Effie Epstein - VP. Investor Relations Richard J. Bressler - President & CFO Brian Coleman - SVP & Treasurer.

Jason Kim - Goldman Sachs Avi Steiner - JPMorgan Lance Vitanza - CRT Capital Group Marci Ryvicker - Wells Fargo Securities David Miller - Topeka Capital Markets.

Ladies and gentlemen, thank you for standing by. Welcome to Clear Channel’s Second Quarter 2014 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later we will conduct the question-and-answer session instruction will be given at that time. (Operator Instructions) As a reminder, this conference is been recorded.

I would now like to turn the conference over to your opening speaker Effie Epstein, Vice President of Investor Relations. Please go ahead..

Good morning and thank you for joining our 2014 second quarter earnings call. On the call today are Rich Bressler, President and Chief Financial Officer; and Brian Coleman, Senior Vice President and Treasurer.

We’ll provide an overview of the second quarter 2014 financial and operating performances of CC Media Holdings, Clear Channel Communications, and Clear Channel Outdoor Holdings.

For purposes of this call, when we describe the financial and operating performance of CC Media Holdings, that also describes the performance of its subsidiary Clear Channel Communications. After an introduction and our review of the quarter, we’ll open up the line for question.

Before we begin, I’d 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 expectations, beliefs or projections will 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 the important factors that could affect our actual results. Pacing data will also be mentioned during the call.

For those of you not familiar with pacing data, it reflects revenues booked at a specific date versus the comparable date in 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 accepted 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 presentation, which can be found on the Investors section of our websites, clearchannel.com and clearchanneloutdoor.com.

Please note that our two earnings releases and the slide presentation provide a detailed breakdown of all foreign exchange and non-cash compensation expense items as well as segment revenues and OIBDAN for the quarter. Our discussion today also excludes the effects of movements in foreign exchange.

With that, I will now turn over the call to Rich Bressler..

Thanks, Effie, and good morning, everybody. Once again, as Effie mentioned, you can find our prepared slides on our website. Let me start by sharing some thoughts on the quarter. On our last call, we spend time talking about maintaining tight expense management and financial discipline as key priorities.

Our results today reflect this both from a financial perspective and in terms of our business decisions. During the quarter, we continue to make progress in key areas. We grew our National, Digital, Events business and Media and Entertainment, as well as launch new contracts at International Outdoor.

Through these efforts, we continue to demonstrate unique value Clear Channel provides to advertisers across multiple platforms.

Building on this progress, earlier this month, we took another important step in our continuing transformation to a consumer-driven, technology fueled, 21st century media company by naming Brian Lakamp, our President of Technology and Digital Ventures.

Brian will work hand-in-hand with Bob and me to lead the overall of technology platform and capabilities across our entire business, including our broadcast, digital radio, events and promotions and Out-of-Home businesses.

He will also be responsible for developing our company's overall strategy and execution related to technology, big data and programmatic buying among other things.

The iHeartRadio team will continue to build on a tremendous success as part of the Clear Channel networks group under its President, Darren Davis, an extremely talented executive and a strong team leader.

As we mentioned last quarter, the Clear Channel networks group uses our power, reach and scale to deliver content opportunities to our partners, affiliates, advertisers, consumers and talent across Premiere Networks, the radio industry's leading network group, total traffic and weather network, the 24x7 news network and now the iHeartRadio network.

We are also very excited about yesterday's partnership announcement with AdsWizz, an advertising technology provider in the digital radio and audio industries. This partnership will enable us to deliver tailored ads to users based on their preferences and location with enhancements beyond what's been available in the market so far.

We think the ability to serve targeted ads simultaneously that the specific digital users during a live radio stream present the tremendous platform for advertisers and partners and we will be able to do this for all of our radio stations that we streamed live on iHeartRadio.

Also back in June, Bob and I joined our Outdoor and Media and Entertainment teams in France at the Cannes Lions International Festival of Creativity. This festival is the main platform for the world's most prestigious international advertising awards.

During the festival we showcased the vision and innovation of our entire company, many of the largest global brands and agencies in advertising, creative and media. We are incredibly proud of our teams for the dynamic way they presented Clear Channel to the year's most significant global advertising audience.

Our discussions were focused on providing the most innovative and creative solutions possible and valuing partnership at every level.

We were joined there by Mariah Carey and Jared Leto, who demonstrated their creativity we draw upon and I'm also pleased at some of the groundbreaking advertising work that we participated in was showcased at the awards for both Outdoor and for Media and Entertainment.

In fact, among our clients who are in the honors was British Airways who's digital out of home campaign, the Magic of Flying, which won nine awards. We also contributed to another winning campaign adapted by Swedish pharmacy retailer called Blowing in The Wind.

