Clear Channel Outdoor Holdings, Inc. Reports Results for the Fourth Quarter and Full Year of 2023
"Our fourth quarter consolidated revenue of
"In the year ahead, we remain focused on driving our key initiatives to focus our organization on our higher-margin
"The out-of-home industry is forecasted to deliver healthy growth in 2024, and we are optimistic about our outlook given the improving climate in our largest markets and the strength of our Airports segment, coupled with the investments we have made to expand the range of advertisers we serve. We remain committed to maintaining ample liquidity on our balance sheet and operating in a disciplined manner."
Financial Highlights:
Financial highlights for the fourth 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 Ended |
|
% Change |
Revenue: |
|
|
|
Consolidated Revenue2 |
$ 632.1 |
|
12.4 % |
Excluding movements in FX1,2 |
623.1 |
|
10.8 % |
America Revenue |
298.5 |
|
0.5 % |
Airports Revenue |
111.2 |
|
44.3 % |
Europe-North Revenue |
191.8 |
|
17.8 % |
Excluding movements in FX1 |
184.6 |
|
13.4 % |
|
|
|
|
Net Income: |
|
|
|
Income from Continuing Operations |
25.4 |
|
(76.2) % |
|
|
|
|
Adjusted EBITDA1: |
|
|
|
Adjusted EBITDA1,2 |
190.0 |
|
9.2 % |
Excluding movements in FX1,2 |
188.0 |
|
8.1 % |
America Segment Adjusted EBITDA3 |
136.2 |
|
0.6 % |
Airports Segment Adjusted EBITDA3 |
30.1 |
|
42.7 % |
Europe-North Segment Adjusted EBITDA3 |
52.5 |
|
17.5 % |
Excluding movements in FX1 |
50.5 |
|
13.1 % |
|
|
1 |
This is a non-GAAP financial measure. See "Supplemental Disclosures" section herein for more information. |
2 |
Financial highlights exclude results of discontinued operations. See "Dispositions and Discontinued Operations" section herein for more information. |
3 |
Segment Adjusted EBITDA is a GAAP financial measure. See "Supplemental Disclosures" section herein for more information. |
Dispositions and Discontinued Operations:
During the first three quarters of 2023, we sold our businesses in
On
During 2023, our plan to sell these businesses (collectively comprising our entire Europe-South segment) met the criteria to be reported as discontinued operations. As a result, each of the Europe-South segment businesses has been reclassified to discontinued operations in our financial statements for all periods presented, resulting in changes to the presentation of certain amounts for prior periods. The discussion in this earnings release presents the results of continuing operations and excludes amounts related to discontinued operations for all periods presented, unless otherwise noted.
International Sales Processes:
We have initiated processes to sell the businesses in our Europe-North segment and in
Guidance:
Our expectations for the first quarter and full year of 2024 are as follows:
|
First Quarter of 2024 |
|
% change from prior year |
||||
(in millions) |
Low |
|
High |
|
Low |
|
High |
Consolidated Revenue1,2 |
$ 465 |
|
$ 490 |
|
6 % |
|
12 % |
America |
245 |
|
255 |
|
4 % |
|
8 % |
Airports |
74 |
|
79 |
|
38 % |
|
47 % |
Europe-North1 |
130 |
|
140 |
|
1 % |
|
9 % |
|
|
1 |
Excludes movements in FX |
2 |
Excludes results of discontinued operations |
|
Full Year of 2024 |
|
% change from prior year |
||||
(in millions) |
Low |
|
High |
|
Low |
|
High |
Consolidated Revenue1,2 |
$ 2,200 |
|
$ 2,260 |
|
3 % |
|
6 % |
America |
1,135 |
|
1,165 |
|
3 % |
|
6 % |
Airports |
345 |
|
360 |
|
11 % |
|
16 % |
Europe-North1 |
635 |
|
655 |
|
2 % |
|
6 % |
Loss from Continuing Operations1 |
(131) |
|
(101) |
|
(17) % |
|
(36) % |
Adjusted EBITDA1,2,3 |
550 |
|
585 |
|
3 % |
|
9 % |
Adjusted Funds from Operations ("AFFO")1,2,3 |
75 |
|
100 |
|
(10) % |
|
20 % |
Capital Expenditures2 |
130 |
|
150 |
|
(10) % |
|
4 % |
|
|
1 |
Excludes movements in FX |
2 |
Excludes results of discontinued operations |
3 |
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:
Results provided herein exclude amounts related to discontinued operations for all periods presented.
