Ladies and gentlemen, thank you for standing by and welcome to the 2015 Second Quarter Earnings Conference Call for iHeartMedia, Inc. and Clear Channel Outdoor Holdings, Inc. At this time all phone lines are in a listen-only mode. Later we will conduct a question-and-answer session with instructions given at that time. [Operator Instructions] As a reminder, today's conference is being recorded. I will now turn the conference over to your host, Effie Epstein, Head of Investor Relations. Please go ahead.

Good morning and thank you for joining our 2015 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 2015 financial and operating performances of iHeartMedia, Inc. and its subsidiaries, iHeart Capital I, LLC and iHeartCommunications and Clear Channel Outdoor Holdings. 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 or 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 risks 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 that 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 provided schedule to 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 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 viewed as of today July 30 and may no longer be accurate at the time of the 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 bringing together advertisers and consumers in creative ways across our entire platform broadcast radio, outdoor, mobile, social events, digital and TV. I'm right at my two-year anniversary at iHeartMedia Inc. range and I couldn't be more proud of the incredible progress that our team has made to build momentum across each of our businesses, all our products have strong financial discipline. At today's iHeartMedia, Inc. we offer what we believe is a truly differentiated value proposition for advertisers built on the power of sound and the power of outdoor and capitalizing upon the consumer trend of spending more time out of the house. We are bringing both the outdoor business and our iHeartMedia business into the digital age to the development of data and excuse me, data infused solutions for advertisers that we believe will provide the efficiency and ease of automated buying while freeing up our sales people to do what they do best, create relationships that extend beyond traditional ad buy. iHeartRadio, we are mobile of scale and continue to leverage the power of our on-air personnel we use to engage with consumers serving as their companions and trusted sources of information. And at outdoor, we are using technology to further amplify our mass reach. You have heard us say many times that we are one of a kind media company and we are. There is simply no other company that can do what we do. At the recent Festival of Media Global Awards in Rome, iHeartMedia is named Best Media Vendor of the Year in recognition of our work within the advertising community. Radio…

Thank you. [Operator Instructions] And our first question comes from the line of Avi Steiner. Your line is open. Avi, we can't hear you. Let's go ahead with to the second question. We'll come back to Avi.

Thank you. The next question comes from the line of Jason Kim. Your line is open.

Hey. Thanks. Good morning, guys. I got a couple of questions. So really over the past couple of quarters, we have seen some dramatic divergence in how your Media and Entertainment segment is performing, compared to most others in the radio sector. How sustainable is this trend in terms of iHeart continuing to outperform your peers. You've talked about your multiplatform approach and highlighting that iHeart as a brand in a much more holistic way to national advertisers. What inning are we in, I mean in terms of you guys cornering or your fair share of national ad dollars and your expectations for continuing to outperforming your peers?

Thanks, Jason, and good morning, everybody. Well, before – you're right – other than to say, I think, we're in a very, very early innings here. As you heard us say before Bob and myself, that we are significantly on the monetized, that's it for the most monetized medium in the United States. And our platform is unique, but maybe just to take a setback about if the industry itself and I alluded to this in my opening comments, and you just – just a little couple data points, when Nielsen came out with the total audience report, which I think maybe we've seen just to reiterate those points, on a weekly reach basis, we are, and in all my years of being in this business, and I am also have been kicking around this a long time. We have never seen stuff like digital radio, now we reach 93% of the weekly reach, televisions were 87%, smartphones reach 70%. So we are the vast, biggest national medium, and that may surprise you, and then when you take those numbers and go down to millennials, radio is still at 93%, TV drops, okay, drops to 76% and actually smartphones are ahead of TV at 80%. So first and foremost if you look at all the trends that are going – that are going through the right way. And then you take look at our channel, we're trying to capitalize on the brands that we built that's really speaks to the mission ahead to deliver the most engaged audiences through live content, through our DJ, through our programming against every platform and device and look I'm sure many of you I talked about it a little bit in my opening remarks, and then you talk about our International guys just came…

And our next question comes from the line of Avi Steiner. Your line is open.

Hey, Avi Steiner again. Can you guys hear me?

Yeah. We can hear you.

