Ladies and gentlemen, thank you for standing by. And welcome to the 2017 Fourth Quarter and Full Year Earnings Conference Call for Clear Channel Outdoor Holdings, Inc. Following today’s presentation, we’ll have a question-and-answer session [Operator Instructions]. I will now turn the conference over to our host, Eileen McLaughlin, Vice President, Investor Relations. Please go ahead.

Good morning, and thank you for joining Clear Channel Outdoor Holdings 2017 Fourth Quarter and Full Year Earnings Call. On the call today are Rich Bressler, Chief Financial Officer; and Brian Coleman, Senior Vice President and Treasurer. We'll provide an overview of the 2017 fourth quarter and full year financial and operating performances of Clear Channel outdoor Holdings, Inc. and Clear Channel International, B.V. After an instruction and a review of the quarter and fiscal year, we'll open up the line for questions. Please note that we will not be able to answer any questions on iHeartMedia's operations or its bankruptcy process. 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 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 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 earnings conference call presentation, which can be found on the Investors section of our website, clearchanneloutdoor.com. Please note that our earnings release and slide presentation are available on our Web site, www.clearchanneloutdoor.com, and are integral to our earnings conference call. They provide a detailed breakdown of foreign exchange and noncash compensation expense items as well as segment revenues, operating income and OIBDAN among other important information. For that reason, we ask you view each slide as Rich comments on it. And also please note that the information provided on this call speaks only to management's views as of today, May 1, 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 Clear Channel Outdoor's Fourth Quarter and Full Year 2017 Earnings Conference Call. As you know, in the past, we have presented the iHeartMedia and Clear Channel Outdoor results at the same time. However, this quarter we will present just Clear Channel Outdoor. During iHeartMedia’s bankruptcy process, we will not be hosting an earnings conference call for iHeartMedia. In the fourth quarter, Clear Channel Outdoor's revenues increased. However, revenue declined slightly after adjusting for the impact of foreign exchange and the sale of certain outdoor businesses. Operating income and OIBDAN declined in the fourth quarter. For the full year, revenue decreased, but revenue increased after adjusting for the sale of certain outdoor businesses and the impact of foreign exchange. Operating income and OIBDAN were down in 2017. Before discussing our fourth quarter and full year financial performance in detail, let's first review our initiatives that are transforming Clear Channel Outdoor into a digital and data-driven media company. Clear Channel Outdoor is one of the world's largest outdoor advertising companies, with more than 570,000 displays in 31 countries, including 43 of the 50 largest U.S. markets. As people spend more time out of home, we continue to innovate across our global network to help brands connect more effectively with their target audiences. So in today's data-centric world, our strategic initiatives are focused on delivering what advertisers increasingly expect. We believe our continued investments in both digital display inventory and technologies to enhance our advertising partners' campaigns with programmatic ad buying solutions and data analytics, including attribution, will include the depth, scale and monetization of our offerings. These long-term investments enable us to leverage our growing global networking capabilities in order to compete against top digital media companies. Our digital display technology is…

I also want to let you know that CCO 10-K is delayed, and we are working with all parties and using our best efforts to file our 10-K as soon as possible. This delay is related to the misappropriation of funds I referred to earlier. Operator, we can take our first question now.

First question will come from the line of Avi Steiner of JPMorgan. Please go ahead.

Hi, good morning. Thank you for taking the questions. I've got a few here, and I'd like to start, if I can, on the top line. So iHeartMedia media yesterday filed an 8-K, and I'm not asking about them, but they provided an outlook for CCO to grow in 2018 in both the Americas and internationally. And I'm curious what gives management confidence in that growth number, particularly in the Americas when FX and asset sale adjusted revenue was down slightly in '17? And then as a quick addendum, did I hear correctly that International is pacing up 8.2% in Q1? And is that LATAM related, or is there something else in there?

So on your second question, just to take them in reverse. Yes, you did hear correctly. And that is, if you look at the pacing, of up 8.2%, we feel pretty good about that strength. It's led really by a number of places. It's China, it's Spain, it's Italy. We're having a nice quarter in Switzerland, Sweden, the UK. So it's pretty broad strength across the entire portfolio. When you look to the first quarter of 2018 coming off the fourth quarter of 2017, just as a reminder, the majority of decline I outlined in the remarks was due to the impact of the markets we swapped in the first quarter '17. There was also a small negative impact from the Caribbean airports that were impacted by the hurricane. And again, in the fourth quarter, our local business and airport businesses were both up. International business, I think, is, was really kind of with the entire outdoor industry was soft and was down. In terms of 2018, we referred to, we are really excited and continue to believe the underlying fundamentals, still promising of the business. And the focus of our advertisers, again, the ability to highlight on audience insights, speed of execution and we continue to be in transition, as you know, on digital billboards, converting from static to digital. And we'll probably have, I'd say, about 45 to 50 new digital billboards in the first quarter, more than we had in the first quarter last year. And that, along with everything else I talked about, the successes with RADAR, starting to see the early successes of programmatic, where we have about 1/3 of our advertisers using programmatic on new-to-the-outdoor business. So if you kind of take all those pieces together, and that's really what we anticipate driving our growth.

I appreciate the color, switching gears here. The due-from-iHeart amount was written down to $212 million. What was the basis for that 80% reduction of the company's confidence in the recovery there? And assuming there is a recovery in cash, should we assume repayment will be treated as it has been historically, i.e., distributed out of Outdoor? Or is it possible the agreement is amended to keep any repaid amounts down at CCO for debt repayment or any other usage?