Revenue:
(In thousands) |
Three Months Ended
|
|
% Change |
|
Year Ended
|
|
% Change |
||||
|
2023 |
|
2022 |
|
|
2023 |
|
2022 |
|
||
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
America |
$ 298,520 |
|
$ 297,069 |
|
0.5 % |
|
$ 1,100,846 |
|
$ 1,105,552 |
|
(0.4) % |
Airports |
111,213 |
|
77,095 |
|
44.3 % |
|
311,605 |
|
256,402 |
|
21.5 % |
Europe-North |
191,779 |
|
162,781 |
|
17.8 % |
|
619,557 |
|
566,119 |
|
9.4 % |
Other |
30,602 |
|
25,302 |
|
20.9 % |
|
95,132 |
|
85,955 |
|
10.7 % |
Consolidated Revenue |
$ 632,114 |
|
$ 562,247 |
|
12.4 % |
|
$ 2,127,140 |
|
$ 2,014,028 |
|
5.6 % |
|
|
|
|
|
|
|
|
|
|
|
|
Revenue excluding movements in FX1: |
|
|
|
|
|
|
|
|
|
|
|
America |
$ 298,520 |
|
$ 297,069 |
|
0.5 % |
|
$ 1,100,846 |
|
$ 1,105,552 |
|
(0.4) % |
Airports |
111,213 |
|
77,095 |
|
44.3 % |
|
311,605 |
|
256,402 |
|
21.5 % |
Europe-North |
184,559 |
|
162,781 |
|
13.4 % |
|
618,716 |
|
566,119 |
|
9.3 % |
Other |
28,791 |
|
25,302 |
|
13.8 % |
|
89,674 |
|
85,955 |
|
4.3 % |
Consolidated Revenue excluding |
$ 623,083 |
|
$ 562,247 |
|
10.8 % |
|
$ 2,120,841 |
|
$ 2,014,028 |
|
5.3 % |
|
1 This is a non-GAAP financial measure. See "Supplemental Disclosures" section herein for more information. |
Revenue for the fourth quarter of 2023, as compared to the same period of 2022:
America : Revenue up 0.5%:
- Billboards revenue up driven by digital deployments and programmatic growth
- Digital revenue up 2.4% to
$114.0 million from$111.3 million - National sales comprised 37.1% of America revenue, compared to 36.7% in the prior year
Airports : Revenue up 44.3%:
- Revenue up across most airports and verticals; increased demand and continued investment in digital infrastructure
- Digital revenue up 57.9% to
$73.1 million from$46.3 million - National sales comprised 58.9% of Airports revenue, compared to 56.0% in the prior year
Europe-North : Revenue up 17.8%; excluding movements in FX, up 13.4%:
- Revenue up across all products and countries, most notably the
U.K. andBelgium , driven by increased demand, deployment of additional digital displays and new contracts - Digital revenue up 22.9% to
$109.7 million from$89.2 million ; digital revenue, excluding movements in FX, up 17.9% to$105.2 million
Other: Revenue up 20.9%; excluding movements in FX, up 13.8%:
- Higher revenue in
Brazil andMexico
Direct Operating and SG&A Expenses1:
(In thousands) |
Three Months Ended
|
|
% Change |
|
Year Ended
|
|
% Change |
||||
|
2023 |
|
2022 |
|
|
2023 |
|
2022 |
|
||
Direct operating and SG&A expenses : |
|||||||||||
America |
$ 162,863 |
|
$ 162,218 |
|
0.4 % |
|
$ 633,021 |
|
$ 607,618 |
|
4.2 % |
Airports |
81,109 |
|
55,998 |
|
44.8 % |
|
243,383 |
|
195,538 |
|
24.5 % |
Europe-North |
140,479 |
|
118,067 |
|
19.0 % |
|
507,185 |
|
462,787 |
|
9.6 % |
Other |
23,380 |
|
18,254 |
|
