Clear Channel Outdoor Holdings Inc (CCO) 2011 Q4 法說會逐字稿

Welcome to the CC Media Holdings and Clear Channel Outdoor Holdings fourth quarter earnings call. At this time all lines are in a listen-only mode. Later we will conduct a question and answer session with instructions being given at it. (Operator Instructions). As a reminder, today's conference is being recorded. I would now like to turn the conference over to our host, Brian Coleman, Senior Vice President and Treasurer. Please go ahead.

Good morning, and thank you for joining us for the year end and fourth quarter 2011 earnings call. On the call with me today is Tom Casey, Executive Vice President and Chief Financial Officer. During today's call we will provide an overview of the year end and fourth quarter financial and operating performances of CC Media Holdings, Clear Channel Communications, and Clear Channel holdings. For purposes of this call when we describe the financial and operating performance of CC Media Holdings we also are describing the performance of its subsidiary, Clear Channel Communications. After Tom's comments we will open up the lines for questions.

Before we begin I would like to remind everyone that this conference call may include forward-looking statements that involve uncertainties and risks. There can be no assurance that management's it expectations, beliefs and projections will result or be achieved, or that actual results will not differ from expectations. Please see our annual reports on Form 10-K and our quarterly reports on Form 10-Q filed with the Securities and Exchange Commission for a discussion of important factors that could affect our actual results.

Pacing data information may be mentioned during this call. For those not familiar with pacing data, it reflects revenues booked at a specific date versus the comparable date in the prior period and may or may not reflect the actual revenue growth at the end of the period. The Company's revenue pacing information includes an adjustment to prior periods to include all acquisitions and exclude all divestitures in both periods presented for comparative purposes. It also excludes the effects of movements in foreign exchange rates.

During today's call we will provide certain performance measures that do not conform to Generally Accepted Accounting Principles. We have provided schedules that reconcile the non-GAAP measures with the reported results on a GAAP basis as part of our earnings press release, which can be found on the investor sections our websites. A webcast of the call and the earnings press releases that were issued today can be found on the investor sections of our websites at www.clearchannel.com, www.clearchannelOutdoor.com orwww.ccmedia.com. A replay of the conference call will be available for a period of 30 days.

With that, I will now turn the call over to Tom Casey.

Thank you, Brian, andgood morning, everyone. As we look back at 2011, we delivered another year of solid performance, despite the limited economic recovery. Especially important has been our ability to keep generating improved operating margins thanks to our strategic initiatives and past restructuring efforts.

During the year we strengthened our business in several important ways. We introduced new products like our new iHeartRadio application, which offers more than 800 live broadcasts and digital-only stations from 150 cities, plus the ability to create custom radio stations. As part of the new iHeartRadio launch we staged the iHeartRadio Music Festival in Las Vegas during September, the biggest live concert festival in radio history.

We launched a series of new initiatives, including strategic partners and distribution, and national programming platforms. These groups help enable us to use our scale to maximize opportunities for all of our partners, including advertisers and the music companies, as well as the technology, automotive, consumer electronics, and other industries.

We he made significant new investments, such as installing 242 new digital billboards in North America during 2011,while expanding our digital footprint in several international markets, including Sweden and the UK. On top of these efforts, we continue to deploy capital effectively and pursue strategic acquisitions. And at the same time we stayed discipline on expenses while reinforcing our leadership team with executives who have exciting plans for the Company. They include Bob Pittman, who became CEO of CC Media Holdings and Executive Chairman of Clear Channel Outdoor Holdings, and William Eccleshare, who now oversees all of Clear Channel Outdoor Holdings as its CEO.

Let's turn to the Company's performance in the fourth quarter and full year. I will focus on our results for CC Media Holdings and Clear Channel Outdoor Holdings, and wrap up with a review of our capital spending and liquidity before we take your questions.

