UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 10-Q10-Q
(Mark One)
[X]
☒          QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
        FOR THE QUARTERLY PERIOD ENDED JUNE 30, 20192020
 
[  ]☐           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
001‑32663001-32663
 
CLEAR CHANNEL OUTDOOR HOLDINGS, INC.
(Exact name of registrant as specified in its charter) 
cco-20200630_g1.jpg
Delaware88-0318078
(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
San Antonio,Texas78249
(Address of principal executive offices)(Zip Code)
(210)547-8800
(Registrant's telephone number, including area code)
(210) 547-8800
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of Each ClassTrading Symbol(s)Name of Exchange on Which Registered
Common Stock, $0.01 par value per share"CCO"CCONew York Stock Exchange
Preferred Stock Purchase RightsNew 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 [X]☒ 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 [X]☒ 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 [X]☐ 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 [X]☒


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.
ClassOutstanding at July 30, 2019August 4, 2020
- - - - - - - - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - -
Common Stock, $0.01 par value per share465,981,195467,328,864




CLEAR CHANNEL OUTDOOR HOLDINGS, INC.
INDEX
TABLE OF CONTENTS
Page Number
PART I—FINANCIAL INFORMATIONPage No.
Part I -- Financial Information
Item 1.
12
Item 2.
1
Consolidated Statements of Comprehensive Loss for the three and six months ended June 30, 2019 and 2018
2
Consolidated Statements of Changes in Stockholders' Deficit for the three and six months ended June 30, 2019 and 2018
3
Consolidated Statements of Cash Flows for the six months ended June 30, 2019 and 2018
5
Condensed Notes to Consolidated Financial Statements
6
Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
3517
Item 3.
5133
Item 4.
5134
Part II -- Other Information
PART II—OTHER INFORMATION
Item 1.
5235
Item 1A.
5435
Item 2.
6336
Item 3.
6336
Item 4.
6337
Item 5.
6337
Item 6.
6437
6637

1



PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS


CONSOLIDATED BALANCE SHEETS
CLEAR CHANNEL OUTDOOR HOLDINGS, INC. AND SUBSIDIARIES
(In thousands, except share and per share data)June 30, 2019 December 31,
2018
 (Unaudited) 
CURRENT ASSETS 
  
Cash and cash equivalents$372,497
 $182,456
Accounts receivable, net of allowance of $26,412 as of June 30, 2019 and $24,224 as of December 31, 2018656,438
 706,309
Prepaid expenses66,088
 95,734
Other current assets33,709
 31,301
Total Current Assets1,128,732
 1,015,800
PROPERTY, PLANT AND EQUIPMENT   
Structures, net970,649
 1,053,016
Other property, plant and equipment, net246,058
 235,922
INTANGIBLE ASSETS AND GOODWILL   
Indefinite-lived permits971,163
 971,163
Other intangibles, net327,318
 252,862
Goodwill705,062
 706,003
OTHER ASSETS   
Operating lease right-of-use assets1,979,807
 —
Due from iHeartCommunications, net of allowance of $855,648 as of December 31, 2018—
 154,758
Other assets99,168
 132,504
Total Assets$6,427,957
 $4,522,028
CURRENT LIABILITIES   
Accounts payable$109,645
 $113,714
Accrued expenses462,242
 528,482
Current operating lease liabilities394,082
 —
Deferred revenue95,983
 85,052
Accrued interest56,994
 2,341
Current portion of long-term debt260
 227
Total Current Liabilities1,119,206
 729,816
NON-CURRENT LIABILITIES   
Long-term debt5,296,096
 5,277,108
Mandatorily redeemable preferred stock44,884
 —
Non-current operating lease liabilities1,620,190
 —
Deferred income taxes388,124
 335,015
Due to iHeartCommunications—
 21,591
Other long-term liabilities174,382
 260,150
Total Liabilities8,642,882
 6,623,680
    
Commitments and Contingent liabilities (Note 6)

 

    
STOCKHOLDERS’ DEFICIT   
Noncontrolling interest145,563
 160,362
Class A common stock, par value $0.01 per share, 750,000,000 shares authorized and 51,559,633 shares issued as of December 31, 2018—
 516
Class B common stock, par value $0.01 per share, 600,000,000 shares authorized and 315,000,000 shares issued and outstanding as of December 31, 2018—
 3,150
Common stock, par value $0.01 per share, 2,350,000,000 shares authorized and 366,415,951 shares issued as of June 30, 20193,664
 —
Additional paid-in capital3,139,424
 3,086,307
Accumulated deficit(5,161,413) (5,000,920)
Accumulated other comprehensive loss(339,739) (344,489)
Cost of shares (495,922 at June 30, 2019 and 1,108,538 as of December 31, 2018) held in treasury(2,424) (6,578)
Total Stockholders’ Deficit(2,214,925) (2,101,652)
Total Liabilities and Stockholders’ Deficit$6,427,957
 $4,522,028
See Notes to Consolidated Financial Statements

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Page Number
Financial Statements:
Consolidated Balance Sheets
3
Consolidated Statements of Comprehensive Loss
4
Consolidated Statements of Changes in Stockholders' Deficit
5
Consolidated Statements of Cash Flows
7
Condensed Notes to Consolidated Financial Statements:
Note 1. Basis of Presentation
8
Note 2. Segment Data
9
Note 3. Revenue
10
Note 4. Long-Term Debt
12
Note 5. Commitments and Contingencies
13
Note 6. Income Taxes
14
Note 7. Property, Plant and Equipment
14
Note 8. Intangible Assets and Goodwill
15
Note 9. Related Party Transactions
15
Note 10. Net Loss Per Share
16
Note 11. Other Information
16
Note 12. Disposition
16
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
2
Table of Contents
CLEAR CHANNEL OUTDOOR HOLDINGS, INC. AND SUBSIDIARIES
(UNAUDITED)CONSOLIDATED BALANCE SHEETS
(In thousands, except per share data)Three Months Ended Six Months Ended
 June 30, June 30,
 2019 2018 2019 2018
Revenue$698,015
 $711,980
 $1,285,131
 $1,310,378
Operating expenses:
 
 
 
Direct operating expenses (excludes depreciation and amortization)363,029
 372,936
 710,856
 734,225
Selling, general and administrative expenses (excludes depreciation and amortization)134,721
 125,289
 257,687
 252,697
Corporate expenses (excludes depreciation and amortization)38,907
 37,928
 67,521
 73,363
Depreciation and amortization80,174
 82,767
 155,250
 166,827
Other operating income (expense), net1,270
 929
 (2,252) 875
Operating income82,454
 93,989
 91,565
 84,141
Interest expense, net107,971
 96,777
 222,834
 194,041
Loss on extinguishment of debt—
 —
 (5,474) —
Loss on Due from iHeartCommunications(5,778) —
 (5,778) —
Other expense, net(9,203) (35,402) (9,768) (15,761)
Loss before income taxes(40,498) (38,190) (152,289) (125,661)
Income tax benefit (expense)29,093
 (4,753) (28,670) (50,120)
Consolidated net loss(11,405) (42,943) (180,959) (175,781)
Less amount attributable to noncontrolling interest(466) 7,440
 (5,853) 3,024
Net loss attributable to the Company$(10,939) $(50,383) $(175,106) $(178,805)
Other comprehensive income (loss), net of tax:       
Foreign currency translation adjustments172
 (18,620) 2,721
 (11,838)
Other adjustments to comprehensive income (loss)2,592
 —
 2,592
 —
Other comprehensive income (loss)2,764
 (18,620) 5,313
 (11,838)
Comprehensive loss(8,175) (69,003) (169,793) (190,643)
Less amount attributable to noncontrolling interest(3,021) (7,919) 563
 (2,683)
Comprehensive loss attributable to the Company$(5,154) $(61,084) $(170,356) $(187,960)
        
Net loss attributable to the Company per common share: 
  
    
Basic$(0.03) $(0.14) $(0.48) $(0.49)
Weighted average common shares outstanding – Basic362,409
 361,708
 362,225
 361,612
Diluted$(0.03) $(0.14) $(0.48) $(0.49)
Weighted average common shares outstanding – Diluted362,409
 361,708
 362,225
 361,612
        
Dividends declared per share$—
 $—
 $—
 $0.08
(In thousands, except share and per share data)June 30,
2020		December 31,
2019
 (Unaudited)
CURRENT ASSETS  
Cash and cash equivalents$662,088  $398,858  
Accounts receivable393,958  733,471  
Less: Allowance for credit losses(24,680) (23,786) 
Accounts receivable, net369,278  709,685  
Prepaid expenses57,535  60,593  
Other current assets29,788  32,755  
Total Current Assets1,118,689  1,201,891  
PROPERTY, PLANT AND EQUIPMENT 
Structures, net712,723  953,545  
Other property, plant and equipment, net208,464  257,609  
INTANGIBLE ASSETS AND GOODWILL  
Indefinite-lived permits843,846  965,863  
Other intangible assets, net302,877  326,665  
Goodwill702,457  704,158  
OTHER ASSETS
Operating lease right-of-use assets1,601,221  1,885,482  
Other assets73,562  98,075  
Total Assets$5,563,839  $6,393,288  
CURRENT LIABILITIES  
Accounts payable$112,498  $94,588  
Accrued expenses363,144  503,939  
Current operating lease liabilities329,683  387,882  
Deferred revenue84,383  84,035  
Accrued interest106,926  89,786  
Current portion of long-term debt20,665  20,294  
Total Current Liabilities1,017,299  1,180,524  
NON-CURRENT LIABILITIES
Long-term debt5,257,138  5,063,724  
Mandatorily-redeemable preferred stock—  44,912  
Non-current operating lease liabilities1,304,490  1,559,743  
Deferred tax liability410,255  416,066  
Other long-term liabilities182,512  183,025  
Total Liabilities8,171,694  8,447,994  
Commitments and Contingencies (Note 5)
STOCKHOLDERS’ DEFICIT
Noncontrolling interest11,424  152,814  
Common stock, par value $0.01 per share: 2,350,000,000 shares authorized; 468,367,036 shares issued as of June 30, 2020; 466,744,939 shares issued as of December 31, 20194,684  4,667  
Additional paid-in capital3,496,641  3,489,593  
Accumulated deficit(5,771,481) (5,349,611) 
Accumulated other comprehensive loss(346,400) (349,552) 
Treasury stock (1,082,635 shares held as of June 30, 2020; 504,650 shares held as of December 31, 2019)(2,723) (2,617) 
     Total Stockholders' Deficit(2,607,855) (2,054,706) 
     Total Liabilities and Stockholders' Deficit$5,563,839  $6,393,288  
 
See Notes to Consolidated Financial Statements

3

Table of Contents
CLEAR CHANNEL OUTDOOR HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(UNAUDITED)
(In thousands, except per share data)Three Months EndedSix Months Ended
 June 30,June 30,
 2020201920202019
Revenue$314,906  $698,015  $865,715  $1,285,131  
Operating expenses:
Direct operating expenses (excludes depreciation and amortization)254,553  363,029  604,822  710,856  
Selling, general and administrative expenses (excludes depreciation and amortization)99,688  134,721  223,392  257,687  
Corporate expenses (excludes depreciation and amortization)32,665  38,907  69,003  67,521  
Depreciation and amortization66,192  80,174  141,945  155,250  
Impairment charges—  —  123,137  —  
Other operating income (expense), net69,600  1,270  63,579  (2,252) 
Operating income (loss)(68,592) 82,454  (233,005) 91,565  
Interest expense, net88,742  107,971  178,884  222,834  
Loss on Due from iHeartCommunications—  (5,778) —  (5,778) 
Loss on extinguishment of debt—  —  —  (5,474) 
Other expense, net(4,490) (9,203) (23,379) (9,768) 
Loss before income taxes(161,824) (40,498) (435,268) (152,289) 
Income tax benefit (expense)19,221  29,093  3,442  (28,670) 
Consolidated net loss(142,603) (11,405) (431,826) (180,959) 
Less amount attributable to noncontrolling interest(5,405) (466) (17,137) (5,853) 
Net loss attributable to the Company$(137,198) $(10,939) $(414,689) $(175,106) 
Other comprehensive income (loss): 
Foreign currency translation adjustments$10,442  $172  $(5,979) $2,721  
Other adjustments to comprehensive income, net of tax(19) 2,592  (19) 2,592  
Other comprehensive income (loss)10,423  2,764  (5,998) 5,313  
Comprehensive loss(126,775) (8,175) (420,687) (169,793) 
Less amount attributable to noncontrolling interest350  (3,021) (1,901) 563  
Comprehensive loss attributable to the Company$(127,125) $(5,154) $(418,786) $(170,356) 
Net loss attributable to the Company per share of common stock$(0.30) $(0.03) $(0.89) $(0.48) 
See Notes to Consolidated Financial Statements
4
Table of Contents
CLEAR CHANNEL OUTDOOR HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT
CLEAR CHANNEL OUTDOOR HOLDINGS, INC. AND SUBSIDIARIES
(UNAUDITED)
(In thousands, except share data)
Three Months Ended June 30, 2020
Common Shares IssuedNon-controlling
Interest		Controlling InterestTotal
Common
Stock		Additional Paid-in
Capital		Accumulated
Deficit		Accumulated Other Comprehensive LossTreasury Stock
Balances at March 31, 2020466,914,142  $138,755  $4,669  $3,493,369  $(5,634,283) $(363,722) $(2,331) $(2,363,543) 
Net loss(5,405) —  —  (137,198) —  —  (142,603) 
Exercise of stock options and release of stock awards1,452,894  —  15  (6) —  —  (392) (383) 
Share-based compensation8  —  3,098  —  —  —  3,106  
Payments to noncontrolling interests(80) —  —  —  —  —  (80) 
Clear Media divestiture(122,204) —  183  —  7,249  —  (114,772) 
Other comprehensive income350  —  —  —  10,073  —  10,423  
Other—  —  (3) —  —  —  (3) 
Balances at June 30, 2020468,367,036  $11,424  $4,684  $3,496,641  $(5,771,481) $(346,400) $(2,723) $(2,607,855) 
(In thousands, except share data)
 Three Months Ended June 30, 2019
 Pre-Separation Post-Separation Non-controlling
Interest		 Controlling Interest Total
 
Class A
Common
Shares
Issued
 Class B Common Shares Issued Common Shares Issued  
Common
Stock
 
Additional Paid-in
Capital
 
Accumulated
Deficit
 Accumulated Other Comprehensive Income (Loss) Treasury Stock 
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)
Net loss      (466) —
 —
 (10,939) —
 —
 (11,405)
Exercise of stock options and other36,993
   797,340
 —
 8
 223
 —
 —
 (2,423) (2,192)
Share-based compensation      (113) —
 8,674
 —
 —
 —
 8,561
Dividends and other payments to noncontrolling interests      (5,864) —
 —
 —
 —
 —
 (5,864)
Recapitalization of equity(51,746,753) (315,000,000) 365,618,611
 —
 (11) (6,575) —
 —
 6,586
 —
Capital contributions      —
 —
 114,967
 —
 —
 —
 114,967
Distributions      —
 —
 (65,936) —
 —
 —
 (65,936)
Other      —
 —
 10
 —
 —
 —
 10
Other comprehensive income (loss)      (3,021) —
 —
 —
 5,785
 —
 2,764
Balances at
June 30, 2019		—
 —
 366,415,951
 $145,563
 $3,664
 $3,139,424
 $(5,161,413) $(339,739) $(2,424) $(2,214,925)
(In thousands, except share data)
 Six Months Ended June 30, 2019
 Pre-Separation Post-Separation 
Non-controlling
Interest
 Controlling Interest Total
 
Class A
Common
Shares
Issued
 
Class B Common Shares
Issued
 Common Shares
Issued		  
Common
Stock
 
Additional Paid-in
Capital
 
Accumulated
Deficit
 Accumulated Other Comprehensive Income (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)
Net loss      (5,853) —
 —
 (175,106) —
 —
 (180,959)
Adoption of ASC 842, Leases      —
 —
 —
 14,613
 —
 —
 14,613
Exercise of stock options and other187,120
   797,340
 —
 9
 295
 —
 —
 (2,432) (2,128)
Share-based compensation      39
 —
 10,356
 —
 —
 —
 10,395
Dividends and other payments to noncontrolling interests      (9,548) —
 —
 —
 —
 —
 (9,548)
Recapitalization of equity(51,746,753) (315,000,000) 365,618,611
 —
 (11) (6,575) —
 —
 6,586
 —
Capital contributions      —
 —
 114,967
 —
 —
 —
 114,967
Distributions      —
 —
 (65,936) —
 —
 —
 (65,936)
Other      —
 —
 10
 —
 —
 —
 10
Other comprehensive income      563
 —
 —
 —
 4,750
 —
 5,313
Balances at
June 30, 2019		—
 —
 366,415,951
 $145,563
 $3,664
 $3,139,424
 $(5,161,413) $(339,739) $(2,424) $(2,214,925)
(In thousands, except share data)
Six Months Ended June 30, 2020
Controlling InterestTotal
Common Shares IssuedNon-controlling InterestCommon
Stock		Additional Paid-in
Capital		Accumulated
Deficit		Accumulated Other Comprehensive LossTreasury Stock
Balances at December 31, 2019466,744,939  $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(17,137) —  —  (414,689) —  —  (431,826) 
Exercise of stock options and release of stock awards1,622,097  —  17  32  —  —  (106) (57) 
Share-based compensation50  —  6,833  —  —  —  6,883  
Payments to noncontrolling interests(198) —  —  —  —  —  (198) 
Clear Media divestiture(122,204) —  183  —  7,249  —  (114,772) 
Other comprehensive loss(1,901) —  —  —  (4,097) —  (5,998) 
Balances at June 30, 2020468,367,036  $11,424  $4,684  $3,496,641  $(5,771,481) $(346,400) $(2,723) $(2,607,855) 
See Notes to Consolidated Financial Statements

5
Table of Contents


CLEAR CHANNEL OUTDOOR HOLDINGS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT
(UNAUDITED)
(In thousands, except share data)
Three Months Ended June 30, 2019
Pre-SeparationPost-SeparationNon-controlling
Interest		Controlling InterestTotal
Class A
Common
Shares
Issued		Class B Common Shares
Issued		Common Shares IssuedCommon
Stock		Additional Paid-in
Capital		Accumulated
Deficit		Accumulated Other Comprehensive LossTreasury Stock
Balances at March 31, 201951,709,760  315,000,000  —  $155,027  $3,667  $3,088,061  $(5,150,474) $(345,524) $(6,587) $(2,255,830) 
Net loss(466) —  —  (10,939) —  —  (11,405) 
Exercise of stock options and release of stock awards36,993  797,340  —  8  223  —  —  (2,423) (2,192) 
Share-based compensation(113) —  8,674  —  —  —  8,561  
Payments to noncontrolling interests(5,864) —  —  —  —  —  (5,864) 
Recapitalization of equity(51,746,753) (315,000,000) 365,618,611  —  (11) (6,575) —  —  6,586  —  
Capital contributions—  —  114,967  —  —  —  114,967  
Distributions—  —  (65,936) —  —  —  (65,936) 
Other comprehensive income (loss)(3,021) —  —  —  5,785  —  2,764  
Other—  —  10  —  —  —  10  
Balances at June 30, 2019—  —  366,415,951  $145,563  $3,664  $3,139,424  $(5,161,413) $(339,739) $(2,424) $(2,214,925) 
(In thousands, except share data)
Six Months Ended June 30, 2019
Pre-SeparationPost-SeparationNon-controlling
Interest		Controlling InterestTotal
Class A
Common
Shares
Issued		Class B Common Shares
Issued		Common Shares IssuedCommon
Stock		Additional Paid-in
Capital		Accumulated
Deficit		Accumulated Other Comprehensive LossTreasury Stock
Balances at December 31, 201851,559,633  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(5,853) —  —  (175,106) —  —  (180,959) 
Exercise of stock options and release of stock awards187,120  797,340  —  9  295  —  —  (2,432) (2,128) 
Share-based compensation39  —  10,356  —  —  —  10,395  
Payments to noncontrolling interests(9,548) —  —  —  —  —  (9,548) 
Recapitalization of equity(51,746,753) (315,000,000) 365,618,611  —  (11) (6,575) —  —  6,586  —  
Capital contributions—  —  114,967  —  —  —  114,967  
Distributions—  —  (65,936) —  —  —  (65,936) 
Other comprehensive income563  —  —  —  4,750  —  5,313  
Other—  —  10  —  —  —  10  
Balances at June 30, 2019—  —  366,415,951  $145,563  $3,664  $3,139,424  $(5,161,413) $(339,739) $(2,424) $(2,214,925) 
See Notes to Consolidated Financial Statements
6
Table of Contents
CLEAR CHANNEL OUTDOOR HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(In thousands, except share data)
 Three Months Ended June 30, 2018
 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
March 31, 2018		49,971,476
 315,000,000
 $158,069
 $3,650
 $3,079,958
 $(4,911,102) $(337,113) $(5,815) $(2,012,353)
Net income (loss)    7,440
 —
 —
 (50,383) —
 —
 (42,943)
Exercise of stock options and other158,574
   —
 1
 1
 —
 —
 (687) (685)
Share-based compensation    293
 —
 1,226
 —
 —
 —
 1,519
Dividends and other payments to noncontrolling interests    (5,927) —
 —
 —
 —
 —
 (5,927)
Other    —
 —
 57
 —
 —
 —
 57
Other comprehensive loss    (7,919) —
 —
 —
 (10,701) —
 (18,620)
Balances at
June 30, 2018		50,130,050
 315,000,000
 $151,956
 $3,651
 $3,081,242
 $(4,961,485) $(347,814) $(6,502) $(2,078,952)
(In thousands, except share data)
 Six Months Ended June 30, 2018
 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 Income (Loss) Treasury Stock 
Balances at
December 31, 2017		49,955,300
 315,000,000
 $157,040
 $3,650
 $3,108,148
 $(4,781,245) $(340,094) $(5,793) $(1,858,294)
Net income (loss)    3,024
 —
 —
 (178,805) —
 —
 (175,781)
Exercise of stock options and other174,750
   —
 1
 6
 —
 —
 (709) (702)
Share-based compensation    599
 —
 3,026
 —
 —
 —
 3,625
Dividends and other payments to noncontrolling interests    (6,024) —
 —
 —
 —
 —
 (6,024)
Dividends declared and paid ($0.0824/share)    —
 —
 (29,995) —
 —
 —
 (29,995)
Other    —
 —
 57
 (1,435) 1,435
 —
 57
Other comprehensive loss    (2,683) —
 —
 —
 (9,155) —
 (11,838)
Balances at
June 30, 2018		50,130,050
 315,000,000
 $151,956
 $3,651
 $3,081,242
 $(4,961,485) $(347,814) $(6,502) $(2,078,952)
(In thousands)Six Months Ended June 30,
20202019
Cash flows from operating activities:  
Consolidated net loss$(431,826) $(180,959) 
Reconciling items:
Depreciation and amortization141,945  155,250  
Impairment charges123,137  —  
Loss (gain) on disposal of operating and other assets, net(71,100) 2,090  
Foreign exchange transaction loss22,731  3,625  
Deferred taxes(21,242) (15,143) 
Credit losses11,886  4,417  
Share-based compensation6,883  10,395  
Amortization of deferred financing charges and note discounts, net5,116  5,230  
Loss on Due from iHeartCommunications—  5,778  
Loss on extinguishment of debt—  5,474  
Other reconciling items, net(2,682) (2,787) 
Changes in operating assets and liabilities, net of effects of acquisitions and dispositions:
Decrease in accounts receivable203,235  44,823  
Increase in prepaid expenses(2,303) (29,272) 
Increase in other current assets(7,067) (5,674) 
Increase (decrease) in accounts payable30,275  (3,364) 
Decrease in accrued expenses(56,475) (25,190) 
Increase in accrued interest20,754  55,632  
Increase in deferred revenue20,502  10,539  
Changes in other operating assets and liabilities, net(18,191) 14,271  
Net cash provided by (used for) operating activities(24,422) 55,135  
Cash flows from investing activities:  
Proceeds from disposal of assets, net217,023  2,518  
Purchases of property, plant and equipment(63,171) (79,281) 
Purchases of concession rights(3,792) —  
Other investing activities, net(484) 76  
Net cash provided by (used for) investing activities149,576  (76,687) 
Cash flows from financing activities:  
Draws on credit facilities150,000  —  
Proceeds from long-term debt—  2,235,197  
Payments on long-term debt(10,145) (2,200,113) 
Debt issuance costs(1,202) (26,795) 
Proceeds from issuance of mandatorily-redeemable preferred stock—  43,798  
Net transfers from iHeartCommunications—  43,399  
Proceeds from settlement of Due from iHeartCommunications—  115,798  
Other financing activities, net(261) (2,956) 
Net cash provided by financing activities138,392  208,328  
Effect of exchange rate changes on cash, cash equivalents and restricted cash(7,271) 159  
Net increase in cash, cash equivalents and restricted cash256,275  186,935  
Cash, cash equivalents and restricted cash at beginning of period417,075  202,869  
Cash, cash equivalents and restricted cash at end of period$673,350  $389,804  
Supplemental Disclosures:  
Cash paid for interest and dividends on mandatorily-redeemable preferred stock$155,185  $161,184  
Cash paid for income taxes, net of refunds$9,982  $21,598  
See Notes to Consolidated Financial Statements



CONSOLIDATED STATEMENTS OF CASH FLOWS
CLEAR CHANNEL OUTDOOR HOLDINGS, INC. AND SUBSIDIARIES
(UNAUDITED)
7
(In thousands)Six Months Ended June 30,
 2019 2018
Cash flows from operating activities:   
Consolidated net loss$(180,959) $(175,781)
Reconciling items:   
Depreciation and amortization155,250
 166,827
Deferred taxes(15,143) 46,501
Provision for doubtful accounts4,417
 3,317
Amortization of deferred financing charges and note discounts, net5,230
 5,293
Share-based compensation10,395
 3,625
(Gain) loss on disposal of operating and other assets2,090
 (1,115)
Loss on Due from iHeartCommunications5,778
 —
Loss on extinguishment of debt5,474
 —
Foreign exchange transaction loss3,625
 14,535
Other reconciling items, net(2,787) (1,098)
Changes in operating assets and liabilities, net of effects of acquisitions and dispositions:   
Decrease in accounts receivable44,823
 7,842
Increase in prepaid expenses and other current assets(34,946) (25,223)
Decrease in accrued expenses(25,190) (30,788)
Increase (decrease) in accounts payable(3,364) 19,459
Increase in accrued interest55,632
 488
Increase in deferred revenue10,539
 42,791
Changes in other operating assets and liabilities14,271
 (10,805)
Net cash provided by operating activities$55,135
 $65,868
Cash flows from investing activities: 
  
Purchases of property, plant and equipment(79,281) (61,315)
Proceeds from disposal of assets2,518
 3,040
Change in other, net76
 12
Net cash used for investing activities$(76,687) $(58,263)
Cash flows from financing activities: 
  
Proceeds from long-term debt2,235,197
 —
Proceeds from issuance of mandatorily redeemable preferred stock43,798
 —
Payments on long-term debt(2,200,113) (316)
Net transfers from iHeartCommunications43,399
 60,751
Proceeds from settlement of Due from iHeartCommunications115,798
 —
Dividends and other payments to noncontrolling interests(127) (211)
Dividends paid(701) (30,624)
Debt issuance costs(26,795) (1,298)
Change in other, net(2,128) (702)
Net cash provided by financing activities$208,328
 $27,600
Effect of exchange rate changes on cash, cash equivalents and restricted cash159
 (4,319)
Net increase in cash, cash equivalents and restricted cash186,935
 30,886
Cash, cash equivalents and restricted cash at beginning of period202,869
 188,310
Cash, cash equivalents and restricted cash at end of period$389,804
 $219,196
SUPPLEMENTAL DISCLOSURES: 
  
Cash paid for interest$161,184
 $187,302
Cash paid for income taxes, net of refunds$21,598
 $20,144
See Notes to Consolidated Financial Statements

Table of Contents

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 for which the Company has a controlling financial interest or is the primary beneficiary. All significant 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. On May 1, 2019, the Company separated (the “Separation”) from iHeartCommunications, Inc. ("iHeartCommunications"), a subsidiary of iHeartMedia, Inc. ("iHeartMedia"), upon the effective date of iHeartMedia's fifth amended Plan of Reorganization (the “iHeartMedia Plan of Reorganization”) and iHeartMedia's emergence from bankruptcy under Chapter 11 of the United States Bankruptcy Code. In connection with the consummation of the Separation, Clear Channel Outdoor Holdings, Inc. merged with and into the Company (previously known as Clear Channel Holdings, Inc. and previously the parent company of Clear Channel Outdoor Holdings, Inc.) (the “Merger”), with the Company surviving the Merger, becoming the successor to Clear Channel Outdoor Holdings, Inc. and changing its name to Clear Channel Outdoor Holdings, Inc. Additionally, pursuant to the Settlement and Separation Agreement (the "Separation Agreement") entered into with iHeartMedia and iHeartCommunications, the Intercompany Agreements (as defined below) with iHeartCommunications were terminated. Note 7 provides additional information about the Merger and Separation.
Prior to the Separation, the historical financial statements of the Company consisted of the carve-out financial statements of the Outdoor Business (as defined below) of Clear Channel Holdings, Inc., which previously also owned a portion of the Radio business of iHeartMedia, the Company’s former indirect parent company. Upon the Separation and the transactions related thereto (the “Transactions”) on May 1, 2019, the Company’s only assets, liabilities and operations were those of the Outdoor Business.
The “Outdoor Business” refers to the assets that are primarily related to or are primarily used or held for use in connection with the business of any member of the Company and its subsidiaries. The carve-out financial statements excluded the radio businesses that had historically been reported as part of iHeartMedia’s iHM segment (the “Radio Businesses”) prior to the Separation. In addition, the carve-out financial statements excluded amounts attributable to Clear Channel Holdings, Inc., which was a holding company prior to the Separation with no independent assets or operations.
Our reportable segments are Americas outdoor advertising (“Americas”) and International outdoor advertising (“International”). The accompanying consolidated financial statements were prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (“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 20182019 Annual Report on Form 10-K, and the Current Report on Form 8-K filed on February 27, 2020.
Prior to the Company's separation from iHeartMedia, Inc. ("iHeartMedia") and iHeartCommunications, Inc. ("iHeartCommunications") on May 2, 2019.
The consolidated1, 2019 (the "Separation"), the historical financial statements include the accounts of the Company consisted of the carve-out financial statements of the outdoor businesses of Clear Channel Holdings, Inc. ("CCH"), Clear Channel Outdoor Holdings, Inc. ("CCOH") and its subsidiaries (the "Outdoor Business") and prior to the Separation, givegave effect to allocations of expenses from iHeartMedia. These allocations, which ceased atiHeartMedia to the time of Separation, were made on a specifically identifiable basis or using relative percentages of headcount or other methods management considered to be a reasonable reflectionCompany. The carve-out financial statements excluded the portion of the utilizationradio businesses previously owned by CCH, which had historically been reported as part of services provided. Also included iniHeartMedia’s iHM segment prior to the consolidated financial statements are entities forSeparation, and amounts attributable to CCH, which was a holding company prior to the Company has a controlling financial interestSeparation with no independent assets or isoperations. Upon the primary beneficiary. Investments in companies in whichSeparation and the Company owns 20% to 50%transactions related thereto, the Company’s only assets, liabilities and operations were those of the voting common stock or otherwise exercises significant influence over operating and financial policies of the company are accounted for under the equity method. All significant intercompany transactions are eliminated in the consolidation process.Outdoor Business.
Certain prior period amounts have been reclassified to conform to the 20192020 presentation.

The Company changed its presentation of segment information during the first quarter of 2020 to reflect changes in the way the business is managed and resources are allocated by the Company's chief operating decision maker ("CODM"). Effective January 1, 2020, there are 2 reportable business segments: Americas, which consists of operations primarily in the United States ("U.S."), and Europe, which consists of operations in Europe and Singapore. The Company's remaining operating segments in China and Latin America, which do not meet the quantitative thresholds to qualify as reportable segments, are disclosed as "Other." Accordingly, the Company has restated the segment disclosures for prior periods. Refer to Note 2 for additional details.

In March 2020, the World Health Organization categorized coronavirus disease 2019 ("COVID-19") as a pandemic. COVID-19 continues to spread throughout the U.S. and other countries across the world, and the duration and severity of its effects are currently unknown. The Company has taken and continues to take actions to strengthen its financial position and support the continuity of its platform and operations. These actions include 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 supplemental Financial Accounting Standards Board ("FASB") staff guidance regarding accounting for rent concessions resulting from COVID-19. During the second quarter of 2020, the Company recognized reductions of rent expense on lease and non-lease contracts due to negotiated rent abatements of $29.4 million. Negotiated deferrals of rent payments only did not result in a reduction of rent expense.
CLEAR CHANNEL OUTDOOR HOLDINGS, INC. AND SUBSIDIARIES
8
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

Table of Contents

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 asset 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; the allowance for doubtful accounts; assessment of our lease and non-lease contract expenses; and measurement of compensation cost for bonus and other compensation plans. The Company's assessment of conditions and events, considered in the aggregate, indicates it will be able to meet its obligations as they become due within one year after the date of these financial statements. There continues to be a high level of uncertainty in estimating the expected economic and operational impacts relative to COVID-19 as it is an evolving situation. The estimates and assumptions used in the second quarter 2020 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 Recently Adopted
Leases
TheAs of January 1, 2020, the Company adopted Accounting Standards Update ("ASU") No. 2016-02,2016-13, Measurement of Credit Losses on Financial Instruments, which created Accounting Standards Codification ("ASC") Topic 842, Leases, and all subsequent ASUs relatingchanged the methodology used to this Topic (collectively, "ASC Topic 842")recognize impairment of the Company’s accounts receivable. Under the ASU, financial assets are presented at the net amount expected to be collected, requiring immediate recognition of estimated credit losses expected to occur over the asset's remaining life. This is in contrast to previous GAAP, under which credit losses were not recognized until it was probable that a loss had been incurred. The Company adopted the ASU on a modified-retrospective basis through a cumulative-effect adjustment to retained earnings as of January 1, 2019.2020, resulting in a decrease to equity of $7.2 million. This new leaseadjustment includes $5.4 million related to Clear Media Limited ("Clear Media"), a former indirect, non-wholly owned subsidiary of the Company based in China that was sold on April 28, 2020. The Company performed its expected credit loss calculation separately by segment based on historical accounts receivable write-offs.
New Accounting Pronouncements Not Yet Adopted
In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes, which simplifies the accounting standard, which supersedes previous lease accounting guidance under U.S. GAAP (ASC Topic 840), results in significant changesfor income taxes by removing certain existing exceptions to the balance sheets of lessees, most significantly by requiring the recognition of a right-of-use ("ROU") assetgeneral principles in Topic 740. The new guidance is effective for annual and lease liability by lessees for those leases classified as operating leases. Lessor accountinginterim periods beginning after December 2020, and early adoption is also updated to align with certain changes in the lessee model and the revenue recognition standard (ASC Topic 606), which was adopted in 2018.
permitted. The Company appliedis currently evaluating the transition provisions of this standard at January 1, 2019 following the optional transition method provided by ASU No. 2018-11; consequently the consolidated financial statements and notes to the consolidated financial statements for periods before the date of adoption continue to be presented in accordance with ASC Topic 840. In addition, the Company elected the package of practical expedients permitted under the transition guidance within the new standard, which allowed us to not reassess whether expired or existing contracts are or contain leases and to carry forward the historical lease classification for those leases that commenced prior to the date of adoption.
Upon adoption of ASC Topic 842, prepaid and deferred rent balances, which were historically presented separately, were combined and presented net within the ROU asset. Additionally, deferred gains related to previous transactions that were historically accounted for as sale and operating leasebacks in accordance with ASC Topic 840 were recognized as a cumulative-effect adjustment to equity, resulting in an increase to equity, net of tax, of $14.6 million.
Adoptionimpact of the new standard had a material impactguidance on our consolidated balance sheets, but it did not have a material impact on our otherits consolidated financial statements. Additionally,
NOTE 2 – SEGMENT DATA
As described in Note 1, the standard requires disclosures to meet the objectiveCompany changed its presentation of enabling users of the financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases. Refer to Note 2, Revenue, and Note 3, Leases, for more information.
Intangible Assets and Goodwill
Duringsegment information during the first quarter of 2017,2020 to reflect changes in the FASB issued ASU 2017-04, Intangibles - Goodwillway the business is managed and Other (Topic 350), which eliminatesresources are allocated by the requirement to calculate the implied fair value of goodwill to measure a goodwill impairment charge. Instead, entities shall record an impairment charge based on the excess of a reporting unit's carrying amount over its fair value. The standard is mandatory for annual and interim impairment tests performed for periods beginning after December 15, 2019; however,Company's CODM. Effective January 1, 2020, the Company early adoptedhas 2 reportable segments – Americas and Europe. The Company's operating segments in China and Latin America, which do not meet the proposed guidance under ASU 2017-04 beginning on January 1, 2019 on a prospective basis. The implementation of ASU 2017-04 did not have a material impact on our consolidated financial statements and related disclosures.
During the third quarter of 2018, the FASB issued ASU 2018-15, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40), Customer's Accounting for Implementation Costs Incurredquantitative thresholds to qualify as reportable segments, are disclosed as "Other." As discussed in a Cloud Computing Arrangement that is a Service Contract. This update requires that a customer in a cloud computing arrangement that is a service contract follow the internal-use software guidance in ASC 350-402 to determine which implementation costs to capitalize as assets. The standard is effective for fiscal years beginning after December 15, 2019; however,Note 12, the Company early adoptedsold its operations in China on April 28, 2020. Accordingly, "Other" segment information presented below includes China through the proposed guidance under ASU 2018-15date of the sale. Each segment provides outdoor advertising services in its respective geographic region using various digital and traditional display types, consisting primarily of billboards, street furniture displays and transit displays.
Additionally, beginning on January 1, 2019 on a prospective basis. The implementationin 2020, Segment Adjusted EBITDA is the profitability metric reported to the Company's CODM for purposes of ASU 2018-15 didmaking 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 have a material impact on our consolidated financial statements and related disclosures.presented as this information is not used by the Company's CODM in measuring segment performance or allocating resources between segments.

