UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBERJUNE 30, 20212022
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO
Commission File Number
001-32663
CLEAR CHANNEL OUTDOOR HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
| | | | | | | | | | | |
| Delaware | | 88-0318078 |
| (State or other jurisdiction of incorporation or organization) | | (I.R.S. Employer Identification No.) |
|
| 4830 North Loop 1604 West, | Suite 111 | | |
| San Antonio, | Texas | | 78249 |
| (Address of principal executive offices) | | (Zip Code) |
|
| (210) | 547-8800 |
| (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 Exchange on Which Registered |
| Common Stock, $0.01 par value per share | CCO | New York Stock Exchange |
Preferred Stock Purchase Rights | | New York Stock Exchange |
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 NovemberAugust 4, 20212022 |
| - - - - - - - - - - - - - - - - - - - - - - - - - - | - - - - - - - - - - - - - - - - - - - - - - - - - - |
| Common Stock, $0.01 par value per share | 470,703,669476,151,123 |
CLEAR CHANNEL OUTDOOR HOLDINGS, INC.
TABLE OF CONTENTS
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| | Page Number |
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| 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. | | |
| | |
| | |
PART I – FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CLEAR CHANNEL OUTDOOR HOLDINGS, INC. AND SUBSIDIARIES
INDEX TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
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| Page Number |
| Financial Statements: | |
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| Condensed Notes to Consolidated Financial Statements: | |
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CLEAR CHANNEL OUTDOOR HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
| | (In thousands, except share and per share data) | (In thousands, except share and per share data) | September 30,
2021 | | December 31,
2020 | (In thousands, except share and per share data) | June 30,
2022 | | December 31,
2021 |
| | | (Unaudited) | | | | (Unaudited) | | |
| CURRENT ASSETS | CURRENT ASSETS | | | | CURRENT ASSETS | | | |
| Cash and cash equivalents | Cash and cash equivalents | $ | 599,999 | | | $ | 785,308 | | Cash and cash equivalents | $ | 314,616 | | | $ | 410,767 | |
| | Accounts receivable, net | Accounts receivable, net | 537,258 | | | 468,329 | | Accounts receivable, net | 584,831 | | | 643,116 | |
| Prepaid expenses | Prepaid expenses | 53,550 | | | 49,509 | | Prepaid expenses | 55,773 | | | 54,180 | |
| Other current assets | Other current assets | 29,569 | | | 31,614 | | Other current assets | 27,312 | | | 26,458 | |
| | Total Current Assets | Total Current Assets | 1,220,376 | | | 1,334,760 | | Total Current Assets | 982,532 | | | 1,134,521 | |
| PROPERTY, PLANT AND EQUIPMENT | PROPERTY, PLANT AND EQUIPMENT | | | PROPERTY, PLANT AND EQUIPMENT | | |
| Structures, net | Structures, net | 597,051 | | | 688,947 | | Structures, net | 577,524 | | | 622,738 | |
| Other property, plant and equipment, net | Other property, plant and equipment, net | 187,284 | | | 199,877 | | Other property, plant and equipment, net | 199,769 | | | 204,508 | |
| INTANGIBLE ASSETS AND GOODWILL | INTANGIBLE ASSETS AND GOODWILL | | | | INTANGIBLE ASSETS AND GOODWILL | | | |
| Indefinite-lived permits | Indefinite-lived permits | 707,967 | | | 826,528 | | Indefinite-lived permits | 707,643 | | | 717,666 | |
| Other intangible assets, net | Other intangible assets, net | 280,273 | | | 292,751 | | Other intangible assets, net | 259,952 | | | 271,448 | |
| Goodwill | Goodwill | 699,910 | | | 709,637 | | Goodwill | 684,361 | | | 698,704 | |
| OTHER ASSETS | OTHER ASSETS | | OTHER ASSETS | |
| Operating lease right-of-use assets | Operating lease right-of-use assets | 1,603,965 | | | 1,632,664 | | Operating lease right-of-use assets | 1,561,364 | | | 1,567,468 | |
| Other assets | Other assets | 68,512 | | | 70,109 | | Other assets | 81,042 | | | 82,302 | |
| Total Assets | Total Assets | $ | 5,365,338 | | | $ | 5,755,273 | | Total Assets | $ | 5,054,187 | | | $ | 5,299,355 | |
| CURRENT LIABILITIES | CURRENT LIABILITIES | | | | CURRENT LIABILITIES | | | |
| Accounts payable | Accounts payable | $ | 99,236 | | | $ | 101,159 | | Accounts payable | $ | 90,397 | | | $ | 108,567 | |
| Accrued expenses | Accrued expenses | 456,035 | | | 444,492 | | Accrued expenses | 438,233 | | | 523,364 | |
| Current operating lease liabilities | Current operating lease liabilities | 329,819 | | | 343,793 | | Current operating lease liabilities | 298,462 | | | 316,692 | |
| Accrued interest | Accrued interest | 108,886 | | | 115,053 | | Accrued interest | 69,853 | | | 66,444 | |
| Deferred revenue | Deferred revenue | 94,438 | | | 64,313 | | Deferred revenue | 98,680 | | | 76,712 | |
| Current portion of long-term debt | Current portion of long-term debt | 21,160 | | | 21,396 | | Current portion of long-term debt | 21,051 | | | 21,165 | |
| | Total Current Liabilities | Total Current Liabilities | 1,109,574 | | | 1,090,206 | | Total Current Liabilities | 1,016,676 | | | 1,112,944 | |
| NON-CURRENT LIABILITIES | NON-CURRENT LIABILITIES | | NON-CURRENT LIABILITIES | |
| Long-term debt | Long-term debt | 5,716,742 | | | 5,550,890 | | Long-term debt | 5,575,769 | | | 5,583,788 | |
| Non-current operating lease liabilities | Non-current operating lease liabilities | 1,316,338 | | | 1,341,759 | | Non-current operating lease liabilities | 1,310,405 | | | 1,310,917 | |
| Deferred tax liabilities, net | Deferred tax liabilities, net | 326,326 | | | 356,269 | | Deferred tax liabilities, net | 342,410 | | | 324,579 | |
| Other long-term liabilities | Other long-term liabilities | 184,182 | | | 198,751 | | Other long-term liabilities | 151,177 | | | 161,097 | |
| Total Liabilities | Total Liabilities | 8,653,162 | | | 8,537,875 | | Total Liabilities | 8,396,437 | | | 8,493,325 | |
| | Commitments and Contingencies (Note 5) | Commitments and Contingencies (Note 5) | 0 | | 0 | Commitments and Contingencies (Note 5) | 0 | | 0 |
| | STOCKHOLDERS’ DEFICIT | STOCKHOLDERS’ DEFICIT | | STOCKHOLDERS’ DEFICIT | |
| Noncontrolling interest | Noncontrolling interest | 9,693 | | | 10,855 | | Noncontrolling interest | 11,289 | | | 11,060 | |
| Common stock, par value $0.01 per share: 2,350,000,000 shares authorized (474,279,094 shares issued as of September 30, 2021; 468,703,164 shares issued as of December 31, 2020) | 4,743 | | | 4,687 | | |
| Common stock, par value $0.01 per share: 2,350,000,000 shares authorized (482,887,254 shares issued as of June 30, 2022; 474,480,862 shares issued as of December 31, 2021) | | Common stock, par value $0.01 per share: 2,350,000,000 shares authorized (482,887,254 shares issued as of June 30, 2022; 474,480,862 shares issued as of December 31, 2021) | 4,829 | | | 4,745 | |
| Additional paid-in capital | Additional paid-in capital | 3,517,302 | | | 3,502,991 | | Additional paid-in capital | 3,533,873 | | | 3,522,367 | |
| Accumulated deficit | Accumulated deficit | (6,437,298) | | | (5,939,534) | | Accumulated deficit | (6,528,881) | | | (6,373,349) | |
| Accumulated other comprehensive loss | Accumulated other comprehensive loss | (374,607) | | | (358,520) | | Accumulated other comprehensive loss | (345,474) | | | (350,950) | |
| Treasury stock (3,613,482 shares held as of September 30, 2021; 1,360,252 shares held as of December 31, 2020) | (7,657) | | | (3,081) | | |
| Treasury stock (6,759,177 shares held as of June 30, 2022; 3,671,788 shares held as of December 31, 2021) | | Treasury stock (6,759,177 shares held as of June 30, 2022; 3,671,788 shares held as of December 31, 2021) | (17,886) | | | (7,843) | |
| Total Stockholders' Deficit | Total Stockholders' Deficit | (3,287,824) | | | (2,782,602) | | Total Stockholders' Deficit | (3,342,250) | | | (3,193,970) | |
| Total Liabilities and Stockholders' Deficit | Total Liabilities and Stockholders' Deficit | $ | 5,365,338 | | | $ | 5,755,273 | | Total Liabilities and Stockholders' Deficit | $ | 5,054,187 | | | $ | 5,299,355 | |
See Condensed Notes to Consolidated Financial Statements
CLEAR CHANNEL OUTDOOR HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF LOSS
(UNAUDITED)
| | (In thousands, except per share data) | (In thousands, except per share data) | Three Months Ended | | Nine Months Ended | (In thousands, except per share data) | Three Months Ended | | Six Months Ended |
| | | September 30, | | September 30, | | June 30, | | June 30, |
| | | 2021 | | 2020 | | 2021 | | 2020 | | 2022 | | 2021 | | 2022 | | 2021 |
| Revenue | Revenue | $ | 596,416 | | | $ | 447,505 | | | $ | 1,498,406 | | | $ | 1,313,220 | | Revenue | $ | 643,380 | | | $ | 531,082 | | | $ | 1,169,068 | | | $ | 901,990 | |
| Operating expenses: | Operating expenses: | | Operating expenses: | |
| Direct operating expenses (excludes depreciation and amortization) | 324,707 | | | 290,610 | | | 914,221 | | | 895,432 | | |
| Selling, general and administrative expenses (excludes depreciation and amortization) | 118,158 | | | 106,871 | | | 328,593 | | | 330,263 | | |
| Corporate expenses (excludes depreciation and amortization) | 41,806 | | | 30,719 | | | 113,576 | | | 99,722 | | |
Direct operating expenses(1) | | Direct operating expenses(1) | 331,325 | | | 306,224 | | | 652,527 | | | 589,514 | |
Selling, general and administrative expenses(1) | | Selling, general and administrative expenses(1) | 118,294 | | | 112,865 | | | 227,251 | | | 210,435 | |
Corporate expenses(1) | | Corporate expenses(1) | 39,081 | | | 37,728 | | | 82,726 | | | 71,770 | |
| Depreciation and amortization | Depreciation and amortization | 65,600 | | | 62,427 | | | 190,019 | | | 204,372 | | Depreciation and amortization | 60,577 | | | 62,567 | | | 120,984 | | | 124,419 | |
| Impairment charges | Impairment charges | — | | | 27,263 | | | 118,950 | | | 150,400 | | Impairment charges | 21,805 | | | — | | | 21,805 | | | 118,950 | |
| | Other operating expense (income), net | Other operating expense (income), net | (2,422) | | | 5,528 | | | (4,045) | | | (58,051) | | Other operating expense (income), net | 1,367 | | | (1,740) | | | (3,544) | | | (1,623) | |
| | Operating income (loss) | Operating income (loss) | 48,567 | | | (75,913) | | | (162,908) | | | (308,918) | | Operating income (loss) | 70,931 | | | 13,438 | | | 67,319 | | | (211,475) | |
| Interest expense, net | Interest expense, net | (84,276) | | | (90,551) | | | (267,211) | | | (269,435) | | Interest expense, net | (86,594) | | | (90,242) | | | (169,392) | | | (182,935) | |
| Loss on extinguishment of debt | Loss on extinguishment of debt | — | | | (5,389) | | | (102,757) | | | (5,389) | | Loss on extinguishment of debt | — | | | (51,656) | | | — | | | (102,757) | |
| Other income (expense), net | Other income (expense), net | (11,973) | | | 6,493 | | | (1,788) | | | (16,886) | | Other income (expense), net | (26,235) | | | 3,631 | | | (32,234) | | | 10,185 | |
| Loss before income taxes | Loss before income taxes | (47,682) | | | (165,360) | | | (534,664) | | | (600,628) | | Loss before income taxes | (41,898) | | | (124,829) | | | (134,307) | | | (486,982) | |
| Income tax benefit | 6,894 | | | 29,516 | | | 36,019 | | | 32,958 | | |
| Income tax benefit (expense) | | Income tax benefit (expense) | (23,419) | | | 428 | | | (20,739) | | | 29,125 | |
| Consolidated net loss | Consolidated net loss | (40,788) | | | (135,844) | | | (498,645) | | | (567,670) | | Consolidated net loss | (65,317) | | | (124,401) | | | (155,046) | | | (457,857) | |
| Less amount attributable to noncontrolling interest | Less amount attributable to noncontrolling interest | 43 | | | 93 | | | (881) | | | (17,044) | | Less amount attributable to noncontrolling interest | 347 | | | 179 | | | 486 | | | (924) | |
| Net loss attributable to the Company | Net loss attributable to the Company | $ | (40,831) | | | $ | (135,937) | | | $ | (497,764) | | | $ | (550,626) | | Net loss attributable to the Company | $ | (65,664) | | | $ | (124,580) | | | $ | (155,532) | | | $ | (456,933) | |
| | | Net loss attributable to the Company per share of common stock — basic and diluted | Net loss attributable to the Company per share of common stock — basic and diluted | $ | (0.09) | | | $ | (0.29) | | | $ | (1.06) | | | $ | (1.19) | | Net loss attributable to the Company per share of common stock — basic and diluted | $ | (0.14) | | | $ | (0.27) | | | $ | (0.33) | | | $ | (0.98) | |
|
(1)Excludes depreciation and amortization
See Condensed Notes to Consolidated Financial Statements
CLEAR CHANNEL OUTDOOR HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(UNAUDITED)
| | (In thousands) | (In thousands) | Three Months Ended | | Nine Months Ended | (In thousands) | Three Months Ended | | Six Months Ended |
| | September 30, | | September 30, | | June 30, | | June 30, |
| | 2021 | | 2020 | | 2021 | | 2020 | | 2022 | | 2021 | | 2022 | | 2021 |
| Net loss attributable to the Company | Net loss attributable to the Company | $ | (40,831) | | | $ | (135,937) | | | $ | (497,764) | | | $ | (550,626) | | Net loss attributable to the Company | $ | (65,664) | | | $ | (124,580) | | | $ | (155,532) | | | $ | (456,933) | |
| Other comprehensive income (loss): | Other comprehensive income (loss): | | Other comprehensive income (loss): | |
| Foreign currency translation adjustments | Foreign currency translation adjustments | 876 | | | 1,561 | | | (17,044) | | | (4,418) | | Foreign currency translation adjustments | 1,194 | | | 1,426 | | | 5,459 | | | (17,920) | |
| Reclassification adjustments | Reclassification adjustments | — | | | 721 | | | 944 | | | 721 | | Reclassification adjustments | — | | | — | | | — | | | 944 | |
| Other adjustments to comprehensive income (loss), net of tax | — | | | 704 | | | — | | | 685 | | |
| | Other comprehensive income (loss) | Other comprehensive income (loss) | 876 | | | 2,986 | | | (16,100) | | | (3,012) | | Other comprehensive income (loss) | 1,194 | | | 1,426 | | | 5,459 | | | (16,976) | |
| Comprehensive loss | Comprehensive loss | (39,955) | | | (132,951) | | | (513,864) | | | (553,638) | | Comprehensive loss | (64,470) | | | (123,154) | | | (150,073) | | | (473,909) | |
| Less amount attributable to noncontrolling interest | Less amount attributable to noncontrolling interest | (6) | | | 65 | | | (13) | | | (1,836) | | Less amount attributable to noncontrolling interest | (11) | | | 3 | | | (17) | | | (7) | |
| Comprehensive loss attributable to the Company | Comprehensive loss attributable to the Company | $ | (39,949) | | | $ | (133,016) | | | $ | (513,851) | | | $ | (551,802) | | Comprehensive loss attributable to the Company | $ | (64,459) | | | $ | (123,157) | | | $ | (150,056) | | | $ | (473,902) | |
|
See Condensed Notes to Consolidated Financial Statements
CLEAR CHANNEL OUTDOOR HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT
(UNAUDITED)
| | (In thousands, except share data) | |
| | Three Months Ended September 30, 2021 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Common Shares Issued | | Non-controlling
Interest | | Controlling Interest | | Total | | Three Months Ended June 30, 2022 |
| | Common
Stock | | Additional Paid-in
Capital | | Accumulated
Deficit | | Accumulated Other Comprehensive Loss | | Treasury Stock | | | Common Shares Issued | | Non-controlling
Interest | | Controlling Interest | | Total |
| Balances at June 30, 2021 | 473,835,417 | | | $ | 9,769 | | | $ | 4,738 | | | $ | 3,511,398 | | | $ | (6,396,467) | | | $ | (375,489) | | | $ | (6,171) | | | $ | (3,252,222) | | |
| (In thousands, except share data) | | (In thousands, except share data) | Common Shares Issued | | Non-controlling
Interest | | Common
Stock | | Additional Paid-in
Capital | | Accumulated
Deficit | | Accumulated Other Comprehensive Loss | | Treasury Stock | | Total |
| Balances at March 31, 2022 | | Balances at March 31, 2022 | | $ | 4,750 | | | $ | 3,527,076 | | | $ | (6,463,217) | | | $ | (346,679) | | | $ | (7,855) | | |
| | Net income (loss) | Net income (loss) | | 43 | | | — | | | — | | | (40,831) | | | — | | | — | | | (40,788) | | Net income (loss) | | 347 | | | — | | | — | | | (65,664) | | | — | | | — | | | (65,317) | |
| Exercise of stock options and release of stock awards | Exercise of stock options and release of stock awards | 443,677 | | | — | | | 5 | | | 30 | | | — | | | — | | | (1,486) | | | (1,451) | | Exercise of stock options and release of stock awards | 7,863,806 | | | — | | | 79 | | | (79) | | | — | | | — | | | (10,031) | | | (10,031) | |
| Share-based compensation | Share-based compensation | | — | | | — | | | 5,874 | | | — | | | — | | | — | | | 5,874 | | Share-based compensation | | — | | | — | | | 6,876 | | | — | | | — | | | — | | | 6,876 | |
| | Payments to noncontrolling interests | Payments to noncontrolling interests | | (113) | | | — | | | — | | | — | | | — | | | — | | | (113) | | Payments to noncontrolling interests | | (41) | | | — | | | — | | | — | | | — | | | — | | | (41) | |
| | Other comprehensive income (loss) | Other comprehensive income (loss) | | (6) | | | — | | | — | | | — | | | 882 | | | — | | | 876 | | Other comprehensive income (loss) | | (11) | | | — | | | — | | | — | | | 1,205 | | | — | | | 1,194 | |
| | Balances at September 30, 2021 | 474,279,094 | | | $ | 9,693 | | | $ | 4,743 | | | $ | 3,517,302 | | | $ | (6,437,298) | | | $ | (374,607) | | | $ | (7,657) | | | $ | (3,287,824) | | |
| Balances at June 30, 2022 | | Balances at June 30, 2022 | 482,887,254 | | | $ | 11,289 | | | $ | 4,829 | | | $ | 3,533,873 | | | $ | (6,528,881) | | | $ | (345,474) | | | $ | (17,886) | | | $ | (3,342,250) | |
| | (In thousands, except share data) | |
| | Nine Months Ended September 30, 2021 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Controlling Interest | | Total | | Six Months Ended June 30, 2022 |
| | Common Shares Issued | | Non-controlling Interest | | Common
Stock | | Additional Paid-in
Capital | | Accumulated
Deficit | | Accumulated Other Comprehensive Loss | | Treasury Stock | | | | Controlling Interest | | Total |
| Balances at December 31, 2020 | 468,703,164 | | | $ | 10,855 | | | $ | 4,687 | | | $ | 3,502,991 | | | $ | (5,939,534) | | | $ | (358,520) | | | $ | (3,081) | | | $ | (2,782,602) | | |
| (In thousands, except share data) | | (In thousands, except share data) | Common Shares Issued | | Non-controlling Interest | | Common
Stock | | Additional Paid-in
Capital | | Accumulated
Deficit | | Accumulated Other Comprehensive Loss | | Treasury Stock | | Total |
| Balances at December 31, 2021 | | Balances at December 31, 2021 | 474,480,862 | | | $ | 11,060 | | | $ | 4,745 | | | $ | 3,522,367 | | | $ | (6,373,349) | | | $ | (350,950) | | | $ | (7,843) | | |
| | Net loss | | (881) | | | — | | | — | | | (497,764) | | | — | | | — | | | (498,645) | | |
| Net income (loss) | | Net income (loss) | | 486 | | | — | | | — | | | (155,532) | | | — | | | — | | | (155,046) | |
| Exercise of stock options and release of stock awards | Exercise of stock options and release of stock awards | 5,575,930 | | | — | | | 56 | | | (20) | | | — | | | — | | | (4,576) | | | (4,540) | | Exercise of stock options and release of stock awards | 8,406,392 | | | — | | | 84 | | | (84) | | | — | | | — | | | (10,043) | | | (10,043) | |
| Share-based compensation | Share-based compensation | | — | | | — | | | 14,331 | | | — | | | — | | | — | | | 14,331 | | Share-based compensation | | — | | | — | | | 11,590 | | | — | | | — | | | — | | | 11,590 | |
| | Payments to noncontrolling interests | Payments to noncontrolling interests | | (268) | | | — | | | — | | | — | | | — | | | — | | | (268) | | Payments to noncontrolling interests | | (240) | | | — | | | — | | | — | | | — | | | — | | | (240) | |
| | Other comprehensive loss | | (13) | | | — | | | — | | | — | | | (16,087) | | | — | | | (16,100) | | |
| Other comprehensive income (loss) | | Other comprehensive income (loss) | | (17) | | | — | | | — | | | — | | | 5,476 | | | — | | | 5,459 | |
| | Balances at September 30, 2021 | 474,279,094 | | | $ | 9,693 | | | $ | 4,743 | | | $ | 3,517,302 | | | $ | (6,437,298) | | | $ | (374,607) | | | $ | (7,657) | | | $ | (3,287,824) | | |
| Balances at June 30, 2022 | | Balances at June 30, 2022 | 482,887,254 | | | $ | 11,289 | | | $ | 4,829 | | | $ | 3,533,873 | | | $ | (6,528,881) | | | $ | (345,474) | | | $ | (17,886) | | | $ | (3,342,250) | |
See Condensed Notes to Consolidated Financial Statements
CLEAR CHANNEL OUTDOOR HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT
(UNAUDITED)
| | (In thousands, except share data) | |
| | Three Months Ended September 30, 2020 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Controlling Interest | | Total | | Three Months Ended June 30, 2021 |
| | Common Shares Issued | | Non-controlling Interest | | Common
Stock | | Additional Paid-in
Capital | | Accumulated
Deficit | | Accumulated Other Comprehensive Loss | | Treasury Stock | | | | Controlling Interest | | Total |
| Balances at June 30, 2020 | 468,367,036 | | | $ | 11,424 | | | $ | 4,684 | | | $ | 3,496,641 | | | $ | (5,771,481) | | | $ | (346,400) | | | $ | (2,723) | | | $ | (2,607,855) | | |
| (In thousands, except share data) | | (In thousands, except share data) | Common Shares Issued | | Non-controlling Interest | | Common
Stock | | Additional Paid-in
Capital | | Accumulated
Deficit | | Accumulated Other Comprehensive Loss | | Treasury Stock | | Total |
| Balances at March 31, 2021 | | Balances at March 31, 2021 | 469,223,507 | | | $ | 9,633 | | | $ | 4,692 | | | $ | 3,506,938 | | | $ | (6,271,887) | | | $ | (376,912) | | | $ | (3,090) | | |
| | Net income (loss) | Net income (loss) | | 93 | | | — | | | — | | | (135,937) | | | — | | | — | | | (135,844) | | Net income (loss) | | 179 | | | — | | | — | | | (124,580) | | | — | | | — | | | (124,401) | |
| Exercise of stock options and release of stock awards | Exercise of stock options and release of stock awards | 172,925 | | | — | | | 1 | | | (53) | | | — | | | — | | | (282) | | | (334) | | Exercise of stock options and release of stock awards | 4,611,910 | | | — | | | 46 | | | (46) | | | — | | | — | | | (3,081) | | | (3,081) | |
| Share-based compensation | Share-based compensation | | (50) | | | — | | | 2,347 | | | — | | | — | | | — | | | 2,297 | | Share-based compensation | | — | | | — | | | 4,506 | | | — | | | — | | | — | | | 4,506 | |
| | Payments to noncontrolling interests | Payments to noncontrolling interests | | (96) | | | — | | | — | | | — | | | — | | | — | | | (96) | | Payments to noncontrolling interests | | (46) | | | — | | | — | | | — | | | — | | | — | | | (46) | |
| | Other comprehensive income | Other comprehensive income | | 65 | | | — | | | — | | | 1 | | | 2,920 | | | — | | | 2,986 | | Other comprehensive income | | 3 | | | — | | | — | | | — | | | 1,423 | | | — | | | 1,426 | |
| | Balances at September 30, 2020 | 468,539,961 | | | $ | 11,436 | | | $ | 4,685 | | | $ | 3,498,935 | | | $ | (5,907,417) | | | $ | (343,480) | | | $ | (3,005) | | | $ | (2,738,846) | | |
| Balances at June 30, 2021 | | Balances at June 30, 2021 | 473,835,417 | | | $ | 9,769 | | | $ | 4,738 | | | $ | 3,511,398 | | | $ | (6,396,467) | | | $ | (375,489) | | | $ | (6,171) | | | $ | (3,252,222) | |
| | (In thousands, except share data) | |
| | Nine Months Ended September 30, 2020 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Controlling Interest | | Total | | Six Months Ended June 30, 2021 |
| | Common Shares Issued | | Non-controlling Interest | | Common
Stock | | Additional Paid-in
Capital | | Accumulated
Deficit | | Accumulated Other Comprehensive Loss | | Treasury Stock | | | | Controlling Interest | | Total |
| Balances at December 31, 2019 | 466,744,939 | | | $ | 152,814 | | | $ | 4,667 | | | $ | 3,489,593 | | | $ | (5,349,611) | | | $ | (349,552) | | | $ | (2,617) | | | $ | (2,054,706) | | |
Adoption of ASU 2016-13, Credit Losses | | — | | | — | | | — | | | (7,181) | | | — | | | — | | | (7,181) | | |
| (In thousands, except share data) | | (In thousands, except share data) | Common Shares Issued | | Non-controlling Interest | | Common
Stock | | Additional Paid-in
Capital | | Accumulated
