10-Q: Quarterly report pursuant to Section 13 or 15(d)
Published on August 7, 2024
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
For the quarterly period ended June 30, 2024
For the transition period from to
Commission File Number: 001-32663
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||||||||||
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(Address of principal executive offices) | (Zip Code) | ||||||||||
(Registrant's telephone number, including area code) |
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
Trading Symbol(s) | Name of each exchange on which registered |
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☐ Accelerated filer ☒ Non-accelerated filer ☐ Smaller reporting company ☐ Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes ☒ No ☐
Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.
Class | Outstanding at August 2, 2024 | ||||
- - - - - - - - - - - - - - - - - - - - - - - - - - | - - - - - - - - - - - - - - - - - - - - - - - - - - | ||||
Common Stock, $0.01 par value per share |
CLEAR CHANNEL OUTDOOR HOLDINGS, INC.
TABLE OF CONTENTS
Page Number | ||||||||
PART I—FINANCIAL INFORMATION | ||||||||
Item 1. | ||||||||
Item 2. | ||||||||
Item 3. | ||||||||
Item 4. | ||||||||
PART II—OTHER INFORMATION | ||||||||
Item 1. | ||||||||
Item 1A. | ||||||||
Item 2. | ||||||||
Item 3. | ||||||||
Item 4. | ||||||||
Item 5. | ||||||||
Item 6. | ||||||||
1
PART I – FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CLEAR CHANNEL OUTDOOR HOLDINGS, INC. AND SUBSIDIARIES
INDEX TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Page Number | |||||
Financial Statements: | |||||
Condensed Notes to Consolidated Financial Statements: | |||||
2
CLEAR CHANNEL OUTDOOR HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data) | June 30, 2024 |
December 31, 2023 |
|||||||||
(Unaudited) | |||||||||||
CURRENT ASSETS | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Accounts receivable, net | |||||||||||
Prepaid expenses | |||||||||||
Other current assets | |||||||||||
Current assets of discontinued operations | |||||||||||
Total Current Assets | |||||||||||
PROPERTY, PLANT AND EQUIPMENT | |||||||||||
Structures, net | |||||||||||
Other property, plant and equipment, net | |||||||||||
INTANGIBLE ASSETS AND GOODWILL | |||||||||||
Permits, net | |||||||||||
Other intangible assets, net | |||||||||||
Goodwill | |||||||||||
OTHER ASSETS | |||||||||||
Operating lease right-of-use assets | |||||||||||
Other assets | |||||||||||
Total Assets | $ | $ | |||||||||
CURRENT LIABILITIES | |||||||||||
Accounts payable | $ | $ | |||||||||
Accrued expenses | |||||||||||
Current operating lease liabilities | |||||||||||
Accrued interest | |||||||||||
Deferred revenue | |||||||||||
Current portion of long-term debt | |||||||||||
Current liabilities of discontinued operations | |||||||||||
Total Current Liabilities | |||||||||||
NON-CURRENT LIABILITIES | |||||||||||
Long-term debt | |||||||||||
Non-current operating lease liabilities | |||||||||||
Deferred tax liabilities, net | |||||||||||
Other liabilities | |||||||||||
Total Liabilities | |||||||||||
Commitments and Contingencies (Note 6) |
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STOCKHOLDERS’ DEFICIT | |||||||||||
Noncontrolling interests | |||||||||||
Common stock, par value $ |
|||||||||||
Additional paid-in capital | |||||||||||
Accumulated deficit | ( |
( |
|||||||||
Accumulated other comprehensive loss | ( |
( |
|||||||||
Treasury stock ( |
( |
( |
|||||||||
Total Stockholders' Deficit | ( |
( |
|||||||||
Total Liabilities and Stockholders' Deficit | $ | $ |
See Condensed Notes to Consolidated Financial Statements
3
CLEAR CHANNEL OUTDOOR HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF LOSS
(UNAUDITED)
Three Months Ended | Six Months Ended | ||||||||||||||||||||||
(In thousands, except per share data) | June 30, | June 30, | |||||||||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
Revenue | $ | $ | $ | $ | |||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||
Direct operating expenses(1)
|
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Selling, general and administrative expenses(1)
|
|||||||||||||||||||||||
Corporate expenses(1)
|
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Depreciation and amortization | |||||||||||||||||||||||
Impairment charges | |||||||||||||||||||||||
Other operating expense, net | |||||||||||||||||||||||
Operating income | |||||||||||||||||||||||
Interest expense, net | ( |
( |
( |
( |
|||||||||||||||||||
Loss on extinguishment of debt |
( |
||||||||||||||||||||||
Other income (expense), net | ( |
( |
|||||||||||||||||||||
Loss from continuing operations before income taxes | ( |
( |
( |
( |
|||||||||||||||||||
Income tax benefit attributable to continuing operations | |||||||||||||||||||||||
Loss from continuing operations | ( |
( |
( |
( |
|||||||||||||||||||
Consolidated net loss | ( |
( |
( |
( |
|||||||||||||||||||
Less: Net income attributable to noncontrolling interests | |||||||||||||||||||||||
Net loss attributable to the Company | $ | ( |
$ | ( |
$ | ( |
$ | ( |
|||||||||||||||
Net income (loss) attributable to the Company per share of common stock — Basic and Diluted: |
|||||||||||||||||||||||
Net loss from continuing operations attributable to the Company per share of common stock |
$ | ( |
$ | ( |
$ | ( |
$ | ( |
|||||||||||||||
Net income from discontinued operations attributable to the Company per share of common stock |
|||||||||||||||||||||||
Net loss attributable to the Company per share of common stock — Basic and Diluted(2)
|
$ | ( |
$ | ( |
$ | ( |
$ | ( |
|||||||||||||||
(1)Excludes depreciation and amortization
(2)Due to rounding, the total may not equal the sum of the line items in the table above.
