Company: CCO
Filing Date: 2025-02-24
Form Type: 10-K
Source: 0001334978-25-000008
Chunk: 96

Company: Clear Channel Outdoor Holdings, Inc.
Filing Date: 2025-02-24
Form: 10-K
Item: Item 7A
Chunk 96
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Table of Contents

ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to market risks from changes in interest rates, foreign currency exchange rates and inflation, which are interrelated. While inflation has moderated from its peak in 2022 and the U.S. Federal Reserve reduced the federal funds rate in 2024, inflation remains elevated, and high interest rates continue to impact our cost of debt. Future fluctuations in these factors are uncertain and could continue to affect our financial results.

Interest Rate Risk

Our financial results are affected by changes in interest rates, as a portion of our debt (specifically the Term Loan Facility, Revolving Credit Facility, Receivables-Based Credit Facility, and a portion of the CCIBV Term Loan Facility) bears interest at variable rates. As of December 31, 2024, following the March 2024 Debt Transactions, variable-rate debt accounted for approximately 9% of our total long-term debt, down from 22% as of December 31, 2023. Upon repayment of the CCIBV Term Loan Facility, which we expect to complete in 2025 using net proceeds from the sale of the Europe-North businesses, we anticipate the proportion of our total debt that is variable-rate will decrease to 8%, assuming no other changes to debt balances.

In response to inflation, the U.S. Federal Reserve raised interest rates in 2022 and 2023, which increased our weighted average cost of debt. After remaining steady for a year, the federal funds rate was reduced in late 2024 as inflation slowed. As a result, and combined with the reduced proportion of variable-rate debt, our weighted average cost of debt decreased slightly from 7.5% at December 31, 2023, to 7.4% at December 31, 2024.

Higher interest rates generally impact our financial results through increased interest expense. Assuming current borrowings, a 100-basis-point increase in the Secured Overnight Financing Rate would have resulted in a $5.1 million increase in our 2024 interest expense. This analysis assumes no actions from management to mitigate the impact of interest rate increases and does not consider the potential broader economic effects of such rate changes. Conversely, a decrease in interest rates could lead management to consider actions to capitalize on such movements.

Foreign Currency Exchange Rate Risk

We have historically operated in America, Europe, Singapore and Latin America, with foreign operations den