Okay. Please note that important disclosures, including my personal holdings disclosures and Morgan Stanley disclosures, all appear as a handout available in the registration area and on the Morgan Stanley public website. I'm excited to welcome back to the conference, iHeartMedia, including the CEO, Bob Pittman, and CFO, Rich Bressler. Bob and Rich, thanks for coming. Thank you. Thanks for having us. Good to see you guys. Maybe before we get into the fourth quarter results and the 2023 outlook you guys laid out, step back a bit and talk about the strategy at iHeart to try to grow the business over the long term. Well, I think it's probably the same strategy we've been using. Yeah. Which is we wanna get as many engaged relationships with consumers as we can have. I'll tell you, we're doing pretty well there. We've got about 90% reach of the country. There are only two companies that come close to that, Google and Facebook, in the U.S. You know, to put that in context, the biggest TV networks are probably 35%, 40% reach today. We've got that. The time spent we have with them is probably in excess of social, Google, et cetera, TV, et cetera. We've also not only got the reach, we've got more time with them than other competing media does. The other part of the strategy is once we've got all those people, let's monetize them. You've seen us continuing to invest in the tech stack. We've got the largest sales force in audio. We developed a strategy five or six years ago, which has turned out, I think, to be very helpful, called Any Seller Anywhere Can Sell Anything, so that instead of having dedicated siloed sales forces, we have sellers anywhere in the country that can sell all our array of products, which is, I think, one of the reasons we have monetized podcasting so well versus others and so profitably. Then by the way, we'll invest in the tech behind it, whether it's Triton, Voxnest, Jelli, et cetera, and building that out. Then the other piece of it is to use that asset we have to also build other platforms for growth. We used, you know, people say, "What's the value of radio advertising?" Well, I'll tell you what the value is. We used it to create all those events. We used it to create the iHeartRadio brand. We used it to create the iHeartRadio app. We used it to create podcasting. Now we've even used it on stuff like Metaverse. How are we doing such great performance on the Metaverse? Again, we're using the radio advertising to drive it. That strategy, I think, is intact, and we see a lot of growth out of it. If I look at the TAM of digital, or even the TAM of TV, I say radio is gonna provide a superior, or just our broadcast radio, put aside podcasting, et cetera, a superior return for advertisers, that gives me great confidence that we've got a big market to sell into. Got it. Anything you want to add, Rich? No, no. I, I would say back to it, you know, we're gonna talk about all the piece parts that kind of support that overall strategy and I think pragmatically how we implement it. You know, it really does, just to emphasize what Bob said, it really does start with our reach. You know, if you look at our uniqueness, we reach, you know, 275 million, 273 million people on a monthly basis. We're bigger than Facebook or Google. We reach over 90% of America. I think if you look at the broadcast networks today, on a weekend, you know, maybe with sports, they're at 40%, you know, 35%, 40% something percent. I think Spotify is, like, at 18% on ad-supported reach out there. There is nobody that's got the reach medium that we have, and, you know, therefore, we're rock solid in terms of our level of engagement with consumers. Let's shift and talk a little bit about the outlook for 2023 and Q1. You guided to mid-single-digit revenue declines for the first quarter. Right. What are you guys seeing in the business today, and sort of what's visibility like for...? Either of you want to take it? I think there are a couple. We'll both take it. Let me start. I think the visibility is really about how do we break it down and analyze and what does it mean to us. If you looked at, and sort of as a slowdown goes for advertising, this is a relatively mild one. Yeah ... in contrast to 2020, that was a dramatic one. In a dramatic one, what happens is an advertiser stops spending because they can't afford advertising. Even the folks that if they don't spend $1, they're not getting $1, they still have to stop because business is so bad. In Q1, we, I think we provided this in the discussion of the Q1, is we're seeing the small advertiser who spends $1 today to get $1 tomorrow continuing to spend. It says, okay, the business is good enough that they've got advertising there, it's not affecting the business. The people we're seeing standing on the sidelines are the people who've got money to spend and are deciding whether or not they want to spend it. In Q4, even though it was a slow year by the end of the year, we had a record quarter. In