It uses motion sensor technology to trigger on-screen creative for incoming metro trains in the Stockholm Subway. Both of these highlight the kind of creativity and innovation that we're dedicated to implementing across the board. Now let's move to the financial highlights on slide four.

Overall, revenue at Clear Channel Media Holdings totaled 1.6 billion, growing 1% year-over-year with expenses up 2% and OIBDAN down 4% to $487 million. As we shared on the first quarter call, our focus is on tight expense management and financial discipline across the organization and that's where we've made significant progress this quarter.

And Media and Entertainment, we are growing revenues in a tough market and are tightly managing expenses. In International Outdoor we went into several new contracts around the globe. These contracts will of course initially drive expense increases but as we've proven time and time again, they become significant OIBDAN generators over time.

In America's Outdoor we continue to working on our national execution and are seeing meaningful progress in the third quarter as evidenced by the pacings which I will speak about in a few minutes.

Now before turning to our business highlights on slide five and six, let me also mention that we had approximately $20 million of cost related to strategic revenue and efficiently initiatives this quarter.

As we mentioned on our last earnings call, we will continue to invest in these initiatives throughout 2014 but we already beginning to see and realize the benefits. Now on to the highlights.

Slide five will get a start there at Media and Entertainment where we surpass 50 million registered users for iHeartRadio in record time with registered users increasing 50% year-over-year.

We reached a significant milestone faster than any other streaming music platform and even faster than Facebook and Twitter and we use the power of radio to do so. This achievement came on the yields of our launch of iHeartRadio 5.0 last month [ph] and upgrade that's been incredibly well received.

Earnings CNETs Editor's Choice Awards that called it the best streaming radio app we've seen yet. We also continue to focus on expanding the distribution of the iHeartRadio platform to engage with consumers both in and out of the Home.

IHeartRadio is now available to the Internet and iHeartRadio App on 35 devices, including mobile, tablets, automotive partners, smart TVs, gaming devices, and more.

On the partnership front, we have joined with Honda to create Honda Stage, a massive brand awareness initiative to reach the youth market that will feature a major series of live and intimate performances from today's best artist at the iHeartRadio Theater in Los Angeles.

On the Event side, we were thrilled by our highly successful inaugural iHeartRadio awards, which were televised on NBC and featured performances by Blake Shelton, Drake, Pharrell, Pitbull and Shakira.

Using our industry leading reach, the awards directly engaged fans in the selection of the winners, ultimately drawing over 65 million votes and trending number one on Twitter for the night.

In fact, Nielsen's Twitter TV ratings reported the awards had the week's largest online audience for any TV show including the Voice, the Kentucky Derby, and the White House Correspondents' Dinner. And if you needed further proof of the success, within a week, NBC announced it would pick up the awards for 2015.

And we followed up that landmark event with last month's third annual iHeartRadio Ultimate Pool Party that streamed live over our radio stations nationwide and Yahoo! as well as aired exclusively on the CW Television Network. We also continued to innovate on the broadcast radio front.

In our Networks business, we introduced the iHeartRadio Hispanic Network which lets us provide our partners with unparalleled access to the Hispanic community timidity as well as offer this key demographic exclusive access to some of Mexico's top-rated radio stations to our partnership with the leading radio broad cast company in Mexico, Grupo Radio Centro.

On the political front, our political strategy unit launch the Audience Delivery Optimizer or AuDiO. This is a first of its kind proprietary radio optimization tool that enables local and national political campaigns to precisely target key voter segments through radio.

AuDiO has met with tremendous enthusiasm from political clients, and we have already bought a new business since its launch in June. Moving to slide six, I first want to mention Monday's announcement of CBS's acquisition of Van Wagner.

Although, we are disappointed that we didn't win the bid for Van Wagner, the 21.6 times multiple, 21.6 revenue report in CBS's presentation is the highest multiple we've seen in the Out-of-Home industry in the last 10 years and a great validation of the Outdoor industry.

We are encouraged that the market is recognizing the tremendous value of Outdoor assets. At the same time, as I said earlier, we are focused on demonstrating financial discipline and our evaluation of deals with the goal of driving the highest value for our shareholders.

We continue to grow our digital presence with over 1,100 digital billboards in North America and over 4,100 digital displays internationally. Turning to new partnerships.

We reached the groundbreaking multiyear deal with BlueFocus Communications Group, one of the largest communication companies in China use our digital footprint in Time Square and major U.S. airports to advertise Chinese brands to U.S. consumers.

In this partnership, both of our leadership teams will help BlueFocus client succeed in marketing their products here in the US.

