OUTFRONT Media Inc.

Good day and welcome to the Outfront Media Inc. Second Quarter Earnings Conference Call. At this time, I'd like to turn the conference over to Gregory Lundberg. Please go ahead.

Hey, good afternoon, everyone. Thank you for joining our 2020 Second Quarter Earnings Call. We hope that you're all safe and well. We are hosting today's call remotely with Jeremy Mail, Chairman and Chief Executive Officer, actually at our headquarters in New York City. and Matthew Siegel, Executive Vice President and Chief Financial Officer at his home, where I am as well. After a discussion of our financial results, we'll open up the lines for a question and answer session. Our comments today, as usual, will refer to the earnings release and the slide presentation that you can find in the investor relations section of our website, outfrontmedia.com. And after today's call is concluded, an audio archive will be there as well. This conference call may include forward-looking statements. Relative factors that could cause actual results to differ materially from these forward-looking statements are listed in our earnings materials and in our SEC filings, including our 2019 Form 10-K, our first quarter 2020 10-Q, and our second quarter 2020 10-Q to be filed tomorrow. We will refer to certain non-GAAP financial measures on this call. Any references to OIVDA made today will be on an adjusted basis. and other non-GAAP financial measures are in the appendix of the slide presentation, the earnings release and on our website. And I will now turn the call over to Jeremy.

Thanks very much, Greg, and thanks to you all for joining us today. I am indeed back in my office at the moment, and it's frankly great to be here. Particularly good today as I had a power outage from the storm yesterday at my home in Greenwich, and connectivity would have been a nightmare had I still been there. But you know what? Our business is running well on a virtual basis and many of our offices are opening now and I actually really appreciate being back in the Chrysler building, seeing people back on the streets, the number of which is picking up every day. I commuted in today on Metro North Railroad, walked through Grand Central, saw some of our buses on Lexington Avenue. At every step of that journey, I could see the advertising that our clients are running to drive consumer demand for their businesses. Obviously, that demand softened considerably in the second quarter, but that's what we expected to happen. We guided for both the billboard and transit revenue numbers you see here, as well as the expense levels. While we were able to take significant costs out of the business, The dramatic revenue declines drove an even larger impact on Orbiter and FFO. Although it's not exactly satisfying to be accurate when forecasting numbers such as those that you see on slide three, and while nothing is certain in this world, we do firmly believe that the second quarter was the low point for our business resulting from the COVID-19 pandemic. Its effects are still playing out across the country, but we are seeing sequential improvements in our business as we move forward in the second half of the year. And as usual, I'll comment further on this later in the call. So let's now look at our quarterly revenue in more detail, beginning on slide four. Both US Media and our other segment were down a similar level. There's no particular area of our business was spared from the pandemic. However, the most divergence in results was in U.S. media, which you can see on slide five, where transit was down 76% and billboard down 36%. As we talked about previously, this reflects the severe contraction in the transit commuting audience in larger cities, which are all primarily in the northeast, as stay-at-home orders went into effect. At the same time, People still needed to leave their homes for necessities. As you would expect, the audiences were much better above ground than below, which mitigated billboards decline relative to transit. It's worth noting that these cities were, until recently, growing the fastest and outpaced smaller markets within our portfolio. Well, now they're lagging, but we expect them to come to ultimately outperform as we come out of these surreal times. Our biggest cities, New York and Los Angeles, were the hardest hit, and we saw equal pressure in local and national. Slide six shows local and national for all of US media, where you can see that national was down 57% and local was down 43%. Proportionately, this was pretty much what we saw back in 2009-10. with national coming out first, but also the first back in as the economy began accelerating. A good example of the dynamics at play here are the media and entertainment industries which use our portfolio extensively, especially in the top few markets. When we put movies, entertainment, and TV together, They were down 66% year over year, or about 20% of our entire company's decline. In just the movie category, the decline was 84%, and just two studios drove the vast majority of that. Look, it's worth noting that this business isn't gone. It's just shifted to future periods, as the specific movie releases have been moved out. Turning to slide seven, our billboard yields were down 36% in the quarter. Overall, the vast majority of this decrease was more a function of demand than pricing, as we were largely successful in maintaining rate on occupied boards wherever possible. Yields were down more in digital than in static, reflecting the shorter nature of some digital contracts and the fact that digital advertising is more closely linked to timely events and promotions, all of which were curtailed in the quarter across the country. Turning to slide eight, our other segment similarly saw its revenues down by half. Billboards in Canada were very challenged by the length and severity of the lockdown, and our sports marketing business was impacted by the cancellation of the spring athletic seasons. Slide nine illustrates the point I made a moment ago on digital with billboard revenues down 53% and transit revenues down 77%. As you know, our digital product is extremely attractive to advertisers. Recall that last year, our digital billboard revenues were up 17% and digital transit up 89%. Digital will continue to be a key are key growth drivers for us. The second quarter results are an aberration caused by the pandemic, and as Matt will describe momentarily, we are reengaging our digital investment as we move forward. But before I talk more about that and what we're seeing in that regard, let me first hand off to Matt to go through the balance of our financials.