Ladies and gentlemen, thank you for standing by. Welcome to Clear Channel Outdoor Holdings Inc's 2022 Second Quarter 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 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 B.V. 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 risks 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's views as of today, August 9, 2022, and may no longer be accurate at the time of a replay. Please turn to Slide 4 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 rate, second quarter consolidated revenue was up 28%, ahead of the consolidated revenue guidance we provided on our first quarter earnings call. If you included our first quarter performance, consolidated revenue was 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 are 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 in the fold as an industry, combined with the movements among many brands to reduce their exposure to an over saturated 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 US, we deployed 29 large format digital billboards…

Thank you, Scott. Good morning, everyone, and thank you for joining our call. As Scott mentioned, we had another great quarter and we remain optimistic about our business in the second half of the year. However, we do recognize the market is concerned about a potential softening in the business environment and we are ready to respond as appropriate. Moving on to results on Slide 5. Before discussing our results, I want to remind everyone that during our GAAP results discussion, I'll also talk about our results excluding movements in foreign exchange rates and non-GAAP measure. We believe this provides greater comparability when evaluating our performance. To avoid repetition, the amounts I refer to are for the second quarter of 2022 and percent changes are second quarter 2022 compared to the second quarter of 2021 unless otherwise noted. Consolidated revenue was $643 million, a 21.1% increase. Excluding movements in foreign exchange rates, consolidated revenue was up 27.9% to $679 million, exceeding our consolidated revenue guidance. Consolidated net loss was $65 million compared to a net loss of $124 million in the prior year. Adjusted EBITDA was $164 million, up substantially compared to $97 million in the second quarter of 2021. Excluding movements in foreign exchange, adjusted EBITDA were slightly higher at $169 million. Please turn to Slide 6, we'll review of the Americas second quarter results. Americas revenue was $346 million, up 27.4% and even more significant surpassed pre-COVID revenue levels with revenue of 5.8% compared to Q2 of 2019. We continue to see increases in revenue across most of our products, primarily driven by airport displays and billboards. Digital revenue which accounted for 38% of Americas revenue was up 53.2% to $103 million driven by the airports and billboards. National sales, which accounted for 38.6% of Americas revenue was…

Thanks, Brian. Advertising demand remains healthy, and we're pleased with the positive trends we're seeing in our business and our industry in the current quarter. As you may have seen, this morning, we announced our first Investor Day will take place in New York City on September 8th. I look forward to seeing many of you in person and having an opportunity to discuss our strategy for the Americas business in more detail as well as our expanded financial disclosure and financial outlook. And now let me turn over the call to the operator for the Q&A session. And Justin Cochran, our CEO of Europe will join us on the call.

Thank you. Our first question comes from Steven Cahall from Wells Fargo. Steven, please go ahead.

Thank you. Good morning. So, maybe first, just a couple of questions on Europe and the strategic review there. Could you remind us maybe of some of the major markets that you play-in in Europe and any sense of how much the markets that you're considering divesting could represent of that business? And if maybe that's a bit too specific. Could you comment on whether or not you would expect potential transactions to be deleveraging, especially when including maybe some of the overhead costs that might go away?

Hey, Steve. Thanks. Thanks for the question. Just in terms of the big markets that we're in, we have a big business in France, we have a big business in the UK. We have meaningful businesses across the Nordics, Italy and Spain, and we have a good presence in Benelux and Switzerland, I guess, and then a little bit in Eastern Europe as well. But the big ones are the first half dozen that I mentioned. In terms of your question, we kind of told you what we can -- again, kind of feel like we actually went out on a limb a fair bit, but we know there has been a lot of chatter, we know it's been a long time. So wanted to give some sense of how the strategy was evolving. But I think we've kind of given you what we can give you on the strategy. You can imagine there are a lot of different moving pieces that, that make it very hard to answer specific questions about that.

Sure. And then maybe just on Americas, the digital growth is really strong, as that continues to be a bigger percentage probably over time of America's revenue. Maybe first, how do we think about what sort of pricing you're seeing on digital inventory versus print and as that mix shift goes more to digital. How should we think about the margins of the America's business, is it structurally higher, structural little more pressured, maybe with a little bit better kind of growth algorithm? So we're just love to think about that transition.

