Clear Channel Outdoor Holdings Inc

Liquidity Analysis

Short-Term Liquidity

Our primary cash requirements are for working capital used to fund the operations of the business, capital expenditures and debt service. We typically meet these needs through cash on hand, internally-generated cash flow from operations and, if necessary, borrowings under our credit facilities. We believe our current sources of funds will be sufficient to meet our cash requirements for at least the next 12 months.

Long-Term Liquidity

Our long-term cash requirements will depend on many factors, including the growth of our business, investments in digital conversions and new technologies, and the pursuit and outcome of strategic opportunities, including the completion of the sale of our Europe-North segment and the ongoing sales processes for our businesses in Spain and Brazil. Additionally, we have long-term cash requirements related to the repayment of outstanding debt, which is scheduled to mature over the next five years. We believe our sources of funds will be adequate to meet our cash requirements in the long-term.

However, our ability 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 macro-economic conditions, interest rates, inflation, increased tariffs and retaliatory trade policies, and geopolitical events such as the ongoing conflicts in Ukraine and the Middle East. For additional details about our market risks, please refer to Item 7A of this Annual Report on Form 10-K. Furthermore, 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 time.

We regularly consider and discuss potential financing alternatives with our lenders and other parties. In the future, we may seek supplemental liquidity through additional financing from banks or other lenders, offerings of public or private debt, equity or equity-linked securities, strategic partnerships, or a combination thereof. In addition, from time to time, we have explored, and expect to continue to explore, a variety of transactions to improve our liquidity and/or refinance our indebtedness. However, there is no assurance that we will be able to secure financing alternatives, complete liquidity-generating transactions or refinance debt 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 that may be beyond our control. Even if financing alternatives are available, we may not find them suitable or offered at reasonable interest rates, and the terms of our existing or future debt agreements may limit our ability to secure financing on terms that are available to us at that time or at all.

If we cannot generate sufficient cash from operations or secure sources of supplemental liquidity as needed, we could face substantial liquidity problems, which could have a material adverse effect on our financial condition and ability to meet our obligations.

We and our subsidiaries have repurchased, and may in the future repurchase from time to time as part of various financing and investment strategies, outstanding notes in open market purchases, privately negotiated transactions, or otherwise. These repurchases, if any, could materially impact our liquidity, results of operations, or leverage ratios, which could affect our ability to comply with the covenants contained in our debt agreements. The decision to repurchase, if at all, will depend on factors such as prevailing market conditions, our liquidity requirements and contractual restrictions, and the amounts involved may be material.

Cash Requirements

Working Capital Needs

We utilize working capital to fund our operations and meet certain contractual obligations, including commitments under site leases and other non-cancelable contracts.

Site Lease Expense

A significant cash requirement for our operations is site lease expenses, which include payments for land or space used by our advertising displays. These costs consist of both minimum guaranteed payments and revenue-sharing arrangements under lease and non-lease contracts. We lease the majority of the land occupied by our billboard structures under long-term site leases, which typically have initial terms of up to 20 years. Additionally, most of our airport and street furniture displays are operated through long-term contracts, many of which have rent provisions based on the greater of a percentage of advertising revenue or a minimum guaranteed annual payment. Many of our lease agreements contain renewal options and annual rent escalation clauses.

In 2024, 2023 and 2022, we incurred site lease expenses for continuing operations of $561.5 million, $549.4 million and $477.0 million, respectively, which are included in “Direct operating expenses” on our Consolidated Statements of Loss. During these years, we received rent abatements of $10.3 million, $24.9 million and $46.9 million, respectively, which are not expected to continue in future periods.

In 2024, we entered into a 15-year contract for roadside advertising assets controlled by the New York Metropolitan Transit Authority with a total cash obligation of $390.0 million, effective November 1, 2024. As of December 31, 2024, our short-term cash obligations under this contract amounted to $26.0 million due within the next 12 months.

