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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Clear Channel Outdoor Holdings Inc | NYSE:CCO | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
-0.05 | -3.23% | 1.50 | 1.60 | 1.50 | 1.60 | 1,472,156 | 21:00:32 |
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)
|
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
|
Class
|
Outstanding at May 1, 2020
|
- - - - - - - - - - - - - - - - - - - - - - - - - -
|
- - - - - - - - - - - - - - - - - - - - - - - - - -
|
Common Stock, $0.01 par value per share
|
467,305,068
|
|
|
Page Number
|
|
|
|
PART I—FINANCIAL INFORMATION
|
|
|
Item 1.
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
|
|
|
PART II—OTHER INFORMATION
|
|
|
Item 1.
|
||
Item 1A.
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
Item 5.
|
||
Item 6.
|
||
|
|
|
|
|
Page Number
|
Financial Statements:
|
|
Condensed Notes to Consolidated Financial Statements:
|
|
(In thousands, except share and per share data)
|
March 31, 2020
|
|
December 31,
2019 |
||||
|
(Unaudited)
|
|
|
||||
CURRENT ASSETS
|
|
|
|
|
|
||
Cash and cash equivalents
|
$
|
371,769
|
|
|
$
|
398,858
|
|
Accounts receivable
|
523,937
|
|
|
733,471
|
|
||
Less: Allowance for credit losses
|
(17,647
|
)
|
|
(23,786
|
)
|
||
Accounts receivable, net
|
506,290
|
|
|
709,685
|
|
||
Prepaid expenses
|
60,714
|
|
|
60,593
|
|
||
Other current assets
|
31,860
|
|
|
32,755
|
|
||
Assets held for sale
|
678,944
|
|
|
—
|
|
||
Total Current Assets
|
1,649,577
|
|
|
1,201,891
|
|
||
PROPERTY, PLANT AND EQUIPMENT
|
|
|
|
||||
Structures, net
|
726,984
|
|
|
953,545
|
|
||
Other property, plant and equipment, net
|
221,794
|
|
|
257,609
|
|
||
INTANGIBLE ASSETS AND GOODWILL
|
|
|
|
||||
Indefinite-lived permits
|
843,849
|
|
|
965,863
|
|
||
Other intangible assets, net
|
308,175
|
|
|
326,665
|
|
||
Goodwill
|
698,022
|
|
|
704,158
|
|
||
OTHER ASSETS
|
|
|
|
||||
Operating lease right-of-use assets
|
1,617,038
|
|
|
1,885,482
|
|
||
Other assets
|
58,971
|
|
|
98,075
|
|
||
Total Assets
|
$
|
6,124,410
|
|
|
$
|
6,393,288
|
|
CURRENT LIABILITIES
|
|
|
|
||||
Accounts payable
|
$
|
129,631
|
|
|
$
|
94,588
|
|
Accrued expenses
|
328,326
|
|
|
503,939
|
|
||
Current operating lease liabilities
|
319,170
|
|
|
387,882
|
|
||
Deferred revenue
|
99,066
|
|
|
84,035
|
|
||
Accrued interest
|
31,471
|
|
|
89,786
|
|
||
Current portion of long-term debt
|
20,303
|
|
|
20,294
|
|
||
Liabilities held for sale
|
384,055
|
|
|
—
|
|
||
Total Current Liabilities
|
1,312,022
|
|
|
1,180,524
|
|
||
NON-CURRENT LIABILITIES
|
|
|
|
||||
Long-term debt
|
5,210,627
|
|
|
5,063,724
|
|
||
Mandatorily-redeemable preferred stock
|
46,421
|
|
|
44,912
|
|
||
Non-current operating lease liabilities
|
1,316,735
|
|
|
1,559,743
|
|
||
Deferred tax liability
|
434,187
|
|
|
416,066
|
|
||
Other long-term liabilities
|
167,961
|
|
|
183,025
|
|
||
Total Liabilities
|
8,487,953
|
|
|
8,447,994
|
|
||
|
|
|
|
||||
Commitments and Contingencies (Note 6)
|
|
|
|
|
|
||
|
|
|
|
||||
STOCKHOLDERS’ DEFICIT
|
|
|
|
||||
Noncontrolling interest
|
138,755
|
|
|
152,814
|
|
||
Common stock, par value $0.01 per share: 2,350,000,000 shares authorized; 466,914,142 shares issued as of March 31, 2020; 466,744,939 shares issued as of December 31, 2019
|
4,669
|
|
|
4,667
|
|
||
Additional paid-in capital
|
3,493,369
|
|
|
3,489,593
|
|
||
Accumulated deficit
|
(5,634,283
|
)
|
|
(5,349,611
|
)
|
||
Accumulated other comprehensive loss
|
(363,722
|
)
|
|
(349,552
|
)
|
||
Treasury stock (506,250 shares held as of March 31, 2020; 504,650 shares held as of December 31, 2019)
|
(2,331
|
)
|
|
(2,617
|
)
|
||
Total Stockholders' Deficit
|
(2,363,543
|
)
|
|
(2,054,706
|
)
|
||
Total Liabilities and Stockholders' Deficit
|
$
|
6,124,410
|
|
|
$
|
6,393,288
|
|
(In thousands, except per share data)
|
Three Months Ended
|
||||||
|
March 31,
|
||||||
|
2020
|
|
2019
|
||||
Revenue
|
$
|
550,809
|
|
|
$
|
587,116
|
|
Operating expenses:
|
|
|
|
||||
Direct operating expenses (excludes depreciation and amortization)