From an industry perspective, we are pleased that the Traffic Audit Bureau for Media Measurement or TAB, released the first major addition to its Out of Home Rating system to include significant new data points such as traffic congestion and vehicle speed.

As part of this new system TAB will for the first time measure individual spots on digital billboards. Previously, TAB tracked digital billboards as if the ad was static. But it will now report ratings each spot in rotation. This clearly represents an important opportunity for Clear Channel that we will continue to pursue aggressive.

Next, I will spend a few minutes reviewing our segment results and then we will wrap up with liquidity before opening the lines up for questions. Starting with Media and Entertainment on Slide seven, revenues were up year-over-year despite a challenging quarter from the industry perspective.

April and May were particularly tough for our core radio and networks businesses, although Clear Channel did outperform the markets in both months as measured by Miller Kaplan. There was an industrywide improvement in June across both core radio and network and Clear Channel significantly outperformed the market according to Miller Kaplan.

Driving this quarter's growth were our traffic and weather businesses, political, digital sales and our events business. Among the quarter's top categories were auto, entertainment, home building and food & beverage. Now to expenses.

I spent a lot of time telling you about how we are focused around tight expense management and our results reflect these efforts. We reported expenses up only 2.1 million in the quarter, although we incurred almost 8 million in costs related to our strategic revenue and efficiency initiatives compared to just under 3 million last year.

Excluding these, CCM&E expenses would have been down year-to-year. That's the first time we've seen a decline since the first quarter of 2013 and if OIBDAN would have been up 1%. This clearly highlights our companywide commitment to tightly managing our expenses seeking new efficiencies and driving more revenue dollars down to the bottom line.

As a result, while continuing to invest in strategic revenue and efficiency initiatives, we expect to see OIBDAN growth in a second half of the year. Let me cover our third quarter pacings before turning to Americas Outdoor. Third quarter pacings through the end of last week in Media and Entertainment are up 1.9% with core stations up 0.2%.

As you've heard me say before, these pacings are just a snapshot in time and certainly don't include everything we do as a company worldwide. Let me also add up political dollars are typically booked later in the quarter, so we expect to realize the bulk of these dollars in September and throughout Q4. Moving to Americas Outdoor on slide eight.

Our revenues declined 4.7% to 319 million and expenses were down 2% mainly due to reduced site lease expenses related to the airport business and lower commission expenses from lower revenues. Let me talk about the drivers for our performance because this was a tough quarter in terms of year-over-year comps.

As you know, we lost 77 digital boards in the City of Los Angeles in April of last year. We are continuing to vigorously work with the city on a legislative solution that would allow us to turn back on as many digital billboards as possible, but, as I've said before, this process does take time.

In the interim, we are selectively seeking permits to convert some of the boards back to the tradition of buying those static signs. A couple of boards were converted in June so they are not meaningful from a revenue perspective yet, but a good parallel step we can take while we work to the legislative process.

As a reminder, this will be the last quarter which we will face these unfavorable year-over-year comps. So, as we've spoke about last quarter, discipline portfolio management result in selective and strategic reduction of certain inventory. For example, we chose not to renew our contract at Boston Logan because it didn't have the ROI levels we expect.

But we did grow our presence in Boston with the South Station contract. We actually had a climb [ph] event at South Station last week with advisers and agencies to showcase our digital assets.

On the National front, as I mentioned to you on our last call, some large national accounts pull back on their Outdoor spending and that decreased occupancy and negatively impacted our overall rate in a second quarter. We start to regain some traction with these National accounts in Q2 and our local and regional businesses remains wrong.

As discussed on previous calls, we spent the last year or so making a lot of change in America's Outdoor. We put in new leadership across the organization, realigned our sales teams and implement a general process and operational improvements.

We needed to make these changes to lay the right foundation for growth at Outdoor and drive various issues that got in the way of us executing effectively in the marketplace.

Now, with most of this behind us, team will go back to focusing on reinforcing our strong relationships with Outdoor specialist agencies while continue to develop strong bonds with clients and strategic planners to deliver the Out of Home Solutions that advertisers want.

We're seeing positive trends for the second half of the year and we're confident in our ability to execute. We're also continuing to grow our Digital presence which better serves advertisers; they increasingly seek more immediacy, flexibility and real-time marketing capability. At the same time, we keep launching new products around shopper marketing.

As for our pacings, again, they reflect us one point in time, but I want to share the trend behind these pacings. As you recall from our Q1 call in April we reported Q2 pacings down 8.7% and we ended the quarter down 4.7%. So far in the third quarter we've seen a steady improvement week-to-week. Q3 pacings are currently down only 1.2%.