Avi, it's is Brian. So there's a couple of components to your question. I think the first is the valuation of the impairment to the note. And that's something we're not going to get into a lot of details on. It is GAAP accounting process. As you're aware, the bankruptcy filing included proposed restructuring of indebtedness, and that would include the unsecured obligation between iHeart and Clear Channel Outdoor. But it did not give specifics with respect to that proposed settlement. So the accounting folks had to go through and determine whether or not a reserve against the account receivable is appropriate. They determined it was. And then they went through an accounting process to best estimate what that amount would be. And that's really, I think, all we're going to say about the valuation of the receivable. With respect to payments under the intercompany agreements, I think it's important to understand that there really is no restriction per se to make a distribution. You have seen that in the past because of 1 or 2 events, either, a, the distribution was done by the intercompany note committee as a result of the threshold amount under the intercompany note being reached. And in that specific case, pursuant to the settlement agreement, a distribution is prescribed. I think in the other cases, it related to asset sale proceeds or a mirror payment related to assets or proceeds. And so also it was deemed by the full board to be appropriate to make a distribution. But the general board can make a demand under the note and does not necessarily have to declare a distribution unless there's some other agreement, like the settlement agreement, where they deem it's appropriate to do so. So I don't think an amendment to the intercompany arrangements would be necessary.

And then just thinking about operationally, back to CCO here, I think it's historically been a cash user in the first quarter or maybe even the first half. There's some seasonality in there. But If CCO needs cash beyond its current liquidity position, at least domestic cash, accessible cash, is that something we should expect to fund it down from parent or is there boring capacity down at Outdoor?

On a day-to-day liquidity basis, you should assume the cash management arrangements remain in effect. And so the funding is available from the parent, and that is the cash management arrangements have been approved to the core process. Is there some additional debt capacity within the organization? There is some, but it's limited. The company does have a $75 million revolver that has some availability that could also be used. But I think generally, the right way to think about it is if there's a daily liquidity need at Outdoor, iHeart will fund it via the cash management arrangements.

Great. Almost done here, and appreciate the answers. At the risk of stating obvious, the current leverage profile is elevated, relatively short-dated maturities, I guess maybe it's a longer 2-part question. But how does management think – what does the management think is the right level – leverage level for this business. Have you given thought to what the right cap structure may be, secured, unsecured? And how might you get there really? And how do you think about all of that in the context of the timing of the spin via taxable or tax-free?

Yes, there's a lot there as well. You're asking a good question, and it is obviously something that we've been thinking about, and we have numerous financial relationships that have been itching us as well. But again, it is early days, and we're still working on the complicated process of a prospective separation. And so there's not a whole lot to discuss here other than we continue to work with iHeart and Outdoor, working together to try to figure out what the appropriate capital structure is. That will obviously, sooner or later, involve other constituencies under the RSA. But, yes, we're thinking about it, but I couldn't tell you right now what the right leverage point is, what the makeup of secured and unsecured is. We are getting pitched and seeing some information, but it's really early days. And all of that will be negotiated as a part of the bankruptcy process and the separation -- ultimate separation.

Maybe I'll end it on this, and I assume I'll get roughly the same answer. But thinking beyond that, is it too early to ask how you think about the strategic landscape for CCO, whether it's a REIT of the U.S. business, sale or other strategic alternatives? How do you think about any of that? And thank you very much for questions I’ll go back into queue.

Yes, I'll take a shot at it, and then Rich can weigh in if he wants to come over the top. I think it is early. But obviously, things like positioning a separated outdoor, or it could REIT, is desirous. And it's something I think that we would attempt to do. With respect to opportunities post-separation, again, that's something that the operators of outdoor, and ultimately, they will need to make that decision. The board of Outdoor, that's really not for me, but I do think they see initial separation as being advantageous. Rich, I don't know if you have anything to add.

The only thing I'd add, Avi, is that, and for everybody on the call, ultimately, that's a decision for the ownership group and the board, and they'll really have to make that decision. I think our objective here is to make money for all of our stakeholders. And so I think everything is going to be put through that lens, what's creating the most value for all of our stakeholders.

Our next question will come from the line of Marci Ryvicker, Wells Fargo.

It's Stephan for Marci. Regarding the separation, do you guys have any kind of expectation regarding the timeline or milestones we should be looking forward just in public documents?

Stephan, It's Rich. I appreciate that. But really I think, as Brian highlighted, we continue to move along in the process. We're pleased that we were able to go in at the iHeart level. And just as a reminder, the Outdoor business did not file, and we're pleased that we were able to go in at the iHeart level with a majority of our creditors agreeing to the terms of the deal. And we're moving through the process as expeditiously as we can. And again, we continue to be pleased, and we know this has affected our business, whether it's our business with advertisers, our marketing partners, our employees. And that's our objective, to keep the business moving forward seamlessly.

And then to clarify the pacing down, I think you said that was as of quarter ending Q1?

Correct.

And then do you have any early read on how things were in April?

I'm not going to make any further comments other than the pacing data I gave at the end of Q1.

And then, I guess, lastly, the movement of LATAM from International to Americas, do you guys have ballpark revenue and OIBDAN for the year that's moving from one segment to the other starting in '18?

Yes. I think it's in, if you go, I don't know if you've had a chance to look at it, but if you look at the backup materials in the slide, I think we highlight what the breakout is in there. I think it's on slide 14. I think it's [indiscernible].

I would now like to turn the call back over to our host for any closing remarks. Please go ahead.

Thank you, everyone, for joining us this morning. As in the past, Brian and I will be available to take any call this afternoon. And have a good day. Thank you.

Ladies and gentlemen, it does conclude our conference call for today. We'd like to thank you for your participation in today's iHeartMedia teleconference call for Clear Channel. And thank you for using our service. Have a wonderful day. You may now disconnect.