As of December 31, 2024, our total short-term cash obligations related to site lease expenses under non-cancelable operating leases and other non-cancelable contracts were $610.2 million, including $248.9 million related to discontinued operations. The timing of the sales of the entities held for sale as of December 31, 2024 will affect the amount of the obligation we are ultimately responsible for. For details on our total future cash obligations under non-cancelable operating leases and other non-cancelable contracts for continuing operations, including schedules of future minimum payments, please refer to Notes 7 and 8 to our Consolidated Financial Statements in Item 8 of this Annual Report on Form 10-K. These obligations exclude amounts related to discontinued operations.

Other

In September 2023, we reached a settlement with the SEC regarding resolution of the investigation of our former indirect, non-wholly-owned subsidiary, Clear Media. Under the settlement, we agreed to pay a total of $26.1 million in installments, with $13.1 million paid in October 2023 and the remaining $13.1 million paid in the third quarter of 2024.

Capital Expenditures and Acquisitions

Capital Expenditures

Our capital expenditures primarily relate to the construction and maintenance of our out-of-home advertising displays, including the ongoing deployment of digital displays as part of our long-term strategy to digitize our network. We believe cash flow from operations will generally be sufficient to fund these expenditures.

We made the following capital expenditures in 2024, 2023 and 2022:

(1)Capital expenditures in our America segment decreased in 2024 due to a shift in the mix of digital deployments that require lower levels of investment.

(2)Capital expenditures in our Airports segment decreased in 2024 due to the timing of capital commitments under our airport advertising contract with the Port Authority of New York and New Jersey.

(3)Capital expenditures for discontinued operations decreased following the sales of our businesses in Switzerland, Italy and France in 2023, and are expected to decline further as we sell the remaining European and Latin American businesses.

(4)As of December 31, 2024, 2023 and 2022, we had accrued but unpaid capital expenditures for continuing operations of $6.7 million, $6.0 million and $11.5 million, respectively. For discontinued operations, the accrued but unpaid capital expenditures as of these dates were $8.6 million, $10.2 million and $14.6 million, respectively.

(5)Excludes asset acquisitions.

As of December 31, 2024, we had short-term capital expenditure commitments totaling $55.3 million due within the next 12 months, including $30.1 million related to discontinued operations. The timing of the sales of the entities held for sale as of December 31, 2024 will affect the amount of the obligation we are ultimately responsible for. These commitments are primarily related to certain transit, street furniture and airports contracts, which include minimum purchase requirements for property, plant and equipment, as well as contracts with penalties for failing to fulfill obligations to build bus stops, kiosks, and other public amenities or advertising structures. For details on our total future capital expenditure commitments for continuing operations, including a schedule of future minimum payments, please refer to Note 8 to our Consolidated Financial Statements in Item 8 of this Annual Report on Form 10-K. These obligations exclude amounts related to discontinued operations.

Acquisitions

In 2024, 2023 and 2022, we acquired out-of-home advertising assets in our America segment for total cash consideration of $9.0 million, $12.1 million and $62.0 million, respectively. These acquisitions primarily consisted of permits, permanent easements and digital billboard structures, and in 2022, land. Additionally, in 2024, we acquired $7.6 million in assets, including permits, permanent easements and digital billboards, through a non-cash exchange with another out-of-home advertising provider.

In 2024, we also acquired out-of-home advertising assets in our Europe-North segment for cash consideration of $8.4 million, primarily consisting of permits. Additionally, we acquired the UIP group, a business that develops and operates urban infrastructure in Norway, including bike-sharing programs and bus shelters, for cash consideration of $9.3 million, net of cash acquired.

Debt Service Obligations

Interest Payments

A significant portion of our cash requirements is for debt service obligations. In 2024, 2023 and 2022, we paid interest of $434.5 million, $404.4 million and $341.4 million, respectively. The increase in 2024 was largely due to the timing of interest payments related to the issuance of the CCOH 9.000% Senior Secured Notes in August 2023 and the March 2024 Debt Transactions, and the increase in 2023 was driven by higher interest rates on our Term Loan Facility.

