OUTFRONT Media Inc.

Good afternoon. My name is Dennis, and I will be your conference operator today. At this time, I would like to welcome everyone to the out front second quarter 2023 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star, then the number one on your telephone keypad. To withdraw your question, press star one again. I would now like to turn the conference over to Stephan Beeson, Vice President of Investor Relations. Please go ahead.

Good afternoon, and thank you for joining our 2023 second quarter earnings call. With me on the call today are Jeremy Mayles, Chairman and Chief Executive Officer, and Matthew Siegel, Executive Vice President and Chief Financial Officer. After a discussion of our financial results, we'll open the lines for a question and answer session. Our comments today will refer to the earnings relief and a slide presentation that you can find on the investor relations section of our website, outfront.com. After today's call is concluded, a replay will be available there as well. This conference call may include forward-looking statements. Relevant 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 2022 Form 10-K and our June 30, 2023 Form 10-Q, which we expect to file in the coming days. We will refer to certain non-GAAP financial measures on this call. Any references to OIBDA made today will be on an adjusted basis. Reconciliations of OIBDA and other non-GAAP financial measures are in the appendix of the slide presentation, the earnings release, and on our website, which also includes presentations with prior period reconciliations. Let me now turn the call over to Jeremy.

Thanks, Stefan, and thank you again, everyone, for joining us today. While our revenues reached our mid-single digit guidance provided in May, they were a little below our original expectations and budget. The quarter got off to a good start, but business softened towards the end, particularly in June, where much of the late booking revenue we had experienced in recent quarters did not materialize to the same extent. As you can see on slide three, which summarizes our headline numbers, Total consolidated revenue grew 4% during the quarter, reflecting about 3% growth in our core business and around a point of growth from various acquisitions over the prior 12 months. Adjusted OEBDA declined slightly year-over-year due to transit and other, while AFFO was down primarily due to this lower OEBDA and higher interest expense. Slide 4 shows our revenue results by segment. Total U.S. media increased nearly 5% on a reported basis year over year. Other, which consists mostly of Canada, was down 7% versus the prior year on an as-reported basis, hurt by the stronger U.S.-Canadian dollar exchange rate. On an organic constant dollar basis, other was down 2%. Breaking this down further on slide five, you can see the components of our U.S. media revenues. Billboard, which is about 80% of our revenues, grew 6%, with good performance in most of our markets, led by New York and Miami, which continue to be particularly strong. As we had anticipated, our transit revenue was again essentially flat versus last year. The details behind our local and national revenues in our U.S. business can be seen on slide six. As you can see, national growth outpaced local this quarter, up nearly 6% year over year, compared to locals, almost 4%. The strength in national advertising was seen in the strong performances of our largest markets, and our local-national split was 58%, 42% in the quarter, moving us closer to our more typical 55-45 split. Slide 7 illustrates our U.S. billboard yield, which grew just over 5% year-over-year to over $2,850. This improvement was driven primarily by an increased number of digital faces, which typically generate more dollars per board than average. Slide 8 highlights our positive digital performance, with digital revenues growing almost 13% in the quarter and representing nearly 32% of our total revenue, up 250 basis points from last year. Digital billboard revenues were up approximately 14% versus the prior year, primarily because of new inventory. We added 38 digital boards during the quarter, raising our total to 2048. Digital transit was up 9%, also primarily due to additional inventory compared to last year. On slide 9, you can see the results of our static revenues, which were essentially flat year over year, with 1% growth in billboard being offset by a 6% decline in transit. Though modest, the growth in static billboard revenues is notable, given that we continue to convert many of our best static boards to digital. Before handing the call over to Matt, I want to come back to transit. You'll see in our release that we booked an approximately $511 million non-cash impairment charge on our transit reporting unit and our transit assets, particularly the digital build-out of our New York MTA assets. This non-cash charge follows accounting guidelines and the result of our revised valuation of our transit franchises in our financial statements. This change reflects the impact of the disappointing performance we've seen thus far this year and subsequently lowered future expectations in our revised financial model. Matt will go into greater detail on the numbers here momentarily. Clearly, the COVID-19 pandemic massively disrupted how people work and commute, adversely impacting transit ridership, and in turn, our ability to generate advertising revenue on these assets. The ongoing lower ridership level, coupled with new urban trends and some adverse public perception of the transit environment in major cities, was certainly not what anyone expected when we entered into these contracts. And while we still absolutely believe our transit business will continue to recover, the pace of recovery has stalled in 2023. I would also mention that given the current challenges posed by the MTA contracts in particular, we are currently engaged in conversations with the MTA and hoping to find a mutually agreeable approach to address the significant changes in the New York City transit environment since the signing of the agreement in 2017. We'll update you on this in the coming months. In any event, we considered it advisable, prudent, and timely to update the value of our investment in these transit franchises, leading to today's non-cash charge. I would additionally mention this period of transit weakness, further impacted by changes to the full television schedules caused by the writers' and actors' strike, will present us prevent us from achieving our previously issued FFO guidance for 2023. Again, Matt will provide more detail on our revised expectations later on the call. And with that, let me now hand over to Matt.