In the fourth quarter, our CC Media Holdings revenues increased to 1% to $1.65 billion, driven by an acquisition of the complementary traffic operations to our existing total traffic network, and growth across our digital platform and street furniture assets despite the limited economic recovery and advertising market. The quarter's OIBDAN totaled $537 million, representing a 7% increase over fourth quarter 2010. Operating margin, which is our OIBDAN as a percent of revenue, was approximately 33%, an improvement of 170 basis points year-over-year.

For the full year, CC Media Holdings reported revenue of $6.16 billion, an increase of 5% from $5.87 billion reported for 2010. Revenues grew across our businesses, fueled primarily by our digital access and street furniture products as well as our traffic acquisitions. In addition, our results benefited from the gradual advertising improvement in the US and around the world.

The growth of revenues along with improved margins resulted in 2011 OIBDAN at $1.83 billion, an increaseof10% over the $1.66 billion generated from 2010. Thanks to the strong operating leverage in our model, we were able to convert a substantial portion of our 2011 revenues into strong cash flows from our business operations, with overall OIBDAN as a percent of revenue at approximately 30%, representing 140 basis points improvement from 2010, which was approximately 28%.

Given the slow economic recovery, we are very pleased with our results, and they illustrate the leadership positions we hold within our industries and benefits of the global diversification of our assets. Over time we are confident that our strategic focus, along with investments and improvements in core businesses, will continue to strengthen our revenues and competitive position.

Now, to the performance of media and entertainment operations. As you know we are transforming our radio operations into a media and entertainment business to embrace new media, ensure that we are everywhere consumers expect to find us and support advertising and strategic partners. That's why we are making our content more accessible to listeners over broadcast, mobile and digital platforms, providing customer focused technology and delivering the radio experience through entertainment, news, sports, talk and crisis information nationwide, whilecontinuing to serve our local communities with best in class talent, resources, and support.

During the fourth quarter our media and entertainment revenues increased 2% to $791 million, reflecting the traffic acquisition earlier in the year as well as growth in digital revenues, partially offset by a decline in political advertising spend, which totaled approximately $7 million in the fourth quarter of 2011 versus approximately $32 million in 2010. Also for the fourth quarter revenue and expenses associated with the traffic acquisition were $38 million and $36 million respectively. Revenues declined 3% excluding the traffic acquisitions revenues and were about flat when you further adjust for the decrease in political spending in 2011.

Our operating expenses decreased 3% during the quarter, mainly from lower salary and commission expenses and $19 million decline in music license fees related to a settlement of the 2011 and 2010 license fees. This decrease in expenses was partially offset by higher expenses from the Company's traffic acquisition, as well as the investments associated with our digital radio services. Excluding the traffic acquisition, expenses declined 11%, or 7% when you adjust for the music license fee settlement.

For the quarter, media and entertainments OIBDAN rose 11% to $327 million. Among the best performing advertising categories in the quarter were financial services, retail and restaurants, while there were declines in telecommunications, travel and tourism in addition to political. Looking back at our year end digital metrics, there were more than 48 million downloads of the iHeartRadio app, and our internal measurements showed that we had about 37 million monthly uniques for all of our digital products and brands.

For the full year, media and entertainment revenues rose 4% to $2.99 billion, driven primarily by the Company's traffic acquisition and higher digital service revenues. These revenues increases partially offset by the decline in political spending compared to 2010. Excluding the traffic acquisitions revenues noted in the earnings release, revenues were up approximately $11 million.

Overall, 2011 operating expenses grew 3% versus the prior year. Expenses declined 2% excluding those from traffic acquisition. The decrease in expenses was related primarily to lower selling and music license fee settlement mentioned earlier, partially offset by the higher digital, involving such initiatives as the new iHeartRadio player and the iHeartRadio music festival.

Media and entertainment OIBDAN for the full year rose 5% to $1.16 billion to $1.1 billion in 2010. Underlying the performance is continued improvements in the ratings and the outperformance compared to the overall radio industry. The key to this success is our diverse national and local footprint, leading content, effective yield management systems, innovative digital platforms and the strategic relationships with our marketers and advertising partners. As for the first quarter of 2012, it is still quite early in the year and so our visibility is limited. At the end of last week, media and entertainment revenue pacing up approximately 1% for the quarter as compared to it the prior year period. And that does exclude the traffic acquisition.