See Condensed Notes to Consolidated Financial Statements
4
CLEAR CHANNEL OUTDOOR HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(UNAUDITED)
Three Months Ended | Six Months Ended | ||||||||||||||||||||||
(In thousands) | June 30, | June 30, | |||||||||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
Net loss attributable to the Company | $ | ( |
$ | ( |
$ | ( |
$ | ( |
|||||||||||||||
Other comprehensive loss: | |||||||||||||||||||||||
Foreign currency translation adjustments | ( |
( |
( |
( |
|||||||||||||||||||
Reclassification adjustment for realized gains from cumulative translation adjustments and pension related to sold businesses(1)
|
( |
( |
|||||||||||||||||||||
Other comprehensive loss | ( |
( |
( |
( |
|||||||||||||||||||
Comprehensive loss | ( |
( |
( |
( |
|||||||||||||||||||
Less: Comprehensive income (loss) attributable to noncontrolling interests | ( |
||||||||||||||||||||||
Comprehensive loss attributable to the Company | $ | ( |
$ | ( |
$ | ( |
$ | ( |
(1)Included in “ ” on Consolidated Statements of Loss
See Condensed Notes to Consolidated Financial Statements
5
CLEAR CHANNEL OUTDOOR HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT
(UNAUDITED)
Three Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||
Common Shares Issued | Non-controlling Interests |
Controlling Interest | Total Stockholders’ Deficit | ||||||||||||||||||||||||||||||||||||||||||||
(In thousands, except share data) | Common Stock |
Additional Paid-in Capital |
Accumulated Deficit |
Accumulated Other Comprehensive Loss | Treasury Stock | ||||||||||||||||||||||||||||||||||||||||||
Three Months Ended June 30, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||
Balances at March 31, 2024 | $ | $ | $ | $ | ( |
$ | ( |
$ | ( |
$ | ( |
||||||||||||||||||||||||||||||||||||
Net income (loss) | — | — | ( |
— | — | ( |
|||||||||||||||||||||||||||||||||||||||||
Release of stock-based awards and exercise of stock options |
— | ( |
— | — | ( |
( |
|||||||||||||||||||||||||||||||||||||||||
Share-based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Payments to noncontrolling interests, net | ( |
— | — | — | — | — | ( |
||||||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustments | — | — | — | ( |
— | ( |
|||||||||||||||||||||||||||||||||||||||||
Balances at June 30, 2024 | $ | $ | $ | $ | ( |
$ | ( |
$ | ( |
$ | ( |
Three Months Ended June 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||
Balances at March 31, 2023 | $ | $ | $ | $ | ( |
$ | ( |
$ | ( |
$ | ( |
||||||||||||||||||||||||||||||||||||
Net income (loss) | — | — | ( |
— | — | ( |
|||||||||||||||||||||||||||||||||||||||||
Release of stock-based awards and exercise of stock options |
— | ( |
— | — | ( |
( |
|||||||||||||||||||||||||||||||||||||||||
Share-based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Payments to noncontrolling interests, net | ( |
— | — | — | — | — | ( |
||||||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustments | — | — | — | — | ( |
— | ( |
||||||||||||||||||||||||||||||||||||||||
Disposition of business |
— | — | — | — | ( |
— | ( |
||||||||||||||||||||||||||||||||||||||||
Balances at June 30, 2023 | $ | $ | $ | $ | ( |
$ | ( |
$ | ( |
$ | ( |
Six Months Ended |
|||||||||||||||||||||||||||||||||||||||||||||||
Controlling Interest | Total Stockholders’ Deficit | ||||||||||||||||||||||||||||||||||||||||||||||
(In thousands, except share data) | Common Shares Issued | Non-controlling Interests | Common Stock |
Additional Paid-in Capital |
Accumulated Deficit |
Accumulated Other Comprehensive Loss | Treasury Stock | ||||||||||||||||||||||||||||||||||||||||
Six Months Ended June 30, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||
Balances at December 31, 2023 | $ | $ | $ | $ | ( |
$ | ( |
$ | ( |
$ | ( |
||||||||||||||||||||||||||||||||||||
Net income (loss) | — | — | ( |
— | — | ( |
|||||||||||||||||||||||||||||||||||||||||
Release of stock-based awards and exercise of stock options |
— | ( |
— | — | ( |
( |
|||||||||||||||||||||||||||||||||||||||||
Share-based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Payments to noncontrolling interests, net | ( |
— | — | — | — | — | ( |
||||||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustments | ( |
— | — | — | ( |
— | ( |
||||||||||||||||||||||||||||||||||||||||
Balances at June 30, 2024 | $ | $ | $ | $ | ( |
$ | ( |
$ | ( |
$ | ( |
Six Months Ended June 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||
Balances at December 31, 2022 | $ | $ | $ | $ | ( |
$ | ( |
$ | ( |
$ | ( |
||||||||||||||||||||||||||||||||||||
Net income (loss) | — | — | ( |
— | — | ( |
|||||||||||||||||||||||||||||||||||||||||
Release of stock-based awards and exercise of stock options |
— | ( |
— | — | ( |
( |
|||||||||||||||||||||||||||||||||||||||||
Share-based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Payments to noncontrolling interests, net | ( |
— | — | — | — | — | ( |
||||||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustments | — | — | — | ( |
— | ( |
|||||||||||||||||||||||||||||||||||||||||
Disposition of businesses |
— | — | — | — | ( |
— | ( |
||||||||||||||||||||||||||||||||||||||||
Balances at June 30, 2023 | $ | $ | $ | $ | ( |
$ | ( |
$ | ( |
$ | ( |
See Condensed Notes to Consolidated Financial Statements
6
CLEAR CHANNEL OUTDOOR HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(In thousands) | Six Months Ended June 30, | ||||||||||
2024 | 2023 | ||||||||||
Cash flows from operating activities: | |||||||||||
Consolidated net loss | $ | ( |
$ | ( |
|||||||
Reconciling items: | |||||||||||
Depreciation, amortization and impairment | |||||||||||
Non-cash operating lease expense | |||||||||||
Loss on extinguishment of debt and debt modification expense | |||||||||||
Deferred taxes | ( |
||||||||||
Share-based compensation | |||||||||||
Amortization of deferred financing charges and note discounts | |||||||||||
Credit loss expense | |||||||||||
Gain on disposition of businesses and/or operating assets, net |
( |
( |
|||||||||
Foreign exchange transaction gain | ( |
( |
|||||||||
Other reconciling items, net | ( |
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Changes in operating assets and liabilities, net of effects of dispositions: |
|||||||||||
Decrease in accounts receivable | |||||||||||
Decrease (increase) in prepaid expenses and other operating assets | ( |