Deficit | | Accumulated Other Comprehensive Loss | | Treasury Stock | | Total |
| Balances at December 31, 2020 | | Balances at December 31, 2020 | 468,703,164 | | | $ | 10,855 | | | $ | 4,687 | | | $ | 3,502,991 | | | $ | (5,939,534) | | | $ | (358,520) | | | $ | (3,081) | | |
| | Net loss | Net loss | | (17,044) | | | — | | | — | | | (550,626) | | | — | | | — | | | (567,670) | | Net loss | | (924) | | | — | | | — | | | (456,933) | | | — | | | — | | | (457,857) | |
| Exercise of stock options and release of stock awards | Exercise of stock options and release of stock awards | 1,795,022 | | | — | | | 18 | | | (21) | | | — | | | — | | | (388) | | | (391) | | Exercise of stock options and release of stock awards | 5,132,253 | | | — | | | 51 | | | (50) | | | — | | | — | | | (3,090) | | | (3,089) | |
| Share-based compensation | Share-based compensation | | — | | | — | | | 9,180 | | | — | | | — | | | — | | | 9,180 | | Share-based compensation | | — | | | — | | | 8,457 | | | — | | | — | | | — | | | 8,457 | |
| Payments to noncontrolling interests | Payments to noncontrolling interests | | (294) | | | — | | | — | | | — | | | — | | | — | | | (294) | | Payments to noncontrolling interests | | (155) | | | — | | | — | | | — | | | — | | | — | | | (155) | |
| | Clear Media divestiture | | (122,204) | | | — | | | 183 | | | — | | | 7,249 | | | — | | | (114,772) | | |
| | Other comprehensive income (loss) | | (1,836) | | | — | | | — | | | 1 | | | (1,177) | | | — | | | (3,012) | | |
| | Balances at September 30, 2020 | 468,539,961 | | | $ | 11,436 | | | $ | 4,685 | | | $ | 3,498,935 | | | $ | (5,907,417) | | | $ | (343,480) | | | $ | (3,005) | | | $ | (2,738,846) | | |
| Other comprehensive loss | | Other comprehensive loss | | (7) | | | — | | | — | | | — | | | (16,969) | | | — | | | (16,976) | |
| | Balances at June 30, 2021 | | Balances at June 30, 2021 | 473,835,417 | | | $ | 9,769 | | | $ | 4,738 | | | $ | 3,511,398 | | | $ | (6,396,467) | | | $ | (375,489) | | | $ | (6,171) | | | $ | (3,252,222) | |
See Condensed Notes to Consolidated Financial Statements
CLEAR CHANNEL OUTDOOR HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
| | (In thousands) | (In thousands) | Nine Months Ended September 30, | (In thousands) | Six Months Ended June 30, |
| | 2021 | | 2020 | | 2022 | | 2021 |
| Cash flows from operating activities: | Cash flows from operating activities: | | | | Cash flows from operating activities: | | | |
| Consolidated net loss | Consolidated net loss | $ | (498,645) | | | $ | (567,670) | | Consolidated net loss | $ | (155,046) | | | $ | (457,857) | |
| Reconciling items: | Reconciling items: | | Reconciling items: | |
| Depreciation, amortization and impairment charges | Depreciation, amortization and impairment charges | 308,969 | | | 354,772 | | Depreciation, amortization and impairment charges | 142,789 | | | 243,369 | |
| Non-cash operating lease expense | Non-cash operating lease expense | 273,334 | | | 261,014 | | Non-cash operating lease expense | 168,148 | | | 185,284 | |
| Loss on extinguishment of debt | Loss on extinguishment of debt | 102,757 | | | 5,389 | | Loss on extinguishment of debt | — | | | 102,757 | |
| Deferred taxes | Deferred taxes | (30,285) | | | (49,277) | | Deferred taxes | 17,719 | | | (28,104) | |
| Gain on disposal of operating and other assets, net | Gain on disposal of operating and other assets, net | (4,697) | | | (69,601) | | Gain on disposal of operating and other assets, net | (13,710) | | | (2,051) | |
| Foreign exchange transaction loss | 3,455 | | | 15,618 | | |
| Credit loss expense (reversal) | (3,365) | | | 15,302 | | |
| Foreign exchange transaction loss (gain) | | Foreign exchange transaction loss (gain) | 34,241 | | | (8,685) | |
| Other reconciling items, net | Other reconciling items, net | 23,421 | | | 14,967 | | Other reconciling items, net | 14,854 | | | 6,836 | |
| Changes in operating assets and liabilities, net of effects of disposition: | | |
| Changes in operating assets and liabilities: | | Changes in operating assets and liabilities: | |
| Decrease (increase) in accounts receivable | Decrease (increase) in accounts receivable | (59,050) | | | 143,473 | | Decrease (increase) in accounts receivable | 45,522 | | | (578) | |
| Decrease (increase) in prepaid expenses and other operating assets | (8,089) | | | 59 | | |
| Increase in accounts payable and accrued expenses | 28,507 | | | 37,976 | | |
| Increase in prepaid expenses and other operating assets | | Increase in prepaid expenses and other operating assets | (16,716) | | | (7,600) | |
| Decrease in accounts payable and accrued expenses | | Decrease in accounts payable and accrued expenses | (59,058) | | | (31,592) | |
| Decrease in operating lease liabilities | Decrease in operating lease liabilities | (291,144) | | | (249,785) | | Decrease in operating lease liabilities | (181,735) | | | (202,948) | |
| Decrease in accrued interest | (5,889) | | | (37,626) | | |
| Increase (decrease) in accrued interest | | Increase (decrease) in accrued interest | 3,555 | | | (35,284) | |
| Increase in deferred revenue | Increase in deferred revenue | 12,104 | | | 21,956 | | Increase in deferred revenue | 14,902 | | | 5,482 | |
| Decrease in other operating liabilities | (5,656) | | | (12,001) | | |
| Net cash used for operating activities | (154,273) | | | (115,434) | | |
| Increase (decrease) in other operating liabilities | | Increase (decrease) in other operating liabilities | 3,774 | | | (1,273) | |
| Net cash provided by (used for) operating activities | | Net cash provided by (used for) operating activities | 19,239 | | | (232,244) | |
| Cash flows from investing activities: | Cash flows from investing activities: | | | | Cash flows from investing activities: | | | |
| Purchases of property, plant and equipment and concession rights | (82,438) | | | (93,249) | | |
| Proceeds from disposal of assets, net | 5,671 | | | 218,545 | | |
| Capital expenditures | | Capital expenditures | (81,108) | | | (49,766) | |
| Asset acquisitions | | Asset acquisitions | (24,255) | | | (1,510) | |
| Proceeds from disposal of assets | | Proceeds from disposal of assets | 20,430 | | | 3,640 | |
| Other investing activities, net | Other investing activities, net | (2,672) | | | (1,034) | | Other investing activities, net | (121) | | | 524 | |
| Net cash provided by (used for) investing activities | (79,439) | | | 124,262 | | |
| Net cash used for investing activities | | Net cash used for investing activities | (85,054) | | | (47,112) | |
| Cash flows from financing activities: | Cash flows from financing activities: | | | | Cash flows from financing activities: | | | |
| Draws on credit facilities | — | | | 150,000 | | |
| | | Proceeds from long-term debt | Proceeds from long-term debt | 2,085,570 | | | 375,000 | | Proceeds from long-term debt | — | | | 2,085,570 | |
| Payments on long-term debt | Payments on long-term debt | (2,005,905) | | | (69,517) | | Payments on long-term debt | (10,658) | | | (2,000,276) | |
| Debt issuance costs | Debt issuance costs | (24,438) | | | (9,423) | | Debt issuance costs | — | | | (24,417) | |
| | Taxes paid related to net share settlement of equity awards | | Taxes paid related to net share settlement of equity awards | (10,043) | | | (3,090) | |
| Other financing activities, net | Other financing activities, net | (4,935) | | | (1,087) | | Other financing activities, net | (240) | | | (155) | |
| Net cash provided by financing activities | 50,292 | | | 444,973 | | |
| Net cash provided by (used for) financing activities | | Net cash provided by (used for) financing activities | (20,941) | | | 57,632 | |
| Effect of exchange rate changes on cash, cash equivalents and restricted cash | Effect of exchange rate changes on cash, cash equivalents and restricted cash | (2,807) | | | (13,307) | | Effect of exchange rate changes on cash, cash equivalents and restricted cash | (8,388) | | | (44) | |
| Net increase (decrease) in cash, cash equivalents and restricted cash | (186,227) | | | 440,494 | | |
| Net decrease in cash, cash equivalents and restricted cash | | Net decrease in cash, cash equivalents and restricted cash | (95,144) | | | (221,768) | |
| Cash, cash equivalents and restricted cash at beginning of period | Cash, cash equivalents and restricted cash at beginning of period | 795,061 | | | 417,075 | | Cash, cash equivalents and restricted cash at beginning of period | 419,971 | | | 795,061 | |
| Cash, cash equivalents and restricted cash at end of period | Cash, cash equivalents and restricted cash at end of period | $ | 608,834 | | | $ | 857,569 | | Cash, cash equivalents and restricted cash at end of period | $ | 324,827 | | | $ | 573,293 | |
| Supplemental disclosures: | Supplemental disclosures: | | | | Supplemental disclosures: | | | |
| Cash paid for interest | Cash paid for interest | $ | 264,387 | | | $ | 302,097 | | Cash paid for interest | $ | 161,334 | | | $ | 211,982 | |
| Cash paid for income taxes, net of refunds | Cash paid for income taxes, net of refunds | $ | 3,533 | | | $ | 11,312 | | Cash paid for income taxes, net of refunds | $ | 2,442 | | | $ | 1,732 | |
See Condensed Notes to Consolidated Financial Statements
CLEAR CHANNEL OUTDOOR HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1 – BASIS OF PRESENTATION
Preparation of Interim Financial Statements
The consolidated financial statements include the accounts of Clear Channel Outdoor Holdings, Inc. and its subsidiaries, as well as entities forin 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.
The accompanying consolidated financial statements were prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”(the “SEC”) and, in the opinion of management, include all normal and recurring adjustments necessary to present fairly the results of the interim periods shown. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) have been condensed or omitted pursuant to such SEC rules and regulations. Management believes that the disclosures made are adequate to make the information presented not misleading. Due to seasonality and other factors, the results for the interim periods may not be indicative of results for the full year. The financial statements contained herein should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s 20202021 Annual Report on Form 10-K, filed with the SEC on February 25, 2021.
Certain prior period amounts in the Consolidated Statement of Cash Flows have been reclassified to conform to the 2021 presentation.
Recent Developments
COVID-19
In March 2020, the World Health Organization categorized coronavirus disease 2019 (“COVID-19”) as a pandemic. While the duration and severity of the effects of the pandemic remain uncertain, the Company has taken and continues to take actions to strengthen its financial position and support the continuity of its platform and operations, as follows:
•The Company continues to complete contract negotiations with landlords and municipalities to better align fixed site lease expenses with reductions in revenue. Where applicable, the Company has applied the April 2020 supplemental Financial Accounting Standards Board (“FASB”) staff guidance regarding accounting for rent concessions resulting from COVID-19. The Company recognized reductions of rent expense on lease and non-lease contracts due to negotiated rent abatements of $21.6 million and $78.9 million during the three and nine months ended September 30, 2021, respectively, and $23.8 million and $53.1 million during the three and nine months ended September 30, 2020, respectively. Negotiated deferrals of rent payments did not result in a reduction of rent expense.
•The Company received European governmental support and wage subsidies in response to COVID-19 of $6.3 million and $13.1 million during the three and nine months ended September 30, 2021, respectively, and $7.2 million and $14.7 million during the three and nine months ended September 30, 2020, respectively. These subsidies have been recorded as reductions in compensation and rent costs.
•The Company continues to execute upon its restructuring plan to reduce headcount in Europe, which it committed to during the third quarter of 2020. During the three and nine months ended September 30, 2021, the Company incurred restructuring and other costs pursuant to this plan of $16.3 million and $33.5 million, respectively, in its Europe segment. During the nine months ended September 30, 2021, the Company incurred restructuring and other costs pursuant to this plan of $1.1 million related to Corporate operations. Refer to Note 9 to the Company’s Condensed Consolidated Financial Statements for further details.
•In June 2021, one of the Company’s subsidiaries within its Europe segment borrowed approximately $34.7 million, at current exchange rates, through a state-guaranteed loan program established in response to COVID-19. Refer to Note 4 to the Company’s Condensed Consolidated Financial Statements for additional details.
Disposition
On April 28, 2020, the Company tendered its 50.91% stake in Clear Media Limited (“Clear Media”), a former indirect, non-wholly owned subsidiary of the Company based in China, pursuant to a voluntary conditional cash offer made by and on behalf of Ever Harmonic Global Limited (“Ever Harmonic”), and on May 14, 2020, the Company received $253.1 million in cash proceeds from the sale of its shares in Clear Media. The Company recognized a gain on the sale of Clear Media of $75.2 million, which is recorded within “Other operating income, net” on the Company’s Consolidated Statement of Comprehensive Loss for the nine months ended September 30, 2020.24, 2022.
Use of Estimates
The Company’s consolidated financial statements presented herein reflect estimates and assumptions made by management that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and reported amounts of revenue and expenses during the periods presented. Such estimates and assumptions affect, among other things, the Company’s goodwill, long-lived assets and indefinite-lived intangible assets; operating lease right-of-use assets and operating lease liabilities; assessment of the annual effective tax rate; valuation of deferred income taxes and income tax contingencies; defined-benefit plan obligations; the allowance for credit losses; assessment of lease and non-lease contract expenses; and measurement of compensation cost for bonus and other compensation plans. The Company’s assessment of conditionsplans; and events, considered inlitigation accruals.
Asset Acquisitions
During the aggregate, indicates thatsix months ended June 30, 2022, the Company will be able to meet its obligations as they become due within one year after the datecompleted several acquisitions of these financial statements. There continues to be uncertainty in estimating the expected economicout-of-home advertising assets, which included digital billboard structures, land, indefinite-lived permits and operational impacts relative to COVID-19 as the situation continues to evolve. The estimates and assumptions used in these financial statements may change in future periods as the expected impacts from COVID-19 are revised, resulting in further potential impacts to the Company’s financial statements.
New Accounting Pronouncements
New Accounting Pronouncements Recently Adopted
The Company adopted the guidance under Accounting Standards Update (“ASU”) 2019-12, Simplifying the Accountingpermanent easements, for Income Taxes, astotal cash consideration of January 1, 2021 on a prospective basis. This update, which simplifies the accounting for income taxes by removing certain existing exceptions to the general principles in Accounting Standards Codification (“ASC”) Topic 740, does not have a material impact on the Company’s consolidated financial statements or disclosures.$24.3 million.
New Accounting Pronouncements Not Yet Adopted
Reference Rate Reform
For the last several years, there has been an ongoing effort amongst regulators, standard setters, financial institutions and other market participants to replace interbank offered rates, including the London Interbank Offered Rate (“LIBOR”), with alternative reference rates. In the United States (“U.S.”), the Alternative Reference Rates Committee has formally recommended forward-looking Secured Overnight Financing Rate (“SOFR”) term rates as the replacement for USD LIBOR, while various other risk-free rates have been selected to replace LIBOR for other currencies. In MarchAfter December 31, 2021, the ICE Benchmark Administration, LIBOR’s administrator, announced that it will ceaseceased publication of certain LIBOR rates, after December 31, 2021, whileand the remaining USD LIBOR rates will be published through June 30, 2023.
The Company is currently workingwill continue to work with the administrative agentagents of its Senior Secured Credit Facilities and Receivables-Based Credit Facility to finalizeagree on replacement rates; however, the Companyrates but does not expect the replacement of LIBOR to result in a material impact on the Company’sits consolidated financial statements or disclosures.statements.
In March 2020, the FASBFinancial Accounting Standards Board (the “FASB”) issued ASUAccounting Standards Update (“ASU”) 2020-04, Facilitation of the Effects of Reference Rate Reform on Financial Reporting, in order to ease the potential burden of accounting for reference rate reform initiatives. The update provides temporary optional expedients and exceptions for applying GAAP contract modification accounting to contracts and other transactions affected by reference rate reform if certain criteria are met and may be applied through December 31, 2022. The Company is assessing whether it will use these optional expedients and exceptions but does not expect adoption of this guidance to have a material impact on the Company’s consolidated financial statements or disclosures. The Company will continue to monitor and assess regulatory developments during the transition period.
ASU 2021-10
In November 2021, the FASB issued ASU 2021-10, Disclosures by Business Entities about Government Assistance, which requires disclosures that increase the transparency of certain transactions with governments. The amendments in this ASU are effective for annual periods beginning after December 15, 2021 and may be applied prospectively or retrospectively. The Company does not expect to be materially impacted by the implementation of this ASU.
NOTE 2 – SEGMENT DATA
The Company has 2 reportable segments, which it believes best reflect how the Company is currently managed –managed: Americas and Europe. The Americas segment consists of operations primarily in the U.S., and the Europe segment consists of operations in Europe and Singapore. The Company’s remaining operating segments dosegment, Latin America, does not meet the quantitative thresholdsthreshold to qualify as a reportable segmentssegment and areis disclosed as “Other.”“Other” herein. Each segment provides out-of-home advertising services in its respective geographic region using various digital and traditional display types, consisting primarily of billboards, street furniture displays and transit displays.
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 the Company’s segments.
The following table presents the Company’s reportable segment results for the three and ninesix months ended SeptemberJune 30, 20212022 and 2020:2021:
| | (In thousands) | (In thousands) | Three Months Ended September 30, | | Nine Months Ended September 30, | (In thousands) | Three Months Ended June 30, | | Six Months Ended June 30, |
| | | 2021 | | 2020 | | 2021 | | 2020 | | 2022 | | 2021 | | 2022 | | 2021 |
| Revenue | Revenue | | | | | | | | Revenue | | | | | | | |
| Americas | Americas | $ | 319,020 | | | $ | 223,715 | | | $ | 802,524 | | | $ | 719,202 | | Americas | $ | 346,132 | | | $ | 271,620 | | | $ | 641,271 | | | $ | 483,504 | |
| Europe | Europe | 262,568 | | | 216,934 | | | 659,216 | | | 535,970 | | Europe | 280,347 | | | 247,124 | | | 497,419 | | | 396,648 | |
Other(1) | 14,828 | | | 6,856 | | | 36,666 | | | 58,048 | | |
| Other | | Other | 16,901 | | | 12,338 | | | 30,378 | | | 21,838 | |
| Total | Total | $ | 596,416 | | | $ | 447,505 | | | $ | 1,498,406 | | | $ | 1,313,220 | | Total | $ | 643,380 | | | $ | 531,082 | | | $ | 1,169,068 | | | $ | 901,990 | |
| | Capital Expenditures | Capital Expenditures | | Capital Expenditures | |
| Americas | Americas | $ | 15,857 | | | $ | 9,293 | | | $ | 39,988 | | | $ | 41,189 | | Americas | $ | 30,224 | | | $ | 18,406 | | | $ | 48,036 | | | $ | 24,131 | |
| Europe | Europe | 12,992 | | | 12,067 | | | 30,298 | | | 31,489 | | Europe | 11,529 | | | 9,256 | | | 26,734 | | | 17,306 | |
Other(1) | 862 | | | 2,420 | | | 3,082 | | | 10,805 | | |
| Other | | Other | 235 | | | 907 | | | 1,106 | | | 2,220 | |
| Corporate | Corporate | 2,961 | | | 2,506 | | | 9,070 | | | 9,766 | | Corporate | 3,311 | | | 3,279 | | | 5,232 | | | 6,109 | |
| Total | Total | $ | 32,672 | | | $ | 26,286 | | | $ | 82,438 | | | $ | 93,249 | | Total | $ | 45,299 | | | $ | 31,848 | | | $ | 81,108 | | | $ | 49,766 | |
| | Segment Adjusted EBITDA | Segment Adjusted EBITDA | | Segment Adjusted EBITDA | |
| Americas | Americas | $ | 139,086 | | | $ | 70,716 | | | $ | 330,527 | | | $ | 225,693 | | Americas | $ | 148,754 | | | $ | 127,221 | | | $ | 259,090 | | | $ | 191,441 | |
| Europe | Europe | 31,271 | | | (8,141) | | | (34,614) | | | (91,071) | | Europe | 44,522 | | | 1,744 | | | 30,768 | | | (65,885) | |
Other(1) | Other(1) | 425 | | | (5,650) | | | (4,321) | | | (36,092) | | Other(1) | 1,710 | | | (921) | | | 1,091 | | | (4,746) | |
| Total | Total | $ | 170,782 | | | $ | 56,925 | | | $ | 291,592 | | | $ | 98,530 | | Total | $ | 194,986 | | | $ | 128,044 | | | $ | 290,949 | | | $ | 120,810 | |
| | Reconciliation of Segment Adjusted EBITDA to Consolidated Net Loss Before Income Taxes | Reconciliation of Segment Adjusted EBITDA to Consolidated Net Loss Before Income Taxes | | Reconciliation of Segment Adjusted EBITDA to Consolidated Net Loss Before Income Taxes | |
| Segment Adjusted EBITDA | Segment Adjusted EBITDA | $ | 170,782 | | | $ | 56,925 | | | $ | 291,592 | | | $ | 98,530 | | Segment Adjusted EBITDA | $ | 194,986 | | | $ | 128,044 | | | $ | 290,949 | | | $ | 120,810 | |
| Less reconciling items: | Less reconciling items: | | Less reconciling items: | |
Corporate expenses(2)(1) | Corporate expenses(2)(1) | 41,806 | | | 30,719 | | | 113,576 | | | 99,722 | | Corporate expenses(2)(1) | 39,081 | | | 37,728 | | | 82,726 | | | 71,770 | |
| Depreciation and amortization | Depreciation and amortization | 65,600 | | | 62,427 | | | 190,019 | | | 204,372 | | Depreciation and amortization | 60,577 | | | 62,567 | | | 120,984 | | | 124,419 | |
| Impairment charges | Impairment charges | — | | | 27,263 | | | 118,950 | | | 150,400 | | Impairment charges | 21,805 | | | — | | | 21,805 | | | 118,950 | |
Restructuring and other costs(3)(2) | Restructuring and other costs(3)(2) | 17,231 | | | 6,901 | | | 36,000 | | | 11,005 | | Restructuring and other costs(3)(2) | 1,225 | | | 16,051 | | | 1,659 | | | 18,769 | |
| | Other operating expense (income), net | Other operating expense (income), net | (2,422) | | | 5,528 | | | (4,045) | | | (58,051) | | Other operating expense (income), net | 1,367 | | | (1,740) | | | (3,544) | | | (1,623) | |
| Interest expense, net | Interest expense, net | 84,276 | | | 90,551 | | | 267,211 | | | 269,435 | | Interest expense, net | 86,594 | | | 90,242 | | | 169,392 | | | 182,935 | |
Other reconciling items(4)(3) | Other reconciling items(4)(3) | 11,973 | | | (1,104) | | | 104,545 | | | 22,275 | | Other reconciling items(4)(3) | 26,235 | | | 48,025 | | | 32,234 | | | 92,572 | |
| Consolidated net loss before income taxes | Consolidated net loss before income taxes | $ | (47,682) | | | $ | (165,360) | | | $ | (534,664) | | | $ | (600,628) | | Consolidated net loss before income taxes | $ | (41,898) | | | $ | (124,829) | | | $ | (134,307) | | | $ | (486,982) | |
(1)Other includes the Company’s operations in Latin America and, for periods prior to the disposition of the Company’s stake in Clear Media on April 28, 2020, China.
