Clear Channel Outdoor : Annual Report FY 2023

2023 Annual Report

Letter from our CEO

Dear Clear Channel Outdoor Stockholders,

In 2023, we continued to focus on delivering on our strategic roadmap, which is aimed at enhancing the profitability of our business, focusing on our higher-margin U.S. markets and transforming into a technology-fueled, visual media powerhouse reaching a growing pool of advertisers.

For the full year 2023, we generated consolidated revenue of $2.127 billion. Excluding movements in foreign exchange rates*, consolidated revenue was $2.121 billion, a 5.3 percent increase over the prior year. This revenue was ahead of our guidance.

During the fourth quarter of 2023, we experienced improving business trends overall, including a return to growth in America supported by solid execution from our operating team. That dedication was evident throughout 2023, as we worked to methodically monetize our European assets, while continuing to concentrate on expanding our advertiser base, optimizing our deployment of capital and evaluating paths to reduce our corporate expenses. I am thankful for the many contributions and creative energy our Company-wide team brings to the fold every day.

Following the completion of the sales of our businesses in Switzerland, Italy and France, as well as our entry into an agreement to sell our business in Spain, we commenced processes to sell our Europe-North segment and our businesses in Latin America. The sales of these assets will allow us to streamline our organization and to focus on our higher-margin markets domestically. We believe these efforts will further strengthen the operating leverage in our business and elevate our ability to grow Adjusted EBITDA and cash flow, and improve liquidity, in support of our priority to reduce leverage over the next few years.

Looking ahead, the out-of-home industry is forecasted to deliver healthy growth for the full year 2024, and we believe that we are well-positioned to deliver accordingly given the improving outlook in our largest markets and the strength of our Airports segment, coupled with the investments we have made in modernizing our asset base to serve a greater range of advertisers. We are moving the ball forward, with tangible outcomes that we believe will build over time, operationally and financially, as we continue to execute on our strategic plan and remain disciplined in pursuing our vision in the year ahead.

Finally, I would like to thank Brian Coleman for his many years of service to our organization as our Chief Financial Officer. He has been instrumental in charting our financial course, managing our capital structure and contributing to our strategic plan. I look forward to continuing to work with him, in his role as a consultant, along with our Board of Directors, management team and employees, in executing on our roadmap in the year ahead. I would also like to welcome David Sailer as our new CFO, effective as of March 1, 2024. In his previous role as CFO of our domestic businesses, David has been an invaluable member of our senior team in contributing to our financial strategy, operating efficiency initiatives and work to optimize our asset portfolio, and we will continue to benefit from his professionalism and dedication to our mission.

We appreciate your support, and we look forward to updating you on our progress as 2024 unfolds. We invite you to review the information in our Annual Report on Form 10-K that this letter accompanies.

Sincerely,

Scott R. Wells

Chief Executive Officer, Clear Channel Outdoor Holdings, Inc.

*Revenue excluding movements in foreign exchange rates is calculated by converting the current year's revenue in local currency to U.S. dollars using average foreign exchange rates for the prior year.

Chief Executive Officer

• • Serves on Board of Clear Channel Outdoor Holdings, Inc.; previous Board member from 2008 to 2015

• • Served as an Operating Partner at Bain Capital

• • Held prior executive roles at Dell, Bain & Co. and AT&T

David Sailer

EVP, Chief Financial Officer

•

•

•

Served as Executive Vice President, Chief Financial Officer of Clear Channel Outdoor Americas since August 2014 and Executive Vice President of Corporate Development since January 2023

Served as Senior Vice President of FP&A of iHeartMedia, Inc. and, prior to that, held financial and leadership positions across NBC Universal

Nearly two decades of financial experience in media and accounting

EVP, Chief Legal Officer and

Corporate Secretary

• • Served as General Counsel for Wyndham Hotel Group for 6 years and, prior to that, served as Deputy General Counsel and Corporate Secretary for Wyndham Worldwide

• • Held various corporate roles within Cendant Corporation and Lowenstein Sandler

• • Over 20 years of corporate legal experience

SVP, Chief Accounting Officer

• • Over 25 years of accounting and finance experience

• • Served as SVP of Accounting of Clear Channel Outdoor Americas

• • Served as Corporate Controller of Sinclair Broadcast Group

• • Nearly a decade of public accounting experience at Arthur Andersen and Ernst & Young

