0001334978-23-000014.txt : 20230509 0001334978-23-000014.hdr.sgml : 20230509 20230508194126 ACCESSION NUMBER: 0001334978-23-000014 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 65 CONFORMED PERIOD OF REPORT: 20230331 FILED AS OF DATE: 20230509 DATE AS OF CHANGE: 20230508 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Clear Channel Outdoor Holdings, Inc. CENTRAL INDEX KEY: 0001334978 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-ADVERTISING [7310] IRS NUMBER: 880318078 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-32663 FILM NUMBER: 23899540 BUSINESS ADDRESS: STREET 1: 4830 NORTH LOOP 1604W, SUITE 111 CITY: SAN ANTONIO STATE: TX ZIP: 78249 BUSINESS PHONE: 210-822-2828 MAIL ADDRESS: STREET 1: 4830 NORTH LOOP 1604W, SUITE 111 CITY: SAN ANTONIO STATE: TX ZIP: 78249 10-Q 1 cco-20230331.htm 10-Q cco-20230331
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 10-Q
(Mark One)
          QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
    FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2023
 
           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) 
ccohlogoa12.jpg
Delaware88-0318078
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
4830 North Loop 1604 West, Suite 111
San Antonio, Texas78249
(Address of principal executive offices)(Zip Code)
(210)547-8800
(Registrant's telephone number, including area code)
 Securities registered pursuant to Section 12(b) of the Act:
Title of Each ClassTrading Symbol(s)Name of Exchange on Which Registered
Common Stock, $0.01 par value per shareCCONew York Stock Exchange

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 is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes No

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 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

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.
ClassOutstanding at May 4, 2023
- - - - - - - - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - -
Common Stock, $0.01 par value per share482,843,052



CLEAR CHANNEL OUTDOOR HOLDINGS, INC.
 TABLE OF CONTENTS
1


PART I – FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS

CLEAR CHANNEL OUTDOOR HOLDINGS, INC. AND SUBSIDIARIES
INDEX TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
2

CLEAR CHANNEL OUTDOOR HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)March 31,
2023
December 31,
2022
 (Unaudited)
CURRENT ASSETS  
Cash and cash equivalents$339,976 $286,781 
Accounts receivable, net523,008 619,829 
Prepaid expenses74,072 55,371 
Other current assets31,783 27,395 
Assets held for sale 131,540 
Total Current Assets968,839 1,120,916 
PROPERTY, PLANT AND EQUIPMENT 
Structures, net555,423 556,312 
Other property, plant and equipment, net214,280 231,236 
INTANGIBLE ASSETS AND GOODWILL  
Permits, net 710,665 723,061 
Other intangible assets, net249,216 251,121 
Goodwill652,173 650,643 
OTHER ASSETS
Operating lease right-of-use assets1,522,402 1,479,634 
Other assets75,925 73,088 
Total Assets$4,948,923 $5,086,011 
CURRENT LIABILITIES  
Accounts payable$86,469 $101,621 
Accrued expenses441,950 488,782 
Current operating lease liabilities256,749 254,217 
Accrued interest109,762 80,133 
Deferred revenue95,204 60,408 
Current portion of long-term debt27,002 25,218 
Liabilities held for sale 111,161 
Total Current Liabilities1,017,136 1,121,540 
NON-CURRENT LIABILITIES
Long-term debt5,564,940 5,568,799 
Non-current operating lease liabilities1,310,665 1,277,854 
Deferred tax liabilities, net249,051 243,668 
Other long-term liabilities140,988 136,956 
Total Liabilities8,282,780 8,348,817 
Commitments and Contingencies (Note 5)
STOCKHOLDERS’ DEFICIT
Noncontrolling interests12,452 12,864 
Common stock, par value $0.01 per share: 2,350,000,000 shares authorized (491,325,901 shares issued as of March 31, 2023; 483,639,206 shares issued as of December 31, 2022)
4,913 4,836 
Additional paid-in capital3,547,471 3,543,424 
Accumulated deficit(6,504,865)(6,469,953)
Accumulated other comprehensive loss(371,733)(335,189)
Treasury stock (9,878,963 shares held as of March 31, 2023; 7,325,251 shares held as of December 31, 2022)
(22,095)(18,788)
     Total Stockholders' Deficit(3,333,857)(3,262,806)
     Total Liabilities and Stockholders' Deficit$4,948,923 $5,086,011 
 
See Condensed Notes to Consolidated Financial Statements
3

CLEAR CHANNEL OUTDOOR HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF LOSS
(UNAUDITED)
 
Three Months Ended
(In thousands, except per share data)March 31,
 20232022
Revenue$545,435 $525,688 
Operating expenses:
Direct operating expenses(1)
344,850 321,202 
Selling, general and administrative expenses(1)
118,196 108,957 
Corporate expenses(1)
34,541 43,645 
Depreciation and amortization72,963 60,407 
Other operating income, net(91,276)(4,911)
Operating income (loss)66,161 (3,612)
Interest expense, net(102,753)(82,798)
Other income (expense), net9,004 (5,999)
Loss before income taxes(27,588)(92,409)
Income tax benefit (expense)(7,834)2,680 
Consolidated net loss(35,422)(89,729)
Less amount attributable to noncontrolling interests(510)139 
Net loss attributable to the Company$(34,912)$(89,868)
Net loss attributable to the Company per share of common stock — basic and diluted$(0.07)$(0.19)
(1)Excludes depreciation and amortization

See Condensed Notes to Consolidated Financial Statements
4

CLEAR CHANNEL OUTDOOR HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(UNAUDITED)

Three Months Ended
(In thousands)March 31,
20232022
Net loss attributable to the Company$(34,912)$(89,868)
Foreign currency translation adjustments(3,680)4,265 
Reclassification adjustment for realized gains from cumulative translation adjustments and pension related to sale of Swiss business, included in “Other operating income, net”(32,862) 
Comprehensive loss(71,454)(85,603)
Less amount attributable to noncontrolling interests2 (6)
Comprehensive loss attributable to the Company$(71,456)$(85,597)