Thank you. Okay. Thanks for taking the questions. I have about four, and couple of them hopefully pretty brief. Just to be clear on the consolidated M&A pacings, 3.3, that did not include the $10 million political you referred to? And if so, do we think about that as having come in late in the quarter last year? And then I've got three more. Thank you.

Well, I'm not sure about the second one. We don't do pacings with and without political. So I'll just state it frankly, so we just gave you an absolute pacing number.

Okay. I'll go on to the next thing, quick nerve question. Can you talk about how you accounted for the Tower sale. I'm also trying to understand why we're excluding the lease expense. I know you touched on that but can you just go over that one more time? And the proceeds that you got in, did you get the full 369? And was there any holdback or the throw of that. And then I've got two more. Thank you.

Sure. Look on the Tower sale and we've talked about this, but happy to mention again. We continue to look – evaluate all our businesses and asset portfolios. And I think if you go back over the last couple years, you look at I think we've done a pretty good job of bearing sales of non-core assets. And by the way we're continuing to do that so there is life around here. This is the way generally Carrefour assets without impacting our operations. And because the transaction has no effect on our operations or on the Tower sale. We exclude the incremental lease expense more internal, external measurement of all demand in order to make consistency and compatibility. Again, this was really kind of prime and simple. It was a way for us to un tap – a way for us to un tap an attractive cost to capital. And I firmly said that before.

Okay. Moving on. Can we talk about perspective outdoor contracts for a second. So you mentioned France, which sounds like a win. There were some positive press. And I know you're not going to want to speculate, but if you can help us it would be great. There's some positive press around Los Angeles and then or maybe help us with the timing of the rate of release and then there was some press around the UK, which at least reflect a loss, but would have been negative for your guys had you won perhaps and also the underground contract coming up next year. So if can you talk about perspective potential win from outdoor, that would be great. Thank you.

Sure. Effie, I was hoping you could help me on this timing in LA, I'm never going to predict the time, but look, we continue to work really on legislating solutions and I think productively that a lot of our digital boards are back on within the LA City limits, and over the last six months, we completed our three public hearings and allowing digital billboards in the city of LA. We expect a couple more here before the City Council votes on the ordinance and based on everything we know as of today that's likely to be in the fourth quarter of this year. We've been very consistent, since the start of this journey that this process takes time. We're not sitting on our hands, we're keeping up our people in, so we're selectively keeping permit to revert some of the boards back to traditional model static signs, we've converted approximately 80 boards to date, 18, those numbers in front of me, 62 are up, over our existing digital places. Not a meaningful expense quite frankly from our perspective and the parallel stuff so we can all the work with the legislative process. And this is a real quick reminder, we have almost 40 digital boards in the LA metro area. So that's on the U.S side, on the International side, you know International Outdoor I think yesterday, just about one thing about America, and MPA, and then about London, and the London contract we've been actively about in the process there's not been a formal announcement from the transport to run that its already so it is really now color I can provide at this point. This is in the side the office, so we had a great win with our a great team in France, you know that we won the contract of a largest supermarket and mall chain in France, I mentioned that in our opening remarks, the Carrefour, that's up in January 2016, which complements our mall business in France. On Americas Outdoor, our U.S MPA contract New York the state, I think the obvious is critical our home market and this is an opportunity that we take very seriously.

Okay. Great. And I'm going to end it with this, and thank you, and apologize for the mix up in getting. But your debt has been trading below where you, I think, last came into the markets to buy, I'm curious how you think about those potential opportunities, and how you think about your liquidity generally, but we said today. Thanks a lot for the time.

Yeah. Thanks, Avi. This is Brian. Yeah, let me talk about this every quarter. But, as you pointed out, we've seen – we've seen a particular dislocation in trading levels particularly at some of senior debt, and we're watching that. And I wanted to be consistent with I think the statement that was made in the past, and that is we won't to be opportunistic with respect to urging the markets and potentially repurchasing debt, and at the end of last year, I think, we purchased $177 million, as we are feeling good about the liquidity position as we're making that a priority. And so, we continue to look at our liquidity. We continue to take actions to increase that liquidity, as they can win it's appropriate to do so, the Tower deal that we closed last quarter was a great example. And then, we're balanced that with capital markets and capital management opportunities. What I can tell you today is, we continue to look at opportunities, but we don't want to create liquidity of debt today that doesn't currently exist. So, I would characterize like that and we'll continue to focus on liquidity, but that look at capital management opportunity.

