Thank you for being with us. Welcome to Clear Channel Outdoor Holdings, Inc. 2022 Third Quarter Earnings Conference Call. I will now pass the call to your host, Eileen McLaughlin, Vice President of Investor Relations. Please proceed.

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 third quarter operating performance of Clear Channel Outdoor Holdings, Inc. and Clear Channel International BV. We recommend you download the earnings conference call investor presentation located in the financial section in our investor website 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 Cochrane, 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, November 8th, 2022, and may no longer be accurate at the time of a replay. Please turn to slide four 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. Our strong third quarter results were at the high end of consolidated revenue guidance we provided on our last call and reflect the resiliency of our platform, the dedication of our company-wide teams, and the continued execution of our strategic plan as we detailed during our Investor Day in September. We delivered consolidated revenue of $603 million in the third quarter, up 8%, excluding movements in foreign exchange rates. Continuing the trends we saw in the first half of the year, our performance was supported by broad-based demand from advertisers with notable strength across our digital footprint in the Americas and Europe. We're progressing and giving our advertisers the kind of experience they expect from digital media, which we believe contributes to our growth now and in the future. We're making our solutions faster to launch, easier to buy, and more data-driven. In turn, we believe we're performing very well during a difficult period for many ad delivery platforms. As we noted during our Investor Day, we believe digital is not just a growth driver; it's a revenue multiplier. At the close of the third quarter, digital represented less than 5% of total inventory, yet digital revenue accounted for 40% of our consolidated revenue and rose 20% during the period, compared to the third quarter of last year, excluding movements in foreign exchange rates. Looking at our digital footprint in the U.S., we deployed 34 large-format digital billboards during the third 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 have more than 4,700 digital displays domestically. And in Europe, we added 366 digital displays in the third quarter for a total of 19,200 digital displays now live. As we expand our digital footprint, we're continuing to strengthen our data analytics offerings and build out a more sophisticated operational back end to the customer experience. These investments are allowing us to attract a greater pool of advertisers, which bodes well for our longer-term outlook. As an example of the dynamism of our platform, I'd like to call out our airports team for the work they did developing a multi-year, multimillion dollar partnership and sponsorship with PenFed’s Credit Union. This first-of-its-kind brand takeover of the Concourse C Connector at Washington Dulles includes the 4,000 square foot digital media tunnel. It's really something to see, and we are working with PenFed on further opportunities. Looking at the fourth quarter, our business remains healthy, and we are on track to deliver results in line with the full-year guidance we presented during our Investor Day in September. Brian will provide an update on our guidance in his prepared remarks, but I want to take a moment to focus on what we are seeing. As indicated in that full-year guidance, we do expect growth to moderate in the fourth quarter, as compared to the last few quarters, driven by tougher comps against the strong fourth quarter last year. Since September, we are not seeing a material change in advertiser behavior. In the U.S., advertising demand remains healthy, and we remain on track to exceed our record revenue in Q4 2021. Airports and digital continue to drive that improvement. In Europe, our business also remains healthy and is on track to outperform Q4 2019 and is in line with a very strong Q4 2021, excluding movements in FX rates, as we continue to benefit from the growth in our digital platform and the recovery in transit. Bookings and pacing continue to be strong in Northern Europe, particularly in the U.K. and Scandinavia versus pre-COVID levels in 2019. However, there are still a few markets, primarily in parts of Southern Europe, that haven't fully rebounded. Looking further out, we're keeping a close eye on business trends across our markets. And so far, our 2023 upfront in the U.S. is going well, and we remain optimistic about our business. Finally, we continue to conduct a review of strategic alternatives for our European business with the goal of optimizing our portfolio in the best interest of our shareholders with the resulting greater focus on our core Americas business. We will communicate further details as and when we are able. And with that, let me now turn it over to Brian to discuss our third quarter financial results as well as our fourth quarter guidance.