Now let's move on to the Outdoor results. Clear Channel Outdoor Holdings reported revenue of $816 million in the fourth quarter, an 3% increase over the $793 million reported for the -- for 2010 fourth quarter. Excluding the effects of movements in foreign exchange rates, revenues rose 2%. The higher revenues, along with continued margin improvements, resulted in Outdoor's OIBDAN growing 10% versus the year-ago period. OIBDAN totaled $229 million for the quarter, compared to $207 million in the fourth quarter of 2010. Our operating margin reached approximately 28%, representing an improvement of about 190 basis points compared to the 2010 quarter. Excluding the effects of movements in foreign exchange rates, OIBDAN grew 9%.

For the full year, Clear Channel Outdoor Holdings revenues grew 7% to $3 billion. This increase over the $2.8 billion reported in 2010 resulted from growth across our bulletins, airport and street furniture products, particularly in digital displays. Excluding the effects of movements in foreign exchange rates, revenues were up 4%. The higher revenues along with expanded margins resulted in OIBDAN growth of 15% over 2010. OIBDAN totaled $745 million, compared to $648 million in 2010. Excluding the effects of movements of foreign exchange rates OIBDAN climbed 13%.

During the quarter, Americas' Outdoor revenue decreased 1% to $359 million. Revenue growth in our bulletin displays, especially digital and our airports, were offset by revenue declines in our poster and mall displays. America's operating expenses were roughly flat, and our OIBDAN declined 2% to $142 million. The stronger advertising categories include health care and medical, entertainment, retail, education and restaurants.

As I noted earlier, we continue to see great momentum in our rollout of digital displays. By year end we totaled 857 digital billboards in 37 US markets, including 89 displays installed during the fourth quarter. Moving forward, weexpect to deploy 150 or more digital billboards across the US during 2012, and we will continue to look for more opportunities to expand our digital footprint.

For the full year, Americas' Outdoor revenues increased 4% to $1.34 billion as a result of higher revenues across bulletins, airports, [shelter] displays, especially digital. Operating expenses rose 3% to $825 million for the year versus 2010. These higher expenses reflect an increase site lease expenses associated with greater airport and bulletin revenues, particularly from our digital displays, as well as higher commission expenses related to increased revenues. The Americas' OIBDAN for the year total $512 million, an increase of 4% compared to $492 million in 2010.

We are pleased to see strong start for the Americas in 2012. At the end of last week it was pacing approximately 5% for the first quarter as compared to the prior year period.

Now let's talk about our international results. During the fourth quarter international Outdoor revenues rose 6% to $457 million, resulting from its strength in street furniture revenues across various countries, including China, Sweden and Australia. Excluding the effects of foreign exchange, revenues up 5%, operating expenses increased 4%, and OIBDAN climbed to 11% to $110 million. Operating margins improved 120 basis points compared to the fourth quarter of 2010, as we continue to maximize our operating leverage in our international segment. Excluding the effects of movements in foreign exchange rates, OIBDAN grew 9%.

For the full year, international Outdoor revenues were up 11% to $1.67 billion, reflecting primarily higher revenues from street furniture across most countries, particularly China and Sweden. Partially offsetting this growth were declines in billboard revenues across several markets, such as Italy and the UK. Revenue growth excluding the effects of foreign exchange rates was 5%.

Operating expenses rose 8% to $1.34 billion compared to 2010,attributable mainly to higher site lease and selling and marketing expenses associated with the growth in revenues. Also contributing to this growth was a $6.5 million increase related to the unfavorable impact of litigation.

Led by revenue growth from the Company's street furniture business across a number of countries, international OIBDAN grew 23% versus 2010 to $323 million. Operating margins increased to approximately 19%, representing 190 basis points improvement over 2010 and an 820 basis points improvement from 2009. Excluding the effects of movements in foreign exchange rates, OIBDAN climbed 17%. Despite the challenges that our international team faced in some European countries, they continued to execute their strategic plan and delivered another great quarter to cap off a terrific 2011. They benefited from a strong leadership and diverse geographic footprint across 30 countries in Europe, Asia and Australia.

