Ladies and gentlemen, thank you for standing by. Welcome to the 2016 Second Quarter Earnings Conference Call for iHeartMedia and Clear Channel Outdoor Holdings, Inc. At this time all participants are in a listen-only mode. Later we will conduct a question-and-answer session. [Operator Instructions] As a reminder today's call is being recorded. I will now turn the conference to your host, Eileen McLaughlin, Vice President, Investor Relations. Please go ahead.

And thank you for joining our 2016 Second Quarter Earnings Call. On the call today are Rich Bressler, President, Chief Operating Officer and Chief Financial Officer; and Brian Coleman, Senior Vice President and Treasurer. We'll provide an overview of the second quarter 2016 financial and operating performances of iHeartMedia, Inc. and its subsidiaries, iHeartMedia Capital I, LLC, and iHeartCommunications, Inc., Clear Channel Outdoor Holdings, Inc. and Clear Channel International B.V. For purposes of this call when we describe the financial and operating performance of iHeartMedia, Inc., that also describes the performance of its subsidiaries: iHeartMedia Capital I, LLC, and iHeartCommunications, Inc. After an introduction and a review of the quarter, we'll open up the line for questions. Before we begin, I'd like to remind everyone that this conference call includes forward looking-statements. These statements include management's expectations, beliefs and projection of our 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 expectation. Please review the statements of risks contained in our earnings press release and filings with the SEC. Pacing data will also be mentioned during the call. For those of you not familiar with the pacing data, it reflects orders booked at a specific date versus the comparable date in the prior period, and may or may not reflect the actual revenue growth rate at the end of the period. During today's call we will provide certain performance measures that do not conform to generally accepted accounting principles. We've provided schedules that reconcile these non-GAAP measures with our reported results on a GAAP basis as part of our earnings press releases and the slide presentation which can be found in the Investor section of our website, iheartmedia.com and clearchanneloutdoor.com. Please note that our two earnings releases and the slide deck on our website are integral to our earnings presentation. They provide a detailed breakdown of foreign exchange and noncash compensation expense items, as well as segment revenues and OIBDAN, among other important information. For that reason, we ask that you view each slide as Rich comments on it. Also, please note that the information provided on this call is only to management's view as of today, August 4, and may no longer be accurate at the time of a replay. With that, I will now turn the call over to Rich Bressler.

Thank you, Eileen, and good morning, everyone. Thanks for joining us. We're pleased with the results we have achieved this quarter. With iHeartMedia extending its growth momentum, America's Outdoor improving its operating performance, and International Outdoor delivering an overall increase in revenues. We are continuing to execute on right strategies to efficiently leverage our growing capabilities as a multi-platform, 21st century media and entertainment company. And we keep investing in strengthening our businesses, enhancing our offerings to consumers and developing innovative marketing solutions for advertisers and agencies while maintaining our focus on tight operating and financial discipline. Today's earnings call marks my third anniversary here at iHeartMedia, and it's gratifying to see how much progress the company has made and how much more we can achieve with the opportunities ahead of us. For example at iHeartMedia we continue to benefit from favorable trends and how consumers are using media. As we've highlighted to you before, broadcast radio remains the U.S.'s biggest and most stable medium reaching 93% of all American adults 18 and over and radio's reach among millennials is nearly as high at 92%. Compare broadcast radio's reach of 93% to TV's reach of 88% of American adults over 18 and just 78% reach for millennials versus radio's 92% reach for millennials. Further, only about half of the people ages 18 to 24 now watch broadcast TV in Prime Time. And at 93% reach of broadcast radio is even higher than smartphone's reach of 77% of Americans 18 and over. Importantly, smartphones also help us extend our reach through iHeartRadio and our station's websites. In fact we reach over a quarter billion listeners every month and are one of only a few media players in the U.S. with a reach over 200 million people per month along with Facebook…

Thank you. [Operator Instructions] Our first question is from the line of Avi Steiner. Please go ahead.