For reference, at the end of May, we were pacing down 6%. I feel confident that the trends here points to our improved execution across the board. Turning to slide nine. Our International team continues to deliver with revenues up 7% to $462 million or up 4% excluding the impact of foreign exchange.

Western Europe was a big growth driver for us with a new contract in Italy for the Rome airport, new more contracts in France, as well as growth in Sweden and the U.K.

Revenues in emerging markets also increased including in Brazil where revenue growth was driven by digital advertising and the FIFA World Cup and in China as result of new street furniture contracts. As expected when our portfolio of assets grows so will our expenses due to site leases and operational cost associated with these contracts.

Once again as we have consistently seeing, they become significant OIBDAN generators over time. Our expenses were up 8% to 361 million on a reported basis or just under 5% excluding FX. In addition to the higher variable costs, we also incurred higher legal expenses in Latin America.

Revenue continues to ramp up for these new contracts and we are excited about these assets for both a strategic and the financial perspective. Third quarter pacings for International Outdoor are up 1.9%. On slide 10 we show some of the items that affect the comparability on year-over-year basis.

First in revenues we expect to benefit from this year's political campaigns though there is no Presidential Election. We look forward to our political strategy unit leading our efforts using innovative tools like AuDiO.

With our region scale far outstripping digital only players, Clear Channel can help campaigns target the right voters at the right time. We had nearly $15 million of political spend this quarter end we expect the bulk of political spending to take place in a second half of year.

As I explained earlier, the absence of revenue from the 77 Los Angeles digital billboards affected our year-over-year comparables, as did the lost revenue from choosing not to renew the Boston Logan Airport contract and a couple of other regional airports.

On the expense side, we had 20.5 million of cost related to strategic revenue and efficiencies initiatives this quarter. As I mentioned earlier, nearly 8 million of those costs were in Media and Entertainment.

We anticipate funding new strategic revenue and efficiency initiatives over the rest of year and as I've already told you we continue to tightly manage our expenses seeking new efficiencies and drive more revenue dollars to the bottom-line. We expect these deal benefits in a second half of the year driving OIBDAN growth in Media and Entertainment.

As far as our capital expenditures on slide 11, CapEx for the quarter totaled 74 million, up approximately 3 million versus last year second quarter. Of that 74 million approximately 53 million was invested in Outdoor.

We spent 17 in our America's segment related nearly to -- mainly to the construction of new digital displays and 36 million in our International segment due primarily to new digital billboards and street furniture and renewals of the existing contracts. Our CapEx guidance for the year remains unchanged at $300 million for CC Media Holdings.

Moving to the debt slide on slide 12, we continue to focus on maximizing the value of our business by continuing to improve our capital structure and liquidity through capital markets and strategic transactions. As of June 30, Clear Channel's debt net of cash totaled $19.9 billion.

Also like to refer you our press release and 10-Q for an update on the Intercompany Note and redemption notice for our senior notes due 2021. Brian Coleman are here to answer any questions you have during the Q&A session of the call on this subject. Let's look at our balance sheet information and debt ratios.

CC Media Holdings cash on the balance sheet totaled 798 million at June 30. Our secured leverage ratio was 6.4 times. Clear Channel Outdoor entered the quarter 226 million in cash, its senior leverage ratio was 3.6 times and its consolidated leverage ratio totaled 6.5 times. We of course have a number of levers available to enhance future liquidity.

As we have said previously, we continually and aggressively evaluate our businesses and asset portfolios. As we've demonstrated to our ARN divesture and the sale of other non-core assets like XM Sirius interest, we consistently look for ways to optimize our assets.

For example, last week we sold our non-consolidated investment in a Hong Kong Outdoor business for total proceeds of approximately $15 million. At the same time we keep improving our operations to reduce our working capital needs.

From a working capital perspective, we launched several initiatives in the second quarter to improve working capital and Media and Entertainment. For example, we've begun to centralize collections across our local stations in traffic and weather businesses, and will continue rolling this out throughout 2014.

We have also intensified our efforts on collecting balances over 90 days old and have standardized our policies around accounts payable. We have seen some very promising early results. We expect that these initiatives will continue to bear fruit during the back half of 2014.

We continue to be comfortable with our maturity schedules in the near-term and we'll continue to take disciplined and proactive steps to address our capital structures and liquidity. Most of all, we're confident that our strategic revenue and efficiency initiatives will fuel our future organic performance.

I'll close by saying as I approach my one-year anniversary in this job; I'm pleased with the incredible progress that our team has made to build momentum across each of our businesses all the while prioritizing strong financial discipline.

We're continuing to strength of our company for growth and work hard to execute our strategy become the number one multi-platform media company in revenues and earnings in addition to our industry-leading reach.