See Condensed Notes to Consolidated Financial Statements
5

CLEAR CHANNEL OUTDOOR HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT
(UNAUDITED)

Three Months Ended March 31, 2023
Controlling InterestTotal Stockholders’ Deficit
(In thousands, except share data)Common Shares IssuedNon-controlling InterestsCommon
Stock
Additional Paid-in
Capital
Accumulated
Deficit
Accumulated Other Comprehensive LossTreasury Stock
Balances at December 31, 2022483,639,206 $12,864 $4,836 $3,543,424 $(6,469,953)$(335,189)$(18,788)$(3,262,806)
Net loss(510)— — (34,912)— — (35,422)
Release of stock awards and exercise of stock options7,686,695 — 77 (77)— — (3,307)(3,307)
Share-based compensation
— — 4,124 — — — 4,124 
Payments from noncontrolling interests96 — — — — — 96 
Other comprehensive income (loss)2 — — — (3,682)— (3,680)
Disposal of Swiss business— — — — (32,862)— (32,862)
Balances at March 31, 2023491,325,901 $12,452 $4,913 $3,547,471 $(6,504,865)$(371,733)$(22,095)$(3,333,857)

Three Months Ended March 31, 2022
Controlling InterestTotal Stockholders’ Deficit
(In thousands, except share data)Common Shares IssuedNon-controlling InterestsCommon
Stock
Additional Paid-in
Capital
Accumulated
Deficit
Accumulated Other Comprehensive LossTreasury Stock
Balances at December 31, 2021474,480,862 $11,060 $4,745 $3,522,367 $(6,373,349)$(350,950)$(7,843)$(3,193,970)
Net income (loss)139 — — (89,868)— — (89,729)
Release of stock awards and exercise of stock options542,586 — 5 (5)— — (12)(12)
Share-based compensation
— — 4,714 — — — 4,714 
Payments to noncontrolling interests
(199)— — — — — (199)
Other comprehensive income (loss)(6)— — — 4,271 — 4,265 
Balances at March 31, 2022475,023,448 $10,994 $4,750 $3,527,076 $(6,463,217)$(346,679)$(7,855)$(3,274,931)

See Condensed Notes to Consolidated Financial Statements
6

CLEAR CHANNEL OUTDOOR HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)

(In thousands)Three Months Ended March 31,
20232022
Cash flows from operating activities:  
Consolidated net loss$(35,422)$(89,729)
Reconciling items:
Depreciation and amortization72,963 60,407 
Non-cash operating lease expense85,152 83,594 
Deferred taxes5,412 (1,749)
Share-based compensation4,124 4,714 
Net gain on disposal of business and operating assets(96,749)(11,841)
Foreign exchange transaction loss (gain)(9,137)6,686 
Other reconciling items, net5,894 2,773 
Changes in operating assets and liabilities, net of effects of disposition:
Decrease in accounts receivable110,532 109,948 
Increase in prepaid expenses and other operating assets(31,266)(11,042)
Decrease in accounts payable and accrued expenses(63,904)(53,772)
Decrease in operating lease liabilities(93,357)(98,948)
Increase in accrued interest29,711 29,106 
Increase in deferred revenue23,599 18,705 
Increase in other operating liabilities3,356 613 
Net cash provided by operating activities10,908 49,465 
Cash flows from investing activities:  
Capital expenditures(38,427)(35,809)
Asset acquisitions(5,675)(2,518)
Net proceeds from disposal of business and assets93,523 19,359 
Other investing activities, net(320)154 
Net cash provided by (used for) investing activities49,101 (18,814)
Cash flows from financing activities:  
Payments on long-term debt(5,501)(5,542)
Taxes paid related to net share settlement of equity awards(3,307)(12)
Other financing activities, net96 (199)
Net cash used for financing activities(8,712)(5,753)
Effect of exchange rate changes on cash, cash equivalents and restricted cash1,079 (2,270)
Net increase in cash, cash equivalents and restricted cash52,376 22,628 
Cash, cash equivalents and restricted cash at beginning of period298,682 419,971 
Cash, cash equivalents and restricted cash at end of period$351,058 $442,599 
Supplemental disclosures:  
Cash paid for interest$72,320 $51,575 
Cash paid for income taxes, net of refunds$2,122 $774 

See Condensed Notes to Consolidated Financial Statements
7

CLEAR CHANNEL OUTDOOR HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

NOTE 1 – BASIS OF PRESENTATION
Preparation of Interim Financial Statements
These consolidated financial statements include the accounts of Clear Channel Outdoor Holdings, Inc. and its subsidiaries, as well as entities in which the Company has a controlling financial interest or for which the Company is the primary beneficiary. Intercompany transactions have been eliminated in consolidation. All references in this Quarterly Report on Form 10-Q to the “Company,” “we,” “us” and “our” refer to Clear Channel Outdoor Holdings, Inc. and its consolidated subsidiaries.
The accompanying consolidated financial statements were prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) and, in the opinion of management, include all normal and recurring adjustments necessary to present fairly the results of the interim periods shown. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles have been condensed or omitted pursuant to such SEC rules and regulations. Management believes that the disclosures made are adequate to make the information presented not misleading. Due to seasonality and other factors, the results for the interim periods may not be indicative of results for the full year. The financial statements contained herein should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s 2022 Annual Report on Form 10-K, filed with the SEC on February 28, 2023.
The Company’s consolidated financial statements presented herein reflect estimates and assumptions made by management that affect the amounts reported in the consolidated financial statements and accompanying notes. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Actual results could differ from those estimates.
As described in the Company’s 2022 Annual Report on Form 10-K, the Company changed segments during the fourth quarter of 2022 to reflect changes in the way the business is managed and resources are allocated by the Company’s chief operating decision maker (“CODM”). As such, the Company has revised its segment disclosures for prior periods to conform to the current period presentation. Additionally, certain prior period amounts in the Consolidated Statement of Cash Flows have been reclassified to conform to the 2023 presentation.
Disposition
As disclosed in the Company’s 2022 Annual Report on Form 10-K, in December 2022, Clear Channel International Limited, a wholly-owned subsidiary of the Company, entered into a definitive agreement to sell its business in Switzerland to Goldbach Group AG. As such, assets and liabilities of the Company’s business in Switzerland were presented as held for sale on the Company’s Consolidated Balance Sheet as of December 31, 2022.
The conditions to closing were satisfied during the first quarter of 2023, and the sale of the Company’s business in Switzerland was completed on March 31, 2023. The Company recognized a gain on sale of $96.4 million, recorded within “Other operating income, net” on the Consolidated Statement of Loss for the three months ended March 31, 2023. Gross cash proceeds of $94.2 million are reflected as cash from investing activities within “Net proceeds from disposal of business and assets” on the Consolidated Statement of Cash Flows for the three months ended March 31, 2023.
NOTE 2 – SEGMENT DATA
The Company has four reportable segments, which it believes best reflect how the Company is currently managed: America, Airports, Europe-North and Europe-South. The Company's remaining operations in Latin America and Singapore are disclosed as “Other.”
Segment Adjusted EBITDA is the profitability metric reported to the Company’s CODM for purposes of making decisions about allocation of resources to, and assessing performance of, each reportable segment. Segment Adjusted EBITDA is calculated as revenue less direct operating expenses and selling, general and administrative expenses, excluding restructuring and other costs, which are defined as costs associated with cost-saving initiatives such as severance, consulting and termination costs and other special costs. Segment information for total assets is not presented as this information is not used by the Company’s CODM in measuring segment performance or allocating resources between segments.
The following table presents the Company’s reportable segment results for the three months ended March 31, 2023 and 2022. As described in Note 1, the Company has revised its segment disclosures for the prior period to conform to the current period presentation.
8

