Ladies and gentlemen, thank you for standing by. Welcome to Clear Channel Outdoor Holdings, Incorporated’s Third Quarter 2021 Earnings Conference Call. I will now turn the conference over to your host, Eileen McLaughlin, Vice President, Investor Relations. Please go ahead.

Good morning, and thank you for joining Clear Channel Outdoor Holdings’ 2021 third quarter earnings call. On the call today are William Eccleshare, Chief Executive Officer of Clear Channel Outdoor Holdings, Inc.; and Brian Coleman, Chief Financial Officer of Clear Channel Outdoor Holdings, Inc., who will provide an overview of the third quarter 2021 operating performance of Clear Channel Outdoor Holdings, Inc. and Clear Channel International BV. After an introduction and a review of our results, we will open up the line for questions and Scott Wells, Chief Executive Officer of Clear Channel Outdoor Americas will participate in the Q&A portion of the call. Before we begin, I would like to remind everyone that this conference call includes forward-looking statements. These statements include management’s expectations, beliefs and projections about performance and represent management’s current beliefs. 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 Risks contained in our earnings press release and filings with the SEC. 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 release and the earnings conference call presentation, which can be found in the Financials section of our website, investor.clearchannel.com. Please note that our earnings release and the slide presentation are also available on our website and are integral to our earnings conference call. They provide a detailed breakdown of foreign exchange, segment revenue, adjusted EBITDA and adjusted corporate expenses, including the impact of share-based compensation and restructuring charges, among other important information. For that reason, we ask that you view each slide as William and Brian comment on them. Also, please note that the information provided on this call speaks only to management’s views as of today, November 9, 2021 and may no longer be accurate at the time of a replay. With that, please turn to Page 3 in the presentation and I will now turn the call over to William Eccleshare.

Good morning, everyone, and thank you for taking the time to join today’s call. We delivered very strong results during the third quarter and we entered the fourth quarter with continuing business momentum in that we capitalized on the broad base recovery we are seeing across our markets. Advertisers are returning to launch new campaigns and rebuild brand awareness. This rebound, together with new advertisers discovering our medium for the first time, is driving growth in many of our markets ahead of 2019 revenue levels, in both our digital and traditional assets. Our consolidated revenue in the third quarter increased 33.3% over the prior year. Excluding FX, consolidated revenue was $590 million, up 31.8% over the prior year. America’s revenue was $319 million, up 42.6%, in line with our guidance and 97% to 2019 revenue. Europe revenue was $256 million, up 18.2%, which was slightly ahead of our guidance and 97% of 2019 revenue both excluding FX. As we have highlighted on past calls, we have a resilient business that has consistently demonstrated its ability to bounce back from macro disruptions. We are clearly seeing this occur and we are very pleased with how our business is performing in the current quarter. And it is with that confidence in our business and liquidity position that we will repay the $130 million outstanding balance of the revolving credit facility. Coming out of COVID, advertisers are embracing out-of-home as they recognize the enhanced capabilities we have built into our platform. The power of our assets is only matched by our team of talented and dedicated people and the deep relationships they have maintained across the industry throughout the pandemic. Given the expansion of our digital footprint, and the related strategic investments in both data analytics and programmatic that we have made in…

Thank you, William. Good morning, everyone and thank you for joining our call. As William mentioned, we continued to see a strong rebound in our business as reflected in our third quarter results and outlook for the fourth quarter and we continue to manage our cost base including negotiating rent abatements in some of the markets most affected by COVID-19, as well as strengthening our capital structure. Moving on to the results on Slide 4, in the third quarter, consolidated revenue increased 33.3% to $596 million. Excluding FX, revenue was up 31.8%. Consolidated net loss in the third quarter was $41 million, compared to a consolidated net loss of $136 million in the prior year. Adjusted EBITDA was $136 million in the third quarter representing a substantial improvement over the prior year, which was $31 million. Excluding FX, adjusted EBITDA was $135 million in the third quarter. Please turn to Slide 5 for a review of the Americas’ third quarter results. The Americas segment revenue was $319 million in the third quarter, up 42.6% compared to the prior year and in line with the guidance we previously provided in July. Revenue was up across all of our products as notably print billboards, digital billboards, and airport displays. Digital revenue rebounded strongly and was up 68.4% to $115 million. National local continue to improve with both at 43%. Direct operating and SG&A expenses were up 15.8%. The increase is due in part to a 15.3% increase in site lease expense, driven by higher revenue combined with higher compensation cost driven by improvements in our operating performance. This was partially offset by lower credit loss expense relating to our recovery from COVID-19. Segment-adjusted EBITDA was $139 million in the third quarter, up 96.7% compared to the prior year, with segment-adjusted EBITDA margin…