28.1 % |
|
80,740 |
|
73,625 |
|
9.7 % |
Consolidated Direct operating and |
$ 407,831 |
|
$ 354,537 |
|
15.0 % |
|
$ 1,464,329 |
|
$ 1,339,568 |
|
9.3 % |
|
|
|
|
|
|
|
|
|
|
|
|
Direct operating and SG&A expenses excluding movements in FX3: |
|||||||||||
America |
$ 162,863 |
|
$ 162,218 |
|
0.4 % |
|
$ 633,021 |
|
$ 607,618 |
|
4.2 % |
Airports |
81,109 |
|
55,998 |
|
44.8 % |
|
243,383 |
|
195,538 |
|
24.5 % |
Europe-North |
135,224 |
|
118,067 |
|
14.5 % |
|
509,520 |
|
462,787 |
|
10.1 % |
Other |
22,130 |
|
18,254 |
|
21.2 % |
|
76,632 |
|
73,625 |
|
4.1 % |
Consolidated Direct operating and |
$ 401,326 |
|
$ 354,537 |
|
13.2 % |
|
$ 1,462,556 |
|
$ 1,339,568 |
|
9.2 % |
|
|
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 |
Includes restructuring and other costs of |
3 |
This is a non-GAAP financial measure. See "Supplemental Disclosures" section herein for more information. |
Direct operating and SG&A expenses for the fourth quarter of 2023, as compared to the same period of 2022:
America : Direct operating and SG&A expenses up 0.4%:
- Site lease expense up 2.1% to
$89.5 million from$87.7 million driven by lower rent abatements - Offset by lower property taxes related to a legal settlement, maintenance costs and credit loss expense
Airports : Direct operating and SG&A expenses up 44.8%:
- Site lease expense up 46.4% to
$64.9 million from$44.3 million driven by higher revenue - Higher variable incentive compensation costs
Europe-North : Direct operating and SG&A expenses up 19.0%; excluding movements in FX, up 14.5%:
- Site lease expense up 15.7% to
$63.5 million from$54.9 million ; site lease expense, excluding movements in FX, up 12.0% to$61 .5 million driven by higher revenue - Higher property taxes and compensation costs
Other: Direct operating and SG&A expenses up 28.1%; excluding movements in FX, up 21.2%:
- Higher site lease expense driven by lower rent abatements and higher revenue
- Restructuring costs to reduce scale of
Singapore business following loss of contract
Corporate Expenses1:
(In thousands) |
Three Months Ended
|
|
% Change |
|
Year Ended
|
|
% Change |
||||
|
2023 |
|
2022 |
|
|
2023 |
|
2022 |
|
||
Corporate expenses2 |
$ 42,897 |
|
$ 38,529 |
|
11.3 % |
|
$ 172,324 |
|
$ 161,852 |
|
6.5 % |
Corporate expenses excluding |
42,282 |
|
38,529 |
|
9.7 % |
|
172,123 |
|
161,852 |
|
6.3 % |
|
|
1 |
Certain costs that were historically allocated to the Company's Europe-South segment and reported within SG&A expenses, totaling |
2 |
Includes restructuring and other costs of |
3 |
This is a non-GAAP financial measure. See "Supplemental Disclosures" section herein for more information. |
Corporate expenses for the fourth quarter of 2023, as compared to the same period of 2022, up 11.3%; excluding movements in FX, up 9.7%, driven by higher employee compensation costs.