(2)Corporate expenses include expenses related to infrastructure and support, including information technology, human resources, legal, 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)(2)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.
(4)(3)Other reconciling items includes Loss on extinguishment of debt and Other income (expense), net.
NOTE 3 – REVENUE
The Company generates revenue primarily from the sale of advertising space 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 the lease accounting guidance under ASCAccounting Standards Codification (“ASC”) Topic 842; all842. All remaining revenue transactions are accounted for as revenue from contracts with customers under ASC Topic 606.
Disaggregation of Revenue
The following table shows revenue from contracts with customers, revenue from leases and total revenue, disaggregated by segment, for the three and ninesix months ended SeptemberJune 30, 20212022 and 2020:2021:
| | (In thousands) | (In thousands) | Revenue from contracts with customers | | Revenue from leases | | Total Revenue | (In thousands) | Revenue from contracts with customers | | Revenue from leases | | Total Revenue |
| Three Months Ended September 30, 2021 | |
| Three Months Ended June 30, 2022 | | Three Months Ended June 30, 2022 |
Americas(1) | Americas(1) | $ | 154,843 | | | $ | 164,177 | | | $ | 319,020 | | Americas(1) | $ | 173,876 | | | $ | 172,256 | | | $ | 346,132 | |
| Europe | Europe | 235,082 | | | 27,486 | | | 262,568 | | Europe | 257,000 | | | 23,347 | | | 280,347 | |
| Other(2) | 11,994 | | | 2,834 | | | 14,828 | | |
| Other | | Other | 13,495 | | | 3,406 | | | 16,901 | |
| Total | Total | $ | 401,919 | | | $ | 194,497 | | | $ | 596,416 | | Total | $ | 444,371 | | | $ | 199,009 | | | $ | 643,380 | |
| | Three Months Ended September 30, 2020 | |
| Three Months Ended June 30, 2021 | | Three Months Ended June 30, 2021 |
Americas(1) | Americas(1) | $ | 109,165 | | | $ | 114,550 | | | $ | 223,715 | | Americas(1) | $ | 121,904 | | | $ | 149,716 | | | $ | 271,620 | |
| Europe | Europe | 189,342 | | | 27,592 | | | 216,934 | | Europe | 218,177 | | | 28,947 | | | 247,124 | |
| Other(2) | 5,366 | | | 1,490 | | | 6,856 | | |
| Other | | Other | 10,225 | | | 2,113 | | | 12,338 | |
| Total | Total | $ | 303,873 | | | $ | 143,632 | | | $ | 447,505 | | Total | $ | 350,306 | | | $ | 180,776 | | | $ | 531,082 | |
| | Nine Months Ended September 30, 2021 | |
| Six Months Ended June 30, 2022 | | Six Months Ended June 30, 2022 |
Americas(1) | Americas(1) | $ | 370,815 | | | $ | 431,709 | | | $ | 802,524 | | Americas(1) | $ | 321,756 | | | $ | 319,515 | | | $ | 641,271 | |
| Europe | Europe | 584,937 | | | 74,279 | | | 659,216 | | Europe | 453,882 | | | 43,537 | | | 497,419 | |
| Other(2) | 29,849 | | | 6,817 | | | 36,666 | | |
| Other | | Other | 24,111 | | | 6,267 | | | 30,378 | |
| Total | Total | $ | 985,601 | | | $ | 512,805 | | | $ | 1,498,406 | | Total | $ | 799,749 | | | $ | 369,319 | | | $ | 1,169,068 | |
| | Nine Months Ended September 30, 2020 | |
| Six Months Ended June 30, 2021 | | Six Months Ended June 30, 2021 |
Americas(1) | Americas(1) | $ | 362,346 | | | $ | 356,856 | | | $ | 719,202 | | Americas(1) | $ | 215,972 | | | $ | 267,532 | | | $ | 483,504 | |
| Europe | Europe | 467,517 | | | 68,453 | | | 535,970 | | Europe | 349,855 | | | 46,793 | | | 396,648 | |
| Other(2) | 52,055 | | | 5,993 | | | 58,048 | | |
| Other | | Other | 17,855 | | | 3,983 | | | 21,838 | |
| Total | Total | $ | 881,918 | | | $ | 431,302 | | | $ | 1,313,220 | | Total | $ | 583,682 | | | $ | 318,308 | | | $ | 901,990 | |
(1)Americas total revenue for the three months ended SeptemberJune 30, 20212022 and 20202021 includes revenue from transit displays of $45.7$65.1 million and $25.0$27.0 million, respectively, including revenue from airport displays of $43.0$61.1 million and $22.8$24.6 million, respectively. Americas total revenue for the ninesix months ended SeptemberJune 30, 20212022 and 20202021 includes revenue from transit displays of $94.1$124.1 million and $108.8$48.4 million, respectively, including revenue from airport displays of $87.1$117.0 million and $100.5$44.1 million, respectively.
(2)Other includes the Company’s businesses in Latin America and, for periods prior to the disposition of the Company’s stake in Clear Media on April 28, 2020, China. Total revenue for the Company’s Latin America business during the nine months ended September 30, 2020 was $28.8 million.
Revenue from Contracts with Customers
The following tables show the Company’s beginning and ending accounts receivable and deferred revenue balances from contracts with customers:
| | | Three Months Ended September 30, | | Nine Months Ended September 30, | | Three Months Ended June 30, | | Six Months Ended June 30, |
| (In thousands) | (In thousands) | 2021 | | 2020 | | 2021 | | 2020 | (In thousands) | 2022 | | 2021 | | 2022 | | 2021 |
| Accounts receivable, net of allowance, from contracts with customers: | Accounts receivable, net of allowance, from contracts with customers: | | | | | | | | Accounts receivable, net of allowance, from contracts with customers: | | | | | | | |
| Beginning balance | Beginning balance | $ | 346,306 | | | $ | 239,957 | | | $ | 349,799 | | | $ | 581,555 | | Beginning balance | $ | 390,049 | | | $ | 243,689 | | | $ | 492,706 | | | $ | 349,799 | |
| Ending balance | Ending balance | $ | 390,053 | | | $ | 312,076 | | | $ | 390,053 | | | $ | 312,076 | | Ending balance | $ | 433,626 | | | $ | 346,306 | | | $ | 433,626 | | | $ | 346,306 | |
| | Deferred revenue from contracts with customers: | Deferred revenue from contracts with customers: | | Deferred revenue from contracts with customers: | |
| Beginning balance | Beginning balance | $ | 50,067 | | | $ | 47,760 | | | $ | 37,712 | | | $ | 52,589 | | Beginning balance | $ | 56,955 | | | $ | 46,773 | | | $ | 42,016 | | | $ | 37,712 | |
| Ending balance | Ending balance | $ | 53,916 | | | $ | 50,875 | | | $ | 53,916 | | | $ | 50,875 | | Ending balance | $ | 54,617 | | | $ | 50,067 | | | $ | 54,617 | | | $ | 50,067 | |
During the three months ended SeptemberJune 30, 20212022 and 2020,2021, respectively, the Company recognized $42.9$45.0 million and $33.3$36.8 million of revenue that was included in the deferred revenue from contracts with customers balance at the beginning of the respective quarter. During the ninesix months ended SeptemberJune 30, 20212022 and 2020,2021, respectively, the Company recognized $36.8$35.9 million and $47.4$34.5 million of revenue that was included in the deferred revenue from contracts with customers balance at the beginning of the respective year.
The Company’s contracts with customers generally have terms of one year or less; however,less. However, as of SeptemberJune 30, 2021,2022, the Company expects to recognize $99.3$89.8 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.
NOTE 4 – LONG-TERM DEBT
Long-term debt outstanding as of SeptemberJune 30, 20212022 and December 31, 20202021 consisted of the following:
| | (In thousands) | (In thousands) | September 30,
2021 | | December 31,
2020 | (In thousands) | June 30,
2022 | | December 31,
2021 |
Term Loan Facility(1) | Term Loan Facility(1) | $ | 1,960,000 | | | $ | 1,975,000 | | Term Loan Facility(1) | $ | 1,945,000 | | | $ | 1,955,000 | |
Revolving Credit Facility(2) | Revolving Credit Facility(2) | 130,000 | | | 130,000 | | Revolving Credit Facility(2) | — | | | — | |
| Receivables-Based Credit Facility | Receivables-Based Credit Facility | — | | | — | | Receivables-Based Credit Facility | — | | | — | |
| Clear Channel Outdoor Holdings 5.125% Senior Secured Notes Due 2027 | Clear Channel Outdoor Holdings 5.125% Senior Secured Notes Due 2027 | 1,250,000 | | | 1,250,000 | | Clear Channel Outdoor Holdings 5.125% Senior Secured Notes Due 2027 | 1,250,000 | | | 1,250,000 | |
Clear Channel Outdoor Holdings 7.75% Senior Notes Due 2028(3) | Clear Channel Outdoor Holdings 7.75% Senior Notes Due 2028(3) | 1,000,000 | | | — | | Clear Channel Outdoor Holdings 7.75% Senior Notes Due 2028(3) | 1,000,000 | | | 1,000,000 | |
Clear Channel Outdoor Holdings 7.5% Senior Notes Due 2029(4) | Clear Channel Outdoor Holdings 7.5% Senior Notes Due 2029(4) | 1,050,000 | | | — | | Clear Channel Outdoor Holdings 7.5% Senior Notes Due 2029(4) | 1,050,000 | | | 1,050,000 | |
Clear Channel Worldwide Holdings 9.25% Senior Notes Due 2024(3),(4) | — | | | 1,901,525 | | |
| | Clear Channel International B.V. 6.625% Senior Secured Notes Due 2025 | Clear Channel International B.V. 6.625% Senior Secured Notes Due 2025 | 375,000 | | | 375,000 | | Clear Channel International B.V. 6.625% Senior Secured Notes Due 2025 | 375,000 | | | 375,000 | |
Other debt(5)(2) | Other debt(5)(2) | 39,694 | | | 6,763 | | Other debt(5)(2) | 35,270 | | | 39,006 | |
| Original issue discount | Original issue discount | (7,312) | | | (8,296) | | Original issue discount | (6,294) | | | (6,976) | |
| Long-term debt fees | Long-term debt fees | (59,480) | | | (57,706) | | Long-term debt fees | (52,156) | | | (57,077) | |
| Total debt | Total debt | 5,737,902 | | | 5,572,286 | | Total debt | 5,596,820 | | | 5,604,953 | |
| Less: Current portion | Less: Current portion | 21,160 | | | 21,396 | | Less: Current portion | 21,051 | | | 21,165 | |
| Total long-term debt | Total long-term debt | $ | 5,716,742 | | | $ | 5,550,890 | | Total long-term debt | $ | 5,575,769 | | | $ | 5,583,788 | |
(1)TheDuring the six months ended June 30, 2022, the Company paid $5.0$10.0 million of the outstanding principal on the term loan facility (“Term Loan Facility”) in each quarter of 2021, for a total of $15.0 million during the nine months ended September 30, 2021,Facility in accordance with the terms of the senior secured credit agreement ("Senior(the "Senior Secured Credit Agreement") governing the senior secured credit facilities,Senior Secured Credit Facilities, which consist of the Term Loan Facility and the revolving credit facility (“Revolving Credit Facility”).Facility.
(2)The Company repaid the $130.0 million outstanding balance under the Revolving Credit Facility on October 26, 2021 using cash on hand.
(3)On February 17, 2021, the Company issued $1.0 billion aggregate principal amount of 7.75% Senior Notes due 2028. On March 4, 2021, the Company used the net proceeds from this issuance to cause Clear Channel Worldwide Holdings, Inc. (“CCWH”), a subsidiary of the Company, to redeem $940.0 million aggregate principal amount of its 9.25% Senior Notes due 2024 (“CCWH Senior Notes”) at a redemption price equal to 104.625% of the principal amount thereof, plus accruedOther debt includes finance leases and unpaid interest to the redemption date. As a result of this partial redemption, the Company recognized a loss on debt extinguishment of $51.1 million during the three months ended March 31, 2021.
(4)On June 1, 2021, the Company issued $1.05 billion aggregate principal amount of 7.5% Senior Notes due 2029. On June 16, 2021, the Company used the net proceeds from this issuance to cause CCWH to redeem all of the outstanding $961.5 million aggregate principal amount of its CCWH Senior Notes at a redemption price equal to 104.625% of the principal amount thereof, plus accrued and unpaid interest to the redemption date. As a result of this redemption, the Company recognized a loss on debt extinguishment of $51.7 million during the three months ended June 30, 2021.
(5)On June 29, 2021, one of the Company’s non-guarantor European subsidiaries entered intovarious borrowings utilized for general operating purposes, including a state-guaranteed loan with a third-party lender of €30.0 million, or approximately $34.7$31.4 million at current exchange rates, with a third-party lender. The term of this unsecured loan, which is guaranteed byrates. In April 2022, as permitted under the government of that country, will range from one to six years depending upon the Company’s election (the “Extension Request”), which must be made by June 29, 2022. The loan bears an interest rate of 0% during the first year, and the interest rate for any subsequent periods will be negotiated with the lender upon submission of the Extension Request. Additionally, at the end of the first yearterms of the loan agreement, the Company must payelected to extend the loan’s maturity date to June 29, 2027, with quarterly principal repayments of €1.875 million due beginning in September 2023. This loan did not originally bear interest, but effective June 29, 2022, the annual interest rate is 0.7%. Additionally, in June 2022, the Company paid a fee relating to the state guarantee equal to 0.5% of the outstanding amount of the loan. If the Company elects to extend the loan past the first year,Effective June 29, 2022, the annual cost of the state guarantee will increase tobe 1.0% forof the secondoutstanding loan amount through June 29, 2024 and third years and 2.0% of the outstanding loan amount for the remainder of the loan term. The Company may generally prepay the loan in part or in full without penalty.
The aggregate market value of the Company’s debt based on market prices for which quotes were available was approximately $5.9$4.7 billion and $5.6$5.9 billion as of SeptemberJune 30, 20212022 and December 31, 2020,2021, respectively. Under the fair value hierarchy established by ASC 820-10-35, the inputs used to disclosedetermine the market value of the Company’s debt would beare classified as Level 1.
Amendment to Senior Secured Credit Facilities
In May 2021,June 30, 2022, the Company entered into a second amendment to the Senior Secured Credit Agreement to, among other things, extend the suspended springing financial covenant through December 31, 2021 and delay the scheduled financial covenant step-down until September 30, 2022. The springing financial covenant, applicable solely to the Revolving Credit Facility, generally requireswas in compliance with a first lien net leverage ratio of 7.60 to 1.00, with a step-down to 7.10 to 1.00 if the balance of the Revolving Credit Facility is greater than $0 and undrawn letters of credit exceed $10 million. In addition, under the Senior Secured Credit Agreement, as amended, the Company is required to maintain minimum cash on hand and availability under the Receivables-Based Credit Facility and Revolving Credit Facility of $150 million for all reporting periods through March 31, 2022.
CCOH 7.75% Senior Notes Due 2028
On February 17, 2021, the Company completed the sale of $1.0 billion aggregate principal amount of 7.75% Senior Notes due 2028 (the “CCOH 7.75% Senior Notes”)covenants contained in a private placement to qualified institutional buyers under Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), and to persons outside the U.S. pursuant to Regulation S under the Securities Act.
On the same date, the Company entered into an indenture, dated as of February 17, 2021 (the “CCOH 7.75% Senior Notes Indenture”), by and among the Company, the subsidiaries of the Company acting as guarantors party thereto (collectively, the “Guarantors”), and U.S. Bank National Association, as trustee.
The CCOH 7.75% Senior Notes mature on April 15, 2028 and bear interest at a rate of 7.75% per annum. Interest on the CCOH 7.75% Senior Notes is payable to the holders thereof semi-annually on April 15 and October 15 of each year, beginning on October 15, 2021.
The CCOH 7.75% Senior Notes are guaranteed on a senior unsecured basis by certain of the Company’s wholly-owned existing and future domestic subsidiaries. The CCOH 7.75% Senior Notes (i) rank pari passu in right of payment with all existing and future senior indebtedness of the Company; (ii) are senior in right of payment to all of the future subordinated indebtedness of the Company and the Guarantors; (iii) are effectively subordinated to all of the Company’s and the Guarantors’ existing and future indebtedness secured by a lien, to the extent of the value of such collateral; and (iv) are structurally subordinated to any existing and future obligations of any existing or future subsidiaries of the Company that do not guarantee the CCOH 7.75% Senior Notes, including all of the Company’s foreign subsidiaries.
The Company may redeem all or a portion of the CCOH 7.75% Senior Notes beginning on April 15, 2024 at the redemption prices set forth in the CCOH 7.75% Senior Notes Indenture. Prior to April 15, 2024, the Company may redeem all or a portion of the CCOH 7.75% Senior Notes at a redemption price equal to 100% of the principal amount of the CCOH 7.75% Senior Notes plus the “make-whole” premium described in the CCOH 7.75% Senior Notes Indenture. The Company may redeem up to 40% of the aggregate principal amount of the CCOH 7.75% Senior Notes at any time prior to April 15, 2024 using the net proceeds from certain equity offerings at 107.75% of the principal amount of the CCOH 7.75% Senior Notes.
The CCOH 7.75% Senior Notes Indenture contains covenants that limit the Company’s ability and the ability of its restricted subsidiaries to, among other things: (i) incur or guarantee additional debt or issue certain preferred stock; (ii) redeem, purchase or retire subordinated debt; (iii) make certain investments; (iv) create restrictions on the payment of dividends or other amounts from the Company’s restricted subsidiaries that are not Guarantors; (v) enter into certain transactions with affiliates; (vi) merge or consolidate with another person, or sell or otherwise dispose of all or substantially all of the Company’s assets; (vii) sell certain assets, including capital stock of the Company’s subsidiaries; (viii) designate the Company’s subsidiaries as unrestricted subsidiaries; (ix) pay dividends, redeem or repurchase capital stock or make other restricted payments; and (x) incur certain liens.
CCOH 7.5% Senior Notes Due 2029
On June 1, 2021, the Company completed the sale of $1.05 billion aggregate principal amount of 7.5% Senior Notes due 2029 (the “CCOH 7.5% Senior Notes”) in a private placement to qualified institutional buyers under Rule 144A under the Securities Act and to persons outside the U.S. pursuant to Regulation S under the Securities Act.
On the same date, the Company entered into an indenture, dated as of June 1, 2021 (the “CCOH 7.5% Senior Notes Indenture”), by and among the Company, the Guarantors, and U.S. Bank National Association, as trustee.
The CCOH 7.5% Senior Notes mature on June 1, 2029 and bear interest at a rate of 7.5% per annum. Interest on the CCOH 7.5% Senior Notes is payable to the holders thereof semi-annually on June 1 and December 1 of each year, beginning on December 1, 2021.
The CCOH 7.5% Senior Notes are guaranteed on a senior unsecured basis by certain of the Company’s wholly-owned existing and future domestic subsidiaries. The CCOH 7.5% Senior Notes (i) rank pari passu in right of payment with all existing and future senior indebtedness of the Company; (ii) are senior in right of payment to all of the future subordinated indebtedness of the Company and the Guarantors; (iii) are effectively subordinated to all of the Company’s and the Guarantors’ existing and future indebtedness secured by a lien, to the extent of the value of the collateral securing such debt; and (iv) are structurally subordinated to any existing and future obligations of any existing or future subsidiaries of the Company that do not guarantee the CCOH 7.5% Senior Notes, including all of the Company’s foreign subsidiaries.
The Company may redeem all or a portion of the CCOH 7.5% Senior Notes beginning on June 1, 2024 at the redemption prices set forth in the CCOH 7.5% Senior Notes Indenture. Prior to June 1, 2024, the Company may redeem all or a portion of the CCOH 7.5% Senior Notes at a redemption price equal to 100% of the principal amount of the CCOH 7.5% Senior Notes plus the “make-whole” premium described in the CCOH 7.5% Senior Notes Indenture. The Company may redeem up to 40% of the aggregate principal amount of the CCOH 7.5% Senior Notes at any time prior to June 1, 2024 using the net proceeds from certain equity offerings at 107.5% of the principal amount of the CCOH 7.5% Senior Notes.
The CCOH 7.5% Senior Notes Indenture contains covenants that limit the Company’s ability and the ability of its restricted subsidiaries to, among other things: (i) incur or guarantee additional debt or issue certain preferred stock; (ii) redeem, purchase or retire subordinated debt; (iii) make certain investments; (iv) create restrictions on the payment of dividends or other amounts from the Company’s restricted subsidiaries that are not Guarantors; (v) enter into certain transactions with affiliates; (vi) merge or consolidate with another person, or sell or otherwise dispose of all or substantially all of the Company’s assets; (vii) sell certain assets, including capital stock of the Company’s subsidiaries; (viii) designate the Company’s subsidiaries as unrestricted subsidiaries; (ix) pay dividends, redeem or repurchase capital stock or make other restricted payments; and (x) incur certain liens.agreements.