9

CLEAR CHANNEL OUTDOOR HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

Table of Contents

The following tables present the Company's reportable segment results for the three and six months ended June 30, 2020 and 2019. The Company has restated the segment information for prior periods to conform to the 2020 presentation.
(In thousands)Three Months Ended June 30,Six Months Ended June 30,
 2020201920202019
Revenue
Americas$199,700  $327,142  $495,487  $599,864  
Europe107,346  290,437  319,036  534,332  
Other7,860  80,436  51,192  150,935  
Total$314,906  $698,015  $865,715  $1,285,131  
Capital Expenditures
Americas$8,405  $15,930  $31,896  $27,338  
Europe9,327  22,491  19,422  34,425  
Other2,043  6,174  8,385  9,059  
Corporate3,620  6,513  7,260  8,459  
Total$23,395  $51,108  $66,963  $79,281  
Segment Adjusted EBITDA
Americas$47,019  $136,747  $154,977  227,876  
Europe(68,819) 46,536  (82,930) 63,017  
Other(15,255) 20,141  (30,442) 31,361  
Total$(37,055) $203,424  $41,605  $322,254  
Reconciliation of Segment Adjusted EBITDA to Consolidated Net Loss Before Income Taxes
Segment Adjusted EBITDA$(37,055) $203,424  $41,605  $322,254  
Less reconciling items:
Corporate expenses(1)
32,665  38,907  69,003  67,521  
Depreciation and amortization66,192  80,174  141,945  155,250  
Impairment charges—  —  123,137  —  
Restructuring and other costs2,280  3,159  4,104  5,666  
Other operating (income) expense, net(69,600) (1,270) (63,579) 2,252  
Interest expense, net88,742  107,971  178,884  222,834  
Other charges(2)
4,490  14,981  23,379  21,020  
Consolidated net loss before income taxes$(161,824) $(40,498) $(435,268) $(152,289) 
(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 due from iHeartCommunications, loss on extinguishment of debt and other expense, net.
NOTE 23 – REVENUE
The Company generates revenue primarily from the sale of advertising space on printed and digital out-of-home advertising displays. These contracts typically cover periods of a few weeks to one year, although there are some with longer terms. Americas contracts are generally cancelable after a specified notice period, while International contracts are generally non-cancelable or require the customer to pay a fee to terminate the contract. 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. To qualify as a lease, fulfillment of the contract must be dependent upon the use of a specified advertising structure, the customer must have almost exclusive use of the advertising display throughout the contract term, and, upon adoption of the new leases standard (ASC Topic 842) on January 1, 2019, the customer must also have the right to change the advertisement that is displayed throughout the contract term.
The Company has elected a practical expedient to not separate non-lease components from associated lease components if certain criteria are met. As such, each right to control the use of an advertising display that meets the lease criteria is combined with the related installation and maintenance services provided under the contract into a single lease component. Production services, which do not meet the criteria to be combined, and each advertising display that does not meet the lease criteria (along with any related installation and maintenance services) are non-lease components. Consideration in outdoor advertising contracts is allocated between lease and non-lease components in proportion to their relative standalone selling prices, which are generally approximated by the contractual prices for each promised service. The Company accounts for revenue from leases, which are all classified as operating leases in accordance with the lease accounting guidance (ASCunder Accounting Standards Codification ("ASC") Topic 840 or ASC Topic 842, depending on the advertising campaign start date), while the Company’s842; all remaining revenue transactions are accounted for as revenue from contracts with customers (ASC Topic 606).
In accordance with the transition approach that the Company elected to adoptunder ASC Topic 842, as described in Note 1, revenue contracts with campaign start dates prior to January 1, 2019 were not reassessed to determine whether they qualify as a lease under the requirements606.
10
Table of the new leasing standard. Instead, they continue to be accounted for as revenue from contracts with customers or revenue from leases based on the requirements of the previous standard (ASC Topic 840), and the new requirements have been applied to revenue contracts with campaign start dates on or after January 1, 2019. Because the definition of a lease is more restrictive under the new standard, fewer of our new revenue contracts meet the definition of a lease for accounting purposes, resulting in an increase in the percentage of revenue that is categorized as revenue from contracts with customers as compared to the prior year.Contents


CLEAR CHANNEL OUTDOOR HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)


Disaggregation of Revenue
The following table shows by segment, revenue from contracts with customers, disaggregated by geographical region, revenue from leases and total revenue, disaggregated by geographical region, for the three and six months ended June 30, 20192020 and 2018:2019:
(In thousands)Revenue from contracts with customersRevenue from leasesTotal Revenue
Three Months Ended June 30, 2020
Americas$89,903  $109,797  $199,700  
Europe90,985  16,361  107,346  
Other(1)
7,413  447  7,860  
     Total$188,301  $126,605  $314,906  
Three Months Ended June 30, 2019
Americas$182,526  $144,616  $327,142  
Europe255,024  35,413  290,437  
Other(1)
74,479  5,957  80,436  
     Total$512,029  $185,986  $698,015  
Six Months Ended June 30, 2020
Americas$253,181  $242,306  $495,487  
Europe278,175  40,861  319,036  
Other(1)
46,689  4,503  51,192  
Total$578,045  $287,670  $865,715  
Six Months Ended June 30, 2019
Americas$314,853  $285,011  $599,864  
Europe458,885  75,447  534,332  
Other(1)
138,699  12,236  150,935  
Total$912,437  $372,694  $1,285,131  
(In thousands)Americas International Consolidated
Three Months Ended June 30, 2019
Revenue from contracts with customers:     
  United States$181,500
 $—
 $181,500
  Other Americas1,026
 17,411
 18,437
  Europe—
 252,106
 252,106
  Asia-Pacific—
 59,986
 59,986
     Total182,526
 329,503
 512,029
Revenue from leases144,616
 41,370
 185,986
Revenue, total$327,142
 $370,873
 $698,015
      
Three Months Ended June 30, 2018
Revenue from contracts with customers:
  United States$115,488
 $—
 $115,488
  Other Americas634
 13,359
 13,993
  Europe—
 226,577
 226,577
  Asia-Pacific—
 2,613
 2,613
     Total116,122
 242,549
 358,671
Revenue from leases183,800
 169,509
 353,309
Revenue, total$299,922
 $412,058
 $711,980
      
Six Months Ended June 30, 2019
Revenue from contracts with customers:     
  United States$312,931
 $—
 $312,931
  Other Americas1,922
 31,056
 32,978
  Europe—
 453,311
 453,311
  Asia-Pacific—
 113,217
 113,217
     Total314,853
 597,584
 912,437
Revenue from leases285,011
 87,683
 372,694
Revenue, total$599,864
 $685,267
 $1,285,131
      
Six Months Ended June 30, 2018
Revenue from contracts with customers:
  United States$211,635
 $—
 $211,635
  Other Americas1,284
 25,482
 26,766
  Europe—
 413,793
 413,793
  Asia-Pacific—
 5,625
 5,625
     Total212,919
 444,900
 657,819
Revenue from leases342,850
 309,709
 652,559
Revenue, total$555,769
 $754,609
 $1,310,378
The Company’s advertising structures, which may be owned or leased, are used to generate revenue,(1)Other includes the Company's businesses in China and such revenue may be classified as revenue from contracts with customers or revenue from leases depending on the terms of the contract, as previously described.


CLEAR CHANNEL OUTDOOR HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)


Latin America.
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 June 30, Six Months Ended June 30,Three Months Ended June 30,Six Months Ended June 30,
(In thousands)2019 2018 2019 2018(In thousands)2020201920202019
Accounts receivable, net of allowance, from contracts with customers:       Accounts receivable, net of allowance, from contracts with customers:
Beginning balance$418,916
 $305,030
 $367,918
 $346,323
 Beginning balance$375,509  $418,916  $581,555  $367,918  
Ending balance$509,129
 $322,084
 $509,129
 $322,084
 Ending balance$239,957  $509,129  $239,957  $509,129  
       
Deferred revenue from contracts with customers:       Deferred revenue from contracts with customers:
Beginning balance$57,073
 $45,261
 $39,916
 $28,804
 Beginning balance$57,022  $57,073  $52,589  $39,916  
Ending balance$55,164
 $45,509
 $55,164
 $45,509
 Ending balance$47,760  $55,164  $47,760  $55,164  
During the three months ended June 30, 20192020 and 2018,2019, respectively, the Company recognized $38.2$20.3 million and $30.3$38.2 million of revenue that was included in the deferred revenue from contracts with customers balance at the beginning of the quarter. During the six months ended June 30, 20192020 and 2018,2019, respectively, the Company recognized $32.3$44.5 million and $24.1$32.3 million of revenue that was included in the deferred revenue from contracts with customers balance at the beginning of the year.quarter.
As previously described, the
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The Company’s contracts with customers generally have terms of one year or less; however, as of June 30, 2019,2020, the Company expects to recognize $132.4$101.5 million of revenue in future periods for remaining performance obligations from current contracts with customers that have an original expected duration greater than one year, with the majority of this amount to be recognized over the next five years.

Revenue from Leases
As of June 30, 2019, future lease payments to be received by the Company are as follows
(In thousands)
2019$304,445
202068,770
202120,869
202210,907
20232,800
Thereafter4,756
  Total$412,547
Note that the future lease payments disclosed are limited to the non-cancelable period of the lease and, for contracts that require the customer to pay a significant fee to terminate the contract such that the customer is considered reasonably certain not to exercise this option, periods beyond the termination option. Payments scheduled for periods beyond a termination option are not included for contracts that allow cancellation by the customer without a significant fee.


CLEAR CHANNEL OUTDOOR HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)


NOTE 3 – LEASES
The Company enters into contracts to use land, buildings and office space, structures, and other equipment such as automobiles and copiers. Such arrangements are evaluated at inception to determine whether they contain a lease. The majority of the Company's leases are operating leases, including land lease contracts and contracts for the use of space on floors, walls and exterior locations on buildings, assuming all required elements of a lease contract are present. The majority of the Company's transit contracts do not meet the definition of a lease under ASC Topic 842 due to substantive substitution rights within those contracts; however, in accordance with the transition approach that the Company elected to adopt ASC Topic 842 as described in Note 1, contracts that were historically determined to be leases under ASC Topic 840, including certain international transit contracts, are included in the Company’s balance sheet as of January 1, 2019.
Operating leases are reflected on the Company's balance sheet as Operating lease right-of-use ("ROU") assets, and the related short-term and long-term liabilities are included within Current and Noncurrent operating lease liabilities, respectively. ROU assets represent the right to use an underlying asset for the lease term, and lease liabilities represent the obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at lease commencement based on the present value of lease payments over the lease term, and lease expense is recognized on a straight-line basis over the lease term. The Company's finance leases are included within Property, plant and equipment, and the related short-term and long-term liabilities are included within the Current portion of long-termBad debt and Long-term debt, respectively.
Certain of the Company's operating lease agreements include rental payments that are based on a percentage of revenue, and others include rental payments that are adjusted periodically for inflationary changes. Percentage rent contracts, in which lease expense is calculated as a percentage of advertising revenue, and payments due to changes in inflationary adjustments are included within variable rent expense, which is accounted for separately from periodic straight-line lease expense. Amounts related to insurance and property taxes in lease arrangements when billed on a pass-through basis are allocated to the lease and non-lease components of the lease based on their relative standalone selling prices. The Company is commonly assessed VAT on its international contracts, which is treated as a non-lease component.
Many of the Company's operating lease contracts permit the Company to continue operating the leased assets after the rights and obligations of the lease agreements have expired. Such contracts are not considered to be leases after they expire, and future expected payments are not included in operating lease liabilities or ROU assets. Additionally, many of the Company's leases entered into in connection with advertising structures provide options to extend the terms of the agreements. Renewal periods are generally excluded from minimum lease payments when calculating the lease liabilities as the Company does not consider exercise of such options to be reasonably certain for most leases. Therefore, unless exercise of a renewal option is considered reasonably assured, the optional terms and payments are not included within the lease liability. The Company's lease agreements do not contain material residual value guarantees or material restrictive covenants.
The implicit rate within the Company's lease agreements is generally not determinable. As such, the Company uses the incremental borrowing rate ("IBR") to determine the present value of lease payments at the commencement of the lease. The IBR, as defined in ASC Topic 842, is "the rate of interest that a lessee would have to pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment."
The following table provides the components of lease expense included within the Consolidated Statement of Comprehensive Loss for the three and six months ended June 30, 2019:
(In thousands)Three Months Ended
June 30, 2019		 Six Months Ended
June 30, 2019
Operating lease expense$131,660
 $266,756
Variable lease expense38,957
 70,522


CLEAR CHANNEL OUTDOOR HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)


The following table provides the weighted average remaining lease term and the weighted average discount rate for the Company's leases as of June 30, 2019:
June 30,
2019
Operating lease weighted average remaining lease term (in years)10.4
Operating lease weighted average discount rate7.36%
As of June 30, 2019, the Company’s future maturities of operating lease liabilities were as follows:
(In thousands)
2019$293,490
2020427,209
2021363,819
2022284,964
2023229,606
Thereafter1,377,210
  Total lease payments$2,976,298
Less: Effect of discounting962,026
  Total operating lease liability$2,014,272
The following table provides supplemental cash flow information related to leases:
(In thousands)Six Months Ended
June 30, 2019

 
Cash paid for amounts included in measurement of operating lease liabilities$289,146
Lease liabilities arising from obtaining right-of-use assets1
$2,184,176
1
Includes transition liabilities upon adoption of ASC Topic 842, as well as new leases entered into during the six months ended June 30, 2019.
NOTE 4 – PROPERTY, PLANT AND EQUIPMENT, INTANGIBLE ASSETS AND GOODWILL
Property, Plant and Equipment

The Company’s property, plant and equipment consisted of the following classes of assets as of June 30, 2019 and December 31, 2018, respectively:
(In thousands)June 30,
2019		 December 31,
2018
  
Land, buildings and improvements$148,626
 $145,403
Structures2,782,755
 2,835,411
Furniture and other equipment210,217
 202,155
Construction in progress81,848
 73,030
 3,223,446
 3,255,999
Less: accumulated depreciation2,006,739
 1,967,061
Property, plant and equipment, net$1,216,707
 $1,288,938


CLEAR CHANNEL OUTDOOR HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)


Intangible Assets
The following table presents the gross carrying amount and accumulated amortization for each major class of intangible assets as of June 30, 2019 and December 31, 2018, respectively:
(In thousands)June 30, 2019 December 31, 2018
 Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization
Indefinite-lived permits$971,163
 $—
 $971,163
 $—
Transit, street furniture and other outdoor
   contractual rights
526,837
 (446,800) 528,185
 (440,228)
Permanent easements163,341
 —
 163,317
 —
Trademarks83,569
 (1,039) 409
 (338)
Other5,499
 (4,089) 5,510
 (3,993)
Total intangible assets$1,750,409
 $(451,928) $1,668,584
 $(444,559)
As part of the Separation Agreement, the Trademark License Agreement with iHeartCommunications was canceled, and the Company received the "Clear Channel" and "Clear Channel Outdoor" trademarks, among other Clear Channel marks, as a capital contribution from iHeartCommunications upon Separation on May 1, 2019. The trademarks have a gross carrying amount of $83.2 million and a remaining useful life of ten years.

Total amortization expense related to definite-lived intangible assets forreceivables from contracts with customers and leases was $8.2 million and $2.6 million during the three months ended June 30, 2020 and 2019, respectively, and 2018 was $4.7$11.9 million and $5.2$4.4 million respectively. Total amortization expense related to definite-lived intangible assets forduring the six months ended June 30, 2020 and 2019, and 2018 was $8.8 million and $10.3 million, respectively. The increase in bad debt expense in 2020 is primarily due to COVID-19.

As acquisitions and dispositions occur in the future, amortization expense may vary.  The following table presents the Company’s estimate of amortization expense for each of the five succeeding fiscal years for definite-lived intangible assets:
(In thousands) 
2020$18,395
202118,093
202216,293
202311,893
202411,787
Goodwill
The following table presents the changes in the carrying amount of goodwill in each of the Company’s reportable segments:
(In thousands)Americas International Consolidated
Balance as of December 31, 2018$507,819
 $198,184
 $706,003
Foreign currency—
 (941) (941)
Balance as of June 30, 2019$507,819
 $197,243
 $705,062


CLEAR CHANNEL OUTDOOR HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)


NOTE 54 – LONG-TERM DEBT

Long-term debt outstanding as of June 30, 20192020 and December 31, 20182019 consisted of the following:
(In thousands)June 30,
2020		December 31,
2019
Term Loan Facility(1)
$1,985,000  $1,995,000  
Revolving Credit Facility(2)
150,000  —  
Receivables-Based Credit Facility—  —  
Clear Channel Outdoor Holdings 5.125% Senior Secured Notes Due 20271,250,000  1,250,000  
Clear Channel Worldwide Holdings 9.25% Senior Notes Due 2024(3)
1,901,525  1,901,525  
Clear Channel International, B.V. Promissory Note Due 2022(4)
54,265  —  
Other debt5,398  4,161  
Original issue discount(13,612) (9,561) 
Long-term debt fees(54,773) (57,107) 
Total debt$5,277,803  $5,084,018  
Less: Current portion20,665  20,294  
Total long-term debt$5,257,138  $5,063,724  
(In thousands)June 30,
2019		 December 31,
2018
  
Clear Channel Worldwide Holdings Senior Notes:   
6.5% Series A Senior Notes Due 2022$735,750
 $735,750
6.5% Series B Senior Notes Due 20221,989,250
 1,989,250
Clear Channel Worldwide Holdings Senior Subordinated Notes: 
  
7.625% Series A Senior Subordinated Notes Due 2020(1)
—
 275,000
7.625% Series B Senior Subordinated Notes Due 2020(1)
—
 1,925,000
9.25% Senior Subordinated Notes Due 2024(1)
2,235,000
 —
Receivables-based Credit Facility Due 2023(2)
—
 —
Revolving Credit Facility with iHeartCommunications Due 2022(3)
—
 —
Clear Channel International B.V. Senior Notes Due 2020375,000
 375,000
Other debt4,003
 3,882
Original issue discount(999) (739)
Long-term debt fees(41,648) (25,808)
Total debt$5,296,356
 $5,277,335
Less: current portion260
 227
Total long-term debt$5,296,096
 $5,277,108
(1)In March and June 2020, the Company paid $5.0 million each, for a total of $10.0 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 borrowed $150.0 million under its Revolving Credit Facility. The Revolving Credit Facility matures on August 23, 2024.
(1)On February 4, 2019, Clear Channel Worldwide Holdings, Inc., a subsidiary of the Company (“CCWH” or the "Subsidiary Issuer"), delivered a conditional notice of redemption calling all of its outstanding $275.0 million aggregate principal amount of 7.625% Series A Senior Subordinated Notes due 2020 (the “Series A CCWH Subordinated Notes”) and $1,925.0 million aggregate principal amount of 7.625% Series B Senior Subordinated Notes due 2020 (the “Series B CCWH Subordinated Notes”) for redemption on March 6, 2019. The redemption was conditioned on the closing of the offering of $2,235.0 million of new 9.25% Senior Subordinated Notes due 2024 (the “New CCWH Subordinated Notes”). At the closing of such offering on February 12, 2019, CCWH deposited with the trustee for the CCWH Subordinated Notes a portion of the proceeds from the new notes in an amount sufficient to pay and discharge the principal amount outstanding, plus accrued and unpaid interest on the CCWH Subordinated Notes to, but not including, the redemption date. CCWH irrevocably instructed the trustee to apply such funds to the full payment of the CCWH Subordinated Notes on the redemption date. Concurrently therewith, CCWH elected to satisfy and discharge the indentures governing the CCWH Subordinated Notes in accordance with their terms, and the trustee acknowledged such discharge and satisfaction. As a result of the satisfaction and discharge of the indentures, CCWH and the guarantors of the CCWH Subordinated Notes have been released from their remaining obligations under the indentures and the CCWH Subordinated Notes. On July 23, 2019, CCWH issued a conditional notice of redemption to redeem a portion of the New CCWH Subordinated Notes using the proceeds of a public offering of common stock. On July 30, 2019, the conditions to the redemption were satisfied, and the notice of redemption became irrevocable. Pursuant to the notice of redemption, as amended at the closing of the offering, approximately $333.5 million aggregate principal amount of New CCWH Subordinated Notes will be redeemed on August 22, 2019.
(2)As of June 30, 2019, the receivables-based credit facility had $80.7 million of letters of credit outstanding and a borrowing limit of $125.0 million, resulting in $44.3 million of excess availability. Certain additional restrictions, including a springing financial covenant, take effect at decreased levels of excess availability.
(3)On May 1, 2019, in accordance with the Separation Agreement, Clear Channel Outdoor, LLC and Clear Channel International, Ltd. entered into a three-year unsecured $200.0 million revolving credit facility with iHeartCommunications (the "iHeartCommunications Line of Credit"). As of June 30, 2019, no amounts were drawn under the iHeartCommunications Line of Credit. On July 30, 2019, in connection with the consummation of a public offering of common stock, we terminated the iHeartCommunications Line of Credit.
(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.
(4)On May 15, 2020, a subsidiary of the Company issued a promissory note in the principal amount of approximately $53.0 million due May 15, 2022 ("the CCIBV Note"). The note bears interest at a rate of 14.00% per annum if paid in cash or 16.00% if paid-in-kind, to be paid quarterly. The CCIBV Note was subsequently transferred to a third party in exchange for the Company's Series A Perpetual Preferred Stock (par value of $0.01 and an aggregate liquidation preference of approximately $47 million) (the "preferred stock"). As discussed in further detail below, while the CCIBV Note was retired on August 4, 2020 concurrent with the issuance of new Clear Channel International B.V. notes, the preferred stock remains outstanding and held by the subsidiary and is eliminated in consolidation.
The aggregate market value of the Company’s debt based on market prices for which quotes were available was approximately $5.6$5.0 billion and $5.2$5.4 billion as of June 30, 20192020 and December 31, 2018,2019, respectively. Under the fair value hierarchy established by ASC 820-10-35, the market value of the Company’s debt is classified as Level 1.


CLEAR CHANNEL OUTDOOR HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)


9.25% Senior Subordinated Notes Due 2024
On February 12, 2019, CCWH, an indirect, wholly-owned subsidiary of the Company, completed the sale of $2,235.0 million in aggregate principal amount of New CCWH Subordinated Notes 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 United States pursuant to Regulation S under the Securities Act.
The New CCWH Subordinated Notes were issued pursuant to an indenture, dated as of February 12, 2019 (the “New CCWH Notes Indenture”), among CCWH, the Company, Clear Channel Outdoor, Inc. (“CCOI”) and the other guarantors party thereto (collectively with the Company and CCOI, the “Guarantors”), and U.S. Bank National Association, as trustee, paying agent, registrar and transfer agent (the “Trustee”). The New CCWH Subordinated Notes mature on February 15, 2024 and bear interest at a rate of 9.25% per annum. Interest is payable to the Trustee semi-annually. In each case, interest will be payable to the holders of the New CCWH Subordinated Notes semi-annually on February 15 and August 15 of each year, beginning on August 15, 2019.
The New CCWH Subordinated Notes and the guarantees of the New CCWH Subordinated Notes are unsecured senior subordinated obligations that rank pari passu in right of payment to all senior subordinated indebtedness of Clear Channel Worldwide and the Guarantors, junior to all senior indebtedness of CCWH and the Guarantors, including CCWH's outstanding 6.5% Series A Senior Notes and Series B Senior Notes due 2022 (the “Senior Notes”), and senior to all future subordinated indebtedness of CCWH and the Guarantors that expressly provides that it is subordinated to the New CCWH Subordinated Notes. Following the satisfaction of certain conditions, including that the Senior Notes are no longer outstanding and at least a portion of such notes has been refinanced with senior secured indebtedness, the New CCWH Subordinated Notes and the guarantees of the New CCWH Subordinated Notes will cease to be subordinated obligations and thereafter will rank pari passu in right of payment with all senior indebtedness of CCWH and the Guarantors (the “step-up”). There can be no assurance that the step-up will ever occur and that the New CCWH Subordinated Notes and the guarantees will ever cease to be subordinated indebtedness of CCWH and the Guarantors.
CCWH may redeem the New CCWH Subordinated Notes at its option, in whole or part, at any time prior to February 15, 2021, at a price equal to 100% of the principal amount of the New CCWH Subordinated Notes redeemed, plus a make-whole premium, plus accrued and unpaid interest to the redemption date. CCWH may redeem the New CCWH Subordinated Notes, in whole or in part, on or after February 15, 2021, at the redemption prices set forth in the Indenture plus accrued and unpaid interest to the redemption date. At any time prior to February 15, 2021, CCWH may elect to redeem up to 40% of the aggregate principal amount of the New CCWH Subordinated Notes at a redemption price equal to 109.25% of the principal amount thereof, plus accrued and unpaid interest to the redemption date, with the net proceeds of one or more equity offerings. In addition, CCWH may redeem up to 20% of the aggregate principal amount of the New CCWH Subordinated Notes at any time prior to February 15, 2021, using the net proceeds from certain other equity offerings at 103% of the principal amount of the New CCWH Subordinated Notes. CCWH will be permitted to use these two redemption options concurrently but will not be permitted to redeem, in the aggregate, more than 40% of the principal amount of the New CCWH Subordinated Notes pursuant to these options.
The New CCWH 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) in the event that the step-up occurs and the New CCWH Subordinated Notes cease to be subordinated, incur certain liens.
Surety Bonds, Letters of Credit, Surety Bonds and Guarantees
As of June 30, 2019,2020, the Company had $68.2$20.2 million $80.7 million and $35.1 million in surety bonds,of letters of credit and bank guarantees outstanding respectively. A portion of the outstanding bank guarantees was supported by $15.7under its Revolving Credit Facility, resulting in $4.8 million of cash collateral.remaining excess availability. Additionally, the Company had $63.3 million of letters of credit outstanding under its receivables-based credit facility (the "Receivables-Based Credit Facility"), which had a borrowing base less than its borrowing limit of $125.0 million, limiting excess availability to $15.7 million. Access to availability under these credit facilities is limited by the covenants relating to incurrence of secured indebtedness in the CCWH Senior Notes Indenture. Additionally, as of June 30, 2019, iHeartCommunications2020, the Company had $112.2 million and $32.6 million of surety bonds and bank guarantees outstanding, commercial standby lettersrespectively, a portion of creditwhich was supported by $10.9 million of $1.6 million held on behalf of the Company.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.

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CLEAR CHANNEL OUTDOOR HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

Table of Contents

Amendment to the Senior Credit Facility
In June 2020, we entered into an amendment to the credit agreement to our Senior Credit Facility, thereby suspending the springing financial covenant through June 30, 2021 and delaying the scheduled financial covenant step-down until March 31, 2022. In addition, for all reporting periods through September 30, 2021, we are required to maintain minimum cash on hand and availability under our receivables-based credit facility and Revolving Credit Facility of $150 million.
New Clear Channel International B. V. Notes
On August 4, 2020, Clear Channel International B.V., our indirect wholly-owned subsidiary, issued $375.0 million aggregate principal amount of 6.625% Senior Secured Notes due 2025 (the "CCIBV Senior Secured Notes"). As anticipated with the offering, a portion of the proceeds was used to repay the CCIBV Note in full.
NOTE 65 – 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 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; misappropriation of likeness and right of publicity claims;disputes, employment and benefits related claims;claims, land use and zoning, governmental fines;fines, intellectual property claims;claims, and tax disputes.
Stockholder Litigation
On May 9, 2016, a stockholder of the Company filed a derivative lawsuit in the Court of Chancery of the State of Delaware (the “Delaware Chancery Court”), captioned GAMCO Asset Management Inc. v. iHeartMedia Inc. et al., C.A. No. 12312-VCS. The complaint named as defendants iHeartCommunications, Inc. (“iHeartCommunications”), the Company’s indirect parent company, iHeartMedia, Inc. (“iHeartMedia”), the parent company of iHeartCommunications, Bain Capital Partners, LLC and Thomas H. Lee Partners, L.P. (together, the “Former Sponsor Defendants”), iHeartMedia’s pre-bankruptcy private equity sponsors and pre-bankruptcy majority owners, and the members of the Company’s board of directors. The Company also was named as a nominal defendant. The complaint alleged that the Company had been harmed by the intercompany agreements with iHeartCommunications, the Company’s lack of autonomy over its own cash and the actions of the defendants in serving the interests of iHeartMedia, iHeartCommunications and the Former Sponsor Defendants to the detriment of the Company and its minority stockholders. The plaintiff sought, among other things, a ruling that the defendants breached their fiduciary duties to the Company and that iHeartMedia, iHeartCommunications and the Former Sponsor Defendants aided and abetted the board of directors’ breaches of fiduciary duty, rescission of payments to iHeartCommunications and its affiliates pursuant to dividends declared in connection with the CCIBV Note Offering and Outdoor Asset Sales, and an order requiring iHeartMedia, iHeartCommunications and the Former Sponsor Defendants to disgorge all profits they have received as a result of the alleged fiduciary misconduct.
On July 20, 2016, the defendants filed a motion to dismiss plaintiff's verified stockholder derivative complaint for failure to state a claim upon which relief can be granted. On November 23, 2016, the Delaware Chancery Court granted defendants’ motion to dismiss all claims brought by the plaintiff.  On December 19, 2016, the plaintiff filed a notice of appeal of the ruling. The oral hearing on the appeal was held on October 11, 2017. On October 12, 2017, the Supreme Court of Delaware affirmed the lower court's ruling, dismissing the case.
On December 29, 2017, another stockholder of the Company filed a derivative lawsuit (the "Norfolk Lawsuit") in the Delaware Chancery Court captioned Norfolk County Retirement System, v. iHeartMedia, Inc., et al., C.A. No. 2017-0930-JRS. The complaint names as defendants iHeartMedia, iHeartCommunications, the Former Sponsor Defendants, and the members of the Company's board of directors.  The Company is named as a nominal defendant. The complaint alleges that the Company has been harmed by the Company Board’s November 2017 decision to extend the maturity date of the intercompany revolving note (the “Third Amendment”) at what the complaint describes as far-below-market interest rates. The plaintiff sought, among other things, a ruling that the defendants breached their fiduciary duties to the Company, a modification of the Third Amendment to bear a commercially reasonable rate of interest, and an order requiring disgorgement of all profits, benefits and other compensation obtained by defendants as a result of the alleged breaches of fiduciary duties.
On March 7, 2018, the defendants filed a motion to dismiss plaintiff's verified derivative complaint for failure to state a claim upon which relief can be granted. On March 16, 2018, iHeartMedia filed a Notice of Suggestion of Pendency of Bankruptcy and Automatic Stay of Proceedings. On May 4, 2018, plaintiff filed its response to the motion to dismiss. On June 26, 2018, the defendants filed a reply brief in further support of their motion to dismiss. Oral argument on the motion to dismiss was held on September 20, 2018.