|
350,269
|
|
|
347,827
|
|
||
Selling, general and administrative expenses (excludes depreciation and amortization)
|
123,704
|
|
|
122,966
|
|
||
Corporate expenses (excludes depreciation and amortization)
|
36,338
|
|
|
28,614
|
|
||
Depreciation and amortization
|
75,753
|
|
|
75,076
|
|
||
Impairment charges
|
123,137
|
|
|
—
|
|
||
Other operating expense, net
|
(6,021
|
)
|
|
(3,522
|
)
|
||
Operating income (loss)
|
(164,413
|
)
|
|
9,111
|
|
||
Interest expense, net
|
90,142
|
|
|
114,863
|
|
||
Loss on extinguishment of debt
|
—
|
|
|
(5,474
|
)
|
||
Other expense, net
|
(18,889
|
)
|
|
(565
|
)
|
||
Loss before income taxes
|
(273,444
|
)
|
|
(111,791
|
)
|
||
Income tax expense
|
(15,779
|
)
|
|
(57,763
|
)
|
||
Consolidated net loss
|
(289,223
|
)
|
|
(169,554
|
)
|
||
Less amount attributable to noncontrolling interest
|
(11,732
|
)
|
|
(5,387
|
)
|
||
Net loss attributable to the Company
|
$
|
(277,491
|
)
|
|
$
|
(164,167
|
)
|
|
|
|
|
||||
Other comprehensive income (loss), net of tax:
|
|
|
|
||||
Foreign currency translation adjustments
|
$
|
(16,421
|
)
|
|
$
|
2,549
|
|
Other comprehensive income (loss)
|
(16,421
|
)
|
|
2,549
|
|
||
Comprehensive loss
|
(293,912
|
)
|
|
(161,618
|
)
|
||
Less amount attributable to noncontrolling interest
|
(2,251
|
)
|
|
3,584
|
|
||
Comprehensive loss attributable to the Company
|
$
|
(291,661
|
)
|
|
$
|
(165,202
|
)
|
|
|
|
|
||||
Net loss attributable to the Company per share of common stock
|
$
|
(0.60
|
)
|
|
$
|
(0.45
|
)
|
(In thousands, except share data)
|
||||||||||||||||||||||||||||||
|
Three Months Ended March 31, 2020
|
|||||||||||||||||||||||||||||
|
Common Shares Issued
|
|
Non-controlling
Interest |
|
Controlling Interest
|
|
Total
|
|||||||||||||||||||||||
|
|
|
Common
Stock
|
|
Additional Paid-in
Capital
|
|
Accumulated
Deficit
|
|
Accumulated Other Comprehensive Loss
|
|
Treasury Stock
|
|
||||||||||||||||||
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
|
)
|
||||||||
Net loss
|
|
|
(11,732
|
)
|
|
—
|
|
|
—
|
|
|
(277,491
|
)
|
|
—
|
|
|
—
|
|
|
(289,223
|
)
|
||||||||
Exercise of stock options and release of stock awards
|
169,203
|
|
|
—
|
|
|
2
|
|
|
38
|
|
|
—
|
|
|
—
|
|
|
286
|
|
|
326
|
|
|||||||
Share-based compensation
|
|
|
42
|
|
|
—
|
|
|
3,735
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,777
|
|
||||||||
Payments to noncontrolling interests
|
|
|
(118
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(118
|
)
|
||||||||
Other comprehensive loss
|
|
|
(2,251
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(14,170
|
)
|
|
—
|
|
|
(16,421
|
)
|
||||||||
Other
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
||||||||
Balances at
March 31, 2020 |
466,914,142
|
|
|
$
|
138,755
|
|
|
$
|
4,669
|
|
|
$
|
3,493,369
|
|
|
$
|
(5,634,283
|
)
|
|
$
|
(363,722
|
)
|
|
$
|
(2,331
|
)
|
|
$
|
(2,363,543
|
)
|
(In thousands, except share data)
|
|||||||||||||||||||||||||||||||||
|
Three Months Ended March 31, 2019
|
||||||||||||||||||||||||||||||||
|
Pre-Separation
|
|
Non-controlling
Interest |
|
Controlling Interest
|
|
Total
|
||||||||||||||||||||||||||
|
Class A
Common Shares Issued |
|
Class B Common Shares
Issued |
|
|
Common
Stock |
|
Additional Paid-in
Capital |
|
Accumulated
Deficit |
|
Accumulated Other Comprehensive Loss
|
|
Treasury Stock
|
|
||||||||||||||||||
Balances at
December 31, 2018 |
51,559,633
|
|
|
315,000,000
|
|
|
$
|
160,362
|
|
|
$
|
3,666
|
|
|
$
|
3,086,307
|
|
|
$
|
(5,000,920
|
)
|
|
$
|
(344,489
|
)
|
|
$
|
(6,578
|
)
|
|
$
|
(2,101,652
|
)
|
Adoption of ASC 842, Leases
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14,613
|
|
|
—
|
|
|
—
|
|
|
14,613
|
|
|||||||||
Net loss
|
|
|
|
|
(5,387
|
)
|
|
—
|
|
|
—
|
|
|
(164,167
|
)
|
|
—
|
|
|
—
|
|
|
(169,554
|
)
|
|||||||||
Exercise of stock options and release of stock awards
|
150,127
|
|
|
|
|
—
|
|
|
1
|
|
|
72
|
|
|
—
|
|
|
—
|
|
|
(9
|
)
|
|
64
|
|
||||||||
Share-based compensation
|
|
|
|
|
152
|
|
|
—
|
|
|
1,682
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,834
|
|
|||||||||