As we enter the first quarter 2012 our international business is still being tested by the lingering economic uncertainty in Europe and visibility does remain limited. At the end of last week international revenues pacing approximately flat for the first quarter compared to a year ago.

Let's move on to capital. Clear Channel Media Holdings total capital spending for the year approximately $362 million, compared to $241 million in 2010. About $291 million was in the Outdoor business and included the domestic buildout of our digital billboard footprint and various street furniture and transit contracts internationally. As we previously mentioned, we expected 2011 capital expenditures somewhere in the range of $300 million to $350 million, so we ended up slightly above that range, as we saw additional opportunities to invest throughout the end of the year.

For CC Media Holdings in 2012 we expect capital expenditures to be within the range of approximately $350 million to $400 million, and that 75% to 80% will be in the Company's outdoor business. As you can see from our spend in 2011 and guidance for 2012 we are continuing to deploy capital to further strengthen both our media and entertainment and outdoor platforms, including such initiatives as iHeartRadio and outdoor digital displays in the US and internationally.

In addition to capital deployment, we have also been proactive in managing our capital structure. In February and June of 2011 the Company's subsidiary Clear Channel Outdoor Inc. obtained certain amendments to its credit facilities, which provided for additional financing flexibility and issued a total of $1.75 billion aggregate principle amount of 9.0% prior to guaranteed notes due in 2021. Proceeds from the note issuance were used to refinance 2011 and 2012 note maturities and portions of the 2014 and 2016 bank maturities.

As of December 31, 2011, CC Media Holdings total debt stood at $20.2 billion. Clear Channel's leverage as defined under its credit agreement at the end of 2011 was 6.9 times, compared to 6.7 times the year before. And cash on the balance sheet at year end totaled $1.2 billion. As of December 31, 2011, CC Media Outdoor Holdings net debt amounted to approximately $2 billion, and leverage under its indenture was 3.2 times. And cash on the balance sheet at CCOH was $543 million. With very little debt maturing before 2014, we remain focused on proactively managing our capital structure while delivering strong OIBDAN and cash flow for our business.

Let me close by saying that we are very pleased with our performance in 2011. Our revenue growth reflected a gradual improvement of the overall ad market, and we are encouraged by our results across our diverse global portfolio. Looking ahead, while the economic recovery has been slower than expected, we are optimistic about the early trends we are seeing so far in 2012 and believe our businesses are well positioned to continue to deliver strong OIBDAN and cash flow.

Given our competitive position, continuing innovation and commitment to managing costs, together with Bob's intense focus on securing new advertisers, marketers and other partners to utilize radio and outdoor assets; and as well as John Hogan's leadership in reinventing our media and entertainment operations; and William Eccleshare's leveraging of our Outdoor global scale; we believe that we can keep driving solid returns across all of our businesses. Bob, John and William make up a great leadership team that gives us confidence about our future success.

That ends my prepared remarks. Operator, we can now open the line for questions.

(Operator Instructions). Our first question will come from the line of Marci Ryvicker. Please go ahead.

Thanks. Good morning. I just wanted to dig deeper into Americas division in Outdoor. So for Q4 you'd been pacing flat. You ended up slightly down. Can you talkabout what happened? Maybe address local versus national, occupancy versus rate?And then there was tough auto comps. So have those eased?And moving to Q1 can you address the same issues in terms of pacing; national versus local, auto versus rate, and did that auto contract come back?

Hey, Marci, a couple of things. One, when you look at our pacings that we gave you, obviously that was at a point in time, came in at 1% negative. When you adjust for FX, it's 0.5%. So we feel we are pretty much in line with where we thought we would be. We would like to have it obviously higher, but pretty much in line.

