Welcome to the 2015 first quarter earnings conference call for iHeartMedia, Inc. and Clear Channel Outdoor Holdings, Inc. I will now turn the conference over to your host, Effie Epstein, Vice President of Investor Relations. Please go ahead.

Good morning and thank you for joining our 2015 first 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 first quarter 2015 financial and operating performances of iHeartMedia, Inc. and its subsidiaries iHeart Capital I, LLC and iHeartCommunications and Clear Channel Outdoor Holdings, Inc. For purposes of this call, when we describe the financial and operating performance of iHeartMedia, Inc., that also describes the performance of its subsidiary, iHeart Capital I, LLC and iHeartCommunications. 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 projections about performance and represent management's current belief. 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 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 on the Investors Section of our websites, 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, April 30, and may no longer be accurate at the time of replay. With that, I will now turn the call over to Rich Bressler.

Thanks, Effie, and good morning, everybody. Once again, as Effie mentioned, you can find our presentation slides on our website. We continue to strengthen our position as a leading media and entertainment company, we are relentlessly moving ahead on the technology front and working to use iHeartMedia's cross-platform assets in creative ways that we believe continue to redefine the future of consumer media and entertainment. As we tell you often, our business model is simple. Create deep relationships with consumers, and then rent the use of those relationships to our advertisers. We reach consumers through all of our platforms, outdoor, broadcast radio, events, digital, mobile and social, and our strong results in the first quarter showcase our progress. Let me spend a few minutes to review on our key initiatives year-to-date. On an industry level, we believe radio is a favorite of consumers, but it is still underutilized and under-monetized by advertisers, and we are taking aggressive steps to change that by focusing on making our company as advertiser-friendly and data-driven, as the major digital-only players. This not only makes doing business with us as easy as any digital company, it also plays to our strengths, delivering ROI to advertisers. We have a large and engaged audience and we believe that return on advertising investment, we provide, is even more impressive. We are sitting on a significant amount of data, and need to make sure that we make advertising space on radio easy to buy and its return easy to measure, as advertisers shift their focus to ROI. We recently announced a programmatic automated buying platform for iHeartMedia and Radio, the first of its kind in the industry. As you all know, programmatic is already an important and expected method of ad buying in the digital space. Our new buying…

[Operator Instructions] We'll take our first question from Jason Kim with Goldman Sachs.

To start off, I was curious as to why you've chose to reclassify your LATAM operations from international to Americas, any drivers behind that decision? I know, the LATAM used to be in the CCOA in the years past, but you moved it to your international, and now you're switching back.

It's really was a very practical decision. A couple of things, our Latin operations, they're physically located in South Florida. So just from a management standpoint, they're easier to manage. We now have one corporate team for Latin America, which actually sits in Miami. So it made sense from an overall basis. So really it was just focus, and this allowed Scott to focus on again because of the corporate team in Miami. With William moving back and devoting his full time responsibility to CCI and international operations, and the opportunities we have there, and a great job that he and his team has done to date, and looking at the opportunity ahead. So really it was just from a focus standpoint and management standpoint. And quite frankly, it will be more efficient from a cost standpoint with corporate in Miami.

And then if I can follow-up on the CCO about the stock buyback. I think you've bought about 9 million shares of CCO for about the $90 million by iHeart. It looks like the buyback program has ended looking at the 10-K. Can you remind us of your rationale for those transactions and then why now? And is it fair to assume that, given your focus in preserving liquidity profile that you would not have spent this money unless you thought it was investment with good near-term return potential?