Chief Executive Officer,

UK & Europe

• • Over 20 years of finance and operational experience with Clear Channel Europe

• • Served as CFO and CEO of Clear Channel UK and, prior to that, served as Group Controller for International

• • Serves as Chairman of Oustmart, the UK's OOH industry trade body, and serves on the Board of the Committee of Advertising Pratice in the UK

• • Half a decade of public accounting and banking experience

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

• ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2023, OR

• ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO

Commission File Number 001-32663

CLEAR CHANNEL OUTDOOR HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

Securities registered pursuant to Section 12(b) of the Act:

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ☐

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes ☐ No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐ Accelerated filer ☒ Non-accelerated filer ☐ Smaller reporting company ☐ Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C.7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of June 30, 2023, the aggregate market value of the common stock beneficially held by non-affiliates of the registrant was approximately $416.2 million based on the closing sales price of the common stock as reported on the New York Stock Exchange.

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes ☒ No ☐

On February 21, 2024, there were 483,720,129 outstanding shares of common stock (excluding 11,044,759 shares held in treasury).

DOCUMENTS INCORPORATED BY REFERENCE

Portions of our Definitive Proxy Statement for the 2024 Annual Meeting of Stockholders, expected to be filed within 120 days of our fiscal year ended December 31, 2023, are incorporated by reference into Part III of this Form 10-K.

CLEAR CHANNEL OUTDOOR HOLDINGS, INC.

TABLE OF CONTENTS

PART I

ITEM 1. BUSINESS

Overview

Clear Channel Outdoor Holdings, Inc. (the "Company", "we" or "us") is one of the world's largest out-of-home advertising companies. With more than 325,000 print and digital displays in 19 countries as part of our continuing operations at December 31, 2023, we provide customized advertising solutions via our asset portfolio of roadside billboards, urban street furniture, airport advertising displays and other displays. By leveraging the scale, reach and flexibility of our diverse portfolio of assets, we connect advertisers with millions of consumers every month. We believe we are at the forefront of driving innovation in the out-of-home advertising industry, and our dynamic advertising platform is broadening the pool of advertisers using our medium through the expansion of digital displays and the integration of data analytics and programmatic capabilities that deliver measurable campaigns that are simpler to buy.

For a discussion of our corporate history, please refer to the "Corporate History" section in Item 1 of ourAnnualReport on Form 10-K for the year ended December 31, 2019, filed with the United States Securities and Exchange Commission ("SEC") on February 27, 2020, which is incorporated herein by reference. Our common stock is listed on the New York Stock Exchange under the symbol "CCO."

Our Industry

We believe out-of-home advertising enjoys a strong and unique position in the media mix. With over 90% of American adults on the road each week, according to data provided by Scarborough Research in 2023, out-of-home offers advertisers a cost-effective advertising medium to reach consumers along their daily journeys in ways that can drive measurable results. Out-of-home's large, creative canvases and access to distinctive features, including three-dimensional embellishments, lighting effects and more, provide advertisers an impactful way to tell creative brand stories. Out-of-home can also provide iconic, strategic locations, with some advertisers maintaining long-term positions to protect their access to key locations. Further, out-of-home can be planned and executed as both a hyper-local, targeted medium and as a scaled, mass-reach medium.

The out-of-home industry is in the midst of a technology-driven transformation, in both format and how it is sold. Modern marketers are looking to target and reach the right audiences with flexibility to change messaging quickly, measure and understand its impact, and to do so with speed, simplicity and transparency. With the growth of digital media and use of audience data, advertisers are able to effectively reach their consumers by selecting the out-of-home inventory that is most likely to be seen by their target audiences, while also being able to alter advertising messages based on dynamic conditions, including time of day and weather, breaking news, changes to advertising strategies and other factors, making their advertising messaging more relevant and effective to their target audiences.

The out-of-home industry continues to grow as a result of increased urbanization and consumer mobility, while other traditional forms of media, such as print, television and radio, have lost ad spend market share as consumer preference for online and app-based content has fragmented their audiences and reduced their reach. According to data published by MAGNA Global in December 2023, global out-of-home revenues are expected to grow at a 4.5% compounded annual growth rate from 2024 to 2028, while most other traditional mediums are expected to shrink or remain relatively flat. We believe that the proliferation of content and distribution models will continue to lead to the fragmentation of other media audiences, which, along with growing advertising avoidance and ad-blocking technology, may further enhance the attractiveness of out-of-home as an advertising medium.