Payments to noncontrolling interests
|
|
|
|
|
(3,684
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,684
|
)
|
|||||||||
Other comprehensive income (loss)
|
|
|
|
|
3,584
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,035
|
)
|
|
—
|
|
|
2,549
|
|
|||||||||
Balances at
March 31, 2019 |
51,709,760
|
|
|
315,000,000
|
|
|
$
|
155,027
|
|
|
$
|
3,667
|
|
|
$
|
3,088,061
|
|
|
$
|
(5,150,474
|
)
|
|
$
|
(345,524
|
)
|
|
$
|
(6,587
|
)
|
|
$
|
(2,255,830
|
)
|
(In thousands)
|
Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Consolidated net loss
|
$
|
(289,223
|
)
|
|
$
|
(169,554
|
)
|
Reconciling items:
|
|
|
|
||||
Depreciation and amortization
|
75,753
|
|
|
75,076
|
|
||
Impairment charges
|
123,137
|
|
|
—
|
|
||
Deferred taxes
|
17,743
|
|
|
(13,957
|
)
|
||
Provision for doubtful accounts
|
3,735
|
|
|
1,846
|
|
||
Amortization of deferred financing charges and note discounts, net
|
2,531
|
|
|
2,636
|
|
||
Share-based compensation
|
3,777
|
|
|
1,834
|
|
||
Loss on extinguishment of debt
|
—
|
|
|
5,474
|
|
||
Loss on disposal of operating and other assets, net
|
5,461
|
|
|
3,409
|
|
||
Foreign exchange transaction loss (gain)
|
18,755
|
|
|
(564
|
)
|
||
Other reconciling items, net
|
(1,824
|
)
|
|
(1,441
|
)
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Decrease in accounts receivable
|
75,232
|
|
|
69,249
|
|
||
Increase in prepaid expenses
|
(7,013
|
)
|
|
(23,646
|
)
|
||
Increase in other current assets
|
(6,164
|
)
|
|
(2,612
|
)
|
||
Increase (decrease) in accounts payable
|
39,458
|
|
|
(7,829
|
)
|
||
Decrease in accrued expenses
|
(76,161
|
)
|
|
(23,023
|
)
|
||
Increase (decrease) in accrued interest
|
(56,881
|
)
|
|
9,440
|
|
||
Increase in deferred revenue
|
9,574
|
|
|
18,321
|
|
||
Changes in other operating assets and liabilities, net
|
(36,511
|
)
|
|
7,661
|
|
||
Net cash used for operating activities
|
(98,621
|
)
|
|
(47,680
|
)
|
||
Cash flows from investing activities:
|
|
|
|
|
|
||
Purchases of property, plant and equipment
|
(32,815
|
)
|
|
(28,173
|
)
|
||
Purchases of concession rights
|
(3,079
|
)
|
|
—
|
|
||
Other investing activities, net
|
(50
|
)
|
|
597
|
|
||
Net cash used for investing activities
|
(35,944
|
)
|
|
(27,576
|
)
|
||
Cash flows from financing activities:
|
|
|
|
|
|
||
Draws on credit facilities
|
150,000
|
|
|
—
|
|
||
Proceeds from long-term debt
|
—
|
|
|
2,235,000
|
|
||
Payments on long-term debt
|
(5,070
|
)
|
|
(2,200,054
|
)
|
||
Debt issuance costs
|
(534
|
)
|
|
(26,752
|
)
|
||
Net transfers from iHeartCommunications
|
—
|
|
|
52,156
|
|
||
Other financing activities, net
|
204
|
|
|
(10
|
)
|
||
Net cash provided by financing activities
|
144,600
|
|
|
60,340
|
|
||
Effect of exchange rate changes on cash, cash equivalents and restricted cash
|
(8,691
|
)
|
|
586
|
|
||
Net increase (decrease) in cash, cash equivalents and restricted cash
|
1,344
|
|
|
(14,330
|
)
|
||
Cash, cash equivalents and restricted cash at beginning of period
|
417,075
|
|
|
202,869
|
|
||
Cash, cash equivalents and restricted cash at end of period
|
$
|
418,419
|
|
|
$
|
188,539
|
|
Supplemental Disclosures:
|
|
|
|
|
|
||
Cash paid for interest and dividends on mandatorily-redeemable preferred stock
|
$
|
145,938
|
|
|
$
|
102,551
|
|
Cash paid for income taxes, net of refunds
|
$
|
8,257
|
|
|
$
|
14,064
|
|
(In thousands)
|
Revenue from contracts with customers
|
|
Revenue from leases
|
|
Total Revenue
|
||||||
Three Months Ended March 31, 2020
|
|||||||||||
Americas
|
$
|
163,278
|
|
|
$
|
132,509
|
|
|
$
|
295,787
|
|
Europe
|
187,190
|
|
|
24,500
|
|
|
211,690
|
|
|||
Other(1)
|
39,276
|
|
|
4,056
|
|
|
43,332
|
|
|||
Total
|
$
|
389,744
|
|
|
$
|
161,065
|
|
|
$
|
550,809
|
|
|
|
|
|
|
|
||||||
Three Months Ended March 31, 2019
|
|||||||||||
Americas
|
$
|
132,327
|
|
|
$
|
140,395
|
|
|
$
|
272,722
|
|
Europe
|
203,861
|
|
|
40,034
|
|
|
243,895
|
|
|||
Other(1)
|
64,220
|
|
|
6,279
|
|
|
70,499
|
|
|||
Total
|
$
|
400,408
|
|
|
$
|
186,708
|
|
|
$
|
587,116
|
|
(1)
|
Other includes the Company's businesses in China and Latin America.