CLEAR CHANNEL OUTDOOR HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

(In thousands)Three Months Ended March 31,
 20232022
Revenue
America$236,049 $239,256 
Airports53,789 55,883 
Europe-North128,503 122,098 
Europe-South108,015 89,550 
Other19,079 18,901 
Total$545,435 $525,688 
Capital Expenditures(1)
America$16,808 $14,800 
Airports4,751 3,012 
Europe-North7,066 6,450 
Europe-South5,051 8,623 
Other1,921 1,003 
Corporate2,830 1,921 
Total$38,427 $35,809 
Segment Adjusted EBITDA
America$81,365 $100,406 
Airports6,264 9,930 
Europe-North7,172 6,974 
Europe-South(12,220)(21,807)
Other369 460 
Total$82,950 $95,963 
Reconciliation of Segment Adjusted EBITDA to Consolidated Net Loss Before Income Taxes
Segment Adjusted EBITDA$82,950 $95,963 
Less reconciling items:
Corporate expenses(2)
34,541 43,645 
Depreciation and amortization72,963 60,407 
Restructuring and other costs(3)
561 434 
Other operating income, net(91,276)(4,911)
Interest expense, net102,753 82,798 
Other expense (income), net(9,004)5,999 
Consolidated net loss before income taxes$(27,588)$(92,409)
(1)In addition to payments that occurred during the period for capital expenditures, as disclosed here and in the Consolidated Statements of Cash Flows, the Company had $18.0 million and $16.6 million of accrued capital expenditures that remained unpaid as of March 31, 2023 and 2022, respectively.
(2)Corporate expenses include expenses related to infrastructure and support, including information technology, human resources, legal, finance and administrative functions of each of the Company’s reportable segments, as well as overall executive, administrative and support functions. Share-based payments and certain restructuring and other costs are recorded in corporate expenses.
(3)The restructuring and other costs line item in this reconciliation excludes those restructuring and other costs related to corporate functions, which are included within the Corporate expenses line item.
9

CLEAR CHANNEL OUTDOOR HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

NOTE 3 – REVENUE
The Company generates revenue primarily from the sale of advertising space on printed and digital out-of-home advertising displays. Certain of these revenue transactions are considered leases for accounting purposes as the contracts convey to customers the right to control the use of the Company’s advertising displays for a period of time. The Company accounts for revenue from leases in accordance with Accounting Standards Codification (“ASC”) Topic 842, while the Company’s remaining revenue transactions are accounted for as revenue from contracts with customers in accordance with ASC Topic 606.
Disaggregation of Revenue
The following table shows revenue from contracts with customers, revenue from leases and total revenue, disaggregated by geography, for the three months ended March 31, 2023 and 2022:
(In thousands)Revenue from contracts with customersRevenue from leasesTotal revenue
Three Months Ended March 31, 2023
U.S.(1)
$144,557 $145,281 $289,838 
Europe(2)
219,034 17,484 236,518 
Other(3)
13,413 5,666 19,079 
Total$377,004 $168,431 $545,435 
Three Months Ended March 31, 2022
U.S.(1)
$147,880 $147,259 $295,139 
Europe(2)
194,100 17,548 211,648 
Other(3)
13,398 5,503 18,901 
Total$355,378 $170,310 $525,688 
(1)U.S. revenue, which also includes revenue derived from airport displays in the Caribbean, is comprised of revenue from the Company’s America and Airports segments.
(2)Europe revenue is comprised of revenue from the Company’s Europe-North and Europe-South segments.
(3)Other includes the Company’s businesses in Latin America and Singapore.
Revenue from Contracts with Customers
The following tables show the Company’s beginning and ending accounts receivable and deferred revenue balances from contracts with customers:
Three Months Ended March 31,
(In thousands)
2023(1)
2022
Accounts receivable, net of allowance, from contracts with customers:
  Beginning balance$480,016 $492,706 
  Ending balance392,838 390,049 
Deferred revenue from contracts with customers:
  Beginning balance$32,369 $42,016 
  Ending balance54,521 56,955 
(1)The beginning balances for the three months ended March 31, 2023 exclude accounts receivable and deferred revenue from contracts with customers that were held for sale as of December 31, 2022.
During the three months ended March 31, 2023 and 2022, respectively, the Company recognized $26.0 million and $32.3 million of revenue that was included in the deferred revenue from contracts with customers balance at the beginning of the respective year.
10

