Clear Channel Outdoor Holdings, Inc.
Q1 2016 Earnings Call Transcript

Published: 4 May 2016

[Operator:]

Welcome to the iHeartMedia, Inc. and Clear Channel Outdoor Holdings, Inc. 2016 First Quarter Earnings Conference Call. [Operator Instructions]. I would now like to turn the conference over to your host, Eileen McLaughlin Vice President, Investor Relations. Please go ahead.

[Eileen McLaughlin:]

Good morning, thank you for joining our 2016 first quarter earnings call. On the call today are Rich Bressler, President, Chief Operating Officer and Chief Financial Officer and Brian Coleman, Senior Vice President and Treasurer. We'll provide an overview of the first quarter 2016 financial and operating performances of iHeartMedia Inc and its subsidiaries

[Rich Bressler:]

Thank you, Eileen and good morning, everyone. Thanks for joining us. We're pleased with the success of our growth initiatives in the quarter. It shows that the investments we've made and are still making to transform iHeartMedia into a 21st century multi-platform media and entertainment company are continuing to pay off. With our diverse portfolio of assets, we have the ability to reach consumers wherever they are. More than ever, we're confident that we have the right strategy to maximize the value of radio and outdoor as true mass-market mediums, while building our other platforms, including digital, events and social on top of that base and that's because fundamental trends continue to drive powerful opportunities for our businesses. As Nielsen's latest comparable metrics report shows, TV's weekly reach keeps falling from its historic high of 95%, now reaching just 86% of American adults over 18. And with millennials, that reach is even lower, at 75%. Quite a drop from its record high of 95%. By contrast, broadcast radio's reach remains the highest and most stable of all media, continuing to reach 93% of all U.S. adults, 18 plus, with millennials reach almost the same at 92%. So radio has now surpassed TV to become the number one reach media. Put another way, more adults and more millennials are reached by AM/FM radio than any other media. Back in 1970, radio also reached 93% of American adults. That's remarkable stability. Showing that radio is not be negatively affected by digital, unlike newspapers, magazines and TV. To the contrary. Digital has proven to be a nice add-on to broadcast radio. With broadcast radio as its core platform, iHeartMedia also drives social media engagement to a level few other companies can match. For example, just look at the $115 billion, that's billion with a B, social media impressions in the U.S. alone that last month's iHeartRadio Music Awards promotion and event recently generated, far surpassing the combined social engagement for the Oscar's and the Grammys. And Nielsen Twitter TV ratings ranked the same awards show as the number one trending program of the week. When you think about it, given radio's roots in local communities and its close, personal connection to millions of listeners, it's no surprise we have such a major social following and impact. Radio is America's companion, the best friend sitting in the empty seat next to each of our listeners. We're keeping them company while they are getting ready in the morning, commuting, working or going about their daily lives. Before digital, they'd call on the telephone to interact with us. Today, they contact us through social media and they now also bring along their friends. That companionship we have we our audience drives the impressive number of social impressions generated by our events and social has turned into yet another important platform for our Company. In another key trend which we've discussed before but bears repeating, consumers continue to spend more and more time out of home. This trend obviously benefits our radio business as well as our outdoor business. Especially since about two-thirds of radio is consumed out-of-home, making it more mobile than what's traditionally considered to be mobile. In fact, two-thirds of what people think of as mobile media is consumed in the home and 80% of that data is consumed through WiFi. That's why we believe no other media company is better positioned than ours to capitalize on this increasing consumer mobility. For all intents and purposes, radio functions like a digital device, with an important distinction. There are about 200 million smartphones in use across the U.S., but 1 billion waves. We're now able to use all of these smartphones to expand our existing and leading reach in broadcast radio like no other media company. Finally, the advertising marketplace continues to evolve dramatically. Agencies and advertisers are demanding automated and programmatic sales processes as well as data-infused and measurable solutions from all media which is currently dominated by digital companies. For the past year, as you know, we've been investing in building a programmatic and audience-based ad buying solution that enables broadcast radio to be bought and sold as easily and seamlessly as digital media, closing the gap with what the digital companies offer. I'm happy to say that we're now offering automated and data-infused buying to our advertisers across our broadcast stations and iHeartRadio which we believe will provide a frictionless programmatic platform for marketers that looks and feels like digital to them and integrates seamlessly into their planning and buying systems. In addition to our automated buying, we're now, for the first time, able to sell impression-based advertising in a way that's complementary to digital mining. This is in addition to our premium time-based inventory. Although we expect