CLEAR CHANNEL OUTDOOR HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)


On August 27, 2018, the same stockholder of the Company that had filed a derivative lawsuit against iHeartMedia and others in 2016 (GAMCO Asset Management Inc.) filed a putative class action lawsuit (the "GAMCO II Lawsuit") in the Delaware Chancery Court, captioned GAMCO Asset Management, Inc. v. Hendrix, et al., C.A. No. 2018-0633-JRS. The complaint names as defendants the Former Sponsor Defendants and the members of the Company’s board of directors. The complaint alleges that minority shareholders in the Company during the period November 8, 2017 to March 14, 2018 were harmed by decisions of the Company's board of directors and the intercompany note committee of the board of directors relating to the intercompany note. The plaintiff sought, among other things, a ruling that the Company's board of directors, the intercompany note committee, and the Sponsor Defendants breached their fiduciary duties and that the Sponsor Defendants aided and abetted the Board’s breach of fiduciary duty; and an award of damages, together with pre- and post-judgment interests, to the putative class of minority shareholders.
On December 16, 2018, the Debtors, the Company, GAMCO Asset Management, Inc., and Norfolk County Retirement System entered into a settlement agreement (the "Settlement Agreement"), which resolves all claims, objections, and other causes of action that have been or could be asserted by or on behalf of the Company, GAMCO Asset Management, Inc., and/or Norfolk County Retirement System by and among the Debtors, the Company, GAMCO Asset Management, Inc., certain individual defendants in the GAMCO Asset Management, Inc. action and/or the Norfolk County Retirement System action, and the private equity sponsor defendants in such actions. The Settlement Agreement provides for the consensual separation of the Debtors and the Company, including approximately $149.0 million of recovery to CCOH on account of its claim against iHeartCommunications in the Chapter 11 cases, an unsecured revolving line of credit in an aggregate amount not to exceed $200 million from iHeartCommunications (the “iHeart Line of Credit”), the transfer of certain of the Debtors’ intellectual property to the Company, the waiver by the Debtors of the setoff for the value of the transferred intellectual property, mutual releases, the termination of the cash sweep under the existing Corporate Services Agreement, the termination of any agreements or licenses requiring royalty payments from the Company to the Debtors for trademarks or other intellectual property, the waiver of any post-petition amounts owed by the Company relating to such trademarks or other intellectual property, and the execution of a new transition services agreement and other separation documents. The Settlement Agreement was approved by the Bankruptcy Court and the United States District Court for the Southern District of Texas in connection with the confirmation of the iHeartMedia Chapter 11 Cases on January 22, 2019. On May 1, 2019, the Debtors' plan of reorganization went effective, and the Norfolk Lawsuit and GAMCO II Lawsuit were each subsequently dismissed with prejudice.
China Investigation
TwoNaN former employees of Clear Media, Limited, ana 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 funds, and sentenced to imprisonment. One of those former employees has appealed his conviction. 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 effect of the misappropriation of funds is reflected in these financial statements in the appropriate periods.
The Company advised both the United States Securities and Exchange CommissionSEC and the United States Department of Justice ("DOJ") of the investigation at Clear Media Limited and is cooperating to provide documents, interviews and information to the agencies. Subsequent to the announcement that the Company was considering a strategic review of its stake in response to inquiriesClear Media, in March 2020, Clear Channel Outdoor Holdings received a subpoena from the agencies. staff of the SEC and a Grand Jury subpoena from the United States 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 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 requires Clear Media, if requested by the SEC and/or DOJ, to use reasonable efforts to timely provide relevant factual information to the SEC and/or DOJ, among other obligations.
The Clear Media Limited 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. It is possible that monetary penalties and other sanctions could be assessed on the Company in connection with this matter. The nature and amount of any monetary penalty or other sanctions cannot reasonably be estimated at this time and could be qualitatively or quantitatively material to the Company.


CLEAR CHANNEL OUTDOOR HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

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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. These misstatements resulted in an understatement of other long-term liabilities of $16.9 million as of December 31, 2017. The effect of these misstatements is reflected in the historical financial statements in the appropriate periods. 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 calculation of the VAT position.
The current expectation is that the Company may have to repay to the Italian tax authority a substantial portion of the VAT previously applied as a credit in relation to the transactions under investigation, amounting to approximately $17$20.4 million, including estimated possible penalties and interest. TheAs of June 30, 2020, the Company had made a paymentpayments of approximately $6.9$8.1 million net ofand applied VAT recoverable duringof $1.7 million; the fourth quartertiming of 2018 and expects to pay the remainder during the last half of 2019 or the first quarter of 2020.remaining repayment has not been finalized. The ultimate amount to be paid may differ from the estimates, and such differences may be material.
NOTE 6 – INCOME TAXES
Income Tax Benefit (Expense)
The Company’s income tax benefit (expense) for the three and six months ended June 30, 2020 and 2019 consisted of the following components:
(In thousands)Three Months Ended June 30,Six Months Ended June 30,
 2020201920202019
Current tax benefit (expense)$(19,764) $27,907  $(17,800) $(43,813) 
Deferred tax benefit38,985  1,186  21,242  15,143  
Income tax benefit (expense)$19,221  $29,093  $3,442  $(28,670) 
The effective tax rates for the three and six months ended June 30, 2020 were 11.9% and 0.8%, respectively. 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 $57.8 million of tax expense as a result of selling its 50.91% stake in Clear Media.
The effective tax rates for the three and six months ended June 30, 2019 were 71.8% and (18.8)%, respectively. The effective rate in 2019 was primarily impacted by the valuation allowance recorded against deferred tax assets resulting from losses in U.S. and certain foreign jurisdictions due to uncertainty regarding the Company's ability to realize those assets in future periods.
On March 27, 2020, the Coronavirus Aid, Relief, and Economics Security Act (“CARES Act”) was signed into law in the U.S. to provide certain relief as a result of the COVID-19 pandemic. The CARES Act, among other things, relaxes the limitation for business interest deductions for 2019 and 2020 by allowing taxpayers to deduct interest up to the sum of 50% of adjusted taxable income (previously 30% of adjusted taxable income under the Tax Cuts and Jobs Act of 2017). Additionally, the CARES Act permits net operating loss carryovers to offset 100% of taxable income for taxable years beginning before 2021. As of June 30, 2020, the CARES Act did not have a significant impact on the Company’s effective tax rate.
NOTE 7 – PROPERTY, PLANT AND EQUIPMENT
Property, Plant and Equipment
The Company’s property, plant and equipment consisted of the following classes of assets as of June 30, 2020 and December 31, 2019:
(In thousands)June 30,
2020		December 31,
2019
Structures$2,305,539  $2,832,797  
Furniture and other equipment224,007  234,183  
Land, buildings and improvements150,061  149,889  
Construction in progress48,101  84,289  
 2,727,708  3,301,158  
Less: Accumulated depreciation1,806,521  2,090,004  
Property, plant and equipment, net$921,187  $1,211,154  
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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 June 30, 2020 and December 31, 2019:
(In thousands)June 30, 2020December 31, 2019
 Gross Carrying AmountAccumulated AmortizationGross Carrying AmountAccumulated Amortization
Indefinite-lived permits$843,846  $—  $965,863  $—  
Transit, street furniture and other outdoor
   contractual rights		440,449  (374,736) 535,912  (451,021) 
Permanent easements163,301  —  163,399  —  
Trademarks83,569  (10,064) 83,569  (5,898) 
Other1,836  (1,478) 5,352  (4,648) 
Total intangible assets$1,533,001  $(386,278) $1,754,095  $(461,567) 
During the first quarter of 2020, the Company tested its intangible assets for impairment due to the expected negative financial statement impacts from COVID-19, including a reduction in projected cash flows. This testing indicated an impairment of indefinite-lived permits in our Americas segment resulting in a charge of $123.1 million recorded in the three months ended March 31, 2020. The primary estimates and assumptions impacting the impairment were the aforementioned reductions in projected cash flows and an increased discount rate.
Goodwill
Due to the expected negative financial statement impacts from COVID-19, the Company tested its goodwill for impairment as of March 31, 2020; however, this did not result in any goodwill impairment charges.
The following table presents changes in the goodwill balance for the Company's segments during the six months ended June 30, 2020:
(In thousands)AmericasEuropeOtherConsolidated
December 31, 2019(1)
$507,819  $185,641  $10,698  $704,158  
Foreign currency—  (576) (1,125) (1,701) 
Balance as of June 30, 2020$507,819  $185,065  $9,573  $702,457  
(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.
NOTE 9 — RELATED PARTY TRANSACTIONS
Merger Agreement
On March 27, 2019, as contemplated by the Settlement Agreement and iHeartMedia’s modified fifth amended Plan of Reorganization (the “iHeart Plan of Reorganization”), which was confirmed by the United States Bankruptcy Court for the Southern District of Texas (the "Bankruptcy Court") on January 22, 2019, the Company (then known as Clear Channel Holdings, Inc.) and its subsidiary, Clear Channel Outdoor Holdings, Inc., entered into an Agreement and Plan of Merger (the “Merger Agreement”). On May 1, 2019, Clear Channel Outdoor Holdings, Inc. merged with and into the Company, with the Company surviving the Merger and changing its name to Clear Channel Outdoor Holdings, Inc.
Prior to the Merger, the old CCOH Class B Common Stock held by Clear Channel Holdings, Inc., was converted into shares of Clear Channel Outdoor Holdings, Inc.'s Class A Common Stock (the "Old CCOH Class A Common Stock"). At the effective time of the Merger, each share of Old CCOH Class A Common Stock issued and outstanding (other than shares of Old CCOH Class A Common Stock held by Clear Channel Holdings, Inc.) converted into one share of common stock of the Company (the "Common Stock”). The shares of the Old CCOH Class A Common Stock held by Clear Channel Holdings, Inc. were canceled and retired, and no shares of Common Stock were exchanged for such shares. All outstanding shares of common stock of Clear Channel Holdings, Inc., all held by iHeartCommunications immediately before the Merger, were converted into 325,726,917 shares of Common Stock and transferred to certain holders of claims in iHeart Chapter 11 Cases pursuant to the iHeartMedia Plan of Reorganization. As a result, immediately after the Merger, Clear Channel Holdings, Inc. had a single class of common stock, and the pre-Merger Old CCOH Class A common stockholders owned the same percentage of Clear Channel Holdings, Inc. that they owned of Clear Channel Outdoor Holdings, Inc. immediately before the Merger. At the effective time of the Merger, Clear Channel Holdings, Inc. changed its name to Clear Channel Outdoor Holdings, Inc.
Separation Agreement
On March 27, 2019, the Company, Clear Channel Outdoor Holdings, Inc., iHeartMedia and iHeartCommunications entered into a Settlement and Separation Agreement (the “Separation Agreement”) governing the terms of the separation of the Company as the surviving corporation under the Merger and each subsidiary of the Company after giving effect to the Transactions (the Company together with its subsidiaries, the “Outdoor Group”) from iHeartMedia and each of its subsidiaries immediately after giving effect to the Transactions (iHeartMedia together with its subsidiaries, the “iHeart Group”).
Pursuant to the Separation Agreement on May 1, 2019, (i) iHeartMedia and iHeartCommunications caused each relevant member of the iHeart Group to assign, transfer, convey and deliver to iHeartCommunications, and iHeartCommunications transfered to the Company or the relevant member of the Outdoor Group, any and all direct or indirect title and interest in the assets that are primarily related to or used primarily in connection with the Outdoor Business (after giving effect to the Transactions) (such assets, the “Outdoor Assets”), excluding certain excluded assets, and (ii) the Company and Clear Channel Outdoor Holdings, Inc. caused each relevant member of the Outdoor Group to transfer to the relevant member of the iHeart Group any and all direct or indirect title and interest in the assets of the business conducted by the iHeart Group after giving effect to the Transactions, including the radio business (the “iHeart Business” and such assets, the “iHeart Assets”).


CLEAR CHANNEL OUTDOOR HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)


At the same time as the transfer of the Outdoor Assets from the iHeart Group to the Outdoor Group, the members of the Outdoor Group assumed the liabilities associated with the Outdoor Business, subject to certain exceptions as set forth in the Separation Agreement. At the same time as the transfer of the iHeart Assets from the Outdoor Group to the iHeart Group, the members of the iHeart Group assumed the liabilities associated with the iHeart Business, subject to certain exceptions as set forth in the Separation Agreement.
In connection with the cash management arrangements with CCOH, iHeartCommunications maintained an intercompany revolving promissory note payable by iHeartCommunications to CCOH (the "Due from iHeartCommunications Note"). The Separation Agreement provided for cancellation of the Due from iHeartCommunications Note and that any agreements or licenses requiring royalty payments to the iHeart Group by the Outdoor Group for trademarks or other intellectual property terminated effective as of December 31, 2018. It also provided for (i) the repayment of the post-petition intercompany balance outstanding in favor of the Debtors as of December 31, 2018, which was equal to $21.6 million as of that date and (ii) the waiver of the set-off value of any royalties and IP license fees owed to iHeartCommunications equal to approximately $31.8 million from March 14, 2018 through December 31, 2018, such that the resulting intercompany balance on such date was $10.2 million in favor of the Company.  Pursuant to an amendment to the Separation Agreement, the Company offset the $149.0 million amount owed to us by the iHeart Group on the Effective Date by $52.1 million (which is the additional intercompany liability incurred from January 1, 2019 through March 31, 2019), resulting in a total net payment to the Company of approximately $107.0 million on May 1, 2019 (including the $10.2 million payment discussed above). iHeartCommunications paid the Company the intercompany liability incurred from April 1, 2019 through May 1, 2019 of $8.8 million after the Separation. In addition, pursuant to the Separation Agreement, the Company received (i) the trademarks listed on the schedules to the Separation Agreement and (ii) reimbursement of the reasonable expenses of legal counsel and financial advisors incurred on or prior to May 1, 2019 of the Company’s board of directors or the special committee of the Company’s board of directors, in each case, to the extent incurred in connection with the Separation.
Due from iHeartCommunications
Prior to the Separation, the Company recorded net amounts due from or to iHeartCommunications as “Due from/to iHeartCommunications” on the consolidated balance sheets, net of allowance for credit losses.  The accounts represented the revolving promissory note issued by the Company to iHeartCommunications and the revolving promissory note issued by iHeartCommunications to the Company in the face amount of $1.0 billion, or if more or less than such amount, the aggregate unpaid principal amount of all advances. 
Pursuant to an order entered by the Bankruptcy Court, as of March 14, 2018, the balance of the Due from iHeartCommunications Note was frozen, and following March 14, 2018, intercompany allocations that were reflected in adjustments to the balance of the Due from iHeartCommunications Note were instead reflected in an intercompany balance that accrued interest at a rate equal to the interest under the Due from iHeartCommunications Note.
The Company did not expect to recover all of the amounts owed under the Due from iHeartCommunications Note upon the implementation of the iHeart Plan of Reorganization (as defined below). As a result, the Company recognized a loss of $855.6 million on the Due from iHeartCommunications Note during the fourth quarter of 2017 to reflect the estimated recoverable amount of the note as of December 31, 2017, based on management's best estimate of the cash settlement amount, and the outstanding principal amount of $1,031.7 million was reduced to $154.8 million as of March 31, 2019 on the consolidated balance sheet. In addition, upon the filing of the iHeart Chapter 11 Cases on March 14, 2018, the Company ceased recording interest income on the pre-petition balance due from iHeartCommunications as the collectability of the interest was not considered probable. Pursuant to the Settlement Agreement, the Company recovered 14.44% of the outstanding principal amount, or approximately $149.0 million, in cash on the allowed claim of $1,031.7 million under the Due from iHeartCommunications Note. As of June 30, 2019, the asset recorded in "Due from iHeartCommunications" on the consolidated balance sheet is $0.0 million.


CLEAR CHANNEL OUTDOOR HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)


Other Related Party Transactions
Prior to the Separation, under the Corporate Services Agreement between iHeartCommunications and the Company, iHeartCommunications provided management services to the Company, which included, among other things: (i) treasury, payroll and other financial related services; (ii) certain executive officer services; (iii) human resources and employee benefits services; (iv) legal and related services; (v) information systems, network and related services; (vi) investment services; (vii) procurement and sourcing support services; (viii) licensing of intellectual property, copyrights, trademarks and other intangible assets and (ix) other general corporate services.Company. These services were charged to the Company based on actual direct costs incurred or allocated by iHeartCommunications based on headcount, revenue or other factors on a pro rata basis. For the one-month and four-month periods ended April 30, 2019, the Company recorded $2.8 million and $10.2 million, respectively, as a component of corporate expenses for these services.
Upon consummation of the Separation, the Corporate Services Agreement was terminated, and iHeartMedia, iHeartMedia Management Services, Inc. (“iHM Management Services”), iHeartCommunications and the Company entered into a one-year transition services agreement (the “Transition Services Agreement”). Pursuant, which has been extended to August 31, 2020. Under the Transition Services Agreement, iHM Management Services provides, or causes iHeartMedia, iHeartCommunications, iHeart Operations, Inc. (“iHeart Operations”) or any member of the iHeart Group to provide, the Company with certain administrative and support services and other assistance whichassistance. For the Company will utilize in the conduct of its business as such business was conducted prior to the Separation, for one yearperiod from May 1, 2019 (subject to certain rights of the Company to extend up to one additional year, as described below). The transition services may include, among other things, (a) treasury, payroll and other financial related services, (b) certain executive officer services, (c) human resources and employee benefits, (d) legal and related services, (e) information systems, network and related services, (f) investment services and (g) procurement and sourcing support.

The charges for the transition services under the Transition Services Agreement are generally consistent with the Corporate Services Agreement. The allocation of cost is based on various measures depending on the service provided, which measures include relative revenue, employee headcount, number of users of a service or other factors. The Company may request an extension of the term for all services or individual services for one-month periods for up to an additional 12 months, and the price for transition services provided during such extended term will be increased for any service other than those identified in the schedules to the Transition Services Agreement as an “IT Service” or any other service the use and enjoyment of which requires the use of another IT Service.

For the three months endedthrough June 30, 2019, and 2018, the Company recorded $4.6$2.8 million and $16.9 million, respectively, and $12.0 million and $34.1 million for the six months ended June 30, 2019 and 2018, respectively, under the Corporate Services Agreement through May 1, 2019 and under the Transition Services Agreement following May 1, 2019, as a component of corporate expenses for these services. The lower management services costs in 2019 primarily resulted from iHeartCommunications no longer charging the trademark license fee in 2019.

The Company may terminatefees under the Transition Services Agreement with respect to all or any individual service, in whole or in part, upon 30 days’ prior written notice, provided that any co-dependent services must be terminated concurrently.

Pursuant to the tax matters agreement, as in existence prior to the Separation (the "Old Tax Matters Agreement") between iHeartCommunications and the Company, the operations of the Company were included in a consolidated federal income tax return filed by iHeartCommunications. The Company’s provision for income taxes has historically been computed on the basis that the Company files separate consolidated federal income tax returns with its subsidiaries. Tax payments were made to iHeartCommunications on the basis of the Company’s separate taxable income. Tax benefits recognized on the Company’s employee stock option exercises were retained by the Company. In addition, if iHeartCommunications or its subsidiaries used certain of our tax attributes (including net operating losses, foreign tax credits and other credits) and such use resulted in a decrease in tax liability for iHeartCommunications or its subsidiaries, then iHeartCommunications would reimburse us for the use of such attributes based on the amount of tax benefit realized. Upon consummation of the Separation, the Tax Matters Agreement was terminated and replaced with a new tax matters agreement (the "New Tax Matters Agreement") by and among iHeartMedia, iHeartCommunications, iHeart Operations, Inc., the Company and Clear Channel Outdoor, LLC to allocate the responsibility of the iHeart Group, on the one hand, and the Outdoor Group, on the other, for the payment of taxes arising prior to and subsequent to, and/or in connection with the iHeart Plan of Reorganization. The New Tax Matters Agreement provides that any reduction of our tax attributes as a result of cancellation of indebtedness income realized in connection with the iHeart Chapter 11 Cases is not treated as a use of such tax attributes and, therefore, does not require iHeartMedia to reimburse us for such reduction.


CLEAR CHANNEL OUTDOOR HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)


The Company computes its deferred income tax provision using the liability method in accordance with the provisions of ASC Subtopic 740-10. Deferred tax assets and liabilities are determined based on differences between the financial reporting basis and tax basis of assets and liabilities and are measured using the enacted tax rates expected to apply to taxable income in the periods in which the deferred tax asset or liability is expected to be realized or settled.  Deferred tax assets are reduced by valuation allowances if the Company believes it is more likely than not some portion or all of the asset will not be realized.
Prior to the Separation, pursuant to the Employee Matters Agreement, the Company’s employees participated in iHeartCommunications’ employee benefit plans, including employee medical insurance and a 401(k) retirement benefit plan.Agreement. For the three and six months ended June 30, 2018,2020, the Company recorded $2.3$1.0 million and $4.6$2.7 million, respectively, as a component of selling, general and administrativecorporate expenses for these services. On January 1, 2019, the Company's employees began participation in the Company's separate employee benefit plans, including employee medical insurance and a 401(k) retirement benefit plan. Upon consummation of the Separation, the Employee Matters Agreement was terminated; however,fees under the Transition Services Agreement.
Additionally, in accordance with the Master Agreement with iHeartCommunications, the Company continuesallows iHeartCommunications to receive administrative assistance from iHeartCommunications.

Theuse, without charge, Americas’ displays that the Company provides advertising space on its billboards for iHeartMedia, Inc. and for radio stations owned by iHeartMedia, Inc.believes would otherwise be unsold. This arrangement will continue throughthroughout the term of the Transition Services Agreement. ForThe value of services provided under this arrangement was $4.2 million and $1.3 million during the three months ended June 30, 2020 and 2019, respectively, and 2018, the Company recorded $1.3$6.6 million and $2.9 million, respectively, and $2.3 million and $4.4$3.7 million for the six months ended June 30, 2020 and 2019, and 2018, respectively, in revenue for these advertisements. The majorityrespectively.
15
Table of these agreements are leasing transactions as they convey to iHeartMedia, Inc. the right to control the use of the Company's advertising structures for a stated period of time.Contents
NOTE 810 – INCOME TAXES

Income Tax Benefit (Expense)

The Company’s income tax benefit (expense) for the three and six months ended June 30, 2019 and 2018 consisted of the following components:
(In thousands)Three Months Ended June 30, Six Months Ended June 30,
 2019 2018 2019 2018
Current tax benefit (expense)$27,907
 $24,837
 $(43,813) $(3,619)
Deferred tax benefit (expense)1,186
 (29,590) 15,143
 (46,501)
Income tax benefit (expense)$29,093
 $(4,753) $(28,670) $(50,120)

The effective tax rates for the three and six months ended June 30, 2019 were 71.8% and (18.8)%, respectively. The effective rate was primarily impacted by the valuation allowance recorded against deferred tax assets resulting from losses in the U.S. and certain foreign jurisdictions due to uncertainty regarding the Company's ability to realize those assets in future periods. The income tax benefit recorded for the three months ended June 30, 2019 is attributed to changes in the Company's estimated annual effective tax rate, driven primarily by changes in forecasted earnings at certain international locations.

The effective tax rates for the three and six months ended June 30, 2018 were (12.4)% and (39.9)%, respectively. The effective rate was primarily impacted by the valuation allowance recorded against deferred tax assets resulting from losses in the U.S. and certain foreign jurisdictions due to uncertainty regarding the Company's ability to realize those assets in future periods.



CLEAR CHANNEL OUTDOOR HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)


As a result of the Separation from iHeartMedia, certain deferred tax attributes of the Company were reduced as a result of cancellation of indebtedness income realized in connection with the iHeart Plan of Reorganization. As discussed in Note 7, the Company was not reimbursed for the reduction of its tax attributes under the terms of the New Tax Matters Agreement. The reorganization adjustments resulted in a reduction to deferred tax assets for all U.S. federal net operating loss carryforwards and certain state net operating loss carryforwards. These adjustments were partially offset by the reduction of valuation allowances recorded by the Company as of the Separation date. The net tax impact of the reorganization adjustments, which was approximately $65.9 million, was reflected in the equity section of the balance sheet as a dividend. Additionally, the Company recognized a capital loss for tax purposes as a result of the series of transactions to effect the Separation. To the extent the capital loss is not subject to reduction as a result of cancellation of indebtedness income, it may be carried forward to offset capital gains recognized by the Company in the next five years, subject to annual limitations under Section 382 of the Internal Revenue Code. The deferred tax asset associated with the capital loss carryforward is offset by a valuation allowance due to significant uncertainty regarding the Company's ability to utilize the carryforward prior to its expiration. 
NOTE 9 – STOCKHOLDERS' EQUITY (DEFICIT)
Common Stock
At the effective time of the Merger, each share of Old CCOH Class A Common Stock issued and outstanding (other than shares of Old CCOH Class A Common Stock held by Clear Channel Holdings, Inc.) converted into one share of common stock of the Company (the "Common Stock”). The shares of the Old CCOH Class A Common Stock held by Clear Channel Holdings, Inc. were canceled and retired, and no shares of Common Stock were exchanged for such shares. All outstanding shares of common stock of Clear Channel Holdings, Inc., all held by iHeartCommunications immediately before the Merger, were converted into 325,726,917 shares of Common Stock and transferred to certain holders of claims in iHeart Chapter 11 Cases pursuant to the iHeartMedia Plan of Reorganization. As a result, immediately after the Merger, Clear Channel Holdings, Inc. had a single class of common stock, and the pre-Merger Old CCOH Class A common stockholders owned the same percentage of Clear Channel Holdings, Inc. that they owned of Clear Channel Outdoor Holdings, Inc. immediately before the Merger.
On July 30, 2019, the Company issued 100 million shares of common stock in a public offering which resulted in net proceeds of $333.5 million, net of underwriting discounts and offering expenses. The Company intends to use the net proceeds from this offering to redeem approximately $333.5 million aggregate principal amount of New CCWH Subordinated Notes on August 22, 2019.
Share-Based Compensation Expense

We have granted restricted stock, restricted stock units and options to purchase shares of our common stock to certain employees under our equity incentive plans. Share-based compensation expense, which is recorded in corporate expenses, was $8.6 million and $1.5 million for the three months ended June 30, 2019 and 2018, respectively, and $10.4 million and $3.6 million for the six months ended June 30, 2019 and 2018, respectively. The increase in share-based compensation expense relates to new equity awards granted in the second quarter of 2019, which were expensed immediately as they do not contain a service condition for vesting.
As of June 30, 2019, there was $13.2 million of unrecognized compensation cost related to unvested share-based compensation arrangements that will vest based on service conditions. This cost is expected to be recognized over a weighted average period of approximately 2.8 years. 


CLEAR CHANNEL OUTDOOR HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)


Computation of Net Loss Per Share

NET LOSS PER SHARE
The following table presents the computation of net loss per share orfor the three and six months ended June 30, 2020 and 2019:
(In thousands, except per share data)Three Months Ended
June 30,		Six Months Ended
June 30,
 2020201920202019
Numerator:    
Net loss attributable to the Company – common shares$(137,198) $(10,939) $(414,689) $(175,106) 
Denominator:    
Weighted average common shares outstanding – basic464,474  362,409  463,970  362,225  
Weighted average common shares outstanding – diluted464,474  362,409  463,970  362,225  
Net loss attributable to the Company per share of common stock:    
Basic$(0.30) $(0.03) $(0.89) $(0.48) 
Diluted$(0.30) $(0.03) $(0.89) $(0.48) 
Outstanding equity awards with respect to 12.4 million shares and 8.4 million shares for the three months ended June 30, 2020 and 2019, respectively, and 2018:12.9 million and 8.3 million for the six months ended June 30, 2020 and 2019, respectively, were not included in the computation of diluted earnings per share because to do so would have been anti-dilutive.
(In thousands, except per share data)Three Months Ended
June 30,		 Six Months Ended
June 30,
 2019 2018 2019 2018
NUMERATOR:       
Net loss attributable to the Company – common shares$(10,939) $(50,383) $(175,106) $(178,805)
        
DENOMINATOR: 
  
  
  
Weighted average common shares outstanding - basic362,409
 361,708
 362,225
 361,612
Weighted average common shares outstanding - diluted(1)
362,409
 361,708
 362,225
 361,612
        
Net loss attributable to the Company per common share: 
  
  
  
Basic$(0.03) $(0.14) $(0.48) $(0.49)
Diluted$(0.03) $(0.14) $(0.48) $(0.49)

(1)
Outstanding equity awards of 8.4 million and 6.7 million for the three months ended June 30, 2019 and 2018, respectively, and 8.3 million and 6.7 million for the six months ended June 30, 2019 and 2018, respectively, were not included in the computation of diluted earnings per share because to do so would have been anti-dilutive.
NOTE 1011 — OTHER INFORMATION
Other Comprehensive Income (Loss)
ForThere were 0 changes in deferred income tax liabilities resulting from adjustments to comprehensive loss during the three and six months ended June 30, 2019, the2020. The total increase in other comprehensive income related to the impact of pensions on deferred income tax liabilities was $0.6 million. There was no change in deferred income tax liabilities resulting from adjustments to comprehensive lossmillion for the three and six months ended June 30, 2018.2019.
Shareholder Rights Plan
On May 19, 2020, the Board of Directors adopted a shareholder rights plan to protect the interests of all Company shareholders. Pursuant to the rights plan, 1 right is issued for each share of common stock as of the close of business on May 29, 2020. The rights will generally become exercisable only if any person or group acquires 10% or more of the Company's common stock. The plan has a 360-day term, expiring on May 14, 2021.
Restricted Cash
The following table provides a reconciliation of cash, cash equivalents and restricted cash reported in the Consolidated Balance SheetSheets to the total of the amounts reported in the Consolidated Statement of Cash Flows:
(In thousands)June 30,
2020		December 31,
2019
Cash and cash equivalents in the Balance Sheets$662,088  $398,858  
Restricted cash included in:
  Other current assets647  4,116  
  Other assets10,615  14,101  
Total cash, cash equivalents and restricted cash in the Statement of Cash Flows$673,350  $417,075  
NOTE 12 – Disposition
(In thousands)June 30,
2019		 December 31,
2018
Cash and cash equivalents$372,497
 $182,456
Restricted cash included in:   
  Other current assets4,145
 4,221
  Other assets13,162
 16,192
Total cash, cash equivalents and restricted cash in the Statement of Cash Flows$389,804
 $202,869


CLEAR CHANNEL OUTDOOR HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)


Mandatorily Redeemable Preferred Stock
As previously disclosed in the Quarterly Report on Form 10-Q filed on May 6, 2020, on April 28, 2020, the Company tendered its 50.91% stake in Clear Media pursuant to a voluntary conditional cash offer made by and on behalf of Ever Harmonic Global Limited. On May 1, 2019,14, 2020, the Company issued 45,000received $253.1 million in cash proceeds from the sale of its shares of Series A Perpetual Preferred Stock, par value $0.01 per share ("Preferred Stock")in Clear Media,, with the Company having an aggregate initial liquidation preference of $45.0 million, for a cash purchase price of $45.0 million, before fees and expenses. As of June 30, 2019, the liquidation preference of the Preferred Stock was approximately $46.1 million.
The terms and conditions of the Preferred Stock and the rights of its holders are set forth in the Certificate of Designation of Series A Perpetual Preferred Stock (the “Certificate of Designation”) of theClear Media disposition is now complete. The Company filed with the office of the Secretary of State of the State of Delaware on May 1, 2019, and the Series A Investors Rights Agreement, dated as of May 1, 2019, by and among the Company, CCWH, and the purchaser listed therein (the “Investors Rights Agreement”).
Shares of the Preferred Stock rank senior and in priority of payment to our common equity interests and preferred stock junior to the Preferred Stock and other equity interests and preferred stock that does not expressly provide that such equity interest ranks senior to or pari passu with the Preferred Stock in any liquidation or winding up of the Company.
Dividendsrecognized a gain on the Preferred Stock accrue on a daily basis at the applicable dividend ratesale of Clear Media of $75.2 million, recorded within "Other operating income (expense), net" on the then-current liquidation preferenceConsolidated Statement of the Preferred Stock, as and when declared by the board of directors. Dividends will either (a) be payable in cash, if and to the extent declared by the board of directors, or (b) be added to the liquidation preference. The dividend rate will be equal to (i) the greater of (a) a published LIBOR rate or (b) two percent (2%) plus (ii) either a cash dividend margin or an accruing dividend margin, in each case based on the Company's consolidated leverage ratio, subject to certain adjustments. At any leverage ratio, the accruing dividend margin will exceed the cash dividend margin by 1.5%. Dividends, if declared, will be payable on March 31, June 30, September 30 and December 31 of each year (or on the next business day if such date is not a business day). No dividend may be declared unless paid immediately in cash (it being understood that no dividends may be declared and paid in securities or otherwise "in kind").
The Company may redeem any of the Preferred Stock, at its option, at any time on or after the third anniversary of the Issue Date, in each case, in cash at a redemption price equal to the Liquidation Preference per share. Upon consummation of certain equity offerings, the Company may, at its option, redeem all or a part of the Preferred Stock for the Liquidation Preference plus a make-whole premium. In addition, upon the occurrence of, among other things (i) any change of control, (ii) a liquidation, dissolution, or winding up or (iii) certain insolvency events, each holder may require the Company to redeem for cash all of the then outstanding shares of Preferred Stock. In addition, the holders of Preferred Shares may require a designated subsidiary of the Company to purchase the shares after the fifth anniversary of issuance.
On the tenth anniversary of the issue date of the Preferred Stock, the shares of Preferred Stock will be subject to mandatory redemption for an amount equal to the liquidation preference.
The certificate of designations for the Preferred Stock limit the Company's ability to incur additional debt or any other security ranking pari passu with or senior to the Preferred Stock, other than in (a) an amount not to exceed $300 million on a cumulative basis or (b) subject to an incurrence-based leverage test, subject to other customary carve-outs.
Subject to certain exceptions, the holders of shares of Preferred Stock have no voting power, and no right to vote on any matter at any time, either as a separate series or class or together with any other series or class of shares of capital stock, and are not be entitled to call a meeting of such holders for any purpose, nor are they entitled to participate in any meeting of the holders of the Company’s Common Stock. However, if dividends on the Preferred Stock have not been paid, in cash, for twelve consecutive quarters, the holders of the Preferred Stock shall have the right to designate one member to the Company’s board of directors.
Should the Company default or fail to pay dividends, in cash, on the Preferred Stock for twelve consecutive quarters, the holders of the Preferred Stock will have the right to appoint one director to the Company’s board of directors.



CLEAR CHANNEL OUTDOOR HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)


NOTE 11 – SEGMENT DATA
The Company has two reportable segments, which it believes best reflect how the Company is currently managed – Americas and International.  The Americas segment consists of operations primarily in the United States, and the International segment primarily includes operations in Europe, Asia and Latin America. The Americas and International display inventory consists primarily of billboards, street furniture displays and transit displays. Corporate includes 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.

The following table presents the Company's reportable segment resultsComprehensive Loss, for the three and six months ended June 30, 2019 and 2018:2020.