Yeah. So it's a good question. And the thing about digital that we're seeing really strong digital growth across the portfolio. So not all of it had the same margins, a digital roadside sign has a very different margin structure from a digital sign in an airport, because of the nature of the contracts and how things underlie. So how that mix plays out over time is going to be important. And you still are seeing and I think we'll probably get other questions on this as we dig in, I'll just -- I'll answer a question you didn't ask. But airports is still comping against -- in Q2, airport is still comping against a pretty soft numbers. And so airports is differentially influencing the mix as it gets to sort of normalize and frankly really perform really quite strongly at this point. So I think as you think about it over multiple years it will be a tailwind for margins, but it won't be the tailwind for margins you might imagine, I guess there was the pricing question in there as well. And I'd just say that we're kind of seeing the premium pricing in digital kind of get back to where it historically has been. I don't think that we've seen digital pricing get way out of line from where it was kind of pre-pandemic. I think that addressed the sort of things. Remind me if I missed any other part of your question. Steven, are you there?

That's right. That was great. Yeah. Thank you, Scott.

Thanks, Steve.

Thank you. Our next question comes from Cameron McVeigh from Morgan Stanley. Cameron, please go ahead.

Hi. Good morning. Curious if you guys are seeing any softness as you look ahead in the US market -- in the US ad market. And how are you thinking about net working capital for the year now that we are halfway through? Thanks.

So I'll comment on the market conditions and let Brian take the net working capital. Our market outlook right now it's pretty strong. We have not really seen softening. I think that I've been paying attention to everybody's earnings announcements and I think that everybody is trying to piece together what actually is happening in the ad market and it's been a bit of a mixed bag. And I think one of the things to watch out for, at least as pertains to out-of-home. I'm pretty sure this will apply to some of my competitors as well is that really in the second half of this year is when you're going to see us comping against really strong numbers.Q2 of 2021 was when we were just starting to see things come -- things come out of the pandemic challenges that the industry had and that we had. And that's not uniform across the world, there are parts of the world that are still not recover to 2019 level, certainly in the US, we've long since kind of eclipsed that in much of our business. But as you look at our numbers, you're going to see the percentage growth rates come down, but I would urge you not just immediately say, "oh that's because the ad market softening" because from a perspective of the dialog we're having with advertisers, we are not seeing that at this moment. We're not seeing a bunch of cancellations come in. We're not seeing the things that usually harken to when people are really in pullback mode. And I'm sure that's unique to out-of-home in some ways, but it's an important distinction, particularly given the volatility of the last couple of years. Brian, I want you to take the net working capital.

Sure. On working capital, we continue to believe as the underlying business normalizes on the tail end of COVID as we enter 2022. We'll see working capital start to normalize vis-a-vis working capital history. Now there's two components to that one is, one is seasonality, and our business is very seasonal, so quarter-to-quarter shifts can be dramatic and Q2 was a strong quarter. But there is also the element of the unwind from the post-COVID environment. And so when you look at things in Q2, like AR, you see a large buildup and in AR a function of seasonality, but also a function of underlying business performance recovery post-COVID increase in revenues and the consequential increase in AR both in the Americas and Europe. I would also throw the unwinding of deferred payments and that it's a much smaller percentage in terms of the impact on working capital, but it is something, as we clear through kind of the post-COVID environment, that really is getting flushed out of the system. So as we progress through 2022, I think working capital movements will start to normalize to pre-COVID patterns. And I think we're seeing that shift right now.

Great. Thank you.

Thank you. Our next question comes from Richard Choe from J.P. Morgan. Richard, please go ahead.

Great. Thank you. Just wanted to follow up on the -- one question on the US business, and then ask the European question. On the US business, can you talk a little bit about since you mentioned that we're coming out of this easier comp period to more difficult one. In your third quarter guidance like what seasonal trends are impacting that guidance versus like what secular trends that we should be looking at that maybe offsetting any seasonal weakness or comping issues on a year-to-year basis?