CLEAR CHANNEL OUTDOOR HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

The Company’s contracts with customers generally have terms of one year or less. However, as of March 31, 2023, the Company expected to recognize $83.6 million of revenue in future periods for remaining performance obligations from current contracts with customers that have an original expected duration of greater than one year, with the majority of this amount to be recognized over the next five years.
NOTE 4 – LONG-TERM DEBT
Long-term debt outstanding as of March 31, 2023 and December 31, 2022 consisted of the following:
(In thousands)March 31,
2023
December 31,
2022
Term Loan Facility Due 2026(1),(2)
$1,930,000 $1,935,000 
Revolving Credit Facility Due 2024  
Receivables-Based Credit Facility Due 2024  
Clear Channel Outdoor Holdings 5.125% Senior Secured Notes Due 2027
1,250,000 1,250,000 
Clear Channel Outdoor Holdings 7.75% Senior Notes Due 2028
1,000,000 1,000,000 
Clear Channel Outdoor Holdings 7.5% Senior Notes Due 2029
1,050,000 1,050,000 
Clear Channel International B.V. 6.625% Senior Secured Notes Due 2025
375,000 375,000 
Other debt(3)
36,844 36,798 
Original issue discount(5,242)(5,596)
Long-term debt fees(44,660)(47,185)
Total debt5,591,942 5,594,017 
Less: Current portion27,002 25,218 
Total long-term debt$5,564,940 $5,568,799 
(1)The term loans under the Term Loan Facility amortize in equal quarterly installments in an aggregate annual amount equal to 1.00% of the original principal amount of such term loans, with the balance being payable on August 23, 2026. In accordance with these terms, the Company paid $5.0 million of the outstanding principal on the Term Loan Facility during the three months ended March 31, 2023.
(2)On February 20, 2023, the Senior Secured Credit Agreement was amended to establish Adjusted Term Secured Overnight Financing Rate (“SOFR”) (as defined therein) as the alternate rate of interest applicable to the Company’s Term Loan Facility in connection with the cessation of London Interbank Offered Rate (“LIBOR”). Please refer to the Company’s 2022 Annual Report on Form 10-K for additional details regarding this amendment.
(3)Other debt includes finance leases and various borrowings utilized for general operating purposes, including a state-guaranteed loan with a third-party lender of €30.0 million, or approximately $32.5 million at current exchange rates.
The aggregate market value of the Company’s debt based on market prices for which quotes were available was approximately $4.8 billion and $4.7 billion as of March 31, 2023 and December 31, 2022, respectively. Under the fair value hierarchy established by ASC Section 820-10-35, the inputs used to determine the market value of the Company’s debt are classified as Level 1.
As of March 31, 2023, the Company was in compliance with all covenants contained in its debt agreements.
Letters of Credit, Surety Bonds and Guarantees
As of March 31, 2023, the Company had $43.2 million of letters of credit outstanding under its Revolving Credit Facility, resulting in $131.8 million of remaining excess availability, and $43.1 million of letters of credit outstanding under its Receivables-Based Credit Facility, resulting in $73.5 million of excess availability. Additionally, as of March 31, 2023, the Company had $86.0 million and $32.1 million of surety bonds and bank guarantees outstanding, respectively, a portion of which was supported by $9.0 million of cash collateral. These letters of credit, surety bonds and bank guarantees relate to various operational matters, including insurance, bid, concession and performance bonds, as well as other items.
11

CLEAR CHANNEL OUTDOOR HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

NOTE 5 – COMMITMENTS AND CONTINGENCIES
Legal Proceedings
The Company and its subsidiaries are involved in certain legal proceedings arising in the ordinary course of business and, as required, have accrued an estimate of the probable costs for the resolution of those claims for which the occurrence of loss is probable and the amount can be reasonably estimated. These estimates have been developed in consultation with counsel and are based upon an analysis of potential results, assuming a combination of litigation and settlement strategies. It is possible, however, that future results of operations for any particular period could be materially affected by changes in the Company’s assumptions or the effectiveness of its strategies related to these proceedings. Additionally, due to the inherent uncertainty of litigation, there can be no assurance that the resolution of any particular claim or proceeding would not have a material adverse effect on the Company’s financial condition or results of operations.
Although the Company is involved in a variety of legal proceedings in the ordinary course of business, a large portion of the Company’s litigation arises in the following contexts: commercial disputes, employment and benefits related claims, land use and zoning disputes, governmental fines, intellectual property claims and tax disputes.
China Investigation
Two former employees of Clear Media Limited (“Clear Media”), a former indirect, non-wholly-owned subsidiary of the Company, have been convicted in China of certain crimes, including the crime of misappropriation of Clear Media funds, and sentenced to imprisonment. The Company is not aware of any litigation, claim or assessment pending against the Company in relation to this proceeding.
The Company advised both the SEC and the U.S. Department of Justice (the “DOJ”) of the investigation of Clear Media and continues to cooperate with these agencies. Subsequent to the announcement that the Company was considering a strategic review of its stake in Clear Media, in March 2020, the Company received a subpoena from the staff of the SEC and a Grand Jury subpoena from the U.S. Attorney's Office for the Eastern District of New York, both in connection with the previously disclosed investigations. On April 28, 2020, the Company tendered the shares representing its 50.91% stake in Clear Media to Ever Harmonic Global Limited, a special-purpose vehicle wholly-owned by a consortium of investors, which includes the chief executive officer and an executive director of Clear Media, and on May 14, 2020, the Company received the final proceeds of the sale.
The SEC and DOJ investigation could implicate the books and records, internal controls and anti-bribery provisions of the U.S. Foreign Corrupt Practices Act, which statute and regulations provide for potential monetary penalties as well as criminal and civil sanctions. As previously disclosed, the Company is meeting with these agencies to engage in discussions about potential resolution of these matters, including potential settlement. Based on the discussions to date, the Company recorded an estimated liability during the first quarter of 2022 to account for a potential resolution of these matters. However, at this time, the Company cannot predict the eventual scope, duration or outcome of these discussions, including whether a settlement will be reached, the amount of any potential monetary payments or the scope of injunctive or other relief, the results of which may be materially adverse to the Company, its financial condition and its results of operations. At this time, the Company is unable to reasonably estimate, or provide any assurance regarding, the amount of any potential loss in excess of the amount accrued relating to this investigation.
NOTE 6 – INCOME TAXES
Income Tax Benefit (Expense)
The Company’s income tax benefit (expense) for the three months ended March 31, 2023 and 2022 consisted of the following components:
(In thousands)Three Months Ended March 31,
 20232022
Current tax benefit (expense)$(2,422)$931 
Deferred tax benefit (expense)(5,412)1,749 
Income tax benefit (expense)$(7,834)$2,680 
12

