Good day and welcome to the OUTFRONT Media Fourth Quarter and Full Year 2018 Earnings Conference Call. At this time, I would like to turn the conference over to Greg Lundberg, Investor Relations. Please go ahead.

Good afternoon everyone. Thank you for joining our 2018 fourth quarter and full year earnings call. On the call today are Jeremy Male, Chairman and Chief Executive Officer; and Matthew Siegel, Executive Vice President and Chief Financial Officer. After discussion of our financial results, we will open up the lines for a question-and-answer session. Our comments today will also 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. 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 2017 Form 10-K and our 2018 10-K which we expect to file tomorrow. We'll refer to certain non-GAAP financial measures on this call. Any references to OIBDA made today will be on an adjusted basis. And reconciliations of OIBDA and other non-GAAP financial measures are in the appendix of the slide presentation, the earnings release, and on our website. And with that, I will turn the call over to Jeremy.

Thanks Greg and good afternoon everyone. We're excited that you could join us today to review our fourth quarter performance and 2019 outlook. Looking at the key highlights on Slide 3, I think you'll agree that our financial results surpassed expectations in the fourth quarter. Total revenues grew a very strong 12.7% on a reported basis. This strength was broad with accelerating results in Billboard, Transit, Local, and National. Strong revenues drove adjusted OIBDA and AFFO up more than 18%. The quarter capped off a good year with reported revenues up 5.6%, OIBDA up 8%, and AFFO also up 8%, which surpassed both our original and upwardly revised expectations. On Slide 4, total revenues grew 12.7% on a reported basis and 12.6% on an organic basis. The main engine of this growth was U.S. Media. Looking more closely at U.S. Media on Slide 5, 11% growth in total was balanced in dollar terms between Billboard which was up 8.5% and a strong ramp in our Transit business with revenues surging nearly 17%. And it's worth noting that geographically we saw growth in every one of our key regions across both Billboard and Transit. Slide 6 which we introduced last quarter shows you the local and national advertiser split in our U.S. Media segment. Local was 55% of our business this quarter and national was 45%. They both grew double digits in the quarter, each up 11%. As you're aware, national started out more slowly in 2018, but we saw improvement coming in the second half and this was a very strong finish which we guided to on the last quarter's call.\ Slide 7 shows that our other revenue categories were also very strong this quarter, up $10 million or 32.5% on a reported basis. This was led by strong Billboard performance in Canada. We also saw growth in our Sports Marketing business and enjoyed a $3 million non-core revenue increase related to the sale and installation of digital screens in sports stadium. We're very pleased with our overall results this quarter. Every part of this business performed well with great sales execution in local and national across our unique and attractive mix of Transit and Billboard assets. Let me now hand the call over to Matt.

Thanks Jeremy and good afternoon. Moving down the income statement, please turn to Slide 8 for a look at our expenses. As a percentage of total revenues, total expense levels declined around one and a half points. We saw margin improvements in both billboard lease expense and transit franchise expense as both posting and maintenance expenses. Corporate expense levels were also down. While we did see higher SG&A levels, the majority of this increase was related to our sales growth efforts and to a lesser extent, our continued investment in strategic business development expenses which were $4.3 million for the quarter. Slide 9 shows the same expense categories on a dollar basis. A significant portion of our expense growth was directly related to higher revenues which grew more than our expenses driving the 18.7% of OIBDA growth you can see on Slide 10. This bridge puts into perspective the contribution of revenues to our OIBDA growth this quarter as the OIBDA margin lifted to 31.8% from 30.2% last year. Slide 11 is new and we think it will give you a more clear understanding of the relative contribution of our asset mix. What we show here is our U.S. Media segment OIBDA broken out into its two components; Billboard and Transit. Billboard is around 80% of our total OIBDA, had a 42% margin, and grew by 9.9%. Transit as you know has different economics with a 20% margin and extremely healthy fourth quarter growth of 24.3%. The other segment grew nicely on the strength of billboards in Canada. Turning to Slide 12, our fourth quarter capital expenditure levels increased relative to last year. For the full year, our growth capital expenditures were $63.7 million above our $55 million estimate as we increased our digital investment. Our maintenance capital expenditures were…