|
|
Three Months Ended March 31,
|
||||||
(In thousands)
|
2020
|
|
2019
|
||||
Accounts receivable, net of allowance, from contracts with customers:
|
|
|
|
||||
Beginning balance
|
$
|
581,555
|
|
|
$
|
367,918
|
|
Ending balance
|
$
|
375,509
|
|
|
$
|
418,916
|
|
|
|
|
|
||||
Deferred revenue from contracts with customers:
|
|
|
|
||||
Beginning balance
|
$
|
52,589
|
|
|
$
|
39,916
|
|
Ending balance
|
$
|
57,022
|
|
|
$
|
57,073
|
|
(In thousands)
|
March 31,
2020 |
|
December 31,
2019 |
||||
Structures
|
$
|
2,294,357
|
|
|
$
|
2,832,797
|
|
Furniture and other equipment
|
217,061
|
|
|
234,183
|
|
||
Land, buildings and improvements
|
149,384
|
|
|
149,889
|
|
||
Construction in progress
|
59,936
|
|
|
84,289
|
|
||
|
2,720,738
|
|
|
3,301,158
|
|
||
Less: Accumulated depreciation
|
1,771,960
|
|
|
2,090,004
|
|
||
Property, plant and equipment, net
|
$
|
948,778
|
|
|
$
|
1,211,154
|
|
(In thousands)
|
March 31, 2020
|
|
December 31, 2019
|
||||||||||||
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
||||||||
Indefinite-lived permits
|
$
|
843,849
|
|
|
$
|
—
|
|
|
$
|
965,863
|
|
|
$
|
—
|
|
Transit, street furniture and other outdoor
contractual rights
|
434,171
|
|
|
(366,112
|
)
|
|
535,912
|
|
|
(451,021
|
)
|
||||
Permanent easements
|
163,399
|
|
|
—
|
|
|
163,399
|
|
|
—
|
|
||||
Trademarks
|
83,569
|
|
|
(7,981
|
)
|
|
83,569
|
|
|
(5,898
|
)
|
||||
Other
|
5,179
|
|
|
(4,050
|
)
|
|
5,352
|
|
|
(4,648
|
)
|
||||
Total intangible assets
|
$
|
1,530,167
|
|
|
$
|
(378,143
|
)
|
|
$
|
1,754,095
|
|
|
$
|
(461,567
|
)
|
(In thousands)
|
Americas
|
|
Europe
|
|
Other
|
|
Consolidated
|
||||||||
December 31, 2019(1)
|
$
|
507,819
|
|
|
$
|
185,641
|
|
|
$
|
10,698
|
|
|
$
|
704,158
|
|
Foreign currency
|
—
|
|
|
(5,123
|
)
|
|
(1,013
|
)
|
|
(6,136
|
)
|
||||
Balance as of March 31, 2020
|
$
|
507,819
|
|
|
$
|
180,518
|
|
|
$
|
9,685
|
|
|
$
|
698,022
|
|
(1)
|
The balance at December 31, 2019 is net of cumulative impairments of $2.6 billion, $191.4 million and $80.7 million for Americas, Europe and Other, respectively.
|
(In thousands)
|
March 31,
2020 |
|
December 31,
2019 |
||||
Term Loan Facility(1)
|
$
|
1,990,000
|
|
|
$
|
1,995,000
|
|
Revolving Credit Facility(2)
|
150,000
|
|
|
—
|
|
||
Receivables-Based Credit Facility
|
—
|
|
|
—
|
|
||
Clear Channel Outdoor Holdings 5.125% Senior Secured Notes Due 2027
|
1,250,000
|
|
|
1,250,000
|
|
||
Clear Channel Worldwide Holdings 9.25% Senior Notes Due 2024(3)
|
1,901,525
|
|
|
1,901,525
|
|
||
Other debt
|
4,091
|
|
|
4,161
|
|
||
Original issue discount
|
(9,250
|
)
|
|
(9,561
|
)
|
||
Long-term debt fees
|
(55,436
|
)
|
|
(57,107
|
)
|
||
Total debt
|
$
|
5,230,930
|
|
|
$
|
5,084,018
|
|
Less: Current portion
|
20,303
|
|
|
20,294
|
|
||
Total long-term debt
|
$
|
5,210,627
|
|
|
$
|
5,063,724
|
|
(1)
|
In March 2020, the Company paid $5.0 million of the outstanding principal on the term loan facility ("Term Loan Facility") in accordance with the terms of the senior secured credit agreement ("Senior Secured Credit Agreement") governing the senior secured credit facilities (the "Senior Secured Credit Facilities," which consist of the Term Loan Facility and the revolving credit facility (the "Revolving Credit Facility")).
|
(2)
|
On March 24 2020, the Company drew $150.0 million under its Revolving Credit Facility. Because the cash remained on the balance sheet as of March 31, 2020, the draw down did not have an impact on the first lien leverage ratio as of March 31, 2020, which is calculated on a net basis in accordance with the Senior Secured Credit Agreement. The Revolving Credit Facility matures on August 23, 2024.
|
(3)
|
On February 28, 2020, the Company and the guarantors under the Indenture (the "CCWH Senior Notes Indenture") governing the 9.25% Senior Notes due 2024 (the "CCWH Senior Notes") filed a registration statement with the SEC to register the offer to exchange the CCWH Senior Notes and the guarantees thereof for a like principal amount of CCWH Senior Notes and guarantees thereof that have been registered under the Securities Act, in accordance with the deadlines set forth in the Registration Rights Agreement. The registration statement, as amended on April 6, 2020, became effective on April 7, 2020.