there to be gradual adoption of our programmatic platform, we believe it will enable us to more effectively sell across our entire broadcast and digital inventory. To better serve the needs of our advertising partners, we've been developing the kind of rich data and research insights to deliver our reach in a very specific demographic, behavioral and consumer segments that marketers are targeting in their digital campaigns. About one-third of our broadcast station listeners also use the iHeartRadio platform and iHeartRadio's digital listener base was built almost entirely through the promotion and advertising on broadcast stations. So we're able to use this anonymous, aggregated data to create insights into our broadcast listening audience and talk to consumers based on those insights. So now we can provide the same ad buying experience that was once only available from the digital-only companies and I'm pleased with the positive responses we have received from many of our major agency partners to our new ad buying tools and a number are already participating. All of these capabilities have also helped drive the success of our political assets, a significant contributor to this quarter's solid revenues. This strong progress in programmatic, data-infused ad buying at iHeartMedia is also a priority in Americas outdoor. We recently introduced RADAR, a data analytics solution that uses anonymous, aggregated statistical insights from third-party providers to enable marketers for the first time to plan and buy our out-of-home inventory just as they do in their digital campaigns. And importantly, we're able to share our data learnings and advertiser relationships across all of our businesses. At International Outdoor, we continue to expand our innovative marketing solutions, adding 962 new digital displays in the quarter. With nearly 1000 new digital displays around the world added in the quarter, we're providing much more choice and control to our outdoor advertisers. And that's helping the Company to grow its digital footprint. To sum it up, our investments in this core strategic initiatives are enabling us to keep building our leadership in the power of sound, the power of outdoor, the power of social, the power of data, the power of mobile and the power of our national and local brands, as well as our industry-leading personalities, all while maintaining our tight operating and financial discipline. Now let's turn to slide 4 and review our key financials. To improve comparability in this quarter's results to the prior year on this call, I'll refer to all results excluding the impact of FX and the impact of non-strategic Americas Outdoor markets that we sold in the first quarter. You can find our reported numbers in our earnings releases and SEC filings. In addition, as noted in the iHeartMedia release, our OIBDAN calculation excludes the incremental lease expense from the sale lease-back transactions related to our tower portfolio and San Antonio office buildings. Consolidated revenues increased 4.1% to $1.4 billion, with growth of both iHeartMedia of 5.9% and Americas Outdoor of 4.2%. International Outdoor was essentially flat. Consolidated OIBDAN was up 11.8% to $300 million. This solid performance of our operating businesses provides us with the flexibility to manage our capital structure in a prudent way and allows us to keep evaluating opportunities to strengthen our balance sheet and our businesses. I'll provide additional detail on these results as we discuss each segment's financial performance later in the call. Now, let's review our key non-financial highlights. Moving to slide 5, the reach of iHeartMedia's broadcast radio stations means that we're one of only a few media players in the United States with a reach of over 200 million people per month. Others include Facebook and Google. We think this unique position gives us the ability to create dynamic new platforms like the social we discussed earlier as well as events and digital. Indeed, iHeartRadio reached 84 million registered users, a 32% increase year-on-year. And at the end of April, we reached 85 million registered users, hitting that milestone faster than any other digital radio or music service, marking a 35% increase over the first quarter of 2015. Total listening hours were up 22% over the first quarter of 2015 and mobile listening accounted for two-thirds of our iHeartRadio's total listeners. Downloads and upgrades increased over $900 million at quarter end. And all of this iHeartRadio listening is additive to our expanding base of broadcast radio listening. As discussed earlier, we and our partners launched a programmatic platform that provides not only the automation that ad buyers want, but also the ability to target very specific audiences and buying characteristics as well as correlation with other key data and situations important to advertisers. For example, advertisers can target consumers by political affiliation, what kind of mobile device a person is using, what kind of car the listener drives, what the weather is and more. It enables us to use more than demographics to target consumers at scale. We believe that being able to provide this kind of data-infused buying with the progressive scale of our broadcast stations opens new doors for advertisers and for our iHeartMedia. We also continue to leverage our roster of major annual events as part of our overall sales strategy while providing promotion and brand building opportunities for our advertisers. So far this year, we have staged three major events

[Operator:]

[Operator Instructions]. And our first question will come from the line of Avi Steiner with JPMorgan. Your line is open.