So, I'll take a run at this, and Brian, why don't you listen closely and see if I miss anything important and you can weigh in. Seasonality operates pretty differently across the global portfolio. Q3 is usually a pretty strong quarter. For us, I think -- in the US, it's the third strongest in Europe, I think it might be and it's probably also the third strongest in how things go. But when we do our guidance, we are actually looking a lot more at what we see right in front of us. So while seasonality might play a role in how we -- like how our forecasting models and things like that. The guide that we gave is based on a lot of data that we have in terms of how bookings are playing because a lot of these campaigns get booked in advance, especially in the US. So we have that. And I don't think that we actually consciously do a lot of secular factoring in, if that kind of gets baked into what we see right in front of us. So like, right now we've talked the last couple of quarters about how auto insurance has been soft. That's a known thing and that's in our bookings and we are very aware of it. So it's not like we're making a lot of -- I mean, when we give this guidance we're already well into the quarter, and have a fair bit of data in front of us. So it's not a big econometric model and I guess is how I kind of characterize it. I don't know, Brian, if there's other color you'd add.

No. The only thing I would add, and I agree with all of what you said is the business was starting to recover Q3 of last year. And so you're going to see tougher comps. One of the things that we did help analysts take a look at the component of that, that was unusual or one-time as we did break out in our reporting rent abatements and we broke it out by segment. And hopefully that will be helpful as you think about the one-time benefits last quarter that we will not see in future quarters at least. Certainly not see to the extent that we saw them. And you can kind of help understand the patterns moving forward. But we are going to comp against tough quarters and we want to manage expectations, but we still feel very optimistic about the second half of the year and are excited to get there.

Great. And then on Europe, the margin was very strong both in local and despite FX headwinds. How should we think about the margin in that business over the next few quarters?

Well, I'll hit it at a high level and then I'll let Justin Cochrane, who runs the European business way. And I think a positive sign in this quarter as we see margins in the European business come very close to 2019 levels. And so we're back to pre-COVID levels based on the strong rebound in recovery in Europe. I don't know Justin, if you wanted to provide a little more color or detail on how you see margin performance going forward.

Yeah, I think the things I'd say, Brian. Now, as Scott said, the European business is, it's seasonality is pretty similar to the US, but it's probably slightly more extreme. So Q4 is our biggest quarter, Q2 is the next biggest than Q3 and then Q1. Our cost base is very fixed, 75% fixed, 25% variable. So as revenue goes through that seasonal curve at the margin, the margin changes through the quarter. So Q4 is our strongest, Q2 the next and so on. But I think the point now where you can see -- I think you can expect to see margins similar to what they were in 2019, excluding the one-offs that Brian was mentioning. So we still need to compare it to 2021, we still have some one-off release from COVID coming through because some of the rent abatements came through quite late. So you'd have been seeing them in the third quarter in 2021. So there'll be some slightly funny year-on-year comparatives, but excluding that we're pretty much back to a normal margin profile.

Great. Thank you.

Thank you. Our next question comes from Lance Vitanza from Cowen. Lance, please go ahead.

Hi, guys. Thanks for taking the questions. Nice job of the quarter. Let me start in the Americas. Seeing good airport growth. Could you talk about how much impact you felt from the New York, New Jersey Port Authority deal? And any help in us thinking about call it like-for-like growth, I mean, how the rest of the portfolio kind of grew organically? Well, let me start there.

So -- thanks, Lance, and thanks for the question. The New York, New Jersey Port Authority has been in our portfolio for a year-and-a-half now, and so we are overlapping. Admittedly, we're going to be building out inventory over the first number of years of that contract. So there will be expansion in the footprint of it. But the actual contract has actually been baked in and we're overlapping New York, New Jersey Port Authority numbers. It's our biggest contract within airports. I mean it's a reasonable chunk of the airports business. But I don't think we've actually disclosed it from a percent of the overall, but it is our largest contract. I'll leave that one at that.

Sure. And I know you mentioned in the prepared remarks that passenger loads obviously were a factor. Could you go into a little bit more detail there? I'm wondering, because I guess in the past, and maybe this is no longer relevant. But in the past, we really, we kind of cared about overseas travel more than we cared about domestic travel, business travel may be versus vacation travel. My sense is that international overseas business travel is still down a lot from pre-COVID levels. And I'm wondering, number one, is that right? Number two, does it matter as much as we thought it would? And is there additional upside in airports to come to the extent that overseas business travel continues to recover?