16
(In thousands)Americas International Corporate and other reconciling items Consolidated
Three Months Ended June 30, 2019       
Revenue$327,142
 $370,873
 $—
 $698,015
Direct operating expenses135,974
 227,055
 —
 363,029
Selling, general and administrative expenses55,482
 79,239
 —
 134,721
Corporate expenses—
 —
 38,907
 38,907
Depreciation and amortization44,558
 33,812
 1,804
 80,174
Other operating income, net—
 —
 1,270
 1,270
Operating income (loss)$91,128
 $30,767
 $(39,441) $82,454
        
Segment assets$3,664,135
 $2,446,789
 $317,033
 $6,427,957
Capital expenditures$15,930
 $28,665
 $6,513
 $51,108
Share-based compensation expense$—
 $—
 $8,561
 $8,561
        
Three Months Ended June 30, 2018       
Revenue$299,922
 $412,058
 $—
 $711,980
Direct operating expenses130,313
 242,623
 —
 372,936
Selling, general and administrative expenses47,824
 77,465
 —
 125,289
Corporate expenses—
 —
 37,928
 37,928
Depreciation and amortization43,123
 38,683
 961
 82,767
Other operating income, net—
 —
 929
 929
Operating income (loss)$78,662
 $53,287
 $(37,960) $93,989
        
Segment assets$2,798,237
 $1,527,312
 $195,503
 $4,521,052
Capital expenditures$11,481
 $20,294
 $868
 $32,643
Share-based compensation expense$—
 $—
 $1,519
 $1,519




CLEAR CHANNEL OUTDOOR HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)


(In thousands)Americas International Corporate and other reconciling items Consolidated
Six Months Ended June 30, 2019       
Revenue$599,864
 $685,267
 $—
 $1,285,131
Direct operating expenses266,493
 444,363
 —
 710,856
Selling, general and administrative expenses107,118
 150,569
 —
 257,687
Corporate expenses—
 —
 67,521
 67,521
Depreciation and amortization84,054
 68,393
 2,803
 155,250
Other operating loss, net—
 —
 (2,252) (2,252)
Operating income (loss)$142,199
 $21,942
 $(72,576) $91,565
        
Segment assets$3,664,135
 $2,446,789
 $317,033
 $6,427,957
Capital expenditures$27,338
 $43,484
 $8,459
 $79,281
Share-based compensation expense$—
 $—
 $10,395
 $10,395
        
Six Months Ended June 30, 2018       
Revenue$555,769
 $754,609
 $—
 $1,310,378
Direct operating expenses255,186
 479,039
 —
 734,225
Selling, general and administrative expenses96,774
 155,923
 —
 252,697
Corporate expenses—
 —
 73,363
 73,363
Depreciation and amortization87,627
 77,248
 1,952
 166,827
Other operating income, net—
 —
 875
 875
Operating income (loss)$116,182
 $42,399
 $(74,440) $84,141
        
Segment assets$2,798,237
 $1,527,312
 $195,503
 $4,521,052
Capital expenditures$24,388
 $35,566
 $1,361
 $61,315
Share-based compensation expense$—
 $—
 $3,625
 $3,625




CLEAR CHANNEL OUTDOOR HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)


NOTE 12 – GUARANTOR SUBSIDIARIES

The Company and certainTable of the Company’s direct and indirect wholly-owned domestic subsidiaries (the “Guarantor Subsidiaries”) fully and unconditionally guarantee on a joint and several basis certain of the outstanding indebtedness of CCWH.  The following consolidating schedules present financial information on a combined basis in conformity with the SEC’s Regulation S-X Rule 3-10(d):Contents
(In thousands)June 30, 2019
 Parent Subsidiary Guarantor Non-Guarantor    
 Company Issuer Subsidiaries Subsidiaries Eliminations Consolidated
Cash and cash equivalents$206,325
 $—
 $20,058
 $146,114
 $—
 $372,497
Accounts receivable, net of allowance—
 —
 225,646
 430,792
 —
 656,438
Intercompany receivables—
 775,267
 2,756,261
 45,786
 (3,577,314) —
Prepaid expenses1,550
 —
 21,257
 43,281
 —
 66,088
Other current assets—
 —
 2,620
 31,089
 —
 33,709
Total Current Assets207,875
 775,267
 3,025,842
 697,062
 (3,577,314) 1,128,732
Structures, net—
 —
 552,042
 418,607
 —
 970,649
Other property, plant and equipment, net—
 —
 126,964
 119,094
 —
 246,058
Indefinite-lived permits—
 —
 971,163
 —
 —
 971,163
Other intangibles, net—
 —
 311,513
 15,805
 —
 327,318
Goodwill—
 —
 507,820
 197,242
 —
 705,062
Operating lease right-of-use assets—
 —
 999,646
 980,161
 —
 1,979,807
Intercompany notes receivable182,026
 5,184,629
 4,935
 16,273
 (5,387,863) —
Other assets117,156
 (3,949) 1,219,699
 72,579
 (1,306,317) 99,168
Total Assets$507,057
 $5,955,947
 $7,719,624
 $2,516,823
 $(10,271,494) $6,427,957
            
Accounts payable$—
 $—
 $37,207
 $72,438
 $—
 $109,645
Intercompany payable2,756,261
 —
 821,053
 —
 (3,577,314) —
Accrued expenses8,366
 (1,156) 97,896
 357,136
 —
 462,242
Current operating lease liabilities—
 —
 99,635
 294,447
 —
 394,082
Deferred revenue—
 —
 44,422
 51,561
 —
 95,983
Accrued Interest—
 55,251
 572
 1,171
 —
 56,994
Current portion of long-term debt—
 —
 249
 11
 —
 260
Total Current Liabilities2,764,627
 54,095
 1,101,034
 776,764
 (3,577,314) 1,119,206
Long-term debt—
 4,920,391
 3,718
 371,987
 —
 5,296,096
Mandatorily redeemable preferred stock44,884
 —
 —
 —
 —
 44,884
Non-current operating lease liabilities—
 —
 906,024
 714,166
 —
 1,620,190
Intercompany notes payable—
 16,273
 5,107,418
 264,172
 (5,387,863) —
Deferred income taxes(29,866) 853
 483,829
 (66,692) —
 388,124
Other long-term liabilities277
 —
 73,313
 100,792
 —
 174,382
Total stockholders' equity (deficit)(2,272,865) 964,335
 44,288
 355,634
 (1,306,317) (2,214,925)
Total Liabilities and Stockholders' Equity (Deficit)$507,057
 $5,955,947
 $7,719,624
 $2,516,823
 $(10,271,494) $6,427,957



CLEAR CHANNEL OUTDOOR HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)


(In thousands)December 31, 2018
 Parent Subsidiary Guarantor Non-Guarantor    
 Company Issuer Subsidiaries Subsidiaries Eliminations Consolidated
Cash and cash equivalents$1,560
 $—
 $18,464
 $162,432
 $—
 $182,456
Accounts receivable, net of allowance—
 —
 226,230
 480,079
 —
 706,309
Intercompany receivables—
 773,844
 2,807,601
 66,551
 (3,647,996) —
Prepaid expenses329
 1,211
 52,052
 42,142
 —
 95,734
Other current assets—
 —
 2,857
 28,444
 —
 31,301
Total Current Assets1,889
 775,055
 3,107,204
 779,648
 (3,647,996) 1,015,800
Structures, net—
 —
 594,456
 458,560
 —
 1,053,016
Other property, plant and equipment, net—
 —
 127,449
 108,473
 —
 235,922
Indefinite-lived permits—
 —
 971,163
 —
 —
 971,163
Other intangibles, net—
 —
 235,326
 17,536
 —
 252,862
Goodwill—
 —
 507,820
 198,183
 —
 706,003
Due from iHeartCommunications, net154,758
 —
 —
 —
 —
 154,758
Intercompany notes receivable182,026
 5,116,629
 4,895
 16,272
 (5,319,822) —
Other assets252,239
 44,792
 1,291,278
 80,466
 (1,536,271) 132,504
Total Assets$590,912
 $5,936,476
 $6,839,591
 $1,659,138
 $(10,504,089) $4,522,028
            
Accounts payable$—
 $—
 $30,206
 $83,508
 $—
 $113,714
Intercompany payable2,807,601
 —
 840,395
 —
 (3,647,996) —
Accrued expenses33,632
 595
 68,322
 425,933
 —
 528,482
Deferred revenue—
 —
 45,914
 39,138
 —
 85,052
Accrued interest—
 1,004
 162
 1,175
 —
 2,341
Current portion of long-term debt—
 —
 227
 —
 —
 227
Total Current Liabilities2,841,233
 1,599
 985,226
 549,754
 (3,647,996) 729,816
Long-term debt—
 4,902,447
 3,654
 371,007
 —
 5,277,108
Intercompany notes payable—
 16,273
 5,039,418
 264,131
 (5,319,822) —
Deferred income taxes(46,739) 853
 428,319
 (47,418) —
 335,015
Due to iHeartCommunications21,591
 —
 —
 —
 —
 21,591
Other long-term liabilities542
 —
 139,647
 119,961
 —
 260,150
Total stockholders' equity (deficit)(2,225,715) 1,015,304
 243,327
 401,703
 (1,536,271) (2,101,652)
Total Liabilities and Stockholders' Equity (Deficit)$590,912
 $5,936,476
 $6,839,591
 $1,659,138
 $(10,504,089) $4,522,028







CLEAR CHANNEL OUTDOOR HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)


(In thousands)Three Months Ended June 30, 2019
 Parent Subsidiary Guarantor Non-Guarantor    
 Company Issuer Subsidiaries Subsidiaries Eliminations Consolidated
Revenue$—
 $—
 $324,824
 $373,191
 $—
 $698,015
Operating expenses:           
Direct operating expenses—
 —
 134,467
 228,562
 —
 363,029
Selling, general and administrative expenses—
 —
 55,226
 79,495
 —
 134,721
Corporate expenses1,359
 —
 23,156
 14,392
 —
 38,907
Depreciation and amortization—
 —
 46,106
 34,068
 —
 80,174
Other operating income (expense), net(109) —
 1,127
 252
 —
 1,270
Operating income (loss)(1,468) —
 66,996
 16,926
 —
 82,454
Interest expense, net930
 98,070
 289
 8,682
 —
 107,971
Intercompany interest income4,940
 101,059
 6,239
 —
 (112,238) —
Intercompany interest expense523
 253
 105,999
 5,463
 (112,238) —
Equity in earnings (loss) of nonconsolidated affiliates6,590
 (5,006) 454
 —
 (2,038) —
Loss on Due from iHeartCommunications(5,778) 

 

 

 

 (5,778)
Other income (expense), net—
 —
 (10,785) 1,582
 —
 (9,203)
Income (loss) before income taxes2,831
 (2,270) (43,384) 4,363
 (2,038) (40,498)
Income tax benefit (expense)(13,770) 1,156
 49,974
 (8,267) —
 29,093
Consolidated net income (loss)(10,939) (1,114) 6,590
 (3,904) (2,038) (11,405)
Less amount attributable to noncontrolling interest—
 —
 —
 (466) —
 (466)
Net income (loss) attributable to the Company$(10,939) $(1,114) $6,590
 $(3,438) $(2,038) $(10,939)
Other comprehensive income (loss), net of tax: 
  
  
  
  
  
Foreign currency translation adjustments—
 —
 120
 52
 —
 172
Other adjustments to comprehensive income (loss)—
 —
 —
 2,592
 —
 2,592
Equity in subsidiary comprehensive loss5,785
 4,729
 5,665
 —
 (16,179) —
Other comprehensive income (loss)5,785
 4,729
 5,785

2,644

(16,179)
2,764
Comprehensive income (loss)(5,154) 3,615
 12,375
 (794) (18,217) (8,175)
Less amount attributable to noncontrolling interest—
 —
 —
 (3,021) —
 (3,021)
Comprehensive income (loss) attributable to the Company$(5,154) $3,615
 $12,375
 $2,227
 $(18,217) $(5,154)


CLEAR CHANNEL OUTDOOR HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)


(In thousands)Three Months Ended June 30, 2018
 Parent Subsidiary Guarantor Non-Guarantor    
 Company Issuer Subsidiaries Subsidiaries Eliminations Consolidated
Revenue$—
 $—
 $297,866
 $414,114
 $—
 $711,980
Operating expenses:           
Direct operating expenses—
 —
 128,880
 244,056
 —
 372,936
Selling, general and administrative expenses—
 —
 47,553
 77,736
 —
 125,289
Corporate expenses(803) —
 27,822
 10,909
 —
 37,928
Depreciation and amortization—
 —
 43,831
 38,936
 —
 82,767
Other operating income (expense), net9
 —
 937
 (17) —
 929
Operating income812
 —
 50,717
 42,460
 —
 93,989
Interest expense, net(218) 88,143
 430
 8,422
 —
 96,777
Intercompany interest income4,240
 90,246
 5,490
 —
 (99,976) —
Intercompany interest expense210
 242
 94,486
 5,038
 (99,976) —
Equity in earnings (loss) of nonconsolidated affiliates(45,932) (27,348) (28,856) —
 102,136
 —
Other income (expense), net(416) —
 465
 (35,451) —
 (35,402)
Loss before income taxes(41,288) (25,487) (67,100) (6,451) 102,136
 (38,190)
Income tax benefit (expense)(9,095) (2,666) 21,168
 (14,160) —
 (4,753)
Consolidated net income (loss)(50,383) (28,153) (45,932) (20,611) 102,136
 (42,943)
Less amount attributable to noncontrolling interest—
 —
 —
 7,440
 —
 7,440
Net loss attributable to the Company$(50,383) $(28,153) $(45,932) $(28,051) $102,136
 $(50,383)
Other comprehensive income (loss), net of tax: 
  
  
  
  
  
Foreign currency translation adjustments—
 —
 (1,296) (17,324) —
 (18,620)
Equity in subsidiary comprehensive loss(10,701) (2,556) (9,405) —
 22,662
 —
Other comprehensive income (loss)(10,701) (2,556) (10,701) (17,324) 22,662
 (18,620)
Comprehensive loss(61,084) (30,709) (56,633) (45,375) 124,798
 (69,003)
Less amount attributable to noncontrolling interest—
 —
 —
 (7,919) —
 (7,919)
Comprehensive loss attributable to the Company$(61,084) $(30,709) $(56,633) $(37,456) $124,798
 $(61,084)



CLEAR CHANNEL OUTDOOR HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)


(In thousands)Six Months Ended June 30, 2019
 Parent Subsidiary Guarantor Non-Guarantor    
 Company Issuer Subsidiaries Subsidiaries Eliminations Consolidated
Revenue$—
 $—
 $595,276
 $689,855
 $—
 $1,285,131
Operating expenses:           
Direct operating expenses—
 —
 263,521
 447,335
 —
 710,856
Selling, general and administrative expenses—
 —
 106,605
 151,082
 —
 257,687
Corporate expenses2,468
 —
 40,041
 25,012
 —
 67,521
Depreciation and amortization—
 —
 86,318
 68,932
 —
 155,250
Other operating income (expense), net(222) —
 703
 (2,733) —
 (2,252)
Operating income (loss)(2,690) —
 99,494
 (5,239) —
 91,565
Interest expense, net1,735
 202,635
 875
 17,589
 —
 222,834
Intercompany interest income10,404
 206,049
 12,710
 —
 (229,163) —
Intercompany interest expense1,334
 503
 216,453
 10,873
 (229,163) —
Loss on extinguishment of debt—
 (5,474) —
 —
 —
 (5,474)
Equity in loss of nonconsolidated affiliates(137,852) (36,416) (37,363) —
 211,631
 —
Loss on Due from iHeartCommunications(5,778) —
 —
 —
 —
 (5,778)
Other income (expense), net—
 —
 (13,407) 3,639
 —
 (9,768)
Loss before income taxes(138,985) (38,979) (155,894) (30,062) 211,631
 (152,289)
Income tax benefit (expense)(36,121) 335
 18,042
 (10,926) —
 (28,670)
Consolidated net loss(175,106) (38,644) (137,852) (40,988) 211,631
 (180,959)
Less amount attributable to noncontrolling interest—
 —
 —
 (5,853) —
 (5,853)
Net loss attributable to the Company$(175,106) $(38,644) $(137,852) $(35,135) $211,631
 $(175,106)
Other comprehensive income (loss), net of tax: 
  
  
  
  
  
Foreign currency translation adjustments—
 —
 15,498
 (12,777) —
 2,721
Other adjustments to comprehensive income—
 —
 —
 2,592
 —
 2,592
Equity in subsidiary comprehensive income4,750
 (12,325) (10,748) —
 18,323
 —
Other comprehensive income (loss)4,750
 (12,325) 4,750
 (10,185) 18,323
 5,313
Comprehensive loss(170,356) (50,969) (133,102) (45,320) 229,954
 (169,793)
Less amount attributable to noncontrolling interest—
 —
 —
 563
 —
 563
Comprehensive loss attributable to the Company$(170,356) $(50,969) $(133,102) $(45,883) $229,954
 $(170,356)


CLEAR CHANNEL OUTDOOR HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)


(In thousands)Six Months Ended June 30, 2018
 Parent Subsidiary Guarantor Non-Guarantor    
 Company Issuer Subsidiaries Subsidiaries Eliminations Consolidated
Revenue$—
 $—
 $551,529
 $758,849
 $—
 $1,310,378
Operating expenses:           
Direct operating expenses—
 —
 252,225
 482,000
 —
 734,225
Selling, general and administrative expenses—
 —
 96,276
 156,421
 —
 252,697
Corporate expenses2,256
 —
 51,744
 19,363
 —
 73,363
Depreciation and amortization—
 —
 89,059
 77,768
 —
 166,827
Other operating income (expense), net(95) —
 337
 633
 —
 875
Operating income (loss)(2,351) —
 62,562
 23,930
 —
 84,141
Interest (income) expense , net(220) 176,312
 818
 17,131
 —
 194,041
Intercompany interest income8,386
 180,474
 10,787
 —
 (199,647) —
Intercompany interest expense210
 459
 188,860
 10,118
 (199,647) —
Equity in earnings (loss) of nonconsolidated affiliates(162,356) (33,857) (35,450) —
 231,663
 —
Other income (expense), net—
 —
 2,421
 (18,182) —
 (15,761)
Loss before income taxes(156,311) (30,154) (149,358) (21,501) 231,663
 (125,661)
Income tax expense(22,494) (5,328) (12,998) (9,300) —
 (50,120)
Consolidated net loss(178,805) (35,482) (162,356) (30,801) 231,663
 (175,781)
Less amount attributable to noncontrolling interest—
 —
 —
 3,024
 —
 3,024
Net loss attributable to the Company$(178,805) $(35,482) $(162,356) $(33,825) $231,663
 $(178,805)
Other comprehensive income (loss), net of tax: 
  
  
  
  
  
Foreign currency translation adjustments—
 —
 (1,226) (10,612) —
 (11,838)
Equity in subsidiary comprehensive loss(9,155) (3,298) (7,929) —
 20,382
 —
Other comprehensive income (loss)(9,155) (3,298) (9,155) (10,612) 20,382
 (11,838)
Comprehensive loss(187,960) (38,780) (171,511) (44,437) 252,045
 (190,643)
Less amount attributable to noncontrolling interest—
 —
 —
 (2,683) —
 (2,683)
Comprehensive loss attributable to the Company$(187,960) $(38,780) $(171,511) $(41,754) $252,045
 $(187,960)




CLEAR CHANNEL OUTDOOR HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)


(In thousands)Six Months Ended June 30, 2019
 Parent Subsidiary Guarantor Non-Guarantor    
 Company Issuer Subsidiaries Subsidiaries Eliminations Consolidated
Cash flows from operating activities:           
Consolidated net loss$(175,106) $(38,644) $(137,852) $(40,988) $211,631
 $(180,959)
Reconciling items:           
Depreciation and amortization—
 —
 86,318
 68,932
 —
 155,250
Deferred taxes16,873
 —
 (10,427) (21,589) —
 (15,143)
Provision for doubtful accounts—
 —
 2,187
 2,230
 —
 4,417
Amortization of deferred financing charges and note discounts, net9
 4,265
 —
 956
 —
 5,230
Share-based compensation—
 —
 9,609
 786
 —
 10,395
(Gain) loss on disposal of operating assets, net—
 —
 (702) 2,792
 —
 2,090
Equity in loss of nonconsolidated affiliates137,852
 36,416
 37,363
 —
 (211,631) —
Loss on Due from iHeartCommunications5,778
 —
 —
 —
 —
 5,778
Loss on extinguishment of debt—
 5,474
 —
 —
 —
 5,474
Foreign exchange transaction (gain) loss—
 —
 (30) 3,655
 —
 3,625
Other reconciling items, net—
 —
 (1,371) (1,416) —
 (2,787)
Changes in operating assets and liabilities, net
   of effects of acquisitions and dispositions:
           
(Increase) decrease in accounts receivable—
 —
 (1,602) 46,425
 —
 44,823
(Increase) decrease in prepaid expenses and other current assets(1,221) 1,211
 (16,901) (18,035) —
 (34,946)
Increase (decrease) in accrued expenses(24,830) (1,751) 34,490
 (33,099) —
 (25,190)
Increase (decrease) in accounts payable—
 —
 7,002
 (10,366) —
 (3,364)
Increase (decrease) in accrued interest—
 54,248
 1,486
 (102) —
 55,632
Increase (decrease) in deferred revenue—
 —
 (2,133) 12,672
 —
 10,539
Changes in other operating assets and liabilities1,981
 —
 5,807
 6,483
 —
 14,271
Net cash provided by (used for) operating activities$(38,664) $61,219
 $13,244
 $19,336
 $—
 $55,135
Cash flows from investing activities:           
Purchases of property, plant and equipment—
 —
 (35,789) (43,492) —
 (79,281)
Proceeds from disposal of assets—
 —
 2,326
 192
 —
 2,518
Increase in intercompany notes receivable, net—
 (68,000) —
 —
 68,000
 —
Change in other, net—
 —
 —
 76
 —
 76
Net cash used for investing activities$—
 $(68,000) $(33,463) $(43,224) $68,000
 $(76,687)
Cash flows from financing activities:           
Proceeds from long-term debt—
 2,235,000
 197
 —
 —
 2,235,197
Proceeds from issuance of mandatorily redeemable preferred stock43,798
 —
 —
 —
 —
 43,798
Payments on long-term debt—
 (2,200,000) (111) (2) —
 (2,200,113)
Net transfers from iHeartCommunications43,399
 —
 —
 —
 —
 43,399
Proceeds from settlement of Due from iHeartCommunications115,798
 —
 —
 —
 —
 115,798
Dividends and other payments to noncontrolling interests—
 —
 —
 (127) —
 (127)
Dividends paid(701) —
 —
 —
 —
 (701)
Increase in intercompany notes payable, net—
 —
 68,000
 —
 (68,000) —
Intercompany funding43,263
 (1,424) (46,273) 4,434
 —
 —
Debt issuance costs—
 (26,795) —
 —
 —
 (26,795)
Change in other, net(2,128) —
 —
 —
 —
 (2,128)
Net cash provided by financing activities243,429
 6,781
 21,813
 4,305
 (68,000) 208,328
Effect of exchange rate changes on cash, cash equivalents and restricted cash —
 —
 —
 159
 —
 159
Net increase (decrease) in cash, cash equivalents and restricted cash204,765
 —
 1,594
 (19,424) —
 186,935
Cash, cash equivalents and restricted cash at beginning of year1,560
 —
 18,464
 182,845
 —
 202,869
Cash, cash equivalents and restricted cash at end of  year$206,325
 $—
 $20,058
 $163,421
 $—
 $389,804


CLEAR CHANNEL OUTDOOR HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)


(In thousands)Six Months Ended June 30, 2018
 Parent Subsidiary Guarantor Non-Guarantor    
 Company Issuer Subsidiaries Subsidiaries Eliminations Consolidated
Cash flows from operating activities:           
Consolidated net loss$(178,805) $(35,482) $(162,356) $(30,801) $231,663
 $(175,781)
Reconciling items:           
Depreciation and amortization—
 —
 89,059
 77,768
 —
 166,827
Deferred taxes58,972
 —
 (20,163) 7,692
 —
 46,501
Provision for doubtful accounts—
 —
 1,719
 1,598
 —
 3,317
Amortization of deferred financing charges and note discounts, net—
 4,424
 —
 869
 —
 5,293
Share-based compensation—
 —
 3,026
 599
 —
 3,625
Gain on disposal of operating and other assets—
 —
 (336) (779) —
 (1,115)
Equity in (earnings) loss of nonconsolidated affiliates162,356
 33,857
 35,450
 —
 (231,663) —
Foreign exchange transaction (gain) loss—
 —
 (49) 14,584
 —
 14,535
Other reconciling items, net—
 —
 (331) (767) —
 (1,098)
Changes in operating assets and liabilities, net of effects of acquisitions and dispositions:           
(Increase) decrease in accounts receivable—
 —
 (6,008) 13,850
 —
 7,842
(Increase) decrease in prepaid expenses and other current assets54
 1,912
 (15,386) (11,803) —
 (25,223)
Increase (decrease) in accrued expenses(24,438) 3,981
 17,068
 (27,399) —
 (30,788)
Increase (decrease) in accounts payable—
 —
 24,729
 (5,270) —
 19,459
Increase in accrued interest—
 —
 80
 408
 —
 488
Increase in deferred revenue—
 —
 17,547
 25,244
 —
 42,791
Changes in other operating assets and liabilities(1,981) —
 2,655
 (11,479) —
 (10,805)
Net cash provided by (used for) operating activities$16,158
 $8,692
 $(13,296) $54,314
 $—
 $65,868
Cash flows from investing activities:           
Purchases of property, plant and equipment—
 —
 (25,582) (35,733) —
 (61,315)
Proceeds from disposal of assets—
 —
 2,408
 632
 —
 3,040
Increase in intercompany notes receivable, net—
 (8,829) —
 —
 8,829
 —
Dividends from subsidiaries—
 —
 1,111
 —
 (1,111) —
Change in other, net—
 —
 (3) 15
 —
 12
Net cash provided by (used for) investing activities$—
 $(8,829) $(22,066) $(35,086) $7,718
 $(58,263)
Cash flows from financing activities:           
Payments on long-term debt—
 —
 (84) (232) —
 (316)
Net transfers from iHeartCommunications60,751
 —
 —
 —
 —
 60,751
Dividends and other payments to noncontrolling interests—
 —
 —
 (211) —
 (211)
Dividends paid(30,624) —
 —
 (1,111) 1,111
 (30,624)
Increase in intercompany notes payable, net—
 —
 —
 8,829
 (8,829) —
Intercompany funding(45,677) 1,435
 29,537
 14,705
 —
 —
Debt issuance costs—
 (1,298) —
   —
 (1,298)
Change in other, net(702) —
 —
 —
 —
 (702)
Net cash provided by (used for) financing activities(16,252) 137
 29,453
 21,980
 (7,718) 27,600
Effect of exchange rate changes on cash, cash equivalents and restricted cash —
 —
 —
 (4,319) —
 (4,319)
Net increase (decrease) in cash, cash equivalents and restricted cash(94) —
 (5,909) 36,889
 —
 30,886
Cash, cash equivalents and restricted cash at beginning of year27,653
 —
 22,841
 137,816
 —
 188,310
Cash, cash equivalents and restricted cash at end of period$27,559
 $—
 $16,932
 $174,705
 $—
 $219,196

ITEM 2.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Overview
Management’s discussion and analysis of our financial condition and results of operations (“MD&A”) should be read in conjunction with the consolidated financial statements and related notes contained in Item 1 of this Quarterly Report on Form 10-Q.10-Q and the Company's 2019 Annual Report on Form 10-K. 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. Certain prior period amounts included herein have been reclassified
The MD&A is organized as follows:
•Overview – Discussion of the nature, key developments and trends of our business in order to conformprovide 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.
        This discussion contains forward-looking statements that are subject to risks and uncertainties, and actual results may differ materially from those contained in any forward-looking statements. See “Cautionary Statement Concerning Forward-Looking Statements” contained at the end of this MD&A.
OVERVIEW
Format of Presentation
        Prior to the 2019 presentation.
On May 1, 2019, the Company separated (the "Separation")Separation from iHeartCommunications, Inc. ("iHeartCommunications"), a subsidiary of iHeartMedia Inc. ("iHeartMedia"). In connection with the consummation of the Separation, Clear Channel Outdoor Holdings, Inc. merged with and into the Company, with the Company surviving the Merger and changing its name to Clear Channel Outdoor Holdings, Inc. The Intercompany Agreements with iHeartCommunications were terminated, and the Separation Agreement provided for the repayment of the post-petition intercompany balance outstanding and the waiver of the set-off value of any royalties and IP license fees owed to iHeartCommunications. In connection with the Separation, the Company received the Clear Channel tradename and a net payment of $115.8 million from iHeartCommunications. Additionally, the Company issued $45.0 million of preferred stock on May 1, 2019. The Company has entered into a Transition Service Agreement ("TSA") with iHeartCommunications for one year from the Effective Date (subject to certain rights of the Company to extend up to one additional year). The Company may terminate the Transition Services Agreement with respect to all or any individual service, in whole or in part, upon 30 days’ prior written notice, provided that any co-dependent services must be terminated concurrently. Refer to the "Liquidity and Capital Resources" section of this MD&A below for more information about the iHeartMedia Chapter 11 Cases and Separation, the Merger Agreement, and the Separation Agreement.
Prior to the Separation,2019, the historical financial statements of the Company consisted of the carve-out financial statements of the Outdoor Business of CCH and its subsidiaries and excluded the Company which previously also owned a portion of the Radio Businesses (as defined below)radio businesses that had historically been owned by CCH and reported as part of iHeartMedia.iHeartMedia’s iHM segment. CCH, which was a holding company prior to the Separation, had no independent assets or operations. Upon the Separation and the transactions related thereto, (the “Transactions”), the Company’s only assets, liabilities and operations were those of the Outdoor Business.
The “Outdoor Business” refers        Certain prior period amounts included herein have been reclassified to conform to the assets that are primarily related2020 presentation.
Description of Our Business
        We changed our presentation of segment information during the first quarter of 2020 to or primarily used or held for usereflect changes in connection withthe way the business is managed and resources are allocated by the Company's CODM. Effective January 1, 2020, there are two reportable business segments: Americas, which includes operations primarily in the U.S., and Europe, which consists of operations in Europe and Singapore. Our remaining operating segments, China (before its sale, as described under "Executive Summary" below) and Latin America, do not meet the quantitative thresholds to qualify as reportable segments and are disclosed as "Other." We have conformed the segment disclosures for prior periods in this MD&A and throughout this Quarterly Report on Form 10-Q to the 2020 presentation. Refer to Note 2 to our Consolidated Financial Statements included in Item 1 of Part I of this Quarterly Report on Form 10-Q for additional details regarding our segments.
Macroeconomic Indicators, Seasonality and Recent Developments
        Advertising revenue for our segments is 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.
        The Company typically experiences its lowest financial performance in the first quarter of the Companycalendar year, with our international businesses historically experiencing a loss from operations in that period. This is generally offset during the remainder of the year, as our international businesses typically experience their strongest performance in the second and fourth quarters of the calendar year. However, our financial performance in 2020 has been severely impacted from COVID-19.
COVID-19 Update
        On March 11, 2020, the COVID-19 outbreak was characterized as a pandemic by the World Health Organization. The pandemic is still ongoing as of the filing date of this Quarterly Report on Form 10-Q.
17
Table of Contents
COVID-19 initially caused unprecedented worldwide lock-downs, significant travel and transportation restrictions in airports and transit systems, a significant reduction in time spent out-of-home by consumers, reductions in consumer spending and volatile economic conditions and business disruptions across the globe. Starting in March, we observed:
•Lock-downs limiting the behavior and movement of consumers and target audiences, which caused a significant decrease in out-of-home audience metrics indicating a reduction in consumer advertising display engagement;
•A sharp decline in customer bookings, including both national and local buying as customers deferred advertising buying decisions and reduced marketing spend;
•An unprecedented level of requests to defer, revise or its subsidiaries. These carve-outcancel sales contracts as customers sought to conserve cash; and
•Customers forced to close their businesses temporarily or permanently.
As lock-downs and restrictions were lifted, these negative impacts began to lessen during the last weeks of the second quarter; however, the duration and severity of COVID-19's impacts continue to evolve and remain unknown.
Throughout the second quarter, we took measures to increase our liquidity and preserve and strengthen our financial statements excludeflexibility, including aggressive operating cost and capital expenditure savings initiatives and other targeted liquidity measures, as further described under "Liquidity and Capital Resources" below.
Currently, we are seeing an increase in mobility, traffic and other out-of-home metrics, including from our own RADAR data movement platform. Travel patterns, consumer behavior and economic activity are improving to varying degrees across our global platform. However, it remains unclear when a sustainable economic recovery will take hold, when our customers' businesses will operate under normal conditions, and when the radio businessespositive metric momentum we see will translate into a return to typical out-of-home advertising buying levels.
So far in the third quarter, we have seen sequential growth in customer bookings; however, current bookings remain significantly below historic norms in both our Americas and Europe segments. As lock-downs have lifted in Europe, we have seen a strong rebound in bookings from the historic lows of the second quarter. Our Americas segment is positively rebounding as well but to a lesser extent. If there is a resurgence in COVID-19 cases that causes restrictions to be reinstated, these rebounds could slow down or be reversed. Our Latin America business bookings continue to be severely constrained.
We expect to implement further cost savings initiatives, including permanent cost reductions, throughout the remainder of the year to continue aligning our operating expense base with revenues and provide additional financial flexibility as circumstances warrant. However, the extent to which COVID-19 will ultimately impact our results will depend on future developments, which are highly uncertain, and the curtailed customer demand we have historically been reported as partexperienced and are continuing to experience could materially adversely impact our business, results of iHeartMedia’s iHM segment (the “Radio Businesses”) prior tooperations and overall financial performance in future periods. See "Risk Factors" in Item 1A of Part II of this Form 10-Q for further discussion of the Separation. In addition,possible impact of the carve-out financial statements exclude amounts attributable to Clear Channel Holdings, Inc., which was a holding company prior to the Separation with no independent assets or operations.COVID-19 pandemic on our business.
Executive Summary
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. Our reportable segments are Americas outdoor advertising (“Americas”) and International outdoor advertising (“International”), and each segment provides outdoor advertising services in its respective geographic regions using various digital and traditional display types. Part of our long-term strategy is to transform the way we do business by applying cutting-edge technology to the outdoor advertising experience. We intend to do this by continuing to digitize our asset base, investing in data and analytics technologies and improving our programmatic platform, which enables marketers to buy our out-of-home inventory in audience-based packages, giving them the ability to manage their campaigns on a self-service basis.
Advertising revenue for our segments is highly correlated to changes in gross domestic product (“GDP”) as advertising spending has historically trended in line with GDP, both domestically and internationally. Management typically monitors our businesses by reviewing the average rates, average revenue per display, occupancy and inventory levels of each of our display types by market. Additionally, our international results are impacted by fluctuations in foreign currency exchange rates. In order to compare operations independent of foreign exchange movements, management reviews the operating results from our foreign operations on a constant dollar basis.
The key developments that impactedin our business during the three months ended June 30, 20192020 are summarized below:
•Consolidated revenue decreased $14.0$383.1 million, or 54.9%, during the three months ended June 30, 20192020 compared to the same period of 2018.2019. Excluding a $21.6the $3.2 million impact from movements in foreign exchange rates, consolidated revenue increased $7.6decreased $379.9 million, or 54.4%. COVID-19's extensive impact on the global advertising market severely reduced our performance in both Americas and Europe.
•On April 28, 2020, we sold our stake in Clear Media, our former indirect, non-wholly owned subsidiary based in China, for $253.1 million. We expect to pay $20.9 million of taxes to the Chinese taxing authorities related to the sale.
•On May 15 2020, Clear Channel International B.V. ("CCIBV"), our indirect wholly-owned subsidiary, issued a promissory note in principal amount of $53.0 million (the "CCIBV Note"), which was transferred to the holder of our Preferred Stock in exchange for the Preferred Stock, which remains outstanding and held by our subsidiary.
•In May 2020, our Board of Directors adopted a limited-duration shareholder rights plan to protect the interests of all Company shareholders during the three months endedmarket dislocation caused by COVID-19.
•In June 30, 2019 compared2020, we amended our senior credit agreement to suspend the samespringing financial covenant of the Revolving Credit Facility for a certain period and delay the timing of 2018.    the financial covenant step-down.