[Avi Steiner:]

The first question I'm going to try to bucket in different categories. But the first question here, on domestic outdoor the growth of 4%, was better than we've seen in that division in a while. Your pacing, I know it's a point in time also strong and I'm trying to understand away from your occupancy comments if there's only one time drivers there, with the Dallas win or the Dallas loss in those numbers. Really I'm trying to get a sustainability and then lastly on domestic outdoor, how do we think about margins in that segment this year, given how strong Q1 was on the topline I would've thought it would of been a little stronger on the EBITDA line?

[Rich Bressler:]

Look, really kind of went through when I covered in my highlights first of all, these numbers are apples to apples. So you know, we've always got we always have wins and losses, I think nothing material on either side. As I try to point out, a little bit detail [indiscernible] the revenue is really driven by the higher revenues from the digital billboards and the deployments and higher active with both local and national up in the quarter, so I'm really pleased, it's really kind of across-the-board and just to go back on you know, we've made a number of management changes that you've all heard me talk about this before, but I can't overemphasize that it's really that execution remain in the management changes last year starting with Scott Wells and his team. We then brought in Bob McCuin that you’ve heard me mention to run our advertising sales. I think you’ve seen the benefits on that execution, you’ve seen them in the first quarter I mentioned it in the second quarter pacing just important time for both sides out there. And, also you know when we announced that the asset [indiscernible] in the beginning of this year, the real focus on that’s not core the company, what's more valuable in someone else's hands, we could also get a good price and we talked about that. We have 12.5 times approximately on the asset sales we announced the sellout and I think it's management execution that focus and then on cost, you know we're always looking whether it's any of our divisions to continue to work to optimize our cost position effectiveness and the fact the margins are up 20 basis points is from both the higher mix of the assets including digital and I just articulated and the ongoing efficiencies which again quite frankly are a way of life in our company.

[Avi Steiner:]

And then staying on the outdoor topic, I noticed in the 10-Q, you swapped more assets for additional cash. Can we talk about the revenue and EBITDA impact around that if any, can you confirm that the cash from the swap is not a required debt repayment and lastly, on that topic, given your healthy cash balance which I think is lower this quarter, maybe what's behind some of those actions? Thanks.

[Rich Bressler:]

I will let Brian is here with me as always answer the question on the cash but just to make sure that everybody is -- has had the chance to look at the 10-Q that I was talking about, during the first quarter this year, we entered into an agreement to sell Indianapolis Indiana market for certain assets and Atlanta Georgia plus approximately $41 million in cash, the transaction subject to regulatory approval, we expected to close in 2016 and again, it's really just overall part that we continue to evaluate our business and asset portfolio and we continue to demonstrate the various sales. I think we know how to clear the [Technical Difficulty] balance sheet. You know in terms of the amount of cash that's on the balance sheet, again, what we're looking to do to say if you can sell nonstrategic assets at a good price and I would suggest that like the 12.5 that we publically displaced for the assays we suppose it's a good price more valuable than someone else's hands and for all of our shareholders and stakeholders, it's better value for us to sell those assets and get the cash.