Assuming no additional refinancing, new debt issuance or principal prepayments, we expect cash interest payments of approximately $422 million in 2025, including $28 million related to the CCIBV Term Loan Facility. Upon the sale of the Europe-North businesses, we will use the anticipated net proceeds, after payment of transaction-related fees and expenses, to prepay the full $375 million principal amount of the CCIBV Term Loan Facility, plus any accrued interest, in accordance with the CCIBV Credit Agreement. Excluding interest on the CCIBV Term Loan Facility, we expect annual cash interest payments of approximately $394 million in 2025 and $393 million in 2026.

Principal Payments

Under the Senior Secured Credit Agreement, we were historically required to make quarterly principal payments of $5.0 million on the Term Loan Facility. As a result, we made $20.0 million in principal payments during 2022 and $10.0 million during the first half of 2023. However, the remaining quarterly payment obligations were satisfied through a prepayment in August 2023, as detailed in the “Debt Activity” section below. Consequently, the remaining principal on the Term Loan Facility is due at maturity in August 2028.

Our next scheduled debt maturity is in April 2027, when the $375.0 million principal amount of the CCIBV Term Loan Facility becomes due. However, as previously described, we will prepay this balance in full using a portion of the net proceeds from the sale of the Europe-North businesses, which we expect to complete in 2025. Following that, our next debt maturity will occur in August 2027, when the $1.25 billion aggregate principal of the CCOH 5.125% Senior Secured Notes becomes due.

For additional details on our outstanding long-term debt and a schedule of future maturities, please refer to Note 6 to our Consolidated Financial Statements in Item 8 of this Annual Report on Form 10-K.

Sources of Capital and Liquidity

Cash On Hand

As of December 31, 2024, we had $164.3 million of cash and cash equivalents, including $54.6 million held by discontinued operations (our businesses in Europe and Latin America) and $3.3 million held by our continuing operations subsidiaries outside the U.S., primarily in the Caribbean.

Excess cash from our foreign operations can generally be transferred to our U.S. operations if needed, subject to the cash requirements of our foreign operations and restrictions under the credit agreement governing the CCIBV Term Loan Facility. At present, we could repatriate excess cash with minimal U.S. tax consequences, as calculated under tax law, and dividend distributions from our international subsidiaries may not result in a U.S. federal income tax liability.

Cash Flow from Operations

Net cash provided by operating activities primarily results from cash collected from customers for our out-of-home advertising services, offset by cash payments for site leases, production, installation and maintenance costs, employee compensation, marketing, facility and information technology expenses, interest on debt, taxes and other corporate expenditures. In 2024, 2023 and 2022, net cash provided by operating activities was $79.7 million, $31.3 million and $140.0 million, respectively.

In 2024, net cash provided by operating activities increased by $48.5 million compared to 2023. This improvement was driven by stronger performance from both continuing and discontinued operations, as well as the disposal of certain underperforming former Europe-South businesses, which had generated negative operating cash flow in 2023. However, this increase was partially offset by $30.1 million in incremental interest payments, largely due to timing, as previously described.

In 2023, net cash provided by operating activities decreased by $108.7 million compared to 2022. This decline was primarily driven by a $63.0 million increase in interest payments due to higher interest rates on our Term Loan Facility. The remaining decrease was largely attributable to the America segment, where higher site lease payments from lease renewals, amendments (including a large contract renegotiation), and reduced rent abatements outpaced cash collections, which were impacted by weaker performance in certain markets and verticals. Additionally, the divestiture of the former Europe-South businesses, which had negatively impacted operating cash flow in 2023 and contributed positively in 2022, further reduced operating cash flow. We also made the first of two $13.1 million annual installment payments to the SEC in 2023 related to the resolution of the Clear Media investigation, with the second installment paid in 2024. These declines were partially offset by improved performance in the Airports segment, as well as Europe-North and Spain discontinued operations.

Dispositions

In 2024, we received net cash proceeds of $13.7 million from asset dispositions.

