Ladies and gentlemen, thank you for standing by. Welcome to the 2015 Fourth Quarter and Full-Year Earnings Conference Call for iHeartMedia Inc. and Clear Channel Outdoor Holdings Inc. [Operator Instructions]. As a reminder this conference is being recorded. I'll now turn the conference over to your host Brian Coleman, Senior Vice President and Treasurer. Please go ahead, sir

Good morning and thank you for joining our 2015 fourth-quarter and year-end earnings call. On the call with me today is Rich Bressler, President, Chief Operating Officer and Chief Financial Officer. We'll provide an overview of the fourth-quarter and full-year 2015 financial and operating performances of iHeartMedia Inc. and its subsidiaries, iHeartMedia Capital One LLC, iHeart Communications Inc., Clear Channel Outdoor Holdings Inc. and Clear Channel International BD. For purposes of this call when we describe the financial and operating performance of iHeartMedia Inc., that also describes the performance of its subsidiaries, iHeart Capital One LLC and iHeart Communications Inc. After an introduction and review of the quarter and full year, we'll open up the line for questions. Before we begin I would like to remind everyone that this conference call includes forward-looking statements. These statements include Management's expectations, beliefs and projections about performance and represent Management's current beliefs. There can be no assurance that Management's expectations, beliefs or projections will be achieved or that actual results will not differ from expectations. Please review the statements of risk contained in our earnings press releases and filings with the SEC. Pacing data will also be mentioned during the call. For those of you not familiar with pacing data it reflects revenues booked at a specific date versus the comparable date in a prior period and may or may not reflect the actual revenue growth rate at the end of period. During today's call we will provide certain performance measures that do not conform to generally accepted accounting principles. We provided schedules that reconcile these non-GAAP measures with our reported results on a GAAP basis as part of our earnings press releases and a slide presentation which can be found on the investor section of our website iheartmedia.com and clearchanneloutdoor.com. Please note that our two earnings releases and the slide presentation provide a detailed breakdown of foreign exchange and non-cash compensation expense items as well as segment revenues and OIBDAN. Please note that the information provided on this call speaks only to Management's views as of today, February 25, and may no longer be accurate at the time of the replay. And with that I'll now turn the call over to Rich Bressler.

Thank you, Brian. And good morning everybody. First I'd like to take this opportunity to introduce Eileen MacLachlan, our new Vice President of Investor Relations. Eileen's spent 14 years at the Vivendi and Sebrums and is a well-respected and seasoned IR Executive. We are excited to have her join the team. Now returning to the matters at hand, once again as Brian mentioned to you, you can find our presentation slides on our website. Let me just start off by saying that we're very proud of the operating performance of our Businesses in 2015, which is evidence of the progress we're making in the transformation of this Company and that can be seen in our financial results. In 2015 on an FX adjusted basis we delivered four quarters of top-line growth at each of our segments, iHeart Media, Americas Outdoor and International Outdoor, while consolidated OIBDAN was up also for the year. In fact last quarter was Americas Outdoor's highest in revenue and OIBDAN since 2008. Our advertising revenue growth rate continues to outperform the U.S. media industry outside of the big digital players such as Facebook and Google. Driving these solid operating results is our progress in transforming ourselves into a digital-savvy multi-platform and data rich company. We have grown momentum across all of our Businesses against a backdrop of tight operating and financial discipline. And we continue to invest in new technologies that equip us to put our assets to work for advertising in agency partners in new and creative ways. In short the investments we have made in our core strategic initiatives are paying off and that enables us to keep building on the power of sound, the power of outdoor, the power of social, the power social, the power of data, and the power of mobile…

Thank you. [Operator Instructions] And for our first question we’ll go to Jason Kim with Goldman Sachs. Go ahead please.

Good morning, guys, thanks for taking my questions. The first couple of operational questions for Rich. What's your outlook for political revenue this year? How does it compare to the past election cycles from where you see things today? And the radio margins were better this quarter -- and I know you don't give formal guidance, but I'd be curious to hear what the major puts and takes for your margin profile should be in the upcoming year in terms of new investments you may make or getting the benefits of your past initiatives?