Thank you, Brian. As I make the transition into the new role of Executive Vice Chairman at the close of the year, and Scott moves to take over as CEO, I am confident that we will continue to build on the momentum we are seeing in our business. We are leading the digital transformation of our industry, innovating our platform and strengthening our ability to serve a large universe of appetizers. We are coming out of COVID with a stronger and more dynamic platform supported by an energized worldwide team focused on growth and execution. As we continue to invest in our technology, while carefully managing our costs, we remain focused on driving profitable growth and evaluating all avenues to delever our balance sheet including dispositions. As this will be my last quarterly conference call, I’d like to thank all of our investors for their support over the last few years. It’s been a pleasure to have met so many of you and have engaged in conversations with you regarding our industry, our company, and the direction of the global appetizing market. I’d also like to record my thanks to my exceptional leadership team who have maintained their focus during an extraordinary period of change, both in our business and the world in which we operate. You remain of course in very good hands with Scott and the management team as they continue to execute on our plan to fully surface the growth potential and intrinsic value of our assets. So a very heartfelt thanks to all of you. And now let me turn over the call to the operator for the Q&A session.

We’ll take a question from Steven Cahall of Wells Fargo.

Thanks. And maybe first, Scott, you mentioned national is growing, I think a little bit better than local. Do you anticipate national becoming a bigger proportion of revenue over time, but still as you use RADAR, and maybe have more agency buys and if that does happens, does that give you any fit to your EBITDA margins?

Thanks, Steve. So, right now, we are right around 37% on national and historically we’ve been closer to 40%. So I think there is definitely short-term room to improve. I also think that there is room beyond that for the reasons that you mentioned and our programmatic business skews a little bit national as well. And so, that’s an opportunity to drive it. National does tend to buy our very best assets. They tend to go for a lot of the premium locations and premium products. So, having national increase will generally help our margins, but it’s not like a big light switch, it’s a modest improvement as the mix moves in that direction. Hopefully that helps.

Yes. And then, just picking with Americas, just wondering if you perceived any real benefit in the quarter from rent abatement activity? And as we think about, maybe some of those cost catching up next year, any commentary you could provide on how we should think about Americas’ margins or operating leverage?

Yes, I think I am going to have Brian speak to that. But, yes, we definitely have an opinion here.

Yes, and I would answer that for the entire company, because I am not sure that story is that much different in the Americas than it is internationally and that is our operating teams continue to work with our municipal partners and our various landlords on seeking appropriate rent abatements. And we are going to see some of that in the fourth quarter. I mean, we saw some of that in the third quarter, about $22 million of the $79 million year-to-date. We would expect that to continue for the next few quarters into Q4 and on albeit likely at a decreasing rate as the business starts to improve. And so, I think that the team is doing a good job. There is a bit of a lag. So, it may continue for a while. It is impacting our margins. I think you can see both in the results and in the guidance our margins are back to levels that are around in 2019. But that does reflects some of the rent abatements and temporary cost savings. So, I think that that’s the right way to think about rent abatements both in the Americas and internationally.

Great. And then, lastly, how are you thinking about CapEx for next year? Just as the business continues to improve and get back to prior levels, you are confident enough to pay down some debt in the quarter and may good CapEx came up, so signals like we are sort of getting back to normal and maybe relatedly any more color on some of these additional potential tuck-in Americas acquisitions that you highlighted? Thanks.

Yes, Steve, I think you hit it. As our business normalizes and we are – we do have visibility and that looks like it is recovering. You should expect our 2022 CapEx to also go back to kind of pre-COVID levels. I think that’s a good estimate, and that number is probably $200 million, $225 million. It would exclude China because we no longer have that operation. I think in addition to that, you are seeing enough of these tuck-in acquisitions that we chose to kind of break it out in our commentary. That number is about $20 million, $25 million, we do expect. So that could close in the fourth quarter. It could go on a little longer. Each one of those acquisitions takes a little bit of time and it’s difficult to predict. It was material enough that we wanted to break it out and I think the other thing is, it’s reflective of the current environment. The recovery has brought potential sellers into the market for various reasons. The valuation gap has narrowed. These are unique opportunities that we want to take advantage of. We are in a position where we can. I think you’ve heard others talk about it. So, as long as it’s a material number, we will continue to talk about it and it would be on top of our CapEx expectations. So, really leading into these opportunities if they are available and I think it’s a positive reflection of where we see the business.

Great. Thank you.

Thanks, Steve.

Our next question is from Cameron McVeigh of Morgan Stanley.

Hey guys. This is Cameron for Ben. We would be interested in which verticals in the U.S. have not fully recovered. And then, as a follow-on, how earlier 2022 bookings looking versus pre-COVID growth rates? Thanks.