||||||||||
Decrease in accounts payable and accrued expenses | ( |
( |
|||||||||
Decrease in operating lease liabilities | ( |
( |
|||||||||
(Decrease) increase in accrued interest | ( |
||||||||||
Increase in deferred revenue | |||||||||||
Decrease in other operating liabilities | ( |
( |
|||||||||
Net cash used for operating activities | ( |
( |
|||||||||
Cash flows from investing activities: | |||||||||||
Capital expenditures | ( |
( |
|||||||||
Asset acquisitions | ( |
( |
|||||||||
Net proceeds from disposition of businesses and/or assets |
|||||||||||
Other investing activities, net | ( |
( |
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Net cash (used for) provided by investing activities | ( |
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Cash flows from financing activities: | |||||||||||
Proceeds from long-term debt | |||||||||||
Payments on long-term debt | ( |
( |
|||||||||
Debt issuance and modification costs | ( |
( |
|||||||||
Taxes paid related to net share settlement of equity awards | ( |
( |
|||||||||
Payments to noncontrolling interests, net | ( |
( |
|||||||||
Net cash used for financing activities | ( |
( |
|||||||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash | ( |
||||||||||
Net decrease in cash, cash equivalents and restricted cash | ( |
( |
|||||||||
Cash, cash equivalents and restricted cash at beginning of period | |||||||||||
Cash, cash equivalents and restricted cash at end of period | $ | $ | |||||||||
Supplemental disclosures: | |||||||||||
Cash paid for interest | $ | $ | |||||||||
Cash paid for income taxes, net of refunds | $ | $ | |||||||||
See Condensed Notes to Consolidated Financial Statements
7
CLEAR CHANNEL OUTDOOR HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1 – BASIS OF PRESENTATION
Principles of Consolidation
These consolidated financial statements include the accounts of Clear Channel Outdoor Holdings, Inc. (“CCOH”) and its subsidiaries, as well as entities in which the Company has a controlling financial interest or for which the Company is the primary beneficiary. Intercompany transactions have been eliminated in consolidation. All references in this Quarterly Report on Form 10-Q to the “Company,” “we,” “us” and “our” refer to Clear Channel Outdoor Holdings, Inc. and its consolidated subsidiaries.
Preparation of Interim Financial Statements
The accompanying consolidated financial statements were prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial statements, and, in the opinion of management, include all normal and recurring adjustments necessary to present fairly the results of the interim periods shown. Due to seasonality and other factors, the results for the interim periods may not be indicative of results for the full year.
Pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”), certain information and footnote disclosures required by GAAP for annual financial statements have been condensed or omitted from these interim financial statements. Accordingly, the financial statements contained herein should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s 2023 Annual Report on Form 10-K, filed with the SEC on February 26, 2024.
Use of Estimates
The Company’s consolidated financial statements presented herein reflect estimates and assumptions made by management that affect the amounts reported in the consolidated financial statements and accompanying notes. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Actual results could differ from those estimates.
Discontinued Operations
As described in the Company’s 2023 Annual Report on Form 10-K, during the third quarter of 2023, the Company’s plan to sell the businesses comprising its Europe-South segment met the criteria to be reported as discontinued operations. In accordance with GAAP, assets and liabilities of discontinued operations are presented separately in the Consolidated Balance Sheets, and results of discontinued operations are reported as a separate component of “Consolidated net loss” in the Consolidated Statements of Loss, for all periods presented, resulting in changes to the presentation of certain prior period amounts. Cash flows from discontinued operations are not reported separately in the Consolidated Statements of Cash Flows.
NOTE 2 – DISPOSITIONS AND DISCONTINUED OPERATIONS
On March 31, 2023, the Company sold its former business in Switzerland for cash proceeds of $84.9 million (net of direct costs to transact the sale and cash sold) and recognized a gain on sale of $96.4 million. On May 31, 2023, the Company sold its former business in Italy for cash proceeds of $4.3 million (net of direct costs to transact the sale and cash sold) and recognized a gain on sale of $11.2 million. Gains related to these sales are included within “Income from discontinued operations” on the Consolidated Statements of Loss, and net cash proceeds are reflected within “Net proceeds from disposition of businesses and/or assets” in the investing activities section of the Consolidated Statement of Cash Flows.
In May 2023, the Company also entered into an agreement to sell its business in Spain, which is expected to close in 2024 upon receipt of regulatory approval and satisfaction of other customary closing conditions. Subsequently, in October 2023, the Company sold its former business in France. The Company’s business in Spain, together with its former businesses in Switzerland, Italy and France, comprised the Company’s entire Europe-South segment.
The Company concluded that, in aggregate, the sales of these businesses met the criteria for discontinued operations presentation in the third quarter of 2023. As a result, each of these businesses has been reclassified to discontinued operations in these financial statements for all periods presented.
8
CLEAR CHANNEL OUTDOOR HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
Assets and Liabilities of Discontinued Operations
As previously described, assets and liabilities of discontinued operations are presented separately in the Consolidated Balance Sheets for all periods presented. At June 30, 2024 and December 31, 2023, these balances consisted of assets and liabilities of the Company’s business in Spain, which are all classified as current as the sale of this business is expected to close in 2024.