CLEAR CHANNEL OUTDOOR HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

The effective tax rates for the three months ended March 31, 2023 and 2022 were (28.4)% and 2.9%, respectively. These rates were primarily impacted by the valuation allowance recorded against current period deferred tax assets resulting from losses and interest expense carryforwards in the U.S. and certain foreign jurisdictions due to uncertainty regarding the Company’s ability to realize those assets in future periods. The effective tax rate for the three months ended March 31, 2023 was also impacted by the sale of the Company’s business in Switzerland.
NOTE 7 – PROPERTY, PLANT AND EQUIPMENT
The Company’s property, plant and equipment consisted of the following classes of assets as of March 31, 2023 and December 31, 2022:
(In thousands)March 31,
2023
December 31,
2022
Structures$2,341,336 $2,317,552 
Furniture and other equipment250,153 244,154 
Land, buildings and improvements153,014 154,439 
Construction in progress64,304 80,567 
Property, plant and equipment, gross2,808,807 2,796,712 
Less: Accumulated depreciation(2,039,104)(2,009,164)
Property, plant and equipment, net$769,703 $787,548 
NOTE 8 – INTANGIBLE ASSETS AND GOODWILL
Intangible Assets
The following table presents the gross carrying amount and accumulated amortization for each major class of intangible assets as of March 31, 2023 and December 31, 2022:
(In thousands)March 31, 2023December 31, 2022
 Gross Carrying AmountAccumulated AmortizationGross Carrying AmountAccumulated Amortization
Permits(1)
$742,732 $(32,067)$739,119 $(16,058)
Transit, street furniture and other outdoor contractual rights422,386 (386,610)420,838 (383,184)
Permanent easements(1)
162,759  160,688  
Trademarks83,569 (32,971)83,569 (30,889)
Other1,384 (1,301)1,302 (1,203)
Total intangible assets$1,412,830 $(452,949)$1,405,516 $(431,334)
(1)During the three months ended March 31, 2023, the Company acquired permits and permanent easements of $3.5 million and $2.1 million, respectively, as part of asset acquisitions. The acquired permit has an amortization period of 16 years.
Goodwill
The following table presents changes in the goodwill balance for the Company’s segments with goodwill during the three months ended March 31, 2023:
(In thousands)AmericaAirportsEurope-NorthConsolidated
Balance as of December 31, 2022(1)
$482,937 $24,882 $142,824 $650,643 
Foreign currency impact  1,530 1,530 
Balance as of March 31, 2023$482,937 $24,882 $144,354 $652,173 
(1)The balance at December 31, 2022 is net of cumulative impairments of $2.6 billion for America, $79.4 million for Europe-North, $128.9 million for Europe-South and $90.4 million for Other.
13

CLEAR CHANNEL OUTDOOR HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

NOTE 9 – COST-SAVINGS INITIATIVES
Restructuring Plan to Reduce Headcount
During 2020, the Company committed to a restructuring plan to reduce headcount in its Europe business, which was executed through the fourth quarter of 2021 when the impacted employees were terminated. Since then, any additional costs incurred, or in some cases reversed, related to residual restructuring activity in the Company’s Europe-South segment. As of March 31, 2023, the Company had incurred cumulative costs of $37.4 million in its Europe-South segment in connection with this restructuring plan. Substantially all costs have been severance benefits and related costs, and remaining costs associated with this restructuring plan are not expected to be significant.
As of March 31, 2023, the remaining liability related to this restructuring plan was $5.7 million. The Company expects to pay most of this balance by the end of 2023. The following table presents changes in this liability balance during the three months ended March 31, 2023:
(In thousands)Europe-South
Liability balance as of December 31, 2022
$7,203 
Costs incurred, net(1)
157 
Costs paid or otherwise settled(1,745)
Foreign currency impact90 
Liability balance as of March 31, 2023
$5,705 
(1)Costs are reported in “Direct operating expenses” and “Selling, general and administrative expenses” on the Consolidated Statements of Loss. They are categorized as Restructuring and other costs and are therefore excluded from Segment Adjusted EBITDA.
NOTE 10 – NET LOSS PER SHARE
The following table presents the computation of net loss per share for the three months ended March 31, 2023 and 2022:
(In thousands, except per share data)Three Months Ended
March 31,
 20232022
Numerator:  
Net loss attributable to the Company – common shares$(34,912)$(89,868)
Denominator:  
Weighted average common shares outstanding – basic478,501 470,568 
Weighted average common shares outstanding – diluted478,501 470,568 
Net loss attributable to the Company per share of common stock:  
Basic$(0.07)$(0.19)
Diluted$(0.07)$(0.19)
Outstanding equity awards of 19.2 million and 27.6 million for the three months ended March 31, 2023 and 2022, respectively, were not included in the computation of diluted earnings per share because to do so would have been anti-dilutive.
14