All right. Thank you, Matt. And moving on to slide 17 and the outlook that Matt just mentioned. At this point in time, we expect first quarter total revenue growth in the high single-digit range with transit growth increasing further from the fourth quarter rate and attractive growth in both local and national. The same factors that drove such a strong fourth quarter are also contributing to our first quarter outlook digital expansion and improving yields. On the first topic digital, please turn to slide 18. Total digital revenues were up 27.6% in Q4, an impressive growth achieved through a combination of increase yield, digital billboard conversions and new transit inventory. As Matt mentioned, we're working to increase our billboard conversion pace and to ramp up the digitization of our key transit properties. Digital now represents 18.4% of our total revenue, an increase of 2.2 percentage points over the fourth quarter of last year and it remains a key element of our growth strategy. The second driver of growth was billboard yield as seen on slide 19. Our total yield was up 9.6%, the strongest growth this year and it was particularly pleasing to see the static performance. Importantly, while digital growth was positively impacted by new units, the majority of growth was actually driven by yield improvement. I'd like to close today on the topic I mentioned at the beginning of this call, which is the asset mix of our portfolio. In 2018, 69% of our revenues came from billboards and 31% came from transit, the ratio that's been very stable since our IPO. We think that this is the best portfolio in the market today relative to our advertising is growing and is expected to grow in the future. There are two key reasons for this. The first…

Thank you. (Operator Instructions) We'll go first to Marci Ryvicker with Wolfe Research.

Thank you. I have a couple. I want to start with the fourth quarter. Can you just give a little bit more color on exactly what was driving local and national? Is it a specific category? Is it something you're doing it? Is it your market? Are you taking share? Is there any political in there?

Okay. Let's take some of that -- let's take that from the top. So, I guess, when you look at the categories, the strongest categories for the quarter were actually the same as the strongest categories of the year: tech, entertainment and financial services. Within tech there are some of the usual suspects that you would expect in there who are all highly supportive of the out-of-home media. When you look into it further, to be honest, everything was great. It wasn't the political story. Political was 0.3% of our revenues only. And everything in Q4 was great. Local business was very strong in both billboard and transit. National was strong. We did get a couple of benefits that helped the overall growth rate. So we have the $3 million that I mentioned in terms of the sellers in digital screens. We had around about $1 million bump in Canada from the legalization of marijuana. But for the -- we will have the first time contribution from BART coming into our numbers in transit. But if you take all of that together, it's sort of just over two points of growth. So actually we were well into the double-digits if you think absolute apples-to-apples, which we were really pleased with.

Okay. And then, I guess, it's a similar question for the first quarter guidance of high single-digits. What's driving that? It's very different than what we saw from Lamar? And then I hate to give this to you, but can you give us a sense for the year in terms of revenue growth? Is it something we should be plugging in every quarter? Or is it going to sort of decelerate a little bit as we go through the year?

Okay. Marci, just on -- to the first point in terms of industry comps. As you know, we've always said that you can't draw a line between the companies that publicly report in our sector, we have different asset mix and we have different geographical mixes. So, we're going to see variations over time. So, yeah, high single digits is the second highest guidance that we've given. Things are going well. Billboard will be up nicely. Transit is obviously powering ahead. National will be up. Local will be up. So, yeah, we feel very positive about the first part of the year. It's fair to say that look when we get to Q4, we're going to have some much tougher comps. So, I think we'll prefer to comment on the annual sort of revenue guidance as we get closer to the time. But one thing that we do know is that within our base, we are continuing to build-out our digital inventory. We're continuing to build-out the MTA. And all of those will be starting to impact nicely I hope by the time we get to the year-end.

Got it. Thank you so much.

And we'll go next to Jason Bazinet with Citi.

Hi. I just had a question on slide 19, regarding yield. I guess, the market is maybe a little bit nervous about the macro and yet you guys put in pretty significant, I think this is just a way of saying price increases on the billboards. What is the collateral if there is sort of call-it negative implications of taking big rate increases? When does that manifest itself? In other words is it something that sort of if there is an adverse implication from taking big price increases it shows up a quarter or two down the road?

I think the way to answer that is yield is obviously a combination of occupancy and rate. So, if you drill into those yields, we saw some occupancy increase, but for the most part it was about rate. I'm not sure that there is a linear -- anything linear about sort of recession and price versus recession occupancy. In fact, sort of during -- if you go back to the sort of the growth recession, I wasn't in the U.S. then, but sort of looking at out-of-home generally, there seemed to be a tendency to actually accept a little bit reduction in occupancy and actually work really hard to see if you could maintain rate because obviously over time it's sort of more difficult to generate rate. So, a little bit hard to comment when we're talking on something that at this moment in time is hypothetical. But as I say right now, there are no signs in our business that give us any cause to concern.

Would you say that on the utilization part of yield that you're sort of near record highs? Or is there still, if you look back at history, a lot of legal room to sort of raise the utilization rates?