Not a lot changes really through the fourth quarter. I would say again pretty consistent as we highlighted on our remarks. We did see health care and medical strong, entertainment was strong, and on the weak side telecommunications, and automotive was a little weaker, but overall kind of in line. As we look to the first quarter though, as we said, up 5%, so we are feeling very good to the start of the year. We are seeing good strong growth in retail and media, health care and medical. Some of the weaker signs continue to be telecommunications and some of the beverage companies. But overall we are feeling good about where we are starting the year.

Have you seen a big divergence in your local business versus your national business in those categories?

No, we have not seen a big diverse growth rates.

Is it fair to say they were -- they're pacing similar in Q1 then?

Yes, they are. They're just about the same. They ebb and flow, but some start stronger and get -- or start a little slower and get stronger, but overall right that the point they are about the same.

And one last question. You talked about your outlook in 2012 for digital. Do you have a total target either in terms of a total number of boards or maybe penetration across your markets for digital?

Well, we do. We track this very closely. As you know, most of our limitation on the number that we have is mostly due to the -- getting the various permits around the country. But obviously we have got a number of initiatives in a number of markets across the country of where we want to grow, and then what we are doing is working through that. So we have given you 150 for the year. Obviously if we can do better than that, we will.

As you recall last year we did significantly more than we had anticipated, again,because we saw some great opportunities. For example, in Dallas we had a significant amount of permits approved in the fourth quarter. So we built them out. But it is a number that we think we can -- we don't have really any other limitations as far as building it out or capital or anything like that. It is really just getting the permits.

Great. Thank you so much.

Our next question will come from the line of James Dix. Please go ahead.

Thanks very much. Good morning, Tom. Just three questions I guess I have. First, just again on the Americas, are you seeing any difference either in the fourth quarter or in your first quarter pacing in terms of growth for the larger versus the smaller markets in your plants?

And then second, just if you could give some outlook for operating expenses or expected margin improvements as we look forward into 2012?

And then my last question is just I know over the past year the parent has purchased some shares in Clear Channel Outdoor. Just wanted to know kind of what the criteria were for share purchases there, and what we might expect in terms of capital deployment for those share purchases going forward?Thanks.

Thanks, James. Again, on the first quarter versus fourth quarter, clearly as we said earlier with Marci's comment, we didn't really see any real change in the pacing that we had given in -- as part of our earnings call for the third quarter. Obviously we continue to push hard. Keep in mind that the fourth quarter comps were a little more challenging, so that may have put some pressure on the actual reported number, but when you put it into math it is only about $3 million. When you look at the first quarter though, again we are continuing to see great growth, up 5%. We like to think that will continue. And so we are cautiously optimistic. Obviously visibility in this market is challenging, but plus 5% feels pretty good.

With regard to margins, this has been an area we have been focused on for quite some time. When you think about the margin expansion we have had in the total company for CCME, up about 300 basis points in operating margin. We think that is a terrific story and really reflects the efforts we have had. The expense management and revenue focus we have in this Company is very, very strong, and we like to see ourselves continue to expand those margins through additional growth and operational effectiveness.

Finally, on the share repurchase, we have had a long-standing belief of effectively deploying our capital, and that includes not only growing the business, but also putting it to work in the areas of repurchases. That has been in the debt area as well in the equity area. We continue to see opportunities, and we take advantage of them when we do, and so we did buy back some shares during the quarter. Given the prices of our stock at that point for CCOH, we did repurchase some shares.

So you will see us continue to be proactive managing our capital, and I think we have done a pretty good job of taking advantage of the market and being aggressive when necessary.

Tom, just one follow-up. I guess my question on the first in terms of growth was more did you see in the fourth quarter any significant differences in growth between your larger markets versus your smaller markets in the Americas? And I guess a similar question, in terms of large versus smaller market growth in terms of our pacing in the first quarter?Thanks.

Yes, and again, we really have not. I would say that it has been pretty consistent year-over-year -- quarter over quarter. So I don't have much else to share with you.

Similar for local versus national as well?

Yes, that is what I'm referring to, yes.