Letters of Credit, Surety Bonds and Guarantees
As of SeptemberJune 30, 2021,2022, the Company had $43.2 million of letters of credit outstanding under its Revolving Credit Facility, resulting in $1.8$131.8 million of remaining excess availability. Additionally, as of June 30, 2022, the Company had $60.6$43.5 million of letters of credit outstanding under its receivables-based credit facility, which had a borrowing base greater than its borrowing limitReceivables-Based Credit Facility, resulting in $81.5 million of $125.0 million, with total excess availabilityavailability. As of $64.4 million. Additionally, as of SeptemberJune 30, 2021,2022, the Company had $93.8$84.9 million and $41.8$27.7 million of surety bonds and bank guarantees outstanding, respectively, a portion of which was supported by $9.0$8.8 million of cash collateral. These letters of credit, surety bonds and bank guarantees relate to various operational matters, including insurance, bid, concession and performance bonds, as well as other items.
NOTE 5 – 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, in each case 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 and tax disputes.
China Investigation
NaN former employees of Clear Media Limited (“Clear Media”), a former indirect, non-wholly-owned subsidiary of the Company, whose ordinary shares are listed on the Hong Kong Stock Exchange, have been convicted in China of certain crimes, including the crime of misappropriation of Clear Media funds, and sentenced to imprisonment. The Company is not aware of any litigation, claim or assessment pending against the Company in relation to this investigation. Based on information known to date, the Company believes any contingent liabilities arising from potential misconduct that has been or may be identified by the investigation in China are not material to the Company’s consolidated financial statements.
The Company advised both the SEC and the United StatesU.S. Department of Justice ("DOJ"(the "DOJ") of the investigation atof Clear Media and is cooperating to provide documents, interviews and information to thethese agencies. Subsequent to the announcement that the Company was considering a strategic review of its stake in Clear Media, in March 2020, Clear Channel Outdoor Holdings, Inc. received a subpoena from the staff of the SEC and a Grand Jury subpoena from the United StatesU.S. Attorney's Office for the Eastern District of New York, both in connection with the previously disclosed investigations. On April 28, 2020, the Company tendered the shares representing its 50.91% stake in Clear Media to Ever Harmonic Global Limited (“Ever Harmonic”), a special-purpose vehicle wholly ownedwholly-owned by a consortium of investors, which includes the chief executive officer and an executive director of Clear Media, and on May 14, 2020, the Company received the final proceeds of the sale. In connection with the sale of its shares in Clear Media, the Company entered into an Investigation and Litigation Support Agreement with Clear Media and Ever Harmonic that requiresrequired Clear Media, if requested by the SEC and/or the DOJ, to use reasonable efforts to timely provide relevant factual information to the SEC and/or the DOJ, among other obligations. The Litigation Support Agreement expired in March 2022.
In connection with its investigation, the SEC has also requested information regarding the Company’s historical oversight of its business in Italy and the misstatements and related forensic investigation. The Company is cooperating to provide documents and information responsive to the SEC’s inquiries and is voluntarily sharing the documents and information with the DOJ.
The Clear MediaSEC and DOJ investigation could implicate the books and records, internal controls and anti-bribery provisions of the U.S. Foreign Corrupt Practices Act, which statute and regulations provide for potential monetary penalties as well as criminal and civil sanctions. ItAs previously disclosed, the Company is possible that monetary penalties and other sanctions could be assessedmeeting with these agencies to engage in discussions about potential resolution of these matters, including potential settlement. Based on the discussions to date, the Company in connection withrecorded an estimated liability during the first quarter of 2022 to account for a potential resolution of these matters. However, at this matter. The nature andtime, the Company cannot predict the eventual scope, duration or outcome of these discussions, including whether a settlement will be reached, the amount of any potential monetary penaltypayments or the scope of injunctive or other sanctions cannot reasonablyrelief, the results of which may be estimated atmaterially adverse to the Company, its financial condition and its results of operations. At this time, and could be qualitativelythe Company is unable to reasonably estimate, or quantitatively material to the Company.
In connection with this investigation, the SEC has also requested informationprovide any assurance regarding, the Company’s historical oversightamount of its businessany potential loss in Italy and the misstatements and related forensic investigation, as described below. The Company is cooperating to provide documents and information responsive to the SEC inquiries and is voluntarily sharing the documents and information with the DOJ.
Italy Investigation
During the three months ended June 30, 2018, the Company identified misstatements associated with VAT obligations in its business in Italy, which resulted in an understatement of its VAT obligation of $16.9 million as of December 31, 2017. Upon identification of these misstatements, the Company undertook certain procedures, including a forensic investigation. In addition, the Company voluntarily disclosed the matter and findings to the Italian tax authorities in order to commence a discussion on the appropriate calculationexcess of the VAT position.amount accrued relating to this investigation.
NOTE 6 – INCOME TAXES
Income Tax Benefit (Expense)
The Company’s income tax benefit (expense) for the three and ninesix months ended SeptemberJune 30, 20212022 and 20202021 consisted of the following components:
| | (In thousands) | (In thousands) | Three Months Ended September 30, | | Nine Months Ended September 30, | (In thousands) | Three Months Ended June 30, | | Six Months Ended June 30, |
| | | 2021 | | 2020 | | 2021 | | 2020 | | 2022 | | 2021 | | 2022 | | 2021 |
| Current tax benefit (expense) | Current tax benefit (expense) | $ | 4,713 | | | $ | 1,481 | | | $ | 5,734 | | | $ | (16,319) | | Current tax benefit (expense) | $ | (3,951) | | | $ | (1,042) | | | $ | (3,020) | | | $ | 1,021 | |
| Deferred tax benefit | 2,181 | | | 28,035 | | | 30,285 | | | 49,277 | | |
| Income tax benefit | $ | 6,894 | | | $ | 29,516 | | | $ | 36,019 | | | $ | 32,958 | | |
| Deferred tax benefit (expense) | | Deferred tax benefit (expense) | (19,468) | | | 1,470 | | | (17,719) | | | 28,104 | |
| Income tax benefit (expense) | | Income tax benefit (expense) | $ | (23,419) | | | $ | 428 | | | $ | (20,739) | | | $ | 29,125 | |
The effective tax rates for the three and ninesix months ended SeptemberJune 30, 20212022 were 14.5%(55.9)% and 6.7%(15.4)%, respectively, compared to 17.8%0.3% and 5.5%6.0% for the three and ninesix months ended SeptemberJune 30, 2020,2021, respectively. These rates 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. Additionally, during the nine months ended September 30, 2020, the Company recorded $59.5 million of tax expense as a result of selling its 50.91% stake in Clear Media.
NOTE 7 – PROPERTY, PLANT AND EQUIPMENT
The Company’s property, plant and equipment consisted of the following classes of assets as of SeptemberJune 30, 20212022 and December 31, 2020:2021:
| | (In thousands) | (In thousands) | September 30,
2021 | | December 31,
2020 | (In thousands) | June 30,
2022 | | December 31,
2021 |
| Structures | Structures | $ | 2,339,960 | | | $ | 2,378,124 | | Structures | $ | 2,315,653 | | | $ | 2,356,245 | |
| Furniture and other equipment | Furniture and other equipment | 252,693 | | | 244,913 | | Furniture and other equipment | 244,306 | | | 251,084 | |
| Land, buildings and improvements | Land, buildings and improvements | 148,937 | | | 149,992 | | Land, buildings and improvements | 148,638 | | | 146,064 | |
| Construction in progress | Construction in progress | 38,261 | | | 42,366 | | Construction in progress | 51,938 | | | 54,361 | |
| Property, plant and equipment, gross | Property, plant and equipment, gross | 2,779,851 | | | 2,815,395 | | Property, plant and equipment, gross | 2,760,535 | | | 2,807,754 | |
| Less: Accumulated depreciation | Less: Accumulated depreciation | (1,995,516) | | | (1,926,571) | | Less: Accumulated depreciation | (1,983,242) | | | (1,980,508) | |
| Property, plant and equipment, net | Property, plant and equipment, net | $ | 784,335 | | | $ | 888,824 | | Property, plant and equipment, net | $ | 777,293 | | | $ | 827,246 | |
NOTE 8 – 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 SeptemberJune 30, 20212022 and December 31, 2020:2021:
| | (In thousands) | (In thousands) | September 30, 2021 | | December 31, 2020 | (In thousands) | June 30, 2022 | | December 31, 2021 |
| | | Gross Carrying Amount | | Accumulated Amortization | | Gross Carrying Amount | | Accumulated Amortization | | Gross Carrying Amount | | Accumulated Amortization | | Gross Carrying Amount | | Accumulated Amortization |
| Indefinite-lived permits | Indefinite-lived permits | $ | 707,967 | | | $ | — | | | $ | 826,528 | | | $ | — | | Indefinite-lived permits | $ | 707,643 | | | $ | — | | | $ | 717,666 | | | $ | — | |
Transit, street furniture and other outdoor
contractual rights | Transit, street furniture and other outdoor
contractual rights | 449,063 | | | (396,790) | | | 458,316 | | | (398,186) | | Transit, street furniture and other outdoor contractual rights | 428,623 | | | (385,904) | | | 446,976 | | | (397,778) | |
| Permanent easements | Permanent easements | 164,718 | | | — | | | 162,900 | | | — | | Permanent easements | 160,273 | | | — | | | 161,079 | | | — | |
| Trademarks | Trademarks | 83,569 | | | (20,477) | | | 83,569 | | | (14,229) | | Trademarks | 83,569 | | | (26,725) | | | 83,569 | | | (22,560) | |
| Other | Other | 1,638 | | | (1,448) | | | 2,072 | | | (1,691) | | Other | 1,213 | | | (1,097) | | | 1,307 | | | (1,145) | |
| Total intangible assets | Total intangible assets | $ | 1,406,955 | | | $ | (418,715) | | | $ | 1,533,385 | | | $ | (414,106) | | Total intangible assets | $ | 1,381,321 | | | $ | (413,726) | | | $ | 1,410,597 | | | $ | (421,483) | |
The Company performs its annual impairment test for indefinite-lived intangible assets as of July 1 of each year and more frequently as events or changes in circumstances warrant, as described in the Company's 20202021 Annual Report on Form 10-K.
•During Due to rising interest rates and inflation, the firstCompany tested certain of its indefinite-lived permits for impairment during the second quarter of 2021,2022, resulting in an impairment charge of $21.8 million during the three and six months ended June 30, 2022. The Company also tested its indefinite-lived permits for impairment during the first quarter of 2021 due to an increase in the discount rate, resulting in an impairment charge of $119.0 million. The Company’s annual impairment test asmillion during the six months ended June 30, 2021.
•During the first quarter of 2020, the Company tested its indefinite-lived permits for impairment due to expected negative financial statement impacts from COVID-19, resulting in an impairment charge of $123.1 million. The Company’s annual impairment test as of July 1, 2020 did not result in additional impairment; however, due to the continued impacts of COVID-19, the Company also tested its indefinite-lived permits for impairment at the end of the third quarter of 2020, resulting in an additional impairment charge of $17.5 million.
Goodwill
The following table presents changes in the goodwill balance for the Company’s segments during the ninesix months ended SeptemberJune 30, 2021:2022:
| | (In thousands) | (In thousands) | Americas | | Europe | | Other | | Consolidated | (In thousands) | Americas | | Europe | | Other | | Consolidated |
Balance as of December 31, 2020(1) | $ | 507,819 | | | $ | 201,818 | | | $ | — | | | $ | 709,637 | | |
Balance as of December 31, 2021(1) | | Balance as of December 31, 2021(1) | $ | 507,819 | | | $ | 190,885 | | | $ | — | | | $ | 698,704 | |
| | Foreign currency | Foreign currency | — | | | (9,727) | | | — | | | (9,727) | | Foreign currency | — | | | (14,343) | | | — | | | (14,343) | |
| | Balance as of September 30, 2021 | $ | 507,819 | | | $ | 192,091 | | | $ | — | | | $ | 699,910 | | |
| Balance as of June 30, 2022 | | Balance as of June 30, 2022 | $ | 507,819 | | | $ | 176,542 | | | $ | — | | | $ | 684,361 | |
(1)The balance at December 31, 20202021 is net of cumulative impairments of $2.6 billion, $191.4 million and $90.4 million for Americas, Europe and Other, respectively.
The Company performs its annual impairment test for goodwill as of July 1 of each year as described in the Company's 2020 Annual Report on Form 10-K. No goodwill impairment was recognized during the three or nine months ended September 30, 2021; however, due to the continued negative financial statement impacts of COVID-19, the Company recorded an impairment charge of $9.7 million during the three and nine months ended September 30, 2020, representing the entire goodwill balance in the Company's Latin America business.
NOTE 9 – COST-SAVINGS INITIATIVES
Restructuring PlansPlan to Reduce Headcount
During the third quarter of 2020, the Company committed to a restructuring plansplan to reduce headcount in its Europe segment, upon which it continued to execute through the Americas and Europe segments as well as in Latin America, primarily in response tofourth quarter of 2021 when the impact of COVID-19. The Americas plan and the Latin America portion of the international planimpacted employees were completed in 2020.
In Europe, the Company is continuing to make relevant announcements to employees regarding the intended reduction in force and related cost reduction and restructuring actions. In April 2021, the Company revised its international restructuring plan to reflect delays in implementing the Europe portion of the plan and additional headcount reductions in Europe. The Company expects this revised plan to be substantially complete by the end ofterminated. During the first quarter of 2023 and estimates2022, it was determined that total chargesactual costs would be less than previously estimated due to former employees no longer being eligible for severance upon finding alternative employment in accordance with the Europe portionterms of the international restructuring plan, which includes charges already incurred, will beresulting in a rangenet reversal of approximately $51 million to $56 million. Substantially all charges related tocosts during the period. Remaining costs associated with this restructuring plan were or are not expected to be severance benefits and related costs. significant.
The following table presents net costs incurred (reversed) in the Company’s Europe segment in connection with this portion of the restructuring plan during the three and ninesix months ended SeptemberJune 30, 20212022 and 20202021 and since the plan was initiated:
| | (In thousands) | (In thousands) | Three Months Ended September 30, | | Nine Months Ended September 30, | | Total to date | (In thousands) | Three Months Ended June 30, | | Six Months Ended June 30, | | Total to date |
| | | 2021 | | 2020 | | 2021 | | 2020 | | September 30,
2021 | | 2022 | | 2021 | | 2022 | | 2021 | | June 30,
2022 |
| Costs incurred in Europe segment: | | | | | | | | | | |
| Costs incurred (reversed) in Europe segment, net: | | Costs incurred (reversed) in Europe segment, net: | | | | | | | | | |
Direct operating expenses(1) | Direct operating expenses(1) | $ | 7,984 | | | $ | 140 | | | $ | 17,119 | | | $ | 140 | | | $ | 19,501 | | Direct operating expenses(1) | $ | 196 | | | $ | 8,850 | | | $ | (153) | | | $ | 9,135 | | | $ | 16,544 | |
Selling, general and administrative expenses(1) | Selling, general and administrative expenses(1) | 8,322 | | | 3,139 | | | 16,398 | | | 3,139 | | | 22,375 | | Selling, general and administrative expenses(1) | 416 | | | 6,696 | | | 533 | | | 8,076 | | | 22,995 | |
| Total charges | $ | 16,306 | | | $ | 3,279 | | | $ | 33,517 | | | $ | 3,279 | | | $ | 41,876 | | |
| Total charges, net | | Total charges, net | $ | 612 | | | $ | 15,546 | | | $ | 380 | | | $ | 17,211 | | | $ | 39,539 | |
(1)Costs are categorized as Restructuring and other costs and are therefore excluded from Segment Adjusted EBITDA.
Additionally, the Company recognized corporate costs related to this restructuring plan of $0.2 million and $1.1 million during the three and six months ended June 30, 2021, respectively. During the three and six months ended June 30, 2022, the Company reversed $0.5 million of these costs.
As of SeptemberJune 30, 2021,2022, the total liability related to thesethis restructuring plansplan was $28.0 million.$12.6 million, which the Company expects to pay this year, although payments may be made through the end of the second quarter of 2023 in accordance with the terms of the restructuring plan. The following table presents changes in thethis liability balance during the ninesix months ended SeptemberJune 30, 2021:2022:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (In thousands) | Americas | | Europe | | Other | | Corporate | | Total |
| Liability balance as of December 31, 2020 | $ | 2,533 | | | $ | 2,455 | | | $ | — | | | $ | 818 | | | $ | 5,806 | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| Costs incurred | — | | | 33,517 | | | — | | | 1,077 | | | 34,594 | |
| Costs paid or otherwise settled | (2,364) | | | (8,619) | | | — | | | (1,393) | | | (12,376) | |
| | | | | | | | | |
| Liability balance as of September 30, 2021 | $ | 169 | | | $ | 27,353 | | | $ | — | | | $ | 502 | | | $ | 28,024 | |
| | | | | | | | | | | | | | | | | | | | | |
| (In thousands) | | | Europe | | | | Corporate | | Total |
| Liability balance as of December 31, 2021 | | | $ | 23,860 | | | | | $ | 456 | | | $ | 24,316 | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
Costs incurred (reversed), net(1) | | | 380 | | | | | (456) | | | (76) | |
| Costs paid or otherwise settled | | | (11,621) | | | | | — | | | (11,621) | |
| | | | | | | | | |
| Liability balance as of June 30, 2022 | | | $ | 12,619 | | | | | $ | — | | | $ | 12,619 | |
(1)Substantially all costs related to this restructuring plan were severance benefits and related costs.
Other Restructuring Costs
In addition, during the three and nine months ended September 30, 2021, the Company has incurred restructuring costs of $0.2 million and $1.7 million, respectively, in Corporate and $0.3 million and $0.4 million, respectively, in Europe related to termination benefits associated with various other cost-savings initiatives outside of the aforementioned restructuring plans. Theseplan, primarily related to one-time termination benefits, including corporate costs of $1.3 million and $0.1 million during the three months ended June 30, 2022 and 2021, respectively, and $2.2 million and $1.5 million during the six months ended June 30, 2022 and 2021, respectively. The Company also incurred additional restructuring costs in Europe of $0.1 million and $0.3 million during the three and six months ended June 30, 2022, respectively. As of June 30, 2022, the total remaining liability related to these other cost-savings initiatives have been substantially completedwas approximately $2.5 million and is expected to be paid asthrough the first half of September 30, 2021.
NOTE 10 – NET LOSS PER SHARE
The following table presents the computation of net loss per share for the three and ninesix months ended SeptemberJune 30, 20212022 and 2020:2021:
| | (In thousands, except per share data) | (In thousands, except per share data) | Three Months Ended
September 30, | | Nine Months Ended
September 30, | (In thousands, except per share data) | Three Months Ended
June 30, | | Six Months Ended
June 30, |
| | | 2021 | | 2020 | | 2021 | | 2020 | | 2022 | | 2021 | | 2022 | | 2021 |
| Numerator: | Numerator: | | | | | | | | Numerator: | | | | | | | |
| Net loss attributable to the Company – common shares | Net loss attributable to the Company – common shares | $ | (40,831) | | | $ | (135,937) | | | $ | (497,764) | | | $ | (550,626) | | Net loss attributable to the Company – common shares | $ | (65,664) | | | $ | (124,580) | | | $ | (155,532) | | | $ | (456,933) | |
| Denominator: | Denominator: | | | | | | | | Denominator: | | | | | | | |
| Weighted average common shares outstanding – basic | Weighted average common shares outstanding – basic | 469,234 | | | 464,858 | | | 467,994 | | | 464,268 | | Weighted average common shares outstanding – basic | 475,125 | | | 468,847 | | | 472,859 | | | 467,364 | |
| | Weighted average common shares outstanding – diluted | Weighted average common shares outstanding – diluted | 469,234 | | | 464,858 | | | 467,994 | | | 464,268 | | Weighted average common shares outstanding – diluted | 475,125 | | | 468,847 | | | 472,859 | | | 467,364 | |
| Net loss attributable to the Company per share of common stock: | Net loss attributable to the Company per share of common stock: | | | | | | | | Net loss attributable to the Company per share of common stock: | | | | | | | |
| Basic | Basic | $ | (0.09) | | | $ | (0.29) | | | $ | (1.06) | | | $ | (1.19) | | Basic | $ | (0.14) | | | $ | (0.27) | | | $ | (0.33) | | | $ | (0.98) | |
| Diluted | Diluted | $ | (0.09) | | | $ | (0.29) | | | $ | (1.06) | | | $ | (1.19) | | Diluted | $ | (0.14) | | | $ | (0.27) | | | $ | (0.33) | | | $ | (0.98) | |
Outstanding equity awards of 27.923.7 million and 11.622.6 million shares for the three months ended SeptemberJune 30, 20212022 and 2020,2021, respectively, and 25.525.7 million and 12.524.3 million for the ninesix months ended SeptemberJune 30, 20212022 and 2020,2021, respectively, were not included in the computation of diluted earnings per share because to do so would have been anti-dilutive.
NOTE 11 — OTHER INFORMATION
Restricted Cash
The following table provides a reconciliation ofreconciles cash and cash equivalents reported in the Consolidated Balance Sheets to the cash, cash equivalents and restricted cash reported in the Consolidated Balance Sheets to the total of the amounts reported in the Consolidated Statements of Cash Flows:
| | (In thousands) | (In thousands) | September 30,
2021 | | December 31,
2020 | (In thousands) | June 30,
2022 | | December 31,
2021 |
| Cash and cash equivalents in the Balance Sheet | Cash and cash equivalents in the Balance Sheet | $ | 599,999 | | | $ | 785,308 | | Cash and cash equivalents in the Balance Sheet | $ | 314,616 | | | $ | 410,767 | |
| | Restricted cash included in: | Restricted cash included in: | | Restricted cash included in: | |
| Other current assets | Other current assets | 1,200 | | | 1,433 | | Other current assets | 1,637 | | | 1,685 | |
| | Other assets | Other assets | 7,635 | | | 8,320 | | Other assets | 8,574 | | | 7,519 | |
| Total cash, cash equivalents and restricted cash in the Statement of Cash Flows | Total cash, cash equivalents and restricted cash in the Statement of Cash Flows | $ | 608,834 | | | $ | 795,061 | | Total cash, cash equivalents and restricted cash in the Statement of Cash Flows | $ | 324,827 | | | $ | 419,971 | |
Accounts Receivable and Allowance for Credit Losses
The following table discloses the components of “Accounts receivable, net,” as reported in the Consolidated Balance Sheets:
| | (In thousands) | (In thousands) | September 30,
2021 | | December 31,
2020 | (In thousands) | June 30,
2022 | | December 31,
2021 |
| Accounts receivable | Accounts receivable | $ | 561,931 | | | $ | 500,372 | | Accounts receivable | $ | 606,397 | | | $ | 666,888 | |
| Less: Allowance for credit losses | Less: Allowance for credit losses | (24,673) | | | (32,043) | | Less: Allowance for credit losses | (21,566) | | | (23,772) | |
| Accounts receivable, net | Accounts receivable, net | $ | 537,258 | | | $ | 468,329 | | Accounts receivable, net | $ | 584,831 | | | $ | 643,116 | |
Credit loss expense (reversal) related to accounts receivable was $(0.3)$0.5 million and $3.4$(2.3) million during the three months ended SeptemberJune 30, 20212022 and 2020,2021, respectively, and $(3.4)$0.8 million and $15.3$(3.0) million during the ninesix months ended SeptemberJune 30, 2022 and 2021, and 2020, respectively.
Other Comprehensive Income (Loss)
There were no significant changes in deferred income tax liabilities resulting from adjustments to other comprehensive income (loss) during the three and ninesix months ended SeptemberJune 30, 20212022 and 2020.
Share-Based Compensation
On May 5, 2021, the Company’s stockholders approved the adoption of the 2012 Second Amended and Restated Equity Incentive Plan (the “2021 Plan”), which amends and restates the 2012 Amended and Restated Stock Incentive Plan. The 2021 Plan is a broad-based incentive plan that provides for granting stock options, stock appreciation rights, restricted stock, restricted stock units, and performance-based cash and stock awards to any of the Company’s or its subsidiaries’ present or future directors, officers, employees, consultants, or advisers. The Company had 34,129,442 shares available for issuance under the 2021 Plan as of September 30, 2021, assuming a 100% payout of the Company’s outstanding performance stock units.
