Clear Channel Outdoor Holdings Inc

The preparation of our financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires Company management to make estimates, judgments and assumptions that affect the reported amounts of revenue, expenses, assets and liabilities, and the disclosure of contingent assets and liabilities, in our financial statements. These estimates are based on historical experience and other assumptions believed to be reasonable under the circumstances. We regularly evaluate these estimates as they form the basis for judgments about the carrying values of assets and liabilities, and the reported amounts of revenue and expenses, that may not be readily apparent from other sources. Since future events cannot be predicted with certainty, actual results may differ from these estimates, and such differences could be material.

For a discussion of our significant accounting policies, please refer to Note 2 to our Consolidated Financial Statements in Item 8 of this Annual Report on Form 10-K. Management believes the following accounting estimates are critical to understanding and evaluating our financial results, as they require the most difficult, subjective or complex judgments and assumptions, with the potential for material impact if actual results differ.

Long-lived Assets

We estimate the useful lives of our long-lived assets, including property, plant and equipment, finite-lived intangible assets, and operating lease right-of-use assets, based on our historical experience and intended use of the assets. These estimates are periodically reassessed to ensure they remain reasonable. If we determine an asset will be disposed of earlier than expected, we adjust its remaining depreciation or amortization period accordingly.

We review long-lived assets for impairment when events or circumstances indicate that their carrying amounts may not be recoverable, which occurs when the undiscounted cash flows expected to be generated by the assets are lower than their carrying amounts. Management applies judgment in estimating future cash flows, including forecasting the useful lives of the assets and selecting the discount rate that reflects the risk inherent in those cash flows. When assets are determined to be unrecoverable and we intend to hold the asset for continued use, we reduce their carrying amount to fair value. If the asset is held for sale, we reduce its carrying amount to fair value less costs to sell. To estimate fair value, we use assumptions such as future cash flows, industry growth rates, discount rates and salvage values.

In 2024, no impairments were recognized for long-lived assets in continuing operations. However, we recognized an impairment charge of $18.1 million related to long-lived assets in discontinued operations, as the carrying values of certain asset groups in our Latin American businesses exceeded their estimated future cash flows. We used a market transaction approach to estimate the fair value of these assets. Additionally, as of December 31, 2024, we recognized a $44.4 million loss related to the Brazil business in conjunction with its classification as held for sale.

As of December 31, 2024, there were no additional indicators of impairment. However, if actual results differ from our assumptions, we may be exposed to future impairment losses that could be material to our results of operations.

We perform an impairment test on goodwill at least annually as of July 1, or more frequently if events or changes in circumstances indicate potential impairment. Our impairment testing is based on a discounted cash flow approach, which estimates future cash flows expected to be generated by the related assets, discounted to their present value using a risk-adjusted discount rate. Terminal values are also estimated and discounted to present value.

Assessing the recoverability of goodwill requires significant judgment and assumptions, including revenue, operating margins, growth rates and discount rates. These assumptions are based on our budgets, business plans, economic projections and marketplace data.

In 2024, no impairments were recognized on goodwill. The following assumptions were used in our annual impairment test performed as of July 1, 2024 to determine the fair value of our reporting units:

•Expected cash flows for the initial 4.5-year period were based on detailed, multi-year forecasts from each operating segment, reflecting the advertising outlook across our businesses.

•Cash flows were projected to grow at a perpetual growth rate of 3.0%.

•A discount rate of 10.0% was applied to reporting units in continuing operations, while reporting units in discontinued operations were assigned discount rates ranging from 12.0% to 15.0%, reflecting the varying risks associated with future cash flows.

Based on this analysis, a hypothetical 10% reduction in the estimated fair value of each reporting unit with goodwill would not have resulted in an impairment. Additionally, the table below shows the decrease in the fair value of each reporting unit that would have resulted from a 100-basis-point decrease in revenue growth and profit margin assumptions, and a 100-basis-point increase in the discount rate assumption. These changes would not have led to impairment, as the fair value of each reporting unit would still exceed its carrying value.

There were no indicators of impairment as of December 31, 2024. While we believe our estimates and assumptions are reasonable, the assumptions are not necessarily indicative of future results, and 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 impairment charges in the future.

Leases

The most significant estimate used by management in accounting for leases is the incremental borrowing rate (“IBR”), which is used to determine the present value of lease payments at the commencement of a lease. An increase in the IBR would decrease the net present value of minimum lease payments, which could reduce the likelihood of a lease being classified as a finance lease.

For our U.S. business, we calculate the IBR monthly based on the yield of our most recently issued secured debt, currently the CCOH 7.875% Senior Secured Notes. This yield is extrapolated over a 30-year time horizon using a composite credit rating yield curve. For our international operations, we use a portfolio approach based on interest rate parity theory. This approach adjusts the U.S. IBR to derive country-specific rates, considering expected currency appreciation or depreciation relative to the U.S. Dollar.

Tax Provisions

Our estimates of income taxes, including the significant items giving rise to deferred tax assets and liabilities, reflect our assessment of future taxes to be paid on items in the financial statements, considering both timing and the probability of realization. Actual income taxes may differ from these estimates due to future changes in tax law or the results of federal, state or foreign tax authority reviews of our tax returns.

We use our best judgment to assess whether it is more likely than not that our deferred tax assets will be realized. If we believe it is more likely than not that some or all of the deferred tax assets will not be realized, we establish a valuation allowance.

We also assess whether it is more likely than not that we will sustain the positions we have taken on tax returns, and if so, the amount of benefit to recognize initially within our financial statements. We regularly review our uncertain tax positions and adjust our unrecognized tax benefits based on changes in facts and circumstances, including changes in tax law, interactions with taxing authorities, and case law developments. These adjustments may impact our income tax expense, and the settlement of uncertain tax positions may require the use of cash.

Litigation Accruals

We are involved in certain legal proceedings and have accrued an estimate of the probable costs for the resolution of claims where the occurrence of loss is considered probable and the amount of loss can be reasonably estimated. These estimates are based on current assumptions and have been developed in consultation with legal counsel, incorporating an analysis of potential outcomes based on a combination of litigation and settlement strategies. The actual costs may differ from these estimates, and future results of operations could be materially affected by changes in assumptions or the outcome of these legal proceedings.

NEW ACCOUNTING PRONOUNCEMENTS

For a description of the expected impact of newly issued but not yet adopted accounting pronouncements on our financial position and results of operations, refer to Note 2 to our Consolidated Financial Statements in Item 8 of this Annual Report on Form 10-K.