Great, thanks, Jason. Good morning, everybody. On political revenue for 2016, a couple of different things. First we don't -- no surprise we don't provide specific guidance on revenue. We are extremely confident in our political sales team down in DC. We hired Kenny Day a number of months ago, I think we mentioned that to you all you guys. He and the rest of the team are just doing an outstanding job. Just on a number's basis, just to give you some sense of comparison, in 2012, which was a presidential year, we had approximately $105 million of consolidated political revenue. In 2014, which was a congressional year, we had about $87 million of political revenue. Obviously, we all love the races that are going on -- and whether it's Trump or Cruz or Rubio or Sanders or Clinton, that bodes well for all of us. Additionally, as we go into this year, the power of everything we have with data targeting, we're able to identify -- and this is, as we continue to invest in the business, we now have the ability to target everybody, to identify exact voters. So we now have the power data targeting. We've now got -- as always, we have the power frequency. We can make the most important issues for the candidates’ top-in-line for the voters. In addition to that, as always, we've got the power of live, just as we've got our broadcast stations. And we've got 20,000 events a year, and we've got our morning shows. And we've got our top DO updates. We have strength of traffic and weather, which you saw come through in the numbers also. Again, particularly with the enhanced capabilities we have, the races that are going on and the management team led by Kenny and his team, we feel very, very good about this year going into political. And in the first quarter, as I went through the script, you see we saw the benefit from that already.

Okay. Then maybe some questions for Brian. Obviously, a lot of chatter and news flow around your balance sheets. You've really strengthened your liquidity position in the fourth quarter, and even much more in the first quarter with asset sales at Outdoor. Liquidity is not an issue anymore, from what we can tell, which was the focus of the call last quarter. So I would love to get your view about the approach to a various issuance in your capital structure now with all of the liquidity raises you've had in the past couple of months. What is your focus and priority as related to your balance sheet for the balance of the year?

Jason, great question. I don't know that it's changed a lot. Obviously, liquidity continues to be important, and we have executed under certain levers between our last conference call and today. So we feel pretty good about that. We felt good in Q3 because we knew the levers existed. We feel good today because we've executed upon those levers. But I think what we've talked in the past -- what we've talked about in the past hasn't really changed. We want to be opportunistic. We think the markets are somewhat dislocated and there are opportunities across our capital structure. We want to be thoughtful about it. In the past when we've had similar situations, we used excess liquidity to repurchase securities kind of on a one-off basis privately or bilaterally. We'll continue to think about it and perhaps there are bigger opportunities or perhaps we'll go back to what we've done in the past. It's hard to say specifically what we're thinking about. Nothing's been determined. We have open dialogue with our advisors, with our investors. And we'll continue to pursue what we think is the most opportunistic and beneficial path for the Company.

Yes, and let me just add one thing on that. Look, the most important thing we have, we've got a very, very strong operating business. You see it manifest itself in the numbers. If you go back a couple year period of time, when I started speaking on these calls and when Bob and I came in and the rest of the management team, you saw that we gave a bunch of operating statistics so you could measure our progress. Then, we talked about it manifesting itself into the results. You now see it -- you're starting to see it in the financial results with on the iHeart side, particularly this quarter, with the 5% overall revenue growth and 8% of ex-political. That really is -- we continue to focus on that. And at the same time, there are things like we had in the fourth quarter, the non-strategic asset sales. Like we were able to sell some domestic U.S. assets, non-strategic. I think if you read all our filings, it's about an implied multiple of 12 1/2. Good deal for the purchaser; good deal for all of us, starting with our shareholders. Again that's our job, and you'll see -- and if you go back over time, we are always looking at our cost to capital and always looking into our balance sheet more effectively. We'll continue to do when we do deals that are good for our shareholders.

Fair enough. Thank you.

Thank you, our next question will come from Avi Steiner with JPMorgan, please go ahead.

Thanks. I want to start a couple of business questions first and then go back to the balance sheet. Just on the business side, I know you've won some contracts and lost some contracts. I'm wondering if you can talk specifically about the larger one you lost in London. I think it turned over at the start of year. Just how we think about the impact from that? And if you don't want to be specific about that, -- I know you don't give guidance, but is the Q1 pacing rate reflective of that contract loss and that's how we think about the impact?