Income (Loss) from Continuing Operations:
(In thousands) |
Three Months Ended
|
|
% Change |
|
Year Ended
|
|
% Change |
||||
|
2023 |
|
2022 |
|
|
2023 |
|
2022 |
|
||
Income (loss) from continuing |
$ 25,386 |
|
$ 106,496 |
|
(76.2) % |
|
$ (157,107) |
|
$ (47,303) |
|
NM |
|
|
1 |
Percentage changes that are so large as to not be meaningful have been designated as "NM." |
Adjusted EBITDA1:
(In thousands) |
Three Months Ended
|
|
% Change |
|
Year Ended
|
|
% Change |
||||
|
2023 |
|
2022 |
|
|
2023 |
|
2022 |
|
||
Segment Adjusted EBITDA2: |
|||||||||||
America |
$ 136,157 |
|
$ 135,328 |
|
0.6 % |
|
$ 468,370 |
|
$ 499,390 |
|
(6.2) % |
Airports |
30,106 |
|
21,097 |
|
42.7 % |
|
68,226 |
|
60,864 |
|
12.1 % |
Europe-North |
52,453 |
|
44,623 |
|
17.5 % |
|
114,303 |
|
103,654 |
|
10.3 % |
Other |
7,804 |
|
7,048 |
|
10.7 % |
|
14,974 |
|
12,330 |
|
21.4 % |
Total Segment Adjusted EBITDA |
226,520 |
|
208,096 |
|
8.9 % |
|
665,873 |
|
676,238 |
|
(1.5) % |
Adjusted Corporate expenses1,3 |
(36,533) |
|
(34,150) |
|
7.0 % |
|
(130,657) |
|
(131,377) |
|
(0.5) % |
Adjusted EBITDA1 |
$ 189,987 |
|
$ 173,946 |
|
9.2 % |
|
$ 535,216 |
|
$ 544,861 |
|
(1.8) % |
|
|
|
|
|
|
|
|
|
|
|
|
Segment Adjusted EBITDA excluding movements in FX1: |
|||||||||||
America |
$ 136,157 |
|
$ 135,328 |
|
0.6 % |
|
$ 468,370 |
|
$ 499,390 |
|
(6.2) % |
Airports |
30,106 |
|
21,097 |
|
42.7 % |
|
68,226 |
|
60,864 |
|
12.1 % |
Europe-North |
50,465 |
|
44,623 |
|
13.1 % |
|
111,105 |
|
103,654 |
|
7.2 % |
Other |
7,234 |
|
7,048 |
|
2.6 % |
|
13,615 |
|
12,330 |
|
10.4 % |
Total Segment Adjusted EBITDA |
223,962 |
|
208,096 |
|
7.6 % |
|
661,316 |
|
676,238 |
|
(2.2) % |
Adjusted Corporate expenses excluding |
(35,973) |
|
(34,150) |
|
5.3 % |
|
(130,527) |
|
(131,377) |
|
(0.6) % |
Adjusted EBITDA excluding |
$ 187,989 |
|
$ 173,946 |
|
8.1 % |
|
$ 530,789 |
|
$ 544,861 |
|
(2.6) % |
|
|
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. |
3 |
Certain costs that were historically included in Segment Adjusted EBITDA for the Europe-South segment have been deemed to be costs of continuing operations |
AFFO1:
(In thousands) |
Three Months Ended
|
|
% Change |
|
Year Ended
|
|
% Change |
||||
|
2023 |
|
2022 |
|
|
2023 |
|
2022 |
|
||
AFFO1 |
$ 73,207 |
|
$ 56,226 |
|
30.2 % |
|
$ 83,014 |
|
$ 163,987 |
|
(49.4) % |
AFFO excluding movements in FX1 |
71,598 |
|
56,226 |
|
27.3 % |
|
78,561 |
|
163,987 |
|
(52.1) % |
|
|
1 |
This is a non-GAAP financial measure. See "Supplemental Disclosures" section herein for more information. |
Capital Expenditures:
(In thousands) |
Three Months Ended
|
|
% Change |
|
Year Ended
|
|
% Change |
||||
|
2023 |
|
2022 |
|
|
2023 |
|
2022 |
|
||
America |
$ 23,587 |
|
$ 27,278 |
|
(13.5) % |
|
$ 75,431 |
|
$ 79,529 |
|
(5.2) % |
Airports |
9,668 |
|
7,929 |
|
21.9 % |
|
20,050 |
|
25,298 |
|
(20.7) % |
Europe-North |
10,286 |
|
11,580 |
|
(11.2) % |
|
29,284 |
|
34,025 |
|
