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Clear Channel Outdoor Holdings Inc. Reports Operating Results (10-Q)

May 10, 2010 | About:
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10qk

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Clear Channel Outdoor Holdings Inc. (CCO) filed Quarterly Report for the period ended 2010-03-31.

Clear Channel Outdoor Holdings Inc. has a market cap of $3.62 billion; its shares were traded at around $10.18 with and P/S ratio of 1.34. CCO is in the portfolios of Jim Simons of Renaissance Technologies LLC.

Highlight of Business Operations:

Our SG&A decreased $6.4 million during the first quarter of 2010 as compared to the same period of 2009. SG&A expenses decreased $4.4 million in our Americas segment, partially as a result of the disposition of our taxi advertising business. Our International SG&A expenses decreased $2.0 million from cost savings associated with our restructuring program, partially offset by a $4.9 million increase from movements in foreign exchange.

As of March 31, 2010, there was $22.9 million of total unrecognized compensation cost, net of estimated forfeitures, related to unvested share-based compensation arrangements. This cost is expected to be recognized over a weighted average period of approximately three years. Included in direct operating expenses, SG&A expenses and corporate expense in the first quarter of 2010 is $1.9 million, $0.7 million and $0.1 million, respectively, of share-based compensation expense. Included in direct operating expenses, SG&A expenses and corporate expense in the first quarter of 2009 is $2.1 million, $0.7 million and $0.2 million, respectively, of share-based compensation expense.

Clear Channel Communications capitalization, liquidity and capital resources substantially changed due to the consummation of its merger on July 30, 2008 with entities formed by private equity funds sponsored by Bain Capital Partners, LLC and Thomas H. Lee Partners, L.P. Upon the closing of the merger, Clear Channel Communications incurred additional debt and became highly leveraged. We are not borrowers or guarantors under Clear Channel Communications credit agreements other than for direct borrowings by certain of our International subsidiaries under the $150.0 million sub-limit included in Clear Channel Communications $2.0 billion revolving credit facility and we are not a guarantor of Clear Channel Communications debt. The obligations of these International subsidiaries that are borrowers under the revolving credit facility are guaranteed by certain of our material wholly-owned subsidiaries, and secured by substantially all of the assets of such borrowers and guarantors, subject to permitted liens and other exceptions. As of March 31, 2010, the outstanding balance on the sub-limit was approximately $150.0 million, of which $5.0 million was drawn by us and the remaining amount drawn by Clear Channel Communications.

Net cash used for investing activities of $58.0 million for the three months ended March 31, 2010 primarily reflects capital expenditures of $49.3 million. We spent $24.7 million in our Americas segment primarily related to the construction of new billboards and $24.6 million in our International segment primarily related to new billboard and street furniture contracts and renewals of existing contracts.

Net cash used for financing activities of $70.5 million for the three months ended March 31, 2010 reflects payments on credit facilities and long-term debt of $29.7 million and $4.1 million, respectively, and net transfers to Clear Channel Communications of $37.2 million.

In addition to net cash flows from operations, another source of liquidity is through borrowings under a $150.0 million sub-limit included in Clear Channel Communications multicurrency $2.0 billion revolving credit facility with a maturity in July 2014. Certain of our International subsidiaries may borrow under the sub-limit at times which Clear Channel Communications has not already borrowed against this capacity and Clear Channel Communications is in compliance with its covenants under the revolving credit facility. The obligations of these International subsidiaries that are borrowers under the revolving credit facility are guaranteed by certain of our material wholly-owned subsidiaries, and secured by substantially all of the assets of such borrowers and guarantors, subject to permitted liens and other exceptions. At March 31, 2010, the outstanding balance on the sub-limit was approximately $5.0 million, the remaining $145.0 mill

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