On July 27, 2021,4, 2022, the Compensation Committee of the Company’s Board of Directors approved grants of 5.35.2 million restricted stock units ("RSUs"(“RSUs”) and 2.11.8 million performance stock units ("PSUs"(“PSUs”) to certain of its employees.
•The RSUs generally vest in three3 equal annual installments on each of April 1, 2022,2023, April 1, 20232024 and April 1, 2024,2025, provided that the recipient is still employed by, or providing services to, the Company on each such vesting date.
•The PSUs will vest and become earned based on the achievement of the Company’s total shareholder return relative to the Company’s peer group (the “Relative TSR”) over a performance period commencing on JulyApril 1, 20212022 and ending on March 31, 20242025 (the “Performance Period”). If the Company achieves Relative TSR at the 90th90th percentile or higher, the PSUs will be earned at 150% of the target number of shares. Ifshares; if the Company achieves Relative TSR at the 60th60th percentile, the PSUPSUs will be earned at 100% of the target number of shares. Ifshares; if the Company achieves Relative TSR at the 30th30th percentile, the PSUs will be earned at 50% of the target number of shares.shares; and if the Company achieves Relative TSR below the 30th percentile, no PSUs will be earned. To the extent Relative TSR is between vestingachievement levels, the portion of the PSUs that become vestedis earned will be determined using straight linestraight-line interpolation. Notwithstanding the foregoing, to the extent the Company’s absolute total shareholder return over the Performance Period is less than 0%, the maximum payout shall not be greater than 100% of the target number of shares. The PSUs are considered market conditionmarket-condition awards pursuant to ASC Topic 260, Earnings Per Share.
Amendment to Shareholder Rights Plan
On May 14, 2021, the Company’s Board of Directors approved an amendment to the Company’s existing shareholder rights plan (the “Rights Plan”), extending its expiration date from May 14, 2021 to April 15, 2022. All other terms and conditions of the Rights Plan adopted in May 2020 remain unchanged.
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Management’s discussion and analysis of our financial condition and results of operations (“MD(the “MD&A”) should be read in conjunction with the condensed consolidated financial statements and related notes contained in Item 1 of this Quarterly Report on Form 10-Q and the Company's 20202021 Annual Report on Form 10-K. All references in this Quarterly Report on Form 10-Q to the “Company,” “we,” “us” and “our” arerefer to Clear Channel Outdoor Holdings, Inc. and its consolidated subsidiaries, and all references to “CCOH” are to Clear Channel Outdoor Holdings, Inc. without its consolidated subsidiaries. The MD&A is organized as follows:
•Overview – Discussion of the nature, key developments and trends of our business in order to provide context for the remainder of thethis MD&A. •Results of Operations – Analysis of our financial results of operations at the consolidated and segment levels. •Liquidity and Capital Resources – DiscussionAnalysis of our cash flows, anticipatedshort- and long-term liquidity and discussion of our material cash requirements and the anticipated sources and uses of capital and liquidity and debt covenants.funds needed to satisfy such requirements. •Critical Accounting Estimates – Discussion of accounting estimates that we believe are most important to understanding the assumptions and judgments incorporated in our consolidated financial statements.OVERVIEW
Description of Our Business and Segments
Our revenue is derived from selling advertising space on the displays we own or operate in key markets worldwide, consisting primarily of billboards, street furniture and transit displays.worldwide. We have two reportable business segments, which we believe reflect how the Company is currently managed: Americas, which consists of operations primarily in the U.S., and Europe, which consists of operations in Europe and Singapore. Our remaining operating segments, which include China for periods before its sale on April 28, 2020 andsegment of Latin America dodoes not meet the quantitative thresholdsthreshold to qualify as a reportable segmentssegment and areis disclosed as “Other.”“Other” herein. Each segment provides out-of-home advertising services in its respective geographic region using various digital and traditional display types.
In December 2021, our Board of Directors authorized a review of strategic alternatives for our European business, including a possible sale. Most recently, our Board of Directors authorized us to focus the strategic review on the potential disposal of certain of our lower-margin European assets (and/or other European assets of lower priority to our European business on the whole), while retaining, for now, our higher-margin European assets, which are performing well. However, there can be no assurance that this strategic review will result in any transaction(s) or particular outcome(s). We have not set a timetable for completion of this strategic review, may suspend the process at any time and do not intend to make further announcements regarding the process unless and until our Board of Directors approves a course of action for which further disclosure is appropriate.
Macroeconomic Indicators, Seasonality and Recent Developments
Advertising revenue for our business is highly correlated to changes in gross domestic product (“GDP”) as advertising spending has historically trended in line with GDP, both domestically and internationally. Additionally, our international results are impacted by the economic conditions in the foreign markets in which we have operations and fluctuations in foreign currency exchange rates. Current adverse macroeconomic and geopolitical conditions, including heightened inflation and higher interest rates, could also adversely affect our results.
Due to seasonality, the results for the interim period are not indicative of expected results for the full year. We typically experience our lowestweakest financial performance in the first quarter of the calendar year, which is generally offset during the remainder of the year as our business typically experiences its strongest performance in the second and fourth quarters of the calendar year. However, as described below, our financial performance in 2020 and 2021 has been negatively impacted by COVID-19. The extent to which COVID-19 will impact our results for the remainder of the year will depend on future developments, which remain uncertain.
COVID-19 Update
As described in our 20202021 Annual Report on Form 10-K, COVID-19 had a significant adverse impact on our results of operations starting in March 2020, with the severity of the negative impacts on out-of-home metrics, travel patterns, consumer behavior and economic activity fluctuating throughout the remainder of the year based on the evolving nature of COVID-19 developments in each geographic region. Induring the first quarter of 2021, and we did not experience a return to our pre-COVID-19 historical seasonal levels of revenue until the fourth quarter of 2021. To a large extent, we continued to see revenues remain significantly below historic norms throughout our business; however, we saw positive trends in revenue for eachexperience similar pre-COVID-19 levels of our segmentsactivity during the second and third quarters as mobility levels continued to increase.
Our results for the third quarter reflect both year-over-year and sequential quarter increases in revenue.
•In our Americas segment, we saw increases in revenue across all products, largely driven by strength in our billboard inventory and growth in revenue from digital displays. Additionally, during the third quarter we saw strength in airport display revenue as traveling began to rebound.
•In our Europe segment, the relaxation of COVID-19 restrictions and increased vaccination levels have led to significant improvements in our revenue performance, particularly in the U.K. where revenues exceeded 2019 levels. Throughout Europe we saw strong performance in our street furniture and retail displays.
Currently, the gap to normalized quarterly booking activity is narrowing as most business segment activity is approaching historical seasonal levels. However, in certain instances we continue to experience customer advertising buying decisions later in the buying cycle, particularly in Europe.
Since the onset of the pandemic, we have taken various measures to increase our liquidity and preserve and strengthen our financial flexibility, including aggressive operating cost and capital expenditure savings initiatives, restructuring plans to reduce headcount and other targeted liquidity measures.2022. As our operating performance improves,has improved, we continue to reassess and modify these actions accordingly, including ceasinghave ceased certain of the temporary operating cost savings initiatives we implemented in response to COVID-19 and increasinghave increased our investment in our business through additional capital expenditures. However, the duration and severity
Executive Summary
The key developments in our business during the nine months ended September 30, 2021 are summarized below:
•Consolidated revenue increased 14.1% as we continue to recover from COVID-19’s impacts.Contents•During the nine months ended September 30, 2021, we recognized reductions of expense for negotiated rent abatements and European governmental support and wage subsidies of $78.9 million and $13.1 million, respectively.
•In February, we issued $1.0 billion aggregate principal amount of 7.75% Senior Notes due 2028 (the "CCOH 7.75% Senior Notes"). In March, we used the net proceeds from this issuance to redeem $940.0 million aggregate principal amount of the 9.25% Senior Notes due 2024 (the “CCWH Senior Notes”).
•In April, we revised the Europe portion of our international restructuring plan. We expect this portion of the plan to be substantially complete by the end of the first quarter of 2023 with total charges, including charges already incurred, in a range of approximately $51 million to $56 million and to result in pre-tax annual cost savings in excess of $28 million. During the nine months ended September 30, 2021, we incurred $33.5 million of costs pursuant to this plan.
•In May, we entered into a second amendment to the Senior Secured Credit Agreement to, among other things, extend the suspended springing financial covenant through December 31, 2021 and further delay the scheduled financial covenant step-down until September 30, 2022.
•In June, we issued $1.05 billion aggregate principal amount of 7.5% Senior Notes due 2029 (the “CCOH 7.5% Senior Notes”) and used the net proceeds from this issuance to redeem the remaining outstanding CCWH Senior Notes. Additionally, a non-guarantor European subsidiary borrowed approximately $34.7 million, at current exchange rates, through a state-guaranteed loan program established in response to COVID-19.
RESULTS OF OPERATIONS
The discussion of our results of operations is presented on both a consolidated and segment basis.
•Our operating segment profit measure is Segment Adjusted EBITDA, which 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. The material components of Segment Adjusted EBITDA are discussed below on both a consolidated and segment basis.
•Corporate expenses, depreciation and amortization, impairment charges, other operating income and expense, all non-operating income and expenses, and income taxes are managed on a total company basis and are, therefore, included only in our discussion of consolidated results.
Revenue and expenses “excluding the impact of movements in foreign exchange rates” in this MD&A are presented because management believes that viewing certain financial results without the impact of fluctuations in foreign currency rates facilitates period-to-period comparisons of business performance and provides useful information to investors. Revenue and expenses “excluding the impact of movements in foreign exchange rates” are calculated by converting the current period’s revenue and expenses in local currency to U.S. dollars using average foreign exchange rates for the comparable period.
Due to seasonality and uncertainty surrounding COVID-19, as previously described in the "Overview" discussion, the results for the interim period are not indicative of expected results for the full year.
Consolidated Results of Operations
The comparison of our historical results of operations for the three and ninesix months ended SeptemberJune 30, 20212022 to the three and ninesix months ended SeptemberJune 30, 20202021 is as follows:
| | (In thousands) | (In thousands) | Three Months Ended
September 30, | | % | | Nine Months Ended
September 30, | | % | (In thousands) | Three Months Ended
June 30, | | % | | Six Months Ended
June 30, | | % |
| | | 2021 | | 2020 | | Change | | 2021 | | 2020 | | Change | | 2022 | | 2021 | | Change | | 2022 | | 2021 | | Change |
| Revenue | Revenue | $ | 596,416 | | | $ | 447,505 | | | 33.3% | | $ | 1,498,406 | | | $ | 1,313,220 | | | 14.1% | Revenue | $ | 643,380 | | | $ | 531,082 | | | 21.1% | | $ | 1,169,068 | | | $ | 901,990 | | | 29.6% |
| Operating expenses: | Operating expenses: | | Operating expenses: | |
| Direct operating expenses (excludes depreciation and amortization) | 324,707 | | | 290,610 | | | 11.7% | | 914,221 | | | 895,432 | | | 2.1% | |
| Selling, general and administrative expenses (excludes depreciation and amortization) | 118,158 | | | 106,871 | | | 10.6% | | 328,593 | | | 330,263 | | | (0.5)% | |
| Corporate expenses (excludes depreciation and amortization) | 41,806 | | | 30,719 | | | 36.1% | | 113,576 | | | 99,722 | | | 13.9% | |
Direct operating expenses(1) | | Direct operating expenses(1) | 331,325 | | | 306,224 | | | 8.2% | | 652,527 | | | 589,514 | | | 10.7% |
Selling, general and administrative expenses(1) | | Selling, general and administrative expenses(1) | 118,294 | | | 112,865 | | | 4.8% | | 227,251 | | | 210,435 | | | 8.0% |
Corporate expenses(1) | | Corporate expenses(1) | 39,081 | | | 37,728 | | | 3.6% | | 82,726 | | | 71,770 | | | 15.3% |
| Depreciation and amortization | Depreciation and amortization | 65,600 | | | 62,427 | | | 5.1% | | 190,019 | | | 204,372 | | | (7.0)% | Depreciation and amortization | 60,577 | | | 62,567 | | | (3.2)% | | 120,984 | | | 124,419 | | | (2.8)% |
| Impairment charges | Impairment charges | — | | | 27,263 | | | 118,950 | | | 150,400 | | | Impairment charges | 21,805 | | | — | | | 21,805 | | | 118,950 | | |
| | Other operating expense (income), net | Other operating expense (income), net | (2,422) | | | 5,528 | | | (4,045) | | | (58,051) | | | Other operating expense (income), net | 1,367 | | | (1,740) | | | (3,544) | | | (1,623) | | |
| Operating income (loss) | Operating income (loss) | 48,567 | | | (75,913) | | | (162,908) | | | (308,918) | | | Operating income (loss) | 70,931 | | | 13,438 | | | 67,319 | | | (211,475) | | |
| Interest expense, net | Interest expense, net | (84,276) | | | (90,551) | | | | | (267,211) | | | (269,435) | | | | Interest expense, net | (86,594) | | | (90,242) | | | | | (169,392) | | | (182,935) | | | |
| Loss on extinguishment of debt | Loss on extinguishment of debt | — | | | (5,389) | | | (102,757) | | | (5,389) | | | Loss on extinguishment of debt | — | | | (51,656) | | | — | | | (102,757) | | |
| Other income (expense), net | Other income (expense), net | (11,973) | | | 6,493 | | | | | (1,788) | | | (16,886) | | | | Other income (expense), net | (26,235) | | | 3,631 | | | | | (32,234) | | | 10,185 | | | |
| Loss before income taxes | Loss before income taxes | (47,682) | | | (165,360) | | | | | (534,664) | | | (600,628) | | | | Loss before income taxes | (41,898) | | | (124,829) | | | | | (134,307) | | | (486,982) | | | |
| Income tax benefit | 6,894 | | | 29,516 | | | | | 36,019 | | | 32,958 | | | | |
| Income tax benefit (expense) | | Income tax benefit (expense) | (23,419) | | | 428 | | | | | (20,739) | | | 29,125 | | | |
| Consolidated net loss | Consolidated net loss | (40,788) | | | (135,844) | | | | | (498,645) | | | (567,670) | | | | Consolidated net loss | (65,317) | | | (124,401) | | | | | (155,046) | | | (457,857) | | | |
| Less amount attributable to noncontrolling interest | Less amount attributable to noncontrolling interest | 43 | | | 93 | | | | | (881) | | | (17,044) | | | | Less amount attributable to noncontrolling interest | 347 | | | 179 | | | | | 486 | | | (924) | | | |
| Net loss attributable to the Company | Net loss attributable to the Company | $ | (40,831) | | | $ | (135,937) | | | | | $ | (497,764) | | | $ | (550,626) | | | | Net loss attributable to the Company | $ | (65,664) | | | $ | (124,580) | | | | | $ | (155,532) | | | $ | (456,933) | | | |
(1)Excludes depreciation and amortization.
Consolidated Revenue
During the first half of 2021, revenue throughout our business was adversely affected by COVID-19.
•Consolidated revenue increased $148.9$112.3 million, or 33.3%21.1%, during the three months ended SeptemberJune 30, 20212022 compared to the same period of 2020.2021. Excluding the $6.7$35.6 million impact of movements in foreign exchange rates, consolidated revenue increased $142.2$147.9 million, or 31.8%27.9%. During the third quarter
•Consolidated revenue increased $185.2$267.1 million, or 14.1%29.6%, during the ninesix months ended SeptemberJune 30, 20212022 compared to the same period of 2020.2021. Excluding the $42.5$48.9 million impact of movements in foreign exchange rates, consolidated revenue increased $142.7$315.9 million, or 10.9%35.0%. As we continue to recover from the adverse effects of COVID-19, we have seen increases in revenue across our products, with the exception of our transit business, including airports, which was the most significantly impacted by lockdowns and mobility restrictions resulting from COVID-19. This increase in revenue was partially offset by the sale of our Clear Media business on April 28, 2020.
Consolidated Direct Operating Expenses
Consolidated direct operating expenses increased $34.1during the three and six months ended June 30, 2022 compared to the same periods of 2021 primarily driven by higher site lease expense due to higher revenue and lower negotiated rent abatements. We also experienced higher production, maintenance and installation expenses driven by the increase in revenue. These increases were partially offset by lower costs for our restructuring plan to reduce headcount in our Europe segment.
•Consolidated direct operating expenses increased $25.1 million, or 11.7%8.2%, during the three months ended SeptemberJune 30, 20212022 compared to the same period of 2020.2021. Excluding the $4.2$22.8 million impact of movements in foreign exchange rates, consolidated direct operating expenses increased $29.9$47.9 million, or 10.3%, mainly due to higher site lease expense driven by higher revenue and higher charges related to our restructuring plans to reduce headcount.15.6%.
•Consolidated direct operating expenses increased $18.8$63.0 million, or 2.1%10.7%, during the ninesix months ended SeptemberJune 30, 20212022 compared to the same period of 2020.2021. Excluding the $37.5$34.0 million impact of movements in foreign exchange rates, consolidated direct operating expenses decreased $18.7increased $97.0 million, or 2.1%, driven by the sale of our Clear Media business and higher negotiated rent abatements. These decreases were partially offset by higher variable rent related to higher revenue, higher charges related to our restructuring plans to reduce headcount, and higher employee compensation costs as we ceased certain temporary operating cost savings initiatives and experienced a reduction in European governmental wage subsidies.16.5%.
The following table provides additional information about certain of the drivers of consolidated direct operating expenses for the three and ninesix months ended SeptemberJune 30, 20212022 and 2020:2021:
| | (In thousands) | (In thousands) | Three Months Ended
September 30, | | Nine Months Ended
September 30, | (In thousands) | Three Months Ended
June 30, | | Six Months Ended
June 30, |
| | 2021 | | 2020 | | 2021 | | 2020 | | 2022 | | 2021 | | 2022 | | 2021 |
| Reductions of consolidated rent expense on lease and non-lease contracts due to negotiated rent abatements | $ | 21,617 | | | $ | 23,766 | | | $ | 78,873 | | | $ | 53,145 | | |
European governmental support and wage subsidies(1) | 5,474 | | | 5,609 | | | 10,397 | | | 9,767 | | |
| Reductions of rent expense on lease and non-lease contracts from negotiated rent abatements | | Reductions of rent expense on lease and non-lease contracts from negotiated rent abatements | $ | 14,150 | | | $ | 34,604 | | | $ | 24,341 | | | $ | 57,256 | |
| Restructuring and other costs(2)(1) | Restructuring and other costs(2)(1) | 8,087 | | | 1,363 | | | 18,066 | | | 2,408 | | Restructuring and other costs(2)(1) | 236 | | | 9,082 | | | 240 | | | 9,979 | |
(1)Includes rent subsidiesseverance and related costs (reversals) for our restructuring plan to reduce headcount in our Europe segment of $5.4$0.2 million and $3.9$8.9 million during the three months ended SeptemberJune 30, 20212022 and 2020,2021, respectively, and $8.7$(0.2) million and $3.9$9.1 million during the ninesix months ended SeptemberJune 30, 2022 and 2021, and 2020, respectively.
(2)Includes severance and related costs for our restructuring plans to reduce headcount of $8.0 million and $17.1 million during the three and nine months ended September 30, 2021, respectively, and $0.5 million during the three and nine months ended September 30, 2020.
Consolidated Selling, General and Administrative (“SG&A”) Expenses
Consolidated SG&A expenses increased $11.3during the three and six months ended June 30, 2022 compared to the same periods of 2021 mainly due to higher employee compensation costs largely driven by improvements in operating performance. Credit loss expense was higher due to an increase in current year revenue and prior year reductions in our allowance for credit losses. Higher credit loss expense and increases in other SG&A expenses were partially offset by lower costs for our restructuring plan to reduce headcount in our Europe segment.
•Consolidated SG&A expenses increased $5.4 million, or 10.6%4.8%, during the three months ended SeptemberJune 30, 20212022 compared to the same period of 2020.2021. Excluding the $1.3$7.1 million impact of movements in foreign exchange rates, consolidated SG&A expenses increased $10.0$12.5 million, or 9.4%, driven by higher employee compensation costs due to improvements in operating performance and higher charges related to our restructuring plans to reduce headcount.11.1%.
•Consolidated SG&A expenses decreased $1.7increased $16.8 million, or 0.5%8.0%, during the ninesix months ended SeptemberJune 30, 20212022 compared to the same period of 2020.2021. Excluding the $11.4$10.4 million impact of movements in foreign exchange rates, consolidated SG&A expenses decreased $13.1increased $27.2 million, or 3.9%, driven by the sale of our Clear Media business and lower credit loss expense related to our recovery from COVID-19. These decreases were partially offset by higher charges related to our restructuring plans to reduce headcount and higher employee compensation costs driven by improvements in operating performance, net of savings from headcount reductions.12.9%.
The following table provides additional information about certain of the drivers of consolidatedrestructuring and other costs included within SG&A expenses forduring the three and ninesix months ended SeptemberJune 30, 20212022 and 2020:2021:
| | (In thousands) | (In thousands) | Three Months Ended
September 30, | | Nine Months Ended
September 30, | (In thousands) | Three Months Ended
June 30, | | Six Months Ended
June 30, |
| | 2021 | | 2020 | | 2021 | | 2020 | | 2022 | | 2021 | | 2022 | | 2021 |
| European governmental support and wage subsidies | $ | 855 | | | $ | 1,548 | | | $ | 2,685 | | | $ | 4,743 | | |
| Restructuring and other costs(1) | Restructuring and other costs(1) | 9,144 | | | 5,538 | | | 17,934 | | | 8,597 | | Restructuring and other costs(1) | 989 | | | 6,969 | | | 1,419 | | | 8,790 | |
(1)Includes severance and related costs for our restructuring plansplan to reduce headcount in our Europe segment of $8.3$0.4 million and $16.4$6.7 million during the three and nine months ended SeptemberJune 30, 2022 and 2021, respectively, and $4.8$0.5 million and $8.1 million during the three and ninesix months ended SeptemberJune 30, 2020.2022 and 2021, respectively.
Corporate Expenses
Corporate expenses increased $11.1$1.4 million, or 36.1%3.6%, during the three months ended SeptemberJune 30, 20212022 compared to the same period of 2020.2021. Excluding the $0.6$0.7 million impact of movements in foreign exchange rates, corporate expenses increased $10.5$2.1 million, or 34.2%.
5.4%, driven by higher employee compensation costs, including share-based compensation. Corporate expenses increased $13.9$11.0 million, or 13.9%15.3%, during the ninesix months ended SeptemberJune 30, 20212022 compared to the same period of 2020.2021. Excluding the $3.0$0.8 million impact from movements in foreign exchange rates, corporate expenses increased $10.8$11.8 million, or 10.9%.
These increases were largely16.4%, primarily due to higher employee compensation costs, including share-based compensation, and higher restructuring and other costs driven by higher variable incentive compensation related to improvementsan increase in operating performance and higher share-based compensation.estimated legal liabilities.
The following table provides additional information about restructuring and other costs included withincertain drivers of corporate expenses for the three and ninesix months ended SeptemberJune 30, 20212022 and 2020:2021:
| | (In thousands) | (In thousands) | Three Months Ended
September 30, | | Nine Months Ended
September 30, | (In thousands) | Three Months Ended
June 30, | | Six Months Ended
June 30, |
| | 2021 | | 2020 | | 2021 | | 2020 | | 2022 | | 2021 | | 2022 | | 2021 |
| Share-based compensation expense | | Share-based compensation expense | $ | 6,876 | | | $ | 4,506 | | | $ | 11,590 | | | $ | 8,457 | |
Restructuring and other costs(1) | Restructuring and other costs(1) | $ | 1,498 | | | $ | 2,345 | | | $ | 8,612 | | | $ | 10,676 | | Restructuring and other costs(1) | $ | 1,478 | | | $ | 2,460 | | | 10,548 | | | 7,114 | |
(1)Includes severance and related costs (reversals) for our restructuring plansplan to reduce headcount in our Europe segment of $1.1 million during the nine months ended September 30, 2021 and $1.9$(0.5) million during the three and ninesix months ended SeptemberJune 30, 2020.2022 and $0.2 million and $1.1 million during the three and six months ended June 30, 2021, respectively.