[Brian Coleman:]

To continue on with the remainder of the question I think it's important to note that while the transaction that which referred to is disclosed, it hasn't been consummated. And so, we really aren't talking about how that will run through the debt agreements that’s at some point in the future. Obviously, as you look in historically, we've utilized our capacity under the debt agreements to optimize liquidity and you should assume that is really we think about our future asset sales as well. Continuing on, I think to the remainder of your question, it is true cash balances perhaps that went down in the first quarter, versus pro forma year end cash balances for some of the sales transactions that occurred and that should not be a surprise. Our first and third quarter have disproportionate amount of debt service, our second and fourth quarters have been reciprocal of that. What we've done, kind of in a macro sense, is you know, since at the end of the third quarter has done a number of things to generate liquidity, you should assume the company will continue to do those things and put ourselves in a position where we have resources available to us, should the opportunity present itself to be proactive in the capital markets as we have done in the past. And so, we have to take that into consideration with the concept of everything else that's going on and we have to be focused on preserving liquidity for operating purposes, but I think we continue to operate as we done in the past and we set ourselves up to be opportunistic

[Avi Steiner:]

One more clarification and then my last question. The clarification, international pacing plus 4.5 is that apples to apples in other words including the changeover in the UK contract and everything else that's going on?

[Rich Bressler:]

We’re consistent, just like you asked the question we have not -- we’re always winning contracts, losing contracts, so we haven't adjusted for the loss of the lending contract that you are referring to. So, the UK pacing is apples -- will apples to apples operating but we’re using those contracts have not factored anything out. But, the largest markets, you know, France, China, Australia, really sort of showing some great momentum for those markets. So that's really where we see benefit of the pacing, the benefit of pacing but not adjusting, I probably should point out also on CCLA, you didn't ask this question, but on the pacing level of 4.4, we did adjust for the sale of the nonstrategic markets. So CCLA adjustment for the sale of nonstrategic market that we saw in the first quarter of this year and we have strong growth in digital [indiscernible] that's what driving the pacing, CCI not adjusting for the loss of [indiscernible] contract, a 4.5 driven by France, China and Australia just to be crystal clear.

[Avi Steiner:]

I'm sure you can't discuss ongoing mediation so I'm not going to ask about that but as you think about the capital structure, is the priority just to address front end maturities or is it broader and then is the balance sheet I guess this is for both of you, but is the balance sheet in any way limiting you from M&A and rich relative to some of the radio comments you made or is it limiting you from doing anything on the outdoor side, given some high profile contracts opportunities this year and again thanks for taking the questions.

[Brian Coleman:]

So, I'll take those in reverse orders and then give Rich the opportunity to kind of come over the top if he would like. I think first, we feel like we've been able to manage the company's capital structure and its liquidity position in a way that hasn't inhibited the operation of the business and I think you can see that our investment in the business continues at levels that are consistent with historical levels. And, we continue to invest in the business where we think we can get the best return. And in fact, I think that part of our success rate over the historical period, is related to successful investments that we've made. So I don't see that has been an issue with respect to investing the business and I'll let Rich comment on that. You know, the other part of the question, is what is our focus? Our focus is broader than just nearest term maturity. It is, what can we do that best positions the company for growth in the future? You know, operationally we continue to have success, but we have a significant amount of debt and there is an opportunity, a window of opportunity where we have the ability to go out and address this issue whether that's a holistic approach, whether that’s a sequential and there's a variety of things we have to look at. Liquidity is one and addressing near term maturities particularly at a discount, directly affects liquidity. The capturing discount and the ability to rightsize the debt portion of our capital structure in the face of EBITDA growth is also a priority. So it's difficult to say at any point in time, what is the priority is. I think a lot of it depends on where the opportunities are. And, that's really the formula that we have to look at. I know that's probably less satisfactory but I think you'd be disappointed if I put all my chips in one bucket and told you on this phone call. So, that's really kind of the way that we look at it and Rich, I don't know if you had anything to add to.

[Rich Bressler:]