Sure. I think both of those are U.S. so, I’ll take them. Thanks for the questions, Cameron. On the verticals, we have seen good recovery pretty broadly lagging relative to historical norms would be areas like amusements, theatrical, and restaurants. But they are not lagging a ton – and particularly theatrical has really been bouncing back nicely and have a really strong pipeline of releases that bode well and they are using the medium very effectively. So, those would be the ones what I’d call out on kind of not fully recovered. As far as early 2022, it’s too early for us to give a full read on 2022, but what we are seeing right now is the early buying and the early bookings is that we are running nicely ahead of pre-pandemic times. So, it looks like we are positioned for a strong 2022.

Great. Thanks.

Our next question is from Lance Vitanza of Cowen.

Hi. Thanks, guys for taking the questions. I have one on U.S. and one on Europe. In the U.S., the digital has 33% of the billboard revenues. Could you remind me what’s the all-time high in that number? And when do you expect to get back to that or is the all-time high, where do you think that this percentage goes in, say, three to five years? Is there a point in the future where it’s – where half of the business is digital or how are you thinking about that?

Yes. So, Lance, I don’t have at my fingertips the all-time high, but we’ll follow-up with you and get you that information. You are asking specifically about billboards. I think that, a third of the revenue was about the all-time high in the U.S. for all digital across everything. I am not a 100% sure. It’s in the ballpark of what our all-time high in billboards would have been, but I am not sure if that’s exactly the highest. So, on the first part of your question, we will follow-up. The second part of the question, in terms of where it could go, this is – I am sure you get tired of hearing us talk about regulation and the regulatory constraints. But there are markets in the U.S. that are north of 50%. I think we’ve talked about the UK being north of 60% in terms of digital revenue. And I think the potential for the business is quite a bit higher than a third. But the path to get to it, it’s going to require more cities embracing digital signage and us getting the ability to convert more and more universally, because, within our portfolio, I think this is again something I’ve mentioned before. We have markets that are at zero percentage and when we have markets that are in the mid 50s. So, the range is, and then, of course, internationally, it’s even higher in the UK. So, I think it is going to be a long-term trend for us. I think we are going to see that number creep up over time. But it probably won’t be a sudden move, it will probably just be a steady move over the years to come.

That’s helpful. Thanks. And then, with respect to Europe, could you discuss within a little bit more detail the situation in France, in particular, and I apologize if you probably called this out in the prepared remarks. But where did you come out versus 2019 in France? And is that business profitable today?

We didn’t break out the individual performances of the European market. So, I can’t be specific on the exact numbers or I wouldn’t say the prompt that’s showing strong recovery along with most of our other major European markets. So we are certainly seeing a strong snap back in the French business and recovering very, very well. But we don’t give individual performances for the individual European markets.

The only thing I would add, we are also going through the restructuring plan in the Europe. Some of that would be in France, as well. And you should expect to see the results from the restructuring plan starting now in 2022, but largely finished in 2023.

Thanks, very much. Appreciate it. Thanks.

We’ll take our next question from David Joyce of Barclays.

Thank you. First, I wanted to clarify something. It seems like the CapEx guidance for the year is a little bit below you would previously discussed. Is that because of the tuck-ins that you just mentioned, the $20 million, $25 million being a replacement use of cash? And then, secondly, is there anything you can point to your digital revenue growth is taking share from other media or share budgets? Thank you.

David, I’ll take the first one, and then I’ll flip it to Scott for the second piece of that. You are spot on. It does look like our CapEx guidance came down a little bit. And the way to think about that is, when acquisitions are immaterial which they have been largely over the past few quarters, these are just kind of look at CapEx and you can kind of include that number in the CapEx guidance. We don’t want to like not talk about cash needs. But I think when you get to the level we are out today, it’s more appropriate to break it out. So, in aggregate, I think we are still within or actually have increased the range for CapEx and acquisitions if you combine the two numbers. But since we broke out acquisitions, CapEx look like it – that we tracked it a little bit. So, you are thinking about at the like right way. I think going forward, we are just going to break the two out they are different. So, that’s probably the best way to handle it. And then, Scott, over to you for the digital question.

Yes. I am happy to take a crack at it for the U.S. and then William can way in if there are other aspects of it internationally. It is always difficult to pin down in the aggregate ad budget flows. You get buried under anecdotes very quickly when you look at what goes on. But the couple of things that I’d anchor on it, it’s really specific to the programmatic space. The vast majority of our programmatic ad revenue is coming in via non-traditional agency partners. That it’s not predominantly coming from the agency partners and the agency divisions that buy out-of-home. And so, as we grow programmatic, I do believe that that is a tangible way to think about us capturing more of the digital ad budget stays. And it’s still small to a degree that you are not going to see percentage points moved in that, but I think it gives us a lot of headroom as we think about capturing those budgets. I mean, as I think about the conversations we are having with advertisers, the two primary things that we are having related to other media in terms of the role that we are playing is, helping people diversify away from digital, where they feel like they were overexposed pre-COVID and during COVID. They got even more overexposed to digital display and searching and so forth. And then, the other place that I see us having dialogue about other media is around television and us playing a role that linear TV used to play that of being able to have a broad reach underway and that there are other aspects to call out for these perspectives.