The following table presents a reconciliation of the carrying amounts of the major classes of these assets and liabilities to the current assets and liabilities of discontinued operations as presented on the Company’s Consolidated Balance Sheets:
(In thousands) | June 30, 2024 |
December 31, 2023 |
|||||||||
Assets of discontinued operations: | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Accounts receivable, net | |||||||||||
Prepaid expenses and other current assets |
|||||||||||
Property, plant and equipment, net |
|||||||||||
Operating lease right-of-use assets | |||||||||||
Other assets | |||||||||||
Current assets of discontinued operations |
$ | $ | |||||||||
Liabilities of discontinued operations: | |||||||||||
Accounts payable and accrued expenses |
$ | $ | |||||||||
Operating lease liabilities | |||||||||||
Deferred revenue | |||||||||||
Other liabilities |
|||||||||||
Current liabilities of discontinued operations |
$ | $ |
Letters of Credit, Surety Bonds and Guarantees
A portion of the Company’s letters of credit and guarantees outstanding at June 30, 2024 related to discontinued operations, as follows:
•Related to the former business in France, the Company has a $20.2 million letter of credit. In connection with the sale of this business, and pursuant to the related share purchase agreement, the Company’s former French business and/or the buyer will either replace, or procure a counter-guarantee of, the Company’s payment obligation under the letter of credit. Additionally, the Company retains an indemnity of $15.7 million related to a surety bond held by the former business in France. The Company has been indemnified by the former French business for this amount and will be released from any remaining obligation by March 2025.
•Related to the business in Spain, the Company had a $6.5 million of letter of credit and $8.5 million of bank guarantees outstanding at June 30, 2024, a portion of which was supported by $0.7 million of cash collateral. These will remain obligations of the Company until the sale of this business closes or, if sooner, their expiration date.
9
CLEAR CHANNEL OUTDOOR HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
Income from Discontinued Operations
Discontinued operations for the three and six months ended June 30, 2024 consists of results from the Company’s business in Spain, whereas discontinued operations for the three and six months ended June 30, 2023 consists of results from the Company’s business in Spain and former businesses in Switzerland (through March 31, 2023), Italy (through May 31, 2023) and France.
The following table provides details about the major classes of line items constituting “ ” as presented on the Company’s Consolidated Statements of Loss:
Three Months Ended | Six Months Ended | ||||||||||||||||||||||
(In thousands) | June 30, | June 30, | |||||||||||||||||||||
2024 |
2023 |
2024 |
2023 |
||||||||||||||||||||
Revenue | $ | $ | $ | $ | |||||||||||||||||||
Expenses: |
|||||||||||||||||||||||
Direct operating expenses(1)
|
|||||||||||||||||||||||
Selling, general and administrative expenses(1),(2)
|
|||||||||||||||||||||||
Depreciation and amortization | |||||||||||||||||||||||
Other expense (income), net | ( |
( |
|||||||||||||||||||||
Income (loss) from discontinued operations before gain on disposal and income taxes |
( |
( |
|||||||||||||||||||||
Gain on disposal |
|||||||||||||||||||||||
Income tax benefit (expense) attributable to discontinued operations(3)
|
( |
||||||||||||||||||||||
Income from discontinued operations, net of income taxes |
$ | $ | $ | $ | |||||||||||||||||||
(1)Excludes depreciation and amortization.
(2)Certain costs that were historically allocated to the Company’s Europe-South segment and reported within selling, general and administrative expenses on the Consolidated Statement of Loss have been deemed to be costs of continuing operations and are now reported within corporate expenses on the Consolidated Statement of Loss. As such, amounts for prior periods totaling $1.0 million and $2.9 million for the three and six months ended June 30, 2023, respectively, have been reclassified to conform to the current period presentation.
(3)Most of the income tax expense attributable to discontinued operations for the six months ended June 30, 2023 was driven by the sale of the Company’s former business in Switzerland.
Capital Expenditures of Discontinued Operations
The following table presents the capital expenditures for discontinued operations for the three and six months ended June 30, 2024 and 2023:
Three Months Ended | Six Months Ended | ||||||||||||||||||||||
(In thousands) | June 30, | June 30, | |||||||||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
Capital expenditures(1)
|
$ | $ | $ | $ |
(1)In addition to payments that occurred during the period for capital expenditures, the Company had $1.2 million and $3.5 million of accrued capital expenditures related to discontinued operations that remained unpaid as of June 30, 2024 and 2023, respectively.
10
CLEAR CHANNEL OUTDOOR HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 3 – SEGMENT DATA
The Company has four reportable segments, which it believes best reflect how the Company is currently managed: America, Airports, Europe-North and Europe-South. The Company's remaining operations in Latin America and Singapore are disclosed as “Other.” As described in Note 2, the Company’s Europe-South segment met the criteria to be reported as discontinued operations during the third quarter of 2023. As such, results of this segment are excluded from the table below, which only reflects continuing operations, for all periods presented.
Segment Adjusted EBITDA is the profitability metric reported to the Company’s chief operating decision maker (“CODM”) for purposes of making decisions about allocation of resources to, and assessing performance of, each reportable segment. Segment Adjusted EBITDA is calculated as revenue less direct operating expenses and selling, general and administrative expenses, excluding restructuring and other costs, which are defined as costs associated with cost-saving initiatives such as severance, consulting and termination costs and other special costs. Segment information for total assets is not presented as this information is not used by the Company’s CODM in measuring segment performance or allocating resources between segments.
The following table presents the Company’s reportable segment results for continuing operations for the three and six months ended June 30, 2024 and 2023:
(In thousands) | Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
Revenue | |||||||||||||||||||||||
America | $ | $ | $ | $ | |||||||||||||||||||
Airports | |||||||||||||||||||||||
Europe-North | |||||||||||||||||||||||
Other | |||||||||||||||||||||||
Total | $ | $ | $ | $ | |||||||||||||||||||
Capital Expenditures(1)
|
|||||||||||||||||||||||
America | $ | $ | $ | $ | |||||||||||||||||||
Airports | |||||||||||||||||||||||
Europe-North | |||||||||||||||||||||||
Other | |||||||||||||||||||||||
Corporate | |||||||||||||||||||||||
Total | $ | $ | $ | $ | |||||||||||||||||||
Segment Adjusted EBITDA | |||||||||||||||||||||||
America | $ | $ | $ | $ | |||||||||||||||||||
Airports | |||||||||||||||||||||||
Europe-North | |||||||||||||||||||||||
Other | |||||||||||||||||||||||
Total | $ | $ | $ | $ | |||||||||||||||||||
11
CLEAR CHANNEL OUTDOOR HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(In thousands) | Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
Reconciliation of Segment Adjusted EBITDA to Loss From Continuing Operations Before Income Taxes | |||||||||||||||||||||||
Segment Adjusted EBITDA | $ | $ | $ | $ | |||||||||||||||||||
Less reconciling items: | |||||||||||||||||||||||
Corporate expenses(2)
|
|||||||||||||||||||||||
Depreciation and amortization | |||||||||||||||||||||||
Impairment charges | |||||||||||||||||||||||
Restructuring and other costs(3)
|
|||||||||||||||||||||||
Other operating expense, net | |||||||||||||||||||||||
Interest expense, net | |||||||||||||||||||||||
Loss on extinguishment of debt | |||||||||||||||||||||||
Other (income) expense, net | ( |
( |
|||||||||||||||||||||
Loss from continuing operations before income taxes | $ | ( |
$ | ( |
$ | ( |
$ | ( |
(1)In addition to payments that occurred during the period for capital expenditures, the Company had $10.3 million and $10.9 million of accrued capital expenditures related to continuing operations that remained unpaid as of June 30, 2024 and 2023, respectively.