Out-of-home is a defensible ad medium with differentiating factors for a scaled out-of-home business that we believe provide stability to our market position. Our industry is anchored on a foundation of assets that are hard to replicate because they are highly regulated, subject to proprietary relationships with exclusivity provisions, and require deep operational expertise. The out-of-home sector in the United States ("U.S."), particularly billboards, is subject to governmental regulation at the federal, state and local levels, and permits to build new inventory have been limited as a result of restrictive laws. This, along with numerous signage ordinances, can make it challenging for new entrants to build roadside out-of-home assets at scale. In U.S. airports and in international markets, barriers to entry arise due to the complexity of operating major advertising concessions in these environments. Airport, transit and street furniture advertising media are often built on exclusive contracts, and developing these out-of-home assets requires robust relationships with elected officials and regulatory authorities in a vast number of municipalities, as well as specialized expertise in operating complex municipal concessions.

Our Competition

The out-of-home advertising industry is fragmented and highly competitive, consisting of several other large companies such as Outfront Media, Inc. and Lamar Advertising Company in the U.S. and JCDecaux SA in Europe, as well as numerous smaller, local companies operating in a single market or a few local markets. Out-of-home advertising companies compete primarily based on the ability to reach consumers.

We also compete with other advertising media in our respective markets, including mobile, social media, online, broadcast, cable and streaming television, radio, print media, direct mail and other forms of advertising. According to data published by MAGNA Global in December 2023, out-of-home advertising accounts for 3% of the advertising market in the U.S. and ranges from 3% to 12% of the advertising market in the European countries in which we operate, with out-of-home's share of the advertising market varying by country based on a number of factors, including population density, regulation, sociocultural aspects and historic media buying trends.

Our Strategy

We believe the economics of out-of-home are highly attractive at scale, with the finite nature of our inventory generally allowing us to manage our rates when demand increases. We are focused on driving incremental demand for our out-of-home portfolio by differentiating ourselves from our competition. We believe this, along with enhanced operational efficiencies, can provide sustainable long-term revenue growth, as well as greater Segment Adjusted EBITDA margin and operating cash flows. Our strategy to accomplish these goals is based on three pillars - accelerating our digital transformation, prioritizing customer-centricity and driving executional excellence - which are being implemented together with the optimization of our portfolio, as described below.

Accelerating our Digital Transformation

Technological advances continue to transform the out-of-home advertising sector. Modern marketers expect speed, simplicity and transparency, especially from digital media. To respond to these changing marketplace expectations, we are embracing technology to change the way we do business. We aim to transform into a technology-fueled, visual media leader, making out-of-home advertising as easy to plan, buy and measure as an online campaign, but with increased impact and reduced brand risk. We believe that leveraging our technology investments to innovate and modernize the solutions we offer, and to make our solutions more data-driven, easier to buy and faster to launch, will further improve out-of-home's value proposition, strengthening our ability to attract more advertisers to our platform and gain share from other media. In order to modernize the solutions we offer our customers, we have continued to invest in our digital transformation and aim to bring a digital mindset to every aspect of our business, from displays to operations.

Growing our Digital Footprint

We were an early adopter of digital display technology, a dynamic medium that enhances out-of-home's core value proposition by making it even more creative, contextually-relevant and flexible. Conversion of our most customer-demanded inventory to digital continues to be a priority for our business. In 2023, we deployed 116 large format digital billboards in the U.S. and added 1,555 digital displays in Europe (excluding markets that are considered discontinued operations).

Digital assets provide highly attractive economics, enabling us to sell more advertising opportunities and therefore optimizing yield on a per structure basis. Digitization of the asset base has been a proven driver of growth, but we believe it can also be a revenue multiplier. For example, while digital assets represented less than 7% of our total inventory at December 31, 2023, they drove 46% of our revenue from continuing operations in 2023, up from 44% in 2022.

As previously described, the out-of-home advertising industry is expected to continue to grow faster than other traditional advertising mediums over the long-term, with digital out-of-home driving that growth. According to data published by MAGNA Global in December 2023, digital out-of-home revenues are expected to grow at a 10.1% compounded annual growth rate from 2024 to 2028. We seek to capture a significant share of this growth as we continue to deploy additional digital displays across our business and further invest in our teams and infrastructure to accelerate this process.