Thank you, Scott. Good morning, everyone, and thank you for joining our call. As Scott mentioned, we had another great quarter, and we believe our business is on track to achieve the full-year guidance we provided during our Investor Day, as you will see on slide 14. Moving on to the third quarter results on slide five. Before discussing these results, I want to remind everyone that during our discussion of GAAP results, I'll also talk about our results, excluding movements in foreign exchange rates, a non-GAAP measure. We believe this provides greater comparability when evaluating our performance. In addition, as a reminder, direct operating expenses and SG&A expenses include restructuring and other costs that are excluded from adjusted EBITDA and segment adjusted EBITDA. To avoid repetition, the amounts I refer to are for the third quarter of 2022 and the percent changes are third quarter 2022 compared to the third quarter of 2021 unless otherwise noted. Consolidated revenue was $603 million, a 1.1% increase. Excluding movements in foreign exchange rates, consolidated revenue was up 7.8% to $643 million, at the high end of our consolidated revenue guidance range of $625 million to $645 million. Net loss was $39 million, a slight improvement over the prior year's $41 million. Adjusted EBITDA was $129 million, down 5%, compared to $136 million in the third quarter of 2021. Excluding movements in foreign exchange, adjusted EBITDA was $131 million, down 3.8%. Please turn to slide six for a review of the Americas third quarter results. Americas revenue was $347 million, up 9% and in line with our guidance range of $340 million to $350 million. And even more significant, we continue to surpass pre-COVID revenue levels with revenue up 6%, compared to Q3 of 2019. Revenue increased across all major product categories, most notably airport displays. Digital revenue, which accounted for 39% of Americas revenue, was up 16.6% to $134 million driven by both airports and billboards. National sales, which accounted for 39.7% of Americas revenue was up 8%, with local sales accounting for 60.3% of Americas revenue and up 9%. Direct operating and SG&A expenses were up 12.1%. The increase is primarily due to a 10.2% increase in site lease expense to $114 million, driven by higher revenue, primarily in our airports business, partially offset by a small increase in negotiated rent abatements. Segment adjusted EBITDA was $145 million, up 4.1% with segment adjusted EBITDA margin of 41.8%, down from Q3 2021, primarily due to mix and as expected, in line with Q3 2019. Turning to slide seven. This slide breaks out our Americas revenue into billboard and other and transit. Billboard and Other, which primarily includes revenues from bulletins, posters, street furniture displays, spectaculars, and wallscapes, was up 2.6% to $280 million. This performance was driven primarily by strength in our California, Southwest and Midwest regions. Transit was up 44.7% with airport display revenue, up 45% to $62 million, driven by growth across the portfolio, including Port Authority. Now on slide eight for a bit more detail on billboard and others. Billboard and other digital revenue continued to rebound in the third quarter and was up 6.8% to $98 million and now accounts for 34.8% of total billboard and other revenue, an increase over Q2. Non-digital billboard and other revenue was up slightly. Next, please turn to slide nine for a review of our performance in Europe in the third quarter. My commentary is on results that have been adjusted to exclude movements in foreign exchange rates. Europe revenue increased 6.1% to $279 million, at the high end of the guidance range of $270 million to $280 million. The increase was driven by improvements in transit and street furniture display with revenue up in most countries, most notably in Sweden, partially offset by a decline in France. Europe revenue was also up compared to the 2019 comparable period, and the growth rate was higher than the increase we saw in the second quarter of 2022 versus the second quarter of 2019, adjusting for movements in FX rates. Digital accounted for 40.8% of Europe’s total revenue and was up 22.4%, driven by an increase in the number of digital assets and a strong rebound in demand in Scandinavia, including on our transit assets. Direct operating and SG&A expenses were up 5.6%. The increase was primarily driven by increased site lease expense, which was up 22.1% resulting from a $9 million reduction in negotiated rent abatements, as well as lower governmental rent subsidies and higher revenue. Segment adjusted EBITDA was $18 million, and the segment adjusted EBITDA margin was 6.5%, both down as compared to the prior year, due in part to the one-time reduction in site lease expense in the prior year. Segment adjusted EBITDA margin was slightly ahead of Q3 2019 segment adjusted EBITDA margin. 