(13.9) % |
Other |
1,887 |
|
2,044 |
|
(7.7) % |
|
6,421 |
|
4,571 |
|
40.5 % |
Corporate |
2,922 |
|
3,249 |
|
(10.1) % |
|
13,600 |
|
12,245 |
|
11.1 % |
Consolidated capital expenditures |
$ 48,350 |
|
$ 52,080 |
|
(7.2) % |
|
$ 144,786 |
|
$ 155,668 |
|
(7.0) % |
Markets and Displays:
As of
|
Number of digital |
|
Total number of displays as of |
||||
|
|
Digital |
|
Printed |
|
Total |
|
America1: |
|
|
|
|
|
|
|
Billboards2 |
30 |
|
1,831 |
|
33,831 |
|
35,662 |
Other displays3 |
(6) |
|
606 |
|
13,306 |
|
13,912 |
Airports4 |
(70) |
|
2,453 |
|
10,426 |
|
12,879 |
Europe-North |
98 |
|
15,256 |
|
241,590 |
|
256,846 |
Other |
3 |
|
1,223 |
|
5,402 |
|
6,625 |
Total displays |
55 |
|
21,369 |
|
304,555 |
|
325,924 |
|
|
1 |
As of |
2 |
Billboards includes bulletins, posters, spectaculars and wallscapes. |
3 |
Other displays includes street furniture and transit displays. |
4 |
As of |
As the businesses in the Europe-South segment are considered discontinued operations, results of these businesses are now reported as a separate component of Consolidated net income (loss) in the CCIBV Consolidated Statements of Income (Loss) for all periods presented and are excluded from the discussion below.
CCIBV results from continuing operations for the fourth quarter of 2023 as compared to the same period of 2022 are as follows:
- CCIBV revenue increased 17.0% to $198.1 million from
$169.3 million . Excluding the$7.4 million impact of movements in FX, CCIBV revenue increased 12.6% driven by higher revenue in our Europe-North segment, as described in the above "Results" section of this earnings release.Singapore represented approximately 3% of CCIBV revenue from continuing operations for the three months endedDecember 31, 2023 . - CCIBV operating income was
$31.2 million compared to$22.1 million in the same period of 2022.
Liquidity and Financial Position:
Cash and Cash Equivalents:
As of
The following table summarizes our cash flows for the year ended
(In thousands) |
Year Ended
|
Net cash provided by operating activities |
$ 31,254 |
Net cash used for investing activities1 |
(119,573) |
Net cash provided by financing activities |
45,638 |
Effect of exchange rate changes on cash, cash equivalents and restricted cash |
4,540 |
Net decrease in cash, cash equivalents and restricted cash |
$ (38,141) |
|
|
Cash paid for interest |
$ 404,398 |
Cash paid for income taxes, net of refunds |
$ 10,346 |
|
|
1 |
Includes proceeds from the disposition of businesses, net of costs to sell and cash sold, of |
Debt:
We anticipate having cash interest payment obligations of approximately $448 million in 2024 and $408 million in 2025, assuming that we do not refinance or incur additional debt. The expected increase in cash interest payments in 2024 is largely due to differences in the timing of interest payments between the newly-issued CCOH 9.000% Senior Notes and the refinanced portion of the Term Loan.
