TABLE 2 - Selected Balance Sheet Information: | |||
(In thousands) | June 30, | December 31, | |
Cash and cash equivalents | $ 232,877 | $ 286,781 | |
Total current assets | 891,770 | 1,120,916 | |
Net property, plant and equipment | 709,778 | 787,548 | |
Total assets | 4,839,734 | 5,086,011 | |
Current liabilities (excluding current portion of long-term debt) | 935,891 | 1,096,322 | |
Long-term debt (including current portion of long-term debt) | 5,590,988 | 5,594,017 | |
Stockholders' deficit | (3,405,361) | (3,262,806) |
TABLE 3 - Total Debt: | |||
(In thousands) | June 30, | December 31, | |
Debt: | |||
Term Loan Facility Due 20261 | $ 1,925,000 | $ 1,935,000 | |
Revolving Credit Facility Due 20262 | — | — | |
Receivables-Based Credit Facility Due 20263 | — | — | |
Clear Channel Outdoor Holdings | 1,250,000 | 1,250,000 | |
Clear Channel Outdoor Holdings | 1,000,000 | 1,000,000 | |
Clear Channel Outdoor Holdings | 1,050,000 | 1,050,000 | |
Clear Channel International B.V. | 375,000 | 375,000 | |
Other debt4 | 37,118 | 36,798 | |
Original issue discount | (4,883) | (5,596) | |
Long-term debt fees | (41,247) | (47,185) | |
Total debt5 | 5,590,988 | 5,594,017 | |
Less: Cash and cash equivalents6 | (233,170) | (287,350) | |
Net debt | $ 5,357,818 | $ 5,306,667 |
1 | The term loans under the Term Loan Facility amortize in equal quarterly installments in an aggregate annual amount equal to |
2 | In June 2023, the Senior Secured Credit Agreement was amended, extending the maturity date of the Revolving Credit Facility to August 2026 and reducing the aggregate revolving credit commitments of the Revolving Credit Facility to |
3 | In June 2023, the Receivables-Based Credit Agreement was amended, extending its maturity to August 2026 and increasing its aggregate revolving credit commitments to |
4 | Other debt includes finance leases and a state-guaranteed loan of |
5 | The current portion of total debt was |
6 | Includes cash and cash equivalents held for sale as of the respective balance sheet date, including cash and cash equivalents of our business in |
Supplemental Disclosures:
Reportable Segments and Segment Adjusted EBITDA
The Company has four reportable segments, which it believes best reflect how the Company is currently managed: America, which consists of the Company's
Segment Adjusted EBITDA is the profitability metric reported to the Company's chief operating decision maker for purposes of making decisions about allocation of resources to, and assessing performance of, each reportable segment. Segment Adjusted EBITDA is a GAAP financial measure that is calculated as Revenue less Direct operating expenses and SG&A expenses, excluding restructuring and other costs. Restructuring and other costs include costs associated with cost savings initiatives such as severance, consulting and termination costs and other special costs.
Non-GAAP Financial Information
This earnings release includes information that does not conform to
The Company defines, and uses, these non-GAAP financial measures as follows:
- Adjusted EBITDA is defined as consolidated net income (loss), plus: income tax expense (benefit); all non-operating expenses (income), including other expense (income) and interest expense, net; other operating expense (income), net; depreciation, amortization and impairment charges; share-based compensation expense included within corporate expenses; and restructuring and other costs included within operating expenses. Restructuring and other costs include costs associated with cost savings initiatives such as severance, consulting and termination costs and other special costs.
The Company uses Adjusted EBITDA as one of the primary measures for the planning and forecasting of future periods, as well as for measuring performance for compensation of Company executives and other members of Company management. The Company believes Adjusted EBITDA is useful for investors because it allows investors to view performance in a manner similar to the method used by Company management and helps improve investors' ability to understand the Company's operating performance, making it easier to compare the Company's results with other companies that have different capital structures or tax rates. In addition, the Company believes Adjusted EBITDA is 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. - As part of the calculation of Adjusted EBITDA, the Company also presents the non-GAAP financial measure of "Adjusted Corporate expenses," which the Company defines as corporate expenses excluding share-based compensation expense and restructuring and other costs.
- The Company uses the National Association of Real Estate Investment Trusts ("Nareit") definition of FFO, which is consolidated net income (loss) before: depreciation, amortization and impairment of real estate; gains or losses from the disposition of real estate; and adjustments to eliminate unconsolidated affiliates and noncontrolling interest. The Company defines AFFO as FFO before: maintenance capital expenditures; straight-line rent effects; depreciation, amortization and impairment of non-real estate; amortization of deferred financing costs and discounts; share-based compensation expense; deferred taxes; restructuring and other costs; transaction costs; foreign exchange transaction gain or loss; non-service related pension costs or benefits; and other items, including adjustment for unconsolidated affiliates and noncontrolling interest and nonrecurring infrequent or unusual gains or losses.
