CCME Q1 revenues up 2%; net loss up $21 million

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Clear ChannelCC Media Holdings revenues were pretty much flat in Q1 compared to the same period in 2013. Excluding the effects of movements in foreign exchange rates, revenues declined $1.0 million or less than 1%. Media+Entertainment revenues grew $14 million, or 2%, primarily reflecting increases at traffic and weather business, as well as stronger national and digital advertising. Net loss was $424 million in Q1, compared to a loss of $203 million in the same period of 2013. The increase was primarily attributable to non-cash deferred income taxes, as well as higher interest expense, and equity in losses of non-consolidated affiliates.


Americas outdoor revenues decreased $18 million, or 6%, driven mainly by the absence of revenue from the 77 digital bulletins in LA that were turned off due to a court ruling, and lower revenues at airports due to contracts that were not renewed. Partially offsetting these declines was higher capacity and occupancy of digital bulletins in other markets.

International outdoor revenues rose $3 million, or 1%. Revenue growth in emerging markets including China, as well as developed markets including the UK and France, was partly offset by declines in other countries, including those in Northern and Eastern Europe, primarily due to challenging macroeconomic conditions.

The company’s OIBDAN was down 2%, or $6 million, to $261 million for the quarter, vs. $267 million for the same period of 2013. Included in Q1 OIBDAN of $261 million were $3 million and $10 million of operating and corporate expenses, respectively, associated with the company’s strategic revenue and efficiency initiatives to attract additional advertising dollars to its businesses and improve operating efficiencies. OIBDAN for Q1  included $8 million and $1 million of such expenses, respectively.

Net loss was $424 million in Q1, compared to a loss of $203 million in the same period of 2013. The increase was primarily attributable to non-cash deferred income taxes, as well as higher interest expense, and equity in losses of non-consolidated affiliates.

“We continued to make progress this quarter in advancing our strategy of providing customized, multi-platform market solutions that nobody else can,” Chairman and CEO Bob Pittman said. “In keeping with our promise to be everywhere our listeners want to find us, our Media+Entertainment business continued to build strong partnerships – making iHeartRadio available on Amazon Fire TV, Apple’s Car Play and the Samsung Gear 2 smartwatch. Our growing events business, which is extending the iHeartRadio brand across an increasing number of media platforms, successfully staged the first-ever iHeartRadio Country Music Festival in Austin. Another newcomer to our events line-up, the iHeartRadio Music Awards, will be televised live from Los Angeles on NBC on May 1. At Outdoor, we launched ‘Connect,’ the first global out-of-home mobile interactive advertising platform that enables customers to access interactive content via their smartphones. We are also enhancing our Americas Outdoor national sales capabilities and optimizing our global digital footprint.”

“Despite a difficult advertising environment due to disruptive winter weather across the U.S., we maintained our level of consolidated revenues, and also continued to invest in our businesses, to reinforce our foundation for growth,” said Rich Bressler, President and CFO. “At Media + Entertainment we flattened our management structure in order to move us closer to the business and make it run more efficiently, better serving our listeners and advertising partners, while staying focused on managing our expenses at both

iHeartRadio now has 47 million iHeartRadio registered users, as of the end of Q1, growing 66% YOY. iHeartRadio’s total listening hours were up 13% over the first quarter of 2013, while downloads and upgrades increased to 327 million. Mobile represented 56% of iHeartRadio total listening hours during the quarter.

Operating expenses were up $26 million during the quarter versus the same period in 2013, due primarily to higher compensation expenses driven by investments in our national and digital sales forces, and increased production costs for events such as the iHeartRadio Country Music Festival, as well as greater digital streaming and performance rights expenses driven by increased total listening hours and revenues.

Financials

For the quarter, cash used for operating activities was $92 million, cash flow provided by investing activities totaled $153 million, cash flow used for financing activities was $106 million, and the effect of exchange rate changes on cash was less than $3 million. The net decrease in cash was $47 million.

The sale of 50% interest in Australian Radio Network resulted in proceeds of $221 million. Capital expenditures for the quarter were $67 million compared to $62 million for the same period in 2013.

During the quarter of, subsidiaries of the company entered into the following debt transactions:

Clear Channel Communications, Inc. (a subsidiary of CC Media Holdings, Inc.):

–Repaid all $247 million outstanding under its receivables based credit facility.

CC Finco, LLC. (a subsidiary of CC Media Holdings, Inc.)

–Sold $227 million aggregate principal amount of Clear Channel’s 14% Senior Notes due 2021 to private purchasers.

–Repurchased, through open market purchases, $53 million aggregate principal amount of Clear Channel’s outstanding 5.5% Senior Notes due 2014 and $9 million aggregate principal amount of Clear Channel’s outstanding 4.9% Senior Notes due 2015 for a total of $63 million, including accrued interest. Clear Channel cancelled these notes subsequent to the purchase.

 


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Carl has been with RBR-TVBR since 1997 and is currently Managing Director/Senior Editor. Residing in Northern Virginia, he covers the business of broadcasting, advertising, programming, new media and engineering. He’s also done a great deal of interviews for the company and handles our ever-growing stable of bylined columnists.