I think that the last tranche or repurchase that we did, the rationale is the same as the prior ones. And I'll run through those reasons real quickly. First and foremost, we thought the share price was attractive levels and rendered good value. We went through this process evaluation back when we hit a 52-week low, and as you've seen we've hit a 52-week high recently. So we've accumulated some shares of outdoor at attractive levels. But the primary driver was to counteract the solution that occurred since the additional 10% spin-off of equity that we did back in '05. We were at 90% back then. It have been diluted down through the use of equity as a currency for some acquisitions, equity grants, various things. So even after this last transaction, we're just back up to the 90% threshold. I think we're just slightly over at 90.3%. We were slightly under, before this last transaction. These transactions themselves are not easy to come by. There is only a few holders of blocks of this size, and we were approached on this last tranche. And so again, it was opportunity that came to us at good value. And so it was an easy way to get at 90%, slightly above 90%, gives us a little bit of space to manage potential future dilution. The big drawback, as you didn't exactly say, but maybe alluded to, is it is a use of liquidity. But I think as long as we thought we got good price on the stock, and certainly we are taking some risk, it is something that can be turned back into liquidity, should we need to do that. So it's all those factors kind of stacked up that give us the opportunity and the timing seemed right. We feel pretty good today, given where the stock is trading, that it was the right decision. You are right in that. Our existing authority has been exhausted. In fact, on this transaction, we went over that authority and had to seek separate board approval just for that piece. But the existing authority is exhausted and there is not another one in place. Don't want to back ourselves into a corner, saying, we wouldn't consider additional purchases, but there isn't a shelf authority that's out there. I think I responded to most of the questions, let me know if I left anything off.

If I can just squeeze one more question. So the media and entertainment results for the first quarter were better than what we had anticipated. And it appears that 2Q pacing, which is still early, but the 2Q pacing numbers are looking very strong as well. How much of that is just iHeart outperforming the industry versus the macro environment maybe just getting a little better for advertisers right now?

So I think it's a bunch of factors, right. First, based on the Kaplan, I think which as we've said, the industry was down in the first quarter with weakness in local, remember there was some harsh weather in Q1. So the industry was down 3, as we pulled overall. We were up 4, and I think we outperformed the cost of goods both in the local and on the national side. And this really points our ability to grow our overall revenue. And remember, just a couple of things that are going on I think in the environment wherein which were important to remember. Although, we mentioned what our local broadcast revenue is and we talk about it, the lines are getting increasingly blurry between local, regional and national spending across all the disciplines, whether it's spot, whether that's digital, whether that's events, and we're well-positioned to benefit from this trend. We're focused on, just as a reminder, and saying to our advertisers, radio partners, radio marketing partners, what are your challenges, what do you want to achieve, and how do we provide you with a solution across the board. And then when we look at, we also I think highlighted from our event standpoint that we did have in the first quarter we had the iHeart Music Awards on NBC. Well, that was in the second quarter last year. This year we've got the Country Festival is the second quarter, as a matter of fact this weekend, which was in the first quarter last year. And then we're also seeing growth in traffic and weather as well as national. And from the category perspective, auto is really pacing up nicely year-over-year. You have the entertainment business, you have the movie studios, are pacing up nicely year-over-year. So we feel both about the reported results and about our better business going forward, we feel great. And at the same time, we think the opportunity has never been better.

The next question in queue comes from Avi Steiner with JPMorgan.

A couple left here. One, I'm going to take the last question maybe from the margin perspective. Another good quarter of margin expansion, and I'm just going to discuss your ability to continue that, particularly in light I guess of all the investments you seem to be making, rightly so, and your plans to monetize the data on the larger platform? And then I've got a couple follow-up.