|
(In thousands)
|
Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
Current tax benefit (expense)
|
$
|
1,964
|
|
|
$
|
(71,720
|
)
|
Deferred tax benefit (expense)
|
(17,743
|
)
|
|
13,957
|
|
||
Income tax expense
|
$
|
(15,779
|
)
|
|
$
|
(57,763
|
)
|
(In thousands, except per share data)
|
Three Months Ended
March 31, |
||||||
|
2020
|
|
2019
|
||||
Numerator:
|
|
|
|
||||
Net loss attributable to the Company – common shares
|
$
|
(277,491
|
)
|
|
$
|
(164,167
|
)
|
Denominator:
|
|
|
|
|
|
||
Weighted average common shares outstanding – basic
|
463,465
|
|
|
362,039
|
|
||
Weighted average common shares outstanding – diluted
|
463,465
|
|
|
362,039
|
|
||
Net loss attributable to the Company per share of common stock:
|
|
|
|
|
|
||
Basic
|
$
|
(0.60
|
)
|
|
$
|
(0.45
|
)
|
Diluted
|
$
|
(0.60
|
)
|
|
$
|
(0.45
|
)
|
(In thousands)
|
March 31,
2020 |
|
December 31,
2019 |
||||
Cash and cash equivalents in the Balance Sheets
|
$
|
371,769
|
|
|
$
|
398,858
|
|
Cash and cash equivalents included in Assets held for sale
|
30,869
|
|
|
—
|
|
||
Restricted cash included in:
|
|
|
|
||||
Other current assets
|
3,981
|
|
|
4,116
|
|
||
Assets held for sale
|
1,106
|
|
|
—
|
|
||
Other assets
|
10,694
|
|
|
14,101
|
|
||
Total cash, cash equivalents and restricted cash in the Statement of Cash Flows
|
$
|
418,419
|
|
|
$
|
417,075
|
|
(In thousands)
|
Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
Revenue
|
|
|
|
||||
Americas
|
$
|
295,787
|
|
|
$
|
272,722
|
|
Europe
|
211,690
|
|
|
243,895
|
|
||
Other
|
43,332
|
|
|
70,499
|
|
||
Total
|
$
|
550,809
|
|
|
$
|
587,116
|
|
|
|
|
|
||||
Capital Expenditures
|
|
|
|
||||
Americas
|
$
|
15,817
|
|
|
$
|
11,408
|
|
Europe
|
10,095
|
|
|
11,934
|
|
||
Other
|
6,342
|
|
|
2,885
|
|
||
Corporate
|
3,640
|
|
|
1,946
|
|
||
Total
|
$
|
35,894
|
|
|
$
|
28,173
|
|
|
|
|
|
||||
Segment Adjusted EBITDA
|
|
|
|
||||
Americas
|
$
|
107,958
|
|
|
$
|
91,129
|
|
Europe
|
(14,111
|
)
|
|
16,481
|
|
||
Other
|
(15,187
|
)
|
|
11,220
|
|
||
Total
|
$
|
78,660
|
|
|
$
|
118,830
|
|
|
|
|
|
||||
Reconciliation of Segment Adjusted EBITDA to Consolidated Net Loss Before Income Taxes
|
|
|
|
||||
Segment Adjusted EBITDA
|
$
|
78,660
|
|
|
$
|
118,830
|
|
Less reconciling items:
|
|
|
|
||||
Corporate expenses(1)
|
36,338
|
|
|
28,614
|
|
||
Depreciation and amortization
|
75,753
|
|
|
75,076
|
|
||
Impairment charges
|
123,137
|
|
|
—
|
|
||
Restructuring and other costs
|
1,824
|
|
|
2,507
|
|
||
Other operating expense, net
|
6,021
|
|
|
3,522
|
|
||
Interest expense, net
|
90,142
|
|
|
114,863
|
|
||
Other charges(2)
|
18,889
|
|
|
6,039
|
|
||
Consolidated net loss before income taxes
|
$
|
(273,444
|
)
|
|
$
|
(111,791
|
)
|
(1)
|
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 are recorded in corporate expenses.
|
(2)
|
Other charges includes loss on extinguishment of debt and other expense, net.
|
(in thousands)
|
March 31,
2020 |
||
Assets classified as held for sale:
|
|
||
Cash and cash equivalents
|
$
|
30,869
|
|
Accounts receivable, net
|
109,460
|
|
|
Property, plant and equipment, net
|
206,540
|
|
|
Intangible assets, net
|
15,363
|
|
|
Operating lease right-of-use assets
|
279,051
|
|
|
Other
|
37,661
|
|
|
Assets held for sale
|
$
|
678,944
|
|
|
|
||
Liabilities classified as held for sale:
|
|
||
Accounts payable and accrued expenses
|
$
|
73,933
|
|
Operating lease liabilities
|
309,161
|
|
|
Other
|
961
|
|
|
Liabilities held for sale
|
$
|
384,055
|
|
•
|
Overview – Discussion of the nature, key developments and trends of our business in order to provide context for the remainder of the MD&A.
|
•
|
Results of Operations – An analysis of our financial results of operations at the consolidated and segment levels.
|
•
|
Liquidity and Capital Resources – Discussion of our cash flows, anticipated cash requirements, sources and uses of capital and liquidity, debt covenants and guarantor subsidiaries.
|
•
|
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.
|
•
|
Consolidated revenue decreased $36.3 million, or 6.2%, during the three months ended March 31, 2020 compared to the same period of 2019. Excluding the $8.8 million impact from movements in foreign exchange rates, consolidated revenue decreased $27.5 million, or 4.7%. Revenue decreases in our Europe and Other businesses, driven primarily by lower revenues in China and certain European markets affected by COVID-19, were partially offset by revenue growth in our Americas business.