Right. So you're -- there are two cuts that we talked about. I don't actually know that we have a good data source for the intersection of those two cuts. But you're talking about international travel and you're talking about business travel. And so I'm going to address those two things separately, because I don't think I have the cross tab on the two of them. In terms of international travel with the COVID requirement, COVID testing requirement going away and frankly with currency being where it's been international travel is back beyond 2019 level at this point. So it has -- if you just look at pure number of overseas departures, now, I can't tell you how much of that is business and how much of that is consumer. But presumably, there is a mix, and even within the consumer part of it, it's a very, very, very premium part of the market, it deals in some of our most premium airports. And so it's a -- that recovery is playing an important role in the recovery of our airports business overall. And I would tell you that probably, we'll see some tailwind from that. It's still is the minority of the revenue that we get. But that tailwind probably won't be fully cleared out until the end of Q1 next year. But again, it's the minority, the revenue is international. On business travel, we do have some sources for domestic business travel and our expectation there is that that will be in the 80% to 85% pre-pandemic level. This is what we're seeing in the sources that we got. It's kind of, I mean, I imagine that you travel a fair bit, Lance, I know I do, it has gotten a lot harder to get an upgrade. It has gotten a lot harder to get the planes are all very, very full. And my sense is, is that just from my street travel is that the business traveler is back in a pretty meaningful way, at least on the routes that I'm traveling on. And again, our data sources externally suggest that we're going to see that in the 80%, 85% pre-pandemic level. So the point of all this is that airports as a channel for advertising our back and I think one of the things that has happened with some of our advertisers who did pullback during the pandemic, is that they've seen degradation in their performance and their conviction in the importance of airports in their mix is greater than it might have been before. And so I'll just I'll leave that at that and see if that answers your question.

Yeah. It certainly does. Thank you. And then turning to Europe, digital revenue, obviously, grew 50% ex-FX, that's great performance. I'm wondering if you could talk a little bit about, I know you called out the number of digital displays that you added, I think, but I'm just wondering the sort of the percentage growth in digital displays, presumably, that's up a lot less than the 50% revenue growth. And I guess I'm just trying to get at, if we think about that revenue growth, how much of that was sort of improved yields versus just better penetration of digital displays?

Sure. I'll let Justin -- I'll let Justin address that. One comment I'd just make in general though is that, yeah, our growth in digital is going to exceed the growth in panels pretty much in every geography. But Justin, why don't you talk a little bit about some of the drivers of that growth? And the question he's asking about margin, how it flows through.

Sure. So if you look at what we disclosed last year, so Q2 '21, we had a 16,600 screens; Q2 '22, 18,800. So 13%, one-three percent increase in screens. Obviously, you're right, the digital revenue growth is far in excess with the digital screen growth. I think there's still some noise in the numbers, because when you think back at Q2 '21, we still had some COVID restrictions in place in certain markets, especially someone like France where we had things like shopping malls were still closed during Q2 '21. So there's still some noise in the numbers and somewhere like malls is where we're highly digital. So, you won't really see some really more useful comps until we get into Q3 and Q4 or what's going on with digital because of that noise of COVID. What I would say is, digital, as we deploy more in markets, as we get to scale across different markets, it becomes stronger and stronger proposition, and that generally helps you grow your yields across digital. And as we start to go down our programmatic journey in Europe, you also start to see some strong sales on digital. So it was a bit of noise in the numbers still. But obviously the percentage revenue increased far outweighing the growth in screens. Once that noise is removed, you'll see closer to the real growth. But I hope that helps and overall comments.

It does. Thank you. And then just to finish up for me back on the asset sale front, I'm just wondering, I know it's more complicated than this. But if you couldn't find a buyer at a price that you like for all of Europe, is it realistic to think that you'll be able to find buyers for the less profitable portions of Europe and what am I missing there?

Yeah. I think we've kind of said what -- like I'd I said to Steve Lance, we've kind of gone out on a limb being as descriptive as what we were on what we're doing and why. But let me just assure you we were very diligent and thorough and shook every tree and we learned a lot in the -- we have learned a lot and we are continuing to learn a lot in the strategic process that we've done and we feel good about what we messaged.

