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 rates, 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 oversaturated 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 during the second quarter, adding to our total of more than 1,600 digital billboards. Combined with our smaller format digital displays in airports and on shelters, we had a total of more than 3,200 digital displays domestically. And in Europe, we added 281 digital displays in the second quarter for a total of over 18,800 digital displays now live. We continue innovating and modernizing our asset base and operating infrastructure. We're making our solutions faster to launch, easier to buy and more data driven, which is expanding the pool of advertisers we can pursue. Turning to the second half of the year, our business is continuing to perform well as advertisers tap into our resources to build mindshare and position their brands for success. In the US, our bookings remain healthy and are on track to handily exceed 2019 annual levels. Digital continues to drive the improvement, as well as airports, which is benefiting from a strong rebound in travel, including in the New York airports. Entertainment, retail, high fashion, and business services at amusement spending are all strong. While the insurance and beverage categories remain a bit of a headwind. Additionally, we're seeing particular strength in our Northern California, Southwest, and Midwest regions. In Europe, overall bookings for the third quarter are pacing ahead of last year and 2019. We're benefiting from continued growth in digital as well as the recovery of transit. With regard to Q4, I should note that we expect to see some benefit from the World Cup as advertising demand related to the tournament is expected to increase in addition to seasonal holiday spending. Brian will provide an overview of our third quarter guidance in his prepared remarks. Looking at the broader economy, we're keeping a close watch on business trends. As we have demonstrated during the COVID-19 pandemic, we have leveraged to moderate our costs should the need arise, and we remain committed to ensuring that we have ample liquidity on our balance sheet. The resilience of our platform has been borne out during challenging periods in the past, and we feel good about where we are today, particularly with regard to our digital capabilities and the flexibility and efficiency they give us in serving our customers and adjusting to changing market conditions. Finally, as originally announced in December 2021, we continue to conduct a strategic review of our European business. Our goal has been and remains optimizing our portfolio in the best interest of our shareholders, both through a potential transaction or transactions, and through a revolving greater focus on our core Americas business. As you all know, since the time we began the strategic review, there has been a negative shift in the environment for consummating transactions for obtaining related financing, which has raised hurdles to transact for the whole of our European business. So, it is worth noting that in the second quarter, our European business rebounded to pre-COVID-19 revenue and margin levels. The interactions we've had with potential buyers to date have convinced us that a single transaction, while potentially possible in theory, may not be the ideal path to take to accomplish our goal. In light of these developments, we're focusing on strategic dialogues with potential acquirers regarding the disposition of certain of our lower margin or lower priority European assets. If we are able to complete those types of sales, we expect our remaining European perimeter to have substantially higher EBITDA minus CapEx margins than our current European business does and to be more able to meet some cash needs. Also, if we're able to complete those types of sales, we believe that our remaining European perimeter could be helpful in bringing our leverage down over time through the generation of net free cash flow and net sales proceeds for potential dispositions if and when the deal making environment improves. We cannot guarantee the timing or success of our efforts to dispose of those lower margin or lower priority assets. And we will communicate further details as and when we are able. With that, let me turn it over to Brian to discuss our financial results as well as our guidance.