I would tell you a couple of different things. And first of all thanks on the margins. I said this a-year-and-a-half ago. A little over almost two years now, when Bob and I started on this together, in terms of working together, in terms of that margin expansion, managing cost was going to be a way of life here. If you look at this quarter, overall we have iHeart with 32% margin, that's another increase of 1 point of 31%. These are on OIBDAN margins to be clear. From last year, Americas outdoor was up 1 point. International outdoor was up 1 point in margin growth. So we're going to continue to have margin expansion in this company, because we're going to continue to vigorously focus on costs, continue to look for ways to become more efficient, and quite frankly continue to look for ways to reallocate resources. It's not just about taking out cost, part of taking out cost, and part is becoming just more efficient in terms of the way we do business. And I'll tell you, a great example I think of that is when we look at what we just announced over the last couple of weeks with our Jelli transaction, and everything we're looking at from a programmatic standpoint that we're taking really goals to bring additional levels of sophistication, additional level of operational use for our buyers to purchase broadcast radio. That's going to make it better for the buyers and it's good to make it better for us and better for you guys, because we're going to be more efficient. And quite frankly, we're taking massive steps to revolutionize the programmatic buying process and extending that progress not just to digital, but to broadcast also and that will just make everything -- I think it will attract more buyers because of ease-of-use to buy. And today's been a challenge for the radio industry that we can leverage some technology to add value and efficiency to the purchase of radio, digital inventory, optimize the solution, and therefore bring more to the bottom line.

And I don't want to spend too much time on pacings, since I know how you feel about it, but I just want to get some clarifications. On the outdoor domestic pacing side, you had mentioned with and without Latin America, and I'm trying to get the best apples-to-apples, if you don't mind giving me that again? And then on the M&E pacings was that actual or adjusting out political? And are there any, I guess, later in the quarter events that may change that trajectory?

So a couple of things. On the outdoor in Latin America, that's about a $20 million impact revenue business in Q1. And revenue was up on America's outdoor slightly about 2% on a year-over-year basis, if you factor out Latin America. And I think we talked about the effects on the Olympics of that -- around the World Cup, I'm sorry for that, on the total comparison last year. Your question on iHeartMedia, that does not -- that's reported numbers in terms of pacing. So there is not effect in terms of factoring out anything geopolitical. And the only thing that affected comparisons I think are highlighted already, which was the iHeart Music Awards on NBC, which was in the first quarter this quarter, second quarter last year. Country, which is this weekend in Austin, Texas, was in the first quarter last year, the second quarter this year. We have a pool party in Las Vegas, which is in the second quarter in both years. And just as a reminder, we had about $10 million of political spending in the second quarter 2014. So I think that covered all your questions.

And very last one for me. You and Bob recently bought equity to top the house and I'm just curious what gave you comfort buying it at that level? And I'll leave it at that.

Well, we did. And just to be crystal clear, Bob and I went to the market, bought equity and it was our personal funds. We wrote our own checks. And I hope it's self-evident that it's putting money where our mouth is. In addition to all we had incentives that we have with this company. And we've said this before, when we look under the hood here you look at the assets we have, you look at the results we had leaving the fourth quarter of last year. And I think as you went back to last year, we made progress, this is 2014, the second quarter better than the first quarter, third quarter better than the fourth quarter, fourth quarter better than the third quarter. We continue to build upon that progress this year. And there's much progress as, Bob and I have made along with the rest of the management team, because it is a team effort here. Along with the rest of the management team, we think our greatest opportunity is ahead of us. We continue to believe, and I think with all the data points point to it, that we are the most under-monetized medium out there. I'll remind everybody when Dave Calhoun of Nielsen brought Arbitron year ago, which was a significant event for us. He said, one of the reasons he was buying or the main reason he was buying Arbitron, because he felt radio is the most misunderstood medium in America. And I think if you go, and then he did the ROI study with Nielsen Catalina and Nielsen and he showed the 6 to 1 on that. To that point in terms of every dollar that went in, advertiser's got $6 back. And you go from that data point to us managing our cost, looking at what our reported results. I just touched upon briefly about the benefits of programmatic and the direction that were going. They benefited, and really points to the benefit of data, the more data out there, the more our ability to target, to more to bring easy advertising solutions to the advertisers. And our advertiser partners on a cost-effective basis. So I would say, as every day goes by we are more optimistic about our future, but it really does start with under monetization and that the simple reason we say we bough the stock.

Our next question in queue, that will come from David Miller with Topeka.