Before taking your questions, I just wanted to let you know that we're making a big announcement this morning about the lineup for our fourth annual iHeartRadio Music Festival in September.

We're very proud of our festival just keeps getting bigger and better while strengthening our iHeartRadio brand and we're looking forward to another great success this year. Now, let's open up the line for questions and thank you..

(Operator Instructions). And our first question will go to Jason Kim. Please go ahead..

Hi, good morning. Thank you for taking my question. I'll start off with a big picture question and obviously there's been a lot of chatter around the changes in the behavior of some of the national advertisers this year. It is something that you've alluded to in last quarters call as well.

But can you just talk about what you are hearing from your national advertiser base as far as more competition from digital is concerned for the traditional media companies for both the Radio and Outdoor?.

So a couple things. So, Jason, good morning. Let's first start with Outdoor. I think I mentioned this in the first quarter a little bit.

Some of the loss of our accounts which again you've now seen in the numbers and the pacings in the six-week come back pretty stronger on domestic Outdoor, was attributable to the shift in buying patterns, where -- and again consistent with what we talked about previously several large advertisers pulled out of their upfront commitment and decide to use stock price throughout the year.

We did begin to gain some traction in quarter two, again, reflected in the numbers that I went through earlier that results in 1.2% down today which I'm still not -- I happy with improvement, but obviously I don't want to be down. I think we will continue to see improvement there.

But clearly our financials were impacted and are still impacted a little bit particularly because of rate, because of occupancy first then you have a lower occupancy and therefore you have some slower rate. But we are starting to see the recovery on that.

In general, on the national side, look, it was a tough quarter, the second quarter as a whole for the advertising industry. Really started -- if you remember, just to go back in the first quarter with GDP was down around 3%. And that, you know, honestly blood into the second quarter a little bit.

April and May as I briefly touched upon in my opening remarks were particularly tough in Radio, but we did outperform the market in both those months as measured by Miller Kaplan, was continue to outperform the market in June and it gives some additional context on national spent.

Retail is a big category for us and retail was soft in April and May and it started to rebound in June with some growth in Q3 pacings -- pacings. Entertainment and AuDiO also showed signs of growth in June.

And as I briefly touched upon political, which was approximately $50 million in second quarter, gets placed late and we expect to see strength in that as we really end the third quarter probably more in September and going into the fourth quarter.

So, look, we have a coordinated effort to push to continue to educate the market in terms of maximize the dollars to spend in radio and Outdoor. We continue to make great progress on both. I think just to remind everybody, we had the Nielsen Catalina study that came out, but we held the event in our office.

That was Nielsen put out the effectiveness of radio advertising. And just as a reminder, on average that was for every $6 spent on radio -- I'm sorry for everyone $1 spent -- I apologize, for every $1 spent on radio you got a $6 return on average during that period.

And Ad Age, I think, talked about -- that was more than double the effect of what's out there in TV, so we're getting that word out there to advertisers. And again on the digital front, the announcement that we made with Brian Lakamp coming up to corporate and helping us focus our efforts there.

We also announced our partnership with AdsWizz which really helps to serve targeted ads to consumers through our wide radio stream to iHeart that I mentioned briefly. So bottom-line is, we are very optimistic about the future.

We've come through some -- we've come through a tough first quarter, a transitioning second quarter and look forward to the rest of the year..

And then I hate to be too granular about this but when you look at the weekly trends throughout 2Q and what you are seeing thus far in third quarter and are you seeing a gradual and steady improvement on week-to-week basis as you look into the latter half of 2Q as well as into the third quarter as well – is that a fair characterization?.

Yes, you could've asked daily trends. But no, – all kidding aside, look, I will stick by the numbers that I gave you and I kind of gave you the pacings, highlighted what we've seen so far in the third quarter like CCOA. We've seen the steady improvement on a week-to-week basis.

We continue to see strength in local and regional and strong improvement on the national basis. International, we’re pleased with the pacings at, up 1.9% International continues, you saw in the first quarter, you see in the second quarter we can near to be very pleased about that.

And in CCM&E, again, up 1.9% overall in the pacings we've had very strong performance in traffic and weather and core stations were up slightly and we expect to see that pickup with Political as we’re going throughout the third quarter.

Sounds good. And just a question on the capital structure.

So with the remaining portions of your 10.50% and 11% notes being called in August the only piece of debt maturity you have left in 2016 these are term loan B so how should we think about that maturity for you as you continue to look at the capital structure and then how does non-core asset sale come into play as you think about pushing out debt maturity as well?.