Thank you for taking my questions. First one, hopefully an easy one, I assume based on some commentary in Q2 there was legal expenses in the second quarter in corporate but if you could tell us what those were so it gives us a sense of maybe what those one-time costs were?

Hey Avi, it's Rich. Good morning. So we don't break out the legal expenses by number so you could assume that everybody's aware that we've had some litigation activity in the second quarter. And some of that litigation activity currently and that's where we might result in an increase in expenses.

Okay. Thank you. The 10% no balance, if our math is right, is now $347 million. Does this give you comfort with respect to, perhaps how the auditors may look at your financial position in the coming year end file?

Well certainly I feel better. I mean 347 million reasons why we should feel better. There's still several hundred million outstanding and we'll continue to work to address that but I think we've made a significant step in repurchasing more than half of the remaining balance of the 2018 notes and reduced cash interest expense in doing so. So capturing some significant discount reduced cash interest expense, and we certainly feel better about where we stand today.

That is helpful. And then, kind of as I model it nerd-wise here, you didn't generate free cash flow this quarter in what historically has been a lower interest, higher EBITDA quarter. So curious if there are liquidity sources we may not be thinking about that you can pull or some asset tells or something that otherwise may help in the back half as we think through the rest of the year?

Well we're a big company. We have lots of assets and we continue to evaluate what is optimal for the company. We continue to invest in the company when appropriate and have assets that are worth more to somebody else than they are to us. We may divest those assets. So a big company, lots of operations. I would say that we continue to evaluate what we have and sure, there can be liquidity levers in the future, I think. Just look at what we've done in the past, and you've seen the company be pretty creative on optimizing this balance sheet.

Okay. That's fair. I'm going to end it on this one, and thanks again for the time. I think Rich had mentioned debt repurchases being a component of your strategic plan to strengthen cap structure. You obviously bought in those tens. But curious if your view of what you wanted to accomplish maybe last year with the capital structure has changed given the higher prices we're looking at on some of the junior debt securities today.

Well I think there's a couple components to rightsizing the capital structure and Rich would certainly want me to say first and foremost, the focus is on operations and continuing to grow EBITDA. I don't make any money for the company, but I can work on the capital structure side. I do think there are opportunities to capture discount, to reduce cash interest expense. But you can read our trading levels today versus where they were in Q1 and know as well as I do that prices have gone up and thus the opportunities are less. But that doesn't mean there aren't opportunities. We may just have to think about them a little bit differently, be a little choosier about what we select to do, be a little more patient. We continue to have constructive dialogue with investors that are willing to have constructive dialogue. That led to an opportunity post-Q2 that we've talked about and we'll continue to have those discussions and to pool our excess liquidity in the best way that we view possible.

Hey, Avi. It's Rich. And just the one thing I'd say in summary too, I think kind of wraps up a bunch of your questions. We are and I think it's evidenced by the results, we will continue – as Brian alluded to, continuing to focus, driving the operations of the company in the environment that we operate in. Continue to out-perform the marketplace. And at the same time we're looking to optimize the capital structure. And I think if you go back I noted up front it's my third year today, probably almost to the day anniversary here. And if you look at the optimization and the capital structure, You pointed out a couple recently, but if we go back a number of years what the sale was. The Sirius outdoor stock or back to the Australian New Zealand JV that we had a regular interest in that I think we did a good job of monetizing till recently, selling the non-strategic assets for the outdoor company, the nine markets. We've been a great provider, great [indiscernible]. So you can rest assured that's just a daily, the thing we do every day. We drive operations and we look to optimize the balance on a daily basis.

Thank you very much for the time and the answers.

Thanks, Avi.

Our next question is from the line of Jason Kim. Please go ahead.

Hey, Good morning, guys. Thank you for taking my questions. First on the political revenue side, I know it's still early in the year, but just wanted to get your updated thoughts about the outlook for 2016. What are you seeing? What are you hearing out there in terms of your political revenues outlook as we get closer to November?

