LFP - Large-Format-Printing

Clear Channel Outdoor Reports Fourth Quarter and Full Year 2010 Results

Tuesday 08. February 2011 - 2010 Revenues Increase 4%; 2010 OIBDAN Increases 21%

Clear Channel Outdoor Holdings, Inc. (NYSE: CCO) today reported results for the fourth quarter and year ended December 31, 2010.
Mark Mays, CEO of Clear Channel Outdoor, commented: “The global business environment improved as the year progressed, with many of our markets seeing increased demand from advertisers. We witnessed strength across our U.S. operations, especially our digital boards, while our international business benefitted from a rebound in street furniture across a number of our markets. As a result, our margins continued to strengthen, reflecting the benefits of our cost-restructuring program and more efficient organization. Looking ahead, we remain focused on further improving our value proposition to our advertising partners, including expanding our digital footprint and audience measurement tools, while carefully managing our costs. As our markets continue to recover, we are well positioned to generate returns for the benefit of our shareholders.”
Full Year 2010 Results
For 2010, Clear Channel Outdoor’s revenues grew 4% to $2.8 billion. This $100 million increase over the $2.7 billion reported for 2009 resulted from an improved advertising environment driven by the strengthening economy, and occurred across both the Americas and International outdoor businesses.
Americas Outdoor revenues increased $52 million, or 4%, across products, particularly digital, on improved rates and occupancy. Excluding the impact of the disposition of the Company’s Taxi Media business, and excluding the effects of foreign exchange1, revenues were up $82 million, or 7%
International Outdoor revenues increased $48 million, or 3%, from street furniture growth across various countries. Excluding the effects of foreign exchange1, revenues were up 4%
Clear Channel Outdoor’s operating expenses2 decreased 3% from 2009 to $2.04 billion during 2010. Included in the Company’s operating and corporate expenses for 2010 and 2009 were approximately $19 million and $53 million, respectively, of restructuring charges and approximately $12 million and $12 million, respectively, of non-cash compensation expense.
Corporate expenses2 increased $44 million during 2010 as compared to 2009, primarily due to increases in bonus expense from improved operating performance compared to the prior year and increases related to headcount from centralization efforts and the expansion of corporate capabilities.
The Company substantially completed its restructuring program during 2010, benefitting from cost reductions and experiencing lower restructuring expenses compared to 2009. The growth in revenues, along with expanded margins, driven by cost reductions, resulted in OIBDAN1 growth of 21% over 2009. OIBDAN1 was $648 million for 2010 compared to $535 million in 2009. Excluding the effects of movements in foreign exchange rates1, the increase in OIBDAN would have been 20%.
The Company’s consolidated net loss and diluted loss per share was $76 million and $0.26, respectively, during 2010, compared to net loss and diluted loss per share of $873 million and $2.46, respectively, during 2009.
Fourth Quarter 2010 Results
The Company reported revenues of $793 million in the fourth quarter of 2010, a 4% increase from the $763 million reported for the fourth quarter of 2009, and excluding the effects of movements in foreign exchange rates, the revenue increase would have been 5%.1
Americas Outdoor revenues increased $22 million, or 7%, across products on improved rates and occupancy. Excluding the impact of the disposition of the Company’s Taxi Media business in 2009, and the effects of foreign exchange1, revenues were up $30 million, or 9%
International Outdoor revenues increased $8 million, or 2%, from street furniture growth across various countries. Excluding the effects of foreign exchange1, revenues were up 5%
Clear Channel Outdoor’s operating expenses2 decreased 7%, to $549 million for the fourth quarter of 2010 compared to the same period of 2009. Expenses would have declined 5%, excluding the effects of movements in foreign exchange rates.1 Included in the Company’s operating and corporate expenses for the fourth quarter of 2010 and 2009 are approximately $1 million and $30 million, respectively, of restructuring charges and approximately $4 million and $4 million, respectively, of non-cash compensation expense.
As a result of higher revenues and the impact of the cost savings generated by its restructuring program, the Company’s OIBDAN1 grew 33% over the fourth quarter of 2009. OIBDAN1 was $207 million for the fourth quarter of 2010 compared to $156 million for the fourth quarter of 2009.
Clear Channel Outdoor’s consolidated net income was $7 million, or $0.00 per diluted share, during the fourth quarter of 2010. This compares to a consolidated net loss of $58 million, or $0.18 per diluted share, for the fourth quarter of 2009.
1See reconciliations of revenue, direct operating and SG&A expenses and OIBDAN excluding the effects of foreign exchange, direct operating and SG&A expenses excluding non-cash compensation expense, revenue and direct operating and SG&A expense excluding Taxi Media, segment OIBDAN to consolidated operating income (loss) and the reconciliation of OIBDAN to net income (loss) at the end of this press release. See also the definition of OIBDAN under the Supplemental Disclosure section of this release.
2The Company’s operating expenses include direct operating expenses and SG&A expenses but exclude non-cash compensation expense associated with the Company’s stock option grants and restricted stock and restricted stock unit awards. Corporate expenses also exclude non-cash compensation expenses associated with the Company’s stock option grants and restricted stock and restricted stock unit awards.
Americas
Americas’ outdoor revenue increased $51.9 million, or 4%, during 2010 compared to 2009 as a result of revenue growth across most of our advertising inventory, particularly digital. The increase was driven by increases in both occupancy and rate. Partially offsetting the revenue increase was the decrease in revenue related to the sale of the Company’s Taxi Media business during 2009.
Operating expenses2 decreased $4 million during 2010 compared to 2009. The decline in operating expenses was due to the disposition of Taxi Media, partially offset by a $26 million increase in variable expenses associated with the increase in revenue, a $6 million increase primarily related to the unfavorable impact of litigation and a $5 million increase in consulting costs.
Americas’ OIBDAN1 for 2010 was $492 million, an increase of 13% when compared with OIBDAN of $436 million for 2009. Excluding the effects of movements in foreign exchange rates1, the increase in OIBDAN would have been 12%. The growth in OIBDAN was driven by an overall improvement in business along with increased margins compared to 2009.
As of December 31, 2010, the Company had deployed 615 digital displays in 36 U.S. markets. This includes 59 digital displays that were rolled out during the fourth quarter of 2010 for a total of 158 digital displays that were deployed during 2010.
International
International outdoor revenue increased $48 million, or 3%, during 2010 compared to 2009, primarily as a result of revenue growth from street furniture across most countries, partially offset by the exit from businesses in Greece and India. Foreign exchange movements1 negatively impacted 2010 revenue by $10 million, or approximately 1%.
Operating expenses2 decreased $52 million during 2010 compared to 2009, primarily as a result of a $20 million decrease in expenses incurred in connection with the Company’s restructuring program and a $16 million decline in site-lease expenses primarily from cost savings attributable to the restructuring program. Also contributing to the decline in expenses was the exit from businesses in Greece and India during 2010, an $11 million decrease from movements in foreign exchange, and a $5 million decrease in business tax related to a change in French tax law.
Led by the revenue growth from the Company’s street furniture business and improved margins across a number of countries, primarily as a result of the savings from the restructuring program, International OIBDAN1 for 2010 increased 62% to $263 million from $163 million for 2009.
Other Events
In June 2010, Mark P. Mays announced his decision to retire as our Chief Executive Officer and asked the Company’s Board of Directors to initiate a search for his replacement. The Company has been actively searching for a replacement but, to date, has not identified his successor. Mr. Mays has informed the Company that he will step down as Chief Executive Officer on the earlier of the date that his successor joins the Company or March 31, 2011.