Q4, you have to spend your money because that's a great sales period for almost every company. Sure. Q1, the truth is most companies don't sell a lot in Q1. If you're gonna hold back your ad dollars, hold it back in Q1. I think what we're seeing is symptomatic of people saying, "I don't know what this year's gonna be. Not gonna be robust. Let's save every penny we can now." The quarter to do it is Q1. It's lined up with the advertisers have to spend, they're spending. The ones that can hold back are holding back. Says, okay, this is just what you would expect, which means people are a little nervous, a little uncertain, but the business underneath is in very good shape. I don't think there's a lot we can do to affect that macro. Mm-hmm. The good news is that Q2 and Q3 are increased importance of people doing sales there, especially people selling summertime products. You'll begin to see that money coming in probably April and May. Q4, everybody's got to spend their money. I think through the year we should see an acceleration of people coming back in the marketplace. Yeah, by the way, the only thing I might just really highlight that, you know, that's really what the pattern of the business is. Let's put aside the economy. Yeah ... and what the Fed is doing, and, you know, that's not something obviously that we have any control over. The pattern of the business, you know, this is the pattern we normally see, you know, overall in the business from a revenue standpoint. We expect that pattern to progress throughout the year, just as Bob said. Are you able to look into Q2 yet with enough, you know, business to sort of say Q2's better, looks better than Q1, or it's still too early? We haven't made any announcements, Wendell. I don't want to. Okay ... give any more data. Are there any particular verticals or regions that you would highlight? Sounds like it's sort of a local national thing or small business, you know, big business. It's interesting. I think it is. I would say it slightly differently, which is- Yeah ... it's people who've got to spend money to get their cash register ring or spending the money. The people who don't have to get it through in brand advertising or building a new halo or whatever, you can hold on that. Do I spend it this month? No, I can spend it next month. A little more brand performance breakdown. Yeah. Yeah. I think you're finding that split happening. As far as our business goes, we are, you know, said it before, we're only, no sectors more than 5% of our revenue, no advertiser greater than 2%, so we're somewhat hedged on anybody up or down. Having said that, you know, look, auto is strong. People talked about when it was slow. Yes, it's strong. Some of the financial stuff is a little slower, but I think everything's within the band of this being, you know, not, again, sort of moderate in terms of a, of a downturn for us. Right. Bob, you talked a little bit, and I think you both did, about some self-inflicted wounds. I think the thing that probably surprised people in the on the earnings call and why the stock reacted the way it did was certainly the top line, more the negative operating leverage. Right. Maybe this is an opportunity of more time to unpack it a bit. Sure. Give you guys a chance to sort of walk people through what you were referring to and sort of how you mitigate and then, improve upon those trends. Sure ... going forward. Look, we have multiple platforms, multiple products, and the sales management, and it's not strategic, this is very tactical, is you're constantly trying to say, "How can I get people to bundle more stuff with my package? If I lead with this and then bundle the other, can I get incremental revenue?" Within our Digital Audio Group, we've got some products we own, like our streaming and our podcasting, and then we've got products that we resell, most of them local products to resell. Within that, there's a range of different margins. What we did in Q4 is we thought that there's a lower margin, some lower margin products that if we led with that and we packaged other stuff with it would be incremental to everything going on. Instead, what we found was they shifted from the high margin stuff to the lower margin stuff. I think actually that was probably a symptom that the economy is somewhat slow. That in normal times, I actually think it would have been the great sales strategy, and I think our people made the right decision because I think they would have said, "Oh yeah, for this I'll also... I found some extra money." They didn't. We go, "Okay. We've hit our limit. Let's back that out." By the way, sellers sell what you commission them to sell and what you package for them to sell. We've adjusted the commission rates, we've adjusted the packages, and, you know, it'll take us through probably into Q2 to for it to right itself. you know, by the way, this is what we do day in and day out. Had it been probably Multiplatform Group, which is much larger, we probably