Yes, so the $1.9 billion of bank debt is really the largest remaining piece of the 2016 stack and that's likely a refinancing candidate. So I don't know that asset sales really has a lot to do with it.

I guess you could kind of indirectly get there that refinancing the 1.9 billion will create some additional cash interest expense and you want to make sure that you can cover that additional cash interest expense to liquidity. We have numerous sources of liquidity.

We want to continue to grow our free cash flow, got a little excess liquidity from the issuance of the 10% notes. We're using a little bit of that to redeem the par call on the [Indiscernible]. So, I think it's part of the mix, but I don't think it is directly related to the decision whether or not to refinance the 1.9 billion and when.

I think I've been pretty consistent and then my view is we'll continue to watch the markets. We want to kind of -- as we have in the past, be opportunistic that the markets are strong, they've backed up a little bit over the past few weeks, but they're still historically pretty attractive.

We'll continue to look at whether refinancing some or all of the 1.9 billion make sense. And we'll continue to have dialogue about it. We have dialogue all the time around it.

So, -- until we do something, we're probably going to continue to get asked question, but I do think it's something that I have a bias that we take a look at this year before we go current. Whether that's next week or three months from now? No signal on this call, but obviously we're aware of it.

We think the markets are attractive, we think they are still attractive; we'll continue to watch and be updated..

Understood.

Let me just add one thing on asset sales by the way and we've been talking about this, we talked about kind of my -- where I mentioned my year anniversary.

We -- and you saw this in a smaller way in this quarter with our sale of non-consolidated, the Hong Kong Outdoor Billboard business, we have whether you take Sirius XM, our interest in radio stations in New Zealand through APM that were also non-consolidated and the most recent sale, we have and we will continue intensely focused to look at assets that we can get more value by selling them than having minority stakes as an operating company there, so that something we committed to all of you to do and we will continue to do that..

Thanks for the thoughts..

Thank you. We’ll go to Avi Steiner. Please go ahead..

Thanks for the time folks. Let me start off here. Just on the margin side, strategic revenue initiatives are continue to grow and just a little more granularity behind that. And I know you've been asked this before, but just timing of revenue flow through from some of these investments? And then I have a few more. Thank you..

Sure, Avi. Thanks for the question.

Look, I think, -- I don’t think I believe, more than I think if you look at our revenue this year and cost initiatives, if you take out, I will say the cost the one-time cost that we invested in that CCM&E expenses -- and I assume your focus is a little more CCM&E, but I'm happy to talk about any of the other divisions -- were down on year-over-year basis in the second quarter, slightly down, but they were down.

That reverses a significant change. And I don't think I am accurate that we've been down at CCM&E since the first quarter of 2013. So I feel good about that. You are going to see -- you will continue to see that in the third quarter and fourth quarter of this year.

So you will continue to see expenses on a year-over-year basis go down and you will continue to see margin improvement, you'll continue to see us bring more the revenue down to the bottom line. And quite frankly this is something we do every single day in terms of challenge our efficiency, the way we do things.

And so it is just a way of life in terms of the way Bob and I are running the company, and that will never change up there.

And again, I think if you look at CCI and the CCO, it’s the -- Dave done a better job over the last couple years, quite frankly, and you will continue to see our focus there and those expenses continue to be flat to down even when you take out CCO.

Part of the reason we done CCO was first we were down in revenue to sales commissions, but even if you take that out, we were still down our expenses on a year-over-year basis. So William and his team has done a really nice job in that area also. So William and his team has done a really nice job in that area also..

Okay, that's great.

And just one last quick question on this should -- the $20 million and changes, is that right run rate for the rest of year on a quarterly basis in terms of those expenses, those initiatives?.

Yeah. I'm not going to comment on that, because like I said -- I mean, if you were -- I'm not going to invite you to do this, because you'd probably take me up on a better view with.

Bob and I in our office every day down, down there's on the floor -- there's probably five conversations a day, should we do this, should we do this, should we change this. We're getting the most out of this, because if we get more effective, that’s the way we have to take.

I think we always -- everybody kind of has two jobs in this company and maybe three jobs in a period of time. So we are really trying to maximize the effectiveness. So I don’t want to comment on that, because I'm not in a position to comment on that..

Fair enough. Let me change directions here.

Bob Pittman was quoted not long ago as saying iHeartRadio was generating revenue in hundreds of millions and I'm curious its that’s largely from the concert side, or is the revenue coming from the radio app streaming side? And related to that and particularly with the AdsWizz announcement, is that meant to grow or introduce ads separate from terrestrial side for the first time?.

So couple of things on Bob's comment. Bob's reference -- I'm not going to breakout anything on Bob's comment. Bob's reference was not a standalone figure. As we both always talk really about.