I thought [the smaller markets], like top ten versus the markets at 20-plus or something. It sounds to me like you are seeing fairly similar growth across everything.

Yes, clearly some markets obviously are stronger than others, but I think again from a national/local standpoint, we are not seeing that significant of a difference. I think that we have had pretty consistent, within a point or two of local versus national. So again, we feel pretty good about that. As I said, the national business started off a little slow in the beginning of the year and has continued to grow week to week in the first half of -- excuse me, first quarter of 2012.

Great. That's very helpful. Thanks very much.

Our next question will come from the line of Avi Steiner. Please go ahead.

Thanks for taking the question, guys. A couple on radio, and then a cap structure question. Just looking ahead on the expense line in radio, how do we think about that directionally given the settlement, which I assume was one time in Q4?And then secondly on the radio before my cap structure question, canyou talk about how much revenue you are getting from the digital radio is now and maybe iHeartRadio specifically, given the relaunch last year and the partnerships you signed with other broadcasters? And then I will come back for one more. Thank you.

First on expenses, the radio team has done a terrific job in managing their expenses. We obviously did get some benefit from the settlement in the fourth quarter, but I would say they continue to show pretty significant improvements. And you look at the year-over-year numbers, their margins are still up a point from 38% to 39%. So we are continuing to see even on small amounts of revenue growth pretty significant operating leverage. You can see obviously for the fourth quarter, 2% topline, 10% bottom line. This business has a lot of operating leverage, and we expect them to continue to grow their topline while managing their expenses. And that's -- in addition, that is including significant investments we are making in the digital area that you mentioned.

Keep in mind that the digital business today -- the iHeart-specific app -- we are not monetizing the customized radio today, and so there is really no digital revenues associated with that. Today that continues to be commercial free, and we are getting great feedback from our listeners. And the number of downloads we are seeing is growing very, very nicely. As far as the absolute digital revenue, it's is actually growing very nicely. That is from our streaming of radio stations and display ads, and that is growing nicely year-over-year.

So we are encouraged with our ability to take our content and deliver it to customers in many, many mediums, and digital is just a new area for us. We continue to evaluate our approach with the iHeart feed, but we are very encouraged with the adoption and the feedback we are getting from our customers.

And on that, just one more quick follow-up. Is there -- on the digital side. When do you plan on kind of trying to monetize that, be it inserting ads or perhaps charging for it? Is that not even on the table right now?

Well, it's something we are constantly looking at, but we have no plans at this time to change our approach. We will evaluate that as part of our growth strategy in expanding our reach in the -- with iHeart applications. So nothing to report right now, but keep you informed of that progress.

Okay. And then on the cap structure side, how do you think about potentially raising new debt here, given strength in the cap markets?Is a question of cost of capital for you, securing a debt extension or other flexibility from bank lenders? And lastly if you could talk about -- since you did a good job talking about capacity outdoor, but if you could talk about potential incremental capacity you have to raise additional priority guaranteed notes. Thank you very much, guys.

I will take the first one and let Brian handle the second one. But with regard to capital, we have consistently communicated to you, and I think our actions reflect our ongoing management of our liquidity and our capital position. We are constantly evaluating the market for opportunities to issue additional securities, look at extension transactions or refinancing transactions. We've prefunded maturities and keeping significant amounts of cash on the balance sheet.

So we feel like we have been managing our liquidity and our maturity profile well and continue to do that. Obviously the market is very strong right now, and we are constantly looking at opportunities. Have nothing to report today, but it's something that we continue to evaluate.

And with regard to it PGNs, Brian, have you got a couple of comments on your capacity for PGNs?

Yes, Avi, I think the primary question is, if you are issuing PGNs to refinance senior secured bank debt, there really isn't a limitation. The limiter would be under the LBL and PGN notes, the incremental senior debt baskets. But as long as you are raising PGNs to pay off senior bank debts, it is kind of a wash, and so you aren't limited by that capacity constraint. If you are issuing senior debt and not using proceeds to pay down other senior debt, then you would have could be in compliance with those baskets.