The Company is not a Real Estate Investment Trust ("REIT"). However, the Company competes directly with REITs that present the non-GAAP measures of FFO and AFFO and, accordingly, believes that presenting such measures will be helpful to investors in evaluating the Company's operations with the same terms used by the Company's direct competitors. The Company calculates FFO in accordance with the definition adopted by Nareit. Nareit does not restrict presentation of non-GAAP measures traditionally presented by REITs by entities that are not REITs. In addition, the Company believes FFO and AFFO are already among the primary measures used externally by the Company's investors, analysts and competitors in its industry for purposes of valuation and comparing the operating performance of the Company to other companies in its industry. The Company does not use, and you should not use, FFO and AFFO as an indication of the Company's ability to fund its cash needs or pay dividends or make other distributions. Because the Company is not a REIT, the Company does not have an obligation to pay dividends or make distributions to stockholders and does not intend to pay dividends for the foreseeable future. Moreover, the presentation of these measures should not be construed as an indication that the Company is currently in a position to convert into a REIT.
A significant portion of the Company's advertising operations is conducted in foreign markets, principally
Since these non-GAAP financial measures are not calculated in accordance with GAAP, they should not be considered in isolation of, or as a substitute for, the most directly comparable GAAP financial measures as an indicator of operating performance or, in the case of Adjusted EBITDA, FFO and AFFO, the Company's ability to fund its cash needs. In addition, these measures may not be comparable to similar measures provided by other companies. See reconciliations of consolidated net loss to Adjusted EBITDA, corporate expenses to Adjusted Corporate expenses and consolidated net loss to FFO and AFFO in the tables set forth below. This data should be read in conjunction with the Company's most recent Annual Report on Form 10-K, Form 10-Qs and Form 8-Ks, which are available on the Investor Relations page of the Company's website at investor.clearchannel.com.
Reconciliation of Consolidated Net Loss to Adjusted EBITDA | |||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||
(in thousands) | 2023 | 2022 | 2023 | 2022 | |||
Consolidated net loss | $ (36,579) | $ (65,317) | $ (72,001) | $ (155,046) | |||
Adjustments: | |||||||
Income tax (benefit) expense | (1,758) | 23,419 | 6,076 | 20,739 | |||
Other (income) expense, net | (12,319) | 26,235 | (21,323) | 32,234 | |||
Interest expense, net | 105,242 | 86,594 | 207,995 | 169,392 | |||
Other operating (income) expense, net | (5,785) | 1,367 | (97,061) | (3,544) | |||
Impairment charges | — | 21,805 | — | 21,805 | |||
Depreciation and amortization | 71,138 | 60,577 | 144,101 | 120,984 | |||
Share-based compensation | 6,179 | 6,876 | 10,303 | 11,590 | |||
Restructuring and other costs | 20,164 | 2,703 | 20,670 | 12,207 | |||
Adjusted EBITDA | $ 146,282 | $ 164,259 | $ 198,760 | $ 230,361 |
Reconciliation of Corporate Expenses to Adjusted Corporate Expenses | |||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||
(in thousands) | 2023 | 2022 | 2023 | 2022 | |||
Corporate expenses | $ (57,557) | $ (39,081) | $ (92,098) | $ (82,726) | |||
Share-based compensation | 6,179 | 6,876 | 10,303 | 11,590 | |||
Restructuring and other costs | 19,700 | 1,478 | 19,645 | 10,548 | |||
Adjusted Corporate expenses | $ (31,678) | $ (30,727) | $ (62,150) | $ (60,588) |
Reconciliation of Consolidated Net Loss to FFO and AFFO | |||
Three Months Ended June 30, | Six Months Ended June 30, | ||
(in thousands) | 2023 | 2023 | |
Consolidated net loss | $ (36,579) | $ (72,001) | |
Depreciation and amortization of real estate | 62,880 | 127,634 | |
Net gain on disposition of real estate (excludes condemnation proceeds)1 | (10,248) | (104,479) | |
Adjustment for unconsolidated affiliates and non-controlling interest | (1,301) | (1,172) | |
Funds From Operations (FFO) | $ 14,752 | $ (50,018) | |
Capital expenditures–maintenance | (14,684) | (25,041) | |
Straight-line rent effect | 1,580 | 2,915 | |
Depreciation and amortization of non-real estate | 8,258 | 16,467 | |
Amortization of deferred financing costs and discounts | 2,907 | 5,794 | |
Share-based compensation | 6,179 | 10,303 | |
Deferred taxes | (4,001) | 1,411 | |
Restructuring and other costs | 20,164 | 20,670 | |
Transaction costs | 6,024 | 10,312 | |
Foreign exchange transaction gain | (12,547) | (21,684) | |
Other items | 1,932 | 2,610 | |