wouldn't have noticed the delta. In the Digital Audio Group, it's big enough to see the flow through on it. Yeah. Yeah. By the way, just maybe to build on that for a couple of points. I think it was a Multiplatform Group, maybe even a different quarter with digital than going into, just mathematically what we talked about. It's just on an absolute numbers, it's our smallest quarter of the year. By the way, always has been, probably always will be our smallest quarter. Just, you know, when you do the math, it has a bigger effect on your overall margin going to Q1. The other thing I'd point out is, as a business standpoint, structural standpoint, and our view about the future of the business, and I'll just touch on any part, but Digital Audio Group for purposes of this question. You know, we've said it to mid-30% EBITDA margin. Mm-hmm. Nothing's changed in that in terms of our view. You know, I think what this period of time has shown us a little bit is because digital has gone such mainstream over the years, you know, digital and podcasting with all the strength that we have and continue to have, it's just not immune from the overall economic environment that's out there. Everything is digital now. What's that? Everything is digital. Everybody's digital. Yeah. You know, again, our performance, we continue to be very strong and, you know, whether it's finishing the year or even on a digital front as you go into Q1. We're just affected, by the way, as I think all your everybody you follow in the digital world is affected more and more right now. I think for us, we're probably a little more sanguine about it because we've deal with it with a more traditional media. Yeah. I think your point about everything's digital is actually really important because I think even our broadcast radio, we're turning into digital. Right. Once the world of one-to-one goes away, which it's going away, and everybody's selling cohorts, then our broadcast radio can compete on a level playing field there. I think you're finding the agencies and the advertisers just saying, "Look, we prefer to look at advertising the way we've looked at digital, with cohorts, with measure attribution, we can target better," and they're now demanding everybody come aboard. The upside for us is, okay, that means we now can take that broadcast inventory and put it into that digital TAM instead of being limited by a radio TAM. Positive for us. I just wanna follow up because I do think this is important as people think about, you know, buying the stock after the sell-off that you've had. Bob, you mentioned, I think, that this will work itself out sort of through Q2. Is that the right way? I think we think into Q2. I think Q1 it's working itself out. Okay. in terms of the commission piece of it. Okay. For those of us who don't run a radio company, which would be all of us other than you guys, how frequently do you toggle these sales incentives up and down? Is this the kind of thing that you would say happens, you know, once a quarter, once every five years, where... I don't think I've ever heard this message before from you guys. It is- Where it impacted the business this much. It is actually something I hope our sales management is doing at every level every day. Yeah. Optimize. Occasionally, you know, they take a bigger swing at something, somebody's got a big idea, which, you know, this was. By the way, normally they do stuff like this and it works, and it carries a package. I mean, why is podcasting doing so well? We add it to the package. So we continue to build on it, and I just think it's a confluence of, we probably pushed it a little too far in trying to, oh, how I can get this low margin thing to drive the high margin stuff. Probably pushed it a little far, and the economy was just slow enough. Mm. that nobody had extra money. you know, but I'm not. Well- I don't think, by the way, I don't think it's even a failing of the sales management because we pay them to constantly be looking for these breakthroughs- Sure. look for ways to add additional revenue. By the way, I just will add a third one. Just what I said before at the risk of, you know, repeating what I said, but it's worth. you know, you see it in Q1 in terms of just, you know, the effect a little bit. Mm-hmm. -in terms of the absolute number because of the size. I just want to remind you also, I guess it's a Q1 phenomenon which we should learn from, a year ago, we did additional sales support because of the growth in digital. Margins were a little bit lower in Q1. We said that we'd get back on track to normalized EBITDA margins for the Digital Audio Group by Q2, and we did during that period of time. I just think from a commitment and our belief in the business, you always want to look back to look forward there. You look back at that fact pattern, fact pattern should give people comfort looking forward- Yeah. from this fact pattern. Look, I think if you're going to grow a business, you're constantly