Our next debt maturity is in
TABLE 1 - Financial Highlights of |
|||||||
|
|||||||
(In thousands) |
Three Months Ended
|
|
Year Ended
|
||||
|
2023 |
|
2022 |
|
2023 |
|
2022 |
Revenue |
$ 632,114 |
|
$ 562,247 |
|
$ 2,127,140 |
|
$ 2,014,028 |
Operating expenses: |
|
|
|
|
|
|
|
Direct operating expenses1 |
302,480 |
|
260,637 |
|
1,092,686 |
|
981,979 |
Selling, general and administrative expenses1 |
105,351 |
|
93,900 |
|
371,643 |
|
357,589 |
Corporate expenses1 |
42,897 |
|
38,529 |
|
172,324 |
|
161,852 |
Depreciation and amortization |
55,419 |
|
65,483 |
|
241,828 |
|
217,835 |
Impairment charges |
— |
|
— |
|
— |
|
22,676 |
Other operating expense, net |
1,647 |
|
1,457 |
|
11,769 |
|
2,133 |
Operating income |
124,320 |
|
102,241 |
|
236,890 |
|
269,964 |
Interest expense, net |
(106,810) |
|
(98,895) |
|
(421,434) |
|
(360,599) |
Gain on extinguishment of debt |
— |
|
— |
|
3,817 |
|
— |
Other income (expense), net |
2,681 |
|
23,203 |
|
6,403 |
|
(37,060) |
Income (loss) from continuing operations before income taxes |
20,191 |
|
26,549 |
|
(174,324) |
|
(127,695) |
Income tax benefit attributable to continuing operations |
5,195 |
|
79,947 |
|
17,217 |
|
80,392 |
Income (loss) from continuing operations |
25,386 |
|
106,496 |
|
(157,107) |
|
(47,303) |
Income (loss) from discontinued operations2 |
617 |
|
(7,058) |
|
(151,709) |
|
(47,085) |
Consolidated net income (loss) |
26,003 |
|
99,438 |
|
(308,816) |
|
(94,388) |
Less: Net income attributable to noncontrolling interests |
1,226 |
|
753 |
|
2,106 |
|
2,216 |
Net income (loss) attributable to the Company |
$ 24,777 |
|
$ 98,685 |
|
$ (310,922) |
|
$ (96,604) |
|
|
1 |
Excludes depreciation and amortization. |
2 |
Loss from discontinued operations for the year ended |
Weighted Average Shares Outstanding |
|||||||
|
|||||||
(In thousands) |
Three Months Ended
|
|
Year Ended
|
||||
|
2023 |
|
2022 |
|
2023 |
|
2022 |
Weighted average common shares outstanding – Basic |
483,027 |
|
476,069 |
|
481,727 |
|
474,362 |
Weighted average common shares outstanding – Diluted |
489,132 |
|
481,664 |
|
481,727 |
|
474,362 |
TABLE 2 - Selected Balance Sheet Information: |
|||
|
|||
(In thousands) |
|
|
|
Cash and cash equivalents |
$ 251,652 |
|
$ 282,232 |
Total current assets1 |
957,401 |
|
1,120,916 |
Net property, plant and equipment |
666,344 |
|
672,113 |
Total assets2 |
4,722,475 |
|
5,086,011 |
Current liabilities (excluding current portion of long-term debt)3 |
883,116 |
|
1,100,337 |
Long-term debt (including current portion of long-term debt) |
5,631,903 |
|
5,561,901 |
Stockholders' deficit |
(3,450,743) |
|
(3,262,806) |
|
|
1 |
Total current assets includes assets of discontinued operations of |
2 |
Total assets includes assets of discontinued operations of |
3 |
Current liabilities includes liabilities of discontinued operations of |
TABLE 3 - Total Debt: |
|||
|
|||
(In thousands) |
|
|
|
Debt: |
|
|
|
Term Loan Facility Due 20261,2 |
$ 1,260,000 |
|
$ 1,935,000 |
Revolving Credit Facility Due 20263 |
— |
|
— |
Receivables-Based Credit Facility Due 20264 |
— |
|
— |
|
1,250,000 |
|
1,250,000 |
|
750,000 |
|
— |
|
995,000 |
|
1,000,000 |
|
1,040,000 |
|
1,050,000 |
|
375,000 |
|
375,000 |
Finance leases |
4,202 |
|
4,682 |
Original issue discount |
(2,690) |
|
(5,596) |
Long-term debt fees |
(39,609) |
|
(47,185) |
Total debt |
5,631,903 |
|
5,561,901 |
Less: Cash and cash equivalents |
(251,652) |
|
(282,232) |
Net debt |
$ 5,380,251 |
|
$ 5,279,669 |
|
|
1 |