Depreciation and Amortization
Depreciation and amortization increased $3.2decreased $2.0 million, or 5.1%3.2%, during the three months ended SeptemberJune 30, 20212022 compared to the same period of 2020.2021. Excluding the $0.6$2.4 million impact of movements in foreign exchange rates, depreciation and amortization increased $2.6$0.4 million, or 4.2%0.7%.
Depreciation and amortization decreased $14.4$3.4 million, or 7.0%2.8%, during the ninesix months ended SeptemberJune 30, 20212022 compared to the same period of 2020.2021. Excluding the $4.3$3.6 million impact of movements in foreign exchange rates, depreciation and amortization decreased $18.7increased $0.2 million, or 9.1%, mainly driven by the sale of our Clear Media business.0.1%.
Impairment Charges
WeDuring the three and six months ended June 30, 2022, we recognized an impairment chargescharge of $21.8 million on our Americas indefinite-lived permits, driven by rising interest rates and inflation.
During the six months ended June 30, 2021, we recognized an impairment charge of $119.0 million and $150.4 million during the nine months ended September 30, 2021 and 2020, respectively,on our Americas indefinite-lived permits, driven by increasesan increase in the discount rate and reductionsreduction in projected cash flows related to the negative impacts of COVID-19 on our financial statements, as follows:
•During the first quarter of 2021, we recognized impairment charges of $119.0 million related to our Americas indefinite-lived permits.
•During the first and third quarters of 2020, we recognized impairment charges of $123.1 million and $17.5 million, respectively, related to our Americas indefinite-lived permits. During the third quarter of 2020, we also impaired the goodwill allocated to our Latin America business, resulting in $9.7 million of additional impairment charges.COVID-19.
Other Operating Expense (Income), Net
For the three months ended SeptemberJune 30, 20212022 and 2020,2021, we recognized other operating expense, net, of $1.4 million and other operating income, net, of $2.4$1.7 million, and other operatingrespectively. The increase in expense net,was driven by costs related to the strategic review of $5.5 million, respectively.our Europe segment.
For the nine months ended September 30, 2021 and 2020, we recognized otherOther operating income, net, of $4.0$3.5 million and $58.1 million, respectively. The income in 2020during the six months ended June 30, 2022 was primarily driven by compensation received from local governments for the condemnation and removal of billboards, less a gain onreduction in the saleunderlying value of the condemned assets in certain markets in our Clear Media business of $75.2 million,Americas segment, partially offset by legal costs and consulting fees incurred related to the sale.strategic review of our Europe segment. Other operating income, net was $1.6 million during the six months ended June 30, 2021.
Interest Expense, Net
Interest expense, net, decreased $6.3$3.6 million and $13.5 million during the three and six months ended SeptemberJune 30, 20212022, respectively, compared to the same periodperiods of 2020,2021 primarily driven bydue to lower interest rates as a result of refinancing the refinancing of the CCWHClear Channel Worldwide Holdings, Inc. 9.25% Senior Notes duringDue 2024 (the “CCWH Senior Notes”) in the first half of 2021.
Interest expense, net, decreased $2.2 Lower interest due to repayment of the $130.0 million duringdraw under our Revolving Credit Facility in the nine months ended September 30,fourth quarter of 2021 compared to the same period of 2020. This decrease was drivenoffset by lowerhigher interest rates on our Term Loan Facility due to a favorable change in the interest rate, partially offset by the issuance of the Clear Channel International B.V. 6.625% Senior Secured Notes due 2025 (the “CCIBV Senior Secured Notes”) in August 2020.Facility.
Loss on Extinguishment of Debt
During the ninethree and six months ended SeptemberJune 30, 2021, we recognized a losslosses on extinguishment of debt of $51.7 million and $102.8 million, respectively, related to the redemption of the CCWH Senior Notes. We did not extinguish any debt during the three or six months ended SeptemberJune 30, 2021.
During the three and nine months ended September 30, 2020, we recognized a loss on extinguishment of debt of $5.4 million related to the repayment of the CCIBV Promissory Note in August 2020.2022.
Other Income (Expense), Net
For the three months ended September 30, 2021 and 2020, we recognized otherOther expense, net, of $12.0$26.2 million and $32.2 million during the three and six months ended June 30, 2022, respectively, and other income, net, of $6.5$3.6 million and $10.2 million during the three and six months ended June 30, 2021, respectively, primarily related toresult from net foreign exchange gains and losses recognized in connection with intercompany notes denominated in foreign currencies.
For the nine months ended September 30, 2021 and 2020, we recognized other expense, net, of $1.8 million and $16.9 million, respectively. The change was due to lower net foreign exchange losses recognized in connection with intercompany notes denominated in foreign currencies, as well as costs incurred in connection with the Separation in 2020.
Income Tax Benefit (Expense)
The effective tax rates were (55.9)% and 0.3% for the three and nine months ended SeptemberJune 30, 2022 and 2021, were 14.5%respectively, and 6.7%, respectively, compared to 17.8%(15.4)% and 5.5%6.0% for the three and ninesix months ended SeptemberJune 30, 2020,2022 and 2021, respectively. These rates 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. Additionally, we recorded $59.5 million of tax expense in 2020 as a result of selling our 50.91% stake in Clear Media.
Americas Results of Operations
| | (In thousands) | (In thousands) | Three Months Ended
September 30, | | % | | Nine Months Ended
September 30, | | % | (In thousands) | Three Months Ended
June 30, | | % | | Six Months Ended
June 30, | | % |
| | | 2021 | | 2020 | | Change | | 2021 | | 2020 | | Change | | 2022 | | 2021 | | Change | | 2022 | | 2021 | | Change |
| Revenue | Revenue | $ | 319,020 | | | $ | 223,715 | | | 42.6% | | $ | 802,524 | | | $ | 719,202 | | | 11.6% | Revenue | $ | 346,132 | | | $ | 271,620 | | | 27.4% | | $ | 641,271 | | | $ | 483,504 | | | 32.6% |
Direct operating expenses(1) | Direct operating expenses(1) | 128,518 | | | 110,906 | | | 15.9% | | 334,491 | | | 354,430 | | | (5.6)% | Direct operating expenses(1) | 141,060 | | | 100,142 | | | 40.9% | | 274,148 | | | 205,973 | | | 33.1% |
SG&A expenses(1) | SG&A expenses(1) | 51,824 | | | 44,872 | | | 15.5% | | 139,433 | | | 143,629 | | | (2.9)% | SG&A expenses(1) | 56,608 | | | 44,754 | | | 26.5% | | 108,667 | | | 87,609 | | | 24.0% |
| Segment Adjusted EBITDA | Segment Adjusted EBITDA | 139,086 | | | 70,716 | | | 96.7% | | 330,527 | | | 225,693 | | | 46.4% | Segment Adjusted EBITDA | 148,754 | | | 127,221 | | | 16.9% | | 259,090 | | | 191,441 | | | 35.3% |
|
(1)Includes restructuring and other costs that are excluded from Segment Adjusted EBITDA.
Three Months
Americas Revenue
Americas revenue increased $95.3$74.5 million, or 42.6%27.4%, during the three months ended SeptemberJune 30, 20212022 compared to the same period of 2020. During2021 driven by recovery from the third quarteradverse effects of 2020, Americas revenue was adversely affected by COVID-19. As lockdownsWe have been lifted and mobility levels have increased in 2021, we have seen correspondingcontinued to see increases in revenue across allmost of our products, most notably print billboards, digital billboards and airport displays. Revenue fromprimarily driven by airport displays and billboards. Airport displays increased 88.7%148.6% to $43.0$61.1 million as compared to $22.8$24.6 million during the same period of 2020,2021. Increased revenue from billboards was driven by increased travelhigher revenue yields and the new advertising and sponsorship contract with the Port Authority of New York and New Jersey.digital billboard deployments.
Americas total digital revenue increased 68.4%53.2% during the three months ended SeptemberJune 30, 20212022 as compared to the same period of 2020,2021, as follows:
| | | | | | | | | | | | | | | | | |
| (In thousands) | Three Months Ended
September 30, | | % |
| 2021 | | 2020 | | Change |
| Digital revenue from billboards, street furniture & spectaculars | $ | 91,361 | | | $ | 57,280 | | | 59.5% |
Digital revenue from transit1 | 23,285 | | | 10,784 | | | 115.9% |
| Total digital revenue | $ | 114,646 | | | $ | 68,064 | | | 68.4% |
(1)Digital revenue from transit includes revenue from airport digital displays. | | | | | | | | | | | | | | | | | |
| (In thousands) | Three Months Ended
June 30, | | % |
| 2022 | | 2021 | | Change |
| Digital revenue from billboards, street furniture & spectaculars | $ | 95,869 | | | $ | 74,742 | | | 28.3% |
| Digital revenue from transit, including airports | 34,569 | | | 10,411 | | | 232.0% |
| Total digital revenue | $ | 130,438 | | | $ | 85,153 | | | 53.2% |
Revenue generated from national sales comprised 37.1%38.6% and 36.5%37.1% of total revenue for the three months ended SeptemberJune 30, 20212022 and 2020,2021, respectively, while the remainder of revenue was generated from local sales.
Americas Expenses
Americas direct operating expenses increased $17.6$40.9 million, or 15.9%40.9%, during the three months ended SeptemberJune 30, 20212022 compared to the same period of 2020 mainly2021 primarily due to higher site lease expense, relatedwhich increased 49.4% to higher revenue. Americas site lease expense, which includes rent expense on both lease and non-lease contracts, increased 15.3% to $103.1$114.4 million during the three months ended SeptemberJune 30, 20212022 as compared to $89.4$76.6 million during the same period of 2020.
2021, driven by higher revenue and lower negotiated rent abatements. Americas SG&A expenses increased $7.0$11.9 million, or 15.5%26.5%, during the three months ended SeptemberJune 30, 20212022 compared to the same period of 2020 primarily2021 mainly due to higher employee compensation costs driven by improvements in operating performance. This was partially offset by lowerperformance and increased headcount, as well as higher credit loss expense relateddue to an increase in current year revenue and prior year reductions in our recovery from COVID-19.allowance for credit losses.
Six Months
Americas Revenue
Americas revenue increased $83.3$157.8 million, or 11.6%32.6%, during the ninesix months ended SeptemberJune 30, 20212022 compared to the same period of 2020. As we continue to recover from2021. Americas revenue was adversely affected by COVID-19 during the adverse effectsfirst half of COVID-19,2021. However, as our Americas segment has recovered, we have seencontinued to see increases in revenue across manyall of our products, most notably digital and print billboards. This was partially offset by lower revenue from airport displays, which decreased 13.4%increased 165.4% to $87.1$117.0 million as compared to $100.5$44.1 million during the same period of 2020.2021, and billboards.
Americas total digital revenue increased 21.7%59.6% during the ninesix months ended SeptemberJune 30, 20212022 as compared to the same period of 2020,2021, as follows:
| | | | | | | | | | | | | | | | | |
| (In thousands) | Nine Months Ended
September 30, | | % |
| 2021 | | 2020 | | Change |
| Digital revenue from billboards, street furniture & spectaculars | $ | 222,364 | | | $ | 169,340 | | | 31.3% |
Digital revenue from transit1 | 40,374 | | | 46,546 | | | (13.3)% |
| Total digital revenue | $ | 262,738 | | | $ | 215,886 | | | 21.7% |
(1)Digital revenue from transit includes revenue from airport digital displays. | | | | | | | | | | | | | | | | | |
| (In thousands) | Six Months Ended
June 30, | | % |
| 2022 | | 2021 | | Change |
| Digital revenue from billboards, street furniture and spectaculars | $ | 171,116 | | | $ | 131,003 | | | 30.6% |
| Digital revenue from transit, including airports | 65,235 | | | 17,089 | | | 281.7% |
| Total digital revenue | $ | 236,351 | | | $ | 148,092 | | | 59.6% |
Revenue generated from national sales comprised 36.8%38.7% and 37.2%36.6% of total revenue for the ninesix months ended SeptemberJune 30, 20212022 and 2020,2021, respectively, while the remainder of revenue was generated from local sales.
Americas Expenses
Americas direct operating expenses decreased $19.9increased $68.2 million, or 5.6%33.1%, during the ninesix months ended SeptemberJune 30, 20212022 compared to the same period of 2020 driven by lower2021 primarily due to higher site lease expense, which decreased 8.1%increased 38.4% to $263.8$222.4 million during the ninesix months ended SeptemberJune 30, 20212022 as compared to $287.2$160.7 million during the same period of 2020. Lower fixed rent2021, driven by higher revenue and, to a lesser extent, lower negotiated rent abatements with landlordsabatements. We also experienced higher production, maintenance and municipalities was partially offsetinstallation expenses driven by higher variable rent related to higherthe increase in revenue.
Americas SG&A expenses decreased $4.2increased $21.1 million, or 2.9%24.0%, during the ninesix months ended SeptemberJune 30, 20212022 compared to the same period of 2020. Lower credit loss expense related2021 largely due to our recovery from COVID-19 was partially offset by higher employee compensation costs driven by improvements in operating performance net of savings fromand increased headcount, reductions.as well as higher credit loss expense due to an increase in current year revenue and prior year reductions in our allowance for credit losses.
Europe Results of Operations
| | (In thousands) | (In thousands) | Three Months Ended
September 30, | | % | | Nine Months Ended
September 30, | | % | (In thousands) | Three Months Ended
June 30, | | % | | Six Months Ended
June 30, | | % |
| | | 2021 | | 2020 | | Change | | 2021 | | 2020 | | Change | | 2022 | | 2021 | | Change | | 2022 | | 2021 | | Change |
| Revenue | Revenue | $ | 262,568 | | | $ | 216,934 | | | 21.0% | | $ | 659,216 | | | $ | 535,970 | | | 23.0% | Revenue | $ | 280,347 | | | $ | 247,124 | | | 13.4% | | $ | 497,419 | | | $ | 396,648 | | | 25.4% |
Direct operating expenses(1) | Direct operating expenses(1) | 187,080 | | | 172,049 | | | 8.7% | | 554,087 | | | 476,541 | | | 16.3% | Direct operating expenses(1) | 180,332 | | | 197,525 | | | (8.7)% | | 359,291 | | | 367,007 | | | (2.1)% |
SG&A expenses(1) | SG&A expenses(1) | 61,040 | | | 56,469 | | | 8.1% | | 173,936 | | | 156,026 | | | 11.5% | SG&A expenses(1) | 56,428 | | | 63,529 | | | (11.2)% | | 108,385 | | | 112,896 | | | (4.0)% |
| Segment Adjusted EBITDA | Segment Adjusted EBITDA | 31,271 | | | (8,141) | | | 484.1% | | (34,614) | | | (91,071) | | | 62.0% | Segment Adjusted EBITDA | 44,522 | | | 1,744 | | | N/A | | 30,768 | | | (65,885) | | | N/A |
(1)Includes restructuring and other costs that are excluded from Segment Adjusted EBITDA.
Three Months
Europe Revenue
Europe revenue increased $45.6$33.2 million, or 21.0%13.4%, during the three months ended SeptemberJune 30, 20212022 compared to the same period of 2020.2021. Excluding the $6.2$35.5 million impact of movements in foreign exchange rates, Europe revenue increased $39.4$68.7 million, or 18.2%. During27.8%, driven by recovery from the third quarteradverse effects of 2020, Europe revenue was adversely affected by COVID-19. As lockdown restrictionsWe have been largely lifted in most European countries and vaccination levels have increased in 2021, we have seen increased mobility and correspondingcontinued to see increases in revenue across mostall of our products, primarilymost notably street furniture and retail displays,transit, and in mostalmost all of the countries in which we operate, led bywith the largest increases in France, Sweden and the United Kingdom (“U.K.”).
Europe digital revenue increased 44.8%34.0% during the three months ended SeptemberJune 30, 20212022 as compared to the same period of 2020.2021. Excluding the impact of movements in foreign exchange rates, Europe digital revenue increased 39.3%50.6%, as follows:
| | (In thousands) | (In thousands) | Three Months Ended
September 30, | | % | (In thousands) | Three Months Ended
June 30, | | % |
| | 2021 | | 2020 | | Change | | 2022 | | 2021 | | Change |
| Digital revenue | Digital revenue | $ | 92,879 | | | $ | 64,145 | | | 44.8% | Digital revenue | $ | 107,536 | | | $ | 80,277 | | | 34.0% |
| Digital revenue, excluding movements in foreign exchange rates | Digital revenue, excluding movements in foreign exchange rates | 89,331 | | | 64,145 | | | 39.3% | Digital revenue, excluding movements in foreign exchange rates | 120,890 | | | 80,277 | | | 50.6% |
Europe Expenses
Europe direct operating expenses increased $15.0decreased $17.2 million, or 8.7%, during the three months ended SeptemberJune 30, 20212022 compared to the same period of 2020.2021. Excluding the $3.9$22.6 million impact of movements in foreign exchange rates, Europe direct operating expenses increased $11.1$5.4 million, or 6.5%2.8%, largely driven by higher charges related to our restructuring plan to reduce headcount. Europe site lease expense which includesdue to higher revenue and, to a lesser extent, lower negotiated rent abatements and governmental rent subsidies. Site lease expense on both lease and non-lease contracts, decreased 1.6%increased 0.6% to $100.6$111.7 million during the three months ended SeptemberJune 30, 20212022 as compared to $102.3$111.0 million during the same period of 2020. Excluding2021; however, excluding the $2.1$14.0 million impact of movements in foreign exchange rates, Europe site lease expense decreased $3.8increased $14.6 million, or 3.7%, driven13.2%. This increase was partially offset by higher negotiated rent abatements.lower costs for our restructuring plan to reduce headcount.
Europe SG&A expenses increased $4.6decreased $7.1 million, or 8.1%11.2%, during the three months ended SeptemberJune 30, 20212022 compared to the same period of 2020.2021. Excluding the $1.1$7.1 million impact of movements in foreign exchange rates, Europe SG&A expenses increased $3.5 million, or 6.1%,remained flat as higher employee compensation costs, driven by higher charges related toimprovements in operating performance, and other SG&A expenses were offset by lower costs for our restructuring plan to reduce headcount.
NineSix Months
Europe Revenue
Europe revenue increased $123.2$100.8 million, or 23.0%25.4%, during the ninesix months ended SeptemberJune 30, 20212022 compared to the same period of 2020.2021. Excluding the $41.6$48.6 million impact of movements in foreign exchange rates, Europe revenue increased $81.7$149.4 million, or 15.2%, primarily related37.7%. Europe revenue was adversely affected by COVID-19 during the first half of 2021. However, as our Europe segment continues to recover, we have continued to see increases in revenue across all of our recovery from COVID-19. Higher revenue fromproducts, most notably street furniture displays, retail displays and billboards was partially offset by lower revenue from transit, displays. We experienced higher revenuesand in mostall of the countries in which we operate, with the largest increaseincreases in France, the U.K. and Sweden.
Europe digital revenue increased 38.1%53.2% during the ninesix months ended SeptemberJune 30, 20212022 as compared to the same period of 2020.2021. Excluding the impact of movements in foreign exchange rates, Europe digital revenue increased 28.5%67.3%, as follows:
| | (In thousands) | (In thousands) | Nine Months Ended
September 30, | | % | (In thousands) | Six Months Ended
June 30, | | % |
| | 2021 | | 2020 | | Change | | 2022 | | 2021 | | Change |
| Digital revenue | Digital revenue | $ | 215,752 | | | $ | 156,190 | | | 38.1% | Digital revenue | $ | 188,200 | | | $ | 122,873 | | | 53.2% |
| Digital revenue, excluding movements in foreign exchange rates | Digital revenue, excluding movements in foreign exchange rates | 200,750 | | | 156,190 | | | 28.5% | Digital revenue, excluding movements in foreign exchange rates | 205,609 | | | 122,873 | | | 67.3% |
Europe Expenses
Europe direct operating expenses increased $77.5decreased $7.7 million, or 16.3%2.1%, during the ninesix months ended SeptemberJune 30, 20212022 compared to the same period of 2020.2021. Excluding the $37.1$33.8 million impact of movements in foreign exchange rates, Europe direct operating expenses increased $40.4$26.0 million, or 8.5%, largely driven by higher charges related to our restructuring plan to reduce headcount, higher employee compensation costs as we ceased certain temporary operating cost savings initiatives and experienced a reduction in governmental wage subsidies, and higher site lease expense. Europe site7.1%. Site lease expense increased 9.3%3.5% to $309.9$220.1 million during the ninesix months ended SeptemberJune 30, 20212022 as compared to $283.4$212.6 million during the same period of 2020.2021. Excluding the $21.0$20.6 million impact of movements in foreign exchange rates, Europe site lease expense increased $5.5$28.2 million, or 1.9%. Higher variable rent related to13.2%, driven by higher revenue wasand lower negotiated rent abatements and governmental rent subsidies. We also experienced higher production, maintenance and installation expenses driven by the increase in revenue. These increases were partially offset by higher European governmental rent subsidies.lower costs for our restructuring plan to reduce headcount.
Europe SG&A expenses increased $17.9decreased $4.5 million, or 11.5%4.0%, during the ninesix months ended SeptemberJune 30, 20212022 compared to the same period of 2020.2021. Excluding the $11.2$10.3 million impact of movements in foreign exchange rates, Europe SG&A expenses increased $6.7$5.8 million, or 4.3%5.1%, driven by higher charges relatedemployee compensation costs due to improvements in operating performance and, to a lesser extent, lower governmental support and wage subsidies. This was partially offset by lower costs for our restructuring plan to reduce headcount, partially offset by decreases in professional fees and other costs.headcount.
Other Results of Operations
| | (In thousands) | (In thousands) | Three Months Ended
September 30, | | % | | Nine Months Ended
September 30, | | % | (In thousands) | Three Months Ended
June 30, | | % | | Six Months Ended
June 30, | | % |
| | | 2021 | | 2020 | | Change | | 2021 | | 2020 | | Change | | 2022 | | 2021 | | Change | | 2022 | | 2021 | | Change |
| Revenue | Revenue | $ | 14,828 | | | $ | 6,856 | | | 116.3% | | $ | 36,666 | | | $ | 58,048 | | | (36.8)% | Revenue | $ | 16,901 | | | $ | 12,338 | | | 37.0% | | $ | 30,378 | | | $ | 21,838 | | | 39.1% |
Direct operating expenses(1) | Direct operating expenses(1) | 9,109 | | | 7,655 | | | 19.0% | | 25,643 | | | 64,461 | | | (60.2)% | Direct operating expenses(1) | 9,933 | | | 8,557 | | | 16.1% | | 19,088 | | | 16,534 | | | 15.4% |
SG&A expenses(1) | SG&A expenses(1) | 5,294 | | | 5,530 | | | (4.3)% | | 15,224 | | | 30,608 | | | (50.3)% | SG&A expenses(1) | 5,258 | | | 4,582 | | | 14.8% | | 10,199 | | | 9,930 | | | 2.7% |
Segment Adjusted EBITDA(2) | Segment Adjusted EBITDA(2) | 425 | | | (5,650) | | | 107.5% | | (4,321) | | | (36,092) | | | 88.0% | Segment Adjusted EBITDA(2) | 1,710 | | | (921) | | | N/A | | 1,091 | | | (4,746) | | | N/A |
(1)Includes restructuring and other costs that are excluded from Segment Adjusted EBITDA.
(2)Our Latin America business represented ($9.5) million of Other Segment Adjusted EBITDA for the nine months ended September 30, 2020.
