Company: CCO
Filing Date: 2025-02-24
Form Type: 10-K
Source: 0001334978-25-000008
Chunk: 93

Company: Clear Channel Outdoor Holdings, Inc.
Filing Date: 2025-02-24
Form: 10-K
Item: Item 7
Chunk 93
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 their carrying amounts may not be recoverable, which occurs when the undiscounted cash flows expected to be generated by the assets are lower than their carrying amounts. Management applies judgment in estimating future cash flows, including forecasting the useful lives of the assets and selecting the discount rate that reflects the risk inherent in those cash flows. When assets are determined to be unrecoverable and we intend to hold the asset for continued use, we reduce their carrying amount to fair value. If the asset is held for sale, we reduce its carrying amount to fair value less costs to sell. To estimate fair value, we use assumptions such as future cash flows, industry growth rates, discount rates and salvage values.

In 2024, no impairments were recognized for long-lived assets in continuing operations. However, we recognized an impairment charge of $18.1 million related to long-lived assets in discontinued operations, as the carrying values of certain asset groups in our Latin American businesses exceeded their estimated future cash flows. We used a market transaction approach to estimate the fair value of these assets. Additionally, as of December 31, 2024, we recognized a $44.4 million loss related to the Brazil business in conjunction with its classification as held for sale.

As of December 31, 2024, there were no additional indicators of impairment. However, if actual results differ from our assumptions, we may be exposed to future impairment losses that could be material to our results of operations.

Goodwill

We perform an impairment test on goodwill at least annually as of July 1, or more frequently if events or changes in circumstances indicate potential impairment. Our impairment testing is based on a discounted cash flow approach, which estimates future cash flows expected to be generated by the related assets, discounted to their present value using a risk-adjusted discount rate. Terminal values are also estimated and discounted to present value.

Assessing the recoverability of goodwill requires significant judgment and assumptions, including revenue, operating margins, growth rates and discount rates. These assumptions are based on our budgets, business plans, economic projections and marketplace data.

In 2024, no impairments were recognized on goodwill. The following assumptions were used in our annual impairment test performed as of July 1, 2024 to determine the fair value of our reporting units:

•Expected cash flows for the initial 4.5-year period were based on detailed, multi-year forecasts from each operating segment, reflecting the advertising outlook across our businesses.

•Cash flows were projected to grow at a perpetual growth rate of