The term loans under the Term Loan Facility amortize in equal quarterly installments in an aggregate annual amount equal to 1.00% of the original principal amount of such term loans, with the balance being payable on |
2 |
On |
3 |
In |
4 |
In |
5 |
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 income (loss) from continuing operations, plus: income tax expense (benefit) attributable to continuing operations; all non-operating expenses (income), including other expense (income), gain on extinguishment of debt 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 interests. The Company defines AFFO as FFO excluding discontinued operations and before the following adjustments for continuing operations: 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 loss from continuing operations 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 Income (Loss) from Continuing Operations to Adjusted EBITDA |
|||||||
|
|||||||
|
Three Months Ended
|
|
Year Ended
|
||||
(in thousands) |
2023 |
|
2022 |
|
2023 |
|
2022 |
Income (loss) from continuing operations |
$ 25,386 |
|
$ 106,496 |
|
$ (157,107) |
|
$ (47,303) |
Adjustments: |
|
|
|
|
|
|
|
Income tax benefit attributable to continuing operations |
(5,195) |
|
(79,947) |
|
(17,217) |
|
(80,392) |
Other (income) expense, net |
(2,681) |
|
(23,203) |
|
(6,403) |
|
37,060 |
Gain on extinguishment of debt |
— |
|
— |
|
(3,817) |
|
— |
Interest expense, net |
106,810 |
|
98,895 |
|
421,434 |
|
360,599 |
Other operating expense, net |
1,647 |
|
1,457 |
|
11,769 |
|
2,133 |
Impairment charges |
— |
|
— |
|
— |
|
22,676 |
Depreciation and amortization |
55,419 |
|
65,483 |
|
241,828 |
|
217,835 |
Share-based compensation |
5,196 |
|
4,121 |
|
20,330 |
|
20,512 |
Restructuring and other costs1 |
3,405 |
|
644 |
|
24,399 |
|
11,741 |
Adjusted EBITDA |
$ 189,987 |
|
$ 173,946 |
|
$ 535,216 |
|
$ 544,861 |
|
|
1 |
Restructuring and other costs during the years ended |
Reconciliation of Corporate Expenses to Adjusted Corporate Expenses |
|||||||
|
|||||||
|
Three Months Ended
|
|
Year Ended
|
||||
(in thousands) |
2023 |
|
2022 |
|
2023 |
|
2022 |
Corporate expenses |
$ (42,897) |
|
$ (38,529) |
|
$ (172,324) |
|
$ (161,852) |
Share-based compensation |
5,196 |
|
4,121 |
|
20,330 |
|
20,512 |
Restructuring and other costs1 |
1,168 |
|
258 |
|
21,337 |
|
9,963 |
Adjusted Corporate expenses |
$ (36,533) |
|
$ (34,150) |
|
$ (130,657) |
|
$ (131,377) |
|
|
1 |
Restructuring and other costs during the years ended |
Reconciliation of Consolidated Net Income (Loss) to FFO and AFFO |
|||||||
|
|||||||
|
Three Months Ended
|
|
Year Ended
|
||||
(in thousands) |
2023 |
|
2022 |
|
2023 |
|
2022 |
Consolidated net income (loss) |
$ 26,003 |
|
$ 99,438 |
|
$ (308,816) |
|
$ (94,388) |
Depreciation and amortization of real estate |
48,738 |
|
66,271 |
|
226,724 |
|
217,856 |
Net loss on disposition of real estate (excludes condemnation proceeds)1 |
10,229 |
|
984 |
|
108,322 |
|
8,066 |
Impairment of real estate |
— |
|
— |
|
— |
|
22,676 |
Adjustment for unconsolidated affiliates and non-controlling interests |
(1,858) |
|
(1,055) |
|
(3,849) |
|
(4,219) |
Funds From Operations (FFO) |
83,112 |
|
165,638 |
|
22,381 |
|
149,991 |
Less: FFO from discontinued operations |
12,913 |
|
1,043 |
|
(34,759) |
|
(19,503) |
FFO from continuing operations |
70,199 |
|
164,595 |
|
57,140 |
|
169,494 |
Capital expenditures–maintenance |
(12,110) |
|
(17,526) |
|
(44,977) |
|
(44,983) |
Straight-line rent effect |
617 |
|
814 |
|
4,730 |
|
1,877 |
Depreciation and amortization of non-real estate |
7,457 |
|
7,379 |
|
29,542 |
|
30,809 |
Gain on extinguishment of debt |
— |
|
— |
|
(3,817) |
|
— |