Well look. It's early in the political cycle, as we all know. I don't know anything more than we all read, including what we all read and heard this morning in the papers. I think the only thing we do know it's been not only exciting but pretty unpredictable election cycle. In terms of what we can control, and just also as a reminder, the bulk of our political revenue, as we've always said all year, is going to come in Q4 this year. We're very confident in our D.C.-based political sales team. We talked about this a couple times the last few quarters. We had a political media veteran Kenny Day, and he and his team are just doing an outstanding job. And we have pretty high expectations. And they've achieved about [indiscernible] a number of expectations. They've done a great job in leveraging broader and mobilizing our local sellers who assist in the campaigns, not just the national campaigns. But also the local campaigns and targeting the specific demos that we need to reach. And I can say here with confidence that we think we're well-positioned to maximize our share of political ad spending. Clearly it's been a little bit slower. As you know, getting questioned in the last presidential election year and even in the first quarter was pretty normal for spending to slow down. At least what we've seen over time before conventions. And as I've seen historically, the majority of the spending occurs in the fourth quarter. So we continue to be optimistic based on the selling machine that we built led by [indiscernible].

Thanks for that. And when we look at your CCO Americas segment margins, has there been a lot of changes in the revenue composition that would put your core margin profile than they were pre-recession? So, your segment margins in the CCO Americas side were as high as mid-40% before the downturn. Now they are more in the high-30% range. Is that just a function of lower revenues from peak levels or has there been any changes to the composition of revenues? Just wanted to get a sense of what the kind of medium to long term margin profile for CCOA going forward.

Sure. It's a couple different things. First and foremost, we've talked about this before, with Scott Wells, Bob McCuin, the rest of the outdoor team and I think six, nine months ago when we made – or a year ago when we made changes to [indiscernible] decided to bring in new members of them, we talked about that we'd start to see improvement and I think if you look at the numbers today, delivering on an apples-to-apples basis x-FX revenue growth in Americas outdoor U.S. of 4.6%, OIBDAN growth of 5.6%, we feel good about that. And so that's also why I mentioned we have the continuing challenge working with the outdoor America team on streamlining this organization. And like I said, I think they've done an outstanding job in the last six months and you see it starting to manifest itself in the numbers. You add to that, so that's from an operating standpoint, there has been some change in mix. Remember that we lost – we still are down on the L.A. digital boards. So although we've got 50 digital boards around the L.A. market and we've been able to convert about 80 digital boards back to print temporarily. So, we're trying again to get the best out of that asset mix that we can right now, but we're still down in digital boards and we're not up to where we need to be. By the way, I will mention this as an aside, we have a great new offering, which I pointed out in the earnings conversation. We have revenue building wallscapes both in the untapped Millennium and Premier real estate projects in West Hollywood. So, we feel great about that. And we also, by the way, last piece, is we have some more transit contracts than we've had in the past, which operate at slightly lower margins. So, long winded answer because it's a mixed bag, but I think we should feel good about the team and the direction of the business.

Got it. And then just one question for Brian on the balance sheet. Given the just lower amount of that outstanding, or coming due in 2018 now, what's your current thought process regarding taking vantages, liability, management transactions other than your view dated maturities?

Yeah, good question. I've always kind of had a position that you don't want to create a liquidity problem when you otherwise didn't have one and so having some of the 2018 stack taken out certainly is helpful. But we still need to focus on liquidity first and make sure that we're comfortable with respect to the investments we want to make and making sure our operations flow smoothly between now and our vet maturities, and making sure that we can adequately address our 2016 and 2018 vet maturities. So, you know, again, we want to keep an open mind and look at all opportunities. We feel a little better about 2018. There's still some maturities and of course we've got the 2016 maturities as well. Both we think are manageable. But we want to make sure that we don't create that liquidity again. So kind of a non-answer, but it's a balance that we look at. Marginally, I think we feel better about 2018 and perhaps that opens up some opportunities but we never want to forego the security that we feel in our liquidity position.