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 segment adjusted EBITDA, the segment profitability metric reported in our financial statements, does not include an allocation of CCIBV’s corporate expenses that are deducted from CCIBV’s operating income or loss and adjusted EBITDA. Europe and CCIBV revenue decreased $23 million during the third quarter of 2022 compared to the same period of 2021 to $239 million. After adjusting for a $39 million impact from movements in foreign exchange rates, Europe and CCIBV revenue increased $16.1 million. CCIBV operating loss was $14 million in the third quarter of 2022 compared to an operating loss of $26 million in the same period of 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 results that have been adjusted to exclude movements in foreign exchange rates. Other revenue was up 19.1% driven by improvements in most countries. Direct operating and SG&A expenses were up 5%, driven by higher site lease expense, primarily related to higher revenue. And segment adjusted EBITDA was $3 million, an improvement over the prior year's breakeven segment adjusted EBITDA. Now moving to slide 11 and a review of capital expenditures. CapEx totaled $43 million, an increase of $11 million, compared to the third quarter of the prior year as we ramped up our spending, particularly on digital displays in the Americas. In addition to our capital expenditures, I also want to highlight that during the third quarter, we made several asset acquisitions totaling $28 million in our Americas segment. Now on to slide 12. Year-to-date, cash and cash equivalents declined $83 million to $327 million as of September 30, 2022. And during the third quarter, cash and cash equivalents increased $13 million. Adjusted EBITDA of $129 million and changes in net working capital contributed positively to our cash balance for the quarter and was partially offset by cash interest payments and net capital investment. Our debt was $5.6 billion as of September 30th, 2022, a slight decline from 2021 year-end, primarily due to scheduled quarterly principal payments on the term loan facility. Cash paid for interest on the debt was $56 million during the third quarter, an increase of $4 million, compared to the same period in the prior year, primarily due to the higher floating rate interest on our term loan B facility. Our weighted average cost of debt was 6.5%, an increase from year-end due to the increase in LIBOR rates. Our liquidity was $543 million as of September 30th, 2022, down compared to liquidity at year-end primarily due to the reduction in cash. As of September 30th, 2022, our first lien leverage ratio was 4.98 times, well below the covenant threshold of 7.1 times. Turning to slide 13 and our new metric, AFFO. As you may know, during our Investor Day, we introduced a new metric for the company, adjusted funds from operations, AFFO. In the third quarter, we generated $24 million and year-to-date $91 million of AFFO, excluding movements in FX rates. Moving on to slide 14 and our guidance for the fourth quarter and the full year 2022. As Scott mentioned, we haven't seen a material change in advertiser behavior, and we are able to confirm that our fourth quarter revenue guidance is expected to be within the guidance range we provided during our Investor Day on September 8th. Our only update to our fiscal year 2022 guidance is consolidated net loss, which increased primarily due to movements in FX rates. I won't read through all the line items on this page, but I do want to highlight a few updates to our guidance. We believe our consolidated revenue will be between $740 million and $765 million in Q4 of 2022, excluding movements in foreign exchange rates. Americas revenue is expected to be between $370 million and $380 million. Additionally, we believe Americas segment adjusted EBITDA will be at the low end of the provided guidance range, primarily due to uncertainty around the timing of certain anticipated rent abatements as well as softer performance in programmatic. Europe's revenue is expected to be between $345 million and $360 million, excluding movements in foreign exchange rates. Based on monthly and October exchange rates, foreign currency could result in a 15% headwind to year-over-year reported revenue growth in Europe's fourth quarter. Additionally, our cash interest payment obligations for 2022 will remain at $341 million, including the $124 million in the remainder of this year. However, cash interest payment obligations for 2023 are expected to increase to $404 million, as a result of higher floating rate interest on our Term Loan B facility. This guidance assumes interest rates remain at current levels and that we do not refinance or incur additional indebtedness. Lastly, I do want to touch on 2023. Our visibility into 2023 is limited, and we are well aware of concerns regarding the macro environment next year. However, we have proven our ability to pivot in prior recessionary periods, including in 2020 with the pandemic, and believe we know how to quickly adjust our expenses and preserve liquidity, if needed in the future. And now let me turn this call back over to Scott for his closing remarks.