Well, and to that point, I mean, Europe would appear to have some real momentum, right. So I guess that begs the question why you're in such a big hurry to get rid of that in the first place. I mean, I understand that the business doesn't have the margin structure that you have in the US, given the asset mix. But that's always been the case and it just seems like with the increasing digital penetration and the growth rates it would appear that there -- I mean, is there something I'm missing on that front?

Well, I think we've talked about the importance of focus, and we've talked a lot about digital transformation and how running digital transformation in one country well is a large execution challenge. And when you get into trying to do it across a really broad set of platforms, you dilute expertise and resources pretty quickly. So I think the reasons that we had for embarking on the strategic process or sound, and they are the right reasons. The marketplace just was not in a place that we were able to get where as we said in our comments. So I think that -- I think we said a lot on this topic. I think our strategy remains to focus and I think that's pretty much what we can share with you, Lance.

Thank you very much, guys. Appreciate it.

Thank you. Our next question comes from Jason Kim from Goldman Sachs. Jason, please go ahead.

Great. Thank you very much. Can you talk about yield management and your ability to get higher pricing? It's been a strong environment for your business and outdoor advertising in general. But given the current macro picture, are you seeing any push-backs in terms of price increases?

So price is always something you negotiate on. If it was -- if it was easy, we'd have even more than what we -- than what we have. So I mean, I think you should assume that our counterparties are thinking aggressively about value on the dollar that they're receiving. And I think you touched on measurement. Measurement is one of the tools by which we demonstrate the value of what we're delivering to advertisers. I think we have had a very object less than I referred to this in airports, but it's true in roadside as well where people saw impacts on their results and on their brands by having pulled out of out-of-home and now they have conviction on it. And I would tell you that out-of-home remains kind of the best value play immediate. So of course, there's push back on pricing and if it was easy, our results would be even greater than what they are. But I think we have a very sound footing to stand-on as we're pricing for the value of our inventory. Hopefully that addresses and this is a huge array of conversations very different when you're talking about in rural sign versus something that sits on the Lincoln Tunnel for instance. So scarcity matters a great deal in this business.

Thank you. That's helpful. And then regarding the European asset sale, to the extent the size of the divesture is smaller, how are you thinking about addressing the CCIBV bond maturity in 2025 is a fairly small bond, but they are the first maturity for the company. And maybe just more broadly for Brian, your business fundamentals continue to be strong, the capital markets have become more volatile this year. We've got good liquidity position. But wanted to get a sense that your general outlook for your balance sheet strategy, just given the state of the market?

Well, we're somewhat in the fortunate position that we don't have any major maturities for a while and that was by design, when we refinanced a lot of it definitely did post separation. The first material maturity would be the CCIBV notes that we spoke up. And then kind of pre-current market conditions, I think we were pretty relaxed about those sit on top of the streaming cash flow and would be refinance and whatever mid-market rates would be. We still have time. And so I'm not sure it's fair to think about or extrapolate current market conditions to that future point in time. But I also think we have the strategic review going on and some of the outcomes of that review may impact our philosophy on the notes. I think in general, as the European perimeter and thus the cash flow stream, that's of course, those notes shrink, either at that time or at the time of refinancing the size of the note issuance would be to shrink proportionally. And that could be a function of sales proceeds being directed to or being required to be directed to pay-down or reinvested EBITDA producing assets within the perimeter. But look, by and large, I think we're keeping our eye on it. It's not huge. It does sit upon this free cash flow stream. It can be seen at finance in European markets. It can be financed in the US markets or both. I think we have a lot of options. It's not something we're worried about right now, unless we trigger something under the repayment provisions. But I think we feel pretty good about being able to refinance it if we want to or being able to address it by repayment or partial repayment if we need to.

Great. That's helpful. Thanks very much and see you at your Investor Day in September.

Okay. Thank you.

Thank you. Our next question comes from Jim Goss from Barrington Research. Jim, please go ahead.

Good morning, Couple of things, but one more about the separation. Does it require that assets we sold or is spin-off of some of the assets a possibility within the context of that strategic review? And thanks for the focus on the digital transformation, I think are very good points to raise for just confining the nature of the company.

Great. I think on the strategic review, I think we've taken a broad look and I think we've kind of said what we're able to say at this time on it, Jim. But there wasn't anything that was not on the table as we contemplated options.