We talk about the overall impact of iHeart on CCM&E and again because we’re multi platform business the numbers are so intertwine with our other radio assets that we don't break out iHeart separately in terms of revenue and profitability and now see the ability to do that.

On AdsWizz, which again, I mentioned in remarks, I mentioned little bit earlier – I mentioned it – we’ll talk about now for a second again. Its really incredibly excited for us because what it does and just to be clear what AdsWizz does.

It gives us targeting capabilities to serve our advertisers and marketing partners, so if you think about it this way all the iHeart listeners today hear the same ad at the same time. Under this partnership that we have with AdsWizz these ads can now be personalize based on location.

They could be personalized based on demographics that puts us in a very unique position to serve advertising individually with demographic and geographic information and simultaneously it scale. So if you think about that we have three key benefits.

We get targeting that we can turn customer ads based on age, gender, psychographics, device platform and more. We can do on a multi-platform basis target of course the vast array of multi-platform systems whether its the connective car, in-home advertising anywhere the audio stream – stream by consumers and we get metrics.

We can provide real time historical and historical analytics about the audience of each stream. So it’s a great tool to reach our consumers. So it’s a benefit to the consumers and benefit to the advertisers and we will begin our discussions, we will do it right now to educate all of our advertisers on the new capabilities..

When is that going to be rolled out? Sorry..

Its been formally launched in the late in the third quarter..

Excellent.

And a couple more I think certainly a few ones and maybe Brian jumps in but I just want to confirm if I understand its correct the kind of post the Intercompany Note sale that I guess it will settle in August, the company will have about 421 million of 14s sitting in unrestricted, then how do you guys think about monetizing those? And as a quick follow-up on the HK sale, was that part of Clear Media and is that any signal all you may look to may be more broadly sell that asset to China? Thank you guys..

Yeah, I'll answer the first one. You're right, if you took -- I think it was 199 million roughly 200 million, the 2% in 21 is currently held by the company.

So, when CCU issues the additional 222 in change and sells those to the unrestricted subsidiary where the 199 million, so you can add the two together and I think you get to the 21, 422, so that's correct. With respect to how we do that position I think it is optionality.

They are currency that we have -- we have utilized in the past, we've sold them to the market by structuring this transaction that was announced the way we have, we preserved that refinancing capability, but haven't actually gone out and take the yield and would've had to pay had we issued to a third-party.

So, I think the way we look at is we'll continue to watch how those notes trade, we'll continue to look at our liquidity needs, we'll compare this liquidity option to other liquidity options we have and whatever is the most efficient or effective we'll take a look at. There are no plans today to do anything with those notes.

With respect to the Hong Kong subsidiary, it is not part of Clear Media, and I don't know if there was something else that question or if that was it, Avi?.

I think that's it. I'll leave it there and you guys ever want to invite me to your management meetings, I'm happy to attend..

Thanks, Avi..

Thanks..

And we’ll go to the line of Lance Vitanza. Please go ahead..

Hi, thanks for taking the question. I guess I have two questions. The first is just on the core radio, the local national network revenues I understand that those were weak. It was obviously very challenging environment.

But could you give us a sense for the magnitude of the declines in those categories in 2Q and then maybe as you look out into Q3?.

Yeah, we don't -- again, I don't want to repeat what I said before. But we don't breakout any of the categories other than to point out that retail is a big category for us, which we found significantly in April and May and started rebound in June.

And Entertainment and Auto showed signs of growth in June, and I've already commented two or three times about Political. But I'm not going to break anything else down..

Okay. And then my other question is with respect to iHeart. I don't know if it is possible to talk about the lifecycle of the subscriber. But with registered users of 50%, I would've expected total listener hours to be up a good bit more than 3%. Could you put that in context for us? I think Pandora is reporting total listener hours up 22%.

So are you guys falling behind there, or is this just a timing issue?.

Look, I mean, we are -- total listening hours -- remember, this is wide listening hours, so total listening hours continue to grow. And as you know we are up against the bigger comps so that just honestly the reason why you get a little small percentage.

But if you look at May, we saw an all-time high, 160 million hours which was also about the monthly average across the quarter. So we feel -- we also have strong growth in live listening in addition to 160 million hours. So that's a huge differentiator for us in the marketplace..

Thanks very much..

Thank you. We’ll go to Marci Ryvicker. Please go ahead..

Thanks. I just want to clarify something you said. You said that in April and May the industry was really weak, but you outperformed in June got better.

Where you talking about the whole company, just radio, just Outdoor?.