Thanks, Brian. Our business remains healthy, and we're confident in our strategy and optimistic about the growth opportunities ahead for us. I'd like to thank our entire team for their dedication in executing on our strategic priorities, including accelerating our digital transformation, improving customer centricity and driving executional excellence. We believe these efforts are enabling us to strengthen our competitive position and to capture a greater share of advertising budgets in the future. And now let me turn over the call to the operator for the Q&A session. And Justin Cochrane, our CEO of Europe, will join us on the call.

Thank you. The first question today comes from Steven Cahall with Wells Fargo. Please go ahead. Your line is open.

Thank you. Good morning, everyone. Could you discuss the relationship between digital and print customers in the Americas? It appears that digital spending is increasing significantly, approaching the 40% mark. Is this growth coming from existing out-of-home advertisers, or are you observing new customers who are exclusively digital entering the market? Given this growth, do you anticipate raising your digital capital expenditures in 2023? I have a follow-up question as well.

Thank you for the question, Steve. Digital is indeed an interesting topic. To answer your question, the factors contributing to our new category buyers include several elements, with programmatic being a significant driver. We’ve seen many new buyers entering the market due to programmatic advertising. Digital has, since we began utilizing it, been both an incremental addition and an amplification of our efforts. Many clients purchase print campaigns and then enhance them with digital strategies that allow for actions unique to digital platforms. A large part of our recent success in digital can be credited to our modern airport projects, where digital plays a central role and is thriving. It’s difficult to pin down one specific factor influencing our customer base, as it is quite diverse. Regarding your question about CapEx, we haven’t placed constraints on the roadside segment of our business. Instead, it has been paced according to our ability to navigate regulations and facilitate conversions. This remains a common topic in our discussions. Our regional managers and branch presidents would affirm that there is significant focus on identifying excellent locations for digital conversions, but this emphasis has remained consistent over time. Please feel free to continue with your next question.

Thank you for that. I would like to discuss airport revenue. Do you have historical data on airport performance during recessions? It appears that travel is strengthening and returning to pre-COVID levels. If there is a downturn in the economy, do you believe airports would perform better than other parts of your portfolio? Is airport revenue more cyclical compared to the rest of your portfolio? Finally, do you anticipate any significant rent abatements for 2023? Thank you.

On the topic of airports, it's a great question because the current airport environment is quite different from previous cycles, apart from the COVID situation. Previously, during significant disruptions like the financial crisis or 9/11, print media played a much larger role in airport business, which operates differently than digital formats that we're seeing today. One key takeaway from COVID is that early-returning advertisers have recognized the effectiveness of their airport campaigns. It's important to highlight that not only are the assets different, but the sales approach is also structurally changed. A significant portion of airport revenue now comes from our local sales teams, which was not the case during past recessions. I often receive inquiries about airports from across the country, as they have become appealing for account executives seeking substantial clients looking to take bold steps. We're seeing more sales executed through our local branches, indicating a more diverse sales base. Additionally, we are engaging in activities that resemble sponsorships more than traditional advertising, similar to our work with PenFed. This digital aspect is likely more responsive and reactionary during a recession. However, our expanded sales base and increasing sponsorships contribute to a more stable overall presence, which should provide some insight. Regarding abatements, we're still addressing some issues. In Europe, we believe we have resolved most COVID-related matters, while in the U.S., there are still some lingering items. However, these will not compare in magnitude to what we saw in 2021 or this year. I hope that clarifies things.

Thanks, guys.

Thank you. We now have Ben Swinburne with Morgan Stanley. Your line is now open, Ben.

Thank you. Good morning, everyone. Scott, I was curious about your comments on programmatic being a significant driver of digital adoption and growth. However, I gathered that it may also represent a weakness among your channels this quarter, which we've heard from several players in the media industry. Is there more to this than just the ease of increasing or decreasing investment? Do you believe there are other factors that might indicate where the broader business is heading? Are there strategies you think could enhance your programmatic channels in terms of market share or retention of investment? I would appreciate your insights on this, as we are all trying to make sense of the situation.

Yes, Ben, that's a very accurate description. We're still in the early stages of programmatic. We're not yet close to a steady state. This year, both the Trade Desk and DV360 have made significant moves into out-of-home programmatic. As some of the largest omnichannel DSPs, their potential impact on this area is still uncertain. Looking at this year, a few notable changes in out-of-home programmatic have occurred. First, as you mentioned, it's an incredibly easy channel to activate and deactivate, which means advertisers can adjust their promotional spending quickly. We've seen this reflected in some mainstream digital advertising. On the positive side, the programmatic segment in out-of-home has significantly expanded regarding the number of screens available. Comparing the availability of digital out-of-home screens from January to now reveals a substantial increase, particularly in areas that were heavily affected by COVID. Roadside programmatic bounced back first, and throughout the year, other locations like malls, elevators, and gyms have also seen improvements, especially in the first half. While I'm not entirely sure of the current trends, the increase in screens is something that needs to be standardized, and the market has to decide how it views different types of out-of-home programmatic. We are still at a very early stage in understanding this shift. Lastly, it's important to note that Q4 of last year was particularly strong. Given everything that has happened in the macro environment this year, including concerns about war, inflation, recession, and interest rates, it's challenging to synthesize the data. Nonetheless, Q4 last year was an exceptional period for programmatic. While we may discuss our pacing heading into Q4, one significant factor is that we’re not observing the same growth we saw last year. The growth isn't shrinking dramatically, but we don't know how much it will increase from here. That should give you insight into the current state of programmatic.

