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 would now turn the conference over to your host, Eileen McLaughlin Vice President, Investor Relations. Please go ahead.

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 One, LLC and iHeartCommunications, Inc., Clear Channel Outdoor Holdings, Inc., and Clear Channel International BV. 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 One, LLC and iHeartCommunications, Inc. After an introduction and a review of the quarter, we will open up the line for questions. Before we begin, I would like to remind everyone that this conference call includes forward-looking statements. These statements include management's expectations, beliefs, and projections about performance and represent management's current 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 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 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 Acceptable Accounting Principles. We provided schedules that reconcile these non-GAAP measures with our reported results on a GAAP basis as part of our earnings press releases and the slide presentations which can be found on the Investor Section of our website iheartmedia.com and clearchanneloutdoor.com. Please note that our two earnings releases and the slide deck on our website are integral to our earnings presentation. They provide a detailed breakdown of foreign exchange and non-cash 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 speaks 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've achieved this quarter. With iHeartMedia extending its growth momentum, Americas 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 help consumers in this media. As we highlighted to you before, broadcast radio remains the U.S.'s biggest and most stable media 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% and 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 aged 18 to 24 now watch broadcast TV in primetime. And the 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 to iHeartRadio and our stations 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 and Google.…

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

Thank you for taking the questions. First one hopefully may be one, I assume based on some commentary in 10-Q there was legal expenses in the second quarter in corporate. But if you could tell us what those were so that might give us a sense of may be what those one-time costs were?

Hey Avi it's Rich. Good morning. So answer to -- so we don't break out other legal expenses by number of both, you could assume and everybody is aware that we've had some litigation activities in second quarter and some of that litigation activity currently and that's what resulted in increase in the expenses.

Okay. Thank you. The 10% note balance from assets right is $347 million, does this give you comfort with respect to perhaps how the orders may look in your financial position in the coming year-end filing?

Well we feel certainly better at $347 million reason why we should feel better is still several hundred million outstanding and we will continue to work to address that. But I think we 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, certainly feel better about where we stand today.

That is helpful. And then kind of as I model it NerdWallet share. You generated or didn't generate free cash flow this quarter in what historically has been lower interest, higher EBITDA quarters, so curious if their liquidity sources we may not be thinking about that you can pull or some assets held or something that otherwise may help in the back half as we think through the rest of the year?

No we are a big company, we have -- 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 made divested assets. So big company, lots of operations, I would say that we continue to evaluate where we haven't and sure there can be liquidity levers in the future. I think just look at what we have done in the past and we have seen the company do, be pretty creative on optimizing its balance sheet.

Hey that's fair. I'm going to end it on this one and thanks again for the time. I think Richard mentioned debt repurchases being a component of your strategic plan to strengthen cap structure you obviously bought in those 10s. I was curious if your view of what you want to accomplish maybe last year with the capital structure has changed given the higher prices we are looking at on some of the junior debt securities today?

Well I think there is a couple of components that rightsizing the capital structure and Richard certainly wants 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 no there are opportunities to capture discounts, to reduce cash interest expense, but you can read our trading levels today versus where they were in Q1, you know as well as I do as prices have gone up and thus the opportunities are less. But that doesn't mean there aren't opportunities made us to think about them a little differently, be a little choosier about what we select to do, be a little more patient, we continue to have constructive dialogues with investors that are willing to have constructive dialogues. That led to an opportunity post Q2 as we've talked about and we will continue to have those discussions and deploy our excess liquidity in the best way that we view possible.

No hey Avi, just one thing I would say in summary to I think kind of wraps up a bunch of your questions. We are and I think as evidenced by the results, as Brian alluded to continuing to focus, driving the operations of the company in the environment that we operate in, continue to outperform, continue to outperform in marketplace and at the same time, we are looking to optimize the capital structure and I think if you go back, I think, I noted upfront is my third year today, probably like almost to the day anniversary here. And if you look at the optimization of the capital structure you pointed out a couple of regional book back in number one, the sale of outdoor stock were back to the Australian-New Zealand JV that we had the radio interest in benefiting and doing good job in monetizing to recently selling their non-strategic assets for the outdoor company in nine markets where the growth great for the buyer, growth for the seller, [indiscernible]. And so you could rest assure that's just kind of daily, it's either the other day we drive operations and we get profit margin balance sheet on a daily basis.

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 you are you seeing, what are you hearing out there in terms of your political revenues outlook as we closer to November?

