Company: CCO
Filing Date: 2025-06-12
Form Type: CORRESP
Source: 0001334978-25-000016
Chunk: 1

Company: Clear Channel Outdoor Holdings, Inc.
Filing Date: 2025-06-12
Form: CORRESP
Chunk 1
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 the opportunity to clarify the nature of its revenue and financial statement presentation. Integrated Out-of-Home Advertising Model The Company derives substantially all its revenue from a single, integrated out-of-home advertising business. The Company delivers advertising through display structures it owns or operates, along with providing related creative, production and installation services. The Company does not operate a separate leasing business; rather, all customer arrangements reflect a unified advertising solution executed by the Company’s vertically-integrated teams. The delivery model, contract economics and customer experience are uniform across the Company’s business and its customers. 1

Presentation Consistent with the Objectives of Rule 5-03 of Regulation S-X

The Company understands that Rule 5-03 of Regulation S-X (“Rule 5-03”) seeks the disaggregation of revenue across economically distinct activities. As disclosed in Note 2 (page 58) and Note 5 (page 65) of the Form 10-K, certain customer contracts are accounted for as operating leases under Accounting Standards Codification (“ASC”) 842, and others under ASC 606. While revenue accounted for under ASC 842 exceeds 10% of the Company’s total revenue, the Company believes separate income statement presentation would not advance the objectives of Rule 5-03 because, as noted above, the Company’s revenue arises from a single, integrated advertising operation, not from economically distinct activities. Separating revenue that is recognized as a lease for accounting purposes but that is not a distinct economic activity could mislead investors by suggesting a fragmented business model that does not reflect the economic reality of the Company’s operations. There is virtually no difference in the operating margins and cash flows for an advertising sales contract recognized under ASC 606 versus ASC 842, as the pattern of recognition of revenues and expenses is substantively the same, as discussed in the section below.

As more fully explained below, the Company believes its current presentation aligns with the economic substance of its business and how management views and operates the Company. It also supports comparability for investors, as it is consistent with the income statement presentation used by other companies in the Company’s industry.

Revenue Classification Reflects Accounting Criteria, Not Operational Substance

As previously noted, certain customer sales contracts are accounted for as operating leases under ASC 842, and others under ASC 606. This distinction arises solely from the technical accounting criteria of these standards. ASC 842 requires accounting for certain of the Company’s contracts as a lease because, in such cases, the customer has the enforceable right to change the ad copy