Yes, that's really helpful. Brian, I don't think you mentioned this in your prepared remarks. But now that we're three quarters into the year, do you have any updates on free cash flow expectations for the full year? Essentially, I'm asking about working capital with three months left, or is there anything else we should consider?

Yes. I mean, I don't have any incremental to add to what kind of guidance and information we've put out there. I mean I think we continue to operationally show improvement. We've got a bit of a headwind with interest rate increases, because we do have some variable rate exposure. And so that may delay kind of the point where free cash flow positivity comes into play. But we're looking to continue to grow the business even with the headwinds that are out there, and I think 2023 will be a big year for us.

Thank you.

Thanks, Ben.

Thank you. We now have Lance Vitanza of Cowen. Please go ahead, when you are ready.

Hi, thanks guys for taking the questions. Nice job on the quarter. I wanted to go back to airport advertising. Would you say that just across the industry, advertising has returned faster or slower than the pace of actual airport travel? And really, what I'm trying to get at here is just simply, do you think you have much of a tailwind left? Putting aside any possible recession, do you think you have much of a tailwind left to the extent international business travel continues to rebound?

Thank you, Lance. It's a good question. You've likely heard various out-of-home transit operators mention that the audience doesn't need to fully return to pre-pandemic levels for advertising revenue to bounce back. This varies across different transit types, but it has generally held true, especially in airports. In fact, many of our airports have returned to 2019 passenger levels, but ad revenue has rebounded even faster than passenger numbers. Airport advertisers are quite astute, anticipating passenger and travel trends. A notable point for airports is that even non-business travelers often include business decision-makers, which bolsters our B2B audience. So, I wouldn’t describe it as a setback; instead, our airport performance metrics are now aligned with previous years, particularly as we move into Q4. While we experienced significant growth earlier this year, that level of growth won’t continue. Overall, though, this shift means our growth rate may slow, but it doesn't indicate a regression.

Okay. And then just one last one for me, if I could, which is in the Americas on the static side, barely grew in the quarter. And I'm wondering, was there anything in particular to depress growth there? Or is that sort of the new normal for static? I mean is there just kind of little to no growth going forward? Or was the third quarter somewhat of an anomaly? Or is this just moderating advertiser demand, global macro headlines?

It's definitely not the last one. Throughout the year, I've mentioned our discussions about insurance. A couple of the insurance companies that have really struggled this year, especially in the third quarter compared to 2021, were significant players in print advertising. This has created challenges for that type of inventory all year. However, we feel optimistic about our printed assets and believe there is solid advertiser demand. We have opportunities to fill some of that gap, even though we may not have captured as much in the third quarter as we would have liked. Looking at the broader picture, the dynamics are shifting to what feels somewhat more typical, despite the unusual circumstances we are in. There are differences between big cities and small ones, as well as regional contrasts like the East Coast versus the West Coast and Southwest. For print, the situation is quite different in the Northeast, which isn't favorable, compared to California, where things are looking much better. Therefore, I think the flat performance is more of a temporary circumstance and likely doesn't indicate a long-term trend.

Very helpful. Thank you.

Thanks, Lance.

We now have the next question from Aaron Watts of Deutsche Bank. Please go ahead, when you are ready, Aaron.

Hey, everyone. Thank you for having me on. Brian, just a follow-up on your comfort level of liquidity as we roll into 2023, just given the macro concerns, increased debt service you highlighted. And maybe you can just also comment if you see working capital returning to a more normalized patterns in ‘23. And relatedly, your revolver loans gone, you mentioned your 7.1 covenant. Remind us what restrictions are for you to access those facilities?