I mean the only thing I would add is that overall -- I think again, just looking at -- I would look at a couple things to answer your question holistically. First of all, look at our operating performance, you know, I think we continue to -- like on iHeart, you didn’t ask me talk about goal a little bit but continue to significantly outperform the industry. We continue significant on any -- over any period of time last year, year and half outperform media companies, obviously, Facebook and Google are the big digital companies are performing -- are growing the revenue quicker than we're growing and if you look at the media industry. So I would say the point to the evidence, I think what we're doing is a good job in harvesting and selling things that a non-core and if you work on stuff that is important to us I mean just go back over the last couple of years, and remember [indiscernible] in New York's on radio station, [indiscernible] Northeast, up in Boston and everything we have made investments to help drive -- everything is important to us in terms programmatic, ad serving, data analytics and in terms of where the world is going, which is starting to show up in our performance. We have made an investment in Jelly [ph] which enables us to make broadcast look like it's going to be make it easier to buy for advertisers and advertising agencies which is absolutely critical to our future. We made investments in unified social to data dashboard, so I think, within our capital structure, we have been very good about thinking about ways to make investments that would drive the operating from some of our business that has continued to enable us to serve our advertisers well and outperform the industry.

[Operator:]

Our next question comes from the line of Jason Kim with Goldman Sachs. Your line is open.

[Jason Kim:]

On the working capital side, it looks like accounts receivable did normalize this quarter which is good to see, especially at CCO. Can you comment a bit on what you're seeing there and if it's improving the accounts receivable collections can be sustainable for the balance of the year?

[Brian Coleman:]

Yes, I mean look, this is from an accounts receivable you know perspective. It's just timing. We continue to really focus on accounts receivable, it's really just seasonality, in terms of timing, but yes, I promise you, no different than folks of operating expenses made different [indiscernible] I think we've done a good job in terms of margin and good job in terms of capital expenditures. The only fluctuations you’re seeing is seasonality. There is nothing else there to focus on.

[Jason Kim:]

And then for your '16 CapEx guidance you have $300 million to $350 million for total company guidance how much of that is expected to be at CCO for this year?

[Rich Bressler:]

Yes, I don't think that we've broken that out. But I think that if you kind of look at you know, historically, the way that the allocation of our capital expenditures and the way we allocate capital, I would look historically and think about the future. I don't think you'll see any major changes in that.

[Operator:]

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

[Marci Ryvicker:]

The strength in outdoor Americas, it seems to me that this very company specific, it's execution, you're taking back some of the share, is there also the chance that the industry in general has gotten better at just kind of getting wind at your back? And then is there any update on the LA situation and then I have one follow-up

[Rich Bressler:]

So I can't know -- I know in terms of people reported so I can't -- I won't comment on other companies out there. What I can comment on is a little bit what I alluded to before and I talked about my script and talked about in the opening remarks and we've been talking about for some time, it's about execution, execution and management. And I think you could almost track to the day that we made the changes for the leadership in Clear Channel Outdoor America and throughout the year, and you see the results showing up on the bottom line. I think the team is doing a great job of being out there, been facing the client, I think we're doing a great job of responding to RFPs very quickly out there and I think it's a great -- outdoor is a great product, it's really great product from an out of home experience with people spending more and more time you know, out of home but we all know that and continue to deliver value to the advertisers. On LA Digital, there's really no update, you know, I would say that we will continue to stay away from exactly when we're going to get resolution on that other than we continue to work always through the process of the legalities in LA and just as a reminder we still have approximately 50 digital boards around the LA market even with the ones that were taken down and we've been able to convert about 80, again these are not big numbers, but we’re not -- in our hands [indiscernible]. We have about 80 billboards at the static open and traditional displays, during this period of time also. So we're trying to maximize to the extent that feasible you know, the opportunities there.

[Marci Ryvicker:]

And then one follow-up is on the programmatic platform, is this something that you can open up or will open up to the industry or is this going to stay very company specific?

[Rich Bressler:]