Okay. And you've addressed this a bit also but in terms of the guidance for the third quarter, the domestic operations didn't seem out of long with what at least we were looking at but the international was softer. And I wondered if that -- did you mean to imply that it's more of a comps issue than a belt of weakening there relative to in the United States?

I think I heard the question. I'm going to answer it and then if I'm not answering it let me know. But I think the question is third quarter guidance for Europe may be a little softer than what you were anticipating. I'll have an answer. Let's make sure we're on track and then Justin can lay in if he likes in. I think we feel pretty good about the Q3. Now keep in mind the seasonality of the different businesses in Q3 is the third strongest quarter. So we're coming off a strong quarter for Europe and then we're heading into Q4, a very strong quarter for Europe. And so Q3 seasonality is part of the minutes. I also remind you and you mentioned it that the recovery for Europe began in earnest quite frankly in Q3 of last year. So I think we are heading up against strong comps. I would emphasize those comments over any perceived weakness that we're seeing in the European markets. But again for that one, I'll certainly want to turn it over to Justin who's much closer than I am. Justin, do you have kind of anything to add?

Yes, I mean, I think what I'd say is to echo kind of what Scott said about the Americas. Right now, we're running there, we're not seeing any weakness into Q3. We're seeing a strong Q3. As Brian said, it looks worse in Q2 because of the seasonality of the business but in the comparative to 2019 it would be a strong or stronger. So no, currently, we're not seeing any weakness in the Q3. And I think it's just because you're comparing it to Q2 which is a stronger quarter.

Jim, that address your question?

Yeah, it does. I was just looking back at the year ago quarter and it seemed like it had some improvement that perhaps it was in line with what you're just saying that's when the tick-up began to occur. And we're just unduly expecting more, I guess. The last one I'd say is in the airports business, do you think the future of that sector could be, I know it's a smaller business relatively speaking vis-a-vis the rest of your business. But is the rate of profitability potentially bigger in the future so that it could have a greater impact in the future? And are there any other airports that not aware of that are coming up for bid over in the next year? And finally, with the traffic issues we've had in there first, lately we have a time spent listening measure in audio. Is there a time spent in airports measure that would might improve the value of those displays at the moment just because of how people are spending more time trying to get through the airport?

Sure. So in terms of contract renewals we have a pretty steady set of contract renewals at any given time. Certainly, nothing material is in the cards. But that's not something that we do a lot of disclosing on for reasons I'm sure you can imagine relating to trying to get extensions if you're the incumbent or working on ways to acquire the airport if you're not. So really nothing in the portfolio other than just affirm that airport RFPs are happening again. We are rotating the portfolio over time and there'll be ins and outs and any of the larger ones will certainly announce as they come up whether they're wins or losses. With regard to monetization, so there's kind of two parts to your question. Part one is, can the media owners who target airports evolve contracting in ways that make them inherently more profitable. And I would say that there is a constant innovation in terms of contract terms and in terms of contract structure that has an eye on that. But I also think you're dealing with large municipal government organizations. There's going to be a limit. I don't foresee a time when airports profitability is going to be as good as what we have in the roadside business. Can we improve it over time somewhat yet? But are we going to be able to like double it or something like that? It's not going to be that kind of improvement. It's going to be more on the increment. On the revenue side, which is sort of the second part of your question which is around measurement. There is a lot of innovation going on within that space both in terms of the actual planning type metrics as well as attribution techniques and things that you can do around attribution. And that's part of our revenue growth strategy in the medium term. It is still in relative to what we're able to do roadside, airports is earlier in its development but it is moving down the same curve and I would expect that our measurement capabilities there will expand nicely. And that will provide some support both on pricing as well as just getting people into the category. So hopefully, that answers your question.

Very helpful. And thank you very much.

Thanks, Jim.

Thank you. Our next question comes from Aaron Watts with Deutsche Bank. Aaron, please go ahead.

Hi, everyone. Thanks for having me on. Covered a lot of ground today. So I just had two question quick to wrap up here. I guess first on political and I apologize if I missed this. In the US we've heard from your media peers that spending is quite robust. I'm just curious how you're stacking up versus maybe your last midterm election? And if digital has helped boost at all just given that being probably a more palatable outlet for some of the politicians?