In 2023, we received net cash proceeds of $59.8 million from business and asset dispositions, including $84.9 million from the sale of our former Switzerland business and $4.3 million from the sale of our former Italy business, net of transaction costs and cash sold. These were partially offset by $43.0 million in net cash delivered to the buyer and transaction costs related to the sale of our former France business. The remaining proceeds were from asset dispositions.

In 2022, we received net cash proceeds of $27.1 million from asset dispositions, including compensation from local governments for the condemnation and removal of billboards in certain markets within our America segment.

We anticipate gross cash proceeds of $625.0 million from the sale of our Europe-North segment businesses, subject to certain customary adjustments. The transaction is expected to close in 2025, upon satisfaction of regulatory approvals. As previously described, the net proceeds, after transaction-related fees and expenses, will be used to fully prepay the $375.0 million outstanding on the CCIBV Term Loan Facility, plus any accrued interest. We expect to use the remaining net proceeds primarily to repay additional debt and/or for other purposes permitted under the agreements governing the remainder of our indebtedness.

On February 5, 2025, we completed the sale of our businesses in Mexico, Peru and Chile and received $20.0 million in cash. We are also eligible to receive an additional $1.25 million earn-out, with the consideration subject to further customary adjustments. We intend to use the net proceeds from the sale to improve our liquidity position.

Credit Facilities

We have access to a Revolving Credit Facility and a Receivables-Based Credit Facility, both of which include sub-facilities for letters of credit and short-term borrowings. No draws were made under either facility in 2024, 2023 or 2022.

In June 2023, we amended the Senior Secured Credit Agreement (which governs the Revolving Credit Facility) and the Receivables-Based Credit Agreement, extending the maturity date of substantially all commitments under these credit facilities to August 23, 2026, in the amounts set forth below. These amendments also resulted in changes to the borrowing limits for each facility, as summarized below. We may request incremental credit commitments under each facility at any time, subject to customary conditions; however, the lenders under such facilities are not obligated to provide additional commitments.

The table below presents our borrowings and excess availability under these credit facilities as of December 31, 2024:

(1)The June 2023 amendments to the Senior Secured Credit Agreement and Receivables-Based Credit Agreement modified the borrowing limits as follows: The Revolving Credit Facility limit was reduced from $175.0 million to $150.0 million through August 23, 2024, and further reduced to $115.8 million through August 23, 2026. The maximum borrowing limit of the Receivables-Based Credit Facility was increased from $125.0 million to $175.0 million, but remains capped by the borrowing base, which is variable and is calculated based on our accounts receivable balance each period in accordance with the Receivables-Based Credit Agreement.

(2)As of December 31, 2024, outstanding letters of credit under the Revolving Credit Facility included a $20.2 million letter of credit related to our former business in France. Pursuant to the share purchase agreement related to this sale, our former French business and/or Equinox (the buyer) will either replace or procure a counter-guarantee for this payment obligation. Additionally, letters of credit under the Receivables-Based Credit Facility included a $6.3 million letter of credit related to our business in Spain.

(3)Due to rounding, totals may not sum exactly as presented in the table above.

For more details on each of these credit facilities, please refer to Note 6 to our Consolidated Financial Statements in Item 8 of this Annual Report on Form 10-K.

Debt Activity

In March 2024, we issued $865.0 million aggregate principal amount of CCOH 7.875% Senior Secured Notes, which mature in April 2030, and used a portion of the proceeds to prepay $835.0 million of borrowings outstanding under the Term Loan Facility. At the same time, we amended the Senior Secured Credit Agreement to refinance the $425.0 million remaining balance on the Term Loan Facility and extend its maturity date from August 2026 to August 2028, subject to certain conditions. The refinanced term loans were issued at a 1% discount, and proceeds from the issuance, along with remaining proceeds from the CCOH 7.875% Senior Secured Notes issuance and cash on hand, were used to pay off the original term loans, $14.9 million of accrued interest, and $15.4 million of fees and expenses related to these transactions.