And our next question comes again from the line of Jason Kim.

Great. Thank you. I know this question comes up from time to time, but I wanted to ask a question regarding your views on owning all of your, three of your major segments together. Are there any significant synergies on having all the business segments under one umbrella, whether it was being radio, Americas Outdoor, and International Outdoor.

I'm sorry, I'm not sure I understand the question. If the question is you know in terms of operating U.S. outdoor and international outdoor, William Eccleshare, who is our CEO for the international business, goes over in car business, and then he and his team have done a phenomenal job in running that business. When you back to UK, earlier this year and really to focus a full kind of effort in driving those businesses, I think we've had four quarters or five quarters in a row of growth, top line growth there and do you think it's different to paid opportunity there in the 2017, so major companies have to operate, we go there with a full time focus. We've got now a full time focus, with Scott Wells, with Bob McCuin as I mentioned earlier, we're really, really proud about the off coming in both on his background and everything he accomplished it comes where, coupled with his history with us at iHeart and his ability to really hit the ground running, it's really not an overlap from an advertiser standpoint in terms of advertiser if you look at the path one. So we thought that the business would benefit from senior leadership quite frankly on a full time basis. On an iHeart Radio standpoint remember the benefit we have in iHeart, we are in multiplatform, fundamentally and we're driving our business, we're a multiplatform company. Our platform is unique as I think I answered when I said the first question. If anything what's happening and the reason we didn't get local pacing from this call again, is that lines are continuing to work, in and out there, and the advertisers are looking, and buying advertising this continuing to blur. I mean, it's interesting, as you look at…

Okay. That makes sense. And then in the past, you don't give a specific guidance, but any directional comments you can share with us in terms of your margin expectations for balance of the year?

No, of course for your – and those of you, Bob and I and historically now, I mean the rest of them and the team has done a great job here. It's with Bob and I and the rest of our whole operating committee and I heard Moody in our leadership in the U.S. and outside the U.S. So we're going to continue to watch perhaps we're going to continue to look for margin expansion, so we fully expect our margin expansion. We are spending on revenue efficiency initiatives in 2015 as we've identified opportunities to improve our business further. How much and where we spend will be driven by our Eaton business. in the first half of the year, the scores are down to $16 million down compared to what we had 2015 but we just hired head of digital ad sales in kind of built on, and that's going to work with already great team Jeff Howard, we hired some of the political asset in Cannondale as we approach our 2016 and the elections out there. So we're always going to be opportunistic while we see longer side of the revenue, but at the same point in time, as the business change we'll continue to need to look to maximize our efficiencies and operate in a more efficient way.

Our next question is coming from the line of Lance Vitanza. Your line is open.

Hey, guys. Nice job on the quarter. I wanted to ask you about the iHeart Radio app and I'm just looking historically and through Q1 registered user growth had been slowing as the platform expands, while total listener growth had been accelerating as engagement expands, that's kind of the pattern that we would have thought we'd see going forward, but obviously in the second quarter you returned to accelerating growth on both of those line items. My question is, is that sustainable or was there a sort of -- was there something a blip in 2Q numbers in terms of the registered user growth or do we think we can keep that going? And on the listener hour growth front, should we expect growth to continue to accelerate or are we sort of hitting a peak year in your view?

Look, we're really happy. We're really happy with our growth. Our total listening hours continue to grow. In the second quarter, our TOH was up 23%. If you look at and by the way, TOH is up and I think if you just look at it, the general area of listening, listening is exploding across the board. Again, go back to the earlier stats I said that came off from Nielsen in the first quarter in terms of the mass market medium that's out there for radio in terms of engagement with radio we're still at 93%, let's say with millenials by TV is down to 76% and smartphones are at 80%. But in general, listening is exploding, the on-air listening is up very strongly. Streaming is up over 50%, podcasts are up over 75%. Concerts, festivals are up over 30% on air. So it is all about content. It's being about what the consumers want to be. And we continue to grow our total listening hours as well as registered users. And we're – we just continue to look to capitalize on that and our differentiation in the market space quite frankly is our content. One of the things we announced this quarter is we extended our deal with Ryan Seacrest. That was very important to us. And whether it's Bobby Bones or whether it's Elvis Duran as we're seeing coming in this morning or Sean Hannity talking about the elections, we are bringing consumers what they want. We have Big Boy Now on the LA on Real. We combine them. We got The Breakfast Club. So if you look at the place we have in hip hop. So it's just constantly bringing consumers what they want where we want. And just as a reminder, when you look at…

Okay. Thanks a lot.