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 measures. 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 was slightly higher at $169 million. Please turn to Slide 6, and we'll review the Americas second quarter results. Americas revenue was $346 million, up 27.4% and, even more significantly, 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, were up 30%, with local sales accounting for 61.4% of Americas revenue and up 25.9%. Direct operating and SG&A expenses were up 36.4%. The increase is due in part to a 49.4% increase in site lease expense to $114 million, driven by higher revenue primarily in our airport business and a $17 million decline in negotiated rent abatements. In addition, compensation costs were higher due to improved operating performance and increased headcount, as well as higher credit loss expense related to higher current year revenue and prior year reductions in the allowance for credit losses. Segment adjusted EBITDA was $149 million, up 16.9% with segment adjusted EBITDA margin of 43%. Turning to Slide 7. This slide breaks out our Americas revenue into billboard and other and transit. The billboard and other, which primarily includes revenue from bulletins, posters, street furniture displays, spectaculars, and wallscapes, was up 14.9% to $281 million. This performance was driven by higher revenue yields and digital billboard deployments, with all our regions driving growth, with particular strength in our California and Southwest regions. Transit was up 140.6%, with airport display revenue up 148.6% to $61 million. Airport revenue was helped by the rebound in airline passenger traffic. Now on to Slide 8, for a bit more detail on billboard and other. Billboard and other digital revenue continued to rebound strongly in the second quarter and was up 28.3% to $96 million and now accounts for 34.1% of total billboard and other revenue, an increase over Q1. Non-digital billboard and other revenues were up 9%. Next, please turn to Slide 9 for a review of our performance in Europe in the second quarter. My commentary is on results that have been adjusted to exclude movements in foreign exchange rates. Europe revenue increased 27.8%, driven by improvements across all products, most notably street furniture and transit and almost all countries led by France, Sweden, and the UK. Europe revenue for the second quarter was also up compared to the 2019 comparable period excluding movements in foreign exchange rates. Digital accounted for 38% of Europe's total revenue and was up 50.6%, driven by an increase in digital revenue across all markets. This growth in digital was primarily driven by the UK, France, and Sweden. Direct operating and SG&A expenses were up 2.1%, the increase was driven in part by increased site lease expense, which was up 13.2% resulting from higher revenue and a $3 million reduction in negotiated rent abatements as well as the lower governmental rent subsidies. In addition, compensation costs were higher, driven by improvements in operating performance. These were partially offset by lower costs for our restructuring plan to reduce headcount in Europe. Segment adjusted EBITDA was $50 million, a substantial improvement over the $2 million in Q2 of 2021. Segment adjusted EBITDA margins rebounded and are in line with pre-COVID-19 levels in Q2 2019. Moving on to CCIBV. Our Europe segment consists of the businesses operated by CCIBV and its consolidated subsidiaries. Accordingly, the revenue for our Europe segment is the same as the revenue for CCIBV. Europe and CCIBV revenue increased $33 million during the second quarter of 2022 compared to the same period of 2021 to $280 million. After adjusting for a $35 million impact from movements in foreign exchange rates, Europe and CCIBV revenue increased $69 million. CCIBV operating income was $16 million in the second quarter of 2022 compared to an operating loss of $40 million in the same period in 2021. Let's move to Slide 10 and a quick review of other, which consists of our Latin American operations. Similar to Europe, my commentary is on the results that have been adjusted to exclude movements in foreign exchange rates. Other revenue was up 38.1% driven by improvements in all countries. Direct operating and SG&A expenses were up 16.6%, driven by higher site lease expense related to higher revenue. In addition, compensation costs were higher, driven by increased headcount. Segment adjusted EBITDA was $2 million, an improvement over the prior year segment adjusted EBITDA of negative $1 million. Now moving to Slide 11 and our review of capital expenditures. CapEx totaled $45 million, an increase of $13 million compared to the second quarter of the prior year as we ramped up our spending, particularly on digital and the Americas. In addition to our capital expenditures, I also want to highlight that during the second quarter we made several asset acquisitions totaling $22 million in our Americas segment. Now on to Slide 12. Year-to-date cash and cash equivalents declined $96 million to $315 million as of June 30, 2022. During the second quarter, cash and cash equivalents declined $117 million. Adjusted EBITDA of $164 million contributed positively to our cash balance for the quarter and was more than offset by cash interest payments, net capital investment, and net working capital requirements. Our debt was $5.6 billion as of June 30th, a slight decline from year end, primarily due to the scheduled quarterly principal payments on our term loan facility. Cash paid for interest on the debt was $110 million during the second quarter, an increase of $43 million compared to the same period in the prior year, primarily due to the timing of interest payments related to the refinancings we completed in 2021. Our weighted average cost of debt is 6%, a slight increase from year-end due to increases in LIBOR rates. Our liquidity is $528 million as of June 30th, down compared to liquidity at year end, primarily due to the reduction in cash. As of June 30, 2022, our first lien leverage ratio was 4.98 times, well below the covenant threshold of 7.6 times. Moving on to Slide 13 and our outlook for the business for Q3. At this point in time, we believe our consolidated revenue will be between $625 million and $645 million in Q3 2022, excluding movements in foreign exchange rates. Americas revenue is expected to be between $340 million and $350 million. And Europe's revenue is expected to be between $270 million and $280 million, excluding movements in foreign exchange rates. Based on month-end July exchange rates, foreign currency could result in a low mid-teen percent headwind to year-over-year revenue growth in Europe's third quarter. We expect consolidated capital expenditures to be in the $185 million to $205 million range in 2022. The slight decrease compared to the guidance we provided during our first quarter earnings call. This is due in part to movements in foreign exchange rates as well as changes in project planning. We expect to spend approximately 60% related to the Americas and 40% related to Europe and others. We anticipate roughly 70% of these expenditures being capital expenditures to grow the business, including expenditures made to deploy new structures of displays primarily digital or to renew existing contracts. Additionally, we anticipate having approximately $341 million of cash interest payment obligations in 2022, including $180 million in the second half of this year and $372 million of cash interest payment obligations in 2023, assuming current interest rates remain and that we do not refinance or incur additional debt. And now, let me turn the call back to Scott for his closing remarks.