CLEAR CHANNEL OUTDOOR HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

NOTE 11 — OTHER INFORMATION
Reconciliation of Cash, Cash Equivalents and Restricted Cash
The following table reconciles cash and cash equivalents reported in the Consolidated Balance Sheets to the cash, cash equivalents and restricted cash reported in the Consolidated Statements of Cash Flows:
(In thousands)March 31,
2023
December 31,
2022
Cash and cash equivalents in the Balance Sheets$339,976 $286,781 
Cash and cash equivalents included in Assets held for sale 569 
Restricted cash included in:
  Other current assets2,764 2,763 
Assets held for sale 512 
  Other assets8,318 8,057 
Total cash, cash equivalents and restricted cash in the Statements of Cash Flows$351,058 $298,682 
Accounts Receivable
The following table discloses the components of “Accounts receivable, net,” as reported in the Consolidated Balance Sheets:
(In thousands)March 31,
2023
December 31,
2022
Accounts receivable$547,582 $642,390 
Less: Allowance for credit losses(24,574)(22,561)
Accounts receivable, net$523,008 $619,829 
Credit loss expense related to accounts receivable was $2.7 million and $0.3 million during the three months ended March 31, 2023 and 2022, respectively. The increase was driven by specific reserves for certain customers.
Share-Based Compensation
On May 2, 2023, the Compensation Committee of the Company’s Board of Directors approved grants of 15.0 million restricted stock units (“RSUs”) and 3.4 million performance stock units (“PSUs”) to certain of its employees.
The RSUs generally vest in three equal annual installments on each of April 1, 2024, April 1, 2025 and April 1, 2026, provided that the recipient is still employed by, or providing services to, the Company on each such vesting date.
The PSUs vest and become earned based on the achievement of the Company’s total shareholder return relative to the Company’s peer group (the “Relative TSR”) over a performance period commencing on April 1, 2023 and ending on March 31, 2026 (the “Performance Period”). If the Company achieves Relative TSR at the 75th percentile or higher, the PSUs will be earned at 150% of the target number of shares; if the Company achieves Relative TSR at the 50th percentile, the PSUs will be earned at 100% of the target number of shares; if the Company achieves Relative TSR at the 25th percentile, the PSUs will be earned at 50% of the target number of shares; and if the Company achieves Relative TSR below the 25th percentile, no PSUs will be earned. To the extent Relative TSR is between achievement levels, the portion of the PSUs that is earned will be determined using straight-line interpolation. Notwithstanding the foregoing, to the extent the Company’s absolute total shareholder return over the Performance Period is less than 0%, the maximum payout shall not be greater than 100% of the target number of shares. The PSUs are considered market-condition awards pursuant to ASC Topic 260, Earnings Per Share.
Other Comprehensive Income (Loss)
There were no significant changes in deferred income tax liabilities resulting from adjustments to other comprehensive income (loss) during the three months ended March 31, 2023 and 2022.
15

ITEM 2.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Management’s discussion and analysis of our financial condition and results of operations (“MD&A”) should be read in conjunction with the condensed consolidated financial statements and related notes contained in Item 1 of Part I of this Quarterly Report on Form 10-Q and the Company's 2022 Annual Report on Form 10-K. All references in this Quarterly Report on Form 10-Q to the “Company,” “we,” “us” and “our” refer to Clear Channel Outdoor Holdings, Inc. and its consolidated subsidiaries.
The MD&A is organized as follows:
Overview – Discussion of the nature, key developments and trends of our business in order to provide context for the remainder of this MD&A.
Results of Operations – Analysis of our financial results of operations at the consolidated and segment levels.
Liquidity and Capital Resources – Analysis of our short- and long-term liquidity and discussion of our material cash requirements and the anticipated sources of funds needed to satisfy such requirements.
This discussion contains forward-looking statements that are subject to risks and uncertainties, and actual results may differ materially from those contained in any forward-looking statements. See “Cautionary Statement Concerning Forward-Looking Statements” contained at the end of this MD&A.
OVERVIEW
Description of Our Business and Segments
Our revenue is derived from selling advertising space on the out-of-home displays we own or operate in key markets worldwide using various digital and traditional display types. Effective December 31, 2022, we have four reportable business segments: America, which consists of our U.S. operations excluding airports; Airports, which includes revenue from U.S. and Caribbean airports; Europe-North, which consists of operations in the United Kingdom (the “U.K.”), the Nordics and several other countries throughout northern and central Europe; and Europe-South, which consists of operations in France, Switzerland (prior to its sale on March 31, 2023), Spain and Italy. Our remaining operations in Latin America and Singapore are disclosed as “Other.” We have conformed the segment disclosures for the prior period in this MD&A and throughout this Quarterly Report on Form 10-Q to the current period presentation.
Macroeconomic Trends and Seasonality
As described in our 2022 Annual Report on Form 10-K, global inflation increased in 2022, and in response, central banks, including the U.S. Federal Reserve, raised interest rates significantly, resulting in an increase in our weighted average cost of debt. Interest rates have continued to rise in the first quarter of 2023, and while inflation rates have slowed, global inflation remains high and has impacted our results due to higher costs, particularly in Europe. We believe we have partially offset these higher costs by increasing the effective advertising rates for our products.
Additionally, our international results are impacted by the economic conditions in the foreign markets in which we operate and by fluctuations in foreign currency exchange rates. During 2022, the U.S. dollar significantly strengthened against the Euro and British pound sterling, among other European currencies, peaking in the third quarter. The U.S. dollar has since trended weaker, and fluctuations in foreign currency exchange rates did not have a significant impact on our reported results in the first quarter of 2023. While inflation, interest rates and foreign currency exchange rates may be less volatile in 2023, fluctuations in these indicators are uncertain and could result in further adverse impacts to our reported results. The market risks that our business is subject to are further described in Item 3 of Part I of this Quarterly Report on Form 10-Q.
Subsequent to the filing of our 2022 Annual Report on Form 10-K on February 28, 2023, the U.S. banking market experienced increased volatility as a result of several distressed or closed banks. While we have not realized any losses as a result of this increased market volatility, we continue to monitor the situation and will take appropriate measures, as necessary, to minimize potential risk exposure to our customers’ and our cash and investment balances.
We believe the out-of-home industry has demonstrated resilience from macroeconomic events, and during the first quarter of 2023, we observed healthy demand from advertisers. However, we expect country level growth rates to vary throughout the year. During the quarter, we saw some weakness within the U.S. due to specific issues impacting certain national accounts that we do not believe are related to broader macroeconomic events.
Due to seasonality, the results for the interim period are not indicative of expected results for the full year. We typically experience our weakest financial performance in the first quarter of the calendar year, which is generally offset during the remainder of the year as our business typically experiences its strongest performance in the second and fourth quarters of the calendar year.
16