Sure. Regarding liquidity, we remain confident. We will closely monitor liquidity levels. We discussed the impact of rising interest rates and increased cash interest expenses, which present challenges we need to be aware of. However, operationally, things seem positive overall. As we move into 2023, I expect working capital to normalize back to pre-COVID levels, although we experience significant seasonal fluctuations in working capital. To elaborate on a previous question, Q4 tends to be our strongest quarter, but we typically don't receive much of that revenue until Q1, which is weaker for us. This results in a noticeable shift in working capital. Overall, we feel fairly optimistic, but it is a volatile landscape, and we need to stay vigilant. A key aspect of this is the availability of our revolving credit facilities, which are currently unused. We plan to use them for letter of credit purposes, and we have substantial undrawn liquidity available. We only have one financial covenant, the first lien leverage ratio, which is just under five times the covenant level, currently sitting at 7.1 times. Thus, we have ample room there. We have liquidity capacity through cash and our revolving credit facility, and overall, we are feeling fairly positive about our situation.

Alright, that's really helpful, Brian. Thank you for that. And Scott, I don't know if I can get anything on this. But with regards to the strategic review, does the focus remain on select geographies in Europe versus, sort of, the whole pie? And have any talks moved to an advanced stage despite the obvious headwinds in the capital markets and the macro backdrop?

Yes, you're right. I can't say a lot about that one. I mean I'd just say that the message that we gave at our Investor Day and that we sort of referenced in the conversation early on the comments, the prepared comments, stands that we're looking at a subset of the businesses we're focused on optimizing shareholder value. And the reality on deal-making environments, yes, this is a tough one, but when you have assets that are interesting and you have counterparties that are motivated, anything is possible. And I can't speak to any specifics, but we're committed to giving the Street updates as and when we have anything material that we can say.

Okay, thank you. Appreciate the time.

Thank you.

Thank you. We now have Richard Choe of JPMorgan. Please go ahead when you're ready.

Hi, I wanted to follow up on programmatic. You've talked about it being kind of back-end loaded in the quarters in the past. Was it more soft throughout the entire quarter versus back-end loaded?

Programmatic experiences some variation in seasonality each quarter. Certain months can be more active than others; for example, May may see higher demand than June. December in Q4 is often a key month for understanding seasonal patterns. We can analyze the demand environment based on our daily sales data. This sector operates differently from the rest of the outdoor advertising market; it behaves more like a retail business where weekly sales figures help gauge performance. Our sales force provides additional insights by engaging with clients about their campaigns, contributing to a clearer pipeline. Typically, demand peaks at the end of quarters. This year has been somewhat muted, but there have been months where our performance exceeded 2021, and others that lagged behind, resulting in a fairly stable overall experience so far this year. That's about as much information as I can share, and perhaps even a bit more than I should.

Great. Thanks for the color on that. In terms of the static billboard market, can you talk a little bit about what you're seeing maybe your top markets, Tier 1 cities versus maybe some of the smaller. Is there any difference there between the demand or pricing?

It's interesting to consider Tier 1 cities and how you might expect different areas to perform based on size and development. However, the market dynamics aren’t that straightforward. In this landscape, major cities like Los Angeles and New York function in unique ways, exhibiting higher out-of-home advertisement penetration compared to others. These cities significantly influence the financial performance of many major players in the industry, and they are demonstrating strong demand. In contrast, when looking at the next tier of large cities, many do not show the same strength. A crucial aspect here is the influence of media, social influencers, and entertainment, which are particularly potent in the leading markets. On the other end of the spectrum, while we don’t focus on the smallest markets, we see our best results, especially in printed ads, coming from smaller and midsize markets. This trend reflects the health of their economies and the supply-demand dynamics at play. Our data shows a balanced performance between local and national demand, which might be partly due to our limited inventory in major national locations like New York. It's a fascinating market, and as others have noted, mid-sized markets are currently more favorable than the smallest ones. The ideal market size is always shifting, and at present, it seems to lie in the upper mid-sized cities where demand is robust.

Great. And the last one for me. At the Analyst Day, the long-term guidance was for 4% to 6%. Is there any reason to think that next year wouldn't be in that range?

Yes. We haven't made any adjustments to the guidance beyond what we previously stated, Richard, so.

But we're also not giving a 2023 estimate. I think it's important for us not to lock in too much because there's still an awful lot for us to learn. We're really in the early innings of our upfront. It is going well, as I said in the prepared comments. But by the time we're talking in February, we're going to be able to give you a much more fulsome picture of what the year looks like.

Yes, it was 2023. Thank you. That’s it from me.

We now have Jim Goss of Barrington Research. Please go ahead, when you are ready Jim.

Alright. Thank you. Actually, I did want to talk about upfronts. I wonder if you could characterize various aspects of it and the way you approach it. In terms of the share of the revenue base that's involved, the timing, the range of values you'd sell, and the pricing. And if to the extent they sort of make this exposure, if you will, how you satisfy that?