Well look it's early in the political cycle as we all know or anything more than we already including what we all read and heard this morning in the papers. I think the only thing to do now is being not very exciting but pretty unpredictable election cycle. In terms of what we can control may and just also as we remind that the bulk of our political revenue as we have always said earlier is going to come in Q4 of this year. We are very confident in our Houston-based hotels and we've talked about this a couple of times the last few quarters, we hired a political media veteran Kenny Day, he and his team are just doing an outstanding job and we have pretty high expectations in more than two hotels, limited expectations and they have done a great job in keep broader and mobilizing our local seller consistent campaigns not just the national campaigns but also the local campaigns and targeting specific demo audience reach. And I can say here we are confident that we think we're well positioned to maximize our share of local ad spending. Clearly it's been a little bit slower as you know I think well in your question then the last hold [ph] until election year and even in the first quarter pretty normal for spending. We've slowed down, we've seen other times before convention almost a repeat historically the majority of the spend we encouraged in the fourth quarter, So we continue to be optimistic based on the selling machine that we built led by Henry Davidson [ph].

Thanks for that. And when we look at your CCO Americas segment margins has there been a lot of changes in your revenue composition that would put your core margin profile much lower than they were in the pre-recession, so your segment margins in the CCO Americas side were as high as mid-40% before the downturn and 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 a medium to long-term margin profile can look like for CCOA going forward?

Sure it's a couple of different points. So first and foremost I've talked this about before with Scott Wells, Bob McCuin the rest of the Outdoor team and I think six, nine months ago, when we made -- when we did the changes to doing inside the [indiscernible] between we talked about that we would start to see improvement and I think if you look at the numbers today, delivery on apples-to-apples basis ex-FX revenue growth in Americas Outdoor is 4.6% or demand growth of 5.6%, we feel good about that. And so that's also watching move of continuing to challenge our working with the outdoor market team on streamlining this organization. And like I said I think they've done outstanding job in the last six months and received some manifest itself and your numbers you add to that, so that from an operating standpoint, there has been some change in mix. Remember that we will -- we still are down on the LA, we are still down on the LA digital board and just so although we got 50 digital boards in and around the LA market and we have been able to convert about 80 of the digital boards in LA back to print temporarily, so we are trying again to get the best out of that asset mix that we can right now but we are still down in digital boards and we are not up to where we need to be. Although I will mention this is a side, we've got a great new offering which I pointed out in the script, in the earnings conversation we have seven new wallscapes in both Sunset Millennium Premier real estate project in West Hollywood, so we feel great about that. And we also by the way last piece is we also have forensic contracts that we had in the past which operated slightly lower margins. So longwinded answer of course it's a mixed bag but I think you should feel good about continuing election of the business.

Got it. And then just one question for Brian on the balance sheet given just lower amount of debt outstanding or accounting view in 2018 now, what's your current thought process regarding taking advantage of liability management transactions other than your new debt at maturities?

It's good question, not always. I have always kind of had to position you don't want to create a liquidity problem when you otherwise didn't have one and so having some of the 18 stack taken out certainly it's helpful. But you know we still -- we still need to focus on liquidity first and make sure that we are comfortable with respect to the investments we want to make and making sure our operations flow smoothly between now and our debt maturities and making sure that we can adequately address our 2016 and 2018 debt maturities. So again I want to keep an open mind and look at all opportunities, feel a little better about 2018, there is still some maturities and of course we have got the 2016 maturities as well but we think are manageable but we want to make sure that we don't create that liquidity event. 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 opportunity but we never want to forego the security that we feel on our liquidity position.

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

Hi guys. Couple of questions from me, the first on core trends, I found your comments around the outlook, just a little bit ambiguous and that you referred the 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 the pacings it just, it was a little bit pleasing to me.

Well so I think Lance two separate things, right. As I always point out and I know you guys I'm sure try to [indiscernible] pacings are just a snapshot in the given point in time. And I would and my only point on bringing up late placing advertising is I think we are all seeing in the media industries and I followed and obviously talking to everybody else in the media industry, we can overview uses as well as the ones that just came out this morning. I think there is two things. One is we're all experiencing later placing media which I think goes to the point about pacing has been just a given point in time. And then I think the other piece out there is just about the general comment, there is lots of factors affecting it, so I don't think what I'm saying and quite frankly I'm sure I'm saying is no different than you're hearing from the rest of the media industry that's out there. We are all going with the election and the uncertainty around that, we all going with the Olympics and the uncertainty around that, we are all looking at what's happening with GDP growth and again we are looking at both here and what happens outside the United States because of CCI. So I think the only point that you hearing me say is there is lots of moving pieces here in terms about the future, some of them are in our control and some of them are out of our control but one thing which I pointed out in my opening remarks, we are laser focused on driving revenues in this environment and in many environments that we operate in. We are laser focused in managing our cost base to…

Well that's a good segway, 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 I mean are they surprised by these numbers, do they push back on these numbers or is this widely understood at this point?