Three Months
Other revenue increased $8.0$4.6 million, or 116.3%37.0%, and $8.5 million, or 39.1%, during the three and six months ended SeptemberJune 30, 20212022, respectively, compared to the same periodperiods of 2020.2021 driven by our continued recovery from COVID-19 in Latin America. Excluding the $0.6 million impact of movements in foreign exchange rates, Other revenue increased $7.4$4.7 million, or 108.2%. During38.1%, during the third quarter of 2020, Latin America revenue was adversely affected by COVID-19. As lockdowns continue to be liftedthree month comparison period and mobility levels have increased in 2021, we have seen corresponding increases in revenue.$8.8 million, or 40.4%, during the six month comparison period.
Other direct operating expenses increased $1.5$1.4 million, or 19.0%16.1%, and $2.6 million, or 15.4%, during the three and six months ended SeptemberJune 30, 20212022, respectively, compared to the same periodperiods of 2020.2021 largely driven by higher site lease expense related to higher revenue. Excluding the $0.3 million impact of movements in foreign exchange rates, Other direct operating expenses increased $1.2$1.5 million, or 15.6%17.6%, primarily driven by higher site lease expense related to higher revenue.during the three month comparison period and $2.8 million, or 17.1%, during the six month comparison period.
Other SG&A expenses decreased $0.2increased $0.7 million, or 4.3%14.8%, and $0.3 million, or 2.7%, during the three and six months ended SeptemberJune 30, 20212022, respectively, compared to the same periodperiods of 2020.2021 primarily due to higher employee compensation costs driven by increased headcount. Excluding the $0.1 million impact of movements in foreign exchange rates, Other SG&A expenses decreasedincreased $0.7 million, or 14.6% during the three month comparison period and $0.3 million, or 6.4%.
Nine Months
Other revenue decreased $21.4 million, or 36.8%3.3%, during the nine months ended September 30, 2021 compared to the same period of 2020, driven by the sale of our Clear Media business. Revenue from our Latin America business was $36.7 million and $28.8 million for the nine months ended September 30, 2021 and 2020, respectively, with the increase related to our recovery from COVID-19. Excluding the $0.9 million impact of movements in foreign exchange rates, Other revenue decreased $22.3 million, or 38.5%.
Other direct operating expenses decreased $38.8 million, or 60.2%, during the nine months ended September 30, 2021 compared to the same period of 2020, driven by the sale of our Clear Media business. Direct operating expenses from our Latin America business were $25.6 million and $24.0 million for the nine months ended September 30, 2021 and 2020, respectively, with the increase driven by higher site lease expense related to higher revenue. Excluding the $0.4 million impact of movements in foreign exchange rates, Other direct operating expenses decreased $39.2 million, or 60.8%.
Other SG&A expenses decreased $15.4 million, or 50.3%, during the nine months ended September 30, 2021 compared to the same period of 2020, driven by the sale of our Clear Media business. SG&A expenses from our Latin America business were $15.2 million and $15.0 million for the nine months ended September 30, 2021 and 2020, respectively. Excluding the $0.1 million impact of movements in foreign exchange rates, Other SG&A expenses decreased $15.5 million, or 50.7%.six month comparison period.
LIQUIDITY AND CAPITAL RESOURCES
Cash FlowsLiquidity Analysis
The following discussion highlights cash flow activities during the nine months ended September 30, 2021 and 2020:
| | | | | | | | | | | |
| (In thousands) | Nine Months Ended September 30, |
| | 2021 | | 2020 |
| Net cash provided by (used for): | | | |
| Operating activities | $ | (154,273) | | | $ | (115,434) | |
| Investing activities | $ | (79,439) | | | $ | 124,262 | |
| Financing activities | $ | 50,292 | | | $ | 444,973 | |
Operating Activities
During the nine months ended September 30, 2021, net cash used for operating activities was $154.3 million. Cash paid for interest was $264.4 million. Cash collections from customers exceeded cash payments to vendors, including site lease costs; however, collections earlier in the period lagged primarily due to COVID-19’s impact on fourth quarter 2020 and first quarter 2021 sales. Additionally, cash payments during the period include the payment of site lease costs that were deferred from 2020. Interest payments on the CCOH 7.75% Senior Notes and CCOH 7.5% Senior Notes are not scheduled to begin until the fourth quarter of 2021.
During the nine months ended September 30, 2020, net cash used for operating activities was $115.4 million. Cash paid for interest was $302.1 million. Cash collections from customers exceeded cash payments to vendors; however, cash collections primarily later in the period lagged due to COVID-19’s impact on sales and our collection cycle. This adverse impact was partially mitigated by initiatives that we implemented to reduce our expenditures, including the deferral of rent payments and temporary reductions in compensation costs.
Investing Activities
Cash used for investing activities reflects our capital expenditures, which primarily relate to construction and sustaining activities for billboards, street furniture and other out-of-home advertising displays, including digital displays. We had the following capital expenditures during the nine months ended September 30, 2021 and 2020:
| | | | | | | | | | | | | | | |
| (In thousands) | | | Nine Months Ended September 30, |
| | | | | | 2021 | | 2020 |
| Americas | | | | | $ | 39,988 | | | $ | 41,189 | |
| Europe | | | | | 30,298 | | | 31,489 | |
Other(1) | | | | | 3,082 | | | 10,805 | |
| Corporate | | | | | 9,070 | | | 9,766 | |
| Total | | | | | $ | 82,438 | | | $ | 93,249 | |
(1)Other capital expenditures during the nine months ended September 30, 2020 included $3.8 million of capital expenditures related to the purchase of concession rights in China, prior to the sale of Clear Media.
Net cash provided by investing activities during the nine months ended September 30, 2020 also reflects the April 2020 sale of Clear Media, which resulted in $216.0 million of proceeds, net of cash retained by Clear Media.
Financing Activities
Net cash provided by financing activities during the nine months ended September 30, 2021 reflected $36.1 million of net cash proceeds from the issuances of the CCOH 7.75% Senior Notes and CCOH 7.5% Senior Notes, after the payment of debt issuance costs and redemption of the CCWH Senior Notes at 104.625% of the principal amount. This cash was used to pay interest upon the redemption of the CCWH Senior Notes, which is reflected in operating activities on the cash flow statement. We also received $34.7 million, at current exchange rates, of proceeds from a state-guaranteed loan incurred by one of our non-guarantor European subsidiaries in response to COVID-19. These cash inflows were partially offset by principal payments of $15.0 million on our Term Loan Facility.
Net cash provided by financing activities during the nine months ended September 30, 2020 primarily reflected $375.0 million of proceeds from the issuance of the CCIBV Senior Secured Notes and the cautionary draw of $150.0 million under our Revolving Credit Facility to enhance liquidity and preserve financial flexibility during the economic downturn resulting from COVID-19. These financing cash inflows were partially offset by the repayment of the $53.0 million CCIBV Promissory Note, which was issued in May 2020 in exchange for the outstanding mandatorily-redeemable preferred stock, which was subsequently transferred to one of our subsidiaries, and principal payments of $15.0 million on our Term Loan Facility.
Anticipated Cash Requirements
Sources of Capital andShort-Term Liquidity
Our primary sources of liquidity aremain cash on hand, cash flow from operations and our credit facilities. In February 2021, we issued $1.0 billion aggregate principal amount of CCOH 7.75% Senior Notes and used the net proceeds to redeem $940.0 million aggregate principal amount of our CCWH Senior Notes in March 2021. In June 2021, we issued $1.05 billion aggregate principal amount of CCOH 7.5% Senior Notes and used the net proceeds to redeem the remaining outstanding $961.5 million aggregate principal amount of the CCWH Senior Notes. Also in June 2021, one of our non-guarantor European subsidiaries entered into an unsecured loan of approximately $34.7 million, at current exchange rates, with a third-party lender through a state-guaranteed loan program established in response to COVID-19.
As of September 30, 2021, we had $600.0 million of cash on our balance sheet, including $200.5 million of cash held outside the U.S. by our foreign subsidiaries. Excess cash from our foreign operations may be transferred to our operations in the U.S. if needed to fund operations in the U.S., subject to the foreseeable cash needs of our foreign operations and restrictions in the indenture governing the CCIBV Senior Secured Notes. We could presently repatriate excess cash with minimal U.S. tax consequences, as calculated for tax law purposes, and dividend distributions from our international subsidiaries may be exempt from U.S. federal income tax.
Additionally, as of September 30, 2021, we had excess availability of $64.4 million under our Receivables-Based Credit Facility and $1.8 million under our Revolving Credit Facility.
On October 26, 2021, we repaid the $130.0 million outstanding balance under the Revolving Credit Facility using cash on hand, resulting in a corresponding increase in excess availability under such facility. As of October 26, 2021, we had $131.8 million available under our Revolving Credit Facility.
Uses of Capital and Liquidity
Our primary uses of liquidityrequirements are for working capital used to fund the operations of the business, capital expenditures and debt service obligations. COVID-19's extensive impact on the global advertising market has had a significant negative impact on our results of operations in both our Americas and Europe segments. In response, starting in March 2020, we have taken a number of measures to increase our liquidity and preserve and strengthen our financial flexibility, including renegotiating contractsservice. We typically meet these requirements with landlords and municipalities, reducing compensation costs, obtaining European governmental support and wage subsidies, reducing discretionary expenses, and deferring capital expenditures and site lease payments. As our operating performance improves, we continue to reassess and modify these actions accordingly, including ceasing certain temporary operating cost savings initiatives and increasing our investment in our business through additional capital expenditures. However, the duration and severity of COVID-19 continue to evolve and remain uncertain, and we will consider implementing additional cost savings initiatives in order to better align our operating expense base with revenues and to provide additional financial flexibility as circumstances warrant.
We continue to execute on the Europe portion of our international restructuring plan to reduce headcount and incurred approximately $33.5 million in related charges during the nine months ended September 30, 2021. In April 2021, we revised the Europe portion of this restructuring plan to reflect delays in implementation and additional headcount reductions. As revised, we estimate that total charges for this portion of the plan, including $41.9 million of charges already incurred, will be in a range of approximately $51 million to $56 million, all of which is expected to result in cash expenditures. Substantially all charges related to this plan were or are expected to be severance benefits and related costs. We expect the revised plan to be substantially complete by the end of the first quarter of 2023 and to result in pre-tax annual cost savings in excess of $28 million. However, actual final charges pursuant to this plan may be materially different from our estimates, and there is no guarantee that we will achieve the cost savings that we expect. During the nine months ended September 30, 2021, we made cash expenditures of $8.6 million related to the Europe portion of our international restructuring plan. In addition, we made cash expenditures of $2.4 million related to our restructuring plan to reduce headcount in our Americas segment, which was completed during the fourth quarter of 2020, and $1.4 million related to costs incurred in conjunction with these plans related to corporate operations. Refer to Note 9 to our Condensed Consolidated Financial Statements included in Item 1 of Part I of this Quarterly Report on Form 10-Q for further information on our restructuring plans.
During the nine months ended September 30, 2021, we spent $264.4 million of cash to pay interest on our debt. We anticipate having approximately $123.2 million of cash interest payment obligations during the remainder of 2021 and $318.9 million of cash interest payment obligations in 2022, assuming we do not refinance or incur additional debt. Additionally, during the nine months ended September 30, 2021, we made $15.0 million of principal payments on the Term Loan Facility and expect to make additional principal payments of $5.0 million on the Term Loan Facility during the remainder of 2021. On October 26, 2021, we repaid the outstanding balance of $130.0 million under the Revolving Credit Facility using cash on hand. Our next material debt maturity is in 2025 when the $375.0 million aggregate principal amount of CCIBV Senior Secured Notes is due; however, athand, internally-generated cash flow from operations and, if necessary, borrowings under our option, we may redeem or repay a portion of our outstanding debt prior to maturity in accordance with the terms of our debt agreements. Refer to Note 4 to our Condensed Consolidated Financial Statements included in Item 1 of Part I of this Quarterly Report on Form 10-Q for additional details on our debt outstanding as of September 30, 2021.
Trends and Uncertainties
credit facilities. We believe that our cash on hand and additional availability under our credit facilities, combined with cash flows from operations and our continued savings initiatives,current sources of funds will enable usbe sufficient to meet our working capital, capital expenditure, debt service, restructuring and other fundingcash requirements for at least the next 12twelve months.
Long-Term Liquidity
Our long-term future cash requirements will depend on many factors, including the growth of our business, the outcome of our restructuring plans, investments in new technologies and the pursuit and outcome of strategic opportunities, including the outcome of the strategic review of our European business. In addition, we have long-term cash requirements related to the repayment of our outstanding debt, which is scheduled to mature over the next eight years. We believe that our sources of funds will be adequate to meet our cash requirements in the long-term.
However, our anticipatedability to meet these cash requirements through cash from operations will depend on our future operating results and financial performance, which are subject to significant uncertainty and may be affected by events beyond our control, including prevailing economic, financial and industry conditions. Our abilityconditions as well as macro-economic events such as the war in Ukraine, heightened inflation, slower growth or recession, changes to meet our funding requirements depends on the impacts from these uncertainties, including the ongoing impact of COVID-19, our future operating performance, our cash flow from operations,fiscal and our ability to manage our liquiditymonetary policy, higher interest rates, currency fluctuations and obtain supplemental liquidity, if necessary. Additional factors may emerge that could cause our expectations to change. If we are unable to generate sufficient cash through our operations or obtain sources of supplemental liquidity, we could face substantial liquidity problems, which could have a material adverse effect on our financial condition and on our ability to meet our obligations. We may take further cost-cutting measures beyond those discussed above to generate short-term liquiditychallenges in the event of an unanticipated need for cash. In addition, we regularly consider, and enter into discussions withsupply chain. Additionally, our lenders related to, potential financing alternatives, which may include supplemental liquidity through issuances of secured or unsecured debt or other capital-raising transactions.
Our significant interest payment obligations reduce our financial flexibility, make us more vulnerable to changes in operating performance and economic downturns generally and reduce our liquidity over timetime.
We regularly consider, and could negatively affectenter into discussions with our abilitylenders related to, obtain additionalpotential financing in the future.alternatives. In the future, we may need to obtain supplemental liquidity through additional financing from banks or other lenders, through public offerings or private placements of debt or equity, through strategic relationships or other arrangements, or from a combination of these sources. ThereHowever, there can be no assurance that financing alternatives will be available to us in sufficient amounts or on terms acceptable to us in the future due to market conditions, our financial condition, our liquidity constraints or other factors, many of which are beyond our control, and even if financing alternatives are available to us, we may not find them suitable or at reasonable interest rates. In addition, the terms of our existing or future debt agreements may restrict us from securing financing on terms that are available to us at that time or at all.
If we are unable to generate sufficient cash through our operations or obtain sources of supplemental liquidity as needed, we could face substantial liquidity problems, which could have a material adverse effect on our financial condition and on our ability to meet our obligations.
Cash Requirements
Working Capital Needs
We frequently evaluate strategic opportunities both within and outsideutilize working capital to fund the operations of our existing lines of business and have certain related contractual obligations, including commitments under site leases, other non-cancelable contracts and our restructuring plan.
Site Lease Expense
One of our largest cash requirements is for site lease costs, which includes payments for land or space used by our displays, including minimum guaranteed payments and revenue-sharing arrangements. During the six months ended June 30, 2022 and 2021, we incurred site lease expense of $454.7 million and $383.8 million, respectively, which are included within direct operating expenses on our Consolidated Statements of Loss. In order to better align fixed site lease expenses with the reductions in revenue we experienced due to COVID-19, we successfully renegotiated contracts with landlords and municipalities in both the U.S. and Europe. As our business continues to recover from the effects of the COVID-19 pandemic, we are receiving fewer rent abatements.
Restructuring Plans
During the six months ended June 30, 2022 and 2021, we made cash expenditures for our restructuring plans to reduce headcount of $11.6 million and $8.0 million, respectively, and as of June 30, 2022, we had $12.6 million of related future cash obligations. We expect to pay this liability this year, although payments may be made through the end of the second quarter of 2023 in accordance with the terms of the restructuring plan. Please refer to Note 9 to our Condensed Consolidated Financial Statements located in Item 1 of Part I of this Quarterly Report on Form 10-Q for additional details. Capital Expenditures and Asset Acquisitions
We made the following capital expenditures during the six months ended June 30, 2022 and 2021:
| | | | | | | | | | | | | |
| (In thousands) | Six Months Ended June 30, |
| 2022 | | 2021 | | |
| Americas | $ | 48,036 | | | $ | 24,131 | | | |
| Europe | 26,734 | | | 17,306 | | | |
| Other | 1,106 | | | 2,220 | | | |
| Corporate | 5,232 | | | 6,109 | | | |
| Total capital expenditures | $ | 81,108 | | | $ | 49,766 | | | |
During the six months ended June 30, 2021, we reduced or deferred capital expenditures as part of our strategy to increase our liquidity and preserve and strengthen our financial flexibility given the adverse financial impacts and economic uncertainty resulting from timeCOVID-19. As our operating performance has improved, we have increased our investment in our business through capital expenditures.
During the six months ended June 30, 2022, we completed several acquisitions of out-of-home advertising assets in our Americas segment, which included digital billboard structures, land, indefinite-lived permits and permanent easements, for cash consideration of $24.3 million. During the six months ended June 30, 2021, cash paid for asset acquisitions was $1.5 million.
As reported within the “Proceeds from disposal of assets” line on the Consolidated Statements of Cash Flows, our cash outflows for capital expenditures and asset acquisitions in the Americas during the six months ended June 30, 2022 were partially offset by compensation received from local governments for the condemnation and removal of billboards in certain markets.
Debt Service Obligations
During the six months ended June 30, 2022 and 2021, we paid interest of $161.3 million and $212.0 million, respectively. The decrease is primarily driven by the payment of accrued interest due upon redemption of the CCWH Senior Notes in the first half of 2021, as well as lower interest rates on the refinanced debt. We anticipate having cash interest payments of $179.9 million during the remainder of the year, assuming current interest rates do not change and that we do not refinance or incur additional debt.
Additionally, during each of the six months ended June 30, 2022 and 2021, we made $10.0 million of principal payments on the Term Loan Facility in accordance with the terms of the Senior Secured Credit Agreement and expect to timemake additional principal payments totaling $10.0 million during the remainder of the year.
Please refer to disposeNote 4 to our Condensed Consolidated Financial Statements located in Item 1 of certain businessesPart I of this Quarterly Report on Form 10-Q for additional details on our outstanding long-term debt. As of June 30, 2022, we were in compliance with all of the covenants contained in our debt agreements. Sources of Capital and Liquidity
Cash On Hand
As of June 30, 2022, we had $314.6 million of cash on our balance sheet, including $105.1 million of cash held outside the U.S. by our subsidiaries. Excess cash from our foreign operations may pursue acquisitions. These dispositions or acquisitionsbe transferred to our operations in the U.S. if needed to fund operations in the U.S., subject to the foreseeable cash needs of our foreign operations and restrictions in the indenture governing the CCIBV Senior Secured Notes. We could presently repatriate excess cash with minimal U.S. tax consequences, as calculated for tax law purposes, and dividend distributions from our international subsidiaries may be material. Specifically, as we continue to focus on operational efficiencies that drive greater margin andexempt from U.S. federal income tax.
Cash Flow from Operations
We have historically generated positive net cash flow from operations. However, we will continueused net cash for operating activities during the periods in which we were negatively impacted by COVID-19, specifically 2021 and 2020, as cash paid for interest in these periods exceeded other net cash inflows from operations. We returned to reviewpositive operating cash flows in the first half of 2022 as strong cash collections from customers, driven by improvements in revenue and consider opportunitiesour continued recovery from COVID-19, exceeded aggregate cash payments to unlock shareholder value,vendors, lessors, employees and lenders.
•During the six months ended June 30, 2022, net cash provided by operating activities was $19.2 million. Higher cash collections from customers more than offset increased cash payments driven by higher site lease, employee compensation and other costs. Additionally, cash paid for interest of $161.3 million was lower than interest paid during the same period of the prior year due to the refinancing of the CCWH Senior Notes, as previously described.
•During the six months ended June 30, 2021, net cash used for operating activities was $232.2 million, primarily driven by cash paid for interest of $212.0 million, which may include, among other things, potential asset or operational divestitures intendedincluded accrued and unpaid interest of $34.5 million due upon redemption of the CCWH Senior Notes. Additionally, during this period, due to deleveragethe adverse impact of COVID-19 on sales and increase freecollections, cash flow. payments to vendors (including site lease costs) and our employees exceeded cash collections from customers.
Credit Facilities
We have access to a Revolving Credit Facility and Receivables-Based Credit Facility, both of which include sub-facilities for letters of credit and short-term borrowings and are scheduled to mature on August 23, 2024. The table below presents our borrowings and excess availability under our credit facilities as of June 30, 2022:
| | | | | | | | | | | | | | | | | |
| (in millions) | Revolving Credit Facility | | Receivables-Based Credit Facility | | Total Credit Facilities |
Borrowing limit(1) | $ | 175.0 | | | $ | 125.0 | | | $ | 300.0 | |
| Borrowings outstanding | — | | | — | | | — | |
| Letters of credit outstanding | 43.2 | | | 43.5 | | | 86.7 | |
| Excess availability | $ | 131.8 | | | $ | 81.5 | | | $ | 213.3 | |
(1)The borrowing limit of the Receivables-Based Credit Facility is equal to the lesser of $125.0 million and the borrowing base, which is calculated based on our accounts receivable balance each period in accordance with our Receivables-Based Credit Agreement.
Debt Activity
In February 2021, we issued $1.0 billion aggregate principal amount of CCOH 7.75% Senior Notes Due 2028 and, in March 2021, used the pastnet proceeds therefrom to redeem $940.0 million of the CCWH Senior Notes at 104.625% of their principal amount. In June 2021, we issued $1.05 billion aggregate principal amount of CCOH 7.5% Senior Notes Due 2029 and may from timeused the net proceeds therefrom to timeredeem the remaining outstanding $961.5 million of CCWH Senior Notes, also at 104.625% of their principal amount. Additionally in June 2021, a non-guarantor European subsidiary borrowed €30.0 million through a state-guaranteed loan program established in response to COVID-19.
We did not enter into any significant debt transactions during the future consider strategic transactions, including, among other things,six months ended June 30, 2022. In April 2022, as permitted under the saleterms of one or morethe loan agreement, we elected to extend the maturity date of our markets or businesses.the €30.0 million state-guaranteed loan to June 29, 2027, with quarterly principal repayments of €1.875 million due beginning in September 2023. The annual interest rate on this loan for periods after June 2022 is 0.7% (with no interest due prior thereto), and the annual cost of the state guarantee will be 1.0% of the outstanding loan amount through June 29, 2024 and 2.0% of the outstanding loan amount for the remainder of the loan term.
Debt Covenants
The Senior Secured Credit Agreement contains a springing financial covenant, applicable solely to the Revolving Credit Facility if the balance of the Revolving Credit Facility is greater than $0 and undrawn letters of credit exceed $10 million, that generally requires compliance with a first lien net leverage ratio of 7.60 to 1.00, with a step-down to 7.10 to 1.00 originally scheduled to commence with the last day of the fiscal quarter ending JuneSeptember 30, 2021. In June 2020, we amended2022. Our first lien leverage ratio, which is calculated by dividing first lien debt by EBITDA (as defined by the Senior Secured Credit AgreementAgreement) for the preceding four quarters, was 4.98 to suspend the springing financial covenant1.00 as of June 30, 2022. First lien debt and EBITDA are presented herein because they are material components of the Revolving Credit Facility from the third quarter of 2020 through the second quarter of 2021 and delay the timing of the financial covenant step-downcalculation of the first lien net leverage ratio untilratio.