If you wouldn't mind giving us a quick update on the Los Angeles digital situation? I believe 90 days ago, at least rhetorically on the call, you had mentioned some sort of bogey of maybe the end of the second quarter as some sort of resolution either in the form of all the boards getting turned back on, some of the boards getting turned back on, replacing some of the boards with static boards. Just an update if you don't mind, would appreciate it.

So I would say two things I'm always consistent on over the last year-and-a-half. One is I always hate pacings. And two, I don't think I've ever given update on the resolution. I think I'm too smart to give an exact date on the resolution of LA. We continue to work with the city on legislating solutions that will have our digital boards back within the LA city limits. I promise you nobody wants that quicker than we do. If you look at it over the last six months, there's been two public hearings on a lot of digital billboards in the city of LA. There is a couple of those hearings come up before the City Council votes on the ordinance. At least, as of today, that vote is scheduled for sometime in the third quarter. As we've said before, and the reason why never predict an outcome here, this process takes time. We're not sitting on our hands. We are moving forward. We've been selecting to see permits, to divert some of the boards back to traditional vinyls static. I think we've mentioned that before. We had a total of 55 boards to date. It's not meaningful, but it's better than not having those 55 boards up. But just think about that as a parallel step we take, while we work through the legislative process. And remember as a reminder, we currently have 41 digital boards in the LA Metro area.

The next question in queue will come from Lance Vitanza with CRT.

I wanted to ask you a little bit more about programmatic buying. I think it's easy enough to comprehend the favorable volume impact that that is likely to have. But is there going to be, or likely going to be any impact on pricing? Is the CPM lower than on a traditional sales spot sold through more traditional means? And if so does any of that pricing pressure bleed through to the spots that you would sell on a more traditional basis?

No. Look I think it's actually just the -- let me just take a step back on programmatic, and I'm really am happy that you asked the question. So we have programmatic is already an important method of buying in digital display and video, and is now emerging in radio, and we are clearly leading that effort and help defining it and taking it, so as I said earlier, massive steps to revolutionize the buying process. And what's really important, and I think this really gets to your question is that as we expand these capabilities, it's quickly, we avoid, which we are going to avoid, to be clear making the same mistakes have been made in digital display. We identify the shortcomings of what happened previously in programmatic. And we're creating a platform that is not, just to be clear, that is not price oriented, but instead provides the best ROI for the advertiser. And what it's really about it's important that the programmatic that they have buying out business the smarts and differentiate the inventory options regardless of CPM. And again this is about identifying the best return, the best value for our clients and providing them the best inventory at the quality price. It's also important that to remember that we're activating user base psychographically that would automatically be triggering campaigns. You can trigger those campaigns based on another traffic patterns, purchase behavior, anything else in the environment, population, consumer trends and something. We're excited about. But what that all adds up to is programmatic buying which is usually more from both agencies, both the buyers and leveraging technology to provide more value to the buyers. It helps us -- by the way byproduct when you talk about efficiencies is to really free up sales people, it's not replacement for people. It is just allows the sales team to place more emphasis on creating innovative campaigns that go above and beyond just the physical ad placement, such as the delivery on a multi platform campaign n that incorporates everything from iHeart offering to include on air social promotions, personality endorsements, live events. But at the end of the day, again, and I've probably said this three or four times now, it's about the ability on a large-scale basis and a replicated basis to bring the benefits of who we are in and where we are, higher ROI, and better value to our clients.

So how did you develop the expertise for this? Did you bring people in, did you build it in-house? Are you using consultants?