doing things. We either got up the sales service, which Rich mentioned we did a year ago or a year and a half ago, and we do stuff with playing with commissions. It's we're constantly doing that because this is a company that's growth is essential to the company. What we don't want to be is static, and we try and impress upon our people that change is the constant. We're not gonna ever get there. It's just we do one thing and then we do another and another. These are stepping stones. Sure. Good. Well, thank you guys for spending time on it. I thought it was important. Thank you. Thank you. give an update on it. Thanks for digging in. Investors are obviously focused on it. Maybe shifting gears a bit, Rich, you already sort of answered part of this question around digital margins long term. You got a lot of businesses inside of digital. We've been talking about the different margin structures. What are you guys expecting in terms of the podcast business when you look out over the course of this year and beyond? Broadly for digital, what do you think are the sort of growth drivers for that segment over the longer term? I'll let Rich get into some specifics. Let me give you just the overview, is podcasting for us is this sort of phenomenally successful new growth area. It is an adjacent business to radio. You know, in radio, what we're really doing is we don't have programs. It's not TV without pictures. We're keeping people company. If you hang out with Ryan Seacrest every morning, he gets to be your go-to while you're getting dressed in the morning, by the way, while you're cooking breakfast, while you're driving to work, and that becomes your habit. Podcasting is also very host-driven, and it turns out that it is on demand, and I'm gonna use a Netflix example here. We could argue Netflix is really TV on demand. You can argue podcasting is really radio on demand. As a matter of fact, some of our biggest shows are actually radio shows that then are on demand as well. Mm. Unlike talk radio, which tends to be older, this tends to be younger. The sweet spot are millennials, even Gen Z into podcast listening. Again, we've got the critical mass to drive podcasting. If we look at the characteristics about what's it gonna be? It's a, it's a form that's very comfortable for our company, both in terms of product creation, we're expert on creating audio product like this, and in terms of monetizing it. The second thing is that we can make it. Now the question is how do you get an audience for it? You gotta promote it. It turns out using our broadcast radio to promote the hit podcast has turned out to be a secret sauce of ours. By the way, since the next largest audio company reaches less than half of what we do, it's a unique asset for us. Then I think as you look one more level down, now that we have so many high-hit podcasts, we have more downloads in a month than the next two podcast publishers combined. With having that array of hit podcasts, by the way, we're the only podcast publisher that has ranked content in all 19 content categories that Podtrac measures. By having that kind of library and current crop of podcasts, we're able to promote other podcasts. If you listen to our podcasts, you'll often hear, "You're ready to listen to your podcast, we give you a little promo for a new podcast coming." We're able to get this cycle going, which has been very positive. I think in terms of the monetization of it, because we set up our sales force not in silos. Mm. Every seller can sell everything, that means we can put the full firepower of not only our 1,500 person sales force, but also our ad tech stack against podcasting. Finally, as you look at, you talked about everything's going digital. You're right. Now you have advertisers say, "I want this audience." Well, we can find that audience for them across not only streaming audio, we can now find it in broadcast radio, and we can find it in podcasting, and we can link it seamlessly. We can even do, instead of the direct match, we can also do the looks like, which has been, of course, the big winner in digital. Yeah over the years, and provide that. If you look at the performance of podcasts, is the consumer engages with podcasts on a level we don't see in any other medium. Mm-hmm. In terms of the, the vast majority listen to the entire podcast all the way through. That's unheard of in radio or TV or anything. They don't tune out during the commercials. They sit through and they actually have a very different and positive view of the advertisers about, "Oh, this is supporting my favorite podcast." There's such a bond with the podcast that accrues to the advertiser as well. You know, by the way, just, I just wanna add two other quick things. Bob made the point about the listening, which is close to 90% people don't realize, of people that start a podcast listen all the way through. For all of us that have been running media companies for, you know, many, many years, none of us