Thank you.

Okay. Our next question is from the line of Lance Vitanza. Please go ahead.

Hi, guys. A couple questions from me. The first on core trends. I found your comments around the outlook just a little bit ambiguous in that you referred to other broadcasters. From my perspective, most broadcasters seem to feel pretty good about where things stand. So are you saying that despite limited visibility you feel good about where the company is headed in the back half of the year? That would seem to fit with the rest of the commentary but when you got to the pacings it just was a little bit hazy to me.

Well I think, Lance, two separate things. Right? As I always point out, and I'm sure you guys are tired of hearing me say this, but pacings are just a snapshot in any given point in time and my only point on bringing up rate pricing advertising is, I think, we're all seeing in the media industries that I followed and obviously talked with everybody else in the media industry about the earnings we do see as well as the ones that just came out as early as this morning. I think it's two things. One is we're all seeing later placing media, which I think goes to the point of our pacings, just a given point in time. And then I think the other piece out there is just about the general comment, you know there's lots of factors affecting it. So I don't think what I'm saying, and quite frankly I'm sure what I'm saying is no different than you're hearing from the rest of the media industry that's out there. You know, we're all dealing with the election and the uncertainty around that. We're all dealing with the Olympics and the uncertainty around that. We're all looking at what's happening with GDP growth. You know, again, we're looking at both Europe and what happened outside of the United States because of CCI. So I think the only point you're hearing me say is that there's lots of moving pieces here when you think about the future. Some of them are in our control and some of them are out of our control. But one thing that I pointed out in my opening remarks, we are laser focused on driving the revenue in this environment and in any environment we operate in. Laser focused in managing our core…

That's a good segue. I wanted to ask you about that. Those are wonderful statistics about your reach and among millennials in particular. Clearly a disconnect between those numbers and the perceptions in the markets. When you go into pitch business though, are the ad buyers – are they surprised by these numbers? Do they push back on these numbers? Or is this widely understood at this point?

Well, you know, first of all, I would take exception to when you say not understood in the marketplace. Let's just talk about in terms of the marketplace. One is, again, these are all – just to be clear – these are not like when other companies put out self-generated numbers, these are all Nielsen numbers that are out there. So the relevant to the medium to the consumer to the listener, getting our product to the listener wherever they are, which is what our job is, and to drive the ratings and drive the monetization of those ratings. I don't think there's any confusion from the consumer stand point in the marketplace out there as evidenced by the listening numbers. As evidenced by our ratings year-over-year. I don't think there's any misconception from the talent whether there our DJs in a job. Whether it's, you know, Elvis, or Ryan, or Big Boy or one of all of our guys. The relevance of our DJs, our special sauce. Your best friend next to you in the car, which is what we are. And the engagement of our audience, I don't think there's any confusion there. I think I pointed this out in my opening remarks. Take a look at the iHeartRadio Music Awards this year. We had 115 billion – 115 with a B – brilliant social impressions and to put that in context, the GRAMMYs had about 30 billion followers. The Academy Awards had about 40 billion. We had almost four times the GRAMMYs; three times the Academy Awards which again shows you how engaged our audience is with our stations and shows you how engaged people are with the medium. And then when you go to the advertising side – which is again, our bigger source of upside, is with all of our success we are still wildly under monetized, which I have said before. Nielsen says on average we're six to one ROI. So for every dollar in advertising gives us on average return on investment, just hard facts without everything else, on average we get six to one back and you can see by our results and our out performance, we are continuing to work through and work with advertisers and continuing to drive results out there. And the good news is we've got all the operating results to drive the advertising revenue and also we have a lot of upside here. Do I wish we were further along? Sure. But I think again if you look back, as I said, this is my three year anniversary. If you go back over time and you look at the digression on – and since Bob and I have been here learning this company, if you go with the rest of the outstanding management team that we have if you go back and look at operating results translating into revenue. Operating results translating into revenue you will continue to see steady progress.