(2)Corporate expenses include expenses related to infrastructure and support, including information technology, human resources, legal (including estimated costs for legal liabilities), finance and administrative functions of each of the Company’s reportable segments, as well as overall executive, administrative and support functions. Share-based payments and certain restructuring and other costs are recorded in corporate expenses.
(3)The restructuring and other costs line item in this reconciliation excludes those restructuring and other costs related to corporate functions, which are included within the Corporate expenses line item.
12
CLEAR CHANNEL OUTDOOR HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 4 – REVENUE
The Company generates revenue primarily from the sale of advertising on printed and digital out-of-home advertising displays. Certain of these revenue transactions are considered leases for accounting purposes as the contracts convey to customers the right to control the use of the Company’s advertising displays for a period of time. The Company accounts for revenue from leases in accordance with Accounting Standards Codification (“ASC”) Topic 842, while the Company’s remaining revenue transactions are accounted for as revenue from contracts with customers in accordance with ASC Topic 606.
Disaggregation of Revenue
The following table shows revenue from contracts with customers, revenue from leases and total revenue from continuing operations, disaggregated by geography, for the three and six months ended June 30, 2024 and 2023:
(In thousands) | Revenue from contracts with customers | Total revenue | |||||||||||||||
Three Months Ended June 30, 2024 | |||||||||||||||||
U.S.(1)
|
$ | $ | $ | ||||||||||||||
Europe(2)
|
|||||||||||||||||
Other(3)
|
|||||||||||||||||
Total | $ | $ | $ | ||||||||||||||
Three Months Ended June 30, 2023 | |||||||||||||||||
U.S.(1)
|
$ | $ | $ | ||||||||||||||
Europe(2)
|
|||||||||||||||||
Other(3)
|
|||||||||||||||||
Total | $ | $ | $ | ||||||||||||||
Six Months Ended June 30, 2024 | |||||||||||||||||
U.S.(1)
|
$ | $ | $ | ||||||||||||||
Europe(2)
|
|||||||||||||||||
Other(3)
|
|||||||||||||||||
Total | $ | $ | $ | ||||||||||||||
Six Months Ended June 30, 2023 | |||||||||||||||||
U.S.(1)
|
$ | $ | $ | ||||||||||||||
Europe(2)
|
|||||||||||||||||
Other(3)
|
|||||||||||||||||
Total | $ | $ | $ |
(1)U.S. revenue, which also includes an immaterial amount of revenue derived from airport displays in the Caribbean, is comprised of revenue from the Company’s America and Airports segments.
(2)Europe revenue is comprised of revenue from the Company’s Europe-North segment.
(3)Other includes the Company’s businesses in Latin America and Singapore.
13
CLEAR CHANNEL OUTDOOR HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
Revenue from Contracts with Customers
The following table shows the Company’s beginning and ending accounts receivable and deferred revenue balances from contracts with customers:
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
(In thousands) | 2024 |
2023 | 2024 |
2023 | |||||||||||||||||||
Accounts receivable, net of allowance, from contracts with customers: | |||||||||||||||||||||||
Beginning balance | $ | $ | $ | $ | |||||||||||||||||||
Ending balance | |||||||||||||||||||||||
Deferred revenue from contracts with customers: | |||||||||||||||||||||||
Beginning balance | $ | $ | $ | $ | |||||||||||||||||||
Ending balance |
During the three months ended June 30, 2024 and 2023, respectively, the Company recognized $26.3 million and $33.6 million of revenue that was included in the deferred revenue from contracts with customers balance at the beginning of the respective quarters. During the six months ended June 30, 2024 and 2023, respectively, the Company recognized $21.3 million and $20.7 million of revenue that was included in the deferred revenue from contracts with customers balance at the beginning of the respective years.
The Company’s contracts with customers generally have terms of one year or less. As of June 30, 2024, the Company expected to recognize $92.5 million of revenue in future periods for remaining performance obligations from current contracts with customers that have an original expected duration of greater than one year, with the majority of this amount to be recognized over the next five years .
14
CLEAR CHANNEL OUTDOOR HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 5 – LONG-TERM DEBT
Long-term debt outstanding as of June 30, 2024 and December 31, 2023 consisted of the following:
(In thousands) | Maturity |
June 30, 2024 |
December 31, 2023 |
||||||||||||||
Receivables-Based Credit Facility |
August 2026 | $ | $ | ||||||||||||||
Revolving Credit Facility |
August 2026 | ||||||||||||||||
Term Loan Facility(1)
|
August 2028 | ||||||||||||||||
Clear Channel Outdoor Holdings |
August 2027 | ||||||||||||||||
Clear Channel Outdoor Holdings |
September 2028 | ||||||||||||||||
Clear Channel Outdoor Holdings |
April 2030 | ||||||||||||||||
Clear Channel Outdoor Holdings |
April 2028 | ||||||||||||||||
Clear Channel Outdoor Holdings |
June 2029 | ||||||||||||||||
Clear Channel International B.V. |
August 2025 | ||||||||||||||||
Clear Channel International B.V. Term Loan Facility(2)
|
April 2027 | ||||||||||||||||
Finance leases |
|||||||||||||||||
Original issue discount | ( |
( |
|||||||||||||||
Long-term debt fees | ( |
( |
|||||||||||||||
Total debt | |||||||||||||||||
Less: Current portion |
|||||||||||||||||
Total long-term debt | $ | $ |
(1)On March 18, 2024, the Company issued $865.0 million aggregate principal amount of 7.875 % Senior Secured Notes Due 2030 (the “CCOH 7.875 % Senior Secured Notes”) and used a portion of the proceeds therefrom to prepay $835.0 million of borrowings outstanding under the Term Loan Facility. At the same time, the Company amended its Senior Secured Credit Agreement to, among other things, refinance the $425.0 million remaining principal balance on the Term Loan Facility and to extend its maturity date from 2026 to 2028, subject to certain conditions. The new refinanced term loans were issued at a 1 % discount, and the Company used the proceeds therefrom, along with the remaining proceeds from the CCOH 7.875 % Senior Secured Notes issuance and cash on hand, to pay off the original term loans, $14.9 million of accrued interest on the prepaid and refinanced Term Loan principal and $14.6 million of fees and expenses related to these transactions. At June 30, 2024, the Company had an accrual of $0.7 million for unpaid fees and expenses. Related to these transactions, the Company recognized a loss on debt extinguishment of $2.4 million and debt modification expense of $10.0 million.