On August 4, 2020, CCIBV issued $375.0 million aggregate principal amount of 6.625% Senior Secured Notes due 2025 (the "CCIBV Senior Secured Notes"). A portion of the proceeds was used to repay the CCIBV Note in full.
Americas revenue increased $27.2 million during the three months ended June 30, 2019 compared to the same period
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Table of 2018, primarily driven by digital revenue.Contents
International revenue decreased $41.2 million during the three months ended June 30, 2019 compared to the same period of 2018. Excluding the $21.6 million impact from movements in foreign exchange rates, International revenue decreased $19.6 million during the three months ended June 30, 2019 compared to the same period of 2018, primarily due to lower revenues in China.
RESULTS OF OPERATIONS
Our Results        The discussion of Operations discussionour results of operations is presented on both a consolidated and segment basis. We manageBeginning in 2020, our operating segments by focusing primarily on theirsegment profit measure is Segment Adjusted EBITDA, which is calculated as revenue less direct operating income, while corporateexpenses 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. Corporate expenses, depreciation and amortization, 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 from movementof 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 periodperiod-to-period comparisons of business performance and provides useful information to investors. Revenue and expenses “excluding the impact from movementof 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 priorcomparable period. 
        Due to seasonality, uncertainty surrounding COVID-19, and the sale of our Clear Media business, 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 six months ended June 30, 20192020 to the three and six months ended June 30, 20182019 is as follows:
(In thousands)Three Months Ended
June 30,		 % Six Months Ended
June 30,		 %
 2019 2018 Change 2019 2018 Change
Revenue$698,015
 $711,980
 (2.0)% $1,285,131
 $1,310,378
 (1.9)%
Operating expenses:           
Direct operating expenses (excludes depreciation and amortization)363,029
 372,936
 (2.7)% 710,856
 734,225
 (3.2)%
Selling, general and administrative expenses (excludes depreciation and amortization)134,721
 125,289
 7.5% 257,687
 252,697
 2.0%
Corporate expenses (excludes depreciation and amortization)38,907
 37,928
 2.6% 67,521
 73,363
 (8.0)%
Depreciation and amortization80,174
 82,767
 (3.1)% 155,250
 166,827
 (6.9)%
Other operating income (expense), net1,270
 929
   (2,252) 875
  
Operating income82,454
 93,989
 (12.3)% 91,565
 84,141
 8.8%
Interest expense, net107,971
 96,777
   222,834
 194,041
  
Loss on extinguishment of debt—
 —
   (5,474) —
  
Loss on Due from iHeartCommunications(5,778) —
   (5,778) —
  
Other expense, net(9,203) (35,402)   (9,768) (15,761)  
Loss before income taxes(40,498) (38,190)   (152,289) (125,661)  
Income tax benefit (expense)29,093
 (4,753)   (28,670) (50,120)  
Consolidated net loss(11,405) (42,943)   (180,959) (175,781)  
Less amount attributable to noncontrolling interest(466) 7,440
   (5,853) 3,024
  
Net loss attributable to the Company$(10,939) $(50,383)   $(175,106) $(178,805)  

(In thousands)Three Months Ended
June 30,		%Six Months Ended
June 30,		%
 20202019Change20202019Change
Revenue$314,906  $698,015  (54.9)%$865,715  $1,285,131  (32.6)%
Operating expenses:  
Direct operating expenses (excludes depreciation and amortization)254,553  363,029  (29.9)%604,822  710,856  (14.9)%
Selling, general and administrative expenses (excludes depreciation and amortization)99,688  134,721  (26.0)%223,392  257,687  (13.3)%
Corporate expenses (excludes depreciation and amortization)32,665  38,907  (16.0)%69,003  67,521  2.2%
Depreciation and amortization66,192  80,174  (17.4)%141,945  155,250  (8.6)%
Impairment charges—  —  123,137  —  
Other operating income (expense), net69,600  1,270  63,579  (2,252) 
Operating income (loss)(68,592) 82,454  (233,005) 91,565  
Interest expense, net88,742  107,971   178,884  222,834   
Loss on Due from iHeartCommunications—  (5,778) —  (5,778) 
Loss on extinguishment of debt—  —  —  (5,474) 
Other expense, net(4,490) (9,203)  (23,379) (9,768)  
Loss before income taxes(161,824) (40,498)  (435,268) (152,289)  
Income tax benefit (expense)19,221  29,093   3,442  (28,670)  
Consolidated net loss(142,603) (11,405)  (431,826) (180,959)  
Less amount attributable to noncontrolling interest(5,405) (466)  (17,137) (5,853)  
Net loss attributable to the Company$(137,198) $(10,939)  $(414,689) $(175,106)  
Consolidated Revenue
Consolidated revenue decreased $14.0$383.1 million, or 54.9%, during the three months ended June 30, 20192020 compared to the same period of 2018.2019. Excluding the $21.6$3.2 million impact fromof movements in foreign exchange rates, consolidated revenue increased $7.6decreased $379.9 million, during the three months ended June 30, 2019 compared to the same period of 2018. This is due to revenue growth in our Americas business, partially offset by a decrease in revenue in our International business driven primarily by lower revenues in China.or 54.4%.
Consolidated revenue decreased $25.2$419.4 million, or 32.6%, during the six months ended June 30, 20192020 compared to the same period of 2018.2019. Excluding the $46.4$12.1 million impact fromof movements in foreign exchange rates, consolidated revenue increased $21.2decreased $407.4 million, duringor 31.7%.
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The decrease in consolidated revenue for both the three and six months ended June 30, 2019 comparedmonth periods is primarily due to the same periodsignificant adverse impacts of 2018. This is dueCOVID-19 on our business. Also contributing to revenue growth in our Americas business, partially offset by athe decrease in consolidated revenue inis the sale of our InternationalClear Media business driven primarily by lower revenues in China and Italy.on April 28, 2020.
Consolidated Direct Operating Expenses
Consolidated direct operating expenses decreased $9.9$108.5 million, or 29.9%, during the three months ended June 30, 20192020 compared to the same period of 2018.2019. Excluding the $13.6$5.0 million impact fromof movements in foreign exchange rates, consolidated direct operating expenses increased $3.7decreased $103.5 million, during the three months ended June 30, 2019 compared to the same period of 2018. An increase in variable site lease expense in our Americas business, driven by increased revenue, was partially offset by a decrease in direct operating expenses in our International business, also primarily related to variable site lease expense. or 28.5%.
Consolidated direct operating expenses decreased $23.4$106.0 million, or 14.9%, during the six months ended June 30, 20192020 compared to the same period of 2018.2019. Excluding the $30.8$12.1 million impact fromof movements in foreign exchange rates, consolidated direct operating expenses increased $7.4decreased $93.9 million, or 13.2%.
The decrease in consolidated direct operating expenses for both the three and six month periods is largely due to lower site lease and other direct operating expenses throughout our business, mainly driven by lower revenue and renegotiated contracts with landlords and municipalities to better align fixed site lease expenses with reductions in revenue. We recognized reductions of rent expense on lease and non-lease contracts due to negotiated rent abatements of $29.4 million during the second quarter of 2020. Also contributing to the decrease in consolidated direct operating expenses is the sale of our Clear Media business. These decreases were partially offset by higher direct operating expenses in France related to a new contract.
Restructuring and other costs included within consolidated direct operating expenses were $0.8 million and $0.3 million during the three months ended June 30, 2020 and 2019, respectively, and $1.0 million and $0.4 million during the six months ended June 30, 2020 and 2019, compared to the same period of 2018. An increase in variable site lease expense in our Americas business, driven by increased revenue, was partially offset by a decrease in direct operating expenses in our International business, also primarily related to variable site lease expense.respectively.
Consolidated Selling, General and Administrative (“SG&A”) Expenses
Consolidated SG&A expenses increased $9.4decreased $35.0 million, or 26.0%, during the three months ended June 30, 2020 compared to the same period of 2019. Excluding the $2.1 million impact of movements in foreign exchange rates, consolidated SG&A expenses decreased $32.9 million, or 24.4%.
Consolidated SG&A expenses decreased $34.3 million, or 13.3%, during the six months ended June 30, 2020 compared to the same period of 2019. Excluding the $4.7 million impact of movements in foreign exchange rates, consolidated SG&A expenses decreased $29.7 million, or 11.5%.
The decrease in consolidated SG&A expenses for both the three and six month periods is largely due to lower employee compensation expense driven by operating cost savings initiatives in response to COVID-19, including reductions in salaries, bonuses and employee hours, as well as hiring freezes and furloughs; European governmental support and wage subsidies; and lower revenue. Also contributing to the decrease in consolidated SG&A expenses is the sale of our Clear Media business.
Restructuring and other costs included within consolidated SG&A expenses were $1.5 million and $2.9 million during the three months ended June 30, 2020 and 2019, compared to the same period of 2018. Excluding the $4.7respectively, and $3.1 million impact from movements in foreign exchange rates, consolidated SG&A expenses increased $14.1 million during the three months ended June 30, 2019 compared to the same period of 2018. SG&A expenses increased primarily due to higher employee compensation expense in our Americas business, including variable incentive compensation, and higher expenses in our international business for professional fees in connection with the ongoing investigation in China.
Consolidated SG&A expenses increased $5.0$5.2 million during the six months ended June 30, 2020 and 2019, compared to the same period of 2018. Excluding the $10.3 million impact from movements in foreign exchange rates, consolidated SG&A expenses increased $15.3 million during the six months ended June 30, 2019 compared to the same period of 2018. SG&A expenses increased primarily due to higher employee compensation expense in our Americas business, including variable incentive compensation, as well as higher expenses in our International business, including bad debt expense and professional fees in connection with the ongoing investigation in China.respectively.
Corporate Expenses
Corporate expenses increased $1.0decreased $6.2 million, or 16.0%, during the three months ended June 30, 20192020 compared to the same period of 2018.2019. Excluding the $0.8$0.3 million impact fromof movements in foreign exchange rates, corporate expenses increased $1.8decreased $6.0 million, or 15.4%. This increasedecrease was primarilylargely driven by higher compensation-related expenses includinglower employee compensation expense from operating cost savings initiatives in response to COVID-19 and a decrease in operating performance, as well as lower share-based compensation, partially offset by incremental stand-alone costs associated with the build-out of new corporate functions and expenses related toafter the investigations in China and Italy. The increase in expenses was partially offset by the elimination of costs associated with the termination of the agreements comprising trademark and IP licenses and sponsorship management fees that were in place prior to the Separation.
Corporate expenses decreased $5.8increased $1.5 million, or 2.2%, during the six months ended June 30, 20192020 compared to the same period of 2018.2019. Excluding the $1.5$0.6 million impact from movements in foreign exchange rates, corporate expenses decreased $4.3increased $2.1 million, during the six months ended June 30, 2019 compared to the same period of 2018.or 3.1%. This decreaseincrease was primarilylargely driven by the elimination of costs associated with the termination of the agreements comprising trademark and IP licenses and sponsorship management fees that were in place prior to the Separation. The decrease in expenses was partially offset by higher compensation-related expenses including share-based compensation, incremental stand-alone costs associated with the build-out of new corporate functions after the Separation, partially offset by lower employee compensation expense from operating cost savings initiatives and a decrease in operating performance, as well as lower share-based compensation.
Restructuring and other costs included within corporate expenses related to the investigations in Chinawere $3.1 million and Italy.

Depreciation and Amortization
Depreciation and amortization decreased $2.6$7.0 million during the three months ended June 30, 2020 and 2019, compared to the same period in 2018primarily due to assets becoming fully depreciated or fully amortizedrespectively, and the impact from movements in foreign exchange rates, partially offset by capital expenditures.
Depreciation$8.3 million and amortization decreased $11.6$10.4 million during the six months ended June 30, 2020 and 2019, respectively.
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Depreciation and Amortization
Depreciation and amortization decreased $14.0 million, or 17.4%, during the three months ended June 30, 2020 compared to the same period in 2018primarily due to assets becoming fully depreciated or fully amortized andof 2019. Excluding the $0.9 million impact fromof movements in foreign exchange rates, depreciation and amortization decreased $13.1 million, or 16.3%.
Depreciation and amortization decreased $13.3 million, or 8.6%, during the six months ended June 30, 2020 compared to the same period of 2019. Excluding the $2.0 million impact of movements in foreign exchange rates, depreciation and amortizationdecreased $11.3 million, or 7.3%.
The decrease in depreciation and amortization for both the three and six month periods is largely driven by the sale of our Clear Media business, with the remaining decrease due to lower capital expenditures.
Impairment Charges
During the three months ended March 31, 2020, we recognized impairment charges of $123.1 million on indefinite-lived permits in multiple markets of our Americas segment, driven by reductions in projected cash flows related to the expected negative financial statement impacts from COVID-19, as well as an increased discount rate. Refer to Note 8 to our Consolidated Financial Statements included in Item 1 of Part I of this Quarterly Report on Form 10-Q for a further description of the impairment charge. As expectations and projections of the financial statement impacts from COVID-19 are revised, our estimates and assumptions may change, and additional impairments may be recognized in future periods.
Other Operating Income (Expense), Net
Other operating income, net, of $69.6 million and $63.6 million for the three and six months ended June 30, 2020, respectively, was primarily driven by a gain on the sale of our Clear Media business of $75.2 million, partially offset by capital expenditures.legal costs and consulting fees incurred related to the sale.
For the three and six months ended June 30, 2019, we recognized other operating income, net, of $1.3 million and other operating expense, net, of $2.3 million, respectively.
Interest Expense, Net
Interest expense, net, increased $11.2decreased $19.2 million and $28.8$44.0 million during the three and six months ended June 30, 2019,2020, respectively, compared to the same periods of 2018, primarily due to higher2019. These decreases were driven by the lower rates of interest incurred in conjunction withon the refinancing ofnew debt from the $2,200 million of 7.625% Series A Senior Subordinated Notes due 2020 issued by CCWH (the “Series A CCWH Subordinated Notes) and 7.625% Series B Senior Subordinated Notes due 2020 issued by CCWH (the “Series B CCWH Subordinated Notes” and, together with the Series A CCWH Subordinated Notes, the “CCWH Subordinated Notes”) with $2,235.0 million of 9.25% Senior Subordinated Notes due 2024 issued by CCWH (the “New CCWH Subordinated Notes”). In addition to an increase in interest expense due to higher ratesAugust 2019 refinancing and the higher principal amount on the New CCWH Subordinated Notes, there was incremental interest expense as both theredemption of a portion of our CCWH Senior Subordinated Notes and the New CCWH Senior Subordinated Notes were outstanding for the period from February 4, 2019 to March 6,in July 2019.
Loss on Extinguishment of Debt

Loss on extinguishment of debt was $5.5 million for the six months ended June 30, 2019, which resulted from a loss recognized during the three months ended March 31, 2019 in relation to the refinancing of the 7.625% CCWH Senior Subordinated Notes.
Loss on Due from iHeartCommunications
Pursuant to the Separation Agreement, the note payable by iHeartCommunications to the Company was canceled upon separation of the companies,Separation, and we received a recovery amount of approximately $149.0 million in cash. This resulted in a $5.8 million loss recognized during the three and six months ended June 30, 2019. Refer
Loss on Extinguishment of Debt
During the three months ended March 31, 2019, we recognized a loss on extinguishment of debt of $5.5 million related to the "Liquidityrefinancing of the 7.625% Series A and Capital Resources" section of this MD&A below for more information.
Other Expense, Net

Other expense, net, of $9.2 million and $9.8 million recognized inSeries B Senior Subordinated Notes Due 2020. We did not extinguish any debt during the three and six months ended June 30, 2020.
Other Expense, Net
Other expense, net, decreased $4.7 million during the three months ended June 30, 2020 compared to the same period of 2019 primarily related to costs incurred in connection with the Separation from iHeartMedia andduring the three months ended June 30, 2019.
Other expense, net, increased $13.6 million during the six months ended June 30, 2020 compared to the same period of 2019 primarily due to increases in net foreign exchange losses recognized in connection with intercompany notes denominated in foreign currencies.

Other expense, net, of $35.4 million and $15.8 million recognized This was partially offset by costs incurred in connection with the three andSeparation from iHeartMedia during the six months ended June 30, 2018 related primarily to net foreign exchange gains recognized in connection with intercompany notes denominated in foreign currencies.2019.

Income Tax Benefit (Expense)
For periods prior to the Separation, our operations were included in a consolidated income tax return filed by iHeartMedia. However, forFor our financial statements, however, our provision for income taxes was computed as if we were to filefiled separate consolidated federal income tax returns with our subsidiaries for all periods.
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The effective tax rates for the three and six months ended June 30, 2020 were 11.9% and 0.8%, respectively. 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 $57.8 million of tax expense as a result of selling its 50.91% stake in Clear Media.
The effective tax rates for the three and six months ended June 30, 2019 were 71.8% and (18.8)%, respectively. The effective rate in 2019 was primarily impacted by the valuation allowance recorded against deferred tax assets resulting from losses in the U.S. and certain foreign jurisdictions due to uncertainty regarding the Company's ability to realize those assets in future periods. The income tax benefit recorded for the three months ended June 30, 2019 is attributed to changes in the Company's estimated annual effective tax rate, driven primarily by changes in forecasted earnings at certain international locations.

The effective tax rates for the three and six months ended June 30, 2018 were (12.4)% and (39.9)%, respectively. The effective rate was primarily impacted by the valuation allowance recorded against deferred tax assets resulting from losses in the U.S. and certain foreign jurisdictions due to uncertainty regarding the Company's ability to realize those assets in future periods.


As a result ofOn March 27, 2020, the Separation from iHeartMedia, certain deferred tax attributes of the Company were reduced as a result of cancellation of indebtedness income realized in connection with the iHeart Plan of Reorganization. As discussed in Note 7, the CompanyCARES Act was not reimbursed for the reduction of its tax attributes under the terms of the New Tax Matters Agreement. The reorganization adjustments resulted in a reduction to deferred tax assets for all U.S. federal net operating loss carryforwards and certain state net operating loss carryforwards. These adjustments were partially offset by the reduction of valuation allowances recorded by the Company as of the Separation date. The net tax impact of the reorganization adjustments, which was approximately $65.9 million, was reflectedsigned into law in the equity section of the balance sheet as a dividend. Additionally, the Company recognized a capital loss for tax purposesU.S. to provide certain relief as a result of the seriesCOVID-19 pandemic. The CARES Act, among other things, relaxes the limitation for business interest deductions for 2019 and 2020 by allowing taxpayers to deduct interest up to the sum of transactions to effect the Separation. To the extent the capital50% of adjusted taxable income and permits net operating loss is not subject to reduction as a result of cancellation of indebtedness income, it may be carried forwardcarryovers to offset capital gains recognized by100% of taxable income for taxable years beginning before 2021. As of June 30, 2020, the Company in the next five years, subject to annual limitations under Section 382 of the Internal Revenue Code. The deferredCARES Act did not have significant impact on our effective tax asset associated with the capital loss carryforward is offset by a valuation allowance due to significant uncertainty regarding the Company's ability to utilize the carryforward prior to its expiration.  

rate.
Americas Outdoor Advertising Results of Operations
Our Americas outdoor operating results were as follows:
(In thousands)Three Months Ended
June 30,		%Six Months Ended
June 30,		%
 20202019Change20202019Change
Revenue$199,700  $327,142  (39.0)%$495,487  $599,864  (17.4)%
Direct operating expenses1
108,301  135,974  (20.4)%243,524  266,493  (8.6)%
SG&A expenses1
45,428  55,482  (18.1)%98,757  107,118  (7.8)%
Segment Adjusted EBITDA47,019  136,747  (65.6)%154,977  227,876  (32.0)%
(In thousands)Three Months Ended
June 30,		 % Six Months Ended
June 30,		 %
 2019 2018 Change 2019 2018 Change
Revenue$327,142
 $299,922
 9.1% $599,864
 $555,769
 7.9%
Direct operating expenses135,974
 130,313
 4.3% 266,493
 255,186
 4.4%
SG&A expenses55,482
 47,824
 16.0% 107,118
 96,774
 10.7%
Depreciation and amortization44,558
 43,123
 3.3% 84,054
 87,627
 (4.1)%
Operating income$91,128
 $78,662
 15.8% $142,199
 $116,182
 22.4%
1Includes restructuring and other costs that are excluded from Segment Adjusted EBITDA.
Three Months
Americas revenue increased $27.2Revenue decreased $127.4 million, or 39.0%, during the three months ended June 30, 20192020 compared to the same period of 2018. The largest driver2019. Revenue in our Americas segment was an increaseadversely affected by COVID-19 as cities and states throughout the U.S. were locked down to limit the spread of the virus, resulting in reduced customer demand and the loss of advertising campaigns. This resulted in decreases in revenue across our products, including a decrease in digital revenue from billboards and street furniture primarily due to higher ratesof $44.9 million, or 55.6%, and the deployment of new digital displays. Increasesdecreases in revenue from print billboards, airport displays, print billboardsother transit displays and wallscapes also contributedof $41.8 million, $22.0 million, $8.3 million and $5.6 million, respectively. Compared to the overall growth in revenue.same period of 2019, Americas total digital revenue was $105.9decreased $56.9 million, and $88.5or 53.7%, to $49.0 million for the three months ended June 30, 2019 and 2018, respectively. Digital revenue2020, including $35.9 million from billboards and street furniture was $80.9 million and $69.1 million for the three months ended June 30, 2019 and 2018, respectively.furniture. Revenue generated from national sales comprised 41%37.3% and 39%41.1% of total revenue for the three months ended June 30, 2020 and 2019, and 2018, respectively.respectively, while the remainder of revenue was generated from local sales.
 Americas directDirect operating expenses increased $5.7decreased $27.7 million, or 20.4%, during the three months ended June 30, 20192020 compared to the same period of 2018,2019 primarily due to higher variablelower site lease expenses related to higher revenue. Americas lower revenue and renegotiated contracts with landlords and municipalities.
SG&A expenses increased $7.7decreased $10.1 million, or 18.1%, during the three months ended June 30, 20192020 compared to the same period of 2018, primarily due to higher2019. Lower employee compensation expense, including variable incentive compensation.costs, driven by operating cost savings initiatives implemented by the Company in response to COVID-19 and lower revenue, were partially offset by higher bad debt expense.
Six Months
Americas revenue increased $44.1Revenue decreased $104.4 million, or 17.4%, during the six months ended June 30, 20192020 compared to the same period of 2018. The largest driver2019. As previously described, revenue in our Americas segment was an increaseadversely affected by COVID-19 during the second quarter of 2020, resulting in digitaldecreases in revenue across our products. Digital revenue from billboards and street furniture primarily duedecreased $34.2 million, or 24.4%, with the decline related to higher rates andCOVID-19 partially offset by the deployment of new digital displays. Increases indisplays, and revenue from print billboards, airport displays, and print billboards were also significant driversother transit displays decreased $34.0 million, $18.4 million and $9.4 million, respectively. Compared to the same period of the overall growth in revenue.2019, Americas total digital revenue was $188.1decreased $40.3 million, and $161.7or 21.4%, to $147.8 million for the six months ended June 30, 2019 and 2018, respectively. Digital revenue2020, including $105.8 million from billboards and street furniture was $140.0 million and $124.5 million for the six months ended June 30, 2019 and 2018, respectively.furniture. Revenue generated from national sales comprised 39%37.5% and 38%39.4% of total revenue for the six months ended June 30, 2020 and 2019, and 2018, respectively.respectively, while the remainder of revenue was generated from local sales.
Americas direct
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Direct operating expenses increased $11.3decreased $23.0 million, or 8.6%, during the six months ended June 30, 20192020 compared to the same period of 2018,2019 primarily due to higher variablelower site lease expenses related to higher revenue. Americas lower revenue and renegotiated contracts with landlords and municipalities.
SG&A expenses increased $10.3decreased $8.4 million, or 7.8%, during the six months ended June 30, 20192020 compared to the same period of 2018, primarily due to higher2019. Lower employee compensation expense, including variable incentive compensation.costs, driven by operating cost savings initiatives implemented by the Company in response to COVID-19 and lower revenue, were partially offset by higher bad debt expense.

International Outdoor AdvertisingEurope Results of Operations
Our International outdoor operating results were as follows:
(In thousands)Three Months Ended
June 30,		%Six Months Ended
June 30,		%
 20202019Change20202019Change
Revenue$107,346  $290,437  (63.0)%$319,036  $534,332  (40.3)%
Direct operating expenses1
130,896  184,847  (29.2)%304,492  358,754  (15.1)%
SG&A expenses1
46,426  60,751  (23.6)%99,557  115,955  (14.1)%
Segment Adjusted EBITDA(68,819) 46,536  (247.9)%(82,930) 63,017  (231.6)%
(In thousands)Three Months Ended
June 30,		 % Six Months Ended
June 30,		 %
 2019 2018 Change 2019 2018 Change
Revenue$370,873
 $412,058
 (10.0)% $685,267
 $754,609
 (9.2)%
Direct operating expenses227,055
 242,623
 (6.4)% 444,363
 479,039
 (7.2)%
SG&A expenses79,239
 77,465
 2.3% 150,569
 155,923
 (3.4)%
Depreciation and amortization33,812
 38,683
 (12.6)% 68,393
 77,248
 (11.5)%
Operating income$30,767
 $53,287
 (42.3)% $21,942
 $42,399
 (48.2)%

1Includes restructuring and other costs that are excluded from Segment Adjusted EBITDA.
Three Months
International revenueRevenue decreased $41.2$183.1 million, or 63.0%, during the three months ended June 30, 20192020 compared to the same period of 2018.2019. Excluding the $21.6$2.2 million impact fromof movements in foreign exchange rates, International revenue decreased $19.6$180.9 million, duringor 62.3%. Revenue in our Europe segment was adversely affected by COVID-19 as governments locked down countries experiencing concentrated outbreaks of the three months ended June 30,virus, resulting in reduced customer demand and the loss of advertising campaigns. During the second quarter of 2019, compared toCOVID-19 had a negative impact on our revenues in each country in which we have operations, with the same period of 2018, primarily due to an $18.1 million decreaselargest decreases occurring in China revenues due to weakening economic conditions. Clear Media Limited, our Chinese subsidiary, remains cautious about the operating environment in 2019 as uncertainty continues in China's overall economy. The non-renewal of contracts in certain countries, including Italy and Spain, also contributed to the decrease in revenue. These decreases were partially offset by increases in revenue from digital display expansion inFrance, the United Kingdom ("U.K."), Spain, Switzerland, Sweden and new contracts in Finland. International digitalItaly. Digital revenue was $90.1decreased $51.1 million, and $86.4or 64.7%, to $27.8 million for the three months ended June 30, 2019 and 2018, respectively.2020. Excluding the $5.0$0.9 million impact fromof movements in foreign exchange rates, total digital revenue increased $8.7decreased $50.2 million, or 63.6%.
 Direct operating expenses decreased $54.0 million, or 29.2%, during the three months ended June 30, 20192020 compared to the same period of 2018.
 International2019. Excluding the $3.3 million impact of movements in foreign exchange rates, direct operating expenses decreased $15.6$50.7 million, or 27.4%.Direct operating expenses decreased in each country in which we have operations, with the largest decreases occurring in Spain, the U.K, Switzerland and France. The largest drivers of these decreases were lower site lease expense driven by lower revenue and renegotiated contracts with landlords and municipalities and lower production, subcontractor, cleaning and maintenance costs driven by lower revenue.
SG&A expenses decreased $14.3 million, or 23.6% during the three months ended June 30, 20192020 compared to the same period of 2018.2019. Excluding the $13.6$1.1 million impact fromof movements in foreign exchange rates, International direct operatingSG&A expenses decreased $2.0$13.3 million, during the three months ended June 30, 2019 compared to the same period of 2018.Theor 21.8%. This decrease was primarilyis largely due to lower site lease expenses in Italy and Spain due to the non-renewal of contracts, partially offset by higher site lease expenses in countries experiencing revenue growth. International SG&A expenses increased $1.8 million during the three months ended June 30, 2019 compared to the same period of 2018. Excluding the $4.7 million impact from movements in foreign exchange rates, International SG&A expenses increased $6.5 million during the three months ended June 30, 2019 compared to the same period of 2018. The increase was primarily due to increased professional feesemployee compensation expense related to lower revenue, operating cost savings initiatives implemented by the investigationCompany and governmental support and wage subsidies received in China.response to COVID-19, with the largest SG&A decreases occurring in France and the U.K.
Six Months
International revenueRevenue decreased $69.3$215.3 million, or 40.3% during the six months ended June 30, 20192020 compared to the same period of 2018.2019. Excluding the $46.4$8.5 million impact fromof movements in foreign exchange rates, International revenue decreased $22.9$206.8 million, or 38.7%. As previously described, revenue in our Europe segment was adversely affected by COVID-19 during the six months ended June 30, 2019 compared to the same period of 2018, primarily due to an $18.1 million2020, resulting in a decrease in China revenues due to weakening economic conditions.revenue in each country in which we have operations, with the largest decreases occurring in France, the U.K, Spain, Switzerland, Sweden and Italy. The non-renewal of certain contracts in certain countries, including ItalySwitzerland and Spain also contributed to the overall decrease in revenue. These decreases wererevenue, which was partially offset by increases in revenue from digital display expansion in the United Kingdom and new contracts in Finland. International digitalFrance and Switzerland. Digital revenue was $162.5decreased $50.9 million, and $158.0or 35.6%, to $92.0 million for the six months ended June 30, 2019 and 2018, respectively.2020. Excluding the $10.7$2.9 million impact fromof movements in foreign exchange rates, total digital revenue increased $15.2decreased $48.0 million, or 33.6%.
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Direct operating expenses decreased $54.3 million, or 15.1%, during the six months ended June 30, 20192020 compared to the same period of 2018.
International2019. Excluding the $8.2 million impact of movements in foreign exchange rates, direct operating expenses decreased $34.7$46.0 million, or 12.8%. Direct operating expenses decreased in most countries in which we have operations, with the largest decreases occurring in Spain, Switzerland, the U.K, Norway and Sweden. The primary drivers of these decreases were lower site lease expense driven by lower revenue and renegotiated contracts with landlords and municipalities; lower production, subcontractor, cleaning and maintenance costs driven by lower revenue; lower direct operating expenses related to the non-renewal of certain contracts in Switzerland and Spain; and lower employee compensation expense related to operating cost savings initiatives implemented by the Company and governmental support and wage subsidies received in response to COVID-19. This was partially offset by higher fixed site lease expense related to the new contract in France.
SG&A expenses decreased $16.4 million, or 14.1%, during the six months ended June 30, 20192020 compared to the same period of 2018.2019. Excluding the $30.8$2.7 million impact fromof movements in foreign exchange rates, InternationalSG&A expenses decreased $13.7 million, or 11.8%. This decrease is largely due to lower employee compensation expense related to lower revenue, operating cost savings initiatives implemented by the Company and governmental support and wage subsidies received in response to COVID-19, with the largest SG&A decreases occurring in France and the U.K.
Other Results of Operations
(In thousands)Three Months Ended
June 30,		%Six Months Ended
June 30,		%
 20202019Change20202019Change
Revenue$7,860  $80,436  (90.2)%$51,192  $150,935  (66.1)%
Direct operating expenses1
15,356  42,208  (63.6)%56,806  85,609  (33.6)%
SG&A expenses1
7,834  18,488  (57.6)%25,078  34,614  (27.5)%
Segment Adjusted EBITDA2
(15,255) 20,141  (175.7)%(30,442) 31,361  (197.1)%
1Includes restructuring and other costs that are excluded from Segment Adjusted EBITDA.
2Our Latin America business represented ($5.7) million and $5.5 million of Other Segment Adjusted EBITDA for the three months ended June 30, 2020 and 2019, respectively, and ($3.8) million and $8.3 million of Other Segment Adjusted EBITDA for the six months ended June 30, 2020 and 2019, respectively.
Three Months
Revenue decreased $72.6 million, or 90.2%, during the three months ended June 30, 2020 compared to the same period of 2019. Excluding the $1.1 million impact of movements in foreign exchange rates, revenue decreased $71.5 million, or 88.9%, largely due to the sale of our Clear Media business. Revenue from our Latin America business was $3.4 million and $23.0 million for the three months ended June 30, 2020 and 2019, respectively. The decrease in Latin America revenue is due to the adverse impact of COVID-19 on our operations.
Direct operating expenses decreased $26.9 million, or 63.6%, during the three months ended June 30, 2020 compared to the same period of 2019. Excluding the $1.7 million impact of movements in foreign exchange rates, direct operating expenses decreased $3.9$25.2 million, or 59.6%, primarily due to the sale of our Clear Media business. Direct operating expenses from our Latin America business were $5.5 million and $11.1 million for the three months ended June 30, 2020 and 2019, respectively.
SG&A expenses decreased $10.7 million, or 57.6%, during the three months ended June 30, 2020 compared to the same period of 2019. Excluding the $1.1 million impact of movements in foreign exchange rates, SG&A expenses decreased $9.6 million, or 51.9%, primarily due to the sale of our Clear Media business. SG&A expenses from our Latin America business were $3.8 million and $6.4 million for the three months ended June 30, 2020 and 2019, respectively.
Six Months
Revenue decreased $99.7 million, or 66.1%, during the six months ended June 30, 20192020 compared to the same period of 2018.2019. Excluding the $3.6 million impact of movements in foreign exchange rates, revenue decreased $96.2 million, or 63.7%, largely due to the sale of our Clear Media business. Revenue from our Latin America business was $21.9 million and $41.6 million for the six months ended June 30, 2020 and 2019, respectively. The decrease wasin Latin America revenue is primarily due to lower site lease expenses in Italy and Spain due to the non-renewaladverse impact of contracts, partially offset by higher site lease expenses in countries experiencing revenue growth. International SG&ACOVID-19 on our operations.
Direct operating expenses decreased $5.4$28.8 million, or 33.6%, during the six months ended June 30, 20192020 compared to the same period of 2018.2019. Excluding the $10.3$3.9 million impact fromof movements in foreign exchange rates, International direct operating expenses decreased $24.9 million, or 29.1%, primarily due to the sale of our Clear Media business. Direct operating expenses from our Latin America business were $16.4 million and $21.6 million for the six months ended June 30, 2020 and 2019, respectively.
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SG&A expenses increased $4.9decreased $9.5 million, or 27.5%, during the six months ended June 30, 20192020 compared to the same period of 2018. The increase was2019. Excluding the $2.0 million impact of movements in foreign exchange rates, SG&A expenses decreased $7.6 million, or 21.9%, primarily due to an increase in bad debt expense in Chinathe sale of our Clear Media business. SG&A expenses from our Latin America business were $9.5 million and higher costs related to$11.8 million for the investigation in China.six months ended June 30, 2020 and 2019, respectively.

Reconciliation of Segment Operating Income to Consolidated Operating Income
(In thousands)Three Months Ended
June 30,		 Six Months Ended
June 30,
 2019 2018 2019 2018
Operating income:       
Americas$91,128
 $78,662
 $142,199
 $116,182
International30,767
 53,287
 21,942
 42,399
Other operating income (expense), net1,270
 929
 (2,252) 875
Corporate and other (1)
(40,711) (38,889) (70,324) (75,315)
Consolidated operating income$82,454
 $93,989
 $91,565
 $84,141
(1)Corporate and other includes expenses related to Americas and International as well as overall executive, administrative and support functions.