Yes, Jim, that's a big question filled with details. We refer to this process as upfronts for lack of a better term, but it's important to note that it is not at all similar to TV upfronts. We don’t have a week filled with events and announcements about new content. This period is focused on our perm renewals, which I’ve not detailed much about before. It's a U.S. phenomenon, just to clarify, and it doesn’t resemble the TV upfronts. While we haven’t shared many specifics, roughly half of our business involves contracts that last longer than six months. We're not planning to disclose much more on this topic, but I think it’s fair to provide a general sense of it. We work on a cycle with our major assets, ensuring we have backup customers lined up and various ways to achieve occupancy. For instance, if a renewal is set for December 1st, we begin discussions over the summer with the current advertiser to gauge their interest in renewing, along with any anticipated price increases. These increases are typically assessed based on economic factors and traffic growth rates, which tend to be positive. During this process, some advertisers might opt out, and we would then approach our backup advertisers and adjust the pricing accordingly, which often benefits us compared to sticking with the current customer. We do aim to have the existing customer cover any underlying cost increases. The range of negotiations can vary greatly, from six-figure renewals for one location to four-figure deals for others. Different sales teams and levels of executive involvement come into play during these negotiations. Throughout our upfronts, we closely monitor the top 15% to 20% of our inventory, keeping an eye on trends in rate increases and renewal rates. When I mention that things are going well after a month, it relates to our observations of strong increases and demand, which we will continue to monitor and work on over the coming months.

Okay. That's very helpful because it certainly helps improve the confidence you have in the projections you give all of us.

That's why we kind of hold off until February to give the look at the full year, because then we will have a good lead part of our business already booked.

Okay. Maybe another question, without going too far down the road of how you're going to potentially split up assets. So I wondered if there would be some organizational structure that might differ. For example, if you have fewer international markets, might each of them be separate markets since they probably don't interrelate all that much, given the nature of your business? And would that be a level of management and costs that you might be able to come as a savings? And does whatever structure you come up with have some impact in terms of the debt that you have internationally?

Sure. I have a few thoughts on that, but I need to be cautious about what I can share. It's too early to discuss the structure in detail until we finalize our divestitures. However, I can assure you that we do have a plan. If we successfully complete the divestitures, we will definitely achieve structural savings. It likely wouldn't be structured in the way you suggested, as it makes sense to have an in-region CEO for the assets we will retain. This won't be a minor operation; it will represent a significant portion of the business. I believe there will be savings, but it's premature to speculate on the structure. I also lost track of the second part of your question while contemplating my response to the first, so I'm not sure I fully addressed that.

The BV?

Yes, yes. You want to talk to that?

Yes. I think whatever we do is going to be compliant with the indenture, so I wouldn't anticipate any significant structural changes because it would likely be limited by the intention as long as there's debt outstanding. And I think the only other thing I would add is if and when things do continue, that could create some reporting differences. But until that happens, I don't envision that either.

Okay. And the last thing, M&A hasn't come up yet, not that should be at the top of your list right now. But how do you view property availability in this stage of the cycle in the economy? And you're feeling as to your capacity to take advantage of opportunities you might see.

So I take it that this is in U.S.

U.S. Yes, yes.

So there's definitely still willing sellers and willing buyers. I think you've seen all of the U.S. based out-of-home companies have had a pretty active M&A agenda. For us, we need to keep an eye on that liquidity question that has come up in a couple of different ways as we went. Obviously, all things balance sheet-related come into play on it. I definitely think it remains a good environment to transact. But obviously, with credit markets like they are, and with the macro what it is, we're going to be keeping a very careful eye. And to the words you said, it's not the top of our list of things that we need to be doing. But at the same time, we want to make sure that we're not missing out on assets that would be a great fit with our platform.

Alright, thanks very much.

Thanks, Jim.

Thank you. We have no further questions on the line. So I'd like to hand it back to the management team for any final remarks.

Great. Thank you very much. We appreciate the questions. We appreciate everyone's interest. We feel good about the business, and we're looking excited to finish the year strong and get 2023 set up to be a year of growth for us. So we're very optimistic about where things are headed, and we appreciate everybody's time. Have a great day. Thank you all for joining.

That does conclude today's call. Thank you. You may now disconnect your lines.