have. Mm-hmm A consumer medium that's engaged. Also, if you are listening to a podcast, just like you had on online video, you have all the capabilities. Some people say, "Well, 'cause you can't skip through." Well, you can't. You have all that capability, so I think that's important. The second piece, and Ben, you said into a little bit the premise, the strategy and the reasons why we embarked on the podcast strategy hasn't changed. For everything Bob articulated, for everything I said on consumer engagement, and from a monetization point, remember, these are early days for podcasts, and big advertisers really just discovered podcasting over the last couple years. That's so important because big advertisers bring big dollars because of the effectiveness of podcasting. Again, without putting any numbers on it, but our optimism, you know, about obviously our entire company, but particularly podcasting, hasn't changed. If anything, I think the conviction's even stronger. Podcasting's been very much a host-read ad- Right medium. Which is great Right as a consumer. It, I'd imagine that could be a little hard to scale. Like, you can only get Ron Burgundy to read so many ads on his podcast and then scale that. Have you figured out ways, or are there opportunities to sort of scale the business beyond host-read ads to sort of something that's more scalable? Most of what you think is a host-read ad is a dynamically served ad. Right. It's not host-read anymore. Embedded in the podcast. Yeah. Shocked. Yeah, we're ahead of you. By the way, we knew in radio the most effective ad is a, is a on-air talent read ad or endorsement. Yeah. Same true as podcasting. We'll charge people more money to have the host do the ad. You're right, you couldn't scale it if I embedded it in the podcast, which was happening. Yeah. Yeah. As you know, forever and ever. We have now dynamically, so it sounds like it's host-read. It is. It's just serving you a different one than serving me and a different one than serving him. By the way, when that advertiser goes away after the campaign's over, I can put another ad in, as opposed to they have a permanent location in that podcast forever and ever and ever. It allows us to effectively monetize the tail, the long tail of podcasts. Yeah -old episodes again and again. I think it's, you know, again, it's an important part of podcasting, and I think we're getting premium pricing for it. I think the ability now to dynamically insert it has just opened the door for. Mm-hmm really scaling it. By the way, I would say we. We are scaling. Like I would actually say not in anticipation, we're scaling right now. You know, Ben, back to your point again on host. You mentioned Ron Burgundy and obviously, you know, that's been tremendously successful for us. We've got other. Otherwise I'd have Will Ferrell. Right, Will Ferrell. Oh, come on. What? What? What? you know, that's been tremendously successful, we have a lot of other high-profile hosts that are tremendously successful. again, going back to something, you know, that Bob has been saying for a long period of time, a great podcast is like a great, you know, dinner conversation. The host is critical. Doesn't always have to be high profile. It's that person initiating conversation, getting you to talk about the topic. you know, again, we have our high-profile hosts. if you look at, you know, we've got more podcasts, you know, number one in 15 or 17 categories. 19 categories. 19 categories. Thanks, Bob. In terms of what, you know. Keep counting. in terms of Podtrac, you know, we have more podcasts that have more than 1 million downloads than anybody else out there. You don't get that by, you know, not having scaled the business. I'd argue we scaled it already. Yeah. I think also you'll find in the podcast business, it's consolidating. Just like every, you know, industry does around the big players. I think we're getting, it's getting easier and easier to get our scale. I think for the small players, they're finding, you know, themselves going, "Well, how do you play in a world- Yeah Where you're getting crushed by the number of podcasts out there?" People can't find it. It's not gonna do them much good. Yeah. Let's shift gears a bit. I wanna make sure we talk about free cash flow, which is obviously pretty important, to put it mildly. It's our favorite topic. Thank you. How should we think about that for this year, particularly given the start to the year, as you guys have acknowledged, is tough. What are the opportunities, Rich, that you see on the cost side to continue to optimize free cash flow? Well, let me. Maybe I'll take the second one first, I'll turn to free cash flow. you know, it's interesting, you know, companies announcing cost programs. We announced an additional $75 million cost program, I think, as you know, at the end of last year, on top of the other cost programs that we announced previously. We also announced or have been talking about, we've done a