|
•
|
On March 24, 2020, we made a cautionary draw of $150.0 million under our Revolving Credit Facility to enhance liquidity and preserve financial flexibility.
|
•
|
On March 30, 2020, we entered into an agreement to sell our 50.91% stake in Clear Media, our indirect, non-wholly owned subsidiary based in China, to Ever Harmonic as part of a proposed voluntary conditional cash offer made by and on behalf of Ever Harmonic. On April 28, 2020, we tendered our shares representing our stake in Clear Media to Ever Harmonic for approximately $253 million, and following receipt of the tendered shares, Ever Harmonic declared its voluntary cash general offer unconditional in all respects. We expect to receive net cash proceeds of $220 million in respect of the Clear Media Disposition in May, which we intend to use to improve our liquidity position and increase financial flexibility, subject to any limitations set forth in our debt agreements.
|
(In thousands)
|
Three Months Ended
March 31, |
|
%
|
||||||
|
2020
|
|
2019
|
|
Change
|
||||
Revenue
|
$
|
550,809
|
|
|
$
|
587,116
|
|
|
(6.2)%
|
Operating expenses:
|
|
|
|
|
|
||||
Direct operating expenses (excludes depreciation and amortization)
|
350,269
|
|
|
347,827
|
|
|
0.7%
|
||
Selling, general and administrative expenses (excludes depreciation and amortization)
|
123,704
|
|
|
122,966
|
|
|
0.6%
|
||
Corporate expenses (excludes depreciation and amortization)
|
36,338
|
|
|
28,614
|
|
|
27.0%
|
||
Depreciation and amortization
|
75,753
|
|
|
75,076
|
|
|
0.9%
|
||
Impairment charges
|
123,137
|
|
|
—
|
|
|
|
||
Other operating expense, net
|
(6,021
|
)
|
|
(3,522
|
)
|
|
71.0%
|
||
Operating income (loss)
|
(164,413
|
)
|
|
9,111
|
|
|
|
||
Interest expense, net
|
90,142
|
|
|
114,863
|
|
|
|
||
Loss on extinguishment of debt
|
—
|
|
|
(5,474
|
)
|
|
|
||
Other expense, net
|
(18,889
|
)
|
|
(565
|
)
|
|
|
||
Loss before income taxes
|
(273,444
|
)
|
|
(111,791
|
)
|
|
|
||
Income tax expense
|
(15,779
|
)
|
|
(57,763
|
)
|
|
|
||
Consolidated net loss
|
(289,223
|
)
|
|
(169,554
|
)
|
|
|
||
Less amount attributable to noncontrolling interest
|
(11,732
|
)
|
|
(5,387
|
)
|
|
|
||
Net loss attributable to the Company
|
$
|
(277,491
|
)
|
|
$
|
(164,167
|
)
|
|
|
•
|
The effective rate in 2020 was 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, the Company recorded deferred tax expense and an associated deferred tax liability of $44.8 million as a result of the Clear Media Disposition.
|
•
|
The effective rate for 2019 was primarily impacted by the valuation allowance recorded against deferred tax assets resulting from current period net operating losses in U.S. federal, state and certain foreign jurisdictions due to uncertainty regarding the Company's ability to realize those assets in future periods.
|
(In thousands)
|
Three Months Ended
March 31, |
|
%
|
||||||
|
2020
|
|
2019
|
|
Change
|
||||
Revenue
|
$
|
295,787
|
|
|
$
|
272,722
|
|
|
8.5%
|
Direct operating expenses1
|
135,223
|
|
|
130,519
|
|
|
3.6%
|
||
SG&A expenses1
|
53,329
|
|
|
51,636
|
|
|
3.3%
|
||
Segment Adjusted EBITDA
|
107,958
|
|
|
91,129
|
|
|
18.5%
|
1
|
Includes restructuring and other costs that are excluded from Segment Adjusted EBITDA.
|
(In thousands)
|
Three Months Ended
March 31, |
|
%
|
||||||
|
2020
|
|
2019
|
|
Change
|
||||
Revenue
|
$
|
211,690
|
|
|
$
|
243,895
|
|
|
(13.2)%
|
Direct operating expenses1
|
173,596
|
|
|
173,907
|
|
|
(0.2)%
|
||
SG&A expenses1
|
53,131
|
|
|
55,204
|
|
|
(3.8)%
|
||
Segment Adjusted EBITDA
|
(14,111
|
)
|
|
16,481
|
|
|
(185.6)%
|
1
|
Includes restructuring and other costs that are excluded from Segment Adjusted EBITDA.
|
(In thousands)
|
Three Months Ended
March 31, |
|
%
|
||||||
|
2020
|
|
2019
|
|
Change
|
||||
Revenue
|
$
|
43,332
|
|
|
$
|
70,499
|
|
|
(38.5)%
|
Direct operating expenses1
|
41,450
|
|
|
43,401
|
|
|
(4.5)%
|
||
SG&A expenses1
|
17,244
|
|
|
16,126
|
|
|
6.9%
|
||
Segment Adjusted EBITDA
|
(15,187
|
)
|
|
11,220
|
|
|
(235.4)%
|
1
|
Includes restructuring and other costs that are excluded from Segment Adjusted EBITDA.
