Company: CCO
Filing Date: 2025-02-24
Form Type: 10-K
Source: 0001334978-25-000008
Chunk: 94

Company: Clear Channel Outdoor Holdings, Inc.
Filing Date: 2025-02-24
Form: 10-K
Item: Item 7
Chunk 94
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 3.0%.

•A discount rate of 10.0% was applied to reporting units in continuing operations, while reporting units in discontinued operations were assigned discount rates ranging from 12.0% to 15.0%, reflecting the varying risks associated with future cash flows.

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Based on this analysis, a hypothetical 10% reduction in the estimated fair value of each reporting unit with goodwill would not have resulted in an impairment. Additionally, the table below shows the decrease in the fair value of each reporting unit that would have resulted from a 100-basis-point decrease in revenue growth and profit margin assumptions, and a 100-basis-point increase in the discount rate assumption. These changes would not have led to impairment, as the fair value of each reporting unit would still exceed its carrying value.

(In thousands)Decrease in fair value of reporting unitRevenue growth rate  (100 basis point decrease)Profit margin  (100 basis point decrease)Discount rate (100 basis point increase)America$(723,308)$(142,415)$(621,728)Airports(78,147)(46,441)(62,156)Europe-North(91,780)(63,528)(70,244)

There were no indicators of impairment as of December 31, 2024. While we believe our estimates and assumptions are reasonable, the assumptions are not necessarily indicative of future results, and it is possible that a material change could occur. If future results are not consistent with our assumptions and estimates, we may be exposed to impairment charges in the future.

Leases

The most significant estimate used by management in accounting for leases is the incremental borrowing rate (“IBR”), which is used to determine the present value of lease payments at the commencement of a lease. An increase in the IBR would decrease the net present value of minimum lease payments, which could reduce the likelihood of a lease being classified as a finance lease. 

For our U.S. business, we calculate the IBR monthly based on the yield of our most recently issued secured debt, currently the CCOH 7.875% Senior Secured Notes. This yield is extrapolated over a 30-year time horizon using a composite credit rating yield curve. For our international operations, we use a portfolio approach based on interest rate parity theory. This approach adjusts the U.S. IBR to derive country-specific rates, considering expected currency appreciation or depreciation relative to the U.S. Dollar.

Tax Provisions

Our estimates of income taxes, including