Enhancing our RADAR Offering

We continue to develop and improve Clear Channel Outdoor RADAR ("RADAR"), our proprietary and industry-first suite of data-driven solutions for planning, measuring and amplifying the impact of out-of-home advertising. First launched in the U.S. in 2016, RADAR utilizes anonymized and/or aggregated mobile location data insights to help brands reach desired audiences, reengage these audiences across other media platforms, and understand how exposure to an out-of-home advertisement influences consumer behavior. The insights RADAR provides enable our clients to deliver highly customized, targeted and measurable out-of-home campaigns, resulting in a more sophisticated approach to delivering messages to the right audiences in the right locations at the right time.

RADAR consists of several solutions, which are built to be interoperable:

• • RADARView® is our audience and campaign planning tool. It analyzes historical mobile location data to rank each of

  our displays in terms of its efficiency in reaching various audience segments and provides a map-based interface that

  combines aggregated demographic data, behavioral insights and location targeting to discover and select the inventory

  that most efficiently delivers a customer's desired audience.

• • RADARConnect® is our campaign amplification solution. It delivers ads across mobile and other devices to re-target audience groups exposed to an out-of-home advertisement, providing clients with a simple, easy-to-activate advertising solution that extends reach of their out-of-home advertising campaigns and drives further impact.

• • RADARProof® is our suite of campaign measurement and attribution solutions, which uses analysis of anonymized and/or aggregated data to understand the behavior of groups of people after they have been exposed to specific campaign ads, enabling us to measure the impact of our advertisers' campaigns on a variety of business objectives, including brand attributes, store visitation, app downloads, online engagement, TV viewership, specific product purchases, travel and tourism, and more.

• • RADARSync® is our data integration platform. It allows us to use customer data across the RADAR tools, enabling customized application of these solutions to customers' specific audience targets and goals. RADARSync also allows us to send RADAR insights to our customers' data and analytics platforms in a privacy-compliant manner, giving customers visibility into how out-of-home performed in the context of their other measured media.

  In 2020, we launched our RADARView solution in Europe. RADARView is now available in our businesses in the

United Kingdom (the "U.K."), Sweden, Belgium and Poland. This offering, including the supplier selection due diligence processes and data collection methods, has been adapted from our U.S. offering to comply with European Union ("E.U.") and U.K. data privacy laws, including the European General Data Protection Regulation and Privacy and Electronic Communications Regulations.

We continue to strengthen our RADAR offering through a range of partnerships that have further elevated our data analytics capabilities and ability to measure the impact of our assets on consumer reach and decision-making, which is helping to reinforce the value of our platform and strengthen our relationships with customers. By continuing to improve audience insights and data solutions to understand the efficacy and relevance of out-of-home campaigns, we believe we can drive continued revenue growth.

Building on our Programmatic Presence

We continue to enhance the value proposition of our programmatic solution set, which uses automated technology, data and algorithms to offer a streamlined, flexible buying process and greater audience targeting and ad measurement capabilities through real-time, biddable digital marketplaces. The programmatic offering brings efficiency to the out-of-home sales process by enabling advertisers to easily buy ads across a range of publishers, giving them the ability to manage their campaigns on a self-service basis and empowering them with a level of flexibility similar to online platforms. Demand Side Platforms ("DSPs") help advertisers buy efficiently through preset buying parameters, which the platform uses to transact in real time, with analysis for optimization of reach, impact, pricing and outcomes. Supply Side Platforms allow publishers like us to connect their inventory to multiple DSPs at once, exposing available inventory to multiple potential buyers while also giving the publisher control over pricing.

Programmatic out-of-home is still an emerging channel, but we believe it, along with other automated trading platforms, has the potential to drive significant growth in the digital out-of-home sector as it has across other digital media types, enabling us to tap into demand from digital marketers who prefer to transact programmatically and work with customers who otherwise would not be buying out-of-home. In the U.S., we have been at the forefront of the programmatic out-of-home space since we pioneered the use of the private marketplace buy type in 2016, and with our differentiated inventory, dedicated sales team, robust technology infrastructure, innovative data solutions and deep industry relationships, we believe we are well-positioned to drive growth and build our leadership position in this expanding market. In 2021, we announced a branded programmatic proposition in Europe called Clear Channel LaunchPAD, which is currently live in our businesses in the U.K., Sweden, Belgium, Finland, the Netherlands, Norway and Poland. With approximately 8,700 screens available as of December 31, 2023 to buy programmatically across these markets, we are one of the leading programmatic media owners in Europe. We also have a programmatic offering in Latin America.