Disposition and Strategic Reviews
As described in our 2022 Annual Report on Form 10-K, we entered into an agreement in December 2022 to sell our business in Switzerland to Goldbach Group AG. On March 31, 2023, we completed this sale and received gross proceeds of $94.2 million.
Our reviews of strategic alternatives for our other European businesses, including the potential disposal of certain of our European assets, remain ongoing. However, there can be no assurance that these reviews will result in any transactions or particular outcomes. We have not set a timetable for completion of these reviews, may suspend the processes at any time and do not intend to make further announcements regarding these processes unless and until our Board of Directors approves a specific course of action for which further disclosure is appropriate.
RESULTS OF OPERATIONS
The discussion of our results of operations is presented on both a consolidated and segment basis.
Our operating segment profit measure is Segment Adjusted EBITDA, which is calculated as revenue less direct operating expenses and selling, general and administrative expenses, excluding restructuring and other costs, which are defined as costs associated with cost-saving initiatives such as severance, consulting and termination costs and other special costs. The material components of Segment Adjusted EBITDA are discussed below on both a consolidated and segment basis.
Corporate expenses, depreciation and amortization, other operating income and expense, all non-operating income and expenses, and income taxes are managed on a total company basis and are therefore included only in our discussion of consolidated results.
Revenue and expenses “excluding the impact of movements in foreign exchange rates” in this MD&A are presented because management believes that viewing certain financial results without the impact of fluctuations in foreign currency rates facilitates period-to-period comparisons of business performance and provides useful information to investors. Revenue and expenses “excluding the impact of movements in foreign exchange rates” are calculated by converting the current period’s revenue and expenses in local currency to U.S. dollars using average monthly foreign exchange rates for the same period of the prior year.
Consolidated Results of Operations
(In thousands)Three Months Ended
March 31,
%
 20232022Change
Revenue$545,435 $525,688 3.8%
Operating expenses:
Direct operating expenses(1)
344,850 321,202 7.4%
Selling, general and administrative expenses(1)
118,196 108,957 8.5%
Corporate expenses(1)
34,541 43,645 (20.9)%
Depreciation and amortization72,963 60,407 20.8%
Other operating income, net(91,276)(4,911)
Operating income (loss)66,161 (3,612)
Interest expense, net(102,753)(82,798) 
Other income (expense), net9,004 (5,999) 
Loss before income taxes(27,588)(92,409) 
Income tax benefit (expense)(7,834)2,680  
Consolidated net loss(35,422)(89,729) 
Less amount attributable to noncontrolling interest
(510)139  
Net loss attributable to the Company$(34,912)$(89,868) 
(1)Excludes depreciation and amortization
17

Consolidated Revenue
Consolidated revenue increased $19.7 million, or 3.8%, during the three months ended March 31, 2023 compared to the same period of 2022. Excluding the $15.2 million impact of movements in foreign exchange rates, consolidated revenue increased $34.9 million, or 6.6%, driven by increased demand in our Europe-North and Europe-South segments.
Consolidated Direct Operating Expenses
Consolidated direct operating expenses increased $23.6 million, or 7.4%, during the three months ended March 31, 2023 compared to the same period of 2022. Excluding the $12.3 million impact of movements in foreign exchange rates, consolidated direct operating expenses increased $35.9 million, or 11.2%, largely due to higher site lease expense mainly driven by new and amended lease contracts and higher revenue. We also incurred higher production, installation and maintenance expenses largely driven by higher prices and increased sales activity in Europe.
The following table provides additional information about certain drivers of consolidated direct operating expenses:
(In thousands)Three Months Ended
March 31,
%
20232022Change
Site lease expense$240,312 $222,164 8.2 %
Site lease expense, excluding movements in foreign exchange rates247,601 222,164 11.4 %
Reductions of rent expense on lease and non-lease contracts from rent abatements
7,273 9,603 (24.3)%
Restructuring and other costs508 
Consolidated Selling, General and Administrative (“SG&A”) Expenses
Consolidated SG&A expenses increased $9.2 million, or 8.5%, during the three months ended March 31, 2023 compared to the same period of 2022. Excluding the $3.2 million impact of movements in foreign exchange rates, consolidated SG&A expenses increased $12.5 million, or 11.4%, most notably driven by higher employee compensation costs, higher credit loss expense due to specific reserves for certain customers, and higher marketing costs.
The following table provides the restructuring and other costs included within SG&A expenses during the three months ended March 31, 2023 and 2022:
(In thousands)Three Months Ended
March 31,
%
20232022Change
Restructuring and other costs$53 $430 (87.7)%
Corporate Expenses
Corporate expenses decreased $9.1 million, or 20.9%, during the three months ended March 31, 2023 compared to the same period of 2022. Excluding the $0.8 million impact from movements in foreign exchange rates, corporate expenses decreased $8.3 million, or 19.0%, due to lower restructuring and other costs largely driven by estimated legal liabilities recorded in the first quarter of 2022.
The following table provides additional information about certain drivers of corporate expenses:
(In thousands)Three Months Ended
March 31,
%
20232022Change
Share-based compensation expense$4,124 $4,714 (12.5)%
Restructuring and other costs (reversals)(55)9,070 (100.6)%
18

