Company: CCO
Filing Date: 2025-06-12
Form Type: CORRESP
Source: 0001334978-25-000016
Chunk: 2

Company: Clear Channel Outdoor Holdings, Inc.
Filing Date: 2025-06-12
Form: CORRESP
Chunk 2
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 installed on a specified physical display structure throughout the contract term; ASC 842 views this right as a right to control the advertising display, and thus as a lease. Arrangements that do not meet the definition of a lease, namely because the customer does not have the right to request a change of the ad copy, are accounted for under ASC 606.

Operationally and economically, there is no difference in how the Company delivers services under these contracts. The same assets and service teams support both types of contracts, and revenue for the same physical display can be recognized under ASC 842 for one customer contract and under ASC 606 for another, possibly even in the same month. The act of installing ad copy at the beginning of the contract term or throughout the contract term is performed by the same personnel, using the same materials, and is completed in the same physical manner, without regard to the distinction between ASC 606 and ASC 842. Furthermore, the timing and pattern of revenue recognition under ASC 606 and ASC 842 are substantively the same, as revenue for display services is recognized on a straight-line basis over the contract term under both standards.

No Operational Basis for Separate Presentation of Revenue or Expense

All aspects of the Company’s advertising operations, including real estate, sales, installation, maintenance and creative services, are managed by integrated teams without regard to whether a customer contract is accounted for under ASC 606 or ASC 842. The Company’s sales personnel are compensated using the same commission structure, regardless of the frequency of installation of ad copy on a display. Furthermore, the Company’s rent expense owed to third-party owners of the real estate for the Company’s display locations is based on the location; it is unaffected by whether the customer contract is accounted for under ASC 606 or ASC 842. Additionally, the Company does not distinguish between revenue accounted for under ASC 606 or ASC 842 in its earnings calls or in its discussions with investors, or for internal management reporting purposes, as the Company does not consider these to represent different revenue streams. The Company does not manage, allocate resources or assess performance separately based on revenue classification, and accordingly, it does not separately track direct operating expenses on that basis.

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Under Rule 5-03.2 of Regulation S-X, direct operating expenses must be presented in a manner consistent with revenue categories. The Company’s operating expenses are not managed or tracked by ASC 606 and ASC 842 classification because the Company operates a single integrated advertising business and does not