Look, it's sort of what I'd call pretty much normalized, normalized rate. We do vary a lot by markets. So, we have some markets where they laid up in the early 90. When you are at that sort of rate, you're almost fully sold because you know after that you've just got -- you're trying to manage gaps between the campaign. And then we have got markets actually we're more in the like 65% to 70% range where we've got some great upside. So, mixed bag, say dependence on the geography, but still opportunities to grow through occupancy.

Helpful. Thank you.

We'll go next to Aaron Watts with Deutsche Bank.

Thanks for having me on. Jeremy, wanted to ask as you look into your crystal ball for this year on the M&A pipeline, curious what you are seeing both on the billboard side? And then maybe with transit, if you can comment at all about any legacy contracts of yours that might be coming up for renewal that are material? And on the other side of that coin, any opportunities you might see to go after out there?

Yeah, absolutely. So, in terms of the M&A pipeline that continues to be a number -- they're like smaller tuck-in opportunities that we are interested in. We mentioned obviously the investment that we're putting into Atlanta in Q2. We pursue really on a selected basis in markets that we really think can add value to our portfolio which is very much sort of in the top 20 portfolio, and at any one time we'd be working on maybe three or four acquisitions. If we look at the total value of that that sort of probably several hundred millions, not all of them will necessarily come through. On transit, it's instant because the way in some ways we think about transit with the investments that we're making, somewhat it's like a rolling acquisition, because as we invest and we're building out digital footprint in transit, all of that will bring in incremental OIBDA. So, we sort of view that a little bit like an acquisition. In terms of transit authorities, there's nothing of any significance coming up with our portfolio this year. We think that may be a bid out in Atlanta which is a property that we have, but it -- that's relatively a small piece of our footprint. And on the sort of, if you like, on the defense side, on the offense side, it's very likely that some are -- people come out for Chicago some time over the summer period and that's something we'll be looking at with interest.

Okay. That's helpful. And maybe this is somewhat related, but you commented about why you're happy with your asset mix today. And maybe if I could ask about how you think about your capital allocation options for the future though? I'm curious how you balance organic and inorganic opportunities in billboard versus those in transit? And I ask considering the higher margins on the billboard side of the house and given the amount of upward capital requirements and ramp or payback period on the transit side.

Yeah. I guess, the first point is that in terms of if you are investing organically in our billboard business in terms of billboard conversions to digital et cetera, et cetera. There's nothing that we're not investing in that we don’t think so -- that's a great thing to invest in. And we're still making really good returns. 20% plus on the digital investments that we're making in our billboard business and we'll continue to make. In transit, outside of Boston where we took on, if you like, the capital investment obligation, the investments that we're making in the MTA and indeed in BART in San Francisco, they're actually -- those investments are recouped from us out of the share of revenues that would have gone to the transit operators. So, it's a slightly different way of thinking about capital. So, as I say we're very comfortable with both parts of our business and when you actually look at total capital in the transit business the return on capital there is fantastic.

All right. Great. Appreciate the comments.

We'll go next to Drew Borst with Goldman Sachs.

Hi, thanks for taking the questions. I was wondering, is there much of a benefit from the new MTA contract in the fourth quarter organic growth?

Relatively small.

Okay.

Actually, interestingly, right now, the transit business, in general, is just performing very well. Digital, for example, in Boston or static which is what principally is still a static state in New York and that performed extremely well in Q4.

When do you think is reasonable for us to start seeing, I appreciate you're scaling up the deployments you mentioned in your script you know, some of the deployments in 2018 were more communication rather than advertising, but that mix will shift to your benefit this year. I mean, what's the reason for that expectation in terms of starting to see the benefits of these digital appointments in MTA? Is it sort of 3Q or 4Q, or is it more kind of a 2020 benefit?

Yeah. As I said on the call think about guidance for the year as a whole. I know to see that we're starting to get some of the benefit coming through Q3 Q4. But, I mean say, it will be next year when we'll start to see that big greater benefit, yes.

Okay. And then just lastly, I think I heard you correctly that you're guiding to AFFO of mid-single digits for 2019, is that correct?

Right, Drew. It's Matt. We are at mid single-digits. We have -- it's still increasing our interest expense in 2019. That's a bit of a headwind on otherwise solid growth.

So could you have been delevering obviously the incremental interest, I guess, is associated with funding the MTA is that where the interest is coming from?

Yeah. Well, our deleveraging is really we're growing into our debt. We're not paying down debt. We're increasing our OIBDA. We have about $700 million of floating rate debt, which in a slightly higher interest rate environment is a negative. And as we continue to fund from the MTA upfront, we have a big funding year in 2019 combined with some funding in 2018. We do expect interest expense to go up.