We don't disclose the baskets, but they are not difficult to it track, and so we can do that offline. I will tell you though, in June when we marketed the PGNs, we did mention at it that we had about $250 million of availability, and the only significant difference between now and then has been a $500 million repayment on the revolver. So if you take $250 million and add $500 million to it, and you get to the $750 million neighbor. We've talked about that before, so that is out there. That is a pretty good idea of what we see as the incremental senior debt basket capacity remaining.

But again, as long as we are raising PGNs to pay off senior debt, it doesn't really impact those baskets.

Perfect. Thank you for taking the questions.

Our next question will come from the line of Bishop Cheen. Please go ahead.

Hi, everyone. Thanks for the detailed summary. Let me start with the capital structure. This year the 9.25% coupons at Outdoor are callable, and certainly Outdoor has been a terrific vehicle in the past for you to manage our balance sheet at the parent. So I was wondering if you could give us any color on your thinking ahead of how you would like to possibly recap Outdoor to be beneficial to the parent holdings?

Bishop, this is Brian. I will take the first point the senior points do hit the first fixed price call date in December of this year. I would imagine we would look at that as any corporate finance department would. Does it make sense to pay the premium, lower the interest rate. I think a lot of that would have to -- would depend on the market at that time.

I think another consideration we would think about is that indenture was put in place in December of 2009. The markets today would probably afford us some additional flexibility at Outdoor, so that might be another reason to take a look at it. We would be pushing out call protection. That would be a negative thing to look at. What I would tell you it is pretty pricey to call those in at a [may call] level, and so as we hit the fixed price call dates, we will make an economic determination at that point in time based on the markets at that point in time.

With respect to your broader question about how do we think about Outdoor, I'm not sure that --

I think what I would say, Brian, is that I think we look at Outdoor and the capacity of Outdoor in conjunction with our management over maturity profile at CCMH. It has been something that we have talked about quite a bit. It gives us a lot of flexibility to manage our maturity stacks, and something that we look at all the time, Bishop, and we would expect to continue to do that.

Okay. And then one follow-up. I don't know if you have disclosed in the K yet, because I haven't had a chance to look at it, any redemptions. You were planning on some redemptions that were funded with the priority notes for Q1. Did you complete any redemptions, or are you going to do redemptions in Q1 at the parent of the legacy debt?

It hasn't happened yet. We have a March 15 maturity, I believe. It is about $240 million, $250 million, of which $204 million of cash we have set aside in a segregated account. Those are cash proceeds from the PGN issuance. And we will use that cash to redeem in part that March 15 maturity.

Okay. So nothing surprising there. Last question, the proxy. When do you think you will be filing that? Okay.

End of March, early April. We haven't set a specific date yet.

Great. Thank you.

Our next question will come from the line of David Miller. Please go ahead.

Hi. Brian or Tom, question on the Americas guidance. Up 5% for the current quarter. Can you break that out between Latin America, Mexico and the United States? I have a feeling you are going to say no, but you if the answer is no, is can you at least talk about whether that 5% incorporates foreign exchange?Thanks very much.

Hey, David, it's Tom. The up5% I don't believe has a significant FX impact. We don't break out the pacings by geographies, you are correct. But I think -- again, what I said earlier is it a very strong start to the year. I think the team has done a terrific job positioning ourselves for the year with our digital buildout. We are continuing to see strong growth in retail and media and health care and restaurants. So again, the team has done a terrific job on the national side as well as the local side, and it is just starting the year off very, very strong. So we are encouraged by it. But it is not really driven by FX or one particular area.

Okay, great. Just a quick follow-up. The Achilles heel with you guys has always been international expense growth. This time you had 4% -- a mere 4% international expense growth, which is great. What is your feeling in terms of just kind of capping the expense growth on the international side for the year?Do you guys feel generally pretty confident that you can stick to kind of a low single digit bogie on expense growth for the year as it applies to international? Thanks.

