Clear Channel Outdoor Holdings, Inc.

Ladies and gentlemen, thank you for standing by. Welcome to Clear Channel Outdoor Holdings Inc's 2022 Second Quarter Earnings Conference Call. If you would like to ask a question during the presentation, you may do so by pressing star related by one on your telephone keypad. I'll now turn the conference over to host Eileen McLorlin, Vice President, Investor Relations. Please go ahead.

Good morning and thank you for joining our call. On the call today are Scott Wells, our CEO, and Brian Coleman, our CFO. Scott and Brian will provide an overview of the 2022 second quarter operating performance of Clear Channel Outdoor Holdings, Inc. and Clear Channel International, BV. We recommend you download the investor presentation located in the financial section in our investor site and review the presentation during this call. After an introduction and a review of our results, we'll open the line for questions. And Justin Cochran, CEO of Clear Channel Europe, will participate in the Q&A portion of the call. Before we begin, I'd like to remind everyone that during this call, we may make forward-looking statements regarding the company, including statements about its future financial performance and its strategic goals. All forward-looking statements involve risks and uncertainties, and there can be no assurance that management's expectations, beliefs, or projections will be achieved or that actual results will not differ from expectations. Please review the statements of risk contained in our earnings press release and our filings with the SEC. During today's call, we will also refer to certain performance measures that do not conform to generally accepted accounting principles. We provide schedules that reconcile these non-GAAP measures with our reported results on a GAAP basis as part of our earnings release and the earnings conference call investor presentation. Also please note that the information provided on this call speaks only to management views as of today August 9th, 2022, and may no longer be accurate at the time of a replay. Please turn to slide four in the investor presentation, and I will now turn the call over to Scott Wells.

Good morning, everyone, and thank you for taking the time to join today's call. We delivered consolidated revenue of $643 million during the second quarter, representing an increase of 21% over last year's second quarter. Excluding movements in foreign exchange rates, second quarter consolidated revenue was up 28% ahead of the consolidated revenue guidance we provided on our first quarter earnings call. If you include our first quarter performance, consolidated revenue is up 35% through the first half of the year, excluding movements in foreign exchange rates. A great start to the year, and we remain optimistic about the second half. During the second quarter, we also delivered a significant improvement in both operating income and adjusted EBITDA. Our solid performance was once again driven by broad-based demand from advertisers, with particular strength across our digital footprint in the Americas and Europe. I'm grateful for our team's consistent focus on building our business, especially during a period that has been anything but normal. We're demonstrating the power of our platform in new and creative ways and we're making headway in attracting new advertisers and deepening our presence across multiple categories. Thus far this year, we believe the out of home industry and our company have benefited from the advances we've brought to the fold as an industry, combined with the movement among many brands to reduce their exposure to an oversaturated digital display and search market. Our resiliency is further supported by the growing contribution from our digital boards. During the second quarter, Digital revenue, which accounted for 39% of consolidated revenue, rose over 50%, excluding movements in foreign exchange rates compared to the second quarter of last year in both the Americas and Europe. Looking at our digital footprint, in the U.S., we deployed 29 large format digital billboards during the second quarter, adding to our total of more than 1,600 digital billboards. Combined with our smaller format digital displays in airports and on shelters, we have a total of more than 3,200 digital displays domestically. And in Europe, we added 281 digital displays in the second quarter for a total of over 18,800 digital displays now live. We continue innovating and modernizing our asset base and operating infrastructure. We're making our solutions faster to launch, easier to buy, and more data driven, which is expanding the pool of advertisers we can pursue. Turning to the second half of the year, Our business is continuing to perform well as advertisers tap into our resources to build mindshare and position their brands for success. In the U.S., our bookings remain healthy and are on track to handily exceed 2019 annual levels. Digital continues to drive the improvement as well as airports, which is benefiting from a strong rebound in travel, including in the New York airports. Entertainment, retail and high fashion, business services, and amusement spending are all strong. while the insurance and beverage categories remain a bit of a headwind. Additionally, we're seeing particular strength in our Northern California, Southwest, and Midwest regions. In Europe, overall bookings for the third quarter are pacing ahead of last year and 2019. We're benefiting from continued growth in digital, as well as the recovery of transit. With regard to Q4, I should note that we expect to see some benefit from the World Cup, as advertising demand related to the tournament is expected to increase in addition to seasonal holiday spending. Brian will provide an overview of our third quarter guidance in his prepared remarks. Looking at the broader economy, we're keeping a close watch on business trends. As we have demonstrated during the COVID-19 pandemic, we have levers to moderate our costs should the need arise, and we remain committed to ensuring that we have ample liquidity on our balance sheet. The resilience of our platform has been borne out during challenging periods in the past, and we feel good about where we are today. particularly with regard to our digital capabilities and the flexibility and efficiency they give us in serving our customers and adjusting the changing market conditions. Finally, as originally announced in December 2021, we continue to conduct a strategic review of our European business. Our goal has been and remains optimizing our portfolio in the best interest of our shareholders, both through a potential transaction or transactions and through the resulting greater focus on our core America's business. As you all know, since the time we began the strategic review, there has been a negative shift in the environment for consummating transactions and for obtaining related financing, which has raised hurdles to transact for the whole of our European business. Still, it is worth noting that in the second quarter, our European business rebounded to pre-COVID-19 revenue and margin levels. The interactions we've had with potential buyers to date have convinced us that a single transaction, while potentially possible in theory, may not be the ideal path to take to accomplish our goal. In light of these developments, we're focusing on strategic dialogues with potential acquirers regarding the disposition of certain of our lower margin or lower priority European assets. If we are able to complete those types of sales, we expect our remaining European perimeter to have substantially higher EBITDA minus CapEx margins than our current European business does, and to be more able to meet its own cash needs. Also, if we're able to complete those types of sales, we believe that our remaining European perimeter could be helpful in bringing our leverage down over time through the generation of net free cash flow and net sales proceeds for potential dispositions if and when the deal-making environment improves. We cannot guarantee the timing or success of our efforts to dispose of those lower margin or lower priority assets, and we will communicate further details as and when we are able. With that, let me turn it over to Brian to discuss our financial results as well as our guidance.