So a couple of things. Avi, thanks for the question. First of all on pacings, let me just give you a quick update, just very, very real time. We're actually -- as of today, we're actually up slightly on Q1 pacing. So actually just slightly positive at 0.1%. Again, back to my -- this is a real-time example of when I say on every call, pacings are really nothing more than a given -- at any given point in time. So you always have to be careful about them. In terms of -- direct to your question, contracts turnover, come and go. It's the nature of the game. We've won some; we've lost some. The larger contracts that come up for renewal are typically very competitive. It's common industry that the economics are typically less favorable to the operator, particularly in the early years. And on the contract you referred to, specifically, (technical difficulty) deal we put on the table, the best deal for our shareholders. And our return criteria and our job to all you guys as shareholders, would not have been met, quite frankly, if we did any higher. It was a very, very competitive bidding process. Just a reminder, we've got an incredibly strong footprint across our major markets. William and his team -- William Eccleshare and his team have just done, and continue to do, a phenomenal job. Ttrong in UK, France, Italy and just in the sense, if you kind of look at the overall year, the biggest and probably affect our pacings coming to this year, quite frankly, has been China. I think I mentioned it in the remarks that the Chinese New Year, offices and our customers are closed over the holiday. So as they've started to reopen, I think you see that…

Terrific. I'm actually going to go the balance sheet side now. Kind of dovetailing on some earlier questions and liquidity you have and flexibility, how do you think about balancing the market -- the opportunities that the market dislocations have provided you versus the very large 2019 stack?

Well, I think we have opportunities across our capital structure and even in the Outdoor notes and our secured debt. There's lots of things that we can take a look at. We are not going to generate enough liquidity to pay off the 2019 maturity. So that needs to be a refinancing candidate or refinancing end and repayment candidate. I do think that at the end of the day, we've got to look at what is the biggest return to the Company, and balancing that with the need to not create a liquidity event where otherwise we didn't have one. Again, I do want to direct any kind of message to the market on what we're looking at, other than to say want to be thoughtful and we want to capture what is in the best interest of the Company and its stakeholders.

Fair enough. Couple more here, somewhat Outdoor related, from two different perspectives. One, maybe talk about how broader media may or may not fit into anything? I know you don't want to telegraph anything to the market. Two, are you done with non-strategic asset sales, or could there be more at Outdoor given our read of your potential abilities there?

Let me just start it and turn it over to Brian on the first one. But on the second one, Avi, a little bit what said earlier. Again, we're always looking to maximize value to our shareholders. Just again, back to the last deal we just did or you go back to when we sold the half interest in Australia that we had at iHeartMedia business. If you can do that deal at approximately 12 1/2 times for non-strategic assets, is something that is in the best interest of our shareholder, so clearly we're always looking to maximize the value and improve our balance sheet. And we'll continue to look to do that.

Yes, I'll broaden the question beyond broader media. But I think just to hit broader media, we'd say that the Company continues to evaluate opportunities to strengthen its balance sheet in compliance with its financing arrangements. So we want to use all the tools available to us. What all that ends up looking like, who knows. Nothing has been determined and we can't really provide that kind of guidance. But you should assume the Company will use the tools that are available to it to be opportunistic and to deliver the best transaction if there is a transaction to the Company stakeholders.

I appreciate that answer. I will end it one I think is an easy one. Could you just discuss why you drew a little more under the receivables-based facility? I was kind of modeling it a little bit differently. Is that related, perhaps, to Q1 seasonality? And then lastly, related to that, did capacity change under the receivables-based facility? And thank you for taking the questions.