Yeah. Those remarks were what I believe I said is, in April and May we significantly out -- we outperformed the industry for Miller Kaplan and we significantly outperformed the industry in June and again that was the radio industry I was talking about..

Okay.

Then for Outdoor did you see a similar improvement when you went from April to May to June? And I would assume that the bulk of the improvement from the time you give us your pacing data to the time you reported was probably because you were lapping LA?.

No, I would say it is a couple of things. Right? I mean -- first of all, we don’t give that type of breakout in Outdoor. I actually gave that sort of fair amount of detail on this call even though as you all know I know him, but I hate pacings.

But I just wanted to give you those as bolometers for the progress we are making from the time we released earnings in June till today were we are down 1.2%.

So a part of it is -- because we are starting to see the benefit of LA or not the benefit, we're starting to have a comparison with LA, but also a significant part of it is what I've said is that we have made a number of changes in the organization. We've strengthened the Domestic Outdoor organization.

We had some issues, very honestly, that negatively impacted our relationship with the out-of-home specialists. We had some unintended consequences to that. I've been very -- I was straightforward on that in the first quarter, I was straightforward on that in this call.

We took significant steps Bob, myself, William, the rest of -- Suzanne -- the rest of the management team, specifically around sales alignment to fix the issue. And now we've got the right foundation for the rest of the year and for the future years to go forward and I think you are starting to see the benefit of that.

And like I say always part of – but also look we are always – our asset mix always changes, just to give you an example. We decided not to bid, we bid on the Boston Logan Airport this year which was in last year's numbers because we couldn’t get the right ROI.

Because at the end of the day we’re here to make money for all of our stakeholders and at the same point we won the Boston South Street station. So LA is part of it, but the bottom line is the asset mix is always moving around it changing a little bit..

Okay. And then one question on the CBS and VAN Wagner transaction.

Is that – I don't know if that changes your competitive position or their competitive position, how is this going to impact you?.

Okay. I mean, we are disappointed. We didn't get VAN Wagner; they're great set of assets. Richard has done a great job in terms of building that company and he's been now handsomely rewarded. This is I think its great for us in the industry at 21.6 times multiple which is a great testament to the value of Outdoor.

But if you look at our size and scale it would have been a nice asset to have but its not something that’s critical to our growth....

Okay. Great. Thank you.

And we have a question from [David Miller]. Please go ahead..

Yes, hey, guys. A couple of questions. I just want to understand the mechanics a little bit of some of the items below EBITDA, particularly the tax benefit of 24.8 million if you could just take us through that but obviously skewed net income higher. Just want to understand that a little bit more.

And then on – just sort of on a broader note, bigger picture, how would you guys describe the overall tone of the Outdoor business in the U.K.? Would you say it's going gangbusters, would you say it's kind of holding its own? Would you say it's pacing above the 1.9% bogey that you just issued, I realize it's just a pacing number, I understand? How would you just describe just the overall tone of the U.K.

business versus the rest of Europe? Thanks a lot..

Okay, so on the tax benefit, look I'll like if you -- happy to have a follow-up with Effie in terms of more detail, but because of the results from timing in the mix of earnings particularly across different jurisdictions and the impact of not recording deferred tax assets on our current period losses because valuation allowances, you kind of get an interesting effective tax rate, let's just say that.

But I'm not sure I want -- I'll let you follow-up with Effie in terms of walking through the details. On things outside the United States and you asked both -- I think you asked both about [Indiscernible], but then you asked a broader question about Europe, couple different things.

First, we did launch a big contract in Italy as the exclusive operator of Airport Advertising Space in Rome's two airports. We entered into some new mall contracts in France. We added about 100 jingle displays and so when you look at our result, which we have a lot going on outside. Our business has been strong in the U.K.

as it has been strong in Sweden. I think I referred to the British Airways ad in my opening remarks that we won the Cannes Lions Award for that. We got great leadership in U.K. starting with Cathy, Deaton who runs a big piece of our European Operations -- in U.K.

So, I think the business as you know, I don't think I will say that business is strong, a part of it is we're creating the opportunities. I mean some of the most creative work we're doing on worldwide basis in the Outdoor business is outside the United States and it led by places like U.K. and Sweden. It is just amazing.

And also like in Brazil where we have launched, some consumers is really need 70 digital clocks in Brazil which drive digital revenue. Then we have got some street furniture contracts in China too, that added. So it is a mixed bag, but simply said the U.K. is very strong..

Thank you..

Thank you, everyone for joining the call. Please feel free to follow-up with me, Effie or with Brian Coleman after the call. We look forward to speaking with you..

Thank you, ladies and gentlemen. That does conclude your conference for today. Thank you for your participation and for using AT&T Executive Teleconference. You may now disconnect..