Clear Channel Outdoor Holdings, Inc. (NYSE:CCO) Q2 2023 Earnings Call Transcript

Avi Steiner: Thank you. Good morning. A couple here, just first on free cash flow, a little bit higher than I was looking for. I think, I understand cash interest and CapEx. I’m just wondering if there’s anything else we should be thinking through for the back half of the year, whether it’s working capital or anything else? And then I’ve got a follow-up. Thank you.

Brian Coleman: Yes. You mentioned the big drivers of interest expense and investment in the business through CapEx, even though we ranged [ph] it in a little bit this quarter. I think on the working capital side, there is a big AR build. It’s seasonal. And so I think those patterns will continue going forward quarter-to-quarter. But it was a big number this quarter. And so that’s may be kind of the difference. And so I would characterize kind of those three items impacting free cash flow in the overall backdrop of a little soft quarter than we had hoped for.

Avi Steiner: Appreciate that. And then, Scott, a couple for you, if I could. The strategic review language, maybe it’s just me, but it looks to have changed a little bit from prior releases to read that as well as Europe, maybe you – maybe, but you are evaluating a range of other strategic opportunities to enhance value. I don’t know, if possible, but to the extent possible, perhaps you can elaborate on that? And then I’ve got one, last one. Thank you.

Scott Wells: Yes, Avi, I mean I think we are always striving to be as disclosure and transparent as we can be, but you may be reading a little more into that one than merits. But we’ve been pretty clear, I think. I guess I’d go back to first principles on this one that we ultimately see this as a U.S.-focused business. And we have assets in various parts of the world that are not the U.S., and I think, strategically, we’re considering the right time and the right opportunity for making those divestitures as it makes sense. But I don’t know that there was anything intentional in our write-up on that. I don’t know, Brian, if you…

Brian Coleman: Other than we always keep an open mind and look at alternatives, but nothing specific.

Scott Wells: Exactly.

Avi Steiner: Fair enough. And let me ask one last question, if I can, and I appreciate the time as always. I know the moderating outlook ad outlook is temporal in nature, but maybe given the lower equity valuations of at least one of your REIT peers, I’m wondering if your thoughts about potentially driving towards a REIT conversion, which you had mentioned earlier, might have changed at all and if there are any other options that might be attractive to the company? Thank you very much for the time.

Scott Wells: Yes, Avi, it’s a great question. I think our view on REIT is driven by the benefits that REIT status ultimately give. For those benefits to work maximally, you have to have the right capital structure associated with it. So I think if there’s anything I’d characterize is that this just redoubles our commitment that we need to get our balance sheet in the right place before we pull the trigger on becoming a REIT. I don’t know, Brian, if you would add anything to that.

Brian Coleman: I think that’s exactly right, Scott.

Avi Steiner: Thank you all.

Brian Coleman: Thanks, Avi.

Operator: [Operator Instructions] Our next question comes from Jonnathan Navarrete from TD Cowen. Jonnathan, your line is now open. Please go ahead.

Jonnathan Navarrete: Hey good morning. Thanks for taking my call. The first one is on regarding Airports. So could you speak a little bit about when did volumes start picking up? Was it like maybe towards the end of May? And has that type of volume continued, or has it increased even? And a follow-up to that is, with airports, are you seeing any indication that the bottoms will continue to pick up into the fourth quarter or how do you have any insight into the fourth quarter as of now?