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?

Thank you for the question. In Europe, we have significant operations in France and the UK. Additionally, we have notable businesses in the Nordics, Italy, and Spain, as well as a good presence in Benelux and Switzerland, and some activity in Eastern Europe. The major markets are primarily the first six I mentioned. Regarding your inquiry, we’ve shared what we can about our strategic direction. We acknowledge there has been considerable discussion around this, and we wanted to provide some insights on how our strategy is developing. However, the complexities involved make it challenging to address specific questions in detail.

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, structurally a little more pressured, maybe with a little bit better kind of growth algorithm? So we're just love to think about that transition.

It's a great question. We're witnessing significant digital growth across our portfolio, though not all segments have the same margins. For example, a digital roadside sign has a different margin structure compared to a digital airport sign due to the nature of their contracts. The way this mix evolves over time is crucial. Additionally, airports are still comparing against a relatively low number from Q2, which is impacting the mix as it begins to stabilize and perform strongly. Over the years, this should benefit margins, but perhaps not in the way one might expect. Regarding pricing, we see digital premium pricing returning to historical levels, and it hasn't strayed far from pre-pandemic prices. If I overlooked any part of your question, please remind me. Is Steven still on the line?

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

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

Hi. Good morning. Are you noticing any decline as you look forward in the US advertising market? Also, what are your thoughts on net working capital for the year now that we are halfway through? Thank you.

I will discuss the current market conditions and allow Brian to address net working capital. Our market outlook is quite strong, and we have not noticed any significant softening. I've been following various earnings announcements, and it seems that many are trying to understand the dynamics of the ad market, which has shown mixed results. One thing to consider, particularly for out-of-home advertising, is that in the second half of this year, we will be comparing against very strong numbers. The second quarter of 2021 marked a time when we began to recover from the pandemic challenges our industry faced. However, recovery is not consistent globally, with some regions still not back to 2019 levels. In the US, we have surpassed those levels in many areas of our business. While you may observe a decrease in percentage growth rates in our numbers, I encourage you not to jump to the conclusion that this indicates a softening ad market. In our discussions with advertisers, we are not witnessing an influx of cancellations or other signs typically associated with a significant pullback. This situation may be somewhat unique to out-of-home advertising, but it's a crucial distinction, especially considering the volatility we have experienced over the past couple of years. Now, I'll hand it over to Brian for the net working capital update.

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 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 in 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.

Thank you. I wanted to follow up on the question about the US business before moving to the European question. Can you discuss how we are transitioning from an easier comparison period to a more challenging one? Specifically, in your third quarter guidance, what seasonal trends are influencing that guidance, and what longer-term trends should we be considering that might help offset any seasonal weakness or year-over-year comparison issues?

I'll give this a try, and Brian, please pay attention to see if I overlook anything significant. Seasonality varies quite a bit across our global portfolio. Typically, Q3 is a strong quarter for us; in the US, it's usually the third best, and I think it’s also the third best in Europe. However, when we prepare our guidance, we focus primarily on the current data available to us. While seasonality might influence our forecasting models, the guidance we provided is based on a wealth of information regarding our bookings, as many of these campaigns are planned in advance, particularly in the US. We're aware of how auto insurance has been soft over the past few quarters, and that is reflected in our bookings. When we issue this guidance, we already have substantial data at hand, so we aren't relying heavily on complex econometric models. Brian, would you like to add anything else?

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, weigh in. I think a positive sign in this quarter is 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.

