Clear Channel Outdoor Holdings, Inc.

Ladies and gentlemen, thanks for standing by. Welcome to the Clear Channel Outdoor Holdings Inc's 2022 Fourth Quarter Earnings Conference Call. If you would like to register a question during the presentation, you may do so by pressing star 1 on your telephone keypad. Now I'll turn the conference over to your host, Eileen McLaughlin, Vice President of 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 fourth quarter operating performance of Clear Channel Outdoor Holdings, Inc. and Clear Channel International, BV. We recommend you download the earnings conference call investor presentation located in the financial section in our investor website and review the presentation during this call. After a new production and a review of our results, we'll open the line for questions and Justin Cochran, CEO of Clear Channel UK and 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 amount to some expectation. Please review the statements of risk contained in our earnings request 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 and deficit presentation. Please note that the information provided on this call speaks only to management views as of today, February 28, 2023, and may no longer be accurate at the time of our 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. Our fourth quarter results capped off a strong year for our company as we soundly rebounded coming out of the pandemic and benefited from healthy demand for our digital assets. We generated consolidated revenue of $750 million, excluding movements in foreign exchange rates. In line with our guidance, and up approximately 1% as compared to our very strong performance in the fourth quarter of the prior year. Our consolidated revenue was also ahead of the fourth quarter of 2019, excluding movements in foreign exchange rates in China. We delivered a record revenue quarter for our Americas business, against a record performance in the fourth quarter of the prior year. Our European business also delivered strong revenue results despite European turbulence and the ongoing strategic review of our businesses in Europe. For the full year, consolidated revenue was up 16.5% excluding movements in foreign exchange rates. I'd like to thank our company-wide team for their dedication and hard work in executing our strategic plan and contributing to our results during the past year. We operated at a high level as we progressed in our transformation into a technology-fueled visual media powerhouse, reaching a growing pool of advertisers. And we did this while improving productivity. Our story is both an operating one in terms of our efforts to increase revenue, drive further gains in productivity, and increase operating cash flow. It's also a capital structure one in terms of our focus on evaluating all options to improve our leverage ratio and reduce our debt. On the operating side, investing in our digital transformation remains central to our plan, including expanding our digital footprint, strengthening our data analytic offerings, and continuously improving the customer experience. We believe we are elevating our ability to provide our clients with the kind of experience they expect from digital media, coupled with the mass reach of out-of-home. And our experience to date tells us these efforts are leading to growth. During the fourth quarter, digital accounted for 43% of our consolidated revenue, which rose 4% during the quarter compared to the fourth quarter of last year, excluding movements in foreign exchange rates. As we expand our digital footprint, we're continuing to develop a more addressable and efficient operating platform. We're making our solutions more data-driven, easier to buy, and faster to launch. These initiatives are allowing us to convert more revenue to cash flow and better leverage our scale and reach. while demonstrating results in ways that elevate the attractiveness of out-of-home advertising. We believe these efforts supported our outperformance relative to the majority of other traditional media platforms in the past year. As we execute on our plan, we believe we can drive improved operating cash flow over time given the operating leverage and strong fundamentals inherent in our model, as shown in the long-term guidance we provided last September and are confirming today. Beyond operating execution, we're also committed to continuing to review avenues that will enable us to establish an appropriate capital structure that we believe maximizes the value inherent in our business. At the close of the year, we announced a definitive agreement to sell our business in Switzerland for $92.7 million, which remains subject to previously disclosed closing conditions. We intend to use the anticipated net proceeds to improve our liquidity position while our strategic review of our low margin and low priority European businesses remains ongoing. As we said, our intention for Europe is to have a perimeter with substantially higher adjusted EBITDA minus CapEx margins, which is expected to help improve our leverage over time through the generation of operating cash flow and net sales proceeds from potential dispositions. As we have previously emphasized, we cannot guarantee the timing or success of our efforts, and we will continue to communicate further details as and when we are able. Turning to the year ahead, our business remains healthy, with revenue expected to reach between $2.575 billion and $2.7 billion, excluding movements in foreign exchange rates. In the U.S., we're wrapping up the best up front since we started measuring, and our premium locations are strong, although a few categories are reducing or delaying campaigns. And as a reminder, the first quarter faces tough comps with the prior year. Specifically, on a national basis, we are seeing softness in the first quarter due to crypto and emerging tech companies pulling back on significant spending relative to the first quarter of 2022. So at this point, we're not seeing any major changes from a macro slowdown. Rather, the impacts we're seeing relate to dynamics within specific categories. Dialogues with advertisers remain very constructive And in fact, we are continuing to develop new categories and broaden the universe of advertisers we can pursue. In Europe, we've maintained some of the momentum we saw in Q4, and we're seeing healthy demand with no indications of a slowdown due to macro concerns. Based on our conversations, brand owners have indicated that they will continue to advertise as they recognize both the need and opportunity to remain visible. I should note that we also have an easier comp in Europe given all markets hadn't fully rebounded in last year's first quarter. So overall, Europe is off to a good start, and January came in marginally better than our expectations. As we execute our plan, we are keeping a close eye on trends across our markets and remain optimistic about our business. Brian will provide our guidance for both the first quarter and the full year. And with that, let me now turn it over to Brian.