First Lien Debt
The following table presents a calculation of our first lien debt as of June 30, 2022:
| | | | | |
| (In millions) | June 30,
2022 |
| Term Loan Facility | $ | 1,945.0 | |
| Revolving Credit Facility | — | |
| Receivables-Based Credit Facility | — | |
| Clear Channel Outdoor Holdings 5.125% Senior Secured Notes Due 2027 | 1,250.0 | |
| Other debt | 3.8 | |
| Less: Cash and cash equivalents | (314.6) | |
First lien debt(1) | $ | 2,884.2 | |
(1)Due to rounding, the first quarter of 2022. In May 2021, we entered into a second amendment tototal may not equal the Senior Secured Credit Agreement to, among other things, extend the suspended springing financial covenant through the fourth quarter of 2021 and further delay the scheduled financial covenant step-down until the third quarter of 2022. We are required to maintain minimum liquidity of $150 million, including cash on hand and availability under our Receivables-Based Credit Facility and Revolving Credit Facility, through deliverysum of the March 31, 2022 springing financial covenant calculation and agreed not to make voluntary restricted payments with certain exceptions. We wereline items in compliance with the minimum liquidity covenant as of September 30, 2021.table above.
In addition, eachEBITDA
As required by the definition of “EBITDA” in the Senior Secured Credit Agreement, our debt agreements includes negative covenants that, subjectEBITDA for the preceding four quarters of $579.5 million is calculated as operating income (loss) before depreciation and amortization, impairment charges and share-based compensation, further adjusted for charges, expenses or reserves in respect of any restructuring, relocation, redundancy or severance expense or one-time compensation charges and various other items.
The following table reflects a reconciliation of EBITDA to significant exceptions, limit our abilityoperating income and net cash provided by operating activities for the abilityfour quarters ended June 30, 2022:
| | | | | |
| Four Quarters Ended |
| (In millions) | June 30,
2022 |
EBITDA (as defined by the Senior Secured Credit Agreement) | $ | 579.5 | |
| Depreciation and amortization, impairment charges and share-based compensation | (294.1) | |
| Charges, expenses or reserves in respect of any restructuring, relocation, redundancy or severance expense or one-time compensation charges | (23.3) | |
| Other items | 0.4 | |
Operating income(1) | 262.6 | |
| Interest expense, net; other expense, net and income tax expense | (392.9) | |
| Adjustments to reconcile consolidated net loss to net cash provided by operating activities: | |
Reconciling items for non-cash and non-operating activity(2) | 701.4 | |
| Changes in operating assets and liabilities | (453.1) | |
Net cash provided by operating activities(1) | $ | 118.0 | |
(1)Due to rounding, the total may not equal the sum of our restricted subsidiaries to, amongthe line items in the table above.
(2)Includes depreciation, amortization and impairment charges; non-cash operating lease expense; deferred taxes; gain on disposal of operating and other things, incur or guarantee additional indebtedness or issue certain preferred stock; incur certain liens; engage in mergers, consolidations, liquidationsassets, net; foreign exchange transaction loss and dissolutions; sell certain assets, including capital stock of our subsidiaries; pay dividends and distributions or repurchase capital stock; make certain investments, loans, or advances; redeem, purchase or retire subordinated debt; engage in certain transactions with affiliates; enter into agreements which limit our ability and the ability of our restricted subsidiaries to incur restrictions on the ability to make distributions; and amend or waive organizational documents. As of September 30, 2021, we were in compliance with the covenants contained in our financing agreements.other reconciling items.
CRITICAL ACCOUNTING ESTIMATES
The preparation of our financial statements in conformity with GAAP requires Company management to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amountamounts of revenue and expenses during the reporting period. On an ongoing basis, we evaluate our estimates that are based on historical experience and on various other assumptions that are believedThere have been no material changes to be reasonable under the circumstances. The results of these evaluations form the basis for making judgments about the carrying values of assets and liabilities and the reported amount of revenue and expenses that are not readily apparent from other sources. Because future events and their effects cannot be determined with certainty, actual results could differ from our assumptions and estimates, and such difference could be material. Management believes that certain accounting estimates are the most critical to aid in fully understanding and evaluating our reported financial results, and they require management’s most difficult, subjective or complex judgments, resulting from the need to make estimates about the effect of matters that are inherently uncertain. These critical accounting estimates, management's judgments and assumptions and the effect if actual results differ from these assumptions are described underdisclosed in Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” inof our 2020 Annual Report on Form 10-K.
Impairment Tests
We perform impairment tests for indefinite-lived intangible assets and goodwill at least annually, as of July 1 of each year, and more frequently as events or changes in circumstances warrant. During the first quarter of 2021, we performed an impairment test on our indefinite-lived billboard permits due to changes in our estimates and assumptions, specifically an increase in the discount rate. Additionally, as of July 1, 2021, we performed our annual impairment tests on indefinite-lived intangible assets and goodwill, as described below. As of September 30, 2021, there were no indicators of impairment.
Indefinite-lived Intangible Assets
Indefinite-lived intangible assets, such as our billboard permits, are reviewed at least annually for possible impairment and whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable using the direct valuation method as prescribed in ASC 805-20-S99. Under the direct valuation method, the estimated fair value of the indefinite-lived intangible assets is calculated at the market level as prescribed by ASC 350-30-35, and it is assumed that rather than acquiring indefinite-lived intangible assets as a part of a going concern business, the buyer hypothetically develops indefinite-lived intangible assets and builds a new operation with similar attributes from scratch. Thus, the buyer incurs start-up costs during the build-up phase that are normally associated with going concern value. Initial capital costs are deducted from the discounted cash flow model to calculate the value that is directly attributable to the indefinite-lived intangible assets. Our key assumptions using the direct valuation method are market revenue growth rates, market share, profit margin, duration and profile of the build-up period, estimated start-up capital costs and losses incurred during the build-up period, the risk-adjusted discount rate and terminal values. This data is populated using industry-normalized information representing an average asset within a market.
Due to an increase in the discount rate, we tested our indefinite-lived billboard permits for impairment as of March 31, 2021, resulting in an impairment charge of $119.0 million across several markets in our Americas segment. The impairment was primarily driven by an increase in the discount rate and reductions in projected cash flows related to the expected negative financial statement impacts from COVID-19. In determining the fair value of our billboard permits as of March 31, 2021, we used the following key assumptions:
•Industry revenue growth forecasts used10-K for the initial four-year period, which varied by market, started with the trailing twelve month forecast period ending Marchyear ended December 31, 2022, and annual revenue growth on average of 4.9% was assumed from year two to year four, factoring in recovery from the impacts related to COVID-19;
•Revenue growth beyond the initial four-year period was assumed to be 3.0%;
•Revenue was grown over a build-up period, reaching maturity by the second year;
•Operating margins gradually climbed to the industry average margin (as high as 47.4%, depending on market size) by the third year; and
•The discount rate was assumed to be 10.5%.
As of March 31, 2021, markets with billboard permit fair values exceeding carrying amounts by 30% or less represented $124.1 million of the total fair value of billboard permits. These permits had fair values exceeding carrying amounts by $22.4 million in total. The fair value of billboard permits impaired during the three months ended March 31, 2021 was $191.9 million.
Additionally, we performed our annual impairment test as of July 1, 2021, in accordance with ASC 350-30-35, which did not result in any additional impairment to our intangible assets. In determining the fair value of our billboard permits as of July 1, 2021, we used the following key assumptions:
•Industry revenue growth forecasts used for the initial four-year period, which varied by market, started with the trailing twelve month forecast period ending July 1, 2022, and annual revenue growth on average of 5.2% was assumed from year two to year four, factoring in recovery from the impacts related to COVID-19;
•Revenue growth beyond the initial four-year period was assumed to be 3.0%;
•Revenue was grown over a build-up period, reaching maturity by the second year;
•Operating margins gradually climbed to the industry average margin (as high as 47.7%, depending on market size) by the third year; and
•The discount rate was assumed to be 10.5%.
The assumptions used to perform our impairment test are not indicative of future results. While we believe we have made reasonable estimates and utilized appropriate assumptions to calculate the fair value of our indefinite-lived intangible assets, it is possible that a material change could occur. If future results are not consistent with our assumptions and estimates, we may be exposed to additional impairment charges in the future. The following table shows the decrease in the fair value of our billboard permits that would result from decreases of 100 basis points in our discrete and terminal period revenue growth rate and profit margin assumptions and an increase of 100 basis points in our discount rate assumption as of each of the impairment testing dates:
| | | | | | | | | | | | | | | | | | | | |
| (In thousands) | | Revenue growth rate | | Profit margin | | Discount rate |
| Decrease in fair value of billboard permits: | | (100 basis point decrease) | | (100 basis point decrease) | | (100 basis point increase) |
As of March 31, 2021(1) | | $ | (323,500) | | $ | (88,400) | | $ | (331,900) |
As of July 1, 2021(2) | | $ | (365,300) | | $ | (101,700) | | $ | (374,700) |
(1) The change in each assumption as of March 31, 2021 would have resulted in additional impairment of $74.9 million, $18.4 million and $77.8 million, respectively.
(2) The change in the revenue growth rate and discount rate assumptions as of July 1, 2021 would have resulted in impairment of $18.2 million and $20.6 million, respectively. The change in the profit margin assumption as of July 1, 2021 would not have resulted in any impairment.
Goodwill
Goodwill represents the excess of the purchase price over the fair value of identifiable net assets acquired in business combinations. We test goodwill at least annually for possible impairment and at interim dates if events or changes in circumstances indicate that goodwill might be impaired. The fair value of our reporting units is used to apply value to the net assets of each reporting unit. To the extent that the carrying amount of net assets would exceed the fair value, an impairment charge is recorded. The discounted cash flow approach that we use for valuing goodwill as part of the impairment testing approach involves estimating future cash flows expected to be generated from the related assets, discounted to their present value using a risk-adjusted discount rate. Terminal values are also estimated and discounted to their present value.
We performed our annual impairment test as of July 1, 2021, in accordance with ASC 350-30-35, which did not result in any goodwill impairment. In determining the fair value of our reporting units, we used the following assumptions:
•Expected cash flows underlying our business plans for the initial five-year period were based on detailed, multi-year forecasts performed by each of our operating segments and reflect the advertising outlook across our businesses;
•Cash flows were projected to grow at a perpetual growth rate, which we estimated at 3.0%; and
•In order to risk-adjust the cash flow projections in determining fair value, we utilized a discount rate for each of our reporting units ranging from 9.5% to 12.0%.
Based on our assessment using the assumptions described above, a hypothetical 10% reduction in the estimated fair value of each of our reporting units with goodwill would not have resulted in a material impairment condition.
The assumptions used to perform our impairment test are not indicative of future results. While we believe we have made reasonable estimates and utilized appropriate assumptions to calculate the estimated fair value of our reporting units, it is possible a material change could occur. If future results are not consistent with our assumptions and estimates, we may be exposed to impairment charges in the future. The following table shows the decrease in the fair value of each of our reporting units with goodwill that would result from decreases of 100 basis points in our discrete and terminal period revenue growth rate and profit margin assumptions and an increase of 100 basis points in our discount rate assumption as of July 1, 2021:
| | | | | | | | | | | | | | | | | | | | |
| (In thousands) | | Revenue growth rate | | Profit margin | | Discount rate |
| Decrease in fair value of reporting unit: | | (100 basis point decrease)1 | | (100 basis point decrease)1 | | (100 basis point increase)1 |
| Americas | | $ | (700,000) | | | $ | (170,000) | | | $ | (640,000) | |
| Europe | | $ | (110,000) | | | $ | (110,000) | | | $ | (90,000) | |
1 Changes to our assumptions by these amounts would not result in goodwill impairment as the fair value of goodwill for each reporting unit would still be greater than its carrying value.2021.
NEW ACCOUNTING PRONOUNCEMENTS
For a description of the expected impact of newly issuednewly-issued but not yet adopted accounting pronouncements on our financial position and results of operations, please refer to Note 1 to our Condensed Consolidated Financial Statements located in Item 1 of Part I of this Quarterly Report on Form 10-Q. CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS
This report contains various forward-looking statements whichthat represent our expectations or beliefs concerning future events, including, without limitation, our future operating and financial performance, our restructuring plans, our ability to comply with the covenants in the agreements governing our indebtedness and the availability of capital and the terms thereof. Statements expressing expectations and projections with respect to future matters are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which provides a safe harbor for forward-looking statements made by us or on our behalf. We caution that these forward-looking statements involve a number of risks and uncertainties and are subject to many variables that could impact our future performance. These statements are made on the basis of management’s views and assumptions, as of the time the statements are made, regarding future events and performance. There can be no assurance, however, that management’s expectations will necessarily come to pass. Actual future events and performance may differ materially from the expectations reflected in our forward-looking statements. We do not intend, nor do we undertake any duty, to update any forward-looking statements.
A wide range of factors could materially affect future developments and performance, including, but not limited to:
•the continued impact of the COVID-19 pandemic on our operations and on general economic conditions, including inflationary pressure;
•risks associated with weak or uncertain global economic conditions and their impact on the level of expenditures on advertising;
• heightened levels of economic inflation and rising interest rates; fluctuations in operating costs; supply chain shortages; the war in Ukraine and the associated global effects thereof; the continued impact of the COVID-19 pandemic on our operations and on general economic conditions; our ability to service our debt obligations and to fund our operations and capital expenditures;
•the impact of our substantial indebtedness, including the effect of our leverage on our financial position and earnings;
•industry conditions, including competition;
•our ability to obtain and renew key contracts with municipalities, transit authorities and private landlords;
•technological changes and innovations;
•shifts in population and other demographics;
•fluctuations in operating costs;
•changes in labor conditions and management;
•regulations and consumer concerns regarding privacy and data protection;
•a breach of our information security systems and measures;
•legislative or regulatory requirements;
•restrictions on out-of-home advertising of certain products;
• the impact of the continued strategic review of our European business and assets, including a possible sale thereof; our ability to execute restructuring plans;
•the impact of future dispositions, acquisitions and other strategic transactions;
•third-party claims of intellectual property infringement, misappropriation or other violation against us or our suppliers;
• the risk that indemnities from iHeartMedia will not be sufficient to insure us against the full amount of certain liabilities; risks of doing business in foreign countries;
•fluctuations in exchange rates and currency values;
•effects of Brexit on our business;
•volatility of our stock price;
•the effect of analyst or credit ratings downgrades;
•our ability to continue to comply with the applicable listing standards of the New York Stock Exchange;
•the ability of our subsidiaries to dividend or distribute funds to us in order for us to repay our debts;
•the restrictions contained in the agreements governing our indebtedness limiting our flexibility in operating our business;
•uncertainty relating to the LIBOR calculation process and potential phasing out of LIBOR;
•the risk that our historical financial information is not necessarily representative of the results we would have achieved as an independent public company and may not be a reliable indicator of future results;
•the risk that indemnities from iHeartMedia, Inc. will not be sufficient to insure us against the full amount of certain liabilities;
•our dependence on our management team and other key individuals; continued scrutiny and
• changing expectations from investors, lenders, customers, government regulators and other stakeholders; and certain other factors set forth in our other filings with the SEC.
This list of factors that may affect future performance and the accuracy of forward-looking statements is illustrative and is not intended to be exhaustive. Accordingly, all forward-looking statements should be evaluated with the understanding of their inherent uncertainty.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are exposed to market risks arising from changes in market rates and prices, including movements in foreign currency exchange rates, interest rates and inflation.
Foreign Currency Exchange Rate Risk
We have operations in America, Europe, Singapore and Latin America, and foreignAmerica. Foreign operations are measured in their local currencies. Ascurrencies, and as a result, our financial results could be affected by factors such as changes in foreign currency exchange rates or weak economic conditions in the foreign markets in which we have operations. Changes in economic or political conditions in any of the foreign countries in which we operate could result in exchange rate movement, new currency or exchange controls or other currency restrictions being imposed.
Our foreign operations reported net losses of $25.9$14.2 million and $169.5$65.6 million for the three and ninesix months ended SeptemberJune 30, 2021,2022, respectively. We estimate that a 10% increase in the value of the U.S. dollar relative to foreign currencies would have decreased our net losses for the three and ninesix months ended SeptemberJune 30, 20212022 by $2.6$1.4 million and $17.0$6.6 million, respectively, and a 10% decrease in the value of the U.S. dollar relative to foreign currencies would have increased our net losses for the three and ninesix months ended SeptemberJune 30, 20212022 by corresponding amounts. This analysis does not consider the implications that such currency fluctuations could have on the overall economic activity that could exist in such an environment in the U.S. or thesuch foreign countries or on the results of operations of these foreign entities.
Interest Rate Risk
A portion of our long-term debt bears interest at variable rates;rates, and as a result, our financial results are affected by changes in interest rates. As of SeptemberJune 30, 2021, 36%2022, approximately 34% of our aggregate principal amount of long-term debt bore interest at floating rates. Assuming the current level of borrowings and a 50%100 basis point increase in LIBOR, it is estimated that our interest expense for the three and ninesix months ended SeptemberJune 30, 20212022 would have increased by $0.4$4.9 million and $1.5$9.8 million, respectively.
LIBOR, we will continue to work with the administrative agents under our credit agreements to agree on replacement rates. At this time, we do not expect the replacement of LIBOR to result in a material impact to our financial statements. In the event of an adverse change in interest rates, Company management may take actions to mitigate our exposure. However, due to the uncertainty of the actions that would be taken and their possible effects, the preceding interest rate sensitivity analysis assumes no such actions. Further, the analysis does not consider the effects of the change in the level of overall economic activity that could exist in such an environment.
Inflation Risk
Inflation is a factor in the economies in which we do business, and we continue to seek ways to mitigate its effect.effects. Current heightened levels of inflation may result in higher costs and decreased margins and earnings. Inflation has affected our performance as it has resulted in terms of higher costs for wages, salaries, materials and equipment. Although the exact impact of inflation is indeterminable, we believe we have partially offset these higher costs by increasing the effective advertising rates of most of our out-of-home display faces. In addition, our site leases, which are long-term in nature, are less impacted by short-term swings in inflation.
In addition, due to rising interest rates and inflation, we performed an impairment test on certain of our indefinite-lived billboard permits as of June 30, 2022, resulting in an impairment charge of $21.8 million in our Americas segment. Continued increases in interest rates and heightened inflation may result in additional impairment charges or have other adverse effects on our results of operations.
ITEM 4. CONTROLS AND PROCEDURES
As required by Rule 13a-15(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), under the supervision and with the participation of Company management, including our Chief Executive Officer (“CEO”) and our Chief Financial Officer (“CFO”), we have carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this report. Our disclosure controls and procedures are designed to provide reasonable assurance that information we are required to disclose in reports that are filed or submitted under the Exchange Act is accumulated and communicated to our management, including our Chief Executive OfficerCEO and our Chief Financial Officer,CFO, as appropriate to allow timely decisions regarding required disclosure and is recorded, processed, summarized and reported within the time periods specified by the SEC. Based on that evaluation, our Chief Executive OfficerCEO and our Chief Financial OfficerCFO concluded that our disclosure controls and procedures were effective as of SeptemberJune 30, 20212022 at the reasonable assurance level.
There were no changes in our internal control over financial reporting that occurred during the quarter ended SeptemberJune 30, 20212022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II – OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
For information regarding our material pending legal proceedings, please refer to Note 5 to our Condensed Consolidated Financial Statements located in Item 1 of Part I of this Quarterly Report on Form 10-Q. ITEM 1A. RISK FACTORS
There have been no material changes to the risk factors disclosed under Part I, Item 1A “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2020, except that the risk factor set forth under, “The COVID-19 pandemic has negatively affected and will likely continue to negatively affect our business, operating results, financial condition and prospects” is updated and replaced as follows:
The COVID-19 pandemic has negatively affected and will likely continue to negatively affect our business, operating results, financial condition and prospects.
On March 11, 2020, the COVID-19 outbreak was characterized as a pandemic by the World Health Organization. In response to the pandemic, governments around the world implemented numerous measures to try to contain the virus, such as travel bans and restrictions, quarantines, work-from-home orders and shutdowns. These measures have impacted and continue to impact our workforce and operations, the behavior of our advertising customers and of consumers, and the operations of our suppliers. Our business, along with the global economy, was adversely affected by these measures, which resulted in significant reductions in time spent out of home by consumers, reductions in advertising and consumer spending, volatile economic conditions and business disruptions across markets globally.
We have experienced, and may experience in the future, significantly reduced advertising spend, which has and could continue to materially adversely impact our business, results of operations and overall financial performance in future periods and could result in future impairments. As lockdowns have been lifted and mobility levels have increased, we have seen corresponding increases in revenue across our products; however, we are unable to predict if such increases will be sustained. Additionally, impacts of the COVID-19 pandemic could have the effect of heightening many of the other risks described in the “Risk Factors” section in our Annual Report on Form 10-K for the year ended December 31, 2020.
Although several COVID-19 vaccines are currently being widely administered in both the U.S. and Europe, the duration and severity of the effects of the pandemic continue to evolve and remain uncertain and may be impacted by various factors, including the pace of COVID-19 vaccine distribution and vaccine effectiveness, rates of infection from new COVID-19 variants, and actions taken throughout the world, including in our markets, to contain the coronavirus or manage its impact. Macro-economic conditions, including inflationary pressures resulting from easing COVID-19 lockdowns, may also affect our business. Heightened levels of economic inflation could result in higher costs and decreased margins and earnings, since inflation has historically affected our performance in terms of higher costs for wages, salaries and equipment. If our costs are subject to significant inflationary pressures, we may not be able to fully offset such higher costs through advertising rate increases. Our inability or failure to do so could harm our business, financial condition and results of operations. The severity, magnitude and duration of COVID-19 continues to be uncertain, evolving, hard to predict and depends on events beyond our knowledge or control. As such, we might not be able to predict or respond to all impacts on a timely basis to prevent near- or long-term adverse impacts on our business, results of operations, financial condition and cash flows, which may be material.2021.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
The following table sets forth our purchases of shares of our common stock made during the quarter ended SeptemberJune 30, 2021:2022:
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| Period | Total Number of Shares Purchased(1) | | Average Price Paid per Share(1) | | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | | Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs |
| July 1 through July 31 | 14,002 | | | $ | 1.61 | | | — | | | — | |
| August 1 through August 31 | 2,409 | | | $ | 1.88 | | | — | | | — | |
| September 1 through September 30 | 594,109 | | | $ | 2.45 | | | — | | | — | |
| | | | | | | |
| Total | 610,520 | | | $ | 2.43 | | | — | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Period | Total Number of Shares Purchased(1) | | Average Price Paid per Share(1) | | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | | Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs |
| April 1 through April 30 | 2,370,313 | | | $ | 3.48 | | | — | | | — | |
| May 1 through May 31 | 712,899 | | | $ | 2.50 | | | — | | | — | |
| June 1 through June 30 | — | | | | | — | | | — | |
| | | | | | | |
| Total | 3,083,212 | | | $ | 3.25 | | | — | | | — | |
(1)The shares indicated consist of shares of our common stock tendered by employees to us during the three months ended SeptemberJune 30, 20212022 to satisfy thesuch employees’ tax withholding obligations in connection with the vesting and release of restricted shares, which are repurchased by us based on their fair market value on the date the relevant transaction occurs.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS
| | | | | | | | |
Exhibit
Number | | Description |
| | |
| | |
| | |
| | |
| | |
10.1 | | |
10.2 | | |
| 31.1* | | |
| 31.2* | | |
| 32.1** | | |
| 32.2** | | |
| 101.INS* | | XBRL Instance Document. |
| 101.SCH* | | XBRL Taxonomy Extension Schema Document. |
| 101.CAL* | | XBRL Taxonomy Extension Calculation Linkbase Document. |
| 101.DEF* | | XBRL Taxonomy Extension Definition Linkbase Document. |
| 101.LAB* | | XBRL Taxonomy Extension Label Linkbase Document. |
| 101.PRE* | | XBRL Taxonomy Extension Presentation Linkbase Document. |
| 104 | | Cover Page Interactive Data File (formatted as inline XBRL). |
__________________
* Filed herewith.
** Furnished herewith.
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| | | | | | | | |
| | CLEAR CHANNEL OUTDOOR HOLDINGS, INC. |
| | |
NovemberAugust 9, 20212022 | | /s/ JASON A. DILGER |
| | Jason A. Dilger |
| | Chief Accounting Officer |