In March 2024, CCIBV entered into the CCIBV Term Loan Facility, totaling an aggregate principal amount of $375.0 million, which matures in April 2027. The CCIBV Term Loan Facility, which was issued at a 1% discount, consists of two tranches: $300.0 million in fixed-rate term loans at 7.5% per annum and $75.0 million in floating-rate term loans at Term SOFR plus 2.25% per annum (subject to a floor of 5.25% per annum). We used the proceeds, along with cash on hand, to redeem the outstanding $375.0 million CCIBV Senior Secured Notes, which were scheduled to mature in August 2025, and to pay $11.8 million of accrued interest and $5.3 million in transaction fees. At December 31, 2024, we had accrued $0.4 million in unpaid fees related to these transactions.

In August 2023, we issued $750.0 million aggregate principal amount of CCOH 9.000% Senior Secured Notes, which mature in September 2028, and used a portion of the proceeds to prepay $665.0 million of Term Loan Facility principal, which we repurchased at a 1% discount. We paid $12.3 million in debt issuance costs related to these transactions.

In September 2023, we repurchased in the open market $5.0 million principal amount of the CCOH 7.750% Senior Notes and $10.0 million principal amount of the CCOH 7.500% Senior Notes for a total of $11.8 million, excluding accrued interest. The repurchased notes are held by a subsidiary of the Company and have not been cancelled.

We did not engage in any significant debt transactions in 2022.

Debt Covenants

Our debt agreements contain certain debt covenants, as described in Note 6 to our Consolidated Financial Statements in Item 8 of this Annual Report on Form 10-K. As of December 31, 2024, we were in compliance with all of these covenants. Additional information regarding compliance with the springing financial covenant under the Senior Secured Credit Agreement is provided below.

Senior Secured Credit Agreement Financial Covenant

The Senior Secured Credit Agreement includes a springing financial covenant applicable solely to the Revolving Credit Facility if its balance exceeds $0 and undrawn letters of credit exceed $10 million. This covenant requires compliance with a first lien net leverage ratio of less than 7.10 to 1.00. As of December 31, 2024, our first lien net leverage ratio was 6.60 to 1.00, calculated by dividing first lien net debt by EBITDA (as defined in the Senior Secured Credit Agreement) for the preceding four quarters. First lien net debt and EBITDA are presented herein as they are material components of the first lien net leverage ratio calculation.

Impact of Discontinued Operations on First Lien Net Leverage Ratio

Under the Senior Secured Credit Agreement, the calculation of the first lien net leverage ratio excludes the impact of all businesses classified as discontinued operations, whether the sale is closed or pending. As a result, EBITDA from discontinued operations is not included in the calculation. Additionally, the calculation does not give effect to the anticipated net cash proceeds from the sales of our international businesses or any intended uses therefrom. Consequently, our first lien net leverage ratio as of December 31, 2024 is higher than in previous periods and may not be directly comparable to such periods.

First Lien Net Debt

The following table presents a calculation of our first lien net debt as of December 31, 2024:

EBITDA

As defined in the Senior Secured Credit Agreement, our EBITDA for the preceding four quarters of $482.7 million is calculated as operating income from continuing operations before depreciation, amortization, impairment charges and share-based compensation, further adjusted for unusual or nonrecurring gains, losses, charges or expenses, including restructuring, redundancy or severance expenses and one-time compensation charges, and various other items.

The following table reconciles EBITDA to operating income from continuing operations and consolidated net cash provided by operating activities for the four quarters ended December 31, 2024:

(1)Primarily comprised of net gains from the disposition of operating assets, partially offset by interest income and transaction costs related to structural initiatives.

(2)Due to rounding, the total may not equal the sum of the line items in the table above.

(3)Includes non-cash operating lease expense; depreciation, amortization and impairment charges; loss on classification as held for sale and disposition of businesses and/or operating assets, net; share-based compensation; amortization of deferred financing charges and note discounts; foreign exchange transaction gain; credit loss expense; deferred taxes; loss or gain on extinguishment of debt and debt modification expense, net; and other reconciling items.