(2)On March 22, 2024, the Company’s indirect wholly-owned subsidiary, Clear Channel International B.V. (“CCIBV”), entered into a credit agreement comprising two tranches of term loans (the “CCIBV Term Loan Facility”) totaling an aggregate principal amount of $375.0 million, which was issued at a 1 % discount. The Company used the proceeds therefrom, along with cash on hand, to redeem all of the outstanding $375.0 million aggregate principal amount of 6.625 % Senior Secured Notes Due 2025 (the “CCIBV Senior Secured Notes”) and to pay $11.8 million of accrued interest related thereto and $4.2 million of related transaction fees and expenses. At June 30, 2024, the Company had an accrual of $1.6 million for unpaid fees and expenses. Related to this transaction, the Company recognized a loss on debt extinguishment of $2.4 million and debt modification expense of $2.0 million. As a result of this redemption, CCIBV and the guarantors of the CCIBV Senior Secured Notes have been released from their remaining obligations under the indenture governing such notes, and such indenture has ceased to be of further effect.
The aggregate market value of the Company’s debt based on market prices for which quotes were available was approximately $5.4 billion and $5.3 billion as of June 30, 2024 and December 31, 2023, respectively. Under the fair value hierarchy established by ASC Section 820-10-35, the inputs used to determine the market value of the Company’s debt are classified as Level 1.
As of June 30, 2024, the Company was in compliance with all covenants contained in its debt agreements.
Amendment to Senior Secured Credit Facilities
On March 18, 2024, the Senior Secured Credit Agreement, which governs the Company’s Term Loan Facility and Revolving Credit Facility, was amended to, among other things: extend the maturity date of the Term Loan Facility to August 23, 2028, subject to certain conditions; increase the Applicable Rate (as defined therein) for the Term Loan Facility by 50 basis points; and provide for a prepayment penalty in certain circumstances. These amendments are reflected in the information below.
15
CLEAR CHANNEL OUTDOOR HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
Maturity
The term loans under the Term Loan Facility amortize in equal quarterly installments in an aggregate annual amount equal to 1.00 % of the original principal amount of such term loans. In August 2023, the Company made a prepayment that satisfied the remaining quarterly payment obligations, and the remaining balance is payable on August 23, 2028, subject to certain conditions.
Prepayments
The Senior Secured Credit Agreement, as amended, provides for a prepayment penalty of 1.00 % for certain prepayments of, or amendments to, the Term Loan Facility effected on or prior to September 18, 2024. Thereafter, the Company may voluntarily repay outstanding term loans under the Senior Secured Credit Facilities without penalty.
CCOH 7.875 % Senior Secured Notes Due 2030
On March 18, 2024, the Company completed the sale of $865.0 million in aggregate principal amount of the CCOH 7.875 % Senior Secured Notes. The CCOH 7.875 % Senior Secured Notes were issued pursuant to an indenture, dated as of March 18, 2024 (the “CCOH 7.875 % Senior Secured Notes Indenture”), among the Company, the subsidiaries of the Company acting as guarantors party thereto and U.S. Bank Trust Company, National Association, as trustee and as collateral agent.
The CCOH 7.875 % Senior Secured Notes mature on April 1, 2030 and bear interest at a rate of 7.875 % per annum. Interest on the CCOH 7.875 % Senior Secured Notes is payable to the holders thereof semi-annually on April 1 and October 1 of each year, beginning on October 1, 2024.
Guarantees and Security
The CCOH 7.875 % Senior Secured Notes are guaranteed fully and unconditionally on a senior secured basis by certain of the Company’s wholly-owned existing and future domestic subsidiaries.
The CCOH 7.875 % Senior Secured Notes and the guarantees thereof are secured on a first-priority basis by security interests in all of the Company’s and the guarantors’ assets securing the Senior Secured Credit Facilities, subject to certain exceptions, on a pari passu basis with the liens on such assets (other than the assets securing the Company’s Receivables-Based Credit Facility), and on a second-priority basis by security interests in all of the Company’s and the guarantors’ assets securing the Company’s Receivables-Based Credit Facility on a first-priority basis, in each case, other than any excluded assets and subject to intercreditor agreements.
The CCOH 7.875 % Senior Secured Notes and the guarantees are general senior secured obligations of the Company and the guarantors thereof and rank pari passu in right of payment with the Company’s and the guarantors’ existing and future senior indebtedness.
Redemptions
The Company may redeem all or a portion of the CCOH 7.875 % Senior Secured Notes at the redemption prices set forth in the CCOH 7.875 % Senior Secured Notes Indenture.
Certain Covenants
The CCOH 7.875 % Senior Secured Notes Indenture contains covenants that limit the Company’s ability and the ability of its restricted subsidiaries to, among other things: incur or guarantee additional debt or issue certain preferred stock; redeem, purchase or retire subordinated debt; make certain investments; create restrictions on the payment of dividends or other amounts from the Company’s restricted subsidiaries that are not guarantors of the debt; enter into certain transactions with affiliates; merge or consolidate with another person or sell or otherwise dispose of all or substantially all of the Company’s assets; sell certain assets, including capital stock of the Company’s subsidiaries; designate the Company’s subsidiaries as unrestricted subsidiaries; pay dividends, redeem or repurchase capital stock or make other restricted payments; and incur certain liens.