LIQUIDITY AND CAPITAL RESOURCES

Cash Flows

The following discussion highlights cash flow activities during the six months ended June 30, 20192020 and 2018:2019:
(In thousands)Six Months Ended June 30,
 20202019
Net cash provided by (used for):  
Operating activities$(24,422) $55,135  
Investing activities$149,576  $(76,687) 
Financing activities$138,392  $208,328  
 (In thousands)
Six Months Ended June 30,
 2019 2018
Net cash provided by (used for):   
Operating activities$55,135
 $65,868
Investing activities$(76,687) $(58,263)
Financing activities$208,328
 $27,600
Operating Activities
Net cash provided byused for operating activities was $55.1$24.4 million during the six months ended June 30, 20192020 compared to $65.9$55.1 million of net cash provided by operating activities during the six months ended June 30, 2018. The decrease2019.
•During the six months ended June 30, 2020, net loss as adjusted for non-cash and non-operating items, most notably depreciation and amortization, impairment charges and gain on disposal of operating and other assets, resulted in $215.2 million of net cash providedoutflows from operating activities. This was partially offset by operating activities waschanges in working capital balances, which resulted in $190.7 million of net cash inflows, primarily driven by a decrease in accounts receivable as collections exceeded sales due to the adverse impact of COVID-19.
•During the six months ended June 30, 2019, net incomeloss as adjusted for non-cash and non-operating items, primarilymost notably depreciation and amortization, and deferred taxes, partiallyresulted in $6.6 million of net cash outflows from operating activities. This was more than offset by an increase in net cash provided by operating activities related to changes in working capital balances, most notably accrued interest.which resulted in $61.8 million of net cash inflows, driven primarily by a change in interest payment terms from weekly to semi-annually as a result of the Separation.
        Cash paid for interest decreased $6.0 million, to $155.2 million during the six months ended June 30, 2019 decreased $26.12020 compared to $161.2 million compared toduring the same period of 2018 due to a change in interest payment terms as a result of the Separation, partially offset by the refinancing of the 7.625% CCWH Senior Subordinated Notes due 2020. Prior to the Separation, interest on the CCWH Senior Notes and CCWH Subordinated Notes was payable to the Trustee weekly in arrears. Following the Separation, interest is payable to the Trustee semi-annually, on February 15 and August 15 of each year, beginning on August 15, 2019.
Investing Activities
Net cash used forprovided by (used for) investing activities primarily reflects the April 2020 sale of $76.7Clear Media, resulting in $216.0 million during the six months ended June 30, 2019 primarily reflectedof net proceeds, which is net of cash retained by Clear Media, and our capital expenditures of $79.3 million. We spent $27.3 million in our Americas segment primarily related to the construction of newas follows:
(In thousands)Six Months Ended June 30,
 20202019
Americas(1)
$31,896  $27,338  
Europe(2)
19,422  34,425  
Other(3)
8,385  9,059  
Corporate(4)
7,260  8,459  
Total$66,963  $79,281  
(1)Construction and sustaining activities for billboards and other out-of-home advertising structures,displays, including digital boards $43.5 million in
(2)Construction and sustaining activities for our International segment primarily related to street furniture and other out-of-home advertising displays, including digital displays,boards
(3)Transit advertising structure additions and $8.5 millionpurchase of concession rights in Corporate primarily relatedChina (prior to the build-outsale of the new San Antonio office andClear Media on April 28, 2020)
(4)Build-out of IT infrastructure due the Separation.
Net cash used for investing activities of $58.3 million during the six months ended June 30, 2018 primarily reflected our capital expenditures of $61.3 million. We spent $24.4 million in our Americas segment primarily related to the construction of new advertising structures, including digital boards, $35.5 million in our International segment primarily related to street furniture and transit advertising structures, including digital displays, and $1.4 million in Corporate primarily related toSeparation, as well as equipment and software purchases.

purchases
Financing Activities
Net cash provided by financing activities during the six months ended June 30, 2020 primarily reflected the cautionary draw of $208.3$150.0 million that we made under our Revolving Credit Facility to enhance liquidity and preserve financial flexibility during the economic downturn resulting from COVID-19, partially offset by principal payments of $10.0 million on our Term Loan Facility in accordance with the terms of the Senior Secured Credit Agreement.
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Net cash provided by financing activities during the six months ended June 30, 2019 reflected primarily reflected net transfers of $159.2 million in cash from iHeartCommunications, including settlement of the Due from iHeartCommunications Note upon consummation of the Separation, as well as $43.8 million of proceeds from the issuance of mandatorily redeemablemandatorily-redeemable preferred stock, net of fees and expenses. Additionally, net cash provided by financing activities increased by $35.0 million due to the refinancing of the CCWH Senior Subordinated Notes, partially offset by $26.8 million of debt issuance costs.
Net cash used for financing activities of $27.6 million during the six months ended June 30, 2018 primarily reflected net transfers of $60.8 million in cash from iHeartCommunications, which represents the activity in the “Due from iHeartCommunications” account, partially offset by cash dividends paid of $30.6 million.  
iHeart Chapter 11 Cases and the Separation
On March 14, 2018, iHeartMedia, which, prior to the Separation was the parent company of the Company and certain of its subsidiaries (collectively, the “Debtors”), filed voluntary petitions for reorganization (the “iHeart Chapter 11 Cases”) under Chapter 11 of the United States Bankruptcy Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the Southern District of Texas, Houston Division (the “Bankruptcy Court”). The Company and its direct and indirect subsidiaries did not file voluntary petitions for reorganization under the Bankruptcy Code and are not Debtors in the iHeart Chapter 11 Cases.
On May 1, 2019 (the “Effective Date”), the conditions to the effectiveness of the Plan of Reorganization were satisfied and iHeartMedia emerged from Chapter 11 through a series of transactions (the “Separation”) through which the Company and its subsidiaries (collectively, the “Outdoor Group”) were separated from, and ceased to be controlled by, iHeartMedia and its subsidiaries (the “iHeart Group”).
Merger Agreement
On March 27, 2019, as contemplated by the Settlement Agreement and iHeartMedia’s modified fifth amended Plan of Reorganization (the “iHeart Plan of Reorganization”), which was confirmed by the United States Bankruptcy Court for the Southern District of Texas (the "Bankruptcy Court") on January 22, 2019, the Company (then known as Clear Channel Holdings, Inc.) and its subsidiary, Clear Channel Outdoor Holdings, Inc., entered into an Agreement and Plan of Merger (the “Merger Agreement”). On May 1, 2019, Clear Channel Outdoor Holdings, Inc. merged with and into the Company, with the Company surviving the Merger and changing its name to Clear Channel Outdoor Holdings, Inc.
In connection with the Merger, each share of the Clear Channel Outdoor Holdings, Inc.’s Class A common stock (the “Old CCOH Class A Common Stock”) issued and outstanding immediately prior to the effective time of the Merger (other than shares of Old CCOH Class A Common Stock held by the Company or any direct or indirect wholly-owned subsidiary of the Company) converted into one share of common stock of the Company (“Common Stock”). The shares of the Old CCOH Class A Common Stock held by the Company and its subsidiaries were canceled and retired, and no shares of Common Stock were exchanged for such shares. All of the outstanding shares of the Company’s common stock outstanding, all held by iHeartCommunications, immediately before the Merger were converted into 325,726,917 shares of Common Stock. As a result, immediately after the Merger, the Company had a single class of common stock, and the pre-Merger Old CCOH Class A common stockholders (other than the Company and its subsidiaries) owned the same percentage of the Company that they owned of Clear Channel Outdoor Holdings, Inc. immediately before the Merger.
Separation Agreement
On March 27, 2019, the Company, Clear Channel Outdoor Holdings, Inc., iHeartMedia and iHeartCommunications entered into a Settlement and Separation Agreement (the “Separation Agreement”) governing the terms of the separation of the Company as the surviving corporation under the Merger and each subsidiary of the Company after giving effect to the Transactions (the Company together with its subsidiaries, the “Outdoor Group”) from iHeartMedia and each of its subsidiaries immediately after giving effect to the Transactions (iHeartMedia together with its subsidiaries, the “iHeart Group”).
Pursuant to the Separation Agreement, on May 1, 2019, (i) iHeartMedia and iHeartCommunications caused each relevant member of the iHeart Group to assign, transfer, convey and deliver to iHeartCommunications, and iHeartCommunications will transfer to the Company or the relevant member of the Outdoor Group, any and all direct or indirect title and interest in the assets that are primarily related to or used primarily in connection with the Outdoor Business (after giving effect to the Transactions) (such assets, the “Outdoor Assets”), excluding certain excluded assets, and (ii) the Company and Clear Channel Outdoor Holdings, Inc. caused each relevant member of the Outdoor Group to transfer to the relevant member of the iHeart Group any and all direct or indirect title and interest in the assets of the business conducted by the iHeart Group after giving effect to the Transactions, including the radio business (the “iHeart Business” and such assets, the “iHeart Assets”).

At the same time as the transfer of the Outdoor Assets from the iHeart Group to the Outdoor Group, the members of the Outdoor Group assumed the liabilities associated with the Outdoor Business, subject to certain exceptions as set forth in the Separation Agreement. At the same time as the transfer of the iHeart Assets from the Outdoor Group to the iHeart Group, the members of the iHeart Group assumed the liabilities associated with the iHeart Business, subject to certain exceptions as set forth in the Separation Agreement.
The Separation Agreement provided for cancellation of the note payable by iHeartCommunications to the Company (the “Due from iHeartCommunications Note”) and that any agreements or licenses requiring royalty payments to the iHeart Group by the Outdoor Group for trademarks or other intellectual property terminated effective as of December 31, 2018. It also provided for (i) the repayment of the post-petition intercompany balance outstanding in favor of the Debtors as of December 31, 2018, which was equal to $21.6 million as of that date and (ii) the waiver of the set-off value of any royalties and IP license fees owed to iHeartCommunications equal to approximately $31.8 million from March 14, 2018 through December 31, 2018, such that the resulting intercompany balance on such date was $10.2 million in favor of the Company. Pursuant to an amendment to the Separation Agreement, the Company offset the $149.0 million amount owed to us by the iHeart Group on May 1, 2019 by $52.1 million (which is the additional intercompany liability incurred from January 1, 2019 through March 31, 2019), resulting in a total net payment to the Company of approximately $107.0 million on May 1, 2019 (including the $10.2 million payment discussed above). iHeartCommunications paid the Company the intercompany liability incurred from April 1, 2019 through May 1, 2019 of $8.8 million after the Separation. In addition, pursuant to the Separation Agreement  the Company received (i) the trademarks listed on the schedules to the Separation Agreement and (ii) reimbursement of the reasonable expenses of legal counsel and financial advisors incurred on or prior to May 1, 2019 of the Company’s board of directors or the special committee of the Company’s board of directors, in each case, to the extent incurred in connection with the Separation.
Anticipated Cash Requirements
FollowingTrends and Uncertainties
        COVID-19's extensive impact on the Separation,global advertising market had a significant negative impact on our primary sourcesresults of operations in both our Americas and Europe segments during the second quarter of 2020.
Throughout the second quarter, we took measures to increase our liquidity areand preserve and strengthen our financial flexibility, including the following:
•Renegotiated contracts with landlords and municipalities to better align fixed site lease expenses with reductions in revenue;
•Cut compensation costs through reductions in salaries, bonuses and employee hours, as well as hiring freezes and furloughs;
•Obtained European governmental support and wage subsidies;
•Eliminated and reduced discretionary expenses;
•Deferred capital expenditures; and
•Deferred site lease and other payments to optimize working capital levels.
We believe that our cash on hand cash flow from operations and additional availability under our receivables-based credit facility. As of June 30, 2019, we had $372.5 million of cash on our balance sheet, including $146.1 million of cash held outside the U.S. by our subsidiaries, a portion of which is held by non-wholly owned subsidiaries or is otherwise subject to certain restrictions and not readily accessible to us. Excess cash from our foreign operations may be transferred to our operations in the United States if needed to fund operations in the United States, subject to the foreseeable cash needs of our foreign operations. If any excess cash held by our foreign subsidiaries were needed to fund operations in the U.S., we could presently repatriate available funds without a requirement to accrue or pay U.S. taxes. As a result of significant deficits, as calculated for tax law purposes, in our foreign earnings and profits, we have flexibility to make future cash distributions as non-taxable returns of capital. Additionally, as a result of U.S. tax reform, future dividend distributions from our international subsidiaries are exempt from U.S. federal income tax beginning January 1, 2018.

Our primary uses of liquidity are for our working capital, capital expenditures, debt service, other funding requirements and dividend payments to be due to the investor in the Preferred Stock. On February 12, 2019, our subsidiary CCWH refinanced its CCWH Subordinated Notes, which matured in March 2020,facilities, combined with an aggregate principal amount of $2,235.0 million of New CCWH Subordinated Notes, which are scheduled to mature in February 2024. On July 30, 2019, we issued 100 million shares of common stock in a public offering, and we will use the net proceeds from the offering to redeem approximately $333.5 million aggregate principal amount of New CCWH Subordinated Notes on August 22, 2019. As of June 30, 2019, we had debt maturities totaling $0.1 million, $375.3 million and $0.3 million in 2019, 2020 and 2021.
A substantial amount of our cash requirements are for debt service obligations. During the six months ended June 30, 2019, we spent $161.2 million of cash on interest on our debt. We anticipate having approximately $161.0 million of cash interest payment obligations in the second half of 2019. Our significant interest payment obligations reduce our financial flexibility, make us more vulnerable to changes in operating performance and economic downturns generally, reduce our liquidity over time and could negatively affect our ability to obtain additional financing in the future.
Based on our current and anticipated levels of operations and conditions in our markets, we believe that cash on hand, cash flows from operations and borrowing capacity under our receivables-based credit facilitycontinued savings initiatives and additional sources of liquidity, as discussed below within "Sources of Capital and Liquidity," will enable us to meet our working capital, capital expenditure, debt service and other funding requirements including the debt service on the CCWH Senior Notes, the New CCWH Subordinated Notes and the CCIBV Senior Notes, for at least the next 12 months. We believe our long-term plans, which include promoting outdoor media spending, capitalizing on our diverse geographic and product opportunities and the continued deployment of digital displays and addressing our capital structure and reducing leverage, will enable us to continue generating cash flows from operations sufficient to meet our liquidity and funding requirements in the long term. However, our anticipated results are subject to significant uncertainty.uncertainty and may be affected by events beyond our control, including prevailing economic, financial and industry conditions. Our ability to fundmeet our working capital, capital expenditures, debt service and other obligationsfunding requirements depends on the impacts from these uncertainties, including the impacts related to COVID-19, our future operating performance, our cash flow from operations, and our ability to manage our liquidity and obtain supplemental liquidity, if necessary, and managenecessary. Additional factors may emerge that could cause our liquidity.

Historically, our cash management arrangement with iHeartCommunications had been our only committed external source of liquidity. Now that our business is separated from iHeartCommunications, we are more dependent upon our abilityexpectations to generate cash or obtain additional financing to meet our liquidity needs. We may need to obtain additional financing, from banks or other lenders, or through public offerings or private placements of debt or equity, strategic relationships or other arrangements, or from a combination of these sources, in the future. There can be no assurance that financing alternatives will be available in sufficient amounts or on terms acceptable to us in the future due to market conditions, our financial condition, our liquidity constraints, our lack of history operating as a company independent from iHeartCommunications or other factors, many of which are beyond our control. Even if financing alternatives are available to us, we may not find them suitable or at comparable interest rates to the indebtedness being refinanced, and our annual cash interest payment obligations could increase further. 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. In addition to the need to refinance our various indebtedness at or before maturity, ifchange. 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 weremay take further cost-cutting measures beyond those discussed above to generate short-term liquidity in compliancethe event of an unanticipated need for cash. In addition, we regularly consider, and enter into discussions with the covenants contained in our materiallenders related to, potential financing agreements asalternatives, which may include supplemental liquidity through issuances of June 30, 2019.secured or unsecured debt or other capital-raising transactions.
We frequently evaluate strategic opportunities both within and outside our existing lines of business. Webusiness, and we expect from time to time to dispose of certain businesses and may pursue acquisitions. These dispositions or acquisitions could be material. Specifically, as we continue to focus on operational efficiencies that drive greater margin and cash flow, we will continue to review and consider opportunities to unlock shareholder value, which may include, among other things, potential asset or operational divestitures intended to deleverage and increase free cash flow.
Sources of Capital and Liquidity
        Our primary sources of liquidity are cash on hand, cash flow from operations, our Senior Secured Credit Facilities and our Receivables-Based Credit Facility. In March 2020, we borrowed $150.0 million under our Revolving Credit Facility to enhance liquidity and preserve financial flexibility, and in May 2020 we received $216.0 million of net cash proceeds from the sale of our Clear Media business, contributing to an increase in our cash and cash equivalents balance. As of June 30, 2019 and December 31, 2018,2020, we had $662.1 million of cash on our balance sheet, including $316.7 million of cash held outside the following debt outstanding, cashU.S. by our subsidiaries. Additionally, we had excess availability of $15.7 million under our Receivables-Based Credit Facility and cash equivalents, and amounts due (to)/from iHeartCommunications:$4.8 million under our Revolving Credit Facility, subject to limitations in the CCWH Senior Notes Indenture.
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(In millions)June 30, 2019 December 31, 2018
Clear Channel Worldwide Holdings Senior Notes due 2022$2,725.0
 $2,725.0
Clear Channel Worldwide Holdings Senior Subordinated Notes due 2020(1)
—
 2,200.0
Clear Channel Worldwide Holdings Senior Subordinated Notes due 2024(1)
2,235.0
 —
Receivables-based Credit Facility due 2023(2)
—
 —
Revolving Loan with iHeartCommunications due 2022(3)
—
 —
Clear Channel International B.V. Senior Notes due 2020375.0
 375.0
Other debt4.0
 3.9
Original issue discount(1.0) (0.7)
Long-term debt fees(41.6) (25.9)
Total debt5,296.4
 5,277.3
Less:  Cash and cash equivalents372.5
 182.5
Less:  Due from iHeartCommunications—
 154.8
Less: Due to iHeartCommunications, post iHeart Chapter 11 Cases—
 (21.6)
 $4,923.9
 $4,961.6
(1)On February 4, 2019, CCWH, delivered a conditional notice of redemption calling all of its outstanding $2,200.0 million CCWH Subordinated Notes for redemption on March 6, 2019. The redemption was conditioned on the closing of the offering of $2,235.0 million of New CCWH Subordinated Notes. At the closing of such offering on February 12, 2019, CCWH deposited with the trustee for the CCWH Subordinated Notes a portion of the proceeds from the new notes in an amount sufficient to pay and discharge the principal amount outstanding, plus accrued and unpaid interest on the CCWH Subordinated Notes to, but not including, the redemption date. CCWH irrevocably instructed the trustee to apply such funds to the full payment of the CCWH Subordinated Notes on the redemption date. Concurrently therewith, CCWH elected to satisfy and discharge the indentures governing the CCWH Subordinated Notes in accordance with their terms and the trustee acknowledged such discharge and satisfaction. As a result of the satisfaction and discharge of the indentures, CCWH and the guarantors of the CCWH Subordinated Notes have been released from their remaining obligations under the indentures and the CCWH Subordinated Notes. On July 23, 2019, CCWH issued a conditional notice of redemption to redeem a portion of the New CCWH Subordinated Notes, using the proceeds of a public offering of common stock. On July 30, 2019, the conditions to the redemption were satisfied, and the notice of redemption became irrevocable. Pursuant to the notice of redemption, as amended at the closing of the offering, approximately $333.5 million aggregate principal amount of New CCWH Subordinated Notes will be redeemed on August 22, 2019.


(2)As of June 30, 2019, the receivables-based credit facility had $80.7 million of letters of credit outstanding and a borrowing limit of $125.0 million, resulting in $44.3 million of excess availability. Certain additional restrictions, including a springing financial covenant, take effect at decreased levels of excess availability.
(3)On May 1, 2019, in accordance with the Separation agreement, Clear Channel Outdoor ("CCO") entered into a three-year $200.0 million revolving loan agreement with iHeartCommunications. As of June 30, 2019, no amounts were drawn under the iHeartCommunications Line of Credit. On July 30, 2019, in connection with the consummation of a public offering of common stock, we terminated the iHeartCommunications Line of Credit.
We may from timeAdditionally, we have recently taken several incremental measures to time repay our outstanding debt or seek to purchase our outstanding equity securities.  Such transactions, if any, will depend on prevailing market conditions,increase our liquidity requirements, contractualand preserve and strengthen our financial flexibility:
•In May 2020, we issued the CCIBV Note through our indirect wholly-owned subsidiary and then transferred this note to the holder of our mandatorily-redeemable preferred stock (the "Preferred Stock") in exchange for the Preferred Stock, which remains outstanding and is held by one of our affiliates and eliminated upon consolidation. This transfer of the Preferred Stock to an affiliate effectively eliminated certain restrictions and other factors.on our flexibility to potentially pursue liquidity-enhancing capital structure transactions.
Clear Channel Worldwide Holdings Senior Notes
As of•In June 2020, we amended our senior secured credit agreement, thereby suspending the springing financial covenant through June 30, 2019,2021 and delaying the CCWH senior notes represented $2.7 billion aggregate principal amountscheduled financial covenant step-down until March 31, 2022. In addition, for all reporting periods through September 30, 2021, we are required to maintain minimum cash on hand and availability under our receivables-based credit facility and Revolving Credit Facility of indebtedness outstanding, which consisted$150 million. We expect this amendment to support our efforts to manage through the uncertainties caused by the unprecedented COVID-19 situation while maintaining compliance with the terms of $735.75our Revolving Credit Facility.
•In August 2020, we issued $375.0 million aggregate principal amount of 6.5% Series ACCIBV Senior Secured Notes, due 2022 (the “Series2025, through our indirect wholly-owned subsidiary. A CCWH Senior Notes”)portion of these proceeds was used to pay the CCIBV Note in full, to include paid-in-kind interest, and $1,989.25 million aggregate principalthe remainder of the proceeds will be used for general corporate purposes, including to fund the operating expenses and capital expenditures of our Europe segment.
Uses of Capital and Liquidity
Our primary uses of liquidity are for our working capital used to fund the operations of the business, capital expenditures and debt service.
The primary driver of our capital expenditure requirements is the construction of new advertising structures, including the deployment of digital displays in accordance with our long-term strategy to digitize our network as an alternative to traditional methods of displaying our clients' advertisements. As previously described, in light of the rapidly-evolving impact of COVID-19 and the uncertainty around the related economic downturn, we deferred capital expenditures during the second quarter of 2020, resulting in a decrease in our capital expenditures for the second quarter of 2020 as compared to the same period of 2019.
A substantial amount of 6.5% Series Bour cash requirements is for debt service obligations. In April 2020, we elected to change the payment terms for interest on our Senior Secured Credit Facilities from monthly to every three months, and during the six months ended June 30, 2020, we spent $155.2 million of cash to pay interest on our debt. After giving effect to the issuance of the CCIBV Senior Secured Notes, we anticipate having approximately $166.4 million of cash interest payment obligations during the remainder 2020 and $360.3 million of cash interest payment obligations in 2021. Additionally, during the six months ended June 30, 2020 we made $10.0 million in principal payments on the Term Loan Facility, and we anticipate making $10.0 million of additional principal payments on the Term Loan Facility during the remainder of the year. Our next material debt maturity is in 2024 when $1.9 billion of CCWH Senior Notes due 2022 (the “Series B CCWH Senior Notes” and together with$150.0 million outstanding under the Series A CCWH Senior Notes, the “CCWH Senior Notes”). The CCWH Senior NotesRevolving Credit Facility are guaranteed by us, Clear Channel Outdoor, Inc.,due. Refer to Note 4 to our Consolidated Financial Statements included in Item 1 of Part I of this Quarterly Report on Form 10-Q for a subsidiary of ours (“CCOI”), and certaindetail of our directdebt outstanding as of June 30, 2020.
We also have future cash obligations under various types of contracts, including non-cancelable operating leases and indirect subsidiaries.
 The Series A CCWH Senior Notes indentureother non-cancelable contracts. As previously described, we have successfully renegotiated contracts with landlords and municipalities in both the Series B CCWH Senior Notes indenture restrict our ability to incur additional indebtedness but permit us to incur additional indebtedness based on an incurrence test. Under this test,U.S. and Europe in order to incur additional indebtedness, our debtbetter align fixed site lease expenses with reductions in revenue as we continue to adjusted EBITDA ratios (as definedbe impacted by the indentures) must be lower than 7.0:1COVID-19, and 5.0:1 for total debtwe have also deferred site lease and senior debt, respectively, and in order to incur additional indebtedness that is subordinatedother payments when possible.
Debt Covenants
The Senior Secured Credit Agreement contains a springing financial covenant, applicable solely to the CCWHRevolving 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 June 30, 2021. In June 2020, we amended the Senior Notes, our debtSecured Credit Agreement to adjusted EBITDA ratios (as defined bysuspend the indentures) must be lower than 7.0:1. The indentures contain certain other exceptions that allow us to incur additional indebtedness. The Series B CCWH Senior Notes indenture also restricts our ability to pay dividends, but permits us to pay dividendsspringing financial covenant of the Revolving Credit Facility from the proceedsthird quarter of indebtedness or2020 through the proceeds from asset sales if our debt to adjusted EBITDA ratios (as defined bysecond quarter of 2021. This amendment also delays the indenture) are lower than 7.0:1 and 5.0:1 for total debt and senior debt, respectively. The Series B CCWH Senior Notes indenture also contains certain other exceptions that allow us to pay dividends, including (i) $525.0 million of dividends made pursuant to general restricted payment baskets and (ii) dividends made using proceeds received upon a demand by us of amounts outstanding under the Due from iHeartCommunications Note. We have used substantially alltiming of the $525.0 million general restricted payment baskets infinancial covenant step-down of the Series B CCWH Senior Notes indenture. The Series A CCWH Senior Notes indenture does not limit our ability to pay dividends. 
Our consolidatedfirst lien net leverage ratio defined as totaluntil the first quarter of 2022. During the suspension period, 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, and we agreed not to make voluntary restricted payments with certain exceptions. Our first lien leverage ratio, which is calculated by dividing first lien debt divided by EBITDA (as defined by the CCWH Senior Notes indentures)Secured Credit Agreement) for the preceding four quarters, was 8.8:16.55 to 1.00 as of June 30, 2019,2020.
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First lien debt and senior leverage ratio, defined as senior debt divided by EBITDA (as defined byin the CCWH Senior Notes indentures)Secured Credit Agreement) are presented herein because they are material components of the first lien net leverage ratio contained in the Senior Secured Credit Agreement. The following table presents a calculation of our first lien debt for the preceding four quarters was 4.5:1 as ofended June 30, 2019. 2020:
Four Quarters Ended
(In millions)June 30,
2020
Term Loan Facility$1,985.0 
Revolving Credit Facility150.0 
Clear Channel Outdoor Holdings 5.125% Senior Notes Due 20271,250.0 
Other debt5.4 
Less: Cash and cash equivalents(662.1)
First lien debt(1)
$2,728.3 
(1)Due to rounding, the total may not equal the sum of the line items in the table above.
As required by the definition of EBITDA in the CCWH Senior Notes indentures,Secured Credit Agreement, our EBITDA (as defined in the Senior Secured Credit Agreement) for the preceding four quarters of $607.4$416.3 million is calculated as operating income (loss) before depreciation and amortization, impairment charges and gains and losses on acquisitions and divestitures plus share-based compensation, and is further adjusted for the following: (i) costs incurredinterest income; (ii) charges, expenses or reserves in connection withrespect of any restructuring, relocation, redundancy or severance the closure and/expense or consolidation of facilities, retention charges, consulting feesone-time compensation charges; (iii) certain adjustments for pro forma "run rate" cost savings, operating expense reductions and other permitted activities; (ii) extraordinary, non-recurringsynergies related to acquisitions, dispositions and other specified transactions or unusual gainsrelated to restructuring initiatives, cost savings initiatives, entry into new contracts or losses or expenses; (iii) non-cash charges;other initiatives; and (iv) various other items. Because our consolidated leverage ratio exceeded the limit in the incurrence tests described above, we are not currently permitted to incur additional indebtedness using the incurrence test in the Series A CCWH Senior Notes indenture and the Series B CCWH Senior Notes indenture, and we are not currently permitted to pay dividends from the proceeds of indebtedness or the excess proceeds from asset sales under the Series B CCWH Senior Notes indenture. There are other exceptions in these indentures that allow us to incur additional indebtedness and pay dividends.

The following table reflects a reconciliation of EBITDA (as defined by the CCWH Senior Notes indentures)Secured Credit Agreement) to operating income and net cash provided by operating activities for the four quarters ended June 30, 2019:2020:
Four Quarters Ended
(In millions)June 30,
2020
EBITDA (as defined by the Senior Secured Credit Agreement)
$416.3 
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(17.0)
Cost savings initiatives(99.4)
Gain on disposal of operating and other assets, net, and other items70.8 
Less: Depreciation and amortization, Impairment charges, Share-based compensation and Interest income(442.4)
Operating loss(1)
(71.7)
Plus: Depreciation and amortization, Impairment charges, Loss (gain) on disposal of operating and other assets, net and Share-based compensation361.7 
Less: Interest expense, net(375.6)
Less: Current income tax expense(22.2)
Less: Other expense, net(29.7)
Adjustments to reconcile consolidated net loss to net cash provided by (used for) operating activities (including Credit losses, Amortization of deferred financing charges and note discounts, net, Foreign exchange transaction loss and Other reconciling items, net)40.8 
Change in operating assets and liabilities, net231.6 
Net cash provided by operating activities(1)
$135.0 
 Four Quarters Ended
(In millions) June 30, 2019
EBITDA (as defined by the CCWH Senior Notes indentures)
$607.4
Less adjustments to EBITDA (as defined by the CCWH Senior Notes indentures): 
Costs incurred in connection with severance, the closure and/or consolidation of facilities, retention charges, consulting fees and other permitted activities(16.9)
Extraordinary, non-recurring or unusual gains or losses or expenses (as referenced in the definition of EBITDA in the CCWH Senior Notes indentures)(4.4)
Non-cash charges(5.6)
Other items9.3
Less: Depreciation and amortization, Impairment charges, Gains and losses on acquisitions and divestitures and Share-based compensation expense(330.6)
Operating income259.2
Plus: Depreciation and amortization, Impairment charges, Gain (loss) on disposal of operating and fixed assets and Share-based compensation expense330.3
Less: Interest expense(416.7)
Plus: Interest income on Due from iHeartCommunications0.2
Less: Current income tax expense(58.3)
Plus: Other income, net(28.7)
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 and Other reconciling items, net)38.0
Change in assets and liabilities, net of assets acquired and liabilities assumed52.5
Net cash provided by operating activities$176.5
Clear Channel Worldwide Holdings Senior Subordinated Notes
As of June 30, 2019,(1)Due to rounding, the New CCWH Senior Subordinated Notes represented $2,235.0 million aggregate principal amount of indebtedness outstanding. On February 4, 2019, CCWH delivered a conditional notice of redemption calling all of its outstanding CCWH Subordinated Notes for redemption on March 6, 2019. The redemption was conditioned ontotal may not equal the closingsum of the offering of $2,235.0 million of New CCWH Subordinated Notes. At the closing of such offering on February 12, 2019, CCWH deposited with the trustee for the CCWH Subordinated Notes a portion of the proceeds from the new notes in an amount sufficient to pay and discharge the principal amount outstanding, plus accrued and unpaid interest on the CCWH Subordinated Notes to, but not including, the redemption date. CCWH irrevocably instructed the trustee to apply such funds to the full payment of the CCWH Subordinated Notes on the redemption date. Concurrently therewith, CCWH elected to satisfy and discharge the indentures governing the CCWH Subordinated Notes in accordance with their terms and the trustee acknowledged such discharge and satisfaction. As a result of the satisfaction and discharge of the indentures, CCWH and the guarantors of the CCWH Subordinated Notes have been released from their remaining obligations under the indentures and the CCWH Subordinated Notes.
The New CCWH Subordinated Notes were issued pursuant to an indenture, dated as of February 12, 2019 (the “New CCWH Notes Indenture”), among Clear Channel Worldwide, the Company, CCOI and the other guarantors party thereto (collectively with the Company and CCOI, the “Guarantors”), and U.S. Bank National Association, as trustee, paying agent, registrar and transfer agent (the “Trustee”). The New CCWH Subordinated Notes mature on February 15, 2024 and bear interest at a rate of 9.25% per annum. Prior to the Separation, interest will be payable to the Trustee weekly in arrears. Following the Separation, interest will be payable to the Trustee semi-annually. In each case, interest will be payable to the holders of the New CCWH Notes Subordinated Notes semi-annually on February 15 and August 15 of each year, beginning on August 15, 2019.

The New CCWH Subordinated Notes and the guarantees of the New CCWH Subordinated Notes are unsecured senior subordinated obligations that rank pari passu in right of payment to all senior subordinated indebtedness of Clear Channel Worldwide and the Guarantors, junior to all senior indebtedness of CCWH and the Guarantors, including the CCWH Senior Notes, and senior to all future subordinated indebtedness of CCWH and the Guarantors that expressly provides that it is subordinated to the New CCWH Subordinated Notes. Following the satisfaction of certain conditions, including that the CCWH Senior Notes are no longer outstanding and at least a portion of such notes has been refinanced with senior secured indebtedness, the New CCWH Subordinated Notes and the guarantees of the New CCWH Subordinated Notes will cease to be subordinated obligations and thereafter will rank pari passu in right of payment with all senior indebtedness of CCWH and the Guarantors (the “step-up”). There can be no assurance that the step-up will ever occur and that the New CCWH Subordinated Notes and the guarantees will ever cease to be subordinated indebtedness of CCWH and the Guarantors.
Clear Channel Worldwide may redeem the New CCWH Subordinated Notes at its option, in whole or part, at any time prior to February 15, 2021, at a price equal to 100% of the principal amount of the New CCWH Subordinated Notes redeemed, plus a make-whole premium, plus accrued and unpaid interest to the redemption date. CCWH may redeem the New CCWH Subordinated Notes, in whole or in part, on or after February 15, 2021, at the redemption prices set forthline items in the New CCWH Notes Indenture plus accrued and unpaid interest to the redemption date. At any time prior to February 15, 2021, CCWH may elect to redeem up to 40%table above.
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In addition, CCWH may redeem up to 20%each of the aggregate principal amount of the New CCWH Subordinated Notes at any time prior to February 15, 2021, using the net proceeds from certain other equity offerings at 103% of the principal amount of the New CCWH Subordinated Notes. CCWH will be permitted to use these two redemption options concurrently but will not be permitted to redeem, in the aggregate, more than 40% of the principal amount of the New CCWH Subordinated Notes pursuant to these options.
The New CCWH Notes Indenture containsour debt agreements includes negative covenants that, subject to significant exceptions, limit the Company’sour ability and the ability of itsour restricted subsidiaries to, among other things: (i)things, incur or guarantee additional debtindebtedness or issue certain preferred stock; (ii) redeem, purchase or retire subordinated debt; (iii) makeincur 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)liens; engage in mergers, consolidations, liquidations and dissolutions; sell certain assets, including capital stock of the Company’sour subsidiaries; (viii) designate the Company’s subsidiaries as unrestricted subsidiaries, (ix) pay dividends redeemand distributions or repurchase capital stockstock; make certain investments, loans, or make other restricted payments; and (x) in the event that the step-up occurs and New CCWH Subordinated Notes cease to beadvances; redeem, purchase or retire subordinated incur certain liens.
Receivables Based Credit Facility Due 2023
During the second quarter of 2018, CCOI, a subsidiary of ours, entered into a receivables-based credit facility with an aggregate principal amount of $125.0 million. The receivables-based credit facility may be used for working capital needs, to issue letters of credit and for other general corporate purposes. 
As of June 30, 2019, the facility had $80.7 million of letters of credit outstanding and a borrowing limit of $125.0 million, resulting in $44.3 million of excess availability.
Borrowings under the receivables-based credit facility will mature, and lending commitments thereunder will terminate, on the earlier of (a) June 1, 2023 and (b) 90 days prior to the maturity date of any indebtedness of the Company or any of its direct or indirect subsidiaries in an aggregate principal amount outstanding in excess of $250 million (other than the CCIBV Senior Notes).
CCIBV Senior Notes
During the fourth quarter of 2015, CCIBV, an international subsidiary of ours, issued $225.0 million aggregate principal amount outstanding of the CCIBV Senior Notes). During the third quarter of 2017, CCIBV issued $150.0 million in additional aggregate principal amount of CCIBV Senior Notes, bringing the total amount outstanding under the CCIBV Senior Notes as of June 30, 2019 to $375.0 million.