And I think the direct to families is exactly as Scott described today is, Europe is a little bit behind the U.S. in terms of the developments of programmatic platforms for out-of-home. So that is the direction of travel and that was an enabler to I think be able to take more share from digital – the digital platforms.

Great. Thank you very much.

We’ll go next to Jim Goss of Barrington Research.

Thank you. And good luck, William. You’ve had a challenging period to manage through. So, congratulations on that.

Thank you.

And the one question I have is, I am interested in the new advertisers that you’ve been able to secure sort of a best kept secret that’s right in front of us. I am wondering, what is driving the new awareness and the adaption and maybe just comment on that a little bit?

Sure. So, I’ll again take a first pass at it and then, William, if I miss anything, you should definitely way in. We are working on a number of fronts to bring in new advertisers. We have evolved our sales model to have people devoted to calling on large brands, as well as calling on the strategy of planning parts of agencies in a way that we historically have not been arrayed. And so, part of what’s going on is that, we are just covering the market better and I think that continues to have upside for us, not just at the largest advertiser end, but also at the small advertiser end of the spectrum. William talked about it as meeting advertisers where we are, where they are, excuse me. And that has been a really important theme for us as we array our sales forces. So, that’s sort of the first part of it. The second part of it is that, we are bringing to bear new capabilities that many people don’t associate with out-of-home, particularly data and analytics, but also the ability to trade programmatically and you put those two things together, you are having a very contemporary conversation with advertisers relative to what out-of-home was having five or six years ago. And so, that is really what’s making it possible for us to bring in new advertisers in the category. We are able to do things like associate with App downloads, look at the impact of an out-of-home campaign on people downloading apps. We are able to look at prescription uptick as a result of out-of-home campaigns. The types of things we are able to measure and that we are able to bring attribution are much richer than they were just a couple of years ago. And the advertisers are very focused on data and very focused on seeing ROI and we are making it easier for them to do that. So, those are the kind of things that are leading to us bring new advertisers of category.

Yes. And the only thing I would add within Europe is, we have been putting quite an effort into it and we’d start on – encouraging startup – enterprising startup companies to come into the medium and explore the way in which we could run with a low cost of entering into advertising and they can build brand awareness and drive activity through the use of our medium.

Okay. And you just been mentioning data analytics and links to other media, are these likely to remain sort of informal types or are they going to be far more relationships to establishing to create those lines?

When you say formal relationships, you mean with other media or what do you mean?

Yes. Yes. With other media sellers.

Where this is happening, Jim, is it’s happening in the data management platforms of the advertisers a lot of the time. Many of the advertisers have spent extraordinary amounts to build first-party data on their customers and what we are enabling is the ability to associate out-of-home assets in analyses that they are doing with other media. So, it is often the agency or the advertiser themselves that are doing those analytics. We are just enabling it by offering the feed of data on audiences that are exposed to out-of-home.

Okay. And one last one, if I could? Could you comment on the impact on your airport business with the U.S. borders reopening? Is there any shape or scope of any recovery that you can draw attention to?

I mean, yes, we were seeing, that just happened yesterday. William was actually on the first DA flight that was generally opened with the BAC. Everyone has quite a celebration coming to the JFK. But the – that has been something we’ve been aware of for six or eight weeks. You can see in our results that airports was having a good trajectory on their recovery already in Q3. And I’d just say that that trajectory has continued into Q4 and we are definitely seeing advertisers get excited about the fact that international travels happening. It’s probably a little early to declare that we are back on the international part of it, given the first flight was just yesterday. The first flight sections delivered just yesterday. But I would say, it’s a very encouraging development for sure.

Great. Thanks very much.

I’d be happy to return the call to management for concluding comments.

Great. Thank you very much and thanks everybody for engaging with us this morning and for the maximum questions as ever. That has been the first time that Scott, Brian and I being in a room together for the 21 months. As Scott just referenced, the skies are opening and it’s been really good to be in a room together and I had a seamless Q&A being us working together on this. And like my final remarks, again just to thank everybody for their support. You are in really excellent hands with Scott leading the business and Brian continuing as CFO. So, it’s a great leadership team that we have here. I am pleased to be able to announce that kind of talking gesture, we will be issuing our first ESG Report in the next few weeks, which pulls together all of the really excellent work that we do around environmental and social issues all around our global business and therefore it will be available on the investor website within the next few weeks. And I commend it to you it’s quite an impressive record of all of that we do. So, with that said, I will say, thank you very much indeed. Wish everybody all the very best and we look forward to talking to you over the coming weeks and months. Thanks.

This does conclude today’s conference. You may now disconnect your lines and everyone have a great day.