Look, when you're look at every decision, every decision we make in this company which is to build our own, to buy something, and to partner. We've got on the in-house side, which is our model leadership, we've got a great team that's led by Brian Kaminsky, Darren Davis, Tim Castelli on the ad sales side, and Adam Denenberg who is our CTO came in from digital, and there is more people in that. We have a great team of leaders on the inside of the house. And then you look at the expertise, and then we look at the partner people. We are great partners. We look to partner people that bring value. We've raised the profile. We announced the deal, a few weeks ago with Jelli that we announced, I don't know, I guess three or four weeks ago, which was a deal that partner with Jelli on a programmatic and automated ad buying solution for broadcast radio stations. So that makes broadcast look like digital and Jelli is a cloud-based technology. I guess, last year we appeared exactly then we announced the partnership with AdsWizz to be more targeting. We continue to look for partnerships in terms of things that relate to data and data dashboards. So again, we continue to look, okay, these are our core competencies inside, these are niche from meeting our advertising needs, how do we marry those two. And we do every filter that says we're obviously going to build it ourselves, we're going to buy something, and we're going to partner. And it will be a combination of those three based on what the best solutions that's out there on a cost-effective basis.

If I can just ask one last housekeeping question on the pacings again. And I heard that on the iHeartMedia side you had some event shift into the quarter, some event shifting out of the quarter. Given the strength of the report, should I consider the net impact of timing changes to be favorable for 2Q '15?

I wouldn't read. You heard correctly. This happens from time to time. We've got two events that are now in their second year in terms of the awards, and then again they kind of change places here. In terms of the quarter, they were both great events. They have similar profiles in terms of being two of our big tent pole event, but each event has got a unique line of the sponsors, unique set of promotional deals, and unique set of revenue and expense considerations. Well, we really want to make sure just from the credibility with all of you guys, which is the most important thing we have is to core up the key items. So they may impact year-over-year in comparability at times. But we will just need to continue make you aware of them, it's going to happen all the time with us.

The next question in queue comes from Marci Ryvicker with Wells Fargo.

This is Stephan for Marci. The national trends at Americas outdoor have been weak for quite some time. Are there particular categories driving this or is it broad based?

I'd say probably the category that really is driving more than anything else is telecom. And we're better positioned than we've been before. And we look at our overall results, we had a good third quarter, we had a good fourth quarter in terms of CPM. The first half of the quarter, quite frankly, in national was strong in the second half of the quarter. We saw some good momentum in parts of January and February with March soften up with that. And again, in line what our peers have said, I think telecom really continues to be probably the weakest, if you had to pick on one category, and it's impacted our national outdoor business. We have launched, again, we're keeping our feet moving. We've also coupled initiatives at CCLA under our Scott Wells and Rocky Sisson and Gene Leehan, our management teams. We now are deploying solutions team, which is a team of account executives who work directly with CMO with the clients, alongside the agency to drive dollars into the sector. That's a real and important priority, because the dollars that ones can tap, we want to get at those dollars to come into outdoor. So we're trying to better job of capturing those dollars at the CMO level, again within client solution. We also have established a digital operation center, which gives us 24-by-7 coverage to drive digital campaigns that are driven from the center back from the earlier comment I made about lines blurring in the advertising world between local, regional and national. So this digital operation center provides a seamless experience, and let's is take advantage of less minute dollars that come in. And anything I would say, and I think this is a trend that all of our businesses is more and more dollars are being placed closer to air time or closer to time up on the billboard, and that's really a result of the digital age. That's really, as I talked about programming just to lead this all back together again on the iHeartMedia side of the business. Clearly, we're taking a hard look and I think we'll provide the same leadership role. And Bob and I have been talking to start on the outdoor side of the business from the programmatic standpoint. So again, I think we have the right assets. We will continue to capture this value and we are very, very optimistic about our asset base.

And then you mentioned some of the timing with national trends in Q1 kind of softening up towards the end. Did local mirror that or is that kind of the flipside of the coin?

You're talking about U.S. outdoor business?

Yes, so the local.

Local was strong. Yes, local was consistently the strong, as it was last year for us also. But local has been consistently strong and continues to be strong.

The next question in queue comes from Tracy Young with Evercore.