Digitalizing our Operations

We are also investing in digital infrastructure to automate processes involved across the campaign cycle, with the purpose of significantly reducing the time involved in pursuing, winning and executing on contracts. We aim to continuously improve the customer experience across each element of our end-to-end workflow and have made significant progress in our U.S. business, as follows:

• • Planning. We unified our approach to inventory management by creating a real-time view into inventory availability, purchasing history and pricing, and we introduced a team that supports our entire sales organization with a fast-response service, giving visibility into real-time demand and utilization.

• • Buying. We developed a comprehensive system for electronic order processing that captures all relevant data throughout the buying process, and we are further transforming the customer order experience with the exploration of self-service, direct buying opportunities and other direct customer interaction capabilities.

• • Activation. We continue to improve and modernize the systems, software and process infrastructure supporting campaign installations. For example, we automated the generation and delivery of creative production specification sheets, use QR codes to efficiently track and manage printed materials, and introduced technology to optimize installation routes.

• • Reporting and invoicing. We updated our proof-of-performance tools through the use of mobile devices and high quality digital cameras, providing our customers with the ability to verify, in real-time, that their campaigns have been executed. Our Proof-of-Performance reports are now published real-time through our Clear Channel Outdoor Clear Access application, which is directly integrated into our orders system, allowing for faster invoicing and payments.

  Similarly, we continue to invest in digitalizing processes in our European business to improve customer experience, business insights and efficiency, including implementing new or improved technologies in certain of our European markets to better manage marketing, sales, orders, campaigns and operations, with plans to be scaled across our European business.

Prioritizing Customer-Centricity

We seek to further differentiate our products through sales and service and are focused on understanding the needs and desires of various existing and potential customers to make the right investments. We believe we can unlock growth and value by taking a more nuanced approach to our customer segmentation, and accordingly, adding sales channels to better serve the needs of more customer segments is one of our key strategies to access previously unavailable advertising budgets and drive incremental demand. We believe segmenting our customer base by size is an appropriate way to manage and serve customers, as follows:

• • Local and regional clients. We believe these advertisers are highly influenced by trust and long-standing relationships and rely upon our sales team's focused market knowledge and expertise, which requires high-touch, ongoing customer service.

• • Large national advertisers. We are focused on opening doors, building relationships and educating decision-makers to further tap into this market. As we navigate an increasingly complex agency model, in the U.S. we have expanded our traditional Account Executive model with an Agency Partnerships team that is charged with building relationships with the influencers and decision-makers who can impact budget allocations on the front-end. National advertisers are often looking for innovations and first-to-market opportunities, which have led to opportunities for collaboration with our Client Solutions Team, which is charged with selling directly to marketers and driving a customer needs assessment.

• • Small businesses. We believe these customers, who represent an emerging opportunity for us, are looking for simple, flexible ways to drive their business. We are in the early stages of building a new approach to better serve their needs and believe this opportunity is led by automation, data and simplification of the buying process.

Driving Executional Excellence

To respond to customers' increasing desire for faster response times and results, we are focused on increasing the speed, quality and repeatability of our key business processes through measurable outcomes, which we have defined as "executional excellence." We believe that this focus on executional excellence is what enables us to make progress on our other strategic pillars of digital transformation and customer-centricity. Some of our strategic initiatives underlying this pillar include:

• • Investing in growth and development opportunities for our real estate asset portfolio by managing our existing pipeline, delivering digital conversions of existing inventory and adding new digital display locations in accordance with a plan designed to match ad capacity within growth markets;

• • Driving revenue growth opportunities through an increased focus on key account development and management, sales pipeline visibility and management, training to enhance the negotiation skills of our sales teams, and enabling sales team collaboration across channels;

• • Driving "Speed to Market" in our print installation operations by offering better-than-market guarantees to our customers focused on timely execution of campaign delivery (for example, managing the fulfillment process to have all creative in a campaign up within a more narrowly defined window than the typical industry standard);

• • Advancing the development of a central digital operations center that provides efficiency in monitoring and managing our large-format digital displays in the U.S. with a focus on digital uptime performance designed to maximize value to our customers; and

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Clear Channel Outdoor Holdings Inc. published this content on 27 March 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 29 March 2024 11:20:05 UTC.