The indenture governing the CCIBV Senior Notes contains covenants that limit CCIBV’s ability and the ability of its restricted subsidiaries to, among other things: (i) pay dividends, redeem stock or make other distributions or investments; (ii) incur additional debt or issue certain preferred stock; (iii) transfer or sell assets; (iv) create liens on assets; (v)debt; engage in certain transactions with affiliates; (vi) createenter into agreements which limit our ability and the ability of our restricted subsidiaries to incur restrictions on dividendsthe ability to make distributions; and amend or other payments by the restricted subsidiaries; and (vii) merge, consolidate or sell substantially all of CCIBV’s assets.waive organizational documents.

Other Debt
Other debt consists primarily of capital leases and loans with international banks.  As of June 30, 2019, approximately $4.0 million was outstanding as other debt.2020, we were in compliance with the covenants contained in our financing agreements.
Mandatorily Redeemable Preferred Stock
Guarantor Subsidiaries
        The Company and certain of the Company’s direct and indirect wholly-owned domestic subsidiaries (the “Obligor Group") fully and unconditionally guarantee, on a joint and several basis, the CCWH Senior Notes. On May 1, 2019,February 28, 2020, the Company issued 45,000 sharesand the guarantors under the CCWH Senior Notes Indenture 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 Series A Perpetual Preferred Stock, par value $0.01 per share,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 our Annual Report on Form 10-K for the year ended December 31, 2019, we included certain consolidating information with respect to the Company, Clear Channel Worldwide Holdings, Inc. (“CCWH”) and our wholly-owned subsidiaries that guarantee the CCWH Senior Notes in the notes to our audited consolidated financial statements pursuant to Rule 3-10 of Regulation S-X. In March 2020, the SEC adopted amendments to Rule 3-10 of Regulation S-X to simplify the financial disclosure requirements for guarantors and issuers of guaranteed registered securities. The amendments will be effective January 4, 2021, but voluntary compliance with the amendments in advance of January 4, 2021 is permitted. As a result of these amendments, starting with this Quarterly Report on Form 10-Q, we will no longer include consolidating financial information in the notes to our consolidated financial statements, and we will instead include certain summary financial information in accordance with Rule 13-01 of Regulation S-X.
        The following summary financial information of the Company having an aggregate initial liquidation preferenceObligor Group, which includes the parent guarantor, the issuer and the subsidiary guarantors, is provided in conformity with the SEC’s Regulation S-X Rule 13-01:
(In thousands)Six Months Ended June 30, 2020Year Ended December 31, 2019
Results of Operations Data:
Revenue$493,274  $1,263,657  
Operating income (loss)(102,575) 239,307  
Net loss attributable to the Obligor Group(273,783) (292,916) 
As ofAs of
(In thousands)June 30, 2020December 31, 2019
Select Asset and Liability Data:
Cash and cash equivalents$344,167  $287,773  
Other current assets217,956  265,368  
Property, plant and equipment, net621,698  669,402  
Notes receivable from related-party non-guarantors305,581  306,679  
Other assets(1)
2,679,259  2,794,351  
Current liabilities (excluding current portion of long-term debt)369,684  397,107  
Long-term debt (including current portion of long-term debt)5,227,737  5,083,988  
Mandatorily-redeemable preferred stock—  44,912  
Notes payable to related-party non-guarantors80,299  80,146  
Other non-current liabilities1,410,211  1,422,997  
(1) Investments in non-guarantor subsidiaries have been excluded from the presentation of $45 million (the “Preferred Stock”) for a cash purchase priceOther assets.
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        As of June 30, 2019,2020, CCWH had $1,901.5 million of CCWH Senior Notes outstanding. The CCWH Senior Notes are guaranteed, jointly and severally, irrevocably and unconditionally, on an unsecured senior basis, by the liquidation preferenceCompany and certain of the Preferred Stock was approximately $46.1 million.
    The termsCompany’s existing and conditionsfuture subsidiaries (the “Guarantors”). Not all of the Preferred Stock andCompany’s subsidiaries guarantee the rights of its holders are set forth inCCWH Senior Notes. The Company’s subsidiaries that do not guarantee the Certificate of Designation of Series A Perpetual Preferred StockCCWH Senior Notes (the “Certificate of Designation”“Non-Guarantor Subsidiaries”) include all foreign subsidiaries of the Company, filed with the officeall non-wholly-owned subsidiaries of the Secretary of StateCompany, certain domestic subsidiaries and all immaterial subsidiaries. The CCWH Senior Notes are structurally subordinated to all existing and future obligations of the State of Delaware on May 1, 2019,Non-Guarantor Subsidiaries, and the Series A Investors Rights Agreement, datedclaims of creditors of the Non-Guarantor Subsidiaries, including trade creditors, will have priority as to the assets of these subsidiaries. In the event of a bankruptcy, liquidation or reorganization of any of the Non-Guarantor Subsidiaries, holders of their indebtedness and their trade and other creditors will generally be entitled to payment of their claims from the assets of those subsidiaries before any assets are made available for distribution to CCWH and, in turn, to its creditors.
        In addition, as of May 1, 2019, byJune 30, 2020, CCWH guaranteed $1,250.0 million principal amount of CCOH Senior Secured Notes, $1,985.0 million of borrowings under the Term Loan Facility, $150.0 million of borrowings and among$20.2 million of letters of credit under the Company,Revolving Credit Facility, and $63.3 million of letters of credit under the Receivables-Based Credit Facility. All of the subsidiaries of CCOH that guarantee the CCWH Senior Notes are guarantors of this secured indebtedness. The CCWH Senior Notes are effectively subordinated to, and the purchaser listed therein (the “Investors Rights Agreement”).
Sharesguarantee of each Guarantor of the Preferred Stock rank senior and in priority of payment to our common equity interests and preferred stock juniorCCWH Senior Notes is effectively subordinated to, the Preferred StockCCOH Senior Secured Notes, the Term Loan Facility, the Revolving Credit Facility and other equity interests and preferred stock that does not expressly provide that such equity interest ranks senior to or pari passu with the Preferred Stock in any liquidation or winding up of the Company.
Dividends on the Preferred Stock will accrue on a daily basis at the applicable dividend rate on the then-current liquidation preference of the Preferred Stock, as and when declared by the board of directors. Dividends will either (a) be payable in cash, if andReceivables-Based Credit Facility, to the extent declaredof the value of the assets securing such indebtedness.
        The obligations of each Guarantor under its guarantee are limited as necessary to prevent such guarantee from constituting a fraudulent conveyance under applicable law. If a guarantee were to be rendered voidable, it could be subordinated by a court to all other indebtedness (including guarantees and other contingent liabilities) of the boardGuarantor, and, depending on the amount of directors,such indebtedness, a Guarantor’s liability on its guarantee could be reduced to zero. Each guarantee by a Guarantor provides by its terms that it shall be automatically and unconditionally released and discharged upon: (1) any sale, exchange or (b)transfer (by merger or otherwise) of the Guarantor in a manner in compliance with the applicable provisions of the CCWH Senior Notes Indenture; (2) the designation of any restricted subsidiary that is a Guarantor as an unrestricted subsidiary; (3) CCWH’s exercising legal defeasance or covenant defeasance in accordance with the relevant provisions of the CCWH Senior Notes Indenture, or (4) a Guarantor ceasing to be addeda restricted subsidiary as a result of a transaction or designation permitted under the CCWH Senior Notes Indenture.
        CCWH is a holding company with no significant operations or material assets other than the direct and indirect equity interests in its subsidiaries. CCWH derives all of its operating income from its subsidiaries. As a result, its cash flow and the ability to service its indebtedness, including the liquidation preference. CCWH Senior Notes, depends on the performance of its subsidiaries and the ability of those entities to distribute funds to it.
CRITICAL ACCOUNTING ESTIMATES
The dividend rate will be equalpreparation of our financial statements in conformity with GAAP requires management to (i)make estimates, judgments and assumptions that affect the greaterreported amounts of (a) a published LIBOR rate or (b) two (2%) percent plus (ii) either a cash dividend margin orassets and liabilities, and disclosure of contingent assets and liabilities, at the date of the financial statements and the reported amount of revenue and expenses during the reporting period. On an accruing dividend margin, in each caseongoing basis, we evaluate our estimates that are based on historical experience and on various other assumptions that are believed to be reasonable under the Company’s consolidated leverage ratio, subjectcircumstances. 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 under Part II, Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our 2019 Annual Report on Form 10-K.
        Due to COVID-19, we have updated certain adjustments. At any leverage ratio,of our estimates and assumptions that affect the accruing dividend margin will exceedreported amounts of assets and liabilities from that of which was reported in our 2019 Annual Report on Form 10-K, as described below. There continues to be a high level of uncertainty in estimating our expected economic and operational impacts relative to COVID-19 as it is an evolving situation. As expected impacts from COVID-19 are revised, our estimates and assumptions may change, and we may experience further potential impacts to our financial statements in future periods.

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Impairment Tests
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 cash dividend margin by 1.5%. Dividends, if declared, will be payable on March 31, June 30, September 30 and December 31 of each year (or on the next business day if such date is not a business day). No dividend may be declared unless paid immediately in cash (it being understood that no dividends may be declared and paid in securities or otherwise “in kind”).
The Company may redeem anycarrying amount of the Preferred Stock, at its option, at any time on or afterasset may not be recoverable using the third anniversarydirect valuation method as prescribed in ASC 805-20-S99. Under the direct valuation method, the estimated fair value of the Issue Date, in each case, in cashindefinite-lived intangible assets is calculated at a redemption price equal to the Liquidation Preference per share. Upon consummation of certain equity offerings, the Company may, at its option, redeem all ormarket 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 Preferred Stockbuyer 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 COVID-19 we tested our intangible assets for impairment and recognized an impairment charge of $123.1 million in the first quarter of 2020, related to permits in multiple markets in our Americas segment, primarily driven by reductions in projected cash flows and an increased discount rate. In determining the fair value of our billboard permits, the following key assumptions were used:
•Industry revenue growth forecasts used for the Liquidation Preference plusinitial four-year period, which varied by market, included an average growth of 2.4% over the next two years, factoring in the impacts related to COVID-19, and between 2.9% and 3.0% during the remaining two years;
•Revenue growth beyond the initial four-year period was assumed to be 3.0%;
•Revenue was grown over a make-whole premium. In addition, uponbuild-up period, reaching maturity by the occurrencesecond year;
•Operating margins gradually climb to the industry average margin (as high as 53.3%, depending on market size) by the third year; and
•Discount rate was assumed to be 10.0%.
While we believe we have made reasonable estimates and utilized appropriate assumptions to calculate the fair value of among other things (i) anyour indefinite-lived intangible assets, it is possible that a material change could occur. If future results are not consistent with our assumptions and estimates, we may be exposed to impairment charges in the future. The following table shows the decrease in the fair value of control, (ii) a liquidation, dissolution, or winding up or (iii) certain insolvency events, each holder may requireour indefinite-lived intangible assets that would result from decreases of 100 basis points in our discrete and terminal period revenue growth rate and profit margin assumptions and an increase of 100 basis points in our discount rate assumption:
(In thousands)Revenue growth rateProfit marginDiscount rate
Decrease in fair value of:(100 basis point decrease)(100 basis point decrease)(100 basis point increase)
Billboard permits$(523,700) $(119,100) $(504,000) 
The estimated fair value of our billboard permits at March 31, 2020 was $1.9 billion. As of June 30, 2020, the Company to redeem for cash allcarrying value of our billboard permits was $0.8 billion which reflects the impairment charge recognized in the first quarter of 2020 discussed above.
Goodwill
Goodwill represents the excess of the then outstanding sharespurchase price over the fair value of Preferred Stock. In addition,identifiable net assets acquired in business combinations. We test goodwill 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 holdersnet assets of Preferred Shares may require a designated subsidiaryeach 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 Companyimpairment testing approach involves estimating future cash flows expected to purchasebe generated from the sharesrelated assets, discounted to their present value using a risk-adjusted discount rate. Terminal values are also estimated and discounted to their present value.
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        As previously described, we changed our presentation of segment information as of January 1, 2020 to reflect changes in the way the business is managed and resources are allocated by the CODM. This resulted in a change to our operating segments and certain reporting units. Corresponding with the change in our reporting units, we tested goodwill for impairment immediately before and after the fifth anniversarychange utilizing a discount rate of issuance.approximately 8.5% to 10.0% for each of our reporting units and an estimated perpetual growth rate of 3.0%. This testing did not identify impairment. Additionally, due to the expected impacts from COVID-19, we tested our goodwill for impairment as of March 31, 2020 in accordance with ASC 350-20-35; however, this did not result in any impairment of goodwill during the three months ended March 31, 2020. In determining the fair value of our reporting units, we used the following assumptions:
On•Expected cash flows underlying our business plans for the tenth anniversaryperiods 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.
Based on our assessment using the assumptions described above, a hypothetical 10% reduction in the estimated fair value in each of our reporting units would not result in a material impairment condition.
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:
(In thousands)Revenue growth rateProfit marginDiscount 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) 
NEW ACCOUNTING PRONOUNCEMENTS
For a description of the issue dateexpected impact of the Preferred Stock, the shares of Preferred Stock will be subject to mandatory redemption for an amount equal to the liquidation preference.
The certificate of designations for the Preferred Stock will limit its ability to incur additional debt or any other security ranking pari passu with or senior to the Preferred Stock, other than in (a) an amountnewly issued but not to exceed $300 millionyet adopted accounting pronouncements on a cumulative basis or (b) subject to an incurrence-based leverage test, subject to other customary carve-outs.
Commitments, Contingenciesour financial position and Guarantees
We are currently involved in certain legal proceedings arising in the ordinary course of business and, as required, have accrued our estimate of the probable costs for 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 our assumptions or the effectiveness of our strategies related to these proceedings. Please refer to “Legal Proceedings”Note 1 to our Consolidated Financial Statements located in Part II, Item 1 of Part I of this Quarterly Report on Form 10-Q.

SEASONALITYCautionary Statement Concerning Forward-Looking Statements
Typically, both        This report contains various forward-looking statements which represent our Americasexpectations or beliefs concerning future events, including, without limitation, our future operating and International segments experience their lowest financial performance, our ability to comply with the covenants in the first quarteragreements 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 calendar year,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 magnitude of the impact of the COVID-19 pandemic on our operations and on general economic conditions;
•risks associated with International historically experiencing a loss fromweak 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;
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•our ability to obtain key municipal concessions for our street furniture and transit products;
•fluctuations in that period.  Our International segment typically experiences its strongest performanceoperating costs;
•technological changes and innovations;
•shifts in population and other demographics;
•other general economic and political conditions in the secondU.S. and fourth quartersin 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 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 calendar year.  We expect this trendNew York Stock Exchange and continue to continue incomply with other applicable listing standards within the future.  Due to this seasonalityavailable cure period; and
•certain other factors set forth in our other filings with the results forSEC.
        This list of factors that may affect future performance and the interim periods mayaccuracy of forward-looking statements is illustrative and is not intended to be indicativeexhaustive. Accordingly, all forward-looking statements should be evaluated with the understanding of results for the full year.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 equity security prices, and foreign currency exchange rates.
On June 23, 2016, the United Kingdom (the "U.K.") held a referendum in which voters approved an exit of the U.K. from the European Union (the "E.U."), commonly referred to as "Brexit,"rates and on March 29, 2017, the U.K. delivered formal notification of its intention to withdraw from the E.U. To date, no formal withdrawal agreement has been reached between the U.K. and the E.U., despite the passage of the date on which it was expected that the U.K.’s membership in the E.U. would terminate, creating significant uncertainty about the terms (and timing) under which the U.K. will leave the E.U. and the consequent impact on the economies of the U.K., the E.U. and other countries. Our International segment is currently headquartered in the U.K. and transacts business in many key European markets including the U.K. The announcement of Brexit caused the British pound currency rate to weaken against the U.S. dollar.  Further, Brexit may cause our U.K. customers to closely monitor their costs and reduce the amount they spend on advertising.  Any of these or similar effects of Brexit could adversely impact our business, operating results, cash flows and financial condition.inflation.
Foreign Currency Exchange Rate Risk
We have operations in countries throughout the world.  Foreignworld, and foreign operations are measured in their local currencies. 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. We believeChanges in economic or political conditions in any of the foreign countries in which we mitigate a small portionoperate, including Brexit, could result in exchange rate movement, new currency or exchange controls or other currency restrictions being imposed.
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Our foreign operations reported a net lossesloss of $4.7$51.0 million and $42.2$165.4 million for the three and six months ended June 30, 2019.2020. We estimate that a 10% increase in the value of the U.S. dollar relative to foreign currencies would have decreased our net lossesloss for the three and six months ended June 30, 20192020 by $0.5$5.1 million and $4.2$16.5 million, respectively.  Arespectively, and a 10% decrease in the value of the U.S. dollar relative to foreign currencies duringwould have increased our net loss for the three and six months ended June 30, 2019 would have increased our net losses for the same periods2020 by a corresponding amount.
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 the foreign countries or on the results of operations of these foreign entities.
Inflation
Inflation is a factor in the economies in which we do business, and we continue to seek ways to mitigate its effect. Inflation has affected our performance in terms of higher costs for wages, salaries and equipment. Although the exact impact of inflation is indeterminable, we believe we have offset these higher costs by increasing the effective advertising rates of most of our outdoor display faces.
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS
The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements made by us or on our behalf.  Except for the historical information, this report contains various forward-looking statements which represent our expectations or beliefs concerning future events, including, without limitation, our future operating and financial performance, 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.  We caution that these forward-looking statements involve a number of risks and uncertainties and are subject to many variables which 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:
risks associated with weak or uncertain global economic conditions and their impact on the level of expenditures on advertising, including the effects of Brexit and economic uncertainty in China;
our ability to service our debt obligations and to fund our operations and capital expenditures;
industry conditions, including competition;
our dependence on our management team and other key individuals;
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 United States 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, and breaches of information security measures;
increases in tax rates or changes in tax laws or regulations;
a breach of our security measures;
restrictions on outdoor advertising of certain products;
capital expenditure requirements;
fluctuations in exchange rates and currency values;
risks of doing business in foreign countries;
new or increased tariffs or unfavorable changes in trade policy;
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;
the risk that the Separation may result in unfavorable tax consequences for us and impair our ability to utilize our federal income tax net operating loss carryforwards in future years;
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 Series A Preferred Stock limiting our flexibility in operating our business;
the effect of analyst or credit ratings downgrades; 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
Required information is presented under “Market Risk” within Item 2 of this Part I.
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 management, including our Chief Executive Officer and our Chief Financial Officer, 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 Officer and our Chief Financial Officer, 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 Officer and our Chief Financial Officer concluded that our disclosure controls and procedures were effective as of June 30, 20192020 at the reasonable assurance level.
There were no changes in our internal control over financial reporting that occurred during the quarter ended June 30, 20192020 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II --– OTHER INFORMATION
ITEM 1.  LEGAL PROCEEDINGS
We currently 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 our assumptions or the effectiveness of its strategies 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 our financial condition or results of operations. 
Although we are involved in a variety of legal proceedings in the ordinary course of business, a large portion of our litigation arisesarising in the following contexts: commercial disputes; misappropriation of likeness and right of publicity claims;disputes, employment and benefits related claims;claims, land use and zoning, governmental fines;fines, intellectual property claims;claims, and tax disputes.
Stockholder Litigation

On May 9, 2016, a stockholder We are not aware of the Company filed a derivative lawsuit in the Court of Chancery of the State of Delaware (the “Delaware Chancery Court”), captioned GAMCO Asset Management Inc. v. iHeartMedia Inc. et al., C.A. No. 12312-VCS. The complaint named as defendants iHeartCommunications, Inc. (“iHeartCommunications”), the Company’s indirect parent company, iHeartMedia, Inc. (“iHeartMedia”), the parent company of iHeartCommunications, Bain Capital Partners, LLC and Thomas H. Lee Partners, L.P. (together, the “Former Sponsor Defendants”), iHeartMedia’s pre-bankruptcy private equity sponsors and pre-bankruptcy majority owners, and the members of the Company’s board of directors. The Company also was named as a nominal defendant. The complaint alleged that the Company had been harmed by the intercompany agreements with iHeartCommunications, the Company’s lack of autonomy over its own cash and the actions of the defendants in serving the interests of iHeartMedia, iHeartCommunications and the Former Sponsor Defendants to the detriment of the Company and its minority stockholders. The plaintiff sought, amongany other things, a ruling that the defendants breached their fiduciary duties to the Company and that iHeartMedia, iHeartCommunications and the Former Sponsor Defendants aided and abetted the board of directors’ breaches of fiduciary duty, rescission of payments to iHeartCommunications and its affiliates pursuant to dividends declared in connection with the CCIBV Note Offering and Outdoor Asset Sales, and an order requiring iHeartMedia, iHeartCommunications and the Former Sponsor Defendants to disgorge all profits they have received as a result of the alleged fiduciary misconduct.
On July 20, 2016, the defendants filed a motion to dismiss plaintiff's verified stockholder derivative complaint for failure to state a claim upon which relief can be granted. On November 23, 2016, the Delaware Chancery Court granted defendants’ motion to dismiss all claims brought by the plaintiff.  On December 19, 2016, the plaintiff filed a notice of appeal of the ruling. The oral hearing on the appeal was held on October 11, 2017. On October 12, 2017, the Supreme Court of Delaware affirmed the lower court's ruling, dismissing the case.
On December 29, 2017, another stockholder of the Company filed a derivative lawsuit (the "Norfolk Lawsuit") in the Delaware Chancery Court captioned Norfolk County Retirement System, v. iHeartMedia, Inc., et al., C.A. No. 2017-0930-JRS. The complaint names as defendants iHeartMedia, iHeartCommunications, the Former Sponsor Defendants, and the members of the Company's board of directors.  The Company is named as a nominal defendant. The complaint alleges that the Company has been harmed by the Company Board’s November 2017 decision to extend the maturity date of the intercompany revolving note (the “Third Amendment”) at what the complaint describes as far-below-market interest rates. The plaintiff sought, among other things, a ruling that the defendants breached their fiduciary duties to the Company, a modification of the Third Amendment to bear a commercially reasonable rate of interest, and an order requiring disgorgement of all profits, benefits and other compensation obtained by defendants as a result of the alleged breaches of fiduciary duties.
On March 7, 2018, the defendants filed a motion to dismiss plaintiff's verified derivative complaint for failure to state a claim upon which relief can be granted. On March 16, 2018, iHeartMedia filed a Notice of Suggestion of Pendency of Bankruptcy and Automatic Stay of Proceedings. On May 4, 2018, plaintiff filed its response to the motion to dismiss. On June 26, 2018, the defendants filed a reply brief in further support of their motion to dismiss. Oral argument on the motion to dismiss was held on September 20, 2018.


On August 27, 2018, the same stockholder of the Company that had filed a derivative lawsuit against iHeartMedia and others in 2016 (GAMCO Asset Management Inc.) filed a putative class action lawsuit (the "GAMCO II Lawsuit") in the Delaware Chancery Court, captioned GAMCO Asset Management, Inc. v. Hendrix, et al., C.A. No. 2018-0633-JRS. The complaint names as defendants the Former Sponsor Defendants and the members of the Company’s board of directors. The complaint alleges that minority shareholders in the Company during the period November 8, 2017 to March 14, 2018 were harmed by decisions of the Company's board of directors and the intercompany note committee of the board of directors relating to the intercompany note. The plaintiff sought, among other things, a ruling that the Company's board of directors, the intercompany note committee, and the Sponsor Defendants breached their fiduciary duties and that the Sponsor Defendants aided and abetted the Board’s breach of fiduciary duty; and an award of damages, together with pre- and post-judgment interests, to the putative class of minority shareholders.
On December 16, 2018, the Debtors, the Company, GAMCO Asset Management, Inc., and Norfolk County Retirement System entered into a settlement agreement (the "Settlement Agreement"), which resolves all claims, objections, and other causes of action that have been or could be assertedmaterial pending legal proceedings by or on behalf of the Company, GAMCO Asset Management, Inc., and/or Norfolk County Retirement System by and among the Debtors, the Company, GAMCO Asset Management, Inc., certain individual defendants in the GAMCO Asset Management, Inc. action and/or the Norfolk County Retirement System action, and the private equity sponsor defendants in such actions. The Settlement Agreement provides for the consensual separation of the Debtors and the Company, including approximately $149.0 million of recovery to CCOH on account of its claim against iHeartCommunications in the Chapter 11 cases, an unsecured revolving line of credit in an aggregate amount not to exceed $200 million from iHeartCommunications (the “iHeart Line of Credit”), the transfer of certain of the Debtors’ intellectual property to the Company, the waiver by the Debtors of the setoff for the value of the transferred intellectual property, mutual releases, the termination of the cash sweep under the existing Corporate Services Agreement, the termination of any agreements or licenses requiring royalty payments from the Company to the Debtors for trademarks or other intellectual property, the waiver of any post-petition amounts owed by the Company relating to such trademarks or other intellectual property, and the execution of a new transition services agreement and other separation documents. The Settlement Agreement was approved by the Bankruptcy Court and the United States District Court for the Southern District of Texas in connection with the confirmation of the iHeartMedia Chapter 11 Cases on January 22, 2019. On May 1, 2019, the Debtors' plan of reorganization went effective, and the Norfolk Lawsuit and GAMCO II Lawsuit were each subsequently dismissed with prejudice.us.
China Investigation
Two former employees of Clear Media Limited, an 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 funds, and sentenced to imprisonment. One of those former employees has appealed his conviction. The Company isWe are not aware of any litigation, claim or assessment pending against the Companyus 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 effect of the misappropriation of funds is reflected in these financial statements in the appropriate periods.
The CompanyWe advised both the United States Securities and Exchange CommissionSEC and the United States DepartmentDOJ of Justice of thethis investigation at Clear Media Limited and isare cooperating to provide documents, interviews and information to the agencies. Subsequent to the announcement that we were considering a strategic review of our stake in response to inquiriesClear Media, in March 2020, we received a subpoena from the agencies. The Clear Media Limited investigation could implicate the books and records, internal controls and anti-bribery provisionsstaff of the U.S. Foreign Corrupt Practices Act, which statuteSEC and regulations providea Grand Jury subpoena from the United States Attorney's Office for potential monetary penalties as well as criminal and civil sanctions. It is possible that monetary penalties and other sanctions could be assessed on the CompanyEastern District of New York, both in connection with this matter. The nature and amount of any monetary penalty or other sanctions cannot reasonably be estimated at this time and could be qualitatively or quantitatively materialthe previously disclosed investigation. For additional information related to the Company.China investigation, refer to Note 5 to our Consolidated Financial Statements located in Item 1 of Part I of this Quarterly Report on Form 10-Q.
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. These misstatements resulted in an understatement of other long-term liabilities of $16.9 million as of December 31, 2017. The effect of these misstatements is reflected in the historical financial statements in the appropriate periods. 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 calculation of the VAT position. The current expectation is that the Company may have to repay to the Italian tax authority a substantial portion of the VAT previously applied as a credit in relation to the transactions under investigation, amounting to approximately $17 million, including estimated possible penalties and interest. The Company made a payment of approximately $6.9 million, net of VAT recoverable, during the fourth quarter of 2018 and expects to pay the remainder during the last half of 2019 or the first quarter of 2020. The ultimate amount to be paid may differ from the estimates, and such differences may be material.


ITEM 1A.  RISK FACTORS
Risks Related to Our Business
There have not been anyno material changes to the risk factors disclosed under the caption “Risks Related to Our Business” in Part I, Item 1A of"Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2018 (the “Annual Report”),2019, except that we are updating the risk factors entitled “Our results have beenfactor set forth under “The coronavirus outbreak could impact our operations” in the past,Form 10-K is updated and could be in the future, adversely affected by economic uncertainty or deteriorations in economic conditions,” “We face intense competition in the outdoor advertising business,” “Our financial performance may be adversely affected by many factors beyond our control,” “Future dispositions, acquisitions and other strategic transactions could pose risks,” “Government regulation of outdoor advertising may restrict our outdoor advertising operations,” “We are exposed to foreign currency exchange risks because a majority of our revenue is received in foreign currencies and translated to U.S. dollars for reporting purposes” and “Doing business in foreign countries exposes us to certain risks not expected to occur when doing business in the United States,” as set forth below, and we are supplementing these risk factorsreplaced with the risk factor entitledset forth below under “Third-party claims of intellectual property infringement, misappropriation or other violation against us could harmThe COVID-19 pandemic has negatively affected and will likely continue to negatively affect our business, operating results, and financial condition and prospects,” asand the risk factor set forth below:below under “If we cannot meet the continued listing requirements of the New York Stock Exchange (“NYSE”), the NYSE may delist our common stock, which would have an adverse impact on the trading, liquidity and market price of our common stock” is added.
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 have 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 may further impact all or portions of 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, has been adversely affected by these measures, which have resulted in significant reductions in time spent out of home by consumers, reductions in advertising spending, reductions in consumer spending, volatile economic conditions and business disruptions across markets globally.
Our results have beenof operations were negatively impacted by the COVID-19 pandemic in the past,first half of the year. Due to the continued global spread of COVID-19, including throughout the U.S., we anticipate continued significant adverse effects on our results of operations throughout our business during the second half of the year as customers continue to defer buying decisions and reduce marketing spend. The COVID-19 pandemic has caused a significant reduction in time spent out-of-home as a result of work-from-home orders, a reduction in time spent in airports as a result of travel restrictions and a general decrease in consumer spending. The COVID-19 pandemic has caused an economic slowdown, and it is possible that it could be in the future, adversely affected by economic uncertainty or deteriorations in economic conditions.
We derive revenues from the sale of advertising.cause a prolonged global recession. Expenditures by advertisers tend to be cyclical, reflecting economic conditions and budgeting and buying patterns. Periods ofEconomic slowdown, a slowing economy orprolonged recession or periods ofcontinued economic uncertainty may be accompanied by a decrease in advertising. For example, the global economic downturn that began in 2008 resulted in a decline in advertising and marketing by our customers, which resulted in a decline in advertising revenues across our businesses. This reduction in advertising revenues had an adverse effect on our revenue, profit margins, cash flow and liquidity. Global economic conditions remain uncertain. For example, while the economy in China has grown significantly over the past decades, growth has been uneven, both geographically and among various sectors of the economy, and the rate of growth has been slowing. Moreover, there is considerable uncertainty in China’s economic condition as a result of among other things, the political climate and trade policy of the United States. Any prolonged slowdown in the Chinese economy may adversely affect the results of our Chinese subsidiary, which could materially and adverselyCOVID-19 outbreak is likely to negatively affect our business, financial conditionadvertising customers. The extent to which COVID-19 will ultimately impact our results will depend on future developments, which are highly uncertain, but we have experienced and results of operations. If economic conditions do notare continuing to experience reduced advertising spending, which has and could continue to improve, economic uncertainty increases or economic conditions deteriorate again, global economic conditions may once againmaterially adversely impact our revenue, profit margins, cash flowbusiness, results of operations and liquidity. Furthermore, because a significant portion of our revenue is derived from local advertisers, our abilityoverall financial performance in future periods.
During the second quarter, the COVID-19 pandemic also significantly increased economic and demand uncertainty and led to generate revenues in specific markets is directly affected by localdisruption and regional conditions, and unfavorable local and regional economic conditions also may adversely impact our results. In addition, evenvolatility in the absence of a downturn in general economic conditions, an individual business sector or marketglobal capital markets, which may experience a downturn, causing it to reduce its advertising expenditures, which also may adversely impact our results.
We face intense competitioncontinue in the outdoor advertising business.third quarter potentially resulting in increased cost of capital and an adverse impact on access to capital.
WeIn recent weeks, new daily cases in certain of the markets in which we operate have continued to fall and shelter-in-place orders have been lifted in part. However, a highly competitive industry,resurgence in COVID-19 cases could result in restrictions being reinstated, and we may not be able to maintain or increase our current advertising revenues. We compete for advertising revenue withit is unclear when an economic recovery could start and what a recovery will look like as countries emerge from this unprecedented shutdown of the global economy.
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These and other outdoor advertising businesses, as well as with other media, such as radio, newspapers, magazines, television, direct mail, mobile devices, satellite radio and Internet-based services, within their respective markets. Market shares are subject to change for various reasons including through consolidationimpacts of our competitors through processes such as mergers and acquisitions, whichthe COVID-19 pandemic could have the effect of reducingheightening many of the other risks described in the “Risk Factors” section in our revenue in a specific market. Our competitors may develop technology, services or advertising media thatAnnual Report on Form 10-K for the Year Ended December 31, 2019. The extent to which the coronavirus impacts our results will depend on future developments, which are equal or superior to those we provide or that achieve greater market acceptancehighly uncertain and brand recognition than we achieve. It also is possible thatcannot be predicted, including new competitorsinformation which may emerge concerning the severity of the coronavirus, the duration of the outbreak, travel restrictions, business closures or business disruption, a reduction in time spent out of home and the actions taken throughout the world, including in our markets, to contain the coronavirus or treat its impact. The severity, magnitude and duration of the COVID-19 pandemic is uncertain, rapidly acquire significant market share in any ofchanging and hard to predict and depends on events beyond our business segments. The advertiser/agency ecosystem is diverse and dynamic, with advertiser/agency relationships subject to change. This could have an adverse effect on us if an advertiser client shifts its relationship to an agency with whom we doknowledge or control. We might not have as good a relationship. An increased level of competition for advertising dollars may lead to lower advertising rates as we attempt to retain customers or may cause us to lose customers to our competitors who offer lower rates that we are unable or unwilling to match.
Further, as digital advertising and programmatic technologies continue to develop and become increasingly important to our business model, our competitors may be able to offer products that are,predict or that are seenrespond to be, substantially similarall impacts on a timely basis to prevent near- or better than ours. This may force us to compete in different ways and incur additional costs, become subject to additional governmental regulations, and/or expend resources in order to remain competitive. If our competitors are more successful than we are in developing digital advertising and programmatic products and services, our business, financial condition and results of operations could be adversely affected.