Adjusted Funds From Operations (AFFO) | $ 30,564 | $ (26,261) |
1 | Net gain on disposition of real estate includes a gain of |
Reconciliation of Consolidated Net Loss Guidance1 to Adjusted EBITDA Guidance1 | |||
Full Year of 2023 | |||
(in millions) | Low | High | |
Consolidated net loss | $ (98) | $ (73) | |
Adjustments: | |||
Income tax expense | 6 | 6 | |
Other income, net | (23) | (25) | |
Interest expense, net | 418 | 425 | |
Other operating income, net | (98) | (98) | |
Depreciation and amortization | 267 | 267 | |
Share-based compensation | 19 | 19 | |
Restructuring and other costs | 31 | 31 | |
Adjusted EBITDA | $ 522 | $ 552 |
1 | Guidance excludes movements in FX |
Reconciliation of Consolidated Net Loss Guidance1 to FFO and AFFO Guidance1 | |||
Full Year of 2023 | |||
(in millions) | Low | High | |
Consolidated net loss | $ (98) | $ (73) | |
Depreciation and amortization of real estate | 233 | 233 | |
Net gain on disposition of real estate (excludes condemnation proceeds)2 | (110) | (110) | |
Adjustment for unconsolidated affiliates and non-controlling interest | (3) | (3) | |
Funds From Operations (FFO) | $ 22 | $ 47 | |
Capital expenditures–maintenance | (48) | (51) | |
Straight-line rent effect | 5 | 5 | |
Depreciation and amortization of non-real estate | 34 | 34 | |
Amortization of deferred financing costs and discounts | 12 | 12 | |
Share-based compensation | 19 | 19 | |
Deferred taxes | (6) | (6) | |
Restructuring and other costs | 31 | 31 | |
Foreign exchange transaction gain | (23) | (25) | |
Other items | 16 | 16 | |
Adjusted Funds From Operations (AFFO) | $ 62 | $ 82 |
1 | Guidance excludes movements in FX. |
2 | Includes gains of |
Conference Call
The Company will host a conference call to discuss these results on August 7, 2023 at 8:30 a.m. Eastern Time. The conference call number is 1-833-470-1428 (
About Clear Channel Outdoor Holdings, Inc.
Clear Channel Outdoor Holdings, Inc. (NYSE: CCO) is at the forefront of driving innovation in the out-of-home advertising industry. Our dynamic advertising platform is broadening the pool of advertisers using our medium through the expansion of digital billboards and displays and the integration of data analytics and programmatic capabilities that deliver measurable campaigns that are simpler to buy. By leveraging the scale, reach and flexibility of our diverse portfolio of assets, we connect advertisers with millions of consumers every month across more than 470,000 print and digital displays in 21 countries.
For further information, please contact:
Investors:
Eileen McLaughlin
Vice President - Investor Relations
(646) 355-2399
InvestorRelations@clearchannel.com
Cautionary Statement Concerning Forward-Looking Statements
Certain statements in this earnings release 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 that may cause the actual results, performance or achievements of Clear Channel Outdoor Holdings, Inc. and its subsidiaries (the "Company") to be materially different from any future results, performance, achievements, guidance, goals and/or targets expressed or implied by such forward-looking statements. The words "guidance," "believe," "expect," "anticipate," "estimate," "forecast," "goals," "targets" and similar words and 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, such as statements about our guidance, outlook, long-term forecast, goals or targets; our business plans and strategies; our expectations about the timing, closing, satisfaction of closing conditions, use of proceeds and benefits of the sales of our European businesses as well as expectations about certain markets and strategic review processes; industry and market trends; and our liquidity, are forward-looking statements. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and other factors, some of which are beyond our control and are difficult to predict.
Various risks that could cause future results to differ from those expressed by the forward-looking statements included in this earnings release include, but are not limited to: the delay or failure to satisfy the conditions to divest any of our European businesses; the impact of the continued strategic reviews of our other European businesses and assets, including failure to realize their benefits; our inability to complete any other transactions with respect to our other European businesses and improve our portfolio; the difficulty, cost and time required to implement our strategy, including optimizing our portfolio, and the fact that we may not realize the anticipated benefits therefrom; continued economic uncertainty, an economic slowdown or a recession; financial and industry conditions such as volatility in the
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SOURCE Clear Channel Outdoor Holdings, Inc.