Well, first of all, you have from our standpoint, from an iHeart standpoint we have been investing in programmatic and audience space ad buying solutions and to think about it enable [indiscernible] as we bought and sold as easily and as seamlessly as the big digital media companies, Facebook and Google and so closing the gap with what the company's, have to offer. I'm also happy that this is kind of automated [indiscernible] buying to our advertisers across our broadcast stations and iHeartRadio, we now have the ability to provide frictionless programmatic platform for marketers that looks and feels like digital integrates and seamlessly into the planning and buying systems and also for the first time and then I will comes to the industry for the second, we're able to sell impression based advertising in a way that complementary to our digital buying. So just to be clearly, we do impression-based advertising, some people want to buy impressions and matching in addition to our premium-based inventory, so the ability to do that and although there will be a gradual adoption of programmatic platforms, it will enable us to effectively sell our entire broadcast and digital inventory and just as a reminder, about a third of our broadcast audience registers with us for digital, just also, you’ve probably have also seen we now have crossed $85 million unique usage for the iHeart app. We’re growing faster than any other streaming service out there, but the importance of the 85 million is once -- we think about a third of our broadcast listeners have now registered and about a third of our broadcast listeners registered on digital and once they register we have all the information and no different than the big digital players, take that in order of registered information and extrapolate our broadcast audience. So, long-winded answer, the first part, as to why we’re so excited about our future and serving our advertising partners. In terms of the industry, just as a reminder, we have cats which serve the industry, we have made an announcement that will bring the programmatic to the industry to expressway from [indiscernible] to enable the programmatic buying across the industry and that's been rolled out as we speak.

[Operator:]

Your next question comes from the line of Lance Vitanza, CRT Capital Group. Your line is open.

[Lance Vitanza:]

I wanted to ask a more general question about radio. The revenue growth is impressive, how did your overall markets perform presumably you took a lot of share and then I have a couple of follow-ups related to that.

[Rich Bressler:]

Certainly we're very pleased, great results, you know, great team effort here and we have a great team, great management team. And based on the [indiscernible] data, I think the total industry is just up about 1% maybe a little over 1%, so clearly we outperform the industry. I think the reason for the outperformance continues to be our multiplatform asset base which helps drive our growth and differentiates us in the marketplace and we've seen our track record for that period of time over the last years, that we continue to outperform the market, you know, also contributing as a reminder, as I mentioned this briefly in my remarks, but worth repeating. Our REIT remains at 93% for all U.S. adults 18 plus and 92% for millennials. And, well TV which used to be the reach continues to decline, they were in the store of 95% of reaching adults and now 86% and they are actually at about 75% for millennials. So one in four millennials do not watch advertising supported TV and so the thing about simply more results and more millennials are reached by AM/FM radio than any other medium. If you look to a little more detail by the revenue drives in the quarter, I spoke about traffic and weather and political we had strong growth in our top five markets which I'm very pleased about, Bob and I both pleased and the management team in LA, Chicago, Dallas, New York and San Diego. Eventually we have had good strength in the auto, entertainment, financial services categories, homebuilding professional services. So really nice strength across the board and I just previously mentioned, to answer the previous question I think for Marci that we also crossed 85 million registered users which is the fastest in the digital music service even faster than Facebook. So I think that’s one piece that's contributing to all of the growth and that's why continue to emphasize for a more multi-platform asset base so everything is contributing to the growth.

[Lance Vitanza:]

Okay and on the EBITDA side on radio, it looks like about 60% of the incremental revenues flowed through to the EBITDA line, is that what we should expect generally going forward?

[Brian Coleman:]

You know, look, I'm not going to comment exactly on margin expansion other than to tell you, that over any period of time there could be a quarter here or a quarter there, but you don’t, but over any period of time we're going to continue to look for margin improvement through tight operating and financial discipline through rigorous capital and cost allocation and at the same time, we're going to invest as I highlighted before things like [indiscernible] unified social. We’re going to invest back into the business where we think it's appropriate but you know, it's going to be a very, very prudent right way and just as a reminder, we did have about $16 million of revenue in the first quarter on political, I think about $11 million on the iHeart one, almost 12 and about $3 million and $3 million last year in the first quarter. So we did get the benefit of that because political is a high-margin business.

[Lance Vitanza:]

Right. And then lastly for me, could you talk about how the revenue trends progressed through the quarter, I mean presumably, they decelerated given the pacings, I know what you think about pacing but is that accurate or what could we say about that?