Our financial performance may be adversely affected by many factors beyond our control.
Certain factors that could adversely affect our financial performance by, among other things, decreasing overall revenues, the numbers of advertising customers, advertising fees or profit margins include:
unfavorable fluctuations in operating costs, which we may be unwilling or unable to pass throughlong-term adverse impacts to our customers;
global economic conditions, such as the economic uncertainty in China;
our inability to successfully adopt or our being late in adopting technological changes and innovations that offer more attractive advertising alternatives than what we offer, which could result in a loss of advertising customers or lower advertising rates, which could have a material adverse effect on our operating results and financial performance;
unfavorable shifts in population and other demographics, which may cause us to lose advertising customers as people migrate to markets where we have a smaller presence or which may cause advertisers to be willing to pay less in advertising fees if the general population shifts into a less desirable age or geographical demographic from an advertising perspective;
adverse political effects and acts or threats of terrorism or military conflicts; and
unfavorable changes in labor conditions, which may impair our ability to operate or require us to spend more to retain and attract key employees.
In addition, on June 23, 2016, the U.K. held a referendum in which voters approved an exit of the U.K. from the European Union (the “E.U.”), commonly referred to as “Brexit.” International outdoor is currently headquartered in the U.K. and transacts business in many key European markets. To date, no formal withdrawal agreement has been reached between the U.K. and the E.U., despite the passage of the date on which it was expected that the U.K.’s membership in the E.U. would terminate. creating significant uncertainty about the terms (and timing) under which the U.K. will leave the E.U. and the consequent impact on the economies of the U.K., the E.U. and other countries. This uncertainty may cause our customers to closely monitor their costs and reduce the amount they spend on advertising. Any of these or similar effects of Brexit could adversely impact our business, operating results, cash flows and financial condition.
Future dispositions, acquisitions and other strategic transactions could pose risks.
We frequently evaluate strategic opportunities both within and outside our existing lines of business. We expect from time to time to pursue strategic dispositions of certain businesses, as well as acquisitions, and we may pursue other strategic transactions, including recapitalizations or other corporate restructurings, including a REIT conversion. These dispositions, acquisitions or other transactions could be material. Such transactions involve numerous risks, including:
our dispositions may negatively impact revenues from our national, regional and other sales networks;
our dispositions may make it difficult to generate cash flows from operations sufficient to meet our anticipated cash requirements, including our debt service requirements;
our acquisitions may prove unprofitable and fail to generate anticipated cash flows;
to successfully manage our large portfolio of outdoor advertising and other businesses, we may need to:
recruit additional senior management as we cannot be assured that senior management of acquired businesses will continue to work for us and we cannot be certain that our recruiting efforts will succeed, and
expand corporate infrastructure to facilitate the integration of our operations with those of acquired businesses, because failure to do so may cause us to lose the benefits of any expansion that we decide to undertake by leading to disruptions in our ongoing businesses or by distracting our management;
we may enter into markets and geographic areas where we have limited or no experience;
we may encounter difficulties in the integration of acquired operations and systems; and
our management’s attention may be diverted from other business concerns.
Dispositions and acquisitions of outdoor advertising businesses may require antitrust review by U.S. federal antitrust agencies and may require review by foreign antitrust agencies under the antitrust laws of foreign jurisdictions. We can give no assurances that the Department of Justice, the Federal Trade Commission or foreign antitrust agencies will not seek to bar us from disposing of or acquiring outdoor advertising businesses or impose stringent undertakings on our business as a condition to the completion of an acquisition in any market where we already have a significant position.


Government regulation of outdoor advertising may restrict our outdoor advertising operations.
U.S. federal, state and local regulations have a significant impact on the outdoor advertising industry and our business. One of the seminal laws is the Highway Beautification Act (“HBA”), which regulates outdoor advertising on controlled roads in the United States. The HBA regulates the size and location of billboards, mandates a state compliance program, requires the development of state standards, promotes the expeditious removal of illegal signs and requires just compensation for takings. Construction, repair, maintenance, lighting, upgrading, height, size, spacing, the location and permitting of billboards and the use of new technologies for changing displays, such as digital displays, are regulated by federal, state and local governments. From time to time, states and municipalities have prohibited or significantly limited the construction of new outdoor advertising structures. Changes in laws and regulations affecting outdoor advertising, or changes in the interpretation of those laws and regulations, at any level of government, including the foreign jurisdictions in which we operate, could have a significant financial impact on us by requiring us to make significant expenditures or otherwise limiting or restricting some of our operations. Due to such regulations, it has become increasingly difficult to develop new outdoor advertising locations.
We have also introduced and intend to expand the deployment of digital billboards that display digital advertising copy from various advertisers that change several times an hour. We have encountered regulations that restrict or prohibit these types of digital displays. Since digital billboards have been developed and introduced relatively recently into the market on a large scale, existing regulations that currently do not apply to them by their terms could be revised or new regulations could be enacted to impose greater restrictions. These regulations may impose greater restrictions on digital billboards due to alleged concerns over aesthetics or driver safety. Any new restrictions on digital billboards could have a material adverse effect on both our existing inventory of digital billboards and our plans to expand our digital deployment.
From time to time, certain state and local governments and third parties have attempted to force the removal of our displays under various state and local laws, including zoning ordinances, permit enforcement and condemnation. Similar risks also arise in certain of our international jurisdictions. Certain zoning ordinances provide for amortization which is the required removal of legal non-conforming billboards (billboards which conformed with applicable laws and regulations when built, but which do not conform to current laws and regulations) or the commercial advertising placed on such billboards after a period of years. Pursuant to this concept, the governmental body asserts that just compensation is earned by continued operation of the billboard over that period of time. Although amortization is prohibited along all controlled roads, amortization has been upheld along non-controlled roads in limited instances where permitted by state and local law. Other regulations limit our ability to rebuild, replace, repair, maintain and upgrade non-conforming displays. In addition, from time to time third parties or local governments assert that we own or operate displays that either are not properly permitted or otherwise are not in strict compliance with applicable law. If we are increasingly unable to resolve such allegations or obtain acceptable arrangements in circumstances in which our displays are subject to removal, modification or amortization, or if there occurs an increase in such regulations or their enforcement, our operating results could suffer.
A number of state and local governments have implemented or initiated taxes, fees and registration requirements in an effort to decrease or restrict the number of outdoor signs and/or to raise revenue. From time to time, legislation also has been introduced in international jurisdictions attempting to impose taxes on revenue from outdoor advertising or for the right to use outdoor advertising assets. In addition, a number of jurisdictions have implemented legislation or interpreted existing legislation to restrict or prohibit the installation of digital billboards, and we expect these efforts to continue. The increased imposition of these measures, and our inability to overcome any such measures, could reduce our operating income if those outcomes require removal or restrictions on the use of preexisting displays or limit growth of digital displays. In addition, if we are unable to pass on the cost of these items to our clients, our operating income could be adversely affected.
International regulation of the outdoor advertising industry can vary by municipality, region and country, but generally limits the size, placement, nature and density of out-of-home displays. Other regulations limit the subject matter, animation and language of out-of-home displays. Our failure to comply with these or any future international regulations could have an adverse impact on the effectiveness of our displays or their attractiveness to clients as an advertising medium and may require us to make significant expenditures to ensure compliance and avoid certain penalties or contractual breaches.results. As a result, we may experience a significantcannot at this time predict the impact on our operations, revenue, international client base and overall financial condition.


We are exposed to foreign currency exchange risks because a majority of our revenue is received in foreign currencies and translated to U.S. dollars for reporting purposes.
We generate a majority of our revenues in currencies other than U.S. dollars. Changes in economic or political conditions, including Brexit, 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. Because we receive a majority of our revenues in currencies from the countries in which we operate, exchange rate fluctuations in any such currency could have an adverse effect on our profitability. A majority of our cash flows are generated in foreign currencies and translated to U.S. dollars for reporting purposes, and certain of the indebtedness held by our international subsidiaries is denominated in U.S. dollars, and, therefore, significant changes in the value of such foreign currencies relative to the U.S. dollar could have a material adverse effect on our financial condition and our ability to meet interest and principal payments on our indebtedness.
Given the volatility of exchange rates, we cannot assure you that we will be able to effectively manage our currency transaction and/or translation risks. It is possible that volatility in currency exchange rates will have a material adverse effect on our financial condition or results of operations. We expect to experience economic losses and gains and negative and positive impacts on our operating income as a result of foreign currency exchange rate fluctuations.
Doing business in foreign countries exposes us to certain risks not expected to occur when doing business in the United States.
Doing business in foreign countries carries withCOVID-19 pandemic, but it certain risks that are not found when doing business in the United States. These risks could result in losses against which we are not insured. Examples of these risks include:
potential adverse changes in the diplomatic relations of foreign countries with the United States;
new or increased tariffs or unfavorable changes in trade policy;
hostility from local populations;
the adverse effect of foreign exchange controls;
government policies against businesses owned by foreigners;
investment restrictions or requirements;
expropriations of property without adequate compensation;
the potential instability of foreign governments;
the risk of insurrections;
risks of renegotiation or modification of existing agreements with governmental authorities;
difficulties collecting receivables and otherwise enforcing contracts with governmental agencies and others in some foreign legal systems;
withholding and other taxes on remittances and other payments by subsidiaries;
changes in tax structure and level; and
changes in laws or regulations or the interpretation or application of laws or regulations.
Our International operations involve contracts with, and regulation by, foreign governments. We operate in many parts of the world that experience corruption to some degree. Although we have policies and procedures in place that are designed to promote legal and regulatory compliance (including with respect to the U.S. Foreign Corrupt Practices Act and the U.K. Bribery Act), our employees, subcontractors and agents could take actions that violate applicable anti-corruption laws or regulations. Two former employees of Clear Media Limited, an 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 funds, and sentenced to imprisonment. One of those former employees has appealed his conviction. For a description of this matter, see “Part II, Item 1. Legal Proceedings-China Investigation.” Violations of these laws, or allegations of such violations, could have a material adverse effect on our business, financial position and results of operations.operations, financial condition and cash flows.

If we cannot meet the continued listing requirements of the New York Stock Exchange (“NYSE”), the NYSE may delist our common stock, which would have an adverse impact on the trading, liquidity and market price of our common stock.

Third-party claims of intellectual property infringement, misappropriation or other violation against us could harm our business, operating results, and financial condition.
Third parties have asserted, and may inOn August 4, 2020, we received written notification from the future assert,New York Stock Exchange (the “NYSE”) that we have infringed, misappropriated or otherwise violated their intellectual property rights. As we face increasing competition, the possibility of intellectual property rights claims against us will grow. Any lawsuits regarding intellectual property rights, regardless of their success, could be expensive to resolve and would divert the time and attention of our management and technical personnel. In the event that any third party claims that we infringe their patents or that we are otherwise employing their proprietary technology without authorization and initiates litigation against us, even if we believe such claims are without merit, there is no assurance that a court would findwere not in our favor on questions of infringement, validity, enforceability or priority. An adverse outcome of a dispute may damage our reputation, force us to adjust our business practices, require us to pay significant damages, and/or take other actions that could have a material adverse effect on our business. As a result of intellectual property infringement claims, or to avoid potential claims, we may choose or be required to seek licenses from third parties. These licenses may not be available on commercially reasonable terms, or at all. Even if we are able to obtain a license, the license would likely obligate us to pay license fees or royalties or both, and the rights granted to us might be nonexclusive,compliance with the potential for our competitors to gain access to the same intellectual property. In addition, the rights that we secure under intellectual property licenses may not include rights to allan NYSE continued listing standard in Rule 802.01C of the intellectual property owned or controlled byNYSE Listed Company Manual ("Section 802.01C") because the licensor, and the scope of the licenses granted to us may not include rights covering all of the products, services and technologies provided by us. The occurrence of any of the foregoing could harm our business, operating results and financial condition.
Risks Related to Our Separation from iHeartCommunications
The following risk factors disclosed under the caption “Risks Related to Our Separation from iHeartCommunications” below amend, restate and replace all of the risk factors under the caption “Risks Related to the Separation, the iHeart Chapter 11 Cases and Our Relationship with iHeartCommunications” in Item 1A of our Annual Report:
The Separation could result in significant tax liability or other unfavorable tax consequences to us.
The transactions related to the Separation were intended to be taxable transactions. The gain or loss recognized with respect to these transactions will depend on, among other things: (a) the value and tax basis of the assets transferred in the Radio Distribution and the value and tax basisaverage closing price of our common stock fell below $1.00 over a period of 30 consecutive trading days.
Pursuant to Section 802.01C, we have a period of six months following the receipt of the notice to regain compliance with the minimum share price requirement, or until our next annual meeting of stockholders if stockholder approval is required to cure the share price non-compliance, as would be the case to effectuate a reverse stock split. We intend to timely respond to the NYSE with respect to our intent to cure the deficiency and return to compliance with the NYSE continued listing requirements. We intend to regain compliance with the requirements of Section 802.01C by implementing a reverse stock split, subject to approval by our board of directors and the stockholders at the next annual meeting of stockholders, if we do not achieve an accelerated cure prior to the cure deadline. The number of shares available on the effective datepublic market following a reverse stock split would be reduced significantly, which may affect the volume and liquidity of the Separation (the “Effective Date”) (such values will be determined by referenceour common stock.
Pursuant to among other things, the trading value of the iHeartMedia equity andNYSE rules, our common stock followingcontinues to be listed and traded on NYSE during the Effective Date); (b) complex modeling considerations under certain U.S. Treasury regulations; (c) the amount of cancellation of indebtedness income realized in connection with the iHeartMedia’s Chapter 11 proceedings; and (d) the extent to which any “excess loss accounts” (as defined under applicable U.S. Treasury regulations) are taken into account. The extent to which any related taxable gain or loss will result in any cash tax liabilities will depend on whether the tax attributes of iHeartMedia and its subsidiaries, including the net operating losses (“NOLs”) of iHeartMedia and its subsidiaries (including CCOH and its subsidiaries), are sufficient to offset any net taxable gain and income attributable to the transactions related to the Separation.
In addition, the merger of Clear Channel Outdoor Holdings, Inc. into Clear Channel Holdings, Inc. (the “Merger”) was intended to qualify as a “reorganization” within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended (the “Code”), and the obligation of each of the parties thereto to effect the Merger was conditioned upon the receipt of U.S. federal income tax opinions to that effect from their respective tax counsels. These tax opinions represent the legal judgment of counsel who rendered the opinions and are not binding on the Internal Revenue Service (the “IRS”) or the courts. If the IRS makes a subsequent determination that the Merger does not qualify as a “reorganization,” then additional tax liability could arise.
Based on our analysis to date of the various factors that will influence whether the Separation resulted in material cash tax liabilities, we do not expect any material cash tax liability resulting from the Separation. However, the analysis of the Separation will continue until the tax return for the 2019 tax year is filed. In addition, there may be some uncertainty with respect to the factors that determine whether the Separation gave rise to cash tax liability, even after appropriate tax returns are filed. Accordingly, we cannot say with certainty that no material cash tax liability will be owed as a result of the Separation and the transactions related thereto. To the extent the Separation and the transactions related thereto do give rise to any cash tax liability, CCOH, iHeartCommunications, iHeartMedia and various other entities would be jointly and severally liable under applicable law for any such amounts. The allocation of such liabilities among the various members of the iHeartMedia Group and CCOH are addressed by a new tax matters agreement that was entered into in connection with the Separation.


In addition, we expect that, as a result of the cancellation of indebtedness income realized by the debtors in connection with iHeartMedia’s Chapter 11 proceeds, certain of our tax attributes will becure period, subject to significant reduction or elimination. The tax matters agreement that was entered into in connectionour compliance with the Separation provides that we will not be compensated as a result of such reduction.other continued listing requirements.
Transfers of our equity in connection with iHeartMedia’s Chapter 11 proceedings and cancellation of indebtedness income realized by the debtors in the iHeartMedia Chapter 11 proceedings may impair our ability to utilize our U.S. federal income tax NOL carryforwards in future years.
Under U.S. federal income tax law, a corporation is generally permitted to deduct from taxable income NOLs carried forward from prior years. Under applicable law, we were attributed a portion of the U.S. federal NOL carryforward and certain other tax attributes of the iHeartMedia consolidated group prior to the Separation (in general, the portion of the federal NOL carryforward attributable to our operations and expenses). To the extent any such tax attributes survive the reduction in tax attributes described above, our ability to utilize these tax attributes to offset future taxable income and to reduce U.S. federal income tax liability is subject to certain requirements and restrictions. Specifically, we experienced an “ownership change,” as defined in Section 382 of the Code, as a result of the Separation. Accordingly, our ability to use any surviving tax attributes may be substantially limited, which could have a negative impact on our financial position and results of operations. Under Section 382 of the Code, absent an applicable exception, if a corporation undergoes an “ownership change,” the amount of U.S. federal income tax attributes existing prior to the change that it can utilize to offset its taxable income in future taxable years generally is subject to an annual limitation in an amount equal to the value of its stock immediately prior to the ownership change multiplied by the long-term tax-exempt rate, subject to adjustments to reflect the differences between the fair market value of the corporation’s assets and the tax basis in such assets and various other complex rules and adjustments.
Additionally, as noted above, we expect that certain of our tax attributes will be subject to significant reduction or elimination as a result of the cancellation of indebtedness income realized by the debtors in connection with iHeartMedia’s Chapter 11 proceedings.
Accordingly, thereNo assurance can be no assurancegiven that we will be able to utilize our U.S. federal income tax NOL carryforwardsregain compliance with the minimum share price requirement or certain of ourmaintain compliance with the other tax attributes to offset future taxable income.
We may be more susceptible to adverse events as a resultcontinued listing requirements of the Separation.
We may beNYSE. If we are unable to achieve some or all of the benefits that we expect to achieve as an independent company in the time we expect, if at all. As a result of the Separation, we may be more susceptible to market fluctuations and have less leverage with suppliers, and we may experience other adverse events.
We may be unable to make, on a timely or cost-effective basis, the changes necessary to operate as an independent publicly-traded company, and we may experience increased costs as a result of the Separation.
Prior to the Separation, iHeartMedia provided Clear Channel Outdoor Holdings, Inc. with various corporate services. Under a transition services agreement (the “Transition Services Agreement”), iHeartMedia and/or its affiliates are providing certain administrative and support services and other assistance to us, which we are using and will continue to use in the conduct of our businesses as such business was conducted prior to the Separation generally for one year (subject to certain rights of ours to extend for up to an additional year). Following the Separation and the expiration of the Transition Services Agreement, we will need to provide internally or obtain from unaffiliated third parties the services we previously received from iHeartMedia and its affiliates. We negotiated our arrangements with iHeartCommunications in the context of a parent-subsidiary relationship prior to our initial public offering and we negotiated the terms of the Transition Services Agreement in the context of iHeartMedia’s Chapter 11 proceedings. We may be unable to replace these services in a timely manner or on terms and conditions as favorable as those we received from iHeartMedia prior to the Separation. We may be unable to successfully establish the infrastructure or implement the changes necessary to operate independently or may incur additional costs. If we fail to obtain the services necessary to operate effectively or if we incur greater costs in obtaining these services, our business, financial condition and results of operations may be adversely affected.


The Separation resulted in changes in our senior management team and may result in the loss of other key employees.
Our business is dependent upon the performance of our senior management team and other key individuals. The Separation resulted in changes to our senior management team, including our chief executive officer and chief financial officer. We are continuing to identify replacements for additional key positions following the Separation. Competition for these individuals is intense. In addition, many of our key employees are at-will employees who are under no obligation to remain with us, and may decide to leave as a result of the uncertainty surrounding the business following the Separation or for a variety of personal or other reasons beyond our control. If members of our senior management or key individuals decide to leave in the future, if we decide to make further changes to the composition of, or the roles and responsibilities of, these individuals, or if we are not successful in attracting, motivating and retaining other key employees, our business could be adversely affected.
The Separation resulted in changes to the composition of our board of directors.
In connectionregain compliance with the Separation, members of our board of directors were replaced with new directors who were selected by a committee consisting of certain holders of interestsNYSE’s continued listing requirements and creditors in iHeartMedia’s Chapter 11 proceedings. Our new board of directors does not have the same level of experience with our historical operations as our previous board. Our new board of directors may pursue business plans and growth strategies that differ from our previous business plans and growth strategies. Any new business plans or growth strategies implemented by the new board of directors, including plans to address our capital structure and reduce our leverage, if unsuccessful, may lead to material unanticipated problems, expenses, liabilities, competitive responses, loss of customer and other business relationships, and an adverse impact on operations and financial results.
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 our future results.
The historical financial information included in this Quarterly Report on Form 10-Q does not necessarily reflect the results of operations and financial position we would have achieved as an independent public company not controlled by iHeartMedia during the periods presented, or those that we will achieve in the future. Prior to the Separation, we operated as part of iHeartMedia’s broader corporate organization, and subsidiaries of iHeartMedia performed various corporate functions for us. Our historical financial information reflects allocations of corporate expenses from iHeartMedia for these and similar functions. These allocations may not reflect the costs we will incur for similar services in the future as an independent publicly-traded company.
Our historical financial information does not reflect expected changes in our organizational structure as part of the Separation, including changes in our capital structure, tax structure and new personnel needs. As part of iHeartMedia, we enjoyed certain benefits from iHeartMedia’s operating diversity, size and purchasing power and we lost these benefits after the Separation. As an independent entity, we may be unable to purchase goods or services and technologies, such as insurance and health care benefits and computer software licenses, on terms as favorable to us as those we obtained as part of iHeartMedia prior to the Separation.
Following the Separation, we are also now responsible for the additional costs associated with being an independent publicly-traded company, including costs related to corporate governance, investor and public relations and public reporting. In addition, certain costs incurred by subsidiaries of iHeartMedia, including executive oversight, accounting, treasury, tax, legal, human resources, occupancy, procurement, information technology and other shared services, have historically been allocated to us by iHeartMedia, but these allocations may not reflect the level of these costs to us as we provide these services ourselves. Therefore, our historical financial statements may not be indicative of our future performance as an independent publicly-traded company. We cannot assure you that our operating results will continue at a similar level.
In connection with the Separation, iHeartMedia agreed to indemnify us and we agreed to indemnify iHeartMedia for certain liabilities. There can be no assurance that the indemnities from iHeartMedia will be sufficient to insure us against the full amount of such liabilities.
Pursuant to agreements that we entered into with iHeartMedia in connection with the Separation, iHeartMedia agreed to indemnify us for certain liabilities, and we agreed to indemnify iHeartMedia and its subsidiaries for certain liabilities. For example, we will indemnify iHeartMedia and its subsidiaries for liabilities arising from or accruing prior to the closing date of the Separation to the extent such liabilities related our business, assets and liabilities as well as liabilities relating to a breach of the Settlement and Separation Agreement governing the terms of the Separation. However, third parties might seek to hold us responsible for liabilities that iHeartMedia agreed to retain, and there can be no assurance that iHeartMedia will be able to fully satisfy its indemnification obligations under these agreements. In addition, indemnities that we may be required to provide to iHeartMedia and its subsidiaries could be significant and could adversely affect our business.


Risks Related to Ownership of our Common Stock
The following risk factors disclosed under the caption “Risks Related to Ownership of our Common Stock” below amend, restate and replace all of the risk factors under the caption “Risks Related to Our Class A Common Stock” in Part I, Item 1A of our Annual Report:
Our stock price may be volatile or may decline regardless of our operating performance.
The market price for our common stock may be volatile. You may not be ableis suspended from trading and delisted, it could have adverse consequences including, among others, reducing the number of investors willing to resell your shares athold or aboveacquire our common stock, reducing the price you paid for them, due to fluctuations in theliquidity and market price of our common stock, which may be caused byadverse publicity and a number of factors, many of which we cannot control, including those described under the heading “-Risks Related to our Business”reduced interest in us from investors, analysts and the following:
our limited history operating as an independent public company;
our quarterly or annual earnings or those of other companies in our industry;
changes in accounting standards, policies, guidance, interpretations or principles;
changes in financial estimates by any securities analysts who follow our common stock, our failure to meet these estimates or failure of those analysts to initiate or maintain coverage of our common stock;
downgrades by any securities analysts who follow our common stock;
future sales of our common stock by our officers, directors and significant stockholders, including stockholders that were former creditors of iHeartMedia that received their common stock at the time of the Separation in connection with iHeartMedia’s Chapter 11 proceedings;
market conditions or trends in our industry or the economy as a whole and, in particular, in the advertising industry;
investors’ perceptions of our prospects;
announcements by us of significant contracts, acquisitions, joint ventures or capital commitments; and
changes in key personnel.
participants. In addition, the stock markets have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies. In the past, stockholders have instituted securities class action litigation following periods of market volatility. If we were involved in securities litigation, we could incur substantial costs, and our resources and the attention of management could be diverted from our business.
If securitiesa suspension or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, our stock price and trading volume could decline.
The trading market for our common stock depends in part on the research and reports that securities or industry analysts publish about us or our business. If one or more of the analysts who covers us downgrades our common stock or publishes inaccurate or unfavorable research about our business, our stock price would likely decline. If one or more of these analysts ceases coverage of us or fails to publish reports on us regularly, demand for our common stock could decrease, which could cause our stock price and trading volume to decline.
Future sales of our common stock in the public market, or the perception that such sales may occur, could lower our stock price, and any additional capital raised by us through the sale of our common stock, or the issuance of equity awards by us, may dilute your ownership in us.
Sales of substantial amounts of our common stock in the public market by our stockholders, or the perception that these sales could occur, could adversely affect the price of our common stock anddelisting could impair our ability to raise additional capital through the sale of additional shares. At the time of the Separation, nearly 90% of our outstanding common stock was distributed to the former creditors of iHeartMedia in connection with iHeartMedia’s Chapter 11 proceedings,public markets and these former creditors may not be long-term holders of our common stock. None of the shares of common stock issued to these stockholders in connection with iHeartMedia’s Chapter 11 proceedings are “restricted securities” and, except in the case of “affiliates” of the Company, may be sold freely without restriction into the market.


Any additional capital raised by us through the sale of our common stock may also dilute your ownership in us. In the future, we may also issue our common stock in connection with acquisitions or investments. We cannot predict the size of any such future issuances, but the amount of shares of our common stock issued in connection with an acquisition or investment could constitute a material portion of the then-outstanding shares of our common stock.
We currently do not pay regularly-scheduled dividends on our common stock.
In the past, we have paid certain special dividends but we do not pay regularly-scheduled dividends and are subject to restrictions on our ability to pay dividends should we seek to do so in the future. We are a holding company with no independent operationsattract and no significant assets other than the stockretain employees by means of our subsidiaries. In addition, the Certificate of Designation for our Series A Preferred Stock contains, the indentures governing our senior notes and our senior subordinated notes contain, restrictions on our ability to pay dividends. We, therefore, are dependent upon the receipt of dividends or other distributions from our subsidiaries to pay dividends. In addition, our senior notes and our senior subordinated notes contain restrictions on our ability to pay dividends. If we elect not to pay dividends in the future or are prevented from doing so, the price of our common stock must appreciate in order for you to realize a gain on your investment. This appreciation may not occur.equity compensation.
The holders of our preferred stock have rights that are senior to the rights of a holder of our common stock and the documents governing our preferred stock include certain restrictive covenants.
As part of the Separation, we issued $45.0 million of Series A Preferred Stock to third party investors. The Series A Preferred Stock provides that, among other things, in the event of our bankruptcy, dissolution or liquidation, the holders of our Series A Preferred Stock must be satisfied before any distributions can be made to the holders of our common stock. As a result of our Series A Preferred Stock’s superior rights relative to our common stock, the right of holders of our common stock to receive distributions from us may be diluted and may be limited by these rights. Should we default or fail to pay dividends, in cash, on the Series A Preferred Stock for twelve consecutive quarters, the holders of the Series A Preferred Stock will have the right to appoint one director to our board. Additionally, the Certificate of Designation for our Series A Preferred Stock limits our ability to incur additional debt or to make certain restricted payments that could also affect the holders of our common stock.
Delaware law and certain provisions in our certificate of incorporation may prevent efforts by our stockholders to change the direction or management of our company.
Our certificate of incorporation and our by-laws contain provisions that may make the acquisition of our company more difficult without the approval of our board of directors, including, but not limited to, the following:
for the first three years following the Separation, our board of directors will be divided into three equal classes, with members of each class elected in different years for different terms, making it impossible for stockholders to change the composition of our entire board of directors in any given year;
action by stockholders may only be taken at an annual or special meeting duly called by or at the direction of a majority of our board of directors;
advance notice for all stockholder proposals is required;
except as otherwise provided by a certificate of designations, any director or the entire board of directors may be removed from office as provided by Section 141(k) of the Delaware General Corporation Law (the “DGCL”); and
except as required by law, for the first three years following the Separation, any amendment, alteration, rescission or repeal of our certificate of incorporation requires the affirmative vote of at least 66 2/3% of the total voting power of all outstanding shares of capital stock entitled to vote thereon, voting together as a single class.
These and other provisions in our certificate of incorporation, bylaws and Delaware law could make it more difficult for stockholders or potential acquirers to obtain control of our board of directors or initiate actions that are opposed by our board of directors, including actions to delay or impede a merger, tender offer or proxy contest involving our company. The existence of these provisions could negatively affect the price of our common stock and limit opportunities for you to realize value in a corporate transaction.


Our certificate of incorporation designates the Court of Chancery of the State of Delaware, subject to certain exceptions, as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.
Our certificate of incorporation provides that the Court of Chancery of the State of Delaware, subject to certain exceptions, is the sole and exclusive forum for (i) any derivative action or proceeding brought on our behalf, (ii) any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers or other employees to us or our stockholders, (iii) any action asserting a claim against us arising pursuant to any provision of the DGCL, our certificate of incorporation or our bylaws or (iv) any other action asserting a claim against us that is governed by the internal affairs doctrine. Any person or entity purchasing or otherwise acquiring any interest in shares of our capital stock shall be deemed to have notice of and to have consented to the provisions of our certificate of incorporation described above. This choice of forum provision may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers or other employees, which may discourage such lawsuits against us and our directors, officers and employees. Alternatively, if a court were to find these provisions of our certificate of incorporation inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could adversely affect our business and financial condition.
Other than the items set forth above, 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, 2018.
ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The following table sets forth our purchases of shares of our Class A common stock made during the quarter ended June 30, 2019:2020:
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 ProgramsMaximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs
April 1 through April 30458,382  $0.60  —  $—  
May 1 through May 313,974  $0.79  —  —  
June 1 through June 30114,029  $0.98  —  —  
Total576,385  $0.68  —  $—  
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
April 1 through April 30—
 

 —
 $—
May 1 through May 3155,835
 5.18
 —
 —
June 1 through June 30440,087
 4.85
 —
 —
Total495,922
 $4.89
 —
 $—
(1)The shares indicated consist of shares of our common stock tendered by employees to us during the three months ended June 30, 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.
(1)The shares indicated consist of shares of our common stock tendered by employees to us during the three months ended June 30, 2019 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.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES
None.
36
ITEM 4.  MINE SAFETY DISCLOSURES
Not applicable.

ITEM 5.  OTHER INFORMATION
None.




ITEM 6.  EXHIBITS
Exhibit

Number
Description
3.1
3.24.1
AmendedRights Agreement, dated as of May 19, 2020, between the Company and Restated Bylaws of Clear Channel Outdoor Holdings, Inc.Computershare Trust Company, N.A., as rights agent (incorporated by reference to Exhibit 3.24.1 to Clear Channel Outdoor Holdings, Inc.the Company's Current Report on Form 8-K filed on May 2, 2019)19, 2020).
4.110.1
Certificate of Designation of Series A Perpetual Preferred Stock (incorporated by referenceFirst Amendment to Exhibit 4.1 to Clear Channel Outdoor Holdings, Inc. Current Report on Form 8-K filed on May 2, 2019).
4.2
Supplemental Indenture, dated as of May 1, 2019, by and among Clear Channel Worldwide Holdings, Inc., Clear Channel Outdoor Holdings, Inc., the other guarantors party thereto and U.S. Bank National Association, as trustee (Series A Senior Notes) (incorporated by reference to Exhibit 4.2 to Clear Channel Outdoor Holdings, Inc. Current Report on Form 8-K filed on May 2, 2019).
4.3
Supplemental Indenture, dated as of May 1, 2019, by and among Clear Channel Worldwide Holdings, Inc., Clear Channel Outdoor Holdings, Inc., the other guarantors party thereto and U.S. Bank National Association, as trustee (Series B Senior Notes) (incorporated by reference to Exhibit 4.3 to Clear Channel Outdoor Holdings, Inc. Current Report on Form 8-K filed on May 2, 2019).
10.1
Transition ServicesCredit Agreement, dated as of May 1, 2019, byJune 12, 2020, among the Company, the other loan parties thereto and among iHeartMedia, Inc., iHeartMedia Management Services, Inc., iHeartCommunications, Inc. and Clear Channel Outdoor Holdings, Inc. (incorporatedDeutsche Bank AG New York Branch, as administrative agent (incorporated by reference to Exhibit 10.1 to Clear Channel Outdoor Holdings, Inc.the Company's Current Report on Form 8-K filed on May 2, 2019).F
10.2
Tax Matters Agreement, dated as of May 1, 2019, by and among iHeartMedia, Inc., iHeartCommunications, Inc., iHeart Operations, Inc., Clear Channel Holdings, Inc., Clear Channel Outdoor Holdings, Inc., and Clear Channel Outdoor, LLC (incorporated by reference to Exhibit 10.2 to Clear Channel Outdoor Holdings, Inc. Current Report on Form 8-K filed on May 2, 2019).
10.3
Revolving Loan Agreement, dated as of May 1, 2019, by and among iHeartCommunications, Inc., Clear Channel Outdoor, LLC and Clear Channel International Ltd. (incorporated by reference to Exhibit 10.3 to Clear Channel Outdoor Holdings, Inc. Current Report on Form 8-K filed on May 2, 2019).
10.4
Series A Investor Rights Agreement, dated as of May 1, 2019, by and among Clear Channel Outdoor Holdings, Inc., Clear Channel Worldwide Holdings, Inc. and the purchaser listed therein (incorporated by reference to Exhibit 10.4 to Clear Channel Outdoor Holdings, Inc. Current Report on Form 8-K filed on May 2, 2019).
10.5
First Amendment to Employment Agreement, dated as of March 26, 2019, between Clear Channel Outdoor Holdings, Inc. and Scott Wells (incorporated by reference to Exhibit 10.1 to Clear Channel Outdoor Holdings, Inc. Current Report on Form 8-K filed on April 5, 2019).
10.6
Employment Agreement, dated as of May 1, 2019, by and between Clear Channel Outdoor Holdings, Inc. and Brian D. Coleman (incorporated by reference to Exhibit 10.5 to Clear Channel Outdoor Holdings, Inc. Current Report on Form 8-K filed on May 2, 2019).
10.7
Employment Agreement, dated as of May 1, 2019, by and between Clear Channel Outdoor Holdings, Inc. and Jason A. Dilger (incorporated by reference to Exhibit 10.6 to Clear Channel Outdoor Holdings, Inc. Current Report on Form 8-K filed on May 2, 2019).
10.8
First Amendment to Employment Agreement, dated as of May 1, 2019, by and between Clear Channel Outdoor Holdings, Inc. and Lynn A. Feldman (incorporated by reference to Exhibit 10.7 to Clear Channel Outdoor Holdings, Inc. Current Report on Form 8-K filed on May 2, 2019).
10.9
Form of Indemnification Agreement (incorporated by reference to Exhibit 10.7 to Clear Channel Holdings, Inc.'s Registration Statement on Form S-4 (File No. 333-228986) filed with the Securities and Exchange Commission on March 29, 2019).
10.10
Stock Option Agreement under the Clear Channel Outdoor Holdings, Inc. 2012 Amended and Restated Stock Incentive Plan, by and between C. William Eccleshare and Clear Channel Outdoor Holdings, Inc. (incorporated by reference to Exhibit 10.1 to Clear Channel Outdoor Holdings, Inc. Current Report on Formorm 8-K filed on June 7, 2019)15, 2020).
10.1122.1*
Restricted Stock Unit Award Agreement under the Clear Channel Outdoor Holdings, Inc. Amended and Restated 2012 Amended and Restated Stock Incentive Plan, by and between C. William Eccleshare and Clear Channel Outdoor Holdings, Inc. (incorporated by reference to Exhibit 10.2 to Clear Channel Outdoor Holdings, Inc. Current Report on Form 8-K filed on June 7, 2019).List of Subsidiary Guarantors.
31.1*
Certification Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*
Certification Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.


32.1**
Exhibit
Number
Description
32.1**
Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2**
Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101*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.
104Cover Page Interactive Data Files.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.
August 7, 2020CLEAR CHANNEL OUTDOOR HOLDINGS, INC.
August 1, 2019 /s/ JASON A. DILGER    
Jason A. Dilger
Chief Accounting Officer


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