Well first of all our case and perception to when you say not understood in the marketplace, so let's just talk about in terms of the marketplace. One is again these will -- just to be clear, these are not like some other companies put out start generate when we do yields and numbers that are out there. And so the relevance of the medium to the consumers, to the listener getting our products to the listener whatever they are which is what our job is and to drive the ratings and then drive the monetization of those ratings, I don't think there is any confusion from the consumer standpoint in the marketplace out there as evidenced by the listening numbers as evidenced by our ratings that are up year-over-year. I don't think there is any misconception from the channel whether they are DJs in job, for us whether it's Elvis or Ryan or big boy or all of our guys relevant of our DJs or special source with best friend next to you in the car which is what we are and the engagement of our audience and I think there is any confusion there, just I think I pointed this out in my opening remarks, take a look at the iHeartRadio Music award this year, we had 115 billion -- 115 billion social impressions and to put that in context the Grammy's had about 30 billion or lower the academy is about 40 billion. So we had almost four times the Grammy's, three times the academy awards which again shows you how we gauge our audience is in our stations and it shows you how we engage people are with the media. And then when you go to the advertising side which is again our biggest source of upside is with all of us success we've so widely under-monetized which as I have said before, Nielsen says on average we're 6 to 1 ROI, so fairly dollar in advertising gives us on average return on investment just hard facts about everything else on average we give 6 to 1 back and you can see by our results and our performance we are continuing to work through and work with advertisers in continuing to drive results out there. And the good news is we have got all the operating results to drive the advertising revenue and also we have a lot of upside here. Why wish we afford a long sure, but I think again if you go back as I said this is my three year anniversary, if you go back over time and you look at the progression on and since Bob and I have been here learning this company, if you go through 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, we will continue to see steady progress.

Well and that's great, I appreciate the explanation. Just I was talking about confusion in the capital markets, not the other markets, but in any case I appreciate that the clarification one last question for me and I apologize if I missed this. But Brian, how did you finance the purchase of the tens, did you use, just in case or did you wind up borrowing against your selling some of the outdoor common stock at broader media? Thank you.

Yes, we use cash.

Existing cash?

That’s correct.

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

I don’t think we disclose what’s in unrestricted subsidiaries, I mean there is a imagination you can go through the balance sheets that the segment disclosure that we have and you can estimate what non-hearing forecast and you can back at outdoor and that gives you non-hearing to our non-outdoor cash and that’s a proxy that people use for the cash and unrestricted subs and it's not a bad way to estimate what cash is in our restricted subs but we don’t disclose assets or update assets in our unrestricted subsidiary.

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

Good morning. It’s Stephan on for Marci. I’d like to dig into the pacings a little bit at outdoor. It sounds like Americas is decelerating. Are there any comparability items here?

No, I mean again I’m going to say what I said in my opinion remarks and I'm going to what I just said answering the question before pacings are snapshot in the period of time, they don’t include everything they do as a company. The future of pacings have been adjusted for the sale of the non-strategic assets that are out there. And again as an overarching comment there is more advertising being placed in months in quarter closure, closure to the time that the advertising is shown.

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

Yes, I mean but there not, there is not being -- 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 out for outdoors America or IR, what percentage of revenues?

We don't break it out, and we don't -- we break out the numbers digital board, which we've mentioned, but we don't break out because we don't look at our business that way. We're selling results to advertisers and that's what advertisers are focus on. So we don’t break that separately the digits of results in any of the segments of our company.

And 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's the plan for the bonds you’ve repurchase will they remain at the unrestricted sub and then also will they be canceled or retired or remain outstanding?

We have not canceled 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 is no long term determination on what to do with the bonds, but currently they remain outstanding at the unrestricted subs.

Okay, and then, Rich, just one for you. The 16% gains and iHeartRadio certainly seems like a positive data point, just serious about your monetization efforts around that increased listening on that platform and also maybe you could talk about Ad Board on iHeartRadio as well.

I'm not call clear the question is on the tab load. We did, we achieved I think and thank you for saying that about 16% gains we achieved also noted the highlight we achieved $88 million iHeartRadio registered users as of June – the end of June which is 23% growth on year-over-year and we've had over a billion downloads of uploads of our part. So we feel great about that. And again on the monetization front as I said I think we continue to do a good job on the monetization front in terms of monetizing or listening at the same time our greatest opportunity if we are widely under-monetized based on the effectiveness of the moving which I want to do a little bit before and I think in response to that I can Lance's earlier question.

We have no question in 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 conclude your conference. We do thank you for joining and using AT&T Executive Teleconference. You may disconnect. Have a good day.