pretty dramatic consolidation on our real estate footprint in the United States. Mm-hmm. We were at about 4 million sq ft. We're down to about 2 million sq ft. I'd say the bulk of that has been implemented already. Also, if you look at our capital expenditure numbers, and then I'll come back and tie it all together, we spent about $160 million in capital expenditures in the previous years. Our guidance this year is $110 million-$120 million. A significant piece of that higher capital expenditure number was to help foster the consolidation out there. You know, to us, it's, I always find, and I've said this frequently, what Bob and I do, we're constantly looking at saying, "Gee, if we started iHeart today-"How would we build the company? How would we take advantage of efficiencies? How would we take advantage of AI? This is a continuing process for us. We have announced additional cost programs, but at the same period of time, what do we do every day? We look to say, "How do we take advantage of efficiencies and the money we've invested in capital expenditures to drive more to the bottom line?" If you look at last year, I think last year was about the 2nd-best free cash flow year, or close to the best free cash flow year we ever had as a company. Bob already mentioned it was the 2nd-best EBITDA year for a total year and the best quarter we ever had, leaving Q4. You look at this year, in terms of free cash flow, we expect it to be a very strong free cash flow year. I think most of the sell side has us, you know, like, around $225 million or so in free cash flow, out there, which is driven obviously starting with the EBITDA number, where I think the consensus is about $820 million or so. Mm-hmm ... thereabout on the sell side. The reduction in capital expenditures, as I just mentioned, and just as a reminder, unlike most companies, I'm sorry, we can flex up and flex down our capital expenditures depending on what's happening in the operating environment out there, so we have the ability to flex that down. And I think as we've demonstrated in previous years, 'cause also during the pandemic, the worst period of time any of us have ever seen, we generate positive free cash flow as a company, and I think that's a good reminder about the leverage that Bob and I, and the rest of the gang have to pull. Assume we're going to be a full year taxpayer, which is, think about that, like, is about 15% of EBITDA, and we have about $390 million a year of interest expense. We also continue to chip away at that, you know, as we've aggressively managed the balance sheet. We have been I'll say what we've done publicly, we've purchased, I'm sorry, bought, that's not even English. We purchased about $300 million of the [8.375] bonds with $330 or so face value, so a pretty good deal, 11% yield on those. We're opportunistically going to always look to improve that, and I think that brings about $30, a little less than $30 million a year on annual interest savings. At the same time, you know, we've got, you know, a piece of our debt that's floating, so we're not unaffected by the increased interest rates. Yeah. The net result, in summary, is we're gonna have a good free cash flow year in 2023. Okay. Any questions for Rich or Bob? Happy to go to the audience. If you have any, please wait for a microphone. Clearly, we covered all the important topics. Yes. Any anything you guys wanna close on? Any comments you wanna leave us with as you think about the rest of this year and sort of where you guys are focused? Well, look, we continue to be excited about the sector. We're in audio. If you look at that WARC study done, what, about a year and a half ago. Yeah ... showed that the daily consumption, share of daily consumption media is up to over 30% for audio. We are in this world, the biggest piece of audio consumption is broadcast radio. We're there and with a major footprint. We're also there with a major footprint in digital radio. We're there in a major footprint with podcasting as well. I think we're well-positioned, and I think, you know, if you look at the video marketplace, pretty well saturated. It's a zero-sum game. If I got a new show or a new network, I have to take the time from someone else. In audio, what we're taking our time from is peace and quiet. People had times of their day they did nothing, and they go, "Nothing's going on." Nobody does that anymore. Right. They're filling up every second. Mainly they're filling it up with their ears, not their eyes, because they've sort of filled up the eyeball time already. I think we're in a position to take advantage of that. By the way, what I'd add is we are laser-focused, for all the pieces Bob said, on driving results, creating equity value for our shareholders. I think that's important. Why the 2020 reference was important in terms of the generation of free cash flow. We're not confused about that, in terms of why we're here, which is to create that value. Great. Well, listen, thanks guys.