You bet. Avi, somehow I knew you would ask that question. I think a couple of things about the ABL. The borrowing base changes periodically, so the availability of what we can draw changes periodically. We did have some cash at the end of year. Most of the distributions and increasing cash actually occurred after the end of the year. I mean what we borrow under the ABL facility, we typically do so under 30-day LIBOR contract. So there's a multitude of reasons why we could have borrowings or haven't repayed borrowings. Another thing to consider is how those borrowings are characterized. If we utilize borrowings under the ABL to fund CapEx, they may hit a different basket than another one. If we repay it, that characterization may be lost. So I wouldn't assume just because a dollar of cash is excess liquidity at the parent, we're going to paydown the ABL. I think the way to think about it is, they are both forces of liquidity, cash on our balance sheet and availability under our ABL. We get the question, and it's not a bad question. But you shouldn't look at it as just, wow, the Company had cash, why didn't they pay off the ABL? They can save LIBOR plus 200. Well, LIBOR plus 200 is pretty cheap capital in our capital structure. I want to mindful of everything, but there may be reasons to keep the ABL drawn or to utilize it. Those are reasons existed in the fourth quarter.

Thank you. Our next question is from Lance Vitanza with CRT Capital Group. Go ahead please.

Thanks and great job on the radio side. I actually had a couple of questions on the Outdoor side, some of them have been answered. On the Americas' side, you didn't get the flow-through to EBITDA that I would've expected, at least from the incremental revenue. And I'm wondering if that was a structural issue or more just a function of the geography of products that by which the incremental revenues happened to have been generated in this particular quarter?

Yes, thanks, Lance. A couple of things, first of all, the real reason we didn't get the flow-troughs -- because when you look at the Americas -- just as a reminder we report the Americas combined with Latin America. You might remember that we now move that, and it's consolidated in the Americas. That's really the reasons that you didn't get the flow -- one of the reasons you didn't get the flow-through, because we did get flow-through on the U.S. business. Then the other thing is, as we've -- and you've seen the performance pick up. And again, I continue to be very, very happy -- Bob and I do -- with the Management team. And you've seen the improvement in national sales, and we've made some investments on the national sales line. You're seeing the benefit on the revenue line. I expect we'll continue to see that benefit going forward.

Okay. Then on iHeart, looked like the total listener hours were up kind of a pace with your growth in registered users. I'm wondering if there are patterns you've been able to discern with respect to individual usage. In other words, at what point do a new user's listener hours tend to peak? Is there a ramp to sort of peak usage for the individual user, or does it start high and then falloff? Then I guess really what I'm trying to get at is, I would assume that it would be important for you to basically have each individual user listen more. And I'm wondering if that's the case, number one -- it's just a little hard to tell just from the growth numbers without knowing the trajectory. Then, are there specific things that you can do that would target growing the hours listened per user as opposed to just growing new users?

Well look, we don't discuss and quite frankly and forecast and even look at our business per se on individual basis. Just let me just make a couple of comments about -- and I think I didn't answer fully one of the early questions in terms of margins on the iHeart Business. Cume [ph] is up, registrations up, TLH is up. Look, we've talked about and we've talked about in the previous calls and we've talked about our broadcast listening is up close to double digits in terms of total listening on a year-over-year basis. That's broadcast. Digital's up significantly higher than that, roughly about10% on broadcast. We're up more, as I mentioned, on digital. The overall numbers on the power of sound are up significantly. I think streaming is up well over 50%, podcasts are up over 70%, concerts and festivals are up over 30%. Then, you just -- quite frankly there's -- and we've talked about what we focus on is what's important from an advertiser standpoint. Just as a reminder, I covered this a little bit in the call, there's three huge reach mediums in the United States. There's Facebook, Google and ourselves, and we're the biggest of the three at over 250 million people that listen. And again, you look at what's happened -- we are the last reach medium on the radio side. Just worth pointing that out again. I think I touched upon that in the script. We cannot overstate this. What's happened used to be through all the years we've all been in the business, television was the reach medium. Today we reach approximately 92%, 93% of millennials in the United States. If you go back to when I started in the business in the early 1970s, radio reached 92%, 93% of millennials,…

Thanks for that. I just have one more, and that's back actually on the ABL. Brian, I've heard your answer the last question. But specifically, I guess for me, are you worried about losing access to the facility down the line? And did that play into why you decided to keep the balance outstanding as opposed to retaining it?