Okay. Great. Thanks for the answers.

Yes.

We'll go next to David Miller with Imperial Capital.

Hey, guys. Sorry about, sorry about that audio issues. Can you hear me?

Yes, absolutely.

You guys can hear me. All right, sorry about that.

Yes.

A couple of questions. So on the New York City MTA platform, how many subway stations do you think you'll retrofit in the current quarter? And how many commuter rail stations do you think you'll retrofit in the current quarter? And then maybe it's too early to answer this, but thus far with the way the platform has been built out, which looks fantastic. What is the competitive environment like? How would you describe the overall competitive environment in light of what the Co is doing with bus shelters and what the Intersection is doing with the Wi-Fi kiosks all around Manhattan? And then I have a follow-up. Thanks.

Okay. So I don't think we're going to be giving a quarterly sort of breakdown of stations completed. But it's going to be a strong ramp this year. We're going to be doing around about another 100 stations between subway and Metro North Long Island Rail Road, et cetera this year in that sort of area. The interest that we're getting in the signs is terrific. And look, nobody operates in a competitive vacuum. We're always aware of that and competitive market, but what we have is we have a somewhat discreet audience, which you can only get, if you're advertising on that platform. And we also have the ability to do -- perform motion video. That's not something that can be easily done on the street. So when you think about -- if you think about the sort of ads that are coming through to your Snapchat feed or Facebook or whatever, a lot of those are actually full-motion video without sound, and portrait some that could very easily go on to one of our screens. So I'd say, look, there's always competition, but we think we have a product that actually has a greater structure to integrate audience.

Okay. And then a related question. I'm sure you're aware of the difficulties that the outdoor industry is having with the auto category. And obviously, things are changing with regard to how dealerships to advertise and the big three how they advertise and so on and so forth. But with the full -- with the platform that you have in New York and the way it's going to look say four years, five years, six years from now and your ability to project full-motion video. Is there an opportunity to work a little bit more effectively with the auto guys with the auto advertisers and take share and really kind of create a renaissance in that particular category?

Yes. It's a great question. I was watching TV the other day and I was watching News 12 Connecticut, and in one ad break, I saw four different auto ads. And I thought what the heck is this? Disgusts to how -- why are people trying to achieve in any sort of breakthrough using that medium. It's just struck me as nuts. But we have had -- that the industry in general, we have seen auto go back with for a while. It's for us now in terms of total revenues, its sub-5% and it was down in the quarter and in fact it was one of our cash -- it was the second to bottom in terms of performance for the trailing 12 months. We're taking to them all the time. But we're pitching very hard. And I'm hopeful that some of the excitement that we're now injecting into our advertising platform with -- particularly with this digital build-out, I'm hopeful that we'll have some better news as we go forward. Q – David Miller: Okay, wonderful. Thank you very much.

[Operator Instructions] We'll go next to Jim Goss with Barrington Research. Q – Jim Goss: Thanks. I was wondering first about the mix component in the exceptional first quarter revenue gains in terms of static or digital or any other sort of comparisons that might have influenced those double-digit gains? A – Jeremy Male: We're talking Q4 Jim. Well I think you're talking about the Q1 guidance. Q – Jim Goss: All right. I know I'm actually at Q4 those were impressive numbers I am just wondering. And I think Marci touched on a little bit at the very beginning that anything where you might add? A – Jeremy Male: Yes. I mean Q4 in total; our digital revenues were up almost 28% which is obviously terrific. We're building out digital signs we're building out our transit platform. So some of that's about new signs and some of that's about -- is purely about yield increase on our current assets. So if we look at in more detail at Q4, our digital yields were up just over 4% and our static yields were up over 7%, so that's all about -- so that was obviously a significant driver of the -- of that U.S. growth which was around 11%. Q – Jim Goss: Okay. And given the trend toward urbanization that you're playing out and maybe your Chicago comment related to this little bit. I was wondering if you can and would want to incorporate more street furniture into your mix? Or is everything along those lines on a good basis that would at least block or slow you on a temporary basis? And what is your desire to do more in that area? A – Jeremy Male: So just for the avoidance of doubt we do have some street…

We have no further questions at this time. So I hand the call back over to our speakers for any additional or closing remarks.

Thanks very much operator. And thank you to all of you who attended our call today. We look forward to seeing many of you at investor events in the coming weeks. Thank you once again.

That does conclude today's conference. We thank you for your participation.