I believe the key points to note are that our European business has a seasonal pattern similar to the US, though it may be slightly more pronounced. The fourth quarter is our strongest, followed by the second, third, and first quarters. Our cost structure is largely fixed, with 75% being fixed costs and 25% variable costs. As revenue fluctuates throughout the seasons, the margins also shift accordingly, with the fourth quarter presenting the highest margins. You can expect margins to align closely with those of 2019, aside from the one-off items that were mentioned. We still need to take into account some one-off effects from COVID that will appear in the third quarter of 2021, particularly related to late rent abatements. Consequently, there may be unusual year-on-year comparisons, but overall, we are getting 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.

Thank you, Lance, for your question. The New York, New Jersey Port Authority has been part of our portfolio for a year and a half, so we are in a phase of overlap. We will be expanding our inventory in the early years of this contract, which means the footprint will grow. However, the contract itself has been established, and we are currently working with the New York, New Jersey Port Authority figures. This is our largest contract in the airport sector, representing a significant portion of our airports business. Although we haven't disclosed its percentage of the overall, it is indeed our most substantial contract. I'll stop there.

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 maybe 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?

There are two main aspects to consider. One is international travel and the other is business travel, so I will address them separately. Regarding international travel, with the removal of COVID testing requirements and currency fluctuations, we have observed that international travel has surpassed 2019 levels. While I can't provide a breakdown of how much of this is business versus consumer travel, we can assume there is a mix. Within the consumer segment, it mainly involves premium travel, which is significant for our premium airports. This recovery is positively impacting our overall airports business, and although it currently constitutes a smaller portion of our revenue, we expect to see some benefits from this trend. However, fully realizing that potential may take until the end of Q1 next year. For business travel, our data indicates that domestic business travel is expected to return to about 80% to 85% of pre-pandemic levels. Many travelers, including myself, have noted that getting upgrades and finding available seats has become increasingly difficult, suggesting that business travel is rebounding considerably. Overall, our external data supports the notion that business travel should indeed track around that 80-85% range of pre-pandemic activity. Therefore, it appears that airports are regaining their status as valuable advertising channels. Some advertisers who reduced their presence during the pandemic have experienced declines in performance, prompting them to recognize the vital role of airports in their advertising strategies more than before.

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 address that. One comment I'd just make in general though is that 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 about margin and how it flows through.

Sure. So if you look at what we disclosed last year, so Q2 '21, we had 16,600 screens; Q2 '22, 18,800. So a 13% 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 a 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 increase far outweighs the growth in screens. Once that noise is removed, you'll see closer to the real growth. But I hope that helps.

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?

I believe we've provided quite a bit of detail about what we're doing and our reasons for it. I want to assure you that we've been very careful and thorough in our approach, exploring every possible avenue and learning a great deal during this strategic process. We feel confident about the information we've shared.

Europe seems to have significant momentum, so it raises the question of why there's such urgency to exit that market in the first place. I understand that the business has a different margin structure compared to the US due to asset mix, but that has always been the case. Given the increasing digital penetration and growth rates, it seems there might be something I am overlooking regarding this situation.

I believe we have emphasized the significance of focus, particularly in terms of digital transformation. Successfully managing digital transformation in one country presents a significant execution challenge. When attempting to implement it across a wide range of platforms, we quickly dilute both expertise and resources. Therefore, the reasons we initiated the strategic process are valid and justifiable. The market conditions simply did not enable us to achieve our goals, as we mentioned previously. Overall, our strategy continues to be one of focus, and that's the main point we can communicate.

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?

Price is always a point of negotiation. If it were easy, we would have even greater results than we already do. It's important to recognize that our counterparties are actively considering the value they're getting. Measurement is a crucial tool we use to highlight the value we provide to advertisers. We've observed significant impacts on results and brand perception from advertisers who decided to move away from out-of-home advertising, and they now have confidence in its effectiveness. Out-of-home continues to offer strong value. Naturally, there is some resistance to pricing, and if there weren't, our outcomes would likely be even better. However, we have a solid foundation for pricing based on the value of our inventory. This addresses a wide range of conversations, which can vary greatly between a rural sign and a prominent location like the Lincoln Tunnel. Scarcity plays a critical role 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 a 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 refinanced 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 in 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 final 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 a 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. You've touched on this, but regarding the guidance for the third quarter, the domestic operations appeared to be in line with our expectations, while the international performance was weaker. I was curious if you were suggesting that this is more of a comparison issue rather than indicating a general decline compared to 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, did 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 are not aware of that are coming up for bid over in the next year? And finally, with the traffic issues we've had in the 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? Yes. But are we going to be able to 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. 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.