|
(In thousands)
|
Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
Net cash provided by (used for):
|
|
|
|
||||
Operating activities
|
$
|
(98,621
|
)
|
|
$
|
(47,680
|
)
|
Investing activities
|
$
|
(35,944
|
)
|
|
$
|
(27,576
|
)
|
Financing activities
|
$
|
144,600
|
|
|
$
|
60,340
|
|
•
|
During the three months ended March 31, 2020, net loss as adjusted for non-cash and non-operating items, most notably impairment charges, depreciation and amortization, foreign exchange transaction loss and deferred taxes, resulted in $40.2 million of net cash outflows from operating activities. Additionally, changes in working capital balances resulted in $58.5 million of net cash outflows, primarily driven by the semi-annual interest payments on the CCWH Senior Notes and the 5.125% Senior Secured Notes due 2027 (the "CCOH Senior Secured Notes"), payment of the 2019 bonus to employees, and the timing of invoice payments. This was partially offset by a decrease in accounts receivable as collections in Europe exceeded sales, driven by a combination of normal seasonality of the business and the adverse impact of COVID-19.
|
•
|
During the three months ended March 31, 2019, net loss as adjusted for non-cash and non-operating items, most notably depreciation and amortization, resulted in $95.2 million of net cash outflows from operating activities. This was partially offset by changes in working capital balances, which resulted in $47.6 million of net cash inflows, driven primarily by the timing of payments.
|
(In thousands)
|
Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
Americas(1)
|
$
|
15,817
|
|
|
$
|
11,408
|
|
Europe(2)
|
10,095
|
|
|
11,934
|
|
||
Other(3)
|
6,342
|
|
|
2,885
|
|
||
Corporate(4)
|
3,640
|
|
|
1,946
|
|
||
Total
|
$
|
35,894
|
|
|
$
|
28,173
|
|
(1)
|
Construction and sustaining activities for billboards and other out-of-home advertising displays, including digital boards
|
(2)
|
Construction and sustaining activities for our street furniture and other out-of-home advertising displays, including digital boards
|
(3)
|
Transit advertising structure additions and purchase of concession rights in China
|
(4)
|
Equipment and software purchases
|
•
|
Negotiations with landlords to align fixed site lease expenses with revenue during the economic downturn;
|
•
|
Savings from lower variable compensation expense, temporary salary reductions, reduced hours for hourly employees, hiring freezes and furloughs;
|
•
|
Reducing discretionary expenses;
|
•
|
Deferring discretionary capital expenditures; and
|
•
|
Exploring options to defer our committed capital expenditures.
|
|
Four Quarters Ended
|
||
(In millions)
|
March 31,
2020 |
||
Term Loan Facility
|
$
|
1,990.0
|
|
Revolving Credit Facility
|
150.0
|
|
|
Clear Channel Outdoor Holdings 5.125% Senior Notes Due 2027
|
1,250.0
|
|
|
Other debt
|
4.1
|
|
|
Less: Cash and cash equivalents(1)
|
(402.6
|
)
|
|
First lien debt(2)
|
$
|
2,991.5
|
|
(1)
|
Includes cash and cash equivalents of Clear Media, which are held for sale on the Consolidated Balance Sheet at March 31, 2020. Refer to Note 12 in Item 1 of Part I of this Quarterly Report on Form 10-Q for additional details.
|
(2)
|
Due to rounding, the total may not equal the sum of the line items in the table above.
|
|
Four Quarters Ended
|
||
(In millions)
|
March 31,
2020 |
||
EBITDA (as defined by the Senior Secured Credit Agreement)
|
$
|
557.2
|
|
Less adjustments to EBITDA (as defined by the Senior Secured Credit Agreement):
|
|
||
Charges, expenses or reserves in respect of any restructuring, relocation, redundancy or severance expense or one-time compensation charges
|
(14.1
|
)
|
|
Other items
|
(1.2
|
)
|
|
Less: Depreciation and amortization, Impairment charges, Share-based compensation and Interest income
|
(462.6
|
)
|
|
Operating income(1)
|
79.4
|
|
|
Plus: Depreciation and amortization, Impairment charges, Loss (gain) on disposal of operating and other assets, net and Share-based compensation
|
456.3
|
|
|
Less: Interest expense, net
|
(394.8
|
)
|
|
Plus: Current income tax benefit
|
25.5
|
|
|
Less: Other expense, net
|
(33.7
|
)
|
|
Adjustments to reconcile consolidated net loss to net cash provided by operating activities (including Provision for doubtful accounts, Amortization of deferred financing charges and note discounts, net, Foreign exchange transaction loss and Other reconciling items, net)
|
34.1
|
|
|
Change in operating assets and liabilities, net
|
(3.3
|
)
|
|
Net cash provided by operating activities(1)
|
$
|
163.6
|
|
(1)
|
Due to rounding, the total may not equal the sum of the line items in the table above.
|
(In thousands)
|
Three Months Ended March 31, 2020
|
|
Year Ended December 31, 2019
|
||||
Results of Operations Data:
|
|
|
|
||||
Revenue
|
$
|
293,728
|
|
|
$
|
1,263,657
|
|
Operating income (loss)
|
(84,314
|
)
|
|
239,307
|
|
||
Net loss attributable to the Obligor Group
|
(175,126
|
)
|
|
(292,916
|
)
|
|
As of
|
|
As of
|
||||
(In thousands)
|
March 31, 2020
|
|
December 31, 2019
|
||||
Select Asset and Liability Data:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
302,990
|
|
|
$
|
287,773
|
|
Other current assets
|
271,356
|
|
|
265,368
|
|
||
Property, plant and equipment, net
|
646,888
|
|
|
669,402
|
|
||
Notes receivable from related-party non-guarantors
|
304,333
|
|
|
306,679
|
|
||
Other assets(1)
|
2,688,571
|
|
|
2,794,351
|
|
||
Current liabilities (excluding current portion of long-term debt)
|
313,657
|
|
|
397,107
|
|
||
Long-term debt (including current portion of long-term debt)
|
5,230,902
|
|
|
5,083,988
|
|
||
Mandatorily-redeemable preferred stock
|
46,421
|
|
|
44,912
|
|
||
Notes payable to related-party non-guarantors
|
78,821
|
|
|
80,146
|
|
||
Other non-current liabilities
|
1,420,714
|
|
|
1,422,997
|
|
•
|
Industry revenue growth forecasts used for the initial four-year period, which varied by market, included an average growth of 2.4% over the next two years, factoring in the impacts related to the COVID-19 pandemic, and between 2.9% and 3.0% during the remaining two years;
|
•
|
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 climb to the industry average margin (as high as 53.3%, depending on market size) by the third year; and
|
•
|
Discount rate was assumed to be 10.0%.