Your next question comes from the line of Marci Ryvicker. Your line is open.

Thanks. Few questions on the outdoor summit. Rich, I think you said in Q2 the Americas national was pretty weak, but it has turned positive in the third quarter. So just wonder if still there is anything under that change? And then, in terms of new senior management, I think you guys are pretty much done. Can you just talk about what the primary focus is going to be with regards to operations and for casual priorities? Thanks.

Sure. So, one thing and I believe I said Marci on your question turning to remarks. We're seeing some real strength in September and October and we see, you heard when I talked about the pacing number, I'm sorry August and September, I apologize. We're seeing some real strength, middle August, September there. So we feel good about that. I'm not going to comment anything detail on that mark-by-mark. We're seeing strength there. And looking back on the management front, as I mentioned earlier, we've got, Scott just came in last quarter as CEO. Our new president of Ad Sales Bob McCuin, we really feel very strong now, we have the right leadership in place. We have a great team there with Rocky Sisson who will continue with all of us, he's done a great job and Gene Leehan, well and the rest of the team to realize the full potential of America job to a business. And by the way, under Scott's leadership, we've done a couple of missions, just to go down at level. We've put in the client solutions team, the team of account executives who work directly with the CMOs of the client with alongside of the agencies to drive dollars into the sectors to maximize value. We've done the digital operation center, which gives us 24/7 coverage to drive digital campaigns from the center. And again, you're seeing that. I think you're starting to see that momentum that comes back into the business. And in terms of priorities, our job is to really allocate capital, get the growth back international that we're starting to see and get back to the historical performance and the historical margins that we know are in the outdoor business in the U.S.

Thank you.

And the next question comes from the line of Tracy Young.

Hi. Two questions on iHeart and then one on outdoor. Does not capital include both radio and events? And also are there any big events to highlight for Q2 in your pacing?

Well, no capital includes everything like connections to events. So I think from your perspective includes everything. Yeah, remember, what we use our events for our events are our focal points for – our events are really a important better part of our sales strategy, okay. So just to reiterate, again, the strategy is not turn events into individual profit centers, but to really use these tent poles as important ways to differentiate ourselves from sales, from branding, from promotional perspective, and include them as an important element in our most very important relationships. And also just I'll take a second and run everyone. In addition, we talk about a lot of tent pole events, we actually do – and our tent pole events I'm sorry, we talked about our Tempo Event from award show, we talked about Jingle Balls. We actually do 20,000 local events that include our news parties and other events across the U.S. And these events just have an incredibly positive effect on our advertising relationships. And quite frankly, our advertiser 00:49:05 to our advertiser partners. I mean, that's really, everything we're talking about today I should point out, they not only benefit us, they benefit all of U.S. stakeholders in the company. But they really benefit our advertising partners as well as the advertising agencies to work with them and their clients and help our advertisers around the scope of advertising dollars more effectively. And these events are an important part of that and they prove to be excellent way for us to penetrate new advertisers and brands, introduce them to our platforms as well as really get repeat advertisers back like Macy's and Pepsi and StateFarm and MasterCard. They're really just great examples of advertisers that continue to be with us as partners.

Okay. Thanks. And you also mentioned Carrefour, is there any way that we should think about that as we think about our numbers going forward for 2016?

Nothing really new right now. We were the incumbent in Carrefour and just feel great about that partnership and great about that one.

Okay. Thank you.

That concludes the Q&A portion of our call. Thank you every one for joining back.

And thank you, everybody. Really appreciate the questions very, very. Bob and I then the rest of senior management team, really appreciate the support and will be here for any other questions. Thank you very much.

Ladies and gentlemen, that does conclude the presentation here for today. We do thank you for your participation and for using our executive teleconference service. Today's conference will be available for reply from 10:30 AM today through August 30. You may access this replay by dialing 1-800-475-6701 and entering the access code of 364667. International dialers may access the same replay by dialing 320-365.