CCIBV Term Loan Facility Due 2027
On March 22, 2024 (the “Closing Date”), CCIBV entered into a credit agreement (the “CCIBV Credit Agreement”) with JPMorgan Chase Bank, N.A., as administrative agent and collateral agent, and J.P. Morgan SE, as lead arranger and bookrunner. The CCIBV Credit Agreement governs the CCIBV Term Loan Facility and the term loans incurred thereunder.
16
CLEAR CHANNEL OUTDOOR HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
Size and Availability
The CCIBV Term Loan Facility is comprised of two tranches of term loans totaling an aggregate principal amount of $375.0 million: (1) a “fixed rate” tranche of term loans in an aggregate principal amount of $300.0 million (the “Fixed Rate Term Loan Tranche”); and (2) a “floating rate” tranche of term loans in an aggregate principal amount of $75.0 million (the “Floating Rate Term Loan Tranche”).
Interest Rate
The CCIBV Term Loan Facility bears interest: (1) at a fixed rate of 7.5 % per annum, payable semi-annually in arrears on April 1 and October 1 of each year for the Fixed Rate Term Loan Tranche and (2) at a floating rate equal to the benchmark rate “Term SOFR” plus 2.25 % per annum (subject to a floor rate of 5.25 % per annum), payable at one-, three- or six- month intervals, effective April 1, 2024 for the Floating Rate Term Loan Tranche.
Amortization and Maturity
The CCIBV Term Loan Facility matures on April 1, 2027 and has no scheduled amortization payments prior to this date.
Prepayments
The CCIBV Credit Agreement requires CCIBV to make certain mandatory prepayments, subject to certain requirements and exceptions, and permits CCIBV to make voluntary prepayments at its discretion. The Fixed Rate Term Loan Tranche and the Floating Rate Term Loan Tranche will participate in any voluntary or mandatory repayments or prepayments on a pro rata basis.
Guarantees and Security
The CCIBV Term Loan Facility is fully guaranteed by certain of CCIBV’s subsidiaries. The Company does not guarantee and has not otherwise assumed any liability under the CCIBV Term Loan Facility. The CCIBV Term Loan Facility and certain of the guarantees thereunder (the “Secured Guarantees”) are secured by security interests in, and pledges over, certain assets and property (including, without limitation, capital stock, material bank accounts and intercompany receivables) of or in CCIBV and its guarantors (the “Security Interests”), in each case subject to certain agreed security principles, permitted liens and other customary exceptions and qualifications.
The CCIBV Term Loan Facility is a senior secured obligation that ranks, in right of payment, pari passu to all unsubordinated indebtedness of CCIBV and senior to all subordinated indebtedness of CCIBV and ranks, in right of security, senior to all unsecured and junior lien indebtedness of CCIBV to the extent of the value of the assets that constitute collateral after giving effect to the Security Interests and the Secured Guarantees. The guarantees that are not Secured Guarantees are unsecured senior obligations that rank, in right of payment, pari passu to all unsubordinated indebtedness of the guarantors and senior to all subordinated indebtedness of the guarantors and rank, in right of security, junior to all secured indebtedness of the guarantors to the extent of the value of the assets securing such indebtedness and pari passu to all unsecured indebtedness of the guarantors.
Certain Covenants
The CCIBV Credit Agreement contains covenants that limit CCIBV’s ability and the ability of its restricted subsidiaries to, among other things (but subject to certain exceptions): pay dividends, redeem stock or make other distributions or investments; incur additional debt or issue certain preferred stock; transfer or sell assets; create liens on assets; engage in certain transactions with affiliates; create restrictions on dividends or other payments by the restricted subsidiaries; and merge, consolidate or effect other fundamental changes to CCIBV’s assets.
Letters of Credit, Surety Bonds and Guarantees
The Company has letters of credit, surety bonds and bank guarantees related to various operational matters, including insurance, bid, concession and performance bonds, as well as other items.
As of June 30, 2024, the Company had $43.2 million of letters of credit outstanding under its Revolving Credit Facility, resulting in $106.8 million of remaining excess availability, and $49.8 million of letters of credit outstanding under its Receivables-Based Credit Facility, resulting in $108.2 million of excess availability. Additionally, as of June 30, 2024, the Company had $41.6 million and $24.8 million of surety bonds and bank guarantees outstanding, respectively, a portion of which was supported by $5.2 million of cash collateral.
A portion of these letters of credit and guarantees at June 30, 2024 related to discontinued operations that were sold or held for sale as of this date. Please refer to Note 2 for additional information.
17
CLEAR CHANNEL OUTDOOR HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 6 – COMMITMENTS AND CONTINGENCIES
Legal Proceedings
The Company and its subsidiaries are involved in certain legal proceedings arising in the ordinary course of business and, as required, have accrued an estimate of the probable costs for the resolution of those claims for which the occurrence of loss is probable and the amount can be reasonably estimated. These estimates have been developed in consultation with counsel and are based upon an analysis of potential results, assuming a combination of litigation and settlement strategies. It is possible, however, that future results of operations for any particular period could be materially affected by changes in the Company’s assumptions or the effectiveness of its strategies related to these proceedings. Additionally, due to the inherent uncertainty of litigation, there can be no assurance that the resolution of any particular claim or proceeding would not have a material adverse effect on the Company’s financial condition or results of operations.
Although the Company is involved in a variety of legal proceedings in the ordinary course of business, a large portion of the Company’s litigation arises in the following contexts: commercial disputes, employment- and benefits-related claims, land use and zoning disputes, governmental fines, intellectual property claims, personal injury claims and tax disputes.
