Clear Channel Outdoor(US:CCO)2020-11-09 11:17Revenue Performance - Consolidated revenue decreased by 31.5% to $447.5 million for the three months ended September 30, 2020, compared to $653.4 million in the same period of 2019[90]. - For the nine months ended September 30, 2020, consolidated revenue decreased by 32.3% to $1.31 billion, down from $1.94 billion in the same period of 2019[90]. - Excluding foreign exchange impacts, consolidated revenue decreased by 33.1% and 32.2% for the three and nine months ended September 30, 2020, respectively[91]. - Revenue decreased by $208.9 million, or 22.5%, during the nine months ended September 30, 2020, compared to the same period in 2019[111]. - Revenue in the Americas segment decreased by $104.5 million, or 31.8%, during the three months ended September 30, 2020, primarily due to COVID-19 impacts[108]. - Americas total digital revenue decreased by 34.8% to $68.1 million during the three months ended September 30, 2020[108]. - Americas total digital revenue decreased by 26.2% to $215.9 million during the nine months ended September 30, 2020, compared to $292.5 million in the same period of 2019[111]. - Europe revenue decreased by $248.8 million, or 31.7%, during the nine months ended September 30, 2020, with the largest reductions occurring in France, the U.K., and Spain[116]. - Europe digital revenue decreased by $59.9 million, or 27.7%, to $156.2 million for the nine months ended September 30, 2020[116]. - Latin America revenue decreased by $167.6 million, or 74.3%, during the nine months ended September 30, 2020, primarily due to the sale of Clear Media[122]. Operating Income and Expenses - Operating income for the three months ended September 30, 2020, was a loss of $75.9 million, compared to a profit of $47.7 million in the same period of 2019, representing a 259.2% decline[90]. - The company incurred impairment charges of $27.3 million for the three months ended September 30, 2020, a 414.4% increase compared to $5.3 million in the same period of 2019[90]. - Consolidated direct operating expenses decreased by $67.5 million, or 18.9%, for the three months ended September 30, 2020, compared to the same period in 2019[92]. - Direct operating expenses decreased by $49.1 million, or 12.2%, during the nine months ended September 30, 2020, largely due to lower site lease expenses[112]. - Consolidated SG&A expenses decreased by $22.3 million, or 17.3%, during the three months ended September 30, 2020, compared to the same period in 2019[95]. - SG&A expenses decreased by $18.9 million, or 11.6%, during the nine months ended September 30, 2020, driven by lower employee compensation costs[112]. - Corporate expenses decreased by $6.8 million, or 18.2%, during the three months ended September 30, 2020, compared to the same period in 2019[96]. Government Support and Restructuring - The company received $7.2 million and $14.7 million in governmental support and wage subsidies for the three and nine months ended September 30, 2020, respectively[87]. - A restructuring plan was committed in September 2020, expected to yield annualized pre-tax cost savings of approximately $20 million in Europe and Latin America, and $7 million in the Americas segment[87]. - The company expects pre-tax annual cost savings of approximately $20 million from a restructuring plan in Europe and Latin America, with total charges estimated between $21 million to $24 million[132]. - The company anticipates completing the Europe portion of its restructuring plan by the end of 2021, with limited additional charges expected for the Americas segment[132]. Cash Flow and Liquidity - Net cash used for operating activities was $115.4 million during the nine months ended September 30, 2020, compared to $69.3 million of net cash provided in the same period of 2019[125]. - Net cash provided by investing activities was primarily driven by the April 2020 sale of Clear Media, resulting in $216.0 million of net proceeds[127]. - Net cash provided by financing activities for the nine months ended September 30, 2020, was $375.0 million from the issuance of CCIBV Senior Secured Notes and $150.0 million from the Revolving Credit Facility[128]. - As of September 30, 2020, the company had $845.0 million in cash, including $417.5 million held outside the U.S.[135]. - The company has a minimum liquidity requirement of $150 million under its financing agreements, which it was in compliance with as of September 30, 2020[137]. - As of September 30, 2020, cash and cash equivalents increased to $427.5 million from $287.8 million, representing a growth of 48.7%[142]. - Current liabilities decreased to $315.5 million from $397.1 million, a reduction of 20.5%[142]. - Long-term debt rose to $5.225 billion from $5.084 billion, an increase of 2.8%[142]. Impairment and Fair Value - The company recognized impairment charges of $27.3 million related to indefinite-lived permits and goodwill during the three months ended September 30, 2020[100]. - Impairment charges of $123.1 million and $17.5 million were recognized in the first and third quarters of 2020, respectively, due to reduced projected cash flows[148]. - The company performed impairment tests on indefinite-lived intangible assets, resulting in a fair value decrease of $46.9 million for the three months ended September 30, 2020[148]. - A hypothetical 10% reduction in estimated fair value of reporting units with goodwill would not result in material impairment as of September 30, 2020[150]. - The discount rate used for impairment testing ranged from 8.5% to 10.5% as of September 30, 2020[150]. - The fair value of billboard permits impaired during the three months ended September 30, 2020 was $46.9 million, with fair values exceeding carrying amounts by $9.0 million in total[148]. Foreign Operations and Currency Impact - Foreign operations reported net losses of $58.9 million and $232.7 million for the three and nine months ended September 30, 2020, respectively[159]. - A 10% increase in the value of the U.S. dollar relative to foreign currencies would have decreased net losses by $5.9 million and $23.3 million for the three and nine months ended September 30, 2020, respectively[159]. Cost Increases and Pricing Strategy - Inflation has led to higher costs for wages, salaries, and equipment, but the company has offset these costs by increasing effective advertising rates for most outdoor display faces[160].