Sure. Well, I know the competitor who's an enthusiast on political although I think he also always emphasize it's a small part of his book. He just loves to talk about it because those local elections in small towns are a great source of out-of-home activity. We skew the larger towns. And so we kind of need the BCCC, the RCCC, the RNC, the BNC. We need those guys to make the leap and it's not for lack of trying. And there has been some innovation around some of the big conferences both the Bs and the RS have used some digital out-of-home. And we're educating them constantly on the abilities of it. But I'm not going to call that we're going to have a big political year until we actually have a big political year and that hasn't happened. So I assure you we work on it but it is not something that we think it's going to be a big driver this year. You're right though that if and when we crack the code on it, it will be digital that is the vehicle I'm sure.

Okay. That's fair. And then secondly on M&A, we've heard your US peers talk about a fairly active pipeline for the year. What's the latest you're seeing? And does your current liquidity and the outlook you laid out for us allow you to participate?

Well, we have been an active participant. Scott may jump in and I think we get about $20 million but I'll let you talk about your view on M&A activity.

Yeah. There's certainly opportunities out there. And to your point we're not as active in it at aggregate level as our competitors and that is driven by constraints that we have. That's part of the answer to one of the earlier questions about why would we want to focus. One of the benefits of focus would be the ability to focus more energy on US M&A. But it's a good environment. There are definitely assets for sale. We definitely have a pipeline but we're also definitely very aware of our constraints. Brian, what are other things you would…

I think that's right. It's the balance of going out there and executing upon the acquisitions in the US that makes sense but also balancing that with our liquidity position.

Okay. Great. I appreciate the time as always.

Thanks, Aaron.

Thank you. Our final question comes from Courtney Bahlman from Barclays. Courtney you please go ahead.

Hi, Brian. Hi, Eileen, Scott. Thanks so much for the question and congratulations on the results. One really quick one for me. Moving forward, regardless of the potential sale of the European assets you mentioned. In terms of capital deployment you guys have done a really good job in digitizing the footprint obviously, shifting to a generally higher margin profile. How should we be thinking about the balance between board digitization and leverage reduction in the absence of a sale? I guess relatedly, how are you guys thinking about longer-term leverage and a potential sweet spot for the company that we should be thinking about in the longer term?

So let me take a run at this and then Brian can add in if I miss things or don't get the right tie to the leverage. I think we've been very consistent on particularly in the United States on roadside digital conversion. The primary gating factor there is legislative and just all of the things you have to do to get permission to be able to make those conversions. And that we're going to continue to proceed on that as fast as we can. And we're constantly working on things that let us find chunkier cities and situations where we're able to do lots of conversions. But that gets harder as the years go by because you kind of end up against the municipalities that have more structural resistance to digital conversion. So we really -- that is a core part of our growth strategy and that's something that we haven't had really any constraints on (ph) the economics of those conversions are such that you don't want to constrain that type of activity. I think there are a bunch of digital vectors that we've got beyond just the conversion and we were talking about some of this a minute an ago in terms of measurement helping to make the assets more valuable because you can demonstrate the impact of them creating purchasing environment. Those are sort of the things that come into play. I'm sorry, did you have something to ask?

No, nothing else. That makes perfect sense.

Yeah. I think the only thing I would add is the path to deleveraging which is key for us is a function and is likely a function of both increasing EBITDA and focus on those high returning investments whether they be digital conversion or tuck-in M&A that we're doing and reducing debt. And we just have to balance every time we have a decision to make whether it's a capital investment, M&A activity, the opportunity to reduce that, we have to look at all that. And I actually don't think that our goal to be leverage is going to change because of what's going on in Europe. I mean we certainly have to factor in what's happening. But at the end of the day, we recognize that leverage needs to be reduced and it's likely that we'll work on both sides of the fraction to be successful in getting there. Did you have anything else Courtney?

Thank you. That is now the end of the Q&A session. So I'll now hand you back over to Scott Wells for closing remarks.

Great. Thanks, Laura, and thanks everyone for listening in. I just would emphasize we feel really good about the business and where it is, we think we've got strong growth prospects, and we're really looking forward to seeing folks at our Investor Day on September 8th. So thank you all and have a great rest of the week.

This concludes today's call. Thank you for joining. You may now disconnect your lines.