Clear Channel Outdoor Holdings Inc

Description of Our Business and Segments

Our revenue is derived from selling advertising on the out-of-home displays we own or operate in various key markets using assorted digital and traditional display types. We have four reportable business segments: America, which consists of our U.S. operations excluding airports; Airports, which includes revenue from U.S. and Caribbean airports; Europe-North, which consists of operations in the U.K., the Nordics and several other countries throughout northern and central Europe; and Europe-South, which consists of operations in Spain and, prior to their sales on March 31, 2023, May 31, 2023 and October 31, 2023, respectively, Switzerland, Italy and France. Our remaining operations in Latin America, including in Mexico, Brazil, Chile and Peru, and in Singapore are disclosed as “Other.” Refer to Note 4 to our Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K for additional details regarding our segments.

Dispositions and Discontinued Operations

In 2023, we sold, or entered into agreements to sell, our businesses in Switzerland, Italy, Spain and France, comprising our entire Europe-South segment.

•On March 31, 2023, we sold our business in Switzerland to Goldbach Group AG for cash proceeds of $84.9 million, net of direct costs to transact the sale and cash sold.

•On May 31, 2023, we sold our business in Italy to JCDecaux for cash proceeds of $4.3 million, net of direct costs to transact the sale and cash sold.

•In May 2023, we entered into an agreement to sell our business in Spain to JCDecaux for cash consideration of approximately $64.3 million. This transaction is expected to close in 2024, upon satisfaction of regulatory approval and other customary closing conditions.

•On October 31, 2023, we sold our business in France to Equinox Industries (“Equinox”). We delivered our business in France to Equinox with $44.5 million of cash, subject to adjustment for related customary items, tax and other costs, to support ongoing operations of the business, and Equinox assumed the $29.7 million state-guaranteed loan held by Clear Channel France. In December 2023, Equinox repaid us $4.9 million to satisfy certain post-closing obligations. Additionally, we incurred certain direct costs to transact the sale. In total, cash delivered to the buyer (net of the repayment) and payment of these additional direct costs was $43.0 million, with an additional $0.8 million of accrued direct costs to be paid in 2024.

We are using the net proceeds from these sales, after payment of transaction-related fees and expenses, to improve liquidity and increase financial flexibility of the business as permitted under our debt agreements. As part of the sale agreements for each business, we have agreed to provide certain transitional services as defined within the respective Transition Services Agreement for a period of time after sale.

In aggregate, the sales of our businesses in Switzerland, Italy and France, along with the agreement to sell our business in Spain (collectively comprising our entire Europe-South segment), met the criteria for discontinued operations presentation during 2023. As a result, each of these businesses has been reclassified to discontinued operations in the financial statements included in this Annual Report on Form 10-K for all periods presented, resulting in changes to the presentation of certain amounts for prior periods. Unless otherwise noted, the remaining discussion in this MD&A presents the results of continuing operations and excludes amounts related to discontinued operations for all periods presented.

International Sales Processes

We have initiated processes to sell the businesses in our Europe-North segment and in Latin America. There can be no assurance that these processes will result in any additional transactions or particular outcomes. We have not set a timetable for completion of these processes, may suspend the processes at any time and do not intend to make further announcements regarding the processes unless and until our Board approves a course of action for which further disclosure is appropriate.

Macroeconomic Trends

Advertising revenue is highly correlated to, and has historically trended in line with, changes in gross domestic product, both domestically and internationally. COVID-19, which had severe negative impacts on the global economy, also had a significant adverse impact on our results of operations in 2020 and 2021. Since this time, we have experienced a rebound with revenues exceeding pre-COVID-19 levels in all of our segments.

More recently, we have been impacted by the following macroeconomic trends:

•Over the last few years, global inflation has increased, peaking in 2022. Although inflation rates slowed in 2023, global inflation remains high and has affected our results due to higher costs, particularly in our Europe businesses. We believe we have partially offset higher costs by increasing the effective advertising rates for most of our products.

•In response to the heightened levels of inflation, central banks, including the U.S. Federal Reserve, raised interest rates significantly in 2022 and 2023, resulting in an increase in our weighted average cost of debt.

•Our international results are also impacted by fluctuations in foreign currency exchange rates. During 2022, the U.S. dollar significantly strengthened against the Euro and British pound sterling, among other European currencies, resulting in an adverse impact on reported results in our Europe-North segment. The U.S. dollar has since trended weaker, and fluctuations in foreign currency exchange rates did not have a significant impact on our reported results in 2023.

While inflation, interest rates and foreign currency exchange rates were lower or less volatile in 2023 compared to the prior year, future fluctuations in these indicators are uncertain and could result in further adverse impacts to our reported results. The market risks that our business is subject to are further described in Item 7A of this Annual Report on Form 10-K.

Additionally, our segment results are impacted by economic conditions in the specific markets and industries in which we operate. However, we believe the diversity of our asset base and customer portfolio reduces our exposure to negative market- and industry-specific trends. During 2023, we experienced weakness in revenue within certain of our larger U.S. markets, most notably the San Francisco/Bay Area market as specific macroeconomic trends affecting this market resulted in lower spend on out-of-home advertising. Additionally, Hollywood labor union strikes negatively impacted out-of-home advertising sales in the Media/Entertainment industry across our U.S. markets. However, the negative impacts of these trends were more than offset by higher revenue generated in certain other U.S. markets and in our Airports and Europe-North segments.

Debt Activity

In June 2023, we amended our Receivables-Based Credit Facility to extend the maturity date to August 2026 and our Revolving Credit Facility to extend the maturity of a substantial portion of the commitments thereunder to August 2026. Additionally, the aggregate revolving credit commitments under each facility were revised.

On August 22, 2023, we issued $750.0 million aggregate principal amount of 9.000% Senior Secured Notes due 2028 (the “CCOH 9.000% Senior Secured Notes”) and used a portion of the net proceeds to prepay $665.0 million of outstanding principal on the Term Loan Facility, which we repurchased at a discount.

In September 2023, we repurchased in the open market $5.0 million principal amount of 7.750% Senior Notes due 2028 (the “CCOH 7.750% Senior Notes”) and $10.0 million principal amount of 7.500% Senior Notes due 2029 (the “CCOH 7.500% Senior Notes” and, together with the CCOH 7.750% Senior Notes, the “CCOH Senior Notes”) at a discount. The repurchased notes are held by a subsidiary of the Company and have not been cancelled.

Please refer to Note 6 to our Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K for additional details.