[Rich Bressler:]

Well I'm not going to comment. I would just -- you know, you guys probably are ready to throw up every time I say this, but I'm not going to keep commenting -- I just can't overemphasize about that point of pacings for a given point in time. So, I'm not going to comment on any specific months out there other than to say we feel really great about our business and we feel a little bit [Technical Difficulty] that's for sure but we feel really good about our business, we feel great about the investments, feel good about all this stuff we’re taking on things like that I’ve been talking about in terms of programmatic. And look the most important thing from us is and I would say this before also is that our biggest opportunity is on the radio side and continues to be grammatically with all of our success, we continue to be dramatically under monetized. I talked about being the reach medium, we deliver as you know from all the Nielsen data, not our data, Nielsen data an average of 6 to 1 ROI, return on investment simply [indiscernible] and that just says we have a lot of unit [ph] to continue to increase our revenue even irrespective of what our ratings are , again, our ratings have been close to 10% last year on broadcast ratings, roughly close to 30% on digital ratings, so we've had great rating success but the most important thing is we're under monetized and we need to continue to focus on better driving ad revenue based on our reach and based on our consumer engagement.

[Operator:]

Your next question comes from the line of Aaron Watts with Deutsche Bank. Your line is open

[Aaron Watts:]

Just two quick ones on the radio side, I guess first, Rich you mentioned how you did in political last year and I think in the last cycle it was strong in the first quarter just any thoughts on what you are seeing here in the second quarter and maybe expectations in the third and fourth and then, secondly more bigger picture, you highlighted how out of home is where the majority of radio listening occurs and I think it's fair to say that the car has always been a home base for terrestrial radio, as connected cars become more prevalent and perhaps open the door a little wider to competing services, how do you see that impacting your business to the positive or negative? Thanks.

[Rich Bressler:]

Couple things first of all, on political as you know, we don't provide specific guidance you know, we wanted to make sure that we shared with you what we actually had recorded in the first quarter, we're very confident in our DC-based political team, we hired just a great guy political media Kenny Dale [ph], a number of months ago and Kenny has hired a couple team members and they are just doing outstanding job and I think they are jump in the numbers and leveraging data and mobilizing our local sellers through assisted campaign, all the campaigns and by the way, this goes not just the national campaign, this goes to local campaigns, local issues, just to be clear really targeting specific demo, so we believe that would position to continue to maximize our share of ad spending and we're really pleased, we talked about it last are going into this year that this will be built on the election cycle and what they've delivered. You know, just again I'm not going to talk about going forward. But just to give you some perspective as I mentioned, we had in total about $16 million in the first quarter of this year, political revenue ad of about $4 million last year in political revenue. In the first quarter 2012 as you go back to the last presidential cycle, in the first quarter, we had about $10 million in the first quarter so hopefully that helps. And I'm sorry what was the second question?

[Aaron Watts:]

On the connected car?

[Rich Bressler:]

Yes, connected car. Now look there is -- just as we remember, all of the research that we've done again all third-party research, not our research, not like some other people internally generated research but all third-party research is that 99% of consumers are comfortable with the current AM/FM generation of the car and 91 % just to be clear, 91% would prefer traditional buttons, dials and buttons in the car dash and I think automakers are laser focused on that, it is by far the number one media entertainment option, when consumers make a buying decision, is to make sure AM/FM radio. You know, by far out there. So anything in this world that [indiscernible] we continue to see the foundation of AM/FM radio, consumers engagement with that consumers desire to have those dials and buttons in the car, that are easy to use, you know, as high as it's ever been and we feel great about that. And the only last thing I would add to that, is obviously, they will always have the option you know, as you think about a digital option with iHeart we're always in car -- digital option, but that doesn't change the initial part of your question, on the AM/FM radio and the strength of it based on what consumers want.

[Eileen McLaughlin:]

Thank you, Operator. And this will conclude our first quarter 2016 earnings conference call. And, I am certainly available to answer any questions later on today if anybody would like to call. Thank you.

[Rich Bressler:]

Thank you.

[Operator:]

Thank you ladies and gentlemen, today's conference call will be available for replay after 10.30 AM today, until midnight, June 4. You may access the AT&T teleconference replay system by dialing 1-800-475-6701. And entering the access code of 389575. International participants may dial 320-365-3844. Those numbers once again, it's 1-800-475-6701 or 320-365-3844 and enter the access code of 389575. That does conclude your conference call for today. Thank you for your participation and for using AT&T executive teleconference service. You may now disconnect.