I think our international team has done an absolutely terrific job in managing not only their expense pace but their growth. When you look at the international business for the year, 11% top line, 8% expense and 23% OIBDAN. Kind of hard to ask for a lot more than that.

Yes.

They have done a terrific job in managing 30 different countries. Clearly some are performing better than others. But as far as -- from my perspective, their expense focus has been extraordinary as they have seen opportunities to leverage best practices and purchasing power around the globe. So even in the fourth quarter, up 6% top line, 4% expense line, again, driving 11% OIBDAN, I think that they have demonstrated a terrific, terrific run here. And I mentioned obviously the margins they have been able to drive year-over-year, 500 basis points increased margin. I would say the issue or the Achilles heel as you mentioned, I think that is a legacy. This management team is focused on expenses and is driving efficiencies and has improved their margins significantly, both on the top line and the expense line.

Wonderful. Thank you.

Our next question will come from the line of [Jamie Morris]. Please go ahead.

Hi. Just a quick one on international in 4Q and 1Q. I was wondering if you could talk a little bit about what you are seeing in Europe versus the rest of the markets that you operate in?

Jamie, I would say, as you would expect, parts of Europe continue to be challenged. Italy and Spain have been under pressure for quite some time, and they continue to see pressure. However, as I mentioned, the diversification of the portfolio, we are seeing good strong growth in China and Australia and Sweden, Belgium. So again this business is managing a portfolio that every year provides new challenges for them. And has done a terrific job of managing through the significant growth we are seeing in China, Australia and the challenges in Southern Europe. So we continue to be cautiously optimistic about their businesses and are investing in the highest growth areas like China, like Turkey, like Australia that continue to provide great growth opportunities. So again, I can't say enough about the team's focus on managing both the good and the challenging environments. environments.

When you look at the pacings data for 1Q, is there any market in particular that is driving a difference versus 4Q?

Well, as I mentioned, I think we continue to see areas that are probably furthest away from Greece doing the best, so we're seeing China and Australia as I mentioned doing very, very well. And again, Italy and Spain being challenged. It's still early in the year for the UK, but they will have the Olympics this year, so for the year I think they will be fine. I think overall I think we are definitely seeing pockets, but it is pretty consistent 4Q to 1Q as far as where that growth is. We haven't seen significant changes from 4Q to 1Q.

And then just one quick one. In the 10-K I was looking, and it lookslike there is a change in the number of displays in the US. A big change from 188,000 last year to 125,000 this year. Is that a transit contract, or what is driving that change?

We changed the way that we counted boards in airports. We were counting them by flip, and we have modified that to make about per structure. So no change in reach, in audience penetration, it's just more structure versus flips in airports.

Okay. Thank you.

Our last question due to time constraints will come from the line of Nadia Lovell. Please go ahead.

Thank you so much. Most of my questions have been answered, but one follow-up on digital buildout for 2012. You mentioned that Dallas is what helped Q4 to be significantly higher than where you initially guided. What markets could open up in 2012 that would push that number over the 150 guidance?

Difficult to be specific. We are still working through a number of municipalities. Obviously area like Boston continue to be area that we would like to continue to grow in. But I don't want to jinx ourselves here, but I think there is opportunities across many, many geographies, and we will continue to work closely. These processes take time, need to work closely with the municipalities and we will continue to press to grow as fast as we can in this area. We will keep you informed as the year progresses if we get better clarity, like as you mentioned we were very fortunate to get the Dallas permits and started putting them up right away in fourth quarter. So that hopefully gives you an indication of how we think about it and how we are proactively managing it.

Just my last question on the tax rate. Was there anything special in Q4 for why taxes were so high? And what is a good run rate for 2012.

I believe we had two IRS settlements that affected the rate year-over-year. So nothing other than the settling of a couple of prior year audits.

Okay. And what is a good rate for 2012? Just historical?

We don't forecast a tax rate.

Okay. Thank you very much.

You're welcome.

Folks, that completes today's conference call. We appreciate each of you joining us today. If you do have follow up questions, please feel free to contact us. Thank you very much.