And that's great. I appreciate the explanation. Just to be clear, I was talking about confusion in the capital markets not the other markets but in any case, I appreciate the clarification. One last question from me and I apologize if I missed this but, Brian, how did you finance the purchase of the tens? Did you use existing cash or did you wind up borrowing against or selling some of the Outdoor common stock at broader media? Thank you.

We used cash.

Existing cash?

That's correct.

Okay. And how much cash does that leave, sort of, in unrestricted subsidiaries? Do you have that number available?

I don't think we disclosed what's in unrestricted subsidiaries. There's an imagination you can go through the balance sheets of the segment disclosure that we have that you can estimate what non Eurenpor cash and back out outdoor and that gives you non Eurenpor non-outdoor cash. And that's a proxy that people use for the cash and the unrestricted subs and it's not a bad way to estimate what cash is unrestricted subs but we don't disclose assets, or update assets, in our unrestricted subsidiary.

Thank you.

Our next question is from the line of Marci Ryvicker. Please go ahead.

Good morning. It's Stefan for Marci. I'd like to dig into the pacings a little bit for at Outdoor. It sounds like America is decelerating. Are there any comparability items here?

No. I mean, again, I'm going to say what I've said in opening remarks and I'm going to say what I just said answering the question before. Pacings are a snapshot in the period time. They don't include everything we do as a company. The [indiscernible] thinking has been adjusted for the sale of the non-strategic assets that are out there and again there's an overarching comment. There's more advertising being placed in month, in quarter, closer to the time that the advertising is shown.

Okay. And then on the international pacings. Did those include the new Spain contracts for the street furniture?

Yeah. I mean there's nothing – those are brand new so they're not significant at this point in time.

Okay. And then is there any way for digital to be broken up for Outdoors, America or at iHeart with percentage of revenues?

We don't break it out. We break out of the number digital board which we've mentioned but we don't break out with – we don't look at our business that way. We're selling results to advertisers and that's what advertisers are focused on. So we don't break out separately the digits result in any of the segments of our company.

Great. Thank you.

And the next question is from the line of Aaron Watts. Please go ahead.

Everyone thanks for taking the questions, just one for Brian, one for Rich. Brian, quickly, what is the plan for the bonds you've repurchased? Will they remain at the unrestricted sub, and then also, will they be cancelled or retired or remain outstanding?

We have not cancelled those bonds, but obviously reserve the right to do so going forward. But obviously once you do that you can't undo it, so I don't know that there's been a long term determination on what to do with the bonds but currently they remain outstanding at the unrestricted sub.

Okay. And then, Rich, just one for you. The 16% gains in iHeartRadio certainly seems like a positive data point. I'm just curious about your monetization efforts around that increased listening on that platform? And then, maybe you could talk about the ad load on iHeartRadio as well?

Well, I'm not sure what the question is on the ad load. We achieved, I think, and thank you for saying that, about the 16% gains we achieved. Also noted the highlight that we had 8 million iHeartRadio registered users as of June, the end of June, which is 23% growth on a year over year basis, and we've had over a billion downloads and uploads of our product, so we feel great about that. Again, you know, on the monetization front, as I've said, I think we continue to do a good job on the monetization front in terms of monetizing our listening. At the same time our greatest opportunity is we are wildly under monetized based on the effectiveness of the medium, which I went through a little bit before I think, in response to Lance's general question.

Okay, great, thank you.

We have no further questions in the queue at this time.

Operator, thank you very much. Thank you, everyone, for joining and we appreciate all your questions and if you have any follow up questions, please give me a call or call Brian. Thank you.

Thank you. Ladies and gentlemen, that does complete your conference. We do thank you for joining while using AT&T Executive Teleconference. You may now disconnect. Have a good day.