No, I think we're strategic in the sense of how we characterized the debt. And it's an expensive cost of capital, so we have the flexibility in how we view our liquidity position. We expect to comply with our debt facilities. And we expect the lenders under the credit facility to honor their obligation. That's not a consideration at this point. I would like to do a time check at this point. We've gone over an hour, but I realize the comments on the front end were long. It's a year-end and we had a lot of stuff wanted to say, so let's take another question or two, operator, if we can, and then we'll probably need to cut it off.

All right thank you then we'll go next to Marci Ryvicker with Wells Fargo, go ahead please.

I'll be quick. Clarification on the pace for Americas. Does that include or exclude the boards that were sold? So for example that 1.4% pace apples to apples with last year, or is it just an as-reported number?

I'll even be shorter on my answer. Yes, it excludes it, it is apples-to-apples.

Okay, and then -- but then last year -- so, relative to last year it's apples-to-apples, or does last year still those boards in?

Apples-to-apples.

Okay, and then last one. Are you seeing any slowdown in the ad environment across your portfolio? I think people are just worried about the overall macro and that this time around ad-sensitive media might be late cycle instead of early cycle, so just taking a gut check what you're seeing.

I gave out the pacing information, which is I think evidence of everything we're seeing. But clearly things are -- and we've been seeing this trend for some time. But clearly, based later cycle than we've seen before. You look at our businesses -- again, I won't go over everything -- do everything I just said in terms of on the radio side of the business. But again, we are such an effective medium. I pointed out all the things that are happening on the television side. You look at everything that's happening in our Company on the digital side. One of the things I didn't mention is even like our demographics. I don't think you know, our average age user is right on top of digital. We're about 44 years old. I think digital is around 42, 43 years old. By the way, TV and newspapers and everything is well over 50. So to some extent, yes, you have what's out there in the environment, but again we are so under-monetized, we're so cost-effective, we have all the trends going in the right direction. Our ability to target information at digital and then expand and extrapolated at scale because of our size and our reach and our position, which each of the demographics out there -- again with the advertising environment out there, we're so cost-effective, I continue to be optimistic about everything going forward. And on the Outdoor side, again, we had -- as you look at the new management team, particularly in the US, and as I've been very transparent of that in the past. Prior to this team we did not do a good job of executing, particularly on the national side. So I think we still have some ground to make up as you go forward.

Operator, one more question, please.

Thank you that will come from Aaron Watts with Deutsche Bank, go ahead please.

Thanks for squeezing me in, guys. Two questions for me. You're outperforming on the media side versus the industry. I think we have a decent sense of margins on the terrestrial kind of core station side. But curious about profitability on the events and the digital portion of your business. Are they making positive contributions to the bottom line? I know, Rich, you mentioned the CRB ruling. Will that help get the digital business to be more of a positive contributor in the future if it's not already?

Yes, so first let's go to, really to your first question. Everything, -- and again just consistent with who I've decided to vet. We look at it -- whether you're a consumer or an advertiser, what you are looking for is you are really looking to drive bottom-line results. You're looking to drive ROI. So all the lines have really -- have started -- I've talked about this in the past -- have blurred in the past. They continue to blur, whether national, local lines, advertises looking at digital broadcast, they look at everything as one. And they're really looking to get a return on their money. That's why I keep emphasizing the ROI, the under-monetization, and the 6-to-1 that we're getting. And just think about in terms of the events. We don't look at the events, at all, as separate profit centers. They have gigantic marketing opportunities for us. They're advertising-based events. If you look at the number of advertisers and the growth we've had in advertising on national and on local and the number people that first advertise with us around an event, so the effectiveness of the media, and then became advertisers the rest of the year, away from the event, that's really -- that's the reason to have these events. Again, you look at something like the 80's Festival that we were just at last weekend in LA, we're always going to look to have events where we can occupy something that doesn't exist before, where we can attract something that's good for our consumers and the demands there, and something that's good for advertises and a focal point to sell around and a chance to market our product around the event. On the CRB, our goal was always to help create -- and it has…

Thank you.

Thank you. Ladies and gentlemen, that does conclude our conference for today. Thank you for your participation and choosing AT&T Executive Teleconference. You may now disconnect.