Company: CCO
Filing Date: 2025-02-24
Form Type: 10-K
Source: 0001334978-25-000008
Chunk: 114

Company: Clear Channel Outdoor Holdings, Inc.
Filing Date: 2025-02-24
Form: 10-K
Item: Item 8
Chunk 114
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 Company’s lease agreements do not contain material residual value guarantees or restrictive covenants.Lease ValuationThe implicit rate in most of the Company’s lease agreements is not readily determinable. Therefore, the Company uses the incremental borrowing rate (“IBR”) to calculate the present value of lease payments at lease commencement. The IBR represents the rate the Company would pay to borrow the same amount on a collateralized basis over a similar term and in a similar economic environment.Refer to Note 7 for additional disclosures about the Company’s operating leases.Rent Abatements and Government AssistanceIn response to COVID-19, the Company renegotiated contracts to better align fixed site lease expenses with reduced revenue and also received rent assistance from certain government entities. The Company applied the Financial Accounting Standards Board (“FASB”) April 2020 guidance on rent concessions, recognizing reductions in fixed rent payments for continuing operations of $10.3 million, $24.9 million and $46.9 million in 2024, 2023 and 2022, respectively. Included in these rent abatements was government assistance for COVID-19 relief totaling $9.0 million, $10.6 million and $13.3 million in 2024, 2023 and 2022, respectively, primarily for the Company’s U.S. airports. These reductions in site lease costs were partially offset by variable rent expense, and negotiated deferrals of rent payments did not reduce rent expense.Asset Retirement ObligationsASC 410-20 requires the Company to estimate its obligation to dismantle and remove its advertising structures from leased land and restore the site to its original condition upon the termination or non-renewal of a lease or contract. The Company’s asset retirement obligations are reported in “Other liabilities” on the Consolidated Balance Sheets. The Company recognizes the present value of these obligations when incurred, using estimates of third-party costs for structure dismantling and site reclamation. The liability assumes asset removal will occur over the next 50 years, and the interest rate used to calculate the present value is based on an estimated risk-adjusted credit rate for that period.When the liability is recognized, the associated costs are capitalized as part of the related advertising structure’s carrying value. Over time, the liability is accreted as an operating expense, and the capitalized cost is depreciated over the asset’s useful life.Refer to Note 12 for additional disclosures about the Company’s asset retirement obligations.Revenue RecognitionThe Company generates revenue primarily from the sale