CCME Q2 revenues up 1%; net loss of $187 million


Clear ChannelConsolidated revenues were up $12.1 million in the quarter compared to Q2 2013. Excluding the effects of movements in foreign exchange rates, revenues increased $1.6 million or less than 1%. Media+Entertainment revenues increased slightly compared to the same period of 2013. Revenue increased in their traffic and weather business as a result of new weather product offerings and the impact of strategic sales initiatives, as well as higher political advertising. M+E continued to experience increases in digital ad revenue as a result of continued increased listenership on the iHeartRadio platform, with total listening hours increasing 3.2% and higher revenue from events. Partially offsetting these increases were decreases in core national and local terrestrial radio revenues and national syndication revenues.

Operating expenses increased $2 million during Q2 versus the same period in 2013, primarily due to higher sports programming costs, increased rent expense and higher spending on strategic efficiency initiatives.

The consolidated net loss was $187 million in the quarter compared to a consolidated net income attributable to the company of $7 million in the same period of 2013. The decrease was primarily due to a $131 million gain on marketable securities related to the sale of an investment in Sirius XM in Q2 2013.

OIBDAN decreased $1 million to $322 million in Q2 of 2014.

Americas outdoor revenues decreased $16 million, or 5%, (or $15 million excluding foreign exchange impacts) driven mainly by lower national account revenues, the nonrenewal of certain airport contracts and lower revenues in LA as a result of digital boards that became inactive in April 2013.

International outdoor revenues increased $30 million, or 7%, (or $19 million excluding foreign exchange impacts) primarily drive by revenue growth in western Europe including Italy, due to a new airport contract in Rome, as well as other countries such as Sweden, France and the UK. Revenue in emerging markets also increased, including in Brazil where revenue growth was driven by digital advertising and the FIFA World Cup, and in China as a result of new contracts.

CCME’s OIBDAN was down 4%, or $18 million, to $487 million for the three months ended June 30, 2014, versus $505 million for the same period of 2013. Included in Q2 OIBDAN of $487 million were $13 million and $7 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 the quarter included $8 million and $6 million of such expenses, respectively.

Highlights for the quarter:

–iHeartRadio grew registered users by 50% year over year. With an even more personalized listening experience through iHeartRadio 5.0, iHeart Radio is a leading brand among digital streaming services and is available over the Internet and iHeartRadio app on 35 devices – including mobile, tablets, automotive partners, smart TVs, gaming devices and more. Total listening hours were up 3% over the second quarter of 2013, with TLH reaching an all-time high in May. Mobile represented 58% of this quarter’s total listening hours.

–Launched the inaugural iHeartRadio Music Awards on May 1st, broadcast live on NBC, which attracted more than 65 million votes through Twitter and Facebook. The awards were the dominant social media topic throughout the week, with #iHeartAwards trending #1 on Twitter throughout the night and number one for Nielsen’s Twitter TV ratings for the entire week. With the telecast finishing #2 for the night among adults 18-49 among the Big 4 networks, NBC announced it will pick up the iHeartRadio Music Awards for 2015.

–Hosted the third annual iHeartRadio Ultimate Pool Party that was streamed live on Yahoo! and Clear Channel radio stations, as well as airing exclusively on The CW Network. Over 8.2 million people watched and listened to the premiere of the event generated nearly 1.3 billion social impressions over the three-day weekend.

–Partnered with Honda to create “Honda Stage,” a massive brand awareness initiative to reach the youth market that will feature a major series of live and intimate performances from today’s best artists at the iHeartRadio Theater in Los Angeles.

–Launched the iHeartRadio Hispanic Network which provides access to the Hispanic community, as well as exclusive access to some of Mexico’s top-rated radio stations through their partnership with Grupo Radio Centro.

–iHeartRadio Network added to Clear Channel’s Network Group under the leadership of Darren Davis.

–Partnered with AdsWizz, an advertising technology provider for the digital radio and audio industries, to deliver targeted ads to listeners based on their preferences and location. These targeted ads can be delivered to specific digital users during a live radio stream for CCME  radio stations on iHeartRadio.

–Extended iHeartRadio’s automotive reach in the connected dashboard by offering its streaming and live radio service through Subaru’s new STARLINK infotainment systems.

–Launched AuDiO (Audience Delivery Optimizer), a first-of-its-kind, proprietary radio optimization tool that enables local and national political campaigns to target precisely key voter segments via radio.

“Our growing digital and events businesses continued their strong momentum during the quarter, further demonstrating the unique value that Clear Channel delivers to advertisers through our diverse set of media assets,” CCME CEO Bob Pittman said. “At iHeartRadio, we introduced an even more personalized listener experience with the release of iHeartRadio 5.0 and grew our registered users by 50% year over year — surpassing the milestone of 50 million registered users in record time. The first-ever iHeartRadio Music Awards, broadcast live on NBC, was a huge success — attracting more than 65 million votes through Twitter and Facebook, with #iHeartAwards trending #1 on Twitter throughout the night and number one for Nielsen’s Twitter TV ratings for the entire week. In addition, we showcased the vision and innovation of our entire company to some of the world’s largest brands and agencies at the Cannes Lions International Festival of Creativity last month, while several of our clients — including British Airways — earned prestigious awards.”

“We continued to reinforce our foundation for growth this quarter and make progress in advancing our strategy to become one of the leading technology-fueled multi-platform media and entertainment companies in America. In another significant step, we have named Brian Lakamp our President of Technology and Digital Ventures,” said Rich Bressler, CCME President and CFO. “We grew overall revenues despite some market challenges, and I am especially pleased with our efforts in International Outdoor and Media+Entertainment. Also, the changes we’ve made in Americas Outdoor position us well for the second half of the year. Underscoring our continuing financial flexibility, the quarter’s $850-million offering of senior notes was well received by the markets. In addition to our debt refinancing activities, which have created the right runway for us to keep focusing on growing our Media+Entertainment and Outdoor businesses, we’ve continued to make good on our commitment to control costs through operational efficiencies.”