|
(In thousands)
|
|
Revenue growth rate
|
|
Profit margin
|
|
Discount rate
|
||||||
Decrease in fair value of:
|
|
(100 basis point decrease)
|
|
(100 basis point decrease)
|
|
(100 basis point increase)
|
||||||
Billboard permits
|
|
$
|
(523,700
|
)
|
|
$
|
(119,100
|
)
|
|
$
|
(504,000
|
)
|
•
|
Expected cash flows underlying our business plans for the periods 2020 through 2024, which are based on detailed, multi-year forecasts performed by each of our operating segments and reflect the advertising outlook across our businesses;
|
•
|
Cash flows beyond 2024 are 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 of approximately 9.5% to 11.0% for each of our reporting units.
|
(In thousands)
|
|
Revenue growth rate
|
|
Profit margin
|
|
Discount rate
|
||||||
Decrease in fair value of reporting unit:
|
|
(100 basis point decrease)
|
|
(100 basis point decrease)
|
|
(100 basis point increase)
|
||||||
Americas
|
|
$
|
(410,000
|
)
|
|
$
|
(120,000
|
)
|
|
$
|
(400,000
|
)
|
Europe
|
|
$
|
(116,000
|
)
|
|
$
|
(135,000
|
)
|
|
$
|
(105,000
|
)
|
Latin America
|
|
$
|
(14,000
|
)
|
|
$
|
(5,000
|
)
|
|
$
|
(15,000
|
)
|
•
|
the magnitude of the impact of the COVID-19 pandemic on our operations and on general economic conditions;
|
•
|
risks associated with weak or uncertain global economic conditions and their impact on the level of expenditures on advertising;
|
•
|
our ability to service our debt obligations and to fund our operations and capital expenditures;
|
•
|
industry conditions, including competition;
|
•
|
our ability to obtain key municipal concessions for our street furniture and transit products;
|
•
|
fluctuations in operating costs;
|
•
|
technological changes and innovations;
|
•
|
shifts in population and other demographics;
|
•
|
other general economic and political conditions in the U.S. and in other countries in which we currently do business, including those resulting from recessions, political events and acts or threats of terrorism or military conflicts;
|
•
|
changes in labor conditions and management;
|
•
|
the impact of future dispositions, acquisitions and other strategic transactions;
|
•
|
legislative or regulatory requirements;
|
•
|
regulations and consumer concerns regarding privacy and data protection;
|
•
|
a breach of our information security measures;
|
•
|
restrictions on outdoor advertising of certain products;
|
•
|
fluctuations in exchange rates and currency values;
|
•
|
risks of doing business in foreign countries;
|
•
|
third-party claims of intellectual property infringement, misappropriation or other violation against us;
|
•
|
the risk that the Separation could result in significant tax liability or other unfavorable tax consequences to us and impair our ability to utilize our federal income tax net operating loss carryforwards in future years;
|
•
|
the risk that we may be more susceptible to adverse events following the Separation;
|
•
|
the risk that we may be unable to replace the services iHeartCommunications provided us in a timely manner or on comparable terms;
|
•
|
our dependence on our management team and other key individuals;
|
•
|
the risk that indemnities from iHeartMedia will not be sufficient to insure us against the full amount of certain liabilities;
|
•
|
volatility of our stock price;
|
•
|
the impact of our substantial indebtedness, including the effect of our leverage on our financial position and earnings;
|
•
|
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 and our Preferred Stock limiting our flexibility in operating our business;
|
•
|
the effect of analyst or credit ratings downgrades;
|
•
|
our ability to regain compliance with the continued listing criteria of the New York Stock Exchange ("NYSE") and continue to comply with other applicable listing standards within the available cure period; and
|
•
|
certain other factors set forth in our other filings with the SEC.
|
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 (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs
|
||||||
January 1 through January 31
|
—
|
|
|
|
|
|
—
|
|
|
$
|
—
|
|
|
February 1 through February 29
|
1,600
|
|
|
$
|
2.07
|
|
|
—
|
|
|
—
|
|
|
March 1 through March 31
|
—
|
|
|
|
|
|
—
|
|
|
—
|
|
||
Total
|
1,600
|
|
|
$
|
2.07
|
|
|
—
|
|
|
$
|
—
|
|
(1)
|
The shares indicated consist of shares of our common stock tendered by employees to us during the three months ended March 31, 2020 to satisfy the employees’ tax withholding obligation 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.
|
Exhibit
Number
|
|
Description
|
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.
|
*
|
Filed herewith.
|
**
|
Furnished herewith.
|
|
|
CLEAR CHANNEL OUTDOOR HOLDINGS, INC.
|
|
|
|
May 6, 2020
|
|
/s/ JASON A. DILGER
|
|
|
Jason A. Dilger
|
|
|
Chief Accounting Officer
|
1 Year Clear Channel Outdoor Chart |
1 Month Clear Channel Outdoor Chart |
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