NOTE 7 – INCOME TAXES
Income Tax Benefit Attributable to Continuing Operations
The Company’s income tax benefit attributable to continuing operations for the three and six months ended June 30, 2024 and 2023 consisted of the following components:
(In thousands) | Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
Current tax expense attributable to continuing operations | $ | ( |
$ | ( |
$ | ( |
$ | ( |
|||||||||||||||
Deferred tax benefit attributable to continuing operations | |||||||||||||||||||||||
Income tax benefit attributable to continuing operations | $ | $ | $ | $ |
The effective tax rates for continuing operations for the three and six months ended June 30, 2024 were 4.8 % and 1.6 %, respectively, compared to 3.2 % and 8.2 % for the three and six months ended June 30, 2023, respectively. The effective tax rates for each period were primarily impacted by the valuation allowance recorded against current period deferred tax assets resulting from losses and interest expense carryforwards in the U.S. and certain foreign jurisdictions due to uncertainty regarding the Company’s ability to realize those assets in future periods.
NOTE 8 – PROPERTY, PLANT AND EQUIPMENT
The Company’s property, plant and equipment consisted of the following classes of assets as of June 30, 2024 and December 31, 2023:
(In thousands) | June 30, 2024 |
December 31, 2023 |
|||||||||
Structures(1)
|
$ | $ | |||||||||
Furniture and other equipment | |||||||||||
Land, buildings and improvements |
|||||||||||
Construction in progress | |||||||||||
Property, plant and equipment, gross | |||||||||||
Less: Accumulated depreciation | ( |
( |
|||||||||
Property, plant and equipment, net |
$ | $ |
(1)During the six months ended June 30, 2024, the Company acquired digital billboard structures of $1.1 million as part of asset acquisitions.
As a result of impairment tests performed in the second quarter of 2024, the Company reduced the carrying value of “Property, plant and equipment, net” by $8.1 million. Refer to Note 11 for more information.
18
CLEAR CHANNEL OUTDOOR HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 9 – INTANGIBLE ASSETS AND GOODWILL
Intangible Assets
The following table presents the gross carrying amount and accumulated amortization for each major class of intangible assets as of June 30, 2024 and December 31, 2023:
(In thousands) | June 30, 2024 | December 31, 2023 | |||||||||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Gross Carrying Amount | Accumulated Amortization | ||||||||||||||||||||
Permits(1)
|
$ | $ | ( |
$ | $ | ( |
|||||||||||||||||
Transit, street furniture and other outdoor contractual rights | ( |
( |
|||||||||||||||||||||
Permanent easements(1)
|
|||||||||||||||||||||||
Trademarks | ( |
( |
|||||||||||||||||||||
Other | ( |
( |
|||||||||||||||||||||
Total intangible assets | $ | $ | ( |
$ | $ | ( |
(1)During the six months ended June 30, 2024, the Company acquired permits of $7.7 million and permanent easements of $0.2 million as part of asset acquisitions. The acquired permits have amortization periods ranging from 22 to 28 years.
Goodwill
The following table presents changes in the goodwill balance for the Company’s segments with goodwill during the six months ended June 30, 2024:
(In thousands) | America | Airports | Europe-North | Consolidated | |||||||||||||||||||
Balance as of December 31, 2023(1)
|
$ | $ | $ | $ | |||||||||||||||||||
Foreign currency impact | ( |
( |
|||||||||||||||||||||
Balance as of June 30, 2024 | $ | $ | $ | $ |
(1)The balance at December 31, 2023 is net of cumulative impairments of $2.6 billion for America, $79.4 million for Europe-North and $90.4 million for Other, which has been fully impaired.
19
CLEAR CHANNEL OUTDOOR HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 10 – NET LOSS PER SHARE
The following table presents the computation of net loss per share for the three and six months ended June 30, 2024 and 2023:
(In thousands, except per share data) | Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
Numerators: |
|||||||||||||||||||||||
Loss from continuing operations | $ | ( |
$ | ( |
$ | ( |
$ | ( |
|||||||||||||||
Less: Net income from continuing operations attributable to noncontrolling interests | |||||||||||||||||||||||
Net loss from continuing operations attributable to the Company | ( |
( |
( |
( |
|||||||||||||||||||
Less: Net income from discontinued operations attributable to noncontrolling interests | |||||||||||||||||||||||
Net income from discontinued operations attributable to the Company | |||||||||||||||||||||||
Net loss attributable to the Company | $ | ( |
$ | ( |
$ | ( |
$ | ( |
|||||||||||||||
Denominators: |
|||||||||||||||||||||||
Weighted average common shares outstanding – Basic | |||||||||||||||||||||||
Weighted average common shares outstanding – Diluted | |||||||||||||||||||||||
Net income (loss) attributable to the Company per share of common stock — Basic and Diluted: |
|||||||||||||||||||||||
Net loss from continuing operations attributable to the Company per share of common stock | $ | ( |
$ | ( |
$ | ( |
$ | ( |
|||||||||||||||
Net income from discontinued operations attributable to the Company per share of common stock | |||||||||||||||||||||||
Net loss attributable to the Company per share of common stock — Basic and Diluted(1)
|
$ | ( |
$ | ( |
$ | ( |
$ | ( |
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(1)Due to rounding, the total may not equal the sum of the line items in the table above.
Outstanding equity awards equivalent to 27.9 million and 20.5 million shares for the three months ended June 30, 2024 and 2023, respectively, and 28.2 million and 19.8 million shares for the six months ended June 30, 2024 and 2023, respectively, were not included in the computation of diluted earnings per share because to do so would have been anti-dilutive.
20
CLEAR CHANNEL OUTDOOR HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 11 — OTHER INFORMATION
Reconciliation of Cash, Cash Equivalents and Restricted Cash
The following table reconciles cash and cash equivalents reported in the Consolidated Balance Sheets to the cash, cash equivalents and restricted cash reported in the Consolidated Statements of Cash Flows:
(In thousands) | June 30, 2024 |
December 31, 2023 |
|||||||||
Cash and cash equivalents in the Balance Sheets | $ | $ | |||||||||
Cash and cash equivalents included in Current assets of discontinued operations |
|||||||||||
Restricted cash included in: | |||||||||||
Other current assets | |||||||||||
Current assets of discontinued operations |
|||||||||||
Other assets | |||||||||||
Total cash, cash equivalents and restricted cash in the Statements of Cash Flows | $ |