Depreciation and Amortization
Depreciation and amortization increased $12.6 million, or 20.8%, during the three months ended March 31, 2023 compared to the same period of 2022. Excluding the $1.2 million impact of movements in foreign exchange rates, depreciation and amortization increased $13.8 million, or 22.8%. The increase was driven by a change in the classification of billboard permit intangible assets in our America segment from indefinite-lived to finite-lived in the fourth quarter of 2022, which resulted in a $16.0 million increase in amortization expense during the three months ended March 31, 2023 compared to the same period of 2022. This was partially offset by the impact of other assets becoming fully depreciated.
Other Operating Income, Net
Other operating income, net, of $91.3 million during the three months ended March 31, 2023 was driven by a $96.4 million gain on the sale of our business in Switzerland, partially offset by costs related to the strategic reviews of our other Europe businesses.
Other operating income, net, of $4.9 million during the three months ended March 31, 2022 was driven by compensation received from local governments for the condemnation and removal of billboards, less a reduction in the underlying value of the condemned assets, in certain markets in our America segment. This was partially offset by costs related to the strategic reviews of our Europe businesses.
Interest Expense, Net
Interest expense, net, increased $20.0 million during the three months ended March 31, 2023 compared to the same period of 2022 driven by higher interest rates on our Term Loan Facility.
Other Income (Expense), Net
Other income, net, of $9.0 million and other expense, net, of $6.0 million during the three months ended March 31, 2023 and 2022, respectively, primarily resulted from net foreign exchange gains and losses recognized in connection with intercompany notes denominated in a currency other than the functional currency, driven by fluctuations in the value of the U.S. dollar against foreign currencies, particularly the Euro and British pound sterling.
Income Tax Benefit (Expense)
The effective tax rates for the three months ended March 31, 2023 and 2022 were (28.4)% and 2.9%, respectively. These rates were primarily impacted by the valuation allowance recorded against current period deferred tax assets resulting from losses and interest expense carryforwards in the U.S. and certain foreign jurisdictions due to uncertainty regarding the Company’s ability to realize those assets in future periods. The effective tax rate for the three months ended March 31, 2023 was also impacted by the sale of the Company’s business in Switzerland.
America Results of Operations
(In thousands)Three Months Ended
March 31,
%
 20232022Change
Revenue$236,049 $239,256 (1.3)%
Direct operating expenses(1)
104,817 94,651 10.7%
SG&A expenses(1)
49,881 44,543 12.0%
Segment Adjusted EBITDA81,365 100,406 (19.0)%
(1)Includes restructuring and other costs that are excluded from Segment Adjusted EBITDA
America Revenue
America revenue decreased $3.2 million, or 1.3%, during the three months ended March 31, 2023 compared to the same period of 2022. Lower revenue from print displays was partially offset by higher revenue from digital displays, which increased 3.6%, as follows:
(In thousands)Three Months Ended
March 31,
%
20232022Change
Digital revenue$78,018 $75,332 3.6%
Percent of total segment revenue33.1 %31.5 %
19

Revenue generated from national sales comprised 33.1% and 35.8% of America revenue for the three months ended March 31, 2023 and 2022, respectively, while the remainder of revenue was generated from local sales.
America Direct Operating Expenses
America direct operating expenses increased $10.2 million, or 10.7%, during the three months ended March 31, 2023 compared to the same period of 2022 primarily due to higher site lease expense mainly driven by new and amended lease contracts and lower rent abatements. The following table provides additional information about certain of these drivers:
(In thousands)Three Months Ended
March 31,
%
20232022Change
Site lease expense
$83,030 $73,294 13.3%
Reductions of rent expense on lease and non-lease contracts from rent abatements1,204 3,667 (67.2)%
America SG&A Expenses
America SG&A expenses increased $5.3 million, or 12.0%, during the three months ended March 31, 2023 compared to the same period of 2022 largely due to higher credit loss expense driven by specific reserves for certain customers and higher employee compensation costs largely driven by increased headcount.
Airports Results of Operations
(In thousands)Three Months Ended
March 31,
%
 20232022Change
Revenue$53,789 $55,883 (3.7)%
Direct operating expenses39,651 38,437 3.2%
SG&A expenses7,874 7,516 4.8%
Segment Adjusted EBITDA6,264 9,930 (36.9)%
Airports Revenue
Airports revenue decreased $2.1 million, or 3.7%, during the three months ended March 31, 2023 compared to the same period of 2022 driven by the timing of campaign spending in certain airports. Digital revenue decreased 3.3% during the three months ended March 31, 2023 as compared to the same period of 2022, as follows:
(In thousands)Three Months Ended
March 31,
%
20232022Change
Digital revenue$29,578 $30,581 (3.3)%
Percent of total segment revenue55.0 %54.7 %
Revenue generated from national sales comprised 60.1% and 55.2% of Airports revenue for the three months ended March 31, 2023 and 2022, respectively, while the remainder of revenue was generated from local sales.
Airports Direct Operating Expenses
Airports direct operating expenses increased $1.2 million, or 3.2%, during the three months ended March 31, 2023 compared to the same period of 2022 driven by higher site lease expense. The following table provides additional information about certain drivers of Airports direct operating expenses:
(In thousands)Three Months Ended
March 31,
%
20232022Change
Site lease expense
$36,250 $34,639 4.7%
Reductions of rent expense on lease and non-lease contracts from rent abatements5,507 4,602 19.7%
20

Europe-North Results of Operations
(In thousands)Three Months Ended
March 31,
%
 20232022Change
Revenue$128,503 $122,098 5.2%
Direct operating expenses(1)
96,032 90,275 6.4%
SG&A expenses(1)
25,533 25,143 1.6%
Segment Adjusted EBITDA7,172 6,974 2.8%
(1)Includes restructuring and other costs that are excluded from Segment Adjusted EBITDA
Europe-North Revenue
Europe-North revenue increased $6.4 million, or 5.2%, during the three months ended March 31, 2023 compared to the same period of 2022. Excluding the $11.7 million impact of movements in foreign exchange rates, Europe-North revenue increased $18.1 million, or 14.9%, driven by increased demand and new contracts. We have seen year-over-year increases in revenue across all of our products and in all of the countries in which we operate, with the largest increases in Belgium, Sweden and the U.K.
Europe-North digital revenue increased 5.9% during the three months ended March 31, 2023 as compared to the same period of 2022, or 16.1% excluding the impact of movements in foreign exchange rates, as follows:
(In thousands)Three Months Ended
March 31,
%
20232022Change
Digital revenue$65,317 $61,677 5.9%
Percent of total segment revenue50.8 %50.5 %
Digital revenue, excluding movements in foreign exchange rates71,610