On the international side, could you talk a little bit about what you're seeing in Northern versus Southern Europe? And then also you seem to be rolling out digital, obviously at a much higher rate in international. Is it related to a project specific or is it easier to roll out in Europe?

As you guys saw picking up on really the great performance international, William and Matthew Dearden and Philippe and Bill, and the entire, our CCI International team has done another strong quarter with 7% growth. That growth was from both organic as well as new contracts. If you kind of look at it from a country basis, the top country growth for this quarter was Sweden, Italy and Norway; the U.K. was up also in Q1. And from everything we're hearing, the overall U.K. market is healthy. France was down a little bit on year-on-year basis. And this is where -- remember after the attacks in February, there was threats got made to a variety of establishments, including malls, which impacted throughout the advertisers spend. But overall mall business is very healthy as we go into Q2. We also had some nice growth in Australia and China overall. And in terms of the accounts, we're just being opportunistic. Remember, its digital displays as opposed to digital boards outside and it's really based on the contracts for winning and the opportunities we have. I don't think it's easier or not easier.

The next question will come from Aaron Watts with Deutsche Bank.

Just two on the media side. Rich, you highlight the gains you're seeing in listening hours on iHeart. Do you have a sense for where that's coming from? Is the listing pie growing or is share shifting from other streaming services or terrestrial? And I guess, if it's coming from terrestrial, how you think about $1 digital advertising versus $1 terrestrial advertising?

Look, total listening hours continue to grow. As you pointed out, our listening hours were up 17%. And by the way, I mean if you look at if you go back and you look at both broadcast and digital, if you go back any period of time, both pies continue to grow. So I think that's great. Digital is important for us, because the way to extend the reach of our traditional brand into new devices, where consumers expect to find us. And in terms of short the different economics and we need to be where our consumers are quite frankly. And if you're consumer, you don't really care whether you get it from digital or you get it from directly terrestrial you just want to know that you can get the product when you have it. And still the overwhelming amount is, I remind us all, the overwhelming amount of listening is still broadcast. And so the 90% of listening with digital being about 10% overall, and that 10% includes iHeart, Pandora, Spotify all the digital services. But broadcast is always an all-time high and it's overwhelming at 90% of the listening in the country.

And then one last one for me. Are you seeing any divergence in the performance of your largest radio markets versus your smaller or midsize markets? I've heard about weakness in New York. Curious if that's isolated or if there's something about the largest markets in general, secular or otherwise, that's causing weakness relative to smaller ones?

Look, we don't break out any of our individual markets. But I'm going to go back on and just point out what I said again, and in terms of our ability to attract great talent, and if you look at just what we did in LA, we are so lucky that we were able to attract Big Boy to come over in LA on 92.3. That really kind of realigned that station, take it to hip-hop. We became number two. I think we launch this station at end of February, became number two in about six weeks or seven weeks whatever time it is. In 18 to 34 was second to our station KISS FM, which was number one in the market. So if you wanted to see a sign about the health of broadcast radio, in the large markets whether you tend not to break our markets, just look at that as a case study example. And what you can do when you identify an opportunity of the right leadership. We've got Greg Ashlock and his team out there, the right leader in terms of Big Boy, and we've identified that there was a whole new marketplace.

At this time, there's no additional questions in queue. Please continue. End of Q&A

Well, thank you, everyone, very much. I am here, Effie is here, Brian is here, and on behalf of Bob and myself, we thank everybody for listening and your questions.

Thank you. And ladies and gentlemen, that does conclude your conference call for today. This conference will be available for replay after 10:30 AM Easter Time today running through May 30 at midnight. You may access the AT&T Executive playback service at anytime by dialing 800-475-6701, and entering the access code of 358000. International participants may dial 320-365-3844. Again, those telephone numbers are 800-475-6701 and 320-365-3844 using the access code 358000. And that does conclude your conference call for today. We do thank you for your participation and for using the AT&T's Executive teleconference. You may now disconnect.