Amortization of deferred financing costs and discounts |
2,878 |
|
2,855 |
|
11,666 |
|
11,236 |
Share-based compensation |
5,196 |
|
4,121 |
|
20,330 |
|
20,512 |
Deferred taxes |
(10,580) |
|
(85,037) |
|
(29,044) |
|
(88,975) |
Restructuring and other costs2 |
3,405 |
|
644 |
|
24,399 |
|
11,741 |
Transaction costs |
6,555 |
|
871 |
|
13,262 |
|
10,482 |
Foreign exchange transaction (gain) loss |
(4,450) |
|
(23,301) |
|
(11,895) |
|
39,666 |
Other items3 |
4,040 |
|
811 |
|
11,678 |
|
2,128 |
Adjusted Funds From Operations (AFFO) |
$ 73,207 |
|
$ 56,226 |
|
$ 83,014 |
|
$ 163,987 |
|
|
1 |
Net loss on disposition of real estate for the three months ended |
2 |
Restructuring and other costs during the years ended |
3 |
Other items for the year ended |
Reconciliation of Loss from Continuing Operations Guidance1 to Adjusted EBITDA Guidance1 |
|||
|
|||
|
Full Year of 2024 |
||
(in millions) |
Low |
|
High |
Loss from continuing operations |
$ (131) |
|
$ (101) |
Adjustments: |
|
|
|
Income tax expense attributable to continuing operations |
9 |
|
9 |
Other expense, net |
1 |
|
1 |
Interest expense, net |
422 |
|
427 |
Other operating expense, net |
13 |
|
13 |
Depreciation and amortization |
215 |
|
215 |
Share-based compensation |
16 |
|
16 |
Restructuring and other costs |
5 |
|
5 |
Adjusted EBITDA |
$ 550 |
|
$ 585 |
|
|
1 |
Guidance excludes movements in FX |
Reconciliation of Loss from Continuing Operations Guidance1 to AFFO Guidance1 |
|||
|
|||
|
Full Year of 2024 |
||
(in millions) |
Low |
|
High |
Loss from continuing operations |
$ (131) |
|
$ (101) |
Depreciation and amortization of real estate |
184 |
|
184 |
Net gain on disposition of real estate (excludes condemnation proceeds) |
(1) |
|
(1) |
Adjustment for unconsolidated affiliates and non-controlling interests |
(6) |
|
(6) |
FFO from continuing operations |
46 |
|
76 |
Capital expenditures–maintenance |
(42) |
|
(47) |
Straight-line rent effect |
(8) |
|
(8) |
Depreciation and amortization of non-real estate |
31 |
|
31 |
Amortization of deferred financing costs and discounts |
11 |
|
11 |
Share-based compensation |
16 |
|
16 |
Deferred taxes |
(7) |
|
(7) |
Restructuring and other costs |
5 |
|
5 |
Other items |
23 |
|
23 |
Adjusted Funds From Operations (AFFO) |
$ 75 |
|
$ 100 |
|
|
1 |
Guidance excludes movements in FX. |
Conference Call
The Company will host a conference call to discuss these results on
About
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
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: continued economic uncertainty, an economic slowdown or a recession; our ability to service our debt obligations and to fund our operations, business strategy and capital expenditures; the impact of our substantial indebtedness, including the effect of our leverage on our financial position and earnings; 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; our ability to obtain and renew key contracts with municipalities, transit authorities and private landlords; competition; regulations and consumer concerns regarding privacy, digital services, data protection and the use of artificial intelligence; a breach of our information security measures; legislative or regulatory requirements; restrictions on out-of-home advertising of certain products; environmental, health, safety and land use laws and regulations, as well as various actual and proposed environmental, social and governance policies, regulations and disclosure standards; the impact of the processes to sell the businesses in our Europe-North segment and in
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